<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 JUNE 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 June 30, 1997:
60,467,906 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>
DECEMBER 31,
1996
JUNE 30, ------------
1997
-----------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Cash and cash equivalents............................................................. $ 106,431 $ 80,181
Accounts receivable, less allowances of $5,629 and $4,016............................. 154,579 125,383
Other current assets.................................................................. 15,769 12,184
----------- ------------
Total current assets.............................................................. 276,779 217,748
Intangible assets, less accumulated amortization of $42,713 and $39,461............... 175,114 174,663
Other assets.......................................................................... 37,678 23,601
----------- ------------
Total assets...................................................................... $ 489,571 $ 416,012
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses................................................. $ 18,585 $ 15,049
Accrued payroll costs................................................................. 80,409 66,087
Income taxes payable.................................................................. 4,470 3,883
Current portion of notes payable and other indebtedness............................... 2,997 1,542
----------- ------------
Total current liabilities......................................................... 106,461 86,561
Notes payable and other indebtedness, less current portion............................ 5,377 5,069
Deferred income taxes................................................................. 15,992 15,937
----------- ------------
Total liabilities................................................................. 127,830 107,567
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value authorized 100,000,000 shares; issued and outstanding
60,471,284 and 59,748,171 shares.................................................... 60 60
Capital surplus....................................................................... 171,623 140,473
Deferred compensation................................................................. (35,164) (26,802)
Accumulated translation adjustments................................................... (833) 23
Retained earnings..................................................................... 226,055 194,691
----------- ------------
Total stockholders' equity........................................................ 361,741 308,445
----------- ------------
Total liabilities and stockholders' equity........................................ $ 489,571 $ 416,012
----------- ------------
----------- ------------
</TABLE>
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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues............................................. $ 311,622 $ 210,649 $ 594,645 $ 406,888
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees.................... 187,482 126,728 358,611 246,325
---------- ---------- ---------- ----------
Gross margin..................................................... 124,140 83,921 236,034 160,563
Selling, general and administrative expenses..................... 86,229 58,906 163,870 112,150
Amortization of intangible assets................................ 1,235 1,361 2,460 2,669
Interest income.................................................. (937) (580) (1,686) (968)
---------- ---------- ---------- ----------
Income before income taxes....................................... 37,613 24,234 71,390 46,712
Provision for income taxes....................................... 15,403 10,010 29,260 19,249
---------- ---------- ---------- ----------
Net income....................................................... $ 22,210 $ 14,224 $ 42,130 $ 27,463
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per share............................................. $ .35 $ .23 $ .67 $ .45
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
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>
SIX MONTHS ENDED
JUNE 30,
----------------------
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 59,748 57,784
Issuance of restricted stock............................................................ 323 635
Repurchases of common stock............................................................. (272) (90)
Exercise of stock options............................................................... 663 425
Issuance of common stock for acquisition................................................ 9 --
---------- ----------
Balance at end of period.............................................................. 60,471 58,754
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 60 $ 58
Exercises of stock options.............................................................. 0 1
---------- ----------
Balance at end of period.............................................................. $ 60 $ 59
---------- ----------
---------- ----------
CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 140,473 $ 99,768
Issuance of common stock for acquisition................................................ 400 --
Issuance of restricted stock--excess over par value..................................... 14,014 18,899
Exercises of stock options--excess over par value....................................... 3,928 1,805
Tax benefits from exercises of stock options and restricted stock vesting............... 12,808 4,885
---------- ----------
Balance at end of period.............................................................. $ 171,623 $ 125,357
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (26,802) $ (9,642)
Issuance of restricted stock............................................................ (14,014) (18,899)
Amortization of deferred compensation................................................... 5,652 2,721
---------- ----------
Balance at end of period.............................................................. $ (35,164) $ (25,820)
---------- ----------
---------- ----------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period.......................................................... $ 23 $ 51
Translation adjustments................................................................. (856) (276)
---------- ----------
Balance at end of period.............................................................. $ (833) $ (225)
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 194,691 $ 137,695
Repurchases of common stock--excess over par value...................................... (10,766) (2,485)
Net income.............................................................................. 42,130 27,463
---------- ----------
Balance at end of period.............................................................. $ 226,055 $ 162,673
---------- ----------
---------- ----------
</TABLE>
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>
SIX MONTHS ENDED
JUNE 30,
----------------------
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................................ $ 42,130 $ 27,463
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets....................................................... 2,460 2,669
Depreciation expense.................................................................... 5,643 2,540
Deferred income taxes................................................................... (2,015) (1,513)
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable....................................................... (28,708) (17,033)
Increase in accounts payable, accrued expenses and accrued payroll costs.............. 16,968 11,821
Increase (decrease) in income taxes payable........................................... 587 (2,090)
Change in other assets, net of change in other liabilities............................ 4,672 (734)
---------- ----------
Total adjustments..................................................................... (393) (4,340)
---------- ----------
Net cash and cash equivalents provided by operating activities............................ 41,737 23,123
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions, net of cash acquired...................................................... (3,338) (1,725)
Capital expenditures.................................................................... (16,616) (6,791)
---------- ----------
Cash and cash equivalents used in investing activities.................................... (19,954) (8,516)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repurchases of common stock or common stock equivalents................................. (10,766) (2,485)
Principal payments on notes payable and other indebtedness.............................. (1,503) (3,632)
Proceeds and tax benefits from exercise of stock options and restricted stock vesting... 16,736 6,691
---------- ----------
Net cash and cash equivalents provided by financing activities............................ 4,467 574
---------- ----------
Net increase in cash and cash equivalents................................................. 26,250 15,181
Cash and cash equivalents at beginning of period.......................................... 80,181 41,346
---------- ----------
Cash and cash equivalents at end of period................................................ $ 106,431 $ 56,527
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 223 $ 332
Income taxes............................................................................ 17,910 17,055
Acquisitions:
Fair value of assets acquired--
Intangible assets..................................................................... $ 4,079 $ 4,155
Other................................................................................. 499 445
Liabilities incurred--
Notes payable and contracts........................................................... (536) (2,625)
Other................................................................................. (304) (250)
Common stock issued..................................................................... (400) --
---------- ----------
Cash paid, net of cash acquired......................................................... $ 3,338 $ 1,725
---------- ----------
---------- ----------
</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
JUNE 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- and RHI CONSULTING-REGISTERED TRADEMARK-. The
Company, through its Accountemps and Robert Half divisions, is the world's
largest specialized provider of temporary and permanent personnel in the fields
of accounting and finance. OfficeTeam specializes in skilled temporary
administrative personnel and RHI Consulting provides contract information
technology professionals. Revenues are predominantly from temporary services.
The Company operates in the United States, Canada and Europe. The Company is a
Delaware corporation.
PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include
the accounts of the Company and its subsidiaries, all of which are wholly-owned.
All significant intercompany balances have been eliminated. Certain
reclassifications have been made to the 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 six months ended June 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 exist at June 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)
JUNE 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.
