EXHIBIT 2.15
________________________________________________________________________________
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF JULY 10, 1998
AMONG
WORK INTERNATIONAL CORPORATION,
SHCG ACQUISITION, INC.,
XXXXX XXXXXX CONSULTING GROUP, INC.
AND
ITS STOCKHOLDERS
________________________________________________________________________________
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
July 10, 1998, among WORK INTERNATIONAL CORPORATION, a Texas corporation
("WORK"), SHCG ACQUISITION, INC., a Connecticut corporation and a wholly-owned
subsidiary of WORK ("Newco"), XXXXX XXXXXX CONSULTING GROUP, INC., a Connecticut
corporation (the "Company"), and the persons listed on the signature pages of
this Agreement under the caption "Stockholders" (collectively, the
"Stockholders," and each of them, individually, a "Stockholder").
PRELIMINARY STATEMENTS
The parties to this Agreement wish to effect a business combination
pursuant to which:
(i) Newco will merge into the Company (the "Merger") on the
terms and subject to the conditions of this Agreement;
(ii) WORK, via mergers involving other WORK subsidiaries, will
acquire the stock of all or some of the entities other than the Company
identified in the accompanying Addendum I (each an "Other Founding Company" and,
collectively with the Company, the "Founding Companies") under agreements
similar to this Agreement entered into among the Other Founding Companies, their
stockholders, WORK and other subsidiaries of WORK (collectively, the "Other
Agreements");
(iii) WORK will effect a public offering of shares of its common
stock; and
(iv) the Stockholders will receive the Merger Consideration (as
such term is hereinafter defined).
The respective boards of directors of WORK, Newco and the Company have
approved and adopted this Agreement to effect a transaction involving a transfer
of the nature described in Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and undertakings contained in this Agreement, the parties to
this Agreement agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms have the meanings assigned to them below in this Section 1.01:
"AAA Distributions" means distributions before the IPO Closing Date of
amounts which shall have accumulated in the Accumulated Adjustment Account
for all taxable periods ending prior to the date of the IPO Closing Date.
"Accumulated Adjustment Account" means the accumulated adjustment
account maintained by the Company under Section 1368(e)(1) of the Code.
"Adjustment Date" means (a) if the Closing occurs on or before the
twentieth day of a month, the last day of the second month preceding the
date of the Closing and (b) if the Closing occurs after the twentieth day,
and on or before the last day, of a month, the last day of the month
preceding the date of the Closing.
"Agreement" means this Agreement, including the Disclosure Statement
relating to this Agreement and all attached Schedules, Annexes and
Exhibits, as each of them may be amended, modified or supplemented from
time to time under their provisions or the provisions of this Agreement.
"Business Corporation Act" means the Connecticut Business Corporation
Act.
"Cash Basis Accounts Receivable Distribution Amount" has the meaning
specified in Section 2.07.
"Ceiling Amount" means $16,217,796.
"Closing" has the meaning specified in Section 7.01(a).
"Company Common Stock" means the common stock, [.10] par value, of the
Company.
"Counsel for the Company and the Stockholders" means Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxx, LLP.
"Counsel for WORK and Newco" means Xxxxxx & Xxxxxx, L.L.P.
"Current Balance Sheet" means the unaudited combined balance sheet of
the Company and Xxxxx Associates at March 31, 1998, which is included in
the Initial Financial Statements.
"Current Balance Sheet Date" means March 31, 1998.
"Current Date" means any day during the 20-day period ending on the
date of the Closing.
"Designated Current Liabilities" means current liabilities of the
Company with respect to current accrued and current deferred income taxes
and current liabilities of the
Company with respect to indebtedness incurred by the Company to enable the
Company to make AAA Distributions after the Initial Calculation Date.
"Disclosure Statement" means the written statement executed by the
Company and each of the Stockholders and delivered to WORK prior to the
execution and delivery of this Agreement, in which either (a) exceptions
are taken to certain of the representations and warranties made by the
Company and the Stockholders in this Agreement or (b) it is confirmed that
no exception is taken to that representation and warranty.
"Effective Time" has the meaning specified in Section 2.02.
"Estimated AAA Amount" means $762,848, the estimated amount, as of the
Initial Calculation Date, of the Accumulated Adjustment Account.
"Estimated Cash Basis Adjustment Amount" means $0, the estimated
amount, as of the Initial Calculation Date, of the net adjustment that
would be required under Section 481(a) of the Code if the Company changed
its method of accounting for tax purposes from the cash basis to the
accrual basis.
"Holdback Termination Time" has the meaning specified in Section
11.19.
"Initial Calculation Date" means March 31, 1998.
"Initial Financial Statements" means (a) the audited combined balance
sheets of the Company and Xxxxx Associates at December 31, 1997 and 1996
and the related audited combined statements of operations, stockholders'
equity and cash flows for each of the Company's three fiscal years in the
three-year period ended December 31, 1997, together with the related audit
report of KPMG Peat Marwick LLP, and (b) the Current Balance Sheet and the
related unaudited combined statements of operations, stockholders' equity
and cash flows of the Company and Xxxxx Associates for the three-month
period ended on the Current Balance Sheet Date.
"Long Term Debt" means indebtedness for borrowed money of the Company
with a maturity of one year or more and includes indebtedness incurred
under Capital Leases.
"Majority Stockholders" means any Stockholder or combination of
Stockholders who at the date of this Agreement own shares of Company Common
Stock representing more than two-thirds of the total number of shares of
Company Common Stock outstanding at the date of this Agreement.
"Merger Consideration" has the meaning specified in Section 2.04.
"Newco" means SHCG Acquisition, Inc., a Connecticut corporation.
"Parties" means the parties to this Agreement.
"Pro Rata Share" means for each Stockholder the fraction expressed as
a percentage and set forth in Schedule 2.04, (a) the numerator of which is
the number of shares of outstanding Company Common Stock owned by that
Stockholder, as set forth in Schedule 2.04, and (b) the denominator of
which is the total number of shares of outstanding Company Common Stock
owned by all Stockholders, as set forth in Schedule 2.04.
"Responsible Officer" means Xxxxxx X. Xxxxxx, Xx.
"Restricted Period" has the meaning specified in Section 11.02.
"Xxxxx Associates" means Xxxxx Xxxxxx Associates, Inc., a New York
corporation and an Affiliate of the Company.
"Staffing Industry" means the business of providing temporary
personnel staffing, personnel placement, staff leasing, professional
employer organization and training and business solutions.
