As filed with the Securities and Exchange Commission on October 8, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Circle International Group Savings Plan
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
Circle International Group, Inc.
260 Townsend Street
San Francisco, CA 94107-0933
<PAGE>
REQUIRED INFORMATION
1. [The financial statements of the Circle International Group Savings
Plan as of December 31, 1997 and 1996 including the statements of net assets as
of December 31, 1997 and 1996, the statements of changes in net assets for years
ended December 31, 1997 and 1996, the schedule of assets held for investment
purposes as of December 31, 1997 and 1996, and the schedule of reportable
transactions for the years ended December 31, 1997 and 1996, together with the
report of independent auditors, are contained in Exhibit 1 to this Annual
Report.] [OR INDEPENDENT AUDITORS TO FURNISH OTHER DESCRIPTION OF THE FINANCIAL
STATEMENTS]
2. Consent of Independent Auditors is contained in Exhibit 2 to this
Annual Report.
SIGNATURES
The Plan. 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.
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
Date:___________, 1998 By: /s/ Robert H. Kennis
---------------------
Robert H. Kennis
Vice President, Secretary
and General Counsel
2
<PAGE>
EXHIBIT 1
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
--------------------------
3
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
(Formerly The Harper Group Savings Plan)
Financial Statements and
Form 5500 Supplemental Schedule G
Years ended December 31, 1997 and 1996
--------------------------------------
Table of Contents
Independent Accountants' Report............................................5-6
Financial Statements:
Statements of Net Assets Available for Plan Benefits.........................7
Statements of Changes in Net Assets Available for Plan Benefits..............8
Notes to Financial Statements................................................9
Form 5500 Supplemental Schedules as of and for the year ended
December 31, 1997........................................................14
27a, Part I - Schedule of Assets Held for Investment Purposes
27d, Part V - Schedule of Reportable Transactions
4
<PAGE>
To the Participants and Plan
Administrator of the Circle International Group
Savings Plan
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
We have audited the financial statements and supplemental schedules of the
Circle International Group Savings Plan [formerly The Harper Group Savings Plan]
(the Plan) as of December 31, 1997 and 1996, and for the years then ended, as
listed in the accompanying table of contents. These financial statements are the
responsibility of the Plan'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 audits 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 the
Plan's 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 net assets available for plan benefits of the Plan
as of December 31, 1997 and 1996, and the changes in net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
5
<PAGE>
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules 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 fund information
in the statement of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the changes
in net assets available for plan benefits for each fund. The supplemental
schedules and fund information 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.
/s/ MOHLER, NIXON & WILLIAMS
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
August 5, 1998
6
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
-------------------------------
1997 1996
------------ -------------
Cash $287,048 $143,773
Investments, at fair value 25,674,207 21,538,456
------------ -------------
Assets held for investment purposes 25,961,255 21,682,229
Employer's contribution receivable 68,630
Participants' contributions receivable 186,840
------------ -------------
Total assets 25,961,255 21,937,699
Excess contributions refundable (35,837)
------------ -------------
Net assets available for plan benefits $25,961,255 $21,901,862
============ =============
See independent accountants' report
and accompanying notes to financial statements.
