<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
---------------
(MARK ONE)
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
PERIOD ENDED SEPTEMBER 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM TO .
------------------------
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
2884 SAND HILL ROAD 94025
SUITE 200 (zip-code)
MENLO PARK, CALIFORNIA
(Address of principal executive
offices)
</TABLE>
Registrant's telephone number, including area code: (415) 234-6000
------------------------
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) had been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 1996:
59,489,478 shares of $.001 par value Common Stock
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ASSETS:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
(UNAUDITED)
Cash and cash equivalents........................................................... $ 71,011 $ 41,346
Accounts receivable, less allowances of $3,809 and $3,067........................... 112,058 84,955
Other current assets................................................................ 11,165 7,349
------------- ------------
Total current assets............................................................ 194,234 133,650
Intangible assets, less accumulated amortization of $37,072 and $33,071............. 159,611 155,441
Other assets........................................................................ 20,935 12,049
------------- ------------
Total assets.................................................................... $ 374,780 $ 301,140
------------- ------------
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses............................................... $ 14,205 $ 12,631
Accrued payroll costs............................................................... 53,761 33,853
Income taxes payable................................................................ (979) 5,157
Current portion of notes payable and other indebtedness............................. 2,114 4,239
------------- ------------
Total current liabilities....................................................... 69,101 55,880
Notes payable and other indebtedness, less current portion.......................... 2,604 1,486
Deferred income taxes............................................................... 16,261 15,844
------------- ------------
Total liabilities............................................................... 87,966 73,210
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value authorized 100,000,000 shares; issued and outstanding
59,602,468 and 57,784,622 shares.................................................. 60 58
Capital surplus..................................................................... 138,372 99,768
Deferred compensation............................................................... (29,272) (9,642)
Accumulated translation adjustments................................................. (213) 51
Retained earnings................................................................... 177,867 137,695
------------- ------------
Total stockholders' equity...................................................... 286,814 227,930
------------- ------------
Total liabilities and stockholders' equity...................................... $ 374,780 $ 301,140
------------- ------------
------------- ------------
</TABLE>
All shares and amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
1
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues............................................. $ 232,950 $ 159,303 $ 639,838 $ 452,612
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees.................... 141,162 97,107 387,487 276,645
---------- ---------- ---------- ----------
Gross margin..................................................... 91,788 62,196 252,351 175,967
Selling, general and administrative expenses..................... 63,983 43,358 176,133 123,251
Amortization of intangible assets................................ 1,356 1,190 4,025 3,496
Interest income.................................................. (609) (217) (1,577) (200)
---------- ---------- ---------- ----------
Income before income taxes....................................... 27,058 17,865 73,770 49,420
Provision for income taxes....................................... 11,112 7,402 30,361 20,603
---------- ---------- ---------- ----------
Net income....................................................... $ 15,946 $ 10,463 $ 43,409 $ 28,817
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per share............................................. $ .26 $ .18 $ .71 $ .49
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
All per share amounts have been restated to retroactively reflect
the two-for-one stock split effected in the form of a stock dividend in June
1996.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
2
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1996 1995
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 57,784 56,304
Issuance of restricted stock, net....................................................... 636 296
Issuance of common stock for acquisitions............................................... 362 --
Repurchases of common stock............................................................. (175) (194)
Exercises of stock options.............................................................. 995 774
---------- ----------
Balance at end of period.............................................................. 59,602 57,180
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 58 $ 56
Issuance of restricted stock, net....................................................... 1 --
Exercises of stock options.............................................................. 1 1
---------- ----------
Balance at end of period.............................................................. $ 60 $ 57
---------- ----------
---------- ----------
CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 99,768 $ 82,655
Issuance of restricted stock, net--excess over par value................................ 24,335 3,290
Exercises of stock options--excess over par value....................................... 3,577 2,498
Tax benefits from exercises of stock options............................................ 10,692 2,444
---------- ----------
Balance at end of period.............................................................. $ 138,372 $ 90,887
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (9,642) $ (5,533)
Issuance of restricted stock, net....................................................... (24,336) (3,290)
Amortization of deferred compensation................................................... 4,706 1,973
---------- ----------
Balance at end of period.............................................................. $ (29,272) $ (6,850)
---------- ----------
---------- ----------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period.......................................................... $ 51 $ (541)
Translation adjustments................................................................. (264) 722
---------- ----------
Balance at end of period.............................................................. $ (213) $ 181
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 137,695 $ 100,386
Issuance of common stock for acquisition................................................ 1,285 --
Repurchases of common stock--excess over par value...................................... (4,522) (1,884)
Net income.............................................................................. 43,409 28,817
---------- ----------
Balance at end of period.............................................................. $ 177,867 $ 127,319
---------- ----------
---------- ----------
</TABLE>
All shares and amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
3
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1996 1995
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................................ $ 43,409 $ 28,817
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets....................................................... 4,025 3,496
Depreciation expense.................................................................... 4,396 2,489
Deferred income taxes................................................................... (1,128) 1,069
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable....................................................... (25,530) (19,252)
Increase in accounts payable, accrued expenses and accrued payroll costs.............. 20,934 13,520
Increase (decrease) in income taxes payable........................................... (6,136) 2,182
Change in other assets, net of change in other liabilities............................ (2,081) 1,987
---------- ----------
Total adjustments..................................................................... (5,520) 5,491
---------- ----------
Net cash and cash equivalents provided by operating activities............................ 37,889 34,308
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions, net of cash acquired...................................................... (1,038) (1,024)
Capital expenditures.................................................................... (13,302) (5,957)
---------- ----------
Cash and cash equivalents used in investing activities.................................... (14,340) (6,981)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repurchases of common stock or common stock equivalents................................. (4,522) (1,884)
Principal payments on notes payable and other indebtedness.............................. (3,632) (1,292)
Proceeds and tax benefits from exercise of stock options................................ 14,270 4,943
---------- ----------
Net cash and cash equivalents provided by financing activities............................ 6,116 1,767
---------- ----------
Net decrease in cash and cash equivalents................................................. 29,665 29,094
Cash and cash equivalents at beginning of period.......................................... 41,346 2,638
---------- ----------
Cash and cash equivalents at end of period................................................ $ 71,011 $ 31,732
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 434 $ 384
Income taxes............................................................................ $ 25,923 $ 6,393
Acquisitions:
Assets acquired--
Intangible assets..................................................................... $ 4,155 $ 4,697
Other................................................................................. 1,713 753
Liabilities incurred--
Notes payable and contracts........................................................... (2,625) (2,800)
Other................................................................................. (920) (1,626)
Common stock issued..................................................................... (1,285) --
---------- ----------
Cash paid, net of cash acquired......................................................... $ 1,038 $ 1,024
---------- ----------
---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
4
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS. Robert Half International Inc. (the "Company")
provides specialized staffing services through such divisions as
Accountemps-Registered Trademark-, Robert Half-Registered Trademark-,
OfficeTeam-Registered Trademark- and RHI Consulting-Registered Trademark-. The
Company, through its Accountemps and Robert Half divisions, is the world's
largest specialized provider of temporary and permanent personnel in the fields
of accounting and finance. OfficeTeam specializes in skilled temporary
administrative personnel and RHI Consulting provides contract information
technology professionals. Revenues are predominantly from temporary services.
The Company operates in the United States, Canada and Europe. The Company is a
Delaware corporation.
PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include
the accounts of 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 1995
financial statements to conform to the 1996 presentation.
INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in management's opinion, include all
adjustments necessary for a fair statement of results for such interim periods.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules or regulations; however,
the Company believes that the disclosures made are adequate to make the
information presented not misleading.
The interim results for the three and nine months ended September 30, 1996,
and 1995 are not necessarily indicative of results for the full year. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
REVENUE RECOGNITION. Temporary service 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.
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 the
acquisition date, and are being amortized on a straight-line basis over a period
of 40 years. The carrying value of intangible assets is periodically reviewed by
the Company and impairments are recognized when the expected future operating
cash flows derived from such intangible assets are less than their carrying
value. Based upon its most recent analysis, the Company believes that no
material impairment of intangible assets exist at September 30, 1996.
INCOME TAXES. 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.
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'
5
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity. Gains and losses resulting from foreign currency transactions are
included in the consolidated statements of income.
USE OF ESTIMATES. The preparation of financial statements in comformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.
NOTE B--STOCK SPLIT
In June 1996, the Company effected a two-for-one stock split in the form of
a stock dividend. All share and per share amounts in the financial statements
have been restated to retroactively reflect the two-for-one stock split.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
Temporary services revenues were $215 million and $146 million for the three
months ended September 30, 1996 and 1995, respectively, increasing by 47% during
the three months ended September 30, 1996 compared to the same period in 1995.
Temporary services revenues were $589 million and $414 million for the nine
months ended September 30, 1996 and 1995, respectively, increasing by 42% during
the nine months ended September 30, 1996 compared to the same period in 1995.
Permanent placement revenues were $18 million and $13 million for the three
months ended September 30, 1996 and 1995, respectively, increasing by 38% during
the three months ended September 30, 1996 compared to the same period in 1995.
Permanent placement revenues were $51 million and $38 million for the nine
months ended September 30, 1996 and 1995, respectively, increasing by 34% during
the nine months ended September 30, 1996 compared to the same period in 1995.
Overall revenue increases reflect continued improvement in demand for the
Company's services, which the Company believes is a result of increased
acceptance in the use of professional staffing services. Revenues from companies
acquired during the nine months ended September 30, 1996 were not material.
The Company currently has more than 190 offices in 36 states and five
foreign countries. Domestic operations represented 91% of revenues for both the
three and nine months ended September 30, 1996, and 90% of revenues for both the
three and nine months ended September 30, 1995. Foreign operations represented
9% of revenues for both the three and nine months ended September 30, 1996, and
10% of revenues for both the three and nine months ended September 30, 1995.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consists of payroll, payroll taxes
and insurance costs for temporary employees. Gross margin dollars from permanent
placement services are equal to revenues, as there are no direct costs
associated with such revenues. Gross margin dollars for the Company's temporary
services were $74 million and $202 million for the three and nine months ended
September 30, 1996, respectively, compared to $49 million and $138 million for
the comparable periods in 1995, increasing by 51% and 46% for the three and nine
months ended September 30, 1996, respectively. Gross margin amounts equaled 34%
of revenues for temporary services for both the three and nine months ended
September 30, 1996, compared to 34% and 33% of temporary service revenues for
the three and nine months ended September 30, 1995, respectively, which the
Company believes reflects its ability to adjust billing rates and wage rates to
underlying market conditions. Gross margin dollars for the Company's permanent
placement division were $18 million and $51 million for the three and nine
months ended September 30, 1996, respectively, compared to $13 million and $38
million for the comparable periods in 1995, increasing by 38% and 34% for the
three and nine months ended September 30, 1996, respectively.
Selling, general and administrative expenses were $64 million and $176
million for the three and nine months ended September 30, 1996, respectively,
compared to approximately $43 million and $123 million during the three and nine
months ended September 30, 1995, respectively. Selling, general and
administrative expenses as a percentage of revenues were 27% and 28% for the
three and nine months ended September 30, 1996, respectively, compared to 27%
for the same periods in 1995. Selling, general and administrative expenses
consist primarily of staff compensation, advertising and occupancy costs, most
of which generally follow changes in revenues.
The Company allocates the excess of cost over the fair market value of the
net tangible assets first to identifiable intangible assets, if any, and then to
goodwill. Although management believes that goodwill has an unlimited life, the
Company amortizes these costs over 40 years. Management believes that its
strategy of making acquisitions of established companies in established markets
and maintaining its presence in these markets preserves the goodwill for an
indeterminate period. The carrying value of intangible assets is
7
<PAGE>
periodically reviewed by the Company and impairments are recognized when the
expected future operating cash flows derived from such intangible assets is less
than their carrying value. Based upon its most recent analysis, the Company
believes that no material impairment of intangible assets existed at September
30, 1996. Intangible assets represented 43% of total assets and 56% of total
stockholders' equity at September 30, 1996.
Interest income for the three months ended September 30, 1996 and 1995 was
$783,000 and $381,000, respectively, while interest expense for the three months
ended September 30, 1996 and 1995 was $174,000 and $164,000, respectively.
Interest income for the nine months ended September 30, 1996 and 1995 was
$2,006,000 and $739,000, respectively, while interest expense for the nine
months ended September 30, 1996 and 1995 was $429,000 and $539,000,
respectively. These changes reflect an increase in cash and cash equivalents and
a decrease in outstanding indebtedness.
The provision for income taxes for both the three and nine months ended
September 30, 1996 was 41% compared to 41% for the three months ended September
30, 1995 and 42% for the nine months ended September 30, 1995. The decrease for
the nine months ended September 30, 1996 compared to the nine months ended
September 30, 1995 is the result of a smaller percentage of non-deductible
intangible expenses relative to income.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during nine months ended September 30,
1996 is the net effect of funds generated by operations and the funds used for
the personnel services acquisitions, capital expenditures and principal payments
on outstanding notes payable. For the nine months ended September 30, 1996, the
Company generated $37.9 million from operations, used $14.3 million in investing
activities and provided $6.1 million by financing activities.
The Company's working capital at September 30, 1996 included $71.0 million
in cash and cash equivalents. In addition at September 30, 1996, the Company had
available $68.8 million of its $75 million bank revolving line of credit. 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,
the Company's fixed payments and other obligations on both a short and long term
basis. As of September 30, 1996, the Company had no material capital
commitments. The Company's revolving bank line has scheduled reductions in
availability through 2001 when the agreement terminates.
In June 1996, the company effected a two-for-one stock split in the form of
a stock dividend. All share and per share amounts in the financial statements
have been restated to retroactively reflect the two-for-one stock split.
In 1996, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standard ("SFAS") No. 121, "Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of".
The adoption of SFAS No. 121 did not have a material impact upon the Company's
financial statements.
8
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO.
- -------------
<S> <C>
3.1 Restated Certificate of Incorporation.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1).
10.1 Outside Directors' Option Plan.
10.2 1989 Restricted Stock Plan.
10.3 StockPlus Plan.
10.4 1993 Incentive Plan.
10.5 1985 Stock Option Plan.
11 Computation of Per Share Earnings.
27 Financial Data Schedules.
</TABLE>
(b) The registrant filed no current report of Form 8-K during the quarter
covered by this report.
