<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1997.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
NORRELL CORPORATION
(Exact name of registrant as specified in its charter)
---------------------
<TABLE>
<S> <C>
GEORGIA 58-0953079
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
3535 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
(404) 240-3000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
MARK H. HAIN, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NORRELL CORPORATION
3535 PIEDMONT ROAD N.E.
ATLANTA, GEORGIA 30305
(404) 240-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
<TABLE>
<S> <C>
JAMES L. SMITH, III, ESQ. GABRIEL DUMITRESCU, ESQ.
DANIEL T. FALSTAD, ESQ. MARK A. LOEFFLER, ESQ.
TROUTMAN SANDERS LLP POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
NATIONSBANK PLAZA, SUITE 5200 SIXTEENTH FLOOR
600 PEACHTREE STREET, N.E. 191 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308 ATLANTA, GEORGIA 30303
(404) 885-3000 (404) 572-6600
</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 any of the 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 interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value............ 3,277,500 shares $34.19 $112,057,725 $33,957
======================================================================================================================
</TABLE>
(1) Includes 427,500 shares that the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of determining the registration fee and
calculated in accordance with Rule 457(c) under the Securities Act on the
basis of the average of the high and low sales prices of the Company's
Common Stock on June 16, 1997, as reported by the New York Stock Exchange.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
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.
SUBJECT TO COMPLETION, DATED JUNE 20, 1997
2,850,000 SHARES
NORRELL(R) CORPORATION
COMMON STOCK
Of the 2,850,000 shares of common stock, no par value (the "Common Stock"),
offered hereby, 2,500,000 shares are being offered by Norrell Corporation (the
"Company" or "Norrell") and 350,000 shares are being offered by the Selling
Shareholders. See "Principal and Selling Shareholders." The Company will not
receive any of the proceeds from the sale of shares by the Selling Shareholders.
The Common Stock is listed on the New York Stock Exchange under the symbol
"NRL." On June 17, 1997, the last reported sales price of the Common Stock on
the New York Stock Exchange was $34 1/2 per share. See "Price Range of Common
Stock and Dividend Policy."
FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE "RISK FACTORS" ON PAGES 7-9.
---------------------
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>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS* COMPANY+ SHAREHOLDERS
<S> <C> <C> <C> <C>
Per Share................................... $ $ $ $
Total++..................................... $ $ $ $
</TABLE>
- ---------------
* The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). See "Underwriting."
+ Before deducting expenses of the offering payable by the Company estimated to
be $300,000.
++ The Company has granted to the Underwriters a 30-day option to purchase up to
427,500 additional shares of Common Stock on the same terms per share solely
to cover over-allotments, if any. If such option is exercised in full, the
total price to the public will be $ , the total underwriting
discounts and commissions will be $ and the total proceeds to the
Company will be $ . See "Underwriting."
-----------------------
The Common Stock is being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the delivery of the certificates
therefor will be made at the offices of Dillon, Read & Co. Inc., New York, New
York on or about , 1997. The Underwriters include:
DILLON, READ & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY
COMPANY, INC.
The date of this Prospectus is , 1997
<PAGE> 3
[SEE APPENDIX P. A-1 FOR GRAPHICAL MATERIAL OMITTED.]
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE
PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK
OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON STOCK, AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in or incorporated by
reference into this Prospectus. Unless otherwise indicated, (i) all information
in this Prospectus assumes no exercise of the Underwriters' over-allotment
option, (ii) all share and per share data in this Prospectus have been adjusted
to reflect a two for one stock split effected on June 24, 1996, and (iii)
references to "Norrell" or the "Company" are to the operations of Norrell
Corporation and its subsidiaries and joint ventures. The references to fiscal
years by date refer to the Company's fiscal year ending in that particular
calendar year; for example, "fiscal 1996" refers to the Company's fiscal year
ended October 27, 1996.
THE COMPANY
The Company is a leading provider of staffing, outsourcing and professional
services. The Company is organized into three business groups: Staffing
Services, which provides temporary administrative, teleservices and light
industrial staffing; Outsourcing Services, which provides administrative
services and teleservices in which the Company assumes responsibility for the
results of a client process; and Professional Services, which provides
accounting staffing, information technology staffing, project management
services and systems integration consulting services. The Company's customers
are businesses, professional and service organizations, and government agencies
in the United States and Canada. Based upon revenues, the Company believes it is
one of the largest companies in the staffing industry in North America.
The Company provides a broad range of services through its national network
of 441 locations, including 145 Company-owned locations, 125 outsourcing
services locations, 134 franchised locations, and 37 professional services
offices as of April 27, 1997. In fiscal 1996, the Company supplied to
approximately 19,000 clients (including subsidiaries and affiliated companies)
in the United States and Canada over 225,000 staffing, outsourcing and
professional personnel ("employees"). The Company's employees possess a wide
variety of office, light industrial, information technology and other skills,
including secretarial, clerical, word processing, data entry, graphics,
telemarketing, assembly, picking, packing and sorting, shipping and receiving,
customer service, records management, administrative, human resources
(recruiting, interviewing, assessment and training), computer programming,
computer consulting, systems analysis, systems integration, accounting and
additional financial services.
Since its incorporation in Georgia in 1965, the Company's quality service
and customer focus have enabled it to compile a history of core business growth
and expansion. From its beginnings as a provider of short-term replacement or
fill-in personnel, often referred to as traditional temporary services, the
Company has expanded into long-term staffing, managed staffing, "Master Vendor
Partnering" and outsourcing. In addition, the Company has expanded
geographically from a base of locally owned and operated offices in Atlanta,
Georgia, to a national network of 441 locations. In the last several years, the
Company has supplemented this internal growth with six acquisitions and three
joint ventures which not only added to the Company's geographic markets, but
also increased revenues and expertise in desirable service offerings such as
information technology, financial services and teleservices. Since fiscal 1993,
net revenues and operating income have grown 20.7% and 62.6%, respectively, on a
compound annual basis, from $576.7 million and $10.2 million, respectively, to
$1,013.9 million and $43.8 million, respectively, in fiscal 1996.
BUSINESS STRATEGY
The Company's objective is to continue to be a leading national provider of
staffing, outsourcing, and professional services. The key components of the
Company's strategy are as follows:
Offer a Seamless Spectrum of Strategic Workforce Management
Solutions. Through its national network of offices, the Company offers
strategic workforce management for clients committed to high quality,
value-added services which are customized to strengthen a specific client's
organiza-
3
<PAGE> 5
tional effectiveness and flexibility. The Company partners with these
clients to diagnose workforce problems and design an integrated service
solution, ranging from short-term staff augmentation to comprehensive
workforce structures that include dedicated management teams. The Company
also believes that clients increasingly are seeking to reduce the number of
vendors for services and that those companies, like Norrell, that can offer
a broad array of services under one organization will benefit from this
trend.
Maintain High Quality Service Focus. The Company is dedicated to
providing high quality services and believes it is an industry leader in
its quality focus and related performance measurement systems. To maintain
a consistently high quality standard for all of its employees, the Company
uses a number of automated systems to screen and evaluate potential
employees, to make appropriate assignments, to evaluate and review
employees' performance, and to obtain and act upon client feedback. These
extensive, integrated and automated quality measurement and control systems
distinguish the Company from its competitors and help to attract and retain
customers seeking consistent results and a nationwide approach to their
staffing needs. To ensure that it is able to continue to grow while
maintaining its high quality and customer service standards, the Company
has invested over $38.1 million since the beginning of fiscal 1995 through
April 27, 1997, and will continue to invest in technology and information
related software and hardware. These investments have included integrating
the Company's personnel and client databases nationwide, automating many
tasks at the branch level, and enhancing back-office efficiency. The
Company believes these initiatives have enabled it to respond to its
customers' needs, increase productivity and support the Company's growth.
Develop and Expand Service Offerings. The Company plans to grow its
existing base of business by continuing to develop service offerings that
complement its core business. Services added in the last three years
through joint ventures, acquisitions and internal growth include
information technology staffing and consulting (including systems
integration), financial staffing, and outsourced call center management. By
cross-selling these new services to existing accounts, the Company believes
that it will increase the volume of business within its current base of
over 19,000 clients. The Company also anticipates that it will continue to
attract new clients based upon its comprehensive solutions approach. In
addition to expanding its existing service offerings, the Company
continually evaluates new service offerings which will enable it to better
meet its clients' needs.
Pursue Strategic Acquisitions. The Company will continue to pursue
strategic acquisition opportunities that allow the Company to develop new
services, support additional management expertise or enter key geographic
markets. Since July 1995, the Company has acquired three information
technology services, one accounting services and two staffing services
businesses. The Company believes that the professional services
acquisitions represent business opportunities with growth and profitability
potential in excess of the Company's core staffing business. In addition,
the Company believes that each of these acquired businesses will be
integrated quickly into the Company, will expand the Company's range of
services offered, and will offer future growth prospects.
The Company's principal executive offices are located at 3535 Piedmont
Road, NE, Atlanta, Georgia 30305, and its telephone number is (404) 240-3000.
4
<PAGE> 6
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.................. 2,500,000 shares
Common Stock offered by Selling Shareholders......... 350,000 shares
-------------------
Total Common Stock offered................. 2,850,000 shares
===================
Common Stock to be outstanding after the offering.... 26,553,485(1)
Use of proceeds by the Company....................... To repay certain indebtedness. See "Use of
Proceeds."
New York Stock Exchange symbol....................... NRL
</TABLE>
- ------------
(1) Does not include 3,759,142 shares of Common Stock issuable upon the
exercise of stock options and stock purchase rights outstanding as of May 25,
1997.
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should carefully
consider all information set forth in this Prospectus, including the information
set forth in "Risk Factors" on pages 7-9, prior to making an investment
decision.
5
<PAGE> 7
SUMMARY FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR (1) SIX MONTHS ENDED
------------------------------------------------------------------- -------------------------
APRIL 28, APRIL 27,
1992 1993 1994 1995 1996 1996 1997
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues................. $ 412,071 $ 576,748 $ 701,921 $ 842,360 $ 1,013,877 $ 479,585 $ 599,177
Gross profit............. 107,644 140,461 158,591 185,843 218,864 102,757 130,800
Income from operations... 12,215 10,177 24,995 31,837 43,754 19,310 29,639
Income from continuing
operations before
income taxes........... 6,759 5,982 27,631 29,844 41,069 18,476 25,293
Net income from
continuing
operations............. 3,107 3,283 15,804 17,326 25,257 11,363 15,680
Earnings per common share
from continuing
operations............. $ 0.13 $ 0.13 $ 0.69 $ 0.71 $ 1.00 $ 0.46 $ 0.61
Weighted average number
of shares
outstanding............ 23,895,000 24,872,000 22,782,000 24,357,000 25,344,000 24,852,000 25,837,000
PRO FORMA STATEMENT OF
INCOME DATA(2):
Income from operations... $ 11,347 $ 18,801 $ 24,344 $ 31,837 $ 43,754 $ 19,310 $ 29,639
Income from continuing
operations before
income taxes........... 5,982 14,697 22,064 29,844 41,069 18,476 25,293
Net income from
continuing
operations............. 2,749 8,048 12,618 17,326 25,257 11,363 15,680
Earnings per common share
from continuing
operations............. $ 0.11 $ 0.32 $ 0.51 $ 0.71 $ 1.00 $ 0.46 $ 0.61
Weighted average number
of shares
outstanding............ 24,810,000 24,810,000 24,894,000 24,357,000 25,344,000 24,852,000 25,837,000
SERVICE LOCATIONS:
Company-owned staffing... 115 115 115 121 133 135 145
Franchised staffing(3)... 112 103 107 119 133 124 134
Outsourcing(4)........... 43 59 75 91 105 99 125
Professional............. 1 2 2 21 30 22 37
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total
locations...... 271 279 299 352 401 380 441
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
APRIL 27, 1997
--------------------------
ACTUAL AS ADJUSTED(5)
-------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital............................................. $100,806 $
Total assets................................................ 411,753
Total debt.................................................. 132,259
Shareholders' equity........................................ 117,733
</TABLE>
- ---------------
(1) Fiscal year 1992 ended November 1, 1992, fiscal year 1993 ended October
31, 1993, fiscal year 1994 ended October 30, 1994, fiscal year 1995 ended
October 29, 1995 and fiscal year 1996 ended October 27, 1996.
(2) The pro forma data excludes the effects in 1992, 1993 and 1994 of the
following unusual or nonrecurring items of income or expense: (i) excluding from
1994 a $5.4 million pre-tax gain on redemption of a preferred stock investment
and a $472,000 net pre-tax gain from settlement of interest rate swaps, (ii)
excluding from 1993 a $9.5 million pre-tax write-off of goodwill and software
development costs, and a provision for lease, legal and other costs primarily
related to a subsidiary of the Company that was sold in 1993, (iii) giving
effect to the 1994 redemption of 5,335,320 shares of the Company's Common Stock
as of the first day of the first period presented, and (iv) assuming the Company
was public on the first day of the first period presented (giving effect to
application of the proceeds of the Company's 1994 initial public offering to
reduce debt, and offset by costs of being a public company).
(3) Occasionally, the Company acquires a franchised office and operates it
as a Company-owned office until it is refranchised. Such offices are included in
franchised locations.
