<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 1999
REGISTRATION NO. 333-___
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
INTERIM SERVICES INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
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<CAPTION>
DELAWARE 7363 36-3536544
- ------------------------------- ---------------------------- -------------------
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309
( 954) 938-7600
-----------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN B. SMITH, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND LEGAL COUNSEL
2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309
(954) 938-7600
------------------------------------------------------------
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
ANDREW HULSH, ESQ.
BAKER & MCKENZIE
1200 BRICKELL AVENUE, 19TH FLOOR
MIAMI, FL 33131
(305) 789-8985
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement and the consummation of the merger of Norrell Corporation with and
into a wholly-owned subsidiary of the Registrant as described in this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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(d)
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. / / _____________________.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
Title of Proposed Proposed
Each Class of Maximum Offering Maximum Aggregate
Securities To Be Amount To Be Price Per Offering Amount of
Registered Registered Share Price Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, par value $0.01 per share 24,158,149(1) N/A N/A $110,813.43(2)
==================================================================================================================================
</TABLE>
(1) Represents the estimated maximum number of common shares issuable upon
consummation of the merger of Norrell Corporation with and into a
subsidiary of the Registrant, assuming the exercise of all options and
other rights to purchase common shares, no par value, of Norrell that are
exercisable prior to consummation of the merger.
(2) Pursuant to Rule 457(f), the registration fee was computed on the basis of
the market value of the Norrell common shares to be exchanged in the proposed
merger, computed in accordance with Rule 457(c) on the basis of the average
of the high and low prices per share of the Norrell common shares on the New
York Stock Exchange on May 17, 1999. In accordance with Rule 457(b), the
total registration fee of $110,813.43 has been reduced by $83,628.64, which
was paid on May 3, 1999, at the time of the filing under the Securities
Exchange Act of 1934, as amended, of preliminary copies of the Registrant's
and Norrell's proxy materials included herein. Therefore, the registration
fee payable upon filing of this Registration Statement is $27,184.79.
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 this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 2
INTERIM LOGO
NORRELL LOGO
JOINT PROXY STATEMENT/PROSPECTUS
MERGER PROPOSED--YOUR VOTE IS VERY IMPORTANT
The Boards of Directors of Interim Services Inc. and Norrell
Corporation have approved a merger of our two companies. Immediately following
the merger, Interim will continue to be a publicly traded company and Norrell
will be a wholly-owned subsidiary of Interim. In the merger, Norrell
shareholders will receive 0.9 Interim common share for each Norrell common
share they own. Norrell shareholders may elect to exchange their shares for
cash instead of Interim common shares in the merger in an a amount per share
equal to the greater of (a) 0.9 times the average closing price of Interim
common shares on the New York Stock Exchange for the 20 trading days ending two
days before the merger or (b) $16.00. Interim will not pay cash in the merger
in excess of amounts set forth in the merger agreement. See "Summary -- Merger
Consideration" beginning on page 4.
If Norrell shareholders elect to receive cash in excess of the
aggregate limitations described in the merger agreement, then the aggregate
number of Norrell common shares making cash elections will be reduced on a PRO
RATA basis among all Norrell shareholders making cash elections until these
limitations are no longer exceeded. If cash elections are made with respect to
less than 10% of the issued and outstanding Norrell common shares, the
principal shareholder of Norrell and his affiliates have agreed to make cash
elections with respect to that number of their Norrell common shares which
would cause at least 10% of the total merger consideration to be paid in cash.
Interim will issue a maximum of 24,158,149 Interim common shares in
the merger. Interim common shares are listed on the New York Stock Exchange
under the trading symbol "IS," and Norrell common shares are listed on the New
York Stock Exchange under the trading symbol "NRL."
We cannot complete the merger unless the shareholders of each company
approve the merger. A copy of the merger agreement is attached as Appendix A to
this joint proxy statement/prospectus. Each company will hold a special meeting
of its shareholders to vote on the merger. At the Interim special meeting,
Interim shareholders will also be asked to consider and vote upon a proposal to
increase the number of its authorized common shares and upon a proposal to
correct an inconsistency in the Certificate of Incorporation by deleting the
requirement of the affirmative vote of the holders of at least two-thirds of
the outstanding Interim common shares to amend, modify, alter, or repeal any
provision of Interim's By-laws. YOUR VOTE IS VERY IMPORTANT.
SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR A DESCRIPTION OF CERTAIN
RISKS RELATING TO THE MERGER.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED THE SECURITIES TO BE ISSUED UNDER THIS JOINT
PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS JOINT PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
JOINT PROXY STATEMENT/PROSPECTUS DATED MAY 26, 1999, WAS FIRST MAILED
TO SHAREHOLDERS ON OR ABOUT JUNE 2, 1999.
<PAGE> 3
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 1, 1999
------------------------
To the shareholders of Interim Services Inc.:
Notice is hereby given that a special meeting of shareholders of
Interim Services Inc. will be held on July 1, 1999, at 10:00 a.m., eastern
daylight time, at the executive offices of Interim, 2050 Spectrum Boulevard,
Ft. Lauderdale, Florida 33309 for the following purposes:
1. To consider and vote upon a proposal to approve the merger in
accordance with the Agreement and Plan of Merger, dated as of March 24, 1999,
as amended, by and among Interim, Interim Merger Corporation, a Delaware
corporation and a wholly-owned subsidiary of Interim, and Norrell Corporation,
which provides for the merger of Norrell with and into Interim Merger
Corporation;
2. To consider and vote upon a proposal to approve an amendment to our
Certificate of Incorporation to increase the authorized common shares from
100,000,000 common shares to 200,000,000 common shares;
3. To consider and vote upon a proposal to approve an amendment to our
Certificate of Incorporation to correct an inconsistency in our Certificate of
Incorporation by deleting the requirement of the affirmative vote of the
holders of at least two-thirds of the outstanding Interim common shares to
amend, modify, alter or repeal any provision of our By-laws; and
4. To transact such other business as may properly be brought before
the Interim special meeting.
A copy of the merger agreement is attached as Appendix A to the joint
proxy statement/prospectus.
Interim may abandon the merger at any time before completion of the
merger upon the terms and conditions of the merger agreement.
Only shareholders of record on May 26, 1999 are entitled to notice of
and to vote at the Interim special meeting. A list of shareholders entitled to
vote at the Interim special meeting will be available for examination at
Interim's executive offices beginning on June 21, 1999 during regular business
hours and at the Interim special meeting.
A form of proxy and a joint proxy statement/prospectus containing more
detailed information about the matters to be considered at the Interim special
meeting accompanies this notice.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR
OF THE MERGER AND EACH OF THE OTHER PROPOSALS.
You are cordially invited to attend the Interim special meeting in
person. If you attend the Interim special meeting, you may revoke your proxy
and vote in person. Your proxy may be revoked at any time before it is voted.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE INTERIM SPECIAL MEETING,
PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY, WHICH IS
BEING SOLICITED BY INTERIM'S BOARD OF DIRECTORS. AN ADDRESSED RETURN ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT
PURPOSE.
By order of the Board of Directors,
John B. Smith
Senior Vice President,
Secretary and Legal Counsel
Ft. Lauderdale, Florida
June 2, 1999
<PAGE> 4
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 1, 1999
To the shareholders of Norrell Corporation:
Notice is hereby given that a special meeting of shareholders of
Norrell Corporation will be held on July 1, 1999, at 10:00 a.m., eastern
daylight time, at the executive offices of Norrell, 3535 Piedmont Road, N.E.,
Atlanta, Georgia 30305 for the following purposes:
1. To consider and vote upon a proposal to approve the merger in
accordance with the Agreement and Plan of Merger, dated as of March 24, 1999,
as amended, by and among Interim Services Inc., Interim Merger Corporation,
Inc., a Delaware corporation and a wholly-owned subsidiary of Interim, and
Norrell, which provides for the merger of Norrell with and into Interim Merger
Corporation; and
2. To transact such other business as may properly be brought before
the Norrell special meeting.
A copy of the merger agreement is attached as Appendix A to the joint
proxy statement/prospectus.
Norrell may abandon the merger at any time before completion of the
merger upon the terms and conditions of the merger agreement.
Only shareholders of record on May 26, 1999 are entitled to notice of
and to vote at the Norrell special meeting. A list of shareholders entitled to
vote at the Norrell special meeting will be available for examination at
Norrell's executive offices beginning on June 21, 1999 during regular business
hours and at the Norrell special meeting.
A form of proxy and a joint proxy statement/prospectus containing more
detailed information about the matters to be considered at the Norrell special
meeting accompany this notice.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR
OF THE MERGER.
You are cordially invited and urged to attend the Norrell special
meeting in person. If you attend the Norrell special meeting, you may revoke
your proxy and vote in person. Your proxy may be revoked at any time before it
is voted.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE NORRELL SPECIAL MEETING,
PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY, WHICH IS
BEING SOLICITED BY NORRELL'S BOARD OF DIRECTORS. AN ADDRESSED RETURN ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT
PURPOSE.
IN ADDITION, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED ELECTION
FORM, IF YOU WANT TO RECEIVE CASH INSTEAD OF INTERIM COMMON SHARES FOR ANY OR
ALL OF YOUR NORRELL COMMON SHARES IF THE MERGER IS COMPLETED. THE COMPLETED
ELECTION FORM MUST BE FAXED OR MAILED TO THE EXCHANGE AGENT FOR RECEIPT BY 5:00
P.M., EASTERN DAYLIGHT TIME, ON JUNE 30, 1999 AT:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Fax: 1-704-590-7628
By order of the Board of Directors,
Mark H. Hain
Senior Vice President,
Secretary, and General Counsel
Atlanta, Georgia
June 2, 1999
<PAGE> 5
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
Questions and Answers About the Merger.................................................................... 1
Summary ................................................................................................. 4
The Companies.................................................................................... 4
Merger Consideration............................................................................. 4
Ownership of Interim After the Merger............................................................ 5
Comparative Per Share Market Price Information................................................... 5
Opinions of Financial Advisors................................................................... 5
Recommendation to Shareholders................................................................... 6
Norrell Stock Options............................................................................ 6
Accounting Treatment............................................................................. 6
Conditions to Completion of the Merger........................................................... 7
Termination of the Merger Agreement.............................................................. 7
Compensation Payable if Merger is Not Completed and Effect of that Payment....................... 7
Interests of Members of Interim's and Norrell's Boards of Directors and
Management in the Merger....................................................................... 8
Comparison of Rights of Norrell Shareholders and Interim Shareholders............................ 8
Certain U.S. Federal Income Tax Consequences..................................................... 8
Regulatory Matters............................................................................... 8
Irrevocable Proxy and Merger Consideration Election Agreement.................................... 9
Other Interim Proposals.......................................................................... 9
Interim's Share Repurchase Program............................................................... 9
Selected Financial Data.......................................................................... 10
Comparative Per Share Data....................................................................... 13
Market Prices and Dividends...................................................................... 13
Risk Factors ............................................................................................ 15
Risks Relating to the Merger..................................................................... 15
We cannot assure you that Interim and Norrell will be
successfully combined .................................................................. 15
We may not achieve the expected cost savings and other
benefits of the merger and we will have significant
merger related costs that may have a material negative
effect on our results of operations..................................................... 15
Fluctuations in the market price of Interim common shares
may reduce the consideration to be received by the
holders of Norrell common shares in the merger.......................................... 16
The termination fee may discourage other companies
from trying to combine with or acquire Norrell even if
these bids offer higher immediate value to shareholders................................. 16
Officers and directors of Norrell have agreements and
other arrangements that may create potential conflicts
of interest with Norrell shareholders regarding the
merger.................................................................................. 16
Industry and Business Risks...................................................................... 16
The staffing services industry is competitive............................................... 16
Downturns in the local economies in which we operate
may result in a reduction in the demand for our services................................ 17
Our operations may suffer from computer problems
relating to the Year 2000............................................................... 17
We depend on the availability of qualified personnel........................................ 17
Departure of key personnel could harm our business.......................................... 18
We are subject to claims and liability as a significant employer............................ 18
Cautionary Statement Regarding Forward-Looking Information................................................ 18
The Companies ............................................................................................ 19
Interim.......................................................................................... 19
Norrell.......................................................................................... 20
</TABLE>
(i)
<PAGE> 6
<TABLE>
<CAPTION>
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The Special Meetings...................................................................................... 20
Matters to be Considered at the Special Meetings................................................. 20
Votes Required for Approval...................................................................... 21
How Shares Will be Voted at the Special Meetings................................................. 22
How to Revoke a Proxy............................................................................ 22
Solicitation of Proxies.......................................................................... 23
The Merger................................................................................................ 23
Background of the Merger......................................................................... 24
Reasons for the Merger; Recommendations of the Boards of Directors............................... 28
Opinions of Financial Advisors................................................................... 33
Interim..................................................................................... 33
Norrell..................................................................................... 41
Interests of Members of Norrell's Board of Directors
and Management in the Merger................................................................... 47
Accounting Treatment............................................................................. 49
Certain U.S. Federal Income Tax Consequences..................................................... 50
Regulatory Matters............................................................................... 52
Resale Restrictions.............................................................................. 53
Amendment of Existing Credit Facilities; Refinancing of Existing Indebtedness.................... 53
The Merger Agreement...................................................................................... 53
The Merger....................................................................................... 53
Effective Time of the Merger..................................................................... 54
Cash Election Procedures......................................................................... 54
Exchange Procedures.............................................................................. 55
Representations and Warranties................................................................... 55
Covenants........................................................................................ 56
No Solicitation of Transactions by Norrell....................................................... 57
Boards' Covenant to Recommend.................................................................... 58
Employee Benefits and Benefit Plans.............................................................. 59
Indemnification and Insurance.................................................................... 59
Conditions....................................................................................... 60
Termination...................................................................................... 60
Termination Fees................................................................................. 62
Other Expenses................................................................................... 62
Assignment, Amendment and Waiver................................................................. 63
Rights of Dissenting Shareholders......................................................................... 63
The Irrevocable Proxy and Merger Consideration Election Agreement......................................... 63
Irrevocable Proxy................................................................................ 63
Merger Consideration Election Agreement.......................................................... 63
Management and Operations After the Merger................................................................ 63
Guy W. Millner................................................................................... 64
Share Ownership of Guy W. Millner................................................................ 64
Unaudited Pro Forma Combined Financial Data............................................................... 64
Description of Interim Capital Stock...................................................................... 70
Authorized Capital Stock......................................................................... 70
Interim Common Shares............................................................................ 70
Interim Preferred Shares......................................................................... 70
Participating Preferred Share Purchase Rights.................................................... 71
Interim's Share Repurchase Program............................................................... 71
Comparative Rights of Shareholders........................................................................ 72
Election of Directors............................................................................ 72
Removal of Directors............................................................................. 73
Vacancies on the Board of Directors.............................................................. 73
Action by Written Consent........................................................................ 74
Amendments to Charter............................................................................ 74
Amendments to By-laws............................................................................ 74
Special Meetings of Shareholders................................................................. 75
</TABLE>
(ii)
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C>
Vote on Extraordinary Corporate Transactions..................................................... 75
Rights of Inspection............................................................................. 76
Dividends........................................................................................ 76
Appraisal Rights of Dissenting Shareholders...................................................... 76
Liability of Directors........................................................................... 77
Indemnification of Directors and Officers;
Directors' and Officers Insurance................................................................ 78
Preemptive Rights................................................................................ 79
Special Redemption Provisions.................................................................... 79
Shareholder Suits................................................................................ 80
Business Combination Restrictions................................................................ 80
Shareholders' Rights Agreement................................................................... 82
Advance Notice for Nomination of Directors and Shareholder Proposals............................. 82
Other Interim Proposals................................................................................... 83
Interim Proposal to Amend its Certificate of Incorporation to
Increase Number of Authorized Common Shares................................................. 83
Interim Proposal to Amend its Certificate of Incorporation to Delete the
Requirement of the Affirmative Vote of the Holders of at Least Two-Thirds of
the Outstanding Interim Common Shares to Amend, Modify, Alter or Repeal
any Provision of the By-laws............................................................... 84
Legal Matters............................................................................................. 84
Experts................................................................................................... 84
Where You Can Find More Information....................................................................... 85
Appendix A - Agreement and Plan of Merger, as amended .................................................... A-1
Appendix B - Irrevocable Proxy and Merger Consideration Election Agreement................................ B-1
Appendix C - Opinion of NationsBanc Montgomery Securities LLC............................................. C-1
Appendix D - Opinion of Goldman, Sachs & Co............................................................... D-1
Appendix E - Certificate of Amendment to Interim's Certificate of Incorporation
Increasing the Number of Authorized Common Shares......................................... E-1
Appendix F - Certificate of Amendment to Interim's Certificate of Incorporation Deleting the
Requirement of the Affirmative Vote of Holders of at Least Two-Thirds of the
Outstanding Interim Common Shares to Amend, Modify, Alter or Repeal any
Provision of the By-laws.................................................................. F-1
</TABLE>
REFERENCES TO ADDITIONAL INFORMATION
This document incorporates important business and financial
information about our companies from documents that we have filed with the SEC
but have not included in or delivered with this document. If you write or call
us, we will send you these documents, excluding exhibits unless the exhibit is
specifically incorporated by reference as an exhibit in this joint proxy
statement/prospectus, without charge. You can contact us at:
Interim Services Inc. Norrell Corporation
2050 Spectrum Boulevard 3535 Piedmont Road N.E.
Ft. Lauderdale, Florida 33309 Atlanta, Georgia 30305
(954) 489-6225 (404) 240-3000
Attn: Deirdre A. Skolfield Attn: Barbara Marxer
Investor Relations Director Investor Relations
PLEASE REQUEST DOCUMENTS BY JUNE 24, 1999 TO RECEIVE THEM BEFORE THE
SPECIAL MEETINGS. IF YOU REQUEST ANY INCORPORATED DOCUMENTS, WE WILL MAIL THEM
TO YOU BY FIRST CLASS MAIL, OR ANOTHER EQUALLY PROMPT MEANS, BY THE NEXT
BUSINESS DAY AFTER WE RECEIVE YOUR REQUEST.
See "Where You Can Find More Information" on page 85 for more
information about the companies or the documents referred to in this document.
(iii)
<PAGE> 8
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHY ARE INTERIM AND NORRELL PROPOSING TO MERGE?
A: The Interim Board of Directors believes that the merger is in the best
interests of Interim and its shareholders and the Norrell Board of
Directors believes that the merger is in the best interests of Norrell
and its shareholders. To review the reasons for the merger in greater
detail, see "The Merger -- Background of the Merger; -- Reasons for
the Merger; Recommendations of the Boards of Directors" on pages 24
through 33.
Q: HOW DO NORRELL SHAREHOLDERS ELECT TO RECEIVE CASH INSTEAD OF INTERIM
COMMON SHARES IN EXCHANGE FOR ANY OR ALL OF THEIR NORRELL COMMON
SHARES?
A: By signing, dating and completing the enclosed election form and
mailing or faxing it for receipt by 5:00 p.m., eastern daylight time,
on June 30, 1999 to the exchange agent at:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Fax: 1-704-590-7628
Norrell shareholders have the right to change or revoke their election
at anytime before 5:00 p.m. eastern daylight time on June 30, 1999. If
an election form is revoked, it will be treated as if no cash election
had been made in the merger.
If a Norrell shareholder has not submitted to the exchange agent a
properly executed election form by 5:00 p.m. eastern daylight time on
June 30, 1999, that holder's Norrell common shares will be exchanged
for Interim common shares.
Q: HOW WILL NORRELL SHAREHOLDERS ELECTING TO RECEIVE CASH INSTEAD OF
INTERIM COMMON SHARES IN THE MERGER KNOW THE AMOUNT OF CASH TO BE
RECEIVED BY THEM?
A: Shareholders may call toll free 1-800-838-5854 at any time beginning
June 4, 1999 to listen to a voice recording indicating the average
daily closing price of Interim common shares from the beginning of the
20-trading day measurement period, through the day before the day of
the recording. If the average closing price of Interim common shares
for the 20-trading day measurement period is less than $12.00,
shareholders will be informed that either Interim or Norrell has the
right to call off the merger and will be advised to call again on a
specified date for final information on the merger.
Q: WHAT DO I NEED TO DO NOW?
A: After you have carefully read this document, just indicate on your
proxy card how you want to vote. Sign and mail the proxy card in the
enclosed prepaid return envelope marked "Proxy" as soon as possible so
that your shares may be represented and voted at your special meeting.
If you want to receive cash in the merger, your election form must be
received by the exchange agent before 5:00 P.M. eastern daylight time
on June 30, 1999.
Q: WHO IS ENTITLED TO VOTE ON THE MERGER, AND WHAT IS THE REQUIRED VOTE
TO APPROVE THE MERGER?
A: In order to complete the merger, the Norrell shareholders and Interim
shareholders must approve the merger. The affirmative vote of the
holders of a majority of the outstanding Norrell common shares is
required to approve the merger. The affirmative vote of the holders of
a majority of the Interim common shares represented in person or by
proxy at the Interim special meeting, assuming a quorum is present and
1
<PAGE> 9
assuming the number of votes cast on the merger proposal represents at
least a majority of the outstanding Interim common shares, is required
to approve the merger. Holders of a majority of the outstanding
Norrell common shares entitled to vote, present or represented by
proxy at the Norrell special meeting will constitute a quorum for the
transaction of business at the Norrell special meeting. Holders of a
majority of the outstanding Interim common shares entitled to vote,
present or represented by proxy at the Interim special meeting will
constitute a quorum for the transaction of business at the Interim
special meeting. Interim and Norrell shareholders of record as of May
26, 1999 are entitled to vote on the merger.
If Norrell shareholders fail to return their proxy, their shares will
not be voted and will have the effect of a vote against the merger. If
Norrell shareholders return a properly executed proxy but fail to vote
their proxy, their shares will be counted for purposes of determining
whether a quorum is present at the Norrell special meeting and will be
voted "FOR" approval of the merger.
If Interim shareholders fail to return their proxy, their shares will
not be counted for the purpose of determining whether a quorum is
present at the Interim special meeting and will not be voted on the
merger proposal. If Interim shareholders return a properly executed
proxy but fail to vote their proxy, their shares will be counted for
purposes of determining whether a quorum is present at the Interim
special meeting and will be voted "FOR" approval of the merger.
THE BOARD OF DIRECTORS OF EACH COMPANY UNANIMOUSLY RECOMMENDS VOTING
"FOR" THE MERGER.
Q: DO ANY INTERIM OR NORRELL SHAREHOLDERS HAVE DISSENTERS' OR APPRAISAL
RIGHTS?
A: Norrell shareholders and Interim shareholders have no dissenters'
rights of appraisal or other rights to demand fair value for their
shares by reason of the merger.
Q: IF MY BROKER HOLDS MY SHARES IN "STREET NAME," WILL MY BROKER VOTE MY
SHARES FOR ME?
A: Your broker will vote your shares on the merger only if you provide
instructions on how to vote. You should follow the directions provided
by your broker regarding how to instruct your broker to vote your
shares.
Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?
A: Yes. You can change your vote at any time before your proxy is voted
at the special meeting. Just send a new, later dated, signed proxy
card to your company's Secretary before your special meeting or attend
your meeting and vote in person.
Q: SHOULD NORRELL SHAREHOLDERS SEND IN STOCK CERTIFICATES AT THIS TIME?
A: No. After we complete the merger, First Union National Bank, the
exchange agent, will send Norrell shareholders written instructions
for exchanging their shares.
Q: WHEN DO YOU EXPECT TO COMPLETE THE MERGER?
A: We expect to complete the merger promptly after the Norrell
shareholders and the Interim shareholders have approved the merger,
provided that the other conditions to the merger have been satisfied.
Q: WHERE CAN I FIND MORE INFORMATION ABOUT THE COMPANIES?
A: Both companies file reports and other information with the SEC. You
may read and copy this information at the SEC's public reference
facilities. Please call the SEC at 1-800-SEC-0330 for information
2
<PAGE> 10
about these facilities. This information is also available at the
Internet site maintained by the SEC at http://www.sec.gov and at the
offices of the New York Stock Exchange. You may also request copies of
these documents from us. See "Where Can You Find More Information" on
page 85.
Q: WHO CAN ANSWER MY QUESTIONS ABOUT THE MERGER?
A: If you are an Interim shareholder and you have questions, you may
contact:
Interim Services Inc.
2050 Spectrum Boulevard
Ft. Lauderdale, Florida 33309
Attention: Deirdre A. Skolfield
Investor Relations Director
Telephone Number: (954) 489-6225
If you are a Norrell shareholder and you have questions about the
merger, you may contact:
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, Georgia 30305
Attn: Barbara Marxer
Investor Relations
Telephone Number: (404) 240-3000
3
<PAGE> 11
SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT. IT
DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU. WE URGE
YOU TO READ CAREFULLY THE ENTIRE DOCUMENT AND THE OTHER DOCUMENTS REFERRED TO
IN THIS DOCUMENT TO FULLY UNDERSTAND THE MERGER. FOR A GUIDE AS TO WHERE YOU
CAN OBTAIN MORE INFORMATION ON INTERIM AND NORRELL GENERALLY, SEE "WHERE YOU
CAN FIND MORE INFORMATION" ON PAGE 85. THE MERGER AGREEMENT IS ATTACHED AS
ANNEX A TO THIS DOCUMENT. WE ENCOURAGE YOU TO READ THE MERGER AGREEMENT. IT IS
THE LEGAL DOCUMENT THAT GOVERNS THE MERGER. WE HAVE ALSO INCLUDED PAGE
REFERENCES PARENTHETICALLY TO DIRECT YOU TO A MORE COMPLETE DISCUSSION OF THE
TOPICS PRESENTED IN THIS SUMMARY.
THE COMPANIES (SEE PAGE 19)
Interim Services Inc.
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
(954) 938-7600
Interim is a leader in identifying, assessing, deploying and measuring
talent for a wide variety of businesses. Interim is organized into three
operating segments which generally follow its management organization
structure: North America, Europe and Australia/Asia. In each of its operating
segments, Interim provides four services. Through these services - consulting,
managed services, search/recruitment and flexible staffing - Interim provides
solutions in the areas of information technology, finance, legal,
sales/marketing, technical and human resources, as well as clerical,
administrative and light industrial.
Norrell Corporation
3535 Piedmont Road N.E.
Atlanta, Georgia 30305
(404) 240-3000
Norrell is a strategic workforce management company and a leading
provider of staffing, outsourcing and professional services. Norrell is
organized into three business groups: Staffing Services, which provides
temporary administrative, teleservices and light industrial staffing;
Outsourcing Services, which provides administrative services, teleservices and
human resource services through outsourcing agreements that usually define the
scope of work and contain specific service productivity and quality
measurements; and Professional Services, which provides accounting staffing,
information technology staffing, project management services, systems
integration consulting services and executive placement. Norrell provides
services through a network of over 460 offices which are located primarily in
the United States.
MERGER CONSIDERATION (SEE PAGE 53)
In the merger, Norrell shareholders will receive 0.9 Interim common
share for each Norrell common share they own. Norrell shareholders may elect to
exchange their shares for cash instead of Interim common shares in an amount
per share equal to the greater of (a) 0.9 times the average closing price of
Interim common shares on the New York Stock Exchange for the 20 trading days
ending two days before the merger or (b) $16.00.
There are two limitations on the amount of cash Interim will pay in
the merger, and neither of these may be exceeded. The first limitation is that
the total amount of cash paid by Interim may not exceed $175 million. The
second limitation is that the total amount of cash payments to be made by
Interim in the merger plus approximately $28,200,000, representing the amount
of all payments
4
<PAGE> 12
made by Norrell or its affiliates since March 24, 1996 in connection with the
purchase and redemption of Norrell common shares, may not exceed 49% of the sum
of the total value of cash and shares to be delivered to Norrell shareholders
in the merger plus approximately $28,200,000. We have required this second
limitation to enable Norrell shareholders to defer the payment of federal
income taxes on the gain, if any, from the exchange of their Norrell common
shares for Interim common shares in the merger. See "The Merger -- Certain
U.S. Federal Income Tax Consequences" on page 50.
If Norrell shareholders elect to receive cash in excess of the
aggregate limitations described above, then the aggregate number of Norrell
common shares making cash elections will be reduced on a PRO RATA basis among
all Norrell shareholders making cash elections until these limitations are no
longer exceeded. Further, if cash elections are made by holders of less than
10% of the issued and outstanding Norrell common shares, the principal
shareholder of Norrell and his affiliates have agreed to make cash elections
with respect to that number of their Norrell common shares which would cause at
least 10% of the total merger consideration to be paid in cash.
Interim will not issue fractional shares. Norrell shareholders will
receive an amount of cash based on the Interim common share price instead of
fractional shares.
OWNERSHIP OF INTERIM AFTER THE MERGER (SEE PAGE 23)
Immediately after the merger, current Norrell shareholders will own
a maximum of approximately 35.3% of the outstanding Interim common shares and
current Interim shareholders will own a minimum of approximately 64.7% of the
outstanding Interim common shares, assuming that cash elections are made with
respect to only 10% of the Norrell common shares, which is the minimum
percentage required under the merger agreement and the irrevocable proxy and
merger consideration election agreement. These percentages may fluctuate based
upon the actual number of Norrell common shares that elect to be exchanged for
cash in the merger. These percentages also are based on the number of shares of
each company outstanding on May 20, 1999.
COMPARATIVE PER SHARE MARKET PRICE INFORMATION (SEE PAGE 13)
Interim common shares and Norrell common shares are listed on the New
York Stock Exchange. For the five trading days before the announcement of the
merger agreement, the average closing price of the Interim common shares was
$18.0875 and the average closing price of the Norrell common shares was $12.85.
On March 24, 1999, the day immediately before announcement of the merger
agreement, the closing price of Interim common shares was $17.8125 and the
closing price of Norrell common shares was $12.625. On May 20, 1999, the closing
price of Interim common shares was $21.50 and the closing price of Norrell
common shares was $18.00.
If the merger occurred on May 20, 1999, the market value of 0.9
Interim common share that Norrell shareholders would have received in the
merger for each Norrell common share would have been $19.35. While the exchange
ratio is fixed, the market price of Interim common shares will fluctuate before
the merger. We urge you to obtain current stock price quotations.
As of May 18, 1999, 44,293,663 Interim common shares were outstanding.
As of May 18, 1999, 26,743,981 Norrell common shares, and options to purchase
3,080,895 Norrell common shares, were outstanding.
OPINIONS OF FINANCIAL ADVISORS (SEE PAGE 33)
INTERIM SHAREHOLDERS. In deciding to approve the merger, one of the
many factors that Interim's Board of Directors considered was the March 24,
1999 written opinion of its financial advisor, NationsBanc Montgomery
Securities LLC that, as of the date of the opinion, the merger consideration to
be paid by Interim upon the closing of the merger was fair to Interim from a
financial point of view.
5
<PAGE> 13
We have attached as Appendix C to this joint proxy
statement/prospectus the full text of NationsBanc Montgomery's written opinion.
The opinion sets forth assumptions made, matters considered and limitations on
the review undertaken in connection with the opinion and is incorporated herein
by reference. The opinion does not constitute a recommendation by NationsBanc
Montgomery as to how any holder of Interim common shares should vote with
respect to the merger. YOU SHOULD READ THE OPINION IN ITS ENTIRETY.
NORRELL SHAREHOLDERS. In deciding to approve the merger, one of the
many factors that Norrell's Board of Directors considered was the March 24,
1999 written opinion of its financial advisor, Goldman, Sachs & Co., to the
effect that, as of the date of the opinion, the exchange ratio pursuant to the
merger agreement was fair from a financial point of view to the holders of
Norrell common shares. Goldman Sachs did not and does not express any opinion
to any holder of Norrell common shares that is required to or elects to make a
cash election with respect with respect to such holder's shares.
We have attached as Appendix D to this joint proxy
statement/prospectus the full text of Goldman Sachs' written opinion. The
opinion sets forth assumptions made, matters considered and limitations on the
review undertaken in connection with the opinion and is incorporated herein by
reference. The opinion does not constitute a recommendation by Goldman Sachs as
to how any holder of Norrell common stock should vote with respect to the
merger. YOU SHOULD READ THE OPINION IN ITS ENTIRETY.
RECOMMENDATION TO SHAREHOLDERS (SEE PAGE 20)
INTERIM SHAREHOLDERS. The Interim Board of Directors has unanimously
determined that the merger is fair and is in the best interests of Interim and
its shareholders, and has approved the merger. Accordingly, the Interim Board
of Directors recommends that Interim shareholders vote to approve the merger.
NORRELL SHAREHOLDERS. A special independent committee appointed by the
Norrell Board of Directors concluded that the merger is fair and is in the best
interests of Norrell and its shareholders, and recommended that the Norrell
Board of Directors approve the merger. The Norrell Board of Directors also
determined that the merger is fair and is in the best interests of Norrell and
its shareholders. Accordingly, the Norrell Board of Directors recommends that
Norrell shareholders vote to approve the merger.
NORRELL STOCK OPTIONS (SEE PAGE 54)
Each outstanding option that Norrell has granted under its stock
option plans to purchase one Norrell common share will be converted into an
option to purchase 0.9 Interim common share at an exercise or purchase price
per share equal to the exercise price per share in effect under the Norrell
option DIVIDED BY 0.9, and otherwise on substantially the same terms and
conditions as the former option to purchase Norrell common shares. Accordingly,
the number of shares for which an option will be exercisable will decrease and
the exercise price of each option will increase. The adjustments are intended
to give to Norrell option holders the right to acquire the same number of
Interim common shares that they would have been entitled to receive had they
exercised their Norrell options immediately before the merger and the Norrell
common shares they would have received upon this exercise were exchanged in the
merger for Interim common shares. Also, the adjustments allow the total
consideration payable upon exercise of the options after the merger to be the
same as that which would have been paid upon exercise of the options before the
merger.
ACCOUNTING TREATMENT (SEE PAGE 49)
Interim will account for the merger under the purchase method of
accounting, in accordance with generally accepted accounting principles. Under
the purchase method of accounting, Interim will allocate the purchase price of
Norrell, including direct costs of the merger, to the assets acquired and
liabilities assumed based upon their estimated relative fair values, with the
excess purchase consideration allocated to goodwill. Interim amortizes goodwill
and other intangible assets using the straight-line method over their estimated
useful lives, not to exceed 40 years.
6
<PAGE> 14
CONDITIONS TO COMPLETION OF THE MERGER (SEE PAGE 60)
We will not complete the merger unless a number of conditions have
been satisfied or waived. These conditions include:
o approval of the merger by the shareholders of each company;
o expiration of time periods under applicable federal antitrust
laws;
o the absence of any legal prohibitions against the merger; and
o material compliance by Interim and Norrell with their
obligations under the merger agreement.
TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 60)
The companies may agree in writing to terminate the merger agreement
at any time without completing the merger, even after the shareholders of both
companies have approved the merger.
In addition, either Interim or Norrell may decide to terminate the
merger agreement if:
o the merger has not been completed by September 30, 1999 or if
any conditions to the obligations of Interim or Norrell have
not been satisfied or waived by that date;
o the shareholders of the other company fail to approve the
merger;
o any governmental entity issues a final and non-appealable
order making the merger illegal or prohibiting the merger;
o the other company breaches its representations or fails to
perform its obligations under the merger agreement in a
material manner, and the breach or failure to perform is not
cured or waived under the terms of the merger agreement; or
o if the average of daily closing sale prices for Interim
common shares on the New York Stock Exchange for the twenty
consecutive full trading days ending on the close of trading
on the second trading day before the merger is less than
$12.00.
COMPENSATION PAYABLE IF MERGER IS NOT COMPLETED AND EFFECT OF THAT PAYMENT
(SEE PAGE 62)
If the merger is not completed because the Norrell Board of Directors
withdraws its recommendation of the merger, or recommends an alternative
transaction involving a merger, share exchange, consolidation or transfer of
substantially all of the assets of Norrell, Norrell will be required to pay
Interim a fee of $10 million plus actual documented expenses incurred by
Interim in connection with the merger in an amount up to $1 million. This fee
could discourage other companies from trying or proposing to combine with or
acquire Norrell.
If the merger agreement is terminated by either party in accordance
with any of the other provisions of the merger agreement, that party is
obligated to reimburse the other party for its actual documented expenses
incurred in connection with the merger, in an amount up to $1 million.
7
<PAGE> 15
INTERESTS OF MEMBERS OF INTERIM'S AND NORRELL'S BOARDS OF DIRECTORS AND
MANAGEMENT IN THE MERGER (SEE PAGE 47)
Some of Norrell's directors and executive officers have interests in
the merger that may be deemed to conflict with those of Norrell shareholders or
that are in addition to their interests as Norrell shareholders. These
interests include employment agreements, stock options and continuation as
Interim directors. You should be aware of these interests because they may
conflict with your interests.
As a condition to the completion of the merger, Interim has agreed to
appoint Guy W. Millner, the principal shareholder and a director of Norrell, or
his designee, to the Interim Board of Directors. In addition, there are
officers of Norrell who are entitled to severance benefits in the event their
employment is terminated following the merger. The Norrell Board of Directors
was aware of these interests and concluded that these interests did not detract
from the fairness of the merger to the Norrell shareholders.
On May 18, 1999, Interim directors and executive officers and their
affiliates beneficially owned 318,699 Interim common shares, excluding shares
which may be acquired upon exercise of options. This is approximately 0.7% of
the then outstanding Interim common shares. Each of the directors and executive
officers of Interim has indicated that he or she intends to vote these shares
to approve the merger.
On May 18, 1999, Norrell directors and executive officers and their
affiliates beneficially owned 10,528,568 Norrell common shares, excluding
shares which may be acquired upon exercise of options. This is approximately
40% of the then outstanding Norrell common shares. Each of the directors and
executive officers of Norrell has indicated that he or she intends to vote
these shares to approve the merger.
COMPARISON OF RIGHTS OF NORRELL SHAREHOLDERS AND INTERIM SHAREHOLDERS
(SEE PAGE 72)
After the merger, Norrell shareholders who do not receive cash for all
of their Norrell common shares will become Interim shareholders. Because
Norrell is a Georgia corporation and Interim is a Delaware corporation, the
rights of the Norrell shareholders who become Interim shareholders will be
governed by Delaware law instead of Georgia law and by Interim's Certificate of
Incorporation and By-laws instead of Norrell's Articles of Incorporation and
By-laws.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 50)
We have structured the merger so that Norrell shareholders will not
recognize any taxable gain or loss as a result of the merger, except to the
extent of cash received in the merger, and Interim shareholders will not
recognize any taxable gain or loss as a result of the merger. As a condition to
the completion of the merger, Interim and Norrell will receive an opinion from
legal counsel to this effect. However, you are urged to consult your own tax
advisors.
REGULATORY MATTERS (SEE PAGE 52)
Interim and Norrell are prohibited from completing the merger under
U.S. antitrust laws until they have furnished information and materials to the
Antitrust Division of the Department of Justice and the Federal Trade
Commission and a required waiting period has ended. The required notification
and report forms were filed by Interim, Norrell and the principal shareholder
of Norrell, and early termination of the waiting period was granted on April
26, 1999. The Department of Justice and the Federal Trade Commission will
continue to have the authority to challenge the merger on antitrust grounds
before or after the merger is completed even though the waiting period ended.
Upon completion of the merger, Interim will acquire Norrell's
healthcare business. Interim is required to obtain the approval of the New York
Public Health Council to acquire Norrell's healthcare business in New York. The
8
<PAGE> 16
New York State Department of Health has stated that, based upon Interim's
representation that it intends to divest itself of the healthcare business
after the merger, it will not require Interim to submit applications for
approval of the change in control resulting from the merger before a buyer is
identified.
IRREVOCABLE PROXY AND MERGER CONSIDERATION ELECTION AGREEMENT (SEE PAGE 63)
IRREVOCABLE PROXY OF GUY W. MILLNER. On March 24, 1999, Guy W. Millner,
the principal shareholder and a director of Norrell, and certain of his
affiliates granted an irrevocable proxy to Interim in which they agreed to vote
their Norrell common shares to approve the merger. The irrevocable proxy
terminates if the Norrell Board of Directors withdraws its approval or
recommendation of the merger, or if the merger agreement is terminated. As of
May 18, 1999, Mr. Millner and these affiliates owned of record approximately 35%
of the outstanding Norrell common shares, and this irrevocable proxy makes it
likely that the merger will receive the required approval of Norrell
shareholders.
MERGER CONSIDERATION ELECTION AGREEMENT. On March 24, 1999, Guy W.
Millner and an affiliate of Mr. Millner agreed, if cash elections are made with
respect to less than 10% of the issued and outstanding Norrell common shares,
to make cash elections with respect to the number of their Norrell common
shares which would cause at least 10% of the total merger consideration to be
paid in cash.
The Irrevocable Proxy and Merger Consideration Election Agreement is
attached to this document as Appendix B.
OTHER INTERIM PROPOSALS (SEE PAGE 83)
Interim is also presenting the following proposals to its shareholders
at the Interim special meeting:
o A proposal to approve an amendment to Interim's Certificate
of Incorporation to increase the number of authorized common
shares from 100,000,000 common shares to 200,000,000 common
shares; and
o A proposal to approve an amendment to Interim's Certificate
of Incorporation to correct an inconsistency in Interim's
Certificate of Incorporation by deleting the requirement of
the affirmative vote of holders of at least two-thirds of the
outstanding Interim common shares to amend, alter, modify or
repeal any provision of its By-laws.
The proposal to increase the number of authorized common shares is
conditioned on the closing of the merger. Approval of the proposal to increase
the number of authorized common shares requires the favorable vote of a
majority of the outstanding Interim common shares. Approval of the proposal to
delete the requirement of a two-thirds shareholder vote to amend the By-laws
requires the favorable vote of the holders of at least two-thirds of the
outstanding Interim common shares.
THE INTERIM BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT INTERIM
SHAREHOLDERS VOTE TO APPROVE EACH OF THE FOREGOING PROPOSALS.
INTERIM'S SHARE REPURCHASE PROGRAM (SEE PAGE 71)
On April 2, 1999, Interim's Board of Directors authorized a share
repurchase program to allow Interim to purchase up to 3.3 million Interim
common shares. As of May 20, 1999, 3,005,300 Interim common shares have been
repurchased at an average price of $16.0455 per share.
Purchases have been made in open market transactions at prevailing
prices and through privately negotiated transactions. Interim has financed the
repurchases from working capital and borrowings under its existing credit
facilities.
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<PAGE> 17
The share repurchase program was implemented principally to acquire
shares which will be delivered to Norrell shareholders upon completion of the
merger.
SELECTED FINANCIAL DATA
INFORMATION ABOUT FINANCIAL DATA AND EXPLANATION OF PERIODS PRESENTED:
The following tables show selected historical financial data for each
of our companies. We base the information in the following tables on the
historical financial information of our companies that we have presented in our
prior filings with the SEC. When you read the selected financial information we
provide in the following tables, you should also read the historical financial
information and the more detailed financial information in the other documents
to which we refer. Interim operates on a 52-53 week fiscal year ending on the
last Friday in December of each year. Norrell operates on a 52-53 week fiscal
year ending on the Sunday closest to the end of October of each year. A 53rd
week occurs in one of every 5 or 6 fiscal years depending on the timing of leap
years. The 1997 fiscal year of Norrell included 53 weeks compared to 52 weeks
for the 1998 and 1996 fiscal years. The 1994 fiscal year of Interim included 53
weeks compared to 52 weeks for its other fiscal years. For instructions on how
to obtain documents each of our companies has filed with the SEC, see "Where
You Can Find More Information" on page 85.
INTERIM SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
In the following table, we provide you with selected historical
consolidated financial information of Interim. We prepared this information
using the consolidated financial statements of Interim as of the dates indicated
and for each of the fiscal years in the five year period ended December 25, 1998
and as of and for the three month period ended March 26, 1999. We derived the
consolidated income statement and balance sheet data as of December 25, 1998 and
December 26, 1997 and for each of the years in the three year period ended
December 25, 1998 from financial statements audited by Deloitte & Touche LLP,
independent accountants for Interim. We derived the remaining data from the
unaudited consolidated financial statements and the SEC filings of Interim.
Please consider the following information when reading this financial
information:
o Revenues for Interim's former healthcare business, which was
sold effective September 26, 1997, are included through the
date of the disposition.
o The gain from the sale of the healthcare business is
presented before taxes. The taxes on this gain were
$5,272,000.
o On May 23, 1996, Interim completed a merger with Brandon
Systems, an information technology staffing company, which
was treated for accounting purposes as a
pooling-of-interests. Merger expense represents all fees and
expenses related to the merger consolidation and
restructuring of Interim and Brandon. Prior years have been
restated for this merger.
o Basic earnings per share, diluted earnings per share and
weighted average shares take into account Interim's
two-for-one-stock split in fiscal 1997. Prior years stock
data has been restated for this stock split.
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<PAGE> 18
<TABLE>
<CAPTION>
QUARTER FISCAL YEAR ENDED
ENDED ----------------------------------------------------------------------------------
MARCH 26, DECEMBER 25, DECEMBER 26, DECEMBER 27, DECEMBER 29, DECEMBER 30,
1999 1998 1997 1996 1995 1994
----------------- ----------------- ----------------- --------------- --------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND OPERATING INFORMATION)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Commercial division............ $ 566,031 $1,890,113 $1,418,667 $915,883 $657,005 $537,297
Healthcare..................... -- -- 189,589 231,268 207,242 167,399
--------------- --------------- --------------- -------------- -------------- --------------
Total revenues.............. 566,031 1,890,113 1,608,256 1,147,151 864,247 704,696
Expenses:
Cost of services............... 377,686 1,255,319 1,081,113 795,789 600,169 491,404
--------------- --------------- --------------- -------------- -------------- --------------
Gross profit................ 188,345 634,794 527,143 351,362 264,078 213,292
Selling, general and
Administrative............... 135,577 432,281 363,152 243,652 177,105 137,859
Licensee commissions........... 11,714 50,791 45,091 39,500 37,295 33,796
--------------- --------------- --------------- -------------- -------------- --------------
Results of operations....... 41,054 151,722 118,900 68,210 49,678 41,637
Amortization of intangibles.... 6,874 22,550 18,492 8,802 6,884 6,041
Interest expense............... 6,590 30,157 25,271 5,696 990 112
Interest income................ (774) (6,338) (1,002) -- -- --
Gain on sale of
Healthcare business......... -- -- (5,300) -- -- --
Merger expense................. -- -- -- 8,600 -- --
--------------- --------------- --------------- -------------- -------------- --------------
Earnings before income taxes &
extraordinary item.......... 28,364 105,353 81,439 45,112 41,804 35,484
Income taxes................... 12,480 46,776 38,928 22,097 18,071 16,028
--------------- --------------- --------------- -------------- -------------- --------------
Earnings before extraordinary
Item........................ 15,884 58,577 42,511 23,015 23,733 19,456
Extraordinary item-early
extinguishment of debt, net of
income taxes.................. -- 2,773 -- -- -- --
=============== =============== =============== ============== ============== ==============
Net earnings................... $15,884 $55,804 $42,511 $23,015 $23,733 $19,456
=============== =============== =============== ============== ============== ==============
Basic earnings per share:
Earnings before
extraordinary item........... $0.34 $1.32 $1.08 $0.71 $0.77 $0.64
Extraordinary item............. -- (0.06) -- -- -- --
--------------- --------------- --------------- -------------- -------------- --------------
Net earnings................... $0.34 $1.26 $1.08 $0.71 $0.77 $0.64
=============== =============== =============== ============== ============== ==============
Diluted earnings per share:
Earnings before
extraordinary item.......... $0.33 $1.29 $1.05 $0.69 $0.76 $0.63
Extraordinary item............. -- (0.06) -- -- -- --
--------------- --------------- --------------- -------------- -------------- --------------
Net earnings................... $0.33 $1.23 $1.05 $0.69 $0.76 $0.63
=============== =============== =============== ============== ============== ==============
Earnings per share (excluding
merger expenses):
Basic....................... -- -- -- $0.94 -- --
Diluted..................... -- -- -- $0.91 -- --
Weighted average shares:
Basic....................... 47,386 44,237 39,305 32,450 30,804 30,386
Diluted..................... 53,318 48,244 40,407 33,418 31,324 30,782
BALANCE SHEET DATA:
Total assets................... $1,537,452 $1,613,444 $1,091,734 $512,490 $424,489 $275,364
Long-term debt................. 441,455 426,856 379,197 -- 60,000 --
Working capital................ 133,574 126,285 73,210 169,283 67,526 81,997
OPERATING INFORMATION:
Commercial offices............. 878 877 706 593 537 424
Healthcare offices............. -- -- -- 405 403 372
=============== =============== =============== ============== ============== ==============
878 877 706 998 940 796
=============== =============== =============== ============== ============== ==============
</TABLE>
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<PAGE> 19
NORRELL SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
In the following table, we provide you with selected historical
consolidated financial information of Norrell. We prepared this information
using the consolidated financial statements of Norrell as of the dates
indicated and for each of the fiscal years in the five year period ended
November 1, 1998 and as of and for the three months ended January 31, 1999. We
derived the consolidated income statement and balance sheet data as of and for
each of the fiscal years in the five year period ended November 1, 1998 from
Norrell's financial statements audited by Arthur Andersen LLP, independent
public accountants for Norrell. We derived the income statement and balance
sheet data as of and for the three months ended January 31, 1999 from the
unaudited consolidated financial statements prepared by Norrell. We derived the
remaining data from the unaudited consolidated financial statements and the SEC
filings of Norrell.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED FISCAL YEAR ENDED
JANUARY 31, ---------------------------------------------------------------------------
1999 NOVEMBER 1, NOVEMBER 2, OCTOBER 27, OCTOBER 29, OCTOBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
------------- --------------- --------------- ------------- -------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND OPERATING INFORMATION)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Commercial division.......... $345,775 $1,373,998 $1,264,038 $977,806 $804,821 $667,780
Healthcare .................. 8,844 36,520 36,001 36,071 37,539 34,141
------------- -------------- --------------- ------------- -------------- --------------
Total revenues............ 354,619 1,410,518 1,300,039 1,013,877 842,360 701,921
Expenses:
Cost of services............. 274,481 1,091,985 1,014,048 795,013 656,517 543,330
------------- -------------- --------------- ------------- -------------- --------------
Gross profit.............. 80,138 318,533 285,991 218,864 185,843 158,591
Selling, general and
administrative............ 54,803 209,202 177,264 140,070 121,956 106,282
Licensee commissions 8,876 36,504 38,983 34,025 31,409 25,828
Year 2000 Remediation........ 3,149 3,876 -- -- -- --
Non-recurring charge......... -- -- 17,700 -- -- --
------------- -------------- --------------- ------------- -------------- --------------
Results of operations..... 13,310 68,951 52,044 44,769 32,478 26,481
Amortization of intangibles 1,382 4,640 3,617 1,015 641 1,486
Recovery of preferred
stock investment.......... -- -- -- -- -- (5,000)
Interest expense............. 1,867 5,102 6,989 1,200 365 1,956
Interest income.............. (136) (586) (346) (481) (428) (497)
Other (income) expense....... 56 918 2,332 1,966 2,056 905
------------- -------------- --------------- ------------- -------------- --------------
Earnings before income taxes 10,141 58,877 39,452 41,069 29,844 27,631
Income taxes................. 3,803 22,078 14,994 15,812 12,518 11,827
------------- -------------- --------------- ------------- -------------- --------------
Income from continuing
operations................ 6,338 36,799 24,458 25,257 17,326 15,804
Discontinued operations:
Loss on disposal, net..... -- -- -- -- (348) --
Cumulative effect of change
in accounting principle...... -- -- -- -- -- 3,414
============= =============== =============== ============= ============== ==============
Net Earnings................. $6,338 $36,799 $24,458 $25,257 $16,978 $19,218
============= =============== =============== ============= ============== ==============
Earnings from continuing
operations per share:
Basic..................... $0.24 $1.35 $0.99 $1.08 $0.75 $0.73
Diluted................... $0.23 $1.29 $0.91 $1.00 $0.71 $0.69
Weighted average shares:
Basic..................... 26,273 27,205 24,660 23,408 23,040 21,714
Diluted................... 27,156 28,440 26,747 25,344 24,357 22,782
BALANCE SHEET DATA:
Total assets.............. $496,687 $509,284 $438,844 $263,231 $182,024 $153,243
Long-term debt............ 91,817 92,510 60,129 23,316 2,057 386
Working capital........... 108,133 104,134 113,314 64,590 55,492 46,952
OPERATING INFORMATION:
Commercial offices........ 430 453 457 390 337 290
HealthCare offices........ 12 12 11 11 15 9
============= =============== =============== ============= ============== ==============
442 465 468 401 352 299
============= =============== =============== ============= ============== ==============
</TABLE>
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<PAGE> 20
COMPARATIVE PER SHARE DATA
Presented below is net income per common share and book value per
common share data for Interim and Norrell on an historical basis and on a pro
forma basis. We derived the Interim pro forma data by combining historical
consolidated financial information of Interim and pro forma Norrell financial
information using the purchase method of accounting for business combinations,
all on the basis described under "Unaudited Pro Forma Combined Financial Data"
on page 64. The pro forma per equivalent common share data represents the
equivalent of one Norrell common share to one Interim common share. We
calculated this data by multiplying the pro forma per common share data of
Interim by 0.9.
