VINCAM GROUP INC, 10-K405, 1998-03-31

VINCAM GROUP INC
10-K405, 1998-03-31
HELP SUPPLY SERVICES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

|_| 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)

2850 DOUGLAS ROAD
CORAL GABLES, FLORIDA 33134 (305) 460-2350
(Address of principal executive offices) (Registrant's telephone number,
including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK,
$.001 PAR VALUE

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

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

The aggregate market value of voting stock held by non-affiliates of
the registrant as of March 20, 1998 was approximately $282.8 million based on
the $28.00 closing sale price for the Common Stock on the Nasdaq National Market
System on such date and determined by subtracting from the number of shares
outstanding on that date the number of shares held by affiliates of the
registrant.

As of March 20, 1998, The Vincam Group, Inc. had 15,573,632 shares of Common
Stock, $.001 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

PART III -- PORTIONS OF REGISTRANT'S PROXY STATEMENT RELATING TO THE 1998 ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 1998.

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<PAGE>

THE VINCAM GROUP, INC.

FORM 10-K

TABLE OF CONTENTS

PART I

Item 1. Business..........................................................................................1
Item 2. Properties.......................................................................................19
Item 3. Legal Proceedings................................................................................19
Item 4. Submission of Matters to a Vote of Security Holders..............................................21

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters............................22
Item 6. Selected Financial Data..........................................................................23
Item 7. Management's Discussion and Analysis of Financial Condition and Results of

Operations.......................................................................................24
Item 7a. Quantitative and Qualitative Disclosures About Market Risk.......................................34
Item 8. Financial Statements and Supplementary Data......................................................35
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.......................................................................................66

PART III

Item 10. Directors and Executive Officers of the Registrant ..............................................66
Item 11. Executive Compensation...........................................................................66
Item 12. Security Ownership of Certain Beneficial Owners and Management...................................66
Item 13. Certain Relationships and Related Transactions...................................................66

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..................................67

SIGNATURES.......................................................................................................72
</TABLE>

<PAGE>

PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"), The Vincam Group,
Inc. ("Vincam" or 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," "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; and (x) other factors which
are described in further detail in the Company's filings with the Securities and
Exchange Commission including this Form 10-K.

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.

ITEM 1. BUSINESS

GENERAL

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

<PAGE>

Vincam, one of the ten largest professional employer organizations
("PEO") 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. PEOs provide human resource services, such as payment of wages,
employee benefits and regulatory compliance, through the creation of a
co-employment agreement. The Company's continuum of integrated
employment-related services consists of human resource administration,
employment regulatory compliance management, workers' compensation coverage,
health care and other employee benefits. The Company establishes a co-employer
relationship with its clients and contractually assumes substantial employer
responsibilities with respect to worksite employees. The Company believes its
services assist business owners in: (i) managing costs associated with workers'
compensation, health insurance coverage, workplace safety programs and certain
employment-related litigation, (ii) providing employees with competitive health
care and related benefits that are more characteristic of large employers and
(iii) reducing the time and effort required by business owners and executives to
deal with the increasingly complex legal and regulatory environment affecting
employment. As of December 31, 1997, the Company provided professional employer
services to approximately 1,900 client organizations with approximately 40,600
employees, primarily in Florida, Michigan, Georgia, Colorado and the New England
area. The Company was among the first PEOs to be accredited by the Institute for
the Accreditation of Professional Employer Organizations. In addition, the
Company capitalizes on its managed care expertise by offering certain specialty
managed care services on a stand-alone basis to health and workers' compensation
insurance companies, health maintenance organizations ("HMOs") and large
employers.

According to the U.S. Small Business Administration, in 1995 (the
last year for which statistics are available) there were approximately 5.4
million businesses in the United States with fewer than 500 employees.
Collectively, these businesses employed an estimated 52.7 million employees and
represented approximately $1.25 trillion in aggregate annual payroll, implying a
potential market size for PEO services of $1.5 trillion (assuming an average
mark-up of approximately 20%). The PEO industry began to evolve in the early
1980s largely in response to the burdens placed on small to medium-sized
employers by increasing employment costs, an increasingly complex legal and
regulatory environment and high benefit and workers' compensation costs. While
various service providers, such as payroll processing firms, benefits and safety
consultants and temporary services firms, are available to assist these
businesses with specific tasks, these organizations do not typically provide a
comprehensive range of employment-related services. PEOs address this market
void. PEOs enter into agreements with numerous small to medium-sized employers,
achieving economies of scale as professional employers and performing
employment-related functions at a level typically available only to large
corporations which have substantial resources to devote to human resources
management. The Company considers medium-sized businesses to be those with 20 to
500 employees.

The PEO industry has experienced significant growth in recent years.
Staffing Industry Analysts, Inc. estimates that gross revenues in the PEO
industry grew from $5.0 billion in 1991 to $17.3 billion in 1996, representing a
compounded annual growth rate of approximately 28%. The Company believes that
the growth in the number of small businesses in the United States, the low
market penetration of the PEO industry and the increasing willingness of
businesses to outsource non-core activities and functions has contributed to the
growing demand for PEO services. The PEO industry is highly fragmented, with
approximately 2,000 PEOs in operation, according to the National Association of
Professional Employer Organizations. The Company believes that increasing
industry and regulatory complexity, the increasing capital requirements
associated with developing larger service delivery infrastructures and
management

<PAGE>

information systems and the significant economies of scale available to the PEOs
with a regional concentration of clients should lead to significant
consolidation opportunities in the PEO industry.

The Company intends to expand in current markets and to enter
selected new markets by acquiring established, quality PEOs to provide a
platform for future regional consolidation. The Company has identified certain
fundamental attributes which characterize attractive potential new markets such
as (i) proximity to a major metropolitan area, (ii) regulatory receptivity to
PEOs, (iii) prior successful introduction of the PEO concept, (iv) favorable
economic conditions and (v) a high concentration of small to medium-sized
businesses.

As part of its acquisition strategy, the Company has established a
presence in the Denver, Colorado PEO market through the Company's January 1997
acquisition of Staff Administrators, Inc. ("SAI"), a privately held PEO
headquartered in Denver, Colorado (the "SAI Acquisition"). On June 30, 1997, the
Company acquired Amstaff, Inc. ("AMI"), a privately held PEO headquartered in
Novi, Michigan (the "AMI Acquisition"). On December 1, 1997, the Company
established a presence in the New England PEO market through its acquisition of
Staffing Network, Inc., a privately held PEO headquartered in Manchester, New
Hampshire (the "SNI Acquisition"). The Company further increased its presence in
New England through its acquisition of Corporate Staff Services, Inc. ("CSS"), a
privately held PEO headquartered in Orange, Connecticut on January 30, 1998 (the
"CSS Acquisition"). Unless otherwise noted herein, data with respect to the
Company do not reflect the effects of the CSS Acquisition. These acquisitions
added approximately 1,060 new clients and approximately 12,049 worksite
employees to the Company's ranks. See "Business--Recent Acquisitions" below.
Although the Company has acquired five PEOs since its initial public offering in
May 1996, there can be no assurance that other suitable acquisition candidates
will be found in the future, that the Company will have or be able to obtain the
necessary financing to consummate acquisitions, that acquisitions can be
consummated on favorable terms or that any acquired companies, and/or their
diverse service models, can be successfully integrated into the Company's
operations. There can be no assurance that management skills, systems and
resources currently in place will be adequate to implement the Company's
strategy. The failure to manage growth effectively or to implement its strategy
could have a material adverse effect on the Company's results of operations,
financial condition and liquidity.

SERVICES

Vincam provides professional employer services through four core
activities: (i) human resource administration, (ii) employer regulatory
compliance management, (iii) workers' compensation cost containment and (iv)
employee benefits and related administration. Vincam's services allow clients to
concentrate their resources on their core businesses. In addition, the Company
leverages its managed care expertise by offering certain specialty managed care
services on a stand-alone basis to health and workers' compensation insurance
companies, HMOs and large employers.

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

<PAGE>

recruiting, orientation, training, counseling, substance abuse awareness and
outplacement services for worksite employees.

EMPLOYER REGULATORY COMPLIANCE MANAGEMENT. Under its standard
contract, the Company assumes responsibility for complying with many
employment-related regulatory requirements. In addition, Vincam assists its
clients in understanding and complying with other employment-related
requirements for which the Company does not assume responsibility. Laws and
regulations applicable to employers include state and federal tax laws, state
workers' compensation laws, state unemployment laws, occupational safety and
health laws, immigration laws and federal, state and local discrimination and
other civil rights laws. When a claim arises, the Company provides assistance
through either its in-house legal department or outside counsel. In order to
respond to such claims in a cost-effective manner, the Company has entered into
a partially capitated fee arrangement with Jackson, Lewis, Schnitzler & Krupman
("Jackson, Lewis"), a national law firm specializing in employment and labor
issues, which provides legal representation to the Company's clients. The
Company's arrangement with Jackson, Lewis requires Vincam to pay a fixed amount
based on a percentage of payroll (the "Capitated Payment") regardless of the
amount of services rendered by Jackson, Lewis to Vincam and its clients.
Jackson, Lewis is obligated to provide services to Vincam and its clients in
excess of the Capitated Payment, but only up to a certain level (the "Fee Cap").
Jackson, Lewis charges Vincam a reduced hourly rate for services rendered to
Vincam and its clients in excess of the Fee Cap.

WORKERS' COMPENSATION COST CONTAINMENT. Workers' compensation is a
state-mandated, comprehensive insurance program that requires employers to fund
medical expenses, lost wages and other costs that result from work-related
injuries and illnesses, regardless of fault and without any co-payment by the
employee. See "Industry Regulation." Prior to 1997, the Company maintained a
large deductible workers' compensation insurance policy and developed various
systems and policies designed to control its workers' compensation costs. These
systems and policies include comprehensive risk evaluation of prospective
clients, the prevention of workplace injuries, early intervention in employee
injury, intensive management of the medical costs related to such injuries and
the prompt return of employees to work. The Company seeks to prevent workplace
injuries by implementing a wide variety of training, safety and mandatory
drug-free workplace programs. Specific components of the Company's proprietary
managed care system include the prompt identification and reporting of injuries,
the use of Company-designated health care providers, utilization and fee review,
telephonic claims and case management, auditing of bills and other techniques
designed to reduce medical costs. The Company's efforts to return employees to
work quickly involve both rehabilitation services and the placement of employees
in transitional, modified-duty positions until they are able to resume their
former positions. In 1997, the Company entered into an arrangement with Reliance
National Insurance Company ("Reliance National") to provide workers'
compensation insurance coverage at a cost which is equal to a fixed percentage
of the average standard premium, subject to a deductible of only $2,000 per
medical claim. In January 1998, the Company modified its arrangement with
Reliance National. The arrangement, originally covering the years 1997 through
1999, now includes the year 2000 under certain revised terms and conditions. The
arrangement remains a guaranteed cost program. The Company intends, however, to
continue to manage its workers' compensation costs. See Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

EMPLOYEE BENEFITS AND RELATED ADMINISTRATION. Vincam currently offers
to worksite employees an employee benefits package which includes several health
care options, such as preferred provider organizations ("PPOs"), HMOs, and
exclusive provider organizations ("EPOs"). Supplemental benefit programs offer
dental care, vision care, prescription drugs, an employee assistance plan,
mental health

<PAGE>

benefits and several life and disability insurance options. Vincam also offers
401(k) retirement savings and cafeteria plans to its eligible employees. The
Company delivers participant benefits to worksite employees and monitors and
reviews claims for loss control purposes. The Company believes that its ability
to provide and administer a wide variety of employee benefits on behalf of its
clients tends to mitigate the competitive disadvantage small and medium-sized
businesses normally face in the areas of employee benefit cost control and
employee recruiting and retention. Certain regulatory issues, however, may
affect the ability of PEOs to offer certain benefit plans and/or the manner in
which such plans are offered and administered. See "Industry Regulation."