(4) Outsourcing services are generally performed at the clients' facilities.
(5) Adjusted to reflect the sale of 2,500,000 shares of Common Stock offered
by the Company hereby after deducting underwriting discounts and commissions and
estimated expenses of the offering, and the application of the estimated net
proceeds as described in "Use of Proceeds."
6
<PAGE> 8
RISK FACTORS
Prospective purchasers of the Common Stock should carefully consider the
factors set forth below, as well as the other information contained in this
Prospectus, in evaluating an investment in the Common Stock offered hereby.
EFFECT OF FLUCTUATIONS IN THE GENERAL ECONOMY
Demand for temporary services is sensitive to the general level of economic
activity in the country. When economic activity slows, many companies reduce
their usage of temporary employees before undertaking layoffs of their full-time
employees. Therefore, a significant economic downturn could have a material
adverse effect on the Company's business.
INCREASED EMPLOYEE COSTS
As the labor market tightens, there is greater demand and competition for
skilled workers needed to fill client orders. In such labor markets, wages
generally increase. There can be no assurance that all such increased wage costs
can be passed on to clients through increased charges. The Company is also
responsible for and pays unemployment insurance premiums and workers'
compensation costs for its temporary employees. Unemployment insurance premiums
are set annually by the states in which employees perform services and may
increase as a result of, among other things, increased levels of unemployment
and the extension of periods for which unemployment benefits are available.
Workers' compensation costs may increase as a result of, among other things,
increases in benefit levels or the liberalization of allowable claims.
Furthermore, annual workers' compensation expenses and the related liability
accrual are based on various estimates, including estimates of the costs of
future benefits. The Company believes that its reserves for workers'
compensation claims are adequate, but there can be no assurance that such claims
will not exceed estimated reserves. There can be no assurance that the Company
will be able to increase the charges to its clients if expenses related to
workers' compensation and unemployment insurance increase or if the wages it
must pay to its employees generally increase.
COMPETITION
The temporary services industry is highly competitive with limited barriers
to entry. The Company competes in national, regional and local markets with full
service agencies and with specialized temporary services agencies. Several of
these competitors have greater marketing and financial resources than those of
the Company and could attempt to increase market share through decreased prices.
The Company also competes with numerous local and single office firms in
particular markets which are able to compete effectively on price because of
their lower overhead structures. In addition, large national companies that
presently operate in "niche" segments of the outsourcing and professional
services markets could expand their operations to compete with the outsourcing
and professional services provided by the Company. Strong competition from
companies with significantly greater financial resources than the Company could
have a material adverse effect on the Company's operations and profitability.
ABILITY TO CONTINUE COMPANY GROWTH; ACQUISITION STRATEGY
The Company has experienced significant growth over the past several years,
principally by increasing the volume of services provided through existing
offices and by adding new services. There can be no assurance that the Company
will continue to be able to maintain or expand its market presence, successfully
enter new markets, add new services or integrate acquired businesses into its
operations. The ability of the Company to continue its growth will depend on a
number of factors, including existing and emerging competition, the availability
of working capital to support such growth, and the Company's ability to (i)
maintain margins in the face of pricing pressures, (ii) manage its costs, (iii)
recruit and train additional qualified personnel, (iv) sell outsourcing and
professional
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<PAGE> 9
services to large corporate clients, (v) develop and expand its service
offerings, and (vi) find new qualified franchisees. Expansion through
acquisitions is also a component of the Company's growth strategy. Acquisitions
may result in unanticipated difficulties in integrating acquired businesses with
the Company's existing business and may absorb a disproportionate amount of
management time. Once integrated, acquisitions may not achieve levels of
revenue, profitability or productivity which are comparable to the Company's
existing operations or otherwise perform as expected. Moreover, the Company's
continued ability to make acquisitions is dependent upon, and may be limited by,
the availability of acquisition candidates at reasonable valuations and the
Company's ability to obtain acquisition financing on acceptable terms. See
"Business -- Business Strategy."
RELIANCE ON SIGNIFICANT CLIENTS
During fiscal 1995 and fiscal 1996, revenues generated by the Company from
contracts with International Business Machines Corporation ("IBM") equaled
$136.2 million and $158.6 million, respectively, representing 16.2% and 15.6%,
respectively, of the Company's consolidated revenues for such periods.
Approximately 31.0% and 21.4% of these revenues were received during fiscal 1995
and fiscal 1996, respectively, for services performed under a Management
Services Agreement. The balance of the Company's IBM-related revenues were
generated under multiple contracts with different purchasing units within IBM.
Also, during fiscal 1996, revenues generated by the Company from multiple
contracts with United Parcel Service, Inc. ("UPS") equaled $122.2 million,
representing 12.0% of the Company's consolidated revenues for fiscal 1996. The
loss of either IBM or UPS as a client would have a material adverse effect on
the Company's results of operations and financial condition.
EMPLOYER RISKS
The Company is in the business of employing people and placing them in the
workplace of other businesses. An attendant risk of such activities includes
possible claims of discrimination and harassment, employment of illegal aliens
and other similar claims. Although the Company has policies and guidelines in
place to reduce its exposure to these risks, a failure to follow these policies
and guidelines may result in negative publicity and the payment by the Company
of money damages or fines.
DEPENDENCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of its
executive officers and senior management as well as those of its field, office
and operations managers. If the Company is unable to attract and retain
qualified and skilled employees to perform these services for the Company, the
Company's business could be materially adversely affected.
INTANGIBLE ASSETS
As of April 27, 1997, approximately $123.4 million, or 30.0%, of the
Company's total assets were intangible assets. These intangible assets
substantially represent amounts attributable to goodwill recorded in connection
with the Company's acquisitions. Any impairment in the value of such assets
could have a material adverse effect on the Company's financial condition and
results of operations.
CONTROL BY PRINCIPAL SHAREHOLDER AND MANAGEMENT
As of May 25, 1997, the Company's Chairman of the Board, Guy W. Millner,
beneficially owned 9,263,676 shares of Common Stock, representing approximately
38.5% of the outstanding Common Stock. After this offering, Mr. Millner will
beneficially own approximately 34.9% of the outstanding Common Stock (34.3% if
the Underwriters' over-allotment option is exercised in full), and the directors
and executive officers of the Company, as a group, will beneficially own an
aggregate of 11,334,517 shares of Common Stock, representing approximately 41.0%
of the outstanding Common Stock (40.4% if the Underwriters' over-allotment
option is exercised in full). As a result, Mr. Millner and, if they should
determine to act together, the directors and executive officers of the Company
as a
8
<PAGE> 10
group, will be able to exercise significant influence over the outcome of any
matters or block certain matters which might normally be submitted to the
shareholders of the Company for their approval, including the election of
directors and the authorization of other corporate actions requiring shareholder
approval. See "-- Anti-Takeover Considerations" and "Principal and Selling
Shareholders."
ANTI-TAKEOVER CONSIDERATIONS
The Company's Amended and Restated Articles of Incorporation (the
"Articles") and the Georgia Business Corporation Code contain certain provisions
that could have the effect of making it more difficult for a party to acquire,
or of discouraging a party from attempting to acquire, control of the Company
without approval of the Company's Board of Directors. In addition, a two-thirds
vote of the holders of the outstanding voting stock of the Company is required:
(i) by the Articles to approve certain mergers, consolidations and dispositions
of assets of the Company, unless approved by two-thirds of the Board of
Directors of the Company; (ii) by the Company's Amended and Restated Bylaws (the
"Bylaws") to remove members of the Board of Directors with or without cause; and
(iii) by the Articles to amend or rescind the provisions set forth in (i) and
(ii) above or to remove the provisions in the Bylaws establishing a classified
Board of Directors. The foregoing, together with the combined stock ownership of
the Company's Chairman of the Board and management, may discourage tender offers
or other bids for the Common Stock at a premium over its market price.
VOLATILITY OF STOCK PRICE
From time to time, there may be significant volatility in the market price
for the Common Stock. Quarterly operating results of the Company or of other
staffing companies, changes in general conditions in the economy, the financial
markets or the staffing industry, natural disasters or other developments could
cause the market price of the Common Stock to fluctuate substantially. In
addition, in recent years the stock market has experienced extreme price and
volume fluctuations. This volatility has had a significant effect on the market
prices of securities issued by many companies for reasons unrelated to their
operating performance. See "Price Range of Common Stock and Dividend Policy."
FORWARD-LOOKING INFORMATION
This Prospectus, including the information incorporated by reference
herein, contains various forward-looking statements and information that are
based on the Company's belief and assumptions, as well as information currently
available to the Company. When used in this Prospectus, the words "believe,"
"anticipate," "estimate," "expect," and similar expressions are intended to
identify forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Such
statements are subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or expected. Among the key factors that may have a direct
bearing on the Company's operating results are fluctuations in the economy, the
degree and nature of competition, demand for the Company's services, the
Company's ability to complete acquisitions and integrate the operations of
acquired businesses, the Company's ability to recruit and place employees, the
Company's ability to expand into new markets, and the Company's ability to
maintain profit margins in the face of pricing pressures.
9
<PAGE> 11
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock offered hereby by the Company at an assumed public offering price
of $ per share are estimated to be approximately $
(approximately $ if the Underwriters' over-allotment option is
exercised in full), after deducting the underwriting discounts and commissions
and the estimated offering expenses. All of the net proceeds to the Company will
be used to repay indebtedness outstanding under its $150.0 million Committed
Revolving Credit Facility (the "Revolving Credit Facility") and other unsecured
bank lines of credit totaling $50.0 million. The Company believes that reducing
such indebtedness will provide it with increased flexibility and access to funds
for future acquisitions which may be considered by the Company. The Company will
not receive any proceeds from the sale of Common Stock offered hereby by the
Selling Shareholders.
The Revolving Credit Facility expires on September 30, 1999, and, at May
25, 1997, had an outstanding principal balance of $120.0 million with a weighted
average interest rate at May 25, 1997, of 6.35% per annum. The unsecured bank
lines of credit had an aggregate outstanding balance at May 25, 1997, of $23.8
million at a weighted average interest rate of 5.70%. This indebtedness was
incurred to finance the acquisitions of Comtex Information Systems, Inc. in
January 1997 and Analytical Technologies, Inc. and ANATEC Canada, Inc. in July
1996 and to fund working capital needs including accounts receivable.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is traded on the New York Stock Exchange (the
"NYSE") under the symbol "NRL." The following table sets forth for the fiscal
periods indicated the high and low sales prices of the Common Stock and
quarterly cash dividends per share.
<TABLE>
<CAPTION>
PRICE RANGE
--------------- DIVIDENDS
HIGH LOW PAID
FISCAL 1995 -------- --- ---------
<S> <C> <C> <C>
First Quarter............................................... $ 9 7/8 $7 3/4 $0.03
Second Quarter.............................................. 12 1/8 9 1/2 0.03
Third Quarter............................................... 12 1/8 9 1/2 0.03
Fourth Quarter.............................................. 17 11 3/4 0.03
FISCAL 1996
First Quarter............................................... $ 16 5/8 $13 1/4 $0.035
Second Quarter.............................................. 19 1/8 12 3/4 0.035
Third Quarter............................................... 28 3/4 18 3/8 0.035
Fourth Quarter.............................................. 33 26 5/8 0.035
FISCAL 1997
First Quarter............................................... $ 29 7/8 $22 $0.04
Second Quarter.............................................. 28 7/8 22 1/2 0.04
Third Quarter (through June 17, 1997)....................... 34 1/4 24 3/4 --
</TABLE>
On June 17, 1997, the last reported sales price of the Common Stock on the
NYSE was $34 1/2. As of June 17, 1997, there were 221 holders of record of the
Common Stock.
The Company began paying a quarterly dividend in the first quarter of
fiscal 1995 and expects to continue paying a regular quarterly dividend. The
determination of the amount of future cash dividends, if any, to be declared and
paid, however, will depend upon, among other things, the Company's financial
condition, funds from operations, the level of its capital expenditures and its
future business prospects. The Revolving Credit Agreement contains certain
restrictions including certain limitations on the payment of dividends.
10
<PAGE> 12
CAPITALIZATION
The following table sets forth the actual total capitalization of the
Company at April 27, 1997, and the total capitalization on an adjusted basis
giving effect to adjustments which reflect the sale of the shares of Common
Stock offered hereby (at an assumed public offering price of $ per
share) and the application of the estimated net proceeds therefrom as described
under "Use of Proceeds."
<TABLE>
<CAPTION>
APRIL 27, 1997
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Notes payable............................................... $ 349 $
Bank lines of credit........................................ 11,670
-------- --------
Total current debt................................ 12,019
Long-term debt, less current maturities..................... 120,240
-------- --------
Total debt........................................ 132,259
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares
authorized, no shares issued and outstanding........... -- --
Common stock, stated value $.01 per share; 50,000,000
shares authorized, 23,999,360 shares issued and
outstanding (26,499,360 shares, as adjusted)(1)........ 240
Receivables from officers and employees................... (125)
Additional paid-in capital................................ 50,250
Treasury stock, at cost; 32,565 shares.................... (790)
Retained earnings......................................... 68,158
-------- --------
Total shareholders' equity........................ 117,733
-------- --------
Total capitalization.............................. $249,992 $
======== =========
</TABLE>
- ------------
(1) Does not include 3,817,597 shares of Common Stock issuable upon the
exercise of stock options and stock purchase rights outstanding as of April 27,
1997.