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 SIX MONTHS ENDED JUNE
30, 1997 AND 1996
Temporary services revenues were $288 million and $194 million for the three
months ended June 30, 1997 and 1996, respectively, increasing by 49% during the
three months ended June 30, 1997 compared to the same period in 1996. Temporary
services revenues were $549 million and $374 million for the six months ended
June 30, 1997 and 1996, respectively, increasing by 47% during the six months
ended June 30, 1997 compared to the same period in 1996. Permanent placement
revenues were $24 million and $17 million for the three months ended June 30,
1997 and 1996, respectively, increasing by 41% during the three months ended
June 30, 1997 compared to the same period in 1996. Permanent placement revenues
were $46 million and $33 million for the six months ended June 30, 1997 and
1996, respectively, increasing by 39% during the six months ended June 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 six months ended June 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 six months ended June 30, 1997 and 91% and 90% of revenues for the
three and six months ended June 30, 1996, respectively. Foreign operations
represented 10% of revenues for both the three and six months ended June 30,
1997 and 9% and 10% of revenues for the three and six months ended June 30,
1996, respectively.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consists of payroll, payroll taxes
and insurance costs for temporary employees. Gross margin dollars from permanent
placement services are equal to revenues, as there are no direct costs
associated with such revenues. Gross margin dollars for the Company's temporary
services were $100 million and $190 million for the three and six months ended
June 30, 1997, respectively, compared to $67 million and $128 million for the
comparable periods in 1996, increasing by 49% and 48% for the three and six
months ended June 30, 1997, respectively. Gross margin amounts equaled 35% of
revenues for temporary services for both the three and six months ended June 30,
1997, compared to 35% and 34% of temporary service revenues for the three and
six months ended June 30, 1996, respectively, which the Company believes
reflects its ability to adjust billing rates and wage rates to underlying market
conditions. Gross margin dollars for the Company's permanent placement division
were $24 million and $46 million for the three and six months ended June 30,
1997, respectively, compared to $17 million and $33 million for the comparable
periods in 1996, increasing by 41% and 39% for the three and six months ended
June 30, 1997, respectively.
Selling, general and administrative expenses were $86 million and $164
million for the three and six months ended June 30, 1997, respectively, compared
to $59 million and $112 million during the three and six months ended June 30,
1996, respectively. Selling, general and administrative expenses as a percentage
of revenues were 28% in both the three and six months ended June 30, 1997
compared to 28% for both the three and six months ended June 30, 1996. 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 June 30, 1997. Intangible
assets represented 36% of total assets and 48% of total stockholders' equity at
June 30, 1997.
Interest income for the three months ended June 30, 1997 and 1996 was
$1,148,000 and $679,000, respectively, while interest expense for the three
months ended June 30, 1997 and 1996 was $211,000 and $99,000, respectively.
Interest income for the six months ended June 30, 1997 and 1996 was $2,097,000
and $1,223,000, respectively, while interest expense for the six months ended
June 30, 1997 and 1996 was $411,000 and $255,000, respectively. These changes
primarily reflect an increase in cash and cash equivalents.
The provision for income taxes for both the three and six months ended June
30, 1997 was 41% compared to 41% of income before taxes for the same periods in
1996.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during six months ended June 30, 1997
is the net effect of funds generated by operations and the funds used for the
personnel services acquisitions, capital expenditures and principal payments on
outstanding notes payable. For the six months ended June 30, 1997, the Company
generated $41.7 million from operations, used $20 million in investing
activities and provided $4.5 million by financing activities.
The Company's working capital at June 30, 1997 included $106.4 million in
cash and cash equivalents. In addition at June 30, 1997, the Company had
available $72.5 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 June 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.
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
On May 7, 1997, registrant held its annual meeting of stockholders. The two
matters presented to stockholders at the annual meeting were the election of two
directors to Class I and the approval of an amendment to the registrant's
Restated Certificate of Incorporation increasing the number of authorized shares
of Common Stock. The vote for director was as follows:
<TABLE>
<CAPTION>
NOMINEE SHARES FOR SHARES WITHHELD
- --------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Andrew S. Berwick, Jr.......................................... 50,148,416 153,741
Frederick P. Furth............................................. 49,963,136 339,021
</TABLE>
The continuing directors, whose terms of office did not expire at the
meeting, are Edward W. Gibbons, Harold M. Messmer, Jr., Frederick A. Richman,
Thomas J. Ryan and J. Stephen Schaub.
The amendment to the Restated Certificate of Incorporation was approved by
the following vote:
<TABLE>
<S> <C>
For: 48,315,850
Against: 1,874,155
Abstain: 112,152
</TABLE>
No other matters were voted upon at the annual meeting.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ------------- -------------------------------------------------------------------------------------------
<C> <S>
3.1 Restated Certificate of Incorporation.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1)
10.1 Third Amendment to Credit Agreement among the Registrant, NationsBank, N.A. and Bank of
America National Trust and Savings Association.
10.2 1993 Incentive 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: August 7, 1997
10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBITS DESCRIPTION NUMBERED PAGE
- ----------- ------------------------------------------------------------------------------------------- ---------------
<C> <S> <C>
3.1 Restated Certificate of Incorporation.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1)
10.1 Third Amendment to Credit Agreement among the Registrant, NationsBank, N.A. and Bank of
America National Trust and Savings Association.
10.2 1993 Incentive Plan.
11 Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
<PAGE>
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
ROBERT HALF INTERNATIONAL INC.,
A DELAWARE CORPORATION
Robert Half International Inc., a corporation organized and existing
under the laws of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: The present name of the Corporation is Robert Half
International Inc.
SECOND: The Corporation was originally incorporated under the name
Boothe Interim Corporation and subsequently changed its name to Boothe Financial
Corporation before taking its present name.
THIRD: The date of filing of the Corporation's original Certificate
of Incorporation with the Secretary of State of the State of Delaware was
October 18, 1979.
FOURTH: This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the Corporation's
Certificate of Incorporation as previously restated, amended or supplemented,
and there is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
FIFTH: This Restated Certificate of Incorporation has been duly
adopted by the Corporation's Board of Directors in accordance with the
applicable provisions of Section 245 of the General Corporation Law of the State
of Delaware.
SIXTH: The Certificate of Incorporation is hereby restated to read
in full as follows:
1. NAME. The name of the Corporation is Robert Half International
Inc.
2. REGISTERED OFFICE. The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
3. PURPOSES. The purpose of the Corporation is to engage in any
lawful act or activity for which
<PAGE>
corporations may be organized under the General Corporation Law of the State of
Delaware.
4. CAPITAL STOCK.
A. AUTHORIZED CAPITAL. The Corporation is authorized to
issue two classes of shares of stock to be designated respectively
"preferred" and "common." The total number of shares which the Corporation
is authorized to issue is one hundred sixty-five million (165,000,000), and
the aggregate par value of all shares that are to have a par value shall be
$165,000. The number of common shares authorized is one hundred sixty
million (160,000,000), each such share to have a par value of $.001, and the
number of preferred shares authorized is five million (5,000,000), each such
share to have a par value of $.001.
B. COMMON STOCK. The holders of shares of common stock
shall be entitled to receive such dividends as may be declared by the Board
of Directors. In the event of voluntary or involuntary liquidation of the
Corporation, the holders of shares of common stock shall be entitled to
receive pro rata all of the remaining assets of the Corporation available for
distribution to its stockholders after all amounts to which the holders of
shares of preferred stock are entitled have been paid or set aside in cash
for payment. Except as may be otherwise required by law or this Certificate
of Incorporation, each holder of record of each share of common stock shall
be entitled to one vote for each such share standing in his name on the books
of the Corporation.
C. PREFERRED STOCK. The designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the preferred stock shall be as follows:
The preferred stock may be issued from time to time in one or more
series. The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of preferred stock in one or
more series, with such voting powers, full or limited, or without voting powers
and with such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereon,
as shall be stated and expressed in the resolution or resolutions providing for
the issue thereof adopted by the Board of Directors, and as are not stated and
expressed in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the following:
<PAGE>
(a) the distinctive serial designation of such series and
the number of shares constituting a series;
(b) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or of any other series of capital stock, and whether such dividends
shall be cumulative or noncumulative;
(c) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(d) whether the shares are entitled to the benefit of a
sinking or retirement fund to be applied to the purchase or redemption of shares
of a series and, if so entitled, the amount of the fund and the manner of its
application, including the price or prices at which the shares may be redeemed
or purchased through the application of the fund;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for, shares of any other class or classes or of
any other series of any class or classes of capital stock of the Corporation,
and, if provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(f) the voting powers, full or limited, if any, of the
shares of the series;
(g) the restrictions, if any, on the issue or reissue of
any additional preferred stock;
(h) the rights of the holders of the shares of such series
upon the dissolution of, or upon the distribution of assets of, the Corporation.