"Surviving Corporation" means the Company, which is to be designated
in the Certificate of Merger as the surviving corporation of the Merger.
"Territory" has the meaning specified in Section 10.01.
"Threshold Amount" means 2% of the Ceiling Amount.
"Transfer Taxes" has the meaning specified in Section 11.07.
"Uniform Provisions" means the Uniform Provisions for the Acquisition
of Founding Companies attached as Annex 1 to this Agreement.
"WORK" means Work International Corporation, a Texas corporation.
"WORK Acquisition Candidate" means any Entity engaged in the Staffing
Industry and which shall have been called on by any of the Company, WORK or
a Subsidiary of the Company or WORK in connection with the possible
acquisition by any of them of that Entity or with respect to which any of
them has made an acquisition analysis.
"Working Capital" means (a) current assets of the Company minus (b)
the sum of (i) the product of current liabilities of the Company (other
than Designated Current Liabilities) multiplied by 1.25 and (ii) the
product of the Designated Current Liabilities multiplied by 1.00.
Section 1.02. Definitions in Uniform Provisions. Capitalized terms used
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in this Agreement but not defined in this Section 1.01 have the meanings
assigned to them in the Preliminary Statements or in Article I of the Uniform
Provisions (the text of which is by this reference incorporated in this
Agreement), as the case may be.
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.01. Certificate of Merger. On the terms and subject to the
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conditions of this Agreement, the Company will cause a Certificate of Merger to
be duly executed and delivered on or promptly after the date of the Closing to
the Secretary of State of the State of Connecticut.
Section 2.02. The Effective Time. The effective time of the Merger (the
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"Effective Time") will be the time on the IPO Closing Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., central time, on the IPO Closing Date.
Section 2.03. Certain Effects of the Merger. At and as of the Effective
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Time, (a) Newco will be merged with and into the Company in accordance with the
provisions of the Business Corporation Act, (b) Newco will cease to exist as a
separate legal entity, (c) the certificate or articles of incorporation of the
Company will be amended to change its authorized capital stock to 1,000 shares,
par value $1.00 per share, of Common Stock, (d) the Company will be the
Surviving Corporation and, as such, will, all with the effect provided by the
Business Corporation Act, (i) possess all the properties and rights, and be
subject to all the restrictions and duties, of the Company and Newco and (ii) be
governed by the laws of the State of Connecticut, (e) the Charter Documents of
the Company then in effect (after giving effect to the amendment of the
Company's certificate or articles of incorporation specified in clause (c) of
this sentence) will become and thereafter remain (until changed in accordance
with (i) applicable law, in the case of the certificate or articles of
incorporation or (ii) their terms, in the case of the bylaws) the Charter
Documents of the Surviving Corporation, (f) the initial board of directors of
the Surviving Corporation will be the Persons named in Schedule 2.03, who will
hold the office of director of the Surviving Corporation subject to the
provisions of the applicable laws of the State of Connecticut and the Charter
Documents of the Surviving Corporation, and (g) the officers of the Surviving
Corporation immediately following the Merger will be as set forth in Schedule
2.03, and each of the Persons so designated in Schedule 2.03 will serve in each
office specified for that Person in Schedule 2.03, subject to the provisions of
the Charter Documents of the Surviving Corporation, until his or her successor
is duly elected to, and, if necessary, qualified for, that office.
Section 2.04. Effect of the Merger on Capital Stock. As of the Effective
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Time, as a result of the Merger and without any action on the part of any holder
thereof:
(a) the shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time will (i) be converted into the
right to receive, without interest, on surrender of the certificate
evidencing those shares, the amount of cash and the number of shares of
WORK Common Stock set forth or determined as provided in Schedule 2.04
(the "Merger Consideration"), (ii) cease to be outstanding and to exist,
and (iii) be canceled and retired;
(b) each share of Company Common Stock held in the treasury of the
Company or by any Company Subsidiary will (i) cease to be outstanding and
to exist and (ii) be canceled and retired; and
(c) each share of Newco Common Stock issued and outstanding
immediately prior to the Effective Time will be converted into one share of
Common Stock, par value $1.00 per share, of the Surviving Corporation, and
the shares of Common Stock of the Surviving Corporation issued on such
conversion will constitute all the issued and outstanding shares of Capital
Stock of the Surviving Corporation.
Each holder of a certificate representing shares of Company Common Stock
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those shares other than the
right to receive, without interest, the Merger Consideration and the additional
cash, if any, owing with respect to those shares as provided in Section 2.06.
Section 2.05. Delivery, Exchange and Payment.
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(a) At or after the Effective Time: (i) each Stockholder, as the
holder of certificates representing shares of Company Common Stock, will,
on surrender of his certificates to WORK (or any agent which may be
appointed by WORK for purposes of this Section 2.05), receive, and WORK
will pay and issue to each Stockholder, in each case subject to the
provisions of Section 2.06, the Merger Consideration; and (ii) until any
certificate representing Company Common Stock has been surrendered and
replaced pursuant to this Section 2.05, that certificate will, for all
purposes, be deemed to evidence ownership of the number of whole shares of
WORK Common Stock, and the right to receive cash, included in the Merger
Consideration payable in respect of that certificate pursuant to Section
2.04. All shares of WORK Common Stock issuable in the Merger will be
deemed for all purposes to have been issued by WORK at the Effective Time.
All cash included in the Merger Consideration shall be paid, at WORK's
option, by (a) WORK's company check or checks, (b) one or more wire
transfers to accounts designated by the respective Stockholders at least
five Business Days before the IPO Closing Date, or (c) certified or
official bank check or checks.
(b) Each Stockholder will deliver to WORK (or any agent that may be
appointed by WORK for purposes of this Section 2.05), on or before the IPO
Closing Date, the certificates representing Company Common Stock owned by
the Stockholder, duly endorsed in blank by him, or accompanied by stock
powers duly executed by him in blank, and with all necessary transfer tax
and other revenue stamps, acquired at his expense, affixed and canceled.
Each Stockholder shall cure any deficiencies in the endorsement of the
certificates or other documents of conveyance respecting, or in the stock
powers accompanying, the certificates representing Company Common Stock
delivered by him.
