VINCAM GROUP INC, S-1/A, 1996-05-09

VINCAM GROUP INC
S-1/A, 1996-05-09
HELP SUPPLY SERVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 1996

REGISTRATION STATEMENT NO. 333-1594
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------

AMENDMENT NO. 4

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------

THE VINCAM GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

FLORIDA 7363 59-2452823
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)

<TABLE>
<S> <C>
MR. CARLOS A. SALADRIGAS
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE VINCAM GROUP, INC.
2850 DOUGLAS ROAD 2850 DOUGLAS ROAD
CORAL GABLES, FLORIDA 33134 CORAL GABLES, FLORIDA 33134
(305) 460-2350 (305) 460-2350
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE) INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
----------
COPIES TO:

THOMAS R. MCGUIGAN, P.A. BRUCE E. MACDONOUGH
STEEL HECTOR & DAVIS LLP GREENBERG, TRAURIG, HOFFMAN, LIPOFF,
200 S. BISCAYNE BLVD., SUITE 4000 ROSEN & QUENTEL, P.A.
MIAMI, FLORIDA 33131-2398 1221 BRICKELL AVENUE, 22ND FLOOR
(305) 577-2850 MIAMI, FLORIDA 33131
(305) 579-0882
----------

APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box: [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]

CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
- --------------------------------------------------------------------------------

Common Stock, $.001 par value .... $37,950,000 $13,086.21*
================================================================================
* Reflects additional filing fee payable pursuant to Rule 457(o) based upon
increased proposed maximum offering price. $2,181.04 is being paid in
connection herewith; $10,905.17 was previously paid.
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended.

----------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
<TABLE>
<CAPTION>
THE VINCAM GROUP, INC.
Cross-Reference Sheet Showing the Location
in the Prospectus of Information Required
by Items in Part I of Form S-1

ITEM
NO. FORM S-1 CAPTION LOCATION IN PROSPECTUS
- ---- ---------------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus .. Outside Front Cover Page

2. Inside Front and Outside Back Cover Pages
of Prospectus .......................... Inside Front and Outside Back Cover Pages

3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges ..... Prospectus Summary; the Company;
Risk Factors

4. Use of Proceeds .......................... Use of Proceeds; Business

5. Determination of Offering Price .......... Risk Factors; Underwriting

6. Dilution ................................. Dilution

7. Selling Security Holders ................. Principal and Selling Shareholders

8. Plan of Distribution ..................... Outside Front Cover Page; Underwriting

9. Description of Securities to
be Registered .......................... Description of Capital Stock; Shares Eligible for
Future Sale; Management--1995 Stock Option Plan,
--1996 Long Term Incentive Plan; Dividend Policy

10. Interests of Named Experts
and Counsel ............................ Legal Matters; Experts

11. Information with Respect to the
Registrant ............................. The Company; Dividend Policy; Selected Financial
Data, Management's Discussion and Analysis of
Financial Condition and Results of Operations;
Business; Management; Certain Transactions;
Principal and Selling Shareholders; Description
Of Capital Stock; Shares Eligible for Future
Sale

12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ............................ Not applicable.
</TABLE>

<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

SUBJECT TO COMPLETION, DATED MAY 9, 1996

P R O S P E C T U S
2,200,000 SHARES

THE VINCAM GROUP, INC.

Common Stock

----------

Of the 2,200,000 shares of Common Stock being offered hereby, 2,000,000
shares are being offered by The Vincam Group, Inc. (the "Company"), and
200,000 shares are being offered by certain of the Company's shareholders
(the "Selling Shareholders"). See "Principal and Selling Shareholders." The
Company will not receive any proceeds from the sale of Common Stock by the
Selling Shareholders.

Prior to this offering, there has been no public market for the Common
Stock. It is currently anticipated that the initial public offering price
will be between $13.00 and $15.00 per share. See "Underwriting" for a
discussion of the factors to be considered in determining the initial public
offering price. The Common Stock has been approved for listing on The Nasdaq
National Market under the symbol "VCAM."

----------
SEE "RISK FACTORS" ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

================================================================================
UNDERWRITING PROCEEDS
PRICE TO DISCOUNTS AND PROCEEDS TO TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS
- --------------------------------------------------------------------------------
Per Share $ $ $ $
- --------------------------------------------------------------------------------
Total(3) $ $ $ $
================================================================================
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."

(2) Before deducting expenses of the offering payable by the Company
estimated at $700,000.

(3) The Selling Shareholders have granted the Underwriters a 30-day option to
purchase up to an aggregate of 330,000 additional shares of Common Stock
on the same terms as set forth above solely to cover over-allotments, if
any. If such option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Selling
Shareholders will be $ , $ and $ , respectively.
See "Underwriting."
----------
The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the
shares of Common Stock offered hereby will be available for delivery on or
about , 1996 at the offices of Smith Barney Inc., 14 Wall Street, New
York, New York 10005.
----------
Smith Barney Inc.
Alex. Brown & Sons
INCORPORATED
Hambrecht & Quist
, 1996

<PAGE>

The Vincam Group, Inc.

Market Opportunities & Operating Model

Market Potential

Over $1 Trillion
Under 3% Current Penetration
Industry Growth Rate Over 25%
Highly Fragmented Industry

Market Drivers

Increasing Employment Costs
Complex Legal & Regulatory Environment
High Benefit & Workers' Compensation Costs
Increasing Use of Outsourcing

Client Benefits

Ability to Focus on Core Business
Reduced Exposure to Liabilities
Employment Cost Control
Better Employee Attraction & Retention

Distribution System
Client Employers & Employees

Over 330 Clients
Over 11K Employees

Core Competencies

Human Resource Administration
Employer Regulatory Compliance Management
Workers' Compensation Cost Containment & Safety Management
Employee Benefits

New Market Opportunities

Leverage Core Competencies
Unbundle Services to Serve Larger Clients

Structural Economies & Operating Efficiencies

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES,
REFERENCES IN THIS PROSPECTUS TO "VINCAM" AND THE "COMPANY" REFER TO THE
VINCAM GROUP, INC. AND ITS CONSOLIDATED SUBSIDIARIES.

THE COMPANY

The Vincam Group, Inc., one of the largest professional employer
organizations ("PEO") in the industry, provides small and medium-sized
businesses with an outsourcing solution to the complexities and costs related
to employment and human resources. The Company's continuum of integrated
employment-related services consists of human resource administration,
employment regulatory compliance management, workers' compensation coverage,
health care and other employee benefits. The Company establishes a
co-employer relationship with its clients and contractually assumes
substantial employer responsibilities with respect to worksite employees. The
Company believes its services assist business owners in: (i) managing
escalating costs associated with workers' compensation, health insurance
coverage, workplace safety programs, and employee-related litigation, (ii)
providing employees with competitive health care and related benefits that
are more characteristic of large employers, and (iii) reducing the time and
effort required by business owners and executives to deal with the
increasingly complex legal and regulatory environment affecting employment.
As of December 31, 1995, the Company provided professional employer services
to approximately 340 client organizations with nearly 11,400 employees,
primarily in Florida, Georgia and Michigan.

According to the U.S. Small Business Administration, there were
approximately 5.1 million businesses in the United States with fewer than 500
employees in 1992. Collectively, these businesses employed an estimated 49
million employees and represented approximately $1.1 trillion in aggregate
annual payroll, implying a potential market size for PEO services of $1.3
trillion (assuming an average mark-up of approximately 20%). The PEO industry
began to evolve in the early 1980s largely in response to the burdens placed
on small to medium-sized employers by an increasingly complex legal and
regulatory environment. While various service providers, such as payroll
processing firms, benefits and safety consultants, and temporary services
firms are available to assist businesses with specific tasks, these
organizations do not typically provide a comprehensive range of services
relating to the employer/ employee relationship. PEOs address this market
void.

The PEO industry has experienced significant growth in recent years.
Industry sources estimate that gross revenues in the PEO industry grew from
$5.0 billion in 1991 to $13.8 billion in 1995, representing a compounded
annual growth rate of approximately 29%. The Company believes that the
increasing willingness of businesses to outsource non-core activities and
functions, the low market penetration of the PEO industry, and the growth in
the number of small businesses in the United States has contributed to the
growing demand for PEO services. The PEO industry is highly fragmented, with
approximately 1,100 PEOs in operation in 1995. The Company believes that
increasing industry regulatory complexity and the increasing capital
requirements associated with developing larger service delivery
infrastructures and management information systems should lead to significant
consolidation opportunities in the PEO industry.

The Company intends to further strengthen its position as an industry
leader by: (i) providing employers with comprehensive outsourcing solutions
to their human resource needs, (ii) targeting medium-sized businesses with 20
to 500 employees, (iii) aggressively managing health care and workers'
compensation costs through the development of vertically integrated managed
care systems, (iv) developing proprietary information systems to provide a
competitive advantage in managing costs and delivering a full range of high
quality services, (v) increasing penetration of existing markets by hiring
additional sales personnel and increasing sales productivity, and (vi)
acquiring established, quality PEOs in selected markets. In addition, the
Company intends to further capitalize on its managed care expertise by
offering certain specialty managed care services on a stand-alone basis to
health and workers' compensation insurance companies, health maintenance
organizations ("HMOs"), managed care providers and large self-insured
employers.

3
<PAGE>
RECENT DEVELOPMENTS

The Company is currently in the process of compiling preliminary financial
results for the three months ended March 31, 1996 and expects to report, for
that period, revenues of approximately $79.9 million, gross profit of
approximately $5.0 million and net income of approximately $593,000. These
results represent an increase from the comparable period in 1995 of $24.6
million in revenues (an increase of 44.5%), $1.8 million in gross profit (an
increase of 56.3%) and $271,000 in net income (an increase of 84.2%).

THE OFFERING

<TABLE>
<CAPTION>
COMMON STOCK TO BE OFFERED:

<S> <C>
By the Company .............................. 2,000,000 shares

By the Selling Shareholders ................. 200,000 shares
----------------

Total ..................................... 2,200,000 shares

Common Stock to be Outstanding
after the Offering ......................... 7,999,999 shares(1)

Use of Proceeds .............................. Estimated net proceeds of $25.3 million will be used
to repay debt and certain payables and for general corporate
purposes, including potential acquisitions. See "Use
of Proceeds."

Proposed Nasdaq National Market Symbol ..... VCAM
<FN>
(1) Excludes 627,328 shares of Common Stock issuable pursuant to outstanding
options under the Company's 1995 Stock Option Plan and the 1996 Long Term
Incentive Plan at a weighted average exercise price of $3.99. See
"Management--1995 Stock Option Plan" and "--1996 Long Term Incentive
Plan."
</FN>
</TABLE>
----------
UNLESS OTHERWISE NOTED, ALL FINANCIAL AND COMMON SHARE INFORMATION
PRESENTED IN THIS PROSPECTUS HAS BEEN ADJUSTED TO REFLECT A THREE FOR FOUR
REVERSE STOCK SPLIT EFFECTED ON FEBRUARY 21, 1996 AND THE CONVERSION OF ALL
OUTSTANDING SHARES OF THE COMPANY'S MANDATORILY REDEEMABLE SERIES A
PARTICIPATING CONVERTIBLE PREFERRED STOCK (THE "SERIES A PREFERRED STOCK")
INTO 1,043,933 SHARES OF COMMON STOCK CONCURRENTLY WITH THE CONSUMMATION OF
THE OFFERING.

4
<PAGE>
SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1991 1992 1993 1994 1995
---------- ---------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT FOR PER SHARE AND STATISTICAL DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues (1) ................................ $45,912 $86,029 $138,097 $191,533 $239,408
Direct costs:
Salaries, wages and employment taxes of
worksite employees ........................ 40,716 74,854 121,180 168,874 212,479
Health care and workers' compensation ..... 3,418 6,817 8,954 10,349 12,340
State unemployment taxes and other ........ 220 745 978 1,595 1,646
------- ------- -------- -------- --------
Total direct costs ........................ 44,354 82,416 131,112 180,818 226,465
------- ------- -------- -------- --------
Gross profit ................................ 1,558 3,613 6,985 10,715 12,943
Operating expenses:
Administrative personnel ................... 648 1,476 3,155 3,999 6,268
Other general and administrative ........... 541 932 1,013 2,383 3,372
Sales and marketing ........................ 260 277 640 1,376 1,724
Depreciation and amortization .............. 44 64 88 205 338
------- ------- -------- -------- --------
Total operating expenses .................. 1,493 2,749 4,896 7,963 11,702
------- ------- -------- -------- --------
Operating income ............................ 65 864 2,089 2,752 1,241
Nonrecurring loss on investment ............. (32) (480) 0 0 0
Interest (expense) income, net .............. (8) (3) (44) (19) 38
Other expenses .............................. (20) (41) 0 0 0
------- ------- -------- -------- --------
Income before taxes ......................... 5 340 2,045 2,733 1,279
Provision for income taxes .................. (2) (139) (704) (933) (469)
------- ------- -------- -------- --------
Net income .................................. $ 3 $ 201 $ 1,341 $ 1,800 $ 810
======= ======= ======== ======== ========
Net income per common and common
equivalent share (2) ...................... -- $ 0.03 $ 0.20 $ 0.27 $ 0.13

Weighted average shares outstanding (2) .... 6,698 6,698 6,698 6,698 6,462

STATISTICAL DATA:
Worksite employees at period end ............ 2,452 4,244 6,587 8,590 11,391
PEO client companies at period end (3) ..... 239 285 339
Average number of worksite employees per PEO
client company at period end (3) .......... 28 30 34
Gross profit margin ......................... 3.39% 4.20% 5.06% 5.59% 5.41%
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------------------
ACTUAL AS ADJUSTED (4)
---------- -----------------
<S> <C> <C>
BALANCE SHEET DATA:

Working capital ........................................... $ 2,052 $27,392
Total assets .............................................. 17,819 41,259
Long term borrowings, including current portion .......... 2,406 1,206
Other long term liabilities ............................... 2,737 2,737
Mandatorily redeemable Series A Preferred Stock .......... 6,264 --
Total common stock and other stockholders' (deficit)
equity .................................................. (4,751) 26,853
<FN>
- ----------
(1) Revenues include all amounts billed to clients for gross salaries
and wages, related employment taxes, and health care and workers'
compensation coverage of worksite employees.
(2) See Note 1 of Notes to Consolidated Financial Statements.
(3) Data not available for 1991 or 1992.
(4) Adjusted to reflect the sale of 2,000,000 shares of Common Stock
by the Company pursuant to the offering (assuming an initial
public offering price of $14.00 per share), the concurrent
conversion of the Company's Series A Participating Convertible
Preferred Stock into Common Stock and the application of the net
proceeds from this offering as described in "Use of Proceeds."
</FN>

</TABLE>

5
<PAGE>
THE COMPANY

The Vincam Group, Inc. was incorporated in Florida in September 1984 as
"Human Power Resources, Inc.," and changed its name to "The Vincam Group,
Inc." in 1989. The Company's corporate headquarters are located at 2850
Douglas Road, Coral Gables, Florida 33134, and its telephone number is (305)
460-2350.

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FACTORS SET FORTH
BELOW, AS WELL AS THE OTHER INFORMATION PROVIDED ELSEWHERE IN THIS
PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE COMMON STOCK OF THE COMPANY.

POTENTIAL FOR UNFAVORABLE INTERPRETATION OF GOVERNMENT REGULATIONS

The Company's operations are affected by numerous federal, state and local
laws relating to labor, tax, insurance and employment matters and the
provision of managed care services. By entering into an employment
relationship with employees who work at client company locations ("worksite
employees"), the Company assumes certain obligations and responsibilities of
an employer under these laws. Because many of the laws related to the
employment relationship were enacted prior to the development of alternative
employment arrangements, such as those provided by professional employer
organizations and other staffing businesses, many of these laws do not
specifically address the obligations and responsibilities of non-traditional
employers. Interpretive issues concerning such relationships have arisen and
remain unsettled. Uncertainties arising under the Internal Revenue Code of
1986, as amended (the "Code") include, but are not limited to, the qualified
tax status and favorable tax status of certain benefit plans provided by the
Company and other alternative employers. The unfavorable resolution of these
unsettled issues could have a material adverse effect on the Company's
results of operations, financial condition and liquidity.

In addition, there can be no assurance that existing laws and regulations
which are not currently applicable to the Company will not be interpreted
more broadly in the future so as to apply to the Company's existing
activities or that new laws and regulations will not be enacted with respect
to the Company's activities, either of which could have a material adverse
effect on the the Company's business, financial condition, results of
operations and liquidity. See "Industry Regulation."

While many states do not explicitly regulate PEOs, approximately one-third
of the states (including Florida) have passed laws that have licensing or
registration requirements for PEOs and several additional states, including
Georgia, are considering such regulation. Such laws vary from state to state
but generally provide for monitoring the fiscal responsibility of PEOs and
specify the employer responsibilities assumed by PEOs. There can be no
assurance that the Company will be able to comply with any such regulations
which may be imposed upon it in the future. See "Industry Regulation."

NEED FOR LICENSES AND CERTIFICATIONS

The managed health care industry is also subject to extensive state and
federal regulation. Certain of the Company's arrangements with respect to the
provision of specialty managed care services or the establishment of health
care provider networks require the Company to satisfy operating, licensing or
certification requirements, and further expansion of the range of specialty
managed care services offered by the Company is likely to subject the Company
to additional licensing and regulatory requirements. Together with a Florida
HMO, the Company has developed a provider network certified as a workers'
compensation managed care arrangement in Florida. There can be no assurance,
however, that the Company will be able to obtain or maintain all required
licenses or certifications. See "Industry Regulation."

UNCERTAINTY OF IMPACT OF HEALTH CARE REFORM

Regulation in the health care and workers' compensation fields continues
to evolve, and the Company is unable to predict what additional government
regulations, if any, that affect its business

6
<PAGE>
may be adopted in the future. In addition, health care reform and/or specific
changes in laws or regulations may impact demand for the Company's services,
require the Company to develop new or modified services to meet the demands
of the marketplace or modify the fees that the Company may charge for its
services. See "Industry Regulation."

RISKS ASSOCIATED WITH EXPANSION INTO ADDITIONAL STATES

The Company operates primarily in Florida, Michigan and Georgia, with such
states accounting for approximately 80.8%, 14.5% and 3.0%, respectively, of
the Company's revenues for 1995. Future growth of the Company's operations
depends, in part, on its ability to offer its services to prospective clients
in additional states. In order to operate effectively in a new state, the
Company must obtain all necessary regulatory approvals, achieve acceptance in
the local market, adapt its procedures to that state's regulatory
requirements and local market conditions and establish internal controls that
enable it to conduct operations in several locations. The length of time
required to obtain regulatory approval to begin operations will vary from
state to state, and there can be no assurance that the Company will be able
to satisfy licensing requirements or other applicable regulations of any
particular state in which it is not currently operating, that it will be able
to provide the full range of services currently offered in Florida, or that
it will be able to operate profitably within the regulatory environment of
any state in which it does obtain regulatory approval. The absence of
required licenses would require the Company to restrict the services it
offers. See "Industry Regulation." Moreover, as the Company expands into
additional states, there can be no assurance that the Company will be able to
duplicate in other markets the revenue growth and operating results
experienced in its Florida market.

GEOGRAPHIC MARKET CONCENTRATION

The Company's South Florida market (Dade, Broward and Palm Beach counties)
accounted for approximately 77.1% of the Company's revenues for 1995. For the
foreseeable future, a significant portion of the Company's revenues will be
subject to economic factors specific to South Florida.

