-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dFGetQqaTqVVWcYkiuJLLno704Rp8YnhKB1LURmXvQwy0hTOHk4AmBSq5SHph0DP bl8Qv4pJLJUinuOAi4UFBA== 0000912057-94-001011.txt : 19940323 0000912057-94-001011.hdr.sgml : 19940323 ACCESSION NUMBER: 0000912057-94-001011 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALF ROBERT INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000315213 STANDARD INDUSTRIAL CLASSIFICATION: 7361 IRS NUMBER: 941648752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 000-09141 FILM NUMBER: 94517265 BUSINESS ADDRESS: STREET 1: 2884 SAND HILL ROAD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 4158549700 FORMER COMPANY: FORMER CONFORMED NAME: BOOTHE FINANCIAL CORP /DE/ DATE OF NAME CHANGE: 19870721 FORMER COMPANY: FORMER CONFORMED NAME: BOOTHE INTERIM CORP DATE OF NAME CHANGE: 19600201 10-K 1 10-K FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ COMMISSION FILE NUMBER 1-10427 ROBERT HALF INTERNATIONAL INC. (Exact name of registrant as specified in its charter) DELAWARE 94-1648752 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
2884 SAND HILL ROAD, SUITE 200, MENLO PARK, CALIFORNIA 94025 (Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (415) 854-9700 ------------------------ Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED Common Stock, Par Value $1.00 per Share New York Stock Exchange Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/ As of February 28, 1994, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $271,221,383 based on the closing sale price on that date. This amount excludes the market value of 4,439,980 shares of Common Stock held by registrant's directors and officers and their affiliates. As of February 28, 1994, there were outstanding 13,518,520 shares of the registrant's Common Stock. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Proxy Statement to be mailed to stockholders in connection with the registrant's annual meeting of stockholders, scheduled to be held in May 1994, are incorporated by reference in Part III of this report. Except as expressly incorporated by reference, the registrant's Proxy Statement shall not be deemed to be part of this report. PART I ITEM 1. BUSINESS OVERVIEW Robert Half International Inc. (the "Company"), a Delaware corporation, primarily operates the nation's largest staffing services organization specializing in the accounting, financial, tax and banking fields. The Company operates through offices in the United States, Canada, the United Kingdom, Belgium and France, offering permanent and temporary personnel services under the names ROBERT HALF-R-and ACCOUNTEMPS-R-, respectively. Currently, the Company operates 153 offices and an additional 7 offices are operated by independent franchisees. The Company also places high-end office and administrative professionals (under the name OFFICETEAM-R-). ACCOUNTING, FINANCIAL, TAX AND BANKING SERVICES The Company provides skilled personnel to virtually all industries for a wide range of accounting, financial, tax, banking and data processing positions. The Company's office network maintains an interoffice referral system which enables the offices to cooperate in fulfilling a client's permanent and temporary employment requirements. The ROBERT HALF permanent placement services complement the ACCOUNTEMPS temporary staffing services by providing customers the ability to obtain both temporary and permanent employees from one source and by attracting applicants for permanent positions who are often willing to accept temporary positions during their search for permanent employment. The ACCOUNTEMPS temporary services division offers customers a reliable and economical means of dealing with uneven or peak work loads caused by such predictable events as vacations, taking inventories, tax work, month-end activities and special projects and such unpredictable events as illnesses and emergencies. Businesses increasingly view the use of temporary employees as a means of controlling personnel costs and converting such costs from fixed to variable. The cost and inconvenience to clients of hiring and firing permanent employees are eliminated by the use of ACCOUNTEMPS temporaries. The temporary workers are employees of ACCOUNTEMPS and are paid by ACCOUNTEMPS only when working on customer assignments. The customer pays a fixed rate only for hours worked. ACCOUNTEMPS clients may fill their permanent employment needs by using an ACCOUNTEMPS employee on a trial basis and, if so desired, "converting" the temporary position to a permanent position. The client typically pays a one-time fee for such conversions. The Company offers permanent placement services through its office network under the name ROBERT HALF. The Company's ROBERT HALF division specializes in placing accounting, financial, tax, banking and data processing personnel. Fees for successful permanent placements are paid only by the employer and are generally a percentage of the new employee's annual compensation. No fee for permanent placement services is charged to employment candidates. OTHER ACTIVITIES The Company's OFFICETEAM division places temporary and permanent high-end office and administrative personnel, ranging from word processors to office managers. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and ROBERT HALF divisions. The Company has a small operation involving only a limited number of offices which places temporary and permanent employees in paralegal, legal administrative and legal secretarial positions (operating under the name THE AFFILIATES-R-). ORGANIZATION Management of the Company's offices is coordinated from its headquarters in Menlo Park, California. Office managers are responsible for most activities of their offices, including sales, local advertising and marketing and recruitment. 1 The Company's headquarters provides support and centralized services to Company-owned offices in the administrative, marketing, accounting, training and legal areas, particularly as it relates to the standardization of the operating procedures of Company-owned offices. MARKETING AND RECRUITING The Company markets its services to clients as well as employment candidates. Local marketing and recruiting are generally conducted by each office or related group of offices. Advertising directed to clients and employment candidates consists primarily of yellow pages advertisements, classified advertisements and radio. Direct marketing through mail and telephone solicitation also constitutes a significant portion of the Company's total advertising. National advertising conducted by the Company consists primarily of print advertisements in national newspapers, magazines and certain trade journals. The Company also conducts public relations activities designed to enhance public recognition of the Company and its services. Local employees are encouraged to be active in civic organizations and industry and trade groups. The Company owns many trademarks, service marks and tradenames, including the "ROBERT HALF", "ACCOUNTEMPS" and "OFFICETEAM" marks, which are registered in the United States and in a number of foreign countries. COMPETITION The Company faces competition in its efforts to attract clients as well as high-quality specialized employment candidates. The permanent placement business is highly competitive, with a number of firms offering services similar to those provided by the Company, mostly on a regional or local basis. The temporary services industry is also highly competitive. There are several large nationwide operations, some of which have greater resources than the Company. In many areas the local companies are the strongest competitors. The most significant competitive factors in the permanent placement and temporary personnel service markets are price and the reliability of service, both of which are often a function of the availability and quality of personnel. Customers and employment candidates may use more than one permanent or temporary personnel services company. EMPLOYEES The Company and its subsidiaries presently employ approximately 1,150 regular full-time employees. The Company's offices employed approximately 59,000 different temporary employees on assignments during 1993. The ACCOUNTEMPS and OFFICETEAM temporary employees are the Company's employees for all purposes while they are working on assignments. The Company pays the related costs of employment, such as workers' compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits. The Company provides voluntary health insurance coverage to interested temporary employees. FRANCHISING The Company is not currently seeking to grant additional franchises or to grant licenses for the operation of ROBERT HALF or ACCOUNTEMPS offices. However, the Company is exploring the possibility of using joint ventures or licensing arrangements as a means of expanding its operations. The Company believes its relationships with its independently-owned franchisees are good. Franchisees operate their businesses autonomously, subject to the requirements of the franchise agreements. The franchise agreements authorize franchisees to establish one or more ROBERT HALF and ACCOUNTEMPS offices within designated geographic areas. The agreements provide for monthly payments of royalties to the Company based on the franchisee's cash collections and are generally for a term of twenty years, renewable at the franchisee's option. OTHER INFORMATION The Company's current business constitutes a single business segment. (See Item 8. Financial Statements and Supplementary Data for financial information about the Company.) 2 The Company is not dependent upon a single customer or a limited number of customers. The Company's operations are generally more active in the first and fourth quarters of a calendar year. Order backlog is not a material aspect of the Company's business and no material portion of the Company's business is subject to government contracts. The Company does not have any material expenditures for research and development. Compliance with federal, state or local environmental protection laws has no material effect on the capital expenditures, earnings or competitive position of the Company. Information about foreign operations is contained in Note N of Notes to Consolidated Financial Statements in Item 8. The Company does not have export sales. ITEM 2. PROPERTIES The Company's headquarters is located in Menlo Park, California. Placement activities are conducted through 153 offices located in the United States, Canada, the United Kingdom, Belgium and France. All of the offices are leased. ITEM 3. LEGAL PROCEEDINGS The Company is not a party to any material pending legal proceedings other than routine litigation incidental to its business. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of the Company's security holders during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company's Common Stock is listed for trading on the New York Stock Exchange under the symbol "RHI". On February 28, 1994, there were 1,337 holders of record of the Common Stock. Following is a list by fiscal quarters of the sales prices of the stock as quoted on the New York Stock Exchange:
SALES PRICES -------------------- 1993 HIGH LOW - ------------------------------------------------------------- --------- --------- 4th Quarter.................................................. $ 28.25 $ 24.00 3rd Quarter.................................................. $ 30.00 $ 21.375 2nd Quarter.................................................. $ 22.50 $ 16.25 1st Quarter.................................................. $ 18.125 $ 12.625 SALES PRICES -------------------- 1992 HIGH LOW - ------------------------------------------------------------- --------- --------- 4th Quarter.................................................. $ 14.50 $ 11.625 3rd Quarter.................................................. $ 11.75 $ 10.25 2nd Quarter.................................................. $ 13.875 $ 11.50 1st Quarter.................................................. $ 14.375 $ 11.00
No cash dividends were paid in 1993 or 1992. The Company, as it deems appropriate, may continue to retain all earnings for use in its business or may consider paying a dividend in the future. 3 ITEM 6. SELECTED FINANCIAL DATA Following is a table of selected financial data of the Company of the last five years:
YEARS ENDED DECEMBER 31, --------------------------------------------------------------- 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS) INCOME STATEMENT DATA: Net service revenues..................... $ 306,166 $ 220,179 $ 209,455 $ 248,557 $ 234,504 Direct costs of services, consisting of payroll and payroll taxes for temporary employees............................... 188,292 131,875 117,583 130,792 119,682 ----------- ----------- ----------- ----------- ----------- Gross margin............................. 117,874 88,304 91,872 117,765 114,822 Selling, general and administrative expenses................................ 88,074 72,136 73,326 90,518 81,157 Amortization of intangible assets........ 4,251 3,961 3,896 3,721 3,357 Interest expense......................... 3,992 4,301 6,574 8,593 7,264 ----------- ----------- ----------- ----------- ----------- Income before income taxes and extraordinary item...................... 21,557 7,906 8,076 14,933 23,044 Provision for income taxes............... 9,834 3,524 3,961 6,067 9,922 ----------- ----------- ----------- ----------- ----------- Income before extraordinary item......... 11,723 4,382 4,115 8,866 13,122 Extraordinary item from repurchases of debentures, net of income tax effects... -- -- -- 453 345 ----------- ----------- ----------- ----------- ----------- Net income............................... $ 11,723 $ 4,382 $ 4,115 $ 9,319 $ 13,467 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- DECEMBER 31, --------------------------------------------------------------- 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) INCOME PER PRIMARY SHARE: Income before extraordinary item......... $ .93 $ .37 $ .35 $ .78 $ 1.13 Extraordinary item....................... -- -- -- .04 .03 ----------- ----------- ----------- ----------- ----------- Net income............................... $ .93 $ .37 $ .35 $ .82 $ 1.16 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- INCOME PER FULLY DILUTED SHARE: Income before extraordinary item......... $ .93 $ .37 $ .35 $ .77 $ 1.11 Extraordinary item....................... -- -- -- .04 .03 ----------- ----------- ----------- ----------- ----------- Net income............................... $ .93 $ .37 $ .35 $ .81 $ 1.14 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- WEIGHTED AVERAGE NUMBER OF SHARES: Primary.................................. 12,546 11,965 11,603 11,376 11,601 Fully Diluted............................ 12,630 12,003 11,637 11,468 13,832 DECEMBER 31, --------------------------------------------------------------- 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS) BALANCE SHEET DATA: Intangible assets, net................... $ 152,156 $ 143,757 $ 140,715 $ 141,728 $ 133,695 Total assets............................. 204,598 181,999 178,207 187,844 181,437 Debt financing........................... 32,740 61,855 67,614 86,475 90,298 Stockholders' equity..................... 133,602 90,972 84,419 77,291 68,675