SPECIALTY MANAGED CARE SERVICES. The growth in the Company's core PEO
business provided Vincam with significant expertise and experience in managing a
wide range of employee health care and disability costs. In order to further
capitalize on that expertise, the Company offers a variety of specialty managed
care services (such as employee assistance programs, behavioral health managed
care, comprehensive workers' compensation managed care services, risk management
and loss containment services) on a stand-alone basis to health and workers'
compensation insurance companies, HMOs and large employers. The Company's
employee assistance program and behavioral health managed care services provide
a client company's employees (which may or may not be worksite employees
provided by the Company) with access to a network of professionals, established
and monitored by the Company, who can address behavioral health issues and
assist employees with personal problems such as alcohol or drug abuse, financial
or legal concerns and marriage or family problems. The Company's workers'
compensation managed care services, risk management services and loss
containment services include (i) claim management, reporting and processing,
(ii) coordination of all procedures for handling injuries, (iii) development of
safety programs and supervisory training in safety techniques and
self-inspection, (iv) implementation of medical provider networks, (v)
investigation of fraudulent claims and (vi) monitoring of all continuing claims
and return-to-work programs.

The Company believes that expansion of its specialty managed care
services will (i) enhance its leverage in negotiating provider arrangements and
create greater economies of scale, (ii) increase profit margins by using
existing service delivery infrastructures to generate additional revenue and
(iii) benefit the Company's PEO operations by making the Company's specialty
managed care services more cost-effective, innovative and competitive. The
Company believes that the continued evolution of Vincam's specialty managed care
services could require structural and organizational modifications to the
Company's traditional relationships with other participants in the health care
industry. For example, in 1997, the Company purchased a managed care provider
network in Florida from the HMO with which it previously had a strategic
alliance to provide workers' compensation managed care services. The Company
expects that any expansion of its specialty managed care services outside of
Florida will also require licensure. See "Industry Regulation."

<PAGE>

CLIENT RELATIONSHIPS

The Company and its clients are often referred to as co-employers
because each is responsible for certain specified employer-related obligations.
The division of responsibilities below is not exhaustive, but serves as an
illustration.

VINCAM CLIENT JOINT
- ------------------------------- ------------------------------------- ----------------------------------------
<S> <C> <C>
/bullet/ Payment of payroll, /bullet/ Supervision and training of /bullet/ Implementation of policies
tax reporting and payment job-specific activities of worksite and practices relating to the
(state and federal employees employer/employee relationship
withholding, Federal
Insurance Contributions Act /bullet/ Assignment to, and /bullet/ Selection of fringe benefits,
("FICA"), Federal ownership of, all intellectual including employee leave policies
Unemployment Tax Act property rights (other than as controlled by the
("FUTA"), and state Family and Medical Leave Act or
unemployment) /bullet/ Product liability state law)

/bullet/ Workers' /bullet/ Professional liability or /bullet/ Employer liability under
compensation compliance, malpractice workers' compensation laws
procurement, management
and reporting /bullet/ Compliance with state and /bullet/ Compliance with Title VII of
local government contracting the Civil Rights Act of 1964, the
/bullet/ Employee benefit provisions, professional licensing Age Discrimination in Employment
procurement, administration and fidelity requirements and Act, the Federal Drug Free
and payment Title III of the Americans with Workplace Act (and any state or
Disabilities Act ("ADA") (i.e., local equivalent) if applicable, the
public access to facilities) Fair Labor Standards Act and
similar state legislation, ADA and
/bullet/ Negligent or tortious any other applicable employment-
conduct of worksite employees related law
acting under the direction and
control of the client /bullet/ Compliance with Internal
Revenue Code provisions regarding
/bullet/ Determination of salaries benefits discrimination
and wages of worksite employees
</TABLE>

<PAGE>

wages, related employment taxes and health care and workers' compensation
coverage. The specific mark-up varies by client based on the workers'
compensation classification of the worksite employees, their eligibility for
health care benefits and the complexity of administering the client service
agreement. Accordingly, the Company's average mark-up percentage will fluctuate
based on client mix, which cannot be predicted with any degree of certainty.

At December 31, 1997, Vincam served approximately 1,900 PEO client
companies and had approximately 40,600 active worksite employees resulting in an
average of 21 employees per PEO client. In addition, the acquisition of CSS in
January 1998 added approximately 113 clients and 1,150 active worksite
employees. No single client accounted for more than 4% of Vincam's revenues for
1997. Approximately, 47%, 21%, 12%, 9%, and 9% of the total revenues of the
Company were derived from the Company's operations in Florida, Michigan, New
England, Colorado and Georgia, respectively. The Company's PEO client base is
broadly distributed throughout a wide variety of industries. As of December 31,
1997, Vincam's approximate worksite employee and PEO client company distribution
by major Standard Industrial Classification code as a percentage of the total is
set forth below:

WORKSITE
INDUSTRY GROUP EMPLOYEES PEO CLIENTS
--------- -----------
<S> <C> <C>

Services............................................................ 35% 47%
Manufacturing....................................................... 21% 14%
Transportation, Communication & Utility............................. 12% 8%
Retail Trade........................................................ 18% 13%
Wholesale Trade..................................................... 1% 1%
Agriculture (Landscaping)........................................... 3% 2%
Finance, Insurance & Real Estate.................................... 3% 5%
Construction........................................................ 7% 10%
</TABLE>

The number of worksite employees employed by the Company at the end of
each of 1993 (without giving effect to the Company's acquisitions because data
for 1993 for the acquired companies is not available), 1994, 1995, 1996 and 1997
was 6,587, 14,871, 19,876, 32,757 and 40,615, respectively. There can be no
assurance that the number of worksite employees employed by the Company will
continue to grow at the same rate or that such number will not decrease.

The Company has benefited from a high level of client retention,
resulting in a significant recurring revenue stream. A PEO's client retention
rate for a particular year may be calculated (according to the National
Association of Professional Employer Organizations) by dividing: (i) the number
of clients of the PEO at year end by (ii) the sum of clients at the beginning of
the year and clients added during the year. Using this method, Vincam had client
retention rates of 87%, 89% and 85% for 1995, 1996 and 1997, respectively.
Client attrition experienced by Vincam is based on a variety of factors,
including (i) client nonrenewal due to price or service dissatisfaction, (ii)
client business failure or downsizing, (iii) termination by Vincam resulting
from the client's inability to make timely payments or the client's breach of
the PEO services agreement and (iv) sale or acquisition of the client.

<PAGE>

RECENT ACQUISITIONS

On December 1, 1997, the Company acquired SNI, a privately held PEO
headquartered in Manchester, New Hampshire with approximately 525 clients and
more than 5,000 worksite employees. The Company issued 1,800,000 shares of its
common stock in exchange for all of the equity of SNI. The SNI Acquisition has
been accounted for as a pooling of interests. On January 30, 1998, the Company
further increased its presence in New England through its acquisition of CSS, a
privately held PEO headquartered in Orange, Connecticut with approximately 113
clients and 1,150 worksite employees. The Company issued 150,000 shares of its
common stock in exchange for all of the outstanding shares of common stock of
CSS. The transaction was not material to the Company's financial condition and
results of operations and will be accounted for in future periods as a pooling
of interests. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 2 of the Notes to Consolidated
Financial Statements.

On June 30, 1997, the Company acquired AMI, a privately held PEO
headquartered in Novi, Michigan with approximately 220 clients and 4,000
worksite employees. The Company issued 547,743 shares of its common stock in
exchange for all of the outstanding shares of common stock of AMI and its
subsidiaries. The transaction has been accounted for as a pooling of interests.
See Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 2 of the Notes to Consolidated Financial
Statements.

On January 7, 1997, the Company acquired SAI, a privately held PEO
headquartered in Denver, Colorado with approximately 230 clients and 3,500
worksite employees. The Company issued 780,000 shares of its common stock in a
merger transaction in exchange for all of the equity in SAI and its
subsidiaries. The SAI Acquisition has been accounted for as a pooling of
interests. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 2 of the Notes to Consolidated
Financial Statements.

SALES AND MARKETING

The Company markets its services through a direct sales force of 62
sales representatives, each of whom reports to either an area president or a
sales manager. The Company attributes the high productivity of its sales
representatives to their prior years of experience in fields related to one or
more of the Company's core services. The backgrounds of the Company's sales
representatives include experience in industries such as payroll services,
health insurance, temporary services and workers' compensation insurance. The
Company's sales materials emphasize its broad range of high quality services and
the resulting benefits to clients and worksite employees. The Company's sales
and marketing strategy is to hire additional sales representatives in its
existing markets and to increase sales productivity.

Vincam generates sales leads from several sources. These sources
include direct sales efforts, telemarketing and referrals. These leads result in
initial presentations to prospective clients. Vincam's sales representatives
then gather relevant information about the prospective client and its employees.
This information is reviewed in the context of Vincam's pricing model and client
selection guidelines. A client proposal is prepared for acceptable prospective
clients.

This prospective client screening process plays a vital role in
controlling the Company's costs and limiting exposure to liability. Once a
prospective client accepts Vincam's proposal, the new client is quickly

<PAGE>

incorporated into the Company's system. A Company human resources manager then
assumes responsibility for administering the client's personnel and benefits,
coordinating the Company's response to the client's needs for administrative
support and responding to any questions or problems encountered by the client.

INFORMATION TECHNOLOGY

The Company's information systems are designed to assist the Company in
managing costs and delivering comprehensive high quality services. The Company's
proprietary systems allow real time reporting of worksite accidents and
injuries, enabling Vincam to implement promptly its managed care techniques and
thereby better control workers' compensation and other health care costs.

Many existing computer programs use only two digits to identify a year
in the date field, which, if not corrected, will cause such computer
applications to fail or create erroneous results by, during or after the year
2000 (the "year 2000 issue"). The year 2000 issue may materially affect the
Company's services or competitive conditions. The year 2000 issue affects
computer systems that have time-sensitive programs (such as the Company's
payroll processing programs) that may not properly recognize the year 2000. This
could result in major system failures or miscalculations. The Company has begun
the process of identifying, evaluating and implementing changes to computer
programs necessary to address the year 2000 issue in order to provide
uninterrupted, normal operations of critical business systems before, during and
after the year 2000. If necessary modifications and conversions are not
completed in a timely manner, the year 2000 issue may have a material adverse
effect on the results of operations and financial condition of the Company. See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

COMPETITION

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

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

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

<PAGE>

EMPLOYEES

As of December 31, 1997, the Company had 559 corporate employees. For
information with respect to the Company's worksite employees, see
"Business--Client Relationships."

