<PAGE>
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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, 1996
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) 234-6000
------------------------
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 February 28, 1997, the aggregate market value of the Common Stock held
by non-affiliates of the registrant was approximately $2,262,309,000 based on
the closing sale price on that date. This amount excludes the market value of
5,673,627 shares of Common Stock held by registrant's directors and officers and
their affiliates.
As of February 28, 1997, there were outstanding 60,023,397 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 1997, 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.
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<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 three of the ACCOUNTEMPS and ROBERT HALF franchises in 47 separate
transactions, and has acquired 17 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 200
offices in 37 states and 5 foreign countries and placed approximately 129,000
employees on temporary assignment with clients in 1996.
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 150 locations in the United States
and Canada. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and
ROBERT HALF divisions.
1
<PAGE>
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.
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 over
60 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 200 offices in 37 states and five foreign countries. Office managers are
responsible for most activities of their offices, including sales, local
advertising and marketing and recruitment.
2
<PAGE>
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.
EMPLOYEES
The Company has approximately 2,900 full-time staff employees. The Company's
offices placed approximately 129,000 employees on temporary assignments with
clients during 1996. 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 M 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 200 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 December 31, 1996, there were approximately
1,600 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 June 1996:
<TABLE>
<CAPTION>
SALES PRICES
--------------------
1996 HIGH LOW
-------------------------------- -------- ---------
<S> <C> <C>
4th Quarter..................... $41 1/2 $32 5/8
3rd Quarter..................... $40 1/4 $24 1/8
2nd Quarter..................... $30 7/16 $24 3/8
1st Quarter..................... $24 7/8 $19 1/2
<CAPTION>
SALES PRICES
--------------------
1995 HIGH LOW
-------------------------------- -------- ---------
<S> <C> <C>
4th Quarter..................... $22 5/16 $15 15/16
3rd Quarter..................... $17 15/16 $12 5/8
2nd Quarter..................... $14 5/16 $ 9 13/16
1st Quarter..................... $13 5/16 $10 1/2
</TABLE>
No cash dividends were paid in 1996 or 1995. 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 for the last
five years:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net service revenues................................. $ 898,635 $ 628,526 $ 446,328 $ 306,166 $ 220,179
Direct costs of services, consisting of payroll,
payroll taxes and insurance costs for temporary
employees........................................... 545,343 384,449 273,327 188,292 131,875
---------- ---------- ---------- ---------- ----------
Gross margin......................................... 353,292 244,077 173,001 117,874 88,304
Selling, general and administrative expenses......... 246,485 170,684 121,640 88,074 72,136
Amortization of intangible assets.................... 5,405 4,767 4,584 4,251 3,961
Interest (income) expense............................ (2,243) (463) 1,570 3,992 4,301
---------- ---------- ---------- ---------- ----------
Income before income taxes........................... 103,645 69,089 45,207 21,557 7,906
Provision for income taxes........................... 42,543 28,791 19,090 9,834 3,524
---------- ---------- ---------- ---------- ----------
Net income........................................... $ 61,102 $ 40,298 $ 26,117 $ 11,723 $ 4,382
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME PER SHARE:.................................... $ 1.00 $ .68 $ .46 $ .23 $ .09
WEIGHTED AVERAGE NUMBER OF SHARES:................... 61,178 59,417 56,969 50,520 48,014
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Intangible assets, net............................... $ 174,663 $ 155,441 $ 152,824 $ 152,156 $ 143,757
Total assets......................................... 416,012 301,140 227,761 204,598 181,999
Debt financing....................................... 6,611 5,725 4,214 32,740 61,855
Stockholders' equity................................. 308,445 227,930 176,995 133,602 90,972
</TABLE>
All shares and per share amounts have been restated to retroactively reflect
the two-for-one stock splits effected in the form of a stock dividend in both
June 1996 and 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, 1996
Temporary services revenues were $829 million, $577 million and $406 million
for the years ended December 31, 1996, 1995 and 1994, respectively, increasing
by 44% during 1996 and 42% during 1995. The increase in revenues during these
periods reflected in part revenues generated from the Company's
OFFICETEAM-REGISTERED TRADEMARK- and RHI CONSULTING-REGISTERED TRADEMARK-
divisions, which were started in 1991 and 1994, respectively. Permanent
placement revenues were $70 million, $52 million and $40 million for the years
ended December 31, 1996, 1995 and 1994, respectively, increasing by 35% during
1996 and 30% during 1995. Overall revenue increases reflect continued
improvement in demand for the Company's services, which the Company believes is
a result of increased acceptance in the use of professional staffing services.
Revenues from companies acquired during 1996, 1995 and 1994 were not material.
The Company currently has more than 200 offices in 37 states and five
foreign countries. Domestic operations represented 90% of revenues for both the
years ended December 31, 1996 and 1995 and 91% of revenues for the year ended
December 31, 1994. Foreign operations represented 10% of revenues for both the
years ended December 31, 1996 and 1995 and 9% of revenues for the year ended
December 31, 1994.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consists of payroll, payroll taxes
and insurance costs for temporary employees. Gross margin dollars from permanent
placement services are equal to revenues, as there are no direct costs
associated with such revenues. Gross margin dollars for the Company's temporary
services were $283 million, $192 million and $133 million for the years ended
December 31, 1996, 1995 and 1994, respectively, increasing by 47% in 1996 and
44% in 1995. Gross margin amounts equaled 34% of revenues for temporary services
for the year ended December 31, 1996, and 33% for both the years ended December
31, 1995 and 1994, which the Company believes reflects its ability to adjust
billing rates and wage rates to underlying market conditions. Gross margin
dollars for the Company's permanent placement division were $70 million, $52
million and $40 million for each of the years ended December 31, 1996, 1995 and
1994, respectively, increasing by 35% and 30% in 1996 and 1995, respectively.
Selling, general and administrative expenses were $246 million during 1996
compared to $171 million in 1995 and $122 million in 1994. Selling, general and
administrative expenses as a percentage of revenues were 27% in all three of the
years ended December 31, 1996, 1995 and 1994. Selling, general and
administrative expenses consist primarily of staff compensation, advertising and
occupancy costs, most of which generally follow changes in revenues.
The Company allocates the excess of cost over the fair market value of the
net tangible assets first to identifiable intangible assets, if any, and then to
goodwill. Although management believes that goodwill has an unlimited life, the
Company amortizes these costs over 40 years. Management believes that its
strategy of making acquisitions of established companies in established markets
and maintaining its presence in these markets preserves the goodwill for an
indeterminate period. The carrying value of intangible assets is periodically
reviewed by the Company and impairments are recognized when the expected future
operating cash flows derived from such intangible assets is less than their
carrying value. Based upon its most recent analysis, the Company believes that
no material impairment of intangible assets existed at December 31, 1996.
Intangible assets represented 42% of total assets and 57% of total stockholders'
equity at December 31, 1996.
Interest income for the years ended December 31, 1996, 1995 and 1994 was
$2,948,000, $1,237,000 and $144,000, respectively. Interest expense for the
years ended December 31, 1996, 1995 and 1994 was $705,000, $774,000 and
$1,714,000, respectively. These changes reflect an increase in cash and cash
equivalents.
6
<PAGE>
The provision for income taxes was 41% for the year ended December 31, 1996
and 42% for both the years ended December 31, 1995 and 1994. The decrease in
1996 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 and principal payments on
outstanding notes payable. No open market purchases of the Company's stock were
made during the year ended December 31, 1996 and in November 1996 the Company
formally terminated its previously approved 2 million share repurchase program.
For the year ended December 31, 1996, the Company generated $54 million from
operations, used $23 million in investing activities and provided $7 million
from financing activities.
The Company's working capital at December 31, 1996 included $80 million in
cash and cash equivalents. In addition at December 31, 1996, the Company had
available $66 million of its $75 million bank revolving line of credit. The
Company's working capital requirements consist primarily of the financing of
accounts receivable. While there can be no assurances in this regard, the
Company expects that internally generated cash plus the bank revolving line of
credit will be sufficient to support the working capital needs of the Company,
the Company's fixed payments and other obligations on both a short-and long-term
basis. As of December 31, 1996, the Company had no material capital commitments.
The Company's revolving bank line has scheduled reductions in availability
through 2001 when the agreement terminates.
7
<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,
----------------------
1996 1995
---------- ----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................................................. $ 80,181 $ 41,346
Accounts receivable, less allowances of $4,016 and $3,067................................. 125,383 84,955
Other current assets...................................................................... 12,184 7,349
---------- ----------
Total current assets.................................................................... 217,748 133,650
Intangible assets, less accumulated amortization of $39,461 and $33,071................... 174,663 155,441
Other assets.............................................................................. 23,601 12,049
---------- ----------
Total assets............................................................................ $ 416,012 $ 301,140
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses..................................................... $ 15,049 $ 12,631
Accrued payroll costs..................................................................... 66,087 33,853
Income taxes payable...................................................................... 3,883 5,157
Current portion of notes payable and other indebtedness................................... 1,542 4,239
---------- ----------
Total current liabilities............................................................... 86,561 55,880
Notes payable and other indebtedness, less current portion................................ 5,069 1,486
Deferred income taxes..................................................................... 15,937 15,844
---------- ----------
Total liabilities....................................................................... 107,567 73,210
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value, 100,000,000 shares authorized, 59,748,171 and 57,784,622
shares issued and outstanding in 1996 and 1995, respectively.......................... 60 58
Capital surplus......................................................................... 140,473 99,768
Deferred compensation................................................................... (26,802) (9,642)
Accumulated translation adjustments..................................................... 23 51
Retained earnings....................................................................... 194,691 137,695
---------- ----------
Total stockholders' equity............................................................ 308,445 227,930
---------- ----------
Total liabilities and stockholders' equity............................................ $ 416,012 $ 301,140
---------- ----------
---------- ----------
</TABLE>
All share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
8
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Net service revenues......................................................... $ 898,635 $ 628,526 $ 446,328
Direct costs of services, consisting of payroll, payroll taxes and insurance
costs for temporary employees.............................................. 545,343 384,449 273,327
---------- ---------- ----------
Gross margin................................................................. 353,292 244,077 173,001
Selling, general and administrative expenses................................. 246,485 170,684 121,640
Amortization of intangible assets............................................ 5,405 4,767 4,584
Interest (income) expense.................................................... (2,243) (463) 1,570
---------- ---------- ----------
Income before income taxes................................................... 103,645 69,089 45,207
Provision for income taxes................................................... 42,543 28,791 19,090
---------- ---------- ----------
Net income................................................................... $ 61,102 $ 40,298 $ 26,117
---------- ---------- ----------
---------- ---------- ----------
Income per share............................................................. $ 1.00 $ .68 $ .46
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
All per share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
9
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period................................................ 57,785 56,304 53,674
Issuance of common stock...................................................... -- -- 1,267
Issuance of restricted stock.................................................. 659 468 665
Repurchases of common stock................................................... (197) (228) (229)
Exercises of stock options.................................................... 1,139 1,241 927
Issuance of common stock for acquisitions..................................... 362 -- --
--------- --------- ---------
Balance at end of period.................................................... 59,748 57,785 56,304
--------- --------- ---------
--------- --------- ---------
COMMON STOCK--PAR VALUE:
Balance at beginning of period................................................ $ 58 $ 56 $ 53,674
Issuance of common stock...................................................... -- -- 1
Issuances of restricted stock................................................. 1 1 668
Repurchases of common stock................................................... -- -- (118)
Exercises of stock options.................................................... 1 1 427
Change in par value........................................................... -- -- (54,596)
--------- --------- ---------
Balance at end of period.................................................... $ 60 $ 58 $ 56
--------- --------- ---------
--------- --------- ---------
CAPITAL SURPLUS:
Balance at beginning of period................................................ $ 99,768 $ 82,626 $ 6,335
Issuance of common stock--excess over par value............................... -- -- 12,588
Issuances of restricted stock--excess over par value.......................... 24,019 6,886 4,615
Exercises of stock options--excess over par value............................. 4,120 3,818 1,948
Tax benefits from exercises of stock options and restricted stock vesting..... 12,566 6,438 2,544
Change in par value........................................................... -- -- 54,596
--------- --------- ---------
Balance at end of period.................................................... $ 140,473 $ 99,768 $ 82,626
--------- --------- ---------
--------- --------- ---------
DEFERRED COMPENSATION:
Balance at beginning of period................................................ $ (9,642) $ (5,533) $ (2,113)
Issuances of restricted stock................................................. (24,020) (6,887) (5,283)
Amortization.................................................................. 6,860 2,778 1,863
--------- --------- ---------
Balance at end of period.................................................... $ (26,802) $ (9,642) $ (5,533)
--------- --------- ---------
--------- --------- ---------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period................................................ $ 51 $ (541) $ (589)
Translation adjustments....................................................... (28) 592 48
--------- --------- ---------
Balance at end of period.................................................... $ 23 $ 51 $ (541)
--------- --------- ---------
--------- --------- ---------
RETAINED EARNINGS:
Balance at beginning of period................................................ $ 137,695 $ 100,386 $ 76,295
Issuance of common stock for acquisition...................................... 1,285 -- --
Repurchases of common stock--excess over par value............................ (5,391) (2,989) (2,026)
Net income.................................................................... 61,102 40,298 26,117
--------- --------- ---------
Balance at end of period.................................................... $ 194,691 $ 137,695 $ 100,386
--------- --------- ---------
--------- --------- ---------
</TABLE>
1995 and 1994 share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
10
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
--------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 61,102 $ 40,298 $ 26,117
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of intangible assets......................................... 5,405 4,767 4,584
Depreciation expense...................................................... 6,457 3,564 2,673
Provision for deferred income taxes....................................... (1,702) (683) 1,096
Changes in assets and liabilities, net of effects of acquisitions:
Increase (decrease) in accounts receivable................................ (38,565) (24,289) (18,292)
Increase (decrease) in accounts payable, accrued expenses and accrued
payroll costs........................................................... 17,893 15,106 5,795
Increase (decrease) in income taxes payable............................... (1,274) 2,976 389
Change in other assets, net of change in other liabilities................ 5,109 432 2,997
--------- --------- ----------
Total adjustments........................................................... (6,677) 1,873 (758)
--------- --------- ----------
Net cash and cash equivalents provided by operating activities................ 54,425 42,171 25,359
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Acquisitions, net of cash acquired............................................ (4,620) (1,024) (4,406)
Capital expenditures.......................................................... (18,027) (8,417) (4,768)
--------- --------- ----------
Net cash and cash equivalents used in investing activities.................... (22,647) (9,441) (9,174)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net................................... -- -- 12,589
Borrowings under credit agreement............................................. -- -- 104,900
Repayments under credit agreement............................................. -- -- (135,200)
Principal payments on notes payable and other indebtedness.................... (4,239) (1,289) (384)
Proceeds and tax benefits from exercise of stock options and restricted stock
vesting..................................................................... 16,687 10,256 4,919
Repurchases of common stock and common stock equivalents...................... (5,391) (2,989) (2,144)
--------- --------- ----------
Net cash and cash equivalents provided by (used in) financing activities...... 7,057 5,978 (15,320)
--------- --------- ----------
Net increase in cash and cash equivalents..................................... 38,835 38,708 865
Cash and cash equivalents at beginning of period.............................. 41,346 2,638 1,773
--------- --------- ----------
Cash and cash equivalents at end of period.................................... $ 80,181 $ 41,346 $ 2,638
--------- --------- ----------
--------- --------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest.................................................................... $ 521 $ 405 $ 1,420
Income taxes................................................................ $ 32,163 $ 21,853 $ 14,609
Acquisitions:
Assets acquired--
Intangible assets......................................................... $ 9,932 $ 4,697 $ 5,452
Other..................................................................... 2,180 753 1,694
Liabilities incurred--
Notes payable and contracts............................................... (5,125) (2,800) (2,158)
Other..................................................................... (1,082) (1,626) (582)
Common stock issued......................................................... (1,285) -- --
--------- --------- ----------
Cash paid, net of cash acquired............................................. $ 4,620 $ 1,024 $ 4,406
--------- --------- ----------
--------- --------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
11
<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 1995 and 1994 financial statements to
conform to the 1996 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 employed 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 primarily consist of the cost of
acquired companies in excess of the fair market value of their net tangible
assets at acquisition date, which 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,
1996.
INCOME TAXES. Deferred taxes are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rates.
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 64 separate transactions the Company acquired all of the
outstanding stock of certain corporations operating ACCOUNTEMPS and ROBERT HALF
franchised offices in the United States, the United Kingdom and Canada as well
as other personnel
12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE B--ACQUISITIONS (CONTINUED)
services businesses. The Company has paid approximately $206 million in cash,
stock, notes and other indebtedness in these acquisitions, excluding transaction
costs and cash acquired.
These acquisitions were primarily accounted for as purchases, and the excess
of cost of the acquired companies in excess of 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 1996, 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 $6,611,000 at December
31, 1996 and $5,725,000 at December 31, 1995. At December 31, 1996, $5,965,000
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, 1996 (in thousands):
<TABLE>
<S> <C>
1997................................................................ $ 1,542
1998................................................................ 2,370
1999................................................................ 46
2000................................................................ 53
2001................................................................ 57
Thereafter.......................................................... 2,543
---------
$ 6,611
---------
---------
</TABLE>
At December 31, 1996, all of the notes carried fixed rates and the weighted
average interest rate for the above was approximately 6.9%, 7.3% and 8.2% for
the years ended December 31, 1996, 1995 and 1994, respectively.
NOTE D--BANK LOAN (REVOLVING CREDIT)
The bank loan is an unsecured credit facility which provides a line of
credit of up to $75,000,000, 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, 1996 and 1995, the Company had no borrowings on the line
of credit outstanding and had used $8,683,000 and $3,408,000 in debt support
standby letters of credit, respectively. There is a commitment fee on the unused
portion of the entire credit facility of .175%. The loan is subject to certain
financial covenants which also affect the interest rates charged.
13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE D--BANK LOAN (REVOLVING CREDIT) (CONTINUED)
The credit facility has the following scheduled reduction in availability
(in thousands):
<TABLE>
<S> <C>
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.
NOTE E--ACCRUED PAYROLL COSTS
Accrued payroll costs consists of the following at December 31, 1996 and
1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Payroll and bonuses..................................................... $ 28,374 $ 15,856
Employee benefits and workers' compensation............................. 30,126 11,182
Payroll taxes........................................................... 7,587 6,815
--------- ---------
$ 66,087 $ 33,853
--------- ---------
--------- ---------
</TABLE>
NOTE F--STOCKHOLDERS' EQUITY
In June 1996, the Company effected a two-for-one stock split in the form of
a stock dividend. 1995 and 1994 share and per share amounts have been restated
to retroactively reflect the two-for-one stock split. In August 1994, the
Company effected a two-for-one stock split in the form of a stock dividend. 1994
share and per share amounts have been restated to retroactively reflect the
two-for-one stock split.
NOTE G--INCOME TAXES
The provision for income taxes for the years ended December 31, 1996, 1995
and 1994 consisted of the following (in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal.................................................... $ 34,392 $ 22,061 $ 14,072
State...................................................... 7,457 4,728 3,155
Foreign.................................................... 2,396 2,685 767
Deferred--principally domestic............................... (1,702) (683) 1,096
--------- --------- ---------
$ 42,543 $ 28,791 $ 19,090
--------- --------- ---------
--------- --------- ---------
</TABLE>
14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE G--INCOME TAXES (CONTINUED)
The income taxes shown above varied from the statutory federal income tax
rates for these periods as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1996 1995 1994
---- ---- ----
<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 4.5 4.7
Amortization of intangible assets........................... 1.0 1.5 2.0
Other, net.................................................. .5 .7 .5
---- ---- ----
Effective tax rate.......................................... 41.0% 41.7% 42.2%
---- ---- ----
---- ---- ----
</TABLE>
The deferred portion of the tax provisions consisted of the following (in
thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Amortization of franchise rights............................... $ 691 $ 1,650 $ 1,629
Accrued expenses, deducted for tax when paid................... (2,468) (2,068) (524)
Other, net..................................................... 75 (265) (9)
--------- --------- ---------
$ (1,702) $ (683) $ 1,096
--------- --------- ---------
--------- --------- ---------
</TABLE>
The net deferred income tax liability shown on the balance sheet is
comprised of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Deferred income tax assets.............................................. $ (2,536) $ (1,304)
Deferred income tax liabilities......................................... 18,473 17,148
--------- ---------
$ 15,937 $ 15,844
--------- ---------
--------- ---------
</TABLE>
No valuation allowances against deferred tax assets were required for the
years ended December 31, 1996 and 1995.