4 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1993 Temporary services revenues increased 40% during 1993, including the revenues generated from the Company's OfficeTeam division, which was started in 1991 to provide highly-skilled office and administrative personnel. Permanent placement revenues increased 30% during the year ended December 31, 1993. The positive revenue comparisons reflect strong demand for the Company's specialized personnel services. Net service revenues grew at a slower rate in 1992 compared to 1991, primarily as a result of the general economic recession. Temporary services revenues increased 9% while Robert Half division revenues decreased 21%. Gross margin as a percentage of revenues declined 1% between 1993 and 1992 and equaled 39% of revenue in 1993. In 1992, gross margin equaled 40% of revenue and in 1991, gross margin was 44% of revenue. The percentage declines related principally to a lower mix of the higher permanent placement gross margins and higher unemployment insurance costs associated with the temporary services divisions. Selling, general and administrative expenses were $88 million during 1993 compared to $72 million in 1992 and $73 million in 1991. Selling, general and administrative expenses as a percentage of revenues was 29% in 1993, compared to 33% in 1992 and 35% in 1991. The percentage declines were attributable to revenue growth coupled with the Company's continued cost containment. Amortization of intangible assets increased from 1991 to 1993 due to the acquisitions in each of those years of additional personnel services operations. Interest expense for the years ended December 31, 1993 and 1992 decreased 7% and 35%, respectively, over the comparable prior periods due to the reduction in outstanding indebtedness in both years and declining interest rates in the year ending December 31, 1992. The provision for income taxes was 46% in 1993, as compared to 45% in 1992 and 49% in 1991. The 1993 increase reflects the effect of the 1% increase in the federal corporate income tax rate as a result of the 1993 Tax Act. Because of the increase in pre-tax book income, the effect of the non-deductible intangible amortization on the effective tax rate was reduced in 1993 as compared to 1992. The 1992 reduction relative to 1991 was due primarily to a one-time benefit in the fourth quarter of 1992 for the resolution of tax accounting issues related to previous acquisitions. The Financial Accounting Standards Board issued a new standard on accounting for income taxes, which the Company was required to adopt on January 1, 1993. The cumulative effect of the adoption of the accounting method prescribed by the new standard was immaterial. LIQUIDITY AND CAPITAL RESOURCES The change in the Company's liquidity during the past three years is the net effect of funds generated by operations and the funds used for the personnel services acquisitions, principal payments on outstanding notes payable, and the securities repurchase program. The Company's Board of Directors previously authorized the repurchase, on the open market or in privately-negotiated transactions, of up to 3.25 million shares of the Company's common stock or the equivalent amount of Convertible Debentures or other common stock equivalents. The Company has repurchased approximately 3.1 million shares of the Company's common stock or common stock equivalents. See Note F to the Consolidated Financial Statements. Repurchases of the securities have been funded with cash generated from operations and the bank line of credit. On December 10, 1993, substantially all of its outstanding convertible subordinated debentures were converted into common stock of the Company. See Note E to the Consolidated Financial Statements. The Company's working capital requirements consist primarily of the financing of accounts receivable. While there can be no assurances in this regard, the Company expects that internally generated cash plus the bank revolving line of credit will be sufficient to support the working capital needs of the Company's offices, the Company's fixed payments and other long-term obligations. 5 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
DECEMBER 31, ------------------------ 1993 1992 ----------- ----------- ASSETS: Cash and cash equivalents............................................................. $ 1,773 $ 560 Accounts receivable, less allowances of $2,194 and $1,494............................. 40,155 27,362 Other current assets.................................................................. 5,538 4,651 ----------- ----------- Total current assets................................................................ 47,466 32,573 Intangible assets, less accumulated amortization of $23,665 and $19,414............... 152,156 143,757 Other assets.......................................................................... 4,976 5,669 ----------- ----------- Total assets........................................................................ $ 204,598 $ 181,999 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses................................................. $ 6,658 $ 5,663 Accrued payroll costs................................................................. 13,243 7,251 Income taxes payable.................................................................. 1,792 240 Current portion of notes payable and other indebtedness............................... 408 883 Accrued interest payable.............................................................. 87 856 ----------- ----------- Total current liabilities........................................................... 22,188 14,893 Notes payable and other indebtedness, less current portion............................ 2,032 2,627 Bank loan (revolving credit).......................................................... 30,300 35,600 Deferred income taxes................................................................. 16,476 15,162 Convertible subordinated debentures................................................... -- 22,745 ----------- ----------- Total liabilities................................................................... 70,996 91,027 COMMITMENTS AND CONTINGENCIES (SEE NOTES) STOCKHOLDERS' EQUITY: Common stock, $1 par value: authorized -- 30,000,000 shares issued and outstanding -- 13,418,402 and 11,820,742 shares.................... 13,418 11,821 Capital surplus....................................................................... 47,496 16,623 Deferred compensation................................................................. (2,113) (2,208) Accumulated translation adjustments................................................... (589) (257) Retained earnings..................................................................... 75,390 64,993 ----------- ----------- Total stockholders' equity.......................................................... 133,602 90,972 ----------- ----------- Total liabilities and stockholders' equity.......................................... $ 204,598 $ 181,999 ----------- ----------- ----------- -----------
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 6 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEARS ENDED DECEMBER 31, ------------------------------------- 1993 1992 1991 ----------- ----------- ----------- Net service revenues....................................................... $ 306,166 $ 220,179 $ 209,455 Direct costs of services, consisting of payroll and payroll taxes for temporary employees....................................................... 188,292 131,875 117,583 ----------- ----------- ----------- Gross margin............................................................... 117,874 88,304 91,872 Selling, general and administrative expenses............................... 88,074 72,136 73,326 Amortization of intangible assets.......................................... 4,251 3,961 3,896 Interest expense........................................................... 3,992 4,301 6,574 ----------- ----------- ----------- Income before income taxes................................................. 21,557 7,906 8,076 Provision for income taxes................................................. 9,834 3,524 3,961 ----------- ----------- ----------- Net income................................................................. $ 11,723 $ 4,382 $ 4,115 ----------- ----------- ----------- ----------- ----------- ----------- Income per share........................................................... $ .93 $ .37 $ .35 ----------- ----------- ----------- ----------- ----------- -----------
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 7 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS)
YEARS ENDED DECEMBER 31, ------------------------------- 1993 1992 1991 --------- --------- --------- COMMON STOCK: Balance at beginning of period............................................... $ 11,821 $ 11,540 $ 11,080 Issuances of restricted stock net -- par value............................... 41 96 185 Conversion of debentures -- par value........................................ 1,020 -- -- Repurchases of common stock -- par value..................................... (60) (53) (3) Exercises of stock options -- par value...................................... 543 230 232 Issuance of common stock for acquisitions -- par value....................... 53 8 46 --------- --------- --------- Balance at end of period................................................... $ 13,418 $ 11,821 $ 11,540 --------- --------- --------- --------- --------- --------- CAPITAL SURPLUS: Balance at beginning of period............................................... $ 16,623 $ 13,499 $ 9,684 Issuances of restricted stock, net -- excess over par value.................. 866 1,165 1,720 Conversion of debentures -- excess over par value............................ 21,205 -- -- Exercises of stock options -- excess over par value.......................... 4,572 1,331 1,229 Tax benefits from exercises of stock options................................. 2,823 535 402 Issuance of common stock for acquisitions -- excess over par value........... 1,407 93 464 --------- --------- --------- Balance at end of period................................................... $ 47,496 $ 16,623 $ 13,499 --------- --------- --------- --------- --------- --------- DEFERRED COMPENSATION: Balance at beginning of period............................................... $ (2,208) $ (1,876) $ (646) Issuances of restricted stock, net........................................... (907) (1,261) (1,905) Amortization of deferred compensation from the issuances of restricted stock....................................................................... 1,002 929 675 --------- --------- --------- Balance at end of period................................................... $ (2,113) $ (2,208) $ (1,876) --------- --------- --------- --------- --------- --------- ACCUMULATED TRANSLATION ADJUSTMENTS: Balance at beginning of period............................................... $ (257) $ -- $ -- Translation adjustments...................................................... (332) (257) -- --------- --------- --------- Balance at end of period................................................... $ (589) $ (257) $ -- --------- --------- --------- --------- --------- --------- RETAINED EARNINGS: Balance at beginning of period............................................... $ 64,993 $ 61,256 $ 57,173 Repurchases of common stock -- excess over par value......................... (1,326) (645) (32) Net income................................................................... 11,723 4,382 4,115 --------- --------- --------- Balance at end of period................................................... $ 75,390 $ 64,993 $ 61,256 --------- --------- --------- --------- --------- ---------
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 8 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