There is hereby expressly granted to the Board of Directors of the
Corporation authority to increase or decrease the number of shares of any series
subsequent to the issue of shares of that series, but not below the number of
shares of that series then outstanding. In case the number of shares of any
series shall be so decreased, the shares constituting such decrease shall resume
the status which they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
D. SERIES A JUNIOR PARTICIPATING PREFERRED STOCK.
<PAGE>
SECTION 1. DESIGNATION AND AMOUNT. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of shares constituting
the Series A Preferred Stock shall be One Million (1,000,000). Such
number of shares may be increased or decreased by resolution of the Board of
Directors; PROVIDED, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any
shares of any series of preferred stock (or any similar stock) ranking prior
and superior to the Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference to the holders
of common stock, par value $0.001 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $0.25 or (b)
effective as of August 15, 1996 but thereafter subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In
the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately
<PAGE>
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $0.25 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(A) Effective as of August 15, 1996 but subject to
the provision for adjustment hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders
<PAGE>
of the Corporation. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of preferred stock or any
similar stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable or in arrears
in proportion to the
<PAGE>
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire
for consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of preferred stock and may be reissued as part
of a new series of preferred stock subject to the conditions and restrictions
on issuance set forth herein, in the Certificate of Incorporation, or in any
other Certificate of Designations creating a series of preferred stock or any
similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $25 per share, plus
an amount equal to accrued and
<PAGE>
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
effective August 15 , 1996 but thereafter subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and
all such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, effective August 15,
1996 but thereafter subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the
<PAGE>
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A
Preferred Stock shall not be redeemable.
SECTION 9. RANK. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Corporation's
preferred stock.
SECTION 10. AMENDMENT. The Certificate of Incorporation
of the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
5. MANAGEMENT OF BUSINESS. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
and the directors need not be elected by ballot unless required by the By-laws
of the Corporation.
6. BY-LAWS. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-laws of the Corporation.
7. CERTAIN TRANSACTIONS WITH RELATED CORPORATIONS. Except as
expressly provided in this Article 7, the affirmative vote or consent of the
holders of at least 66-2/3% of the outstanding shares of capital stock of the
Corporation entitled to vote in the election of directors shall be required to
authorize, adopt or approve any of the following:
(i) Any plan of merger or consolidation of the Corporation with
or into any Related Corporation or any affiliate of a Related Corporation or of
any Related Corporation or any affiliate of a Related Corporation into the
Corporation;
(ii) Any sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Corporation to or with any
Related Corporation or any affiliate of a Related Corporation, whether or not in
connection with the dissolution of the Corporation; or
(iii) Any issuance of capital stock or other securities of the
Corporation in exchange or payment for any properties or assets of any Related
Corporation or any
<PAGE>
affiliate of a Related Corporation in a transaction for which the approval of
stockholders of the Corporation is required by law or by any national securities
exchange on which outstanding securities of the Corporation are listed as a
prerequisite to the listing thereon of the additional securities being issued.
The provisions of this Article 7 shall not be applicable to any merger or
consolidation of the Corporation with or into, or any sale, lease, exchange or
other disposition of all or substantially all the property of the Corporation to
or with a corporation of which the Corporation owns, of record or beneficially,
a majority of the outstanding shares of all classes of stock entitled to vote in
the election of directors of that corporation. Should a majority of the
disinterested members of the Board of Directors so authorize by express
resolution, the affirmative vote or consent of the holders of at least a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote in the election of directors may authorize, adopt, or approve any of the
transactions specified in this Article 7. As used in this Article 7, the
following terms shall have the following meanings:
(i) "Related Corporation" shall mean any corporation which
together with its affiliates and associated persons owns or has presently
exercisable rights to acquire, as of the record date for the determination of
stockholders entitled to vote on the transaction in question, of record or
beneficially, directly or indirectly, 10% or more of the outstanding shares of
capital stock of the Corporation entitled to vote on such transaction;
(ii) An "affiliate" of a Related Corporation shall mean any
individual, partnership, joint venture, trust, corporation or other entity
which, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Related Corporation;
(iii) An "associated person" of a Related Corporation shall
mean any beneficial owner, directly or indirectly, of 10% or more of any class
of equity security of such Related Corporation or any of its affiliates; and
(iv) A "disinterested member" shall refer to a director who is
not a director, officer, associated person, or affiliate of a Related
Corporation or of an affiliate (other than the Corporation or any of its
subsidiaries) of a Related Corporation, and who is not a nominee of such a
director, officer, associated person, or affiliate of a Related Corporation.
Any determination made in good faith by the Board of Directors,
on the basis of information at the time
<PAGE>
available to it, as to whether any corporation is a Related Corporation or
whether any person is an affiliate or an associated person of a Related
Corporation, shall be conclusive and binding for all purposes of this Article 7.
This Article 7 shall not be altered, amended or repealed, and no
amendment of this Certificate of Incorporation inconsistent with any provision
of this Article 7 shall be adopted, unless the holders of at least 66-2/3% of
the outstanding shares of capital stock of the Corporation entitled to vote
thereon, shall have approved such alteration, amendment, repeal or adoption.
8. AMENDMENTS. Subject to Article 7, the Corporation reserves the
right to amend and repeal any provision contained in this Certificate of
Incorporation in the manner prescribed by the laws of the State of Delaware. All
rights herein conferred are granted subject to this reservation.
9. ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived any improper personal benefit. Any repeal or
modification of the preceding sentence by the stockholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
10. INDEMNIFICATION AND INSURANCE.
(a) RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director, officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
<PAGE>
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; PROVIDED, HOWEVER, that,
except as provided in paragraph (b) hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification conferred in this
Article shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition (hereinafter an "advancement of expenses"); PROVIDED,
HOWEVER, that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under this Article or otherwise (hereinafter an
"undertaking").
(b) RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
paragraph (a) of this Article is not paid in full by the Corporation within
sixty days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty days, the indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of
<PAGE>
an undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met the applicable standard of
conduct set forth in the Delaware General Corporation Law. Neither the failure
of the Corporation (including its Board of Directors, independent legal counsel,
or its stockholders) to have made a determination prior to commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right hereunder, or by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified or to such advancement of expenses
under this Article or otherwise shall be on the Corporation.
(c) NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification
and to the advancement of expenses conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, this Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
(e) INDEMNIFICATION OF AGENTS OF THE CORPORATION. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any agent of the Corporation to the fullest extent of the provisions of this
Article with respect to the indemnification and advancement of expenses of
directors, officers and employees of the Corporation.
IN WITNESS WHEREOF, Robert Half International Inc. has caused this
Restated Certificate of Incorporation to be signed by Kirk E. Lundburg, its
Vice President, and attested by Steven Karel, its Secretary, this 3rd day of
June, 1997.
<PAGE>
ROBERT HALF INTERNATIONAL INC.
By /S/KIRK E. LUNDBURG
-----------------------
Name: Kirk E. Lundburg
Title: Vice President
Attest:
By /s/STEVEN KAREL
-------------------
Name: Steven Karel
Title: Secretary
<PAGE>
Exhibit 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") dated as of
May 9, 1997, is made among Robert Half International Inc., a Delaware
corporation (the "COMPANY"); each of the Banks that is a party to the Credit
Agreement defined below (individually, a "BANK" and, collectively, the
"BANKS"); NationsBank, N.A. (formerly known as NationsBank of North Carolina,
N.A.), as Administrative Agent for the Banks (in such capacity, together with
its successors in such capacity, the "ADMINISTRATIVE AGENT"); and
NationsBank, N.A., and Bank of America National Trust and Savings
Association, each as Co-Agent and Co-Arranger (in such capacities, together
with their successors in each such capacity, the "CO-AGENTS").
