<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ROBERT HALF INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ROBERT HALF INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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<PAGE>
ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD
THURSDAY, MAY 13, 1999
9:00 A.M.
To the Stockholders:
The annual meeting of stockholders of ROBERT HALF INTERNATIONAL INC. (the
"Company") will be held at 9:00 a.m. on Thursday, May 13, 1999 at The Westin
Hotel--San Francisco Airport, 1 Old Bayshore Highway, Millbrae, California,
94030. The meeting will be held for the following purposes:
1. To elect three directors.
2. To approve an amendment to the Company's By-laws that continues for an
additional five years the classification of the Board of Directors for purposes
of election.
3. To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
Only stockholders of record at the close of business on March 16, 1999 are
entitled to notice of, and to vote at, the meeting and any adjournment of the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
STEVEN KAREL
SECRETARY
Menlo Park, California
March 25, 1999
--IMPORTANT--
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
ALTERNATIVELY, YOU MAY, IF YOU WISH, VOTE VIA THE INTERNET AT HTTP://
WWW.EPROXY.COM/RHI. ALSO, U.S. STOCKHOLDERS MAY VOTE VIA TOLL-FREE TELEPHONE
CALL WITH A TOUCH-TONE TELEPHONE TO 1-800-842-1208. IF YOU ATTEND THE MEETING
AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
ROBERT HALF INTERNATIONAL INC.
-------------------
PROXY STATEMENT
-------------------
INTRODUCTION
The enclosed proxy is solicited on behalf of the present Board of Directors
(sometimes referred to as the "Board") of Robert Half International Inc., a
Delaware corporation (the "Company"), the principal executive offices of which
are located at 2884 Sand Hill Road, Menlo Park, California 94025. The
approximate date on which this proxy statement and the enclosed proxy are being
mailed to the Company's stockholders is March 25, 1999. The proxy is solicited
for use at the annual meeting of stockholders (the "Meeting") to be held at 9:00
a.m. on Thursday, May 13, 1999, at The Westin Hotel--San Francisco Airport, 1
Old Bayshore Highway, Millbrae, California, 94030. Only stockholders of record
on March 16, 1999 will be entitled to notice of, and to vote at, the Meeting and
any adjournment of the Meeting. Each share is entitled to one vote. At the close
of business on March 16, 1999 the Company had outstanding and entitled to vote
shares of its common stock, $.001 par value ("Common Stock").
A stockholder giving a proxy in the form accompanying this proxy statement
has the power to revoke the proxy prior to its exercise. A proxy can be revoked
by an instrument of revocation delivered prior to the Meeting to the Secretary
of the Company, by a duly executed proxy bearing a date later than the date of
the proxy being revoked, or at the Meeting if the stockholder is present and
elects to vote in person. Solicitation of proxies may be made by directors,
officers or employees of the Company by telephone or personal interview as well
as by mail. Costs of solicitation will be borne by the Company.
An automated system administered by the Company's transfer agent will
tabulate votes cast at the Meeting. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, and
each is tabulated separately. Abstentions are counted in tabulations of the
votes cast on proposals presented to stockholders or with respect to election of
directors, whereas broker non-votes are not counted for purposes of determining
whether a proposal has been approved or a nominee has been elected.
The Company effected a two-for-one stock split in the form of a stock
dividend in June 1996 and a three-for-two stock split in the form of a stock
dividend in September 1997. All share and price per share amounts in this Proxy
Statement have been restated, as appropriate, to reflect the stock splits.
NOMINATION AND ELECTION OF DIRECTORS
NOMINEES OF THE PRESENT BOARD OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors consisting of
not less than six nor more than eleven directors. The size of the Board of
Directors is presently set at seven and there are no vacancies.
The Board of Directors is divided into three classes serving staggered three
year terms. Currently, there are two directors in Class III, whose terms expire
in 2001, two directors in Class I, whose terms expire in 2000, and three
directors in Class II, whose terms expire at the 1999 Annual Meeting. However,
if the stockholders of the Company do not approve the continuing classification
of the Board of Directors at the 1999 Annual Meeting of Stockholders, then the
terms of all directors shall expire at the 2000 Annual Meeting of Stockholders
and all directors elected at the 1999 Annual Meeting of Stockholders or any
subsequent meeting of stockholders shall hold office for a one-year term. Each
Director holds office until the annual meeting in the year in which his term
expires and until his successor is elected and qualified.
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The current members of Class II, whose terms expire at the Annual Meeting,
are Frederick A. Richman, Thomas J. Ryan and J. Stephen Schaub, all of whom are
nominees.
Proxies cannot be voted for more than three persons. Directors are elected
by a plurality of the votes of the shares present in person or represented by
proxy at the Meeting. Proxies solicited by the Board will be voted "FOR" the
election of Messrs. Richman, Ryan and Schaub unless stockholders specify in
their proxies to the contrary. Although the Board does not expect any nominee to
become unavailable to serve as a director for any reason, should that occur
before the Meeting, proxies will be voted for the balance of those named and
such substitute nominee as may be selected by the Board.
The following table lists the name of each current member of the Board of
Directors, his age at January 31, 1999, the Class of which he is a member and
the period during which he has served as a director.
<TABLE>
<CAPTION>
CURRENT DIRECTOR
NAME AGE CLASS SINCE
- ---------------------------------------------------------------------------------------- ---- ------- -----------
<S> <C> <C> <C>
Andrew S. Berwick, Jr. ................................................................. 65 I 1981
Frederick P. Furth...................................................................... 64 I 1983
Edward W. Gibbons....................................................................... 62 III 1988
Harold M. Messmer, Jr. ................................................................. 52 III 1982
Frederick A. Richman.................................................................... 53 II 1994
Thomas J. Ryan.......................................................................... 74 II 1987
J. Stephen Schaub....................................................................... 58 II 1989
</TABLE>
Mr. Berwick has been President of Berwick-Pacific Corporation, a real estate
development company, for more than the past five years. He is Chairman Emeritus
of California Healthcare System.
Mr. Furth has been senior partner of the law firm of Furth, Fahrner & Mason
for more than the past five years. He is the Proprietor and Chairman of the
Board of Chalk Hill Winery and Chairman of the Board of the Furth Family
Foundation.
Mr. Gibbons has been a partner in Gibbons, Goodwin, van Amerongen, a private
merchant banking firm, since its founding in 1969. Mr. Gibbons is also currently
a director of Foodmaker, Inc.
