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EXHIBIT 4
_______________________________________________________________________________
WARRANT AGREEMENT
BETWEEN
ADMINISTAFF, INC.
AND
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
Dated as of March 10, 1998
_______________________________________________________________________________
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT is made as of March 10, 1998, by and between
ADMINISTAFF, INC., a Delaware corporation (the "Company"), and AMERICAN EXPRESS
TRAVEL RELATED SERVICES COMPANY, INC., a New York corporation (the "Purchaser").
RECITALS:
A. The Company and the Purchaser have entered into a Securities
Purchase Agreement dated as of January 27, 1998 (the "Purchase Agreement"),
pursuant to which the Purchaser has agreed to purchase from the Company 693,126
Units (as hereinafter defined), each of which shall consist of one share of
Common Stock (as hereinafter defined) and 2.98 Warrants (as hereinafter
defined).
B. The Company and the Purchaser have agreed to enter into this
Agreement to supplement the terms and conditions set forth in the Purchase
Agreement which relate to the Warrants purchased thereunder.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions.
(a) Certain Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Affiliate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act.
"Business Day" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
New York, New York or Houston, Texas.
"Change of Control" means the occurrence of any of the following:
(a) any third party shall have acquired beneficial ownership of more than 30% of
the outstanding voting stock of the Company (within the meaning of Section 13(d)
or 14(d) of the Exchange Act); or (b) individuals who on the Closing Date were
directors of the Company (together with any replacement or additional directors
who were nominated or elected by a majority of directors then in office) cease
to constitute a majority of the Board of Directors of the Company.
"Closing Date" means March 10, 1998 the date of the Closing of the
purchase by the Purchaser of the Units in accordance with the Purchase
Agreement.
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"Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other class of capital stock of the
Company, however designated, that has the right (subject to any prior rights of
any class or series of preferred stock) to participate in any distribution of
the assets upon voluntary or involuntary liquidation, dissolution or winding up
of the Company or in the earnings of the Company without limit as to per share
amount, and shall include, without limitation, the presently authorized
60,000,000 shares of Common Stock, par value $0.01 per share.
"Company" is defined in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" is defined in the Warrant Certificates.
"Exercise Price" means the exercise price per Warrant as set forth in
the Warrant Certificate evidencing such Warrant and as adjusted from time to
time in accordance with this Agreement.
"Fair Market Value per Share" means the arithmetic mean of the
closing sales price of a share of Common Stock of the Company as reported by the
New York Stock Exchange Composite Transactions over the five trading days
immediately preceding the date of determination or, if not so trading, the fair
value as determined in good faith by the Board of Directors of the Company.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" means the Purchaser or any subsequent holder of Warrants or
Warrant Stock, to which the Warrants or Warrant Stock are transferred in
accordance with the provisions of this Agreement and the Purchase Agreement.
"Marketing Agreement" means the Marketing Agreement, dated as of the
date hereof, by and between the Company and the Purchaser in substantially the
form of Exhibit A attached to the Purchase Agreement.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association or any other entity, whether acting in an
individual, fiduciary or other capacity.
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"Purchase Agreement" is defined in the Recitals.
"Put Closing" is defined in Section 5(a).
"Put Exercise Notice" is defined in Section 5(a).
"Put Price" is defined in Section 5(a).
"Put Right" is defined in Section 5(a).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, between the Company and the Purchaser,
in substantially the form of Exhibit B attached to the Purchase Agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Unit" means an investment unit consisting of one share of
Common Stock and 2.98 Warrants.
"Warrant Certificates" means collectively, the certificates
evidencing (i) the Warrants with an Expiration Date of the third anniversary of
the Closing Date in the form of Exhibit A-1 attached hereto, (ii) the Warrants
with an Expiration Date of the fourth anniversary of the Closing Date in the
form of Exhibit A-2 attached hereto, (iii) the Warrants with an Expiration Date
of the fifth anniversary of the Closing Date in the form of Exhibit A-3 attached
hereto, (iv) the Warrants with an Expiration Date of the sixth anniversary of
the Closing Date in the form of Exhibit A-4 attached hereto, (v) the Warrants
with an Expiration Date of the seventh anniversary of the Closing Date in the
form of Exhibit A-5 attached hereto.
