<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
</TABLE>
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):
<TABLE>
<S> <C> <C>
/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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</TABLE>
<PAGE>
ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD
THURSDAY, MAY 4, 2000
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 4, 2000 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 ratify certain amendments to the Company's Equity Incentive Plan and
re-approve the plan, as amended, in its entirety.
3. To ratify certain amendments to the Company's Annual Performance Bonus
Plan and re-approve the plan, as amended, in its entirety.
4. 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 9, 2000 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 24, 2000
--IMPORTANT--
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED FORM AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
ALTERNATIVELY, YOU MAY, IF YOU WISH, VOTE VIA THE INTERNET OR VIA TOLL-FREE
TELEPHONE CALL FROM A TOUCH-TONE TELEPHONE IN THE U.S. BY FOLLOWING THE
DIRECTIONS ON THE ENCLOSED FORM. 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 24, 2000. 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 4, 2000, at The Westin Hotel--San Francisco Airport,
1 Old Bayshore Highway, Millbrae, California, 94030. Only stockholders of record
on March 9, 2000 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 9, 2000 the Company had outstanding and entitled to vote
88,566,384 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 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 split.
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 eight and there are no vacancies.
The Board of Directors is divided into three classes serving staggered three
year terms. Currently, there are three directors in Class II, whose terms expire
in 2002, two directors in Class III, whose terms expire in 2001, and three
directors in Class I, whose terms expire at the Meeting. Each Director holds
office until the annual meeting in the year in which his term expires and until
his successor is elected and qualified.
The current members of Class I, whose terms expire at the Meeting, are
Andrew S. Berwick, Jr., Frederick P. Furth and M. Keith Waddell, all of whom are
nominees.
1
<PAGE>
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. Berwick, Furth and Waddell 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, 2000, 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. ..................................... 66 I 1981
Frederick P. Furth.......................................... 65 I 1983
Edward W. Gibbons........................................... 63 III 1988
Harold M. Messmer, Jr. ..................................... 53 III 1982
Frederick A. Richman........................................ 54 II 1994
Thomas J. Ryan.............................................. 75 II 1987
J. Stephen Schaub........................................... 59 II 1989
M. Keith Waddell............................................ 42 I 1999
</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 Jack in the Box, 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.
Mr. Waddell has been Vice Chairman of the Company since 1999, Chief
Financial Officer of the Company since 1988 and Treasurer since 1987. He served
as Vice President from 1986, when he joined the Company, until 1993, and Senior
Vice President from 1993 until 1999.
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.
2
<PAGE>
The Audit Committee, composed of Messrs. Berwick, Richman and Schaub, met
once during 1999. 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 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 1999. 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 five times during 1999. The Stock
Plan Committee administers the Company's equity incentive plans.
The Executive Committee, composed of Messrs. Messmer, Furth and Gibbons, did
not meet during 1999. 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 1999. 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, 2000, and his or her current positions and offices
with the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICE
---- -------- ------
<S> <C> <C>
Harold M. Messmer, Jr. ......................... 53 Chairman of the Board, President and Chief
Executive Officer
M. Keith Waddell................................ 42 Vice Chairman, Chief Financial Officer and
Treasurer
Robert W. Glass................................. 41 Senior Vice President, Corporate Development
Barbara J. Forsberg............................. 39 Senior Vice President, Corporate Services
Steven Karel.................................... 49 Vice President, Secretary and General Counsel
</TABLE>
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.
Ms. Forsberg has been Senior Vice President, Corporate Services, since 2000,
Vice President of the Company since 1993 and served as Controller from 1990
until 1999.
Mr. Karel has been Vice President and General Counsel of the Company since
1989 and Secretary since 1993.
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.
3
<PAGE>
BENEFICIAL STOCK OWNERSHIP
The following table sets forth information as of February 29, 2000
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 1999, 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, 2000 ("Exercisable
Options"). All persons have sole voting and investment power except as otherwise
indicated.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY COMMON
NAME OF BENEFICIAL OWNER OWNED STOCK
------------------------ ----- -----
<S> <C> <C>
Capital Research and Management Company .................... 8,640,000(a) 9.8%
333 South Hope Street
Los Angeles, CA 90071
Ronald Baron................................................ 8,423,050(b) 9.5%
Baron Capital Group, Inc.
767 Fifth Avenue
New York, NY 10153
Primecap Management Company ................................ 7,356,100(c) 8.3%
225 South Lake Avenue
Pasadena, CA 91101
Ross Financial Corporation.................................. 5,553,300(d) 6.3%
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands, B.W.I.
Vanguard Primecap Fund ..................................... 5,000,000(e) 5.6%
P.O. Box 2600
Valley Forge, PA 19482
Andrew S. Berwick, Jr. ..................................... 306,000(f) 0.4%
Frederick P. Furth.......................................... 2,593,300(g) 2.9%
Edward W. Gibbons........................................... 845,835(h) 1.0%
Harold M. Messmer, Jr....................................... 2,922,903(i) 3.2%
Frederick A. Richman........................................ 82,500(j) 0.1%
Thomas J. Ryan.............................................. 192,318(k) 0.2%
J. Stephen Schaub........................................... 1,541,225(l) 1.7%
M. Keith Waddell............................................ 1,249,591(m) 1.4%
Robert W. Glass............................................. 349,708(n) 0.4%
Barbara J. Forsberg......................................... 248,812(o) 0.3%
Steven Karel................................................ 208,613(p) 0.2%
All executive officers and directors as a group
(11 persons).............................................. 10,540,805 11.5%
</TABLE>
- ------------------------
(a) Information is as of December 31, 1999, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Capital Research and Management Company, which identified itself as an
investment advisor in the Schedule 13G, sole dispositive power is held with
respect to all of such shares and no voting power is held with respect to
any of such shares.
(b) Information is as of March 2, 2000, the latest date for which information is
available to the Company. According to a Schedule 13G filed by Mr. Baron,
769,000 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 7,654,050 of
such shares.
4
<PAGE>
(c) Information is as of January 31, 2000, the latest date for which information
is available to the Company. According to a Schedule 13G filed by Primecap
Management Company, which identified itself as an investment advisor in the
Schedule 13G, sole dispositive power is held with respect to all of such
shares and sole voting power is held with respect to 1,356,100 of such
shares.
(d) Information is as of July 8, 1999, the latest date for which information is
available to the Company pursuant to a Schedule 13G filed by Ross Financial
Corporation.
(e) Information is as of December 31, 1999, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Vanguard Primecap Fund, which identified itself as an investment company
in the Schedule 13G, shared dispositive power is held with respect to all of
such shares and sole voting power is held with respect to all of such
shares.
(f) Includes 102,000 shares that may be acquired upon the exercise of
Exercisable Options.
(g) Includes 2,063,600 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 54,000 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.
(h) Includes 102,000 shares that may be acquired upon the exercise of
Exercisable Options. Also includes 15,000 shares owned by Mr. Gibbons' wife.
(i) Includes 1,596,599 shares that may be acquired upon the exercise of
Exercisable Options, 948,308 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, 356,668
shares as to which Mr. Messmer shares voting and dispositive power with his
wife and 17,524 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.
(j) Includes 72,000 shares that may be acquired upon the exercise of Exercisable
Options.
(k) Includes 102,000 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. Also includes 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.
(l) Includes 72,000 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 26,500 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
21,900 shares as to which Mr. Schaub has dispositive power but as to which
he has no pecuniary interest and 350 shares owned by Mr. Schaub's wife.
(m) Includes 678,114 shares that may be acquired upon the exercise of
Exercisable Options, 412,651 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 158,826
shares as to which Mr. Waddell shares voting and dispositive power with his
wife.
(n) Includes 186,672 shares that may be acquired upon the exercise of
Exercisable Options, 74,199 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, 86,797 shares
as to which Mr. Glass shares voting and dispositive power with his wife and
300 shares held by Mr. Glass's minor children.
5
<PAGE>
(o) Includes 133,774 shares that may be acquired upon the exercise of
Exercisable Options and 68,194 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.
(p) Includes 102,367 shares that may be acquired upon the exercise of
Exercisable Options and 80,453 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.
6
<PAGE>
COMPENSATION OF DIRECTORS
Each outside director received an annual fee of $30,000 for services as a
director during 1999, $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 Messrs. Messmer and
Waddell) 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 or by reason of death or disability,
and options granted in 1999 will remain outstanding and unaffected by
termination in all circumstances. Each of the outside directors (all directors
other than Messrs. Messmer and Waddell) was, pursuant to the terms of the plan,
granted an option on May 13, 1999 (the date of the 1999 Annual Meeting of
Stockholders) at an exercise price of $27.625 per share, the fair market value
on the date of grant. Each of such grants was for an option to purchase 12,000
shares.