INDUSTRY REGULATION

OVERVIEW

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

Many of the federal and state laws and regulations relating to labor,
tax and employment matters applicable to employers were enacted prior to the
development of non-traditional employment relationships and, accordingly, do not
specifically address the obligations and responsibilities of PEOs. Moreover,
both the Company's PEO and specialty managed care services are regulated
primarily at the state level. Regulatory requirements regarding the Company's
business therefore vary from state to state, and as the Company enters new
states, it will be faced with new regulatory and licensing environments. There
can be no assurance that the Company will be able to satisfy the licensing
requirements or other applicable regulations of any particular state in which it
is not currently operating, that it will be able to provide the full range of
services currently offered in Florida or that it will be able to operate
profitably within the regulatory environment of any state in which it does
obtain regulatory approval. The absence of required licenses would require the
Company to restrict the services it offers. In addition, many states have not
yet promulgated definitive interpretations of existing statutes and regulations
or new statutes and regulations with respect to emerging specialty managed care
services such as those provided by the Company. As a result, as such
interpretations or new statutes and regulations emerge, the Company may be
required to obtain licenses with respect to its specialty managed care services
or alter the manner in which it currently markets and provides such services.
There can be no assurance that the Company will be able to satisfy any such
additional licensing requirements imposed upon its specialty managed care
services.

The application of many laws to the Company's PEO services will depend
on whether the Company is considered an employer under the relevant statutes and
regulations. For example, the common law test of the employment relationship is
generally used to determine employer status for benefit plan purposes under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the
Internal Revenue Code of 1986, as amended (the "Code"), the workers'
compensation laws of many states and various state unemployment laws. However,
management believes that such common law test, originally created to distinguish
an employee from an independent contractor, is not well suited to evaluating the
application of ERISA and the Code to co-employers in a PEO relationship. The
Internal Revenue Service (the "IRS") is examining this issue in connection with
a study of the PEO industry, focusing on selected PEOs (not including Vincam).
See "PEO Services--Employee Benefit Plans." In addition, from time to time there
have been proposals to enact a statutory definition of employer for certain
purposes of the Code.

Regulation in the health care and workers' compensation fields
continues to evolve. Sweeping reforms have been the subject of debate at both
the federal and state government levels. New legislation or

<PAGE>

interpretations of current licensing and regulatory requirements could impose
operating or licensing requirements on the Company which it may not be able to
satisfy or which could have a material adverse effect on the Company's financial
condition and results of operations. Healthcare reform and/or specific changes
in laws or regulations may impact demand for the Company's services, require the
Company to develop new or modified services to meet the demands of the
marketplace or modify the fees that the Company may charge for its services.
Additionally, interpretation of such legislation or regulation by regulatory
agencies with broad discretionary powers could require the Company to modify its
existing operations materially in order to comply with applicable regulations.
In addition, although health care reform at the state and federal level seeks
solutions to contain health care costs, there can be no assurance that such
proposals will be successful. The Company cannot predict the effect any such
proposed reform would have on its business. If new legislation results in
increased health care costs, which comprise a significant portion of the
Company's direct costs, and if the Company is not able to reflect promptly such
increased costs in its service fees, the legislation could have a material
adverse impact on the Company's future operations and liquidity.

While the Company cannot predict with certainty the development of
federal and state regulations, management will continue to pursue a proactive
strategy of educating administrative authorities as to the advantages of PEOs
and assisting in the development of regulation which appropriately accommodates
their legitimate business function. There can be no assurance, however, that
existing laws and regulations that are not currently applicable to the Company
will not be interpreted more broadly in the future so as to apply to the
Company's existing activities or that new laws and regulations will not be
enacted with respect to the Company's activities, either of which could have a
material adverse effect on the Company's business, financial condition, results
of operations and liquidity. For example, Colorado has enacted health care
insurance legislation which may reduce certain cost advantages that the Company
can offer to small business clients in that state. Similar legislation is being
considered in at least one other state. Although the Company is not in a
position to determine the full cost of compliance with Colorado's small business
health care legislation, the Company anticipates that such costs will be
significant and that such legislation may adversely affect the Company's ability
to attract and retain clients in Colorado. The Company is not, however,
currently in a position to make any further determination regarding, or to
quantify, the impact of such legislation or whether it will ultimately be
material to the Company's results of operations.

PEO SERVICES

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

While many states do not explicitly regulate PEOs, approximately
fifteen states, including Florida and New Hampshire where the Company conducts
business, have laws with licensing or registration requirements for PEOs.
Several additional states, including Georgia and Michigan where the Company

<PAGE>

conducts business, have considered such regulation. Such laws vary from state to
state but generally provide for monitoring the fiscal responsibility of PEOs.
State regulation assists in screening insufficiently capitalized PEO operations
and, in the Company's view, has the effect of legitimizing the PEO industry
generally by resolving interpretative issues concerning employee status for
specific purposes under applicable state law. Limited interpretative or
enforcement guidance is available for recently enacted PEO regulations. The
development of additional regulations and interpretation of existing regulations
can be expected to evolve over time. The Company actively supports such
regulatory efforts.

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

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

To date the IRS has relied extensively on the common law test of
employment in determining employer status and the resulting liability for
failure to withhold. However, the IRS has formed an Employee Leasing Market
Segment Group (the "Market Segment Group") for the stated purpose of examining
whether PEOs, such as the Company, are the employers of the worksite employees
under the Code provisions applicable to federal employment taxes and,
consequently, whether they are exclusively responsible for payment of employment
taxes on wages and salaries paid to such employees. Another stated purpose of
the Market Segment Group is to determine whether owners of client companies can
be employees of PEOs under the federal employment tax laws. See "PEO
Services--Employee Benefit Plans."

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

<PAGE>

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

The IRS has established the Market Segment Group for the purpose of
identifying specific compliance issues prevalent in certain segments of the PEO
industry. Approximately 70 PEOs, not including Vincam, have been randomly
selected by the IRS for audit pursuant to this program. One issue that has
arisen from these audits is whether PEOs, such as the Company, are the employers
of worksite employees under Code provisions applicable to employee benefit plans
and consequently able to offer to worksite employees benefit plans that qualify
for favorable tax treatment. The Market Segment Group is also examining whether
client company owners are employees of PEOs under Code provisions applicable to
employee benefit plans. The Company understands that these issues have been
referred to the IRS National Office. The Company is unable to predict the timing
or nature of the findings of the Market Segment Group or the ultimate outcome of
such findings.

If the IRS study were to conclude that a PEO is not an employer of its
worksite employees for plan purposes, worksite employees could not continue to
participate in the Company's 401(k) plan or cafeteria plan or continue to
participate in certain other employee benefit plans of the Company. If such
conclusion were applied retroactively in the case of the Company's 401(k) plan,
employees' vested account balances would become taxable immediately, the Company
would lose its tax deduction to the extent the contributions were not vested,
the plan trust would become a taxable trust and penalties and additional taxes
for prior periods could be assessed. In such a scenario, the Company would face
the risk of client dissatisfaction as well as potential litigation. A
retroactive application by the IRS of an adverse conclusion could have a
material adverse effect on the Company's financial position and results of
operations. While Vincam believes that a retroactive disqualification is
unlikely, there can be no assurance as to the ultimate resolution of these
issues. In addition, if the Company is required to report and pay employment
taxes for the separate accounts of its clients rather than for its own account
as a single employer, the Company would incur increased administrative burdens.

On August 12, 1996, the Company received a favorable determination
letter from the IRS regarding the qualified status of its 401(k) plan. In its
application to the IRS, the Company informed the IRS that the Company is
involved in the business of leasing employees to client companies and that the
401(k) plan covered worksite or leased employees who satisfied the plan's
eligibility requirements. The favorable determination does not necessarily
resolve the issue of employer status for 401(k) plan purposes, which may be
affected by the conclusions or findings of the Market Segment Group. As
discussed above, an adverse finding by the Market Segment Group could have a
material adverse effect on the Company's financial condition and results of
operations.

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

<PAGE>

Company applies the applicable nondiscrimination requirements of the Code at the
client company level to ensure that its 401(k) plan is in compliance with the
requirements of the Code.

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

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

The U.S. Department of Labor has issued a few advisory opinions to PEOs
advising such PEOs that their respective health plans, which covered worksite
employees, were multiple-employer plans, rather than a single employer plan. The
Company believes it is a co-employer of worksite employees, and as such the
Company views its group health plan, which also covers worksite employees, to be
a single employer plan. If these Department of Labor opinions were applied to
the Company's health plan, or to the Company's other employee benefit plans, the
Department of Labor could assess penalties against the Company for having
incorrectly filed annual reports treating such plan(s) as a single employer
plan. The Department of Labor could also assess penalties against the Company's
clients for failure to file annual reports. In such a scenario, the Company
would face the risk of client dissatisfaction as well as potential litigation,
and its financial condition, results of operations and liquidity could be
materially adversely affected.

WORKERS' COMPENSATION. Workers' compensation is a state mandated,
comprehensive insurance program that requires employers to fund medical
expenses, lost wages and other costs resulting from work-related injuries and
illnesses. In exchange for providing workers' compensation coverage for
employees, the liability of the employer under the workers' compensation statute
is exclusive. Workers' compensation benefits and arrangements vary on a
state-by-state basis and are often highly complex. These laws establish the
rights of workers to receive benefits and to appeal benefit denials. Workers'
compensation laws also regulate the methods and procedures which the Company may
employ in its workers' compensation managed care programs. For example, most
workers' compensation laws prohibit medical co-payment and deductible payment by
employees. In addition, certain states restrict employers' rights to select
health care providers and establish maximum fee levels for treatment of injured
workers.

In most states, workers' compensation benefits coverage (for both
medical costs and lost wages) is available through the purchase of commercial
insurance from private insurance companies, participation in state-run insurance
funds or employer self-insurance. Insurance carriers determine the employer's
premium through an evaluation of risk by industry type, factors specific to the
employer, and the employer's actual loss history. Typically, the insurance
market maintains loss data on an individual employer basis through the
experience rating system. Because PEOs aggregate many individual employer risks
under a single policy, and may fundamentally alter the loss experience of those
risks, PEO relationships have altered traditional methodologies for determining
premium and collecting and maintaining experience rating data. Some states are
evaluating the regulations applicable to the experience rating system to ensure
adequate data

<PAGE>

and premium collection within the PEO industry. Changes to existing experience
rating mechanisms, if adopted, could materially adversely affect the cost of
providing, and the market for, PEO services.

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

The Company's ability to use comprehensive workers' compensation
managed care techniques in its PEO operations depends in part on its ability to
contract with or create networks of health care providers. The Company requires
that injured workers use the Company's network of providers. Laws regulating the
operation of managed care provider networks have been adopted by a number of
states. These laws may apply to managed care provider networks having contracts
with the Company or to provider networks which the Company may organize. To the
extent the Company is governed by these regulations, it may be subject to
additional licensing requirements, financial oversight and procedural standards
for beneficiaries and providers. Such laws may limit the ability of the Company
to establish such networks in states that the Company enters through
acquisitions. As a result, the Company's ability to control workers'
compensation costs may be limited as compared to those areas in which networks
exist.

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

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

<PAGE>

indemnification, and the Company may therefore be ultimately responsible for
satisfying the liability in question.

SPECIALTY MANAGED CARE SERVICES

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

The Florida Department of Insurance (the "DOI") implemented rules
pursuant to a prepaid limited health services organization statute enacted in
1993. This statute provides for the regulation of limited service prepaid health
plans in a manner similar to the regulation of HMOs. The Company has obtained a
written determination from the staff of the DOI to the effect that its provision
of capitated managed behavioral health care services does not subject the
Company to regulation under this statute. However, there can be no assurance
that the DOI will not take a contrary position in the future.

