SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
----- THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 2000
OR
----- TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO
FEE REQUIRED]
For the transition period from ______ to ______
Commission File Number 001-09378
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
ServiceMaster Company
One ServiceMaster Way
Downers Grove, Illinois 60515
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee and the Trustees have duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
/S/ Eric R. Zarnikow
By: -----------------------------------
E.R. Zarnikow
Senior Vice President and Treasurer
/s/ Deb A. O'Connor
By: ----------------------------------
D.A. O'Connor
Senior Vice President and Controller
/s/ Rita V. Figi
By: ----------------------------------
R.V. Figi
Director of Benefits
Date: March 27, 2001
2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
ServiceMaster Employee Share Purchase Plan:
We have audited the accompanying statements of net assets of the ServiceMaster
Employee Share Purchase Plan as of December 31, 2000 and 1999, and the related
statements of changes in net assets for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Plan's Administrative Committee. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of the Plan as of December 31, 2000 and
1999 and the changes in net assets for each of the three years in the period
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 27, 2001
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF NET ASSETS
AS OF DECEMBER 31,
--------------------------
2000 1999
--------- ---------
ASSETS:
Cash $ 22,271 $ 116,430
Due from ServiceMaster 774,164 680,039
----------- -----------
NET ASSETS AVAILABLE $ 796,435 $ 796,469
=========== ===========
The accompanying Notes to Financial Statements
are an integral part of these statements.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
2000 1999 1998
--------------- ---------------- ----------------
TOTAL PLAN ASSETS AVAILABLE,
BEGINNING OF PERIOD $ 796,469 $ 736,249 $ 755,077
--------------- ---------------- ----------------
Additions:
Participant contributions - Note 3 8,639,852 8,852,554 8,311,040
ServiceMaster Company contributions 1,295,978 1,327,883 1,246,656
--------------- ---------------- ----------------
Total Additions 9,935,830 10,180,437 9,557,696
--------------- ---------------- ----------------
Deductions - Shares issued to participants 9,935,864 10,120,217 9,576,524
--------------- ---------------- ----------------
TOTAL PLAN ASSETS AVAILABLE,
END OF PERIOD $ 796,435 $ 796,469 $ 736,249
=============== ================ ================
The accompanying Notes to Financial Statements
are an integral part of these statements.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. THE PLAN
The ServiceMaster Employee Share Purchase Plan (the "Plan") was created to
give eligible employees, wishing to do so, a convenient means of purchasing
The ServiceMaster Company shares through payroll deductions and cash
contributions, supplemented by contributions made by The ServiceMaster
Company ("ServiceMaster"). Employees of ServiceMaster or any subsidiary or
affiliate which has adopted the Plan on behalf of its employees who
regularly work nine months or more during the year, who have an average
work week of 32 hours or more during the period worked and who have
attained age 18 are eligible to participate in the Plan on the first
business day of the calendar quarter coinciding with or subsequent to the
first anniversary of their employment. As of December 31, 2000,
approximately 9,000 employees were participating in the Plan.
Details relating to shares issued by the Plan (reflecting all share splits)
from inception (July 1, 1972) through December 31, 2000, are as follows:
Number
OF SHARES TOTAL COST
--------------- ---------------
Issued during the year ended
December 31, 2000 to participants 970,462 $ 9,935,864
Issued from inception through
December 31, 1999 30,765,350 97,470,087
------------- -------------
Total issued from inception through
December 31, 2000 31,735,812 $ 107,405,951
============= =============
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) The transactions of the Plan are accounted for on the accrual basis of
accounting.
b) Expenses incurred by the Plan are paid by ServiceMaster.
c) The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States requires
the Administrative Committee to make certain estimates and assumptions
that affect the reported amounts of assets, liabilities, and changes
therein, and disclosure of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from
those estimates.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. CONTRIBUTIONS
The amounts contributed by the participants and ServiceMaster during 2000,
1999, and 1998 were as follows:
2000 1999 1998
CONTRIBUTED BY CONTRIBUTED BY CONTRIBUTED BY
----------------------------- -------------------------- ---------------------------
PARTICIPANTS SERVICEMASTER PARTICIPANTS SERVICEMASTER PARTICIPANTS SERVICEMASTER
------------- ------------- ------------ ------------- ------------- -------------
Participant contributions
and ServiceMaster
required contributions
for the year $ 8,639,852 $ 37,500 $ 8,852,554 $ 37,500 $ 8,311,040 $ 37,500
ServiceMaster additional
contributions - 1,258,478 - 1,290,383 - 1,209,156
------------- ----------- ------------ ------------ ------------ -----------
Total contributions $ 8,639,852 $ 1,295,978 $ 8,852,554 $ 1,327,883 $ 8,311,040 $ 1,246,656
============= =========== ============ ============ ============ ===========
Participant contributions and required ServiceMaster contributions are
accounted for on the accrual basis. The ServiceMaster contribution to the
Plan is equal to the lesser of 15% of total participant contributions or
$37,500. ServiceMaster may elect to make additional contributions to the
Plan as it deems appropriate. Participants may contribute a maximum of 10%
of their prior year compensation as defined in the Plan agreement.
The Board of Directors of ServiceMaster approved additional contributions
which, together with the required ServiceMaster contributions previously
made, were equivalent to a 15% matching of the participant contributions
made during 2000, 1999, and 1998, for participants as of each year end.
4. FEDERAL INCOME TAXES
TAX STATUS OF THE PLAN - The Plan's trust does not qualify for tax exempt
status under Section 501 of the Internal Revenue Code. However, the Plan
incurs no tax liability since all Plan income is distributed to the
participants.
TAX STATUS OF EACH PARTICIPANT - Since the Plan does not qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue
Code (the "Code") or as a "stock bonus plan" under Section 401 of the Code,
the participant realizes income equal to his share of the ServiceMaster
contributions and cash distributions on shares issued to the participant
during the calendar year.
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, dated March 27, 2001, appearing in the ServiceMaster
Employee Share Purchase Plan Annual Report on Form 11-K for the year ended
December 31, 2000, to the Company's previously filed Registration Statement
Number 2-75851 on Form S-8.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 27, 2001
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