<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
.
------------------------
COMMISSION FILE NUMBER 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1648752
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2884 SAND HILL ROAD
SUITE 200
MENLO PARK, CALIFORNIA
(Address of principal executive 94025
offices) (zip-code)
Registrant's telephone number, including area code: (650) 234-6000
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) had been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 1998:
91,492,294 shares of $.001 par value Common Stock
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<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS:
Cash and cash equivalents........................................................... $ 166,819 $ 131,349
Accounts receivable, less allowances of $9,393 and $7,164........................... 233,444 186,899
Other current assets................................................................ 31,385 15,757
------------- ------------
Total current assets............................................................ 431,648 334,005
Intangible assets, less accumulated amortization of $51,413 and $46,001............. 177,945 177,425
Property and equipment, less accumulated depreciation of $43,648 and $29,962........ 81,868 49,937
------------- ------------
Total assets.................................................................... $ 691,461 $ 561,367
------------- ------------
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses............................................... $ 23,081 $ 20,285
Accrued payroll costs............................................................... 122,577 95,925
Income taxes payable................................................................ 8,586 2,258
Current portion of notes payable and other indebtedness............................. 1,346 3,627
------------- ------------
Total current liabilities....................................................... 155,590 122,095
Notes payable and other indebtedness, less current portion.......................... 3,645 4,530
Deferred income taxes............................................................... 25,846 15,942
------------- ------------
Total liabilities............................................................... 185,081 142,567
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value authorized 260,000,000 shares; issued and outstanding
91,499,067 and 91,208,029 shares.................................................. 91 91
Capital surplus..................................................................... 246,332 196,888
Deferred compensation............................................................... (43,256) (44,276)
Accumulated other comprehensive income.............................................. (1,026) (1,347)
Retained earnings................................................................... 304,239 267,444
------------- ------------
Total stockholders' equity...................................................... 506,380 418,800
------------- ------------
Total liabilities and stockholders' equity...................................... $ 691,461 $ 561,367
------------- ------------
------------- ------------
</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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ------------------------
1998 1997 1998 1997
---------- ---------- ------------ ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues........................................... $ 470,650 $ 339,754 $ 1,314,099 $ 934,399
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees.................. 280,617 204,554 785,402 563,165
---------- ---------- ------------ ----------
Gross margin................................................... 190,033 135,200 528,697 371,234
Selling, general and administrative expenses................... 131,972 93,411 367,497 257,281
Amortization of intangible assets.............................. 1,264 1,233 3,727 3,693
Interest income................................................ (1,733) (1,154) (4,425) (2,840)
---------- ---------- ------------ ----------
Income before income taxes..................................... 58,530 41,710 161,898 113,100
Provision for income taxes..................................... 23,556 17,079 65,594 46,339
---------- ---------- ------------ ----------
Net income..................................................... $ 34,974 $ 24,631 $ 96,304 $ 66,761
---------- ---------- ------------ ----------
---------- ---------- ------------ ----------
Basic net income per share..................................... $ .38 $ .27 $ 1.05 $ .74
Diluted net income per share................................... $ .37 $ .26 $ 1.01 $ .71
</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>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1998 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 91,208 89,622
Issuances of restricted stock........................................................... 279 483
Repurchases of common stock............................................................. (1,298) (413)
Exercises of stock options.............................................................. 1,273 1,263
Issuance of common stock for acquisitions............................................... 37 14
---------- ----------
Balance at end of period.............................................................. 91,499 90,969
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 91 $ 90
Repurchases of common stock............................................................. (1) --
Exercises of stock options.............................................................. 1 1
---------- ----------
Balance at end of period.............................................................. $ 91 $ 91
---------- ----------
---------- ----------
CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 196,888 $ 140,443
Issuances of restricted stock--excess over par value.................................... 13,250 17,251
Exercises of stock options--excess over par value....................................... 7,285 4,885
Issuance of common stock for acquisition................................................ 2,000 400
Tax benefits from exercises of stock options and restricted stock vesting............... 26,909 15,778
---------- ----------
Balance at end of period.............................................................. $ 246,332 $ 178,757
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (44,276) $ (26,802)
Issuances of restricted stock........................................................... (13,250) (17,251)
Amortization of deferred compensation................................................... 14,270 8,721
---------- ----------
Balance at end of period.............................................................. $ (43,256) $ (35,332)
---------- ----------
---------- ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period.......................................................... $ (1,347) $ 23
Translation adjustments................................................................. 321 (1,102)
---------- ----------
Balance at end of period.............................................................. $ (1,026) $ (1,079)
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 267,444 $ 194,691
Repurchases of common stock--excess over par value...................................... (59,509) (10,926)
Net income.............................................................................. 96,304 66,761
---------- ----------
Balance at end of period.............................................................. $ 304,239 $ 250,526
---------- ----------
---------- ----------
COMPREHENSIVE INCOME:
Net income.............................................................................. $ 96,304 66,761
Translation adjustments................................................................. 321 (1,102)
---------- ----------
Total comprehensive income............................................................ $ 96,625 $ 65,659
---------- ----------
---------- ----------
</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>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1998 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................................................ $ 96,304 $ 66,761
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets....................................................... 3,727 3,693
Depreciation expense.................................................................... 13,671 8,995
Provision for deferred income taxes..................................................... 2,220 (4,946)
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable....................................................... (45,959) (47,158)
Increase in accounts payable, accrued expenses and accrued payroll costs.............. 29,951 29,900
Increase in income taxes payable...................................................... 6,328 3,959
Change in other assets, net of change in other liabilities............................ 8,471 9,014
---------- ----------
Total adjustments..................................................................... 18,409 3,457
---------- ----------
Net cash and cash equivalents provided by operating activities............................ 114,713 70,218
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired...................................................... (4,187) (3,338)
Capital expenditures.................................................................... (47,520) (24,550)
---------- ----------
Net cash and cash equivalents used in investing activities................................ (51,707) (27,888)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock............................................................. (59,510) (10,926)
Principal payments on notes payable and other indebtedness.............................. (2,221) (1,454)
Proceeds and tax benefits from exercise of stock options and restricted stock vesting... 34,195 20,664
---------- ----------
Net cash and cash equivalents (used in) provided by financing activities.................. (27,536) 8,284
---------- ----------
Net increase in cash and cash equivalents................................................. 35,470 50,614
Cash and cash equivalents at beginning of period.......................................... 131,349 80,181
---------- ----------
Cash and cash equivalents at end of period................................................ $ 166,819 $ 130,795
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 262 $ 348
Income taxes............................................................................ $ 27,692 $ 29,805
Acquisitions:
Assets acquired--
Intangible assets..................................................................... $ 5,967 $ 4,079
Other................................................................................. 622 499
Liabilities incurred--
Notes payable and contracts........................................................... -- (536)
Other................................................................................. (402) (304)
Common stock issued..................................................................... (2,000) (400)
---------- ----------
Cash paid, net of cash acquired......................................................... $ 4,187 $ 3,338
---------- ----------
---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
4
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS. Robert Half International Inc. (the "Company")
provides specialized staffing services through such divisions as
ACCOUNTEMPS-REGISTERED TRADEMARK-, ROBERT HALF -REGISTERED TRADEMARK-,
OFFICETEAM-REGISTERED TRADEMARK-, RHI CONSULTING-REGISTERED TRADEMARK- and RHI
MANAGEMENT RESOURCES-REGISTERED TRADEMARK-. The Company, through its
ACCOUNTEMPS, ROBERT HALF, and RHI MANAGEMENT RESOURCES divisions, is the world's
largest specialized provider of temporary, full-time, and project professionals
in the fields of accounting and finance. OFFICETEAM specializes in skilled
temporary administrative personnel. RHI CONSULTING provides contract information
technology professionals. RHI MANAGEMENT RESOURCES places senior-level
accounting and financial professionals on longer term, more complex projects
lasting for several months to a year or longer. Revenues are predominantly from
temporary services. The Company operates in the United States, Canada, and
Europe. The Company is a Delaware corporation.
PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include
the accounts of the Company and its subsidiaries, all of which are wholly-owned.
All significant intercompany balances have been eliminated. Certain
reclassifications have been made to the 1997 financial statements to conform to
the 1998 presentation.
INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in management's opinion, include all
adjustments necessary for a fair statement of results for such interim periods.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules or regulations; however,
the Company believes that the disclosures made are adequate to make the
information presented not misleading.
The interim results for the three and nine months ended September 30, 1998,
and 1997 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, 1997.
REVENUE RECOGNITION. Temporary services revenues are recognized when the
services are rendered by the Company's temporary employees. Permanent placement
revenues are recognized when employment candidates accept offers of permanent
employment. Allowances are established to estimate losses due to placed
candidates not remaining employed for the Company's guarantee period, typically
90 days.
CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments with a maturity of three months or less as cash equivalents.
INTANGIBLE ASSETS. Intangible assets primarily consist of the cost of
acquired companies in excess of the fair market value of their net tangible
assets at acquisition date, which are being amortized on a straight-line basis
over a period of 40 years. The carrying value of intangible assets is
periodically reviewed by the Company and impairments are recognized when the
expected future operating cash flows derived from such intangible assets are
less than their carrying value. Based upon its most recent analysis, the Company
believes that no material impairment of intangible assets existed at September
30, 1998.
INCOME TAXES. Deferred taxes are computed based on the difference between
the financial statement and income tax bases of assets and liabilities using the
enacted marginal tax rates.
5
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION. The results of operations of the Company's
foreign subsidiaries are translated at the monthly average exchange rates
prevailing during the period. The financial position of the Company's foreign
subsidiaries is 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.
PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are amortized over
the shorter of the life of the related asset or the life of the lease.
NOTE B--NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income", which defines the concept of "comprehensive
income" and establishes reporting requirements effective for financial
statements beginning in the first quarter of 1998. The adoption of SFAS No. 130
does not affect the Company's earnings, liquidity, or capital resources.