You should read the respective audited and unaudited consolidated
financial statements and related notes of both Interim and Norrell, which are
incorporated by reference into this joint proxy statement/prospectus. The
unaudited pro forma data set forth below may not necessarily reflect the
financial condition or results of operations of Interim that would have
actually resulted had the merger occurred as of the date and for the periods
indicated or reflect the future earnings of Interim.
Year Ended Three Months
December 25, Ended
INTERIM 1998 March 26, 1999
------- ------------ --------------
HISTORICAL PER COMMON SHARE:
Net income - Diluted..................... $ 1.29* $ 0.33
Book value............................... $15.59 $15.63
PRO FORMA PER COMMON SHARE:
Net income............................... $1.24* $ 0.28
Book value............................... -- $17.49
Three Months
Year Ended Ended
NORRELL November 1, 1998 January 31, 1999
------- ---------------- ----------------
HISTORICAL PER COMMON SHARE:
Net income - Diluted..................... $1.29 $ 0.23
Book value............................... $8.77 $ 8.84
PRO FORMA PER EQUIVALENT COMMON SHARE:
Net income............................... $1.12 $ 0.25
Book value............................... -- $15.74
*Before Extraordinary Item for 1998.
MARKET PRICES AND DIVIDENDS
The following table shows the range of the high and low closing prices
of Interim common shares and Norrell common shares, as reported by the New York
Stock Exchange for the periods presented. Interim has never paid any cash
dividends on its common shares. Norrell has paid a $0.04 dividend per share for
each of the periods shown. All information takes into account Interim's
two-for-one stock split for shareholders of record on August 18, 1997.
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<PAGE> 21
<TABLE>
<CAPTION>
Interim Common Shares Norrell Common Shares
--------------------------------- --------------------------------
High Low High Low
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Calendar Year 1997
- ---------------------------------
First Quarter............... $21.5625 $17.125 $29.875 $23.75
Second Quarter.............. $22.25 $17.5625 $35.125 $24.375
Third Quarter............... $28.125 $21.75 $34.375 $28.50
Fourth Quarter.............. $31.00 $23.625 $35.75 $16.5625
Calendar Year 1998
- ---------------------------------
First Quarter............... $33.75 $23.25 $24.0625 $18.125
Second Quarter.............. $34.1875 $27.00 $24.50 $18.8125
Third Quarter............... $30.75 $19.375 $21.25 $11.875
Fourth Quarter.............. $23.375 $13.75 $16.375 $12.50
Calendar Year 1999
- ---------------------------------
First Quarter............... $23.875 $14.25 $18.1875 $12.0625
</TABLE>
The following table sets forth:
1. the average closing price on the New York Stock Exchange of Interim
common shares and Norrell common shares for the five trading days before the
public announcement of the proposed merger;
2. the closing prices of Interim common shares and Norrell common
shares on the New York Stock Exchange on March 24, 1999, the last trading day
before the public announcement of the proposed merger, and on May 20, 1999; and
3. the pro forma price per share determined by multiplying the
applicable price of Interim common shares by the 0.9-to-one exchange ratio.
<TABLE>
<CAPTION>
Interim Norrell
Common Common Pro
Shares Shares Forma
--------------------- --------------------- ----------------------
<S> <C> <C> <C>
Average closing price for the
five trading days before the
announcement of the merger................$18.0875 $12.85 $16.27875
Closing price on March 24,
1999, the last trading day
before the announcement of
the merger................................$17.8125 $12.625 $16.03125
Closing price on May 20,
1999......................................$21.50 $18.00 $19.35
</TABLE>
Interim has never paid nor does it intend to pay cash dividends on any
of its common shares. Interim is also prohibited from paying cash dividends on
its common shares because of restrictions under Interim's existing credit
facilities. Norrell is prohibited by the merger agreement from declaring any
further cash dividends on any of its common shares.
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<PAGE> 22
RISK FACTORS
YOU SHOULD CONSIDER THE FOLLOWING MATTERS IN DECIDING WHETHER TO VOTE
IN FAVOR OF THE MERGER. YOU ALSO SHOULD CONSIDER THE OTHER INFORMATION INCLUDED
IN THIS DOCUMENT. THESE MATTERS HAVE BEEN GROUPED UNDER TWO SEPARATE HEADINGS:
"RISKS RELATING TO THE MERGER," WHICH DISCUSS THE RISKS OF COMBINING OUR
COMPANIES, RISKS UNDER THE MERGER AGREEMENT AND POTENTIAL CONFLICTS OF
INTEREST, AND "INDUSTRY AND BUSINESS RISKS," WHICH DISCUSS THE RISKS OF THE
STAFFING SERVICES INDUSTRY AND OUR BUSINESS. SEE "CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING INFORMATION" ON PAGE 18.
RISKS RELATING TO THE MERGER
WE CANNOT ASSURE YOU THAT INTERIM AND NORRELL WILL BE SUCCESSFULLY COMBINED.
If we cannot successfully combine our operations, we may experience a
material negative effect on our business, financial condition or results of
operations. The merger involves the combining of companies that have previously
operated separately and competed with each other. This involves a number of
risks, including:
o demands on management related to the significant increase in
size of Interim after the merger;
o the diversion of management's attention to the combining of
operations;
o difficulties in the combining of operations and systems,
including plans to update systems for "Year 2000" compliance;
o challenges in keeping customers and key employees; and
o potential adverse effects on operating results.
Also, an element of Interim's growth strategy has been the pursuit of
strategic acquisitions that either expand or complement its business. Future
acquisitions may further complicate the process of combining the operations of
Interim and Norrell.
WE MAY NOT ACHIEVE THE EXPECTED COST SAVINGS AND OTHER BENEFITS OF THE MERGER
AND WE WILL HAVE SIGNIFICANT MERGER RELATED COSTS THAT MAY HAVE A MATERIAL
NEGATIVE EFFECT ON OUR RESULTS OF OPERATIONS.
We may not be able to maintain the levels of operating efficiency that
we have achieved or may achieve separately. Because of difficulties in
combining operations, we may not be able to achieve the cost savings and other
size related benefits that we hope to achieve after the merger. We expect that
cost savings and other benefits from the merger will exceed those which we
could achieve separately. Our cost savings estimates are based on many
assumptions, including future revenue levels and other operating results, the
availability of funds for investment, the timing of events, as well as general
industry and business conditions and other matters. Many of these factors are
beyond our control. Our actual cost savings, if any, could differ from our
estimates and these differences could be material. There may be unforeseen
costs and expenses or other factors that will offset the estimated cost savings
or other components of our plan. They also may result in delays in the
realization of cost savings.
We will have substantial costs in connection with the merger. The
merger will result in transaction fees and direct costs of approximately $12
million that will be capitalized. The costs of combining our companies will also
result in one-time charges and future costs to the results of operations of the
combined company, such as personnel related costs, system integration costs and
other costs. The actual amount of these charges cannot be determined until the
plan for combining our companies is completed. These charges may have a material
negative effect on the combined company's results of operations. See "Unaudited
Pro Forma Combined Financial Data" beginning on page 64.
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<PAGE> 23
FLUCTUATIONS IN THE MARKET PRICE OF INTERIM COMMON SHARES MAY REDUCE THE
CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF NORRELL COMMON SHARES IN THE
MERGER.
The trading price of Interim common shares upon the completion of the
merger may vary significantly from the price on the date of the merger
agreement, the date of this joint proxy statement/prospectus or the date of the
Norrell special meeting. These variances may be due to changes in the business,
operations, results and prospects of Interim or Norrell, as well as general
market and economic conditions. Because the Norrell shareholders will receive
0.9 Interim common share for each Norrell common share they own in the merger,
any decrease in the market price of Interim common shares will reduce the value
of the consideration to be received by Norrell shareholders in the merger. Even
if the Norrell shareholders elect to receive cash instead of Interim common
shares in the merger, a decrease in the market price of Interim common shares
is likely to reduce the value to be received by Norrell shareholders in the
merger because (a) the cash payment is based upon the closing price of Interim
common shares during the 20 trading days ending two days before the merger; (b)
the limitations on the aggregate amount of cash that may be paid to Norrell
shareholders in the merger; and (c) the requirement that a substantial amount
of the total merger consideration consists of Interim common shares.
THE TERMINATION FEE MAY DISCOURAGE OTHER COMPANIES FROM TRYING TO COMBINE WITH
OR ACQUIRE NORRELL EVEN IF THESE BIDS OFFER HIGHER IMMEDIATE VALUE TO
SHAREHOLDERS.
Norrell has agreed to a termination fee that could discourage other
companies from trying to or proposing to combine with or acquire Norrell in an
alternative transaction. The alternative transaction may be superior for
Norrell's shareholders than the merger with Interim. If the merger is not
completed because of a possible superior alternative transaction involving
Norrell or because the Norrell Board of Directors withdraws or fails to
reaffirm its approval of the merger, Norrell will be required to pay a
substantial termination fee to Interim of $10 million plus up to $1 million of
the actual documented expenses incurred by Interim in connection with the
merger.
If this termination fee were to be paid, Norrell would experience a
material negative impact on its financial condition and results of operations.
This may discourage other companies from trying to or proposing to combine with
Norrell. See "The Merger Agreement -- Termination Fees" beginning on page 62.
OFFICERS AND DIRECTORS OF NORRELL HAVE AGREEMENTS AND OTHER ARRANGEMENTS THAT
MAY CREATE POTENTIAL CONFLICTS OF INTEREST WITH NORRELL SHAREHOLDERS REGARDING
THE MERGER.
When considering the recommendations of the Board of Directors of each
company, you should be aware that some executive officers of Norrell and some
members of the Norrell Board of Directors may have interests in the merger that
are different from yours. These interests include rights they have under
employment agreements, their stock options and the fact that one director of
Norrell will be appointed as an Interim director. These interests may create
potential conflicts. Our Boards of Directors were aware of these possible
conflicts of interest of Norrell's directors and officers when they approved
the merger. See "The Merger -- Interests of Members of Norrell's Board of
Directors and Management in the Merger" on page 47.
INDUSTRY AND BUSINESS RISKS
THE STAFFING SERVICES INDUSTRY IS COMPETITIVE.
The staffing services industry is competitive. We may encounter
increased competition in the future, which could significantly harm our results
of operations or financial condition. There are few barriers to entry by
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<PAGE> 24
potential competitors at the local level. We face significant competition in
the markets we serve and will continue to face significant competition in any
geographic markets or industry sectors that we may enter. In each market in
which we operate, we compete for both clients and qualified personnel with
other firms offering staffing services. The majority of our competitors are
significantly smaller than us. However, certain of our competitors have greater
marketing and financial resources than us. Many of our clients use more than
one staffing services company and it is common for a major client to use
several staffing services companies at the same time. In recent years, however,
there has been a significant increase in the number of large potential clients
consolidating their staffing services purchases with a single company or with a
small number of companies. The trend to consolidate staffing services purchases
has in some cases made it more difficult for us to obtain business from
potential clients who have already contracted to fill their staffing needs with
our competitors. In addition, consulting and accounting firms have begun to
offer services in certain of our markets. We also face the risk that certain of
our current and prospective clients may decide to provide similar services
internally or use independent contractors.
DOWNTURNS IN THE LOCAL ECONOMIES IN WHICH WE OPERATE MAY RESULT IN A REDUCTION
IN THE DEMAND FOR OUR SERVICES.
We conduct our business in many countries. An economic downturn in a
country or a region in which we operate may reduce the demand for our staffing
services in that country or region and could impair our results of operations
or financial condition. During economic downturns, the use of temporary and
contract employees usually is curtailed, the recruitment of permanent employees
is reduced and competitive pricing pressures usually are increased. As economic
activity increases, temporary and contract employees often are added to the
workforce before permanent employees are hired. During periods of increased
economic activity and generally higher levels of employment in a particular
country or region, the competition among staffing firms for qualified personnel
in that country or region becomes even greater. There can be no assurance that
during these periods we will be able to recruit the personnel necessary to fill
our clients' needs.
OUR OPERATIONS MAY SUFFER FROM COMPUTER PROBLEMS RELATING TO THE YEAR 2000.
Year 2000 issues exist when computers record dates using two digits
rather than four and then use the dates for arithmetic operations, comparisons
or sorting. A two-digit recording may recognize a date using "00" as 1900
rather than 2000, which could cause computer systems to perform inaccurate
comparisons or fail to operate. Norrell has budgeted $18 to $25 million to test
for and, if necessary, correct existing Year 2000 problems. Interim has
budgeted $750,000 to test for and, if necessary, correct existing Year 2000
problems. Although management believes that the existing Year 2000 problems
will be remediated, no assurance can be given that such remediation will take
place. Moreover, if the vendors or clients with which the combined company does
business do not take adequate preventative action, Year 2000 problems of these
vendors or clients could damage the combined company's business, financial
condition and results of operations.
WE DEPEND ON THE AVAILABILITY OF QUALIFIED PERSONNEL.
We depend upon our ability to attract qualified personnel who possess
the skills and experience necessary to meet the staffing requirements of our
clients. We must continually evaluate and upgrade our base of available
qualified personnel to keep pace with changing client needs and emerging
technologies. Competition for individuals with proven professional or technical
skills is intense, and demand for these individuals is expected to remain very
strong for the foreseeable future. In particular, our intellectual technology
operations depend on the recruitment of qualified personnel, many of whom are
from outside the United States. Government regulations currently impose a quota
on the number of foreign persons having this expertise who are permitted to
work in the United States.
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<PAGE> 25
DEPARTURE OF KEY PERSONNEL COULD HARM OUR BUSINESS.
We are highly dependent on our management. Our continued success will
depend in large part on the abilities and continued services of Raymond Marcy,
Interim's Chairman, President and Chief Executive Officer, and certain other
officers and key employees. The loss of Mr. Marcy or other officers and key
employees could harm our business.
WE ARE SUBJECT TO CLAIMS AND LIABILITY AS A SIGNIFICANT EMPLOYER.
Because we are one of the largest employers in the United States, we
incur risks specifically associated with being a significant employer that
could increase our cost of doing business. These risks include possible claims
of discrimination and harassment, employment of illegal aliens, errors and
omissions by our flexible staff, particularly for the acts of temporary
professionals, misuse or misappropriation of client funds or proprietary
information and other similar claims. While we maintain insurance coverage for
general liability, errors and omissions and employee theft, this insurance
coverage may not be adequate in scope or amount to cover our liability. The
failure of any of our personnel to observe our policies and guidelines intended
to reduce exposure to these risks, relevant client policies and guidelines, or
applicable, national, regional or local laws, rules or regulations, or other
circumstances that cannot be predicted, could result in negative publicity and
the payment by us of monetary damages or fines, or have other material adverse
effects upon our business. We are also exposed to potential claims associated
with the placement process. Because of legal constraints and considerations in
some jurisdictions, we have found it increasingly difficult to verify
candidates' backgrounds. Although we historically have not had any significant
problems arising from the matters discussed above, there can be no assurance
that we will not experience these problems in the future.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This document contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 about the merger and
about our financial condition, results of operations, plans, objectives, future
performance and business. This includes information relating to:
o cost savings, benefits, revenues and earnings estimated to
result from the merger; and
o estimated costs of combining our companies.
It also includes statements using words like "believes," "expects,"
"anticipates" or "estimates" or similar expressions.
These forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those predicted by the
forward-looking statements because of factors and possible events including the
following:
o variations in interest rates affecting our floating rate
debt;
o expected savings from the merger are not achieved or are
delayed or unexpected costs are incurred;
o revenues following the merger are lower than expected;
o competition increases in our industry or markets;
o costs or difficulties related to the combination of our
businesses or other acquired businesses are greater than
expected;
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<PAGE> 26
o changes in general economic conditions or in political or
competitive forces;
o technological changes, including "Year 2000" data systems
compliance issues for ourselves and for companies which we do
business with, are more difficult or expensive to implement
than anticipated;
o changes in the securities markets;
o difficulties in obtaining regulatory approvals; and
o potential loss of key personnel.
Because these forward-looking statements involve risks and
uncertainties, actual results may differ significantly from those predicted in
these forward-looking statements. You should not place a lot of weight on these
statements. These statements speak only as of the date of this document or, in
the case of any document incorporated by reference, the date of that document.
All subsequent written and oral forward-looking statements
attributable to Interim or Norrell or any person acting on our behalf are
qualified by the cautionary statements in this section. We have no obligation
to revise or update these forward-looking statements.
THE COMPANIES
THE FOLLOWING IS A BRIEF DESCRIPTION OF THE BUSINESS OF INTERIM AND
NORRELL. ADDITIONAL INFORMATION REGARDING INTERIM AND NORRELL IS CONTAINED IN
ITS FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE
SECURITIES EXCHANGE ACT OF 1934. SEE "WHERE YOU CAN FIND MORE INFORMATION" ON
PAGE 85.
INTERIM
Interim is a leader in identifying, assessing, deploying and measuring
talent for a wide variety of businesses. Interim is organized into three
operating segments which generally follow its management organization
structure: North America, Europe and Australia/Asia. In each of its operating
segments, Interim provides four services. Through these services -- consulting,
managed services, search/recruitment and flexible staffing -- Interim provides
solutions in the fields of information technology, finance, legal,
sales/marketing, technical and human resources, as well as clerical,
administrative and light industrial. Interim's former HealthCare division was
sold in September 1997.
Since its January 1994 initial public offering, excluding the former
HealthCare Division, Interim's network of offices has more than doubled from
373 in North America to 877 offices in 12 countries as of December 25, 1998.
Interim's revenues, excluding the former HealthCare Division, increased from
$537.3 million in fiscal 1994 to $1.9 billion in fiscal 1998. This growth has
been accomplished through strategic acquisitions, internal growth and by
capitalizing on cross-selling opportunities. During this period, Interim
acquired 26 businesses with 256 offices, representing over $750 million in
annualized revenues for the year ended prior to acquisition, including one
business acquired in 1994, five businesses acquired in 1995, three businesses
in 1996, four businesses in 1997 and thirteen businesses in 1998. The most
significant recent acquisitions were Computer Power Group Limited and Crone
Corkill Group PLC in 1998 and Michael Page Group PLC and Aim Executive
Holdings, Inc. in 1997. The Computer Power acquisition expanded Interim's
technology consulting and staffing into Australia and Southeast Asia. The Crone
Corkill acquisition expanded Interim's flexible staffing and search/recruitment
of high-end secretarial and administrative personnel in the United Kingdom.
Michael Page, a premier international recruiting and staffing company
specializing primarily in accounting, banking and finance, has 58 offices
located in the United Kingdom, Australia, France, Germany, Hong Kong, Italy,
New Zealand, Singapore, Spain, The Netherlands, and the United States. The Aim
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<PAGE> 27
Executive Holdings acquisition broadened Interim's service offerings to include
outplacement and other career consulting services. Additionally, several
smaller strategic acquisitions were made during 1998 to expand Aim Executive
Holdings' - now Interim Career Consulting - geographic markets and service
offerings.
NORRELL
Norrell is a strategic workforce management company and a leading
provider of staffing, outsourcing and professional services. Norrell is
organized into three business groups: Staffing Services, which provides
temporary administrative, teleservices and light industrial staffing;
Outsourcing Services, which provides administrative services, teleservices and
human resource services through outsourcing agreements that usually define the
scope of work and contain specific service productivity and quality
measurements; and Professional Services, which provides accounting staffing,
information technology staffing, project management services, systems
integration consulting services and executive placement. Norrell provides
services through a network of over 460 offices which are located primarily in
the United States.
Since its formation in 1965, Norrell has achieved significant growth
by focusing on the needs of its customers while providing quality service.
Norrell began operations as a provider of short-term replacement or fill-in
personnel, often referred to as traditional temporary services. Today, Norrell
offers long-term staffing, managed staffing, "Master Vendor Partnering,"
outsourcing and professional services in addition to traditional temporary
services. In recent years, Norrell has supplemented its internal growth with
acquisitions that have provided an international presence, revenues and
expertise in high-demand services such as information technology, financial
services, teleservices, and executive placements.
In fiscal 1998, Norrell supplied over 227,000 staffing, outsourcing
and professional personnel to approximately 18,000 clients, including
subsidiaries and affiliated companies of these clients. Its staffing,
outsourcing and professional services revenues for fiscal 1998 were more than
$1.4 billion as compared to approximately $1.2 billion in fiscal 1997. Norrell
provides its services through its network of company-owned, franchised,
outsourcing and professional services locations. As of the end of fiscal 1998,
Norrell had 145 company-owned staffing services, 138 franchised staffing
services locations, 137 outsourcing locations and 45 professional services
offices.
THE SPECIAL MEETINGS
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETINGS
INTERIM. At the Interim special meeting, Interim shareholders will be
asked to consider and separately vote upon proposals to:
o approve the merger;
o approve an amendment to Interim's Certificate of
Incorporation to increase the authorized common shares from
100,000,000 common shares to 200,000,000 common shares; and
o approve an amendment to Interim's Certificate of
Incorporation to correct an inconsistency in Interim's
Certificate of Incorporation by deleting the requirement of
the affirmative vote of the holders of at least two-thirds of
the outstanding Interim common shares to amend, modify, alter
or repeal any provision of Interim's By-laws.
THE INTERIM BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND
HAS DETERMINED THAT THE MERGER AND EACH OF THE OTHER PROPOSALS IS IN THE BEST
INTERESTS OF INTERIM AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT
INTERIM SHAREHOLDERS VOTE "FOR" APPROVAL OF EACH OF THE PROPOSALS.
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<PAGE> 28
NORRELL. At the Norrell special meeting, Norrell shareholders will be
asked to consider and vote upon on a proposal to approve the merger.
THE NORRELL BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND
UNANIMOUSLY RECOMMENDS THAT THE NORRELL SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
MERGER.
VOTES REQUIRED FOR APPROVAL
INTERIM. The affirmative vote of the holders of a majority of the
Interim common shares represented in person or by proxy at the Interim special
meeting, assuming a quorum is present and assuming the number of votes cast on
the merger proposal represents at least a majority of the outstanding Interim
common shares, is required to approve the merger. The affirmative vote of the
holders of a majority of the outstanding Interim common shares is required to
approve the proposal to increase the number of authorized Interim common
shares. The affirmative vote of the holders of at least two-thirds of the
outstanding Interim common shares is required to approve the proposal to delete
the requirement of the affirmative vote of the holders of at least two-thirds
of the outstanding Interim common shares to amend, modify, alter or repeal any
provision of Interim's By-laws. Each Interim common share is entitled to one
vote on each proposal.
Only holders of record of Interim common shares at the close of
business on May 26, 1999 are entitled to receive notice of and vote at the
Interim special meeting. As of May 18, 1999, there were 44,293,663 Interim
common shares outstanding and entitled to vote. Holders of a majority of the
outstanding Interim common shares on the record date, present in person or
represented by proxy, will constitute a quorum for the transaction of business
at the Interim special meeting.
On May 18, 1999, Interim directors and executive officers and their
affiliates beneficially owned 318,699 Interim common shares, excluding shares
which may be acquired upon exercise of options. This is approximately 0.7% of
the then outstanding Interim common shares. Each of the directors and executive
officers of Interim has indicated that he or she intends to vote these shares to
approve the merger.
A list of Interim shareholders entitled to vote at the Interim special
meeting will be available for examination at Interim's executive offices
located at 2050 Spectrum Boulevard, Ft. Lauderdale, Florida beginning on June
21, 1999 during normal business hours and at the Interim special meeting.
NORRELL. The affirmative vote of the holders of a majority of the
outstanding Norrell common shares is required to approve the merger. Each
Norrell common share is entitled to one vote.
Only holders of record of Norrell common shares at the close of
business on May 26, 1999 are entitled to receive notice of and vote at the
Norrell special meeting. As of May 18, 1999, there were 26,743,981 Norrell
common shares outstanding and entitled to vote. Holders of a majority of the
outstanding Norrell common shares on the record date, present in person or
represented by proxy, will constitute a quorum for the transaction of business
at the Norrell special meeting.
On May 18, 1999, Norrell directors and executive officers and their
affiliates beneficially owned 10,528,568 Norrell common shares, excluding shares
which may be acquired upon exercise of options. This is approximately 40% of the
then outstanding Norrell common shares and includes the shares owned by Mr.
Millner and his affiliates described below. Each of the directors and executive
officers of Norrell has indicated that he or she intends to vote these shares to
approve the merger. Additionally, Guy W. Millner, the principal shareholder and
a director of Norrell, and affiliates of Mr. Millner, entered into an
irrevocable proxy and have agreed to vote all of the Norrell common shares held
of record by them to approve the merger. These shares represent approximately
35% of the outstanding voting power on May 18, 1999 and the irrevocable proxy
makes it likely that the merger will receive the required approval by Norrell
shareholders. See "Irrevocable Proxy and Merger Consideration Election
Agreement" on page 63.
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<PAGE> 29
A list of Norrell shareholders entitled to vote at the Norrell special
meeting will be available for examination at Norrell's executive offices
beginning on June 21, 1999 during regular business hours and at the Norrell
special meeting.
HOW SHARES WILL BE VOTED AT THE SPECIAL MEETINGS
INTERIM. Shares represented by a proxy will be voted at the Interim
special meeting as specified in the proxy.
If Interim shareholders fail to return their proxy, their shares will
not be counted for the purpose of determining whether a quorum is present at
the Interim special meeting and will not be voted on the merger proposal. If
Interim shareholders return a properly executed proxy but fail to vote their
proxy, their shares will be counted for the purpose of determining whether a
quorum is present at the Interim special meeting and will have their shares
voted "FOR" approval of the merger and "FOR" approval of the other Interim
proposals.
Holders of a majority of the outstanding Interim common shares
entitled to vote, present or represented by proxy at the Interim special
meeting will constitute a quorum for the transaction of business at the Interim
special meeting.
Under New York Stock Exchange rules, your broker cannot vote your
Interim common shares on the merger proposal without specific instructions from
you. Unless you follow the directions your broker provides to you regarding how
to instruct your broker to vote your shares on the merger proposal, your shares
will not be voted. Broker non-votes will be counted for purposes of determining
whether a quorum exists.
NORRELL. Shares represented by proxy will be voted at the Norrell
special meeting as specified in the proxy.
If Norrell shareholders fail to return their proxy, their shares will
not be voted and will have the effect of a vote against the merger. If Norrell
shareholders return a properly executed proxy but fail to vote their proxy,
their shares will be counted for purposes of determining whether a quorum is
present at the Norrell special meeting and will be voted "FOR" approval of the
merger.
Holders of a majority of the outstanding Norrell common shares
entitled to vote, present or represented by proxy at the Norrell special
meeting will constitute a quorum for the transaction of business at the Norrell
special meeting.
Under New York Stock Exchange rules, your broker cannot vote your
Norrell common shares on the merger proposal without specific instructions from
you. Unless you follow the directions your broker provides to you regarding how
to instruct your broker to vote your shares on the merger proprosal, your
shares will not be voted.
HOW TO REVOKE A PROXY
Your grant of a proxy on the enclosed proxy card does not prevent you
from voting in person or otherwise revoking your proxy.
An Interim shareholder may revoke a proxy at any time before the
Interim special meeting by delivering a duly executed revocation or a proxy
bearing a later date to John B. Smith, Senior Vice President, Secretary and
Legal Counsel of Interim, at 2050 Spectrum Boulevard, Fort Lauderdale, Florida
33309. An Interim shareholder may also revoke a proxy by attending and voting
at the Interim special meeting.
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A Norrell shareholder may revoke a proxy at any time before the
Norrell special meeting by delivering a duly executed revocation or a proxy
bearing a later date to Mark H. Hain, Senior Vice President, Secretary and
General Counsel of Norrell, at 3535 Piedmont Road N.E., Atlanta, Georgia 30305.
A Norrell shareholder may also revoke a proxy by attending and voting at the
Norrell special meeting.
In addition, you may revoke your proxy by voting your shares in person
at your company's special meeting.
SOLICITATION OF PROXIES
Interim and Norrell will share equally the cost of printing and
mailing this document. Interim will bear the cost of soliciting your proxies.
Corporate Investor Communications, Inc. will assist in the solicitation of
proxies for a fee up to $6,500, plus reimbursement of reasonable out-of-pocket
expenses. Interim will indemnify the proxy solicitor against specific
liabilities and expenses, including liabilities and expenses under the federal
securities laws. In addition to solicitation by mail, our directors, officers
and employees may solicit proxies from holders of common shares by telephone,
in person or through other means. We will not compensate these people for this
solicitation, but we will reimburse them for reasonable out-of-pocket expenses
they have in connection with this solicitation. We will also arrange for
brokerage firms, fiduciaries and other custodians to send solicitation
materials to the beneficial owners of shares held of record by those persons.
We will reimburse these brokerage firms, fiduciaries and other custodians for
their reasonable out-of-pocket expenses.
THE MERGER
The merger agreement provides for a merger of Interim and Norrell. If
the merger had been completed on March 25, 1999, the day we publicly announced
the merger, each Norrell common share would have been converted into (a) 0.9
Interim common share with a value of $16.03125 (based on 0.9 times the closing
price of Interim common shares on March 24, 1999) or (b) a cash payment of
$16.742812 (based on 0.9 times the average closing price of Interim common
shares for the 20 trading days ending two days before March 25, 1999). The
conversion into Interim common shares would have represented a 26.98% premium
over the closing price of Norrell common shares on March 24, 1999. The
conversion into cash would have represented a 20.78% premium over the average
closing price of Norrell common shares for the 20 trading days ending two days
before March 25, 1999.
If the merger had been completed on May 20, 1999, each Norrell common
share would have been converted into (a) 0.9 Interim common share with a value
of $19.35 (based on 0.9 times the closing price of Interim common shares on May
20, 1999) or (b) a cash payment of $16.88 (based on 0.9 times the average
closing price of Interim common shares for the 20 trading days ending two days
before May 20, 1999). When we complete the merger, the Interim common shares may
have a market value that is more or less than these amounts depending on the
market price of Interim common shares at that time.
Immediately after the merger, current Norrell shareholders will own a
maximum of approximately 35.3% of the outstanding Interim common shares and
current Interim shareholders will own a minimum of approximately 64.7% of the
outstanding Interim common shares, assuming that cash elections are made with
respect to only 10% of the Norrell common shares, which is the minimum
percentage required under the merger agreement and the irrevocable proxy and
merger consideration election agreement. These percentages may fluctuate based
upon the actual number of Norrell common shares that elect to be exchanged for
cash in the merger. These percentages also are based on the number of shares of
each company outstanding on May 20, 1999.
The discussion in this document of the merger and the description of
the principal terms and conditions of the merger agreement and the merger is
only a summary. You should refer to the merger agreement for the details of the
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merger and the terms and conditions of the merger agreement. We have attached a
copy of the merger agreement to this document as Appendix A. See "The Merger
Agreement" beginning on page 53.
BACKGROUND OF THE MERGER
For several years in its annual planning session, the Norrell Board of
Directors had been examining the long term strategies of Norrell. In
particular, the Board of Directors had been reviewing Norrell's strategic
alternatives for expanding its presence into international markets and
achieving economies of scale through various means, including potential
acquisitions and mergers. The Board identified a merger with Interim as one
means of accomplishing the goals established by the long range planning
exercise. During the same period, Interim had significantly expanded its
operations, in large part through the acquisition of other leading companies in
the staffing services industry. One of the principal elements of Interim's
business strategy was to continue to expand through acquisitions.
Beginning in late December, 1997, Norrell and Interim engaged in
discussions regarding the possibility of a combination of the two companies.
Meetings between representatives of the two companies were held in Palm Beach,
Florida on January 21, 1998 and in Atlanta, Georgia on February 19, 1998 to
explore the conceptual framework for such a combination, and our companies
signed a confidentiality agreement on February 2, 1998. During this period,
NationsBanc Montgomery Securities LLC commenced a preliminary analysis on
behalf of Interim of a possible business combination with Norrell. On March 3,
1998, in its annual planning session, the Norrell Board of Directors considered
at length the advisability of pursuing a combination with Interim, and
authorized the Chairman and Chief Executive Officer of Norrell to continue
discussions with Interim looking towards such a combination. On March 5, 1998,
Interim formally engaged NationsBanc Montgomery to serve as Interim's
representative and financial advisor in connection with a possible business
combination involving Norrell.
Discussions between senior management of our companies continued to
occur on a periodic basis during the balance of March and the beginning of
April 1998. Because of different views as to certain elements of a proposed
transaction, Norrell and Interim agreed to terminate further discussions
concerning a possible business combination. Interim completed a public offering
of its common shares and convertible notes at the end of May, 1998. In July,
1998, meetings of the senior executive officers of Norrell and Interim were
resumed to further discuss a combination of our two companies. In these
meetings, however, it became apparent that Norrell and Interim had different
views as to certain elements of a proposed transaction, and these discussions
did not continue after July 25, 1998.
In November, 1998, Guy W. Millner, the principal shareholder and a
director of Norrell, consulted with CLB Advisors LLC, an Atlanta investment
banking firm, and retained CLB Advisors to make a private inquiry, solely on
behalf of Mr. Millner and not on behalf of Norrell, to determine the interest
of Interim in reopening the discussions that had terminated in July, 1998. In
addition, Mr. Millner asked CLB Advisors to make inquiries of three other
companies to determine if they had any interest in pursuing a business
combination with Norrell. Norrell has been advised that Mr. Millner was
motivated in this effort by the decline in Norrell's stock price and Mr.
Millner's belief that a business combination between Norrell and another
staffing company would be the best way to enhance shareholder value. As a
result of the inquiries by CLB Advisors, Mr. Millner concluded that Interim
would be interested in reopening the prior discussions with Norrell, and that
there might be other staffing companies - or companies with compatible
operations that sought to enter the staffing industry - that might also be
interested in initiating discussions with Norrell concerning a business
combination or acquisition.
Mr. Millner informed management of Norrell of his activities and
conclusions in late December, 1998. In response to that information, on
December 29, 1998 the Norrell Board of Directors appointed a Special Committee
comprised of Messrs. Donald A. McMahon, Parker H. Petit and Frank A. Metz, Jr.,
each of whom is a non-management director, to consider and make recommendations
to the Norrell Board of Directors with regard to the information presented by
Mr. Millner and the strategic alternatives that might be available to Norrell
to increase shareholder value. Mr. McMahon was named Chairman of this Norrell
Special Committee.
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The Norrell Special Committee first met on January 4, 1999, without
Mr. Petit who was unavailable at such time. At this meeting, the Special
Committee retained Alston & Bird LLP as its legal counsel, and received
presentations from Mr. Millner, Mr. Frederick Cooper of CLB Advisors and
management of Norrell with respect to reopening discussions with Interim and
initiating discussions with other companies identified by CLB Advisors as
potentially having an interest in a business combination with, or an
acquisition of, Norrell. CLB Advisors was retained as a consultant to Norrell.
On January 11, 1999, Norrell formally retained Goldman Sachs as its
financial advisor. Management of Norrell, together with Mr. Millner, Mr. Cooper
and lawyers from the firm of Alston & Bird LLP, met with Goldman Sachs on
January 11, 1999 to identify companies in the staffing services industry that
might be appropriate candidates for a business combination with, or acquisition
of, Norrell.
Goldman Sachs suggested that Norrell also seek to determine the level
of interest among financial buyers in a potential acquisition of Norrell.
Goldman Sachs was given permission by Norrell to develop a list of financial
buyers who might be interested in a potential business combination with
Norrell. Based on information provided by Norrell's management and by Goldman
Sachs, the Norrell Special Committee developed a list of five staffing industry
companies and nine financial buyers to be contacted to determine if an interest
in Norrell existed. Goldman Sachs and the management of Norrell also discussed
the timing and process of contacting potential buyers and soliciting their
interest, and began the process of accumulating information about the financial
performance and results of operations of Norrell that would be disclosed,
subject to appropriate confidentiality arrangements, to parties that expressed
an interest in Norrell.
In considering companies and firms to be contacted, Norrell's Special
Committee considered a number of factors, including among other things:
o past expressions of interest in Norrell;
o the acquisition record of such companies and firms;
o the complementary nature of the business of such companies
with the business of Norrell, the expected benefits and cost
savings that would result from a business combination;
o the perceived capacity of the company or firm to offer
consideration representing an appropriate value for Norrell's
outstanding shares;
o the financial resources of the companies and entities; and
o the perceived ability of the companies and entities to
consummate a transaction on an accelerated basis.
From the outset, the Norrell Special Committee believed that the
process of eliciting indications of interest in Norrell should be accomplished
as quickly as possible. As a result of Norrell's financial performance during
the later part of 1997 and 1998, there were a number of rumors concerning
Norrell circulating both within and outside Norrell. The Norrell Special
Committee was advised by management that a protracted process of considering
strategic alternatives for Norrell would be likely to fuel such rumors, disrupt
Norrell's operations and subject Norrell to the loss of key personnel and
customers. The Norrell Special Committee believed that it was in the best
interests of Norrell to establish a reasonable but limited period for the
parties to be contacted by Goldman Sachs, to complete their due diligence
inquiries into the business and affairs of Norrell, and to indicate their
interest, or lack thereof, in pursuing further discussions.
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<PAGE> 33
During late January and early February, 1999, Goldman Sachs contacted
all of the entities selected by the Norrell Special Committee. Thirteen of the
fourteen entities expressed interest in investigating the opportunity further
and were supplied with confidentiality agreements. Twelve entities returned
signed confidentiality agreements and financial and operating information was
furnished to them. Each recipient of this information was asked to indicate by
February 11, 1999, on a preliminary basis and based only on the information
provided, whether they were interested in pursuing discussions with Norrell.
Four entities, including Interim, responded in writing with non-binding
preliminary indications of interest in Norrell at a range of values from $19.50
to $26.00 per share. Three of the respondents were financial buyers, and each
of them proposed an all cash transaction; Interim proposed a transaction
involving an unspecified combination of cash and Interim shares. Interim's
proposal was at a value range of $19.50 to $21.50 per share.
On February 16, the Norrell Board of Directors met to evaluate the
proposals and decided to afford each interested party an opportunity to meet
for one full day with Norrell's management and to conduct legal and operational
due diligence of Norrell. Goldman Sachs was instructed to contact all four
entities and offer them access to Norrell starting February 22. The contacts
were made on February 16 and 17, 1999 and the meetings and due diligence
investigations occurred between February 26 and March 3, 1999.
During the meetings with Norrell's management, each interested party
was advised that Norrell's management had revised its previously distributed
financial forecast. Estimates of earnings for Norrell`s second fiscal quarter
were reduced by $0.09 per share (or 24%) and estimates of earnings for
Norrell's fiscal year 1999 were reduced by $0.12 per share (or 8%). Information
concerning the decline in performance of certain segments of Norrell's business
was also disclosed in such meetings.
Following these meetings, each interested party was asked to advise
Goldman Sachs whether it would be able to confirm its interest with a firm
proposal, including a proposed merger agreement, by the close of business on
March 15, 1999. Interim indicated that it would work toward providing such a
proposal by that date, but advised Goldman Sachs that it was concerned with the
revised financial information. Two of the financial buyers indicated that they
remained interested in continuing to pursue a transaction, but also cautioned
that the change in financial information would likely impact their view of
valuation. The third financial buyer, who was at the high-end of the previously
indicated value range, indicated that it remained interested in continuing to
pursue a transaction at the range of values previously specified, although it
advised Goldman Sachs that the changed financial performance of Norrell
increased the probability that it would not ultimately be interested in a
transaction with Norrell. All three financial buyers indicated that they would
require four to six weeks to complete their due diligence, determine the
availability of financing, and provide a firm proposal, if any.
On March 4, 1999, concerned with the decline in Norrell's financial
performance, Interim decided not to proceed with the transaction and withdrew.
At a meeting on March 8, 1998, the Norrell Special Committee
determined, in its business judgment after consultation with management, that
it was not in the best interests of Norrell to continue the process for four to
six weeks or to pursue further the indications of interest from the financial
buyers. In making that determination, the Norrell Special Committee considered
the contingent nature of the indication of interest by the financial buyers,
and the detrimental effect on Norrell of the potentially protracted process
required for such buyers and their financing sources to complete due diligence
inquiries, confirm the availability of required financing and resolve other
expressed contingencies.
At a meeting of the Norrell Special Committee on March 10, 1999, the
Norrell Special Committee then asked Mr. Millner, accompanied by Mr. Larry
Bryan, Executive Vice President of Norrell, and Mr. Cooper, to meet with senior
executives of Interim to determine if Interim would be interested in pursuing
discussions looking towards a stock-for-stock business combination with
Norrell. Such request was based on the belief of the Norrell Special Committee
that greater shareholder value would result from a stock-for-stock merger with
a strategic partner, such as Interim, in a transaction in which the benefits to
be realized from such a merger would enhance the value of the stock that
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Norrell's shareholders would receive in such a transaction. The meeting was
held in Florida on March 11, 1999. At that meeting, Interim indicated a renewed
interest in a merger between Interim and Norrell, but again expressed concern
over Norrell's revised financial information.
On March 15, after discussion with Messrs. Cooper and Bryan, Interim
indicated that it would be prepared to move forward with a transaction, but at
a value less than its original indication. Interim also indicated that it would
be prepared to effect a transaction through an exchange of stock and a cash
payment. Following extensive telephonic discussions, the senior management of
Norrell and Interim agreed to move forward with discussions about a possible
business combination.
On March 16, 1999, the Norrell Special Committee met telephonically to
discuss the proposed terms from Interim. At the meeting, members of Norrell
management made a presentation as to the financial condition of Norrell and the
anticipated synergies of combining with Interim. In addition, Mr. Cooper of CLB
Advisors made a presentation outlining the anticipated effects of the deal in
the market. After a lengthy discussion, the Norrell Special Committee decided
to recommend to the full Norrell Board of Directors that it move forward to
consummate a transaction.
On March 17, 1999, Interim executives flew to Atlanta to discuss
specific terms of the proposed transaction. Although no formal agreement was
reached, both Interim and Norrell shared the terms under which each would
proceed with a transaction, and agreed to continue negotiations.
At a scheduled meeting of the Norrell Board of Directors on March 18,
1999, the Norrell Special Committee reported its decision not to extend the
process of considering strategic alternatives and to pursue instead a merger
with Interim. A presentation was made by Norrell's management regarding the
expected benefits from a business combination between Norrell and Interim. Ray
Marcy, the Chairman, President and Chief Executive Officer of Interim
participated telephonically in the presentation. The Norrell Board ratified the
decisions made by the Norrell Special Committee and authorized management of
Norrell to continue negotiations with Interim on an exclusive basis regarding a
business combination between the companies.
On March 19, 1999 legal counsel and executives of Interim met with
legal counsel to Norrell in Atlanta, Georgia to negotiate the terms of a merger
agreement. Contemporaneously with these meetings, representatives of Interim
conducted confirmatory due diligence on the business, affairs and financial
condition of Norrell, and senior executives of Interim met with senior
management personnel of Norrell.
A special telephonic meeting of the Interim Board of Directors was
held on March 21, 1999, at which time Interim's management presented the terms
of a merger, upon which Norrell common shares would be exchanged for a
combination of Interim common shares and cash, to the Interim Board of
Directors, and NationsBanc Montgomery presented its oral opinion as to the
fairness of the transaction, from a financial point of view, to Interim as of
that date. The Interim Board of Directors approved that merger in that meeting
and recommended its approval by the Interim shareholders.
Subsequent to the March 21, 1999 Interim Board Meeting, additional
negotiations took place, which extended through March 24, 1999. During these
additional negotiations the structure of the merger transaction was changed to
provide that, instead of each Norrell common share being exchanged for a
combination of cash and Interim common shares, each Norrell common share would
be exchanged for 0.9 Interim common share, with the Norrell shareholders
desiring to receive cash for all or part of their Norrell common shares having
the right, subject to certain limitations, to receive not less than $16.00 in
cash for each Norrell common share. The effect of this change was to assure
that all Norrell shareholders would receive Interim common shares for their
Norrell common shares unless they elected to receive cash. In order to assure
Interim that persons holding at least ten percent of the Norrell common shares
would elect to receive cash in the merger, Mr. Millner and affiliates of Mr.
Millner agreed with Interim that, if holders of fewer than ten percent of the
Norrell common shares elected to receive cash in the merger, they would elect
to receive cash with respect to that number of Norrell common shares owned or
controlled by them necessary to bring total cash elections to ten percent of
the Norrell common shares.
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A special telephonic meeting of the Interim Board of Directors was
held on Tuesday, March 23, 1999 at which time the new terms of the merger were
presented to the Interim Board of Directors by management and NationsBanc
Montgomery. The Interim Board of Directors approved the merger agreement, upon
the terms described in this document, and recommended its approval by the
Interim shareholders.
A special telephonic meeting of the Norrell Board of Directors was
held on the evening of Wednesday, March 24, 1999, at which time the Norrell
Special Committee recommended to the Norrell Board of Directors that the merger
be approved. Goldman Sachs, as financial advisor to the Special Committee,
expressed its oral opinion as to the fairness, from a financial point of view,
of the exchange ratio set forth in the merger agreement. The Norrell Board of
Directors approved the merger agreement and recommended its approval by the
Norrell shareholders. The Norrell Special Committee and the Board of Directors
of Norrell determined, in the exercise of their business judgment, that the
merger is in the best interests of Norrell and the holders of Norrell common
shares after taking into account, among other factors, the risks and
uncertainties relating to the timing and likelihood of entering into a
definitive agreement with any of the other parties which had expressed interest
in Norrell at a mutually acceptable price and the views of the Norrell Special
Committee and the Board of Directors concerning the complementary nature of the
business of Norrell and Interim, the compatibility of cultures, the anticipated
cost savings and other benefits expected to result from the merger, the
attainment of long term strategies for Norrell, including expansion into
international markets and the expansion of specialized staffing product
offerings, and the potential combination of sales and management personnel at
critically needed levels.
The merger agreement was executed by the parties on Wednesday evening,
March 24, 1999, following its approval by the Boards of Directors of Norrell
and Interim.
The recommendation by the Norrell Special Committee that the Norrell
Board of Directors approve the merger, and the approval of the merger by the
Boards of Directors of Norrell and Interim, was based upon the factors
described immediately below in the section entitled "Reasons for the Merger;
Recommendations of the Boards of Directors."
REASONS FOR THE MERGER; RECOMMENDATIONS OF THE BOARDS OF DIRECTORS
INTERIM. Interim's Board of Directors has unanimously approved the
merger and recommends approval of the merger by the Interim shareholders. In
reaching its determination, the Interim Board of Directors consulted with
Interim's management, as well as NationsBanc Montgomery and Baker & McKenzie,
its outside legal counsel, and considered the following important factors that
supported the Board's recommendation:
o the long-term interests of Interim and its shareholders, as
well as the interests of Interim employees, customers,
creditors, suppliers and the communities in which Interim
operates;
o the merger will create one of the world's largest workforce
management companies, with approximately $4 billion in annual
revenues;
o information concerning business, earnings, operations,
financial condition and prospects of Interim and Norrell,
both individually and on a combined basis, including
information about past earnings performance of each of
Interim and Norrell;
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o the presentation of NationsBanc Montgomery at the March 21,
1999 meeting of the Interim Board of Directors, and the
opinion of NationsBanc Montgomery, that based upon the terms
described in the merger agreement and further described to
NationsBanc Montgomery by the management of Interim, the
consideration to be paid by Interim upon the closing of the
merger is fair from a financial point of view to Interim as
of March 24, 1999. This opinion was considered together with
the valuation and other analyses presented to the Interim
Board of Directors by NationsBanc Montgomery. The opinion is
attached as Appendix C to this document. The opinion and
analyses are described below under "- Opinions of Financial
Advisors -- Interim;"
o the merger provides Interim the opportunity to create one of
the world's largest, most diverse workforce management
companies, allowing the combined company to operate more than
1,320 locations in the United States and 11 foreign
countries;
o the merger combines companies with strong positions in
attractive markets, providing for a strategic match;
o the opportunity to benefit from cost savings and other
benefits of size and operating efficiencies;
o the merger should allow the combined company to benefit, over
the long term, from increased financial strength, generation
of revenues over a broader geographic base, and more
alternatives in the financial markets as compared to either
company on a stand-alone basis;
o the terms of the merger agreement including:
o the representations, warranties and covenants;
o the conditions to each party's obligation to complete
the merger; and
o the termination provisions;
o the irrevocable proxy granted by Guy W. Millner and the
proposed termination fee to be payable by Norrell under
limited circumstances, including the potential effect that
the termination fee may have on competing offers to Norrell;
o the merger enables Interim, through the merger with Norrell,
to gain expertise in outsourcing and call center services;
o the recent and past trading prices of Norrell common shares
and Interim common shares relative to those of other industry
participants, and the potential for appreciation in the value
of Interim common shares following the merger resulting from
opportunities for enhanced revenue growth and accelerated
earnings growth of the combined company; and
o the ability to complete the merger, including, in particular,
the likelihood of obtaining regulatory approvals and the
terms of the merger agreement regarding the obligations of
both companies to pursue these regulatory approvals.
The Interim Board of Directors also considered a variety of risks and
other potentially negative factors in deliberations concerning the merger. In
particular, the Interim Board of Directors considered:
o the risks associated with a fixed exchange ratio, including
the possibility that the value of the Interim common shares
or the cash that the Norrell shareholders receive in the
merger could vary depending on changes in the market price of
the Interim common shares;
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o the risks associated with a minimum cash price of $16.00 to
be paid for each Norrell common share;
o the potential for reduced flexibility due to increased
borrowing costs because of the assumption of Norrell's
existing indebtedness and additional borrowings to finance
the cash to be paid in the merger, which would result in
greater indebtedness for the combined company;
o the risks associated with combining the operations of Norrell
with Interim's existing operations, including the loss of key
personnel of Norrell, difficulty in combining corporate,
accounting, financial reporting and management information
systems and strain on existing levels of personnel to operate
Norrell's business;
o the conflicts of interest of some of Norrell directors and
officers; and
o the risks associated with Norrell's Year 2000 problems.
The foregoing discussion describes the material factors considered by
Interim's Board of Directors in its consideration of the merger. After
considering these factors, and taking into account the recommendation of
management, the Interim Board of Directors concluded that the positive factors
described above outweighed the negative factors described above. Because of the
variety of factors considered, the Interim Board of Directors did not find it
practicable to, and did not make specific assessments of, quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determination. The determination was made after consideration of all of the
factors together. In addition, individual members of the Interim Board of
Directors may have given different weights to different factors.
THE INTERIM BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT INTERIM
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE MERGER.