7
<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 February 29, 2000, 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 1994 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 INC. PREVIOUS PEER GROUP INDEX(A) NEW PEER GROUP INDEX(B) S&P 500 INDEX
<S> <C> <C> <C> <C>
12/31/94 $100 $100 $100 $100
12/31/95 $174 $115 $114 $138
12/31/96 $284 $126 $143 $169
12/31/97 $500 $165 $196 $226
12/31/98 $556 $141 $178 $290
12/31/99 $357 $137 $167 $351
2/29/00 $528 $150 $181 $327
</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.
(b) 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 Interim Services Inc. The
only difference between the New Peer Group and the Previous Peer Group is
the substitution of Interim for Olsten. The Company's past proxy statements
used the Previous Peer Group Index. However, because of the acquisition of
Olsten by another entity, it is anticipated that its stock will not be
available for inclusion in future peer group calculations. Instead, the
Company will use the New Peer Group Index in future proxy statements.
8
<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 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
--------------------- -------------------------------------------------------------
RESTRICTED
STOCK AWARDS(A)
--------------------------- SECURITIES
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....... 1999 $525,000 $1,593,581 204,039(c) $ 4,246,562 580,893 shares $266,844
Chairman and Chief 1998 $525,000 $1,668,000 226,710 $ 8,756,674 498,500 shares $306,673
Executive Officer 1997 $500,000 $1,204,819 380,868 $11,635,205 465,500 shares $319,011
M. Keith Waddell............ 1999 $265,000 $ 834,414 93,653(c) $ 1,949,153 340,723 shares $290,610
Vice Chairman 1998 $265,000 $ 834,000 123,315 $ 4,761,838 198,750 shares $274,570
1997 $247,500 $ 572,289 155,561 $ 4,618,412 172,500 shares $227,434
Robert W. Glass............. 1999 $182,750 $ 262,093 21,150(c) $ 440,184 31,300 shares $109,419
Senior Vice President 1998 $170,000 $ 261,320 26,000 $ 1,039,563 39,600 shares $104,690
1997 $160,000 $ 228,916 12,000 $ 450,000 22,850 shares $ 94,099
Barbara J. Forsberg......... 1999 $182,750 $ 167,493 15,750(c) $ 327,797 23,500 shares $ 81,454
Senior Vice President 1998 $170,000 $ 166,800 34,000 $ 1,312,219 26,000 shares $ 73,579
1997 $160,000 $ 108,434 18,800 $ 496,850 59,400 shares $ 60,544
Steven Karel................ 1999 $182,750 $ 151,351 21,150(c) $ 440,184 30,900 shares $ 81,323
Vice President 1998 $170,000 $ 150,120 23,500 $ 907,688 34,200 shares $ 76,266
1997 $160,000 $ 108,434 21,500 $ 806,250 32,100 shares $ 66,484
</TABLE>
- ------------------------------
(a) At December 31, 1999, Messrs. Messmer, Waddell, Glass and Karel and
Ms. Forsberg held an aggregate of 888,410, 385,158, 64,568, 75,616 and
65,100 shares of restricted stock, respectively, having a market value, on
that date of $25,375,210, $11,001,075, $1,844,224, $2,159,782 and
$1,859,419, 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 1999 include (a) $12,627 paid for
life insurance for Mr. Messmer and (b) $148,103, $215,714, $90,929, $66,790
and $68,615 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 1999
amounted to $106,114, $74,896, $18,490, $14,533 and $12,839 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.
9
<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% $44.50 01/01/09 $ 98,655*
191,698(c) 5.6% $41.8750 01/05/09 $3,256,713*
141,033(d) 4.2% $24.6875 07/20/09 $1,458,312**
242,162(e) 7.1% $20.8125 10/18/09 $2,148,130***
M. Keith Waddell...................... 3,100(c) 0.1% $44.50 01/01/09 $ 50,972*
161,738(c) 4.8% $41.8750 01/05/09 $2,747,730*
65,217(d) 1.9% $24.6875 07/20/09 $ 674,358**
110,668(e) 3.3% $20.8125 10/18/09 $ 981,695***
Robert W. Glass....................... 1,600(c) 0.1% $44.50 01/01/09 $ 26,308*
11,000(d) 0.3% $24.6875 07/20/09 $ 113,742**
18,700(e) 0.6% $20.8125 10/18/09 $ 165,881***
Barbara J. Forsberg................... 1,000(c) 0.0% $44.50 01/01/09 $ 16,442*
8,333(d) 0.2% $24.6875 07/20/09 $ 86,165**
14,167(e) 0.4% $20.8125 10/18/09 $ 125,670***
Steven Karel.......................... 1,200(c) 0.0% $44.50 01/01/09 $ 19,731*
11,000(d) 0.3% $24.6875 07/20/09 $ 113,742**
18,700(e) 0.6% $20.8125 10/18/09 $ 165,881***
</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 $1,500,000,000 from its value on the grant date.
** 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 $950,000,000 from its value on the grant date.
*** 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 $825,000,000 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 and Ms. Forsberg 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
42.58%, an interest rate of between 4.56% and 6.03%, depending on the grant
date, no dividends, a 3% annual reduction until the option is fully vested
to reflect risk of forfeiture and a tenor of 5.5 years. The actual value, if
any, realized on the exercise of an option will depend on the excess of the
fair market value of
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<PAGE>
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) This option becomes exercisable in four equal annual installments on each of
December 31, 1999, December 31, 2000, December 31, 2001 and December 31,
2002.
(d) This option becomes exercisable in four equal annual installments on each of
July 20, 2000, July 20, 2001, July 20, 2002 and July 20, 2003.
(e) This option becomes exercisable in four equal annual installments on each of
October 18, 2000, October 18, 2001, October 18, 2002 and October 18, 2003.
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......... 0 0 1,506,599 1,190,407 $17,260,324 $ 4,824,865
M. Keith Waddell.............. 0 0 648,114 526,993 $ 7,415,193 $ 2,022,651
Robert W. Glass............... 0 0 185,422 81,563 $ 3,384,625 $ 283,789
Barbara J. Forsberg........... 0 0 164,278 74,768 $ 2,807,858 $ 279,780
Steven Karel.................. 0 0 102,367 82,688 $ 1,275,356 $ 274,111
</TABLE>
Harold M. Messmer, Jr., Chairman of the Board, President and Chief Executive
Officer, has an employment agreement with the Company terminating December 31,
2003. 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 one year 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) an annual payment, through the stated
expiration date of his agreement, equal to the sum of his base salary, at the
rate in effect on the date of termination, and an amount equal to his bonus for
the calendar year prior to termination, 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, 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 have been entered into with Messrs. Messmer, Waddell,
Glass and Karel. Each severance agreement provides that the employee will be
paid 24 months base salary (36 months if the employee has served as a director)
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. However, if the termination occurs within one year following a
change in control of the Company (as defined in the agreements), then in lieu of
the foregoing bonus payment the employee will receive monthly payments equal to
1/12 of the prior year's bonus for 24 months (36 months if the employee has
served as a director). In addition, if the employee has served as a director,
the foregoing payments will also be made in the event of any voluntary
termination within one year following a change in control. (Notwithstanding the
foregoing, no individual shall receive salary and bonus payments under both this
agreement and any other agreement. Instead, only the greater
11
<PAGE>
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
or Senior Executive Retirement Plans (defined contribution plans that pay
benefits only upon retirement, death or other termination of employment). The
Company has also entered into a severance agreement with Ms. Forsberg which
provides for the foregoing benefits in the event of a termination of her
employment without cause within one year following a change in control.
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.
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
12
<PAGE>
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.
13
<PAGE>
PROPOSAL REGARDING THE EQUITY INCENTIVE PLAN
The Company's Equity Incentive Plan (the "Incentive Plan"), originally
adopted by stockholders as the "1993 Incentive Plan" in 1993 and amended by
stockholders in 1996, provides for the discretionary grant of stock options and
restricted stock by the Stock Plan Committee to key employees. Section 162(m) of
the Internal Revenue Code requires that the stockholders re-approve the material
terms of the Incentive Plan at least every five years. In addition to
ratification of certain amendments described below, the Company is asking
stockholders to re-approve the Incentive Plan in order to satisfy
Section 162(m).