The components of the net deferred income tax liability at December 31, 1996
and 1995, were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Amortization of intangible assets....................................... $ 16,954 $ 16,216
Foreign taxes........................................................... 151 200
Other................................................................... (1,168) (572)
--------- ---------
$ 15,937 $ 15,844
--------- ---------
--------- ---------
</TABLE>
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H--COMMITMENTS
Rental expense, primarily for office premises, amounted to $13,315,000,
$11,027,000 and $9,183,000 for the years ended December 31, 1996, 1995 and 1994,
respectively. The approximate minimum rental commitments for 1997 and thereafter
under non-cancelable leases in effect at December 31, 1996, are as follows (in
thousands):
<TABLE>
<S> <C>
1997............................................................... $ 14,429
1998............................................................... 13,636
1999............................................................... 11,936
2000............................................................... 9,110
2001............................................................... 6,442
Thereafter......................................................... 14,481
</TABLE>
NOTE I--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 and 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. Compensation expense is recognized on a straight-line basis over
the vesting period. Vesting is accelerated upon the death or disability of the
recipients.
The Company accounts for these plans under APB Opinion 25. Therefore, no
compensation cost has been recognized for its stock option plans. Had
compensation cost for the stock options granted subsequent to January 1, 1995
been based on the estimated fair value at the award dates, as prescribed by
Statement of Financial Accounting Standards No. 123 (SFAS 123), the Company's
pro forma net income and earnings per share would been as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
Net Income (in thousands) As Reported........................ $ 61,102 $ 40,298
Pro forma............................ $ 59,666 $ 40,174
Income per Share As Reported......................... $ 1.00 $ .68
Pro forma............................ $ .98 $ .68
</TABLE>
1995 per share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in June 1996.
Since the pro forma amounts do not include amounts for stock options granted
before January 1, 1995, the pro forma amounts may not be representative of the
disclosed effects on pro forma net income and income per share for future years.
The fair value of each option is estimated, as of the grant date, using the
Black-Scholes option pricing model with the following assumptions used for
grants in 1996 and 1995, respectively: no dividend yield for both years;
expected volatility of 32% to 33%; risk free interest rates of 5.3% to 6.7% and
5.4% to 7.9%; and expected lives of 5.5 to 7.2 years for both years.
16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE I--STOCK PLANS (CONTINUED)
The following table reflects activity under all stock plans from January 1,
1994 through December 31, 1996, and the exercise prices:
<TABLE>
<CAPTION>
STOCK OPTION PLANS
-------------------------------
WEIGHTED
RESTRICTED NUMBER OF AVERAGE PRICE
STOCK PLANS SHARES PER SHARE
------------- ---------- -------------------
<S> <C> <C> <C>
Outstanding, January 1, 1994.................................. 903,202 5,885,000 $ 3.61
Granted..................................................... 689,628 1,673,768 $ 10.38
Exercised................................................... -- (927,030) $ 2.56
Restrictions lapsed......................................... (312,200) -- --
Forfeited................................................... (27,294) (365,616) $ 4.02
------------- ---------- --------
Outstanding, December 31, 1994................................ 1,253,336 6,266,122 $ 5.55
Granted..................................................... 496,784 1,381,262 $ 19.01
Exercised................................................... -- (1,240,814) $ 3.08
Restrictions lapsed......................................... (375,542) -- --
Forfeited................................................... (28,564) (361,338) $ 7.18
------------- ---------- --------
Outstanding, December 31, 1995................................ 1,346,014 6,045,232 $ 9.06
Granted..................................................... 665,661 1,126,429 $ 31.41
Exercised................................................... -- (1,139,021) $ 3.61
Restrictions lapsed......................................... (274,886) -- --
Forfeited................................................... (6,066) (258,286) $ 14.90
------------- ---------- --------
Outstanding, December 31, 1996 1,730,723 5,774,354 $ 14.29
------------- ---------- --------
------------- ---------- --------
</TABLE>
All share 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 June
1996. The options outstanding at December 31, 1996 have a weighted average
exercise price of $14.29 and a weighted average remaining life of approximately
8 years.
As of December 31, 1996, an aggregate of 2,317,777 options to purchase
common stock were vested with a weighted average exercise price of $6.75. At
December 31, 1996, the total number of available shares to grant under the plans
(consisting of either restricted stock or options) was 860,388.
NOTE J--PREFERRED SHARE PURCHASE RIGHTS
Pursuant to the Company's stockholder rights agreement, each share of common
stock carries one right to purchase one one-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 $100 per right, subject to adjustment.
Following certain other events after the rights become exercisable, each right
entitles its holder to purchase for $100 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.
17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE K--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 (61,178,000, 59,417,000 and 56,969,000 shares for
the years ending December 31, 1996, 1995 and 1994, respectively).
NOTE L--QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tabulation shows certain quarterly financial data for 1996 and
1995 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
QUARTER
----------------------------------------------
1996 1 2 3 4 YEAR
- ----------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net service revenues................................. $ 196,239 $ 210,649 $ 232,950 $ 258,797 $ 898,635
Gross margin......................................... 76,642 83,921 91,788 100,941 353,292
Income before income taxes........................... 22,478 24,234 27,058 29,875 103,645
Net income........................................... 13,239 14,224 15,946 17,693 61,102
Income per share..................................... $ .22 $ .23 $ .26 $ .29 $ 1.00
<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
Income per share..................................... $ .15 $ .16 $ .18 $ .19 $ .68
</TABLE>
All share 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 June
1996.
18
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE M--SEGMENT REPORTING
Information about the Company's operations in different geographic locations
for each of the three years in the period ended December 31, 1996, 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 $1,533,000, $992,000 and $956,000
for the years ended December 31, 1996, 1995 and 1994, respectively. Domestic
operating income reflects charges for amortization of intangibles of $4,935,000
and $4,307,000 and $4,137,000 for the years ended December 31, 1996, 1995 and
1994, respectively. Identifiable assets are those assets used in the geographic
areas and are after elimination of intercompany balances.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues
Domestic............................................... $ 812,751 $ 564,564 $ 404,852
Foreign................................................ 85,884 63,962 41,476
---------- ---------- ----------
$ 898,635 $ 628,526 $ 446,328
---------- ---------- ----------
---------- ---------- ----------
Operating Income
Domestic............................................... $ 94,260 $ 63,861 $ 44,700
Foreign................................................ 7,142 4,765 2,077
---------- ---------- ----------
$ 101,402 $ 68,626 $ 46,777
---------- ---------- ----------
---------- ---------- ----------
Assets
Domestic............................................... $ 375,576 $ 267,487 $ 200,329
Foreign................................................ 40,436 33,653 27,432
---------- ---------- ----------
$ 416,012 $ 301,140 $ 227,761
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
19
<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, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996. 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, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
January 24, 1997
20
<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 1997.
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, 1996 and
1995.
Consolidated statements of income for the years ended December 31, 1996,
1995 and 1994.
Consolidated statements of stockholders' equity for the years ended
December 31, 1996, 1995 and 1994.
Consolidated statements of cash flows for the years ended December 31,
1996, 1995 and 1994.
Notes to consolidated financial statements.
Report of independent public accountants.
Selected quarterly financial data for the years ended December 31, 1996 and
1995 are set forth in Note L--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 September 30, 1996.
3.2 By-Laws.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and The
Chase Manhattan Bank (formerly Manufacturers Hanover Trust Company of
California), as amended and restated effective August 15, 1996,
incorporated by reference to Exhibit 1 to Registrant's Form 8-A/A Amendment
No. 3 filed on August 16, 1996.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
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 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Eleventh Amendment to the Employment
Agreement is filed with this Annual Report on Form 10-K for the fiscal year
ended December 31, 1996. The original Employment Agreement and the first
ten 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, (ix) Exhibit 10.1 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1995 and (x) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
*10.3 Key Executive Retirement Plan--Level II, as amended.
*10.4 Restated Retirement Agreement between the Registrant and Harold M. Messmer,
Jr.
*10.5 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.5 to the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996.
*10.6 Excise Tax Restoration Agreement dated November 5, 1996.
*10.7 Outside Directors' Option Plan, as amended.
*10.8 1989 Restricted Stock Plan, as amended.
*10.9 StockPlus 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, 1996.
*10.10 1993 Incentive Plan, as amended.
*10.11 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.
*10.12 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.5 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.
*10.13 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.
*10.14 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.
*10.15 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.
*10.16 Senior Executive Retirement Plan, as amended.
*10.17 Collateral Assignment of Split Dollar Insurance Agreement.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent
27 Financial Data Schedule.
</TABLE>
- ------------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
The Registrant filed the following report on Form 8-K during the fiscal
quarter ending December 31, 1996:
<TABLE>
<CAPTION>
DATE ITEM REPORTED
- ---------------------- -------------------------
<S> <C>
November 15, 1996 Item 5--Other Events
</TABLE>
23
<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 20, 1997 By: /S/ M. KEITH WADDELL
------------------------------------
M. Keith Waddell
Senior Vice President, Chief
Financial
Officer and Treasurer
(Principal Financial Officer)
24
<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 20, 1997 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 20, 1997 By: /S/ ANDREW S. BERWICK, JR.
------------------------------------------
Andrew S. Berwick, Jr., Director
Date: March 20, 1997 By: /S/ FREDERICK P. FURTH
------------------------------------------
Frederick P. Furth, Director
Date: March 20, 1997 By: /S/ EDWARD W. GIBBONS
------------------------------------------
Edward W. Gibbons, Director
Date: March 20, 1997 By: /S/ FREDERICK A. RICHMAN
------------------------------------------
Frederick A. Richman, Director
Date: March 20, 1997 By: /S/ THOMAS J. RYAN
------------------------------------------
Thomas J. Ryan, Director
Date: March 20, 1997 By: /S/ J. STEPHEN SCHAUB
------------------------------------------
J. Stephen Schaub, Director
Date: March 20, 1997 By: /S/ M. KEITH WADDELL
------------------------------------------
M. Keith Waddell
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
Date: March 20, 1997 By: /S/ BARBARA J. FORSBERG
------------------------------------------
Barbara J. Forsberg
Vice President and Controller
(Principal Accounting Officer)
</TABLE>
25
<PAGE>
EXHIBIT INDEX
<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 September 30, 1996.
3.2 By-Laws.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and The
Chase Manhattan Bank (formerly Manufacturers Hanover Trust Company of
California), as amended and restated effective August 15, 1996,
incorporated by reference to Exhibit 1 to Registrant's Form 8-A/A Amendment
No. 3 filed on August 16, 1996.
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 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Eleventh Amendment to the Employment
Agreement is filed with this Annual Report on Form 10-K for the fiscal year
ended December 31, 1996. The original Employment Agreement and the first
ten 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, (ix) Exhibit 10.1 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1995 and (x) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
*10.3 Key Executive Retirement Plan--Level II, as amended.
*10.4 Restated Retirement Agreement between the Registrant and Harold M. Messmer,
Jr.
*10.5 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.5 to the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996.
*10.6 Excise Tax Restoration Agreement dated November 5, 1996.
*10.7 Outside Directors' Option Plan, as amended.
*10.8 1989 Restricted Stock Plan, as amended.
*10.9 StockPlus 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, 1996.
*10.10 1993 Incentive Plan, as amended.
*10.11 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.
*10.12 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.5 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
<C> <S>
*10.13 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.
*10.14 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.
*10.15 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.
*10.16 Senior Executive Retirement Plan, as amended.
*10.17 Collateral Assignment of Split Dollar Insurance Agreement.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent
27 Financial Data Schedule.
</TABLE>
- ------------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
ROBERT HALF INTERNATIONAL INC.
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the Corporation in
the State of Delaware shall be at 1209 Orange Street, City of Wilmington, County
of New Castle.
Section 2. PRINCIPAL OFFICE FOR TRANSACTION OF BUSINESS. The principal
office for the transaction of the business of the Corporation shall be at 2884
Sand Hill Road, in the City of Menlo Park, County of San Mateo, State of
California. The Board of Directors may change said principal office from one
location to another within or without said City, County or State.
Section 3. OTHER OFFICES. The Corporation may have offices at such other
place or places, within or without the State of Delaware, as from time to time
the Board of Directors may determine or the business of the Corporation may
require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of the stockholders shall be held
at such place either within or without the State of Delaware as shall be fixed
by the Board of Directors and stated in the notice or waiver of notice of the
meeting.
Section 2. ANNUAL MEETING. The annual meeting of stockholders for the
election of directors and for the transaction of such other business as may come
before the meeting shall be held on such date in each year as the Chairman of
the Board shall designate. The Board of Directors shall present at each annual
meeting a full and clear statement of the business and condition of the
Corporation.
Section 3. SPECIAL MEETINGS. A special meeting of the stockholders for any
purpose or purposes, unless otherwise prescribed by statute, may be called at
any time by the Chairman of the Board, or the President or by order of the Board
of Directors.
Section 4. NOTICE OF MEETINGS. Except as otherwise provided by law or the
Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting, directed to his
address as it appears upon the books of the corporation, said notice to specify
the place, date and hour and purpose or purposes of the meeting. Notice of the
time, place and purpose of any meeting of stockholders may be waived in writing,
either before or after such meeting, and will be waived by any stockholder by
his attendance thereat in person or by proxy. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given. Any previously scheduled
meeting of the stockholders may be postponed, and (unless the Certificate of
Incorporation otherwise provides) any special meeting of the stockholders may be
cancelled, by resolution of the Board of Directors upon public notice given
prior to the date previously scheduled for such meeting of stockholders.
Section 5. QUORUM AND ADJOURNMENT. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. The Chairman of the meeting may
adjourn the meeting from time to time,
1
<PAGE>
whether or not there is such a quorum. No notice of the time and place of
adjourned meetings need be given except as required by law. The stockholders
present at a duly called meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
Section 6. VOTING. Except as otherwise provided in the Certificate of
Incorporation, each stockholder of voting common stock shall, at each meeting of
the stockholders, be entitled to one vote in person or by proxy for each share
of stock of the Corporation held by him on the date fixed pursuant to the
provisions of Section 3 of Article IX of the By-Laws as the record date and
registered in his name on the books of the Corporation for the determination of
stockholders who shall be entitled to notice and to vote at such meeting. Any
vote of stock of the Corporation may be given at any meeting of the stockholders
by the stockholder entitled thereto in person or by proxy but no proxy shall be
voted three years after its date, unless said proxy shall provide for a longer
period. At all meetings of the stockholders all matters including election of
directors, except where other provision is made by law, by the Certificate of
Incorporation or by these By-Laws, shall be decided by the vote of a majority in
voting interest of the stockholders present in person or by proxy and entitled
to vote thereat, a quorum being present. Unless demanded by a stockholder of the
Corporation present in person or by proxy at any meeting of the stockholders and
entitled to vote thereat or so directed by the chairman of the meeting, the vote
thereat on any question or matter, including the election of directors, need not
be by ballot. Upon a demand of any such stockholder for a vote by ballot on any
question or at the direction of such chairman that a vote by ballot be taken on
any question, such vote shall be taken. On a vote by ballot each ballot shall be
signed by the stockholder voting, or by his proxy, and shall state the number of
shares voted. No holder of Preferred Stock shall be entitled to vote at any
meeting of the stockholders, except as provided by law, by the Certificate of
Incorporation or by the Certificate of Determination of Preferences creating
such Preferred Stock.
Section 7. LIST OF STOCKHOLDERS. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where the meeting is to be
held and which place shall be specified in the notice of the meeting, or, if not
specified, at the place where said meeting is to be held, and the list shall be
produced and kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 8. INSPECTORS OF VOTES. At each meeting of the stockholders the
chairman of such meeting may appoint one or three Inspectors of Votes to act
thereat. Each Inspector of Votes so appointed shall first subscribe an oath or
affirmation faithfully to execute the duties of an Inspector of Votes at such
meeting with strict impartiality and according to the best of his ability. Such
Inspectors of Votes shall take charge of the ballots at such meeting and after
the balloting thereat on any question shall count the ballots cast thereon and
shall make a report in writing to the secretary of such meeting of the results
thereof. An Inspector of Votes need not be a stockholder of the Corporation, and
any officer of the Corporation may be an Inspector of Votes on any question
other than a vote for or against his election to any position with the
Corporation or on any other question in which he may be directly interested. If
there are three Inspectors of Votes, the determination, report or certificate of
two such Inspectors shall be as effective as if unanimously made by all
Inspectors.
Section 9. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.
(a) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (a)
pursuant to the Corporation's notice of meeting, (b) by or at the
direction of the
2
<PAGE>
Board of Directors or (c) by any stockholder of the Corporation who was a
stockholder of record at the time of giving of notice provided for in
this By-Law, who is entitled to vote at the meeting and who complies with
the notice procedures set forth in this By-Law.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of
paragraph (a)(1) of this By-Law, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation and such
other business must otherwise be a proper matter for stockholder action.
To be timely, a stockholder's notice shall be delivered to the Secretary
at the principal executive offices of the Corporation not later than the
close of business on the 60th day nor earlier than the close of business
on the 90th day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the
annual meeting is more than 30 days before or more than 60 days after
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to
such annual meeting and not later than the close of business on the later
of the 60th day prior to such annual meeting or the 10th day following
the day on which public announcement of the date of such meeting is first
made by the Corporation. In no event shall the public announcement of an
adjournment of an annual meeting commence a new time period for the
giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Rule 14a-11 thereunder (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of
such stockholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is
made (i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and
number of shares of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this By-Law to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement by the
Corporation naming all of the nominees for director or specifying the
size of the increased Board of Directors at least 70 days prior to the
first anniversary of the preceding year's annual meeting, a stockholder's
notice required by this By-Law shall also be considered timely, but only
with respect to nominees for any new positions created by such increase,
if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the
10th day following the day on which such public announcement is first
made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at
a special meeting of stockholders at which directors are to be elected
pursuant to the Corporation's notice of meeting (a) by or at the direction
of the Board of Directors or (b) provided that the Board of Directors has
determined that directors shall be elected at such meeting, by any
stockholder of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this By-Law, who shall be entitled to vote
at the meeting and who complies with the notice procedures set forth in this
By-Law. In the event the Corporation calls a special meeting of stockholders
for the purpose of electing one or more directors to the Board of Directors,
any such stockholder may nominate a person or persons (as
3
<PAGE>
the case may be), for the election to such position(s) as specified in the
Corporation's notice of meeting, if the stockholder's notice required by
paragraph (a)(2) of this By-Law shall be delivered to the Secretary at the
principal executive offices of the Corporation not earlier than the close of
business on the 90th day prior to such special meeting and not later than
the close of business on the later of the 60th day prior to such special
meeting or the 10th day following the day on which public announcement is
first made of the date of the special meeting and of the nominees proposed
by the Board of Directors to be elected at such meeting. In no event shall
the public announcement of an adjournment of a special meeting commence a
new time period for the giving of a stockholder's notice as described above.
(c) General.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this By-Law shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance
with the procedures set forth in this By-Law. Except as otherwise
provided by law, the Certificate of Incorporation or these By-Laws, the
Chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this By-Law and, if any proposed nomination or
business is not in compliance with this By-Law, to declare that such
defective proposal or nomination shall be disregarded.
(2) For purposes of this By-Law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(3) Notwithstanding the foregoing provisions of this By-Law, a
stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to
the matters set forth in this By-Law. Nothing in this By-Law shall be
deemed to affect any rights (i) of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act or (ii) of the holders of any series of Preferred
Stock to elect directors under specified circumstances.
Section 10. RECORD DATE FOR ACTION BY WRITTEN CONSENT. In order that the
Corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which date
shall not be more than 10 days after the date upon which the resolution fixing
the record date is adopted by the Board of Directors. Any stockholder of record
seeking to have the stockholders authorize or take corporate action by written
consent shall, by written notice to the Secretary, request the Board of
Directors to fix a record date. The Board of Directors shall promptly, but in
all events within 10 days after the date on which such a request is received,
adopt a resolution fixing the record date. If no record date has been fixed by
the Board of Directors within 10 days of the date on which such a request is
received, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in Delaware,
its principal place of business or to any officer or agent of the Corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by applicable law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action.
4
<PAGE>
Section 11. INSPECTORS OF WRITTEN CONSENT. In the event of the delivery,
in the manner provided by Section 10, to the Corporation of the requisite
written consent or consents to take corporate action and/or any related
revocation or revocations, the Corporation shall engage nationally recognized
independent inspectors of elections for the purpose of promptly performing a
ministerial review of the validity of the consents and revocations. For the
purpose of permitting the inspectors to perform such review, no action by
written consent without a meeting shall be effective until such date as the
independent inspectors certify to the Corporation that the consents delivered to
the Corporation in accordance with Section 10 represent at least the minimum
number of votes that would be necessary to take the corporate action. Nothing
contained in this paragraph shall in any way be construed to suggest or imply
that the Board of Directors or any stockholder shall not be entitled to contest
the validity of any consent or revocation thereof, whether before or after such
certification by the independent inspectors, or to take any other action
(including, without limitation, the commencement, prosecution, or defense of any
litigation with respect thereto, and the seeking of injunctive relief in such
litigation).
