<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
------------------------
COMMISSION FILE NUMBER 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-1648752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
<TABLE>
<S> <C>
2884 SAND HILL ROAD, SUITE 200, MENLO PARK,
CALIFORNIA 94025
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code: (415) 854-9700
------------------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
<S> <C>
Common Stock, Par Value $1.00 per Share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
None
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of February 28, 1994, the aggregate market value of the Common Stock held
by non-affiliates of the registrant was approximately $271,221,383 based on the
closing sale price on that date. This amount excludes the market value of
4,439,980 shares of Common Stock held by registrant's directors and officers and
their affiliates.
As of February 28, 1994, there were outstanding 13,518,520 shares of the
registrant's Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement to be mailed to stockholders in
connection with the registrant's annual meeting of stockholders, scheduled to be
held in May 1994, are incorporated by reference in Part III of this report.
Except as expressly incorporated by reference, the registrant's Proxy Statement
shall not be deemed to be part of this report.
<PAGE>
PART I
ITEM 1. BUSINESS
OVERVIEW
Robert Half International Inc. (the "Company"), a Delaware corporation,
primarily operates the nation's largest staffing services organization
specializing in the accounting, financial, tax and banking fields. The Company
operates through offices in the United States, Canada, the United Kingdom,
Belgium and France, offering permanent and temporary personnel services under
the names ROBERT HALF-R-and ACCOUNTEMPS-R-, respectively. Currently, the Company
operates 153 offices and an additional 7 offices are operated by independent
franchisees. The Company also places high-end office and administrative
professionals (under the name OFFICETEAM-R-).
ACCOUNTING, FINANCIAL, TAX AND BANKING SERVICES
The Company provides skilled personnel to virtually all industries for a
wide range of accounting, financial, tax, banking and data processing positions.
The Company's office network maintains an interoffice referral system which
enables the offices to cooperate in fulfilling a client's permanent and
temporary employment requirements. The ROBERT HALF permanent placement services
complement the ACCOUNTEMPS temporary staffing services by providing customers
the ability to obtain both temporary and permanent employees from one source and
by attracting applicants for permanent positions who are often willing to accept
temporary positions during their search for permanent employment.
The ACCOUNTEMPS temporary services division offers customers a reliable and
economical means of dealing with uneven or peak work loads caused by such
predictable events as vacations, taking inventories, tax work, month-end
activities and special projects and such unpredictable events as illnesses and
emergencies. Businesses increasingly view the use of temporary employees as a
means of controlling personnel costs and converting such costs from fixed to
variable. The cost and inconvenience to clients of hiring and firing permanent
employees are eliminated by the use of ACCOUNTEMPS temporaries. The temporary
workers are employees of ACCOUNTEMPS and are paid by ACCOUNTEMPS only when
working on customer assignments. The customer pays a fixed rate only for hours
worked.
ACCOUNTEMPS clients may fill their permanent employment needs by using an
ACCOUNTEMPS employee on a trial basis and, if so desired, "converting" the
temporary position to a permanent position. The client typically pays a one-time
fee for such conversions.
The Company offers permanent placement services through its office network
under the name ROBERT HALF. The Company's ROBERT HALF division specializes in
placing accounting, financial, tax, banking and data processing personnel. Fees
for successful permanent placements are paid only by the employer and are
generally a percentage of the new employee's annual compensation. No fee for
permanent placement services is charged to employment candidates.
OTHER ACTIVITIES
The Company's OFFICETEAM division places temporary and permanent high-end
office and administrative personnel, ranging from word processors to office
managers. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and
ROBERT HALF divisions.
The Company has a small operation involving only a limited number of offices
which places temporary and permanent employees in paralegal, legal
administrative and legal secretarial positions (operating under the name THE
AFFILIATES-R-).
ORGANIZATION
Management of the Company's offices is coordinated from its headquarters in
Menlo Park, California. Office managers are responsible for most activities of
their offices, including sales, local advertising and marketing and recruitment.
1
<PAGE>
The Company's headquarters provides support and centralized services to
Company-owned offices in the administrative, marketing, accounting, training and
legal areas, particularly as it relates to the standardization of the operating
procedures of Company-owned offices.
MARKETING AND RECRUITING
The Company markets its services to clients as well as employment
candidates. Local marketing and recruiting are generally conducted by each
office or related group of offices. Advertising directed to clients and
employment candidates consists primarily of yellow pages advertisements,
classified advertisements and radio. Direct marketing through mail and telephone
solicitation also constitutes a significant portion of the Company's total
advertising. National advertising conducted by the Company consists primarily of
print advertisements in national newspapers, magazines and certain trade
journals. The Company also conducts public relations activities designed to
enhance public recognition of the Company and its services. Local employees are
encouraged to be active in civic organizations and industry and trade groups.
The Company owns many trademarks, service marks and tradenames, including
the "ROBERT HALF", "ACCOUNTEMPS" and "OFFICETEAM" marks, which are registered in
the United States and in a number of foreign countries.
COMPETITION
The Company faces competition in its efforts to attract clients as well as
high-quality specialized employment candidates. The permanent placement business
is highly competitive, with a number of firms offering services similar to those
provided by the Company, mostly on a regional or local basis. The temporary
services industry is also highly competitive. There are several large nationwide
operations, some of which have greater resources than the Company. In many areas
the local companies are the strongest competitors. The most significant
competitive factors in the permanent placement and temporary personnel service
markets are price and the reliability of service, both of which are often a
function of the availability and quality of personnel. Customers and employment
candidates may use more than one permanent or temporary personnel services
company.
EMPLOYEES
The Company and its subsidiaries presently employ approximately 1,150
regular full-time employees. The Company's offices employed approximately 59,000
different temporary employees on assignments during 1993.
The ACCOUNTEMPS and OFFICETEAM temporary employees are the Company's
employees for all purposes while they are working on assignments. The Company
pays the related costs of employment, such as workers' compensation insurance,
state and federal unemployment taxes, social security and certain fringe
benefits. The Company provides voluntary health insurance coverage to interested
temporary employees.
FRANCHISING
The Company is not currently seeking to grant additional franchises or to
grant licenses for the operation of ROBERT HALF or ACCOUNTEMPS offices. However,
the Company is exploring the possibility of using joint ventures or licensing
arrangements as a means of expanding its operations.
The Company believes its relationships with its independently-owned
franchisees are good. Franchisees operate their businesses autonomously, subject
to the requirements of the franchise agreements. The franchise agreements
authorize franchisees to establish one or more ROBERT HALF and ACCOUNTEMPS
offices within designated geographic areas. The agreements provide for monthly
payments of royalties to the Company based on the franchisee's cash collections
and are generally for a term of twenty years, renewable at the franchisee's
option.
OTHER INFORMATION
The Company's current business constitutes a single business segment. (See
Item 8. Financial Statements and Supplementary Data for financial information
about the Company.)
2
<PAGE>
The Company is not dependent upon a single customer or a limited number of
customers. The Company's operations are generally more active in the first and
fourth quarters of a calendar year. Order backlog is not a material aspect of
the Company's business and no material portion of the Company's business is
subject to government contracts. The Company does not have any material
expenditures for research and development. Compliance with federal, state or
local environmental protection laws has no material effect on the capital
expenditures, earnings or competitive position of the Company.
Information about foreign operations is contained in Note N of Notes to
Consolidated Financial Statements in Item 8. The Company does not have export
sales.
ITEM 2. PROPERTIES
The Company's headquarters is located in Menlo Park, California. Placement
activities are conducted through 153 offices located in the United States,
Canada, the United Kingdom, Belgium and France. All of the offices are leased.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings other
than routine litigation incidental to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is listed for trading on the New York Stock
Exchange under the symbol "RHI". On February 28, 1994, there were 1,337 holders
of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock as
quoted on the New York Stock Exchange:
<TABLE>
<CAPTION>
SALES PRICES
--------------------
1993 HIGH LOW
- ------------------------------------------------------------- --------- ---------
<S> <C> <C>
4th Quarter.................................................. $ 28.25 $ 24.00
3rd Quarter.................................................. $ 30.00 $ 21.375
2nd Quarter.................................................. $ 22.50 $ 16.25
1st Quarter.................................................. $ 18.125 $ 12.625
<CAPTION>
SALES PRICES
--------------------
1992 HIGH LOW
- ------------------------------------------------------------- --------- ---------
<S> <C> <C>
4th Quarter.................................................. $ 14.50 $ 11.625
3rd Quarter.................................................. $ 11.75 $ 10.25
2nd Quarter.................................................. $ 13.875 $ 11.50
1st Quarter.................................................. $ 14.375 $ 11.00
</TABLE>
No cash dividends were paid in 1993 or 1992. The Company, as it deems
appropriate, may continue to retain all earnings for use in its business or may
consider paying a dividend in the future.
3
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
Following is a table of selected financial data of the Company of the last
five years:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net service revenues..................... $ 306,166 $ 220,179 $ 209,455 $ 248,557 $ 234,504
Direct costs of services, consisting of
payroll and payroll taxes for temporary
employees............................... 188,292 131,875 117,583 130,792 119,682
----------- ----------- ----------- ----------- -----------
Gross margin............................. 117,874 88,304 91,872 117,765 114,822
Selling, general and administrative
expenses................................ 88,074 72,136 73,326 90,518 81,157
Amortization of intangible assets........ 4,251 3,961 3,896 3,721 3,357
Interest expense......................... 3,992 4,301 6,574 8,593 7,264
----------- ----------- ----------- ----------- -----------
Income before income taxes and
extraordinary item...................... 21,557 7,906 8,076 14,933 23,044
Provision for income taxes............... 9,834 3,524 3,961 6,067 9,922
----------- ----------- ----------- ----------- -----------
Income before extraordinary item......... 11,723 4,382 4,115 8,866 13,122
Extraordinary item from repurchases of
debentures, net of income tax effects... -- -- -- 453 345
----------- ----------- ----------- ----------- -----------
Net income............................... $ 11,723 $ 4,382 $ 4,115 $ 9,319 $ 13,467
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
<CAPTION>
DECEMBER 31,
---------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME PER PRIMARY SHARE:
Income before extraordinary item......... $ .93 $ .37 $ .35 $ .78 $ 1.13
Extraordinary item....................... -- -- -- .04 .03
----------- ----------- ----------- ----------- -----------
Net income............................... $ .93 $ .37 $ .35 $ .82 $ 1.16
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
INCOME PER FULLY DILUTED SHARE:
Income before extraordinary item......... $ .93 $ .37 $ .35 $ .77 $ 1.11
Extraordinary item....................... -- -- -- .04 .03
----------- ----------- ----------- ----------- -----------
Net income............................... $ .93 $ .37 $ .35 $ .81 $ 1.14
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
WEIGHTED AVERAGE NUMBER OF SHARES:
Primary.................................. 12,546 11,965 11,603 11,376 11,601
Fully Diluted............................ 12,630 12,003 11,637 11,468 13,832
<CAPTION>
DECEMBER 31,
---------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Intangible assets, net................... $ 152,156 $ 143,757 $ 140,715 $ 141,728 $ 133,695
Total assets............................. 204,598 181,999 178,207 187,844 181,437
Debt financing........................... 32,740 61,855 67,614 86,475 90,298
Stockholders' equity..................... 133,602 90,972 84,419 77,291 68,675
</TABLE>
4
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1993
Temporary services revenues increased 40% during 1993, including the
revenues generated from the Company's OfficeTeam division, which was started in
1991 to provide highly-skilled office and administrative personnel. Permanent
placement revenues increased 30% during the year ended December 31, 1993. The
positive revenue comparisons reflect strong demand for the Company's specialized
personnel services.
Net service revenues grew at a slower rate in 1992 compared to 1991,
primarily as a result of the general economic recession. Temporary services
revenues increased 9% while Robert Half division revenues decreased 21%.
Gross margin as a percentage of revenues declined 1% between 1993 and 1992
and equaled 39% of revenue in 1993. In 1992, gross margin equaled 40% of revenue
and in 1991, gross margin was 44% of revenue. The percentage declines related
principally to a lower mix of the higher permanent placement gross margins and
higher unemployment insurance costs associated with the temporary services
divisions.
Selling, general and administrative expenses were $88 million during 1993
compared to $72 million in 1992 and $73 million in 1991. Selling, general and
administrative expenses as a percentage of revenues was 29% in 1993, compared to
33% in 1992 and 35% in 1991. The percentage declines were attributable to
revenue growth coupled with the Company's continued cost containment.
Amortization of intangible assets increased from 1991 to 1993 due to the
acquisitions in each of those years of additional personnel services operations.
Interest expense for the years ended December 31, 1993 and 1992 decreased 7%
and 35%, respectively, over the comparable prior periods due to the reduction in
outstanding indebtedness in both years and declining interest rates in the year
ending December 31, 1992.
The provision for income taxes was 46% in 1993, as compared to 45% in 1992
and 49% in 1991. The 1993 increase reflects the effect of the 1% increase in the
federal corporate income tax rate as a result of the 1993 Tax Act. Because of
the increase in pre-tax book income, the effect of the non-deductible intangible
amortization on the effective tax rate was reduced in 1993 as compared to 1992.
The 1992 reduction relative to 1991 was due primarily to a one-time benefit in
the fourth quarter of 1992 for the resolution of tax accounting issues related
to previous acquisitions. The Financial Accounting Standards Board issued a new
standard on accounting for income taxes, which the Company was required to adopt
on January 1, 1993. The cumulative effect of the adoption of the accounting
method prescribed by the new standard was immaterial.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during the past three years is the net
effect of funds generated by operations and the funds used for the personnel
services acquisitions, principal payments on outstanding notes payable, and the
securities repurchase program.
The Company's Board of Directors previously authorized the repurchase, on
the open market or in privately-negotiated transactions, of up to 3.25 million
shares of the Company's common stock or the equivalent amount of Convertible
Debentures or other common stock equivalents. The Company has repurchased
approximately 3.1 million shares of the Company's common stock or common stock
equivalents. See Note F to the Consolidated Financial Statements. Repurchases of
the securities have been funded with cash generated from operations and the bank
line of credit.