NORRELL. At a meeting on March 24, 1999, the Norrell Board of
Directors unanimously approved the merger and recommends approval of the merger
by the Norrell shareholders at the Norrell special meeting. In reaching its
determination, the Norrell Board of Directors consulted with Norrell's
management as well as its financial and legal advisors, and considered the
following important factors that supported the Board's recommendation:
o the merger will provide Norrell shareholders a premium for
their Norrell common shares based on the generally prevailing
market prices at the time the Board of Directors approved the
merger. The exchange ratio represented:
o a 24.93% premium, based on the closing prices of
Norrell common shares and Interim common shares on
March 23, 1999;
o a 26.47% premium, based on the average closing
prices of Norrell common shares and Interim common
shares for the three trading days before March 24,
1999;
o a 20.78% premium, based on the average closing
prices of Norrell common shares and Interim common
shares for the twenty trading days before March 24,
1999;
o a 17.14% premium, based on the average closing
prices of Norrell common shares and Interim common
shares for the thirty trading days before March 24,
1999; and
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o a premium implied by the average ratio of the value
of 0.9 Interim common share to the value of a
Norrell common share for the one-year period
(24.80%), the ninety-day period (20.06%), and the
thirty-day period (18.47%), ended March 24, 1999;
o the opinion of its financial advisor, Goldman, Sachs & Co.,
that the exchange ratio is fair to the Norrell shareholders
from a financial point of view. The opinion is attached as
Appendix D to this document. The opinion was considered
together with the financial analyses presented to the Board
of Directors by Goldman, Sachs & Co. A description of the
opinion and analyses is included below under "-- Opinions of
Financial Advisors --Norrell;"
o the current and past trading prices of Norrell common shares
and Interim common shares compared to each other and to other
competitors in the industry;
o the past financial and operational performance of Norrell and
Interim;
o the potential that the value of Interim common shares would
increase after the merger and that if the merger occurred
Norrell shareholders who receive Interim common shares in the
merger would share in any increase because of their ownership
of a maximum of approximately 35.3% of the outstanding Interim
common shares, depending on the amount of Norrell common
shares exchanged for cash in the merger. In arriving at this
belief, the Norrell Board of Directors considered:
o the expected combined earnings of Norrell and
Interim, including the expected increase in earnings
per share, excluding costs related to the merger;
o the cost savings that could result from combining
Norrell and Interim; and
o Interim's expected financial position after the
merger, and Interim's ability to finance future
growth opportunities;
o various alternatives to the merger, including the risks of
remaining independent, and the risks and uncertainties
relating to the timing and likelihood of entering into a
definitive agreement with any other interested party at a
mutually acceptable price;
o the geographic fit of the companies. The Board of Directors
noted that Interim is a leading workforce management company
in a number of areas in which Norrell does not have
locations, including markets in Europe, Asia and Australia;
o after the merger, Interim will have more than 1,320
locations, in the United States and 11 foreign countries
making it approximately the third largest workforce
management company in the United States in terms of revenues
and larger than either Interim or Norrell alone.
o The Norrell Board of Directors also considered the recent
mergers in the workforce management industry generally, and
the opinion of Norrell management that efficiencies that
larger companies can achieve likely will be beneficial for
future success in the workforce management industry;
o the complementary nature of the business of Norrell and
Interim and the compatibility of their cultures;
o the attainment of long term strategies for Norrell, including
expansion into international markets and the expansion of
specialized staffing product offerings;
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<PAGE> 39
o the past performance and reputation of the Interim management
team, and the belief of Norrell management that Interim and
Norrell have similar approaches to business;
o the measures taken by Norrell and Interim to provide
reasonable assurance to each other that the merger will
occur. These include the provisions of the merger agreement
that require Norrell to compensate Interim in some
circumstances if the merger does not occur, and the
provisions of the merger agreement that restrict Norrell from
having discussions with third parties about alternative
transactions, except under certain circumstances where the
fiduciary duties of the Norrell Board of Directors would
require investigation of a proposed offer;
o the terms of the merger agreement including:
o the representations, warranties and covenants;
o the conditions to each party's obligation to
consummate the merger; and
o the termination provisions.
o the ability of Norrell and Interim to complete the merger,
including their ability to obtain necessary regulatory
approvals and the obligations to try to obtain those
approvals.
The Norrell Board of Directors also considered a variety of risks and
other potentially negative factors concerning the merger. These included the
following:
o the merger agreement does not provide for any adjustment to
the exchange ratio based on changes in market prices and as a
result the value of the Interim common shares that Norrell
shareholders receive in the merger will vary depending on
changes in the market price of the Interim common shares. It
should be noted that the merger agreement does provide that
the Norrell shareholders may elect, subject to limitations,
to receive cash at the same exchange ratio, but in no event
less than $16.00 for each Norrell common share. See "The
Merger Agreement - The Merger" on page 53;
o after the merger, Interim would have more debt than it had at
the time the Norrell Board of Directors considered the
merger, which could reduce Interim's flexibility in
responding to changing business conditions and increase the
interest rate and fees Interim would have to pay to borrow
money;
o the difficulties in combining independent companies and the
risk that expected cost savings will not be achieved;
o the potential conflicts of interest of some Norrell officers
and directors; and
o the risk that termination fees granted to Interim by Norrell
may prevent others from proposing an alternative transaction
that may be more advantageous to Norrell shareholders.
The foregoing discussion describes the material factors considered by
Norrell's Board of Directors in its consideration of the merger. After
considering these factors, and taking into account the recommendation of
management and Norrell's advisors, the Norrell Board of Directors concluded
that the positive factors described above outweighed the negative factors
described above. Because of the variety of factors considered, the Norrell
Board of Directors did not find it practicable to, and did not make specific
assessments of, quantify or otherwise assign relative weights to the specific
factors considered in reaching its determination. The determination was made
after consideration of all of the factors together. In addition, individual
members of the Norrell Board of Directors may have given different weights to
different factors.
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<PAGE> 40
THE NORRELL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT NORRELL
SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE MERGER.
OPINIONS OF FINANCIAL ADVISORS
INTERIM
OPINION OF NATIONSBANC MONTGOMERY SECURITIES LLC
On March 5, 1998, the Interim Board of Directors retained NationsBanc
Montgomery to act as its exclusive financial advisor in connection with a
possible business combination with Norrell. NationsBanc Montgomery is a
nationally recognized investment banking firm. NationsBanc Montgomery is
regularly engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. Interim selected NationsBanc
Montgomery to act as its financial advisor and to render a fairness opinion
because of NationsBanc Montgomery's experience in transactions similar to the
merger and its historical investment banking relationship with Interim.
On March 24, 1999, NationsBanc Montgomery delivered an oral opinion to
Interim's Board of Directors that the consideration to be paid by Interim was
fair toInterim from a financial point of view as of that date. NationsBanc
Montgomery confirmed that opinion in writing as of the same date. The amount of
the consideration was determined through negotiations between Interim and
Norrell and not as a result of recommendations from NationsBanc Montgomery. The
Interim Board of Directors did not limit the investigations made or procedures
followed by NationsBanc Montgomery in rendering its opinion. Further, Interim
did not request NationsBanc Montgomery's advice with respect to alternatives to
the merger with Norrell or Interim's underlying decision to proceed with or
complete the merger, and NationsBanc Montgomery did not give any advice on this
matter.
WE HAVE ATTACHED THE FULL TEXT OF NATIONSBANC MONTGOMERY'S WRITTEN
OPINION TO THE INTERIM BOARD OF DIRECTORS AS APPENDIX C. YOU SHOULD READ THIS
OPINION CAREFULLY AND IN ITS ENTIRETY. HOWEVER, WE HAVE ALSO INCLUDED THE
FOLLOWING SUMMARY OF NATIONSBANC MONTGOMERY'S OPINION.
NationsBanc Montgomery's opinion is directed to the Interim Board of
Directors. It does not constitute a recommendation to you on how to vote on the
merger. The opinion addresses only the financial fairness to Interim of the
consideration to be paid by Interim in the merger. The opinion does not address
the relative merits of the merger or any alternatives to the merger, the
underlying decision of the Interim Board of Directors to proceed with or
complete the merger or any other aspect of the merger. In furnishing its
opinion, NationsBanc Montgomery did not admit that it is an expert within the
meaning of the term "expert" as used in the Securities Act, nor did it admit
that its opinion constitutes a report or valuation within the meaning of the
Securities Act. Statements to that effect are included in the NationsBanc
Montgomery opinion.
In rendering its opinion, NationsBanc Montgomery, among other things:
o reviewed publicly available financial and other data with
respect to Interim and Norrell, including the consolidated
financial statements for recent years and interim periods to
December 25, 1998 in the case of Interim and January 31, 1999
in the case of Norrell, and certain financial and operating
data relating to Interim and Norrell made available to
NationsBanc Montgomery from published sources and from the
internal records of Interim and Norrell;
o reviewed the financial terms and conditions of the draft
merger agreement;
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<PAGE> 41
o reviewed certain publicly available information concerning
the trading of, and the trading market for, Interim common
shares and the Norrell common shares;
o compared Interim and Norrell from a financial point of view
with other companies in the staffing services industry which
NationsBanc Montgomery deemed to be relevant;
o considered the financial terms, to the extent publicly
available, of selected recent business combinations of
companies in the staffing services industry which NationsBanc
Montgomery deemed to be comparable, in whole or in part, to
the merger;
o reviewed and discussed with representatives of the respective
managements of Interim and Norrell certain business and
financial information regarding Interim and Norrell furnished
to NationsBanc Montgomery by them, including financial
forecasts and related assumptions of Interim and Norrell, and
other specific information obtained by NationsBanc Montgomery
from third party research reports;
o made inquiries regarding and discussed the acquisition and
the merger agreement and other related matters with Interim's
counsel; and
o performed various other analyses and examinations as
NationsBanc Montgomery deemed appropriate.
In preparing its opinion, NationsBanc Montgomery did not assume any
responsibility to independently verify the information referred to above.
Instead, with the consent of Interim's Board of Directors, NationsBanc
Montgomery relied on the information as being accurate and complete in all
material respects. NationsBanc Montgomery also made the following assumptions,
in each case with the consent of Interim's Board of Directors:
o with respect to the financial forecasts for Norrell and
Interim provided to NationsBanc Montgomery by the managements
of each company, upon the advice of Interim's management,
that (a) the forecasts, including the assumptions regarding
the possible cost savings and other benefits of the merger,
were reasonably prepared on bases reflecting the best
available estimates and judgments of the managements of
Interim and Norrell at the time of preparation as to the
future financial performance of both companies and (b) the
forecasts provided a reasonable basis upon which NationsBanc
Montgomery could form its opinion;
o with respect to the financial forecasts and other information
obtained by NationsBanc Montgomery from third party research
reports, that these forecasts and information provided a
reasonable basis on which NationsBanc Montgomery could form
its opinion;
o that there were no material changes in Norrell's or Interim's
assets, financial condition, results of operations, business
or prospects since the respective dates of their last
financial statements made available to NationsBanc
Montgomery;
o that the merger would be completed in a manner that complies
in all respects with the applicable provisions of the
Securities Act, the Securities Exchange Act, and all other
applicable federal and state statutes, rules and regulations;
and
o that the merger would be completed in accordance with the
terms described in the merger agreement, without any further
amendments to the merger agreement, and without waiver by
Interim of any of the conditions to its obligations that are
contained in the merger agreement.
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<PAGE> 42
In addition, for purposes of their opinion:
o NationsBanc Montgomery relied on advice of counsel and
independent accountants to Interim as to all legal and
financial reporting matters with respect to Interim, the
merger and the merger agreement.
o NationsBanc Montgomery did not assume any responsibility for
making an independent evaluation, appraisal or physical
inspection of any of the assets or liabilities, contingent or
otherwise, of Norrell or Interim. Further, NationsBanc
Montgomery did not receive any appraisals.
o Interim's Board of Directors informed NationsBanc Montgomery,
and NationsBanc Montgomery assumed, that the merger would be
recorded as a purchase under generally accepted accounting
principles.
o The opinion was based on economic, monetary and market and
other conditions as in effect on, and the information made
available to NationsBanc Montgomery as of, the date of the
opinion.
The following represents a brief summary of the material financial
analyses performed by NationsBanc Montgomery in connection with providing its
opinion to Interim's Board of Directors. Some of the summaries of financial
analyses performed by NationsBanc Montgomery include information presented in
tabular format. To fully understand the financial analyses performed by
NationsBanc Montgomery, you should read the tables together with the text of
each summary. The tables alone do not constitute a complete description of the
financial analyses. Considering the data set forth in the tables without
considering the full narrative description of the financial analyses, including
the methodologies and assumptions underlying the analyses, could create a
misleading or incomplete view of the financial analyses performed by
NationsBanc Montgomery.
EXCHANGE RATIO ANALYSIS. NationsBanc Montgomery analyzed the
historical ratio of the closing price per share of Interim common shares to
that of Norrell common shares over various time periods from March 19, 1997 to
March 18, 1999. During this period, the volume weighted average historical
exchange ratio calculated on a daily basis has ranged from a low of 0.58 on
September 3, 1998 to a high of 1.74 on May 22, 1997, with a median of 0.78.
Historical ratios for various time periods during the last year are set forth
in the following table:
<TABLE>
<CAPTION>
Time Period Simple Average Volume Weighted Average
----------- -------------- -----------------------
<S> <C> <C>
10 days 0.71x 0.71x
20 days 0.76x 0.75x
30 days 0.77x 0.74x
45 days 0.78x 0.74x
3 months 0.76x 0.73x
6 months 0.74x 0.73x
9 months 0.72x 0.71x
12 months 0.72x 0.74x
</TABLE>
35
<PAGE> 43
NationsBanc Montgomery noted that the exchange ratio in the merger
agreement was 0.90 Interim common share for each Norrell common share, subject
to the right of the Norrell shareholders to receive a minimum of $16.00 per
Norrell common share in cash under the terms and conditions of the merger
agreement.
COMPARABLE COMPANY ANALYSIS. Based on public and other available
information, NationsBanc Montgomery calculated the multiples of aggregate
value, which NationsBanc Montgomery defined as equity value plus debt less cash
and cash equivalents, to the latest twelve months ("LTM") (a) revenues, (b)
earnings before interest, taxes, depreciation and amortization ("EBITDA") and
(c) earnings before interest and taxes ("EBIT"). Based on public and other
available information, NationsBanc Montgomery also calculated the multiples of
equity value, which NationsBanc Montgomery defined as shares outstanding
multiplied by stock price, to LTM net income and projected net income for
fiscal years 1999 and 2000. NationsBanc Montgomery calculated these multiples
for 33 companies in the staffing services industry whose securities are
publicly traded. Companies that provide general staffing services are marked
with an asterisk in the list below. NationsBanc Montgomery believes that the 33
companies in the staffing industry have operations similar to some of the
operations of Norrell, but noted that none of these companies has the same
management, composition, size or combination of businesses as Norrell:
o ACSYS, Inc.
o Adecco SA*
o AHL Services, Inc.*
o Alternative Resources Corporation
o Analysts International Corporation
o Butler International, Inc.
o CDI Corp.
o COMFORCE Corp.
o Cotelligent Group, Inc.
o Data Processing Resources Corporation
o Hall, Kinion & Associates, Inc.
o Headway Corporate Resources, Inc.
o Interim Services Inc.
o Kelly Services, Inc.*
o Labor Ready, Inc.
o Manpower Inc.*
o Metamor Worldwide, Inc.
o Metro Information Services, Inc.
o Modis Professional Services, Inc.
o Olsten Corporation, The *
o On Assignment, Inc.
o OutSource International, Inc.*
o Personnel Group of America, Inc.
o Professional Staff, Inc.
o RCM Technologies, Inc.
o Ready Temp*
o Robert Half International
o Romac International, Inc.
o Select Appointments Holdings plc
o SOS Staffing Services, Inc.*
o StaffMark, Inc.
o Technisource, Inc.
o Westaff, Inc.*
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<PAGE> 44
The following tables set forth the multiples indicated by this
analysis:
GENERAL STAFFING COMPANIES
<TABLE>
<CAPTION>
Aggregate Value to: Range of multiples Average Median
- ------------------- ------------------ ------- ------
<S> <C> <C> <C>
LTM Revenues 0.98x to 0.13x 0.39x 0.26x
LTM EBITDA 11.2x to 3.7x 6.4x 5.9x
LTM EBIT 23.1x to 4.8x 10.3x 7.3x
Equity Value to:
LTM Net Income 31.7x to 7.0x 13.7x 10.0x
1999P Net Income 25.8x to 6.7x 11.2x 9.6x
2000P Net Income 21.4x to 5.7x 9.3x 7.7x
</TABLE>
ALL STAFFING COMPANIES
<TABLE>
<CAPTION>
Aggregate Value to: Range of multiples Average Median
- ------------------- ------------------ ------- ------
<S> <C> <C> <C>
LTM Revenues 1.87x to 0.13x 0.58x 0.45x
LTM EBITDA 23.3x to 2.8x 7.2x 6.3x
LTM EBIT 28.6x to 3.3x 9.3x 7.3x
Equity Value to:
LTM Net Income 34.4x to 4.1x 13.3x 10.8x
1999P Net Income 25.8x to 4.0x 10.8x 9.1x
2000P Net Income 21.4x to 3.2x 8.6x 7.6x
</TABLE>
While the comparable company analysis compared Interim to 33 companies
in the staffing services industry, NationsBanc Montgomery did not include every
company that could be deemed to be a participant in this same industry, or in
the specific sectors of this industry.
NationsBanc Montgomery noted that the aggregate value of the
consideration to be paid by Interim in connection with the merger implied
multiples of 6.3x LTM EBITDA, 7.8x LTM EBIT and 0.37x LTM revenues. The equity
value of the consideration to be paid by Interim in the merger implied
multiples of 10.9x LTM net income, 11.1x fiscal year 1999 projected net income
and 9.0x fiscal year 2000 projected net income.
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<PAGE> 45
COMPARABLE TRANSACTIONS ANALYSIS. Based on public and other available
information, NationsBanc Montgomery calculated the multiples of (a) aggregate
value to LTM revenues, LTM EBITDA and LTM EBIT and (b) equity value to LTM net
income, in each case for the target company implied in acquisitions of 23
companies in the staffing services industry which became effective between May
24, 1996 and March 23, 1999, or were pending as of March 23, 1999. Mergers and
acquisitions involving companies that provide general staffing services are
marked with an asterisk below:
<TABLE>
<CAPTION>
Effective Date Acquiror Target
- -------------- -------- ------
<S> <C> <C>
Pending Adecco SA Delphi Group plc
January 28, 1999 TMP Worldwide Inc. Morgan & Banks
December 22, 1998 Data Processing Resources Corp. Systems & Programming Consultants, Inc.
November 25, 1998 StaffMark, Inc. Robert Walters plc
October 1, 1998* Randstad Holding Strategix Solutions, Inc.
August 30, 1998* DHI Holdings Personnel Management Group
August 10, 1998 AHL Services, Inc. EMD GmbH
July 8, 1998* Corporate Services Group plc CORESTAFF Services
April 20, 1998 Romac International, Inc. Source Services Corporation
January 1, 1998 Affiliated Computer Services, Inc. Cara Corp.
December 5, 1997 COMFORCE Corporation Uniform Services, Inc.
December 2, 1997 The Vincam Group, Inc. Staffing Network Inc.
December 1, 1997 Modis Professional Services, Inc. Office Specialists, Inc.
(formerly Accustaff Inc.)
November 5, 1997 Modis Professional Services, Inc. Hunterskil Howard plc
(formerly Accustaff Inc.)
September 17, 1997* Adecco SA TAD Resources International
April 21, 1997 Interim Services Inc. Michael Page Group plc
November 26, 1996 The Registry, Inc. Application Resources, Inc.
November 14, 1996 Modis Professional Services, Inc. Career Horizons, Inc.
(formerly Accustaff Inc.)
August 30, 1996 Knowledge Universe CRT Group plc
August 20, 1996* Adia SA Ecco SA
August 5, 1996 Norrell Corporation American Technical Resources, Inc.
June 19, 1996 Modis Professional Services, Inc. The McKinley Group Inc.
May 24, 1996 Interim Services Inc. Brandon Systems Corp.
</TABLE>
The following table sets forth the multiples indicated by this
analysis and the multiples implied by the proposed merger:
GENERAL STAFFING COMPANIES
<TABLE>
<CAPTION>
Proposed
Aggregate Value to: Range of multiples Average Median Transaction
- ------------------- ------------------ ------- ------ -----------
<S> <C> <C> <C> <C>
LTM Revenues 4.90x to 0.40x 1.45x 0.52x 0.37x
LTM EBITDA 12.0x to 9.5x 10.9x 11.3x 6.3x
LTM EBIT 15.1x to 10.5x 13.2x 13.5x 7.8x
Equity Value to:
LTM Net Income 26.6x to 19.7x 22.4x 21.6x 10.9x
</TABLE>
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<PAGE> 46
ALL MERGERS AND ACQUISITIONS
<TABLE>
<CAPTION>
Proposed
Aggregate Value to: Range of multiples Average Median Transaction
- ------------------- ------------------ ------- ------ -----------
<S> <C> <C> <C> <C>
LTM Revenues 4.90x to 0.36x 1.31x 0.93x 0.37x
LTM EBITDA 31.6x to 7.0x 15.5x 11.7x 6.3x
LTM EBIT 37.4x to 7.3x 17.8x 14.9x 7.8x
Equity Value to:
LTM Net Income 64.6x to 13.1x 29.3x 22.4x 10.9x
</TABLE>
No company or transaction used in the comparable company or comparable
transactions analyses is identical to Interim, Norrell or the merger.
Accordingly, an analysis of the results of the foregoing is not mathematical;
rather, it involves complex considerations and judgments concerning differences
in financial and operating characteristics of the companies and other factors
that could affect the public trading value or purchase price of the companies
to which Interim, Norrell and the merger are being compared.
PREMIUMS PAID ANALYSIS. NationsBanc Montgomery reviewed the
consideration paid in 127 precedent U.S. acquisitions involving aggregate value
between $300 million and $800 million announced from March 1, 1998 through
March 1, 1999. NationsBanc Montgomery calculated the premiums paid one day, one
week and four weeks prior to the announcement of the acquisition offer. The
following chart sets forth the average premiums paid in these transactions:
<TABLE>
<CAPTION>
Premium One Day prior Premium One Week prior Premium 4 Weeks prior to
to Announcement to Announcement Announcement
--------------------- ---------------------- ------------------------
<S> <C> <C> <C>
High 167.2% 151.3% 185.9%
Median 19.4% 23.1% 31.3%
Low 0.7% 0.2% 0.2%
</TABLE>
NationsBanc Montgomery noted that the value of the stock consideration
to be paid by Interim in connection with the acquisition implied a premium of
24.9% over Norrell's share price of $12.56 at the close of trading on March 23,
1999, based on the closing price of Interim and Norrell common shares on that
date.
DISCOUNTED CASH FLOW ANALYSIS. NationsBanc Montgomery used financial
cash flow forecasts of Norrell for the third and fourth quarters of fiscal year
1999 as well as fiscal year 2000 through 2004, as estimated by the respective
managements of Interim and Norrell, to perform a discounted cash flow analysis.
In conducting this analysis, NationsBanc Montgomery assumed that Norrell would
perform in accordance with these forecasts. NationsBanc Montgomery first
estimated the terminal value of the projected cash flows by applying multiples
to Norrell's projected 2004 EBIT, which multiples ranged from 6.5x to 8.5x.
NationsBanc Montgomery then discounted the cash flows projected through 2004
and the terminal values to present values using rates ranging from 10.7% to
12.7%. This analysis indicated a range of aggregate values, which were then
reduced by Norrell's estimated net debt, to calculate a range of equity values.
These equity values were then divided by fully diluted shares outstanding to
calculate implied equity values per share ranging from $19.44 to $26.67.
NationsBanc Montgomery noted that the value of stock consideration to be paid
by Interim in connection with the acquisition was $15.69 per Norrell common
share, based on the closing price of Interim and Norrell common share on that
date.
CONTRIBUTION ANALYSIS. NationsBanc Montgomery used the financial
forecasts for Interim and Norrell provided by the managements of the respective
companies and that they obtained from third party research reports. On the
basis of these financial forecasts, NationsBanc Montgomery reviewed the
estimated contribution of each of Interim and Norrell to the (a) total
revenues, (b) EBITDA, (c) EBIT and (d) net income, each for the last twelve
months and for the projected fiscal years 1999 and 2000, of the combined
company. NationsBanc Montgomery also reviewed the estimated contribution of
each of Interim and Norrell to stockholders' equity as stated in each company's
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<PAGE> 47
most recent balance sheet and market capitalization at March 23, 1999.
NationsBanc Montgomery then compared the estimated contributions of Interim and
Norrell to the forecasted share ownership of the combined company to be owned
by the shareholders of each of Interim and Norrell, assuming a 100%
stock-for-stock merger. This analysis also indicated that, based on these
estimates and forecasts, Interim and Norrell would each contribute:
Interim Norrell
------- -------
TOTAL REVENUES
LTM 56.9% 43.1%
1999P 61.0% 39.0%
2000P 61.6% 38.4%
EBITDA
LTM 67.1% 32.9%
1999P 70.7% 29.3%
2000P 70.1% 29.9%
EBIT
LTM 65.2% 34.8%
1999P 70.6% 29.4%
2000P 70.4% 29.6%
NET INCOME
LTM 59.9% 40.1%
1999P 67.2% 32.8%
2000P 67.2% 32.8%
LTM STOCKHOLDERS' EQUITY AT 12/25/98 AND 75.8% 24.2%
1/31/99
MARKET CAP. AT 3/23/99 73.9% 26.1%
Aggregate Value 71.2% 28.8%
Market Value
Fully Diluted Share Ownership (based on 66.0% 34.0%
100% stock-for-stock merger)
ACCRETION/DILUTION ANALYSIS. NationsBanc Montgomery used the financial
forecasts for Interim and Norrell provided by the managements of the respective
companies and that they obtained from third party research reports. On the
basis of these financial forecasts and with the consent and assistance of
Interim management, NationsBanc Montgomery compared estimated earnings per
share on a stand-alone basis for Interim to the estimated earnings per share of
the combined company for fiscal years 1999 and 2000. NationsBanc Montgomery
noted that, based on these forecasts and assuming consummation of the
acquisition on the terms set forth in the merger agreement, if Interim pays
consideration consisting of 90% Interim common stock and 10% cash in the
acquisition, the acquisition would be accretive to earnings per share by 0.4%
in fiscal year 1999 and dilutive to earnings per share by 4.1% in fiscal year
2000. However, if Interim pays the maximum cash consideration, the merger would
be accretive to earnings per share by 3.6% in fiscal year 1999 and 2.3% in
fiscal year 2000. In addition the foregoing does not consider the impact of
possible cost savings and other benefits on the accretion or dilution. The
inclusion of such possible cost savings and other benefits would increase the
accretion or reduce the dilution in each scenario.
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<PAGE> 48
The foregoing description is only a summary of the analyses and
examinations that NationsBanc Montgomery deems material to its opinion. It is
not a comprehensive description of all analyses and examinations actually
conducted by NationsBanc Montgomery. The preparation of a fairness opinion
necessarily is not susceptible to partial analysis or summary description.
NationsBanc Montgomery believes that its analyses and the summary set forth
above must be considered as a whole. They further believe that selecting
portions of its analyses and of the factors considered, without considering all
analyses and factors, would create an incomplete view of the process underlying
the analyses set forth in its presentation to the Interim's Board of Directors.
In addition, NationsBanc Montgomery may have given various analyses more or
less weight than other analyses, and may have deemed various assumptions more
or less probable than other assumptions. The fact that any specific analysis
has been referred to in the summary above is not meant to indicate that such
analysis was given greater weight than any other analysis. Accordingly, the
ranges of valuations resulting from any particular analysis described above
should not be taken to be NationsBanc Montgomery view of the actual value of
Norrell.
In performing its analyses, NationsBanc Montgomery made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of Interim
and Norrell. The analyses performed by NationsBanc Montgomery are not
necessarily indicative of actual values or actual future results, which may be
significantly more or less favorable than those suggested by these analyses.
These analyses were prepared solely as part of NationsBanc Montgomery's
analysis of the financial fairness of the consideration to be paid by Interim
for the acquisition of Norrell and were provided to Interim's Board of
Directors in connection with the delivery of NationsBanc Montgomery's opinion.
The analyses do not purport to be appraisals or to reflect the prices at which
a company might actually be sold or the prices at which any securities may
trade at any time in the future.
As described above, NationsBanc Montgomery's opinion and presentation
to Interim's Board of Directors were among the many factors taken into
consideration by the Interim Board of Directors in making its determination to
approve the merger.
Interim has agreed to pay NationsBanc Montgomery a transaction fee
equal to $4,000,000 that is contingent in full on the completion of the merger.
The Interim Board of Directors was aware of this fee structure and took it into
account in considering NationsBanc Montgomery's fairness opinion and in
approving the merger. Interim has also agreed to pay NationsBanc Montgomery a
percentage of any consideration received by Interim if the merger is not
completed. Further, Interim has agreed to reimburse NationsBanc Montgomery for
its reasonable out-of-pocket expenses and to indemnify NationsBanc Montgomery,
its affiliates, and their respective partners, directors, officers, agents,
consultants, employees and controlling persons against certain liabilities,
including liabilities under the federal securities laws.
In the ordinary course of its business, NationsBanc Montgomery
actively trades the equity securities of Interim and Norrell for its own
account and for the accounts of customers and, accordingly, may at any time
hold a long or short position in such securities. NationsBanc Montgomery also
acted as underwriter in connection with offerings of Interim's securities and
has performed various investment banking services for Interim.
NORRELL
OPINION OF GOLDMAN, SACHS & CO.
On March 24, 1999, Goldman Sachs delivered its written opinion to
Norrell's Board of Directors to the effect that, as of the date of such
opinion, the exchange ratio in the merger agreement was fair from a financial
point of view to the holders of Norrell common shares. Goldman Sachs did not
and does not express any opinion to any holder of Norrell common stock that is
required to or elects to make a cash election with respect to such holder's
shares.
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<PAGE> 49
WE HAVE ATTACHED AS APPENDIX D THE FULL TEXT OF GOLDMAN SACHS' WRITTEN
OPINION. THIS OPINION SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH THE OPINION AND IS
INCORPORATED HEREIN BY REFERENCE. WE URGE NORRELL SHAREHOLDERS TO READ THE
OPINION IN ITS ENTIRETY.
In connection with its opinion, Goldman Sachs reviewed, among other
things, (i) the merger agreement; (ii) the irrevocable proxy of Guy W. Millner,
M.I. Holdings, Inc. and Millner Preferred, LLC dated as of March 24, 1999;
(iii) Annual Reports to Shareholders and Annual Reports on Form 10-K of Norrell
and Interim for the five fiscal years ended November 1, 1998 and December 25,
1998, respectively; (iv) certain interim reports to shareholders and Quarterly
Reports on Form 10-Q of Norrell and Interim; (v) certain other communications
from Norrell and Interim to their respective shareholders; and (vi) certain
internal financial analyses and forecasts for Norrell and Interim prepared by
their respective managements, including certain cost savings and operating
synergies projected by the managements of Norrell and Interim to result from
the merger.
Goldman Sachs also held discussions with members of the senior
management of Norrell and Interim regarding the strategic rationale for, and
the potential benefits of, the merger and the past and current business
operations, financial condition and future prospects of their respective
companies. In addition, Goldman Sachs reviewed the reported price and trading
activity for Norrell common shares and Interim common shares, compared certain
financial and stock market information for Norrell and Interim with similar
information for certain other companies the securities of which are publicly
traded, reviewed the financial terms of certain recent business combinations in
the staffing industry specifically and in other industries generally and
performed such other studies and analyses as it considered appropriate.
Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information reviewed by it and assumed such accuracy and
completeness for purposes of rendering its opinion. In that regard, Goldman
Sachs assumed with Norrell's consent that the financial analyses and forecasts
prepared by the managements of Norrell and Interim, after giving effect to the
merger and including the anticipated cost savings and other benefits resulting
from the merger, have been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of Norrell and Interim, and that
such forecasts and anticipated cost savings and other benefits resulting from
the merger will be realized in the amounts and time periods contemplated
thereby. In addition, Goldman Sachs did not make an independent evaluation or
appraisal of the assets and liabilities of Norrell or Interim or any of their
subsidiaries and Goldman Sachs was not furnished with any such evaluation or
appraisal.
Goldman Sachs was aware that, prior to entering into the merger
agreement, Norrell requested and received preliminary indications of interest
from several parties proposing a possible all-cash acquisition of Norrell at
prices per share materially in excess of the value indicated by multiplying the
exchange ratio by the trading price of Interim common shares as of the date of
the merger agreement. As described above in the "Background of the Merger"
section, each of such indications of interest was subject, among other things,
to further due diligence into the business and financial condition of Norrell,
to obtaining financing sufficient to consummate any such transaction and to
negotiating a mutually acceptable satisfactory definitive agreement. Goldman
Sachs understood that the Special Committee of Norrell's Board of Directors
determined that it was not in the best interests of Norrell and its
shareholders to pursue such indications of interest. In making that
determination the Norrell Special Committee considered the numerous factors set
forth above in the "Background of the Merger" section. Goldman Sachs further
understood that each of the Norrell Special Committee and Norrell's Board of
Directors has determined, in the exercise of business judgment, that the merger
is in the best interests of Norrell and the holders of Norrell common shares
after taking into account, among other factors, the risks and uncertainties
relating to the timing and likelihood of entering into a definitive agreement
with any of the other parties at a mutually acceptable price and the respective
views of the Norrell Special Committee and Norrell's Board of Directors
concerning the complementary nature of the business of Norrell and Interim, the
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<PAGE> 50
compatibility of cultures, the anticipated cost savings and other benefits
resulting from the merger, the attainment of long-term strategies for Norrell
(including expansion into international markets and the expansion of
specialized staffing product offerings) and the contribution by Interim of
sales and management personnel at critically needed levels. Goldman Sachs'
opinion does not address the relative merits of the merger as compared to any
alternative business transaction that might be available to Norrell.
Goldman Sachs' advisory services and the opinion expressed herein are
provided for the information and assistance of Norrell's Board of Directors in
connection with its consideration of the merger and such opinion does not
constitute a recommendation as to how any holder of Norrell common shares
should vote with respect to the merger.
The following is a summary of the material financial analyses used by
Goldman Sachs in connection with providing its March 24, 1999 opinion to
Norrell's Board of Directors. Some of the summaries of financial analyses
include information presented in tabular format. In order to more fully
understand the financial analyses used by Goldman Sachs, the tables must be
read together with the text of each summary. The tables alone do not constitute
a complete description of Goldman Sachs' financial analyses.
SELECTED COMPANIES ANALYSIS. Goldman Sachs performed this analysis to
evaluate the fairness of the exchange ratio based upon a comparison of specific
financial information relating to Norrell and Interim to corresponding
financial information, ratios and public market multiples for several US,
companies. In addition, Goldman Sachs also considered for purposes of this
analysis comparative financial information, ratios and multiples for several
publicly traded European and information technology companies because Interim
derives a significant portion of earnings from its European and information
technology operations. Goldman Sachs selected the following companies for
comparison because they are publicly traded temporary staffing companies with
operations that for purposes of the analysis may be considered similar, in
varying degrees, to operations of Norrell and Interim:
o The selected US companies consisted of AHL Services, Inc.,
CDI Corp., Kelly Services, Inc., Manpower, Inc., Olsten
Corporation, Personnel Group of America, Romac International,
Inc. and StaffMark, Inc.;
o The selected European companies consisted of Adecco SA,
Brunel International, The Corporate Services Group PLC,
Randstad Holding NV, Select Appointments PLC, Spring Group
plc and Vedior NV; and
o The selected information technology companies consisted of
Ciber, Inc., Computer Horizons Corp., Computer Task Group,
Incorporated, Information Management Resources Corporation,
Keane, Inc, Mastech Corporation, Metamor Worldwide, Inc. and
Modis Professional Services, Inc.
Goldman Sachs calculated and compared financial multiples, ratios and
public market multiples for Norrell and Interim based on the March 23, 1999
closing price per share on the NYSE of $12.56 and $17.44, respectively, and for
each of the selected companies based on the most recent publicly available
information as of March 23, 1999.
For the selected companies, Goldman Sachs considered levered market
capitalization (I.E., market value of common equity plus estimated market value
of debt less cash) as a multiple of LTM sales, LTM EBITDA and LTM EBIT. Goldman
Sachs' analyses for the selected companies indicated the following mean and
median multiples for the selected companies, as compared to Norrell and
Interim:
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<TABLE>
<CAPTION>
Levered Market Capitalization as a multiple of
---------------------------------------------------
SELECTED COMPANIES LTM SALES LTM EBITDA LTM EBIT
- ------------------ --------- ---------- --------
<S> <C> <C> <C>
US
Mean 0.5x 5.6x 7.5x
Median 0.4x 5.5x 6.5x
European
Mean 1.0x 15.1x 15.4x
Median 1.1x 15.8x 17.9x
Information Technology
Mean 1.2x 8.1x 9.1x
Median 1.2x 8.6x 9.9x
Norrell 0.3x 5.4x 6.5x
Interim 0.7x 7.1x 9.5x
</TABLE>
As set forth in the following table, Goldman Sachs also considered for
the selected companies mean and median estimated year 1999 and 2000
price/earnings ("P/E") ratios based on calendarized earnings per share ("EPS")
estimates provided by Institutional Brokers Estimates System ("IBES") for the
selected companies and based on management projections for Norrell and Interim,
mean and median EBIT margins, mean and median five year EPS growth rates based
on IBES estimates and management projections for Norrell and Interim and
estimated 1999 mean and median P/E multiples of the EPS growth rate, in each
case as compared to Norrell and Interim.
<TABLE>
<CAPTION>
P/E Multiples
------------- EBIT 5 Year EPS 1999 P/E to
Selected Companies 1999 2000 Margins Growth Rate Growth Rate
------------------ ---- ---- ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
US
Mean 9.1x 7.3x 5.9% 20.1% 0.5x
Median 8.6x 6.4x 4.8% 17.5% 0.6x
European
Mean 17.9x 16.3x 5.5% 16.0% 1.2x
Median 18.8x 16.2x 5.8% 15.0% 1.3x
Information Technology
Mean 11.4x 8.3x 12.9% 28.5% 0.4x
Median 11.8x 9.0x 13.3% 29.4% 0.4x
Norrell 8.5x 6.7x 4.8% 16.0% 0.5x
Interim 11.1x 9.2x 6.8% 20.0% 0.6x
</TABLE>
DISCOUNTED CASH FLOW ANALYSIS. Goldman Sachs performed a discounted
cash flow analysis using Norrell's and Interim's respective management's
estimates to determine the value per share of the Norrell common shares under
the following scenarios: (i) on a Norrell standalone basis, (ii) on a pro forma
basis without synergies, and (iii) on a pro forma basis with synergies. Using
perpetual growth rates ranging from 3.0% to 5.0% and discount rates ranging
from 10.0% to 12.0%, the implied value per share of the Norrell common shares,
discounted to April 1, 1999, ranged from $15 to $28 on a Norrell standalone
basis; from $15 to $30 on a pro forma basis without synergies; and from $19 to
$37 on a pro forma basis with synergies.
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<PAGE> 52
CONTRIBUTION ANALYSIS. The purpose of this analysis was to evaluate
the fairness of the exchange ratio based on the relative contribution by each
party to specified income statement items of the combined company resulting
from the merger after adjusting for the respective capital structures of
Norrell and Interim. Goldman Sachs reviewed specific historical and estimated
future operating and financial information based on publicly available
information and estimates provided by the respective managements of Norrell and
Interim to determine the contribution Norrell would have made to, among other
things, the combined company's revenues, EBITDA and EBIT.
The following table sets forth the contribution that Norrell would
have made to each of the listed income statement items of the combined company
in each of 1998, for the latest twelve months and estimated for 1999.
<TABLE>
<CAPTION>
Norrell's contribution to: 1998 LTM 1999
- -------------------------- ----- ----- -----
<S> <C> <C> <C>
Revenues 45.2% 45.5% 41.2%
EBITDA 34.5% 34.8% 31.1%
EBIT 36.7% 37.1% 31.1%
Net Income 38.7% 38.9% 31.1%
Earnings before taxes, depreciation
and amortization 34.1% -- 30.0%
Combined earnings before taxes 37.3% -- 30.3%
</TABLE>
Based on Norrell's common share price on March 23, 1999, the analysis
indicated that:
o Norrell would contribute 28.5% to the primary market
capitalization of the combined company; and
o Norrell shareholders would own on a pro forma basis 31.2% of
the outstanding common equity of the combined company
(assuming 90% of the Norrell common shares is exchanged for
Interim common shares and the remaining 10% is exchanged for
cash in the merger).
SELECTED TRANSACTIONS ANALYSIS. The purpose of this analysis was to
provide information regarding the fairness of the exchange ratio based upon a
comparison of the financial terms of the merger with the financial terms of
several other business combinations in the commercial staffing industry.
Goldman Sachs analyzed certain information relating to selected transactions
since 1996 in the commercial staffing industry consisting of the cash
acquisition of Strategix Solutions by Randstad in August 1998, the cash
acquisition of Corestaff Services by Corporate Services Group in June 1998, the
cash acquisition of TAD Resources by Adecco in September 1997, the cash
acquisition of Michael Page Group by Interim Services in March 1997, the stock
acquisition of Career Horizons by AccuStaff in August 1996 and the stock
acquisition of Ecco by Adia in May 1996. The analysis focused on measuring the
levered total consideration as a multiple of LTM sales, LTM EBITDA and LTM
EBIT. Goldman Sachs considered the fact that (i) several of the selected
transactions involved cash consideration and (ii) the LTM EBITDA multiples for
comparable publicly traded companies had declined materially from the period
when the selected transactions had taken place to March 23, 1999.
The following table presents the range of multiples for the selected
transactions, each as compared to corresponding values as of March 23, 1999 for
the merger.
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Ranges for the Selected
Transactions The Merger
----------------------- ----------
Multiple of LTM Sales 0.36x - 2.3x 0.37x
Multiple of LTM EBITDA 7.9x - 14.6x 6.3x
Multiple of LTM EBIT 9.2x - 33.7x 7.7x
ANALYSIS AT CURRENT PRICE. For the purpose of this analysis, Goldman
Sachs assumed that each Norrell common share would be valued at a transaction
price of $15.6938 based on Interim's closing per share price on March 23, 1999
of $17.4375 multiplied by the exchange ratio. This transaction price
represented 63.4% of Norrell's highest common share price over the preceding 52
trading weeks and a premium of 24.9% over Norrell's closing common shares price
on March 23, 1999.
HISTORICAL EXCHANGE RATIO ANALYSIS. The purpose of this analysis was
to provide information regarding the fairness of the exchange ratio in the
merger by comparing the exchange ratio to the historical exchange ratios of the
Norrell common shares and Interim common shares. Goldman Sachs reviewed
historical daily trading prices for Norrell and Interim for the one year period
ending March 23, 1999. Goldman Sachs' analysis indicated that the historical
exchange ratio from March 24, 1998 through March 23, 1999 ranged from 0.5775 to
0.9778, compared to the exchange ratio of 0.90 in the merger.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of all such analyses. No company or
transaction used in the above analyses as a comparison is directly comparable
to Norrell or Interim or the contemplated transaction. The analyses were
prepared solely for purposes of Goldman Sachs' providing its opinion to
Norrell's Board of Directors as to the fairness from a financial point of view
of the exchange ratio and do not purport to be appraisals or necessarily
reflect the prices at which businesses or securities actually may be sold.
Analyses based upon forecasts of future results are not necessarily indicative
of actual future results, which may be significantly more or less favorable
than suggested by such analyses. Because such analyses are inherently subject
to uncertainty, being based upon numerous factors or events beyond the control
of the parties or their respective advisors, none of Norrell, Interim, Goldman
Sachs or any other person assumes responsibility if future results are
materially different from those forecast. As described above, Goldman Sachs'
opinion to Norrell's Board of Directors was one of many factors taken into
consideration by Norrell's Board of Directors in making its determination to
approve the merger. The foregoing summary does not purport to be a complete
description of the analysis performed by Goldman Sachs and is qualified by
reference to the written opinion of Goldman Sachs set forth in Appendix D
hereto.
Goldman Sachs, as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements, and valuations for estate, corporate and other purposes. Norrell
selected Goldman Sachs as its financial advisor because it is a nationally
recognized investment banking firm that has substantial experience in
transactions similar to the merger.
Goldman Sachs has provided certain investment banking services to
Interim from time to time, including having acted as lead manager of secondary
offerings of Interim common stock in 1996 and 1998, and as lead manager of an
offering of 4-1/2% convertible subordinated notes in 1998 and Goldman Sachs may
provide investment banking services to Interim in the future. Goldman Sachs
provides a full range of financial advisory and securities services and, in the
course of its normal trading activities, may from time to time effect
transactions and hold securities, including derivative securities, of Norrell
or Interim for its own account and for accounts of customers.
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<PAGE> 54
Pursuant to a letter agreement dated January 11, 1999, Norrell engaged
Goldman Sachs to act as its exclusive financial advisor in connection with an
analysis of strategic alternatives including a possible sale of all or a
portion of the company. Under the engagement letter, Norrell has agreed to pay
Goldman Sachs, upon consummation of the merger, a transaction fee of 0.90% of
the sum of the total consideration paid to equity holders in the merger and
$100 million, subject to certain adjustments. Norrell has agreed to reimburse
Goldman Sachs for its reasonable out-of-pocket expenses, including attorney's
fees, and to indemnify Goldman Sachs against certain liabilities, including
certain liabilities under the federal securities laws.
INTERESTS OF MEMBERS OF NORRELL'S BOARD OF DIRECTORS AND MANAGEMENT IN THE
MERGER
When you consider the recommendations of our Boards of Directors, you
should be aware that some executive officers of Norrell and members of the
Norrell Board of Directors may have interests in the merger that are different
from your interests. These interests may create potential conflicts. Our Boards
of Directors were aware of these interests when they approved the merger.
EMPLOYMENT AGREEMENTS WITH SENIOR EXECUTIVE OFFICERS. Norrell entered
into employment agreements with C. Douglas Miller, Larry J. Bryan and James
Ernest Riddle that entitle these executives to severance benefits for a period
of 36 months for Mr. Miller and Mr. Bryan, and a period of 24 months for Mr.
Riddle. The agreements were last amended in February, 1999. The executives are
entitled to severance benefits if Norrell terminates their employment without
cause or if the executive officer terminates employment for good reason. For
purposes of these agreements, good reason means a reduction in compensation or
benefits, forced relocation, a material change in duties or responsibilities or
a change in title. Norrell also must pay severance to Mr. Miller if he
terminates his employment for any reason within six months following a change
of control. The merger will constitute a change of control under this
employment agreement. Severance compensation consists of:
o an amount equal to two or three times the sum of the
executive officer's annual base salary and the executive's
target bonus for the year of termination, payable in equal
monthly installments over the severance period;
o continued payment through the severance period of employee
benefits, or their equivalent, that the executive officer
received prior to termination;
o continued health insurance benefits that are at least equal
to those received during his employment until the end of the
severance period;
o continued medical coverage for Mr. Miller and his wife for
each of their lives, equivalent to that received during his
employment;
o assignment to Mr. Miller, upon his termination for any
reason, of any and all rights under any life insurance policy
maintained by Norrell in which Mr. Miller is the insured;
o accelerated vesting of outstanding stock options held by the
executive officer under Norrell's stock option and stock
incentive plans and the lapse of all restrictions on
outstanding awards of restricted stock, if any; and
o the purchase by Norrell in cash, upon request by the
executive officer, of all Norrell common shares then held by
the executive officer for its fair market value and all
options to purchase Norrell common shares then held by the
executive officer for the excess of the fair market value of
the common shares purchasable upon the exercise of such
options over the exercise price of the options.
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<PAGE> 55
Under the merger agreement, Interim has agreed to assume Norrell's
employment agreements, and consequently, any required purchase of Norrell
common shares or stock options following the merger will result in the purchase
of Interim common shares or stock options. Additionally, if any payment to
these executive officers triggers the golden parachute excise tax and
non-deductibility provisions under the federal tax laws, a gross-up payment
will be made to place that person in the same after-tax position as would have
been the case if no excise tax were imposed.
Pursuant to the employment agreements, each executive officer agreed
not to compete with Norrell, or solicit customers or employees of Norrell, for
the severance period.
EMPLOYMENT AGREEMENTS WITH OTHER EXECUTIVE OFFICERS. Norrell amended
its employment agreements with its other key executive officers in February,
1999 to entitle the executives to severance benefits if their employment is
terminated without cause or terminated by the executive for good reason within
two years following a change of control. Good reason means a reduction in
compensation, the failure to assign significant authority, duties, and
responsibilities, or the forced relocation of the executive. The merger will
constitute a change of control under these agreements. The severance period for
Stanley E. Anderson, Mark H. Hain and Thomas A. Vadnais is 24 months, while the
severance period for Scott L. Colabuono, Robert W. Grissom, Jr., Ted A.
Jurkuta, Wayne M. Mincey, Euguene F. Obermeyer, Ronald T. Self, Paul J. Seymour
and Teresa G. Williams is 18 months. Severance compensation consists of:
o an amount equal to one and one-half times or two times the
sum of the executive's annual base salary and the executive's
target bonus for the year of termination, payable in equal
monthly installments over the severance period;
o continued health insurance benefits that are at least equal
to those that would have been provided to the executive in
accordance with the employment agreement until the end of the
severance period; and
o accelerated vesting of outstanding stock options held by the
executive under Norrell's stock option and stock incentive
plans and the lapse of all restrictions on outstanding awards
of restricted stock, if any.
All payments to these executives are subject to reduction to avoid
triggering the golden parachute excise tax and non-deductibility provisions of
the federal tax laws.
Pursuant to each of the employment agreements, each executive agreed
not to compete with Norrell, or solicit customers or employees of Norrell, for
a period of 12 months from the date of termination.
EMPLOYEE BENEFITS. Interim has agreed to provide employee benefits
under employee benefit and welfare plans to officers and employees of Norrell
who become employees of Interim. These benefits will be substantially similar
to those provided by Interim to its similarly situated officers and employees.
For purposes of participation, vesting and benefit accrual under Interim's
employee benefit plans, the service of the employees of Norrell prior to the
merger will be treated as service with Interim. All co-payments and deductibles
paid by any participant during 1999 with respect to any health or other
employee benefit plans will be credited for similar purposes under the
comparable Interim benefit plan. In addition, Interim will honor all
employment, severance, consulting, and other compensation agreements between
Norrell and its directors, officers or employees, as well as all vested
benefits or other vested amounts earned or accrued through the closing of the
merger under any employee benefit plans maintained by Norrell.
RESTRICTED SHARES. Norrell has issued restricted shares to some of its
executives and employees under its 1994 Stock Incentive Plan. Under the terms
of Restricted Stock Agreements, all restricted shares will fully vest and
become non-forfeitable as a result of the merger.
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<PAGE> 56
DIRECTORS' RESTRICTED STOCK AND OPTIONS. Restricted stock issued to
directors of Norrell will fully vest and become non-forfeitable upon a change
of control.
INTERESTS OF GUY W. MILLNER. As of May 18, 1999, Guy W. Millner, the
principal shareholder and a director of Norrell, and his affiliates,
beneficially owned 9,511,098 Norrell common shares, constituting approximately
36% of the outstanding shares of Norrell common shares. Interim has agreed to
appoint Guy W. Millner or his designee to the Interim Board of Directors after
the merger. Guy W. Millner or his designee will receive the same directors'
compensation paid by Interim to its other non-employee directors. See
"Management and Operations After the Merger" on page 63.
CLB ADVISORS. During November 1998, Mr. Millner retained CLB Advisors,
LLC, an Atlanta investment banking firm, to make private inquiries, solely on
behalf of Mr. Millner and not on behalf of Norrell, to determine whether
Interim and certain other companies would be interested in pursuing a business
combination with Norrell. Subsequently, CLB Advisors was retained as a
consultant to Norrell. Norrell agreed to pay the expenses incurred by CLB
Advisors in connection with its services as consultant to Norrell and to pay a
fee to CLB Advisors of 0.10% of the sum of the total consideration paid to
equity holders in the merger and $100 million, subject to certain adjustments,
and to indemnify CLB against certain liabilities and expenses it may incur. Mr.
Millner will not pay any of the CLB expenses or fees.
IRREVOCABLE PROXY OF GUY W. MILLNER. On March 24, 1999, Guy W. Millner
and certain of his affiliates granted an irrevocable proxy to Interim in which
they agreed to vote the Norrell common shares held of record by them to approve
the merger. The irrevocable proxy makes it likely that the merger will receive
the required approval by Norrell shareholders. The irrevocable proxy terminates
if the Norrell Board of Directors withdraws its approval or recommendation of
the merger, or if the merger agreement is terminated pursuant to the terms
thereof.
MERGER CONSIDERATION ELECTION AGREEMENT. On March 24, 1999, Guy W.
Millner and an affiliate of Mr. Millner agreed to make cash elections, if cash
elections are made with respect to less than 10% of the issued and outstanding
shares of Norrell common shares, with respect to the number of their Norrell
common shares which would cause at least 10% of the total merger consideration
to be paid in cash.
INTERIM COMMON SHARES TO BE RECEIVED BY NORRELL DIRECTORS AND
EXECUTIVE OFFICERS. If the merger had occurred on May 18, 1999, executive
officers and directors of Norrell and their affiliates would have received:
o Interim common shares having an aggregate market value of
approximately $196 million, assuming that all such executive
officers and directors exchange their Norrell common shares
solely for Interim common shares, and
o options to purchase up to 1,825,180 Interim common
shares at a weighted average exercise price of $15.03 per
option.
INSURANCE AND INDEMNIFICATION. Under the merger agreement, Interim
agreed to provide certain continuing indemnification and insurance benefits for
officers, directors and employees of Norrell. See "The Merger Agreement -
Indemnification and Insurance" on page 59.
ACCOUNTING TREATMENT
Interim will account for the transaction as a purchase transaction for
accounting and financial reporting purposes. Under this method of accounting,
Interim will allocate the purchase price of Norrell, including direct costs of
the merger, to the assets acquired and liabilities assumed based upon their
estimated relative fair values with the excess purchase consideration allocated
to goodwill. Interim amortizes goodwill and other intangible assets using the
straight-line method over their estimated useful lives, not to exceed 40 years.