9
<PAGE>
SIGNATURES
Pursuant to the requirements 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)
By /s/ M. KEITH WADDELL
------------------------------------
M. Keith Waddell,
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL
OFFICER AND TREASURER
(PRINCIPAL FINANCIAL OFFICER
AND DULY AUTHORIZED SIGNATORY)
Date: November 13, 1996
10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
- ------------- --------------------------------------------------------------------------- -------------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1).
10.1 Outside Directors' Option Plan.
10.2 1989 Restricted Stock Plan.
10.3 StockPlus Plan.
10.4 1993 Incentive Plan.
10.5 1985 Stock Option Plan.
11 Computation of Per Share Earnings.
27 Financial Data Schedules.
</TABLE>
<PAGE>
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
ROBERT HALF INTERNATIONAL INC.,
A DELAWARE CORPORATION
Robert Half International Inc., a corporation organized and existing
under the laws of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: The present name of the Corporation is Robert Half
International Inc.
SECOND: The Corporation was originally incorporated under the name
Boothe Interim Corporation and subsequently changed its name to Boothe Financial
Corporation before taking its present name.
THIRD: The date of filing of the Corporation's original Certificate
of Incorporation with the Secretary of State of the State of Delaware was
October 18, 1979.
FOURTH: This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the Corporation's
Certificate of Incorporation as previously restated, amended or supplemented,
and there is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
FIFTH: This Restated Certificate of Incorporation has been duly
adopted by the Corporation's Board of Directors in accordance with the
applicable provisions of Section 245 of the General Corporation Law of the State
of Delaware.
SIXTH: The Certificate of Incorporation is hereby restated to read
in full as follows:
1. NAME. The name of the Corporation is Robert Half International
Inc.
2. REGISTERED OFFICE. The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
3. PURPOSES. The purpose of the Corporation is to engage in any
lawful act or activity for which
<PAGE>
corporations may be organized under the General Corporation Law of the State of
Delaware.
4. CAPITAL STOCK.
A. AUTHORIZED CAPITAL. The Corporation is authorized to issue
two classes of shares of stock to be designated respectively "preferred" and
"common." The total number of shares which the Corporation is authorized to
issue is one hundred five million (105,000,000), and the aggregate par value of
all shares that are to have a par value shall be $105,000. The number of common
shares authorized is one hundred million (100,000,000), each such share to have
a par value of $.001, and the number of preferred shares authorized is five
million (5,000,000), each such share to have a par value of $.001.
B. COMMON STOCK. The holders of shares of common stock shall
be entitled to receive such dividends as may be declared by the Board of
Directors. In the event of voluntary or involuntary liquidation of the
Corporation, the holders of shares of common stock shall be entitled to receive
pro rata all of the remaining assets of the Corporation available for
distribution to its stockholders after all amounts to which the holders of
shares of preferred stock are entitled have been paid or set aside in cash for
payment. Except as may be otherwise required by law or this Certificate of
Incorporation, each holder of record of each share of common stock shall be
entitled to one vote for each such share standing in his name on the books of
the Corporation.
C. PREFERRED STOCK. The designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the preferred stock shall be as follows:
The preferred stock may be issued from time to time in one or more
series. The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of preferred stock in one or
more series, with such voting powers, full or limited, or without voting powers
and with such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereon,
as shall be stated and expressed in the resolution or resolutions providing for
the issue thereof adopted by the Board of Directors, and as are not stated and
expressed in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the following:
<PAGE>
(a) the distinctive serial designation of such series and
the number of shares constituting a series;
(b) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or of any other series of capital stock, and whether such dividends
shall be cumulative or noncumulative;
(c) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(d) whether the shares are entitled to the benefit of a
sinking or retirement fund to be applied to the purchase or redemption of shares
of a series and, if so entitled, the amount of the fund and the manner of its
application, including the price or prices at which the shares may be redeemed
or purchased through the application of the fund;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for, shares of any other class or classes or of
any other series of any class or classes of capital stock of the Corporation,
and, if provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(f) the voting powers, full or limited, if any, of the
shares of the series;
(g) the restrictions, if any, on the issue or reissue of
any additional preferred stock;
(h) the rights of the holders of the shares of such series
upon the dissolution of, or upon the distribution of assets of, the Corporation.
There is hereby expressly granted to the Board of Directors of the
Corporation authority to increase or decrease the number of shares of any series
subsequent to the issue of shares of that series, but not below the number of
shares of that series then outstanding. In case the number of shares of any
series shall be so decreased, the shares constituting such decrease shall resume
the status which they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
D. SERIES A JUNIOR PARTICIPATING PREFERRED STOCK.
<PAGE>
SECTION 1. DESIGNATION AND AMOUNT. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of shares constituting
the Series A Preferred Stock shall be One Million (1,000,000). Such
number of shares may be increased or decreased by resolution of the Board of
Directors; PROVIDED, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any
shares of any series of preferred stock (or any similar stock) ranking prior
and superior to the Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference to the holders
of common stock, par value $0.001 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $0.25 or (b)
effective as of August 15, 1996 but thereafter subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In
the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately
<PAGE>
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $0.25 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(A) Effective as of August 15, 1996 but subject to
the provision for adjustment hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders
<PAGE>
of the Corporation. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of preferred stock or any
similar stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable or in arrears
in proportion to the
<PAGE>
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire
for consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of preferred stock and may be reissued as part
of a new series of preferred stock subject to the conditions and restrictions
on issuance set forth herein, in the Certificate of Incorporation, or in any
other Certificate of Designations creating a series of preferred stock or any
similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $25 per share, plus
an amount equal to accrued and
<PAGE>
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
effective August 15 , 1996 but thereafter subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and
all such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, effective August 15,
1996 but thereafter subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the
<PAGE>
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A
Preferred Stock shall not be redeemable.
SECTION 9. RANK. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Corporation's
preferred stock.
SECTION 10. AMENDMENT. The Certificate of Incorporation
of the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
5. MANAGEMENT OF BUSINESS. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
and the directors need not be elected by ballot unless required by the By-laws
of the Corporation.
6. BY-LAWS. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-laws of the Corporation.
7. CERTAIN TRANSACTIONS WITH RELATED CORPORATIONS. Except as
expressly provided in this Article 7, the affirmative vote or consent of the
holders of at least 66-2/3% of the outstanding shares of capital stock of the
Corporation entitled to vote in the election of directors shall be required to
authorize, adopt or approve any of the following:
(i) Any plan of merger or consolidation of the Corporation with
or into any Related Corporation or any affiliate of a Related Corporation or of
any Related Corporation or any affiliate of a Related Corporation into the
Corporation;
(ii) Any sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Corporation to or with any
Related Corporation or any affiliate of a Related Corporation, whether or not in
connection with the dissolution of the Corporation; or
(iii) Any issuance of capital stock or other securities of the
Corporation in exchange or payment for any properties or assets of any Related
Corporation or any
<PAGE>
affiliate of a Related Corporation in a transaction for which the approval of
stockholders of the Corporation is required by law or by any national securities
exchange on which outstanding securities of the Corporation are listed as a
prerequisite to the listing thereon of the additional securities being issued.
The provisions of this Article 7 shall not be applicable to any merger or
consolidation of the Corporation with or into, or any sale, lease, exchange or
other disposition of all or substantially all the property of the Corporation to
or with a corporation of which the Corporation owns, of record or beneficially,
a majority of the outstanding shares of all classes of stock entitled to vote in
the election of directors of that corporation. Should a majority of the
disinterested members of the Board of Directors so authorize by express
resolution, the affirmative vote or consent of the holders of at least a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote in the election of directors may authorize, adopt, or approve any of the
transactions specified in this Article 7. As used in this Article 7, the
following terms shall have the following meanings:
(i) "Related Corporation" shall mean any corporation which
together with its affiliates and associated persons owns or has presently
exercisable rights to acquire, as of the record date for the determination of
stockholders entitled to vote on the transaction in question, of record or
beneficially, directly or indirectly, 10% or more of the outstanding shares of
capital stock of the Corporation entitled to vote on such transaction;
(ii) An "affiliate" of a Related Corporation shall mean any
individual, partnership, joint venture, trust, corporation or other entity
which, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Related Corporation;
(iii) An "associated person" of a Related Corporation shall
mean any beneficial owner, directly or indirectly, of 10% or more of any class
of equity security of such Related Corporation or any of its affiliates; and
(iv) A "disinterested member" shall refer to a director who is
not a director, officer, associated person, or affiliate of a Related
Corporation or of an affiliate (other than the Corporation or any of its
subsidiaries) of a Related Corporation, and who is not a nominee of such a
director, officer, associated person, or affiliate of a Related Corporation.
Any determination made in good faith by the Board of Directors,
on the basis of information at the time
<PAGE>
available to it, as to whether any corporation is a Related Corporation or
whether any person is an affiliate or an associated person of a Related
Corporation, shall be conclusive and binding for all purposes of this Article 7.
This Article 7 shall not be altered, amended or repealed, and no
amendment of this Certificate of Incorporation inconsistent with any provision
of this Article 7 shall be adopted, unless the holders of at least 66-2/3% of
the outstanding shares of capital stock of the Corporation entitled to vote
thereon, shall have approved such alteration, amendment, repeal or adoption.
8. AMENDMENTS. Subject to Article 7, the Corporation reserves the
right to amend and repeal any provision contained in this Certificate of
Incorporation in the manner prescribed by the laws of the State of Delaware. All
rights herein conferred are granted subject to this reservation.
9. ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived any improper personal benefit. Any repeal or
modification of the preceding sentence by the stockholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
10. INDEMNIFICATION AND INSURANCE.
(a) RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director, officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
<PAGE>
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; PROVIDED, HOWEVER, that,
except as provided in paragraph (b) hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification conferred in this
Article shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition (hereinafter an "advancement of expenses"); PROVIDED,
HOWEVER, that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under this Article or otherwise (hereinafter an
"undertaking").
(b) RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
paragraph (a) of this Article is not paid in full by the Corporation within
sixty days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty days, the indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of
<PAGE>
an undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met the applicable standard of
conduct set forth in the Delaware General Corporation Law. Neither the failure
of the Corporation (including its Board of Directors, independent legal counsel,
or its stockholders) to have made a determination prior to commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified or to such advancement of expenses
under this Article or otherwise shall be on the Corporation.
(c) NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification
and to the advancement of expenses conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, this Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
(e) INDEMNIFICATION OF AGENTS OF THE CORPORATION. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any agent of the Corporation to the fullest extent of the provisions of this
Article with respect to the indemnification and advancement of expenses of
directors, officers and employees of the Corporation.
IN WITNESS WHEREOF, Robert Half International Inc. has caused this
Restated Certificate of Incorporation to be signed by Kirk E. Lundburg, its
Vice President, and attested by Steven Karel, its Secretary, this 20th day of
August, 1996.
<PAGE>
ROBERT HALF INTERNATIONAL INC.
By /S/KIRK E. LUNDBURG
-----------------------
Name: Kirk E. Lundburg
Title: Vice President
Attest:
By /s/STEVEN KAREL
-------------------
Name: Steven Karel
Title: Secretary
<PAGE>
EXHIBIT 10.1
OUTSIDE DIRECTORS' OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 1, 1996)
1. DEFINITIONS. As used in this Plan, the following terms have the
following meanings:
1.1. ADMINISTRATOR means the Board or a committee appointed by the
Board.
1.2. AFFILIATE means a "parent" or "subsidiary" corporation, as defined
in Sections 425(e)and 425(f), respectively, of the Code.
1.3. ANNUAL ORGANIZATIONAL MEETING means the first meeting of the Board
after the annual meeting of the Company's stockholders.
1.4. BOARD means the Board of Directors of the Company.
1.5. CHANGE IN CONTROL. A Change in Control means any of the following
events:
1.5.1. SCHEDULE 13D OR 13G FILING. 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.
1.5.2. CERTAIN CHANGES IN DIRECTORATE. 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.
1.5.3. GOING PRIVATE. The Company's stockholders approve a
definitive agreement providing for a transaction in which the Company
will cease to be an independent publicly-owned corporation.
1.5.4. CERTAIN CORPORATE TRANSACTIONS. 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
Voting Shares 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.
1.5.5. TENDER OR EXCHANGE OFFER. 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 1.5.5, Voting Shares held by such person or
group shall be calculated in accordance with the last sentence of Section
1.5.1 hereof.
1.6. CODE means the Internal Revenue Code of 1986, as amended.
1.7. COMPANY means Robert Half International Inc.
1.8. DIRECTOR means a member of the Board.
1
<PAGE>
1.9. ELIGIBLE DIRECTOR means a Director who is not also an employee of
the Company or an Affiliate.
1.10. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
1.11. GRANT DATE means the date on which an Option is granted.
1.12. OFFER means a tender offer or an exchange offer for shares of the
Company's Stock.
1.13. OPTION means an option to purchase Stock as described in Section
5.1 hereof. An Option granted under this Plan is a nonstatutory option to
purchase Stock which does not meet the requirements set forth in Section
422A of the Code.
1.14. OPTION AGREEMENT means a written agreement evidencing an Option,
in form satisfactory to the Company, duly executed on behalf of the Company
and delivered to and executed by an Optionee.
1.15. OPTIONEE means an Eligible Director who has been granted an
Option.
1.16. PLAN means the Outside Directors' Option Plan.
1.17. SECURITIES ACT means the Securities Act of 1933, as amended.
1.18. STOCK means the Common Stock, $.001 par value, of the Company.
1.19. STOCK PURCHASE AGREEMENT means a written agreement, in form
satisfactory to the Company, duly executed by the Company and an Optionee
who has exercised an Option to purchase Stock.
1.20. TERMINATION DATE means the date on which an Optionee ceases to be
a Director of the Company.
1.21. VESTING DATE means, with respect to each calendar year, the last
day of the month in which the Annual Organization Meeting is held; provided,
however, that the "Vesting Date" with respect to a particular Option shall
not include the last day of the month in which such Option is granted.
1.22. VOTING SHARES means the outstanding shares of the Company
entitled to vote for the election of directors.
