<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

[X]   Annual report  pursuant to Section 13 or 15(d) of the Securities  Exchange
      Act of 1934 for the fiscal year ended December 31, 1999

                        COMMISSION FILE NUMBER: 0-24484

                        MODIS PROFESSIONAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

                Florida                                     59-3116655
--------------------------------------               -------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)

 1 Independent Drive, Jacksonville, FL                       32202
----------------------------------------                 --------------
(Address of principal executive offices)                   (Zip Code)

      (Registrant's telephone number including area code): (904) 360-2000

Securities registered pursuant to Section 12(b) of the Act:

    Common Stock, Par Value $0.01 Per Share             New York Stock Exchange
           (Title of each class)                      (Name of each exchange on
                                                           which registered)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X  No
    ---    ---

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  Registrant  (assuming  for  these  purposes,  but not  conceding,  that all
executive officers and directors are "affiliates" of the Registrant), based upon
the closing  sale price of common stock on March 15, 2000 as reported by the New
York Stock Exchange, was approximately $1,403,782,623.

     As of March 15, 2000, the number of shares  outstanding of the Registrant's
common stock was 96,397,090.

     DOCUMENTS  INCORPORATED BY REFERENCE.  Portions of the  Registrant's  Proxy
Statement  for its 2000  Annual  Meeting of  shareholders  are  incorporated  by
reference in Part III.
<PAGE>
FORWARD LOOKING STATEMENTS

     This Annual Report on From 10-K contains  forward-looking  statements  that
are subject to certain risks,  uncertainties  or assumptions and may be affected
by certain  other  factors,  including  but not limited to the specific  factors
discussed in Part I, Item 1 under  "Business - Introdution  and Recent  Events',
Part II,  Item 5 under  'Market  for  Registrant's  Common  Equity  and  Related
Shareholder  Matters' and in Part II under  'Liquidity  and Capital  Resources',
'Other  Matters - Year 2000  Compliance'  and 'Factors  Which May Impact  Future
Results and Financial Condition'.  In addition, except for historical facts, all
information provided in Part II under 'Quantitative and Qualitative  Disclosures
About Market Risk' should be considered forward-looking  statements.  Should one
or more of these risks,  uncertainties or other factors  materialize,  or should
underlying   assumptions  prove  incorrect,   actual  results,   performance  or
achievements  of the  Company  may  vary  materially  from any  future  results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements.

     Forward-looking  statements  are based on beliefs  and  assumptions  of the
Company's management and on information currently available to such manangement.
Forward  looking  statements  speak  only as of the date they are made,  and the
Company  undertakes no obligation to update publicly any of them in light of new
information  or  future  events.  Undue  reliance  should  not be placed on such
forward-looking   statements,   which  are  based  on   current   expectations.
Forward-looking statements are not guarantees of performance.

<PAGE>

ITEM 1. BUSINESS  GENERAL

Introduction and Recent Events

Modis Professional  Services,  Inc. ('MPS' or the 'Company') is an international
provider of professional business services,  including consulting,  outsourcing,
training  and  strategic  human  resource  solutions,  to Fortune 1000 and other
leading  businesses.  Historically,  the  Company's  services have been provided
through its two business divisions:  (i) Information Technology,  which provides
technology consulting, outsourcing and solutions services, and (ii) Professional
Services,  which  provides  personnel who perform  specialized  services such as
accounting,  legal, technical / engineering,  scientific,  and career management
and consulting.

On December 15, 1999, the Company's Board of Directors  approved a plan to split
the  Company  into two  independent  companies  with the Company  continuing  to
operate the Professional Services business and to distribute to the stockholders
of the  Company  all of the  outstanding  stock  of the  Information  Technology
division.  The creation of two independent  companies will enable  management of
each  company to devote the time and  attention to the  different  needs of each
business and to sharpen its focus on the core  strategies of each business.  The
distribution  is subject to market and other  conditions,  including  regulatory
approvals  and tax  clearances.  The Company  has  requested  that the  Internal
Revenue  Service  issue a ruling that the  distribution  will be tax free to the
Company and to its stockholders. This ruling, and the distribution, are expected
to occur during 2000.

Unless otherwise noted, the discussion of the Company's business set forth below
relates to the Professional  Services business and does not include  information
concerning  the  Information  Technology  business.  Information  concerning the
Information  Technology division is included in Item 7, Management's  Discussion
of Financial  Condition  and Results of  Operations,  'Results  of  discontinued
operations'.

Discussion of the Business

Headquartered  in  Jacksonville,  Florida,  the  Company has  approximately  150
offices  throughout the United States and the United Kingdom.  MPS' objective is
to concentrate  its efforts and resources on profitable,  high-growth,  high-end
professional  services  that have the ability to  consistently  generate  strong
earnings. The Company has experienced substantial growth in revenue and earnings
driven primarily by (i) increased  business with the Company's existing clients;
(ii) increased  penetration of existing and new markets; (iii) trends toward the
increased outsourcing of non-core competency professional business services; and
(iv) acquisitions of other professional services companies.

Business Strategy

MPS seeks to expand its  revenues  and  profitability  by offering an  extensive
range of specialized  human resource and  consulting  services  through a global
network of branch offices. The Company markets and delivers its services with an
emphasis on local entrepreneurial spirit and decision-making at the branch level
combined  with strong  corporate,  technological  and  managerial  support.  The
Company seeks to provide  innovative and customized  solutions to human resource
needs and to expand the Company's  relationships with its clients.  MPS' mission
is to set the  standard  for the  professional  business  services  industry  by
empowering its employees to provide quality  services.  Management  believes the
Company's concentration on professional services allows faster growth and higher
profit margins versus the more traditional commercial staffing businesses due to
the specialized expertise of professional personnel.  MPS' principal competitors
in the professional  services areas generally consist of specialty firms in each
of those fields,  and to a lesser extent,  diversified  business services firms.
The Company's  strategy is to continue to increase the overall revenue and gross
profits  by  expanding   current   specialties  into  new  geographic   markets,
identifying and adding new practice areas, and leveraging  wherever  possible on
existing specialty strengths.

GROWTH STRATEGY

The Company pursues a focused growth strategy designed to achieve both increased
revenues and earnings. The key elements of this growth strategy are as follows:

Internal Growth

The Company's  internal  growth  strategy  includes:  (i)  positioning in market
locations,  customer segments and skill areas that value high levels of service;
(ii) increasing  penetration of existing  markets;  (iii) expanding into new and
contiguous  markets;  and (iv)  migrating to higher  margin  specialty  practice
areas.  Several of the more distinguishing ways to facilitate the aforementioned
internal growth strategies are as follows:

     Staff Augmentation

     Each  business  unit  provides  variable  workforce  solutions by providing
     intellectual capital to meet the changing needs of clients. By establishing
     new relationships,  forming strategic  alliances and continually  improving
     current  client  and  consultant  relationships,  management  believes  the
     traditional staff augmentation will continually be an integral component to
     its service mix.

     Specialized Staffing and Specialty Solution Opportunities

     Many of the Company's offices provide  specialty  solutions and staffing to
     its  corporate   clients   beyond  the   traditional   professional   staff
     augmentation.   Management   believes  it  can  leverage   these   practice
     specialties and client  relationships within each business unit by offering
     specialized  services  and  solutions  to other  existing  and  prospective
     clients.   Examples  include   document  and  trial  management   services,
     leadership  development,  executive coaching and specialized computer-aided
     design services.

     Professional Development Opportunities

     Enhancing the knowledge and skills of the  consultants and employees of the
     Company  based on the needs of our  clients  will  strengthen  our  overall
     relationship with clients,  consultants,  and employees.  Generally,  these
     strategies  are  intended to better  serve our clients and  strengthen  our
     professionalism  throughout  each business unit.  Management  believes this
     will improve overall client  relationships  and  profitability  and improve
     consultant and employee retention.

Acquisitions

The Company's  growth strategy  includes the acquisition of existing  businesses
with complementary  service offerings,  strong management,  profitable operating
results and recognized local and regional presence.  The Company has acquired 13
professional  services companies since 1996.  Acquisition criteria considered by
management  includes,  among other things,  financial  performance,  a desirable
market location,  significant market share, new or expanded specialties that can
be added  to the  Company's  existing  lines of  business,  efficient  operating
systems  and  existing  management  that will  operate  effectively  within  the
Company's existing managerial  structure.  The Company believes that there is an
opportunity,  as a part of the  consolidation  in the global  business  services
industry,   to  focus  on  acquisitions  of  companies  that  offer  specialized
professional  services.  The Company's management has had success in identifying
acquisition  candidates that complement  existing  businesses,  integrating them
into  existing  operations  and utilizing  them to enhance the Company's  growth
performance.

MARKET OVERVIEW

The need for  professional  services,  specifically  legal,  accounting,  career
management and consulting,  scientific,  and engineering / technical  solutions,
has  increased  rapidly in response to the  continuing  shift in the  respective
industries in which these professionals operate. The focus of large corporations
has migrated to a more flexible  professional  workforce which employs personnel
on a  skill-specific  or  project-specific  basis.  This shift has increased the
reliance  upon  business  service  partners  to be able to recruit  and  provide
solutions to these companies on a skill-specific or  project-specific  basis, or
an economic basis. The trend toward outsourcing these services is expected to be
long term in nature.

Accounting Division

The  Accounting   division,   which  operates  primarily  under  the  Accounting
Principals  brand name in the United  States  and under the  Badenoch  and Clark
brand name throughout the United  Kingdom,  provides  professionals  and project
solutions  and  support in  finance/banking,  data  processing  and  accounting,
including  auditors,   controllers/CFOs,   CPAs,  financial  analysts,  mortgage
processors,  loan processors,  accounts  receivable and accounts payable clerks,
and tax accountants.  By providing these accounting and financial services,  the
Company  offers  customers  a  reliable  and  economic  resource  for  financial
professionals  to  address  uncertain  or uneven  work  loads  caused by special
projects or unforeseen emergencies.  The Company entered the accounting services
industry in 1995 through the  acquisition of a small,  regional  accounting firm
and has since  increased  the  division to encompass 45 branches in the U.S. and
the United Kingdom, as of December 31, 1999.

Included within the Accounting  division's results is Management  Principals,  a
new brand that provides  personnel with project  management  and  implementation
experience to the banking and financial services industry to handle such matters
as change management,  financial projects,  marketing, mergers and acquisitions,
organizational  development,  and training.  Management Principals also provides
direct placement solutions in banking and financial services.  This unit started
with the acquisition of Keystone Consulting Group in May 1997 and as of December
31, 1999, it operates five branches across the United States.

Legal Division

The Legal  division,  which operates  primarily  under the Special Counsel brand
name,  provides  litigation  support and  consulting  as well as human  resource
services and  solutions  to corporate  legal  departments  and law firms.  These
services  include the  provision  of project  teams/individuals  consisting  of:
attorneys,  paralegals, legal secretaries, and law librarians to corporate legal
departments and private law firms for litigation support, as well as project and
document  management,  document  imaging  and  coding,  and  trial  presentation
services.  The Company  primarily  competes with a few large  companies and many
local firms as this market is highly  fragmented.  The Company entered the legal
industry in 1995 through the  acquisitions  of  Attorneys  Per Diem, a Baltimore
operation,  (now Special Counsel) in 1995, and Special Counsel, Inc., a New York
City  operation.  As of  December  31,  1999,  the  legal  unit had 33  branches
operating  primarily in the United States, with capability in the United Kingdom
through its Badenoch and Clark brand.

Technical and Engineering Division

The Technical and Engineering  division,  collectively called ENTEGEE,  provides
drafters,  designers and engineers in the mechanical and electrical  engineering
fields as well as personnel  to the  chemical,  plastics  and other  industries.
ENTEGEE also provides high level  engineering and drafting  services,  including
the outsourcing of specialized design services such as architectural  design and
drafting,  tool designs and  computer-aided  design ('CAD') services.  ENTEGEE's
clients range from  transportation  and aerospace to  engineering  firms,  print
circuit board manufacturers, and other domestic and international businesses. As
of December 31, 1999,  the technical and  engineering  unit operates 29 branches
throughout the United States.

Scientific Division

The   Scientific   division,   Scientific   Staffing,   provides   trained   and
advanced-degreed  scientists,  laboratory  technicians and support  personnel to
companies in the pharmaceutical,  chemical, biotechnical,  environmental, health
care and consumer products  industries.  As of December 31, 1999, the Scientific
unit operates 17 branch offices throughout the United States.

Career Management and Consulting Division

The Career Management and Consulting division,  Manchester, Inc. and Diversified
Search,   Inc.  offers  corporate   outplacement   services,   including  career
counseling,  resume  development,  skills assessment,  interview and negotiating
techniques,  and  employee  guidance  counseling.  It also  provides  leadership
development,  career management consulting,  retained executive search and other
human  resource  services  to  the  banking,  financial  services,   healthcare,
pharmaceutical,  chemical and  manufacturing  industries.  This division started
with the acquisition of Manchester Partners  International,  Inc. ('Manchester')
in January 1997 and as of December 31, 1999 it operates  through a network of 26
branch offices throughout the United States.


COMPETITION

The business  services  industry has grown steadily in recent years as companies
have utilized  business  service firms to provide value added solutions  ranging
from the  outsourcing of non-core  competencies to the recruitment of a flexible
workforce  able to provide a company  with the  unique  skills it does not house
internally.  MPS  believes  that the  increasing  pressure  that  companies  are
experiencing  to remain  competitive and efficient will cause companies to focus
their permanent  internal staff around their core  competencies  while expanding
their use of business service partners to provide strategic solutions to fulfill
their  other  business  needs.  MPS also  believes  that the  business  services
industry is highly  fragmented,  but is  experiencing  increasing  consolidation
largely in response to increased demand for companies to provide a wide range of
comprehensive  human  resource  solutions to regional and national  accounts.  A
large percentage of business services firms are local operations with fewer than
five  offices.  Within  local  markets,  these firms  actively  compete with the
Company  for  business,  and in most of these  markets no single  company  has a
dominant share of the market. The Company also competes with larger full-service
and specialized competitors in national, regional and local markets.

The principal national  competitors of the Company include On Assignment,  Inc.,
the  legal  division  of Kelly  Services,  Inc.,  Adecco  SA,  CDI  Corporation,
Kforce.com,  Inc., Acsys, Inc. and Robert Half  International,  Inc. The Company
believes that the primary competitive factors in obtaining and retaining clients
are an  understanding  of clients'  specific  job  requirements,  the ability to
provide professional  personnel in a timely manner, the monitoring of quality of
job performance,  and the price of services.  The primary competitive factors in
obtaining  qualified  candidates for  professional  employment  assignments  are
wages,  responsiveness  to work  schedules,  continuing  professional  education
opportunities,  and number of hours of work available.  Management believes that
MPS is highly competitive in all of these areas.

FULL-TIME EMPLOYEES

At March  15,  2000,  the  Company  employed  approximately  9,400  professional
consultants  and  approximately   1,400  corporate   employees  on  a  full-time
equivalent   basis.   Approximately  60  of  the  employees  work  at  corporate
headquarters.  Full-time employees are covered by life and disability  insurance
and receive health and other benefits.

GOVERNMENT REGULATIONS

Outside of the United States and Canada,  the personnel  outsourcing  segment of
the Company's  business is closely  regulated.  These  regulations  differ among
countries but generally may regulate:  (i) the relationship  between the Company
and its temporary employees; (ii) licensing and reporting requirements; and(iii)
types of  operations  permitted.  Regulation  within the United  States does not
materially impact the Company's operations.

SERVICE MARKS

The  Company or its  subsidiaries  maintain a number of service  marks and other
intangible rights,  including federally registered service marks for, ACCOUNTING
PRINCIPALS  (and  logo),  MANCHESTER,   SCIENTIFIC  STAFFING,  SPECIAL  COUNSEL,
DIVERSIFIED SEARCH,  CAREERSTAT,  EXALT, MANCHESTER PARTNERS INTERNATIONAL,  and
ENTEGEE  for its  services  generally.  The  Company  or its  subsidiaries  have
applications  pending   before  the  Patent and  Trademark  Office  for  federal
registration  of the service marks for MODIS  PROFESSIONAL  SERVICES (and logo),
PROCOACHING,  DIVERSIFIED TECHNOLOGY PARTNERS,  and MANAGEMENT  PRINCIPALS.  The
Company plans to file affidavits of use and timely renewals, as appropriate, for
these and other intangible rights it maintains.

SALE OF COMMERCIAL AND HEALTH CARE DIVISIONS

The Company sold its  Commercial  operations  and its  Teleservices  division to
Randstad U.S.,  L.P., a subsidiary of Randstad  Holding nv, for a final adjusted
price of $826.2 million,  in cash. The sale was completed on September 27, 1998.
Effective  March 30, 1998, the Company sold the operations and certain assets of
its Health Care division for  consideration of $8.0 million,  consisting of $3.0
million in cash and $5.0 million in a note receivable due March 30, 2000 bearing
interest at 2% in excess of the prime rate.  In addition,  the Company  retained
the  accounts  receivable  of the Health Care  division of  approximately  $28.2
million.  See  Item  7  and  Note  3 to  the  Company's  Consolidated  Financial
Statements  for discussion of the sale of the Company's  Commercial  operations,
Teleservices division, and Health Care operations.

