<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
.
------------------------
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
2884 SAND HILL ROAD
SUITE 200
MENLO PARK, CALIFORNIA
(Address of principal executive 94025
offices) (zip-code)
Registrant's telephone number, including area code: (650) 234-6000
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) had been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 1997:
90,957,694 shares of $.001 par value Common Stock
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<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS:
Cash and cash equivalents........................................................... $ 130,795 $ 80,181
Accounts receivable, less allowances of $6,425 and $4,016........................... 173,030 125,383
Other current assets................................................................ 17,658 12,184
------------- ------------
Total current assets............................................................ 321,483 217,748
Intangible assets, less accumulated amortization of $44,364 and $39,461............. 173,420 174,663
Other assets........................................................................ 42,246 23,601
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Total assets.................................................................... $ 537,149 $ 416,012
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------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses............................................... $ 21,262 $ 15,049
Accrued payroll costs............................................................... 90,665 66,087
Income taxes payable................................................................ 7,842 3,883
Current portion of notes payable and other indebtedness............................. 3,594 1,542
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Total current liabilities....................................................... 123,363 86,561
Notes payable and other indebtedness, less current portion.......................... 4,829 5,069
Deferred income taxes............................................................... 15,994 15,937
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Total liabilities............................................................... 144,186 107,567
Stockholders' Equity:
Common stock, $.001 par value authorized 160,000,000 shares; issued and outstanding
90,969,384 and 89,622,256 shares.................................................. 91 90
Capital surplus..................................................................... 178,757 140,443
Deferred compensation............................................................... (35,332) (26,802)
Accumulated translation adjustments................................................. (1,079) 23
Retained earnings................................................................... 250,526 194,691
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Total stockholders' equity...................................................... 392,963 308,445
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Total liabilities and stockholders' equity...................................... $ 537,149 $ 416,012
------------- ------------
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</TABLE>
All shares and amounts have been restated to retroactively reflect the
three-for-two stock split effected in the form of a stock dividend in September
1997.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
1
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues............................................. $ 339,754 $ 232,950 $ 934,399 $ 639,838
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees.................... 204,554 141,162 563,165 387,487
---------- ---------- ---------- ----------
Gross margin..................................................... 135,200 91,788 371,234 252,351
Selling, general and administrative expenses..................... 93,411 63,983 257,281 176,133
Amortization of intangible assets................................ 1,233 1,356 3,693 4,025
Interest income.................................................. (1,154) (609) (2,840) (1,577)
---------- ---------- ---------- ----------
Income before income taxes....................................... 41,710 27,058 113,100 73,770
Provision for income taxes....................................... 17,079 11,112 46,339 30,361
---------- ---------- ---------- ----------
Net income....................................................... $ 24,631 $ 15,946 $ 66,761 $ 43,409
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per share............................................. $ .26 $ .17 $ .71 $ .47
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
All per share amounts have been restated to retroactively reflect
the three-for-two stock split effected in the form of a stock dividend in
September 1997.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
2
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 89,622 86,677
Issuance of restricted stock............................................................ 483 955
Repurchases of common stock............................................................. (413) (263)
Exercises of stock options.............................................................. 1,263 1,492
Issuance of common stock for acquisitions............................................... 14 544
---------- ----------
Balance at end of period.............................................................. 90,969 89,405
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 90 $ 87
Issuance of restricted stock............................................................ -- 1
Exercises of stock options.............................................................. 1 1
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Balance at end of period.............................................................. $ 91 $ 89
---------- ----------
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CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 140,443 $ 99,739
Issuance of restricted stock--excess over par value..................................... 17,251 24,335
Exercises of stock options--excess over par value....................................... 4,885 3,577
Issuance of common stock for acquisition................................................ 400 --
Tax benefits from exercises of stock options and restricted stock vesting............... 15,778 10,692
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Balance at end of period.............................................................. $ 178,757 $ 138,343
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (26,802) $ (9,642)
Issuance of restricted stock............................................................ (17,251) (24,336)
Amortization of deferred compensation................................................... 8,721 4,706
---------- ----------
Balance at end of period.............................................................. $ (35,332) $ (29,272)
---------- ----------
---------- ----------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period.......................................................... $ 23 $ 51
Translation adjustments................................................................. (1,102) (264)
---------- ----------
Balance at end of period.............................................................. $ (1,079) $ (213)
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 194,691 $ 137,695
Issuance of common stock for acquisition................................................ -- 1,285
Repurchases of common stock--excess over par value...................................... (10,926) (4,522)
Net income.............................................................................. 66,761 43,409
---------- ----------
Balance at end of period.............................................................. $ 250,526 $ 177,867
---------- ----------
---------- ----------
</TABLE>
All shares and amounts have been restated to retroactively reflect the
three-for-two stock split effected in the form of a stock dividend in September
1997.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
3
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................................ $ 66,761 $ 43,409
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets....................................................... 3,693 4,025
Depreciation expense.................................................................... 8,995 4,396
Deferred income taxes................................................................... (4,946) (1,128)
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable....................................................... (47,158) (25,530)
Increase in accounts payable, accrued expenses and accrued payroll costs.............. 29,900 20,934
Increase (decrease) in income taxes payable........................................... 3,959 (6,136)
Change in other assets, net of change in other liabilities............................ 9,014 (2,081)
---------- ----------
Total adjustments..................................................................... 3,457 (5,520)
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Net cash and cash equivalents provided by operating activities............................ 70,218 37,889
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired...................................................... (3,338) (1,038)
Capital expenditures.................................................................... (24,550) (13,302)
---------- ----------
Net cash and cash equivalents used in investing activities................................ (27,888) (14,340)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock or common stock equivalents................................. (10,926) (4,522)
Principal payments on notes payable and other indebtedness.............................. (1,454) (3,632)
Proceeds and tax benefits from exercise of stock options and restricted stock vesting... 20,664 14,270
---------- ----------
Net cash and cash equivalents provided by financing activities............................ 8,284 6,116
---------- ----------
Net increase in cash and cash equivalents................................................. 50,614 29,665
Cash and cash equivalents at beginning of period.......................................... 80,181 41,346
---------- ----------
Cash and cash equivalents at end of period................................................ $ 130,795 $ 71,011
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 348 $ 434
Income taxes............................................................................ $ 29,805 $ 25,923
Acquisitions:
Fair value of assets acquired--
Intangible assets..................................................................... $ 4,079 $ 4,155
Other................................................................................. 499 1,713
Liabilities incurred--
Notes payable and contracts........................................................... (536) (2,625)
Other................................................................................. (304) (920)
Common stock issued..................................................................... (400) (1,285)
---------- ----------
Cash paid, net of cash acquired......................................................... $ 3,338 $ 1,038
---------- ----------
---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
4
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS. Robert Half International Inc. (the "Company")
provides specialized staffing services through such divisions as
ACCOUNTEMPS-REGISTERED TRADEMARK-, ROBERT HALF-REGISTERED TRADEMARK-,
OFFICETEAM-REGISTERED TRADEMARK-, RHI CONSULTING-REGISTERED TRADEMARK- and RHI
MANAGEMENT RESOURCES-REGISTERED TRADEMARK-. The Company, through its
Accountemps, Robert Half, and RHI Management Resources 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. RHI Consulting provides contract information
technology professionals. RHI Management Resources places senior-level
accounting and financial professionals on longer term, more complex projects
lasting for several months to a year or longer. 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 1996 financial statements to conform to
the 1997 presentation.
INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in management's opinion, include all
adjustments necessary for a fair statement of results for such interim periods.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules or regulations; however,
the Company believes that the disclosures made are adequate to make the
information presented not misleading.
The interim results for the three and nine months ended September 30, 1997,
and 1996 are not necessarily indicative of results for the full year. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
REVENUE RECOGNITION. Temporary service revenues are recognized when the
services are rendered by the Company's temporary employees. Permanent placement
revenues are recognized when employment candidates accept offers of permanent
employment. Reserves are established to estimate losses due to placed candidates
not remaining in employment for the Company's guarantee period, typically 90
days.
CASH AND CASH EQUIVALENTS. For purposes of the Consolidated Statements of
Cash Flows, the Company classifies all highly-liquid investments with a maturity
of three months or less as cash equivalents.
INTANGIBLE ASSETS. Intangible assets represent the cost of acquired
companies in excess of the fair market value of their net tangible assets at the
acquisition date, and are being amortized on a straight-line basis over a period
of 40 years. The carrying value of intangible assets is periodically reviewed by
the Company and impairments are recognized when the expected future operating
cash flows derived from such intangible assets are less than their carrying
value. Based upon its most recent analysis, the Company believes that no
material impairment of intangible assets existed at September 30, 1997.
INCOME TAXES. Deferred taxes are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rate.
5
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1997
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION. Foreign income statement items are translated
at the monthly average exchange rates prevailing during the period. Foreign
balance sheets are translated at the current exchange rates at the end of the
period, and the related translation adjustments are recorded as part of
Stockholders' Equity. Gains and losses resulting from foreign currency
transactions are included in the Consolidated Statements of Income.