"Warrant Stock" means the securities which a Holder may
acquire upon exercise of a Warrant, together with any other securities which
such Holder may be issued in respect of any such securities, including, without
limitation, by way of any dividend or other distribution on such securities, any
split-up of such securities or a recapitalization, merger, consolidation, share
exchange, reorganization or other transaction or series of related transactions
in which shares of such securities are changed into or exchanged for securities
of another corporation.
"Warrants" means the 2,065,515 warrants each of which entitles
the holder thereof to purchase one share of Common Stock of the Company issued
to the Purchaser on the Closing Date pursuant to this Agreement and the Purchase
Agreement, which warrants shall be subject to adjustment and shall have the
rights, privileges and limitations set forth in this Agreement and in each
Warrant.
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(b) Terms Defined in Purchase Agreement. Unless otherwise
defined herein, capitalized terms used in this Agreement shall have the meanings
ascribed to such terms in the Purchase Agreement.
SECTION 2. Exercise of Warrants.
(a) A Warrant may be exercised by the Purchaser or any Holder
only in accordance with the terms and conditions of this Agreement and at any
time during the period beginning on the date hereof and ending on the Expiration
Date for such Warrant as set forth in the Warrant Certificate evidencing such
Warrant. The Warrant Certificates evidencing the Warrants issued to the
Purchaser on the Closing Date shall be identical except for the Expiration Date
and the Exercise Price. The Expiration Date for the Warrants shall be as
follows: the third anniversary of the Closing Date for 400,000 Warrants; the
fourth anniversary of the Closing Date for 400,000 Warrants; the fifth
anniversary of the Closing Date for 400,000 Warrants; the sixth anniversary of
the Closing Date for 400,000 Warrants; and the seventh anniversary of the
Closing Date for 465,515 Warrants. The Exercise Price for the Warrants shall be
as follows: $40 for the Warrants expiring on the third anniversary of the
Closing Date; $50 for the Warrants expiring on the fourth anniversary of the
Closing Date; $60 for the Warrants expiring on the fifth anniversary of the
Closing Date; $70 for the Warrants expiring on the sixth anniversary of the
Closing Date; and $80 for the Warrants expiring on the seventh anniversary of
the Closing Date.
(b) Subject to the terms and conditions hereof, Warrants may
be exercised pursuant to this Section 2 upon surrender to the Company at its
office designated for such purpose (the address of which is set forth in Section
13) of the certificate or certificates evidencing the Warrant(s) to be exercised
and upon payment to the Company of the aggregate Exercise Price for the number
of Warrants which are then exercised, provided that a Warrant may not be
exercised in part. Upon such surrender of Warrant Certificates and payment of
the Exercise Price in cash or by check payable to the Company, the Company shall
issue and cause to be delivered with all reasonable dispatch (and in any event
within three Business Days after such surrender) to or upon the written order of
the Holder, and in the name of the Holder or the Holder's nominee, a certificate
or certificates for the number of full shares of Warrant Stock issuable upon the
exercise of such Warrants, together with such other property (including cash)
and securities as may then be deliverable upon such exercise, including cash for
fractional Warrant Stock as provided in Section 11, provided that all such
Warrant Stock held by the Purchaser shall be subject to the restrictions set
forth in Sections 7 and 8 of the Purchase Agreement. Such certificate or
certificates shall be deemed to have been issued and the Person so named therein
shall be deemed to have become a holder of record of such Warrant Stock as of
the date of the surrender of such Warrant Certificates.
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(c) Subject to the terms and conditions hereof, the Warrants
shall be exercisable at the election of the Holders thereof, either in full or
from time to time in part (but in no event shall a Warrant be exercisable in
part), and in the event that a Warrant Certificate is exercised in respect of
fewer than all of the Warrants evidenced by such Warrant Certificate at any time
prior to the Expiration Date of such Warrant, a new Warrant Certificate
evidencing the remaining Warrant or Warrants will be issued and delivered
pursuant to the provisions of this Section 2(c). All Warrant Certificates
surrendered upon exercise of Warrants shall be canceled. The Company shall keep
copies of this Agreement and any notices received hereunder available for
inspection during normal business hours at its office. The Company will furnish,
at its expense, copies of this Agreement and all such notices, upon request, to
any Holder of any Warrant Certificates.
