SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ROBERT HALF INTERNATIONAL INC.
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(Name of Registrant as Specified In Its Charter)
ROBERT HALF INTERNATIONAL INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD
WEDNESDAY, MAY 7, 1997
9:00 A.M.
To the Stockholders:
The annual meeting of stockholders of ROBERT HALF INTERNATIONAL INC. (the
"Company") will be held at 9:00 a.m. on Wednesday, May 7, 1997 at The Westin
Hotel--San Francisco Airport, 1 Old Bayshore Highway, Millbrae, California,
94030. The meeting will be held for the following purposes:
1. To elect two directors.
2. To approve an amendment to the Company's Restated Certificate of
Incorporation that would increase the number of authorized shares of Common
Stock.
3. To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
Only stockholders of record at the close of business on March 17, 1997 are
entitled to notice of, and to vote at, the meeting and any adjournment of the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
STEVEN KAREL
SECRETARY
Menlo Park, California
March 26, 1997
--IMPORTANT--
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE. IF
YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
THANK YOU FOR ACTING PROMPTLY.
ROBERT HALF INTERNATIONAL INC.
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PROXY STATEMENT
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INTRODUCTION
The enclosed proxy is solicited on behalf of the present Board of Directors
(sometimes referred to as the "Board") of Robert Half International Inc., a
Delaware corporation (the "Company"), the principal executive offices of which
are located at 2884 Sand Hill Road, Menlo Park, California 94025. The
approximate date on which this proxy statement and the enclosed proxy are being
mailed to the Company's stockholders is March 26, 1997. The proxy is solicited
for use at the annual meeting of stockholders (the "Meeting") to be held at 9:00
a.m. on Wednesday, May 7, 1997, at The Westin Hotel--San Francisco Airport, 1
Old Bayshore Highway, Millbrae, California, 94030. Only stockholders of record
on March 17, 1997 will be entitled to notice of, and to vote at, the Meeting and
any adjournment of the Meeting. Each share is entitled to one vote. At the close
of business on March 17, 1997 the Company had outstanding and entitled to vote
60,032,857 shares of its common stock, $.001 par value ("Common Stock").
A stockholder giving a proxy in the form accompanying this proxy statement
has the power to revoke the proxy prior to its exercise. A proxy can be revoked
by an instrument of revocation delivered prior to the Meeting to the Secretary
of the Company, by a duly executed proxy bearing a date later than the date of
the proxy being revoked, or at the Meeting if the stockholder is present and
elects to vote in person. Solicitation of proxies may be made by directors,
officers or employees of the Company by telephone or personal interview as well
as by mail. Costs of solicitation will be borne by the Company.
An automated system administered by the Company's transfer agent will
tabulate votes cast at the Meeting. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, and
each is tabulated separately. Abstentions are counted in tabulations of the
votes cast on proposals presented to stockholders or with respect to election of
directors, whereas broker non-votes are not counted for purposes of determining
whether a proposal has been approved or a nominee has been elected.
The Company effected two-for-one stock splits in the form of stock dividends
in August 1994 and June 1996. All share and price per share amounts in this
Proxy Statement have been restated, as appropriate, to reflect the stock splits.
NOMINATION AND ELECTION OF DIRECTORS
NOMINEES OF THE PRESENT BOARD OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors consisting of
not less than six nor more than eleven directors. The size of the Board of
Directors is presently set at seven and there are no vacancies.
The Board of Directors is divided into three classes serving staggered three
year terms. Currently, there are three directors in Class II, whose terms expire
in 1999, two directors in Class III, whose terms expire in 1998, and two
directors in Class I, whose terms expire at the 1997 Annual Meeting. Each
Director holds office until the annual meeting in the year in which his term
expires and until his successor is elected and qualified.
The current members of Class I, whose terms expire at the Annual Meeting,
are Andrew S. Berwick, Jr. and Frederick P. Furth, both of whom are nominees.
1
Proxies cannot be voted for more than two persons. Directors are elected by
a plurality of the votes of the shares present in person or represented by proxy
at the Meeting. Proxies solicited by the Board will be voted "FOR" the election
of Messrs. Berwick and Furth unless stockholders specify in their proxies to the
contrary. Although the Board does not expect any nominee to become unavailable
to serve as a director for any reason, should that occur before the Meeting,
proxies will be voted for the balance of those named and such substitute nominee
as may be selected by the Board.
The following table lists the name of each current member of the Board of
Directors, his age at January 31, 1997, the Class of which he is a member and
the period during which he has served as a director.
CURRENT DIRECTOR
NAME AGE CLASS SINCE
- ---------------------------------------------------------------------------------------- ---- ------- -----------
Andrew S. Berwick, Jr. ................................................................. 63 I 1981
Frederick P. Furth...................................................................... 62 I 1983
Edward W. Gibbons....................................................................... 60 III 1988
Harold M. Messmer, Jr. ................................................................. 50 III 1982
Frederick A. Richman.................................................................... 51 II 1994
Thomas J. Ryan.......................................................................... 72 II 1987
J. Stephen Schaub....................................................................... 56 II 1989
Mr. Berwick has been President of Berwick-Pacific Corporation, a real estate
development company, for more than the past five years. He is Chairman Emeritus
of California Healthcare System.
