Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 30 182K
3: EX-10.18 Material Contract 7 25K
2: EX-10.2 Material Contract 1 7K
4: EX-21 Subsidiaries of the Registrant 1 8K
5: EX-23 Consent of Experts or Counsel 1 7K
6: EX-27 Financial Data Schedule (Pre-XBRL) 2 9K
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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, 1998
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: (650) 234-6000
------------------------
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 1, 1999, the aggregate market value of the Common Stock held by
non-affiliates of the registrant was approximately $3,022,434,000 based on the
closing sale price on that date. This amount excludes the market value of
8,008,598 shares of Common Stock directly or indirectly held by registrant's
directors and officers and their affiliates.
As of March 1, 1999, there were outstanding 91,099,568 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 1999, 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
regular employees in paralegal, legal administrative and other legal support
positions. In 1997, the Company established RHI MANAGEMENT
RESOURCES-REGISTERED TRADEMARK- to provide senior level project professionals
specializing in the accounting and finance fields.
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 three of the ACCOUNTEMPS and ROBERT HALF franchises and has also
acquired 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 its tradenames, 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 230 offices in 39 states and six foreign countries and
placed approximately 180,000 employees on temporary assignment with clients in
1998.
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. 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
1
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.
RHI CONSULTING
The Company's RHI CONSULTING division, which commenced operations in 1994,
specializes in providing information technology contract consultants and placing
regular employees 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.
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.
RHI MANAGEMENT RESOURCES
The Company's RHI MANAGEMENT RESOURCES division, which commenced operations
in 1997, specializes in providing senior level project professionals in the
accounting and finance fields, including chief financial officers, controllers,
and senior financial analysts, for such tasks as financial systems conversions,
expansion into new markets, business process reengineering and post-merger
financial consolidation.
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, websites, advertising on the internet 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, Corel
Corporation (publisher of WordPerfect), Peachtree Software, Inc., Intuit 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-, RHI
CONSULTING-Registered Trademark- and RHI MANAGEMENT
RESOURCES-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 230 offices in 39 states and six foreign countries. Office managers are
responsible for most activities of their offices, including sales, local
advertising and marketing and recruitment.
2
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.
EMPLOYEES
The Company has approximately 5,200 full-time staff employees. The Company's
offices placed approximately 180,000 employees on temporary assignments with
clients during 1998. 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 two business segments. (See Note
M of Notes to Consolidated Financial Statement in Item 8. Financial Statements
and Supplementary Data for financial information about the Company's segments.)
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.
Information about foreign operations is contained in Note M 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 230 offices located in the United
States, Canada, the United Kingdom, Belgium, France, the Netherlands and
Australia. 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 December 31, 1998, there were approximately
2,500 holders of record of the Common Stock.
Following is a list by fiscal quarters of the sales prices of the stock,
adjusted, as appropriate, to reflect the three-for-two stock split effected in
the form of a stock dividend in September 1997:
[Download Table]
SALES PRICES
--------------------
1998 HIGH LOW
-------------------------------- -------- ---------
4th Quarter..................... $49.19 $29.00
3rd Quarter..................... $58.69 $41.00
2nd Quarter..................... $60.25 $47.13
1st Quarter..................... $49.25 $32.25
SALES PRICES
--------------------
1997 HIGH LOW
-------------------------------- -------- ---------
4th Quarter..................... $43.06 $32.88
3rd Quarter..................... $42.67 $31.33
2nd Quarter..................... $31.50 $23.00
1st Quarter..................... $29.83 $22.25
No cash dividends were paid in 1998 or 1997. 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 for the last
five years:
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
------------ ------------ ---------- ---------- ----------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Net service revenues............................. $ 1,793,041 $ 1,302,876 $ 898,635 $ 628,526 $ 446,328
Direct costs of services, consisting of payroll,
payroll taxes and insurance costs for temporary
employees....................................... 1,070,834 785,546 545,343 384,449 273,327
------------ ------------ ---------- ---------- ----------
Gross margin..................................... 722,207 517,330 353,292 244,077 173,001
Selling, general and administrative expenses..... 501,626 357,766 246,485 170,684 121,640
Amortization of intangible assets................ 4,993 4,926 5,405 4,767 4,584
Interest (income) expense, net................... (5,588) (4,190) (2,243) (463) 1,570
------------ ------------ ---------- ---------- ----------
Income before income taxes....................... 221,176 158,828 103,645 69,089 45,207
Provision for income taxes....................... 89,596 65,131 42,543 28,791 19,090
------------ ------------ ---------- ---------- ----------
Net income....................................... $ 131,580 $ 93,697 $ 61,102 $ 40,298 $ 26,117
------------ ------------ ---------- ---------- ----------
------------ ------------ ---------- ---------- ----------
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
----------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NET INCOME PER SHARE:
BASIC.............................................. $ 1.44 $ 1.03 $ .69 $ .47 $ .32
DILUTED............................................ $ 1.39 $ 1.00 $ .67 $ .46 $ .31
SHARES:
BASIC.............................................. 91,650 90,668 88,267 85,479 82,095
DILUTED............................................ 94,822 93,999 91,522 88,488 85,051
[Enlarge/Download Table]
DECEMBER 31,
----------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Intangible assets, net............................... $ 178,363 $ 177,425 $ 174,663 $ 155,441 $ 152,824
Total assets......................................... $ 703,719 $ 561,367 $ 416,012 $ 301,140 $ 227,761
Debt financing....................................... $ 4,712 $ 8,157 $ 6,611 $ 5,725 $ 4,214
Stockholders' equity................................. $ 522,470 $ 418,800 $ 308,445 $ 227,930 $ 176,995
All shares and per share amounts have been restated to retroactively reflect
the three-for-two stock split effected in the form of a stock dividend in
September 1997 and the two-for-one stock split effected in the form of a stock
dividend in June 1996.
