FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
------------------------
COMMISSION FILE NUMBER 1-10427
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1648752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2884 SAND HILL ROAD, SUITE 200, MENLO PARK, CALIFORNIA 94025
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (415) 854-9700
------------------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, Par Value $.001 per Share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of March 7, 1996, the aggregate market value of the Common Stock held by
non-affiliates of the registrant was approximately $1,199,755,000 based on the
closing sale price on that date. This amount excludes the market value of
2,630,142 shares of Common Stock held by registrant's directors and officers and
their affiliates.
As of March 7, 1996, there were outstanding 28,998,392 shares of the
registrant's Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement to be mailed to stockholders in
connection with the registrant's annual meeting of stockholders, scheduled to be
held in May 1996, are incorporated by reference in Part III of this report.
Except as expressly incorporated by reference, the registrant's Proxy Statement
shall not be deemed to be part of this report.
PART I
ITEM 1. BUSINESS
Robert Half International Inc. is the world's largest specialized provider
of temporary and permanent personnel in the fields of accounting and finance.
Its divisions include ACCOUNTEMPS-Registered Trademark- and ROBERT
HALF-Registered Trademark-, providers of temporary and permanent personnel,
respectively, in the fields of accounting and finance. The Company, utilizing
its experience as a specialized provider of temporary and permanent personnel,
has expanded into additional specialty fields. In 1991, the Company formed
OFFICETEAM-Registered Trademark- to provide skilled temporary administrative and
office personnel. In 1994, the Company established RHI
CONSULTING-Registered Trademark- to concentrate on providing temporary and
contract information technology professionals in positions ranging from PC
support technician to chief information officer. In 1992, the Company acquired
THE AFFILIATES-Registered Trademark-, which focuses on placing temporary and
permanent employees in paralegal, legal administrative and other legal support
positions.
The Company's business was originally founded in 1948. Prior to 1986, the
Company was primarily a franchisor of ACCOUNTEMPS and ROBERT HALF offices.
Beginning in 1986, the Company and its current management embarked on a strategy
of acquiring franchised locations and other local or regional independent
providers of specialized temporary service personnel. The Company has acquired
all but five of the ACCOUNTEMPS and ROBERT HALF franchises in 45 separate
transactions, and has acquired 16 other local or regional providers of
specialized temporary service personnel. Since 1986, the Company has
significantly expanded operations at many of the acquired locations and has
opened many new locations. The Company believes that direct ownership of offices
allows it to better monitor and protect the image of the ACCOUNTEMPS and ROBERT
HALF names, promotes a more consistent and higher level of quality and service
throughout its network of offices and improves profitability by centralizing
many of its administrative functions. The Company currently has more than 185
offices in 36 states and five foreign countries and placed approximately 101,000
employees on temporary assignment with clients in 1995.
ACCOUNTEMPS
The ACCOUNTEMPS temporary services division offers customers a reliable and
economical means of dealing with uneven or peak work loads for accounting, tax
and finance personnel caused by such predictable events as vacations, taking
inventories, tax work, month-end activities and special projects and such
unpredictable events as illness and emergencies. Businesses increasingly view
the use of temporary employees as a means of controlling personnel costs and
converting such costs from fixed to variable. The cost and inconvenience to
clients of hiring and firing permanent employees are eliminated by the use of
ACCOUNTEMPS temporaries. The temporary workers are employees of ACCOUNTEMPS and
are paid by ACCOUNTEMPS only when working on customer assignments. The customer
pays a fixed rate only for hours worked.
ACCOUNTEMPS clients may fill their permanent employment needs by using an
ACCOUNTEMPS employee on a trial basis and, if so desired, "converting" the
temporary position to a permanent position. The client typically pays a one-time
fee for such conversions.
OFFICETEAM
The Company's OFFICETEAM division, which commenced operations in 1991,
places temporary and permanent office and administrative personnel, ranging from
word processors to office managers, from over 135 locations in the United States
and Canada. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and
ROBERT HALF divisions.
ROBERT HALF
The Company offers permanent placement services through its office network
under the name ROBERT HALF. The Company's ROBERT HALF division specializes in
placing accounting, financial, tax and banking personnel. Fees for successful
permanent placements are paid only by the employer and are generally a
percentage of the new employee's annual compensation. No fee for permanent
placement services is charged to employment candidates.
1
RHI CONSULTING
The Company's RHI CONSULTING division, which commenced operations in 1994,
specializes in providing information technology contract consultants in areas
ranging from multiple platform systems integration to end-user support,
including specialists in programming, networking, systems integration, database
design and help desk support. RHI Consulting conducts its activities from 38
locations in the United States, Canada and Europe.
THE AFFILIATES
In 1992, the Company acquired THE AFFILIATES, a small operation involving
only a limited number of offices, which places temporary and permanent employees
in paralegal, legal administrative and legal secretarial positions. The legal
profession's requirements (the need for confidentiality, accuracy and
reliability, a strong drive toward cost-effectiveness, and frequent peak
workload periods) are similar to the demands of the clients of the ACCOUNTEMPS
division.
MARKETING AND RECRUITING
The Company markets its services to clients as well as employment
candidates. Local marketing and recruiting are generally conducted by each
office or related group of offices. Advertising directed to clients and
employment candidates consists primarily of yellow pages advertisements,
classified advertisements and radio. Direct marketing through mail and telephone
solicitation also constitutes a significant portion of the Company's total
advertising. National advertising conducted by the Company consists primarily of
print advertisements in national newspapers, magazines and certain trade
journals. Joint marketing arrangements have been entered into with Microsoft,
Lotus Development Corporation, WordPerfect Corporation, Peachtree Software,
Inc., and Computer Associates International, Inc. and typically provide for
cooperative advertising, joint mailings and similar promotional activities. The
Company also actively seeks endorsements and affiliations with professional
organizations in the business management, office administration and professional
secretarial fields. The Company also conducts public relations activities
designed to enhance public recognition of the Company and its services. Local
employees are encouraged to be active in civic organizations and industry trade
groups.