PROPOSAL
The Company has long adhered to a policy of emphasizing equity grants in its
compensation of senior management. By making a significant portion of executive
compensation contingent upon long-term positive share price performance, the
interests of management are aligned with the interests of stockholders. The
Board of Directors believes that this philosophy has served the Company well,
and intends to continue this policy in the future. However, the Board has noted
that the significant expansion of the Company's operations in recent years has,
as can be expected, necessitated an increase in the number of senior managers.
The Incentive Plan currently provides that the total number of shares that
may be issued or transferred in each calendar year under such plan is 1.5% of
the total issued and outstanding shares of the Company (excluding treasury
shares) as of January 1 of that year. The Incentive Plan also currently provides
that the number of shares of stock with respect to which grants may be made to
any one individual in any calendar year may not exceed 75% of the number of
shares of stock available for grants during 1994. In order to continue the
policy of emphasizing equity in the compensation of senior managers, the Board
believes that it would be appropriate to increase the number of shares available
for aggregate and individual annual grants under the Incentive Plan.
Accordingly, it is proposed that stockholders approve amendments that would
(i) increase the number of shares available in each year, commencing with 2000,
to 2% of the issued and outstanding shares (excluding treasury shares) as of
January 1 of that year and (ii) increase the number of shares that can be
granted to an individual in any calendar year, commencing with 2000, to 1.5% of
the number of shares of stock issued and outstanding (excluding treasury shares)
on January 1 2000. Section 162(m) of the Internal Revenue Code and the rules of
the New York Stock Exchange condition effectiveness of these amendments on
stockholder approval.
SUMMARY OF THE INCENTIVE PLAN AND THE AMENDMENTS
The following description of the Incentive Plan is qualified in its entirety
by reference to the plan, which, in its amended form, is attached hereto as
Appendix A. Other than increasing the number of shares available under the
Incentive Plan on an aggregate and individual basis, the proposed amendments
will not change the terms and conditions of the plan.
The Incentive Plan provides for the issuance of stock options or restricted
stock to key employees of the Company that are selected by the Stock Plan
Committee of the Board of Directors (the "Administrator"). The maximum number of
key employees currently eligible to participate is approximately ten. The total
number of shares that may be issued or transferred under the Incentive Plan
during any year is 1.5% of the total issued and outstanding shares of the
Company (excluding treasury shares) on January 1 of that year, subject to
adjustment for stock splits, stock dividends and similar occurrences. In
accordance with such formula, grants for a total of 1,337,809 shares may be made
during 2000. If the proposed amendments are approved, this would be increased to
1,783,746. In addition, the Incentive Plan also currently provides that the
number of shares of stock with respect to which grants may be made to any one
individual in any calendar year may not exceed 75% of the number of shares of
stock available for grants during 1994, subject to adjustment for stock splits,
stock dividends and similar occurrences. In accordance with such formula, grants
for a maximum of 905,620 shares may be made to any individual in any year. If
the
14
<PAGE>
proposed amendments are approved, this number would increase to 1,337,809. The
Administrator may amend, alter, suspend or discontinue the Incentive Plan at any
time without stockholder approval, except as required by applicable law. The
Incentive Plan is of unlimited duration.
Any options which may be granted will be at such price as may be determined
by the Administrator, which may not be less than 100% of fair market value on
the date of grant. Payment for option exercises may be by cash or by delivery of
shares of the Company's common stock that have been owned for at least six
months, a full recourse promissory note or an irrevocable commitment of a
securities broker to sell the shares and remit the exercise price to the
Company. Options generally vest at the rate of 25% per year for each of the
first four years following the grant, although alternate vesting schedules may
be established by the Administrator. Vested portions of options may be exercised
at any time prior to the expiration of the option. Unless otherwise determined
by the Administrator, upon termination of employment, unvested options expire
and vested options may be exercised for only a limited period. Options cannot
have a term of more than ten years. The fair market value of the Company's
common stock on February 29, 2000, was $42.25 per share.
Recipients of restricted stock awards do not pay any cash consideration to
the Company for the shares. Restricted stock grants generally vest at the rate
of 25% per year for each of the first four years following the grant, although
alternate vesting schedules may be established by the Administrator. In
addition, the Administrator may make grants subject to performance conditions.
Pursuant to a performance condition, the amount of a restricted stock award is
subject to reduction, pursuant to a formula specified in the Incentive Plan, if
the Company's earnings per share for the performance period do not equal or
exceed the earnings per share target for the period set by the Administrator.
Grants vest immediately and automatically upon the occurrence of a Change in
Control (as defined in the plan). Unvested shares may not be sold or transferred
by the holder and are forfeited by the holder upon the termination of his
employment, unless otherwise determined by the Administrator. The holder of a
restricted stock award does, however, have the right to vote all shares subject
to such grant, and receive all dividends with respect to such shares, whether or
not the shares have vested. (The Company does not currently pay dividends.)
FEDERAL INCOME TAX CONSEQUENCES
The amendments will have no effect upon the tax consequences to recipients
of awards made under the Incentive Plan. Nor will the amendments have any effect
upon the tax consequences to the Company of restricted stock grants not made
subject to a performance condition.
With respect to a restricted stock award granted after the meeting and made
subject to a performance condition, the holder will recognize ordinary income
when the award vests. The Company will be entitled to a deduction equal to the
amount of income recognized by the holder of such a restricted stock award
subject to a performance condition. However, if the plan is not re-approved by
stockholders, deductibility by the Company with respect to such a restricted
stock award may be limited by Section 162(m) of the Internal Revenue Code.
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.
15
<PAGE>
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL RELATING TO THE INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD WILL
BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES.
PROPOSAL REGARDING THE ANNUAL PERFORMANCE BONUS PLAN
At the 2000 Annual Meeting of Stockholders, the stockholders will be asked
to ratify amendments to the Annual Performance Bonus Plan ("Performance Plan")
and to re-approve the Performance Plan as a whole. Section 162(m) of the
Internal Revenue Code requires that the stockholders re-approve the material
terms of the Performance Plan at least every five years. Therefore, in addition
to ratification of the amendments described below, the Company is also asking
stockholders to re-approve the Performance Plan in order to satisfy
Section 162(m). The following description of the Performance Plan is qualified
in its entirety by reference to the Performance Plan, which is attached hereto
as Appendix B.
SUMMARY OF THE ANNUAL PERFORMANCE BONUS PLAN
The Performance Plan provides for the annual grant of cash bonuses to
elected executive officers and to such other senior executives as may be
designated from time to time by the Administrator of the Performance Plan (which
is currently the Compensation Committee of the Board of Directors). As of the
date of this Proxy Statement, the Company had seven participants in the
Performance Plan. The Administrator has the authority to alter, amend or
discontinue the Performance Plan at any time without stockholder approval,
except as required by applicable law. Each year, the Administrator will
establish a target bonus for each participating executive. The Administrator
will also establish a target earnings per share for the Company. If that target
earnings per share is actually achieved, each participating individual will
receive his target bonus. If the actual earnings per share varies from the goal,
the individual's bonus will also vary, in direct proportion to the variance
between actual earnings per share and target earnings per share, as provided by
the Performance Plan. However, no individual may receive a bonus in any year in
excess of twice his or her target bonus for that year and no bonus will be paid
if actual earnings are less than 50% of target earnings. In addition, no
individual may receive a bonus in any year in excess of five times the highest
bonus paid to any executive officer with respect to 1995 (as reported in the
Summary Compensation Table of the Proxy Statement for the 1996 Annual Meeting of
Stockholders). Bonuses payable under the performance Plan are intended to be
performance based and deductible under Section 162(m) of the Internal Revenue
Code.
PROPOSAL
The Company's compensation philosophy over the last several years has
evolved toward making a greater percentage of each executive's annual
compensation contingent on company performance. An example of this is the
allocation of cash compensation between base salary (which is not performance
based) and bonus (which is performance based). The Compensation Committee views
this as a positive development for stockholders, as it more closely aligns the
interests of executives with the interests of stockholders by making a larger
percentage of compensation contingent upon Company performance. However, the
Compensation Committee's ability to continue this trend is restricted by the
terms of the Performance Plan, which limits bonuses thereunder to any individual
in any year to five times the bonus paid for 1995, which means that the maximum
bonus payable to any individual in any year is $3,233,435. The proposed
amendments would raise this upper limit to four times the highest bonus paid for
1999, as reported in this proxy statement, effective commencing with 2000, thus
raising the annual limit to $6,374,324 and giving the Compensation Committee
more flexibility in future years in fashioning compensation arrangements that
link pay to performance. Establishing the target level of bonuses would remain
at the discretion of the Compensation Committee. Section 162(m) of the Internal
Revenue Code requires that stockholders approve this amendment in order for the
new upper limit to be effective.