(c) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to WORK Common Stock and
payable to the holders of record thereof after the Effective Time will be
paid to the holder of any unsurrendered certificates representing shares of
Company Common Stock for which shares of WORK Common Stock
have been issued in the Merger until the unsurrendered certificates are
surrendered as provided herein, but (i) on such surrender, WORK will cause
to be paid, to the Person in whose name the certificates representing such
shares of WORK Common Stock shall then be issued, the amount of dividends
or other distributions previously paid with respect to such whole shares of
WORK Common Stock with a record date, or which have accrued, subsequent to
the Effective Time, but prior to surrender, and the amount of any cash
payable to such Person for and in lieu of fractional shares pursuant to
Section 2.06 and (ii) at the appropriate payment date or as soon as
practicable thereafter, WORK will cause to be paid to that Person the
amount of dividends or other distributions with a record date, or which
have been accrued, subsequent to the Effective Time, but which are not
payable until a date subsequent to surrender, which are payable with
respect to such number of whole shares of WORK Common Stock, subject in all
cases to any applicable escheat laws. No interest will be payable with
respect to the payment of such dividends or other distributions (or cash
for and in lieu of fractional shares) on surrender of outstanding
certificates.
Section 2.06. Fractional Shares. Notwithstanding any other provision of
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this Article II, no fractional shares of WORK Common Stock will be issued, and
any Stockholder otherwise entitled to receive a fractional share of WORK Common
Stock but for this Section 2.06 will instead be entitled to receive a cash
payment for and in lieu thereof in the amount (rounded to the nearest whole
dollar) equal to that Person's fractional interest in a share of WORK Common
Stock multiplied by $12.
Section 2.07. Distribution of Cash Basis Accounts Receivable. On or
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before the day preceding the IPO Closing Date, the Company shall distribute in
kind to the Stockholders, in accordance with their respective Pro Rata Shares,
cash basis accounts and notes receivable outstanding at such time which have a
value equal to the net adjustment that would be required under Section 481(a) of
the Code if, as of the IPO Closing Date, the Company changed its method of
accounting for tax purposes from the cash basis to the accrual basis. In the
event that, notwithstanding such distribution, the Company receives any payment
with respect to any such receivables, the Company will promptly pay the amount
so received over to the Stockholders in accordance with their respective Pro
Rata Shares. The aggregate amount of accounts and notes receivable to be
distributed pursuant to this Section 2.07 is herein referred to as the "Cash
Basis Accounts Receivable Distribution Amount."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each Stockholder, severally as to himself or herself only, represents and
warrants to, and agrees with, WORK that the representations and warranties
contained in Article III of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE STOCKHOLDERS
The Company and each Stockholder jointly and severally represent and
warrant to, and agree with, WORK that the representations and warranties
contained in Article IV of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WORK AND NEWCO
WORK and Newco jointly and severally represent and warrant to, and agree
with, the Company and each Stockholder that the representations and warranties
contained in Article V of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Until the Effective Time, subject to the waiver provisions of Section
11.05, each Party will comply with each covenant for which provision is made in
Article VI of the Uniform Provisions (the text of which Article VI is hereby
incorporated herein by this reference) to be performed or observed by that
Party.
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
Section 7.01. The Closing and Conditions to Closing.
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(a) The Closing. On or before the IPO Pricing Date, the Parties will
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take all actions necessary to (i) effect the Merger on the IPO Closing Date
(including, as permitted by the Business Corporation Act, (A) the execution
of a Certificate of Merger meeting the requirements of the Business
Corporation Act and providing that the Merger will become effective on the
IPO Closing Date and (B) the filing of the Certificate of Merger with the
Secretary of State of the State of Connecticut, (ii) verify the existence
and ownership of the certificates evidencing the Company Common Stock to be
exchanged for the Merger Consideration pursuant to Section 2.05, and (iii)
satisfy the document delivery requirements to which the obligations of the
Parties to effect the Merger and the other transactions contemplated hereby
are conditioned by the provisions of this Article VII (all those actions
collectively being the "Closing"). The Closing will take place at the
offices of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx, Xxxxxxx, Xxxxx at 10:00
a.m., Houston time, or at such later
time on the IPO Pricing Date as WORK shall specify by written notice to
Xxxxxx X. Xxxxxx, Xx.. The actions taken at the Closing will not include
the completion of either the Merger or the delivery of the Company Common
Stock or the Merger Consideration pursuant to Section 2.05. Instead, on the
IPO Closing Date, the Certificate of Merger will become effective pursuant
to Section 2.02, and all transactions contemplated by this Agreement to be
closed or completed on or before the IPO Closing Date, including the
surrender of the Company Common Stock in exchange for the Merger
Consideration will be closed or completed, as the case may be. During the
period from the Closing to the IPO Closing Date, this Agreement may be
terminated by the parties only pursuant to Section 12.01 (b).
(b) Incorporation by Reference. The text of Article VII of the
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Uniform Provisions hereby is incorporated herein by this reference.
ARTICLE VII
COVENANTS FOLLOWING THE EFFECTIVE TIME
From and after the Effective Time, subject to the waiver provisions of
Section 11.05, each Party (other than the Company) will comply with each
covenant for which provision is made in Article VIII of the Uniform Provisions
(the text of which Article hereby is incorporated herein by this reference) to
be performed or observed by that Party.
ARTICLE IX
INDEMNIFICATION
The text of Article IX of the Uniform Provisions hereby is incorporated
herein by this reference.
ARTICLE X
LIMITATIONS ON COMPETITION
Section 10.01. Prohibited Activities. Each Stockholder (other than Xxxxx
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Xxxxxx, Xxx Xxxxxxxx and Xxxxxxxxxx Xxxxxxx) severally agrees that he will not
during the period beginning on the date hereof and ending on the second
anniversary of the IPO Closing Date, directly or indirectly, for any reason, for
his own account or on behalf of or together with any other Person:
(a) engage as an officer, director or in any other managerial
capacity or as an owner, co-owner or other investor of or in, whether as an
employee, independent contractor, consultant or advisor, in any business in
the Staffing Industry in competition with the Company, any Company
Subsidiary or WORK or any Subsidiary of WORK (WORK and its Subsidiaries
collectively being called "WORK" for purposes of this Article X) within any
territory surrounding any office or facility (each a "facility") in which
any of the Company or the Company Subsidiaries was engaged in business on
the date hereof or immediately prior to the Effective Time (for purposes of
this Article X, the territory surrounding a facility
shall be the area located within 50 miles of the facility, all of such
locations being herein collectively called the "Territory");
(b) call on any natural Person who is at that time employed by
the Company, any Company Subsidiary or WORK with the purpose or intent of
attracting that person from the employ of the Company, any Company
Subsidiary or WORK, provided that a Stockholder may call on and hire any of
his Immediate Family Members;
(c) call on any Person that at that time is, or at any time
within one year prior to that time was, a customer of the Company, any
Company Subsidiary or WORK within the Territory, (i) for the purpose of
soliciting or selling any product or service in competition with the
Company, any Company Subsidiary or WORK within the Territory and (ii) with
the knowledge of the customer relationship; or
(d) call on any WORK Acquisition Candidate, with the knowledge
of that Person's status as a WORK Acquisition Candidate, for the purpose of
acquiring that Person or arranging the acquisition of that Person by any
Person other than WORK.