Currently, foreign currency translation adjustments is the only "comprehensive
income" item relevant to the Company. The Company has adopted SFAS No. 130 and
"comprehensive income" is presented in the Consolidated Statements of
Stockholders' Equity.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain information contained in Management's Discussion and Analysis and in
other parts of this report may be deemed forward-looking statements regarding
events and financial trends that may affect the Company's future operating
results or financial positions. Such statements may be identified by words such
as "estimate", "project", "plan", "intend", "believe", "expect", "anticipate",
or variations or negatives thereof or by similar or comparable words or phrases.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed in the
statements. Such risks and uncertainties include, but are not limited to, the
following: changes in general or local economic conditions or in the economic
condition of any industry, the availability of qualified staff employees and
temporary candidates, government regulation of the personnel services industry,
general regulations relating to employers and employees, liability risks
associated with the operation of a personnel services business, competitive
conditions in the personnel services industry, and Year 2000 issues. In
addition, it should be noted that, because long-term contracts are not a
significant portion of the Company's business, future results cannot be reliably
predicted by considering past trends or extrapolating past results.
RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1998 AND 1997
Temporary services revenues were $434 million and $313 million for the three
months ended September 30, 1998 and 1997, respectively, increasing by 39% during
the three months ended September 30, 1998 compared to the same period in 1997.
Temporary services revenues were $1.2 billion and $861 million for the nine
months ended September 30, 1998 and 1997, respectively, increasing by 41% during
the nine months ended September 30, 1998 compared to the same period in 1997.
Permanent placement revenues were $37 million and $27 million for the three
months ended September 30, 1998 and 1997, respectively, increasing by 37% during
the three months ended September 30, 1998 compared to the same period in 1997.
Permanent placement revenues were $102 million and $73 million for the nine
months ended September 30, 1998 and 1997, respectively, increasing by 40% during
the nine months ended September 30, 1998 compared to the same period in 1997.
Overall revenue increases reflect continued improvement in demand for the
Company's services, which the Company believes is a result of increased
acceptance in the use of professional staffing services. Revenues from companies
acquired during the nine months ended September 30, 1998 were not material.
The Company currently has more than 230 offices in 39 states and five
foreign countries. Domestic operations represented 89% of revenues for both the
three and nine months ended September 30, 1998 and 90% of revenues for both the
three and nine months ended September 30, 1997. Foreign operations represented
11% of revenues for both the three and nine months ended September 30, 1998 and
10% of revenues for both the three and nine months ended September 30, 1997.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consist of payroll, payroll taxes,
and insurance costs for temporary employees. Gross margin dollars from permanent
placement services are equal to revenues, as there are no direct costs
associated with such revenues. Gross margin dollars for the Company's temporary
services were $153 million and $427 million for the three and nine months ended
September 30, 1998, respectively, compared to $108 million and $298 million for
the comparable periods in 1997, increasing by 42% and 43% for the three and nine
months ended September 30, 1998, respectively. Gross margin amounts equaled 35%
of revenues for temporary services for both the three and nine months ended
September 30, 1998, compared to 35% of temporary service revenues for both the
three and nine months ended September 30, 1997, 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 $37 million and $102 million for the three and nine months ended September
30, 1998, respectively, compared to
7
<PAGE>
$27 million and $73 million for the comparable periods in 1997, increasing by
37% and 40% for the three and nine months ended September 30, 1998,
respectively.
Selling, general and administrative expenses were $132 million and $368
million for the three and nine months ended September 30, 1998, respectively,
compared to $93 million and $257 million during the three and nine months ended
September 30, 1997, respectively. Selling, general and administrative expenses
as a percentage of revenues were 28% for both the three and nine months ended
September 30, 1998, compared to 27% and 28% for the three and nine months ended
September 30, 1997, respectively. Selling, general and administrative expenses
consist primarily of staff compensation, advertising, and occupancy costs, most
of which generally follow changes in revenues.
The Company allocates the excess of cost over the fair market value of the
net tangible assets first to identifiable intangible assets, if any, and then to
goodwill. Although management believes that goodwill has an unlimited life, the
Company amortizes these costs over 40 years. Management believes that its
strategy of making acquisitions of established companies in established markets
and maintaining its presence in these markets preserves the goodwill for an
indeterminate period. The carrying value of intangible assets is periodically
reviewed by the Company and impairments are recognized when the expected future
operating cash flows derived from such intangible assets is less than their
carrying value. Based upon its most recent analysis, the Company believes that
no material impairment of intangible assets existed at September 30, 1998.
Intangible assets represented 26% of total assets and 35% of total stockholders'
equity at September 30, 1998.
Interest income for the three months ended September 30, 1998 and 1997 was
$2,062,000 and $1,443,000, respectively, while interest expense for the three
months ended September 30, 1998 and 1997 was $329,000 and $289,000,
respectively. Interest income for the nine months ended September 30, 1998 and
1997 was $5,340,000 and $3,540,000, respectively, while interest expense for the
nine months ended September 30, 1998 and 1997 was $915,000 and $700,000,
respectively. The change in interest income reflects an increase in cash and
cash equivalents.