11
<PAGE> 13
BUSINESS
The Company is a leading provider of staffing, outsourcing and professional
services. The Company is organized into three business groups: Staffing
Services, which provides temporary administrative, teleservices and light
industrial staffing; Outsourcing Services, which provides administrative
services and teleservices in which the Company assumes responsibility for the
results of a client process; and Professional Services, which provides
accounting staffing, information technology staffing, project management
services and systems integration consulting services. The Company's customers
are businesses, professional and service organizations, and government agencies
in the United States and Canada. Based upon revenues, the Company believes it is
one of the largest companies in the staffing industry in North America.
The Company provides a broad range of services through its national network
of 441 locations, including 145 Company-owned locations, 125 outsourcing
services locations, 134 franchised locations, and 37 professional services
offices as of April 27, 1997. In fiscal 1996, the Company supplied to
approximately 19,000 clients (including subsidiaries and affiliated companies)
in the United States and Canada over 225,000 staffing, outsourcing and
professional personnel. The Company's employees possess a wide variety of
office, light industrial, information technology and other skills, including
secretarial, clerical, word processing, data entry, graphics, telemarketing,
assembly, picking, packing and sorting, shipping and receiving, customer
service, records management, administrative, human resources (recruiting,
interviewing, assessment and training), computer programming, computer
consulting, systems analysis, systems integration, accounting and additional
financial services.
Since its incorporation in Georgia in 1965, the Company's quality service
and customer focus have enabled it to compile a history of core business growth
and expansion. From its beginnings as a provider of short-term replacement or
fill-in personnel, often referred to as traditional temporary services, the
Company has expanded into long-term staffing, managed staffing, "Master Vendor
Partnering" and outsourcing. In addition, the Company has expanded
geographically from a base of locally owned and operated offices in Atlanta,
Georgia, to a national network of 441 locations. In the last several years, the
Company has supplemented this internal growth with six acquisitions and three
joint ventures which not only added to the Company's geographic markets, but
also increased revenues and expertise in desirable service offerings such as
information technology, financial services and teleservices.
BUSINESS STRATEGY
The Company's objective is to continue to be a leading national provider of
staffing, outsourcing, and professional services. The key components of the
Company's strategy are as follows:
Offer a Seamless Spectrum of Strategic Workforce Management
Solutions. Through its national network of offices, the Company offers
strategic workforce management for clients committed to high quality,
value-added services which are customized to strengthen a specific client's
organizational effectiveness and flexibility. The Company partners with
these clients to diagnose workforce problems and design an integrated
service solution, ranging from short-term staff augmentation to
comprehensive workforce structures that include dedicated management teams.
The Company also believes that clients increasingly are seeking to reduce
the number of vendors for services and that those companies, like Norrell,
that can offer a broad array of services under one organization will
benefit from this trend.
Maintain High Quality Service Focus. The Company is dedicated to
providing high quality services and believes it is an industry leader in
its quality focus and related performance measurement systems. To maintain
a consistently high quality standard for all of its employees, the Company
uses a number of automated systems to screen and evaluate potential
employees, to make appropriate assignments, to evaluate and review
employees' performance, and to obtain and act upon client feedback. These
extensive, integrated and automated quality measurement and control systems
distinguish the Company from its competitors and help to attract and retain
customers
12
<PAGE> 14
seeking consistent results and a nationwide approach to their staffing
needs. To ensure that it is able to continue to grow while maintaining its
high quality and customer service standards, the Company has invested over
$38.1 million since the beginning of fiscal 1995 through April 27, 1997 and
will continue to invest in technology and information related software and
hardware. These investments have included integrating the Company's
personnel and client databases nationwide, automating many tasks at the
branch level, and enhancing back-office efficiency. The Company believes
these initiatives have enabled it to respond to its customers' needs,
increase productivity and support its growth.
Develop and Expand Service Offerings. The Company plans to grow its
existing base of business by continuing to develop service offerings that
complement its core business. Services added in the last three years
through joint ventures, acquisitions and internal growth include
information technology staffing and consulting (including systems
integration), financial staffing, and outsourced call center management. By
cross-selling these new services to existing accounts, the Company believes
that it will increase the volume of business within its current base of
over 19,000 clients. The Company also anticipates that it will continue to
attract new clients based upon its comprehensive solutions approach. In
addition to expanding its existing service offerings, the Company
continually evaluates new service offerings which will enable it to better
meet its clients' needs.
Pursue Strategic Acquisitions. The Company will continue to pursue
strategic acquisition opportunities that allow the Company to develop new
services, acquire additional management expertise or enter key geographic
markets. Since July 1995, the Company has acquired three information
technology services, one accounting services and two staffing services
businesses. The Company believes that the professional services
acquisitions represent business opportunities with growth and profitability
potential in excess of the Company's core staffing business. In addition,
the Company believes that each of these acquired businesses will be
integrated quickly into the Company, will expand the Company's range of
services offered, and will offer future growth prospects.
BUSINESS GROUPS
The Company has classified its businesses into three business groups:
Staffing Services, Outsourcing Services, and Professional Services.
Staffing Services
Temporary Staffing. Employees may be assigned to work for a client for
either a specified or indefinite period of time as necessary to meet the needs
of clients. The expense and inconvenience to a client of recruiting workers,
including advertising, interviewing and testing, conducting reference and
background checks and drug testing are reduced when temporary personnel are
engaged. Use of these services also enables the client to eliminate or reduce
record keeping, expenses associated with fringe benefits, turnover and related
personnel costs usually associated with its workers. A client pays only for
actual hours worked by temporary personnel and may terminate the use of
temporary services without the adverse effects of layoffs. The Company also
offers short-term staffing, sometimes referred to as project or peak period
staffing, through which the Company can meet fluctuating staffing requirements
quickly and easily, helping clients maintain high levels of productivity without
the need to add permanent staff. The Company defines short-term staffing as an
assignment of less than six months that involves one-time, seasonal or recurring
use of at least five temporary employees. During fiscal 1996, the Company
generated $323.3 million in revenues from its temporary staffing services.
Long-Term Staffing. The Company offers long-term staffing options tailored
to specific client needs. Through long-term staffing, the Company provides and
supervises temporary employees for functions or departments on an extended
basis. The Company defines long-term staffing as the staffing
13
<PAGE> 15
of specific positions for six months or more. During fiscal 1996, the Company
generated $191.5 million in revenues from its long-term staffing services.
Managed Staffing. The Company emphasizes managed staffing, which is the
staffing of positions with personnel on a planned and continuing basis, in most
cases with one of the Company's on-site managers who is trained to manage the
contingent workforce process. Managed staffing represents a cost-effective
solution for employers who spend a significant amount of administrative and
personnel department time managing employees whose jobs are generally routine
and are characterized by high turnover rates and also for employers in
industries with fluctuating personnel needs. Such employers use staffing
personnel as a valuable management tool to control overhead costs and enhance
profitability. Examples of managed staffing clients of the Company include
customer service centers, distribution centers, and various light manufacturing
and packaging businesses. The Company's managed staffing business grew 26.9%
during fiscal 1996 from $65.3 million in revenues in fiscal 1995 to $82.9
million in revenues in fiscal 1996.
Master Vendor Partnering ("MVP"). The Company offers its MVP program to
its clients in conjunction with its other service offerings. Through its MVP
program, the Company acts as a general manager for all of the client's external
staffing needs. The Company provides a broad spectrum of solutions from staffing
to call center services to information technology services to help the client
meet its changing needs. The MVP program enables the client to significantly
increase its organizational flexibility and effectiveness. During fiscal 1996,
revenues from the Company's MVP program increased 66.7% from $85.8 million in
fiscal 1995 to $143.0 million in fiscal 1996.
Outsourcing Services
The Company today provides a portfolio of outsourcing services including
administrative (secretarial, clerical, graphics, desktop publishing,
multimedia), corporate and general services (mail center management, courier
management, shipping/receiving, records retention), document processing
(imaging, personnel records management, electronic data interchange, accounts
payable, data entry, invoicing), and call center services. Typical outsourcing
arrangements have many of the following characteristics: the Company supplies
and manages the staff, the agreement contains specific service productivity and
quality measurements, extends a year or longer, covers a defined scope of work,
and has a gainsharing agreement. Outsourcing services are generally performed by
the Company's subsidiary, Tascor Incorporated ("Tascor"), and by its joint
venture entities CallTask Incorporated, NorCross Teleservices, Inc., and
HealthTask L.P. In fiscal 1996, the Company's outsourcing revenues were $208.1
million, an increase of 19.7% over fiscal 1995, which had $173.9 million in
outsourcing revenues.
Professional Services
The Company's Professional Services group includes the Company's
information technology services companies and Norrell Financial Staffing, a
division of the Company's Norrell Services, Inc. subsidiary.
Information technology services is the Company's newest product platform,
built with three acquisitions: Analytical Technologies, Inc. and ANATEC Canada,
Inc. (collectively referred to as "ANATEC") and American Technical Resources,
Inc. ("ATR"), which were acquired in fiscal 1996, and Comtex Information
Systems, Inc. ("Comtex"), which was acquired on January 2, 1997. Through its
information technology services, the Company delivers full life-cycle solutions
including technology consulting, project management, software development,
documentation services, and education and training. The Company also provides
systems planning and development, systems integration, organizational consulting
related to business transformation, and staff augmentation support. The Company
provides contract employees from its national database of information technology
professionals.
Norrell Financial Staffing is led by staffing consultants who are
experienced accounting and financial professionals with the ability to recruit,
screen and hire financial specialists ranging from a
14
<PAGE> 16
chief financial officer to an accounting clerk. During fiscal 1996, the Company
experienced significant growth in financial staffing due to growth of existing
accounts and an increase in office locations. In addition, in November 1996, the
Company acquired Accounting Resources, Inc., a privately held financial
placement firm in Providence, Rhode Island, which provides staffing, permanent
placement and executive search services to clients in various industries.
QUALITY AND TECHNOLOGY
The Company is dedicated to providing high quality services and believes it
is an industry leader in its quality focus and technological approach including
related measurement systems. In order to maintain a consistently high quality
standard for all of its temporary and staffing employees, the Company uses
automated systems to screen and evaluate potential employees, to make
appropriate assignments, and to evaluate and review an employee's performance.
The Company's quality system, Qualisys, is comprised of three major components:
(i) Exact Match(TM), a screening and placement process which matches the
employee to the client's needs; (ii) B.O.S.S., its Branch Office Support System,
an extensive database of client and personnel information; and (iii)
I.R.I.S.(TM), or Integrated Research Information System, by which the Company
obtains direct client feedback and measures individual employee performance.
These automated services enable the Company to provide staffing services quickly
and efficiently, monitor client needs and utilization trends, measure the
Company's service quality and evaluate and train its employees. This extensive,
integrated and automated quality measurement and control system distinguishes
the Company from its competitors. With its outsourcing clients, the Company also
develops customized performance measurement benchmarks and systems for each
client contract as requested. These standards and systems are designed with
client input and take into account clients' quality needs and standards.
In 1995 the Company began an initiative to install state-of-the-art systems
in order to support the substantial growth of the Company, provide better
support for the Company's national accounts, and facilitate the integration of
newly acquired companies. These systems will complete the Company's transition
to a client/server system architecture. In 1997 and beyond, the Company will
leverage this new platform to introduce system extensions intended to enhance
productivity and further its competitive edge. The Company believes that its
B.O.S.S., I.R.I.S.(TM), Exact Match(TM) and payroll systems give the Company a
competitive edge in service delivery over its competitors, in that selected
client and temporary employee information, including client satisfaction survey
results, are available electronically in each office and at the corporate
headquarters.
ORGANIZATIONAL STRUCTURE
The Company provides its services through a national network of 441
Company-owned locations, franchised locations, outsourcing locations, and
professional services locations.
Company-Owned Operations. The Company owns and operates staffing services
offices in major markets, each of which is managed by a Norrell manager who is
responsible for most aspects of the Company's business within that market. These
responsibilities include sales and client development, recruitment and retention
of employees and the implementation of Norrell's marketing strategies. The
Company provides extensive training to field managers, sales representatives and
operations personnel in all of these areas. A substantial portion of field
employees' compensation is based on financial performance, including the
attainment of profit objectives. Company-owned offices operating in "middle
markets" (generally markets with populations between 500,000 and 1.5 million
people) are operated under special incentive arrangements by managers who
receive lower salaries and higher incentive compensation relative to managers of
other Company-owned offices.
Franchised Operations. The Company currently operates franchised offices
throughout the United States and in Canada and Puerto Rico. The Company
developed its initial franchise strategy in the mid-1960s as an important
element of its overall growth plans. Franchising provides the opportunity to
enter targeted markets with substantially less capital than would be required to
establish Company-
15
<PAGE> 17
owned offices. The Company's primary franchise target markets are cities with
populations between 50,000 and 500,000 people. The Company also establishes
franchised offices under its trade name Dynamic People(SM) to increase market
penetration in major markets in which the Company may also operate Company-owned
offices.