Notwithstanding the foregoing, any Stockholder may own and hold as a passive
investment up to 1% of a class of the outstanding Capital Stock of a competing
Entity if that class of Capital Stock is publicly traded.
Section 10.02. Damages. Because of the difficulty of measuring economic
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losses to WORK as a result of any breach by a Stockholder of his covenants in
Section 10.01, and because of the immediate and irreparable damage that could be
caused to WORK for which it would have no other adequate remedy, each
Stockholder agrees that WORK may enforce the provisions of Section 10.01 by
injunctions and restraining orders against the Stockholder if he breaches any of
those provisions.
Section 10.03. Reasonable Restraint. The Parties each agree that Sections
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10.01 and 10.02 impose a reasonable restraint on the Stockholders in light of
the activities and business of WORK on the date hereof, the current business
plans of WORK and the investment by each Stockholder in WORK as a result of the
Merger.
Section 10.04. Severability; Reformation. The covenants in this Article X
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are severable and separate. The unenforceability of any specific covenant in
this Article X is not intended by any Party to, and shall not, affect the
provisions of any other covenant in this Article X. If any court of competent
jurisdiction determines that the scope, time or territorial restrictions set
forth in Section 10.01 are unreasonable as applied to any Stockholder, the
Parties, including the Stockholder in question, acknowledge their mutual
intention and agreement that those restrictions be enforced to the fullest
extent the court deems reasonable, and thereby shall be reformed to that extent
as applied to that Stockholder and any other Stockholder similarly situated.
Section 10.05. Independent Covenant. All the covenants in this Article X
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are intended by each Party to, and shall, be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of any Stockholder against WORK, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by WORK of any covenant in this Article X. It is specifically agreed that the
period specified in Section 10.01 shall be computed in the case of each
Stockholder by excluding from that computation any time during which that
Stockholder is in violation of any provision of Section 10.01. The covenants
contained in this Article X shall not be affected by any breach of any other
provision of this Agreement by any Party.
Section 10.06. Materiality. The Company and each Stockholder, severally
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and not jointly with any other Person, hereby agree that this Article X is a
material and substantial part of the transactions contemplated by this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
Section 11.01. Treatment of Confidential Information.
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(a) Each of the Company and the Stockholders, severally and not
jointly with any other Person, acknowledges that it has or may have had in
the past, currently has and in the future may have access to Confidential
Information of the Company and the Company Subsidiaries, the Other
Founding Companies and their Subsidiaries and WORK and its Subsidiaries.
Each of the Company and the Stockholders, severally and not jointly with
any other Person, agrees that it will keep confidential all such
Confidential Information furnished to it and, except with the specific
prior written consent of WORK will not disclose such Confidential
Information to any Person except (a) Representatives of WORK, (b) its own
Representatives, provided that these Representatives (other than counsel)
agree to the confidentiality provisions of this Section 11.01; and
provided, further, that Confidential Information shall not include (i)
such information which becomes known to the public generally through no
fault of any Stockholder, (ii) information required to be disclosed by law
or the order of any governmental authority under color of law, provided,
that prior to disclosing any information pursuant to this clause (ii),
each Stockholder shall, if possible, give prior written notice thereof to
WORK and provide WORK with the opportunity to contest such disclosure, or
(iii) information with respect to which the disclosing party reasonably
believes disclosure is required in connection with the defense of a
lawsuit against the disclosing party. In the event of a breach or
threatened breach by any Stockholder of the provisions of this Section
11.01 with respect to any Confidential Information, WORK shall be entitled
to an injunction restraining such Stockholder from disclosing, in whole or
in part, that Confidential Information. Nothing herein shall be construed
as prohibiting WORK from pursuing any other available remedy for such
breach or threatened breach, including the recovery of damages.
(b) Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Section 11.01(a), and
because of the immediate and irreparable damage that would be caused to
WORK for which it would have no other adequate remedy, each of the Company
and the Stockholders agrees that WORK may enforce the provisions of
Section 11.01(a) by injunctions and restraining orders against each of
them who breaches any of those provisions.
(c) The obligations of WORK set forth in Section 6.01(d) are
incorporated in this Section 11.01 by this reference.
(d) The obligations of the parties under this Section 11.01
shall survive the termination of this Agreement.
Section 11.02. Restrictions on Transfers of WORK Common Stock.
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(a) During the one-year period ending on the first anniversary
of the IPO Closing Date (the "Restricted Period"), no Stockholder
voluntarily will: (i) sell, assign, exchange, transfer, encumber, pledge,
distribute, appoint or otherwise dispose of (A) any shares of WORK Common
Stock received by any Stockholder in the Merger or (B) any interest in
(including any option to buy or sell) any such shares of WORK Common
Stock, in whole or in part, and WORK will have no obligation to, and shall
not, treat any such attempted transfer as effective for any purpose; or
(ii) engage in any transaction, whether or not with respect to any shares
of WORK Common Stock or any interest therein, the intent or effect of
which is to reduce the risk of owning the shares of WORK Common Stock
acquired pursuant to Section 2.04 (including, for example engaging in put,
call, short-sale, straddle or similar market transactions); provided,
however, that this Section 11.02 shall not restrict any transfer of WORK
Common Stock acquired by a Stockholder pursuant to Section 2.04 to any of
that Stockholder's Related Persons who agree in writing to be bound by the
provisions of Section 11.01 and this Section 11.02. The certificates
evidencing the WORK Common Stock delivered to each Stockholder pursuant to
Section 2.05 will bear a legend substantially in the form set forth below:
EXCEPT PURSUANT TO THE TERMS OF THE AGREEMENT AND PLAN OF
REORGANIZATION AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE
AND THE OTHER PARTIES THERETO, THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR
OTHERWISE DISPOSED OF, AND THE ISSUER SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY ATTEMPTED VOLUNTARY SALE, ASSIGNMENT,
EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE, DISTRIBUTION,
APPOINTMENT OR OTHER DISPOSITION OF ANY OF THOSE SHARES, DURING
THE PERIOD ENDING ON [DATE THAT IS THE FIRST ANNIVERSARY OF THE
IPO CLOSING DATE] (THE "RESTRICTED PERIOD"). ON THE WRITTEN
REQUEST OF THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO
REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH
THE TRANSFER AGENT) AFTER THE EXPIRATION OF THE RESTRICTED
PERIOD.