On December 10, 1993, substantially all of its outstanding convertible
subordinated debentures were converted into common stock of the Company. See
Note E to the Consolidated Financial Statements.
The Company's working capital requirements consist primarily of the
financing of accounts receivable. While there can be no assurances in this
regard, the Company expects that internally generated cash plus the bank
revolving line of credit will be sufficient to support the working capital needs
of the Company's offices, the Company's fixed payments and other long-term
obligations.
5
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1993 1992
----------- -----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents............................................................. $ 1,773 $ 560
Accounts receivable, less allowances of $2,194 and $1,494............................. 40,155 27,362
Other current assets.................................................................. 5,538 4,651
----------- -----------
Total current assets................................................................ 47,466 32,573
Intangible assets, less accumulated amortization of $23,665 and $19,414............... 152,156 143,757
Other assets.......................................................................... 4,976 5,669
----------- -----------
Total assets........................................................................ $ 204,598 $ 181,999
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses................................................. $ 6,658 $ 5,663
Accrued payroll costs................................................................. 13,243 7,251
Income taxes payable.................................................................. 1,792 240
Current portion of notes payable and other indebtedness............................... 408 883
Accrued interest payable.............................................................. 87 856
----------- -----------
Total current liabilities........................................................... 22,188 14,893
Notes payable and other indebtedness, less current portion............................ 2,032 2,627
Bank loan (revolving credit).......................................................... 30,300 35,600
Deferred income taxes................................................................. 16,476 15,162
Convertible subordinated debentures................................................... -- 22,745
----------- -----------
Total liabilities................................................................... 70,996 91,027
COMMITMENTS AND CONTINGENCIES (SEE NOTES)
STOCKHOLDERS' EQUITY:
Common stock, $1 par value:
authorized -- 30,000,000
shares issued and outstanding -- 13,418,402 and 11,820,742 shares.................... 13,418 11,821
Capital surplus....................................................................... 47,496 16,623
Deferred compensation................................................................. (2,113) (2,208)
Accumulated translation adjustments................................................... (589) (257)
Retained earnings..................................................................... 75,390 64,993
----------- -----------
Total stockholders' equity.......................................................... 133,602 90,972
----------- -----------
Total liabilities and stockholders' equity.......................................... $ 204,598 $ 181,999
----------- -----------
----------- -----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
6
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Net service revenues....................................................... $ 306,166 $ 220,179 $ 209,455
Direct costs of services, consisting of payroll and payroll taxes for
temporary employees....................................................... 188,292 131,875 117,583
----------- ----------- -----------
Gross margin............................................................... 117,874 88,304 91,872
Selling, general and administrative expenses............................... 88,074 72,136 73,326
Amortization of intangible assets.......................................... 4,251 3,961 3,896
Interest expense........................................................... 3,992 4,301 6,574
----------- ----------- -----------
Income before income taxes................................................. 21,557 7,906 8,076
Provision for income taxes................................................. 9,834 3,524 3,961
----------- ----------- -----------
Net income................................................................. $ 11,723 $ 4,382 $ 4,115
----------- ----------- -----------
----------- ----------- -----------
Income per share........................................................... $ .93 $ .37 $ .35
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
7
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
COMMON STOCK:
Balance at beginning of period............................................... $ 11,821 $ 11,540 $ 11,080
Issuances of restricted stock net -- par value............................... 41 96 185
Conversion of debentures -- par value........................................ 1,020 -- --
Repurchases of common stock -- par value..................................... (60) (53) (3)
Exercises of stock options -- par value...................................... 543 230 232
Issuance of common stock for acquisitions -- par value....................... 53 8 46
--------- --------- ---------
Balance at end of period................................................... $ 13,418 $ 11,821 $ 11,540
--------- --------- ---------
--------- --------- ---------
CAPITAL SURPLUS:
Balance at beginning of period............................................... $ 16,623 $ 13,499 $ 9,684
Issuances of restricted stock, net -- excess over par value.................. 866 1,165 1,720
Conversion of debentures -- excess over par value............................ 21,205 -- --
Exercises of stock options -- excess over par value.......................... 4,572 1,331 1,229
Tax benefits from exercises of stock options................................. 2,823 535 402
Issuance of common stock for acquisitions -- excess over par value........... 1,407 93 464
--------- --------- ---------
Balance at end of period................................................... $ 47,496 $ 16,623 $ 13,499
--------- --------- ---------
--------- --------- ---------
DEFERRED COMPENSATION:
Balance at beginning of period............................................... $ (2,208) $ (1,876) $ (646)
Issuances of restricted stock, net........................................... (907) (1,261) (1,905)
Amortization of deferred compensation from the issuances of restricted
stock....................................................................... 1,002 929 675
--------- --------- ---------
Balance at end of period................................................... $ (2,113) $ (2,208) $ (1,876)
--------- --------- ---------
--------- --------- ---------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period............................................... $ (257) $ -- $ --
Translation adjustments...................................................... (332) (257) --
--------- --------- ---------
Balance at end of period................................................... $ (589) $ (257) $ --
--------- --------- ---------
--------- --------- ---------
RETAINED EARNINGS:
Balance at beginning of period............................................... $ 64,993 $ 61,256 $ 57,173
Repurchases of common stock -- excess over par value......................... (1,326) (645) (32)
Net income................................................................... 11,723 4,382 4,115
--------- --------- ---------
Balance at end of period................................................... $ 75,390 $ 64,993 $ 61,256
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
8
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1993 1992 1991
----------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................. $ 11,723 $ 4,382 $ 4,115
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of intangible assets....................................... 4,251 3,961 3,896
Depreciation expense.................................................... 2,383 2,426 2,523
Deferred income taxes................................................... 1,136 1,947 1,941
Changes in assets and liabilities, net of effects of acquisitions:
Decrease (increase) in accounts receivable.............................. (10,481) (1,049) 6,595
Increase in accounts payable, accrued expenses and accrued payroll
costs.................................................................. 5,853 863 465
Change in other assets, net of change in other liabilities.............. 52 (1,025) (1,831)
----------- --------- ---------
Total adjustments......................................................... 3,194 7,123 13,589
----------- --------- ---------
Net cash and cash equivalents provided by operating activities.............. 14,917 11,505 17,704
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions, net of cash acquired.......................................... (11,141) (6,438) (689)
Capital expenditures........................................................ (2,340) (1,101) (789)
----------- --------- ---------
Net cash and cash equivalents used in investing activities.................. (13,481) (7,539) (1,478)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Borrowings under credit agreement........................................... 138,900 69,100 54,000
Repayments under credit agreement........................................... (144,200) (62,100) (67,400)
Repurchases of convertible debentures....................................... (305) -- (770)
Principal payments on notes payable and other indebtedness.................. (1,170) (12,603) (4,287)
Proceeds and tax benefits from exercise of stock options.................... 7,938 2,096 1,863
Repurchases of common stock and common stock equivalents.................... (1,386) (698) (35)
----------- --------- ---------
Net cash and cash equivalents used in financing activities.................. (223) (4,205) (16,629)
----------- --------- ---------
Net increase (decrease) in cash and cash equivalents........................ 1,213 (239) (403)
Cash and cash equivalents at beginning of period............................ 560 799 1,202
----------- --------- ---------
Cash and cash equivalents at end of period.................................. $ 1,773 $ 560 $ 799
----------- --------- ---------
----------- --------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest.................................................................... $ 4,256 $ 4,233 $ 6,928
Income taxes................................................................ $ 4,568 $ 1,675 $ 2,217
Acquisitions:
Fair value of assets acquired --
Intangible assets......................................................... $ 12,650 $ 6,502 $ 1,563
Other..................................................................... 2,506 424 347
Liabilities incurred --
Notes payable and contracts............................................... 101 -- 128
Other..................................................................... 2,454 387 583
Common stock issued....................................................... 1,460 101 510
----------- --------- ---------
Cash paid, net of cash acquired......................................... $ 11,141 $ 6,438 $ 689
----------- --------- ---------
----------- --------- ---------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include
the accounts of Robert Half International Inc. (the "Company") and its
subsidiaries, all of which are wholly-owned. The Company is a Delaware
corporation. All significant intercompany balances have been eliminated. Certain
reclassifications have been made to the 1992 and 1991 financial statements to
conform to the 1993 presentation.
REVENUE RECOGNITION. Temporary services revenues are recognized when the
services are rendered by the Company's temporary employees. Permanent placement
revenues are recognized when employment candidates accept offers of permanent
employment. Reserves are established to estimate losses due to placed candidates
not remaining in employment for the Company's guarantee period, typically 90
days.
FOREIGN CURRENCY TRANSLATION. Foreign income statement items are translated
at the monthly average exchange rates prevailing during the period. Foreign
balance sheets are translated at the current exchange rates at the end of the
period, and the related translation adjustments are recorded as part of
Stockholders' Equity. Gains and losses resulting from foreign currency
transactions are included in the Consolidated Statements of Income.
CASH AND CASH EQUIVALENTS. For purposes of the Consolidated Statements of
Cash Flows, the Company classifies all highly-liquid investments with a maturity
of three months or less as cash equivalents.
INTANGIBLE ASSETS. Intangible assets represent the cost of acquired
companies in excess of the fair market value of their net tangible assets at
acquisition date, and are being amortized on a straight-line basis over a period
of 40 years.
INCOME TAXES. Effective January 1, 1993, the Company adopted Financial
Accounting Standards No. 109, Accounting for Income Taxes (FAS 109). Under FAS
109, deferred taxes are computed based on the difference between the financial
statement and income tax bases of assets and liabilities using the enacted
marginal tax rate. As permitted under the provisions of FAS 109, the Company
elected not to restate prior years and has determined that the cumulative effect
of implementation was immaterial.
NOTE B -- ACQUISITIONS
In July 1986, the Company acquired all of the outstanding stock of Robert
Half Incorporated, the franchisor of the Accountemps and Robert Half operations.
Subsequently, in 57 separate transactions the Company acquired all of the
outstanding stock of certain corporations operating Accountemps and Robert Half
franchised offices in the United States, the United Kingdom and Canada as well
as other personnel services businesses. The Company has paid approximately $185
million in cash, stock, notes and other indebtedness in these acquisitions,
excluding transaction costs and cash acquired.
These acquisitions were accounted for as purchases, and the excess of cost
over the fair market value of the net tangible assets acquired is being
amortized over 40 years using the straight-line method. Results of operations of
the acquired companies are included in the Consolidated Statements of Income
from the dates of acquisition. The acquisitions made during 1993 and 1992 had no
material impact on the pro forma results of operations.
10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE C -- NOTES PAYABLE AND OTHER INDEBTEDNESS
The Company issued promissory notes as well as other forms of indebtedness
in connection with certain acquisitions. These are due in varying installments,
carry varying interest rates and in aggregate amount to $2,440,000 at December
31, 1993, and $3,510,000 at December 31, 1992. At December 31, 1993, $1.5
million of the notes were secured by standby letters of credit (see Note D). The
following table shows the schedule of maturities for notes payable and other
indebtedness at December 31, 1993 (in thousands):
<TABLE>
<S> <C>
1994............................................... $ 408
1995............................................... 555
1996............................................... 351
1997............................................... 404
1998............................................... 464
Thereafter......................................... 258
---------
$ 2,440
---------
---------
</TABLE>
At December 31, 1993, all of the notes carried fixed rates of interest
ranging from 8.0% to 13.3%. The weighted average interest rate for the above was
approximately 11.1% and 8.5% for the years ended December 31, 1993 and 1992,
respectively.
As part of a Restructuring in 1987, a newly formed corporation, BF
Enterprises, Inc., assumed the obligation for certain subordinated debentures
issued by a predecessor of the Company. At December 31, 1993, the Company
remains contingently liable for $11.3 million of these subordinated debentures,
payment of $9.5 million of which has been provided for by the issuance of
letters of credit to the trustee for the debentures by BF Enterprises, Inc.
Additionally, pursuant to a pledge and security agreement entered into at the
time of Restructuring, BF Enterprises, Inc., has agreed to pledge to the Company
collateral (consisting of real estate, marketable securities and bank letters of
credit) if the net worth of BF Enterprises, Inc., falls below certain minimum
levels.
NOTE D -- BANK LOAN (REVOLVING CREDIT)
On November 1, 1993, the Company replaced the then existing unsecured credit
facility. The new credit facility provides a line of credit of up to
$80,000,000, which is available to fund the Company's general business and
working capital needs, including acquisitions and the purchase of the Company's
common stock, and to cover the issuance of debt support standby letters of
credit up to $15,000,000.
As of December 31, 1993, the Company had borrowed $30,300,000 on the line of
credit, and had used $2,780,000 in debt support standby letters of credit. Of
the $30,300,000 outstanding balance at December 31, 1993, $29,000,000 carried an
interest rate tied to Eurodollar rates plus 1.25% and $1,300,000 carried an
interest rate at prime. There is a commitment fee on the unused portion of the
entire credit facility of .25%. The loan is subject to certain financial
covenants which also affect the interest rates charged.
The credit facility has the following scheduled reduction in availability
(in thousands):
<TABLE>
<S> <C>
1995.............................................. $ 5,000
1996.............................................. $ 15,000
1997.............................................. $ 15,000
1998.............................................. $ 15,000
1999.............................................. $ 15,000
2000.............................................. $ 15,000
</TABLE>
The final maturity date for the credit facility is August 31, 2000.
11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE D -- BANK LOAN (REVOLVING CREDIT) (CONTINUED)
As of December 31, 1992, the Company had borrowed $35,600,000 of the
borrowing facility in place at that time and had used $2,700,000 in debt support
standby letters of credit. Of the $35,600,000 outstanding loan balance at
December 31, 1992, $25,000,000 carried an interest rate tied to Eurodollar rates
plus 1.25% and the remaining balance of $10,600,000 carried an interest rate at
prime.