16
<PAGE>
Accordingly, stockholders are asked to ratify amendments to the Performance
Plan that substitute the clause "but in no event may such amount be in excess of
four times the highest bonus paid by the Company to any Eligible Executive with
respect to 1999, as reported by the Company in its Proxy Statement for the 2000
Annual Meeting of Stockholders" for the clause "but in no event may such amount
be in excess of five times the highest bonus paid by the Company to any Eligible
Executive with respect to 1995, as reported by the Company in its Proxy
Statement for the 1996 Annual Meeting of Stockholders" each of the three times
such clause appears in the Performance Plan.
FEDERAL INCOME TAX CONSEQUENCES
The amendments will have no effect upon the tax consequences to recipients
of performance bonuses paid under the Performance Plan. Subject to the approval
by the stockholders of the proposal described herein, the Company will be
entitled to a deduction equal to the amount of income recognized by the
recipient of a performance bonus. However, if the proposal is not approved by
stockholders, and the Compensation Committee implements alternative methods of
paying bonuses in lieu of the Performance Plan, the future deductibility by the
Company of any such bonuses may be limited by Section 162(m) of the Internal
Revenue Code.
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 UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSAL RELATING TO THE PERFORMANCE PLAN. PROXIES SOLICITED BY THE BOARD
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES.
17
<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 1999 and are expected
to aggregate a similar amount in 2000. 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 to the
Company, O'Melveny & Myers or Mr. Richman.
18
<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 notes that the labor
market is the tightest it has been in 30 years, leading to intense competition
for employees at all levels. 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.
19
<PAGE>
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 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 notes the following items:
1. The Company had record revenues of $2.1 billion in 1999, a 16% increase
over 1998 and the eighth consecutive year in which revenues increased
over the prior year.
2. The Company had record earnings per share of $1.53 in 1999, the eighth
consecutive year in which earnings per share increased over the prior
year.
3. In January 2000, the Company appeared on the FORBES "Platinum List" of
top business services firms for return on equity and growth in revenue
and net income.
4. In February 2000, FORTUNE magazine ranked the Company number one among
staffing firms for the second consecutive year on its list of "America's
Most Admired Companies."
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
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Arthur Andersen LLP, independent public accountants,
to audit the books, records and accounts of the Company during 2000. 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 2001 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 24, 2000. 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 3, 2001 and March 5, 2001, inclusive, in order to be presented at the
2001 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 24, 2000
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 FORM IN THE ENCLOSED, POST-PAID ENVELOPE. ALTERNATIVELY, YOU MAY,
IF YOU WISH, VOTE VIA THE INTERNET OR VIA TOLL-FREE TELEPHONE CALL FROM A
TOUCH-TONE TELEPHONE IN THE U.S. BY FOLLOWING THE DIRECTIONS ON THE ENCLOSED
FORM.
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APPENDIX A
ROBERT HALF INTERNATIONAL INC.
EQUITY INCENTIVE PLAN
(AS AMENDED)
1. PURPOSES. The principal purposes of the Robert Half International Inc.
Equity Incentive Plan (the "Plan") are: (a) to improve individual employee
performance by providing long-term incentives and rewards to key employees of
the Company, (b) to assist the Company in attracting, retaining and motivating
key employees with experience and ability, and (c) to align the interests of
such employees with those of the Company's stockholders.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "Administrator" means either the Board of Directors or a committee of
the Board of Directors of the Company, the composition and the size of which
shall cause such committee to satisfy the requirements of Rule 16b-3 of the
Exchange Act with respect to officers and directors.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the following:
(i) Any person or group (as such terms are defined in Section 13(d)(3) of
the Exchange Act), other than an employee benefit plan sponsored by the Company
or a subsidiary thereof or a corporation owned (directly or indirectly), by the
stockholders of the Company in substantially the same proportions of the
ownership of stock of the Company, shall become the beneficial owner of
securities of the Company representing 20% or more, or commences a tender or
exchange offer following the successful consummation of which the offerer and
its affiliates would beneficially own securities representing 20% or more, of
the combined voting power of then outstanding securities ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise; PROVIDED, HOWEVER, that
a Change in Control shall not be deemed to include the acquisition by any such
person or group of securities representing 20% or more of the Company if such
party has acquired such securities not with the purpose nor with the effect of
changing or influencing the control of the Company, nor in connection with or as
a participant in any transaction having such purposes or effect, including,
without limitation, not in connection with such party (A) making any public
announcement with respect to the voting of such shares at any meeting to
consider a merger, consolidation, sale of substantial assets or other business
combination or extraordinary transaction involving the Company, (B) making, or
in any way participating in, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A under the Exchange Act) to vote any voting
securities of the Company (including, without limitation, any such solicitation
subject to Rule 14a-11 under the Exchange Act) or seeking to advise or influence
any party with respect to the voting of any voting securities of the Company,
directly or indirectly, relating to a merger or other business combination
involving the Company or the sale or transfer of substantial assets of the
Company, (C) forming, joining or in any way participating in any "group" within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company, directly or indirectly, relating to a merger or other
business combination involving the Company or the sale or transfer of any
substantial assets of the Company, or (D) otherwise acting, alone or in concert
with others, to seek control of the Company or to seek to control or influence
the management or policies of the Company.
(ii) The stockholders of the Company shall approve any plan or proposal for
the liquidation or dissolution of the Company.
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(iii) A change in the composition of the Board of Directors of the Company
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company).
As a result of or in connection with any cash tender offer, merger, or other
business combination, sale of assets or contested election, or combination of
the foregoing, the persons who were directors of the Company just prior to such
event shall cease within one year to constitute a majority of the Board.
(iv) The Company's stockholders approve a definitive agreement providing for
a transaction in which the Company will cease to be an independent publicly
owned corporation.
(v) The stockholders of the Company approve a definitive agreement (A) to
merge or consolidate the Company with or into another corporation in which the
holders of the Stock immediately before such merger or reorganization will not,
immediately following such merger or reorganization, hold as a group on a
fully-diluted basis both the ability to elect at least a majority of the
directors of the surviving corporation and at least a majority in value of the
surviving corporation's outstanding equity securities, or (B) to sell or
otherwise dispose of all or substantially all of the assets of the Company.
(d) "Common Stock" or "Stock" means Robert Half International Inc. Common
Stock, par value $.001 per share.
(e) "Company" means Robert Half International Inc., its divisions and direct
and indirect subsidiaries.
(f) "Continuous Employment" means employment with the Company or any
Subsidiary, or serving as a director or consultant to the Company or any
Subsidiary, without any termination or leave of absence, except for a leave of
absence approved by the Company or any Subsidiary which is less than six
consecutive months in duration.
(g) "Disability" or "Disabled" shall mean (i) a physical or mental condition
which, in the judgment of the Administrator based on competent medical evidence
satisfactory to the Administrator (including, if required by the Administrator,
medical evidence obtained by an examination conducted by a physician selected by
the Administrator), renders Holder unable to engage in any substantial gainful
activity for the Company and which condition is likely to result in death or to
be of long, continued and indefinite duration, or (ii) a judicial declaration of
incompetence.
(h) "Eligible Employee" means an employee of the Company or any Subsidiary
(including an employee who is a director and/or officer) who, as determined by
the Administrator in its sole discretion, has and exercises management functions
and responsibilities.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" means the closing sales price on the New York Stock
Exchange or the NASDAQ National Market System, as the case may be, on the date
the value is to be determined as reported in THE WALL STREET JOURNAL (Western
Edition). If there are no trades on such date, the closing price on the latest
preceding business day upon which trades occurred shall be the Fair Market
Value. If the Stock is not listed in the New York Stock Exchange or quoted on
the NASDAQ National Market System, the Fair Market Value shall be determined in
good faith by the Administrator.
(k) "Grant" shall mean an Option or a Restricted Stock Award.
(l) "Grant Date" means the date a Grant is made under the Plan.
(m) "Holder" means the recipient of a Grant pursuant to this Plan.
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(n) "Issue Date" means the date on which shares of Stock subject to a
Restricted Stock Award are issued or transferred by the Company to the account
of an Eligible Employee who has received such grant.
(o) "Minimum Withholding Taxes" means any applicable federal, state and
local income and other employment taxes which the Company is required to
withhold in connection with (i) the lapse of restrictions on Stock subject to a
Restricted Stock Award, (ii) the exercise of an Option, or (iii) the making of
an election under Section 83(b) of the Internal Revenue Code with respect to a
Restricted Stock Award.
(p) "Offer" means a tender offer or an exchange offer for the Company's
Stock.
(q) "Option" or "Stock Option" means a right granted under the Plan to a
Holder to purchase shares of Common Stock at a fixed price for a specified
period of time.