ADEQUACY OF RESERVES

The Company maintains large deductible workers' compensation insurance
policies, and participates in a minimum premium health insurance plan in
certain states and a partially self-insured health insurance program in
others. This results in the Company's payment of substantially all of the
workers' compensation claims and a portion of the medical claims of its
worksite employees. To the extent that the Company is not successful in
managing the severity and frequency of workers' compensation injuries and
medical claims, the costs incurred by the Company will increase and may have
a material adverse effect on the Company's financial condition, results of
operations and liquidity. The Company maintains reserves for workers'
compensation, medical and behavioral health claims based on periodic reviews
of open claims as well as past claims experience. While the Company believes
such reserves are adequate, the Company cannot predict with certainty the
ultimate liability associated with open claims and past claim experience may
not be indicative of future results. Accordingly, if estimated reserve
amounts prove to be less than the ultimate liability with respect to these
claims, the Company's financial condition, results of operations and
liquidity could be materially adversely affected. See Notes 1 and 4 of Notes
to Consolidated Financial Statements.

INCREASES IN HEALTH CARE COSTS

Health care costs, including the medical costs associated with workers'
compensation, and insurance premiums, are significant to the Company's
operating results. Accordingly, the Company employs extensive managed care
procedures in an attempt to control such health care costs. Health care
reform has recently been the subject of debate at both the federal and state
government levels, and laws and regulations relating to health care are
subject to change by action of the U.S. Congress, by various state
legislatures or both. If such reforms result in an increase in the Company's
health care costs, the Company's ability to incorporate such increases into
service fees to clients may be constrained by contractual arrangements with
clients, which may result in a delay before such increases can be reflected
in service fees. As a result, such increases could have a material adverse
effect on the Company's financial condition, results of operations and
liquidity.

7
<PAGE>
QUARTERLY FLUCTUATIONS IN OPERATING RESULTS

Historically, the Company's quarterly operating results have fluctuated
significantly as a result of a number of factors, including the timing of new
contracts and terminations, the effect of employment tax limits and delivery
of health care services, none of which can be predicted with any degree of
certainty.

DEPENDENCE UPON KEY PERSONNEL

The Company is dependent to a substantial extent upon the continuing
efforts and abilities of certain key management personnel, including Carlos
A. Saladrigas (the Company's Chairman, President and Chief Executive Officer)
and Jose M. Sanchez (the Company's Vice Chairman and Area President--South
Florida). In addition, four of the Company's sales executives accounted for
approximately 70% of the Company's new PEO business booked during 1995.
However, the Company does not have employment agreements with any of its
executive officers or such sales executives. The loss of services of certain
of the Company's executive officers or sales executives could have a material
adverse effect upon the Company's financial condition, results of operations
and liquidity.

FINANCIAL CONDITION OF CLIENTS

The Company is obligated to pay the wages and salaries of its worksite
employees regardless of whether the Company's clients pay the Company on a
timely basis or at all. To the extent that any client experiences financial
difficulty, or is otherwise unable to meet its obligations as they become
due, the Company's financial condition, results of operations and liquidity
could be materially adversely affected.

SHORT TERM NATURE OF PEO SERVICES AGREEMENTS

The Company's standard PEO services agreement provides for an initial
one-year term, subject to termination by the Company or the client at any
time during the first year upon 30 days' prior written notice, and thereafter
annually. A significant number of terminations could have a material adverse
effect on the Company's financial condition, results of operations and
liquidity. See "Business--Clients."

RISK OF LOSS OF QUALIFIED STATUS FOR CERTAIN TAX PURPOSES

The Internal Revenue Service ("IRS") is conducting a Market Segment Study
of the PEO industry, focusing on selected PEOs (not including Vincam), in
order to examine the relationships among PEOs, worksite employees and owners
of client companies. If the IRS concludes that PEOs are not "employers" of
certain worksite employees for purposes of the Code, the tax qualified status
of the Company's 401(k) plan could be revoked, its cafeteria plan may lose
its favorable tax status, and the Company may no longer be able to assume the
client company's federal employment tax withholding obligations. If the loss
of qualified tax status for the Company's 401(k) plan or cafeteria plan is
applied retroactively, employees' vested account balances would become
taxable immediately to the employees, the Company would lose its tax
deduction to the extent the contributions were not vested, the plan trust
would become a taxable trust and penalties could be assessed. In such a
scenario, the Company would face the risk of client dissatisfaction as well
as potential litigation, and its financial condition, results of operations
and liquidity could be materially adversely affected. In addition, if the
Company is required to report and pay employment taxes for the separate
accounts of its clients rather than for its own account as a single employer,
the Company could incur increased administrative burdens. The Company is
unable to predict the timing or nature of the findings of the Market Segment
Study or the ultimate outcome of such findings. See "Industry Regulation."

FAILURE TO MANAGE GROWTH

The Company has experienced significant internal growth and intends to
pursue an acquisition strategy. This growth may place a significant strain on
the Company's management, financial, operating and technical resources. The
Company has limited acquisition experience, and there can be no assurance
that suitable acquisition candidates can be found, that the Company will have
or be able to obtain the necessary financing to consummate acquisitions, that
acquisitions can be consummated on favorable terms or that any acquired
companies can be successfully integrated into the Company's

8
<PAGE>
operations. There can be no assurance that management skills and systems
currently in place will be adequate to implement the Company's strategy and
the failure to manage growth effectively or to implement its strategy could
have a material adverse effect on the Company's results of operations,
financial condition and liquidity.

LIABILITIES FOR CLIENT AND EMPLOYEE ACTIONS

A number of legal issues remain unresolved with respect to the
co-employment arrangements among PEOs, their clients and worksite employees,
including questions concerning the ultimate liability for violations of
employment and discrimination laws. The Company's standard client service
agreement establishes a contractual division of responsibilities between the
Company and each client for various human resource matters, including
compliance with and liability under various governmental regulations.
However, as a result of the Company's status as a co-employer, the Company
may be subject to liability for violations of these or other laws despite
these contractual provisions and even if it does not participate in such
violations. Although such client service agreements generally provide that
the client is to indemnify the Company for any liability attributable to the
client's failure to comply with its contractual obligations and the
requirements imposed by law, the Company may not be able to collect on such a
contractual indemnification claim and thus may be responsible for satisfying
such liabilities. In addition, worksite employees may be deemed to be agents
of the Company, subjecting the Company to liability for the actions of such
worksite employees. See "--Financial Condition of Clients,"
"Business--Clients" and "--Industry Regulation."

POTENTIAL LEGAL LIABILITY

The management and administration of the delivery of health care and other
services entails inherent risks of liability. The Company may, from time to
time, in the ordinary course of its business, be subject to various claims,
suits and complaints relating to the provision of medical care, including
those related to denial of benefits to worksite employees and negligence in
credentialing of providers. In addition, as an employer, the Company may also
be subject to a wide variety of employment-related claims such as claims for
injuries, wrongful death, harassment, discrimination, wage and hours
violations and other matters. See "Business--Legal Proceedings."

RISK OF INADEQUATE INSURANCE

Although the Company carries professional liability insurance, there can
be no assurance that any such insurance carried by the Company or its
providers will be sufficient to cover any judgments, settlements or costs
relating to any present or future claims, suits or complaints or that
sufficient insurance will be available to the Company or such providers in
the future on satisfactory terms, if at all. If the insurance carried by the
Company or its providers is not sufficient to cover any judgments,
settlements or costs relating to any present or future claims, suits or
complaints, the Company's business, financial condition, results of
operations and liquidity could be materially adversely affected. See
"Business--Legal Proceedings."

COMPETITION

The PEO industry is highly fragmented, with approximately 1,100 companies
providing PEO services. The Company encounters competition from other PEOs
and from single-service and "fee for service" companies such as payroll
processing firms, insurance companies and human resource consultants. The
Company also competes directly with independent local and national entities
that offer managed behavioral health or workers' compensation services, as
well as with insurance carriers and other provider groups that have managed
care capabilities. In addition, the Company may encounter substantial
competition from new market entrants. Some of the Company's current and
future competitors may be significantly larger, have greater name recognition
and have greater financial, marketing and other resources than the Company.
There can be no assurance that the Company will be able to compete
effectively against such competitors in the future. See
"Business--Competition."

9
<PAGE>
MANAGEMENT DISCRETION REGARDING PROCEEDS OF THE OFFERING

The Company has not yet allocated a substantial portion of the net
proceeds of this offering to specific uses. Management will have broad
discretion as to the application of the offering proceeds. Pending the
Company's use of such proceeds for general corporate purposes and possible
acquisitions, such proceeds will be placed in short-term, interest-bearing,
investment-grade debt securities, certificates of deposit or direct or
guaranteed obligations of the United States. It is possible that the return
on such investments will be less than that which would be realized were the
Company immediately to use such funds for other purposes.

FINANCIAL BENEFITS TO PRINCIPAL SHAREHOLDERS

As a result of this offering, each of Carlos A. Saladrigas and Jose M.
Sanchez will beneficially own Common Stock having an aggregate market value
(based on an assumed offering price of $14.00) of approximately $32 million.
In addition, $700,000 of the net proceeds of the offering will be used to
purchase an option to repurchase the Company's headquarters building which is
held by an affiliate of Messrs. Saladrigas and Sanchez, and, upon repayment
of the Company's $1.2 million subordinated promissory note, Messrs.
Saladrigas and Sanchez will be released from their personal guaranties of
such indebtedness. See "Use of Proceeds" and "Certain Transactions."

CONTROL BY EXISTING SHAREHOLDERS

After this offering, the Company's officers, directors and principal
shareholders will beneficially own an aggregate of 5,799,999 shares of Common
Stock of the Company, constituting approximately 72.5% of the outstanding
shares of Common Stock (68.4% if the Underwriters' over-allotment option is
exercised in full). Accordingly, such persons will be in a position to
control actions that require the consent of a majority of the Company's
outstanding voting stock, including the election of directors. See "Principal
and Selling Shareholders."

ABSENCE OF PRIOR TRADING MARKET

Prior to this offering, there has been no public market for the Common
Stock. Although the Company has applied to have the Common Stock approved for
quotation on the Nasdaq National Market, there can be no assurance that an
active trading market will develop for the Common Stock or, if one does
develop, that it will be maintained. The initial public offering price of the
Common Stock will be negotiated between the Company and the representatives
of the Underwriters and may not be indicative of the market price of the
Common Stock after the offering. See "Underwriting."

POTENTIAL VOLATILITY OF STOCK PRICE

The market price of the shares of Common Stock could be highly volatile,
fluctuating in response to factors such as changes in the economy or the
financial markets, variations in the Company's operating results, failure to
achieve earnings consistent with analysts' estimates, announcements of new
services or market expansions by the Company or its competitors, and
developments relating to regulatory or other issues affecting the PEO or
managed care industry. In addition, the Nasdaq National Market generally, and
the health care sector in particular, have experienced and are likely in the
future to experience significant price and volume fluctuations which could
adversely affect the market price of the Company's Common Stock without
regard to the Company's operating performance.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of the Common Stock in the public market
following this offering could have an adverse effect on prevailing market
prices of the Common Stock. After this offering, the 2,200,000 shares offered
hereby will be freely tradeable without restriction, while approximately
3,738,750 additional shares of the Company's Common Stock will be eligible
for sale pursuant to Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"), subject to certain volume and other limitations. In
addition, certain holders of Common Stock will have registration rights for
an aggregate of up to 5,547,503 shares of Common Stock. However, all of the
Company's existing security

10
<PAGE>
holders (who, upon the completion of this offering, will beneficially own an
aggregate of approximately 5,799,999 shares of Common Stock) have agreed with
the Underwriters not to sell any of their shares for a period of 180 days
from the date of this Prospectus without the prior consent of Smith Barney
Inc. See "Shares Eligible for Future Sale."

ANTI-TAKEOVER EFFECT

Certain Florida legislation applicable to the Company may deter or
frustrate takeovers of the Company. Certain provisions of the Articles of
Incorporation and Bylaws of the Company which will be in effect upon
consummation of this offering may also deter takeovers of the Company. In
addition, upon consummation of the offering made hereby, the Company will be
authorized to issue 20,000,000 shares of preferred stock in one or more
series, having terms fixed by the Board of Directors without shareholder
vote, including voting, dividend or liquidation rights that could be greater
than or senior to the rights of holders of Common Stock. Issuance of these
shares could also be used as an anti-takeover device. The Company has no
current intentions or plans to issue any such preferred stock. See
"Description of Capital Stock."

DILUTION

Purchasers of the Common Stock offered hereby will experience immediate
and significant dilution of $10.66 per share in the net tangible book value of
their shares. See "Dilution."

11
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,000,000 shares of
Common Stock being offered by the Company hereby (assuming an offering price
of $14.00 per share, and after deducting estimated underwriting discounts and
commissions of $2.0 million, and estimated expenses of $700,000) are
estimated to be $25.3 million.

The Company intends to use approximately $1.2 million of the net proceeds
from this offering to retire the Company's subordinated promissory note
bearing interest at the U.S. Treasury bill rate as in effect from year to
year (7% at December 31, 1995) and the principal of which is payable in eight
equal quarterly installments beginning on March 31, 1998. The Company intends
to use $700,000 of the net proceeds from this offering to retire the
distribution payable related to the Company's repurchase of an option to
purchase the Company's headquarters previously held by an affiliate of
Messrs. Saladrigas and Sanchez. See "Certain Transactions."

The approximately $23.4 million of remaining net proceeds will be used for
working capital, general corporate purposes, and expansion of the Company's
operations including potential acquisitions. The Company does not, however,
currently have any understanding or arrangement regarding any potential
acquisition. Pending such uses, the Company intends to invest the net
proceeds of this offering in high-quality short-term, interest-bearing
investment-grade debt securities, certificates of deposit or direct or
guaranteed obligations of the United States.

Other than as described above, the Company has no current specific plan
for the use of the net proceeds of this offering. The principal reason for
conducting this offering is to enhance the Company's financial condition to
(i) permit the Company to promptly take advantage of favorable acquisition
opportunities, if any; (ii) increase its financial flexibility; and (iii)
obtain more favorable credit terms from the banks and insurance companies
with which it deals.

The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Shareholders. See "Principal and Selling
Shareholders."

DIVIDEND POLICY

The Company does not anticipate paying any cash dividends in the
foreseeable future, but intends instead to retain any future earnings for
reinvestment in its business. Any future determination as to the payment of
dividends will be made at the discretion of the Board of Directors of the
Company and will depend upon the Company's operating results, financial
condition, capital requirements, general business conditions and such other
factors as the Board of Directors deems relevant. In addition, the Company's
credit agreement prohibits the Company from paying dividends or making other
distributions on the Common Stock. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

12
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company at
December 31, 1995, the pro forma capitalization of the Company at December
31, 1995 assuming the conversion of the mandatorily reedemable Series A
Preferred Stock, and the pro forma capitalization of the Company at December
31, 1995 as adjusted to give effect to the sale of the shares of Common Stock
offered hereby at an assumed initial public offering price of $14.00 per
share and the application of the net proceeds from this offering as described
under "Use of Proceeds." This table should be read in conjunction with the
Consolidated Financial Statements of the Company and Notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
---------- ------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C>
Distribution payable ........................................ $ 700 $ 700 $ --
======= ======= =======
Current portion of long term borrowings ..................... $ 1,305 $ 1,305 $ 105
======= ======= =======
Long term borrowings, less current portion .................. $ 1,101 $ 1,101 $ 1,101
------- ------- -------
Mandatorily redeemable Series A Preferred Stock ............ 6,264 -- --
------- ------- -------
Common Stock and other stockholders' (deficit) equity (1):
Common stock; $.001 par value, 39,500,000 shares authorized,
4,956,066 shares issued and outstanding actual, 5,999,999
pro forma and 7,999,999 shares as adjusted ................. 5 6 8

Additional paid-in capital ................................. -- 6,263 31,601

Accumulated deficit ........................................ (4,756) (4,756) (4,756)
------- ------- -------
Total Common Stock and other stockholders'
(deficit) equity ........................................ (4,751) 1,513 26,853
------- ------- -------
Total capitalization ..................................... $ 2,614 $ 2,614 $27,954
======= ======= =======

<FN>
(1) Immediately prior to the completion of this offering, the Company will
amend its Articles of Incorporation to increase the number of authorized
shares of Common Stock to 60,000,000 and to provide for authorized shares
of preferred stock of 20,000,000. See "Description of Capital Stock."

(2) Gives effect to the conversion of the mandatorily redeemable Series A
Preferred Stock into 1,043,933 shares of Common Stock.

(3) Gives effect to the sale of 2,000,000 shares of Common Stock and the
application of the estimated net proceeds of $25.3 million (after
deducting estimated underwriting discounts and commissions of $2.0
million and estimated expenses of $700,000) as set forth in "Use of
Proceeds."
</FN>
</TABLE>

13
<PAGE>
DILUTION

At December 31, 1995, the Company had a net tangible deficit of
($4,868,438) or ($0.98) per share. Net tangible deficit per share is
determined by dividing net tangible deficit (tangible assets less liabilities
and redeemable preferred stock) by the 4,956,066 currently outstanding shares
of Common Stock. The effect of the conversion of the outstanding shares of
Series A Preferred Stock upon the consummation of this offering represents an
increase in net tangible book value of $6,263,610 or $1.21 per share. After
giving effect to the sale of the Common Stock offered hereby at an assumed
public offering price of $14.00 per share, without taking into account any
other deductions in net tangible book value after December 31, 1995, and
after deducting assumed underwriting discounts and commissions of $1,960,000
and estimated offering expenses of $700,000, the pro forma net tangible book
value per share of Common Stock would have been $3.34. This represents an
increase in net tangible book value of $3.11 per share of Common Stock to
existing shareholders attributable to new investors and an immediate dilution
of $10.66 (or 76.1%) per share of Common Stock to investors in the offering.
The following table illustrates this dilution per share:

Assumed public offering price per share of Common Stock ....... $14.00

Net tangible deficit per share of Common Stock
before the offering ........................................... ($0.98)

Increase in net tangible book value attributable to the
conversion of mandatorily redeemable Series A Preferred
Stock ........................................................ 1.21

Increase in net tangible book value per share
attributable to new investors ................................ 3.11
------
Pro forma net tangible book value per share of Common Stock
after the offering ............................................ 3.34
------
Dilution per share to new investors ............................ $10.66
======

Based on the same assumptions utilized in the table set forth above, the
following table summarizes, on a pro forma basis as of December 31, 1995, the
difference between the number of shares of Common Stock purchased from the
Company, the aggregate consideration paid and the average price per share of
Common Stock paid by new investors and by existing shareholders:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------------- ------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ---------- -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>

New Investors ........ 2,000,000 25.00% $28,000,000 80.66% $14.00
Existing Shareholders 5,999,999 75.00% 6,713,716 19.34% $ 1.12
--------- ------ ----------- -------
Total .............. 7,999,999 100.00% $34,713,716 100.00%
========= ====== =========== =======

</TABLE>

14
<PAGE>
SELECTED FINANCIAL DATA

The selected balance sheet data as of December 31, 1991 is derived from
unaudited financial statements. The selected statement of income data for the
year ended December 31, 1991 and the selected financial data for the years
ended December 31, 1992, 1993, 1994, and 1995 have been derived from the
audited consolidated financial statements of the Company. Consolidated
balance sheets at December 31, 1994 and 1995 and the related consolidated
statements of income, of changes in common stock and other stockholders
equity (deficit) and of cash flows for the three years ended December 31,
1995 and notes thereto appear elsewhere in this prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1991 1992 1993 1994 1995
---------- ---------- ----------- ----------- ----------
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues (1) ............................ $45,912 $86,029 $138,097 $191,533 $239,408
Direct costs:
Salaries, wages and employment taxes of
worksite employees ................... 40,716 74,854 121,180 168,874 212,479
Health care and workers' compensation . 3,418 6,817 8,954 10,349 12,340
State unemployment taxes and other .... 220 745 978 1,595 1,646
------- ------- -------- -------- --------
Total direct costs .................... 44,354 82,416 131,112 180,818 226,465
------- ------- -------- -------- --------
Gross profit ............................ 1,558 3,613 6,985 10,715 12,943
Operating expenses:
Administrative personnel ............... 648 1,476 3,155 3,999 6,268
Other general and administrative ...... 541 932 1,013 2,383 3,372
Sales and marketing .................... 260 277 640 1,376 1,724
Depreciation and amortization .......... 44 64 88 205 338
------- ------- -------- -------- --------
Total operating expenses .............. 1,493 2,749 4,896 7,963 11,702
------- ------- -------- -------- --------
Operating income ........................ 65 864 2,089 2,752 1,241
Nonrecurring loss on investment ........ (32) (480) 0 0 0
Interest (expense) income, net .......... (8) (3) (44) (19) 38
Other expenses .......................... (20) (41) 0 0 0
------- ------- -------- -------- --------
Income before taxes ..................... 5 340 2,045 2,733 1,279
Provision for income taxes .............. (2) (139) (704) (933) (469)
------- ------- -------- -------- --------
Net income .............................. $ 3 $ 201 $ 1,341 $ 1,800 $ 810
======= ======= ======== ======== ========
Net income per common and common
equivalent share (2) .................. -- $ 0.03 $ 0.20 $ 0.27 $ 0.13

Weighted average shares outstanding (2) 6,698 6,698 6,698 6,698 6,462

</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1991 (3) 1992 1993 1994 1995
--------- --------- ---------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working (deficit) capital ...................... $ (69) $ 294 $2,367 $ 4,003 $ 2,052
Total assets ................................... 2,281 4,369 9,482 14,787 17,819
Long term borrowings, including current portion 77 285 1,178 996 2,406
Other long term liabilities .................... 138 423 2,151 3,206 2,737
Mandatorily redeemable Series A Preferred Stock -- -- -- -- 6,264
Total common stock and other stockholders'
equity (deficit) ............................. 14 164 848 2,648 (4,751)
<FN>
- ----------
(1) Revenues include all amounts billed to clients for gross salaries and wages,
related employment taxes, and health care and workers' compensation coverage
of worksite employees.
(2) See Note 1 of Notes to Consolidated Financial Statements.
(3) Derived from unaudited financial statements.
</FN>
</TABLE>

15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Vincam, one of the largest PEOs in the industry, provides small and
medium-sized businesses with an outsourcing solution to the complexities and
costs related to employment and human resources. The Company's continuum of
integrated employment-related services consists of human resource
administration, employment regulatory compliance management, workers'
compensation coverage, health care and other employee benefits. The Company
establishes a co-employer relationship with its clients and contractually
assumes substantial employer responsibilities with respect to worksite
employees. In addition, the Company offers certain specialty managed care
services on a stand-alone basis to health and workers' compensation insurance
companies, HMOs, managed care providers and large, self-insured employers.