5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain information contained in Management's Discussion and Analysis and in
other parts of this report may be deemed forward-looking statements regarding
events and financial trends that may affect the Company's future operating
results or financial positions. Such statements may be identified by words such
as "estimate", "project", "plan", "intend", "believe", "expect", "anticipate",
or variations or negatives thereof or by similar or comparable words or phrases.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed in the
statements. Such risks and uncertainties include, but are not limited to, the
following: changes in general or local economic conditions or in the economic
condition of any industry, the availability of qualified staff employees and
temporary candidates, government regulation of the personnel services industry,
general regulations relating to employers and employees, liability risks
associated with the operation of a personnel services business, competitive
conditions in the personnel services industry, and Year 2000 issues. In
addition, it should be noted that, because long-term contracts are not a
significant portion of the Company's business, future results cannot be reliably
predicted by considering past trends or extrapolating past results.
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1998
Temporary services revenues were $1.65 billion, $1.20 billion and $829
million for the years ended December 31, 1998, 1997 and 1996, respectively,
increasing by 38% during 1998 and 45% during 1997. The increase in revenues
during these periods reflected in part revenues generated from the Company's
OFFICETEAM, RHI CONSULTING, and RHI MANAGEMENT RESOURCES divisions, which were
started in 1991, 1994 and 1997, respectively. Permanent placement revenues were
$136 million, $100 million and $70 million for the years ended December 31,
1998, 1997 and 1996, respectively, increasing by 36% during 1998 and 43% during
1997. Overall revenue increases reflect continued improvement in demand for the
Company's services, which the Company believes is a result of increased
acceptance in the use of professional staffing services. Revenues from companies
acquired during 1998, 1997 and 1996 were not material.
The Company currently has more than 230 offices in 39 states and six foreign
countries. Domestic operations represented 89% of revenues for the year ended
December 31, 1998, and 90% of revenues for the years ended December 31, 1997 and
1996. Foreign operations represented 11% of revenues for the year ended December
31, 1998 and 10% of revenues for the years ended December 31, 1997 and 1996.
Gross margin dollars from the Company's temporary services represent
revenues less direct costs of services, which consist of payroll, payroll taxes
and insurance costs for temporary employees. Gross margin dollars from permanent
placement services are equal to revenues, as there are no direct costs
associated with such revenues. Gross margin dollars for the Company's temporary
services were $586 million, $417 million and $283 million for the years ended
December 31, 1998, 1997 and 1996, respectively, increasing by 41% in 1998 and
47% in 1997. Gross margin amounts equaled 35% of revenues for temporary services
for the years ended December 31, 1998 and 1997, and 34% for the year ended
December 31, 1996, which the Company believes reflects its ability to adjust
billing rates and wage rates to underlying market conditions. Gross margin
dollars for the Company's permanent placement division were $136 million, $100
million and $70 million for each of the years ended December 31, 1998, 1997 and
1996, respectively, increasing by 36% and 43% in 1998 and 1997, respectively.
Selling, general and administrative expenses were $502 million during 1998,
compared to $358 million in 1997 and $246 million in 1996. Selling, general and
administrative expenses as a percentage of revenues were 28% for both the years
ended December 31, 1998 and 1997 and 27% for the year ended December 31, 1996.
Selling, general and administrative expenses consist primarily of staff
compensation, advertising, and occupancy costs, most of which generally follow
changes in revenues.
The Company allocates the excess of cost over the fair market value of the
net tangible assets first to identifiable intangible assets, if any, and then to
goodwill. Although management believes that goodwill has
6
an unlimited life, the Company amortizes these costs over 40 years. Management
believes that its strategy of making acquisitions of established companies in
established markets and maintaining its presence in these markets preserves the
goodwill for an indeterminate period. The carrying value of intangible assets is
periodically reviewed by the Company and impairments are recognized when the
expected future operating cash flows derived from such intangible assets is less
than their carrying value. Based upon its most recent analysis, the Company
believes that no material impairment of intangible assets existed at December
31, 1998. Intangible assets represented 25% of total assets and 34% of total
stockholders' equity at December 31, 1998.
Interest income for the years ended December 31, 1998, 1997 and 1996 was
$6,947,000, $5,139,000 and $2,948,000, respectively. Interest expense for the
years ended December 31, 1998, 1997 and 1996 was $1,359,000, $949,000 and
$705,000, respectively. These changes primarily reflect an increase in cash and
cash equivalents.
The provision for income taxes was 41% for the years ended December 31,
1998, 1997, and 1996.
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 staffing
services acquisitions, capital expenditures and principal payments on
outstanding notes payable. In October 1997, the Company authorized the
repurchase, from time to time, of up to four million shares of the Company's
common stock on the open market or in privately negotiated transactions,
depending on market conditions. During the year ended December 31, 1998, the
Company repurchased approximately 1,625,000 shares of common stock on the open
market for a total cost of $66.3 million. Since 1997, the Company has
repurchased approximately 1,725,000 shares on the open market pursuant to this
program. For additional information regarding the Company's stock repurchase
program, see Note F of the Notes to Consolidated Financial Statements.
Repurchases of the securities have been funded with cash generated from
operations. For the year ended December 31, 1998, the Company generated $155
million from operations, used $71 million in investing activities and used $49
million in financing activities.
The Company's working capital at December 31, 1998, included $166 million in
cash and cash equivalents. In addition, at December 31, 1998, the Company had
available $73 million of its $80 million bank revolving line of credit. The
Company's working capital requirements consist primarily of the financing of
accounts receivable. While there can be no assurances in this regard, the
Company expects that internally generated cash plus the bank revolving line of
credit will be sufficient to support the working capital needs of the Company,
the Company's fixed payments, and other obligations on both a short and
long-term basis. As of December 31, 1998, the Company had no material capital
commitments.
The Company's primary exposures related to the Year 2000 are in its key
internal information systems. The Company is addressing the Year 2000 exposures
as part of its strategic plan for upgrading core systems.