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<PAGE> 57
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain U.S. federal income tax
consequences of the merger and is not a complete analysis or description of all
potential tax effects that might be relevant to any particular Interim or
Norrell shareholder in making a decision to vote for or against the merger. The
merger will not have any U.S. federal income tax consequences to Interim
shareholders. The following discussion only applies to Norrell shareholders who
hold Norrell common shares as capital assets and does not address all potential
income tax consequences that may be relevant to Norrell shareholders generally
or Norrell shareholders subject to special treatment under the Internal Revenue
Code, including, without limitation, foreign persons or entities, insurance
companies, financial institutions, dealers in securities, tax-exempt
organizations, persons who hold Norrell common shares as part of a "straddle"
or a "conversion transaction" for U.S. federal income tax purposes, and
individuals who receive Norrell common shares pursuant to the exercise of
employee stock options or otherwise as compensation.
This discussion does not provide any information with respect to the
tax consequences, if any, of the merger under applicable foreign, state, local
and other tax laws. The discussion is based on the provisions of the Internal
Revenue Code of 1986, applicable Treasury Regulations, Internal Revenue Service
rulings, judicial decisions and other administrative pronouncements, all as in
effect as of the date hereof. There can be no assurance that future
legislative, administrative or judicial changes or interpretations will not
affect the accuracy of the statements or conclusions set forth herein. Any such
future change or interpretation could apply retroactively and could affect the
accuracy of the following discussion.
Neither Norrell nor Interim has requested a ruling from the Internal
Revenue Service ("IRS") with regard to any of the federal income tax
consequences of the merger, and the opinions of counsel as to such federal
income tax consequences referred to below will not be binding on the IRS.
TAX OPINION. Interim's and Norrell's obligations to complete the
merger are conditioned upon receiving from each of Baker & McKenzie and Alston
& Bird LLP, an opinion, in form and substance reasonably satisfactory to
Interim and Norrell, that on the basis of certain facts, representations and
assumptions:
(i) the merger and the issuance of Interim common shares in the
merger will constitute a tax-free reorganization as defined
in Section 368(a) of the Code;
(ii) Norrell and Interim each will be considered a party to the
reorganization;
(iii) except for the recognition of gain with respect to cash
received by Norrell shareholders, Norrell shareholders will
not recognize any gain or loss upon the exchange of Norrell
common shares for Interim common shares as a result of the
merger;
(iv) in general, cash received by holders of Norrell common shares
in lieu of fractional shares or as a cash payment will be
treated as amounts distributed in redemption of their shares
and will be taxable under the provisions of Section 302 of
the Code.
The tax opinions do not bind the IRS or any court and do not preclude the IRS
or a court from reaching a contrary conclusion.
Although the requirement for receipt of the tax opinions may be waived
by the parties, it is expected that such tax opinions will be received and that
the requirement will not be waived by either party. In the event that (a)
either Interim or Norrell waives this condition and (b) the related change in
tax consequences is material, Norrell and Interim each will furnish a
supplement to this joint proxy statement/prospectus to its shareholders
disclosing the waiver and all related material matters, and proxies will be
resolicited.
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The discussion below summarizes the federal income tax consequences of
the merger to Norrell shareholders, as specified above.
NORRELL SHAREHOLDERS--GENERAL. As discussed below, the federal income
tax consequences of the merger to a Norrell shareholder depend on whether the
holder receives cash or Interim common shares or some combination thereof in
exchange for the holder's Norrell common shares.
Except as discussed below with respect to cash received instead of a
fractional Interim common share, a Norrell shareholder who receives only
Interim common shares in the exchange of the holder's Norrell common shares
will not recognize gain or loss.
A Norrell shareholder that receives solely cash in exchange for the
holder's Norrell common shares, and does not otherwise own (after application
of the attribution rules of Section 318 of the Code, discussed below) any
Interim common shares, will either recognize capital gain or loss, measured by
the difference between the amount of cash received and the adjusted tax basis
of the Norrell common shares exchanged therefor.
Except as discussed below with respect to cash received instead of a
fractional Interim common share, a Norrell shareholder that, (i) as a result of
prorations or allocations resulting from limitations on cash (See "The Merger
Agreement - The Merger" on page 53) or as a result of not making a cash
election with respect to all of such holder's Norrell common shares, receives
both Interim common shares and cash in the exchange for Norrell common shares
or (ii) who receives solely cash in the merger but otherwise owns Interim
common shares will not recognize loss in such exchange. However, under Section
356(a)(1) of the Code, such holder will recognize gain equal to the lesser of:
(1) the sum of the fair market value of the Interim common shares received plus
the amount of any cash received minus the adjusted tax basis of the Norrell
common shares exchanged; or (2) the amount of any cash received. Any such gain
realized will be treated as either capital gain or dividend income, as provided
in Section 302 of the Code. See "--Additional Considerations" below.
FRACTIONAL SHARES. If a Norrell shareholder receives cash instead of a
fractional Interim common share in the merger, the Norrell shareholder will be
treated as having received such fractional Interim common share pursuant to the
merger and as having sold it for cash. The amount of any gain or loss
attributable to such sale will be equal to the difference between the cash
received with respect to the fractional Interim common share and the ratable
portion of the tax basis of the Norrell common shares that is allocated to such
fractional Interim common share. Any such gain recognized will be treated as
either capital gain or loss.
ADDITIONAL CONSIDERATIONS. For purposes of determining whether the
gain realized by a Norrell shareholder is capital gain or dividend income, the
Norrell shareholder is treated as having received solely Interim common shares
in the merger, instead of the cash actually received, and then having received
cash from Interim in a hypothetical redemption of those shares. The
hypothetical redemption will be treated as a sale or exchange of the Interim
common shares that are considered to have been redeemed, and thus will trigger
capital gain, if the hypothetical redemption is considered to be either (a)
"not essentially equivalent to a dividend," within the meaning of the Section
302 of the Code or (b) "substantially disproportionate" with respect to the
Norrell shareholder, within the meaning of the Section 302 of the Code.
Whether such hypothetical redemption of Interim common shares is "not
essentially equivalent to a dividend" depends on the individual facts and
circumstances of each shareholder, but in any event must result in a meaningful
reduction of a shareholder's proportionate stock interest in Interim.
Generally, in the case of a Norrell shareholder whose stock interest in
Interim, relative to the total number of Interim common shares outstanding, is
minimal and who exercises no control over the affairs of Interim, any actual
reduction in proportionate interest will be treated as "meaningful" and the
hypothetical redemption will be treated as giving rise to capital gain, rather
than dividend income.
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The hypothetical redemption of the Interim common shares will be
"substantially disproportionate" if (a) the ratio which the Interim common
shares (and any other Interim voting shares) owned by the shareholder after the
hypothetical redemption bears to all of the voting shares of Interim at such
time is less than 80% of the ratio which the Interim common shares and any
other Interim voting shares hypothetically owned by the shareholder after the
merger, but before the redemption, bears to all of the voting shares of Interim
at such time and (b) the shareholder owns less than 50 percent of the combined
voting power of all of the voting shares of Interim outstanding immediately
after the hypothetical redemption.
As indicated in the foregoing discussion, the character of the gain,
if any, recognized by Norrell shareholders depends on the shareholder's
individual circumstances. Therefore, such shareholders should consult their tax
advisors regarding the character of the gain, if any, that is recognized. In
addition, the foregoing tests are applied by taking into account not only
actual ownership of shares but also shares constructively owned by a
shareholder by reason of certain attribution rules under Section 318 of the
Code. Under these rules, a shareholder is treated as owning the shares owned by
certain family members, shares subject to an option to acquire such shares,
shares owned by certain estates and trusts of which the shareholder is a
beneficiary, and shares owned by certain affiliated entities. BECAUSE OF THE
COMPLEXITY OF THESE RULES, SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THEIR POTENTIAL APPLICATION TO THEIR PARTICULAR CASES.
ADJUSTED TAX BASIS AND HOLDING PERIOD. The adjusted tax basis of the
Interim common shares received will be the same as the adjusted tax basis of
the Norrell common shares surrendered, decreased by the amount of any cash
received in the merger for such common shares, and increased by the amount of
gain recognized on the exchange including any portion that is treated as a
dividend. The holding period of the Interim common shares received will include
the holding period of the Norrell common shares exchanged therefor.
THE FOREGOING DISCUSSION DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN
TAX ASPECTS OF THE MERGER OR ALL SPECIFIC FACTUAL CIRCUMSTANCES THAT MAY BE
RELEVANT TO THE TAX SITUATION OF EACH NORRELL SHAREHOLDER. THE DISCUSSION IS
BASED ON CURRENTLY EXISTING PROVISIONS OF THE INTERNAL REVENUE CODE, EXISTING
AND PROPOSED TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS
AND COURT DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH
CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THE DISCUSSION. EACH NORRELL
SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER TO HIM, HER OR IT, INCLUDING THE APPLICATION AND
EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
REGULATORY MATTERS
Interim and Norrell are prohibited from completing the merger under
U.S. antitrust laws until they have furnished information and materials to the
Antitrust Division of the Department of Justice and the Federal Trade
Commission and a required waiting period has ended. The required notification
and report forms were filed by Interim, Norrell and the principal shareholder
of Norrell, and early termination of the waiting period was granted on April
26, 1999. The Department of Justice and the Federal Trade Commission will
continue to have the authority to challenge the merger on antitrust grounds
before or after the merger is completed even though the waiting period ended.
Upon completion of the merger, Interim will acquire Norrell's
healthcare business. Interim is required to obtain the approval of the New York
Public Health Council to acquire Norrell's healthcare business in New York. The
New York State Department of Health stated that, based upon Interim's
representation that it intends to divest itself of the healthcare business
after the merger, it will not require Interim to submit applications for
approval of the change of control resulting from the merger before a buyer is
identified.
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RESALE RESTRICTIONS
All Interim common shares received by Norrell shareholders in the
merger will be freely transferable, except those received by "affiliates," as
that term is defined under the Securities Act of 1933, of Norrell at the time
of the Norrell special meeting. Interim common shares received by affiliates
may be resold by them only in transactions permitted by the resale provisions
of Rule 144 or Rule 145 under the Securities Act of 1933, or as otherwise
permitted under the Securities Act of 1933. Persons who may be considered to be
Norrell affiliates generally include individuals or entities that Norrell
controls, are controlled by Norrell, or are under common control with Norrell,
and may include some of Norrell's officers and directors as well as Norrell's
principal shareholders. For example, Guy W. Millner is considered an
"affiliate."
AMENDMENT OF EXISTING CREDIT FACILITIES; REFINANCING OF EXISTING INDEBTEDNESS
Interim has received a commitment from its administrative agent to
amend and restate its existing senior bank credit facility to increase the
facility to $550 million. Interim plans to syndicate this facility and close
upon completion of the merger. The amended and restated credit facility will
allow Interim to refinance its existing indebtedness, pay-off Norrell's
existing indebtedness and pay the cash consideration in the merger as well as
provide for general corporate needs. When effected, the amended and restated
facility will permit the merger without a violation of the terms of Interim's
senior bank credit facility. If not effected, the completion of the merger
would require an amendment to Norrell's existing credit facility.
THE MERGER AGREEMENT
THIS IS A SUMMARY OF THE MATERIAL PROVISIONS OF THE MERGER AGREEMENT,
A COPY OF WHICH IS ATTACHED AS APPENDIX A TO THIS DOCUMENT. YOU SHOULD REFER TO
THE FULL TEXT OF THE MERGER AGREEMENT FOR DETAILS OF THE MERGER AND THE TERMS
AND CONDITIONS OF THE MERGER AGREEMENT.
THE MERGER
When the merger occurs, Norrell will be merged with and into Interim
Merger Corporation, a wholly-owned subsidiary of Interim. As a result, Interim
will be the surviving publicly-traded company. The merger will have the effects
specified in the Delaware General Corporation Law.
In the merger, Norrell shareholders will receive 0.9 Interim common
share for each Norrell common share they own. Norrell shareholders may elect to
exchange their shares for cash instead of Interim common shares in an amount
per share equal to the greater of (a) 0.9 times the average closing price of
Interim common shares on the New York Stock Exchange for the 20 trading days
ending two days before the merger or (b) $16.00.
There are two limitations on the amount of cash Interim will pay in the
merger, and neither of these may be exceeded. The first limitation is that the
total amount of cash paid by Interim may not exceed $175 million. The second
limitation is that the total amount of cash payments to be made by Interim in
the merger plus approximately $28,200,000, representing the amount of all
payments made by Norrell or its affiliates since March 24, 1996 in connection
with the purchase and redemption of Norrell common shares, may not exceed 49% of
the sum of the total value of cash and shares to be delivered to Norrell
shareholders in the merger plus approximately $28,200,000. We have required this
second limitation to enable Norrell shareholders to defer the payment of federal
income taxes on the gain, if any, from the exchange of their Norrell common
shares for Interim common shares in the merger. See "The Merger -- Certain U.S.
Federal Income Tax Consequences" on page 50.
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If Norrell shareholders elect to receive cash in excess of the
aggregate limitations described above, then the aggregate number of shares
making cash elections will be reduced on a PRO RATA basis among all Norrell
shareholders making cash elections until these limitations are no longer
exceeded.
Interim will not issue fractional shares. Norrell shareholders will
receive an amount of cash based on the Interim common share price instead of
any fractional shares.
All Norrell common shares will be canceled and retired. Each holder of
a certificate representing any Norrell common shares will no longer have any
rights with respect to the Norrell common shares, except for the right to
receive Interim common shares or cash. Each Norrell common share held in
Norrell's treasury or held by Interim or their subsidiaries at the time of the
merger will be canceled and retired without any payment.
Each outstanding option that Norrell has granted under its stock
option plans to purchase one Norrell common share will become an option to
purchase 0.9 Interim common share at the exercise or purchase price per share
equal to (a) the exercise price per share in effect under the Norrell option,
DIVIDED BY (b) 0.9, and otherwise on substantially the same terms and
conditions, as the former option to purchase Norrell common shares.
Accordingly, the number of shares for which an option will be exercisable will
decrease and the exercise price of the option will increase. The adjustments
are intended to give to Norrell option holders the right to acquire the same
number of Interim common shares that they would have been entitled to receive
had they exercised their Norrell options immediately before the merger and the
Norrell common shares they would have received upon this exercise were
exchanged in the merger for Interim common shares. Also, the adjustments allow
the total consideration payable upon exercise of the options after the merger
to be the same which would have been paid upon exercise of the options before
the merger.
EFFECTIVE TIME OF THE MERGER
The merger will become effective when we file a Certificate of Merger
with the Secretary of State of the State of Delaware and Articles of Merger
with the Secretary of State of the State of Georgia. The parties will file the
Certificate of Merger and Articles of Merger on the first business day after
the satisfaction or waiver of all conditions in the merger agreement. We expect
to complete the merger in the summer of 1999. We cannot assure you when, or if,
all the conditions to closing of the merger will be satisfied or waived. See
"-- Conditions" on page 60.
CASH ELECTION PROCEDURES
Norrell shareholders should sign, date and complete the enclosed
election form if they want to receive cash instead of Interim common shares in
exchange for any or all of their Norrell common shares. The completed election
form must be forwarded to First Union National Bank, the exchange agent, by
mail or fax for receipt no later than 5:00 p.m., eastern daylight time, on June
30, 1999 at:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Fax: 1-704-590-7628
Norrell shareholders have the right to change or revoke their election
at anytime before June 30, 1999. If an election form is revoked, it will be
treated as if no cash election had been made.
If a Norrell shareholder has not submitted to the exchange agent a
properly executed election form by 5:00 p.m. on June 30, 1999, the holder's
Norrell common shares will be exchanged for Interim common shares.
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EXCHANGE PROCEDURES
After the merger, the exchange agent, will mail to each person who
held Norrell common shares at the time of the merger a letter of transmittal.
The holder should use this letter of transmittal in forwarding Norrell stock
certificates. After surrendering to the exchange agent a Norrell stock
certificate together with a letter of transmittal, the holder of a Norrell
stock certificate will be entitled to receive Interim stock certificates or
cash in accordance with their election and subject to the limitations on the
total amount of cash that Interim will pay in this transaction. See "The Merger
Agreement -- The Merger" beginning on page 53. The exchange agent will cancel
the surrendered certificates. NORRELL SHAREHOLDERS SHOULD NOT SEND IN THEIR
NORRELL STOCK CERTIFICATES UNTIL THEY RECEIVE A LETTER OF TRANSMITTAL.
In addition to a certificate representing Interim common shares, the
holder of a surrendered Norrell common stock certificate will receive, if not
paid by Norrell, the quarterly dividend in the amount of $0.04 per share of
Norrell common shares, which dividend was declared on March 2, 1999 and was
payable April 1, 1999 to holders of record of Norrell common shares on March
17, 1999.
After the merger, there will be no transfers on the transfer books of
Norrell of Norrell common shares that were outstanding immediately before the
merger.
If your Norrell stock certificate has been lost, stolen or destroyed,
you will only be entitled to obtain Interim common shares or cash by making an
affidavit and, if required by Interim and the exchange agent, posting a bond in
an amount sufficient to protect Interim against claims related to your Norrell
stock certificate.
REPRESENTATIONS AND WARRANTIES
The merger agreement contains essentially reciprocal representations
and warranties made by each of us to the other, including representations and
warranties relating to:
o due organization, power and standing, and other corporate
matters;
o authorization, execution, delivery and enforceability of the
merger agreement;
o capital structure and securities;
o subsidiaries;
o conflicts under charter documents, violations of any
instruments or law, and required consents and approvals;
o documents filed with the SEC and the accuracy of the
information in those documents;
o liabilities;
o the absence of adverse changes and material adverse effects;
o material contracts;
o receipt of fairness opinions;
o compliance with applicable laws; and
o board recommendation of the transaction.
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COVENANTS
NORRELL. Norrell has agreed to operate its business only in the usual,
regular and ordinary course consistent with past practices before the merger
and to use its reasonable best efforts to preserve intact its business
organization, assets and maintain its rights and franchises.
In addition, Norrell has agreed that before the merger, unless Interim
agrees in writing or as otherwise permitted by the merger agreement, Norrell or
any of its subsidiaries will not:
o amend its articles of incorporation, by-laws or other
governing instrument;
o amend the terms of any indebtedness for borrowed money or
guarantee indebtedness;
o repurchase, redeem or otherwise acquire or exchange any
shares of its capital stock or any Norrell equity rights;
o declare or pay any dividend;
o issue, sell, pledge, encumber or authorize the issuance of
any additional shares of common shares, stock appreciation
rights, options, warrants or other equity rights other than
the issuance, delivery, grant or sale of common shares or
equity rights pursuant to the exercise or conversion of
equity rights outstanding as of March 24, 1999;
o adjust, split, combine, subdivide or reclassify its
outstanding shares of capital stock;
o sell, lease, mortgage or otherwise dispose of any of its or
its subsidiaries' property, capital stock or assets, other
than in the ordinary course of business consistent with past
practice;
o make any investments in or acquire any business;
o grant any increase in compensation or benefits to its
employees or officers, except in accordance with past
practice or as required by law;
o pay any severance, termination pay or any bonus other than
pursuant to written policies or contracts;
o enter into or amend any severance or change in control
agreements with its officers or employees;
o grant any increase in fees or other benefits to directors;
o voluntarily accelerate the vesting of any stock options or
other equity rights;
o enter into or amend any employment agreement except in the
ordinary course of business consistent with past practices;
o adopt any new employee benefit plan or adopt, terminate or
withdraw from any existing employee benefit plan;
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o make any significant change in any tax or accounting methods,
or systems of internal accounting controls, except as
required by generally accepted accounting principles or tax
laws or regulatory accounting requirements;
o commence any litigation or settle any litigation for money
damages in excess of $250,000;
o enter into, modify, amend or terminate any material contract,
if that action would adversely affect Norrell in a material
way; and
o elect or appoint any new officer or director other than in
the ordinary course of business.
INTERIM. Interim has agreed to conduct its business in all material
respects in the ordinary and usual course before the merger and to take all
necessary actions to promptly prepare and file a timely application, in
complete and proper form, with the New York Public Health Council for approval
of the acquisition by Interim of Norrell's healthcare business in New York
pursuant to the merger. This approval is necessary in conjunction with
Interim's acquisition, through the merger, of Norrell's health care business in
New York. The New York State of Department of Health has stated that based upon
Interim's representation that it intends to divest itself of the healthcare
business after the merger, it will not require Interim to submit applications
for approval of the change of control resulting from the merger before a buyer
is identified. See "The Merger -- Regulatory Matters" on page 52.
Interim has agreed that before we complete the merger, unless Norrell
agrees in writing or as otherwise permitted by the merger agreement, Interim
will not:
o amend its certificate of incorporation or by-laws in any
manner adverse to the holders of Norrell common shares as
compared to the rights of the holders of Interim common
shares;
o declare or pay any dividend or make any distribution in
respect of its capital stock, other than dividends payable
solely in Interim common shares and an issuance of rights
under its stockholder rights agreement;
o enter into, modify, amend, or terminate any material
contract, if that action would adversely affect Interim in a
material way; and
o cause or permit the New York Stock Exchange to no longer list
the Interim common shares.
We both have agreed to cooperate in the prompt preparation and filing
of documents under federal and state securities laws and with applicable
government authorities.
NO SOLICITATION OF TRANSACTIONS BY NORRELL
Norrell has agreed that it will not and will use its best efforts to
cause its officers and directors, employees, financial advisors, agents and
representatives not to solicit, initiate or encourage or participate in any
discussions or negotiations regarding an Acquisition Proposal, as defined
below. In the event Norrell receives an Acquisition Proposal, Norrell has
agreed to promptly notify Interim of the relevant terms of such Acquisition
Proposal and provide Interim a copy of any written Acquisition Proposal.
If, at any time, the Norrell Board of Directors determines in good
faith, after consultation with and upon the advice of outside counsel, that
failure to take the actions specified above would be reasonably likely to
constitute a breach of its fiduciary duties to its shareholders under
applicable law, then Norrell, in response to an Acquisition Proposal that (a)
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was unsolicited or that resulted from solicitation undertaken by Norrell prior
to March 24, 1999; and (b) is reasonably likely to lead to a Superior Proposal
(as defined below), may (x) furnish non-public information with respect to
Norrell to the person who made such Acquisition Proposal pursuant to a
customary confidentiality agreement and (y) participate in negotiations
regarding such Acquisition Proposal.
"Acquisition Proposal" means any inquiry or proposal with respect to a
merger, consolidation, share exchange or similar transaction involving Norrell
or any subsidiary of Norrell, or any purchase of all or any significant portion
of the assets of Norrell or any subsidiary of Norrell, or any equity interest
in Norrell or any subsidiary of Norrell, other than any other similar
transaction with Interim or any of its affiliates.
"Superior Proposal" means any proposal:
o made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than
50% of the combined voting power of the Norrell common shares
then outstanding or all or substantially all the assets of
Norrell;
o which the Norrell Board of Directors determines in its good
faith judgment after consultation with its financial advisor,
that such proposal, if accepted, is reasonably likely to be
consummated, taking into account all legal, financial and
regulatory aspects of the proposal and the person making the
proposal; and
o which would, if consummated, result in a more favorable
transaction than the merger with Interim, taking into
account, to the extent relevant, the long-term prospects and
interests of Norrell and its shareholders.
BOARDS' COVENANT TO RECOMMEND
Both of our Boards of Directors have agreed to recommend the merger to
our shareholders.
Unless, the Norrell Board of Directors has determined in good faith,
after consultation with and upon the advice of outside counsel, that failure to
do so would be reasonably likely to constitute a breach of its fiduciary duties
to Norrell's shareholders under applicable law, the Norrell Board of Directors
has agreed that it will not:
o withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Interim, its approval or recommendation of
the merger unless there is a Superior Proposal outstanding;
o approve or recommend, or propose to approve or recommend, an
Acquisition Proposal that is not a Superior Proposal; or
o cause Norrell to enter into any letter of intent, agreement
in principle, acquisition agreement or other agreement with
respect to an Acquisition Proposal that is not a Superior
Proposal.
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EMPLOYEE BENEFITS AND BENEFIT PLANS
Interim has agreed to provide employee benefits under employee benefit
and welfare plans to officers and employees of Norrell who become employees of
Interim on terms and conditions which, when taken as a whole with any benefits
provided by Norrell prior to the merger, are substantially similar to those
currently provided by Interim to its similarly situated officers and employees.
For purposes of participation, vesting and benefit accrual under Interim's
employee benefit plans, the service of the employees of Norrell prior to the
merger will be treated as service with Interim. All co-payments and deductibles
paid by any participant during 1999 with respect to any health or other
employee benefit plans will be credited for similar purposes under the
comparable Interim benefit plan. Interim also will honor, in accordance with
their terms, all employment, severance, consulting and other compensation
contracts between Norrell and any current or former director, officer, or
employee thereof, and all provisions for vested benefits or other vested
amounts earned or accrued through the effective time of the merger under any
employee benefit plans maintained by Norrell.
Interim will not be obligated to continue to employ any employee of
Norrell or its subsidiaries for any particular length of time, unless the terms
of any employment agreement requires Interim to do so.
INDEMNIFICATION AND INSURANCE
Interim has agreed that it will provide each director and officer of
Norrell with the following protection with respect to acts or omissions before
the merger:
o indemnity against damages and other costs incurred in
connection with any asserted claim or investigation; and
o directors' and officers' liability insurance coverage in
effect for five years.
After the merger, Interim has agreed to:
o indemnify each present and former director and officer, when
acting in said capacity, of Norrell or any of its
subsidiaries, against all costs or expenses, judgments,
fines, losses, claims, damages, or liabilities in connection
with any claim, action, suit, proceeding or investigation for
acts or omissions, existing or occurring before the merger;
Interim is not obligated to indemnify any such person to a
greater extent than such person is entitled to be indemnified
under the Articles of Incorporation or By-laws of Norrell or
under any indemnification agreement in effect between such
person and Norrell; and
o indemnify, defend and hold harmless each director of Norrell
against all liabilities arising out of the approval of the
merger.
For a period of five years after the merger, Interim has agreed to
maintain a policy of directors' and officers' liability insurance for acts and
omissions occurring before the merger with coverage in amount and scope not
materially less favorable than Norrell's existing directors' and officers'
liability insurance coverage. If the existing directors' and officers'
liability insurance expires or terminates or if the annual premium is more than
125% of the last annualized premium paid before March 24, 1999, Interim must
obtain directors' and officers' liability insurance in an amount and scope as
it can obtain for the remainder of that period for a premium not in excess, on
an annualized basis, of 125% of the last annualized premium paid before March
24, 1999.
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CONDITIONS
We are not required to complete the merger unless each of the
following conditions is met:
o the holders of a majority of the outstanding Norrell common
shares and the holders of a majority of the outstanding
Interim common shares have approved the merger;
o the holders of a majority of the Interim common shares cast
on the merger, if a quorum is present at the special meeting,
have approved the merger;
o all material consents and approvals to the merger have been
obtained;
o the waiting period applicable to the consummation of the
merger under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 has expired or terminated;
o there is no order, decree or injunction making the merger
illegal or otherwise prohibiting the completion of the
merger;
o the registration statement on Form S-4 of which this document
is a part is effective under the Securities Act of 1933;
o the Interim common shares to be issued pursuant to the merger
are duly approved for listing on the New York Stock Exchange;
and
o each party has received an opinion of its tax counsel that
the merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the
Code. If outside counsel for Norrell fails to deliver a tax
opinion to Norrell, then this condition may be satisfied by
the delivery of the tax opinion from outside counsel for
Interim to Norrell.
Additionally, the merger agreement obligates each party to complete
the merger only if, before the merger, the other party satisfies the following
conditions:
o the representations and warranties of the other party in the
merger agreement are true and correct as of the closing date
with the same force and effect as if made on and as of the
closing date, provided that representations which are
confined to a specified date will speak only as of such date;
o the other party has complied in all material respects with
all agreements and covenants required by the merger
agreement;
o the other party has delivered an officer's certificate
certifying the authorizing resolutions of its Board of
Directors and to the effect that certain conditions to the
merger have been satisfied; and
o the other party's financial advisor has reaffirmed in writing
its fairness opinion on the date of the mailing of this joint
proxy statement/prospectus to you and has not withdrawn the
fairness opinion prior to the completion of the merger.
TERMINATION
MUTUAL RIGHT TO TERMINATE. We may terminate the merger agreement and
abandon the merger at any time before we complete the merger by our mutual
written consent. Either of us may also terminate the merger agreement if:
o the merger does not occur by September 30, 1999, but that
right to terminate will not be available if the party
desiring to terminate has failed to fulfill any obligation
that has been the cause of the failure of the merger to occur
on or before September 30, 1999;
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o any of the conditions precedent to the obligations of such
party to consummate the merger cannot be satisfied or
fulfilled by September 30, 1999;
o any governmental entity issues a final and non-appealable
order making the merger illegal or permanently prohibiting
the merger;
o any of the representations, warranties, covenants or
agreements of the other party contained in the merger
agreement is materially breached, and the breach:
o is incapable of being cured or, if capable of being
cured, has not been cured within 30 days after
written notice is received by the party alleged to
be in breach; and
o would be reasonably likely, in the opinion of the
non-breaching party, to have a material adverse
effect on the breaching party;
o the shareholders of either Interim or Norrell fail to approve
the merger; or
o the average of the daily closing sale prices for Interim
common shares for the twenty full trading days ending on the
second trading day before the merger is less than $12.00.
INTERIM'S RIGHT TO TERMINATE. Interim may terminate the merger
agreement if the Norrell Board of Directors:
o withdraws or fails to reaffirm its approval of the merger to
the exclusion of any other Acquisition Proposal;
o resolves not to reaffirm the merger; or
o affirms, recommends or authorizes entering into any other
Acquisition Proposal or other transaction involving a merger,
share exchange, consolidation or transfer of substantially
all of the assets of Norrell.
NORRELL'S RIGHT TO TERMINATE. Norrell may terminate the merger
agreement if either:
o the Norrell Board of Directors withdraws or modifies its
approval or recommendation of the merger and the transactions
contemplated thereby while there is a Superior Proposal
outstanding;
o Norrell enters into any letter of intent, agreement in
principle, acquisition agreement or other agreement with
respect to an Acquisition Proposal that is a Superior
Proposal or with respect to which the Board of Directors
Norrell has determined, in good faith after consultation with
and upon the advice of outside counsel, that the failure to
enter into such letter of intent, agreement in principle,
acquisition agreement or other agreement would be reasonably
likely to constitute a breach of its fiduciary duties to
Norrell's shareholders under applicable law; or
o following the commencement, public proposal, public
disclosure or communication of an Acquisition Proposal to
Norrell, or the public disclosure or communication to Norrell
of the willingness of any person to make an Acquisition
Proposal, the requisite approval of Norrell's shareholders
for the merger is not obtained at the Norrell special
meeting.
The terms "Acquisition Proposal" and "Superior Proposal" have the
meanings set forth in "The Merger Agreement -- No Solicitation of Transactions
by Norrell" on page 57.
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TERMINATION FEES
The merger agreement obligates Norrell to pay Interim a termination
fee of $10 million plus Interim's actual documented fees and expenses incurred
in connection with the merger up to $1 million if:
o Interim terminates the merger agreement if the Norrell Board
of Directors withdraws or fails to reaffirm its approval of
the merger and the transactions contemplated thereby, to the
exclusion of any other Acquisition Proposal or resolves not
to reaffirm the merger, or affirms, recommends or authorizes
entering into any other Acquisition Proposal or other
transaction involving a merger, share exchange, consolidation
or transfer of substantially all of the assets of Norrell; or
o Norrell terminates the merger agreement if either:
o the Norrell Board of Directors withdraws or modifies
its approval or recommendation of the merger and the
transactions contemplated thereby while there is a
Superior Proposal outstanding;
o Norrell enters into any letter of intent, agreement
in principle, acquisition agreement or other
agreement with respect to an Acquisition Proposal
that is a Superior Proposal or with respect to which
the Norrell Board of Directors has determined, in
good faith after consultation with and upon the
advice of outside counsel, that the failure to enter
into such letter of intent, agreement in principle,
acquisition agreement or other agreement would be
reasonably likely to constitute a breach of its
fiduciary duties to Norrell's shareholders under
applicable law; or
o following the commencement, public proposal, public
disclosure or communications of an Acquisition
Proposal to Norrell, or the public disclosure or
communication to Norrell of the willingness of any
person to make an Acquisition Proposal, the
requisite approval of Norrell's shareholders for the
merger is not obtained at the Norrell special
meeting.
The terms "Acquisition Proposal" and "Superior Proposal" have the
meanings set forth in "The Merger Agreement -- No Solicitation of Transactions
by Norrell" on page 57.
OTHER EXPENSES
If the merger agreement is terminated by either party pursuant to any
of the other provisions of the merger agreement, that party is obligated to
reimburse the other party for its actual documented expenses incurred in
connection with the merger in an amount up to $1 million.
Unless a party is entitled to reimbursement or as otherwise provided
in the merger agreement, all costs and expenses incurred in connection with the
merger agreement and the transactions contemplated by the merger agreement
shall be paid by the party incurring these expenses.
The merger agreement provides that the following expenses will be
shared equally by us:
o the filing fee in connection with the Hart Scott-Rodino
Antitrust filings;
o the filing fee in connection with the filing of the
registration statement and this document with the SEC; and
o the expenses incurred in connection with printing and mailing
the registration statement of which this document is a part
and this document.
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<PAGE> 70
ASSIGNMENT, AMENDMENT AND WAIVER
The merger agreement may not be assigned by any party without the
prior written consent of the other parties.
The parties may amend the merger agreement before the merger, if the
amendment is in writing and signed by both parties. The conditions to each
party's obligation to consummate the merger may be waived by the other party in
whole or in part to the extent permitted by applicable law.
RIGHTS OF DISSENTING SHAREHOLDERS
Under the Delaware General Corporation Law and the Georgia Business
Corporations Code, Interim shareholders and Norrell shareholders will not have
any dissenters' rights of appraisal or other rights to demand fair value for
their shares by reason of the merger.
THE IRREVOCABLE PROXY AND MERGER CONSIDERATION ELECTION AGREEMENT
IRREVOCABLE PROXY
As an inducement to Interim to enter into the merger agreement, Guy W.
Millner, the principal shareholder and a director of Norrell, has given an
irrevocable proxy to Interim. The irrevocable proxy also includes MI Holdings
Inc. and Millner Preferred LLC. We refer to Mr. Millner and these other entities
together as the "Millner Shareholders." Under this irrevocable proxy, the
Millner Shareholders have agreed to vote all Norrell common shares held of
record by them to approve the merger. The irrevocable proxy terminates if the
Norrell Board of Directors withdraws its approval or recommendation of the
merger, or if the merger agreement is terminated. As of May 18, 1999, the
Millner Shareholders hold of record 9,389,349 Norrell common shares,
representing approximately 35% of the outstanding Norrell common shares. The
irrevocable proxy makes it likely that the merger will receive the required
approval of Norrell shareholders.
MERGER CONSIDERATION ELECTION AGREEMENT
As an inducement to Interim to enter into the merger agreement, Guy W.
Millner and an affiliate of Mr. Millner, have agreed, if cash elections are
made with respect to less than 10% of the issued and outstanding Norrell common
shares, to make cash elections with respect to that number of their Norrell
common shares which would cause at least 10% of the total merger consideration
to be paid in cash.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
After the merger, Raymond Marcy will continue as Chairman, Chief
Executive Officer and President of Interim. Roy G. Krause, will continue as
Executive Vice President and Chief Financial Officer of Interim. Robert E.
Livonius will continue as Executive Vice-President and Chief Operations Officer
of Interim. C. Douglas Miller, Chairman of the Board of Directors and Chief
Executive Officer of Norrell, and other executive officers of Norrell, will
remain with the combined companies for a transition period to be determined.
Upon completion of the merger, officers of Norrell will become officers of
Interim Merger Corporation, which will be renamed Norrell Corporation. The
combined company's headquarters will be in Ft. Lauderdale, Florida. The
headquarters for certain of Norrell's operations will remain in Atlanta,
Georgia for the near future. Interim presently intends to retain the office
names currently used by both companies, although the names of individual
offices may change, depending on their size, location and other factors.
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<PAGE> 71
When the merger occurs, Interim will appoint Guy W. Millner, or his
designee, to an existing vacancy on the Board of Directors. Mr. Millner, or his
designee will become a Class II director with a two-year term and will serve
until Interim's annual meeting of shareholders in 2001.
Each non-employee director of Interim is currently paid an annual cash
retainer of $25,000, plus fees of $2,000 for each board meeting and $1,500 for
each committee meeting attended. Directors who are employees of Interim receive
no compensation for service as directors. Under Interim's 1998 Stock Incentive
Plan, Interim annually grants to each of its non-employee directors options to
purchase 4,000 Interim common shares at an option price equal to the closing
price of the shares at the date of the grant. The options vest on the first
anniversary of the date of grant.
GUY W. MILLNER
Mr. Millner, age 62, has been a director of Norrell since 1961. Mr.
Millner served as Chairman of the Board of Directors since Norrell was founded
until October, 1997. From November 1983 until October 15, 1993, Mr. Millner
served as President and Chief Executive Officer of Norrell.
SHARE OWNERSHIP OF GUY W. MILLNER
As of May 18, 1999, Guy W. Millner was the beneficial owner of
9,511,098 shares of Norrell common shares. These totals include, as required by
the rules of the SEC, shares over which Guy W. Millner has sole or shared
voting power or power to sell. This figure also includes 30,146 Norrell common
shares issuable upon the exercise of stock purchase rights acquired under
Norrell's nonqualified deferred compensation plan and 91,603 Norrell common
shares held in Norrell's profit sharing plan.
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
HOW WE PREPARED THE PRO FORMA FINANCIAL INFORMATION
We are providing this information to show what the combined company
might have looked like had the merger been completed at the beginning of the
companies' fiscal years. This information has been derived by combining the
reported historical financial information of Interim and Norrell and making
adjustments to this information to reflect events that we assume would have
occurred because of the merger, such as increase in debt and interest expense
to fund the cash portion of the consideration to be paid by Interim in the
merger. Because the pro forma adjustments have been prepared by making
assumptions based only on known information currently available and these
assumptions do not include potential cost savings that may result from the
merger, it is likely that the combined company would have performed differently
had it been combined for the periods indicated. We recommend that you read this
pro forma information along with the financial information appearing under
"Selected Financial Data" on page 10 and the historical financial statements of
Interim and Norrell which are incorporated in this document by reference.
ACCOUNTING TREATMENT - PURCHASE METHOD
The merger is being accounted for using the purchase method of
accounting, which means that Norrell's tangible and intangible assets and
liabilities will be adjusted to their fair market values at the date of the
completion of the merger. Any excess consideration paid by Interim over the
fair market value of Norrell's net assets will be allocated to goodwill. We
will not make a final determination of the required purchase accounting
adjustments, including the amount recorded as goodwill, until after the merger
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<PAGE> 72
is completed. Therefore, the purchase accounting adjustments shown in this pro
forma financial information are preliminary. Assuming that the merger is
completed, the actual financial position and results of operations of the
combined company will differ, perhaps significantly, from the pro forma
information presented below.
PERIODS COVERED
Interim's fiscal year ends on the last Friday of December and
Norrell's fiscal year ends on the Sunday closest to October 31. In preparing
the unaudited pro forma balance sheet information as of March 26, 1999, we
combined Interim's March 26, 1999 data with Norrell's January 31, 1999 data. The
unaudited pro forma statement of earnings for 1998 has been prepared as if the
merger had been completed at the beginning of the companies' 1998 fiscal years,
and includes twelve months of information for both companies. Interim's results
are included for the fiscal year ended December 25, 1998 and Norrell's results
are for the fiscal year ended November 1, 1998. For the first quarter of 1999,
the unaudited pro forma statement of earnings includes Interim's results for the
three months ended March 26, 1999 and Norrell's results for the three months
ended January 31, 1999. After the merger, Norrell will change its reporting
periods to conform to Interim's reporting periods.
ASSUMPTIONS AS TO THE MERGER CONSIDERATION
The total merger consideration will not be known until just before the
merger closes since the amount of the cash portion of the consideration to be
paid by Interim in the merger is based on elections to be made by Norrell's
shareholders and on the average closing price of Interim common shares for the
20 trading days ending two days before the merger. In preparing the information
presented below, we have assumed that Interim's common shares will be trading at
$21.50 per share, or its closing price on May 20, 1999. We have also assumed
that Interim will issue Norrell shareholders a total of 22,639,000 Interim
common shares in the merger and Norrell's shareholders will only elect to
receive a total of $54.1 million in cash, which is the minimum cash payment to
be paid by Interim in the merger. This assumption results in greater dilution to
our pro forma earnings per share and is therefore the most conservative
assumption.
COST SAVINGS FROM THE MERGER
The pro forma adjustments do not reflect any operating efficiencies or
cost savings that we may achieve by combining our companies.
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<PAGE> 73
INTERIM UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(amounts in thousands)
As of March 26, 1999 (Interim) and January 31, 1999 (Norrell)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Combined
Interim Norrell Adjustments Pro Forma
------------- -------------- -------------- --------------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents............... $ 39,956 $ 8,012 -- $ 47,968
Receivables, net........................ 357,927 208,314 -- 566,241
Insurance deposits...................... 18,231 -- -- 18,231
Other current assets.................... 43,530 10,478 -- 54,008
------------ ------------- ------------- -------------
Total current assets............... 459,644 226,804 -- 686,448
Goodwill, net........................... 719,979 185,921 $ 350,383 (a) 1,256,283
Tradenames and other intangibles, net... 205,723 647 -- 206,370
Property and equipment, net............. 94,050 55,028 (21,400)(a) 127,678
Other assets............................ 58,056 28,287 5,750 (b) 92,093
------------ ------------- ------------- -------------
$ 1,537,452 $ 496,687 $ 334,733 $ 2,368,872
============ ============= ============= =============
Current Liabilities:
Current portion of long-term debt....... $ 24,882 $ 24,057 -- $ 48,939
Accounts payable and other accrued
liabilities............................ 110,683 39,350 $ 23,487 (a) 173,520
Accrued salaries, wages and payroll taxes 124,068 44,876 -- 168,944
Accrued self-insurance losses........... 33,592 10,388 -- 43,980
Accrued income taxes.................... 32,845 -- -- 32,845
------------ ------------- ------------- -------------
Total current liabilities.......... 326,070 118,671 23,487 468,228
------------ ------------- ------------- -------------
Long-term debt.......................... 441,455 91,817 54,081 (b) 594,028
6,675 (b)
Other long term liabilities............. 31,090 50,882 -- 81,972
Shareholders' equity.................... 738,837 235,317 (235,317)(c) 1,224,644
485,807 (c)
------------ ------------- ------------- -------------
$ 1,537,452 $ 496,687 $ 334,733 $ 2,368,872
============ ============= ============= =============
</TABLE>
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INTERIM UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(amounts in thousands, except per share amounts)
For the Twelve Months Ended December 25, 1998 (Interim)
and November 1, 1998 (Norrell)
<TABLE>
<CAPTION>
Previously
Reported
1998 Interim Plus Norrell
Historical Interim Pro Previous Historical Pro Forma Combined
Interim Forma Data (d) Pro Forma Norrell Adjustments Pro Forma
--------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C>
Revenues...................... $1,890,113 $ 215,872 $ 2,105,985 $1,410,518 -- $3,516,503
Cost of services.............. 1,255,319 136,969 1,392,288 1,091,985 -- 2,484,273
------------- ------------ ------------ ------------ ----------- -------------
Gross Profit.............. 634,794 78,903 713,697 318,533 -- 1,032,230
------------- ------------ ------------ ------------ ----------- -------------
Selling, general
and administrative expenses 432,281 60,744 493,025 213,410 $ (1,600)(e) 704,835
Licensee commissions.......... 50,791 (35) 50,756 36,504 -- 87,260
Amortization of intangibles... 22,550 4,397 26,947 4,640 8,750(f) 40,337
Interest expense.............. 23,819 11,743 35,562 5,102 5,120(g) 45,784
------------- ------------ ------------ ------------ ----------- -------------
529,441 76,849 606,290 259,656 12,270 878,216
------------- ------------ ------------ ------------ ----------- -------------
Earnings before income taxes
and extraordinary item. 105,353 2,054 107,407 58,877 (12,270) 154,014
Income taxes.................. 46,776 2,270 49,046 22,078 (1,372)(h) 69,752
------------- ------------ ------------ ------------ ----------- -------------
Earnings before
Extraordinary item..... $ 58,577 $ (216) $ 58,361 $ 36,799 $ (10,898) $ 84,262
============= ============ ============ ============ =========== =============
Earnings Per Share Before
Extraordinary Item:
Basic..................... $ 1.32 $ 1.35 $ 1.27
Diluted................... $ 1.29 $ 1.29 $ 1.24
Weighted Average Shares
Outstanding:
Basic..................... 44,237 27,205 66,574 (i)
Diluted................... 48,244 28,440 70,581 (i)
</TABLE>
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INTERIM UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(amounts in thousands, except per share amounts)
For the Three Months Ended March 26, 1999 (Interim) and
January 31, 1999 (Norrell)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Combined
Interim Norrell Adjustments Pro Forma
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues...................... $ 566,031 $ 354,619 -- $ 920,650
Cost of services.............. 377,686 274,481 -- 652,167
------------- ------------- ----------- -------------
Gross Profit.............. 188,345 80,138 -- 268,483
------------- ------------- ----------- -------------
Selling, general
and administrative expenses 135,577 57,872 $ (400)(e) 193,049
Licensee commissions.......... 11,714 8,876 -- 20,590
Amortization of intangibles... 6,874 1,382 2,190 (f) 10,446
Interest expense.............. 5,816 1,867 1,137 (g) 8,820
------------- ------------- ----------- -------------
159,981 69,997 2,927 232,905
------------- ------------- ----------- -------------
Earnings before income
taxes................... 28,364 10,141 (2,927) 35,578
Income taxes.................. 12,480 3,803 (287)(h) 15,996
------------- ------------- ----------- -------------
Net Earnings........... $ 15,884 $ 6,338 $ (2,640) $ 19,582
============= ============= ========== =============
Earnings Per Share:
Basic..................... $ 0.34 $ 0.24 $ 0.28
Diluted................... $ 0.33 $ 0.23 $ 0.28
Weighted Average Shares
Outstanding:
Basic..................... 47,386 26,273 70,025(i)
Diluted................... 53,318 27,156 75,957(i)
</TABLE>
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NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
a) The merger consideration and the associated calculation of the preliminary
intangible asset as of March 26, 1999 are as follows (amounts in
thousands):
<TABLE>
<CAPTION>
<S> <C>
Total consideration (27,949,000 shares x $21.50 per share x 0.9)............................ $540,813
Norrell debt assumed........................................................................ 115,874
Transaction costs included in accrued liabilities........................................... 4,795
--------
Total....................................................................................... 661,482
Less net assets purchased, including debt assumed........................................... 351,191
--------
Subtotal.................................................................................... 310,291
Plus preliminary purchase accounting adjustments:
Write down because of abandonment of capitalized software
costs to estimated fair market value................................................... 21,400
Accrued liabilities:
Severance and other personnel related costs........................................... 16,363
Termination of interest rate swaps.................................................... 2,329
--------
Total of items in accrued liabilities.............................................. 18,692
--------
Total preliminary goodwill.................................................................. $350,383
========
</TABLE>
Goodwill represents the excess of cost over book value of the net assets
acquired. The accrued liabilities above include severance for certain
executives. No estimate has been made in our pro forma financial
information for certain costs such as more broad based severance of
employees, office closures, employee relocation and other items that will
be incurred in the combination of the businesses. The amount of goodwill
will change, perhaps by as much as $50 million, once Interim completes its
final allocation of the merger consideration.
b) Represents additional borrowings of long-term debt to fund the cash portion
of the consideration to be paid by Interim in the merger and to fund
approximately $6.675 million in transaction costs to issue debt and
additional shares of Interim stock, including $5.75 million in costs
capitalized as other assets. This debt will be funded by additional
borrowings under Interim's amended and restated credit facility at an
assumed interest rate of 6.54% for 1998 and 5.58% for the first quarter of
1999, respectively, Interim's effective interest rates. See "The Merger -
Amendment of Existing Credit Facilities; Refinancing of Existing
Indebtedness" on page 53.
c) Represents the elimination of the existing Norrell equity balance and the
issuance of shares to complete the merger. This equity value was derived by
using the closing price of Interim common shares on May 20, 1999 of $21.50
per share.
d) This column combines previously reported financial information for
Interim's 1998 acquisitions and the related pro forma adjustments. See
Interim's 1998 Form 10-K (which is incorporated by reference) for further
information.
e) Represents the elimination of amortization expense associated with the
abandonment of Norrell management information system software which was
written down to its estimated fair value.
f) Represents amortization of the goodwill acquired in the merger over a
period of 40 years.
g) Represents interest expense on approximately $61 million estimated
borrowing under Interim's credit facility at the assumed rate of 6.54% for
1998 and 5.58% for the first quarter of 1999, respectively. This amount
also includes estimated debt issuance costs associated with an amendment to
increase the availability under the credit facility and an extension of the
term. The debt issuance costs are amortized on a straight-line basis over a
period of five years. The interest rate on borrowing under the credit
facility may differ from the assumption set forth in Note b above.
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h) Represents the tax impact of the pro forma adjustments using Interim's
statutory tax rate of 39%.
i) Represents basic and diluted weighted average outstanding Interim common
shares as of March 26, 1999 plus additional Interim common shares issued in
the merger as discussed in Note c above. Total dilutive securities for 1999
are comprised of Interim weighted average dilutive shares of 53,318,000
plus Norrell's dilutive shares of 22,639,000 (27,949,000 total Norrell
common shares exchanged at 0.9 Norrell common shares for each Interim
common share and assuming the 10% cash election). For 1998, total dilutive
securities are comprised of 48,244,000 Interim shares plus Norrell's
dilutive securities of 22,337,000 (27,577,000 shares exchanged at 0.9 and
assuming the 10% cash election).
DESCRIPTION OF INTERIM CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
Interim's authorized capital stock consists of 100,000,000 Interim
common shares, and 2,500,000 shares of preferred stock. At the Interim special
meeting, Interim will ask shareholders to authorize an increase in the number
of authorized common shares to 200,000,000.
INTERIM COMMON SHARES
The holders of Interim common shares are entitled to one vote for each
share on all matters voted on by the shareholders. The holders of Interim
common shares do not have any conversion, redemption or preemptive rights. The
holders of Interim common shares are entitled to dividends as declared by the
Interim Board of Directors. On liquidation, holders are entitled to receive on
a PRO RATA basis all assets of Interim available for distribution to the
holders. The rights and dividends upon liquidation may be junior to the rights
of holders of any preferred shares.
INTERIM PREFERRED SHARES
There are no Interim preferred shares outstanding. The Interim Board of
Directors is authorized to provide for the issuance of Interim preferred shares,
in one or more series, and to fix for each series:
o the designation and number of shares;
o the voting power of such shares;
o the dividend rights including the dividend rate, the dates of
payment of dividends on shares and the dates from which they
are cumulative;
o the redemption rights of Interim and the price or prices at
which shares may be redeemed;
o the amount or amounts payable on any voluntary or involuntary
liquidation or dissolution of Interim;
o the amount of the sinking fund, if any, to be applied to the
purchase or redemption of shares and the manner of its
application;
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o whether the shares will be made convertible into, or
exchangeable for, shares of any other class or classes or of
any other series of the same class of stock of Interim, and
if made so, on what terms;
o whether the issue of any additional shares of this series or
any future series or any other class of stock will have any
restrictions and, if so, the nature of these restrictions;
and
o any other designations, powers, preferences, rights,
qualifications, limitations and restrictions as are permitted
by the Delaware General Corporation Law.
In connection with a shareholders' rights plan, the Interim Board of
Directors authorized the issuance of up to 500,000 Interim preferred shares
designated as participating preferred shares.
PARTICIPATING PREFERRED SHARE PURCHASE RIGHTS
On February 17, 1994, Interim's Board of Directors adopted a
shareholder rights plan to protect shareholders in the event of an unsolicited
attempt to acquire Interim which is not believed by the Board of Directors to
be in the best interest of shareholders. Under the plan, a dividend of one
right (a "Right") per share was declared and paid on each share of Interim's
common stock outstanding on April 1, 1994. Rights will automatically attach to
shares issued after such date.
Under the plan, each holder of a Right may purchase from Interim one
one-hundredth of a share of Interim's Participating Preferred Stock at an
exercise price of $150.00, subject to adjustment, when the Rights become
exercisable. The Rights become exercisable when a person or group of persons
acquires 15% or more of the outstanding shares of Interim's common stock
without the prior written approval of Interim's Board of Directors (an
"Unapproved Stock Acquisition"), and after ten business days following the
commencement of a tender offer that would result in an Unapproved Stock
Acquisition. If a person or group of persons makes an Unapproved Stock
Acquisition, the registered holder of each Right has the right to purchase, for
the exercise price of the Right, a number of shares of Interim's common stock
having a market value equal to two times the exercise price of the Right.
Following an Unapproved Stock Acquisition, if Interim is involved in a merger,
or 50% or more of Interim's assets or earning power are sold, the registered
holder of each Right has the right to purchase, for the exercise price of the
Right, a number of shares of the common stock of the acquiring company having a
market value equal to two times the exercise price of the Right.