NOTE E -- CONVERTIBLE SUBORDINATED DEBENTURES
On August 6, 1987, the Company issued $74,750,000 principal amount of the
Convertible Subordinated Debentures (the "Convertible Debentures"). Prior to
1993, all but $22,745,000 of the Convertible Debentures were repurchased by the
Company pursuant to its repurchase program (see Note F). The Convertible
Debentures were unsecured obligations of the Company with an original maturity
date of August 1, 2012. Interest was payable semi-annually as of February 1 and
August 1 of each year to the registered holders as of the preceding January 15
and July 15, respectively. The Convertible Debentures were redeemable at the
Company's option at any time on or after August 1, 1990, at declining redemption
prices.
In December 1993, the Company called for redemption all of its then
outstanding Convertible Debentures. Holders of $22,440,000 in principal amount
elected to convert their debentures into 1.02 million shares of common stock at
the conversion price of $22.00 per share. The remaining $305,000 in principal
amount of Convertible Debentures were redeemed at 102.9% of their principal
amount plus accrued interest.
NOTE F -- SECURITIES REPURCHASE PROGRAM
The Company was previously authorized by its Board of Directors to
repurchase up to a total of 3.25 million shares of the Company's common stock,
or the equivalent amount of Convertible Debentures or other common stock
equivalents from time to time on the open market or in privately negotiated
transactions. As of December 31, 1993, 3.1 million equivalent shares have been
repurchased. There were no repurchases under the program during 1993. During
1992, the Company purchased 15,230 shares of common stock. In 1991, the Company
repurchased $1 million face amount of Convertible Debentures and purchased 3,457
shares of common stock for an aggregate of approximately 49,000 shares or share
equivalents. These repurchases were financed with internally generated cash and
the revolving line of credit.
12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE G -- INCOME TAXES
The provisions for income taxes for the three years ended December 31, 1993
consisted of the following (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal................................................................ $ 6,995 $ 1,014 $ 1,271
State.................................................................. 1,604 252 196
Foreign................................................................ 99 311 553
Deferred -- principally domestic......................................... 1,136 1,947 1,941
--------- --------- ---------
$ 9,834 $ 3,524 $ 3,961
--------- --------- ---------
--------- --------- ---------
</TABLE>
The income taxes shown above varied from the statutory federal income tax
rates for these periods as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Federal U.S. income tax rate............................................... 35.0% 34.0% 34.0%
State income taxes, net of federal tax benefit............................. 5.5 5.0 3.7
Amortization of intangible assets.......................................... 4.1 10.2 9.9
Other, net................................................................. 1.0 (4.6) 1.4
--- --- ---
Effective tax rate......................................................... 45.6% 44.6% 49.0%
--- --- ---
--- --- ---
</TABLE>
The deferred portion of the tax provisions consisted of the following (in
thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Amortization of franchise rights......................................... $ 1,484 $ 1,406 $ 1,280
Change from cash basis accounting........................................ (32) (68) (114)
Compensation arrangements................................................ 137 89 488
Allowance for doubtful accounts.......................................... (86) 643 200
Other, net............................................................... (367) (123) 87
--------- --------- ---------
$ 1,136 $ 1,947 $ 1,941
--------- --------- ---------
--------- --------- ---------
</TABLE>
During the fourth quarter of 1992, the Company recorded a one-time benefit
of $400,000 for the resolution of certain tax accounting issues related to
previous acquisitions.
The deferred income tax liability shown on the balance sheet is comprised of
the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1993
------------
<S> <C>
Deferred income tax assets............................................ $ (498)
Deferred income tax liabilities....................................... 16,974
------------
$ 16,476
------------
------------
</TABLE>
No valuation allowances against deferred tax assets were required at
December 31, 1993.
13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE G -- INCOME TAXES (CONTINUED)
The components of the net deferred income tax liability at December 31, 1993
were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1993
------------
<S> <C>
Amortization of intangible assets..................................... $ 16,365
Foreign taxes......................................................... 495
Other................................................................. (384)
------------
$ 16,476
------------
------------
</TABLE>
NOTE H -- EMPLOYEE BENEFIT PLANS
Under a retirement plan covering one current and one former executive
officer of the Company, monthly benefits are payable equal to 25% of the
participant's base compensation as defined, increased by an inflation formula.
The plan was amended effective May 31, 1992 to provide a fixed supplemental
benefit for the current employee during the first 15 years after retirement. The
current employee forfeited long-term incentive awards of equal value in exchange
for this amendment. The plan was also amended effective May 21, 1991 for the
current employee to increase the percentage of base compensation to 30%
increasing thereafter by 3% for each year of service beyond the age of 50, up to
a maximum of 66%. During 1993, the Company changed its discount rate assumption
from 8% to 6%. The effect of both plan amendments and the discount rate change
are being amortized over the employee's expected future service period of 15
years and will increase after-tax expense by approximately $76,000 per year. The
employee can require the Company to discharge its liability at defined intervals
by purchasing annuities. At December 31, 1992 a liability of $1,124,000 was
established to cover the estimated unfunded cost of these benefits. This amount
was increased to $1,721,000 at December 31, 1993. Pre-tax pension costs for
these plans were $188,000, $131,000, and $72,000 for the years ended December
31, 1993, 1992 and 1991, respectively. These charges were computed using certain
assumptions regarding salary increases, retirement age and life expectancy.
NOTE I -- COMMITMENTS AND CONTINGENCIES
Rental expense, primarily for office premises, amounted to $8,457,000,
$8,042,000 and $7,616,000 for the years ended December 31, 1993, 1992 and 1991,
respectively. The approximate minimum rental commitments for 1994 and thereafter
under non-cancelable leases in effect at December 31, 1993, are as follows (in
thousands):
<TABLE>
<S> <C>
1994....................................................... $ 6,540
1995....................................................... $ 5,812
1996....................................................... $ 4,492
1997....................................................... $ 3,486
1998....................................................... $ 2,926
Thereafter................................................. $ 5,267
</TABLE>
14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE J -- STOCK PLANS
Under various stock plans, officers, employees and outside directors may
receive grants of restricted stock or options to purchase common stock. Grants
are made at the discretion of the Compensation Committee of the Board of
Directors. Grants usually vest over four years.
Options granted under the plans have exercise prices ranging from 85% to
100% of the fair market value of the Company's common stock at the date of
grant, consist of both incentive stock options and nonstatutory stock options
under the Internal Revenue Code, and generally have a term of ten years.
Recipients of restricted stock do not pay any cash consideration to the
Company for the shares, have the right to vote all shares subject to such grant,
and receive all dividends with respect to such shares, whether or not the shares
have vested.
As of December 31, 1993 the total number of available grants under the plans
(consisting of either restricted stock or options) was 396,054.
The following table reflects activity under all stock plans from January 1,
1991 through December 31, 1993 and the exercise prices:
<TABLE>
<CAPTION>
STOCK OPTION PLANS
--------------------------------
RESTRICTED NUMBER OF EXERCISE PRICE
STOCK PLANS SHARES PER SHARE
----------- ------------- -----------------
<S> <C> <C> <C>
Outstanding, January 1, 1991............................. 46,810 1,446,176 $ 6.23 - 18.83
Granted................................................ 191,949 483,452 $ 8.61 - 11.00
Exercised.............................................. -- (232,541) $ 6.23 - 9.25
Forfeited.............................................. (7,044) (136,892) $ 8.61 - 17.75
----------- ------------- -----------------
Outstanding, December 31, 1991........................... 231,715 1,560,195 $ 6.23 - 18.83
Granted................................................ 132,037 275,117 $ 10.50 - 14.00
Exercised.............................................. -- (229,855) $ 6.23 - 10.13
Forfeited.............................................. (36,513) (144,553) $ 8.61 - 14.00
----------- ------------- -----------------
Outstanding, December 31, 1992........................... 327,239 1,460,904 $ 7.09 - 18.83
Granted................................................ 71,469 707,971 $ 12.33 - 25.25
Exercised.............................................. -- (542,516) $ 7.51 - 16.13
Forfeited.............................................. (28,839) (155,109) $ 8.61 - 21.46
----------- ------------- -----------------
Outstanding, December 31, 1993........................... 369,869 1,471,250 $ 7.09 - 25.25
----------- ------------- -----------------
----------- ------------- -----------------
</TABLE>
As of December 31, 1993, an aggregate of 615,965 restricted common stock or
options to purchase common stock were vested.
NOTE K -- PREFERRED SHARE PURCHASE RIGHTS
On July 23, 1990, the Board of Directors declared a dividend distribution of
one Preferred Share Purchase Right (the "Rights") on each outstanding share of
the Company's common stock.
The Rights will be exercisable only if a person or group becomes an
Acquiring Person (as such term is defined in the Right's Agreement) or announces
a tender offer the consummation of which would result in a person or group
becoming an Acquiring Person. Each Right will entitle stockholders to buy one
one-hundredth of a share of a new series of junior participating preferred stock
at an exercise price of $65 (subject to adjustment) upon certain events.
Effective October 28, 1993, Acquiring Person means any person or group of
affiliated or associated persons who shall be the beneficial owner of 15% or
more of the common stock of the Company then outstanding, but does not include
the only shareholder (and affiliates and associates thereof) known by the
Company to have beneficial ownership on October 28, 1993, in excess of 15% of
the then outstanding common stock, provided that
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE K -- PREFERRED SHARE PURCHASE RIGHTS (CONTINUED)
such exclusion terminates immediately in the event that such shareholder (or any
such affiliate or associate) increases its beneficial ownership of common stock
other than pursuant to certain specified transactions.
If, after the Rights become exercisable, the Company is acquired in a merger
or other business combination transaction, or sells 50% or more of its assets or
earnings power, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, a number of the acquiring company's common shares
having a market value at the time of twice the Right's exercise price.
In addition, if a person or group becomes an Acquiring Person otherwise than
pursuant to a cash tender offer for all shares in which such person or group
increases its stake to 85% of the outstanding shares of common stock, each Right
will entitle its holder (other than such person or members of such group) to
purchase, at the Right's then-current exercise price, a number of the Company's
common shares (or cash, other securities or property) having a market value of
twice the Right's exercise price.
At any time after a person or group becomes an Acquiring Person and prior to
an acquisition by such person or group of 50% or more of the common stock, the
Board of Directors may exchange the Rights (other than Rights owned by such
person or group), in whole or in part, at an exchange ratio of one share of
common stock (or one one-hundredth of a share of the new series of junior
participating preferred stock) per Right.
At any time prior to ten days after a person or group becomes an Acquiring
Person, the Rights are redeemable for one cent per Right at the option of the
Board of Directors.
The dividend distribution was made on August 8, 1990, payable to
stockholders of record on that date. The Rights will expire on July 23, 2000.
NOTE L -- INCOME PER SHARE
Income per fully diluted share has been computed using the weighted average
number of shares of fully diluted common stock and common stock equivalents
outstanding during each period (12,630,000, 12,003,000 and 11,637,000 shares for
the years ending December 31, 1993, 1992 and 1991, respectively). An assumed
conversion of the Convertible Debentures was not dilutive to income per share in
1993 (see Note E), 1992 or 1991.
NOTE M -- QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tabulation shows certain quarterly financial data for 1993 and
1992 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
QUARTER
------------------------------------------
1993 1 2 3 4 YEAR
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net service revenues............... $ 69,573 $ 72,446 $ 77,061 $ 87,086 $ 306,166
Gross margin....................... 27,307 28,457 29,400 32,710 117,874
Income before income taxes......... 4,396 5,360 5,873 5,928 21,557
Net income......................... 2,387 2,900 3,091 3,345 11,723
Net income per share............... .20 .23 .24 .26 .93
1992
Net service revenues............... $ 52,688 $ 53,411 $ 55,052 $ 59,028 $ 220,179
Gross margin....................... 21,775 21,832 21,712 22,985 88,304
Income before income taxes......... 1,734 2,168 2,236 1,768 7,906
Net income......................... 831 1,128 1,147 1,276 4,382
Net income per share............... .07 .09 .10 .11 .37
</TABLE>
16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE N -- SEGMENT REPORTING
Information about the Company's operations in different geographic locations
for the three fiscal years ended in December 1993, is shown below. The Company's
areas of operations outside of the United States include Canada, the United
Kingdom, Belgium and France. Revenues represent total net revenues from the
respective geographic areas. Operating income is net revenues less operating
costs and expenses pertaining to specific geographic areas. Foreign operating
income reflects charges for U.S. management fees and amortization of intangibles
of $917,000, $854,000 and $650,000 for the years ended December 31, 1993, 1992
and 1991, respectively. Domestic operating income reflects charges for
amortization of intangibles of $3,841,000, $3,606,000 and $3,564,000 for the
years ended December 31, 1993, 1992 and 1991, respectively. Identifiable assets
are those assets used in the geographic areas and are reflected after
elimination of intercompany balances.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Revenue
Domestic....................................................... $ 280,266 $ 196,910 $ 187,282
Foreign........................................................ 25,900 23,269 22,173
----------- ----------- -----------
$ 306,166 $ 220,179 $ 209,455
----------- ----------- -----------
----------- ----------- -----------
Operating Income
Domestic....................................................... $ 26,294 $ 12,585 $ 13,608
Foreign........................................................ (745) (378) 1,042
----------- ----------- -----------
$ 25,549 $ 12,207 $ 14,650
----------- ----------- -----------
----------- ----------- -----------
Assets
Domestic....................................................... $ 180,778 $ 163,030 $ 157,589
Foreign........................................................ 23,820 18,969 20,618
----------- ----------- -----------
$ 204,598 $ 181,999 $ 178,207
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
17
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS
OF ROBERT HALF INTERNATIONAL INC.:
We have audited the accompanying consolidated statements of financial
position of Robert Half International Inc. (a Delaware corporation) and
subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Robert Half International
Inc. and subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
San Francisco, California
January 28, 1994
18
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10 through 13 of Part III is incorporated
by reference from the registrant's Proxy Statement, under the captions
"NOMINATION AND ELECTION OF DIRECTORS," "BENEFICIAL STOCK OWNERSHIP,"
"COMPENSATION OF DIRECTORS," "COMPENSATION OF EXECUTIVE OFFICERS" AND
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN
TRANSACTIONS," which Proxy Statement will be mailed to stockholders in
connection with the registrant's annual meeting of stockholders which is
scheduled to be held in May 1994.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company and its
subsidiaries are included in Item 8 of this report:
Consolidated statements of financial position at December 31, 1993 and
1992.
