-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OeYqrGmZVF1soPxyua3KPCR5PUpHcqWeduRHqxMwIci59x6/73tEM/eFy7RNChTE AVLYH4VrR/HETcN8Pfv3UA== 0001047469-97-003454.txt : 19971111 0001047469-97-003454.hdr.sgml : 19971111 ACCESSION NUMBER: 0001047469-97-003454 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALF ROBERT INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000315213 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 941648752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10427 FILM NUMBER: 97711956 BUSINESS ADDRESS: STREET 1: 2884 SAND HILL ROAD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 4158549700 MAIL ADDRESS: STREET 1: 2884 SAND HILL ROAD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 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-Q 1 FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . ------------------------ COMMISSION FILE NUMBER 1-10427 ROBERT HALF INTERNATIONAL INC. (Exact name of registrant as specified in its charter) DELAWARE 94-1648752 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2884 SAND HILL ROAD SUITE 200 MENLO PARK, CALIFORNIA (Address of principal executive 94025 offices) (zip-code) Registrant's telephone number, including area code: (650) 234-6000 ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) had been subject to such filing requirements for the past 90 days. Yes _X_ No ____ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of September 30, 1997: 90,957,694 shares of $.001 par value Common Stock - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ (UNAUDITED) ASSETS: Cash and cash equivalents........................................................... $ 130,795 $ 80,181 Accounts receivable, less allowances of $6,425 and $4,016........................... 173,030 125,383 Other current assets................................................................ 17,658 12,184 ------------- ------------ Total current assets............................................................ 321,483 217,748 Intangible assets, less accumulated amortization of $44,364 and $39,461............. 173,420 174,663 Other assets........................................................................ 42,246 23,601 ------------- ------------ Total assets.................................................................... $ 537,149 $ 416,012 ------------- ------------ ------------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses............................................... $ 21,262 $ 15,049 Accrued payroll costs............................................................... 90,665 66,087 Income taxes payable................................................................ 7,842 3,883 Current portion of notes payable and other indebtedness............................. 3,594 1,542 ------------- ------------ Total current liabilities....................................................... 123,363 86,561 Notes payable and other indebtedness, less current portion.......................... 4,829 5,069 Deferred income taxes............................................................... 15,994 15,937 ------------- ------------ Total liabilities............................................................... 144,186 107,567 Stockholders' Equity: Common stock, $.001 par value authorized 160,000,000 shares; issued and outstanding 90,969,384 and 89,622,256 shares.................................................. 91 90 Capital surplus..................................................................... 178,757 140,443 Deferred compensation............................................................... (35,332) (26,802) Accumulated translation adjustments................................................. (1,079) 23 Retained earnings................................................................... 250,526 194,691 ------------- ------------ Total stockholders' equity...................................................... 392,963 308,445 ------------- ------------ Total liabilities and stockholders' equity...................................... $ 537,149 $ 416,012 ------------- ------------ ------------- ------------
All shares and amounts have been restated to retroactively reflect the three-for-two stock split effected in the form of a stock dividend in September 1997. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 1 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ---------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ---------- (UNAUDITED) (UNAUDITED) Net service revenues............................................. $ 339,754 $ 232,950 $ 934,399 $ 639,838 Direct costs of services, consisting of payroll, payroll taxes and insurance costs for temporary employees.................... 204,554 141,162 563,165 387,487 ---------- ---------- ---------- ---------- Gross margin..................................................... 135,200 91,788 371,234 252,351 Selling, general and administrative expenses..................... 93,411 63,983 257,281 176,133 Amortization of intangible assets................................ 1,233 1,356 3,693 4,025 Interest income.................................................. (1,154) (609) (2,840) (1,577) ---------- ---------- ---------- ---------- Income before income taxes....................................... 41,710 27,058 113,100 73,770 Provision for income taxes....................................... 17,079 11,112 46,339 30,361 ---------- ---------- ---------- ---------- Net income....................................................... $ 24,631 $ 15,946 $ 66,761 $ 43,409 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income per share............................................. $ .26 $ .17 $ .71 $ .47 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
All per share amounts have been restated to retroactively reflect the three-for-two stock split effected in the form of a stock dividend in September 1997. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 2 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, ---------------------- 1997 1996 ---------- ---------- (UNAUDITED) COMMON STOCK--SHARES: Balance at beginning of period.......................................................... 89,622 86,677 Issuance of restricted stock............................................................ 483 955 Repurchases of common stock............................................................. (413) (263) Exercises of stock options.............................................................. 1,263 1,492 Issuance of common stock for acquisitions............................................... 14 544 ---------- ---------- Balance at end of period.............................................................. 90,969 89,405 ---------- ---------- ---------- ---------- COMMON STOCK--PAR VALUE: Balance at beginning of period.......................................................... $ 90 $ 87 Issuance of restricted stock............................................................ -- 1 Exercises of stock options.............................................................. 1 1 ---------- ---------- Balance at end of period.............................................................. $ 91 $ 89 ---------- ---------- ---------- ---------- CAPITAL SURPLUS: Balance at beginning of period.......................................................... $ 140,443 $ 99,739 Issuance of restricted stock--excess over par value..................................... 17,251 24,335 Exercises of stock options--excess over par value....................................... 4,885 3,577 Issuance of common stock for acquisition................................................ 400 -- Tax benefits from exercises of stock options and restricted stock vesting............... 15,778 10,692 ---------- ---------- Balance at end of period.............................................................. $ 178,757 $ 138,343 ---------- ---------- ---------- ---------- DEFERRED COMPENSATION: Balance at beginning of period.......................................................... $ (26,802) $ (9,642) Issuance of restricted stock............................................................ (17,251) (24,336) Amortization of deferred compensation................................................... 8,721 4,706 ---------- ---------- Balance at end of period.............................................................. $ (35,332) $ (29,272) ---------- ---------- ---------- ---------- ACCUMULATED TRANSLATION ADJUSTMENTS: Balance at beginning of period.......................................................... $ 23 $ 51 Translation adjustments................................................................. (1,102) (264) ---------- ---------- Balance at end of period.............................................................. $ (1,079) $ (213) ---------- ---------- ---------- ---------- RETAINED EARNINGS: Balance at beginning of period.......................................................... $ 194,691 $ 137,695 Issuance of common stock for acquisition................................................ -- 1,285 Repurchases of common stock--excess over par value...................................... (10,926) (4,522) Net income.............................................................................. 66,761 43,409 ---------- ---------- Balance at end of period.............................................................. $ 250,526 $ 177,867 ---------- ---------- ---------- ----------
All shares and amounts have been restated to retroactively reflect the three-for-two stock split effected in the form of a stock dividend in September 1997. The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 3 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, ---------------------- 1997 1996 ---------- ---------- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income................................................................................ $ 66,761 $ 43,409 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets....................................................... 3,693 4,025 Depreciation expense.................................................................... 8,995 4,396 Deferred income taxes................................................................... (4,946) (1,128) Changes in assets and liabilities, net of effects of acquisitions: Increase in accounts receivable....................................................... (47,158) (25,530) Increase in accounts payable, accrued expenses and accrued payroll costs.............. 29,900 20,934 Increase (decrease) in income taxes payable........................................... 3,959 (6,136) Change in other assets, net of change in other liabilities............................ 9,014 (2,081) ---------- ---------- Total adjustments..................................................................... 3,457 (5,520) ---------- ---------- Net cash and cash equivalents provided by operating activities............................ 70,218 37,889 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired...................................................... (3,338) (1,038) Capital expenditures.................................................................... (24,550) (13,302) ---------- ---------- Net cash and cash equivalents used in investing activities................................ (27,888) (14,340) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchases of common stock or common stock equivalents................................. (10,926) (4,522) Principal payments on notes payable and other indebtedness.............................. (1,454) (3,632) Proceeds and tax benefits from exercise of stock options and restricted stock vesting... 20,664 14,270 ---------- ---------- Net cash and cash equivalents provided by financing activities............................ 8,284 6,116 ---------- ---------- Net increase in cash and cash equivalents................................................. 50,614 29,665 Cash and cash equivalents at beginning of period.......................................... 80,181 41,346 ---------- ---------- Cash and cash equivalents at end of period................................................ $ 130,795 $ 71,011 ---------- ---------- ---------- ---------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest................................................................................ $ 348 $ 434 Income taxes............................................................................ $ 29,805 $ 25,923 Acquisitions: Fair value of assets acquired-- Intangible assets..................................................................... $ 4,079 $ 4,155 Other................................................................................. 499 1,713 Liabilities incurred-- Notes payable and contracts........................................................... (536) (2,625) Other................................................................................. (304) (920) Common stock issued..................................................................... (400) (1,285) ---------- ---------- Cash paid, net of cash acquired......................................................... $ 3,338 $ 1,038 ---------- ---------- ---------- ----------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 4 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS. Robert Half International Inc. (the "Company") provides specialized staffing services through such divisions as ACCOUNTEMPS-REGISTERED TRADEMARK-, ROBERT HALF-REGISTERED TRADEMARK-, OFFICETEAM-REGISTERED TRADEMARK-, RHI CONSULTING-REGISTERED TRADEMARK- and RHI MANAGEMENT RESOURCES-REGISTERED TRADEMARK-. The Company, through its Accountemps, Robert Half, and RHI Management Resources divisions, is the world's largest specialized provider of temporary and permanent personnel in the fields of accounting and finance. OfficeTeam specializes in skilled temporary administrative personnel. RHI Consulting provides contract information technology professionals. RHI Management Resources places senior-level accounting and financial professionals on longer term, more complex projects lasting for several months to a year or longer. Revenues are predominantly from temporary services. The Company operates in the United States, Canada and Europe. The Company is a Delaware corporation. PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany balances have been eliminated. Certain reclassifications have been made to the 1996 financial statements to conform to the 1997 presentation. INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in management's opinion, include all adjustments necessary for a fair statement of results for such interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules or regulations; however, the Company believes that the disclosures made are adequate to make the information presented not misleading. The interim results for the three and nine months ended September 30, 1997, and 1996 are not necessarily indicative of results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. REVENUE RECOGNITION. Temporary service revenues are recognized when the services are rendered by the Company's temporary employees. Permanent placement revenues are recognized when employment candidates accept offers of permanent employment. Reserves are established to estimate losses due to placed candidates not remaining in employment for the Company's guarantee period, typically 90 days. CASH AND CASH EQUIVALENTS. For purposes of the Consolidated Statements of Cash Flows, the Company classifies all highly-liquid investments with a maturity of three months or less as cash equivalents. INTANGIBLE ASSETS. Intangible assets represent the cost of acquired companies in excess of the fair market value of their net tangible assets at the acquisition date, and are being amortized on a straight-line basis over a period of 40 years. The carrying value of intangible assets is periodically reviewed by the Company and impairments are recognized when the expected future operating cash flows derived from such intangible assets are less than their carrying value. Based upon its most recent analysis, the Company believes that no material impairment of intangible assets existed at September 30, 1997. INCOME TAXES. Deferred taxes are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. 5 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED) NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FOREIGN CURRENCY TRANSLATION. Foreign income statement items are translated at the monthly average exchange rates prevailing during the period. Foreign balance sheets are translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as part of Stockholders' Equity. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Income. USE OF ESTIMATES. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. NOTE B--NEW ACCOUNTING PRONOUNCEMENTS In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting No. 128 (SFAS No. 128), Earnings Per Share. SFAS No. 128 requires the disclosure of basic net income per share and modifies existing guidance for computing fully diluted net income per share. Under the new standard, basic net income per share is computed as net income divided by weighted average shares, excluding the dilutive effects of stock options and other potentially dilutive securities. The effective date of SFAS No. 128 is December 15, 1997 and early adoption is not permitted. The Company intends to adopt SFAS No. 128 during the quarter and year ended December 31, 1997. The Company does not expect this pronouncement to have a material impact on net income per share. NOTE C--STOCK SPLIT In September 1997, the Company effected a three-for-two stock split in the form of a stock dividend. All share and per share amounts in the financial statements have been restated to retroactively reflect the three-for-two stock split. NOTE D--SUBSEQUENT EVENT In October 1997, the Company authorized the repurchase, from time to time, of up to four million shares of the Company's common stock on the open market or in privately negotiated transactions, depending on market conditions. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 Temporary services revenues were $313 million and $215 million for the three months ended September 30, 1997 and 1996, respectively, increasing by 46% during the three months ended September 30, 1997 compared to the same period in 1996. Temporary services revenues were $861 million and $589 million for the nine months ended September 30, 1997 and 1996, respectively, increasing by 46% during the nine months ended September 30, 1997 compared to the same period in 1996. Permanent placement revenues were $27 million and $18 million for the three months ended September 30, 1997 and 1996, respectively, increasing by 50% during the three months ended September 30, 1997 compared to the same period in 1996. Permanent placement revenues were $73 million and $51 million for the nine months ended September 30, 1997 and 1996, respectively, increasing by 43% during the nine months ended September 30, 1997 compared to the same period in 1996. Overall revenue increases reflect continued improvement in demand for the Company's services, which the Company believes is a result of increased acceptance in the use of professional staffing services. Revenues from companies acquired during the nine months ended September 30, 1997 were not material. The Company currently has more than 200 offices in 39 states and five foreign countries. Domestic operations represented 90% of revenues for both the three and nine months ended September 30, 1997 and 91% of revenues for both the three and nine months ended September 30, 1996. Foreign operations represented 10% of revenues for both the three and nine months ended September 30, 1997 and 9% of revenues for both the three and nine months ended September 30, 1996. Gross margin dollars from the Company's temporary services represent revenues less direct costs of services, which consist of payroll, payroll taxes and insurance costs for temporary employees. Gross margin dollars from permanent placement services are equal to revenues, as there are no direct costs associated with such revenues. Gross margin dollars for the Company's temporary services were $108 million and $298 million for the three and nine months ended September 30, 1997, respectively, compared to $74 million and $201 million for the comparable periods in 1996, increasing by 46% and 48% for the three and nine months ended September 30, 1997, respectively. Gross margin amounts equaled 35% of revenues for temporary services for both the three and nine months ended September 30, 1997, compared to 34% of temporary service revenues for both the three and nine months ended September 30, 1996, which the Company believes reflects its ability to adjust billing rates and wage rates to underlying market conditions. Gross margin dollars for the Company's permanent placement division were $27 million and $73 million for the three and nine months ended September 30, 1997, respectively, compared to $18 million and $51 million for the comparable periods in 1996, increasing by 50% and 43% for the three and nine months ended September 30, 1997, respectively. Selling, general and administrative expenses were $93 million and $257 million for the three and nine months ended September 30, 1997, respectively, compared to $64 million and $176 million during the three and nine months ended September 30, 1996, respectively. Selling, general and administrative expenses as a percentage of revenues were 27% and 28% for the three and nine months ended September 30, 1997, respectively, compared to 27% and 28% for the three and nine months ended September 30, 1996, respectively. Selling, general and administrative expenses consist primarily of staff compensation, advertising, and occupancy costs, most of which generally follow changes in revenues. 7 The Company allocates the excess of cost over the fair market value of the net tangible assets first to identifiable intangible assets, if any, and then to goodwill. Although management believes that goodwill has an unlimited life, the Company amortizes these costs over 40 years. Management believes that its strategy of making acquisitions of established companies in established markets and maintaining its presence in these markets preserves the goodwill for an indeterminate period. The carrying value of intangible assets is periodically reviewed by the Company and impairments are recognized when the expected future operating cash flows derived from such intangible assets is less than their carrying value. Based upon its most recent analysis, the Company believes that no material impairment of intangible assets existed at September 30, 1997. Intangible assets represented 32% of total assets and 44% of total stockholders' equity at September 30, 1997. Interest income for the three months ended September 30, 1997 and 1996 was $1,443,000 and $783,000, respectively, while interest expense for the three months ended September 30, 1997 and 1996 was $289,000 and $174,000, respectively. Interest income for the nine months ended September 30, 1997 and 1996 was $3,540,000 and $2,006,000, respectively, while interest expense for the nine months ended September 30, 1997 and 1996 was $700,000 and $429,000, respectively. These changes primarily reflect an increase in cash and cash equivalents. The provision for income taxes was 41% for all periods presented. LIQUIDITY AND CAPITAL RESOURCES The change in the Company's liquidity during nine months ended September 30, 1997 is the net effect of funds generated by operations and the funds used for the staffing services acquisitions, capital expenditures and principal payments on outstanding notes payable. For the nine months ended September 30, 1997, the Company generated $70.2 million from operations, used $27.9 million in investing activities and provided $8.3 million by financing activities. The Company's working capital at September 30, 1997 included $130.8 million in cash and cash equivalents. In addition at September 30, 1997, the Company had available $71.4 million of its $80 million bank revolving line of credit. The Company's working capital requirements consist primarily of the financing of accounts receivable. While there can be no assurances in this regard, the Company expects that internally generated cash plus the bank revolving line of credit will be sufficient to support the working capital needs of the Company, the Company's fixed payments, and other obligations on both a short and long term basis. As of September 30, 1997, the Company had no material capital commitments. In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share. SFAS No. 128 requires the disclosure of basic net income per share and modifies existing guidance for computing fully diluted net income per share. Under the new standard, basic net income per share is computed as net income divided by weighted average shares, excluding the dilutive effects of stock options and other potentially dilutive securities. The effective date of SFAS No. 128 is December 15, 1997 and early adoption is not permitted. The Company intends to adopt SFAS No. 128 during the quarter and year ended December 31, 1997 and does not expect this pronouncement to have a material impact on net income per share. In September 1997, the Company effected a three-for-two stock split in the form of a stock dividend. All share and per share amounts in the financial statements have been restated to retroactively reflect the three-for-two stock split. 8 PART II--OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
EXHIBIT NO. EXHIBIT - ------------- ------------------------------------------------------------------------------------------- 10.1 1985 Stock Option Plan. 10.2 StockPlus Plan. 10.3 Outside Directors' Option Plan. 10.4 1989 Restricted Stock Plan. 11 Computation of Per Share Earnings. 27 Financial Data Schedule.
(b) The registrant filed no current report on Form 8-K during the quarter covered by this report. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROBERT HALF INTERNATIONAL INC. (Registrant) By /s/ M. KEITH WADDELL ------------------------------------ M. Keith Waddell, SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER (PRINCIPAL FINANCIAL OFFICER AND DULY AUTHORIZED SIGNATORY) Date: November 10, 1997 10 INDEX TO EXHIBITS
EXHIBIT NO. PAGE - ------------- --------- 10.1 1985 Stock Option Plan........................................................................ 10.2 StockPlus Plan................................................................................ 10.3 Outside Directors' Option Plan................................................................ 10.4 1989 Restricted Stock Plan.................................................................... 11 Computation of Per Share Earnings............................................................. 27 Financial Data Schedule.......................................................................
EX-10.1 2 EXHIBIT 10.1 1985 STOCK OPTION PLAN OF ROBERT HALF INTERNATIONAL INC. (As Amended and Restated Effective September 26, 1997) 1. PURPOSE OF THE PLAN The purpose of the 1985 Stock Option Plan (the "Plan") of Robert Half International Inc. (the "Company") are to: (a) Furnish incentive to individuals chosen to receive options because they are considered capable of responding by improving operations and increasing profits; (b) Encourage selected employees to accept or continue employment with the Company or its Affiliates; and (c) Increase the interest of selected employees in the Company's welfare through their participation in the growth in value of the common stock, $0.001 par value, of the Company ("Common Stock"). To accomplish the foregoing objectives, this Plan provides a means whereby employees may receive options to purchase Commons Stock, stock appreciation rights described in Section 8 ("SARs"), and limited stock appreciation rights as described in Section 9 ("Limited Rights"). Options granted under this Plan ("Options") will be either nonqualified options ("NQOs") subject to federal income taxation upon exercise or incentive stock options ("ISOs") not subject to immediate federal income taxation upon exercise. 2. ELIGIBLE PERSONS Every person who at the date of grant is an employee of the Company or of any Affiliate of the Company is eligible to receive NQOs, ISOs, SARs, or Limited Rights under this Plan; provided, however, that an ISO may not be granted under this Plan to any person who owns, directly or indirectly, stock of the Company constituting more than ten percent of the total combined voting power of the Company's outstanding stock, or the stock of any Affiliate of the Company, unless the exercise price of the ISO at the time the option is granted is at least 110 percent of the fair market value of the stock subject to the option, and the option is exercisable for no more than five years after the date of the grant, as set forth in Section 6.2. The term "Affiliate," as used in this Plan, means a parent or subsidiary corporation, as defined in the applicable provisions (currently Section 425) of the Internal Revenue Code of 1986, as amended (the "Code"). The term "employee" shall have the meaning ascribed for purposes of Section 3401(c) of the Code and the Treasury Regulations promulgated thereunder and shall include an officer or a director who is also an employee. 3. STOCK SUBJECT TO THIS PLAN The total number of shares of stock that may be (i) issued upon the exercise of Options and (ii) covered by options cancelled or surrendered upon the exercise of SARs or Limited Rights, is 12,600,000 shares of Common Stock. The shares covered by the portion of any grant that expires unexercised under this Plan shall become available again for grants under this Plan. All shares issued under this Plan or covered by options surrendered upon the exercise of SARs or Limited Rights, however, shall be counted against the 8,400,000 share limitation. The number of shares reserved for purchase under this Plan or covered by options that may be cancelled or surrendered upon the exercise of SARs or Limited Rights is subject to adjustment in accordance with the provisions for adjustment in this Plan. 4. ADMINISTRATION This Plan shall be administered by the Board of Directors of the Company (the "Board") or by a committee appointed by the Board which shall not have less than two Board members (in either case, the "Administrator"). No Option, SAR, or Limited Right shall be granted to a director of the Company except (i) by the Board when a majority of the members of the Board, and a majority of the directors acting in the matter, are disinterested persons, or (ii) by the Administrator when the Administrator is composed of three or more persons having full authority to act in the matter and each member of the Administrator is a disinterested person. No Option, SAR, or Limited Rights shall be granted to an officer of the Company except (i) by the Board, or (ii) by the Administrator when the Administrator is composed solely of three or more directors, or is composed of three or more persons having full authority to act in the matter and each member of the Administrator is a disinterested person. "Disinterested person," for this purpose, shall have the same meaning as in Rule 16b-3 or any successor ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper. Subject to the provisions of this Plan, the Administrator shall have the authority to select the persons to receive Options, SARs, or Limited Rights under this Plan, to fix the number of shares that each optionee may purchase or that are subject to a SAR or Limited Right, to set the terms and conditions of each Option (including whether each Option should be a NQO or an ISO), SAR, and Limited Right, and to determine all other matters relating to this Plan. No member of the Administrator shall be liable for any act or omission on such member's own part, including but not limited to the exercise of any power or discretion given to such member under this Plan, except for those acts or omissions resulting from such member's own gross negligence or willful misconduct. All questions of interpretation, implementation, and application of this Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons. 5. GRANTING OF RIGHTS 5.1 TEN YEAR LIMITATION. No Options, SARs, or Limited Rights shall be granted under this Plan after ten years from the date of adoption of this Plan by the Board of Directors. 5.2 WRITTEN AGREEMENT; EFFECT. Each Option, SAR, or Limited Right shall be evidenced by a written agreement, in form satisfactory to the Company, executed by the Company and the person to whom such Option, SAR, or Limited Right is granted. If the agreement relates to an ISO or NQO, the agreement shall specify whether each option it evidences is a NQO or an ISO. SARs or Limited Rights may be included in the stock option agreement or may be evidenced by a separate written agreement satisfactory to the Company, executed by the Company and the person to whom such SAR or Limited Right is granted. Failure of the grantee to execute an agreement shall not void or invalidate the grant of an Option, SAR, or Limited Right; the Option, SAR or Limited Right maybe not be exercised, however, until the agreement is executed. 