Mr. Messmer has been Chairman of the Board since 1988, Chief Executive
Officer since 1987 and President since 1985. Mr. Messmer is a director of
Airborne Freight Corporation, Health Care Property Investors, Inc. and Spieker
Properties, Inc.
Mr. Richman is a senior tax partner of the law firm of O'Melveny & Myers, of
which he has been a member since 1978.
Mr. Ryan has been Chairman of the Board of Directors and Chief Executive
Officer of ISU International, a franchisor of independent insurance agents,
since 1979.
Mr. Schaub has been President and owner of J.S. Schaub & Co., Inc., a firm
engaged in investments and financial consulting, for more than the past five
years. Since 1984, he has also been Chief Financial Officer, part owner and a
director of Northwest Energy Services, Inc., a privately owned engineering firm
specializing in energy audits, installation and financing of energy conservation
measures.
THE BOARD AND COMMITTEES
The Board of Directors has standing Audit, Compensation, Stock Plan and
Executive Committees. The Board currently has no standing nominating committee.
The Audit Committee, composed of Messrs. Berwick, Richman and Schaub, met
once during 1998. The function of the Audit Committee is to recommend to the
full Board of Directors the firm to be retained by the Company as its
independent auditors, to consult with the auditors with regard to the plan
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of audit, the results of the audit and the audit report, and to confer with the
auditors with regard to the adequacy of internal accounting controls.
The Compensation Committee, composed of Messrs. Furth, Berwick and Ryan, met
twice during 1998 and acted twice by unanimous written consent. The function of
the Compensation Committee is to establish compensation policies for the
Company's senior officers and to administer non-stock compensation plans in
which officers, directors and employees are eligible to participate.
The Stock Plan Committee, a subcommittee of the Compensation Committee
composed of Messrs. Berwick and Furth, met three times during 1998 and acted
once by unanimous written consent. The Stock Plan Committee administers the
Company's equity incentive plans.
The Executive Committee, composed of Messrs. Messmer, Furth and Gibbons, met
three times during 1998. The Executive Committee has all of the powers of the
Board of Directors, with certain specific exceptions required by Delaware law.
The Board met five times during 1998. Each of the directors attended at
least 75% of the aggregate number of meetings of the Board and of the committees
of the Board on which he served that were held while he was a member thereof.
EXECUTIVE OFFICERS
The following table lists the name of each executive officer of the Company,
his or her age at January 31, 1999, and his or her current positions and offices
with the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICE
- ----------------------------------- --- --------------------------------------------------
<S> <C> <C>
Harold M. Messmer, Jr. ............ 52 Chairman of the Board, President and Chief
Executive Officer
M. Keith Waddell................... 41 Senior Vice President, Chief Financial Officer and
Treasurer
Robert W. Glass.................... 40 Senior Vice President, Corporate Development
Steven Karel....................... 48 Vice President, Secretary and General Counsel
Barbara J. Forsberg................ 38 Vice President, Finance and Controller
</TABLE>
Mr. Waddell has been Senior Vice President of the Company since 1993, Chief
Financial Officer of the Company since 1988 and Treasurer since 1987. From 1986,
when he joined the Company, until 1993, he served as Vice President.
Mr. Glass has been Senior Vice President, Corporate Development, since 1993.
He served as Vice President, Corporate Development from 1988 until 1993. From
1987 until 1988, he served as Vice President, Planning of the Company.
Mr. Karel has been Vice President and General Counsel of the Company since
1989 and Secretary since 1993.
Ms. Forsberg has been Vice President of the Company since 1993 and
Controller since 1990.
The executive officers of the Company are also officers of the Company's
wholly owned subsidiaries.
All of the executive officers serve at the pleasure of the Board of
Directors. Mr. Messmer has an employment agreement with the Company to serve as
Chairman, President and Chief Executive Officer. In addition, severance
agreements have been entered into with certain executive officers. See the
discussion under "Compensation of Executive Officers" below.
There are no family relationships between any of the directors or executive
officers.
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BENEFICIAL STOCK OWNERSHIP
The following table sets forth information as of February 28, 1999
concerning beneficial ownership of Common Stock by (i) the only persons known to
the Company to be beneficial owners of 5% or more of the outstanding Common
Stock, (ii) each director, (iii) the five executive officers of the Company who
had the highest combination of salary and bonus during 1998, and (iv) all
executive officers and directors as a group. Included in share ownership are
shares that may be acquired upon the exercise of options that are currently
exercisable or become exercisable on or before May 31, 1999 ("Exercisable
Options"). All persons have sole voting and investment power except as otherwise
indicated.
<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OF
BENEFICIALLY COMMON
NAME OF BENEFICIAL OWNER OWNED(A) STOCK
- -------------------------------------------------- --------------- --------
<S> <C> <C>
Ronald Baron...................................... 8,578,206(a) 9.4%
Baron Capital Group, Inc.
767 Fifth Avenue
New York, NY 10153
Putnam Investments, Inc. ......................... 6,564,660(b) 7.2%
One Post Office Square
Boston, MA 02109
Janus Capital Corporation ........................ 6,229,384(c) 6.8%
100 Fillmore Street
Denver, CO 80206
FMR Corp. ........................................ 6,127,550(d) 6.7%
82 Devonshire Street
Boston, MA 02109
Andrew S. Berwick, Jr. ........................... 294,000(e) 0.3%
Frederick P. Furth................................ 2,581,300(f) 2.8%
Edward W. Gibbons................................. 833,835(g) 0.9%
Harold M. Messmer, Jr............................. 2,171,363(h) 2.4%
Frederick A. Richman.............................. 70,500(i) 0.1%
Thomas J. Ryan.................................... 240,318(j) 0.3%
J. Stephen Schaub................................. 2,762,874(k) 3.0%
M. Keith Waddell.................................. 904,494(l) 1.0%
Robert W. Glass................................... 284,621(m) 0.3%
Steven Karel...................................... 143,469(n) 0.2%
Barbara J. Forsberg............................... 226,276(o) 0.3%
All executive officers and directors as a group
(11 persons).................................... 10,513,050 11.2%
</TABLE>
- ------------------------
(a) Information is as of January 29, 1999, the latest date for which information
is available to the Company. According to a Schedule 13D filed by Mr. Baron,
822,000 of these shares are held directly by him and the remaining shares
are held directly or indirectly by Baron Capital Group, Inc., BAMCO, Inc.,
Baron Capital Management, Inc. and Baron Asset Fund, each of which is a
holding company, investment advisor or investment company of which Mr. Baron
is President or Chief Executive Officer. According to the Schedule 13D,
shared dispositive and voting power is held with respect to 7,696,206 of
such shares.