The Company owns many trademarks, service marks and tradenames, including
the ROBERT HALF-Registered Trademark-, ACCOUNTEMPS-Registered Trademark-,
OFFICETEAM-Registered Trademark-, THE AFFILIATES-Registered Trademark- and RHI
CONSULTING-Registered Trademark- marks, which are registered in the United
States and in a number of foreign countries.
ORGANIZATION
Management of the Company's operations is coordinated from its headquarters
in Menlo Park, California. The Company's headquarters provides support and
centralized services to its offices in the administrative, marketing,
accounting, training and legal areas, particularly as it relates to the
standardization of the operating procedures of its offices. The Company has more
than 185 offices in 36 states and five foreign countries. Office managers are
responsible for most activities of their offices, including sales, local
advertising and marketing and recruitment.
COMPETITION
The Company faces competition in its efforts to attract clients as well as
high-quality specialized employment candidates. The temporary and permanent
placement businesses are highly competitive, with a number of firms offering
services similar to those provided by the Company on a national, regional or
local basis. In many areas the local companies are the strongest competitors.
The most significant competitive factors in the temporary and permanent
placement businesses are price and the reliability of service, both of which are
often a function of the availability and quality of personnel. The Company
believes it derives a competitive advantage from its long experience with and
commitment to the specialized employment market, its national presence, and its
various marketing activities.
2
EMPLOYEES
The Company has approximately 2,100 full-time staff employees. The Company's
offices placed approximately 101,000 employees on temporary assignments with
clients during 1995. Temporary employees placed by the Company are the Company's
employees for all purposes while they are working on assignments. The Company
pays the related costs of employment, such as workers' compensation insurance,
state and federal unemployment taxes, social security and certain fringe
benefits. The Company provides voluntary health insurance coverage to interested
temporary employees.
OTHER INFORMATION
The Company's current business constitutes a single business segment. (See
Item 8. Financial Statements and Supplementary Data for financial information
about the Company.)
The Company is not dependent upon a single customer or a limited number of
customers. The Company's operations are generally more active in the first and
fourth quarters of a calendar year. Order backlog is not a material aspect of
the Company's business and no material portion of the Company's business is
subject to government contracts. The Company does not have any material
expenditures for research and development. Compliance with federal, state or
local environmental protection laws has no material effect on the capital
expenditures, earnings or competitive position of the Company.
Information about foreign operations is contained in Note N of Notes to
Consolidated Financial Statements in Item 8. The Company does not have export
sales.
ITEM 2. PROPERTIES
The Company's headquarters is located in Menlo Park, California. Placement
activities are conducted through more than 185 offices located in the United
States, Canada, the United Kingdom, Belgium, France and the Netherlands. All of
the offices are leased.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings other
than routine litigation incidental to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year covered by this report.
3
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is listed for trading on the New York Stock
Exchange under the symbol "RHI". On March 7, 1996, there were approximately
1,487 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock as
quoted on the New York Stock Exchange, adjusted, as appropriate, to reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994:
SALES PRICES
--------------------
1995 HIGH LOW
-------------------------------- -------- ---------
4th Quarter..................... $44 5/8 $31 7/8
3rd Quarter..................... $35 7/8 $25 1/4
2nd Quarter..................... $28 5/8 $19 5/8
1st Quarter..................... $26 5/8 $21
SALES PRICES
--------------------
1994 HIGH LOW
-------------------------------- -------- ---------
4th Quarter..................... $26 3/4 $18 1/8
3rd Quarter..................... $23 1/16 $17
2nd Quarter..................... $20 3/16 $15 1/16
1st Quarter..................... $16 7/16 $12 3/4
No cash dividends were paid in 1995 or 1994. The Company, as it deems
appropriate, may continue to retain all earnings for use in its business or may
consider paying a dividend in the future.
4
ITEM 6. SELECTED FINANCIAL DATA
Following is a table of selected financial data of the Company of the last
five years:
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Net service revenues....................................................... $ 628,526 $446,328 $306,166 $220,179 $209,455
Direct costs of services, consisting of payroll, payroll taxes and
insurance costs for temporary employees................................... 384,449 273,327 188,292 131,875 117,583
--------- -------- -------- -------- --------
Gross margin............................................................... 244,077 173,001 117,874 88,304 91,872
Selling, general and administrative expenses............................... 170,684 121,640 88,074 72,136 73,326
Amortization of intangible assets.......................................... 4,767 4,584 4,251 3,961 3,896
Interest (income) expense.................................................. (463) 1,570 3,992 4,301 6,574
--------- -------- -------- -------- --------
Income before income taxes................................................. 69,089 45,207 21,557 7,906 8,076
Provision for income taxes................................................. 28,791 19,090 9,834 3,524 3,961
--------- -------- -------- -------- --------
Net income................................................................. $ 40,298 $ 26,117 $ 11,723 $ 4,382 $ 4,115
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
INCOME PER PRIMARY SHARE: $ 1.36 $ .92 $ .47 $ .18 $ .18
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
INCOME PER FULLY DILUTED SHARE: $ 1.36 $ .92 $ .46 $ .18 $ .18
--------- -------- -------- -------- --------
--------- -------- -------- -------- --------
WEIGHTED AVERAGE NUMBER OF SHARES:
Primary.................................................................... 29,535 28,336 25,092 23,930 23,206
Fully Diluted.............................................................. 29,708 28,484 25,260 24,007 23,273
DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992 1991
--------- -------- -------- -------- --------
(IN THOUSANDS)
BALANCE SHEET DATA:
Intangible assets, net..................................................... $ 155,441 $152,824 $152,156 $143,757 $140,715
Total assets............................................................... 301,140 227,761 204,598 181,999 178,207
Debt financing............................................................. 5,725 4,214 32,740 61,855 67,614
Stockholders' equity....................................................... 227,930 176,995 133,602 90,972 84,419
All shares and per share amounts have been restated to retroactively reflect
the two-for-one stock split effected in the form of a stock dividend in August
1994.
