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EXHIBIT 2
AMENDMENT NO. 4 TO RIGHTS AGREEMENT
THIS AMENDMENT NO. 4 TO RIGHTS AGREEMENT (this "Amendment"), dated as
of August 2, 1999 is entered into and effectuated by Administaff, Inc., a
Delaware corporation (the "Company"), and Xxxxxx Trust and Savings Bank, as
rights agent (the "Rights Agent"), pursuant to Section 27 of the Rights
Agreement, dated as of February 4, 1998 (the "Rights Agreement"), between the
Company and the Rights Agent, at the Company's direction. Capitalized terms used
but not defined herein are used as defined in the Rights Agreement.
RECITALS:
WHEREAS, Section 27 of the Rights Agreement provides that the Company
may in its sole discretion, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of the Rights Agreement in any
respect without the approval of the holders of the Rights; and
WHEREAS, on July 12, 1999 the Company received a copy of a Schedule
13D/A (the "Schedule 13D/A") filed by the "Xxxxxxx Stockholders" (defined below)
indicating that such group beneficially owned approximately 23.3% of the
outstanding shares of the Company's common stock; and
WHEREAS, on July 22, 1999, the Board of Directors of the Company
adopted Amendment No. 3 to Rights Agreement, extending the status of the Xxxxxxx
Stockholders as an Exempt Person (as defined in the Rights Agreement) for a
period up to and including August 2, 1999; and
WHEREAS, on July 22, 1999 and July 27, 1999, the Board of Directors of
the Company authorized the Company to purchase shares from the Xxxxxxx
Stockholders to the extent necessary to reduce the beneficial ownership of the
Xxxxxxx Stockholders to 2,929,800 shares; and
WHEREAS, subsequent to the filing of the Schedule 13D/A, the Xxxxxxx
Stockholders have (a) sold shares on the open market and (b) sold shares back to
the Company pursuant to that certain Stock Purchase Agreement, dated July 30,
1999 by and among the Company, West Highland Partners, L.P., Buttonwood
Partners, L.P. and West Highland International (the "Stock Purchase Agreement"),
and such sales have reduced the beneficial ownership of the Xxxxxxx Stockholders
to 2,929,800 shares, or 21.5% of the Company's outstanding shares; and
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interest of the Company to amend the definition of "Exempt
Person" in the Rights Agreement to clarify, subject to certain limitations, that
Xxxxxxx Stockholders shall continue to constitute an Exempt Person
notwithstanding the purchase and subsequent sale of the Company's common stock
by the Xxxxxxx Stockholders for the period from June 1, 1999 to July 30, 1999;
and
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WHEREAS, in accordance with Section 27 of the Rights Agreement, the
Company has delivered a certificate from an appropriate officer of the Company
stating that this Amendment is in compliance with the terms of Section 27 of the
Rights Agreement.
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. The definition of "Exempt Person" contained in Section 1 (p) of the
Rights Agreement is hereby amended, effective as of the date first set forth
above, by deleting such provision in its entirety and substituting the following
in place thereof;
"Exempt Person" shall mean:
(i) the Company or any Subsidiary (as such term is
hereinafter defined) of the Company or any employee benefit plan of the
Company's;
(ii) Xxxx X. Xxxxxxx, his spouse, lineal descendants, heirs,
executors or other legal representatives and any trusts or limited
partnerships established for the benefit of the foregoing, or any other
person or entity in which the foregoing persons or entities are at the
time of determination the direct record and beneficial owners of all
outstanding voting securities (collectively, the "Xxxxxxx
Stockholders"), provided that the Xxxxxxx Stockholders shall cease to
be an Exempt Person if the Beneficial Ownership of the Xxxxxxx
Stockholders exceeds 17% (the "Xxxxxxx Threshold");
(iii) American Express Travel Related Services Company
("AXTRSC"), its Affiliates and Associates (provided that, for purposes
of this sub-clause (iii) only, the terms Affiliate and Associate as
used with respect to AXTRSC shall not include non-employee directors of
AXTRSC or its affiliates that are in the investment advisory,
discretionary money management, asset management, brokerage, insurance,
annuity, lending or similar business to the extent such non-employee
directors are acting for their own account or for the account of, or
