<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
------------------------
COMMISSION FILE NUMBER 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1648752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2884 SAND HILL ROAD, SUITE 200, MENLO PARK, CALIFORNIA 94025
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (415) 854-9700
------------------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, Par Value $.001 per Share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of March 7, 1996, the aggregate market value of the Common Stock held by
non-affiliates of the registrant was approximately $1,199,755,000 based on the
closing sale price on that date. This amount excludes the market value of
2,630,142 shares of Common Stock held by registrant's directors and officers and
their affiliates.
As of March 7, 1996, there were outstanding 28,998,392 shares of the
registrant's Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement to be mailed to stockholders in
connection with the registrant's annual meeting of stockholders, scheduled to be
held in May 1996, are incorporated by reference in Part III of this report.
Except as expressly incorporated by reference, the registrant's Proxy Statement
shall not be deemed to be part of this report.
<PAGE>
PART I
ITEM 1. BUSINESS
Robert Half International Inc. is the world's largest specialized provider
of temporary and permanent personnel in the fields of accounting and finance.
Its divisions include ACCOUNTEMPS-Registered Trademark- and ROBERT
HALF-Registered Trademark-, providers of temporary and permanent personnel,
respectively, in the fields of accounting and finance. The Company, utilizing
its experience as a specialized provider of temporary and permanent personnel,
has expanded into additional specialty fields. In 1991, the Company formed
OFFICETEAM-Registered Trademark- to provide skilled temporary administrative and
office personnel. In 1994, the Company established RHI
CONSULTING-Registered Trademark- to concentrate on providing temporary and
contract information technology professionals in positions ranging from PC
support technician to chief information officer. In 1992, the Company acquired
THE AFFILIATES-Registered Trademark-, which focuses on placing temporary and
permanent employees in paralegal, legal administrative and other legal support
positions.
The Company's business was originally founded in 1948. Prior to 1986, the
Company was primarily a franchisor of ACCOUNTEMPS and ROBERT HALF offices.
Beginning in 1986, the Company and its current management embarked on a strategy
of acquiring franchised locations and other local or regional independent
providers of specialized temporary service personnel. The Company has acquired
all but five of the ACCOUNTEMPS and ROBERT HALF franchises in 45 separate
transactions, and has acquired 16 other local or regional providers of
specialized temporary service personnel. Since 1986, the Company has
significantly expanded operations at many of the acquired locations and has
opened many new locations. The Company believes that direct ownership of offices
allows it to better monitor and protect the image of the ACCOUNTEMPS and ROBERT
HALF names, promotes a more consistent and higher level of quality and service
throughout its network of offices and improves profitability by centralizing
many of its administrative functions. The Company currently has more than 185
offices in 36 states and five foreign countries and placed approximately 101,000
employees on temporary assignment with clients in 1995.
ACCOUNTEMPS
The ACCOUNTEMPS temporary services division offers customers a reliable and
economical means of dealing with uneven or peak work loads for accounting, tax
and finance personnel caused by such predictable events as vacations, taking
inventories, tax work, month-end activities and special projects and such
unpredictable events as illness and emergencies. Businesses increasingly view
the use of temporary employees as a means of controlling personnel costs and
converting such costs from fixed to variable. The cost and inconvenience to
clients of hiring and firing permanent employees are eliminated by the use of
ACCOUNTEMPS temporaries. The temporary workers are employees of ACCOUNTEMPS and
are paid by ACCOUNTEMPS only when working on customer assignments. The customer
pays a fixed rate only for hours worked.
ACCOUNTEMPS clients may fill their permanent employment needs by using an
ACCOUNTEMPS employee on a trial basis and, if so desired, "converting" the
temporary position to a permanent position. The client typically pays a one-time
fee for such conversions.
OFFICETEAM
The Company's OFFICETEAM division, which commenced operations in 1991,
places temporary and permanent office and administrative personnel, ranging from
word processors to office managers, from over 135 locations in the United States
and Canada. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and
ROBERT HALF divisions.
ROBERT HALF
The Company offers permanent placement services through its office network
under the name ROBERT HALF. The Company's ROBERT HALF division specializes in
placing accounting, financial, tax and banking personnel. Fees for successful
permanent placements are paid only by the employer and are generally a
percentage of the new employee's annual compensation. No fee for permanent
placement services is charged to employment candidates.
1
<PAGE>
RHI CONSULTING
The Company's RHI CONSULTING division, which commenced operations in 1994,
specializes in providing information technology contract consultants in areas
ranging from multiple platform systems integration to end-user support,
including specialists in programming, networking, systems integration, database
design and help desk support. RHI Consulting conducts its activities from 38
locations in the United States, Canada and Europe.
THE AFFILIATES
In 1992, the Company acquired THE AFFILIATES, a small operation involving
only a limited number of offices, which places temporary and permanent employees
in paralegal, legal administrative and legal secretarial positions. The legal
profession's requirements (the need for confidentiality, accuracy and
reliability, a strong drive toward cost-effectiveness, and frequent peak
workload periods) are similar to the demands of the clients of the ACCOUNTEMPS
division.
MARKETING AND RECRUITING
The Company markets its services to clients as well as employment
candidates. Local marketing and recruiting are generally conducted by each
office or related group of offices. Advertising directed to clients and
employment candidates consists primarily of yellow pages advertisements,
classified advertisements and radio. Direct marketing through mail and telephone
solicitation also constitutes a significant portion of the Company's total
advertising. National advertising conducted by the Company consists primarily of
print advertisements in national newspapers, magazines and certain trade
journals. Joint marketing arrangements have been entered into with Microsoft,
Lotus Development Corporation, WordPerfect Corporation, Peachtree Software,
Inc., and Computer Associates International, Inc. and typically provide for
cooperative advertising, joint mailings and similar promotional activities. The
Company also actively seeks endorsements and affiliations with professional
organizations in the business management, office administration and professional
secretarial fields. The Company also conducts public relations activities
designed to enhance public recognition of the Company and its services. Local
employees are encouraged to be active in civic organizations and industry trade
groups.
The Company owns many trademarks, service marks and tradenames, including
the ROBERT HALF-Registered Trademark-, ACCOUNTEMPS-Registered Trademark-,
OFFICETEAM-Registered Trademark-, THE AFFILIATES-Registered Trademark- and RHI
CONSULTING-Registered Trademark- marks, which are registered in the United
States and in a number of foreign countries.
ORGANIZATION
Management of the Company's operations is coordinated from its headquarters
in Menlo Park, California. The Company's headquarters provides support and
centralized services to its offices in the administrative, marketing,
accounting, training and legal areas, particularly as it relates to the
standardization of the operating procedures of its offices. The Company has more
than 185 offices in 36 states and five foreign countries. Office managers are
responsible for most activities of their offices, including sales, local
advertising and marketing and recruitment.
COMPETITION
The Company faces competition in its efforts to attract clients as well as
high-quality specialized employment candidates. The temporary and permanent
placement businesses are highly competitive, with a number of firms offering
services similar to those provided by the Company on a national, regional or
local basis. In many areas the local companies are the strongest competitors.
The most significant competitive factors in the temporary and permanent
placement businesses are price and the reliability of service, both of which are
often a function of the availability and quality of personnel. The Company
believes it derives a competitive advantage from its long experience with and
commitment to the specialized employment market, its national presence, and its
various marketing activities.
2
<PAGE>
EMPLOYEES
The Company has approximately 2,100 full-time staff employees. The Company's
offices placed approximately 101,000 employees on temporary assignments with
clients during 1995. Temporary employees placed by the Company are the Company's
employees for all purposes while they are working on assignments. The Company
pays the related costs of employment, such as workers' compensation insurance,
state and federal unemployment taxes, social security and certain fringe
benefits. The Company provides voluntary health insurance coverage to interested
temporary employees.
OTHER INFORMATION
The Company's current business constitutes a single business segment. (See
Item 8. Financial Statements and Supplementary Data for financial information
about the Company.)
The Company is not dependent upon a single customer or a limited number of
customers. The Company's operations are generally more active in the first and
fourth quarters of a calendar year. Order backlog is not a material aspect of
the Company's business and no material portion of the Company's business is
subject to government contracts. The Company does not have any material
expenditures for research and development. Compliance with federal, state or
local environmental protection laws has no material effect on the capital
expenditures, earnings or competitive position of the Company.
Information about foreign operations is contained in Note N of Notes to
Consolidated Financial Statements in Item 8. The Company does not have export
sales.
ITEM 2. PROPERTIES
The Company's headquarters is located in Menlo Park, California. Placement
activities are conducted through more than 185 offices located in the United
States, Canada, the United Kingdom, Belgium, France and the Netherlands. All of
the offices are leased.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings other
than routine litigation incidental to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year covered by this report.
3
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is listed for trading on the New York Stock
Exchange under the symbol "RHI". On March 7, 1996, there were approximately
1,487 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock as
quoted on the New York Stock Exchange, adjusted, as appropriate, to reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994:
<TABLE>
<CAPTION>
SALES PRICES
--------------------
1995 HIGH LOW
-------------------------------- -------- ---------
<S> <C> <C>
4th Quarter..................... $44 5/8 $31 7/8
3rd Quarter..................... $35 7/8 $25 1/4
2nd Quarter..................... $28 5/8 $19 5/8
1st Quarter..................... $26 5/8 $21
<CAPTION>
SALES PRICES
--------------------
1994 HIGH LOW
-------------------------------- -------- ---------
<S> <C> <C>
4th Quarter..................... $26 3/4 $18 1/8
3rd Quarter..................... $23 1/16 $17
2nd Quarter..................... $20 3/16 $15 1/16
1st Quarter..................... $16 7/16 $12 3/4
</TABLE>
No cash dividends were paid in 1995 or 1994. The Company, as it deems
appropriate, may continue to retain all earnings for use in its business or may
consider paying a dividend in the future.