5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1995
Temporary services revenues increased 42% during 1995 and 46% during 1994,
including the revenues generated from the Company's OfficeTeam and RHI
Consulting divisions, which were started in 1991 and 1994, respectively.
Permanent placement revenues increased 31% during the year ended December 31,
1995 and 47% during the year ended December 31, 1994. The revenue comparisons
reflect continued improvement in the demand for the Company's services.
Gross margin dollars increased 41% during the year ended December 31, 1995
compared to 47% for the year ended December 31, 1994. Gross margin amounts
equaled 39% of revenue in 1995, 1994 and 1993.
Selling, general and administrative expenses were approximately $171 million
during 1995 compared to $122 million in 1994 and $88 million in 1993. Selling,
general and administrative expenses as a percentage of revenues were 27% in 1995
and 1994 and 29% in 1993. The percentage decline from 1993 was attributable to
revenue growth coupled with the Company's continued cost containment.
Amortization of intangible assets increased from 1993 to 1995 due to the
acquisitions in each of those years of additional personnel services operations.
Interest income/expense for the years ended December 31, 1995 and 1994
decreased 130% and 61%, respectively, over the comparable prior periods due to
an increase in interest income from an increase in cash and cash equivalents and
a decrease in interest expense due to a reduction of outstanding indebtedness.
The provision for income taxes was 42% in 1995 and 1994 and 46% in 1993. The
decrease in 1994 is the result of a smaller percentage of non-deductible
intangible expenses.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during the past three years is the net
effect of funds generated by operations and the funds used for the personnel
services acquisitions, capital expenditures, principal payments on outstanding
notes payable, and the securities repurchase program.
In November 1994, the Company issued 633,555 shares of its common stock. The
net proceeds from the sale of shares were approximately $12.6 million. The
Company used the proceeds for repayment of the borrowings under the Company's
revolving credit agreement.
On December 10, 1993, substantially all of the Company's outstanding
convertible subordinated debentures were converted into common stock of the
Company. See Note F in the Notes to Consolidated Financial Statements.
The Company's working capital requirements consist primarily of the
financing of accounts receivable. While there can be no assurances in this
regard, the Company expects that internally generated cash plus the bank
revolving line of credit will be sufficient to support the working capital needs
of the Company's offices, the Company's fixed payments and other long-term
obligations.
6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
DECEMBER 31,
------------------
1995 1994
-------- --------
ASSETS:
Cash and cash equivalents........................................... $ 41,346 $ 2,638
Accounts receivable, less allowances of $3,067 and $2,600........... 84,955 60,025
Other current assets................................................ 7,349 5,040
-------- --------
Total current assets.............................................. 133,650 67,703
Intangible assets, less accumulated amortization of $33,071 and
$28,243............................................................ 155,441 152,824
Other assets........................................................ 12,049 7,234
-------- --------
Total assets...................................................... $301,140 $227,761
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses............................... $ 12,631 $ 7,232
Accrued payroll costs............................................... 33,853 19,133
Income taxes payable................................................ 5,157 2,181
Current portion of notes payable and other indebtedness............. 4,239 1,081
-------- --------
Total current liabilities......................................... 55,880 29,627
Notes payable and other indebtedness, less current portion.......... 1,486 3,133
Deferred income taxes............................................... 15,844 18,006
-------- --------
Total liabilities................................................. 73,210 50,766
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value, 100,000,000 shares authorized,
28,892,311 and 28,152,201 shares issued and outstanding in 1995 and
1994, respectively................................................. 29 28
Capital surplus..................................................... 99,797 82,655
Deferred compensation............................................... (9,642) (5,533)
Accumulated translation adjustments................................. 51 (541)
Retained earnings................................................... 137,695 100,386
-------- --------
Total stockholders' equity........................................ 227,930 176,995
-------- --------
Total liabilities and stockholders' equity........................ $301,140 $227,761
-------- --------
-------- --------
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
7
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
Net service revenues............................................................ $628,526 $446,328 $306,166
Direct costs of services, consisting of payroll, payroll taxes and insurance
costs for temporary employees.................................................. 384,449 273,327 188,292
-------- -------- --------
Gross margin.................................................................... 244,077 173,001 117,874
Selling, general and administrative expenses.................................... 170,684 121,640 88,074
Amortization of intangible assets............................................... 4,767 4,584 4,251
Interest (income) expense....................................................... (463) 1,570 3,992
-------- -------- --------
Income before income taxes...................................................... 69,089 45,207 21,557
Provision for income taxes...................................................... 28,791 19,090 9,834
-------- -------- --------
Net income...................................................................... $ 40,298 $ 26,117 $ 11,723
-------- -------- --------
-------- -------- --------
Income per share................................................................ $ 1.36 $ .92 $ .46
-------- -------- --------
-------- -------- --------
1994 and 1993 per share amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
8
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
YEARS ENDED DECEMBER 31,
--------------------------
1995 1994 1993
-------- ------- -------
COMMON STOCK:
Balance at beginning of period................................................ $ 28 $26,837 $23,642
Issuance of common stock -- par value......................................... -- 1 --
Issuances of restricted stock, net -- par value............................... -- 334 82
Conversion of debentures -- par value......................................... -- -- 2,040
Repurchases of common stock -- par value...................................... -- (59) (119)
Exercises of stock options -- par value....................................... 1 213 1,086
Issuance of common stock for acquisitions -- par value........................ -- -- 106
Change in par value........................................................... -- (27,298) --
-------- ------- -------
Balance at end of period.................................................... $ 29 $ 28 $26,837
-------- ------- -------
-------- ------- -------
CAPITAL SURPLUS:
Balance at beginning of period................................................ $ 82,655 $33,113 $ 3,897
Issuance of common stock -- excess over par value............................. -- 12,589 --
Issuances of restricted stock, net -- excess over par value................... 6,887 4,949 825
Conversion of debentures -- excess over par value............................. -- -- 20,185
Exercises of stock options -- excess over par value........................... 3,818 2,162 4,029
