VINCAM GROUP INC, 10-Q, 1998-11-16

VINCAM GROUP INC
10-Q, 1998-11-16
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
x Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1998

o Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _____ to _____

Commission File Number 0-28148

THE VINCAM GROUP, INC.
(Exact name of registrant as specified in its charter)

Florida 59-2452823
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

10200 Sunset Drive Miami, Florida 33173
(Address of principal executive offices) (Zip Code)

(305) 630-1000
(Registrant's telephone number, including area code)

2850 Douglas Road Coral Gables, Florida 33134 (Former name,
former address, and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

As of November 10, 1998, The Vincam Group, Inc. had 15,695,557 shares of
common stock, $.001 par value, outstanding.

1
<PAGE>

THE VINCAM GROUP, INC.

FORM 10-Q

TABLE OF CONTENTS

Page

Part I Financial Information

Item 1. Financial Statements.................................. 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 15

Part II Other Information

Item 5. Other Information..................................... 25
Item 6. Exhibits and Reports on Form 8-K...................... 25

Signatures ...................................................... 26

2
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS
Page
The Vincam Group, Inc.

Unaudited Consolidated Balance Sheets as of September 30,
1998 and December 31, 1997................................... 4

Unaudited Consolidated Statements of Operations for the
Three and the Nine Months Ended September 30, 1998 and 1997.. 5

Unaudited Consolidated Statement of Changes in Stockholders'
Equity for the Nine Months Ended September 30, 1998.......... 6

Unaudited Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1998 and 1997................ 7

Notes to Consolidated Financial Statements (Unaudited)......... 8

3
<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED BALANCE SHEETS

September 30, December 31,
1998 1997
-------------- --------------
(Unaudited)
Assets

Current assets:
Cash and cash equivalents .............. $ 9,129,004 $ 4,934,755
Investments ............................ -- 1,766,737
Accounts receivable, net ............... 59,718,401 48,924,247
Due from affiliates .................... 130,168 561,673
Income tax receivable .................. -- 1,536,371
Deferred taxes ......................... 735,488 735,488
Reinsurance recoverable ................ 641,867 1,692,513
Prepaid workers' compensation
insurance premium ..................... 7,403,878 14,467,403
Prepaid expenses and other current
assets ................................ 6,861,282 3,020,745
------------- -------------
Total current assets ............ 84,620,088 77,639,932

Property and equipment, net ............ 8,445,414 7,852,498
Deferred taxes ......................... 640,735 640,735
Goodwill and client contracts, net ..... 7,024,008 7,384,323
Other assets ........................... 1,509,902 1,498,438
------------- -------------
$102,240,147 $ 95,015,926
============= =============

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable and accrued expenses .. $ 3,961,515 $ 4,712,931
Accrued salaries, wages and payroll
taxes ................................. 51,050,338 39,887,369
Reserve for claims ..................... 2,734,745 4,106,734
Income tax payable ..................... 2,254,214 --
Current portion of borrowings .......... 385,410 11,061,009
Deferred gain .......................... 83,894 460,294
------------- -------------
Total current liabilities ....... 60,470,116 60,228,337

Long term borrowings, less current
portion ............................... 1,537,495 36,818
Reserve for claims ..................... -- 402,000
Other liabilities ...................... 891,548 1,038,037
------------- -------------
Total liabilities ............... 62,899,159 61,705,192
------------- -------------
Commitments and contingencies (Note 6) . -- --
------------- -------------

Stockholders' equity:
Common stock, $.001 par value,
60,000,000 shares authorized,
15,695,557 shares issued and ........ 15,695 15,391
Additional paid in capital ........... 35,523,926 35,142,798
Retained earnings (accumulated deficit) 3,801,367 (1,847,455)
------------- -------------
Total stockholders' equity ...... 39,340,988 33,310,734
------------- -------------
$102,240,147 $ 95,015,926
============= =============

4
<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues ................................ $ 314,839,415 $ 244,716,560 $ 910,630,869 $ 699,820,528
-------------- -------------- -------------- --------------

Direct costs:
Salaries, wages and employment
taxes of worksite employees ....... 282,406,566 218,754,338 816,350,786 623,585,116
Health care and workers' compensation 13,178,070 9,655,768 35,946,344 27,291,317
State unemployment taxes and other .. 2,472,245 2,430,250 9,527,310 7,499,031
-------------- -------------- -------------- --------------
Total direct costs ............ 298,056,881 230,840,356 861,824,440 658,375,464
-------------- -------------- -------------- --------------
Gross profit ............................ 16,782,534 13,876,204 48,806,429 41,445,064
-------------- -------------- -------------- --------------
Operating expenses:
Administrative personnel ............ 6,688,140 6,324,973 19,638,749 18,342,361
Other general and administrative .... 3,002,714 3,047,544 9,541,393 10,934,117
Sales and marketing ................. 2,074,037 1,663,650 5,936,573 5,107,920
Provision for doubtful accounts ..... 276,830 326,454 695,458 883,710
Depreciation and amortization ....... 754,899 895,227 2,211,103 2,648,177
-------------- -------------- -------------- --------------
Total operating expenses ...... 12,796,620 12,257,848 38,023,276 37,916,285
-------------- -------------- -------------- --------------
Operating income ........................ 3,985,914 1,618,356 10,783,153 3,528,779
Interest (expense) income, net .......... (24,815) 9,486 (98,599) 268,877
-------------- -------------- -------------- --------------
Income before taxes ..................... 3,961,099 1,627,842 10,684,554 3,797,656
Provision for income taxes .............. (1,470,000) (599,609) (4,034,000) (1,653,107)
-------------- -------------- -------------- --------------
Net income .............................. $ 2,491,099 $ 1,028,233 $ 6,650,554 $ 2,144,549
============== ============== ============== ==============
Basic net income per common share ....... $ 0.16 $ 0.07 $ 0.43 $ 0.14
============== ============== ============== ==============
Weighted average number of shares
outstanding used in basic earnings
per share calculation ............... 15,682,656 15,309,704 15,625,365 15,164,651
============== ============== ============== ==============
Diluted net income per common share ..... $ 0.16 $ 0.06 $ 0.41 $ 0.14
============== ============== ============== ==============
Weighted average number of shares
outstanding used in diluted earnings
per share calculation ............... 16,057,480 15,962,787 16,092,736 15,964,380
============== ============== ============== ==============
</TABLE>
5
<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)

<TABLE>
<CAPTION>
Retained
Common Stock Additional Earnings
---------------------------- Paid in (Accumulated
Shares Par Value Capital Deficit) Total
------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 ...... 15,390,880 $ 15,391 $ 35,142,798 $ (1,847,455) $ 33,310,734

Issuance of common stock under
acquisition agreements ........... 150,000 150 (1,001,732) (1,001,582)

Issuance of common stock to
employees under stock option plans 154,677 154 381,128 -- 381,282

Net income ........................ -- -- -- 6,650,554 6,650,554
------------- ------------- ------------- -------------- -------------
Balance at September 30, 1998 ..... 15,695,557 $ 15,695 $ 35,523,926 $ 3,801,367 $ 39,340,988
============= ============= ============= ============== =============
</TABLE>
6
<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income ................................................ $ 6,650,554 $ 2,144,549
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ........................... 2,211,103 2,648,177
Provision for doubtful accounts ......................... 695,458 883,710
Deferred gain ........................................... (376,400) 100,108
Deferred income tax expense ............................. -- 1,631,482
Changes in assets and liabilities:
Increase in restricted cash ........................... -- (204,651)
Increase in accounts receivable ....................... (11,489,612) (14,222,841)
Decrease in due from affiliates ....................... 431,505 543,300
Decrease in income tax receivable ..................... 1,536,371 --
Decrease in reinsurance recoverable ................... 1,050,646 143,049
Decrease in prepaid workers' compensation
insurance premium ................................... 7,063,525 3,746,188
Increase in prepaid expenses and other current assets . (3,840,537) (982,950)
Increase in other assets .............................. (88,514) (792,866)
Decrease in accounts payable and accrued expenses ..... (751,416) (918,555)
Increase in accrued salaries, wages and payroll taxes . 10,853,099 8,314,005
Decrease in reserve for claims ........................ (2,465,704) (4,550,811)
Increase (decrease) in income taxes payable ........... 2,254,214 (530,250)
Decrease in deferred compensation ..................... -- (276,596)
Decrease in other liabilities ......................... (146,489) (554,846)
------------- -------------
Net cash provided by (used in) operating activities .......... 13,587,803 (2,879,798)
------------- -------------
Cash flows from investing activities:
Purchases of property and equipment ....................... (2,366,654) (3,434,770)
Redemption (purchases) of short term investments .......... 1,766,737 (415,227)
------------- -------------
Net cash used in investing activities ........................ (599,917) (3,849,997)
------------- -------------
Cash flows from financing activities:
Principal payments on borrowings .......................... (10,560,576) (92,598)
Borrowings to finance insurance premiums ................... 1,385,657 --
Notes payable to affiliate ................................ -- (1,018,000)
Payment of amounts due under acquisition agreements ....... -- (1,721,050)
Initial public offering costs charged to paid in capital .. -- (66,035)
Issuance of common stock to employees under stock plans ... 381,282 387,225
------------- -------------
Net cash used in financing activities ........................ (8,793,637) (2,510,458)
------------- -------------
Net increase (decrease) in cash and cash equivalents ......... 4,194,249 (9,240,253)
Cash and cash equivalents, beginning of period ............... 4,934,755 18,884,531)
------------- -------------
Cash and cash equivalents, end of period ..................... $ 9,129,004 $ 9,644,278
============= =============
</TABLE>

Supplemental disclosure of non-cash financing activities:

On January 7, 1997, the Company acquired the 49% minority interest in Staff
Administrators of Western Colorado, Inc., a subsidiary of Staff Administrators,
Inc. ("SAI"), in a transaction accounted for as a purchase. The fair value of
the net assets acquired amounted to $293,359. The excess of $566,641 of the
purchase price over the net assets acquired was allocated to goodwill.

7
<PAGE>

THE VINCAM GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 and December 31, 1997
(Unaudited)

Note 1 - Basis for Presentation of Consolidated Financial Statements

The accompanying unaudited consolidated financial statements of The Vincam
Group, Inc. and its subsidiaries ("Vincam" or the "Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. They do not include all information and notes required by
generally accepted accounting principles for complete financial statements and
should be read in conjunction with the audited consolidated financial statements
and notes thereto for the year ended December 31, 1997 included in The Vincam
Group, Inc.'s Annual Report on Form 10-K, as amended by Form 10-K/A No.1. The
financial information furnished reflects all adjustments, consisting only of
normal recurring accruals, which are, in the opinion of management, necessary
for a fair presentation of the financial position, results of operations and of
cash flows for the interim periods presented. The results of operations for the
periods presented are not necessarily indicative of the results for the entire
year.

The accompanying unaudited financial statements include the accounts of The
Vincam Group, Inc. and its subsidiaries. All material intercompany balances and
transactions have been eliminated.

Certain reclassifications have been made to the consolidated financial
statements of prior periods presented to conform to the current period
presentation.

Note 2 - Accounts Receivable

At September 30, 1998 and December 31, 1997, accounts receivable consisted
of the following:

1998 1997
------------- -------------
Billed to clients ................... $ 12,527,065 $ 16,149,364
Unbilled revenues ................... 49,567,416 34,801,470
------------- -------------
62,094,481 50,950,834
Less: allowance for doubtful accounts (2,376,080) (2,026,587)
------------- -------------
$ 59,718,401 $ 48,924,247
============= =============
Note 4 - Reserve for Claims

In December 1996, the Company entered into an arrangement with a national
insurance company to provide workers' compensation insurance coverage at a cost
which is equal to a fixed percentage of the average standard premium for 1997
through 1999, subject to a deductible of only $2,000 per medical claim. The
workers' compensation arrangement, originally covering the years 1997 through
1999, now includes coverage through the year 2000 under certain revised terms
and conditions. The arrangement remains a guaranteed cost program. Accordingly,
effective January 1, 1997, the Company recorded workers' compensation costs
based primarily on the fixed percentage of the average standard premium under
such policy, rather than through the previous practice of applying actuarial
estimates to claims.

8
<PAGE>

In addition, in December 1996, March 1997, September 1997 and December
1997, the Company entered into agreements to reinsure substantially all of the
remaining claims under the Company's large deductible workers' compensation
insurance policies for the years 1994, 1995 and 1996 (including those of
acquired companies), for an aggregate premium of $6,010,000. Since reserves for
claims for these years have been previously provided, the Company has recorded
the premium as a reinsurance receivable and a deferred gain which will be
recognized to income in future periods based on the proportion of cumulative
claims paid to the total estimated liability for claims.

As a consequence of the reinsurance agreement described above, at September
30, 1998 and December 31, 1997, the Company has classified as current the
estimated amounts of reserves established for claims and reinsurance recoverable
expected to be paid and to be collected, respectively, within one year, as well
as the related deferred gain expected to be recognized within one year.

At September 30, 1998 and December 31, 1997, the Company's reserves for
claims costs are as follows:

1998 1997
------------ ------------

Reserve for workers' compensation claims .... $ 950,664 $ 2,035,477
Reserve for behavioral and health care claims 1,784,081 2,473,257
------------ ------------
2,734,745 4,508,734
Less: workers' compensation claims expected
to be settled in more than one year ......... -- (402,000)
------------ ------------
Reserve for claims--current ................. $ 2,734,745 $ 4,106,734
============ ============
9
<PAGE>

Note 5 - Borrowings

Borrowings at September 30, 1998 and December 31, 1997 are as follows:

1998 1997
------------ ------------
Note payable for workers' compensation premiums,
maturing in 1998, with monthly payments of principal
and interest of $1,144,534, at a rate of 6.30% ....... $ -- $10,035,123

Notes payable for insurance premiums, with monthly
payments of principal and interest ranging from
$7,596 to $29,215, at rates ranging from 6.31%
to 6.95%, maturing through 2001 ...................... 1,140,763 173,526

Note payable to bank, original amount of
$1 million, repayable in monthly instalments
of $4,167, plus interest at 8.50% per annum,
through 1998 when a balloon payment of $750,000
is due, secured by land and building ................. 754,054 791,557

Note payable for state unemployment taxes,
maturing in 1998 with monthly payments of $3,264 ..... -- 16,326

Capital lease obligations for computer hardware
and software, payable in monthly instalments of
principal and interest ranging from $3,214 to
$7,479 through 2000, with interest rates ranging
from 9.80% to 12.30% per annum, collateralized
by computer hardware and software .................... -- 46,276

Other notes payable, bearing
interest at rates ranging from 7.50% to 10.75%,
repayable in various monthly instalments ............. 28,088 35,019
------------ ------------
1,922,905 11,097,827
Less: current portion ................................ (1,922,905) (11,061,009)
------------ ------------
$ -- $ 36,818
============ ============

In April 1997, the Company entered into a revolving line of credit
agreement for an aggregate amount of $50,000,000 with a group of banks (the
"Credit Agreement"). The Credit Agreement provides for a revolving credit
facility with a sublimit of $15,000,000 to fund working capital advances and
standby letters of credit. The Credit Agreement also provides for advances to
finance acquisitions. Amounts outstanding under the revolving credit facility
mature on April 24, 2000. If, on April 24, 2000, certain conditions are
satisfied, any amounts outstanding under the revolving line of credit may be
converted into a term loan payable in eight quarterly instalments commencing on
August 1, 2000. The Company is required to pay an unused facility fee ranging
from .20% to .35% per annum on the facility, depending upon certain financial
covenants.

10
<PAGE>

The Credit Agreement is secured by a pledge of shares of all of the
Company's subsidiaries. The Credit Agreement contains customary events of
default and covenants which prohibit, among other things, incurring additional
indebtedness in excess of a specified amount, paying dividends, creating liens
and engaging in certain mergers or combinations without the prior written
consent of the lenders. The Credit Agreement also contains certain financial
covenants relating to current ratio, debt to capital ratio, debt and fixed
charges coverage and minimum tangible net worth, as defined in the Credit
Agreement.

Interest under the Credit Agreement accrues at rates based, at the
Company's option, on the agent bank's Prime Rate plus a margin of as much as
.25%, or its Eurodollar Rate (as defined in the Credit Agreement) plus a margin
of 1.00% to 1.75%, depending on certain financial covenants.

Under the Company's revolving credit facility, the Company had outstanding
$5,494,700 in standby letters of credit at September 30, 1998, which guarantee
the payment of claims to the Company's former workers' compensation insurance
carrier. As of that date there were no amounts outstanding for working capital
or advances to finance acquisitions under the revolving credit facility.

Note 6 - Commitments and Contingencies

On December 9, 1997, the Company entered into a leasing arrangement with
respect to a new headquarters facility in Miami-Dade County which the Company
moved into in November 1998. The leasing arrangement has an initial expiration
date of four years after completion of the facility and allows the Company to
extend the term of the lease for up to three more years subject to compliance
with the terms and conditions of the credit agreement and related documents. The
lessor of the facility has financed 97% of the costs of acquiring the land and
constructing the facility. The financing agreement relating to the facility (the
"Facility Financing Agreement") contains certain covenants, including financial
covenants, of the Company and events of default with respect thereto, which
covenants are the same in all material respects as those contained in the
Company's Credit Agreement. Under the leasing arrangement, the Company's
commitment in future years will be based on (i) interest at a competitive rate
on all outstanding loan amounts with respect to the facility plus (ii) the
yield, at a competitive rate, in respect of the lessor's 3% equity investment.
Default under the Company's covenants contained in the Facility Financing
Agreement constitutes default under the Company's lease of the headquarters
facility. In the event of such default, the Company is obligated to either
purchase the facility for the Purchase Price (defined below) or pay a
termination fee in an amount approximately equal to the Purchase Price. The
maximum amount on which the lease payments will be based is currently limited to
$12,000,000, but will be increased to approximately $12,850,000 upon execution
of a pending amendment to the Facility Financing Agreement to accommodate
financing for certain miscellaneous expenditures related to the headquarter
facility. As of September 30, 1998, an aggregate of $9,148,375 in loans were
outstanding to the lessor.

The Company has an option to purchase the headquarters facility at any time
for an amount equal to the total of (i) the amount of loans outstanding with
respect to the property, (ii) the lessor's investment in the facility, (iii) any
accrued and unpaid interest on such outstanding loans, and (iv) all accrued and
unpaid yield on the lessor's equity investment (the "Purchase Price"). If the
Company determines not to purchase the facility, it will be required to make a
termination payment at the end of the lease term equal to approximately 85% of
the Purchase Price. The Company's lease payment obligations are secured by a
pledge of the stock of all of its subsidiaries.