2. PURPOSES OF THE PLAN. The purposes of the Plan are to attract and
retain the best available candidates for the Board, to provide additional equity
incentives to Eligible Directors through their participation in the growth value
of the Stock, and to promote the success of the Company's business. To
accomplish the foregoing objectives, this Plan provides a means whereby Eligible
Directors will receive Options to purchase Stock.
3. STOCK SUBJECT TO THE PLAN. The number of authorized but previously
unissued shares of the Company's Stock available for issuance hereunder shall
equal the number of shares of Stock with respect to which Options are granted
pursuant to Section 5 hereof.
4. ADMINISTRATION. The Administrator shall have the authority to grant
Options upon the terms and conditions of this Plan, and to determine all other
matters relating to this Plan. The Administrator may delegate ministerial duties
to such employees of the Company as it deems proper. All questions of
interpretation, implementation and application of this Plan shall be determined
by the Administrator, and such determinations shall be final and binding on all
persons.
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5. TERMS AND CONDITIONS OF OPTIONS.
5.1. GRANT OF OPTION. Options shall be granted pursuant to this Plan
as follows:
5.1.1. GRANT ON EFFECTIVE DATE. Upon the effective date of this
Plan, an Option for 20,000 shares of Stock shall be granted to each
Eligible Director who shall not previously have been granted an option by
the Company for the purchase of shares of Stock.
5.1.2. SUBSEQUENT GRANTS. On the date of each Annual Organizational
Meeting subsequent to the effective date of this Plan, an Option shall be
granted to each Eligible Director. With respect to any Eligible Director
who, prior to such date, shall not have been granted an option by the
Company, whether pursuant to this Plan or any other plan or arrangement
with the Company, the Option shall be for 10,000 shares of Stock.
Otherwise, the Option shall be for 8,000 shares of Stock.
5.2. EXERCISE PRICE. The exercise price of an Option shall be 100% of
the value of the Stock on the Grant Date, determined in accordance with
Section 6 hereof.
5.3. OPTION TERM. Each Option granted under this Plan shall expire ten
(10) years from the Grant Date.
5.4. OPTION EXERCISE.
5.4.1. INITIAL EXERCISE. No Option may be exercised in whole or in
part until the later to occur of (i) the first Vesting Date following the
Grant Date of such Option and (ii) six months after the Grant Date of
such Option.
5.4.2. STOCKHOLDER APPROVAL. If stockholder approval of this Plan
is required (a) under the rules and regulations promulgated under Section
16 of the Exchange Act in order to exempt any transaction contemplated by
this Plan from Section 16(b) of the Exchange Act, or (b) by the rules of
the New York Stock Exchange, if the Company's securities are listed
thereon, or (c) by the rules of the National Association of Securities
Dealers automated quotation system ("NASDAQ"), National Market System, if
the Company's securities are quoted thereon, then no Option may be
exercised in whole or in part until the stockholders of the Company have
approved this Plan.
5.4.3. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued
pursuant to the exercise of an Option unless the exercise of the Option
and the issuance and delivery of Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, applicable state securities laws, the
rules and regulations promulgated under each of the foregoing, the
requirements of the New York Stock Exchange (if the Company's securities
are listed thereon) and the requirements of NASDAQ pertaining to the
National Market System (if the Company's securities are quoted thereon),
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
5.5. REGISTRATION AND RESALE. 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 Participant 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.
5.6. VESTING SCHEDULE. An Optionee's right to exercise an Option shall
vest, as to twenty-five percent (25%) of the Stock (as adjusted, pursuant to
Section 5.8.1 hereof, if applicable) initially subject to the Option, on
each of the first through fourth Vesting Dates following the Grant Date.
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5.7. PAYMENT UPON EXERCISE. At the time written notice of exercise of
an Option is given to the Company, the Optionee shall make payment in full,
in cash or check or by one of the methods specified in Section 5.7.1 or
Section 5.7.2 below, for all Stock purchased pursuant to the exercise of
such Option. Proceeds of any such payment shall constitute general funds of
the Company.
5.7.1. PROMISSORY NOTE. An Option may be exercised by delivery of
the Optionee's full recourse promissory note for any portion or all of
the aggregate exercise price of the Stock as to which the Option is being
exercised. Such note shall (a) bear interest at the lowest rate which
will not result in interest being imputed pursuant to the Internal
Revenue Code, (b) mature four years after the date of exercise and (c) be
on such other terms as determined by the Administrator. Such promissory
note shall be secured by a security interest in the Stock purchased
pursuant to the Option and in such other manner, if any, as the
Administrator shall approve.
5.7.2. DELIVERY OF STOCK. An Option may be exercised by delivery by
the Optionee of Stock already owned by the Optionee for all or part of
the aggregate exercise price of the Stock as to which the Option is being
exercised, so long as (i) the value of such Stock (determined as provided
in Section 6) is equal on the date of exercise to the aggregate exercise
price of the shares of Stock as to which the Option is being exercised,
or such portion thereof as the Optionee is authorized to pay by delivery
of Stock and (ii) such previously owned shares have been held by the
Optionee for at least six months.
5.8. ADJUSTMENTS.
5.8.1. CHANGES IN CAPITAL STRUCTURE. If the Stock is changed by
reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities
other than as a result of a Change of Control, the Administrator shall
make such appropriate adjustments in (i) the number of shares of Stock to
be covered by options granted under Section 5.1.2 hereof, (ii) each
Option outstanding under this Plan, and (iii) the exercise price of each
outstanding Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such adjustment.
Each such adjustment shall be determined by the Administrator in its sole
discretion, which determination shall be final and binding on all
persons. Any new or additional Stock to which an Optionee may be entitled
under this Section 5.8.1 shall be subject to all of the terms and
conditions set forth in Section 5 of this Plan.
5.8.2. CHANGE OF CONTROL. In the event of a Change of Control, all
Options shall vest immediately.
5.9. NO ASSIGNMENT. No right or benefit under, or interest in, the
Plan shall be subject to assignment or transfer (other than by will or the
laws of descent and distribution), and no such right, benefit or interest
shall be subject to attachment or legal process for or against Participant
or his or her beneficiaries, as the case may be. During the life of the
Optionee, an Option shall be exercisable only by the Optionee or, in the
event of disability of the Optionee, by the Optionee's guardian or legal
representative.
5.10. TERMINATION; EXPIRATION OF UNVESTED OPTIONS. Options granted to
an Optionee under this Plan, to the extent such rights have not expired or
been exercised, shall terminate on such Optionee's Termination Date;
provided, however, that an Option may be exercised, to the extent vested and
exercisable on the Termination Date, for a period of thirty (30) days after
such Optionee's Termination Date; and, provided further, that if exercise of
an Option during such thirty (30) day period would subject such Optionee to
liability under Section 16(b) of the Exchange Act, such thirty (30) day
period shall not begin to run until six (6) months from the date of the last
Stock transaction made, indirectly or directly, by such Optionee prior to
such Optionee's Termination Date.
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6. DETERMINATION OF VALUE. For purposes of this Plan, the value of the
Stock shall be 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 sale price on the last preceding
business day upon which trades occurred shall be the fair market value. If the
Stock is not listed on 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.
7. MANNER OF EXERCISE. An Optionee wishing to exercise an Option shall
give written notice to the Company at its principal executive office, to the
attention of the Secretary of the Company, accompanied by an executed Stock
Purchase Agreement and by payment of the Option exercise price in accordance
with Section 5.7. The date the Company receives written notice of an exercise
hereunder accompanied by payment of the Option exercise price will be considered
the date such Option was exercised. Promptly after receipt of such written
notice and payment, the Company shall deliver to the Optionee or such other
person permitted to exercise such Option under Section 5.9, a certificate or
certificates for the requisite number of shares of Stock. The Company shall pay
any stock issue or transfer tax incurred with respect to such exercise and
issuance.
8. RIGHTS.
8.1. RIGHTS AS OPTIONEE. No Eligible Director shall acquire any rights
as an Optionee unless and until an Option Agreement has been duly executed
on behalf of the Company, delivered to the Optionee and executed by the
Optionee.
8.2. RIGHTS AS STOCKHOLDER. No person shall have any rights as a
stockholder of the Company with respect to any Stock subject to an Option
until the date that a stock certificate has been issued and delivered to the
Optionee.
8.3. NO RIGHT TO REELECTION. Nothing contained in the Plan or any
Option Agreement shall be deemed to create any obligation on the part of the
Board to nominate any Director for reelection by the Company's stockholders,
or confer upon any Director the right to remain a member of the Board for
any period of time, or at any particular rate of compensation.
9. REGISTRATION AND RESALE. The Board may, but shall not be required to,
cause the Plan, the Options, and Stock subject to the Plan to be registered
under the Securities Act and under the securities laws of any state. No Option
may be exercised, and the Company shall not be obliged to grant Stock upon
exercise of an Option, unless, in the opinion of counsel for the Company, such
exercise and grant is in compliance with all applicable federal and state
securities laws and the rules and regulations promulgated thereunder. As a
condition to the grant of an Option for the issuance of Stock upon the exercise
of an Option, the Administrator may require that the Optionee agree to comply
with such provisions and federal and state securities laws as may be applicable
to such grant or the issuance of Stock, and that the Optionee delivers 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.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the
Administrator may at any time amend, alter, suspend, or discontinue this Plan,
except to the extent that stockholder approval is required for any amendment or
alteration (a) by Rule 16b-3 or applicable law in order to exempt from
Section 16(b) of the Exchange Act any transaction contemplated by this Plan,
or (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon, or (c) by the rules of NASDAQ pertaining to
the National Market System, if the Company's securities are quoted thereon;
provided, however, no amendment, alteration, suspension or discontinuation
shall be made that would impair the rights of any Optionee under an Option
without such Optionee's consent; and provided further, any provision in this
Plan relating to the eligibility of Directors to participate in this Plan,
the timing of Option grants made under this Plan or the amount of Options
granted to a Director under this Plan shall not be amended, to the extent so
provided by Rule 16b-3, more than once every six months, other
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than to comport with the changes in the Code or the rules thereunder. Subject to
the foregoing, the Administrator shall have the power to make such changes in
the regulations and administrative provisions hereunder, or in any Option (with
the Optionee's consent), as in the opinion of the Administrator may be
appropriate from time to time.
11. 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 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.
13. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board. If stockholder approval is required (a) under the General Rules and
Regulations promulgated under Section 16 of the Exchange Act in order to exempt
any transaction contemplated by this Plan from Section 16(b) of the Exchange Act
or (b) by the rules of the New York Stock Exchange, if the Company's securities
are listed thereon, or (c) by the rules of NASDAQ pertaining to the National
Market System, if the Company's securities are quoted thereon, then this Plan
shall be submitted to the stockholders of the Company for consideration at the
next annual meeting of stockholders. The Administrator may make Options
conditioned on such approval, and any Option so made shall be effective as of
the date of grant, subject only to such approval.
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EXHIBIT 10.2
ROBERT HALF INTERNATIONAL INC.
1989 RESTRICTED STOCK PLAN
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 15, 1996)
1. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
1.1. ADMINISTRATOR means the Board or a committee appointed by the
Board, the composition and size of which shall cause such committee to
satisfy the requirements of Rule 16b-3 of the Exchange Act with respect
to officers and directors.
1.2. BOARD means the Board of Directors of the Company.
1.3. COMPANY means Robert Half International Inc., a Delaware
corporation.
1.4. 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.
1.5. 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 Participant 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.
1.6. 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.
1.7. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
1.8. GRANT DATE means the date on which a Restricted Stock Grant is
granted to an Eligible Employee.
1.9. ISSUE DATE means the date on which shares of Stock subject to a
Restricted Stock Grant are issued or transferred by the Company to the
account of an Eligible Employee who has received such grant.
1.10. OFFER means a tender offer or an exchange offer for the Company's
Stock.
1.11. PARTICIPANT means an individual to whom a Restricted Stock Grant
is granted under the Plan.
1.12. PLAN means this 1989 Restricted Stock Plan.
1.13. RESTRICTED STOCK GRANT means a grant described in Section 8 of
the Plan which is made by the Company and approved by the Administrator
under and pursuant to the Plan.
1.14. SECURITIES ACT means the Securities Act of 1933, as amended.
1.15. STOCK means the Common Stock, $.001 par value, of the Company.
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1.16. SUBSIDIARY means a "subsidiary" corporation as defined in Section
425(f) of the Internal Revenue Code of 1986, as amended.
1.17. VESTING DATE means the last day of the calendar month in which
the annual organizational Board meeting following the annual meeting of the
stockholders of the Company is held, or such other date as shall be
established by the Administrator; provided, however, that the "Vesting Date"
with respect to a particular Restricted Stock Grant shall not include the
last day of the month in which such Restricted Stock Grant is granted.
1.18. VOTING SHARES means the outstanding shares of the Company
entitled to vote for the election of Directors.
1.19. WITHHOLDING TAXES means any applicable federal, state and local
income and other employment taxes which the Company is required to withhold
in connection with the lapse of restrictions on Stock subject to a
Restricted Stock Grant.
2. PURPOSE. The purpose of the Plan is to aid the Company and its
Subsidiaries in attracting, retaining and motivating management employees with
outstanding ability, competence and potential. The Plan provides such employees
with a proprietary interest in the Company's success and progress by granting to
them shares of Stock in accordance with the terms and conditions set forth
below.
3. STOCK SUBJECT TO THE PLAN. A total of 1,200,000 shares of Stock,
subject to adjustment as provided in Section 9 of the Plan, all of which shall
be treasury shares, shall be reserved for issuance under this Plan. If, on or
before termination of the Plan, any shares of Stock shall be reacquired by the
Company pursuant to the termination provisions described in Section 11 of the
Plan or in the instruments evidencing the making of Restricted Stock Grants,
such shares may again be granted under the Plan.
4. ADMINISTRATION. The Plan shall be administered by the Administrator.
Subject to all the applicable provisions of the Plan, the Administrator is
authorized to make Restricted Stock Grants in accordance with the Plan, 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, its shareholders, and all
Participants.
5. 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 granted Restricted Stock Grants under the Plan, the
number of shares of Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Restricted Stock Grant. In
making such 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 Restricted Stock Grants to Eligible Employees subject to differing terms
and conditions.