Outsourcing Operations. The Company currently has operations at sites
throughout the United States responsible for the delivery of outsourcing
services. The majority of the Company's outsourcing operations are located on
site at its customers' facilities, and the remaining outsourcing sites are
located in leased offices. Other than regional offices and its corporate offices
in the Company's headquarters building, the Company's outsourcing subsidiary
does not maintain sales or administrative offices separate from the locations at
which client services are performed, allowing the Company to control the growth
of overhead costs. Outsourcing services are delivered by employees who are hired
by the Company to perform services during the term of an outsourcing contract.
These employees and related field operations are managed by the Company's site
managers and area managers who are responsible for service delivery, customer
satisfaction, and sales of additional services to current customers through both
expansion of existing contracts as well as the addition of new contracts.
Professional Services Operations. The Company operates 37 professional
services offices in the principal markets it currently serves. Norrell Financial
Staffing served its clients from 25 locations as of April 27, 1997, up from 17
at the end of fiscal 1995. Information technology clients are served from 12
locations. Each location is managed by a financial or information technology
professional responsible for its marketing strategies.
16
<PAGE> 18
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock as of May 25, 1997,
except as noted below, and as adjusted to reflect the sale of the Common Stock
in this offering, by: (i) each shareholder who is known by the Company to own
beneficially more than 5% of the Common Stock; (ii) the executive officers and
directors of the Company as a group; and (iii) the Selling Shareholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES
OWNED PRIOR TO BENEFICIALLY OWNED
OFFERING(1) NUMBER OF AFTER OFFERING(1)
5% SHAREHOLDERS AND EXECUTIVE --------------------- SHARES BEING -------------------
OFFICERS AND DIRECTORS NUMBER PERCENT OFFERED NUMBER PERCENT
----------------------------- ---------- ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Guy W. Millner.................................. 9,263,676(2) 38.5% -- 9,263,676 34.9%
3535 Piedmont Road, N.E.
Atlanta, Georgia 30305
MI Holdings, Inc................................ 2,252,844(2) 9.4 -- 2,252,844 8.5
3108 Piedmont Road, N.E.
Suite 105
Atlanta, Georgia 30305
Warburg, Pincus Counsellors, Inc................ 1,204,300(3) 5.0 -- 1,204,300 4.5
466 Lexington Avenue
New York, New York 10017
C. Douglas Miller............................... 688,558(4) 2.8 150,000 538,558 2.0
Larry J. Bryan.................................. 355,389(5) 1.5 100,000 255,389 *
Charles E. Phillips............................. 178,000(6) * 20,000 158,000 *
Michael C. Mullins.............................. 101,956(7) * 80,000 21,956 *
All executive officers and directors as a group
(25 persons).................................. 11,684,517(8) 46.5 350,000 11,334,517 41.0
</TABLE>
- ---------------
* Represents less than one percent of total shares outstanding.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and includes voting and
investment power with respect to shares of Common Stock and the right to acquire
beneficial ownership of Common Stock within 60 days pursuant to stock options or
otherwise.
(2) Of Mr. Millner's shares, 2,252,844 are held by MI Holdings, Inc., a
corporation of which Mr. Millner owns a majority of the voting stock. Mr.
Millner's shares also includes 30,146 shares issuable upon the exercise of stock
purchase rights acquired under the Company's nonqualified deferred compensation
plan and 90,056 shares held in the Company's profit sharing plan. Mr. Millner is
currently Chairman of the Board of Directors of the Company.
(3) Consists of shares held by various accounts for which Warburg, Pincus
Counsellors, Inc. ("WPCI") acts as investment advisor. WPCI has the sole power
to vote 751,100 of such shares and has shared power to vote 210,000 of such
shares. WPCI has sole dispositive power with respect to 1,201,400 of such
shares. The number of shares beneficially owned and the related information is
as of January 9, 1997 and is based solely on information contained in filings
made by WPCI with the Commission pursuant to Section 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(4) Includes 321,773 shares subject to currently exercisable options,
17,078 shares issuable upon the exercise of stock purchase rights acquired under
the Company's nonqualified deferred compensation plan and 26,892 shares held in
the Company's profit sharing plan. Mr. Miller is currently Chief Executive
Officer and President of the Company and is also a director of the Company.
(5) Includes 181,365 shares subject to currently exercisable options,
28,623 shares issuable upon the exercise of stock purchase rights acquired under
the Company's nonqualified deferred compensation plan, 3,250 shares held in the
Company's profit sharing plan and 1,406 shares held in the Company's
17
<PAGE> 19
Employee Stock Purchase Plan. Mr. Bryan is currently Executive Vice President of
the Company and is also a director of the Company.
(6) At the time of the Company's acquisition of ATR, Mr. Phillips was the
President of ATR. Since the acquisition, ATR has been operated as a subsidiary
of the Company and Mr. Phillips continues to hold the position of President of
ATR.
(7) Includes 15,000 shares subject to forfeiture in the event that Mr.
Mullins leaves the Company under certain circumstances. At the time of the
Company's acquisition of Comtex, Mr. Mullins was the President and Chief
Executive Officer of Comtex. Since the acquisition, Comtex has been operated as
a subsidiary of the Company and Mr. Mullins continues to hold the positions of
President and Chief Executive Officer of Comtex.
(8) Includes 938,314 shares subject to currently exercisable options,
152,733 shares issuable upon the exercise of stock purchase rights acquired
under the Company's nonqualified deferred compensation plan, 157,883 shares held
in the Company's profit sharing plan and 8,899 shares held in the Company's
Employee Stock Purchase Plan.
18
<PAGE> 20
UNDERWRITING
The names of the Underwriters of the shares of Common Stock offered hereby
and the aggregate number of shares which each has severally agreed to purchase
from the Company and the Selling Shareholders, subject to the terms and
conditions specified in the Underwriting Agreement, are as follows:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Dillon, Read & Co. Inc......................................
Donaldson, Lufkin & Jenrette Securities Corporation.........
The Robinson-Humphrey Company, Inc..........................
---------
Total............................................. 2,850,000
=========
</TABLE>
The Managing Underwriters are Dillon, Read & Co. Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and The Robinson-Humphrey Company, Inc.
The Underwriters are committed to purchase all of the shares of Common
Stock, if any are so purchased. The Underwriting Agreement contains certain
provisions whereby, if any Underwriter defaults in its obligation to purchase
such shares, and the aggregate obligations of the Underwriters so defaulting do
not exceed 10% of the shares offered hereby, some or all of the remaining
Underwriters must assume such obligations.
The Underwriters propose to offer the shares of Common Stock to the public
initially at the offering price per share 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 Underwriters may allow, and such dealers may
re-allow, concessions not in excess of $ per share on sales to certain
other dealers. The offering of the shares is made for delivery when, as and if
accepted by the Underwriters and subject to prior sale and withdrawal,
cancellation or modification of this offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares. After the
public offering of the Common Stock, the public offering price and the
concessions may be changed by the Managing Underwriters.
The Company has granted to the Underwriters an option for 30 days from the
date of this Prospectus, to purchase up to 427,500 additional shares of Common
Stock to cover over-allotments, if any, on the same terms per share. To the
extent the Underwriters exercise this option, each Underwriter will be
obligated, subject to certain conditions, to purchase the number of additional
shares of Common Stock proportionate to such Underwriter's initial commitment.
The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
The Company, the Selling Shareholders, and all of the directors and
executive officers of the Company have agreed, subject to certain exceptions,
that they will not offer, sell, contract to sell, transfer or otherwise
encumber, or dispose of any shares of Common Stock, or securities convertible
into or exchangeable for Common Stock, or exercise demand registration rights,
for a period of 90 days from the date of this Prospectus, without the prior
written consent of Dillon, Read & Co. Inc.
19
<PAGE> 21
The Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company and the Selling Shareholders by Troutman Sanders LLP,
Atlanta, Georgia. Certain legal matters relating to the offering will be passed
upon for the Underwriters by Powell, Goldstein, Frazer & Murphy LLP, Atlanta,
Georgia. Carl E. Sanders, a partner in Troutman Sanders LLP, is a director of
the Company and the beneficial owner of 69,432 shares of Common Stock.
EXPERTS
The audited consolidated financial statements of the Company incorporated
by reference in this Prospectus and elsewhere in the Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act with respect to the shares of Common Stock offered
hereby have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports. The
audited consolidated financial statements of Comtex incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Grant Thornton LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the offices of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at its regional offices located at Seven World Trade
Center, 13th Floor, New York, New York, 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can be obtained at prescribed rates from the Public Reference Section of the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports,
proxy statements and other information can also be obtained from the World Wide
Web site that the Commission maintains at http://www.sec.gov. In addition,
reports, proxy statements and other information concerning the Company (Symbol:
NRL) can be inspected and copied at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005, on which the Common Stock is listed.
This Prospectus constitutes a part of the Registration Statement. This
Prospectus omits certain of the information contained in the Registration
Statement as permitted by the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and related exhibits for
further information with respect to the Company and the securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
20
<PAGE> 22
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus as of
their respective dates:
(a) Annual Report on Form 10-K for the year ended October 27, 1996;
(b) Quarterly Reports on Form 10-Q for the quarters ended January 26,
1997 and April 27, 1997;
(c) Current Report on Form 8-K filed with the Commission on December
20, 1996;
(d) Amendment No. 1 on Form 8-K/A to Current Report on Form 8-K filed
with the Commission on February 19, 1997; and
(e) Registration Statement on Form 8-A filed on October 19, 1995
registering the Company's Common Stock under Section 12(b) of the Exchange
Act.
Additionally, all documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the offering of the
securities made hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statements contained 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 which 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.
The Company will provide, upon request, without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (other than certain exhibits to such documents
which are not specifically incorporated by reference in such documents).
Requests for such copies should be directed to: Norrell Corporation, 3535
Piedmont Road, N.E., Atlanta, Georgia 30305, Attention: Mark H. Hain, Esq., Vice
President and General Counsel (404) 240-3000.
21
<PAGE> 23
[SEE APPENDIX P. A-2 FOR GRAPHICAL MATERIAL OMITTED]
22
<PAGE> 24
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, SHARES OF
COMMON STOCK IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE
ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE COMMON STOCK MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds
Price Range of Common Stock and
Dividend Policy..................... 10
Capitalization........................ 11
Business.............................. 12
Principal and Selling Shareholders.... 17
Underwriting.......................... 19
Legal Matters......................... 20
Experts............................... 20
Available Information................. 20
Incorporation of Certain Documents by
Reference........................... 21
</TABLE>
======================================================
======================================================
NORRELL(R) CORPORATION
---------------------
2,850,000 SHARES
COMMON STOCK
PROSPECTUS
, 1997
---------------------
DILLON, READ & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
THE ROBINSON-HUMPHREY
COMPANY, INC.
======================================================
<PAGE> 25
PART II.
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the expenses of the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions,
expected to be incurred by the Registrant. All amounts shown are estimates,
except the Commission registration fee.
<TABLE>
<S> <C>
Commission registration fee................................. $ 33,957
NYSE filing fees............................................ 11,500
NASD filing fee............................................. 11,706
Blue Sky fees and expenses.................................. 2,500
Printing and engraving expenses............................. 60,000
Legal fees and expenses..................................... 80,000
Accounting fees and expenses................................ 50,000
Transfer Agent and Registrar fees and expenses.............. 3,500
Miscellaneous............................................... 46,837
--------
Total............................................. $300,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Sections 14-2-851 through 14-2-857 of the Georgia Business
Corporation Code, as amended, directors, officers, employees and agents of the
Company may, and in some cases must, be indemnified by the Company under certain
circumstances against expenses and liabilities incurred by or imposed upon them
as a result of actions, suits or proceedings brought against them as directors,
officers, employees and agents of the Company (including actions, suits or
proceedings brought against them for violations of the federal securities laws).
Directors, officers, employees and agents of the Company may be indemnified
against expenses if they acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action, if they had no reasonable cause to believe their
conduct was unlawful. A director, officer, employee or agent may be indemnified
against expenses incurred in connection with a derivative suit if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification may be
made without court approval if such person was adjudged liable for negligence or
misconduct in the performance of his or her duty to the corporation. This
statutory indemnification is not exclusive of any rights provided by any by-law,
agreement, vote of shareholders or disinterested directors or otherwise.
Article Nine of the Bylaws sets forth the extent to which the Company's
directors, officers, employees and agents shall and may be indemnified against
liabilities which they may incur while serving in such capacities. Pursuant to
these provisions, the directors and officers of the Company will be indemnified
against any losses incurred in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the Company or served with another corporation,
partnership, joint venture, trust or other enterprise at the request of the
Company. The Company will provide advances for expenses incurred in defending
any such action, suit or proceeding, upon receipt of an undertaking by or on
behalf of such director, officer, employee or agent to repay such advances if it
is ultimately determined that such person is not entitled to indemnification by
the Company.
The Company currently maintains a policy of directors and officers
liability insurance and presently intends to continue such insurance so long as
it is available at a reasonable cost.
II-1
<PAGE> 26
ITEM 16. EXHIBITS
(A) EXHIBIT INDEX
<TABLE>
<S> <C> <S>
1.1 -- Form of Underwriting Agreement
4.1 -- Amended and Restated Articles of Incorporation of the
Company, incorporated by reference to Exhibit 3.1 of the
Company's Amendment No. 1 to Registration Statement on Form
S-1, as filed with the Securities and Exchange Commission on
June 22, 1994.