Tax benefits from exercises of stock options and restricted stock releases.... 6,437 2,544 2,823
Issuance of common stock for acquisitions -- excess over par value............ -- -- 1,354
Change in par value........................................................... -- 27,298 --
-------- ------- -------
Balance at end of period.................................................... $ 99,797 $82,655 $33,113
-------- ------- -------
-------- ------- -------
DEFERRED COMPENSATION:
Balance at beginning of period................................................ $ (5,533) $(2,113) $(2,208)
Issuances of restricted stock, net............................................ (6,887) (5,283) (907)
Amortization.................................................................. 2,778 1,863 1,002
-------- ------- -------
Balance at end of period.................................................... $ (9,642) $(5,533) $(2,113)
-------- ------- -------
-------- ------- -------
ACCUMULATED TRANSLATION ADJUSTMENTS:
Balance at beginning of period................................................ $ (541) $ (589) $ (257)
Translation adjustments....................................................... 592 48 (332)
-------- ------- -------
Balance at end of period.................................................... $ 51 $ (541) $ (589)
-------- ------- -------
-------- ------- -------
RETAINED EARNINGS:
Balance at beginning of period................................................ $100,386 $76,354 $65,898
Repurchases of common stock -- excess over par value.......................... (2,989) (2,085) (1,267)
Net income.................................................................... 40,298 26,117 11,723
-------- ------- -------
Balance at end of period.................................................... $137,695 $100,386 $76,354
-------- ------- -------
-------- ------- -------
1994 and 1993 amounts have been restated to retroactively reflect the
two-for-one stock split effected in the form of a stock dividend in August 1994.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
9
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEARS ENDED DECEMBER 31,
------------------------------
1995 1994 1993
--------- --------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 40,298 $ 26,117 $ 11,723
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of intangible assets......................................... 4,767 4,584 4,251
Depreciation expense...................................................... 3,564 2,673 2,383
Provision for deferred income taxes....................................... (683) 1,096 1,136
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable........................................... (24,289) (18,292) (10,481)
Increase in accounts payable, accrued expenses and accrued payroll
costs.................................................................... 15,106 5,795 4,158
Increase in income taxes payable.......................................... 2,976 389 2,553
Change in other assets, net of change in other liabilities................ 432 2,997 (806)
--------- --------- --------
Total adjustments........................................................... 1,873 (758) 3,194
--------- --------- --------
Net cash and cash equivalents provided by operating activities................ 42,171 25,359 14,917
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisitions, net of cash acquired............................................ (1,024) (4,406) (11,141)
Capital expenditures.......................................................... (8,417) (4,768) (2,340)
--------- --------- --------
Net cash and cash equivalents used in investing activities.................... (9,441) (9,174) (13,481)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net................................... -- 12,589 --
Borrowings under credit agreement............................................. -- 104,900 138,900
Repayments under credit agreement............................................. -- (135,200) (144,200)
Repurchases of convertible debentures......................................... -- -- (305)
Principal payments on notes payable and other indebtedness.................... (1,289) (384) (1,170)
Proceeds and tax benefits from exercise of stock options and restricted stock
releases..................................................................... 10,256 4,919 7,938
Repurchases of common stock and common stock equivalents...................... (2,989) (2,144) (1,386)
--------- --------- --------
Net cash and cash equivalents provided by (used in) financing activities...... 5,978 (15,320) (223)
--------- --------- --------
Net increase in cash and cash equivalents..................................... 38,708 865 1,213
Cash and cash equivalents at beginning of period.............................. 2,638 1,773 560
--------- --------- --------
Cash and cash equivalents at end of period.................................... $ 41,346 $ 2,638 $ 1,773
--------- --------- --------
--------- --------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest...................................................................... $ 405 $ 1,420 $ 4,256
Income taxes.................................................................. $ 21,853 $ 14,609 $ 4,568
Acquisitions:
Fair value of assets acquired --
Intangible assets........................................................... $ 4,697 $ 5,452 $ 12,650
Other....................................................................... 753 1,694 2,506
Liabilities assumed --
Notes payable and contracts................................................. (2,800) (2,158) (101)
Other....................................................................... (1,626) (582) (2,454)
Common stock issued........................................................... -- -- (1,460)
--------- --------- --------
Cash paid, net of cash acquired............................................... $ 1,024 $ 4,406 $ 11,141
--------- --------- --------
--------- --------- --------
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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- and RHI Consulting-Registered Trademark-. The
Company, through its Accountemps and Robert Half 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 and RHI Consulting provides contract information
technology professionals. 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 1994 and 1993 financial statements to
conform to the 1995 presentation.
REVENUE RECOGNITION. Temporary services revenues are recognized when the
services are rendered by the Company's temporary employees. Permanent placement
revenues are recognized when employment candidates accept offers of permanent
employment. Allowances 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. The Company considers all highly liquid
investments with an original maturity of three months or less as cash
equivalents.
INTANGIBLE ASSETS. Intangible assets represent the cost of acquired
companies in excess of the fair market value of their net tangible assets at
acquisition date, and are being amortized on a straight-line basis over a period
of 40 years. 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 exists at December 31, 1995.
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.
FOREIGN CURRENCY TRANSLATION. The results of operations of the Company's
foreign subsidiaries are translated at the monthly average exchange rates
prevailing during the period. The financial position of the Company's foreign
subsidiaries 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 -- ACQUISITIONS
In July 1986, the Company acquired all of the outstanding stock of Robert
Half Incorporated, the franchisor of the Accountemps and Robert Half operations.
Subsequently, in 61 separate transactions the Company acquired all of the
outstanding stock of certain corporations operating Accountemps and
11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- ACQUISITIONS (CONTINUED)
Robert Half franchised offices in the United States, the United Kingdom and
Canada as well as other personnel services businesses. The Company has paid
approximately $196 million in cash, stock, notes and other indebtedness in these
acquisitions, excluding transaction costs and cash acquired.