Section 12. EFFECTIVENESS OF WRITTEN CONSENT. Every written consent shall
bear the date of signature of each stockholder who signs the consent and no
written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the earliest dated written consent received in
accordance with Section 10, a written consent or consents signed by a sufficient
number of holders to take such action are delivered to the Corporation in the
manner prescribed in Section 10.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS. The property, business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
Section 2. NUMBER, QUALIFICATION AND TERM OF OFFICE.
(a) The number of directors which shall constitute the whole Board shall
not be less than six nor more than eleven. The number of directors
shall be fixed at such number, within the limits specified in the preceding
sentence, as determined from time to time by resolution of the Board of
Directors, upon approval by two-thirds (2/3) of the directors in office.
(b) At the 1994 Annual Meeting of Stockholders, the directors shall be
divided into three classes, as nearly equal in number as possible,
with the term of office of the first class to expire at the 1997 Annual
Meeting of Stockholders, the term of office of the second class to expire at
the 1996 Annual Meeting of Stockholders and the term of office of the third
class to expire at the 1995 Annual Meeting of Stockholders. At each Annual
Meeting of Stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be
elected for a term of office to expire at the third succeeding Annual
Meeting of Stockholders after election.
(c) If the stockholders of the Company do not approve the continuing
classification of the Board of Directors at the 1999 Annual Meeting
of Stockholders, then Section 2(b) hereof shall be of no further force or
effect and, notwithstanding anything to the contrary in Section 2(b), the
terms of all directors shall expire at the 2000 Annual Meeting of
Stockholders and all directors elected at the 1999 Annual Meeting of
Stockholders or any subsequent meeting of stockholders shall hold office for
a one-year term.
(d) Except as provided in Sections 4 and 5 to this Article III, each
director shall hold office until the end of his term and until his
successor shall be elected and qualified or until his death, resignation or
removal. Directors need not be stockholders. This Section 2 shall not be
amended to change the two-thirds (2/3) approval requirement set forth above
except with the approval of two-thirds (2/3) of the directors in office.
5
<PAGE>
Section 3. RESIGNATIONS. Any director may resign at any time by giving
written notice of his resignation to the Corporation. Any such resignation shall
take effect at the time specified therein, or, if the time when it shall become
effective shall not be specified therein, then it shall take effect immediately
upon its receipt by the Secretary; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 4. REMOVAL OF DIRECTORS. Any director may be removed, with cause,
at any time, by the affirmative vote of a majority in interest of the
stockholders of record of the Corporation entitled to vote, given at a special
meeting of the stockholders called for the purpose, and the vacancy in the Board
of Directors caused by any such removal may be filled by the stockholders at
such meeting or, if the stockholders shall fail to fill such vacancy, by the
Board of Directors as provided in Section 5 of this Article III. In no case will
a decrease in the number of directors shorten the term of any incumbent
director.
Section 5. VACANCIES. In case of any vacancy in the Board of Directors
caused by death, resignation, disqualification, removal, an increase in the
number of directors, or any other cause, the successor to fill the vacancy may
be elected by the holders of shares of stock entitled to vote at an annual
meeting of said holders or by two-thirds (2/3) of the directors in office,
though less than a quorum, and each director so elected shall hold office for a
term expiring at the Annual Meeting of Stockholders at which the term of the
class to which he was elected expires and until his successor shall be duly
elected and qualified, or until his death or until he shall resign or until he
shall have been removed. Additional directorships resulting from an increase in
the number of directors shall be apportioned among the three classes as equally
as possible. This section shall not be amended to change the requirement of a
vote of two-thirds (2/3) of the directors set forth above except upon the
approval of two-thirds (2/3) of the directors in office.
Section 6. PLACE OF MEETING. The Board of Directors may hold its meetings
at such place or places within or without the State of Delaware as the Board of
Directors may from time to time determine.
Section 7. ORGANIZATION MEETING. The Board of Directors shall meet
immediately following the annual meeting of stockholders and at the place where
the stockholders' meeting was held, for the purpose of electing officers and
transacting such other business as may lawfully come before it. No notice of
such meeting shall be required.
Section 8. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such times as the Board of Directors shall from time to time by
resolution determine. If any day fixed for a regular meeting shall be a legal
holiday, then the meeting which would otherwise be held on that day shall be
held at the same hour on the next succeeding business day. Except as otherwise
provided by law, notices of regular meetings need not be given.
Section 9. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held when called by the Chairman of the Board, the Chairman of the
Executive Committee, the President, the Secretary, Assistant Secretary or a
majority of the Directors.
Section 10. NOTICE OF MEETINGS. Notice of the time and place of all
special meetings of the Board of Directors or any committee thereof, and of any
regular meeting as to which notice is given, shall be given to each director
either by telephone or by written notice delivered personally to each director
or sent to each director by mail or by other form of written communication at
least one day before the date of the meeting. Notice of any meeting may be
waived in writing at any time before or after the meeting and will be waived by
any director by attendance at such meeting.
Section 11. QUORUM AND MANNER OF ACTING. Except as otherwise provided by
statute or by these By-Laws, a majority of the total number of directors (but
not less than two) shall be required to constitute a quorum for the transaction
of business at any meeting, and the act of a majority of the directors present
at any meeting at which a quorum shall be present shall be the act of the Board
of Directors. In the absence of a quorum, a majority of the directors present
may adjourn any meeting from time to time until a quorum be had. Notice of any
adjourned meeting need not be given.
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Section 12. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or by these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof, may be taken without a meeting, if all members of the Board
or of such committee, as the case may be, consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board or
Committee.
Section 13. MEETING BY TELEPHONE. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 14. COMPENSATION. The Board of Directors may at any time or from
time to time by resolution provide that a specified sum shall be paid to any
director of the Corporation, either as his annual compensation as such director
or member of any committee of the Board of Directors or as compensation for his
attendance at each meeting of the Board of Directors or any such committee. The
Board of Directors may also likewise provide that the Corporation shall
reimburse each director for any expense paid by him on account of his attendance
at any meeting. Nothing in this Section shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. APPOINTMENT. The Board of Directors may by resolution passed by
a majority of the whole Board, appoint an Executive Committee of not less than
three members, all of whom shall be directors. The Chairman of the Executive
Committee shall be elected by the Board of Directors.
Section 2. POWERS. The Executive Committee shall have and may exercise,
when the Board is not in session, the power of the Board of Directors in the
management of the business and affairs of the Corporation; but neither the
Executive Committee nor any other committee shall have the power or authority in
reference to amending the Certificate of Incorporation, adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation, nor
shall it have the power or authority to declare a dividend, to authorize the
issuance of stock or to fill vacancies in the Board of Directors or the
Executive Committee.
Section 3. TERM. The term of the Executive Committee shall be coexistent
with that of the Board of Directors which shall have appointed such Committee.
The Board may at any time for any reason remove any individual member of the
Executive Committee and the Board may fill a Committee vacancy created by death,
resignation or removal or increase in the number of members of the Executive
Committee. The Board of Directors may designate one or more directors as
alternate members of the Executive Committee who may replace any absent or
disqualified member at any meeting of the Committee.
Section 4. MEETINGS. Regular meetings of the Executive Committee, of which
no notice shall be required, may be held on such days and at such places as
shall be fixed by resolution adopted by a majority of the Committee and
communicated to all of its members. Special meetings of the Executive Committee
shall be held whenever called by the Chairman of the Executive Committee, the
Chairman of the Board, the President, the Vice President, or a majority of the
members of the Executive Committee then in office and shall be held at such time
and place as shall be designated in the notice of the meeting.
Section 5. QUORUM AND MANNER OF ACTION. A majority of the Executive
Committee shall constitute a quorum for the transaction of business and the act
of a majority of those present at a meeting thereof at which a quorum is present
shall be the act of the Committee.
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ARTICLE V
OTHER COMMITTEES
Section 1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors
may, by resolution passed by a majority of the whole Board, from time to time
appoint other committees of the Board of Directors. Each such committee, to the
extent permitted by law and these By-Laws, shall have and may exercise such of
the powers of the Board of Directors in the management and affairs of the
Corporation as may be prescribed by the resolution creating such committee. A
majority of all of the members of any such committee may determine its action
and fix the time and place of its meetings and specify what notice thereof, if
any, shall be given, unless the Board of Directors shall otherwise prescribe.
The Board of Directors shall have power to change the members of any such
committee at any time, to fill vacancies and to discontinue any such committee
at any time.
Section 2. NON-BOARD COMMITTEES. The authority conferred upon the Board of
Directors by Section 1 of this Article V to appoint committees of the Board of
Directors shall not be deemed to preclude the appointment by either the Board of
Directors or the Executive Committee of committees whose members need not be
directors of the Corporation provided that such committees may not exercise any
of the powers of the Board of Directors.
ARTICLE VI
OFFICERS
Section 1. NUMBER. The officers of the Corporation shall be the Chairman
of the Board, the Vice Chairman of the Board, the Chairman of the Executive
Committee, the President, one or more Vice Presidents, a Secretary and a
Treasurer. The Board of Directors may also appoint one or more Assistant Vice
Presidents, Assistant Secretaries or Assistant Treasurers and such other
officers and agents with such powers and duties as it shall deem necessary.
Assistant Vice Presidents may also be appointed by the Chairman of the Board.
Any of the Vice Presidents may be given such specific designation as may be
determined from time to time by the Board of Directors. Any two or more offices
except those of President and Secretary may be held by the same person.
Section 2. ELECTION AND TERM OF OFFICE. The officers shall be elected
annually by the Board of Directors at its organization meeting following the
annual meeting of the stockholders and each shall hold office until the next
annual election of officers and until his successor is elected and qualified, or
until his death, resignation or removal. Any officer may be removed at any time,
with or without cause, by a vote of the majority of the whole Board. Any vacancy
occurring in any office may be filled by the Board of Directors.
Section 3. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD.
(a) The Chairman of the Board shall exercise such powers and perform such
duties as may be assigned to him by these By-Laws or by the Board of
Directors. The Chairman of the Board shall preside at meetings of the
stockholders and Board of Directors and, in the absence of the Chairman of
the Executive Committee, shall preside at meetings of the Executive
Committee. He shall be ex officio a member of all standing committees of the
Board other than any standing audit committee or compensation committee.
(b) The Vice Chairman of the Board, in the absence of the Chairman of the
Board, shall preside at meetings of the stockholders and Board of
Directors. He shall exercise such other powers and perform such other duties
as may be assigned to him by these By-Laws or by the Board of Directors.
Section 4. CHAIRMAN OF THE EXECUTIVE COMMITTEE. The Chairman of the
Executive Committee shall preside at all meetings of the Executive Committee
and, in the absence of the Chairman of the Board and the Vice Chairman of the
Board, shall preside at meetings of the Board of Directors. The Chairman of the
Executive Committee shall perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
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Section 5. PRESIDENT. The President, subject to the general control of the
Board of Directors, shall be the chief executive officer of the Corporation and,
as such, shall be responsible for the management and direction of the affairs of
the Corporation, its officers, employees and agents and shall supervise
generally the affairs of the Corporation. He shall exercise such other powers
and perform such other duties as may be assigned to him by these By-Laws or by
the Board of Directors. In the absence of the Chairman of the Board and the Vice
Chairman of the Board, he shall preside at meetings of the stockholders and, in
the absence of the Chairman of the Board, the Vice Chairman of the Board and the
Chairman of the Executive Committee, he shall preside at meetings of the Board
of Directors and the Executive Committee. He shall be ex officio a member of all
standing committees of the Board other than any standing audit committee or
compensation committee.
Section 6. VICE PRESIDENTS. In the absence of the Chairman of the Board
and the President, the Vice President designated by the Board of Directors shall
have all of the powers and duties conferred upon the President. Except where by
law the signature of the Chairman of the Board or the President is required,
each of the Vice Presidents shall have the same power as the Chairman of the
Board or the President to sign certificates, contracts and other instruments of
the Corporation. Any Vice President shall perform such other duties and may
exercise such other powers as may from time to time be assigned to him by these
By-Laws, the Board of Directors, the Chairman of the Board or the President.
Section 7. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall record
or cause to be recorded in books provided for the purpose the minutes of the
meetings of the stockholders, the Board of Directors, the Executive Committee
and all other committees of the Board of Directors, if any; shall see that all
notices are duly given in accordance with the provisions of these By-Laws and as
required by law; shall be custodian of all corporate records (other than
financial) and of the seal of the Corporation and see that the seal is affixed
to all documents, the execution of which on behalf of the Corporation under its
seal is duly authorized in accordance with the provisions of these By-Laws;
shall keep the list of stockholders which shall include the post office address
of each stockholder and make all proper changes therein, retaining and filing
his authority for all such entries; shall see that the books, reports,
statements, certificates and all other documents and records required by law are
properly kept and filed, and, in general, shall perform all duties incident to
the office of Secretary and such other duties as may, from time to time, be
assigned to him by the Board of Directors, the Chairman of the Board or the
President. At the request of the Secretary, or in his absence or disability, any
Assistant Secretary shall perform any of the duties of the Secretary and, when
so acting, shall have all the powers and be subject to all the restrictions
upon, the Secretary. Except where by law the signature of the Secretary is
required, each of the Assistant Secretaries shall possess the same power as the
Secretary to sign certificates, contracts, obligations and other instruments of
the Corporation, and to affix the seal of the Corporation to such instruments,
and attest the same.
Section 8. TREASURER AND ASSISTANT TREASURER. The Treasurer shall keep or
cause to be kept the books of account of the Corporation and shall render
statements of the financial affairs of the Corporation in such form and as often
as required by the Board of Directors, the Chairman of the Board or the
President. The Treasurer, subject to the order of the Board of Directors, shall
have the custody of all funds and securities of the Corporation. The Treasurer
shall perform all other duties commonly incident to his office and shall perform
such other duties and have such other powers as the Board of Directors, the
Chairman of the Board or the President shall designate from time to time. At the
request of the Treasurer, or in his absence or disability, the Assistant
Treasurer or, in case there shall be more than one Assistant Treasurer, the
Assistant Treasurer designated by the Board of Directors, the Chairman of the
Board, the President or the Treasurer, may perform any of the duties of the
Treasurer and, when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the Treasurer. Except where by law the signature of
the Treasurer is required, each of the Assistant Treasurers shall possess the
same power as the Treasurer to sign all certificates, contracts, obligations and
other instruments of the Corporation.
Section 9. ASSISTANT VICE PRESIDENTS. The Assistant Vice Presidents shall
perform such duties as shall be determined by the Board of Directors, the
Chairman of the Board or the President of the Corporation.
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ARTICLE VII
EXECUTION OF INSTRUMENTS
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or persons, to
execute any corporate instrument or document or to sign the corporate name
without limitation, except where otherwise provided by law or in these By-Laws,
and such designation may be general or confined to specific instances.
ARTICLE VIII
VOTING OF SECURITIES OWNED BY THE CORPORATION
All stock and other securities of other corporations held by the Corporation
shall be voted, and all proxies with respect thereto shall be executed, by the
person authorized so to do by resolution of the Board of Directors, or, in the
absence of such authorization, by the Chairman of the Board, the Chairman of the
Executive Committee, the President or any Vice President.
ARTICLE IX
SHARES OF STOCK
Section 1. FORM AND EXECUTION OF CERTIFICATES. The certificates of stock
of the Corporation shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's name and number
of shares and shall be signed by the Chairman of the Board, the President or any
Vice President and the Secretary or an Assistant Secretary. Any or all of the
signatures on such certificate may be a facsimile. In case any officer of the
Corporation who shall have signed, or whose facsimile signature shall have been
placed upon, such certificate shall cease to be such officer before such
certificate shall have been issued, such certificate may nevertheless be issued
by the Corporation with the same effect as though such person were such officer
at the date of issuance.
Section 2. TRANSFER. Transfer of stock shall be made on the books of the
Corporation only by the person named in the certificate or by attorney lawfully
constituted in writing, and upon surrender of the certificate.
Section 3. FIXING RECORD DATE. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholder
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 4. RECORD OWNER. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and accordingly shall not be bound to recognize any equitable or other claim to
or interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by the
laws of Delaware.
Section 5. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the
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same in such manner as it shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
ARTICLE X
DIVIDENDS
Subject to the provisions of law and of the Certificate of Incorporation,
the Board of Directors, at any regular or special meeting, may declare and pay
dividends upon the shares of its stock either (a) out of its surplus as defined
in and computed in accordance with the provisions of law or (b) in case it shall
not have any such surplus, out of its net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, whenever and in such
amount as, in the opinion of the Board of Directors, the condition of the
affairs of the Corporation shall render advisable.
Before payment of any dividend or making any distribution of profits, there
may be set aside out of the surplus or net profits of the Corporation such sum
or sums as the directors may from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interests
of the Corporation.
ARTICLE XI
CORPORATE SEAL
The corporate seal shall consist of a die bearing the name of the
Corporation and the inscription "Corporate Seal -- Delaware." Said seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE XII
AMENDMENTS
All By-Laws of the Corporation shall be subject to alterations or repeal,
and new By-Laws may be made, by the stockholders at any annual or special
meeting, or except as otherwise provided by these By-Laws or by law, by the
affirmative vote of a majority of the directors then in office given at any
regular or special meeting of the Board of Directors.
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EXHIBIT 10.2
ELEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Eleventh Amendment to Employment Agreement is made and entered into
as of January 1, 1997, by and between Robert Half International Inc.
(formerly Boothe Financial Corporation), a Delaware corporation,
("Corporation") and Harold M. Messmer, Jr. ("Officer").
1. Section 2.1(d) of the Employment Agreement is amended by replacing
the words "Section 8.1 of Corporation's 1985 Stock Option Plan ("Option
Plan")" with the words "the Corporation's 1993 Incentive Plan".
2. 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, 1997, the Base Salary shall in no event be
less than $500,000 per annum."
3. Section 3.2 of the Employment Agreement is amended by deleting the
words "of up to 100% of Officer's Base Salary".
4. Section 3.4 of the Employment Agreement is amended by replacing the
words "Option Plan" with the words "1985 Stock Option Plan ("Option Plan")".
5. 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 10.3
ROBERT HALF INTERNATIONAL INC.
KEY EXECUTIVE RETIREMENT PLAN - LEVEL II
(AS AMENDED EFFECTIVE NOVEMBER 5, 1996)
SECTION 1. ESTABLISHMENT AND PURPOSES OF PLAN.
The Boothe Financial Corporation Key Executive Retirement Plan - Level II
(the "Plan") was established effective November 1, 1978, and subsequently
amended effective September 13, 1984 and again effective November 14, 1985 to
read as set forth herein. The purpose of the Plan is to provide retirement
benefits to certain key senior executives of Boothe Financial Corporation (the
"Company"). The Plan is not intended to qualify under the provisions of section
401(a) of the Internal Revenue Code. The Company reserves the right, subject to
and as provided in Section 6, to amend or terminate the Plan at any time.
SECTION 2. DEFINITIONS.
Capitalized words and phrases used in the text of the Plan shall have the
following meanings:
(a) "Board" means the Board of Directors of the Company.
(b) "Change in Control" means the occurrence of any of the following:
(i) Any person or group (as such terms are defined in Section
13(d)(3) of the Securities Exchange Act of 1934 ("the Exchange Act")),
other than an employee benefit plan sponsored by the Company or a
subsidiary thereof or a corporation owned (directly or indirectly), by
the stockholders of the Company in substantially the same proportions of
the ownership of stock of the Company, shall become the beneficial owner
of securities of the Company representing 20% or more, or commences a
tender or exchange offer following the successful consummation of which
the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then
outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise; PROVIDED,
HOWEVER, that a Change in Control shall not be deemed to include the
acquisition by any such person or group of securities representing 20% or
more of the Company if such party has acquired such securities not with
the purpose nor with the effect of changing or influencing the control of
the Company, nor in connection with or as a participant in any
transaction having such purposes or effect, including, without
limitation, not in connection with such party (A) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company,
(B) making, or in any way participating in, any "solicitation" of
"proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act) to vote any voting securities of the Company (including,
without limitation, any such solicitation subject to Rule 14a-11 under
the Exchange Act) or seeking to advise or influence any party with
respect to the voting of any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination
involving the Company or the sale or transfer of substantial assets of
the Company, (C) forming, joining or in any way participating in any
"group" within the meaning of Section 13(d)(3) of the Exchange Act with
respect to any voting securities of the Company, directly or indirectly,
relating to a merger or other business combination involving the Company
or the sale or transfer of any substantial assets of the Company, or (D)
otherwise acting, alone or in concert with others, to seek control of the
Company or to seek to control or influence the management or policies of
the Company.