(b) Information is as of December 31, 1998, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Putnam Investments, Inc., these shares are held indirectly by Putnam
Investments, Inc. and its parent, Marsh & McLennan Companies, Inc. and
directly by various entities controlled by Putnam Investments, Inc.,
including Putnam Investment Management, Inc. and The Putnam Advisory
Company, Inc., all of which own such shares in their capacities as
investment advisers or investment managers. According to the Schedule 13G,
shared
4
<PAGE>
dispositive power is held with respect to all of such shares and shared
voting power is held with respect to 121,900 of such shares.
(c) Information is as of December 31, 1998, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Janus Capital Corporation, these shares are held indirectly by Janus
Capital Corporation and Thomas H. Bailey (President, Chairman and a
significant stockholder of Janus Capital Corporation) by reason of Janus
Capital Corporation's acting as an investment adviser with respect to
several investment companies. One of such investment companies is the Janus
Fund, which directly owns 4,792,573 of such shares. According to the
Schedule 13G, shared voting and dispositive power is held with respect to
all shares.
(d) Information is as of December 31, 1998, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by FMR Corp., these shares are held indirectly by FMR Corp. and Edward C.
Johnson 3d (Chairman and a significant stockholder of FMR Corp.) and Abigail
P. Johnson (director and a significant stockholder of FMR Corp.) and
directly by various entities controlled by FMR Corp., including Fidelity
Management & Research Company, all of which own such shares in their
capacities as investment advisers, investment companies or investment
managers. According to the Schedule 13G, sole dispositive power is held with
respect to all of such shares.
(e) Includes 90,000 shares that may be acquired upon the exercise of Exercisable
Options.
(f) Includes 1,641,600 shares as to which Mr. Furth has voting power but not
dispositive power, 162,400 shares owned by the Furth Family Foundation, a
charitable foundation of which Mr. Furth is a director, as to which shares
Mr. Furth has shared voting and dispositive powers, and 90,000 shares that
may be acquired upon the exercise of Exercisable Options. Also includes
4,500 shares owned by Mr. Furth's wife, as to which shares he has sole
voting and dispositive power.
(g) Includes 120,000 shares that may be acquired upon the exercise of
Exercisable Options. Also includes 15,000 shares owned by Mr. Gibbons' wife.
(h) Includes 1,144,115 shares that may be acquired upon the exercise of
Exercisable Options, 776,639 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Messmer has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans, 232,081
shares as to which Mr. Messmer shares voting and dispositive power with his
wife and 14,724 shares held by Mr. Messmer as custodian for his children, as
to which shares Mr. Messmer has voting and dispositive power but disclaims
beneficial ownership.
(i) Includes 60,000 shares that may be acquired upon the exercise of Exercisable
Options.
(j) Includes 90,000 shares that may be acquired upon the exercise of Exercisable
Options and 12,750 shares held by NAYR Group, LP, of which Mr. Ryan is a
limited partner, and 1,000 shares held by the Ryan Foundation, as to which
shares Mr. Ryan shares voting and dispositive power but in which he has no
pecuniary interest.
(k) Includes 60,000 shares that may be acquired upon the exercise of Exercisable
Options, 73,362 shares owned by Schaub Family Partners, LP, of which Mr.
Schaub is general partner but has no limited partnership interest, 50,000
shares held by the Sunrise Investment Partners II, LP, of which Mr. Schaub
is general partner and a limited partner and 28,500 shares held by The
Schaub Foundation, as to which shares Mr. Schaub shares voting and
dispositive power but in which he has no pecuniary interest. Also includes
1,236,999 shares as to which Mr. Schaub has voting power and another 21,900
shares as to which Mr. Schaub has dispositive power, but as to all of which
shares he has no pecuniary interest.
(l) Includes 481,022 shares that may be acquired upon the exercise of
Exercisable Options, 322,546 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Waddell has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans and 100,926
shares as to which Mr. Waddell shares voting and dispositive power with his
wife.
5
<PAGE>
(m) Includes 159,393 shares that may be acquired upon the exercise of
Exercisable Options, 44,278 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Glass has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans, and 79,210
shares as to which Mr. Glass shares voting and dispositive power with his
wife.
(n) Includes 73,233 shares that may be acquired upon the exercise of Exercisable
Options and 54,701 shares acquired pursuant to Company benefit plans, as to
which shares Mr. Karel has sole voting power but as to which disposition is
restricted pursuant to the terms of such plans.
(o) Includes 136,689 shares that may be acquired upon the exercise of
Exercisable Options and 52,525 shares acquired pursuant to Company benefit
plans, as to which shares Ms. Forsberg has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans.
6
<PAGE>
AMENDMENT TO BY-LAWS
SUMMARY OF AMENDMENT
In 1994, the Company's stockholders approved the classification of the Board
of Directors into three classes of directors serving staggered three year terms.
At the recommendation of the Board, the stockholders also added Article III,
Section 2(c) to the Company's By-laws, which provides that such classification
will cease in 2000, and all terms will end in such year, unless the stockholders
re-approve the classification at the 1999 Annual Meeting of Stockholders. The
purpose of this re-approval requirement was to allow stockholders to re-visit
the issue and evaluate the advantages and disadvantages of a classified Board
after five years of experience.
The Board of Directors now recommends that the stockholders renew the
classification of the Board for an additional five years. Accordingly,
stockholders are asked to approve an amendment to the Company's By-laws that
changes Article III, Section 2(c) of the Company's By-laws to provide that
classification will cease in 2005 unless the stockholders re-approve the
classification at the 2004 Annual Meeting of Stockholders.
There are currently eight directors, of which two are in Class I, three are
in Class II, and two are in Class III. If the proposed amendment (which
continues classification without change) is approved, (a) the terms of the Class
I directors will expire in 2000, at which time elections for new three year
terms will be held, (b) the terms of the Class II directors elected at the 1999
Annual Meeting of Stockholders will expire in 2002, and (c) the terms of the
Class III directors will expire in 2001. If the amendment is not approved, all
director terms will end in the year 2000 and, henceforth, all directors will be
elected each year for a one year term.
THE BOARD OF DIRECTORS
The By-Laws of the Company provide that there shall be not less than six nor
more than eleven directors. The total number of directors may be fixed or
changed, from time to time, by the Board of Directors within such authorized
limits. The Board has no present plans, arrangements, commitments or
understandings with respect to increasing or decreasing the size of the Board or
any class of directors, but reserves the right to make such changes at any time
in the future as it deems appropriate.