4
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
Following is a table of selected financial data of the Company of the last
five years:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net service revenues....................................................... $ 628,526 $446,328 $306,166 $220,179 $209,455
Direct costs of services, consisting of payroll, payroll taxes and
insurance costs for temporary employees................................... 384,449 273,327 188,292 131,875 117,583
--------- -------- -------- -------- --------
Gross margin............................................................... 244,077 173,001 117,874 88,304 91,872
Selling, general and administrative expenses............................... 170,684 121,640 88,074 72,136 73,326
Amortization of intangible assets.......................................... 4,767 4,584 4,251 3,961 3,896
Interest (income) expense.................................................. (463) 1,570 3,992 4,301 6,574
--------- -------- -------- -------- --------
Income before income taxes................................................. 69,089 45,207 21,557 7,906 8,076
Provision for income taxes................................................. 28,791 19,090 9,834 3,524 3,961
--------- -------- -------- -------- --------
Net income................................................................. $ 40,298 $ 26,117 $ 11,723 $ 4,382 $ 4,115
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME PER PRIMARY SHARE: $ 1.36 $ .92 $ .47 $ .18 $ .18
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
INCOME PER FULLY DILUTED SHARE: $ 1.36 $ .92 $ .46 $ .18 $ .18
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
WEIGHTED AVERAGE NUMBER OF SHARES:
Primary.................................................................... 29,535 28,336 25,092 23,930 23,206
Fully Diluted.............................................................. 29,708 28,484 25,260 24,007 23,273
<CAPTION>
DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Intangible assets, net..................................................... $ 155,441 $152,824 $152,156 $143,757 $140,715
Total assets............................................................... 301,140 227,761 204,598 181,999 178,207
Debt financing............................................................. 5,725 4,214 32,740 61,855 67,614
Stockholders' equity....................................................... 227,930 176,995 133,602 90,972 84,419
</TABLE>
All shares and per share amounts have been restated to retroactively reflect
the two-for-one stock split effected in the form of a stock dividend in August
1994.
5
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1995
Temporary services revenues increased 42% during 1995 and 46% during 1994,
including the revenues generated from the Company's OfficeTeam and RHI
Consulting divisions, which were started in 1991 and 1994, respectively.
Permanent placement revenues increased 31% during the year ended December 31,
1995 and 47% during the year ended December 31, 1994. The revenue comparisons
reflect continued improvement in the demand for the Company's services.
Gross margin dollars increased 41% during the year ended December 31, 1995
compared to 47% for the year ended December 31, 1994. Gross margin amounts
equaled 39% of revenue in 1995, 1994 and 1993.
Selling, general and administrative expenses were approximately $171 million
during 1995 compared to $122 million in 1994 and $88 million in 1993. Selling,
general and administrative expenses as a percentage of revenues were 27% in 1995
and 1994 and 29% in 1993. The percentage decline from 1993 was attributable to
revenue growth coupled with the Company's continued cost containment.
Amortization of intangible assets increased from 1993 to 1995 due to the
acquisitions in each of those years of additional personnel services operations.
Interest income/expense for the years ended December 31, 1995 and 1994
decreased 130% and 61%, respectively, over the comparable prior periods due to
an increase in interest income from an increase in cash and cash equivalents and
a decrease in interest expense due to a reduction of outstanding indebtedness.
The provision for income taxes was 42% in 1995 and 1994 and 46% in 1993. The
decrease in 1994 is the result of a smaller percentage of non-deductible
intangible expenses.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during the past three years is the net
effect of funds generated by operations and the funds used for the personnel
services acquisitions, capital expenditures, principal payments on outstanding
notes payable, and the securities repurchase program.
In November 1994, the Company issued 633,555 shares of its common stock. The
net proceeds from the sale of shares were approximately $12.6 million. The
Company used the proceeds for repayment of the borrowings under the Company's
revolving credit agreement.
On December 10, 1993, substantially all of the Company's outstanding
convertible subordinated debentures were converted into common stock of the
Company. See Note F in the Notes to Consolidated Financial Statements.
The Company's working capital requirements consist primarily of the
financing of accounts receivable. While there can be no assurances in this
regard, the Company expects that internally generated cash plus the bank
revolving line of credit will be sufficient to support the working capital needs
of the Company's offices, the Company's fixed payments and other long-term
obligations.
6
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
ASSETS:
Cash and cash equivalents........................................... $ 41,346 $ 2,638
Accounts receivable, less allowances of $3,067 and $2,600........... 84,955 60,025
Other current assets................................................ 7,349 5,040
-------- --------
Total current assets.............................................. 133,650 67,703
Intangible assets, less accumulated amortization of $33,071 and
$28,243............................................................ 155,441 152,824
Other assets........................................................ 12,049 7,234
-------- --------
Total assets...................................................... $301,140 $227,761
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses............................... $ 12,631 $ 7,232
Accrued payroll costs............................................... 33,853 19,133
Income taxes payable................................................ 5,157 2,181
Current portion of notes payable and other indebtedness............. 4,239 1,081
-------- --------
Total current liabilities......................................... 55,880 29,627
Notes payable and other indebtedness, less current portion.......... 1,486 3,133
Deferred income taxes............................................... 15,844 18,006
-------- --------
Total liabilities................................................. 73,210 50,766
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value, 100,000,000 shares authorized,
28,892,311 and 28,152,201 shares issued and outstanding in 1995 and
1994, respectively................................................. 29 28
Capital surplus..................................................... 99,797 82,655
Deferred compensation............................................... (9,642) (5,533)
Accumulated translation adjustments................................. 51 (541)
Retained earnings................................................... 137,695 100,386
-------- --------
Total stockholders' equity........................................ 227,930 176,995
-------- --------
Total liabilities and stockholders' equity........................ $301,140 $227,761
-------- --------
-------- --------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
7
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net service revenues............................................................ $628,526 $446,328 $306,166
Direct costs of services, consisting of payroll, payroll taxes and insurance
costs for temporary employees.................................................. 384,449 273,327 188,292
-------- -------- --------
Gross margin.................................................................... 244,077 173,001 117,874
Selling, general and administrative expenses.................................... 170,684 121,640 88,074
Amortization of intangible assets............................................... 4,767 4,584 4,251
Interest (income) expense....................................................... (463) 1,570 3,992
-------- -------- --------
Income before income taxes...................................................... 69,089 45,207 21,557
Provision for income taxes...................................................... 28,791 19,090 9,834
-------- -------- --------
Net income...................................................................... $ 40,298 $ 26,117 $ 11,723
-------- -------- --------
-------- -------- --------
Income per share................................................................ $ 1.36 $ .92 $ .46
-------- -------- --------
-------- -------- --------
</TABLE>
1994 and 1993 per share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
8
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1995 1994 1993
-------- ------- -------
<S> <C> <C> <C>
COMMON STOCK:
Balance at beginning of period................................................ $ 28 $26,837 $23,642
Issuance of common stock -- par value......................................... -- 1 --
Issuances of restricted stock, net -- par value............................... -- 334 82
Conversion of debentures -- par value......................................... -- -- 2,040
Repurchases of common stock -- par value...................................... -- (59) (119)
Exercises of stock options -- par value....................................... 1 213 1,086
Issuance of common stock for acquisitions -- par value........................ -- -- 106
Change in par value........................................................... -- (27,298) --
-------- ------- -------
Balance at end of period.................................................... $ 29 $ 28 $26,837
-------- ------- -------
-------- ------- -------
CAPITAL SURPLUS:
Balance at beginning of period................................................ $ 82,655 $33,113 $ 3,897
Issuance of common stock -- excess over par value............................. -- 12,589 --
Issuances of restricted stock, net -- excess over par value................... 6,887 4,949 825
Conversion of debentures -- excess over par value............................. -- -- 20,185
Exercises of stock options -- excess over par value........................... 3,818 2,162 4,029
Tax benefits from exercises of stock options and restricted stock releases.... 6,437 2,544 2,823
Issuance of common stock for acquisitions -- excess over par value............ -- -- 1,354
Change in par value........................................................... -- 27,298 --
-------- ------- -------
Balance at end of period.................................................... $ 99,797 $82,655 $33,113
-------- ------- -------
-------- ------- -------
DEFERRED COMPENSATION:
Balance at beginning of period................................................ $ (5,533) $(2,113) $(2,208)
Issuances of restricted stock, net............................................ (6,887) (5,283) (907)
Amortization.................................................................. 2,778 1,863 1,002
-------- ------- -------
Balance at end of period.................................................... $ (9,642) $(5,533) $(2,113)
-------- ------- -------
-------- ------- -------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period................................................ $ (541) $ (589) $ (257)
Translation adjustments....................................................... 592 48 (332)
-------- ------- -------
Balance at end of period.................................................... $ 51 $ (541) $ (589)
-------- ------- -------
-------- ------- -------
RETAINED EARNINGS:
Balance at beginning of period................................................ $100,386 $76,354 $65,898
Repurchases of common stock -- excess over par value.......................... (2,989) (2,085) (1,267)
Net income.................................................................... 40,298 26,117 11,723
-------- ------- -------
Balance at end of period.................................................... $137,695 $100,386 $76,354
-------- ------- -------
-------- ------- -------
</TABLE>
1994 and 1993 amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
9
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1995 1994 1993
--------- --------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 40,298 $ 26,117 $ 11,723
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of intangible assets......................................... 4,767 4,584 4,251
Depreciation expense...................................................... 3,564 2,673 2,383
Provision for deferred income taxes....................................... (683) 1,096 1,136
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable........................................... (24,289) (18,292) (10,481)
Increase in accounts payable, accrued expenses and accrued payroll
costs.................................................................... 15,106 5,795 4,158
Increase in income taxes payable.......................................... 2,976 389 2,553
Change in other assets, net of change in other liabilities................ 432 2,997 (806)
--------- --------- --------
Total adjustments........................................................... 1,873 (758) 3,194
--------- --------- --------
Net cash and cash equivalents provided by operating activities................ 42,171 25,359 14,917
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions, net of cash acquired............................................ (1,024) (4,406) (11,141)
Capital expenditures.......................................................... (8,417) (4,768) (2,340)
--------- --------- --------
Net cash and cash equivalents used in investing activities.................... (9,441) (9,174) (13,481)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net................................... -- 12,589 --
Borrowings under credit agreement............................................. -- 104,900 138,900
Repayments under credit agreement............................................. -- (135,200) (144,200)
Repurchases of convertible debentures......................................... -- -- (305)
Principal payments on notes payable and other indebtedness.................... (1,289) (384) (1,170)
Proceeds and tax benefits from exercise of stock options and restricted stock
releases..................................................................... 10,256 4,919 7,938
Repurchases of common stock and common stock equivalents...................... (2,989) (2,144) (1,386)
--------- --------- --------
Net cash and cash equivalents provided by (used in) financing activities...... 5,978 (15,320) (223)
--------- --------- --------
Net increase in cash and cash equivalents..................................... 38,708 865 1,213
Cash and cash equivalents at beginning of period.............................. 2,638 1,773 560
--------- --------- --------
Cash and cash equivalents at end of period.................................... $ 41,346 $ 2,638 $ 1,773
--------- --------- --------
--------- --------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest...................................................................... $ 405 $ 1,420 $ 4,256
Income taxes.................................................................. $ 21,853 $ 14,609 $ 4,568
Acquisitions:
Fair value of assets acquired --
Intangible assets........................................................... $ 4,697 $ 5,452 $ 12,650
Other....................................................................... 753 1,694 2,506
Liabilities assumed --
Notes payable and contracts................................................. (2,800) (2,158) (101)
Other....................................................................... (1,626) (582) (2,454)
Common stock issued........................................................... -- -- (1,460)
--------- --------- --------
Cash paid, net of cash acquired............................................... $ 1,024 $ 4,406 $ 11,141
--------- --------- --------
--------- --------- --------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
All significant intercompany balances have been eliminated. Certain
reclassifications have been made to the 1994 and 1993 financial statements to
conform to the 1995 presentation.