(b) Each Stockholder, severally and not jointly with any other
Person, (i) acknowledges that the shares of WORK Common Stock to be
delivered to him pursuant to Section 2.04 (A) have not been and, except
pursuant to the Registration Rights Agreement, if applicable, will not be
registered under the Securities Act and therefore may not be resold by him
without compliance with the Securities Act and (B) will, as a result of
their restrictions on transferability which are imposed by this Agreement
during the Restricted Period, have a value materially less at the
Effective Time than the value of then freely
tradeable shares of WORK Common Stock, and (ii) covenants that none of the
shares of WORK Common Stock issued to him pursuant to Section 2.04 will be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all the applicable
provisions of the Securities Act and the rules and regulations of the SEC
and applicable state securities laws and regulations. All certificates
evidencing shares of WORK Common Stock issued pursuant to Section 2.04
will bear the following legend in addition to the legend prescribed by
Section 11.02(a):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THAT ACT AND OTHER
APPLICABLE SECURITIES LAWS.
In addition, certificates evidencing shares of WORK Common Stock issued to
each Stockholder pursuant to Section 2.04 will bear any legend required by
(i) the securities or blue sky laws of the state in which that Stockholder
resides or (ii) the Underwriter in connection with any agreement of that
Stockholder with the Underwriter to the effect set forth in Section
11.02(a).
Section 11.03. Brokers and Agents. The Stockholders jointly and severally
------------------
represent and warrant to WORK that the Company is not directly or indirectly
obligated to pay any broker or similar agent in connection with the transactions
contemplated hereby and agree, without regard to the Threshold Amount
limitations set forth in Article IX, to indemnify WORK against all Damage Claims
arising out of claims for any and all fees and commissions of brokers or similar
agents employed or promised payment by the Company.
Section 11.04 Assignment; No Third Party Beneficiaries. This Agreement
----------------------------------------
and the rights of its Parties may not be assigned (except by operation of law)
and shall be binding on and inure to the benefit of the Parties, the successors
of WORK, and the heirs and legal representatives of the Stockholders (and, in
the case of any trust, the successor trustees of the trust). Neither this
Agreement nor any other Transaction Document is intended, or shall be construed,
deemed or interpreted, to confer on any Person not a party hereto or thereto any
rights or remedies hereunder or thereunder, except as provided in Section
6.05(b) or 11.14, in Article IX, or as otherwise provided expressly herein or
therein.
Section 11.05. Entire Agreement; Amendment; Waivers. This Agreement and
------------------------------------
the documents delivered pursuant to it constitute the entire agreement and
understanding among the Parties and supersede all prior agreements and
understandings, both written and oral, relating to the subject matter of this
Agreement. This Agreement may be amended, modified or supplemented, and any
right hereunder may be waived, if, but only if, the amendment, modification,
supplement or waiver is in writing and signed by the Majority Stockholders, the
Company and WORK. The waiver of any of the terms and conditions of this
Agreement shall not be construed or interpreted as, or deemed to be, a waiver of
any of its other term or conditions.
Section 11.06. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument.
Section 11.07. Expenses. Whether or not the transactions contemplated
--------
hereby are consummated, (a) WORK will pay the fees, expenses and disbursements
of WORK and Newco and their Representatives which are incurred in connection
with the subject matter of this Agreement and any amendments to this Agreement
including all costs and expenses incurred in the performance of and compliance
with all conditions to be performed by WORK and Newco under this Agreement,
including the costs of preparing the Registration Statement, (b) WORK will pay
up to a maximum of $25,000 in the aggregate of the fees, expenses and
disbursements of Xxxxxxxxx and Xxxxxxxxx, L.L.P., counsel to the Founding
Companies, incurred in connection with the subject matter of this Agreement, and
(c) the Stockholders will pay from personal funds, and not from funds of the
Company or any Company Subsidiary, (i) all sales, use, transfer and other
similar taxes and fees (collectively, "Transfer Taxes") incurred in connection
with the transactions contemplated hereby, and (ii) the fees, expenses and
disbursements of Counsel for the Company and the Stockholders incurred in
connection with the subject matter of this Agreement and the Registration
Statement on or before the IPO Closing Date. In connection with the agreement
of the Stockholders contained in clause (c) of the preceding sentence, WORK
hereby represents and warrants to the Stockholders that the Other Agreements all
contain provisions to the same effect as that contained in such clause (c). The
Stockholders will file all necessary documentation and Returns with respect to
all Transfer Taxes. In addition, each Stockholder acknowledges that he, and not
the Company, WORK or the Surviving Corporation, will pay all Taxes due upon
receipt of the consideration payable to the Stockholder pursuant to Article II.
Section 11.08. Notices. All notices required or permitted hereunder shall
-------
be in writing, and shall be deemed to be delivered and received (a) if
personally delivered or if delivered by telex, telegram, facsimile or courier
service, when actually received by the Party to whom notice is sent or (b) if
delivered by mail (whether actually received or not), at the close of business
on the third Business Day next following the day when placed in the mail,
postage prepaid, certified or registered, addressed to the appropriate Party or
Parties, at the address of such Party set forth below (or at such other address
as such party may designate by written notice to all other Parties in accordance
herewith):
(i) if to WORK or Newco, addressed to it at:
Work International Corporation
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxxxxx
Vice President and Chief Acquisitions Officer
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of this
Agreement) to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
(ii) if to the Stockholders, addressed to them at their
respective addresses set forth in Schedule 2.04; and
(iii) if to the Company, addressed to it at:
Xxxxx Xxxxxx Associates, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: President
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of this
Agreement) to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE, WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICTS OF LAW PROVISIONS THEREOF: PROVIDED, HOWEVER, THAT: (A) ARTICLE X
AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
CONNECTICUT WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF AND (B)
MATTERS PERTAINING SOLELY TO THE LEGALITY AND EFFECTUATION OF THE MERGER SHALL
BE GOVERNED BY THE BUSINESS CORPORATION ACT.