6. RIGHTS WITH RESPECT TO SHARES OF STOCK. The Administrator shall notify
each Eligible Employee to whom a Restricted Stock Grant has been granted of such
grant. 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 Grant, the Eligible Employee shall be a
Participant, and the Company shall cause to be issued or transferred to the name
of the Participant a certificate or certificates for the number of shares of
Stock granted, subject to the provisions of Section 8.6 hereof. From and after
the Issue Date, the Participant shall have absolute ownership of such shares of
Stock,
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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 Grant.
7. EMPLOYMENT. No grant of a Restricted Stock Grant to a Participant under
the Plan shall affect any right of the Company or any Subsidiary to terminate,
with or without cause, the Participant's employment at any time.
8. TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT. Each Restricted Stock
Grant made under the Plan shall contain the following terms, conditions and
restrictions and such additional terms, conditions and restrictions as may be
determined by the Administrator at the time of grant.
8.1. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Participant's
Continuous Employment with the Company or any Subsidiary shall terminate for
any reason, except as provided in Section 8.3, all the rights of the
Participant to such shares of Stock as to which restrictions have not lapsed
pursuant to this Section or under Sections 8.2, 8.3 or 8.4 hereof shall
immediately terminate; provided, however, that the Administrator, in its
sole discretion, within ninety (90) days of such termination of Continuous
Employment, may notify the Participant in writing that the Participant's
rights in such shares will not terminate and that the Participant shall
continue to be the owner of such shares, subject to such continuing
restrictions as the Administrator may prescribe in such notice.
8.2. LAPSE OF RESTRICTIONS. The restrictions imposed on any Restricted
Stock Grant shall lapse as to twenty-five percent (25%) of the Stock granted
pursuant to such grant on each of first through fourth Vesting Dates which
occur following the related Grant Date of such Restricted Stock Grant.
Notwithstanding the foregoing, the Administrator may accelerate the lapsing
of restrictions on a Restricted Stock Grant, in whole or in part, (i) as
permitted by Section 8.1; (ii) as required by any employment or other
agreement with the Company or any Subsidiary to which a Participant
hereunder is a party; or (iii) under such terms and conditions as the
Administrator deems appropriate.
8.3. TERMINATION OF CONTINUOUS EMPLOYMENT BY REASON OF DEATH OR
DISABILITY. Any provisions of Section 8.1 to the contrary notwithstanding,
if a Participant (i) has been in the Continuous Employment of the Company or
a Subsidiary since the Grant Date of a Restricted Stock Grant and (ii) the
employment of such Participant is terminated as a result of death or
Disability, then, on the date of such termination, the restrictions imposed
on any Restricted Stock Grant shall lapse as to all shares of Stock granted
to such Participant pursuant to such Restricted Stock Grant.
8.4. CHANGE IN CONTROL. In the event of a Change in Control (as
defined in this Section 8.4), all restrictions on any and all Restricted
Stock Grants then outstanding shall immediately lapse. For purposes of this
Plan, a "Change in Control" shall occur in the event of any of the
following:
8.4.1. SCHEDULE 13D OR 13G FILING. 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.
8.4.2. CERTAIN CHANGES IN DIRECTORATE. 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.
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8.4.3. GOING PRIVATE. The Company's stockholders approve a
definitive agreement providing for a transaction in which the Company
will cease to be an independent publicly-owned corporation.
8.4.4. CERTAIN CORPORATE TRANSACTIONS. 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.
8.4.5. TENDER OR EXCHANGE OFFER. 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 8.4.5, Voting Shares held by such person or
group shall be calculated in accordance with the last sentence of Section
8.4.1 hereof.
8.5. AGREEMENT BY PARTICIPANT REGARDING WITHHOLDING TAXES. Each
Participant granted a Restricted Stock Grant shall represent in writing that
such Participant acknowledges that, with respect to each Restricted Stock
Grant held by such Participant, (i) on each Vesting Date, Withholding Taxes
become due with respect to shares of Stock as to which restrictions lapse,
(ii) payment of Withholding Taxes to the Company is the responsibility of
Participant and (iii) payment of such Withholding Taxes may require a
significant cash outlay by Participant. In addition, each Participant
granted a Restricted Stock Grant shall be subject to the following rules:
8.5.1. PAYMENT OF TAXES. Within five (5) business days following
any lapsing of restrictions pursuant to the operation of Sections 8.1,
8.2, 8.3 or 8.4 hereof, the Company shall notify each affected
Participant or, if applicable under Section 8.3, his or her estate, as to
the amount of Withholding Taxes required to be withheld by the Company as
a result of the lapse of restrictions. Within five (5) business days of
receipt of such notice, Participant shall make full payment of
Withholding Taxes to the Company. Such payment may be made in cash or by
check or by reduction in the number of shares deliverable to Participant.
If Withholding Taxes are paid by reduction of the number of shares
deliverable to Participant, such shares shall be valued as of the date
that the restrictions lapsed. In the event that such payment is not made
within the specified time period, to the extent permitted by law the
Company shall have the right to cause such Participant's Withholding
Taxes obligation to be satisfied by reducing the number of shares of
Stock deliverable or by offsetting such Withholding Taxes against amounts
otherwise due from the Company to such Participant. The Company may
instruct its transfer agent to withhold delivery of certificates
evidencing such shares of Stock until Participant's Withholding Taxes
obligation has been satisfied in full.
8.5.2. ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If
any Participant properly elects within thirty (30) days of the Grant
Date, to include in gross income for federal income tax purposes an
amount equal to the fair market value of the shares of Stock on the Grant
Date, such Participant shall pay to the Company in the calendar month of
such Grant Date, or make arrangements satisfactory to the Administrator
to pay to the Company, any Withholding Taxes required to be withheld with
respect to such shares.
8.6. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. Each
certificate evidencing shares of Stock granted pursuant to a Restricted
Stock Grant may bear an appropriate legend referring to the terms,
conditions and restrictions described in the Plan and in the instrument
evidencing the Restricted Stock Grant. In addition, if required under this
Plan or applicable securities laws, the Company may instruct its transfer
agent that shares of Stock evidenced by such 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
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restrictions shall be invalid. Until the restrictions thereon have lapsed
and the related Withholding Taxes obligations have been satisfied, such
certificates will be held in custody by the Company or such bank or other
institution designated by the Administrator.
8.7. NO ASSIGNMENT. Except as specifically provided by law (including
the laws of descent and distribution), 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 Participant or his or her beneficiaries, as the case may be.
8.8. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued
pursuant to a Restricted Stock Grant unless the issuance and delivery of
Stock pursuant thereto shall comply 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.
8.9. REGISTRATION AND RESALE. 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 Participant 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.
8.10. HOLDING PERIOD. Deleted.
8.11. PERFORMANCE CONDITIONS. If so determined by the Administrator,
any grant of Restricted Shares shall be made subject to a Performance
Condition in addition to any other restrictions imposed pursuant to this
Section 8. Such Performance Condition shall operate as specified in this
Section 8.11.
8.11.1 As used in this Section 8.11, the following terms shall have
the indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the
Performance Period, 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.
EPS RATIO means the result obtained by dividing Actual EPS by
Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Unvested Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
PERFORMANCE PERIOD means the period of service to which the
Performance Condition relates.
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TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to a Performance Condition.
UNVESTED RESTRICTED STOCK AWARD means the number of shares of a
Restricted Stock Award made subject to a Performance Condition with
respect to which the restrictions otherwise imposed by this Section 8
have not lapsed pursuant to Section 8.2, 8.3 or 8.4.
8.11.2 A Restricted Stock Award shall be subject to a Performance
Condition only if (a) the Administrator makes such a determination on the
Grant Date or (b) the Participant consents to the Performance Condition.
8.11.3 If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall establish the Performance Period and
Target EPS for such award no later than the time permitted by section
162(m) of the Internal Revenue Code.
8.11.4 After the public release by the Company of its unaudited
results for the last fiscal quarter of the Performance Period, the Chief
Financial Officer shall, with respect to each Restricted Stock Award made
subject to a Performance Condition, (a) calculate the Actual EPS, (b)
determine the Multiplier, (c) calculate the Final Restricted Stock Award,
and (d) deliver such calculation to the Administrator.
8.11.5 The Administrator shall review the information submitted by
the Chief Financial Officer and certify, in writing, each Final
Restricted Stock Award.
8.11.6 To the extent that a Final Restricted Stock Award is less
than the Unvested Restricted Stock Award, the number of shares of the
Unvested Restricted Stock Award representing the difference shall be
forfeited by the Holder. The Final Restricted Stock Award shall bear the
same vesting schedule as the Unvested Restricted Stock Award, and on each
Vesting Date the percentage of the Final Restricted Stock Award that
vests shall be the same as the percentage of the Unvested Restricted
Stock Award that would have vested had no shares been forfeited as a
result of the Performance Condition.
8.11.7 If all or a portion of an Unvested Restricted Stock Award
made subject to a Performance Condition shall have the restrictions
otherwise imposed by this Section 8 removed by operation of Section 8.3
or 8.4, then the Performance Condition shall be cancelled and none of
such shares shall be subject to reduction or forfeiture as provided by
the Performance Condition. Such shares shall be released to the
Participant in accordance with the terms of this plan relating to shares
with respect to which no restrictions remain.
8.11.8 If all or a portion of an Unvested Restricted Stock Award
made subject to a Performance Condition shall have the restrictions
otherwise imposed by this Section 8 removed for any reason other than by
operation of Section 8.3 or 8.4, no shares shall be released to the
Participant until after the Certification Date. No such removal of
restrictions prior to the Certification Date shall in any way be deemed a
satisfaction, waiver or cancellation of the Performance Condition, and
such Unvested Restricted Stock Award shall remain subject to reduction
and forfeiture as provided by the Performance Condition.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the Stock is changed by
reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities, other
than as a result of a Change of Control, appropriate adjustments shall be made
in the number and class of shares of Stock subject to this Plan and each
Restricted Stock Grant made pursuant to this Plan; provided, however, that if
fractional shares become due to any Participant as a result of any such
adjustment, the Company may, at its option, pay cash in lieu thereof. Each such
adjustment shall be determined by the Administrator in its sole discretion,
which determination shall be final and binding on all persons. Any new or
additional Stock to which a Participant may be entitled under this Section 9
shall be subject to all the terms and conditions set forth in Section 8 of this
Plan.
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10. DURATION OF PLAN. Unless sooner terminated, the Plan shall remain in
effect for a period of ten years from its effective date. Termination of the
Plan shall not affect any Restricted Stock Grants previously granted pursuant
thereto, which shall remain in effect until their restrictions shall have
lapsed, all in accordance with their terms.
11. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the
Administrator may at any time amend, alter, suspend, or discontinue this
Plan, except to the extent that stockholder approval is required for any
amendment or alteration (a) by Rule 16b-3 or applicable law in order to
exempt from Section 16(b) of the Exchange Act any transaction contemplated by
this Plan, (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon, or (c) by the rules of National Association of
Securities Dealers automated quotation system pertaining to the National
Market System, if the Company's securities are quoted thereon; provided,
however, no amendment, alteration, suspension or discontinuation shall be
made that would impair the rights of any Participant under a Restricted Stock
Grant without such Participant's consent. Subject to the foregoing, the
Administrator shall have the power to make such changes in the regulations
and administrative provisions hereunder, or in any Restricted Stock Grant
(with the Participant's consent), as in the opinion of the Administrator may
be appropriate from time to time.
12. 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 person.
13. 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.
14. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board. If stockholder approval is required (a) under the General Rules and
Regulations promulgated under Section 16 of the Exchange Act in order to exempt
any transaction contemplated by this Plan from Section 16(b) of the Exchange Act
or (b) by the rules of the New York Stock Exchange, if the Company's securities
are listed thereon, or (c) by the rules of National Association of Securities
Dealers automated quotation system pertaining to the National Market System, if
the Company's securities are quoted thereon, then this Plan shall be submitted
to the stockholders of the Company for consideration at the next annual meeting
of stockholders. The Administrator may make Restricted Stock Grants conditioned
on such approval, and any Restricted Stock Grant so made shall be effective as
of the date of grant, subject only to such approval.
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EXHIBIT 10.3
ROBERT HALF INTERNATIONAL INC.
STOCKPLUS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 1, 1996)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
StockPlus Plan (the "Plan") are: (a) to improve individual employee performance
by providing long-term incentives and rewards to employees of the Company, (b)
to assist the Company in attracting, retaining and motivating employees with
experience and ability, and (c) to associate the interests of such employees
with those of RHII's shareholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "COMMON STOCK" or "STOCK" means RHII Common Stock, par value $.001
per share.
(b) "ADMINISTRATOR" means the Board of Directors of RHII or a
committee of the Board, the composition and the size of which shall cause
such committee to satisfy the requirements of Rule 16b-3 of the Exchange
Act with respect to officers and directors.
(c) "COMPANY" means Robert Half International Inc., its divisions and
direct and indirect subsidiaries.
(d) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(e) "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.
(f) "GRANT DATE" means the date an Option is granted under the Plan.
(g) "OPTION" or "STOCK OPTION" means a right granted under the Plan to
an Optionee to purchase shares of RHII Common Stock at a fixed price for a
specified period of time.
(h) "OPTION PRICE" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(i) "OPTIONEE" means an eligible employee of the Company who has
received a Stock Option granted under the Plan.
(j) "RHII" means Robert Half International Inc., a Delaware
corporation.
3. 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 to be granted Options
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under the Plan, determine the size and applicable terms and conditions of grants
to be made to such employees, determine the time when Options will be granted
and authorize grants to eligible employees. Any guidelines that may be adopted
from time to time by the Administrator shall be advisory only and shall not be
binding upon the Administrator.
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 Options granted 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.
4. STOCK AVAILABLE FOR OPTIONS. The shares that may be delivered or
purchased under the Plan shall not exceed an aggregate of 3,790,000 shares of
Common Stock, subject to any adjustments which may be made pursuant to Section
11 hereof. Shares of Stock used for purposes of the Plan may be either shares of
authorized but unissued Common Stock or treasury shares or both. Stock covered
by Options which have terminated or expired prior to exercise or have been
surrendered or cancelled shall be available for further option hereunder.
5. ELIGIBILITY. All those employees of the Company as shall be determined
from time to time by the Administrator shall be eligible to participate in the
Plan, provided, however, that no employee may be granted Options in the
aggregate which would result in that employee receiving more than 10% of the
maximum number of shares available for issuance under the Plan. However, no
individual who is subject to Section 16 of the Exchange Act with respect to
transactions in the Company's securities may be granted an option subsequent to
November 1, 1995.