5.3 ANNUAL $100,000 LIMITATION. In no event shall an ISO be granted prior to January 1, 1987 pursuant to the Plan which would cause the grantee to be in receipt during any calendar year of ISOs covering Common Stock of the Company having an aggregate fair market value, determined for each Option as of the grant date, in excess of $100,000 (plus any unused limit carryover to such year as permitted by applicable provisions of the Code, currently set forth in Section 422A(d)(4) of the Code). The rule set forth in the preceding sentence shall not apply to ISOs granted on or after January 1, 1987 pursuant to the Plan ("Post-86 ISO"); the aggregate fair market value (determined at the time a Post-86 ISO is granted) of the stock with respect to which all Post-86 ISOs become exercisable for the first time by the optionee ("vest") during any calendar year (under all incentive stock option plans of the Company and its affiliates) shall not exceed $100,000. In applying the preceding sentence, Post-86 ISOs having the lowest exercise price shall vest before Post-ISOs with higher exercise prices, regardless of the grant date, unless the option agreements, or the Administrator, specifically provide a different order of vesting. 5.4 ADVANCE APPROVALS. The Administrator may approve the grant of Options, SARs, or Limited Rights under this Plan to persons who are expected to become employees of the Company, but are not employees at the date of approval. In such cases, the Option, SAR, or Limited Right shall be deemed granted (and the exercise price determined with reference to the fair market value of the underlying stock), without further approval, on the date the grantee becomes an employee and must satisfy all requirements of this Plan for Options, SARs or Limited Rights granted on that date. 6. TERMS AND CONDITIONS OF OPTIONS Each Option shall be designated as an ISO or a NQO and shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall be also subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2. 6.1 TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT. All Options shall be subject to the following terms and conditions: 6.1.1 CHANGES IN CAPITAL STRUCTURE. Subject to Section 6.1.2, if the stock of the Company is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, or converted into or exchanged for other securities as a result of a merger, consolidation or reorganization, appropriate adjustments shall be made in (A) the number and class of shares of stock subject to this Plan and each Option outstanding under this Plan, and (B) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustment. Each such adjustment shall be determined by the Administrator in its sole discretion, which determination shall be final and binding on all persons. 6.1.2 CORPORATE TRANSACTIONS. New option rights may be substituted for the Options granted under this Plan, or the Company's obligations as to Options outstanding under this Plan may be assumed, by an employer corporation other than the Company, or by a parent or subsidiary of such employer corporation, in connection with any merger, consolidation, acquisition, separation, reorganization, liquidation or like occurrence in which the Company is involved, in such manner that the then outstanding Options which are ISOs will continue to be "incentive stock options" within the meaning of Section 422A of the Code to the full extent permitted thereby. Notwithstanding the foregoing or the provisions of Section 6.1.1, if such employer corporation, or parent or subsidiary of such employer corporation, does not substitute new option rights for, and substantially equivalent to, the Options granted hereunder, or assume the Options granted hereunder, or if the Board determines, in its sole discretion, that Options outstanding under this Plan should not then continue to be outstanding, the Options granted hereunder shall terminate (A) upon dissolution or liquidation of the Company, or similar occurrence, or (B) upon any merger, consolidation, acquisition, separation, or similar occurrence, where the Company will not in economic substance be the surviving corporation; provided, however, that each optionee shall be mailed notice at least 15 days prior to such dissolution, liquidation, merger, consolidation, acquisition, separation, or similar occurrence, and shall have at least 10 days after the mailing of such notice to exercise any unexpired option rights granted hereunder to the extent such Options are then exercisable. 6.1.3 TIME OF OPTION EXERCISE. Subject to Section 6.3.3, Options shall be immediately exercisable, and shall be exercisable in whole or in part. 6.1.4 OPTION GRANT DATE. Except in the case of advance approvals described in Section 5.4, the date of grant of an Option under this Plan shall be the date as of which the Administrator approves the grant. 6.1.5 NONASSIGNABILITY OF OPTION RIGHTS. No Option shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be exercisable only by the optionee or the optionee's guardian or legal representative in the event of disability of the optionee. 6.1.6 PAYMENT. Except as provided below, payment in full, in cash, shall be made for all stock purchased at the time written notice of exercise of an Option is given to the Company, and proceeds of any payment shall constitute general funds of the Company. At the time an Option is granted or exercised the Administrator, in the exercise of its absolute discretion, may authorize any one or more of the following additional methods of payment: (A) Acceptance of the optionee's full recourse promissory note for the aggregate exercise price of the shares as to which the Option is being exercised, payable on such terms and bearing such interest rate as determined by the Administrator, which promissory note may be either secured or unsecured in such manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the Company); (B) Delivery by the optionee of Common Stock already owned by the optionee for all or part of the aggregate exercise price of the shares as to which the Option is being exercised, provided the value (determined as set forth in Section 6.3.1) of such Common Stock is equal on the date of exercise to the aggregate exercise price of the shares as to which the Option is being exercised, or such portion thereof as the optionee is authorized to pay by delivery of such stock; provided, however, that if an optionee has exercised any portion of any Option granted by the Company by delivery of Common Stock, the optionee may not, within six months following such exercise, exercise any Option granted under this Plan by delivery of Common Stock; and (C) Any other property other than cash, so long as such property constitutes valid consideration under applicable law for the shares as to which the Option is being exercised and is surrendered in good form for transfer. 6.1.7 TERMINATION OF EMPLOYMENT. Option rights granted to an optionee under this Plan, to the extent such rights have not then expired or been exercised, shall terminate (i) three months, in the case of an optionee who immediately prior to Employment Termination is not an officer or director of the Company and with respect to an ISO granted to any optionee, and (ii) seven months, in the case of an optionee who immediately prior to Employment Termination is an officer or director of the Company with respect to any NQO granted to any such optionee, after the optionee ceases, for any reason and with or without cause, to be an employee of the Company or any Affiliate of the Company (in either case, "Employment Termination"), and shall not be exercisable on or after said date, except that if the Employment Termination is due to the disability or death of the optionee, the optionee, or the optionee's personal representative or any other person who acquires the option rights from the optionee by will or the applicable laws of descent and distribution, may within twelve months after the Employment Termination, exercise the rights to the extent they were exercisable on the date of the Employment Termination. A transfer of an optionee from the Company to BF Enterprises, Inc. ("BFE") shall not be deemed an Employment Termination, but rather an Employment Termination with respect to such optionee shall be deemed for all purposes under this Plan to occur upon termination, for any reason and with or without cause, of such optionee's employment with BFE or any Affiliate of BFE; and the options held by such optionee shall expire in accordance with this Section three months after such Employment Termination, unless at the time thereof such Optionee is an officer or director of the Company, in which case such options shall expire seven months after such Employment Termination; and provided, further that an Employment Termination shall not be deemed to occur with respect to such optionee if, in the determination of the Board of Directors, it shall be in the best interests of the Company to have such optionee's employment be deemed to continue for so long as such optionee remains an officer, director or consultant of BFE. 6.1.8 REPURCHASE OF STOCK. At the option of the Administrator, the stock to be delivered pursuant to the exercise of any Option may be subject to a right of repurchase in favor of the Company with respect to any employee whose employment with the Company is terminated. Such right of repurchase shall be at the Option exercise price and shall expire at such times as may be set by the Administrator in the exercise of the Administrator's discretion, which times may include a Change in Control as defined in Section 8.1. Unless otherwise established by the Administrator with respect to any individual or group, the right of repurchase shall expire with respect to 20% of the shares subject to the Option on the grant date (which date shall constitute the "Vesting Base Date" unless the Administrator otherwise determines) and with respect to an additional 20% of such shares on each of the four anniversary dates next following the grant date. The Company may, at any time before or following acquisition of shares by such employee pursuant to the Plan, waive in whole or in part the Company's right of repurchase as set forth in the stock purchase agreement executed by an employee with respect to shares acquired by such employee. 6.1.9 WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of an Option (or, as the case may be, a SAR or a Limited Right), the optionee shall remit to the Company in cash all applicable federal, state and local withholding and employment taxes. (a) The Administrator may, in the exercise of the Administrator's sole discretion, permit an optionee to pay some or all of such taxes by means of a promissory note on such terms as the Administrator deems appropriate. (b) If and to the extent authorized by the Administrator in its sole discretion, an optionee may make an election, by means of a form of election to be prescribed by the Administrator, to have shares of Common Stock which are acquired upon exercise of the Option withheld by the Company or to tender other shares of Common Stock or other securities of the Company owned by the optionee to the Company at the time the amount of such taxes is determined to pay the amount of such tax obligations. 6.1.10 OTHER PROVISIONS. Each Option may contain such other terms, provisions, and conditions not inconsistent with this Plan as may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the option as an "incentive stock option" within the meaning of Section 422A of the Code. 6.2 TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT. Options are granted under this Plan which are designated as NQOs shall be subject to the following terms and conditions: 6.2.1 EXERCISE PRICE. The exercise price of a NQO shall be determined by the Administrator, but shall not be less than 85% of the Fair Market Value per share on the day of the grant. 6.2.2 OPTION TERM. Each NQO granted under this Plan shall expire ten years and two days from the date of its grant or such earlier date as may be set by the Administrator on the date of its grant. 6.2.3 WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of an NQO, the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. The Administrator may, in the exercise of the Administrator's discretion, permit an optionee to pay some or all of such taxes by means of a promissory note on such terms as the Administrator deems appropriate. 6.3 TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions: 6.3.1 EXERCISE PRICE. The exercise price of an ISO, which shall be approved by the Board of Directors, shall be determined in accordance with the applicable provisions of the Code and shall in no event be less than the fair market value (determined as described in this Section 6.3.1) of the stock covered by the ISO at the time the ISO is granted, except that the exercise price of an ISO granted to any person who owns, directly or indirectly, (or is treated as owning by reason of attribution rules, currently set forth in Code Section 425) stock of the Company constituting more than ten percent of the total combined voting power of the Company's outstanding stock, or the stock of any Affiliate of the Company, shall in no event be less than 110 percent of such fair market value. For purposes of the Plan, the fair market value of Common Stock shall be determined as follows: (a) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), its fair market value shall be the closing sales price or the mean between the high bid and low asked prices if no sales were reported, as quoted on such system or exchange (or the largest such exchange) for the date the value is to be determined (or if there are no sales or bid and asked price quotations for such date, then for the last preceding business day on which there were sales or bid and asked price quotations), as reported in THE WALL STREET JOURNAL or similar publication. (b) If the Common Stock is regularly quoted by a recognized securities dealer, its fair market value shall be (i) the mean between the closing high bid and low asked quotations for the stock on the date the value is to be determined (or if there are no quoted prices for such date, then for the last preceding business day on which there were quoted prices) as quoted on NASDAQ or any similar system of automated dissemination of quotations of securities prices then in common use, as reported in THE WALL STREET JOURNAL or similar publication, or (ii) if not quoted as described in clause (i), the mean between the high bid and low asked quotations for the stock as reported by the National Quotation Bureau Incorporated if at least two securities dealers have inserted both bid and asked quotations for the security on at least five trading days of the 20 trading days preceding the date the value is to be determined; provided, however, that if the stock is quoted on a national securities or central market system, in lieu of a market or quotation system described above, the fair market value shall be determined in the manner set forth in clause (i) if bid and asked quotations are reported but actual transactions are not, and in the manner set forth in paragraph (a) if actual transactions are reported. (c) In the absence of an established market for the Common Stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company's net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company, the economic outlook in the Company's industry, the Company's position in the industry and its management, and the values of stock of other corporations in the same or similar line of business. 6.3.2 EXPIRATION. Unless an earlier expiration date is specified by the Administrator at the time of grant, each ISO granted under this Plan shall expire ten years from the date of its grant, except that an ISO granted to any person who owns, directly or indirectly, (or is treated as owning by reason of applicable attribution rules, currently set forth in Code Section 425) stock of the Company constituting more than ten percent of the total combined voting power of the Company's outstanding stock, or the stock of any Affiliate of the Company, shall expire five years from the date of its grant. 6.3.3 EXERCISE OF AN INCENTIVE STOCK OPTION BY AN OPTIONEE WHO HOLDS ANOTHER INCENTIVE STOCK OPTION. An ISO granted prior to January 1, 1987 under the Plan shall not be exercisable while the optionee holds a previously granted incentive stock option to purchase stock in the Company, a parent or subsidiary corporation of the Company, or a corporation which is a predecessor of any of the foregoing, for such purposes, an ISO shall be treated as outstanding until such option is exercised in full or expires by reason of lapse of time, within the meaning of Section 422A(c)(7) of the Code. Post-1986 ISOs shall not be subject to the limitation imposed by the preceding sentence. 6.3.4 DISQUALIFYING DISPOSITIONS. If stock acquired by exercise of an ISO granted pursuant to this Plan is disposed of within two years from the date of grant to the ISO or within one year after the transfer of the stock to the optionee, the holder of the stock immediately prior to the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the disposition as the Company may require. Such holder shall pay to the Company any withholding and employment taxes which the Company in its sole discretion deems applicable to such disposition. Any disposition not in accordance with this Section 6.3.4 shall be void and of no effect. The Company may instruct its stock transfer agent by appropriate means, including placement of legends or stock certificates, not to transfer stock acquired by exercise of an ISO unless it has been advised by the Company that the requirements of this Section 6.3.4 have been satisfied. 