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--NEW ACCOUNTING PRONOUNCEMENTS
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting No. 128 (SFAS No. 128), Earnings Per Share. SFAS No. 128
requires the disclosure of basic net income per share and modifies existing
guidance for computing fully diluted net income per share. Under the new
standard, basic net income per share is computed as net income divided by
weighted average shares, excluding the dilutive effects of stock options and
other potentially dilutive securities. The effective date of SFAS No. 128 is
December 15, 1997 and early adoption is not permitted. The Company intends to
adopt SFAS No. 128 during the quarter and year ended December 31, 1997. The
Company does not expect this pronouncement to have a material impact on net
income per share.
NOTE C--STOCK SPLIT
In September 1997, the Company effected a three-for-two stock split in the
form of a stock dividend. All share and per share amounts in the financial
statements have been restated to retroactively reflect the three-for-two stock
split.
NOTE D--SUBSEQUENT EVENT
In October 1997, the Company authorized the repurchase, from time to time,
of up to four million shares of the Company's common stock on the open market or
in privately negotiated transactions, depending on market conditions.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996
Temporary services revenues were $313 million and $215 million for the three
months ended September 30, 1997 and 1996, respectively, increasing by 46% during
the three months ended September 30, 1997 compared to the same period in 1996.
Temporary services revenues were $861 million and $589 million for the nine
months ended September 30, 1997 and 1996, respectively, increasing by 46% during
the nine months ended September 30, 1997 compared to the same period in 1996.
Permanent placement revenues were $27 million and $18 million for the three
months ended September 30, 1997 and 1996, respectively, increasing by 50% during
the three months ended September 30, 1997 compared to the same period in 1996.
Permanent placement revenues were $73 million and $51 million for the nine
months ended September 30, 1997 and 1996, respectively, increasing by 43% during
the nine months ended September 30, 1997 compared to the same period in 1996.
Overall revenue increases reflect continued improvement in demand for the
Company's services, which the Company believes is a result of increased
acceptance in the use of professional staffing services. Revenues from companies
acquired during the nine months ended September 30, 1997 were not material.
The Company currently has more than 200 offices in 39 states and five
foreign countries. Domestic operations represented 90% of revenues for both the
three and nine months ended September 30, 1997 and 91% of revenues for both the
three and nine months ended September 30, 1996. Foreign operations represented
10% of revenues for both the three and nine months ended September 30, 1997 and
9% of revenues for both the three and nine months ended September 30, 1996.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consist 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 $108 million and $298 million for the three and nine months ended
September 30, 1997, respectively, compared to $74 million and $201 million for
the comparable periods in 1996, increasing by 46% and 48% for the three and nine
months ended September 30, 1997, respectively. Gross margin amounts equaled 35%
of revenues for temporary services for both the three and nine months ended
September 30, 1997, compared to 34% of temporary service revenues for both the
three and nine months ended September 30, 1996, 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 $27 million and $73 million for the three and nine months ended September
30, 1997, respectively, compared to $18 million and $51 million for the
comparable periods in 1996, increasing by 50% and 43% for the three and nine
months ended September 30, 1997, respectively.
Selling, general and administrative expenses were $93 million and $257
million for the three and nine months ended September 30, 1997, respectively,
compared to $64 million and $176 million during the three and nine months ended
September 30, 1996, respectively. Selling, general and administrative expenses
as a percentage of revenues were 27% and 28% for the three and nine months ended
September 30, 1997, respectively, compared to 27% and 28% for the three and nine
months ended September 30, 1996, respectively. Selling, general and
administrative expenses consist primarily of staff compensation, advertising,
and occupancy costs, most of which generally follow changes in revenues.
7
<PAGE>
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 September 30, 1997.
Intangible assets represented 32% of total assets and 44% of total stockholders'
equity at September 30, 1997.
Interest income for the three months ended September 30, 1997 and 1996 was
$1,443,000 and $783,000, respectively, while interest expense for the three
months ended September 30, 1997 and 1996 was $289,000 and $174,000,
respectively. Interest income for the nine months ended September 30, 1997 and
1996 was $3,540,000 and $2,006,000, respectively, while interest expense for the
nine months ended September 30, 1997 and 1996 was $700,000 and $429,000,
respectively. These changes primarily reflect an increase in cash and cash
equivalents.
The provision for income taxes was 41% for all periods presented.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during nine months ended September 30,
1997 is the net effect of funds generated by operations and the funds used for
the staffing services acquisitions, capital expenditures and principal payments
on outstanding notes payable. For the nine months ended September 30, 1997, the
Company generated $70.2 million from operations, used $27.9 million in investing
activities and provided $8.3 million by financing activities.
The Company's working capital at September 30, 1997 included $130.8 million
in cash and cash equivalents. In addition at September 30, 1997, the Company had
available $71.4 million of its $80 million bank revolving line of credit. The
Company's working capital requirements consist primarily of the financing of
accounts receivable. While there can be no assurances in this regard, the
Company expects that internally generated cash plus the bank revolving line of
credit will be sufficient to support the working capital needs of the Company,
the Company's fixed payments, and other obligations on both a short and long
term basis. As of September 30, 1997, the Company had no material capital
commitments.
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share. SFAS No. 128
requires the disclosure of basic net income per share and modifies existing
guidance for computing fully diluted net income per share. Under the new
standard, basic net income per share is computed as net income divided by
weighted average shares, excluding the dilutive effects of stock options and
other potentially dilutive securities. The effective date of SFAS No. 128 is
December 15, 1997 and early adoption is not permitted. The Company intends to
adopt SFAS No. 128 during the quarter and year ended December 31, 1997 and does
not expect this pronouncement to have a material impact on net income per share.
In September 1997, the Company effected a three-for-two stock split in the
form of a stock dividend. All share and per share amounts in the financial
statements have been restated to retroactively reflect the three-for-two stock
split.
8
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ------------- -------------------------------------------------------------------------------------------
<C> <S>
10.1 1985 Stock Option Plan.
10.2 StockPlus Plan.
10.3 Outside Directors' Option Plan.
10.4 1989 Restricted Stock Plan.
11 Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
(b) The registrant filed no current report on Form 8-K during the
quarter covered by this report.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
By /s/ M. KEITH WADDELL
------------------------------------
M. Keith Waddell,
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL
OFFICER AND TREASURER
(PRINCIPAL FINANCIAL OFFICER
AND DULY AUTHORIZED SIGNATORY)
Date: November 10, 1997
10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ------------- ---------
<C> <S> <C>
10.1 1985 Stock Option Plan........................................................................
10.2 StockPlus Plan................................................................................
10.3 Outside Directors' Option Plan................................................................
10.4 1989 Restricted Stock Plan....................................................................
11 Computation of Per Share Earnings.............................................................
27 Financial Data Schedule.......................................................................
</TABLE>
<PAGE>
1985 STOCK OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(As Amended and Restated Effective September 26, 1997)
1. PURPOSE OF THE PLAN
The purpose of the 1985 Stock Option Plan (the "Plan") of Robert
Half International Inc. (the "Company") are to:
(a) Furnish incentive to individuals chosen to receive options
because they are considered capable of responding by improving operations and
increasing profits;
(b) Encourage selected employees to accept or continue employment
with the Company or its Affiliates; and
(c) Increase the interest of selected employees in the Company's
welfare through their participation in the growth in value of the common
stock, $0.001 par value, of the Company ("Common Stock").
To accomplish the foregoing objectives, this Plan provides a means
whereby employees may receive options to purchase Commons Stock, stock
appreciation rights described in Section 8 ("SARs"), and limited stock
appreciation rights as described in Section 9 ("Limited Rights"). Options
granted under this Plan ("Options") will be either nonqualified options
("NQOs") subject to federal income taxation upon exercise or incentive stock
options ("ISOs") not subject to immediate federal income taxation upon
exercise.
2. ELIGIBLE PERSONS
Every person who at the date of grant is an employee of the Company
or of any Affiliate of the Company is eligible to receive NQOs, ISOs, SARs,
or Limited Rights under this Plan; provided, however, that an ISO may not be
granted under this Plan to any person who owns, directly or indirectly, stock
of the
<PAGE>
Company constituting more than ten percent of the total combined voting power
of the Company's outstanding stock, or the stock of any Affiliate of the
Company, unless the exercise price of the ISO at the time the option is
granted is at least 110 percent of the fair market value of the stock subject
to the option, and the option is exercisable for no more than five years
after the date of the grant, as set forth in Section 6.2. The term
"Affiliate," as used in this Plan, means a parent or subsidiary corporation,
as defined in the applicable provisions (currently Section 425) of the
Internal Revenue Code of 1986, as amended (the "Code"). The term "employee"
shall have the meaning ascribed for purposes of Section 3401(c) of the Code
and the Treasury Regulations promulgated thereunder and shall include an
officer or a director who is also an employee.
3. STOCK SUBJECT TO THIS PLAN
The total number of shares of stock that may be (i) issued upon the
exercise of Options and (ii) covered by options cancelled or surrendered upon
the exercise of SARs or Limited Rights, is 12,600,000 shares of Common Stock.
The shares covered by the portion of any grant that expires unexercised under
this Plan shall become available again for grants under this Plan. All shares
issued under this Plan or covered by options surrendered upon the exercise of
SARs or Limited Rights, however, shall be counted against the 8,400,000 share
limitation. The number of shares reserved for purchase under this Plan or
covered by options that may be cancelled or surrendered upon the exercise of
SARs or Limited Rights is subject to adjustment in accordance with the
provisions for adjustment in this Plan.
4. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the
Company (the "Board") or by a committee appointed by the Board which shall
not have less than two Board members (in either case, the "Administrator").
No Option, SAR, or Limited Right shall be granted to a director of the
Company except (i) by the Board when a majority of the members of the Board,
and a majority of the directors acting in the matter, are disinterested
persons, or (ii) by the Administrator when the Administrator is composed of
three or more persons having full authority to act in the matter and each
member of the Administrator is a disinterested person. No Option, SAR, or
Limited Rights shall be granted to an officer of the Company
<PAGE>
except (i) by the Board, or (ii) by the Administrator when the Administrator
is composed solely of three or more directors, or is composed of three or
more persons having full authority to act in the matter and each member of
the Administrator is a disinterested person. "Disinterested person," for
this purpose, shall have the same meaning as in Rule 16b-3 or any successor
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Administrator may delegate nondiscretionary
administrative duties to such employees of the Company as it deems proper.
Subject to the provisions of this Plan, the Administrator shall have the
authority to select the persons to receive Options, SARs, or Limited Rights
under this Plan, to fix the number of shares that each optionee may purchase
or that are subject to a SAR or Limited Right, to set the terms and
conditions of each Option (including whether each Option should be a NQO or
an ISO), SAR, and Limited Right, and to determine all other matters relating
to this Plan. No member of the Administrator shall be liable for any act or
omission on such member's own part, including but not limited to the exercise
of any power or discretion given to such member under this Plan, except for
those acts or omissions resulting from such member's own gross negligence or
willful misconduct. All questions of interpretation, implementation, and
application of this Plan shall be determined by the Administrator. Such
determinations shall be final and binding on all persons.
5. GRANTING OF RIGHTS
5.1 TEN YEAR LIMITATION. No Options, SARs, or Limited Rights
shall be granted under this Plan after ten years from the date of adoption of
this Plan by the Board of Directors.
5.2 WRITTEN AGREEMENT; EFFECT. Each Option, SAR, or Limited Right
shall be evidenced by a written agreement, in form satisfactory to the
Company, executed by the Company and the person to whom such Option, SAR, or
Limited Right is granted. If the agreement relates to an ISO or NQO, the
agreement shall specify whether each option it evidences is a NQO or an ISO.
SARs or Limited Rights may be included in the stock option agreement or may
be evidenced by a separate written agreement satisfactory to the Company,
executed by the Company and the person to whom such SAR or Limited Right is
granted. Failure of the grantee to execute an agreement shall not void or
invalidate the grant of an Option, SAR, or Limited Right; the Option, SAR or
Limited Right maybe not be exercised, however, until the
<PAGE>
agreement is executed.
5.3 ANNUAL $100,000 LIMITATION. In no event shall an ISO be
granted prior to January 1, 1987 pursuant to the Plan which would cause the
grantee to be in receipt during any calendar year of ISOs covering Common
Stock of the Company having an aggregate fair market value, determined for
each Option as of the grant date, in excess of $100,000 (plus any unused
limit carryover to such year as permitted by applicable provisions of the
Code, currently set forth in Section 422A(d)(4) of the Code). The rule set
forth in the preceding sentence shall not apply to ISOs granted on or after
January 1, 1987 pursuant to the Plan ("Post-86 ISO"); the aggregate fair
market value (determined at the time a Post-86 ISO is granted) of the stock
with respect to which all Post-86 ISOs become exercisable for the first time
by the optionee ("vest") during any calendar year (under all incentive stock
option plans of the Company and its affiliates) shall not exceed $100,000.
In applying the preceding sentence, Post-86 ISOs having the lowest exercise
price shall vest before Post-ISOs with higher exercise prices, regardless of
the grant date, unless the option agreements, or the Administrator,
specifically provide a different order of vesting.
5.4 ADVANCE APPROVALS. The Administrator may approve the grant of
Options, SARs, or Limited Rights under this Plan to persons who are expected
to become employees of the Company, but are not employees at the date of
approval. In such cases, the Option, SAR, or Limited Right shall be deemed
granted (and the exercise price determined with reference to the fair market
value of the underlying stock), without further approval, on the date the
grantee becomes an employee and must satisfy all requirements of this Plan
for Options, SARs or Limited Rights granted on that date.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be designated as an ISO or a NQO and shall be
subject to the terms and conditions set forth in Section 6.1. NQOs shall be
also subject to the terms and conditions set forth in Section 6.2, but not
those set forth in Section 6.3. ISOs shall also be subject to the terms and
conditions set forth in Section 6.3, but not those set forth in Section 6.2.
6.1 TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT. All
Options shall be subject to the following terms and
<PAGE>
conditions:
6.1.1 CHANGES IN CAPITAL STRUCTURE. Subject to Section
6.1.2, if the stock of the Company is changed by reason of a stock split,
reverse stock split, stock dividend, or recapitalization, or converted into
or exchanged for other securities as a result of a merger, consolidation or
reorganization, appropriate adjustments shall be made in (A) the number and
class of shares of stock subject to this Plan and each Option outstanding
under this Plan, and (B) the exercise price of each outstanding Option;
provided, however, that the Company shall not be required to issue fractional
shares as a result of any such adjustment. Each such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be final and binding on all persons.
6.1.2 CORPORATE TRANSACTIONS. New option rights may be
substituted for the Options granted under this Plan, or the Company's
obligations as to Options outstanding under this Plan may be assumed, by an
employer corporation other than the Company, or by a parent or subsidiary of
such employer corporation, in connection with any merger, consolidation,
acquisition, separation, reorganization, liquidation or like occurrence in
which the Company is involved, in such manner that the then outstanding
Options which are ISOs will continue to be "incentive stock options" within
the meaning of Section 422A of the Code to the full extent permitted thereby.
Notwithstanding the foregoing or the provisions of Section 6.1.1, if such
employer corporation, or parent or subsidiary of such employer corporation,
does not substitute new option rights for, and substantially equivalent to,
the Options granted hereunder, or assume the Options granted hereunder, or if
the Board determines, in its sole discretion, that Options outstanding under
this Plan should not then continue to be outstanding, the Options granted
hereunder shall terminate (A) upon dissolution or liquidation of the Company,
or similar occurrence, or (B) upon any merger, consolidation, acquisition,
separation, or similar occurrence, where the Company will not in economic
substance be the surviving corporation; provided, however, that each optionee
shall be mailed notice at least 15 days prior to such dissolution,
liquidation, merger, consolidation, acquisition, separation, or similar
occurrence, and shall have at least 10 days after the mailing of such notice
to exercise any unexpired option rights granted hereunder to the extent such
Options are then exercisable.
<PAGE>
6.1.3 TIME OF OPTION EXERCISE. Subject to Section 6.3.3,
Options shall be immediately exercisable, and shall be exercisable in whole
or in part.
6.1.4 OPTION GRANT DATE. Except in the case of advance
approvals described in Section 5.4, the date of grant of an Option under this
Plan shall be the date as of which the Administrator approves the grant.
6.1.5 NONASSIGNABILITY OF OPTION RIGHTS. No Option shall
be assignable or otherwise transferable by the optionee except by will or by
the laws of descent and distribution. During the life of the optionee, an
Option shall be exercisable only by the optionee or the optionee's guardian
or legal representative in the event of disability of the optionee.
6.1.6 PAYMENT. Except as provided below, payment in full,
in cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment
shall constitute general funds of the Company. At the time an Option is
granted or exercised the Administrator, in the exercise of its absolute
discretion, may authorize any one or more of the following additional methods
of payment:
(A) Acceptance of the optionee's full recourse promissory
note for the aggregate exercise price of the shares as to which the Option is
being exercised, payable on such terms and bearing such interest rate as
determined by the Administrator, which promissory note may be either secured
or unsecured in such manner as the Administrator shall approve (including,
without limitation, by a security interest in the shares of the Company);
(B) Delivery by the optionee of Common Stock already owned by
the optionee for all or part of the aggregate exercise price of the shares as
to which the Option is being exercised, provided the value (determined as set
forth in Section 6.3.1) of such Common Stock is equal on the date of exercise
to the aggregate exercise price of the shares as to which the Option is being
exercised, or such portion thereof as the optionee is authorized to pay by
delivery of such stock; provided, however, that if an optionee has exercised
any portion of any Option granted by the Company by delivery of Common Stock,
the optionee may not, within six months following such exercise, exercise any
Option granted under this Plan by delivery of Common Stock; and
<PAGE>
(C) Any other property other than cash, so long as such
property constitutes valid consideration under applicable law for the shares
as to which the Option is being exercised and is surrendered in good form for
transfer.