After an Unapproved Stock Acquisition, but before any person or group
of persons acquires 50% or more of the outstanding shares of Interim's common
stock, the Board of Directors may exchange all or part of the then outstanding
and exercisable Rights for common stock at an exchange ratio of one share of
common stock per Right. Upon any such exchange, the right of any holder to
exercise a Right terminates.
Interim may redeem the Rights at a price of $0.01 per Right at any
time before an Unapproved Stock Acquisition. The Rights expire on April 1,
2004, unless extended by the Board of Directors. Until a Right is exercised,
the holder thereof, as such, has no rights as a stockholder of the Company,
including the right to vote or to receive dividends. The issuance of the Rights
alone has no dilutive effect and does not affect reported earnings per share.
This summary is qualified by the full text of the shareholders' rights
plan. A copy of this plan is listed as an exhibit to the registration statement
and is incorporated in this document by reference.
INTERIM'S SHARE REPURCHASE PROGRAM
On April 2, 1999, Interim's Board of Directors authorized a share
repurchase program to allow Interim to purchase up to 3.3 million Interim common
shares. As of May 20, 1999, 3,005,300 Interim common shares have been
repurchased at an average price of $16.0455 per share.
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<PAGE> 79
Purchases have been made in open market transactions at prevailing
prices and through privately negotiated transactions. Interim has financed the
repurchases from working capital and borrowings under its existing credit
facilities.
The share repurchase program was implemented principally to acquire
shares which will be delivered to Norrell shareholders upon completion of the
merger.
COMPARATIVE RIGHTS OF SHAREHOLDERS
The rights of Norrell shareholders are currently governed by Georgia
law, the Norrell Articles of Incorporation and the Norrell Bylaws. Upon
completion of the merger, the rights of Norrell shareholders who become Interim
shareholders in the merger will be governed by Delaware law, the Interim
Certificate of Incorporation and the Interim Bylaws.
The following discussion is intended only to highlight certain
material differences between the rights of corporate shareholders under
Delaware law and Georgia law generally and specifically with respect to Interim
shareholders and Norrell shareholders pursuant to their respective charters and
bylaws. The discussion does not constitute a complete comparison of the
differences between the rights of such holders or the provisions of the
Delaware General Corporation Law ("DGCL"), the Georgia Business Corporation
Code ("GBCC"), the Norrell Articles of Incorporation and the Norrell Bylaws and
the Interim Certificate of Incorporation and the Interim Bylaws. Norrell
shareholders are referred to the GBCC, the Norrell Articles of Incorporation
and the Norrell Bylaws and the DGCL, the Interim Certificate of Incorporation
and the Interim Bylaws for detailed information regarding such differences.
ELECTION OF DIRECTORS
Under the GBCC, directors are elected at each annual shareholders
meeting unless their terms are staggered pursuant to the corporation's articles
of incorporation or a bylaw adopted by the shareholders. The articles of
incorporation may authorize the election of certain directors by one or more
classes or series of shares. The articles of incorporation or the bylaws also
may allow the shareholders or the board of directors to fix or change the
number of directors.
The Norrell Bylaws provide that the number of members of the Norrell
Board of Directors shall consist of not fewer than three nor more than fifteen
members. The Norrell Bylaws further provide for a staggered board of directors,
where directors are elected to serve for a term of three years. The GBCC
requires that as nearly as practicable, the term of one-third of the directors
of a corporation expire with each annual meeting of the shareholders. The
staggered term provision can be eliminated by a vote of two-thirds (2/3) of the
outstanding shares entitled to vote in an election of directors.
Under Georgia law, shareholders do not have cumulative voting rights
for the election of directors unless the articles of incorporation so provide.
The Norrell Articles of Incorporation do not provide for cumulative voting.
The DGCL also provides that directors, unless their terms are
staggered, will be elected at each annual shareholders meeting. The certificate
of incorporation may authorize the election of certain directors by one or more
classes or series of shares. The certificate of incorporation or the bylaws
also may allow the shareholders or the board of directors to fix or change the
number of directors, but a corporation must have at least one director.
Currently, the Interim Certificate of Incorporation provides that the number of
members of the Interim Board of Directors shall be nine, unless otherwise fixed
by resolution of the Board of Directors. The Interim Certificate of
Incorporation provides that the Board of Directors is classified into three
classes with each class elected in staggered elections and serving a three-year
term. Classification of directors makes it more difficult for shareholders to
change the composition of the board of directors and because the classified
director provision is contained in the Interim Certificate of Incorporation,
this classification cannot be eliminated by Interim shareholders without the
approval of Interim's directors. At least two annual meetings of shareholders,
instead of one, will generally be required to change the majority of the board
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of directors. If a company were confronted by a holder attempting to force a
proxy contest, a tender or exchange offer or other extraordinary corporate
transaction, this classification and time period would allow the board
sufficient time to review the proposal. The board would also have the
opportunity to review available alternatives to the proposal and to act in what
it believes to be the best interests of shareholders. These factors may have
the effect of deterring such proposals or make them less likely to succeed.
Under Delaware law, shareholders do not have cumulative voting rights
for the election of directors unless the certificate of incorporation so
provides. The Interim Certificate of Incorporation does not provide for
cumulative voting.
REMOVAL OF DIRECTORS
Under Georgia law, if the directors' terms are staggered, directors
may be removed only for cause by a majority of the votes entitled to be cast,
unless the articles of incorporation or a bylaw adopted by the shareholders
provides otherwise. However, if a director is elected by a particular voting
group of shareholders, that director may only be removed by the requisite vote
of that voting group. The Norrell Bylaws provide that directors may be removed
with or without cause, by a vote of sixty-six and two-thirds percent (66-2/3%)
of the outstanding shares entitled to vote in an election of directors.
The DGCL provides that, classified directors of a corporation may only
be removed for cause by the holders of a majority of the shares entitled to
vote at an election, unless the certificate of incorporation specifically
provides that such directors can be removed without cause or requires a greater
vote of shareholders. The Interim Certificate of Incorporation and the Interim
Bylaws contain no provisions that a director may be removed without cause.
Therefore, because director terms are staggered, directors of Interim may only
be removed for cause. The Interim Certificate of Incorporation provides that
the removal of a director requires the affirmative vote of the holders of
two-thirds (2/3) of the outstanding shares of each class of stock of Interim
entitled to vote in an election of directors.
VACANCIES ON THE BOARD OF DIRECTORS
The GBCC provides that vacancies on the board of directors may be
filled by the shareholders or directors, unless the articles of incorporation
or a bylaw approved by the shareholders provides otherwise. Under the Norrell
Bylaws, in case of a vacancy among the directors occurring for any reason,
including an increase in the number of directors, the remaining directors,
although less than a quorum, by an affirmative vote of a majority thereof, may
fill such vacancy and, if not filled by action of the directors, the vacancy
may be filled by the shareholders at any meeting held during the existence of
such vacancy. A director elected to fill a vacancy shall hold office for the
unexpired term of his or her predecessor, but under the GBCC a director elected
by the directors to fill a vacancy created by an increase in the number of
directors can only be elected for a term expiring at the next election of
directors by the shareholders.
Under Delaware law, unless the certificate of incorporation or bylaws
provide otherwise, the board of directors may fill any vacancy on the board,
including vacancies resulting from an increase in the number of directors. The
Interim Bylaws provide that any vacancy may be filled by the remaining
directors, although less than a quorum, by an affirmative vote of a majority
thereof or by a sole remaining director. If there are no directors in office,
then an election of directors may be held in the manner provided in the
statute. A director elected to fill a vacancy shall hold office for the
unexpired term of his or her predecessor, even though this term may be longer
than one year. In the case of a vacancy created by increasing the number of
directors, the newly elected director will hold office until the next election
of the class for which he or she was elected.
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ACTION BY WRITTEN CONSENT
Subject to compliance with certain requirements, the GBCC permits
shareholders of a Georgia corporation to act without a meeting only by
unanimous written consent of all shareholders entitled to vote on the action,
unless otherwise provided by the articles of incorporation. The Norrell
Articles of Incorporation do not provide for shareholder action by less than
unanimous written consent.
Delaware law provides that, unless limited by the certificate of
incorporation, any action that could be taken by shareholders at a meeting may
be taken without a meeting if a consent (or consents) in writing, setting forth
the action so taken, is signed by the holders of record of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. The Interim Certificate of Incorporation does
not limit shareholder action by written consent, and the Interim Bylaws
authorize shareholder action by less than unanimous consent.
AMENDMENTS TO CHARTER
Georgia law provides that only certain relatively technical amendments
to a corporation's articles of incorporation may be adopted by the directors
without shareholder action. Generally, the GBCC requires a majority vote of the
outstanding shares of each voting group entitled to vote to amend the articles
of incorporation, unless the GBCC, the articles of incorporation, or a bylaw
adopted by the shareholders requires a greater number of affirmative votes.
Under the Norrell Articles of Incorporation, unless approved by two-thirds
(2/3) of the directors then in office, the affirmative vote of the holders of
not less than sixty-six and two-thirds percent (66-2/3%) of the issued and
outstanding shares of common stock having the right to vote shall be required
to amend, modify, alter or repeal the provisions of the Norrell Articles of
Incorporation related to: (a) amendment of the Norrell Bylaws; (b) approval or
authorization of certain mergers and sales of assets; and (c) the evaluation of
offers from other parties to acquire the business of Norrell through tender
offer, merger or purchase of assets.
Under Delaware law, unless a higher vote is required in the
certificate of incorporation, an amendment to the certificate of incorporation
of a Delaware corporation generally may be approved by a majority of the
outstanding shares entitled to vote upon the proposed amendment. The Interim
Certificate of Incorporation requires the affirmative vote of the holders of
not less than two-thirds (2/3) of the outstanding shares of stock of Interim
entitled to vote in the election of directors in order to amend, modify, alter
or repeal the provisions of the Interim Certificate of Incorporation related
to: (a) the number and classification of directors; (b) calling of special
meetings of shareholders; and (c) amendments of these provisions in the Interim
Certificate of Incorporation.
AMENDMENTS TO BYLAWS
Under Georgia law, shareholder action is generally not necessary to
amend the bylaws, unless the articles of incorporation provide otherwise or the
shareholders in amending or repealing a particular bylaw provide expressly that
the board of directors may not amend or repeal that bylaw. The shareholders do,
however, have the right to amend, repeal or adopt bylaws, except for bylaws
that restrict the power of the board to manage the business. Subject to the
limitations described below, the Norrell Articles of Incorporation and the
Norrell Bylaws authorize the Norrell Board to amend the Norrell Bylaws by the
affirmative vote of a majority of all directors then in office and the Norrell
Articles of Incorporation and the Norrell Bylaws authorize shareholders to
amend the Norrell Bylaws upon the affirmative vote of the holders of not less
than a majority of the issued and outstanding shares entitled to vote in an
election of directors. The Norrell Articles of Incorporation require the
affirmative vote of the holders of at least two-thirds (2/3) of the issued and
outstanding shares entitled to vote in an election of directors in order to
amend any provision of the Norrell Bylaws regarding the number or classes of
directors or the removal of directors.
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Under Delaware law, the power to amend the bylaws of a corporation is
vested in the shareholders, but a corporation in its certificate of
incorporation may also confer such power upon the board of directors. Under the
Interim Certificate of Incorporation, the affirmative vote of the holders of at
least two-thirds (2/3) of the issued and outstanding shares entitled to vote in
an election of directors is required to amend, modify, alter or repeal any
provision of Interim's By-laws. The Certificate of Incorporation also states
that the Board of Directors may make, alter, amend, change, add to or repeal
the By-laws. Interim proposes to correct this inconsistency by asking that its
shareholders approve the proposal to delete the requirement of the affirmative
vote of the holders of at least two-thirds of the outstanding Interim common
shares to amend, modify, alter or repeal the By-laws.
SPECIAL MEETINGS OF SHAREHOLDERS
Under Georgia and Delaware law, special meetings of shareholders may
be called by the board of directors or by such other persons as are authorized
by the bylaws or articles or certificate of incorporation, as the case may be.
The GBCC provides that, except in the case of a corporation having 100 or fewer
shareholders of record, a special meeting may also be called by at least 25% or
such greater or lesser percentage of all the votes entitled to be cast at the
special meeting as may be provided in the corporation's articles of
incorporation or bylaws. The Norrell Bylaws provide that a special meeting of
shareholders may be called by the Chairman of the Board or the President, or by
the Chairman of the Board, the President or the Secretary when so directed by
the Board of Directors or at the request in writing of any two or more
directors, or at the request in writing of shareholders owning at least
twenty-five (25%) of the outstanding shares of Norrell entitled to vote in an
election of directors.
The Interim Bylaws and the Interim Certificate of Incorporation
provide that a special meeting may be called by a majority of the Interim
Board, by the Chairman of the Board or by the President of Interim. The Interim
shareholders are not entitled, as a matter of right, to require the Board of
Directors to call a special meeting of the shareholders or to bring any
business before a special meeting of the shareholders.
VOTE ON EXTRAORDINARY CORPORATE TRANSACTIONS
Under Georgia law, a sale or other disposition of all or substantially
all of the corporation's assets, a merger of the corporation with and into
another corporation, a share exchange involving one or more classes or series
of the corporation's shares or a dissolution of the corporation must be adopted
by the board of directors (except in certain limited circumstances) plus, with
certain exceptions, the affirmative vote of the holders of a majority of all
shares of stock entitled to vote thereon. Pursuant to the Norrell Articles of
Incorporation, the affirmative vote of the holders of not less than sixty-six
and two-thirds percent (66-2/3%) of the issued and outstanding stock having the
right to vote thereon is required to approve (a) a merger or consolidation of
Norrell with or into another corporation, or (b) sale, lease, exchange or other
disposition of all or substantially all of the assets of Norrell to or with any
other corporation, person or other entity, if the other party to the
transaction is the beneficial owner of 10% or more of the outstanding shares
entitled to vote in the election of directors. However, if the contemplated
transaction is approved and adopted by not less than sixty-six and two-thirds
percent (66-2/3%) of the members of the Norrell Board of Directors, then upon
such approval by the Board, only the affirmative vote of the holders of a
majority of the issued and outstanding stock entitled to vote is required to
approve the transaction. Furthermore, no special approval is required in a
merger or consolidation of Norrell with, or any sale or lease to Norrell of any
assets of, or any sale or lease by Norrell of any of its assets to, any
corporation of which a majority of the outstanding shares of all classes of
stock entitled to vote in an election of directors is owned of record or
beneficially owned by Norrell and its subsidiaries.
Delaware law provides that, unless a greater vote of shareholders is
required by a corporation's certificate of incorporation or unless the
provisions of Delaware law relating to "business combinations" discussed below
are applicable, a sale, lease or exchange of all or substantially all of the
corporation's assets, a merger or consolidation of the corporation with another
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corporation or a dissolution of the corporation requires the affirmative vote
of the board of directors, except in certain limited circumstances, plus, with
certain exceptions, the affirmative vote of a majority of the outstanding stock
entitled to vote thereon. The Interim Bylaws and Interim Certificate of
Incorporation are silent on the vote required for the approval of extraordinary
corporate transactions.
RIGHTS OF INSPECTION
The GBCC permits any shareholder who gives at least five business days
written notice to the corporation to have the right to inspect and copy, among
other things, (a) the articles of incorporation and the bylaws currently in
effect; (b) certain board of directors' and shareholders' resolutions; and (c)
the minutes of all shareholders' meetings and executed written consents
evidencing all action taken by shareholders without a meeting for the past
three years. Under Georgia law, a shareholder has a qualified right, subject to
any limitation by a corporation's articles of incorporation or bylaws for
shareholders owning two percent (2%) or less of the shares outstanding, to
inspect, among other things, (a) excerpts from minutes of any meeting of the
board of directors, records of action of a committee of the board of directors,
minutes of meetings of shareholders, and records of action taken by
shareholders or the board of directors without a meeting, to the extent not
subject to inspection under the mandatory inspection and copying provision; (b)
accounting records of the corporation; and (c) the record of shareholders. This
right is conditioned upon a demand made in good faith and for a proper purpose.
Under the DGCL, upon written demand under oath stating the proper
purpose thereof, any shareholder of record may inspect the stock ledger, a list
of its shareholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose means a purpose reasonably related to such
person's interest as a shareholder.
DIVIDENDS
Under the GBCC, Norrell is permitted to pay dividends or make other
distributions with respect to its stock unless, after giving effect to the
dividend or the other distribution, (a) the corporation would be unable to pay
its debts as they come due in the usual course of business or (b) the
corporation's total assets would be less than the sum of its total liabilities
plus any preferential liquidation amounts payable to shareholders whose
preferential rights on dissolution are superior to those of the shareholders
receiving the dividend. Norrell's Articles of Incorporation contemplate
preferential rights for its preferred stock with respect to dividends and
liquidation; however, no shares of preferred stock are outstanding.
Unless restricted by a corporation's certificate of incorporation,
Delaware law generally provides that a corporation may declare and pay
dividends out of "surplus" or, when no surplus exists, out of net profits for
the fiscal year in which the dividend is declared and/or the preceding fiscal
year, except that dividends may not be paid out of net profits if the net
assets of the corporation are less than the amount of capital represented by
the issued and outstanding stock of all classes having a preference upon the
distribution of assets. Subject to the requirement to satisfy any preferential
dividends or other rights of shares of Interim preferred stock, the Interim
Certificate of Incorporation and Interim Bylaws do not restrict the payment of
dividends on outstanding shares of Interim.
APPRAISAL RIGHTS OF DISSENTING SHAREHOLDERS
Georgia law provides that shareholders who comply with certain
procedural requirements of the GBCC are entitled to dissent from and obtain
payment of the fair value of their shares in the event of mergers, share
exchanges, sales or exchanges of all or substantially all of the corporation's
assets, amendments to the articles of incorporation that materially and
adversely affects certain rights in respect of a dissenter's shares and certain
other actions taken pursuant to a shareholder vote to the extent provided for
under the GBCC, the articles of incorporation, bylaws or a resolution of the
board of directors. However, unless the corporation's articles of incorporation
provide otherwise, appraisal rights are not available: (a) to holders of shares
of any class of shares not entitled to vote on the transaction; (b) in a sale
of all or substantially all of the property of the corporation pursuant to
court order; (c) in a sale of all or substantially all of the corporations
assets for cash, where all or substantially all of the net proceeds of such
sale will be distributed to the shareholders within one year; or (d) to holders
of shares which at the record date were either listed on a national securities
exchange or held of record by more than 2,000 shareholders, unless: (1) in the
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case of a plan of merger or share exchange, the holders of shares of the class
or series are required under the plan of merger or share exchange to accept for
their shares anything except shares of the surviving corporation or a publicly
held corporation which at the effective date of the merger or share exchange
are either listed on a national securities exchange or held of record by more
than 2,000 shareholders, except for scrip or cash payments in lieu of
fractional shares; or (2) the articles of incorporation or a resolution of the
board of directors approving the transaction provides otherwise. Holders of
Norrell common shares are not entitled to appraisal rights in connection with
the merger.
Like the GBCC, the DGCL provides shareholders of a Delaware
corporation with appraisal rights in connection with merger and consolidations
generally, provided the shareholder complies with certain procedural
requirements of the DGCL. However, this right to demand appraisal does not
apply to shareholders if: (1) they are shareholders of the surviving
corporation and a vote of the shareholders of such corporation is not necessary
to authorize the merger or consolidation; or (2) the shares held by the
shareholders are of a class or series registered on a national securities
exchange, designated as a national market system security on an interdealer
quotation system by the NASD or are held of record by more than 2,000
shareholders, in each case on the record date set to determine the shareholders
entitled to vote on the merger or consolidation. Notwithstanding the above,
appraisal rights are available for the shares of any class or series of stock
of a Delaware corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation to accept for their stock anything
except: (a) shares of stock of the corporation surviving or resulting from the
merger or consolidation; (b) shares of stock of any other corporation which at
the effective date of the merger or consolidation will be listed on a national
securities exchange, designated as a national market system security on an
interdealer quotation system by the NASD or held of record by more than 2,000
shareholders; (c) cash in lieu of fractional shares of the corporations
described in (a) and (b); or (d) any combination of the shares of stock and
cash in lieu of fractional shares described in (a), (b) and (c).
A Delaware corporation may provide in its certificate of incorporation
that appraisal rights shall be available for the shares of any class or series
of its stock as the result of an amendment to its certificate of incorporation,
any merger or consolidation to which the corporation is a party, or a sale,
lease or exchange of all or substantially all of the assets of the corporation.
The Interim Certificate of Incorporation contains no such provision. Interim
shareholders are not entitled to dissenters' or appraisal rights in connection
with the merger.
Appraisal rights under Georgia law differ from appraisal rights under
Delaware law in that, under Georgia law, shareholders have appraisal rights for
more types of transactions than under Delaware law, and unlike the appraisal
rights provisions under Delaware law, under Georgia law the board of directors
may voluntarily extend appraisal rights to shareholders. In addition, Georgia
law provides that, if a shareholder is entitled to exercise appraisal rights,
those rights constitute the shareholder's exclusive remedy in the absence of
fraud or failure to comply with certain procedural requirements.
LIABILITY OF DIRECTORS
Both the GBCC and the DGCL allow a corporation to limit the personal
liability of directors with certain similar exceptions. Georgia law does not
authorize the elimination or limitation of monetary liability for a director in
the event of (a) misappropriation of corporate business opportunities; (b)
intentional misconduct or knowing violation of the law; (c) unlawful
distributions; or (d) any transaction in which such director receives an
improper personal benefit. The Norrell Articles of Incorporation, limit the
personal liability of directors for monetary damages to the fullest extent
permissible under the GBCC, provided the director acted in good faith and in a
manner which he or she believed to be in the best interest of the corporation.
The Interim Certificate of Incorporation provides that, to the fullest
extent permitted by the DGCL, no director of Interim shall be personally liable
to Interim or its shareholders for monetary damages for breach of fiduciary
duty as a director. The DGCL allows a corporation to limit in this manner the
personal liability of a director, except for liability for (a) any breach of
the director's duty of loyalty to the corporation or its shareholders; (b) acts
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or omissions not in good faith which involve intentional misconduct or a
knowing violation of law; (c) an unlawful payment of a dividend or an unlawful
stock purchase or redemption; or (d) any transaction from which the director
derived an improper personal benefit.
INDEMNIFICATION OF DIRECTORS AND OFFICERS; DIRECTORS' AND OFFICERS' INSURANCE
An officer who is also a director shall be subject to this standard if
the sole basis on which the officer is made a party to the proceeding is an act
or omission solely as an officer.
The GBCC permits a corporation to indemnify an individual for any
liability and reasonable expense that may be incurred in connection with or
resulting from any threatened, pending or completed civil, criminal,
administrative or investigative action, suit or proceeding (whether brought by
or in the right of the corporation or otherwise), in which he or she may become
involved because he or she is or was a director or officer of the corporation;
provided, that such individual acted in good faith and reasonably believed (a)
in the case of conduct in his or her official capacity, that such conduct was
in the best interests of the corporation and (b) in all other cases other than
a criminal proceeding, that such conduct was at least not opposed to the best
interests of the corporation. In the case of a criminal proceeding, such
individual can be indemnified only if he or she had no reasonable cause to
believe that such conduct was unlawful. Under the GBCC, absent shareholder
approval, directors may not be indemnified in connection with (a) a proceeding
by or in the right of the corporation in which such individual is adjudged
liable to the corporation, or (b) any other proceeding with respect to conduct
for which such director was adjudged liable on the basis that he or she
received an improper personal benefit. The Norrell Bylaws provide that
directors and officers shall be indemnified to the maximum extent permitted by
the GBCC.
Prior to indemnifying a director under the GBCC, a determination must
be made that the director has met the relevant standard of conduct. Such
determination must be made by: (a) a majority vote of a quorum consisting of
directors not at that time parties to the suit; (b) a duly designated committee
of directors; (c) duly selected special legal counsel; or (d) a vote of the
shareholders, excluding shares owned by or voted under the control of directors
who are at the time parties to the suit.
The GBCC also allows a Georgia corporation to indemnify directors made
a party to a proceeding without regard to the above-referenced limitations, if
authorized by the articles of incorporation or a bylaw, contract, or resolution
duly adopted by a vote of the shareholders of the corporation by a majority of
votes entitled to be cast, excluding shares owned or voted under the control of
the director or directors who are not disinterested, and to advance funds to
pay for or reimburse reasonable expenses incurred in the defense thereof,
subject to restrictions similar to the restrictions described in the preceding
paragraph; provided, however, that the corporation may not indemnify a director
adjudged liable: (1) for any appropriation, in violation of his or her duties,
of any business opportunity of the corporation; (2) for acts or omissions which
involve intentional misconduct or a knowing violation of law; (3) for unlawful
distributions; or (4) for any transaction from which he or she received an
improper personal benefit.
Under the GBCC, a corporation may indemnify an officer because he or
she is an officer of the corporation to the same extent as a director, and, if
the individual (a) is not also a director, or (b) if also a director and the
sole basis on which the individual is made a party to the proceeding is an act
or omission solely as an officer, to such further extent as provided in the
articles of incorporation, bylaws or resolution of the board of directors;
provided, however, that the corporation may not indemnify an officer adjudged
liable: (1) for any appropriation, in violation of his or her duties, of any
business opportunity of the corporation; (2) for acts or omissions which
involve intentional misconduct or a knowing violation of law; (3) for unlawful
distributions; or (4) for any transaction from which he or she received an
improper personal benefit.
Under Delaware law, a corporation may indemnify any person made a
party or threatened to be made a party to any type of proceeding (other than an
action by or in the right of the corporation) because he or she is or was an
officer, director, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation or entity, against expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred in connection with such
proceeding: (1) if he or she acted in good faith and in a manner he or she
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reasonably believed to be in or not opposed to the best interests of the
corporation, or (2) in the case of a criminal proceeding, he or she had no
reasonable cause to believe that his or her conduct was unlawful. A corporation
may indemnify any person made a party or threatened to be made a party to any
threatened, pending or completed action or suit brought by or in the right of
the corporation because he or she is or was an officer, director, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other entity, against expenses actually and reasonably incurred in connection
with such action or suit if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation, except that there may be no such indemnification if the person is
found liable to the corporation unless, in such a case, the court determines
the person is entitled thereto. A corporation must indemnify a present or
former officer or director against expenses actually and reasonably incurred by
him or her who successfully defends himself or herself in a proceeding to which
he or she was a party because he or she is or was an officer or director of the
corporation.
Prior to indemnifying a director or officer, a determination must be
made that such person has met the applicable standard of conduct. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, by (a) a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum; (b) by a committee of such directors designated by majority
vote of such directors, even though less than a quorum; (c) if there are no
such directors, or if such directors so direct, by independent legal counsel in
a written opinion; or (d) by the shareholders. The Interim Certificate of
Incorporation and the Interim Bylaws authorize indemnification of its officers
and directors to the fullest extent permitted by Delaware law.
Under both Georgia and Delaware law, a corporation may advance
expenses to directors and officers as long as any director or officer receiving
an advance undertakes to repay the amounts advanced if it is ultimately
determined that such director or officer was not entitled to be indemnified.
PREEMPTIVE RIGHTS
Neither Delaware law nor Georgia law -except in limited instances-
provides for preemptive rights to acquire a corporation's unissued stock.
However, such right may be expressly granted to the shareholders in a
corporation's certificate or articles of incorporation. Neither the Norrell
Articles of Incorporation nor the Interim Certificate of Incorporation provides
for preemptive rights.
SPECIAL REDEMPTION PROVISIONS
Under the GBCC, a corporation may acquire its own shares of capital
stock, subject to the requirement that at all times the corporation must have
authorized: (a) at least one or more classes of shares that together have
unlimited voting rights; and (b) at least one or more classes of shares (which
may be the same class or classes as those with unlimited voting rights) that
together are entitled to receive the net assets of the corporation upon
dissolution. In addition, a corporation's acquisition of its own shares of
capital stock is deemed a "distribution" under Georgia law and, accordingly, is
subject to the restrictions on dividends and other distributions set forth in
the corporation's articles of incorporation and the GBCC.
Under the DGCL, a corporation may purchase or, if so provided in the
corporation's certificate of incorporation, redeem shares of any class of its
capital stock, but subject generally to the availability of sufficient lawful
funds therefor and provided that at all times, at the time of any such
redemption, the corporation generally must have outstanding shares of one or
more classes or series of capital stock which have full voting rights that are
not subject to redemption.
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SHAREHOLDER SUITS
Under Georgia law, a shareholder may institute a lawsuit against one
or more directors, either on his own behalf, or derivatively on behalf of the
corporation. As noted previously, Georgia law contains a provision allowing a
corporation, through a provision in its articles of incorporation, to limit or
eliminate the personal liability of a director to the corporation or its
shareholders for monetary damages for any action taken, or any failure to take
any action, as a director, except in certain circumstances.
Under Delaware law, a stockholder may institute a lawsuit against one
or more directors, either on his own behalf, or derivatively on behalf of the
corporation. An individual stockholder may also commence a lawsuit on behalf of
himself or herself and other similarly situated stockholders when the
requirements for maintaining a class action under Delaware law have been met.
As noted previously, the DGCL enables a corporation in its certificate of
incorporation to eliminate or limit, and the Interim Certificate of
Incorporation eliminates, the personal liability of a director to the
corporation and its stockholders for monetary damages for violations of the
director's fiduciary duty, except (a) for any breach of a director's duty of
loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) for liability pursuant to the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (d) for any transaction from which a director derived an
improper personal benefit.
BUSINESS COMBINATION RESTRICTIONS
Under Georgia law, Georgia corporations may adopt a provision
requiring that certain business combinations be approved by a special vote of
the board of directors and/or the shareholders unless certain fair pricing
criteria are met. Georgia corporations may also adopt a provision which
requires that business combinations with interested shareholders be approved by
a super-majority vote. In accordance with the provisions of the GBCC, the
restrictions imposed by these statutes do not apply unless a corporation elects
to be covered by them. These provisions have been adopted by Norrell and are
described below, as well as the business combination restriction contained in
the Norrell Articles of Incorporation.
Georgia's fair price statute prohibits certain business combinations
between a Georgia corporation and an interested shareholder, unless certain
requirements are met. Generally, for purposes of this statute, "business
combinations" are defined to include mergers, sales of 10% or more of the
corporation's assets out of the ordinary course of business, liquidations, and
certain issuances of securities involving the corporation and any interested
shareholder. For purposes of this statute, an "interested shareholder" is
defined as a person or entity that is the beneficial owner of 10% or more of
the voting power of the corporation's voting stock, or a person or entity that
is an affiliate of the corporation and, at any time within the two-year period
immediately prior to the date in question, was the beneficial owner of 10% or
more of the voting power of the corporation's voting stock. To satisfy
Georgia's fair price statute, a business combination with an interested
shareholder must meet one of three criteria: (a) the transaction must be
approved unanimously by the "continuing directors" - directors who served as
directors immediately prior to the date the interested shareholder first became
an interested shareholder and who are not affiliates or associates of the
interested shareholder or his affiliates, - provided that the continuing
directors constitute at least three members of the board of directors at the
time of such approval; (b) the transaction must be recommended by at least
two-thirds of the continuing directors and approved by a majority of the votes
entitled to be cast by holders of voting shares, excluding shares beneficially
owned by the interested shareholder who is, or whose affiliate is, a party to
the business combination; or (c) the terms of the transaction must meet
statutory fair pricing criteria and certain other tests intended to assure that
all shareholders receive a fair price and equivalent consideration for their
shares regardless of when they sell to the acquiring party. The Georgia fair
price statute is designed to inhibit unfriendly acquisitions that do not
satisfy the specified fair price requirements.
Georgia's business combination statute authorizes a "resident domestic
corporation" to adopt a provision which prohibits business combinations with
interested shareholders occurring within five years of the date a person first
becomes an interested shareholder, unless special approval of the transaction
is obtained. For purposes of this statute, business combination is defined to
include mergers, sales of 10% or more of the corporation's net assets, and
certain issuances of securities, all involving the corporation and any
interested shareholder. Interested shareholder has the same definition as under
the Georgia fair price statute. With limited exceptions, any business
combination with an interested shareholder within five years of the date such
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person first became an interested shareholder requires approval in one of three
ways: (a) prior to such person becoming an interested shareholder, the
corporation's board of directors must have approved the business combination or
the transaction which resulted in the shareholder becoming an interested
shareholder; (b) the interested shareholder must acquire at least 90% of the
outstanding voting stock of the corporation (other than shares owned by
officers, directors and their affiliates and associates) in the same
transaction in which such person becomes an interested shareholder; or (c)
subsequent to becoming an interested shareholder, such person acquires
additional shares resulting in ownership of at least 90% of the outstanding
shares (other than shares owned by officers, directors and their affiliates and
associates), and obtains the approval of the business combination by the
holders of a majority of the shares entitled to vote thereon, exclusive of the
shares held beneficially by the interested shareholder and its affiliates (and
shares owned by officers, directors and their affiliates and associates).
The Norrell Articles of Incorporation provide that a person or entity
which is a party to (a) a merger or consolidation of Norrell with or into
another corporation, or (b) sale, lease, exchange or other disposition of all
or substantially all of the assets of Norrell to or with any other corporation,
person or other entity and is the beneficial owner, directly or indirectly, of
ten (10%) or more of the issued and outstanding shares of Norrell entitled to
vote in an election of directors, such transaction requires the affirmative
vote of the holders of not less than sixty-six and two-thirds percent (66-2/3%)
of the issued and outstanding stock having the right to vote thereon. However,
if the contemplated transaction is approved and adopted by not less than
sixty-six and two-thirds percent (66-2/3%) of the members of the Norrell Board
of Directors, then upon such approval by the Board, only the affirmative vote
of the holders of a majority of the issued and outstanding stock is required to
approve the transaction. A "beneficial owner" of any shares of Norrell is
defined to mean any corporation, person or other entity (a) over which it has
sole or shared voting or investment power; or (b) which it has the right to
acquire, pursuant to any agreement or understanding or upon exercise of
conversion rights, warrants or options or otherwise; or (c) which are
beneficially owned, directly or indirectly by an "affiliate" or "associate" (as
those terms are defined in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect on January 1, 1984) of
the other corporation, person or entity; or (d) which are beneficially owned,
directly or indirectly by any other corporation, person or entity with which it
or its "affiliate" or "associate" (as defined above) has any agreement or
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of shares of the corporation.
In general, Section 203 of the DGCL prevents an "interested
shareholder" (defined generally as a person beneficially owning 15% or more of
a corporation's outstanding voting stock, with the exception of any person who
owned and has continued to own shares in excess of the 15% limitation since
December 23, 1987) from engaging in a "business combination" with a Delaware
corporation for three years following the date such person became an interested
shareholder. The term "business combination" includes mergers or consolidations
with an interested shareholder and certain other transactions with an
interested shareholder, including, without limitation: (a) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition - except
proportionately as a shareholder of such corporation - to or with the
interested shareholder of assets having an aggregate market value equal to 10%
or more of the aggregate market value of all assets of the corporation or of
certain subsidiaries thereof determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the corporation; (b) any
transaction which results in the issuance or transfer by the corporation or by
certain subsidiaries thereof of stock of the corporation or such subsidiary to
the interested shareholder, except pursuant to certain transfers in a
conversion or exchange or a PRO RATA distribution to all shareholders of the
corporation or certain other transactions, none of which increases the
interested shareholder's proportionate ownership of any class or series of the
corporation's or such subsidiary's stock; (c) any transaction involving the
corporation or certain subsidiaries thereof which has the effect, directly or
indirectly, of increasing the proportionate share of the stock of any class or
series, or securities convertible into stock of the corporation or any
subsidiary which is owned by the interested shareholder (except as a result of
immaterial changes due to fractional share adjustments or as a result of any
purchase or redemption of any shares of stock not caused directly or indirectly
by the interested shareholder); or (d) any receipt by the interested
shareholder of the benefit (except proportionately as a shareholder of such
corporation) of any loans, advances, guarantees, pledges, or other financial
benefits provided by or through the corporation or certain subsidiaries.
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The three-year moratorium may be avoided if: (a) before such person
became an interested shareholder, the Board of Directors of the corporation
approved either the business combination or the transaction in which the
interested shareholder became an interested shareholder; or (b) upon
consummation of the transaction which resulted in the shareholder becoming an
interested shareholder, the shareholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
shares held by directors who are also officers of the corporation and by
employee stock plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer); or (c) on or following the date on which such person
became an interested shareholder, the business combination is approved by the
Board of Directors of the corporation and authorized at an annual or special
meeting of shareholders (not by written consent) by the affirmative vote of the
shareholders of at least 66 2/3% of the outstanding voting stock of the
corporation not owned by the interested shareholder.
The business combination restrictions described above do not apply if,
among other things: (a) the corporation's original certificate of incorporation
contains a provision expressly electing not to be governed by the statute; (b)
the corporation by action by the holders of a majority of the voting stock of
the corporation adopts an amendment to its certificate of incorporation or
bylaws expressly electing not to be governed by the statute, which amendment
shall not be applicable to any business combination with a person who was an
interested shareholder at or prior to the time of the amendment; or (c) the
corporation does not have a class of voting stock that is (a) listed on a
national securities exchange; (b) authorized for quotation on NASDAQ or a
similar quotation system; or (c) held of record by more than 2,000
shareholders. The statute also does not apply to certain business combinations
with an interested shareholder when such combination is proposed after the
public announcement of, and before the consummation or abandonment of, a merger
or consolidation, a sale of 50% or more of the aggregate market value of the
assets of the corporation on a consolidated basis or the aggregate market value
of all outstanding shares of the corporation, or a tender offer for 50% or more
of the outstanding voting shares of the corporation, if the triggering
transaction is with or by a person who either was not an interested shareholder
during the previous three years or who became an interested shareholder with
Board of Director approval or during the period when such restrictions were
inapplicable to the corporation, and if the transaction is approved or not
opposed by a majority of the current directors who were also directors prior to
any person becoming an interested shareholder during the previous three years
or were recommended for election or elected to succeed such directors by a
majority of such directors. Interim is subject to the terms of this statute.
SHAREHOLDERS' RIGHTS AGREEMENT
Interim has a shareholders' rights agreement. For a detailed discussion
of Interim's rights agreement, see "Description of Interim Capital Stock --
Participating Preferred Share Purchase Rights" on page 71.
Norrell does not have a shareholders' rights agreement.
ADVANCE NOTICE FOR NOMINATION OF DIRECTORS AND SHAREHOLDER PROPOSALS
The Interim Bylaws provide that a shareholder desiring to propose
business at an annual meeting of shareholders, including the nomination of any
person for election as a director, must give written notice to the Secretary of
Interim setting forth (a) a brief description of the business desired to be
brought before the annual meeting and the reasons therefor; (b) the name and
record address of the shareholder proposing such business; (c) the class and
number of shares of Interim that are beneficially owned by the shareholder; and
(d) any material interest of the shareholder in such business. To be timely,
the shareholder's notice must be delivered to Interim not less than 50 days nor
more than 75 days prior to the meeting; provided, however, that if fewer than
65 days' notice or prior public disclosure of the date of the meeting is given
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or made to shareholders, notice by the shareholder, to be timely, must be so
received not later than the 15th day following the day on which such notice of
the date of the annual meeting was mailed or such public disclosure was made.
The Norrell Bylaws do not contain specific provisions addressing advance notice
for nominations of directors or the bringing of shareholder proposals.
OTHER INTERIM PROPOSALS
INTERIM PROPOSAL TO AMEND ITS CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED COMMON SHARES
Interim's Board of Directors has approved an amendment to Interim's
Certificate of Incorporation to increase the number of authorized common shares
from 100,000,000 to 200,000,000. Interim's Board of Directors is submitting
this amendment for shareholder approval at the Interim special meeting.
The proposal to increase the number of Interim authorized common
shares is conditioned on the completion of the merger. The merger is not
conditioned on approval of the proposal to increase Interim's authorized common
shares, and Interim has sufficient authorized but unissued shares for delivery
in connection with the merger even if the proposal is not approved.
Upon the completion of merger, Interim estimates that it will have
more than 90,000,0000 common shares issued or reserved for issuance. The
approximately 10,000,000 authorized common shares remaining available for
issuance are not considered adequate for Interim's future possible
requirements. For example, there would not be sufficient authorized but
unissued common shares to fully fund Interim's existing shareholders' right
plan with common shares. While the shareholders rights plan could be funded by
Interim's authorized preferred shares, Interim's Board of Directors believes
that it is advisable to increase the number of authorized common shares in
order to provide the ability to fully fund the shareholders' rights plan with
common shares.
Additionally, although Interim currently has no specific plans to use
the additional authorized common shares, Interim's Board of Directors believes
that it is prudent to increase the number of authorized common shares to the
proposed level in order to provide for a reserve of shares available for
issuance in connection with possible future actions. Such actions may include,
but are not limited to, equity financings, business acquisitions, corporate
mergers, establishing strategic relationships with corporate partners, funding
employee benefit plans, stock splits or stock dividends, and other general
corporate purposes. Currently there are no plans, agreements or arrangements in
place requiring the utilization of these additional common shares for any such
purposes. However, having such additional authorized common shares available
for issuance would allow the Board of Directors to issue shares in the future
without the delay and expense associated with seeking shareholder approval at
such time. Elimination of the delays and expense occasioned by the necessity of
obtaining shareholder approval will better enable Interim, among other things,
to engage in financing transactions and acquisitions as well as to take
advantage of changing market and financial conditions on a more competitive
basis, as determined by Interim's Board of Directors.
The additional common shares to be authorized by adoption of the
amendment would have rights identical to the currently outstanding common
shares. Adoption of the proposed amendment and the future issuance of the
common shares would not affect the rights of the holders of currently
outstanding common shares, except for effects incidental to increases in the
number of outstanding shares of the common shares at the time of any such
issuances. Any future issuance of common shares will be subject to the rights
of the holders of any outstanding shares of any preferred stock which Interim
may issue in the future.
Approval of this proposal requires the affirmative vote of the holders
of a majority of the outstanding Interim common shares.
THE INTERIM BOARD UNANIMOUSLY RECOMMENDS THAT INTERIM SHAREHOLDERS
VOTE "FOR" THIS PROPOSAL.
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INTERIM PROPOSAL TO AMEND ITS CERTIFICATE OF INCORPORATION TO DELETE THE
REQUIREMENT OF THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST TWO-THIRDS OF
THE OUTSTANDING INTERIM COMMON SHARES TO AMEND, MODIFY, ALTER OR REPEAL ANY
PROVISION OF THE BY-LAWS.
Interim's Board of Directors has approved an amendment to Interim's
Certificate of Incorporation to correct an inconsistency in the Certificate of
Incorporation by deleting the requirement of the affirmative vote of the
holders of at least two-thirds of the outstanding Interim common shares to
amend, modify, alter or repeal any provision of the By-laws. Interim's Board of
Directors is submitting this amendment for shareholder approval at the Interim
special meeting.
The Certificate of Incorporation currently includes two separate and
inconsistent provisions regarding the amendment of the By-laws. One provision
provides that the affirmative vote of the holders of at least two-thirds of the
outstanding Interim common shares is required to amend, modify, alter or repeal
any provision of the By-laws. The other provision provides that the Board of
Directors has the power to make, alter, amend, change, add to or repeal the
By-laws. The Interim Board of Directors believes that a two-thirds shareholder
approval requirement to amend, modify, alter or repeal any provision of the
By-laws unduly restricts the Board's ability to timely effectuate necessary
alterations to the By-laws. Interim has no present plan to amend, modify, alter
or repeal the By-laws.
If this proposal is approved, the Interim shareholders will be able,
under Delaware law, to amend, modify, alter, or repeal the By-laws upon the
approval of a majority of issued and outstanding Interim common shares and the
Interim Board of Directors will be able to make, alter, amend, change, add to
or repeal the By-laws.
This proposal is not conditioned on the completion of the merger. The
merger is not conditioned on approval of this proposal.
Approval of this proposal requires the affirmative vote of the holders
of at least two-thirds of the outstanding Interim common shares.
THE INTERIM BOARD UNANIMOUSLY RECOMMENDS THAT INTERIM SHAREHOLDERS
VOTE "FOR" THIS PROPOSAL.
LEGAL MATTERS
Baker & McKenzie, Miami, Florida will pass upon the validity of the
issuance of Interim common shares being offered by this document. Baker &
McKenzie, Miami, Florida, will be delivering an opinion concerning federal
income tax consequences of the merger to Interim shareholders. Alston & Bird
LLP, Atlanta, Georgia will be delivering an opinion concerning federal income
tax consequences of the merger to Norrell shareholders. See "The Merger --
Certain U.S. Federal Income Tax Consequences" on page 50.
EXPERTS
The financial statements and the related financial statements schedule
incorporated in this prospectus by reference from Interim's Annual Report on
Form 10-K for the year ended December 25, 1998 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements of Norrell appearing in
Norrell's Annual Report on Form 10-K, incorporated by reference in this
document have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein, in reliance upon the authority of said firm as experts in
giving said reports.
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WHERE YOU CAN FIND MORE INFORMATION
Interim has filed with the SEC a registration statement under the
Securities Act that registers the distribution to Norrell shareholders of
Interim common shares to be issued in the merger. The registration statement,
including the attached exhibits and schedules, contains additional relevant
information about Interim and Norrell. The rules and regulations of the SEC
allow us to omit some information included in the registration statement from
this document.
In addition, we file reports, proxy statements and other information
with the SEC under the Exchange Act. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. You may read and copy this
information at the following locations of the SEC:
<TABLE>
<CAPTION>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, including
Interim and Norrell, which file electronically with the SEC. The address of
that site is http://www.sec.gov. You can also inspect reports, proxy statements
and other information about each of us at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
document. This means that the companies can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is considered to be a part of this
document except for any information that is superseded by information that is
included directly in this document.
This document incorporates by reference the documents listed below
that we have previously filed with the SEC. They contain important information
about our companies and their financial condition. Some of these filings have
been amended by later filings, which are also listed.
<TABLE>
<CAPTION>
INTERIM SEC FILINGS (FILE NO. 0-23198) PERIOD/AS OF DATE
- -------------------------------------- -----------------
<S> <C>
Annual Report on Form 10-K December 25, 1998 (as of March 16, 1999)
Quarterly Reports on Form 10-Q March 26, 1999 (as of May 10, 1999)
Current Reports on Form 8-K March 24, 1999 (as of March 30, 1999)
Registration Statements Form 8-A dated January 11, 1994 setting
forth a description of Interim common shares
(as amended by a Form 8-A/A dated July 15, 1996;
and a Form 8-A/A dated July 30, 1996);
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Form 8-A dated January 11, 1994
setting forth a description of the
Preferred Stock Purchase Rights (as
amended by a Form 8-A/A dated July
15, 1996; a Form 8-A/A dated July
30, 1996; a Form 8-A/A dated
February 28, 1997; a Form 8-A/A
dated November 4, 1997; and a Form
8-A/A dated January 23, 1998)
NORRELL SEC FILINGS (FILE NO. 1-14018)
- --------------------------------------
Annual Report on Form 10-K November 1, 1998 (as of January 8, 1999)
Quarterly Reports on Form 10-Q January 31, 1999 (as of March 17, 1999)
Current Reports on Form 8-K March 24, 1999 (as of March 30, 1999)
</TABLE>
We incorporate by reference additional documents that either company
may file with the SEC between the date of this document and the dates of the
Interim special meeting and the Norrell special meeting. These documents
include periodic reports, including Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.
You can obtain any of the documents incorporated by reference in this
document through Interim or Norrell, as the case may be, or from the SEC
through the SEC's web site at the address provided above. Documents
incorporated by reference are available from the companies without charge,
excluding any exhibits to those documents unless the exhibit is specifically
incorporated by reference as an exhibit in this document. You can obtain
documents incorporated by reference in this document by requesting them in
writing or by telephone from the appropriate company at the following
addresses:
Interim Services Inc, Norrell Corporation
Deirdre Skolfield Barbara Marxer
Investor Relations Director Investor Relations
2050 Spectrum Boulevard 3535 Piedmont Road, N.E.
Fort Lauderdale, Florida 33309 Atlanta, Georgia 30305
(954) 489-6225 (404) 240-3000
If you would like to request documents, please do so by June 24, 1999
to receive them before the special meetings. If you request any incorporated
documents from us, we will mail them to you by first class mail, or another
equally prompt means, within one business day after we receive your request.
We have not authorized anyone to give any information or make any
representation about the merger or our companies that differs from, or adds to,
the information in this document or in our documents that are publicly filed
with the SEC. Therefore, if anyone does give you different or additional
information, you should not rely on it.
If you are in a jurisdiction where it is unlawful to offer to exchange
or sell, or to ask for offers to exchange or buy, the securities offered by
this document or to ask for proxies, or if you are a person to whom it is
unlawful to direct these activities, then the offer presented by this document
does not extend to you.
The information contained in this document speaks only as of its date
unless the information specifically indicates that another date applies.
Information in this document about Interim has been supplied by Interim, and
information about Norrell has been supplied by Norrell.
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTERIM SERVICES INC.,
INTERIM MERGER CORPORATION
AND
NORRELL CORPORATION
DATED AS OF MARCH 24, 1999
<PAGE> 95
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C> <C>
PREAMBLE.................................................................. A-1
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER............................. A-1
1.1 Merger...................................................... A-1
1.2 Time and Place of Closing................................... A-1
1.3 Effective Time.............................................. A-1
ARTICLE 2 -- TERMS OF MERGER.............................................. A-2
2.1 Charter..................................................... A-2
2.2 Bylaws...................................................... A-2
2.3 Directors and Officers...................................... A-2
ARTICLE 3 -- MANNER OF CONVERTING SHARES.................................. A-2
3.1 Conversion of Shares........................................ A-2
3.2 Shares Held by Norrell or Interim........................... A-4
3.3 Fractional Shares........................................... A-4
3.4 Conversion of Stock Options................................. A-4
3.5 Anti-Dilution Provisions.................................... A-4
3.6 Withholding................................................. A-4
ARTICLE 4 -- EXCHANGE OF SHARES........................................... A-4
4.1 Exchange Procedures......................................... A-4
4.2 Rights of Former Norrell Stockholders....................... A-5
ARTICLE 5 -- REPRESENTATIONS OF NORRELL................................... A-5
5.1 Organization, Standing, and Power........................... A-5
5.2 Authority of Norrell; No Breach By Agreement................ A-5
5.3 Capital Stock............................................... A-6
5.4 Norrell Subsidiaries........................................ A-6
5.5 SEC Filings; Financial Statements........................... A-7
5.6 Absence of Undisclosed Liabilities.......................... A-7
5.7 Absence of Certain Changes or Events........................ A-7
5.8 Material Contracts.......................................... A-8
5.9 Contract Provisions......................................... A-8
5.10 Compliance with Laws........................................ A-8
5.11 Statements True and Correct................................. A-8
5.12 Opinion of Financial Advisor................................ A-9
5.13 Board Recommendation........................................ A-9
ARTICLE 6 -- REPRESENTATIONS OF INTERIM................................... A-9
6.1 Organization, Standing, and Power........................... A-9
6.2 Authority; No Breach By Agreement........................... A-9
6.3 Capital Stock............................................... A-10
6.4 Interim Subsidiaries........................................ A-10
6.5 Statements True and Correct................................. A-10
6.6 Authority of Sub............................................ A-11
6.7 Board Recommendation........................................ A-11
6.8 SEC Filings; Financial Statements........................... A-11
6.9 Compliance with Laws........................................ A-12
6.10 Absence of Undisclosed Liabilities.......................... A-12
6.11 Absence of Certain Changes or Events........................ A-12
6.12 Material Contracts.......................................... A-12
6.13 Opinion of Financial Advisor................................ A-12
</TABLE>
A-i
<PAGE> 96
<TABLE>
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PAGE
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<S> <C> <C> <C>
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION..................... A-12
7.1 Affirmative Covenants of Norrell............................ A-12
7.2 Negative Covenants of Norrell............................... A-13
7.3 Affirmative Covenants of Interim............................ A-14
7.4 Negative Covenants of Interim............................... A-14
7.5 Adverse Changes in Condition................................ A-15
7.6 Reports..................................................... A-15
ARTICLE 8 -- ADDITIONAL AGREEMENTS........................................ A-15
8.1 Applications; Antitrust Notification........................ A-15
8.2 Filings with State Offices.................................. A-16
8.3 Public Health Council....................................... A-16
8.4 Agreement as to Efforts to Consummate....................... A-16
8.5 Confidentiality............................................. A-16
8.6 Press Releases.............................................. A-17
8.7 No Solicitation by Norrell.................................. A-17
8.8 Employee Benefits and Contracts............................. A-18
8.9 Indemnification............................................. A-18
8.10 Registration Statement; Proxy Statement..................... A-19
8.11 Norrell Shareholders' Meeting............................... A-20
8.12 Interim Shareholders' Meeting............................... A-20
8.13 Exchange Listing............................................ A-20
8.14 Access to Information....................................... A-20
8.15 Accounting and Tax Treatment................................ A-20
8.16 Interim's Accountant's Letters.............................. A-20
8.17 Norrell's Accountant's Letters.............................. A-21
8.18 Director Seat............................................... A-21
8.19 Tax Opinions................................................ A-21
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............ A-21
9.1 Conditions to Obligations of Each Party..................... A-21
9.2 Conditions to Obligations of Interim........................ A-22
9.3 Conditions to Obligations of Norrell........................ A-23
ARTICLE 10 -- TERMINATION................................................. A-24
10.1 Termination................................................. A-24
10.2 Effect of Termination....................................... A-25
10.3 Non-Survival of Representations and Covenants............... A-25
ARTICLE 11 -- MISCELLANEOUS............................................... A-25
11.1 Definitions................................................. A-25
11.2 Expenses.................................................... A-30
11.3 Brokers and Finders......................................... A-31
11.4 Entire Agreement............................................ A-31
11.5 Amendments.................................................. A-31
11.6 Waivers..................................................... A-31
11.7 Assignment.................................................. A-32
11.8 Notices..................................................... A-32
11.9 Governing Law............................................... A-33
11.10 Counterparts................................................ A-33
11.11 Captions; Articles and Sections............................. A-33
11.12 Interpretation.............................................. A-33
11.13 Enforcement of Agreement.................................... A-33
11.14 Severability................................................ A-33
SIGNATURES................................................................ A-34
</TABLE>
A-ii
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 24, 1999, by and among NORRELL CORPORATION ("Norrell"), a
Georgia corporation; INTERIM MERGER CORPORATION ("Sub"), a Delaware corporation;
and INTERIM SERVICES INC. ("Interim"), a Delaware corporation.