Section 11.10. Exercise of Rights and Remedies. Except as otherwise
-------------------------------
provided herein, no delay or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default hereunder by
any other Party shall impair any such right, power or remedy, nor shall it be
construed, deemed or interpreted as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be construed, deemed or
interpreted as a waiver of any other breach or default hereunder occurring
before or after that waiver.
Section 11.11. Time. Time is of the essence in the performance of this
----
Agreement in all respects.
Section 11.12. Reformation and Severability. If any provision of this
----------------------------
Agreement is invalid, illegal or unenforceable, that provision shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the Parties as
expressed herein, and if such a modification is not possible, that provision
shall be severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
Section 11.13. Remedies Cumulative. Except as otherwise provided in
-------------------
Section 9.06, no right, remedy or election given by any term of this Agreement
shall be deemed exclusive, but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
Section 11.14. Respecting the IPO. Each of the Company and the
------------------
Stockholders acknowledges and agrees that: (a) no firm commitment, binding
agreement or promise or other assurance of any kind, whether express or implied,
oral or written, exists at the date hereof that the Registration Statement will
become effective or that the IPO will occur at a particular price or within a
particular range of prices or occur at all; (b) neither WORK or any of its
Representatives nor any prospective underwriters in the IPO will have any
liability to the Company, the Stockholders or any of their respective Affiliates
or associates for any failure of (i) the Registration Statement to become
effective (provided, however, that WORK will use its reasonable best efforts to
cause the Registration Statement to become effective prior to September 30,
1998) or (ii) the IPO to occur at a particular price or within a particular
range of prices or to occur at all; and (c) the decision of Stockholders to
enter into this Agreement, or to vote in favor of or consent to the Merger, has
been or will be made independent of, and without reliance on, any statements,
opinions or other communications of, or due diligence investigations that have
been or will be made or performed by, any prospective underwriter relative to
WORK or the IPO. The Underwriter shall have no obligation to any of the Company
and the Stockholders with respect to any disclosure contained in the
Registration Statement except for written information concerning the Underwriter
furnished to the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement.
Section 11.15. Consents.
--------
(a) The Stockholders, as the owners and holders of all the
Capital Stock of the Company, hereby consent to and approve the Merger and
the plan of merger contemplated by this Agreement pursuant to Sections 33-
698 and 33-817 of the Business Corporation Act.
(b) WORK hereby consents to and approves the Merger and the
plan of merger contemplated by this Agreement pursuant to Sections 33-698
and 33-817 of the Business Corporation Act.
Section 11.16. Repayment of Obligations. On or before the IPO Closing
------------------------
Date, each of the Stockholders shall repay the entire unpaid amount of all
notes, advances and other payment obligations owed by such Stockholder to the
Company.
Section 11.17. Special Condition. The obligation of the Company and the
-----------------
Stockholders to take the actions to be taken by them on the IPO Closing Date are
subject to WORK being ready, willing and able to acquire Xxxxx Associates on the
IPO Closing Date pursuant to the Other
Agreement among WORK, Xxxxx Associates and the other parties identified therein,
and the obligation of WORK and Newco to take the actions to be taken by them on
the IPO Closing Date are subject to Xxxxx Associates and the stockholders
thereof being ready, willing and able to perform their obligations on the IPO
Closing Date pursuant to such Other Agreement.
Section 11.18. Special Indemnity Limitation. Notwithstanding any
----------------------------
provision hereof to the contrary, in no event shall (a) the aggregate liability
of the Company and the Stockholders under Article IX of this Agreement plus the
aggregate liability of the Company and the Stockholders under Article IX of the
Other Agreement to which Xxxxx Associates is a party exceed the Ceiling Amount
or (b) the sum of the aggregate liability of each Stockholder under Article IX
of this Agreement plus the aggregate liability of that Stockholder under Article
IX of such Other Agreement exceed such Stockholder's Pro Rata Share of the
Ceiling Amount.
Section 11.19. Top Heavy Plan. Prior to the Adjustment Date, the Company
--------------
will pay and discharge all liabilities with respect to underfunding of the Xxxxx
Xxxxxx Associates Inc. Savings Plan and the Xxxxx Xxxxxx Consulting Group
Savings Plan (the "Designated Plans"), and at or prior to the Closing, the
Company will provide evidence reasonably satisfactory to WORK that all such
liabilities have been paid and discharged.
Section 11.20. SHA Holding Company. Prior to the date of the Closing, SHA
-------------------
Holding Company, a Connecticut corporation, will terminate its existence and
will transfer all of its assets (all such assets having heretofore been
identified in writing to WORK) to Xxxxx Associates.
ARTICLE XII
TERMINATION
Section 12.01. Termination of This Agreement.
-----------------------------
(a) This Agreement may be terminated at any time prior to the
Closing solely:
(i) by the mutual written consent of WORK and the Company;
(ii) by the Majority Stockholders or the Company, on the
one hand, or by WORK, on the other hand, if the transactions
contemplated by this Agreement to take place at the Closing shall
not have been consummated by September 30, 1998, unless the
failure of such transactions to be consummated results from the
willful failure of the Party (or in the case of the Stockholders
and the Company, any of them) seeking to terminate this Agreement
to perform or adhere to any agreement required hereby to be
performed or adhered to by that Party prior to or at the Closing
or thereafter on the IPO Closing Date; provided, however, that
the date September 30, 1998, set forth above shall be extended to
October 31, 1998, unless, on or before September 15, 1998,
Founding Companies which are to receive a majority of the initial
merger consideration (valuing shares of WORK Common Stock at $12
per share) to be received by all the Founding Companies on the
IPO Closing Date notify WORK that they have elected not to extend
such date beyond September 30, 1998;
(iii) by the Majority Stockholders or the Company, on the
one hand, or by WORK, on the other hand, if a material breach or
default shall be made by the other Party (or in the case of the
Stockholders and the Company, any of them) in the observance or
in the due and timely performance of any of the covenants,
agreements or conditions contained herein and such breach or
default continues for fifteen days after written notice from the
Majority Stockholders or the Company, on the one hand, or from
WORK on the other hand; or
(iv) by WORK if it is entitled to do so as provided in
Section 6.07.
(b) This Agreement may be terminated after the Closing solely:
(i) by WORK or the Company if the Underwriting Agreement
is terminated pursuant to its terms after the Closing and prior
to the consummation of the IPO; or
(ii) automatically and without action on the part of any
party hereto if the IPO is not consummated within 15 Business
Days after the date of the Closing.