SEASONALITY

The Company's  quarterly  operating results are affected primarily by the number
of billing days in the quarter and the seasonality of its customers' businesses.
Demand  for the  Company's  services  has  historically  been  lower  during the
year-end  holidays  through  February of the  following  year,  showing  gradual
improvement over the remainder of the year.

ITEM 2. PROPERTIES

The Company owns no material real property. It leases its corporate headquarters
as well as all of its branch offices. The branch office leases generally run for
three to five-year terms. The Company believes that its facilities are generally
adequate  for its  needs  and  does not  anticipate  difficulty  replacing  such
facilities or locating additional facilities, if needed.

ITEM 3. LEGAL PROCEEDINGS

The  Company,  in the  ordinary  course  of its  business,  is from time to time
threatened  with or  named as a  defendant  in  various  lawsuits.  The  Company
maintains  insurance in such amounts and with such coverage and  deductibles  as
management  believes are reasonable and prudent.  There is no pending litigation
that the  Company  believes is likely to have a material  adverse  effect on the
Company, its financial position or results of its operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the twelve months ended December 31, 1999.




                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

                          PRICE RANGE OF COMMON STOCK

The  following  table sets forth the  reported  high and low sales prices of the
Company's  Common Stock for the  quarters  indicated as reported on the New York
Stock  Exchange  under the symbol "ASI" through  September  30, 1998.  Effective
October 1, 1998,  subsequent to the Company's sale of its  Commercial  opertions
and  Teleservices  division,  the Company  changed its trading  symbol and began
trading on the New York Stock Exchange under "MPS".

<TABLE>
<CAPTION>
<S>                                                                                    <C>                  <C>

FISCAL YEAR 1998                                                                          High                 Low

         First Quarter........................................................           $35.00              $22.00

         Second Quarter.......................................................            38.86               29.38

         Third Quarter........................................................            33.25               10.50

         Fourth Quarter.......................................................            18.63                9.94

FISCAL YEAR 1999

         First Quarter........................................................           $17.13              $ 7.00

         Second Quarter.......................................................            15.63                8.00

         Third Quarter........................................................            17.50               11.88

         Fourth Quarter.......................................................            14.81                9.50
</TABLE>

In addition to the factors set forth below in 'FACTORS  WHICH MAY IMPACT  FUTURE
RESULTS AND FINANCIAL CONDITION' under 'MANAGEMENT'S  DISCUSSION AND ANALYSIS OF
FINANCIAL  CONDITION  AND  RESULTS OF  OPERATIONS',  the price of the  Company's
Common Stock is affected by  fluctuations  and  volatility  in the financial and
equity markets generally and in the Company's industry sector in particular.

As  of  March 15, 2000,  there were  approximately  913 holders of record of the
Company's Common Stock.

No cash dividend or other cash distribution with respect to the Company's Common
Stock has ever been paid by the Company. The Company currently intends to retain
any earnings to provide for the operation and expansion of its business and does
not  anticipate  paying  any  cash  dividends  in the  foreseeable  future.  The
Company's  revolving  credit  facility  prohibits the payment of cash  dividends
without the lender's consent.

On October 31, 1998, the Company's Board of Directors  authorized the repurchase
of up to $200.0  million  of the  Company's  Common  Stock  pursuant  to a share
buyback program. On December 4, 1998, the Company's Board of Directors increased
the authorized share buyback program by an additional  $110.0 million,  bringing
the total  authorized  repurchase  amount to $310.0 million.  As of December 31,
1998,  the Company had  repurchased  approximately  21,751,000  shares under the
share buyback  program.  Subsequent to December 31, 1998, the Company  completed
the program during February 1999, with the repurchase of  approximately  616,000
shares, bringing the total shares repurchased under the program to approximately
22,367,000  shares for  approximately  $297.9 million.  All of these shares were
retired upon  purchase.  On November 4, 1999,  the Company's  Board of Directors
authorized the repurchase of up to $65.0 million of the Company's  common stock.
As of March 15, 2000, no shares have been repurchased under this  authorization.
See  'LIQUIDITY  AND  CAPITAL  RESOURCES'  under  'MANAGEMENT'S  DISCUSSION  AND
ANALYSIS OF  FINANCIAL  CONDITION  AND  RESULTS OF  OPERATIONS'  for  additional
information.




<PAGE>
<TABLE>
<CAPTION>
ITEM 6.  SELECTED FINANCIAL DATA
                                                                   Fiscal Years Ended
                                       ------------------------------------------------------------------------------------
                                                   Dec. 31,        Dec. 31,        Dec. 31,       Dec. 31,       Dec. 31,
(in thousands, except per share amounts)             1999          1998 (1)        1997 (1)       1996 (1)       1995 (1)
- -------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>             <C>            <C>            <C>
Statement of Income Data:
Revenue                                        $    592,455    $    537,973      $  383,489   $    179,608    $    21,179
Cost of Revenue                                     397,462         372,213         264,147        134,276         15,157
                                       ------------------------------------------------------------------------------------
Gross Profit                                        194,993         165,760         119,342         45,332          6,022
Operating expenses                                  140,603         115,426          80,656         34,798          3,792
Restructuring and impairment charges                 (2,314)         18,683               -              -              -
Asset write-down related to sale of
  discontinued operations                            25,000               -               -              -              -
                                       ------------------------------------------------------------------------------------
Operating income from continuing
   operations                                        31,704          31,651          38,686         10,534          2,230
Other income, (expense), net                         (1,916)            596          (8,008)          (749)          (484)
                                        ------------------------------------------------------------------------------------
Income from continuing operations
   before income taxes                               29,788          32,247          30,678          9,785          1,746
Provision for income taxes                           11,191          14,556          11,186          3,676            952
                                       ------------------------------------------------------------------------------------
Income from continuing operations                    18,597          17,691          19,492          6,109            794
Discontinued operations:
Income from discontinued operations,
   net of income taxes                               63,538          81,189          82,541         25,101         27,778
Gain on sale of discontinued operations,
   net of income taxes                               14,955         230,561               -              -              -
                                       ------------------------------------------------------------------------------------
Income before extraordinary loss                     97,090         329,441         102,033         31,210         28,572
Extraordinary loss on early
   extinguishment of debt, net of
   income tax benefit                                     -          (5,610)              -              -              -
                                       ------------------------------------------------------------------------------------
Net income                                     $     97,090    $    323,831      $  102,033   $     31,210     $   28,572
                                       ====================================================================================
Basic income (loss) per common share:
   From continuing operations                  $       0.19    $       0.16      $     0.19   $       0.07     $     0.01
                                       ====================================================================================
   From discontinued operations                $       0.66    $       0.75      $     0.81   $       0.27     $     0.45
                                       ====================================================================================
   From gain on sale (2)                       $       0.16    $       2.12      $        -   $          -     $        -
                                       ====================================================================================
   From extraordinary item                     $          -    $      (0.05)     $        -   $          -     $        -
                                       ====================================================================================
   Basic net income per common share           $       1.01    $       2.98      $     1.00   $       0.34     $     0.46
                                       ====================================================================================
Diluted income (loss) per common share:
   From continuing operations                  $       0.19    $       0.18      $     0.21   $       0.07      $    0.01
                                       ====================================================================================
   From discontinued operations                $       0.66    $       0.69      $     0.72   $       0.26     $     0.42
                                       ====================================================================================
   From gain on sale (2)                       $       0.15    $       1.97      $        -   $          -     $        -
                                       ====================================================================================
   From extraordinary item                     $          -    $      (0.05)     $        -   $          -     $        -
                                       ====================================================================================
   Diluted net income per common share         $       1.00    $       2.79      $     0.93   $       0.33     $     0.43
                                       ====================================================================================




                                                                   Fiscal Years Ended
                                       ------------------------------------------------------------------------------------
                                                    Dec. 31,         Dec. 31,       Dec. 31,       Dec. 31,       Dec. 31,
(in thousands, except per share amounts)            1999             1998 (1)       1997 (1)       1996 (1)       1995 (1)
- -------------------------------------------------------------------------------------------------------------------------
Basic average common shares
   outstanding                                       96,268          108,518        101,914         90,582         62,415
Diluted average common                 ====================================================================================
   shares outstanding                                97,110          116,882        113,109         95,317         69,328
                                       ====================================================================================

</TABLE>
<TABLE>
<CAPTION>
                                                                          As of
                                       ------------------------------------------------------------------------------------
                                                    Dec. 31,          Dec. 31,     Dec. 31,         Dec. 31,      Dec. 31,
                                                     1999             1998 (1)     1997 (1)         1996 (1)      1995 (1)
                                       ====================================================================================
<S>                                              <C>            <C>             <C>            <C>            <C>
Balance Sheet data:
Working capital                                $      62,829     $    (76,370)  $   44,086     $     93,769   $   239,388
Total assets                                       1,490,331        1,359,166    1,275,012          776,451       298,008
Long term debt                                       228,000            1,988      425,143           89,733        91,461
Stockholders' equity                               1,182,515        1,070,110      812,842          669,779       195,085
</TABLE>

(1)  Includes the financial  information of the Company for the respective years
     noted  above  restated to account for any  material  business  combinations
     accounted for under the pooling-of-interests method of accounting.

(2)  Gain on sale  relates  to the  gain on the  sale of the net  assets  of the
     Company's  discontinued  operations.  See  Note  3   to  the   Consolidated
     Financial Statements for a further discussion.



Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS


During 1999, the Company's  Board of Directors  announced that the Company would
spin-off its Information  Technology  division  ('modis') to its shareholders in
the form of a tax-free  stock  dividend.  The  spin-off is subject to market and
other conditions,  including regulatory and tax clearances.  The distribution is
expected to be completed before December 31, 2000.

Effective September 27, 1998 and March 30, 1998, the Company sold its Commercial
operations and Teleservices  division,  and the operations and certain assets of
its Health Care division,  respectively,  (jointly the "Commercial Businesses").
The  Commercial  operations  and  Teleservices  division  were sold with a final
adjusted  purchase  price  of  $826.2  million  in cash  to  Randstad  U.S.,  LP
('Randstad'), the U.S. operating company of Ranstad Holding nv, an international
staffing company based in The Netherlands.  The operations and certain assets of
the Health Care division were sold for consideration of $8.0 million, consisting
of $3.0 million in cash and $5.0 million in a note receivable due March 30, 2000
bearing interest at 2% in excess of the prime rate.

As a result of the proposed  spin-off and the sale of the  Company's  Commercial
and Health Care operations,  the Company's Consolidated Financial Statements and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  have been  reclassified  to report the results of  operations of its
Information  Technology,  Commercial,  Teleservices and Health Care divisions as
discontinued operations for all periods presented.

In connection with the Company's sale of its health care operations, the Company
entered into an agreement  with the purchaser of the health care assets  whereby
the Company agreed to make advances to the purchaser to fund its working capital
requirements.  These  advances  are  collateralized  by the  assets  of the sold
operations, primarily the accounts receivable. In the third quarter of 1999, the
Company was  informed by the  purchaser of its health care  operations  that the
purchaser was going to default on its  obligation to the Company.  The purchaser
of the Company's  health care  operations is attempting to enter into agreements
with  its   franchisees   and  potential   acquirors  of   franchises   and  the
purchaser-owned  locations,  whereby net accounts  receivable and any additional
amounts  realized  from  the  sale  of  purchaser-owned  locations  will,  after
operating  costs,  be  applied  against  the  purchaser's  debt to the  Company.
Further,  the  purchaser  has named an interim CEO to operate the business in an
effort to maximize debt reduction to the Company.  However, in the third quarter
of 1999,  the Company  believed it was  probable  that a portion of the advances
would not be repaid and  accordingly,  provided an  allowance  for the  advances
estimated to be uncollectible related to the sale of the Company's  discontinued
health care operations of $25.0 million.

As a result of the proposed  spin-off and the sale of the  Company's  Commercial
and Health Care operations,  the Company's Consolidated Financial Statements and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  have been  reclassified  to report the results of  operations of its
Information  Technology,  Commercial,  Teleservices and Health Care divisions as
discontinued operations for all periods presented.

The following detailed analysis of operations should be read in conjunction with
the 1999 Financial  Statements and related notes included elsewhere in this Form
10-K.

                       FISCAL 1999 COMPARED TO FISCAL 1998

Results from continuing operations

Revenue.  Revenue increased $54.5 million, or 10.1%, to $592.5 million in fiscal
1999 from $538.0  million in fiscal 1998.  The majority of the growth in revenue
was internal,  or organic,  growth. Growth in 1999 was effected by the Company's
strategic  restructuring and repositioning plan (the 'restructuring plan') which
resulted  in the closing of  approximately  23  offices.  As a result,  the 1998
revenue  figures include an entire years' worth of revenue of the closed offices
whereas the 1999 results include only a partial years' worth of revenue.  If the
results of these  closed  offices  were  removed in both  fiscal  1999 and 1998,
revenue would have increased by 16.4%.  The Company operates  primarily  through
five    operating    divisions    consisting   of   the    accounting,    legal,
engineering/technical,   career   management   and   consulting  and  scientific
divisions.

Gross Profit. Gross profit increased $29.2 million or 17.6% to $195.0 million in
fiscal 1999 from $165.8 million in fiscal 1998.  Gross margin increased to 32.9%
in fiscal  1999 from 30.8% in fiscal  1998.  The  increase  in gross  margin was
primarily  a result  of the  Company's  continued  migration  to  higher  margin
solutions-type  engagements,  as well as a result of the Company's restructuring
plan which closed certain less profitable offices.

Operating  expenses.  Operating  expenses  increased  $29.2  million or 21.8% to
$163.3  million in fiscal 1999 from  $134.1  million in fiscal  1998.  Operating
expenses before one-time income items and  depreciation and  amortization,  as a
percentage of revenue  increased to 21.4% in fiscal 1999 as compared to 19.2% in
fiscal  1998.  Included in 1999  operating  costs is a one-time  charge of $25.0
million relating to the impairment of the recoverability of advances made by the
Company to the  purchaser  of the Health Care  operations.  See  'LIQUIDITY  AND
CAPITAL  RESOURCES'  below.  Also included is a one-time  credit of $2.3 million
adjusting the lease  component of the  restructuring  and  impairment  charge of
$18.7 million  taken in fiscal 1998 as a result of the Company not  experiencing
the expected  levels of payments on cancelled  facility  leases  relating to the
closing of certain  offices.  Included in operating  expenses during both fiscal
1999 and 1998 are the costs  associated  with  projects to ensure  accurate date
recognition  and data  processing with respect to Year 2000 as it relates to the
Company's  business,  operations,  customers and vendors.  These costs have been
immaterial  to date  and are not  expected  to  have a  material  impact  on the
Company's results of operations, financial condition or liquidity in the future.
See 'OTHER MATTERS - Year 2000 Compliance' below.

Income from  operations.  As a result of the foregoing,  income from  operations
remained  constant at $31.7 million in fiscal 1999 and fiscal 1998.  Income from
operations,  before  one-time  income items,  increased  $4.1 million or 8.2% to
$54.4  million in fiscal  1999 from $50.3  million in fiscal  1998.  Income from
operations,  before  one-time  income items as a percentage of revenue  remained
relatively constant at 9.2% in fiscal 1999 as compared to 9.4% in fiscal 1998.

Other income (expense).  Other income (expense)  consists  primarily of interest
income related to cash on hand and interest expense related to borrowings on the
Company's  credit  facility and notes issued in  connection  with  acquisitions.
Interest  expense  increased  to $1.9  million  in fiscal  1999 as  compared  to
interest income earned of $0.6 million in fiscal 1998. Interest income in fiscal
1998 was  primarily  a result  of the  cash on hand  related  to the sale of the
Company's  discontinued  commercial  and health  care  operations.  The  Company
recorded net interest expense in 1999 related to net borrowings on the Company's
credit facility primarily for payment of taxes and other expenses on the sale of
the Company's  commercial  and health care  operations and for the repurchase of
approximately  $297.9 million of the Company's common stock, in late fiscal 1998
and early fiscal 1999.

Income Taxes. The Company's effective tax rate decreased to 37.6% in fiscal 1999
compared  to  45.1%  in  fiscal  1998.  The  decrease  is due to a $9.9  million
non-deductible  goodwill  impairment  charge  included in taxable  income during
fiscal 1998 (included in the restructuring and impairment charge discussed above
and in Note  13 to the  Consolidated  Financial  Statements  included  elsewhere
herein).  Absent these  charges,  the Company's  effective tax rate increased to
37.6% in fiscal 1999 as compared to 34.5% in fiscal 1998,  primarily as a result
of  a  one-time   deduction  in  connection  with  the  sale  of  the  Company's
discontinued commercial operations.