Mr. Furth has been senior partner of the law firm of Furth, Fahrner & Mason
for more than the past five years. He is the Proprietor and Chairman of the
Board of Chalk Hill Winery and Chairman of the Board of the Furth Family
Foundation.
Mr. Gibbons has been a partner in Gibbons, Goodwin, van Amerongen, a private
merchant banking firm, since its founding in 1969. Mr. Gibbons is also currently
a director of Foodmaker, Inc.
Mr. Messmer has been Chairman of the Board since 1988, Chief Executive
Officer since 1987 and President since 1985. Mr. Messmer is a director of
Airborne Freight Corporation, Health Care Property Investors, Inc. and Spieker
Properties, Inc.
Mr. Richman is a senior tax partner of the law firm of O'Melveny & Myers, of
which he has been a member since 1978.
Mr. Ryan has been Chairman of the Board of Directors and Chief Executive
Officer of ISU International, a franchisor of independent insurance agents,
since 1979.
Mr. Schaub has been President and owner of J.S. Schaub & Co., Inc., a firm
engaged in investments and financial consulting, for more than the past five
years. Since 1984, he has also been Chief Financial Officer, part owner and a
director of Northwest Energy Services, Inc., a privately owned engineering firm
specializing in energy audits, installation and financing of energy conservation
measures.
THE BOARD AND COMMITTEES
The Board of Directors has standing Audit, Compensation, Stock Plan and
Executive Committees. The Board currently has no standing nominating committee.
The Audit Committee, composed of Messrs. Berwick, Richman and Schaub, met
once during 1996. The function of the Audit Committee is to recommend to the
full Board of Directors the firm to be retained by the Company as its
independent auditors, to consult with the auditors with regard to the plan of
audit, the results of the audit and the audit report, and to confer with the
auditors with regard to the adequacy of internal accounting controls.
2
The Compensation Committee, composed of Messrs. Furth, Berwick and Ryan, met
five times during 1996. The function of the Compensation Committee is to
establish compensation policies for the Company's senior officers and to
administer non-stock compensation plans in which officers, directors and
employees are eligible to participate.
The Stock Plan Committee, a subcommittee of the Compensation Committee
composed of Messrs. Berwick and Furth, met twice during 1996. The Stock Plan
Committee administers the Company's equity incentive plans.
The Executive Committee, composed of Messrs. Messmer, Furth and Gibbons, did
not meet during 1996. The Executive Committee has all of the powers of the Board
of Directors, with certain specific exceptions required by Delaware law.
The Board met four times during 1996. Each of the directors attended at
least 75% of the aggregate number of meetings of the Board and of the committees
of the Board on which he served that were held while he was a member thereof.
EXECUTIVE OFFICERS
The following table lists the name of each executive officer of the Company,
his or her age at January 31, 1997, and his or her current positions and offices
with the Company:
NAME AGE OFFICE
- ----------------------------------- --- --------------------------------------------------
Harold M. Messmer, Jr. ............ 50 Chairman of the Board, President and Chief
Executive Officer
M. Keith Waddell................... 39 Senior Vice President, Chief Financial Officer and
Treasurer
Robert W. Glass.................... 38 Senior Vice President, Corporate Development
Steven Karel....................... 46 Vice President, Secretary and General Counsel
Barbara J. Forsberg................ 36 Vice President and Controller
Kirk E. Lundburg................... 37 Vice President, Administration
Mr. Waddell has been Senior Vice President of the Company since 1993, Chief
Financial Officer of the Company since 1988 and Treasurer since 1987. From 1986,
when he joined the Company, until 1993, he served as Vice President.
Mr. Glass has been Senior Vice President, Corporate Development, since 1993.
He served as Vice President, Corporate Development from 1988 until 1993. From
1987 until 1988, he served as Vice President, Planning of the Company.
Mr. Karel has been Vice President and General Counsel of the Company since
1989 and Secretary since 1993.
Ms. Forsberg has been Vice President of the Company since 1993 and
Controller since 1990.
Mr. Lundburg has been Vice President, Administration of the Company since
1993. For more than five years prior to joining the Company he was an associate
with the law firm of Latham & Watkins.
The executive officers of the Company are also officers of the Company's
wholly owned subsidiaries.
All of the executive officers serve at the pleasure of the Board of
Directors. Mr. Messmer has an employment agreement with the Company to serve as
Chairman, President and Chief Executive Officer. In addition, severance
agreements have been entered into with certain executive officers. See the
discussion under "Compensation of Executive Officers" below.
There are no family relationships between any of the directors or executive
officers.
3
BENEFICIAL STOCK OWNERSHIP
The following table sets forth information as of February 28, 1997
concerning beneficial ownership of Common Stock by (i) the only persons known to
the Company to be beneficial owners of 5% or more of the outstanding Common
Stock, (ii) each director, (iii) the five executive officers of the Company who
had the highest combination of salary and bonus during 1996, and (iv) all
executive officers and directors as a group. Included in share ownership are
shares that may be acquired upon the exercise of options that are currently
exercisable or become exercisable on or before May 31, 1997 ("Exercisable
Options"). All persons have sole voting and investment power except as otherwise
indicated.