Election for directors is conducted without cumulative voting. The directors
have the power to fill any vacancies on the Board of Directors, however
occurring, whether by an increase in the number of directors, death,
resignation, retirement, disqualification, removal from office or otherwise.
Additionally, any director chosen to fill a vacancy shall hold office until the
next election of the class for which such director has been chosen and his
successor is elected and qualified. Under Delaware law, directors serving on a
classified board may be removed only for cause unless the certificate of
incorporation provides otherwise. Since the Company's Certificate contains no
contrary provision, the directors are subject to removal by stockholders only
for cause.
REASONS FOR CLASSIFICATION OF THE BOARD OF DIRECTORS
The Board of Directors proposed classification in 1994 because it had
observed a number of attempts by various individuals and entities to acquire
significant minority positions in certain companies with the intent of obtaining
actual control of such companies by electing their own slate of directors, or of
achieving some other goal by threatening to obtain such control. These
insurgents often can elect a company's entire board of directors through a proxy
contest or otherwise, even though they do not own a majority of the company's
outstanding shares entitled to vote. The Board of Directors believed, and
continues to believe, such tactics to be highly disruptive and especially
damaging to a personnel services business like the Company, and therefore to be
contrary to the overall best interest of the stockholders. Since the Company
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is a personal services business with few tangible assets, a stable environment
in which the Board and management may function is particularly important.
ADVANTAGES
The Board of Directors believes that the classification of the Board has
been, and will continue to be, advantageous to the Company and its stockholders
because, by providing that directors serve three-year terms rather than one-year
terms, it enhances the likelihood for continuity and stability in the
composition of the Company's Board of Directors and in the policies formulated
by the Board. The Board believes that an environment of continuity and
stability, in turn, permits it more effectively to represent the interests of
all stockholders, including in connection with the taking of action in response
to demands or actions by a minority stockholder or group. Continued
classification of the Board of Directors will, in the Board's opinion, increase
its bargaining power with any third party or group seeking to influence or
control the Company.
The Board has no knowledge of any present effort to gain control of the
Company or to organize a proxy contest, and there has been no problem in the
past or at the present time with continuity or stability of the Board. However,
the Board believes that it is prudent and in the interests of stockholders
generally to provide the advantage of greater assurance of continuity of Board
composition and policies which will result from the continuation of the
classification of the Board. The Board believes such advantage outweighs any
disadvantage relating to discouraging potential acquirers from making an effort
to obtain control of the Company.
DISADVANTAGES
The continued classification of the Board of Directors may operate to delay
a purchaser's ability to obtain control of the Board in a relatively short
period of time, which could perpetuate the current Board and present management.
The delay arises because it will generally take a purchaser two annual meetings
of stockholders to elect a majority of the Board. Alternatively, a purchaser
would need to show cause and obtain the affirmative vote of a majority of the
outstanding shares entitled to vote in order to remove any directors. (Without
classification, a purchaser would be able to remove incumbent directors without
showing cause.) In addition, since certain Board actions (such as amendment of
the By-laws or certain actions in connection with the Company's preferred share
purchase rights) require a vote of greater than a majority of the Board, such
purchaser might be required, in some cases, to wait until three annual meetings
subsequent to purchase have occurred in order to take such actions, which delay
may serve as a further deterrent to purchases by entities seeking control.
Similarly, the continued classification of the Board of Directors may also
deter certain mergers, tender offers or other future takeover attempts which
some or a majority of holders of Common Stock may deem to be in their best
interests. In addition, the continued classification of the Board of Directors
would delay stockholders who do not like the policies of the Board of Directors
or management from removing a majority of the Board of Directors or management
for two years, unless they can show cause and obtain the requisite vote.
EXISTING CHARTER PROVISIONS
The Company's charter documents currently contain other provisions that
could have the effect of making more difficult or discouraging a proxy contest
or acquisition of control by a substantial stockholder. First, the Company's
Restated Certificate of Incorporation authorizes the issuance of 260,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock, the issued and
unreserved portion of which could (within limits imposed by law and the rules of
the New York Stock Exchange) be issued to discourage a change in control of the
Company. Second, the Certificate designates 2,000,000 shares of Preferred Stock
as Series A Junior Participating Preferred Stock. These shares are reserved for
issuance pursuant to the
8
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Company's preferred share purchase rights, in accordance with a Rights Agreement
dated July 23, 1990, as amended, and pursuant to which substantial dilution will
occur to a person or group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors, except pursuant to an offer
conditioned on a substantial number of rights being acquired. Third, the
Certificate requires the vote of two-thirds of the stockholders to approve
certain extraordinary transactions, such as a merger or sale of substantially
all of the Company's assets or significant issuances of the Company's
securities, with entities owning 10% or more of the Company's Common Stock.
Fourth, the Company's By-laws require the vote of two-thirds of the Board of
Directors to amend or repeal the By-laws or to change certain portions thereof.
The text of amended Article III, Section 2(c), as proposed for approval by
the stockholders, is as follows:
"(c) If the stockholders of the Company do not approve the continuing
classification of the Board of Directors at the 2004 Annual Meeting of
Stockholders, then Section 2(b) hereof shall be of no further force or
effect after the date of the 2005 Annual Meeting of Stockholders and,
notwithstanding anything to the contrary in Section 2(b), the terms of all
directors shall expire at the 2005 Annual Meeting of Stockholders and all
directors elected at the 2004 Annual Meeting of Stockholders or any
subsequent meeting of stockholders shall hold office for a one-year term."
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present in person or by proxy at the Meeting and entitled to
vote is required for approval of the proposal. The total vote cast on the
proposal also must equal or exceed at least 50% of the number of shares of
Common Stock outstanding on the Record Date.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST INTEREST OF
THE COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES.
9
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate by reference this Proxy Statement or
future filings with the Securities and Exchange Commission, in whole or in part,
the following Performance Graph shall not be deemed to be incorporated by
reference into any such filings.
The following graph compares, through December 31, 1998, the cumulative
return of the Company's Common Stock, an index of certain publicly traded
employment services companies, and the S&P 500. The graph assumes the investment
of $100 at the end of 1993 and reinvestment of all dividends. The information
presented in the graph was obtained by the Company from outside sources it
considers to be reliable but has not been independently verified by the Company.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ROBERT HALF
INTERNATIONAL PEER GROUP INDEX(A) S&P 500 INDEX
<S> <C> <C> <C>
1993 $100 $100 $100
1994 $183 $132 $101
1995 $319 $153 $139
1996 $520 $167 $171
1997 $914 $218 $229
1998 $1,017 $187 $294
</TABLE>
- ------------------------
(a) This index represents the cumulative total return of the Company and the
following corporations providing temporary or permanent employment services:
CDI Corp., Kelly Services, Inc., Manpower Inc. and The Olsten Corporation.
