Summary of Significant Accounting Policies
The Company's fiscal year ends on the Sunday nearest to December 31. The three most recent years ended on December 29, 1996 (1996), December 31, 1995 (1995) and January 1, 1995 (1994).

The Company operates in the single industry segment of providing temporary help services to a diversified group of customers.

The financial statements consolidate the accounts and operations of the Company and its subsidiaries, all of which are wholly owned, after elimination of all intercompany accounts and transactions.

The accounts of the Company's foreign operations are translated at appropriate rates of exchange. Foreign operations are conducted in Australia, Canada, Denmark, France, Ireland, Italy, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Russia, Spain, Switzerland and the United Kingdom. Domestic and foreign sales, earnings from operations and identifiable assets were as follows:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.

Certain prior year amounts have been reclassified to conform with the current presentation.

Current Assets
Cash and equivalents are stated at cost, which approximates market. Included are highly liquid debt instruments with original maturities of three months or less.

Short-term investments are debt instruments having original maturities of more than three months. Of these investments, federal, state and local government obligations comprised approximately 90% in 1996 and 1995 and 80% in 1994. The entire short-term investments balance in 1996 is due within one year. Short-term investments due within one year totaled $67,000 in 1995 and $119,000 in 1994, with the balance due within two years and available for sale. The difference between carrying amounts and market was not material at December 29, 1996, December 31, 1995 and January 1, 1995.

Interest income was $4,204, $8,206 and $6,710, respectively, for the years 1996, 1995 and 1994.

Cash flows from short-term investments for 1996, 1995 and 1994 were as follows:

Changes in Certain Working Capital Components
Changes in certain working capital components, as disclosed in the statements of cash flows, for the years 1996, 1995 and 1994 are as follows:

Property and Equipment
Properties are stated at cost and include expenditures for additions and major improvements. Fully depreciated assets are eliminated from the accounts. For financial reporting purposes, assets are depreciated over their estimated useful lives, principally by the straight-line method. Depreciation expense for 1996, 1995 and 1994 was $22,900, $20,400 and $17,300, respectively.

The Company conducts its field operations primarily from leased facilities. The following are future minimum lease commitments for the five-year period commencing in 1997: $34,900, $27,400, $21,100, $12,500 and $7,900. Lease expense for 1996, 1995 and 1994 amounted to $32,900, $29,800 and $26,700, respectively.

Intangibles and Other Assets
Intangibles and other assets include goodwill of $58,000, $55,400 and $32,000 at year-ends 1996, 1995 and 1994, respectively. Goodwill, which represents the excess of cost over net assets of businesses acquired, is amortized on a straight-line basis over periods not exceeding 40 years.

Accumulated amortization at 1996, 1995 and 1994 was $4,200, $3,100 and $1,900, respectively.

The Company periodically reviews the specific carrying amounts of goodwill and has determined that no impairments have occurred. Such reviews are based on various analyses including profitability projections and management's judgment of the related business' ability to achieve sufficient profitability.

Other assets include deposits and cash values of life insurance on the lives of officers and key employees.

Capitalization
The authorized capital stock of the Company is 100,000,000 shares of Class A common stock and 10,000,000 shares of Class B common stock. Class A shares have no voting rights and are not convertible. Class B shares have voting rights and are convertible into Class A shares on a share-for-share basis at any time. Both classes of stock have identical rights in the event of liquidation.

Earnings per share are based on the average number of Class A and Class B common shares outstanding during the year.

Short-term Borrowings
Short-term borrowings of $41,616, $16,462 and $9,234 at year-ends 1996, 1995 and 1994, respectively, represent credit lines with banks maintained by certain of the Company's foreign subsidiaries. Weighted average interest rates were 6.8%, 7.8% and 7% at year ends 1996, 1995 and 1994, respectively. Interest expense related to the short-term borrowings for 1996, 1995 and 1994 was $2,247, $1,182 and $353, respectively. Interest payments approximated these amounts.

In addition, the Company has an uncommitted line of credit of $25 million at year end 1996. Through December 29, 1996, there have been no borrowings under the line of credit agreement. The carrying amounts of the Company's borrowings under the lines of credit described above approximate their fair value.