The Company's 1995 operating results were adversely affected by (i)
additional personnel costs of approximately $1.4 million which were primarily
related to the operation and management of Vincam's newly established
workers' compensation managed care arrangement ("WCMCA"), (ii) the loss of a
high margin contract with a significant behavioral managed care client
following that client's acquisition by a third party, which contract
accounted for $0.8 million of gross profit in 1994, and (iii) an investment
in corporate-level management infrastructure resulting in approximately $0.4
million of additional personnel costs.

The Company's WCMCA service agreements produced approximately $248,000 of
revenues in the month of January 1996, compared to a total of approximately
$570,000 for the full year 1995.

The Company's standard PEO services agreement provides for an initial one
year term, subject to termination by the Company or the client at any time
during the first year upon 30 days' prior written notice, and thereafter
annually. Revenues from professional employer services are based on a pricing
model that takes into account the gross pay of each employee and a mark-up
which includes the estimated costs of federal and state employment taxes,
workers' compensation, employee benefits and the human resource
administrative services, as well as a provision for profit. The specific
mark-up varies by client based on the workers' compensation classification of
the worksite employees and their eligibility for health care benefits.
Accordingly, the Company's average mark-up percentage will fluctuate based on
client mix, which cannot be predicted with any degree of certainty. Specialty
managed care revenues are generated from a variety of risk-bearing,
capitated, and fee-based arrangements.

The Company's revenues include all amounts billed to clients for gross
salaries and wages, related employment taxes, and health care and workers'
compensation coverage of worksite employees. The Company is obligated, as a
principal, to pay the gross salaries and wages, related employment taxes and
health care and workers' compensation costs of its worksite employees whether
or not the Company's clients pay the Company on a timely basis or at all. The
Company believes that including such amounts as revenues appropriately
reflects the responsibility which the Company bears for such amounts and is
consistent with industry practice.

The Company's primary direct costs are (i) salaries, wages, the employer's
portion of social security (FICA-O), Medicare premiums (FICA-M), federal
unemployment taxes (FUTA) and the Michigan Single Business Tax, (ii) health
care and workers' compensation costs, and (iii) state unemployment taxes and
other direct costs. The Company can significantly impact its gross profit
margin by actively managing the direct costs described in clauses (ii) and
(iii).

16
<PAGE>
Health care costs consist of medical insurance premiums, payments of and
reserves for claims subject to deductibles and the costs of vision care,
disability, employee assistance and other similar benefit plans. The
Company's health care benefit plans consist of a mixture of fully-insured,
minimum premium arrangements, partially self-insured plans and guaranteed
cost programs. Under minimum premium arrangements and partially self-insured
plans, liabilities for health care claims are recorded based on the Company's
health care loss history.

Workers' compensation costs include medical costs and indemnity payments
for lost wages, administrative costs and insurance premiums related to the
Company's workers' compensation coverage. Currently, the Company is insured
under a large deductible insurance plan. Under this plan, the Company is
obligated to reimburse its insurance carrier for a portion of the insurance
risk related to workers' compensation claims up to a predetermined deductible
per occurrence of $500,000. Workers' compensation costs also include reserves
for claims which have been incurred but not reported and for anticipated loss
development.

State unemployment taxes are based on rates which vary from state to
state. Generally they are subject to certain minimum rates, but the aggregate
rates payable by an employer are affected by the employer's claims history.
The Company controls unemployment claims by aggressively contesting unfounded
claims and, when possible, quickly returning employees to work by reassigning
them to other worksites.

The Company's primary operating expenses are administrative personnel
expenses, other general and administrative expenses, and sales and marketing
expenses. Administrative personnel expenses include compensation, fringe
benefits and other personnel expenses related to internal administrative
employees. Other general and administrative expenses include rent, office
supplies and expenses, legal and accounting fees, insurance and other
operating expenses. Sales and marketing expenses include compensation of
sales executives and the marketing staff, as well as marketing and
advertising expenses.

The Company's profitability is largely dependent upon its success in
managing its controllable direct costs. The Company manages its controllable
direct costs through its use of (i) its proprietary managed care system,
which includes provider networks, utilization review and case management,
(ii) educational programs designed to reduce the severity and frequency of
workplace accidents, and (iii) a variety of other techniques, including
drug-free workplace programs, involvement in hiring, disciplinary and
termination decisions, adjudication of unemployment claims, and reassignment
of laid off workers.

Many of the federal and state laws and regulations relating to labor, tax
and employment matters applicable to employers were enacted prior to the
development of non-traditional employment relationships and, accordingly, do
not specifically address the obligations and responsibilities of PEOs. The
IRS is conducting a Market Segment Study of the PEO industry, focusing on
selected PEOs (not including Vincam), in order to examine the relationships
among PEOs, worksite employees and owners of client companies. If the IRS
concludes that PEOs are not "employers" of certain worksite employees for
purposes of the Code, the tax qualified status of the Company's 401(k) plan
could be revoked, its cafeteria plan may lose its favorable tax status, and
the Company may no longer be able to assume the client company's federal
employment tax withholding obligations. If the loss of qualified tax status
for the Company's 401(k) plan or cafeteria plan is applied retroactively,
employees' vested account balances would become taxable immediately, the
Company would lose its tax deductions to the extent the contributions were
not vested, the plan trust would become a taxable trust and penalties could
be assessed. In such a scenario, the Company would face the risk of client
dissatisfaction as well as potential litigation, and its financial condition,
results of operations and liquidity could be materially adversely affected.
The Company is unable to predict the timing or nature of the findings of the
Market Segment Study Group or the ultimate outcome of such conclusions or
findings. See "Industry Regulation" and "Risk Factors--Risk of Loss of
Qualified Status for Certain Tax Purposes."

The Company, among others, is currently a defendant in a wrongful death
suit filed by the wife and children of a deceased worksite employee. The
plaintiffs seek damages in excess of $10 million. Discovery in the proceeding
has been stayed pending the Court's determination of whether the plaintiffs
adequately stated a cause of action against the Company and the client
company which is a co-defendant. The Company believes that if the lawsuit is
adversely determined, the Company will be

17
<PAGE>
entitled to indemnification from the client or its general/umbrella liability
insurance carrier. While there can be no assurance that the ultimate outcome
of this lawsuit will not have a material adverse effect on the Company's
financial condition and results of operations, management believes, based on
consultations with the Company's counsel, that the outcome of this lawsuit
will not have such an effect. See "Business--Legal Proceedings."

RESULTS OF OPERATIONS

The following table sets forth, for each of 1993, 1994 and 1995, certain
selected income statement data expressed as a percentage of revenues:

<TABLE>
<CAPTION>
AS A PERCENT OF REVENUES
-------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenues ....................................................... 100.0% 100.0% 100.0%
Direct costs:
Salaries, wages and employment taxes of worksite employees ... 87.7% 88.2% 88.8%
Health care and workers' compensation ......................... 6.5% 5.4% 5.2%
State unemployment taxes and other ............................ 0.7% 0.8% 0.7%
----------- ----------- -----------
Total direct costs ........................................... 94.9% 94.4% 94.6%
----------- ----------- -----------
Gross profit ................................................... 5.1% 5.6% 5.4%
----------- ----------- -----------
Operating expenses:
Administrative personnel ...................................... 2.3% 2.1% 2.6%
Other general and administrative .............................. 0.7% 1.2% 1.4%
Sales and marketing ........................................... 0.5% 0.7% 0.7%
Depreciation and amortization ................................. 0.1% 0.1% 0.1%
----------- ----------- -----------
Total operating expenses ..................................... 3.5% 4.2% 4.9%
----------- ----------- -----------
Income before taxes ............................................ 1.5% 1.4% 0.5%
Provision for income taxes ..................................... 0.5% 0.5% 0.2%
----------- ----------- -----------
Net income ..................................................... 1.0% 0.9% 0.3%
=========== =========== ===========
</TABLE>

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

The Company's revenues were $239.4 million for the year ended December 31,
1995, compared to $191.5 million for the year ended December 31, 1994,
representing an increase of $47.9 million, or 25.0%. This increase was due
primarily to an increased number of PEO clients and worksite employees.
Between December 31, 1994 and December 31, 1995, the number of PEO clients
increased 18.9%, from 285 to 339. The number of worksite employees increased
32.6% over the same period, from 8,590 worksite employees to 11,391. In
addition, the Company earned approximately $570,000 of revenues from its
workers' compensation managed care services in 1995, the first year such
services were offered.

Salaries, wages and employment taxes of worksite employees were $212.5
million for 1995, compared to $168.9 million for 1994, representing an
increase of $43.6 million, or 25.8%. Salaries, wages and employment taxes of
worksite employees were 88.8% of revenues for 1995, compared to 88.2% for
1994. Salaries, wages and employment taxes of worksite employees increased as
a percentage of revenues as a result of a change in the Company's client mix
towards clients having more favorable workers' compensation risk profiles
which allows the Company to charge a lower markup.

Health care and workers' compensation costs were $12.3 million for 1995,
compared to $10.3 million for 1994, representing an increase of $2.0 million,
or 19.2%. Health care and workers' compensation costs were 5.2% of revenues
for 1995, compared to 5.4% for 1994. This decrease was due primarily to
improved efficiency in managing the frequency and severity of workers'
compensation claims.

State unemployment taxes and other direct costs were relatively unchanged
from 1994 to 1995. State unemployment taxes and other direct costs were 0.7%
of revenues for 1995, compared to 0.8% for 1994. This decrease is due
primarily to improved efficiency in managing state unemployment insurance
claims.

18
<PAGE>
Gross profit was $12.9 million for 1995, compared to $10.7 million for
1994, representing an increase of $2.2 million, or 20.8%. Gross profit was
5.4% of revenues for 1995, compared to 5.6% for 1994. This decrease was due
primarily to the loss of a high margin contract with a significant behavioral
health client in the third quarter of 1994 as a result of that client's
acquisition by a third party. This contract represented approximately $0.8
million in gross profit during 1994.

Administrative personnel expenses were $6.3 million for 1995, compared to
$4.0 million for 1994, representing an increase of $2.3 million, or 56.8%. Of
this increase, approximately $1.4 million was primarily attributable to
increased staffing for the Company's workers' compensation managed care
services, which were made available to external clients for the first time in
1995. The balance was primarily attributable to an increase in corporate
management personnel and other general and administrative expenses related to
the growth described above. Administrative personnel expenses were 2.6% of
revenues for 1995, compared to 2.1% for 1994.

Other general and administrative expenses were $3.4 million for 1995,
compared to $2.4 million for 1994, representing an increase of $1.0 million,
or 41.5%. Other general and administrative expenses were 1.4% of revenues for
1995, compared to 1.2% for 1994.

Sales and marketing costs were $1.7 million for 1995, compared to $1.4
million for 1994, representing an increase of $0.3 million, or 25.3%, but as
a percentage of revenue remained at 0.7%. The increase reflects the addition
of sales executives and a senior vice president of sales and marketing.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

The Company's revenues were $191.5 million for 1994, compared to $138.1
million for 1993, representing an increase of $53.4 million, or 38.7%. This
increase was due primarily to an increased number of clients and worksite
employees in 1994. Between December 31, 1993 and December 31, 1994, the
number of PEO clients increased 19.2%, from 239 to 285. The number of
worksite employees increased 30.4% over the same period, from 6,587 worksite
employees to 8,590.

Salaries, wages, and employment taxes of worksite employees were $168.9
million for 1994, compared to $121.2 million for 1993, representing an
increase of $47.7 million, or 39.4%. Salaries, wages, and employment taxes of
worksite employees were 88.2% of revenues for 1994, compared to 87.7% for
1993. Salaries, wages and employment taxes of worksite employees increased as
a percentage of revenues as a result of a change in the Company's client mix
towards clients having more favorable workers' compensation risk profiles
which allows the Company to charge a lower markup.

Health care and workers' compensation costs were $10.3 million for 1994,
compared to $8.9 million for 1993, representing an increase of $1.4 million,
or 15.6%. Health care and workers' compensation costs were 5.4% of revenues
for 1994, compared to 6.5% for 1993. This decrease is due primarily to
improved claims loss experience, coupled with the conversion to a large
deductible policy. In 1993, the Company's workers' compensation policy was a
loss-sensitive retrospectively rated plan which provided for retroactive
premium adjustments based on actual loss experience. Since January 1994, the
Company has been insured for workers' compensation benefits under a large
deductible insurance plan. Under this plan, the Company is obligated to pay
workers' compensation claims up to a predetermined deductible per occurrence
($500,000) and in the aggregate $5,250,000.

State unemployment taxes and other direct costs were $1.6 million for
1994, compared to $1.0 million for 1993, representing an increase of $0.6
million, or 63.1%. State unemployment taxes and other direct costs were 0.8%
of revenues for 1994, compared to 0.7% for 1993.

Gross profit was $10.7 million for 1994, compared to $7.0 million for
1993, representing an increase of $3.7 million, or 53.4%. Gross profit was
5.6% of revenues for 1994, compared to 5.1% for 1993. This increase is due
primarily to the increase in revenues as described above, and the reduction
in certain direct costs as a percentage of revenues as described above.

Administrative personnel expenses were $4.0 million for 1994, compared to
$3.2 million for 1993, representing an increase of approximately $0.8
million, or 26.8%. Administrative personnel expenses were 2.1% of revenues
for 1994, compared to 2.3% for 1993. This increase was related to growth of
the Company.

19
<PAGE>
Other general and administrative expenses were $2.4 million for 1994,
compared to $1.0 million for 1993, representing an increase of $1.4 million,
or 135.2%. Other general and administrative expenses were 1.2% of revenues
for 1994, compared to 0.7% for 1993. This increase was related to growth of
the Company.

Sales and marketing costs were $1.4 million for 1994, compared to $0.7
million for 1993, representing an increase of $0.7 million, or 115.0%. Sales
and marketing costs were 0.7% of revenues for 1994, compared to 0.5% for
1993. During 1994, the Company retained an advertising agency and initiated
its first advertising and marketing campaign which included both print and
electronic media advertising.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Company had working capital of $2.1 million,
compared to $4.0 million at December 31, 1994. The decrease was primarily due
to the classification of the Company's $1,200,000 subordinated promissory
note and $700,000 payable related to the repurchase option on the Company's
land and building as current as the result of this offering. The Company's
primary short-term liquidity requirements relate to the Company's letter of
credit requirements under its workers' compensation policies, acquisition of
office and computer equipment to support its growth, and the payment of
current tax obligations. The Company had $5.0 million in cash at December 31,
1995. Of this amount, $4.1 million was restricted under the terms of the
Company's revolving credit facility and letters of credit thereunder, which
letters of credit secure payment of workers' compensation claims. The
remainder of the cash and cash equivalents is available to the Company for
general corporate purposes including, but not limited to, current working
capital requirements, expenditures related to the continued expansion of the
Company's business through sales force additions and potential acquisitions,
capital expenditures and repayments of existing indebtedness. The Company has
no significant long-term debt repayment requirements.

Net cash provided by operating activities was $1.5 million for 1995,
compared to $0.5 million in 1994. The collateral requirements on the
Company's workers' compensation policies are an integral part of the
Company's liquidity from operating activities. Under the terms of its
revolving credit facility, the Company was able to obtain an additional $3.0
million of letters of credit without an additional collateral requirement.
This contributed to a small decrease in restricted cash of $0.2 million
during 1995, compared to an increase of $2.3 million during 1994. Increases
and decreases in the Company's accounts receivable and accrued salaries,
wages, and payroll taxes are subject to fluctuations depending on the
proximity of the closing date of the reporting period to that of the payroll
cycle.

Net cash used in investing activities was $0.4 million for 1995, compared
to $0.9 million in 1994. Cash used in investing activities is related to the
purchases of property and equipment to support the Company's growth. During
1995, the Company also acquired certain client contracts from an unrelated
PEO.

Net cash used in financing activities was $0.9 million in 1995, compared
to $0.2 million in 1994. During 1995, the Company and its stockholders
entered into an Agreement and Plan of Recapitalization whereby the Company's
stockholders exchanged a portion of their shares of Common Stock for Series A
Preferred Stock, incurring $445,150 of transaction costs. The Company also
acquired 249,342 shares of its Common Stock from a minority shareholder
through a cash payment of $300,000 and the issuance of a $1.2 million
subordinated promissory note, which will be retired with a portion of the
proceeds of this offering. See "Use of Proceeds" and Note 7 to Notes to
Consolidated Financial Statements.