Income from  continuing  operations.  As a result of the foregoing,  income from
continuing  operations increased $0.9 million or 5.1% to $18.6 million in fiscal
1999 from $17.7 million in fiscal 1998.  Income from continuing  operations as a
percentage of revenue decreased to 3.1% in fiscal 1999 from 3.3% in fiscal 1998.
Income from continuing  operations before one-time income items and the increase
in the effective tax rate as a result of the non-deductible  goodwill impairment
charge as a percentage  of revenue  decreased to 5.5% in fiscal 1999 as compared
to 6.2% in fiscal 1998.

Results of discontinued operations

The reported  results from  discontinued  operations  include the results of the
Company's  commercial  operations and Teleservices  division for the nine months
ended  September 30, 1998, the results of the Company's  health care  operations
for the  period  January  1, 1998  through  March 28,  1998.  In  addition,  the
Company's Information Technology division,  anticipated to be distributed to the
Company's  shareholders  in a tax-free  spin-off  prior to December 31, 2000, is
shown as discontinued  operations for fiscal 1999 and fiscal 1998. The following
discloses  the  results  of  the  discontinued  Commercial  businesses  and  the
Information Technology businesses for fiscal 1999 and fiscal 1998:

<TABLE>
<CAPTION>
                                                               Years ended December 31,
                                                                1999              1998
 <CAPTION>
<S>                                                        <C>               <C>
  Discontinued Commercial businesses:
      Revenue                                              $           -     $     919,400
      Cost of revenue                                                  -           708,930
      Operating expense                                                -           156,180
           Operating income                                            -            54,290
      Interest, net                                                    -             4,200
      Provision for income taxes                                       -            20,070
           Income from discontinued commercial businesses              -            30,020

  Discontinued IT businesses:
      Revenue                                              $   1,349,194     $   1,164,140
      Cost of Revenue                                          1,018,439           862,324
      Operating Expense                                          222,247           202,305
           Operating Income                                      108,508            99,511
      Interest, net                                                5,878            14,572
      Provision for income taxes                                  39,092            33,770
           Income from discontinued IT businesses                 63,538            51,169
</TABLE>


Included  in the  operating  expenses  during  both  fiscal  1999  and  1998 are
allocations of certain net common expenses for corporate support and back office
functions totaling  approximately $15.2 million and $8.0 million,  respectively.
Corporate  support  and back  office  allocations  are based on the ratio of the
Company's  consolidated  revenues to that of the discontinued  Commercial and IT
Businesses. Additionally, results of discontinued operations include allocations
of  consolidated  interest  expense  totaling $5.9 million and $18.8 million for
fiscal 1999 and 1998,  respectively.  The allocations were based on the historic
funding  needs of the  discontinued  operations,  including:  the  purchases  of
property, plant and equipment,  acquisitions, current income tax liabilities and
fluctuating working capital needs.




                         FISCAL 1998 VERSUS FISCAL 1997


Results from continuing operations

Revenue.  Revenue increased $154.5 million, or 40.3% to $538.0 million in fiscal
1998 from $383.5  million in fiscal 1997. A significant  portion of the increase
was  the  result  of the  acquisition  of a  large,  international  provider  of
accounting services during June 1997, which resulted in approximately six months
of post  acquisition  revenue in fiscal 1997 results versus twelve months during
fiscal 1998.  Also  included in the 1998  revenues  are revenues  derived from a
project  in the  Company's  Legal  division  and with a  certain  customer.  The
revenues from this project amounted to approximately  $16.1 million,  or 3.0% of
total revenue.  This project was completed during the early part of fiscal 1999.
The Company operates  primarily through five operating  divisions  consisting of
the accounting, legal, engineering / technical, career management and consulting
and scientific divisions.

Gross Profit.  Gross profit increased $46.5 million, or 39.0%, to $165.8 million
in fiscal 1998 from $119.3  million in fiscal 1997.  Gross  margin  decreased to
30.8% in fiscal  1998 from 31.1% in fiscal  1997.  The  overall  decrease in the
gross margin was due  primarily to an increased  percentage of revenues from the
United  Kingdom,  increased  salary  pressures  due to a  continued  shortage of
skilled  workers,  higher  benefits costs  including a matching  401(k) plan and
holiday and vacation pay, and increased competition within the segment including
downward pricing pressure from competitors.

Operating  Expenses.  Operating expenses  increased $53.4 million,  or 66.2%, to
$134.1  million in fiscal 1998 from $80.7  million in fiscal  1997.  Included in
operating  expenses  in  fiscal  1998 are $18.7  million  in  restructuring  and
impairment  charges  associated  with the  Company's  Integration  and Strategic
Repositioning Plan (the 'Restructuring  Plan').  Operating expenses before these
non-recurring  items as a  percentage  of revenue  increased  to 21.5% in fiscal
1998,  from 21.0% in fiscal  1997.  The  Company's  general  and  administrative
("G&A") expenses before the non-recurring items increased $30.8 million or 42.5%
to $103.2 million in fiscal 1998 from $72.4 million in fiscal 1997. The increase
in G&A expenses was primarily  related to: the effects of  acquisitions  made by
the  Company;  internal  growth  of the  operating  companies  post-acquisition;
investments made to improve  infrastructure and to develop technical  practices;
and  increased  expenses  at the  corporate  level to support  the growth of the
Company  including  sales,  marketing  and brand  recognition.  Included  in G&A
expenses  during both 1998 and 1997 are the costs  associated  with  projects to
ensure  accurate date  recognition  and data processing with respect to the Year
2000 as it relates to the Company's business, operations, customers and vendors.
See 'OTHER MATTERS - Year 2000 Compliance' below.

Income from  Operations.  As a result of the foregoing,  income from  operations
decreased  $7.0  million,  or 18.1%,  to $31.7 million in fiscal 1998 from $38.7
million in fiscal  1997.  Income  from  operations  before  non-recurring  items
increased  $11.6 million,  or 30.0%,  to $50.3 million in fiscal 1998 from $38.7
million  in  fiscal   1997.   Income  from   operations   before   non-recurring
restructuring  and impairment costs as a percentage of revenue decreased to 9.4%
in fiscal 1998 from 10.1% in fiscal 1997.

Other Income (Expense).  Interest expense decreased $8.6 million to $0.6 million
of  interest  income in fiscal  1998 from $8.0  million in  interest  expense in
fiscal  1997.  The decrease in interest  expense  resulted  primarily  from four
sources: (1) the sale of the Company's Commercial and teleservices divisions and
the resultant net cash proceeds of  approximately  $373.0 million (net of $477.0
million  used  to pay off and  terminate  the  Company's  then  existing  credit
facility) which earned interest income from October 1, 1998 through December 31,
1998; (2) the resulting  interest  savings from October 1, 1998 through December
31, 1998 from paying off the existing  credit facility (the new facility did not
have a balance as of December  31,  1998);  (3)  investment  income from certain
investments  owned by the Company;  and (4) interest  income earned from cash on
hand at certain subsidiaries of the Company.

Income Taxes. The Company's effective tax rate was 45.1% in fiscal 1998 compared
to 36.5% in fiscal 1997.  The  increase is due to a $9.9 million  non-deductible
goodwill  impairment  charge included in taxable income during 1998 (included in
the  restructuring  and impairment  charge discussed above and in Note 13 to the
Consolidated  Financial  Statements  included  elsewhere  herein).  Absent these
charges,  the  Company's  effective  tax rate would have  decreased to 34.5% for
fiscal  1998  compared  to 36.5% in  fiscal  1997,  primarily  as a result  of a
one-time  deduction in connection  with the sale of the  Company's  discontinued
commercial operations.

Income from  continuing  operations.  As a result of the foregoing,  income from
continuing operations decreased $1.8 million, or 9.2%, to $17.7 million in 1998
from $19.5  million in fiscal  1997.  Income  from  continuing  operations  as a
percentage of revenue decreased to 3.3% in fiscal 1998 from 5.1% in fiscal 1997,
due  primarily to the decrease in income  attributable  to the  recording of the
restructuring  and impairment  charge,  and the increase in the effective income
tax rate due to the  non-deductible  goodwill  impairment  charge.  Exclusive of
these non-recurring  costs, income from continuing  operations during 1998 would
have increased $13.9 million to $33.4 million, increasing income from continuing
operations as a percentage of revenue to 6.2%.

Results of discontinued operations

The reported  results from  discontinued  operations  include the results of the
Company's commercial operations for the nine months ended September 30, 1998 and
the entirety of fiscal 1997, the results of the Company's health care operations
for the period January 1, 1998 through March 28, 1998 and the entirety of fiscal
1997. In addition,  the Company's  Information  Technology  division is shown as
discontinued operations for fiscal 1998 and fiscal 1997. The following discloses
the results of the discontinued Commercial businesses along with the Information
Technology businesses for fiscal 1998 and fiscal 1997:

<TABLE>
<CAPTION>
                                                                   Years ended December 31,
                                                                    1998              1997
 <CAPTION>
<S>                                                               <C>               <C>
  Discontinued Commercial businesses:
      Revenue                                                $     919,400     $   1,260,702
      Cost of revenue                                              708,930           975,489
      Operating expense                                            156,180           215,437
           Operating income                                         54,290            69,776
      Interest, net                                                  4,200             4,374
      Provision for income taxes                                    20,070            26,739
           Income from discontinued commercial businesses           30,020            38,663

  Discontinued IT businesses:
      Revenue                                                $   1,164,140     $     780,634
      Cost of Revenue                                              862,324           571,464
      Operating Expense                                            202,305           131,068
           Operating Income                                         99,511            78,102
      Interest, net                                                 14,572             6,608
      Provision for income taxes                                    33,770            27,617
           Income from discontinued IT businesses                   51,169            43,878
</TABLE>


Included  in the  operating  expenses  during  both  fiscal  1998  and  1997 are
allocations of certain net common expenses for corporate support and back office
functions totaling  approximately  $8.0 million and $6.4 million,  respectively.
Corporate  support  and back  office  allocations  are based on the ratio of the
Company's  consolidated  revenues to that of the discontinued  Commercial and IT
Businesses. Additionally, results of discontinued operations include allocations
of consolidated  interest  expense  totaling $18.8 million and $11.0 million for
fiscal 1998 and 1997,  respectively.  The allocations were based on the historic
funding  needs of the  discontinued  operations,  including:  the  purchases  of
property, plant and equipment,  acquisitions, current income tax liabilities and
fluctuating working capital needs.

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

The  Company's  capital  requirements  have  principally  been  related  to  the
acquisition of businesses, working capital needs and capital expenditures. These
requirements  have been met through a  combination  of bank debt,  issuances  of
Common Stock and internally  generated funds. The Company's operating cash flows
and working capital  requirements  are affected  significantly  by the timing of
payroll and by the receipt of payment from the customer.  Generally, the Company
pays  its  consultants  weekly  or  semi-monthly,  and  receives  payments  from
customers within 30 to 80 days from the date of invoice.

The  Company  had working  capital of $62.8  million  and $(76.4)  million as of
December 31, 1999 and 1998, respectively.  Included in current liabilities as of
December 31, 1999 and 1998 were amounts related to earn-out  payments due to the
former owners of acquired  companies.  The earn-out amounts were scheduled to be
paid in the first and second quarters of fiscal 2000 and 1999, respectively, and
were  capitalized to the goodwill  balances  related to the respective  acquired
companies.  See Note 13 to the Company's  Consolidated  Financial Statements for
further  discussion of the  Restructuring  Plan.  The  principal  reason for the
increase in the  Company's  working  capital is the Company's  recognition  of a
$175.0  million  current tax  liability as of December 31, 1998  relating to the
sale of its Commercial  operations and Teleservices  division.  The Company used
proceeds from borrowings under its credit facility to pay the tax liability. The
majority  of the  proceeds  from the sale were used to pay down  long-term  debt
under its credit facility (which did not have a balance as of December 31, 1998)
and to repurchase the Company's  Common Stock under an approved stock repurchase
plan.  The  Company  had cash and cash  equivalents  of $0.9  million  and $73.4
million as of  December  31,  1999 and 1998,  respectively.  For the years ended
December  31,  1999 and 1998,  the  Company  generated  $45.7  million and $27.7
million of cash flow from operations,  respectively. For the year ended December
31,  1997,  the  Company  used $2.7  million of cash for  operations.  The large
increases in cash flows from  operations year over year are due to the cash flow
provided  from internal  operations,  as well as from  acquired  companies.  The
majority  of the  Company's  acquisitions  occurred  throughout  the years ended
December 31, 1998 and 1997. Due to the timing of the acquisitions, the cash flow
from operations has increased during the years ended December 31, 1999 and 1998,
respectively.

For the year ended  December 31, 1999,  the Company used $252.0  million of cash
for  investing  activities,  primarily  as a result of taxes and other  expenses
related to the Company's sale of the Commercial  businesses,  of $191.4 million.
The balance of $60.6 million  relates to cash the Company used for  acquisitions
of $39.7 million, for capital expenditures of $1.7 million, and advances related
to the sale of its discontinued Healthcare operations of $19.2 million.

For the year ended  December 31, 1998, the Company  generated  $778.9 million of
cash flow from  investing  activities,  primarily as a result of net proceeds of
$840.9 million received from the Company's sale of its Commercial operations and
Teleservices  division.  The  Company  also used  $62.0  million  for  investing
activities,  which was  comprised of cash the Company used for  acquisitions  of
$38.4 million, for capital expenditures of $7.7 million, and advances related to
the sale of its discontinued Healthcare operations of $15.9 million.

In addition,  the Company is subject to claims for indemnification  arising from
the sales of its Commercial  operations and Teleservices division and its Health
Care  division  in 1998.  For the year ended  December  31,  1999 and 1998,  the
Company  did  not pay any  indemnification  claims.  Although  the  Company  has
received  certain  claims for  indemnification  or notices  of  possible  claims
pursuant  to such  obligations, the  Compnay  believes  that it has  meritorious
defenses  against  such  claims  and does  not  believe  that  such  claims,  if
successful,  would have a material  adverse  effect on the Company's cash flows,
financial condition or results of operations.

In connection with the Company's sale of its Health Care operations, the Company
entered  into an  agreement  with the  purchaser  of the Health Care  operations
whereby the Company agreed to make advances to the purchaser to fund its working
capital  requirements.  Any amounts extended are  collateralized by the accounts
receivable  and  certain  other  assets of the related  health care  operations.
Advances  made under this  agreement  accrue  interest  at 10% per year.  During
fiscal 1999 and 1998,  the Company had  advanced  approximately  $19.2 and $15.9
million,  respectively,  under  this  agreement.  See  Note 12 to the  Company's
Consolidated  Financial  Statements for further discussion of this agreement and
the Company's write-down of this asset in fiscal 1999.

For the year ended  December  31,  1997,  the Company  used  $138.6  million for
investing activities, of which $135.4 million was used for acquisitions and $3.2
million was used for capital expenditures.  The Company made one, four and eight
acquisitions  in each of the  years  ended  December  31,  1999,  1998 and 1997,
respectively.

For the year ended December 31, 1999, the Company  generated $241.8 million from
financing activities.  During fiscal 1999, this amount primarily represented net
borrowings from the Company's credit  facility,  which was used primarily to pay
the tax  liability  and  other  payments  related  to the  sale fo the  Company'
Commercial operations and Teleservices division.

For the year ended  December  31,  1998,  the Company  used  $648.8  million for
financing  activities  of which  $309.7  million  were  used to  repurchase  the
Company's  Common Stock,  $339.7  million  which  represents  net  repayments on
borrowings  from the  Company's  credit  facility and notes issued in connection
with  the  acquisition  of  certain  companies,  $23.6  million  related  to the
repurchase  of the  Company's 7%  Convertible  Senior Notes Due 2002,  and $24.2
million related to the proceeds from stock options exercised.  The repayments on
the Company's  credit facility were mainly funded from the sale of the Company's
Commercial operations and Teleservices division.

On October 31, 1998, the Company's Board of Directors  authorized the repurchase
of up to $200.0  million  of the  Company's  Common  Stock  pursuant  to a share
buyback program. On December 4, 1998, the Company's Board of Directors increased
the authorized share buyback program by an additional  $110.0 million,  bringing
the total  authorized  repurchase  amount to $310.0 million.  As of December 31,
1998,  the Company had  repurchased  approximately  21,751,000  shares under the
share buyback  program.  Included in the shares  repurchased  as of December 31,
1998 were approximately  6,150,000 shares repurchased under an accelerated stock
acquisition  plan  ("ASAP").  The Company  entered  into the ASAP with a certain
brokerage firm which agreed to sell to the Company shares of its Common Stock at
a certain cost.  The brokerage firm borrowed these shares from its customers and
was required to enter into market transactions, subject to Company approval, and
purchase shares of Company Common Stock to return to its customers. The Company,
pursuant to the ASAP,  agreed to compensate the brokerage firm for any increases
in the  Company's  stock  price that would  cause the  brokerage  firm to pay an
amount to purchase the stock over the ASAP price. Conversely,  the Company would
receive a refund in the purchase  price if the Company's  stock price fell below
the ASAP price.  Subsequent  to December  31, 1998,  the Company  used  refunded
proceeds from the ASAP to complete the program during January and February 1999,
with the repurchase of approximately  616,000 shares,  bringing the total shares
repurchased   under  the  program  to   approximately   22,348,000   shares  for
approximately $297.9 million. All of these shares were retired upon purchase. On
November 4, 1999, the Company's Board of Directors  authorized the repurchase of
up to $65.0  million of the  Company's  common  stock.  As of March 15, 2000, no
shares have been repurchased under this authorization.