11
<PAGE>

In October 1996, the Company received a notice of assessment in the
discounted amount of approximately $53,500 from The Treasurer of the State of
Florida Department of Insurance as Receiver of United States Employer Consumer
Self Insurance Fund of Florida, a workers' compensation insurance fund which was
declared insolvent (the "Fund"). The Company paid the discounted assessment in
January 1997. The Company had certain worksite employees covered by the Fund
during the fiscal years ended December 31, 1992, 1993 and 1994. The court order
authorizing the assessment provides that the Company, by paying the discounted
assessment, is deemed to have paid its assessment in full and is not subject to
any further assessment for policyholder loss claims. The Company may be subject
to additional liability for the assessments of other Fund members. The Company
believes that there are approximately 700 members of the Fund which have been
assessed $37,000,000 in the aggregate. Although the amount of the potential
exposure, if any, for such additional liability is not yet determinable,
management believes that the Company would have meritorious defenses to such
additional liability and that its ultimate liability in this matter will not
have a material adverse effect on the Company's financial condition or results
of operations. There cannot, however, be any assurance that any such liability
will not have such a material adverse effect.

The Company is a defendant in a lawsuit pending in the 11th Judicial
Circuit in Miami-Dade County, Florida related to a wrongful death and premises
liability claim involving a worksite employee. The plaintiff's complaint, which
was sustained by the court, alleges premises liability and negligence against
both the Company and its client as a result of a worksite accident on the
client's premises and seeks damages in excess of $15,000. The Company is
asserting that its liability under this claim, if any, should be limited to
$100,000 due to the immunity provisions of the Florida workers' compensation
statute involving worksite accidents. The Company's motions for summary judgment
on that basis were denied. Based on consultations with the Company's counsel,
management of the Company believes that it has meritorious defenses. The case
was set for trial in October 1998, but the parties have reached a tentative
settlement arrangement which has not yet been finalized. The Company believes
that if the lawsuit is adversely determined, the Company may be entitled to
indemnification from its client and/or the Company's liability insurance
carrier. Although management believes, based on consultations with the Company's
counsel, that the Company's ultimate liability in this matter should not be
material, there can be no assurance (i) that the case will in fact settle, (ii)
that, if the case does not settle, the Company will prevail in the litigation,
or in a related claim for indemnification, or (iii) that the liability of the
Company, if any, if the case does not settle, would not have a material adverse
effect on the Company's financial condition and results of operations.

In June 1995, the National Labor Relations Board ("Board") filed a
complaint charging Amstaff, Inc., with refusal to bargain with respect to a
collective bargaining agreement, under which a now former client's employees
were employed, in violation of the National Labor Relations Act. Vincam acquired
Amstaff, Inc. in June 1997. The charge was initially dismissed by a Detroit
office of the Board, but has since been reinstated following a union appeal to
the general counsel for the Board. If the Board rules against the Company, the
Company could be held liable for lost wages and benefits of such employees for a
period of almost four years. Any award would be reduced by any earnings of such
employees which are received or reasonably could have been received from other
employment during the relevant time period. The Company cannot currently
estimate its potential liability if the Board were to rule against it. The
Company is vigorously defending this case, but there can be no assurance that
the Company will prevail in the proceedings or that the liability of the
Company, if any, would not have a material adverse effect on the Company's
financial condition and results of operations.

12
<PAGE>

The Company is also involved in other legal and administrative proceedings
arising in the ordinary course of business. The outcomes of these actions are
not expected to have a material effect on the Company's financial position or
results of operations on an individual basis, although adverse outcomes in a
significant number of such ordinary course legal proceedings could, in the
aggregate, have a material adverse effect on the Company's financial condition
and results of operations.

* * * * * * * * * *

13
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis should be read in conjunction with
(i) the Consolidated Financial Statements and Notes thereto contained herein,
(ii) the Consolidated Financial Statements and the Notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations appearing in the 1997 Annual Report on Form 10-K, as amended by Form
10-K/A No.1, filed by The Vincam Group, Inc. ("Vincam" or the "Company") with
the Securities and Exchange Commission.

The following discussion contains forward-looking statements. The Company's
actual results could differ materially from those discussed in such
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below and elsewhere in this Form 10-Q. In
connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act"), the Company is hereby providing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "will result," "are expected to," "will continue," "is
anticipated," "estimated," "believes," "projection" and "outlook") are not
historical facts and may be forward-looking and, accordingly, such statements
involve estimates, assumptions and uncertainties which could cause actual
results to differ materially from those expressed in the forward-looking
statements. Such uncertainties include, among others, the following: (i)
potential for unfavorable interpretation of government regulations relating to
labor, taxes, insurance, employment matters and the provision of managed care
services; (ii) the Company's ability to obtain or maintain all required licenses
or certifications required to maintain or to further expand the range of
services offered by the Company; (iii) potential increases in the Company's
costs, such as health care costs, that the Company may not be able to reflect
immediately in its service fees; (iv) the Company's ability to offer its
services to prospective clients in additional states where it has less or no
market penetration; (v) the level of acquisition opportunities available to the
Company and the Company's ability to efficiently price and negotiate such
acquisitions on a favorable basis; (vi) the financial condition of the Company's
clients; (vii) additional regulatory requirements affecting the Company; (viii)
the impact of competition from existing and new professional employer
organizations; (ix) the failure to properly manage growth and successfully
integrate acquired companies and operations, and to achieve synergies and other
cost savings in the operation of acquired companies; (x) the potential
disruption of the Company's operations due to failures or errors in the
operations of the Company's computer systems resulting from the year 2000 issue;
and (xi) other factors which are described in further detail in the Company's
filings with the Securities and Exchange Commission including this Form 10-Q.

The Company cautions that the factors described above could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company. Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

14
<PAGE>

Overview

Vincam, one of the ten largest professional employer organization ("PEOs")
in the industry based on 1996 revenues (according to Staffing Industry Analysts,
Inc.), 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 and large employers.

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 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. In addition, the Company's revenues are subject to fluctuations as the
result of (i) changes in the volume of worksite employees serviced by the
Company; (ii) changes in the wage base and employment tax rates of worksite
employees; and (iii) changes in the mark-up charged by the Company for its
services.

The Company's primary direct costs are (i) salaries, wages, the employer's
portion of social security, Medicare premiums, federal unemployment taxes, and
other state payroll-based and sales taxes, (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).

The Company's health care costs consist of medical insurance premiums,
payments of and reserves for claims subject to deductibles and the costs of
dental care, 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, with third party insurers providing insurance with
respect to minimum premium and partially self-insured plans to the extent claims
exceed certain levels ("stop loss coverage"). 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. The Company maintains
reserves for medical and behavioral health claims, which reserves are estimates
based on periodic reviews of open claims, past claims experience and other
factors deemed relevant by management. While the Company believes that such
reserves are adequate, the Company cannot predict with certainty the ultimate
liability associated with open claims and past claims experience may not be
indicative of future results. Accordingly, if estimated reserve amounts prove to
be less than the ultimate liability with respect to such claims, the Company's
financial condition, results of operations and liquidity could be materially
adversely affected. In addition, to the extent an insurer delays or denies the
payment of a claim for stop loss coverage, or the amount of stop loss coverage
proves to be inadequate, the Company's financial condition, results of
operations and liquidity could be materially adversely affected.

15
<PAGE>

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. Prior to 1997, the Company was insured
under a large deductible insurance plan. Under this plan the Company was
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 ranging from $150,000 to $1,000,000. In December 1996, the Company
entered into an arrangement with an insurance company under which the percentage
of the average standard premium to be paid by the Company for workers'
compensation coverage for the years 1997 to 1999 was fixed. The arrangement,
originally covering the years 1997 through 1999, now includes coverage through
the year 2000 under certain revised terms and conditions. The arrangement
remains a guaranteed cost program. Additionally, the Company entered into
agreements as of December 1996 whereby the Company reinsured substantially all
of the remaining claims under the Company's large deductible workers'
compensation insurance policies for the years 1994 through 1996, and in 1997
entered into similar agreements to reinsure the remaining claims under the prior
large deductible workers' compensation insurance policies of Staff
Administrators, Inc. ("SAI"), Amstaff, Inc. ("AMI") and Staffing Network, Inc.
("SNI"), companies acquired by Vincam.

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
representatives and the marketing staff, as well as marketing and advertising
expenses.

The Company's financial condition and results of operations are subject to
several contingencies. For more information regarding such contingencies, see
Note 6 of Notes to Consolidated Financial Statements contained in Part 1, Item I
Financial Statements of this Form 10-Q.

16
<PAGE>

Results of Operations

The following table sets forth, for September 30, 1998 and 1997, certain
selected income statement data expressed as a percentage of revenues:

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues............................................. 100.0% 100.0% 100.0% 100.0%
Direct costs:
Salaries, wages and employment taxes
of worksite employees........................... 89.7% 89.4% 89.7% 89.1%
Health care and workers' compensation............. 4.2% 4.0% 4.0% 3.9%
State unemployment taxes and other................ 0.8% 1.0% 1.0% 1.1%
-------- -------- --------- ---------

Total direct costs.............................. 94.7% 94.3% 94.6% 94.0%
-------- -------- --------- ---------

Gross profit......................................... 5.3% 5.7% 5.4% 6.0%
-------- -------- --------- ---------

Operating expenses:
Administrative personnel.......................... 2.1% 2.6% 2.1% 2.6%
Other general and administrative.................. 1.0% 1.3% 1.1% 1.7%
Sales and marketing............................... 0.7% 0.7% 0.7% 0.7%
Depreciation and amortization..................... 0.2% 0.4% 0.2% 0.4%
-------- -------- --------- ---------

Total operating expenses........................ 4.0% 5.0% 4.1% 5.4%
-------- -------- --------- ---------

Operating income..................................... 1.3% 0.7% 1.2% 0.5%
Interest income (expense), net....................... 0.0% 0.0% 0.0% 0.0%
-------- -------- --------- ---------

Income before taxes.................................. 1.3% 0.7% 1.2% 0.5%
Provision for income taxes........................... 0.5% 0.3% 0.5% 0.2%
-------- -------- --------- ---------

Net income........................................... 0.8% 0.4% 0.8% 0.3%
======== ======== ========= =========

</TABLE>

Nine Months Ended September 30, 1998 Compared to Nine Months Ended
September 30, 1997

The Company's revenues for the nine months ended September 30, 1998 were
$910.6 million compared to $699.8 million for the nine months ended September
30, 1997, representing an increase of $210.8 million, or 30.1%. This increase
was due primarily to internal growth in the number of PEO worksite employees and
to the increase in average revenue per worksite employee. The number of worksite
employees increased 16.7%, from 38,609 worksite employees at September 30, 1997
to 45,065 at September 30, 1998, while the average revenue per worksite employee
for the period increased 9.6%, from $2,125 in 1997 to $2,330 in 1998.

Salaries, wages and employment taxes of worksite employees were $816.4
million for the nine months ended September 30, 1998, compared to $623.6 million
for the same period in 1997, representing an increase of $192.8 million, or
30.9%. Salaries, wages and employment taxes of worksite employees were 89.7% of
revenues for the nine months ended September 30, 1998, compared to 89.1% for the
same period in 1997. The increase of salaries, wages and employment taxes of
worksite employees as a percentage of revenues resulted from a change in the
Company's worksite employee mix towards worksite employees having a lower

17
<PAGE>

workers' compensation classification and lower workers' compensation rates in
several states where the Company operates, which resulted in lower markups being
charged by the Company. In addition the fact that the Company's revenue increase
was entirely in PEO operations, which have a lower margin than the Company's
managed care business, contributed to such percentage increase.

Health care and workers' compensation costs were $35.9 million for the nine
months ended September 30, 1998, compared to $27.3 million for the same period
in 1997, representing an increase of $8.7 million, or 31.7%. This increase was
due mainly to the higher number of PEO worksite employees. Health care and
workers' compensation costs were 4.0% of revenues for the nine months ended
September 30, 1998, compared to 3.9% for the same period in 1997.

State unemployment taxes and other direct costs were $9.5 million for the
nine months ended September 30, 1998, compared to $7.5 million for the same
period in 1997, representing an increase of $2.0 million or 27.0%. This increase
was due mainly to the higher volume of salaries and wages paid during the nine
months ended September 30, 1998, which was a direct function of the increase in
the number of PEO worksite employees. State unemployment taxes and other direct
costs were 1.0% of revenues for the nine months ended September 30, 1998 and
1997.

Gross profit was $48.8 million for the nine months ended September 30,
1998, compared to $41.5 million for the same period in 1997, representing an
increase of $7.3 million, or 17.8%, due mainly to the increase in revenues
during the nine months ended September 30, 1998, which was a direct function of
the increased number of PEO worksite employees. Gross margin was 5.4% for the
nine months ended September 30, 1998, compared to 6.0% for the same period in
1997. The decrease in gross margin was due mainly to the shift in the Company's
employee mix, which resulted in lower markups being charged by the Company and
to the fact that the Company's revenue increase was entirely in PEO operations,
which have a lower margin than the Company's managed care business.

Administrative personnel expenses were $19.6 million for the nine months
ended September 30, 1998, compared to $18.3 million for the same period in 1997,
representing an increase of $1.3 million, or 7.1%. This increase was primarily
attributable to increased staffing to support the Company's growth, including
management and executive personnel. Administrative personnel expenses were 2.1%
of revenues for the nine months ended September 30, 1998, compared to 2.6% for
the same period in 1997. This decrease in administrative personnel expenses as a
percentage of revenue resulted primarily from higher compensation paid during
1997 to former owners of AMI and SNI before their respective acquisitions by the
Company. Such compensation was reduced after their respective acquisitions by
the Company.

Other general and administrative expenses, including the provision for
doubtful accounts, were $10.2 million for the nine months ended September 30,
1998, compared to $11.8 million for the same period in 1997, representing a
decrease of $1.6 million, or 13.3%. This decrease in other general and
administrative expenses was primarily attributable to transaction expenses of
approximately $1.3 million incurred in 1997 in connection with the SAI and AMI
acquisitions and a $1.0 million charge related to the termination in 1997 of a
managed care provider network under which the Company previously operated its
workers' compensation managed care business, partially offset by $0.7 million
increase in other general and administrative expenses to support the Company's
growth. Other general and administrative expenses, including the provision for
doubtful accounts, were 1.3% of revenues for the nine months ended September 30,
1998, compared to 2.1% for the same period in 1997. The decrease in other
general and administrative expenses, including the provision for doubtful
accounts, as a percentage of revenues was due mainly to $2.3 million of
transaction related charges incurred in 1997.

18
<PAGE>

Sales and marketing costs were $5.9 million for the nine months ended
September 30, 1998, compared to $5.1 million for the same period in 1997,
representing an increase of $0.8 million, or 16.2%. The increase reflects the
addition of sales representatives and marketing personnel, consistent with the
Company's strategy to increase its client base in its existing markets and
acquired markets. Sales and marketing costs were 0.7% of revenues for the nine
months ended September 30, 1998 and 1997.

Operating income was $10.8 million for the nine months ended September 30,
1998, compared to $3.5 million for the same period in 1997, representing an
increase of $7.3 million, or 205.6%. The increase in operating income was due
mainly to increase in revenues resulting from an increase in worksite employees
during the first nine months of 1998, and to non-recurring charges of $2.3
million incurred in the same period in 1997. Excluding the non-recurring charges
of $2.3 million during 1997, operating income increased by $4.9 million or
83.0%.

Net income was $6.7 million for the nine months ended September 30, 1998,
compared to $2.1 million for the same period in 1997, representing an increase
of $4.5 million. Diluted earnings per share were $0.41 for the nine months ended
September 30, 1998, compared to $0.14 for the same period in 1997, representing
an increase of $0.27 or 192.9%.

The Company anticipates that administrative personnel expenses, other
general and administrative expenses, sales and marketing expenses and interest
expense will continue to increase in future periods to the extent that the
Company continues to experience growth and to expand its service offerings.

Three Months Ended September 30, 1998 Compared to Three Months Ended
September 30, 1997

The Company's revenues for the three months ended September 30, 1998 were
$314.8 million compared to $244.7 million for the three months ended September
30, 1997, representing an increase of $70.1 million, or 28.7%. This increase was
due primarily to internal growth in the number of PEO worksite employees and to
the increase in average revenue per worksite employee. The number of worksite
employees increased 16.7%, from 38,609 worksite employees at September 30, 1997
to 45,065 at September 30, 1998, while the average revenue per worksite employee
for the period increased 9.6%, from $2,128 in 1997 to $2,333 in 1998.

Salaries, wages and employment taxes of worksite employees were $282.4
million for the three months ended September 30, 1998, compared to $218.8
million for the same period in 1997, representing an increase of $63.6 million,
or 29.1%. The increase in salaries, wages and employment taxes of worksite
employees was due primarily to an increased number of PEO worksite employees.
Salaries, wages and employment taxes of worksite employees were 89.7% of
revenues for the three months ended September 30, 1998, compared to 89.4% for
the same period in 1997. The increase of salaries, wages and employment taxes of
worksite employees as a percentage of revenues resulted from a change in the
Company's worksite employee mix towards worksite employees having a lower
workers' compensation classification and lower workers' compensation rates in
several states where the Company operates, which resulted in lower markups being
charged by the Company. In addition, the fact that the Company's revenue
increase was entirely in PEO operations, which have a lower margin than the
Company's managed care business, contributed to such percentage increase.

19
<PAGE>

Health care and workers' compensation costs were $13.2 million for the
three months ended September 30, 1998, compared to $9.7 million for the same
period in 1997, representing an increase of $3.5 million, or 36.5%. This
increase was due mainly to the higher volume of PEO worksite employees. Health
care and workers' compensation costs were 4.2% of revenues for the three months
ended September 30, 1998, compared to 4.0% for the same period in 1997.

State unemployment taxes and other direct costs were $2.5 million for the
three months ended September 30, 1998, compared to $2.4 million for the same
period in 1997, representing an increase of $0.1 million or 1.7%. This increase
was due mainly to the higher volume of salaries and wages paid during the three
months ended September 30, 1998, which was a direct function of the increase in
the number of PEO worksite employees, an increased number of client companies
using other services and products and an increase in other direct costs related
to the Company's services. State unemployment taxes and other direct costs were
0.8% of revenues for the three months ended September 30, 1998, compared to 1.0%
for the same period in 1997.

Gross profit was $16.8 million for the three months ended September 30,
1998, compared to $13.9 million for the same period in 1997, representing an
increase of $2.9 million, or 20.9%. Gross margin was 5.3% for the three months
ended September 30, 1998, compared to 5.7% for the same period in 1997. The
decrease in gross margin was due mainly to the shift in the Company's employee
mix, which resulted in lower markups being charged by the Company and to the
fact that the Company's revenue increase was entirely in PEO operations, which
have a lower margin than the Company's managed care business.

Administrative personnel expenses were $6.7 million for the three months
ended September 30, 1998, compared to $6.3 million for the same period in 1997,
representing an increase of $0.4 million, or 5.7%. This increase was primarily
attributable to increased staffing to support the Company's growth, including
management and senior executive personnel. Administrative personnel expenses
were 2.1% of revenues for the three months ended September 30, 1998, compared to
2.6% for the same period in 1997. This decrease in administrative personnel
expenses as a percentage of revenue resulted primarily from higher compensation
paid during 1997 to former owners of AMI and SNI before their respective
acquisitions by the Company. Such compensation was reduced after their
respective acquisitions by the Company.