SHARES OF PERCENT
COMMON STOCK OF
BENEFICIALLY COMMON
NAME OF BENEFICIAL OWNER OWNED(A) STOCK
- -------------------------------------------------- --------------- --------
Putnam Investments, Inc. ......................... 7,896,030(a) 13.2%
One Post Office Square
Boston, MA 02109
FMR Corp. ........................................ 4,579,700(b) 7.6%
82 Devonshire Street
Boston, MA 02109
Janus Capital Corporation ........................ 4,256,750(c) 7.1%
100 Fillmore Street
Denver, CO 80206
Andrew S. Berwick, Jr. ........................... 180,000(d) 0.3%
Frederick P. Furth................................ 1,728,200(e) 2.9%
Edward W. Gibbons................................. 539,890(f) 0.9%
Harold M. Messmer, Jr............................. 1,153,371(g) 1.9%
Frederick A. Richman.............................. 27,000(h) 0.0%
Thomas J. Ryan.................................... 164,212(d) 0.3%
J. Stephen Schaub................................. 1,903,440(i) 3.2%
M. Keith Waddell.................................. 482,507(j) 0.8%
Robert W. Glass................................... 224,399(k) 0.4%
Steven Karel...................................... 106,896(l) 0.2%
Barbara J. Forsberg............................... 96,198(m) 0.2%
All executive officers and directors as a group
(12 persons).................................... 6,655,939(n) 10.9%
- ------------------------
(a) Information is as of December 31, 1996, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Putnam Investments, Inc., these shares are held indirectly by Putnam
Investments, Inc. and its parent, Marsh & McLennan Companies, Inc. and
directly by various entities controlled by Putnam Investments, Inc.,
including Putnam Investment Management, Inc. and The Putnam Advisory
Company, Inc., all of which own such shares in their capacities as
investment advisers or investment managers. According to the Schedule 13G,
shared dispositive power is held with respect to all of such shares and
shared voting power is held with respect to 444,442 of such shares.
(b) Information is as of December 31, 1996, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by FMR Corp., these shares are held indirectly by FMR Corp. and Edward C.
Johnson 3d (Chairman and a significant stockholder of FMR Corp.) and Abigail
P. Johnson (director and a significant stockholder of FMR Corp.) and
directly by various entities controlled by FMR Corp., including Fidelity
Management & Research Company
4
and Fidelity Magellan Fund, all of which own such shares in their capacities
as investment advisers, investment companies or investment managers.
According to the Schedule 13G, sole dispositive power and shared voting
power is held with respect to all of such shares.
(c) Information is as of December 31, 1996, the latest date for which
information is available to the Company. According to a Schedule 13G filed
by Janus Capital Corporation, these shares are held indirectly by Janus
Capital Corporation and Thomas H. Bailey (President, Chairman and a
significant stockholder of Janus Capital Corporation) by reason of Janus
Capital Corporation's acting as an investment adviser with respect to
several investment companies. One of such investment companies is Janus
Fund, which directly owns 3,730,050 of such shares. According to the
Schedule 13G, shared voting and dispositive power is held with respect to
all shares.
(d) Includes 44,000 shares that may be acquired upon the exercise of Exercisable
Options.
(e) Includes 830,600 shares as to which Mr. Furth has voting power but not
dispositive power, 101,600 shares owned by the Furth Foundation, a
charitable foundation of which Mr. Furth is a director, as to which shares
Mr. Furth has shared voting and dispositive powers, and 44,000 shares that
may be acquired upon the exercise of Exercisable Options. Also includes
3,000 shares owned by Mr. Furth's wife, as to which shares he has sole
voting and dispositive power.
(f) Includes 64,000 shares that may be acquired upon the exercise of Exercisable
Options.
(g) Includes 344,375 shares that may be acquired upon the exercise of
Exercisable Options, 728,627 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Messmer has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans, 68,683 shares
as to which Mr. Messmer shares voting and dispositive power with his wife
and 9,150 shares held by Mr. Messmer as custodian for his children, as to
which shares Mr. Messmer has voting and dispositive power but disclaims
beneficial ownership.
(h) Includes 21,000 shares that may be acquired upon the exercise of Exercisable
Options.
(i) Includes 24,000 shares that may be acquired upon the exercise of Exercisable
Options, 48,908 shares owned by Schaub Family Partners, LP, of which Mr.
Schaub is general partner but has no limited partnership interest, and
19,000 shares held by the Schaub Foundation, as to which shares Mr. Schaub
shares voting and dispositive power but in which he has no pecuniary
interest. Also includes 866,790 shares as to which Mr. Schaub has voting
power (and with respect to 515,706 of which shares Mr. Schaub has a right of
first refusal) but in which he has no pecuniary interest.
(j) Includes 132,681 shares that may be acquired upon the exercise of
Exercisable Options, 304,909 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Waddell has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans and 44,917
shares as to which Mr. Waddell shares voting and dispositive power with his
wife.
(k) Includes 137,466 shares that may be acquired upon the exercise of
Exercisable Options, 61,230 shares acquired pursuant to Company benefit
plans, as to which shares Mr. Glass has sole voting power but as to which
disposition is restricted pursuant to the terms of such plans, and 24,543
shares as to which Mr. Glass shares voting and dispositive power with his
wife.
