Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Disclosure Controls and Procedures. Management, including the Company’s President and Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Securities Exchange Act of 1934 that occurred during the Company’s fourth quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting . Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and concluded that the Company maintained effective internal control over financial reporting as of December 31, 2020.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
Item 9B. Other Information
None.
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PART III
Except as provided below in this Part III, the information required by Items 10 through 14 of Part III is incorporated by reference from Item 1 of this Report and from the registrant’s Proxy Statement, under the captions “Nomination and Election of Directors,” “Beneficial Stock Ownership,” “Compensation Discussion and Analysis,” “Compensation Tables,” “Corporate Governance,” “The Board and Committees” and “Independent Registered Public Accounting Firm” 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 2021.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:
Page(s)
Consolidated statements of financial position at December 31, 2020 and 2019
27
Consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018
28
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2020, 2019, and 2018
29
Consolidated statements of stockholders’ equity for the years ended December 31, 2020, 2019, and 2018
30
Consolidated statements of cash flows for the years ended December 31, 2020, 2019, and 2018
31
Notes to consolidated financial statements 32-50
Report of independent registered public accounting firm
51-53
Selected quarterly financial data for the years ended December 31, 2020 and 2019 are set forth in Note Q—Quarterly Financial Data (Unaudited) included in Item 8 of this report.
50
2. Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019, and 2018
63
Schedules I, III, IV and V have been omitted as they are not applicable.
57
3. Exhibits
Exhibit
No. Exhibit
3.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 .
3.2 Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K dated February 13, 2020.
4.1 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .
*10.1 Form of Power of Attorney and Indemnification Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002 .
*10.2 Employment Agreement between the Registrant and Harold M. Messmer, Jr., 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(P), (ii) Exhibit 10.2(b) to Registrant’s Registration Statement on Form S-1 (No. 33-15171)(P), (iii) Exhibit 10.2(c) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1987(P), (iv) Exhibit 10.2(d) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988(P), (v) Exhibit 28.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1990(P), (vi) Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991(P), (vii) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1993(P), (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 , (xii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 , (xiii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 , (xiv) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 , (xv) Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004 , (xvi) Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008 , (xvii) Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 , (xviii) Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated November 7, 2019 , and (xix) Exhibit 10.1 to the Registrant's Quarterly Re port on Form 10-Q for the quarter ended March 31, 2020 .
*10.3 Amended and Restated Deferred Compensation Plan, incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2008 .
*10.4 Amended and Restated Severance Agreement dated as of February 9, 2011, between Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.8 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 .
*10.5 Agreement dated as of July 31, 1995, between Registrant and Paul F. Gentzkow, incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000 .
*10.6 Form of Amended and Restated Severance Agreement, incorporated by reference to Exhibit 10.10 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 .
*10.7 Form of Indemnification Agreement for Directors of the Registrant, incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989(P).
*10.8 Form of Indemnification Agreement for Executive Officers of Registrant, incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000 .
*10.9 Senior Executive Retirement Plan, as amended and restated December 15, 2019 , incorporated by reference to to Exhibit 10.9 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 .
58
Exhibit
No. Exhibit
*10.10 Form of Part-Time Employment Agreement, as amended and restated, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 .
*10.11 Annual Performance Bonus Plan, as amended and restated, incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K dated May 23, 2013 .
*10.12 Summary of Outside Director Cash Remuneration, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2010 .
*10.13 Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 99.1 to the Registrant’s Current Stock Incentive Plan, as amended and restated, incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated May 22, 2019 .
*10.14 Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective through February 11, 2020, incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2013 .
*10.15 Stock Incentive Plan—Form of Stock Option Agreement for Executive Officers, incorporated by reference to Exhibit 99.4 to Registrant’s Current Report on Form 8-K dated May 3, 2005 .
*10.16 Stock Incentive Plan—Form of Restricted Share Agreement for Outside Directors effective through October 2 8 , 2020 , incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006 .