PREAMBLE
The respective Boards of Directors of Norrell, Interim and Sub are of the
opinion that the transactions described herein are in the best interests of the
parties to this Agreement and their respective shareholders. This Agreement
provides for the merger of Norrell with Interim pursuant to the merger of
Norrell with and into Sub. At the effective time of such merger, each
outstanding share of the capital stock of Norrell will be converted into the
right to receive the Merger Consideration, as set forth herein. As a result,
Norrell will continue to conduct its business and operations as a wholly owned
subsidiary of Interim. The transactions described in this Agreement are subject
to the approvals of the shareholders of each of Interim and Norrell, expiration
of the required waiting period under the HSR Act, and the satisfaction of
certain other conditions described in this Agreement.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, Norrell will be merged with and into Sub in accordance with the
provisions of Section 252 of the DGCL, and in accordance with the provisions of
Section 14-2-1101 et. seq. of the GBCC (the "Merger"). Sub will be the Surviving
Corporation resulting from the Merger and will be a wholly owned Subsidiary of
Interim and will continue to be governed by the Laws of the State of Delaware.
The Merger will be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of Norrell,
Sub and Interim and by Interim, as the sole shareholder of Sub.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs, or at such other time as the Parties, acting
through their authorized officers, may mutually agree, at the offices of Alston
& Bird LLP in Atlanta, Georgia or at such other location as may be mutually
agreed upon by the Parties.
1.3 EFFECTIVE TIME. Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
Party, the Parties will use their reasonable efforts to cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware and the
Articles of Merger to be filed with the Secretary of State of the State of
Georgia on the first business day following the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, (ii) the date on which all conditions
required pursuant to Article 9 herein have been satisfied or waived, (iii) the
date on which the shareholders of Norrell approve this Agreement, (iv) the date
on which the shareholders of Interim approve this Agreement, and (v) the date on
which all other approvals required by the Articles of Incorporation and Bylaws
of Norrell and the Certificate of Incorporation and Bylaws of each of Interim
and Sub are obtained. The Merger and other transactions contemplated by this
Agreement will become effective on the later to occur of the date and at the
time (a) the Certificate of Merger reflecting the Merger is filed with the
Secretary of State of the State of Delaware, and (b) the Articles of Merger
reflecting the Merger are filed with the Secretary of State of the State of
Georgia (the "Effective Time").
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ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. At the Effective Time, the Certificate of Incorporation of
Sub shall be amended to change the name of Sub to Norrell Corporation. From and
after the Effective Time, the Certificate of Incorporation of Sub, as so
amended, will be the Certificate of Incorporation of the Surviving Corporation
until duly amended or repealed.
2.2 BYLAWS. The Bylaws of Sub in effect immediately prior to the Effective
Time will be the Bylaws of the Surviving Corporation until duly amended or
repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Sub in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, will serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Norrell in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, will serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of Interim, Norrell, Sub or the shareholders of any of the foregoing:
(a) Each share of capital stock of Interim issued and outstanding
immediately prior to the Effective Time will remain issued and outstanding
from and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding from and after
the Effective Time
(c) Each share of Norrell Common Stock, excluding shares held by any
Norrell Entity or any Interim Entity, issued and outstanding immediately prior
to the Effective Time will cease to be outstanding and will be converted into
and exchanged for the right to receive 0.9 share of Interim Common Stock
(the "Merger Shares"), subject to Section 3.1(d) below.
(d) Notwithstanding Section 3.1(c) above, and subject to Sections
3.1(e) and (f), each share of Norrell Common Stock, excluding shares held by
any Norrell Entity or Interim Entity, issued and outstanding immediately
prior to the Effective Time may, in lieu of the Merger Shares and at the
election of such holder in accordance with Section 3.1(e), be exchanged for
the right to receive a cash payment equal to the greater of (i) 0.9 times
the Base Period Trading Price or (ii) $16.00 (the "Cash Payment") with
respect to all or such lesser number of such holder's shares of Norrell
Common Stock that is a whole multiple of 100 shares (such an election is
hereinafter referred to as a "Cash Election" and the shares of Norrell Common
Stock with respect to which a Cash Election is made are hereinafter referred
to as the "Cash Election Shares").
(e) An election form (the "Election Form") and other appropriate and
customary transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of Norrell Common Stock shall pass only upon proper
delivery of such certificates to the Exchange Agent and such other matters as
Interim shall reasonably require) in such form as Interim and Norrell shall
mutually agree shall be mailed at the same time as the Proxy is mailed to the
Norrell Shareholders or on such other date as Norrell and Interim shall
mutually agree ("Mailing Date") to each holder of record of Norrell Common
Stock as of five business days prior to the Mailing Date ("Election Form Record
Date").
Each Election Form shall permit the holder of Norrell Common Stock (or
the beneficial owner thereof through appropriate and customary documentation and
instructions) to elect to receive only the
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Cash Payment, in lieu of the Merger Shares, with respect to Cash Election
Shares, subject to reductions in the number of Cash Election Shares as set
forth in Section 3.1(f).
Any Norrell Common Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have submitted to the Exchange
Agent, an effective, properly completed Election Form on or before 5:00 p.m.,
on the 20th day following the Mailing Date (or such other time and date as
Interim and Norrell may mutually agree) (the "Election Deadline") shall be
exchanged for the Merger Shares in accordance with Section 3.1(c).
Interim shall make available one or more Election Forms as may be
reasonably requested by all persons who become holders (or beneficial owners)
of Norrell Common Stock between the Election Form Record Date and close of
business on the business day prior to the Election Deadline, and Norrell shall
provide to the Exchange Agent all information reasonably necessary for it to
perform as specified herein.
Any such Cash Election shall have been properly made only if the
Exchange Agent shall have actually received a properly completed Election Form
by the Election Deadline. An Election Form shall be deemed properly completed
only if accompanied by one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such certificates or the
guaranteed delivery of such certificates) representing all shares of Norrell
Common Stock covered by such Election Form, together with duly executed
transmittal materials included in the Election Form. Any Election Form may be
revoked or changed by the person submitting such Election Form at or prior to
the Election Deadline. In the event an Election Form is revoked prior to the
Election Deadline, the shares of Norrell Common Stock represented by such
Election Form shall be treated as if no Cash Election had been made with
respect thereto. Subject to the terms of this Agreement and of the Election
Form, the Exchange Agent shall have reasonable discretion to determine whether
any election, revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Form, and any good faith decisions
of the Exchange Agent regarding such matters shall be binding and conclusive.
Neither Interim nor the Exchange Agent shall be under any obligation to notify
any person of any defect in an Election Form.
(f) Within five (5) calendar days after the Election Deadline, the
Exchange Agent shall determine the aggregate number of Cash Election Shares as
as to which a Cash Election was timely and properly made. If: (a) the number
of Cash Election Shares would, but for the provisions of this Section 3.1(f),
result in the sum of (i) the aggregate amount of the Cash Payments plus
(ii) all payments made since March 24, 1996 by any Norrell Entity in connection
with extraordinary dividends or the purchase or redemption of Norrell Common
Stock (the sum of the amounts determined pursuant to clauses (a)(i) and
(a)(ii) is referred to herein in the aggregate as the "Deemed Cash Purchase
Price"), to exceed 49% (the "Percentage Maximum") of the sum of (x) the
aggregate amount of the Deemed Cash Purchase Price plus (y) the aggregate fair
market value of the Merger Shares; OR (b) the aggregate amount of the Cash
Payments would, but for the provisions of this Section 3.1(f), exceed $175
million (the "Maximum Cash Payment"); then the aggregate number of Cash
Election Shares shall be reduced to the highest number of Cash Election Shares
that causes neither the Percentage Maximum nor the Maximum Cash Payment to be
exceeded (the "Maximum Cash Election Shares"), with each Cash Election being
reduced to the number of Cash Election Shares determined by multiplying (a) the
number of such holder's Cash Election Shares originally subject to such Cash
Election by (b) a fraction, (i) the numerator of which is the Maximum Cash
Election Shares and (ii) the denominator of which is the aggregate number of
Cash Election Shares originally subject to all Cash Elections. For purposes of
this Section 3.1(f), the fair market value of a Merger Share shall be equal to
the closing price of a share of Interim Common Stock on the New York Stock
Exchange on the trading day immediately preceding the day on which the Effective
Time occurs. The number of shares of Norrell Common Stock that remain subject to
such Cash Election after the foregoing reduction shall be deemed converted into
and exchanged for the right to receive the Cash Payment as provided in
Section 3.1(d). The Cash Election as to any shares of Norrell Common Stock that
represent the amount by which any Cash Election is reduced as a result of the
application of this Section 3.1(f) shall be deemed revoked, and such shares
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shall remain converted into and exchanged for the right to receive the Merger
Shares as provided in Section 3.1(c).
3.2 SHARES HELD BY NORRELL OR INTERIM. Each of the shares of Norrell
Common Stock held by any Norrell Entity or by any Interim Entity, other than the
shares of Common Stock of the Surviving Corporation into which shares of Sub
Common Stock are converted as provided in Section 3.1(b), will be cancelled and
retired at the Effective Time and no consideration will be issued in exchange
therefor.
3.3 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Norrell Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Interim Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Interim
Common Stock multiplied by the Base Period Trading Price. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional share.
3.4 CONVERSION OF STOCK OPTIONS. At the Effective Time, each option or
other right to purchase shares of Norrell Common Stock pursuant to stock options
or stock appreciation rights ("Norrell Options") granted by Norrell under the
Norrell Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, will be converted into an option or right to purchase 0.9 shares of
Interim Common Stock for each share of Norrell Common Stock subject to such
option or right at the exercise or purchase price per share equal to (i) the
exercise price per share in effect under such option or right immediately prior
to the Effective Time, divided by (ii) 0.9, and otherwise on substantially the
same terms and conditions, including the terms under which such option or rights
are exercisable, as in effect under such options or right immediately prior to
the Effective Time. If the terms under which any such options or right are
exercisable are based upon or measured by performance or characteristics of
Norrell or any Norrell Entity, then unless the terms of such option or right
provide for the acceleration of the exercisability of such option or right upon
the occurrence of the transaction provided for herein, such terms of exercise
shall be replaced by terms of measurement or performance that shall, as nearly
as possible, afford to the holder of such option or right the same opportunity
for the exercise of such option or right as existed immediately prior to the
Effective Time.
3.5 ANTI-DILUTION PROVISIONS. In the event Interim changes the number of
shares of Interim Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.6 WITHHOLDING. Interim or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Norrell Common Stock such amounts as Interim or the
Exchange Agent is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law. To the extent amounts are so withheld by Interim or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Norrell Common Stock in respect
of which such deduction and withholding was made by Interim or the Exchange
Agent. Amounts withheld as herein permitted shall be paid timely to appropriate
taxing authorities.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Interim and
Norrell will cause the bank or trust company selected by Interim as the exchange
agent (the "Exchange Agent") to mail to each holder of record of a certificate
or certificates which represented shares of Norrell Common Stock immediately
prior to the Effective Time (the "Certificates") appropriate transmittal
materials and instructions (which will specify that delivery will be effected,
and risk of loss and title to such Certificates will pass, only upon proper
delivery of such Certificates to the Exchange Agent). The Certificate or
Certificates so delivered will be duly endorsed as the Exchange Agent may
require. In the event of a transfer of ownership of shares of Norrell Common
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Stock represented by Certificates that are not registered in the transfer
records of Norrell, the Merger Consideration may be issued to a transferee if
the Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
satisfactory to the Exchange Agent that any applicable stock transfer taxes have
been paid. If any Certificate has been lost, stolen, mislaid or destroyed, upon
receipt of (i) an affidavit of that fact from the record holder of a Certificate
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as Interim and the Exchange Agent may reasonably
require and (iii) any other documents necessary to evidence and effect the bona
fide exchange thereof, the Exchange Agent will issue to such holder the Merger
Consideration into which the shares represented by such lost, stolen, mislaid or
destroyed Certificate will have been converted. The Exchange Agent may establish
such other reasonable and customary rules and procedures in connection with its
duties as it may deem appropriate. After the Effective Time, each holder of
shares of Norrell Common Stock (other than shares to be canceled pursuant to
Section 3.2) issued and outstanding at the Effective Time will surrender the
Certificate or Certificates representing such shares to the Exchange Agent and
will promptly upon surrender thereof receive in exchange therefor the Merger
Consideration. Interim will not be obligated to deliver the Merger Consideration
to which any former holder of Norrell Common Stock is entitled as a result of
the Merger until such holder surrenders such holder's Certificate or
Certificates for exchange as provided in this Section 4.1. Any other provision
of this Agreement notwithstanding, neither Interim, the Surviving Corporation
nor the Exchange Agent will be liable to a holder of Norrell Common Stock for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar Law. Approval
of this Agreement by the shareholders of Norrell will constitute ratification of
the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER NORRELL SHAREHOLDERS. At the Effective Time, the
stock transfer books of Norrell will be closed as to holders of Norrell Common
Stock immediately prior to the Effective Time and no transfer of Norrell Common
Stock by any such holder will thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate theretofore representing shares of Norrell Common Stock (other than
shares to be canceled pursuant to Section 3.2) will from and after the Effective
Time represent for all purposes only the right to receive the Merger
Consideration in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay (if not theretofore paid by Norrell) the
quarterly dividend in the amount of $0.04 per share of Norrell Common Stock,
which dividend was declared on March 2, 1999, and is payable April 1, 1999 to
holders of record of Norrell Common Stock on March 17, 1999 (the "Declared
Dividend").
ARTICLE 5
REPRESENTATIONS OF NORRELL
Norrell hereby represents to Interim as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Norrell is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its material Assets. Norrell is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Norrell Material Adverse Effect. The minute books and other
organizational documents for Norrell have been made available to Interim for its
review and, except as disclosed in Section 5.1 of the Norrell Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments to the organizational documents and all proceedings of the Board of
Directors and shareholders thereof.
5.2 AUTHORITY OF NORRELL; NO BREACH BY AGREEMENT.
(a) Except as disclosed in Section 5.2(a) of the Norrell Disclosure
Memorandum, Norrell has all requisite corporate power and authority, and has
taken all corporate action necessary, to execute, deliver,
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and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby, subject only to the approval of this Agreement
and the transactions contemplated hereby by the holders of a majority of the
outstanding shares of Norrell Common Stock, and to the receipt of any required
approvals by any Regulatory Authority. This Agreement represents a legal, valid,
and binding obligation of Norrell, enforceable against Norrell in accordance
with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Except as disclosed in Section 5.2(b) of the Norrell Disclosure
Memorandum, neither the execution and delivery of this Agreement by Norrell, nor
the consummation by Norrell of the transactions contemplated hereby, nor
compliance by Norrell with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Norrell's Articles of Incorporation or
Bylaws or the certificate or articles of incorporation or bylaws of any Norrell
Subsidiary or any resolution adopted by the board of directors or the
shareholders of any Norrell Entity, or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result in the creation of any Lien
on any Asset of any Norrell Entity under, any material Contract or Permit of any
Norrell Entity where such Default or Lien or the absence of such Consent is
likely to result in a Norrell Material Adverse Effect, or (iii) subject to
receipt of the requisite Consents referred to in Sections 9.1(c) and 9.1(d),
constitute or result in a Default under, or require any Consent pursuant to, any
Law or Order applicable to any Norrell Entity or any of their respective Assets
where such Default or the absence of such Consent is likely to result in a
Norrell Material Adverse Effect.
(c) Except as disclosed in Section 5.2(c) of the Norrell Disclosure
Memorandum, and other than Consents required from Regulatory Authorities, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by Norrell of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) As of March 22, 1999, the authorized capital stock of Norrell consists
of (i) 50,000,000 shares of Norrell Common Stock, of which 28,096,745 shares are
issued, 26,689,072 shares are outstanding and 1,407,673 shares are held as
treasury shares, and (ii) 10,000,000 shares of preferred stock, no par value per
share, none of which are issued and outstanding. All of the outstanding shares
of capital stock of Norrell are duly and validly issued and outstanding and are
fully paid and nonassessable under the GBCC. None of the outstanding shares of
capital stock of Norrell has been issued in violation of any preemptive rights
of the current or past shareholders of Norrell.
(b) Except as disclosed in Section 5.3(b) of the Norrell Disclosure
Memorandum, there are no outstanding Equity Rights relating to the capital stock
of Norrell. Section 5.3(b) of the Norrell Disclosure Memorandum shows the number
of shares of Norrell Common Stock reserved for future issuance pursuant to
Equity Rights outstanding as of the date of this Agreement that relate to the
capital stock of Norrell, the exercise prices and the plans under which the
options were granted.
5.4 NORRELL SUBSIDIARIES. Norrell has disclosed in Section 5.4 of the
Norrell Disclosure Memorandum all of the Norrell Subsidiaries that are
corporations (identifying its jurisdiction of incorporation and percentage
ownership interest represented by such share ownership) and all of the Norrell
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which such
entity is organized and the nature of the ownership interest therein). Except as
disclosed in Section 5.4 of the Norrell Disclosure Memorandum, Norrell or one of
its wholly owned Subsidiaries owns all of the issued and outstanding shares of
capital stock (or other equity interests) of each Norrell Subsidiary. No capital
stock (or other equity interest) of any Norrell Subsidiary is or may become
required to be issued (other than to another Norrell Entity) by reason of any
Equity Rights, and there are no Contracts by which any Norrell Subsidiary is
bound to issue (other than to another Norrell Entity) additional shares of its
capital stock (or other equity interests) or Equity Rights or by which any
Norrell Entity is or may be bound to
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transfer any shares of the capital stock (or other equity interests) of any
Norrell Subsidiary (other than to another Norrell Entity). There are no
Contracts relating to the rights of any Norrell Entity to vote or to dispose of
any shares of the capital stock (or other equity interests) of any Norrell
Subsidiary. All of the shares of capital stock (or other equity interests) of
each Norrell Subsidiary held by a Norrell Entity are fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Norrell Entity
free and clear of any Lien. Each such Subsidiary is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each Norrell Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Norrell Material Adverse Effect. The minute books and other
organizational documents for each Norrell Subsidiary have been made available to
Interim for its review and, except as disclosed in Section 5.4 of the Norrell
Disclosure Memorandum, are true and complete in all material respects as in
effect as of the date of this Agreement and accurately reflect in all material
respects all amendments to the organizational documents and all proceedings of
the Board of Directors and shareholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Norrell has timely filed and made available to Interim all SEC
Documents required to be filed by Norrell (the "Norrell SEC Reports"). The
Norrell SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Laws and other applicable
Laws and (ii) did not, at the time they were filed (or, if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Norrell SEC Reports or necessary to
make the statements in such Norrell SEC Reports, in light of the circumstances
under which they were made, not misleading. No Norrell Subsidiary is required to
file any SEC Documents.
(b) Each of the Norrell Financial Statements (including, in each case, any
related notes) contained in the Norrell SEC Reports, including any Norrell SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated financial position of
Norrell and its Subsidiaries as at the respective dates and the consolidated
results of operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Norrell Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Norrell Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheet of Norrell as of
January 31, 1999, which balance sheet was disclosed in the Norrell SEC Reports
filed prior to the date hereof, or incurred since January 31, 1999 consistent
with the next sentence. No Norrell Entity has incurred or paid any Liability
since January 31, 1999, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which are
not reasonably likely to have, individually or in the aggregate, a Norrell
Material Adverse Effect or (ii) in connection with the transactions contemplated
by this Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in Section
5.7 of the Norrell Disclosure Memorandum, since January 31, 1999 and except as
disclosed in the Norrell Financial Statements delivered prior to the date of
this Agreement, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Norrell Material Adverse Effect, and (ii) the
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Norrell Entities have not taken any action, or failed to take any action, which
action or failure would represent or result in a material breach or violation of
any of the covenants and agreements of Norrell contained herein.
5.8 MATERIAL CONTRACTS. With respect to each Material Norrell Contract, as
defined herein, and except as disclosed in Section 5.8 of the Norrell Disclosure
Memorandum or except as is consistent with ordinary business or past practices:
(i) each Material Norrell Contract is in full force and effect; (ii) no Norrell
Entity is in Default thereunder; (iii) no Norrell Entity has repudiated or
waived any material provision of any such Material Norrell Contract; and (iv) no
other party to any such Material Norrell Contract is, to the Knowledge of
Norrell, in Default in any respect or has repudiated or waived any material
provision thereunder. As used herein, "Material Norrell Contract" includes (a)
any contract filed by Norrell with the SEC and (b) any other contract to which
Norrell, or any Norrell Entity, is a party and which involves an amount in
excess of $5,000,000.
5.9 CONTRACT PROVISIONS. Except as disclosed in Section 5.9 of the Norrell
Disclosure Memorandum, sinceNovember 1, 1998, Norrell has not entered into a
Contract that, as a result of the consummation of the transactions contemplated
hereby, either alone or in connection with the occurrence of an additional event
or events, would cause or result in, or give to any other party to such Contract
the right to cause or effect, either (i) the termination of such Contract, (ii)
the payment of any consideration by Norrell or the Surviving Corporation, or
(iii) the loss of any material right to Norrell or the Surviving Corporation
under the terms of such Contract.
5.10 COMPLIANCE WITH LAWS. Each Norrell Entity has in effect all Permits
necessary for it to own, lease or operate its material Assets and to carry on
its business as now conducted, except where the absence of which would not have
a Norrell Material Adverse Effect. Except as disclosed in Section 5.10 of the
Norrell Disclosure Memorandum, and except for such Defaults as are not
reasonably likely to have, individually or in the aggregate, a Norrell Material
Adverse Effect, none of the Norrell Entities: (a) is in Default under any of the
provisions of its Articles of Incorporation or Bylaws (or other governing
instruments), or (b) is in Default under any Laws, Orders, or Permits applicable
to its business or employees conducting its business. Except as disclosed in
Section 5.10 of the Norrell Disclosure Memorandum, since January 31, 1999,
neither Norrell nor any Norrell Entity has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any Norrell Entity is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, (ii) threatening
to revoke any Permits, or (iii) requiring any Norrell Entity to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, other than such of the foregoing as is not
reasonably likely to have, individually or in the aggregate, a Norrell Material
Adverse Effect.
5.11 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or
other writing furnished or to be furnished by or on behalf of any Norrell Entity
or any Affiliate thereof to or for the benefit of Interim pursuant to this
Agreement or any other document, agreement or instrument referred to herein
contains or will contain any untrue statement of material fact or will omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any Norrell Entity or any Affiliate
thereof for inclusion in the Registration Statement to be filed with the SEC,
will, when filed and, when the Registration Statement becomes effective, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein not misleading. None of
the information supplied or to be supplied by any Norrell Entity or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to Norrell's
shareholders in connection with the Norrell Shareholders' Meeting and to be
mailed to Interim's shareholders in connection with the Interim Shareholders'
Meeting, will, at the time such Proxy Statement is first mailed to the
respective shareholders of Norrell and Interim, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, as to such Proxy Statement or any amendment thereof or
supplement thereto, at the time of each of Interim's and Norrell's Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any
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statement in any earlier communication with respect to the solicitation of any
proxy for the respective Shareholders' Meeting.
5.12 OPINION OF FINANCIAL ADVISOR. Norrell has received the opinion of
Goldman Sachs & Co., dated the date of this Agreement, to the effect that the
Exchange Ratio is fair, from a financial point of view, to Norrell's
shareholders.
5.13 BOARD RECOMMENDATION. The Board of Directors of Norrell, at a meeting
duly called and held, has by unanimous vote of those directors present (who
constituted all of the directors then in office) (i) approved the Merger and
declared it to be advisable, (ii) determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of the
shareholders and (iii) resolved to recommend that the holders of the shares of
Norrell Common Stock adopt this Agreement.
ARTICLE 6
REPRESENTATIONS OF INTERIM
Interim hereby represents to Norrell as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Interim is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its material Assets. Interim is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, an Interim Material Adverse Effect. Except as disclosed in
Section 6.1 of the Interim Disclosure Memorandum, the minute books and other
organizational documents of Interim have been made available to Norrell for its
review and are true and complete in all material respects as in effect as of the
date of this Agreement and accurately reflect in all material respects all
amendments to the organizational documents and all proceedings of the Board of
Directors and shareholders thereof.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Except as disclosed in Section 6.2(a) of the Interim Disclosure
Memorandum, Interim has all requisite corporate power and authority, and has
taken all corporate action necessary, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby, subject only to the approval of this Agreement and the transactions
contemplated hereby by the holders of a majority of the outstanding shares of
Interim Common Stock and to the receipt of any required approvals by any
Regulatory Authority. This Agreement represents a legal, valid, and binding
obligation of Interim, enforceable against Interim in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Except as disclosed in Section 6.2(b) of the Interim Disclosure
Memorandum, neither the execution and delivery of this Agreement by Interim, nor
the consummation by Interim of the transactions contemplated hereby, nor
compliance by Interim with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Interim's Certificate of Incorporation
or Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
Interim Entity under, any material Contract or Permit of any Interim Entity, or
(iii) subject to receipt of the requisite Consents referred to in Section 9.1(c)
and 9.1(d), constitute or result in a Default under, or require any Consent
pursuant to, any Law or Order applicable to any Interim Entity or any of their
respective material Assets where such Default or the absence of such Consent is
likely to result in an Interim Material Adverse Effect.
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(c) Other than Consents required from Regulatory Authorities, no notice to,
filing with, or Consent of, any public body or authority is necessary for the
consummation by Interim of the Merger and the other transactions contemplated in
this Agreement.
6.3 CAPITAL STOCK. As of March 19, 1999, the authorized capital stock of
Interim consists of (i) 100,000,000 shares of Interim Common Stock, of which
47,427,492 shares are issued, 47,268,292 shares are outstanding and 159,200
shares are held as treasury shares, and (ii) 2,500,000 shares of preferred
stock, par value $0.01 per share, none of which are issued and outstanding. All
of the outstanding shares of capital stock of Interim are, and all of the shares
of Interim Common Stock to be issued as part of the Merger Consideration upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and are fully paid
and nonassessable under the DGCL. None of the outstanding shares of Interim
Common Stock has been, and none of the shares of Interim common Stock to be
issued as part of the Merger Consideration upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
shareholders of Interim.
6.4 INTERIM SUBSIDIARIES. Interim has disclosed in Section 6.4 of the
Interim Disclosure Memorandum all of the Interim Subsidiaries that are
corporations (identifying its jurisdiction of incorporation and percentage
ownership interest represented by such share ownership) and all of the Interim
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which such
entity is organized and the amount and nature of the ownership interest
therein). Except as disclosed in Section 6.4 of the Interim Disclosure
Memorandum, Interim or one of its wholly owned Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests) of
each Interim Subsidiary. Except as set forth in Section 6.4 of the Interim
Disclosure Memorandum, no capital stock (or other equity interest) of any
Interim Subsidiary is or may become required to be issued (other than to another
Interim Entity) by reason of any Equity Rights, and there are no Contracts by
which any Interim Subsidiary is bound to issue (other than to another Interim
Entity) additional shares of its capital stock (or other equity interests) or
Equity Rights or by which any Interim Entity is or may be bound to transfer any
shares of the capital stock (or other equity interests) of any Interim
Subsidiary (other than to another Interim Entity). Except as disclosed in
Section 6.4 of the Interim Disclosure Memorandum, there are no Contracts
relating to the rights of any Interim Entity to vote or to dispose of any shares
of the capital stock (or other equity interests) of any Interim Subsidiary.
Except as disclosed in Section 6.4 at the Interim Disclosure Memorandum, all of
the shares of capital stock (or other equity interests) of each Interim
Subsidiary held by an Interim Entity are fully paid and nonassessable under the
applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the Interim Entity free and clear of
any Lien. Each such Subsidiary is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and authority necessary
for it to own, lease, and operate its Assets and to carry on its business as now
conducted. Each Interim Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, an Interim
Material Adverse Effect. Except as disclosed in Section 6.4 of the Interim
Disclosure Memorandum, the minute books and other organizational documents for
each Interim Subsidiary have been made available to Norrell for its review, and
are true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all amendments to
the organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
6.5 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or
other writing furnished or to be furnished by or on behalf of any Interim Entity
or any Affiliate thereof to or for the benefit of Norrell pursuant to this
Agreement or any other document, agreement or instrument referred to herein
contains or will contain any untrue statement of material fact or will omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any Interim Entity or any Affiliate
thereof for inclusion in the Registration Statement to be filed with the SEC,
will, when filed and when the Registration Statement
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becomes effective, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by any Interim
Entity or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Norrell's shareholders in connection with the Norrell Shareholders'
Meeting and to be mailed to Interim's shareholders in connection with the
Interim Shareholder's Meeting, will, at the time such Proxy Statement is first
mailed to the respective shareholders of Norrell and Interim, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or, as to such Proxy Statement or any
amendment thereof or supplement thereto, at the time of each of Interim's and
Norrell's Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the respective Shareholders' Meeting.
6.6 AUTHORITY OF SUB. Sub is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware as a
wholly owned Subsidiary of Interim. The authorized capital stock of Sub consists
of 1,000 shares of Sub Common Stock, 100 of which are validly issued and
outstanding, fully paid and nonassessable and are owned by Interim free and
clear of any Lien, except as disclosed in Section 6.6 of the Interim Disclosure
Memorandum. Sub has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Sub. This Agreement
represents a legal, valid and binding obligation of Sub, enforceable against Sub
in accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought). Interim, as the sole shareholder of Sub, has voted
the shares of Sub Common Stock in favor of adoption of this Agreement, as and to
the extent required by applicable Law.
6.7 BOARD RECOMMENDATION. The Board of Directors of Interim, at a meeting
duly called and held, has by unanimous vote of those directors present (who
constituted all of the directors then in office) approved the Merger and
declared it to be advisable. The Board of Directors of Sub, by unanimous written
consent action, has approved the Merger. Interim, as the sole shareholder Sub,
has (i) approved the Merger and (ii) resolved to recommend that the holders of
Interim Common Stock approve this Agreement and the transactions contemplated
hereby.
6.8 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Interim has timely filed and made available to Norrell all SEC
Documents required to be filed by Interim (the "Interim SEC Reports"). The
Interim SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Laws and other applicable
Laws and (ii) did not, at the time they were filed (or, if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Interim SEC Reports or necessary to
make the statements in such Interim SEC Reports, in light of the circumstances
under which they were made, not misleading. No Interim Subsidiary is required to
file any SEC Documents.
(b) Each of the Interim Financial Statements (including, in each case, any
related notes) contained in the Interim SEC Reports, including any Interim SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated financial position of
Interim and its Subsidiaries as at the respective dates and the consolidated
results of operations and cash flows for the periods indicated, except that the
unaudited
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interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in amount
or effect.
6.9 COMPLIANCE WITH LAWS. Each Interim Entity has in effect all Permits
necessary for it to own, lease or operate its material Assets and to carry on
its business as now conducted, except where the absence of which would not have
an Interim Material Adverse Effect. Except as disclosed in Section 6.9 of the
Interim Disclosure Memorandum, and except for such Defaults as are not
reasonably likely to have, individually or in the aggregate, an Interim Material
Adverse Effect, none of the Interim Entities: (a) is in Default under any of the
provisions of its Articles of Incorporation or Bylaws (or other governing
instruments), or (b) is in Default under any Laws, Orders, or Permits applicable
to its business or employees conducting its business. Except as disclosed in
Section 6.9 of the Interim Disclosure Memorandum, since December 25, 1998,
neither Interim nor any Interim Entity has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any Interim Entity is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, (ii) threatening
to revoke any Permits, or (iii) requiring any Interim Entity to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, other than such of the foregoing as is not
reasonably likely to have, individually or in the aggregate, an Interim Material
Adverse Effect.
6.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Section
6.10 of the Interim Disclosure Memorandum, No Interim Entity has any Liabilities
that are reasonably likely to have, individually or in the aggregate, an Interim
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the consolidated balance sheet of Interim as of December 25, 1998,
which balance sheet was disclosed in the Interim SEC Reports filed prior to the
date hereof, or incurred since December 25, 1998 consistent with the next
sentence. No Interim Entity has incurred or paid any Liability since December
25, 1998, except for such Liabilities incurred or paid (i) in the ordinary
course of business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, an Interim Material
Adverse Effect or (ii) in connection with the transactions contemplated by this
Agreement.
6.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 25, 1998, except
as disclosed in the Interim Financial Statements delivered prior to the date of
this Agreement, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, an
Interim Material Adverse Effect, and (ii) the Interim Entities have not taken
any action, or failed to take any action, which action or failure would
represent or result in a material breach or violation of any of the covenants
and agreements of Interim contained herein.
6.12 MATERIAL CONTRACTS. With respect to each Material Interim Contract,
as defined herein, and except as disclosed in Section 6.12 of the Interim
Disclosure Memorandum: (i) the Material Interim Contract is in full force and
effect; (ii) no Interim Entity is in Default thereunder; (iii) no Interim Entity
has repudiated or waived any material provision of any such Material Interim
Contract; and (iv) no other party to any such Material Interim Contract is, to
the Knowledge of Interim, in Default in any respect or has repudiated or waived
any material provision thereunder. As used herein, "Material Interim Contract"
includes (a) any contract filed by Interim with the SEC and (b) any other
contract to which Interim, or any Interim Entity, is a party and which involves
an amount is excess of $5,000,000.
6.13 OPINION OF FINANCIAL ADVISOR. Interim has received the opinion of
NationsBanc Montgomery Securities LLC, dated March 24, 1999, to the effect that
the Merger Consideration to be paid to Norrell's shareholders upon the
consummation of the Merger is fair, from a financial point of view, to Interim.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF NORRELL. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Interim has been obtained, and
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except as otherwise expressly contemplated herein, Norrell will and will cause
each of its Subsidiaries to (a) operate its business only in the usual, regular,
and ordinary course, consistent with past practices, (b) use commercially
reasonable efforts to preserve intact its business organization and Assets and
maintain its rights and franchises, and (c) take no action which would (i)
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentences of Section 9.1(c) or
9.1(d), or (ii) materially adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF NORRELL. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of Interim has been obtained, and except as otherwise
expressly contemplated herein, Norrell covenants and agrees that it will not do
or agree or commit to do, or permit any of its Subsidiaries to do or agree or
commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of any Norrell Entity, except for the Articles of Correction of the
Amended and Restated Articles of Incorporation of Norrell, to be filed on March
25, 1999, or as soon as practicable thereafter;
(b) incur any additional debt obligation or other obligation for
borrowed money, other than indebtedness of a Norrell Entity to another Norrell
Entity, borrowings made in the ordinary course of business and consistent with
past practices under the credit facilities of Norrell as existing on the date of
this Agreement, or except in the ordinary course of the business of Norrell
Entities consistent with past practices, or impose, or suffer the imposition, on
any Asset of any Norrell Entity, of any Lien or permit any such Lien to exist;
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any Norrell Entity, or, after the date hereof, declare or pay
any dividend or make any other distribution in respect of Norrell's capital
stock, other than the Declared Dividend;
(d) except for this Agreement, or pursuant to the exercise of stock
options outstanding as of the date hereof and pursuant to the terms thereof in
existence on the date hereof, or as disclosed in Section 7.2(d) of the Norrell
Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional shares of
Norrell Common Stock or any other capital stock of any Norrell Entity, or any
stock appreciation rights, or any option, warrant, or other Equity Right;
(e) adjust, split, dividend, combine, reclassify or recapitalize any
capital stock of any Norrell Entity or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of Norrell Common
Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber
(x) any shares of capital stock of any Norrell Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another Norrell Entity) or
(y) any Asset other than in the ordinary course of business consistent with past
practice;
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of three
years or less, purchase any securities or, except for commitments outstanding
prior to the date hereof, make any investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than an existing wholly owned Norrell Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, or (ii) the
creation of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement;
(g) grant any increase in compensation or benefits to the employees or
officers of any Norrell Entity, except in accordance with past practice or as
required by Law; pay any severance or termination pay or any bonus other than
pursuant to written policies or written Contracts in effect on the date of this
Agreement and disclosed in Section 7.2(g) of the Norrell Disclosure Memorandum;
enter into or amend
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any severance agreements or change in control agreements with officers or
employees of any Norrell Entity; or grant any increase in fees or other
increases in compensation or other benefits to directors of any Norrell Entity;
or voluntarily accelerate the vesting of any stock options or other stock based
compensation or employee benefits or other Equity Rights;
(h) except for Contracts entered into in the ordinary course of business
consistent with past practices, enter into or amend any employment Contract
between any Norrell Entity and any Person (unless such amendment is required by
Law) that the Norrell Entity does not have the unconditional right to terminate
upon not more than thirty (30) days written notice without Liability (other than
Liability for services already rendered or for severances permitted by Section
7.2(g) herein), at any time on or after the Effective Time;
(i) adopt any new employee benefit plan of any Norrell Entity or terminate
or withdraw from, or make any material change in or to, any existing employee
benefit plans of any Norrell Entity other than any such change that is required
by Law or that, in the opinion of counsel, is necessary or advisable to maintain
the tax qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by Law, the terms of such plans or
consistent with past practice;
(j) make any significant change in any tax or accounting methods or systems
of internal accounting controls, except as may be appropriate to conform to
changes in tax Laws or regulatory accounting requirements or GAAP;
(k) commence any Litigation or settle any Litigation involving any
Liability of any Norrell Entity for money damages exceeding $250,000 or material
restrictions upon the operations of any Norrell Entity;
(l) except as disclosed in Section 7.2(l) of the Norrell Disclosure
Memorandum, enter into, modify, amend or terminate any material Contract or
waive, release, compromise or assign any material rights or claims, which action
would result in a Norrell Material Adverse Effect; or
(m) elect or appoint any new officer or director of any Norrell Entity
other than in the ordinary course of business.
7.3 AFFIRMATIVE COVENANTS OF INTERIM. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Norrell has been obtained, and except as
otherwise expressly contemplated herein, Interim covenants and agrees that it
will take no action which would (i) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentences of Section 9.1(c) or 9.1(d), or (ii) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement. Interim further covenants and agrees that it will not, without
the prior written consent of Norrell, amend the Certificate of Incorporation or
Bylaws of Interim, in each case, in any manner adverse to the holders of Norrell
Common Stock as compared to the rights of the holders of Interim Common Stock
generally as of the date of this Agreement.
7.4 NEGATIVE COVENANTS OF INTERIM. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of Norrell has been obtained, and except as otherwise
expressly contemplated herein, Interim covenants and agrees that it shall, and
shall cause the Interim Entities to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted, except where the failure to so act would not materially
adversely affect Interim's ability to perform its obligations hereunder, and
that Interim will not do or commit to do, or permit any of its Subsidiaries to
do or commit to do, any of the following:
(a) amend the Certificate of Incorporation, Bylaws or other governing
instruments of Interim so as to create any difference between the rights,
preferences and benefits of the Interim Common Stock and the rights, preferences
and benefits of that class of securities of Interim having unlimited voting
rights and the right to receive the net assets of Interim upon dissolution;
(b) declare or pay any dividend or make any other distribution in respect
of Interim's capital stock, other than an issuance of rights under the Rights
Agreement between Interim and Boatmen's Trust
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Company dated March 17, 1994, as amended through the date hereof, and as may be
amended and dividends payable solely in Interim Common Stock; or
(c) enter into, modify, amend or terminate any material Contract or waive,
release, compromise or assign any material rights or claims, which action would
result in an Interim Material Adverse Effect; or
(d) cause or permit the shares of Interim Common Stock to not be listed for
trading on the NYSE.
Notwithstanding anything herein to the contrary, nothing contained in this
Agreement shall prohibit Interim from entering into acquisition transactions and
consummating such transactions or engaging in debt and/or equity transactions,
on an arm's length basis, provided, however, that prior to the Effective Time,
without the prior written consent of Norrell, Interim shall not consummate or
enter into any of the foregoing if such transaction would materially and
adversely affect Interim's ability to consummate the transactions contemplated
by this Agreement.
7.5 ADVERSE CHANGES IN CONDITION. Norrell agrees to give written notice
promptly to Interim upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Norrell Material Adverse Effect, or (ii) would cause or constitute
a material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same. Interim agrees to give written notice promptly to Norrell upon
becoming aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i) is reasonably
likely to have, individually or in the aggregate, an Interim Material Adverse
Effect, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same. The giving of
notice pursuant to this Section 7.5 by either party shall not be deemed a waiver
by the receiving Party of any representation, warranty or covenant contained
herein.
7.6 REPORTS. Each Party and its Subsidiaries will file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and will deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Any financial statements contained in any
other reports to another Regulatory Authority will be prepared in accordance
with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 APPLICATIONS; ANTITRUST NOTIFICATION. Interim and Norrell will
promptly prepare and file applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement seeking the
requisite Consents necessary to consummate the transactions contemplated by this
Agreement. To the extent required by the HSR Act, each of the Parties will
within fourteen (14) business days of the date hereof file with the United
States Federal Trade Commission and the United States Department of Justice the
notification and report form required for the transactions contemplated hereby
and any supplemental or additional information which may reasonably be requested
in connection therewith pursuant to the HSR Act and will comply in all material
respects with the requirements of the HSR Act. The Parties will deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby.
Without limiting the foregoing, in the event that either the Federal Trade
Commission or the Antitrust Division of the United States Department of Justice
should issue a request for Additional Information or Documentary Material under
17 C.F.R. sec.803.20 (a "Second Request"), then
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Norrell and Interim each agree to use their reasonable best efforts to respond
fully to such Second Request as soon as reasonably practical, but in no event
longer than twenty (20) days after its receipt and will promptly make any
further filings or information submissions and make any employee available for
interview or testimony pursuant to the foregoing (both before and after any
Second Request) that may be necessary, proper or advisable.
8.2 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Norrell will execute and file the Articles of
Merger with the Secretary of State of the State of Georgia and Sub will execute
and file the Certificate of Merger with the Secretary of State of the State of
Delaware in connection with the Closing.
8.3 PUBLIC HEALTH COUNCIL. Without limiting Sections 8.1 or 8.2 above,
Interim will take all necessary actions to promptly prepare and file a timely
application, in complete and proper form, with the New York Public Health
Council ("PHC") for approval of the transactions contemplated by this Agreement.
Interim shall further take all actions necessary to further said application,
including, without limitation, promptly and fully responding to all
documentation requests by the PHC, and complying with all other requests from
the PHC in connection with such application
8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable Laws to consummate and
make effective, as soon as reasonably practicable after the date of this
Agreement, the transactions contemplated by this Agreement, including using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9; provided, that nothing herein will
preclude either Party from exercising its rights under this Agreement. Each
Party will use, and will cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.
8.5 CONFIDENTIALITY.
(a) Each Party will, and will cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the other
Party concerning its and its Subsidiaries' businesses, operations, and financial
positions and will not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party will promptly
return or certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from the other Party.
(b) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a Norrell Material Adverse Effect or a
Interim Material Adverse Effect, as applicable.
This Section 8.5 shall not apply to confidential information as to which:
(i) written consent is obtained from the other Party permitting
disclosure or use of the specific confidential information for the purpose(s)
requested;
(ii) the specific confidential information is or generally becomes
available to the public other than as a result of disclosure by the disclosing
Party or, the availability of any such confidential information under the
freedom of information laws of any state in the United States or utilization of
any such confidential information in response to a request for proposal, shall,
in either event, be deemed to be generally available to the public;
(iii) the disclosing Party was in the possession of the disclosing
Party prior to the commencement of negotiations leading to this Agreement;
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(iv) the specific confidential information is hereafter disclosed to
the disclosing Party by a third party having no obligation of confidentiality
with regard to this information, to the knowledge of the disclosing party; or
(v) the specific confidential information is independently generated
through the disclosing Party's own research without any material use of the
disclosure by the other Party.
If this Agreement is terminated, each Party shall immediately return to the
other any and all confidential information which was furnished to it hereunder
and all materials prepared by each Party in connection with the use of such
confidential information, shall be destroyed, without retaining any copy(ies)
thereof, and shall so certify in a letter delivered to the other Party.
8.6 PRESS RELEASES. Prior to the Effective Time, Norrell and Interim will
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby, and neither party will issue any such press
release or make any other public disclosure without the consent of the other
party, which consent will not be unreasonably withheld; provided, that nothing
in this Section 8.6 will be deemed to prohibit any Party from making any
disclosure which its counsel deems necessary or advisable to satisfy such
Party's disclosure obligations imposed by Law or any Regulatory Authority.
8.7 NO SOLICITATION BY NORRELL.
(a) For purposes of this Agreement, "Acquisition Proposal" means any
inquiry or proposal (as such proposal may be amended, modified or supplemented
from time to time) with respect to a merger, consolidation, share exchange or
similar transaction involving Norrell or any Norrell Entity, or any purchase of
all or any significant portion of the assets of Norrell or any Norrell Entity,
or any equity interest in Norrell or any Norrell Entity, other than the
transactions contemplated hereby or any other similar transaction with Interim
or any of its Affiliates. For purposes of this Agreement, "Superior Proposal"
means any proposal (i) made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or securities, more than
50% of the combined voting power of the shares of Norrell Common Stock then
outstanding or all or substantially all the assets of Norrell, (ii) which the
Board of Directors of Norrell determines in its good faith judgment (after
consultation with its financial advisor) that such proposal, if accepted, is
reasonably likely to be consummated, taking into account all legal, financial
and regulatory aspects of the proposal and the Person making the proposal and
(iii) which would, if consummated, result in a more favorable transaction than
the transaction contemplated by this Agreement, taking into account, to the
extent relevant, the long-term prospects and interests of Norrell and its
shareholders.
(b) Except as permitted in Section 8.7(c) hereof, Norrell will not, and
will not authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it to, directly or indirectly, (i) solicit, initiate
or encourage (including by way of furnishing non-public information), or take
any other action to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal
or (ii) participate in any discussions or negotiations regarding an Acquisition
Proposal. Notwithstanding the aforementioned, in the event any of Norrell's
executive officers or directors receive an Acquisition Proposal, Norrell shall
promptly notify Interim of the relevant terms of such Acquisition Proposal, and
provide Interim a copy of any written Acquisition Proposal.
(c) If, at any time, the Board of Directors of Norrell determines in good
faith, after consultation with and upon the advice of outside counsel, that
failure to take the actions described in Section 8.7(b) hereof would be
reasonably likely to constitute a breach of its fiduciary duties to Norrell's
shareholders under applicable law, then Norrell, in response to an Acquisition
Proposal that (i) was unsolicited or that resulted from solicitation undertaken
by Norrell prior to the date hereof or that did not otherwise result from a
breach of this Section 8.7 and (ii) is reasonably likely to lead to a Superior
Proposal, may (i) furnish non-public information with
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respect to Norrell to the person who made such Acquisition Proposal pursuant to
a customary confidentiality agreement and (ii) participate in negotiations
regarding such Acquisition Proposal.
(d) Unless, the Board of Directors of Norrell has determined in good faith,
after consultation with and upon the advice of outside counsel, that failure to
do so would be reasonably likely to constitute a breach of its fiduciary duties
to Norrell's shareholders under applicable law, the Board of Directors of
Norrell will not (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Interim, its approval or recommendation of this Agreement or
the Merger unless there is a Superior Proposal outstanding, (ii) approve or
recommend, or propose to approve or recommend, an Acquisition Proposal that is
not a Superior Proposal or (iii) cause Norrell to enter into any letter of
intent, agreement in principle, acquisition agreement or other agreement with
respect to an Acquisition Proposal that is not a Superior Proposal.
(e) Nothing contained in this Section 8.7 will prohibit Norrell from at any
time taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the 1934 Act; provided, however, that neither Norrell
nor its Board of Directors will, except as permitted by Section 8.7(d) hereof,
propose to approve or recommend, an Acquisition Proposal.
(f) Any determination as to whether an Acquisition Proposal constitutes or
is likely to result in a Superior Proposal shall be made by the Special
Committee of the Board of Directors of Norrell appointed on or about December
29, 1999.
8.8 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, Interim
will provide employee benefits under employee benefit and welfare plans to
officers and employees of the Norrell Entities who become employees of the
Surviving Corporation or its Subsidiaries on terms and conditions which, when
taken as a whole with any benefits being provided by Norrell, are substantially
similar to those currently provided by the Interim Entities to their similarly
situated officers and employees. For purposes of participation, vesting and
benefit accrual under Interim's employee benefit plans, the service of the
employees of the Norrell Entities prior to the Effective Time will be treated as
service with an Interim Entity participating in such employee benefit plans. All
co-payments and deductibles paid by any participant during this contract year
with respect to any health or other employee benefit plans will be credited for
similar purposes under the comparable Interim benefit plan. Interim also will
cause the Surviving Corporation and its Subsidiaries to honor in accordance with
their terms all employment, severance, consulting and other compensation
Contracts disclosed in Section 8.8 of the Norrell Disclosure Memorandum between
any Norrell Entity and any current or former director, officer, or employee
thereof, and all provisions for vested benefits or other vested amounts earned
or accrued through the Effective Time under any employee benefit plans
maintained by Norrell.
8.9 INDEMNIFICATION.
(a) The Surviving Corporation will, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, an officer or director of Norrell or any of its Subsidiaries
(each an "Indemnified Party" and collectively, the "Indemnified Parties")
against all Indemnified Liabilities arising out of actions or omissions
occurring prior to the Effective Time (and whether asserted or claimed prior to,
at or after the Effective Time) that are, in whole or in part, based on or arise
out of the fact that such person is or was a director or officer of Norrell or
one of its Subsidiaries, or is or was serving at the request of Norrell or one
of its Subsidiaries as an officer or director of another entity; provided,
however, the Surviving Corporation shall not be obligated to indemnify any such
person under this Section 8.9(a) to a greater extent than such person is
entitled to be indemnified under the Articles of Incorporation or Bylaws of
Norrell or under any indemnification agreement in effect between such person and
Norrell at the Effective Time. The Surviving Corporation will pay the reasonable
fees and expenses of counsel selected by the Indemnified Parties, which counsel
will be reasonably satisfactory to Interim and the Surviving Corporation,
promptly after statements therefor are received, and otherwise advance to such
Indemnified Party upon request reimbursement of documented expenses reasonably
incurred, in either case to the extent not prohibited by the GBCC, and any
determination required to be made with respect to whether an Indemnified Party's
conduct complies with the standards set forth under the GBCC or the Articles of
Incorporation or Bylaws of Norrell or any indemnification agreement between such
person and Norrell will be made by independent counsel mutually acceptable to
Interim and the
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Indemnified Party; provided, however, that the Surviving Corporation will not be
liable for any settlement effected without its written consent (which consent
will not be unreasonably withheld), and provided, further that this indemnity
will be secondary to any existing insurance policies providing such indemnity.
The Indemnified Parties as a group may retain only one law firm with respect to
each related matter except to the extent there is, in the opinion of counsel to
an Indemnified Party, under applicable standards of professional conduct, a
conflict on any significant issue between positions of such Indemnified Party
and any other Indemnified Party or Indemnified Parties.
(b) The Surviving Corporation agrees to indemnify, defend and hold harmless
each person who is a director of Norrell against all Indemnified Liabilities,
including the documented expenses reasonably incurred by such person in
connection with any pending, threatened or contemplated claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
the person is, or is threatened to be made, a party based upon, arising out of
or pertaining to the approval of this Agreement and the transactions
contemplated hereby.