REVENUE RECOGNITION. Temporary services revenues are recognized when the
services are rendered by the Company's temporary employees. Permanent placement
revenues are recognized when employment candidates accept offers of permanent
employment. Allowances 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. The Company considers all highly liquid
investments with an original maturity of three months or less as cash
equivalents.
INTANGIBLE ASSETS. Intangible assets represent the cost of acquired
companies in excess of the fair market value of their net tangible assets at
acquisition date, and are being amortized on a straight-line basis over a period
of 40 years. 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 is less than their carrying
value. Based upon its most recent analysis, the Company believes that no
material impairment of intangible assets exists at December 31, 1995.
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. The results of operations of the Company's
foreign subsidiaries are translated at the monthly average exchange rates
prevailing during the period. The financial position of the Company's foreign
subsidiaries are translated at the current exchange rates at the end of the
period, and the related translation adjustments are recorded as part of
Stockholders' Equity. Gains and losses resulting from foreign currency
transactions are included in the Consolidated Statements of Income.
USE OF ESTIMATES. The preparation of financial statements in conformity
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 -- ACQUISITIONS
In July 1986, the Company acquired all of the outstanding stock of Robert
Half Incorporated, the franchisor of the Accountemps and Robert Half operations.
Subsequently, in 61 separate transactions the Company acquired all of the
outstanding stock of certain corporations operating Accountemps and
11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- ACQUISITIONS (CONTINUED)
Robert Half franchised offices in the United States, the United Kingdom and
Canada as well as other personnel services businesses. The Company has paid
approximately $196 million in cash, stock, notes and other indebtedness in these
acquisitions, excluding transaction costs and cash acquired.
These acquisitions were accounted for as purchases, and the excess of cost
over the fair market value of the net tangible assets acquired is being
amortized over 40 years using the straight-line method. Results of operations of
the acquired companies are included in the Consolidated Statements of Income
from the dates of acquisition. The acquisitions made during 1995 and 1994 had no
material pro forma impact on the results of operations.
NOTE C -- NOTES PAYABLE AND OTHER INDEBTEDNESS
The Company issued promissory notes as well as other forms of indebtedness
in connection with certain acquisitions. These are due in varying installments,
carry varying interest rates and in aggregate amounted to $5,725,000 at December
31, 1995 and $4,214,000 at December 31, 1994. At December 31, 1995, $1,350,000
of the notes was secured by a standby letter of credit (see Note D). The
following table shows the schedule of maturities for notes payable and other
indebtedness at December 31, 1995 (in thousands):
<TABLE>
<S> <C>
1996....................................................................... $4,239
1997....................................................................... 764
1998....................................................................... 464
1999....................................................................... 15
2000....................................................................... 16
Thereafter................................................................. 227
------
$5,725
------
------
</TABLE>
At December 31, 1995, all of the notes carried fixed rates of interest
ranging from 4.1% to 13.3%. The weighted average interest rate for the above was
approximately 7.3%, 8.2% and 11.1% for the years ended December 31, 1995, 1994
and 1993, respectively.
NOTE D -- BANK LOAN (REVOLVING CREDIT)
The bank loan is an unsecured credit facility which provides a line of
credit of up to $80,000,000, which is available to fund the Company's general
business and working capital needs, including acquisitions and the purchase of
the Company's common stock, and to cover the issuance of debt support standby
letters of credit up to $15,000,000.
As of December 31, 1995 and 1994, the Company had no borrowings on the line
of credit outstanding and had used $3,408,000 and $3,358,000 in debt support
standby letters of credit, respectively. There is a commitment fee on the unused
portion of the entire credit facility of .25%. The loan is subject to certain
financial covenants which also affect the interest rates charged.
The credit facility has the following scheduled reduction in availability
(in thousands):
<TABLE>
<S> <C>
1996....................................................................... $ 5,000
1997....................................................................... $15,000
1998....................................................................... $15,000
1999....................................................................... $15,000
2000....................................................................... $15,000
2001....................................................................... $15,000
</TABLE>
The final maturity date for the credit facility is August 31, 2001.
12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE E -- CURRENT LIABILITIES
Other current liabilities included in accrued payroll costs consist of the
following at December 31, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Accrued payroll and bonus...................................................... $ 15,856 $ 9,960
Accrued workers compensation and other benefits................................ 11,182 3,731
Accrued payroll taxes.......................................................... 6,815 5,442
--------- ---------
$ 33,853 $ 19,133
--------- ---------
--------- ---------
</TABLE>
NOTE F -- CONVERTIBLE SUBORDINATED DEBENTURES
On August 6, 1987, the Company issued $74,750,000 of 7.25% Convertible
Subordinated Debentures (the "Convertible Debentures"). Prior to 1993, all but
$22,745,000 of the Convertible Debentures were repurchased by the Company
pursuant to its repurchase program. The Convertible Debentures were unsecured
obligations of the Company with an original maturity date of August 1, 2012.
Interest was payable semi-annually as of February 1 and August 1 of each year to
the registered holders as of the preceding January 15 and July 15, respectively.
The Convertible Debentures were redeemable at the Company's option at any time
on or after August 1, 1990, at declining redemption prices.
In December 1993, the Company called for redemption all of its then
outstanding Convertible Debentures. Holders of $22,440,000 in principal amount
elected to convert their debentures into 2.04 million shares of common stock at
the conversion price of $11.00 per share. The remaining $305,000 in principal
amount of Convertible Debentures was redeemed at 102.9% of the principal amount
plus accrued interest.
NOTE G -- STOCKHOLDERS' EQUITY
On June 27, 1994, the stockholders of the Company voted to amend the
certificate of incorporation to increase the number of authorized shares of the
Company's common stock from 30,000,000 to 100,000,000 shares and the number of
authorized shares of the Company's preferred stock from 500,000 to 5,000,000.
The stockholders of the Company also authorized a reduction in par value from $1
per share to $.001 per share on both classes of shares.
In August 1994, the Company effected a two-for-one stock split in the form
of a stock dividend. 1994 and 1993 share and per share amounts have been
restated to retroactively reflect the two-for-one stock split.
In November 1994, the Company issued 633,555 shares of its common stock at a
price of $21.25 per share. The net proceeds from the sale of shares (after
deducting issuance costs of approximately $355,000 and a 4% underwriter's
discount) were approximately $12.6 million.
13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES
The provisions for income taxes for the years ended December 31, 1995, 1994 and
1993 consisted of the following (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
Current:
Federal.................................................................. $22,061 $14,072 $6,995
State.................................................................... 4,728 3,155 1,604
Foreign.................................................................. 1,835 767 99
Deferred -- principally domestic........................................... 167 1,096 1,136
------- ------ ------
$28,791 $19,090 $9,834
------- ------ ------
------- ------ ------
</TABLE>
The income taxes shown above varied from the statutory federal income tax
rates for these periods as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
-----------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Federal U.S. income tax rate...................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit.... 4.5 4.7 5.5
Amortization of intangible assets................. 1.5 2.0 4.1
Other, net........................................ .7 .5 1.0
----- ----- -----
Effective tax rate................................ 41.7% 42.2% 45.6%
----- ----- -----
----- ----- -----
</TABLE>
The deferred portion of the tax provisions consisted of the following (in
thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Amortization of franchise rights.................. $1,650 $1,629 $1,484
Accrued expenses, deducted for tax when paid...... (2,068) (524) (137)
Other, net........................................ (265) (9) (211)
------ ------ ------
$ (683) $1,096 $1,136
------ ------ ------
------ ------ ------
</TABLE>
The net deferred income tax liability shown on the balance sheet is
comprised of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
-------- --------
<S> <C> <C>
Deferred income tax assets........................ $(1,304) $ (883)
Deferred income tax liabilities................... 17,148 18,889
-------- --------
$15,844 $18,006
-------- --------
-------- --------
</TABLE>
No valuation allowances against deferred tax assets were required for the
years ended December 31, 1995 and 1994.
14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES (CONTINUED)
The components of the net deferred income tax liability at December 31, 1995
and 1994, were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
-------- --------
<S> <C> <C>
Amortization of intangible assets................. $16,216 $17,427
Foreign taxes..................................... 200 775
Other............................................. (572) (196)
-------- --------
$15,844 $18,006
-------- --------
-------- --------
</TABLE>
NOTE I -- COMMITMENTS
Rental expense, primarily for office premises, amounted to $11,027,000,
$9,183,000 and $8,457,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. The approximate minimum rental commitments for 1996 and thereafter
under non-cancelable leases in effect at December 31, 1995, are as follows (in
thousands):
<TABLE>
<S> <C>
1996....................................................................... $10,547
1997....................................................................... 9,536
1998....................................................................... 8,145
1999....................................................................... 6,295
2000....................................................................... 3,274
Thereafter................................................................. 5,209
</TABLE>
NOTE J -- STOCK PLANS
Under various stock plans, officers, employees and outside directors may
receive grants of restricted stock or options to purchase common stock. Grants
are made at the discretion of the Compensation Committee of the Board of
Directors. Grants vest between four to seven years.
Options granted under the plans have exercise prices ranging from 85% to
100% of the fair market value of the Company's common stock at the date of
grant, consist of both incentive stock options and nonstatutory stock options
under the Internal Revenue Code, and generally have a term of ten years.
Recipients of restricted stock do not pay any cash consideration to the
Company for the shares, have the right to vote all shares subject to such grant,
and receive all dividends with respect to such shares, whether or not the shares
have vested.
As of December 31, 1995, the total number of available shares to grant under
the plans (consisting of either restricted stock or options) was 559,714.