Other general and administrative expenses, including the provision for
doubtful accounts were $3.3 million for the three months ended September 30,
1998, compared to $3.4 million for the same period in 1997, representing a
decrease of $0.1 million, or 2.8%. Other general and administrative expenses,
including the provision for doubtful accounts, were 1.0% of revenues for the
three months ended September 30, 1998, compared to 1.3% for the same period in
1997.

20
<PAGE>

Sales and marketing costs were $2.1 million for the three months ended
September 30, 1998, compared to $1.7 million for the same period in 1997,
representing an increase of $0.4 million, or 24.7%. The increase reflects the
addition of sales representatives and marketing personnel, consistent with the
Company's strategy to increase its client base in its existing and acquired
markets. Sales and marketing costs were 0.7% of revenues for the three months
ended September 30, 1998 and 1997.

Operating income was $4.0 million for the three months ended September 30,
1998, compared to $1.6 million for the same period in 1997, representing an
increase of $2.4 million, or 149.2%. The increase in operating income was due
mainly to the increase in revenues resulting from an increase in worksite
employees.

Net income was $2.5 million for the three months ended September 30, 1998,
compared to net income of $1.0 million for the same period in 1997, representing
an increase of $1.5 million. Diluted and basic earnings per share were $0.16 for
the three months ended September 30, 1998, compared to diluted earnings of $0.06
and basic earnings of $0.07 for the same period in 1997.

Liquidity and Capital Resources

At September 30, 1998, the Company had working capital of $24.2 million,
compared to $17.4 million at December 31, 1997. The Company had $9.1 million in
cash at September 30, 1998.

The Company's Credit Agreement with a group of banks for which Fleet
National Bank ("Fleet Bank") acts as agent provides for a $50.0 million
revolving line of credit with a sublimit of $15.0 million for standby letters of
credit and revolving credit loans for working capital purposes. The Credit
Agreement also provides for advances to finance acquisitions. The Company uses
letters of credit primarily to secure its obligations to reimburse its former
workers' compensation insurance carrier for workers' compensation payments
subject to the policy deductible. Borrowings bear interest at rates based, at
the Company's option, on Fleet Bank's Prime Rate plus a margin of as much as
0.25% or its Eurodollar Rate (as defined in the Credit Agreement) plus a margin
of 1.00% to 1.75%, depending on certain financial covenants. The facility is
secured by a pledge of the shares of all of the Company's subsidiaries. The
revolving line of credit matures on April 24, 2000. If, on April 24, 2000,
certain conditions are satisfied, any amounts outstanding under the revolving
line of credit may be converted into a term loan payable in eight quarterly
instalments commencing on August 1, 2000. The Credit Agreement contains
customary events of default and covenants which prohibit, among other things,
incurring additional indebtedness in excess of a specified amount, paying
dividends, creating liens and engaging in certain mergers or combinations
without the prior written consent of the lenders. The Credit Agreement also
contains certain financial covenants relating to current ratio, debt to capital
ratio, debt and fixed charges coverage and minimum tangible net worth, as

21
<PAGE>

defined in the Credit Agreement. The Company is required to pay an unused
facility fee ranging from .20% to .35% per annum on the facilities, depending
upon certain financial covenants. Under the revolving credit facility, the
Company had outstanding approximately $5.5 million in standby letters of credit
at September 30, 1998 which guarantee the payment of claims to the Company's
former workers' compensation insurance carrier. As of that date, there were no
other amounts outstanding under the revolving line of credit.

On December 9, 1997, the Company entered into a leasing arrangement with
respect to a new headquarters facility in Miami-Dade County which the Company
moved into in November 1998. The leasing arrangement has an initial expiration
date of four years after completion of the facility and allows the Company to
extend the term of the lease for up to three more years subject to compliance
with the terms and conditions of the credit agreement and related documents. The
lessor of the facility has financed 97% of the costs of acquiring the land and
constructing the facility. The financing agreement relating to the facility (the
"Facility Financing Agreement") contains certain covenants, including financial
covenants, of the Company and events of default with respect thereto, which
covenants are the same in all material respects as those contained in the
Company's Credit Agreement. Under the leasing arrangement, the Company's
commitment in future years will be based on (i) interest at a competitive rate
on all outstanding loan amounts with respect to the facility plus (ii) the
yield, at a competitive rate, in respect of the lessor's 3% equity investment.
Default under the Company's covenants contained in the Facility Financing
Agreement constitutes default under the Company's lease of the headquarters
facility. In the event of such default, the Company is obligated to either
purchase the facility for the Purchase Price (defined below) or pay a
termination fee in an amount approximately equal to the Purchase Price. The
maximum amount on which the lease payments will be based is currently limited to
$12.0 million, but will be increased to approximately $12.85 million upon
execution of a pending amendment to the Facility Financing Agreement. As of
September 30, 1998, an aggregate of $9.1 million in loans were outstanding to
the lessor.

The Company anticipates that available cash, cash flows from operations and
borrowing availability under the Credit Agreement will be sufficient to satisfy
the Company's liquidity and working capital requirements for the foreseeable
future; however, to the extent that the Company should desire to increase its
financial flexibility and capital resources or require or choose to fund future
capital commitments from sources other than operating cash or from borrowings
under its revolving line of credit or its acquisition loan facility, the Company
may consider raising capital through the offering of equity and/or debt
securities in the public or private markets, as well as from banks.

The Company's primary short-term liquidity requirements for the remainder
of 1998 include the repayment of $0.4 million borrowed by the Company to finance
general liability and employment practice liability insurance premiums, payment
of $750,000 due on the mortgage of the Company's former headquarters facility,
investment in software development, expenditures for office and computer
equipment to support the Company's growth, and the payment of other expenses
related to the Company's growth. The Company anticipates capital expenditures
for 1998 of approximately $5.0 million, primarily for software development,
including the evaluation and implementation of changes to computer programs to
address the year 2000 issue.

22
<PAGE>

Net cash provided by operating activities was $13.6 million for the nine
months ended September 30, 1998, compared to cash used in operations of
approximately $2.9 million for the same period in 1997. The difference between
the Company's net income of $6.7 million for the nine months ended September 30,
1998, and its operating cash flow was due primarily to a $10.9 million increase
in accrued salaries, wages, and payroll taxes, an increase of $2.3 million in
income tax payable, a decrease in reinsurance recoverable of $1.1 million, a
decrease in prepaid workers' compensation insurance premium of $7.1 million, a
decrease in income tax receivable of $1.5 million, and increases in noncash
items such as depreciation and amortization of $2.2 million and provision for
doubtful accounts of $0.7 million, partially reduced by an increase of $11.5
million in accounts receivable, an increase of $3.8 million in prepaid expenses
and other current assets, and a decrease in reserves for claims of $2.5 million.
The increase in accounts receivable and accrued salaries, wages and payroll
taxes resulted from both a higher number of PEO worksite employees served during
the nine months ended September 30, 1998 and the timing of the payroll cycle.
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 $0.6 million for the nine months
ended September 30, 1998, compared to $3.9 million used in investing activities
in the same period in 1997. This reflects the purchase of $2.4 million in
property and equipment to support the Company's growth, offset by the redemption
of short term investments of $1.8 million.

Net cash used in financing activities was $8.8 million for the nine months
ended September 30, 1998, compared to $2.5 million used in financing activities
in the same period in 1997. During 1998, the Company made principal payments on
borrowings of $9.2 million, mostly related to the financing of the Company's
workers' compensation insurance program premiums.

Year 2000 Issue

The Year 2000 Issue is the result of computer programs using two digits
rather than four to define the applicable year. Any of the Company's computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure,
disruption of operations (such as the disruption of payroll processing services
to the Company's clients or the disruption of employee information systems),
and/or a temporary inability to conduct normal business activities.

The Year 2000 project includes an assessment of telecommunications
equipment, computer equipment, software, database, data services, network
infrastructure, and telephone equipment. The Company's Year 2000 plan addresses
the Year 2000 issue in four phases: (1) Inventory and Assessment; (2) Impact
Analysis and Conversion Planning; (3) System Conversion and Testing; (4)
Implementation and Monitoring. As each phase is completed, project progress will
be tracked against planned targets, and resource adjustments made as necessary.
At this time, a majority of the Company's information systems and embedded
devices have been inventoried and assessed, and the Company has begun impact
analysis and conversion planning, as well as some system conversion and testing.
The project is estimated to be complete by the end 1999, prior to any
anticipated impact on the Company's operating systems. The Company believes that
with modifications to existing software, conversions to new software and
replacement or modification of certain embedded systems, the Year 2000 issue

23
<PAGE>

will not pose significant operational problems. Based on its current
assessment efforts, the Company does not believe that Year 2000 issues will have
a material adverse effect on its financial condition or results of operations.
If, however, necessary modifications and conversions are not made or are not
completed on a timely basis, the Year 2000 issue may have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company's Year 2000 issues and any potential business interruptions, costs,
damages or losses related thereto, are dependent, to a certain degree, upon the
Year 2000 readiness of third parties such as vendors and suppliers. As part of
the Company's Year 2000 efforts, formal communications with all significant
vendors and clients are being pursued to determine the extent to which related
interfaces with the Company's systems are vulnerable if these third parties fail
to remediate their Year 2000 issues. There cannot be no assurance that any such
third parties will address any Year 2000 issues that they have and that such
third parties' systems will not materially adversely affect the Company's
systems and operations.

The Company continues to assess the Year 2000 issue with respect to
internal business systems, and has initiated the implementation of corrective
measures to address the issue. The Company is evaluating the need for
contingency planning at this time of its systems and embedded devices. The
assessment of third parties external to the Company is underway, and may reveal
the need for contingency planning based on the progress and findings of the Year
2000 project.

The Company will utilize both internal and external resources to complete
and test the Year 2000 project. At the present time, the Company is estimating
the cost of this project. Through June 30, 1998, related costs incurred were not
material, and the Company does not expect that the total cost of its Year 2000
project will be material to the Company's financial position or results of
operations. Project costs and the targeted completion date will be based on
management's best estimates, which will be derived from utilizing numerous
assumptions of future events, including the continued availability of certain
resources, the ability to locate and correct all relevant computer codes, third
party modification plans and other factors. There can be no assurance these
estimates will be achieved or that the actual results will not differ materially
from those anticipated.

24
<PAGE>

PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

During the quarterly period ended June 30, 1998, the Company appointed
Steven R. Light to the position of Senior Vice President, Strategic Initiatives
and, during the quarterly period ended September 30, 1998, named Jeffrey D.
Lamb, who was previously Senior Vice President, Marketing and Business
Development, the Company's Area Executive Western States. Andrea Velazquez,
President of the Company's Managed Solutions Division, left the Company in
November 1998.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
No. Description
- - ------- ------------
10.1 The Vincam Group, Inc. 1996 Long Term Incentive Plan, as amended.
10.2 The Vincam Group, Inc. 1998 Long Term Incentive Plan.
10.3 Deductible Liability Insurance Policy, effective December 31, 1997,
issued by Reliance Insurance Company of Illinois,
Policy No. NXS 0133598-01.
10.4 First Amendment to Development Agreement, dated as of June 29, 1998,
by and between Codina Development Corporation and The Vincam Group,
Inc. as agent for Fleet Real Estate, Inc.
10.5 Deductible Liability Insurance Policy, effective December 31, 1997,
issued by Reliance Insurance Company of Illinois, Policy No. NGB
0133600-01 (confidential treatment has been requested for certain
portions of Exhibit 10.5).
11 Statement re Computation of Per Share Earnings
27.1 Financial Data Schedule as of and for the nine month period ended
September 30, 1998
27.2 Restated Financial Data Schedule as of and for the nine month period
ended September 30, 1997

(b) Reports on Form 8-K

None.

25
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

THE VINCAM GROUP, INC.

November 16, 1998 By: /S/ CARLOS A. RODRIGUEZ
- - -------------------------- -----------------------
Date Carlos A. Rodriguez, Chief Financial Officer,
Senior Vice President Finance and Administration
(Principal Financial Officer)

November 16, 1998 By: /S/ MARTINIANO J. PEREZ
- - ----------------------- -----------------------
Date Martiniano J. Perez, Vice President & Controller
(Principal Accounting Officer)

26
<PAGE>

THE VINCAM GROUP, INC.
EXHIBIT INDEX

Exhibit
No. Description

10.1 The Vincam Group, Inc. 1996 Long Term Incentive Plan, as amended.
10.2 The Vincam Group, Inc. 1998 Long Term Incentive Plan.
10.3 Deductible Liability Insurance Policy, effective December 31, 1997,
issued by Reliance Insurance Company of Illinois,
Policy No. NXS 0133598-01.
10.4 First Amendment to Development Agreement, dated as of June 29, 1998,
by and between Codina Development Corporation and The Vincam Group,
Inc. as agent for Fleet Real Estate, Inc.
10.5 Deductible Liability Insurance Policy, effective December 31, 1997,
issued by Reliance Insurance Company of Illinois, Policy No. NGB
0133600-01 (confidential treatment has been requested for certain
portions of Exhibit 10.5).
11 Statement re Computation of Per Share Earnings
27.1 Financial Data Schedule as of and for the nine month period ended
September 30, 1998
27.2 Restated Financial Data Schedule as of and for the nine month period
ended September 30, 1997

EXHIBIT 10.1

THE VINCAM GROUP, INC.

LONG TERM INCENTIVE PLAN
1996

SECTION 1. PURPOSE. The purpose of this Long Term Incentive Plan (the
"Plan") of the Vincam Group, Inc. (together with any successor thereto, the
"Corporation") is (a) to promote the identity of interests between shareholders,
directors, employees, and consultants of the Corporation by encouraging and
creating significant ownership of Common Stock of the Corporation by directors,
officers and other salaried employees of the Corporation and its subsidiaries;
(b) to enable the Corporation to attract and retain qualified directors,
officers, employees, and consultants who contribute to the Corporation's success
by their ability, ingenuity and industry; and (c) to provide meaningful
long-term incentive opportunities for directors, officers, employees, and
consultants who are responsible for the success of the Corporation and who are
in a position to make significant contributions toward its objectives.

SECTION 2. DEFINITIONS. In addition to the terms defined elsewhere in
the Plan, the following shall be defined terms under the Plan:

2.01. "Award" means any Performance Award, Option, Stock Appreciation
Right, Restricted Stock, Deferred Stock, Dividend Equivalent, or Other
Stock-Based Award, or any other right or interest relating to Shares or cash,
granted to a Participant under the Plan.

2.02. "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.

2.03. "Board" means the Board of Directors of the Corporation.

2.04. "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

2.05. "Committee" means the Stock Option Committee of the Board, or
such other Board committee as may be designated by the Board to administer the
Plan, or any subcommittee of either; provided, however, that the Committee and
any subcommittee thereof, shall consist of two or more directors, each of whom
is a "nonemployee director" within the meaning of Rule 16b-3 under the Exchange
Act and an "outside director" as defined for purposes of Section 162(m) of the
Code.

2.06. "Corporation" is defined in Section 1.

2.07. "Covered Employee" has the same meaning as set forth in section
162(m) of the Code, and successor provisions.

2.08. "Deferred Stock" means a right, granted to a Participant under
Section 6.05, to receive Shares at the end of a specified deferral period.

2.09. "Dividend Equivalent" means a right, granted to a Participant
under Section 6.03, to receive cash, Shares, other Awards, or other property
equal in value to dividends paid with respect to a specified number of Shares.

2.10. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and regulations thereunder.

<PAGE>

2.11. "Fair Market Value" means, with respect to Shares, Awards, or
other property, the fair market value of such Shares, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee, the Fair
Market Value of Shares as of any date shall be the closing sales price on that
date of a Share as reported on the stock exchange or automated stock quotation
system on which Shares may be listed or quoted; provided, that if there were no
sales on the valuation date but there were sales on dates within a reasonable
period both before and after the valuation date, the Fair Market Value is the
weighted average of the closing prices on the nearest date before and the
nearest date after the valuation date (the "Average"). The Average is to be
weighted inversely by the respective numbers of trading days between the selling
dates and the valuation date.

2.12. "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code.

2.13. "Non-Qualified Stock Option" means an Option that is not intended
to be an Incentive Stock Option.

2.14. "Option" means a right, granted to a Participant under Section
6.06, to purchase Shares, other Awards, or other property at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.

2.15. "Other Stock-Based Award" means a right, granted to a Participant
under Section 6.08, that relates to or is valued by reference to Shares.

2.16. "Participant" means a person who, as a director, officer,
employee or consultant of the Corporation or any Subsidiary, has been granted an
Award under the Plan.

2.17. "Performance Award" means a right, granted to a Participant under
Section 6.02, to receive cash, Shares, other Awards, or other property the
payment of which is contingent upon achievement of certain performance goals
specified by the Committee.

2.18. "Performance-Based Restricted Stock" means Restricted Stock that
is subject to a risk of forfeiture if specified performance criteria are not met
within the restriction period.

2.19. "Plan" is defined in Section 1.

2.20. "Restricted Stock" means Shares, granted to a Participant under
Section 6.04, that are subject to certain restrictions and to a risk of
forfeiture.

2.21. "Rule 16b-3" means Rule 16b-3, as from time to time amended and
applicable to Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.

2.22. "Shares" means the Common Stock, $.001 par value, of the
Corporation and such other securities of the Corporation as may be substituted
for Shares or such other securities pursuant to Section 10.

2.23. "Stock Appreciation Right" means a right, granted to a
Participant under Section 6.07, to be paid an amount measured by the
appreciation in the Fair Market Value of Shares from the date of grant to the
date of exercise of the right, with payment to be made in cash, Shares, other
Awards, or other property as specified in the Award or determined by the
Committee.

2.24. "Subsidiary" means any corporation (other than the Corporation)
with respect to which the Corporation owns, directly or indirectly, 50% or more
of the total combined voting power of all classes of

-2-
<PAGE>

stock. In addition, any other related entity may be designated by the Board
as a Subsidiary, provided such entity could be considered as a subsidiary
according to generally accepted accounting principles.

2.25. "Year" means a calendar year.

SECTION 3. ADMINISTRATION.

3.01. AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

(i) to select and designate Participants;

(ii) to designate Subsidiaries;

(iii) to determine the type or types of Awards to be granted to each
Participant;

(iv) to determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions
relating to transferability or forfeiture, exercisability, or
settlement of an Award, and waivers or accelerations thereof, and
waiver of performance conditions relating to an Award, based in each
case on such considerations as the Committee shall determine), and all
other matters to be determined in connection with an Award;

(v) to determine whether, to what extent, and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid,
in cash, Shares, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

(vi) to determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, or other property payable with respect to
an Award will be deferred either automatically, at the election of the
Committee, or at the election of the Participant;

(vii) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;

(viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;

(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and
any Award, rules and regulations, Award Agreement, or other instrument
hereunder; and

(x) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.