YEARS ENDED DECEMBER 31, --------------------------------- 1993 1992 1991 ----------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income.................................................................. $ 11,723 $ 4,382 $ 4,115 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets....................................... 4,251 3,961 3,896 Depreciation expense.................................................... 2,383 2,426 2,523 Deferred income taxes................................................... 1,136 1,947 1,941 Changes in assets and liabilities, net of effects of acquisitions: Decrease (increase) in accounts receivable.............................. (10,481) (1,049) 6,595 Increase in accounts payable, accrued expenses and accrued payroll costs.................................................................. 5,853 863 465 Change in other assets, net of change in other liabilities.............. 52 (1,025) (1,831) ----------- --------- --------- Total adjustments......................................................... 3,194 7,123 13,589 ----------- --------- --------- Net cash and cash equivalents provided by operating activities.............. 14,917 11,505 17,704 CASH FLOWS USED IN INVESTING ACTIVITIES: Acquisitions, net of cash acquired.......................................... (11,141) (6,438) (689) Capital expenditures........................................................ (2,340) (1,101) (789) ----------- --------- --------- Net cash and cash equivalents used in investing activities.................. (13,481) (7,539) (1,478) CASH FLOWS USED IN FINANCING ACTIVITIES: Borrowings under credit agreement........................................... 138,900 69,100 54,000 Repayments under credit agreement........................................... (144,200) (62,100) (67,400) Repurchases of convertible debentures....................................... (305) -- (770) Principal payments on notes payable and other indebtedness.................. (1,170) (12,603) (4,287) Proceeds and tax benefits from exercise of stock options.................... 7,938 2,096 1,863 Repurchases of common stock and common stock equivalents.................... (1,386) (698) (35) ----------- --------- --------- Net cash and cash equivalents used in financing activities.................. (223) (4,205) (16,629) ----------- --------- --------- Net increase (decrease) in cash and cash equivalents........................ 1,213 (239) (403) Cash and cash equivalents at beginning of period............................ 560 799 1,202 ----------- --------- --------- Cash and cash equivalents at end of period.................................. $ 1,773 $ 560 $ 799 ----------- --------- --------- ----------- --------- --------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest.................................................................... $ 4,256 $ 4,233 $ 6,928 Income taxes................................................................ $ 4,568 $ 1,675 $ 2,217 Acquisitions: Fair value of assets acquired -- Intangible assets......................................................... $ 12,650 $ 6,502 $ 1,563 Other..................................................................... 2,506 424 347 Liabilities incurred -- Notes payable and contracts............................................... 101 -- 128 Other..................................................................... 2,454 387 583 Common stock issued....................................................... 1,460 101 510 ----------- --------- --------- Cash paid, net of cash acquired......................................... $ 11,141 $ 6,438 $ 689 ----------- --------- --------- ----------- --------- ---------
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include the accounts of Robert Half International Inc. (the "Company") and its subsidiaries, all of which are wholly-owned. The Company is a Delaware corporation. All significant intercompany balances have been eliminated. Certain reclassifications have been made to the 1992 and 1991 financial statements to conform to the 1993 presentation. REVENUE RECOGNITION. Temporary services revenues are recognized when the services are rendered by the Company's temporary employees. Permanent placement revenues are recognized when employment candidates accept offers of permanent employment. Reserves are established to estimate losses due to placed candidates not remaining in employment for the Company's guarantee period, typically 90 days. FOREIGN CURRENCY TRANSLATION. Foreign income statement items are translated at the monthly average exchange rates prevailing during the period. Foreign balance sheets are translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as part of Stockholders' Equity. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Income. CASH AND CASH EQUIVALENTS. For purposes of the Consolidated Statements of Cash Flows, the Company classifies all highly-liquid investments with a maturity of three months or less as cash equivalents. INTANGIBLE ASSETS. Intangible assets represent the cost of acquired companies in excess of the fair market value of their net tangible assets at acquisition date, and are being amortized on a straight-line basis over a period of 40 years. INCOME TAXES. Effective January 1, 1993, the Company adopted Financial Accounting Standards No. 109, Accounting for Income Taxes (FAS 109). Under FAS 109, deferred taxes are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. As permitted under the provisions of FAS 109, the Company elected not to restate prior years and has determined that the cumulative effect of implementation was immaterial. NOTE B -- ACQUISITIONS In July 1986, the Company acquired all of the outstanding stock of Robert Half Incorporated, the franchisor of the Accountemps and Robert Half operations. Subsequently, in 57 separate transactions the Company acquired all of the outstanding stock of certain corporations operating Accountemps and Robert Half franchised offices in the United States, the United Kingdom and Canada as well as other personnel services businesses. The Company has paid approximately $185 million in cash, stock, notes and other indebtedness in these acquisitions, excluding transaction costs and cash acquired. These acquisitions were accounted for as purchases, and the excess of cost over the fair market value of the net tangible assets acquired is being amortized over 40 years using the straight-line method. Results of operations of the acquired companies are included in the Consolidated Statements of Income from the dates of acquisition. The acquisitions made during 1993 and 1992 had no material impact on the pro forma results of operations. 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE C -- NOTES PAYABLE AND OTHER INDEBTEDNESS The Company issued promissory notes as well as other forms of indebtedness in connection with certain acquisitions. These are due in varying installments, carry varying interest rates and in aggregate amount to $2,440,000 at December 31, 1993, and $3,510,000 at December 31, 1992. At December 31, 1993, $1.5 million of the notes were secured by standby letters of credit (see Note D). The following table shows the schedule of maturities for notes payable and other indebtedness at December 31, 1993 (in thousands): 1994............................................... $ 408 1995............................................... 555 1996............................................... 351 1997............................................... 404 1998............................................... 464 Thereafter......................................... 258 --------- $ 2,440 --------- ---------
At December 31, 1993, all of the notes carried fixed rates of interest ranging from 8.0% to 13.3%. The weighted average interest rate for the above was approximately 11.1% and 8.5% for the years ended December 31, 1993 and 1992, respectively. As part of a Restructuring in 1987, a newly formed corporation, BF Enterprises, Inc., assumed the obligation for certain subordinated debentures issued by a predecessor of the Company. At December 31, 1993, the Company remains contingently liable for $11.3 million of these subordinated debentures, payment of $9.5 million of which has been provided for by the issuance of letters of credit to the trustee for the debentures by BF Enterprises, Inc. Additionally, pursuant to a pledge and security agreement entered into at the time of Restructuring, BF Enterprises, Inc., has agreed to pledge to the Company collateral (consisting of real estate, marketable securities and bank letters of credit) if the net worth of BF Enterprises, Inc., falls below certain minimum levels. NOTE D -- BANK LOAN (REVOLVING CREDIT) On November 1, 1993, the Company replaced the then existing unsecured credit facility. The new credit facility provides a line of credit of up to $80,000,000, which is available to fund the Company's general business and working capital needs, including acquisitions and the purchase of the Company's common stock, and to cover the issuance of debt support standby letters of credit up to $15,000,000. As of December 31, 1993, the Company had borrowed $30,300,000 on the line of credit, and had used $2,780,000 in debt support standby letters of credit. Of the $30,300,000 outstanding balance at December 31, 1993, $29,000,000 carried an interest rate tied to Eurodollar rates plus 1.25% and $1,300,000 carried an interest rate at prime. There is a commitment fee on the unused portion of the entire credit facility of .25%. The loan is subject to certain financial covenants which also affect the interest rates charged. The credit facility has the following scheduled reduction in availability (in thousands): 1995.............................................. $ 5,000 1996.............................................. $ 15,000 1997.............................................. $ 15,000 1998.............................................. $ 15,000 1999.............................................. $ 15,000 2000.............................................. $ 15,000
The final maturity date for the credit facility is August 31, 2000. 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE D -- BANK LOAN (REVOLVING CREDIT) (CONTINUED) As of December 31, 1992, the Company had borrowed $35,600,000 of the borrowing facility in place at that time and had used $2,700,000 in debt support standby letters of credit. Of the $35,600,000 outstanding loan balance at December 31, 1992, $25,000,000 carried an interest rate tied to Eurodollar rates plus 1.25% and the remaining balance of $10,600,000 carried an interest rate at prime. NOTE E -- CONVERTIBLE SUBORDINATED DEBENTURES On August 6, 1987, the Company issued $74,750,000 principal amount of the Convertible Subordinated Debentures (the "Convertible Debentures"). Prior to 1993, all but $22,745,000 of the Convertible Debentures were repurchased by the Company pursuant to its repurchase program (see Note F). The Convertible Debentures were unsecured obligations of the Company with an original maturity date of August 1, 2012. Interest was payable semi-annually as of February 1 and August 1 of each year to the registered holders as of the preceding January 15 and July 15, respectively. The Convertible Debentures were redeemable at the Company's option at any time on or after August 1, 1990, at declining redemption prices. In December 1993, the Company called for redemption all of its then outstanding Convertible Debentures. Holders of $22,440,000 in principal amount elected to convert their debentures into 1.02 million shares of common stock at the conversion price of $22.00 per share. The remaining $305,000 in principal amount of Convertible Debentures were redeemed at 102.9% of their principal amount plus accrued interest. NOTE F -- SECURITIES REPURCHASE PROGRAM The Company was previously authorized by its Board of Directors to repurchase up to a total of 3.25 million shares of the Company's common stock, or the equivalent amount of Convertible Debentures or other common stock equivalents from time to time on the open market or in privately negotiated transactions. As of December 31, 1993, 3.1 million equivalent shares have been repurchased. There were no repurchases under the program during 1993. During 1992, the Company purchased 15,230 shares of common stock. In 1991, the Company repurchased $1 million face amount of Convertible Debentures and purchased 3,457 shares of common stock for an aggregate of approximately 49,000 shares or share equivalents. These repurchases were financed with internally generated cash and the revolving line of credit. 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE G -- INCOME TAXES The provisions for income taxes for the three years ended December 31, 1993 consisted of the following (in thousands):
YEARS ENDED DECEMBER 31, ------------------------------- 1993 1992 1991 --------- --------- --------- Current: Federal................................................................ $ 6,995 $ 1,014 $ 1,271 State.................................................................. 1,604 252 196 Foreign................................................................ 99 311 553 Deferred -- principally domestic......................................... 1,136 1,947 1,941 --------- --------- --------- $ 9,834 $ 3,524 $ 3,961 --------- --------- --------- --------- --------- ---------
The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:
YEARS ENDED DECEMBER 31, ------------------------------------- 1993 1992 1991 ----------- ----------- ----------- Federal U.S. income tax rate............................................... 35.0% 34.0% 34.0% State income taxes, net of federal tax benefit............................. 5.5 5.0 3.7 Amortization of intangible assets.......................................... 4.1 10.2 9.9 Other, net................................................................. 1.0 (4.6) 1.4 --- --- --- Effective tax rate......................................................... 45.6% 44.6% 49.0% --- --- --- --- --- ---
The deferred portion of the tax provisions consisted of the following (in thousands):
YEARS ENDED DECEMBER 31, ------------------------------- 1993 1992 1991 --------- --------- --------- Amortization of franchise rights......................................... $ 1,484 $ 1,406 $ 1,280 Change from cash basis accounting........................................ (32) (68) (114) Compensation arrangements................................................ 137 89 488 Allowance for doubtful accounts.......................................... (86) 643 200 Other, net............................................................... (367) (123) 87 --------- --------- --------- $ 1,136 $ 1,947 $ 1,941 --------- --------- --------- --------- --------- ---------
During the fourth quarter of 1992, the Company recorded a one-time benefit of $400,000 for the resolution of certain tax accounting issues related to previous acquisitions. The deferred income tax liability shown on the balance sheet is comprised of the following (in thousands):
DECEMBER 31, 1993 ------------ Deferred income tax assets............................................ $ (498) Deferred income tax liabilities....................................... 16,974 ------------ $ 16,476 ------------ ------------
No valuation allowances against deferred tax assets were required at December 31, 1993. 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE G -- INCOME TAXES (CONTINUED) The components of the net deferred income tax liability at December 31, 1993 were as follows (in thousands):