The Company has a revolving credit facility with Fleet National Bank of
Massachusetts ("Fleet Bank") providing for a $10.0 million revolving line of
credit of which (i) an aggregate of $8.0 million is available for standby
letters of credit and revolving credit loans for working capital purposes,
such working capital loans not to exceed $1.0 million, and (ii) $2.0 million
is available to finance acquisitions. The Company uses letters of credit
primarily to secure its obligations to reimburse its workers' compensation
insurance carrier for workers' compensation payments subject to the policy
deductible. Borrowings are subject to a borrowing base determined by eligible
accounts receivable and bear interest

20
<PAGE>
at prevailing rates based on Fleet Bank's Prime Rate or Eurodollar Rate. The
facility is secured by substantially all of the Company's assets (including
accounts receivable and $4.0 million in cash or cash equivalents) other than
the Company's headquarters building. In addition, Carlos Saladrigas and Jose
Sanchez have guaranteed an aggregate of $2.0 million of the Company's
indebtedness under such facility. Revolving credit loans and standby letters
of credit mature December 31, 1996 and acquisition loans are payable over 36
months from the date of draw. Draws can be made through December 31, 1996 and
mature not later than December 31, 1999. The credit facility contains
covenants that, among other things, limit the amount of total consolidated
debt and liens, require the maintenance of certain consolidated financial
ratios, prohibit dividends and similar payments, and restrict capital
expenditures, mergers, dispositions of assets and certain business
acquisitions. The Company is required to pay an unused facility fee of
one-half of 1% on the unused portion of the $2.0 million credit facility
which is available to finance acquisitions. See Note 5 of Notes to
Consolidated Financial Statements.

In addition, Fleet Bank has provided to the Company a commitment to enter
into a replacement credit facility subject to the completion of this
offering, which would provide for a $13.0 million credit facility, of which
$5.0 million would be available for acquisition purposes and containing other
terms substantially similar to the existing credit facility. The personal
guaranties of Messrs. Saladrigas and Sanchez would be terminated in
connection with such replacement credit facility.

Although the Company currently has no significant capital commitments, the
Company expects to have $750,000 of capital expenditures in 1996, primarily
for computer and office equipment. During 1995 and 1994, the Company paid
approximately $422,000 and $737,000, respectively, in connection with the
acquisition of property and equipment, substantially all of which related to
office and computer equipment. The Company's long-term liquidity needs are
currently limited to debt service on the Company's outstanding long-term
obligations, including capital leases. See Notes 5 and 12 of Notes to
Consolidated Financial Statements. The Company anticipates that the proceeds
of this offering, cash flows from operations and borrowing availability under
the expected replacement Fleet Bank credit facility will be sufficient to
satisfy the Company's liquidity and working capital requirements for the
foreseeable future.

INFLATION

The Company believes the effects of inflation have not had a significant
impact on its results of operations or financial condition.

21
<PAGE>
BUSINESS

GENERAL

INDUSTRY

According to the U.S. Small Business Administration, there were
approximately 5.1 million businesses in the United States with fewer than 500
employees in 1992. Collectively, these businesses employed an estimated 49
million employees, and represented approximately $1.1 trillion in aggregate
annual payroll, implying a potential market size for PEO services of $1.3
trillion (assuming an average mark-up of approximately 20%). The PEO industry
began to evolve in the early 1980s largely in response to the burdens placed
on small to medium-sized employers by increasing employment costs, an
increasingly complex legal and regulatory environment and high benefit and
workers' compensation costs. While various service providers, such as payroll
processing firms, benefits and safety consultants and temporary services
firms, are available to assist these businesses with specific tasks, these
organizations do not typically provide a comprehensive range of
employment-related services. PEOs address this market void. Because PEOs
enter into agreements with numerous small to medium-sized employers, they can
achieve economies of scale as professional employers and perform
employment-related functions at a level typically available only to large
corporations which have substantial resources to devote to human resources
management.

The PEO industry has experienced significant growth in recent years.
Staffing Industry Analysts, Inc. estimates that gross revenues in the PEO
industry grew from $5.0 billion in 1991 to $13.8 billion in 1995,
representing a compounded annual growth rate of approximately 29%. The
Company believes that the growth in the number of small businesses in the
United States, the low market penetration of the PEO industry, and the
increasing willingness of businesses to outsource non-core activities and
functions has contributed to the growing demand for PEO services. The PEO
industry is highly fragmented, with approximately 1,100 PEOs in operation in
1995. The Company believes that increasing industry regulatory complexity and
the increasing capital requirements associated with developing larger service
delivery infrastructures and management information systems should lead to
significant consolidation opportunities in the PEO industry.

STRATEGY

The Company intends to further strengthen its position as an industry
leader by pursuing the following business strategies:

/bullet/ PROVIDE EMPLOYERS WITH COMPREHENSIVE OUTSOURCING SOLUTIONS TO
HUMAN RESOURCE NEEDS. By offering a broad and increasing range of high
quality services, the Company believes it is attractive to

22
<PAGE>
employers who are seeking a single-source solution to their human resource
needs. Once a relationship is established, the Company's direct distribution
channels afford access to both the client and the worksite employee. Through
these distribution channels, the Company can add new services and products
which provide additional revenue sources and improve margins. These
comprehensive services foster long-term relationships which promote a high
level of client loyalty and retention, raise competitive barriers, and
generate a recurring revenue stream.

/bullet/ TARGET MEDIUM-SIZED CLIENTS. The Company targets and tailors its
services to meet the needs of medium-sized businesses (with 20 to 500
employees). As of December 31, 1995, the Company's PEO clients had an average
of approximately 34 worksite employees, compared to an estimated 1994
industry-wide average of 13 worksite employees. The Company believes that
medium-sized businesses are more likely than smaller businesses to (i) desire
the wide range of employee benefits offered by Vincam, (ii) recognize the
costs of human resource administration, (iii) have greater employment-related
regulatory burdens, and (iv) be financially stable. In addition, the Company
believes that targeting medium-sized clients results in greater marketing
efficiency, lower business turnover due to client business failure, and less
exposure to credit risk.

/bullet/ AGGRESSIVELY MANAGE HEALTH CARE AND WORKERS' COMPENSATION COSTS
THROUGH THE DEVELOPMENT OF VERTICALLY INTEGRATED MANAGED CARE
SYSTEMS. Historically, more than 50% of the Company's controllable direct
costs (costs other than salaries, wages and employment taxes of worksite
employees) relate to the provision of health care and workers' compensation
benefits. Consequently, the Company's ability to manage the health care and
workers' compensation costs of its worksite employees is critical to its
success and profitability. To more effectively manage the cost and quality of
care, the Company has developed and is continuing to strengthen its
specialized health care provider networks and strategic alliances with health
care providers in regional markets in which the Company has a significant
presence. The Company's goal is the complete integration of all worksite
employee medical management into a comprehensive 24-hour medical management
program that coordinates group health and workers' compensation. The Company
further capitalizes on its managed care expertise by offering specialty
managed care services on a stand-alone basis to health insurance and workers'
compensation insurance companies, HMOs, managed care providers and large
self-insured employers.

/bullet/ DEVELOP PROPRIETARY INFORMATION SYSTEMS. Vincam continues to
develop its proprietary information systems which enable the Company to
integrate all aspects of the administration of human resources, workers'
compensation and employee benefits, thereby providing a significant
competitive advantage in managing costs and delivering a full range of high
quality services. Benefits of the Company's user-friendly systems include
real-time case management, provider credentialling, costing of IBNRs, and the
ability to track outcome data and facilitate provider benchmarking.

/bullet/ INCREASE PENETRATION OF EXISTING MARKETS. The Company intends to
increase its client base in its existing markets by hiring additional sales
personnel and increasing sales productivity. Emphasis on increasing
penetration in existing regions will allow the Company to enhance its current
economies of scale, principally through its managed care activities, thereby
increasing cost effectiveness and profit margins.

/bullet/ EXPAND THROUGH ACQUISITIONS. The PEO industry is highly
fragmented, with approximately 1,100 PEOs operating in the United States,
resulting in opportunities for consolidation. The Company believes that this
industry consolidation will be driven by increasing industry and regulatory
complexity, increasing capital requirements and the significant economies of
scale available to PEOs with a regional concentration of clients. The Company
intends to expand in current markets and to enter selected new markets by
acquiring established quality PEOs to provide a platform for future regional
consolidation. The Company has identified certain fundamental attributes
which characterize attractive potential new markets such as (i) proximity to
a major metropolitan area, (ii) regulatory receptivity to PEOs, (iii) prior
successful introduction of the PEO concept, (iv) favorable economic
conditions, (v) high workers' compensation rates and health care costs, and
(vi) a high concentration of small to medium-sized businesses.

SERVICES

Vincam provides professional employer services through four core
activities: (i) human resource administration, (ii) employer regulatory
compliance management, (iii) workers' compensation cost

23
<PAGE>
containment and safety management, and (iv) employee benefits administration.
By engaging Vincam to provide these services, clients are able to concentrate
their resources on their core businesses. In addition, the Company leverages
its managed care expertise by offering certain specialty managed care
services on a stand-alone basis to health and workers' compensation insurance
companies, HMOs, managed care providers and large self-insured employers.

HUMAN RESOURCE ADMINISTRATION. Vincam's comprehensive human resource
services reduce the employment-related administrative burdens faced by its
clients, and provide worksite employees with a wide array of benefits
typically offered by large employers. As a co-employer, the Company is
responsible for payroll and attendant record-keeping, payroll tax deposits,
payroll tax reporting, employee file maintenance, unemployment claims, and
monitoring and responding to changing regulatory requirements. Vincam
develops and administers customized personnel policies and procedures for
each of its clients, relating to, among other things, recruiting, performance
appraisals, discipline and terminations. The Company also provides
recruiting, orientation, training, counseling, substance abuse awareness and
outplacement services for worksite employees.

EMPLOYER REGULATORY COMPLIANCE MANAGEMENT. Under its standard contract,
the Company assumes responsibility for complying with many employment-related
regulatory requirements. In addition, Vincam assists its clients in
understanding and complying with other employment-related requirements for
which the Company does not assume responsibility. Laws and regulations
applicable to employers include state and federal tax laws, state workers'
compensation laws, state unemployment laws, occupational safety laws,
immigration laws, and discrimination, sexual harassment and other civil
rights laws. When a claim arises, the Company provides assistance through
either its in-house legal department or outside counsel. In order to respond
to such claims in a cost-effective manner, the Company has entered into a
capitated fee arrangement with a national law firm specializing in employment
and labor issues.

WORKERS' COMPENSATION COST CONTAINMENT AND SAFETY MANAGEMENT. Workers'
compensation is a state-mandated, comprehensive insurance program that
requires employers to fund medical expenses, lost wages and other costs that
result from work-related injuries and illnesses, regardless of fault and
without any copayment by the employee. See "Industry Regulation." The Company
seeks to control its workers' compensation costs through comprehensive risk
evaluation of prospective clients, the prevention of workplace injuries,
early intervention in each employee injury, intensive management of the
medical costs related to such injuries and the prompt return of employees to
work. The Company seeks to prevent workplace injuries by implementing a wide
variety of training, safety and mandatory drug-free workplace programs
(including pre-employment, random and post-accident drug testing). Specific
components of the Company's proprietary managed care system include the
prompt identification and reporting of injuries, the use of
Company-designated health care providers, utilization and fee review,
telephonic claims and case management, auditing of bills and other techniques
designed to reduce medical costs. The Company's efforts to quickly return
employees to work involve both rehabilitation services and the placement of
employees in transitional, modified-duty positions until they are able to
resume their former positions.

EMPLOYEE BENEFITS AND RELATED ADMINISTRATION. Vincam currently offers to
worksite employees an employee benefits package which includes several health
care options, such as preferred provider organizations ("PPOs"), HMOs, and
exclusive provider organizations ("EPOs"). Supplemental benefit programs
offer dental care, vision care, prescription drugs, an employee assistance
plan, mental health benefits and several life and disability insurance
options. Vincam also offers 401(k) retirement savings and cafeteria plans to
its eligible employees. The Company delivers participant benefits to worksite
employees and monitors and reviews claims for loss control purposes. The
Company believes that its ability to provide and administer a wide variety of
employee benefits on behalf of its clients tends to mitigate the competitive
disadvantage small and medium-sized businesses normally face in the areas of
employee benefit cost control and employee recruiting and retention.

SPECIALTY MANAGED CARE SERVICES. The growth in the Company's core PEO
business has provided Vincam with significant expertise and experience in
managing a wide range of employee health care and disability costs. In order
to further capitalize on that expertise, the Company offers a variety of
specialty managed care services (such as employee assistance programs,
behavioral health managed care,

24
<PAGE>
comprehensive workers' compensation managed care services, risk management
and loss containment services) on a stand-alone basis to health and workers'
compensation insurance companies, HMOs, managed care providers and large
self-insured employers. The Company's employee assistance program and
behavioral health managed care services provide a client company's employees
(which may or may not be worksite employees provided by the Company) with
access to a network of professionals, established and monitored by the
Company, who can address behavioral health issues and assist employees with
personal problems such as alcohol or drug abuse, financial or legal concerns
and marriage or family problems. The Company's workers' compensation managed
care services, risk management services and loss containment services include
(i) providing claim management, reporting and processing, (ii) coordination
of all procedures for handling injuries, (iii) development of safety
programs, supervisory training in safety techniques and self-inspection, (iv)
implementation of medical provider networks, (v) investigation of fraudulent
claims, and (vi) monitoring of all continuing claims and return-to-work
programs. These services are provided from the Company's headquarters by
Company employees.

The Company believes that the continued expansion of its specialty managed
care division will (i) enhance its leverage in negotiating provider
arrangements and create greater economies of scale, (ii) increase profit
margins by using existing service delivery infrastructures to generate
additional revenue, and (iii) benefit the Company's PEO operations by making
the Company's specialty managed care services more cost-effective, innovative
and competitive. The Company believes that the continued evolution of
Vincam's specialty managed care services could require structural and
organizational modifications to the Company's traditional relationships with
other participants in the health care industry. For example, in 1994, Vincam
formed a strategic alliance with HIP Health Plans of Florida (a Florida HMO)
as part of its strategy to establish the first workers' compensation managed
care arrangement to be certified in every county in the State of Florida. The
Company expects that its ability to expand its specialty managed care
services outside of Florida will also require licensure or a restructuring of
all or certain aspects of its Florida operating structure. See "Risk
Factors--Expansion into Additional States" and "Industry Regulation."

CLIENTS

The Company and its clients are often referred to as co-employers because
each is responsible for certain specified employer-related obligations. The
division of applicable responsibilities is generally as follows:

25
<PAGE>
<TABLE>
<CAPTION>
VINCAM CLIENT JOINT
------ ------ -----
<S> <C> <C>
/bullet/ Payment of payroll, tax /bullet/ Supervision of job-specific /bullet/ Implementation of policies and
reporting and payment (state activities of worksite employees, practices relating to the
and federal withholding, including designation of job employer/employee relationship
Federal Insurance Contribu- descriptions and duties and /bullet/ Selection of fringe benefits,
tions Act ("FICA"), Federal responsibilities including employee leave policies
Unemployment Tax Act /bullet/ Assignment to, and ownership of, (other than as controlled by the
("FUTA"), and state unem- all intellectual property rights Family and Medical Leave Act of
ployment) /bullet/ Compliance with Code provisions 1993 or state law)
/bullet/ Hiring, terminating and regarding benefits discrimination /bullet/ Employer liability under workers'
disciplining of worksite /bullet/ Product liability compensation laws
employees /bullet/ Professional liability or /bullet/ Compliance with Title VII of the
/bullet/ Workers' compensation malpractice Civil Rights Act of 1964, the Age
compliance, procurement, /bullet/ Compliance with OSHA regulations, Discrimination in Employment Act,
management and reporting state and local government the Federal Drug Free Workplace
/bullet/ Employee benefit contracting provisions, Act (and any state or local
procurement, administration professional licensing equivalent), the Fair Labor
and payment requirements and fidelity bonding Standards Act and similar state
/bullet/ Compliance with Immigration requirements legislation and the Americans
Reform and Control Act and /bullet/ Negligent or tortious conduct of with Disabilities Act
Consumer Credit Protection worksite employees acting under /bullet/ Determination of salaries and
Act, as well as monitoring the direction and control of the wages of worksite employees
changes in other government client
regulations governing the
employer/employee relation-
ship and updating the
client when necessary
</TABLE>

The Company's standard PEO services agreement provides for an initial one
year term, subject to termination by the Company or the client at any time
during the first year upon 30 days' prior written notice, and thereafter
annually. Revenues from professional employer services are based on a pricing
model that takes into account the gross pay of each employee and a mark-up
which includes the estimated costs of federal and state employment taxes,
workers' compensation, employee benefits and the human resource
administrative services, as well as a provision for profit. The Company
includes in its revenues all amounts billed to clients for gross payroll and
wages, related employment taxes and health care and workers' compensation
coverage. The specific mark-up varies by client based on the workers'
compensation classification of the worksite employees and their eligibility
for health care benefits. Accordingly, the Company's average mark-up
percentage will fluctuate based on client mix, which cannot be predicted with
any degree of certainty.

At December 31, 1995, Vincam served approximately 340 PEO client companies
and had nearly 11,400 active worksite employees resulting in an average of 34
worksite employees per PEO client. No single client accounted for more than
4% of Vincam's 1995 revenues. However, approximately 77% of the Company's
1995 revenues were derived from the South Florida market. See "Risk
Factors--Geographic Market Concentration." The Company's PEO client base is
broadly distributed throughout a wide variety of industries. As of December
31, 1995, Vincam's approximate worksite employee and PEO client company
distribution by major Standard Industrial Classification code as a percentage
of the total is set forth below:

26
<PAGE>
<TABLE>
<CAPTION>
INDUSTRY GROUP WORKSITE EMPLOYEES PEO CLIENTS
- ------------------------------------------------ ----------------------- ----------------
<S> <C> <C>
Services ....................................... 31% 31%
Manufacturing .................................. 27% 19%
Transportation, Communication, & Utilities .... 13% 10%
Retail Trade ................................... 11% 18%
Wholesale Trade ................................ 10% 13%
Agriculture (Landscaping) ...................... 3% 2%
Finance, Insurance, Real Estate ................ 2% 4%
Construction ................................... 2% 4%
</TABLE>

The number of worksite employees employed by the Company at the end of
each of 1991, 1992, 1993, 1994 and 1995, was 2,452, 4,244, 6,587, 8,590 and
11,391, respectively. There can be no assurance that the number of worksite
employees employed by the Company will continue to grow at the same rate or
that such number will not decrease.

Vincam has benefited from a high level of client retention, resulting in a
significant recurring revenue stream. During 1994, Vincam retained 191 of the
239 clients it began the year with, and during 1995, it retained 243 of 285
clients, resulting in client retention rates for 1994 to 1995 and 1995 to
1996 of 80% and 85%, respectively. The client retention rate is calculated by
determining the percentage of clients which remained with the Company from
the beginning of the year into the following year, including clients which
may have completed the first year of their agreements with the Company during
the year, but excluding clients which terminated their engagement of the
Company within the same year as such engagement commenced. Of the 104 and 106
new clients which engaged the Company during 1994 and 1995, respectively, ten
of such clients in each year terminated their engagement of the Company
during the same year in which they commenced such engagement. Client
attrition experienced by Vincam is attributable to a variety of factors,
including (i) client nonrenewal due to price or service dissatisfaction, (ii)
client business failure or downsizing, (iii) termination by Vincam resulting
from the client's inability to make timely payments, and (iv) sale or
acquisition of the client.

SALES AND MARKETING

The Company markets its services through a direct sales force of 19 sales
executives, as of December 31, 1995, each of whom reports to one of the
Company's three area presidents. The Company attributes the high productivity
of its sales executives to their average of approximately eight years of
experience in fields related to one or more of the Company's core services.
The background of the Company's sales executives includes experience in
industries such as payroll services, health insurance, temporary services and
workers' compensation insurance. The Company's sales materials emphasize its
broad range of high quality services and the resulting benefits to clients
and worksite employees. The Company's sales and marketing strategy is to hire
additional sales executives in its existing markets and to increase sales
productivity.