4.2 -- Amended and Restated Bylaws of the Company, incorporated by
reference to Exhibit 3.2 of the Company's Registration
Statement on Form S-1, as filed with the Securities and
Exchange Commission on June 10, 1994.
5.1 -- Opinion of Troutman Sanders LLP
23.1 -- Consent of Troutman Sanders LLP (included in Exhibit 5.1).
23.2 -- Consent of Arthur Andersen LLP
23.3 -- Consent of Grant Thornton LLP
24 -- Powers of Attorney (included in the signature page to the
Registration Statement)
</TABLE>
(B) FINANCIAL STATEMENT SCHEDULES
None.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, 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
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the 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 whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, 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> 27
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 Atlanta, State of Georgia, on June 20, 1997.
NORRELL CORPORATION
By: /s/ C. DOUGLAS MILLER
------------------------------------
C. Douglas Miller
Chief Executive Officer and
President
POWER OF ATTORNEY
We, the undersigned officers and directors of Norrell Corporation, hereby
severally constitute and appoint C. Kent Garner and Mark H. Hain, and each of
them singly, our true and lawful attorneys with full power to them, and each of
them singly, to sign for us and in our names in the capacities indicated below,
the Registration Statement on Form S-3 filed herewith and any and all
pre-effective and post-effective amendments to said Registration Statement, and
generally to do all such things in our names and on our behalf in our capacities
as officers and directors to enable Norrell Corporation to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on June 20, 1997 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<C> <S>
/s/ C. DOUGLAS MILLER Director, Chief Executive Officer and
- ----------------------------------------------------- President (Principal Executive Officer)
C. Douglas Miller
/s/ C. KENT GARNER Vice President and Chief Financial Officer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
C. Kent Garner
/s/ GUY W. MILLNER Chairman of the Board
- -----------------------------------------------------
Guy W. Millner
/s/ THOMAS A. VADNAIS Director, President and Chief Operating
- ----------------------------------------------------- Officer, Tascor Incorporated
Thomas A. Vadnais
/s/ LARRY J. BRYAN Director and Executive Vice President
- -----------------------------------------------------
Larry J. Bryan
/s/ LUCIUS E. BURCH, III Director
- -----------------------------------------------------
Lucius E. Burch, III
/s/ KAAREN JOHNSON-STREET Director
- -----------------------------------------------------
Kaaren Johnson-Street
</TABLE>
II-3
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<C> <S>
/s/ DONALD A. MCMAHON Director
- -----------------------------------------------------
Donald A. McMahon
/s/ FRANK A. METZ, JR. Director
- -----------------------------------------------------
Frank A. Metz, Jr.
/s/ NANCY CLARK REYNOLDS Director
- -----------------------------------------------------
Nancy Clark Reynolds
/s/ CARL E. SANDERS Director
- -----------------------------------------------------
Carl E. Sanders
</TABLE>
II-4
<PAGE> 29
NORRELL(R) CORPORATION OFFERING A FULL SPECTRUM OF SERVICES
Omitted Graphic Material
The following is a narrative description of graphic material contained
in the printed version of the prospectus which has been omitted from the
version of the prospectus filed electronically.
On the top half of the page, a chart consisting of (i) on the left
side of the page, a box containing the heading "Staffing Services," under which
are listed the following logos: "Norrell Services, Inc.(R)" and Norrell(R)
Franchise;" (ii) in the center of the page, a box containing the heading
"Outsourcing Services," under which are listed the following logos: "Tascor(R) A
Norrell Outsourcing Service," "Norrell(R) Human Resource Services" and
"NorCross(TM) Total Call Center Operations Resources and Expertise in Customer
Service from Cross Country and Norrell(R);" and (iii) on the right side of the
page, a box containing the heading "Professional Services," under which are
listed the following logos: "Norrell(R) Financial Staffing," "ANATEC A
Norrell(R) Information Technology Service," "ATR A Norrell(R) Information
Technology Service" and "Comtex Systems A Norrell(R) Information Technology
Service."
On the bottom half of the page, a pie chart entitled "Revenue by
Business Group First Six Months FY 1997" and depicting by percentage the
following breakdown: (i) Staffing Services - broken down into Temporary
Staffing - 29.4% and MVP, Managed and Long-term Staffing - 38.8%; (ii)
Outsourcing Services - 19.3% and (iii) Professional Services - 12.5%.
A - 1
<PAGE> 30
NORRELL(R) CORPORATION
Omitted Graphic Material
The following is a narrative description of graphic material contained
in the printed version of the prospectus which has been omitted from the
version of the prospectus filed electronically.
A map of the United States of America indicating by geographic plot
points the Company's locations broken down by business group type and number of
offices.
NATIONAL NETWORK
A - 2
<PAGE> 1
Exhibit 1.1
NORRELL CORPORATION
COMMON STOCK
(No Par Value)
UNDERWRITING AGREEMENT
- -----------------, 1997
<PAGE> 2
UNDERWRITING AGREEMENT
____________, 1997
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Donaldson, Lufkin & Jenrette
Securities Corporation
1201 West Peachtree Street, Suite 3650
Atlanta, Georgia 30309
The Robinson-Humphrey Company, Inc.
3333 Peachtree Road, N.E.
10th Floor, South Tower
Atlanta, Georgia 30326
as Managing Underwriters
Dear Sirs:
Norrell Corporation, a Georgia corporation (the "Company"), proposes to
issue and sell and the persons named in Schedule B (the "Selling Shareholders")
propose to sell to the underwriters named in Schedule A (the "Underwriters") an
aggregate of ____________ shares (the "Firm Shares") of Common Stock, no par
value (the "Common Stock"), of the Company, of which ____________ shares are to
be issued and sold by the Company and an aggregate of ____________ shares are to
be sold by the Selling Shareholders in the respective amounts set forth opposite
their names in Schedule B. In addition, solely for the purpose of covering
overallotments, the Company proposes to issue and sell, at the Underwriters'
option, up to ____________ additional shares of the Common Stock (the
"Additional Shares"). The Additional Shares and the Firm Shares are collectively
referred to as the "Shares". The Shares are described in the Prospectus which is
referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Shares, which incorporates by reference documents that the
Company has filed in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the "Exchange Act"). The Company has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses and
all documents incorporated by reference therein (collectively, the "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement as in effect at the time of execution of
this Agreement or, if the registration statement is not yet effective, as
amended when it becomes effective, including all documents filed as a part
thereof or incorporated by
1
<PAGE> 3
reference therein, and including any registration statement filed pursuant to
Rule 462(b) under the Act increasing the size of the offering registered under
the Act and any information contained in a prospectus subsequently filed with
the Commission pursuant to Rule 424(b) under the Act and deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A
under the Act, is herein called the "Registration Statement", and the
prospectus, including all documents incorporated therein by reference, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act or, if no such filing is required, in the form of final prospectus included
in the Registration Statement at the time it became effective, is herein called
the "Prospectus".
The Company, the Selling Shareholders and the Underwriters agree as
follows:
1. Sale and Purchase. On the basis of the representations and
warranties and the other terms and conditions herein set forth, each of the
Company and the Selling Shareholders, severally and not jointly, agrees to sell
to the respective Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and the Selling Shareholders the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company or by that Selling Shareholder,
as the case may be, as the number of Firm Shares set forth opposite the name of
such Underwriter on Schedule A bears to the total number of Firm Shares to be
sold by the Company and the Selling Shareholders, in each case at a purchase
price of $____ per Share. You may release the Firm Shares for public sale
promptly after this Agreement becomes effective. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
In addition, on the basis of the representations and warranties and
the other terms and conditions herein set forth, the Company hereby grants to
the several Underwriters an option to purchase, and the Underwriters shall have
the right to purchase, severally and not jointly, from the Company all or a
portion of the Additional Shares as may be necessary to cover overallotments
made in connection with the offering of the Firm Shares, at the same purchase
price per share to be paid by the several Underwriters to the Company and the
Selling Shareholders for the Firm Shares. This option may be exercised in whole
or in part from time to time on or before the thirtieth day following the date
hereof, by written notice to the Company. Any such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (any such
date and time being herein referred to as an "additional time of purchase");
provided, however, that no additional time of purchase shall occur earlier than
the time of purchase (as defined below) nor earlier than the second business
day* after the date on which the option shall have been exercised nor later than
the eighth business day after the date on which the option shall have been
exercised. The number of Additional Shares to be sold to each Underwriter at an
additional time of purchase shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased at such additional
time of purchase as the number of Firm Shares set forth opposite the name of
such Underwriter on Schedule
- ------------------------------
* As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
2
<PAGE> 4
A bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company and to the Attorney-in-Fact referred to in
Section 4(d) on behalf of the Selling Shareholders by certified or official bank
checks, in immediately available funds, at the office of Dillon, Read & Co. Inc.
in New York City, against delivery of the certificates for the Firm Shares to
you for the respective accounts of the Underwriters. Such payment and delivery
shall be made at 9:30 A.M., New York City time, on ____________, 1997 (unless
another time shall be agreed to by you, the Company and the Selling Shareholders
or unless postponed in accordance with the provisions of Section 10). The time
at which such payment and delivery are actually made is called the "time of
purchase". Certificates for the Firm Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the
additional time of purchase.
3. Representations and Warranties of the Company and the Selling
Shareholders. The Company and each of the Selling Shareholders, jointly and
severally, represent and warrant to each of the Underwriters that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act; when the Registration Statement becomes
or became effective and at all times subsequent thereto up to the time
of purchase and the additional time of purchase, the Registration
Statement and the Prospectus, and any supplements or amendments
thereto, complied and will comply in all material respects with the
provisions of the Act; and the Registration Statement at all such times
did not 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, and the
Prospectus at all such times did not 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, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Selling Shareholders make
no representation or warranty with respect to any statement contained
in the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters and furnished
in writing by or on behalf of any Underwriter through you to the
Company expressly for use in the Registration Statement or the
Prospectus and set forth in the section of the Registration Statement
and the Prospectus entitled "Underwriting"; the documents incorporated
by reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the
3
<PAGE> 5
requirements of the Exchange Act, and do 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
light of the circumstances under which they were made, not misleading;
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued, and no proceeding for
that purpose has been instituted or threatened, by the Commission or by
the state securities or blue sky authority of any jurisdiction.
(b) As of the date of this Agreement, the Company has an
authorized capitalization as set forth under the column entitled
"January 26, 1997 Actual" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" and, as of the time of
purchase, the capitalization of the Company will be as set forth under
the column entitled "January 26, 1997 As Adjusted" in the section of
the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and are free of statutory and
contractual preemptive rights.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Georgia with full power and authority to (i) own its properties and
conduct its business as described in the Registration Statement and the
Prospectus and (ii) execute and deliver this Agreement and to issue,
sell and deliver the Shares to be sold by it as herein contemplated.
(d) As of the date of this Agreement, the Company does not
own, and as of the time of purchase and the additional time of purchase
will not own, directly or indirectly, any capital stock or other equity
securities in any other corporation or any interest in any partnership,
joint venture, limited liability company or other association other
than (i) the shares of capital stock of the corporations partnership
interests in and the limited partnership listed on Schedule D
(collectively, the "Subsidiaries"), and (ii) securities issued by
publicly-held corporations constituting, in each case, less than 1% of
the corporation's outstanding securities of the same class; all of the
issued and outstanding shares of capital stock of each corporate
Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable and all of the outstanding partnership interests
of the limited partnership Subsidiary have been duly and validly
issued; the shares of capital stock of and the partnership interests in
the Subsidiaries which are joint ventures (the "Joint Ventures") shown
on Schedule D as owned by the Company and all of the issued and
outstanding shares of capital stock of the other Subsidiaries are owned
directly or indirectly by the Company and, except as described in the
Prospectus, are owned free and clear of any pledge, lien, encumbrance,
security interest or other claim; there are no outstanding rights,
subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the capital stock of or
partnership interest in any of the Subsidiaries.
(e) Each of the corporate Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, and the limited
partnership Subsidiary has been duly organized and is validly existing
as a
4
<PAGE> 6
limited partnership in good standing under the laws of its jurisdiction
of organization, each with full corporate or partnership power and
authority to own its properties and to conduct its businesses.
(f) Each of the Company and the Subsidiaries is duly qualified
or licensed by and is in good standing in each jurisdiction in which it
owns or leases property or conducts its business and in each other
jurisdiction in which the failure, individually or in the aggregate, to
be so qualified or licensed could have a material adverse effect on the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole; each of the Company and the Subsidiaries is in
compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by each such
jurisdiction.
(g) Neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of, or default under),
its charter or bylaws or limited partnership agreement, or in the
performance or observance of any obligation, agreement, covenant or
condition contained in any license, indenture, lease, mortgage, deed of
trust, bank loan or credit agreement, material supply agreement or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them may be bound or
affected. The execution, delivery and performance of this Agreement,
the issuance of the Shares to be sold by the Company hereunder and the
consummation of the transactions contemplated hereby will not conflict
with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would
constitute a breach of, or default under), the charter or bylaws or
limited partnership agreement of the Company or any of the Subsidiaries
or under any provision of any license, indenture, lease, mortgage, deed
of trust, bank loan or credit agreement, material supply agreement or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their properties may
be bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries.