7
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the years ended December 31, 1997 and 1996
----------------------------------------------
BZW Barclays Global Investors National Association
--------------------------------------------------
<CAPTION>
Circle 3-Way
International S & P 500 Asset Income Bond International
Group Money Market Index Allocation Accumulation Index Equity
Stock Fund Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1995 $ 3,434,125 $ 2,390,724 $ 4,258,472 $ 3,726,012 $ 55,049 $ 1,471 $ 1,462,966
----------- ----------- ----------- ----------- ----------- --------- -----------
Employer's contribution 68,849 130,119 252,452 170,107 0 0 91,758
Participants' contributions/rollovers 227,426 516,873 777,933 505,025 0 0 337,407
Withdrawals/distributions (248,178) (519,720) (562,253) (346,837) 0 (2) (216,594)
Dividends and interest 0 145,986 193,287 406,641 3,191 95 0
Net appreciation (depreciation) in
fair value of investments 981,957 0 851,620 50,700 0 (64) 86,980
Administrative fees (288) (576) (1,048) (549) 0 0 (303)
Transfers in (out) (1,032,000) 224,447 524,293 (70,597) 0 (29) 104,711
----------- ----------- ----------- ----------- ----------- --------- -----------
Increase (decrease) in net assets (2,234) 497,129 2,036,284 714,490 3,191 0 403,959
----------- ----------- ----------- ----------- ----------- --------- -----------
Net assets available for plan
1 benefits at December 31, 1996 3,431,891 2,887,853 6,294,756 4,440,502 58,240 1,471 1,866,925
----------- ----------- ----------- ----------- ----------- --------- -----------
Employer's contribution 89,733 154,106 360,423 200,385 0 0 110,302
Participants' contributions/rollovers 237,920 444,534 1,106,753 552,249 0 0 307,806
Withdrawals/distributions (330,180) (608,211) (1,080,688) (588,294) 0 0 (250,902)
Dividends and interest 0 150,184 333,452 677,658 3,604 102 0
Net appreciation (depreciation) in
fair value of investments (30,946) 12,490 1,936,354 324,281 0 41 20,205
Administrative fees (932) (1,640) (3,385) (1,845) 0 0 (799)
Transfers in (out) (112,700) (71,092) 623,282 (121,711) 0 0 (296,710)
----------- ----------- ----------- ----------- ----------- --------- -----------
Increase (decrease) in net assets (147,105) 80,371 3,276,191 1,042,723 3,604 143 (110,098)
----------- ----------- ----------- ----------- ----------- --------- -----------
Net assets available for plan
benefits at December 31, 1997 $ 3,284,786 $ 2,968,224 $ 9,570,947 $ 5,483,225 $ 61,844 $ 1,614 $ 1,756,827
=========== =========== =========== =========== =========== ========= ===========
<CAPTION>
U.S. Treasury Excess
Allocation Participant Contribution Contributions
Fund Cash Loans Receivable Refundable Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1995 $ 1,344,013 $ 66,491 $ 972,004 $ 0 $ 0 $ 17,711,327
------------ ------------ ------------ ------------ ------------ ------------
Employer's contribution 64,449 0 0 68,630 0 846,364
Participants' contributions/rollovers 189,006 0 0 186,840 (35,837) 2,704,673
Withdrawals/distributions (194,750) (1,949) (128,548) 0 0 (2,218,831)
Dividends and interest 70,381 3,993 99,100 0 0 922,674
Net appreciation (depreciation) in
fair value of investments (26,912) 0 0 0 0 1,944,281
Administrative fees (223) (5,639) 0 0 0 (8,626)
Transfers in (out) (56,440) 80,877 224,738 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 45,511 77,282 195,290 255,470 (35,837) 4,190,535
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at December 31, 1996 1,389,524 143,773 1,167,294 255,470 (35,837) 21,901,862
------------ ------------ ------------ ------------ ------------ ------------
Employer's contribution 69,700 0 0 (68,630) 0 916,019
Participants' contributions/rollovers 177,823 0 0 (186,840) 35,837 2,676,082
Withdrawals/distributions (133,195) (6,215) (186,756) (3,176) 0 (3,187,617)
Dividends and interest 90,536 10,697 123,660 0 0 1,389,893
Net appreciation (depreciation) in
fair value of investments 11,967 0 0 0 0 2,274,392
Administrative fees (726) (49) 0 0 0 (9,376)
Transfers in (out) (116,767) 138,842 (46,320) 3,176 0 0
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 99,338 143,275 (109,416) (255,470) 35,837 4,059,393
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at December 31, 1997 $ 1,488,862 $ 287,048 $ 1,057,878 $ 0 $ 0 $ 25,961,255
============ ============ ============ ============ ============ ============
See independent accountants' report and
accompanying notes to financial statements.
</TABLE>
8
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
--------------------------
Note 1 - The Plan and its significant accounting policies:
The following description of the Circle International Group Savings Plan
(the Plan) provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan that was established in 1973 by The
Harper Group, Inc. to provide benefits to eligible employees. The Plan covers
all full-time employees of Circle International Group, Inc. and its affiliated
companies: Circle International, Inc., J R Michels, Inc., and Circle Trade
Services Ltd. (collectively referred to as the Company), who have a minimum of
six months of service and are age 18 or older.