WHEREAS, the Company, the Administrative Agent, the Co-Agents, and the
Banks are parties to the Credit Agreement dated as of November 1, 1993 as
amended through the Second Amendment thereto (the "CREDIT AGREEMENT"); and
WHEREAS, the Company has requested that the Credit Agreement, as in
effect on the date of this Amendment, be amended in the respects set forth
below, and the Administrative Agent, the Co-Agents and the Banks are willing
to accommodate the Company's request on the terms and conditions contained in
this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth below and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. DEFINED TERMS. Capitalized terms used but not defined in this
Amendment shall have the meanings assigned to such terms in the Credit
Agreement and the rules of interpretation set forth in Sections 1.02(a) and
1.04 of the Credit Agreement shall be applicable to this Amendment.
2. AMENDMENTS TO SECTION 1.01.
(a) Section 1.01 of the Credit Agreement is hereby amended by deleting
the definitions of "APPLICABLE COMMITMENT FEE PERCENTAGE", "APPLICABLE
ISSUANCE FEE PERCENTAGE" and "APPLICABLE MARGIN" in their entirety and
inserting in their respective places the following new definitions:
- 1 -
<PAGE>
"APPLICABLE COMMITMENT FEE PERCENTAGE" shall mean, with
respect to each Bank's Commitment at any time, the rate equal to the
percentages per annum set forth on the right in the table below when the
Total Indebtedness to Cash Flow Ratio for the quarter immediately
preceding the date of determination falls within the parameters listed
on the left in the table below:
APPLICABLE
TOTAL INDEBTEDNESS TO CASH FLOW RATIO FEE (% P.A.)
------------------------------------- ------------
Below 1.00 0.090
Between 1.00 and 2.00 (including 1.00) 0.125
Between 2.00 and 3.00 (including 2.00) 0.150
"APPLICABLE ISSUANCE FEE PERCENTAGE" shall mean, with respect
to each Letter of Credit at any time, the rate equal to the percentages
per annum set forth on the right in the table below when the Total
Indebtedness to Cash Flow Ratio for the quarter immediately preceding
the date of determination falls within the parameters listed on the left
in the table below:
APPLICABLE
TOTAL INDEBTEDNESS TO CASH FLOW RATIO FEE (% P.A.)
------------------------------------- ------------
Below 1.00 0.250
Between 1.00 and 2.00 (including 1.00) 0.375
Between 2.00 and 3.00 (including 2.00) 0.500
"APPLICABLE MARGIN" shall mean, with respect to each
Eurodollar Loan at any time, the percentages per annum set forth on the
right in the table below when the Total Indebtedness to Cash Flow Ratio
for the quarter immediately preceding the date of determination falls
within the parameters listed on the left in the table below:
APPLICABLE
TOTAL INDEBTEDNESS TO CASH FLOW RATIO MARGIN (% P.A.)
------------------------------------- ---------------
Below 1.00 0.250
Between 1.00 and 2.00 (including 1.00) 0.375
Between 2.00 and 3.00 (including 2.00) 0.500
(b) Section 1.01 of the Credit Agreement is further amended by deleting
the definitions of "FIXED CHARGES" and "FIXED CHARGES RATIO" in their
entirety.
- 2 -
<PAGE>
(c) Section 1.01 of the Credit Agreement is further amended by deleting
the definition of "MINIMUM NET WORTH" in its entirety and inserting in lieu
thereof the following new definition:
"MINIMUM NET WORTH" shall mean, as at any date, for the
Company and its Consolidated Subsidiaries (determined on a consolidated
basis in accordance with GAAP), an amount equal to $200,000,000, PLUS,
for each fiscal quarter after December 31, 1996, 50% of Net Income for
each such fiscal quarter. In determining Minimum Net Worth, there shall
be no adjustments for net losses, if any.
(d) The definition of the term "TERMINATION DATE" contained in
Section 1.01 of the Credit Agreement is hereby amended by deleting the
date "August 31, 2001" contained in line 1 of such definition and
substituting in lieu thereof the date "August 31, 2002".
3. AMENDMENT TO SECTION 2.04. Section 2.04(b) of the Credit
Agreement is hereby amended by deleting the table set forth in such
section and substituting in lieu thereof the following table:
(A) (B)
COMMITMENTS REDUCED
COMMITMENT REDUCTION TO THE FOLLOWING
DATE AMOUNTS ($)
-------------------- -------------------
August 31, 2002 $ 0
4. AMENDMENT TO SECTION 8.01. Section 8.01(i) of the Credit
Agreement is hereby deleted.
5. AMENDMENT TO SECTION 8.07. Section 8.07(f) of the Credit
Agreement is hereby amended by deleting the amount "$10,000,000"
contained in line 3 of such section and substituting in lieu thereof the
amount "$20,000,000".
6. AMENDMENT TO SECTION 8.12. Section 8.12 of the Credit
Agreement is hereby amended by deleting the text contained therein and
substituting in lieu thereof the following text:
"The Company will not permit the Total Indebtedness to Cash Flow
Ratio at any time to be greater than 3.0 to 1."
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<PAGE>
7. AMENDMENT TO SECTION 8.13. Section 8.13 of the Credit
Agreement is hereby amended by deleting the text contained therein and
substituting in lieu thereof the following text:
"[INTENTIONALLY LEFT BLANK]."
8. AMENDMENT TO SECTION 8.15. Section 8.15 of the Credit
Agreement is hereby amended by deleting the text contained therein and
substituting in lieu thereof the following text:
"[INTENTIONALLY LEFT BLANK]."
9. COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the Administrative Agent, the Co-Agents, the
Issuing Bank and the Banks that:
(a) the representations and warranties made by the Company in
the Credit Agreement and by each Obligor in each of the other Basic
Documents to which it is a party were true and correct when made;
(b) the representations and warranties made by the Company in
Section 7 of the Credit Agreement and by each Obligor in each of the
other Basic Documents to which it is a party are true and correct as of
the date of effectiveness of this Amendment as if made on such date (or,
if any such representation and warranty is expressly stated to have been
made as of a specific date, as of such specific date), except that,
solely for the purpose of this Section 9(b), (i) the representations and
warranties made by the Company in Section 7.02 of the Credit Agreement
shall be deemed to be made with respect to the most recent audited and
unaudited financial statements delivered by the Company pursuant to
Section 8.01 of the Credit Agreement, (ii) all references in Section 7
of the Credit Agreement to Schedule(s) I, III, V and VI to the Credit
Agreement shall be deemed to refer to the updated schedules attached as
Schedule(s) I, III, V and VI to this Amendment and (iii) all of the
Convertible Debentures have been redeemed or converted and none are
outstanding;
(c) upon the date of effectiveness of this Amendment no
Default under the Credit Agreement has occurred and is continuing;
(d) this Amendment constitutes the legal, valid and binding
obligation of the Company enforceable
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<PAGE>
against the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability; and
(e) none of the execution and delivery by the Company of this
Amendment, the execution and delivery by each Guarantor or Pledgor of each
Consent referred to in Section 10(b) of this Amendment, the consummation of
the transactions contemplated by this Amendment, nor compliance with the
terms of the Basic Documents (as so amended and so confirmed), (A) does or
will (i) conflict with, violate any provision of, or require any consent
under, the charter or by-laws of the Company or any Active Subsidiary, (ii)
violate any applicable Governmental Rule or conflict with, result in a
breach of, require any consent under or constitute a default under any
agreement or instrument (other than the Basic Documents) to which the
Company or any Active Subsidiary is a party or by which any of them or any
of their Property is bound or to which any of them is subject, (iii)
constitute a default under, or result in the acceleration or mandatory
prepayment of, any indebtedness evidenced by or termination of any such
agreement or instrument, or (iv) result in the creation or imposition of
any Lien upon any Property of the Company or any Active Subsidiary pursuant
to the terms of any such agreement or instrument, in each case which
violation, conflict, breach, default, Lien or failure to obtain consent
would have a Material Adverse Effect or (B) does or will result in a breach
of or constitute a default under the Credit Agreement or any other Basic
Document.