In 1997, the Company purchased a managed care provider network in
Florida from the HMO with which it had previously had a strategic alliance to
provide workers' compensation managed care services. The Company's provider
network is certified in Florida as a workers' compensation managed care
arrangement, and the Company has filed for licensure of a provider network in
Georgia as a managed care organization. There can be no assurance that future
interpretations of insurance and health care network laws by the regulatory
authorities of states in which the Company does business (or in states into
which the Company may expand such business) will not require licensure or a
restructuring of all or some of the Company's operations, or adversely impact
the Company's results of operations or financial condition.

In addition, certain of the Company's specialty managed care services,
including its managed behavioral health care services and certain of its
workers' compensation managed care services, involve review of requests for
medical care or therapy. Approximately half of the states, including Florida,
Georgia, Alabama and South Carolina where the Company conducts business, have
enacted laws that require licensing of businesses that provide medical review
services. These laws typically establish minimum standards for qualification of
personnel, as well as confidentiality, internal quality control and dispute
resolution procedures. Such regulatory programs may require additional licensure
or increase the Company's operating costs, which may in turn have an adverse
impact upon the Company's competitive position.

<PAGE>

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

EXECUTIVE OFFICERS OF THE REGISTRANT

Pursuant to General Instruction G(3), the information regarding
executive officers of the Company called for by Item 401(b) of Regulation S-K is
hereby included in Part I of this Form 10-K.

The following table sets forth information, as of March 23, 1998, with
respect to each person who is an executive officer of the Company, as indicated
below.

NAME AGE POSITION
- ----- --- --------
<S> <C> <C>
Carlos A. Saladrigas 49 Chairman of the Board and Chief Executive Officer

Jose M. Sanchez 46 Vice Chairman and Area President--South Florida

John T. Carlen 50 President and Chief Operating Officer

Carlos A. Rodriguez 33 Chief Financial Officer, Senior Vice President--
Finance and Administration

Andrea L. Velasquez 37 President--Managed Solutions Group

Jeffrey D. Lamb 40 Senior Vice President--Marketing and
Business Development

Elizabeth J. Marston, Esq. 43 Vice President--Legal and Regulatory Affairs and
General Counsel

Martiniano J. Perez 35 Vice President and Controller
</TABLE>

CARLOS A. SALADRIGAS co-founded the Company in 1984, and currently
serves as its Chairman and Chief Executive Officer. From the Company's inception
to June 1997, Mr. Saladrigas also served as President of the Company. Before
co-founding Vincam, Mr. Saladrigas was Executive Vice President of CAC (now
owned by CAC--United Healthcare Plans of Florida), Florida's oldest HMO, and
previously held several positions at PepsiCo, Inc., including that of Director
of Corporate Planning and Vice President of Finance & Administration for
PepsiCo's subsidiary located in Mexico. Mr. Saladrigas holds an M.B.A. with
honors from the Harvard Business School. He is highly active in PEO industry
efforts, having served as President of NAPEO and of its Florida chapter and as
Vice Chairman of the Institute for the Accreditation of Professional Employer
Organizations, the industry's independent accrediting organization. In addition,

<PAGE>

Mr. Saladrigas was appointed by Florida's governor to serve as a member of the
Florida Board of Employee Leasing Companies (the industry's regulatory
authority in Florida), which he chaired during its first year of operation.

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

JOHN T. CARLEN has served as the Company's President and Chief Operating
Officer since joining the Company in June 1997. From August 1993 to May 1997,
Mr. Carlen was with Paychex, Inc., serving as Executive Vice President. Prior to
working for Paychex, Inc., Mr. Carlen held various executive positions with the
May Department Stores. Mr. Carlen received a B.A., an M.A. and an M.B.A. from
the University of California at Los Angeles.

CARLOS A. RODRIGUEZ has served as the Company's Chief Financial Officer
and Senior Vice President-Finance and Administration since December 1997. From
August 1996 to December 1997, Mr. Rodriguez served as Vice President of Mergers
and Acquisitions. From January to August 1996, Mr. Rodriguez served as the
Company's Vice President of Operations. From June 1994 to January 1996, Mr.
Rodriguez served as the President of Latin American Financial Publications, a
private company. From June 1991 to June 1994, Mr. Rodriguez served as the Chief
Financial Officer of Kitchens of the Oceans, a food processing and distribution
operation. Mr. Rodriguez received a B.A. from Harvard University and an M.B.A.
from the Harvard Business School.

ANDREA VELASQUEZ has served as the President -- Managed Solutions Group
(previously known as the Managed Care Division) since November 1994. From 1991,
when she joined the Company, to November 1994, Ms. Velasquez served the Company
in several positions including, Senior Vice President--Marketing and Sales,
Psych/Care's Vice President--Development and Administration, and Psych/Care's
Director of Business Development and Administration. Ms. Velasquez holds a
B.B.A. from the University of Georgia College of Business and an M.B.A. from the
University of Georgia Graduate Business School.

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

ELIZABETH J. MARSTON, ESQ. has served the Company as Vice President--
Legal & Regulatory Affairs and General Counsel since July 1996. Before joining
the Company, Ms. Marston was a shareholder in the law firm of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. from 1990 to 1996. Her practice
included employment and immigration law matters.

MARTINIANO J. PEREZ has served as Vincam's Controller since February
1993 and as Vice President and Controller since February 1994. He is responsible
for supervising all financial operations and managing Vincam's accounting
department. From July 1991 to January 1993, Mr. Perez was a Vice President with

<PAGE>

Consolidated Bank in charge of financial reporting. Prior to that time, Mr.
Perez was an auditor with KPMG Peat Marwick in Miami, Florida. Mr. Perez holds a
B.S. from Florida International University.

ITEM 2. PROPERTIES

The Company maintains 17 facilities. The Company's headquarters are
currently located in Coral Gables, Florida, in a Company-owned building that
houses the Company's executive offices and specialty managed care operations.
The Company's PEO operations utilize four other Florida offices located in
Miami, Ft. Lauderdale, West Palm Beach and Orlando, as well as offices in
Atlanta, Georgia; Denver and Grand Junction, Colorado; Green Bay, Wisconsin;
Anaheim, California; Novi, Auburn Hills and Grand Rapids, Michigan; Manchester,
New Hampshire; Rochester, New York; Orange, Connecticut; and El Paso, Texas. All
of the Company's offices other than its headquarters are leased. See Notes 1, 8
and 13 of the Company's Consolidated Financial Statements for information
regarding the Company's leases and the mortgage on its headquarters facility.

In December 1997, the Company entered into financing and leasing
arrangements with respect to a new headquarters facility of approximately 90,000
square feet on 8 1/2 acres of land in Miami-Dade County, Florida that the
Company expects will be completed in the fall of 1998. Fleet Real Estate, Inc.
("Fleet Real Estate") owns the property and will own the headquarters facility,
which is to be developed under a development agreement between Vincam and Codina
Development Corporation. Vincam has entered into a triple net lease with Fleet
Real Estate which has an initial expiration date of four years after completion
of the facility and allows Vincam to extend the term of the lease for up to
three years. Fleet Real Estate has financed 97% of the costs of acquiring the
land and constructing the facility with Fleet National Bank, as agent, and
certain banks (the "Lenders"), all but one of which are lenders under Vincam's
current credit facility. Fleet Real Estate's obligations to the Lenders are
secured by a mortgage on the property and the guarantees of Vincam and each of
its subsidiaries of substantially all of such obligations. Vincam has an option
to purchase the building at any time. See Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operation."

ITEM 3. LEGAL PROCEEDINGS

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 liability for 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 $37.0 million 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 can be no assurance, however, that any
such liability will not have such a material adverse effect.

<PAGE>

In December 1995, Angela Isabel Sanchez and her minor children filed a
wrongful death suit in the 11th Judicial Circuit in Miami-Dade County, Florida
against the Company, Miami Free Zone Corporation (one of the Company's PEO
clients), and certain officers of the Company and such client. The complaint
alleged that the defendants improperly assigned certain maintenance duties to a
worksite employee of the Company assigned to the client, who was fatally injured
in the course of such duties. The plaintiffs' amended complaint, which has been
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, and discovery in the proceeding continues. Based on consultations
with the Company's counsel, management of the Company believes that it has
meritorious defenses. 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. However, any recovery from the
Company's insurance carrier would reduce the amount of coverage available to the
Company for other claims occurring in the same year, such as the Byrnes
litigation described below. 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 that the Company will prevail
in the litigation, or in a related claim for indemnification, 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.

The Company is a defendant in a lawsuit brought in the 11th Judicial
Circuit in Miami-Dade County, Florida by James Byrnes in November 1995. Mr.
Byrnes alleges that he was injured by a worksite employee of the Company
assigned to work for Atlantic View Inc. Atlantic View, Inc., a client of the
Company, owns and operates a hotel and was a co-defendant in the litigation,
together with Atlantic View, Inc. and Days Inn of America, Inc. The plaintiff
has settled his claims against all of the defendants in the litigation other
than the Company. The plaintiff alleges that the employee, while he was working
as a valet parking attendant, was negligent in a motor vehicle collision and
severely and permanently injured the plaintiff. Mr. Byrnes has alleged damages
in excess of $50,000 for, among other things, bodily injury, medical costs, pain
and suffering and lost ability to earn income. The court recently granted the
plaintiff's request for summary judgment against the Company, ruling that Vincam
is vicariously liable for the negligence of Vincam's worksite employee. Based on
consultations with the Company's counsel, management of the Company believes
that it has meritorious defenses to the plaintiff's claims and 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. However, any
recovery from the Company's insurance carrier would reduce the amount of
coverage for other claims occurring in the same year, such as the Sanchez
litigation described above. 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 that the Company will prevail
in the litigation, or in a related claim for indemnification, 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.

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. The Company 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

<PAGE>

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.

The Company is also involved in other legal 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 condition or results of
operation 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 or results of
operations.

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

None.

<PAGE>

PART II

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

MARKET INFORMATION. The Common Stock is traded on the Nasdaq National Market
under the symbol "VCAM." The following table sets forth, for the quarters
indicated, the high and low sale prices of the Common Stock as reported on the
Nasdaq National Market.

HIGH LOW
----- -----
FISCAL YEAR ENDED DECEMBER 31, 1997:
<S> <C> <C>

First Quarter ..................................................... $30.33 $18.00
Second Quarter .................................................... $25.67 $17.71
Third Quarter...................................................... $25.31 $18.67
Fourth Quarter .................................................... $27.50 $18.67

FISCAL YEAR ENDING DECEMBER 31, 1998:

First Quarter (through March 20, 1998)............................. $28.75 $23.75
</TABLE>

HOLDERS. As of March 20, 1998, there were approximately 67 shareholders
of record of the Common Stock. This number does not include beneficial owners of
the Common Stock whose shares are held in the names of various dealers, clearing
agencies, banks, brokers and other fiduciaries.

DIVIDENDS. The Company has not declared cash dividends since its
inception and does not anticipate paying any cash dividends in the foreseeable
future, but intends instead to retain any future earnings for reinvestment in
its business. On November 7, 1997, the Company announced a three-for-two split
(the "Stock Split") of its outstanding shares of Common Stock, par value $.001
per share. The stock split was effected in the form of a stock dividend and
entitled each shareholder of record on November 21, 1997 (the "Record Date") to
receive an additional share of Common Stock for every two shares of Common Stock
held by such shareholder of record on the Record Date. The Stock Split was paid
on December 10, 1997. The Company paid cash in lieu of fractional shares
resulting from the Stock Split based on the last sale price as reported on the
NASDAQ National Market System on the Record Date. All references in this Form
10-K to shares of common stock have been adjusted to give effect to the Stock
Split. See Note 9 of the Notes to Consolidated Financial Statements.