For the years ended December 31, 1997, the Company  generated  $352.5 million of
cash flow from financing  activities.  During fiscal 1997, this amount primarily
represented net borrowings from the Company's credit  facility,  which was  used
primarily to fund acquisitions.

The Company is also  obligated  under  various  acquisition  agreements  to make
earn-out payments to former stockholders of acquired companies over the next two
years. The Company  estimates that the amount of these payments will total $34.6
and $3.9 million annually, for the next two years. The $34.6 million estimate is
included  in the  balance  sheet in line  item  "Accounts  payable  and  accrued
expenses" at December 31, 1999. The Company  anticipates that the cash generated
by the operations of the acquired  companies will provide a substantial  portion
of the capital required to fund these payments.

The Company  anticipates that capital  expenditures for furniture and equipment,
including  improvements  to its  management  information  and operating  systems
during the next twelve months will be  approximately  $5.0 million.

The Company  believes that funds  provided by operations,  available  borrowings
under the credit  facility,  and current  amounts of cash will be  sufficient to
meet its presently  anticipated needs for working capital,  capital expenditures
and acquisitions for at least the next 12 months.


<PAGE>

Indebtedness of the Company

On October 30,  1998,  the Company  entered  into a new $500  million  revolving
credit  facility  which is  syndicated  to a group of 13 banks with  NationsBank
(Bank of  America),  as the  principal  agent.  This  facility is comprised of a
$350.0 million  facility which expires on October 21, 2003 and a $150.0 million,
364 day facility.  On October 27, 1999, the 364 day,  $150.0 million  portion of
the original credit facility was replaced by a new $150.0 million 364 day credit
facility. Pursuant to the 364 day credit facility, the Company has the option to
term  out the 364 day  component  of the  credit  facility  for up to one  year.
Outstanding  amounts  under the  credit  facilities  bear  interest  at  certain
floating  rates as  specified  by the  applicable  credit  facility.  The credit
facilities contain certain financial and non-financial covenants relating to the
Company's operations,  including maintaining certain financial ratios. Repayment
of the credit  facilities  are  guaranteed by the material  subsidiaries  of the
Company.  In addition,  approval is required by the majority of the lenders when
the cash consideration of an individual  acquisition exceeds 10% of consolidated
stockholders' equity of the Company.

As of March 15, 2000, the Company had a balance of approximately  $279.0 million
outstanding under the credit facility.  The Company also had outstanding letters
of credit in the amount of $1.8 million,  reducing the amount of funds available
under the credit facility to approximately  $219.2 million as of March 15, 2000.
A portion  of the  outstanding  balance  under  the  Company's  credit  facility
resulted from the Company's  funding of modis.  The Company funds modis based on
various  needs  including:  purchases  of  furniture,  equipment  and  leasehold
improvements,  acquisitions,  current  income tax  liabilities  and  fluctuating
working capital needs. Upon completion of the spin-off,  modis will repay to MPS
an amount that represents the historical funding needs which resulted from those
items described above. As of December 31, 1999,  approximately $105.9 million of
funding was provided to modis from MPS.

The Company has certain  notes  payable to  shareholders  of acquired  companies
which bear interest at rates ranging from 4.3% to 5.5% and have repayment  terms
from  January 2000 to August  2000.  As of December  31, 1999,  the Company owed
approximately $2.2 million in such acquisition indebtedness.




<PAGE>

INFLATION

The effects of inflation on the Company's operations were not significant during
the periods  presented in the financial  statements.  Generally,  throughout the
periods  discussed above, the increases in revenue have resulted  primarily from
higher volumes, rather than price increases.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and for Hedging Activities." SFAS No. 133 establishes accounting and
reporting  standards  requiring that every derivative  instrument be recorded on
the balance sheet as either an asset or liability  measured at fair value.  SFAS
No. 133  requires  that  changes  in a  derivative's  fair  value be  recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related  results on the hedged item in the income  statement and requires
that a company  formally  document,  designate and assess the  effectiveness  of
transactions  that  receive  hedge  accounting.  In  June,  1999  the  Financial
Accounting  Standards  Board  issued SFAS No. 137, an amendment to SFAS No. 133,
deferring the effective  date of SFAS No. 133. SFAS No. 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000, and cannot be
applied  retroactively.  We have not yet quantified the impacts of adopting SFAS
No. 133 on our financial  statements;  however,  SFAS No. 133 could increase the
volatility of reported earnings and other comprehensive income once adopted.
<PAGE>

OTHER MATTERS

Year 2000  Compliance.  The Year 2000 issue was the result of computer  programs
(whether related to IT systems or non-IT systems) being written using two digits
rather than four digits to define the applicable  year. There were concerns that
computer programs with time sensitive software might recognize a date using "00"
as  the  Year  1900  rather  than  the  Year  2000.  In  preparation   for  such
possibilities, the Company assembled a Year 2000 compliance team to address such
matters company-wide.  The Company, to date, has not observed any instances that
would indicate that the Company's efforts in addressing the Year 2000 issue were
not  successful.  The financial  impact of addressing the Year 2000 issue had no
material impact on the Company's financial  condition,  results of operations or
cash flows.

As to non-IT systems and vendor services,  other than banking  relationships and
utilities (which includes  electrical power, water and related items),  there is
no single system or vendor service that is material to the Company's operations.
As to banking needs, our banking relationships are primarily with large national
and  international  financial  institutions  that addressed  their own Year 2000
compliance procedures and certified their compliance to the Company.  Certain of
our utility vendors  certified  their Year 2000  compliance to the Company.  The
Company established a contingency plan, which ensured the needed back-up utility
sources necessary to maintain the critical  information systems at the corporate
headquarters.  Utility failures at the Company's branch offices or the inability
of the  Company's  customers to operate,  which did not occur,  could have had a
material  adverse effect on revenue sources and could have disrupted  customers'
payment  cycle.  The  costs of Year  2000  compliance  project  for each  matter
individually and all matters in the aggregate were not material to our financial
condition, results of operations, or cash flows.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  following  assessment  of the  Company's  market  risks  does  not  include
uncertainties  that  are  either  nonfinancial  or   nonquantifiable,   such  as
political, economic, tax and other credit risks.

Interest  Rates.  The Company's  exposure to market risk for changes in interest
rates  relates  primarily  to  the  Company's   short-term  and  long-term  debt
obligations and to the Company's investments.

The  Company's  investment  portfolio  consists  of cash  and  cash  equivalents
including  deposits in banks,  government  securities, money market  funds,  and
short-term  investments with maturities,  when acquired, of 90 days or less. The
Company is adverse to principal loss and ensures the safety and  preservation of
its invested funds by placing these funds with high credit quality issuers.  The
Company  constantly  evaluates its invested funds to respond  appropriately to a
reduction in the credit rating of any investment issuer or guarantor.

The Company's  short-term and long-term debt obligations  totaled $230.2 million
as of December 31, 1999 and the Company had $270.2 million  available  under its
current credit facility. The debt obligations consist of notes payable to former
shareholders  of acquired  corporations,  are at a fixed rate of  interest,  and
extend through August 2000. The interest rate risk on these  obligations is thus
immaterial due to the dollar amount and fixed nature of these  obligations.  The
interest rate on the credit facility is variable.

Foreign currency  exchange rates.  Foreign currency exchange rate changes impact
translations of foreign denominated assets and liabilities into U.S. dollars and
future  earnings  and cash  flows from  transactions  denominated  in  different
currencies.  The Company generated approximately 27% of fiscal 1999 consolidated
revenues from  international  operations,  approximately 100% of which were from
the United Kingdom. The United Kingdom's currency has not fluctuated  materially
against the United  States  dollar in fiscal 1999.  See Note 15 to the Company's
Consolidated  Financial  Statements for effect of foreign  currency  translation
adjustments  on net  income.  The Company did not hold or enter into any foreign
currency derivative instruments as of December 31, 1999.

<PAGE>

The Proposed Distribution of the Information Technology
Business

The distribution of the Information Technology business is subject to market and
other conditions, including a determination that the distribution is tax free to
the  Company  and its  shareholders.  Accordingly,  there is some  risk that the
distribution  will not take  place.  In such event,  the price of the  Company's
common stock may decline if not distributing the Information Technology business
is perceived as adversely  impacting  the Company's  focus and market  position.
Conversley,  there can be no assurance  that if the proposed  distribution  does
occur  that the price of the  Company's  common  stock will not  decline  (after
taking into account the value of any securities received in the distribution).

Effect of Fluctuations in the General Economy

Demand  for  the  Company's  professional  business  services  is  significantly
affected by the general level of economic  activity in the markets served by the
Company.  During periods of slowing economic activity,  companies may reduce the
use of outside consultants and staff augmentation  services prior to undertaking
layoffs of full-time  employees.  As a result, any significant economic downturn
could have a material  adverse effect on the Company's  results of operations or
financial condition.

The Company may also be adversely effected by consolidations through mergers and
otherwise of main customers or between major customers with non-customers. These
consolidations  as  well  as  corporate  downsizings  may  result  in  redundant
functions or services and a resulting  reduction in demand by such customers for
the Company's  services.  Also, spending for outsourced business services may be
put on hold until the consolidations are completed.

Competition

The Company's industry is intensely competitive and highly fragmented,  with few
barriers  to entry by  potential  competitors.  The  Company  faces  significant
competition in the markets that it serves and will face significant  competition
in any geographic  market that it may enter. In each market in which the Company
operates,  it competes for both clients and qualified  professionals  with other
firms  offering  similar  services.  Competition  creates an aggressive  pricing
environment and higher wage costs, which puts pressure on gross margins.

Ability to Recruit and Retain Professional Employees

The Company  depends on its ability to recruit and retain  employees who possess
the skills, experience and/or professional  certifications necessary to meet the
requirements of the Company's  clients.  Competition for individuals  possessing
the  requisite  criteria  is  intense,   particularly  in  certain   specialized
professional  skill areas.  The Company  often  competes with its own clients in
attracting  and retaining  qualified  personnel.  There can be no assurance that
qualified  personnel  will be available and  recruited in sufficient  numbers on
economic terms acceptable to the Company.

Ability  to  Continue  Acquisition  Strategy;   Ability  to  Integrate  Acquired
Operations

The Company has experienced significant growth in the past through acquisitions.
Although the Company continues to seek acquisition  opportunities,  there can be
no assurance that the Company will be able to negotiate acquisitions on economic
terms acceptable to the Company or that the Company will be able to successfully
identify  acquisition  candidates and integrate all acquired operations into the
Company.

Possible Changes in Governmental Regulations

From time to time, legislation is proposed in the United States Congress,  state
legislative  bodies  and by  foreign  governments  that would have the effect of
requiring  employers  to  provide  the  same or  similar  employee  benefits  to
consultants  and  other  temporary  personnel  as those  provided  to  full-time
employees.  The  enactment of such  legislation  would  eliminate one of the key
economic reasons for outsourcing certain human resources and could significantly
adversely impact the Company's staff  augmentation  business.  In addition,  the
Company's  costs could increase as a result of future laws or  regulations  that
address insurance, benefits or other employment-related matters. There can be no
assurance that the Company could  successfully  pass any such increased costs to
its clients.



<PAGE>

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a) Consolidated Financial Statements: The following consolidated financial
        statements are included in this Annual Report on Form 10-K:

<TABLE>
<CAPTION>


<S>     <C>
        Report of Independent Certified Public Accountants
        Consolidated Balance Sheets at December 31, 1999 and 1998
        Consolidated Statements of Income for the years ended
           December 31, 1999, 1998, and 1997
        Consolidated Statements of Stockholders' Equity for the years ended
           December 31, 1999, 1998, and 1997
        Consolidated Statements of Cash Flows for the years ended
           December 31, 1999, 1998, and 1997
        Notes to Consolidated Financial Statements


</TABLE>


<PAGE>


               Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders of
Modis Professional Services, Inc.


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of income, of stockholders'  equity,  and of cash flows
present  fairly,  in all  material  respects,  the  financial  position of Modis
Professional Services,  Inc. and its Subsidiaries at December 31, 1999 and 1998,
and the results of their  operations  and their cash flows for each of the three
years in the period ended  December  31, 1999,  in  conformity  with  accounting
principles  generally accepted in the United States.  These financial statements
are the  responsibility of the Company's  management;  our  responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits 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.



PricewaterhouseCoopers, LLP
Jacksonville, Florida
March 30, 2000



<PAGE>
Modis Professional Services Inc. and Subsidiaries
Consolidated Balance Sheets.


<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,      DECEMBER 31,
(dollar amounts in thousands except per share amounts)                                   1999               1998
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                          $       876      $     73,410
   Accounts receivable, net of allowance of $4,251 and $4,114                              95,126            95,595
   Prepaid expenses                                                                         2,381             5,353
   Deferred income taxes                                                                    2,983             6,159
   Note receivable                                                                         18,775            24,411
   Income tax receivable                                                                    9,148                 -
   Other                                                                                    2,856             2,056
                                                                                     ----------------------------------
      Total current assets                                                                132,145           206,984
Furniture, equipment and leasehold improvements, net                                       14,895            16,492
Goodwill, net                                                                             317,939           279,103
Other assets, net                                                                          11,868            12,030
Net assets of discontinued operations                                                   1,013,484           844,557
                                                                                     ----------------------------------
    Total assets                                                                      $ 1,490,331      $  1,359,166
                                                                                     ==================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable                                                                      $     2,239      $      1,884
   Accounts payable and accrued expenses                                                   50,429            89,962
   Accrued payroll and related taxes                                                       16,648            18,101
   Income taxes payable                                                                         -           173,407
                                                                                     ----------------------------------
     Total current liabilities                                                             69,316           283,354
Notes payable, long-term portion                                                          228,000             1,988
Deferred income taxes                                                                      10,500             3,714
                                                                                     ----------------------------------
     Total liabilities                                                                    307,816           289,056
                                                                                     ----------------------------------
Commitments and contingencies (Notes 4,5 and 7)
Stockholders' equity:
   Preferred stock, $.01 par value; 10,000,000 shares authorized;
      no shares issued and outstanding                                                          -                 -
   Common stock, $.01 par value; 400,000,000 shares authorized
      96,043,270 and 96,306,323 shares issued and outstanding, respectively                   960               963
   Additional contributed capital                                                         582,558           563,728
   Retained earnings                                                                      601,989           504,899
   Accumulated other comprehensive (loss) income                                           (2,992)              520
                                                                                     ----------------------------------
     Total stockholders' equity                                                         1,182,515         1,070,110
                                                                                     ----------------------------------
     Total liabilities and stockholders' equity                                       $ 1,490,331      $  1,359,166
                                                                                     ==================================
</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>