In 1997, the Company initiated a number of major system projects to replace
core computer hardware, networking, and software systems in the U.S. with new
technology. The Company has purchased software from outside vendors and is
working with outside consultants to install the software and train employees.
The Company's key vendors supplying this technology have asserted that these
hardware, networking, and software systems are Year 2000 compliant. The Company
does not plan to test these systems for Year 2000 compliance given the
contractual representations made by its key vendors.
The Company is currently rolling out these new systems throughout the
organization in phases, by location. The first phase has been completed on
schedule and the remaining are scheduled to be complete before the Year 2000.
The Company is also in the process of upgrading all desktop computers to a model
that is Year 2000 compliant and expects to complete this upgrade in 1999. The
Company expects to spend
7
in excess of $44 million on these systems and desktop upgrade projects of which
approximately $37 million has been incurred to date.
The Company is undertaking steps to assess the effect of the Year 2000 issue
with respect to its foreign operating units and suppliers and at this time,
cannot determine the impact it will have. Contingency plans will be developed if
it appears the Company or its key suppliers will not be Year 2000 compliant as
noncompliance would have a material adverse impact on the Company's operations.
The Company will adopt SOP 98-1, ACCOUNTING FOR THE COSTS OF COMPUTER
SOFTWARE DEVELOPED FOR INTERNAL USE, which requires the capitalization of
certain costs related to the development of software for internal use in fiscal
year 1999. The Company believes that the adoption of this standard will not have
a material impact on its financial results.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk sensitive instruments do not subject the Company
to material market risk exposures.
8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
[Enlarge/Download Table]
DECEMBER 31,
----------------------
1998 1997
---------- ----------
ASSETS:
Cash and cash equivalents................................................................. $ 166,060 $ 131,349
Accounts receivable, less allowances of $10,176 and $7,164................................ 240,690 186,899
Other current assets...................................................................... 23,656 15,757
---------- ----------
Total current assets.................................................................... 430,406 334,005
Intangible assets, less accumulated amortization of $53,236 and $46,001................... 178,363 177,425
Property and equipment, less accumulated depreciation of $48,900 and $29,962.............. 94,950 49,937
---------- ----------
Total assets............................................................................ $ 703,719 $ 561,367
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses..................................................... $ 23,659 $ 20,285
Accrued payroll costs..................................................................... 124,068 95,925
Income taxes payable...................................................................... 3,810 2,258
Current portion of notes payable and other indebtedness................................... 1,308 3,627
---------- ----------
Total current liabilities............................................................... 152,845 122,095
Notes payable and other indebtedness, less current portion................................ 3,404 4,530
Deferred income taxes..................................................................... 25,000 15,942
---------- ----------
Total liabilities....................................................................... 181,249 142,567
---------- ----------
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value authorized 260,000,000 shares; issued and outstanding
91,225,353 and 91,208,029 shares........................................................ 91 91
Capital surplus........................................................................... 270,609 196,888
Deferred compensation..................................................................... (56,790) (44,276)
Accumulated other comprehensive income.................................................... (1,244) (1,347)
Retained earnings......................................................................... 309,804 267,444
---------- ----------
Total stockholders' equity.............................................................. 522,470 418,800
---------- ----------
Total liabilities and stockholders' equity.............................................. $ 703,719 $ 561,367
---------- ----------
---------- ----------
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
9
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------------
1998 1997 1996
------------ ------------ ----------
Net service revenues...................................................... $ 1,793,041 $ 1,302,876 $ 898,635
Direct costs of services, consisting of payroll, payroll taxes and
insurance costs for temporary employees................................. 1,070,834 785,546 545,343
------------ ------------ ----------
Gross margin.............................................................. 722,207 517,330 353,292
Selling, general and administrative expenses.............................. 501,626 357,766 246,485
Amortization of intangible assets......................................... 4,993 4,926 5,405
Interest income, net...................................................... (5,588) (4,190) (2,243)
------------ ------------ ----------
Income before income taxes................................................ 221,176 158,828 103,645
Provision for income taxes................................................ 89,596 65,131 42,543
------------ ------------ ----------
Net income................................................................ $ 131,580 $ 93,697 $ 61,102
------------ ------------ ----------
------------ ------------ ----------
Basic net income per share................................................ $ 1.44 $ 1.03 $ .69
Diluted net income per share.............................................. $ 1.39 $ 1.00 $ .67
All per share amounts have been restated to retroactively reflect the
three-for-two stock
split effected in the form of a stock dividend in September 1997.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
10
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
COMMON STOCK--SHARES:
Balance at beginning of period................................................... 91,208 89,622 86,677
Issuances of restricted stock.................................................... 735 802 989
Repurchases of common stock...................................................... (2,118) (676) (296)
Exercises of stock options....................................................... 1,400 1,446 1,709
Issuance of common stock for acquisitions........................................ -- 14 543
--------- --------- ---------
Balance at end of period....................................................... 91,225 91,208 89,622
--------- --------- ---------
--------- --------- ---------
COMMON STOCK--PAR VALUE:
Balance at beginning of period................................................... $ 91 $ 90 $ 87
Issuances of restricted stock.................................................... 1 1 1
Repurchases of common stock...................................................... (2) (1) --
Exercises of stock options....................................................... 1 1 2
--------- --------- ---------
Balance at end of period....................................................... $ 91 $ 91 $ 90
--------- --------- ---------
--------- --------- ---------
CAPITAL SURPLUS:
Balance at beginning of period................................................... $ 196,888 $ 140,443 $ 99,739
Issuances of restricted stock--excess over par value............................. 31,514 29,189 24,019
Exercises of stock options--excess over par value................................ 8,452 5,755 4,119
Issuance of common stock for acquisition......................................... -- 400 --
Capital impact of equity incentive plans......................................... 33,755 21,101 12,566
--------- --------- ---------