Many of the Company's direct competitors are privately held. However, the
selected corporations, which for the most part are general employment
agencies and therefore not comparable to the Company, which is a specialized
staffing service, constitute the best approximation of a peer group among
companies that were publicly traded for the entire five-year period.
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following tables provide information as to compensation for services of
the five executive officers of the Company who had the highest combination of
salary and bonus with respect to 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
----------------------------------------------------------------
RESTRICTED
STOCK AWARDS(A)
ANNUAL ----------------------------- SECURITIES
COMPENSATION MARKET UNDERLYING
NAME AND -------------------- NUMBER OF VALUE ON STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS SHARES GRANT DATE(B) OPTIONS COMPENSATION(D)
- ------------------------------ ---- -------- ---------- ------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Harold M. Messmer, Jr......... 1998 $525,000 $1,668,000 226,710(c) $ 8,756,674 498,500 shares $306,673
Chairman and Chief 1997 $500,000 $1,204,819 380,868 $11,635,205 465,500 shares $319,011
Executive Officer 1996 $387,122 $ 882,353 450,000 $ 8,756,250 450,000 shares $285,915
M. Keith Waddell.............. 1998 $265,000 $ 834,000 123,315(c) $ 4,761,838 198,750 shares $274,570
Senior Vice President 1997 $247,500 $ 572,289 155,561 $ 4,618,412 172,500 shares $227,434
1996 $225,000 $ 441,176 150,000 $ 2,918,750 150,000 shares $207,497
Robert W. Glass............... 1998 $170,000 $ 261,320 26,000(c) $ 1,039,563 39,600 shares $104,690
Senior Vice President 1997 $160,000 $ 228,916 12,000 $ 450,000 22,850 shares $ 94,099
1996 $155,000 $ 188,235 7,500 $ 170,625 15,000 shares $ 85,596
Steven Karel.................. 1998 $170,000 $ 150,120 23,500(c) $ 907,688 34,200 shares $ 76,266
Vice President 1997 $160,000 $ 108,434 21,500 $ 806,250 32,100 shares $ 66,484
1996 $150,000 $ 88,235 21,014 $ 478,057 26,223 shares $ 60,419
Barbara J. Forsberg........... 1998 $170,000 $ 166,800 34,000(c) $ 1,312,219 26,000 shares $ 73,579
Vice President 1997 $160,000 $ 108,434 18,800 $ 496,850 59,400 shares $ 60,544
1996 $135,000 $ 76,471 15,000 $ 291,875 15,000 shares $ 49,904
</TABLE>
- ------------------------------
(a) At December 31, 1998, Messrs. Messmer, Waddell, Glass and Karel and Ms.
Forsberg held an aggregate of 1,016,333, 428,650, 71,323, 76,290 and 68,925
shares of restricted stock, respectively, having a market value, on that
date of $45,226,818, $19,074,925, $3,173,874, $3,394,905 and $3,067,163,
respectively. All restricted stock awards vest automatically upon the
occurrence of a Change in Control. The executive officers have the right to
receive any dividends paid on restricted shares.
(b) Determined by multiplying the number of shares granted by the fair market
value of the Company's Common Stock on the date of grant, without giving
effect to the diminution of value attributable to vesting restrictions.
(c) Grants vest at the rate of 25% per year over the first four years following
the grant.
(d) The amounts in this column relating to 1998 include (a) $12,627 paid for
life insurance for Mr. Messmer and (b) $196,631, $206,735, $87,896, $63,186
and $61,887 allocated in the Company's records for the benefit of Messrs.
Messmer, Waddell, Glass and Karel and Ms. Forsberg, respectively, pursuant
to defined contribution plans that pay the benefits allocated thereunder
only upon the executive officer's retirement, death or termination of
employment. The amounts in this column also include amounts deemed to be
compensation under the rules of the Securities and Exchange Commission
related to the present value of the premium payments made by the Company for
the benefit of the named executive officers under the Company's split-dollar
life insurance program. Such amounts in fiscal year 1998 amounted to
$97,415, $67,835, $16,794, $13,080 and $11,692 for Messrs. Messmer, Waddell,
Glass, Karel and Ms. Forsberg, respectively. Premiums paid by the Company
will be reimbursed to the Company on termination of the respective policies
to the extent and provided there is sufficient cash value. Cash value in
excess of such premiums is paid to the executive's beneficiary.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE GRANT DATE
OPTIONS IN FISCAL OR BASE EXPIRATION PRESENT
NAME GRANTED(A) YEAR PRICE DATE VALUE(B)
- ------------------------------------------------ ------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Harold M. Messmer, Jr........................... 6,000(c) 0.2% $ 40.00 01/01/08 $ 113,053*
261,100(d) 7.4% $ 38.5625 01/05/08 $ 5,143,086*
231,400(f) 6.6% $ 38.625 12/23/08 $ 4,418,760*
M. Keith Waddell................................ 3,100(c) 0.1% $ 40.00 01/01/08 $ 58,411*
161,738(d) 4.6% $ 38.5625 01/05/08 $ 3,185,877*
33,912(f) 1.0% $ 38.625 12/23/08 $ 647,576*
Robert W. Glass................................. 1,600(c) 0.0% $ 40.00 01/01/08 $ 30,147*
5,000(e) 0.1% $ 52.75 05/06/08 $ 135,627*
33,000(f) 0.9% $ 38.625 12/23/08 $ 630,160*
Steven Karel.................................... 1,200(c) 0.0% $ 40.00 01/01/08 $ 22,611*
33,000(f) 0.9% $ 38.625 12/23/08 $ 630,160*
Barbara J. Forsberg............................. 1,000(c) 0.0% $ 40.00 01/01/08 $ 18,842*
25,000(f) 0.7% $ 38.625 12/23/08 $ 477,394*
</TABLE>
* In order for the assumed values to be realized, the total market value of
all outstanding shares of the Company's Common Stock would have to increase
by more than $1.7 billion from its value on the grant date.