DECEMBER 31, 1993 ------------ Amortization of intangible assets..................................... $ 16,365 Foreign taxes......................................................... 495 Other................................................................. (384) ------------ $ 16,476 ------------ ------------
NOTE H -- EMPLOYEE BENEFIT PLANS Under a retirement plan covering one current and one former executive officer of the Company, monthly benefits are payable equal to 25% of the participant's base compensation as defined, increased by an inflation formula. The plan was amended effective May 31, 1992 to provide a fixed supplemental benefit for the current employee during the first 15 years after retirement. The current employee forfeited long-term incentive awards of equal value in exchange for this amendment. The plan was also amended effective May 21, 1991 for the current employee to increase the percentage of base compensation to 30% increasing thereafter by 3% for each year of service beyond the age of 50, up to a maximum of 66%. During 1993, the Company changed its discount rate assumption from 8% to 6%. The effect of both plan amendments and the discount rate change are being amortized over the employee's expected future service period of 15 years and will increase after-tax expense by approximately $76,000 per year. The employee can require the Company to discharge its liability at defined intervals by purchasing annuities. At December 31, 1992 a liability of $1,124,000 was established to cover the estimated unfunded cost of these benefits. This amount was increased to $1,721,000 at December 31, 1993. Pre-tax pension costs for these plans were $188,000, $131,000, and $72,000 for the years ended December 31, 1993, 1992 and 1991, respectively. These charges were computed using certain assumptions regarding salary increases, retirement age and life expectancy. NOTE I -- COMMITMENTS AND CONTINGENCIES Rental expense, primarily for office premises, amounted to $8,457,000, $8,042,000 and $7,616,000 for the years ended December 31, 1993, 1992 and 1991, respectively. The approximate minimum rental commitments for 1994 and thereafter under non-cancelable leases in effect at December 31, 1993, are as follows (in thousands): 1994....................................................... $ 6,540 1995....................................................... $ 5,812 1996....................................................... $ 4,492 1997....................................................... $ 3,486 1998....................................................... $ 2,926 Thereafter................................................. $ 5,267
14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE J -- STOCK PLANS Under various stock plans, officers, employees and outside directors may receive grants of restricted stock or options to purchase common stock. Grants are made at the discretion of the Compensation Committee of the Board of Directors. Grants usually vest over four years. Options granted under the plans have exercise prices ranging from 85% to 100% of the fair market value of the Company's common stock at the date of grant, consist of both incentive stock options and nonstatutory stock options under the Internal Revenue Code, and generally have a term of ten years. Recipients of restricted stock do not pay any cash consideration to the Company for the shares, 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. As of December 31, 1993 the total number of available grants under the plans (consisting of either restricted stock or options) was 396,054. The following table reflects activity under all stock plans from January 1, 1991 through December 31, 1993 and the exercise prices:
STOCK OPTION PLANS -------------------------------- RESTRICTED NUMBER OF EXERCISE PRICE STOCK PLANS SHARES PER SHARE ----------- ------------- ----------------- Outstanding, January 1, 1991............................. 46,810 1,446,176 $ 6.23 - 18.83 Granted................................................ 191,949 483,452 $ 8.61 - 11.00 Exercised.............................................. -- (232,541) $ 6.23 - 9.25 Forfeited.............................................. (7,044) (136,892) $ 8.61 - 17.75 ----------- ------------- ----------------- Outstanding, December 31, 1991........................... 231,715 1,560,195 $ 6.23 - 18.83 Granted................................................ 132,037 275,117 $ 10.50 - 14.00 Exercised.............................................. -- (229,855) $ 6.23 - 10.13 Forfeited.............................................. (36,513) (144,553) $ 8.61 - 14.00 ----------- ------------- ----------------- Outstanding, December 31, 1992........................... 327,239 1,460,904 $ 7.09 - 18.83 Granted................................................ 71,469 707,971 $ 12.33 - 25.25 Exercised.............................................. -- (542,516) $ 7.51 - 16.13 Forfeited.............................................. (28,839) (155,109) $ 8.61 - 21.46 ----------- ------------- ----------------- Outstanding, December 31, 1993........................... 369,869 1,471,250 $ 7.09 - 25.25 ----------- ------------- ----------------- ----------- ------------- -----------------
As of December 31, 1993, an aggregate of 615,965 restricted common stock or options to purchase common stock were vested. NOTE K -- PREFERRED SHARE PURCHASE RIGHTS On July 23, 1990, the Board of Directors declared a dividend distribution of one Preferred Share Purchase Right (the "Rights") on each outstanding share of the Company's common stock. The Rights will be exercisable only if a person or group becomes an Acquiring Person (as such term is defined in the Right's Agreement) or announces a tender offer the consummation of which would result in a person or group becoming an Acquiring Person. Each Right will entitle stockholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $65 (subject to adjustment) upon certain events. Effective October 28, 1993, Acquiring Person means any person or group of affiliated or associated persons who shall be the beneficial owner of 15% or more of the common stock of the Company then outstanding, but does not include the only shareholder (and affiliates and associates thereof) known by the Company to have beneficial ownership on October 28, 1993, in excess of 15% of the then outstanding common stock, provided that 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE K -- PREFERRED SHARE PURCHASE RIGHTS (CONTINUED) such exclusion terminates immediately in the event that such shareholder (or any such affiliate or associate) increases its beneficial ownership of common stock other than pursuant to certain specified transactions. If, after the Rights become exercisable, the Company is acquired in a merger or other business combination transaction, or sells 50% or more of its assets or earnings power, each Right will entitle its holder to purchase, at the Right's then-current exercise price, a number of the acquiring company's common shares having a market value at the time of twice the Right's exercise price. In addition, if a person or group becomes an Acquiring Person otherwise than pursuant to a cash tender offer for all shares in which such person or group increases its stake to 85% of the outstanding shares of common stock, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right's then-current exercise price, a number of the Company's common shares (or cash, other securities or property) having a market value of twice the Right's exercise price. At any time after a person or group becomes an Acquiring Person and prior to an acquisition by such person or group of 50% or more of the common stock, the Board of Directors may exchange the Rights (other than Rights owned by such person or group), in whole or in part, at an exchange ratio of one share of common stock (or one one-hundredth of a share of the new series of junior participating preferred stock) per Right. At any time prior to ten days after a person or group becomes an Acquiring Person, the Rights are redeemable for one cent per Right at the option of the Board of Directors. The dividend distribution was made on August 8, 1990, payable to stockholders of record on that date. The Rights will expire on July 23, 2000. NOTE L -- INCOME PER SHARE Income per fully diluted share has been computed using the weighted average number of shares of fully diluted common stock and common stock equivalents outstanding during each period (12,630,000, 12,003,000 and 11,637,000 shares for the years ending December 31, 1993, 1992 and 1991, respectively). An assumed conversion of the Convertible Debentures was not dilutive to income per share in 1993 (see Note E), 1992 or 1991. NOTE M -- QUARTERLY FINANCIAL DATA (UNAUDITED) The following tabulation shows certain quarterly financial data for 1993 and 1992 (in thousands, except per share amounts):
QUARTER ------------------------------------------ 1993 1 2 3 4 YEAR --------- --------- --------- --------- --------- Net service revenues............... $ 69,573 $ 72,446 $ 77,061 $ 87,086 $ 306,166 Gross margin....................... 27,307 28,457 29,400 32,710 117,874 Income before income taxes......... 4,396 5,360 5,873 5,928 21,557 Net income......................... 2,387 2,900 3,091 3,345 11,723 Net income per share............... .20 .23 .24 .26 .93 1992 Net service revenues............... $ 52,688 $ 53,411 $ 55,052 $ 59,028 $ 220,179 Gross margin....................... 21,775 21,832 21,712 22,985 88,304 Income before income taxes......... 1,734 2,168 2,236 1,768 7,906 Net income......................... 831 1,128 1,147 1,276 4,382 Net income per share............... .07 .09 .10 .11 .37
16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE N -- SEGMENT REPORTING Information about the Company's operations in different geographic locations for the three fiscal years ended in December 1993, is shown below. The Company's areas of operations outside of the United States include Canada, the United Kingdom, Belgium and France. Revenues represent total net revenues from the respective geographic areas. Operating income is net revenues less operating costs and expenses pertaining to specific geographic areas. Foreign operating income reflects charges for U.S. management fees and amortization of intangibles of $917,000, $854,000 and $650,000 for the years ended December 31, 1993, 1992 and 1991, respectively. Domestic operating income reflects charges for amortization of intangibles of $3,841,000, $3,606,000 and $3,564,000 for the years ended December 31, 1993, 1992 and 1991, respectively. Identifiable assets are those assets used in the geographic areas and are reflected after elimination of intercompany balances.
YEARS ENDED DECEMBER 31, ------------------------------------- 1993 1992 1991 ----------- ----------- ----------- Revenue Domestic....................................................... $ 280,266 $ 196,910 $ 187,282 Foreign........................................................ 25,900 23,269 22,173 ----------- ----------- ----------- $ 306,166 $ 220,179 $ 209,455 ----------- ----------- ----------- ----------- ----------- ----------- Operating Income Domestic....................................................... $ 26,294 $ 12,585 $ 13,608 Foreign........................................................ (745) (378) 1,042 ----------- ----------- ----------- $ 25,549 $ 12,207 $ 14,650 ----------- ----------- ----------- ----------- ----------- ----------- Assets Domestic....................................................... $ 180,778 $ 163,030 $ 157,589 Foreign........................................................ 23,820 18,969 20,618 ----------- ----------- ----------- $ 204,598 $ 181,999 $ 178,207 ----------- ----------- ----------- ----------- ----------- -----------
17 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS OF ROBERT HALF INTERNATIONAL INC.: We have audited the accompanying consolidated statements of financial position of Robert Half International Inc. (a Delaware corporation) and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Robert Half International Inc. and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN & CO. San Francisco, California January 28, 1994 18 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III The information required by Items 10 through 13 of Part III is incorporated by reference from the registrant's Proxy Statement, under the captions "NOMINATION AND ELECTION OF DIRECTORS," "BENEFICIAL STOCK OWNERSHIP," "COMPENSATION OF DIRECTORS," "COMPENSATION OF EXECUTIVE OFFICERS" AND "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN TRANSACTIONS," which Proxy Statement will be mailed to stockholders in connection with the registrant's annual meeting of stockholders which is scheduled to be held in May 1994. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (A) 1. FINANCIAL STATEMENTS The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report: Consolidated statements of financial position at December 31, 1993 and 1992. Consolidated statements of income for the years ended December 31, 1993, 1992 and 1991. Consolidated statements of stockholders' equity for the years ended December 31, 1993, 1992 and 1991. Consolidated statements of cash flows for the years ended December 31, 1993, 1992 and 1991. Notes to consolidated financial statements. Report of independent public accountants. Selected quarterly financial data for the years ended December 31, 1993 and 1992 are set forth in Note M - Quarterly Financial Data (Unaudited) included in Item 8 of this report. 2. FINANCIAL STATEMENT SCHEDULES Report of independent public accountants on supporting schedules. II - Amounts receivable from related parties X - Supplementary income statement information Schedules I, III, IV, V, VI, VII, VIII, IX, XI, XII and XIII have been omitted as they are inapplicable. 3. EXHIBITS
EXHIBIT NO. EXHIBIT - --------- -------------------------------------------------------------------------------------------------- 3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991. 3.2 By-Laws. 4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust and First National Bank of Minneapolis, incorporated by reference to Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the Registrant (formerly known as Boothe Interim Corporation) filed with the Securities and Exchange Commission on December 31, 1979.