Consolidated statements of income for the years ended December 31, 1993,
1992 and 1991.
Consolidated statements of stockholders' equity for the years ended
December 31, 1993, 1992 and 1991.
Consolidated statements of cash flows for the years ended December 31,
1993, 1992 and 1991.
Notes to consolidated financial statements.
Report of independent public accountants.
Selected quarterly financial data for the years ended December 31, 1993 and
1992 are set forth in Note M - Quarterly Financial Data (Unaudited) included
in Item 8 of this report.
2. FINANCIAL STATEMENT SCHEDULES
Report of independent public accountants on supporting schedules.
II - Amounts receivable from related parties
X - Supplementary income statement information
Schedules I, III, IV, V, VI, VII, VIII, IX, XI, XII and XIII have been
omitted as they are inapplicable.
3. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1991.
3.2 By-Laws.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust and First National
Bank of Minneapolis, incorporated by reference to Exhibits 6(t) and 6(v) to the Form S-14
Registration Statement of the Registrant (formerly known as Boothe Interim Corporation) filed with
the Securities and Exchange Commission on December 31, 1979.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and Manufacturers Hanover
Trust Company of California, incorporated by reference to (i) Exhibit 1 to the Registrant's
Registration Statement on Form 8-A for its Preferred Share Purchase Rights, which Registration
Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990 and (iii) Exhibit 3
to Registrant's Form 8-A/A Amendment No. 2 filed on December 2, 1993.
10.1 Credit Agreement dated as of November 1, 1993, among the Registrant, NationsBank of North
Carolina, N.A. and Bank of America National Trust and Savings Association, incorporated by
reference to Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1993.
10.2 Reorganization and Distribution Agreement between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.9 to Registrant's Registration Statement on Form S-1 (No.
33-15171).
10.3 Agreement of Assignment and Assumption of Rights and Obligations under the Indenture between the
Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987.
10.4 Assumption of Obligations and Liabilities between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987.
10.5 Pledge and Security Agreement between the Registrant and BF Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to Registrant's Registration Statement on Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference
to Exhibit 10.11 to Registrant's Registration Statement on Form S-1 (No. 33-15171).
*10.7 Employment Agreement dated as of October 2, 1985, between the Registrant and Harold M. Messmer,
Jr. The Eighth Amendment to such agreement is filed with this Annual Report on Form 10-K for the
fiscal year ended December 31, 1993. The original agreement and the first seven amendments thereto
are incorporated by reference to (i) Exhibit 10.(c) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1990, (vi)
Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1991 and (vii) Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1993.
*10.8 Key Executive Retirement Plan - Level II, incorporated by reference to Exhibit 10.(f) to
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1985 and Exhibit
19.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
*10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant and Harold M. Messmer,
Jr. The Sixth Amendment to such agreement is filed with this Annual Report on form 10-K for the
fiscal year ended December 31, 1992. The original agreement and the first five amendments thereto
are incorporated by reference to (i) Exhibit 10.5 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and (iv) Exhibit 10.2 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1993.
*10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit 10.7 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988.
*10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit 10.(j) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1986.
*10.12 Outside Directors' Option Plan, incorporated by reference to Exhibit 10.21 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to Exhibit 10.14 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992.
*10.14 StockPlus Plan, as amended, incorporated by reference to Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.
*10.15 1993 Incentive Plan, as amended.
*10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.17 Annual Performance Bonus Plan.
*10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii) Exhibit 19.2 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for Directors of the Registrant. The form of agreement is
incorporated by reference to Exhibit 10.27 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989. Filed herewith is a schedule listing the names of the
individuals with whom the agreement has been executed and the date of execution.
*10.20 Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by reference
to Exhibit 10.28 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1989.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
<FN>
- ------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14(c) of Form 10-K.
</TABLE>
(b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during the
fiscal quarter ending December 31, 1993.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
Date: March 22, 1994 By: _______/S/_M. KEITH WADDELL_______
M. Keith Waddell
Senior Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: March 22, 1994 By: /S/ HAROLD M. MESSMER, JR.
----------------------------------------
Harold M. Messmer, Jr.
Chairman of the Board, President, Chief
Executive Officer,
and a Director
(Principal Executive Officer)
Date: March 22, 1994 By: /S/ FREDERICK P. FURTH
----------------------------------------
Frederick P. Furth
Vice Chairman of the Board of Directors
Date: March 22, 1994 By: /S/ ANDREW S. BERWICK, JR.
----------------------------------------
Andrew S. Berwick, Jr., Director
Date: March 22, 1994 By: /S/ EDWARD W. GIBBONS
----------------------------------------
Edward W. Gibbons, Director
Date: March 22, 1994 By: /S/ TODD GOODWIN
----------------------------------------
Todd Goodwin, Director
Date: March , 1994 By:
----------------------------------------
Frederick A. Richman, Director
</TABLE>
22
<PAGE>
<TABLE>
<S> <C>
Date: March 22, 1994 By: /S/ THOMAS J. RYAN
----------------------------------------
Thomas J. Ryan, Director
Date: March 22, 1994 By: /S/ J. STEPHEN SCHAUB
----------------------------------------
J. Stephen Schaub, Director
Date: March 22, 1994 By: /S/ M. KEITH WADDELL
----------------------------------------
M. Keith Waddell
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
Date: March 22, 1994 By: /S/ BARBARA J. FORSBERG
----------------------------------------
Barbara J. Forsberg
Vice President and Controller
(Principal Accounting Officer)
</TABLE>
23
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and the Board of
Directors of Robert Half International Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Robert Half International Inc. and
subsidiaries included in this Form 10-K, and have issued our report thereon
dated January 28, 1994. Our audit was made for the purpose of forming an opinion
on the basic financial statements taken as a whole. The schedules listed in Item
14 are the responsibility of the Company's management and are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements. These schedules have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
San Francisco, California
January 28, 1994
S-1
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
CHARGED TO COSTS AND EXPENSES
-------------------------------------------
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Advertising costs................................ $ 9,993,000 $ 6,830,000 $ 6,780,000
Amortization of intangible assets................ $ 4,251,000 $ 3,961,000 $ 3,896,000
</TABLE>
S-2
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
BALANCE AT
BALANCE AT END OF PERIOD
BEGINNING --------------------------
NAME OF DEBTOR OF PERIOD ADDITIONS DEDUCTIONS CURRENT NON-CURRENT
- ------------------------------------------------------ ----------- ------------- ------------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
1993
Stephen and Pamela Saulten (1)...................... $ 94 $ 2 $ -- $ -- $ 96
1992
Stephen and Pamela Saulten (1)...................... $ 175 $ 8 $ 89 $ -- $ 94
1991
Stephen and Pamela Saulten (1)...................... $ 111 $ 64 $ -- $ -- $ 175
<FN>
- ------------------------
(1) This note carried an interest rate of 6% in 1993 and 1992, during 1991 the
interest rate was 9.55%.
</TABLE>
S-3
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
No. Exhibit Page
------- ------------------------------------ ----
3.1 Restated Certificate of Incorporation,
incorporated by reference to Exhibit 3.1
to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991.
3.2 By-Laws.
4.1 Indenture dated as of October 1, 1972,
as amended, between IDS Realty Trust
and First National Bank of Minneapolis,
incorporated by reference to Exhibits 6(t)
and 6(v) to the Form S-14 Registration
Statement of the Registrant (formerly
known as Boothe Interim Corporation)
filed with the Securities and Exchange
Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation
of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of
July 23, 1990, between the Registrant
and Manufacturers Hanover Trust Company
of California, incorporated by reference
to (i) Exhibit 1 to the Registrant's
Registration Statement on Form 8-A for
its Preferred Share Purchase Rights,
which Registration Statement was filed
with the Commission on July 30, 1990,
(ii) Exhibit 19.1 to the Registrant's
Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1990
and (iii) Exhibit 3 to Registrant's Form
8-A/A Amendment No. 2 filed on December
2, 1993.
10.1 Credit Agreement dated as of November 1, 1993,
among the Registrant, NationsBank of
North Carolina, N.A. and Bank of America
National Trust and Savings Association,
incorporated by reference to Exhibit 10
to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended
September 30, 1993.
<PAGE>
10.2 Reorganization and Distribution
Agreement between the Registrant
and BF Enterprises, Inc.,
incorporated by reference to Exhibit
10.9 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
10.3 Agreement of Assignment and
Assumption of Rights and Obligations
under the Indenture between the
Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit
10.10 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1987.
10.4 Assumption of Obligations and
Liabilities between the Registrant and
BF Enterprises, Inc., incorporated by
reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1987.
10.5 Pledge and Security Agreement
between the Registrant and BF
Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to
Registrant's Registration Statement on
Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the
Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit
10.11 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
*10.7 Employment Agreement dated as of October
2, 1985, between the Registrant and Harold M.
Messmer, Jr. The Eighth Amendment to such
agreement is filed with this Annual Report on
Form 10-K for the fiscal year ended December
31, 1993. The original agreement and the
first seven amendments thereto are
incorporated by reference to (i) Exhibit
10.(c) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December
31, 1985, (ii) Exhibit 10.2(b) to
Registrant's Registration Statement on Form
S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987,
(iv) Exhibit 10.2(d) to the Registrant's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, (v) Exhibit
<PAGE>
28.1 to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended March
31, 1990, (vi) Exhibit 10.8 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991 and
(vii) Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1993.
*10.8 Key Executive Retirement Plan -
Level II, incorporated by reference to
Exhibit 10.(f) to Registrant's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1985 and Exhibit 19.2
to Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June
30, 1991.
*10.9 Key Executive Retirement Plan -
Level II Agreement between the
Registrant and Harold M. Messmer, Jr.
The Sixth Amendment to such agreement is
filed with this Annual Report on form 10-
K for the fiscal year ended December 31,
1992. The original agreement and the
first five amendments thereto are
incorporated by reference to (i) Exhibit
10.5 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1988, (ii) Exhibit 19.3 to
Registrant's Quarterly Report on Form 10-
Q for the fiscal quarter ended June 30,
1991, (iii) Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1992, and (iv) Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-
Q for the fiscal quarter ended June 30,
1993.
*10.10 1985 Stock Option Plan, as amended,
incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1988.
*10.11 Non-Employee Directors' Option Plan,
incorporated by reference to Exhibit
10.(j) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1986.
*10.12 Outside Directors' Option Plan, incorporated
by reference to Exhibit 10.21 to the
<PAGE>
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989.
*10.13 1989 Restricted Stock Plan, as amended,
incorporated by reference to Exhibit 10.14 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992.
*10.14 StockPlus Plan, as amended, incorporated by
reference to Exhibit 10.15 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
*10.15 1993 Incentive Plan, as amended.
*10.16 Deferred Compensation Plan, incorporated by
reference to Exhibit 10.24 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989.
*10.17 Annual Performance Bonus Plan.
*10.18 Form of Severance Agreement, incorporated by
reference to (i) Exhibit 10.26 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989 and
(ii) Exhibit 19.2 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for
Directors of the Registrant. The form of
agreement is incorporated by reference to
Exhibit 10.27 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1989. Filed herewith is a
schedule listing the names of the individuals
with whom the agreement has been executed and
the date of execution.
*10.20 Form of Indemnification Agreement for
Executive Officers of Registrant,
incorporated by reference to Exhibit 10.28 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989.
11 Statement re computation of per
share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
_____
* Management contract or compensatory plan required
to be filed as an exhibit pursuant to Item 14(c)
of Form 10-K.
<PAGE>
EXHIBIT 3.2
BY-LAWS
-------
OF
--
ROBERT HALF INTERNATIONAL INC.
------------------------------
ARTICLE I
---------
OFFICES
-------
Section 1. REGISTERED OFFICE. The registered office of the Corporation
in the State of Delaware shall be at 1209 Orange Street, City of Wilmington,
County of New Castle.
Section 2. PRINCIPAL OFFICE FOR TRANSACTION OF BUSINESS. The principal
office for the transaction of the business of the Corporation shall be at 2884
Sand Hill Road, in the City of Menlo Park, County of San Mateo, State of
California. The Board of Directors may change said principal office from one
location to another within or without said City, County or State.
Section 3. OTHER OFFICES. The Corporation may have offices at such
other place or places, within or without the State of Delaware, as from time to
time the Board of Directors may determine or the business of the Corporation may
require.
ARTICLE II
----------
MEETING OF STOCKHOLDERS
-----------------------
Section 1. PLACE OF MEETINGS. Meetings of the stockholders shall be
held at such place either within or without the State of Delaware as shall be
fixed by the Board of Directors and stated in the notice or waiver of notice of
the meeting.
Section 2. ANNUAL MEETING. The annual meeting of stockholders for the
election of directors and for the transaction of such other business as may come
before the meeting shall be held on such date in each year as the Chairman of
the Board shall designate. The Board of Directors shall present at each annual
meeting a full and clear statement of the business and condition of the
Corporation.
Section 3. SPECIAL MEETINGS. A special meeting of the stockholders for
any purpose or purposes, unless
<PAGE>
otherwise prescribed by statute, may be called at any time by the Chairman of
the Board, or the President or by order of the Board of Directors.
Section 4. NOTICE OF MEETINGS. Except as otherwise provided by law or
the Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting, directed to his
address as it appears upon the books of the corporation, said notice to specify
the place, date and hour and purpose or purposes of the meeting. When a meeting
is adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken unless the adjournment is for more than thirty days, or
unless after the adjournment a new record date is fixed for the adjourned
meeting, in which event a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. Notice of the time, place
and purpose of any meeting of stockholders may be waived in writing, either
before or after such meeting, and will be waived by any stockholder by his
attendance thereat in person or by proxy. Any stockholder so waiving notice of
such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given.