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE J -- STOCK PLANS (CONTINUED)
The following table reflects activity under all stock plans from January 1,
1993 through December 31, 1995, and the exercise prices:
<TABLE>
<CAPTION>
STOCK OPTION PLANS
--------------------------
RESTRICTED NUMBER OF EXERCISE PRICE
STOCK PLANS SHARES PER SHARE
----------- ---------- --------------
<S> <C> <C> <C>
Outstanding, January 1, 1993......................................................... 466,300 2,921,808 $ 3.55 - 9.42
Granted............................................................................ 142,938 1,415,942 $ 6.17 - 12.63
Exercised.......................................................................... -- (1,085,032) $ 3.76 - 8.07
Restrictions lapsed................................................................ (99,959) -- --
Forfeited.......................................................................... (57,678) (310,218) $ 4.31 - 10.73
----------- ---------- --------------
Outstanding, December 31, 1993....................................................... 451,601 2,942,500 $ 3.55 - 12.63
Granted............................................................................ 344,814 836,884 $15.00 - 24.00
Exercised.......................................................................... -- (463,515) $ 4.31 - 11.50
Restrictions lapsed................................................................ (156,100) -- --
Forfeited.......................................................................... (13,647) (182,808) $ 4.31 - 12.63
----------- ---------- --------------
Outstanding, December 31, 1994....................................................... 626,668 3,133,061 $ 3.55 - 24.00
Granted............................................................................ 248,392 690,631 $21.00 - 41.875
$ 19.625 -
Exercised.......................................................................... -- (620,407) 41.875
Restrictions lapsed................................................................ (187,771) -- --
Forfeited.......................................................................... (14,282) (180,669) $4.305 - 41.875
----------- ---------- --------------
Outstanding, December 31, 1995....................................................... 673,007 3,022,616 $3.55 - 41.875
----------- ---------- --------------
----------- ---------- --------------
</TABLE>
As of December 31, 1995, an aggregate of 1,208,798 options to purchase
common stock were vested.
NOTE K -- PREFERRED SHARE PURCHASE RIGHTS
Pursuant to the Company's stockholder rights agreement, each share of common
stock carries one right to purchase one two-hundredth of a share of preferred
stock. The rights become exercisable in certain limited circumstances involving
a potential business combination transaction or an acquisition of shares of the
Company and are exercisable at a price of $32.50 per right, subject to
adjustment. Following certain other events after the rights become exercisable,
each right entitles its holder to purchase for $32.50 an amount of common stock
of the Company, or, in certain circumstances, securities of the acquiror, having
a then-current market value of twice the exercise price of the right. The rights
are redeemable and may be amended at the Company's option before they become
exercisable. Until a right is exercised, the holder of a right has no rights as
a stockholder of the Company. The rights expire on July 23, 2000.
NOTE L -- INCOME PER SHARE
Income per fully diluted share has been computed using the weighted average
number of shares of fully diluted common stock and common stock equivalents
outstanding during each period (29,708,000, 28,484,000 and 25,260,000 shares for
the years ending December 31, 1995, 1994 and 1993, respectively). An assumed
conversion of the Convertible Debentures was not dilutive to income per share in
1993 (see Note E).
16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE M -- QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tabulation shows certain quarterly financial data for 1995 and
1994 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
QUARTER
-------------------------------------
1995 1 2 3 4 YEAR
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net service revenues........................................ $144,739 $148,570 $159,303 $175,914 $628,526
Gross margin................................................ 56,039 57,732 62,196 68,110 244,077
Income before income taxes.................................. 15,502 16,053 17,865 19,669 69,089
Net income.................................................. 9,005 9,350 10,463 11,480 40,298
Net income per share........................................ .31 .32 .35 .38 1.36
<CAPTION>
QUARTER
-------------------------------------
1994 1 2 3 4 YEAR
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net service revenues........................................ $99,896 $106,514 $114,903 $125,015 $446,328
Gross margin................................................ 38,624 41,369 44,644 48,364 173,001
Income before income taxes.................................. 9,826 10,848 11,666 12,867 45,207
Net income.................................................. 5,604 6,273 6,742 7,498 26,117
Net income per share........................................ .20 .22 .24 .26 .92
</TABLE>
NOTE N -- SEGMENT REPORTING
Information about the Company's operations in different geographic locations
for each of the three years in the period ended December 31, 1995, is shown
below. The Company's areas of operations outside of the United States include
Canada, the United Kingdom, Belgium, France and the Netherlands. Revenues
represent total net revenues from the respective geographic areas. Operating
income is net revenues less operating costs and expenses pertaining to specific
geographic areas. Foreign operating income reflects charges for U.S. management
fees and amortization of intangible assets of $992,000, $956,000 and $917,000
for the years ended December 31, 1995, 1994 and 1993, respectively. Domestic
operating income reflects charges for amortization of intangibles of $4,307,000,
$4,137,000 and $3,841,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. Identifiable assets are those assets used in the geographic areas
and are after elimination of intercompany balances.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues
Domestic........................................ $564,564 $404,852 $280,266
Foreign......................................... 63,962 41,476 25,900
-------- -------- --------
$628,526 $446,328 $306,166
-------- -------- --------
-------- -------- --------
Operating Income
Domestic........................................ $ 63,861 $ 44,700 $ 26,294
Foreign......................................... 4,765 2,077 (745)
-------- -------- --------
$ 68,626 $ 46,777 $ 25,549
-------- -------- --------
-------- -------- --------
Assets
Domestic........................................ $267,487 $200,329 $180,778
Foreign......................................... 33,653 27,432 23,820
-------- -------- --------
$301,140 $227,761 $204,598
-------- -------- --------
-------- -------- --------
</TABLE>
17
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS
OF ROBERT HALF INTERNATIONAL INC.:
We have audited the accompanying consolidated statements of financial
position of Robert Half International Inc. (a Delaware corporation) and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Robert Half International
Inc. and subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
January 26, 1996
18
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10 through 13 of Part III is incorporated
by reference from the registrant's Proxy Statement, under the captions
"NOMINATION AND ELECTION OF DIRECTORS," "BENEFICIAL STOCK OWNERSHIP,"
"COMPENSATION OF DIRECTORS," "COMPENSATION OF EXECUTIVE OFFICERS" AND
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN
TRANSACTIONS," which Proxy Statement will be mailed to stockholders in
connection with the registrant's annual meeting of stockholders which is
scheduled to be held in May 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company and its
subsidiaries are included in Item 8 of this report:
Consolidated statements of financial position at December 31, 1995 and
1994.
Consolidated statements of income for the years ended December 31, 1995,
1994 and 1993.
Consolidated statements of stockholders' equity for the years ended
December 31, 1995, 1994 and 1993.
Consolidated statements of cash flows for the years ended December 31,
1995, 1994 and 1993.
Notes to consolidated financial statements.
Report of independent public accountants.
Selected quarterly financial data for the years ended December 31, 1995 and
1994 are set forth in Note M - Quarterly Financial Data (Unaudited) included
in Item 8 of this report.
2. FINANCIAL STATEMENT SCHEDULES
Schedules I through V have been omitted as they are not applicable.
3. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit
3.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1994.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and
Manufacturers Hanover Trust Company of California, incorporated by
reference to (i) Exhibit 1 to the Registrant's Registration Statement on
Form 8-A for its Preferred Share Purchase Rights, which Registration
Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A
Amendment No. 2 filed on December 2, 1993.
10.1 Credit Agreement dated as of November 1, 1993, among the Registrant,
NationsBank of North Carolina, N.A. and Bank of America National Trust and
Savings Association. The Second Amendment to the Credit Agreement is filed
with this Annual Report on Form 10-K for the fiscal year ended December 31,
1995. The original Credit Agreement and the First Amendment thereto are
incorporated by reference to Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1993 and
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995.
10.2 Reorganization and Distribution Agreement between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.9 to
Registrant's Registration Statement on Form S-1 (No. 33-15171).
10.3 Agreement of Assignment and Assumption of Rights and Obligations under the
Indenture between the Registrant and BF Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
10.4 Assumption of Obligations and Liabilities between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987.
10.5 Pledge and Security Agreement between the Registrant and BF Enterprises,
Inc., incorporated by reference to Exhibit 10.10 to Registrant's
Registration Statement on Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.11 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
*10.7 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Tenth Amendment to the Employment Agreement
is filed with this Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. The original Employment Agreement and the first nine
amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1993, (viii) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 and (ix) Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995.
*10.8 Key Executive Retirement Plan - Level II, incorporated by reference to
Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
*10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant
and Harold M. Messmer, Jr. The Eighth Amendment to the Retirement Agreement
is filed with this Annual Report on form 10-K for the fiscal year ended
December 31, 1995. The original Retirement Agreement and the first seven
amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1993, (v) Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 and (vi) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1995.
*10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988 and Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit
10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986 and Exhibit 10.6 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.12 Outside Directors' Option Plan.
*10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1994.
*10.14 StockPlus Plan, as amended.
*10.15 1993 Incentive Plan.
*10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
*10.17 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.17
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
*10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for Directors of the Registrant,
incorporated by reference to (i) Exhibit 10.27 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii)
Exhibit 10.19 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993.
*10.20 Form of Indemnification Agreement for Executive Officers of Registrant,
incorporated by reference to Exhibit 10.28 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.21 Senior Executive Retirement Plan.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
27 Financial Data Schedule.
<FN>
- ------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14(c) of Form 10-K.
</TABLE>
(b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during the
fiscal quarter ending December 31, 1995.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
Date: March 25, 1996 By: /S/ M. KEITH WADDELL
-----------------------------------
M. Keith Waddell
Senior Vice President, Chief
Financial
Officer and Treasurer
(Principal Financial Officer)
22
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: March 25, 1996 By: /S/ HAROLD M. MESSMER, JR.
------------------------------------------
Harold M. Messmer, Jr.
Chairman of the Board, President, Chief
Executive Officer,
and a Director
(Principal Executive Officer)
Date: March 25, 1996 By: /S/ ANDREW S. BERWICK, JR.
------------------------------------------
Andrew S. Berwick, Jr., Director
Date: March 25, 1996 By: /S/ FREDERICK P. FURTH
------------------------------------------
Frederick P. Furth, Director
Date: March 25, 1996 By: /S/ EDWARD W. GIBBONS
------------------------------------------
Edward W. Gibbons, Director
Date: March 25, 1996 By: /S/ FREDERICK A. RICHMAN
------------------------------------------
Frederick A. Richman, Director
Date: March 25, 1996 By: /S/ THOMAS J. RYAN
------------------------------------------
Thomas J. Ryan, Director
Date: March 25, 1996 By: /S/ J. STEPHEN SCHAUB
------------------------------------------
J. Stephen Schaub, Director
Date: March 25, 1996 By: /S/ M. KEITH WADDELL
------------------------------------------
M. Keith Waddell
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
Date: March 25, 1996 By: /S/ BARBARA J. FORSBERG
------------------------------------------
Barbara J. Forsberg
Vice President and Controller
(Principal Accounting Officer)
</TABLE>
23
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
<C> <S> <C>
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit
3.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1994.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and
Manufacturers Hanover Trust Company of California, incorporated by
reference to (i) Exhibit 1 to the Registrant's Registration Statement on
Form 8-A for its Preferred Share Purchase Rights, which Registration
Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A
Amendment No. 2 filed on December 2, 1993.
10.1 Credit Agreement dated as of November 1, 1993, among the Registrant,
NationsBank of North Carolina, N.A. and Bank of America National Trust and
Savings Association. The Second Amendment to the Credit Agreement is filed
with this Annual Report on Form 10-K for the fiscal year ended December 31,
1995. The original Credit Agreement and the First Amendment thereto are
incorporated by reference to Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1993 and
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995.