(r) "Option Price" means the price at which a share of Common Stock covered
by an Option granted hereunder may be purchased.
(s) "Optionee" means an Eligible Employee who has received a Stock Option
granted under the Plan.
(t) "Restricted Stock Award" means a grant described in Section 6 of the
Plan.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Subsidiary" means a "subsidiary" corporation as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended.
(w) "Vested" means that portion of a Grant with respect to which the Vesting
Date has arrived or passed.
(x) "Vesting Date" means the date specified in Section 5 or 6 hereof, as the
case may be, or such other date as shall be established by the Administrator or
otherwise on the Grant Date or thereafter.
(y) "Voting Shares" means the outstanding shares of the Company entitled to
vote for the election of Directors.
3. STOCK AVAILABLE. The number of shares of Stock for which Grants may be
made during each calendar year shall, commencing with the year 2000, be that
number which is equal to 2% of the number of issued and outstanding shares of
Common Stock of the Company (excluding treasury shares) as of January 1 of such
year. Any shares of Common Stock covered by Options which have terminated or
expired prior to exercise or have been cancelled without value shall not be
counted against the annual limit and shall be available for further grants
hereunder and shares constituting the portion of a Restricted Stock Award that
is forfeited before any dividends are paid upon such forfeited shares shall not
be counted against the annual limit and shall be available for further grants
hereunder. The foregoing number of shares available for Grants shall be subject
to any adjustments which may be made pursuant to Section 12 hereof. Shares of
Stock used for Options may be either shares of authorized but unissued Common
Stock or treasury shares or both. Shares of Stock used for Restricted Stock
Awards shall be treasury shares to the extent that treasury shares are
available, and, if no treasury shares are available, Restricted Stock Awards
shall be authorized but unissued Common Stock.
4. PARTICIPANTS. From time to time the Administrator shall, in its sole
discretion, but subject to all of the provisions of the Plan, determine which
Eligible Employees will be given Grants under the Plan, the number of Options or
shares of Restricted Stock to be granted to each such Eligible Employee and the
terms, conditions and restrictions of each such Grant. In making such
determinations, the Administrator shall take into account the nature of services
rendered and to be rendered by the respective recipients, their present and
potential contribution to the Company's success and such other factors as the
Administrator in its discretion deems relevant to the accomplishment of the
purposes of the Plan. In any year, the Administrator may approve Options to
Eligible Employees subject to differing terms and conditions and
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Restricted Stock Awards to Eligible Employees subject to differing terms and
conditions. During any calendar year, the number of shares of Stock with respect
to which Options or Restricted Stock are granted to any one individual may not
exceed 1.5% of the number of issued and outstanding shares of Common Stock as of
January 1, 2000, subject to adjustment pursuant to Section 12 hereof.
5. OPTIONS. Each Option granted hereunder shall be in writing and shall
contain such terms and conditions as the Administrator may determine, subject to
the following:
(a) PRICE. The Option Price shall be not less than 100% of the Fair Market
Value of Common Stock on the Grant Date.
(b) TERM AND EXERCISE. Options granted hereunder shall have a term of no
longer than ten years from the Grant Date. An Option may be exercised only as to
those portions of the Option that have Vested. Stock Options must be exercised
for full shares of Common Stock.
(c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be deemed
an Incentive Stock Option (as such term is defined in the Internal Revenue Code)
unless (a) such Option is designated as an Incentive Stock Option at the time of
grant by the Administrator and (b) such Option otherwise meets the requirements
for Incentive Stock Options specified in the Internal Revenue Code. However, no
Option designated as an Incentive Stock Option shall contain any restrictions
upon the ability of the Holder to dispose of Stock acquired upon the exercise
thereof other than as provided elsewhere in this Plan. During the life of the
Plan, the total number of shares for which Incentive Stock Options may be
granted may not exceed ten times the number of shares available for Grants under
the Plan during the first calendar year in which the Plan is in effect.
(d) VESTING. Unless otherwise determined by the Administrator, each Option
shall Vest as to twenty-five percent (25%) of the Stock covered by such Option
on each of the first through fourth anniversaries of the Grant Date.
Notwithstanding the foregoing, the Administrator may accelerate Vesting, in
whole or in part, under such terms and conditions as the Administrator deems
appropriate.
(e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give
written notice of exercise to the Company, specifying the number of shares of
Common Stock to be purchased and identifying the specific Options that are being
exercised. From time to time the Administrator may establish procedures relating
to such exercises. An Option is exercisable during a Holder's lifetime only by
the Holder or, with respect to options that are not designated as Incentive
Stock Options, under such other circumstances as may be permitted by
Rule 16b-3, or any successor rule, under the Exchange Act and all
interpretations of the staff of the Securities and Exchange Commission
thereunder.
(f) PAYMENT OF OPTION PRICE. The purchase price for Options being
exercised must be paid in full at time of exercise. Payment shall be, at the
option of the holder at the time of exercise, by any combination of cash, check
or delivery of shares of Common Stock that have been owned by Holder for at
least six months. If all or a portion of the purchase price is paid by delivery
of shares, the shares shall be valued at the Fair Market Value of such shares on
the date of exercise. In addition, unless the Administrator determines otherwise
at the time of grant, payment of the Option Price and of Minimum Withholding
Taxes may be made by (i) full recourse promissory note (secured or unsecured),
payable on such terms and bearing such interest as the Administrator may
determine or (ii) delivery (on a form acceptable to the Administrator) of an
irrevocable direction to a securities broker to sell shares of Common Stock and
to deliver part of the sales proceeds to the Company in payment of the full
exercise price and Minimum Withholding Taxes and receipt of written confirmation
from the securities broker of receipt of such irrevocable direction, the number
of shares sold, the price at which sold and the date of sale.
(g) NONTRANSFERABILITY OF OPTIONS. Options are not transferable except by
will, by the laws of descent and distribution, or, with respect to options that
are not designated as Incentive Stock Options, pursuant to a domestic relations
order or under such other circumstances as the Administrator may determine.
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6. RESTRICTED STOCK AWARDS. Each Restricted Stock Award made under the
Plan shall contain the following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be determined by the
Administrator at the time of grant.
(a) RIGHTS WITH RESPECT TO SHARES OF STOCK. Upon written acceptance by the
Eligible Employee of restrictions and other terms and conditions described in
the Plan and in the instrument evidencing such Restricted Stock Award, the
Eligible Employee shall be a Holder, and the Company shall cause to be issued or
transferred to the name of the Holder a certificate or certificates for the
number of shares of Stock granted. From and after the Issue Date, the Holder
shall have absolute ownership of such shares of Stock, including the right to
vote and to receive dividends thereon, subject to the terms, conditions and
restrictions described in the Plan and in the instrument evidencing the grant of
such Restricted Stock Award.
(b) RESTRICTIONS ON TRANSFER. Shares covered by a Restricted Stock Award
may not be sold, assigned, pledged, transferred or otherwise conveyed in any
manner until the Vesting Date for such shares.
(c) VESTING. Unless otherwise determined by the Administrator, each
Restricted Stock Award shall Vest as to twenty-five percent (25%) of the Stock
covered by such grant on each of the first through fourth Vesting Dates which
occur following the related Grant Date of such Restricted Stock Award.
Notwithstanding the foregoing, the Administrator may accelerate the lapsing of
restrictions on a Restricted Stock Award, in whole or in part under such terms
and conditions as the Administrator deems appropriate.
(d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions herein to
the contrary notwithstanding, a Restricted Stock Award shall automatically
become Vested upon (a) the Death or Disability of the Holder or (b) the
occurrence of a Change in Control.
(e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder granted a
Restricted Stock Award shall represent in writing that such Holder acknowledges
that, with respect to each Restricted Stock Award held by such Holder,
(i) Minimum Withholding Taxes shall be due with respect to shares of Stock
covered by such award, (ii) payment of Minimum Withholding Taxes to the Company
is the responsibility of Holder and (iii) payment of such Minimum Withholding
Taxes may require a significant cash outlay by Holder.
(f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any Holder
properly elects within thirty (30) days of the Grant Date to include in gross
income for federal income tax purposes an amount equal to the fair market value
of the shares of Stock on the Grant Date, such Holder shall pay in cash to the
Company in the calendar month of such Grant Date, or make arrangements
satisfactory to the Administrator to pay to the Company, any Minimum Withholding
Taxes required to be withheld with respect to such shares.