During 1997, the Plan was amended to change the Plan name from The Harper
Group Savings Plan to Circle International Group Savings Plan.
The Plan administrator believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of the Internal
Revenue Code and the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
Administration -
The Company has appointed an Administrative Committee (the Committee) to
manage the operation and administration of the Plan. The Company has contracted
with BZW Barclays Global Investors National Association (Barclays), to act as
the trustee. Substantially all expenses incurred for administering the Plan are
paid by the Company and investment fees are paid by the Plan.
Investments -
Investments of the Plan are held by Barclays and invested in mutual and
money market funds and the common stock of Circle International Group, Inc.
based solely upon instructions received from participants. Plan assets are
valued at fair value as of the last day of the Plan year, as measured by quoted
market prices.
9
<PAGE>
Cash and cash equivalents -
All highly liquid investments purchased with an original maturity of three
months or less (generally money market funds) are considered to be cash
equivalents. These investments are usually held for a short period of time,
pending long-term investment.
Vesting -
Participants are immediately vested in their salary deferral and rollover
contributions and related earnings. A participant vests ratably in the
employer's matching contributions allocated to their account and is fully vested
after four years of service.
Income taxes -
The Plan has been amended since receiving its favorable determination
letter dated August 1995. However, the Company intends that the Plan continue to
qualify under the applicable requirements of the Internal Revenue Code and
related state statutes, and is exempt from federal income and state franchise
taxes.
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 at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Risks and uncertainties -
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market fluctuations and credit risks. Due to the level of risk associated
with certain 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 statements of net assets available for
plan benefits and the statements of changes in net assets available for plan
benefits.
10
<PAGE>
Note 2 - Participation and benefits:
Employee contributions -
Participants may elect to have the Company contribute a percentage, up to
15%, of their eligible pre-tax compensation up to the amount allowable under
current income tax regulations, with the exception of highly compensated
employees who are limited to 10% of pre-tax compensation. Participants who elect
to have the Company contribute a portion of their compensation to the Plan agree
to accept an equivalent reduction in taxable compensation.
Participants are also allowed to make rollover contributions of amounts
received from other tax-qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in accordance
with the participant's direction and the Plan's provisions.
Employer contributions -
The Company is allowed to make matching contributions as defined in the
Plan and as approved by the Board of Directors. The Company matches 50% of each
participant's contribution up to a maximum of 6% of the eligible gross income.
The Company's actual contribution is reduced by available forfeitures, if any,
during the Plan year. Additional elective contributions may be made by the
Company. No additional elective contributions were made by the Company during
the years ended December 31, 1997 and 1996.
Participant accounts -
Each participant's account is credited with the participant's contribution,
Plan earnings and an allocation of the Company's contribution, if any.
Allocation of the Company's contributions are based on participant
contributions.
Payment of benefits -
Upon termination of service due to death, disability or retirement, the
participant or beneficiary will receive benefits in a lump-sum amount equal to
the value of the participant's vested interest in his or her account, or annual
installments over a period not to exceed the life expectancy of the participant
and his or her beneficiary. Effective 1996, the Plan is allowed to automatically
make lump-sum distributions to terminated participants for vested account
balances of less than $3,500.
11
<PAGE>
Loans to participants -
The Plan allows participants to borrow not less than $1,000 and up to the
lesser of $50,000 or 50% of their vested account balance. The loans are secured
by the participant's vested balance. Such loans bear interest at the available
market financing rates and must be repaid to the Plan within a five year period.
The specific terms and conditions of such loans are established by the
Committee.