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EXHIBIT NO. EXHIBIT - --------- -------------------------------------------------------------------------------------------------- 4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1). 4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and Manufacturers Hanover Trust Company of California, incorporated by reference to (i) Exhibit 1 to the Registrant's Registration Statement on Form 8-A for its Preferred Share Purchase Rights, which Registration Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A Amendment No. 2 filed on December 2, 1993. 10.1 Credit Agreement dated as of November 1, 1993, among the Registrant, NationsBank of North Carolina, N.A. and Bank of America National Trust and Savings Association, incorporated by reference to Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1993. 10.2 Reorganization and Distribution Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.9 to Registrant's Registration Statement on Form S-1 (No. 33-15171). 10.3 Agreement of Assignment and Assumption of Rights and Obligations under the Indenture between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987. 10.4 Assumption of Obligations and Liabilities between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987. 10.5 Pledge and Security Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.10 to Registrant's Registration Statement on Form S-1 (No. 33-15171). 10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.11 to Registrant's Registration Statement on Form S-1 (No. 33-15171). *10.7 Employment Agreement dated as of October 2, 1985, between the Registrant and Harold M. Messmer, Jr. The Eighth Amendment to such agreement is filed with this Annual Report on Form 10-K for the fiscal year ended December 31, 1993. The original agreement and the first seven amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991 and (vii) Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1993. *10.8 Key Executive Retirement Plan - Level II, incorporated by reference to Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
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EXHIBIT NO. EXHIBIT - --------- -------------------------------------------------------------------------------------------------- *10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant and Harold M. Messmer, Jr. The Sixth Amendment to such agreement is filed with this Annual Report on form 10-K for the fiscal year ended December 31, 1992. The original agreement and the first five amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1993. *10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988. *10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit 10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1986. *10.12 Outside Directors' Option Plan, incorporated by reference to Exhibit 10.21 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. *10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to Exhibit 10.14 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. *10.14 StockPlus Plan, as amended, incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. *10.15 1993 Incentive Plan, as amended. *10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. *10.17 Annual Performance Bonus Plan. *10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990. *10.19 Form of Indemnification Agreement for Directors of the Registrant. The form of agreement is incorporated by reference to Exhibit 10.27 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. Filed herewith is a schedule listing the names of the individuals with whom the agreement has been executed and the date of execution. *10.20 Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by reference to Exhibit 10.28 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. 11 Statement re computation of per share earnings. 21 Subsidiaries of the Registrant. 23 Accountants' Consent. - ------------------------ * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the fiscal quarter ending December 31, 1993. 21 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROBERT HALF INTERNATIONAL INC. (Registrant) Date: March 22, 1994 By: _______/S/_M. KEITH WADDELL_______ M. Keith Waddell Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 22, 1994 By: /S/ HAROLD M. MESSMER, JR. ---------------------------------------- Harold M. Messmer, Jr. Chairman of the Board, President, Chief Executive Officer, and a Director (Principal Executive Officer) Date: March 22, 1994 By: /S/ FREDERICK P. FURTH ---------------------------------------- Frederick P. Furth Vice Chairman of the Board of Directors Date: March 22, 1994 By: /S/ ANDREW S. BERWICK, JR. ---------------------------------------- Andrew S. Berwick, Jr., Director Date: March 22, 1994 By: /S/ EDWARD W. GIBBONS ---------------------------------------- Edward W. Gibbons, Director Date: March 22, 1994 By: /S/ TODD GOODWIN ---------------------------------------- Todd Goodwin, Director Date: March , 1994 By: ---------------------------------------- Frederick A. Richman, Director
22 Date: March 22, 1994 By: /S/ THOMAS J. RYAN ---------------------------------------- Thomas J. Ryan, Director Date: March 22, 1994 By: /S/ J. STEPHEN SCHAUB ---------------------------------------- J. Stephen Schaub, Director Date: March 22, 1994 By: /S/ M. KEITH WADDELL ---------------------------------------- M. Keith Waddell Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) Date: March 22, 1994 By: /S/ BARBARA J. FORSBERG ---------------------------------------- Barbara J. Forsberg Vice President and Controller (Principal Accounting Officer)
23 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and the Board of Directors of Robert Half International Inc.: We have audited in accordance with generally accepted auditing standards, the consolidated financial statements of Robert Half International Inc. and subsidiaries included in this Form 10-K, and have issued our report thereon dated January 28, 1994. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in Item 14 are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN & CO. San Francisco, California January 28, 1994 S-1 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES ------------------------------------------- 1993 1992 1991 ------------- ------------- ------------- Advertising costs................................ $ 9,993,000 $ 6,830,000 $ 6,780,000 Amortization of intangible assets................ $ 4,251,000 $ 3,961,000 $ 3,896,000
S-2 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
BALANCE AT BALANCE AT END OF PERIOD BEGINNING -------------------------- NAME OF DEBTOR OF PERIOD ADDITIONS DEDUCTIONS CURRENT NON-CURRENT - ------------------------------------------------------ ----------- ------------- ------------- ----------- ------------- (IN THOUSANDS) 1993 Stephen and Pamela Saulten (1)...................... $ 94 $ 2 $ -- $ -- $ 96 1992 Stephen and Pamela Saulten (1)...................... $ 175 $ 8 $ 89 $ -- $ 94 1991 Stephen and Pamela Saulten (1)...................... $ 111 $ 64 $ -- $ -- $ 175 - ------------------------ (1) This note carried an interest rate of 6% in 1993 and 1992, during 1991 the interest rate was 9.55%.
S-3 INDEX TO EXHIBITS Sequentially Exhibit Numbered No. Exhibit Page ------- ------------------------------------ ---- 3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991. 3.2 By-Laws. 4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust and First National Bank of Minneapolis, incorporated by reference to Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the Registrant (formerly known as Boothe Interim Corporation) filed with the Securities and Exchange Commission on December 31, 1979. 4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1). 4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and Manufacturers Hanover Trust Company of California, incorporated by reference to (i) Exhibit 1 to the Registrant's Registration Statement on Form 8-A for its Preferred Share Purchase Rights, which Registration Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A Amendment No. 2 filed on December 2, 1993. 10.1 Credit Agreement dated as of November 1, 1993, among the Registrant, NationsBank of North Carolina, N.A. and Bank of America National Trust and Savings Association, incorporated by reference to Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1993. 10.2 Reorganization and Distribution Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.9 to Registrant's Registration Statement on Form S-1 (No. 33-15171). 10.3 Agreement of Assignment and Assumption of Rights and Obligations under the Indenture between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987. 10.4 Assumption of Obligations and Liabilities between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987. 10.5 Pledge and Security Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.10 to Registrant's Registration Statement on Form S-1 (No. 33-15171). 10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc., incorporated by reference to Exhibit 10.11 to Registrant's Registration Statement on Form S-1 (No. 33-15171). *10.7 Employment Agreement dated as of October 2, 1985, between the Registrant and Harold M. Messmer, Jr. The Eighth Amendment to such agreement is filed with this Annual Report on Form 10-K for the fiscal year ended December 31, 1993. The original agreement and the first seven amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991 and (vii) Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1993. *10.8 Key Executive Retirement Plan - Level II, incorporated by reference to Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1991. *10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant and Harold M. Messmer, Jr. The Sixth Amendment to such agreement is filed with this Annual Report on form 10- K for the fiscal year ended December 31, 1992. The original agreement and the first five amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10- Q for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form 10- Q for the fiscal quarter ended June 30, 1993. *10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988. *10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit 10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1986. *10.12 Outside Directors' Option Plan, incorporated by reference to Exhibit 10.21 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. *10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to Exhibit 10.14 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. *10.14 StockPlus Plan, as amended, incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. *10.15 1993 Incentive Plan, as amended. *10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. *10.17 Annual Performance Bonus Plan. *10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1990. *10.19 Form of Indemnification Agreement for Directors of the Registrant. The form of agreement is incorporated by reference to Exhibit 10.27 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. Filed herewith is a schedule listing the names of the individuals with whom the agreement has been executed and the date of execution. *10.20 Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by reference to Exhibit 10.28 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989. 11 Statement re computation of per share earnings. 21 Subsidiaries of the Registrant. 23 Accountants' Consent. _____ * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. EX-3.2 2 EXHIBIT 3-2 BY-LAWS EXHIBIT 3.2 BY-LAWS ------- OF -- ROBERT HALF INTERNATIONAL INC. ------------------------------ ARTICLE I --------- OFFICES ------- Section 1. REGISTERED OFFICE. The registered office of the Corporation in the State of Delaware shall be at 1209 Orange Street, City of Wilmington, County of New Castle. Section 2. PRINCIPAL OFFICE FOR TRANSACTION OF BUSINESS. The principal office for the transaction of the business of the Corporation shall be at 2884 Sand Hill Road, in the City of Menlo Park, County of San Mateo, State of California. The Board of Directors may change said principal office from one location to another within or without said City, County or State. Section 3. OTHER OFFICES. The Corporation may have offices at such other place or places, within or without the State of Delaware, as from time to time the Board of Directors may determine or the business of the Corporation may require. ARTICLE II ---------- MEETING OF STOCKHOLDERS ----------------------- Section 1. PLACE OF MEETINGS. Meetings of the stockholders shall be held at such place either within or without the State of Delaware as shall be fixed by the Board of Directors and stated in the notice or waiver of notice of the meeting. Section 2. ANNUAL MEETING. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may come before the meeting shall be held on such date in each year as the Chairman of the Board shall designate. The Board of Directors shall present at each annual meeting a full and clear statement of the business and condition of the Corporation. Section 3. SPECIAL MEETINGS. A special meeting of the stockholders for any purpose or purposes, unless otherwise prescribed by statute, may be called at any time by the Chairman of the Board, or the President or by order of the Board of Directors. Section 4. NOTICE OF MEETINGS. Except as otherwise provided by law or the Certificate of Incorporation, written notice of each meeting of stockholders shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting, directed to his address as it appears upon the books of the corporation, said notice to specify the place, date and hour and purpose or purposes of the meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken unless the adjournment is for more than thirty days, or unless after the adjournment a new record date is fixed for the adjourned meeting, in which event a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Notice of the time, place and purpose of any meeting of stockholders may be waived in writing, either before or after such meeting, and will be waived by any stockholder by his attendance thereat in person or by proxy. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given. Section 5. QUORUM. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. Section 6. VOTING. Except as otherwise provided in the Certificate of Incorporation, each stockholder of voting common stock shall, at each meeting of the stockholders, be entitled to one vote in person or by proxy for each share of stock of the Corporation held by him on the date fixed pursuant to the provisions of Section 3 of Article IX of the By-Laws as the record date and registered in his name on the books of the Corporation for the determination of stockholders who shall be entitled to notice and to vote at such meeting. Any vote of stock of the Corporation may be given at any meeting of the stockholders by the stockholder entitled thereto in person or by proxy but no proxy shall be voted three years after its date, unless said proxy shall provide for a longer period. At all meetings of the stockholders all matters including election of directors, except where other provision is made by law, by the Certificate of Incorporation or by these By-Laws, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat, a quorum being present. Unless demanded by a stockholder of the Corporation present in person or by proxy at any meeting of the stockholders and entitled to vote thereat or so directed by the chairman of the meeting, the vote thereat on any question or matter, including the election of directors, need not be by ballot. Upon a demand of any such stockholder for a vote by ballot on any question or at the direction of such chairman that a vote by ballot be taken on any question, such vote shall be taken. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, and shall state the number of shares voted. No holder of Preferred Stock shall be entitled to vote at any meeting of the stockholders, except as provided by law, by the Certificate of Incorporation or by the Certificate of Determination of Preferences creating such Preferred Stock. Section 7. LIST OF STOCKHOLDERS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held and which place shall be specified in the notice of the meeting, or, if not specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 8. INSPECTORS OF VOTES. At each meeting of the stockholders the chairman of such meeting may appoint one or three Inspectors of Votes to act thereat. Each Inspector of Votes so appointed shall first subscribe an oath or affirmation faithfully to execute the duties of an Inspector of Votes at such meeting with strict impartiality and according to the best of his ability. Such Inspectors of Votes shall take charge of the ballots at such meeting and after the balloting thereat on any question shall count the ballots cast thereon and shall make a report in writing to the secretary of such meeting of the results thereof. An Inspector of Votes need not be a stockholder of the Corporation, and any officer of the Corporation may be an Inspector of Votes on any question other than a vote for or against his election to any position with the Corporation or on any other question in which he may be directly interested. If there are three Inspectors of Votes, the determination, report or certificate of two such Inspectors shall be as effective as if unanimously made by all Inspectors. Section 9. ACTION WITHOUT MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III ----------- DIRECTORS --------- Section 1. GENERAL POWERS. The property, business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Section 2. NUMBER, QUALIFICATION AND TERM OF OFFICE. (a) The number of directors which shall constitute the whole Board shall not be less than six nor more than eleven. The number of directors shall be fixed at such number, within the limits specified in the preceding sentence, as determined from time to time by resolution of the Board of Directors, upon approval by two-thirds (2/3) of the directors in office. (b) At the 1994 Annual Meeting of Stockholders, the directors shall be divided into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the 1997 Annual Meeting of Stockholders, the term of office of the second class to expire at the 1996 Annual Meeting of Stockholders and the term of office of the third class to expire at the 1995 Annual Meeting of Stockholders. At each Annual Meeting of Stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding Annual Meeting of Stockholders after election. (c) If the stockholders of the Company do not approve the continuing classification of the Board of Directors at the 1999 Annual Meeting of Stockholders, then Section 2(b) hereof shall be of no further force or effect and, notwithstanding anything to the contrary in Section 2(b), the terms of all directors shall expire at the 2000 Annual Meeting of Stockholders and all directors elected at the 1999 Annual Meeting of Stockholders or any subsequent meeting of stockholders shall hold office for a one-year term. (d) Except as provided in Sections 4 and 5 to this Article III, each director shall hold office until the end of his term and until his successor shall be elected and qualified or until his death, resignation or removal. Directors need not be stockholders. This Section 2 shall not be amended to change the two-thirds (2/3) approval requirement set forth above except with the approval of two-thirds (2/3) of the directors in office. Section 3. RESIGNATIONS. Any director may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective shall not be specified therein, then it shall take effect immediately upon its receipt by the Secretary; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 4. REMOVAL OF DIRECTORS. Any director may be removed, with cause, at any time, by the affirmative vote of a majority in interest of the stockholders of record of the Corporation entitled to vote, given at a special meeting of the stockholders called for the purpose, and the vacancy in the Board of Directors caused by any such removal may be filled by the stockholders at such meeting or, if the stockholders shall fail to fill such vacancy, by the Board of Directors as provided in Section 5 of this Article III. In no case will a decrease in the number of directors shorten the term of any incumbent director. Section 5. VACANCIES. In case of any vacancy in the Board of Directors caused by death, resignation, disqualification, removal, an increase in the number of directors, or any other cause, the successor to fill the vacancy may be elected by the holders of shares of stock entitled to vote at an annual meeting of said holders or by two-thirds (2/3) of the directors in office, though less than a quorum, and each director so elected shall hold office for a term expiring at the Annual Meeting of Stockholders at which the term of the class to which he was elected expires and until his successor shall be duly elected and qualified, or until his death or until he shall resign or until he shall have been removed. Additional directorships resulting from an increase in the number of directors shall be apportioned among the three classes as equally as possible. This section shall not be amended to change the requirement of a vote of two-thirds (2/3) of the directors set forth above except upon the approval of two-thirds (2/3) of the directors in office. Section 6. PLACE OF MEETING. The Board of Directors may hold its meetings at such place or places within or without the State of Delaware as the Board of Directors may from time to time determine. Section 7. ORGANIZATION MEETING. The Board of Directors shall meet immediately following the annual meeting of stockholders and at the place where the stockholders' meeting was held, for the purpose of electing officers and transacting such other business as may lawfully come before it. No notice of such meeting shall be required. Section 8. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such times as the Board of Directors shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Except as otherwise provided by law, notices of regular meetings need not be given. Section 9. SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held when called by the Chairman of the Board, the Chairman of the Executive Committee, the President, the Secretary, Assistant Secretary or a majority of the Directors. Section 10. NOTICE OF MEETINGS. Notice of the time and place of all special meetings of the Board of Directors or any committee thereof, and of any regular meeting as to which notice is given, shall be given to each director either by telephone or by written notice delivered personally to each director or sent to each director by mail or by other form of written communication at least one day before the date of the meeting. Notice of any meeting may be waived in writing at any time before or after the meeting and will be waived by any director by attendance at such meeting. Section 11. QUORUM AND MANNER OF ACTING. Except as otherwise provided by statute or by these By-Laws, a majority of the total number of directors (but not less than two) shall be required to constitute a quorum for the transaction of business at any meeting, and the act of a majority of the directors present at any meeting at which a quorum shall be present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present may adjourn any meeting from time to time until a quorum be had. Notice of any adjourned meeting need not be given. Section 12. ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof, may be taken without a meeting, if all members of the Board or of such committee, as the case may be, consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board or Committee. Section 13. MEETING BY TELEPHONE. Unless otherwise restricted by the Certificate of Incorporation or these By- Laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. Section 14. COMPENSATION. The Board of Directors may at any time or from time to time by resolution provide that a specified sum shall be paid to any director of the Corporation, either as his annual compensation as such director or member of any committee of the Board of Directors or as compensation for his attendance at each meeting of the Board of Directors or any such committee. The Board of Directors may also likewise provide that the Corporation shall reimburse each director for any expense paid by him on account of his attendance at any meeting. Nothing in this Section shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE IV ---------- EXECUTIVE COMMITTEE ------------------- Section 1. APPOINTMENT. The Board of Directors may by resolution passed by a majority of the whole Board, appoint an Executive Committee of not less than three members, all of whom shall be directors. The Chairman of the Executive Committee shall be elected by the Board of Directors. Section 2. POWERS. The Executive Committee shall have and may exercise, when the Board is not in session, the power of the Board of Directors in the management of the business and affairs of the Corporation; but neither the Executive Committee nor any other committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation, nor shall it have the power or authority to declare a dividend, to authorize the issuance of stock or to fill vacancies in the Board of Directors or the Executive Committee. Section 3. TERM. The term of the Executive Committee shall be coexistent with that of the Board of Directors which shall have appointed such Committee. The Board may at any time for any reason remove any individual member of the Executive Committee and the Board may fill a Committee vacancy created by death, resignation or removal or increase in the number of members of the Executive Committee. The Board of Directors may designate one or more directors as alternate members of the Executive Committee who may replace any absent or disqualified member at any meeting of the Committee. Section 4. MEETINGS. Regular meetings of the Executive Committee, of which no notice shall be required, may be held on such days and at such places as shall be fixed by resolution adopted by a majority of the Committee and communicated to all of its members. Special meetings of the Executive Committee shall be held whenever called by the Chairman of the Executive Committee, the Chairman of the Board, the President, the Vice President, or a majority of the members of the Executive Committee then in office and shall be held at such time and place as shall be designated in the notice of the meeting. Section 5. QUORUM AND MANNER OF ACTION. A majority of the Executive Committee shall constitute a quorum for the transaction of business and the act of a majority of those present at a meeting thereof at which a quorum is present shall be the act of the Committee. ARTICLE V --------- OTHER COMMITTEES ---------------- Section 1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors may, by resolution passed by a majority of the whole Board, from time to time appoint other committees of the Board of Directors. Each such committee, to the extent permitted by law and these By-Laws, shall have and may exercise such of the powers of the Board of Directors in the management and affairs of the Corporation as may be prescribed by the resolution creating such committee. A majority of all of the members of any such committee may determine its action and fix the time and place of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise prescribe. The Board of Directors shall have power to change the members of any such committee at any time, to fill vacancies and to discontinue any such committee at any time. Section 2. NON-BOARD COMMITTEES. The authority conferred upon the Board of Directors by Section 1 of this Article V to appoint committees of the Board of Directors shall not be deemed to preclude the appointment by either the Board of Directors or the Executive Committee of committees whose members need not be directors of the Corporation provided that such committees may not exercise any of the powers of the Board of Directors. ARTICLE VI ---------- OFFICERS -------- Section 1. NUMBER. The officers of the Corporation shall be the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee, the President, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors may also appoint one or more Assistant Vice Presidents, Assistant Secretaries or Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. Assistant Vice Presidents may also be appointed by the Chairman of the Board. Any of the Vice Presidents may be given such specific designation as may be determined from time to time by the Board of Directors. Any two or more offices except those of President and Secretary may be held by the same person. Section 2. ELECTION AND TERM OF OFFICE. The officers shall be elected annually by the Board of Directors at its organization meeting following the annual meeting of the stockholders and each shall hold office until the next annual election of officers and until his successor is elected and qualified, or until his death, resignation or removal. Any officer may be removed at any time, with or without cause, by a vote of the majority of the whole Board. Any vacancy occurring in any office may be filled by the Board of Directors. Section 3. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. (a) The Chairman of the Board shall exercise such powers and perform such duties as may be assigned to him by these By-Laws or by the Board of Directors. The Chairman of the Board shall preside at meetings of the stockholders and Board of Directors and, in the absence of the Chairman of the Executive Committee, shall preside at meetings of the Executive Committee. He shall be ex officio a member of all standing committees of the Board other than any standing audit committee or compensation committee. (b) The Vice Chairman of the Board, in the absence of the Chairman of the Board, shall preside at meetings of the stockholders and Board of Directors. He shall exercise such other powers and perform such other duties as may be assigned to him by these By-Laws or by the Board of Directors. Section 4. CHAIRMAN OF THE EXECUTIVE COMMITTEE. The Chairman of the Executive Committee shall preside at all meetings of the Executive Committee and, in the absence of the Chairman of the Board and the Vice Chairman of the Board, shall preside at meetings of the Board of Directors. The Chairman of the Executive Committee shall perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors. Section 5. PRESIDENT. The President, subject to the general control of the Board of Directors, shall be the chief executive officer of the Corporation and, as such, shall be responsible for the management and direction of the affairs of the Corporation, its officers, employees and agents and shall supervise generally the affairs of the Corporation. He shall exercise such other powers and perform such other duties as may be assigned to him by these By-Laws or by the Board of Directors. In the absence of the Chairman of the Board and the Vice Chairman of the Board, he shall preside at meetings of the stockholders and, in the absence of the Chairman of the Board, the Vice Chairman of the Board and the Chairman of the Executive Committee, he shall preside at meetings of the Board of Directors and the Executive Committee. He shall be ex officio a member of all standing committees of the Board other than any standing audit committee or compensation committee. Section 6. VICE PRESIDENTS. In the absence of the Chairman of the Board and the President, the Vice President designated by the Board of Directors shall have all of the powers and duties conferred upon the President. Except where by law the signature of the Chairman of the Board or the President is required, each of the Vice Presidents shall have the same power as the Chairman of the Board or the President to sign certificates, contracts and other instruments of the Corporation. Any Vice President shall perform such other duties and may exercise such other powers as may from time to time be assigned to him by these By-Laws, the Board of Directors, the Chairman of the Board or the President. Section 7. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall record or cause to be recorded in books provided for the purpose the minutes of the meetings of the stockholders, the Board of Directors, the Executive Committee and all other committees of the Board of Directors, if any; shall see that all notices are duly given in accordance with the provisions of these By-Laws and as required by law; shall be custodian of all corporate records (other than financial) and of the seal of the Corporation and see that the seal is affixed to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws; shall keep the list of stockholders which shall include the post office address of each stockholder and make all proper changes therein, retaining and filing his authority for all such entries; shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed, and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to him by the Board of Directors, the Chairman of the Board or the President. At the request of the Secretary, or in his absence or disability, any Assistant Secretary shall perform any of the duties of the Secretary and, when so acting, shall have all the powers and be subject to all the restrictions upon, the Secretary. Except where by law the signature of the Secretary is required, each of the Assistant Secretaries shall possess the same power as the Secretary to sign certificates, contracts, obligations and other instruments of the Corporation, and to affix the seal of the Corporation to such instruments, and attest the same. Section 8. TREASURER AND ASSISTANT TREASURER. The Treasurer shall keep or cause to be kept the books of account of the Corporation and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors, the Chairman of the Board or the President. The Treasurer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Treasurer shall perform all other duties commonly incident to his office and shall perform such other duties and have such other powers as the Board of Directors, the Chairman of the Board or the President shall designate from time to time. At the request of the Treasurer, or in his absence or disability, the Assistant Treasurer or, in case there shall be more than one Assistant Treasurer, the Assistant Treasurer designated by the Board of Directors, the Chairman of the Board, the President or the Treasurer, may perform any of the duties of the Treasurer and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Treasurer. Except where by law the signature of the Treasurer is required, each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all certificates, contracts, obligations and other instruments of the Corporation. Section 9. ASSISTANT VICE PRESIDENTS. The Assistant Vice Presidents shall perform such duties as shall be determined by the Board of Directors, the Chairman of the Board or the President of the Corporation. ARTICLE VII ----------- EXECUTION OF INSTRUMENTS ------------------------ The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute any corporate instrument or document or to sign the corporate name without limitation, except where otherwise provided by law or in these By-Laws, and such designation may be general or confined to specific instances. ARTICLE VIII ------------ VOTING OF SECURITIES OWNED BY THE CORPORATION --------------------------------------------- All stock and other securities of other corporations held by the Corporation shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board, the Chairman of the Executive Committee, the President or any Vice President. ARTICLE IX ---------- SHARES OF STOCK --------------- Section 1. FORM AND EXECUTION OF CERTIFICATES. The certificates of stock of the Corporation shall be numbered and shall be entered in the books of the Corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the Chairman of the Board, the President or any Vice President and the Secretary or an Assistant Secretary. Any or all of the signatures on such certificate may be a facsimile. In case any officer of the Corporation who shall have signed, or whose facsimile signature shall have been placed upon, such certificate shall cease to be such officer before such certificate shall have been issued, such certificate may nevertheless be issued by the Corporation with the same effect as though such person were such officer at the date of issuance. Section 2. TRANSFER. Transfer of stock shall be made on the books of the Corporation only by the person named in the certificate or by attorney lawfully constituted in writing, and upon surrender of the certificate. Section 3. FIXING RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 4. RECORD OWNER. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Delaware. Section 5. LOST CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. ARTICLE X --------- DIVIDENDS --------- Subject to the provisions of law and of the Certificate of Incorporation, the Board of Directors, at any regular or special meeting, may declare and pay dividends upon the shares of its stock either (a) out of its surplus as defined in and computed in accordance with the provisions of law or (b) in case it shall not have any such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, whenever and in such amount as, in the opinion of the Board of Directors, the condition of the affairs of the Corporation shall render advisable. Before payment of any dividend or making any distribution of profits, there may be set aside out of the surplus or net profits of the Corporation such sum or sums as the directors may from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation. ARTICLE XI ---------- CORPORATE SEAL -------------- The corporate seal shall consist of a die bearing the name of the Corporation and the inscription "Corporate Seal -- Delaware." Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE XII ----------- AMENDMENTS ---------- All By-Laws of the Corporation shall be subject to alterations or repeal, and new By-Laws may be made, by the stockholders at any annual or special meeting, or except as otherwise provided by these By-Laws or by law, by the affirmative vote of a majority of the directors then in office given at any regular or special meeting of the Board of Directors. EX-10.7 3 EXHIBIT 10-7 8TH AMENDMENT EXHIBIT 10.7 EIGHTH AMENDMENT TO EMPLOYMENT AGREEMENT This Eighth Amendment to Employment Agreement is made and entered into as of December 23, 1993, by and between Robert Half International Inc. (formerly Boothe Financial Corporation), a Delaware corporation, ("Corporation") and Harold M. Messmer, Jr. ("Officer"). The Employment Agreement dated as of October 2, 1985, as amended, between Corporation and Officer (the "Employment Agreement") is hereby amended as follows: 1. The first sentence of Section 3.6 of the Employment Agreement is amended, effective as of the date hereof, by inserting "subsequent to January 1, 1996" after "Upon the written request of Officer" and before ", but". 2. Amendment No. 7 to the Employment Agreement is hereby rescinded, effective June 1, 1993. 3. Effective June 1, 1993, Section 3.1 of the Employment Agreement is amended by deleting "$345,000" in both places that such amount occurs and replacing such amount with "$362,000". 4. Effective January 1, 1994, Section 3.1 of the Employment Agreement is amended by deleting "$362,000" in both places that such amount occurs and replacing such amount with "$364,900". 5. The parties hereto acknowledge that the effect of Sections 2, 3, and 4 hereof is to cause Officer's base salary, pursuant to the Employment Agreement, to increase by no more than the Consumer Price Index from calendar 1992 to calendar 1993 and from calendar 1993 to calendar 1994. 6. In all other respects, the Employment Agreement is hereby ratified and confirmed. IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day and year first written above. ROBERT HALF INTERNATIONAL INC. By /s/M. KEITH WADDELL --------------------------- M. Keith Waddell Senior Vice President /s/HAROLD M. MESSMER, JR. --------------------------- Harold M. Messmer, Jr. EX-10.9 4 EXHIBIT 10-9 6TH AMENDMENT EXHIBIT 10.9 SIXTH AMENDMENT TO RETIREMENT AGREEMENT This Sixth Amendment to the Key Executive Retirement Plan - Level II Agreement dated November 14, 1985 (the "Retirement Agreement") between Robert Half International Inc. (formerly Boothe Financial Corporation), a Delaware corporation, ("Corporation") and Harold M. Messmer, Jr. ("Messmer") is entered into as of December 23, 1993. 1. Section 1 of the Fifth Amendment to the Retirement Agreement is hereby rescinded. 2. In all other respects, the Retirement Agreement is ratified and confirmed. IN WITNESS WHEREOF, the parties hereto have executed this agreement on December 23, 1993. ROBERT HALF INTERNATIONAL INC. By /s/M. KEITH WADDELL ----------------------------- M. Keith Waddell Senior Vice President and Chief Financial Officer /s/HAROLD M. MESSMER, JR. ----------------------------- Harold M. Messmer, Jr. EX-10.15 5 EXHIBIT 10.15 1993 INCENTIVE PLAN EXHIBIT 10.15 ROBERT HALF INTERNATIONAL INC. 1993 INCENTIVE PLAN 1. PURPOSES. The principal purposes of the Robert Half International Inc. 1993 Incentive Plan (the "Plan") are: (a) to improve individual employee performance by providing long-term incentives and rewards to key employees of the Company, (b) to assist the Company in attracting, retaining and motivating key employees with experience and ability, and (c) to align the interests of such employees with those of the Company's stockholders. 2. DEFINITIONS. Unless the context clearly indicates otherwise, the following terms, when used in this Plan, shall have the meanings set forth below: (a) "Administrator" means a committee of the Board of Directors of the Company, the composition and the size of which shall cause such Administrator to be "disinterested" within the meaning of the General Rules and Regulations promulgated pursuant to Section 16 of the Exchange Act. Unless otherwise determined by the Board of Directors, the Administrator shall be the Compensation Committee of the Board of Directors. (b) "Board" means the Board of Directors of the Company. (c) "Change in Control" means the occurrence of any of the following: (i) A Schedule 13D or 13G is filed pursuant to the Exchange Act indicating that any person or group (as such terms are defined in Section 13(d)(3) of the Exchange Act) has become the holder of more than forty percent (40%) of the outstanding Voting Shares. For purposes of calculating the percentage of Voting Shares, such person or group, but no other person or group, shall be deemed the owner of any Voting Shares which such person or group may acquire upon conversion of securities or upon the exercise of options, warrants or rights. (ii) 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. (iii) 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. (iv) The stockholders of the Company approve a definitive agreement (i) to merge or consolidate the Company with or into another corporation in which the holders of the Stock immediately before such merger or reorganization will not, immediately following such merger or reorganization, hold as a group on a fully-diluted basis both the ability to elect at least a majority of the directors of the surviving corporation and at least a majority in value of the surviving corporation's outstanding equity securities, or (ii) to sell or otherwise dispose of all or substantially all of the assets of the Company. (v) An Offer is made by a person or group (as such terms are defined in Section 13(d)(3) of the Exchange Act) and such Offer has resulted in such person or group holding an aggregate of forty percent (40%) or more of the outstanding Voting Shares. For purposes of this Section 1(c)(v), Voting Shares held by such person or group shall be calculated in accordance with the last sentence of Section 1(c)(i) hereof. (d) "Common Stock" or "Stock" means Robert Half International Inc. Common Stock, par value $1.00 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 without any termination or leave of absence, except for a leave of absence approved by the Company or any Subsidiary which is less than six consecutive months in duration. (g) "Disability" or "Disabled" shall mean (i) a physical or mental condition which, in the judgment of the Administrator based on competent medical evidence satisfactory to the Administrator (including, if required by the Administrator, medical evidence obtained by an examination conducted by a physician selected by the Administrator), renders Holder unable to engage in any substantial gainful activity for the Company and which condition is likely to result in death or to be of long, continued and indefinite duration, or (ii) a judicial declaration of incompetence. (h) "Eligible Employee" means an employee of the Company or any Subsidiary (including an employee who is a director and/or officer) who, as determined by the Administrator in its sole discretion, has and exercises management functions and responsibilities. (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (j) "Fair Market Value" means the closing sales price on the New York Stock Exchange or the NASDAQ National Market System, as the case may be, on the date the value is to be determined as reported in THE WALL STREET JOURNAL (Western Edition). If there are no trades on such date, the closing price on the latest preceding business day upon which trades occurred shall be the Fair Market Value. If the Stock is not listed in the New York Stock Exchange or quoted on the NASDAQ National Market System, the Fair Market Value shall be determined in good faith by the Administrator. (k) "Grant" shall mean an Option or a Restricted Stock Award. (l) "Grant Date" means the date a Grant is made under the Plan. (m) "Holder" means the recipient of a Grant pursuant to this Plan. (n) "Issue Date" means the date on which shares of Stock subject to a Restricted Stock Award are issued or transferred by the Company to the account of an Eligible Employee who has received such grant. (o) "Minimum Withholding Taxes" means any applicable federal, state and local income and other employment taxes which the Company is required to withhold in connection with (i) the lapse of restrictions on Stock subject to a Restricted Stock Award, (ii) the exercise of an Option, or (iii) the making of an election under Section 83(b) of the Internal Revenue Code with respect to a Restricted Stock Award. (p) "Offer" means a tender offer or an exchange offer for the Company's Stock. (q) "Option" or "Stock Option" means a right granted under the Plan to a Holder to purchase shares of Common Stock at a fixed price for a specified period of time. (r) "Option Price" means the price at which a share of Common Stock covered by an Option granted hereunder may be purchased. (s) "Optionee" means an Eligible Employee who has received a Stock Option granted under the Plan. (t) "Restricted Stock Award" means a grant described in Section 6 of the Plan. (u) "Securities Act" means the Securities Act of 1933, as amended. (v) "Subsidiary" means a "subsidiary" corporation as defined in Section 424(f) of the Internal Revenue Code of 1986, as amended. (w) "Vested" means that portion of a Grant with respect to which the Vesting Date has arrived or passed. (x) "Vesting Date" means the date specified in Section 5 or 6 hereof, as the case may be, or such other date as shall be established by the Administrator or otherwise on the Grant Date or thereafter. (y) "Voting Shares" means the outstanding shares of the Company entitled to vote for the election of Directors. 