Retirement Benefits
The Company provides a qualified defined contribution plan covering substantially all full-time employees, except officers and certain other management employees. Upon approval by the Board of Directors, a contribution based on eligible wages is funded annually. The plan offers a savings feature with Company matching contributions. Assets of this plan are held by an independent trustee for the sole benefit of participating employees.

A nonqualified defined contribution plan is provided for officers and certain other management employees. Upon approval by the Board of Directors, a contribution based on eligible wages is set aside annually. This plan also includes provisions for salary deferrals and Company matching contributions.

The total amounts provided for retirement benefits amounted to $4,900 in 1996, $4,400 in 1995 and $3,900 in 1994.

Income Taxes
The following summarizes the differences between income taxes for financial reporting purposes and the United States statutory tax rate for the years 1996, 1995 and 1994.

Deferred taxes are related to the effect of temporary differences between financial and tax reporting. These differences are related principally to depreciation, benefit plan costs, provisions for workers' compensation claims, full-time and temporary employee vacation costs and provisions for doubtful accounts.

In 1992 the Internal Revenue Service (IRS) proposed the imposition of an accumulated earnings tax totaling $49 million for 1988, 1989 and 1990 in connection with an audit of the Company's consolidated federal tax liability. In April 1996, the IRS conceded that the assessment was incorrect and withdrew it in its entirety.

The Company paid income taxes of $46,500 in 1996, $52,900 in 1995 and $43,300 in 1994.

Performance Incentive Plan
Under the 1992 Performance Incentive Plan as amended and restated in 1996 (the "Plan"), the Company may grant stock options (both incentive and nonqualified), Stock Appreciation Rights (SARs), restricted awards and performance awards to key employees utilizing the Company's Class A stock. Stock options may not be granted at prices less than the fair market value on the date of grant, nor for a term to exceed 10 years. The Plan provides that the maximum number of shares available for grants is 71Ú2 percent of the outstanding Class A stock, adjusted for Plan activity over the preceding five years. Shares available for future grants at the end of 1996, 1995 and 1994 were 1,394,121; 910,674 and 1,060,947, respectively.

The Company applies Accounting Principles Board Opinion 25 and related Interpretations in accounting for the Plan. Accordingly, no compensation cost has been recognized for incentive and nonqualified stock options. If compensation cost had been determined based on the fair value at the grant dates for awards under the Plan consistent with the method of Statement of Financial Accounting Standard 123, Accounting for Stock-Based Compensation (SFAS 123), the Company's net income would have been reduced by $497 and $207 for 1996 and 1995, respectively, and earnings per share would have been reduced by $.01 in both years.

During the initial phase-in period, as required by SFAS 123, the pro forma amounts above were determined based on grants in 1996 and 1995 only. Since stock options generally become exercisable over several years and additional grants are likely to be made in future years, the pro forma amounts for compensation cost may not be indicative of the effects on net income and earnings per share for future years. The fair value of each option included in the following tables is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 1996 and 1995, respectively: dividend yield of 3.0 and 3.0 percent, expected volatility of 31 and 33 percent, risk-free interest rates of 5.7 and 6.5 percent and expected lives of seven and seven years.

A summary of the status of stock option grants under the Plan as of December 29, 1996, December 31, 1995 and January 1, 1995, and changes during the years ending on those dates is presented as follows:

Stock options outstanding at December 29, 1996 have a weighted average remaining life of 8.14 years.

As of December 29, 1996, no SARs have been granted under the Plan. Restricted awards are issued to certain key employees and are subject to forfeiture until the end of an established restriction period. Restricted awards totaling 2,400 and 66,800 shares were granted under the Plan during 1996 and 1995, respectively. The weighted average grant date price of such awards were $27.38 and $29.45 for 1996 and 1995, respectively. Restricted awards outstanding totaled 55,700; 98,100 and 53,000 shares at year-ends 1996, 1995 and 1994, respectively, and have a weighted average remaining life of 1.2 years at December 29, 1996.

Under the Plan, performance awards may be granted to senior executive officers, the payout of which is determined by the degree of attainment of objectively determinable performance goals over the established relevant performance period. Performance awards totaling 42,000 shares were granted under the Plan during 1996 with a weighted average grant date price of $29.75. Unearned performance awards outstanding at December 29, 1996 were 38,500 and have a remaining life of 2 years. Total compensation cost recognized for restricted and performance awards was $1,300, $800 and $300 for 1996, 1995 and 1994, respectively.