Note 3 - Party in interest transactions:
As allowed by the Plan, participants may elect to invest a portion of their
accounts in the common stock of the Company. Aggregate investment in Company
common stock at December 31, 1997 and 1996 was as follows:
Date Number of shares Fair value Cost
---- ---------------- ---------- ----
1997 207,635 $3,284,786 $3,548,970
1996 211,454 3,431,891 2,882,662
Note 4 - Investments:
The following table includes the fair values of investments and investment
funds that represent 5% or more of the Plan's net assets at December 31:
1997 1996
---- ----
Circle International Group
Stock Fund $3,284,786 $3,431,891
Money Market Fund 2,968,224 2,887,853
S & P 500 Index Fund 9,570,947 6,294,756
3-Way Asset Allocation Fund 5,483,225 4,440,502
Income Accumulation Fund 61,844 58,240
Bond Index Fund 1,614 1,471
International Equity Fund 1,756,827 1,866,925
U.S. Treasury Allocation Fund 1,488,862 1,389,524
Cash 287,048 143,773
Participant Loans 1,057,878 1,167,294
------------ -----------
Assets held for investment purposes $25,961,255 $21,682,229
============ ===========
12
<PAGE>
Dividends and interest $ 1,389,893 $ 922,674
============ ===========
Net realized and unrealized
appreciation in
fair value of investments $ 2,274,392 $ 1,944,281
============ ===========
Note 5 - Plan termination and/or modification:
The Company intends to continue the Plan indefinitely for the benefit of
its employees; however, it reserves the right to terminate and/or modify the
Plan at any time by resolution of its Board of Directors and subject to the
provisions of ERISA. In the event the Plan is terminated in the future,
participants would become fully vested in their accounts.
13
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
FORM 5500
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1997
14
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
E.I.N.: 94 - 1740320
Plan #: 001
ITEM 27a, PART I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
-----------------
<CAPTION>
(a) (b) (c) (d) (e)
Description of investment including
Identity of issue, borrower, lessor, maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
- -------- -------------------------------------------- --------------------------------------- ----------------- --------------
<S> <C> <C> <C> <C>
Money Market Fund Mutual Fund $ 2,968,224 $ 2,968,224
S&P 500 Index Fund Mutual Fund 8,131,419 9,570,947
3-Way Asset Allocation Fund Mutual Fund 5,288,591 5,483,225
Income Accumulation Fund Mutual Fund 61,844 61,844
Bond Index Fund Mutual Fund 1,572 1,614
International Equity Fund Mutual Fund 1,775,405 1,756,827
US Treasury Allocation Fund Mutual Fund 1,476,408 1,488,862
* Circle International Group Stock Fund Company Stock 3,548,970 3,284,786
Barclays Cash Sweep Account Cash account 287,048 287,048
* Participant Loans 8.00%-11.00% 1,057,878
-----------
Total assets held for investment
purposes $25,961,255
===========
<FN>
* Parties-in-interest
</FN>
</TABLE>
15
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
E.I.N.: 94 -1740320
Plan #: 001
ITEM 27d, PART V - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1997
------------------------------------
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Description of asset Expense Current value
(including interest rate incurred of asset on
Identity of and maturity in case Purchase Selling Lease with Cost of transaction Net gain
party involved of a loan) price price rental transaction asset date or (loss)
- ----------------- ------------------------ ----------- ---------- ------ ----------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barclays Money Market Fund $2,866,089 $2,866,089 $2,866,089
Barclays Money Market Fund $2,785,718 2,785,718 2,785,718
Barclays S&P 500 Index Fund 5,235,886 5,235,886 5,235,886
Barclays S&P 500 Index Fund 3,881,690 2,973,781 3,881,690 907,909
Barclays Asset Allocation Fund 2,701,069 2,701,069 2,701,069
Barclays Asset Allocation Fund 1,969,587 1,742,771 1,969,587 226,816
Barclays Int'l Equity Fund 993,585 993,585 993,585
Barclays Int'l Equity Fund 1,108,290 1,023,066 1,108,290 85,224
Barclays Circle Int'l Stock Fund 4,250,282 4,250,282 4,250,282
Barclays Circle Int'l Stock Fund 4,366,278 3,743,859 4,366,278 622,419
</TABLE>
16
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
--------------------------
17
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
(Formerly The Harper Group Savings Plan)
Financial Statements and
Form 5500 Supplemental Schedule G
Years ended December 31, 1996 and 1995
--------------------------------------
Table of Contents
Independent Accountants' Report............................................19-20
Financial Statements:
Statements of Net Assets Available for Plan Benefits.........................21
Statements of Changes in Net Assets Available for Plan Benefits..............22
Notes to Financial Statements................................................23
Form 5500 Supplemental Schedules as of and for the year ended
December 31, 1996.........................................................29
27a, Part I - Schedule of Assets Held for Investment Purposes
27d, Part V - Schedule of Reportable Transactions
18
<PAGE>
To the Participants and
Plan Administrator of the
Circle International Group
Savings Plan
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
We have audited the financial statements and supplemental schedules of the
Circle International Group Savings Plan [formerly The Harper Group Savings Plan]
(the Plan) as of December 31, 1996 and 1995, and for the years then ended, as
listed in the accompanying table of contents. These financial statements are the
responsibility of the Plan'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 audits 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 the
Plan's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by BZW Barclays Global Investors
National Association (Barclays), the custodian and trustee of the Plan, and
transactions in those assets were excluded from the scope of our audit of the
Plan's 1995 financial statements, except for comparing such information provided
by Barclays, which is summarized in Note 4, with the related information
included in the financial statements.