These acquisitions were accounted for as purchases, and the excess of cost
over the fair market value of the net tangible assets acquired is being
amortized over 40 years using the straight-line method. Results of operations of
the acquired companies are included in the Consolidated Statements of Income
from the dates of acquisition. The acquisitions made during 1995 and 1994 had no
material pro forma impact on the results of operations.
NOTE C -- NOTES PAYABLE AND OTHER INDEBTEDNESS
The Company issued promissory notes as well as other forms of indebtedness
in connection with certain acquisitions. These are due in varying installments,
carry varying interest rates and in aggregate amounted to $5,725,000 at December
31, 1995 and $4,214,000 at December 31, 1994. At December 31, 1995, $1,350,000
of the notes was secured by a standby letter of credit (see Note D). The
following table shows the schedule of maturities for notes payable and other
indebtedness at December 31, 1995 (in thousands):
1996....................................................................... $4,239
1997....................................................................... 764
1998....................................................................... 464
1999....................................................................... 15
2000....................................................................... 16
Thereafter................................................................. 227
------
$5,725
------
------
At December 31, 1995, all of the notes carried fixed rates of interest
ranging from 4.1% to 13.3%. The weighted average interest rate for the above was
approximately 7.3%, 8.2% and 11.1% for the years ended December 31, 1995, 1994
and 1993, respectively.
NOTE D -- BANK LOAN (REVOLVING CREDIT)
The bank loan is an unsecured credit facility which provides a line of
credit of up to $80,000,000, which is available to fund the Company's general
business and working capital needs, including acquisitions and the purchase of
the Company's common stock, and to cover the issuance of debt support standby
letters of credit up to $15,000,000.
As of December 31, 1995 and 1994, the Company had no borrowings on the line
of credit outstanding and had used $3,408,000 and $3,358,000 in debt support
standby letters of credit, respectively. There is a commitment fee on the unused
portion of the entire credit facility of .25%. The loan is subject to certain
financial covenants which also affect the interest rates charged.
The credit facility has the following scheduled reduction in availability
(in thousands):
1996....................................................................... $ 5,000
1997....................................................................... $15,000
1998....................................................................... $15,000
1999....................................................................... $15,000
2000....................................................................... $15,000
2001....................................................................... $15,000
The final maturity date for the credit facility is August 31, 2001.
12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE E -- CURRENT LIABILITIES
Other current liabilities included in accrued payroll costs consist of the
following at December 31, 1995 and 1994 (in thousands):
1995 1994
--------- ---------
Accrued payroll and bonus...................................................... $ 15,856 $ 9,960
Accrued workers compensation and other benefits................................ 11,182 3,731
Accrued payroll taxes.......................................................... 6,815 5,442
--------- ---------
$ 33,853 $ 19,133
--------- ---------
--------- ---------
NOTE F -- CONVERTIBLE SUBORDINATED DEBENTURES
On August 6, 1987, the Company issued $74,750,000 of 7.25% Convertible
Subordinated Debentures (the "Convertible Debentures"). Prior to 1993, all but
$22,745,000 of the Convertible Debentures were repurchased by the Company
pursuant to its repurchase program. The Convertible Debentures were unsecured
obligations of the Company with an original maturity date of August 1, 2012.
Interest was payable semi-annually as of February 1 and August 1 of each year to
the registered holders as of the preceding January 15 and July 15, respectively.
The Convertible Debentures were redeemable at the Company's option at any time
on or after August 1, 1990, at declining redemption prices.
In December 1993, the Company called for redemption all of its then
outstanding Convertible Debentures. Holders of $22,440,000 in principal amount
elected to convert their debentures into 2.04 million shares of common stock at
the conversion price of $11.00 per share. The remaining $305,000 in principal
amount of Convertible Debentures was redeemed at 102.9% of the principal amount
plus accrued interest.
NOTE G -- STOCKHOLDERS' EQUITY
On June 27, 1994, the stockholders of the Company voted to amend the
certificate of incorporation to increase the number of authorized shares of the
Company's common stock from 30,000,000 to 100,000,000 shares and the number of
authorized shares of the Company's preferred stock from 500,000 to 5,000,000.
The stockholders of the Company also authorized a reduction in par value from $1
per share to $.001 per share on both classes of shares.
In August 1994, the Company effected a two-for-one stock split in the form
of a stock dividend. 1994 and 1993 share and per share amounts have been
restated to retroactively reflect the two-for-one stock split.
In November 1994, the Company issued 633,555 shares of its common stock at a
price of $21.25 per share. The net proceeds from the sale of shares (after
deducting issuance costs of approximately $355,000 and a 4% underwriter's
discount) were approximately $12.6 million.
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES
The provisions for income taxes for the years ended December 31, 1995, 1994 and
1993 consisted of the following (in thousands):
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
------- ------ ------
Current:
Federal.................................................................. $22,061 $14,072 $6,995
State.................................................................... 4,728 3,155 1,604
Foreign.................................................................. 1,835 767 99
Deferred -- principally domestic........................................... 167 1,096 1,136
------- ------ ------
$28,791 $19,090 $9,834
------- ------ ------
------- ------ ------
The income taxes shown above varied from the statutory federal income tax
rates for these periods as follows:
YEARS ENDED DECEMBER
31,
-----------------------
1995 1994 1993
----- ----- -----
Federal U.S. income tax rate...................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit.... 4.5 4.7 5.5
Amortization of intangible assets................. 1.5 2.0 4.1
Other, net........................................ .7 .5 1.0
----- ----- -----
Effective tax rate................................ 41.7% 42.2% 45.6%
----- ----- -----
----- ----- -----
The deferred portion of the tax provisions consisted of the following (in
thousands):
YEARS ENDED DECEMBER 31,
------------------------
1995 1994 1993
------ ------ ------
Amortization of franchise rights.................. $1,650 $1,629 $1,484
Accrued expenses, deducted for tax when paid...... (2,068) (524) (137)
Other, net........................................ (265) (9) (211)
------ ------ ------
$ (683) $1,096 $1,136
------ ------ ------
------ ------ ------
The net deferred income tax liability shown on the balance sheet is
comprised of the following (in thousands):
DECEMBER 31,
-------------------
1995 1994
-------- --------
Deferred income tax assets........................ $(1,304) $ (883)
Deferred income tax liabilities................... 17,148 18,889
-------- --------
$15,844 $18,006
-------- --------
-------- --------
No valuation allowances against deferred tax assets were required for the
years ended December 31, 1995 and 1994.