Modis Professional Services Inc. and Subsidiaries
Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                               Years Ended December 31,
                                                                      ------------------------------------------
(dollar amounts in thousands except per share amounts)                      1999          1998            1997
- ----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>            <C>
Revenue                                                               $    592,455   $    537,973   $    383,489
Cost of revenue                                                            397,462        372,213        264,147
                                                                      ------------------------------------------
   Gross Profit                                                            194,993        165,760        119,342
                                                                      ------------------------------------------
Operating expenses:
   General and administrative                                              126,910        103,217         72,443
   Depreciation and amortization                                            13,693         12,209          8,213
   Restructuring and impairment charges (recapture)                         (2,314)        18,683              -
   Asset write-down related to sale of discontinued operations              25,000              -              -
                                                                      ------------------------------------------
      Total operating expenses                                             163,289        134,109         80,656
                                                                      ------------------------------------------
Income from operations                                                      31,704         31,651         38,686
Other income (expense), net                                                 (1,916)           596         (8,008)
                                                                      ------------------------------------------
Income from continuing operations before provision for income taxes         29,788         32,247         30,678
Provision for income taxes                                                  11,191         14,556         11,186
                                                                      ------------------------------------------
Income from continuing operations                                           18,597         17,691         19,492
Discontinued operations (Note 3):
Income from discontinued operations (net of income
   taxes of $39,092, $53,840 and $54,355, respectively)                     63,538         81,189         82,541
Gain on sale of discontinued operations (net of income
   taxes of $0, $175,000 and $0, respectively)                              14,955        230,561              -
                                                                      ------------------------------------------
Income before extraordinary loss                                            97,090        329,441        102,033
Extraordinary loss on early extinguishment of debt
   (net of income tax benefit of $3,512)                                         -         (5,610)             -
                                                                      ------------------------------------------
Net income                                                            $     97,090   $    323,831   $    102,033
                                                                      ==========================================
Basic income per common share from continuing operations              $       0.19   $       0.16   $       0.19
                                                                      ==========================================
Basic income per common share from discontinued operations            $       0.66   $       0.75   $       0.81
                                                                      ==========================================
Basic income per common share from gain on sale of
   discontinued operations                                            $       0.16   $       2.12   $          -
                                                                      ==========================================
Basic income per common share from extraordinary item                 $          -   $      (0.05)  $          -
                                                                      ==========================================
Basic net income per common share                                     $       1.01   $       2.98   $       1.00
                                                                      ==========================================
Average common shares outstanding, basic                                    96,268        108,518        101,914
                                                                      ==========================================
Diluted income per common share from continuing operations            $       0.19   $       0.18   $       0.21
                                                                      ==========================================
Diluted income per common share from discontinued operations          $       0.66   $       0.69   $       0.72
                                                                      ==========================================
Diluted income per common share from gain on sale of
   discontinued operations                                            $       0.15   $       1.97   $          -
                                                                      ==========================================
Diluted income per common share from extraordinary item               $          -   $      (0.05)  $          -
                                                                      ==========================================
Diluted net income per common share                                   $       1.00   $       2.79   $       0.93
                                                                      ==========================================
Average common shares outstanding, diluted                                  97,110        116,882        113,109
                                                                      ==========================================

</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>


Modis Professional Services Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                                                 Accumulated
                                                                                                    Other
                                            Preferred     Common           Additional           Comprehensive   Deferred
(dollar amounts in thousands                  Stock       Stock           Contributed  Retained     Income        Stock
except per share amounts)                Shares  Amount   Shares   Amount   Capital    Earnings     (loss)     Compensation  Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>     <C> <C>           <C>     <C>         <C>         <C>        <C>       <C>

Balance, December 31, 1996                 -      -   99,226,813    $ 992   $594,186    $ 79,035    $     -    $(4,434)  $  669,779
Conversion of subordinated debentures                    727,272        7        993           -          -          -        1,000
Exercise of stock options and related
   tax benefit                             -      -    3,069,143       31     30,264           -          -          -       30,295
Vesting of restricted stock                -      -            -        -          -           -          -        977          977
Net income                                 -      -            -        -          -     102,033          -          -      102,033
Issuance of stock related to business
   combinations                            -      -      668,870        7      8,846           -          -          -        8,853
Foreign currency translation               -      -            -        -          -           -        (95)         -          (95)
                                           ----------------------------------------------------------------------------------------
Balance, December 31, 1997                 -      -  103,692,098    1,037    634,289     181,068        (95)    (3,457)     812,842
Repurchase of Common Stock, net            -      -  (21,750,522)    (218)  (309,517)          -          -          -     (309,735)
Conversion of Convertible debt             -      -    6,149,339       61     71,238           -          -          -       71,299
Exercise of stock options and related
   tax benefit                             -      -    2,741,895       28     26,838           -          -          -       26,866
Vesting of restricted stock                -      -            -        -          -           -          -      3,457        3,457
Issuance of common stock related to
   business combinations                   -      -    5,473,513       55    140,880           -          -          -      140,935
Net income                                 -      -            -        -          -     323,831          -          -      323,831
Foreign currency translation               -      -            -        -          -           -        615          -          615
                                           ----------------------------------------------------------------------------------------
Balance, December 31, 1998                 -      -   96,306,323      963    563,728     504,899        520          -    1,070,110
Repurchase of Common Stock, net            -      -     (615,687)      (6)    11,877           -          -          -       11,871
Exercise of stock options and related
   tax benefit                             -      -      352,634        3      6,953           -          -          -        6,956
Net income                                 -      -            -        -          -      97,090          -          -       97,090
Foreign currency translation               -      -            -        -          -           -     (3,512)         -       (3,512)
                                           ----------------------------------------------------------------------------------------
Balance, December 31, 1999                 -      -   96,043,270    $ 960   $582,558    $601,989    $(2,992)   $     -   $1,182,515
                                           ========================================================================================
</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>


Modis Professional Services Inc. and Subsidiaries
Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                    ------------------------------------------
(dollar amounts in thousands except for per share amounts)               1999          1998           1997
--------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>            <C>
Cash flows from operating activities:
   Income from continuing operations                                $   18,597      $  17,691      $   19,492
   Adjustments to income from operations to net cash
    provided by operating activities:
       Restructuring and impairment (recapture)charges                  (2,314)        18,683               -
       Asset write-down related to sale of discontinued operations      25,000              -               -
       Depreciation and amortization                                    13,693         12,209           8,213
       Deferred income taxes                                             9,962         (2,815)            319
       Changes in assets and liabilities
         Accounts receivable                                             1,962        (19,924)        (40,075)
         Prepaid expenses and other assets                                 741         (5,792)          3,712
         Accounts payable and accrued expenses                         (26,880)        14,909           3,515
         Accrued payroll and related taxes                               4,156         (5,451)          4,742
         Other, net                                                        749         (1,775)         (2,623)
                                                                    -----------------------------------------
           Net cash provided by (used in) operating activities          45,666         27,735          (2,705)
                                                                    -----------------------------------------
Cash flows from investing activities:
   Proceeds from sale of net assets of discontinued
     operations, net of costs                                                -        840,937               -
   Advances associated with sale of discontinued operations,
     net of repayments                                                 (19,205)       (15,866)              -
   Income taxes and other cash expenses related to sale of net
     assets of discontinued commercial operations                     (191,409)             -               -
   Purchase of furniture, equipment and leasehold
     improvements, net of disposals                                     (1,709)        (7,674)         (3,188)
   Purchase of businesses, including additional earnouts on
     acquisitions, net of cash acquired                                (39,720)       (38,458)       (135,380)
                                                                    -----------------------------------------
           Net cash (used in) provided by investing activities        (252,043)       778,939        (138,568)
                                                                    -----------------------------------------
Cash flows from financing activities:
   Repurchases of common stock, net of refunds                          11,871       (309,735)              -
   Repurchase of convertible debentures                                      -        (23,581)              -
   Proceeds from stock options exercised                                 3,952         24,235          23,130
   Borrowings on indebtedness, net                                     225,992       (339,628)        329,495
   Other, net                                                                -              -            (100)
                                                                    -----------------------------------------
           Net cash provided by (used in) financing activities         241,815       (648,709)        352,525

                                                                    -----------------------------------------
Effect of exchange rate changes on cash and cash equivalents            (2,057)             -               -

Net increase in cash and cash equivalents
   from continuing operations                                           33,381        157,965         211,252

Net cash used in discontinued operations                              (105,915)       (87,641)       (290,393)

Cash and cash equivalents, beginning of year                            73,410          3,086          82,227
                                                                    -----------------------------------------
Cash and cash equivalents, end of year                              $      876     $   73,410      $    3,086
                                                                    =========================================
</TABLE>


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>




<TABLE>
<CAPTION>
                                                                               Years Ended December 31,
(dollar amounts in thousands except for per share amounts)                 1999           1998           1997
- ----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>            <C>
SUPPLEMENTAL CASH FLOW INFORMATION
   Interest paid                                                      $     5,047    $      1,667   $      8,869
   Income taxes paid                                                      158,857          11,775          7,551

COMPONENTS OF CASH USED IN DISCONTINUED OPERATIONS

   Cash provided by operating activities                                   29,993         142,765         39,249
   Cash used in investing activities                                     (140,468)       (173,351)      (321,657)
   Cash (used in) provided by financing activities                          4,560         (57,055)        (7,985)
                                                                        -----------------------------------------
     Net cash used in discontinued operations                            (105,915)        (87,641)      (290,393)
                                                                        =========================================

NON-CASH INVESTING AND FINANCING ACTIVITIES

During fiscal 1997, the Company completed numerous  acquisitions.  In connection
with the acquisitions, liabilities were assumed as follows:

   Fair value of assets acquired                                                                    $    116,522
   Cash paid                                                                                            (101,162)
                                                                                                    ------------
   Liabilities assumed                                                                              $     15,360
                                                                                                    ============

In fiscal 1997, Covertible Subordinated  Debentures of $1,000 were  converted by
the Company into 727,272 shares of common stock.

During fiscal 1997, in connection with the acquisition of certain companies, the
Company issued 668,870 shares of common stock with a fair value of $8,853.

During fiscal 1998, the Company completed numerous  acquisitions.  In connection
with the acquisitions, liabilities were assumed as follows:

   Fair value of assets acquired                                                                    $     22,529
   Cash paid                                                                                             (17,777)
                                                                                                    ------------
   Liabilities assumed                                                                              $      4,752
                                                                                                    ============

In  fiscal  1998,  Convertible  Subordinated  Debentures  of  $69,800  were
converted  by  the  Company  into  6,149,339  shares  of  common  stock.   Also,
paid-in-capital  was increased by $1,499  relating to unamortized  debt issuance
costs associated with the conversion.

During fiscal 1999, the Company completed numerous  acquisitions.  In connection
with the acquisitions, liabilities were assumed as follows:

   Fair value of assets acquired                                                                    $      3,872
   Cash paid                                                                                              (3,375)
                                                                                                    ------------
   Liabilities assumed                                                                              $        497
                                                                                                    ============









</TABLE>

<PAGE>
1.   DESCRIPTION OF BUSINESS

     Modis  Professional   Services,   Inc.  ('MPS'  or  the  'Company')  is  an
international provider of professional business services,  including consulting,
outsourcing,  training and strategic human resource  solutions,  to Fortune 1000
and other leading businesses.  The Company provides  professional  personnel who
perform specialized services such as accounting, legal, technical / engineering,
scientific, Project Consulting and career management and consulting.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation and Consolidation

     The consolidated  financial  statements include the accounts of the Company
and its wholly owned subsidiaries.  All material intercompany  transactions have
been eliminated in the accompanying consolidated financial statements.

Cash and Cash Equivalents

     Cash and cash equivalents include deposits in banks, government securities,
money market funds, and short-term  investments with maturities,  when acquired,
of 90 days or less.

Furniture, Equipment, and Leasehold Improvements

     Furniture,  equipment, and leasehold improvements are recorded at cost less
accumulated  depreciation.  Depreciation  of furniture and equipment is computed
using the  straight-line  method over the estimated  useful lives of the assets,
ranging from 5 to 15 years.  Amortization of leasehold  improvements is computed
using the straight-line  method over the useful life of the asset or the term of
the lease, whichever is shorter. Total depreciation and amortization expense was
$4.6,  $4.1  and  $2.3  for  1999,  1998  and  1997,  respectively.  Accumulated
depreciation of furniture,  equipment and leasehold  improvements as of December
31, 1999 and 1998 was $18,312 and $18,258, respectively.

Goodwill

     The  Company  has  allocated  the  purchase  price  of  acquired  companies
according to the fair market value of the assets acquired.  Goodwill  represents
the excess of the cost over the fair value of the net tangible  assets  acquired
through these  acquisitions,  including any  contingent  consideration  paid (as
discussed  in Note 4 to the  Consolidated  Financial  Statements),  and is being
amortized on a  straight-line  basis over  periods  ranging from 15 to 40 years,
with an  average  amortization  period of 32.3  years.  Management  periodically
reviews the potential  impairment of goodwill on an undiscounted cash flow basis
to assess recoverability. If the estimated future cash flows are projected to be
less than the  carrying  amount,  an  impairment  write-down  (representing  the
carrying  amount of the goodwill that exceeds the  undiscounted  expected future
cash flows) would be recorded as a period expense.  Accumulated amortization was
$26,200 and $17,063 as of December 31, 1999 and 1998, respectively.  See Note 13
for a discussion of goodwill impairment charge.
<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                  -------------------------------------
                                                                                     1999                         1998
------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                          <C>
Beginning Balance of Goodwill, net                                              $   279,103                  $   235,560
                                                                                  ---------                    ---------
  Goodwill recorded for companies purchased in current year                           3,275                       18,125
  Goodwill recorded for earn-out payments made, but not accrued at prior
     year-end                                                                        10,098                       16,363
  Goodwill accrued, but not paid, for determinable earn-outs                         34,600                       27,111
  Amortization                                                                       (9,137)                      (8,120)
  Impairment charge                                                                       -                       (9,936)
                                                                                  ---------                    ---------
     Net Increase in Balance of Goodwill                                             38,836                       43,543
                                                                                  ---------                    ---------
Ending Balance of Goodwill, net                                                 $   317,939                  $   279,103
                                                                                  =========                    =========
</TABLE>


Revenue Recognition

     The Company  recognizes as revenue,  at the time the professional  services
are provided,  the amounts billed to clients.  In all such cases, the consultant
is the  Company's  employee  and all  costs  of  employing  the  worker  are the
responsibility of the Company and are included in the cost of services.

Foreign Operations

     The financial  position and  operating  results of foreign  operations  are
consolidated using the local currency as the functional currency. Local currency
assets and liabilities are translated at the rate of exchange to the U.S. dollar
on the balance  sheet date,  and the local  currency  revenues  and expenses are
translated  at average  rates of exchange to the U.S.  dollar during the period.
See Note 15 for a discussion  of foreign  currency  translation  adjustments  in
total comprehensive income.

Stock Based Compensation

     The Company measures  compensation  expense for employee and director stock
options as the aggregate  difference  between the market and exercise  prices of
the  options on the date that both the number of shares the  grantee is entitled
to receive and the purchase  price are known.  Compensation  expense  associated
with  restricted  stock grants is equal to the market value of the shares on the
date of grant and is recorded pro rata over the  required  holding  period.  Pro
forma  information  relating to the fair value of  stock-based  compensation  is
presented in Note 10 to the consolidated financial statements.


Income Taxes

     The  provision for income taxes is based on income before taxes as reported
in the accompanying  Consolidated  Statements of Income. Deferred tax assets and
liabilities  are recognized for the expected  future tax  consequences of events
that have been included in the financial  statements or tax returns.  Under this
method,  deferred  tax  liabilities  and  assets  are  determined  based  on the
differences  between the financial  statement carrying amounts and the tax basis
of assets  and  liabilities  using  enacted  tax rates in effect for the year in
which the  differences  are  expected to reverse.  An  assessment  is made as to
whether or not a valuation  allowance is required to offset deferred tax assets.
This assessment includes anticipating future income.

Net Income Per Common Share

     The  financial   statements   include   'basic'  and  'diluted'  per  share
information. Basic per share information is calculated by dividing net income by
the weighted average number of shares outstanding. Diluted per share information
is calculated by also  considering the impact of potential  common stock on both
net income and the weighted  average number of shares outstanding.  The weighted
average number of shares used in the basic earnings per share  computations were
96.3 million,  108.5 million,  and 101.9 million in fiscal 1999,  1998 and 1997,
respectively.  The only  difference  in the  computation  of basic  and  diluted
earnings  per share is the  inclusion  of 0.8  million,  8.4  million,  and 11.2
million potential common shares in fiscal 1999, 1998 and 1997, respectively. The
Company's  potential  common  stock  consists of  employee  and  director  stock
options, and the as-if converted effect of convertible debentures.

Pervasiveness of Estimates

   The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amount  of  assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenue  and  expenses  during the  reporting  period.
Although  management  believes  these  estimates and  assumptions  are adequate,
actual results may differ from the estimates and assumptions used.

Reclassifications

     Certain  amounts have been  reclassified in 1997 and 1998 to conform to the
1999 presentation.

Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and for Hedging Activities." SFAS No. 133 establishes accounting and
reporting  standards  requiring that every derivative  instrument be recorded on
the balance sheet as either an asset or liability  measured at fair value.  SFAS
No. 133  requires  that  changes  in a  derivative's  fair  value be  recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related  results on the hedged item in the income  statement and requires
that a company  formally  document,  designate and assess the  effectiveness  of
transactions  that  receive  hedge  accounting.  In  June  1999,  the  Financial
Accounting  Standards  Board  issued SFAS No. 137, an amendment to SFAS No. 133,
deferring the effective  date of SFAS No. 133. SFAS No. 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000, and cannot be
applied  retroactively.  The  Company  has not yet  quantified  the  impacts  of
adopting SFAS No. 133;  however,  SFAS No. 133 could  increase the volatility of
reported earnings and other comprehensive income once adopted.