SECTION 3. Adjustment of Exercise Price and Number of Shares
of Warrant Stock Issuable. The Exercise Price and the number of shares of
Warrant Stock issuable upon the exercise of each Warrant are subject to
adjustment from time to time upon the occurrence of any of the events enumerated
in this Section 3.
(a) Adjustment for Change in Capital Stock of the Company. If
the Company (i) pays a dividend or makes a distribution on its Common Stock in
shares of any class of its capital stock, (ii) subdivides its outstanding shares
of Common Stock into a greater number of shares, (iii) combines its outstanding
shares of Common Stock into a smaller number of shares, (iv) makes a
distribution on its Common Stock in shares of its capital stock other than
Common Stock, or (v) issues to holders of its Common Stock by reclassification
of its Common Stock any shares of its capital stock, then the Exercise Price and
number of shares for which any Warrant may be exercised in effect immediately
prior to such action shall be proportionately adjusted so that the Holder of the
Warrant thereafter exercised may receive the aggregate number and kind of shares
of capital stock of the Company which it would have owned immediately following
such action if such Warrant had been exercised immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur, and shall become effective immediately after the record date in the case
of a dividend or distribution and immediately after the effective date in the
case of a subdivision, combination or reclassification. If after an adjustment
made pursuant to the second preceding sentence a Holder of a Warrant upon
exercise of such Warrant may receive shares of two or more classes of capital
stock of the Company, the Board of Directors of the Company shall determine in
the good faith exercise of its reasonable business judgment the allocation of
the adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those in this Section 3.
(b) Reorganization of the Company. In the event of any
capital reorganization, recapitalization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
entity, in which the Company does not continue as the surviving corporation or,
if it does so continue, its Common Stock does not remain outstanding, any
acquisition of capital stock of the Company by means of a share exchange, or the
sale, lease, transfer,
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conveyance or other disposition of all or substantially all of its assets to
another entity, then, as a condition of and concurrently with such
reorganization, recapitalization, reclassification, consolidation, merger, share
exchange or sale, lease, transfer, conveyance or other disposition, lawful and
adequate provision shall be made whereby the Holders of the Warrant Certificates
shall thereafter have the right to purchase and receive, on the basis and upon
the terms and conditions specified in this Agreement and in lieu of the Warrant
Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, such shares of stock, securities, cash
or property as would have been issued or payable with respect to or in exchange
for the number of shares of Warrant Stock purchasable and receivable immediately
prior to such transaction upon the exercise of the rights represented by the
Warrant Certificates if such Warrants had been exercised immediately prior to
such transaction. If such consolidation, merger, share exchange, sale, lease,
transfer, conveyance or other disposition is with any Person or group of Persons
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) who shall
have made a purchase, tender or exchange offer pursuant to which a majority of
the outstanding shares of Common Stock of the Company were validly tendered and
accepted, promptly after the consummation of such transaction, the Holders of
the Warrants shall be given a reasonable opportunity (and, in no event, less
than 30 days) to elect to receive the stock, securities, cash or property issued
or paid (or to be issued or paid) to holders of the Common Stock in accordance
with such offer. In any such case appropriate provision shall be made with
respect to the rights and interests of the Holders of the Warrants to the end
that the provisions of this Agreement (including, without limitation, provisions
for adjustment of the Exercise Price and of the number and type of securities
purchasable upon the exercise of the Warrants) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities, cash or
property thereafter deliverable upon the exercise of the Warrants. The Company
shall not effect any such consolidation, merger, share exchange or sale, lease,
transfer, conveyance or other disposition unless prior to or simultaneously with
the consummation thereof the successor entity (if other than the Company)
resulting from such consolidation, merger or share exchange or the entity
purchasing or otherwise acquiring such assets or shares (i) shall assume by a
supplemental Warrant Agreement, reasonably satisfactory in form, scope and
substance to the Holders (which shall be mailed or delivered to the Holders of
the Warrants at the last address of such Holders appearing on the books of the
Company) the obligation to deliver to such Holders such shares of stock,
securities, cash or property as, in accordance with the foregoing provisions,
such Holders may be entitled to purchase (the "Substitute Securities") and (ii)
shall assume all of the other obligations of the Company set forth in this
Agreement, the Purchase Agreement and the Registration Rights Agreement.