6.3.5 WITHHOLDING AND EMPLOYMENT TAXES. At such time or times as the Administrator determines, at or following the time of exercise of an ISO, the optionee shall remit to the Company in cash all federal and state withholding and employment taxes which the Administrator in its sole discretion deems applicable to the exercise of an ISO or the disposition of shares acquired by such exercise. The Administrator may, in the exercise of the Administrator's sole discretion, permit an optionee to pay some or all of such taxes by means of a promissory note on such terms as the Administrator deems appropriate. 7. MANNER OF EXERCISE An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the Secretary of the Company, accompanied by an executed stock purchase agreement in form and substance satisfactory to the Company and by payment of the exercise price as provided in Section 6.1.6. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price will be considered as the date such Option was exercised. Promptly after receipt of written notice of exercise of an option, the Company shall, without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the optionee or such other person a certificate or certificates for the requisite number of shares of stock. An optionee or transferee of an Option shall not have any privileges as shareholder with respect to any stock covered by the Option until the date of issuance of the stock certificate. 8. DEFINITIONS RELATING TO SARs AND LIMITED RIGHTS For purposes of this Plan, the following items shall have the following meanings. 8.1 CHANGE IN CONTROL. The term "Change in Control" shall mean any of the following events: (a) the Company is provided a copy of a Schedule 13D filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") indicating that any person or group (as such terms are defined in Section 13(d)(3) of the Exchange Act) that does not on the date of this Plan is adopted by the Board hold more than five percent of the outstanding shares of the Company entitled to vote for the election of directors has become the holder of more than 40 percent of the outstanding shares of the Company entitled to vote for the election of directors; (b) 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 to constitute a majority of the Board; (c) 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; (d) 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 Common 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; or (e) an Offer is made. 8.2 FMV PER SHARE. The term "FMV per Share" shall mean, for the day or period with respect to which the FMV per share is being determined, the fair market value of the Common Stock determined in accordance with the provisions of Section 6.3.1. 8.3 LIMITED RIGHT HOLDER. The term "Limited Right Holder" shall mean a person to whom a Limited Right is granted pursuant to the Plan. 8.4 LIMITED RIGHT SPREAD. The term "Limited Right Spread" shall mean an amount (rounded to the nearest whole dollar) equal to the product computed by multiplying (a) the excess of (i) the greater of the highest FMV per Share on any day during the 60 day period prior to the date of exercise of the Limited Right and the highest price per Share of Common Stock paid or proposed to be paid in connection with any Change in Control over (ii) the exercise price per share of Common Stock at which the Related Right is exercisable, or in the case of a Limited Right granted without reference to a Related Right, such other price as the Administrator establishes at the time the Limited Right is granted, by (b) the number of shares of Common Stock with respect to which a Limited Right is being exercised. If the consideration paid or proposed to be paid for Common Stock in connection with a Change in Control shall consist, in whole or in part, of consideration other than cash, the Administrator shall take such action, as in its judgment it deems appropriate, to establish the cash value of such consideration, but such valuation shall not be less than the value, if any, attributed to such consideration by any other party to the transaction constituting the Change in Control. 8.5 OFFER. The term "Offer" shall mean a tender offer or exchange offer for shares of the Company's Common Stock other than one made by the Company or by a person or group, as such terms are defined in Section 13(d)(3) of the Exchange Act, that on the date this Plan is adopted by the Board holds more than five percent of the outstanding shares of the Company entitled to vote for the election of directors where the offeror acquires more than 40 percent of the outstanding shares of Common Stock. 8.6 RELATED RIGHT. The term "Related Right" shall mean an option with respect to which a SAR or Limited Right is granted. 8.7 SAR HOLDER. The term "SAR Holder" shall mean a person holding an option to acquire shares of Common Stock to whom a SAR is granted pursuant to this Plan. 8.8 SAR SPREAD. The term "SAR Spread" shall mean an amount (rounded to the nearest whole dollar) equal to the product computed by multiplying (a) the excess of (i) if the SAR may only be exercised during the Window Period under Section 9.5 below, then the highest FMV per Share on any day during the Window Period, and if exercise of the SAR is not so limited under Section 9.5 below, then the FMV per Share on the date the SAR is exercised, over (ii) the exercise price per share of common stock at which the Related Right is exercisable, or in the case of a SAR granted without reference to a Related Right, such other price as the Administrator establishes at the time the SAR is granted, by (b) the number of shares of Common Stock with respect to which a SAR is being exercised. 8.9 WINDOW PERIOD. The term "Window Period" shall mean the periods specified in Rule 16b-3(e)(3)(iii), or any successor rule, within which a SAR must be exercised in order to be exempt from the operation of Section 16(b) of the Exchange Act by virtue of paragraph (e) of Rule 16b-3 or any successor provision. This period is, as of the date of this Plan, between the third and twelfth business days following release by the Company of quarterly or annual summary statements of sales and earnings. 9. STOCK APPRECIATION RIGHTS 9.1 GRANT OF SAR. The Administrator may, in the exercise of the Administrator's discretion, grant SARs to eligible employees. A SAR may be granted either (i) with respect to shares of Common Stock subject to a Related Right held by the SAR Holder, whether or not the Related Right is an Option granted pursuant to this Plan, or (ii) without reference to any Related Right. If a Related Right is an ISO, a SAR granted with respect to such Related Right may be granted only at the time of grant of the related ISO, but if the Related Right is a non-qualified option, the SAR may be granted either simultaneously with the grant of the related non-qualified option, or may be granted at any time during the term of such related non-qualified option, whether or not the option is a NQO granted pursuant to this Plan, or a previously or subsequently granted non-qualified option not granted pursuant to this Plan, and whether or not the option is granted pursuant to a "plan" within the meaning of Rule 16b-3. Notwithstanding any other provision of the Plan, the Administrator shall have sole discretion to specify a maximum limitation on the amount of the SAR Spread, to determine the time at which any SAR otherwise exercisable may be exercised, to determine whether upon exercise of a SAR the SAR Holder may receive cash or stock as provided in Section 9.8 and 9.9 below or may elect to receive either cash or stock, to establish a price other than the exercise price of shares subject to a Related Right as a basis for determining the amount of the SAR Spread, and to grant any SAR subject to such additional terms and conditions as are consistent with the provisions of this Plan. 9.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event described in Section 6.1.1, an adjustment is made to a Related Right held by a SAR Holder, then the number of shares covered by the SAR shall also be adjusted accordingly. 9.3 CORPORATE TRANSACTIONS. New SARs may be substituted for the SARs granted under this Plan, or the Company's obligations as to options outstanding under this Plan may be assumed, by an employer corporation other than the Company, or by a parent or subsidiary of such employer corporation, in connection with any merger, consolidation, acquisition, separation, reorganization, liquidation or like occurrence in which the Company is involved. Notwithstanding the foregoing or the provisions of Section 9.2, if such employer corporation, or parent or subsidiary of such employer corporation, does not substitute new SARs for, and substantially equivalent to, the SARs granted hereunder, or assume the SARs granted hereunder, or if the Board determines, in its sole discretion, that SARs outstanding under this Plan should not then continue to be outstanding, the SARs granted hereunder shall terminate (A) upon dissolution or liquidation of the Company, or similar occurrence, or (B) upon any merger, consolidation, acquisition, separation, or similar occurrence, where the Company, will not in economic substance be the surviving corporation; provided, however, that each SAR Holder shall be mailed notice at least 15 days prior to such dissolution, liquidation, merger, consolidation, acquisition, separation, or similar occurrence, and shall have at least 10 days after the mailing of such notice to exercise any unexpired SARs granted hereunder to the extent such SARs are then exercisable. 9.4 SAR GRANT DATE. Except in the case of advance approvals described in Section 5.4, the date of grant of a SAR under this Plan shall be the date as of which the Administrator approves the grant. 9.5 TIME OF SAR EXERCISE. A SAR shall generally be immediately exercisable and shall be exercisable in whole or in part. Any election by a SAR Holder to receive cash in full or partial settlement of a SAR, as well as any exercise by the SAR Holder of a SAR for such cash, shall be made only during the Window Period. Where a SAR is granted with respect to a Related Right, unless written agreement pursuant to which the SAR is granted otherwise provides, the SAR may be exercised only to the extent to which shares covered by the Related Right are not at the time of exercise subject to a right of repurchase as described in Section 6.1.9. A SAR may not be exercised under any circumstances until the expiration of six months following the date of grant of the SAR, except in the event of the death or permanent disability of the SAR Holder. 9.6 EFFECT ON RELATED RIGHT; TERMINATION OF SAR. If a SAR granted with respect to a Related Right is exercised, the Related Right shall cease to be exercisable and shall be cancelled to the extent of the number of shares with respect to which the SAR was exercised. The Company and the SAR Holder shall take such actions and execute such documents as may be necessary or appropriate to reflect such cancellation. Upon the exercise or termination of a Related Right, SARs granted with respect thereto shall terminate to the extent of the number of shares as to which the Related Right was exercised or terminated. Upon the death or permanent disability of the SAR Holder, the SAR shall be exercisable only by the SAR Holder's personal representative or any other person who acquires the SAR Holder's right by will or the applicable laws of descent and distribution and, in the case of a SAR granted with respect to a Related Right, only to the extent to which the Related Right is then exercisable. 9.7 NONASSIGNABILITY OF SARS. No SAR granted under this Plan shall be assignable or otherwise transferable by the SAR Holder except by will or by the laws of descent and distribution. During the life of the SAR Holder, a SAR shall be exercisable only by the SAR Holder or the SAR Holder's guardian or legal representative. 9.8 MANNER OF EXERCISE; ELECTION TO RECEIVE CASH OR STOCK. A SAR Holder wishing to exercise a SAR shall (i) give written notice to the Company at its principal executive office, to the attention of the Secretary of the Company, specifying the number of shares of Common Stock with respect to which the SAR Holder is exercising the SAR and if under the terms of the SAR the SAR Holder may elect to receive either cash, stock, or a combination of cash and stock upon exercise of the SAR, stating the manner in which the SAR Holder has elected to receive payment upon exercise; (ii) deliver to the Company such written representations, warranties, and covenants as the Company may reasonably require; and (iii) if so requested by the Company, deliver to the Secretary of the Company any written agreement that the Company may reasonably require relating to the SAR being exercised or pertaining to the Related Right. The date the Company receives all of the instruments referred to in the preceding sentence shall be considered as the date upon which the SAR was exercised. A SAR Holder who receives stock upon exercise of a SAR shall not have any privileges as a stockholder with respect to any such shares of stock until the date of issuance of a stock certificate. 9.9 EXERCISE OF SARS; MARKET PRICE. Upon the exercise of a SAR, the SAR Holder shall be entitled to receive one of the following kinds of payments: (a) that number of whole shares of Common Stock equal to the number computed by dividing the SAR Spread by the highest FMV per Share during the Window Period in which the SAR was exercised and an amount of cash equal to the highest FMV per Share during the Window Period in which the SAR was exercised multiplied by the fraction (if any) of a share of Common Stock not so issued (such payment to be in lieu of issuance of fractional shares); or (b) an amount in cash equal to the SAR Spread; or (c) a combination of cash and whole shares of Common Stock (the combined value of which, however, shall not exceed the SAR Spread) in the respective amounts specified in the SAR Holder's notice of exercise. Notwithstanding any other provision of this Section 9, if the terms of a SAR entitle the SAR Holder to elect upon exercise of the SAR whether to receive cash in full or partial settlement of the SAR, then the Administrator shall have sole discretion to consent to or disapprove such election ("Cash Election"). Such consent or disapproval may be given at any time after the Cash Election to which it relates. If the Administrator shall disapprove a Cash Election, the exercise of the SAR with respect to which the Cash Election was made shall be of no effect but shall be without prejudice to the right of the SAR Holder to exercise the SAR in the future in accordance with its terms. The Administrator shall have no such discretion with respect to the exercise of a Limited Right pursuant to Section 10 of the Plan. 9.10 Withholding and Employment Taxes. At the time of exercise of a SAR, the SAR Holder shall remit to the Company in cash all applicable federal, state and local withholding and employment taxes, and the Administrator may, in its sole discretion, reduce the amount paid to a SAR Holder upon exercise of the SAR by such amount. The Administrator may, in the exercise of its sole discretion, permit a SAR Holder to pay some or all of such taxes (i) by means of a promissory note on such terms as the Administrator deems appropriate; or (ii) in accordance with the applicable provision of Section 6.1.9. 10. LIMITED RIGHTS 10.1 GRANT OF LIMITED RIGHT. The Administrator may, in the exercise of the Administrator's discretion, grant Limited Rights to eligible employees. A Limited Right may be granted with respect to shares of Common Stock subject to a Related Right held by the Limited Right Holder, whether or not the Related Right is an Option granted pursuant to this Plan, or may be granted without reference to any Related Right. If a Related Right is an ISO, a Limited Right granted with respect to such Related Right may be granted only at the time of grant of the related ISO, but if the Related Right is a non-qualified option, the Limited Right may be granted either simultaneously with the grant of the related non-qualified option, or at any time during the term of such related non-qualified option, whether or not the option is a NQO granted pursuant to this Plan or a previously or subsequently granted non-qualified option not granted pursuant to this Plan, and whether or not the option is granted pursuant to a "plan" within the meaning of Rule 16b-3. The Administrator shall have sole discretion to grant any Limited Right subject to such additional terms and conditions as are consistent with the provisions of this Plan. 10.2 CHANGES IN CAPITAL STRUCTURE. If, by virtue of any event described in Section 6.1.1, an adjustment is made to a Related Right held by a Limited Right Holder, then the number of shares covered by the Limited Right covering the Related Right shall also be adjusted accordingly. 