Section 5. QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 6. VOTING. Except as otherwise provided in the Certificate of
Incorporation, each stockholder of voting common stock shall, at each meeting of
the stockholders, be entitled to one vote in person or by proxy for each share
of stock of the Corporation held by him on the date fixed pursuant to the
provisions of Section 3 of Article IX of the By-Laws as the record date and
registered in his name on the books of the Corporation for the determination of
stockholders who shall be entitled to notice and to vote at such meeting. Any
vote of stock of the Corporation may be
<PAGE>
given at any meeting of the stockholders by the stockholder entitled thereto in
person or by proxy but no proxy shall be voted three years after its date,
unless said proxy shall provide for a longer period. At all meetings of the
stockholders all matters including election of directors, except where other
provision is made by law, by the Certificate of Incorporation or by these
By-Laws, shall be decided by the vote of a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present. Unless demanded by a stockholder of the Corporation
present in person or by proxy at any meeting of the stockholders and entitled to
vote thereat or so directed by the chairman of the meeting, the vote thereat on
any question or matter, including the election of directors, need not be by
ballot. Upon a demand of any such stockholder for a vote by ballot on any
question or at the direction of such chairman that a vote by ballot be taken on
any question, such vote shall be taken. On a vote by ballot each ballot shall
be signed by the stockholder voting, or by his proxy, and shall state the number
of shares voted. No holder of Preferred Stock shall be entitled to vote at any
meeting of the stockholders, except as provided by law, by the Certificate of
Incorporation or by the Certificate of Determination of Preferences creating
such Preferred Stock.
Section 7. LIST OF STOCKHOLDERS. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at said meeting, arranged in alphabetical order, showing the address of and
the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least ten days
prior to the meeting, either at a place within the city where the meeting is to
be held and which place shall be specified in the notice of the meeting, or, if
not specified, at the place where said meeting is to be held, and the list shall
be produced and kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 8. INSPECTORS OF VOTES. At each meeting of the stockholders
the chairman of such meeting may appoint one or three Inspectors of Votes to act
thereat. Each Inspector of Votes so appointed shall first subscribe an oath or
affirmation faithfully to execute the duties of an Inspector of Votes at such
meeting with strict impartiality and according to the best of his ability. Such
Inspectors of Votes shall take charge of the ballots at such meeting and after
the balloting thereat on any question shall count the ballots cast thereon and
shall make a report in writing to the secretary of such meeting of the results
thereof. An
<PAGE>
Inspector of Votes need not be a stockholder of the Corporation, and any officer
of the Corporation may be an Inspector of Votes on any question other than a
vote for or against his election to any position with the Corporation or on any
other question in which he may be directly interested. If there are three
Inspectors of Votes, the determination, report or certificate of two such
Inspectors shall be as effective as if unanimously made by all Inspectors.
Section 9. ACTION WITHOUT MEETING. Unless otherwise provided in the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders of the Corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. GENERAL POWERS. The property, business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
Section 2. NUMBER, QUALIFICATION AND TERM OF OFFICE.
(a) The number of directors which shall constitute the whole Board shall
not be less than six nor more than eleven. The number of directors shall be
fixed at such number, within the limits specified in the preceding sentence, as
determined from time to time by resolution of the Board of Directors, upon
approval by two-thirds (2/3) of the directors in office.
(b) At the 1994 Annual Meeting of Stockholders, the directors shall be
divided into three classes, as nearly equal in number as possible, with the term
of office of the first class to expire at the 1997 Annual Meeting of
Stockholders, the term of office of the second class to expire at the 1996
Annual Meeting of Stockholders and the term of office of the third class to
expire at the 1995 Annual Meeting of Stockholders. At each Annual Meeting of
Stockholders following such initial classification and
<PAGE>
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding Annual Meeting
of Stockholders after election.
(c) If the stockholders of the Company do not approve the continuing
classification of the Board of Directors at the 1999 Annual Meeting of
Stockholders, then Section 2(b) hereof shall be of no further force or effect
and, notwithstanding anything to the contrary in Section 2(b), the terms of all
directors shall expire at the 2000 Annual Meeting of Stockholders and all
directors elected at the 1999 Annual Meeting of Stockholders or any subsequent
meeting of stockholders shall hold office for a one-year term.
(d) Except as provided in Sections 4 and 5 to this Article III, each
director shall hold office until the end of his term and until his successor
shall be elected and qualified or until his death, resignation or removal.
Directors need not be stockholders. This Section 2 shall not be amended to
change the two-thirds (2/3) approval requirement set forth above except with the
approval of two-thirds (2/3) of the directors in office.
Section 3. RESIGNATIONS. Any director may resign at any time by giving
written notice of his resignation to the Corporation. Any such resignation
shall take effect at the time specified therein, or, if the time when it shall
become effective shall not be specified therein, then it shall take effect
immediately upon its receipt by the Secretary; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
Section 4. REMOVAL OF DIRECTORS. Any director may be removed, with cause,
at any time, by the affirmative vote of a majority in interest of the
stockholders of record of the Corporation entitled to vote, given at a special
meeting of the stockholders called for the purpose, and the vacancy in the Board
of Directors caused by any such removal may be filled by the stockholders at
such meeting or, if the stockholders shall fail to fill such vacancy, by the
Board of Directors as provided in Section 5 of this Article III. In no case will
a decrease in the number of directors shorten the term of any incumbent
director.
Section 5. VACANCIES. In case of any vacancy in the Board of Directors
caused by death, resignation, disqualification, removal, an increase in the
number of directors, or any other cause, the successor to fill the vacancy may
be elected by the holders of shares of stock entitled to vote at an annual
meeting of said holders or by two-thirds (2/3) of the directors in office,
though less
<PAGE>
than a quorum, and each director so elected shall hold office for a term
expiring at the Annual Meeting of Stockholders at which the term of the class to
which he was elected expires and until his successor shall be duly elected and
qualified, or until his death or until he shall resign or until he shall have
been removed. Additional directorships resulting from an increase in the number
of directors shall be apportioned among the three classes as equally as
possible. This section shall not be amended to change the requirement of a vote
of two-thirds (2/3) of the directors set forth above except upon the approval of
two-thirds (2/3) of the directors in office.
Section 6. PLACE OF MEETING. The Board of Directors may hold its
meetings at such place or places within or without the State of Delaware as the
Board of Directors may from time to time determine.
Section 7. ORGANIZATION MEETING. The Board of Directors shall meet
immediately following the annual meeting of stockholders and at the place where
the stockholders' meeting was held, for the purpose of electing officers and
transacting such other business as may lawfully come before it. No notice of
such meeting shall be required.
Section 8. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such times as the Board of Directors shall from time
to time by resolution determine. If any day fixed for a regular meeting shall
be a legal holiday, then the meeting which would otherwise be held on that day
shall be held at the same hour on the next succeeding business day. Except as
otherwise provided by law, notices of regular meetings need not be given.
Section 9. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held when called by the Chairman of the Board, the Chairman
of the Executive Committee, the President, the Secretary, Assistant Secretary or
a majority of the Directors.
Section 10. NOTICE OF MEETINGS. Notice of the time and place of all
special meetings of the Board of Directors or any committee thereof, and of any
regular meeting as to which notice is given, shall be given to each director
either by telephone or by written notice delivered personally to each director
or sent to each director by mail or by other form of written communication at
least one day before the date of the meeting. Notice of any meeting may be
waived in writing at any time before or after the meeting and will be waived by
any director by attendance at such meeting.
<PAGE>
Section 11. QUORUM AND MANNER OF ACTING. Except as otherwise provided
by statute or by these By-Laws, a majority of the total number of directors (but
not less than two) shall be required to constitute a quorum for the transaction
of business at any meeting, and the act of a majority of the directors present
at any meeting at which a quorum shall be present shall be the act of the Board
of Directors. In the absence of a quorum, a majority of the directors present
may adjourn any meeting from time to time until a quorum be had. Notice of any
adjourned meeting need not be given.
Section 12. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or by these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof, may be taken without a meeting, if all members of the Board
or of such committee, as the case may be, consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board or
Committee.
Section 13. MEETING BY TELEPHONE. Unless otherwise restricted by the
Certificate of Incorporation or these By- Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 14. COMPENSATION. The Board of Directors may at any time or
from time to time by resolution provide that a specified sum shall be paid to
any director of the Corporation, either as his annual compensation as such
director or member of any committee of the Board of Directors or as compensation
for his attendance at each meeting of the Board of Directors or any such
committee. The Board of Directors may also likewise provide that the Corporation
shall reimburse each director for any expense paid by him on account of his
attendance at any meeting. Nothing in this Section shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
ARTICLE IV
----------
EXECUTIVE COMMITTEE
-------------------
Section 1. APPOINTMENT. The Board of Directors may by resolution
passed by a majority of the whole Board, appoint an Executive Committee of not
less than three
<PAGE>
members, all of whom shall be directors. The Chairman of the Executive
Committee shall be elected by the Board of Directors.
Section 2. POWERS. The Executive Committee shall have and may
exercise, when the Board is not in session, the power of the Board of Directors
in the management of the business and affairs of the Corporation; but neither
the Executive Committee nor any other committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation, nor
shall it have the power or authority to declare a dividend, to authorize the
issuance of stock or to fill vacancies in the Board of Directors or the
Executive Committee.
Section 3. TERM. The term of the Executive Committee shall be
coexistent with that of the Board of Directors which shall have appointed such
Committee. The Board may at any time for any reason remove any individual
member of the Executive Committee and the Board may fill a Committee vacancy
created by death, resignation or removal or increase in the number of members of
the Executive Committee. The Board of Directors may designate one or more
directors as alternate members of the Executive Committee who may replace any
absent or disqualified member at any meeting of the Committee.
Section 4. MEETINGS. Regular meetings of the Executive Committee, of
which no notice shall be required, may be held on such days and at such places
as shall be fixed by resolution adopted by a majority of the Committee and
communicated to all of its members. Special meetings of the Executive Committee
shall be held whenever called by the Chairman of the Executive Committee, the
Chairman of the Board, the President, the Vice President, or a majority of the
members of the Executive Committee then in office and shall be held at such time
and place as shall be designated in the notice of the meeting.
Section 5. QUORUM AND MANNER OF ACTION. A majority of the Executive
Committee shall constitute a quorum for the transaction of business and the act
of a majority of those present at a meeting thereof at which a quorum is present
shall be the act of the Committee.
ARTICLE V
---------
<PAGE>
OTHER COMMITTEES
----------------
Section 1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors
may, by resolution passed by a majority of the whole Board, from time to time
appoint other committees of the Board of Directors. Each such committee, to the
extent permitted by law and these By-Laws, shall have and may exercise such of
the powers of the Board of Directors in the management and affairs of the
Corporation as may be prescribed by the resolution creating such committee. A
majority of all of the members of any such committee may determine its action
and fix the time and place of its meetings and specify what notice thereof, if
any, shall be given, unless the Board of Directors shall otherwise prescribe.
The Board of Directors shall have power to change the members of any such
committee at any time, to fill vacancies and to discontinue any such committee
at any time.
Section 2. NON-BOARD COMMITTEES. The authority conferred upon the
Board of Directors by Section 1 of this Article V to appoint committees of the
Board of Directors shall not be deemed to preclude the appointment by either the
Board of Directors or the Executive Committee of committees whose members need
not be directors of the Corporation provided that such committees may not
exercise any of the powers of the Board of Directors.
<PAGE>
ARTICLE VI
----------
OFFICERS
--------
Section 1. NUMBER. The officers of the Corporation shall be the
Chairman of the Board, the Vice Chairman of the Board, the Chairman of the
Executive Committee, the President, one or more Vice Presidents, a Secretary and
a Treasurer. The Board of Directors may also appoint one or more Assistant Vice
Presidents, Assistant Secretaries or Assistant Treasurers and such other
officers and agents with such powers and duties as it shall deem necessary.
Assistant Vice Presidents may also be appointed by the Chairman of the Board.
Any of the Vice Presidents may be given such specific designation as may be
determined from time to time by the Board of Directors. Any two or more offices
except those of President and Secretary may be held by the same person.
Section 2. ELECTION AND TERM OF OFFICE. The officers shall be elected
annually by the Board of Directors at its organization meeting following the
annual meeting of the stockholders and each shall hold office until the next
annual election of officers and until his successor is elected and qualified, or
until his death, resignation or removal. Any officer may be removed at any
time, with or without cause, by a vote of the majority of the whole Board. Any
vacancy occurring in any office may be filled by the Board of Directors.
Section 3. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD.
(a) The Chairman of the Board shall exercise such powers and perform such
duties as may be assigned to him by these By-Laws or by the Board of Directors.
The Chairman of the Board shall preside at meetings of the stockholders and
Board of Directors and, in the absence of the Chairman of the Executive
Committee, shall preside at meetings of the Executive Committee. He shall be ex
officio a member of all standing committees of the Board other than any standing
audit committee or compensation committee.
(b) The Vice Chairman of the Board, in the absence of the Chairman of the
Board, shall preside at meetings of the stockholders and Board of Directors. He
shall exercise such other powers and perform such other duties as may be
assigned to him by these By-Laws or by the Board of Directors.
Section 4. CHAIRMAN OF THE EXECUTIVE COMMITTEE. The Chairman of the
Executive Committee shall preside at all meetings of the Executive Committee
and, in the absence of the Chairman of the Board and the Vice Chairman of the
Board, shall preside at meetings of the Board of Directors.
<PAGE>
The Chairman of the Executive Committee shall perform such other duties and may
exercise such other powers as from time to time may be assigned to him by these
By-Laws or by the Board of Directors.
Section 5. PRESIDENT. The President, subject to the general control of
the Board of Directors, shall be the chief executive officer of the Corporation
and, as such, shall be responsible for the management and direction of the
affairs of the Corporation, its officers, employees and agents and shall
supervise generally the affairs of the Corporation. He shall exercise such
other powers and perform such other duties as may be assigned to him by these
By-Laws or by the Board of Directors. In the absence of the Chairman of the
Board and the Vice Chairman of the Board, he shall preside at meetings of the
stockholders and, in the absence of the Chairman of the Board, the Vice Chairman
of the Board and the Chairman of the Executive Committee, he shall preside at
meetings of the Board of Directors and the Executive Committee. He shall be ex
officio a member of all standing committees of the Board other than any standing
audit committee or compensation committee.