(g) CONSIDERATION. Recipients of Restricted Stock Awards made in treasury
shares shall not be required to pay any consideration to the Company. Recipients
of Restricted Stock Awards made in the form of previously unissued shares shall
be required to pay such minimum consideration, if any, as may be required by
applicable law. The Administrator shall determine the form of consideration at
the time of the award, which may include services rendered prior to the award.
(h) PERFORMANCE CONDITIONS. If so determined by the Administrator, any
grant of Restricted Shares shall be made subject to a Performance Condition in
addition to any vesting requirements imposed upon such grant. Such Performance
Condition shall operate as specified in this paragraph (h).
(1) As used in this paragraph (h), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes its written
certification of a Final Restricted Stock Award.
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EPS means fully diluted earnings per share, determined in accordance with
generally accepted accounting principles. For purposes of the foregoing
sentence, earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles and after
full accrual for the bonuses paid under this Plan.
EPS RATIO means the result obtained by dividing Preliminary EPS by Target
EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier and the
Original Restricted Stock Award.
MEASUREMENT YEAR means (a) in the case of a grant made in the first fiscal
quarter of a fiscal year, that fiscal year or (b) in the case of a grant made in
the second, third or fourth quarters of a fiscal year, the subsequent fiscal
year.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS Ratio is
greater than or equal to 0 and less than 0.9, (b) 1, if the EPS Ratio is greater
than or equal to 0.9, or (c) 0, if the EPS Ratio is less than 0.
NINE-MONTH PERIOD means the first three fiscal quarters of the Bonus Year.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares initially granted
pursuant to a Restricted Stock Award made subject to a Performance Condition.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month Period.
TARGET EPS means the EPS goal for the Performance Period set with respect to
a Restricted Stock Award made subject to a Performance Condition.
(2) A Restricted Stock Award shall be subject to a Performance Condition
only if the Administrator makes such a determination on the Grant Date or if the
Holder consents thereto.
(3) If a Restricted Stock Award is made subject to a Performance Condition,
the Administrator shall, not later than the end of the second calendar month of
the Measurement Year, determine the Target EPS for such award.
(4) After the public release by the Company of its unaudited results for the
third fiscal quarter of the Measurement Year, the Chief Financial Officer shall,
with respect to each Restricted Stock Award made subject to a Performance
Condition, (a) calculate the Preliminary EPS, (b) determine the Multiplier,
(c) calculate the Final Restricted Stock Award, and (d) deliver such calculation
to the Administrator.
(5) The Administrator shall, prior to the end of the Measurement Year,
review the information submitted by the Chief Financial Officer and certify, in
writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than the
Original Restricted Stock Award, the number of shares of the Original Restricted
Stock Award representing the difference shall be forfeited by the Holder. The
Final Restricted Stock Award shall bear the same vesting schedule as the
Original Restricted Stock Award, and on each Vesting Date the percentage of the
Final Restricted Stock Award that vests shall be the same as the percentage of
the Original Restricted Stock Award that would have vested had no shares been
forfeited as a result of the performance condition.
(7) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date by reason of
death, Disability or a Change in Control, then the Performance Condition shall
be cancelled and none of such shares shall be subject to reduction or forfeiture
as provided by the Performance Condition. Such shares shall be released to
Holder in accordance with the terms of this plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to a
Performance Condition shall vest prior to the Certification Date for any reason
other than death, Disability or a Change in Control, no
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shares shall be released to the Holder until after the Certification Date. No
such vesting prior to the Certification Date shall in any way be deemed a
satisfaction, waiver or cancellation of the Performance Condition, and such
Restricted Stock Award shall remain subject to reduction and forfeiture as
provided by the Performance Condition.
(i) ALTERNATIVE PERFORMANCE CONDITIONS. If so determined by the
Administrator, any grant of Restricted Shares shall be made subject to an
Alternative Performance Condition in addition to any vesting requirements
imposed upon such grant. Such Alternative Performance Condition shall operate as
specified in this paragraph (i).
(1) As used in this paragraph (i), the following terms shall have the
indicated meanings:
CERTIFICATION DATE means the date that the Administrator makes its written
certification of a Final Restricted Stock Award.
ACTUAL EPS means fully diluted earnings per share for the Performance
Period, determined in accordance with generally accepted accounting principles.
For purposes of the foregoing sentence, earnings shall mean income before
extraordinary items, discontinued operations and cumulative effect of changes in
accounting principles and after full accrual for the bonuses paid under this
Plan.
EPS RATIO means the result obtained by dividing Actual EPS by Target EPS.
FINAL RESTRICTED STOCK AWARD means the product of the Multiplier and the
Original Restricted Stock Award.
MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS Ratio is
greater than or equal to 0 and less than 0.9, (b) 1, if the EPS Ratio is greater
than or equal to 0.9, or (c) 0, if the EPS Ratio is less than 0.
ORIGINAL RESTRICTED STOCK AWARD means the number of shares initially granted
pursuant to a Restricted Stock Award made subject to an Alternative Performance
Condition.
PERFORMANCE PERIOD means the period of service to which the Alternative
Performance Condition relates.
TARGET EPS means the EPS goal set with respect to a Restricted Stock Award
made subject to an Alternative Performance Condition.
(2) A Restricted Stock Award shall be subject to an Alternative Performance
Condition only if the Administrator makes such a determination on the Grant Date
or if the Holder consents thereto.
(3) If a Restricted Stock Award is made subject to an Alternative
Performance Condition, the Administrator shall establish the Performance Period
and Target EPS for such award no later than the time permitted by
section 162(m) of the Internal Revenue Code.
(4) After the public release by the Company of its unaudited results for the
last fiscal quarter of the Performance Period, the Chief Financial Officer
shall, with respect to each Restricted Stock Award made subject to an
Alternative Performance Condition, (a) calculate the Actual EPS, (b) determine
the Multiplier, (c) calculate the Final Restricted Stock Award, and (d) deliver
such calculation to the Administrator.
(5) The Administrator shall review the information submitted by the Chief
Financial Officer and certify, in writing, each Final Restricted Stock Award.
(6) To the extent that a Final Restricted Stock Award is less than the
Original Restricted Stock Award, the number of shares of the Original Restricted
Stock Award representing the difference shall be forfeited by the Holder. The
Final Restricted Stock Award shall bear the same vesting schedule as the
Original Restricted Stock Award, and on each Vesting Date the percentage of the
Final Restricted Stock
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Award that vests shall be the same as the percentage of the Original Restricted
Stock Award that would have vested had no shares been forfeited as a result of
the Alternative Performance Condition.
(7) If all or a portion of a Restricted Stock Award made subject to an
Alternative Performance Condition shall vest prior to the Certification Date by
reason of death, Disability or a Change in Control, then the Alternative
Performance Condition shall be cancelled and none of such shares shall be
subject to reduction or forfeiture as provided by the Alternative Performance
Condition. Such shares shall be released to Holder in accordance with the terms
of this plan relating to vested shares.
(8) If all or a portion of a Restricted Stock Award made subject to an
Alternative Performance Condition shall vest prior to the Certification Date for
any reason other than death, Disability or a Change in Control, no shares shall
be released to the Holder until after the Certification Date. No such vesting
prior to the Certification Date shall in any way be deemed a satisfaction,
waiver or cancellation of the Alternative Performance Condition, and such
Restricted Stock Award shall remain subject to reduction and forfeiture as
provided by the Alternative Performance Condition.
7. WITHHOLDING TAXES. In order to enable the Company to meet any
applicable foreign, federal (including FICA), state and local withholding tax
requirements, a Holder shall be required to pay the Minimum Withholding Taxes.
No share of stock will be delivered to any Holder until Minimum Withholding
Taxes have been paid. At the option of the Holder, withholding taxes may be paid
by any combination of (a) cash, (b) reduction in the number of shares
deliverable to Holder (in the case of an Option) or by surrendering a portion of
the Restricted Stock Award to the Company (in either case "Share Reduction"),
(c) delivery to the Company of other shares of Common Stock owned by Holder
("Share Delivery") or (d) any other means approved or ratified by the
Administrator. If withholding taxes are paid by Share Reduction or Share
Delivery, such shares shall be valued at the Fair Market Value as of the date of
exercise or vesting. A Holder may elect to have additional shares delivered
pursuant to Share Delivery above the amount required to satisfy Minimum
Withholding Taxes. However, total combined Share Reduction and Share Delivery
may not exceed the total taxes that Holder will have to pay (assuming Federal
and state taxes are imposed at his marginal rate) by reason of the exercise or
vesting. In addition, any use of Share Delivery in excess of Minimum Withholding
Taxes must by effected with shares that have been held at least six months. In
the event that Minimum Withholding Taxes are not paid by Holder, to the extent
permitted by law the Company shall have the right, but not the obligation, to
cause such withholding taxes to be satisfied by Share Reduction or by offsetting
such withholding taxes against amounts otherwise due from the Company to the
Holder.