Any future determination as to the payment of dividends will be made at
the discretion of the Board of Directors of the Company and will depend upon the
Company's operating results, financial condition, capital requirements, general
business conditions and such other factors as the Board of Directors deems
relevant. In addition, certain credit agreements to which the Company is a party
prohibit the Company from paying dividends or making other distributions on the
Common Stock without the prior written consent of the lenders under such credit
agreements. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

RECENT SALES OF UNREGISTERED SECURITIES. On December 1, 1997, the
Company completed the SNI Acquisition and issued an aggregate of 1,800,000
shares of common stock to Michael J. Gatsas and Theodore L. Gatsas as
consideration for all of the outstanding common stock of SNI. The issuance of
such shares was exempt from the registration requirements of the Securities Act
of 1933, as amended, pursuant to the provisions of Section 4(2) thereof.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The following statement of income and balance sheet data (excluding
statistical data) have been derived from audited financial statements including
the consolidated balance sheets at December 31, 1997 and 1996 and the related
consolidated statements of income, of changes in stockholders' equity (deficit)
and of cash flow for each of the three years in the period ended December 31,
1997 and the notes thereto, appearing elsewhere in this Form 10-K. The following
selected financial data should be read in conjunction with such financial
statements and the notes thereto, as well as "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
1997 1996(1) 1995 1994 1993(2)
-------- ------- ---- ---- -------
(IN THOUSANDS, EXCEPT FOR PER SHARE AND STATISTICAL DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues (3)...................... $ 983,629 $ 654,758 $ 419,371 $ 318,565 $ 138,097
Operating income ................. 4,452 2,185 171 2,700 2,089
Net income........................ 1,659 2,090 371 1,847 1,341
Basic net income per 0.11 0.16 0.03 0.14 0.20
common share..................
Diluted net income per
common share.................. 0.10 0.14 0.03 0.14 0.20

STATISTICAL DATA:
Worksite employees at period end.. 40,615 32,757 19,876 14,831 6,587
PEO client companies at period end 1,919 1,703 1,121 822 239
Average number of worksite
employees per PEO client
company at period end........ 21 19 17 18 28
Gross profit margin............... 5.91 % 5.68% 5.10% 5.06% 5.06%

</TABLE>

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1997 1996 1995 1994(4) 1993(4)
---- ---- ---- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital................... $ 17,412 $ 20,872 $ 253 $ 4,003 $ 1,507
Total assets...................... 95,016 76,361 31,368 14,787 9,482
Long term borrowings, including
current portion............... 11,098 1,106 2,879 2,879 1,178
Other long term liabilities....... 1,440 5,772 3,708 3,206 2,151
Mandatorily Redeemable Series A
Preferred Stock............... --- --- 6,264 --- --
Total stockholders' equity (deficit) 33,311 29,748 (5,179) 2,648 848

</TABLE>

- --------------------
(1) Includes the results of operations of the SMG business since September 1,
1996.
(2) Does not reflect the results of operations of SAI, AMI and SNI, which were
acquired during 1997 in transactions accounted for as pooling of interests.
(3) 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.
(4) Does not reflect the balance sheet data of SAI, AMI and SNI, which were
acquired during 1997 in transactions accounted for as pooling of interests.

<PAGE>

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

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-K. See
Part 1, "Cautionary Note Regarding Forward-Looking Statements." The following
discussion and analysis should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto which appear elsewhere in this Form
10-K.

OVERVIEW

Vincam, one of the ten largest PEOs in the industry based on 1996
revenues, 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 standard PEO services agreement provides for an initial
one year term, subject to termination by the Company or the client at any time
during the first year upon 30 days' prior written notice. Thereafter, the
contract may be terminated upon 30 days' notice given prior to the expiration of
the renewal term or immediately for cause. Client contracts acquired in
acquisitions may be terminable upon shorter notice, or under different terms,
than under the Company's standard PEO services agreements. A significant number
of contract terminations could have a material adverse effect on the Company's
financial condition, results of operations and liquidity. Revenues from
professional employer services are based on a pricing model that takes into
account the gross pay of each employee and a mark-up which includes the
estimated costs of federal and state employment taxes, workers' compensation,
employee benefits and the human resource administrative services, as well as a
provision for profit. The specific mark-up varies by client based on the
workers' compensation classification of the worksite employees and their
eligibility for health care benefits. Accordingly, the Company's average mark-up
percentage will fluctuate based on client mix, which cannot be predicted with
any degree of certainty. Specialty managed care revenues are generated from a
variety of risk-bearing, capitated, and fee-based arrangements.

The Company's revenues include all amounts billed to clients for gross
salaries and wages, related employment taxes, and health care and workers'
compensation coverage of worksite employees. The Company is obligated 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.

<PAGE>

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. See Notes 1 and 7 of the Notes to
Consolidated Financial Statements. While the Company believes that such reserves
are adequate, the Company cannot predict with certainty the ultimate liability
associated with health care costs 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, the Company's financial condition,
results of operations and liquidity could be materially adversely affected.

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. Workers' compensation costs for
1995 and 1996 also include reserves for claims which have been incurred but not
reported and for anticipated loss development. 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 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 SAI, AMI and SNI.

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

The Company's primary operating expenses are administrative personnel
expenses, other general and administrative expenses, and sales and marketing
expenses. Administrative personnel expenses include compensation, fringe
benefits and other personnel expenses related to internal administrative
employees. Other

<PAGE>

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 long-term profitability is largely dependent upon its
success in managing its controllable direct costs, although the Company's
current guaranteed cost workers' compensation policy largely eliminates
fluctuations in direct costs associated with workers' compensation for the years
covered thereby. The Company manages its controllable direct costs through its
use of (i) its proprietary managed care system, which includes provider
networks, utilization review and case management, (ii) educational programs
designed to reduce the severity and frequency of workplace accidents, and (iii)
a variety of other techniques, including return to work programs, drug-free
workplace programs, involvement in hiring, disciplinary and termination
decisions, adjudication of unemployment claims, and reassignment of laid off
workers.

The Company's financial condition and results of operations are subject
to several contingencies including the conclusions that may be reached by the
IRS Market Segment Group and the resolutions of certain pending legal
proceedings. For more information regarding such contingencies see Item 1,
"Industry Regulation--Federal and State Employment Taxes," "Industry
Regulation--Employee Benefit Plans," and Item 3, "Legal Proceedings."

In addition, the year 2000 issue may materially affect the Company's
services or competitive conditions. This issue affects computer systems that
have time-sensitive programs (such as the Company's payroll processing programs)
that may not properly recognize the year 2000. This could result in major
systems failures or miscalculations. The Company has begun the process of
identifying, evaluating, and implementing changes to computer programs necessary
to address the year 2000 issue in order to provide uninterrupted normal
operations of critical business systems before, during and after the year 2000.
If necessary modifications and conversions are not completed in a timely manner,
the year 2000 issue may have a material adverse effect on the results of
operations and financial condition of the Company. The total cost associated
with the required modifications and conversions is not known at this time,
however, it is not expected to be material to the Company's financial position
and is being expensed as incurred.

RECENT DEVELOPMENTS

In January 1998, the Company modified its arrangement with Reliance
National to provide workers' compensation insurance coverage. The arrangement,
originally covering the years 1997 through 1999, now includes the year 2000
under certain revised terms and conditions. The arrangement remains a guaranteed
cost program. The premium paid by the Company in December 1997 for such workers'
compensation insurance coverage is reflected as prepaid workers' compensation
insurance premium in the Company's balance sheet at December 31, 1997 and will
be amortized over the 1998 policy year. The policy is anticipated to enhance the
predictability of the Company's workers' compensation costs because it
substantially eliminates the annual sensitivity of such costs to the ongoing
loss development and payment of workers' compensation claims and related reserve
adjustments beyond the $2,000 deductible per medical claim. Additionally, during
1997 the Company entered into agreements under which the Company reinsured
substantially all the remaining claims under the prior large deductible workers'
compensation insurance policies of SAI, AMI and SNI.

On January 30, 1998, the Company acquired CSS, a privately held PEO
headquartered in Orange, Connecticut with approximately 113 clients and 1,150
worksite employees. The Company issued 150,000 shares of its common stock in
exchange for all of the outstanding shares of common stock of CSS. The

<PAGE>

transaction was not material to the Company's financial condition and results of
operations and will be accounted for in future periods as a pooling of
interests.

RESULTS OF OPERATIONS

The following table sets forth, for each of 1997, 1996 and 1995,
certain selected income statement data expressed as a percentage of revenues:

<TABLE>
<CAPTION>
AS A PERCENT OF REVENUES

YEAR ENDED DECEMBER 31,
-------------------------
1997 1996 1995
---- ----- -----
<S> <C> <C> <C>

Revenues ......................................... 100.0% 100.0% 100.0%
----- ----- -----
Direct costs:
Salaries, wages and employment taxes of
worksite employees .......................... 88.8% 88.4% 88.8%
Health care and workers' compensation ......... 4.2% 4.8% 5.1%
State unemployment taxes and other ............ 1.1% 1.1% 1.0%
----- ----- -----
Total direct costs .......................... 94.1% 94.3% 94.9%
----- ----- -----
Gross profit ..................................... 5.9% 5.7% 5.1%
----- ----- -----
Operating expenses:
Administrative personnel ...................... 2.6% 2.9% 2.7%
Other general and administrative .............. 1.8% 1.5% 1.5%
Sales and marketing ........................... 0.7% 0.8% 0.7%
Depreciation and amortization ................. 0.3% 0.2% 0.1%
----- ----- -----
Total operating expenses .................... 5.4% 5.4% 5.0%
----- ----- -----
Operating income ................................. 0.5% 0.3% 0.1%
Interest income, net ............................. 0.0% 0.1% 0.0%
----- ----- -----
Income before taxes .............................. 0.5% 0.4% 0.1%
Provision for income taxes ....................... 0.3% 0.1% 0.0%
----- ----- -----
Net income ....................................... 0.2% 0.3% 0.1%
===== ===== =====
</TABLE>

During 1996, the Company acquired substantially all of the assets and
liabilities of The Stone Mountain Group, Inc. ("SMG") in an acquisition
accounted for as a purchase. See Note 2 of Notes to Consolidated Financial
Statements. The financial condition and results of operations discussed below
include the results of operations since September 1, 1996 of the business
acquired from SMG, which affects the comparability of the Company's results
of operations for 1997, 1996 and 1995. In addition, the

<PAGE>

results of operations of SAI, AMI and SNI are included for all periods
presented, including those prior to their respective acquisitions by the
Company.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

The Company's revenues for the year ended December 31, 1997 were $983.6
million compared to $654.8 million for the year ended December 31, 1996,
representing an increase of $328.9 million, or 50.2%. This increase was due
primarily to an increased number of PEO worksite employees. The number of
worksite employees increased 23.9% over the same period, from 32,757 worksite
employees to 40,615.

Salaries, wages and employment taxes of worksite employees were $873.3
million for 1997, compared to $579.1 million for 1996, representing an increase
of $294.1 million, or 50.7%. 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 88.8% of revenues for 1997, compared to 88.4% for 1996. 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 cost workers' compensation classification and
lower workers' compensation rates in several of the states where the Company
operates, which resulted in lower markups being charged by the Company.