Balance at end of period....................................................... $ 270,609 $ 196,888 $ 140,443
--------- --------- ---------
--------- --------- ---------
DEFERRED COMPENSATION:
Balance at beginning of period................................................... $ (44,276) $ (26,802) $ (9,642)
Issuances of restricted stock.................................................... (31,515) (29,190) (24,020)
Amortization of deferred compensation............................................ 19,001 11,716 6,860
--------- --------- ---------
Balance at end of period....................................................... $ (56,790) $ (44,276) $ (26,802)
--------- --------- ---------
--------- --------- ---------
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period................................................... $ (1,347) $ 23 $ 51
Translation adjustments.......................................................... 103 (1,370) (28)
--------- --------- ---------
Balance at end of period....................................................... $ (1,244) $ (1,347) $ 23
--------- --------- ---------
--------- --------- ---------
RETAINED EARNINGS:
Balance at beginning of period................................................... $ 267,444 $ 194,691 $ 137,695
Repurchases of common stock--excess over par value............................... (89,220) (20,944) (5,391)
Issuance of common stock for acquisition......................................... -- -- 1,285
Net income....................................................................... 131,580 93,697 61,102
--------- --------- ---------
Balance at end of period....................................................... $ 309,804 $ 267,444 $ 194,691
--------- --------- ---------
--------- --------- ---------
COMPREHENSIVE INCOME:
Net income....................................................................... $ 131,580 $ 93,697 $ 61,102
Translation adjustments.......................................................... 103 (1,370) (28)
--------- --------- ---------
Total comprehensive income..................................................... $ 131,683 $ 92,327 $ 61,074
--------- --------- ---------
--------- --------- ---------
All shares and amounts have been restated to retroactively reflect the
three-for-two stock
split effected in the form of a stock dividend in September 1997.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
11
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
---------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 131,580 $ 93,697 $ 61,102
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of intangible assets......................................... 4,993 4,926 5,405
Depreciation expense...................................................... 19,643 12,726 6,457
Provision for deferred income taxes....................................... 1,902 (5,135) (1,702)
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable........................................... (53,205) (61,027) (38,565)
Increase in accounts payable, accrued expenses and accrued payroll costs.. 27,761 27,878 17,893
Increase (decrease) in income taxes payable............................... 1,552 (1,625) (1,274)
Change in other assets, net of change in other liabilities................ 21,101 10,517 5,109
---------- --------- ---------
Total adjustments........................................................... 23,747 (11,740) (6,677)
---------- --------- ---------
Net cash and cash equivalents provided by operating activities................ 155,327 81,957 54,425
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired............................................ (4,187) (3,338) (4,620)
Capital expenditures.......................................................... (67,229) (31,958) (18,027)
---------- --------- ---------
Net cash and cash equivalents used in investing activities.................... (71,416) (35,296) (22,647)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock and common stock equivalents...................... (89,222) (20,945) (5,391)
Principal payments on notes payable and other indebtedness.................... (2,186) (1,405) (4,239)
Proceeds and capital impact of equity incentive plans......................... 42,208 26,857 16,687
---------- --------- ---------
Net cash and cash equivalents (used in) provided by financing activities...... (49,200) 4,507 7,057
---------- --------- ---------
Net increase in cash and cash equivalents....................................... 34,711 51,168 38,835
Cash and cash equivalents at beginning of period................................ 131,349 80,181 41,346
---------- --------- ---------
Cash and cash equivalents at end of period...................................... $ 166,060 $ 131,349 $ 80,181
---------- --------- ---------
---------- --------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest.................................................................... $ 379 $ 476 $ 521
Income taxes................................................................ $ 54,538 $ 50,340 $ 32,163
Acquisitions:
Assets acquired--
Intangible assets......................................................... $ 3,967 $ 4,079 $ 9,932
Other..................................................................... 622 499 2,180
Liabilities incurred--
Notes payable and contracts............................................... -- (536) (5,125)
Other..................................................................... (402) (304) (1,082)
Common stock issued......................................................... -- (400) (1,285)
---------- --------- ---------
Cash paid, net of cash acquired............................................. $ 4,187 $ 3,338 $ 4,620
---------- --------- ---------
---------- --------- ---------
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
12
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,
ROBERT HALF, OFFICETEAM, RHI CONSULTING, RHI MANAGEMENT RESOURCES, and THE
AFFILIATES. The Company, through its ACCOUNTEMPS, ROBERT HALF, and RHI
MANAGEMENT RESOURCES divisions, is the world's largest specialized provider of
temporary, full-time, and project professionals in the fields of accounting and
finance. OFFICETEAM specializes in highly skilled temporary administrative
support personnel. RHI CONSULTING provides contract information technology
professionals. THE AFFILIATES provides temporary, project, and full-time
staffing of attorneys and specialized support personnel within law firms and
corporate legal departments. Revenues are predominantly from temporary services.
The Company operates in the United States, Canada, Europe, and Australia. 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 1997 and 1996 financial statements to
conform to the 1998 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 employed for the Company's guarantee period, typically
90 days.
CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments with a maturity of three months or less as cash equivalents.
INTANGIBLE ASSETS. Intangible assets primarily consist of the cost of
acquired companies in excess of the fair market value of their net tangible
assets at acquisition date, which are being amortized on a straight-line basis
over a period of 40 years. The carrying value of intangible assets is
periodically reviewed by the Company and impairments are recognized when the
expected future operating cash flows derived from such intangible assets are
less than their carrying value. Based upon its most recent analysis, the Company
believes that no material impairment of intangible assets existed at December
31, 1998.
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 rates.
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 is 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.
PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are amortized over
the shorter of the life of the related asset or the life of the lease.
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 66 separate transactions the Company acquired all of the
outstanding stock of certain corporations operating ACCOUNTEMPS and ROBERT HALF
franchised offices in the United States, the United Kingdom and Canada as well
as other staffing services businesses. The Company has paid approximately $215
million in cash, stock, notes and other indebtedness in these acquisitions,
excluding transaction costs and cash acquired.