Vincam generates sales leads from two primary sources: direct sales
efforts and referrals. These leads result in initial presentations to
prospective clients. Vincam's sales executives then gather information about
the prospective client and its employees, including job classification,
workers' compensation claims history, health insurance claims history, salary
and the desired level of employee benefits. These various factors are
reviewed in the context of Vincam's pricing model and client selection
guidelines. A client proposal is prepared for acceptable clients.

This prospective client screening process plays a vital role in
controlling the Company's costs and limiting exposure to liability. Once a
prospective client accepts Vincam's proposal, the new client is quickly
incorporated into the Company's system. A Company human resources manager
then assumes responsibility for administering the client's personnel and
benefits, coordinating the Company's response to the client's needs for
administrative support and responding to any questions or problems
encountered by the client.

INFORMATION TECHNOLOGY

The Company's integrated, state-of-the-art information systems provide a
competitive advantage in managing costs and delivering comprehensive high
quality services. The Company's proprietary systems

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allow real time reporting of worksite accidents and injuries, enabling Vincam
to promptly implement its managed care techniques and thereby better control
workers' compensation and other health care costs. In addition, the Company
has developed a proprietary software product installed on PEO clients'
computers which enables the clients to directly enter payroll and other human
resource management data, via modem dial-in, and provides clients with other
local reporting capabilities.

COMPETITION

The Company's competitors include (i) traditional in-house human resource
departments, (ii) other PEOs, and (iii) providers of unbundled
employment-related services such as payroll processing firms, temporary
employment firms, commercial insurance brokers, human resource consultants,
workers' compensation insurers, HMOs and other specialty managed care
providers. Certain of such companies, many of which have greater financial
and other resources than the Company, are seeking to enter the professional
employer services market.

Competition in the highly fragmented PEO industry is generally on a local
or regional basis. Management believes that the primary elements of
competition are quality of service, choice and quality of benefits,
reputation and price. The Company believes that name recognition, regulatory
expertise, financial resources, risk management and data processing
capability distinguish leading PEOs from the rest of the industry.

The Company believes that barriers to entry into the PEO industry are
increasing, including the following: (i) the complexity of the PEO business
and the need for expertise in multiple disciplines; (ii) the three to five
years of experience required to establish experience ratings in key cost
areas of workers' compensation, health insurance and unemployment; and (iii)
the need for sophisticated management information systems to track all
aspects of business in a high-growth environment.

EMPLOYEES

As of December 31, 1995, the Company had 152 corporate employees. Of its
corporate employees, 67 were employed in the Company's PEO operations, 53
were employed in the Company's specialty managed care operations and 32 were
employed in administration. For information with respect to the Company's
worksite employees, see "--Clients."

FACILITIES

The Company maintains eight facilities. The Company's headquarters are
located in Coral Gables, Florida, in a Company-owned building that houses the
Company's executive offices, South Florida PEO unit and specialty managed
care operations. The Company's PEO operations utilize three other Florida
offices located in Ft. Lauderdale, West Palm Beach and Orlando, as well as
offices in Atlanta, Georgia, Chicago, Illinois and Detroit and Grand Rapids,
Michigan. All of the Company's offices other than its headquarters are
leased. See Notes 5 and 12 to the Company's Consolidated Financial Statements
for information regarding the Company's leases and the mortgage on its
headquarters facility. The Company believes that its current facilities are
adequate for its current needs and that additional suitable space will be
available as required.

LEGAL PROCEEDINGS

In December 1995, Angela Isabel Sanchez and her minor children filed a
wrongful death suit in the 11th Judicial Circuit in Dade County, Florida
against the Company, Miami Free Zone Corporation (one of the Company's PEO
clients), and certain officers of the Company and such client. The complaint
alleged that the defendants improperly assigned certain maintenance duties to
an employee of the Company assigned to the client, who was fatally injured in
the course of such duties. Plaintiffs seek damages in excess of $10 million.
The Company is asserting that its liability under this claim, if any, should
be limited to the State of Florida's workers' compensation limit of $100,000
involving worksite deaths. The Company is defending the action in cooperation
with the client. In March 1996, the claims against the officers of the
Company and the client were dismissed, and discovery in the proceeding was
stayed pending the court's determination of whether the plaintiffs adequately
stated a cause of action

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against the Company and the client. The plaintiffs were granted leave to replead
their claims against the officers of the Company and the client within 90 days
of such determination. In April 1996, Ms. Sanchez filed an amended complaint on
behalf of herself, her minor children and as personal representative of the
estate of the deceased employee seeking damages in excess of $15,000 against the
Company and its client. The Company also believes that if the lawsuit is
adversely determined, the Company will be entitled to indemnification from its
client or its general/umbrella liability insurance carrier. While there can be
no assurance that the ultimate outcome of this lawsuit will not have a material
adverse effect on the Company's financial condition and results of operations,
management believes, based on consultations with the Company's counsel, that the
ultimate outcome of this lawsuit will not have such an effect.

Except as noted above, the Company is not a party to any pending legal
proceedings other than ordinary course routine litigation incidental to its
business that the Company believes would not have a material adverse effect
on its financial condition or results of operations.

INDUSTRY REGULATION

OVERVIEW

The Company's professional employer and specialty managed care operations
are subject to extensive state and federal regulations that include
operating, fiscal, licensing and certification requirements. Adding
complexity to the Company's regulatory environment are (i) uncertainties
resulting from the non-traditional employment relationships created by PEOs,
(ii) variations in state regulatory schemes, and (iii) the ongoing evolution
of regulations regarding health care and workers' compensation.

The application of many laws to the Company's PEO services will depend on
whether the Company is considered an employer under the relevant statutes and
regulations. For example, the common law test of the employment relationship
is generally used to determine employer status for benefit plan purposes
under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code, the workers' compensation laws of many states and
various state unemployment laws. However, management believes, and IRS
representatives have observed, that such common law test, originally created
to distinguish an employee from an independent contractor, is not well suited
to determining which of the co-employers in a PEO relationship should be the
employer for ERISA and Code purposes. The IRS is examining this issue in
connection with its Market Segment Study. See "PEO Services--Employee Benefit
Plans." In addition, from time to time there have been proposals to enact a
statutory definition of employer for certain purposes of the Code.

Regulation in the health care and workers' compensation fields continues
to evolve. Sweeping reforms have been the subject of debate at both the
federal and state government levels. New legislation or new interpretations
of current licensing and regulatory requirements could impose operating or
licensing requirements on the Company which it may not be able to satisfy or
which could have a material adverse effect on the Company's financial
condition and results of operations. Additionally, interpretation of such
legislation or regulation by regulatory agencies with broad discretionary
powers could require the Company to modify its existing operations materially
in order to comply with applicable regulations. In addition, although health
care reform at the state and federal

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<PAGE>
level seeks solutions to contain health care costs, there can be no assurance
that such proposals will be successful. The Company cannot predict what
effect any such proposed reform will have on its business. If new legislation
results in increased health care costs, which comprise a significant portion
of the Company's direct costs, and if the Company is not able to reflect
promptly such increased costs in its service fees, the legislation could have
a material adverse impact on the Company's future operations and liquidity.

While the Company cannot predict with certainty the development of federal
and state regulations, management will continue to pursue a proactive
strategy of educating administrative authorities as to the advantages of PEOs
and assisting in the development of regulation which appropriately
accommodates their legitimate business function.

PEO SERVICES

PEO LICENSING REQUIREMENTS. A critical aspect of the growth of the PEO
industry has been increasing recognition and acceptance of PEOs by state
authorities. As the concept of PEO services became understood by regulatory
authorities, the regulatory environment began to shift from one of hostility
and skepticism to one of regulatory recognition of the industry. During the
mid to late 1980s, legitimate industry participants were challenged to
overcome well publicized failures of financially unsound and, in some cases,
unscrupulous operators. Given this environment, Vincam and other industry
leaders, in conjunction with the National Association of Professional
Employer Organizations, worked with relevant government entities to establish
a regulatory framework designed to protect clients and employees and
discourage unscrupulous and financially unsound operators, thereby promoting
the legitimacy and further development of the industry.

While many states do not explicitly regulate PEOs, approximately one-third
of the states, including Florida, have passed laws that have licensing or
registration requirements for PEOs and several additional states, including
Georgia and Michigan, are considering such regulation. Such laws vary from
state to state but generally provide for monitoring the fiscal responsibility
of PEOs. State regulation assists in screening insufficiently capitalized PEO
operations and, in the Company's view, has the effect of legitimizing the PEO
industry generally by resolving interpretative issues concerning employee
status for specific purposes under applicable state law. However, because
existing regulations are relatively new, there is limited interpretive or
enforcement guidance available. The development of additional regulations and
interpretation of existing regulations can be expected to evolve over time.
The Company has actively supported such regulatory efforts.

In Florida, the Company's PEO operations are licensed under the Florida
Employee Leasing Licensing Act of 1991 (the "Florida Licensing Act"). The
Florida Licensing Act requires PEOs and their controlling persons to be
licensed, mandates reporting requirements and allocates several employer
responsibilities. The Florida Licensing Act also requires licensed PEOs to
submit annual financial statements and maintain a tangible accounting net
worth and positive working capital. The Florida Licensing Act also requires
PEOs to, among other things: (i) reserve the right of direction and control
over the leased employees, (ii) enter into a written agreement with the
client company, (iii) pay wages to the leased employees, (iv) pay and collect
payroll taxes, (v) maintain authority to hire, terminate, discipline and
reassign employees, (vi) reserve a right to direct and control the management
of safety, risk and hazard control at the worksite, (vii) promulgate and
administer employment and safety policies, and (viii) manage workers'
compensation claims.

FEDERAL AND STATE EMPLOYMENT TAXES. The Company assumes the sole
responsibility and liability for the payment of federal and state employment
taxes with respect to wages and salaries paid to its employees, including
worksite employees. There are essentially three types of federal employment
tax obligations: (i) income tax withholding requirements, (ii) social
security obligations under FICA, and (iii) unemployment obligations under
FUTA. Under these Code sections, the employer has the obligation to withhold
and remit the employer portion and, where applicable, the employee portion of
these taxes.

To date the IRS has relied extensively on the common law test of
employment in determining employer status and the resulting liability for
failure to withhold. However, the IRS has formed a

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Market Segment Study Group for the stated purpose of examining whether PEOs,
such as the Company, are the employers of the worksite employees under the
Code provisions applicable to federal employment taxes and, consequently,
whether they are exclusively responsible for payment of employment taxes on
wages and salaries paid to such employees. Another stated purpose of the
Market Segment Study Group is to determine whether owners of client companies
can be employees of PEOs under the federal employment tax laws.

The interpretive uncertainties raised by the Market Segment Study Group
may impact the Company's ability to report employment taxes on its own
account rather than for the accounts of its clients and would increase
administrative burdens on the Company's payroll service function. In
addition, while the Company believes that it can contractually assume the
client company's withholding obligations, in the event the Company fails to
meet these obligations the client company may be held jointly and severally
liable therefor. The Company's management believes that the economic strength
and reputation of the Company has prevented this potential liability from
discouraging prospective clients.

EMPLOYEE BENEFIT PLANS. The Company offers various employee benefit plans
to its worksite employees, including a 401(k) plan (a profit-sharing plan
with an employer contributions feature), a cafeteria plan, a group health
plan, a group life insurance plan, a group disability insurance plan and an
employee assistance plan. Generally, employee benefit plans are subject to
provisions of both the Code and ERISA. In order to qualify for favorable tax
treatment under the Code, the plans must be established and maintained by an
employer for the exclusive benefit of its employees. Most of these benefit
plans are also offered to Vincam's corporate employees.

The Market Segment Study Group established by the IRS is also examining
whether PEOs, such as the Company, are the employers of worksite employees
under Code provisions applicable to employee benefit plans and consequently
able to offer to worksite employees benefit plans that qualify for favorable
tax treatment. The Market Segment Study Group is also examining whether
client company owners are employees of PEOs under Code provisions applicable
to employee benefit plans. The Company is unable to predict the timing or
nature of the findings of the Market Segment Study Group or the ultimate
outcome of such conclusions or findings. If the IRS study were to conclude
that a PEO is not an employer of its worksite employees for plan purposes,
worksite employees could not continue to make contributions to the Company's
401(k) plan or cafeteria plan. The Company believes that although unfavorable
to the Company, a prospective application by the IRS of an adverse conclusion
would not have a material adverse effect on its financial position and
results of operations. If such conclusion were applied retroactively,
employees' vested account balances would become taxable immediately, the
Company would lose its tax deduction to the extent the contributions were not
vested, the plan trust would become a taxable trust and penalties could be
assessed. In such a scenario, the Company would face the risk of client
dissatisfaction as well as potential litigation. A retroactive application by
the IRS of an adverse conclusion could have a material adverse effect on the
Company's financial position and results of operations. While Vincam believes
that a retroactive disqualification is unlikely, there can be no assurance as
to the ultimate resolution of these issues.

In March 1995, the Company applied for a determination from the IRS
regarding the qualified status of its 401(k) plan. In its application to the
IRS, the Company informed the IRS that the Company is involved in the
business of leasing employees to client companies and that the 401(k) plan
covered worksite or leased employees who satisfied the plan's eligibility
requirements. The statement that the plan covered worksite employees does not
necessarily resolve the issue of employer status for 401(k) plan purposes.
The Company anticipates a determination to be made by the IRS in the second
half of 1996. Although the Company anticipates that it will receive a
favorable determination, there can be no assurance in this regard. Failure to
receive a favorable determination from the IRS regarding the qualified status
of the 401(k) plan could have a material adverse effect on the Company's
financial condition and results of operations.

In addition to the employer/employee relationship requirement described
above, pension and profit-sharing plans, including the Company's 401(k) plan,
must satisfy certain other requirements under the Code. These other
requirements are generally designed to prevent discrimination in favor of
highly compensated employees to the detriment of non-highly compensated
employees with respect to both

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the availability of, and the benefits, rights and features offered in,
qualified employee benefit plans. The Company applies the nondiscrimination
requirements of the Code at both a consolidated and client company level to
ensure that its 401(k) plan is in compliance with the requirements of the
Code.

Employee pension and welfare benefit plans are also governed by ERISA.
ERISA defines employer as "any person acting directly as an employer, or
indirectly in the interest of an employer, in relation to an employee benefit
plan." ERISA defines the term employee as "any individual employed by an
employer." The United States Supreme Court has held that the common law test
of employment must be applied to determine whether an individual is an
employee or an independent contractor under ERISA.

A definitive judicial interpretation of employer in the context of a PEO
or employee leasing arrangement has not been established. If the Company were
found not to be an employer for ERISA purposes, its plans would not comply
with ERISA and the level of services the Company could offer may be
materially adversely affected. Further, as a result of such finding, the
Company and its plans would not enjoy the preemption of state laws provided
by ERISA and could be subject to varying state laws and regulations, as well
as to claims based upon state common laws.

WORKERS' COMPENSATION. Workers' compensation is a state mandated,
comprehensive insurance program that requires employers to fund medical
expenses, lost wages and other costs resulting from work-related injuries and
illnesses. In exchange for providing workers' compensation coverage for
employees, employers are not subject to litigation by employees for benefits
in excess of those provided by the relevant state statute. In most states,
the extensive benefits coverage (for both medical costs and lost wages) is
provided through the purchase of commercial insurance from private insurance
companies, participation in state-run insurance funds or employer
self-insurance. Workers' compensation benefits and arrangements vary on a
state-by-state basis and are often highly complex. These laws establish the
rights of workers to receive benefits and to appeal benefit denials. Workers'
compensation laws also regulate the methods and procedures which the Company
may employ in its workers' compensation managed care programs. For example,
workers' compensation laws prohibit medical copayment and deductible payment
by employees. In addition, certain states restrict employers' rights to
select health care providers and establish maximum fee levels for treatment
of injured workers.

Provider reimbursement methods also vary from state to state. A majority
of states, including Florida, have adopted fee schedules pursuant to which
all health care providers are uniformly reimbursed. In states without fee
schedules, health care providers are reimbursed based on usual, customary and
reasonable fees charged in the particular state in which the services are
provided.

As a creation of state law, workers' compensation is subject to change by
the state legislature in each state and is influenced by the political
processes in each state. Several states have mandated that employers receive
coverage only from state operated funds. Florida and other states have
adopted legislation requiring that all workers' compensation injuries be
treated through a managed care program. Florida's legislation takes effect
January 1, 1997 and provides incentives for employers such as the Company
which voluntarily use a managed care system for on-the-job injuries prior to
the effective date. While such legislation may increase the market for the
Company's workers' compensation managed care services, it may also intensify
the competition faced by the Company for such services. In addition, federal
health care reform proposals include a proposal that may require 24-hour
health coverage, in which the coverage of traditional employer-sponsored
health plans is combined with workers' compensation coverage to provide a
single insurance plan for health problems, whether or not related to work.
Incorporating workers' compensation coverage into conventional health plans
may adversely affect the market for the Company's services and may intensify
the competition faced by the Company from HMOs and other health care
providers. Moreover, because workers' compensation benefits are mandated by
law and are subject to extensive regulation, payors and employers do not have
the same flexibility to alter benefits as they have with other health benefit
programs. Finally, because workers' compensation programs vary from state to
state, it is difficult for payors and multi-state employers to adopt uniform
policies to administer, manage and control the costs of benefits.

The Company's ability to use comprehensive workers' compensation managed
care techniques in its PEO operations depends in part on its ability to
contract with or create networks of health care

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providers. The Company requires that injured workers use the Company's
network of providers. Laws regulating the operation of managed care provider
networks have been adopted by a number of states. These laws may apply to
managed care provider networks having contracts with the Company or to
provider networks which the Company may organize. To the extent the Company
is governed by these regulations, it may be subject to additional licensing
requirements, financial oversight and procedural standards for beneficiaries
and providers.

OTHER EMPLOYER RELATED REQUIREMENTS. As an employer, the Company is
subject to a wide variety of federal and state laws and regulations governing
employer-employee relationships, including the Immigration Reform and Control
Act, the Americans with Disabilities Act, the Family Medical Leave Act, the
Occupational Safety and Health Act, wage and hour regulations, and
comprehensive state and federal civil rights laws and regulations, including
those prohibiting discrimination and sexual harassment. The definition of
employer may be broadly interpreted under these laws.

Responsibility for complying with various state and federal laws and
regulations is allocated by agreement between Vincam and its clients, or in
some cases is the joint responsibility of both. See "Business--Clients."
Because the Company acts as a co-employer with the client company, it is
possible that Vincam could incur liability for violations of laws even though
Vincam is not contractually or otherwise responsible for the conduct giving
rise to such liability. The Company's standard client agreement generally
provides that the client will indemnify the Company for liability incurred as
a result of an act of negligence of a worksite employee under the direction
and control of the client or to the extent the liability is attributable to
the client's failure to comply with any law or regulation for which it has
specified contractual responsibility. However, there can be no assurance that
Vincam will be able to enforce such indemnification and the Company may
therefore be ultimately responsible for satisfying the liability in question.

SPECIALTY MANAGED CARE SERVICES

The Company currently offers managed behavioral health and workers'
compensation managed care services on a stand-alone basis to health and
workers' compensation insurance companies, HMOs, managed care providers and
large self-insured employers. Under certain of these arrangements, the
Company offers these services on a capitated, risk-bearing basis. Laws in all
states regulate the business of insurance and the establishment and operation
of health maintenance organizations and other networks of health care
providers. The Company's use or establishment of provider networks in the
provision of managed mental health care services or workers' compensation
managed care services could subject the Company to regulation under state
statutes regarding managed care provider networks. To the extent that the
Company operates or is deemed to operate in one or more states as a prepaid
limited health services organization, HMO, prepaid health plan or other
similar entity, it will be required to comply with certain statutes and
regulations that, among other things, may require it to maintain minimum
levels of deposits, capital, surplus, reserves or net worth, and also may
limit the ability of the Company and its subsidiaries to pay dividends. In
addition, many of these regulations vary on a state-by-state basis, and there
can be no assurance that, as the Company's operations expand, it will be able
to satisfy the various requirements of other states or be able to offer the
same services covered in Florida.