10.2 Reorganization and Distribution Agreement between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.9 to
Registrant's Registration Statement on Form S-1 (No. 33-15171).
10.3 Agreement of Assignment and Assumption of Rights and Obligations under the
Indenture between the Registrant and BF Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
10.4 Assumption of Obligations and Liabilities between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987.
10.5 Pledge and Security Agreement between the Registrant and BF Enterprises,
Inc., incorporated by reference to Exhibit 10.10 to Registrant's
Registration Statement on Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.11 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
<C> <S> <C>
*10.7 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Tenth Amendment to the Employment Agreement
is filed with this Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. The original Employment Agreement and the first nine
amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1993, (viii) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 and (ix) Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995.
*10.8 Key Executive Retirement Plan - Level II, incorporated by reference to
Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
*10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant
and Harold M. Messmer, Jr. The Eighth Amendment to the Retirement Agreement
is filed with this Annual Report on form 10-K for the fiscal year ended
December 31, 1995. The original Retirement Agreement and the first seven
amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1993, (v) Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 and (vi) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1995.
*10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988 and Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit
10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986 and Exhibit 10.6 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.12 Outside Directors' Option Plan.
*10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
<C> <S> <C>
*10.14 StockPlus Plan, as amended.
*10.15 1993 Incentive Plan.
*10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
*10.17 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.17
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
*10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for Directors of the Registrant,
incorporated by reference to (i) Exhibit 10.27 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii)
Exhibit 10.19 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993.
*10.20 Form of Indemnification Agreement for Executive Officers of Registrant,
incorporated by reference to Exhibit 10.28 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.21 Senior Executive Retirement Plan.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
27 Financial Data Schedule.
<FN>
- ------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14(c) of Form 10-K.
</TABLE>
<PAGE>
EXHIBIT 10.1
SECOND AMENDMENT
Dated as of December 19, 1995
This SECOND AMENDMENT is among Robert Half International Inc., a Delaware
corporation (the "Company"), the banks parties to the Credit Agreement referred
to below (the "Banks"), NationsBank, N.A. (formerly known as NationsBank of
North Carolina, N.A.), as administrative agent (the "Administrative Agent") for
the Banks thereunder, and NationsBank, N.A. and Bank of America National Trust
and Savings Association, each as co-agent and co-arranger (referred to herein
collectively as the "Co-Agents").
PRELIMINARY STATEMENTS:
(1) The Company, the Administrative Agent, the Co-Agents and the
Banks have entered into a Credit Agreement dated as of November 1, 1993, and an
amendment thereto dated as of June 1, 1995 (said Credit Agreement as so amended
being the "Credit Agreement"; the terms defined therein being used herein as
therein defined unless otherwise defined herein).
(2) The Company and the Majority Banks have agreed to further amend
the Credit Agreement as hereinafter set forth.
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement
is, effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 hereof, hereby amended as follows:
(a) Section 1.01 is amended by deleting the definition of "Interest
Coverage Ratio" in its entirety.
(b) The definition of "Minimum Net Worth" contained in Section 1.01
is amended in full to read as follows:
"MINIMUM NET WORTH' shall mean, as at any date, for the Company and
its Consolidated Subsidiaries (determined on a consolidated basis in
accordance with GAAP), an amount equal to $120,000,000, adjusted
cumulatively for each of the following for periods after January 1,
1995 (such adjustments determined in accordance with GAAP except as
modified pursuant to the terms of clauses (a), (b), (e) or (f)): PLUS
(a) all additions to shareholders' equity (other than additions
included in clause (c), (d) or (e) below); MINUS (b) [intentionally
omitted]; PLUS or MINUS (c) adjustments in deferred compensation;
PLUS or MINUS (d) any foreign currency translation adjustments; PLUS
(e) 50% of Net Income for each fiscal quarter; MINUS (f)
[intentionally omitted]. In determining
<PAGE>
Minimum Net Worth, there shall be no adjustments for net losses, if
any."
(c) Section 8.09 is amended by deleting the last proviso at the end
thereof and substituting for such proviso the following:
"PROVIDED, HOWEVER, that (x) the aggregate amount of Restricted
Payments by the Company (or by its Active Subsidiaries to Persons
other than the Company) pursuant to clause (a)(i) and repurchases and
redemptions by the Company (or by its Active Subsidiaries from Persons
other than the Company) pursuant to clause (b)(i) above in any fiscal
quarter (1) shall not be subject to any limitation in the event the
Total Indebtedness to Cash Flow Ratio is less than or equal to 2.0 to
1 during such fiscal quarter and (2) in the event the Total
Indebtedness to Cash Flow Ratio is greater than 2.0 to 1 during such
fiscal quarter, shall not exceed an amount equal to the sum of (A)
$25,000,000, as decreased by the amount of Restricted Payments, stock
purchases or redemptions that the Company and its Active Subsidiaries
credited against the amount under this clause (A) and made during any
fiscal quarter during which the Total Indebtedness to Cash Flow Ratio
was greater than 2.0 to 1.0, plus (B) 50% of Net Income for the prior
fiscal quarter, as increased by the amount of Restricted Payments,
stock purchases or redemptions that the Company and its Active
Subsidiaries could have, but did not, make as a result of this clause
(B) during each preceding fiscal quarter during which the Total
Indebtedness to Cash Flow Ratio was greater than 2.0 to 1.0 and (y)
[intentionally omitted]."
(d) Section 8.12 is amended by deleting the number "4.25" therein and
substituting for such number the number "3.5".
(e) Section 8.14 is deleted in full.
(f) Section 8.20 is deleted in full.
(g) Section 8.24 is amended in full to read as follows:
"8.24 RESTRICTED ACQUISITIONS. The Company will not, nor will it
permit any of its Subsidiaries to, make any acquisition of capital
stock, partnership or other ownership interests in, or the business
Property of, any other Person (a "RESTRICTED ACQUISITION"), unless
such Restricted Acquisition shall be in the employment services
industry or in another services industry that is related to the
Company's employment services customer base or base of
2
<PAGE>
temporary employees, and (ii) shall not be a hostile acquisition
unless the Borrower has previously obtained the consent of all of
the Banks. Investments permitted under clause (a), (b), (c), (d)(ii),
(e), (g) or (h) of Section 8.08 shall not be subject to this
Section 8.24."
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, the Administrative Agent shall have received (a)
counterparts of this Amendment executed by the Company, the Co-Agents and the
Majority Banks and (b) counterparts of the Consent appended hereto (the
"Consent"), executed by each Guarantor and Pledgor.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:
(a) Upon the date of effectiveness of this Amendment, no Default under
the Credit Agreement has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
Amendment are within the Company's corporate powers, have been duly
authorized by all necessary corporate action and do not contravene (i) the
Company's charter or by-laws, or (ii) law or any contractual restriction
binding on or affecting the Company.
(c) No authorization, approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Company
of this Amendment.
(d) This Amendment constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
(e) The representations and warranties made by the Company in Section
7 of the Credit Agreement and by each Obligor in each of the other Basic
Documents to which it is a party are true and correct as of the date of
effectiveness of this Amendment as if made on such date (or, if any such
representation and warranty is expressly stated to have been made as of a
specific date, as of such specific date), except that, solely for the
purpose of this Section 3(e), (i) the representations and warranties made
by the Company in Section 7.02 of the Credit Agreement shall be deemed to
be made with respect to the most recent audited and unaudited financial
statements delivered by the Company pursuant to Section 8.01 of the Credit
Agreement, and (ii) all references in Section 7 of the Credit Agreement to
Schedule(s) I, III, V and VI to the Credit Agreement shall be deemed to
refer to the updated schedules attached as Schedule(s) I, III, V and VI to
this Amendment.
3
<PAGE>
SECTION 4. REFERENCE TO AND EFFECT ON THE BASIC DOCUMENTS.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the other Basic Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other Basic documents are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Bank or the Administrative Agent under any of the Basic
Documents, nor constitute a waiver of any provision of any of the Basic
Documents.
SECTION 5. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 6. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of California.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
ROBERT HALF INTERNATIONAL INC.
By: /s/ M. KEITH WADDEL
------------------------------
Title: SR. VICE PRESIDENT
NATIONSBANK, N.A., as Administrative
Agent, Co-Agent, Co-Arranger and a Bank
By: /s/ E. BROOKE BERG
------------------------------
Title: VICE PRESIDENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Co-
Agent, Co-Arranger and a Bank
By: /s/ CATHLEEN STARK
------------------------------
Title: VICE PRESIDENT
UNION BANK, as a Bank
By: /s/ B.T. MADIGAN
------------------------------
Title: VICE PRESIDENT
By: /s/ HEATHER GISVOLD
------------------------------
Title: CREDIT OFFICER
5
<PAGE>
EXHIBIT 10.7
TENTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Tenth Amendment to Employment Agreement is made and entered into as of
January 1, 1996, by and between Robert Half International Inc. (formerly Boothe
Financial Corporation), a Delaware corporation, ("Corporation") and Harold M.
Messmer, Jr. ("Officer").
1. The last sentence of Section 3.1 of the Employment Agreement dated as of
October 2, 1985, as amended, between Corporation and Officer (the "Employment
Agreement") is hereby amended to read in its entirety as follows:
"Effective as of January 1, 1996, the Base Salary shall in no event be
less than $387,122 per annum."
2. In all other respects, the Employment Agreement is hereby ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
effective as of the day and year first written above.
ROBERT HALF INTERNATIONAL INC.
By: /S/ M. KEITH WADDELL
-----------------------------------
M. Keith Waddell
Senior Vice President
/S/ HAROLD M. MESSMER, JR.
-----------------------------------
Harold M. Messmer, Jr.
<PAGE>
Exhibit 10.9
EIGHTH AMENDMENT TO RETIREMENT AGREEMENT
This Eighth Amendment to the Key Executive Retirement Plan -- Level II
Agreement dated November 14, 1985 (the "Retirement Agreement") between Robert
Half International Inc. (formerly Boothe Financial Corporation), a Delaware
corporation, ("Corporation") and Harold M. Messmer, Jr. ("Messmer") is
entered into as of November 3, 1995.
1. The Retirement Agreement is hereby amended as follows:
(a) Section 1(g) is amended by deleting all language beginning with
"(i) the annuity" and ending with "amended or (iii)".
(b) The first sentence of Section 1(g) is amended by inserting
"subsequent to November 1, 1995" at the end thereof.