These acquisitions were primarily accounted for as purchases, and the excess
of cost of the acquired companies in excess of 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 1998, 1997 and 1996 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 and other payment obligations. These are
due in varying installments, carry varying interest rates and, in aggregate,
amounted to $4,712,000 at December 31, 1998 and $8,157,000 at December 31, 1997.
At December 31, 1998, $2,441,000 of the notes were 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, 1998 (in thousands):
[Download Table]
1999................................................................ $ 1,308
2000................................................................ 807
2001................................................................ 57
2002................................................................ 61
2003................................................................ 66
Thereafter.......................................................... 2,413
---------
$ 4,712
---------
---------
At December 31, 1998, the notes carried fixed rates and the weighted average
interest rate for the above was approximately 8.2%, 7.0% and 6.9% for the years
ended December 31, 1998, 1997 and 1996, respectively.
NOTE D--BANK LOAN (REVOLVING CREDIT)
The Company has 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, 1998 and 1997, the Company had no borrowings on the line
of credit outstanding and had used $6,799,000 and $8,583,000 in debt support
standby letters of credit, respectively. There is a commitment fee on the unused
portion of the entire credit facility of .09%. The loan is subject to certain
financial covenants which also affect the interest rates charged. The final
maturity date for the credit facility is August 31, 2002.
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE E--ACCRUED PAYROLL COSTS
Accrued payroll costs consisted of the following (in thousands):
[Enlarge/Download Table]
DECEMBER 31,
---------------------
1998 1997
---------- ---------
Payroll and bonuses.................................................... $ 56,943 $ 36,493
Employee benefits and workers' compensation............................ 49,926 42,042
Payroll taxes.......................................................... 17,199 17,390
---------- ---------
$ 124,068 $ 95,925
---------- ---------
---------- ---------
NOTE F--STOCKHOLDERS' EQUITY
STOCK REPURCHASE PROGRAM--In October 1997, the Company's Board of Directors
authorized the repurchase, from time to time, of up to four million shares of
the Company's common stock on the open market or in privately negotiated
transactions, depending on market conditions. During the year ended December 31,
1998, the Company repurchased approximately 1,625,000 shares on the open market
for a total cost of $66.3 million. Since 1997, the Company repurchased
approximately 1,725,000 shares of common stock on the open market pursuant to
this program.
NOTE G--INCOME TAXES
The provision for income taxes for the years ended December 31, 1998, 1997
and 1996 consisted of the following (in thousands):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
Current:
Federal.................................................... $ 66,127 $ 53,973 $ 34,392
State...................................................... 15,243 12,261 7,457
Foreign.................................................... 6,324 4,032 2,396
Deferred--principally domestic............................... 1,902 (5,135) (1,702)
--------- --------- ---------
$ 89,596 $ 65,131 $ 42,543
--------- --------- ---------
--------- --------- ---------
The income taxes shown above varied from the statutory federal income tax
rates for these periods as follows:
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
----------------------------
1998 1997 1996
---- ---- ----
Federal U.S. income tax rate................................ 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit.............. 4.6 4.6 4.5
Amortization of intangible assets........................... .6 .8 1.0
Tax-free interest income.................................... (.4) -- --
Other, net.................................................. .7 .6 .5
---- ---- ----
Effective tax rate.......................................... 40.5% 41.0% 41.0%
---- ---- ----
---- ---- ----
15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE G--INCOME TAXES (CONTINUED)
The deferred portion of the tax provisions consisted of the following (in
thousands):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
Amortization of franchise rights.............................. $ (74) $ 66 $ 691
Accrued expenses, deducted for tax when paid.................. (7,317) (7,612) (2,468)
Capitalized costs for books, deducted for tax................. 9,660 2,101 --
Other, net.................................................... (367) 310 75
--------- --------- ---------
$ 1,902 $ (5,135) $ (1,702)
--------- --------- ---------
--------- --------- ---------
The deferred income tax amounts included on the balance sheet are comprised
of the following (in thousands):
[Enlarge/Download Table]
DECEMBER 31,
---------------------
1998 1997
---------- ---------
Current deferred income tax assets, net................................ $ (12,542) $ (8,445)
Long-term deferred income tax liabilities, net......................... 25,000 15,942
---------- ---------
$ 12,458 $ 7,497
---------- ---------
---------- ---------
No valuation allowances against deferred tax assets were required for the
years ended December 31, 1998 and 1997.
The components of the deferred income tax amounts at December 31, 1998 and
1997, were as follows (in thousands):
[Enlarge/Download Table]
DECEMBER 31,
--------------------
1998 1997
--------- ---------
Amortization of intangible assets....................................... $ 16,662 $ 17,026
Accrued expenses, deducted for tax when paid............................ (5,603) (3,360)
Other, net.............................................................. 1,399 (6,169)
--------- ---------
$ 12,458 $ 7,497
--------- ---------
--------- ---------
NOTE H--COMMITMENTS
Rental expense, primarily for office premises, amounted to $30,146,000,
$19,594,000 and $13,315,000 for the years ended December 31, 1998, 1997 and
1996, respectively. The approximate minimum rental commitments for 1999 and
thereafter under non-cancelable leases in effect at December 31, 1998, were as
follows (in thousands):
[Download Table]
1999............................................................... $ 31,734
2000............................................................... 30,081
2001............................................................... 26,915
2002............................................................... 21,637
2003............................................................... 14,748
Thereafter......................................................... 45,651
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE I--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 Stock Plan Committee of the Board of
Directors. Grants generally vest between four and 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. Compensation expense is recognized on a straight-line basis over
the vesting period. Vesting is accelerated upon the death or disability of the
recipients.