The provision for income taxes was 40% and 41% for the three and nine months
ended September 30, 1998, respectively, compared to 41% for both the three and
nine months ended September 30, 1997. The decrease for the three months ended
September 30, 1998 compared to the three months ended September 30, 1997 is the
result of an increase in tax-exempt interest income.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during the nine months ended September
30, 1998 is the net effect of funds generated by operations and the funds used
for the staffing services acquisitions, capital expenditures, and principal
payments on outstanding notes payable. In October 1997, the Company authorized
the repurchase, from time to time, of up to four million shares of the Company's
common stock on the open market or in privately negotiated transactions,
depending on market conditions. During the nine months ended September 30, 1998,
the Company repurchased approximately 875,000 shares of common stock for a total
cost of $39.9 million. Since 1997, the Company has repurchased approximately
975,000 shares on the open market pursuant to this program. Repurchases of the
securities have been funded with cash generated from operations. For the nine
months ended September 30, 1998, the Company generated $114.7 million from
operations, used $51.7 million in investing activities, and used $27.5 million
in financing activities.
The Company's working capital at September 30, 1998, included $166.8 million
in cash and cash equivalents. In addition, at September 30, 1998, the Company
had available $73.2 million of its $80 million bank revolving line of credit.
The Company's working capital requirements consist primarily of the financing of
accounts receivable. While there can be no assurances in this regard, the
Company expects that internally generated cash plus the bank revolving line of
credit will be sufficient to support the working capital needs of the Company,
the Company's fixed payments, and other obligations on both a short and long
term basis. As of September 30, 1998, the Company had no material capital
commitments.
8
<PAGE>
The Company's primary exposures related to the Year 2000 are in its key
internal information systems. The Company is addressing the Year 2000 exposures
as part of its strategic plan for upgrading core systems.
In 1997, the Company initiated a number of major system projects to replace
core computer hardware, networking, and software systems in the U.S. with new
technology. The Company has purchased software from outside vendors and is
working with outside consultants to install the software and train employees.
The Company's key vendors supplying this technology have asserted that these
hardware, networking, and software systems are Year 2000 compliant. The Company
does not plan to test these systems for Year 2000 compliance given the
contractual representations made by its key vendors.
The Company is currently rolling out these new systems throughout the
organization in phases, by location. The first phase has been completed on
schedule and the remaining are scheduled to be complete before the Year 2000.
The Company is also in the process of upgrading all desktop computers to a model
that is Year 2000 compliant and expects to complete this upgrade in 1999. The
Company expects to spend in excess of $44 million on these systems and desktop
upgrade projects of which approximately $35 million has been incurred to date.
The Company is undertaking steps to assess the effect of the Year 2000 issue
with respect to its foreign operating units and suppliers and at this time,
cannot determine the impact it will have. Contingency plans will be developed if
it appears the Company or its key suppliers will not be Year 2000 compliant as
noncompliance would have a material adverse impact on the Company's operations.
The Company will adopt SOP 98-1, "Accounting for the Costs of Computer
Software Developed for Internal Use," which requires the capitalization of
certain costs related to the development of software for internal use in fiscal
year 1999. The Company believes that the adoption of this standard will not have
a material impact on its financial results.
ITEM 2A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk sensitive instruments do not subject the Company
to material market risk exposures.
9
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
On July 10, 1998, the Registrant acquired all of the shares of a personnel
services business from the two owners thereof for cash and 37,080 treasury
shares of Registrant's Common Stock. This transaction was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) of such
act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 25, 1998, registrant held a special meeting of stockholders. The
only matter presented to stockholders at the special meeting was the approval of
an amendment to the registrant's Restated Certificate of Incorporation that
increased the number of authorized shares of Common Stock. The amendment was
approved by the following vote:
For: 81,754,774
Against: 1,345,100
Abstain: 411,449
Broker Nonvote: 8,648,589
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.
10.1 Outside Directors' Option 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.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
By /s/ M. KEITH WADDELL
------------------------------------
M. Keith Waddell,
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL
OFFICER AND TREASURER
(PRINCIPAL FINANCIAL OFFICER
AND DULY AUTHORIZED SIGNATORY)
Date: November 13, 1998
11
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ------------- ---------
<C> <S> <C>
3.1 Restated Certificate of Incorporation.........................................................
10.1 Outside Directors' Option 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 two hundred sixty-five million (265,000,000), and
the aggregate par value of all shares that are to have a par value shall be
$265,000. The number of common shares authorized is two hundred sixty
million (260,000,000), 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 Two Million (2,000,000). 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 its Senior Vice
President and attested by its Secretary this 1st day of September,
1998.
<PAGE>
ROBERT HALF INTERNATIONAL INC.
By /S/ M. KEITH WADDELL
-----------------------
Name: M. Keith Waddell
Title: Senior Vice President
Attest:
By /s/STEVEN KAREL
-------------------
Name: Steven Karel
Title: Secretary
<PAGE>
EXHIBIT 10.1
OUTSIDE DIRECTORS' OPTION PLAN
OF
ROBERT HALF INTERNATIONAL INC.