6.1.7 TERMINATION OF EMPLOYMENT. Option rights granted to
an optionee under this Plan, to the extent such rights have not then expired
or been exercised, shall terminate (i) three months, in the case of an
optionee who immediately prior to Employment Termination is not an officer or
director of the Company and with respect to an ISO granted to any optionee,
and (ii) seven months, in the case of an optionee who immediately prior to
Employment Termination is an officer or director of the Company with respect
to any NQO granted to any such optionee, after the optionee ceases, for any
reason and with or without cause, to be an employee of the Company or any
Affiliate of the Company (in either case, "Employment Termination"), and
shall not be exercisable on or after said date, except that if the Employment
Termination is due to the disability or death of the optionee, the optionee,
or the optionee's personal representative or any other person who acquires
the option rights from the optionee by will or the applicable laws of descent
and distribution, may within twelve months after the Employment Termination,
exercise the rights to the extent they were exercisable on the date of the
Employment Termination. A transfer of an optionee from the Company to BF
Enterprises, Inc. ("BFE") shall not be deemed an Employment Termination, but
rather an Employment Termination with respect to such optionee shall be
deemed for all purposes under this Plan to occur upon termination, for any
reason and with or without cause, of such optionee's employment with BFE or
any Affiliate of BFE; and the options held by such optionee shall expire in
accordance with this Section three months after such Employment Termination,
unless at the time thereof such Optionee is an officer or director of the
Company, in which case such options shall expire seven months after such
Employment Termination; and provided, further that an Employment Termination
shall not be deemed to occur with respect to such optionee if, in the
determination of the Board of Directors, it shall be in the best interests of
the Company to have such optionee's employment be deemed to continue for so
long as such optionee remains an officer, director or consultant of BFE.
6.1.8 REPURCHASE OF STOCK. At the option of the
Administrator, the stock to be delivered pursuant to the
<PAGE>
exercise of any Option may be subject to a right of repurchase in favor of
the Company with respect to any employee whose employment with the Company is
terminated. Such right of repurchase shall be at the Option exercise price
and shall expire at such times as may be set by the Administrator in the
exercise of the Administrator's discretion, which times may include a Change
in Control as defined in Section 8.1. Unless otherwise established by the
Administrator with respect to any individual or group, the right of
repurchase shall expire with respect to 20% of the shares subject to the
Option on the grant date (which date shall constitute the "Vesting Base Date"
unless the Administrator otherwise determines) and with respect to an
additional 20% of such shares on each of the four anniversary dates next
following the grant date. The Company may, at any time before or following
acquisition of shares by such employee pursuant to the Plan, waive in whole
or in part the Company's right of repurchase as set forth in the stock
purchase agreement executed by an employee with respect to shares acquired by
such employee.
6.1.9 WITHHOLDING AND EMPLOYMENT TAXES. At the time of
exercise of an Option (or, as the case may be, a SAR or a Limited Right), the
optionee shall remit to the Company in cash all applicable federal, state and
local withholding and employment taxes.
(a) The Administrator may, in the exercise of the
Administrator's sole discretion, permit an optionee to pay some or all of
such taxes by means of a promissory note on such terms as the Administrator
deems appropriate.
(b) If and to the extent authorized by the Administrator in
its sole discretion, an optionee may make an election, by means of a form of
election to be prescribed by the Administrator, to have shares of Common
Stock which are acquired upon exercise of the Option withheld by the Company
or to tender other shares of Common Stock or other securities of the Company
owned by the optionee to the Company at the time the amount of such taxes is
determined to pay the amount of such tax obligations.
6.1.10 OTHER PROVISIONS. Each Option may contain such
other terms, provisions, and conditions not inconsistent with this Plan as
may be determined by the Administrator, and each ISO granted under this Plan
shall include
<PAGE>
such provisions and conditions as are necessary to qualify the option as an
"incentive stock option" within the meaning of Section 422A of the Code.
6.2 TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT. Options
are granted under this Plan which are designated as NQOs shall be subject to
the following terms and conditions:
6.2.1 EXERCISE PRICE. The exercise price of a NQO shall
be determined by the Administrator, but shall not be less than 85% of the
Fair Market Value per share on the day of the grant.
6.2.2 OPTION TERM. Each NQO granted under this Plan shall
expire ten years and two days from the date of its grant or such earlier date
as may be set by the Administrator on the date of its grant.
6.2.3 WITHHOLDING AND EMPLOYMENT TAXES. At the time of
exercise of an NQO, the optionee shall remit to the Company in cash all
applicable federal and state withholding and employment taxes. The
Administrator may, in the exercise of the Administrator's discretion, permit
an optionee to pay some or all of such taxes by means of a promissory note on
such terms as the Administrator deems appropriate.
6.3 TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 EXERCISE PRICE. The exercise price of an ISO, which
shall be approved by the Board of Directors, shall be determined in
accordance with the applicable provisions of the Code and shall in no event
be less than the fair market value (determined as described in this Section
6.3.1) of the stock covered by the ISO at the time the ISO is granted, except
that the exercise price of an ISO granted to any person who owns, directly or
indirectly, (or is treated as owning by reason of attribution rules,
currently set forth in Code Section 425) stock of the Company constituting
more than ten percent of the total combined voting power of the Company's
outstanding stock, or the stock of any Affiliate of the Company, shall in no
event be less than 110 percent of such fair market value.
<PAGE>
For purposes of the Plan, the fair market value of Common
Stock shall be determined as follows:
(a) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), its fair market value shall be the
closing sales price or the mean between the high bid and low asked prices if
no sales were reported, as quoted on such system or exchange (or the largest
such exchange) for the date the value is to be determined (or if there are no
sales or bid and asked price quotations for such date, then for the last
preceding business day on which there were sales or bid and asked price
quotations), as reported in THE WALL STREET JOURNAL or similar publication.
(b) If the Common Stock is regularly quoted by a recognized
securities dealer, its fair market value shall be (i) the mean between the
closing high bid and low asked quotations for the stock on the date the value
is to be determined (or if there are no quoted prices for such date, then for
the last preceding business day on which there were quoted prices) as quoted
on NASDAQ or any similar system of automated dissemination of quotations of
securities prices then in common use, as reported in THE WALL STREET JOURNAL
or similar publication, or (ii) if not quoted as described in clause (i), the
mean between the high bid and low asked quotations for the stock as reported
by the National Quotation Bureau Incorporated if at least two securities
dealers have inserted both bid and asked quotations for the security on at
least five trading days of the 20 trading days preceding the date the value
is to be determined; provided, however, that if the stock is quoted on a
national securities or central market system, in lieu of a market or
quotation system described above, the fair market value shall be determined
in the manner set forth in clause (i) if bid and asked quotations are
reported but actual transactions are not, and in the manner set forth in
paragraph (a) if actual transactions are reported.
(c) In the absence of an established market for the Common
Stock, the fair market value thereof shall be determined in good faith by the
Administrator, with reference to the Company's net worth, prospective earning
power, dividend-paying capacity, and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company's industry, the
Company's position in the industry and its
<PAGE>
management, and the values of stock of other corporations in the same or
similar line of business.
6.3.2 EXPIRATION. Unless an earlier expiration date is
specified by the Administrator at the time of grant, each ISO granted under
this Plan shall expire ten years from the date of its grant, except that an
ISO granted to any person who owns, directly or indirectly, (or is treated
as owning by reason of applicable attribution rules, currently set forth in
Code Section 425) stock of the Company constituting more than ten percent of
the total combined voting power of the Company's outstanding stock, or the
stock of any Affiliate of the Company, shall expire five years from the date
of its grant.
6.3.3 EXERCISE OF AN INCENTIVE STOCK OPTION BY AN OPTIONEE
WHO HOLDS ANOTHER INCENTIVE STOCK OPTION. An ISO granted prior to January 1,
1987 under the Plan shall not be exercisable while the optionee holds a
previously granted incentive stock option to purchase stock in the Company, a
parent or subsidiary corporation of the Company, or a corporation which is a
predecessor of any of the foregoing, for such purposes, an ISO shall be
treated as outstanding until such option is exercised in full or expires by
reason of lapse of time, within the meaning of Section 422A(c)(7) of the
Code. Post-1986 ISOs shall not be subject to the limitation imposed by the
preceding sentence.
6.3.4 DISQUALIFYING DISPOSITIONS. If stock acquired by
exercise of an ISO granted pursuant to this Plan is disposed of within two
years from the date of grant to the ISO or within one year after the transfer
of the stock to the optionee, the holder of the stock immediately prior to
the disposition shall promptly notify the Company in writing of the date and
terms of the disposition and shall provide such other information regarding
the disposition as the Company may require. Such holder shall pay to the
Company any withholding and employment taxes which the Company in its sole
discretion deems applicable to such disposition. Any disposition not in
accordance with this Section 6.3.4 shall be void and of no effect. The
Company may instruct its stock transfer agent by appropriate means, including
placement of legends or stock certificates, not to transfer stock acquired by
exercise of an ISO unless it has been advised by the Company that the
requirements of this Section 6.3.4 have been satisfied.
6.3.5 WITHHOLDING AND EMPLOYMENT TAXES. At such time or
times as the Administrator determines, at or following the time of exercise
of an ISO, the optionee shall remit to the Company in cash all federal and
state withholding and employment taxes which the Administrator in its sole
discretion deems applicable to the exercise of an ISO or the disposition of
shares acquired by such exercise. The Administrator may, in the exercise of
the Administrator's sole discretion, permit an optionee to pay some or all of
such taxes by means of a promissory note on such terms as the Administrator
deems appropriate.