(c) Section 2(b)(i) is amended by adding the following at the end
thereof:
"; and, provided further, that if Participant's Designated Beneficiary
at the time of his death is his wife, then after the aforesaid total of 180
monthly payments have been made, she shall continue to receive thereafter
monthly payments in an amount equal to 50% of the benefit until (a) her
death, if she is the person who was Participant's wife at the time of
execution of the Eighth Amendment to Retirement Agreement, or (b) the earlier
of her death or July 31, 2031, if she was not his wife as of the date of
execution of the Eighth Amendment to Retirement Agreement"
(d) Section 5 is amended to read in its entirety as follows:
If, as a result of a Change in Control, the increase in benefits
resulting therefrom causes Participant to incur an excise tax obligation
pursuant to Section 4999 of the Internal Revenue Code, then the Company shall
reimburse Participant for such excise tax and for any additional income or
excise taxes resulting from such reimbursement, such that there is no net
reduction in benefits to Participant due to Section 4999. For purposes of the
foregoing sentence, the excise tax resulting from the increase in benefits
shall be deemed to be the excess of the excise tax imposed by such Section
4999 over the excise tax that would have been imposed by such Section 4999,
if any,
<PAGE>
had there been no increase in benefits hereunder as a result of the Change in
Control.
(e) The first sentence of Section 7(a) is amended by deleting "of the
Internal Revenue Service's model rabbi trust set forth in Revenue Procedure
92-64" and inserting "attached hereto" in its place.
(f) The third sentence of Section 7(a) is amended by deleting "three
year".
(g) The first sentence of Section 7(b) is amended by deleting "first
day of the fourth month" and inserting "last day of the third month" in its
place.
(h) The first sentence of Section 7(b) is amended by deleting
"beneficiaries" and inserting "Designated Beneficiary" in its place.
(i) The sentence in Section 7(b) beginning "In addition," is amended by
deleting "on substantially such terms and conditions".
(j) Section 7(c), reading as follows, is added:
"(c) For purposes of Sections 7(a) and 7(b), the current actuarial
value of the Company's obligations, as specified therein, shall equal the
"single premium required" to purchase for the Participant a nonqualified
annuity from an insurance company rated AAA by both Moody's and Standard &
Poor's to cover such obligations. The Company shall solicit bids from at
least three insurance carriers meeting the ratings requirement specified
herein, and the average of the single premium bids obtained shall be the
"single premium required"."
2. In all other respects, the Retirement Agreement is ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on
November 10, 1995.
ROBERT HALF INTERNATIONAL INC.
By M. KEITH WADDELL
---------------------------
M. Keith Waddell
Senior Vice President
and Chief Financial Officer
HAROLD M. MESSMER, JR.
---------------------------
Harold M. Messmer, Jr.
-2-
<PAGE>
EXHIBIT 10.12
OUTSIDE DIRECTORS' OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
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
<PAGE>
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.
1.9. 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
<PAGE>
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 maximum number of shares of Stock
that may be issued upon the exercise of Options is 200,000. The shares of
Stock covered by the portion of any Option that expires or otherwise
terminates unexercised under this Plan shall become available again for
<PAGE>
grant. The number of shares of Stock covered by Options is subject to
adjustment in accordance with Section 5.8.
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.
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 5,000 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 5,000 shares of Stock.
Otherwise, the Option shall be for 4,000 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
<PAGE>
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.
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.
<PAGE>
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.
<PAGE>
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.
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
<PAGE>
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 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
<PAGE>
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 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.
<PAGE>
EXHIBIT 10.14
ROBERT HALF INTERNATIONAL INC.
STOCKPLUS PLAN
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 a committee of the Board of Directors of
RHII, the composition and the size of which shall cause such Administrator to
be "disinterested" within the meaning of the General Rules and Regulations
promulgated pursuant to Section 16 of the Exchange Act. If such
Administrator is composed of "disinterested persons" within the meaning of
such General Rules and Regulations, then any person who is appointed a member
of such Administrator and who accepts appointment shall, by virtue thereof,
be ineligible for the time period specified in such General Rules and
Regulations to be granted an Option under the Plan. Unless otherwise
determined by the Board of Directors, the Administrator shall be the
Compensation Committee of the Board of 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.
<PAGE>
(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
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 1,895,000 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
<PAGE>
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
<PAGE>
the date of exercise. 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
<PAGE>
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 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
<PAGE>
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.
<PAGE>
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.
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.
<PAGE>
EXHIBIT 10.15
ROBERT HALF INTERNATIONAL INC.
1993 INCENTIVE PLAN
1. PURPOSES. The principal purposes of the Robert Half
International Inc. 1993 Incentive Plan (the "Plan") are: (a) to improve
individual employee performance by providing long-term incentives and rewards
to key employees of the Company, (b) to assist the Company in attracting,
retaining and motivating key employees with experience and ability, and (c)
to align the interests of such employees with those of the Company's
stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise,
the following terms, when used in this Plan, shall have the meanings set
forth below:
(a) "Administrator" means a committee of the Board of Directors of
the Company, the composition and the size of which shall cause such
Administrator to be "disinterested" within the meaning of the General Rules
and Regulations promulgated pursuant to Section 16 of the Exchange Act.
Unless otherwise determined by the Board of Directors, the Administrator
shall be the Compensation Committee of the Board of Directors.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the
following:
(i) A Schedule 13D or 13G is filed pursuant to the Exchange
Act indicating that any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act) has become the holder of more than forty
percent (40%) of the outstanding Voting Shares. For purposes of calculating
the percentage of Voting Shares, such person or group, but no other person or
group, shall be deemed the owner of any Voting Shares which such person or
group may acquire upon conversion of securities or upon the exercise of
options, warrants or rights.
(ii) As a result of or in connection with any cash tender
offer, merger, or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of
the Company just prior to such event shall cease within one year to
constitute a majority of the Board.
(iii) The Company's stockholders approve a definitive
agreement providing for a transaction in which
<PAGE>
the Company will cease to be an independent publicly-owned corporation.
(iv) The stockholders of the Company approve a definitive
agreement (i) to merge or consolidate the Company with or into another
corporation in which the holders of the Stock immediately before such merger
or reorganization will not, immediately following such merger or
reorganization, hold as a group on a fully-diluted basis both the ability to
elect at least a majority of the directors of the surviving corporation and
at least a majority in value of the surviving corporation's outstanding
equity securities, or (ii) to sell or otherwise dispose of all or
substantially all of the assets of the Company.
(v) An Offer is made by a person or group (as such terms are
defined in Section 13(d)(3) of the Exchange Act) and such Offer has resulted
in such person or group holding an aggregate of forty percent (40%) or more
of the outstanding Voting Shares. For purposes of this Section 1(c)(v),
Voting Shares held by such person or group shall be calculated in accordance
with the last sentence of Section 1(c)(i) hereof.
(d) "Common Stock" or "Stock" means Robert Half International Inc.
Common Stock, par value $1.001 per share.
(e) "Company" means Robert Half International Inc., its divisions
and direct and indirect subsidiaries.
(f) "Continuous Employment" means employment with the Company or
any Subsidiary without any termination or leave of absence, except for a
leave of absence approved by the Company or any Subsidiary which is less than
six consecutive months in duration.
(g) "Disability" or "Disabled" shall mean (i) a physical or mental
condition which, in the judgment of the Administrator based on competent
medical evidence satisfactory to the Administrator (including, if required by
the Administrator, medical evidence obtained by an examination conducted by a
physician selected by the Administrator), renders Holder unable to engage in
any substantial gainful activity for the Company and which condition is
likely to result in death or to be of long, continued and indefinite
duration, or (ii) a judicial declaration of incompetence.
(h) "Eligible Employee" means an employee of the Company or any
Subsidiary (including an employee who is a director and/or officer) who, as
determined by the Administrator in its sole discretion, has and exercises
management functions and responsibilities.
<PAGE>
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means the closing sales price on the New
York Stock Exchange or the NASDAQ National Market System, as the case may be,
on the date the value is to be determined as reported in THE WALL STREET
JOURNAL (Western Edition). If there are no trades on such date, the closing
price on the latest preceding business day upon which trades occurred shall
be the Fair Market Value. If the Stock is not listed in the New York Stock
Exchange or quoted on the NASDAQ National Market System, the Fair Market
Value shall be determined in good faith by the Administrator.
(k) "Grant" shall mean an Option or a Restricted Stock Award.
(l) "Grant Date" means the date a Grant is made under the Plan.
(m) "Holder" means the recipient of a Grant pursuant to this Plan.
(n) "Issue Date" means the date on which shares of Stock subject to
a Restricted Stock Award are issued or transferred by the Company to the
account of an Eligible Employee who has received such grant.
(o) "Minimum Withholding Taxes" means any applicable federal, state
and local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject to
a Restricted Stock Award, (ii) the exercise of an Option, or (iii) the making
of an election under Section 83(b) of the Internal Revenue Code with respect
to a Restricted Stock Award.
(p) "Offer" means a tender offer or an exchange offer for the
Company's Stock.
(q) "Option" or "Stock Option" means a right granted under the Plan
to a Holder to purchase shares of Common Stock at a fixed price for a
specified period of time.
(r) "Option Price" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(s) "Optionee" means an Eligible Employee who has received a Stock
Option granted under the Plan.
(t) "Restricted Stock Award" means a grant described in Section 6
of the Plan.
<PAGE>
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Subsidiary" means a "subsidiary" corporation as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended.
(w) "Vested" means that portion of a Grant with respect to which
the Vesting Date has arrived or passed.
(x) "Vesting Date" means the date specified in Section 5 or 6
hereof, as the case may be, or such other date as shall be established by the
Administrator or otherwise on the Grant Date or thereafter.