3. STOCK AVAILABLE. The number of shares of Stock for which Grants may be made during any calendar year shall be that number which is equal to 1.5% of the number of issued and outstanding shares of Common Stock of the Company (excluding treasury shares) as of January 1 of such year (January 1, 1993, in the case of the first year). Any shares of Common Stock covered by Options which have terminated or expired prior to exercise or have been cancelled without value shall not be counted against the annual limit and shall be available for further grants hereunder and shares constituting the portion of a Restricted Stock Award that is forfeited before any dividends are paid upon such forfeited shares shall not be counted against the annual limit and shall be available for further grants hereunder. The foregoing number of shares available for Grants shall be subject to any adjustments which may be made pursuant to Section 12 hereof. Shares of Stock used for Options may be either shares of authorized but unissued Common Stock or treasury shares or both. Shares of Stock used for Restricted Stock Awards shall be treasury shares to the extent that treasury shares are available, and, if no treasury shares are available, Restricted Stock Awards shall be authorized but unissued Common Stock. 4. PARTICIPANTS. From time to time the Administrator shall, in its sole discretion, but subject to all of the provisions of the Plan, determine which Eligible Employees will be given Grants under the Plan, the number of Options or shares of Restricted Stock to be granted to each such Eligible Employee and the terms, conditions and restrictions of each such Grant. In making such determinations, the Administrator shall take into account the nature of services rendered and to be rendered by the respective recipients, their present and potential contribution to the Company's success and such other factors as the Administrator in its discretion deems relevant to the accomplishment of the purposes of the Plan. In any year, the Administrator may approve Options to Eligible Employees subject to differing terms and conditions and Restricted Stock Awards to Eligible Employees subject to differing terms and conditions. During any calendar year, the number of shares of Stock with respect to which Options are granted to any one individual may not exceed 75% of the number of shares of Stock available for Grants during 1994. 5. OPTIONS. Each Option granted hereunder shall be in writing and shall contain such terms and conditions as the Administrator may determine, subject to the following: (a) PRICE. The Option Price shall be not less than 85% of the Fair Market Value of Common Stock on the Grant Date. (b) TERM AND EXERCISE. Options granted hereunder shall have a term of no longer than ten years from the Grant Date. An Option may be exercised only as to those portions of the Option that have Vested. Stock Options must be exercised for full shares of Common Stock. (c) INCENTIVE STOCK OPTIONS. No Option granted hereunder shall be deemed an Incentive Stock Option (as such term is defined in the Internal Revenue Code) unless (a) such Option is designated as an Incentive Stock Option at the time of grant by the Administrator and (b) such Option otherwise meets the requirements for Incentive Stock Options specified in the Internal Revenue Code. However, no Option designated as an Incentive Stock Option shall contain any restrictions upon the ability of the Holder to dispose of Stock acquired upon the exercise thereof other than as provided elsewhere in this Plan. During the life of the Plan, the total number of shares for which Incentive Stock Options may be granted may not exceed ten times the number of shares available for Grants under the Plan during the first calendar year in which the Plan is in effect. (d) VESTING. Unless otherwise determined by the Administrator on the Grant Date, each Option shall Vest as to twenty-five percent (25%) of the Stock covered by such Option on each of the first through fourth anniversaries of the Grant Date. Notwithstanding the foregoing, the Administrator may accelerate Vesting, in whole or in part, under such terms and conditions as the Administrator deems appropriate. (e) EXERCISE OF OPTION. To exercise an Option, the Holder shall give written notice of exercise to the Company, specifying the number of shares of Common Stock to be purchased and identifying the specific Options that are being exercised. From time to time the Administrator may establish procedures relating to such exercises. An Option is exercisable during a Holder's lifetime only by the Holder or, with respect to options that are not designated as Incentive Stock Options, under such other circumstances as may be permitted by Rule 16b-3, or any successor rule, under the Exchange Act and all interpretations of the staff of the Securities and Exchange Commission thereunder. (f) PAYMENT OF OPTION PRICE. The purchase price for Options being exercised must be paid in full at time of exercise. Payment shall be, at the option of the holder at the time of exercise, by any combination of cash, check or delivery of shares of Common Stock that have been owned by Holder for at least six months. If all or a portion of the purchase price is paid by delivery of shares, the shares shall be valued at the Fair Market Value of such shares on the date of exercise. In addition, the Administrator may, in its discretion, authorize payment of the Option Price and of Minimum Withholding Taxes 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 qualified domestic relations order or 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. (h) DISPOSITION OF ACQUIRED STOCK. No share of Stock acquired upon the exercise of an Option may be sold, assigned, pledged, transferred or otherwise conveyed in any manner until six months after the Grant Date for such Option. 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 later of (i) the Vesting Date for such shares and (ii) six months after the Grant Date for such shares. (c) VESTING. Unless otherwise determined by the Administrator on the Grant Date, each Restricted Stock Award shall Vest as to twenty-five percent (25%) of the Stock covered by such grant on each of the first through fourth Vesting Dates which occur following the related Grant Date of such Restricted Stock Award. Notwithstanding the foregoing, the Administrator may accelerate the lapsing of restrictions on a Restricted Stock Award, in whole or in part under such terms and conditions as the Administrator deems appropriate. (d) AUTOMATIC VESTING IN SPECIAL CIRCUMSTANCES. Any provisions herein to the contrary notwithstanding, a Restricted Stock Award shall automatically become Vested upon (a) the Death or Disability of the Holder or (b) the occurrence of a Change in Control. (e) AGREEMENT BY HOLDER REGARDING WITHHOLDING TAXES. Each Holder granted a Restricted Stock Award shall represent in writing that such Holder acknowledges that, with respect to each Restricted Stock Award held by such Holder, (i) Minimum Withholding Taxes shall be due with respect to shares of Stock covered by such award, (ii) payment of Minimum Withholding Taxes to the Company is the responsibility of Holder and (iii) payment of such Minimum Withholding Taxes may require a significant cash outlay by Holder. (f) ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any Holder properly elects within thirty (30) days of the Grant Date to include in gross income for federal income tax purposes an amount equal to the fair market value of the shares of Stock on the Grant Date, such Holder shall pay in cash to the Company in the calendar month of such Grant Date, or make arrangements satisfactory to the Administrator to pay to the Company, any Minimum Withholding Taxes required to be withheld with respect to such shares. (g) CONSIDERATION. Recipients of Restricted Stock Awards made in treasury shares shall not be required to pay any consideration to the Company. Recipients of Restricted Stock Awards made in the form of previously unissued shares shall be required to pay such minimum consideration, if any, as may be required by applicable law. The Administrator shall determine the form of consideration at the time of the award, which may include services rendered prior to the award. 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 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"); provided, however, that Share Reduction may not be used within six months of the Grant Date. If withholding taxes are paid by Share Reduction, such shares shall be valued at the Fair Market Value as of the date of exercise or vesting. A Holder may elect to have additional shares withheld above the amount required to satisfy Minimum Withholding Taxes. However, total Share Reduction 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 the event that Minimum Withholding Taxes are not paid by Holder, to the extent permitted by law the Company shall have the right, but not the obligation, to cause such withholding taxes to be satisfied by Share Reduction or by offsetting such withholding taxes against amounts otherwise due from the Company to the Holder. 8. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. So long as any restrictions or obligations imposed pursuant hereto shall apply to a share of Stock (including, but not limited to, the restrictions or obligations imposed pursuant to Sections 5(f), 5(h), 6(b), 6(e), 6(f) and 7 hereof), each certificate evidencing such share shall bear an appropriate legend referring to the terms, conditions and restrictions. In addition, the Company may instruct its transfer agent that shares of Stock evidenced by such certificates may not be transferred without the written consent of the Company. Any attempt to dispose of such shares of Stock in contravention of such terms, conditions and restrictions shall be invalid. Certificates representing shares that have not Vested or with respect to which Minimum Withholding Taxes have not been paid will be held in custody by the Company or such bank or other institution designated by the Administrator. 9. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Holder's Continuous Employment with the Company or any Subsidiary shall terminate for any reason, then, with respect to any portion of a Grant that has not Vested prior to or concurrently with such termination (a) in the case of an Option, all rights to such portion that has not Vested shall terminate and (b) in the case of a Restricted Stock Award, all rights to the shares covered by any portion thereof that has not Vested shall be forfeited; provided, however, that the Administrator, in its sole discretion within ninety (90) days of such termination of Continuous Employment, may notify the Holder in writing that the Holder's rights in such portion that has not Vested will not terminate or be forfeited and that the Holder shall continue to be the owner thereof, subject to such continuing restrictions as the Administrator may prescribe in 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. 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. EX-10.17 6 EXHIBIT 10.17 BONUS PLAN EXHIBIT 10.17 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, Target Bonuses and other items 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 twice the highest bonus paid by the Company to any Eligible Executive with respect to 1993, as reported by the Company in its Proxy Statement for the 1994 Annual Meeting of Stockholders. 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 twice the highest bonus paid by the Company to any Eligible Executive with respect to 1993, as reported by the Company in its Proxy Statement for the 1994 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, $1.00 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 twice the highest bonus paid by the Company to any Eligible Executive with respect to 1993, as reported by the Company in its Proxy Statement for the 1994 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. 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. 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. EX-10.19 7 EXHIBIT 10.19 INDEMNIFICATION AGREEMENT EXHIBIT 10.19 Indemnification Agreement for Directors --------------------------------------- The form of Indemnification Agreement for directors filed as Exhibit 10.27 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989, has been entered into with the following individuals on the dates indicated:
Individual Data ---------- ---- Andrew S. Berwick, Jr. March 23, 1989 Frederick P. Furth March 23, 1989 Edward W. Gibbons March 23, 1989 Todd Goodwin May 24, 1989 Leonard I. Green March 23, 1989 Ralph T. McElvenney, Jr. March 23, 1989 Harold M. Messmer, Jr. March 23, 1989 Charles E. F. Millard March 23, 1989 Frederick A. Richman March 15, 1994 Thomas J. Ryan March 23, 1989 J. Stephen Schaub March 23, 1989
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the individual Indemnification Agreements are not being filed. EX-11 8 EXHIBIT 11 PER SHARE EARNINGS EXHIBIT 11 TO FORM 10-K ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES COMPUTATION OF PER SHARE EARNINGS (in thousands, except per share amounts)
YEARS ENDED DECEMBER 31, 1993 1992 1991 ---- ---- ---- NET INCOME $11,723 $ 4,382 $ 4,115 ------- ------- ------- ------- ------- ------- WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING Primary: Common stock- 12,155 11,742 11,427 Common stock equivalents - stock options (A) 391 223 176 ------- ------- ------- Primary shares outstanding 12,546 11,965 11,603 ------- ------- ------- ------- ------- ------- Fully Diluted: Common stock 12,155 11,742 11,427 Common stock equivalents - stock options (A) 475 261 210 ------- ------- ------- Fully diluted shares outstanding 12,630 12,003 11,637 ------- ------- ------- ------- ------- ------- NET INCOME PER SHARE: Primary $ .93 $ .37 $ .35 Fully diluted $ .93 $ .37 $ .35 (A) The treasury stock method was used to determine the weighted average number of shares of common stock equivalents outstanding during the periods.
EX-21 9 EXHIBIT 21 LIST OF SUBSIDIARIES EXHIBIT 21 LIST OF SUBSIDIARIES Jurisdiction of Name of Subsidiary Incorporation - ----------------- ------------- RH Holding Company, Inc. California LegalTeam, Inc. California Robert Half of Texas G.P. Ltd. Delaware XYZ-II, Inc. Delaware Robert Half Incorporated Florida R-H International Advertising Fund, Inc. Florida Robert Half of Nevada, Inc. Nevada R-H Franchises Western Hemisphere, Inc. New York Robert Half of Philadelphia, Inc. Pennsylvania RHT, L.P. (a limited partnership) Texas Fontaine Archer Van de Voorde S.A./N.V. Belgium S.A. Robert Half N.V. Belgium Accountemps S.A./N.V. Belgium Robert Half Canada Inc. Canada Norman Parsons S.A. (72% owned) France Accountemps S.A.R.L. France Robert Half S.A. France Robert Half Limited United Kingdom Robert Half Personnel (Midlands) Limited United Kingdom Envaward Limited United Kingdom Hatlon Limited United Kingdom EX-23 10 EXHIBIT 23 ACCOUNTANTS CONSENT EXHIBIT 23 ACCOUNTANTS' CONSENT As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K into the Company's previously filed Registration Statements Files No. 33-39204, 33-39187, 33-14706, 33-32623, 33-32622, 33-40795, 33-62138, 33-62140 and 033-52617. ARTHUR ANDERSEN & CO. San Francisco, California March 22, 1994 -----END PRIVACY-ENHANCED MESSAGE-----