Because of the significance of the information that we did not audit, we
are unable to, and do not, express an opinion on the Plan's financial statements
as of December 31, 1995. The form and content of the information included in the
1995 financial statements, other than that derived from the information
certified by Barclays, have been audited by us in accordance with generally
accepted auditing standards and, in our opinion, are presented in compliance
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
19
<PAGE>
In our opinion, the 1996 financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Plan as of December 31, 1996, and the changes in net assets available for
plan benefits for the year then ended, in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 1996, taken as a whole. The
supplemental schedules 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 fund information in the statement of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present the changes in net assets available for plan benefits for
each fund. The supplemental schedules and fund information have been subjected
to the auditing procedures applied in the audit of the basic financial
statements for the year ended December 31, 1996, and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ MOHLER, NIXON & WILLIAMS
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
August 5, 1998
20
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
----------------------------
1996 1995
------------ ------------
Cash $ 143,773 $ 66,491
Investments, at fair value 21,538,456 17,644,836
------------ ------------
Assets held for investment purposes 21,682,229 17,711,327
Employer's contribution receivable 68,630
Participants' contributions receivable 186,840
------------ ------------
Total assets 21,937,699 17,711,327
Excess contributions refundable (35,837)
------------ ------------
Net assets available for plan benefits $ 21,901,862 $ 17,711,327
============ ============
See independent accountants' report and
accompanying notes to financial statements.
21
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the years ended December 31, 1996 and 1995
----------------------------------------------
BZW Barclays Global Investors National Association
--------------------------------------------------
<CAPTION>
Circle
International S & P 500 3-Way Asset Income Bond International
Group Money Market Index Allocation Accumulation Index Equity
Stock Fund Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1994 $ 2,722,667 $ 2,016,837 $ 2,664,487 $ 2,701,596 $ 56,641 $ 3,367 $ 1,266,543
----------- ----------- ----------- ----------- -------- ------- -----------
Employer's contribution 68,185 139,966 226,127 201,032 0 0 108,752
Participants' contributions/rollovers 278,278 486,542 649,837 503,234 0 0 327,754
Withdrawals/distributions (236,054) (491,357) (306,839) (322,878) (4,815) (2,391) (120,675)
Dividends and interest 0 227,937 139,510 124,251 3,570 172 0
Net appreciation in fair value
of investments 359,386 0 911,416 678,084 0 323 133,117
Administrative fees (183) (369) (520) (403) 0 0 (169)
Transfers in (out) 241,846 11,168 (25,546) (158,904) (347) 0 (252,356)
----------- ----------- ----------- ----------- -------- ------- -----------
Increase (decrease) in net assets 711,458 373,887 1,593,985 1,024,416 (1,592) (1,896) 196,423
----------- ----------- ----------- ----------- -------- ------- -----------
Net assets available for plan
benefits at December 31, 1995 3,434,125 2,390,724 4,258,472 3,726,012 55,049 1,471 1,462,966
----------- ----------- ----------- ----------- -------- ------- -----------
Employer's contribution 68,849 130,119 252,452 170,107 0 0 91,758
Participants' contributions/rollovers 227,426 516,873 777,933 505,025 0 0 337,407
Withdrawals/distributions (248,178) (519,720) (562,253) (346,837) 0 (2) (216,594)
Dividends and interest 0 145,986 193,287 406,641 3,191 95 0
Net appreciation (depreciation) in
fair value of investments 981,957 0 851,620 50,700 0 (64) 86,980
Administrative fees (288) (576) (1,048) (549) 0 0 (303)
Transfers in (out) (1,032,000) 224,447 524,293 (70,597) 0 (29) 104,711