- ------------------------
(a) All grants entitle the holder to satisfy tax withholding obligations
resulting from exercise by reduction in the number of shares otherwise
deliverable. In addition to the specified vesting schedule, (i) the options
granted to Messrs. Messmer, Waddell, Glass and Karel may vest upon
termination of employment under certain circumstances pursuant to their
respective severance agreements described below, (ii) all grants vest
automatically upon death, disability or the occurrence of a change in
control and (iii) all grants are subject to accelerated vesting at the
discretion of the Stock Plan Committee.
(b) Calculated in accordance with the Binomial Model for estimating the value of
stock options, which estimates the present value of an option based upon
assumptions as to future variables such as interest rate and stock price
volatility. The Binomial calculations assumed an expected volatility of
35.62%, an interest rate of between 4.81% and 5.75%, depending on the grant
date, no dividends, a 3% annual reduction until the option is fully vested
to reflect risk of forfeiture and the indicated expiration date. The actual
value, if any, realized on the exercise of an option will depend on the
excess of the fair market value of the stock over the exercise price on the
date the option is exercised, and may be substantially different from the
value estimated by the Binomial Model.
(c) Vests in four equal annual installments on each of December 31, 2001,
December 31, 2002, December 31, 2003 and December 31, 2004.
(d) This grant vests in four equal annual installments on each of December 31,
1998, December 31, 1999, December 31, 2000 and December 31, 2001.
(e) This option becomes exercisable in four equal annual installments on each of
May 1, 1999, May 1, 2000, May 1, 2001 and May 2, 2002.
(f) This grant vests in four equal annual installments on each of December 31,
1999, December 31, 2000, December 31, 2001 and December 31, 2002.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS
ACQUIRED AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE -------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- --------- ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harold M. Messmer, Jr............ 175,200 $ 8,576,990 979,115 1,136,998 $ 27,657,685 $ 19,604,521
M. Keith Waddell................. 100,000 $ 3,604,196 420,512 413,872 $ 11,903,941 $ 7,589,067
Robert W. Glass.................. 75,000 $ 3,848,462 146,038 89,647 $ 5,231,065 $ 1,355,979
Steven Karel..................... 0 0 70,591 83,564 $ 2,129,424 $ 1,075,426
Barbara J. Forsberg.............. 0 0 130,989 84,557 $ 4,588,689 $ 1,261,003
</TABLE>
Harold M. Messmer, Jr., Chairman of the Board, President and Chief Executive
Officer, has an employment agreement with the Company terminating December 31,
2002. Under the terms of the employment agreement, Mr. Messmer will receive a
base annual salary of not less than $525,000 and will receive certain other
benefits, including life insurance and tax planning. In the event the employment
of Mr. Messmer is terminated involuntarily other than for cause, or voluntarily
within thirty (30) days following a change in control of the Company, he is
entitled to receive severance compensation. The amount of such severance
compensation shall be, at Mr. Messmer's election, either (i) his base salary, at
the rate in effect on the date of termination, plus an equal amount annually in
lieu of a bonus, through the stated expiration date of his agreement, or (ii)
the present value of such payments. If Mr. Messmer's employment is terminated by
reason of death or disability, he or his estate will receive only 75% of his
base salary through the termination date of the agreement and will not receive
any amount in lieu of bonus. If Mr. Messmer's employment terminates other than
for cause after the later of age 55 or 20 years of service, he and his wife will
continue thereafter to participate in the Company's healthcare plan for its
employees, at Company expense. The employment agreement provides for automatic
renewal for an additional year on each December 31.
Severance agreements, which were recommended in 1989 by an outside
compensation consulting firm, have been entered into with Messrs. Messmer,
Waddell, Glass and Karel. Each severance agreement provides that the employee
will be paid between six and 24 months base salary (depending upon length of
service) if his employment is terminated without cause, as defined in the
agreement. The terminated employee will also receive a pro rata share of any
bonus he would otherwise have received pursuant to any bonus plan if his
employment had not been terminated, such amount to be paid when bonuses are
generally paid pursuant to the plan. (Notwithstanding the foregoing, no
individual shall receive salary and bonus payments under both this agreement and
any other agreement. Instead, only the greater of such benefits provided by
either agreement shall be paid.) On the termination date, any unvested stock or
options would become fully vested, as would any amounts accrued for the
employee's benefit under the Deferred Compensation Plan (a defined contribution
plan that pays benefits only upon retirement, death or other termination of
employment).
The Company has entered into Consulting Agreements with each of Messrs.
Messmer, Waddell, Glass and Karel and Ms. Forsberg. Each Consulting Agreement
provides that the employee will be retained as a consultant for a four year
period following retirement. The individual will provide advice and counsel as
requested during the consulting period and will be prohibited from competing
with the Company during that period. In return, the individual will receive an
annual fee during the consulting period equal to 8% of the total cash base
salary and bonus paid during the last complete calendar year prior to
retirement, and stock option and restricted stock awards made prior to
retirement will remain outstanding. For purposes of the Consulting Agreements,
retirement is defined to be any termination by the employee of his or her
employment subsequent to the later of age 55 or 20 years of service.
13
<PAGE>
The Company had in effect a key executive retirement plan, which was
terminated in 1987. Participants in the plan prior to its termination will
continue to receive benefits thereunder. The only current employee participating
in the plan is Mr. Messmer, who participates pursuant to a separate retirement
agreement. Under Mr. Messmer's retirement agreement, as amended, if Mr.
Messmer's employment is terminated (whether voluntarily or involuntarily) for
any reason, he is to receive monthly benefits commencing the month following the
date of his employment termination. Monthly benefit payments are a specified
percentage, depending upon his age at retirement, (the "Retirement Percentage")
of the sum of $2,500 plus 1/12 of Mr. Messmer's highest combination of Salary
and Bonus (as such terms are defined in his retirement agreement) with respect
to any of the five calendar years prior to the date his employment with the
Company terminates. For purposes of the retirement agreement, Salary is defined
as the greater of (a) actual cash base salary paid during the year or (b) the
amount calculated for the year by increasing $413,019 annually each calendar
year after 1995 on a compound basis by the annual percentage increase in the
Consumer Price Index for the preceding calendar year (but not by more than 10%
or less than 4%) through the date of retirement. Bonus is defined as cash bonus
or amounts paid in lieu of cash bonus. The Retirement Percentage (which was
established at its current levels on the recommendation of an outside
compensation consulting firm) is 30% if Mr. Messmer retires at age 50, and
increases by 0.25% for each month Mr. Messmer delays his retirement beyond age
50, to a maximum of 66% if Mr. Messmer retires at or after age 62.