(h) The Firm Shares to be sold by the Company hereunder and the
Additional Shares, when issued and delivered to and paid for by the
Underwriters as contemplated hereby, will be duly authorized and
validly issued and fully paid and nonassessable, free and clear of any
pledge, lien, encumbrance, security interest, preemptive right or other
claim.
(i) This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities or blue sky laws and except as the enforceability hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and general
principles of equity.
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<PAGE> 7
(j) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and the certificates for the
Shares are in due and proper form and the holders of the Shares after
making payment therefor will not be subject to personal liability by
reason of being such holders; all offers and sales of the Company's
capital stock since August 2, 1994 were at all relevant times
registered under the Act or exempt from the registration requirements
of the Act, and were registered under the applicable state securities
or blue sky laws or exempt from the registration requirements of such
laws.
(k) No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares as contemplated hereby, other
than registration of the Shares under the Act, clearance of the
offering of the Shares with the National Association of Securities
Dealers, Inc. (the "NASD") and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters.
(l) No person has the right, contractual or otherwise, to cause the
Company to issue to it, or, except as disclosed in the Registration
Statement and the Prospectus, to register pursuant to the Act, any
securities of the Company in consequence of the issue and sale of the
Shares to the Underwriters hereunder nor does any person have
preemptive rights, rights of first refusal or other rights to purchase
any of the Shares. Each person who has the right, contractual or
otherwise, to cause the Company to register pursuant to the Act any
securities of the Company in consequence of the issue and sale of the
Shares to the Underwriters hereunder either included such securities in
the Registration Statement or duly waived such right.
(m) Arthur Andersen LLP, whose reports on the consolidated financial
statements of the Company and the Subsidiaries are included or
incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the
Company as required by the Act and the applicable published rules and
regulations thereunder.
(n) All legal or governmental proceedings, contracts, documents or
understandings of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed as
required.
(o) There is no action, suit or proceeding pending or threatened
against the Company or any of the Subsidiaries or any of their
properties, at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency that could result in a judgment, decree or order
having a material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole.
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<PAGE> 8
(p) The audited and unaudited financial statements (including the
related notes) and the financial schedules included in the Registration
Statement and the Prospectus present fairly the consolidated financial
condition of the Company and the Subsidiaries as of the dates indicated
and the consolidated results of operations and cash flows of the
Company and the Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved; and no other financial statements or schedules are required
by the Act or the applicable published rules and regulations thereunder
to be included in the Registration Statements or Prospectus.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
may be otherwise stated in the Registration Statement or the
Prospectus, there has not been: (A) any material adverse change in the
properties, assets, operations, business, business prospects or
condition (financial or other), present or prospective, of the Company
and the Subsidiaries taken as a whole; (B) any transaction, that is
material to the Company and the Subsidiaries taken as a whole,
contemplated or entered into by the Company or any of the Subsidiaries;
or (C) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any of the Subsidiaries that is material to
the Company and the Subsidiaries taken as a whole.
(r) The Company has obtained the agreement of the directors,
executive officers and shareholders listed on Schedule C not to sell,
contract to sell, grant any option to sell, transfer or otherwise
dispose of, directly or indirectly, any shares of Common Stock, or
securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock for a period of
_________ days from the date of the Prospectus without the prior
written consent of Dillon, Read & Co. Inc.
(s) Neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or
state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material adverse
effect on the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole.
(t) Each of the Company and the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business; the
Company and each of the Subsidiaries has fulfilled and performed all of
its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of
7
<PAGE> 9
any such permit; and, except as described in the Prospectus, such
permits contain no restrictions that are materially burdensome to the
Company or any of the Subsidiaries.
(u) The effect of Environmental Laws on the business, operations and
properties of the Company and the Subsidiaries, and associated costs
and liabilities (including without limitation any capital or operating
expenditure required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties), singly or in the aggregate, do not and would not have a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole.
(v) Neither the Company nor any of the Subsidiaries, nor any
employee of the Company or any of the Subsidiaries, has made any
payment of funds of the Company or any of the Subsidiaries prohibited
by law, and no funds of the Company or any of the Subsidiaries have
been set aside to be used for any payment prohibited by law.
(w) The Company and the Subsidiaries have filed all federal or state
income or franchise tax returns required to be filed and have paid all
taxes shown thereon as due, and there is no material tax deficiency
which has been or might be asserted against the Company or any of the
Subsidiaries; all material tax liabilities are adequately provided for
on the books of the Company and the Subsidiaries.
(x) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein
contemplated.
(y) The Company and the Subsidiaries have good title to all
properties and assets owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects (except such as are described or referred to in the
Prospectus and the financial statements and the notes thereto contained
therein or such as do not interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries); the
property held under lease by the Company or any of the Subsidiaries is
held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property by the Company or any of the
Subsidiaries, as the case may be.
(z) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is subject to regulation under such Act.
(aa) No labor dispute with employees of the Company or any of the
Subsidiaries exists or is imminent, and the Company is not aware of any
existing or imminent labor disturbance by employees of any of its
principal customers which might be expected to have
8
<PAGE> 10
a material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole.
(bb) The Company or one of the Subsidiaries owns or possesses, or
can acquire on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know how (including trade secrets and other
unpatented and unpatentable proprietary or confidential information,
systems or procedures), trade marks, service marks and trade names
presently employed by the Company or any of the Subsidiaries in
connection with the business now operated by it, and neither the
Company nor any of the Subsidiaries has received any notice of
continuing infringement of or continuing 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 have a material adverse effect on the properties,
assets, operations, business prospects or condition (financial or
other) of the Company and the Subsidiaries taken as a whole.
4. Further Representations and Warranties of the Selling Shareholders.
Each Selling Shareholder, severally and not jointly, further represents and
warrants to each Underwriter that:
(a) Such Selling Shareholder is and at the time of delivery of the
Shares to be sold by such the Selling Shareholder will be the lawful
owner of the number of Shares or securities convertible into or options
exercisable for the number of Shares to be sold by such Selling
Shareholder pursuant to this Agreement and, at the time of delivery
thereof, will have valid and marketable title to such Shares, and upon
delivery of and payment for such Shares the Underwriters will acquire
valid and marketable title to such Shares free and clear of any claim,
lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title, assuming each of the
Underwriters has purchased the Shares purchased by it in good faith and
without notice of any adverse claim.
(b) Such Selling Shareholder has and at the time of delivery of such
Shares will have full legal right, power and capacity, and any approval
required by law to sell, assign, transfer and deliver such Shares in
the manner provided in this Agreement.
(c) This Agreement has been duly authorized, executed and delivered
by such Selling Shareholder and is legal, valid and binding agreement
of such Selling Shareholder, enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited
by federal or state blue sky laws and except as the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditor's rights generally and
general principles of equity. The Power of Attorney executed by the
Selling Shareholders (the "Power of Attorney") and the Custody
Agreement among the Selling Shareholders and ________ (the "Custody
Agreement") have been duly executed and delivered by such Selling
Shareholder and are legal, valid and binding agreements of such
Selling Shareholder, enforceable in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization,
9
<PAGE> 11
moratorium or similar laws affecting creditors' rights generally and
general principles of equity.
(d) Such Selling Shareholder has duly and irrevocably authorized the
Attorney-in-Fact (as defined in the Power of Attorney), on behalf of
such Selling Shareholder, to execute and deliver this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold
by such Selling Shareholder and receive payment therefor pursuant
hereto.
(e) The sale of the Shares by such Selling Shareholder pursuant
hereto is not prompted by any material adverse information concerning
the Company; and all information furnished in writing by or on behalf
of such Selling Shareholder specifically for use in the Registration
Statement and the Prospectus, and any supplement or amendment thereto,
is and will be when the Registration Statement became effective and at
all times subsequent thereto up to the time of purchase, true and
correct and complete and at all such times did not and will not contain
any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(f) The consummation of the transactions contemplated hereby and by
the Power of Attorney and by the Custody Agreement and the fulfillment
of the terms hereof and thereof will not constitute a breach or
violation of or default under any trust, indenture, agreement or other
instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be
required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares); promptly
to advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and to use its best efforts to obtain the withdrawal
of any order of suspension at the earliest practicable moment;
(b) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendment or supplement
thereto after the effective date of the Registration Statement) as the
Underwriters may request for the purposes contemplated by the Act;
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<PAGE> 12
(c) to advise you promptly and if requested by you to confirm such
advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes
effective and (ii) when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act, if required under the Act (which
the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for or
the entry of a stop order suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, including by filing any
document that would be incorporated therein by reference, and to file
no such amendment or supplement to which you shall object in writing;
(e) to furnish to you and, upon request to each of the other
Underwriters, for a period of five years from the date of this
Agreement (i) copies of all reports or other communications that the
Company shall send to its shareholders or from time to time shall
publish or publicly disseminate and (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar form as may be designated by the
Commission, and any other document filed by the Company pursuant to
Section 12, 13, 14 or 15(d) of the Exchange Act;
(f) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a prospectus
relating to the Shares is required to be delivered under the Act that,
in the reasonable judgment of the Company, would require the making of
any change in the Prospectus then being used, or in the information
incorporated therein by reference, so that the Prospectus, as then
supplemented, would not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading and, during such time, promptly to prepare and furnish,
at the Company's expense, to the Underwriters such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change in such quantities as requested by the Underwriters, and to
furnish to you a copy of such proposed amendment or supplement before
filing any such amendment or supplement with the Commission;
(g) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which need not be
audited and which will satisfy the provisions of Section 11(a) of the
Act including, at the option of the Company, Rule 158) covering a
period of 12 months beginning after the effective date of the
Registration Statement but ending not later than 15 months after the
date of the Registration Statement, as soon as is reasonably
practicable after the termination of such 12-month period;
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<PAGE> 13
(h) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but
not later than two business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements, if any,
of the Company and the Subsidiaries that have been read by the
Company's independent certified public accountants as stated in their
letter to be furnished pursuant to Section 8(b);
(j) to apply the net proceeds from the sale of the Shares sold by
the Company in the manner set forth under the caption "Use of Proceeds"
in the Registration Statement and the Prospectus;
(k) to use its best efforts to cause the Shares to be sold by the
Company hereunder to be listed for trading on the New York Stock
Exchange upon official notice of issuance;
(l) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement otherwise becomes effective or is
terminated, to pay all expenses, fees and taxes (other than (x) any
transfer taxes and (y) fees and disbursements of your counsel except as
set forth under Section 5 and clauses (iii) and (iv) below) in
connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, and the printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (ii) the issuance, sale and delivery of the
Shares, (iii) the word processing or printing of this Agreement and any
dealer agreements, and the reproduction or printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for
offering and sale under state laws as aforesaid (including legal fees
and filing fees and other disbursements of your counsel) and the
printing and furnishing of copies of any blue sky surveys to you and to
dealers, (v) any listing of the Shares on the New York Stock Exchange,
(vi) any filing for review of the public offering of the Shares by the
NASD and (viii) the performance of the Company's and the Selling
Shareholders' other obligations hereunder;
(m) not to sell, contract to sell, grant any option to sell,
transfer or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock or permit
the registration under the Act of any shares of Common Stock, except
for (i) the registration of the Shares and the sales to you pursuant to
this Agreement, (ii) the issuance of shares of Common Stock upon the
exercise of stock options outstanding on the date hereof, and (iii) the
registration under the Act of 590,000 shares of Common Stock pursuant
to a registration statement on Form S-8 upon shareholder approval of
the increase in the number of share reserved for issuance under the
Company's 1994 Stock Incentive Plan, for a period
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<PAGE> 14
commencing on the date hereof and continuing for________ days after
the date of the Prospectus, without the prior written consent of
Dillon, Read & Co. Inc.; and
(n) to refrain from investing the proceeds from the sale of the
Shares in a manner to cause the Company or any of the Subsidiaries to
become an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6. Certain Covenants of the Selling Shareholders. Each Selling
Shareholder agrees with each Underwriter that:
(a) such Selling Shareholder will not sell, contract to sell, grant
any option to sell, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock, except for the sales to you pursuant to this
Agreement, for a period commencing on the date hereof and continuing
for________ days after the date of the Prospectus, without the prior
written consent of Dillon, Read & Co. Inc.; and
(b) the Shares represented by the certificates held in custody
pursuant to the Custody Agreement are for the benefit of and coupled
with and subject to the interests of the Underwriters and the Selling
Stockholders hereunder, and the arrangement for such custody and the
appointment of the Attorney-in-Fact pursuant to the Power of Attorney
is irrevocable; the obligations of the Selling Shareholders shall not
be terminated by operation of law, whether by the liquidation,
dissolution, death or incapacity of such Selling Shareholder, or any
other event; if such Selling Shareholder should be liquidated,
dissolved, die or become incapacitated or any other event occur before
the delivery of the Shares hereunder, certificates for the Shares to be
sold by such Selling Shareholder shall be delivered on behalf of such
Selling Shareholder in accordance with the terms and conditions of this
Agreement and the Custody Agreement and Power of Attorney, and action
taken by the Attorney-in-Fact under the Custody Agreement and Power of
Attorney shall be as valid as if such death, incapacity or other event
had not occurred, whether or not the Custodian or the Attorney-in-Fact
shall have notice of such liquidation, dissolution, death, incapacity
or other event.