----------- ----------- ----------- ----------- -------- ------- -----------
Increase (decrease) in net assets (2,234) 497,129 2,036,284 714,490 3,191 0 403,959
----------- ----------- ----------- ----------- -------- ------- -----------
Net assets available for plan
benefits at December 31, 1996 $ 3,431,891 $ 2,887,853 $ 6,294,756 $ 4,440,502 $ 58,240 $ 1,471 $ 1,866,925
=========== =========== =========== =========== ======== ======= ===========
<CAPTION>
U.S. Treasury Excess
Allocation Participant Contribution Contributions
Fund Cash Loans Receivable Refundable Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1994 $ 1,109,697 $ 0 $ 707,389 $ 0 $ 0 $ 13,249,224
------------ ------------ ------------ ------------ ------------ ------------
Employer's contribution 81,862 ($ 117,229) 0 0 0 708,695
Participants' contributions/rollovers 196,525 113,101 0 0 0 2,555,271
Withdrawals/distributions (108,113) (3,062) (65,009) 0 0 (1,661,193)
Dividends and interest 69,612 31,622 85,334 0 0 682,008
Net appreciation in fair value
of investments 101,955 0 0 0 0 2,184,281
Administrative fees (189) (5,126) 0 0 0 (6,959)
Transfers in (out) (107,336) 47,185 244,290 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 234,316 66,491 264,615 0 0 4,462,103
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at December 31, 1995 1,344,013 66,491 972,004 0 0 17,711,327
------------ ------------ ------------ ------------ ------------ ------------
Employer's contribution 64,449 $ 0 0 $ 68,630 0 846,364
Participants' contributions/rollovers 189,006 0 0 186,840 ($ 35,837) 2,704,673
Withdrawals/distributions (194,750) (1,949) (128,548) 0 0 (2,218,831)
Dividends and interest 70,381 3,993 99,100 0 0 922,674
Net appreciation (depreciation) in
fair value of investments (26,912) 0 0 0 0 1,944,281
Administrative fees (223) (5,639) 0 0 0 (8,626)
Transfers in (out) (56,440) 80,877 224,738 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 45,511 77,282 195,290 255,470 (35,837) 4,190,535
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at December 31, 1996 $ 1,389,524 $ 143,773 $ 1,167,294 $ 255,470 ($ 35,837) $ 21,901,862
============ ============ ============ ============ ============ ============
See independent accountants' report and
accompanying notes to financial statements.
</TABLE>
22
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
--------------------------
Note 1 - The Plan and its significant accounting policies:
The following description of the Circle International Group 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.
The Plan is a defined contribution plan that was established in 1973 by
The Harper Group, Inc. to provide benefits to eligible employees. The Plan
covers all full-time employees of Circle International Group, Inc. and its
affiliated companies: Porter International, Sekin Transport, J R Michels, Inc.,
The Harper Group, Inc. and Circle Trade Services (collectively referred to as
the Company), who have a minimum of six months of service and are age 18 or
older.
During 1997, the Plan was amended to disclose a change in the Plan name
from The Harper Group Savings Plan to Circle International Group Savings Plan.
During 1996, the Plan was amended to reflect changes in distribution
procedures and Company matching contributions.
During 1995, the Plan was amended to conform to Internal Revenue Service
Code Section 415(d) limiting annual participant deferrals.
The Plan administrator believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of the Internal
Revenue Code and the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
Administration -
The Company has appointed an Administrative Committee (the Committee) to
control the operation and administration of the Plan. The Company had contracted
with Wells Fargo Bank, N.A. (Wells Fargo) to act as the trustee and process and
maintain the records of participant data. During 1996, Wells Fargo was acquired
by BZW Barclays Global Investors National Association (Barclays), and effective
January 1996, the Plan document was amended to reflect Barclays as the trustee.
Substantially all expenses incurred for administering the Plan are paid by the
Company and investment fees are paid by the Plan.