investing the funds of, their respective customers or clients or funds
advised or distributed by them) (collectively, the "AMEX
Stockholders"), provided that the AMEX Stockholders shall cease to be
an Exempt Person if the shares of which the AMEX Stockholders are the
Beneficial Owner exceed 19.9% of the Common Stock determined on a Fully
Diluted Basis at the time of calculation (the "AMEX Threshold"),
provided, however, that (A) if during the term of this Agreement the
AMEX Stockholders sell, transfer or otherwise dispose of any shares of
Common Stock of which the AMEX Stockholders are a Beneficial Owner,
and, after giving effect to (and solely as a result of) such sale(s),
transfer(s) or disposition(s), the AMEX Stockholders beneficially own
less than 15.8% of the Common Stock on a Fully Diluted Basis, the AMEX
Threshold shall be reduced to that percentage of the Common Stock of
which the AMEX Stockholders are a Beneficial Owner, determined on a
Fully Diluted Basis immediately after giving effect to such sale,
transfer or other disposition (assuming for purposes of such
calculation that after giving effect to the closing of the Securities
Purchase Agreement, dated as of January 27, 1998 ("AMEX
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Investment Agreement"), among the Company, its subsidiaries and AXTRSC,
the AMEX Stockholders were the Beneficial Owner of 19.9% of the Common
Stock determined on a Fully Diluted Basis), and (B) if the AMEX
Threshold is reduced during the term of this Agreement to 15% or less,
then the AMEX Threshold shall be 15%; and
(iv) Lang X. Xxxxxxx, West Highland Capital, Inc., Estero
Partners, LLC, West Highland Partners, L.P. and Buttonwood Partners,
L.P. (collectively, the "Xxxxxxx Stockholders"), provided that the
Xxxxxxx Stockholders shall cease to be an Exempt Person if the shares
of which the Xxxxxxx Stockholders are the Beneficial Owner exceed the
lesser of (i) 2,929,800 shares of common stock and (ii) 21.5% of the
Common Stock outstanding at the time of calculation (the "Xxxxxxx
Threshold"); provided, however, that the purchase and subsequent sale
of the Common Stock by the Xxxxxxx Stockholders for the period from
June 1, 1999 to July 30, 1999 shall not cause the Xxxxxxx Stockholders
to be cease to be an Exempt Person for purposes of this Agreement; and
provided, further, that (A) if during the term of this Agreement the
Xxxxxxx Stockholders sell, transfer or otherwise dispose of any shares
of Common Stock of which the Xxxxxxx Stockholders are a Beneficial
Owner, the Xxxxxxx Threshold shall be reduced to that percentage of the
Common Stock of which the Xxxxxxx Stockholders are a Beneficial Owner,
determined immediately after giving effect to such sale, transfer or
other disposition, and (B) if the Xxxxxxx Threshold is reduced during
the term of this Agreement to 15% or less, or if the Xxxxxxx
Stockholders modify their Schedule 13D to indicate an intent to effect
a change in control of the Company, then the Xxxxxxx Stockholders shall
no longer constitute an Exempt Person.
Notwithstanding the foregoing, no Person shall cease to be an Exempt
Person as the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person. As
used in clause (iii) of this definition, the term "Fully Diluted Basis"
means the sum, without duplication, of (i) all shares of Common Stock
then outstanding (as such term is used in the definition of Beneficial
Ownership in Section 1(d) hereof), (ii) shares of Common Stock issuable
upon the exercise of all outstanding warrants, options and other rights
to acquire Common Stock, directly or indirectly, and (iii) Common Stock
issuable upon conversion of all securities convertible, directly or
indirectly, into Common Stock.
2. The Summary of Rights to Purchase Preferred Stock attached as Exhibit
C to the Rights Agreement is hereby amended, effective as of the date first set
forth above, by revising the Summary of Rights to Purchase Preferred Stock as
included in Exhibit C to read in its entirety as set forth in the Amended
Summary of Rights to Purchase Preferred Stock included as Annex I hereto.
3. Except to the extent amended by this Amendment, the Rights Agreement
shall continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ADMINISTAFF, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
XXXXXX TRUST AND SAVINGS BANK
as Rights Agent
By: /s/ Xxxxxxxx Xxxxxxxx
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Xxxxxxxx Xxxxxxxx
Vice President
