SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------------- Form 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------------------------- (Mark One) ( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 1999 or ( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____________ to _____________ Commission File No. 000-24484 A. Full title and address of the plan, if different from that of the issuer named below: MODIS PROFESSIONAL SERVICES, INC. RETIREMENT SAVINGS PLAN ONE INDEPENDENT DRIVE JACKSONVILLE, FLORIDA 32202 (904) 360-2000 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: MODIS PROFESSIONAL SERVICES, INC. ONE INDEPENDENT DRIVE JACKSONVILLE, FLORIDA 32202 (904) 360-2000 REQUIRED INFORMATION The following financial statements and schedules have been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended: 1. Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998. 2. Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1999. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized on this 28th day of June 2000. MODIS PROFESSIONAL SERVICES, INC. RETIREMENT SAVINGS PLAN By: MODIS PROFESSIONAL SERVICES, INC. (Plan Administrator) By: /s/ Robert P. Crouch -------------------- Robert P. Crouch, Vice President & Chief Accounting Officer -1- MODIS PROFESSIONAL SERVICES, INC. RETIREMENT SAVINGS PLAN REPORT ON AUDITS OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998 TABLE OF CONTENTS Report of Independent Certified Public Accountants 3 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 4 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1999 5 Notes to Financial Statements 6 Supplemental Schedules: Schedule of Assets Held for Investment Purposes at End of Year 10 Schedule of Loans or Fixed Income Obligations in Default or Classified as Uncollectible 11 Schedule of Leases in Default or Classified as Uncollectible 12 Schedule of Reportable Transactions 13 Schedule of Nonexempt Transactions 14 -2- Report of Independent Certifified Public Accountants To the Participants and Administrator of Modis Professional Services, Inc. Retirement Savings Plan In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Modis Professional Services, Inc. (the Company) Retirement Savings Plan (the Plan) at December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plans management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As described in Note 8, during 1999 the Plan was amended to include the defined contribution plans of three subsidiaries. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Modis Professional Services, Inc. Retirement Savings Plan as listed in the index, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP Jacksonville, Florida June 26, 2000 -3- Modis Professional Services, Inc. Retirement Savings Plan Statements of Net Assets Available for Benefits As of December 31, 1999 and 1998 1999 1998 Assets Investments, at fair value: Money market funds $10,322,988 $7,551,894 Mutual fund pooled accounts 97,632,294 49,808,179 Participant notes receivable 1,112,529 614,663 ----------------- ---------------- Total investments 109,067,811 57,974,736 Receivables: Participants' contributions 920,527 739,559 Employer's contribution 263,278 855,192 Accrued income - 1,927 ----------------- ---------------- Total receivables 1,183,805 1,596,678 Transfer from merged plan 8,001,749 9,436,990 ----------------- ---------------- Net assets available for benefits $118,253,365 $ 69,008,404 ----------------- ---------------- The accompanying notes are an integral part of these financial statements. -4- Modis Professional Services, Inc. Retirement Savings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1999 Additions Additions to net assets attributed to: Investment income: Net appreciation in fair value of investments $14,106,801 Interest 119,018 Dividends 7,106,329 ---------------- 21,332,148 ---------------- Contributions: Participants' 24,244,198 Participants' rollovers 2,181,206 Employer's 5,899,309 ---------------- 32,324,713 ---------------- Total additions 53,656,861 ---------------- Deductions Deductions from net assets attributed to: Benefits paid to participants 16,599,629 Other 5,734 ---------------- Total deductions 16,605,363 ---------------- Net increase prior to transfers 37,051,498 Transfers from merged plans 12,132,867 Transfers from other Modis plans 310 Net assets transferred from Randstad Employee Savings Plan 60,286 ---------------- Net increase 49,244,961 Net assets available for benefits: Beginning of year 69,008,404 ---------------- End of year $118,253,365 ---------------- The accompanying notes are an integral part of these financial statements. -5- Modis Professional Services, Inc. Retirement Savings Plan Notes to Financial Statements 1. Description of Plan The following description of the Modis Professional Services, Inc. (the Company) Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General - The Plan, which was adopted July 1, 1997, is a defined contribution plan covering professional employees of Modis Professional Services, Inc. who are age 21 or older and have completed at least 375 hours of service during any 90 consecutive day period or one year of service. To continue to vest in Company contributions, a participant must work at least 1,000 hours each year. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions - Employer contributions to the Plan are at the discretion of the Company equal to a uniform percentage of the amount of the salary elected to be deferred. Participants may elect to defer and contribute to the Plan up to 15% of their annual compensation, within the limitations prescribed by law, and under the provisions of the Plan. Individual participants' contributions are limited to an annual IRS maximum amount ($10,000 for the plan year ended December 31, 1999). Investment Options - Under the provisions of the Plan, participants may direct their contributions to be invested in various pooled accounts of the Strong Mutual Fund Company. Contributions may be invested in one account or allocated among different accounts. Changes in allocation of contributions among accounts are permitted pursuant to contract provisions. Accounts available to participants and the related investment objective are summarized as follows: Strong Money Market - This Fund seeks current income, a stable share price and daily liquidity. The Fund invests in corporate, bank and government instruments that present minimal credit risk. Strong Government Securities - This Fund seeks total return by investing for a high level of current income with a moderate degree of share-price fluctuation. The Fund normally invests at least 80% of its net assets in U.S. government securities. Strong Asset Allocation - This Fund seeks high total return consistent with reasonable risk over the long term. The Fund pursues this objective by allocating its assets among stocks, bonds and cash. Strong Common Stock - This Fund seeks capital growth. The Fund invests at least 80% of its net assets in equity securities. It currently emphasizes small companies that the advisor believes are under-researched and attractively valued. Strong Growth - This Fund seeks capital growth. It invests primarily in securities that the advisor believes have above-average growth prospects. Strong Growth and Income - This Fund seeks high total return by investing for capital growth and income. The Fund invests primarily in companies that pay current dividends and offer potential growth of earnings. Strong Index 500 - This Fund seeks to approximate as closely as practicable (before fees and expenses) the capitalization weighted total rate of return of that portion of the U.S. market for publicly traded common stocks composed of the larger capitalization companies. Strong International Stock - This Fund seeks capital growth. It invests primarily in the equities securities of issuers located outside the United States. Strong Schafer Value - This Fund's primary investment objective is long-term capital appreciation. The Fund invests principally in common stocks and other equity securities. Current income is a secondary objective in the selection of investments. -6- Strong Opportunity - This Fund seeks capital growth. The Fund invests at least 70% of its net assets in equity securities. It currently emphasizes medium-sized companies that the advisor believes are under-researched and attractively valued. Modis Stock Pool - This Fund was created specifically for Modis employees. The fund purchases 95% of its value in Modis Stock. Five percent is held in the Strong Money Market Fund. The combined value is unitized. The participant then invests in these units. Earnings Allocation - Plan earnings are allocated to participants' accounts based upon their individual account balances as of each valuation date, less any withdrawals made during the year. Forfeiture Allocation - Forfeitures of the non-vested portion of terminated participants' accounts related to the provisions of the Plan would result in a reduction of the Company's contributions in the year of such forfeiture. In 1999, employer contributions were reduced by approximately $827,000 from forfeited non-vested accounts. Vesting - Employee contributions plus actual earnings thereon are fully vested at all times. Employer contributions made on behalf of each participant are not vested until the employee completes four years of service, at which time the participant becomes fully vested. In the event of death or total and permanent disability while under the Company's employment, all amounts credited to the participant's account as of the subsequent plan anniversary date are considered fully vested. Payment of Benefits - Upon retirement, death or disability, a participant or participant's beneficiary will receive a lump sum amount equal to the value of his or her account. In the case of termination other than death, disability or retirement, the employee is entitled to receive 100% of the vested account balance. Participant Notes Receivable - Participants may receive loans from the Plan within limits established by rules under the Internal Revenue Code. All loans must be collateralized. A participant may use up to one-half of his or her non-forfeitable account balance under the Plan to collateralize a loan. Loans require periodic payments with principal amortized over a period not to exceed five years, except for loans to acquire a principal residence, which require periodic payments over a reasonable period determined at the date the loan is made. All loans are considered a directed investment from a participant's account under the Plan. All payments of principal and interest by a participant on a loan are credited to his or her account. 2. Summary of Significant Accounting Policies Basis of Accounting - The financial statements of the Plan are prepared under the accrual method of accounting. Administrative Expenses - All expenses of administration may be paid out of the Plan's funds or by the Company. Investment Valuation and Income Recognition - The Plan's investments are stated at fair value based upon quoted market prices. The Modis Stock Pool is valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Gains or losses on the sale of investments are based on the cost or adjusted value of each specific investment. The Plan presents in the statement of changes in net assets available for benefits the net appreciation in fair value of its investments which consists of the realized gains or losses and the unrealized appreciation on these investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. -7- Risks and Uncertainties - The Plan provides for various investment options in any combination of fixed income securities and mutual funds. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. Benefits - Benefits are recorded when paid. 3. Investments Investments which exceeded 5% of the Plan's net assets at December 31, 1999 and 1998 are summarized as follows: Investments at Fair Value as Determined by Quoted Market Price: 1999 1998 --------------- -------------- Strong Money Market $10,322,988 $7,551,894 Strong Mutual Funds pooled accounts: Government Securities 8,371,798 5,940,232 Common Stock 18,741,607 11,112,930 Growth 25,338,051 9,698,290 Growth and Income 7,131,765 - Index 500 16,970,018 7,451,853 Schafer Value 9,091,957 10,003,355 4. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan agreement to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become fully vested in their accounts. 5. Tax Status The Internal Revenue Service has determined and informed the Company by letter dated August 20, 1998 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 6. Financial Instruments Certain financial instruments potentially subject the Plan to concentrations of credit risk. These financial instruments consist of money market funds and pooled accounts with a mutual fund company. The Plan limits its credit risk by maintaining its money market funds and pooled accounts with what it believes to be high quality financial institutions. -8- 7. Related Party Transactions Certain Plan expenses for accounting, legal and administrative services were paid for by the Company. These expenses were approximately $165,000 and $138,000 in 1999 and 1998, respectively. Employees can elect to allocate their contributions to the purchase of Modis Company stock units, via the Modis Stock Pool Fund. 8. Merger of Subsidiary Plans During 1999, the Plan was amended to include the defined contribution plans of three subsidiaries. The following table details the subsidiary, merger date and amounts of assets transferred into the Modis plan. Subsidiary Date Amount - ------------------------------------------------------------------------------------------ ----------------- Berger & Co. Taxsaver 401(k) Salary Reduction Plan July 31, 1999 $ 3,143,511 Zeal, Inc. 401(k) Retirement & Savings Plan August 31, 1999 987,607 Actium 401(k) Plan December 31, 1999 8,001,749 ----------------- $ 12,132,867 ----------------- The assets for the Actium 401(k) Plan are reflected in the 1999 statement of net assets available for benefits and in the 1999 statement of changes in net assets available for benefits as transfer from merged plan. 9. Subsequent Events Two subsidiary 401(k) plans are scheduled to convert into the Plan before December 31, 2000. Effective January 1, 2000, the Plan has been amended so that any eligible employee who has completed 375 hours of service during a three consecutive calendar month period or one year of service shall be eligible to participate in the Plan as of the date he or she has satisfied such requirements. -9- Supplemental Schedules Modis Professional Services, Inc. Retirement Savings Plan Schedule of Assets Held for Investment Purposes at End of Year As of December 31, 1999 Fair Value ----------------- Strong Money Market $ 10,322,988 Strong Mutual Funds: Government Securities 8,371,798 Asset Allocation 4,379,012 Common Stock 18,741,607 Growth 25,338,051 Growth and Income 7,131,765 Index 500 16,970,018 International Stock 5,095,212 Schafer Value 9,091,957 Modis Stock Pool 2,512,874 Participant notes receivable with interest rates ranging from 7.0% to 10.5% 1,112,529 ----------------- Total investments $109,067,811 ----------------- -10- Modis Professional Services, Inc. Retirement Savings Plan Schedule of Loans or Fixed Income Obligations in Default or Classified as Uncollectible As of December 31, 1999 The Plan had no loans or fixed income obligations in default or classified as uncollectible that are required to be disclosed in the Schedule of Loans or Fixed Income Obligations in Default or Classified as Uncollectible as of December 31, 1999. -11- Modis Professional Services, Inc. Retirement Savings Plan Schedule of Leases in Default or Classified as Uncollectible As of December 31, 1999 The Plan had no leases in default or classified as uncollectible that are required to be disclosed in the Schedule of Leases in Default or Classified as Uncollectible as of December 31, 1999. -12- Modis Professional Services, Inc. Retirement Savings Plan Schedule of Reportable Transactions For the Year Ended December 31, 1999 The Plan executed no reportable transactions that are required to be disclosed in the Schedule of Reportable Transactions for the year ended December 31, 1999. -13- Modis Professional Services, Inc. Retirement Savings Plan Schedule of Nonexempt Transactions For the Year Ended December 31, 1999 Identity of Description of Earnings lost from Party Involved Relationship Transactions late contributions - ----------------------------- ----------------------- ------------------------------ -------------------------- Modis Professional Plan Sponsor Employer segregrated $6,047 Services, Inc. employee contributions after the 15th business day following the end of the month in which amounts were withheld from employee wages. During the year, the employer funded all earnings lost from late contributions to the respective employees' accounts. -14-