23
<PAGE>
Investments -
Investments of the Plan are held by Barclays and invested in mutual and
money market funds and the common stock of Circle International Group, Inc.
based solely upon instructions received from participants. Plan assets are
valued at fair value as of the last day of the Plan year, as measured by quoted
market prices.
Cash and cash equivalents -
All highly liquid investments purchased with an original maturity of three
months or less (generally money market funds) are considered to be cash
equivalents. These investments are usually held for a short period of time,
pending long-term investment.
Vesting -
Participants are immediately vested in their salary deferral and rollover
contributions and related earnings. Participants vest ratably in the employer's
matching contributions allocated to their account, and are fully vested after
four years of service.
Income taxes -
The Plan has been amended since receiving its favorable determination
letter dated August 1995. However, the Committee intends that the Plan continue
to qualify under the applicable requirements of the Internal Revenue Code and
related state statutes, and is exempt from federal income and state franchise
taxes.
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 at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Risks and uncertainties -
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market fluctuations and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect participants' account
balances, the amounts reported in the statements of net assets available for
plan benefits and the statements of changes in net assets available for plan
benefits.
24
<PAGE>
Note 2 - Participation and benefits:
Employee contributions -
Participants may elect to have the Company contribute a percentage, up to
15%, of their pre-tax compensation up to the amount allowable under current
income tax regulations, with the exception of highly compensated employees who
are limited to 10% of pre-tax compensation. Participants who elect to have the
Company contribute a portion of their compensation to the Plan agree to accept
an equivalent reduction in taxable compensation.
Participants are also allowed to make rollover contributions of amounts
received from other qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in accordance
with the participant's direction and the Plan's provisions.
Employer contributions -
The Company is allowed to make matching contributions as defined in the
Plan and as approved by the Board of Directors. The Company matches 50% of each
participant's contribution up to a maximum of 6% of the eligible gross income.
The Company's actual contribution is reduced by available forfeitures, if any,
during the Plan year. Additional elective contributions may be made by the
Company. No additional elective contributions were made by the Company during
the years ended December 31, 1996 and 1995.
Participant accounts -
Each participant's account is credited with the participant's
contribution, Plan earnings and an allocation of the Company's contribution, if
any. Allocation of the Company's contributions is based on participant
contributions.
25
<PAGE>
Payment of benefits -
Upon termination of service due to death, disability or retirement, the
participant or beneficiary will receive benefits in a lump-sum amount equal to
the value of the participant's vested interest in his or her account, or annual
installments over a period not to exceed the life expectancy of the participant
and his or her beneficiary. During 1996, the Plan is allowed to automatically
make lump-sum distributions to terminated participants for vested account
balances of less than $3,500.
Loans to participants -
The Plan allows participants to borrow not less than $1,000 and up to the
lesser of $50,000 or 50% of their vested account balance. The loans are secured
by the participant's vested balance. Such loans bear interest at the available
market financing rates and must be repaid to the Plan within a five year period.
The specific terms and conditions of such loans are established by the
Committee.
Note 3 - Party in interest transactions:
As allowed by the Plan, participants may elect to invest a portion of
their accounts in the common stock of the Company. Aggregate investment in
Company common stock at December 31, 1996 and 1995 was as follows:
Date Number of shares Fair value Cost
---- ---------------- ---------- ----
1996 211,454 $3,431,891 $2,882,662
1995 274,510 3,434,125 3,323,653
26
<PAGE>
Note 4 - Investments:
The following table includes the fair values of investments and investment
funds that represent 5% or more of the Plan's net assets at December 31, 1996:
Circle International Group
Stock Fund $3,431,891
Money Market Fund 2,887,853
S & P 500 Index Fund 6,294,756
3-Way Asset Allocation Fund 4,440,502
Income Accumulation Fund 58,240
Bond Index Fund 1,471
International Equity Fund 1,866,925
U.S. Treasury Allocation Fund 1,389,524
Cash 143,773
Participant Loans 1,167,294
-----------
Assets held for investment purposes $21,682,229
===========
In accordance with Section 29 CFR 2520.103-8 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA, information
certified by Barclays regarding the current value of assets held at December 31,
1995, and transactions entered into during the year, was used in the preparation
of the accompanying financial statements. The following table includes the fair
values of net assets and investment funds that represent 5% or more of the
Plan's net assets at December 31, 1995:
Circle International Group
Stock Fund $3,434,125
Money Market Fund 2,390,724
S & P 500 Index Fund 4,258,472
3-Way Asset Allocation Fund 3,726,012
Income Accumulation Fund 55,049
Bond Index Fund 1,471
International Equity Fund 1,462,966
U.S. Treasury Allocation Fund 1,344,013
Cash 66,491
Participant Loans 972,004
-----------
Assets held for investment purposes $17,711,327
===========
27
<PAGE>
Dividends and interest $ 682,008
===========
Net realized and unrealized
appreciation in
fair value of investments $ 2,184,281
===========
Note 5 - Plan termination and/or modification:
The Company intends to continue the Plan indefinitely for the benefit of
its employees; however, it reserves the right to terminate and/or modify the
Plan at any time by resolution of its Board of Directors and subject to the
provisions of ERISA. In the event the Plan is terminated in the future,
participants would become fully vested in their accounts.