(c) Interim agrees to guarantee unconditionally the performance of the
Surviving Corporation's obligations pursuant to Sections 8.9(a) and 8.9(b).
(d) For a period of five (5) years after the Effective Time, the Surviving
Corporation will cause to be maintained in effect policies of directors and
officers' liability insurance maintained by Norrell for the benefit of those
persons who are currently covered by such policies on terms not materially less
favorable than the terms of such current insurance coverage; provided, however,
that the Surviving Corporation will not be required to expend in any year an
amount in excess of 125% of the annual aggregate premiums currently paid by
Norrell for such insurance; and provided, further, that if the annual premiums
of such insurance coverage exceed such amount, the Surviving Corporation will be
obligated to obtain a policy with the best coverage available, in the reasonable
judgment of the Board of Directors of Interim, for a cost not exceeding such
amount.
(e) If Interim, the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person or entity and will
not be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all of substantially all of its properties and
assets to any person or entity, then and in either such case, proper provisions
will be made so that the successors and assigns of Interim will assume the
obligations set forth in this Section 8.9.
(f) To the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification as of the date hereof in favor of the
employees, agents, directors and officers of Norrell and its Subsidiaries with
respect to their activities as such prior to the Effective Time, as provided in
their respective Articles of Incorporation and Bylaws in effect on the date
thereof, or otherwise in effect on the date hereof, will survive the Merger and
will continue in full force and effect for a period of not less than five (5)
years from the Effective Time.
(g) The provisions of this Section 8.9 are intended to be for the benefit
of, and will be enforceable by, each Indemnified Party, his or her heirs and his
or her Representative.
8.10 REGISTRATION STATEMENT; PROXY STATEMENT.
(a) As soon as possible after the execution of this Agreement, Norrell and
Interim shall prepare and file with the SEC the Registration Statement,
including therein the Proxy Statement to be sent to the shareholders to each of
Norrell and Interim and prospectus, in connection with the registration under
the 1933 Act of the shares of Interim Common Stock to be issued to the holders
of Norrell Common Stock pursuant to the Merger. Norrell and Interim each shall
use all reasonable efforts to cause the Registration Statement to become
effective as promptly as practicable, and, prior to the effective date of the
Registration Statement, Interim shall take all or any action required under any
applicable federal or state securities laws in connection with the issuance of
shares of Interim Common Stock pursuant to the Merger. As promptly as
practicable after the Registration Statement shall have become effective,
Norrell and Interim shall each mail the Proxy Statement to its respective
shareholders. The Proxy Statement shall include the recommendation of the Board
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of Directors of Norrell and the recommendation of the Board of Directors of
Interim in favor of the Merger unless the Board of Directors of Norrell
withdraws such recommendation as permitted by Section 8.7 hereof.
No amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Norrell or Interim without the approval of the other
party, which shall not be unreasonably withheld. Norrell or Interim each will
advise the other, promptly after it receives notice thereof, of the time when
the Registration Statement has become effective or any supplement or amendment
has been filed, the issuance of any stop order, the suspension of the
qualification of the Interim Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement or the Registration Statement or comments
thereon and responses thereto or requests by the SEC for additional information.
(b) Norrell, Interim and Sub each hereby (i) consents to the use of its
name and, on behalf of its subsidiaries and affiliates, the names of such
subsidiaries and affiliates, and to the inclusion of financial statements and
business information relating to such party and its subsidiaries and affiliates
(in each case, to the extent required by applicable securities laws), in the
Registration Statement and the Proxy Statement, (ii) agrees to use all
reasonable efforts to obtain the written consent of any person or entity
retained by it which may be required to be named (as an expert or otherwise) in
the Registration Statement or the Proxy Statement, and (iii) agrees to cooperate
fully, and agrees to use all reasonable efforts to cause its subsidiaries and
affiliates to cooperate fully, with any legal counsel, investment banker,
accountant or other agent or representative retained by any of the parties
specified in clause (i) above in connection with the preparation of any and all
information required, as determined after consultation with each party's
counsel, to be disclosed by applicable securities laws in the Registration
Statement or the Proxy Statement.
8.11 NORRELL SHAREHOLDERS' MEETING. Norrell shall call the Norrell
Shareholders' Meeting, to be held as soon as reasonably practicable, for the
purpose of approving this Agreement and the transactions contemplated thereby
and such other related matters as it deems appropriate.
8.12 INTERIM SHAREHOLDERS' MEETING. Interim shall call the Interim
Shareholders' Meeting, to be held as soon as reasonably practicable, for the
purpose of approving this Agreement and the transactions contemplated hereby and
such other related matters as it deems appropriate.
8.13 EXCHANGE LISTING. Interim shall use its reasonable efforts to list,
prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Interim Common Stock to be issued to the holders of
Norrell Common Stock pursuant to the Merger, and Interim shall give all notices
and make all filings with the NYSE required in connection with the transactions
contemplated herein.
8.14 ACCESS TO INFORMATION. From the date hereof until the earlier of (i)
the termination of this Agreement and (ii) the Effective Time, Norrell and
Interim will each provide to the other, during normal business hours and upon
reasonable notice, access to all information and documents which the other may
reasonably request regarding the business, assets, liabilities, employees and
other aspects of the other party, other than information and documents that in
the opinion of such other party's counsel may not be disclosed under applicable
Law.
8.15 ACCOUNTING AND TAX TREATMENT. Each Party undertakes and agrees to use
its reasonable best efforts to cause the Merger to qualify, and to take no
action which would cause the Merger not to qualify for treatment as a
"reorganization" within the meaning of Section 368(a) of the Code for federal
income tax purposes. No Party has any knowledge of any fact or circumstance that
would be reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code. Each Party
acknowledges and agrees that it will report this transaction to its respective
stockholders and to the Internal Revenue Service as a reorganization within the
meaning of Section 368(a) of the Code.
8.16 INTERIM'S ACCOUNTANT'S LETTERS. Interim undertakes and agrees to use
its reasonable best efforts to insure that Norrell shall have received from
Deloitte & Touche LLP letters dated (i) the date of the Proxy Statement and (ii)
the Effective Time, with respect to certain financial information regarding
Interim, in form and substance reasonably satisfactory to Norrell, which letters
shall be based upon customary specified
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procedures undertaken by such firm, containing statements and information of the
type ordinarily included in accountant's "comfort letters."
8.17 NORRELL'S ACCOUNTANT'S LETTERS. Norrell undertakes and agrees to use
its reasonable best efforts to insure that Interim shall have received from
Arthur Andersen LLP letters dated (i) the date of the Proxy Statement and (ii)
the Effective Time, with respect to certain financial information regarding
Norrell, in form and substance reasonably satisfactory to Interim, which letters
shall be based upon customary specified procedures undertaken by such firm,
containing statements and information of the type ordinarily included in
accountant's "comfort letters."
8.18 DIRECTOR SEAT. Following the Effective Time, the Board of Directors
of Interim shall take the required action to appoint Guy W. Millner, or his
nominee, to the Board of Directors of Interim. Such individual shall be
classified as a Class II Director, as set forth in the Certificate of
Incorporation and Bylaws of Interim, and whose initial term will expire at the
2001 Annual Meeting of Shareholders of Interim.
8.19 TAX OPINIONS. Interim undertakes and agrees to use its reasonable
best efforts to insure that Baker & McKenzie delivers the opinion referred to in
Section 9.2(e). Norrell undertakes and agrees to use its reasonable best efforts
to insure that Alston & Bird LLP delivers the opinion referred to in Section
9.3(e).
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of
each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6:
(a) NORRELL SHAREHOLDER APPROVAL. The shareholders of Norrell will
have approved this Agreement and the transactions contemplated hereby, as and to
the extent required by Law, by the provisions of the Articles of Incorporation
and Bylaws of Norrell, or by the rules of the NYSE.
(b) INTERIM SHAREHOLDER APPROVAL. The shareholders of Interim will
have approved this Agreement and the transactions contemplated hereby, as and to
the extent required by Law, by the provisions of the Certificate of
Incorporation and Bylaws of Interim, or by the rules of the NYSE.
(c) REGULATORY APPROVALS. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities (other than such Consents
as may be required from the PHC) required for consummation of the Merger will
have been obtained or made and will be in full force and effect and all waiting
periods required by Law will have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby will be conditioned or restricted in a manner which in the
reasonable judgment of the Board of Directors of Interim would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement been
known, such Party would not, in its reasonable judgment, have entered into this
Agreement.
(d) CONSENTS AND APPROVALS. Each Party will have obtained any and all
Consents (other than such Consents as may be required from the PHC) required for
consummation of the Merger (other than those referred to in Section 9.1(c)) or
for the preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have, individually or in
the aggregate, a Norrell Material Adverse Effect or an Interim Material Adverse
Effect, as applicable. No Consent so obtained which is necessary to consummate
the transactions contemplated hereby will be conditioned or restricted in a
manner which in the reasonable judgment of the Board of Directors of Interim
would so materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(e) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction will have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary,
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preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by this
Agreement.
(f) INJUNCTIONS; RESTRAINTS. No court or governmental or regulatory
authority of competent jurisdiction will have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
(g) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of Interim Common Stock issuable pursuant to the Merger shall have been
received.
(h) EXCHANGE LISTING. The shares of Interim Common Stock issuable
pursuant to the Merger shall have been approved for listing on the NYSE, subject
to official notice of issuance.
9.2 CONDITIONS TO OBLIGATIONS OF INTERIM. The obligations of Interim to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Interim pursuant to Section 11.6(a):
(a) REPRESENTATIONS. The representations of Norrell set forth in this
Agreement (other than the representations set forth in Section 5.3) will be true
and correct at the Effective Time as though all such representations had been
made at the Effective Time (provided that representations which are confined to
a specified date will speak only as of such date). The representations of
Norrell set forth in Section 5.3 will be true and correct at the Effective Time
(except for changes permitted under Section 7.2(d) hereof and inadvertent and de
minimis errors in the number of shares outstanding or the number of shares
subject to Equity Rights).
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Norrell to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time will have been duly performed and complied with in all material
respects.
(c) CERTIFICATES. Norrell will have delivered to Interim (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 9.1 as relates to Norrell and in Section 9.2(a)
and 9.2(b) have been satisfied, and (ii) certified copies of resolutions duly
adopted by Norrell's Board of Directors and shareholders evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Interim and its counsel
will request.
(d) FAIRNESS OPINION. At the Effective Time, NationsBanc Montgomery
Securities LLC shall have reaffirmed in writing the opinion described in Section
6.13, as if such opinion was issued on such date.
(e) TAX OPINION. Interim shall have received from Baker & McKenzie
its opinion, in form and substance reasonably satisfactory to Interim, dated as
of the Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion:
(i) the Merger of Norrell into Sub and the issuance of shares of
Interim Common Stock in connection therewith, as described in this Agreement,
will constitute a tax-free reorganization as defined in Section 368(a) of the
Code.
(ii) Each of Norrell, Interim and Sub will be considered a party
to the reorganization.
(iii) Except for the recognition of gain as required by Section
356(a) of the Code with respect to the receipt by shareholders of Norrell of
cash either in lieu of the issuance of fractional shares of
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Interim Common Stock or as a Cash Payment, no gain or loss will be
recognized by shareholders of Norrell upon the exchange of Norrell Common
Stock for Interim Common Stock as a result of the Merger.
(iv) In general, cash received by holders of Norrell Common Stock
in lieu of fractional shares or as a Cash Payment will be treated as
amounts distributed in redemption of their shares and will be taxable under
the provisions of Section 302 of the Code.
9.3 CONDITIONS TO OBLIGATIONS OF NORRELL. The obligations of Norrell to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Norrell pursuant to Section 11.6(b):
(a) REPRESENTATIONS. The representations of Interim set forth in this
Agreement will be true and correct at the Effective Time as though all such
representations and warranties had been made at the Effective Time (provided
that representations and warranties which are confined to a specified date will
speak only as of such date).
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Interim to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time will have been duly performed and complied with in all material
respects.
(c) CERTIFICATES. Interim will have delivered to Norrell (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 9.1 as relates to Interim and in Section 9.3(a)
and 9.3(b) have been satisfied, and (ii) certified copies of resolutions duly
adopted by Interim's Board of Directors and shareholders and Sub's Board of
Directors and sole shareholder evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Norrell and its counsel will request.
(d) FAIRNESS OPINION. At the time of the mailing of the Proxy
Statement to the Norrell Shareholders, Goldman Sachs & Co. shall have reaffirmed
in writing the opinion described in Section 5.12 herein, as if such opinion was
issued on such date, and such opinion shall not have been withdrawn prior to the
Effective Time.
(e) TAX OPINION. Norrell shall have received from Alston & Bird LLP
its opinion, in form and substance reasonably satisfactory to Norrell, dated as
of the Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion:
(i) the Merger of Norrell into Sub and the issuance of shares of
Interim Common Stock in connection therewith, as described in this
Agreement, will constitute a tax-free reorganization as defined in Section
368(a) of the Code.
(ii) Each of Norrell, Interim and Sub will be considered a party to
the reorganization.
(iii) Except for the recognition of gain as required by Section
356(a) of the Code with respect to the receipt by shareholders of Norrell
of cash either in lieu of the issuance of fractional shares of Interim
Common Stock or as a Cash Payment, no gain or loss will be recognized by
shareholders of Norrell upon the exchange of Norrell Common Stock for
Interim Common Stock as a result of the Merger.
(iv) In general, cash received by holders of Norrell Common Stock
in lieu of fractional shares or as a Cash Payment will be treated as
amounts distributed in redemption of their shares and will be taxable under
the provisions of Section 302 of the Code.
Notwithstanding the foregoing, in the event that Alston & Bird LLP fails
for any reason to deliver the opinion referred to in this Section 9.3(e), then
this condition may be satisfied by the delivery to Norrell of the opinion
referred to in Section 9.2(e), which opinion shall expressly permit the reliance
of Norrell thereon.
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ARTICLE 10
TERMINATION
10.1 TERMINATION. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of Interim and Norrell; or
(b) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any representation or warranty contained in this Agreement which cannot
be cured or has not been cured within 30 days after the giving of written notice
to the breaching Party of such breach and which breach would be reasonably
likely, in the opinion of the non-breaching Party, to have, individually or in
the aggregate, a Norrell Material Adverse Effect or an Interim Material Adverse
Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot be
cured or has not been cured within 30 days after the giving of written notice to
the breaching Party of such breach and which breach would be reasonably likely,
in the opinion of the non-breaching Party, to have, individually or in the
aggregate, a Norrell Material Adverse Effect or a Interim Material Adverse
Effect, as applicable, on the breaching Party; or
(d) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger will have been denied by final
nonappealable action of such authority or if any action taken by such authority
is not appealed within the time limit for appeal, (ii) the shareholders of
Norrell fail to vote their approval of this Agreement and the transactions
contemplated hereby at the Norrell Shareholders' Meeting where such matters were
presented to such shareholders for approval and voted upon, except under the
circumstances set forth in Section 10.1(h)(iii), or (iii) the shareholders of
Interim fail to vote their approval of this Agreement and the transactions
contemplated hereby at the Interim Shareholders' Meeting where such matters were
presented to such shareholders for approval and voted upon;
(e) By either Party in the event that the Merger will not have been
consummated by September 30, 1999, if the failure to consummate the transactions
contemplated hereby on or before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant to this Section 10.1(e);
or
(f) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger cannot be satisfied or
fulfilled by the date specified in Section 10.1(e); or
(g) By Interim, in the event that the Board of Directors of Norrell
withdraws or fails to reaffirm its approval of this Agreement and the
transactions contemplated hereby (to the exclusion of any other Acquisition
Proposal), or resolves not to reaffirm the Merger, or affirms, recommends or
authorizes entering into any other Acquisition Proposal or other transaction
involving a merger, share exchange, consolidation or transfer of substantially
all of the Assets of Norrell;
(h) By Norrell, in the event that either (i) the Board of Directors of
Norrell withdraws or modifies its approval or recommendation of this Agreement
and the transactions contemplated hereby while there is a Superior Proposal
outstanding, (ii) Norrell enters into any letter of intent, agreement in
principle, acquisition agreement or other agreement with respect to an
Acquisition Proposal that is a Superior Proposal or with respect to which the
Board of Directors Norrell has determined, in good faith after consultation with
and upon the advice of outside counsel, that the failure to enter into such
letter of
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intent, agreement in principle, acquisition agreement or other agreement would
be reasonably likely to constitute a breach of its fiduciary duties to Norrell's
shareholders under applicable law, or (iii) following the commencement, public
proposal, public disclosure or communications of an Acquisition Proposal to
Norrell (or the public disclosure or communication to Norrell of the willingness
of any Person to make an Acquisition Proposal), the requisite approval of
Norrell's shareholders for the Merger is not obtained at the Norrell
Shareholders' Meeting; or
(i) By either Party if the Base Period Trading Price is less than
$12.00.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement will
become void and have no effect, except that (i) the provisions of this Section
10.2 and Section 8.5 and Article 11 will survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c) or
10.1(f) will not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties will not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.5, 8.8 and 8.9 shall survive the
Effective Time and shall not be extinguished by the consummation of the Merger.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set forth
below will have the following meanings:
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"AFFILIATE" of a Person means: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" means this Agreement and Plan of Merger.
"ARTICLES OF MERGER" means the Articles of Merger to be executed by
Norrell and filed with the Secretary of State of the State of Georgia
relating to the Merger as contemplated by Section 1.1.
"ASSETS" of a Person means all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the
books and records of such Person, and whether or not owned in the name of
such Person or any Affiliate of such Person and wherever located.
"BASE PERIOD TRADING PRICE" means the average of the daily closing
sale prices for shares of Interim Common Stock for the twenty (20)
consecutive full trading days on which such shares are actually traded on
the NYSE ending at the close of trading on the second trading day
immediately preceding the Effective Time.
"CERTIFICATE OF MERGER" means the Certificate of Merger to be executed
by Sub and filed with the Secretary of State of the State of Delaware
relating to the Merger as contemplated by Section 1.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"CONSENT" means any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by, or required notices of
filings with, any Person pursuant to any Contract, Law, Order or Permit.
"CONTRACT" means any written agreement, arrangement, authorization,
commitment, contract, indenture, instrument, lease, obligation, plan,
practice, restriction, understanding, or undertaking of any kind or
character, or other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets or business.
"DGCL" means the General Corporation Law of the State of Delaware.
"DEFAULT" means (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit,
(ii) any occurrence of any event that with the passage of time or the
giving of notice or both would constitute a breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right of any
Person to exercise any remedy or obtain any relief under, terminate or
revoke, suspend, cancel, or modify or change the current terms of, or
renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or
Permit, where, in any such event, such Default is reasonably likely to
have, individually or in the aggregate, a Norrell Material Adverse Effect
or a Interim Material Adverse Effect, as applicable.
"EXPENSES" means all actual documented fees and expenses incurred or
paid by or on behalf of Norrell or Interim, as applicable, in connection
with the Merger or the consummation of any of the transactions contemplated
by this Agreement, including all actual documented printing costs and
reasonable fees and expenses of counsel, investment banking firms,
accountants, experts and consultants to Norrell or Interim, as applicable.
"EQUITY RIGHTS" means all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Equity Rights.
"EXCHANGE RATIO" means 0.9 to 1.0.
"GAAP" means generally accepted accounting principles, consistently
applied during the periods involved.
"GBCC" means the Georgia Business Corporations Code.
"HSR ACT" means Section 7A of the Clayton Act, as added by Title II of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"INDEMNIFIED LIABILITIES" means the obligation to pay a judgment,
settlement, penalty, fine or reasonable expenses (including attorneys' fees
and court costs) incurred with respect to any threatened, pending or
contemplated claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal.
"INTERIM COMMON STOCK" means the $0.01 par value common stock of
Interim.
"INTERIM DISCLOSURE MEMORANDUM" means the written information entitled
"Interim Disclosure Memorandum" delivered prior to the date of this
Agreement to Norrell describing in reasonable detail the matters contained
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section will be
deemed disclosed for purposes of all other Sections whether or not such
other sections are specifically referred to in such disclosure.
"INTERIM ENTITIES" means, collectively, Interim and all Interim
Subsidiaries, including Sub.
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"INTERIM FINANCIAL STATEMENTS" means (i) the consolidated statements
of balance sheets (including related notes and schedules, if any) of
Interim as of December 25, 1998, and as of December 26, 1997, and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) for the three fiscal
years ended December 25, 1998, December 26, 1997 and December 27, 1996, as
filed by Interim in SEC Documents, and (ii) the consolidated balance sheets
of Interim (including related notes and schedules, if any) and related
statements if income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to December 25, 1998.
"INTERIM MATERIAL ADVERSE EFFECT" means an event, change or occurrence
(other than general economic conditions or conditions occurring or
prevailing in the staffing industry generally) which, individually or
together with any other event, change or occurrence, has or reasonably
could be expected to have a material adverse impact on (i) the business,
operations, properties, financial position or results of operations of
Interim and its Subsidiaries, taken as a whole, or (ii) the ability of
Interim to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement.
"INTERIM SHAREHOLDERS' MEETING" means the meeting of the shareholders
of Interim to be held pursuant to Section 8.12, including any adjournment
or adjournments thereof.
"INTERIM SUBSIDIARIES" mean the Subsidiaries of Interim, which will
include the Interim Subsidiaries described in the Interim Disclosure
Memorandum and any corporation or other organization acquired as a
Subsidiary of Interim in the future and held as a Subsidiary by Interim at
the Effective Time.
"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) means those facts that are
known or should reasonably have been known after inquiry to a commercially
reasonable extent by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, general counsel or any
senior, executive or other corporate level vice president of such Person.
"LAW" means any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"LIABILITY" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) Liens under existing Norrell credit
agreements and (iii) Liens which do not materially impair the use of or
title to the Assets subject to such Lien.
"LITIGATION" means any action, arbitration, cause of action, claim,
complaint, criminal prosecution, governmental or other examination or
investigation, hearing, administrative or other proceeding relating to or
affecting a Party, its business, its Assets (including Contracts related to
it), or the transactions contemplated by this Agreement.
"MATERIAL" AND "material" for purposes of this Agreement will be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement will determine materiality in that instance.
"MERGER CONSIDERATION" means the Cash Payment and/or the Merger
Shares.
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"NORRELL COMMON STOCK" means the no par value common stock of Norrell.
"NORRELL DISCLOSURE MEMORANDUM" means the written information entitled
"Norrell Disclosure Memorandum" delivered prior to the date of this
Agreement to Interim describing in reasonable detail the matters contained
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section will be
deemed disclosed for purposes of all other Sections whether or not such
other sections are specifically referred to in such disclosure.
"NORRELL ENTITIES" means, collectively, Norrell and all Norrell
Subsidiaries.
"NORRELL FINANCIAL STATEMENTS" means (i) the consolidated statements
of balance sheets (including related notes and schedules, if any) of
Norrell as of November 1, 1998, and as of November 2, 1997 , and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) for the three fiscal
years ended November 1, 1998, November 2, 1997 and October 27, 1996, as
filed by Norrell in SEC Documents, and (ii) the consolidated balance sheets
of Norrell (including related notes and schedules, if any) and related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to November 1, 1998.
"NORRELL MATERIAL ADVERSE EFFECT" means an event, change or occurrence
(other than general economic conditions or conditions occurring or
prevailing in the staffing industry generally) which, individually or
together with any other event, change or occurrence, has or reasonably
could be expected to have a material adverse impact on (i) the business,
operations, properties, financial position, or results of operations of
Norrell and its Subsidiaries, taken as a whole, or (ii) the ability of
Norrell to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement.
"NORRELL SHAREHOLDERS' MEETING" means the meeting of the shareholders
of Norrell to be held pursuant to Section 8.11, including any adjournment
or adjournments thereof.
"NORRELL STOCK PLANS" means the existing Employee Stock Purchase Plan
and the stock option plans of Norrell designated as follows: 1991 Stock
Option Plan, 1994 Stock Incentive Plan, Massey Investment Co. Agreement,
Comtex Stock Option Plan and Non-Qualified Deferred Compensation Plan.
"NORRELL SUBSIDIARIES" means the Subsidiaries of Norrell, which will
include the Norrell Subsidiaries described in Section 5.4 of the Norrell
Disclosure Memorandum and any corporation or other organization acquired as
a Subsidiary of Norrell in the future and held as a Subsidiary by Norrell
at the Effective Time.
"NYSE" means the New York Stock Exchange, Inc.
"ORDER" means any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTY" means either Norrell or Interim or Sub, and "PARTIES" will
mean Norrell, Interim and Sub collectively.
"PERMIT" means any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may
be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"PERSON" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
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"PROXY STATEMENT" means the joint proxy statement used by Norrell to
solicit the approval of its shareholders of this Agreement and the
transactions contemplated hereby and by Interim to solicit the approval of
its shareholders of this Agreement and the transactions contemplated
hereby.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-4,
or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by Interim under the
1933 Act with respect to the shares of Interim Common Stock to be issued to
the shareholders of Norrell in connection with the transactions
contemplated by this Agreement.
"REGULATORY AUTHORITIES" means, collectively, the Federal Trade
Commission, the United States Department of Justice, SEC, Internal Revenue
Service, NYSE, Pension Benefit Guaranty Corporation and all other federal,
state, county, local or other governmental or regulatory agencies,
authorities (including self-regulatory authorities), instrumentalities,
commissions, boards or bodies having jurisdiction over the Parties and
their respective Subsidiaries (whether domestic or foreign).
"REPRESENTATIVE" means any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a
Person.
"SEC" means the Securities and Exchange Commission.
"SEC DOCUMENTS" means all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" means the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"SUB COMMON STOCK" means $0.01 par value common stock of Sub.
"SUBSIDIARIES" means all those corporations, associations, or other
business entities of which the entity in question either (i) owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more of
the outstanding equity securities is owned directly or indirectly by its
parent (provided, there will not be included any such entity the equity
securities of which are owned or controlled in a fiduciary capacity), (ii)
in the case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a managing member, or (iv)
otherwise has the ability to elect a majority of the directors, trustees or
managing members thereof.
"SURVIVING CORPORATION" means Sub as the surviving corporation
resulting from the Merger.
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(b) The terms set forth below will have the meanings ascribed thereto in
the referenced sections:
<TABLE>
<S> <C>
Acquisition Proposal Section 8.7(a)
Cash Election Section 3.1(e)
Cash Election Shares Section 3.1(d)
Certificates Section 4.1
Cash Payment Section 3.1(d)
Closing Section 1.2
Declared Dividend Section 4.2
Deemed Cash Purchase Price Section 3.1(f)
Effective Time Section 1.3
Election Section 3.1(d)
Election Deadline Section 3.1(e)
Election Form Section 3.1(e)
Election Form Record Date Section 3.1(e)
Exchange Agent Section 4.1
Indemnified Party Section 8.9(a)
Interim SEC Reports Section 6.8(a)
Mailing Date Section 3.1(e)
Material Interim Contract Section 6.12
Material Norrell Contract Section 5.8
Maximum Cash Payment Section 3.1(f)
Maximum Cash Election Shares Section 3.1(f)
Merger Section 1.1
Merger Shares Section 3.1(c)
Percentage Maximum Section 3.1(f)
Norrell Options Section 3.4(a)
Norrell SEC Reports Section 5.5(a)
PHC Section 8.3
Second Request Section 8.1
Superior Proposal Section 8.7(a)
</TABLE>
(c) Any singular term in this Agreement will be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they will be deemed
followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each of the Parties
will bear and pay all direct costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial or other consultants, investment bankers,
accountants and counsel; provided, however, that HSR filing fees and all
expenses, other than attorneys fees, related to printing, filing and mailing the
Registration Statement and the Proxy Statement and all SEC and other regulatory
filing fees incurred in connection with the Registration Statement and the Proxy
Statement will be borne one-half each.
(b) Notwithstanding the foregoing, if either
(i) this Agreement is terminated by Interim pursuant to any of
Sections 10.1(b), 10.1(c), 10.1(d)(ii) (as relates to approval of Norrell's
shareholders), 10.1(f) (based upon the failure of Norrell or its
shareholders, as the case may be, to satisfy any of the conditions set
forth in Sections 9.2), 10.1(g) or 10.1(i), or
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(ii) this Agreement is terminated by Norrell pursuant to Section
10.1(h), 10.1(i) or 10.1(d)(ii) (as it relates to approval of Norrell's
shareholders) or 10.1(f) (based upon the failure of the conditions set
forth in Section 9.3(d)),
then Norrell will promptly pay Interim an amount in cash equal to Interim's
Expenses up to $1,000,000.
(c) Notwithstanding the foregoing, if this Agreement is terminated by
Norrell pursuant to any of Sections 10.1(b), 10.1(c), or 10.1(f) (based upon the
failure of Interim to satisfy any of the conditions set forth in Section
9.3(a)(b) or (c)), then Interim will promptly pay Norrell an amount in cash
equal to Norrell's Expenses up to $1,000,000.
(d) In addition to the foregoing, if this Agreement is terminated by
Interim pursuant to Section 10.1(g) or Norrell pursuant to Section 10.1(h),
Norrell will promptly pay to Interim an amount in cash equal to the sum of
(i) Interim's Expenses up to $1,000,000, plus
(ii) $10,000,000, less
(iii) any amounts previously paid by Norrell to Interim pursuant to
Section 11.2(b),
which sum shall constitute liquidated damages in full and complete satisfaction
of, and shall be Interim's sole and exclusive remedy for any loss, liability,
damage or claim arising out of or in connection with any such termination of
this Agreement or the facts and circumstances resulting in such termination or
otherwise related to or otherwise arising out of or in connection with this
Agreement.
11.3 BROKERS AND FINDERS. Except for Goldman Sachs & Co. and CLB Advisors,
LLC as to Norrell and except for NationsBanc Montgomery Securities LLC as to
Interim, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by Norrell or by Interim, each of
Norrell and Interim, as the case may be, agrees to indemnify and hold the other
Party harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, other than as provided in
Sections 8.8 and 8.9.
11.5 AMENDMENTS. This Agreement may be amended by a subsequent writing
signed by each of the Parties upon the approval of each of the Parties, but only
if such amendment is effective prior to the approval of this Agreement by the
Shareholders of Norrell.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Interim, acting through its Board of
Directors, chief executive officer or other authorized officer, will have the
right to waive any Default in the performance of any term of this Agreement by
Norrell, to waive or extend the time for the compliance or fulfillment by
Norrell of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of Interim under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver will be effective unless in writing signed
by a duly authorized officer of Interim.
(b) Prior to or at the Effective Time, Norrell, acting through its Board of
Directors, chief executive officer or other authorized officer, will have the
right to waive any Default in the performance of any term of this Agreement by
Interim, to waive or extend the time for the compliance or fulfillment by
Interim of any and
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all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Norrell under this Agreement, except
any condition which, if not satisfied, would result in the violation of any Law.
No such waiver will be effective unless in writing signed by a duly authorized
officer of Norrell.
(c) The failure of any Party at any time or times to require performance of
any provision hereof will in no manner affect the right of such Party at a later
time to enforce the same or any other provision of this Agreement. No waiver of
any condition or of the breach of any term contained in this Agreement in one or
more instances will be deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder will be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder will be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and will be deemed to
have been delivered as of the date so delivered:
<TABLE>
<S> <C>
Norrell: Norrell Corporation
3535 Piedmont Rd, NE
Atlanta, GA 30305
Attention: Mark Hain, Esq.
Telephone: (404) 240-3158
Telecopy: (404) 240-5572
Copy to Counsel: Alston & Bird LLP
(which shall not One Atlantic Center
constitute notice) 1201 West Peachtree Street
Atlanta, GA 30309
Attention: Sidney J. Nurkin, Esq.
Telephone: (404) 881-7260
Telecopy: (404) 881-4777
Interim: Interim Services Inc.
Corporate Service Center
2050 Spectrum Boulevard
Ft. Lauderdale, FL 33309
Attention: John B. Smith, Esq.
Telephone: (954) 938-7710
Telecopy: (954) 938-7780
</TABLE>
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<TABLE>
<S> <C>
Copy to Counsel:
(which shall not Baker & McKenzie
constitute notice) 1200 Brickell Ave.
Nineteenth Floor
Miami, FL 33131
Attention: Andrew Hulsh, Esq.
Telephone: (305) 789-8985
Telecopy: (305) 789-8953
</TABLE>
11.9 GOVERNING LAW This Agreement will be governed by and construed in
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same instrument.
11.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
will mean and refer to the referenced Articles and Sections of this Agreement.
11.12 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein will be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement will be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and will be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
INTERIM SERVICES INC.
By: /s/ RAYMOND MARCY
------------------------------------
President
INTERIM MERGER CORPORATION
By: /s/ RAYMOND MARCY
------------------------------------
President
NORRELL CORPORATION
By: /s/ C. DOUGLAS MILLER
------------------------------------
President
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<PAGE> 131
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER is made and
entered into on this 27th day of April 1999, by and among Interim Services Inc.
("Interim"), a Delaware corporation, Interim Merger Corporation ("Sub"), a
Delaware corporation, and Norrell Corporation ("Norrell"), a Georgia
corporation.
WHEREAS, Interim, Sub and Norrell entered into an Agreement and Plan of
Merger (the "Agreement and Plan of Merger") dated as of March 24, 1999.
WHEREAS, Section 11.5 of the Agreement and Plan of Merger provides that the
Agreement and Plan of Merger may be amended by a written instrument executed by
Interim, Sub and Norrell.
WHEREAS, Interim, Sub and Norrell desire to amend the terms of the
Agreement and Plan of Merger in the manner set forth in this First Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Section 3.1(e) of the Agreement and Plan of Merger shall be amended
by deleting the following words set forth therein:
"An Election Form shall be deemed properly completed only if
accompanied by one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such certificates
or the guaranteed delivery of such certificates) representing all shares
of Norrell Common Stock covered by such Election Form, together with
duly executed transmittal materials included in the Election Form."
2. Section 9.2 (d) of the Agreement and Plan of Merger shall be
amended and restated as follows:
"(d) Fairness Opinion. At the time of the mailing of the Proxy
Statement to the Interim Shareholders, NationsBanc Montgomery Securities
LLC shall have reaffirmed in writing the opinion described in Section
6.13, as if such opinion was issued on such date, and such opinion shall
not have been withdrawn prior to the Effective Time."
[Remainder of Page Intentionally Left Blank]
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<PAGE> 132
IN WITNESS WHEREOF, each of the parties has caused this First Amendment to
be executed on its behalf by its duly authorized officers as of the day and year
first above written.
INTERIM SERVICES INC.
By: /s/ ROY G. KRAUSE
------------------------------------
Name:
Title:
INTERIM MERGER CORPORATION
By: /s/ ROY G. KRAUSE
------------------------------------
Name:
Title:
NORRELL CORPORATION
By: /s/ MARK H. HAIN
------------------------------------
Name:
Title:
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<PAGE> 133
SECOND AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER is made and
entered into on this 24th day of May 1999, by and among Interim Services Inc.
("Interim"), a Delaware corporation, Interim Merger Corporation ("Sub"), a
Delaware corporation, and Norrell Corporation ("Norrell"), a Georgia
corporation.
WHEREAS, Interim, Sub and Norrell entered into an Agreement and Plan of
Merger (the "Agreement and Plan of Merger") dated as of March 24, 1999.
WHEREAS, Section 11.5 of the Agreement and Plan of Merger provides that
the Agreement and Plan of Merger may be amended by a written instrument executed
by Interim, Sub and Norrell.
WHEREAS, Interim, Sub and Norrell desire to amend the terms of the
Agreement and Plan of Merger in the manner set forth in this Second Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Section 10.3 of the Agreement and Plan of Merger shall be amended
and restated as follows:
"10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties will not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.5, 8.8, 8.9 and 8.15 shall survive the
Effective Time and shall not be extinguished by the consummation of the Merger."
[Remainder of Page Intentionally Left Blank]
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<PAGE> 134
IN WITNESS WHEREOF, each of the parties has caused this Second
Amendment to be executed on its behalf by its duly authorized officers as of the
day and year first above written.
INTERIM SERVICES INC.
By: /s/ Raymond Marcy
----------------------------------
Name: Raymond Marcy
Title: President & CEO
INTERIM MERGER CORPORATION
By: /s/ Raymond Marcy
----------------------------------
Name: Raymond Marcy
Title: President & CEO
NORRELL CORPORATION
By: /s/ Mark Hain
----------------------------------
Name: Mark Hain
Title: Senior VP
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<PAGE> 135
APPENDIX B
IRREVOCABLE PROXY
MARCH 24, 1999
The undersigned do hereby irrevocably grant to Raymond Marcy, Roy Krause
and John B. Smith, and each of them, any of whom may act without the joinder of
any other, as his or its respective true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for each of them and in
their respective names, place and stead, in any and all capacities to vote all
of the shares of common stock, no par value, of Norrell Corporation, a Georgia
corporation ("Norrell"), owned of record by the undersigned (the "Shares"), at
any meeting of the stockholders of Norrell called for the purpose of voting on
the Merger (as defined below) (and any adjournment or postponement thereof),
solely for the purpose of voting the Shares in favor of the Merger (as defined
below) and approving and adopting the Merger Agreement (as defined below). As
used herein, the term "Merger Agreement" shall mean that certain Agreement and
Plan of Merger dated as of even date herewith by and among Norrell, Interim
Services Inc., a Delaware corporation ("Parent"), and Interim Merger
Corporation, a Delaware corporation ("Sub"); the term "Merger" shall have the
meaning ascribed thereto in the Merger Agreement. Any capitalized term used but
not defined herein shall have the meaning assigned to such term in the Merger
Agreement.
The undersigned acknowledge and agree that this Irrevocable Proxy is
coupled with an interest, constitutes, among other things, an inducement for
Parent and Sub to enter into the Merger Agreement, is irrevocable and shall not
be terminated except as set forth herein and any prior proxies are hereby
revoked and no subsequent proxies will be given (and, if given, will not be
effective) prior to the termination of this Irrevocable Proxy and that this
Irrevocable Proxy is for the purpose of voting with respect to the items set
forth in the preceding paragraph and for no other purpose, and that voting or
granting a proxy to vote on other matters is not limited by this Irrevocable
Proxy. Nothing contained herein shall prohibit or limit the right of any of the
undersigned to transfer, sell, pledge, assign or encumber the Shares to any
person or entity, so long as the transferee or assignee agrees in writing to be
bound by the provisions of this Irrevocable Proxy, and this Irrevocable Proxy
shall survive any such conveyance and bind any such transferee or assignee.
This Irrevocable Proxy shall terminate, with no further action on the part
of any person or entity, in the event that the Board of Directors of Norrell
withdraws its approval or recommendation of the Merger Agreement or the Merger,
or in the event that the Merger Agreement is terminated pursuant to Section 10
thereof for any reason.
The death, incapacity or incompetency of the undersigned individual shall
not adversely affect the validity of this Irrevocable Proxy or the
enforceability of this Irrevocable Proxy by Parent or Sub, in which case the
personal representatives of the decedent, incapacitated or incompetent
undersigned individual shall continue to be bound by the provisions hereof.
Nothing contained in this Irrevocable Proxy shall prevent or limit the
undersigned Guy W. Millner from acting in his capacity as a member of the Board
of Directors of Norrell in respect of any Acquisition Proposal as provided in
Sections 8.7(c), 8.7(d) and 10.1(h) of the Merger Agreement.
This Irrevocable Proxy is subject to the terms and conditions of those
certain Security Agreements by and between the undersigned and certain banks
pursuant to which the undersigned have granted security interests to such banks
in respect of certain of the Shares listed below:
1. Intangible Personal Property Security Agreement by Millner
Preferred L.L.C. in favor of Suntrust Bank, dated December 17, 1998;
2. Intangible Personal Property Security Agreement by Guy W. Millner
in favor of Suntrust Bank, dated December 17, 1998;
3. Pledge Agreement by and between M.I. Holdings, Inc. and
NationsBank, N.A., dated December 6, 1998; and
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<PAGE> 136
4. Pledge Agreement by and Guy W. Millner. and NationsBank, N.A.,
dated December 6, 1998.
M.I. Holdings, Inc. hereby represents and warrants that it is a corporation
duly and validly organized, validly existing and in good standing as a
corporation under the laws of Georgia, with full power and authority to enter
into and perform the obligations to be performed by it under this Irrevocable
Proxy.
Millner Preferred LLC hereby represents and warrants that it is a limited
liability company duly and validly organized, validly existing and in good
standing under the laws of the State of Nevada, with full power and authority to
enter into and perform the obligations to be performed by it under this
Irrevocable Proxy.
This Irrevocable Proxy constitutes valid and binding obligations of each of
the undersigned enforceable against them in accordance with it terms.
IN WITNESS WHEREOF, the undersigned have executed this Irrevocable Proxy on
this 24th day of March, 1999.
/s/ GUY W. MILLNER
- ---------------------------------------------------------
Guy W. Millner
M.I. HOLDINGS, INC.
/s/ GUY W. MILLNER
- ---------------------------------------------------------
Name: Guy W. Millner
Title: Chairman
MILLNER PREFERRED, LLC
By: /s/ GUY W. MILLNER
--------------------------------------------------------
Name: Guy W. Millner
Title: Chairman
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<PAGE> 137
MERGER CONSIDERATION ELECTION AGREEMENT
Terms with initial capitalization used in this Agreement shall have the
meanings assigned to such terms in the Irrevocable Proxy set forth above. Any
capitalized term used in the Irrevocable Proxy but not defined in the
Irrevocable Proxy shall have the meaning assigned to such term in the Merger
Agreement.
In the event the Elections of the shareholders of Norrell (including the
undersigned, if Elections are made by either of the undersigned) are not made
with respect to 10% or more of the total outstanding shares of Norrell in the
aggregate, the undersigned hereby agree to make Elections to receive cash with
respect to a number of shares of Norrell held by one or both of them which, when
added to those shares of other shareholders making Elections, will equal 10% of
the aggregate outstanding shares of Norrell. The provision of this Agreement
shall not govern or restrict the Elections that can be made by the undersigned
with respect to any other shares held by them.
IN WITNESS WHEREOF, the undersigned have executed this Merger Consideration
Election Agreement on this 24th day of March, 1999.
/s/ GUY W. MILLNER
- ---------------------------------------------------------
Guy W. Millner
MILLNER PREFERRED, LLC
By: /s/ GUY W. MILLNER
--------------------------------------------------------
Name: Guy W. Millner
Title: Manager
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<PAGE> 138
APPENDIX C
OPINION OF NATIONSBANC MONTGOMERY SECURITIES LLC
March 24, 1999
Board of Directors
Interim Services, Inc.
2050 Spectrum Boulevard
Fort Lauderdale, FL 33309
Ladies and Gentlemen:
We understand that Norrell Corporation, a Georgia corporation ("Seller"),
and Interim Services, Inc., a Delaware corporation ("Buyer"), have entered into
an Agreement and Plan of Merger dated March 24, 1999 (the "Merger Agreement"),
pursuant to which Seller will be merged with and into a wholly-owned subsidiary
of Buyer (the "Merger Sub"), with the Merger Sub as the surviving entity (the
"Merger"). Pursuant to the Merger, as more fully described in the Merger
Agreement and as further described to us by management of Buyer, we understand
that each outstanding share of the common stock, no par value, of Seller
("Seller Common Stock") will be exchangeable, at the election of the holder of
the share of Seller Common Stock, for the following (collectively, the
"Consideration") (i) 0.9 shares of the common stock, $.01 par value per share,
of Buyer ("Buyer Common Stock") or (ii) cash equal to the greater of (a) 0.9
multiplied by the average of the daily closing sales prices for shares of Buyer
Common Stock for the twenty (20) consecutive full trading days on which such
shares are actually traded on the New York Stock Exchange ending at the close of
trading on the second trading day immediately prior to the effective time of the
Merger or (b) $16.00. Each holder of Seller Common Stock can elect to receive
cash in lieu of shares of Buyer Common Stock (the "Cash Election Shares") with
respect to all or such lesser number of Seller Common Stock that is a whole
multiple of 100 shares; provided, however, that if as a result of such elections
(i) the sum of (a) the aggregate amount of the cash payments required to be made
in respect of the Cash Election Shares plus (b) all payments made since March
24, 1996 by Seller in connection with extraordinary dividends or the purchase or
redemption of Seller Common Stock (the sum of (a) and (b), collectively, the
"Deemed Cash Purchase Price") would exceed 49% of the sum of (x) the Deemed Cash
Purchase Price plus (y) the aggregate fair market value of the shares of Buyer
Common Stock issued at the effective time of the Merger or (ii) the aggregate
amount of the cash payments made by Buyer would exceed $175 million, then the
amount of cash received by holders of Seller Common Stock shall be reduced pro
rata to an amount that causes neither (i) nor (ii) above to be exceeded and the
number of shares of Buyer Common Stock received shall be adjusted accordingly;
and provided, further that the Cash Election Shares shall be equal to or greater
than 10% of the total shares of Buyer Common Stock that would be issued by Buyer
at the effective time of the Merger if no cash elections were made. The terms
and conditions of the Merger are set forth in more detail in the Merger
Agreement.
You have asked for our opinion as investment bankers as to whether the
Consideration to be paid by Buyer pursuant to the Merger is fair to Buyer from a
financial point of view, as of the date hereof. As you are aware, we were not
retained to nor did we advise Buyer with respect to alternatives to the Merger
or Buyer's underlying decision to proceed with or effect the Merger.
In connection with our opinion, we have, among other things: (i) reviewed
publicly available financial and other data with respect to Seller and Buyer,
including the consolidated financial statements for recent years and interim
periods to December 25, 1998 in the case of Buyer and January 31, 1999 in the
case of Seller, as well as certain other relevant financial and operating data
relating to Seller and Buyer made available to us from published sources and
from the internal records of Seller and Buyer; (ii) reviewed the financial terms
and conditions of the draft Merger Agreement; (iii) reviewed certain publicly
available information
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concerning the trading of, and the trading market for, Seller Common Stock and
Buyer Common Stock; (iv) compared Seller and Buyer from a financial point of
view with certain other companies in the staffing services industry which we
deemed to be relevant; (v) considered the financial terms, to the extent
publicly available, of selected recent business combinations of companies in the
staffing services industry which we deemed to be comparable, in whole or in
part, to the Merger; (vi) reviewed and discussed with representatives of the
management of Seller and Buyer certain information of a business and financial
nature regarding Seller and Buyer furnished to us by them, including financial
forecasts and related assumptions of Seller and Buyer, and certain information
obtained by us from third party research reports; (vii) made inquiries regarding
and discussed the Merger and the Merger Agreement and other matters related
thereto with Buyer's counsel; and (viii) performed such other analyses and
examinations as we have deemed appropriate.
In connection with our review, we have not assumed any obligation
independently to verify the foregoing information and have relied on its being
accurate and complete in all material respects. With respect to the financial
forecasts for Seller and Buyer provided to us by their respective managements,
upon the advice of Buyer's management and with your consent we have assumed for
purposes of our opinion that the forecasts (including the assumptions regarding
synergies after the Merger) have been reasonably prepared on bases reflecting
the best available estimates and judgments of their respective managements at
the time of preparation as to the future financial performance of Seller and
Buyer and that they provide a reasonable basis upon which we can form our
opinion. With respect to financial forecasts and certain other information
obtained from third party research reports, with your consent we have assumed
that such estimates provide a reasonable basis on which we can form our opinion.
We have also assumed that there have been no material changes in Seller's or
Buyer's assets, financial condition, results of operations, business or
prospects since the respective dates of their last financial statements made
available to us. We have relied on advice of counsel and independent accountants
to Buyer as to all legal and financial reporting matters with respect to Buyer,
the Merger and the Merger Agreement. We have assumed that the Merger will be
consummated in a manner that complies in all respects with the applicable
provisions of the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended, and all other applicable federal
and state statutes, rules and regulations. In addition, we have not assumed
responsibility for making an independent evaluation, appraisal or physical
inspection of any of the assets or liabilities (contingent or otherwise) of
Seller or Buyer, nor have we been furnished with any such appraisals. You have
informed us, and we have assumed, that the Merger will be recorded as a purchase
under generally accepted accounting principles. Finally, our opinion is based on
economic, monetary and market and other conditions as in effect on, and the
information made available to us as of, the date hereof.
We have further assumed with your consent that the Merger will be
consummated in accordance with the terms described in the Merger Agreement,
without any further amendments thereto, and without waiver by Buyer of any of
the conditions to its obligations thereunder.
We have acted as financial advisor to Buyer in connection with the Merger
and will receive a fee for our services, including rendering this opinion, all
of which is contingent upon the consummation of the Merger. In addition, we are
entitled to a percentage of any consideration received by Buyer in the event
that the Merger is not consummated. In the ordinary course of our business, we
actively trade the equity securities of Seller and Buyer for our own account and
for the accounts of customers and, accordingly, may at any time hold a long or
short position in such securities. We have also acted as an underwriter in
connection with offerings of securities of Buyer and performed various
investment banking services for Buyer.
Based upon the foregoing and in reliance thereon, it is our opinion as
investment bankers that the Consideration to be paid by Buyer pursuant to the
Merger is fair to Buyer from a financial point of view, as of the date hereof.
This opinion is directed to the Board of Directors of Buyer in its
consideration of the Merger and is not a recommendation to any shareholder as to
how such shareholder should vote with respect to the Merger. Further, this
opinion addresses only the financial fairness of the Consideration to be paid by
Buyer and does not address the relative merits of the Merger and any
alternatives to the Merger, Buyer's underlying decision to proceed with or
effect the Merger or any other aspect of the Merger. This opinion may not be
used or
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referred to by Buyer, or quoted or disclosed to any person in any manner,
without our prior written consent, which consent is hereby given to the
inclusion of this opinion in any proxy statement or prospectus or filed with the
Securities and Exchange Commission in connection with the Merger. In furnishing
this opinion, we do not admit that we are experts within the meaning of the term
"experts" as used in the Securities Act and the rules and regulations
promulgated thereunder, nor do we admit that this opinion constitutes a report
or valuation within the meaning of Section 11 of the Securities Act.
Very truly yours,
NATIONSBANC MONTGOMERY SECURITIES LLC
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APPENDIX E
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
INTERIM SERVICES INC.
FIRST: Interim Services Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY as follows:
1. The Restated Certificate of Incorporation of the Corporation as
previously amended (the "Restated Certificate of Incorporation") is hereby
amended by deleting the first paragraph and subparagraph (i) of ARTICLE
FOURTH of the Restated Certificate of Incorporation in their present form
and substituting therefor a new first paragraph and subparagraph (i) of
ARTICLE FOURTH in the following form:
FOURTH: The aggregate number of shares of all classes of stock that
the Corporation shall have authority to issue is 202,500,000 divided
into two classes as follows:
(i) 200,000,000 shares of a class designated Common Stock, with
a par value of $0.01 per share; and
2. The remainder of the Restated Certificate of Incorporation of
Interim Services Inc. is hereby ratified and remains in full force
and effect.
SECOND: The Amendment to the Restated Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL by (a) the Board of
Directors of the Corporation having duly adopted a resolution setting forth such
Amendment and declaring its advisability and submitting it to the stockholders
of the Corporation for their approval, and (b) the stockholders of the
Corporation having duly adopted such Amendment at a Special Meeting of the
Stockholders, called and held upon notice in accordance with Section 222 of the
DGCL, by vote of the holders of a majority of the outstanding stock entitled to
vote thereon.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by ____________, its ____________, and attested by John
B. Smith, its Secretary this ______ day of ________ , 1999.
INTERIM SERVICES INC.
By:
--------------------------------------
Name:
Title:
ATTEST:
- ---------------------------------------------------------
John B. Smith
Secretary
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APPENDIX D
PERSONAL AND CONFIDENTIAL
March 24, 1999
Board of Directors
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of view
to the holders of the outstanding shares of Common Stock, no par value (the
"Shares"), of Norrell Corporation (the "Company") of the exchange ratio of 0.9
shares of Common Stock, par value $0.01 per share (the "Buyer Common Stock"), of
Interim Services Inc. ("Buyer") to be received for each Share (the "Exchange
Ratio") pursuant to the Agreement and Plan of Merger, dated as of March 24,
1999, among Buyer, Interim Merger Corporation, a wholly-owned subsidiary of
Buyer ("Sub"), and the Company (the "Agreement"). Pursuant to the Agreement,
Buyer will be merged with and into Sub (the "Merger") and each Share not owned
by the Company, Buyer or their respective wholly-owned subsidiaries will be
converted into the right to receive 0.9 shares of Buyer Common Stock. In
addition, holders of Shares may elect with respect to all or a portion of their
Shares to convert each Share into the right to receive in cash the greater of
(A) $16.00 or (B) an amount equal to the product of 0.9 multiplied by the Base
Period Trading Price (as defined in the Agreement). The cash election is subject
to certain procedures and limitations contained in the Agreement, as to which
procedures and limitations we are expressing no opinion.