Health care and workers' compensation costs were $41.8 million for
1997, compared to $31.1 million for 1996, representing an increase of $10.7
million, or 34.3%. 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 1997, compared to 4.8% for 1996. The decrease of health care and
workers' compensation costs as a percentage of revenues was due mainly to the
workers' compensation insurance program that was in place for the full fiscal
year ended December 31, 1997.

State unemployment taxes and other direct costs were $10.5 million for
1997, compared to $7.3 million for 1996, representing an increase of $3.2
million or 43.1%. This increase was due mainly to the higher volume of salaries
and wages paid during 1997 which was a direct function of the increase of PEO
worksite employees, an increased number of client companies using other services
and products (e.g., 401(k), the drug free workplace program, etc.), and an
increase in other direct costs related to the Company's services. State
unemployment taxes and other direct costs were 1.1% of revenues for 1997 and
1996.

Gross profit was $58.1 million for 1997 compared to $37.2 million for
1996, representing an increase of $20.1 million, or 56.2%, due mainly to the
increase in revenues resulting from an increase of PEO worksite employees. This
increase was due mainly to the higher volume of salaries and wages paid during
1997 which was a direct function of the increase of PEO worksite employees.
Gross profit was 5.9% of revenues for 1997, compared to 5.7% for 1996. The
improvement in gross margin was due mainly to lower workers' compensation costs
resulting from the Company's guaranteed cost workers' compensation insurance
policy.

Administrative personnel expenses were $25.1 million for 1997, compared
to $19.2 million for 1996, representing an increase of $5.9 million, or 30.5%.
This increase was primarily attributable to increased staffing to support the
Company's growth, including management and senior executive personnel.
Administrative personnel expenses were 2.6% of revenues for the 1997, compared
to 2.9% for 1996. This decrease in administrative personnel expenses as a
percentage of revenues resulted from the payment of

<PAGE>

executive salaries at AMI in 1996, which were reduced in 1997 after the AMI
Acquisition by the Company in June 1997.

Other general and administrative expenses were $18.0 million for 1997,
compared to $9.5 million for 1996, representing an increase of $8.4 million, or
88.3%. This increase in other general and administrative expenses was primarily
attributable to the growth of the Company's business, to the increased amount of
transaction costs related to the acquisitions of SAI, AMI, SNI and CSS and
severance costs during 1997 of approximately $2.3 million, to the $1.0 million
charge related to the termination of the strategic alliance under which the
Company previously provided its workers' compensation managed care services, and
to the increase of $1.9 million in additional reserves for bad debts charged to
operations during 1997 due to the Company's growth. Other general and
administrative expenses were 1.8% of revenues for 1997, compared to 1.5% for
1996.

Sales and marketing costs were $7.3 million for 1997, compared to $5.0
million for 1996, representing an increase of $2.2 million, or 43.7%. 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 1997, compared to 0.8% for 1996.

Operating income was $4.5 million for 1997, compared to $2.2 million
for 1996, representing an increase of $2.3 million, or 103.8%. The increase in
operating income was due mainly to lower worker's compensation costs resulting
from the Company's guaranteed cost workers' compensation insurance policy. The
Company's operating income for 1997 was also affected by the reversal into
income of a $2.2 million reserve for state employment taxes, which reversed
reserve was offset by an increase of $1.9 million in the provision for bad debt
and the recognition of an impairment of $0.8 million in client contracts.

The effective income tax rate of the Company for 1997 increased to
65.2% from 30.0% in 1996. The increase in the effective income tax rate was due
mainly to the change in tax status of SNI and AMI, which were previously taxed
under the Subchapter S provisions of the Internal Revenue Code, at the
respective dates of their acquisitions by the Company which resulted in the
Company's inability to claim for tax purposes SNI and AMI operating losses of
approximately $1.9 million for periods prior to such acquisition dates. In
addition, the Company had permanent differences related to the non-deductibility
for tax purposes of certain acquisition related costs of approximately $1.8
million. See Note 11 of the Notes to Consolidated Financial Statements.

Net income was $1.7 million for 1997, compared to $2.1 million for
1996, representing a decrease of $0.4 million, or 20.6%. Diluted earnings per
share were $0.10 for 1997, compared to $0.14 for 1996, representing a decrease
of $0.04, or 28.6%.

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.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

The Company's revenues for the year ended December 31, 1996 were $654.8
million compared to $419.4 million for the year ended December 31, 1995,
representing an increase of $235.4 million, or 56.1%. This increase was due
primarily to an increased number of PEO worksite employees. In addition, $16.1

<PAGE>

million of the increase is attributable to the operations of SMG. The number of
worksite employees increased 64.8% over the same period, from 19,876 worksite
employees to 32,757, of which 1,987 were acquired from SMG.

Salaries, wages and employment taxes of worksite employees were $579.1
million for 1996, compared to $372.5 million for 1995, representing an increase
of $206.6 million, or 55.5%. Salaries, wages and employment taxes of worksite
employees were 88.5% of revenues for 1996, compared to 88.8% for 1995. The
decrease of salaries, wages and employment taxes of worksite employees as a
percentage of revenues was due mainly to incremental revenues from the Company's
specialty managed care services.

Health care and workers' compensation costs were $31.1 million for
1996, compared to $21.5 million for 1995, representing an increase of $9.6
million, or 45.1%. This increase was due mainly to the higher volume of health
care and workers' compensation claims paid and/or reserved during 1996 which was
a direct function of the increase of PEO worksite employees. Health care and
workers' compensation costs were 4.8% of revenues for 1996, compared to 5.1% for
1995. The decrease of health care and workers' compensation costs as a
percentage of revenues was due mainly to improved effectiveness in managing the
frequency and severity of workers' compensation and health care costs and
incremental revenues from the Company's specialty managed care services.

State unemployment taxes and other direct costs were $7.3 million for
1996, compared to $4.0 million for 1995, representing an increase of $3.3
million or 82.0%. This increase was due mainly to the higher volume of salaries
and wages paid during 1996 which was a direct function of the increase of PEO
worksite employees, an increased number of client companies using other services
and products (e.g., 401(k), the drug free workplace program, etc.), as well as
an increase in other direct costs related to the Company's specialty managed
care services. State unemployment taxes and other direct costs were 1.1% of
revenues for 1996, compared to 1.0% for 1995.

Gross profit was $37.2 million for 1996, compared to $21.4 million for
1995, representing an increase of $15.8 million, or 74.0%, due mainly to the
increase in revenues resulting from an increase of PEO worksite employees. Gross
profit was 5.7% of revenues for 1996, compared to 5.1% for 1995. This increase
was due mainly to the Company's effectiveness in managing the frequency and
severity of workers' compensation and health care costs and an increase in
revenues from the Company's specialty managed care services which carry a higher
margin than the Company's PEO services.

Administrative personnel expenses were $19.2 million for 1996, compared
to $11.2 million for 1995, representing an increase of $8.0 million, or 72.4%.
This increase was primarily attributable to increased staffing to support the
Company's future growth, including management and senior executive personnel.
Administrative personnel expenses were 2.9% of revenues for the 1996, compared
to 2.7% for 1995.

Other general and administrative expenses were $9.5 million for 1996,
compared to $6.7 million for 1995, representing an increase of $2.8 million, or
42.8%. This increase in other general and administrative expenses was primarily
attributable to the growth of the Company's business and the addition of
workers' compensation managed care services, which the Company made available to
external clients for the first time in 1995. Other general and administrative
expenses were 1.5% of revenues for 1996 and 1995.

Sales and marketing costs were $5.0 million for 1996, compared to $2.8
million for 1995, representing an increase of $2.3 million, or 80.5%. The
increase reflects the addition of sales executives and

<PAGE>

marketing personnel, consistent with the Company's strategy to increase its
client base in its existing and acquired markets. Sales and marketing costs were
0.8% of revenues for 1996, compared to 0.7% for 1995.

Net income was $2.1 million for 1996, compared to $0.4 million for
1995, representing an increase of $1.7 million, or 463.9%. Earnings per share
were $0.14 for 1996, compared to $0.03 for 1995, representing an increase of
$0.11, or 366.7%.

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

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1997, the Company had working capital of $17.4 million,
compared to $20.9 million at December 31, 1996. The decrease was due mainly to
the Company's increased investment in long term assets, such as increased
property and equipment of $2.9 million and increased other assets (including the
Company's purchase of a workers' compensation managed care provider network) of
$1.1 million. The Company anticipates that this trend in working capital will
continue in future periods as a result of the Company's current plans to
continue growth through acquisitions and expenditures to support current growth.

The Company's Credit Agreement with a group of banks for which Fleet
National Bank ("Fleet Bank") acted 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 lender. 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. 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 Company's credit facility, the
Company had outstanding $7.6 million in stand by letters of credit at December
31, 1997 which guarantee the payment of claims to the Company's previous
workers' compensation carrier under the Company's large deductible workers'
compensation insurance policies for 1994, 1995 and 1996. As of that date, there
were no other amounts outstanding under the Company's credit facility.

<PAGE>

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. A default under the Company's
covenants contained in the Facility Financing Agreement constitutes a default
under the Company's lease of the headquarters facility. In the event of such a
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 limited to $12 million. As of December 31, 1997, an
aggregate of $3.9 million in loans were outstanding to the lessor which financed
the $2.6 million purchase price of the land and certain development and closing
costs.

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.

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 in 1998 include
the repayment of $10.2 million borrowed by the Company to finance the prepayment
of a portion of the Company's workers' compensation and general liability
insurance premiums for 1998, payment of $750,000 due on the mortgage of the
Company's current 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 addressing the year 2000 issue.

Net cash used in operating activities was $14.9 million for the year
ended December 31, 1997, compared to cash used in operating activities of
approximately $2.3 million for 1996. The difference between the Company's net
income of $1.7 million for the year ended December 31, 1997, and its negative
operating cash flow was due primarily to a $22.8 million increase in accounts
receivable, an increase of $1.5 million in income tax receivable, an increase of
$1.1 million in other assets, an increase in prepaid workers' compensation
insurance premium of $9.0 million (which was partially financed as noted below),
an increase of $1.6 million in prepaid expenses and other current assets, a
decrease in reserves for claims of $5.3 million, and a decrease of $1.9 million
in accounts payable and accrued expenses, partially reduced by noncash items
such as depreciation and amortization of $3.3 million, provision for doubtful
accounts of $1.9 million and deferred income tax expense of $1.8 million, a
decrease in restricted cash of $1.1 million, an increase in accrued salaries,
wages, and payroll taxes of $18.7 million, and a $1.5 million decrease in
reinsurance recoverable. The increase in accounts receivable and accrued
salaries, wages and payroll taxes resulted from both a higher number of PEO
clients and worksite employees served during 1997 and the timing of the payroll
cycle. The Company's accounts receivable and accrued salaries, wages, and
payroll taxes are subject

<PAGE>

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 $6.3 million for the year
ended December 31, 1997, compared to $6.1 million used in investing activities
in the same period in 1996. This reflects the purchase of $4.7 million in
property and equipment to support the Company's growth and the purchase of short
term investments of $1.6 million.

Net cash provided by financing activities was $7.2 million for the year
ended December 31, 1997, compared to $24.6 million provided by financing
activities in the same period in 1996. During 1997, the Company financed $10.2
million for the payment of the Company's workers' compensation and general
liability insurance premiums for the fiscal year ending December 31, 1998. This
financing inflow was partially offset by the payment of $2.2 million due under
acquisition agreements and $1.0 million paid by SNI to its shareholders prior to
the Company's acquisition of SNI.

