As filed with the Securities and Exchange Commission on June 28, 2000
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(X) Annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
Commission file number 000-8664
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
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
CIRCLE INTERNATIONAL
GROUP, INC.
June 19, 2000 By /s/ Rae Fawcett
--------------------
Rae Fawcett
Page 1 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Page 2 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
Financial Statements and
Supplemental Schedule
Years ended December 31, 1999 and 1998
--------------------------------------
<PAGE>
Table of Contents
Independent Accountants' Report..............................................1
Financial Statements:
Statements of Net Assets Available for Benefits..............................2
Statements of Changes in Net Assets Available for Benefits ..................3
Notes to Financial Statements................................................4
Supplemental Schedule as of and for the year ended
December 31, 1999........................................................10
Schedule of Assets Held for Investment Purposes
Page 3 of 14
<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 schedule of the
Circle International Group Savings Plan (the Plan) as of December 31, 1999 and
1998, and for the years then ended, as listed in the accompanying table of
contents. These financial statements and supplemental schedule are the
responsibility of the Plan's management.
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 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 benefits of the
Plan as of December 31, 1999 and 1998, and the changes in net assets available
for benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements but is 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. The supplemental
information is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
By:/s/Mohler, Nixon & Williams
--------------------------
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 9, 2000
Page 4 of 14
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 333-85807, No. 333-64147 and No. 000-08664) of
Circle International Group, Inc. of our report dated June 9, 2000, with respect
to the financial statements and schedule of the Circle International Group
Savings Plan included in this Annual Report Form 11-K.
By:/s/Mohler, Nixon & Williams
--------------------------
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 19, 2000
Page 5 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
---------------------------------------------
1999 1998
-------------------- -------------------
Cash $17,725 $404,439
Investments, at fair value 39,385,562 33,334,037
-------------------- -------------------
Assets held for investment 39,403,287 33,738,476
purposes
Participants' contributions 172,997 164,597
receivable
Employer's contribution 51,804 50,094
receivable
-------------------- -------------------
Net assets available for $39,628,088 $33,953,167
benefits
==================== ===================
See independent accountants' report and
accompanying notes to financial statements.
Page 6 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the years ended
December 31,
1999 1998
Additions to net assets attributed to:
Investment income:
Dividends and interest $3,456,700 $1,964,141
Net realized and unrealized
appreciation in fair value of
investments 1,349,454 2,693,749
-------------- -------------
4,806,154 4,657,890
Contributions:
Participants' 4,296,070 2,962,617
Employer's 1,329,571 996,025
Transfers into the Plan 2,619,842
-------------- -------------
5,625,641 6,578,484
-------------- -------------
Total additions 10,431,795 11,236,374
Deductions from net assets attributed to:
Withdrawals and distributions 4,744,061 3,235,156
Administrative expenses 12,813 9,306
-------------- -------------
Total deductions 4,756,874 3,244,462
-------------- -------------
Net increase 5,674,921 7,991,912
Net assets available for benefits:
Beginning of year 33,953,167 25,961,255
-------------- -------------
End of year $39,628,088 $33,953,167
==================== ===============
See independent accountants' report and
accompanying notes to financial statements.
Page 7 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
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
Circle International Group, Inc. (the Company) to provide benefits to eligible
employees. The Plan covers all full-time employees of the Company and its
affiliated companies: Circle International, Inc., J R Michels, Inc., Alrod
International and Circle Trade Services Ltd. (collectively referred to as the
Company).
During 1998, the Company purchased Alrod International and approximately
$2,620,000 was transferred into the Plan. Effective October 1, 1998, Alrod
International employees were eligible to participate in the Plan.
The Plan administrator believes that the Plan is currently designed and
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 Merrill Lynch Trust Company (Merrill Lynch), 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.
Basis of accounting -
The financial statements of the Plan are prepared on the accrual method of
accounting. Participant and Company matching contributions are recorded in
the period during which the Company withholds payroll deductions from
participant's earnings. Benefits are recorded when paid.
Page 8 of 14
<PAGE>
Investments -
Investments of the Plan are held by Merrill Lynch 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. Participant loans are valued at cost, which approximates
fair value.
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.
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 that the Trust, which forms a part of the Plan, is
exempt from federal income and state franchise taxes.
Reclassifications -
Certain reclassifications were made in the 1998 financial statements to
conform with the 1999 presentation.