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(ii) The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
(iii) A change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the
Company as of the date hereof, or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative
votes of at least a majority of the Incumbent Directors at the time of
such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the Company). 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.
(iv) 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.
(v) The stockholders of the Company approve a definitive agreement
(A) 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 (B) to sell or otherwise
dispose of all or substantially all of the assets of the Company.
(c) "Commencement Date" means (i) for an Original Participant, the last
day of the month following the month in which the Participant's employment
terminates, and (ii) for any other Participant, the last day of the month
following the later of the date on which the Participant's employment
terminates and his or her fiftieth birthday.
(d) "Company" means Boothe Financial Corporation, a Delaware
corporation.
(e) "Consumer Price Index" means, as of any date, the Consumer Price
Index For All Urban Consumers (1985 base) for all commodities and services
in the San Francisco-Oakland Area for the December immediately preceding
such date as issued by the Bureau of Labor Statistics of the U.S. Department
of Labor or, if such index ceases to exist, a similar index to be selected
by the Board; and the annual percentage increase in the Consumer Price
Index, as of any date, shall be equal to the quotient of the then current
Consumer Price Index less the Consumer Price Index for the year immediately
preceding divided by said Consumer Price Index for the year immediately
preceding.
(f) "Designated Beneficiary" means the person or persons designated by
the Participant in a written form acceptable to and delivered to the
Company. Any such designation may be changed by the Participant's execution
and delivery to the Company of such change on a written form acceptable to
the Company. No form designating a Designated Beneficiary shall be effective
unless received by the Company before the Participant's death. If a
Designated Beneficiary has not been properly designated or is deceased at
the time any amount due hereunder is payable, the Designated Beneficiary
shall be the Participant's spouse or, if there is no surviving spouse, then
the Designated Beneficiary shall be the Participant's then living children
(in equal shares). If there is neither a surviving spouse nor surviving
children and the Participant has not otherwise properly designated a
Designated Beneficiary, the Participant's Designated Beneficiary shall be
his or her estate.
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(g) "Misconduct" means that the Company sustains the burden of
demonstrating that the Company has suffered material injury by reason of the
fact that the Participant, while employed by the Company:
(i) has willfully and knowingly committed an act of embezzlement,
fraud, or theft, with respect to the property of the Company or any
person with whom the Company does a material amount of business;
(ii) has made any knowing and willful unauthorized disclosure of any
material trade secret or material confidential information of the
Company;
(iii) has wrongfully and willfully caused any customer of the Company
to breach a material contract with the Company; or
(iv) has performed substantial services in any capacity for any
corporation, partnership, entity or other person which is engaged in
direct competition with the Company; provided, however, that Misconduct
shall not be based upon any act or omission believed by the Participant
in good faith to be in the best interest of the Company. For purposes of
this Section 2(g) the term "Company" includes any subsidiary, joint
venture, partnership or other entity in which the Company has a material
financial interest. In making any determination hereunder, the Company
shall act fairly and in a nondiscriminatory manner, and shall give the
Participant an opportunity to be heard and present evidence.
(h) "Original Participant" means any one of those designated a
Participant as of September 13, 1984. All of the Original Participants are
listed on Exhibit 3(b)(2) hereto.
(i) "Participant" means an eligible individual who is designated a
Participant by action of the Board.
(j) "Plan" means the Boothe Financial Corporation Key Executive
Retirement Plan - Level II, as set forth herein and as it may be amended
from time to time.
(k) "Salary" means one-twelfth of the highest annual base salary rate of
Participant in effect within 18 months prior to the date his or her
employment with the Company terminates. Salary shall not include bonuses,
commissions, expense reimbursements, stock option gains or other special
payments not included in the Participant's annual base salary rate.
SECTION 3. ELIGIBILITY AND PARTICIPATION.
(a) ELIGIBILITY. Any individual who is employed by the Company or one of
its subsidiaries in a senior executive capacity is eligible to be designated as
a participant in the Plan.
(b) DESIGNATION OF PARTICIPANTS. An eligible individual may become a
Participant in the Plan solely by designation as such by action of the Board.
The Board shall take any such action in its sole discretion and shall have no
obligation to designate as a Participant any individual who satisfies the
eligibility criteria described in Section 3(a) above. Within a reasonable period
of time thereafter the Company and the Participant shall enter into an agreement
substantially in the form of Exhibit 3(b)(1) hereto, or such other forms as the
Company may adopt, reflecting the Participant's designation as such and
providing, among other things, that the Participant relinquishes all rights to
severance pay under any Company policy and that no future severance pay shall
accrue to the Participant, except that such relinquishment shall not apply to
any severance benefits accorded under a written agreement between the
Participant and the Company relating to the Participant's employment generally.
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SECTION 4. BENEFITS.
(a) ELIGIBILITY. A Participant shall be eligible to receive the benefits
provided by the Plan if his or her employment with the Company and any of its
subsidiaries and affiliates is terminated, so that he or she is no longer
employed by the Company or any subsidiary or affiliate of the Company, where
such termination occurs after the Participant has attained such age as shall be
designated by the Board (age 47 for all Original Participants), whether such
termination is voluntary, involuntary, by reason of his or her death or
disability, or for any reason other than Misconduct, and without regard to his
or her activities (including employment by another) following such termination.
If a Participant's employment with the Company is terminated by reason of
Misconduct, then he or she shall forfeit any and all right to the payment of
benefits hereunder unless the Company determines that only a partial forfeiture
is appropriate. If Misconduct is not discovered until after the Participant's
employment is terminated, the Misconduct shall not affect any payments
theretofore made but no further payments shall be made to the Partcipant or his
or her Designated Beneficiary. In the event of the termination of a
Participant's employment (i) after the Participant has attained the age of his
or her eligibility for benefits designated by the Board in accordance with this
Section 4(a), and (ii) either prior to or within six (6) months following a
Change in Control, such termination shall be deemed to have been not by reason
of Misconduct unless a majority of those persons who were directors of the
Company continuously for a period of six (6) months immediately prior to the
Change in Control determine and confirm in writing that the termination was for
Misconduct, in which case the other provisions of the Plan regarding
terminations for Misconduct shall apply.
(b) AMOUNT AND DURATION OF BENEFITS. Subject to any limitations imposed by
written agreement entered into between a Participant and the Company, a
Participant's benefits under the Plan shall be equal to twenty-five percent
(25%) of his or her Salary, increased on a compound basis on each anniversary of
the Participant's Commencement Date by a percentage equal to the annual
per-centage increase in the Consumer Price Index, if any, for the last calendar
year, but not more than 7 1/2%; there shall be no reductions in benefits as a
result of any decrease in the Consumer Price Index. Benefits shall be payable on
the last day of each month, commencing with the Participant's Commencement Date
and ending with the last day of the month in which the Participant dies;
provided, however, that if the Participant dies before termination of employment
or after his or her employment terminates but before receiving 180 monthly
payments, benefits shall be paid to the Participant's Designated Beneficiary
until a total of 180 monthly payments has been made to the Participant and/or
his or her Designated Beneficiary. Notwithstanding the foregoing, additional
benefits may be provided in any written agreement entered into between the
Company and any Participant.
SECTION 5. UNFUNDED NATURE OF BENEFITS
Benefits and administrative expenses of the Plan shall be paid as needed
solely from the general assets of the Company. The obligation of the Company
under the Plan shall represent only its unfunded and unsecured promise to pay
the benefits provided herein. While the Company reserves the right to provide
for its liabilities through the purchase of one or more insurance contracts, the
creation of a trust or otherwise, the adoption of the Plan, the execution of an
individual agreement pursuant to the Plan and the Company's action in providing
for such liabilities shall not give a Participant any interest in any specific
asset of the Company, including such insurance contracts and interests in any
such trusts, and with respect to the Company's obligations under the Plan or any
agreement executed pursuant thereto, the Participant shall have the status of a
general creditor of the Company.
SECTION 6. AMENDMENT AND TERMINATION OF THE PLAN.
The Company reserves the right to amend or terminate the Plan at any time by
action of the Board; provided, however, that no such action by the Company shall
reduce, eliminate, or otherwise affect the Company's obligation to pay benefits
to or on behalf of an individual who had been designated as a
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Participant prior to the taking of such action without the express written
consent of such Participant, such consent to be given or withheld in the
exercise of such Participant's absolute discretion.
SECTION 7. GENERAL PROVISIONS.
(a) NO ASSIGNMENT OF INTEREST. No right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber
or charge the same shall be void.
(b) NO EMPLOYMENT RIGHTS. Neither the Plan nor any individual agreement
entered into pursuant to the Plan nor any right created under the Plan or any
such agreement shall in any way affect the right of the Company to terminate a
Participant's employment with or without cause; provided, however, that this
Section 7(b) shall not affect any employment rights granted under an agreement
relating to a Participant's employment generally.
(c) GOVERNING LAW. The Plan and all rights and obligations hereunder shall
be interpreted and construed in accordance with the laws of the State of
California applicable to contracts entered into and wholly to be performed
within the State of California by California residents.
(d) BINDING EFFECT OF PLAN. The Plan shall be binding upon and shall inure
to the benefit of the heirs, executors and administrators of a Participant and
the successors and assigns of the Company. The Company's obligations hereunder
shall not be terminated by reason of any liquidation, dissolution, bankruptcy,
cessation of business, or similar event relating to the Company nor by reason of
any merger, consolidation or other reorganization of the Company. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company expressly to assume and agree to perform its obligations
under the Plan in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.
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EXHIBIT 10.4
ROBERT HALF INTERNATIONAL INC.
RESTATED RETIREMENT AGREEMENT
This agreement ("Agreement'), made effective as of July 1, 1996, by and
between Robert Half International Inc., a Delaware corporation (the "Company")
and Harold M. Messmer, Jr. ("Participant").
WITNESSETH:
WHEREAS, the Board of Directors designated Participant as a Participant (as
defined therein) in the Boothe Financial Corporation Key Executive Retirement
Plan -- Level II (the "Plan") and the parties entered into a previous agreement
to set forth the terms of such participation as of November 14, 1985; and
WHEREAS, since that initial agreement, there have been 8 amendments; and
WHEREAS, Company and Participant desire to enter into the Agreement, which
both constitutes the 9th amendment to the original agreement and a complete
restatement of the original agreement, as amended;
NOW, therefore, pursuant to the Plan and in consideration of the premises
and other valuable consideration, the parties hereto agree as follows to this
restated retirement agreement.
Section 1. DEFINITIONS
As used herein, the following terms shall have the meanings set forth below;
(a) "Annual Percentage Increase in the CPI" for any calendar year shall be
equal to the quotient of (1) the CPI for December of that year less the CPI for
the December of the year immediately preceding divided by (2) the CPI for the
year immediately preceding, which quotient shall be rounded to the nearest tenth
of a percent.
(b) "Base Percentage" shall be the sum of (1) 30% and (2) the product of
.25% and the number determined by subtracting 600 from Participant's age,
expressed in completed months, on the Commencement Date. In no event, however,
shall the Base Percentage be greater than 66%. Notwithstanding the foregoing, if
a Change in Control occurs prior to the Commencement Date, then, effective upon
the occurrence of such Change in Control, the Base Percentage shall be 66%.
(c) "Basic Benefit" means the benefit described in Section 2(b).
(d) "Bonus" with respect to any year means (1) any cash bonus paid to
Participant with respect to such year and (2), if pursuant to any contract, plan
or agreement, noncash compensation (including but not limited to shares of
stock) is paid in lieu of all or a portion of an earned cash bonus, the amount
of cash that would otherwise have been paid.
(e) "Change in Control" has the same meaning as that term is defined in the
Company's 1993 Incentive Plan.
(f) "Commencement Date" means the last day of the month following the later
of (1) the date of termination of Participant's employment with the Company and
all of its subsidiaries and affiliates and (2) Participant's fiftieth birthday.
(g) "Covered Compensation" means (1) $2,500 plus (2) one-twelfth of the
combination of Salary and Bonus paid to Participant with respect to the calendar
year for which the combination is the highest in the five calendar years prior
to the date his employment with the Company and all of its subsidiaries and
affiliates terminates.
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(h) "CPI" means, for any month, the Consumer Price Index for All Urban
Consumers (1982-84 base) for all commodities and services in the San
Francisco-Oakland-San Jose Area for that month as issued by the Bureau of Labor
Statistics of the U. S. Department of Labor or, if such index ceases to exist, a
similar index to be selected by the Board.
(i) "CPI-Based Rate" means a variable percentage rate, adjusted each
calendar year, equal to 3% plus the Annual Percentage Increase in the CPI for
the previous calendar year.
(j) (1) (A) The term "Current Actuarial Value of the Company's
Obligations" refers to the single premium required to purchase an annuity
contract to cover the Company's obligations under this Agreement from an
insurance company as described below. The Company shall solicit bids from all
insurance companies rated AAA by both Moody's and Standard and Poor's, and the
average of the bids obtained shall be the single premium required.
(B) If two bids cannot be obtained from insurance companies with an
AAA rating, at least two bids shall be obtained by soliciting bids from
insurance companies that have lower rankings and have indicated a
willingness to bid. For the purpose of ranking insurance companies by
ratings, a company shall be ranked by the rating from the rating agency
that gives it the lower rating; companies that have the same ranking
based on this criterion, shall then be further ranked by referring to the
rating given them by the other rating agency (so, for example, a company
ranked AA+ by Standard & Poor's and Aa3 by Moody's would be ranked above
a company rated AA by Standard & Poor's and Aa3 by Moody's). The bids
that shall be taken into account are those from the two insurance
companies with the highest rankings that have submitted bids (more than
two bids shall be taken into account and averaged if more than two bids
are received from companies with a ranking equal to or higher than the
ranking that must be considered in order to obtain two bids); provided
that, a bid shall be taken into account only if the insurance company has
a rating of at least Aa3 from Moody's and AA- from Standard & Poor's.
(C) In general, the Company shall solicit bids from all insurance
companies that have indicated a willingness to bid and that have rankings
equal to or above the ranking of any insurance company that submits a
bid. Notwithstanding the preceding sentence, the Company may determine to
request bids from fewer than all insurance companies of a particular
ranking; provided that, (i) bids are received from at least three
insurance companies of that ranking and (ii) the Participant has the
right to designate three of the insurance companies of that ranking from
which bids will be requested.
(D) In the case of any insurance company from which bids are
requested, the bid that shall be taken into account is the last bid
submitted.
(E) In the event that less than two bids are received under
subparagraphs (A) or (B), the "Current Actuarial Value of the Company's
Obligations" shall be based on the interest, mortality, and other
assumptions of the insurance company bids that were last taken into
account when bids were obtained that met the criteria of subparagraph (A)
or (B); provided that these assumptions shall be appropriately adjusted
to reflect any change in interest rates that has occurred since such bids
were obtained. The Company and the Participant shall agree upon the
hiring of an actuarial consulting firm that has no prior relationship
with the Company to make the calculations described in the preceding
sentence. This firm shall be one of the ten largest actuarial consulting
firms.
(2) Solely for the purpose of the annuity bids and purchases described
in the subsection, the Basic Benefit described in Section 2(b) shall be
treated as modified so that, in lieu of an annual increase in the Basic
Benefit based on the Annual Percentage Increase in the CPI, the Basic
Benefit as of the point at which the Current Actuarial Value of the
Company's Obligations is being determined shall be treated as an amount
increasing each year by a fixed percentage equal to the Annual
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Percentage Increase in the CPI for the calendar year preceding the year for
which the single premium is being determined (but not to exceed 7 1/2%).
(k) "Designated Beneficiary" means the person or persons designated by
Participant in a written form acceptable to and delivered to the Company. Any
such designation may be changed by Participant's execution and delivery to the
Company of such change on a written form acceptable to the Company. No form
designating a Designated Beneficiary shall be effective unless received by the
Company before Participant's death. If a Designated Beneficiary has not been
properly designated or is deceased at the time any amount due hereunder is
payable, the Designated Beneficiary shall be Participant's spouse, or, if there
is no surviving spouse, then the Designated Beneficiary shall be Participant's
then living children (in equal shares). If there is neither a surviving spouse
nor surviving children and Participant has not otherwise properly designated a
Designated Beneficiary, Participant's Designated Beneficiary shall be his
estate.
(l) "Salary" with respect to any calendar year means the greater of (1) the
actual cash base salary paid to Participant during such year or (2) the
Participant's "deemed base salary" for the calendar year in question. For
calendar year 1995 Participant's deemed base salary was $413,019 (which was
based on Participant's base salary of $345,000 at May 31, 1991 with CPI
adjustments to December 31, 1995 in the manner described in the following
sentence). For each calendar year subsequent to 1995 Participant's deemed base
salary shall equal the deemed base salary for the prior year increased by (1)
the Annual Percentage Increase for the year in question if the Annual Percentage
Increase in the CPI is from 4% through 10%, (2) 4%, if the Annual Percentage
Increase in the CPI is less than 4%, or (3) 10%, if the Annual Percentage
Interest in the CPI is greater than 10%.
(m) "Supplemental Benefit" means the benefit described in Section 2(c).
Section 2. BENEFITS.
(a) ELIGIBILITY. Participant shall be eligible to receive the benefits
provided by this Agreement upon his termination of employment (whether voluntary
or involuntary, by reason of Participant's death or disability, or otherwise)
with the Company and any of its subsidiaries and affiliates so that Participant
is no longer employed by the Company or any subsidiary or affiliate of the
Company for any reason.
(b) BASIC BENEFIT.
(1) Participant's benefits pursuant to this Agreement shall be equal to
the Base Percentage of his Covered Compensation, increased on a compound
basis on each anniversary of Participant's Commencement Date by a percentage
equal to the Annual Percentage Increase in the CPI, if any, for the prior
calendar year, but not more than 7 1/2%; there shall be no reduction in
benefits as a result of any decrease in the CPI. Benefits shall be payable
on the last day of each month, commencing with the Participant's
Commencement Date and ending with the last day of the month in which
Participant dies.
(2) If Participant dies after his employment terminates but before
receiving 180 monthly payments, benefits shall continue to be paid to
Participant's Designated Beneficiary until a total of 180 monthly payments
have been made to Participant and/or his Designated Beneficiary. Moreover,
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 payment that Participant would have received if then
living until (A) her death, if she is the person who was Participant's wife
at the time of execution of this Agreement, or (B) the earlier of her death
or July 31, 2031, if she was not his wife at the time of execution of this
Agreement.
(3) If Participant dies prior to termination of employment, payments
shall commence to be paid to Participant's Designated Beneficiary commencing
as of the last day of the month following Participants' death in the same
manner as if Participant had terminated employment and died
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immediately after the Commencement Date, thus entitling the Designated
Beneficiary to a minimum of 180 monthly payments.
(c) SUPPLEMENTAL BENEFIT.
(1) In addition to the Basic Benefit, Participant shall also receive a
monthly Supplemental Benefit beginning on the Commencement Date, which
benefit shall be determined in accordance with this subsection (c) and
subject to the conditions stated herein.
(2) The Supplemental Benefit shall be $6,240.63 if Participant retires
at the earliest possible Commencement Date. For each month that Participant
delays his retirement beyond the earliest possible Commencement Date (but
not beyond age 62), however, the Supplemental Benefit shall be increased at
the rate of 8% per annum, compounded monthly. If Participant retires after
age 62, the Supplemental Benefit shall be the same as if Participant had
retired at age 62.
(3) The Supplemental Benefit shall be paid for each of the first 180
months following termination. If Participant should die prior to the
completion of such payments, any remaining payments shall be made to
Participant's Designated Beneficiary.
(4) If Participant dies prior to termination of employment, payments
shall commence to be paid to Participant's Designated Beneficiary commencing
as of the last day of the month following Participant's death in the same
manner as if Participant had terminated employment and died immediately
after the Commencement Date, thus entitling the Designated Beneficiary to
180 payments.
Section 3. UNFUNDED PROMISE.
The obligation of the Company under this Agreement shall represent only its
unfunded and unsecured promise to pay the benefits provided herein. While the
Company reserves the right to provide for its liabilities through the purchase
of one or more insurance contracts, the creation of a trust or otherwise,
neither the execution of this Agreement nor the Company's action in providing
for such liabilities shall give Participant any interest in any specific asset
of the Company, including such insurance contracts and interest in any such
trusts, and with respect to the Company's obligations under this Agreement,
Participant shall have the status of a general creditor of the Company.
Section 4. DISPUTES.