NEW ACCOUNTING PRONOUNCEMENTS

During June 1997, the Financial Accounting Standard Board ("FASB")
issued Statement of Financial Accounting Standards No. 130, "Report
Comprehensive Income" ("SFAS No. 130") and Statement of Financial Accounting
Standards No. 131, "Disclosure About Segments of an Enterprise and Related
Information" ("SFAS No. 131") effective for fiscal years beginning after
December 1997.

SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. SFAS No. 131 establishes
standards for the way public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. Management does not expect SFAS No.
130 and 131 to have a significant impact on the Company's reporting and
disclosure requirements in 1998.

INFLATION

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

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES

PAGE
-----
<S> <C>
THE VINCAM GROUP, INC.

Report of Independent Certified Public Accountants...........................................36

Consolidated Balance Sheets as of December 31, 1997 and 1996.................................37

Consolidated Statements of Income for the Years Ended December 31, 1997, 1996
and 1995.....................................................................................38

Consolidated Statement of Changes in Stockholders'

(Deficit) Equity for the Years Ended December 31, 1997, 1996 and 1995........................39

Consolidated Statements of Cash Flows for the Years Ended December 31, 1997, 1996
and 1995.....................................................................................40

Notes to Consolidated Financial Statements...................................................42

Financial Statement Schedule - Valuation and Qualifying Accounts.............................65
</TABLE>

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

In our opinion, based upon our audits and the reports of other auditors, the
consolidated financial statements listed in the accompanying index present
fairly, in all material respects, the financial position of The Vincam Group,
Inc. and its subsidiaries at December 31, 1997 and 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
Staffing Network, Inc. which statements reflect total assets of $7,534,927 at
December 31, 1996, and total revenues of $114,619,766 and $80,315,215 for the
years ended December 31, 1996 and 1995, respectively. We did not audit the
financial statements of Amstaff, Inc. which statements reflect total assets of
$4,308,304 at December 31, 1996, and total revenues of $66,542,568 and
$43,665,424, for the years ended December 1996 and 1995, respectively. We did
not audit the financial statements of Staff Administrators, Inc., which
statements reflect total assets of $5,723,717 at December 31, 1996, and total
revenues of $77,975,919 and $55,824,216 for the years ended December 31, 1996
and 1995, respectively. Those statements were audited by other auditors whose
reports thereon have been furnished to us, and our opinion expressed herein,
insofar as it relates to the amounts included for Staff Administrators, Inc.,
Amstaff, Inc. and Staffing Network, Inc. is based solely on the report of the
other auditors. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Miami, Florida
March 6, 1998

<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
-----------------------------
1997 1996
-------------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................... $ 4,934,755 $18,884,531
Investments.................................. 1,766,737 149,626
Restricted cash.............................. -- 2,331,917
Accounts receivable.......................... 48,924,247 28,001,888
Due from affiliates.......................... 561,673 304,553
Income tax receivable........................ 1,536,371 --
Deferred taxes............................... 735,488 2,445,826
Reinsurance recoverable...................... 1,692,513 1,728,000
Prepaid workers' compensation insurance premium 14,467,403 5,483,972
Prepaid expenses and other current assets.... 3,020,745 1,456,646
------------ ------------
Total current assets.................. 77,639,932 60,786,959

Property and equipment, net.................. 7,852,498 4,945,195
Deferred taxes............................... 640,735 758,130
Reinsurance recoverable...................... -- 1,472,000
Goodwill and client contracts................ 7,384,323 8,034,757
Other assets................................. 1,498,438 364,399
=========== ===========
$95,015,926 $76,361,440

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable and accrued expenses........ $ 4,706,314 $ 6,639,154
Accrued salaries, wages and payroll taxes.... 39,887,369 21,161,185
Amounts due under acquisition agreement ..... -- 3,411,050
Reserve for claims........................... 4,106,734 6,535,025
Income taxes payable......................... -- 1,423,854
Current portion of borrowings................ 11,061,009 179,971
Deferred compensation........................ 6,617 242,013
Deferred gain................................ 460,294 323,157
-------------- ------------
Total current liabilities 60,228,337 39,915,409

Long term borrowings, less current portion... 36,818 925,929
Notes payable to affiliate................... -- 1,018,000
Reserve for claims........................... 402,000 3,265,332
Income taxes payable......................... -- 672,818
Deferred compensation........................ -- 41,200
Deferred gain................................ -- 275,275
Other liabilities............................ 1,038,037 499,091
------------- ------------
Total liabilities..................... 61,705,192 46,613,054
------------- ------------

Commitments and contingencies (Note 13)...... -- --
-------------- ------------

Stockholders' equity:
Common stock, $.001 par value, 60,000,000
shares authorized, 15,390,881 and
12,019,996 shares issued and outstanding
in 1997 and 1996, respectively............ 15,391 12,020
Additional paid in capital................... 35,142,798 33,240,338
Accumulated deficit.......................... (1,847,455) (3,503,972)
------------- ------------
Total stockholders' equity............ 33,310,734 29,748,386
------------- -------------
$ 95,015,926 $ 76,361,440
============ ============
</TABLE>

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

<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31,
------------------------------------------------
1997 1996 1995
--------------- -------------- ------------
<S> <C> <C> <C>
Revenues $ 983,629,486 $ 654,757,791 $ 419,370,972
------------- ------------- -------------
Direct costs:
Salaries, wages and employment
taxes of worksite employees 873,253,542 579,116,425 372,520,644
Health care and workers' compensation 41,796,305 31,125,994 21,453,168
State unemployment taxes and other 10,486,106 7,325,496 4,026,388
------------- ------------- -------------
Total direct costs 925,535,953 617,567,915 398,000,200
------------- ------------- -------------
Gross profit 58,093,533 37,189,876 21,370,772
------------- ------------- -------------
Operating expenses:
Administrative personnel 25,092,004 19,223,096 11,151,590
Other general and administrative 17,969,824 9,544,609 6,687,818
Sales and marketing 7,258,124 5,046,770 2,796,102
Depreciation and amortization 3,321,103 1,190,114 564,371
------------- ------------- -------------
Total operating expenses 53,641,055 35,004,589 21,199,881
------------- ------------- -------------
Operating income 4,452,478 2,185,287 170,891
Interest income, net 322,578 801,279 282,012
------------- ------------- -------------
Income before taxes 4,775,056 2,986,566 452,903
Provision for income taxes (3,115,991) (896,723) (82,290)
------------- ------------- -------------
Net income $ 1,659,065 $ 2,089,843 $ 370,613
============= ============= =============
Basic net income per common share $ 0.11 $ 0.16 $ 0.03
============= ============= =============
Weighted average number of shares
outstanding used in basic
earnings per share calculation 15,268,121 13,387,583 10,757,175
============= ============= =============
Diluted net income per common
share $ 0.10 $ 0.14 $ 0.03
============= ============= =============
Weighted average number of shares
outstanding used in diluted earnings
per share calculation 15,966,363 14,843,960 12,838,770
============= ============= =============
</TABLE>

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

<PAGE>

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

RETAINED
ADDITIONAL EARNINGS
COMMON STOCK PAID IN (ACCUMULATED
-----------------------
SHARES PAR VALUE CAPITAL DEFICIT) TOTAL
--------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>

Balance at January 1, 1995 9,374,011 $ 9,374 $ 39,031 $ 2,521,284 $ 2,569,689

Acquisition of shares (374,013) (374) (39,031) (1,460,595) (1,500,000)

Recapitalization, including transaction costs
of $445,150 charged to retained earnings (1,565,900) (1,566) -- (6,707,194) (6,708,760)

Distributions to shareholders -- -- -- (57,208) (57,208)

Net income -- -- -- 370,613 370,613
------------ ------------ ------------ ------------ -----------

Balance at December 31, 1995 7,434,098 7,434 -- (5,333,100) (5,325,666)

Issuance of common stock, net of
transaction costs of $3,058,685
charged to paid in capital 3,000,000 3,000 26,938,315 -- 26,941,315

Conversion of preferred stock into common
stock 1,565,899 1,566 6,262,044 -- 6,263,610

Issuance of common stock to employees
under stock option plans 19,999 20 39,979 -- 39,999

Distributions to shareholders -- -- -- (260,715) (260,715)

Net income -- -- -- 2,089,843 2,089,843
------------ ------------ ------------ ----------- -----------

Balance at December 31, 1996 12,019,996 12,020 33,240,338 (3,503,972) 29,748,386

Issuance of common stock under acquisition
agreements 3,127,743 3,128 867,909 (2,548) 868,489

Issuance of common stock to employees
under stock option plans 243,161 243 486,077 -- 486,320

Initial public offering costs -- -- (66,035) -- (66,035)

Tax benefit resulting from disqualifying
dispositions on incentive stock options -- -- 615,000 -- 615,000

Shares paid in cash in stock split (20) -- (491) -- (491)

Net income -- -- -- 1,659,065 1,659,065
------------- ----------- ------------ ------------ ------------

Balance at December 31, 1997 15,390,880 $ 15,391 $ 35,142,798 $ (1,847,455) $ 33,310,734
============ ============ ============ ============ ============

</TABLE>

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

<PAGE>

THE VINCAM GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,
-----------------------------------------------
1997 1996 1995
------ ------ -----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.................................................. $ 1,659,065 $ 2,089,843 $ 370,613
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization............................. 3,321,103 1,190,114 564,371
Provision for doubtful accounts........................... 1,880,253 423,206 278,969
Deferred gain............................................. (138,138) 598,432 --
Deferred income expense (benefit)......................... 1,827,733 (476,663) (773,688)
Changes in assets and liabilities:
Decrease in restricted cash............................. 1,081,917 4,209,038 79,579
Increase in accounts receivable......................... (22,802,612) (14,439,113) (5,277,042)
(Increase) decrease in due from affiliates.............. (257,120) 8,111 52,680
Increase in income tax receivable....................... (1,536,371) -- --
Decrease (increase) in reinsurance recoverable.......... 1,507,487 (3,200,000) --
Increase in prepaid workers' compensation insurance premium (8,983,431) (5,483,972) --
Increase in prepaid expenses and other current assets... (1,564,099) (290,195) (842,414)
Increase in other assets................................ (1,134,039) (182,121) (113,003)
(Decrease) increase in accounts payable and accrued expenses (1,932,840) 1,680,891 2,112,627
Increase in accrued salaries, wages and payroll taxes... 18,726,187 8,556,285 4,128,721
(Decrease) increase in reserve for claims............... (5,291,623) 3,103,646 1,753,083
(Decrease) increase in income taxes payable............. (1,481,672) 26,215 315,056
Decrease in deferred compensation....................... (276,596) (274,087) --
Increase in other liabilities........................... 538,946 145,539 60,169
------------- ------------- ------------
Net cash (used in) provided by operating activities.......... (14,855,850) (2,314,831) 2,709,721
------------ ------------- ------------
Cash flows from investing activities:
Purchases of property and equipment......................... (4,709,483) (2,572,166) (1,104,039)
Redemption (purchases) of short term investments............ (1,617,111) 489,606 (639,232)
Cash placed in escrow in connection with acquisition of SMG. -- (1,250,000) --
Cash paid in acquisitions, net of cash acquired of $137,748. -- (2,784,566) --
Collection of notes receivable from stockholders............ -- -- 123,078
Acquisition of client contracts............................. -- (29,295) (317,440)
------------- ------------- -------------
Net cash used in investing activities........................ (6,326,594) (6,146,421) (1,937,633)
------------- ------------- -------------
Cash flows from financing activities:
Principal payments on borrowings............................ (43,199) (2,302,864) (30,000)
Proceeds from borrowings.................................... 10,035,123 -- 213,657
Proceeds from borrowings from affiliates.................... -- 1,268,000 280,000
Recapitalization costs...................................... -- -- (445,150)
Cash paid in connection with acquisition of stock........... -- -- (300,000)
Payment of amounts due under acquisition agreements......... (2,161,050) (413,159) (99,228)
Payment of distribution payable to shareholders............ -- (700,000) --
Notes payable to affiliate.................................. (1,018,000) (260,715) (57,208)
Issuance of common stock, net of transaction costs of
$3,058,685 in 1996....................................... (66,035) 26,941,315 --
Issuance of common stock to employees under stock option plans,
net of shares paid in cash in stock split of $491........ 485,829 39,999 --
------------- ------------- ------------
Net cash provided by (used in) financing activities......... 7,232,668 24,572,576 (437,929)
------------- ------------- ------------
Net (decrease) increase in cash and cash equivalents........ (13,949,776) 16,111,324 334,159
Cash and cash equivalents, beginning of year................ 18,884,531 2,773,207 2,439,048
------------ ------------- ------------
Cash and cash equivalents, end of year...................... $ 4,934,755 $18,884,531 $2,773,207
============ ============= ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 255,350 $ 223,979 $ 222,035
============= ============= ===========
Income taxes $ 1,950,000 $ 1,206,336 $ 493,511
============= ============= ===========