6. TERMS AND CONDITIONS OF 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 DATES. Options granted hereunder shall have a
term of no longer than ten years from the Grant Date. No Option may be
granted after the tenth anniversary of the date of adoption of this Plan. A
grant of Options may become exercisable in installments; provided, however,
that no Option shall become exercisable until six months following the Grant
Date of such Option. However, Stock Options must be exercised for full
shares of Common Stock. To the extent that Stock Options are not exercised
when they become initially exercisable, they shall be carried forward and be
exercisable until the expiration of the term of such Stock Options, subject
to the provisions of Section 6(e) hereof. An option granted after November
1, 1995, to an eligible employee pursuant to this Plan shall automatically
expire if, within six months after its grant, the recipient of such option
becomes subject to Section 16 of the Exchange Act with respect to
transactions in the Company's securities.
(c) EXERCISE OF OPTION. To exercise an Option, the holder thereof
shall give notice of his or her 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 effecting such exercises.
No fractional shares shall be issued as a result of exercising an Option. An
Option is exercisable during an Optionee's lifetime only by the Optionee or
Optionee's guardian or legal representative.
(d) 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 Optionee
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.
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In addition, in order to enable the Company to meet any applicable foreign,
federal (including FICA), state and local withholding tax requirements, an
Optionee shall also be required to pay the amount of tax to be withheld. No
share of stock will be delivered to any Optionee until all such amounts have
been paid. In the event that withholding taxes are not paid within the
specified time period, 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 reducing the number of shares of stock deliverable or by
offsetting such withholding taxes against amounts otherwise due from the
Company to the Optionee. If withholding taxes are paid by reduction of the
number of shares deliverable to Optionee, such shares shall be valued at the
Fair Market Value as of the date of exercise.
(e) EFFECT OF TERMINATION OF EMPLOYMENT. All Options then held by the
Optionee which are exercisable at the date of termination shall continue to
be exercisable by the Optionee, or, if applicable, Optionee's estate, until
the earlier of 30 days after such date or the expiration of such Options in
accordance with their terms. All Options which are not exercisable at such
date shall automatically terminate and lapse, unless the Administrator shall
determine otherwise. Notwithstanding the foregoing, if exercise of an Option
during the 30-day period described in the previous sentence would subject
the Optionee 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
Optionee prior to termination.
(f) MISCONDUCT. In the event that the Administrator determines in good
faith that an Optionee has (i) used for profit, or materially harmed the
Company by disclosing to unauthorized persons, confidential information or
trade secrets of the Company, (ii) materially breached any contract with, or
materially violated any fiduciary obligation to, the Company, or (iii)
engaged in unlawful trading in the securities of RHII or of another company
based on nonpublic information gained as a result of that Optionee's
employment with the Company, then, effective as of the date notice of such
misconduct is given by the Administrator to the Optionee, that Optionee
shall forfeit all rights to any unexercised Options granted under the Plan
and all of that Optionee's outstanding Options shall automatically terminate
and lapse, unless the Administrator shall determine otherwise.
(g) NONTRANSFERABILITY OF OPTIONS. During an Optionee's lifetime, his
or her Options shall not be transferrable and shall only be exercisable by
the Optionee and any purported transfer shall be null and void. Options are
not transferable except by will or by the laws of descent and distribution.
7. 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 the terms and conditions
of outstanding Options, provided, however, that (i) no such amendment shall be
adverse to the holders of the Options, (ii) no such amendment shall extend the
term of an Option, and (iii) the amended terms of the Option would be permitted
under this Plan.
8. FOREIGN EMPLOYEES. Without amending the Plan, the Administrator may
grant Options to eligible employees who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Administrator be necessary or desirable to foster and promote achievement of
the purposes of the Plan, and, in furtherance of such purposes the Administrator
may make such modifications, amendments, procedures, subplans and the like as
may be necessary or advisable to comply with provisions of laws in other
countries in which the Company operates or has employees.
9. REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Option shall be
subject to the requirement that if at any time the Administrator shall determine
that the registration, listing or qualification of the shares covered thereby
upon any securities exchange or under any foreign, federal, state or local law,
or the consent or approval of any governmental regulatory body, is necessary or
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desirable as a condition of, or in connection with, the granting of such Option
or the purchase of shares thereunder, no such Option may be exercised unless and
until such registration, listing, qualification, consent or approval shall have
been effected or obtained free of any condition not acceptable to the
Administrator. Any person exercising an Option shall make such representations
and agreements and furnish such information as the Administrator may request to
assure compliance with the foregoing or any other applicable legal requirements.
RHII shall use its reasonable best efforts to cause shares issued hereunder to
be registered under the Securities Act of 1933, as amended.
10. BUY OUT OF OPTION GAINS. The Administrator shall have the right to
elect, in its sole discretion and without the consent of the holder thereof
(subject to the last sentence of this paragraph), to cancel the exercisable
portion of any Option and pay to the Optionee the excess of the Fair Market
Value of the shares of Common Stock covered by such cancelled portion of the
Option over the Option Price of such cancelled portion of the Option at the date
the Administrator provides written notice (the "Buy Out Notice") of its
intention to exercise such right. Buy outs pursuant to this provision shall be
effected by RHII as promptly as possible after the date of the Buy Out Notice.
Payments of buy out amounts may be made in cash, in shares of Common Stock, or
partly in cash and partly in Common Stock, as the Administrator deems advisable.
To the extent payment is made in shares of Common Stock, the number of shares
shall be determined by dividing the amount of the payment to be made by the Fair
Market Value of a share of Common Stock at the date of the Buy Out Notice. In no
event shall RHII be required to deliver a fractional share of Common Stock in
satisfaction of this buy out provision. Payments of such buy out amounts shall
be made net of any applicable foreign, federal (including FICA), state and local
withholding taxes. Notwithstanding the foregoing, no buy out may be effected (a)
until at least six months after the Grant Date of the subject option, and (b)
without the consent of the Optionee if the Optionee is generally required to
file reports pursuant to Section 16(a) of the Exchange Act with respect to his
transactions in the Common Stock.
11. 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 or exchange
of shares or other similar corporate change, such equitable adjustments may be
made in the Plan and the Options granted hereunder as the Administrator
determines are necessary or appropriate, including, if necessary, an adjustment
in the number of shares and prices per share applicable to Options then
outstanding and in the number of shares which are reserved for issuance under
the Plan. Any such adjustment shall be conclusive and binding for all purposes
of the Plan.
12. NO RIGHTS TO OPTIONS OR EMPLOYMENT. No employee or other person shall
have any claim or right to be granted an Option under the Plan. Receipt of an
Option under the Plan shall not give an employee any rights to receive any other
grant under the Plan. An Optionee shall have no rights to or interest in any
Option except as set forth herein. 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.
13. RIGHTS AS SHAREHOLDER. An Optionee 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 Optionee.
14. OTHER ACTIONS. This Plan shall not restrict the authority of the
Administrator or of RHII, for proper corporate purposes, to grant or assume
stock options, other than under the Plan, to or with respect to any employee or
other person.
15. COSTS AND EXPENSES. Except as provided in Section 6(d) hereof with
respect to taxes, the costs and expenses of administering the Plan shall be
borne by RHII and shall not be charged to any grant nor to any employee
receiving a grant.
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16. 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, RHII 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.
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. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board of Directors of RHII. If stockholder approval is required (a) under the
General Rules and Regulations promulgated under Section 16 of the Exchange Act
in order to exempt any transaction contemplated by this Plan from Section 16(b)
of the Exchange Act, (b) by the rules of the New York Stock Exchange, if RHII
Common Stock is listed thereon, or (c) by the rules of NASDAQ pertaining to the
National Market System, if RHII Common Stock is quoted thereon, then this Plan
shall be submitted to the stockholders of RHII for consideration at the next
annual meeting of stockholders. The Administrator may make Options conditioned
on such approval, and any Option so made shall be effective as of the date of
grant.
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EXHIBIT 10.4
ROBERT HALF INTERNATIONAL INC.
1993 INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 15, 1996)
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 either the Board of Directors or a committee
of the Board of Directors of the Company, the composition and the size of
which shall cause such committee to satisfy the requirements of Rule 16b-3
of the Exchange Act with respect to officers and 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 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 $.001 per share.
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(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.
(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.
(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.
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(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
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 or Restricted Stock are granted to any one individual may not exceed 75%
of the number of shares of Stock available for Grants during 1994, subject to
adjustment pursuant to Section 12 hereof.
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
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<PAGE>
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.
(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, unless the
Administrator determines otherwise at the time of grant, payment of the
Option Price and of Minimum Withholding Taxes may be made 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
domestic relations order or under such other circumstances as the
Administrator may determine.
6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under the
Plan shall contain the following terms, conditions and restrictions and such
additional 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.
4
<PAGE>
(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 Vesting 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 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.
(h) PERFORMANCE CONDITIONS. If so determined by the Administrator, any
grant of Restricted Shares shall be made subject to a Performance Condition
in addition to any vesting requirements imposed upon such grant. Such
Performance Condition shall operate as specified in this paragraph (h).
(1) As used in this paragraph (h), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
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.
EPS RATIO means the result obtained by dividing Preliminary EPS
by Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
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<PAGE>
MEASUREMENT YEAR means (a) in the case of a grant made in the
first fiscal quarter of a fiscal year, that fiscal year or (b) in the
case of a grant made in the second, third or fourth quarters of a
fiscal year, the subsequent fiscal year.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
NINE-MONTH PERIOD means the first three fiscal quarters of the
Measurement Year.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to a Performance Condition.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month
Period.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to a Performance Condition.
(2) A Restricted Stock Award shall be subject to a Performance
Condition only if the Administrator makes such a determination on the
Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall, not later than the end of the second
calendar month of the Measurement Year, determine the Target EPS for such
award.
(4) After the public release by the Company of its unaudited results
for the third fiscal quarter of the Measurement Year, the Chief Financial
Officer shall, with respect to each Restricted Stock Award made subject
to a Performance Condition, (a) calculate the Preliminary EPS, (b)
determine the Multiplier, (c) calculate the Final Restricted Stock Award,
and (d) deliver such calculation to the Administrator.
(5) The Administrator shall, prior to the end of the Measurement
Year, review the information submitted by the Chief Financial Officer and
certify, in writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each Vesting Date
the percentage of the Final Restricted Stock Award that vests shall be
the same as the percentage of the Original Restricted Stock Award that
would have vested had no shares been forfeited as a result of the
performance condition.
(7) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date by
reason of death, Disability or a Change in Control, then the Performance
Condition shall be cancelled and none of such shares shall be subject to
reduction or forfeiture as provided by the Performance Condition. Such
shares shall be released to Holder in accordance with the terms of this
plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date for any
reason other than death, Disability or a Change in Control, no shares
shall be released to the Holder until after the Certification Date. No
such vesting prior to the Certification Date shall in any way be deemed a
6
<PAGE>
satisfaction, waiver or cancellation of the Performance Condition, and
such Restricted Stock Award shall remain subject to reduction and
forfeiture as provided by the Performance Condition.
(i) ALTERNATIVE PERFORMANCE CONDITIONS. If so determined by the
Administrator, any grant of Restricted Shares shall be made subject to an
Alternative Performance Condition in addition to any vesting requirements
imposed upon such grant. Such Alternative Performance Condition shall
operate as specified in this paragraph (i).
(1) As used in this paragraph (i), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the
Performance Period, 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.
EPS RATIO means the result obtained by dividing Actual EPS by
Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to an Alternative Performance Condition.
PERFORMANCE PERIOD means the period of service to which the
Alternative Performance Condition relates.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to an Alternative Performance Condition.
(2) A Restricted Stock Award shall be subject to an Alternative
Performance Condition only if the Administrator makes such a
determination on the Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to an Alternative
Performance Condition, the Administrator shall establish the Performance
Period and Target EPS for such award no later than the time permitted by
section 162(m) of the Internal Revenue Code.
(4) After the public release by the Company of its unaudited results
for the last fiscal quarter of the Performance Period, the Chief
Financial Officer shall, with respect to each Restricted Stock Award made
subject to an Alternative Performance Condition, (a) calculate the Actual
EPS, (b) determine the Multiplier, (c) calculate the Final Restricted
Stock Award, and (d) deliver such calculation to the Administrator.
(5) The Administrator shall review the information submitted by the
Chief Financial Officer and certify, in writing, each Final Restricted
Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each
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<PAGE>
Vesting Date the percentage of the Final Restricted Stock Award that
vests shall be the same as the percentage of the Original Restricted
Stock Award that would have vested had no shares been forfeited as a
result of the Alternative Performance Condition.
(7) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date by reason of death, Disability or a Change in Control,
then the Alternative Performance Condition shall be cancelled and none of
such shares shall be subject to reduction or forfeiture as provided by
the Alternative Performance Condition. Such shares shall be released to
Holder in accordance with the terms of this plan relating to vested
shares.
(8) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date for any reason other than death, Disability or a
Change in Control, no shares shall be released to the Holder until after
the Certification Date. No such vesting prior to the Certification Date
shall in any way be deemed a satisfaction, waiver or cancellation of the
Alternative Performance Condition, and such Restricted Stock Award shall
remain subject to reduction and forfeiture as provided by the Alternative
Performance Condition.
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"). 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 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
8
<PAGE>
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,
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.
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
9
<PAGE>
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 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.
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<PAGE>
1985 STOCK OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(As Amended and Restated Effective August 1, 1996)
1. PURPOSE OF THE PLAN
The purpose of the 1985 Stock Option Plan (the "Plan") of Robert
Half International Inc. (the "Company") are to:
(a) Furnish incentive to individuals chosen to receive options
because they are considered capable of responding by improving operations and
increasing profits;
(b) Encourage selected employees to accept or continue employment
with the Company or its Affiliates; and
(c) Increase the interest of selected employees in the Company's
welfare through their participation in the growth in value of the common
stock, $0.001 par value, of the Company ("Common Stock").