The Company accounts for these plans under APB Opinion 25. Therefore, no
compensation cost has been recognized for its stock option plans. Had
compensation cost for the stock options granted subsequent to January 1, 1995,
been based on the estimated fair value at the award dates, as prescribed by
Statement of Financial Accounting Standards No. 123, the Company's pro forma net
income and net income per share would have been as follows (in thousands, except
per share amounts):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
----------------------------------------------
1998 1997 1996
-------------- ------------- -------------
Net Income
As Reported................................................ $ 131,580 $ 93,697 $ 61,102
Pro forma.................................................. $ 124,622 $ 90,212 $ 59,666
Net Income Per Share
Basic
As Reported.............................................. $ 1.44 $ 1.03 $ .69
Pro forma................................................ $ 1.36 $ .99 $ .68
Diluted
As Reported.............................................. $ 1.39 $ 1.00 $ .67
Pro forma................................................ $ 1.33 $ .97 $ .66
The pro forma amounts do not include amounts for stock options granted
before January 1, 1995. Therefore, the pro forma amounts may not be
representative of the disclosed effects on pro forma net income and net income
per share for future years.
The fair value of each option is estimated, as of the grant date, using the
Black-Scholes option pricing model with the following assumptions used for
grants in 1998, 1997 and 1996, respectively: no dividend yield for any year;
expected volatility of 33% to 36%; risk-free interest rates of 4.6% to 5.7%,
5.7% to 6.9% and 5.3% to 6.7%; and expected lives of 4.5 to 7.3 years for all
three years.
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE I--STOCK PLANS (CONTINUED)
The following table reflects activity under all stock plans from December
31, 1995 through December 31, 1998, and the weighted average exercise prices:
[Enlarge/Download Table]
STOCK OPTION PLANS
----------------------
WEIGHTED
AVERAGE
RESTRICTED NUMBER OF PRICE
STOCK PLANS SHARES PER SHARE
------------- ---------- ----------
Outstanding, December 31, 1995................................ 1,896,491 9,067,848 $ 6.04
Granted..................................................... 998,492 1,689,644 $ 20.94
Exercised................................................... -- (1,708,532) $ 2.41
Restrictions lapsed......................................... (412,329) -- --
Forfeited................................................... (9,099) (387,429) $ 9.33
------------- ---------- ----------
Outstanding, December 31, 1996................................ 2,473,555 8,661,531 $ 9.53
Granted..................................................... 847,469 1,944,656 $ 29.68
Exercised................................................... -- (1,446,404) $ 3.98
Restrictions lapsed......................................... (859,399) -- --
Forfeited................................................... (45,578) (515,537) $ 15.29
------------- ---------- ----------
Outstanding, December 31, 1997................................ 2,416,047 8,644,246 $ 14.52
Granted..................................................... 759,377 3,523,816 $ 40.11
Exercised................................................... -- (1,400,023) $ 6.04
Restrictions lapsed......................................... (737,938) -- --
Forfeited................................................... (25,066) (412,977) $ 26.05
------------- ---------- ----------
Outstanding, December 31, 1998................................ 2,412,420 10,355,062 $ 23.93
------------- ---------- ----------
------------- ---------- ----------
The following table summarizes information about options outstanding as of
December 31, 1998:
[Enlarge/Download Table]
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------------- ------------------------------
NUMBER NUMBER
OUTSTANDING AS WEIGHTED WEIGHTED EXERCISABLE AS WEIGHTED
OF AVERAGE AVERAGE OF AVERAGE
DECEMBER 31, REMAINING EXERCISE DECEMBER 31, EXERCISE
RANGE OF EXERCISE PRICES 1998 CONTRACTUAL LIFE PRICE 1998 PRICE
----------------------------------------- ---------------- ------------------- ------------- --------------- -------------
$1.44 to $8.00........................... 2,458,487 4.90 $ 5.16 2,296,205 $ 5.10
$8.58 to $19.46.......................... 2,216,922 7.02 $ 15.32 936,072 $ 14.68
$20.21 to $35.50......................... 2,094,117 8.27 $ 26.38 587,369 $ 25.59
$36.00 to $38.63......................... 2,126,734 9.65 $ 38.48 105,764 $ 37.91
$38.69 to $59.00......................... 1,458,802 9.42 $ 43.95 1,812 $ 40.57
---------------- --- ------ --------------- ------
10,355,062 7.65 $ 23.93 3,927,222 $ 11.35
---------------- --- ------ --------------- ------
---------------- --- ------ --------------- ------
At December 31, 1998, the total number of available shares to grant under
the plans (consisting of either restricted stock or options) was 561,863.