10.3 TIME OF LIMITED RIGHT EXERCISE. Each outstanding Limited Right shall become immediately exercisable only upon the occurrence of a Change in Control, unless the Change in Control is approved by the Board as provided in Section 10.4 below, whether or not the then-outstanding Related Right, if any, is then exercisable. The Company shall promptly notify each Limited Right Holder of the occurrence of any Change in Control. Limited Rights may not be exercised under any circumstances until the expiration of six months following the date of grant of the Limited Right. In the event of the occurrence of any of the events specified in clauses (a) through (d) of Section 8.1 above, each outstanding Limited Right will be exercisable for a period of 60 days following the date of occurrence of such event, and in the event of an Offer, each outstanding Limited Right will be exercisable for a 60 day period following the date of expiration of the Offer; provided, however, that if the event constituting the Change in Control occurs prior to the expiration of six months from the date of grant of a Limited Right, then such Limited Right shall be exercisable for a period of 60 days following expiration of such six month period. Where a Limited Right is granted with respect to a Related Right, unless the written agreement pursuant to which the Limited Right is granted otherwise provides, the Limited Right may be exercised only to the extent to which shares covered by the Related Right are not at the time of exercise subject to a right of repurchase as described in Section 6.1.8. A Limited Right shall remain exercisable during the exercise periods described above in this Section 10.3 in the event of an Employment Termination of the Limited Right Holder after a Change in Control during such exercise period. Notwithstanding the above, upon an Employment Termination of the Limited Right Holder before the occurrence of any Change in Control, the Limited Right shall expire immediately. Upon the death or permanent disability of the Limited Right Holder, the Limited Right shall be exercisable only by the Limited Right Holder's personal representative or any other person who acquires the Limited Right Holder's right by will or the applicable laws of descent and distribution. 10.4 LIMITATIONS ON RIGHT TO EXERCISE LIMITED RIGHTS. Notwithstanding Section 10.3, no Limited Right shall be exercisable with respect to an event constituting a Change in Control under Section 8.1 (b) through (e) in the event the Board approves such event prior to the occurrence of such event, and no Limited Right shall be exercisable with respect to an event constituting a Change in Control under Section 8.1 (a) if the Board approves such event prior to such time following such event as the persons who were directors just prior to such event cease to constitute a majority of the Board. 10.5 EFFECT ON RELATED RIGHT; TERMINATION OF LIMITED RIGHT. If a Limited Right granted with respect to a Related Right is exercised, the Related Right shall cease to be exercisable and shall be cancelled to the extent of the number of shares with respect to which the Limited Right was exercised. The Company and the Limited Right Holder shall take such actions and execute such documents as may be necessary or appropriate to reflect such cancellation. Upon the exercise or termination of a Related Right, Limited Rights granted with respect thereto shall terminate to the extent of the number of shares as to which the Related Right was exercised or terminated. 10.6 NONASSIGNABILITY OF LIMITED RIGHTS. No Limited Right granted under this Plan shall be assignable or otherwise transferable by the Limited Right Holder except by will or by the laws of descent and distribution. During the life of the Limited Right Holder, a Limited Right shall be exercisable only by the Limited Right Holder or the Limited Right Holder's guardian or legal representative. 10.7 EXERCISE OF LIMITED RIGHTS; PAYMENT, MARKET PRICE. Upon the exercise of a Limited Right, the Company shall pay to the Limited Right Holder an amount in cash representing the Limited Right Spread. 10.8 WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of a Limited Right, the Limited Right Holder shall remit to the Company in cash all applicable federal, state and local withholding and employment taxes, and the Administrator may, in its sole discretion, reduce the amount paid to a Limited Right Holder upon exercise of the Limited Right by such amount. The Administrator may, in the exercise of its sole discretion, permit an optionee to pay some or all of such taxes (i) by means of a promissory note on such terms as the Administrator deems appropriate; or (ii) in accordance with the applicable provisions of Section 6.1.9. 11. EMPLOYMENT RELATIONSHIP Nothing in this Plan or any option granted hereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate any optionee's employment or status as a director at any time, nor confer upon any optionee any right to continue in the employ of, or as a director of, the Company or any of its Affiliates. 12. EXISTING OPTIONS TO BE GOVERNED BY PLAN At the option of the Administrator, any unexercised outstanding option granted by the Company prior to the date of this Plan to any employee or director to acquire shares of Common Stock may be deemed granted pursuant to this Plan, and any transactions with respect to such option occurring after the date this Plan is approved by the Board may be deemed to occur pursuant to this Plan and be governed by the provisions of this Plan. At the option of the Administrator, the date of grant of any such option may be the date as of which the optionee first received the right to acquire the Common Stock subject to the option, and the exercise price may be the exercise price specified on the date of grant. The optionee and the Company shall execute such documents and take such actions as may be necessary to implement the provisions of this Section. 13. AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN The Board or the Administrator may at any time amend, alter, suspend, or discontinue this Plan, except to the extent that stockholder approval is required by applicable law or Rule 16b-3; provided, however, no amendment, alteration, suspension, or discontinuation shall be made that would impair the rights of any grantee under any option, SAR, or Limited Right theretofore granted, without the grantee's consent. The Board shall have the power to make such changes in this Plan and in the regulations and administrative provisions hereunder or in any outstanding option, SAR, or Limited Right as in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any option granted pursuant to this Plan to qualify as an incentive stock option under Section 422A of the Code, subject in all events to the consent of the holder of such Option. 14. INDEMNIFICATION OF ADMINISTRATOR The Company shall indemnify each present and future member of the group constituting the Administrator against, and each member of the group constituting the Administrator shall be entitled without further act on his part to indemnify from the Company for all expenses (including the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs and litigation, other than amounts paid to the Company itself) reasonably incurred by such person in connection with or arising out of any action, suit, or proceeding to the full extent permitted by the laws of the State of Delaware and by the Bylaws of the Company. 15. EFFECTIVE DATE OF THIS PLAN This Plan shall become effective upon adoption by the Board; provided, however, that if this Plan is not approved within 12 months after its adoption by the Board, by unanimous written consent of the stockholders of the Company or by the stockholders of the Company voting at a validly called stockholders meeting by a majority (or such greater number as may be required by law or applicable governmental regulations or orders) of the shares entitled to vote, then any options exercised pursuant to this Plan shall constitute NQOs and not ISOs, regardless of their status on the date of grant. Options, SARs, and Limited Rights may be granted and exercised under this Plan only after there has been compliance with all applicable federal and state securities laws. EX-10.2 3 EXHIBIT 10.2 EXHIBIT 10.2 ROBERT HALF INTERNATIONAL INC. STOCKPLUS PLAN (AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997) 1. PURPOSES. The principal purposes of the Robert Half International Inc. StockPlus Plan (the "Plan") are: (a) to improve individual employee performance by providing long-term incentives and rewards to employees of the Company, (b) to assist the Company in attracting, retaining and motivating employees with experience and ability, and (c) to associate the interests of such employees with those of RHII's shareholders. 2. DEFINITIONS. Unless the context clearly indicates otherwise, the following terms, when used in this Plan, shall have the meanings set forth below: (a) "COMMON STOCK" or "STOCK" means RHII Common Stock, par value $.001 per share. (b) "ADMINISTRATOR" means the Board of Directors of RHII or a committee of the Board, the composition and the size of which shall cause such committee to satisfy the requirements of Rule 16b-3 of the Exchange Act with respect to officers and directors. (c) "COMPANY" means Robert Half International Inc., its divisions and direct and indirect subsidiaries. (d) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (e) "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. (f) "GRANT DATE" means the date an Option is granted under the Plan. (g) "OPTION" or "STOCK OPTION" means a right granted under the Plan to an Optionee to purchase shares of RHII Common Stock at a fixed price for a specified period of time. (h) "OPTION PRICE" means the price at which a share of Common Stock covered by an Option granted hereunder may be purchased. (i) "OPTIONEE" means an eligible employee of the Company who has received a Stock Option granted under the Plan. (j) "RHII" means Robert Half International Inc., a Delaware corporation. 3. 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 to be granted Options 1 under the Plan, determine the size and applicable terms and conditions of grants to be made to such employees, determine the time when Options will be granted and authorize grants to eligible employees. Any guidelines that may be adopted from time to time by the Administrator shall be advisory only and shall not be binding upon the Administrator. 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 Options granted 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. 4. STOCK AVAILABLE FOR OPTIONS. The shares that may be delivered or purchased under the Plan shall not exceed an aggregate of 5,685,000 shares of Common Stock, subject to any adjustments which may be made pursuant to Section 11 hereof. Shares of Stock used for purposes of the Plan may be either shares of authorized but unissued Common Stock or treasury shares or both. Stock covered by Options which have terminated or expired prior to exercise or have been surrendered or cancelled shall be available for further option hereunder. 5. ELIGIBILITY. All those employees of the Company as shall be determined from time to time by the Administrator shall be eligible to participate in the Plan, provided, however, that no employee may be granted Options in the aggregate which would result in that employee receiving more than 10% of the maximum number of shares available for issuance under the Plan. However, no individual who is subject to Section 16 of the Exchange Act with respect to transactions in the Company's securities may be granted an option subsequent to November 1, 1995. 6. TERMS AND CONDITIONS OF 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 DATES. Options granted hereunder shall have a term of no longer than ten years from the Grant Date. No Option may be granted after the tenth anniversary of the date of adoption of this Plan. A grant of Options may become exercisable in installments; provided, however, that no Option shall become exercisable until six months following the Grant Date of such Option. However, Stock Options must be exercised for full shares of Common Stock. To the extent that Stock Options are not exercised when they become initially exercisable, they shall be carried forward and be exercisable until the expiration of the term of such Stock Options, subject to the provisions of Section 6(e) hereof. An option granted after November 1, 1995, to an eligible employee pursuant to this Plan shall automatically expire if, within six months after its grant, the recipient of such option becomes subject to Section 16 of the Exchange Act with respect to transactions in the Company's securities. (c) EXERCISE OF OPTION. To exercise an Option, the holder thereof shall give notice of his or her 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 effecting such exercises. No fractional shares shall be issued as a result of exercising an Option. An Option is exercisable during an Optionee's lifetime only by the Optionee or Optionee's guardian or legal representative. (d) 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 Optionee 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. 2 In addition, in order to enable the Company to meet any applicable foreign, federal (including FICA), state and local withholding tax requirements, an Optionee shall also be required to pay the amount of tax to be withheld. No share of stock will be delivered to any Optionee until all such amounts have been paid. In the event that withholding taxes are not paid within the specified time period, 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 reducing the number of shares of stock deliverable or by offsetting such withholding taxes against amounts otherwise due from the Company to the Optionee. If withholding taxes are paid by reduction of the number of shares deliverable to Optionee, such shares shall be valued at the Fair Market Value as of the date of exercise. (e) EFFECT OF TERMINATION OF EMPLOYMENT. All Options then held by the Optionee which are exercisable at the date of termination shall continue to be exercisable by the Optionee, or, if applicable, Optionee's estate, until the earlier of 30 days after such date or the expiration of such Options in accordance with their terms. All Options which are not exercisable at such date shall automatically terminate and lapse, unless the Administrator shall determine otherwise. Notwithstanding the foregoing, if exercise of an Option during the 30-day period described in the previous sentence would subject the Optionee 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 Optionee prior to termination. (f) MISCONDUCT. In the event that the Administrator determines in good faith that an Optionee has (i) used for profit, or materially harmed the Company by disclosing to unauthorized persons, confidential information or trade secrets of the Company, (ii) materially breached any contract with, or materially violated any fiduciary obligation to, the Company, or (iii) engaged in unlawful trading in the securities of RHII or of another company based on nonpublic information gained as a result of that Optionee's employment with the Company, then, effective as of the date notice of such misconduct is given by the Administrator to the Optionee, that Optionee shall forfeit all rights to any unexercised Options granted under the Plan and all of that Optionee's outstanding Options shall automatically terminate and lapse, unless the Administrator shall determine otherwise. (g) NONTRANSFERABILITY OF OPTIONS. During an Optionee's lifetime, his or her Options shall not be transferrable and shall only be exercisable by the Optionee and any purported transfer shall be null and void. Options are not transferable except by will or by the laws of descent and distribution. 7. 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 the terms and conditions of outstanding Options, provided, however, that (i) no such amendment shall be adverse to the holders of the Options, (ii) no such amendment shall extend the term of an Option, and (iii) the amended terms of the Option would be permitted under this Plan. 8. FOREIGN EMPLOYEES. Without amending the Plan, the Administrator may grant Options to eligible employees who are foreign nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Administrator be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes the Administrator may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries in which the Company operates or has employees. 9. REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Option shall be subject to the requirement that if at any time the Administrator shall determine that the registration, listing or qualification of the shares covered thereby upon any securities exchange or under any foreign, federal, state or local law, or the consent or approval of any governmental regulatory body, is necessary or 3 desirable as a condition of, or in connection with, the granting of such Option or the purchase of shares thereunder, no such Option may be exercised unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Administrator. Any person exercising an Option shall make such representations and agreements and furnish such information as the Administrator may request to assure compliance with the foregoing or any other applicable legal requirements. RHII shall use its reasonable best efforts to cause shares issued hereunder to be registered under the Securities Act of 1933, as amended. 10. BUY OUT OF OPTION GAINS. The Administrator shall have the right to elect, in its sole discretion and without the consent of the holder thereof (subject to the last sentence of this paragraph), to cancel the exercisable portion of any Option and pay to the Optionee the excess of the Fair Market Value of the shares of Common Stock covered by such cancelled portion of the Option over the Option Price of such cancelled portion of the Option at the date the Administrator provides written notice (the "Buy Out Notice") of its intention to exercise such right. Buy outs pursuant to this provision shall be effected by RHII as promptly as possible after the date of the Buy Out Notice. Payments of buy out amounts may be made in cash, in shares of Common Stock, or partly in cash and partly in Common Stock, as the Administrator deems advisable. To the extent payment is made in shares of Common Stock, the number of shares shall be determined by dividing the amount of the payment to be made by the Fair Market Value of a share of Common Stock at the date of the Buy Out Notice. In no event shall RHII be required to deliver a fractional share of Common Stock in satisfaction of this buy out provision. Payments of such buy out amounts shall be made net of any applicable foreign, federal (including FICA), state and local withholding taxes. Notwithstanding the foregoing, no buy out may be effected (a) until at least six months after the Grant Date of the subject option, and (b) without the consent of the Optionee if the Optionee is generally required to file reports pursuant to Section 16(a) of the Exchange Act with respect to his transactions in the Common Stock. 11. 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 or exchange of shares or other similar corporate change, such equitable adjustments may be made in the Plan and the Options granted hereunder as the Administrator determines are necessary or appropriate, including, if necessary, an adjustment in the number of shares and prices per share applicable to Options then outstanding and in the number of shares which are reserved for issuance under the Plan. Any such adjustment shall be conclusive and binding for all purposes of the Plan. 12. NO RIGHTS TO OPTIONS OR EMPLOYMENT. No employee or other person shall have any claim or right to be granted an Option under the Plan. Receipt of an Option under the Plan shall not give an employee any rights to receive any other grant under the Plan. An Optionee shall have no rights to or interest in any Option except as set forth herein. 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. 13. RIGHTS AS SHAREHOLDER. An Optionee 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 Optionee. 14. OTHER ACTIONS. This Plan shall not restrict the authority of the Administrator or of RHII, for proper corporate purposes, to grant or assume stock options, other than under the Plan, to or with respect to any employee or other person. 15. COSTS AND EXPENSES. Except as provided in Section 6(d) hereof with respect to taxes, the costs and expenses of administering the Plan shall be borne by RHII and shall not be charged to any grant nor to any employee receiving a grant. 4 16. 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, RHII 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. 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. EFFECTIVE DATE. This Plan shall become effective upon adoption by the Board of Directors of RHII. If stockholder approval is required (a) under the General Rules and Regulations promulgated under Section 16 of the Exchange Act in order to exempt any transaction contemplated by this Plan from Section 16(b) of the Exchange Act, (b) by the rules of the New York Stock Exchange, if RHII Common Stock is listed thereon, or (c) by the rules of NASDAQ pertaining to the National Market System, if RHII Common Stock is quoted thereon, then this Plan shall be submitted to the stockholders of RHII for consideration at the next annual meeting of stockholders. The Administrator may make Options conditioned on such approval, and any Option so made shall be effective as of the date of grant. 5 EX-10.3 4 EXHIBIT 10.3 EXHIBIT 10.3 OUTSIDE DIRECTORS' OPTION PLAN OF ROBERT HALF INTERNATIONAL INC. (AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997) 1. DEFINITIONS. As used in this Plan, the following terms have the following meanings: 1.1. ADMINISTRATOR means the Board or a committee appointed by the Board. 1.2. AFFILIATE means a "parent" or "subsidiary" corporation, as defined in Sections 425(e)and 425(f), respectively, of the Code. 1.3. ANNUAL ORGANIZATIONAL MEETING means the first meeting of the Board after the annual meeting of the Company's stockholders. 1.4. BOARD means the Board of Directors of the Company. 1.5. CHANGE IN CONTROL. A Change in Control means any of the following events: 1.5.1. Any person or group (as such terms are defined in Section 13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored by the Company or a subsidiary thereof or a corporation owned (directly or indirectly), by the stockholders of the Company in substantially the same proportions of the ownership of stock of the Company, shall become the beneficial owner of securities of the Company representing 20% or more, or commences a tender or exchange offer following the successful consummation of which the offerer and its affiliates would beneficially own securities representing 20% or more, of the combined voting power of then outstanding securities ordinarily (and apart from rights accruing in special circumstances) having the right to vote in the election of directors, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in Control shall not be deemed to include the acquisition by any such person or group of securities representing 20% or more of the Company if such party has acquired such securities not with the purpose nor with the effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purposes or effect, including, without limitation, not in connection with such party (i) making any public announcement with respect to the voting of such shares at any meeting to consider a merger, consolidation, sale of substantial assets or other business combination or extraordinary transaction involving the Company, (ii) making, or in any way participating in, any "solicitation" of "proxies" (as such terms are defined or used in Regulation 14A under the Exchange Act) to vote any voting securities of the Company (including, without limitation, any such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking to advise or influence any party with respect to the voting of any voting securities of the Company, directly or indirectly, relating to a merger or other business combination involving the Company or the sale or transfer of substantial assets of the Company, (iii) forming, joining or in any way participating in any "group" within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of the Company, directly or indirectly, relating to a merger or other business combination involving the Company or the sale or transfer of any substantial assets of the Company, or (iv) otherwise acting, alone or in concert with others, to seek control of the Company or to seek to control or influence the management or policies of the Company. 1.5.2. The stockholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company. 1.5.3. A change in the composition of the Board of Directors of the Company occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either (i) are directors of the Company as of the date hereof, or (ii) are elected, or nominated for election, to the Board of Directors of the Company with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company). As a result of or in connection with any cash tender offer, merger, or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Company just prior to such event shall cease within one year to constitute a majority of the Board. 1.5.4. 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. 1.5.5. 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. 1.6. CODE means the Internal Revenue Code of 1986, as amended. 1.7. COMPANY means Robert Half International Inc. 1.8. DIRECTOR means a member of the Board. 1 1.9. ELIGIBLE DIRECTOR means a Director who is not also an employee of the Company or an Affiliate. 1.10. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended. 1.11. GRANT DATE means the date on which an Option is granted. 1.12. OFFER means a tender offer or an exchange offer for shares of the Company's Stock. 1.13. OPTION means an option to purchase Stock as described in Section 5.1 hereof. An Option granted under this Plan is a nonstatutory option to purchase Stock which does not meet the requirements set forth in Section 422A of the Code. 1.14. OPTION AGREEMENT means a written agreement evidencing an Option, in form satisfactory to the Company, duly executed on behalf of the Company and delivered to and executed by an Optionee. 1.15. OPTIONEE means an Eligible Director who has been granted an Option. 1.16. PLAN means the Outside Directors' Option Plan. 1.17. SECURITIES ACT means the Securities Act of 1933, as amended. 1.18. STOCK means the Common Stock, $.001 par value, of the Company. 1.19. STOCK PURCHASE AGREEMENT means a written agreement, in form satisfactory to the Company, duly executed by the Company and an Optionee who has exercised an Option to purchase Stock. 1.20. TERMINATION DATE means the date on which an Optionee ceases to be a Director of the Company. 1.21. VESTING DATE means, with respect to each calendar year, the last day of the month in which the Annual Organization Meeting is held; provided, however, that the "Vesting Date" with respect to a particular Option shall not include the last day of the month in which such Option is granted. 1.22. VOTING SHARES means the outstanding shares of the Company entitled to vote for the election of directors. 2. PURPOSES OF THE PLAN. The purposes of the Plan are to attract and retain the best available candidates for the Board, to provide additional equity incentives to Eligible Directors through their participation in the growth value of the Stock, and to promote the success of the Company's business. To accomplish the foregoing objectives, this Plan provides a means whereby Eligible Directors will receive Options to purchase Stock. 3. STOCK SUBJECT TO THE PLAN. The number of authorized but previously unissued shares of the Company's Stock available for issuance hereunder shall equal the number of shares of Stock with respect to which Options are granted pursuant to Section 5 hereof. 4. ADMINISTRATION. The Administrator shall have the authority to grant Options upon the terms and conditions of this Plan, and to determine all other matters relating to this Plan. The Administrator may delegate ministerial duties to such employees of the Company as it deems proper. All questions of interpretation, implementation and application of this Plan shall be determined by the Administrator, and such determinations shall be final and binding on all persons. 2 5. TERMS AND CONDITIONS OF OPTIONS. 5.1. GRANT OF OPTION. Options shall be granted pursuant to this Plan as follows: 5.1.1. GRANT ON EFFECTIVE DATE. Upon the effective date of this Plan, an Option for 30,000 shares of Stock shall be granted to each Eligible Director who shall not previously have been granted an option by the Company for the purchase of shares of Stock. 5.1.2. SUBSEQUENT GRANTS. On the date of each Annual Organizational Meeting subsequent to the effective date of this Plan, an Option shall be granted to each Eligible Director. With respect to any Eligible Director who, prior to such date, shall not have been granted an option by the Company, whether pursuant to this Plan or any other plan or arrangement with the Company, the Option shall be for 15,000 shares of Stock. Otherwise, the Option shall be for 12,000 shares of Stock. 5.2. EXERCISE PRICE. The exercise price of an Option shall be 100% of the value of the Stock on the Grant Date, determined in accordance with Section 6 hereof. 5.3. OPTION TERM. Each Option granted under this Plan shall expire ten (10) years from the Grant Date. 5.4. OPTION EXERCISE. 5.4.1. INITIAL EXERCISE. No Option may be exercised in whole or in part until the later to occur of (i) the first Vesting Date following the Grant Date of such Option and (ii) six months after the Grant Date of such Option. 5.4.2. STOCKHOLDER APPROVAL. If stockholder approval of this Plan is required (a) under the rules and regulations promulgated under Section 16 of the Exchange Act in order to exempt any transaction contemplated by this Plan from Section 16(b) of the Exchange Act, or (b) by the rules of the New York Stock Exchange, if the Company's securities are listed thereon, or (c) by the rules of the National Association of Securities Dealers automated quotation system ("NASDAQ"), National Market System, if the Company's securities are quoted thereon, then no Option may be exercised in whole or in part until the stockholders of the Company have approved this Plan. 5.4.3. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued pursuant to the exercise of an Option unless the exercise of the Option and the issuance and delivery of Stock pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the Exchange Act, applicable state securities laws, the rules and regulations promulgated under each of the foregoing, the requirements of the New York Stock Exchange (if the Company's securities are listed thereon) and the requirements of NASDAQ pertaining to the National Market System (if the Company's securities are quoted thereon), and shall be further subject to the approval of counsel for the Company with respect to such compliance. 5.5. REGISTRATION AND RESALE. If the Stock subject to this Plan is not registered under the Securities Act and under applicable state securities laws, the Administrator may require that the Participant deliver to the Company such documents as counsel for the Company may determine are necessary or advisable in order to substantiate compliance with applicable securities laws and the rules and regulations promulgated thereunder. 5.6. VESTING SCHEDULE. An Optionee's right to exercise an Option shall vest, as to twenty-five percent (25%) of the Stock (as adjusted, pursuant to Section 5.8.1 hereof, if applicable) initially subject to the Option, on each of the first through fourth Vesting Dates following the Grant Date. 3 5.7. PAYMENT UPON EXERCISE. At the time written notice of exercise of an Option is given to the Company, the Optionee shall make payment in full, in cash or check or by one of the methods specified in Section 5.7.1 or Section 5.7.2 below, for all Stock purchased pursuant to the exercise of such Option. Proceeds of any such payment shall constitute general funds of the Company. 5.7.1. PROMISSORY NOTE. An Option may be exercised by delivery of the Optionee's full recourse promissory note for any portion or all of the aggregate exercise price of the Stock as to which the Option is being exercised. Such note shall (a) bear interest at the lowest rate which will not result in interest being imputed pursuant to the Internal Revenue Code, (b) mature four years after the date of exercise and (c) be on such other terms as determined by the Administrator. Such promissory note shall be secured by a security interest in the Stock purchased pursuant to the Option and in such other manner, if any, as the Administrator shall approve. 5.7.2. DELIVERY OF STOCK. An Option may be exercised by delivery by the Optionee of Stock already owned by the Optionee for all or part of the aggregate exercise price of the Stock as to which the Option is being exercised, so long as (i) the value of such Stock (determined as provided in Section 6) is equal on the date of exercise to the aggregate exercise price of the shares of Stock as to which the Option is being exercised, or such portion thereof as the Optionee is authorized to pay by delivery of Stock and (ii) such previously owned shares have been held by the Optionee for at least six months. 