Section 6. VICE PRESIDENTS. In the absence of the Chairman of the
Board and the President, the Vice President designated by the Board of Directors
shall have all of the powers and duties conferred upon the President. Except
where by law the signature of the Chairman of the Board or the President is
required, each of the Vice Presidents shall have the same power as the Chairman
of the Board or the President to sign certificates, contracts and other
instruments of the Corporation. Any Vice President shall perform such other
duties and may exercise such other powers as may from time to time be assigned
to him by these By-Laws, the Board of Directors, the Chairman of the Board or
the President.
Section 7. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
record or cause to be recorded in books provided for the purpose the minutes of
the meetings of the stockholders, the Board of Directors, the Executive
Committee and all other committees of the Board of Directors, if any; shall see
that all notices are duly given in accordance with the provisions of these
By-Laws and as required by law; shall be custodian of all corporate records
(other than financial) and of the seal of the Corporation and see that the seal
is affixed to all documents, the execution of which on behalf of the Corporation
under its seal is duly authorized in accordance with the provisions of these
By-Laws; shall keep the list of stockholders which shall include the post office
address of each stockholder and make all proper changes therein, retaining and
filing his authority for all such entries; shall see that the books, reports,
statements, certificates and all other
<PAGE>
documents and records required by law are properly kept and filed, and, in
general, shall perform all duties incident to the office of Secretary and such
other duties as may, from time to time, be assigned to him by the Board of
Directors, the Chairman of the Board or the President. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary shall
perform any of the duties of the Secretary and, when so acting, shall have all
the powers and be subject to all the restrictions upon, the Secretary. Except
where by law the signature of the Secretary is required, each of the Assistant
Secretaries shall possess the same power as the Secretary to sign certificates,
contracts, obligations and other instruments of the Corporation, and to affix
the seal of the Corporation to such instruments, and attest the same.
Section 8. TREASURER AND ASSISTANT TREASURER. The Treasurer shall keep
or cause to be kept the books of account of the Corporation and shall render
statements of the financial affairs of the Corporation in such form and as often
as required by the Board of Directors, the Chairman of the Board or the
President. The Treasurer, subject to the order of the Board of Directors, shall
have the custody of all funds and securities of the Corporation. The Treasurer
shall perform all other duties commonly incident to his office and shall perform
such other duties and have such other powers as the Board of Directors, the
Chairman of the Board or the President shall designate from time to time. At the
request of the Treasurer, or in his absence or disability, the Assistant
Treasurer or, in case there shall be more than one Assistant Treasurer, the
Assistant Treasurer designated by the Board of Directors, the Chairman of the
Board, the President or the Treasurer, may perform any of the duties of the
Treasurer and, when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the Treasurer. Except where by law the signature of
the Treasurer is required, each of the Assistant Treasurers shall possess the
same power as the Treasurer to sign all certificates, contracts, obligations and
other instruments of the Corporation.
Section 9. ASSISTANT VICE PRESIDENTS. The Assistant Vice Presidents shall
perform such duties as shall be determined by the Board of Directors, the
Chairman of the Board or the President of the Corporation.
ARTICLE VII
-----------
EXECUTION OF INSTRUMENTS
------------------------
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or persons, to
execute any
<PAGE>
corporate instrument or document or to sign the corporate name without
limitation, except where otherwise provided by law or in these By-Laws, and such
designation may be general or confined to specific instances.
ARTICLE VIII
------------
VOTING OF SECURITIES OWNED BY THE CORPORATION
---------------------------------------------
All stock and other securities of other corporations held by the
Corporation shall be voted, and all proxies with respect thereto shall be
executed, by the person authorized so to do by resolution of the Board of
Directors, or, in the absence of such authorization, by the Chairman of the
Board, the Chairman of the Executive Committee, the President or any Vice
President.
ARTICLE IX
----------
SHARES OF STOCK
---------------
Section 1. FORM AND EXECUTION OF CERTIFICATES. The certificates of
stock of the Corporation shall be numbered and shall be entered in the books of
the Corporation as they are issued. They shall exhibit the holder's name and
number of shares and shall be signed by the Chairman of the Board, the President
or any Vice President and the Secretary or an Assistant Secretary. Any or all
of the signatures on such certificate may be a facsimile. In case any officer
of the Corporation who shall have signed, or whose facsimile signature shall
have been placed upon, such certificate shall cease to be such officer before
such certificate shall have been issued, such certificate may nevertheless be
issued by the Corporation with the same effect as though such person were such
officer at the date of issuance.
Section 2. TRANSFER. Transfer of stock shall be made on the books of
the Corporation only by the person named in the certificate or by attorney
lawfully constituted in writing, and upon surrender of the certificate.
Section 3. FIXING RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholder or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such
<PAGE>
meeting, nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
Section 4. RECORD OWNER. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and accordingly shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person, whether or
not it shall have express or other notice thereof, save as expressly provided by
the laws of Delaware.
Section 5. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
ARTICLE X
---------
DIVIDENDS
---------
Subject to the provisions of law and of the Certificate of Incorporation,
the Board of Directors, at any regular or special meeting, may declare and pay
dividends upon the shares of its stock either (a) out of its surplus as defined
in and computed in accordance with the provisions of law or (b) in case it shall
not have any such surplus, out of its net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, whenever and in such
amount as, in the opinion of the Board of Directors, the condition of the
affairs of the Corporation shall render advisable.
Before payment of any dividend or making any distribution of profits, there
may be set aside out of the surplus or net profits of the Corporation such sum
or sums as the directors may from time to time, in their absolute
<PAGE>
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the directors shall think conducive to
the interests of the Corporation.
ARTICLE XI
----------
CORPORATE SEAL
--------------
The corporate seal shall consist of a die bearing the name of the
Corporation and the inscription "Corporate Seal -- Delaware." Said seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE XII
-----------
AMENDMENTS
----------
All By-Laws of the Corporation shall be subject to alterations or repeal,
and new By-Laws may be made, by the stockholders at any annual or special
meeting, or except as otherwise provided by these By-Laws or by law, by the
affirmative vote of a majority of the directors then in office given at any
regular or special meeting of the Board of Directors.
<PAGE>
EXHIBIT 10.7
EIGHTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Eighth Amendment to Employment Agreement is made and entered into as
of December 23, 1993, by and between Robert Half International Inc. (formerly
Boothe Financial Corporation), a Delaware corporation, ("Corporation") and
Harold M. Messmer, Jr. ("Officer").
The Employment Agreement dated as of October 2, 1985, as amended, between
Corporation and Officer (the "Employment Agreement") is hereby amended as
follows:
1. The first sentence of Section 3.6 of the Employment Agreement is
amended, effective as of the date hereof, by inserting "subsequent to January 1,
1996" after "Upon the written request of Officer" and before ", but".
2. Amendment No. 7 to the Employment Agreement is hereby rescinded,
effective June 1, 1993.
3. Effective June 1, 1993, Section 3.1 of the Employment Agreement is
amended by deleting "$345,000" in both places that such amount occurs and
replacing such amount with "$362,000".
4. Effective January 1, 1994, Section 3.1 of the Employment Agreement is
amended by deleting "$362,000" in both places that such amount occurs and
replacing such amount with "$364,900".
5. The parties hereto acknowledge that the effect of Sections 2, 3, and 4
hereof is to cause Officer's base salary, pursuant to the Employment Agreement,
to increase by no more than the Consumer Price Index from calendar 1992 to
calendar 1993 and from calendar 1993 to calendar 1994.
6. In all other respects, the Employment Agreement is hereby ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
day and year first written above.
ROBERT HALF INTERNATIONAL INC.
By /s/M. KEITH WADDELL
---------------------------
M. Keith Waddell
Senior Vice President
/s/HAROLD M. MESSMER, JR.
---------------------------
Harold M. Messmer, Jr.
<PAGE>
EXHIBIT 10.9
SIXTH AMENDMENT TO RETIREMENT AGREEMENT
This Sixth Amendment to the Key Executive Retirement Plan - Level II
Agreement dated November 14, 1985 (the "Retirement Agreement") between Robert
Half International Inc. (formerly Boothe Financial Corporation), a Delaware
corporation, ("Corporation") and Harold M. Messmer, Jr. ("Messmer") is entered
into as of December 23, 1993.
1. Section 1 of the Fifth Amendment to the Retirement Agreement is hereby
rescinded.
2. In all other respects, the Retirement Agreement is ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on
December 23, 1993.
ROBERT HALF INTERNATIONAL INC.
By /s/M. KEITH WADDELL
-----------------------------
M. Keith Waddell
Senior Vice President
and Chief Financial
Officer
/s/HAROLD M. MESSMER, JR.
-----------------------------
Harold M. Messmer, Jr.
<PAGE>
EXHIBIT 10.15
ROBERT HALF INTERNATIONAL INC.
1993 INCENTIVE PLAN
1. PURPOSES. The principal purposes of the Robert Half
International Inc. 1993 Incentive Plan (the "Plan") are: (a) to improve
individual employee performance by providing long-term incentives and rewards to
key employees of the Company, (b) to assist the Company in attracting, retaining
and motivating key employees with experience and ability, and (c) to align the
interests of such employees with those of the Company's stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "Administrator" means a committee of the Board of Directors of
the Company, the composition and the size of which shall cause such
Administrator to be "disinterested" within the meaning of the General Rules and
Regulations promulgated pursuant to Section 16 of the Exchange Act. Unless
otherwise determined by the Board of Directors, the Administrator shall be the
Compensation Committee of the Board of Directors.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the following:
(i) A Schedule 13D or 13G is filed pursuant to the Exchange Act
indicating that any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act) has become the holder of more than forty percent
(40%) of the outstanding Voting Shares. For purposes of calculating the
percentage of Voting Shares, such person or group, but no other person or group,
shall be deemed the owner of any Voting Shares which such person or group may
acquire upon conversion of securities or upon the exercise of options, warrants
or rights.
(ii) As a result of or in connection with any cash tender offer,
merger, or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the Company just
prior to such event shall cease within one year to constitute a majority of the
Board.
(iii) The Company's stockholders approve a definitive agreement
providing for a transaction in which
<PAGE>
the Company will cease to be an independent publicly-owned corporation.
(iv) The stockholders of the Company approve a definitive
agreement (i) to merge or consolidate the Company with or into another
corporation in which the holders of the Stock immediately before such merger or
reorganization will not, immediately following such merger or reorganization,
hold as a group on a fully-diluted basis both the ability to elect at least a
majority of the directors of the surviving corporation and at least a majority
in value of the surviving corporation's outstanding equity securities, or (ii)
to sell or otherwise dispose of all or substantially all of the assets of the
Company.
(v) An Offer is made by a person or group (as such terms are
defined in Section 13(d)(3) of the Exchange Act) and such Offer has resulted in
such person or group holding an aggregate of forty percent (40%) or more of the
outstanding Voting Shares. For purposes of this Section 1(c)(v), Voting Shares
held by such person or group shall be calculated in accordance with the last
sentence of Section 1(c)(i) hereof.
(d) "Common Stock" or "Stock" means Robert Half International Inc.
Common Stock, par value $1.00 per share.
(e) "Company" means Robert Half International Inc., its divisions and
direct and indirect subsidiaries.
(f) "Continuous Employment" means employment with the Company or any
Subsidiary without any termination or leave of absence, except for a leave of
absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
(g) "Disability" or "Disabled" shall mean (i) a physical or mental
condition which, in the judgment of the Administrator based on competent medical
evidence satisfactory to the Administrator (including, if required by the
Administrator, medical evidence obtained by an examination conducted by a
physician selected by the Administrator), renders Holder unable to engage in any
substantial gainful activity for the Company and which condition is likely to
result in death or to be of long, continued and indefinite duration, or (ii) a
judicial declaration of incompetence.
(h) "Eligible Employee" means an employee of the Company or any
Subsidiary (including an employee who is a director and/or officer) who, as
determined by the Administrator in its sole discretion, has and exercises
management functions and responsibilities.
<PAGE>
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means the closing sales price on the New York
Stock Exchange or the NASDAQ National Market System, as the case may be, on the
date the value is to be determined as reported in THE WALL STREET JOURNAL
(Western Edition). If there are no trades on such date, the closing price on
the latest preceding business day upon which trades occurred shall be the Fair
Market Value. If the Stock is not listed in the New York Stock Exchange or
quoted on the NASDAQ National Market System, the Fair Market Value shall be
determined in good faith by the Administrator.
(k) "Grant" shall mean an Option or a Restricted Stock Award.
(l) "Grant Date" means the date a Grant is made under the Plan.
(m) "Holder" means the recipient of a Grant pursuant to this Plan.
(n) "Issue Date" means the date on which shares of Stock subject to a
Restricted Stock Award are issued or transferred by the Company to the account
of an Eligible Employee who has received such grant.
(o) "Minimum Withholding Taxes" means any applicable federal, state
and local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject to a
Restricted Stock Award, (ii) the exercise of an Option, or (iii) the making of
an election under Section 83(b) of the Internal Revenue Code with respect to a
Restricted Stock Award.
(p) "Offer" means a tender offer or an exchange offer for the
Company's Stock.
(q) "Option" or "Stock Option" means a right granted under the Plan
to a Holder to purchase shares of Common Stock at a fixed price for a specified
period of time.
(r) "Option Price" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(s) "Optionee" means an Eligible Employee who has received a Stock
Option granted under the Plan.
<PAGE>
(t) "Restricted Stock Award" means a grant described in Section 6 of
the Plan.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Subsidiary" means a "subsidiary" corporation as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended.
(w) "Vested" means that portion of a Grant with respect to which the
Vesting Date has arrived or passed.