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES (CONTINUED)
The components of the net deferred income tax liability at December 31, 1995
and 1994, were as follows (in thousands):
DECEMBER 31,
-------------------
1995 1994
-------- --------
Amortization of intangible assets................. $16,216 $17,427
Foreign taxes..................................... 200 775
Other............................................. (572) (196)
-------- --------
$15,844 $18,006
-------- --------
-------- --------
NOTE I -- COMMITMENTS
Rental expense, primarily for office premises, amounted to $11,027,000,
$9,183,000 and $8,457,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. The approximate minimum rental commitments for 1996 and thereafter
under non-cancelable leases in effect at December 31, 1995, are as follows (in
thousands):
1996....................................................................... $10,547
1997....................................................................... 9,536
1998....................................................................... 8,145
1999....................................................................... 6,295
2000....................................................................... 3,274
Thereafter................................................................. 5,209
NOTE J -- STOCK PLANS
Under various stock plans, officers, employees and outside directors may
receive grants of restricted stock or options to purchase common stock. Grants
are made at the discretion of the Compensation Committee of the Board of
Directors. Grants vest between four to seven years.
Options granted under the plans have exercise prices ranging from 85% to
100% of the fair market value of the Company's common stock at the date of
grant, consist of both incentive stock options and nonstatutory stock options
under the Internal Revenue Code, and generally have a term of ten years.
Recipients of restricted stock do not pay any cash consideration to the
Company for the shares, have the right to vote all shares subject to such grant,
and receive all dividends with respect to such shares, whether or not the shares
have vested.
As of December 31, 1995, the total number of available shares to grant under
the plans (consisting of either restricted stock or options) was 559,714.
15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE J -- STOCK PLANS (CONTINUED)
The following table reflects activity under all stock plans from January 1,
1993 through December 31, 1995, and the exercise prices:
STOCK OPTION PLANS
--------------------------
RESTRICTED NUMBER OF EXERCISE PRICE
STOCK PLANS SHARES PER SHARE
----------- ---------- --------------
Outstanding, January 1, 1993......................................................... 466,300 2,921,808 $ 3.55 - 9.42
Granted............................................................................ 142,938 1,415,942 $ 6.17 - 12.63
Exercised.......................................................................... -- (1,085,032) $ 3.76 - 8.07
Restrictions lapsed................................................................ (99,959) -- --
Forfeited.......................................................................... (57,678) (310,218) $ 4.31 - 10.73
----------- ---------- --------------
Outstanding, December 31, 1993....................................................... 451,601 2,942,500 $ 3.55 - 12.63
Granted............................................................................ 344,814 836,884 $15.00 - 24.00
Exercised.......................................................................... -- (463,515) $ 4.31 - 11.50
Restrictions lapsed................................................................ (156,100) -- --
Forfeited.......................................................................... (13,647) (182,808) $ 4.31 - 12.63
----------- ---------- --------------
Outstanding, December 31, 1994....................................................... 626,668 3,133,061 $ 3.55 - 24.00
Granted............................................................................ 248,392 690,631 $21.00 - 41.875
$ 19.625 -
Exercised.......................................................................... -- (620,407) 41.875
Restrictions lapsed................................................................ (187,771) -- --
Forfeited.......................................................................... (14,282) (180,669) $4.305 - 41.875
----------- ---------- --------------
Outstanding, December 31, 1995....................................................... 673,007 3,022,616 $3.55 - 41.875
----------- ---------- --------------
----------- ---------- --------------
As of December 31, 1995, an aggregate of 1,208,798 options to purchase
common stock were vested.
NOTE K -- PREFERRED SHARE PURCHASE RIGHTS
Pursuant to the Company's stockholder rights agreement, each share of common
stock carries one right to purchase one two-hundredth of a share of preferred
stock. The rights become exercisable in certain limited circumstances involving
a potential business combination transaction or an acquisition of shares of the
Company and are exercisable at a price of $32.50 per right, subject to
adjustment. Following certain other events after the rights become exercisable,
each right entitles its holder to purchase for $32.50 an amount of common stock
of the Company, or, in certain circumstances, securities of the acquiror, having
a then-current market value of twice the exercise price of the right. The rights
are redeemable and may be amended at the Company's option before they become
exercisable. Until a right is exercised, the holder of a right has no rights as
a stockholder of the Company. The rights expire on July 23, 2000.
NOTE L -- INCOME PER SHARE
Income per fully diluted share has been computed using the weighted average
number of shares of fully diluted common stock and common stock equivalents
outstanding during each period (29,708,000, 28,484,000 and 25,260,000 shares for
the years ending December 31, 1995, 1994 and 1993, respectively). An assumed
conversion of the Convertible Debentures was not dilutive to income per share in
1993 (see Note E).