3.02. MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Committee
shall have sole discretion in exercising such authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Corporation, Subsidiaries, Participants,
any person claiming any rights under the Plan

-3-
<PAGE>

from or through any Participant, and shareholders. The express grant of
any specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the
Committee. A memorandum signed by all members of the Committee shall constitute
the act of the Committee without the necessity, in such event, to hold a
meeting. The Committee may delegate to officers or managers of the Corporation
or any Subsidiary the authority, subject to such terms as the Committee shall
determine, to perform administrative functions under the Plan.

3.03. LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Corporation or any
Subsidiary, the Corporation's independent certified public accountants, or any
executive compensation consultant or other professional retained by the
Corporation to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Corporation acting on behalf of
the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Corporation acting
on their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action, determination, or
interpretation.

SECTION 4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as
provided in Section 10, the total number of Shares reserved and available for
Awards under the Plan shall be 1,200,000*. For purposes of this Section 4, the
number of and time at which Shares shall be deemed to be subject to Awards and
therefore counted against the number of Shares reserved and available under the
Plan shall be the earliest date at which the Committee can reasonably estimate
the number of Shares to be distributed in settlement of an Award or with respect
to which payments will be made; provided, however, that, subject to the
requirements of Rule 16b-3, the Committee may adopt procedures for the counting
of Shares relating to any Award for which the number of Shares to be distributed
or with respect to which payment will be made cannot be fixed at the date of
grant to ensure appropriate counting, avoid double counting (in the case of
tandem or substitute awards), and provide for adjustments in any case in which
the number of Shares actually distributed or with respect to which payments are
actually made differs from the number of Shares previously counted in connection
with such Award.

If any Shares to which an Award relates are forfeited or the Award is
settled or terminates without a distribution of Shares (whether or not cash,
other Awards, or other property is distributed with respect to such Award), any
Shares counted against the number of Shares reserved and available under the
Plan with respect to such Award shall, to the extent of any such forfeiture,
settlement or termination, again be available for Awards under the Plan;
provided, however, that such Shares shall be available for issuance only to the
extent permitted under Rule 16b-3.

SECTION 5. ELIGIBILITY. Awards may be granted only to individuals who
are directors, officers or other salaried employees of the Corporation or a
Subsidiary; provided, however, that no Award shall be granted to any member of
the Committee.

SECTION 6. SPECIFIC TERMS OF AWARDS.

- - ---------------------------------------

*The aggregate number of shares of Common Stock available for Awards
under the Plan has been adjusted to reflect the Company's three-for-two stock
split effected by way of a stock dividend and declared on November 6, 1997.

-4-
<PAGE>

(subject to Section 10.02), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine,
including without limitation the acceleration of vesting of any Awards or terms
requiring forfeiture of Awards in the event of termination of service as a
director or employment by the Participant. Except as provided in Sections 7.03,
or 7.04, only services may be required as consideration for the grant of any
Award.

6.02. PERFORMANCE AWARDS. Subject to the provisions of Section 7.01 and
7.02, the Committee is authorized to grant Performance Awards to Participants on
the following terms and conditions:

(i) AWARD AND CONDITIONS. A Performance Award shall confer upon the
Participant rights, valued as determined by the Committee, and payable
to, or exercisable by, the Participant to whom the Performance Award is
granted, in whole or in part, as determined by the Committee,
conditioned upon the achievement of performance criteria determined by
the Committee.

(ii) OTHER TERMS. A Performance Award may be denominated in Shares and
may be payable in cash, Shares, other Awards, or other property, and
have such other terms as shall be determined by the Committee.

6.03. DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Shares or Awards, or otherwise reinvested.

6.04. RESTRICTED STOCK. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:

(i) ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the
Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends
thereon), which restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments, or
otherwise as the Committee shall determine.

(ii) FORFEITURE. Performance-Based Restricted Stock shall be forfeited
unless preestablished performance criteria specified by the Committee
are met during the applicable restriction period. Except as otherwise
determined by the Committee, upon termination of employment (as
determined under criteria established by the Committee) during the
applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the
Corporation; provided, however, that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes.

(iii) CERTIFICATES OF SHARES. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name
of the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, the Corporation shall retain physical possession of
the certificates, and the Participant shall deliver a stock power to
the Corporation, endorsed in blank, relating to the Restricted Stock.

-5-
<PAGE>

Dividends reinvested in Performance-Based Restricted Stock and Shares
distributed in connection with a stock split or stock dividend, and
other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such stock or other property has
been distributed.

6.05. DEFERRED STOCK. The Committee is authorized to grant Deferred
Stock to Participants, on the following terms and conditions:

(i) AWARD AND RESTRICTIONS. Delivery of Shares will occur upon
expiration of the deferral period specified for Deferred Stock by the
Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, Deferred Stock shall be subject to such
restrictions as the Committee may impose, which restrictions may lapse
at the expiration of the deferral period or at earlier specified times,
separately or in combination, in installments, or otherwise, as the
Committee shall determine.

(ii) FORFEITURE. Except as otherwise determined by the Committee, upon
termination of employment (as determined under criteria established by
the Committee) during the applicable deferral period or portion thereof
(as provided in the Award Agreement evidencing the Deferred Stock), all
Deferred Stock that is at that time subject to deferral (other than a
deferral at the election of the Participant) shall be forfeited;
provided, however, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to
Deferred Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Deferred Stock.

6.06. OPTIONS: The Committee is authorized to grant Options to
Participants on the following terms and conditions:

(i) EXERCISE PRICE. The exercise price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that,
except as provided in Section 7.03, such exercise price shall be not
less than the Fair Market Value of a Share on the date of grant of such
Option.

(ii) TIME AND METHOD OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part,
the methods by which such exercise price may be paid or deemed to be
paid, the form of such payment, including, without limitation, cash,
Shares, other Awards or awards issued under other Corporation plans, or
other property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements), and the methods by which Shares will
be delivered or deemed to be delivered to Participants. Options shall
expire not later than ten years after the date of grant.

(iii) INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code, including but not limited to requirements
related to aggregate maximum fair market value of underlying Shares,
minimum exercise prices, Option duration and the requirement that no
Incentive Stock Option shall be granted more than ten years after the
effective date of the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended, or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under Section
422 of the Code. In the event a Participant voluntarily disqualifies an
Option as an Incentive Stock Option, the Committee may, but shall not
be obligated to, make such additional Awards or pay bonuses as the
Committee shall deem appropriate to reflect the tax savings to the
Corporation which result from such disqualification.

-6-
<PAGE>

6.07. STOCK APPRECIATION RIGHTS. The Committee is authorized to grant
Stock Appreciation Rights to Participants on the following terms and conditions:

(i) RIGHT TO PAYMENT. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one Share on the
date of exercise (or, if the Committee shall so determine in the case
of any such right, other than one related to an Incentive Stock Option,
the Fair Market Value of one Share at any time during a specific period
before or after the date of exercise) over (B) the grant price of the
Stock Appreciation Right as determined by the Committee as of the date
of grant of the Stock Appreciation Right, which, except as provided in
Section 7.03, shall be not less than the Fair Market Value of one Share
on the date of grant.

(ii) OTHER TERMS. The Committee shall determine the time or times at
which a Stock Appreciation Right may be exercised in whole or in part,
the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or
deemed to be delivered to Participants, and any other terms and
conditions of any Stock Appreciation Right. Stock Appreciation Rights
shall expire not later than ten years after the date of grant.

6.08. OTHER STOCK-BASED AWARDS. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares,
as deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation, Shares awarded purely as a "bonus" and not subject
to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, purchase rights and Awards
valued by reference to the book value of Shares or the value of securities of or
the performance of specified Subsidiaries. The Committee shall determine the
terms and conditions of such Awards, which may include performance criteria.
Shares delivered pursuant to an Award in the nature of a purchase right granted
under this Section 6.08 shall be purchased for such consideration, paid for at
such times, by such methods, and in such forms, including, without limitation,
cash, Shares, other Awards, or other property, as the Committee shall determine.

SECTION 7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.

7.01. PERFORMANCE -BASED AWARDS. Performance Awards, Performance-Based
Restricted Stock, and certain Other Stock-Based Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of section 162(m) and the regulations thereunder. Until otherwise
determined by the Committee, the performance goal shall be the attainment of
preestablished amounts of annual net income of the Corporation.

The payout of any such Award to a Covered Employee may be reduced, but
not increased, based on the degree of attainment of other performance criteria
or otherwise at the discretion of the Committee.

7.02. MAXIMUM YEARLY AWARDS. A maximum of 750,000* Shares (or the
equivalent Fair Market Value thereof with respect to Awards valued in whole or
in part by reference to, or otherwise based on or related to, Shares) may be
made subject to Performance Awards and Other Stock-Based Awards subject to
performance criteria in any Year. The maximum payout of such Awards in any Year
may not exceed 150%

- - ------------------------------------

*These maximum amounts have been adjusted to reflect the Company's
three-for-two stock split effected by way of a stock dividend and declared on
November 6, 1997.

-7-
<PAGE>

of the amount thereof, or 1,125,000* Shares in the aggregate and 281,250*
Shares in the case of any Participant. A maximum of 1,125,000* Shares
may be made subject to Options and Stock Appreciation Rights in any Year. No
Participant may receive Awards covering or representing more than 25% of the
maximum number of Shares which may be made subject to such types of Awards in
any Year. Notwithstanding the foregoing, awards of Options granted in connection
with an employee's initial employment with the Corporation or a Subsidiary shall
not count toward or be subject to such limitations. The Share amounts in this
Section 7.02 are subject to (i) adjustment by the Committee under Section 9, and
(ii) the Plan maximum under Section 4.

7.03. STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution for any other
Award granted under the Plan or any award granted under any other plan of the
Corporation, any Subsidiary, or any business entity to be acquired by the
Corporation or a Subsidiary, or any other right of a Participant to receive
payment from the Corporation or any Subsidiary. If an Award is granted in
substitution for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant of the new
Award. Awards granted in addition to or in tandem with other Awards or awards
may be granted either as of the same time as or a different time from the grant
of such other Awards or awards. The per Share exercise price of any Option,
grant price of any Stock Appreciation Right, or purchase price of any other
Award conferring a right to purchase Shares:

(i) Granted in substitution for an outstanding Award or award shall be
not less than the lesser of the Fair Market Value of a Share at the
date such substitute award is granted or such Fair Market Value at that
date reduced to reflect the Fair Market Value at that date of the Award
or award required to be surrendered by the Participant as a condition
to receipt of the substitute Award; or

(ii) Retroactively granted in tandem with an outstanding Award or award
shall be not less than the lesser of the Fair Market Value of a Share
at the date of grant of the later Award or the date of grant of the
earlier Award or award.

7.04. EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Shares,
other Awards (subject to Section 7.03), or other property based on such terms
and conditions as the Committee shall determine and communicate to the
Participant at the time that such offer is made.

7.05. TERM OF AWARDS. The term of each Award shall be for such period
as may be determined by the Committee; provided, however, that in no event shall
the term of any Option or a Stock Appreciation Right granted in tandem therewith
exceed a period of ten years from the date of its grant (or such shorter period
as may be applicable under Section 422 of the Code).

7.06. FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Corporation or a
Subsidiary upon the grant or exercise of an Award may be made in such forms as
the Committee shall determine, including without limitation, cash, Shares, other
Awards, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in
Shares.

- - ------------------------------------

*These maximum amounts have been adjusted to reflect the Company's
three-for-two stock split effected by way of a dividend and declared on November
6, 1997.

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<PAGE>

7.07. LOAN PROVISIONS. With the consent of the Committee, and subject
to compliance with the federal and state laws and other binding obligations or
provisions applicable to the Corporation, the Corporation may make, guarantee,
or arrange for, a loan or loans to a Participant with respect to the exercise of
any Option or other payment in connection with any Award, including the payment
by a Participant of any or all federal, state, or local income or other taxes
due in connection with any Award. Subject to such limitations, the Committee
shall have full authority to decide whether to make a loan or loans hereunder
and to determine the amount, terms, and provisions of any such loan or loans,
including the interest rate to be charged in respect of any such loan or loans,
whether the loan or loans are to be with or without recourse against the
borrower, the terms on which the loan is to be repaid and conditions, if any,
under which the loan or loans may be forgiven. Nothing in this Section shall be
construed as implying that the Committee shall or will offer such loans.

SECTION 8. GENERAL RESTRICTIONS APPLICABLE TO AWARDS.

8.01. RESTRICTIONS UNDER RULE 16B-3.

8.01.1. SIX-MONTH HOLDING PERIOD. Unless a Participant could
otherwise transfer an equity security, derivative security, or Shares
issued upon exercise of a derivative security granted under the Plan
without incurring liability under Section 16(b) of the Exchange Act,
(i) an equity security issued under the Plan, other than an equity
security issued upon exercise or conversion of a derivative security
granted under the Plan, shall be held for at least six months from the
date of acquisition, and (ii), with respect to a derivative security
issued under the Plan, at least six months shall elapse from the date
of acquisition of the derivative security to the date of disposition of
the derivative security (other than upon exercise or conversion) or its
underlying equity security; and (iii) any Award in the nature of a
Stock Appreciation Right must be held for six months from the date of
grant to the date of cash settlement.

8.01.2. NONTRANSFERABILITY. Awards which constitute derivative
securities (including any option, stock appreciation right, or similar
right) shall not be transferable by a Participant except by will or the
laws of descent and distribution (except pursuant to a beneficiary
designation authorized under Section 8.02) or, if then permitted under
Rule 16b-3, pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended, or the rules thereunder, and, in the case of
an Incentive Stock Option or, if then required by Rule 16b-3, any other
derivative security granted under the Plan, shall be exercisable during
the lifetime of a Participant only by such Participant or his guardian
or legal representative.

8.01.3. COMPLIANCE WITH RULE 16B-3. It is the intent of the
Corporation that this Plan comply in all respects with Rule 16b-3 in
connection with any Award granted to a person who is subject to Section
16 of the Exchange Act. Accordingly, if any provision of this Plan or
any Award Agreement does not comply with the requirements of Rule 16b-3
as then applicable to any such person, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.

8.02. LIMITS ON TRANSFER OF AWARDS; BENEFICIARIES. No right or interest
of a Participant in any Award shall be pledged, encumbered, or hypothecated to
or in favor of any party (other than the Corporation or a Subsidiary), or shall
be subject to any lien, obligation, or liability of such Participant to any
party (other than the Corporation or a Subsidiary). Unless otherwise determined
by the Committee (subject to the requirements of Section 8.01.2), no Award
subject to any restriction shall be assignable or transferable by a Participant
otherwise than by will or the laws of descent and distribution (except to the
Corporation under the terms of the Plan); provided, however, that a Participant
may, in the manner established by the

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Committee, designate a beneficiary or beneficiaries to exercise the rights
of the Participant, and to receive any distribution, with respect to any
Award, upon the death of the Participant. A beneficiary, guardian, legal
representative, or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of the Plan
and any Award Agreement applicable to such Participant or agreement applicable
to such, except to the extent the Plan and such Award Agreement or agreement
otherwise provide with respect to such persons, and to any additional
restrictions deemed necessary or appropriate by the Committee.

8.03. REGISTRATION AND LISTING COMPLIANCE. The Corporation shall not be
obligated to deliver any Award or distribute any Shares with respect to any
Award in a transaction subject to regulatory approval, registration, or any
other applicable requirement of federal or state law, or subject to a listing
requirement under any listing or similar agreement between the Corporation and
any national securities exchange or automatic stock quotation system, until such
laws, regulations, and contractual obligations of the Corporation have been
complied with in full, although the Corporation shall be obligated to use its
best efforts to obtain any such approval and comply with such requirements as
promptly as practicable.

8.04. SHARE CERTIFICATES. All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable
under applicable federal or state laws, rules and regulations thereunder, and
the rules of any national securities exchange or automated stock quotation
system on which Shares are listed or quoted. The Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions or any other restrictions that may be applicable to Shares,
including under the terms of the Plan or any Award Agreement. In addition,
during any period in which Awards or Shares are subject to restrictions under
the terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an Award or Shares has been deferred by the Committee or
a Participant, the Committee may require the Participant to enter into an
agreement providing that certificates representing Shares issuable or issued
pursuant to an Award shall remain in the physical custody of the Corporation or
such other person as the Committee may designate.

SECTION 9. ADJUSTMENT PROVISIONS. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of Shares which may thereafter be
issued in connection with Awards, (ii) the number and kind of Shares issued or
issuable in respect of outstanding Awards, and (iii) the vesting,
exercisability, exercise price, grant price, or purchase price relating to any
Award or, if deemed appropriate, make provision for a cash payment with respect
to any outstanding Award; provided, however, in each case, that, with respect to
Incentive Stock Options, no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence) affecting the Corporation or any Subsidiary or the
financial statements of the Corporation or any Subsidiary, or in response to
changes in applicable laws, regulations, or accounting principles.

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<PAGE>

SECTION 10. CHANGES TO THE PLAN AND AWARDS.

10.01. CHANGES TO THE PLAN. The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Corporation's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automatic stock quotation system on which the
Shares may be listed or quoted, or if the Board in its discretion determines
that obtaining such shareholder approval is for any reason advisable; provided,
however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation, or termination of the Plan may impair
the rights of such Participant under any Award theretofore granted to him.

10.02. CHANGES TO AWARDS. The Committee may waive any conditions or
rights under, or amend, alter, suspend, discontinue, or terminate, any Award
theretofore granted and any Award Agreement relating thereto; provided, however,
that, without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuation, or termination of any Award may impair
the rights of such Participant under such Award.

SECTION 11. GENERAL PROVISIONS.

11.01. NO RIGHTS TO AWARDS. No Participant or employee shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees.

11.02. NO SHAREHOLDER RIGHTS. No Award shall confer on any Participant
any of the rights of shareholder of the Corporation unless and until Shares are
duly issued or transferred to the Participant in accordance with the terms of
the Award.

11.03. TAX WITHHOLDING. The Corporation or any Subsidiary is authorized
to withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to a Participant, amounts of withholding and other taxes due with respect
thereto, its exercise, or any payment thereunder, and to take such other action
as the Committee may deem necessary or advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax liabilities relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash
payments in respect thereof in satisfaction of Participant's tax obligations.

11.04. NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Corporation or any Subsidiary or to interfere in any way with the right of the
Corporation or any Subsidiary to terminate his or her employment at any time or
increase or decrease his or her compensation from the rate in existence at the
time of granting of an Award.

11.05. UNFUNDED STATUS OF AWARDS. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Corporation; provided, however,
that the Committee may authorize the creation of trusts or make other
arrangements to meet the Corporation's obligations under the Plan to deliver
cash, Shares, other Awards, or other property pursuant to any award, which
trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee otherwise determines with the consent of each
affected Participant.

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<PAGE>

11.06. OTHER COMPENSATORY ARRANGEMENTS. The Corporation or any
Subsidiary shall be permitted to adopt other or additional compensation
arrangements (which may include arrangements which relate to Awards), and such
arrangements may be either generally applicable or applicable only in specific
cases.