NOTE J--PREFERRED SHARE PURCHASE RIGHTS
Pursuant to the Company's stockholder rights agreement, each share of common
stock carries one right to purchase .0067 shares 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 $66.67 per right, subject to adjustment. Following
certain other events after the rights become exercisable, each right entitles
its holder to purchase for $66.67 an amount
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE J--PREFERRED SHARE PURCHASE RIGHTS (CONTINUED)
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 K--NET INCOME PER SHARE
The calculation of net income per share for the three years ended December
31, 1998 is reflected in the following table (in thousands, except per share
amounts):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
---------- --------- ---------
Net Income.................................................. $ 131,580 $ 93,697 $ 61,102
Basic:
Weighted average shares................................... 91,650 90,668 88,267
---------- --------- ---------
---------- --------- ---------
Diluted:
Weighted average shares................................... 91,650 90,668 88,267
Common stock equivalents--stock options................... 3,172 3,331 3,255
---------- --------- ---------
Diluted shares............................................ 94,822 93,999 91,522
---------- --------- ---------
---------- --------- ---------
Net Income Per Share:
Basic..................................................... $ 1.44 $ 1.03 $ .69
Diluted................................................... $ 1.39 $ 1.00 $ .67
NOTE L--QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tabulation shows certain quarterly financial data for 1998 and
1997 (in thousands, except per share amounts):
[Enlarge/Download Table]
QUARTER
---------------------------------------------- YEAR ENDED
1998 1 2 3 4 DECEMBER 31,
-------------------------------------------------- ---------- ---------- ---------- ---------- ------------
Net service revenues.............................. $ 401,296 $ 442,153 $ 470,650 $ 478,942 $1,793,041
Gross margin...................................... $ 160,971 $ 177,693 $ 190,033 $ 193,510 $ 722,207
Income before income taxes........................ $ 48,942 $ 54,426 $ 58,530 $ 59,278 $ 221,176
Net income........................................ $ 29,050 $ 32,280 $ 34,974 $ 35,276 $ 131,580
Basic net income per share........................ $ .32 $ .35 $ .38 $ .39 $ 1.44
Diluted net income per share...................... $ .31 $ .34 $ .37 $ .38 $ 1.39
QUARTER
---------------------------------------------- YEAR ENDED
1997 1 2 3 4 DECEMBER 31,
-------------------------------------------------- ---------- ---------- ---------- ---------- ------------
Net service revenues.............................. $ 283,023 $ 311,622 $ 339,754 $ 368,477 $1,302,876
Gross margin...................................... $ 111,894 $ 124,140 $ 135,200 $ 146,096 $ 517,330
Income before income taxes........................ $ 33,777 $ 37,613 $ 41,710 $ 45,728 $ 158,828
Net income........................................ $ 19,920 $ 22,210 $ 24,631 $ 26,936 $ 93,697
Basic net income per share........................ $ .22 $ .24 $ .27 $ .30 $ 1.03
Diluted net income per share...................... $ .21 $ .24 $ .26 $ .29 $ 1.00
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE M--BUSINESS SEGMENTS
In 1998, the Company adopted Statement of Financial Accounting Standard No.
131 (SFAS No. 131), DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION. The Company has defined its business segments based on the nature
of services for the purposes of reporting under SFAS No. 131. The Company is
managed in a matrix form of organization with certain managers responsible for
service lines while other managers are responsible for geographic territories.
As such, both service line and geographic information is used in allocating
resources and measuring performance.
The Company has two reportable segments: temporary and consultant staffing;
and permanent placement staffing. The temporary and consultant staffing segment
provides specialized personnel in the accounting and finance, administrative and
office, information technology, and legal fields. The permanent placement
staffing segment provides full-time personnel in the accounting, finance, and
legal fields.
The accounting policies of the segments are the same as those described in
Note A: Summary of Significant Accounting Policies. The Company evaluates
performance based on profit or loss from operations before interest expense,
intangible amortization expense, and income taxes.
The following table provides a reconciliation of revenue and operating
profit by reportable segment to consolidated results (in thousands):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------------
1998 1997 1996
------------ ------------ ----------
Net service revenues
Temporary and consultant staffing................... $ 1,652,678 $ 1,199,190 $ 826,283
Permanent placement staffing........................ 140,363 103,686 72,352
------------ ------------ ----------
$ 1,793,041 $ 1,302,876 $ 898,635
------------ ------------ ----------
------------ ------------ ----------
Operating income
Temporary and consultant staffing................... $ 185,007 $ 132,416 $ 89,756
Permanent placement staffing........................ 35,574 27,148 17,051
------------ ------------ ----------
220,581 159,564 106,807
Amortization of intangible assets..................... 4,993 4,926 5,405
Interest income, net.................................. (5,588) (4,190) (2,243)
------------ ------------ ----------
Income before income taxes............................ $ 221,176 $ 158,828 $ 103,645
------------ ------------ ----------
------------ ------------ ----------
The Company does not report total assets by segment. The following table
represents identifiable assets by business segment (in thousands):
[Enlarge/Download Table]
DECEMBER 31,
--------------------------------------
1998 1997 1996
------------ ------------ ----------
Accounts receivable
Temporary and consultant staffing................... $ 229,841 $ 176,185 $ 117,533
Permanent placement staffing........................ 21,025 17,878 11,866
------------ ------------ ----------
$ 250,866 $ 194,063 $ 129,399
------------ ------------ ----------
------------ ------------ ----------
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE M--BUSINESS SEGMENTS (CONTINUED)
The Company operates internationally, with operations in the United States,
Canada, Europe, and Australia. The following tables represent revenues and
long-lived assets by geographic location (in thousands):
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
--------------------------------------
1998 1997 1996
------------ ------------ ----------
Revenues
Domestic............................................ $ 1,595,029 $ 1,176,888 $ 812,753
Foreign............................................. 198,012 125,988 85,882
------------ ------------ ----------
$ 1,793,041 $ 1,302,876 $ 898,635
------------ ------------ ----------
------------ ------------ ----------
[Enlarge/Download Table]
DECEMBER 31,
--------------------------------------
1998 1997 1996
------------ ------------ ----------
Assets, long-lived
Domestic............................................ $ 253,514 $ 209,457 $ 183,990
Foreign............................................. 19,799 17,905 17,208
------------ ------------ ----------
$ 273,313 $ 227,362 $ 210,198
------------ ------------ ----------
------------ ------------ ----------
21
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, 1998 and 1997, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1998. 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, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
San Francisco, California
January 22, 1999
22
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 1999.
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, 1998 and
1997.
Consolidated statements of income for the years ended December 31, 1998,
1997 and 1996.
Consolidated statements of stockholders' equity for the years ended
December 31, 1998, 1997 and 1996.
Consolidated statements of cash flows for the years ended December 31,
1998, 1997 and 1996.
Notes to consolidated financial statements.
Report of independent public accountants.
Selected quarterly financial data for the years ended December 31, 1998 and
1997 are set forth in Note L--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
[Download Table]
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 September 30, 1998.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
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).
23
[Download Table]
EXHIBIT
NO. EXHIBIT
------- ---------------------------------------------------------------------------
4.3 Rights Agreement, dated as of July 23, 1990, between the Registrant and The
Chase Manhattan Bank (formerly Manufacturers Hanover Trust Company of
California), as amended and restated effective April 30, 1997, incorporated
by reference to Exhibit 1 to Registrant's Form 8-A/A Amendment No. 4 filed
on May 1, 1997.