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE M -- QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tabulation shows certain quarterly financial data for 1995 and
1994 (in thousands, except per share amounts):
QUARTER
-------------------------------------
1995 1 2 3 4 YEAR
------- -------- -------- -------- --------
Net service revenues........................................ $144,739 $148,570 $159,303 $175,914 $628,526
Gross margin................................................ 56,039 57,732 62,196 68,110 244,077
Income before income taxes.................................. 15,502 16,053 17,865 19,669 69,089
Net income.................................................. 9,005 9,350 10,463 11,480 40,298
Net income per share........................................ .31 .32 .35 .38 1.36
QUARTER
-------------------------------------
1994 1 2 3 4 YEAR
------- -------- -------- -------- --------
Net service revenues........................................ $99,896 $106,514 $114,903 $125,015 $446,328
Gross margin................................................ 38,624 41,369 44,644 48,364 173,001
Income before income taxes.................................. 9,826 10,848 11,666 12,867 45,207
Net income.................................................. 5,604 6,273 6,742 7,498 26,117
Net income per share........................................ .20 .22 .24 .26 .92
NOTE N -- SEGMENT REPORTING
Information about the Company's operations in different geographic locations
for each of the three years in the period ended December 31, 1995, is shown
below. The Company's areas of operations outside of the United States include
Canada, the United Kingdom, Belgium, France and the Netherlands. Revenues
represent total net revenues from the respective geographic areas. Operating
income is net revenues less operating costs and expenses pertaining to specific
geographic areas. Foreign operating income reflects charges for U.S. management
fees and amortization of intangible assets of $992,000, $956,000 and $917,000
for the years ended December 31, 1995, 1994 and 1993, respectively. Domestic
operating income reflects charges for amortization of intangibles of $4,307,000,
$4,137,000 and $3,841,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. Identifiable assets are those assets used in the geographic areas
and are after elimination of intercompany balances.
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS)
Revenues
Domestic........................................ $564,564 $404,852 $280,266
Foreign......................................... 63,962 41,476 25,900
-------- -------- --------
$628,526 $446,328 $306,166
-------- -------- --------
-------- -------- --------
Operating Income
Domestic........................................ $ 63,861 $ 44,700 $ 26,294
Foreign......................................... 4,765 2,077 (745)
-------- -------- --------
$ 68,626 $ 46,777 $ 25,549
-------- -------- --------
-------- -------- --------
Assets
Domestic........................................ $267,487 $200,329 $180,778
Foreign......................................... 33,653 27,432 23,820
-------- -------- --------
$301,140 $227,761 $204,598
-------- -------- --------
-------- -------- --------
17
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS
OF ROBERT HALF INTERNATIONAL INC.:
We have audited the accompanying consolidated statements of financial
position of Robert Half International Inc. (a Delaware corporation) and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Robert Half International
Inc. and subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
January 26, 1996
18
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10 through 13 of Part III is incorporated
by reference from the registrant's Proxy Statement, under the captions
"NOMINATION AND ELECTION OF DIRECTORS," "BENEFICIAL STOCK OWNERSHIP,"
"COMPENSATION OF DIRECTORS," "COMPENSATION OF EXECUTIVE OFFICERS" AND
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND CERTAIN
TRANSACTIONS," which Proxy Statement will be mailed to stockholders in
connection with the registrant's annual meeting of stockholders which is
scheduled to be held in May 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company and its
subsidiaries are included in Item 8 of this report:
Consolidated statements of financial position at December 31, 1995 and
1994.
Consolidated statements of income for the years ended December 31, 1995,
1994 and 1993.
Consolidated statements of stockholders' equity for the years ended
December 31, 1995, 1994 and 1993.
Consolidated statements of cash flows for the years ended December 31,
1995, 1994 and 1993.
Notes to consolidated financial statements.
Report of independent public accountants.
Selected quarterly financial data for the years ended December 31, 1995 and
1994 are set forth in Note M - Quarterly Financial Data (Unaudited) included
in Item 8 of this report.
2. FINANCIAL STATEMENT SCHEDULES
Schedules I through V have been omitted as they are not applicable.
3. EXHIBITS
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit
3.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1994.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
19
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and
Manufacturers Hanover Trust Company of California, incorporated by
reference to (i) Exhibit 1 to the Registrant's Registration Statement on
Form 8-A for its Preferred Share Purchase Rights, which Registration
Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A
Amendment No. 2 filed on December 2, 1993.
10.1 Credit Agreement dated as of November 1, 1993, among the Registrant,
NationsBank of North Carolina, N.A. and Bank of America National Trust and
Savings Association. The Second Amendment to the Credit Agreement is filed
with this Annual Report on Form 10-K for the fiscal year ended December 31,
1995. The original Credit Agreement and the First Amendment thereto are
incorporated by reference to Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1993 and
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995.
10.2 Reorganization and Distribution Agreement between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.9 to
Registrant's Registration Statement on Form S-1 (No. 33-15171).
10.3 Agreement of Assignment and Assumption of Rights and Obligations under the
Indenture between the Registrant and BF Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
10.4 Assumption of Obligations and Liabilities between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987.
10.5 Pledge and Security Agreement between the Registrant and BF Enterprises,
Inc., incorporated by reference to Exhibit 10.10 to Registrant's
Registration Statement on Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.11 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
*10.7 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Tenth Amendment to the Employment Agreement
is filed with this Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. The original Employment Agreement and the first nine
amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1993, (viii) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 and (ix) Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995.
*10.8 Key Executive Retirement Plan - Level II, incorporated by reference to
Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
20
EXHIBIT
NO. EXHIBIT
- ------- ---------------------------------------------------------------------------
*10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant
and Harold M. Messmer, Jr. The Eighth Amendment to the Retirement Agreement
is filed with this Annual Report on form 10-K for the fiscal year ended
December 31, 1995. The original Retirement Agreement and the first seven
amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1993, (v) Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 and (vi) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1995.
*10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988 and Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit
10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986 and Exhibit 10.6 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.12 Outside Directors' Option Plan.
*10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1994.
*10.14 StockPlus Plan, as amended.
*10.15 1993 Incentive Plan.
*10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
*10.17 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.17
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
*10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for Directors of the Registrant,
incorporated by reference to (i) Exhibit 10.27 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii)
Exhibit 10.19 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993.
*10.20 Form of Indemnification Agreement for Executive Officers of Registrant,
incorporated by reference to Exhibit 10.28 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.21 Senior Executive Retirement Plan.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
27 Financial Data Schedule.
<FN>
- ------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during the
fiscal quarter ending December 31, 1995.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
Date: March 25, 1996 By: /S/ M. KEITH WADDELL
-----------------------------------
M. Keith Waddell
Senior Vice President, Chief
Financial
Officer and Treasurer
(Principal Financial Officer)
22
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 25, 1996 By: /S/ HAROLD M. MESSMER, JR.