Following such assumption such obligations shall apply to the Substitute
Securities rather than to the Warrant Stock. If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant Agreement
is an Affiliate of the formed, surviving, transferee or lessee entity, such
issuer shall join the supplemental Warrant Agreement. The foregoing provisions
of this paragraph shall similarly apply to successive reorganizations,
recapitalizations, reclassifications, consolidations, mergers, share exchanges,
sales, leases, transfers, conveyances or other dispositions.
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SECTION 4. Covenants.
(a) Private Company Information. If the Company shall cease to
be subject to the periodic reporting obligations of the Exchange Act and for so
long as the Purchaser's Interest is at least five percent, the Company will
furnish, or will cause to be furnished, to each Holder copies of the following
financial statements, reports and information:
(i) promptly when available and in any event within 90
days after the close of each Fiscal Year, a consolidated
balance sheet at the close of such Fiscal Year, and related
consolidated statements of operations, stockholders' equity
and cash flows for such Fiscal Year, of the Company and the
Company Subsidiaries (with comparable information at the close
of and for the prior Fiscal Year), certified (in the case of
consolidated statements) without qualification by Ernst &
Young or other nationally recognized independent public
accountants; and
(ii) promptly when available and in any event within
45 days after the close of each Fiscal Quarter, consolidated
balance sheets at the close of such Fiscal Quarter, and
consolidated statements of operations, stockholders' equity
and cash flows for such Fiscal Quarter and for the period
commencing at the close of the previous Fiscal Year and ending
with the close of such Fiscal Quarter, of the Company and the
Company Subsidiaries (with comparable information at the close
of and for the corresponding Fiscal Quarter of the prior
Fiscal Year and for the corresponding portion of such prior
Fiscal Year), certified by the chief financial or executive
officer of the Company.
(b) Public Company Information. So long as the Company is
subject to the periodic reporting requirements of the Exchange Act and for so
long as the Purchaser's Interest is at least five percent, the Company will:
(i) file with the SEC on or before the required date all
regular or periodic reports required pursuant to the Exchange
Act; and
(ii) use its reasonable commercial efforts to make
publicly available information concerning the Company
sufficient to allow a Holder to dispose in accordance with
this Agreement and the Warrant Agreement of all or a portion
of the Warrant Stock pursuant to Rule 144 (or any successor
provision) promulgated by the SEC under the Securities Act.
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(c) Inconsistent Agreements. The Company will not, and will
not permit any Company Subsidiary to, take any action which would (i) impair or
adversely affect the right of a Holder to exercise the Warrants or (ii) breach
any of the covenants or agreements in this document.
(d) Governmental Approvals. The Company will use its
reasonable commercial efforts, and will cooperate with the Holders to, secure
all necessary consents, approvals, authorizations and exemptions from all
Governmental Authorities in connection with the transactions contemplated hereby
and the exercise of the Warrants and the issuance of shares of Common Stock upon
exercise of the Warrants.
(e) Termination of Rights upon Sale to the Public.
Notwithstanding anything to the contrary set forth herein, the obligations of
the Company set forth in this Section 4 shall terminate with respect to any
Holder (including an underwriter) acquiring any Warrants or Warrant Stock
pursuant to a registration statement declared effective by the SEC under the
Securities Act or in a sale effected pursuant to Rule 144 promulgated under the
Securities Act.
SECTION 5. Restrictions on Transfers.
(a) Transfers of Warrants.
(i) Without the prior written consent of the Company,
the Purchaser may not dispose of or transfer any Warrants now
or hereafter owned, whether by sale, assignment, gift, pledge,
encumbrance or otherwise, except (A) to a Subsidiary of the
Purchaser or to any entity of which the Purchaser is, directly
or indirectly, a Subsidiary (provided that such transferee
agrees to be bound by the transfer restrictions contained
herein), (B) in connection with the exercise of a Warrant in
accordance with the provisions of the Agreement and (C) in
connection with the exercise in accordance with Section
5(a)(ii) of a put of a Warrant to the Company after the
occurrence of a Change of Control.