The Florida Department of Insurance (the "DOI") is in the process of
implementing a prepaid limited health services organization statute enacted
in 1993. This statute provides for the regulation of limited service prepaid
health plans in a manner similar to the regulation of HMOs. The Company has
obtained a written determination from the staff of the DOI to the effect that
its provision of capitated managed behavioral health care services does not
currently subject the Company to regulation under this statute. However,
there can be no assurance that the DOI will not take a contrary position in
the future. The DOI is also contemplating issuing administrative rules
regulating the financial solvency and operation of entities that contract
with HMOs and other regulated insurers to arrange for the provision of health
services to HMO members or insureds on a prepaid basis. There can be no
assurance that such rules, if promulgated, will not have a material adverse
effect upon the Company's business, financial condition or results of
operations.

Certain of the Company's specialty managed care services, including its
managed behavioral health care services and certain of its workers'
compensation managed care services, involve review of requests

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for medical care or therapy. Approximately half of the states, including
Florida, have enacted laws that require licensing of businesses that provide
medical review services. These laws typically establish minimum standards for
qualification of personnel, as well as confidentiality, internal quality
control and dispute resolution procedures. Such regulatory programs may
require additional licensure or increase the Company's operating costs, which
may in turn have an adverse impact upon the Company's competitive position.

Psych/Care, Inc. ("Psych/Care"), the Company's subsidiary that provides
managed behavioral health care services, is licensed under Florida law as a
private review agent. Psych/Care arranges for the provision of managed
behavioral health services through its own network of independent providers
and, in connection therewith, also provides medical review services. The
Company is responsible for credentialing its providers and has adopted a plan
that complies with the Standards for Accreditation of Managed Care
Organizations established by the National Committee for Quality Assurance, a
private accrediting body.

In Florida, and in cooperation with HIP Health Plans of Florida, the
Company has developed the first WCMCA to be certified in every county in the
State of Florida. There can be no assurance that future interpretations of
insurance and health care network laws by the regulatory authorities of
states in which the Company does business (or in states into which the
Company may expand such business) will not require licensure or a
restructuring of all or some of the Company's operations.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

NAME AGE POSITION
---- --- --------
Carlos A. Saladrigas(1)(2) .. 47 Chairman of the Board, President and
Chief Executive Officer

Jose M. Sanchez(1) .......... 44 Vice Chairman and Area President--South
Florida

Steven R. Light ............. 38 Area President--Midwest

Phyllis C. Stockfisch ...... 43 Area President--Georgia

Andrea L. Velasquez ......... 35 President--Managed Care Division

Jeffrey D. Lamb ............. 38 Senior Vice President--Marketing and
Business Development

Martiniano J. Perez ......... 33 Vice President and Controller

Howard E. Cox, Jr.(2)(3) ... 52 Director

Charles M. Hazard, Jr.(3) ... 28 Director

John H. McArthur(2)(3) ..... 62 Director

- ----------
(1) Member of the Stock Option Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee

CARLOS A. SALADRIGAS co-founded the Company in 1984, and is its Chairman,
President and Chief Executive Officer. Before co-founding Vincam in 1984, Mr.
Saladrigas was Executive Vice President of CAC (now owned by CAC--United
Healthcare Plans of Florida), Florida's oldest HMO, and previously held
several positions at PepsiCo, Inc., including that of Director of Corporate
Planning and Vice President of Finance & Administration for PepsiCo's
subsidiary located in Mexico. Mr. Saladrigas holds an M.B.A. with honors from
the Harvard Business School. He is highly active in PEO industry efforts,
having served as President of NAPEO and of its Florida chapter. In addition,
Mr. Saladrigas was appointed by Florida's governor to serve a four-year term
as a member of the Florida Board of Employee Leasing Companies (the
industry's regulatory authority), which he chaired during its first year of
operation. Currently, Mr. Saladrigas serves as Vice Chairman of the Institute
for the Accreditation of Professional Employer Organizations, the industry's
independent accrediting organization.

JOSE M. SANCHEZ co-founded the Company in 1984, and is the Vice Chairman
of the Board and Area President--South Florida. Before co-founding Vincam in
1984, he held the position of vice president of sales at PepsiCo, Inc.'s
subsidiary in Mexico, where he was responsible for over 1,800 employees in 35
distribution centers throughout the country, which served in excess of 63,000
customers, as well as other management positions with PepsiCo.

STEVEN R. LIGHT has served as the Company's Area President--Midwest since
January 1995, having previously served as Vice President of Operations for
the Midwest Area from January 1992 to December 1994. Mr. Light has been
involved with the Company since 1989, when he assisted in the establishment
of the Company's Detroit office, serving as Financial Manager. He joined the
Company on a full-time basis in January 1993.

PHYLLIS C. STOCKFISCH joined Vincam in October 1995 as Area
President--Georgia, and is responsible for overall operational direction and
management of Vincam's Atlanta office. Prior to joining Vincam, Ms.
Stockfisch served as Vice-President--Alternative Staffing for American
International Group Risk Management from December 1994 to October 1995. From
January 1990 to December 1994, Ms. Stockfisch served as Vice President--Risk
Management for TeamStaff, Inc., another PEO.

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ANDREA VELASQUEZ has served as the Company's President--Managed Care
Division since November 1994. From November 1993 to November 1994, Ms.
Velasquez served as the Company's Senior Vice President--Marketing and Sales.
From January 1993 to November 1993, she served as Psych/Care's Vice
President--Development and Administration. From September 1992 to January
1993 she served as Psych/Care's Director of Business Development and
Administration. From August 1989 to September 1992, she was with American
Biodyne, Inc. (now known as Medco Behavioral Care Systems), holding a number
of key positions including Regional Market Manager.

JEFFREY D. LAMB has served as the Company's Senior Vice
President--Marketing and Business Development since August 1995. From October
1990 to August 1995, Mr. Lamb was with Automatic Data Processing, Inc.
serving as a Division Vice President, Strategic Planning and Business
Development, and since 1992 as Vice President of Automatic Data Processing's
Heartland Business Line. Mr. Lamb also served with McKinsey & Company after
having received an M.B.A. from the Harvard Business School.

MARTINIANO J. PEREZ has served as Vincam's Controller since February 1993
and as Vice President and Controller since February 1994. He is responsible
for supervising all financial operations and managing Vincam's accounting
department. From July 1991 to January 1993, Mr. Perez was a Vice President
with Consolidated Bank in charge of financial reporting. Prior to that time,
Mr. Perez was an auditor with KPMG Peat Marwick in Miami, Florida.

HOWARD E. COX, JR. has been a director of the Company since February 1995.
He is a general partner of Greylock Equity GP Limited Partnership, which is
the general partner of Greylock Equity Limited Partnership ("Greylock"), a
venture capital firm, and has been associated with Greylock and partnerships
affiliated with Greylock for the past 24 years. Mr. Cox is a director of
Stryker Corporation, HPR Inc., Arbor Healthcare and Amisys Managed Care
Systems, Inc.

CHARLES M. HAZARD, JR. has been a director of the Company since February
1995. Since 1994, he has been employed in the position of Associate at
Greylock Management Corporation, an affiliate of Greylock Equity Limited
Partnership. Prior to joining Greylock Management Corporation, he worked as a
consultant to Company Assistance Limited, a business consulting firm located
in Warsaw, Poland, and Bain and Company, a business consulting firm in San
Francisco, California.

JOHN H. MCARTHUR has been a director of the Company since December 1995.
Since 1962, Dr. McArthur has been a member of the faculty of the Harvard
Business School, from which he received a doctorate in business
administration in 1963. Dr. McArthur served as Dean of the Faculty of the
Harvard Business School from 1980 to 1995. Dr. McArthur is a director of
Glaxo Wellcome plc, BCE, Inc., Cabot Corporation, The Chase Manhattan
Corporation, Rohm and Haas Company and Springs Industries, Inc.

BOARD OF DIRECTORS

GENERAL. All directors hold office until the next annual meeting of
shareholders and until their successors have been elected and qualified, or
until their death, resignation or removal. Charles M. Hazard, Jr. was elected
as a director of the Company pursuant to the provisions of a Stock Purchase
Agreement (the "Stock Purchase Agreement") entered into by the Company,
Greylock and Messrs. Saladrigas and Sanchez in February 1995 in connection
with Greylock's purchase of the Company's Participating Convertible Preferred
Stock (the "Series A Preferred Stock"). See "Certain Transactions." In
addition, a Shareholders Voting Agreement (the "Shareholder Voting
Agreement") among the Company, Greylock and Messrs. Saladrigas and Sanchez
provides that Greylock and Messrs. Saladrigas and Sanchez shall cause the
election of one director designated by Greylock (currently Howard E. Cox,
Jr.) and two directors designated by mutual agreement of Messrs. Saladrigas
and Sanchez (currently Messrs. Saladrigas and Sanchez). The Shareholder
Voting Agreement and the voting provisions of the Stock Purchase Agreement
will terminate upon consummation of this offering.

COMMITTEES. The Company's Board of Directors has established a Stock
Option Committee, a Compensation Committee and an Audit Committee.

The Stock Option Committee administers the Company's 1995 Stock Option
Plan and the 1996 Long Term Incentive Plan including, among other things,
determining the amount, exercise price and

36
<PAGE>
vesting schedule of stock options awarded under the plans. The Stock Option
Committee is currently comprised of Carlos A. Saladrigas and Jose M. Sanchez.

The Compensation Committee administers the Company's other compensation
programs, and performs such other duties as may from time to time be
determined by the Board of Directors. The Compensation Committee is currently
comprised of Howard E. Cox, Jr., John H. McArthur and Carlos A. Saladrigas.

The Audit Committee reviews the scope and results of the annual audit of
the Company's consolidated financial statements conducted by the Company's
independent accountants, the scope of other services provided by the
Company's independent accountants, proposed changes in the Company's
financial and accounting standards and principles, and the Company's policies
and procedures with respect to its internal accounting, auditing and
financial controls. The Audit Committee also examines and considers other
matters relating to the financial affairs and accounting methods of the
Company, including selection and retention of the Company's independent
accountants. The Audit Committee is currently comprised of Howard E. Cox,
Jr., Charles M. Hazard, Jr. and John H. McArthur.

COMPENSATION. Following the consummation of the offering, the Company will
pay its current non-employee directors $12,500 per year and will reimburse
all directors for the expenses incurred in attending meetings of the Board of
Directors. In December 1995, pursuant to the Company's 1995 Stock Option
Plan, the Company granted to Dr. McArthur an option to acquire 66,666 shares
of Common Stock at an exercise price of $3.33 per share, which option vests
over a five year period. In March 1996, pursuant to the Company's 1996 Long
Term Incentive Plan, the Company granted to each of Messrs. Cox and Hazard an
option to acquire 33,000 shares of Common Stock. Each option has an exercise
price of $8.05 per share and vests over a five year period.

Mr. Cox, a director of the Company, currently receives compensation
pursuant to the Shareholder Voting Agreement, which will be terminated in
connection with this offering. This agreement requires that Mr. Cox receive,
as compensation for serving on the Board of Directors of the Company, cash
compensation (payable on a quarterly basis) in the amount of at least 5% of
the aggregate cash compensation paid or payable to the Company's Chief
Executive Officer during the prior quarter. Pursuant to this arrangement, Mr.
Cox was paid an aggregate of $10,416 with respect to his 1995 service as a
director. Messrs. Cox and Hazard were also reimbursed for expenses incurred
in connection with attending Board meetings.

NON-COMPETITION AGREEMENTS

Messrs. Saladrigas and Sanchez are parties to Non-Competition Agreements
entered into with the Company in February 1995. These agreements provide, among
other things, that upon a termination of the officer's employment, the Company
may elect to extend the officer's non-competition obligations under the
agreement for up to two years following the termination of employment. For each
month during which the Company elects to extend the officer's non-competition
obligation, the Company must make payments to the officer, monthly in arrears,
at the rate of 100% of the officer's base salary, plus an amount equal to the
bonus received by the officer for the last completed fiscal year, and must
continue to provide perquisites to the officer during such extension period.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to February 1996, the Board of Directors did not have a Compensation
Committee, and decisions regarding compensation of executive officers were
made by the Company's Board of Directors. Messrs. Carlos A. Saladrigas and
Jose M. Sanchez participated in deliberations of the Board of Directors
regarding the compensation of executive officers, including their own. See
"Certain Transactions."

37
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued by
the Company on behalf of the Chief Executive Officer and the only other
executive officer of the Company who received an annual salary and bonus in
excess of $100,000 (hereafter collectively referred to as the "Named
Executive Officers") for services rendered during 1995:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
---------------------------------------------- COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS COMPENSATION
- --------------------------- ------- ----------- -------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Carlos A. Saladrigas 1995 $250,000 0 $63,219(1) 0 $ 9,980(2)
Chairman of the Board, President
and Chief Executive Officer

Jose M. Sanchez 1995 $250,000 0 $54,821(1) 0 $11,116(2)
Vice Chairman and Area
President--South Florida
<FN>
(1) Includes $16,031 in automobile lease payments and $20,000 whole life
insurance premium.

(2) Insurance premiums paid by, or on behalf of, the Company during the
covered fiscal year with respect to term life insurance for the benefit
of the named executive officer.
</FN>
</TABLE>

OPTION GRANTS

Neither of the Named Executive Officers has been granted any stock
options.

1995 STOCK OPTION PLAN

On May 24, 1995, the Company's Board of Directors adopted and its
shareholders approved the Company's 1995 Stock Option Plan (the "1995 Plan")
under which 666,665 shares of Common Stock are currently reserved for
issuance upon exercise of stock options. The 1995 Plan provides for the grant
of both incentive stock options intended to qualify as such under Section 422
of the Code ("incentive stock options") and nonqualified stock options to
directors, officers, key employees, consultants and other individual
contributors of or to the Company and its subsidiaries, as determined in the
discretion of the Stock Option Committee. Pursuant to the terms of the 1995
Plan, incentive stock options and nonqualified stock options may not be
granted with an exercise price which is less than 100% and 85%, respectively,
of the fair market value of the Company's Common Stock on the date of grant,
as reasonably determined by the Stock Option Committee. The 1995 Plan will
terminate on May 24, 2005, unless sooner terminated by the Board of
Directors.

As of April 26, 1996, there were outstanding under the 1995 Plan options
to purchase an aggregate of 561,328 shares of Common Stock at exercise prices
ranging from $3.00 to $8.05 per share. These options vest in varying amounts
over a five year period from their respective grant dates, with the first of
such options becoming exercisable in July 1996, and expire on the tenth
anniversary of their respective grant dates. The exercise price of all stock
options granted under the 1995 Plan was not less than the fair market value
of the Common Stock on the date of grant as determined in good faith by the
Board of Directors. Management believes that various factors have contributed
to the difference between the fair market value of the Company's Common Stock
as determined by the Board of Directors in setting the exercise price of
grants under the 1995 Plan and the price of the Company's Common Stock being
offered to the public pursuant to this offering. These factors include (i)
the potential liquidity resulting from this offering; (ii) the fact that, as
a publicly traded company, the Company's stock will be more readily valued by
the market by reference to comparable public companies; and (iii) the
enhanced financial position of the Company and improved ability to take
advantage of growth opportunities resulting from the application of the net
proceeds of this offering as described in "Use of Proceeds." See
"Underwriting." The Company intends to file a registration statement under
the Securities Act to register shares of Common Stock reserved for issuance
under the 1995 Plan. See "Shares Eligible for Future Sale."

38
<PAGE>
1996 LONG TERM INCENTIVE PLAN

In February 1996, the Company's Board of Directors adopted and its
shareholders approved the 1996 Long Term Incentive Plan (the "1996 Plan")
under which 800,000 shares of Common Stock are currently reserved for
issuance upon exercise of or in connection with stock options, stock
appreciation rights, performance awards, grants of restricted stock and other
stock based or stock related awards. The 1996 Plan provides for the grant of
both incentive stock options and nonqualified stock options, as well as other
stock-based awards, to the Company's directors, employees (including
officers) and consultants as determined in the discretion of the Stock Option
Committee. Pursuant to the terms of the 1996 Plan, incentive stock options
and nonqualified stock options may not be granted with an exercise price
which is less than 100% of the fair market value of the Company's Common
Stock on the date of grant. The 1996 Plan will terminate in February, 2006,
unless sooner terminated by the Board of Directors.

As of April 26, 1996, there were outstanding under the 1996 Plan options
to purchase an aggregate of 66,000 shares of Common Stock at an exercise
price of $8.05. These options vest in varying amounts over a five year period
from their respective grant dates, with the first of such options becoming
exercisable in March 1998, and expire on the tenth anniversary of their
respective grant dates. The exercise price of all stock options granted under
the 1996 Plan was not less than the fair market value of the Common Stock on
the date of grant as determined in good faith by the Board of Directors. The
Company intends to file a registration statement under the Securities Act to
register shares of Common Stock reserved for issuance under the 1996 Plan.
See "Shares Eligible for Future Sale."

CERTAIN TRANSACTIONS

In June 1993, C.P. Investments of Miami, Inc. ("C.P."), a company owned
equally by Carlos A. Saladrigas and Jose M. Sanchez, assigned to the Company
an option (the "Option") to purchase from an unrelated third party the
Company's Coral Gables headquarters facility for an aggregate purchase price
of approximately $1.0 million. C.P. received no consideration for the
assignment of the Option, but retained the right to repurchase from the
Company the building for the sum of $1.0 million (the "Repurchase Option").
The value of the Repurchase Option retained by Messrs. Saladrigas and Sanchez
through their ownership of C.P. was determined to be $700,000 and was
recorded as a distribution to Messrs. Saladrigas and Sanchez in 1993. In
connection with the February 1995 Stock Purchase Agreement, Messrs.
Saladrigas and Sanchez agreed to cause C.P. to sell the Repurchase Option to
the Company for $700,000, subject to the closing of an initial public
offering of Common Stock. The $700,000 purchase price reflects the difference
between the market value of the building, as established by two independent
third-party appraisals of the building, and its November 1993 purchase price.
The Company anticipates that it will fund the repurchase of the Repurchase
Option with a portion of the proceeds from this offering. See "Use of
Proceeds" and Note 7 to the Company's Consolidated Financial Statements.

In addition, in June 1993 the Company entered into a building management
agreement with C.P., pursuant to which C.P. is responsible for ensuring that
the Company's Coral Gables facility is properly managed and maintained and
for coordinating and procuring contracts with outside service companies for
various maintenance services. During each of 1993, 1994 and 1995, the Company
paid to C.P. aggregate building maintenance fees of $42,000, $41,000, and
$40,000, respectively. The building management agreement will be terminated
by the Company and C.P. in connection with the consummation of this offering.

During 1992 and 1993, each of Messrs. Saladrigas and Sanchez borrowed an
aggregate of $55,500 from the Company in connection with a purchase of shares
of Common Stock from another shareholder and the payment of a deposit on the
purchase of the Company's headquarters. Such indebtedness was evidenced by an
unsecured promissory note from each of Messrs. Saladrigas and Sanchez bearing
interest at 7% per annum and maturing on December 31, 1997. The outstanding
principal amount and interest owing pursuant to such promissory notes was
repaid in February 1995. The largest aggregate amount of indebtedness of each
of Mr. Saladrigas and Sanchez during 1993, 1994 and 1995 was $61,539,
outstanding as of December 31, 1994.