(l) Includes 48,866 shares that may be acquired upon the exercise of Exercisable
Options and 38,538 shares acquired pursuant to Company benefit plans, as to
which shares Mr. Karel has sole voting power but as to which disposition is
restricted pursuant to the terms of such plans.
(m) Includes 50,638 shares that may be acquired upon the exercise of Exercisable
Options and 37,150 shares acquired pursuant to Company benefit plans, as to
which shares Ms. Forsberg has sole voting power but as to which disposition
is restricted pursuant to the terms of such plans.
(n) In addition to the shares held by directors and executive officers described
in the table, as to which information is contained in the other notes to
this table, includes an aggregate of 49,826 shares held by one other
executive officer of the Company, including 27,286 shares that may be
acquired upon the exercise of Exercisable Options and 15,620 shares that
were acquired pursuant to Company benefit plans, as to which shares the
officer has sole voting power but as to which disposition is restricted
pursuant to the terms of such plans.
5
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors of the Company has approved and recommends that the
stockholders approve a proposal to amend Section 4.A of the Company's Restated
Certificate of Incorporation to increase the authorized shares of the Company's
common stock (the "Common Stock") from 100,000,000 shares to 160,000,000 shares.
No change is proposed to be made to the number of authorized shares of Preferred
Stock.
The Board of Directors has considered the declaration and payment of a stock
dividend at a future date, subject to appropriate market and other conditions.
The Board of Directors of the Company believes the proposed increase in the
authorized shares of Common Stock is in the best interests of the Company and
its stockholders because it would enable the Board to declare such a stock
dividend at a future date, if it so determines, and would provide the Company
with needed flexibility to act with respect to possible future financings,
investment opportunities, acquisitions and other corporate purposes without the
delay and expense involved in obtaining stockholder approval each time an event
requiring the issuance of shares may arise. However, the Company has no present
plans to issue additional shares of Common Stock in the near future.
The availability of authorized but unissued shares of Common Stock might be
deemed to have the effect of preventing or discouraging an attempt by another
person to obtain control of the Company, because the additional shares could be
issued by the Board of Directors, which could dilute the stock ownership of such
person. The Company has no plans for such issuances and this proposal is not
being proposed in response to a known effort to acquire control of the Company.
At the Annual Meeting, the stockholders will be asked to approve the
following resolution:
RESOLVED, that the directors and officers of Robert Half International Inc.
are hereby authorized and directed to amend Section 4.A of this
corporation's Restated Certificate of Incorporation, as appropriate, to
increase the number of authorized shares of Common Stock of this corporation
from 100,000,000 shares to 160,000,000 shares.
Approval of the resolution requires the vote of a majority of the
outstanding shares of the Company's Common Stock.
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST INTEREST OF
THE COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A CONTRARY CHOICE IN THEIR PROXIES.
6
COMPENSATION OF DIRECTORS
Each outside director receives an annual fee of $20,000 for services as a
director, $1,000 for each board meeting attended, and an annual fee of $3,000
for each committee (but not subcommittee) on which he serves as a member. All
directors receive reimbursement for travel and other expenses directly related
to activities as directors.
Each outside director also receives an annual option grant under the Outside
Directors' Option Plan. The plan provides for the automatic granting of options
to outside directors (currently all directors other than Mr. Messmer) on the day
of each Annual Meeting of Stockholders. On such day, each outside director will
receive an option for the purchase of 8,000 shares. However, if such individual
has not previously been granted an option by the Company, the grant will be for
the purchase of 10,000 shares, rather than 8,000 shares. The exercise price for
all options is 100% of the fair market value on the date of grant. All options
are for a term of ten years and will vest at the rate of 25% per year for each
of the first four years. However, all options vest automatically and immediately
upon the occurrence of a Change in Control (as defined in the plan). No option
may be exercised until at least six months after its grant date. Unvested
options terminate on the day that an individual ceases to be a director. Vested
options may be exercised for a limited period following termination. Each of the
outside directors (all directors other than Mr. Messmer) was, pursuant to the
terms of the plan, granted an option on May 1, 1996 (the date of the 1996 Annual
Meeting of Stockholders) at an exercise price of $29.1875 per share, the fair
market value on the date of grant. Each of such grants was for an option to
purchase 8,000 shares.
7
COMPARATIVE PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate by reference this Proxy Statement or
future filings with the Securities and Exchange Commission, in whole or in part,
the following Performance Graph shall not be deemed to be incorporated by
reference into any such filings.
The following graph compares, through December 31, 1996, the cumulative
return of the Company's Common Stock, an index of certain publicly traded
employment services companies, and the S&P 500. The graph assumes the investment
of $100 at the end of 1991 and reinvestment of all dividends. The information
presented in the graph was obtained by the Company from outside sources it
considers to be reliable but has not been independently verified by the Company.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ROBERT HALF
INTERNATIONAL PEER GROUP INDEX(A) S&P 500 INDEX
1991 100.00 100.00 100.00
1992 117.78 124.50 107.62
1993 233.34 135.88 118.46
1994 426.68 180.17 120.03
1995 744.45 207.90 165.13
1996 1,213.38 228.26 203.05
- ------------------------
(a) This index represents the cumulative total return of the Company and the
following corporations providing temporary or permanent employment services:
CDI Corp., Kelly Services, Inc., Manpower Inc., The Olsten Corporation and
Uniforce Temporary Personnel, Inc. Many of the Company's competitors are
privately-held, and none of the selected corporations specializes, as does
the Company, primarily in the temporary and permanent placement of
accounting, financial, tax and banking personnel. However, the selected
corporations, which for the most part are general employment agencies and
therefore not comparable to the Company, constitute the best approximation
of a peer group among public companies.