7. Reimbursement of Underwriters' Expenses. If the Firm Shares or the
Additional Shares are not delivered for any reason, other than the failure of
the Underwriters to purchase the Firm Shares or the Additional Shares as
provided herein (unless such failure is permitted under the provisions of
Section 8 or Section 9(b) of this Agreement), the Company will reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Shareholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at any additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Shareholders on the date
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<PAGE> 15
hereof and at the time of purchase and at such additional time of purchase, as
the case may be), the performance by each of the Company and the Selling
Shareholders of its and their obligations hereunder and to the following
conditions:
(a) The Company shall furnish to you at the time of purchase and at
such additional time of purchase, as the case may be, an opinion of
Troutman Sanders LLP, counsel for the Company and the Selling
Shareholders, addressed to the Underwriters and dated the time of
purchase or such additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
satisfactory to Powell, Goldstein, Frazer & Murphy LLP, counsel for the
Underwriters, stating 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
Georgia with full corporate power and authority (A) to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus and (B) to execute and deliver this
Agreement and to issue, sell and deliver the Shares to be sold by it as
herein contemplated;
(ii) each of the corporate Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the state in which such Subsidiary is incorporated, and the
limited partnership Subsidiary has been duly organized and is validly
existing as a limited partnership in good standing under the laws of
its jurisdiction of organization, each with full corporate or
partnership power and authority to own its properties and to conduct
its business as described in the Registration Statement and the
Prospectus; to the best of such counsel's knowledge after due inquiry,
the Company does not own any interest in any other corporation, joint
venture, partnership, limited liability company or other association
other than (A) shares of capital stock or partnership interests in the
Subsidiaries, and (B) securities issued by publicly-held corporations
constituting less than 1% of the corporation's outstanding securities
of the same class;
(iii) each of the Company and the Subsidiaries is duly qualified or
licensed to do business by and is in good standing as a foreign
corporation or limited partnership in each jurisdiction in which it
conducts business or owns property and in which the failure,
individually or in the aggregate, to be so licensed or qualified could
have a material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole;
(iv) all of the issued and outstanding shares of capital stock of
each corporate Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable and all the outstanding
partnership interests of the limited partnership Subsidiary have been
duly and validly issued; the shares of capital stock of and the
partnership interests in the Joint Ventures shown on Schedule D as
owned by the Company and all of the issued and outstanding shares of
capital stock of the other
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<PAGE> 16
Subsidiaries are owned directly or indirectly by the Company and,
except as set forth in the Prospectus, are owned free and clear of any
pledge, lien, encumbrance, security interest, preemptive right or other
claim; there are no rights, warrants, options or other agreements to
acquire or instruments convertible into or exchangeable for any shares
of capital stock or other equity interest of any Subsidiary;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and is legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities or blue sky laws and except as the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity;
(vi) (A) the Shares, when delivered to and paid for by the
Underwriters, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of any pledge, lien, encumbrance, claim
or preemptive right; and (B) the certificates for the Shares are in due
and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(vii) (A) the Company has an authorized capitalization as set forth
under the heading "Capitalization" in the Registration Statement and
the Prospectus, and (B) the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, nonassessable and free of statutory and contractual preemptive
rights;
(viii) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus;
(ix) the Registration Statement and the Prospectus (except as to
the financial statements and schedules contained or incorporated by
reference therein as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Act;
(x) the Registration Statement has become effective under the Act
and, to the best of such counsel's knowledge, no stop order proceedings
with respect thereto are pending or threatened under the Act;
(xi) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance or sale of the Shares as contemplated hereby other
than registration of the Shares under the Act (except such counsel need
express no opinion as to any necessary qualification under the state
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<PAGE> 17
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters);
(xii) the execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, or result in any
breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time or both would constitute a breach of
or default under), the charter or bylaws of the Company or the charter
or bylaws or the limited partnership agreement of any of the
Subsidiaries, or any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries or their
properties are bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries;
(xiii) to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of the Subsidiaries is in breach of or in
default under (nor has any event occurred which with notice, lapse of
time or both would constitute a breach of or default under) any
license, indenture, lease, mortgage, deed of trust, bank loan or credit
agreement or any other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or their properties are bound or affected or under any
law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries, except for such matters as
could not, individually or in the aggregate, have a material adverse
effect on the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole;
(xiv) to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of the Subsidiaries has violated any
Environmental Laws, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in
any material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole;
(xv) the Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business in the
manner described in the Prospectus; to the best of such counsel's
knowledge after due inquiry, the Company and each of the Subsidiaries
has fulfilled and performed all of its material obligations with
respect to such permits and no event has occurred which
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allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, such permits contain no restrictions that
are materially burdensome to the Company or any of the Subsidiaries;
(xvi) all legal or government proceedings, contracts, documents
or understandings of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed;
(xvii) to the best of such counsel's knowledge after due inquiry,
except as described in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or threatened
against the Company or any of the Subsidiaries, or any of their
respective properties, at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency that individually or in the aggregate
could result in a judgment, decree or order having a material adverse
effect on the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole;
(xviii) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed (or, if
an amendment with respect to any such document was filed, when such
amendment was filed), complied as to form in all material respects
with the Exchange Act (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
express no opinion);
(xix) to the best of such counsel's knowledge after due
inquiry, no person has the right, contractual or otherwise, to cause
the Company to issue to it, or, except as disclosed in the
Registration Statement and Prospectus, to register pursuant to the
Act, any securities of the Company in consequence of the issue and
sale of the Shares to the Underwriters hereunder nor does any person
have preemptive rights, rights of first refusal or other rights to
purchase any of the Shares; to the best of such counsel's knowledge
after due inquiry, each person who has the right, contractual or
otherwise, to cause the Company to register pursuant to the Act any
securities of the Company in consequence of the issue and sale of the
Shares to the Underwriters hereunder either included such securities
in the Registration Statement or duly waived such right;
(xx) the statements in the Registration Statement and the
Prospectus under the captions "Risk Factors", "Business --
____________________" and "_______________________________", insofar as
they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other
legal documents, or refer to statements of law or legal
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<PAGE> 19
conclusions, have been reviewed by such counsel and are accurate in all
material respects;
(xxi) neither the Company nor any of the Subsidiaries is an
"investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended;
(xxii) to the best of such counsel's knowledge after due inquiry,
the Company or one of the Subsidiaries owns or possesses, or can
acquire on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know how (including trade secrets and other
unpatented and unpatentable proprietary or confidential information,
systems or procedures), trade marks, service marks and trade names
presently employed by the Company or any of the Subsidiaries in
connection with the business now operated by it, and neither the
Company nor any of the Subsidiaries has received any notice of
continuing infringement of or continuing 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 have a material adverse effect on the properties,
assets, operations, business prospects or condition (financial or
other) of the Company and the Subsidiaries taken as a whole.
(xxiii) all offers and sales of the Company's capital stock since
August 2, 1994 were at all relevant times registered under the Act or
exempt from the registration requirements of the Act;
(xxiv) this Agreement has been duly executed and delivered by each
of the Selling Shareholders and is a legal, valid and binding agreement
of the Selling Shareholder, enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited
by federal or state securities or blue sky laws and except as the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity; the Power of Attorney and
the Custody Agreement have been duly executed and delivered by each of
the Selling Shareholders and are legal, valid and binding agreements of
each of the Selling Shareholders enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the creditors' rights generally and general principles of
equity;
(xxv) each of the Selling Shareholders has full legal right and
power, and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue sky
laws of certain jurisdictions), to sell, assign, transfer and deliver
the Shares to be sold by such Selling Shareholder in the manner
provided in this Agreement;
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<PAGE> 20
(xxvi) delivery of certificates for the Shares to be sold by the
Selling Shareholders pursuant hereto will pass title thereto to the
Underwriters severally, free and clear of any claim, lien, encumbrance,
security interest, community property right, restriction on transfer or
other defect in title assuming that the several Underwriters are good
faith purchasers and without notice of any adverse claim;
(xxvii) to the best of such counsel's knowledge after due inquiry,
the consummation of the transactions contemplated hereby and by the
Power of Attorney and the Custody Agreement and the fulfillment of the
terms hereof and thereof will not constitute a breach or violation of
or default under any trust, indenture, agreement or other instrument to
which any of the Selling Shareholders is a party or by which any of the
Selling Shareholders is bound;
(xxviii) the Attorney-in-Fact has been duly authorized by each
Selling Shareholder to execute and deliver on behalf of such Selling
Shareholder this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and
to deliver the Shares to be sold by such Selling Shareholder and
receive payment therefor pursuant hereto; and
(xxix) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the sale of the Shares to be sold by the Selling Shareholders as
contemplated hereby other than registration of the Shares under the Act
(except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters).
In addition, such counsel shall state that such counsel have participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company, the
Selling Shareholders and representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except as and to the extent stated in
clauses (vii) and (xx) of this Section 8(a) and except for the statements in the
Registration Statement or the Prospectus relating to the description of the
capital stock of the Company and the Shares insofar as such statements concern
legal matters), on the basis of the foregoing nothing has come to the attention
of such counsel that causes them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or amendment
became effective 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 Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at all times up
to and including the time of purchase 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, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
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<PAGE> 21
express no opinion with respect to the financial statements and schedules
included in the Registration Statement or Prospectus).
In rendering such opinion, counsel may rely, to the extent they deem such
reliance proper, upon an opinion or opinions, each dated the time of purchase or
the additional time of purchase, as the case may be, of other counsel with
respect to Subsidiaries incorporated or organized under the laws of
jurisdictions other than the State of Georgia and the State of Delaware;
provided, that (i) each such local counsel is acceptable to you and your
counsel, (ii) counsel shall state in their opinion that they have no reason to
believe that they and you are not justified in relying thereon and (iii) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to you and is in form and substance satisfactory
to you and your counsel.
(b) You shall have received from Arthur Anderson LLP letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in form
and substance satisfactory to the Managing Underwriters.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, opinions from Powell,
Goldstein, Frazer & Murphy LLP in form and substance satisfactory to you.
(d) No amendment or supplement to the Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference
therein, shall be filed prior to the time the Registration Statement
becomes effective to which you shall have objected in writing.
(e) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement and, if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:00 P.M.,
New York City time, on the second full business day after the date of this
Agreement; provided, however, that the Company, the Selling Shareholders
and you and any group of Underwriters, including you, who have agreed
hereunder to purchase in the aggregate at least 50% of the Firm Shares from
time to time may agree in writing or by telephone, confirmed in writing, on
a later date.
(f) Prior to the time of purchase or the additional time of purchase,
as the case may be: (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications
thereof, if any, shall 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; and (iii) the Prospectus and
all amendments or supplements thereto, or modifications thereof, if any,
shall 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 light of the circumstances under which they were
made, not misleading.
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(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there has
not been: (i) any material and adverse change, present or prospective, in
the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken as
a whole; (ii) any transaction that is material to the Company and the
Subsidiaries taken as a whole contemplated or entered into by the Company
or any of the Subsidiaries; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by the Company or any of the
Subsidiaries that is material to the Company and the Subsidiaries taken as
a whole.
(h) The Company, at the time of purchase or additional time of
purchase, as the case may be, shall have delivered to you a certificate of
the President and Chief Executive Officer, Executive Vice President and the
Vice President and Chief Financial Officer of the Company to the effect
that the representations and warranties of the Company as set forth in this
Agreement are true and correct as of each such date and the conditions set
forth in Section 8(f) and Section 8(g) have been met.
(i) You shall have received a signed letter, dated the date of this
Agreement, from each of the directors, executive officers and shareholders
listed in Schedule C to the effect that such persons shall not sell,
contract to sell, grant any option to sell, transfer or otherwise dispose
of, directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock for a period of ___________ days from
the date of the Prospectus without the prior written consent of Dillon,
Read & Co. Inc.
(j) The Company and the Selling Shareholders shall have furnished to
you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement or the
Prospectus as of the time of purchase and the additional time of purchase,
as the case may be, as you reasonably may request.
(k) The Company and the Selling Shareholders shall have performed such
of their respective obligations under this Agreement as are to be performed
by the terms hereof at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(l) The Shares shall have been listed for trading on the New York
Stock Exchange upon official notice of issuance.
(m) At the time of purchase, you shall have received from each Selling
Shareholder a certificate (which may be signed by the Attorney-in-Fact), to
the effect that the representations and warranties of such Selling
Shareholder as set forth in this Agreement are true and correct as of such
date.
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(n) On or prior to the date hereof, the New York Stock Exchange shall
have approved the Underwriters' participation in the distribution of the
Shares to be sold by the Selling Shareholders.
9. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A under the
Act is not used, when you shall have received notification of the
effectiveness of the Registration Statement, or (ii) if Rule 430A under the
Act is used, when the parties hereto have executed and delivered this
Agreement.
(b) The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares if, at any time prior to the time
of purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on
the New York Stock Exchange shall have been suspended or minimum prices
shall have been established on the New York Stock Exchange or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred
any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in
your judgment or in the judgment of such group of Underwriters, makes it
impracticable to market the Shares. If you or any group of Underwriters
elect to terminate this Agreement as provided in this Section 9(b), the
Company and each other Underwriter shall be notified promptly by letter or
telegram.