(x) "Vesting Date" means the date specified in Section 5 or 6 hereof,
as the case may be, or such other date as shall be established by the
Administrator or otherwise on the Grant Date or thereafter.
(y) "Voting Shares" means the outstanding shares of the Company
entitled to vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which Grants
may be made during any calendar year shall be that number which is equal to 1.5%
of the number of issued and outstanding shares of Common Stock of the Company
(excluding treasury shares) as of January 1 of such year (January 1, 1993, in
the case of the first year). Any shares of Common Stock covered by Options
which have terminated or expired prior to exercise or have been cancelled
without value shall not be counted against the annual limit and shall be
available for further grants hereunder and shares constituting the portion of a
Restricted Stock Award that is forfeited before any dividends are paid upon such
forfeited shares shall not be counted against the annual limit and shall be
available for further grants hereunder. The foregoing number of shares
available for Grants shall be subject to any adjustments which may be made
pursuant to Section 12 hereof. Shares of Stock used for Options may be either
shares of authorized but unissued Common Stock or treasury shares or both.
Shares of Stock used for Restricted Stock Awards shall be treasury shares to the
extent that treasury shares are available, and, if no treasury shares are
available, Restricted Stock Awards shall be authorized but unissued Common
Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in its
sole discretion, but subject to all of the provisions of the Plan, determine
which Eligible Employees will be given Grants under the Plan, the number of
Options or shares of Restricted Stock to be granted to each such Eligible
Employee and the terms, conditions and restrictions of each such Grant. In
making such
<PAGE>
determinations, the Administrator shall take into account the nature of services
rendered and to be rendered by the respective recipients, their present and
potential contribution to the Company's success and such other factors as the
Administrator in its discretion deems relevant to the accomplishment of the
purposes of the Plan. In any year, the Administrator may approve Options to
Eligible Employees subject to differing terms and conditions and Restricted
Stock Awards to Eligible Employees subject to differing terms and conditions.
During any calendar year, the number of shares of Stock with respect to which
Options are granted to any one individual may not exceed 75% of the number of
shares of Stock available for Grants during 1994.
5. OPTIONS. Each Option granted hereunder shall be in writing and
shall contain such terms and conditions as the Administrator may determine,
subject to the following:
(a) PRICE. The Option Price shall be not less than 85% of the Fair
Market Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE. Options granted hereunder shall have a term
of no longer than ten years from the Grant Date. An Option may be exercised
only as to those portions of the Option that have Vested. Stock Options must be
exercised for full shares of Common Stock.
(c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be
deemed an Incentive Stock Option (as such term is defined in the Internal
Revenue Code) unless (a) such Option is designated as an Incentive Stock Option
at the time of grant by the Administrator and (b) such Option otherwise meets
the requirements for Incentive Stock Options specified in the Internal Revenue
Code. However, no Option designated as an Incentive Stock Option shall contain
any restrictions upon the ability of the Holder to dispose of Stock acquired
upon the exercise thereof other than as provided elsewhere in this Plan. During
the life of the Plan, the total number of shares for which Incentive Stock
Options may be granted may not exceed ten times the number of shares available
for Grants under the Plan during the first calendar year in which the Plan is in
effect.
(d) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Option shall Vest as to twenty-five percent (25%) of the Stock
covered by such Option on each of the first through fourth anniversaries of the
Grant Date. Notwithstanding the foregoing, the Administrator may accelerate
Vesting, in whole or in part, under such terms and conditions as the
Administrator deems appropriate.
<PAGE>
(e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give
written notice of exercise to the Company, specifying the number of shares of
Common Stock to be purchased and identifying the specific Options that are being
exercised. From time to time the Administrator may establish procedures
relating to such exercises. An Option is exercisable during a Holder's lifetime
only by the Holder or, with respect to options that are not designated as
Incentive Stock Options, under such other circumstances as may be permitted by
Rule 16b-3, or any successor rule, under the Exchange Act and all
interpretations of the staff of the Securities and Exchange Commission
thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash, check
or delivery of shares of Common Stock that have been owned by Holder for at
least six months. If all or a portion of the purchase price is paid by delivery
of shares, the shares shall be valued at the Fair Market Value of such shares on
the date of exercise. In addition, the Administrator may, in its discretion,
authorize payment of the Option Price and of Minimum Withholding Taxes by (i)
full recourse promissory note (secured or unsecured), payable on such terms and
bearing such interest as the Administrator may determine or (ii) delivery (on a
form acceptable to the Administrator) of an irrevocable direction to a
securities broker to sell shares of Common Stock and to deliver part of the
sales proceeds to the Company in payment of the full exercise price and Minimum
Withholding Taxes and receipt of written confirmation from the securities broker
of receipt of such irrevocable direction, the number of shares sold, the price
at which sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable
except by will, by the laws of descent and distribution, or, with respect to
options that are not designated as Incentive Stock Options, pursuant to a
qualified domestic relations order or under such other circumstances as may be
permitted by Rule 16b-3, or any successor rule, under the Exchange Act and all
interpretations of the staff of the Securities and Exchange Commission
thereunder.
(h) DISPOSITION OF ACQUIRED STOCK. No share of Stock acquired upon
the exercise of an Option may be sold, assigned, pledged, transferred or
otherwise conveyed in any manner until six months after the Grant Date for such
Option.
6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under
the Plan shall contain the following terms, conditions and restrictions and such
additional
<PAGE>
terms, conditions and restrictions as may be determined by the Administrator at
the time of grant.
(a) RIGHTS WITH RESPECT TO SHARES OF STOCK. Upon written acceptance
by the Eligible Employee of restrictions and other terms and conditions
described in the Plan and in the instrument evidencing such Restricted Stock
Award, the Eligible Employee shall be a Holder, and the Company shall cause to
be issued or transferred to the name of the Holder a certificate or certificates
for the number of shares of Stock granted. From and after the Issue Date, the
Holder shall have absolute ownership of such shares of Stock, including the
right to vote and to receive dividends thereon, subject to the terms, conditions
and restrictions described in the Plan and in the instrument evidencing the
grant of such Restricted Stock Award.
(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock
Award may not be sold, assigned, pledged, transferred or otherwise conveyed in
any manner until the later of (i) the Vesting Date for such shares and (ii) six
months after the Grant Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Restricted Stock Award shall Vest as to twenty-five percent
(25%) of the Stock covered by such grant on each of the first through fourth
Vesting Dates which occur following the related Grant Date of such Restricted
Stock Award. Notwithstanding the foregoing, the Administrator may accelerate
the lapsing of restrictions on a Restricted Stock Award, in whole or in part
under such terms and conditions as the Administrator deems appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions
herein to the contrary notwithstanding, a Restricted Stock Award shall
automatically become Vested upon (a) the Death or Disability of the Holder or
(b) the occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder
granted a Restricted Stock Award shall represent in writing that such Holder
acknowledges that, with respect to each Restricted Stock Award held by such
Holder, (i) Minimum Withholding Taxes shall be due with respect to shares of
Stock covered by such award, (ii) payment of Minimum Withholding Taxes to the
Company is the responsibility of Holder and (iii) payment of such Minimum
Withholding Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any
Holder properly elects within thirty (30) days of the Grant Date to include in
gross income for
<PAGE>
federal income tax purposes an amount equal to the fair market value of the
shares of Stock on the Grant Date, such Holder shall pay in cash to the Company
in the calendar month of such Grant Date, or make arrangements satisfactory to
the Administrator to pay to the Company, any Minimum Withholding Taxes required
to be withheld with respect to such shares.
(g) CONSIDERATION. Recipients of Restricted Stock Awards made in
treasury shares shall not be required to pay any consideration to the Company.
Recipients of Restricted Stock Awards made in the form of previously unissued
shares shall be required to pay such minimum consideration, if any, as may be
required by applicable law. The Administrator shall determine the form of
consideration at the time of the award, which may include services rendered
prior to the award.
7. WITHHOLDING TAXES. In order to enable the Company to meet any
applicable foreign, federal (including FICA), state and local withholding tax
requirements, a Holder shall be required to pay the Minimum Withholding Taxes.
No share of stock will be delivered to any Holder until Minimum Withholding
Taxes have been paid. At the option of the Holder, withholding taxes may be
paid by reduction in the number of shares deliverable to Holder (in the case of
an Option) or by surrendering a portion of the Restricted Stock Award to the
Company (in either case "Share Reduction"); provided, however, that Share
Reduction may not be used within six months of the Grant Date. If withholding
taxes are paid by Share Reduction, such shares shall be valued at the Fair
Market Value as of the date of exercise or vesting. A Holder may elect to have
additional shares withheld above the amount required to satisfy Minimum
Withholding Taxes. However, total Share Reduction may not exceed the total
taxes that Holder will have to pay (assuming Federal and state taxes are imposed
at his marginal rate) by reason of the exercise or vesting. In the event that
Minimum Withholding Taxes are not paid by Holder, to the extent permitted by law
the Company shall have the right, but not the obligation, to cause such
withholding taxes to be satisfied by Share Reduction or by offsetting such
withholding taxes against amounts otherwise due from the Company to the Holder.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as
any restrictions or obligations imposed pursuant hereto shall apply to a share
of Stock (including, but not limited to, the restrictions or obligations imposed
pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each
certificate evidencing such share shall bear an appropriate legend referring to
the terms, conditions and restrictions. In addition, the Company may instruct
its transfer agent that shares of Stock evidenced by such
<PAGE>
certificates may not be transferred without the written consent of the Company.
Any attempt to dispose of such shares of Stock in contravention of such terms,
conditions and restrictions shall be invalid. Certificates representing shares
that have not Vested or with respect to which Minimum Withholding Taxes have not
been paid will be held in custody by the Company or such bank or other
institution designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous
Employment with the Company or any Subsidiary shall terminate for any reason,
then, with respect to any portion of a Grant that has not Vested prior to or
concurrently with such termination (a) in the case of an Option, all rights to
such portion that has not Vested shall terminate and (b) in the case of a
Restricted Stock Award, all rights to the shares covered by any portion thereof
that has not Vested shall be forfeited; provided, however, that the
Administrator, in its sole discretion within ninety (90) days of such
termination of Continuous Employment, may notify the Holder in writing that the
Holder's rights in such portion that has not Vested will not terminate or be
forfeited and that the Holder shall continue to be the owner thereof, subject to
such continuing restrictions as the Administrator may prescribe in such notice.
Options then held by the Holder which are Vested at the date of termination
shall continue to be exercisable by the Holder, or, if applicable, Holder's
estate, until the earlier of 90 days after such date or the expiration of such
Options in accordance with their terms. Notwithstanding the foregoing, (i) the
Administrator may in its sole discretion extend the period during which an
Option may be exercised following termination of employment at any time,
provided that any such extension does not exceed the Option's normal termination
date, and (ii) if exercise of an Option during the 90-day period described in
the previous sentence would subject the Holder to liability under Section 16 of
the Exchange Act, such Option shall be exercisable until the earliest of (a) its
normal termination date and (b) seven months after the last transaction in
Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the
Administrator, which shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan as the Administrator deems
necessary or advisable. The Administrator's powers include, but are not limited
to (subject to the specific limitations described herein), authority to
determine the employees who shall receive Grants under the Plan, determine the
size and applicable terms and conditions of Grants to be made to such employees,
<PAGE>
determine the time when Grants will be made and authorize Grants to Eligible
Employees.
The Administrator's interpretations of the Plan, and all actions taken
and determinations made by the Administrator concerning any matter arising under
or with respect to the Plan or any Grants hereunder, shall be final, binding and
conclusive on all interested parties. The Administrator may delegate
ministerial functions hereunder, such delegation to be subject to such terms and
conditions as the Administrator in its discretion shall determine. The
Administrator may as to all questions of accounting rely conclusively upon any
determinations made by the independent public accountants of the Company.
11. COMPLIANCE WITH SECURITIES LAWS. No Option may be exercised and
no Stock may be issued pursuant to an Option or transferred pursuant to a
Restricted Stock Award unless the Administrator shall determine that such
exercise, issuance or transfer complies with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, applicable
state securities laws, and rules and regulations promulgated under each of the
foregoing, and the requirements of any stock exchange upon which the Stock may
then be listed or quotation system upon which the Stock may be quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance. If the Stock subject to this Plan is not registered under the
Securities Act and under applicable state securities laws, the Administrator may
require that the Holder deliver to the Company such documents as counsel for the
Company may determine are necessary or advisable in order to substantiate
compliance with applicable securities laws and the rules and regulations
promulgated thereunder.
12. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of
any change in the outstanding shares of Common Stock by reason of any stock
split, stock dividend, recapitalization, merger, consolidation, combination,
spin-off or exchange of shares or other similar corporate change, appropriate
adjustments shall be made by the Administrator in the number of shares of Stock
subject to this Plan, the number of shares of Stock covered by each Grant and,
in the case of Options, the Option Price of such Option. Any such adjustment
shall be determined by the Administrator in its sole discretion, which
determination shall be conclusive and binding for all purposes of the Plan. Any
new or additional Stock to which a Holder of a Restricted Stock Award may be
entitled shall be subject to all the terms and conditions set forth in Section 6
of this Plan. If fractional shares become due to any Holder as a result of any
adjustment, the Company may, at its option, pay cash in lieu thereof.
<PAGE>
13. NO RIGHTS TO GRANTS OR EMPLOYMENT. No employee or other person
shall have any claim or right to a Grant under the Plan. Receipt of a Grant
under the Plan shall not give an employee any rights to receive any other Grant
under the Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee any right to be retained in the employ of the
Company or any Subsidiary.
14. RIGHTS AS SHAREHOLDER. A Holder under the Plan shall have no
rights as a holder of Common Stock with respect to Options granted hereunder,
unless and until certificates for shares of Common Stock are issued to such
Holder.
15. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving
a sufficient number of authorized shares to the extent required by law to meet
the requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any grant under the Plan.