8
COMPENSATION OF EXECUTIVE OFFICERS
The following tables provide information as to compensation for services of
the five executive officers of the Company who had the highest combination of
salary and bonus with respect to 1996.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
-----------------------------------------------------------
RESTRICTED
STOCK AWARDS(A)
ANNUAL ------------------------ SECURITIES
COMPENSATION MARKET UNDERLYING
NAME AND -------------------- NUMBER OF VALUE ON STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS SHARES GRANT DATE(B) OPTIONS COMPENSATION (E)
- -------------------------- --------- --------- --------- --------- ------------- --------------- ----------------
Harold M. Messmer, Jr..... 1996 $ 387,122 $ 882,353 300,000(c) $ 8,756,250 300,000shares $ 285,915
Chairman and Chief 1995 $ 375,847 $ 646,687 185,272 $ 2,821,509 212,086shares $ 119,720
Executive Officer 1994 $ 364,900 $ 523,056 310,284 $ 2,453,061 372,270shares $ 114,501
M. Keith Waddell.......... 1996 $ 225,000 $ 441,176 100,000(c) $ 2,918,750 100,000shares $ 207,497
Senior Vice President 1995 $ 200,000 $ 330,444 85,040 $ 1,295,072 98,054shares $ 94,794
1994 $ 190,000 $ 267,271 111,856 $ 912,032 171,304shares $ 53,250
Robert W. Glass........... 1996 $ 155,000 $ 188,235 5,000(d) $ 170,625 10,000shares $ 85,596
Senior Vice President 1995 $ 145,000 $ 159,108 26,840 $ 408,747 23,868shares $ 54,266
1994 $ 140,000 $ 128,690 44,380 $ 359,588 51,706shares $ 31,493
Steven Karel.............. 1996 $ 150,000 $ 88,235 14,009(d) $ 478,057 17,482shares $ 60,419
Vice President 1995 $ 135,000 $ 56,873 22,182 $ 337,810 18,118shares $ 33,115
1994 $ 122,000 $ 42,256 14,324 $ 108,045 22,230shares $ 18,901
Barbara J. Forsberg....... 1996 $ 135,000 $ 76,471 10,000(c) $ 291,875 10,000shares $ 49,904
Vice President 1995 $ 110,000 $ 55,455 13,000 $ 203,625 18,160shares $ 25,935
1994 $ 86,000 $ 38,114 13,200 $ 103,545 16,600shares $ 13,115
- ------------------------------
(a) At December 31, 1996, Messrs. Messmer, Waddell, Glass and Karel and Ms.
Forsberg held an aggregate of 730,546, 280,086, 70,966, 45,903 and 32,700
shares of restricted stock, respectively, having a market value, on that
date of $24,929,882, $9,557,935, $2,421,715, $1,566,440 and $1,115,888,
respectively. All restricted stock awards vest automatically upon the
occurrence of a Change in Control. The executive officers have the right to
receive any dividends paid on restricted shares.
(b) Determined by multiplying the number of shares granted by the fair market
value of the Company's Common Stock on the date of grant, without giving
effect to the diminution of value attributable to vesting restrictions.
(c) This grant vests at the rate of 20% per year over the first five years
following the grant.
(d) This grant vests at the rate of 25% per year over the first four years
following the grant.
(e) The amounts in this column relating to 1996 consist of (a) $21,323, $6,850
and $1,769 paid for life insurance for Messrs. Messmer, Waddell and Glass,
respectively, and (b) $129,807, $121,064, $64,304, $43,769 and $36,542
allocated in the Company's records for the benefit of Messrs. Messmer,
Waddell, Glass and Karel and Ms. Forsberg, respectively, pursuant to defined
contribution plans that pay the benefits allocated thereunder only upon the
executive officer's retirement, death or termination of employment. The
amounts in this column also include amounts deemed to be compensation under
the rules of the Securities and Exchange Commission related to the present
value of the premium payments made by the Company for the benefit of the
named executive officers under the Company's split-dollar life insurance
program. Such amounts in fiscal year 1996 amounted to $134,785, $79,583,
$19,523, and $16,650 for Messrs. Messmer, Waddell, Glass, Karel and $13,362
for Ms. Forsberg. Premiums paid by the Company will be reimbursed to the
Company on termination of the respective policies to the extent and provided
there is sufficient cash value. Cash value in excess of such premiums is
paid to the executive's beneficiary.