7. MANNER OF EXERCISE
An optionee wishing to exercise an Option shall give written notice
to the Company at its principal executive office, to the attention of the
Secretary of the Company, accompanied by an executed stock purchase agreement
in form and substance satisfactory to the Company and by payment of the
exercise price as provided in Section 6.1.6. The date the Company receives
written notice of an exercise hereunder accompanied by payment of the
exercise price will be considered as the date such Option was exercised.
Promptly after receipt of written notice of exercise of an option, the
Company shall, without stock issue or transfer taxes to the optionee or other
person entitled to exercise the Option, deliver to the optionee or such other
person a certificate or certificates for the requisite number of shares of
stock. An optionee or transferee of an Option shall not have any privileges
as shareholder with respect to any stock covered by the Option until the date
of issuance of the stock certificate.
8. DEFINITIONS RELATING TO SARs AND LIMITED RIGHTS
For purposes of this Plan, the following items shall have the
following meanings.
8.1 CHANGE IN CONTROL. The term "Change in Control" shall mean
any of the following events:
(a) the Company is provided a copy of a Schedule 13D filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") indicating that any person or group (as such terms are defined in
Section 13(d)(3) of the Exchange Act) that does not on the date of this Plan
is adopted by the Board hold more than five percent of the outstanding shares
of
<PAGE>
the Company entitled to vote for the election of directors has become the
holder of more than 40 percent of the outstanding shares of the Company
entitled to vote for the election of directors;
(b) as a result of or in connection with any cash tender
offer, merger, or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of
the Company just prior to such event shall cease to constitute a majority of
the Board;
(c) the Company's stockholders approve a definitive agreement
providing for a transaction in which the Company will cease to be an
independent publicly-owned corporation;
(d) the stockholders of the Company approve a definitive
agreement (i) to merge or consolidate the Company with or into another
corporation in which the holders of the Common Stock immediately before such
merger or reorganization will not, immediately following such merger or
reorganization, hold as a group on a fully-diluted basis both the ability to
elect at least a majority of the directors of the surviving corporation and
at least a majority in value of the surviving corporation's outstanding
equity securities, or (ii) to sell or otherwise dispose of all or
substantially all of the assets of the Company; or
(e) an Offer is made.
8.2 FMV PER SHARE. The term "FMV per Share" shall mean, for the
day or period with respect to which the FMV per share is being determined,
the fair market value of the Common Stock determined in accordance with the
provisions of Section 6.3.1.
8.3 LIMITED RIGHT HOLDER. The term "Limited Right Holder" shall
mean a person to whom a Limited Right is granted pursuant to the Plan.
8.4 LIMITED RIGHT SPREAD. The term "Limited Right Spread" shall
mean an amount (rounded to the nearest whole dollar) equal to the product
computed by multiplying (a) the excess of (i) the greater of the highest FMV
per Share on any day during the 60 day period prior to the date of exercise
of the
<PAGE>
Limited Right and the highest price per Share of Common Stock paid or
proposed to be paid in connection with any Change in Control over (ii) the
exercise price per share of Common Stock at which the Related Right is
exercisable, or in the case of a Limited Right granted without reference to a
Related Right, such other price as the Administrator establishes at the time
the Limited Right is granted, by (b) the number of shares of Common Stock
with respect to which a Limited Right is being exercised. If the
consideration paid or proposed to be paid for Common Stock in connection with
a Change in Control shall consist, in whole or in part, of consideration
other than cash, the Administrator shall take such action, as in its judgment
it deems appropriate, to establish the cash value of such consideration, but
such valuation shall not be less than the value, if any, attributed to such
consideration by any other party to the transaction constituting the Change
in Control.
8.5 OFFER. The term "Offer" shall mean a tender offer or exchange
offer for shares of the Company's Common Stock other than one made by the
Company or by a person or group, as such terms are defined in Section
13(d)(3) of the Exchange Act, that on the date this Plan is adopted by the
Board holds more than five percent of the outstanding shares of the Company
entitled to vote for the election of directors where the offeror acquires
more than 40 percent of the outstanding shares of Common Stock.
8.6 RELATED RIGHT. The term "Related Right" shall mean an option
with respect to which a SAR or Limited Right is granted.
8.7 SAR HOLDER. The term "SAR Holder" shall mean a person holding
an option to acquire shares of Common Stock to whom a SAR is granted pursuant
to this Plan.
8.8 SAR SPREAD. The term "SAR Spread" shall mean an amount
(rounded to the nearest whole dollar) equal to the product computed by
multiplying (a) the excess of (i) if the SAR may only be exercised during the
Window Period under Section 9.5 below, then the highest FMV per Share on any
day during the Window Period, and if exercise of the SAR is not so limited
under Section 9.5 below, then the FMV per Share on the date the SAR is
exercised, over (ii) the exercise price per share of common stock at which
the Related Right is exercisable, or in the case of a SAR granted without
reference to a Related Right, such other price as the Administrator
establishes at the time the SAR is
<PAGE>
granted, by (b) the number of shares of Common Stock with respect to which a
SAR is being exercised.
8.9 WINDOW PERIOD. The term "Window Period" shall mean the
periods specified in Rule 16b-3(e)(3)(iii), or any successor rule, within
which a SAR must be exercised in order to be exempt from the operation of
Section 16(b) of the Exchange Act by virtue of paragraph (e) of Rule 16b-3 or
any successor provision. This period is, as of the date of this Plan,
between the third and twelfth business days following release by the Company
of quarterly or annual summary statements of sales and earnings.
9. STOCK APPRECIATION RIGHTS
9.1 GRANT OF SAR. The Administrator may, in the exercise of the
Administrator's discretion, grant SARs to eligible employees. A SAR may be
granted either (i) with respect to shares of Common Stock subject to a
Related Right held by the SAR Holder, whether or not the Related Right is an
Option granted pursuant to this Plan, or (ii) without reference to any
Related Right. If a Related Right is an ISO, a SAR granted with respect to
such Related Right may be granted only at the time of grant of the related
ISO, but if the Related Right is a non-qualified option, the SAR may be
granted either simultaneously with the grant of the related non-qualified
option, or may be granted at any time during the term of such related
non-qualified option, whether or not the option is a NQO granted pursuant to
this Plan, or a previously or subsequently granted non-qualified option not
granted pursuant to this Plan, and whether or not the option is granted
pursuant to a "plan" within the meaning of Rule 16b-3. Notwithstanding any
other provision of the Plan, the Administrator shall have sole discretion to
specify a maximum limitation on the amount of the SAR Spread, to determine
the time at which any SAR otherwise exercisable may be exercised, to
determine whether upon exercise of a SAR the SAR Holder may receive cash or
stock as provided in Section 9.8 and 9.9 below or may elect to receive either
cash or stock, to establish a price other than the exercise price of shares
subject to a Related Right as a basis for determining the amount of the SAR
Spread, and to grant any SAR subject to such additional terms and conditions
as are consistent with the provisions of this Plan.
9.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event
described in Section 6.1.1, an adjustment is made to a
<PAGE>
Related Right held by a SAR Holder, then the number of shares covered by the
SAR shall also be adjusted accordingly.
9.3 CORPORATE TRANSACTIONS. New SARs may be substituted for the
SARs granted under this Plan, or the Company's obligations as to options
outstanding under this Plan may be assumed, by an employer corporation other
than the Company, or by a parent or subsidiary of such employer corporation,
in connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is
involved. Notwithstanding the foregoing or the provisions of Section 9.2, if
such employer corporation, or parent or subsidiary of such employer
corporation, does not substitute new SARs for, and substantially equivalent
to, the SARs granted hereunder, or assume the SARs granted hereunder, or if
the Board determines, in its sole discretion, that SARs outstanding under
this Plan should not then continue to be outstanding, the SARs granted
hereunder shall terminate (A) upon dissolution or liquidation of the Company,
or similar occurrence, or (B) upon any merger, consolidation, acquisition,
separation, or similar occurrence, where the Company, will not in economic
substance be the surviving corporation; provided, however, that each SAR
Holder shall be mailed notice at least 15 days prior to such dissolution,
liquidation, merger, consolidation, acquisition, separation, or similar
occurrence, and shall have at least 10 days after the mailing of such notice
to exercise any unexpired SARs granted hereunder to the extent such SARs are
then exercisable.
9.4 SAR GRANT DATE. Except in the case of advance approvals
described in Section 5.4, the date of grant of a SAR under this Plan shall be
the date as of which the Administrator approves the grant.
9.5 TIME OF SAR EXERCISE. A SAR shall generally be immediately
exercisable and shall be exercisable in whole or in part. Any election by a
SAR Holder to receive cash in full or partial settlement of a SAR, as well as
any exercise by the SAR Holder of a SAR for such cash, shall be made only
during the Window Period. Where a SAR is granted with respect to a Related
Right, unless written agreement pursuant to which the SAR is granted
otherwise provides, the SAR may be exercised only to the extent to which
shares covered by the Related Right are not at the time of exercise subject
to a right of repurchase as described in Section 6.1.9. A SAR may not be
exercised under any
<PAGE>
circumstances until the expiration of six months following the date of grant
of the SAR, except in the event of the death or permanent disability of the
SAR Holder.