(ii) Upon a Change of Control, each of the Purchaser
and any other Holders to which the Warrants were transferred
in accordance with Section 5(a) hereof shall individually have
the right (the "Put Right") to require the Company to purchase
all (but not less than all) of the Warrants owned by the
Purchaser and each such Holder. The Company shall notify each
Holder in writing, as promptly as practicable, but in any
event within three Business Days, after a Change in Control.
The Put Right may be exercised by the Purchaser and any Holder
by delivering a written notice, which notice shall be
irrevocable (the "Put Exercise Notice"), to the Company within
90 days after any Change of Control. The purchase price for
each Warrant purchased by the Company upon exercise of the Put
Right shall equal the Fair Market Value per Share as of the
date of the Change of Control minus the Exercise Price of such
Warrant (the "Put Price"). The purchase and sale of the
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Warrants upon exercise of the Put Rights shall be consummated
at a closing (the "Put Closing") that shall occur not later
than 15 days following the Put Exercise Notice. At the Put
Closing, the Purchaser and the Holders seeking to exercise the
Put Rights set forth herein shall surrender to the Company the
Warrant Certificates evidencing their Warrants. In exchange
therefor, (A) if the Put Price for the Warrants evidenced by a
Warrant Certificate is greater than zero, the Company shall
issue to the Holder of such Warrants Common Stock in an
amount, calculated based on the Fair Market Value per Share of
such Common Stock at the time of Change of Control, equal to
the Put Price for such Warrants multiplied by the number of
Warrants evidenced by such Warrant Certificate and (B) if the
Put Price for the Warrants evidenced by a Warrant Certificate
is not greater than zero, the Company shall not be obligated
to make any payment or issue any Common Stock to the Holder of
such Warrants. Prior to the delivery of a Put Exercise Notice,
the Put Right shall not restrict or limit or have any affect
on a Holder's right to exercise a Warrant pursuant to Section
2 hereof. If as a result of a Change in Control the Company is
not the surviving entity or shares of Common Stock are no
longer outstanding after a Change in Control, then the Put
Price shall be payable in such shares of stock, securities,
cash or property as would have been issued or payable as a
result of such Change of Control with respect to or in
exchange for the number of shares of Common Stock a Holder
would have received upon exercise of the Put immediately prior
to such Change in Control.
(b) Restricted Securities. Warrants are transferable only in
accordance with Section 5(a).
(c) Transfers of Warrant Stock. The Purchaser may not dispose
of or transfer any Warrant Stock now or hereafter owned, whether by sale,
assignment, gift, pledge, encumbrance or otherwise, except in accordance with
Section 8 of the Purchase Agreement.
SECTION 6. Termination.
This Agreement shall terminate on the earlier of (a) the seventh
anniversary of the Closing Date and (b) the exercise or expiration of all
Warrants issued pursuant to this Agreement. Each Warrant shall expire upon the
Expiration Date set forth in the Warrant Certificate by which it is evidenced.
SECTION 7. Registration of Transfers and Exchanges.
(a) The Company shall from time to time register the transfer
of any outstanding Warrant Certificates made in accordance with Section 5 hereof
in a Warrant register to be maintained by the Company upon surrender of such
Warrant Certificates accompanied by a written instrument or instruments of
transfer in form reasonably satisfactory to the Company, duly executed by the
Holder or Holders thereof or by the duly appointed legal representative thereof
or by a duly
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authorized attorney; provided, however, that prior to effecting such transfer,
the transferee shall agree (in a form reasonably satisfactory to the Company) to
be bound by the terms of this Agreement. Upon any such registration of transfer,
a new Warrant Certificate shall be issued to the transferee(s) and the
surrendered Warrant Certificate shall be canceled. Until the Warrant Certificate
is transferred on the Warrant register of the Company, the Company may treat the
Holder as shown in the Warrant register as the absolute owner of the Warrant
Certificate for all purposes, and notwithstanding any notice to the contrary.
The Company agrees that it will make the Warrant register available for
inspection by the Holders for a proper purpose during normal business hours at
its office.