11.07. FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

11.08. GOVERNING LAW. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, and any Award Agreement
shall be determined in accordance with the laws of the State of Florida, without
giving effect to principles of conflicts of laws, and applicable federal law.

SECTION 12. EFFECTIVE DATE. The Plan shall become effective on February
19, 1996, however, that, within one year after such date, the Plan shall have
been approved by the affirmative vote of the holders of a majority of the Shares
present or represented and entitled to vote (and the affirmative vote of a
majority of the Shares voting) at a meeting of the Corporation's shareholders,
or any adjournment thereof or by the written consent of the holders of a
majority of the Shares entitled to vote.

As adopted by the Board of Directors on February 19, 1996.

As amended by the Board of Directors effective as of December 13, 1997.

As amended by the Board of Directors effective as of September 25, 1997.

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EXHIBIT 10.2

THE VINCAM GROUP, INC.

LONG TERM INCENTIVE PLAN
1998

SECTION 1. PURPOSE. The purpose of this Long Term Incentive Plan (the
"Plan") of The Vincam Group, Inc. (together with any successor thereto, the
"Corporation") is (i) to promote the identity of interests between shareholders,
directors, employees and consultants of the Corporation by encouraging and
creating significant ownership of Common Stock of the Corporation by directors,
officers and other salaried employees of the Corporation and its subsidiaries;
(ii) to enable the Corporation to attract and retain qualified directors,
officers, employees and consultants who contribute to the Corporation's success
by their ability, ingenuity and industry; and (iii) to provide meaningful
long-term incentive opportunities for directors, officers, employees and
consultants who are responsible for the success of the Corporation and who are
in a position to make significant contributions toward its objectives.

SECTION 2. DEFINITIONS. In addition to the terms defined elsewhere in
the Plan, the following shall be defined terms under the Plan:

2.01 "Award" means any Performance Award, Option, Stock Appreciation
Right, Restricted Stock, Deferred Stock, Dividend Equivalent or Other
Stock-Based Award or any other right or interest relating to Shares or cash,
granted to a Participant under the Plan.

2.02 "Award Agreement" means any written agreement, contract or other
instrument or document evidencing an Award.

2.03 "Board" means the Board of Directors of the Corporation.

2.04 "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

2.05 "Committee" means the Stock Option Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan,
or any subcommittee of either; provided, however, that the Committee and any
subcommittee thereof, shall consist of two or more directors, each of whom is a
"nonemployee director" within the meaning of Rule 16b-3 under the Exchange Act
and an "outside director" as defined for purposes of Section 162(m) of the Code.

2.06 "Corporation" is defined in Section 1.

<PAGE>

2.07 "Covered Employee" has the same meaning as set forth in section
162(m) of the Code, and successor provisions.

2.08 "Deferred Stock" means a right, granted to a Participant under
Section 6.05, to receive Shares at the end of a specified deferral period.

2.09 "Dividend Equivalent" means a right, granted to a Participant
under Section 6.03, to receive cash, Shares, other Awards or other property
equal in value to dividends paid with respect to a specified number of Shares.

2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and regulations thereunder.

2.11 "Fair Market Value" means, with respect to Shares, Awards or other
property, the fair market value of such Shares, Awards or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee, the Fair
Market Value of Shares as of any date shall be the closing sales price on that
date of a Share as reported on the stock exchange or automated stock quotation
system on which Shares may be listed or quoted; provided, that if there were no
sales on the valuation date but there were sales on dates within a reasonable
period both before and after the valuation date, the Fair Market Value is the
weighted average of the closing prices on the nearest date before and the
nearest date after the valuation date (the "Average"). The Average is to be
weighted inversely by the respective numbers of trading days between the selling
dates and the valuation date.

2.12 "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code.

2.13 "Non-Qualified Stock Option" means an Option that is not intended
to be an Incentive Stock Option.

2.14 "Option" means a right, granted to a Participant under Section
6.06, to purchase Shares, other Awards or other property at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.

2.15 "Other Stock-Based Award" means a right, granted to a Participant
under Section 6.08, that relates to or is valued by reference to Shares.

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2.16 "Participant" means a person who, as a director, officer, employee
or consultant of the Corporation or any Subsidiary, has been granted an Award
under the Plan.

2.17 "Performance Award" means a right, granted to a Participant under
Section 6.02, to receive cash, Shares, other Awards or other property the
payment of which is contingent upon achievement of certain performance goals
specified by the Committee.

2.18 "Performance-Based Restricted Stock" means Restricted Stock that
is subject to a risk of forfeiture if specified performance criteria are not met
within the restriction period.

2.19 "Plan" is defined in Section 1.

2.20 "Restricted Stock" means Shares, granted to a Participant under
Section 6.04, that are subject to certain restrictions and to a risk of
forfeiture.

2.21 "Rule 16b-3 " means Rule 16b-3, as from time to time amended and
applicable to Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.

2.22 "Shares" means the Common Stock, $.001 par value, of the
Corporation and such other securities of the Corporation as may be substituted
for Shares or such other securities pursuant to Section 9.

2.23 "Stock Appreciation Right" means a right, granted to a Participant
under Section 6.07, to be paid an amount measured by the appreciation in the
Fair Market Value of Shares from the date of grant to the date of exercise of
the right, with payment to be made in cash, Shares, other Awards or other
property as specified in the Award or determined by the Committee.

2.24 "Subsidiary" means any corporation (other than the Corporation)
with respect to which the Corporation owns, directly or indirectly, 50% or more
of the total combined voting power of all classes of stock. In addition, any
other related entity may be designated by the Board as a Subsidiary, provided
such entity could be considered as a subsidiary according to generally accepted
accounting principles.

2.25 "Year" means a calendar year.

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<PAGE>

SECTION 3. ADMINISTRATION.

3.01 AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

(i) to select and designate Participants;

(ii) to designate Subsidiaries;

(iii) to determine the type or types of Awards to be granted to each
Participant;

(iv) to determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any
exercise price, grant price or purchase price, the applicable
performance goals, the certification of achievement of such goals prior
to the settlement of an Award, any restriction or condition, any
schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability or settlement of an
Award, and waivers or accelerations thereof and waiver of performance
conditions relating to an Award, based in each case on such
considerations as the Committee shall determine) and all other matters
to be determined in connection with an Award;

(v) to determine whether, to what extent and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid,
in cash, Shares, other Awards or other property, or an Award may be
canceled, forfeited or surrendered;

(vi) to determine whether, to what extent and under what circumstances
cash, Shares, other Awards or other property payable with respect to an
Award will be deferred either automatically, at the election of the
Committee or at the election of the Participant;

(vii) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;

(viii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;

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<PAGE>

(x) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.

3.02 MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Committee
shall have sole discretion in exercising such authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive and
binding on all persons, including the Corporation, Subsidiaries, Participants,
any person claiming any rights under the Plan from or through any Participant
and shareholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. A memorandum signed by all members of
the Committee shall constitute the act of the Committee without the necessity,
in such event, to hold a meeting. The Committee may establish other rules
governing meetings of the Committee, and the Committee may delegate to officers
or managers of the Corporation or any Subsidiary the authority, subject to such
terms as the Committee shall determine, to perform administrative functions
under the Plan.

3.03 LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Corporation or any
Subsidiary, the Corporation's independent certified public accountants or any
executive compensation consultant or other professional retained by the
Corporation to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Corporation acting on behalf of
the Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Corporation acting
on their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action, determination or
interpretation.

SECTION 4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as
provided in Section 9, the total number of Shares reserved and available for
Awards under the Plan shall be 900,000. For purposes of this Section 4, the
number of and time at which Shares shall be deemed to be subject to Awards and
therefore counted against the number of Shares reserved and available under the
Plan shall be the earliest date at which the Committee can reasonably estimate
the number of Shares to be distributed in settlement of an Award or with respect
to which payments will be made; provided, however, that the Committee may adopt
procedures for the counting of Shares relating to any Award for which the number
of Shares to be distributed or with respect to which payment will be made cannot
be fixed at the date of grant to ensure appropriate counting, avoid double
counting (in the case

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<PAGE>

of tandem or substitute awards), and provide for adjustments in any case in
which the number of Shares actually distributed or with respect to which
payments are actually made differs from the number of Shares previously counted
in connection with such Award.

If any Shares to which an Award relates are forfeited or the Award is
settled or terminates without a distribution of Shares (whether or not cash,
other Awards or other property is distributed with respect to such Award), any
Shares counted against the number of Shares reserved and available under the
Plan with respect to such Award shall, to the extent of any such forfeiture,
settlement or termination, again be available for Awards under the Plan.

SECTION 5. ELIGIBILITY. Awards may be granted only to individuals who
are directors, officers, employees or consultants of the Corporation or a
Subsidiary.

SECTION 6. SPECIFIC TERMS OF AWARDS.

6.01 GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
11.02), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including without
limitation the acceleration of vesting of any Awards or terms requiring
forfeiture of Awards in the event of termination of service as a director or
employment by the Participant. Except as provided in Sections 7.03 or 7.04, only
services may be required as consideration for the grant of any Award.

6.02 PERFORMANCE AWARDS. Subject to the provisions of Section 7.01 and
7.02, the Committee is authorized to grant Performance Awards to Participants on
the following terms and conditions:

(i) AWARD AND CONDITIONS. A Performance Award shall confer upon the
Participant rights, valued as determined by the Committee and payable
to, or exercisable by, the Participant to whom the Performance Award is
granted, in whole or in part, as determined by the Committee,
conditioned upon the achievement of performance criteria determined by
the Committee.

(ii) OTHER TERMS. A Performance Award may be denominated in Shares and
may be payable in cash, Shares, other Awards or other property, and
have such other terms as shall be determined by the Committee.

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<PAGE>

6.03 DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Shares or Awards, or otherwise reinvested.

6.04 RESTRICTED STOCK. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:

(iii) CERTIFICATES OF SHARES. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name
of the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, the Corporation shall retain physical possession of
the certificates, and the Participant shall deliver a stock power to
the Corporation, endorsed in blank, relating to the Restricted Stock.

(iv) DIVIDENDS. Unless otherwise determined by the Committee, cash
dividends paid on Performance-Based Restricted Stock shall be
automatically reinvested in additional shares of Performance-Based
Restricted Stock and cash dividends paid on other Restricted Stock
shall be paid to the Participant. Dividends reinvested in
Performance-Based Restricted Stock and Shares distributed in connection
with a stock split or stock dividend, and other property distributed as
a dividend, shall be subject to restrictions and a risk of forfeiture
to the same extent as the Restricted Stock with respect to which such
stock or other property has been distributed.

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<PAGE>

6.05 DEFERRED STOCK. The Committee is authorized to grant Deferred
Stock to Participants, on the following terms and conditions:

6.06 OPTIONS. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

(ii) TIME AND METHOD OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part,
the methods by which such exercise price may be paid or deemed to be
paid, the form of such payment, including, without limitation, cash,
Shares, other Awards or awards issued under other Corporation plans or
other property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements), and the methods by which Shares will
be delivered or deemed to be delivered to Participants. Options shall
expire not later than ten years after the date of grant.

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(iii) INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code, including but not limited to requirements
related to aggregate maximum fair market value of underlying Shares,
minimum exercise prices, Option duration and the requirement that no
Incentive Stock Option shall be granted more than ten years after the
effective date of the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under Section
422 of the Code. In the event a Participant voluntarily disqualifies an
Option as an Incentive Stock Option, the Committee may, but shall not
be obligated to, make such additional Awards or pay bonuses as the
Committee shall deem appropriate to reflect the tax savings to the
Corporation which result from such disqualification.

6.07 STOCK APPRECIATION RIGHTS. The Committee is authorized to grant
Stock Appreciation Rights to Participants on the following terms and conditions:

6.08 OTHER STOCK-BASED AWARDS. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to, Shares, as
deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation, Shares awarded purely as a "bonus" and not subject
to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, purchase rights and Awards
valued by reference to the book

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<PAGE>

value of Shares or the value of securities of or the performance of
specified Subsidiaries. The Committee shall determine the terms and conditions
of such Awards, which may include performance criteria. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 6.08 shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
other Awards or other property, as the Committee shall determine.

SECTION 7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.

7.01 PERFORMANCE-BASED AWARDS. Performance Awards, Performance-Based
Restricted Stock and certain Other Stock-Based Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of Section 162(m) and the regulations thereunder. Until otherwise
determined by the Committee, the performance goal shall be the attainment of
preestablished amounts of annual net income of the Corporation.

The payout of any such Award to a Covered Employee may be reduced, but
not increased, based on the degree of attainment of other performance criteria
or otherwise at the discretion of the Committee.

7.02 MAXIMUM YEARLY AWARDS. A maximum of 600,000 Shares (or the
equivalent Fair Market Value thereof with respect to Awards valued in whole or
in part by reference to or otherwise based on or related to Shares) may be made
subject to Performance Awards, Performance-Based Restricted Stock and Other
Stock-Based Awards subject to performance criteria in any Year. The maximum
payout of such Awards in any Year may not exceed 150% of the amount thereof, or
900,000 Shares in the aggregate and 225,000 Shares in the case of any
Participant. A maximum of 600,000 Shares may be made subject to Options and
Stock Appreciation Rights in any Year. No Participant may receive Awards
covering or representing more than 50% of the maximum number of Shares which may
be made subject to such types of Awards in any Year. Notwithstanding the
foregoing, awards of Options granted in connection with an employee's initial
employment with the Corporation or a Subsidiary shall not count toward or be
subject to such limitations. The Share amounts in this Section 7.02 are subject
to (i) adjustment by the Committee under Section 9 and (ii) the Plan maximum
under Section 4.

7.03 STAND-ALONE, ADDITIONAL, TANDEM AND SUBSTITUTE AWARDS. Awards
granted under the plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with or in substitution for any other
Award granted under the Plan or any award granted under any other plan of the
Corporation, any Subsidiary or any business entity to be acquired by the

10
<PAGE>

Corporation or a Subsidiary or any other right of a Participant to receive
payment from the Corporation or any Subsidiary. If an Award is granted
in substitution for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant of the new
Award. Awards granted in addition to or in tandem with other Awards or awards
may be granted either as of the same time as or a different time from the grant
of such other Awards or awards. The per Share exercise price of any Option,
grant price of any Stock Appreciation Right or purchase price of any other Award
conferring a right to purchase Shares:

7.04 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Shares,
other Awards (subject to Section 7.03) or other property based on such terms and
conditions as the Committee shall determine and communicate to the Participant
at the time that such offer is made.

7.05 TERM OF AWARDS. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any Option or a Stock Appreciation Right granted in tandem therewith
exceed a period of ten years from the date of its grant (or such shorter period
as may be applicable under Section 422 of the Code).

7.06 FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Corporation or a
Subsidiary upon the grant or exercise of an Award may be made in such forms as
the Committee shall determine, including without limitation, cash, Shares, other
Awards or other property, and may be made in a single payment or transfer, in
installments or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in
Shares.

7.07 LOAN PROVISIONS. With the consent of the Committee, and subject to
compliance with the federal and state laws and other binding obligations or
provisions applicable to the Corporation,

11
<PAGE>

the Corporation may make, guarantee or arrange for, a loan or loans to
a Participant with respect to the exercise of any Option or other payment in
connection with any Award, including the payment by a Participant of any or all
federal, state or local income or other taxes due in connection with any Award.
Subject to such limitations, the Committee shall have full authority to decide
whether to make a loan or loans hereunder and to determine the amount, terms and
provisions of any such loan or loans, including the interest rate to be charged
in respect of any such loan or loans, whether the loan or loans are to be with
or without recourse against the borrower, the terms on which the loan is to be
repaid and conditions, if any, under which the loan or loans may be forgiven.
Nothing in this Section shall be construed as implying that the Committee shall
or will offer such loans.

SECTION 8. GENERAL RESTRICTIONS APPLICABLE TO AWARDS.

8.01 RESTRICTIONS UNDER RULE 16B-3.

8.01.1 SIX-MONTH HOLDING PERIOD. Unless a Participant could
otherwise transfer an equity security, derivative security or Shares
issued upon exercise of a derivative security granted under the Plan
without incurring liability under Section 16(b) of the Exchange Act,
(i) an equity security issued under the Plan, other than an equity
security issued upon exercise or conversion of a derivative security
granted under the Plan, shall be held for at least six months from the
date of acquisition, and (ii), with respect to a derivative security
issued under the Plan, at least six months shall elapse from the date
of acquisition of the derivative security to the date of disposition of
the derivative security (other than upon exercise or conversion) or its
underlying equity security; and (iii) any Award in the nature of a
Stock Appreciation Right must be held for six months from the date of
grant to the date of cash settlement.

8.01.2 NONTRANSFERABILITY. Awards which constitute derivative
securities (including any option, stock appreciation right or similar
right) shall not be transferable by a Participant except by will or the
laws of descent and distribution (except pursuant to a beneficiary
designation authorized under Section 8.02) or, if then permitted under
Rule 16b-3, pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended, or the rules thereunder, and, in the case of
an Incentive Stock Option or, if then required by Rule 16b-3, any other
derivative security granted under the Plan, shall be exercisable during
the lifetime of a Participant only by such Participant or his guardian
or legal representative.

8.01.3 COMPLIANCE WITH RULE L6B-3. It is the intent of the
Corporation that this Plan comply in all respects with Rule 16b-3 in
connection with any Award granted to a person who is subject to Section
16 of the Exchange Act. Accordingly, if any provision of this Plan

12
<PAGE>

or any Award Agreement does not comply with the requirements of Rule
l6b-3 as then applicable to any such person, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.

8.02 LIMITS ON TRANSFER OF AWARDS; BENEFICIARIES. No right or interest
of a Participant in any Award shall be pledged, encumbered or hypothecated to or
in favor of any party (other than the Corporation or a Subsidiary), or shall be
subject to any lien, obligation or liability of such Participant to any party
(other than the Corporation or a Subsidiary). Unless otherwise determined by the
Committee (subject to the requirements of Section 8.01.2), no Award subject to
any restriction shall be assignable or transferable by a Participant otherwise
than by will or the laws of descent and distribution (except to the Corporation
under the terms of the Plan); provided, however, that a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any distribution, with
respect to any Award, upon the death of the Participant. A beneficiary,
guardian, legal representative or other person claiming any rights under the
Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award Agreement applicable to such Participant or
agreement applicable to such, except to the extent the Plan and such Award
Agreement or agreement otherwise provide with respect to such persons, and to
any additional restrictions deemed necessary or appropriate by the Committee.

8.03 REGISTRATION AND LISTING COMPLIANCE. The Corporation shall not be
obligated to deliver any Award or distribute any Shares with respect to any
Award in a transaction subject to regulatory approval, registration or any other
applicable requirement of federal or state law, or subject to a listing
requirement under any listing or similar agreement between the Corporation and
any national securities exchange or automatic stock quotation system, until such
laws, regulations and contractual obligations of the Corporation have been
complied with in full, although the Corporation shall be obligated to use its
best efforts to obtain any such approval and comply with such requirements as
promptly as practicable.