10. CONDITIONS TO EFFECTIVENESS. This Amendment shall be and become
effective upon the execution and delivery by the parties of this Amendment
and receipt by the Administrative Agent of (a) counterparts of this Amendment
executed by the Company, the Co-Agents and all of the Banks and (b)
counterparts of the Consent appended hereto (the "Consent"), executed by each
Guarantor and Pledgor.
11. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Except as specifically amended by this Amendment, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
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<PAGE>
(b) This Amendment shall be construed as one with the Credit
Agreement, and the Credit Agreement shall, where the context requires, be
read and construed throughout so as to incorporate this Amendment.
12. ENTIRE AGREEMENT. This Amendment, together with the Credit
Agreement and the other Basic Documents, and the documents referred to herein
or therein or executed in connection herewith or therewith supersede all
prior or contemporaneous agreements and understandings, written or oral,
among the parties with respect to the subject matter of this Amendment. No
party shall have any duties or responsibilities except those expressly set
forth in the Basic Documents (as from time to time amended, including by this
Amendment).
13. EXPENSES, ETC. Without limiting any provision of the Credit
Agreement, the Company agrees to pay or reimburse each of the Banks and the
Administrative Agent for (a) all reasonable out-of-pocket costs and expenses
of the Administrative Agent (including the reasonable fees and expenses of
Milbank, Tweed, Hadley & McCloy, counsel to the Banks), and reasonable costs
and expenses of inside counsel to BofA, in connection with the negotiation,
preparation, execution and delivery of this Amendment and (b) all other costs
and expenses for which the Banks and the Administrative Agent are entitled to
be reimbursed pursuant to Section 11.03 of the Credit Agreement.
14. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of its parties and their respective successors and
permitted assigns.
15. SEVERABILITY. Any provision of this Amendment that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Amendment, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
16. CAPTIONS. The captions and section headings appearing in this
Amendment are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Amendment.
17. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this
Amendment by signing any such counterpart.
- 6 -
<PAGE>
18. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
CALIFORNIA; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE BANKS SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA AND OF ANY CALIFORNIA STATE COURT SITTING IN
SAN FRANCISCO, CALIFORNIA, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AMENDMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the day and year first above written.
ROBERT HALF INTERNATIONAL INC.
By: /s/ M. Keith Waddell
------------------------------------
Title: Sr. Vice President
NATIONSBANK, N.A., as Administrative
Agent, Co-Agent, Co-Arranger and a Bank
By: /s/ MICHELE SHAFROTH
------------------------------------
Title: Senior Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent,
Co-Arranger and a Bank
By: /s/ CHRIS GIANNOTTI
------------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, as a Bank
By: /s/ RUSSELL A. COLOMBO
------------------------------------
Title: Vice President
-8-
<PAGE>
EXHIBIT 10.2
ROBERT HALF INTERNATIONAL INC.
1993 INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE MAY 7, 1997)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
1993 Incentive Plan (the "Plan") are: (a) to improve individual employee
performance by providing long-term incentives and rewards to key employees of
the Company, (b) to assist the Company in attracting, retaining and motivating
key employees with experience and ability, and (c) to align the interests of
such employees with those of the Company's stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "ADMINISTRATOR" means either the Board of Directors or a committee
of the Board of Directors of the Company, the composition and the size of
which shall cause such committee to satisfy the requirements of Rule 16b-3
of the Exchange Act with respect to officers and directors.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CHANGE IN CONTROL" means the occurrence of any of the following:
(i) Any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored
by the Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation of
which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party has
acquired such securities not with the purpose nor with the effect of changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (A) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company, (B)
making, or in any way participating in, any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the Exchange Act) to
vote any voting securities of the Company (including, without limitation, any
such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking
to advise or influence any party with respect to the voting of any voting
securities of the Company, directly or indirectly, relating to a merger or
other business combination involving the Company or the sale or transfer of
substantial assets of the Company, (C) forming, joining or in any way
participating in any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination involving
the Company or the sale or transfer of any substantial assets of the Company,
or (D) otherwise acting, alone or in concert with others, to seek control of
the Company or to seek to control or influence the management or policies of
the Company.
(ii) The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
(iii) A change in the composition of the Board of Directors of
the Company occurring within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company
as of the date hereof, or (B) are elected, or nominated for election, to the
Board of Directors of the Company with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the
election of directors to the Company). As a result of or in connection with
any cash tender offer, merger, or other business combination, sale of assets
or contested election, or combination of the foregoing, the persons who were
directors of the Company just prior to such event shall cease within one year
to constitute a majority of the Board.
(iv) The Company's stockholders approve a definitive agreement
providing for a transaction in which the Company will cease to be an
independent publicly owned corporation.
(v) The stockholders of the Company approve a definitive
agreement (A) to merge or consolidate the Company with or into another
corporation in which the holders of the Stock immediately before such merger
or reorganization will not, immediately following such merger or
reorganization, hold as a group on a fully-diluted basis both the ability to
elect at least a majority of the directors of the surviving corporation and
at least a majority in value of the surviving corporation's outstanding
equity securities, or (B) to sell or otherwise dispose of all or
substantially all of the assets of the Company.
(d) "COMMON STOCK" or "STOCK" means Robert Half International Inc.
Common Stock, par value $.001 per share.
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<PAGE>
(e) "COMPANY" means Robert Half International Inc., its divisions and
direct and indirect subsidiaries.
(f) "CONTINUOUS EMPLOYMENT" means employment with the Company or any
Subsidiary without any termination or leave of absence, except for a leave
of absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
(g) "DISABILITY" or "DISABLED" shall mean (i) a physical or mental
condition which, in the judgment of the Administrator based on competent
medical evidence satisfactory to the Administrator (including, if required
by the Administrator, medical evidence obtained by an examination conducted
by a physician selected by the Administrator), renders Holder unable to
engage in any substantial gainful activity for the Company and which
condition is likely to result in death or to be of long, continued and
indefinite duration, or (ii) a judicial declaration of incompetence.
(h) "ELIGIBLE EMPLOYEE" means an employee of the Company or any
Subsidiary (including an employee who is a director and/or officer) who, as
determined by the Administrator in its sole discretion, has and exercises
management functions and responsibilities.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "FAIR MARKET VALUE" means the closing sales price on the New York
Stock Exchange or the NASDAQ National Market System, as the case may be, on
the date the value is to be determined as reported in THE WALL STREET
JOURNAL (Western Edition). If there are no trades on such date, the closing
price on the latest preceding business day upon which trades occurred shall
be the Fair Market Value. If the Stock is not listed in the New York Stock
Exchange or quoted on the NASDAQ National Market System, the Fair Market
Value shall be determined in good faith by the Administrator.
(k) "GRANT" shall mean an Option or a Restricted Stock Award.
(l) "GRANT DATE" means the date a Grant is made under the Plan.
(m) "HOLDER" means the recipient of a Grant pursuant to this Plan.