39
<PAGE>
In February 1995, the Company consummated a recapitalization, pursuant to
which each shareholder exchanged 17.398% of the shares of Common Stock held
by such shareholder for an equal number of shares of Series A Preferred
Stock. Pursuant to the Stock Purchase Agreement, Messrs. Saladrigas and
Sanchez sold all of their shares of Series A Preferred Stock to Greylock. See
"Principal and Selling Shareholders" and "Shares Eligible for Future
Sale--Registration Rights of Certain Holders."

From time to time Messrs. Saladrigas and Sanchez have personally
guaranteed Company indebtedness including the $1.2 million subordinated
promissory note issued by the Company in January 1995 in connection with the
Company's repurchase of Common Stock. A portion of the net proceeds of this
offering will be used to repay such indebtedness. See "Use of Proceeds" and
Note 5 of Notes to Consolidated Financial Statements. In addition, Messrs.
Saladrigas and Sanchez have guaranteed an aggregate of $2.0 million of
indebtedness under the Company's credit facility. These guaranties are also
expected to be terminated in connection with a replacement credit facility
after completion of this offering. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by: (i) each of the Named
Executive Officers and directors who beneficially owns any shares, (ii) each
other person (or group of persons) who is known by the Company to own
beneficially 5% or more of the Company's Common Stock, and (iii) all
directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING OWNED AFTER OFFERING(2)
NAME AND ADDRESS ------------------------ NUMBER OF SHARES -------------------------
OF BENEFICIAL OWNER(1) NUMBER PERCENT BEING OFFERED NUMBER PERCENT
---------------------- ----------- ---------- ----------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Carlos A. Saladrigas(3) 2,373,752 39.6 100,000 2,273,752 28.4

Jose M. Sanchez 2,373,752 39.6 100,000 2,273,752 28.4

Howard E. Cox, Jr.(4) 999,999 16.7 0 999,999 12.5
c/o Greylock Management Corporation
1 Federal Street, Boston, Massachusetts

Charles M. Hazard, Jr. 0 -- 0 0 --

John H. McArthur 0 -- 0 0 --

Greylock Equity Limited Partnership 999,999 16.7 0 999,999 12.5
c/o Greylock Management Corporation
1 Federal Street, Boston, Massachusetts

Olga M. Saladrigas(3) 1,061,250 17.7 0 1,061,250 13.3
c/o Saladrigas Heritage Investments, Inc.
2850 Douglas Road
Coral Gables, Florida

All directors and executive officers
as a group (10 persons)(2)(3)(4) 5,873,751 97.9 200,000 5,673,751 70.9

<FN>
(1) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting power and investment power with respect to
all shares of Common Stock beneficially owned by them. Unless otherwise
indicated, the address of each of the identified beneficial owners is
2850 Douglas Road, Coral Gables, Florida.

(2) Messrs. Saladrigas and Sanchez have granted to the Underwriters an option
to purchase up to 330,000 additional shares of Common Stock. See
"Underwriting." In the event the Underwriters exercise the overallotment
option in full, Messrs. Saladrigas and Sanchez will each own 2,108,752
shares after the offering, representing 26.4% of total shares
outstanding, while all directors and executive officers as a group will
own 5,343,751 shares (66.8% of the total).

(3) Each of Carlos Saladrigas and his wife, Olga M. Saladrigas, owns 50% of
the voting securities of Saladrigas Heritage Investments, Inc. ("Heritage
Investments"), a Florida corporation. Heritage

40
<PAGE>
Investments is the general partner of a Florida limited partnership whose
assets include 1,061,250 shares of Common Stock of the Company. As equal
shareholders of the entity which has sole voting and dispositive power
over shares of the Company held by the limited partnership, Mr. and Mrs.
Saladrigas are deemed to share voting and dispositive power over all such
shares.

(4) Reflects shares held of record by Greylock Equity Limited Partnership.
Mr. Cox disclaims beneficial ownership of the shares owned by Greylock
Equity Limited Partnership. Mr. Cox, a director of the Company, is the
general partner of Greylock Equity GP Limited Partnership, which is the
general partner of Greylock Equity Limited Partnership.
</FN>

</TABLE>

DESCRIPTION OF CAPITAL STOCK

On the date of this Prospectus, the Company has outstanding 4,956,066
shares of Common Stock, par value $.001 per share, and 165.376 shares of
Series A Preferred Stock, par value $.01 per share. Upon the closing of this
offering, all of the outstanding shares of Series A Preferred Stock will be
converted into 1,043,933 shares of Common Stock. In addition, upon the
closing of this offering, the Company's Amended and Restated Articles of
Incorporation, as amended to date will be further amended and restated (as so
further amended and restated, the "Articles"), to authorize the Company to
issue 60,000,000 shares of Common Stock, $.001 par value, and 20,000,000
shares of Series Preferred Stock, $.01 par value, and to delete all reference
to the Series A Preferred Stock. The following discussion assumes the
completion of these events and is qualified in its entirety by reference to
the Articles and the Company's bylaws (the "Bylaws"), copies of which are
included as exhibits to the Registration Statement of which this Prospectus
is a part.

COMMON STOCK

Each share of Common Stock entitles the holder to one noncumulative vote
on each proposal or matter on which shareholders of the Company are permitted
to vote, except to the extent otherwise described under the section entitled
"Anti-takeover Provisions of Florida Law" below or as otherwise required by
law. The holders of shares of Common Stock are entitled to dividends when and
if declared by the Board of Directors out of funds legally available
therefore. See "Dividend Policy." Upon any liquidation, dissolution or
winding up of the Company, and after distributions with respect to
liquidation preferences, if any, of the Series Preferred Stock, the net
assets of the Company may be distributed to the holders of shares of Common
Stock.

The Common Stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common Stock are
fully paid and nonassessable, and the shares of Common Stock to be issued
upon consummation of the offering will be fully paid and nonassessable.

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

SERIES PREFERRED STOCK

Upon consummation of the offering, the Company will be authorized to issue
20,000,000 shares of Series Preferred Stock. The Board of Directors will have
the authority to issue the Series Preferred Stock from time to time in one or
more series and to establish the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued shares of Series
Preferred Stock and to fix the number of shares constituting any series and
the designation of such series, without any further vote or action by the
shareholders. Any shares of Preferred Stock so issued would have priority
over the Common Stock with respect to dividend or liquidation rights or both.
Any future issuance of Series Preferred Stock may have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the voting and
other rights of the holders of Common Stock. At present, the Company has no
plans to issue any Series Preferred Stock.

ANTI-TAKEOVER PROVISIONS OF FLORIDA LAW

Florida has enacted legislation that may deter or frustrate takeovers of
Florida corporations. The "Control Share Acquisitions" section of the Florida
Business Corporation Act ("FBCA") generally

41
<PAGE>
provides that shares acquired in excess of certain specified thresholds,
beginning at 20% of the Company's outstanding voting shares, will not possess
any voting rights unless such voting rights are approved by a majority vote
of a corporation's disinterested shareholders. The "Affiliated Transactions"
section of the FBCA generally requires majority approval by disinterested
directors or supermajority approval by disinterested shareholders of certain
specified transactions (such as a merger, consolidation, sale of assets,
issuance or transfer of shares or reclassification of securities) between a
corporation and a holder of more than 10% of the outstanding voting shares of
the corporation, or any affiliate of such shareholder.

The directors of the Company are subject to the "general standards for
directors" provisions set forth in the FBCA. These provisions provide that in
discharging his or her duties and determining what is in the best interests
of the Company, a director may consider such factors as the director deems
relevant, including the long-term prospects and interests of the Company and
its shareholders and the social, economic, legal or other effects of any
proposed action on the employees, suppliers or customers of the Company, the
community in which the Company operates and the economy in general.
Consequently, in connection with any proposed action, the Board of Directors
is empowered to consider interests of other constituencies in addition to the
Company's shareholders, and directors who take into account these other
factors may make decisions which are less beneficial to some, or a majority,
of the shareholders than if the law did not permit consideration of such
other factors.

LIMITED LIABILITY AND INDEMNIFICATION

Under the FBCA, a director is not personally liable for monetary damages
to the corporation or any other person for any statement, vote, decision, or
failure to act unless (i) the director breached or failed to perform his
duties as a director and (ii) the director's breach of, or failure to
perform, those duties constitutes: (1) a violation of the criminal law,
unless the director had reasonable cause to believe his conduct was lawful or
had no reasonable cause to believe his conduct was unlawful, (2) a
transaction from which the director derived an improper personal benefit,
either directly or indirectly, (3) a circumstance under which an unlawful
distribution is made, (4) in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the corporation or
willful misconduct, or (5) in a proceeding by or in the right of someone
other than the corporation or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety, or
property. A corporation may purchase and maintain insurance on behalf of any
director or officer against any liability asserted against him and incurred
by him in his capacity or arising out of his status as such, whether or not
the corporation would have the power to indemnify him against such liability
under the FBCA.

The Articles and Bylaws of the Company provide that the Company shall, to
the fullest extent permitted by applicable law, as amended from time to time,
indemnify all directors of the Company, as well as any officers or employees
of the Company to whom the Company has agreed to grant indemnification.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.

SHAREHOLDER MEETINGS AND OTHER PROVISIONS

The Articles provide that all actions taken by the shareholders must be
taken at an annual meeting or special meeting of shareholders and may not be
effected by any consent in writing by such shareholders. Under the Articles
and Bylaws, special meetings of the shareholders of the Company may be called
by the Board of Directors, the Chairman of the Board or the President, and
shall be called by the Chairman of the Board or Secretary of the Company upon
request of the holders of not less than 50% of the capital stock entitled to
vote on each matter to be considered at such meeting. In order to request or
demand that a special meeting be held for any purpose, a shareholder must
submit a written

42
<PAGE>
notice to the Secretary of the Company requesting that the Board of directors
fix a record date for the purpose of determining the shareholders entitled to
request the special meeting. Shareholders are also required to comply with
advance notice provisions with respect to nominations of candidates for
election to the Company's Board of Directors. In order to be timely, a
nomination by a shareholder must be delivered to or mailed and received at
the principal executive offices of the Company not less than 50 days nor more
than 90 days prior to a meeting of shareholders at which an election of
directors is to take place. In the event that less than 60 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder will be timely if received not later
than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was
made. In addition, the Articles and Bylaws provide that directors may be
removed for only cause and by a vote of 80% of the issued and outstanding
shares of the capital stock of the Company entitled to vote generally for the
election of directors, taken at a duly called annual or special meeting of
the shareholders. The Bylaws may be amended by the Board of Directors or by
the vote of not less than 80% of the outstanding voting stock of the Company,
voting as a single class. These provisions may have the effect of deterring
hostile takeovers or delaying changes in control or management of the
Company.

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon consummation of this offering, the Company will have 7,999,999 shares
of Common Stock outstanding, of which the 2,200,000 shares offered hereby
will be freely tradeable without restriction or further registration under
the Securities Act, except for any shares purchased by an "affiliate" of the
Company (in general, a person who has a control relationship with the
Company), which shares will be subject to the resale limitations, described
below, of Rule 144 promulgated under the Securities Act. The remaining
5,799,999 shares are deemed to be "restricted securities," as that term is
defined under Rule 144, in that such shares were issued and sold by the
Company in private transactions not involving a public offering and, as such,
may only be sold pursuant to an effective registration under the Securities
Act, in compliance with the exemption provisions of Rule 144 or pursuant to
another exemption under the Securities Act. An aggregate of 3,738,750 of such
restricted shares will be eligible for sale under Rule 144 (subject to
certain recurring three-month volume limitations prescribed by Rule 144 and
the lock-up arrangements with the Underwriters described in the following
paragraph) commencing 90 days after this offering, and the balance will
become so eligible at various times commencing thereafter.

All of the existing shareholders of the Company, beneficially holding in
the aggregate 5,799,999 shares of Common Stock upon consummation of this
offering, have agreed with the Underwriters (as hereinafter defined) not to
sell or otherwise dispose of any of those shares of Common Stock for a period
of 180 days after the date of this Prospectus without the written consent of
Smith Barney Inc., one of the Representatives of the Underwriters. Smith
Barney Inc. may, in its sole discretion and at any time without notice,
release all or any portion of the securities subject to the Lock-up
Agreements.

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or persons whose shares are aggregated with an affiliate), who
has owned restricted shares of Common Stock beneficially for at least two
years is entitled to sell, within any three-month period, a number of shares
that does not exceed the greater of 1% of the total number of outstanding
shares of the same class or, if the common stock is quoted on Nasdaq National
Market, the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for
at least three months immediately preceding the sale and who has beneficially
owned shares of Common Stock for at least three years is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above. The Securities and Exchange Commission is currently considering a
proposal to reduce the Rule 144 holding period for restricted securities to
one year.

The Company intends to file a registration statement under the Securities
Act to register shares of Common Stock reserved for issuance under the 1995
Plan and the 1996 Plan, thereby permitting the

43
<PAGE>
resale of such shares by non-affiliates in the public market without
restriction under the Securities Act. The Company has reserved up to 666,665
shares of Common Stock for issuance under the 1995 Plan and up to 800,000
shares of Common Stock for issuance under the 1996 Plan. As of April 26,
1996, options to purchase 561,328 and 66,000 shares of Common Stock were
outstanding under the 1995 Plan and the 1996 Plan, respectively. See
"Management--1995 Stock Option Plan," and "--1996 Long Term Incentive Plan."

No prediction can be made as to the effect, if any, that public sales of
shares of Common Stock or the availability of such shares for sale will have
on the market prices of the Common Stock prevailing from time to time.
Nevertheless, the possibility that substantial amounts of Common Stock may be
sold in the public market may adversely affect prevailing market prices for
the Common Stock and could impair the Company's ability in the future to
raise additional capital through the sale of its equity securities.

REGISTRATION RIGHTS

Subject to the Lock-Up Agreements, upon consummation of the offering,
Greylock, the beneficial holder of 999,999 shares of Common Stock, Carlos A.
Saladrigas, the holder of 1,312,502 shares of Common Stock, the Saladrigas
Family Limited Partnership, the holder of 1,061,250 shares of Common Stock
and Jose M. Sanchez, the holder of 2,373,752 shares of Common Stock, will be
entitled to certain demand and/or incidental registration rights with respect
to such shares of Common Stock (the "Registrable Securities") pursuant to a
registration rights agreement entered into by the Company in February 1995
(the "Registration Rights Agreement"). Such registration rights terminate on
February 10, 2005.

Under the Registration Rights Agreement, any of Mr. Saladrigas, the
Saladrigas Family Partnership, Mr. Sanchez or Greylock may, upon consummation
of the offering, request that the Company file a registration statement under
the Securities Act and, upon such request and subject to certain exceptions,
the Company generally will be required to use its best efforts to effect any
such registration. The Company is generally not required to effect more than
two such requested registrations, although, if the Company is permitted by
the Securities and Exchange Commission to use Form S-3 for the registration
of its securities, those shareholders will have the right to request one such
registration in any twelve-month period.

In addition, if the Company proposes to register any of its own
securities, either for its own account or for the account of other security
holders, the Company is required, with certain exceptions, to notify Messrs.
Saladrigas and Sanchez, the Saladrigas Family Partnership, and Greylock, and,
subject to certain limitations, to include in such registration all of the
shares of Common Stock requested to be included by them. If the underwriter
of any such offering determines, however, that marketing factors require
limitation of the number of shares to be underwritten, then it may exclude
some or all of the shares held by Messrs. Saladrigas and Sanchez and Greylock
from such registration, on a pro rata basis, provided that no person other
than the Company and Messrs. Saladrigas and Sanchez and Greylock, or certain
permitted transferees of their respective rights, is permitted to include
securities in the offering.

The Company is generally obligated to bear the expenses, other than the
underwriting discounts and sales commissions, of the foregoing registrations.

44
<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in the Underwriting
Agreement, each of the underwriters named below (the "Underwriters") has
severally agreed to purchase, and the Company and the Selling Shareholders
have agreed to sell to such Underwriter, the respective number of shares of
Common Stock set forth opposite the name of such Underwriter:

NUMBER
UNDERWRITER OF SHARES
----------- ------------
Smith Barney Inc. ....................
Alex. Brown & Sons Incorporated ......
Hambrecht & Quist LLC ................

------------
Total .............................. 2,200,000
============

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to
take and pay for all shares of Common Stock offered hereby (other than those
covered by the over-allotment option described below) if any such shares are
purchased.

The Underwriters, for whom Smith Barney Inc., Alex. Brown & Sons
Incorporated and Hambrecht & Quist LLC are acting as Representatives (the
"Representatives"), propose to offer part of the shares of Common Stock
directly to the public at the public offering price set forth on the cover
page of this Prospectus and part of the shares to certain dealers at a price
which represents a concession not in excess of $ per share under the
public offering price. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other
dealers. After the initial public offering, the offering price and other
selling terms may be changed by the Representatives. The Representatives of
the Underwriters have advised the Company that the Underwriters do not intend
to confirm sales to any accounts over which they exercise discretionary
authority.

The Selling Shareholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
an aggregate of 330,000 additional shares of Common Stock at the public
offering price set forth on the cover page of this Prospectus minus the
underwriting discounts and commissions. The Underwriters may exercise such
option solely for the purpose of covering over-allotments, if any, in
connection with the sale of the shares offered hereby. To the extent such
option is exercised, each Underwriter will be obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares as the number of shares set forth opposite such Underwriter's name in
the preceding table bears to the total number of shares in such table.

45
<PAGE>
The Company and each of its shareholders, who beneficially hold an
aggregate of 5,999,999 shares of Common Stock, have agreed that, for a period
of 180 days following the date of this Prospectus, they will not, without the
prior written consent of Smith Barney Inc., offer, sell, contract to sell, or
otherwise dispose of any shares of Common Stock of the Company (other than
shares offered pursuant to this Prospectus) or any securities convertible
into, or exercisable or exchangeable for Common Stock of the Company.

Prior to this offering, there has not been any public market for the
Common Stock of the Company. Consequently, the initial public offering price
for the shares of Common Stock included in this offering will be determined
by negotiations between the Company and the Representatives. Among the
factors to be considered in determining such price are the history of and
prospects for the Company's business and the industry in which it competes,
an assessment of the Company's management and the present state of the
Company's development, the past and present revenues and earnings of the
Company, the prospects for the growth of the Company's revenues and earnings,
the current state of the economy in the United States and the current level
of economic activity in the industry in which the Company competes and in
related or comparable industries, and currently prevailing conditions in the
securities markets, including current market valuations of publicly traded
companies that are comparable to the Company.

The Company and Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

LEGAL MATTERS

Steel Hector & Davis LLP, Miami, Florida, has rendered an opinion as to
the validity of the shares of Common Stock offered hereby. Certain legal
matters relating to this offering will be passed upon for the Underwriters by
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, Florida.

EXPERTS

The consolidated financial statements as of December 31, 1994 and 1995 and
for each of the three years in the period ended December 31, 1995 included in
this Prospectus have been so included in reliance on the report of Price
Waterhouse LLP, independent certified public accountants, given on the
authority of said firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission in
Washington, D.C. a Registration Statement on Form S-1 under the Securities
Act with respect to the shares of Common Stock offered in the offering. This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain items
of which are omitted in accordance with the rules and regulations of the
Commission. Statements contained in this Prospectus concerning the provisions
or contents of any contract or other document referred to herein are not
necessarily complete. With respect to each such contract, agreement, or
document filed as an exhibit to the Registration Statement, reference is made
to such exhibit for a more complete description, and each such statement is
deemed to be qualified in all respects by such reference.