8.04 SHARE CERTIFICATES. All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable
under applicable federal or state laws, rules and regulations thereunder and the
rules of any national securities exchange or automated stock quotation system on
which Shares are listed or quoted. The Committee may cause a legend or legends
to be placed on any such certificates to make appropriate reference to such
restrictions or any other restrictions that may be applicable to Shares,
including under the terms of the Plan or any Award Agreement. In addition,
during any period in which Awards or Shares are subject to restrictions under
the terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an

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<PAGE>

Award or Shares has been deferred by the Committee or a Participant, the
Committee may require the Participant to enter into an agreement providing that
certificates representing Shares issuable or issued pursuant to an Award shall
remain in the physical custody of the Corporation or such other person as the
Committee may designate.

SECTION 9. ADJUSTMENT PROVISIONS. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase or
share exchange or other similar corporate transaction or event, affects the
Shares such that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of Shares which may thereafter be
issued in connection with Awards, (ii) the number and kind of Shares issued or
issuable in respect of outstanding Awards and (iii) the vesting, exercisability,
exercise price, grant price or purchase price relating to any Award or, if
deemed appropriate, make provision for a cash payment with respect to any
outstanding Award; provided, however, in each case that, with respect to
Incentive Stock Options, no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence) affecting the Corporation or any Subsidiary or the
financial statements of the Corporation or any Subsidiary, or in response to
changes in applicable laws, regulations or accounting principles.

SECTION 10. CHANGE OF CONTROL PROVISIONS.

10.01 ACCELERATION OF VESTING AND CASH-OUT RIGHTS. In the event of a
"Change of Control," as defined in Section 10.02:

(i) The performance criteria of fifty percent (50%), or one hundred
percent (100%) in the case of a Participant who is a non-employee
director of the Company, of each Participant's Performance Awards,
Performance-Based Restricted Stock and Other Stock-Based Awards shall
be deemed fully achieved and fifty percent (50%), or one hundred
percent (100%) in the case of a Participant who is a non-employee
director of the Company, of all such Awards shall be deemed fully
earned and vested, subject only to the restrictions on dispositions of
equity securities set forth in Section 8.01 and legal restrictions on
the issuance of Shares set forth in Section 8.04. In the case of
Participants other than non-employee directors of the Company, the
other fifty percent (50%) of such Participant's

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<PAGE>

Performance Awards, Performance-Based Restricted Stock and Other
Stock-Based Awards shall remain subject to all relevant restrictions,
limitations, terms and conditions that applied to such Award prior to
the Change of Control;

(ii) Fifty percent (50%), or one hundred percent (100%) in the case of
a Participant who is a non-employee director of the Company, of each
Participant's Options, Stock Appreciation Rights or other Awards in the
nature of rights that may be exercised which were not previously
exercisable shall become fully exercisable, subject only to the
restrictions on dispositions of equity securities set forth in Section
8.01 and legal restrictions on the issuance of Shares set forth in
Section 8.04. In the case of Participants other than non-employee
directors of the Company, the other fifty percent (50%) of such
Participant's Options, Stock Appreciation Rights or other Awards in the
nature of rights that may be exercised shall remain subject to all
relevant restrictions, limitations, terms and conditions that applied
to such Award prior to the Change of Control;

(iii) The restrictions, deferral limitations and forfeiture conditions
applicable to fifty percent (50%), or one hundred percent (100%) in the
case of a Participant who is a non-employee director of the Company, of
each Participant's other Awards granted under the Plan shall lapse and
such Awards shall be deemed fully vested, subject only to the
restrictions on dispositions of equity securities set forth in Section
8.01 and legal restrictions on the issuance of Shares set forth in
Section 8.04. In the case of Participants other than non-employee
directors of the Company, the other fifty percent (50%) of such
Participant's other Awards granted under the Plan shall remain subject
to all relevant restrictions, limitations, terms and conditions that
applied to such Award prior to the Change of Control; and

(iv) Fifty percent (50%), or one hundred percent (100%) in the case of
a Participant who is a non-employee director of the Company, of each
Participant's outstanding Performance Awards, Dividend Equivalents or
Stock Appreciation Rights, to the extent that such Performance Award,
Dividend Equivalent Right or Stock Appreciation Right is payable in
cash, shall be canceled and each such Participant holding any such
Award shall be paid in cash therefor. In the case of Participants other
than non-employee directors of the Company, the other fifty percent
(50%) of such Participant's outstanding Performance Awards, Dividend
Equivalents or Stock Appreciation Rights that are payable in cash shall
remain subject to all relevant restrictions, limitations, terms and
conditions that applied to such Award prior to the Change of Control.
Where the value of any such canceled Award must be calculated by
reference to Shares or the market price thereof, such Award shall be
valued on the basis of the "Change of Control Price" (as defined in
Section 10.03) as of the date that the Change of Control occurs, or
such other date as the Committee may determine prior to

15
<PAGE>

the Change of Control; provided however, that this Section 10.01(iv)
shall not apply in the case of any Award if the cancellation of and
payment for such Award would cause the Participant to incur actual
short-swing profits liability under Section 16(b) of the Exchange Act.

Notwithstanding anything contained herein to the contrary, in the event
of a Change of Control that is intended to be accounted for as a "pooling of
interests," and with respect to which the independent auditors for the
Corporation issue an opinion to the Corporation that, but for the application of
the provisions set forth in this Section 10.01 in connection with such Change of
Control, the Change of Control would qualify for pooling of interests accounting
treatment, the provisions set forth in this Section 10.01 shall be of no force
and effect.

10.02 CHANGE OF CONTROL. For purposes of Section 10, a "Change of
Control" shall mean:

(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other
than Carlos A. Saladrigas, Jose M. Sanchez, any affiliate or immediate
family member of either or any group comprised of any combination of
the foregoing) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 50% of either
(a) the then outstanding shares of Common Stock of the Corporation (the
"Outstanding Corporation Common Stock") or (b) the combined voting
power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change of Control:
(a) any acquisition by the Corporation or any of its subsidiaries, (b)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its subsidiaries
or (c) any acquisition by any corporation with respect to which,
following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior
to such acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities,
as the case may be; or

(ii) Individuals who, as of the effective date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board;

16
<PAGE>

provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened solicitation to which Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act applies or other actual or
threatened solicitation of proxies or consents; or

(iii) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case
may be; or

(iv) Approval by the shareholders of the Corporation of (a) a complete
liquidation or dissolution of the Corporation or (b) the sale or other
disposition of all or substantially all of the assets of the
Corporation, other than to a corporation, with respect to which
following such sale or other disposition, more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale
or other disposition, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be. The term
"the sale or other disposition of all or substantially all of the
assets of the Corporation" shall mean a sale or other disposition
transaction or series of related transactions involving assets of the
Corporation or of any direct or indirect subsidiary of the Corporation
(including the stock of any direct or indirect subsidiary of the
Corporation) in which the value of the assets or stock

17
<PAGE>

being sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board determines is
appropriate in the case where there is no readily ascertainable
purchase price) constitutes more than two-thirds of the fair market
value of the Corporation (as herein defined). The "fair market value of
the Corporation" shall be the aggregate market value of the then
Outstanding Corporation Common Stock (on a fully diluted basis) plus
the aggregate market value of the Corporation's other outstanding
equity securities. The aggregate market value of the shares of
Outstanding Corporation Common Stock shall be determined by multiplying
the number of shares of Outstanding Corporation Common Stock (on a
fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction or
series of related transactions (the "Transaction Date") by the average
closing price of the shares of Outstanding Corporate Common Stock for
the ten trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the
Corporation shall be determined in a manner similar to that prescribed
in the immediately preceding sentence for determining the aggregate
market value of the shares of Outstanding Corporation Common Stock or
by such other method as the Board shall determine is appropriate.

10.03 CHANGE OF CONTROL PRICE. For purposes of this Section 10, "Change
of Control Price" means the higher of (i) the average closing price, as reported
on the Nasdaq National Market, or any other exchange or trading system on which
the Shares are then primarily listed or traded for the ten trading days
immediately preceding the Change of Control, and (ii) the highest price paid or
offered in any transaction related to a Change of Control of the Corporation.

SECTION 11. CHANGES TO THE PLAN AND AWARDS.

11.01 CHANGES TO THE PLAN. The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except that any such amendment, alteration, suspension,
discontinuation or termination shall be subject to the approval of the
Corporation's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automatic stock quotation system on which the
Shares may be listed or quoted, or if the Board in its discretion determines
that obtaining such shareholder approval is for any reason advisable; provided,
however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation or termination of the Plan may impair
the rights of such Participant under any Award theretofore granted to him.

18
<PAGE>

11.02 CHANGES TO AWARDS. The Committee may waive any conditions or
rights under or amend, alter, suspend, discontinue or terminate, any Award
theretofore granted and any Award Agreement relating thereto; provided, however,
that, without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuation or termination of any Award may impair
the rights of such Participant under such Award.

SECTION 12. GENERAL PROVISIONS.

12.01 NO RIGHTS TO AWARDS. No Participant or employee shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees.

12.02 NO SHAREHOLDER RIGHTS. No Award shall confer on any Participant
any of the rights of shareholder of the Corporation unless and until Shares are
duly issued or transferred to the Participant in accordance with the terms of
the Award.

12.03 TAX WITHHOLDING. The Corporation or any Subsidiary is authorized
to withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to a Participant, amounts of withholding and other taxes due with respect
thereto, its exercise or any payment thereunder, and to take such other action
as the Committee may deem necessary or advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax liabilities relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash
payments in respect thereof in satisfaction of Participant's tax obligations.

12.04 NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Corporation or any Subsidiary or to interfere in any way with the right of the
Corporation or any Subsidiary to terminate his or her employment at any time or
increase or decrease his or her compensation from the rate in existence at the
time of granting of an Award.

12.05 UNFUNDED STATUS OF AWARDS. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Corporation; provided, however,
that the Committee may authorize the creation of trusts or make other
arrangements to meet the Corporation's obligations under the Plan to deliver
cash, Shares, other Awards or other property pursuant to any award, which trusts
or other arrangements shall be consistent with the "unfunded"

19
<PAGE>

status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.

12.06 OTHER COMPENSATORY ARRANGEMENTS. The Corporation or any
Subsidiary shall be permitted to adopt other or additional compensation
arrangements (which may include arrangements which relate to Awards), and such
arrangements may be either generally applicable or applicable only in specific
cases.

12.07 FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

12.08 GOVERNING LAW. The validity, construction and effect of the Plan,
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Florida, without giving
effect to principles of conflicts of laws, and applicable federal law.

SECTION 13. EFFECTIVE DATE. The Plan shall become effective on May 21,
1998, provided however, that, on such date or within one year after such date,
the Plan shall have been approved by the affirmative vote of the holders of a
majority of the Shares present or represented and entitled to vote (and the
affirmative vote of a majority of the Shares voting) at a meeting of the
Corporation's shareholders, or any adjournment thereof or by the written consent
of the holders of a majority of the Shares entitled to vote.

As adopted by the Board of Directors as of March 9, 1998.

EXHIBIT 10.3

DEDUCTIBLE LIABILITY INSURANCE POLICY

DECLARATIONS

Item 1. Policy No.: NXS 0133598-01

Item 2. Company: Reliance Insurance Company of Illinois

Item 3. Insured: THE VINCAM GROUP, INC. ET AL (SEE ENDT' #1)

Item 4. Inception Date: 12/31/97
Expiration Date: 12/31/2000

Item 5. Premium: $4000 FLAT-(See Item H-Premium)

Item 6. Covered Policies:

INSURER POLICY POLICY POLICY POLICY DEDUCTIBLE
------- COVERAGE TYPE NUMBER PERIOD AMOUNT
-------- ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Policy RIC W/C & E/L SAME * * $1,000,000

</TABLE>

* Schedule of Policies shall be maintained on file with the Company and
this Declarations Page shall be updated by endorsement on a quarterly basis.

<TABLE>

<S> <C> <C>
Item 7. Company's Limits of Liability: A. For each Covered Policies $750,000
each and every accident/ occurrence
in excess of $250,000 each and
every accident/ occurrence

Item 8. Self-insured Retention: A. For each Covered Policies $2000
each & every medical only claim
</TABLE>

<PAGE>

POLICY

In Consideration of the payment of the premium and in reliance upon the
statements made to the Company, and subject to the Self-Insured Retention and
the Limits of Liability, and the limitations, exclusions, terms and conditions
of this Policy, the Company agrees with the Insured as follows:

I. DEFINITIONS

A. INSURED

"Insured" means the Insureds designated in the Declarations.

B. COMPANY

"Company" means Reliance Insurance Company of Illinois.

C. INSURER

"Insurer" means an insurance company that issued the Covered Policies as
listed in Item 6 of the Declarations.

D. POLICY

"Policy" means this deductible liability insurance policy.

E. POLICY PERIOD

"Policy Period" means the period from the Inception date of this Policy
through the Expiration date as set forth in Item 4 of the Declarations, or
the Policy's earlier termination date, if any.

F. COVERED POLICIES

"Covered Policies" means only those insurance policies issued to an
Insured by an Insurer as specified in Item 6 of the Declarations.

G. DEDUCTIBLE AMOUNTS

"Deductible Amounts" means any amounts actually paid by an Insurer with
respect to a claim under a Covered Policy and for which an Insured is
responsible for reimbursing the Insurer under the terms of any deductible
provision or endorsement of a Covered Policy. Such Deductible Amounts may
include but are not limited to damages, benefits, losses, or costs, fees
and expenses for investigation, negotiation, settlement or defense.
"Deductible Amounts" shall not include any premium taxes, surcharges or
assessments arising out of or attributable to an Insured's obligations to

2
<PAGE>

reimburse an Insurer whether the Insured is required to pay the Insurer
for such premium taxes, surcharges or assessments under the Covered Policy
or otherwise.

II. INSURING AGREEMENTS

A. COVERAGE

The Company, subject to the Self-Insured Retention and as described in E,
below will pay on behalf of the Insured all Deductible Amounts which the
Insured shall become obligated to pay up to the Limits of Liability as
described in D, below to an Insurer under a Covered Policy listed in Item
7 of the Declarations.

B. NO DUTY TO DEFEND

The Company shall have no duty to investigate or defend any claim, suit or
proceeding commenced against the Insured under this Policy or any Covered
Policy. The Company shall have the right to associate, at its own expense,
with the Insured in the defense or investigation of any claim, suit or
proceeding involving the Covered Policies listed in Item 7 of the
Declarations.

C. PAYMENTS TO INSURERS LISTED IN DECLARATIONS

All Deductible Amounts payable under this Policy shall be paid on behalf
of the Insured directly to the Insurer on the Covered Policy listed in
Item 7 of the Declarations. The payment of such Deductible amounts shall
be made in satisfaction of the Insured's obligations to such Insurer under
the Covered Policy. The Insured irrevocably waives any rights to such
payments.

D. LIMITS OF LIABILITY

The amount stated in Item 6a. for each Covered Policies is the most the
Company will pay for Deductible Amounts under each Covered Policies of
each accident/occurrence.

E. SELF-INSURED RETENTION

The Company will not pay any Deductible Amounts within the Self-Insured
Retention stated in Item 8 of the declarations for each covered policy.

III. EXCLUSIONS

The Insurance under this Policy covers only those Deductible Amounts which
the Insured shall become obligated to pay to an Insurer under the
deductible endorsement to the Covered Policies listed in Item 6 of the
Declarations. Any Deductible Amounts not covered or excluded under the
Covered Policies shall not be covered under this

3
<PAGE>

Policy and the Company shall have no liability to pay such Deductible
Amounts on behalf of the Insured.

IV. CONDITIONS

A. NOTICE OF CLAIM

The Insured shall provide the Company with a copy of any and all
notices and information on claims made under the Covered Policies. The
Insured shall provide the Company with a copy of any such notices or
information at the same time that it provides such notices or
information to an Insurer. The Insured shall deemed to have comply with
this provision once the claim is reported to the Third Party
Administrator.

In addition, the Insured shall notify the Company in writing as soon as
practicable of any claim for reimbursement of any amounts within the
self-insured retention provision by the Insurer under a Covered Policy.
The notice shall include: (1) the name of the Insurer, (2) the
amount(s) sought by the Insurer, (3) the amount(s) paid or reserved by
the Insurer for such claim, suit or proceeding, including indemnities,
medical expenses or benefits, and allocated loss adjustment expense,
(4) the amount of the self-insured retention, if any, applicable to
such claim, suit or proceeding, (5) the Insurer's claim number, (6) the
claimant's name and address, (7) the date of accident or occurrence
that is the basis for such claim, suit or proceeding and (8) any other
relevant information requested by the Company. The Insured shall
cooperate with the Company in the investigation and settlement of any
claim under this Policy.

B. SUNSET

The Company shall have no obligation to pay Deductible Amounts on
behalf of the Insured unless a claim has been submitted by the Insured
to the Company in accordance with IV. A above, within seven (7) years
from the last day of the Policy Period.

C. FALSE OF FRAUDULENT CLAIMS

If the Insured submits any claim that the Insured knows is false or
fraudulent, in whole or part, as regards amount of otherwise, this
policy shall be void and all insurance under this Policy shall be
forfeited.

D. SUBROGATION

The Company shall be subrogated to the rights of the insured to recover
from any third party including any Deductible Amounts paid on behalf of
the Insured to such third party liable for such Deductible amounts. The
Insured hereby assigns its rights to participate in any recoveries by
an Insurer. The Insured shall cooperate fully with the Company to
recover such Deductible Amounts.

4
<PAGE>

E. OTHER INSURANCE

Except with respect to Covered Policies the insurance under this Policy
shall be excess insurance over and above any other applicable insurance
available to the Insured, whether such other insurance is stated to be
primary, contributing, excess, contingent or otherwise and whether such
other insurance is valid and collectible.

F. BANKRUPTCY OR INSOLVENCY OF INSURED

Bankruptcy or insolvency of the Insured shall not relieve the Company
of any of its obligations hereunder.

G. ACTION AGAINST THE COMPANY

No action shall lie against the Company unless, as a condition
precedent thereto the Insured shall have fully complied with all the
terms and conditions of this Policy. In addition, no action shall lie
against the Company until the amount of the Insured's obligation to pay
Deductible Amounts under the Covered Policies listed in Item 8 of the
Declarations shall have been determined finally and payment made by an
Insurer under a Covered Policy.

Nothing contained in this Policy shall give any person or entity any
right to join the Company as a co-defendant in any action against the
Insured to determine the Insured's liability to such person or
organization.

H. PREMIUM

The Premium will be charged Flat as follows:

12/31/97-98 $4000. Flat
12/31/98-99 $4000. Flat
12/31/99-2000 $4000. Flat

I. AUDIT

The Company may examine and audit the Insured's books and records at
any time during the Policy Period or within five years after the last
day of the Policy Period or until all timely and properly reported
claims are paid under this Policy, whichever is alter, on any matter
relating to the insurance provided under the Policy. The Insured shall
cooperate fully with the Company during any audit, and shall provide
the Company with any information or documents requested by the Company
that relates to the rights and obligations of the insured and the
Company under this Policy.