(c) If any Underwriter shall default in its obligation to take up and
pay for the Firm Shares to be purchased by it hereunder and if the number
of Firm Shares which all Underwriters so defaulting shall have agreed but
failed to take up and pay for does not exceed 10% of the total number of
Firm Shares, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate principal amount of Firm Shares they are
obligated to purchase pursuant to Section 1) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate
with the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number
of Firm Shares set opposite the names of such non-defaulting Underwriters
in Schedule A.
(d) If any Underwriter shall default in its obligation to take up and
pay for the Firm Shares to be purchased by it hereunder and if the number
of Firm Shares which all Underwriters so defaulting shall have agreed but
failed to take up and pay for exceeds 10% of the total number of Firm
Shares, and arrangements satisfactory to you and the Company are
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not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter.
(e) Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it
will not sell any Firm Shares hereunder unless all of the Firm Shares are
purchased by the Underwriters (or by substituted underwriters selected by
you with the approval of the Company or selected by the Company with your
approval pursuant to Section 9(d)). If a new Underwriter or Underwriters
are substituted for a defaulting Underwriter or Underwriters in accordance
with Section 9(d), the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order
that any necessary change in the Registration Statement and the Prospectus
and other documents may be effected. The term Underwriter as used in this
Agreement shall refer to and include any Underwriter substituted under this
Section 9 with like effect as if such substituted Underwriter had
originally been named in Schedule A.
(f) If the purchase of the Shares by the Underwriters, as contemplated
by this Agreement, is not consummated for any reason permitted under this
Agreement or if such purchase is not consummated because the Company shall
be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 5(l), 7 and 10), and the Underwriters
shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 10).
10. Indemnity by the Company, the Selling Shareholders and the
Underwriters.
(a) The Company and the Selling Shareholders, jointly and severally,
agree to indemnify, defend and hold harmless each Underwriter, each person
that controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and each Underwriter's agents,
employees, officers and directors and the agents, employees, officers and
directors of any such controlling person (collectively, the "Underwriter
indemnified parties") from and against any and all losses, claims, damages,
judgments, liabilities and expenses (including the fees and expenses of
counsel and other expenses in connection with investigating, defending or
settling any such action or claim) which, jointly or severally, any
Underwriter indemnified party may incur as they are incurred (and
regardless of whether such Underwriter indemnified party is a party to the
litigation, if any) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or any Preliminary Prospectus, or arising out
of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, judgments, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information with respect to any
Underwriter furnished in writing by any Underwriter through you to the
Company expressly for use therein with reference to such Underwriter;
provided, however, that no Selling Shareholder shall be liable under this
Section 11 in an
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amount exceeding the total price at which the Shares sold by such Selling
Shareholder were offered to the public. This indemnity agreement will be in
addition to any liability the Company or the Selling Shareholders otherwise
may have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which indemnity
may be sought against the Company or the Selling Shareholders pursuant to
this Section 10, such Underwriter indemnified party shall promptly notify
the Company and each Selling Shareholder in writing, and the Company and
the Selling Shareholders shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Underwriter
indemnified party and payment of all fees and expenses; provided that the
omission so to notify the Company and the Selling Shareholders shall not
relieve them from any liability that they may have to any Underwriter
indemnified party. An Underwriter indemnified party shall have the right to
employ separate counsel in any such action or proceeding and to assume the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the employment of
such counsel has been authorized in writing by the Company or the Selling
Shareholders, (ii) the Company and the Selling Shareholders have failed
promptly to assume the defense and employ counsel satisfactory to the
Underwriter indemnified party or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both the
Underwriter indemnified party and the Company or the Selling Shareholders
and such Underwriter indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to it that are different
from or additional to those available to the Company and the Selling
Shareholders (in which case the Company and the Selling Shareholders shall
not have the right to assume the defense of such action on behalf of such
Underwriter indemnified party), in any of which events such fees and
expenses shall be borne by the Company and the Selling Shareholders and
reimbursed as they are incurred. It is understood, however, that the
Company and the Selling Shareholders shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time
for all such Underwriter indemnified parties, which firm shall be
designated in writing by Dillon, Read & Co. Inc., and that all such fees
and expenses shall be reimbursed as they are incurred. The Company and the
Selling Shareholders shall not be liable for any settlement of any such
action effected without the written consent of the Company or the Selling
Shareholders (which consent shall not be unreasonably withheld or delayed),
but if settled with the written consent of the Company or the Selling
Shareholders, or if there is a final judgment with respect thereto, the
Company and the Selling Shareholders agree to indemnify and hold harmless
each Underwriter indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration
Statement, and any person that controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act
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(collectively, the "Company indemnified parties") and each Selling
Shareholder to the same extent as the foregoing indemnity from the Company
and the Selling Shareholders to the Underwriter indemnified parties, but
only with respect to information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use with respect to such Underwriter in the Registration
Statement, any Preliminary Prospectus or the Prospectus. In case any action
shall be brought against any Company indemnified party or any Selling
Shareholder based on the Registration Statement, any Preliminary Prospectus
or the Prospectus and in respect of which indemnity may be sought against
any Underwriter pursuant to this Section 10(c), such Underwriter shall have
the rights and duties given to the Company and the Selling Shareholders by
Section 10(b) (except that if the Company and the Selling Shareholders
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate
in the defense thereof, provided that the fees and expenses of such
separate counsel shall be at the expense of such Underwriter), and the
Company indemnified parties and the Selling Shareholders shall have the
rights and duties given to the Underwriter indemnified parties by Section
10(b).
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or any Selling Shareholder, then the
party required to indemnify such indemnified party under this Section 10,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, judgments, liabilities and expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Shares, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Shareholders on the one hand and the Underwriters
on the other hand in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Shareholders on the one hand and
the Underwriters on the other hand shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, by the Selling Shareholders
or by the Underwriters, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, judgments, liabilities and expenses referred to above
shall be deemed to include any legal or other fees or
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<PAGE> 27
expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
10(d) were determined by pro rata allocation or by any other method of
allocation (even if the Underwriters were treated as one entity for such
purpose) that does not take account of the equitable considerations
referred to in this Section 10(d). Notwithstanding the provisions of this
Section 10(d), no Underwriter indemnified party shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter indemnified party and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter indemnified party otherwise has been
required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 10 are several in proportion to their respective
underwriting commitments and are not joint.
The statements under the caption "Underwriting" in the Prospectus (to
the extent such statements relate to an Underwriter) constitute the only
information furnished to the Company in writing by such Underwriter
expressly for use in the Registration Statement, any Preliminary Prospectus
or the Prospectus.
(e) The indemnity and contribution agreements contained in this
Section 10 and the representations, warranties and covenants of the Company
and the Selling Shareholders contained in this Agreement shall remain in
full force and effect, regardless of any investigation made by or on behalf
of any Underwriter indemnified party or by or on behalf of any Company
indemnified party or any Selling Shareholder, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
Subject to the provisions of Section 10(b) and Section 10(c), the Company,
each Selling Shareholder and each Underwriter agree promptly to notify the
other of the commencement of any litigation or proceeding against it in
connection with the issuance and sale of the Shares or in connection with
the Registration Statement or the Prospectus.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
3535 Piedmont Road, N.E., Atlanta, Georgia 30305, Attention: ____________; and
if to the Selling Shareholders, shall be sufficient in all respects, if
delivered or sent to ____________.
12. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
26
<PAGE> 28
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS
IN THIS AGREEMENT HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF
REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
13. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Selling
Shareholders, the Underwriter indemnified parties and the Company indemnified
parties, and their respective successors, assigns, executors and administrators.
No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
<PAGE> 29
If the foregoing correctly sets forth the understanding among the Company,
the Selling Shareholders and the Underwriters, please so indicate in the space
provided below for such purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company, the Selling Shareholders and
the Underwriters, severally.
Very truly yours,
NORRELL CORPORATION
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
THE SELLING SHAREHOLDERS NAMED
IN SCHEDULE B ATTACHED HERETO
By:
--------------------------
[ATTORNEY-IN-FACT]
Accepted and agreed to as of
the date first above written,
on behalf of themselves,
The Robinson-Humphrey Company, Inc.
and Donaldson, Lufkin & Jenrette
Securities Corporation
and the other several
Underwriters named in
Schedule A
DILLON, READ & CO. INC., as
Managing Underwriter
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
28
<PAGE> 30
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter Firm Shares
- ----------- -----------
<S> <C>
Dillon, Read & Co. Inc. ........................................ -------
The Robinson-Humphrey Company, Inc. ............................ -------
Donaldson, Lufkin & Jenrette Securities Corporation.............. -------
Total ---------
</TABLE>
<PAGE> 31
SCHEDULE B
<TABLE>
<CAPTION>
Number of Firm
Name Shares to be Sold
- ---- -----------------
<S> <C>
</TABLE>
<PAGE> 32
SCHEDULE C
DIRECTORS, EXECUTIVE OFFICERS AND SHAREHOLDERS
WHO HAVE EXECUTED LOCK-UP AGREEMENTS
<PAGE> 33
SCHEDULE D
SUBSIDIARIES
<PAGE> 1
EXHIBIT 5.1
TROUTMAN SANDERS LLP
NationsBank Plaza, Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
June 20, 1997
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, Georgia 30305
Gentlemen:
We have acted as counsel to Norrell Corporation, a Georgia corporation
(the "Company"), in connection with the proposed public offering and sale by the
Company and certain shareholders of the Company (the "Selling Shareholders") of
up to 3,277,500 shares of the Company's Common Stock, no par value (the "Common
Stock"), 350,000 shares of which will be sold by the Selling Shareholders (the
"Shareholders' Shares") and up to 2,927,500 shares of which will be sold by the
Company (the "Company Shares") (the Shareholders' Shares and the Company Shares,
collectively, the "Shares"), pursuant to an Underwriting Agreement (the
"Underwriting Agreement") to be entered into among the Company, the Selling
Shareholders and Dillon, Read & Co. Inc., Donaldson, Lufkin & Jenrette
Securities Corporation and The Robinson-Humphrey Company, Inc. (the
"Underwriters").
This opinion is limited by, and is in accordance with, the January 1,
1992 edition of the Interpretive Standards applicable to Legal Opinions to Third
Parties in Corporate Transactions adopted by the Legal Opinion Committee of the
Corporate and Banking Law Section of the State Bar of Georgia, which
Interpretive Standards are incorporated in this opinion by this reference.
In the capacity described above, we have examined originals (or copies
certified or otherwise identified to our satisfaction) of the registration
statement on Form S-3 (the "Registration Statement") being filed by the Company
with the Securities and Exchange Commission on the date of this letter relating
to the registration of the Shares pursuant to the Securities Act of 1933, as
amended (the "Act"), the form of Common Stock certificate, the Restated
Certificate of Incorporation and Bylaws of the Company as in effect on the date
hereof, corporate and other documents, records and papers, certificates of
public officials and
<PAGE> 2
certificates of officers of the Company and of the Selling Shareholders. In such
examination, we have also assumed the genuineness of all signatures, the
authenticity of all documents submitted to us and the genuineness and conformity
to original documents of documents submitted to us as certified or photostatic
copies.
On the basis of such examination, it is our opinion that, subject to
(i) the Underwriting Agreement being entered into by the proper parties in
substantially the form thereof filed as an exhibit to the Registration Statement
or as may be filed as an amendment thereto or under cover of a report on Form
8-K, (ii) the Shares being sold for value as contemplated by the terms of the
Underwriting Agreement, (iii) compliance with the pertinent provisions of the
Act and the Securities Exchange Act of 1934, as amended; and (iv) compliance
with the applicable provisions of the securities or "blue sky" laws of the
various states, the Shareholders' Shares are and the Company Shares will be,
when certificates therefor have been duly executed, countersigned, registered,
issued and delivered by the proper officers of the Company, duly and validly
issued, fully paid, nonassessable shares of the Company's Common Stock.
We are members of the Bar of the State of Georgia. In expressing the
opinions set forth above, we are not passing on the laws of any jurisdiction
other than the laws of the State of Georgia and the Federal law of the United
States of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the related prospectus.
Very truly yours,
/s/ TROUTMAN SANDERS LLP
TROUTMAN SANDERS LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our reports dated December 10,
1996 included in Norrell Corporation's Form 10-K for the fiscal year ended
October 27, 1996 and to all references to our Firm included in this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
June 18, 1997
<PAGE> 1
EXHIBIT 23.3
[GRANT THORNTON LETTERHEAD]
We have issued our report dated April 15, 1996, accompanying the financial
statements of Comtex Information Systems, Inc. and Subsidiaries for the years
ended December 31, 1995 and December 31, 1994 appearing in the 8-K/A of Norrell
Corporation filed on February 19, 1997, which are incorporated by reference in
this Registration Statement of Norrell Corporation on Form S-3 (File No.
001-14018).
We consent to the incorporation by reference in the Registration Statement of
the aforementioned report and to the use of our name as it appears under the
caption "Experts".
/s/ Grant Thornton LLP
Grant Thornton LLP
New York, New York
June 17, 1997