9
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO GRANT
UNDERLYING EMPLOYEES EXERCISE DATE
OPTIONS IN FISCAL OR BASE EXPIRATION PRESENT
NAME GRANTED(A) YEAR PRICE DATE VALUE(B)
- ------------------------------------------------ ----------- ----------- ----------- ---------- -------------
Harold M. Messmer, Jr........................... 300,000(c) 28.3% $ 29.1875 5/1/06 $ 4,472,110*
M. Keith Waddell................................ 100,000(c) 9.4% $ 29.1875 5/1/06 $ 1,490,703*
Robert W. Glass................................. 10,000(d) 0.9% $ 34.125 12/31/06 $ 177,680**
Steven Karel.................................... 17,482(d) 1.7% $ 34.125 12/31/06 $ 310,620**
Barbara J. Forsberg............................. 10,000(c) 0.9% $ 29.1875 5/1/06 $ 149,070*
* In order for the assumed values to be realized, the total market value of
all outstanding shares of the Company's Common Stock would have to increase
by approximately $865,000,000 from its value on the grant date.
** In order for the assumed values to be realized, the total market value of
all outstanding shares of the Company's Common Stock would have to increase
by approximately $1,061,000,000 from its value on the grant date.
- ------------------------
(a) All grants entitle the holder to satisfy tax withholding obligations
resulting from exercise by reduction in the number of shares otherwise
deliverable. In addition to the specified vesting schedule, (i) the options
granted to Messrs. Messmer, Waddell, Glass and Karel may vest upon
termination of employment under certain circumstances pursuant to their
respective severance agreements described below, (ii) all grants vest
automatically upon death, disability or the occurrence of a change in
control and (iii) all grants are subject to accelerated vesting at the
discretion of the Compensation Committee.
(b) Calculated in accordance with the Binomial Model for estimating the value of
stock options, which estimates the present value of an option based upon
assumptions as to future variables such as interest rate and stock price
volatility. The Binomial calculations assumed an expected volatility of
33.84%, an interest rate of either 6.43% or 6.68%, depending on the grant
date, no dividends, a 3% annual reduction until the option is fully vested
to reflect risk of forfeiture and the indicated expiration date. The actual
value, if any, realized on the exercise of an option will depend on the
excess of the fair market value of the stock over the exercise price on the
date the option is exercised, and may be substantially different from the
value estimated by the Binomial Model.
(c) This grant vests in five equal annual installments on each of May 1, 1997,
May 1, 1998, May 1, 1999, May 1, 2000 and May 1, 2001.
(d) Vests in four equal annual installments on each of December 31, 1997,
December 31, 1998, December 31, 1999 and December 31, 2000.
10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS OPTIONS
ACQUIRED AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE -------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ --------- ------------- ----------- ------------- ------------- --------------
Harold M. Messmer, Jr......... 222,500 $ 5,767,999 369,096 749,112 $ 9,197,719 $ 11,238,196
M. Keith Waddell.............. 50,000 $ 1,771,845 96,639 328,783 $ 2,187,376 $ 5,569,292
Robert W. Glass............... 32,000 $ 1,014,000 129,827 85,663 $ 3,779,685 $ 1,754,300
Steven Karel.................. 30,000 $ 559,135 45,810 52,760 $ 1,243,011 $ 755,756
Barbara J. Forsberg........... 0 0 47,138 39,626 $ 1,343,476 $ 665,516
Harold M. Messmer, Jr., Chairman of the Board, President and Chief Executive
Officer, has an employment agreement with the Company terminating December 31,
2000. Under the terms of the employment agreement, Mr. Messmer will receive a
base annual salary of not less than $500,000 and will receive certain other
benefits, including life insurance and tax planning. In the event the employment
of Mr. Messmer is terminated involuntarily other than for cause, or voluntarily
within thirty (30) days following a change in control of the Company, he is
entitled to receive severance compensation. The amount of such severance
compensation shall be, at Mr. Messmer's election, either (i) his base salary, at
the rate in effect on the date of termination, plus an equal amount annually in
lieu of a bonus, through the stated expiration date of his agreement, or (ii)
the present value of such payments. If Mr. Messmer's employment is terminated by
reason of death or disability, he or his estate will receive only 75% of his
base salary through the termination date of the agreement and will not receive
any amount in lieu of bonus. The employment agreement provides for automatic
renewal for an additional year on each December 31.
Severance agreements, which were recommended in 1989 by an outside
compensation consulting firm, have been entered into with Messrs. Messmer,
Waddell, Glass and Karel. Each severance agreement provides that the employee
will be paid between six and 24 months base salary (depending upon length of
service) if his employment is terminated without cause, as defined in the
agreement. The terminated employee will also receive a pro rata share of any
bonus he would otherwise have received pursuant to any bonus plan if his
employment had not been terminated, such amount to be paid when bonuses are
generally paid pursuant to the plan. (Notwithstanding the foregoing, no
individual shall receive salary and bonus payments under both this agreement and
any other agreement. Instead, only the greater of such benefits provided by
either agreement shall be paid.) On the termination date, any unvested stock or
options would become fully vested, as would any amounts accrued for the
employee's benefit under the Deferred Compensation Plan (a defined contribution
plan that pays benefits only upon retirement, death or other termination of
employment).
The Company had in effect a key executive retirement plan, which was
terminated in 1987. Participants in the plan prior to its termination will
continue to receive benefits thereunder. The only current employee participating
in the plan is Mr. Messmer, who participates pursuant to a separate retirement
agreement. Under Mr. Messmer's retirement agreement, as amended, if Mr.