(c) If this Agreement is terminated pursuant to this Section
12.01, the Merger will be deemed for all purposes to have been abandoned
and of no force or effect. If this Agreement is terminated pursuant to
this Section 12.01 after the Certificate of Merger has been filed with the
Secretary of State of the State of Connecticut, but before the IPO has
been consummated, WORK (at WORK's expense) will take all actions that
Counsel for the Company and the Stockholders advises WORK are required by
the applicable laws of the State of Connecticut to rescind the Merger.
Section 12.02. Liabilities in Event of Termination. If this Agreement is
-----------------------------------
terminated pursuant to Section 12.01, there shall be no liability or obligation
on the part of any Party except (a) as provided in Section 11.07, or (b) to the
extent that such liability is based on the breach by that Party of any of its or
his representations, warranties or covenants set forth in of this Agreement.
[SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
WORK INTERNATIONAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx, Vice President and
Chief Acquisitions Officer
SHCG ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx, President and
Chief Acquisitions Officer
XXXXX XXXXXX CONSULTING GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxx, Xx., President
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------------
Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxxx Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxx Xxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxx
--------------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxxxx Xxxxx
--------------------------------------------
Xxxxxxxxx Xxxxx
/s/ Xxx Xxxxxxxx
--------------------------------------------
Xxx Xxxxxxxx
/s/ Xxxxxxxxxx Xxxxxxx
--------------------------------------------
Xxxxxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------------------
Xxxxx Xxxxxx
ADDENDUM 1
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Addendum which are defined in the
captioned Agreement to which this is an Addendum are used herein as therein
defined.
B. The Founding Companies are:
1. Absolutely Professional Staffing, Inc.
2. Botal Associates, Inc.
3. AIM Staffing, Inc.
4. Access Staffing, Inc.
5. Benetemps, Inc.
6. The Xxxxxxx Companies Consolidated, Inc.
7. Contract Health Professionals Inc.
8. Core Personnel, Inc.
9. Core Personnel of Arlington, Inc.
10. CoreLink Staffing Services, Inc.
11. Law Pros Legal Placement Services, Inc.
12. Law Resources, Inc.
13. Professional Consulting Network, Inc.
14. Xxxxx Xxxxxx Associates, Inc.
15. Xxxxx Xxxxxx Consulting Group, Inc.
16. Sparks Personnel Services, Inc.
17. Sparks Associates, Inc.
18. Customer Care Solutions, LLC
19. Task Management, Inc.
20. XXXX Placement Services Inc.
21. WSi Personnel Services, Inc.
SCHEDULE 2.03
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.03 are used
herein as therein defined.
B. The directors of the Surviving Corporation immediately after the
Effective Time are as follows:
Xxxxxx Xxxxx
X. Xxxxxxxx French
Xxxxxx X. Xxxxxx, Xx.
C. The officers of the Surviving Corporation immediately following the
Effective Time are as follows:
President Xxxxxx X. Xxxxxx, Xx.
Vice President Xxxxx X. Xxxxx
Vice President and Assistant Secretary Xxxxx X. Xxxxxxxx
Vice President and Assistant Secretary Xxxx X. Xxxx
SCHEDULE 2.04
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.04 are used
herein as therein defined.
B. The name and address of each Stockholder are as follows:
Name Address
----------- ---------------
Xxxxx X. Xxxxx 00 Xxxxxxx Xxxxx
Xxxxx, XX 00000
Xxxxxx X. Xxxxxx, Xx. 000 Xxxxx Xxxx Xxxx
Xxx Xxxxxx, XX 00000
Xxxxx Xxxxxx Xxxxxxx 000 Xxxxxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxx 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxx 000 Xxxx 00 Xxxxxx - 0X
Xxx Xxxx, XX 00000
Xxxxx Xxxxxxxxx 0 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 00 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx 000 X. 00xx Xxxxxx 00X
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx 0 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxxx Xxxxx 00 Xxxxxx Xxxx
Xxxxxxxxx XX 00000
Xxx Xxxxxxxx 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxxxxx Xxxxxxx 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxx 000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
C. The aggregate Merger Consideration shall be equal to $1,218,910, as
adjusted pursuant to comprised of (i) an amount of cash paragraph D below,
and (ii) 92,227 shares of WORK
Common Stock, which shall be payable and issuable to the Stockholders pro
rata in accordance with their respective Pro Rata Shares. The Pro Rata
Shares of the Stockholders are as follows:
Name No. of Shares Pro Rata Share
---------- ---------------- --------------
Xxxxx X. Xxxxx 1,573.5 31.47%
Xxxxxx X. Xxxxxx, Xx. 1,299.5 25.99%
Xxxxx Xxxxxx Xxxxxxx 435.0 8.70%
Xxxxxx X. Xxxxx 147.0 2.94%
Xxxxxx Xxxxxxx 116.0 2.32%
Xxxxx Xxxxxxxxx 170.0 3.40%
Xxxxxxx X. Xxxxxxx 337.5 6.75%
Xxxxxx Xxxxxx 284.5 5.69%
Xxxxx Xxxxxx 249.0 4.98%
Xxxxxxxxxx Xxxxx 234.0 4.68%
Xxx Xxxxxxxx 42.0 .84%
Xxxxxxxxxx Xxxxxxx 42.0 .84%
Xxxxx Xxxxxx 70.0 1.40%
------- -------
5,000.0 100.00%
D. The cash portion of the Merger Consideration will be subject to
adjustment based upon changes in Working Capital and Long Term Debt between the
Initial Calculation Date and the Adjustment Date as follows: (i) the cash
portion of the Merger Consideration will be increased for any positive change,
and decreased for any negative change, in the Company's Working Capital between
the Initial Calculation Date and the Adjustment Date and (ii) the cash portion
of the Merger Consideration will be increased for any decrease, and decreased
for any increase, in the amount of Long Term Debt, between the Initial
Calculation Date and the Adjustment Date. In addition, the cash portion of the
Merger Consideration will be (i) reduced by the amount, if any, by which (x) the
estimated undistributed balance in the Accumulated Adjustment Account as of the
Adjustment Date exceeds (y) the Estimated AAA Amount, (ii) increased by the
amount, if any, by which (x) the estimated undistributed balance in the
Accumulated Adjustment Account as of the Adjustment Date is less than (y) the
Estimated AAA Amount, (iii) reduced by the amount, if any, by which (x) the
estimated amount of the net adjustment that would be required under Section
481(a) of the Code if, as of the Adjustment Date, the Company changed its method
of accounting for tax purposes from the cash basis to the accrual basis exceeds
(y) the Estimated Cash Basis Adjustment Amount and (iv) increased by the amount,
if any, by which (x) the estimated amount of the net adjustment that would be
required under Section 481(a) of the Code if, as of the Adjustment Date, the
Company changed its method of accounting for tax purposes from the cash basis to
the accrual basis is less than (y) the Estimated Cash Basis Adjustment Amount.