5.8. ADJUSTMENTS. 5.8.1. CHANGES IN CAPITAL STRUCTURE. If the Stock is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, or is converted into or exchanged for other securities other than as a result of a Change of Control, the Administrator shall make such appropriate adjustments in (i) the number of shares of Stock to be covered by options granted under Section 5.1.2 hereof, (ii) each Option outstanding under this Plan, and (iii) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustment. Each such adjustment shall be determined by the Administrator in its sole discretion, which determination shall be final and binding on all persons. Any new or additional Stock to which an Optionee may be entitled under this Section 5.8.1 shall be subject to all of the terms and conditions set forth in Section 5 of this Plan. 5.8.2. CHANGE OF CONTROL. In the event of a Change of Control, all Options shall vest immediately. 5.9. NO ASSIGNMENT. No right or benefit under, or interest in, the Plan shall be subject to assignment or transfer (other than by will or the laws of descent and distribution), and no such right, benefit or interest shall be subject to attachment or legal process for or against Participant or his or her beneficiaries, as the case may be. During the life of the Optionee, an Option shall be exercisable only by the Optionee or, in the event of disability of the Optionee, by the Optionee's guardian or legal representative. 5.10. TERMINATION; EXPIRATION OF UNVESTED OPTIONS. Options granted to an Optionee under this Plan, to the extent such rights have not expired or been exercised, shall terminate on such Optionee's Termination Date; provided, however, that an Option may be exercised, to the extent vested and exercisable on the Termination Date, for a period of thirty (30) days after such Optionee's Termination Date; and, provided further, that if exercise of an Option during such thirty (30) day period would subject such Optionee to liability under Section 16(b) of the Exchange Act, such thirty (30) day period shall not begin to run until six (6) months from the date of the last Stock transaction made, indirectly or directly, by such Optionee prior to such Optionee's Termination Date. 4 6. DETERMINATION OF VALUE. For purposes of this Plan, the value of the Stock shall be the closing sales price on the New York Stock Exchange or the NASDAQ National Market System, as the case may be, on the date the value is to be determined as reported in THE WALL STREET JOURNAL (Western Edition). If there are no trades on such date, the closing sale price on the last preceding business day upon which trades occurred shall be the fair market value. If the Stock is not listed on the New York Stock Exchange or quoted on the NASDAQ National Market System, the fair market value shall be determined in good faith by the Administrator. 7. MANNER OF EXERCISE. An Optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the Secretary of the Company, accompanied by an executed Stock Purchase Agreement and by payment of the Option exercise price in accordance with Section 5.7. The date the Company receives written notice of an exercise hereunder accompanied by payment of the Option exercise price will be considered the date such Option was exercised. Promptly after receipt of such written notice and payment, the Company shall deliver to the Optionee or such other person permitted to exercise such Option under Section 5.9, a certificate or certificates for the requisite number of shares of Stock. The Company shall pay any stock issue or transfer tax incurred with respect to such exercise and issuance. 8. RIGHTS. 8.1. RIGHTS AS OPTIONEE. No Eligible Director shall acquire any rights as an Optionee unless and until an Option Agreement has been duly executed on behalf of the Company, delivered to the Optionee and executed by the Optionee. 8.2. RIGHTS AS STOCKHOLDER. No person shall have any rights as a stockholder of the Company with respect to any Stock subject to an Option until the date that a stock certificate has been issued and delivered to the Optionee. 8.3. NO RIGHT TO REELECTION. Nothing contained in the Plan or any Option Agreement shall be deemed to create any obligation on the part of the Board to nominate any Director for reelection by the Company's stockholders, or confer upon any Director the right to remain a member of the Board for any period of time, or at any particular rate of compensation. 9. REGISTRATION AND RESALE. The Board may, but shall not be required to, cause the Plan, the Options, and Stock subject to the Plan to be registered under the Securities Act and under the securities laws of any state. No Option may be exercised, and the Company shall not be obliged to grant Stock upon exercise of an Option, unless, in the opinion of counsel for the Company, such exercise and grant is in compliance with all applicable federal and state securities laws and the rules and regulations promulgated thereunder. As a condition to the grant of an Option for the issuance of Stock upon the exercise of an Option, the Administrator may require that the Optionee agree to comply with such provisions and federal and state securities laws as may be applicable to such grant or the issuance of Stock, and that the Optionee delivers to the Company such documents as counsel for the Company may determine are necessary or advisable in order to substantiate compliance with applicable securities laws and the rules and regulations promulgated thereunder. 10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the Administrator may at any time amend, alter, suspend, or discontinue this Plan, except to the extent that stockholder approval is required for any amendment or alteration (a) by Rule 16b-3 or applicable law in order to exempt from Section 16(b) of the Exchange Act any transaction contemplated by this Plan, or (b) by the rules of the New York Stock Exchange, if the Company's securities are listed thereon, or (c) by the rules of NASDAQ pertaining to the National Market System, if the Company's securities are quoted thereon; provided, however, no amendment, alteration, suspension or discontinuation shall be made that would impair the rights of any Optionee under an Option without such Optionee's consent; and provided further, any provision in this Plan relating to the eligibility of Directors to participate in this Plan, the timing of Option grants made under this Plan or the amount of Options granted to a Director under this Plan shall not be amended, to the extent so provided by Rule 16b-3, more than once every six months, other 5 than to comport with the changes in the Code or the rules thereunder. Subject to the foregoing, the Administrator shall have the power to make such changes in the regulations and administrative provisions hereunder, or in any Option (with the Optionee's consent), as in the opinion of the Administrator may be appropriate from time to time. 11. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting the Administrator shall be indemnified for actions with respect to the Plan to the fullest extent permitted by the Certificate of Incorporation, as amended, and the By-laws of the Company and by the terms of any indemnification agreement that has been or shall be entered into from time to time between the Company and any such person. 12. HEADINGS. The headings used in this Plan are for convenience only, and shall not be used to construe the terms and conditions of the Plan. 13. EFFECTIVE DATE. This Plan shall become effective upon adoption by the Board. If stockholder approval is required (a) under the General Rules and Regulations promulgated under Section 16 of the Exchange Act in order to exempt any transaction contemplated by this Plan from Section 16(b) of the Exchange Act or (b) by the rules of the New York Stock Exchange, if the Company's securities are listed thereon, or (c) by the rules of NASDAQ pertaining to the National Market System, if the Company's securities are quoted thereon, then this Plan shall be submitted to the stockholders of the Company for consideration at the next annual meeting of stockholders. The Administrator may make Options conditioned on such approval, and any Option so made shall be effective as of the date of grant, subject only to such approval. 6 EX-10.4 5 EXHIBIT 10.4 EXHIBIT 10.4 ROBERT HALF INTERNATIONAL INC. 1989 RESTRICTED STOCK PLAN (AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 26, 1997) 1. DEFINITIONS. As used in this Plan, the following terms shall have the meanings set forth below: 1.1. ADMINISTRATOR means the Board or a committee appointed by the Board, the composition and size of which shall cause such committee to satisfy the requirements of Rule 16b-3 of the Exchange Act with respect to officers and directors. 1.2. BOARD means the Board of Directors of the Company. 1.3. COMPANY means Robert Half International Inc., a Delaware corporation. 1.4. 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. 1.5. 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 Participant 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. 1.6. 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. 1.7. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended. 1.8. GRANT DATE means the date on which a Restricted Stock Grant is granted to an Eligible Employee. 1.9. ISSUE DATE means the date on which shares of Stock subject to a Restricted Stock Grant are issued or transferred by the Company to the account of an Eligible Employee who has received such grant. 1.10. OFFER means a tender offer or an exchange offer for the Company's Stock. 1.11. PARTICIPANT means an individual to whom a Restricted Stock Grant is granted under the Plan. 1.12. PLAN means this 1989 Restricted Stock Plan. 1.13. RESTRICTED STOCK GRANT means a grant described in Section 8 of the Plan which is made by the Company and approved by the Administrator under and pursuant to the Plan. 1.14. SECURITIES ACT means the Securities Act of 1933, as amended. 1.15. STOCK means the Common Stock, $.001 par value, of the Company. 1 1.16. SUBSIDIARY means a "subsidiary" corporation as defined in Section 425(f) of the Internal Revenue Code of 1986, as amended. 1.17. VESTING DATE means the last day of the calendar month in which the annual organizational Board meeting following the annual meeting of the stockholders of the Company is held, or such other date as shall be established by the Administrator; provided, however, that the "Vesting Date" with respect to a particular Restricted Stock Grant shall not include the last day of the month in which such Restricted Stock Grant is granted. 1.18. VOTING SHARES means the outstanding shares of the Company entitled to vote for the election of Directors. 1.19. WITHHOLDING TAXES means any applicable federal, state and local income and other employment taxes which the Company is required to withhold in connection with the lapse of restrictions on Stock subject to a Restricted Stock Grant. 2. PURPOSE. The purpose of the Plan is to aid the Company and its Subsidiaries in attracting, retaining and motivating management employees with outstanding ability, competence and potential. The Plan provides such employees with a proprietary interest in the Company's success and progress by granting to them shares of Stock in accordance with the terms and conditions set forth below. 3. STOCK SUBJECT TO THE PLAN. A total of 1,800,000 shares of Stock, subject to adjustment as provided in Section 9 of the Plan, all of which shall be treasury shares, shall be reserved for issuance under this Plan. If, on or before termination of the Plan, any shares of Stock shall be reacquired by the Company pursuant to the termination provisions described in Section 11 of the Plan or in the instruments evidencing the making of Restricted Stock Grants, such shares may again be granted under the Plan. 4. ADMINISTRATION. The Plan shall be administered by the Administrator. Subject to all the applicable provisions of the Plan, the Administrator is authorized to make Restricted Stock Grants in accordance with the Plan, 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, its shareholders, and all Participants. 5. 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 granted Restricted Stock Grants under the Plan, the number of shares of Stock to be granted to each such Eligible Employee and the terms, conditions and restrictions of each such Restricted Stock 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 Restricted Stock Grants to Eligible Employees subject to differing terms and conditions. 6. RIGHTS WITH RESPECT TO SHARES OF STOCK. The Administrator shall notify each Eligible Employee to whom a Restricted Stock Grant has been granted of such grant. 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 Grant, the Eligible Employee shall be a Participant, and the Company shall cause to be issued or transferred to the name of the Participant a certificate or certificates for the number of shares of Stock granted, subject to the provisions of Section 8.6 hereof. From and after the Issue Date, the Participant shall have absolute ownership of such shares of Stock, 2 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 Grant. 7. EMPLOYMENT. No grant of a Restricted Stock Grant to a Participant under the Plan shall affect any right of the Company or any Subsidiary to terminate, with or without cause, the Participant's employment at any time. 8. TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT. Each Restricted Stock Grant 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. 8.1. TERMINATION OF CONTINUOUS EMPLOYMENT. If the Participant's Continuous Employment with the Company or any Subsidiary shall terminate for any reason, except as provided in Section 8.3, all the rights of the Participant to such shares of Stock as to which restrictions have not lapsed pursuant to this Section or under Sections 8.2, 8.3 or 8.4 hereof shall immediately terminate; provided, however, that the Administrator, in its sole discretion, within ninety (90) days of such termination of Continuous Employment, may notify the Participant in writing that the Participant's rights in such shares will not terminate and that the Participant shall continue to be the owner of such shares, subject to such continuing restrictions as the Administrator may prescribe in such notice. 8.2. LAPSE OF RESTRICTIONS. The restrictions imposed on any Restricted Stock Grant shall lapse as to twenty-five percent (25%) of the Stock granted pursuant to such grant on each of first through fourth Vesting Dates which occur following the related Grant Date of such Restricted Stock Grant. Notwithstanding the foregoing, the Administrator may accelerate the lapsing of restrictions on a Restricted Stock Grant, in whole or in part, (i) as permitted by Section 8.1; (ii) as required by any employment or other agreement with the Company or any Subsidiary to which a Participant hereunder is a party; or (iii) under such terms and conditions as the Administrator deems appropriate. 8.3. TERMINATION OF CONTINUOUS EMPLOYMENT BY REASON OF DEATH OR DISABILITY. Any provisions of Section 8.1 to the contrary notwithstanding, if a Participant (i) has been in the Continuous Employment of the Company or a Subsidiary since the Grant Date of a Restricted Stock Grant and (ii) the employment of such Participant is terminated as a result of death or Disability, then, on the date of such termination, the restrictions imposed on any Restricted Stock Grant shall lapse as to all shares of Stock granted to such Participant pursuant to such Restricted Stock Grant. 