To accomplish the foregoing objectives, this Plan provides a means
whereby employees may receive options to purchase Commons Stock, stock
appreciation rights described in Section 8 ("SARs"), and limited stock
appreciation rights as described in Section 9 ("Limited Rights"). Options
granted under this Plan ("Options") will be either nonqualified options
("NQOs") subject to federal income taxation upon exercise or incentive stock
options ("ISOs") not subject to immediate federal income taxation upon
exercise.
2. ELIGIBLE PERSONS
Every person who at the date of grant is an employee of the Company
or of any Affiliate of the Company is eligible to receive NQOs, ISOs, SARs,
or Limited Rights under this Plan; provided, however, that an ISO may not be
granted under this Plan to any person who owns, directly or indirectly, stock
of the
<PAGE>
Company constituting more than ten percent of the total combined voting power
of the Company's outstanding stock, or the stock of any Affiliate of the
Company, unless the exercise price of the ISO at the time the option is
granted is at least 110 percent of the fair market value of the stock subject
to the option, and the option is exercisable for no more than five years
after the date of the grant, as set forth in Section 6.2. The term
"Affiliate," as used in this Plan, means a parent or subsidiary corporation,
as defined in the applicable provisions (currently Section 425) of the
Internal Revenue Code of 1986, as amended (the "Code"). The term "employee"
shall have the meaning ascribed for purposes of Section 3401(c) of the Code
and the Treasury Regulations promulgated thereunder and shall include an
officer or a director who is also an employee.
3. STOCK SUBJECT TO THIS PLAN
The total number of shares of stock that may be (i) issued upon the
exercise of Options and (ii) covered by options cancelled or surrendered upon
the exercise of SARs or Limited Rights, is 8,400,000 shares of Common Stock.
The shares covered by the portion of any grant that expires unexercised under
this Plan shall become available again for grants under this Plan. All shares
issued under this Plan or covered by options surrendered upon the exercise of
SARs or Limited Rights, however, shall be counted against the 8,400,000 share
limitation. The number of shares reserved for purchase under this Plan or
covered by options that may be cancelled or surrendered upon the exercise of
SARs or Limited Rights is subject to adjustment in accordance with the
provisions for adjustment in this Plan.
4. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the
Company (the "Board") or by a committee appointed by the Board which shall
not have less than two Board members (in either case, the "Administrator").
No Option, SAR, or Limited Right shall be granted to a director of the
Company except (i) by the Board when a majority of the members of the Board,
and a majority of the directors acting in the matter, are disinterested
persons, or (ii) by the Administrator when the Administrator is composed of
three or more persons having full authority to act in the matter and each
member of the Administrator is a disinterested person. No Option, SAR, or
Limited Rights shall be granted to an officer of the Company
<PAGE>
except (i) by the Board, or (ii) by the Administrator when the Administrator
is composed solely of three or more directors, or is composed of three or
more persons having full authority to act in the matter and each member of
the Administrator is a disinterested person. "Disinterested person," for
this purpose, shall have the same meaning as in Rule 16b-3 or any successor
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Administrator may delegate nondiscretionary
administrative duties to such employees of the Company as it deems proper.
Subject to the provisions of this Plan, the Administrator shall have the
authority to select the persons to receive Options, SARs, or Limited Rights
under this Plan, to fix the number of shares that each optionee may purchase
or that are subject to a SAR or Limited Right, to set the terms and
conditions of each Option (including whether each Option should be a NQO or
an ISO), SAR, and Limited Right, and to determine all other matters relating
to this Plan. No member of the Administrator shall be liable for any act or
omission on such member's own part, including but not limited to the exercise
of any power or discretion given to such member under this Plan, except for
those acts or omissions resulting from such member's own gross negligence or
willful misconduct. All questions of interpretation, implementation, and
application of this Plan shall be determined by the Administrator. Such
determinations shall be final and binding on all persons.
5. GRANTING OF RIGHTS
5.1 TEN YEAR LIMITATION. No Options, SARs, or Limited Rights
shall be granted under this Plan after ten years from the date of adoption of
this Plan by the Board of Directors.
5.2 WRITTEN AGREEMENT; EFFECT. Each Option, SAR, or Limited Right
shall be evidenced by a written agreement, in form satisfactory to the
Company, executed by the Company and the person to whom such Option, SAR, or
Limited Right is granted. If the agreement relates to an ISO or NQO, the
agreement shall specify whether each option it evidences is a NQO or an ISO.
SARs or Limited Rights may be included in the stock option agreement or may
be evidenced by a separate written agreement satisfactory to the Company,
executed by the Company and the person to whom such SAR or Limited Right is
granted. Failure of the grantee to execute an agreement shall not void or
invalidate the grant of an Option, SAR, or Limited Right; the Option, SAR or
Limited Right maybe not be exercised, however, until the
<PAGE>
agreement is executed.
5.3 ANNUAL $100,000 LIMITATION. In no event shall an ISO be
granted prior to January 1, 1987 pursuant to the Plan which would cause the
grantee to be in receipt during any calendar year of ISOs covering Common
Stock of the Company having an aggregate fair market value, determined for
each Option as of the grant date, in excess of $100,000 (plus any unused
limit carryover to such year as permitted by applicable provisions of the
Code, currently set forth in Section 422A(d)(4) of the Code). The rule set
forth in the preceding sentence shall not apply to ISOs granted on or after
January 1, 1987 pursuant to the Plan ("Post-86 ISO"); the aggregate fair
market value (determined at the time a Post-86 ISO is granted) of the stock
with respect to which all Post-86 ISOs become exercisable for the first time
by the optionee ("vest") during any calendar year (under all incentive stock
option plans of the Company and its affiliates) shall not exceed $100,000.
In applying the preceding sentence, Post-86 ISOs having the lowest exercise
price shall vest before Post-ISOs with higher exercise prices, regardless of
the grant date, unless the option agreements, or the Administrator,
specifically provide a different order of vesting.
5.4 ADVANCE APPROVALS. The Administrator may approve the grant of
Options, SARs, or Limited Rights under this Plan to persons who are expected
to become employees of the Company, but are not employees at the date of
approval. In such cases, the Option, SAR, or Limited Right shall be deemed
granted (and the exercise price determined with reference to the fair market
value of the underlying stock), without further approval, on the date the
grantee becomes an employee and must satisfy all requirements of this Plan
for Options, SARs or Limited Rights granted on that date.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be designated as an ISO or a NQO and shall be
subject to the terms and conditions set forth in Section 6.1. NQOs shall be
also subject to the terms and conditions set forth in Section 6.2, but not
those set forth in Section 6.3. ISOs shall also be subject to the terms and
conditions set forth in Section 6.3, but not those set forth in Section 6.2.
6.1 TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT. All
Options shall be subject to the following terms and
<PAGE>
conditions:
6.1.1 CHANGES IN CAPITAL STRUCTURE. Subject to Section
6.1.2, if the stock of the Company is changed by reason of a stock split,
reverse stock split, stock dividend, or recapitalization, or converted into
or exchanged for other securities as a result of a merger, consolidation or
reorganization, appropriate adjustments shall be made in (A) the number and
class of shares of stock subject to this Plan and each Option outstanding
under this Plan, and (B) the exercise price of each outstanding Option;
provided, however, that the Company shall not be required to issue fractional
shares as a result of any such adjustment. Each such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be final and binding on all persons.
6.1.2 CORPORATE TRANSACTIONS. New option rights may be
substituted for the Options granted under this Plan, or the Company's
obligations as to Options outstanding under this Plan may be assumed, by an
employer corporation other than the Company, or by a parent or subsidiary of
such employer corporation, in connection with any merger, consolidation,
acquisition, separation, reorganization, liquidation or like occurrence in
which the Company is involved, in such manner that the then outstanding
Options which are ISOs will continue to be "incentive stock options" within
the meaning of Section 422A of the Code to the full extent permitted thereby.
Notwithstanding the foregoing or the provisions of Section 6.1.1, if such
employer corporation, or parent or subsidiary of such employer corporation,
does not substitute new option rights for, and substantially equivalent to,
the Options granted hereunder, or assume the Options granted hereunder, or if
the Board determines, in its sole discretion, that Options outstanding under
this Plan should not then continue to be outstanding, the Options granted
hereunder shall terminate (A) upon dissolution or liquidation of the Company,
or similar occurrence, or (B) upon any merger, consolidation, acquisition,
separation, or similar occurrence, where the Company will not in economic
substance be the surviving corporation; provided, however, that each optionee
shall be mailed notice at least 15 days prior to such dissolution,
liquidation, merger, consolidation, acquisition, separation, or similar
occurrence, and shall have at least 10 days after the mailing of such notice
to exercise any unexpired option rights granted hereunder to the extent such
Options are then exercisable.
<PAGE>
6.1.3 TIME OF OPTION EXERCISE. Subject to Section 6.3.3,
Options shall be immediately exercisable, and shall be exercisable in whole
or in part.
6.1.4 OPTION GRANT DATE. Except in the case of advance
approvals described in Section 5.4, the date of grant of an Option under this
Plan shall be the date as of which the Administrator approves the grant.
6.1.5 NONASSIGNABILITY OF OPTION RIGHTS. No Option shall
be assignable or otherwise transferable by the optionee except by will or by
the laws of descent and distribution. During the life of the optionee, an
Option shall be exercisable only by the optionee or the optionee's guardian
or legal representative in the event of disability of the optionee.
6.1.6 PAYMENT. Except as provided below, payment in full,
in cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment
shall constitute general funds of the Company. At the time an Option is
granted or exercised the Administrator, in the exercise of its absolute
discretion, may authorize any one or more of the following additional methods
of payment:
(A) Acceptance of the optionee's full recourse promissory
note for the aggregate exercise price of the shares as to which the Option is
being exercised, payable on such terms and bearing such interest rate as
determined by the Administrator, which promissory note may be either secured
or unsecured in such manner as the Administrator shall approve (including,
without limitation, by a security interest in the shares of the Company);
(B) Delivery by the optionee of Common Stock already owned by
the optionee for all or part of the aggregate exercise price of the shares as
to which the Option is being exercised, provided the value (determined as set
forth in Section 6.3.1) of such Common Stock is equal on the date of exercise
to the aggregate exercise price of the shares as to which the Option is being
exercised, or such portion thereof as the optionee is authorized to pay by
delivery of such stock; provided, however, that if an optionee has exercised
any portion of any Option granted by the Company by delivery of Common Stock,
the optionee may not, within six months following such exercise, exercise any
Option granted under this Plan by delivery of Common Stock; and
<PAGE>
(C) Any other property other than cash, so long as such
property constitutes valid consideration under applicable law for the shares
as to which the Option is being exercised and is surrendered in good form for
transfer.
6.1.7 TERMINATION OF EMPLOYMENT. Option rights granted to
an optionee under this Plan, to the extent such rights have not then expired
or been exercised, shall terminate (i) three months, in the case of an
optionee who immediately prior to Employment Termination is not an officer or
director of the Company and with respect to an ISO granted to any optionee,
and (ii) seven months, in the case of an optionee who immediately prior to
Employment Termination is an officer or director of the Company with respect
to any NQO granted to any such optionee, after the optionee ceases, for any
reason and with or without cause, to be an employee of the Company or any
Affiliate of the Company (in either case, "Employment Termination"), and
shall not be exercisable on or after said date, except that if the Employment
Termination is due to the disability or death of the optionee, the optionee,
or the optionee's personal representative or any other person who acquires
the option rights from the optionee by will or the applicable laws of descent
and distribution, may within twelve months after the Employment Termination,
exercise the rights to the extent they were exercisable on the date of the
Employment Termination. A transfer of an optionee from the Company to BF
Enterprises, Inc. ("BFE") shall not be deemed an Employment Termination, but
rather an Employment Termination with respect to such optionee shall be
deemed for all purposes under this Plan to occur upon termination, for any
reason and with or without cause, of such optionee's employment with BFE or
any Affiliate of BFE; and the options held by such optionee shall expire in
accordance with this Section three months after such Employment Termination,
unless at the time thereof such Optionee is an officer or director of the
Company, in which case such options shall expire seven months after such
Employment Termination; and provided, further that an Employment Termination
shall not be deemed to occur with respect to such optionee if, in the
determination of the Board of Directors, it shall be in the best interests of
the Company to have such optionee's employment be deemed to continue for so
long as such optionee remains an officer, director or consultant of BFE.
6.1.8 REPURCHASE OF STOCK. At the option of the
Administrator, the stock to be delivered pursuant to the
<PAGE>
exercise of any Option may be subject to a right of repurchase in favor of
the Company with respect to any employee whose employment with the Company is
terminated. Such right of repurchase shall be at the Option exercise price
and shall expire at such times as may be set by the Administrator in the
exercise of the Administrator's discretion, which times may include a Change
in Control as defined in Section 8.1. Unless otherwise established by the
Administrator with respect to any individual or group, the right of
repurchase shall expire with respect to 20% of the shares subject to the
Option on the grant date (which date shall constitute the "Vesting Base Date"
unless the Administrator otherwise determines) and with respect to an
additional 20% of such shares on each of the four anniversary dates next
following the grant date. The Company may, at any time before or following
acquisition of shares by such employee pursuant to the Plan, waive in whole
or in part the Company's right of repurchase as set forth in the stock
purchase agreement executed by an employee with respect to shares acquired by
such employee.
6.1.9 WITHHOLDING AND EMPLOYMENT TAXES. At the time of
exercise of an Option (or, as the case may be, a SAR or a Limited Right), the
optionee shall remit to the Company in cash all applicable federal, state and
local withholding and employment taxes.
(a) The Administrator may, in the exercise of the
Administrator's sole discretion, permit an optionee to pay some or all of
such taxes by means of a promissory note on such terms as the Administrator
deems appropriate.
(b) If and to the extent authorized by the Administrator in
its sole discretion, an optionee may make an election, by means of a form of
election to be prescribed by the Administrator, to have shares of Common
Stock which are acquired upon exercise of the Option withheld by the Company
or to tender other shares of Common Stock or other securities of the Company
owned by the optionee to the Company at the time the amount of such taxes is
determined to pay the amount of such tax obligations.
6.1.10 OTHER PROVISIONS. Each Option may contain such
other terms, provisions, and conditions not inconsistent with this Plan as
may be determined by the Administrator, and each ISO granted under this Plan
shall include
<PAGE>
such provisions and conditions as are necessary to qualify the option as an
"incentive stock option" within the meaning of Section 422A of the Code.