9.6 EFFECT ON RELATED RIGHT; TERMINATION OF SAR. If a SAR granted
with respect to a Related Right is exercised, the Related Right shall cease
to be exercisable and shall be cancelled to the extent of the number of
shares with respect to which the SAR was exercised. The Company and the SAR
Holder shall take such actions and execute such documents as may be necessary
or appropriate to reflect such cancellation. Upon the exercise or
termination of a Related Right, SARs granted with respect thereto shall
terminate to the extent of the number of shares as to which the Related Right
was exercised or terminated. Upon the death or permanent disability of the
SAR Holder, the SAR shall be exercisable only by the SAR Holder's personal
representative or any other person who acquires the SAR Holder's right by
will or the applicable laws of descent and distribution and, in the case of a
SAR granted with respect to a Related Right, only to the extent to which the
Related Right is then exercisable.
9.7 NONASSIGNABILITY OF SARS. No SAR granted under this Plan
shall be assignable or otherwise transferable by the SAR Holder except by
will or by the laws of descent and distribution. During the life of the SAR
Holder, a SAR shall be exercisable only by the SAR Holder or the SAR Holder's
guardian or legal representative.
9.8 MANNER OF EXERCISE; ELECTION TO RECEIVE CASH OR STOCK. A SAR
Holder wishing to exercise a SAR shall (i) give written notice to the Company
at its principal executive office, to the attention of the Secretary of the
Company, specifying the number of shares of Common Stock with respect to
which the SAR Holder is exercising the SAR and if under the terms of the SAR
the SAR Holder may elect to receive either cash, stock, or a combination of
cash and stock upon exercise of the SAR, stating the manner in which the SAR
Holder has elected to receive payment upon exercise; (ii) deliver to the
Company such written representations, warranties, and covenants as the
Company may reasonably require; and (iii) if so requested by the Company,
deliver to the Secretary of the Company any written agreement that the
Company may reasonably require relating to the SAR being exercised or
pertaining to the Related Right. The date the Company receives all of the
instruments referred to in the
<PAGE>
preceding sentence shall be considered as the date upon which the SAR was
exercised. A SAR Holder who receives stock upon exercise of a SAR shall not
have any privileges as a stockholder with respect to any such shares of stock
until the date of issuance of a stock certificate.
9.9 EXERCISE OF SARS; MARKET PRICE. Upon the exercise of a SAR,
the SAR Holder shall be entitled to receive one of the following kinds of
payments:
(a) that number of whole shares of Common Stock equal to the
number computed by dividing the SAR Spread by the highest FMV per Share
during the Window Period in which the SAR was exercised and an amount of cash
equal to the highest FMV per Share during the Window Period in which the SAR
was exercised multiplied by the fraction (if any) of a share of Common Stock
not so issued (such payment to be in lieu of issuance of fractional shares);
or
(b) an amount in cash equal to the SAR Spread; or
(c) a combination of cash and whole shares of Common Stock (the
combined value of which, however, shall not exceed the SAR Spread) in the
respective amounts specified in the SAR Holder's notice of exercise.
Notwithstanding any other provision of this Section 9, if the terms of a SAR
entitle the SAR Holder to elect upon exercise of the SAR whether to receive
cash in full or partial settlement of the SAR, then the Administrator shall
have sole discretion to consent to or disapprove such election ("Cash
Election"). Such consent or disapproval may be given at any time after the
Cash Election to which it relates. If the Administrator shall disapprove a
Cash Election, the exercise of the SAR with respect to which the Cash
Election was made shall be of no effect but shall be without prejudice to the
right of the SAR Holder to exercise the SAR in the future in accordance with
its terms. The Administrator shall have no such discretion with respect to
the exercise of a Limited Right pursuant to Section 10 of the Plan.
9.10 Withholding and Employment Taxes. At the time of exercise of
a SAR, the SAR Holder shall remit to the Company in cash all applicable
federal, state and local withholding and employment taxes, and the
Administrator may, in its sole discretion, reduce the amount paid to a SAR
Holder upon exercise
<PAGE>
of the SAR by such amount. The Administrator may, in the exercise of its
sole discretion, permit a SAR Holder to pay some or all of such taxes (i) by
means of a promissory note on such terms as the Administrator deems
appropriate; or (ii) in accordance with the applicable provision of Section
6.1.9.
10. LIMITED RIGHTS
10.1 GRANT OF LIMITED RIGHT. The Administrator may, in the
exercise of the Administrator's discretion, grant Limited Rights to eligible
employees. A Limited Right may be granted with respect to shares of Common
Stock subject to a Related Right held by the Limited Right Holder, whether or
not the Related Right is an Option granted pursuant to this Plan, or may be
granted without reference to any Related Right. If a Related Right is an
ISO, a Limited Right granted with respect to such Related Right may be
granted only at the time of grant of the related ISO, but if the Related
Right is a non-qualified option, the Limited Right may be granted either
simultaneously with the grant of the related non-qualified option, or at any
time during the term of such related non-qualified option, whether or not the
option is a NQO granted pursuant to this Plan or a previously or subsequently
granted non-qualified option not granted pursuant to this Plan, and whether
or not the option is granted pursuant to a "plan" within the meaning of Rule
16b-3. The Administrator shall have sole discretion to grant any Limited
Right subject to such additional terms and conditions as are consistent with
the provisions of this Plan.
10.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event
described in Section 6.1.1, an adjustment is made to a Related Right held by
a Limited Right Holder, then the number of shares covered by the Limited
Right covering the Related Right shall also be adjusted accordingly.
10.3 TIME OF LIMITED RIGHT EXERCISE. Each outstanding Limited
Right shall become immediately exercisable only upon the occurrence of a
Change in Control, unless the Change in Control is approved by the Board as
provided in Section 10.4 below, whether or not the then-outstanding Related
Right, if any, is then exercisable. The Company shall promptly notify each
Limited Right Holder of the occurrence of any Change in Control. Limited
Rights may not be exercised under any circumstances until the expiration of
six months following the date of grant of the Limited Right. In the event of
the occurrence of any of the
<PAGE>
events specified in clauses (a) through (d) of Section 8.1 above, each
outstanding Limited Right will be exercisable for a period of 60 days
following the date of occurrence of such event, and in the event of an Offer,
each outstanding Limited Right will be exercisable for a 60 day period
following the date of expiration of the Offer; provided, however, that if
the event constituting the Change in Control occurs prior to the expiration
of six months from the date of grant of a Limited Right, then such Limited
Right shall be exercisable for a period of 60 days following expiration of
such six month period. Where a Limited Right is granted with respect to a
Related Right, unless the written agreement pursuant to which the Limited
Right is granted otherwise provides, the Limited Right may be exercised only
to the extent to which shares covered by the Related Right are not at the
time of exercise subject to a right of repurchase as described in Section
6.1.8. A Limited Right shall remain exercisable during the exercise periods
described above in this Section 10.3 in the event of an Employment
Termination of the Limited Right Holder after a Change in Control during such
exercise period. Notwithstanding the above, upon an Employment Termination
of the Limited Right Holder before the occurrence of any Change in Control,
the Limited Right shall expire immediately. Upon the death or permanent
disability of the Limited Right Holder, the Limited Right shall be
exercisable only by the Limited Right Holder's personal representative or any
other person who acquires the Limited Right Holder's right by will or the
applicable laws of descent and distribution.
10.4 LIMITATIONS ON RIGHT TO EXERCISE LIMITED RIGHTS.
Notwithstanding Section 10.3, no Limited Right shall be exercisable with
respect to an event constituting a Change in Control under Section 8.1 (b)
through (e) in the event the Board approves such event prior to the
occurrence of such event, and no Limited Right shall be exercisable with
respect to an event constituting a Change in Control under Section 8.1 (a) if
the Board approves such event prior to such time following such event as the
persons who were directors just prior to such event cease to constitute a
majority of the Board.
10.5 EFFECT ON RELATED RIGHT; TERMINATION OF LIMITED RIGHT. If a
Limited Right granted with respect to a Related Right is exercised, the
Related Right shall cease to be exercisable and shall be cancelled to the
extent of the number of shares with respect to which the Limited Right was
exercised. The Company and the Limited Right Holder shall take such actions
<PAGE>
and execute such documents as may be necessary or appropriate to reflect such
cancellation. Upon the exercise or termination of a Related Right, Limited
Rights granted with respect thereto shall terminate to the extent of the
number of shares as to which the Related Right was exercised or terminated.
10.6 NONASSIGNABILITY OF LIMITED RIGHTS. No Limited Right granted
under this Plan shall be assignable or otherwise transferable by the Limited
Right Holder except by will or by the laws of descent and distribution.
During the life of the Limited Right Holder, a Limited Right shall be
exercisable only by the Limited Right Holder or the Limited Right Holder's
guardian or legal representative.
10.7 EXERCISE OF LIMITED RIGHTS; PAYMENT, MARKET PRICE. Upon the
exercise of a Limited Right, the Company shall pay to the Limited Right
Holder an amount in cash representing the Limited Right Spread.