8.4. CHANGE IN CONTROL. In the event of a Change in Control (as defined in this Section 8.4), all restrictions on any and all Restricted Stock Grants then outstanding shall immediately lapse. For purposes of this Plan, a "Change in Control" shall occur in the event of any of the following: 3 8.4.1. Any person or group (as such terms are defined in Section 13(d)(3) of the Exchange Act), other than an employee benefit plan sponsored by the Company or a subsidiary thereof or a corporation owned (directly or indirectly), by the stockholders of the Company in substantially the same proportions of the ownership of stock of the Company, shall become the beneficial owner of securities of the Company representing 20% or more, or commences a tender or exchange offer following the successful consummation of which the offerer and its affiliates would beneficially own securities representing 20% or more, of the combined voting power of then outstanding securities ordinarily (and apart from rights accruing in special circumstances) having the right to vote in the election of directors, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise; PROVIDED, HOWEVER, that a Change in Control shall not be deemed to include the acquisition by any such person or group of securities representing 20% or more of the Company if such party has acquired such securities not with the purpose nor with the effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purposes or effect, including, without limitation, not in connection with such party (i) making any public announcement with respect to the voting of such shares at any meeting to consider a merger, consolidation, sale of substantial assets or other business combination or extraordinary transaction involving the Company, (ii) making, or in any way participating in, any "solicitation" of "proxies" (as such terms are defined or used in Regulation 14A under the Exchange Act) to vote any voting securities of the Company (including, without limitation, any such solicitation subject to Rule 14a-11 under the Exchange Act) or seeking to advise or influence any party with respect to the voting of any voting securities of the Company, directly or indirectly, relating to a merger or other business combination involving the Company or the sale or transfer of substantial assets of the Company, (iii) forming, joining or in any way participating in any "group" within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of the Company, directly or indirectly, relating to a merger or other business combination involving the Company or the sale or transfer of any substantial assets of the Company, or (iv) otherwise acting, alone or in concert with others, to seek control of the Company or to seek to control or influence the management or policies of the Company. 8.4.2. The stockholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company. 8.4.3. A change in the composition of the Board of Directors of the Company occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either (i) are directors of the Company as of the date hereof, or (ii) are elected, or nominated for election, to the Board of Directors of the Company with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company). As a result of or in connection with any cash tender offer, merger, or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Company just prior to such event shall cease within one year to constitute a majority of the Board. 8.4.4. 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. 8.4.5. 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. 8.5. AGREEMENT BY PARTICIPANT REGARDING WITHHOLDING TAXES. Each Participant granted a Restricted Stock Grant shall represent in writing that such Participant acknowledges that, with respect to each Restricted Stock Grant held by such Participant, (i) on each Vesting Date, Withholding Taxes become due with respect to shares of Stock as to which restrictions lapse, (ii) payment of Withholding Taxes to the Company is the responsibility of Participant and (iii) payment of such Withholding Taxes may require a significant cash outlay by Participant. In addition, each Participant granted a Restricted Stock Grant shall be subject to the following rules: 8.5.1. PAYMENT OF TAXES. Within five (5) business days following any lapsing of restrictions pursuant to the operation of Sections 8.1, 8.2, 8.3 or 8.4 hereof, the Company shall notify each affected Participant or, if applicable under Section 8.3, his or her estate, as to the amount of Withholding Taxes required to be withheld by the Company as a result of the lapse of restrictions. Within five (5) business days of receipt of such notice, Participant shall make full payment of Withholding Taxes to the Company. Such payment may be made in cash or by check or by reduction in the number of shares deliverable to Participant. If Withholding Taxes are paid by reduction of the number of shares deliverable to Participant, such shares shall be valued as of the date that the restrictions lapsed. In the event that such payment is not made within the specified time period, to the extent permitted by law the Company shall have the right to cause such Participant's Withholding Taxes obligation to be satisfied by reducing the number of shares of Stock deliverable or by offsetting such Withholding Taxes against amounts otherwise due from the Company to such Participant. The Company may instruct its transfer agent to withhold delivery of certificates evidencing such shares of Stock until Participant's Withholding Taxes obligation has been satisfied in full. 8.5.2. ELECTION TO RECOGNIZE GROSS INCOME IN THE YEAR OF GRANT. If any Participant 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 Participant shall pay to the Company in the calendar month of such Grant Date, or make arrangements satisfactory to the Administrator to pay to the Company, any Withholding Taxes required to be withheld with respect to such shares. 8.6. RESTRICTIVE LEGENDS; TRANSFER RESTRICTIONS; CUSTODY. Each certificate evidencing shares of Stock granted pursuant to a Restricted Stock Grant may bear an appropriate legend referring to the terms, conditions and restrictions described in the Plan and in the instrument evidencing the Restricted Stock Grant. In addition, if required under this Plan or applicable securities laws, 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 4 restrictions shall be invalid. Until the restrictions thereon have lapsed and the related Withholding Taxes obligations have been satisfied, such certificates will be held in custody by the Company or such bank or other institution designated by the Administrator. 8.7. NO ASSIGNMENT. Except as specifically provided by law (including the laws of descent and distribution), 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 Participant or his or her beneficiaries, as the case may be. 8.8. COMPLIANCE WITH SECURITIES LAWS. Stock shall not be issued pursuant to a Restricted Stock Grant unless the issuance and delivery of Stock pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the Exchange Act, applicable state securities laws, 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. 8.9. REGISTRATION AND RESALE. If the Stock subject to this Plan is not registered under the Securities Act and under applicable state securities laws, the Administrator may require that the Participant deliver to the Company such documents as counsel for the Company may determine are necessary or advisable in order to substantiate compliance with applicable securities laws and the rules and regulations promulgated thereunder. 8.10. HOLDING PERIOD. Deleted. 8.11. PERFORMANCE CONDITIONS. If so determined by the Administrator, any grant of Restricted Shares shall be made subject to a Performance Condition in addition to any other restrictions imposed pursuant to this Section 8. Such Performance Condition shall operate as specified in this Section 8.11. 8.11.1 As used in this Section 8.11, the following terms shall have the indicated meanings: CERTIFICATION DATE means the date that the Administrator makes its written certification of a Final Restricted Stock Award. ACTUAL EPS means fully diluted earnings per share for the Performance Period, determined in accordance with generally accepted accounting principles. For purposes of the foregoing sentence, earnings shall mean income before extraordinary items, discontinued operations and cumulative effect of changes in accounting principles and after full accrual for the bonuses paid under this Plan. EPS RATIO means the result obtained by dividing Actual EPS by Target EPS. FINAL RESTRICTED STOCK AWARD means the product of the Multiplier and the Unvested Restricted Stock Award. MULTIPLIER means (a) the sum of 0.1 and the EPS Ratio, if the EPS Ratio is greater than or equal to 0 and less than 0.9, (b) 1, if the EPS Ratio is greater than or equal to 0.9, or (c) 0, if the EPS Ratio is less than 0. PERFORMANCE PERIOD means the period of service to which the Performance Condition relates. 5 TARGET EPS means the EPS goal set with respect to a Restricted Stock Award made subject to a Performance Condition. UNVESTED RESTRICTED STOCK AWARD means the number of shares of a Restricted Stock Award made subject to a Performance Condition with respect to which the restrictions otherwise imposed by this Section 8 have not lapsed pursuant to Section 8.2, 8.3 or 8.4. 8.11.2 A Restricted Stock Award shall be subject to a Performance Condition only if (a) the Administrator makes such a determination on the Grant Date or (b) the Participant consents to the Performance Condition. 8.11.3 If a Restricted Stock Award is made subject to a Performance Condition, the Administrator shall establish the Performance Period and Target EPS for such award no later than the time permitted by section 162(m) of the Internal Revenue Code. 8.11.4 After the public release by the Company of its unaudited results for the last fiscal quarter of the Performance Period, the Chief Financial Officer shall, with respect to each Restricted Stock Award made subject to a Performance Condition, (a) calculate the Actual EPS, (b) determine the Multiplier, (c) calculate the Final Restricted Stock Award, and (d) deliver such calculation to the Administrator. 8.11.5 The Administrator shall review the information submitted by the Chief Financial Officer and certify, in writing, each Final Restricted Stock Award. 8.11.6 To the extent that a Final Restricted Stock Award is less than the Unvested Restricted Stock Award, the number of shares of the Unvested Restricted Stock Award representing the difference shall be forfeited by the Holder. The Final Restricted Stock Award shall bear the same vesting schedule as the Unvested Restricted Stock Award, and on each Vesting Date the percentage of the Final Restricted Stock Award that vests shall be the same as the percentage of the Unvested Restricted Stock Award that would have vested had no shares been forfeited as a result of the Performance Condition. 8.11.7 If all or a portion of an Unvested Restricted Stock Award made subject to a Performance Condition shall have the restrictions otherwise imposed by this Section 8 removed by operation of Section 8.3 or 8.4, then the Performance Condition shall be cancelled and none of such shares shall be subject to reduction or forfeiture as provided by the Performance Condition. Such shares shall be released to the Participant in accordance with the terms of this plan relating to shares with respect to which no restrictions remain. 8.11.8 If all or a portion of an Unvested Restricted Stock Award made subject to a Performance Condition shall have the restrictions otherwise imposed by this Section 8 removed for any reason other than by operation of Section 8.3 or 8.4, no shares shall be released to the Participant until after the Certification Date. No such removal of restrictions prior to the Certification Date shall in any way be deemed a satisfaction, waiver or cancellation of the Performance Condition, and such Unvested Restricted Stock Award shall remain subject to reduction and forfeiture as provided by the Performance Condition. 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the Stock is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, or is converted into or exchanged for other securities, other than as a result of a Change of Control, appropriate adjustments shall be made in the number and class of shares of Stock subject to this Plan and each Restricted Stock Grant made pursuant to this Plan; provided, however, that if fractional shares become due to any Participant as a result of any such adjustment, the Company may, at its option, pay cash in lieu thereof. Each such adjustment shall be determined by the Administrator in its sole discretion, which determination shall be final and binding on all persons. Any new or additional Stock to which a Participant may be entitled under this Section 9 shall be subject to all the terms and conditions set forth in Section 8 of this Plan. 6 10. DURATION OF PLAN. Unless sooner terminated, the Plan shall remain in effect for a period of ten years from its effective date. Termination of the Plan shall not affect any Restricted Stock Grants previously granted pursuant thereto, which shall remain in effect until their restrictions shall have lapsed, all in accordance with their terms. 11. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board or the Administrator may at any time amend, alter, suspend, or discontinue this Plan, except to the extent that stockholder approval is required for any amendment or alteration (a) by Rule 16b-3 or applicable law in order to exempt from Section 16(b) of the Exchange Act any transaction contemplated by this Plan, (b) by the rules of the New York Stock Exchange, if the Company's securities are listed thereon, or (c) by the rules of National Association of Securities Dealers automated quotation system pertaining to the National Market System, if the Company's securities are quoted thereon; provided, however, no amendment, alteration, suspension or discontinuation shall be made that would impair the rights of any Participant under a Restricted Stock Grant without such Participant's consent. Subject to the foregoing, the Administrator shall have the power to make such changes in the regulations and administrative provisions hereunder, or in any Restricted Stock Grant (with the Participant's consent), as in the opinion of the Administrator may be appropriate from time to time. 12. INDEMNIFICATION OF ADMINISTRATOR. Members of the group constituting the Administrator shall be indemnified for actions with respect to the Plan to the fullest extent permitted by the Certificate of Incorporation, as amended, and the By-laws of the Company and by the terms of any indemnification agreement that has been or shall be entered into from time to time between the Company and any such person. 13. 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. 14. EFFECTIVE DATE. This Plan shall become effective upon adoption by the Board. If stockholder approval is required (a) under the General Rules and Regulations promulgated under Section 16 of the Exchange Act in order to exempt any transaction contemplated by this Plan from Section 16(b) of the Exchange Act or (b) by the rules of the New York Stock Exchange, if the Company's securities are listed thereon, or (c) by the rules of National Association of Securities Dealers automated quotation system pertaining to the National Market System, if the Company's securities are quoted thereon, then this Plan shall be submitted to the stockholders of the Company for consideration at the next annual meeting of stockholders. The Administrator may make Restricted Stock Grants conditioned on such approval, and any Restricted Stock Grant so made shall be effective as of the date of grant, subject only to such approval. 7 EX-11 6 EXHIBIT 11 Exhibit 11 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------- -------------------- 1997 1996 1997 1996 --------- --------- --------- --------- (UNAUDITED) (UNAUDITED) Net Income............................................................ $ 24,631 $ 15,946 $ 66,761 $ 43,409 --------- --------- --------- --------- --------- --------- --------- --------- Weighted Average Number Of Shares Outstanding: Primary: Common stock...................................................... 90,860 88,700 90,516 87,830 Common stock equivalents-- Stock options (A)............................................... 3,356 3,267 3,241 3,310 --------- --------- --------- --------- Primary shares outstanding........................................ 94,216 91,967 93,757 91,140 --------- --------- --------- --------- --------- --------- --------- --------- Fully Diluted: Common stock...................................................... 90,860 88,700 90,516 87,830 Common stock equivalents-- Stock options (A)............................................... 3,516 3,505 3,803 3,754 --------- --------- --------- --------- Fully diluted shares outstanding.................................. 94,376 92,205 94,319 91,584 --------- --------- --------- --------- --------- --------- --------- --------- Net Income Per Share: Primary............................................................. $ .26 $ .17 $ .71 $ .48 Fully diluted....................................................... $ .26 $ .17 $ .71 $ .47
- ------------------------ (A) The treasury stock method was used to determine the weighted average number of shares of common stock equivalents outstanding during the periods. All share and per share amounts have been restated to retroactively reflect the three-for-two stock split effected in the form of a stock dividend in September 1997. EX-27.1 7 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR YEAR DEC-31-1997 DEC-31-1996 JAN-01-1997 JAN-01-1996 SEP-30-1997 DEC-31-1996 130,795 80,181 0 0 179,455 129,399 6,425 4,016 0 0 321,483 217,748 0 0 0 0 537,149 416,012 123,363 86,561 4,829 5,069 0 0 0 0 91 90 392,872 308,355 537,149 416,012 0 0 934,399 898,635 0 0 563,165 545,343 3,693 5,405 0 0 (2,840) (2,243) 113,100 103,645 46,339 42,543 66,761 61,102 0 0 0 0 0 0 66,761 61,102 .71 0.67 .71 0.67
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