(b) The Holders agree that each Warrant Certificate and each
certificate representing Warrant Stock will bear the following legend (the
"Securities Legend"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION
PROVISIONS OF SAID ACT OR LAWS. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
SECURITIES PURCHASE AGREEMENT, DATED AS OF JANUARY __,
1998, BETWEEN ADMINISTAFF, INC. (THE "COMPANY") AND
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
(THE "PURCHASER"), A WARRANT AGREEMENT DATED AS OF
FEBRUARY __ 1998, BETWEEN THE COMPANY AND THE PURCHASER,
AND A REGISTRATION RIGHTS AGREEMENT, DATED AS OF FEBRUARY
__ 1998, BETWEEN THE COMPANY AND THE PURCHASER, COPIES OF
EACH OF WHICH ARE ON FILE AT THE MAIN OFFICE OF THE
COMPANY. ANY SALE OR TRANSFER OF THE SECURITIES EVIDENCED
BY THIS CERTIFICATE IS SUBJECT TO THE TERMS OF THOSE
AGREEMENTS AND ANY SALE OR TRANSFER OF SUCH SECURITIES IN
VIOLATION OF SAID AGREEMENTS SHALL BE INVALID."
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(c) If the holder of the Warrants or Warrant Stock delivers,
in accordance with Section 8(e) of the Purchase Agreement, to the Company an
opinion of King & Spalding or such other counsel that no subsequent transfer of
such Warrants or Warrant Stock shall require registration under the Securities
Act, the Company shall promptly upon such contemplated transfer deliver new
certificates for such Warrants or Warrant Stock which do not bear the Securities
Legend; provided, however, that if at such time, any such Warrants or Warrant
Stock remain subject to certain provisions of this Agreement or the Purchase
Agreement, the Company shall not remove the Securities Legend, but shall modify
it to delete all references to restrictions or conditions on sale of Warrants or
Warrant Stock except those references to restrictions or conditions which are
specified in this Agreement or the Purchase Agreement. If the Company is not
required to deliver new certificates for such Warrants or Warrant Stock not
bearing such legend, the holder thereof shall not transfer the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in Section 5(b) hereof with respect to
Warrants and Section 8(b) of the Purchase Agreement with respect to Warrant
Stock.
(d) If any Warrants or Warrant Stock are or become eligible
for sale pursuant to Rule 144(k), the Company, upon the request of holders of
any such Warrants or Warrant Stock, shall remove the Securities Legend from the
certificates for such Warrants or Warrant Stock; provided, however, that if at
such time, any such Warrants or Warrant Stock remain subject to certain
provisions of this Agreement or the Purchase Agreement, the Company shall not
remove the Securities Legend, but shall modify it to delete all references to
restrictions or conditions on sale of the Warrants or Warrant Stock except those
references to restrictions or conditions which are still applicable and
specified in this Agreement or the Purchase Agreement.
(e) Warrant Certificates may be exchanged at the option of the
Holder(s) thereof when surrendered to the Company at its office for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants, including, without limitation, upon
an adjustment in the Exercise Price or in the number of Warrant Shares
purchasable upon exercise of the Warrants. Warrant Certificates surrendered for
exchange shall be canceled.
SECTION 8. Payment of Taxes. The Company will pay all stamp,
transfer and similar taxes in connection with the issuance, sale and delivery of
the Warrants hereunder, as well as all such taxes attributable to the initial
issuance of Warrant Stock upon the exercise of Warrants and payment of the
appropriate Exercise Price. The Company will not, however, be required to pay
any such taxes imposed in connection with any transfer of any Warrants or
Warrant Stock or any federal or state income taxes payable in respect of any
Holder's purchase, ownership, sale, transfer, exercise or other disposition of
Warrants or Warrant Stock.
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SECTION 9. Mutilated or Missing Warrant Certificates. Upon
receipt by the Company of evidence reasonably satisfactory to the Company (which
shall include an affidavit of the Holder) that any Warrant Certificate shall
have been mutilated, lost, stolen or destroyed and, in the case of loss, theft
or destruction, a customary indemnity agreement from the Holder of such Warrant
Certificate, the Company shall issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants.
SECTION 10. Reservation of Warrant Stock. The Company will at
all times that any Warrant is exercisable reserve and keep available, free from
preemptive or similar rights, out of the aggregate of its authorized but
unissued capital stock or its authorized and issued capital stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Stock upon exercise of Warrants, the maximum number of shares of each
class of capital stock constituting a part of the Warrant Stock which may then
be deliverable upon the exercise of all outstanding Warrants. The Company or, if
appointed, the transfer agent for shares of each class of capital stock of the
Company (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of the Warrants
will be irrevocably authorized and directed at all times to reserve such number
of authorized shares as shall be required for such purpose. The Company will
keep a copy of this Agreement on file with the Transfer Agent and with every
subsequent transfer agent for any shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrants. The
Company will furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to Holders pursuant to Section 12.