10.8 WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of
a Limited Right, the Limited Right Holder shall remit to the Company in cash
all applicable federal, state and local withholding and employment taxes, and
the Administrator may, in its sole discretion, reduce the amount paid to a
Limited Right Holder upon exercise of the Limited Right by such amount. The
Administrator may, in the exercise of its sole discretion, permit an optionee
to pay some or all of such taxes (i) by means of a promissory note on such
terms as the Administrator deems appropriate; or (ii) in accordance with the
applicable provisions of Section 6.1.9.
11. EMPLOYMENT RELATIONSHIP
Nothing in this Plan or any option granted hereunder shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate any optionee's employment or status as a director at
any time, nor confer upon any optionee any right to continue in the employ
of, or as a director of, the Company or any of its Affiliates.
12. EXISTING OPTIONS TO BE GOVERNED BY PLAN
At the option of the Administrator, any unexercised outstanding
option granted by the Company prior to the date of this Plan to any employee
or director to acquire shares of Common
<PAGE>
Stock may be deemed granted pursuant to this Plan, and any transactions with
respect to such option occurring after the date this Plan is approved by the
Board may be deemed to occur pursuant to this Plan and be governed by the
provisions of this Plan. At the option of the Administrator, the date of
grant of any such option may be the date as of which the optionee first
received the right to acquire the Common Stock subject to the option, and the
exercise price may be the exercise price specified on the date of grant. The
optionee and the Company shall execute such documents and take such actions
as may be necessary to implement the provisions of this Section.
13. AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN
The Board or the Administrator may at any time amend, alter,
suspend, or discontinue this Plan, except to the extent that stockholder
approval is required by applicable law or Rule 16b-3; provided, however, no
amendment, alteration, suspension, or discontinuation shall be made that
would impair the rights of any grantee under any option, SAR, or Limited
Right theretofore granted, without the grantee's consent. The Board shall
have the power to make such changes in this Plan and in the regulations and
administrative provisions hereunder or in any outstanding option, SAR, or
Limited Right as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any option granted pursuant to
this Plan to qualify as an incentive stock option under Section 422A of the
Code, subject in all events to the consent of the holder of such Option.
14. INDEMNIFICATION OF ADMINISTRATOR
The Company shall indemnify each present and future member of the
group constituting the Administrator against, and each member of the group
constituting the Administrator shall be entitled without further act on his
part to indemnify from the Company for all expenses (including the amount of
judgments and the amount of approved settlements made with a view to the
curtailment of costs and litigation, other than amounts paid to the Company
itself) reasonably incurred by such person in connection with or arising out
of any action, suit, or proceeding to the full extent permitted by the laws
of the State of Delaware and by the Bylaws of the Company.
<PAGE>
15. EFFECTIVE DATE OF THIS PLAN
This Plan shall become effective upon adoption by the Board;
provided, however, that if this Plan is not approved within 12 months after
its adoption by the Board, by unanimous written consent of the stockholders
of the Company or by the stockholders of the Company voting at a validly
called stockholders meeting by a majority (or such greater number as may be
required by law or applicable governmental regulations or orders) of the
shares entitled to vote, then any options exercised pursuant to this Plan
shall constitute NQOs and not ISOs, regardless of their status on the date of
grant. Options, SARs, and Limited Rights may be granted and exercised under
this Plan only after there has been compliance with all applicable federal
and state securities laws.
<PAGE>
EXHIBIT 10.2
ROBERT HALF INTERNATIONAL INC.
STOCKPLUS PLAN
(AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
StockPlus Plan (the "Plan") are: (a) to improve individual employee performance
by providing long-term incentives and rewards to employees of the Company, (b)
to assist the Company in attracting, retaining and motivating employees with
experience and ability, and (c) to associate the interests of such employees
with those of RHII's shareholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "COMMON STOCK" or "STOCK" means RHII Common Stock, par value $.001
per share.
(b) "ADMINISTRATOR" means the Board of Directors of RHII or a
committee of the Board, the composition and the size of which shall cause
such committee to satisfy the requirements of Rule 16b-3 of the Exchange
Act with respect to officers and directors.
(c) "COMPANY" means Robert Half International Inc., its divisions and
direct and indirect subsidiaries.
(d) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(e) "FAIR MARKET VALUE" means the closing sales price on the New York
Stock Exchange or the NASDAQ National Market System, as the case may be, on
the date the value is to be determined as reported in The Wall Street
Journal (Western Edition). If there are no trades on such date, the closing
price on the latest preceding business day upon which trades occurred shall
be the Fair Market Value. If the Stock is not listed in the New York Stock
Exchange or quoted on the NASDAQ National Market System, the Fair Market
Value shall be determined in good faith by the Administrator.
(f) "GRANT DATE" means the date an Option is granted under the Plan.
(g) "OPTION" or "STOCK OPTION" means a right granted under the Plan to
an Optionee to purchase shares of RHII Common Stock at a fixed price for a
specified period of time.
(h) "OPTION PRICE" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(i) "OPTIONEE" means an eligible employee of the Company who has
received a Stock Option granted under the Plan.
(j) "RHII" means Robert Half International Inc., a Delaware
corporation.
3. ADMINISTRATION. The Plan shall be administered by the Administrator,
which shall have full power and authority to administer and interpret the Plan
and to adopt such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan as the Administrator deems necessary or
advisable. The Administrator's powers include, but are not limited to (subject
to the specific limitations described herein), authority to determine the
employees to be granted Options
1
<PAGE>
under the Plan, determine the size and applicable terms and conditions of grants
to be made to such employees, determine the time when Options will be granted
and authorize grants to eligible employees. Any guidelines that may be adopted
from time to time by the Administrator shall be advisory only and shall not be
binding upon the Administrator.
The Administrator's interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Options granted hereunder, shall be final,
binding and conclusive on all interested parties. The Administrator may delegate
ministerial functions hereunder, such delegation to be subject to such terms and
conditions as the Administrator in its discretion shall determine. The
Administrator may as to all questions of accounting rely conclusively upon any
determinations made by the independent public accountants of the Company.
4. STOCK AVAILABLE FOR OPTIONS. The shares that may be delivered or
purchased under the Plan shall not exceed an aggregate of 5,685,000 shares of
Common Stock, subject to any adjustments which may be made pursuant to Section
11 hereof. Shares of Stock used for purposes of the Plan may be either shares of
authorized but unissued Common Stock or treasury shares or both. Stock covered
by Options which have terminated or expired prior to exercise or have been
surrendered or cancelled shall be available for further option hereunder.
5. ELIGIBILITY. All those employees of the Company as shall be determined
from time to time by the Administrator shall be eligible to participate in the
Plan, provided, however, that no employee may be granted Options in the
aggregate which would result in that employee receiving more than 10% of the
maximum number of shares available for issuance under the Plan. However, no
individual who is subject to Section 16 of the Exchange Act with respect to
transactions in the Company's securities may be granted an option subsequent to
November 1, 1995.
6. TERMS AND CONDITIONS OF OPTIONS. Each Option granted hereunder shall be
in writing and shall contain such terms and conditions as the Administrator may
determine, subject to the following:
(a) PRICE. The Option Price shall be not less than 85% of the Fair
Market Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE DATES. Options granted hereunder shall have a
term of no longer than ten years from the Grant Date. No Option may be
granted after the tenth anniversary of the date of adoption of this Plan. A
grant of Options may become exercisable in installments; provided, however,
that no Option shall become exercisable until six months following the Grant
Date of such Option. However, Stock Options must be exercised for full
shares of Common Stock. To the extent that Stock Options are not exercised
when they become initially exercisable, they shall be carried forward and be
exercisable until the expiration of the term of such Stock Options, subject
to the provisions of Section 6(e) hereof. An option granted after November
1, 1995, to an eligible employee pursuant to this Plan shall automatically
expire if, within six months after its grant, the recipient of such option
becomes subject to Section 16 of the Exchange Act with respect to
transactions in the Company's securities.
(c) EXERCISE OF OPTION. To exercise an Option, the holder thereof
shall give notice of his or her exercise to the Company, specifying the
number of shares of Common Stock to be purchased and identifying the
specific Options that are being exercised. From time to time the
Administrator may establish procedures relating to effecting such exercises.
No fractional shares shall be issued as a result of exercising an Option. An
Option is exercisable during an Optionee's lifetime only by the Optionee or
Optionee's guardian or legal representative.
(d) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash,
check or delivery of shares of Common Stock that have been owned by Optionee
for at least six months. If all or a portion of the purchase price is paid
by delivery of shares, the shares shall be valued at the Fair Market Value
of such shares on the date of exercise.
2
<PAGE>
In addition, in order to enable the Company to meet any applicable foreign,
federal (including FICA), state and local withholding tax requirements, an
Optionee shall also be required to pay the amount of tax to be withheld. No
share of stock will be delivered to any Optionee until all such amounts have
been paid. In the event that withholding taxes are not paid within the
specified time period, to the extent permitted by law the Company shall have
the right, but not the obligation, to cause such withholding taxes to be
satisfied by reducing the number of shares of stock deliverable or by
offsetting such withholding taxes against amounts otherwise due from the
Company to the Optionee. If withholding taxes are paid by reduction of the
number of shares deliverable to Optionee, such shares shall be valued at the
Fair Market Value as of the date of exercise.