16. NO ASSIGNMENT. Except as specifically provided by law (including
the laws of descent and distribution) and elsewhere herein, no right or benefit
under, or interest in, the Plan shall be subject to assignment, and no such
right, benefit or interest shall be subject to attachment or legal process for
or against Holder or his or her beneficiaries, as the case may be.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group
constituting the Administrator shall be indemnified for actions with respect to
the Plan to the fullest extent permitted by the Certificate of Incorporation, as
amended, and the By-laws of the Company and by the terms of any indemnification
agreement that has been or shall be entered into from time to time between the
Company and any such persons.
19. HEADINGS. The headings used in this Plan are for convenience
only, and shall not be used to construe the terms and conditions of the Plan.
20. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Grants
theretofore made hereunder. The Administrator may amend or cancel the terms and
conditions of any outstanding Grant, determine whether cash will be paid or
Grants will be made
<PAGE>
in replacement of, or as alternatives to, outstanding Grants or grants under any
other incentive compensation plan; provided, however, that no such change shall
be adverse to the Holder thereof without such Holder's consent.
21. EFFECTIVE DATE, TERMINATION. This Plan shall become effective
upon approval by the stockholders of the Company, and shall remain in effect
until terminated by the Board of Directors or Administrator.
<PAGE>
EXHIBIT 10.17
ROBERT HALF INTERNATIONAL INC.
ANNUAL PERFORMANCE BONUS PLAN
1. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
ADMINISTRATOR means a committee appointed by the Board of Directors of the
Company, which committee shall not have less than two Board members and shall be
disinterested within the meaning of Regulation 16b-3 under the Securities
Exchange Act of 1934.
ANNUAL DETERMINATION means the Target EPS, Target Bonuses and other items
determined annually by the Administrator, as described in Section 4 of this
Plan.
AWARD DATE means the date that the Administrator makes its written
certification of a Bonus pursuant to Section 5 or Section 6.
BONUS means a Preliminary Bonus, a Final Bonus, or both.
BONUS YEAR means the fiscal year with respect to which a Bonus is paid
pursuant to the Plan.
COMPANY means Robert Half International Inc., a Delaware corporation.
ELIGIBLE EXECUTIVE means (a) any elected executive officer of the Company
and (b) any executive of the Company who has senior management functions and
responsibilities, as designated by the Administrator.
EPS means fully diluted earnings per share, determined in accordance with
generally accepted accounting principles. For purposes of the foregoing
sentence, earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles and after
full accrual for the bonuses paid under this Plan.
FAIR MARKET VALUE of the Stock for a specified date means the closing sales
price of the Stock on the New York Stock Exchange, as reported in THE WALL
STREET JOURNAL (Western Edition), on such date or, if there are no trades on
such date, the closing price on the latest preceding business day upon which
trades occurred.
FINAL BONUS means the Year-End Bonus less the Preliminary Bonus, but only
if such number is greater than zero.
FINAL EPS means EPS calculated as of the end of a fiscal year.
FINAL MULTIPLIER means (a) the Final Ratio, if the Final Ratio is greater
than or equal to .5 and less than or equal to 2, (b) 2, if the Final Ratio is
greater than 2, or (c) 0, if the Final Ratio is less than .5.
FINAL RATIO means the result obtained by dividing Final EPS by Target EPS.
NINE-MONTH PERIOD means the first three fiscal quarters of the Bonus Year.
PLAN means this Annual Performance Bonus Plan.
POTENTIAL YEAR-END BONUS means, with respect to each Eligible Executive,
the product of the Final Multiplier and such Eligible Executive's Target Bonus,
but in no event may such amount be in excess of twice the highest bonus paid by
the Company to any Eligible Executive with respect to 1993, as reported by the
Company in its Proxy Statement for the 1994 Annual Meeting of Stockholders.
PRELIMINARY BONUS means, with respect to each Eligible Executive, 85% of
the Product of the Preliminary Multiplier and such Eligible Executive's Target
Bonus, but in no event may such amount be in excess of twice the highest bonus
paid by the Company to any Eligible Executive with respect to 1993, as reported
by the Company in its Proxy Statement for the 1994 Annual Meeting of
Stockholders.
<PAGE>
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month Period.
PRELIMINARY MULTIPLIER means (a) the Preliminary Ratio, if the Preliminary
Ratio is greater than or equal to .5 and less than or equal to 2, (b) 2, if the
Preliminary Ratio is greater than 2, or (c) 0, if the Preliminary Ratio is less
than .5.
PRELIMINARY RATIO means the result obtained by dividing Preliminary EPS by
Target EPS.
REPAYMENT AMOUNT means that amount calculated in accordance with
Section 7.4 hereof.
STOCK means the Common Stock, $1.00 par value, of the Company.
TARGET BONUS means that amount set forth, with respect to each Eligible
Executive, in an Annual Determination.
TARGET EPS means the EPS goal set annually by the Administrator, as set
forth in an Annual Determination.
YEAR-END BONUS means, with respect to each Eligible Executive, that amount
that the Administrator determines in accordance with Section 6 hereof, but in no
event may such amount be in excess of twice the highest bonus paid by the
Company to any Eligible Executive with respect to 1993, as reported by the
Company in its Proxy Statement for the 1994 Annual Meeting of Stockholders.
2. PURPOSE. The purpose of the Plan is to attract, retain and motivate
key senior management employees by providing additional compensation, in
accordance with the terms and conditions set forth herein, based on the
Company's earnings.
3. ADMINISTRATION. The Administrator is authorized to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and to take all actions
necessary or advisable for the Plan's administration. Whenever the Plan
authorizes or requires the Administrator to take any action, make any
determination or decision, or form any opinion, then any such action,
determination, decision or opinion by or of the Administrator shall be in the
absolute discretion of the Administrator and shall be final and binding upon all
persons in interest, including the Company and all Eligible Executives.
4. ANNUAL DETERMINATION. On an annual basis, not later than the end of
the first fiscal quarter of the Bonus Year, the Administrator shall determine
the following with respect to the Bonus Year:
(i) the Eligible Executives;
(ii) the Target EPS for the Bonus Year;
(iii) the Target Bonus for the Bonus Year for each Eligible Executive;
and
(iv) such other matters as are appropriate with respect to the Plan
(together, the "Annual Determination").
5. DETERMINATION OF PRELIMINARY BONUS. Within five business days after
the public release by the Company of its audited results for the third fiscal
quarter of the Bonus Year, the Chief Financial Officer shall (a) calculate the
Preliminary EPS, (b) determine the Preliminary Multiplier for the Bonus Year,
(c) calculate, with respect to each Eligible Executive, his Preliminary Bonus,
(d) deliver each calculation to the Administrator. The Administrator shall,
prior to the end of the Bonus Year, review the information submitted by the
Chief Financial Officer and certify, in writing, each Eligible Executive's
Preliminary Bonus.
6. DETERMINATION OF YEAR-END BONUS. Within ten business days after the
public release by the Company of its audited results for the Bonus Year, the
Chief Financial Officer shall (a) calculate the Final EPS, (b) determine the
Final Multiplier for the Bonus Year, (c) calculate, with respect to each
Eligible Executive, the Potential Year-End Bonus and (d) deliver such
calculations to the Administrator. The Administrator shall, within 90 days of
the end of the Bonus Year, review the information submitted by the Chief
Financial Officer and certify, in writing, each Eligible Executive's Year-End
<PAGE>
Bonus, which shall be the Potential Year-End Bonus; provided, however, that if
any Eligible Executive's Potential Year-End Bonus is greater than such Eligible
Executive's Preliminary Bonus, the Administrator may, in its sole discretion,
reduce such Year-End Bonus to such amount that is not less than the Eligible
Executive's Preliminary Bonus as the Administrator may determine.
7. BONUS PAYMENTS. Each Eligible Executive shall be paid a Bonus in
accordance with the following:
7.1. PRELIMINARY BONUS. The Company shall pay the Preliminary Bonus to
each Eligible Executive after such Preliminary Bonus is certified by the
Administrator but prior to the end of the Bonus Year. Notwithstanding the
foregoing, or anything appearing elsewhere herein, if an Eligible Executive is
not employed by the Company on the date that Preliminary Bonuses are certified
by the Administrator, then a pro-rated Preliminary Bonus shall be paid to such
Eligible Executive (a) if the termination of employment was by reason of the
Eligible Executive's death, (b) as provided by any agreement or arrangement in
existence on the date the Plan was approved by the stockholders or (c) under
such circumstances as the Administrator, in its sole discretion, may determine;
otherwise, no Preliminary Bonus in any amount shall be paid to such Eligible
Executive.
7.2. FINAL BONUS. The Company shall pay the Final Bonus to each Eligible
Executive after such Final Bonus is certified by the Administrator but prior to
the end of the first fiscal quarter following the Bonus Year. Notwithstanding
the foregoing, or anything appearing elsewhere herein, if an Eligible Executive
is not employed by the Company on the last day of the Bonus Year, then a
pro-rated Final Bonus shall be paid to such Eligible Executive (a) if the
termination of employment was by reason of the Eligible Executive's death,
(b) as provided by any agreement or arrangement in existence on the date the
Plan was approved by the stockholders or (c) under such circumstances as the
Administrator, in its sole discretion, may determine; otherwise, no Final Bonus
in any amount shall be paid to such Eligible Executive.
7.3. STOCK IN LIEU OF CASH. At the discretion of the Administrator on the
Award Date, up to 100% of any Final Bonus may be paid in shares of Stock rather
than in cash. Any such shares shall be valued at their Fair Market Value on the
Award Date. Fractional shares may not be granted. Any shares granted pursuant to
this Section 7.3 shall not be subject to forfeiture for any reason, but shall be
subject to a restriction that prevents any disposition thereof for a period of
six months and one day from the Award Date.
7.4. REPAYMENT OF PRELIMINARY BONUS. If the Year-End Bonus for an
Eligible Executive is less than such Eligible Executive's Preliminary Bonus,
such Eligible Executive shall repay such difference (the "Repayment Amount")
within fifteen (15) business days of notification thereof. To the extent the
Repayment Amount is unpaid, the Company shall, consistent with applicable law,
be entitled to deduct the Repayment Amount from any other amounts due by the
Company to such Eligible Executive, and to pursue any and all other legal and
equitable remedies to recover such Repayment Amount.
8. EMPLOYMENT. The selection of an employee as an Eligible Executive
shall not affect any right of the Company to terminate, with or without cause,
such person's employment at any time.
9. WITHHOLDING TAXES. The Company shall, to the extent permitted by law,
have the right to deduct from a Bonus any federal, state or local taxes of any
kind required by law to be withheld with respect to such Bonus.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Administrator
may at any time amend, alter, suspend, or discontinue this Plan.
<PAGE>
11. INDEMNIFICATION OF ADMINISTRATOR. Indemnification of members of the
group constituting the Administrator for actions with respect to the Plan shall
be in accordance with the terms and conditions of separate indemnification
agreements, if any, that have been or shall be entered into from time to time
between the Company and any such person.
12. HEADINGS. The headings used in this Plan are for convenience only,
and shall not be used to construe the terms and conditions of the Plan.
<PAGE>
EXHIBIT 10.19
Indemnification Agreement for Directors
---------------------------------------
The form of Indemnification Agreement for directors filed as Exhibit 10.27
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, has been entered into with the following individuals on the
dates indicated:
<TABLE>
<CAPTION>
Individual Data
---------- ----
<S> <C>
Andrew S. Berwick, Jr. March 23, 1989
Frederick P. Furth March 23, 1989
Edward W. Gibbons March 23, 1989
Todd Goodwin May 24, 1989
Leonard I. Green March 23, 1989
Ralph T. McElvenney, Jr. March 23, 1989
Harold M. Messmer, Jr. March 23, 1989
Charles E. F. Millard March 23, 1989
Frederick A. Richman March 15, 1994
Thomas J. Ryan March 23, 1989
J. Stephen Schaub March 23, 1989
</TABLE>
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the individual
Indemnification Agreements are not being filed.
<PAGE>
EXHIBIT 11 TO FORM 10-K
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
NET INCOME $11,723 $ 4,382 $ 4,115
------- ------- -------
------- ------- -------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING
Primary:
Common stock- 12,155 11,742 11,427
Common stock equivalents -
stock options (A) 391 223 176
------- ------- -------
Primary shares outstanding 12,546 11,965 11,603
------- ------- -------
------- ------- -------
Fully Diluted:
Common stock 12,155 11,742 11,427
Common stock equivalents -
stock options (A) 475 261 210
------- ------- -------
Fully diluted shares outstanding 12,630 12,003 11,637
------- ------- -------
------- ------- -------
NET INCOME PER SHARE:
Primary $ .93 $ .37 $ .35
Fully diluted $ .93 $ .37 $ .35
<FN>
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
</TABLE>
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
Jurisdiction of
Name of Subsidiary Incorporation
- ----------------- -------------
RH Holding Company, Inc. California
LegalTeam, Inc. California
Robert Half of Texas G.P. Ltd. Delaware
XYZ-II, Inc. Delaware
Robert Half Incorporated Florida
R-H International Advertising Fund, Inc. Florida
Robert Half of Nevada, Inc. Nevada
R-H Franchises Western Hemisphere, Inc. New York
Robert Half of Philadelphia, Inc. Pennsylvania
RHT, L.P. (a limited partnership) Texas
Fontaine Archer Van de Voorde S.A./N.V. Belgium
S.A. Robert Half N.V. Belgium
Accountemps S.A./N.V. Belgium
Robert Half Canada Inc. Canada
Norman Parsons S.A. (72% owned) France
Accountemps S.A.R.L. France
Robert Half S.A. France
Robert Half Limited United Kingdom
Robert Half Personnel (Midlands) Limited United Kingdom
Envaward Limited United Kingdom
Hatlon Limited United Kingdom
<PAGE>
EXHIBIT 23
ACCOUNTANTS' CONSENT
As independent public accountants, we hereby consent to the incorporation
of our reports included in this Form 10-K into the Company's previously filed
Registration Statements Files No. 33-39204, 33-39187, 33-14706, 33-32623,
33-32622, 33-40795, 33-62138, 33-62140 and 033-52617.
ARTHUR ANDERSEN & CO.
San Francisco, California
March 22, 1994