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 changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
Page 9 of 14
<PAGE>
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 benefits and the statements of changes in net assets
available for benefits.
New accounting pronouncement -
In September 1999, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position (SOP) 99-3, "Accounting for and Reporting of Certain Defined
Contribution Benefit Plan Investments and Other Disclosure Matters." This
SOP eliminates the previous requirement for a defined contribution plan to
disclose participant-directed investment programs by fund. The Plan has
adopted SOP 99-3 in its financial statements for the years ended December 31,
1999 and 1998.
Note 2 - Related party transactions:
Certain Plan investments in mutual funds and common stocks are managed by
the Plan custodian Merrill Lynch Trust Company. These transactions qualify as
party-in-interest. Any purchases and sales of these funds are open market
transactions at fair market value. Such transactions are permitted under the
provisions of the Plan and are exempt from the prohibition of party-in-interest
transactions under ERISA and applicable exemptions promulgated thereunder.
Note 3 - 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.
Page 10 of 14
<PAGE>
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 participants
eligible gross income. The Company's actual contribution is reduced by certain
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, 1999 and 1998.
Participant accounts -
Each participant's account is credited with the participant's contribution,
Plan earnings or losses and an allocation of the Company's contribution, if
any. Allocation of the Company's contribution is based on participant
contributions.
Payment of benefits -
Upon termination 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 1998, the
Plan is allowed to automatically make lump-sum distributions to terminated
participants for vested account balances of less than $5,000.
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 account balance. The loans are secured by
the participant's 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.
Outstanding loans at December 31, 1999 carry interest rates, which range from
9% to 10%.
Vesting -
Participants are immediately vested in their salary deferral, rollover
contributions and related earnings. Participants vest ratably and are fully
vested in the employer's profit sharing and matching contributions allocated to
their account after four years of credited service.
Page 11 of 14
<PAGE>
Note 4 - 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, 1999 and 1998 was as follows:
Date Number of shares Fair value Cost
1999 290,073 $3,277,032 $3,514,455
1998 223,835 $2,898,665 $3,286,563
Note 5 - Plan obligations:
Included in net assets available for benefits at December 31, 1999 are
benefits due to withdrawing participants for benefit claims which have been
processed and approved for payment prior to year-end, but not yet paid, of
approximately $297,000.
Note 6 - Investments:
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:
1999 1998
Circle International Group
Stock $ 3,277,032 $ 2,898,665
Money Market Fund 5,101,452 4,833,061
S & P 500 Index Fund 16,801,361 12,566,863
3-Way Asset Allocation Fund 8,281,086 7,369,749
Income Accumulation Fund 69,339 65,453
Bond Index Fund 1,636,232 953
International Equity Fund 2,772,685 1,999,670
U.S. Treasury Allocation Fund 45 2,360,060
Cash 17,725 404,439
Participant loans 1,446,330 1,239,563
----------- -----------
Total assets held for investment
purposes $ 39,403,287 $ 33,738,476
============ ============
Page 12 of 14
<PAGE>
The Plan's investments (including gains and losses on investments bought
and sold, as well as held during the year) appreciated (depreciated) in value
as follows:
Years ended December 31,
1999 1998
Common Stock $ 408,123 ($ 471,615)
Mutual Funds 941,331 3,165,364
---------- -----------
$1,349,454 $2,693,749
========== ===========
Note 6 - 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.
Page 13 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP
SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
Page 14 of 14
<PAGE>
CIRCLE INTERNATIONAL GROUP BIN#:94-1740320
SAVINGS PLAN PLAN#:001
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999
Description of investment
Identity of issue, including maturity date,
borrower, lessor, rate of interest, collateral, Current
or similar party par or maturity value Value
----- ----------------------- -------------------------------- --------
* Circle International Circle Intl Group Stock Fund $ 3,277,032
* Merrill Lynch Money Market Fund 5,101,452
* Merrill Lynch S&P 500 Index Fund 16,801,361
* Merrill Lynch 3-Way Asset Allocation Fund 8,281,086
* Merrill Lynch Income Accumulation Fund 69,339
* Merrill Lynch Bond Index Fund 1,636,232
* Merrill Lynch International Equity Fund 2,772,685
* Merrill Lynch U.S. Treasury Allocation Fund 45
* Merrill Lynch Cash 17,725
* Participant Loans 9% - 10% 1,446,330
--------------
Total assets held for investment $39,403,287
==============
* Parties-in-interest