Messmer's employment is terminated (whether voluntarily or involuntarily) for
any reason, he is to receive monthly benefits commencing the month following the
date of his employment termination. Monthly benefit payments are a specified
percentage, depending upon his age at retirement, (the "Retirement Percentage")
of the sum of $2,500 plus 1/12 of Mr. Messmer's highest combination of Salary
and Bonus (as such terms are defined in his retirement agreement) with respect
to any of the five calendar years prior to the date his employment with the
Company terminates. For purposes of the retirement agreement, Salary is defined
as the greater of (a) actual cash base salary paid during the year or (b) the
amount calculated for the year by increasing $413,019 annually each calendar
year after 1995 on a compound basis by the annual percentage increase in the
Consumer Price Index for the preceding calendar year (but not by more than 10%
or less than 4%) through the date of retirement. Bonus is
11
defined as cash bonus or amounts paid in lieu of cash bonus. The Retirement
Percentage (which was established at its current levels on the recommendation of
an outside compensation consulting firm) is 30% if Mr. Messmer retires at age
50, and increases by 0.25% for each month Mr. Messmer delays his retirement
beyond age 50, to a maximum of 66% if Mr. Messmer retires at or after age 62.
Notwithstanding the foregoing, the Retirement Percentage is 66% if a Change in
Control (as defined in the plan) occurs prior to Mr. Messmer's retirement. Such
monthly benefits will be increased annually thereafter by the rate of increase
in the consumer price index (but not more than 7 1/2%) that existed at the end
of the calendar year prior to his retirement, plus any additional increases in
such rate (but not more than a total of 7 1/2%) that occur in subsequent
calendar years, and are to be paid until his death. For the first 15 years after
his termination of employment, Mr. Messmer or his beneficiary will also receive
a supplemental monthly benefit that varies depending upon his retirement age,
which benefit will be $6,241 per month if he retires at age 50, and increases by
8%, compounded, for each year he delays his retirement beyond age 50 through,
but not beyond, age 62. This supplemental benefit is not subject to the annual
CPI increase provisions. The retirement agreement also provides that if Mr.
Messmer dies before his employment is otherwise terminated or after his
employment terminates but before receiving 180 monthly retirement payments, such
payments are to be made to his designated beneficiary beginning the month
following his death until an aggregate of 180 monthly retirement payments have
been made. If his designated beneficiary is his wife, after the payment for the
180th month has been made, she will continue to receive monthly payments until
her death of half the amount he would have received. Both of these death
benefits are subject to the annual CPI increase provisions. Pursuant to the
retirement agreement, the Company will annually fund an irrevocable grantor
trust as necessary to provide for its obligations under the retirement
agreement. Upon Mr. Messmer's termination of employment, the Company will
deliver to him (or his beneficiary) an annuity or, at his request, a lump sum
cash payment, and annually thereafter the Company will pay him any additional
post-retirement CPI increases.
The Company has adopted an Excise Tax Restoration Agreement under which the
current executive officers and directors who become subject to such a tax in
connection with a change of control receive a cash payment equal to the sum of
the excise tax due, in addition to an amount necessary to restore the individual
to the same after-tax position as if no excise tax had been imposed.
12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The Compensation Committee is composed of Frederick P. Furth, Andrew S.
Berwick, Jr., and Thomas J. Ryan.
ISU Insurance Services of San Francisco has acted as broker and paying agent
for the Company with respect to certain of the Company's insurance policies.
Total payments received by ISU Insurance Services of San Francisco for these
services (net of amounts paid to ISU Insurance Services and remitted to the
insurance carriers) aggregated approximately $250,000 in 1996 and are expected
to aggregate a similar amount in 1997. Mr. Ryan is Chairman of ISU Insurance
Services of San Francisco, the stock of which is owned by members of Mr. Ryan's
family. ISU Insurance Services of San Francisco is a franchisee of ISU
International, a corporation of which Mr. Ryan is Chairman of the Board and
Chief Executive Officer and a majority of whose stock is owned by Mr. Ryan.
Frederick A. Richman, a director, is a partner in the law firm of O'Melveny
& Myers, which has performed legal services for the Company from time to time.
Amounts paid by the Company to O'Melveny & Myers have not been material.
13
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate by reference this Proxy Statement or
future filings with the Securities and Exchange Commission, in whole or in part,
the following report shall not be deemed to be incorporated by reference into
any such filings.
The Compensation Committee, after consultation with and upon the
recommendation of an outside compensation consulting firm, developed the
philosophy statement set forth below, which it has followed in every year since
1989, when it was first adopted:
"Compensation policies and practices, and other related programs, will be
developed and designed in line with the following statement of compensation
philosophy:
The overriding objective of the Company's compensation and benefit program
is to attract, retain and reward talented employees through programs that
also align with and support the Company's goals and strategies.
A competitive compensation package will be provided for all positions:
- Positions that participate in short-term incentive plans because of their
significant impact on short-term performance will have salaries that are
set at the 50th percentile. Additional short-term incentive pay will allow
total annual pay at the 75th percentile if target performance is achieved.
- Key executives with significant impact on the long-term performance of the
Company will also participate in long-term incentive plans (stock and/or
cash plans) that will result in total target pay at the 90th percentile if
short- and long-term performance targets are achieved.