*10.17 Stock Incentive Plan—Form of Stock Option Agreement for Outside Directors, incorporated by reference to Exhibit 99.6 to Registrant’s Current Report on Form 8-K dated May 3, 2005 .
*10.18 Stock Incentive Plan—Form of Restricted Share Agreement for Executive Officers effective through October 2 8 , 2 020 , incorporated by reference to Exhibit 10.18 to Registrant's Annual Report on Form 10-K for the fiscal year ended De cember 31, 2019 .
*10.19 Stock Incentive Plan – Form of Restricted Share Agreement for Executive Officers effective October 29, 2020, incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020.
*10.20 Stock Incentive Plan – Form of Restricted Share Agreement for Independent Directors effective October 29, 2020, incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020.
21.1 Subsidiaries of the Registrant
23.1 Independent Registered Public Accounting Firm’s Consent .
31.1 Rule 13a-14(a) Certification of Chief Rule 13a-14(a) Certification of Chief Executive Officer.
31.2 Rule 13a-14(a) Certification of Chief Financial Officer .
32.1 Rule 1350 Certification of Chief Executive Officer .
32.2 Rule 1350 Certification of Chief Rule 1350 Certification of Chief Financial Officer.
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
59
* Management contract or compensatory plan.
(P) This Exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided.
60
Item 16. Form 10-K Summary
None.
61
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: February 12, 2021 By: /s/ M ICHAEL C. B UCKLEY
Michael C. Buckley
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: February 12, 2021 By: /s/ H AROLD M. M ESSMER , J R .
Harold M. Messmer, Jr.
Executive Chairman of the Board,
and a Director
Date: February 12, 2021 By: /s/ M. K EITH W ADDELL
M. Keith Waddell
President
Chief Executive Officer and a Director
(Principal Executive Officer)
Date: February 12, 2021 By: /s/ J ULIA L. C ORONADO
Julia L. Coronado, Director
Date: February 12, 2021 By: /s/ D IRK A. K EMPTHORNE
Dirk A. Kempthorne, Director
Date: February 12, 2021 By: /s/ M ARC H. M ORIAL
Marc H. Morial, Director
Date: February 12, 2021 By: /s/ B ARBARA J. N OVOGRADAC
Barbara J. Novogradac, Director
Date: February 12, 2021 By: /s/ R OBERT J. P ACE
Robert J. Pace, Director
Date: February 12, 2021 By: /s/ F REDERICK A. R ICHMAN
Frederick A. Richman, Director
Date: February 12, 2021 By: /s/ M ICHAEL C. B UCKLEY
Michael C. Buckley
Executive Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
62
Schedule II—Valuation and Qualifying Accounts
(in thousands)
Balance at
Beginning of
Period Charged to
Expenses Deductions Translation
Adjustments Balance at
End of Period
Year Ended December 31, 2018
Allowance for doubtful accounts receivable $ 23,682 (a) 11,914 ( 8,690 ) 772 $ 27,678
Deferred tax valuation allowance $ 20,178 5,683 ( 2,599 ) ( 190 ) $ 23,072
Year Ended December 31, 2019
Allowance for doubtful accounts receivable $ 27,678 9,868 ( 8,687 ) ( 103 ) $ 28,756
Deferred tax valuation allowance $ 23,072 719 ( 2,154 ) ( 19 ) $ 21,618
Year Ended December 31, 2020
Allowance for credit losses $ 23,443 (b) 4,200 ( 7,906 ) ( 120 ) $ 19,617
Deferred tax valuation allowance $ 21,618 3,462 ( 2,333 ) 1,385 $ 24,132
(a) In accordance with its adoption of ASC 606 Revenue from Contracts with Customers, on January 1, 2018, the Company reclassified certain allowances that are now reflected as liabilities in the amount of $ 9.5 million.
(b) In accordance with its adoption of ASC 326 Current Expected Credit Losses Model, on January 1, 2020, the Company established allowances based on expected losses due to credit risk of its customers.
63