6.2 TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT. Options
are granted under this Plan which are designated as NQOs shall be subject to
the following terms and conditions:
6.2.1 EXERCISE PRICE. The exercise price of a NQO shall
be determined by the Administrator, but shall not be less than 85% of the
Fair Market Value per share on the day of the grant.
6.2.2 OPTION TERM. Each NQO granted under this Plan shall
expire ten years and two days from the date of its grant or such earlier date
as may be set by the Administrator on the date of its grant.
6.2.3 WITHHOLDING AND EMPLOYMENT TAXES. At the time of
exercise of an NQO, the optionee shall remit to the Company in cash all
applicable federal and state withholding and employment taxes. The
Administrator may, in the exercise of the Administrator's discretion, permit
an optionee to pay some or all of such taxes by means of a promissory note on
such terms as the Administrator deems appropriate.
6.3 TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 EXERCISE PRICE. The exercise price of an ISO, which
shall be approved by the Board of Directors, shall be determined in
accordance with the applicable provisions of the Code and shall in no event
be less than the fair market value (determined as described in this Section
6.3.1) of the stock covered by the ISO at the time the ISO is granted, except
that the exercise price of an ISO granted to any person who owns, directly or
indirectly, (or is treated as owning by reason of attribution rules,
currently set forth in Code Section 425) stock of the Company constituting
more than ten percent of the total combined voting power of the Company's
outstanding stock, or the stock of any Affiliate of the Company, shall in no
event be less than 110 percent of such fair market value.
<PAGE>
For purposes of the Plan, the fair market value of Common
Stock shall be determined as follows:
(a) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), its fair market value shall be the
closing sales price or the mean between the high bid and low asked prices if
no sales were reported, as quoted on such system or exchange (or the largest
such exchange) for the date the value is to be determined (or if there are no
sales or bid and asked price quotations for such date, then for the last
preceding business day on which there were sales or bid and asked price
quotations), as reported in THE WALL STREET JOURNAL or similar publication.
(b) If the Common Stock is regularly quoted by a recognized
securities dealer, its fair market value shall be (i) the mean between the
closing high bid and low asked quotations for the stock on the date the value
is to be determined (or if there are no quoted prices for such date, then for
the last preceding business day on which there were quoted prices) as quoted
on NASDAQ or any similar system of automated dissemination of quotations of
securities prices then in common use, as reported in THE WALL STREET JOURNAL
or similar publication, or (ii) if not quoted as described in clause (i), the
mean between the high bid and low asked quotations for the stock as reported
by the National Quotation Bureau Incorporated if at least two securities
dealers have inserted both bid and asked quotations for the security on at
least five trading days of the 20 trading days preceding the date the value
is to be determined; provided, however, that if the stock is quoted on a
national securities or central market system, in lieu of a market or
quotation system described above, the fair market value shall be determined
in the manner set forth in clause (i) if bid and asked quotations are
reported but actual transactions are not, and in the manner set forth in
paragraph (a) if actual transactions are reported.
(c) In the absence of an established market for the Common
Stock, the fair market value thereof shall be determined in good faith by the
Administrator, with reference to the Company's net worth, prospective earning
power, dividend-paying capacity, and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company's industry, the
Company's position in the industry and its
<PAGE>
management, and the values of stock of other corporations in the same or
similar line of business.
6.3.2 EXPIRATION. Unless an earlier expiration date is
specified by the Administrator at the time of grant, each ISO granted under
this Plan shall expire ten years from the date of its grant, except that an
ISO granted to any person who owns, directly or indirectly, (or is treated
as owning by reason of applicable attribution rules, currently set forth in
Code Section 425) stock of the Company constituting more than ten percent of
the total combined voting power of the Company's outstanding stock, or the
stock of any Affiliate of the Company, shall expire five years from the date
of its grant.
6.3.3 EXERCISE OF AN INCENTIVE STOCK OPTION BY AN OPTIONEE
WHO HOLDS ANOTHER INCENTIVE STOCK OPTION. An ISO granted prior to January 1,
1987 under the Plan shall not be exercisable while the optionee holds a
previously granted incentive stock option to purchase stock in the Company, a
parent or subsidiary corporation of the Company, or a corporation which is a
predecessor of any of the foregoing, for such purposes, an ISO shall be
treated as outstanding until such option is exercised in full or expires by
reason of lapse of time, within the meaning of Section 422A(c)(7) of the
Code. Post-1986 ISOs shall not be subject to the limitation imposed by the
preceding sentence.
6.3.4 DISQUALIFYING DISPOSITIONS. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of within two
years from the date of grant to the ISO or within one year after the transfer
of the stock to the optionee, the holder of the stock immediately prior to
the disposition shall promptly notify the Company in writing of the date and
terms of the disposition and shall provide such other information regarding
the disposition as the Company may require. Such holder shall pay to the
Company any withholding and employment taxes which the Company in its sole
discretion deems applicable to such disposition. Any disposition not in
accordance with this Section 6.3.4 shall be void and of no effect. The
Company may instruct its stock transfer agent by appropriate means, including
placement of legends or stock certificates, not to transfer stock acquired by
exercise of an ISO unless it has been advised by the Company that the
requirements of this Section 6.3.4 have been satisfied.
6.3.5 WITHHOLDING AND EMPLOYMENT TAXES. At such time or
times as the Administrator determines, at or following the time of exercise
of an ISO, the optionee shall remit to the Company in cash all federal and
state withholding and employment taxes which the Administrator in its sole
discretion deems applicable to the exercise of an ISO or the disposition of
shares acquired by such exercise. The Administrator may, in the exercise of
the Administrator's sole discretion, permit an optionee to pay some or all of
such taxes by means of a promissory note on such terms as the Administrator
deems appropriate.
7. MANNER OF EXERCISE
An optionee wishing to exercise an Option shall give written notice
to the Company at its principal executive office, to the attention of the
Secretary of the Company, accompanied by an executed stock purchase agreement
in form and substance satisfactory to the Company and by payment of the
exercise price as provided in Section 6.1.6. The date the Company receives
written notice of an exercise hereunder accompanied by payment of the
exercise price will be considered as the date such Option was exercised.
Promptly after receipt of written notice of exercise of an option, the
Company shall, without stock issue or transfer taxes to the optionee or other
person entitled to exercise the Option, deliver to the optionee or such other
person a certificate or certificates for the requisite number of shares of
stock. An optionee or transferee of an Option shall not have any privileges
as shareholder with respect to any stock covered by the Option until the date
of issuance of the stock certificate.
8. DEFINITIONS RELATING TO SARs AND LIMITED RIGHTS
For purposes of this Plan, the following items shall have the
following meanings.
8.1 CHANGE IN CONTROL. The term "Change in Control" shall mean
any of the following events:
(a) the Company is provided a copy of a Schedule 13D filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") indicating that any person or group (as such terms are defined in
Section 13(d)(3) of the Exchange Act) that does not on the date of this Plan
is adopted by the Board hold more than five percent of the outstanding shares
of
<PAGE>
the Company entitled to vote for the election of directors has become the
holder of more than 40 percent of the outstanding shares of the Company
entitled to vote for the election of directors;
(b) 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 to constitute a majority of
the Board;
(c) the Company's stockholders approve a definitive agreement
providing for a transaction in which the Company will cease to be an
independent publicly-owned corporation;
(d) 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 Common 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; or
(e) an Offer is made.
8.2 FMV PER SHARE. The term "FMV per Share" shall mean, for the
day or period with respect to which the FMV per share is being determined,
the fair market value of the Common Stock determined in accordance with the
provisions of Section 6.3.1.
8.3 LIMITED RIGHT HOLDER. The term "Limited Right Holder" shall
mean a person to whom a Limited Right is granted pursuant to the Plan.
8.4 LIMITED RIGHT SPREAD. The term "Limited Right Spread" shall
mean an amount (rounded to the nearest whole dollar) equal to the product
computed by multiplying (a) the excess of (i) the greater of the highest FMV
per Share on any day during the 60 day period prior to the date of exercise
of the
<PAGE>
Limited Right and the highest price per Share of Common Stock paid or
proposed to be paid in connection with any Change in Control over (ii) the
exercise price per share of Common Stock at which the Related Right is
exercisable, or in the case of a Limited Right granted without reference to a
Related Right, such other price as the Administrator establishes at the time
the Limited Right is granted, by (b) the number of shares of Common Stock
with respect to which a Limited Right is being exercised. If the
consideration paid or proposed to be paid for Common Stock in connection with
a Change in Control shall consist, in whole or in part, of consideration
other than cash, the Administrator shall take such action, as in its judgment
it deems appropriate, to establish the cash value of such consideration, but
such valuation shall not be less than the value, if any, attributed to such
consideration by any other party to the transaction constituting the Change
in Control.
8.5 OFFER. The term "Offer" shall mean a tender offer or exchange
offer for shares of the Company's Common Stock other than one made by the
Company or by a person or group, as such terms are defined in Section
13(d)(3) of the Exchange Act, that on the date this Plan is adopted by the
Board holds more than five percent of the outstanding shares of the Company
entitled to vote for the election of directors where the offeror acquires
more than 40 percent of the outstanding shares of Common Stock.
8.6 RELATED RIGHT. The term "Related Right" shall mean an option
with respect to which a SAR or Limited Right is granted.
8.7 SAR HOLDER. The term "SAR Holder" shall mean a person holding
an option to acquire shares of Common Stock to whom a SAR is granted pursuant
to this Plan.
8.8 SAR SPREAD. The term "SAR Spread" shall mean an amount
(rounded to the nearest whole dollar) equal to the product computed by
multiplying (a) the excess of (i) if the SAR may only be exercised during the
Window Period under Section 9.5 below, then the highest FMV per Share on any
day during the Window Period, and if exercise of the SAR is not so limited
under Section 9.5 below, then the FMV per Share on the date the SAR is
exercised, over (ii) the exercise price per share of common stock at which
the Related Right is exercisable, or in the case of a SAR granted without
reference to a Related Right, such other price as the Administrator
establishes at the time the SAR is
<PAGE>
granted, by (b) the number of shares of Common Stock with respect to which a
SAR is being exercised.
8.9 WINDOW PERIOD. The term "Window Period" shall mean the
periods specified in Rule 16b-3(e)(3)(iii), or any successor rule, within
which a SAR must be exercised in order to be exempt from the operation of
Section 16(b) of the Exchange Act by virtue of paragraph (e) of Rule 16b-3 or
any successor provision. This period is, as of the date of this Plan,
between the third and twelfth business days following release by the Company
of quarterly or annual summary statements of sales and earnings.
9. STOCK APPRECIATION RIGHTS
9.1 GRANT OF SAR. The Administrator may, in the exercise of the
Administrator's discretion, grant SARs to eligible employees. A SAR may be
granted either (i) with respect to shares of Common Stock subject to a
Related Right held by the SAR Holder, whether or not the Related Right is an
Option granted pursuant to this Plan, or (ii) without reference to any
Related Right. If a Related Right is an ISO, a SAR granted with respect to
such Related Right may be granted only at the time of grant of the related
ISO, but if the Related Right is a non-qualified option, the SAR may be
granted either simultaneously with the grant of the related non-qualified
option, or may be granted at any time during the term of such related
non-qualified option, whether or not the option is a NQO granted pursuant to
this Plan, or a previously or subsequently granted non-qualified option not
granted pursuant to this Plan, and whether or not the option is granted
pursuant to a "plan" within the meaning of Rule 16b-3. Notwithstanding any
other provision of the Plan, the Administrator shall have sole discretion to
specify a maximum limitation on the amount of the SAR Spread, to determine
the time at which any SAR otherwise exercisable may be exercised, to
determine whether upon exercise of a SAR the SAR Holder may receive cash or
stock as provided in Section 9.8 and 9.9 below or may elect to receive either
cash or stock, to establish a price other than the exercise price of shares
subject to a Related Right as a basis for determining the amount of the SAR
Spread, and to grant any SAR subject to such additional terms and conditions
as are consistent with the provisions of this Plan.
9.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event
described in Section 6.1.1, an adjustment is made to a
<PAGE>
Related Right held by a SAR Holder, then the number of shares covered by the
SAR shall also be adjusted accordingly.
9.3 CORPORATE TRANSACTIONS. New SARs may be substituted for the
SARs granted under this Plan, or the Company's obligations as to options
outstanding under this Plan may be assumed, by an employer corporation other
than the Company, or by a parent or subsidiary of such employer corporation,
in connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is
involved. Notwithstanding the foregoing or the provisions of Section 9.2, if
such employer corporation, or parent or subsidiary of such employer
corporation, does not substitute new SARs for, and substantially equivalent
to, the SARs granted hereunder, or assume the SARs granted hereunder, or if
the Board determines, in its sole discretion, that SARs outstanding under
this Plan should not then continue to be outstanding, the SARs granted
hereunder shall terminate (A) upon dissolution or liquidation of the Company,
or similar occurrence, or (B) upon any merger, consolidation, acquisition,
separation, or similar occurrence, where the Company, will not in economic
substance be the surviving corporation; provided, however, that each SAR
Holder shall be mailed notice at least 15 days prior to such dissolution,
liquidation, merger, consolidation, acquisition, separation, or similar
occurrence, and shall have at least 10 days after the mailing of such notice
to exercise any unexpired SARs granted hereunder to the extent such SARs are
then exercisable.
9.4 SAR GRANT DATE. Except in the case of advance approvals
described in Section 5.4, the date of grant of a SAR under this Plan shall be
the date as of which the Administrator approves the grant.
9.5 TIME OF SAR EXERCISE. A SAR shall generally be immediately
exercisable and shall be exercisable in whole or in part. Any election by a
SAR Holder to receive cash in full or partial settlement of a SAR, as well as
any exercise by the SAR Holder of a SAR for such cash, shall be made only
during the Window Period. Where a SAR is granted with respect to a Related
Right, unless written agreement pursuant to which the SAR is granted
otherwise provides, the SAR may be exercised only to the extent to which
shares covered by the Related Right are not at the time of exercise subject
to a right of repurchase as described in Section 6.1.9. A SAR may not be
exercised under any
<PAGE>
circumstances until the expiration of six months following the date of grant
of the SAR, except in the event of the death or permanent disability of the
SAR Holder.