(n) "ISSUE DATE" means the date on which shares of Stock subject to a
Restricted Stock Award are issued or transferred by the Company to the
account of an Eligible Employee who has received such grant.
(o) "MINIMUM WITHHOLDING TAXES" means any applicable federal, state and
local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject
to a Restricted Stock Award, (ii) the exercise of an Option, or (iii) the
making of an election under Section 83(b) of the Internal Revenue Code with
respect to a Restricted Stock Award.
(p) "OFFER" means a tender offer or an exchange offer for the Company's
Stock.
(q) "OPTION" or "STOCK OPTION" means a right granted under the Plan to a
Holder to purchase shares of Common Stock at a fixed price for a specified
period of time.
(r) "OPTION PRICE" means the price at which a share of Common Stock
covered by an Option granted hereunder may be purchased.
(s) "OPTIONEE" means an Eligible Employee who has received a Stock
Option granted under the Plan.
(t) "RESTRICTED STOCK AWARD" means a grant described in Section 6 of the
Plan.
(u) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(v) "SUBSIDIARY" means a "SUBSIDIARY" corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended.
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<PAGE>
(w) "VESTED" means that portion of a Grant with respect to which the
Vesting Date has arrived or passed.
(x) "VESTING DATE" means the date specified in Section 5 or 6 hereof, as
the case may be, or such other date as shall be established by the
Administrator or otherwise on the Grant Date or thereafter.
(y) "VOTING SHARES" means the outstanding shares of the Company entitled
to vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which Grants may be
made during any calendar year shall be that number which is equal to 1.5% of the
number of issued and outstanding shares of Common Stock of the Company
(excluding treasury shares) as of January 1 of such year (January 1, 1993, in
the case of the first year). Any shares of Common Stock covered by Options which
have terminated or expired prior to exercise or have been cancelled without
value shall not be counted against the annual limit and shall be available for
further grants hereunder and shares constituting the portion of a Restricted
Stock Award that is forfeited before any dividends are paid upon such forfeited
shares shall not be counted against the annual limit and shall be available for
further grants hereunder. The foregoing number of shares available for Grants
shall be subject to any adjustments which may be made pursuant to Section 12
hereof. Shares of Stock used for Options may be either shares of authorized but
unissued Common Stock or treasury shares or both. Shares of Stock used for
Restricted Stock Awards shall be treasury shares to the extent that treasury
shares are available, and, if no treasury shares are available, Restricted Stock
Awards shall be authorized but unissued Common Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in its sole
discretion, but subject to all of the provisions of the Plan, determine which
Eligible Employees will be given Grants under the Plan, the number of Options or
shares of Restricted Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Grant. In making such
determinations, the Administrator shall take into account the nature of services
rendered and to be rendered by the respective recipients, their present and
potential contribution to the Company's success and such other factors as the
Administrator in its discretion deems relevant to the accomplishment of the
purposes of the Plan. In any year, the Administrator may approve Options to
Eligible Employees subject to differing terms and conditions and Restricted
Stock Awards to Eligible Employees subject to differing terms and conditions.
During any calendar year, the number of shares of Stock with respect to which
Options or Restricted Stock are granted to any one individual may not exceed 75%
of the number of shares of Stock available for Grants during 1994, subject to
adjustment pursuant to Section 12 hereof.
5. OPTIONS. Each Option granted hereunder shall be in writing and shall
contain such terms and conditions as the Administrator may determine, subject to
the following:
(a) PRICE. The Option Price shall be not less than 85% of the Fair
Market Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE. Options granted hereunder shall have a term of
no longer than ten years from the Grant Date. An Option may be exercised
only as to those portions of the Option that have Vested. Stock Options must
be exercised for full shares of Common Stock.
(c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be
deemed an Incentive Stock Option (as such term is defined in the Internal
Revenue Code) unless (a) such Option is designated as an Incentive Stock
Option at the time of grant by the Administrator and (b) such Option
otherwise meets the requirements for Incentive Stock Options specified in
the Internal Revenue Code. However, no Option designated as an Incentive
Stock Option shall contain any restrictions upon the ability of the Holder
to dispose of Stock acquired upon the exercise thereof other than as
provided elsewhere in this Plan. During the life of the Plan, the total
number of
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<PAGE>
shares for which Incentive Stock Options may be granted may not exceed ten
times the number of shares available for Grants under the Plan during the
first calendar year in which the Plan is in effect.
(d) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Option shall Vest as to twenty-five percent (25%) of the
Stock covered by such Option on each of the first through fourth
anniversaries of the Grant Date. Notwithstanding the foregoing, the
Administrator may accelerate Vesting, in whole or in part, under such terms
and conditions as the Administrator deems appropriate.
(e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give
written notice of exercise to the Company, specifying the number of shares
of Common Stock to be purchased and identifying the specific Options that
are being exercised. From time to time the Administrator may establish
procedures relating to such exercises. An Option is exercisable during a
Holder's lifetime only by the Holder or, with respect to options that are
not designated as Incentive Stock Options, under such other circumstances as
may be permitted by Rule 16b-3, or any successor rule, under the Exchange
Act and all interpretations of the staff of the Securities and Exchange
Commission thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash,
check or delivery of shares of Common Stock that have been owned by Holder
for at least six months. If all or a portion of the purchase price is paid
by delivery of shares, the shares shall be valued at the Fair Market Value
of such shares on the date of exercise. In addition, unless the
Administrator determines otherwise at the time of grant, payment of the
Option Price and of Minimum Withholding Taxes may be made by (i) full
recourse promissory note (secured or unsecured), payable on such terms and
bearing such interest as the Administrator may determine or (ii) delivery
(on a form acceptable to the Administrator) of an irrevocable direction to a
securities broker to sell shares of Common Stock and to deliver part of the
sales proceeds to the Company in payment of the full exercise price and
Minimum Withholding Taxes and receipt of written confirmation from the
securities broker of receipt of such irrevocable direction, the number of
shares sold, the price at which sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable except
by will, by the laws of descent and distribution, or, with respect to
options that are not designated as Incentive Stock Options, pursuant to a
domestic relations order or under such other circumstances as the
Administrator may determine.
6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under the
Plan shall contain the following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be determined by the
Administrator at the time of grant.
(a) RIGHTS WITH RESPECT TO SHARES OF STOCK. Upon written acceptance by
the Eligible Employee of restrictions and other terms and conditions
described in the Plan and in the instrument evidencing such Restricted Stock
Award, the Eligible Employee shall be a Holder, and the Company shall cause
to be issued or transferred to the name of the Holder a certificate or
certificates for the number of shares of Stock granted. From and after the
Issue Date, the Holder shall have absolute ownership of such shares of
Stock, including the right to vote and to receive dividends thereon, subject
to the terms, conditions and restrictions described in the Plan and in the
instrument evidencing the grant of such Restricted Stock Award.
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<PAGE>
(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock
Award may not be sold, assigned, pledged, transferred or otherwise conveyed
in any manner until the Vesting Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator on the
Grant Date, each Restricted Stock Award shall Vest as to twenty-five percent
(25%) of the Stock covered by such grant on each of the first through fourth
Vesting Dates which occur following the related Grant Date of such
Restricted Stock Award. Notwithstanding the foregoing, the Administrator may
accelerate the lapsing of restrictions on a Restricted Stock Award, in whole
or in part under such terms and conditions as the Administrator deems
appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions herein
to the contrary notwithstanding, a Restricted Stock Award shall
automatically become Vested upon (a) the Death or Disability of the Holder
or (b) the occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder
granted a Restricted Stock Award shall represent in writing that such Holder
acknowledges that, with respect to each Restricted Stock Award held by such
Holder, (i) Minimum Withholding Taxes shall be due with respect to shares of
Stock covered by such award, (ii) payment of Minimum Withholding Taxes to
the Company is the responsibility of Holder and (iii) payment of such
Minimum Withholding Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any
Holder properly elects within thirty (30) days of the Grant Date to include
in gross income for federal income tax purposes an amount equal to the fair
market value of the shares of Stock on the Grant Date, such Holder shall pay
in cash to the Company in the calendar month of such Grant Date, or make
arrangements satisfactory to the Administrator to pay to the Company, any
Minimum Withholding Taxes required to be withheld with respect to such
shares.