5
<PAGE>

J. CANCELLATION

This Policy may be canceled by the Company by mailing to the Company
written notice of cancellation. The notice of cancellation must be
mailed to the Insured not less than ten (10) days before the effective
date of cancellation; but only for the failure of the Insured to pay
the premium when due. In the event this policy is canceled for
non-payment of premium, all the Covered Policies will be canceled
simultaneously.

If the Policy is canceled earned premium shall be computed on a short
rate basis. Adjustment of the premium may be made at the time this
Policy is canceled or as soon thereafter as practicable.

If this Policy is canceled, the liability of the Company to pay
Deductible Amounts on behalf of the Insured shall be cut-off and shall
of the effective date of such cancellation. In such event, the Company
shall have no obligation to pay Deductible Amounts on behalf of the
Insured for any claims that were not timely, properly and fully
reported to the Company before the effective date of cancellation. In
addition, the Company shall be liable only for those Deductible Amounts
relating to losses or expenses actually paid by an Insurer under
Covered Policies before the effective date of cancellation of this
Policy. Contingent or pending losses or expenses under a Covered Policy
shall not be covered and the Company shall have no liability for any
Deductible Amounts payable on behalf of the Insured to the Insurer for
such losses or expenses.

K. NON-RENEWAL

This Policy may be non-renewed by the Company by mailing to the Insured
written notice of non-renewal. The notice of non-renewal must be mailed
to the Insured not less than thirty (30) days before the effective date
of nonrenewal.

L. NAMED INSURED

The Insured named in the Declarations is the only Insured under this
Policy. No other person or entity shall have any rights as an Insured
under this Policy.

M. ASSIGNMENT

This Policy shall be void if assigned or transferred without the prior
written consent of the Company.

N. CHANGES

This Policy may not be changed, amended or otherwise modified except
through a validly issued written endorsement executed by the Company.
Information provided

<PAGE>

to an agent of the Company shall not result in a change, amendment or
other modification to any part of this Policy or stop the company from
asserting any right under the Policy or relieve the Insured of any duty
under this Policy.

O. ARBITRATION

If any dispute arises between the Insured and the Company either before
or after termination of this Policy with reference to the
interpretation of this Policy or the rights of either party under this
Policy, the dispute shall be referred to arbitration. The arbitration
will involve three arbitrators, one to be selected by each party and
the third by the two parties selected. If either party refuses or
neglects to appoint an arbitrator within thirty (30) days after the
receipt of written notice from the other party requesting it to do so,
the requesting party may nominate two arbitrators who shall select the
third arbitrator. In the event the two arbitrators do not agree on the
selection of the third arbitrator shall be selected pursuant to the
commercial arbitration rules of the American Arbitration Association.
The arbitrators shall be officials or former officials of other
insurance of reinsurance companies. The arbitration shall take place in
the State of New York and the arbitration proceedings shall be governed
by the rules of the American Arbitration Association and the New York
Arbitration Law. The arbitrators shall consider this Policy honorable
engagement rather than merely a legal obligation; they are relieved of
all judicial formalities and may abstain from following the strict
rules of the law; provided, however, that the arbitrators may not
render any award of punitive or exemplary damages. The decision of a
majority of the arbitrators shall be final and binding on both the
Insured and the Company and judgment upon the award rendered by the
arbitrators may be entered into any court having jurisdiction thereof.
The expense of the arbitrators and of the arbitration shall be equally
divided between the Insured and the Company. Arbitration is the sole
remedy for disputes arising under this Policy. The arbitrators are
relieved of any judicial formalities or rules of law and shall be bound
to the standards and practices of the insurance business and the intent
of this Policy.

P. CHOICE OF LAW AND FORUM SELECTION

This Policy shall be interpreted according to the laws of the State of
New York. Any claim, suit or proceeding commenced by the Insured
against the company shall be brought in a state or federal court of
competent jurisdiction in the State of New York.

Executed this 20th day of May, 1998.

By: /s/ SIGNATURE ILLEGIBLE
--------------------------------
Authorized Company Representative

Title: FIRST VICE PRESIDENT

<PAGE>
(The Attaching Clause need be completed only when this endorsement is issued
subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT
#1 REVISED

This endorsement, effective on 12/31/97 at 12:01 A.M. standard time, forms
a part of

Policy No. NXS0133598-01 of the Reliance Insurance Company
of Illinois
Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
----------------------------------
Authorized Representative

It is agreed that IRM #3, Insured, is extended to include the following:

The Vincam Group, Inc.
Vincam Human Resources, Inc.
Vincam Human Resources, Inc. I
Vincam Human Resources, Inc. II
Vincam Human Resources, Inc. III
Vincam Human Resources, Inc. IV
Vincam Human Resources, Inc. V
Vincam Human Resources, Inc. VI
Vincam Human Resources, Inc. VII
Vincam Human Resources, Inc. of Michigan
Psych/Care, Inc.
Vincam Occupational Health Systems, Inc.
Vincam Insurance Services, Inc.
American Pediatrics Systems, Inc.
Vincam Practice Management, Inc.
CP Investments, Inc.
Vincam/Staff Administrators, Inc. of Colorado (DAB: Vincam Human
Resources, Inc.)
Vincam/Staff Administrators, Inc. of California (DAB: Vincam Human
Resources, Inc.)
Vincam/Staff Administrators, Inc. of Western Colorado (Vincam Human Resources)
American Staffing, Inc.
Vincam/Amstaff, Inc.
Amstaff HR Services, Inc.
R.D.M., Inc.
American Staffing, Inc.
Amstaff PEO, Inc.
Amstaff H.R.M., Inc.
Amstaff Management Services, Inc.
Amstaff Professional Services, Inc.
Amstaff Employer Resources, Inc.
Amstaff P.C.S., Inc.
A.E. Services Group, Inc.
Staff Resources Services, Inc.
Staffing Group Enterprises, Inc.
AM Risk Management Company
Addison, Inc.
ATCO PEO, Inc.
Vincam/Staffing Network, Inc.(DAB: Staffing Network, Inc.
A Vincam Group Company)
Corporate Staff Services, Inc.

<PAGE>

(The Attaching Clause need be completed only when this endorsement is
issued subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT #2

This endorsement, effective on 12/31/97 at 12:01 A.M. standard time, forms
a part of

Policy No. NXS0133598-01 of the Reliance Insurance Company
of Illinois
Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
-----------------------------------
Authorized Representative

It is agreed that Item 6 Covered Policies numbers are as follows:

Policy Series:

NWA2114201 through NWA2114300
NWA1012701 through NWA1012800
NWA1012500 through NWA1012700
NWA2114301 through NWA2114450

Master Policy #NWA0133600-01
#NWA2114248-01
#NWA2114255-01

Schedule of Policies may vary according to state regulations and are maintained
in the Company's files.

<PAGE>

(The Attaching Clause need be completed only when this endorsement is issued
subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT#2

This endorsement, effective on 12/3 at 12:01 A.M. standard time, forms
a part of

Policy No.NXS0133598-01 of the Reliance Insurance Company
of Illinois
Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
-----------------------------------
Authorized Representative

It is agreed that Item 6 Covered Policies numbers are as follows:

Policy Series:

NWA2114201 through NWA2114300
NWA1012701 through NWA1012800
NWA1012500 through NWA1012700
NWA2114301 through NWA2114450

Master Policy # NWA0133600-01
# NWA2114248-01
# NWA2114255-01

Schedule of Policies may vary according to state regulations and are maintained
in the Company's files.

EXHIBIT 10.4

FIRST AMENDMENT TO DEVELOPMENT AGREEMENT

THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (the "First Amendment") made
and entered into as of the 29th day of June, 1998 by and between Codina
Development Corporation, a Florida corporation (the "Developer") and The Vincam
Group, Inc., a Florida corporation (the "Agent"), as agent for Fleet Real
Estate, Inc., a Rhode Island corporation (the "Owner"), pursuant to that certain
Agency Indemnity and Support Agreement dated as of December 9, 1997 and entered
into by and between the Owner and the Agent (the "Agency Agreement").

W I T N E S S E T H:

WHEREAS, the Developer and the Agent have entered into that certain
Development Agreement, dated as of September 12, 1997 (the "Agreement"); and

WHEREAS, Developer and Agent have agreed to amend the Agreement in the
manner set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties do hereby
agree as follows:

1. RECITALS. The foregoing recitals are true and correct and are
incorporated into this First Amendment as if fully set forth herein.

2. CONTRACT TIME. The date "June 1, 1998" set forth in the second line
of the definition of "Contract Time" in Article 2 of the Agreement is hereby
changed to "October 1, 1998."

3. GUARANTEED FINAL COMPLETION DATE. The date "July 31, 1998" set forth
in the first and sixth lines of the definition of "Guaranteed Final Completion
Date" in Article 2 of the Agreement is hereby changed to "November 30, 1998."

4. BONUS. Section 7.3.1 of the Agreement is hereby deleted in its
entirety and the following is hereby substituted therefor:

The Developer shall achieve Substantial Completion of the Project
within the Contract Time. Subject to the terms of this paragraph, in
the event that the Date of Substantial Completion is a date earlier
than September 15, 1998 (the "Bonus Date"), the Agent shall be
obligated to pay to the Developer, as a bonus the sum of Three
Thousand Three Hundred and Thirty-Three No/100 Dollars ($3,333.00)
per day, for each and every day by which the Date of Substantial
Completion precedes the Bonus Date. Notwithstanding anything
contained herein, or elsewhere in the Agreement, to the contrary, in
no event shall (a) the Agent be obligated to the Developer for the
payment of a bonus in excess of Seventy-Five Thousand and No/100
Dollars ($75,000.00)

<PAGE>

or (b) the Bonus Date be extended, unless an Authorized Extension is
granted (i) for a delay for which the Agent is directly responsible
or (ii) for a delay caused by an Event of Force Majeure, in which
case the maximum number of days by which the Bonus Date may be
extended is sixty (60) days.

5. LIQUIDATED DAMAGES. Section 7.3.2 of the Agreement is hereby deleted
in its entirety and the following is hereby substituted therefor:

The Agent and the Developer agree and acknowledge that the Agent
shall suffer substantial damages in the event that the Developer
fails to achieve Substantial Completion of the Project, by itself or
through others, within the Contract Time. The Agent's damages are
not readily ascertainable as of the date of this Agreement.
Therefore, if the Developer fails to achieve Substantial Completion
of the Project, by itself or through others, within the Contract
Time, the Developer shall be obligated to pay to the Agent: (a) as
liquidated and agreed damages, and not as a penalty, liquidated
damages in the amount of Four Thousand Five Hundred and No/100
Dollars ($4,500.00) per day, for each and every day that the
Developer fails to achieve Substantial Completion after October 7,
1998 through and including January 21, 1998 (the "LD Period"). The
Developer shall, in no event, be obligated to the Agent for the
payment of liquidated damages in excess of Four Hundred Seventy-Five
Thousand and No/100 Dollars ($475,000.00). In the event that the
Developer fails to achieve Substantial Completion prior to the
expiration of the LD Period, the liquidated damages provision shall
be null and void and of no further force or effect and the Agent
shall be entitled to recover from the Developer actual damages,
meaning damages caused by the Developer's delay in achieving
Substantial Completion, including any necessary rental and moving
expenses incurred by the Agent and reasonable attorneys' fees and
expert witness fees, but excluding other consequential damages which
accrue after the expiration of the Contract Time. The Developer
expressly agrees that the Agent shall have the right to deduct any
amounts due for liquidated damages or actual damages from any and
all amounts required to be paid by the Agent under this Agreement.

6. ENTIRE AGREEMENT. Except as expressly modified and amended herein,
all of the terms, covenants, conditions and provisions of the Agreement shall
remain unchanged and in full force and effect. Except as set forth herein,
nothing contained herein shall in any way invalidate, impair or release any
covenant, condition, agreement or stipulation contained in the Agreement, or
shall otherwise impair or affect the validity of the Agreement.

2
<PAGE>

7. NO FURTHER OBLIGATIONS. Nothing herein shall be deemed or construed
as creating any obligation of the Agent to further extend the time for
completion of the Project, or to grant any further extension to the Developer,
or to consider any request of the Developer of any of the foregoing.

8. NO THIRD PARTY BENEFICIARIES. Nothing expressed or implied in this
First Amendment is intended, or shall be construed, to confer upon or give any
person other than the parties hereto and their respective legal representatives,
successors and assigns, any rights or remedies under or by reason of this First
Amendment.

9. SEVERABILITY. In the event any one or more of the words, phrases,
sentences, clauses, sections or subsections contained in this First Amendment or
any part hereof, all of which are inserted conditionally on their being valid in
law, shall be declared invalid, this First Amendment shall be construed as if
such word or words, phrase or phrases, sentence or sentences, section or
sections, or subsection or subsections, had not been inserted.

10. SUCCESSORS AND ASSIGNS. This First Amendment shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.

11. SECTION HEADINGS. The section and other headings contained in this
First Amendment are for reference purposes only and shall not affect the meaning
or interpretation of this First Amendment.

12. ENTIRE AGREEMENT. This First Amendment constitutes the entire
agreement among the parties hereto, and supersedes all prior agreements,
understandings, negotiations and discussions, both written and oral, among the
parties hereto, with respect to the subject matter hereof, all of which prior
agreements, understandings, negotiations and discussions, both written and oral,
are merged into this First Amendment. Nothing herein is intended to supersede or
annul any express written term or provision of the Agreement, as amended by this
First Amendment.

13. TIME OF ESSENCE. Time is of the essence under this First Amendment
and each of the transactions contemplated to be consummated hereunder.

14. MODIFICATIONS. This First Amendment may not be amended or modified
in any way except by a written instrument executed by all of the parties hereto.

15. LIMITED MODIFICATION OF AGREEMENT. Except as may be expressly
modified hereby, all other covenants, terms and conditions contained in the
Agreement shall remain unchanged and in full force and effect.

16. GOVERNING LAW. This First Amendment shall be construed in
accordance with and governed by the laws of the State of Florida without regard
to the principles of conflicts of laws thereunder.

3
<PAGE>

17. COUNTERPARTS. This First Amendment may be executed in any number of
counterparts, all of which shall be deemed to be an original, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed in four (4) counterparts, each of which shall constitute an
original and all of which, taken together, shall constitute a single instrument,
by and through their duly authorized representatives, as of the date first
written above.

DEVELOPER:

Signed, sealed and delivered in CODINA DEVELOPMENT
the presence of: CORPORATION, a Florida corporation

/S/ KATHLEEN YONCE By: /s/ O. FORD GIBSON
- - -------------------- -------------------------------
Name: KATHLEEN YONCE Name: O. FORD GIBSON
Title: PRESIDENT

/s ANIS C. HERNANDEZ
- - -------------------------
Name: ANNIS c. HERNANDEZ

AGENT:

THE VINCAM GROUP, INC., a Florida
corporation

/s/ L. F. SIGNORA By: /s/ JOHN T. CARLEN
- - ------------------------- -------------------------------
Name: L. F. SIGNORA Name: JOHN T. CARLEN
Title: PRESIDENT

/s/ FANNY MONCADA
- - ------------------------
Name: FANNY MONCADA

<PAGE>

ACKNOWLEDGMENT, CONSENT AND JOINDER

The undersigned hereby acknowledges receipt and review of this First Amendment
to the Development Agreement and acknowledges, agrees and consents the terms
and provisions hereof.

OWNER:

Signed, sealed and delivered in FLEET REAL ESTATE, INC.,
the presence of: a Rhode Island corporation

/s/ CAROLINE HUBBARD By: /s/ JAY C. HART
- - ------------------------- -------------------------------
Name: CAROLINE HUBBARD Name: JAY C. HART
Title: SENIOR VICE PRESIDENT

/s/ JENNIFER DUMAS
- - ------------------------
Name: JENNIFER DUMAS

LENDER:

FLEET NATIONAL BANK, as Agent

/s/ LORI H. JOU By: /s/GINGER STOLZENTHALER
- - ------------------------- -------------------------------
Name: LORI H. JOU Name: GINGER STOLZENTHALER
Title: SENIOR VICE PRESIDENT

/s CARL S. GERAGNTY
- - -------------------------
Name: CARL S. GERAGNTY

EXHIBIT 10.5

DEDUCTIBLE LIABILITY INSURANCE POLICY

DECLARATIONS

Item 1. Policy No.: NGB 0133600-01

Item 2. Company: Reliance Insurance Company of Illinois

Item 3. Insured: THE VINCAM GROUP, INC. ET AL
2850 Douglas Road
Coral Gables, Florida 33134

Item 4. Inception Date: 12/31/97
Expiration Date: 12/31/2000

Item 5. Premium: $11,827,957. Deposit Premium for the
12/31/97-98 policy period.
(See Item I-Premium)

Item 6. Covered Policies:

POLICY POLICY POLICY POLICY DEDUCTIBLE
POLICY INSURER COVERAGE TYPE NUMBER PERIOD AMOUNT
- - ------ ------- -------- ------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
RIC W/C W/C See end't * $2000 EACH &
#2 EVERY MEDICA
ONLY CLAIM
</TABLE>

* Schedule of Policies and Effective Dates shall be maintained on file
with the Company and this Declarations Page shall be updated by endorsement on a
quarterly basis.

Item 7. Company's Limits of Liability: A. For each Covered Policies:
$250,000. accident/each
occurrence

Item 8. Self-Insured Retention: A. For each Covered Policies:
$2000 each and every Medical
only claim plus any unallocated
claim expenses under the
Insured's retention.

<PAGE>

POLICY

I. DEFINITIONS

A. INSURED

"Insured" means the Insureds designated in the Declarations.

B. COMPANY

"Company" means Reliance Insurance Company of Illinois.

C. INSURER

"Insurer" means an insurance company that issued a Covered Policies as
listed in Item 6 of the Declarations.

D. POLICY

"Policy" means this deductible liability insurance policy.

E. POLICY PERIOD

"Policy Period" means the period from the Inception date of this Policy
through the Expiration date as set forth in Item 4 of the Declarations,
or the Policy's earlier termination date, if any.

F. COVERED POLICIES

"Covered Policies" means only those insurance policies issued to an
Insured by an Insurer as specified in Item 6 of the Declarations.

G. DEDUCTIBLE AMOUNTS

"Deductible Amounts" means any amounts actually paid by an Insurer with
respect to a claim under a Covered Policy and for which an Insured is
responsible for reimbursing the Insurer under the terms of any
deductible provision or endorsement of a Covered Policies. Such
Deductible Amounts may include but are not limited to damages, benefits,
losses, or costs, fees and expenses for investigation, negotiation,
settlement or defense. "Deductible Amounts" shall not include any
premium taxes, surcharges or assessments arising out of or attributable
to an Insured's obligations to

2
<PAGE>

reimburse an Insurer whether the Insured is required to pay the Insurer
for such premium taxes, surcharges or assessments under the Covered
Policy or otherwise.