Before taking any action which would cause an adjustment pursuant to Section 3
to the maximum number of shares of Warrant Stock deliverable upon the exercise
of all outstanding Warrants pursuant to Section 2(a), the Company shall cause to
be authorized additional shares of Common Stock such that the sum of such
maximum number of shares of Common Stock deliverable upon exercise of all
outstanding Warrants and the number of shares of Common Stock outstanding or
issuable pursuant to outstanding rights, options or warrants as of such date
does not exceed the number of shares of Common Stock authorized pursuant to the
Company's Certificate.
SECTION 11. Fractional Interests. The Company shall not be
required to issue fractional shares of Warrant Stock on the exercise of
Warrants. If more than one Warrant shall be presented for exercise in full at
the same time by the same Holder, the number of full shares of Warrant Stock
which shall be issuable upon exercise thereof shall be computed on the basis of
the aggregate number of shares of Warrant Stock purchasable on exercise of the
Warrants so presented. If any fraction of a share of the Warrant Stock would,
except for the provisions of this Section 11, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to the Fair Market Value per Share calculated as of the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction.
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SECTION 12. Notice to Warrant Holders. Upon any adjustment of
the Exercise Price or number or type of securities purchasable upon exercise of
the Warrants pursuant to Section 3, the Company shall promptly thereafter (i)
cause to be filed with the Company a certificate of the chief financial officer
of the Company setting forth the Exercise Price and the number and type of
securities or other property constituting Warrant Stock after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and, in the case of an adjustment
pursuant to Section 3(b), setting forth the number and type of securities or
other property constituting Warrant Stock (or portion thereof) issuable, after
such adjustment in the Exercise Price or number of Warrant Stock, upon exercise
of a Warrant and payment of the adjusted Exercise Price, and (ii) cause to be
given to each of the Holders of the Warrant Certificates written notice of such
adjustments, together with a copy of such certificate. Where appropriate, such
notice may be given in advance and included as a part of the notice required to
be given under the other provisions of this Section 11. In the event:
(a) the Company shall authorize the payment of any dividend
or distribution to holders of shares of Common Stock of capital stock of the
Company; or
(b) of any capital reorganization, reclassification,
recapitalization, consolidation, or share exchange, or sale, lease, conveyance,
transfer or other disposition to which the adjustment provisions of Section 3(b)
apply, or a purchase, tender or exchange offer for shares of Common Stock or
other securities constituting part of the Warrant Stock (whether by the Company
or some other party); or
(c) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(d) the Company proposes to take any action that would require
an adjustment of the Exercise Price or number of shares of Warrant Stock for
which the Warrants are exercisable;
then the Company shall cause to be given to each of the Holders, at least 20
days prior to the applicable record date hereinafter specified (or promptly in
the case of events for which there is no record date), a written notice stating
(as applicable) (i) the date as of which the holders of record of shares of
Common Stock entitled to receive any such dividends or distribution are to be
determined, (ii) the date on which any such reclassification, recapitalization
or reorganization, consolidation, merger, share exchange, sale, lease,
conveyance, transfer or disposition to which the adjustment provisions of
Section 3(b) apply or any such dissolution, liquidation or winding up is
expected to become effective or be consummated, or (iii) the initial expiration
date set forth in any purchase, tender or exchange offer for shares of capital
stock, and the date as of which it is expected that holders of record of shares
of capital stock or other securities constituting a part of the Warrant Stock
(or securities into which the Warrant Stock may be converted) shall be entitled
to exchange such shares or securities for securities or other property, if any,
deliverable upon such reclassification,
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recapitalization, reorganization, consolidation, merger, share exchange, sale,
lease, conveyance, transfer, disposition, dissolution, liquidation or winding
up.
SECTION 13. Notices. All notices, consents, approvals,
agreements and other communications provided hereunder shall be in writing and
delivered personally, by mail, by overnight courier (providing proof of
delivery) or by telecopy and shall be sufficiently given to the Purchaser and
the Company if addressed or delivered to them at the following addresses:
If to Company: Administaff, Inc.