3.  DISCONTINUED OPERATIONS


     Effective  September  27, 1998 and March 30,  1998,  the  Company  sold its
Commercial  operations and Teleservices  division and the operations and certain
assets of its Health  Care  division,  respectively,  (jointly  the  "Commercial
Businesses").  During 1999, the Company's Board of Directors  approved a plan in
which the Company would  spin-off its  Information  Technology  operations  ("IT
Business") to its shareholders in the form of a stock dividend during 2000. This
distribution  is subject to a favorable  private letter ruling from the Internal
Revenue  Service.  As a  result,  the  Commercial  and IT  Businesses  have been
reported as a discontinued  operation and the consolidated  financial statements
have been  reclassified to segregate the net assets and operating results of the
Commercial  and  IT  Businesses.  The  Commercial  operations  and  Teleservices
division were sold with a final  adjusted  purchase  price of $826.2  million in
cash to Randstad U.S., L.P. ('Randstad'),  the U.S. operating company of Ranstad
Holding nv, an  international  staffing  company based in the  Netherlands.  The
after-tax gain on the sale was $230.6 million. The operations and certain assets
of the  Health  Care  division  were  sold for  consideration  of $8.0  million,
consisting  of $3.0  million in cash and $5.0 million in a note  receivable  due
March 30, 2000 bearing interest at 2% in excess of the prime rate. The after-tax
gain on the sale was $0.1 million.

     The sale of the  Commercial  Businesses  and the announced  spin-off of the
Company's IT  Businesses,  represents  the  disposal  and planned  disposal of a
segment of the Company's business. Accordingly, the financial statements for the
years ended December 31, 1999, 1998 and 1997 have been  reclassified to separate
the revenues, costs and expenses, assets and liabilities,  and cash flows of the
Commercial and IT Businesses. The net operating results of the Commercial and IT
Businesses have been reported,  net of applicable  income taxes, as 'Income from
Discontinued  Operations'.  The net assets of the  Commercial  and IT Businesses
have been reported as 'Net Assets of Discontinued Operations';  and the net cash
flows of the Commercial  and IT Businesses  have been reported as 'Net Cash Used
In Discontinued Operations'.

    Summarized  financial  information for the  discontinued  Commercial and IT
operations follows (in thousands):
<TABLE>
<CAPTION>
                                                                       Years ended December 31,
                                                                1999              1998              1997
 <CAPTION>
<S>                                                        <C>               <C>               <C>
  Discontinued Commercial businesses:
      Revenue                                              $           -     $     919,400     $   1,260,702
      Cost of revenue                                                  -           708,930           975,489
      Operating expense                                                -           156,180           215,437
           Operating income                                            -            54,290            69,776
      Interest, net                                                    -             4,200             4,374
      Provision for income taxes                                       -            20,070            26,739
           Income from discontinued commercial businesses              -            30,020            38,663

  Discontinued IT businesses:
      Revenue                                              $   1,349,194     $   1,164,140     $     780,634
      Cost of Revenue                                          1,018,439           862,324           571,464
      Operating Expense                                          222,247           202,305           131,068
           Operating Income                                      108,508            99,511            78,102
      Interest, net                                                5,878            14,572             6,608
      Provision for income taxes                                  39,092            33,770            27,616
           Income from discontinued IT businesses                 63,538            51,169            43,878
</TABLE>
<PAGE>

     Results of the discontinued  Commercial  Business include the allocation of
certain net common  expenses  for  corporate  support and back office  functions
totaling  approximately  $15.2 million,  $8.0 million,  and $6.4 million for the
years ended December 31, 1999, 1998 and 1997,  respectively.  Corporate  support
and back office allocations are based on the ratio of the Company's consolidated
revenues to that of the discontinued Commercial and IT Businesses. Additionally,
the results of  discontinued  operations  include  allocations  of  consolidated
interest  expense  totaling  $5.9  million,  $18.8 million and $11.0 million for
fiscal 1999,1998 and 1997, respectively.  Interest expense is allocated based on
the historic  funding needs of the  discontinued  operations,  using a rate that
approximates  the weighted average interest rate outstanding for the Company for
each fiscal year  presented.  Historic  funding needs include:  the purchases of
property, plant and equipment,  acquisitions, current income tax liabilities and
fluctuating working capital needs. The net assets of the Company's  discontinued
operations are as follows (in thousands):

 <TABLE>
<CAPTION>

                                                              December 31,         December 31,
                                                                  1999                 1998
<S>                                                         <C>                    <C>
     Receivables                                             $   241,864            $   231,591
     Other current assets                                         21,604                 50,962
          Total current assets                                   263,468                282,553

     Furniture, equipment and leasehold improvements, net         31,065                 21,085
     Goodwill, net                                               814,647                746,137
     Other assets                                                 10,368                  7,495
          Total assets                                         1,119,548              1,057,270

     Current liabilities                                          80,354                190,044
     Non-current liabilities                                      25,710                 22,669
          Total liabilities                                      106,064                212,713
                                                            ----------------        ----------------
             Total net assets of discontinued operations      $1,013,484            $   844,557
                                                            ================        ================

</TABLE>

4.  ACQUISITIONS

For the year ended December 31, 1999

     During fiscal 1999, the Company  acquired  Brenda  Pejovich and Associates,
Inc.,  which was  accounted  for under the purchase  method of  accounting.  The
aggregate  purchase price totalled $3.8 million which  consisted of $3.4 million
in cash and $0.4  million  in a note  payable  to the  former  shareholder.  The
Company has  allocated the purchase  price  according to the market value of the
assets  acquired.  The excess of the  purchase  price over the fair value of the
tangible  assets  (goodwill) is being  amortized on a straight line basis over a
period of 40 years, including any contingent consideration paid.

For the year ended December 31, 1998

     The Company acquired the following  companies which have been accounted for
under the purchase  method of accounting:  Millard  Consulting  Services,  Inc.,
Diversified Consulting, Inc., Colvin Resources, Inc., and Accountants Express of
San Diego, Inc. The aggregate purchase price of these  acquisitions  during 1998
was $19.7 million,  comprised of $17.8 million in cash and $1.9 million in notes
payable to the former shareholders. The Company has allocated the purchase price
according to the market value of the assets acquired. The excess of the purchase
price over the fair value of the tangible  assets  (goodwill) is being amortized
on a straight  line basis over a period of 40 years,  including  any  contingent
consideration paid.

For the year ended December December 31, 1997

     The Company acquired the following  companies which have been accounted for
under the purchase method of accounting:  Manchester,  Inc.,  Legal  Information
Technology, Inc., AMPL d/b/a Parker & Lynch, Accounting Principals, Inc., AMICUS
staffing, Inc., Keystone Consulting Group, Inc., and Badenoch and Clark Ltd. The
aggregate purchase price of these  acquisitions  during 1998 was $112.3 million,
comprised  of $101.2  million in cash,  $7.9  million in notes  payable and $8.4
million in the Company's  common stock.  shareholders  The Company has allocated
the purchase  price  according to the market value of the assets  acquired.  The
excess  of the  purchase  price  over the  fair  value  of the  tangible  assets
(goodwill)  is being  amortized  on a  straight  line  basis over a period of 40
years, including any contingent consideration paid.

Earn-out payments

     The Company is  obligated  under  various  acquisition  agreements  to make
earn-out  payments to former  stockholders of some the  aforementioned  acquired
companies accounted for under the purchase method of accounting, over periods up
to two years,  upon  attainment  of  certain  earnings  targets of the  acquired
companies.  The  agreements  do  not  specify  a  fixed  payment  of  contingent
consideration  to be issued;  however,  the  Company  has  limited  its  maximum
exposure under some earn-out agreements to a cap which is negotiated at the time
of acquisition.

     The Company  records  these  payments as goodwill in  accordance  with EITF
95-8,  'Accounting for Contingent  Consideration  Paid to the Shareholders of an
Acquired   Enterprise  in  a  Purchase   Business   Combination',   rather  than
compensation  expense.  Earn-outs are utilized by the Company to supplement  the
partial  consideration  initially  paid  to the  stockholders  of  the  acquired
companies,  if certain earnings  targets are achieved.  All earnout payments are
tied to the  ownership  interests  of the selling  stockholders  of the acquired
companies  rather than being  contingent  upon any further  employment  with the
Company.  Any former  owners who remain as  employees  of the Company  receive a
compensation  package which is  comparable to other  employees of the Company at
the same level of responsibility.

     The Company has accrued contingent payments related to earn-out obligations
in Accounts  payable and Accrued  expenses of $34.6 million and $27.1 million as
of December 31, 1999 and 1998,  respectively.  These accrued contingent payments
represent  the  liabilities  related  to  earn-out  payments  that  are  readily
determinable,  as a  result  of  resolved  and  issuable  earn-outs,  as of  the
respective fiscal year ends. The Company applies the relevant profits related to
the earn-out  period to the earn-out  formula,  and determines  the  appropriate
amount  to  accrue.  The  Company  anticipates  that the cash  generated  by the
operations  of the acquired  companies  will provide a  substantial  part of the
capital required to fund these payments.

<PAGE>
5.  NOTES PAYABLE
Notes payable at December 31, 1999 and 1998 consisted of the following:

<TABLE>
<CAPTION>
                                                                                                Fiscal
                                                                                     ---------------------------
                                                                                          1999            1998
- --------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>
Credit facilities                                                                    $   228,000    $          -
Notes payable to former shareholders of acquired companies (interest
   ranging from 4.33% to 5.50% due through August 2000)                                    2,239           3,872
                                                                                     ---------------------------
                                                                                         230,239           3,872
Current portion of notes payable                                                           2,239           1,884
                                                                                     ---------------------------
Long-term portion of notes payable                                                   $   228,000    $      1,988
                                                                                     ===========================
</TABLE>

     On October 30, 1998, the Company entered into a new $500 million  revolving
credit  facility  which is  syndicated  to a group of 13 banks with  NationsBank
(Bank of  America),  as the  principal  agent.  This  facility is comprised of a
$350.0 million  facility which expires on October 21, 2003 and a $150.0 million,
364 day facility.  On October 27, 1999, the 364 day,  $150.0 million  portion of
the original credit facility was replaced by a new $150.0 million 364 day credit
facility. Pursuant to the 364 day credit facility, the Company has the option to
term  out the 364 day  component  of the  credit  facility  for up to one  year.
Outstanding  amounts  under the  credit  facilities  bear  interest  at  certain
floating  rates as  specified  by the  applicable  credit  facility.  The credit
facilities contain certain financial and non-financial covenants relating to the
Company's operations,  including maintaining certain financial ratios. Repayment
of the credit  facilities  are  guaranteed by the material  subsidiaries  of the
Company.  In addition,  approval is required by the majority of the lenders when
the cash consideration of an individual  acquisition exceeds 10% of consolidated
stockholders' equity of the Company. The Company incurred certain costs directly
related to securing the credit facilities in the amount of approximately  $1,245
These costs have been  capitalized  and are being amortized over the life of the
credit facilities.

     During the  fourth  quarter  of fiscal  1998,  the  Company  recognized  an
extraordinary  after-tax  charge of $5.61  million as a result of the  Company's
early  retirement of $16.45 million of 7% Convertible  Senior Notes Due 2002 and
the termination of the Company's existing credit facility immediately subsequent
to the sale of the Company's Commercial operations and Teleservices division.

     The Company paid a premium of $7.13 million on the early  extinguishment of
the 7% Senior  Convertible  Senior Notes and wrote off $0.37  million of related
unamortized  debt  issuance  costs.  Additionally,  the Company  wrote off $1.63
million of unamortized  debt financing  costs related to the  termination of the
credit facility.
<PAGE>
     Maturities of notes payable are as follows for the fiscal years  subsequent
to December 31, 1999:

<TABLE>
<CAPTION>

Fiscal year
- ------------------------------------
<S>                         <C>
2000                        $  2,239
2003                         228,000
                            --------
                            $230,239
                            ========
</TABLE>


6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Components of accounts  payable and accrued expenses as of December 31, 1999 and
1998 are as follows:
<TABLE>
<CAPTION>
                                                                    Fiscal
                                                         ----------------------------
                                                           1999                1998
                                                         --------           ---------
<S>                                                      <C>                 <C>
Trade accounts payable                                   $ 14,829           $ 33,854
Accrued earn-out payments                                  34,600             27,111
Restructuring charge                                        1,000              8,747
Due to to purchaser of
   discontinued commercial operations (1)                       -             20,250
                                                         --------            --------
Total                                                      50,429             89,962
                                                         ========            ========
<FN>

(1) The amount due to purchaser of discontinued commercial operations represents
a true up of the purchase price pursuant to the sales  agreement and was paid in
the first quarter of fiscal 1999.
</FN>

</TABLE>

<PAGE>
7.  COMMITMENTS AND CONTINGENCIES:

Leases

   The Company leases office space under various noncancelable operating leases.
The  following  is a schedule of future  minimum  lease  payments  with terms in
excess of one year:

<TABLE>
<CAPTION>

Fiscal Year
-------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>
2000                                                                                           $  8,501
2001                                                                                              7,296
2002                                                                                              6,241
2003                                                                                              4,752
2004                                                                                              2,801
Thereafter                                                                                        4,942
                                                                                               --------
                                                                                               $ 34,533
                                                                                               ========
</TABLE>

     Total rent expense for  fiscal 1999, 1998 and 1997 was $11,241, $5,165, and
$3,552, respectively.

Litigation

     The  Company is a party to a number of lawsuits  and claims  arising out of
the ordinary conduct of its business. In the opinion of management, based on the
advice of in-house and external legal  counsel,  the lawsuits and claims pending
are not likely to have a material  adverse effect on the Company,  its financial
position, its results of operations, or its cash flows.

     In addition,  the Company is subject to claims for indemnification  arising
from the sales of its Commercial  operations and  Teleservices  division and its
Health Care division in fiscal 1998.  For the years ended  December 31, 1999 and
1998, the Company did not pay any indemnification  claims.  Although the Company
has received  certain claims for  indemnification  or notices of possible claims
pursuant to such  obligations,  the  Compnay  believes  that it has  meritorious
defenses  against  such  claims  and does  not  believe  that  such  claims,  if
successful,  would have a material  adverse  effect on the Company's cash flows,
financial condition or results of operations.

<PAGE>
8.   INCOME TAXES:

     A comparative  analysis of the  provision for income taxes from  continuing
operations is as follows:

<TABLE>
<CAPTION>
                                           Fiscal
                          ------------------------------------
                              1999         1998         1997
- ------------------------------------------------------------
<S>                       <C>        <C>            <C>
Current:
   Federal                $  (3,636) $   14,318     $   9,054
   State                       (381)      1,850         1,097
   Foreign                    5,246       1,203           716
                          ------------------------------------
                              1,229      17,371        10,867
                          ------------------------------------
Deferred:
   Federal:                   8,208      (3,318)          (32)
   State:                       786        (321)           (4)
   Foreign:                     968         824           355
                          ------------------------------------
                              9,962      (2,815)          319
                          ------------------------------------
                          $  11,191  $   14,556     $  11,186
                          ====================================
</TABLE>


     The  difference  between  the  actual  income  tax  provision  and  the tax
provision  computed by applying the statutory  federal income tax rate to income
from continuing  operations before provision for income taxes is attributable to
the following:

<TABLE>
<CAPTION>
                                                                                Fiscal
                                                         --------------------------------------------------------------
                                                           1999                 1998                  1997
                                                         --------------------------------------------------------------
                                                          AMOUNT   PERCENTAGE  AMOUNT   PERCENTAGE  AMOUNT  PERCENTAGE
- -----------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>     <C>           <C>    <C>          <C>
Tax computed using the federal statutory rate             $   10,426    35.0%   $  11,286     35.0%  $ 10,737     35.0%
State income taxes, net of federal income tax effect             405     1.4          994      3.1        710      2.3
Non-deductible goodwill                                          179     0.6          228      0.7        169      0.6
Non-deductible goodwill impairment charge                          -       -        3,825     11.8          -        -
Other permanent differences                                      181     0.6       (1,777)    (5.5)      (430)    (1.4)
                                                         --------------------------------------------------------------
                                                          $   11,191    37.6%   $  14,556     45.1%  $ 11,186     36.5%
                                                         ==============================================================
</TABLE>


<PAGE>


   The  components  of the deferred tax assets and  liabilities  recorded in the
accompanying consolidated balance sheets are as follows:

<TABLE>
<CAPTION>
                                                                                                 Fiscal
                                                                                     ---------------------------
                                                                                          1999            1998
- ----------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>
Gross deferred tax assets:
   Self-insurance reserves                                                           $   1,120     $      1,260
   Restructuring and impairment charge                                                     380            3,324
   Allowance for doubtful accounts receivable                                            1,616            1,560
   Other                                                                                   308            1,037
                                                                                     ---------------------------
      Total gross deferred tax assets                                                    3,424            7,181
                                                                                     ---------------------------
Gross deferred tax liabilities:
   Amortization of goodwill                                                            (10,733)          (4,631)
   Other                                                                                  (208)            (105)
                                                                                     ---------------------------
      Total gross deferred tax liabilities                                             (10,941)          (4,736)
                                                                                     ---------------------------
      Net deferred tax (liability) asset                                             $  (7,517)    $      2,445
                                                                                     ===========================
</TABLE>




   Management has determined, based on the history of prior taxable earnings and
its  expectations  for the future,  taxable  income will more likely than not be
sufficient  to fully  realize  deferred  tax assets  and,  accordingly,  has not
reduced deferred tax assets by a valuation allowance.