The Registration Statement and the exhibits and schedules thereto filed
with the Commission may be inspected, without charge, at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at Seven World Trade Center, 13th Floor, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates.

The Company intends to furnish its shareholders with annual reports
containing financial statements audited by the Company's independent
accountants and quarterly reports for the first three quarters of each year
containing unaudited interim financial information.

46
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
---------
Report of Independent Certified Public Accountants ................ F-2

Consolidated Balance Sheets as of December 31, 1994 and 1995 ...... F-3

Consolidated Statements of Income for the Years Ended
December 31, 1993, 1994 and 1995 ................................. F-4

Consolidated Statement of Changes in Common Stock and
Other Stockholders' Equity (Deficit) for the Years Ended
December 31, 1993, 1994 and 1995 ................................. F-5

Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995 ................................. F-6

Notes to Consolidated Financial Statements ......................... F-7

F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
The Vincam Group, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of changes in common stock and
other stockholders' equity (deficit) and of cash flows present fairly, in all
material respects, the financial position of The Vincam Group, Inc. and its
subsidiaries at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. 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 generally accepted auditing standards 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.

PRICE WATERHOUSE LLP

Miami, Florida
February 2, 1996, except as to
Note 13 which is as of April 26, 1996

F-2
<PAGE>
THE VINCAM GROUP, INC.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, PRO FORMA
--------------------------- DECEMBER 31,
1994 1995 1995
----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................... $ 736,420 $ 912,272 $ 912,272
Restricted cash ......................................... 4,250,958 4,064,040 4,064,040
Accounts receivable, less allowance for doubtful
accounts of $84,747 and $184,591 in 1994 and 1995,
respectively ........................................ 5,925,690 8,289,556 8,289,556
Due from affiliates ..................................... 233,612 101,095 101,095
Deferred taxes .......................................... 690,788 774,783 774,783
Prepaid expenses and other current assets ............... 152,485 378,686 378,686
----------- ----------- -----------
Total current assets ................................ 11,989,953 14,520,432 14,520,432
Property and equipment, net ............................... 2,088,999 2,507,025 2,507,025
Deferred taxes ............................................ 516,747 451,529 451,529
Contract acquisition costs and other assets ............... 191,384 339,805 339,805
----------- ----------- -----------
$14,787,083 $17,818,791 $17,818,791
=========== =========== ===========
LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses ................... $ 846,088 $ 1,302,665 $ 1,302,665
Accrued salaries, wages and payroll taxes ............... 4,779,094 6,618,291 6,618,291
Reserve for claims ...................................... 1,727,422 2,137,149 2,137,149
Income taxes payable .................................... 584,742 141,987 141,987
Current portion of long term borrowings ................. 50,004 1,305,362 1,305,362
Distribution payable .................................... -- 700,000 700,000
Deferred compensation, due principally to stockholders . -- 263,000 263,000
----------- ----------- -----------
Total current liabilities ........................... 7,987,350 12,468,454 12,468,454
Long term borrowings, less current portion ................ 945,732 1,100,972 1,100,972
Reserve for claims ........................................ 939,223 1,010,792 1,010,792
Income taxes payable ...................................... 924,215 1,386,323 1,386,323
Distribution payable ...................................... 700,000 -- --
Deferred compensation, due principally to stockholders ... 557,300 294,300 294,300
Other liabilities ......................................... 85,338 45,338 45,338
----------- ----------- -----------
Total liabilities ................................... 12,139,158 16,306,179 16,306,179
----------- ----------- -----------
Commitments and contingencies (Note 12) ................... -- -- --
----------- ----------- -----------
Preferred stock, $.01 par value, 500,000 shares authorized,
165.376 shares mandatorily redeemable Series A Preferred
Stock issued and outstanding ............................ -- 6,263,610 --
----------- ----------- -----------
Common stock and other stockholders' equity (deficit):
Common stock, $.001 par value, 39,500,000 shares
authorized, 6,249,339 and 4,956,066 shares issued and
outstanding in 1994 and 1995, respectively ............ 6,249 4,956 6,000
Additional paid in capital .............................. 42,156 -- 6,262,566
Retained earnings (accumulated deficit) ................. 2,599,520 (4,755,954) (4,755,954)
----------- ----------- -----------
Total common stock and other
stockholders' equity (deficit) ...................... 2,647,925 (4,750,998) 1,512,612
----------- ----------- -----------
$14,787,083 $17,818,791 $17,818,791
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>
THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Revenues ............................................ $138,097,047 $191,532,568 $239,407,710
------------ ------------ ------------
Direct costs:

Salaries, wages and employment taxes
of worksite employees ............................. 121,179,919 168,873,997 212,478,971

Health care and workers' compensation .............. 8,953,721 10,348,787 12,339,677

State unemployment taxes and other ................. 978,211 1,594,831 1,646,250
------------ ------------ ------------

Total direct costs ................................ 131,111,851 180,817,615 226,464,898
------------ ------------ ------------

Gross profit ........................................ 6,985,196 10,714,953 12,942,812
------------ ------------ ------------

Operating expenses:

Administrative personnel ........................... 3,154,494 3,998,504 6,267,921

Other general and administrative ................... 983,337 2,343,131 3,207,004

Sales and marketing ................................ 640,091 1,376,383 1,724,361

Provision for doubtful accounts .................... 30,000 40,000 165,000

Depreciation and amortization ...................... 88,045 204,911 337,837
------------ ------------ ------------

Total operating expenses .......................... 4,895,967 7,962,929 11,702,123
------------ ------------ ------------

Operating income .................................... 2,089,229 2,752,024 1,240,689

Interest (expense) income, net ...................... (43,676) (19,025) 38,371
------------ ------------ ------------

Income before taxes ................................. 2,045,553 2,732,999 1,279,060

Provision for income taxes .......................... (704,237) (933,049) (469,223)
------------ ------------ ------------

Net income .......................................... $ 1,341,316 $ 1,799,950 $ 809,837
============ ============ ============

Net income per common and common equivalent share .. $ 0.20 $ 0.27 $ 0.13
============ ============ ============

Weighted average number of shares outstanding used
in earnings per share calculation ................. 6,697,770 6,697,770 6,462,092
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>
THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN COMMON
STOCK AND OTHER STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
RETAINED
COMMON STOCK ADDITIONAL EARNINGS
---------------------------- PAID IN (ACCUMULATED
SHARES PAR VALUE CAPITAL DEFICIT) TOTAL
-------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 ............. 5,996,843 $ 5,997 $ 158,254 $ 164,251

Issuance of shares in connection with
acquisition of minority interest .... 252,498 252 $ 42,156 -- 42,408

Distribution of option to acquire land
and building ......................... -- -- -- (700,000) (700,000)

Net income ............................. -- -- -- 1,341,316 1,341,316
--------- ------- -------- ----------- -----------

Balance at December 31, 1993 ........... 6,249,341 6,249 42,156 799,570 847,975

Net income ............................. -- -- -- 1,799,950 1,799,950
--------- ------- -------- ----------- -----------

Balance at December 31, 1994 ........... 6,249,341 6,249 42,156 2,599,520 2,647,925

Acquisition of shares .................. (249,342) (249) (42,156) (1,457,595) (1,500,000)

Recapitalization, including transaction
costs of $445,150 charged to retained
earnings ............................. (1,043,933) (1,044) -- (6,707,716) (6,708,760)

Net income ............................. -- -- -- 809,837 809,837
--------- ------- -------- ----------- -----------

Balance at December 31, 1995 ........... 4,956,066 $ 4,956 $ -- $(4,755,954) $(4,750,998)
========= ======= ======== =========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>
THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1993 1994 1995
-------------- ------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ................................................ $ 1,341,316 $ 1,799,950 $ 809,837
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization ............................ 88,045 204,911 337,837
Provision for doubtful accounts .......................... 30,000 40,000 165,000
Deferred income tax expense (benefit) .................... 573,739 (280,864) (18,777)
Changes in assets and liabilities: .......................
(Increase) decrease in restricted cash .................. (1,696,206) (2,279,752) 186,918
Increase in accounts receivable ......................... (2,628,173) (1,720,670) (2,528,866)
(Increase) decrease in due from affiliates .............. (110,372) (68,504) 9,440
Decrease (increase) in prepaid expenses and
other current assets ................................... 162,973 5,346 (226,201)
Increase in other assets ................................ (61,375) (81,658) (30,981)
Increase (decrease) in accounts payable and
accrued expenses ....................................... 804,192 (536,590) 456,577
Increase in accrued salaries, wages, and payroll taxes . 1,545,840 1,792,881 1,839,197
Increase in reserve for claims .......................... 132,454 1,448,411 481,296
(Decrease) increase in income taxes payable ............. (149,810) 191,103 19,353
Increase (decrease) in other liabilities ................ 324,936 25,104 (40,000)
----------- ----------- -----------
Net cash provided by operating activities .................. 357,559 539,668 1,460,629
----------- ----------- -----------
Cash flows from investing activities:
Purchases of property and equipment ....................... (1,474,844) (736,645) (421,809)
Contract acquisition costs ................................ -- -- (117,440)
(Issuance) collection of notes receivable from
stockholders ............................................ (53,500) (123,078) 123,078
----------- ----------- -----------
Net cash used in investing activities ...................... (1,528,344) (859,723) (416,171)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from the issuance of notes payable ............... 970,833 -- --
Principal payments on borrowings .......................... (76,532) (182,966) (123,456)
Recapitalization costs .................................... -- -- (445,150)
Cash paid in connection with acquisition of stock ........ -- -- (300,000)
----------- ----------- -----------
Net cash provided by (used in) financing activities ....... 894,301 (182,966) (868,606)
----------- ----------- -----------
Net (decrease) increase in cash and cash equivalents ...... (276,484) (503,021) 175,852
Cash and cash equivalents, beginning of year ............... 1,515,925 1,239,441 736,420
----------- ----------- -----------
Cash and cash equivalents, end of year ..................... $ 1,239,441 $ 736,420 $ 912,272
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest .................................................. $ 55,342 $ 91,766 $ 183,242
=========== =========== ===========
Income taxes .............................................. $ 220,000 $ 1,017,438 $ 470,000
=========== =========== ===========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON CASH FINANCING ACTIVITIES:

In January 1995, the Company issued a subordinated note payable for
$1,200,000 as partial consideration for shares reacquired by the Company.

During February 1995, the Company and its stockholders entered into an
Agreement and Plan of Recapitalization whereby the Company's stockholders
exchanged a portion of their shares of common stock for approximately 166
shares of Series A Participating Convertible Preferred Stock valued at
approximately $6,264,000.

During 1995, the Company acquired $334,054 of computer hardware and software
under a capital lease agreement.

During 1993, the Company recorded a $700,000 distribution liability related
to an option held by an entity controlled by the Company's principal
stockholders to purchase the land and building owned by the Company.

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>
THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995

NOTE 1--NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Vincam Group, Inc. and its subsidiaries (the Company) are a
professional employer organization (PEO) engaged primarily in the provision
of human resource management and personnel administration services. In
addition, the Company provides certain managed care services, including
managed behavioral health care, employee assistance programs, drug-free
workplace programs, utilization review services, comprehensive workers'
compensation managed care, risk management and loss containment services.

The Company provides PEO services to small and medium sized companies in a
variety of industries, including manufacturing, retail, and hospitality.
Managed care services are provided to PEO clients and to health and workers'
compensation insurance companies, health maintenance organizations, other
managed care providers and large, self insured employers.

PEO service contracts with client companies are generally for one year
terms with automatic renewal options and subject to termination on a 30 days'
notice by either party during the first year and annually thereafter.
Behavioral health care contracts with clients are for terms of one or more
years and are subject to cancellation by either party upon 30 to 180 days'
notice depending on the nature of the services provided.

The Company does not have a concentration of customers in any one
industry; however, during 1994 and 1995, a significant portion of the
Company's revenues were generated in South Florida. The Company's revenues
are generated predominantly by VHR.

A summary of the significant accounting policies followed in the
preparation of the accompanying consolidated financial statements is
presented below:

PRINCIPLES OF CONSOLIDATION. The accompanying financial statements include
the accounts of The Vincam Group, Inc. and its principal subsidiaries, Vincam
Human Resources, Inc. (VHR), Psych/Care, Inc. (Psych/Care) and Vincam
Occupational Health Services, Inc. (VOHS). All material intercompany balances
and transactions have been eliminated.

REVENUE RECOGNITION. Revenues and the related costs of wages, salaries,
and employment taxes from professional employer services related to worksite
employees are recognized in the period in which the employee performs the
service. Because the Company is at risk for all of its direct costs,
independently of whether payment is received from its clients, and consistent
with industry practice, all amounts billed to clients for gross salaries and
wages, related employment taxes, and health care and workers' compensation
coverage are recognized as revenue by the Company. The Company establishes a
reserve for doubtful accounts when it determines that collection from a
client is unlikely.

Revenues from behavioral health services are recognized during the period
in which the Company is obligated to provide behavioral health services to
participants. Risk management, loss containment and workers' compensation
managed care services are recognized in the period in which the services are
performed.

ACCOUNTING ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The more significant estimates relate
to the Company's reserve for claims. Actual results could differ from those
estimates.

F-7
<PAGE>
RESERVE FOR CLAIMS. The Company's workers' compensation benefits and
certain of its health care benefits are provided under large deductible
insured plans. The Company records reserves for workers' compensation and
health care claims costs based on actuarial calculations using the Company's
loss history of workers' compensation and health care claims. Prior to 1993,
the Company was fully-insured for health care claims. Prior to 1994, the
Company's workers' compensation insurance was under a loss-sensitive
retrospectively rated plan which provided for retroactive premium adjustments
based on actual loss experience.

In all cases regarding workers' compensation and health care claims,
reserves are established at the time a participant files a claim.
Furthermore, the Company, in determining its reserves, includes reserves for
estimated claims incurred but not reported. The Company records reserves for
estimated behavioral health care costs based on a diagnosis of participants'
needs.

At December 31, 1994 and 1995, the Company has classified as current the
estimated amounts of reserves established for claims expected to be paid
within one year.

The Company's estimates of its claims reserves, including its estimate of
incurred but not reported claims, are based primarily on its loss history.
The ultimate cost of health care (including behavioral health) and workers'
compensation claims will depend on actual costs incurred in settling the
claims and may differ from the amounts reserved by the Company for those
claims.

PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost.
Depreciation and amortization are computed using the straight line method
over the estimated useful lives of the respective assets. Repairs and
maintenance are charged to expense as incurred, while expenditures which
extend the useful lives of the assets are capitalized.

ADVERTISING COSTS. Advertising expenditures are charged to operations as
incurred. Advertising expense amounted to $56,124, $333,600 and $386,123 in
1993, 1994 and 1995, respectively.

CONTRACT ACQUISITION COSTS. Costs incurred in connection with the
acquisition of client contracts from other professional employer
organizations are capitalized and amortized using the straight line method
over 5 years, the period of non solicitation stipulated in the acquisition
agreement. The Company periodically assesses the status of contracts acquired
to determine the future realizability of the capitalized costs. At December
31, 1995, the Company had recorded contract acquisition costs of $117,440 and
included these amounts in other assets in the accompanying balance sheet.

CASH AND CASH EQUIVALENTS. The Company has defined cash and cash
equivalents as those highly liquid investments with an original maturity of
three months or less.

INCOME TAXES. The Company records income tax expense using the liability
method of accounting for deferred income taxes. Under the liability method,
deferred tax assets and liabilities are recognized for the expected future
tax consequences of temporary differences between the financial statement and
income tax bases of the Company's assets and liabilities. An allowance is
recorded when it is more likely than not that any or all of a deferred tax
asset will not be realized. The provision for income taxes includes taxes
currently payable plus the net change during the year in deferred tax assets
and liabilities recorded by the Company.

The Company is subject to certain state taxes based on gross receipts,
payroll and taxable income within that state. Taxes based on gross receipts
and payroll are classified as salaries, wages and

F-8
<PAGE>
employment taxes of worksite employees in the accompanying consolidated
statements of income, while taxes based on income are included in the
provision for income taxes.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE. Net income per common
and common equivalent share has been computed based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during each of the three years ended December 31, 1995. The Company has
considered as outstanding common stock equivalents during those years,
627,328 net shares of common stock, after adjusting for the effect of certain
stock splits described below, subject to options awarded to employees and
directors of the Company during 1995 and 1996 prior to the Company's
anticipated initial public offering (see Notes 8 and 13), net of shares
assumed to be reacquired under the treasury stock method. For purposes of the
calculation of net income per share, the mandatorily redeemable preferred
stock is also considered a common stock equivalent.

Net income per common and common equivalent share amounts for each of the
years presented have been calculated giving retroactive effect to an
approximate 8,417 to 1 stock split effected by the Company in June 1995 and a
3 for 4 split effected on February 21, 1996 (jointly, the Stock Splits, see
Notes 7 and 13). All common and common equivalent share amounts have also
been retroactively adjusted to reflect the Stock Splits.

Assuming the Company's contemplated public offering and the related
payment of the subordinated note payable had taken place on January 1, 1995,
the Company would have had net income per common and common equivalent share
of $0.13. Such supplemental net income per common and common equivalent share
is based on the number of shares of Common Stock used in the calculation of
the net income per common and common equivalent share (6,462,092) plus the
number of shares (85,715) required to be sold by the Company to fund the
repayment of the $1.2 million note after giving effect to the interest
savings of $46,683 (net of taxes) for fiscal 1995 resulting from such pro
forma reduction of indebtedness.

STOCK BASED COMPENSATION. In October 1995, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards No.
123, Accounting For Stock Based Compensation (SFAS 123). SFAS 123, the
disclosure provisions of which must be implemented for fiscal years beginning
subsequent to December 15, 1995, establishes a fair value based method of
accounting for stock based compensation plans, the effect of which can either
be disclosed or recorded. The Company will adopt the provisions of SFAS 123
in 1996. Upon adoption, the Company intends to retain the intrinsic value
method of accounting for stock based compensation, which it currently uses.

FAIR VALUE OF FINANCIAL INSTRUMENTS. The Company's financial instruments
consist primarily of instruments without extended maturities whose fair value
equals their carrying value.

NOTE 2--RESTRICTED CASH

The Company had cash deposits at December 31, 1994 and 1995 in the amount
of $3,230,958 (of which $740,290 were time deposits) and $4,000,000,
respectively, which serve as collateral on certain standby letters of credit
issued in connection with the Company's workers' compensation insurance plan
(see Note 5). These cash deposits have been classified as restricted cash in
the accompanying consolidated balance sheets.

Under its prior agreement with its workers' compensation insurance
carrier, the Company was required to deposit in escrow certain amounts as
collateral to guarantee the payment of workers'

F-9
<PAGE>
compensation claims. At December 31, 1994 and 1995, the Company had deposited
in escrow $1,020,000 and $64,040, respectively, and classified these amounts
as restricted cash as of that date. No such escrow deposits are required
under the Company's current agreement with its workers' compensation
insurance carrier.

NOTE 3--PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of December 31:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES
1994 1995 (IN YEARS)
------------- ------------ ---------------
<S> <C> <C> <C>
Land ........................................... $ 284,374 $ 284,374
Building ....................................... 775,158 775,158 30
Building improvements .......................... 510,232 510,232 7
Furniture and fixtures ......................... 217,705 308,924 5
Office and computer equipment .................. 695,040 1,353,926 3-5
Vehicles ....................................... 20,249 20,249 3
---------- ----------
2,502,758 3,252,863
Less: accumulated depreciation and amortization (413,759) (745,838)
---------- ----------
$2,088,999 $2,507,025
========== ==========
</TABLE>

At December 31, 1995, gross fixed assets included $346,690 of office and
computer equipment under capital lease obligations.