The parties agree that any dispute, controversy or question arising under
the Plan or this Agreement shall be definitively resolved by arbitration
conducted in San Francisco, California under the rules of the California
Arbitration Act. If any such arbitration or action at law or in equity is
brought to enforce or interpret the terms of the Plan or this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs, and
necessary disbursements in addition to any other relief to which it may be
entitled. Upon written request by Participant, the Company shall advance to
Participant amounts equal to all reasonable attorneys' fees, costs, and
necessary disbursements incurred by Participant in seeking to obtain, enforce,
or retain any right, benefit, or payment provided for in the Plan or this
Agreement or in otherwise pursuing or settling any claim hereunder. If the
Company is the prevailing party in any arbitration or action to enforce or
interpret the Plan or this Agreement, Participant shall reimburse the Company in
the full amount of the advances made pursuant to the preceding sentence. If
there is no such arbitration or action or such action is concluded without a
determination of a prevailing party, Participant shall have no obligation to
reimburse the Company for such advances.
Section 5. CODE SECTION 280G LIMITATIONS.
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 federal, state, or local
income or
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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, had
there been no increase in benefits hereunder as a result of the Change in
Control.
Section 6. RABBI TRUST; PURCHASE OF ANNUITIES; CASH LUMP SUMS.
(a) Prior to June 30, 1996, the Company shall establish an irrevocable
"grantor trust" in a form acceptable to Company and Participant. Upon the
establishment of the irrevocable trust, the Company will deposit with the
trustee cash or property (reasonably acceptable to the Participant) in the
amount necessary to fund the then Current Actuarial Value of the Company's
Obligations under this Agreement. Thereafter, within 60 days prior or subsequent
to each subsequent June 30, the Company will deposit with the trustee additional
cash or property (reasonably acceptable to the Participant) necessary to fund
the then Current Actuarial Value of the Company's Obligations that have not been
previously satisfied by the purchase of annuities, funding of the trust, or
otherwise.
(b) (1) Upon termination of Participant's employment, the Company shall
purchase and deliver to Participant an annuity to fund the obligations of the
Company to Participant pursuant hereto, as such obligations exist as of the date
of termination. The annuity to be purchased shall be determined by obtaining
bids from insurance companies that meet the requirements set forth in the
definition of "Current Actuarial Value of the Company's Obligations," and taking
into account those bids that would be taken into account if the Company were
soliciting bids to satisfy its funding obligation under subsection (a). For the
purpose of determining the specifications for the annuity to be purchased, there
shall be applied the modification to the definition of "Annual Percentage
Increase in CPI" described in Section 1(j)(2). The annuity contract to be
purchased shall be the middle bid of the bids obtained (if an even number of
bids are obtained, the least expensive bid shall be ignored if an annuity
contract is to be purchased). Alternatively, at the request of Participant, the
Company shall pay Participant in a lump sum an amount equal to the average of
all the bids that are taken into account. If no annuity bid can be obtained from
an insurance company that meets the criteria of Section 1(j)(1)(A) or (B), the
Participant shall be paid a lump sum calculated in accordance with Section
1(j)(1)(E).
(2) As a condition to the purchase of an annuity or the payment of a
lump sum, Participant shall execute an agreement affirming that benefits
pursuant to this Agreement shall be reduced by reason of the benefits
payable pursuant to the annuity or lump sum, as provided therein. Upon the
delivery of an annuity or lump sum payment following termination of
employment in satisfaction of the Company's obligations hereunder, the
Company may recover the assets of the trust established pursuant to
subsection (a) and the trust shall thereupon terminate.
(3) (A) Subsequent to the annuity purchase or lump sum cash payment
described in subsection (b)(1), further payments may be due from the Company
to the Participant or his Designated Beneficiary, if the Annual Percentage
Increase in the CPI exceeds the fixed percentage used to determine the
annuity to be purchased at the time of termination of employment. The
additional payments, if any, shall be determined on an annual basis by
comparing the payments to be received by the Participant and his Designated
Beneficiary under the annuity contract described in subsection (b)(1) that
was available at termination of employment (the "Annuity Payments") to the
value of the payments described in Section 2 that would have been paid
directly by the Company to the Participant and his Designated Beneficiary if
no settlement had occurred under subsection (b)(1) (the "Hypothetical
Payments"). The comparison shall be made as of December 31 of each year and
the value of each Hypothetical Payment and each Annuity Payment shall be
increased from the date of hypothetical payment or the date that the Annuity
Payment would have been received (based on the assumption that Participant
elected to receive an annuity contract with the features described in this
Agreement) to such December 31 using the CPI-Based Rate as it exists during
the period of time for which an
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interest rate is being determined, compounded monthly. If the value of the
Hypothetical Payments exceed the value of the Annuity Payments as of any
December 31, an additional lump sum payment equal to such excess shall be
payable as soon as practicable to either Participant or his Designated
Beneficiary (as may be appropriate) at that time. Such additional payment
shall be taken into account in determining whether, as of any future
December 31, further payments are due from the Company. Each year the
Company shall deliver a statement to Participant or his Designated
Beneficiary (as may be appropriate) showing the calculations set forth in
this paragraph. The statement shall be prepared by an independent public
accounting firm satisfactory to both Company and the person to whom the
statement is to be delivered. In no event shall the operation of this
subsection (b)(3)(A) require payments to the Company.
(B) The calculations described in this subsection (b)(3) shall be
performed on a cumulative basis, so that the Company is given credit for
any periods in which the Annuity Payments are more than the Hypothetical
Payments (this could occur if Annual Percentage Increases in the CPI are
less than the assumed Annual Percentage Increase in the CPI taken into
account at the time that bids for the annuity contract were solicited).
(C) By way of example, assume Participant had terminated employment
in February 1996 (so that his commencement date was March 31, 1996), his
monthly Basic Benefit payment as of March 31, 1996 was $27,470 (based on
a Basic Percentage of 30.25% and Covered Compensation of $90,809), and
the Annual Percentage Increase in the CPI for 1995 was 1.8%. Under these
circumstances, the annuity purchased for Participant would have provided
a 1.8% annual increase in the Basic Benefit. Suppose that the Annual
Percentage Increases in the CPI for 1996, 1997, and 1998 were 3%, 0%, and
3% respectively. Under these circumstances, the monthly payments of the
Basic Benefit under the annuity commencing March 31, 1997, March 31,
1998, and March 31, 1999 would be $27,964, $28,468, and $28,980
respectively, reflecting an annual increase of 1.8%. Based on the actual
Annual Percentage Increases in the CPI, the Hypothetical Payments
commencing March 31, 1997, March 31, 1998, and March 31, 1999 would be
$28,294, $28,294, and $29,143 respectively. Under these circumstances,
the Participant would be underpaid by $330 a month as of March 31, 1997,
overpaid by $174 a month as of March 31, 1998, and underpaid by $163 a
month as of March 31, 1999.
(D) Based on the numbers in the example in subparagraph (C) above,
the following payments should be made. For the period ending December 31,
1997, the Participant should receive an additional payment of $3,375,
representing the value as of December 31, 1997 of the 10 underpayments of
$330, compounded monthly at a 6% annual rate. For the period ending
December 31, 1998, no payment is owed to the Participant, because the two
underpayments of $330 (for January 31 and February 28, 1998) have been
followed by 10 overpayments of $174. Using a 3% annual interest rate,
compounded monthly, it is determined that the Participant has been
overpaid by $1,084 as of December 31, 1998. As provided in the last
sentence of subparagraph (A), however, no payment is due from the
Participant to the Company. Finally, for the period ending December 31,
1999 the Participant has been overpaid for the first two months by $174
and then underpaid for the last ten months by $163. As of December 31,
1999, the net underpayment to Participant based on these 12 payments and
using a 6% annual interest rate, compounded monthly, is $1,302. However,
there must be credited against this underpayment the value as of December
31, 1999 of the $1,084 overpayment as of December 31, 1998. The December
31, 1999 value of the $1,084 overpayment is $1,151, reducing the net
underpayment to Participant to $151, which is the amount payable to
Participant as of that date.
(4) The settlement mechanism in this subsection (b) shall apply in the
event of Participant's death prior to termination of employment except that
Participant's Designated Beneficiary shall have the right to make the
decisions that would otherwise be reserved to Participant.
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Section 7. MISCELLANEOUS.
(a) NO ASSIGNMENT OF INTEREST. No right or benefit under this Agreement
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same shall be void.
(b) NO EMPLOYMENT RIGHTS. None of this Agreement, any provision hereof,
and any right created hereunder shall in any way affect the right of the Company
to terminate Participant's employment with or without cause.
(c) GOVERNING LAW. This Agreement and all rights and obligations hereunder
shall be interpreted and construed in accordance with the laws of the State of
California applicable to contracts entered into and wholly to be performed
within the State of California by California residents.
(d) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement between the parties hereto regarding the specific subject matter
hereof, and supersedes all prior agreements, understandings or commitments,
whether oral or written, with respect thereto to the specific subject matter
hereof. Participant hereby acknowledges and agrees that, as partial
consideration for the benefits to be received by Participant hereunder,
Participant is relinquishing any and all rights to severance pay under any
severance policy of the Company (which rights on the date of this Agreement
would have been for three weeks of severance pay for each year of employment
with the Company) and that no future severance pay under any Company policy
shall accrue to Participant; provided, however, that such relinquishment shall
not apply to any severance benefits accorded under a written agreement between
Participant and the Company relating to Participant's employment generally. No
amendment, modification or supplement of this Agreement may be made except by a
writing signed by both the Company and the Participant.
(e) BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon and
shall inure to the benefit of the heirs, executors and administrators of
Participant and the successors and assigns of the Company. The Company's
obligations hereunder shall not be terminated by reason of any liquidation,
dissolution, bankruptcy, cessation of business, or similar event relating to the
Company nor any reason of any merger, consolidation or other reorganization of
the Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance satisfactory to Participant, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Executed on February 27, 1997 to be effective as of July 1, 1996.
ROBERT HALF INTERNATIONAL INC.
By M. KEITH WADDELL
------------------------------------------
HAROLD M. MESSMER, JR.
------------------------------------------
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EXHIBIT 10.6
ROBERT HALF INTERNATIONAL INC.
EXCISE TAX RESTORATION AGREEMENT
(EFFECTIVE NOVEMBER 5, 1996)
In consideration of the willingness of the individual executives and
directors of Robert Half International Inc. (the "Company") who are listed in
Attachment A to continue to serve the Company until a change of control of the
Company, the Company agrees to pay to each of such individuals (the "Employees")
the following amount:
(a) EXCISE TAX RESTORATION PAYMENT. In the event that it is determined
that any payment or distribution of any type to or for the benefit of the
Employee made by the Company, by any of its affiliates, by any person who
acquires ownership or effective control of the Company or ownership of a
substantial portion of the Company's assets (within the meaning of section 280G
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "Code")) or by any affiliate of such person, whether paid or payable or
distributed or distributable pursuant to the terms of an employment agreement or
otherwise (the "Total Payments"), would be subject to the excise tax imposed by
section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, are
collectively referred to as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (an "Excise Tax Restoration Payment")
in an amount that shall fund the payment by the Employee of any Excise Tax on
the Total Payments as well as all income taxes imposed on the Excise Tax
Restoration Payment, any Excise Tax imposed on the Excise Tax Restoration
Payment and any interest or penalties imposed with respect to taxes on the
Excise Tax Restoration Payment or any Excise Tax.
(b) DETERMINATION BY AUDITORS. All mathematical determinations and all
determinations of whether any of the Total Payments are "parachute payments"
(within the meaning of section 280G of the Code) that are required to be made
under this agreement, including all determinations of whether an Excise Tax
Restoration Payment is required, of the amount of such Excise Tax Restoration
Payment and of amounts relevant to the last sentence of this agreement, shall be
made by the independent auditors retained by the Company most recently prior to
the change in control (the "Auditors"), who shall provide their determination
(the "Determination"), together with detailed supporting calculations regarding
the amount of any Excise Tax Restoration Payment and any other relevant matters,
both to the Company and to the Employee within seven business days of the
Employee's termination date, if applicable, or such earlier time as is requested
by the Company or the Employee (if the Employee reasonably believes that any of
the Total Payments may be subject to the Excise Tax). If the Auditors determine
that no Excise Tax is payable by the Employee, it shall furnish the Employee
with a written statement that such Auditors have concluded that no Excise Tax is
payable (including the reasons therefor) and that the Employee has substantial
authority not to report any Excise Tax on the Employee's federal income tax
return. If an Excise Tax Restoration Payment is determined payable, it shall be
paid to the Employee within five business days after the Determination is
delivered to the Company or the Employee. Any determination by the Auditors
shall be binding upon the Company and the Employee, absent manifest error.
(c) UNDERPAYMENTS AND OVERPAYMENTS. As a result of uncertainty in the
application of section 4999 of the Code at the time of initial determination by
the Auditors hereunder, it is possible that Excise Tax Restoration Payments not
made by the Company should have been made ("Underpayments") or that Excise Tax
Restoration Payments will have been made by the Company which should not have
been made ("Overpayments"). In either event, the Auditors shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall promptly be paid by the
Company to or for the benefit of the Employee. In the case of an Overpayment,
the Employee shall, at the direction and expense of the Company, take such steps
as are reasonably
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necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company and
otherwise reasonably cooperate with the Company to correct such Overpayment;
PROVIDED, HOWEVER, that (i) the Employee shall in no event be obligated to
return to the Company an amount greater than the net after-tax portion of the
Overpayment that the Employee has retained or has recovered as a refund from the
applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent of this agreement, which is to make the
Employee whole, on an after-tax basis, for the application of the Excise Tax, it
being understood that the correction of an Overpayment may result in the
Employee's repaying to the Company an amount which is less than the Overpayment.
(d) This agreement amends and supersedes provisions concerning parachute
payments under section 280G of the Code and excise taxes under section 4999 of
the Code in any other employment agreements or other agreements between the
Employee and the Company.
This agreement is adopted this 5th day of November 1996.
ROBERT HALF INTERNATIONAL INC.
By: /s/ M. KEITH WADDELL
-----------------------------------------
M. Keith Waddell
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
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EXCISE TAX RESTORATION AGREEMENT
ATTACHMENT A
INDIVIDUALS COVERED BY THIS AGREEMENT
NOVEMBER 5, 1996
<TABLE>
<S> <C>
Harold M. Messmer, Jr.
Andrew S. Berwick, Jr.
Fredrick P. Furth
Edward W. Gibbons
Frederick A. Richman
Thomas J. Ryan
J. Stephen Schaub
M. Keith Waddell
Robert W. Glass
Steven Karel
Barbara J. Forsberg
Kirk E. Lundburg
Paul F. Gentzkow
</TABLE>
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EXHIBIT 10.7
OUTSIDE DIRECTORS' OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 5, 1996)
1. DEFINITIONS. As used in this Plan, the following terms have the
following meanings:
1.1. ADMINISTRATOR means the Board or a committee appointed by the
Board.
1.2. AFFILIATE means a "parent" or "subsidiary" corporation, as defined
in Sections 425(e)and 425(f), respectively, of the Code.
1.3. ANNUAL ORGANIZATIONAL MEETING means the first meeting of the Board
after the annual meeting of the Company's stockholders.
1.4. BOARD means the Board of Directors of the Company.
1.5. CHANGE IN CONTROL. A Change in Control means any of the
following events:
1.5.1. Any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored
by the Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation of
which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party has
acquired such securities not with the purpose nor with the effect of changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (i) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company, (ii)
making, or in any way participating in, any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the Exchange Act) to
vote any voting securities of the Company (including, without limitation, any
such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking
to advise or influence any party with respect to the voting of any voting
securities of the Company, directly or indirectly, relating to a merger or
other business combination involving the Company or the sale or transfer of
substantial assets of the Company, (iii) forming, joining or in any way
participating in any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination involving
the Company or the sale or transfer of any substantial assets of the Company,
or (iv) otherwise acting, alone or in concert with others, to seek control of
the Company or to seek to control or influence the management or policies of
the Company.
1.5.2. The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
1.5.3. A change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors"
shall mean directors who either (i) are directors of the Company as of the
date hereof, or (ii) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with
an actual or threatened proxy contest relating to the election of directors
to the Company). As a result of or in connection with any cash tender offer,
merger, or other business combination, sale of assets or contested election,
or combination of the foregoing, the persons who were directors of the
Company just prior to such event shall cease within one year to constitute a
majority of the Board.
1.5.4. 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.
1.5.5. 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.
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.
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1.9. ELIGIBLE DIRECTOR means a Director who is not also an employee of
the Company or an Affiliate.
1.10. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
1.11. GRANT DATE means the date on which an Option is granted.
1.12. OFFER means a tender offer or an exchange offer for shares of the
Company's Stock.
1.13. OPTION means an option to purchase Stock as described in Section
5.1 hereof. An Option granted under this Plan is a nonstatutory option to
purchase Stock which does not meet the requirements set forth in Section
422A of the Code.
1.14. OPTION AGREEMENT means a written agreement evidencing an Option,
in form satisfactory to the Company, duly executed on behalf of the Company
and delivered to and executed by an Optionee.
1.15. OPTIONEE means an Eligible Director who has been granted an
Option.
1.16. PLAN means the Outside Directors' Option Plan.
1.17. SECURITIES ACT means the Securities Act of 1933, as amended.
1.18. STOCK means the Common Stock, $.001 par value, of the Company.
1.19. STOCK PURCHASE AGREEMENT means a written agreement, in form
satisfactory to the Company, duly executed by the Company and an Optionee
who has exercised an Option to purchase Stock.
1.20. TERMINATION DATE means the date on which an Optionee ceases to be
a Director of the Company.
1.21. VESTING DATE means, with respect to each calendar year, the last
day of the month in which the Annual Organization Meeting is held; provided,
however, that the "Vesting Date" with respect to a particular Option shall
not include the last day of the month in which such Option is granted.
1.22. VOTING SHARES means the outstanding shares of the Company
entitled to vote for the election of directors.
2. PURPOSES OF THE PLAN. The purposes of the Plan are to attract and
retain the best available candidates for the Board, to provide additional equity
incentives to Eligible Directors through their participation in the growth value
of the Stock, and to promote the success of the Company's business. To
accomplish the foregoing objectives, this Plan provides a means whereby Eligible
Directors will receive Options to purchase Stock.
3. STOCK SUBJECT TO THE PLAN. The number of authorized but previously
unissued shares of the Company's Stock available for issuance hereunder shall
equal the number of shares of Stock with respect to which Options are granted
pursuant to Section 5 hereof.
4. ADMINISTRATION. The Administrator shall have the authority to grant
Options upon the terms and conditions of this Plan, and to determine all other
matters relating to this Plan. The Administrator may delegate ministerial duties
to such employees of the Company as it deems proper. All questions of
interpretation, implementation and application of this Plan shall be determined
by the Administrator, and such determinations shall be final and binding on all
persons.
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<PAGE>
5. TERMS AND CONDITIONS OF OPTIONS.
5.1. GRANT OF OPTION. Options shall be granted pursuant to this Plan
as follows:
5.1.1. GRANT ON EFFECTIVE DATE. Upon the effective date of this
Plan, an Option for 20,000 shares of Stock shall be granted to each
Eligible Director who shall not previously have been granted an option by
the Company for the purchase of shares of Stock.
5.1.2. SUBSEQUENT GRANTS. On the date of each Annual Organizational
Meeting subsequent to the effective date of this Plan, an Option shall be
granted to each Eligible Director. With respect to any Eligible Director
who, prior to such date, shall not have been granted an option by the
Company, whether pursuant to this Plan or any other plan or arrangement
with the Company, the Option shall be for 10,000 shares of Stock.
Otherwise, the Option shall be for 8,000 shares of Stock.
5.2. EXERCISE PRICE. The exercise price of an Option shall be 100% of
the value of the Stock on the Grant Date, determined in accordance with
Section 6 hereof.
5.3. OPTION TERM. Each Option granted under this Plan shall expire ten
(10) years from the Grant Date.
5.4. OPTION EXERCISE.
5.4.1. INITIAL EXERCISE. No Option may be exercised in whole or in
part until the later to occur of (i) the first Vesting Date following the
Grant Date of such Option and (ii) six months after the Grant Date of
such Option.
5.4.2. STOCKHOLDER APPROVAL. If stockholder approval of this Plan
is required (a) under the rules and regulations promulgated under Section
16 of the Exchange Act in order to exempt any transaction contemplated by
this Plan from Section 16(b) of the Exchange Act, or (b) by the rules of
the New York Stock Exchange, if the Company's securities are listed
thereon, or (c) by the rules of the National Association of Securities
Dealers automated quotation system ("NASDAQ"), National Market System, if
the Company's securities are quoted thereon, then no Option may be
exercised in whole or in part until the stockholders of the Company have
approved this Plan.