Survey data reflective of relevant labor markets will be used to determine
actual pay levels that are consistent with desired competitive levels. In
addition to external pay data, internal relationships among positions and
differences in impact and importance of positions will influence pay. All
compensation programs will incorporate "pay for performance" concepts by
allowing pay of individual employees to vary according to individual, unit
and company performance:
- Performance planning and appraisal systems, together with incentive
programs where appropriate, will direct and reward effort and performance
of employees."
The Committee believes that setting compensation at levels designed to
attract and retain key individuals is critical to the success of a personnel
services business in which there are few tangible assets and in which people
represent the true "assets" of the Company. The Committee is also mindful of the
fact that the Company's industry is fractured with a myriad of private firms
owned by entrepreneurial individuals representing the Company's most effective
competition in many markets. Successful competitors generate large financial
rewards to the owners as the Company knows from its many acquisitions of such
firms over the years. It is imperative that the Company's compensation program
provide significant cash and equity incentives to its key managers so as to
compete with both public and private companies for this talent and the Committee
believes the Company's compensation program achieves this result. Annual base
salaries, bonuses, restricted stock and stock option awards are all designed to
achieve the above-specified goals. Generally, annual bonus awards are based upon
earnings per share, and each executive's bonus is increased or decreased,
according to a formula, in relation to how the actual earnings per share
compares with the target earnings per share for the year set by the Committee.
The Committee believes that the emphasis placed upon equity grants (restricted
stock and stock options) aligns the interest of the officers with those of the
stockholders, and makes a significant portion of executive compensation
contingent upon long-term positive share price performance.
14
In establishing compensation levels for the Chief Executive Officer, the
Compensation Committee followed the guidelines and policies described above. In
addition, the Committee also considered several subjective factors related to
the Company's business. These included, among other things, the Company's strong
cash position and its continued generation of strong cash flow, the Company's
performance relative to both its public and private competitors, the Chief
Executive Officer's ability to develop and maintain significant business
relationships for the Company and the complexity of managing an international
service business. The Committee also noted that 1996 was another year in which
the Company's stock price and earnings per share increased significantly over
the previous year's performance (The Company's stock price increased
approximately 65% from the beginning of the year to the end of the year and the
earnings per share were 47% higher in 1996 than in 1995.) In fact, the Company's
stock performance during the three year period from January 1, 1994 through
December 31, 1996, calculated on a total return to investors basis, rated in the
top 1% of all New York Stock Exchange companies, just as it did for the prior
three year period from January 1, 1993, through December 31, 1995.
In determining executive compensation, the Compensation Committee considers,
among other factors, the possible tax consequences to the Company and to the
executives. However, tax consequences, including but not limited to tax
deductibility by the Company, are subject to many factors (such as changes in
the tax laws and regulations or interpretations thereof and the timing and
nature of various decisions by executives regarding options and other rights)
that are beyond the control of either the Compensation Committee or the Company.
In addition, the Compensation Committee believes that it is important for it to
retain maximum flexibility in designing compensation programs that meet its
stated objectives. For all of the foregoing reasons, the Compensation Committee,
while considering tax deductibility as one of its factors in determining
compensation, will not limit compensation to those levels or types of
compensation that will be deductible. The Compensation Committee will, of
course, consider alternative forms of compensation, consistent with its
compensation goals, that preserve deductibility.
Andrew S. Berwick, Jr.
Frederick P. Furth
Thomas J. Ryan
15
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Arthur Andersen LLP, independent public accountants,
to audit the books, records and accounts of the Company during 1997. Arthur
Andersen LLP has acted as auditors of the Company and its predecessor since
1977. Representatives of that firm will be present at the Meeting and will have
the opportunity to make a statement if they desire to do so. They will also be
available to respond to questions.
STOCKHOLDER PROPOSALS
To be considered for presentation at the 1998 Annual Meeting of
Stockholders, a stockholder proposal must be received at the office of the
Company not later than November 26, 1997.
OTHER MATTERS
The proxy holders are authorized to vote, in their discretion, upon any
other business that comes before the Meeting and any adjournment of the Meeting.
The Board knows of no other matters which will be presented to the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
STEVEN KAREL
SECRETARY
Menlo Park, California
March 26, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED, POST-PAID ENVELOPE.
16
ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CA 94025
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold M. Messmer, Jr. and Andrew S.
Berwick, Jr. as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side hereof, all the shares of common stock of Robert Half International Inc.
held of record by the undersigned on March 17, 1997 at the annual meeting of
stockholders to be held on May 7, 1997 or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
------------
See Reverse
Side
------------
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY. ----- Please mark
X your choices
----- like this
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
- -------------------------------------------------------------------------------
1. Election of Directors: Andrew S. Berwick, Jr., Frederic P. Furth
/ / FOR all nominees listed / / WITHHOLD AUTHORITY
above (except as marked to vote for all
to the contrary below) nominees listed above
(INSTRUCTION: To withhold authority to vote for 2. Proposal to amend
any individual nominee, write nominee's name on the Restated
the space provided below. Certificate of
Incorporation.
- -------------------------------------------------- 3. In their discretion,
the Proxies are
authorized to vote
upon such other
business as may
properly come before
the meeting.
- -------------------------------------------------------------------------------
__ __ Please sign exactly as name appears
| hereon. When shares are held by joint
| tenants, both should sign. When
| signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporation name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Date ___________________________, 1997
Signature ____________________________
Signature, if held jointly ___________
PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
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