(y) "Voting Shares" means the outstanding shares of the Company
entitled to vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which
Grants may be made during any calendar year shall be that number which is
equal to 1.5% of the number of issued and outstanding shares of Common Stock
of the Company (excluding treasury shares) as of January 1 of such year
(January 1, 1993, in the case of the first year). Any shares of Common Stock
covered by Options which have terminated or expired prior to exercise or have
been cancelled without value shall not be counted against the annual limit
and shall be available for further grants hereunder and shares constituting
the portion of a Restricted Stock Award that is forfeited before any
dividends are paid upon such forfeited shares shall not be counted against
the annual limit and shall be available for further grants hereunder. The
foregoing number of shares available for Grants shall be subject to any
adjustments which may be made pursuant to Section 12 hereof. Shares of Stock
used for Options may be either shares of authorized but unissued Common Stock
or treasury shares or both. Shares of Stock used for Restricted Stock Awards
shall be treasury shares to the extent that treasury shares are available,
and, if no treasury shares are available, Restricted Stock Awards shall be
authorized but unissued Common Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in
its sole discretion, but subject to all of the provisions of the Plan,
determine which Eligible Employees will be given Grants under the Plan, the
number of Options or shares of Restricted Stock to be granted to each such
Eligible Employee and the terms, conditions and restrictions of each such
Grant. In making such 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
<PAGE>
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
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
<PAGE>
establish procedures relating to such exercises. An Option is exercisable
during a Holder's lifetime only by the Holder or, with respect to options
that are not designated as Incentive Stock Options, under such other
circumstances as may be permitted by Rule 16b-3, or any successor rule, under
the Exchange Act and all interpretations of the staff of the Securities and
Exchange Commission thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash,
check or delivery of shares of Common Stock that have been owned by Holder
for at least six months. If all or a portion of the purchase price is paid
by delivery of shares, the shares shall be valued at the Fair Market Value of
such shares on the date of exercise. In addition, the Administrator may, in
its discretion, authorize payment of the Option Price and of Minimum
Withholding Taxes by (i) full recourse promissory note (secured or
unsecured), payable on such terms and bearing such interest as the
Administrator may determine or (ii) delivery (on a form acceptable to the
Administrator) of an irrevocable direction to a securities broker to sell
shares of Common Stock and to deliver part of the sales proceeds to the
Company in payment of the full exercise price and Minimum Withholding Taxes
and receipt of written confirmation from the securities broker of receipt of
such irrevocable direction, the number of shares sold, the price at which
sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable
except by will, by the laws of descent and distribution, or, with respect to
options that are not designated as Incentive Stock Options, pursuant to a
qualified domestic relations order or under such other circumstances as may
be permitted by Rule 16b-3, or any successor rule, under the Exchange Act and
all interpretations of the staff of the Securities and Exchange Commission
thereunder.
(h) DISPOSITION OF ACQUIRED STOCK. No share of Stock acquired upon
the exercise of an Option may be sold, assigned, pledged, transferred or
otherwise conveyed in any manner until six months after the Grant Date for
such Option.
6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made
under the Plan shall contain the following terms, conditions and restrictions
and such additional 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
<PAGE>
and other terms and conditions described in the Plan and in the instrument
evidencing such Restricted Stock Award, the Eligible Employee shall be a
Holder, and the Company shall cause to be issued or transferred to the name
of the Holder a certificate or certificates for the number of shares of Stock
granted. From and after the Issue Date, the Holder shall have absolute
ownership of such shares of Stock, including the right to vote and to receive
dividends thereon, subject to the terms, conditions and restrictions
described in the Plan and in the instrument evidencing the grant of such
Restricted Stock Award.
(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock
Award may not be sold, assigned, pledged, transferred or otherwise conveyed
in any manner until the later of (i) the Vesting Date for such shares and
(ii) six months after the Grant Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator on
the Grant Date, each Restricted Stock Award shall Vest as to twenty-five
percent (25%) of the Stock covered by such grant on each of the first through
fourth Vesting Dates which occur following the related Grant Date of such
Restricted Stock Award. Notwithstanding the foregoing, the Administrator may
accelerate the lapsing of restrictions on a Restricted Stock Award, in whole
or in part under such terms and conditions as the Administrator deems
appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions
herein to the contrary notwithstanding, a Restricted Stock Award shall
automatically become Vested upon (a) the Death or Disability of the Holder or
(b) the occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder
granted a Restricted Stock Award shall represent in writing that such Holder
acknowledges that, with respect to each Restricted Stock Award held by such
Holder, (i) Minimum Withholding Taxes shall be due with respect to shares of
Stock covered by such award, (ii) payment of Minimum Withholding Taxes to the
Company is the responsibility of Holder and (iii) payment of such Minimum
Withholding Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If
any Holder properly elects within thirty (30) days of the Grant Date to
include in gross income for 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
<PAGE>
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.
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.
(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 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.
7. WITHHOLDING TAXES. In order to enable the Company to meet any
applicable foreign, federal (including FICA), state and local withholding tax
requirements, a Holder shall be required to pay the Minimum Withholding
Taxes. No share of stock will be delivered to any Holder until Minimum
Withholding Taxes have been paid. At the option of the Holder, withholding
taxes may be paid by reduction in the number of shares deliverable to Holder
(in the case of an Option) or by surrendering a portion of the Restricted
Stock Award to the Company (in either case "Share Reduction"); provided,
however, that Share Reduction may not be used within six months of the Grant
Date. If withholding taxes are paid by Share Reduction, such shares shall be
valued at the Fair Market Value as of the date of exercise or vesting. A
Holder may elect to have additional shares withheld above the amount required
to satisfy Minimum Withholding Taxes. However, total Share Reduction may not
exceed the total taxes that Holder will have to pay (assuming Federal and
state taxes are imposed at his marginal rate) by reason of the exercise or
vesting. In the event that Minimum Withholding Taxes are not paid by Holder,
to the extent permitted by law the Company shall have the right, but not the
obligation, to cause such withholding taxes to be satisfied by Share
Reduction or by offsetting such withholding taxes against amounts otherwise
due from the Company to the Holder.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long
as any restrictions or obligations imposed pursuant hereto shall apply to a
share of Stock (including, but not limited to, the restrictions or
obligations imposed pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7
hereof), each certificate evidencing such share shall bear an appropriate
legend referring to the terms, conditions and restrictions. In addition, the
Company may instruct its transfer agent that shares of Stock evidenced by
such 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
<PAGE>
which Minimum Withholding Taxes have not been paid will be held in custody by
the Company or such bank or other institution designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's
Continuous Employment with the Company or any Subsidiary shall terminate for
any reason, then, with respect to any portion of a Grant that has not Vested
prior to or concurrently with such termination (a) in the case of an Option,
all rights to such portion that has not Vested shall terminate and (b) in the
case of a Restricted Stock Award, all rights to the shares covered by any
portion thereof that has not Vested shall be forfeited; provided, however,
that the Administrator, in its sole discretion within ninety (90) days of
such termination of Continuous Employment, may notify the Holder in writing
that the Holder's rights in such portion that has not Vested will not
terminate or be forfeited and that the Holder shall continue to be the owner
thereof, subject to such continuing restrictions as the Administrator may
prescribe in such notice. Options then held by the Holder which are Vested
at the date of termination shall continue to be exercisable by the Holder,
or, if applicable, Holder's estate, until the earlier of 90 days after such
date or the expiration of such Options in accordance with their terms.
Notwithstanding the foregoing, (i) the Administrator may in its sole
discretion extend the period during which an Option may be exercised
following termination of employment at any time, provided that any such
extension does not exceed the Option's normal termination date, and (ii) if
exercise of an Option during the 90-day period described in the previous
sentence would subject the Holder to liability under Section 16 of the
Exchange Act, such Option shall be exercisable until the earliest of (a) its
normal termination date and (b) seven months after the last transaction in
Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the
Administrator, which shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements,
guidelines and instruments for the administration of the Plan as the
Administrator deems necessary or advisable. The Administrator's powers
include, but are not limited to (subject to the specific limitations
described herein), authority to determine the employees who shall receive
Grants under the Plan, determine the size and applicable terms and conditions
of Grants to be made to such employees, 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
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
EXHIBIT 10.21
ROBERT HALF INTERNATIONAL INC.
SENIOR EXECUTIVE RETIREMENT PLAN
1. INTRODUCTION. This Plan was adopted by the Company to provide
retirement benefits to those individuals, other than any individual holding the
office of Chief Executive Officer or President, who participated in the
Company's Deferred Compensation Plan and, with respect to those individuals,
this Plan shall supersede the Deferred Compensation Plan. The Administrator or
the Chief Executive Officer may also select other Participants to be eligible
for benefits hereunder.
2. DEFINITIONS. As used in this Plan, the following terms have the
meanings set forth below:
2.1 ADMINISTRATOR means the Compensation Committee of the Board.
2.2 BOARD means the Board of Directors of the Company.
2.3 CHANGE IN CONTROL means any of the following events:
(a) 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.
(b) 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.
(c) 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.
(d) 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 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.
(e) 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 2.3(e) Voting Shares held by such person or group shall be
calculated in accordance with the last sentence of Section 2.3(a) hereof.
2.4 COMPANY means Robert Half International Inc., a Delaware corporation.
2.5 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.6 OFFER means a tender offer or an exchange offer for shares of the
Company's Stock.
2.7 PARTICIPANT means any elected executive officer or any key executive,
other than any individual holding the office of Chief Executive Officer or
President, approved by the Administrator or the Chief Executive Officer for
participation in the Plan. The benefits of individuals (other than any
individual holding the office of Chief Executive Officer or President) who had
accounts (whether or
1
<PAGE>
not vested) under the Deferred Compensation Plan shall be transferred to this
Plan, effective December 31, 1995, with interest for 1995 credited at the rate
and as provided in Section 7 hereof instead of at the rate and as provided in
the Deferred Compensation Plan. With respect to the year ended December 31, 1995
those individuals will thereafter be Participants hereunder and will no longer
participate in the Deferred Compensation Plan.
2.8 PLAN means the Senior Executive Retirement Plan.
2.9 VOTING SHARES means the outstanding shares of the Company entitled to
vote for the election of directors.
3. PURPOSE OF THE PLAN. The purpose of the Plan is to attract, retain and
reward Participants by providing them with supplemental income for use after
their retirement. The Plan is designed to qualify as an unfunded ERISA "top-hat"
plan for a select group of management or highly compensated employees of the
Company and its subsidiaries designated by the Administrator.
4. ADMINISTRATION. The Administrator shall have full power to interpret,
construe and administer the Plan, except as otherwise provided in the Plan. The
expense of administering the Plan shall be borne by the Company and shall not be
charged against benefits payable hereunder.
5. DEFERRED COMPENSATION FORMULA. Each Participant shall receive the base
salary and annual cash bonus payable to that Participant for services rendered
in his capacity as an employee of the Company or a designated subsidiary during
the calendar year of participation, plus fifteen percent (15%) of such base
salary and annual cash bonus as deferred compensation pursuant to this Plan,
provided he is employed by the Company on the last day of such calendar year
(December 31, 1995 for the first year). A Participant's allocation of deferred
compensation hereunder shall be deemed to have been made, for all purposes
relating to this Plan, as of the first business day of the year following the
year with respect to which the deferred compensation has been earned.
The Administrator or the Chief Executive Officer may at any time designate
any Participant as entitled to receive a Change in Control Allocation. Once a
Participant is so designated, such designation may not be rescinded. With
respect to any Participant who has been designated as entitled to receive a
Change in Control Allocation, there shall be allocated to such Participant's
account promptly following a Change in Control (if such Participant is employed
by the Company on the date of the Change in Control) an amount equal to the
product of (a) the number of whole years remaining until the Participant attains
age 62 and (b) the last annual allocation made under the Plan. After such Change
in Control Allocation has been made, each subsequent annual allocation under the
Plan for such Participant following the Change in Control and prior to such
Participant's 62nd birthday shall be reduced by an amount equal to the last
annual allocation made to such Participant prior to the Change in Control.