5.4.3. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued
pursuant to the exercise of an Option unless the exercise of the Option
and the issuance and delivery of Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, applicable state securities laws, the
rules and regulations promulgated under each of the foregoing, the
requirements of the New York Stock Exchange (if the Company's securities
are listed thereon) and the requirements of NASDAQ pertaining to the
National Market System (if the Company's securities are quoted thereon),
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
5.5. REGISTRATION AND RESALE. If the Stock subject to this Plan is not
registered under the Securities Act and under applicable state securities
laws, the Administrator may require that the Participant deliver to the
Company such documents as counsel for the Company may determine are
necessary or advisable in order to substantiate compliance with applicable
securities laws and the rules and regulations promulgated thereunder.
5.6. VESTING SCHEDULE. An Optionee's right to exercise an Option shall
vest, as to twenty-five percent (25%) of the Stock (as adjusted, pursuant to
Section 5.8.1 hereof, if applicable) initially subject to the Option, on
each of the first through fourth Vesting Dates following the Grant Date.
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5.7. PAYMENT UPON EXERCISE. At the time written notice of exercise of
an Option is given to the Company, the Optionee shall make payment in full,
in cash or check or by one of the methods specified in Section 5.7.1 or
Section 5.7.2 below, for all Stock purchased pursuant to the exercise of
such Option. Proceeds of any such payment shall constitute general funds of
the Company.
5.7.1. PROMISSORY NOTE. An Option may be exercised by delivery of
the Optionee's full recourse promissory note for any portion or all of
the aggregate exercise price of the Stock as to which the Option is being
exercised. Such note shall (a) bear interest at the lowest rate which
will not result in interest being imputed pursuant to the Internal
Revenue Code, (b) mature four years after the date of exercise and (c) be
on such other terms as determined by the Administrator. Such promissory
note shall be secured by a security interest in the Stock purchased
pursuant to the Option and in such other manner, if any, as the
Administrator shall approve.
5.7.2. DELIVERY OF STOCK. An Option may be exercised by delivery by
the Optionee of Stock already owned by the Optionee for all or part of
the aggregate exercise price of the Stock as to which the Option is being
exercised, so long as (i) the value of such Stock (determined as provided
in Section 6) is equal on the date of exercise to the aggregate exercise
price of the shares of Stock as to which the Option is being exercised,
or such portion thereof as the Optionee is authorized to pay by delivery
of Stock and (ii) such previously owned shares have been held by the
Optionee for at least six months.
5.8. ADJUSTMENTS.
5.8.1. CHANGES IN CAPITAL STRUCTURE. If the Stock is changed by
reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities
other than as a result of a Change of Control, the Administrator shall
make such appropriate adjustments in (i) the number of shares of Stock to
be covered by options granted under Section 5.1.2 hereof, (ii) each
Option outstanding under this Plan, and (iii) the exercise price of each
outstanding Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such adjustment.
Each such adjustment shall be determined by the Administrator in its sole
discretion, which determination shall be final and binding on all
persons. Any new or additional Stock to which an Optionee may be entitled
under this Section 5.8.1 shall be subject to all of the terms and
conditions set forth in Section 5 of this Plan.
5.8.2. CHANGE OF CONTROL. In the event of a Change of Control, all
Options shall vest immediately.
5.9. NO ASSIGNMENT. No right or benefit under, or interest in, the
Plan shall be subject to assignment or transfer (other than by will or the
laws of descent and distribution), and no such right, benefit or interest
shall be subject to attachment or legal process for or against Participant
or his or her beneficiaries, as the case may be. During the life of the
Optionee, an Option shall be exercisable only by the Optionee or, in the
event of disability of the Optionee, by the Optionee's guardian or legal
representative.
5.10. TERMINATION; EXPIRATION OF UNVESTED OPTIONS. Options granted to
an Optionee under this Plan, to the extent such rights have not expired or
been exercised, shall terminate on such Optionee's Termination Date;
provided, however, that an Option may be exercised, to the extent vested and
exercisable on the Termination Date, for a period of thirty (30) days after
such Optionee's Termination Date; and, provided further, that if exercise of
an Option during such thirty (30) day period would subject such Optionee to
liability under Section 16(b) of the Exchange Act, such thirty (30) day
period shall not begin to run until six (6) months from the date of the last
Stock transaction made, indirectly or directly, by such Optionee prior to
such Optionee's Termination Date.
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6. DETERMINATION OF VALUE. For purposes of this Plan, the value of the
Stock shall be the closing sales price on the New York Stock Exchange or the
NASDAQ National Market System, as the case may be, on the date the value is to
be determined as reported in THE WALL STREET JOURNAL (Western Edition). If there
are no trades on such date, the closing sale price on the last preceding
business day upon which trades occurred shall be the fair market value. If the
Stock is not listed on the New York Stock Exchange or quoted on the NASDAQ
National Market System, the fair market value shall be determined in good faith
by the Administrator.
7. MANNER OF EXERCISE. An Optionee wishing to exercise an Option shall
give written notice to the Company at its principal executive office, to the
attention of the Secretary of the Company, accompanied by an executed Stock
Purchase Agreement and by payment of the Option exercise price in accordance
with Section 5.7. The date the Company receives written notice of an exercise
hereunder accompanied by payment of the Option exercise price will be considered
the date such Option was exercised. Promptly after receipt of such written
notice and payment, the Company shall deliver to the Optionee or such other
person permitted to exercise such Option under Section 5.9, a certificate or
certificates for the requisite number of shares of Stock. The Company shall pay
any stock issue or transfer tax incurred with respect to such exercise and
issuance.
8. RIGHTS.
8.1. RIGHTS AS OPTIONEE. No Eligible Director shall acquire any rights
as an Optionee unless and until an Option Agreement has been duly executed
on behalf of the Company, delivered to the Optionee and executed by the
Optionee.
8.2. RIGHTS AS STOCKHOLDER. No person shall have any rights as a
stockholder of the Company with respect to any Stock subject to an Option
until the date that a stock certificate has been issued and delivered to the
Optionee.
8.3. NO RIGHT TO REELECTION. Nothing contained in the Plan or any
Option Agreement shall be deemed to create any obligation on the part of the
Board to nominate any Director for reelection by the Company's stockholders,
or confer upon any Director the right to remain a member of the Board for
any period of time, or at any particular rate of compensation.
9. REGISTRATION AND RESALE. The Board may, but shall not be required to,
cause the Plan, the Options, and Stock subject to the Plan to be registered
under the Securities Act and under the securities laws of any state. No Option
may be exercised, and the Company shall not be obliged to grant Stock upon
exercise of an Option, unless, in the opinion of counsel for the Company, such
exercise and grant is in compliance with all applicable federal and state
securities laws and the rules and regulations promulgated thereunder. As a
condition to the grant of an Option for the issuance of Stock upon the exercise
of an Option, the Administrator may require that the Optionee agree to comply
with such provisions and federal and state securities laws as may be applicable
to such grant or the issuance of Stock, and that the Optionee delivers to the
Company such documents as counsel for the Company may determine are necessary or
advisable in order to substantiate compliance with applicable securities laws
and the rules and regulations promulgated thereunder.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the
Administrator may at any time amend, alter, suspend, or discontinue this Plan,
except to the extent that stockholder approval is required for any amendment or
alteration (a) by Rule 16b-3 or applicable law in order to exempt from
Section 16(b) of the Exchange Act any transaction contemplated by this Plan,
or (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon, or (c) by the rules of NASDAQ pertaining to
the National Market System, if the Company's securities are quoted thereon;
provided, however, no amendment, alteration, suspension or discontinuation
shall be made that would impair the rights of any Optionee under an Option
without such Optionee's consent; and provided further, any provision in this
Plan relating to the eligibility of Directors to participate in this Plan,
the timing of Option grants made under this Plan or the amount of Options
granted to a Director under this Plan shall not be amended, to the extent so
provided by Rule 16b-3, more than once every six months, other
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than to comport with the changes in the Code or the rules thereunder. Subject to
the foregoing, the Administrator shall have the power to make such changes in
the regulations and administrative provisions hereunder, or in any Option (with
the Optionee's consent), as in the opinion of the Administrator may be
appropriate from time to time.
11. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such person.
12. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
13. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board. If stockholder approval is required (a) under the General Rules and
Regulations promulgated under Section 16 of the Exchange Act in order to exempt
any transaction contemplated by this Plan from Section 16(b) of the Exchange Act
or (b) by the rules of the New York Stock Exchange, if the Company's securities
are listed thereon, or (c) by the rules of NASDAQ pertaining to the National
Market System, if the Company's securities are quoted thereon, then this Plan
shall be submitted to the stockholders of the Company for consideration at the
next annual meeting of stockholders. The Administrator may make Options
conditioned on such approval, and any Option so made shall be effective as of
the date of grant, subject only to such approval.
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EXHIBIT 10.8
ROBERT HALF INTERNATIONAL INC.
1989 RESTRICTED STOCK PLAN
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 5, 1996)
1. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
1.1. ADMINISTRATOR means the Board or a committee appointed by the
Board, the composition and size of which shall cause such committee to
satisfy the requirements of Rule 16b-3 of the Exchange Act with respect
to officers and directors.
1.2. BOARD means the Board of Directors of the Company.
1.3. COMPANY means Robert Half International Inc., a Delaware
corporation.
1.4. CONTINUOUS EMPLOYMENT means employment with the Company or any
Subsidiary without any termination or leave of absence, except for a leave
of absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
1.5. DISABILITY OR DISABLED shall mean (i) a physical or mental
condition which, in the judgment of the Administrator based on competent
medical evidence satisfactory to the Administrator (including, if required
by the Administrator, medical evidence obtained by an examination conducted
by a physician selected by the Administrator), renders Participant unable to
engage in any substantial gainful activity for the Company and which
condition is likely to result in death or to be of long, continued and
indefinite duration, or (ii) a judicial declaration of incompetence.
1.6. ELIGIBLE EMPLOYEE means an employee of the Company or any
Subsidiary (including an employee who is a director and/or officer) who, as
determined by the Administrator in its sole discretion, has and exercises
management functions and responsibilities.
1.7. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
1.8. GRANT DATE means the date on which a Restricted Stock Grant is
granted to an Eligible Employee.
1.9. ISSUE DATE means the date on which shares of Stock subject to a
Restricted Stock Grant are issued or transferred by the Company to the
account of an Eligible Employee who has received such grant.
1.10. OFFER means a tender offer or an exchange offer for the Company's
Stock.
1.11. PARTICIPANT means an individual to whom a Restricted Stock Grant
is granted under the Plan.
1.12. PLAN means this 1989 Restricted Stock Plan.
1.13. RESTRICTED STOCK GRANT means a grant described in Section 8 of
the Plan which is made by the Company and approved by the Administrator
under and pursuant to the Plan.
1.14. SECURITIES ACT means the Securities Act of 1933, as amended.
1.15. STOCK means the Common Stock, $.001 par value, of the Company.
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1.16. SUBSIDIARY means a "subsidiary" corporation as defined in Section
425(f) of the Internal Revenue Code of 1986, as amended.
1.17. VESTING DATE means the last day of the calendar month in which
the annual organizational Board meeting following the annual meeting of the
stockholders of the Company is held, or such other date as shall be
established by the Administrator; provided, however, that the "Vesting Date"
with respect to a particular Restricted Stock Grant shall not include the
last day of the month in which such Restricted Stock Grant is granted.
1.18. VOTING SHARES means the outstanding shares of the Company
entitled to vote for the election of Directors.
1.19. WITHHOLDING TAXES means any applicable federal, state and local
income and other employment taxes which the Company is required to withhold
in connection with the lapse of restrictions on Stock subject to a
Restricted Stock Grant.
2. PURPOSE. The purpose of the Plan is to aid the Company and its
Subsidiaries in attracting, retaining and motivating management employees with
outstanding ability, competence and potential. The Plan provides such employees
with a proprietary interest in the Company's success and progress by granting to
them shares of Stock in accordance with the terms and conditions set forth
below.
3. STOCK SUBJECT TO THE PLAN. A total of 1,200,000 shares of Stock,
subject to adjustment as provided in Section 9 of the Plan, all of which shall
be treasury shares, shall be reserved for issuance under this Plan. If, on or
before termination of the Plan, any shares of Stock shall be reacquired by the
Company pursuant to the termination provisions described in Section 11 of the
Plan or in the instruments evidencing the making of Restricted Stock Grants,
such shares may again be granted under the Plan.
4. ADMINISTRATION. The Plan shall be administered by the Administrator.
Subject to all the applicable provisions of the Plan, the Administrator is
authorized to make Restricted Stock Grants in accordance with the Plan, to
construe and interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, and to make all determinations and to take all
actions necessary or advisable for the Plan's administration. Whenever the Plan
authorizes or requires the Administrator to take any action, make any
determination or decision, or form any opinion, then any such action,
determination, decision or opinion by or of the Administrator shall be in the
absolute discretion of the Administrator and shall be final and binding upon all
persons in interest, including the Company, its shareholders, and all
Participants.
5. PARTICIPANTS. From time to time the Administrator shall, in its sole
discretion, but subject to all of the provisions of the Plan, determine which
Eligible Employees will be granted Restricted Stock Grants under the Plan, the
number of shares of Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Restricted Stock Grant. In
making such determinations, the Administrator shall take into account the nature
of services rendered and to be rendered by the respective recipients, their
present and potential contribution to the Company's success and such other
factors as the Administrator in its discretion deems relevant to the
accomplishment of the purposes of the Plan. In any year, the Administrator may
approve Restricted Stock Grants to Eligible Employees subject to differing terms
and conditions.
6. RIGHTS WITH RESPECT TO SHARES OF STOCK. The Administrator shall notify
each Eligible Employee to whom a Restricted Stock Grant has been granted of such
grant. Upon written acceptance by the Eligible Employee of restrictions and
other terms and conditions described in the Plan and in the instrument
evidencing such Restricted Stock Grant, the Eligible Employee shall be a
Participant, and the Company shall cause to be issued or transferred to the name
of the Participant a certificate or certificates for the number of shares of
Stock granted, subject to the provisions of Section 8.6 hereof. From and after
the Issue Date, the Participant shall have absolute ownership of such shares of
Stock,
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including the right to vote and to receive dividends thereon, subject to the
terms, conditions and restrictions described in the Plan and in the instrument
evidencing the grant of such Restricted Stock Grant.
7. EMPLOYMENT. No grant of a Restricted Stock Grant to a Participant under
the Plan shall affect any right of the Company or any Subsidiary to terminate,
with or without cause, the Participant's employment at any time.
8. TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT. Each Restricted Stock
Grant made under the Plan shall contain the following terms, conditions and
restrictions and such additional terms, conditions and restrictions as may be
determined by the Administrator at the time of grant.
8.1. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Participant's
Continuous Employment with the Company or any Subsidiary shall terminate for
any reason, except as provided in Section 8.3, all the rights of the
Participant to such shares of Stock as to which restrictions have not lapsed
pursuant to this Section or under Sections 8.2, 8.3 or 8.4 hereof shall
immediately terminate; provided, however, that the Administrator, in its
sole discretion, within ninety (90) days of such termination of Continuous
Employment, may notify the Participant in writing that the Participant's
rights in such shares will not terminate and that the Participant shall
continue to be the owner of such shares, subject to such continuing
restrictions as the Administrator may prescribe in such notice.
8.2. LAPSE OF RESTRICTIONS. The restrictions imposed on any Restricted
Stock Grant shall lapse as to twenty-five percent (25%) of the Stock granted
pursuant to such grant on each of first through fourth Vesting Dates which
occur following the related Grant Date of such Restricted Stock Grant.
Notwithstanding the foregoing, the Administrator may accelerate the lapsing
of restrictions on a Restricted Stock Grant, in whole or in part, (i) as
permitted by Section 8.1; (ii) as required by any employment or other
agreement with the Company or any Subsidiary to which a Participant
hereunder is a party; or (iii) under such terms and conditions as the
Administrator deems appropriate.
8.3. TERMINATION OF CONTINUOUS EMPLOYMENT BY REASON OF DEATH OR
DISABILITY. Any provisions of Section 8.1 to the contrary notwithstanding,
if a Participant (i) has been in the Continuous Employment of the Company or
a Subsidiary since the Grant Date of a Restricted Stock Grant and (ii) the
employment of such Participant is terminated as a result of death or
Disability, then, on the date of such termination, the restrictions imposed
on any Restricted Stock Grant shall lapse as to all shares of Stock granted
to such Participant pursuant to such Restricted Stock Grant.
8.4. CHANGE IN CONTROL. In the event of a Change in Control (as
defined in this Section 8.4), all restrictions on any and all Restricted
Stock Grants then outstanding shall immediately lapse. For purposes of this
Plan, a "Change in Control" shall occur in the event of any of the
following:
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8.4.1. Any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored
by the Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation of
which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party has
acquired such securities not with the purpose nor with the effect of changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (i) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company, (ii)
making, or in any way participating in, any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the Exchange Act) to
vote any voting securities of the Company (including, without limitation, any
such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking
to advise or influence any party with respect to the voting of any voting
securities of the Company, directly or indirectly, relating to a merger or
other business combination involving the Company or the sale or transfer of
substantial assets of the Company, (iii) forming, joining or in any way
participating in any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination involving
the Company or the sale or transfer of any substantial assets of the Company,
or (iv) otherwise acting, alone or in concert with others, to seek control of
the Company or to seek to control or influence the management or policies of
the Company.
8.4.2. The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
8.4.3. A change in the composition of the Board of Directors of
the Company occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (i) are directors of the Company
as of the date hereof, or (ii) are elected, or nominated for election, to the
Board of Directors of the Company with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the
election of directors to the Company). 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.
8.4.4. The Company's stockholders approve a definitive agreement
providing for a transaction in which the Company will cease to be an
independent publicly owned corporation.
8.4.5. The stockholders of the Company approve a definitive
agreement (i) to merge or consolidate the Company with or into another
corporation in which the holders of the Stock immediately before such merger
or reorganization will not, immediately following such merger or
reorganization, hold as a group on a fully-diluted basis both the ability to
elect at least a majority of the directors of the surviving corporation and
at least a majority in value of the surviving corporation's outstanding
equity securities, or (ii) to sell or otherwise dispose of all or
substantially all of the assets of the Company.
8.5. AGREEMENT BY PARTICIPANT REGARDING WITHHOLDING TAXES. Each
Participant granted a Restricted Stock Grant shall represent in writing that
such Participant acknowledges that, with respect to each Restricted Stock
Grant held by such Participant, (i) on each Vesting Date, Withholding Taxes
become due with respect to shares of Stock as to which restrictions lapse,
(ii) payment of Withholding Taxes to the Company is the responsibility of
Participant and (iii) payment of such Withholding Taxes may require a
significant cash outlay by Participant. In addition, each Participant
granted a Restricted Stock Grant shall be subject to the following rules:
8.5.1. PAYMENT OF TAXES. Within five (5) business days following
any lapsing of restrictions pursuant to the operation of Sections 8.1,
8.2, 8.3 or 8.4 hereof, the Company shall notify each affected
Participant or, if applicable under Section 8.3, his or her estate, as to
the amount of Withholding Taxes required to be withheld by the Company as
a result of the lapse of restrictions. Within five (5) business days of
receipt of such notice, Participant shall make full payment of
Withholding Taxes to the Company. Such payment may be made in cash or by
check or by reduction in the number of shares deliverable to Participant.
If Withholding Taxes are paid by reduction of the number of shares
deliverable to Participant, such shares shall be valued as of the date
that the restrictions lapsed. In the event that such payment is not made
within the specified time period, to the extent permitted by law the
Company shall have the right to cause such Participant's Withholding
Taxes obligation to be satisfied by reducing the number of shares of
Stock deliverable or by offsetting such Withholding Taxes against amounts
otherwise due from the Company to such Participant. The Company may
instruct its transfer agent to withhold delivery of certificates
evidencing such shares of Stock until Participant's Withholding Taxes
obligation has been satisfied in full.
8.5.2. ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If
any Participant properly elects within thirty (30) days of the Grant
Date, to include in gross income for federal income tax purposes an
amount equal to the fair market value of the shares of Stock on the Grant
Date, such Participant shall pay to the Company in the calendar month of
such Grant Date, or make arrangements satisfactory to the Administrator
to pay to the Company, any Withholding Taxes required to be withheld with
respect to such shares.
8.6. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. Each
certificate evidencing shares of Stock granted pursuant to a Restricted
Stock Grant may bear an appropriate legend referring to the terms,
conditions and restrictions described in the Plan and in the instrument
evidencing the Restricted Stock Grant. In addition, if required under this
Plan or applicable securities laws, the Company may instruct its transfer
agent that shares of Stock evidenced by such certificates may not be
transferred without the written consent of the Company. Any attempt to
dispose of such shares of Stock in contravention of such terms, conditions
and
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restrictions shall be invalid. Until the restrictions thereon have lapsed
and the related Withholding Taxes obligations have been satisfied, such
certificates will be held in custody by the Company or such bank or other
institution designated by the Administrator.