00000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: G. Xxxxxxx X'Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Purchaser: American Express Company
American Express Tower
World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx III
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or at such other address as any party may designate to any other party by
written notice. All such notices and communications shall be deemed to have been
duly given: (i) at the time delivered by hand, if personally delivered, (ii)
when received, if deposited in the mail, postage prepaid, (iii) when
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transmission is verified, if telecopied, and (iv) on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.
SECTION 14. Successors. Except as otherwise expressly provided
herein or in the Warrants, all covenants and agreements of this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns, including those by operation of law,
merger or consolidation. In addition, except as otherwise expressly provided in
the Warrants, and whether or not any express assignment has been made, the
provisions of this Agreement which are for Purchaser's benefit as a purchaser or
Holder of a Warrant or Warrant Stock are also for the benefit of, and
enforceable by, any subsequent Holder of such a Warrant or Warrant Stock.
SECTION 15. Governing Law. This Agreement, the Warrants and
the Warrant Stock shall be governed by those provisions of the General
Corporation Law of the State of Delaware and Article 8 of the Delaware Uniform
Commercial Code which are necessarily applicable to securities issued by a
Delaware corporation and otherwise shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the internal laws of said state.
SECTION 16. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company and
the Holders any legal or equitable right, remedy or claim under this Agreement;
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders.
SECTION 17. Counterparts. This Agreement may be executed in
any number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
SECTION 18. Amendment; Waivers. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived and
the Company may take any action herein prohibited, or fail to take any action
herein required to be performed by it if, but only if, the Company has obtained
the written consent of the Holders of a majority of the Warrants in existence at
the time such amendment or waiver becomes effective. No failure or delay by any
party in exercising any right or remedy hereunder shall operate as a waiver
thereof, nor shall a waiver of a particular right or remedy on one occasion be
deemed a waiver of any other right or remedy or a waiver of the same right or
remedy on any subsequent occasion.
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SECTION 19. Jurisdiction. Each of the parties hereto hereby
agrees that any legal action or proceeding against such party with respect to
this Agreement, the Warrants or the Warrant Stock may be brought in the courts
of the State of New York or of the United States of America for the Southern
District of New York as the other party may elect, and, by execution and
delivery hereof, such party accepts and consents for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts and agrees that such jurisdiction shall be exclusive, unless waived by
the other party in writing, with respect to any action or proceeding brought by
such party against the other party. Each of the parties hereto irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of the copies thereof by certified
mail, return receipt requested, postage prepaid, to it at its address set forth
herein, such service to become effective upon the earlier of (i) the date ten
calendar days after such mailing and (ii) any earlier date permitted by
applicable law.
SECTION 20. Specific Performance. The Company and the Holders
recognize that the rights of the Holder(s) and the Company under this Agreement
are unique and, accordingly, the Holder(s) and the Company shall, in addition to
such other remedies as may be available to any of them at law or in equity, have
the right to enforce their rights hereunder and thereunder by actions for
injunctive relief and specific performance to the extent permitted by law. The
Company and the Holders agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by them of the
provisions of this Agreement and the Company and each of the Holders hereby
agrees to waive in any action for specific performance the defense that a remedy
at law would be adequate. This Agreement is not intended to limit or abridge any
rights of the Holder(s) or the Company which may exist apart from this
Agreement.
SECTION 21. Entire Agreement. The parties hereto agree that
this Agreement, the Purchase Agreement, the Confidentiality Agreement and the
other Transaction Documents constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings between them as to such subject matter; and there are no
restrictions, agreements, arrangements, oral or written, between any or all of
the parties relating to the subject matter hereof which are not fully expressed
or referred to herein or therein.
SECTION 22. Severability. If any provision of this Agreement
shall be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution, statute, rule or public policy, or for
any other reason, such circumstances shall not have the effect of rendering the
provision or provisions in question, invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute, rule or public policy, but
this Agreement shall be reformed and construed in any such jurisdiction or case
as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
ADMINISTAFF, INC.
By:
----------------------------------
Name: Xxxx Xxxxxxx
Title: President
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: President, AERS