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, as amended, incorporated by reference to (i) Exhibit
10 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1993, (ii) Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1995, (iii)
Exhibit 10.1 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, and (iv) Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997.
*10.2 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Thirteenth Amendment to the Employment
Agreement is filed with this Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. The original Employment Agreement and the first
twelve 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, (ix) Exhibit 10.1 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1995, (x) Exhibit 10.7 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1996 and (xii) Exhibit 10.2 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997.
*10.3 Key Executive Retirement Plan--Level II, as amended, incorporated by
reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
*10.4 Restated Retirement Agreement between the Registrant and Harold M. Messmer,
Jr., incorporated by reference to Exhibit 10.4 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996.
*10.5 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997.
*10.6 Excise Tax Restoration Agreement dated November 5, 1996, incorporated by
reference to Exhibit 10.6 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
*10.7 Outside Directors' Option Plan, as amended, incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1998.
*10.8 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1997.
*10.9 StockPlus Plan, as amended, incorporated by reference to Exhibit 10.9 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
*10.10 1993 Incentive Plan, as amended, incorporated by reference to Exhibit 10.10
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
24
[Download Table]
EXHIBIT
NO. EXHIBIT
------- ---------------------------------------------------------------------------
*10.11 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.
*10.12 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.5 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.
*10.13 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.
*10.14 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.
*10.15 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.
*10.16 Senior Executive Retirement Plan, as amended, incorporated by reference to
Exhibit 10.16 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
*10.17 Collateral Assignment of Split Dollar Insurance Agreement, incorporated by
reference to Exhibit 10.17 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
*10.18 Form of Consulting Agreement.
21 Subsidiaries of the Registrant.
23 Accountants' Consent
27 Financial Data Schedule.
------------------------
* 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 filed no reports on Form 8-K during the fiscal quarter
ending December 31, 1998.
25
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 16, 1999 By: /S/ M. KEITH WADDELL
------------------------------------
M. Keith Waddell
Senior Vice President, Chief
Financial
Officer and Treasurer
(Principal Financial Officer)
26
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.
[Download Table]
Date: March 16, 1999 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 16, 1999 By: /S/ ANDREW S. BERWICK, JR.
------------------------------------------
Andrew S. Berwick, Jr., Director
Date: March 16, 1999 By: /S/ FREDERICK P. FURTH
------------------------------------------
Frederick P. Furth, Director
Date: March 16, 1999 By: /S/ EDWARD W. GIBBONS
------------------------------------------
Edward W. Gibbons, Director
Date: March 16, 1999 By: /S/ FREDERICK A. RICHMAN
------------------------------------------
Frederick A. Richman, Director
Date: March 16, 1999 By: /S/ THOMAS J. RYAN
------------------------------------------
Thomas J. Ryan, Director
Date: March 16, 1999 By: /S/ J. STEPHEN SCHAUB
------------------------------------------
J. Stephen Schaub, Director
Date: March 16, 1999 By: /S/ M. KEITH WADDELL
------------------------------------------
M. Keith Waddell
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
Date: March 16, 1999 By: /S/ BARBARA J. FORSBERG
------------------------------------------
Barbara J. Forsberg
Vice President and Controller
(Principal Accounting Officer)
27
EXHIBIT INDEX
[Download Table]
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 September 30, 1998.
3.2 By-Laws, incorporated by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
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 The
Chase Manhattan Bank (formerly Manufacturers Hanover Trust Company of
California), as amended and restated effective April 30, 1997, incorporated
by reference to Exhibit 1 to Registrant's Form 8-A/A Amendment No. 4 filed
on May 1, 1997.
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, as amended, incorporated by reference to (i) Exhibit
10 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1993, (ii) Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1995, (iii)
Exhibit 10.1 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, and (iv) Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997.
*10.2 Employment Agreement dated as of October 2, 1985, between the Registrant
and Harold M. Messmer, Jr. The Thirteenth Amendment to the Employment
Agreement is filed with this Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. The original Employment Agreement and the first
twelve 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, (ix) Exhibit 10.1 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1995, (x) Exhibit 10.7 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, (xi) Exhibit 10.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1996 and (xii) Exhibit 10.2 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997.
*10.3 Key Executive Retirement Plan--Level II, as amended, incorporated by
reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
*10.4 Restated Retirement Agreement between the Registrant and Harold M. Messmer,
Jr., incorporated by reference to Exhibit 10.4 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996.
*10.5 1985 Stock Option Plan, as amended, incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997.
*10.6 Excise Tax Restoration Agreement dated November 5, 1996, incorporated by
reference to Exhibit 10.6 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
[Download Table]
EXHIBIT
NO. EXHIBIT
------- ---------------------------------------------------------------------------
*10.7 Outside Directors' Option Plan, as amended, incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1998.
*10.8 1989 Restricted Stock Plan, as amended, incorporated by reference to
Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1997.
*10.9 StockPlus Plan, as amended, incorporated by reference to Exhibit 10.9 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
*10.10 1993 Incentive Plan, as amended, incorporated by reference to Exhibit 10.10
to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
*10.11 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.
*10.12 Annual Performance Bonus Plan, incorporated by reference to Exhibit 10.5 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.
*10.13 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.
*10.14 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.
*10.15 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.
*10.16 Senior Executive Retirement Plan, as amended, incorporated by reference to
Exhibit 10.16 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
*10.17 Collateral Assignment of Split Dollar Insurance Agreement, incorporated by
reference to Exhibit 10.17 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
*10.18 Form of Consulting Agreement.
21 Subsidiaries of the Registrant.
23 Accountants' Consent
27 Financial Data Schedule.
------------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14(c) of Form 10-K.
Dates Referenced Herein and Documents Incorporated by Reference
4 Subsequent Filings that Reference this Filing
↑Top
Filing Submission 0001047469-99-010073 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Wed., May 1, 3:15:07.1pm ET 