E. The Stockholders will promptly prepare a final Return for the Company
for the period ending on the day prior to the IPO Closing Date and will use
their best efforts to complete such Return within 45 days after the Closing. In
the event such final Return and the accounting records of the Company reflect
that, between the Adjustment Date and the IPO Closing Date, the Company shall
have made distributions pursuant to Schedule 6.03 in excess of the sum of the
estimated undistributed balance in the Accumulated Adjustment Account as of the
Adjustment Date and the estimated amount of the net adjustment that would be
required under Section 481(a) of the Code if,
as of the Adjustment Date, the Company changed its method of accounting for tax
purposes from the cash basis to the accrual basis, the Stockholders shall repay
to the Company the amount of such excess in accordance with their respective Pro
Rata Shares, and the Stockholders' obligation to repay such amount (and their
indemnification with respect thereto) shall not be subject to the Threshold
Amount limitation on indemnification contained in the first sentence of Section
9.06(a).
SCHEDULE 3.01
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.01 are used
herein as therein defined.
B. Each Stockholder is an "accredited investor" as defined in Securities
Act Rule 501(a), except for the following:
1) Xxxxxx X. Xxxxx
2) Xxxxx Xxxxxxxxx
3) Xxxxxxxxxx Xxxxx
4) Xxxxxxxxxx Xxxxxxx
5) Xxxxx Xxxxxx
SCHEDULE 3.02
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.02 are used
herein as therein defined.
B. The following table sets forth the ownership of the Company's Capital
Stock:
NUMBER OF
NAME CLASS SHARES OWNED
----- ------ ------------
Xxxxx X. Xxxxx Common 1,573.5
Xxxxxx X. Xxxxxx, Xx. Common 1,299.5
Xxxxx Xxxxxx Xxxxxxx Common 435.0
Xxxxxx X. Xxxxx Common 147.0
Xxxxxx Xxxxxxx Common 116.0
Xxxxx Xxxxxxxxx Common 170.0
Xxxxxxx X. Xxxxxxx Common 337.5
Xxxxxx Xxxxxx Common 284.5
Xxxxx Xxxxxx Common 249.0
Xxxxxxxxxx Xxxxx Common 234.0
Xxx Xxxxxxxx Common 42.0
Xxxxxxxxxx Xxxxxxx Common 42.0
Xxxxx Xxxxxx Common 70.0
C. No exception is taken to the representations and warranties made in
Section 3.02 of the captioned Agreement.
SCHEDULE 3.07
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.07 are used
herein as therein defined.
B. The Stockholders are, alone or with one or more other Persons, the
controlling Affiliate of the following Entity, business or trade (other than the
Company and the Company Subsidiaries, if the Stockholder is an Affiliate of the
Company) that is (a) engaged in any line of business which is the same as or
similar to any line of business in which the Company or any Company Subsidiary
is engaged or (b) is, or has within the three year period ending on the date of
the captioned Agreement, engaged in any transaction with the Company or any
Company Subsidiary except for (i) transactions in the ordinary course of
business of the Company or that Company Subsidiary and (ii) any single
transaction (or series of related transactions) involving property or services
having a value, or the payment of money, of less than $10,000:
Xxxxx Associates
SCHEDULE 4.07
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.07 are used
herein as therein defined.
B. Set forth below are the authorized Capital Stock of the Company, the
number of shares of Capital Stock of each class or series which are issued and
now outstanding, whether any shares of Capital Stock of the Company are held by
the Company as treasury shares, and whether any Derivative Securities of the
Company are outstanding:
No. of Shares No. of Derivative
No. of Shares Issued and No. of Treasury Shares
Class Par Value Authorized Outstanding Shares Outstanding
-------- --------- ------------- ------------- --------------- -----------------
Common No 5,000 5,000 None None
SCHEDULE 4.11
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.11 are used
herein as therein defined.
B. The following Related Party Agreements will be permitted to continue
in effect past the date of the Closing in accordance with their terms, subject
to the following provisions of this Schedule:
None.
SCHEDULE 4.28
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.28 are used
herein as therein defined.
B. The Company has made, and there is now in effect, an election with the
IRS to be taxed as an S corporation within the meaning of Section 1361 of the
Code.
SCHEDULE 5.08
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 5.08 are used
herein as therein defined.
B. Notwithstanding the provisions of Section 5.08 to the contrary, the
Company and the Stockholders acknowledge that WORK has engaged the services of
X.X. Xxxxx Consulting as a broker with respect to the transaction contemplated
hereby. WORK is solely responsible for payment of any fees and expenses owed by
WORK as a result of its agreement with such broker.
SCHEDULE 6.02
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.02 are used
herein as therein defined.
B. No exception is taken to the covenants contained in Section 6.02.
SCHEDULE 6.03
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.03 are used
herein as therein defined.
B. The Company and the Company Subsidiaries may make the following
Restricted Payments prior to the Effective Time:
Between the Initial Calculation Date and the date of the
Closing, the Company may make AAA Distributions up to the
amount equal to the sum of the Accumulated Adjustment
Account as of the Initial Calculation Date plus any
additions to the Accumulated Adjustment Account between the
Initial Calculation Date and the date of Closing. In
addition, the Company shall make distributions of cash basis
accounts and notes receivable as contemplated by Section
2.07.
SCHEDULE 6.10
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.10 are used
herein as therein defined.
B. The Company will make all arrangements and take all such actions as
are necessary and satisfactory to WORK to dispose, prior to the Effective Time,
of the following assets in the manner indicated below:
None (other than cash basis accounts and notes receivable to
be distributed pursuant to Section 2.07).
SCHEDULE 8.04
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
SHCG Acquisition, Inc.
Xxxxx Xxxxxx Consulting Group, Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 8.04 are used
herein as therein defined.
B. At or within 120 days following the Effective Time, WORK will cause
the following Stockholder Guarantees to be terminated:
None.