8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as any
restrictions or obligations imposed pursuant hereto shall apply to a share of
Stock (including, but not limited to, the restrictions or obligations imposed
pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each
certificate evidencing such share shall bear an appropriate legend referring to
the terms, conditions and restrictions. In addition, the Company may instruct
its transfer agent that shares of Stock evidenced by such certificates may not
be transferred without the written consent of the Company. Any attempt to
dispose of such shares of Stock in contravention of such terms, conditions and
restrictions shall be invalid. Certificates representing shares that have not
Vested or with respect to which Minimum Withholding Taxes have not been paid
will be held in custody by the Company or such bank or other institution
designated by the Administrator.
9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous
Employment with the Company or any Subsidiary shall terminate for any reason,
then, with respect to any portion of a Grant that has not Vested prior to or
concurrently with such termination (a) in the case of an Option, all rights to
such portion that has not Vested shall terminate and (b) in the case of a
Restricted Stock Award, all rights to the shares covered by any portion thereof
that has not Vested shall be forfeited; provided, however, that the
Administrator, in its sole discretion within ninety (90) days of such
termination of Continuous Employment, may notify the Holder in writing that the
Holder's rights in such portion that has not Vested will not terminate or be
forfeited and that the Holder shall continue to be the owner thereof, subject to
A-8
<PAGE>
such continuing restrictions as the Administrator may prescribe in such notice.
Options then held by the Holder which are Vested at the date of termination
shall continue to be exercisable by the Holder, or, if applicable, Holder's
estate, until the earlier of 90 days after such date or the expiration of such
Options in accordance with their terms. Notwithstanding the foregoing, (i) the
Administrator may in its sole discretion extend the period during which an
Option may be exercised following termination of employment at any time,
provided that any such extension does not exceed the Option's normal termination
date, and (ii) if exercise of an Option during the 90-day period described in
the previous sentence would subject the Holder to liability under Section 16 of
the Exchange Act, such Option shall be exercisable until the earliest of
(a) its normal termination date and (b) seven months after the last transaction
in Common Stock by the Holder prior to termination.
10. ADMINISTRATION. The Plan shall be administered by the Administrator,
which shall have full power and authority to administer and interpret the Plan
and to adopt such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan as the Administrator deems necessary or
advisable. The Administrator's powers include, but are not limited to (subject
to the specific limitations described herein), authority to determine the
employees who shall receive Grants under the Plan, determine the size and
applicable terms and conditions of Grants to be made to such employees,
determine the time when Grants will be made and authorize Grants to Eligible
Employees.
The Administrator's interpretations of the Plan, and all actions taken and
determinations made by the Administrator concerning any matter arising under or
with respect to the Plan or any Grants hereunder, shall be final, binding and
conclusive on all interested parties. The Administrator may delegate ministerial
functions hereunder, such delegation to be subject to such terms and conditions
as the Administrator in its discretion shall determine. The Administrator may as
to all questions of accounting rely conclusively upon any determinations made by
the independent public accountants of the Company.
11. COMPLIANCE WITH SECURITIES LAWS. No Option may be exercised and no
Stock may be issued pursuant to an Option or transferred pursuant to a
Restricted Stock Award unless the Administrator shall determine that such
exercise, issuance or transfer complies with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, applicable
state securities laws, and rules and regulations promulgated under each of the
foregoing, and the requirements of any stock exchange upon which the Stock may
then be listed or quotation system upon which the Stock may be quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance. If the Stock subject to this Plan is not registered under the
Securities Act and under applicable state securities laws, the Administrator may
require that the Holder deliver to the Company such documents as counsel for the
Company may determine are necessary or advisable in order to substantiate
compliance with applicable securities laws and the rules and regulations
promulgated thereunder.
12. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination, spin-off
or exchange of shares or other similar corporate change, appropriate adjustments
shall be made by the Administrator in the number of shares of Stock subject to
this Plan, the number of shares of Stock covered by each Grant and, in the case
of Options, the Option Price of such Option. Any such adjustment shall be
determined by the Administrator in its sole discretion, which determination
shall be conclusive and binding for all purposes of the Plan. Any new or
additional Stock to which a Holder of a Restricted Stock Award may be entitled
shall be subject to all the terms and conditions set forth in Section 6 of this
Plan. If fractional shares become due to any Holder as a result of any
adjustment, the Company may, at its option, pay cash in lieu thereof.
13. NO RIGHTS TO GRANTS OR EMPLOYMENT. No employee or other person shall
have any claim or right to a Grant under the Plan. Receipt of a Grant under the
Plan shall not give an employee any rights to receive any other Grant under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or any
Subsidiary.
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<PAGE>
14. RIGHTS AS SHAREHOLDER. A Holder under the Plan shall have no rights as
a holder of Common Stock with respect to Options granted hereunder, unless and
until certificates for shares of Common Stock are issued to such Holder.
15. PLAN UNFUNDED. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any grant under the Plan.
16. NO ASSIGNMENT. Except as specifically provided by law (including the
laws of descent and distribution) and elsewhere herein, no right or benefit
under, or interest in, the Plan shall be subject to assignment, and no such
right, benefit or interest shall be subject to attachment or legal process for
or against Holder or his or her beneficiaries, as the case may be.
17. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting
the Administrator shall be indemnified for actions with respect to the Plan to
the fullest extent permitted by the Certificate of Incorporation, as amended,
and the By-laws of the Company and by the terms of any indemnification agreement
that has been or shall be entered into from time to time between the Company and
any such persons.
19. HEADINGS. The headings used in this Plan are for convenience only, and
shall not be used to construe the terms and conditions of the Plan.
20. AMENDMENT. The Administrator may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Grants
theretofore made hereunder. The Administrator may amend or cancel the terms and
conditions of any outstanding Grant, determine whether cash will be paid or
Grants will be made in replacement of, or as alternatives to, outstanding Grants
or grants under any other incentive compensation plan; provided, however, that
no such change shall be adverse to the Holder thereof without such Holder's
consent.
21. EFFECTIVE DATE, TERMINATION. This Plan shall become effective upon
approval by the stockholders of the Company, and shall remain in effect until
terminated by the Board of Directors or Administrator.
A-10
<PAGE>
APPENDIX B
ROBERT HALF INTERNATIONAL INC.
ANNUAL PERFORMANCE BONUS PLAN
1. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
ADMINISTRATOR means a committee appointed by the Board of Directors of
the Company, which committee shall not have less than two Board members and
shall be disinterested within the meaning of Regulation 16b-3 under the
Securities Exchange Act of 1934.
ANNUAL DETERMINATION means the Target EPS and Target Bonuses determined
annually by the Administrator, as described in Section 4 of this Plan.
AWARD DATE means the date that the Administrator makes its written
certification of a Bonus pursuant to Section 5 or Section 6.
BONUS means a Preliminary Bonus, a Final Bonus, or both.
BONUS YEAR means the fiscal year with respect to which a Bonus is paid
pursuant to the Plan.
COMPANY means Robert Half International Inc., a Delaware corporation.
ELIGIBLE EXECUTIVE means (a) any elected executive officer of the
Company and (b) any executive of the Company who has senior management functions
and responsibilities, as designated by the Administrator.
EPS means fully diluted earnings per share, determined in accordance
with generally accepted accounting principles. For purposes of the foregoing
sentence, earnings shall mean income before extraordinary items, discontinued
operations and cumulative effect of changes in accounting principles and after
full accrual for the bonuses paid under this Plan.
FAIR MARKET VALUE of the Stock for a specified date means the closing
sales price of the Stock on the New York Stock Exchange, as reported in THE WALL
STREET JOURNAL (Western Edition), on such date or, if there are no trades on
such date, the closing price on the latest preceding business day upon which
trades occurred.
FINAL BONUS means the Year-End Bonus less the Preliminary Bonus, but
only if such number is greater than zero.
FINAL EPS means EPS calculated as of the end of a fiscal year.
FINAL MULTIPLIER means (a) the Final Ratio, if the Final Ratio is
greater than or equal to .5 and less than or equal to 2, (b) 2, if the Final
Ratio is greater than 2, or (c) 0, if the Final Ratio is less than .5.
FINAL RATIO means the result obtained by dividing Final EPS by Target
EPS.
NINE-MONTH PERIOD means the first three fiscal quarters of the Bonus
Year.
PLAN means this Annual Performance Bonus Plan.