8.7. NO ASSIGNMENT. Except as specifically provided by law (including
the laws of descent and distribution), no right or benefit under, or
interest in, the Plan shall be subject to assignment, and no such right,
benefit or interest shall be subject to attachment or legal process for or
against Participant or his or her beneficiaries, as the case may be.
8.8. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued
pursuant to a Restricted Stock Grant unless the issuance and delivery of
Stock pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act,
applicable state securities laws, and rules and regulations promulgated
under each of the foregoing, and the requirements of any stock exchange upon
which the Stock may then be listed or quotation system upon which the Stock
may be quoted, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
8.9. REGISTRATION AND RESALE. If the Stock subject to this Plan is not
registered under the Securities Act and under applicable state securities
laws, the Administrator may require that the Participant deliver to the
Company such documents as counsel for the Company may determine are
necessary or advisable in order to substantiate compliance with applicable
securities laws and the rules and regulations promulgated thereunder.
8.10. HOLDING PERIOD. Deleted.
8.11. PERFORMANCE CONDITIONS. If so determined by the Administrator,
any grant of Restricted Shares shall be made subject to a Performance
Condition in addition to any other restrictions imposed pursuant to this
Section 8. Such Performance Condition shall operate as specified in this
Section 8.11.
8.11.1 As used in this Section 8.11, the following terms shall have
the indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the
Performance Period, determined in accordance with generally accepted
accounting principles. For purposes of the foregoing sentence,
earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles
and after full accrual for the bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Actual EPS by
Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Unvested Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
PERFORMANCE PERIOD means the period of service to which the
Performance Condition relates.
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TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to a Performance Condition.
UNVESTED RESTRICTED STOCK AWARD means the number of shares of a
Restricted Stock Award made subject to a Performance Condition with
respect to which the restrictions otherwise imposed by this Section 8
have not lapsed pursuant to Section 8.2, 8.3 or 8.4.
8.11.2 A Restricted Stock Award shall be subject to a Performance
Condition only if (a) the Administrator makes such a determination on the
Grant Date or (b) the Participant consents to the Performance Condition.
8.11.3 If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall establish the Performance Period and
Target EPS for such award no later than the time permitted by section
162(m) of the Internal Revenue Code.
8.11.4 After the public release by the Company of its unaudited
results for the last fiscal quarter of the Performance Period, the Chief
Financial Officer shall, with respect to each Restricted Stock Award made
subject to a Performance Condition, (a) calculate the Actual EPS, (b)
determine the Multiplier, (c) calculate the Final Restricted Stock Award,
and (d) deliver such calculation to the Administrator.
8.11.5 The Administrator shall review the information submitted by
the Chief Financial Officer and certify, in writing, each Final
Restricted Stock Award.
8.11.6 To the extent that a Final Restricted Stock Award is less
than the Unvested Restricted Stock Award, the number of shares of the
Unvested Restricted Stock Award representing the difference shall be
forfeited by the Holder. The Final Restricted Stock Award shall bear the
same vesting schedule as the Unvested Restricted Stock Award, and on each
Vesting Date the percentage of the Final Restricted Stock Award that
vests shall be the same as the percentage of the Unvested Restricted
Stock Award that would have vested had no shares been forfeited as a
result of the Performance Condition.
8.11.7 If all or a portion of an Unvested Restricted Stock Award
made subject to a Performance Condition shall have the restrictions
otherwise imposed by this Section 8 removed by operation of Section 8.3
or 8.4, then the Performance Condition shall be cancelled and none of
such shares shall be subject to reduction or forfeiture as provided by
the Performance Condition. Such shares shall be released to the
Participant in accordance with the terms of this plan relating to shares
with respect to which no restrictions remain.
8.11.8 If all or a portion of an Unvested Restricted Stock Award
made subject to a Performance Condition shall have the restrictions
otherwise imposed by this Section 8 removed for any reason other than by
operation of Section 8.3 or 8.4, no shares shall be released to the
Participant until after the Certification Date. No such removal of
restrictions prior to the Certification Date shall in any way be deemed a
satisfaction, waiver or cancellation of the Performance Condition, and
such Unvested Restricted Stock Award shall remain subject to reduction
and forfeiture as provided by the Performance Condition.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the Stock is changed by
reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities, other
than as a result of a Change of Control, appropriate adjustments shall be made
in the number and class of shares of Stock subject to this Plan and each
Restricted Stock Grant made pursuant to this Plan; provided, however, that if
fractional shares become due to any Participant as a result of any such
adjustment, the Company may, at its option, pay cash in lieu thereof. Each such
adjustment shall be determined by the Administrator in its sole discretion,
which determination shall be final and binding on all persons. Any new or
additional Stock to which a Participant may be entitled under this Section 9
shall be subject to all the terms and conditions set forth in Section 8 of this
Plan.
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10. DURATION OF PLAN. Unless sooner terminated, the Plan shall remain in
effect for a period of ten years from its effective date. Termination of the
Plan shall not affect any Restricted Stock Grants previously granted pursuant
thereto, which shall remain in effect until their restrictions shall have
lapsed, all in accordance with their terms.
11. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the
Administrator may at any time amend, alter, suspend, or discontinue this
Plan, except to the extent that stockholder approval is required for any
amendment or alteration (a) by Rule 16b-3 or applicable law in order to
exempt from Section 16(b) of the Exchange Act any transaction contemplated by
this Plan, (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon, or (c) by the rules of National Association of
Securities Dealers automated quotation system pertaining to the National
Market System, if the Company's securities are quoted thereon; provided,
however, no amendment, alteration, suspension or discontinuation shall be
made that would impair the rights of any Participant under a Restricted Stock
Grant without such Participant's consent. Subject to the foregoing, the
Administrator shall have the power to make such changes in the regulations
and administrative provisions hereunder, or in any Restricted Stock Grant
(with the Participant's consent), as in the opinion of the Administrator may
be appropriate from time to time.
12. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such person.
13. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
14. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board. If stockholder approval is required (a) under the General Rules and
Regulations promulgated under Section 16 of the Exchange Act in order to exempt
any transaction contemplated by this Plan from Section 16(b) of the Exchange Act
or (b) by the rules of the New York Stock Exchange, if the Company's securities
are listed thereon, or (c) by the rules of National Association of Securities
Dealers automated quotation system pertaining to the National Market System, if
the Company's securities are quoted thereon, then this Plan shall be submitted
to the stockholders of the Company for consideration at the next annual meeting
of stockholders. The Administrator may make Restricted Stock Grants conditioned
on such approval, and any Restricted Stock Grant so made shall be effective as
of the date of grant, subject only to such approval.
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EXHIBIT 10.10
ROBERT HALF INTERNATIONAL INC.
1993 INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 5, 1996)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
1993 Incentive Plan (the "Plan") are: (a) to improve individual employee
performance by providing long-term incentives and rewards to key employees of
the Company, (b) to assist the Company in attracting, retaining and motivating
key employees with experience and ability, and (c) to align the interests of
such employees with those of the Company's stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "ADMINISTRATOR" means either the Board of Directors or a committee
of the Board of Directors of the Company, the composition and the size of
which shall cause such committee to satisfy the requirements of Rule 16b-3
of the Exchange Act with respect to officers and directors.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CHANGE IN CONTROL" means the occurrence of any of the following:
(i) Any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored
by the Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation of
which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party has
acquired such securities not with the purpose nor with the effect of changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (A) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company, (B)
making, or in any way participating in, any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the Exchange Act) to
vote any voting securities of the Company (including, without limitation, any
such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking
to advise or influence any party with respect to the voting of any voting
securities of the Company, directly or indirectly, relating to a merger or
other business combination involving the Company or the sale or transfer of
substantial assets of the Company, (C) forming, joining or in any way
participating in any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination involving
the Company or the sale or transfer of any substantial assets of the Company,
or (D) otherwise acting, alone or in concert with others, to seek control of
the Company or to seek to control or influence the management or policies of
the Company.
(ii) The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
(iii) A change in the composition of the Board of Directors of
the Company occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company
as of the date hereof, or (B) are elected, or nominated for election, to the
Board of Directors of the Company with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the
election of directors to the Company). 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.
(iv) 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.
(v) The stockholders of the Company approve a definitive
agreement (A) 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 (B) to sell or otherwise dispose of all or
substantially all of the assets of the Company.
(d) "COMMON STOCK" or "STOCK" means Robert Half International Inc.
Common Stock, par value $.001 per share.
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(e) "COMPANY" means Robert Half International Inc., its divisions and
direct and indirect subsidiaries.
(f) "CONTINUOUS EMPLOYMENT" means employment with the Company or any
Subsidiary without any termination or leave of absence, except for a leave
of absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
(g) "DISABILITY" or "DISABLED" shall mean (i) a physical or mental
condition which, in the judgment of the Administrator based on competent
medical evidence satisfactory to the Administrator (including, if required
by the Administrator, medical evidence obtained by an examination conducted
by a physician selected by the Administrator), renders Holder unable to
engage in any substantial gainful activity for the Company and which
condition is likely to result in death or to be of long, continued and
indefinite duration, or (ii) a judicial declaration of incompetence.
(h) "ELIGIBLE EMPLOYEE" means an employee of the Company or any
Subsidiary (including an employee who is a director and/or officer) who, as
determined by the Administrator in its sole discretion, has and exercises
management functions and responsibilities.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "FAIR MARKET VALUE" means the closing sales price on the New York
Stock Exchange or the NASDAQ National Market System, as the case may be, on
the date the value is to be determined as reported in THE WALL STREET
JOURNAL (Western Edition). If there are no trades on such date, the closing
price on the latest preceding business day upon which trades occurred shall
be the Fair Market Value. If the Stock is not listed in the New York Stock
Exchange or quoted on the NASDAQ National Market System, the Fair Market
Value shall be determined in good faith by the Administrator.
(k) "GRANT" shall mean an Option or a Restricted Stock Award.
(l) "GRANT DATE" means the date a Grant is made under the Plan.
(m) "HOLDER" means the recipient of a Grant pursuant to this Plan.
(n) "ISSUE DATE" means the date on which shares of Stock subject to a
Restricted Stock Award are issued or transferred by the Company to the
account of an Eligible Employee who has received such grant.
(o) "MINIMUM WITHHOLDING TAXES" means any applicable federal, state and
local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject
to a Restricted Stock Award, (ii) the exercise of an Option, or (iii) the
making of an election under Section 83(b) of the Internal Revenue Code with
respect to a Restricted Stock Award.
(p) "OFFER" means a tender offer or an exchange offer for the Company's
Stock.
(q) "OPTION" or "STOCK OPTION" means a right granted under the Plan to a
Holder to purchase shares of Common Stock at a fixed price for a specified
period of time.
(r) "OPTION PRICE" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(s) "OPTIONEE" means an Eligible Employee who has received a Stock
Option granted under the Plan.
(t) "RESTRICTED STOCK AWARD" means a grant described in Section 6 of the
Plan.
(u) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(v) "SUBSIDIARY" means a "SUBSIDIARY" corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended.
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(w) "VESTED" means that portion of a Grant with respect to which the
Vesting Date has arrived or passed.
(x) "VESTING DATE" means the date specified in Section 5 or 6 hereof, as
the case may be, or such other date as shall be established by the
Administrator or otherwise on the Grant Date or thereafter.
(y) "VOTING SHARES" means the outstanding shares of the Company entitled
to vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which Grants may be
made during any calendar year shall be that number which is equal to 1.5% of the
number of issued and outstanding shares of Common Stock of the Company
(excluding treasury shares) as of January 1 of such year (January 1, 1993, in
the case of the first year). Any shares of Common Stock covered by Options which
have terminated or expired prior to exercise or have been cancelled without
value shall not be counted against the annual limit and shall be available for
further grants hereunder and shares constituting the portion of a Restricted
Stock Award that is forfeited before any dividends are paid upon such forfeited
shares shall not be counted against the annual limit and shall be available for
further grants hereunder. The foregoing number of shares available for Grants
shall be subject to any adjustments which may be made pursuant to Section 12
hereof. Shares of Stock used for Options may be either shares of authorized but
unissued Common Stock or treasury shares or both. Shares of Stock used for
Restricted Stock Awards shall be treasury shares to the extent that treasury
shares are available, and, if no treasury shares are available, Restricted Stock
Awards shall be authorized but unissued Common Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in its sole
discretion, but subject to all of the provisions of the Plan, determine which
Eligible Employees will be given Grants under the Plan, the number of Options or
shares of Restricted Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Grant. In making such
determinations, the Administrator shall take into account the nature of services
rendered and to be rendered by the respective recipients, their present and
potential contribution to the Company's success and such other factors as the
Administrator in its discretion deems relevant to the accomplishment of the
purposes of the Plan. In any year, the Administrator may approve Options to
Eligible Employees subject to differing terms and conditions and Restricted
Stock Awards to Eligible Employees subject to differing terms and conditions.
During any calendar year, the number of shares of Stock with respect to which
Options or Restricted Stock are granted to any one individual may not exceed 75%
of the number of shares of Stock available for Grants during 1994, subject to
adjustment pursuant to Section 12 hereof.
5. OPTIONS. Each Option granted hereunder shall be in writing and shall
contain such terms and conditions as the Administrator may determine, subject to
the following:
(a) PRICE. The Option Price shall be not less than 85% of the Fair
Market Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE. Options granted hereunder shall have a term of
no longer than ten years from the Grant Date. An Option may be exercised
only as to those portions of the Option that have Vested. Stock Options must
be exercised for full shares of Common Stock.
(c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be
deemed an Incentive Stock Option (as such term is defined in the Internal
Revenue Code) unless (a) such Option is designated as an Incentive Stock
Option at the time of grant by the Administrator and (b) such Option
otherwise meets the requirements for Incentive Stock Options specified in
the Internal Revenue Code. However, no Option designated as an Incentive
Stock Option shall contain any restrictions upon the ability of the Holder
to dispose of Stock acquired upon the exercise thereof other than as
provided elsewhere in this Plan. During the life of the Plan, the total
number of
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shares for which Incentive Stock Options may be granted may not exceed ten
times the number of shares available for Grants under the Plan during the
first calendar year in which the Plan is in effect.
(d) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Option shall Vest as to twenty-five percent (25%) of the
Stock covered by such Option on each of the first through fourth
anniversaries of the Grant Date. Notwithstanding the foregoing, the
Administrator may accelerate Vesting, in whole or in part, under such terms
and conditions as the Administrator deems appropriate.
(e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give
written notice of exercise to the Company, specifying the number of shares
of Common Stock to be purchased and identifying the specific Options that
are being exercised. From time to time the Administrator may establish
procedures relating to such exercises. An Option is exercisable during a
Holder's lifetime only by the Holder or, with respect to options that are
not designated as Incentive Stock Options, under such other circumstances as
may be permitted by Rule 16b-3, or any successor rule, under the Exchange
Act and all interpretations of the staff of the Securities and Exchange
Commission thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash,
check or delivery of shares of Common Stock that have been owned by Holder
for at least six months. If all or a portion of the purchase price is paid
by delivery of shares, the shares shall be valued at the Fair Market Value
of such shares on the date of exercise. In addition, unless the
Administrator determines otherwise at the time of grant, payment of the
Option Price and of Minimum Withholding Taxes may be made by (i) full
recourse promissory note (secured or unsecured), payable on such terms and
bearing such interest as the Administrator may determine or (ii) delivery
(on a form acceptable to the Administrator) of an irrevocable direction to a
securities broker to sell shares of Common Stock and to deliver part of the
sales proceeds to the Company in payment of the full exercise price and
Minimum Withholding Taxes and receipt of written confirmation from the
securities broker of receipt of such irrevocable direction, the number of
shares sold, the price at which sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable except
by will, by the laws of descent and distribution, or, with respect to
options that are not designated as Incentive Stock Options, pursuant to a
domestic relations order or under such other circumstances as the
Administrator may determine.
6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under the
Plan shall contain the following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be determined by the
Administrator at the time of grant.
(a) RIGHTS WITH RESPECT TO SHARES OF STOCK. Upon written acceptance by
the Eligible Employee of restrictions and other terms and conditions
described in the Plan and in the instrument evidencing such Restricted Stock
Award, the Eligible Employee shall be a Holder, and the Company shall cause
to be issued or transferred to the name of the Holder a certificate or
certificates for the number of shares of Stock granted. From and after the
Issue Date, the Holder shall have absolute ownership of such shares of
Stock, including the right to vote and to receive dividends thereon, subject
to the terms, conditions and restrictions described in the Plan and in the
instrument evidencing the grant of such Restricted Stock Award.
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(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock
Award may not be sold, assigned, pledged, transferred or otherwise conveyed
in any manner until the Vesting Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Restricted Stock Award shall Vest as to twenty-five percent
(25%) of the Stock covered by such grant on each of the first through fourth
Vesting Dates which occur following the related Grant Date of such
Restricted Stock Award. Notwithstanding the foregoing, the Administrator may
accelerate the lapsing of restrictions on a Restricted Stock Award, in whole
or in part under such terms and conditions as the Administrator deems
appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions herein
to the contrary notwithstanding, a Restricted Stock Award shall
automatically become Vested upon (a) the Death or Disability of the Holder
or (b) the occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder
granted a Restricted Stock Award shall represent in writing that such Holder
acknowledges that, with respect to each Restricted Stock Award held by such
Holder, (i) Minimum Withholding Taxes shall be due with respect to shares of
Stock covered by such award, (ii) payment of Minimum Withholding Taxes to
the Company is the responsibility of Holder and (iii) payment of such
Minimum Withholding Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any
Holder properly elects within thirty (30) days of the Grant Date to include
in gross income for federal income tax purposes an amount equal to the fair
market value of the shares of Stock on the Grant Date, such Holder shall pay
in cash to the Company in the calendar month of such Grant Date, or make
arrangements satisfactory to the Administrator to pay to the Company, any
Minimum Withholding Taxes required to be withheld with respect to such
shares.
(g) CONSIDERATION. Recipients of Restricted Stock Awards made in
treasury shares shall not be required to pay any consideration to the
Company. Recipients of Restricted Stock Awards made in the form of
previously unissued shares shall be required to pay such minimum
consideration, if any, as may be required by applicable law. The
Administrator shall determine the form of consideration at the time of the
award, which may include services rendered prior to the award.
(h) PERFORMANCE CONDITIONS. If so determined by the Administrator, any
grant of Restricted Shares shall be made subject to a Performance Condition
in addition to any vesting requirements imposed upon such grant. Such
Performance Condition shall operate as specified in this paragraph (h).
(1) As used in this paragraph (h), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
EPS means fully diluted earnings per share, determined in
accordance with generally accepted accounting principles. For
purposes of the foregoing sentence, earnings shall mean income before
extraordinary items, discontinued operations and cumulative effect of
changes in accounting principles and after full accrual for the
bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Preliminary EPS
by Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
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MEASUREMENT YEAR means (a) in the case of a grant made in the
first fiscal quarter of a fiscal year, that fiscal year or (b) in the
case of a grant made in the second, third or fourth quarters of a
fiscal year, the subsequent fiscal year.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
NINE-MONTH PERIOD means the first three fiscal quarters of the
Measurement Year.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to a Performance Condition.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month
Period.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to a Performance Condition.
(2) A Restricted Stock Award shall be subject to a Performance
Condition only if the Administrator makes such a determination on the
Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall, not later than the end of the second
calendar month of the Measurement Year, determine the Target EPS for such
award.
(4) After the public release by the Company of its unaudited results
for the third fiscal quarter of the Measurement Year, the Chief Financial
Officer shall, with respect to each Restricted Stock Award made subject
to a Performance Condition, (a) calculate the Preliminary EPS, (b)
determine the Multiplier, (c) calculate the Final Restricted Stock Award,
and (d) deliver such calculation to the Administrator.
(5) The Administrator shall, prior to the end of the Measurement
Year, review the information submitted by the Chief Financial Officer and
certify, in writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each Vesting Date
the percentage of the Final Restricted Stock Award that vests shall be
the same as the percentage of the Original Restricted Stock Award that
would have vested had no shares been forfeited as a result of the
performance condition.
(7) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date by
reason of death, Disability or a Change in Control, then the Performance
Condition shall be cancelled and none of such shares shall be subject to
reduction or forfeiture as provided by the Performance Condition. Such
shares shall be released to Holder in accordance with the terms of this
plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date for any
reason other than death, Disability or a Change in Control, no shares
shall be released to the Holder until after the Certification Date. No
such vesting prior to the Certification Date shall in any way be deemed a
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satisfaction, waiver or cancellation of the Performance Condition, and
such Restricted Stock Award shall remain subject to reduction and
forfeiture as provided by the Performance Condition.