(g) CONSIDERATION. Recipients of Restricted Stock Awards made in
treasury shares shall not be required to pay any consideration to the
Company. Recipients of Restricted Stock Awards made in the form of
previously unissued shares shall be required to pay such minimum
consideration, if any, as may be required by applicable law. The
Administrator shall determine the form of consideration at the time of the
award, which may include services rendered prior to the award.
(h) PERFORMANCE CONDITIONS. If so determined by the Administrator, any
grant of Restricted Shares shall be made subject to a Performance Condition
in addition to any vesting requirements imposed upon such grant. Such
Performance Condition shall operate as specified in this paragraph (h).
(1) As used in this paragraph (h), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
EPS means fully diluted earnings per share, determined in
accordance with generally accepted accounting principles. For
purposes of the foregoing sentence, earnings shall mean income before
extraordinary items, discontinued operations and cumulative effect of
changes in accounting principles and after full accrual for the
bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Preliminary EPS
by Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
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<PAGE>
MEASUREMENT YEAR means (a) in the case of a grant made in the
first fiscal quarter of a fiscal year, that fiscal year or (b) in the
case of a grant made in the second, third or fourth quarters of a
fiscal year, the subsequent fiscal year.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
NINE-MONTH PERIOD means the first three fiscal quarters of the
Measurement Year.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to a Performance Condition.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month
Period.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to a Performance Condition.
(2) A Restricted Stock Award shall be subject to a Performance
Condition only if the Administrator makes such a determination on the
Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to a Performance
Condition, the Administrator shall, not later than the end of the second
calendar month of the Measurement Year, determine the Target EPS for such
award.
(4) After the public release by the Company of its unaudited results
for the third fiscal quarter of the Measurement Year, the Chief Financial
Officer shall, with respect to each Restricted Stock Award made subject
to a Performance Condition, (a) calculate the Preliminary EPS, (b)
determine the Multiplier, (c) calculate the Final Restricted Stock Award,
and (d) deliver such calculation to the Administrator.
(5) The Administrator shall, prior to the end of the Measurement
Year, review the information submitted by the Chief Financial Officer and
certify, in writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each Vesting Date
the percentage of the Final Restricted Stock Award that vests shall be
the same as the percentage of the Original Restricted Stock Award that
would have vested had no shares been forfeited as a result of the
performance condition.
(7) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date by
reason of death, Disability or a Change in Control, then the Performance
Condition shall be cancelled and none of such shares shall be subject to
reduction or forfeiture as provided by the Performance Condition. Such
shares shall be released to Holder in accordance with the terms of this
plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date for any
reason other than death, Disability or a Change in Control, no shares
shall be released to the Holder until after the Certification Date. No
such vesting prior to the Certification Date shall in any way be deemed a
6
<PAGE>
satisfaction, waiver or cancellation of the Performance Condition, and
such Restricted Stock Award shall remain subject to reduction and
forfeiture as provided by the Performance Condition.
(i) ALTERNATIVE PERFORMANCE CONDITIONS. If so determined by the
Administrator, any grant of Restricted Shares shall be made subject to an
Alternative Performance Condition in addition to any vesting requirements
imposed upon such grant. Such Alternative Performance Condition shall
operate as specified in this paragraph (i).
(1) As used in this paragraph (i), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes
its written certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the
Performance Period, determined in accordance with generally accepted
accounting principles. For purposes of the foregoing sentence,
earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles
and after full accrual for the bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Actual EPS by
Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier
and the Original Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS
Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the
EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio
is less than 0.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares
initially granted pursuant to a Restricted Stock Award made subject
to an Alternative Performance Condition.
PERFORMANCE PERIOD means the period of service to which the
Alternative Performance Condition relates.
TARGET EPS means the EPS goal set with respect to a Restricted
Stock Award made subject to an Alternative Performance Condition.
(2) A Restricted Stock Award shall be subject to an Alternative
Performance Condition only if the Administrator makes such a
determination on the Grant Date or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to an Alternative
Performance Condition, the Administrator shall establish the Performance
Period and Target EPS for such award no later than the time permitted by
section 162(m) of the Internal Revenue Code.
(4) After the public release by the Company of its unaudited results
for the last fiscal quarter of the Performance Period, the Chief
Financial Officer shall, with respect to each Restricted Stock Award made
subject to an Alternative Performance Condition, (a) calculate the Actual
EPS, (b) determine the Multiplier, (c) calculate the Final Restricted
Stock Award, and (d) deliver such calculation to the Administrator.
(5) The Administrator shall review the information submitted by the
Chief Financial Officer and certify, in writing, each Final Restricted
Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than
the Original Restricted Stock Award, the number of shares of the Original
Restricted Stock Award representing the difference shall be forfeited by
the Holder. The Final Restricted Stock Award shall bear the same vesting
schedule as the Original Restricted Stock Award, and on each
7
<PAGE>
Vesting Date the percentage of the Final Restricted Stock Award that
vests shall be the same as the percentage of the Original Restricted
Stock Award that would have vested had no shares been forfeited as a
result of the Alternative Performance Condition.
(7) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date by reason of death, Disability or a Change in Control,
then the Alternative Performance Condition shall be cancelled and none of
such shares shall be subject to reduction or forfeiture as provided by
the Alternative Performance Condition. Such shares shall be released to
Holder in accordance with the terms of this plan relating to vested
shares.
(8) If all or a portion of a Restricted Stock Award made subject to
an Alternative Performance Condition shall vest prior to the
Certification Date for any reason other than death, Disability or a
Change in Control, no shares shall be released to the Holder until after
the Certification Date. No such vesting prior to the Certification Date
shall in any way be deemed a satisfaction, waiver or cancellation of the
Alternative Performance Condition, and such Restricted Stock Award shall
remain subject to reduction and forfeiture as provided by the Alternative
Performance Condition.