9.  EMPLOYEE BENEFIT PLANS:

Profit Sharing Plans

     The Company  has a qualified  contributory  profit  sharing  plan (a 401(k)
plan) which covers all full-time employees over age twenty-one with over 90 days
of  employment  and 375 hours of service.  The  Company  made  contributions  of
approximately $1,625 and $1,818, net of forfeitures,  to the profit sharing plan
for fiscal 1999 and 1998,  respectively.  No matching contributions were made by
the Company to the profit  sharing plan in fiscal  1997.  The Company also has a
non-qualified  deferred compensation plan for its highly compensated  employees.
The non-qualified  deferred compensation plan does not provide for any matching,
either discretionary or formula-based, by the Company.

     The Company has assumed  many 401(k) plans of acquired  subsidiaries.  From
time to time, the Company merges these plans into the Company's plan.  Effective
January 1, 1998, a  significant  number of the profit  sharing plans were merged
and amended to become contributory  plans.  Pursuant to the terms of the various
profit sharing plans, the Company will match 50% of employee contributions up to
the first 5% of total eligible compensation,  as defined.  Company contributions
relating to these merged plans are included in the aforementioned total.

     Prior to the Company's sale of its Commercial  operations and  Teleservices
division  in fiscal 1998 (see Note 3), the  Company  had two 401(k)  plans:  the
aforementioned plan covering employees of the Professional Services division and
employees of the discontinued  Information  Technology  division,  and the other
covering  non-highly  compensated  (as  defined  by IRS  regulations)  full time
commercial  employees over age  twenty-one  with at least one year of employment
and 1,000 hours of service (the 'commercial  plan'). In connection with the sale
of the  Commercial  operations  and  Teleservices  division in fiscal 1998,  the
Company  transferred  sponsorship of the commercial  plan to Randstad U.S., L.P.
The effective date of the transfer was September 27, 1998. Company contributions
relating to the  commercial  plan prior to the Company's  sale of its commercial
businesses are included in Income from Discontinued Operations,  as disclosed in
Note 3 to the Consolidated Financial Statements.


10.  STOCKHOLDERS' EQUITY

Stock Repurchase Plan

     On October 31,  1998,  the  Company's  Board of  Directors  authorized  the
repurchase of up to $200.0  million of the Company's  common stock pursuant to a
share buyback  program.  On December 4, 1998,  the Company's  Board of Directors
increased the authorized  repurchase by an additional  $110.0 million,  bringing
the total  authorized  share buyback  program  amount to $310.0  million.  As of
December 31, 1998, the Company had repurchased  approximately  21,751,000 shares
under the share  buyback  program.  Included  in the  shares  repurchased  as of
December  31, 1998 were  approximately  6,150,000  shares  repurchased  under an
accelerated stock acquisition plan ("ASAP").  The Company entered into the ASAP
with a  certain  investment  bank who  agreed  to sell the  Company  shares at a
certain cost. The  investment  bank borrowed these shares from its customers and
was required to enter into market transactions, subject to Company approval, and
purchase  shares  to return  to its  customers.  The  Company,  pursuant  to the
agreement,  agreed to compensate  the  investment  bank for any increases in the
Company's  stock price that would cause the investment  bank to pay an amount to
purchase  the stock over the ASAP  price.  Conversely,  the  Company  received a
refund in the purchase  price if the  Company's  stock price fell below the ASAP
price.  Subsequent to December 31, 1998, the Company used refunded proceeds from
the ASAP to complete  the program  during  January and February  1999,  with the
repurchase  of   approximately   616,000  shares,   bringing  the  total  shares
repurchased under the program to approximately  22,367,000  shares. All of these
shares were retired upon purchase.

     On  November 4, 1999,  the  Company's  Board of  Directors  authorized  the
repurchase of up to $65.0 million of the Company's  common stock. As of December
31, 1999, no shares have been repurchased under this authorization.


Incentive Employee Stock Plans

   Effective  December 19, 1993, the Board of Directors  approved the 1993 Stock
Option Plan (the 1993 Plan) which  provides  for the granting of options for the
purchase  of up to an  aggregate  of  2,400,000  shares of  common  stock to key
employees.

     Under the 1993 Plan,  the Stock Option  Committee  (the  Committee)  of the
Board of Directors has the discretion to award stock options, stock appreciation
rights  (SARS) or  restricted  stock  options or  non-qualified  options and the
option price shall be established by the Committee.  Incentive stock options may
be granted at an exercise price not less than 100% of the fair market value of a
share on the  effective  date of the  grant  and  non-qualified  options  may be
granted at an  exercise  price not less than 50% of the fair  market  value of a
share  on the  effective  date  of the  grant.  The  Committee  has  not  issued
non-qualified  options at an  exercise  price less than 100% of the fair  market
value  and,   therefore,   the  Company  has  not  been  required  to  recognize
compensation expense for its stock option plans.

     On August 24, 1995,  the Board of Directors  approved the 1995 Stock Option
Plan (the 1995  Plan)  which  provided  for the  granting  of  options  up to an
aggregate of 3,000,000  shares of common stock to key employees  under terms and
provisions  similar to the 1993 Plan. During fiscal 1998 and 1997, the 1995 Plan
was amended to provide for the granting of an additional 8,000,000 and 3,000,000
shares,  respectively.  During  fiscal 1998,  the 1995 Plan was also amended to,
among other things, require the exercise price of non-qualified stock options to
not be less  than  100% of the fair  market  value of the  stock on the date the
option is granted,  to limit the persons  eligible to participate in the plan to
employees,  to eliminate  the  Company's  ability to issue SARS and to amend the
definition  of a director to comply with Rule 16b-3 of the  Securities  Exchange
Act of 1934, as amended and with Section 162(m) of the Internal  Revenue Code of
1986, as amended. There were no amendments to the 1995 Plan in fiscal 1999.

     The Company  assumed the stock  option  plans of its  subsidiaries,  Career
Horizons,  Inc., Actium, Inc. and Consulting Partners, Inc., upon acquisition in
accordance with terms of the respective  merger  agreements.  At the date of the
respective acquisitions, the assumed plans had 2,566,252 options outstanding. As
of December 31, 1999 and 1998, the assumed plans had 198,263 and 340,719 options
outstanding, respectively.

Non-Employee Director Stock Plan

     Effective December 29, 1993, the Board of Directors of the Company approved
a stock option plan (Director Plan) for non-employee directors,  whereby 600,000
shares  of  common  stock  have  been  reserved  for  issuance  to  non-employee
directors.  The  Director  Plan  allows each  non-employee  director to purchase
60,000 shares at an exercise price equal to the fair market value at the date of
the grant upon election to the Board. In addition, each non-employee director is
granted  20,000  options upon the  anniversary  date of the  director's  initial
election date. The options become  exercisable  ratably over a five-year  period
and  expire  ten years  from the date of the grant.  However,  the  options  are
exercisable  for a maximum of three  years after the  individual  ceases to be a
director  and if the  director  ceases  to be a  director  within  one  year  of
appointment the options are canceled. During 1997, the Director plan was amended
to increase the number of shares available under the plan to 1.6 million shares.
In fiscal 1999, 1998 and 1997 , the Company granted 60,000,  240,000 and 120,000
options,  respectively,  at an  average  exercise  price of  $13.63,  $21.56 and
$28.35, respectively.


<PAGE>

     The following  table  summarizes  the  Company's  Stock Option Plans (which
includes options held by Information Technology employees):
<TABLE>
<CAPTION>
                                                                                                         Weighted
                                                                                       Range of          Average
                                                                         Shares     Exercise Prices   Exercise Price
---------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>          <C>                  <C>

Balance, December 31, 1996                                             10,568,361   $ 0.69 - $33.75      $  13.67
   Granted                                                              2,452,176   $16.13 - $31.38      $  18.92
   Exercised                                                           (3,069,143)  $ 0.69 - $32.00      $   7.02
   Canceled                                                               (43,273)  $11.80 - $24.92      $  23.18
                                                                       ----------------------------------------------
Balance, December 31, 1997                                              9,908,121   $ 0.83 - $33.75      $  16.76
   Granted                                                              8,560,721   $ 4.80 - $35.13      $  16.00
   Exercised                                                           (2,741,895)  $ 0.83 - $28.50      $  13.57
   Canceled                                                            (4,522,954)  $ 1.25 - $35.13      $  20.22
                                                                       ----------------------------------------------
Balance, December 31, 1998                                             11,203,993   $ 0.83 - $33.38      $  15.38
   Granted                                                              6,317,285   $ 8.13 - $16.69      $  12.92
   Exercised                                                             (352,634)  $ 0.83 - $14.44      $   7.11
   Canceled                                                            (2,115,956)  $ 4.24 - $26.13      $  16.63
                                                                       ----------------------------------------------
BALANCE, DECEMBER 31, 1999                                             15,052,688   $ 1.25 - $33.38      $  14.32
                                                                       ==============================================
</TABLE>

     Effective  December 15, 1998, the Company's  Board of Directors  approved a
stock option repricing program whereby  substantially all holders of outstanding
options who were active  employees (except certain officers and  directors) with
exercise prices above $14.44 per share were amended so as to change the exercise
price to $14.44 per share,  the fair market value on the effective date. A total
of 3,165,133  shares,  with exercise prices ranging from $16.13 to $35.13,  were
amended under this program,  all in fiscal 1998. All other terms of such options
remained unchanged.


     The following table summarizes  information about stock options outstanding
at December  31,  1999(which  includes  options held by  Information  Technology
employees):

<TABLE>
<CAPTION>
                                                         Outstanding                          Exercisable
                                           ------------------------------------------- -----------------------------
                                                                        Average                        Average
                                                          Average       Exercise                       Exercise
                                            Shares        life (a)        Price          Shares         Price
--------------------------------------------------------------------------------------------------------------------
<S>                                        <C>            <C>           <C>            <C>           <C>
$  1.25 - $ 11.13                           3,410,755     8.36          $  9.39        1,124,148     $  7.25
$ 11.25 - $ 13.67                           3,018,536     9.13            12.82          284,107       12.94
$ 13.81 - $ 14.50                           4,342,064     6.88            14.41        2,815,584       14.45
$ 14.56 - $ 22.38                           3,345,333     8.45            17.13        1,816,669       16.12
$ 22.88 - $ 33.38                             936,000     6.06            26.50          798,001       26.71
                                           -------------------------------------------------------------------------
Total                                      15,052,688     7.97          $ 14.32        6,838,509     $ 15.10
                                           =========================================================================
</TABLE>

(a) Average contractual life remaining in years.

     At year-end  1998,  options with an average  exercise  price of $15.49 were
exercisable on 4.2 million  shares;  at year-end  1997,  options with an average
exercise price of $15.16 were exercisable on 5.1 million shares.

     If the  Company  had  elected to  recognize  compensation  cost for options
granted in 1999 and 1998,  based on the fair value of the options granted at the
grant date, net income and earnings per share would have been reduced to the pro
forma amounts indicated below.

<PAGE>
<TABLE>
<CAPTION>
                                                                                          1999             1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>
Net Income
   As reported                                                                       $     97,090   $    323,831
   Pro forma                                                                         $     80,937   $    312,029
Basic net income per common share
   As reported                                                                       $       1.01   $       2.98
   Pro forma                                                                         $       0.84   $       2.88
Diluted net income per common share
   As reported                                                                       $       1.00   $       2.79
   Pro forma                                                                         $       0.83   $       2.69

</TABLE>

     The weighted  average fair values of options  granted  during 1999 and 1998
were $5.29 and $5.20 per  share,  respectively.  The fair  value of each  option
grant is estimated on the date of grant using the Black  Scholes  option-pricing
model with the following assumptions:

<TABLE>
<CAPTION>
                                                                                              Fiscal
                                                                                        1999           1998
-------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>            <C>
Expected dividend yield                                                                    -              -
Expected stock price volatility                                                           .34           .35
Risk-free interest rate                                                                  6.14          5.57
Expected life of options (years)                                                         5.64          3.50

</TABLE>

     During Fiscal 1996,  under the 1995 Plan, the Company's  Board of Directors
issued a restricted stock grant of 345,000 shares to the Company's President and
Chief  Executive  Officer,  which was scheduled to vest over a five year period.
The Company recorded $4,892 in deferred compensation expense which was amortized
on a straight line basis over the vesting period of the grant. In December 1998,
the Company's Board of Directors removed the vesting restrictions,  thus vesting
the unamortized portion of the grant in the amount of $2,686.

<PAGE>


11.  NET INCOME PER COMMON SHARE

     The calculation of basic net income per common share and diluted net income
per common share from continuing and discontinued operations is presented below:

<TABLE>
<CAPTION>
                                                                            1999           1998            1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>            <C>
Basic net income per common share computation:
   Net Income available to common shareholders from
      continuing operations                                           $     18,597   $     17,691   $     19,492
                                                                      ------------------------------------------
   Net Income available to common shareholders from
      discontinued operations                                         $     63,538   $     81,189   $     82,541
                                                                      ------------------------------------------
   Gain on sale of discontinued operations, net of income
      taxes                                                           $     14,955   $    230,561   $          -
                                                                      ------------------------------------------
   Extraordinary item of loss on early extinguishment of
      debt, net of income benefit                                     $          -   $     (5,610)  $          -
                                                                      ------------------------------------------
Basic average common shares outstanding                                     96,268        108,518        101,914
                                                                      ------------------------------------------
   Basic income per common share from continuing
      operations                                                      $       0.19   $       0.16   $       0.19
                                                                      ==========================================
   Basic income per common share from discontinued
      operations                                                      $       0.66   $       0.75   $       0.81
                                                                      ==========================================
   Basic income per common share from gain on sale of
      discontinued operations                                         $       0.16   $       2.12   $          -
                                                                      ==========================================
   Basic income per common share from extraordinary item              $          -   $      (0.05)  $          -
                                                                      ==========================================
   Basic net income per common share                                  $       1.01   $       2.98   $       1.00
                                                                      ==========================================
Diluted net income per common share computation:
   Income available to common shareholders from continuing
      operations                                                      $     18,597   $     17,691   $     19,492
   Interest paid on convertible debt, net of tax benefit (1)                     -          2,784          3,712
   Income available to common shareholders and assumed                ------------------------------------------
   conversions from continuing operations                             $     18,597   $     20,475   $     23,204
Income available to common shareholders from                          ------------------------------------------
      discontinued operations                                         $     63,538   $     81,189   $     82,541
                                                                      ------------------------------------------
   Average common shares outstanding                                        96,268        108,518        101,914
   Incremental shares from assumed conversions:
      Convertible debt (1)                                                       -          5,699          7,599
      Stock options                                                            842          2,665          3,596
                                                                      ------------------------------------------
   Diluted average common shares outstanding                                97,110        116,882        113,109
                                                                      ------------------------------------------
   Diluted income per common share from continuing
      operations                                                      $       0.19   $       0.18   $       0.21
                                                                      ==========================================
   Diluted income per common share from discontinued
      operations                                                      $       0.66   $       0.69   $       0.72
                                                                      ==========================================
   Diluted income per common share from gain on sale of
      discontinued operations                                         $       0.15   $       1.97   $          -
                                                                      ==========================================
   Diluted income per common share from extraordinary item            $          -   $      (0.05)  $          -
                                                                      ==========================================
   Diluted net income per common share                                $       1.00   $       2.79   $       0.93
                                                                      ==========================================
(1) The Company's  convertible  debt did not have a dilutive  effect on earnings
per share from continuing operations during the fourth quarter of fiscal 1998.
</TABLE>

     Options to purchase  9,231,486 shares of common stock that were outstanding
during 1999 were not included in the  computation of diluted  earnings per share
as the exercise  prices of these  options  were greater than the average  market
price of the common shares.
<PAGE>


12. CONCENTRATION OF CREDIT RISK:

   The Company's  financial  instruments that are exposed to  concentrations  of
credit risk consist primarily of cash and trade accounts receivable. The Company
places its cash with what it believes to be high credit quality institutions. At
times such investments may be in excess of the FDIC insurance limit. The Company
routinely   assesses  the  financial   strength  of  its  customers  and,  as  a
consequence, believes that its trade accounts receivable credit risk exposure is
limited.