II. INSURING AGREEMENTS

A. COVERAGE

The Company, subject to the Self-Insured Retention and as described in
E, below will pay on behalf of the Insured all Deductible Amounts which
the Insured shall become obligated to pay up to the Limits of Liability
as described in D, below to an Insurer under a Covered Policies listed
in Item 6 of the Declarations.

B. NO DUTY TO DEFEND

The Company shall have no duty to investigate or defend any claim, suit
or proceeding commenced against the Insured under this Policy or any
Covered Policies. The Company shall have the right to associate, at its
own expense, with the Insured in the defense or investigation of any
claim, suit or proceeding involving the Covered Policies listed in Item
7 of the Declarations.

C. PAYMENTS TO INSURERS LISTED IN DECLARATIONS

All Deductible Amounts payable under this Policy shall be paid on behalf
of the Insured directly to the Insurer on the Covered Policies listed in
Item 6 of the Declarations. The payment of such Deductible Amounts shall
be made in satisfaction of the Insured's obligations to such Insurer
under the Covered Policies. The Insured irrevocably waives any rights to
such payments.

D. LIMITS OF LIABILITY

The amount stated in Item 7a. for each Covered Policies is the most the
Company will pay for Deductible Amounts under each Covered Policies of
each occurrence.

E. SELF-INSURED RETENTION

The Company will not pay any Deductible Amounts within the Self-Insured
Retention stated in Item 8 of the declarations for each Covered
policies.

3
<PAGE>

III. DEDUCTIBLE LOSS FUND

On the effective of this Agreement the Company through the Reinsurance
will establish an account with the Company's designated Third Party
Administrator (TPA) on behalf of the Insured to fund Losses. The Insured
shall establish an account with the Company to fund losses up to the
Insured's Deductible Amounts as shown on Item 6 of Declaration.

IV. EXCLUSIONS

The Insurance under this Policy covers only those Deductible Amounts
which the Insured shall become obligated to pay to an Insurer under the
deductible endorsement to the Covered Policies listed in Item 6 of the
Declarations. Any Deductible Amounts not covered or excluded under the
Covered Policies shall not be covered under this Policy and the Company
shall have no liability to pay such Deductible Amounts on behalf of the
Insured.

V. CONDITIONS

A. NOTICE OF CLAIM

The Insured shall provide the Company with a copy of any and all notices
and information on claims made under the Covered Policies. The Insured
shall provide the Company with a copy of any such notices or information
at the same time that it provides such notices or information to an
Insurer. The Insured shall deemed to have comply with this provision
once the claim is reported to the Third Party Administrator.

In addition, the Insured shall notify the Company in writing as soon as
practicable of any claim for reimbursement of any amounts within the
deductible provision by the Insurer under a Covered Policy. The notice
shall include: (1) the name of the Insurer, (2) the amount(s) sought by
the Insurer, (3) the amount(s) paid or reserved by the Insurer for such
claim, suit or proceeding, including indemnities, medical expenses or
benefits, and allocated loss adjustment expense, (4) the amount of the
deductible, if any, applicable to such claim, suit or proceeding, (5)
the Insurer's claim number, (6) the claimant's name and address, (7) the
date of accident or occurrence that is the basis for such claim, suit or
proceeding and (8) any other relevant information requested by the
Company. The Insured shall cooperate with the Company in the
investigation and settlement of any claim under this Policy.

B. SUNSET

The Company shall have no obligation to pay Deductible Amounts on behalf
of the Insured unless a claim has been submitted by the Insured to the
Company in accordance with V. A above, within seven (7) years from the
last day of the Policy Period.

<PAGE>

C. COMMUTATION

The Insured upon 30 days prior written notice to the Company, may elect
at any time to assume all the Company's liabilities arising from
accidents or occurrences up to the first $250,000. in consideration of a
payment as mutually agreed between the Company and Insured (the
"Commutation"). On the effective date of the Commutation, the Company
shall pay Insured 100% of the total amount of the Deductible Loss Fund
established under this contract, less the total of all amounts paid by
the Company as the Ultimate Net Loss under the contract up to $250,000.
each accident or occurrence and contemporaneously with any such payment,
the Insured shall deliver to the Company a release, in form and
substance acceptable to the Company in their sole discretion, duly
authorized and executed, releasing the Company from any further or
continuing liability under this Policy for losses not exceeding
$250,000. for each accident or occurrence.

D. FALSE OF FRAUDULENT CLAIMS

E. SUBROGATION

The Company shall be subrogated to the rights of the insured to recover
from any third party including any Deductible Amounts paid on behalf of
the Insured to such third party liable for such Deductible Amounts. The
Insured hereby assigns its rights to participate in any recoveries by an
Insurer. The Insured shall cooperate fully with the Company to recover
such Deductible Amounts.

F. OTHER INSURANCE

G. BANKRUPTCY OR INSOLVENCY OF INSURED

Bankruptcy or insolvency of the Insured shall not relieve the Company of
any of its obligations hereunder.

H. ACTION AGAINST THE COMPANY

<PAGE>

obligation to pay Deductible Amounts under the Covered Policies listed
in Item 8 of the Declarations shall have been determined finally and
payment made by an Insurer under a Covered Policy.

I. PREMIUM AND PAYMENT TERMS:

BASIS FOR PREMIUM: [*] *for policy year 12/31/97-98.
TBD for policy year 12/31/98-99.
TBD for policy year 12/31/99-2000.

* THIS PREMIUM WILL BE COLLECTED FOR ALL THE POLICIES SHOWN ON ENDORSEMENT
#2.

POLICY PERIOD: THREE YEARS.

ADJUSTABLE FACTORS: [*]% OF THE AVERAGE BOOK RATE FOR
THE POLICY YEAR
12/31/97 TO 12/31/98 PLUS $300,000.

[*]% OF THE AVERAGE BOOK RATE FOR
THE POLICY YEAR
12/31/98 TO 12/31/99 PLUS $300,000.

[*]% OF THE AVERAGE BOOK RATE FOR
THE POLICY YEAR
12/31/99 TO 12/31/2000 PLUS $300,000.

PRESENT AVERAGE BOOK RATE: $[*] FOR VINCAM OTHER THAN SAI & [*]
- - ------------------------- FOR VINCAM/STAFF ADM.

RATES ARE GUARANTEED FOR THREE YEARS EXCEPT FOR CHANGES IN TAXES AND
ASSESSMENTS AND FOR NON-PAYMENT OF PREMIUM. EXCEPT FOR NON-PAYMENT OF PREMIUM,
THIS PROGRAM IS NON-CANCELABLE BY THE INSURER.

DEPOSIT PREMIUM:

DEPOSIT PREMIUM SHALL BE $11,827,957. FOR 12131/97-98 UNDER THIS POLICY
NUMBER. DEPOSIT PREMIUM FOR 12/31/98-99 AND 12/31/99-2000 SHALL BE
DETERMINED BY THE COMPANY.

- - -------------------

* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.

6
<PAGE>

J. AUDIT

The Company may examine and audit the Insured's books and records at any
time during the Policy Period or within five years after the last day of
the Policy Period or until all timely and properly reported claims are
paid under this Policy, whichever is alter, on any matter relating to
the insurance provided under the Policy. The Insured shall cooperate
fully with the Company during any audit, and shall provide the Company
with any information or documents requested by the Company that relates
to the rights and obligations of the Insured and the Company under this
Policy.

K. CANCELLATION

This Policy may be canceled by the Company by mailing to the Insured
written notice of cancellation. The notice of cancellation must be
mailed to the Insured not less than ten (10) days before the effective
date of cancellation; but only for the failure of the Insured to pay the
premium when due. In the event this policy is canceled for non-payment
of premium, all the Covered Policies will be canceled simultaneously.

If the Policy is canceled earned premium shall be computed on a short
rate basis. Adjustment of the premium may be made at the time this
Policy is canceled or as soon thereafter as practicable.

If this Policy is canceled, the liability of the Company to pay
Deductible Amounts on behalf of the Insured shall be cut-off as of the
effective date of such cancellation. In such event, the Company shall
have no obligation to pay Deductible Amounts on behalf of the Insured
for any claims that were not timely, properly and fully reported to the
Company before the effective date of cancellation. In addition, the
Company shall be liable only for those Deductible Amounts relating to
losses or expenses actually paid by the Company under Covered Policies
before the effective date of cancellation of this Policy. Contingent or
pending losses or expenses paid by the Company before the effective date
of cancellation of this Policy contingent or pending losses or expenses
under a Covered Policies shall not be covered and the Company shall have
no liability for any Deductible Amounts payable on behalf of the Insured
to the Insurer for such losses or expenses.

L. RENEWAL OF POLICY

The Company may renew this Policy by an endorsement issued to form a
part hereof.

M. NAMED INSURED

The Insured named in the Declarations is the only Insured under this
Policy. No other person or entity shall have any rights as an Insured
under this Policy.

N. ASSIGNMENT

7
<PAGE>

This Policy shall be void if assigned or transferred without the prior
written consent of the Company.

O. CHANGES

This Policy may not be changed, amended or otherwise modified except
through a validly issued written endorsement executed by the Company.
Information provided to an agent of the Company shall not result in a
change, amendment or other modification to any part of this Policy or
stop the company from asserting any right under the policy or relieve
the Insured of any duty under this Policy.

P. ARBITRATION

If any dispute arises between the Insured and the Company either before
or after termination of this Policy with reference to the interpretation
of this Policy or the rights of either party under this Policy, the
dispute shall be referred to arbitration. The arbitration will involve
three arbitrators, one to be selected by each party and the third by the
two parties selected. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of written notice
from the other party requesting it to do so, the requesting party may
nominate two arbitrators who shall select the third arbitrator. In the
event the two arbitrators do not agree on the selection of the third
arbitrator shall be selected pursuant to the commercial arbitration
rules of the American Arbitration Association. The arbitrators shall be
officials or former officials of other insurance of reinsurance
companies. The arbitration shall take place in the State of New York and
the arbitration proceedings shall be governed by the rules of the
American Arbitration Association and the New York Arbitration Law. The
arbitrators shall consider this Policy honorable engagement rather than
merely a legal obligation, they are relieved of all judicial formalities
and may abstain from following the strict rules of the law, provided,
however, that the arbitrators may not render any award of punitive or
exemplary damages. The decision of a majority of the arbitrators shall
be final and binding on both the Insured and the Company and judgment
upon the award rendered by the arbitrators may be entered into any court
having jurisdiction thereof. The expense of the arbitrators and of the
arbitration shall be equally divided between the Insured and the
Company. Arbitration is the sole remedy for disputes arising under this
Policy. The arbitrators are relieved of any judicial formalities or
rules of law and shall be bound to the standards and practices of the
insurance business and the intent of this Policy.

Q. GUARANTEED COST ADDITIONAL PROGRAM TERMS

Vincam has agreed that by 2/l/98, all Vincam/Staff Administrators
clients that are problematic loss or class wise will be canceled. Vincam
will provide a list of these clients to Reliance no later than 1/5/98.
Any client not canceled by 2/11/98 due to special circumstances, will be
canceled by 3/l/98.

<PAGE>

New Acquisitions will be priced for the first year of the acquisition
based on an appropriate discounted fully developed loss rate plus
Reliance fixed costs. If the acquisition mirrors the overall exposures
of Vincam, we will use the current discount factor.

Third Party Administrators fees will be paid by Reliance National.

Municipalities, as previously agreed, are subject to individual
underwriting by Reliance.

Hazard Group IV accounts can not be written unless specifically approved
by Reliance.

Commutation, both on the prospective program and on the loss portfolio
transfer policies will be based on the loss experience during the term
of the program, including the 1996-97 policy year. The loss fund for
purposes of commutation for the 1996-97 policy year shall be $4,200,000
and for the 1997-98 policy year shall be $11,000,000. The amount of the
loss fund for the 1998-99 and 1999-2000 policy years is to be
determined.

Important Note: When specified by State regulators, Guaranteed Cost,
Minimum Premium policies will be issued to Vincam clients on an "if any
basis" as needed.

Carriers:

RELIANCE INSURANCE COMPANY
RELIANCE NATIONAL INDEMNITY COMPANY
RELIANCE INSURANCE COMPANY OF ILLINOIS
RELIANCE NATIONAL INSURANCE COMPANY
RELIANCE INSURANCE COMPANY OF NEW YORK

R. CHOICE OF LAW AND FORUM SELECTION

This Policy shall be interpreted according to the laws of the State of
New York. Any claim, suit or proceeding commenced by the Insured against
the Company shall be brought in a state or federal court of competent
jurisdiction in the State of New York.

Executed this 20th day of May, 1998.

By: /s/ SIGNATURE ILLEGIBLE
----------------------------------
Authorized Company Representative

Title: FIRST VICE PRESIDENT

9
<PAGE>

(The Attaching Clause need be completed only when this endorsement is issued
subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT
#1 REVISED

This endorsement, effective on 12/31/97 at 12:01 A.M. standard time, forms
a part of

Policy No. NBG0133600-01 of the Reliance Insurance Company
of Illinois

Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
--------------------------------
Authorized Representative

It is agreed that Item #3, Insured, is extended to include the following:

The Vincam Group, Inc.
Vincam Human Resources, Inc.
Vincam Human Resources, Inc. I
Vincam Human Resources, Inc. II
Vincam Human Resources, Inc. III
Vincam Human Resources, Inc. IV
Vincam Human Resources, Inc. V
Vincam Human Resources, Inc. VI
Vincam Human Resources, Inc. VII
Vincam Human Resources, Inc. of Michigan
Psych/Care, Inc.
Vincam Occupational Health Systems, Inc.
American Pediatrics Systems, Inc.
Vincam Practice Management, Inc.
CP Investments, Inc.
Vincam/Staff Administrators, Inc. of Colorado (DAB: Vincam Human
Resources, Inc.)
Vincam/Staff Administrators, Inc. of California (DAB: Vincam Human
Resources, Inc.)
Vincam/Staff Administrators, Inc. of Western Colorado
(Vincam Human Resources)
American Staffing, Inc.
Vincam/Amstaff, Inc.
R.D.M., Inc.
American Staffing, Inc.
Mastiff PEO, Inc.
Mastiff H.R.M., Inc.
Mastiff Management Services, Inc.
Mastiff Professional Services, Inc.
Mastiff Employer Resources, Inc.
Mastiff P.C.S., Inc.
A.E. Services Group, Inc.
Staff Resources Services, Inc.
Staffing Group Enterprises, Inc.
AM Risk Management Company
Addison, Inc.
ATCO PEO, Inc.
Vincam/Staffing Network, Inc. (DAB: Staffing Network, Inc.
a Vincam Group Company)
Corporate Staff Services, Inc.

<PAGE>

(The Attaching Clause need be completed only when this endorsement is issued
subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT #2

This endorsement, effective on 12/31/97 at 12:01 A.M. standard time, forms
a part of

Policy No. NGB33600-01 of the Reliance Insurance Company
of Illinois

Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
-----------------------------------
Authorized Representative

It is agreed that Item 6 Covered Policies numbers are as follows:

Policy Series:

NWA2114201 through NWA2114300
NWA1012701 through NWA1012800
NWA1012500 through NWA1012700
NWA2114301 through NWA2114450

Master Policy #NWA0133600-01
#NWA2114248-01
#NWA2114255-01

Schedule of Policies may vary according to state regulations and are maintained
in the Company's files.

<PAGE>

(The Attaching Clause need be completed only when this endorsement is issued
subsequent to preparation of the policy.) GU 207
(6-78)

ENDORSEMENT #3

This endorsement, effective on 12/31/97 at 12:01 A.M. standard time, forms
a part of

Policy No. NGB0133600-01 of the Reliance Insurance Company
of Illinois

Issued to The Vincam Group, Inc. Et al

/s/ SIGNATURE ILLEGIBLE
-------------------------------
Authorized Representative

It is agreed that Item IV Conditions are amended by the deletion of B. Sunset
clause.

All other terms and conditions remain the same.

EXHIBIT 11

STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

THE VINCAM GROUP, INC.
CALCULATION OF BASIC AND DILUTED NET INCOME
PER COMMON SHARE

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>

Net income $ 2,491,099 $ 1,028,233 $ 6,650,554 $ 2,144,549
============ ============ ============ ============
Weighted average number of common shares
outstanding used in basic net income per
share calculation 15,682,656 15,309,704 15,625,365 15,164,651
============ ============ ============ ============

Basic net income per common share $ 0.16 $ 0.07 $ 0.43 $ 0.14
============ ============ ============ ============

Weighted average number of common shares
outstanding used in basic net income per
share calculation 15,682,656 15,309,704 15,625,365 15,164,651

Assumed exercise of stock options, net of
treasury shares acquired 374,824 653,083 467,371 799,729
------------ ------------ ------------ ------------
Weighted average number of shares used in
earnings per share calculation 16,057,480 15,962,787 16,092,736 15,964,380
============ ============ ============ ============
Net income per common and common
equivalent share $ 0.16 $ 0.06 $ 0.41 $ 0.14
============ ============ ============ ============

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE VINCAM GROUP, INC. FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1998 INCLUDED IN THIS FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 9,129,004
<SECURITIES> 0
<RECEIVABLES> 59,718,401
<ALLOWANCES> 2,376,080
<INVENTORY> 0
<CURRENT-ASSETS> 84,620,088
<PP&E> 8,445,414
<DEPRECIATION> 0
<TOTAL-ASSETS> 102,240,147
<CURRENT-LIABILITIES> 62,007,611
<BONDS> 0
0
0
<COMMON> 15,695
<OTHER-SE> 39,325,293
<TOTAL-LIABILITY-AND-EQUITY> 102,240,147
<SALES> 910,630,869
<TOTAL-REVENUES> 910,630,869
<CGS> 0
<TOTAL-COSTS> 861,824,440
<OTHER-EXPENSES> 38,023,276
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98,599
<INCOME-PRETAX> 10,684,554
<INCOME-TAX> 4,034,000
<INCOME-CONTINUING> 6,650,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,650,554
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.41

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF THE VINCAM GROUP, INC. FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1997 INCLUDED IN THIS FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 9,644,278
<SECURITIES> 564,853
<RECEIVABLES> 41,511,247
<ALLOWANCES> 995,734
<INVENTORY> 0
<CURRENT-ASSETS> 61,014,528
<PP&E> 7,137,643
<DEPRECIATION> 0
<TOTAL-ASSETS> 81,100,330
<CURRENT-LIABILITIES> 43,560,197
<BONDS> 0
0
0
<COMMON> 13,540
<OTHER-SE> 32,877,775
<TOTAL-LIABILITY-AND-EQUITY> 81,100,330
<SALES> 699,820,528
<TOTAL-REVENUES> 699,820,528
<CGS> 0
<TOTAL-COSTS> 658,375,464
<OTHER-EXPENSES> 37,916,285
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,797,656
<INCOME-TAX> 1,653,107
<INCOME-CONTINUING> 2,144,549
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,144,549
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14

</TABLE>