7. WITHHOLDING TAXES. In order to enable the Company to meet
any applicable foreign, federal (including FICA), state and local
withholding tax requirements, a Holder shall be required to pay the
Minimum Withholding Taxes. No share of stock will be delivered to any
Holder until Minimum Withholding Taxes have been paid. At the option of the
Holder, withholding taxes may be paid by any combination of (a) cash, (b)
reduction in the number of shares deliverable to Holder (in the case of an
Option) or by surrendering a portion of the Restricted Stock Award to
the Company (in either case "Share Reduction"), (c) delivery to the Company
of other shares of Common Stock owned by Holder ("Share Delivery") or (d) any
other means approved or ratified by the Administrator. If withholding taxes
are paid by Share Reduction or Share Delivery, such shares shall be
valued at the Fair Market Value as of the date of exercise or vesting. A
Holder may elect to have additional shares withheld or surrendered pursuant
to Share Reduction or Share Delivery above the amount required to
satisfy Minimum Withholding Taxes. However, total combined Share Reduction
and Share Delivery may not exceed the total taxes that Holder will have to
pay (assuming Federal and state taxes are imposed at his marginal rate) by
reason of the exercise or vesting. In addition, any use of Share Delivery
in excess of Minimum Withholding Taxes must be effected with shares that have
been held at least six months. In the event that Minimum Withholding Taxes
are not paid by Holder, to the extent permitted by law the Company shall
have the right, but not the obligation, to cause such withholding taxes to
be satisfied by Share Reduction or by offsetting such withholding taxes
against amounts otherwise due from the Company to the Holder.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as any
restrictions or obligations imposed pursuant hereto shall apply to a share of
Stock (including, but not limited to, the restrictions or obligations imposed
pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each
certificate evidencing such share shall bear an appropriate legend referring to
the terms, conditions and restrictions. In addition, the Company may instruct
its transfer agent that shares of Stock evidenced by such certificates may not
be transferred without the written consent of the Company. Any attempt to
dispose of such shares of Stock in contravention of such terms, conditions and
restrictions shall be invalid. Certificates representing shares that have not
Vested or with respect to which Minimum Withholding Taxes have not been paid
will be held in custody by the Company or such bank or other institution
designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous
Employment with the Company or any Subsidiary shall terminate for any reason,
then, with respect to any portion of a Grant that has not Vested prior to or
concurrently with such termination (a) in the case of an Option, all rights to
such portion that has not Vested shall terminate and (b) in the case of a
Restricted Stock Award, all rights to the shares covered by any portion thereof
that has not Vested shall be forfeited; provided, however, that the
Administrator, in its sole discretion within ninety (90) days of such
termination of Continuous Employment, may notify the Holder in writing that the
Holder's rights in such portion that has not Vested will not terminate or be
forfeited and that the Holder shall continue to be the owner thereof, subject to
such continuing restrictions as the Administrator may prescribe in
8
<PAGE>
such notice. Options then held by the Holder which are Vested at the date of
termination shall continue to be exercisable by the Holder, or, if applicable,
Holder's estate, until the earlier of 90 days after such date or the expiration
of such Options in accordance with their terms. Notwithstanding the foregoing,
(i) the Administrator may in its sole discretion extend the period during which
an Option may be exercised following termination of employment at any time,
provided that any such extension does not exceed the Option's normal termination
date, and (ii) if exercise of an Option during the 90-day period described in
the previous sentence would subject the Holder to liability under Section 16 of
the Exchange Act, such Option shall be exercisable until the earliest of (a) its
normal termination date and (b) seven months after the last transaction in
Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the Administrator,
which shall have full power and authority to administer and interpret the Plan
and to adopt such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan as the Administrator deems necessary or
advisable. The Administrator's powers include, but are not limited to (subject
to the specific limitations described herein), authority to determine the
employees who shall receive Grants under the Plan, determine the size and
applicable terms and conditions of Grants to be made to such employees,
determine the time when Grants will be made and authorize Grants to Eligible
Employees.
The Administrator's interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Grants hereunder, shall be final, binding and
conclusive on all interested parties. The Administrator may delegate ministerial
functions hereunder, such delegation to be subject to such terms and conditions
as the Administrator in its discretion shall determine. The Administrator may as
to all questions of accounting rely conclusively upon any determinations made by
the independent public accountants of the Company.
11. COMPLIANCE WITH SECURITIES LAWS. No Option may be exercised and no
Stock may be issued pursuant to an Option or transferred pursuant to a
Restricted Stock Award unless the Administrator shall determine that such
exercise, issuance or transfer complies with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, applicable
state securities laws, and rules and regulations promulgated under each of the
foregoing, and the requirements of any stock exchange upon which the Stock may
then be listed or quotation system upon which the Stock may be quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance. If the Stock subject to this Plan is not registered under the
Securities Act and under applicable state securities laws, the Administrator may
require that the Holder deliver to the Company such documents as counsel for the
Company may determine are necessary or advisable in order to substantiate
compliance with applicable securities laws and the rules and regulations
promulgated thereunder.
12. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination, spin-off
or exchange of shares or other similar corporate change, appropriate adjustments
shall be made by the Administrator in the number of shares of Stock subject to
this Plan, the number of shares of Stock covered by each Grant and, in the case
of Options, the Option Price of such Option. Any such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be conclusive and binding for all purposes of the Plan. Any new or
additional Stock to which a Holder of a Restricted Stock Award may be entitled
shall be subject to all the terms and conditions set forth in Section 6 of this
Plan. If fractional shares become due to any Holder as a result of any
adjustment, the Company may, at its option, pay cash in lieu thereof.
13. NO RIGHTS TO GRANTS OR EMPLOYMENT. No employee or other person shall
have any claim or right to a Grant under the Plan. Receipt of a Grant under the
Plan shall not give an employee any
9
<PAGE>
rights to receive any other Grant under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any Subsidiary.
14. RIGHTS AS SHAREHOLDER. A Holder under the Plan shall have no rights as
a holder of Common Stock with respect to Options granted hereunder, unless and
until certificates for shares of Common Stock are issued to such Holder.
15. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any grant under the Plan.
16. NO ASSIGNMENT. Except as specifically provided by law (including the
laws of descent and distribution) and elsewhere herein, no right or benefit
under, or interest in, the Plan shall be subject to assignment, and no such
right, benefit or interest shall be subject to attachment or legal process for
or against Holder or his or her beneficiaries, as the case may be.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such persons.
19. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
20. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Grants
theretofore made hereunder. The Administrator may amend or cancel the terms and
conditions of any outstanding Grant, determine whether cash will be paid or
Grants will be made in replacement of, or as alternatives to, outstanding Grants
or grants under any other incentive compensation plan; provided, however, that
no such change shall be adverse to the Holder thereof without such Holder's
consent.
21. EFFECTIVE DATE, TERMINATION. This Plan shall become effective upon
approval by the stockholders of the Company, and shall remain in effect until
terminated by the Board of Directors or Administrator.
10
<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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income......................................................... $ 22,210 $ 14,224 $ 42,130 $ 27,463
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number of Shares Outstanding:
Primary:
Common stock................................................... 60,342 58,531 60,228 58,260
Common stock equivalents --
Stock options (A)............................................ 2,063 2,216 2,124 2,099
--------- --------- --------- ---------
Primary shares outstanding..................................... 62,405 60,747 62,352 60,359
--------- --------- --------- ---------
--------- --------- --------- ---------
Fully Diluted:
Common stock................................................... 60,342 58,531 60,228 58,260
Common stock equivalents --
Stock options (A)............................................ 2,238 2,235 2,332 2,296
--------- --------- --------- ---------
Fully diluted shares outstanding............................... 62,580 60,766 62,560 60,556
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income Per Share:
Primary........................................................ $0.36 $0.23 $0.68 $0.45
Fully diluted.................................................. $0.35 $0.23 $0.67 $0.45
</TABLE>
- ------------------------
(A) The treasury stock method was used to determine the weighted average of
shares of common stock equivalents outstanding during the periods.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 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> JUN-30-1997 DEC-31-1996
<CASH> 106,431 80,181
<SECURITIES> 0 0
<RECEIVABLES> 160,208 129,399
<ALLOWANCES> 5,629 4,016
<INVENTORY> 0 0
<CURRENT-ASSETS> 276,779 217,748
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 489,571 416,012
<CURRENT-LIABILITIES> 106,461 86,561
<BONDS> 5,377 5,069
0 0
0 0
<COMMON> 60 60
<OTHER-SE> 361,681 308,385
<TOTAL-LIABILITY-AND-EQUITY> 489,571 416,012
<SALES> 0 0
<TOTAL-REVENUES> 594,645 898,635
<CGS> 0 0
<TOTAL-COSTS> 358,611 545,343
<OTHER-EXPENSES> 2,460 5,405
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (1,686) (2,243)
<INCOME-PRETAX> 71,390 103,645
<INCOME-TAX> 29,260 42,543
<INCOME-CONTINUING> 42,130 61,102
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 42,130 61,102
<EPS-PRIMARY> .68 1.00
<EPS-DILUTED> .67 1.00
</TABLE>