Goldman, Sachs & Co., as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. We are familiar with
the Company having acted as its financial advisor in connection with, and having
participated in certain of the negotiations leading to, the Agreement. In
addition, we have provided certain investment banking services to Buyer from
time to time, including having acted as lead manager of secondary offerings of
Buyer Common Stock in 1996 and 1998, and as lead manager of an offering of
4-1/2% convertible subordinated notes of Buyer in 1998. Goldman, Sachs & Co. may
provide investment banking services to Buyer in the future. Goldman, Sachs & Co.
provides a full range of financial advisory and securities services and, in the
course of its normal trading activities, holds securities and may from time to
time effect
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Norrell Corporation
March 24, 1999
Page Two
transactions in securities, including derivative securities, of the Company and
Buyer for its own account and for accounts of customers.
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Irrevocable Proxy of Guy W. Millner, M.I. Holdings, Inc. and
Millner Preferred, LLC dated as of March 24, 1999; Annual Reports to
Shareholders and Annual Reports on Form 10-K of the Company and Buyer for the
five fiscal years ended November 1, 1998 and December 25, 1998, respectively;
certain interim reports to shareholders and Quarterly Reports on Form 10-Q of
the Company and Buyer; certain other communications from the Company and Buyer
to their respective shareholders; and certain internal financial analyses and
forecasts for the Company and Buyer prepared by their respective managements,
including certain cost savings and operating synergies projected by the
managements of the Company and Buyer to result from the Merger (the
"Synergies"). We also have held discussions with members of the senior
management of the Company and Buyer regarding the strategic rationale for, and
the potential benefits of, the Merger and the past and current business
operations, financial condition and future prospects of their respective
companies. In addition, we have reviewed the reported price and trading activity
for the Shares and Buyer Common Stock, compared certain financial and stock
market information for the Company and Buyer with similar information for
certain other companies the securities of which are publicly traded, reviewed
the financial terms of certain recent business combinations in the staffing
industry specifically and in other industries generally and performed such other
studies and analyses as we considered appropriate.
We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and completeness
for purposes of rendering this opinion. In that regard, we have assumed with
your consent that the financial analyses and forecasts prepared by the
managements of the Company and Buyer, after giving effect to the Merger and
including the Synergies, have been reasonably prepared on a basis reflecting the
best currently available estimates and judgments of the Company and Buyer, and
that such forecasts and Synergies will be realized in the amounts and time
periods contemplated thereby. In addition, we have not made an independent
evaluation or appraisal of the assets and liabilities of the Company or Buyer or
any of their subsidiaries and we have not been furnished with any such
evaluation or appraisal. We are aware that prior to entering into the Agreement
the Company requested and received preliminary indications of interest from
several parties proposing a possible all-cash acquisition of the Company at
prices per share materially in excess of the value indicated by multiplying the
Exchange Ratio by the trading price of Buyer Common Stock as of the date hereof.
Each of such indications of interest was subject, among other things, to further
due diligence into the business and financial condition of the Company, to
obtaining financing sufficient to consummate any such transaction and to
negotiating a mutually acceptable satisfactory definitive agreement. We
understand that the Special Committee determined that it was not in the best
interests of the Company and its holders of Shares to pursue such indications of
interest. In making that determination, the Special Committee considered the
contingent nature of such indications of interest and the possible detrimental
effect on the Company of going through a potentially protracted process in order
to allow such interested parties and their financing sources to complete due
diligence, confirm the
D-2
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Norrell Corporation
March 24, 1999
Page Three
availability of required financing and negotiate a mutually acceptable
definitive agreement. We further understand that each of the Special Committee
and the Board of Directors of the Company has determined, in the exercise of
business judgment, that the Merger is in the best interests of the Company and
the holders of Shares after taking into account, among other factors, the risks
and uncertainties relating to the timing and likelihood of entering into a
definitive agreement with any of the other parties at a mutually acceptable
price and the respective views of the Special Committee and the Board of
Directors concerning the complementary nature of the business of the Company and
Buyer, the compatibility of cultures, the Synergies, the attainment of long term
strategies for the Company (including expansion into international markets and
the expansion of specialized staffing product offerings) and the contribution by
Buyer of sales and management personnel at critically needed levels. Our opinion
does not address the relative merits of the Merger as compared to any
alternative business transaction that might be available to the Company. Our
advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to how any
holder of Shares should vote with respect to the Merger.
Based upon and subject to the foregoing and based upon such other matters as we
consider relevant, it is our opinion that as of the date hereof the Exchange
Ratio pursuant to the Agreement is fair from a financial point of view to the
holders of Shares. We are not expressing any opinion to any holder of Shares
that is required to or elects to make a cash election with respect to such
holder's Shares.
Very truly yours,
/s/ Goldman, Sachs, & Co.
- --------------------------
(GOLDMAN, SACHS & CO.)
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APPENDIX E
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
INTERIM SERVICES INC.
FIRST: Interim Services Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY as follows:
1. The Restated Certificate of Incorporation of the Corporation as
previously amended (the "Restated Certificate of Incorporation") is hereby
amended by deleting the first paragraph and subparagraph (i) of ARTICLE
FOURTH of the Restated Certificate of Incorporation in their present form
and substituting therefor a new first paragraph and subparagraph (i) of
ARTICLE FOURTH in the following form:
FOURTH: The aggregate number of shares of all classes of stock that
the Corporation shall have authority to issue is 202,500,000 divided
into two classes as follows:
(i) 200,000,000 shares of a class designated Common Stock, with
a par value of $0.01 per share; and
2. The remainder of the Restated Certificate of Incorporation of
Interim Services Inc. is hereby ratified and remains in full force
and effect.
SECOND: The Amendment to the Restated Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL by (a) the Board of
Directors of the Corporation having duly adopted a resolution setting forth such
Amendment and declaring its advisability and submitting it to the stockholders
of the Corporation for their approval, and (b) the stockholders of the
Corporation having duly adopted such Amendment at a Special Meeting of the
Stockholders, called and held upon notice in accordance with Section 222 of the
DGCL, by vote of the holders of a majority of the outstanding stock entitled to
vote thereon.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by ____________, its ____________, and attested by John
B. Smith, its Secretary this ______ day of ________ , 1999.
INTERIM SERVICES INC.
By:
--------------------------------------
Name:
Title:
ATTEST:
- ---------------------------------------------------------
John B. Smith
Secretary
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<PAGE> 146
APPENDIX F
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION OF
INTERIM SERVICES INC.
FIRST: Interim Services Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY as follows:
1. The Restated Certificate of Incorporation of the Corporation as
previously amended (the "Restated Certificate of Incorporation") is hereby
amended by deleting ARTICLE TENTH of the Restated Certificate of
Incorporation in its present form and substituting therefor a new ARTICLE
TENTH in the following form:
TENTH: The affirmative vote of the holders of not less than 2/3
of the outstanding shares of stock of the Corporation entitled
to vote generally in the election of directors shall be required to
amend, modify, alter or repeal Articles Fifth, Eighth and Tenth of
this Restated Certificate of Incorporation.
2. The remainder of the Restated Certificate of Incorporation of
Interim Services Inc. is hereby ratified and remains in full force and
effect.
SECOND: The Amendment to the Restated Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL by (a) the Board of
Directors of the Corporation having duly adopted a resolution setting forth such
Amendment and declaring its advisability and submitting it to the stockholders
of the Corporation for their approval, and (b) the stockholders of the
Corporation having duly adopted such Amendment at a Special Meeting of the
Stockholders, called and held upon notice in accordance with Section 222 of the
DGCL, by the affirmative vote of the holders of at least two-thirds of the
outstanding shares of stock entitled to vote generally in the election of
directors.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by ____________, its ____________, and attested by John
B. Smith, its Secretary this ____ day of ________, 1999.
INTERIM SERVICES INC.
By:
--------------------------------------
Name:
Title:
ATTEST:
- ---------------------------------------------------------
John B. Smith
Secretary
F-1
<PAGE> 147
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Interim's Certificate of Incorporation and By-laws provide that
Interim shall indemnify its directors and officers and, upon certain conditions
and in certain circumstances, may advance expenses, to the fullest extent
permitted by the General Corporation Law of the State of Delaware (the "DGCL"),
except that they do not permit indemnification or eliminate liability for: (a)
any breach of the duty of loyalty to Interim or its shareholders; (b) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) an act or omission expressly described in Section
174 of the DGCL; or (d) any transaction from which the director derived an
improper personal benefit. Generally, Section 145 of the DGCL authorizes
Delaware corporations, under certain circumstances, to indemnify their officers
and directors against all expenses and liabilities (including attorneys' fees)
incurred by them as a result of any suit brought against them in their capacity
as a director or an officer, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they
had no reasonable cause to believe their conduct was unlawful. A director or
officer may also be indemnified against expenses incurred in connection with a
suit by or in the right of the corporation if such director or officer 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 to the corporation.
The foregoing provisions may reduce the likelihood of derivative litigation
against directors, officers and employees of Interim and may discourage or
deter shareholders or management from bringing a lawsuit against directors and
officers for breaches of their fiduciary duties, even though such an action, if
successful, might otherwise have benefited Interim and its shareholders.
Interim also maintains director and officer liability insurance
pursuant to policies with aggregate limits of $45,000,000. Effective May 31,
1999, these limits will increase to $75,000,000.
ITEM 21. EXHIBITS
2.1 Agreement and Plan of Merger, dated as of March 24, 1999, as
amended, by and among Interim Services Inc., Interim Merger
Corporation and Norrell Corporation (included in the joint
proxy statement/prospectus as Appendix A).
3.1 Restated Certificate of Incorporation of the registrant, as
last amended May 18, 1998, filed as Exhibit 3.1 to the
registrant's Form 10-Q for the quarter ended June 26, 1998,
are incorporated herein by reference.
3.2 By-laws of registrant, as amended, filed as Exhibit 3.2 to
the registrant's Form 10-Q for the quarter ended September
27, 1996, are incorporated herein by reference.
4.1 Form of Stock Certificate, filed as Exhibit 4.3 to the
registrant's Form 10-K for the fiscal year ended December 27,
1996, is incorporated herein by reference.
4.2 Rights Agreement dated as March 17, 1994 between the
registrant and Boatmen's Trust Company, filed as Exhibit 1.1
to the registrant's Form 8-A filed April 11, 1994, is
incorporated herein by reference.
4.3 Certificate of Designation, Preferences and Rights filed with
the Secretary of State of the State of Delaware, filed as
Exhibit 2.1 to the registrant's Form 8-A filed April 11,
1994, is incorporated herein by reference.
4.4 Amendment No. 1, dated as of June 26, 1996, to Rights
Agreement dated March 17, 1994, between the registrant,
Boatmen's Trust Company and ChaseMellon Shareholder Services
L.L.C., filed as Exhibit 4.1(A) to the registrant's Form 10-Q
for the quarter ended September 27, 1996, is incorporated
herein by reference.
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4.5 Amendment No. 2, dated as of February 25, 1997, to Rights
Agreement dated March 17, 1994, between the registrant and
ChaseMellon Shareholder Services L.L.C., filed as Exhibit
4.1(B) to the registrant's Form 10-Q for the quarter ended
March 28, 1997, is incorporated herein by reference.
4.6 Articles Fourth, Fifth, Seventh, Eighth and Tenth of the
Restated Certificate of Incorporation of the registrant, as
last amended May 18, 1998, filed as Exhibit 4.6 to the
registrant's Form 10-Q for the quarter ended June 26, 1998,
are incorporated herein by reference.
4.7 Sections Four through Twelve and Thirty-five through
Forty-one of the By-laws of the registrant as amended, filed
as part of Exhibit 4.2 to registrant's Form S-3 filed
September 16, 1996, are incorporated herein by reference.
4.8 Certificate of Increase of Shares Designated as Participating
Preferred Stock, filed as Exhibit 2.2 to the registrant's
Form 8-A/A2, dated November 3, 1997, is incorporated herein
by reference.
4.9 Indenture, including form of Notes, dated as of May 27, 1998,
from the registrant to The Bank of New York with respect to
the registrant's 4 1/2% Convertible Subordinated Notes due
2005, issued or to be issued pursuant to the registrant's
Form S-3 dated April 23, 1998, filed on May 6, 1998, filed as
Exhibit 4.9 to the registrant's Form 10-Q for the quarter
ended June 26, 1998, is incorporated herein by reference.
4.10 Amendment No. 3, dated as of January 20, 1998, to Rights
Agreement dated as of March 17, 1994, between the registrant
and ChaseMellon Shareholder Services L.L.C., filed as Exhibit
4.10 to the registrant's Form 10-K for the fiscal year ended
December 25, 1998, is incorporated herein by reference.
5.1 Opinion of Baker & McKenzie as to the validity of the
issuance of the Interim common shares is filed herewith as
Exhibit 5.1.
8.1 Opinion of Baker & McKenzie as to certain federal income tax
consequences described in the joint proxy
statement/prospectus is filed herewith as Exhibit 8.1.
8.2 Opinion of Alston & Bird L.L.P. as to certain federal income
tax consequences described in the joint proxy
statement/prospectus is filed herewith as Exhibit 8.2.
10.1 1994 Stock Option Plan for Franchisees, Licensees and Agents,
as amended, filed as Exhibit 10.4A to the registrant's Form
S-3, filed on July 12, 1995, is incorporated herein by
reference.
10.2 Indemnification Agreement dated January 1, 1994, by and
between Interim Services Inc. and H&R Block, Inc., filed as
Exhibit 10.8 to the registrant's Form S-1 dated November 5,
1993, is incorporated herein by reference.
10.3 Employment Agreement dated as of November 18, 1998, by and
between Interim Services Inc. and Raymond Marcy, filed as
Exhibit 10.3 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.4 Credit Agreement between the registrant and NationsBank dated
as of May 1, 1997, filed as Exhibit 10.11 to the registrant's
Form 10-Q for the quarter ended March 28, 1997, is
incorporated herein by reference.
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<PAGE> 149
10.5 Recommended Cash Offer dated March 14, 1997, by J.P. Morgan
on behalf of Interim Services (UK) PLC, a wholly-owned
subsidiary of Interim Services Inc., for Michael Page Group
PLC filed as Exhibit 10.12 to the registrant's Form 10-Q for
the quarter ended June 27, 1997, is incorporated herein by
reference.
10.6 Interim Services Inc. 1997 Long Term Executive Compensation
and Outside Directors Stock Option Plan, filed as Exhibit I
to the registrant's Proxy Statement dated April 10, 1997, is
incorporated herein by reference.
10.7 Interim Services Inc. Incentive Plan for 162(m) Executives,
filed as Exhibit III to the registrant's Proxy Statement
dated April 10, 1997, is incorporated herein by reference.
10.8 Restated Stock Purchase Agreement, dated September 26, 1997
among Interim Services, Inc., Catamaran Acquisition Corp. and
Cornerstone Equity Investors IV, L.P., filed as Exhibit 2.1
to the registrant's Form 8-K dated September 26, 1997 and
filed October 13, 1997, is incorporated herein by reference.
10.9 The Deferred Compensation Plan of Interim Services Inc.,
filed as Exhibit 4.1 to the registrant's Form S-8 filed on
July 23, 1997, is incorporated herein by reference.
10.10 The Interim Services Inc. Outside Directors' Compensation
Plan dated July 1, 1998, filed as Exhibit 10.10 to the
registrant's Form 10-K for the fiscal year ended December 25,
1998, is incorporated herein by reference.
10.11 The 1997 Stock Purchase Assistance Plan for executives of the
registrant, filed as Exhibit 10.16 to the registrant's Form
10-K for the fiscal year ended December 26, 1997, is
incorporated herein by reference.
10.12 Amendment Agreement No. 1, dated as June 1, 1997, to the
Credit Agreement dated as of May 1, 1997, between the
registrant and NationsBank filed as Exhibit 10.17 to the
registrant's Form 10-K for the fiscal year ended December 26,
1997, is incorporated herein by reference.
10.13 Interim Services Inc. 1998 Stock Incentive Plan, filed as
Exhibit B to the registrant's Proxy Statement dated March 24,
1998, is incorporated herein by reference.
10.14 Amendment Agreement No. 2, dated as of May 21, 1998, to the
Credit Agreement, dated as of May 1, 1997, between the
registrant and NationsBank, filed as Exhibit 10.15 to the
registrant's Form 10-Q for the quarter ended June 26, 1998,
is incorporated herein by reference.
10.15 Amendment Agreement No. 3, dated as of May 21, 1998, to the
Credit Agreement, dated as of May 1, 1997 between the
registrant and NationsBank, filed as Exhibit 10.16 to the
registrant's Form 10-Q for the quarter ended June 26, 1998,
is incorporated herein by reference.
10.16 Recommended Cash Offer dated November 8, 1998 by Interim
Services Australia Pty Limited, a wholly-owned (indirect)
subsidiary of Interim Services Inc. for Computer Power Group
Limited, filed as Exhibit 10.16 to the registrant's Form 10-K
for the fiscal year ended December 25, 1998, is incorporated
herein by reference.
10.17 Amendment Agreement No. 4, dated as of October 8, 1998, to
the Credit Agreement, dated as of May 1, 1997, as amended,
between the registrant and NationsBank, filed as Exhibit
10.17 to the registrant's Form 10-K for the fiscal year ended
December 25, 1998 is incorporated herein by reference.
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<PAGE> 150
10.18 Employment Agreement dated as of November 18, 1998, by and
between Interim Services Inc. and Robert E. Livonius, filed
as Exhibit 10.18 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.19 Employment Agreement dated as of November 18, 1998, by and
between Interim Services Inc. and Roy G. Krause, filed as
Exhibit 10.19 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.20 Employment Agreement dated as of November 18, 1998, by and
between Interim Services Inc. and Gary Peck, filed as Exhibit
10.20 to the registrant's Form 10-K for the fiscal year ended
December 25, 1998, is incorporated herein by reference.
10.21 Employment Agreement dated as of November 18, 1998, by and
between Interim Services Inc. and Robert Evans, filed as
Exhibit 10.21 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.22 Change in Control Agreement dated as of November 18, 1998, by
and between Interim Services Inc. and Raymond Marcy, filed as
Exhibit 10.22 to the Registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.23 Change in Control Agreement dated as of November 18, 1998, by
and between Interim Services Inc. and Robert E. Livonius,
filed as Exhibit 10.23 to the registrant's Form 10-K for the
fiscal year ended December 25, 1998, is incorporated herein
by reference.
10.24 Change in Control Agreement dated as of November 18, 1998, by
and between Interim Services Inc. and Roy G. Krause, filed as
Exhibit 10.24 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.25 Change in Control Agreement dated as of November 18, 1998, by
and between Interim Services, Inc. and Gary Peck, filed as
Exhibit 10.25 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
10.26 Change in Control Agreement dated as of November 18, 1998, by
and between Interim Services Inc. and Robert Evans, filed as
Exhibit 10.26 to the registrant's Form 10-K for the fiscal
year ended December 25, 1998, is incorporated herein by
reference.
11. See "Earnings Per Share" in the Notes to Consolidated
Financial Statements included at page 50 to the Registrant's
Form 10-K for the fiscal year ended December 25, 1998 and
incorporated herein by reference.
21. Subsidiaries of Registrant is filed herewith as Exhibit 21.
23.1 Consent of Deloitte & Touche LLP is filed herewith as Exhibit
23.1.
23.2 Consent of Arthur Andersen LLP is filed herewith as Exhibit
23.2.
23.3 Consent of Baker & McKenzie is included herewith in Exhibits
5.1 and 8.1.
23.4 Consent of Alston & Bird LLP is included herewith in Exhibit
8.2.
23.5 Consent of NationsBanc Montgomery Securities LLC is filed
herewith as Exhibit 23.5.
23.6 Consent of Goldman, Sachs & Co. is filed herewith as Exhibit
23.6.
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<PAGE> 151
24.1 Power of Attorney of certain directors and officers of the
Registrant (included in the signature section of Part II of
this Registration Statement).
99.1 Irrevocable Proxy and Merger Consideration Election Agreement
dated March 24, 1999 (included in the joint proxy
statement/prospectus as Appendix B).
99.2 Form of Proxy of Interim Services Inc.
99.3 Form of Proxy of Norrell Corporation.
99.4 Election Form.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933:
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offering therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(5) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this registration statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
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<PAGE> 152
(6) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (6) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment 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.
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the 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 Act and is, therefore, unenforceable. If 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 Act and will be governed by the final
adjudication of such issue.
(8) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(9) To supply by means of post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
became effective.
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<PAGE> 153
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in Fort
Lauderdale, Florida, on the 24th day of May 1999.
INTERIM SERVICES INC.
By: /s/ Raymond Marcy
------------------------------------
Raymond Marcy, Chairman, Chief
Executive Officer and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Raymond Marcy and Roy G. Krause or any one of them, as his or her true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution for him or her and in his or her name, place and stead in any
and all capacities to execute in the name of each such person who is then an
officer or director of the Registrant any and all amendments (including
post-effective amendments) to this Registration Statement, and any registration
statement relating to the offering hereunder pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same with all exhibits
thereto and other documents in connection therewith with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each
of them full power and authority to do and perform each and every act and thing
required or necessary to be done in and about the premises as fully as he or
she might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ STEVEN S. ELBAUM Director May 24, 1999
- ----------------------------------------
Steven S. Elbaum
/S/ WILLIAM F. EVANS Director May 24, 1999
- ----------------------------------------
William F. Evans
/S/ JEROME B. GROSSMAN Director May 24, 1999
- ----------------------------------------
Jerome B. Grossman
/S/ CINDA A. HALLMAN Director May 24, 1999
- ----------------------------------------
Cinda A. Hallman
/S/ J. IAN MORRISON Director May 24, 1999
- ----------------------------------------
J. Ian Morrison
</TABLE>
II-7
<PAGE> 154
<TABLE>
<CAPTION>
<S> <C> <C>
/S/ A. MICHAEL VICTORY Director May 24, 1999
- ----------------------------------------
A. Michael Victory
/S/ RAYMOND MARCY Director May 24, 1999
- ----------------------------------------
Raymond Marcy
/S/ RAYMOND MARCY Chairman, President and Chief May 24, 1999
- ---------------------------------------- Executive Officer (principal
Raymond Marcy executive officer)
/S/ ROY G. KRAUSE Executive Vice President and Chief May 24, 1999
- ---------------------------------------- Financial Officer (principal
Roy G. Krause financial officer)
/S/ MARK W. SMITH Vice President - Finance (principal May 24, 1999
- ---------------------------------------- accounting officer)
Mark W. Smith
</TABLE>
II-8
<PAGE> 155
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Merger, dated as of March 24, 1999, as
amended, by and among Interim Services Inc., Interim Merger
Corporation and Norrell Corporation (included in the joint
proxy statement/prospectus as Appendix A).
5.1 Opinion of Baker & McKenzie as to the validity of the
issuance of the Interim common shares.
8.1 Opinion of Baker & McKenzie as to certain federal income tax
consequences described in the joint proxy
statement/prospectus.
8.2 Opinion of Alston & Bird LLP as to certain federal income tax
consequences described in the joint proxy
statement/prospectus.
21. Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Baker & McKenzie (included in Exhibits 5.1 and
8.1).
23.4 Consent of Alston & Bird LLP (included in Exhibit 8.2).
23.5 Consent of NationsBanc Montgomery Securities LLC.
23.6 Consent of Goldman, Sachs & Co.
24.1 Power of Attorney of certain directors and officers of the
Registrant (included in the signature section of Part II of
this Registration Statement).
99.1 Irrevocable Proxy and Merger Consideration Election Agreement
dated March 24, 1999 (included in the joint proxy
statement/prospectus as Appendix B).
99.2 Form of Proxy of Interim Services Inc.
99.3 Form of Proxy of Norrell Corporation.
99.4 Election Form.
II-9
<PAGE> 1
EXHIBIT 5.1
[BAKER & MCKENZIE LETTERHEAD]
May 24, 1999
Interim Services Inc.
2050 Spectrum Boulevard
Ft. Lauderdale, Florida 33309
Gentlemen:
Interim Services Inc., a Florida corporation (the "Company"), has
filed with the Securities and Exchange Commission a Registration Statement on
Form S-4 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"). The Registration Statement relates to the registration by
the Company of up to 24,158,149 shares of Common Stock, par value $.01 per
share (the "Common Stock"), of the Company to be issued in accordance with the
terms of the Agreement and Plan of Merger, dated as of March 24, 1999, as
amended (the "Merger Agreement"), by and among the Company, Interim Merger
Corporation, a wholly-owned subsidiary of the Company, and Norrell Corporation,
which provides for the merger of Norrell Corporation with and into Interim
Merger Corporation. We have acted as counsel to the Company in connection with
the preparation and filing of the Registration Statement.
In connection with the Registration Statement, we have examined,
considered and relied upon copies of the following documents (collectively, the
"Documents"): (i) the Company's Certificate of Incorporation, as amended, and
By-laws, as amended; (ii) resolutions of the Company's Board of Directors
authorizing the Agreement and Plan of Merger and the consummation of the
transactions contemplated thereby; (iii) the Registration Statement and
schedules and exhibits thereto and (iv) such other documents and instruments
that we have deemed necessary for the expression of the opinion herein
contained. In making the foregoing examinations, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies and the veracity of the
representations and warranties contained in the documents. As to various
questions of fact material to the opinion expressed below, we have relied, to
the extent we deemed reasonably appropriate, upon the representations or
certificates of officers and/or directors of the Company and upon documents,
records and instruments furnished to us by the Company, without independently
verifying the accuracy of such certificates, documents, records or instruments.
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that the Common Stock registered by the Company
pursuant to the Registration Statement has been duly and validly authorized
and, when issued in accordance with the Merger Agreement, will be fully-paid
and non-assessable.
Although we have acted as counsel to the Company in connection with
the preparation and filing of the Registration Statement, our engagement has
been limited to certain matters about which we have been consulted.
Consequently, there may exist matters of a legal nature involving the Company
as to which we have not been consulted and have not represented the Company. We
express no opinion as to the laws of any jurisdiction other than the laws of
the State of Florida, the General Corporation Law of the State of Delaware and
federal laws of the United States. This opinion letter is limited to the
matters stated herein and no opinions may be implied or inferred beyond the
matters expressly stated herein. The opinion expressed herein is given as of
this date, and we assume no obligation to update or supplement our opinion to
reflect any facts or circumstances that may come to our attention or any change
in law that may occur or become effective at a later date.
<PAGE> 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption
"Legal Matters" in the prospectus comprising a part of the Registration
Statement. In giving such consent, we do not thereby admit that we are included
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations promulgated thereunder.
Very truly yours,
BAKER & MCKENZIE
/s/ Baker & McKenzie
<PAGE> 1
EXHIBIT 8.1
[BAKER & MCKENZIE LETTERHEAD]
May 24, 1999
Interim Services Inc.
2050 Spectrum Blvd.
Ft. Lauderdale, FL 33309
Re: Federal Income Tax Treatment of the Merger of
Norrell Corporation with and into Interim Merger
Corporation in Connection with the Agreement and
Plan of Merger by and among Interim Services, Inc.,
INTERIM MERGER CORPORATION AND NORRELL CORPORATION
Ladies and Gentlemen:
We have acted as counsel to Interim Services Inc., a Delaware
corporation ("Interim"), in connection with the Agreement and Plan of Merger,
dated as of March 24, 1999 as amended as of April 27, 1999 and as of May 24,
1999 (referred to as the "Agreement") by and among Interim, Interim Merger
Corporation and Norrell Corporation ("Norrell"). At your request, in connection
with the filing of the Registration Statement on Form S-4 filed with the
Securities and Exchange Commission, as amended through the date hereof, in
connection with the Merger (the "Registration Statement"), we are rendering our
opinion with regard to certain United States federal income tax consequences of
the Merger. All capitalized terms used herein, unless otherwise defined, shall
have the meaning ascribed to them in the Agreement.
In arriving at the opinions expressed below, we have examined and
relied upon the accuracy and completeness of the facts, information, covenants
contained in originals, or copies certified or otherwise identified to our
satisfaction, of the Agreement, the Registration Statement and the Joint Proxy
Statement/Prospectus included therein (together, the "Proxy Statement").
Without limiting the generality of the foregoing, in arriving at the
opinions expressed below, we have also examined and relied, without independent
verification of the statements contained therein, on certificates from each
Interim and Norrell regarding certain tax matters, and we have assumed the
accuracy of the representations and statements made in the each of the
foregoing.
<PAGE> 2
Interim Services, Inc.
May 24, 1999
Page 2
In arriving at the opinions expressed below, we have assumed, without
making any independent investigations, that all such documents as furnished to
us are complete and authentic, that the signatures on all documents are
genuine, and that all such documents have been, or in the case of drafts, will
be, duly authorized, executed and delivered. We have further assumed that the
transactions will be consummated and the parties will act in accordance with
these documents.
Based on and subject to the foregoing, the opinion contained in the
Proxy Statement under the caption "The Merger -- Certain U.S. Federal Income
Tax Consequences," except as otherwise indicated, represents our opinion as to
the material U.S. federal income tax consequences of the Merger under
applicable law.
We hereby consent to the use of our name and the making of statements
with respect to us under the captions "Summary -- Certain U.S. Federal Income
Tax Consequences" and " in the Proxy Statement and the filing of this opinion
as an exhibit to the Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Sincerely,
Baker & McKenzie
By: /s/ James H. Barrett,
-----------------------------------------
James H. Barrett, a Partner
<PAGE> 1
EXHIBIT 8.2
ALSTON&BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-4777
www.alston.com
May 24, 1999
Norrell Corporation
3535 Piedmont Road N.E.
Atlanta, Georgia 30305
Re: PROPOSED MERGER INVOLVING INTERIM SERVICES INC.
AND NORRELL CORPORATION
Ladies and Gentlemen:
We have served as counsel to Norrell Corporation, a Georgia corporation
("Norrell") in connection with the reorganization involving Norrell, Interim
Services Inc., a Delaware corporation ("Interim") and Interim Merger
Corporation, a Delaware corporation ("Interim Merger Sub"), pursuant to the
Agreement and Plan of Merger by and among Norrell, Interim Merger Sub and
Interim, dated as of March 24, 1999 and amended as of April 27, 1999 and as of
May 24, 1999 (the "Agreement"), which sets forth the terms and conditions of the
acquisition of Norrell by Interim pursuant to the merger of Norrell with and
into Interim Merger Sub (the "Merger"). At your request, in connection with the
filing of the Registration Statement on Form S-4 filed with the Securities and
Exchange Commission, as amended through the date hereof, in connection with the
Merger (the "Registration Statement"), we are rendering our opinion with respect
to certain United States federal income tax consequences of the Merger. All
terms used herein without definition shall have the respective meanings
specified in the Agreement, and unless otherwise specified, all section
references herein are to the Internal Revenue Code of 1986, as amended (the
"Code").
In rendering the opinions expressed herein, we have examined such
documents as we deemed appropriate, including the Agreement and the
Registration Statement including the Proxy Statement/Prospectus for a special
meeting of stockholders of Norrell (together the "Proxy Statement"). In
addition, we have assumed, that the Agreement and the Registration Statement
accurately and completely describe the Merger and that the Merger will be
consummated in accordance with the Agreement and the Registration Statement.
<TABLE>
<CAPTION>
<S> <C> <C>
1211 East Morehead Street 3605 Glenwood Avenue, Suite 310 601 Pennsylvania Avenue, N.W.
P. O. Drawer 34009 P. O. Drawer 31107 North Building, 11th Floor
Charlotte, NC 28234-4009 Raleigh, NC 27622-1107 Washington, DC 20004-2601
704-331-6000 919-420-2200 202-756-3300
Fax: 704-334-2014 Fax: 919-881-3175 Fax: 202-756-3333
</TABLE>
<PAGE> 2
Norrell Corporation
Page 2
In rendering the opinions expressed herein, we have relied, with the
consent of Norrell and Interim, upon the accuracy and completeness of the
factual statements and factual representations (which factual statements and
factual representations we have neither investigated nor verified) contained in
the certificates of Norrell and Interim to us, dated as of the date hereof
(together, the "Certificates"), which we have assumed are correct, complete and
accurate as of the date hereof and will be correct, complete and accurate as of
the Effective Time.
Based on and subject to the foregoing, we are of the opinion that the
discussion of the U.S. federal income tax consequences contained in the Proxy
Statement under the caption "The Merger - Certain U.S. Federal Income Tax
Consequences," except as otherwise indicated, is accurate in all material
respects and represents our opinion as to the material U.S. federal income tax
consequences of the Merger. We hereby consent to the filing of this opinion as
an exhibit to the Proxy Statement and to the references and discussion of this
opinion and the references to the firm contained therein.
The opinions expressed herein are based upon existing statutory,
regulatory, and judicial authority, any of which may be changed at any time
with retroactive effect. The federal income tax consequences described herein
may not apply to certain stockholders of Norrell with special situations,
including, without limitation, stockholders who hold their Norrell stock other
than as a capital asset, who received their Norrell stock upon the exercise of
employee stock options or otherwise as compensation, who hold their Norrell
stock as part of a "straddle" or "conversion transaction" for federal income
tax purposes, or are foreign persons, insurance companies, or securities
dealers.
In addition, our opinions are based solely on the documents that we
have examined and the factual statements and factual representations set out in
the Certificates which we have assumed are true on the date hereof and will be
true at the Effective Time. Our opinions cannot be relied upon if any of the
facts pertinent to the federal income tax treatment of the Merger stated in the
Agreements or any of the factual statements or factual representations set out
in the Certificates is, or becomes inaccurate.
<PAGE> 3
Norrell Corporation
Page 3
Our opinions are limited to the tax matters specifically covered
thereby, and we have not been asked to address, nor have we addressed, any
other tax consequences of the Merger, including for example any issues related
to intercompany transactions, changes in accounting methods resulting from the
Merger, the conversion of options, or the consequences of the Merger under
state, local or foreign law.
Our opinion is premised on the assumption that Interim will not
undertake certain actions that it has represented to us it will not undertake
unless it receives a subsequently issued opinion from counsel. If Interim does
undertake such actions, then Norrell and the shareholders of Norrell must rely
on an opinion subsequently issued in connection with such actions regarding the
status of the Merger as a reorganization under Section 368(a) of the Code.
These opinions are provided by Alston & Bird LLP solely for the
benefit and use of Norrell and the shareholders of Norrell. No other party or
person is entitled to rely on the opinions.
Very truly yours,
ALSTON & BIRD LLP
By: /s/ Alston & Bird LLP
----------------------------------
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF INTERIM SERVICES INC.
Following is a list of the direct and indirect subsidiaries of Interim Services
Inc., a Delaware corporation. Certain inactive subsidiaries have been excluded
from the list below as such subsidiaries, when considered in the aggregate as
one subsidiary, would not constitute a "significant subsidiary." All active
subsidiaries do business under their corporate name listed below, or close
derivatives thereof, except where indicated otherwise:
<TABLE>
<CAPTION>
<S> <C>
Interim Financial Corporation .....................................................................Delaware (1)
Interim Real Estate Solutions Inc. .................................................................Florida (1)
Interim Services (Europe) Inc. ....................................................................Delaware (1)
Interim U.S. Inc. (f/k/a Interim Technology Inc.) .................................................Florida (1)
Interim Technology (UK) Limited .............................................................United Kingdom (1)
Michael Page International Inc. ...................................................................Delaware (1)
Rich Field Agency, Inc. ............................................................................Florida (1)
Saratoga Institute, Inc..........................................................................California (1)
Spectrum Financial Corporation ....................................................................Delaware (1)
Spectrum Insurance Company Ltd. .............................................................Cayman Islands (1)
Michael Page International Pte Ltd................................................................Singapore (1)
Interim Assessment Services Inc. (f/k/a HR Easy, Inc.).......................................North Carolina (1)
Interim Acquisition Corporation....................................................................Delaware (1)
Career Temporaries, Inc...........................................................................Louisiana (1)
Interim Merger Corporation.........................................................................Delaware (1)
Atrium (U.S.-B) Inc................................................................................Delaware (1)
Interim Services Atlantic LLC .....................................................................Delaware (2)
Interim Services Pacific LLC ......................................................................Delaware (2)
Interim Technology (Asia) Pte Ltd. ...............................................................Singapore (3)
Michael Page Group Plc ......................................................................United Kingdom (4)
Interim UK Limited...........................................................................United Kingdom (4)
Atrium (NL-A) Inc (f/k/a Interim Temporary Personnel Inc.)..........................................Florida (4)
Interim Personnel B.V. (f/k/a Ago Uitzendbureau B.V.)...........................................Netherlands (5)
Interim Services Australia Pty Limited............................................................Australia (5)
Interim Flexsupport B.V. (f/k/a Interim Detachering B.V. )......................................Netherlands (5)
Interim Registratie B.V. (f/k/a Interim Services Netherlands B.V.) .............................Netherlands (5)
Ouranos Informatica Groep B.V...................................................................Netherlands (5)
Tutor Recursos Humanos ETT, S.L.......................................................................Spain (5)
Tutor Seleccion, S.L..................................................................................Spain (5)
Michael Page Recruitment Group Ltd ..........................................................United Kingdom (6)
Plusbox Limited..............................................................................United Kingdom (6)
Michael Page Holdings Ltd ...................................................................United Kingdom (7)
Accountancy Additions (North) Ltd............................................................United Kingdom (8)
Michael Page UK Ltd .........................................................................United Kingdom (8)
Michael Page Ltd ............................................................................United Kingdom (9)
Sales Recruitment Specialist Ltd ............................................................United Kingdom (9)
Questor International Ltd ...................................................................United Kingdom (9)
Michael Page International (Italia) SRL ..............................................................Italy (10)
Michael Page (Espana) SA .............................................................................Spain (10)
Michael Page International (France) SA ..............................................................France (10)
Page Interim SA ......................................................................................Spain (10)
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
<S> <C>
Michael Page International (Australia) Pty Ltd ...................................................Australia (10)
Michael Page International (Deutschland) GmbH ......................................................Germany (10)
Michael Page International (Hong Kong) Ltd .......................................................Hong Kong (10)
Michael Page International (Nederland) B.V. ....................................................Netherlands (10)
Michael Page International (New Zealand) Ltd....................................................New Zealand (10)
Page Interim SA .....................................................................................France (11)
Page Interim (Banking) EURL..........................................................................France (12)
Page Interim (East) EURL ............................................................................France (12)
Page Interim (South) EURL............................................................................France (12)
Page Interim (West) EURL ............................................................................France (12)
Business Interim EURL ...............................................................................France (12)
Compagnie Du Recrutor EURL ..........................................................................France (13)
Societe Des Nouveaux Recruteurs EURL ................................................................France (13)
Michael Page Advertising EURL .......................................................................France (13)
MP Services EURL ....................................................................................France (13)
Les Recrutuers Reunis EURL...........................................................................France (13)
Michael Page Conseil Informatique EURL...............................................................France (13)
Crone Corkill Group PLC......................................................................United Kingdom (14)
C.C. Agency Services Limited.................................................................United Kingdom (15)
Crone Corkill Limited........................................................................United Kingdom (15)
Interim Office Professionals Limited (f/k/a Hobstones Limited)...............................United Kingdom (15)
Interim Technology Limited (f/k/a Westwood Young Limited)....................................United Kingdom (15)
Interim On-Premise (UK) Ltd .................................................................United Kingdom (15)
ONS Nederlanse Software Bedrijf (ONS) B.V.......................................................Netherlands (16)
Maintain Software Management B.V................................................................Netherlands (17)
Pontos Project ManageMens B.V...................................................................Netherlands (17)
Q&B Serving the Client B.V......................................................................Netherlands (17)
Ouranos Enterprises to be B.V...................................................................Netherlands (17)
Kronos Software Engineering B.V.................................................................Netherlands (17)
Novos Joined IT Generations B.V.................................................................Netherlands (17)
Screenup Client Engineering B.V.................................................................Netherlands (17)
Novos Noord Nederland B.V.......................................................................Netherlands (18)
Maintain Operational Services B.V...............................................................Netherlands (19)
Interim Technology Group Limited (f/k/a Computer Power Group Limited).............................Australia (20)
Interim Technology Solutions Pty Ltd (f/k/a Computer Power Pty Ltd)...............................Australia (21)
Interim Technology Associates Pty Ltd (f/k/a Computer People Pty Ltd).............................Australia (21)
Interim Technology Education Pty Ltd (f/k/a Computer Power Education Pty Ltd).....................Australia (21)
Equus People Pty Ltd..............................................................................Australia (21)
Emppay Pty Ltd....................................................................................Australia (21)
CP Software Export Pty Ltd........................................................................Australia (21)
Parity People Pty Ltd.............................................................................Australia (21)
Edilina Pty Ltd...................................................................................Australia (21)
Computer Power Group (S) Pte Ltd..................................................................Singapore (21)
MTE Management Technology Education Pty Ltd.......................................................Australia (22)
Computer Power Education Pty Ltd................................................................New Zealand (22)
MTE Management Technology Education Pty Ltd.....................................................New Zealand (22)
Parity People Pty Ltd...........................................................................New Zealand (23)
CP International Limited..........................................................................Hong Kong (24)
Computer Power Educational Services Limited.......................................................Hong Kong (24)
DP Recruitment Services (S) Pte Ltd...............................................................Singapore (24)
CPG Computer Power Group (M) SDN BHD ..............................................................Malaysia (24)
Interim Services Worldwide Holding B.V. ........................................................Netherlands (25)
Accountancy Additions Ltd ...................................................................United Kingdom (26)
</TABLE>
<PAGE> 3
Notes to Subsidiaries of Interim Services Inc.:
1. Subsidiary of Interim Services Inc.
2. Sole member of Interim U.S. Inc. (f/k/a Interim Technology Inc.)
3. Subsidiary of Interim U.S. Inc. (f/k/a Interim Technology Inc.) (50%) and
third party (50%)
4. Subsidiary of Interim Services (Europe) Inc.
5. Subsidiary of Interim Services Worldwide Holding B.V.
6. Subsidiary of Michael Page Group Plc
7. Subsidiary of Michael Page Recruitment Group Ltd
8. Subsidiary of Michael Page Partnership Ltd (an inactive subsidiary)
9. Subsidiary of Michael Page (UK) Ltd
10. Subsidiary of Michael Page International Holdings Ltd
11. Subsidiary of LPM Professional Recruitment Ltd (an inactive subsidiary)
12. Subsidiary of Page Interim SA (France)
13. Subsidiary of Michael Page International (France) SA
14. Subsidiary of Plusbox Limited
15. Subsidiary of Crone Corkill Group PLC
16. Subsidiary of Ouranos Informatica Groep B.V. (25%) and third parties (75%)
17. Subsidiary of Ouranos Informatica Groep B.V.
18. Subsidiary of Novos Joined IT Generations B.V.
19. Subsidiary of Maintain Software Management B.V.
20. Subsidiary of Interim Services Australia Pty Limited
21. Subsidiary of Interim Technology Group Limited (f/k/a Computer Power Group
Limited)
22. Subsidiary of Interim Technology Educations Pty Ltd (f/k/a Computer Power
Education Pty Ltd)
23. Subsidiary of Parity People Pty Ltd (Australia)
24. Subsidiary of Computer Power Group (S) Pte Ltd
25. Subsidiary of Atrium (NL-A) Inc., f/k/a/ Interim Temporary Personnel Inc.
26. Subsidiary of Michael Page Partnership Ltd (90%) and the Company's
directors (10%)
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Interim Services Inc. on Form S-4 of our report dated February 4, 1999,
appearing in the Annual Report on Form 10-K of Interim Services Inc. for the
year ended December 25, 1998 and to the reference to us under the heading
"Experts" in the Prospectus, which is a part of this Registration Statement.
\s\ Deloitte & Touche LLP
Fort Lauderdale, Florida
May 24, 1999
<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 report dated December 15, 1998
included in Norrell Corporation's Form 10-K for the year ended November 1, 1998
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
May 24, 1999
<PAGE> 1
EXHIBIT 23.5
BANC OF AMERICA SECURITIES LLC
FORM OF OPINION INCLUSION CONSENT
May 24, 1999
Members of the Board of Directors
Interim Services Inc.
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion letter dated March
24, 1999 to the Board of Directors of Interim Services Inc. (the "Company")
regarding the merger of Norrell Corporation with and into a wholly-owned
subsidiary of the Company, in the Company's Registration Statement on Form S-4
(the "Registration Statement") and to the references therein to our firm and to
our opinion under the headings "Summary -- Opinions of Financial Advisors," "The
Merger -- Background of the Merger," "The Merger -- Reasons for the Merger and
Recommendations to the Board of Directors" and "The Merger -- Opinions of
Financial Advisors -- Interim." In giving the foregoing consent, we do not
admit (i) that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended (the "Securities
Act"), or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, and (ii) that we are experts with respect to any part
of the Registration Statement within the meaning of the term "experts" as used
in the Securities Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Very truly yours,
Banc of America Securities LLC
--------------------------------------
Banc of America Securities LLC
(formerly known as NationsBanc
Montgomery Securities LLC)
<PAGE> 1
EXHIBIT 23.6
PERSONAL AND CONFIDENTIAL
May 24, 1999
Board of Directors
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Re: Registration Statement on Form S-4 of Interim Services Inc.
relating to shares of Common Stock, par value $0.01 per share,
of Interim Services Inc. being registered in connection with
the below-referenced Agreement and Plan of Merger.
Ladies and Gentlemen:
Reference is made to our opinion letter dated March 24, 1999 with respect to the
fairness from a financial point of view to the holders of the outstanding shares
of Common Stock, no par value (the "Shares"), of Norrell Corporation (the
"Company") of the exchange ratio of 0.9 shares of Common Stock, par value $0.01
per share, of Interim Services Inc. ("Buyer") to be received for each Share
pursuant to the Agreement and Plan of Merger, dated as of March 24, 1999, among
Buyer, Interim Merger Corporation, a wholly-owned subsidiary of Buyer, and the
Company.
The foregoing opinion letter is provided for the information and assistance of
the Board of Directors of the Company in connection with its consideration of
the transaction contemplated therein and is not to be used, circulated, quoted
or otherwise referred to for any other purpose, nor is it to be filed with,
included in or referred to in whole or in part in any registration statement,
proxy statement or any other document, except in accordance with our prior
written consent. We understand that the Company has determined to include our
opinion in the above-referenced Registration Statement.
In that regard, we hereby consent to the reference to the opinion of our Firm
under the captions "The Merger Background of the Merger" and "- Opinion of
Goldman, Sachs & Co." and to the inclusion of the foregoing opinion in the
above-mentioned Registration Statement. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Goldman, Sachs & Co.
- ---------------------------------
(GOLDMAN, SACHS & CO.)
<PAGE> 1
Exhibit 99.2
INTERIM SERVICES INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF INTERIM SERVICES INC.
The undersigned, a shareholder of INTERIM SERVICES INC., a Delaware
corporation, hereby appoints Raymond Marcy, Roy G. Krause and John B. Smith,
and each of them, as the proxy or proxies of the undersigned, each with full
power of substitution, and hereby authorizes each of them to represent and to
vote all of the Interim common shares that the undersigned is entitled to vote
at the Special Meeting of Shareholders of Interim to be held at 10:00 a.m.
(Eastern Daylight Time) on July 1, 1999 at the executive offices of Interim,
2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309, and at any
adjournments or postponements thereof, on the following proposals as designated
below and, in their discretion, on such other matters as may properly come
before the Special Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE APPROVAL OF EACH OF THE PROPOSALS, AND WILL BE VOTED IN THE
DISCRETION OF THE PROXIES APPOINTED HEREBY ON ANY OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE SPECIAL MEETING.
YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY.
(Continued and to be SIGNED on the reverse side)
<PAGE> 2
(Continued from other side)
The Board of Directors unanimously recommends a vote FOR the approval
of each of Proposals 1, 2 and 3.
1. Proposal to approve the merger in accordance with the Agreement and Plan of
Merger, dated as of March 24, 1999, and as amended on April 27, 1999 and on May
24, 1999, by and among Interim Services Inc., Interim Merger Corporation, a
Delaware corporation and a wholly-owned subsidiary of Interim Services Inc., and
Norrell Corporation, a Georgia corporation, which provides for the merger of
Norrell Corporation with and into Interim Merger Corporation.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
2. Proposal to approve an amendment to Interim Services Inc.'s Certificate of
Incorporation increasing the authorized common shares of Interim Services Inc.
from 100,000,000 to 200,000,000.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
3. Proposal to approve an amendment to Interim Services Inc.'s Certificate of
Incorporation to correct an inconsistency in the Certificate of Incorporation
by deleting the requirement of the affirmative vote of two-thirds of the
outstanding common shares of Interim Services Inc. to amend, modify, alter or
repeal any provision of Interim's By-laws.
/ / VOTE FOR / / VOTE AGAINST / / ABSTAIN
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting and related joint proxy statement/prospectus.
Dated:
---------------------------------
---------------------------------------
(Print Name(s))
---------------------------------------
(Signature)
---------------------------------------
(Signature, if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even if you plan to attend the Special Meeting. If you are signing as an
attorney, executor, administrator, trustee or guardian, please indicate your
full title in this capacity. When shares are held by joint tenants, both
holders should sign this proxy. If you are a corporation, please indicate the
full name of the corporation and have this proxy signed by the corporation's
president or other authorized officer. If you are a partnership, please
indicate the full name of the partnership and have this proxy signed by an
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
2
<PAGE> 1
Exhibit 99.3
NORRELL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF NORRELL CORPORATION
The undersigned, a shareholder of NORRELL CORPORATION, a Georgia
corporation, hereby appoints C. Douglas Miller, Larry J. Bryan and Mark H.
Hain, and each of them, as the proxy or proxies of the undersigned, each with
full power of substitution, and hereby authorizes each of them to represent and
to vote all of the Norrell common shares that the undersigned is entitled to
vote at the Special Meeting of Shareholders of Norrell to be held at 10:00 a.m.
(Eastern Daylight Time) on July 1, 1999 at the executive offices of Norrell,
3535 Piedmont Road, N.E., Atlanta, Georgia 30305 and at any adjournments or
postponements thereof, on the following proposal as designated below and, in
their discretion, on such other matters as may properly come before the Special
Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSAL 1, AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES
APPOINTED HEREBY ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL
MEETING.
YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY.
(Continued and to be SIGNED on the reverse side)
<PAGE> 2
(Continued from other side)
The Board of Directors unanimously recommends a vote FOR the approval
of Proposal 1.
1. Proposal to approve the merger in accordance with the Agreement and Plan of
Merger, dated as of March 24, 1999, and as amended on April 27, 1999 and on May
24, 1999, by and among Interim Services Inc., a Delaware corporation, Interim
Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of
Interim Services Inc., and Norrell, which provides for the merger of Norrell
with and into Interim Merger Corporation.
/ / FOR / / AGAINST / / ABSTAIN
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting and related joint proxy statement/prospectus.
Dated:
---------------------------------
---------------------------------------
(Print Name(s))
---------------------------------------
(Signature)
---------------------------------------
(Signature, if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even if you plan to attend the Special Meeting. If you are signing as an
attorney, executor, administrator, trustee or guardian, please indicate your
full title in this capacity. When shares are held by joint tenants, both
holders should sign this proxy. If you are a corporation, please indicate the
full name of the corporation and have this proxy signed by the corporation's
president or other authorized officer. If you are a partnership, please
indicate the full name of the partnership and have this proxy signed by an
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
2
<PAGE> 1
EXHIBIT 99.4
CASH ELECTION FORM
In accordance with the terms of the Agreement and Plan of Merger,
dated as of March 24, 1999, as amended, by and among Interim Services Inc.,
Interim Merger Corporation, a wholly-owned subsidiary of Interim Services Inc.,
and Norrell Corporation, which provides for the merger of Norrell with and into
Interim Merger Corporation, THE UNDERSIGNED, A SHAREHOLDER OF NORRELL
CORPORATION, HEREBY ELECTS TO EXCHANGE THE FOLLOWING NUMBER OF NORRELL COMMON
SHARES FOR CASH:
Number of Shares _____________ (must be a multiple of 100)
Dated: ____________
---------------------------------------
(Print Name(s))
---------------------------------------
(Signature)
---------------------------------------
(Signature, if held jointly)
IMPORTANT:
Please mail or fax this election form for receipt by 5:00 p.m.,
eastern daylight time, on June 30, 1999 to the exchange agent at:
First Union National Bank
Corporate Trust Operations
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Fax: 1-704-590-7628
If you are signing as an attorney, executor, administrator, trustee
or guardian, please indicate your full title in this capacity. When shares are
held by joint tenants, both holders should sign this election form. If you are
a corporation, please indicate the full name of the corporation and have this
election form signed by the corporation's president or other authorized
officer. If you are a partnership, please indicate the full name of the
partnership and have this election form signed by an authorized person.