9.6 EFFECT ON RELATED RIGHT; TERMINATION OF SAR. If a SAR granted
with respect to a Related Right is exercised, the Related Right shall cease
to be exercisable and shall be cancelled to the extent of the number of
shares with respect to which the SAR was exercised. The Company and the SAR
Holder shall take such actions and execute such documents as may be necessary
or appropriate to reflect such cancellation. Upon the exercise or
termination of a Related Right, SARs granted with respect thereto shall
terminate to the extent of the number of shares as to which the Related Right
was exercised or terminated. Upon the death or permanent disability of the
SAR Holder, the SAR shall be exercisable only by the SAR Holder's personal
representative or any other person who acquires the SAR Holder's right by
will or the applicable laws of descent and distribution and, in the case of a
SAR granted with respect to a Related Right, only to the extent to which the
Related Right is then exercisable.
9.7 NONASSIGNABILITY OF SARS. No SAR granted under this Plan
shall be assignable or otherwise transferable by the SAR Holder except by
will or by the laws of descent and distribution. During the life of the SAR
Holder, a SAR shall be exercisable only by the SAR Holder or the SAR Holder's
guardian or legal representative.
9.8 MANNER OF EXERCISE; ELECTION TO RECEIVE CASH OR STOCK. A SAR
Holder wishing to exercise a SAR shall (i) give written notice to the Company
at its principal executive office, to the attention of the Secretary of the
Company, specifying the number of shares of Common Stock with respect to
which the SAR Holder is exercising the SAR and if under the terms of the SAR
the SAR Holder may elect to receive either cash, stock, or a combination of
cash and stock upon exercise of the SAR, stating the manner in which the SAR
Holder has elected to receive payment upon exercise; (ii) deliver to the
Company such written representations, warranties, and covenants as the
Company may reasonably require; and (iii) if so requested by the Company,
deliver to the Secretary of the Company any written agreement that the
Company may reasonably require relating to the SAR being exercised or
pertaining to the Related Right. The date the Company receives all of the
instruments referred to in the
<PAGE>
preceding sentence shall be considered as the date upon which the SAR was
exercised. A SAR Holder who receives stock upon exercise of a SAR shall not
have any privileges as a stockholder with respect to any such shares of stock
until the date of issuance of a stock certificate.
9.9 EXERCISE OF SARS; MARKET PRICE. Upon the exercise of a SAR,
the SAR Holder shall be entitled to receive one of the following kinds of
payments:
(a) that number of whole shares of Common Stock equal to the
number computed by dividing the SAR Spread by the highest FMV per Share
during the Window Period in which the SAR was exercised and an amount of cash
equal to the highest FMV per Share during the Window Period in which the SAR
was exercised multiplied by the fraction (if any) of a share of Common Stock
not so issued (such payment to be in lieu of issuance of fractional shares);
or
(b) an amount in cash equal to the SAR Spread; or
(c) a combination of cash and whole shares of Common Stock (the
combined value of which, however, shall not exceed the SAR Spread) in the
respective amounts specified in the SAR Holder's notice of exercise.
Notwithstanding any other provision of this Section 9, if the terms of a SAR
entitle the SAR Holder to elect upon exercise of the SAR whether to receive
cash in full or partial settlement of the SAR, then the Administrator shall
have sole discretion to consent to or disapprove such election ("Cash
Election"). Such consent or disapproval may be given at any time after the
Cash Election to which it relates. If the Administrator shall disapprove a
Cash Election, the exercise of the SAR with respect to which the Cash
Election was made shall be of no effect but shall be without prejudice to the
right of the SAR Holder to exercise the SAR in the future in accordance with
its terms. The Administrator shall have no such discretion with respect to
the exercise of a Limited Right pursuant to Section 10 of the Plan.
9.10 Withholding and Employment Taxes. At the time of exercise of
a SAR, the SAR Holder shall remit to the Company in cash all applicable
federal, state and local withholding and employment taxes, and the
Administrator may, in its sole discretion, reduce the amount paid to a SAR
Holder upon exercise
<PAGE>
of the SAR by such amount. The Administrator may, in the exercise of its
sole discretion, permit a SAR Holder to pay some or all of such taxes (i) by
means of a promissory note on such terms as the Administrator deems
appropriate; or (ii) in accordance with the applicable provision of Section
6.1.9.
10. LIMITED RIGHTS
10.1 GRANT OF LIMITED RIGHT. The Administrator may, in the
exercise of the Administrator's discretion, grant Limited Rights to eligible
employees. A Limited Right may be granted with respect to shares of Common
Stock subject to a Related Right held by the Limited Right Holder, whether or
not the Related Right is an Option granted pursuant to this Plan, or may be
granted without reference to any Related Right. If a Related Right is an
ISO, a Limited Right granted with respect to such Related Right may be
granted only at the time of grant of the related ISO, but if the Related
Right is a non-qualified option, the Limited Right may be granted either
simultaneously with the grant of the related non-qualified option, or at any
time during the term of such related non-qualified option, whether or not the
option is a NQO granted pursuant to this Plan or a previously or subsequently
granted non-qualified option not granted pursuant to this Plan, and whether
or not the option is granted pursuant to a "plan" within the meaning of Rule
16b-3. The Administrator shall have sole discretion to grant any Limited
Right subject to such additional terms and conditions as are consistent with
the provisions of this Plan.
10.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event
described in Section 6.1.1, an adjustment is made to a Related Right held by
a Limited Right Holder, then the number of shares covered by the Limited
Right covering the Related Right shall also be adjusted accordingly.
10.3 TIME OF LIMITED RIGHT EXERCISE. Each outstanding Limited
Right shall become immediately exercisable only upon the occurrence of a
Change in Control, unless the Change in Control is approved by the Board as
provided in Section 10.4 below, whether or not the then-outstanding Related
Right, if any, is then exercisable. The Company shall promptly notify each
Limited Right Holder of the occurrence of any Change in Control. Limited
Rights may not be exercised under any circumstances until the expiration of
six months following the date of grant of the Limited Right. In the event of
the occurrence of any of the
<PAGE>
events specified in clauses (a) through (d) of Section 8.1 above, each
outstanding Limited Right will be exercisable for a period of 60 days
following the date of occurrence of such event, and in the event of an Offer,
each outstanding Limited Right will be exercisable for a 60 day period
following the date of expiration of the Offer; provided, however, that if
the event constituting the Change in Control occurs prior to the expiration
of six months from the date of grant of a Limited Right, then such Limited
Right shall be exercisable for a period of 60 days following expiration of
such six month period. Where a Limited Right is granted with respect to a
Related Right, unless the written agreement pursuant to which the Limited
Right is granted otherwise provides, the Limited Right may be exercised only
to the extent to which shares covered by the Related Right are not at the
time of exercise subject to a right of repurchase as described in Section
6.1.8. A Limited Right shall remain exercisable during the exercise periods
described above in this Section 10.3 in the event of an Employment
Termination of the Limited Right Holder after a Change in Control during such
exercise period. Notwithstanding the above, upon an Employment Termination
of the Limited Right Holder before the occurrence of any Change in Control,
the Limited Right shall expire immediately. Upon the death or permanent
disability of the Limited Right Holder, the Limited Right shall be
exercisable only by the Limited Right Holder's personal representative or any
other person who acquires the Limited Right Holder's right by will or the
applicable laws of descent and distribution.
10.4 LIMITATIONS ON RIGHT TO EXERCISE LIMITED RIGHTS.
Notwithstanding Section 10.3, no Limited Right shall be exercisable with
respect to an event constituting a Change in Control under Section 8.1 (b)
through (e) in the event the Board approves such event prior to the
occurrence of such event, and no Limited Right shall be exercisable with
respect to an event constituting a Change in Control under Section 8.1 (a) if
the Board approves such event prior to such time following such event as the
persons who were directors just prior to such event cease to constitute a
majority of the Board.
10.5 EFFECT ON RELATED RIGHT; TERMINATION OF LIMITED RIGHT. If a
Limited Right granted with respect to a Related Right is exercised, the
Related Right shall cease to be exercisable and shall be cancelled to the
extent of the number of shares with respect to which the Limited Right was
exercised. The Company and the Limited Right Holder shall take such actions
<PAGE>
and execute such documents as may be necessary or appropriate to reflect such
cancellation. Upon the exercise or termination of a Related Right, Limited
Rights granted with respect thereto shall terminate to the extent of the
number of shares as to which the Related Right was exercised or terminated.
10.6 NONASSIGNABILITY OF LIMITED RIGHTS. No Limited Right granted
under this Plan shall be assignable or otherwise transferable by the Limited
Right Holder except by will or by the laws of descent and distribution.
During the life of the Limited Right Holder, a Limited Right shall be
exercisable only by the Limited Right Holder or the Limited Right Holder's
guardian or legal representative.
10.7 EXERCISE OF LIMITED RIGHTS; PAYMENT, MARKET PRICE. Upon the
exercise of a Limited Right, the Company shall pay to the Limited Right
Holder an amount in cash representing the Limited Right Spread.
10.8 WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of
a Limited Right, the Limited Right Holder shall remit to the Company in cash
all applicable federal, state and local withholding and employment taxes, and
the Administrator may, in its sole discretion, reduce the amount paid to a
Limited Right Holder upon exercise of the Limited Right by such amount. The
Administrator may, in the exercise of its sole discretion, permit an optionee
to pay some or all of such taxes (i) by means of a promissory note on such
terms as the Administrator deems appropriate; or (ii) in accordance with the
applicable provisions of Section 6.1.9.
11. EMPLOYMENT RELATIONSHIP
Nothing in this Plan or any option granted hereunder shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate any optionee's employment or status as a director at
any time, nor confer upon any optionee any right to continue in the employ
of, or as a director of, the Company or any of its Affiliates.
12. EXISTING OPTIONS TO BE GOVERNED BY PLAN
At the option of the Administrator, any unexercised outstanding
option granted by the Company prior to the date of this Plan to any employee
or director to acquire shares of Common
<PAGE>
Stock may be deemed granted pursuant to this Plan, and any transactions with
respect to such option occurring after the date this Plan is approved by the
Board may be deemed to occur pursuant to this Plan and be governed by the
provisions of this Plan. At the option of the Administrator, the date of
grant of any such option may be the date as of which the optionee first
received the right to acquire the Common Stock subject to the option, and the
exercise price may be the exercise price specified on the date of grant. The
optionee and the Company shall execute such documents and take such actions
as may be necessary to implement the provisions of this Section.
13. AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN
The Board or the Administrator may at any time amend, alter,
suspend, or discontinue this Plan, except to the extent that stockholder
approval is required by applicable law or Rule 16b-3; provided, however, no
amendment, alteration, suspension, or discontinuation shall be made that
would impair the rights of any grantee under any option, SAR, or Limited
Right theretofore granted, without the grantee's consent. The Board shall
have the power to make such changes in this Plan and in the regulations and
administrative provisions hereunder or in any outstanding option, SAR, or
Limited Right as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any option granted pursuant to
this Plan to qualify as an incentive stock option under Section 422A of the
Code, subject in all events to the consent of the holder of such Option.
14. INDEMNIFICATION OF ADMINISTRATOR
The Company shall indemnify each present and future member of the
group constituting the Administrator against, and each member of the group
constituting the Administrator shall be entitled without further act on his
part to indemnify from the Company for all expenses (including the amount of
judgments and the amount of approved settlements made with a view to the
curtailment of costs and litigation, other than amounts paid to the Company
itself) reasonably incurred by such person in connection with or arising out
of any action, suit, or proceeding to the full extent permitted by the laws
of the State of Delaware and by the Bylaws of the Company.
<PAGE>
15. EFFECTIVE DATE OF THIS PLAN
This Plan shall become effective upon adoption by the Board;
provided, however, that if this Plan is not approved within 12 months after
its adoption by the Board, by unanimous written consent of the stockholders
of the Company or by the stockholders of the Company voting at a validly
called stockholders meeting by a majority (or such greater number as may be
required by law or applicable governmental regulations or orders) of the
shares entitled to vote, then any options exercised pursuant to this Plan
shall constitute NQOs and not ISOs, regardless of their status on the date of
grant. Options, SARs, and Limited Rights may be granted and exercised under
this Plan only after there has been compliance with all applicable federal
and state securities laws.
<PAGE>
Exhibit 11
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1996 1995 1996 1995
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Income............................................................ $ 15,946 $ 10,463 $ 43,409 $ 28,817
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number Of Shares Outstanding:
Primary:
Common stock...................................................... 59,134 56,981 58,553 56,786
Common stock equivalents--
Stock options (A)............................................... 2,178 1,992 2,207 1,935
--------- --------- --------- ---------
Primary shares outstanding........................................ 61,312 58,973 60,760 58,721
--------- --------- --------- ---------
--------- --------- --------- ---------
Fully Diluted:
Common stock...................................................... 59,134 56,981 58,553 56,786
Common stock equivalents--
Stock options (A)............................................... 2,336 2,168 2,503 2,322
--------- --------- --------- ---------
Fully diluted shares outstanding.................................. 61,470 59,149 61,056 59,108
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income Per Share:
Primary............................................................. $ .26 $ .18 $ .71 $ .49
Fully diluted....................................................... $ .26 $ .18 $ .71 $ .49
</TABLE>
- ------------------------
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED TO ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-30-1996 DEC-31-1995
<CASH> 71,011 41,948
<SECURITIES> 0 0
<RECEIVABLES> 115,867 88,022
<ALLOWANCES> 3,809 3,087
<INVENTORY> 0 0
<CURRENT-ASSETS> 194,234 133,650
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 374,780 301,140
<CURRENT-LIABILITIES> 69,101 55,880
<BONDS> 4,718 1,488
60 58
0 0
<COMMON> 0 0
<OTHER-SE> 286,754 227,872
<TOTAL-LIABILITY-AND-EQUITY> 374,780 301,140
<SALES> 0 0
<TOTAL-REVENUES> 639,838 628,526
<CGS> 0 0
<TOTAL-COSTS> 387,487 384,449
<OTHER-EXPENSES> 4,025 4,787
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (1,577) (483)
<INCOME-PRETAX> 73,770 69,089
<INCOME-TAX> 30,361 28,791
<INCOME-CONTINUING> 43,409 40,298
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 43,409 40,298
<EPS-PRIMARY> .71 .68
<EPS-DILUTED> .71 .68
</TABLE>