(AS AMENDED AND RESTATED EFFECTIVE JULY 29, 1998)
1. DEFINITIONS. As used in this Plan, the following terms have the
following meanings:
ADMINISTRATOR means the Board or a committee appointed by the
Board.
AFFILIATE means a "parent" or "subsidiary" corporation, as defined
in Sections 425(e)and 425(f), respectively, of the Code.
ANNUAL ORGANIZATIONAL MEETING means the first meeting of the Board
after the annual meeting of the Company's stockholders.
BOARD means the Board of Directors of the Company.
CHANGE IN CONTROL. A Change in Control means any of the
following events:
(a) Any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored
by the Company or a subsidiary thereof or a corporation owned (directly or
indirectly), by the stockholders of the Company in substantially the same
proportions of the ownership of stock of the Company, shall become the
beneficial owner of securities of the Company representing 20% or more, or
commences a tender or exchange offer following the successful consummation of
which the offerer and its affiliates would beneficially own securities
representing 20% or more, of the combined voting power of then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in
Control shall not be deemed to include the acquisition by any such person or
group of securities representing 20% or more of the Company if such party has
acquired such securities not with the purpose nor with the effect of changing
or influencing the control of the Company, nor in connection with or as a
participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (i) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other
business combination or extraordinary transaction involving the Company, (ii)
making, or in any way participating in, any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the Exchange Act) to
vote any voting securities of the Company (including, without limitation, any
such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking
to advise or influence any party with respect to the voting of any voting
securities of the Company, directly or indirectly, relating to a merger or
other business combination involving the Company or the sale or transfer of
substantial assets of the Company, (iii) forming, joining or in any way
participating in any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any voting securities of the Company, directly
or indirectly, relating to a merger or other business combination involving
the Company or the sale or transfer of any substantial assets of the Company,
or (iv) otherwise acting, alone or in concert with others, to seek control of
the Company or to seek to control or influence the management or policies of
the Company.
(b) The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
(c) A change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors"
shall mean directors who either (i) are directors of the Company as of the
date hereof, or (ii) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with
an actual or threatened proxy contest relating to the election of directors
to the Company). As a result of or in connection with any cash tender offer,
merger, or other business combination, sale of assets or contested election,
or combination of the foregoing, the persons who were directors of the
Company just prior to such event shall cease within one year to constitute a
majority of the Board.
(d) The Company's stockholders approve a definitive agreement
providing for a transaction in which the Company will cease to be an
independent publicly owned corporation.
(e) The stockholders of the Company approve a definitive agreement
(i) to merge or consolidate the Company with or into another corporation in
which the holders of the Stock immediately before such merger or
reorganization will not, immediately following such merger or reorganization,
hold as a group on a fully-diluted basis both the ability to elect at least a
majority of the directors of the surviving corporation and at least a
majority in value of the surviving corporation's outstanding equity
securities, or (ii) to sell or otherwise dispose of all or substantially all
of the assets of the Company.
CODE means the Internal Revenue Code of 1986, as amended.
COMPANY means Robert Half International Inc.
DIRECTOR means a member of the Board.
1
<PAGE>
ELIGIBLE DIRECTOR means a Director who is not also an employee
of the Company or an Affiliate.
EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
GRANT DATE means the date on which an Option is granted.
NEW OPTION means an Option granted on or after January 1, 1999.
OFFER means a tender offer or an exchange offer for shares of the
Company's Stock.
OLD OPTION means an Option granted before January 1, 1999.
OPTION means an option to purchase Stock as described in Section
5.1 hereof. An Option granted under this Plan is a nonstatutory option to
purchase Stock which does not meet the requirements set forth in Section
422A of the Code.
OPTION AGREEMENT means a written agreement evidencing an Option,
in form satisfactory to the Company, duly executed on behalf of the Company
and delivered to and executed by an Optionee.
OPTIONEE means an Eligible Director who has been granted an
Option.
PLAN means the Outside Directors' Option Plan.
RETIREMENT AGE means, with respect to any Optionee, the later
to occur of (i) the 7th anniversary of Optionee's first day of service
with the Company as a Director and (ii) Optionee's 55th birthday.
SECURITIES ACT means the Securities Act of 1933, as amended.
STOCK means the Common Stock, $.001 par value, of the Company.
STOCK PURCHASE AGREEMENT means a written agreement, in form
satisfactory to the Company, duly executed by the Company and an Optionee
who has exercised an Option to purchase Stock.
TERMINATION DATE means the date on which an Optionee ceases to be
either a Director of or a consultant to the Company.
VESTING DATE means, with respect to each calendar year, the last
day of the month in which the Annual Organization Meeting is held; provided,
however, that the "Vesting Date" with respect to a particular Option shall
not include the last day of the month in which such Option is granted.
VOTING SHARES means the outstanding shares of the Company
entitled to vote for the election of directors.