------------------------------------------
Harold M. Messmer, Jr.
Chairman of the Board, President, Chief
Executive Officer,
and a Director
(Principal Executive Officer)
Date: March 25, 1996 By: /S/ ANDREW S. BERWICK, JR.
------------------------------------------
Andrew S. Berwick, Jr., Director
Date: March 25, 1996 By: /S/ FREDERICK P. FURTH
------------------------------------------
Frederick P. Furth, Director
Date: March 25, 1996 By: /S/ EDWARD W. GIBBONS
------------------------------------------
Edward W. Gibbons, Director
Date: March 25, 1996 By: /S/ FREDERICK A. RICHMAN
------------------------------------------
Frederick A. Richman, Director
Date: March 25, 1996 By: /S/ THOMAS J. RYAN
------------------------------------------
Thomas J. Ryan, Director
Date: March 25, 1996 By: /S/ J. STEPHEN SCHAUB
------------------------------------------
J. Stephen Schaub, Director
Date: March 25, 1996 By: /S/ M. KEITH WADDELL
------------------------------------------
M. Keith Waddell
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
Date: March 25, 1996 By: /S/ BARBARA J. FORSBERG
------------------------------------------
Barbara J. Forsberg
Vice President and Controller
(Principal Accounting Officer)
23
INDEX TO EXHIBITS
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit
3.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1994.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.1 Indenture dated as of October 1, 1972, as amended, between IDS Realty Trust
and First National Bank of Minneapolis, incorporated by reference to
Exhibits 6(t) and 6(v) to the Form S-14 Registration Statement of the
Registrant (formerly known as Boothe Interim Corporation) filed with the
Securities and Exchange Commission on December 31, 1979.
4.2 Restated Certificate of Incorporation of Registrant (filed as Exhibit 3.1).
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and
Manufacturers Hanover Trust Company of California, incorporated by
reference to (i) Exhibit 1 to the Registrant's Registration Statement on
Form 8-A for its Preferred Share Purchase Rights, which Registration
Statement was filed with the Commission on July 30, 1990, (ii) Exhibit 19.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A
Amendment No. 2 filed on December 2, 1993.
10.1 Credit Agreement dated as of November 1, 1993, among the Registrant,
NationsBank of North Carolina, N.A. and Bank of America National Trust and
Savings Association. The Second Amendment to the Credit Agreement is filed
with this Annual Report on Form 10-K for the fiscal year ended December 31,
1995. The original Credit Agreement and the First Amendment thereto are
incorporated by reference to Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1993 and
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995.
10.2 Reorganization and Distribution Agreement between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.9 to
Registrant's Registration Statement on Form S-1 (No. 33-15171).
10.3 Agreement of Assignment and Assumption of Rights and Obligations under the
Indenture between the Registrant and BF Enterprises, Inc., incorporated by
reference to Exhibit 10.10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
10.4 Assumption of Obligations and Liabilities between the Registrant and BF
Enterprises, Inc., incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987.
10.5 Pledge and Security Agreement between the Registrant and BF Enterprises,
Inc., incorporated by reference to Exhibit 10.10 to Registrant's
Registration Statement on Form S-1 (No. 33-15171).
10.6 Tax Sharing Agreement between the Registrant and BF Enterprises, Inc.,
incorporated by reference to Exhibit 10.11 to Registrant's Registration
Statement on Form S-1 (No. 33-15171).
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
*10.7 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Tenth Amendment to the Employment Agreement
is filed with this Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. The original Employment Agreement and the first nine
amendments thereto are incorporated by reference to (i) Exhibit 10.(c) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, (ii) Exhibit 10.2(b) to Registrant's Registration
Statement on Form S-1 (No. 33-15171), (iii) Exhibit 10.2(c) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, (iv) Exhibit 10.2(d) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, (v) Exhibit 28.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1990, (vi) Exhibit 10.8 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, (vii) Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1993, (viii) Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 and (ix) Exhibit 10.1
to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995.
*10.8 Key Executive Retirement Plan - Level II, incorporated by reference to
Exhibit 10.(f) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985 and Exhibit 19.2 to Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1991.
*10.9 Key Executive Retirement Plan - Level II Agreement between the Registrant
and Harold M. Messmer, Jr. The Eighth Amendment to the Retirement Agreement
is filed with this Annual Report on form 10-K for the fiscal year ended
December 31, 1995. The original Retirement Agreement and the first seven
amendments thereto are incorporated by reference to (i) Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1988, (ii) Exhibit 19.3 to Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1991, (iii) Exhibit 10.10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, (iv) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1993, (v) Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 and (vi) Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1995.
*10.10 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988 and Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.11 Non-Employee Directors' Option Plan, incorporated by reference to Exhibit
10.(j) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986 and Exhibit 10.6 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1994.
*10.12 Outside Directors' Option Plan.
*10.13 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1994.
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- --------------------------------------------------------------------------- ------
*10.14 StockPlus Plan, as amended.
*10.15 1993 Incentive Plan.
*10.16 Deferred Compensation Plan, incorporated by reference to Exhibit 10.24 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
*10.17 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.17
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
*10.18 Form of Severance Agreement, incorporated by reference to (i) Exhibit 10.26
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and (ii) Exhibit 19.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1990.
*10.19 Form of Indemnification Agreement for Directors of the Registrant,
incorporated by reference to (i) Exhibit 10.27 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989 and (ii)
Exhibit 10.19 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993.
*10.20 Form of Indemnification Agreement for Executive Officers of Registrant,
incorporated by reference to Exhibit 10.28 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989.
*10.21 Senior Executive Retirement Plan.
11 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23 Accountants' Consent.
27 Financial Data Schedule.
<FN>
- ------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14(c) of Form 10-K.