Notwithstanding the foregoing, the Retirement Percentage is 66% if a Change in
Control (as defined in the plan) occurs prior to Mr. Messmer's retirement. Such
monthly benefits will be increased annually thereafter by the rate of increase
in the consumer price index (but not more than 7 1/2%) that existed at the end
of the calendar year prior to his retirement, plus any additional increases in
such rate (but not more than a total of 7 1/2%) that occur in subsequent
calendar years, and are to be paid until his death. For the first 15 years after
his termination of employment, Mr. Messmer or his beneficiary will also receive
a supplemental monthly benefit that varies depending upon his retirement age,
which benefit will be $6,241 per month if he retires at age 50, and increases by
8%, compounded, for each year he delays his retirement beyond age 50 through,
but not beyond, age 62. This supplemental benefit is not subject to the annual
CPI increase provisions. The retirement agreement also provides that if Mr.
Messmer dies before his employment is otherwise terminated or after his
employment terminates but before receiving 180 monthly retirement payments, such
payments are to be made to his designated beneficiary beginning the month
following his death until an aggregate of 180 monthly retirement payments have
been made. If his designated beneficiary is his wife, after the payment for the
180th month has been made, she will continue to receive monthly payments until
her death of half the amount he would have received. Both of these death
benefits are subject to the annual CPI increase provisions. Pursuant to the
retirement agreement, the Company will annually fund an irrevocable grantor
trust as necessary to provide for its obligations under the retirement
agreement. Upon Mr. Messmer's termination of employment, the Company will
deliver to him (or his beneficiary) an annuity or, at his request, a lump sum
cash payment, and annually thereafter the Company will pay him any additional
post-retirement CPI increases.
The Company has adopted an Excise Tax Restoration Agreement under which the
current executive officers and directors who become subject to such a tax in
connection with a change of control receive a cash payment equal to the sum of
the excise tax due, in addition to an amount necessary to restore the individual
to the same after-tax position as if no excise tax had been imposed.
14
<PAGE>
COMPENSATION OF DIRECTORS
Each outside director received an annual fee of $30,000 for services as a
director during 1998, $1,000 for each board meeting attended, and an annual fee
of $3,000 for each committee (but not subcommittee) on which he serves as a
member. All directors receive reimbursement for travel and other expenses
directly related to activities as directors.
Each outside director also receives an annual option grant under the Outside
Directors' Option Plan. The plan provides for the automatic granting of options
to outside directors (currently all directors other than Mr. Messmer) on the day
of each Annual Meeting of Stockholders. On such day, each outside director will
receive an option for the purchase of 12,000 shares. However, if such individual
has not previously been granted an option by the Company, the grant will be for
the purchase of 15,000 shares, rather than 12,000 shares. The exercise price for
all options is 100% of the fair market value on the date of grant. All options
are for a term of ten years and will vest at the rate of 25% per year for each
of the first four years. However, all options vest automatically and immediately
upon the occurrence of a Change in Control (as defined in the plan) and each
option granted after January 1, 1999 ("New Option") will vest automatically on
death or disability. No option may be exercised until at least six months after
its grant date. When an individual ceases to be a director, the unvested
portions of options shall terminate immediately and the vested portions of
options may be exercised for a limited period following termination, except that
New Options shall remain outstanding and unaffected by the termination if it
occurs after the later to occur of age 55 and seven years of service as a
director. Each of the outside directors (all directors other than Mr. Messmer)
was, pursuant to the terms of the plan, granted an option on May 6, 1998 (the
date of the 1998 Annual Meeting of Stockholders) at an exercise price of $52.75
per share, the fair market value on the date of grant. Each of such grants was
for an option to purchase 12,000 shares.
15
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The Compensation Committee is composed of Frederick P. Furth, Andrew S.
Berwick, Jr., and Thomas J. Ryan.
ISU Insurance Services of San Francisco has acted as broker and paying agent
for the Company with respect to certain of the Company's insurance policies.
Total payments received by ISU Insurance Services of San Francisco for these
services (net of amounts paid to ISU Insurance Services and remitted to the
insurance carriers) aggregated approximately $250,000 in 1998 and are expected
to aggregate a similar amount in 1999. Mr. Ryan is Chairman of ISU Insurance
Services of San Francisco, the stock of which is owned by members of Mr. Ryan's
family. ISU Insurance Services of San Francisco is a franchisee of ISU
International, a corporation of which Mr. Ryan is Chairman of the Board and
Chief Executive Officer and a majority of whose stock is owned by Mr. Ryan.
Frederick A. Richman, a director, is a partner in the law firm of O'Melveny
& Myers, which has performed legal services for the Company from time to time.
Amounts paid by the Company to O'Melveny & Myers have not been material.
16
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate by reference this Proxy Statement or
future filings with the Securities and Exchange Commission, in whole or in part,
the following report shall not be deemed to be incorporated by reference into
any such filings.
The Compensation Committee, after consultation with and upon the
recommendation of an outside compensation consulting firm, developed the
philosophy statement set forth below, which it has followed in every year since
1989, when it was first adopted:
"Compensation policies and practices, and other related programs, will be
developed and designed in line with the following statement of compensation
philosophy:
The overriding objective of the Company's compensation and benefit program
is to attract, retain and reward talented employees through programs that
also align with and support the Company's goals and strategies.
A competitive compensation package will be provided for all positions:
- Positions that participate in short-term incentive plans because of their
significant impact on short-term performance will have salaries that are
set at the 50th percentile. Additional short-term incentive pay will allow
total annual pay at the 75th percentile if target performance is achieved.
- Key executives with significant impact on the long-term performance of the
Company will also participate in long-term incentive plans (stock and/or
cash plans) that will result in total target pay at the 90th percentile if
short- and long-term performance targets are achieved.
Survey data reflective of relevant labor markets will be used to determine
actual pay levels that are consistent with desired competitive levels. In
addition to external pay data, internal relationships among positions and
differences in impact and importance of positions will influence pay. All
compensation programs will incorporate "pay for performance" concepts by
allowing pay of individual employees to vary according to individual, unit
and company performance:
- Performance planning and appraisal systems, together with incentive
programs where appropriate, will direct and reward effort and performance
of employees."