6. SEPARATE ACCOUNTS. The Administrator shall maintain an individual
account under the name of each Participant entitled to allocations pursuant to
the Plan. Each such account shall be adjusted to reflect any amounts transferred
from the Deferred Compensation Plan, deferred compensation credited hereunder,
interest credited on such amounts and any distribution of such amounts
hereunder. The establishment and maintenance of a separate account for each
Participant shall not be construed as giving any person any interest in any
assets of the Company or any right to payment other than as provided hereunder
or any right to participate hereunder or in future years of employment. Such
accounts shall be unfunded and maintained only for bookkeeping convenience;
provided, however, the Company may establish an irrevocable grantor trust and
contribute amounts to such trust to support its obligations hereunder.
7. INVESTMENT PERFORMANCE. Each account shall be credited on the last day
of each calendar year with interest on the balance of such account as of the
first day of the calendar year. Interest credited for a calendar year shall be
at a rate equal to one hundred twenty-five percent (125%) of the Moody's
Corporate bond Yield Average reported in THE WALL STREET JOURNAL on the last
business day of the calendar year (or the valuation date selected by the
Administrator preceding a distribution).
2
<PAGE>
8. VESTING. Each Participant's interest under the Plan shall be
forfeitable upon such Participant's termination of employment for any reason,
except to the extent it becomes vested hereunder. Each Participant's interest,
regardless of when allocated, will be deemed unvested unless and until such
Participant has completed ten years of service with the Company. "Years of
Service" shall be based on the anniversary of the later of the Participant's
date of hire or his or her transfer to Company headquarters. At such time as the
Participant has completed ten years service with the Company, the amount vested
at any given time shall be (a) 50%, if Participant is age 50 or younger, (b) the
sum of (i) 50% and (ii) 4-1/6% times the difference between Participant's age
and 50, if Participant is between age 51 and age 62, or (c) 100%, if Participant
is age 62 or older. In the event of a Change in Control, all amounts credited
under the Plan to each affected Participant shall become fully vested and
nonforfeitable as a result of such event. Notwithstanding the foregoing, amounts
shall vest hereunder in accordance with the terms of any severance agreement or
other written arrangement between the Participant and the Company. In addition
and notwithstanding the foregoing, the accounts transferred to this Plan from
the Company's Deferred Compensation Plan, including any and all investment
performance hereunder, shall continue to vest under the terms of the Deferred
Compensation Plan.
9. TIME OF DISTRIBUTION. No vested amounts shall be payable hereunder
until the first to occur of the following events:
(a) The date of the Participant's complete and total disability, as
determined by the Administrator in its sole discretion (without regard to
eligibility for benefits under any disability plan or program of the Company
and/or its subsidiaries);
(b) The Participant's death; or
(c) The date of the Participant's separation from employment with the
Company and/or its subsidiaries for any reason.
Notwithstanding the foregoing, distribution may occur at an earlier date as
provided in Section 10 hereunder.
All vested amounts will be valued and paid within 90 days following the
occurrence of any such event. If distribution occurs before the end of a year a
Participant shall receive a pro rata amount of deferred compensation under
Section 5 hereof.
10. WITHDRAWALS. The Administrator may direct payment of all or any vested
portion of amounts credited to the account of a Participant upon application by
the Participant. Any such application must show demonstrable financial need for
distribution in order to meet extraordinary medical or medically related
expenses, substantial costs related to residential requirements of the
Participant, family educational expenses in an amount considered by the
Administrator burdensome in relation to the Participant's other available
financial resources for meeting such expenses, extraordinary expenses related to
an unanticipated casualty, accident or other misfortune or any other similar
need approved by the Administrator.
Any such distribution shall be made in the sole discretion of the
Administrator.
11. METHOD OF DISTRIBUTION. Upon termination from the Company, each
Participant shall receive a lump sum distribution of all amounts payable to the
Participant hereunder, unless prior to termination of employment the Participant
elects, and the Administrator consents to, payment upon termination to be made
in the form of installments over a period of time approved by the Administrator
and not extending beyond the life expectancy of the Participant.
12. DEATH OF PLAN PARTICIPANT. In the event that a Participant shall die
at any time prior to complete distribution of all amounts payable to him
hereunder, the remaining unpaid amounts shall be paid to the beneficiary or
beneficiaries designated by the Participant, or in the absence of any such
designation, to his estate in a lump sum distribution, unless the Administrator
consents to installments.
3
<PAGE>
13. PAYMENT IN THE EVENT OF DISABILITY. If a person entitled to any
payment hereunder shall be under a legal disability, or in the sole judgment of
the Administrator shall otherwise be unable to apply such payment to his own
interest and advantage, the Administrator in the exercise of its discretion may
direct the Company to make any such payment in any one (1) or more of the
following ways:
(a) Directly to such person;
(b) To his legal guardian or conservator; or
(c) To his spouse or to any person charged with his support;
to be expended for the benefit of Participant. The decision of the
Administrator shall in each case be final and binding upon all persons in
interest. Any such payment shall completely discharge the obligations of the
Administrator and Company with regard to such payment.
14. ASSIGNMENT. No Participant or beneficiary of a Participant shall have
any right to assign, pledge, hypothecate, anticipate or in any way create a lien
upon any amounts payable hereunder. No amounts payable hereunder shall be
subject to assignment or transfer or otherwise be alienable, either by voluntary
or involuntary act or by operation of law, or subject to attachment, execution,
garnishment, sequestration or other seizure under any legal, equitable or other
process, or be liable in any way for the debts or defaults of Participants and
their beneficiaries, except to the extent permitted by applicable law and
pursuant to the Administrator's receipt and approval of a "qualified domestic
relations order."
15. WITHHOLDING. Any taxes required to be withheld from deferrals or
payments to Participants hereunder shall be deducted and withheld by the
Company.
16. AMENDMENT AND TERMINATION. This Plan may be amended in whole or in
part by action of the Administrator and may be terminated at any time by action
of the Administrator; provided, however, that no such amendment or termination
shall reduce any amount credited hereunder to the extent such amount was
credited prior to the date of amendment or termination; and provided, further,
that the duties and liabilities of the members of the Administrator hereunder
shall not be increased without their consent.
17. RIGHTS OF PARTICIPANTS. The Company's sole obligation to Participants
and their beneficiaries shall be to make payment as provided hereunder. All
payments shall be made from the general assets of the Company, and no
Participant shall have any right hereunder to any specific assets of the Company
or to be retained in the employment of the Company. All amounts of compensation
allocated under this Plan, any property purchased therewith and all income
attributable thereto shall remain the property and rights of the Company subject
to the claims of the Company's general creditors.
18. BINDING PROVISIONS. All of the provisions of this Plan shall be
binding upon all persons who shall be entitled to any benefits hereunder, and
their heirs, and personal representatives.
19. EFFECTIVE DATE. This Plan shall be effective December 31, 1995.
20. GOVERNING LAW. This Plan and all determinations made and actions taken
pursuant hereto shall, to the extent not preempted by ERISA, be governed by the
law of the State of California and construed accordingly.
21. SEVERABILITY. If any provision of this Plan is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Plan shall be deemed valid and
enforceable to the full extent possible.
4
<PAGE>
EXHIBIT 11
EXHIBIT 11 TO FORM 10-K
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Net income..................................................................... $40,298 $26,117 $11,723
------- ------- -------
------- ------- -------
Weighted average number of shares outstanding
Primary:
Common stock............................................................... 28,495 27,365 24,309
Common stock equivalents -- stock options (A).............................. 1,040 971 783
------- ------- -------
Primary shares outstanding................................................. 29,535 28,336 25,092
------- ------- -------
------- ------- -------
Fully Diluted:
Common stock............................................................... 28,495 27,365 24,309
Common stock equivalents -- stock options (A).............................. 1,213 1,119 951
------- ------- -------
Fully diluted shares outstanding........................................... 29,708 28,484 25,260
------- ------- -------
------- ------- -------
Net income per share:
Primary...................................................................... $ 1.36 $ .92 $ .47
Fully diluted................................................................ $ 1.36 $ .92 $ .46
</TABLE>
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF
NAME OF SUBSIDIARY INCORPORATION
- ------------------------------------------------------------------------ --------------------
<S> <C>
RH Holding Company, Inc. California
LegalTeam, Inc. California
Robert Half Licensing, Inc. California
Robert Half of California, Inc. California
Robert Half of Texas G.P. Ltd. Delaware
XYZ-II, Inc. Delaware
Robert Half Incorporated Florida
R-H International Advertising Fund, Inc. Florida
OfficeTeam Inc. Louisiana
Robert Half Corporation Nevada
Robert Half Nevada Staff, Inc. Nevada
R-H Franchises Western Hemisphere, Inc. New York
Robert Half of Philadelphia, Inc. Pennsylvania
RHT, L.P. (a limited partnership) Texas
Fontaine Archer Van de Voorde S.A./N.V. Belgium
S.A. Robert Half N.V. Belgium
Accountemps S.A./N.V. Belgium
Robert Half Canada Inc. Canada
Norman Parsons S.A. (96% owned) France
Accountemps S.A.R.L. France
Robert Half S.A. France
Robert Half Limited United Kingdom
Robert Half Personnel (Midlands) Limited United Kingdom
Envaward Limited United Kingdom
Hatlon Limited United Kingdom
Smiths Recruitment Limited United Kingdom
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated January 26, 1996, included in this Form 10-K into
the Company's previously filed Registration Statements Files No. 33-14706,
33-39204, 33-39187, 33-32623, 33-32622, 33-40795, 33-62138, 33-62140, 33-52617,
33-56639, 33-56641, 33-57763, 33-65401 and 33-65403.
San Francisco, California
March 18, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 41,346 2,638
<SECURITIES> 0 0
<RECEIVABLES> 88,022 62,625
<ALLOWANCES> 3,067 2,600
<INVENTORY> 0 0
<CURRENT-ASSETS> 133,650 67,703
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 301,140 227,761
<CURRENT-LIABILITIES> 55,880 29,627
<BONDS> 1,486 3,133
<COMMON> 29 28
0 0
0 0
<OTHER-SE> 227,901 176,967
<TOTAL-LIABILITY-AND-EQUITY> 301,140 227,761
<SALES> 0 0
<TOTAL-REVENUES> 628,526 446,328
<CGS> 0 0
<TOTAL-COSTS> 384,449 273,327
<OTHER-EXPENSES> 4,767 4,584
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (463) 1,570
<INCOME-PRETAX> 69,089 45,207
<INCOME-TAX> 28,791 19,090
<INCOME-CONTINUING> 40,298 26,117
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 40,298 26,117
<EPS-PRIMARY> 1.36 .92
<EPS-DILUTED> 1.36 .92
</TABLE>