2. PURPOSES OF THE PLAN. The purposes of the Plan are to attract and
retain the best available candidates for the Board, to provide additional equity
incentives to Eligible Directors through their participation in the growth value
of the Stock, and to promote the success of the Company's business. To
accomplish the foregoing objectives, this Plan provides a means whereby Eligible
Directors will receive Options to purchase Stock.
3. STOCK SUBJECT TO THE PLAN. The number of authorized but previously
unissued shares of the Company's Stock available for issuance hereunder shall
equal the number of shares of Stock with respect to which Options are granted
pursuant to Section 5 hereof.
4. ADMINISTRATION. The Administrator shall have the authority to grant
Options upon the terms and conditions of this Plan, and to determine all other
matters relating to this Plan. The Administrator may delegate ministerial duties
to such employees of the Company as it deems proper. All questions of
interpretation, implementation and application of this Plan shall be determined
by the Administrator, and such determinations shall be final and binding on all
persons.
2
<PAGE>
5. TERMS AND CONDITIONS OF OPTIONS.
5.1. GRANT OF OPTION. Options shall be granted pursuant to this Plan
as follows:
5.1.1. GRANT ON EFFECTIVE DATE. Upon the effective date of this
Plan, an Option for 30,000 shares of Stock shall be granted to each
Eligible Director who shall not previously have been granted an option by
the Company for the purchase of shares of Stock.
5.1.2. SUBSEQUENT GRANTS. On the date of each Annual Organizational
Meeting subsequent to the effective date of this Plan, an Option shall be
granted to each Eligible Director. With respect to any Eligible Director
who, prior to such date, shall not have been granted an option by the
Company, whether pursuant to this Plan or any other plan or arrangement
with the Company, the Option shall be for 15,000 shares of Stock.
Otherwise, the Option shall be for 12,000 shares of Stock.
5.2. EXERCISE PRICE. The exercise price of an Option shall be 100% of
the value of the Stock on the Grant Date, determined in accordance with
Section 6 hereof.
5.3. OPTION TERM. Each Option granted under this Plan shall expire ten
(10) years from the Grant Date.
5.4. OPTION EXERCISE.
5.4.1. INITIAL EXERCISE. No Option may be exercised in whole or in
part until the later to occur of (i) the first Vesting Date following the
Grant Date of such Option and (ii) six months after the Grant Date of
such Option.
5.4.2. STOCKHOLDER APPROVAL. If stockholder approval of this Plan
is required (a) under the rules and regulations promulgated under Section
16 of the Exchange Act in order to exempt any transaction contemplated by
this Plan from Section 16(b) of the Exchange Act, or (b) by the rules of
the New York Stock Exchange, if the Company's securities are listed
thereon, or (c) by the rules of the National Association of Securities
Dealers automated quotation system ("NASDAQ"), National Market System, if
the Company's securities are quoted thereon, then no Option may be
exercised in whole or in part until the stockholders of the Company have
approved this Plan.
5.4.3. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued
pursuant to the exercise of an Option unless the exercise of the Option
and the issuance and delivery of Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, applicable state securities laws, the
rules and regulations promulgated under each of the foregoing, the
requirements of the New York Stock Exchange (if the Company's securities
are listed thereon) and the requirements of NASDAQ pertaining to the
National Market System (if the Company's securities are quoted thereon),
and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
5.5. REGISTRATION AND RESALE. If the Stock subject to this Plan is not
registered under the Securities Act and under applicable state securities
laws, the Administrator may require that the Participant deliver to the
Company such documents as counsel for the Company may determine are
necessary or advisable in order to substantiate compliance with applicable
securities laws and the rules and regulations promulgated thereunder.
5.6. VESTING SCHEDULE. An Optionee's right to exercise an Option shall
vest, as to twenty-five percent (25%) of the Stock (as adjusted, pursuant to
Section 5.8.1 hereof, if applicable) initially subject to the Option, on
each of the first through fourth Vesting Dates following the Grant Date.
3
<PAGE>
5.7. PAYMENT UPON EXERCISE. At the time written notice of exercise of
an Option is given to the Company, the Optionee shall make payment in full,
in cash or check or by one of the methods specified in Section 5.7.1 or
Section 5.7.2 below, for all Stock purchased pursuant to the exercise of
such Option. Proceeds of any such payment shall constitute general funds of
the Company.
5.7.1. PROMISSORY NOTE. An Option may be exercised by delivery of
the Optionee's full recourse promissory note for any portion or all of
the aggregate exercise price of the Stock as to which the Option is being
exercised. Such note shall (a) bear interest at the lowest rate which
will not result in interest being imputed pursuant to the Internal
Revenue Code, (b) mature four years after the date of exercise and (c) be
on such other terms as determined by the Administrator. Such promissory
note shall be secured by a security interest in the Stock purchased
pursuant to the Option and in such other manner, if any, as the
Administrator shall approve.