(e) EFFECT OF TERMINATION OF EMPLOYMENT. All Options then held by the
Optionee which are exercisable at the date of termination shall continue to
be exercisable by the Optionee, or, if applicable, Optionee's estate, until
the earlier of 30 days after such date or the expiration of such Options in
accordance with their terms. All Options which are not exercisable at such
date shall automatically terminate and lapse, unless the Administrator shall
determine otherwise. Notwithstanding the foregoing, if exercise of an Option
during the 30-day period described in the previous sentence would subject
the Optionee to liability under Section 16 of the Exchange Act, such Option
shall be exercisable until the earliest of (a) its normal termination date
and (b) seven months after the last transaction in Common Stock by the
Optionee prior to termination.
(f) MISCONDUCT. In the event that the Administrator determines in good
faith that an Optionee has (i) used for profit, or materially harmed the
Company by disclosing to unauthorized persons, confidential information or
trade secrets of the Company, (ii) materially breached any contract with, or
materially violated any fiduciary obligation to, the Company, or (iii)
engaged in unlawful trading in the securities of RHII or of another company
based on nonpublic information gained as a result of that Optionee's
employment with the Company, then, effective as of the date notice of such
misconduct is given by the Administrator to the Optionee, that Optionee
shall forfeit all rights to any unexercised Options granted under the Plan
and all of that Optionee's outstanding Options shall automatically terminate
and lapse, unless the Administrator shall determine otherwise.
(g) NONTRANSFERABILITY OF OPTIONS. During an Optionee's lifetime, his
or her Options shall not be transferrable and shall only be exercisable by
the Optionee and any purported transfer shall be null and void. Options are
not transferable except by will or by the laws of descent and distribution.
7. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any grants
theretofore made hereunder. The Administrator may amend the terms and conditions
of outstanding Options, provided, however, that (i) no such amendment shall be
adverse to the holders of the Options, (ii) no such amendment shall extend the
term of an Option, and (iii) the amended terms of the Option would be permitted
under this Plan.
8. FOREIGN EMPLOYEES. Without amending the Plan, the Administrator may
grant Options to eligible employees who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Administrator be necessary or desirable to foster and promote achievement of
the purposes of the Plan, and, in furtherance of such purposes the Administrator
may make such modifications, amendments, procedures, subplans and the like as
may be necessary or advisable to comply with provisions of laws in other
countries in which the Company operates or has employees.
9. REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Option shall be
subject to the requirement that if at any time the Administrator shall determine
that the registration, listing or qualification of the shares covered thereby
upon any securities exchange or under any foreign, federal, state or local law,
or the consent or approval of any governmental regulatory body, is necessary or
3
<PAGE>
desirable as a condition of, or in connection with, the granting of such Option
or the purchase of shares thereunder, no such Option may be exercised unless and
until such registration, listing, qualification, consent or approval shall have
been effected or obtained free of any condition not acceptable to the
Administrator. Any person exercising an Option shall make such representations
and agreements and furnish such information as the Administrator may request to
assure compliance with the foregoing or any other applicable legal requirements.
RHII shall use its reasonable best efforts to cause shares issued hereunder to
be registered under the Securities Act of 1933, as amended.
10. BUY OUT OF OPTION GAINS. The Administrator shall have the right to
elect, in its sole discretion and without the consent of the holder thereof
(subject to the last sentence of this paragraph), to cancel the exercisable
portion of any Option and pay to the Optionee the excess of the Fair Market
Value of the shares of Common Stock covered by such cancelled portion of the
Option over the Option Price of such cancelled portion of the Option at the date
the Administrator provides written notice (the "Buy Out Notice") of its
intention to exercise such right. Buy outs pursuant to this provision shall be
effected by RHII as promptly as possible after the date of the Buy Out Notice.
Payments of buy out amounts may be made in cash, in shares of Common Stock, or
partly in cash and partly in Common Stock, as the Administrator deems advisable.
To the extent payment is made in shares of Common Stock, the number of shares
shall be determined by dividing the amount of the payment to be made by the Fair
Market Value of a share of Common Stock at the date of the Buy Out Notice. In no
event shall RHII be required to deliver a fractional share of Common Stock in
satisfaction of this buy out provision. Payments of such buy out amounts shall
be made net of any applicable foreign, federal (including FICA), state and local
withholding taxes. Notwithstanding the foregoing, no buy out may be effected (a)
until at least six months after the Grant Date of the subject option, and (b)
without the consent of the Optionee if the Optionee is generally required to
file reports pursuant to Section 16(a) of the Exchange Act with respect to his
transactions in the Common Stock.
11. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination or exchange
of shares or other similar corporate change, such equitable adjustments may be
made in the Plan and the Options granted hereunder as the Administrator
determines are necessary or appropriate, including, if necessary, an adjustment
in the number of shares and prices per share applicable to Options then
outstanding and in the number of shares which are reserved for issuance under
the Plan. Any such adjustment shall be conclusive and binding for all purposes
of the Plan.
12. NO RIGHTS TO OPTIONS OR EMPLOYMENT. No employee or other person shall
have any claim or right to be granted an Option under the Plan. Receipt of an
Option under the Plan shall not give an employee any rights to receive any other
grant under the Plan. An Optionee shall have no rights to or interest in any
Option except as set forth herein. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Company.
13. RIGHTS AS SHAREHOLDER. An Optionee under the Plan shall have no rights
as a holder of Common Stock with respect to Options granted hereunder, unless
and until certificates for shares of Common Stock are issued to such Optionee.
14. OTHER ACTIONS. This Plan shall not restrict the authority of the
Administrator or of RHII, for proper corporate purposes, to grant or assume
stock options, other than under the Plan, to or with respect to any employee or
other person.
15. COSTS AND EXPENSES. Except as provided in Section 6(d) hereof with
respect to taxes, the costs and expenses of administering the Plan shall be
borne by RHII and shall not be charged to any grant nor to any employee
receiving a grant.
4
<PAGE>
16. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, RHII shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment
of any grant under the Plan.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such persons.
19. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board of Directors of RHII. If stockholder approval is required (a) under the
General Rules and Regulations promulgated under Section 16 of the Exchange Act
in order to exempt any transaction contemplated by this Plan from Section 16(b)
of the Exchange Act, (b) by the rules of the New York Stock Exchange, if RHII
Common Stock is listed thereon, or (c) by the rules of NASDAQ pertaining to the
National Market System, if RHII Common Stock is quoted thereon, then this Plan
shall be submitted to the stockholders of RHII for consideration at the next
annual meeting of stockholders. The Administrator may make Options conditioned
on such approval, and any Option so made shall be effective as of the date of
grant.
5
<PAGE>
EXHIBIT 10.3
OUTSIDE DIRECTORS' OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997)
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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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 30,000 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 15,000 shares of Stock.
Otherwise, the Option shall be for 12,000 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 10.4
ROBERT HALF INTERNATIONAL INC.
1989 RESTRICTED STOCK PLAN
(AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997)
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 1,800,000 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
4
<PAGE>
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.
5
<PAGE>
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.
6
<PAGE>
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.
7
<PAGE>
Exhibit 11
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Income............................................................ $ 24,631 $ 15,946 $ 66,761 $ 43,409
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number Of Shares Outstanding:
Primary:
Common stock...................................................... 90,860 88,700 90,516 87,830
Common stock equivalents--
Stock options (A)............................................... 3,356 3,267 3,241 3,310
--------- --------- --------- ---------
Primary shares outstanding........................................ 94,216 91,967 93,757 91,140
--------- --------- --------- ---------
--------- --------- --------- ---------
Fully Diluted:
Common stock...................................................... 90,860 88,700 90,516 87,830
Common stock equivalents--
Stock options (A)............................................... 3,516 3,505 3,803 3,754
--------- --------- --------- ---------
Fully diluted shares outstanding.................................. 94,376 92,205 94,319 91,584
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income Per Share:
Primary............................................................. $ .26 $ .17 $ .71 $ .48
Fully diluted....................................................... $ .26 $ .17 $ .71 $ .47
</TABLE>
- ------------------------
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
All share and per share amounts have been restated to retroactively reflect
the three-for-two stock split effected in the form of a stock dividend in
September 1997.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> SEP-30-1997 DEC-31-1996
<CASH> 130,795 80,181
<SECURITIES> 0 0
<RECEIVABLES> 179,455 129,399
<ALLOWANCES> 6,425 4,016
<INVENTORY> 0 0
<CURRENT-ASSETS> 321,483 217,748
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 537,149 416,012
<CURRENT-LIABILITIES> 123,363 86,561
<BONDS> 4,829 5,069
0 0
0 0
<COMMON> 91 90
<OTHER-SE> 392,872 308,355
<TOTAL-LIABILITY-AND-EQUITY> 537,149 416,012
<SALES> 0 0
<TOTAL-REVENUES> 934,399 898,635
<CGS> 0 0
<TOTAL-COSTS> 563,165 545,343
<OTHER-EXPENSES> 3,693 5,405
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (2,840) (2,243)
<INCOME-PRETAX> 113,100 103,645
<INCOME-TAX> 46,339 42,543
<INCOME-CONTINUING> 66,761 61,102
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 66,761 61,102
<EPS-PRIMARY> .71 0.67
<EPS-DILUTED> .71 0.67
</TABLE>