The Committee believes that setting compensation at levels designed to
attract and retain key individuals is critical to the success of a personnel
services business in which there are few tangible assets and in which people
represent the true "assets" of the Company. The Committee is also mindful of the
fact that the Company's industry is fractured with a myriad of private firms
owned by entrepreneurial individuals representing the Company's most effective
competition in many markets. Successful competitors generate large financial
rewards to the owners as the Company knows from its acquisitions of such firms
over the years. It is imperative that the Company's compensation program provide
significant cash and equity incentives to its key managers so as to compete with
both public and private companies for this talent and the Committee believes the
Company's compensation program achieves this result. Annual base salaries,
bonuses, restricted stock and stock option awards are all designed to achieve
the above-specified goals. Generally, annual bonus awards are based upon
earnings per share, and each executive's bonus is increased or decreased,
according to a formula, in relation to how the actual earnings per share
compares with the target earnings per share for the year set by the Committee.
The Committee believes that the emphasis placed upon equity grants (restricted
stock and stock options) aligns the interest of the officers with those of the
stockholders, and makes a significant portion of executive compensation
contingent upon long-term positive share price performance.
In establishing compensation levels for the Chief Executive Officer, the
Compensation Committee followed the guidelines and policies described above. In
addition, the Committee also considered several
17
<PAGE>
subjective factors related to the Company's business. These included, among
other things, the Company's strong cash position and its continued generation of
strong cash flow, the Company's performance relative to both its public and
private competitors, the Chief Executive Officer's ability to develop and
maintain significant business relationships for the Company and the complexity
of managing an international service business. The Committee also noted the
following items:
1. Earnings per share were 39% higher in 1998 than in 1997.
2. The Company's stock performance during the five year period from January
1, 1994 through December 31, 1998, calculated on a total return to
investors basis, ranked 15th out of over 2,000 New York Stock Exchange
companies, which placed the Company in the top 1%.
3. In November 1998, FORTUNE magazine cited the Company as one of the
better performers among small and medium companies as measured by "market
valued added".
In determining executive compensation, the Compensation Committee considers,
among other factors, the possible tax consequences to the Company and to the
executives. However, tax consequences, including but not limited to tax
deductibility by the Company, are subject to many factors (such as changes in
the tax laws and regulations or interpretations thereof and the timing and
nature of various decisions by executives regarding options and other rights)
that are beyond the control of either the Compensation Committee or the Company.
In addition, the Compensation Committee believes that it is important for it to
retain maximum flexibility in designing compensation programs that meet its
stated objectives. For all of the foregoing reasons, the Compensation Committee,
while considering tax deductibility as one of its factors in determining
compensation, will not limit compensation to those levels or types of
compensation that will be deductible. The Compensation Committee will, of
course, consider alternative forms of compensation, consistent with its
compensation goals, that preserve deductibility.
Andrew S. Berwick, Jr.
Frederick P. Furth
Thomas J. Ryan
18
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Arthur Andersen LLP, independent public accountants,
to audit the books, records and accounts of the Company during 1999. Arthur
Andersen LLP has acted as auditors of the Company and its predecessor since
1977. Representatives of that firm will be present at the Meeting and will have
the opportunity to make a statement if they desire to do so. They will also be
available to respond to questions.
STOCKHOLDER PROPOSALS
In order to be included in the Company's proxy statement and form of proxy
for the 2000 Annual Meeting of Stockholders, a stockholder proposal must, in
addition to satisfying the other requirements of the Securities and Exchange
Commission's rules and regulations, be received at the principal executive
offices of the Company not later than November 25, 1999. Any stockholder
proposal not intended for inclusion in the Company's proxy statement and form of
proxy must, in addition to satisfying the other requirements of the Company's
By-laws, be received at the principal executive offices of the Company between
February 6, 2000 and March 7, 2000, inclusive, in order to be presented at the
Annual Meeting.
OTHER MATTERS
The proxy holders are authorized to vote, in their discretion, upon any
other business that comes before the Meeting and any adjournment of the Meeting.
The Board knows of no other matters which will be presented to the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
STEVEN KAREL
SECRETARY
Menlo Park, California
March 25, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED, POST-PAID ENVELOPE. ALTERNATIVELY, YOU MAY,
IF YOU WISH, VOTE VIA THE INTERNET AT HTTP://WWW.EPROXY.COM/RHI. ALSO, U.S.
STOCKHOLDERS MAY VOTE VIA TOLL-FREE TELEPHONE CALL WITH A TOUCH-TONE TELEPHONE
TO 1-800-842-1208.
19
<PAGE>
ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CA 94025
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold M. Messmer, Jr. and Andrew S. Berwick,
Jr. as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side
hereof, all the shares of common stock of Robert Half International Inc. held
of record by the undersigned on March 16, 1999 at the annual meeting of
stockholders to be held on May 13, 1999 or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
------------
See Reverse
Side
------------
- -------------------------------------------------------------------------------
TRIANGLE FOLD AND DETACH HERE TRIANGLE
YOU MAY VOTE IN ANY OF THE FOLLOWING THREE WAYS:
1. Mark, sign and date the attached proxy card and return it in the enclosed
envelope.
2. Vote via the internet at http://www.eproxy.com/rhi. You will need the
Control Number that appears in the box in the lower right corner of the
reverse side of this card.
3. U.S. stockholders may vote by telephone by calling 1-800-840-1208 from a
touch-tone telephone. There is no charge for this call. You will need
the Control Number that appears in the box in the lower right corner of
the reverse side of this card.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY. ----- Please mark
X your choices
----- like this
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
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1. Election of Directors: [01] Frederick A. Richman, [02] Thomas J. Ryan,
[03] J. Stephen Schaub.
/ / FOR all nominees listed / / WITHHOLD AUTHORITY
above (except as marked to vote for all
to the contrary below) nominees listed above
(INSTRUCTION: To withhold authority to vote for
any individual nominee, write nominee's name on
the space provided below.)
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FOR AGAINST ABSTAIN
2. Proposal to amend the By-laws.
/ / / / / /
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3. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.
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__ __ Please sign exactly as name appears
| hereon. When shares are held by joint
| tenants, both should sign. When
| signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporation name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Date ___________________________, 1999
Signature ____________________________
Signature, if held jointly ___________
PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
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TRIANGLE FOLD AND DETACH HERE TRIANGLE
YOU MAY VOTE IN ANY OF THE FOLLOWING THREE WAYS:
1. Mark, sign and date the attached proxy card and return it in the enclosed
envelope.
2. Vote via the internet at http://www.eproxy.com/rhi. You will need the
Control Number that appears in the box in the lower right corner of this
card.
3. U.S. stockholders may vote by telephone by calling 1-800-840-1208 from a
touch-tone telephone. There is no charge for this call. You will need
the Control Number that appears in the box in the lower right corner of
this card.