5.7.2. DELIVERY OF STOCK. An Option may be exercised by delivery by
the Optionee of Stock already owned by the Optionee for all or part of
the aggregate exercise price of the Stock as to which the Option is being
exercised, so long as (i) the value of such Stock (determined as provided
in Section 6) is equal on the date of exercise to the aggregate exercise
price of the shares of Stock as to which the Option is being exercised,
or such portion thereof as the Optionee is authorized to pay by delivery
of Stock and (ii) such previously owned shares have been held by the
Optionee for at least six months.
5.8. ADJUSTMENTS.
5.8.1. CHANGES IN CAPITAL STRUCTURE. If the Stock is changed by
reason of a stock split, reverse stock split, stock dividend, or
recapitalization, or is converted into or exchanged for other securities
other than as a result of a Change of Control, the Administrator shall
make such appropriate adjustments in (i) the number of shares of Stock to
be covered by options granted under Section 5.1.2 hereof, (ii) each
Option outstanding under this Plan, and (iii) the exercise price of each
outstanding Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such adjustment.
Each such adjustment shall be determined by the Administrator in its sole
discretion, which determination shall be final and binding on all
persons. Any new or additional Stock to which an Optionee may be entitled
under this Section 5.8.1 shall be subject to all of the terms and
conditions set forth in Section 5 of this Plan.
5.8.2. CHANGE OF CONTROL. In the event of a Change of Control,
all Options shall vest immediately, and each New Option then held by
the Director shall remain outstanding until the earlier of its exercise
or its original option term (as defined in Section 5.3).
5.9. NO ASSIGNMENT. No right or benefit under, or interest in, the
Plan shall be subject to assignment or transfer (other than by will or the
laws of descent and distribution), and no such right, benefit or interest
shall be subject to attachment or legal process for or against Participant
or his or her beneficiaries, as the case may be. During the life of the
Optionee, an Option shall be exercisable only by the Optionee or, in the
event of disability of the Optionee, by the Optionee's guardian or legal
representative.
5.10. TERMINATION.
5.10.1. DEATH OR DISABILITY. If an Optionee ceases to be a
Director by reason of death or Disability, then (a) each unvested New
Option then held by the Director shall immediately vest and (b) each
New Option then held by the Director shall remain outstanding until the
earlier of its exercise or its original option term (as defined in
Section 5.3.). "Disability" shall mean (a) 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 Optionee unable to engage in any substantial
gainful activity and which condition is likely to result in death or to
be of long, continued and indefinite duration, or (b) a judicial
declaration of incompetence.
5.10.2. OTHER TERMINATION PRIOR TO RETIREMENT AGE. If an
Optionee's Termination Date shall occur prior to Optionee's Retirement
Age, other than by reason of death or Disability, the vested portion of
any then outstanding Option held by such Optionee shall, unless
otherwise provided by Section 5.8.2., remain outstanding and exercisable
through and including the 30th day following the Termination Date. The
unvested portion of any then outstanding Option held by such Optionee
shall expire on the Termination Date.
5.10.3. OTHER TERMINATION ON OR AFTER RETIREMENT AGE. If an
Optionee's Termination Date shall occur on or after Optionee's
Retirement Age, the vested portion of any then outstanding Old Option
held by such Optionee shall, unless otherwise provided by Section
5.8.2., remain outstanding and exercisable through and including the
30th day following the Termination Date. The unvested portion of any
then outstanding Old Option held by such Optionee shall expire on the
Termination Date.
5.10.4. EXTENSION OF POST TERMINATION EXERCISE PERIOD. If
exercise of an Option during the 30 day period following the
Termination Date specified in Sections 5.10.2. and 5.10.3. above would
subject the Optionee to liability under Section 16(b) of the Exchange
Act by reason of a Stock transaction by Optionee prior to the
Termination Date, such 30 day period shall not begin to run until six
months following the last such Stock transaction.
4
<PAGE>
6. DETERMINATION OF VALUE. For purposes of this Plan, the value
of the Stock shall be the closing sales price on the New York Stock
Exchange or the NASDAQ National Market System, as the case may be, on the
date the value is to be determined as reported in THE WALL STREET JOURNAL
(Western Edition). If there are no trades on such date, the closing sale
price on the last preceding business day upon which trades occurred shall
be the fair market value. If the Stock is not listed on the New York
Stock Exchange or quoted on the NASDAQ National Market System, the fair
market value shall be determined in good faith by the Administrator.
7. MANNER OF EXERCISE. An Optionee wishing to exercise an Option
shall give written notice to the Company at its principal executive
office, to the attention of the Secretary of the Company, accompanied by
an executed Stock Purchase Agreement and by payment of the Option exercise
price in accordance with Section 5.7. The date the Company receives
written notice of an exercise hereunder accompanied by payment of the Option
exercise price will be considered the date such Option was exercised.
Promptly after receipt of such written notice and payment, the Company
shall deliver to the Optionee or such other person permitted to exercise
such Option under Section 5.9, a certificate or certificates for the
requisite number of shares of Stock. The Company shall pay any stock issue
or transfer tax incurred with respect to such exercise and issuance.