28
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
FORM 5500
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1996
-----------------
29
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
E.I.N.: 94 - 1740320
Plan #: 001
ITEM 27a, PART I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
-----------------
<CAPTION>
(a) (b) (c) (d) (e)
Description of investment including
Identity of issue, borrower, lessor, maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
- ------ -------------------------------------- ------------------------------------ ------------ ------------
<S> <C> <C> <C> <C>
Money Market Fund Mutual Fund $ 2,887,853 $ 2,887,853
S&P 500 Index Fund Mutual Fund 5,639,024 6,294,756
3-Way Asset Allocation Fund Mutual Fund 4,420,460 4,440,502
Income Accumulation Fund Mutual Fund 58,240 58,240
Bond Index Fund Mutual Fund 1,533 1,471
International Equity Fund Mutual Fund 1,801,416 1,866,925
US Treasury Allocation Fund Mutual Fund 1,407,457 1,389,524
* Circle International Group Stock Fund Company Stock 2,948,717 3,431,891
Barclays Cash Sweep Account Cash account 143,773 143,773
* Participant Loans 8.00%-11.00% 1,167,294
------------
Total assets held for investment
purposes $21,682,229
============
<FN>
* Parties-in-interest
</FN>
</TABLE>
30
<PAGE>
<TABLE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
E.I.N.: 94 -1740320
Plan #: 001
ITEM 27d, PART V - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1996
------------------------------------
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Description of asset Expense Current value
(including interest rate incurred of asset on
Identity of and maturity in case Purchase Selling Lease with Cost of transaction Net gain
party involved of a loan) price price rental transaction asset date or (loss)
- ------------------ ------------------------- ---------- ----------- ------ ----------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barclays Circle Int'l Stock Fund $2,886,981 $2,886,981 $2,886,981 0
Barclays Circle Int'l Stock Fund $3,871,673 3,241,014 3,871,673 630,659
Barclays Money Market Fund 1,903,225 1,903,225 1,903,225 0
Barclays Money Market Fund 1,498,225 1,498,225 1,498,225 0
Barclays S&P 500 Index Fund 3,340,688 3,340,688 3,340,688 0
Barclays S&P 500 Index Fund 2,156,024 1,737,892 2,156,024 418,132
Barclays Asset Allocation Fund 1,743,654 1,743,654 1,743,654 0
Barclays Asset Allocation Fund 1,079,864 955,905 1,079,864 123,959
Barclays Int'l Equity Fund 1,106,342 1,106,342 1,106,342 0
Barclays Int'l Equity Fund 789,903 723,600 789,903 66,303
Barclays US Tre Alloc Fund 497,505 497,505 497,505 0
Barclays US Tre Alloc Fund 425,082 433,572 425,082 (8,490)
</TABLE>
31
<PAGE>
EXHIBIT 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use of our name on our report, dated August 5, 1998, with
respect to the financial statements and schedules of the Circle International
Group Savings Plan for the years ended December 31, 1997 and 1996, included in
the Annual Report on Form 11-K which is filed electronically with the Securities
and Exchange Commission.
/s/ MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
August 5, 1998
32