(i) ALTERNATIVE PERFORMANCE CONDITIONS. If so determined by the
Administrator, any grant of Restricted Shares shall be made subject to an
Alternative Performance Condition in addition to any vesting requirements
imposed upon such grant. Such Alternative Performance Condition shall
operate as specified in this paragraph (i).
(1) As used in this paragraph (i), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the
Performance Period, determined in accordance with generally accepted
accounting principles. For purposes of the foregoing sentence,
earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles
and after full accrual for the bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Actual EPS by
Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to an Alternative Performance Condition.
PERFORMANCE PERIOD means the period of service to which the
Alternative Performance Condition relates.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to an Alternative Performance Condition.
(2) A Restricted Stock Award shall be subject to an Alternative
Performance Condition only if the Administrator makes such a
determination on the Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to an Alternative
Performance Condition, the Administrator shall establish the Performance
Period and Target EPS for such award no later than the time permitted by
section 162(m) of the Internal Revenue Code.
(4) After the public release by the Company of its unaudited results
for the last fiscal quarter of the Performance Period, the Chief
Financial Officer shall, with respect to each Restricted Stock Award made
subject to an Alternative Performance Condition, (a) calculate the Actual
EPS, (b) determine the Multiplier, (c) calculate the Final Restricted
Stock Award, and (d) deliver such calculation to the Administrator.
(5) The Administrator shall review the information submitted by the
Chief Financial Officer and certify, in writing, each Final Restricted
Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each
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Vesting Date the percentage of the Final Restricted Stock Award that
vests shall be the same as the percentage of the Original Restricted
Stock Award that would have vested had no shares been forfeited as a
result of the Alternative Performance Condition.
(7) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date by reason of death, Disability or a Change in Control,
then the Alternative Performance Condition shall be cancelled and none of
such shares shall be subject to reduction or forfeiture as provided by
the Alternative Performance Condition. Such shares shall be released to
Holder in accordance with the terms of this plan relating to vested
shares.
(8) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date for any reason other than death, Disability or a
Change in Control, no shares shall be released to the Holder until after
the Certification Date. No such vesting prior to the Certification Date
shall in any way be deemed a satisfaction, waiver or cancellation of the
Alternative Performance Condition, and such Restricted Stock Award shall
remain subject to reduction and forfeiture as provided by the Alternative
Performance Condition.
7. WITHHOLDING TAXES. In order to enable the Company to meet any
applicable foreign, federal (including FICA), state and local withholding tax
requirements, a Holder shall be required to pay the Minimum Withholding Taxes.
No share of stock will be delivered to any Holder until Minimum Withholding
Taxes have been paid. At the option of the Holder, withholding taxes may be paid
by reduction in the number of shares deliverable to Holder (in the case of an
Option) or by surrendering a portion of the Restricted Stock Award to the
Company (in either case "Share Reduction"). If withholding taxes are paid by
Share Reduction, such shares shall be valued at the Fair Market Value as of
the date of exercise or vesting. A Holder may elect to have additional shares
withheld above the amount required to satisfy Minimum Withholding Taxes.
However, total Share Reduction may not exceed the total taxes that Holder will
have to pay (assuming Federal and state taxes are imposed at his marginal rate)
by reason of the exercise or vesting. In the event that Minimum Withholding
Taxes are not paid by Holder, to the extent permitted by law the Company shall
have the right, but not the obligation, to cause such withholding taxes to be
satisfied by Share Reduction or by offsetting such withholding taxes against
amounts otherwise due from the Company to the Holder.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as any
restrictions or obligations imposed pursuant hereto shall apply to a share of
Stock (including, but not limited to, the restrictions or obligations imposed
pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each
certificate evidencing such share shall bear an appropriate legend referring to
the terms, conditions and restrictions. In addition, the Company may instruct
its transfer agent that shares of Stock evidenced by such certificates may not
be transferred without the written consent of the Company. Any attempt to
dispose of such shares of Stock in contravention of such terms, conditions and
restrictions shall be invalid. Certificates representing shares that have not
Vested or with respect to which Minimum Withholding Taxes have not been paid
will be held in custody by the Company or such bank or other institution
designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous
Employment with the Company or any Subsidiary shall terminate for any reason,
then, with respect to any portion of a Grant that has not Vested prior to or
concurrently with such termination (a) in the case of an Option, all rights to
such portion that has not Vested shall terminate and (b) in the case of a
Restricted Stock Award, all rights to the shares covered by any portion thereof
that has not Vested shall be forfeited; provided, however, that the
Administrator, in its sole discretion within ninety (90) days of such
termination of Continuous Employment, may notify the Holder in writing that the
Holder's rights in such portion that has not Vested will not terminate or be
forfeited and that the Holder shall continue to be the owner thereof, subject to
such continuing restrictions as the Administrator may prescribe in
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such notice. Options then held by the Holder which are Vested at the date of
termination shall continue to be exercisable by the Holder, or, if applicable,
Holder's estate, until the earlier of 90 days after such date or the expiration
of such Options in accordance with their terms. Notwithstanding the foregoing,
(i) the Administrator may in its sole discretion extend the period during which
an Option may be exercised following termination of employment at any time,
provided that any such extension does not exceed the Option's normal termination
date, and (ii) if exercise of an Option during the 90-day period described in
the previous sentence would subject the Holder to liability under Section 16 of
the Exchange Act, such Option shall be exercisable until the earliest of (a) its
normal termination date and (b) seven months after the last transaction in
Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the Administrator,
which shall have full power and authority to administer and interpret the Plan
and to adopt such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan as the Administrator deems necessary or
advisable. The Administrator's powers include, but are not limited to (subject
to the specific limitations described herein), authority to determine the
employees who shall receive Grants under the Plan, determine the size and
applicable terms and conditions of Grants to be made to such employees,
determine the time when Grants will be made and authorize Grants to Eligible
Employees.
The Administrator's interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Grants hereunder, shall be final, binding and
conclusive on all interested parties. The Administrator may delegate ministerial
functions hereunder, such delegation to be subject to such terms and conditions
as the Administrator in its discretion shall determine. The Administrator may as
to all questions of accounting rely conclusively upon any determinations made by
the independent public accountants of the Company.
11. COMPLIANCE WITH SECURITIES LAWS. No Option may be exercised and no
Stock may be issued pursuant to an Option or transferred pursuant to a
Restricted Stock Award unless the Administrator shall determine that such
exercise, issuance or transfer complies with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, applicable
state securities laws, and rules and regulations promulgated under each of the
foregoing, and the requirements of any stock exchange upon which the Stock may
then be listed or quotation system upon which the Stock may be quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance. If the Stock subject to this Plan is not registered under the
Securities Act and under applicable state securities laws, the Administrator may
require that the Holder deliver to the Company such documents as counsel for the
Company may determine are necessary or advisable in order to substantiate
compliance with applicable securities laws and the rules and regulations
promulgated thereunder.
12. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination, spin-off
or exchange of shares or other similar corporate change, appropriate adjustments
shall be made by the Administrator in the number of shares of Stock subject to
this Plan, the number of shares of Stock covered by each Grant and, in the case
of Options, the Option Price of such Option. Any such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be conclusive and binding for all purposes of the Plan. Any new or
additional Stock to which a Holder of a Restricted Stock Award may be entitled
shall be subject to all the terms and conditions set forth in Section 6 of this
Plan. If fractional shares become due to any Holder as a result of any
adjustment, the Company may, at its option, pay cash in lieu thereof.
13. NO RIGHTS TO GRANTS OR EMPLOYMENT. No employee or other person shall
have any claim or right to a Grant under the Plan. Receipt of a Grant under the
Plan shall not give an employee any
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rights to receive any other Grant under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any Subsidiary.
14. RIGHTS AS SHAREHOLDER. A Holder under the Plan shall have no rights as
a holder of Common Stock with respect to Options granted hereunder, unless and
until certificates for shares of Common Stock are issued to such Holder.
15. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any grant under the Plan.
16. NO ASSIGNMENT. Except as specifically provided by law (including the
laws of descent and distribution) and elsewhere herein, no right or benefit
under, or interest in, the Plan shall be subject to assignment, and no such
right, benefit or interest shall be subject to attachment or legal process for
or against Holder or his or her beneficiaries, as the case may be.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such persons.
19. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
20. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Grants
theretofore made hereunder. The Administrator may amend or cancel the terms and
conditions of any outstanding Grant, determine whether cash will be paid or
Grants will be made in replacement of, or as alternatives to, outstanding Grants
or grants under any other incentive compensation plan; provided, however, that
no such change shall be adverse to the Holder thereof without such Holder's
consent.
21. EFFECTIVE DATE, TERMINATION. This Plan shall become effective upon
approval by the stockholders of the Company, and shall remain in effect until
terminated by the Board of Directors or Administrator.
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EXHIBIT 10.16
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 the occurrence of any of the following:
(a) Any person or group (as such terms are defined in Section 13(d)(3)
of the Exchange Act), other than an employee benefit plan sponsored by the
Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation
of which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party
has acquired such securities not with the purpose nor with the effect of
changing or influencing the control of the Company, nor in connection with
or as a participant in any transaction having such purposes or effect,
including, without limitation, not in connection with such party (i) making
any public announcement with respect to the voting of such shares at any
meeting to consider a merger, consolidation, sale of substantial assets or
other business combination or extraordinary transaction involving the
Company, (ii) making, or in any way participating in, any "solicitation" of
"proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act) to vote any voting securities of the Company (including,
without limitation, any such solicitation subject to Rule 14a-11 under the
Exchange Act) or seeking to advise or influence any party with respect to
the voting of any voting securities of the Company, directly or indirectly,
relating to a merger or other business combination involving the Company or
the sale or transfer of substantial assets of the Company, (iii) forming,
joining or in any way participating in any "group" within the meaning of
Section 13(d)(3) of the Exchange Act with respect to any voting securities
of the Company, directly or indirectly, relating to a merger or other
business combination involving the Company or the sale or transfer of any
substantial assets of the Company, or (iv) otherwise acting, alone or in
concert with others, to seek control of the Company or to seek to control or
influence the management or policies of the Company.
(b) The stockholders of the Company shall approve any plan or proposal
for the liquidation or dissolution of the Company.
(c) A change in the composition of the Board of Directors of the Company
occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors"
shall mean directors who either (i) are directors of the Company as of the
date
1
<PAGE>
hereof, or (ii) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but
shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the
election of directors to the Company). 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.
(d) 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.
(e) 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.
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 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.
2
<PAGE>
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).
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.
3
<PAGE>
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.
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
4
<PAGE>
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.
5
<PAGE>
EXHIBIT 10.17
The Collateral Assignment of Split Dollar Insurance Agreement has been
entered into with the following executive officers:
Harold M. Messmer, Jr.
M. Keith Waddell
Robert W. Glass
Steven Karel
Barbara J. Forsberg
<PAGE>
COLLATERAL ASSIGNMENT SPLIT DOLLAR
INSURANCE AGREEMENT
THIS AGREEMENT made the 15th day of November, 1996, by and between Robert
Half International Inc. (hereinafter called "the Corporation") and
(hereinafter called the "Trust").
WHEREAS, ("the Employee") is a valued employee of the Corporation,
and the loss of Employee would impair the Corporation's operations;
WHEREAS, in order to retain the services of Employee, the Corporation is
willing to enter into a split dollar plan with the Trust so that it may carry
insurance on Employee's life;
WHEREAS, the Trust will be the owner of the policy of insurance on the
Employee's life acquired pursuant to the terms of this Agreement and the policy
will be assigned to the Corporation as security for the repayment of all or part
of the amounts which the Corporation will contribute toward payment of the
premiums due on the policy;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is agreed between the parties as follows:
1. APPLICATION FOR INSURANCE. The Trust will apply to ITT Hartford Life
and Annuity Insurance Company ("Hartford") for a policy on Employee's life in
the face amount of $ and the Trust and the Employee will do everything
reasonably necessary to cause the policy to be issued. When the policy is
issued, the policy number, face amount, and policy of insurance shall be
recorded on Schedule A attached hereto and the policy of insurance shall then be
subject to the terms of this Agreement.
2. OWNERSHIP OF INSURANCE. The Trust shall be the owner of the policy on
Employee's life acquired pursuant to the terms of this Agreement, and the Trust
may exercise all the rights of ownership with respect to the policy except as
otherwise hereinafter provided. Notwithstanding the terms of the policy, the
Trust hereby agrees that at least 25% of the policy's cash value shall at all
times be invested in one or more of the policy's bond funds.
3. PAYMENT OF PREMIUMS ON POLICY. The Trust will pay Hartford the portion
of the annual premium that is equal to the value of the "economic benefit" of
the life insurance protection that would otherwise be imputed income for federal
income tax purposes to the Employee for the year, i.e., the cost of such
protection determined using the lesser of the IRS' "P.S. 58 rates" (or such
successor rates) or Hartford's term insurance rates. The Corporation will pay
Hartford the balance of the annual premium. Each year the Corporation shall
provide a written statement to the Trust showing the Corporation's current
contribution to Hartford and its aggregate contributions.
4. COLLATERAL ASSIGNMENT OF POLICY. The Trust hereby collaterally assigns
the policy on Employee's life, acquired pursuant to the terms of this Agreement,
to the Corporation as security for the obligations under Sections 6, 7 and 8
hereof. This collateral assignment will not be altered or changed without the
consent of the Corporation.
5. SURRENDER OR TERMINATION OF POLICY. Subject to Section 7, while this
Agreement is in force and effect, the Trust will neither sell, surrender nor
otherwise terminate the policy on Employee's life, acquired pursuant to the
terms of this Agreement, without the Corporation's consent.
6. DEATH CLAIMS.
(a) When the Employee dies, the Corporation shall be entitled to receive
from the policy an amount equal to the lesser of (i) the aggregate amount of
its contributions pursuant to Section 3 (without any interest) or, (ii) the
policy's death benefit. Upon receipt of such amount, the Corporation
releases the collateral assignment of the policy made by the Trust pursuant
to Section 4 of this Agreement.
1
<PAGE>
(b) When the Employee dies, the Trust shall be entitled to receive any
amount of the death benefits provided under the policy on the Employee's
life in excess of the amount payable to the Corporation under paragraph (a)
of this Section 6. This amount shall be paid under the policy settlement
option elected by the Trust.
7. TERMINATION OF AGREEMENT. This Agreement shall terminate on the
occurrence of any of the following events:
(a) cessation of the Corporation's business;
(b) written notice given by either party to the other;
(c) termination of the employment of the Employee;
(d) bankruptcy, receivership or dissolution of the Corporation;
(e) upon the election of the aggrieved party if either the Corporation
or the Trust fails for any reason to make the contribution required by
Section 3 of this Agreement toward payment of any premium due on the policy
on the Employee's life acquired pursuant to the terms of this Agreement,
provided that any election to terminate this Agreement under this clause
must be made within ninety days after the failure to make the required
contribution occurs;
(f) repayment by the Trust of the contributions made by the Corporation
under Section 3 of this Agreement (without interest) or, if less, the
policy's then cash value, provided that upon receipt of such repayment the
Corporation releases the collateral assignment of the policy made by the
Trust pursuant to Section 4 of this Agreement.
8. DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT. If this Agreement is
terminated under paragraph (a), (b), (c), (d) or (e) of Section 7 of this
Agreement, the Trust shall have thirty days in which to repay the Corporation
the lesser of (a) the amount which the Corporation has contributed toward
payment of the premiums due on the policy (without any interest) or, (b) the
policy's then cash value. The Corporation shall take all reasonable steps
necessary or desirable to assist the Trust in making the repayment including,
but not limited to, consenting to the Trust's borrowing from or encumbering the
policy. Upon receipt of this amount, the Corporation shall release the
collateral assignment of the policy; if the Trust does not repay such amount,
the Corporation may enforce any rights which it has under the collateral
assignment of the policy.
9. INVESTMENT REPRESENTATIONS. The Corporation makes no representations to
the Employee or Trust regarding the suitability of the Hartford insurance policy
as an investment, its income or estate tax consequences, the tax consequences of
this Agreement or the solvency of Hartford. The Corporation further makes no
representations that the policy will be sufficient to provide any benefits. The
Employee and the Trust are not relying on the Corporation in entering into this
Agreement and acknowledge that they have consulted their own tax and financial
advisors regarding any and all associated risk factors.
10. INDIVIDUAL LIABILITY. The only liability of the Trust hereunder is to
make the payments specified in Sections 6, 7 and 8 hereof and such liability is
limited to the amounts specified in such sections. In addition, such amounts
shall be satisfied solely from the policy. The Trust shall have no liability if
the policy is insufficient to satisfy such obligations. Neither the Employee,
any heirs, beneficiaries or assigns shall have any liability under this
Agreement.
11. INSURANCE COMPANY NOT A PARTY. The Hartford
(a) shall not be deemed to be a party to this Agreement for any purpose
nor in any way responsible for its validity;
(b) shall not be obligated to inquire as to the distribution of any
monies payable or paid by it under the policy on the Employee's life
acquired pursuant to the terms of this Agreement;
2
<PAGE>
(c) shall be fully discharged from any and all liability under the terms
of any policy issued by it, which is subject to the terms of this Agreement,
upon payment or other performance of its obligations in accordance with the
terms of such policy.
12. AMENDMENT OF AGREEMENT. This Agreement shall not be modified or
amended except by a writing signed by the Corporation and the Trust. This
Agreement shall be binding upon the heirs, administrators or executors and the
successors and assigns of each party to this Agreement.
In Witness Whereof, the parties hereto have executed this Agreement as of
the date above first written.
TRUST
By:
---------------------------------
ROBERT HALF INTERNATIONAL INC.
By:
---------------------------------
Corporate Seal
Attest:
- ----------------------------------------
Secretary
3
<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,
-------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Net income....................................................................... $61,102 $40,298 $26,117
------- ------- -------
------- ------- -------
Weighted average number of shares outstanding
Primary:
Common stock................................................................. 58,845 56,990 54,730
Common stock equivalents -- stock options (A)................................ 2,138 2,080 1,941
------- ------- -------
Primary shares outstanding................................................... 60,983 59,070 56,671
------- ------- -------
------- ------- -------
Fully Diluted:
Common stock................................................................. 58,845 56,990 54,730
Common stock equivalents -- stock options (A)................................ 2,333 2,427 2,239
------- ------- -------
Fully diluted shares outstanding............................................. 61,178 59,417 56,969
------- ------- -------
------- ------- -------
Net income per share:
Primary........................................................................ $ 1.00 $ .68 $ .46
Fully diluted.................................................................. $ 1.00 $ .68 $ .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
Benchmark Staffing, Inc. California
Benchmark Resources, Inc. California
Sylar, Inc. California
Temporary Specialties, 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
Robert Half of Atlanta, Inc. Georgia
OfficeTeam Inc. Louisiana
Robert Half Corporation Nevada
Robert Half Nevada Staff, Inc. Nevada
R-H Franchises Western Hemisphere, Inc. New York
Tripoli Associates Corporation New York
Robert Half of Philadelphia, Inc. Pennsylvania
Robert Half of Pittsburgh, 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 24, 1997 into the Company's Registration
Statements on Form S-8 (nos. 33-14706, 33-32622, 33-32623, 33-39187, 33-39204,
33-40795, 33-52617, 33,56639, 33-56641, 33-57763, 33-62138, 33-62140, 33-65401,
33-65403, 333-05743, 333-05745, 333-18283 and 333-18339).
ARTHUR ANDERSEN LLP
San Francisco, California
March 20, 1997
<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, 1996 AND IS
QUALIFIED IN THIS ENIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1996 DEC-31-1995
<CASH> 80,181 41,346
<SECURITIES> 0 0
<RECEIVABLES> 129,399 88,022
<ALLOWANCES> 4,016 3,067
<INVENTORY> 0 0
<CURRENT-ASSETS> 217,748 133,650
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 416,012 301,140
<CURRENT-LIABILITIES> 86,561 55,880
<BONDS> 5,069 1,486
0 0
0 0
<COMMON> 60 58
<OTHER-SE> 308,385 301,082
<TOTAL-LIABILITY-AND-EQUITY> 416,012 301,140
<SALES> 0 0
<TOTAL-REVENUES> 898,635 828,526
<CGS> 0 0
<TOTAL-COSTS> 545,343 384,449
<OTHER-EXPENSES> 5,405 4,767
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (2,243) (463)
<INCOME-PRETAX> 103,645 69,089
<INCOME-TAX> 42,543 28,791
<INCOME-CONTINUING> 61,102 40,296
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 61,102 40,298
<EPS-PRIMARY> 1.00 .68
<EPS-DILUTED> 1.00 .68
</TABLE>