8. RIGHTS.
8.1. RIGHTS AS OPTIONEE. No Eligible Director shall acquire any rights
as an Optionee unless and until an Option Agreement has been duly executed
on behalf of the Company, delivered to the Optionee and executed by the
Optionee.
8.2. RIGHTS AS STOCKHOLDER. No person shall have any rights as a
stockholder of the Company with respect to any Stock subject to an Option
until the date that a stock certificate has been issued and delivered to the
Optionee.
8.3. NO RIGHT TO REELECTION. Nothing contained in the Plan or any
Option Agreement shall be deemed to create any obligation on the part of the
Board to nominate any Director for reelection by the Company's stockholders,
or confer upon any Director the right to remain a member of the Board for
any period of time, or at any particular rate of compensation.
9. REGISTRATION AND RESALE. The Board may, but shall not be required to,
cause the Plan, the Options, and Stock subject to the Plan to be registered
under the Securities Act and under the securities laws of any state. No Option
may be exercised, and the Company shall not be obliged to grant Stock upon
exercise of an Option, unless, in the opinion of counsel for the Company, such
exercise and grant is in compliance with all applicable federal and state
securities laws and the rules and regulations promulgated thereunder. As a
condition to the grant of an Option for the issuance of Stock upon the exercise
of an Option, the Administrator may require that the Optionee agree to comply
with such provisions and federal and state securities laws as may be applicable
to such grant or the issuance of Stock, and that the Optionee delivers to the
Company such documents as counsel for the Company may determine are necessary or
advisable in order to substantiate compliance with applicable securities laws
and the rules and regulations promulgated thereunder.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the
Administrator may at any time amend, alter, suspend, or discontinue this Plan,
except to the extent that stockholder approval is required for any amendment or
alteration (a) by Rule 16b-3 or applicable law in order to exempt from
Section 16(b) of the Exchange Act any transaction contemplated by this Plan,
or (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon, or (c) by the rules of NASDAQ pertaining to
the National Market System, if the Company's securities are quoted thereon;
provided, however, no amendment, alteration, suspension or discontinuation
shall be made that would impair the rights of any Optionee under an Option
without such Optionee's consent; and provided further, any provision in this
Plan relating to the eligibility of Directors to participate in this Plan,
the timing of Option grants made under this Plan or the amount of Options
granted to a Director under this Plan shall not be amended, to the extent so
provided by Rule 16b-3, more than once every six months, other
5
<PAGE>
than to comport with the changes in the Code or the rules thereunder. Subject to
the foregoing, the Administrator shall have the power to make such changes in
the regulations and administrative provisions hereunder, or in any Option (with
the Optionee's consent), as in the opinion of the Administrator may be
appropriate from time to time.
11. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such person.
12. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
13. EFFECTIVE DATE. This Plan shall become effective upon adoption by the
Board. If stockholder approval is required (a) under the General Rules and
Regulations promulgated under Section 16 of the Exchange Act in order to exempt
any transaction contemplated by this Plan from Section 16(b) of the Exchange Act
or (b) by the rules of the New York Stock Exchange, if the Company's securities
are listed thereon, or (c) by the rules of NASDAQ pertaining to the National
Market System, if the Company's securities are quoted thereon, then this Plan
shall be submitted to the stockholders of the Company for consideration at the
next annual meeting of stockholders. The Administrator may make Options
conditioned on such approval, and any Option so made shall be effective as of
the date of grant, subject only to such approval.
6
<PAGE>
Exhibit 11
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Income............................................................ $ 34,974 $ 24,631 $ 96,304 $ 66,761
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number Of Shares Outstanding:
Basic:
Weighted average shares........................................... 92,017 90,860 91,906 90,516
Diluted:
Weighted average shares........................................... 92,017 90,860 91,906 90,516
Common stock equivalents--Stock options (A)....................... 3,158 3,356 3,308 3,297
--------- --------- --------- ---------
Diluted shares outstanding........................................ 95,175 94,216 95,214 93,813
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income Per Share:
Basic............................................................... $ .38 $ .27 $ 1.05 $ .74
Diluted............................................................. $ .37 $ .26 $ 1.01 $ .71
</TABLE>
- ------------------------
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTANS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 166,819
<SECURITIES> 0
<RECEIVABLES> 242,837
<ALLOWANCES> 9,393
<INVENTORY> 0
<CURRENT-ASSETS> 431,648
<PP&E> 125,516
<DEPRECIATION> 43,648
<TOTAL-ASSETS> 691,461
<CURRENT-LIABILITIES> 155,590
<BONDS> 3,645
0
0
<COMMON> 91
<OTHER-SE> 506,289
<TOTAL-LIABILITY-AND-EQUITY> 691,461
<SALES> 0
<TOTAL-REVENUES> 1,314,099
<CGS> 0
<TOTAL-COSTS> 785,402
<OTHER-EXPENSES> 3,727
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,425)
<INCOME-PRETAX> 161,898
<INCOME-TAX> 65,594
<INCOME-CONTINUING> 96,304
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 96,304
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.01
</TABLE>