     In connection  with the Company's sale of its health care  operations,  the
Company  entered into an agreement  with the purchaser of the health care assets
whereby the Company agreed to make advances to the purchaser to fund its working
capital  requirements.  These advances are  collateralized  by the assets of the
sold  operations,  primarily  the accounts  receivable.  In the third quarter of
1999, the Company was informed by the purchaser that they would default on their
obligation   to  the  Company.   The   purchaser  is   attempting  to  sell  the
purchaser-owned  locations  and  enter  into  agreements  with its  franchisees,
whereby  net  accounts  receivable  and any  amounts  realized  from the sale of
purchaser-owned  locations will,  after operating  costs, be applied against the
purchaser's  debt to the Company.  Further,  the  purchaser has named an interim
executive to operate the business in an effort to maximize debt reduction to the
Company. However, in the third quarter of 1999, the Company believed that, based
upon an analysis of the assets and liabilities of the purchaser, it was probable
that a portion of the  advances  would not be repaid.  Accordingly,  the Company
recorded a $25.0 million reserve.  At December 31, 1999,  advances  outstanding,
net of the $25.0 million reserve, totaled $18.8 million. See Note 3.



13. RESTRUCTURING OF OPERATIONS AND IMPAIRMENT CHARGE

In December 1998, the Company's  Board of Directors  approved an Integration and
Strategic   Repositioning   Plan  (the   "Plan")  to   strengthen   the  overall
profitability of the Company by implementing a back office  integration  program
and branch  repositioning  plan in an effort to  consolidate  or close  branches
whose financial performance did not meet the Company's expectations. Pursuant to
the Plan, during the fourth quarter of 1998 the Company recorded a restructuring
and impairment  charge of $18,683.  The  restructuring  component of the Plan is
based, in part, on the evaluation of objective evidence of probable  obligations
to be incurred by the Company or impairment of specifically identified assets.

     The Plan  provided  for the  consolidation  or closing of 23  branches  and
certain organizational  improvements.  This restructuring,  which will result in
the elimination of approximately 100 positions,  will be completed over a 12- to
18-month  period,  which began during the first  quarter of 1999. As of December
31, 1999, the Company has consolidated the majority of the branches contemplated
and expects to complete the Plan by mid-2000.

     The major components of the restructuring and impairment charge include:(1)
costs  of  $1,896  to  recognize   severance   and  related   benefits  for  the
approximately 100 employees to be terminated.  The severance and related benefit
accruals  are  based  on the  Company's  severance  plan and  other  contractual
termination  provisions.  These accruals include amounts to be paid to employees
upon  termination  of  employment.  Prior to December 31, 1998,  management  had
approved  and  committed  the Company to a plan that  involved  the  involuntary
termination of certain employees.  The benefit arrangements associated with this
plan were  communicated to all employees in December 1998. The plan specifically
identified   the  number  of   employees   to  be   terminated   and  their  job
classifications; (2) costs of $803 to write down certain furniture, fixtures and
computer  equipment to net realizable value at branches not performing up to the
Company's  expectations;  (3) costs of $9,936 to write down goodwill  associated
with the acquisition of Legal Information Technology, Inc. which was acquired in
January 1997,  calculated in accordance  with Statement of Financial  Accounting
Standards  (SFAS) No. 121 in the fourth  quarter of 1998; (4) costs of $4,788 to
terminate  leases  and  other  exit  and  shutdown  costs  associated  with  the
consolidated or closed branches, including closing the facilities; and (5) costs
of $1,260 to adjust  accounts  receivable  due to the  expected  increase in bad
debts  which  results   directly  from  the  termination  or  change  in  client
relationships which results when branch and administrative  employees,  who have
the knowledge to effectively pursue collections, are terminated. These costs are
based  upon  management's  best  estimates.  Based  on  efficiencies  and  lease
termination  activities,  the Company  reduced the reserve for lease payments on
cancelled facility leases by $2,314 in the third quarter of 1999.

The following table summarizes the restructuring  activity through December 31
 1999 (in thousands):
<PAGE>

<TABLE>
<CAPTION>
                                Payments To        Write-Down Of        Payments On
                                 Employees       Certain Property,       Cancelled          Write-Down Of
                               Involuntarily         Plant and           Facility              Certain
                               Terminated (a)      Equipment (b)         Leases (a)        Receivables (b)         Total
                             -----------------   ------------------   ----------------   ------------------   ---------------
<S>                          <C>                 <C>                  <C>                <C>                  <C>
Balances as of
   December 31, 1998         $     1,896         $        803          $     4,788        $     1,260          $      8,747

1999 charges and
   write-downs                    (1,840)                (803)              (1,530)            (1,260)               (5,433)

Adjustment to estimated
   payments on cancelled
   facility leases                     -                    -               (2,314)(b)              -                (2,314)
                                  -------             -------              -------            -------               -------
Balances as of
   December 31, 1999         $        56          $         -          $       944       $          -         $       1,000
                                  =======             =======              =======            =======               =======


(a): Cash;  (b): Noncash
</TABLE>

     The balance in the  restructuring  accrual is included in Accounts  payable
and accrued expenses. See Note 6.


14. FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company's  financial  instruments include cash and cash equivalents and
its debt obligations.  Management believes that these financial instruments bear
interest at rates which approximate prevailing market rates for instruments with
similar  characteristics  and,  accordingly,  that the carrying values for these
instruments are reasonable estimates of fair value.


15.  COMPREHENSIVE INCOME

     A summary of  comprehensive  income for the year ended  December  31, 1999,
1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                            Foreign
                                                           Currency             Total
                                            Net           Translation       Comprehensive
For the Year Ended,                        Income         Adjustments          Income
----------------------------------------------------------------------------------------
<S>                                       <C>              <C>             <C>
December 31, 1999                         $   97,090       $ (3,512)       $   93,578
December 31, 1998                         $  323,831       $    615        $  324,446
December 31, 1997                         $  102,033       $    (95)       $  101,938

</TABLE>


     The foreign  currency  translation  adjustments are not adjusted for income
taxes as they relate to indefinite investments in non-U.S. subsidiaries.



<PAGE>
16.  QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
                                                     For the Three Months Period Ended                  For the
                                       ----------------------------------------------------------     Year Ended
                                          Mar. 31,        June 30,       Sept. 30,       Dec. 31,       Dec. 31,
                                            1999            1999           1999(3)        1999            1999
-------------------------------------------------------------------------------------------------   ---------------
<S>                                    <C>            <C>             <C>            <C>            <C>
Revenue                                 $   138,953   $    147,136    $    154,873   $    151,493   $    592,455
Gross profit                                 45,341         48,712          51,615         49,325        194,993
Income from continuing operations             7,635          8,345          (5,051)         7,668         18,597
Income from discontinued operations,
   net of taxes                              16,593         17,616          20,788          8,541         63,538
Gain on sale of discontinued
   operations, net of taxes (2)                   -              -          14,955              -         14,955
Net income                                   24,228         25,961          30,692         16,209         97,090
Basic income per common share from
   continuing operations                       0.08           0.09           (0.06)          0.08           0.19
Basic income per common share from
   discontinued operations                     0.17           0.18            0.22           0.09           0.66
Basic income per common share from
   gain on sale of discontinued
   operations                                     -              -            0.16              -           0.16
Basic net income per common share              0.25           0.27            0.32           0.17           1.01
Diluted income per common share from
   continuing operations                       0.08           0.09           (0.06)          0.08           0.19
Diluted income per common share from
   discontinued operations                     0.17           0.18            0.22           0.09           0.66
Diluted income per common share from
   gain on sale of discontinued
   operations                                     -              -            0.15              -           0.15
Diluted net income per common share            0.25           0.27            0.31           0.17           1.00
</TABLE>


<TABLE>
<CAPTION>
                                                     For the Three Months Period Ended                  For the
                                       ----------------------------------------------------------     Year Ended
                                          Mar. 31,        June 30,       Sept. 30,       Dec. 31,       Dec. 31,
                                            1998            1998           1998           1998(1)         1998
-------------------------------------------------------------------------------------------------   ---------------
<S>                                    <C>            <C>             <C>            <C>            <C>
Revenue                                 $   121,479   $    132,683    $    140,586   $    143,225   $    537,973
Gross profit                                 38,318         40,480          42,202         44,760        165,760
Income from continuing operations             6,824          7,741           8,038         (4,912)        17,691
Income from discontinued operations,
   net of taxes                              25,752         29,017          20,890          5,530         81,189
Gain on sale of discontinued
   operations, net of taxes (2)                   -              -         216,365         14,196        230,561
Extraordinary item of loss on early
   extinguishment of debt, net of
   benefit                                        -              -               -         (5,610)        (5,610)
Net income                                   32,576         36,758         245,293          9,204        323,831
Basic income per common share from
   continuing operations                       0.06           0.07            0.08          (0.05)          0.16
Basic income per common share from
   discontinued operations                     0.25           0.26            0.18           0.06           0.75
Basic income per common share from
   gain on sale of discontinued
   operations                                     -              -            1.99           0.13           2.12
Basic income per common share from
   extraordinary item                             -              -               -          (0.05)         (0.05)
Basic net income per common share              0.31           0.33            2.25           0.09           2.98
Diluted income per common share from
   continuing operations                       0.07           0.07            0.09          (0.05)          0.18
Diluted income per common share from
   discontinued operations                     0.22           0.24            0.17           0.06           0.69
Diluted income per common share from
   gain on sale of discontinued
   operations                                     -              -            1.84           0.13           1.97
Diluted income per common share from
   extraordinary item                             -              -               -          (0.05)         (0.05)
Diluted net income per common share     $      0.29   $       0.31    $       2.10   $       0.09   $       2.79
</TABLE>

<PAGE>

     (1) In the fourth quarter of 1998, the Company recorded a restructuring and
impairment  charge  of  $20,437.  See  Note  13.

     (2) During the fourth quarter of 1998, the Company recorded  adjustments to
estimated  costs  relating  to the third  quarter  gain on sale of net assets of
discontinued  operations to reflect the  determination  of  transaction  related
costs and income taxes.  During the third quarter of 1999, the Company  recorded
adjustments to the tax liability relating to the third quarter 1998 gain on sale
of net assets of  discontinued  operations  to reflect the final  allocation  of
sales price resulting from the finalization of certain deliverables of the sales
agreement.

     (3) In the third quarter of 1999, the Company  recorded a charge of $25,000
million related to the estimated  uncollectibility of notes recievable generated
from the sale of the Company's discontinued health care operations. See note 11.
The Company,  also in the third  quarter of 1999,  reduced the reserve for lease
payments on cancelled facility leases by $2,314. See Note 13.
<PAGE>


17.  GEOGRAPHIC FINANCIAL INFORMATION

The following summarizes the Company's geographic financial information:

<TABLE>
<CAPTION>
                                                                                    Fiscal
                                                               ------------------------------------------------
                                                                    1999              1998             1997
---------------------------------------------------------------------------------------------------------------
<S>                                                             <C>               <C>              <C>
Revenues
      United States                                             $    432,567      $    417,917      $    333,023
      U.K.                                                           159,888           120,056            50,466
                                                                ------------      ------------      ------------
         Total                                                  $    592,455      $    537,973      $    383,489
                                                                ============      ============      ============
Identifiable Assets
      United States                                             $  1,343,645      $  1,251,007
      U.K.                                                           146,686           108,159
                                                                ------------      ------------
         Total                                                  $  1,490,331      $  1,359,166
                                                                ============      ============
 </TABLE>

 PART III

     Information  required  by Part  III is  incorporated  by  reference  to the
Registrant's  Definitive  Proxy Statement to be filed pursuant to Regulation 14A
("the Proxy Statement") not later than 120 days after the end of the fiscal year
covered by this report.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this item is incorporated by reference from the
section  entitled  "Election of Directors" and "Compliance with Section 16(a) of
the Securities Exchange Act of 1934" contained in the proxy statement.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated by reference from the
section entitled "Executive Compensation" contained in the Proxy Statement.

ITEM 12. SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated by reference from the
section entitled "Voting Securities" contained in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated by reference from the
sections  entitled  'Certain  Relationships  and  Related   Transactions';   and
'Compensation  Committee Interlocks and Insider Participation'  contained in the
Proxy Statement.


   PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)

1.  Financial Statements

     The  following  consolidated  financial  statements  of the Company and its
subsidiaries are included in Item 8 of this report:

Report of Independent Accountants

Consolidated  Balance Sheets as of December 31, 1999 and 1998

Consolidated  Statements  of Income  for each of the three  years in the  period
ended December 31, 1999

Consolidated  Statements of Cash Flows for each of the three years in the period
ended December 31, 1999

Consolidated  Statements of Stockholders'  Equity for each of the three years in
the period ended December 31, 1999

Notes to Consolidated Financial Statements.

2. Financial Statement Schedules

               Financial  statement  schedules  required  to be included in this
          report are either shown in the financial  statements and notes thereto
          included in Item 8 of this report or have been  omitted  because  they
          are not applicable.

3. Exhibits


3.1     Amended and restated Articles of Incorporation.(1)

3.2     Amended and Restated Bylaws.(2)

10.1    AccuStaff Incorporated Employee Stock Plan. (3)

10.2    AccuStaff Incorporated (now Modis Professional Services, Inc. amended
        and restated Non-Employee Director Stock Plan. (4)

10.3    Form of Employee Stock Option Award Agreement. (3)

10.4    Form of Non-Employee Director Stock Option Award Agreement,
        as amended.

10.5    Profit Sharing Plan. (3)

10.6    Revolving Credit and  Reimbursement  Agreement by and  between
        the  Company   and   NationsBank   National   Association   as
        Administration   Agent  and  certain  lenders  named  therein,
        dated October 30, 1998. (2)

10.6(a)  Amendment agreement No. 1 to revolving credit and reimbursement
         agreement, Dated October 27, 1999. (1)

10.6(b)  364 day credit agreement by and between the Company and Bank of
         America. N.A. as administration agent and certain lenders named
         therein dated October 27, 1999. (1)

10.7     Modis Professional Services, Inc., 1995 Stock Option Plan, as
         Amended and Restated.  (2)

10.8    Form  of  Stock  Option  Agreement  under  Modis  Professional
        Services, Inc. amended and restated 1995 Stock Option Plan. (2)

10.9    Executive Employment Agreement with Derek E. Dewan.  (4)

10.9(a) Award notification to Derek E. Dewan under the Senior Executive
        Annual Incentive Plan (1)

10.10   Executive Employment Agreement with Michael D. Abney.  (4)

10.10(a)Award notification to Michael D. Abney under Senior Executive
        Annual Incentive Plan. (1)

10.11   Executive Employment Agreement with Marc M. Mayo. (4)

10.11(a)Award notification to Marc M. Mayo under the Senior Executive
        Annual Incentive Plan.  (1)

10.12   Executive Employment Agreement with Timothy D. Payne. (4)

10.12(a)Award notification to Timothy D. Payne under the Senior Executive
        Annual Incentive Plan.  (1)

10.13   Executive Employment Agreement with George A. Bajalia. (4)

10.13(a)Award notification to George A. Bajalia under the Senior
        Executive Annual Incentive Plan. (1)

10.14   Executive Employment Agreement with Robert P. Crouch.  (4)

10.14(a)Award notification to Robert P. Crouch under the Senior
        Executive Annual Incentive Plan.  (1)

10.15   Senior Executive Annual Incentive Plan.  (1)

10.16   Form of Director's Indemnification Agreement.

10.17   Form of Officer's Indemnification Agreement.

21      Subsidiaries of the Registrant.

23      Consent of PricewaterhouseCoopers LLP.

27      Financial Data Schedule.

(1) Incorporated by reference to the Company's Quarterly Report on Form
10-Q filed November 15, 1999.

(2) Incorporated  by reference to the Company's  Annual Report on Form
10-K filed March 31, 1999.

(3) Incorporated by reference to the Company's Registration on Form S-1
(No. 33-78906).

(4) Incorporated by reference to the Company's Quarterly Report on Form
10-Q filed August 16, 1999.

(b)  reports on Form 8-K.  No  reports  on form 8-K were filed  during the final
quarter of fiscal 1999.

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.

MODIS PROFESSIONAL SERVICES, INC.




By: /s/ Derek E. Dewan
Derek E. Dewan
President, Chairman of the Board
and Chief Executive Officer

Date: March 30, 1999

Pursuant to the requirements of 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.

Signatures              Title                                     Date

/s/  Derek E. Dewan     President, Chairman of the Board          March 30, 2000
Derek E. Dewan          and Chief Executive Officer


/s/  Michael D. Abney   Senior Vice President, Chief              March 30, 2000
Michael D. Abney        Financial Officer, Treasurer
                        And Director

/s/ Robert P. Crouch    Vice President and Chief                  March 30, 2000
Robert P. Crouch        Accounting Officer


/s/ T. Wayne Davis      Director                                  March 30, 2000
T. Wayne Davis


/s/  Peter J. Tanous    Director                                  March 30, 2000
Peter J. Tanous


/s/  John R. Kennedy    Director                                  March 30, 2000
John R. Kennedy


EXHIBIT INDEX


10.4            Form of Non-Employee Director Stock Option Award Agreement,
                as amended.

10.16           Form of Director's Indemnification Agreement.

10.17           Form of Officer's Indemnification Agreement.

21              Subsidiaries of the Registrant.

23              Consent of PricewaterhouseCoopers LLP.

27              Financial Data Schedule.