POTENTIAL YEAR-END BONUS means, with respect to each Eligible Executive,
the product of the Final Multiplier and such Eligible Executive's Target Bonus,
but in no event may such amount be in excess of four times the highest bonus
paid by the Company to any Eligible Executive with respect to 1999, as reported
by the Company in its Proxy Statement for the 2000 Annual Meeting of
Stockholders.
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<PAGE>
PRELIMINARY BONUS means, with respect to each Eligible Executive, 85% of
the Product of the Preliminary Multiplier and such Eligible Executive's Target
Bonus, but in no event may such amount be in excess of four times the highest
bonus paid by the Company to any Eligible Executive with respect to 1999, as
reported by the Company in its Proxy Statement for the 2000 Annual Meeting of
Stockholders.
PRELIMINARY EPS means 1.334 multiplied by EPS for a Nine-Month Period.
PRELIMINARY MULTIPLIER means (a) the Preliminary Ratio, if the
Preliminary Ratio is greater than or equal to .5 and less than or equal to 2,
(b) 2, if the Preliminary Ratio is greater than 2, or (c) 0, if the Preliminary
Ratio is less than .5.
PRELIMINARY RATIO means the result obtained by dividing Preliminary EPS
by Target EPS.
REPAYMENT AMOUNT means that amount calculated in accordance with
Section 7.4 hereof.
STOCK means the Common Stock, $.001 par value, of the Company.
TARGET BONUS means that amount set forth, with respect to each Eligible
Executive, in an Annual Determination.
TARGET EPS means the EPS goal set annually by the Administrator, as set
forth in an Annual Determination.
YEAR-END BONUS means, with respect to each Eligible Executive, that
amount that the Administrator determines in accordance with Section 6 hereof,
but in no event may such amount be in excess of four times the highest bonus
paid by the Company to any Eligible Executive with respect to 1999, as reported
by the Company in its Proxy Statement for the 2000 Annual Meeting of
Stockholders.
2. PURPOSE. The purpose of the Plan is to attract, retain and motivate key
senior management employees by providing additional compensation, in accordance
with the terms and conditions set forth herein, based on the Company's earnings.
3. ADMINISTRATION. The Administrator is authorized to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and to take all actions
necessary or advisable for the Plan's administration. Whenever the Plan
authorizes or requires the Administrator to take any action, make any
determination or decision, or form any opinion, then any such action,
determination, decision or opinion by or of the Administrator shall be in the
absolute discretion of the Administrator and shall be final and binding upon all
persons in interest, including the Company and all Eligible Executives.
4. ANNUAL DETERMINATION. On an annual basis, not later than the end of the
first fiscal quarter of the Bonus Year, the Administrator shall determine the
following with respect to the Bonus Year:
(i) the Eligible Executives;
(ii) the Target EPS for the Bonus Year;
(iii) the Target Bonus for the Bonus Year for each Eligible Executive;
and
(iv) such other matters as are appropriate with respect to the Plan
(together, the "Annual Determination").
5. DETERMINATION OF PRELIMINARY BONUS. Within five business days after the
public release by the Company of its audited results for the third fiscal
quarter of the Bonus Year, the Chief Financial Officer shall (a) calculate the
Preliminary EPS, (b) determine the Preliminary Multiplier for the Bonus Year,
(c) calculate, with respect to each Eligible Executive, his Preliminary Bonus,
(d) deliver each calculation to the Administrator. The Administrator shall,
prior to the end of the Bonus Year, review the information submitted by the
Chief Financial Officer and certify, in writing, each Eligible Executive's
Preliminary Bonus.
B-2
<PAGE>
6. DETERMINATION OF YEAR-END BONUS. Within ten business days after the
public release by the Company of its audited results for the Bonus Year, the
Chief Financial Officer shall (a) calculate the Final EPS, (b) determine the
Final Multiplier for the Bonus Year, (c) calculate, with respect to each
Eligible Executive, the Potential Year-End Bonus and (d) deliver such
calculations to the Administrator. The Administrator shall, within 90 days of
the end of the Bonus Year, review the information submitted by the Chief
Financial Officer and certify, in writing, each Eligible Executive's Year-End
Bonus, which shall be the Potential Year-End Bonus; provided, however, that if
any Eligible Executive's Potential Year-End Bonus is greater than such Eligible
Executive's Preliminary Bonus, the Administrator may, in its sole discretion,
reduce such Year-End Bonus to such amount that is not less than the Eligible
Executive's Preliminary Bonus as the Administrator may determine.
7. BONUS PAYMENTS. Each Eligible Executive shall be paid a Bonus in
accordance with the following:
7.1. PRELIMINARY BONUS. The Company shall pay the Preliminary Bonus to
each Eligible Executive after such Preliminary Bonus is certified by the
Administrator but prior to the end of the Bonus Year. Notwithstanding the
foregoing, or anything appearing elsewhere herein, if an Eligible Executive is
not employed by the Company on the date that Preliminary Bonuses are certified
by the Administrator, then a pro-rated Preliminary Bonus shall be paid to such
Eligible Executive (a) if the termination of employment was by reason of the
Eligible Executive's death, (b) as provided by any agreement or arrangement in
existence on the date the Plan was approved by the stockholders or (c) under
such circumstances as the Administrator, in its sole discretion, may determine;
otherwise, no Preliminary Bonus in any amount shall be paid to such Eligible
Executive.
7.2. FINAL BONUS. The Company shall pay the Final Bonus to each
Eligible Executive after such Final Bonus is certified by the Administrator but
prior to the end of the first fiscal quarter following the Bonus Year.
Notwithstanding the foregoing, or anything appearing elsewhere herein, if an
Eligible Executive is not employed by the Company on the last day of the Bonus
Year, then a pro-rated Final Bonus shall be paid to such Eligible Executive
(a) if the termination of employment was by reason of the Eligible Executive's
death, (b) as provided by any agreement or arrangement in existence on the date
the Plan was approved by the stockholders or (c) under such circumstances as the
Administrator, in its sole discretion, may determine; otherwise, no Final Bonus
in any amount shall be paid to such Eligible Executive.
7.3. STOCK IN LIEU OF CASH. At the discretion of the Administrator on
the Award Date, up to 100% of any Final Bonus may be paid in shares of Stock
rather than in cash. Any such shares shall be valued at their Fair Market Value
on the Award Date. Fractional shares may not be granted. Any shares granted
pursuant to this Section 7.3 shall not be subject to forfeiture for any reason,
but shall be subject to a restriction that prevents any disposition thereof for
a period of six months and one day from the Award Date.
7.4. REPAYMENT OF PRELIMINARY BONUS. If the Year-End Bonus for an
Eligible Executive is less than such Eligible Executive's Preliminary Bonus,
such Eligible Executive shall repay such difference (the "Repayment Amount")
within fifteen (15) business days of notification thereof. To the extent the
Repayment Amount is unpaid, the Company shall, consistent with applicable law,
be entitled to deduct the Repayment Amount from any other amounts due by the
Company to such Eligible Executive, and to pursue any and all other legal and
equitable remedies to recover such Repayment Amount.
8. EMPLOYMENT. The selection of an employee as an Eligible Executive shall
not affect any right of the Company to terminate, with or without cause, such
person's employment at any time.
9. WITHHOLDING TAXES. The Company shall, to the extent permitted by law,
have the right to deduct from a Bonus any federal, state or local taxes of any
kind required by law to be withheld with respect to such Bonus.
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<PAGE>
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Administrator
may at any time amend, alter, suspend, or discontinue this Plan.
11. INDEMNIFICATION OF ADMINISTRATOR. Indemnification of members of the
group constituting the Administrator for actions with respect to the Plan shall
be in accordance with the terms and conditions of separate indemnification
agreements, if any, that have 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.
B-4
<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 9, 2000 at the annual meeting of
stockholders to be held on May 4, 2000 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. Vote by telephone by calling 1-800-840-1208 from a touch-tone telephone
in the U.S. 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 PROPOSALS 2 AND 3.
- -------------------------------------------------------------------------------
1. Election of Directors: [01] Andrew S. Berwick, Jr., [02] Frederick P.
Furth, [03] M. Keith Waddell.
/ / 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.)
- --------------------------------------------------
2. Proposal regarding the Equity Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
- --------------------------------------------------
3. Proposal regarding the Annual Performance Bonus
Plan.
/ / FOR / / AGAINST / / ABSTAIN
- --------------------------------------------------
4. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.
- -------------------------------------------------------------------------------
__ __ 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 __________________________, 2000
Signature ___________________________
Signature, if held jointly __________
PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
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. Vote by telephone by calling 1-800-840-1208 from a touch-tone telephone
in the U.S. 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.