</TABLE>

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

<PAGE>

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

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.

On August 30, 1996, the Company acquired substantially all of the
assets and liabilities of The Stone Mountain Group, Inc. ("SMG") in a
transaction accounted for as a purchase. The fair value of the net assets
acquired amounted to $313,687. The excess of $4,783,076 of the purchase price
(including acquisition costs) over the net assets acquired was allocated to
goodwill.

In May 1996, the Company's mandatorily redeemable Series A
Participating Convertible Preferred Stock was converted into 1,565,899 shares
of the Company's common stock.

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

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

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

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

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

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

The Vincam Group, Inc. and its subsidiaries (the "Company") are a
professional employer organization ("PEO") that 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 provides PEO services primarily to small and medium sized
companies in a variety of industries. Managed care services are provided to
PEO clients and to health and workers' compensation insurance companies,
health maintenance organizations and large employers.

PEO service contracts with client companies are generally for one
year terms with automatic renewal options and subject to termination on 30
days' notice by either party during the first year and annually thereafter.
Client contracts acquired in acquisitions may be terminable upon shorter
notice, or under different terms, than under the Company's standard PEO
services agreement. Managed care contracts with clients are for terms of one
or more years and are subject to cancellation by either party upon 30 to 180
days' notice depending on the nature of the services provided.

The Company does not have a concentration of customers in any one
industry; however, during 1997, 1996 and 1995, a significant portion of the
Company's revenues were generated in Florida and Michigan. The Company's
revenues are generated predominantly by PEO services.

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

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

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

REVENUE RECOGNITION. Revenues and the related costs of wages,
salaries, and employment taxes from professional employer services related to
worksite employees are recognized in the period in which the employee performs
the service. Because the Company is at risk for all of its direct costs,
independently of whether payment is received from its clients, and consistent
with industry practice, all amounts billed

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

to clients for gross salaries and wages, related employment taxes, and health
care and workers' compensation coverage are recognized as revenue by the
Company. The Company establishes a reserve for doubtful accounts when it
determines that collection from a client is unlikely.

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

ACCOUNTING ESTIMATES. The preparation of financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. The more significant
estimates relate to the Company's reserve for claims, amounts recorded as
goodwill and client contracts, and the allowance for bad debts. Actual results
could differ from those estimates.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES. At December 31, 1996, the
Company had $2,208,738 in reserve for state employment taxes. The full amount
of such reserve was reversed into income in the fourth quarter of 1997 after
resolution of certain state employment tax matters.

RESERVE FOR CLAIMS. Certain of the Company's health care benefits are
provided under minimum premium and other loss sensitive programs that carry
specific deductibles. Prior to 1997, the Company's workers' compensation
benefits were provided under large deductible insured plans. The Company
records reserves for health care claims costs, and previously recorded
reserves for workers' compensation claims, based on actuarial calculations
using the Company's loss history of health care and workers' compensation
claims, including estimates of incurred but not reported claims.

In December 1996, the Company entered into an agreement 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 only
claim. In January 1998, the Company extended this workers' compensation
arrangement through the year 2000. Accordingly, effective January 1, 1997, the
Company recorded workers' compensation costs based on the fixed percentage of
the average standard premium paid under its workers' compensation insurance
policy. See Note 7.

In addition, in December 1996, the Company entered into an agreement
to reinsure its remaining claims under the Company's large deductible workers'
compensation insurance policies for the years 1994, 1995, and 1996, for an
aggregate premium of $3,200,000. Additionally, during 1997 the Company entered
into agreements under which the Company reinsured substantially all the
remaining claims under prior large deductible workers' compensation insurance
policies for Staff Administrators, Inc. ("SAI"), Amstaff, Inc. ("AMI") and
Staffing Network, Inc. ("SNI") for an aggregate premium of approximately
$2,810,000. As a result, the Company has recorded the premium as a reinsurance
recoverable and a deferred gain which

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

will be recognized to income in future periods based on the proportion of
cumulative claims paid to the total estimated liability for claims.

Prior to their respective acquisitions by the Company, SAI, AMI and
SNI had, from time to time, been insured under various types of workers'
compensation policies, including, (i) retrospective rating policies, whereby
premiums were paid to the insurance carrier based on estimated actual losses
plus an administrative fee, (ii) guaranteed cost policies, whereby monthly
premiums were paid for complete coverage of all claims under the policy, and
(iii) large deductible policies, where premiums were based on a deductible per
person or occurrence ranging from $150,000 to $1,000,000. Certain of their
health care benefits were provided under minimum premium and other loss
sensitive programs that carry specific deductibles. Reserves for workers'
compensation claims and health care were provided for based on certain
actuarial calculations using each company's respective loss history of
workers' compensation and health care claims, including estimates of incurred
but not reported claims. SAI, AMI and SNI became insured under the Company's
workers' compensation insurance coverage on the respective date of their
acquisitions by the Company, and the Company has reinsured substantially all
of the remaining claims under their respective prior workers' compensation
insurance policies.

At December 31, 1997 and 1996, 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.

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

GOODWILL, CLIENT CONTRACTS AND OTHER LONG-LIVED ASSETS. Assets and
liabilities acquired in connection with business combinations accounted for
under the purchase method are recorded at their respective estimated fair
values. Goodwill represents the excess of the purchase price over the fair
value of net assets acquired, including the recognition of applicable deferred
taxes, and is amortized on a straight-line basis over a period ranging from 8
to 25 years. At December 31, 1997 and 1996, the Company had recorded goodwill
of $5,068,063 and $4,791,836, respectively (net of accumulated amortization of
$281,656 in 1997 and $64,228 in 1996).

Costs incurred in connection with the acquisition of client contracts
from other professional employer organizations, as well as the fair market
value of contracts acquired in connection with purchase business combinations,
are capitalized and amortized using the straight line method over a period of
5 to 15 years, based on the previous professional employer organization's
client retention rate. The Company periodically assesses the status of
contracts acquired to determine the future realizability of the capitalized
costs. At December 31, 1997 and 1996, the Company had recorded client
contracts of $2,316,260 and $3,242,921, respectively (net of accumulated
amortization of $1,588,597 in 1997 and $311,213 in 1996). The Company reviews
long-lived assets, identifiable intangibles and goodwill and reserves for
impairment whenever events or changes in circumstances indicate the carrying
amount of the assets may not be fully recoverable.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

ADVERTISING COSTS. Advertising expenditures are charged to operations
as incurred. Advertising expense amounted to approximately $1,017,300,
$617,800 and $443,200 in 1997, 1996 and 1995, respectively.

CASH AND CASH EQUIVALENTS. Cash equivalents include investments with
original maturities of three months or less and are stated at cost which
approximates market value.

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

The Company is subject to certain state taxes based on gross
receipts, payroll and taxable income within that state. Taxes based on gross
receipts and payroll are classified as salaries, wages and employment taxes of
worksite employees in the accompanying consolidated statements of income,
while taxes based on income are included in the provision for income taxes.

NET INCOME PER COMMON SHARE. Basic net income per common share has
been computed based on the weighted average number of shares of common stock
outstanding during each of the three years ended December 31, 1997. Diluted
net income per common share has been computed based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during each of the three years ended December 31, 1997. The Company has
considered as outstanding common stock equivalents during each of the three
years ended December 31, 1997, all options awarded (see Note 10), as well as
the shares of common stock that have been issued in connection with the
acquisitions of SAI, AMI and SNI.

Basic net income per common share and diluted net income per common
share amounts for each of the years presented have been calculated giving
retroactive effect to an approximate 8,417 to 1 stock split effected by the
Company in June 1995, a 3 for 4 reverse stock split effected on February 21,
1996, and a 3 for 2 stock split effected on November 21, 1997, (jointly, the
"Stock Splits," see Note 9). Outstanding common shares have also been
retroactively adjusted to reflect the Stock Splits.

STOCK BASED COMPENSATION. Effective 1996, the Company adopted the
disclosure provisions of Statement of Financial Accounting Standard No. 123,
Accounting for Stock Based Compensation ("SFAS 123") and retained the
intrinsic value method of accounting for such stock based compensation (see
Note 10).

FAIR VALUE OF FINANCIAL INSTRUMENTS. The Company estimates the fair
market value of financial instruments through the use of public market prices,
quotes from financial institutions and other available

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

information. Considerable judgment is required in interpreting data to develop
estimates of market value and, accordingly, amounts are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. At December 31, 1997 and 1996, the Company's financial instruments
consist primarily of instruments without extended maturities, the fair value
of which, based on management's estimates, equaled their carrying values.

NOTE 2 - ACQUISITIONS

During 1996 and 1995, SNI acquired certain companies for an
aggregate purchase price of $2,066,000 which were accounted for under the
purchase method of accounting. Goodwill in the amount of $2,064,000 was
recorded in connection with these acquisitions. During 1997, SNI recognized an
impairment of client contracts in the amount of $825,375.

On August 30, 1996, the Company acquired substantially all of the
assets and liabilities of The Stone Mountain Group, Inc. ("SMG"), a PEO in
Snellville, Georgia for $4,980,751 in cash and notes (the "SMG Acquisition").
Of the $4,980,751 purchase price, $2,357,314 was paid at closing, $1,373,437
was payable in 1997, and $1,250,000 was placed in escrow for potential
purchase price adjustments in the event that, among other things, client
retention failed to meet certain targets. Of such $1,250,000 in escrow,
$1,177,012 was released to the shareholders of SMG in November 1997, after the
Company completed the evaluation of the SMG Acquisition purchase price
adjustments. The SMG Acquisition was accounted for by the Company using the
purchase method of accounting. The excess of $4,783,076 of costs over the
estimated fair value of net assets acquired associated with the SMG
Acquisition was allocated to goodwill, and is being amortized over a period of
25 years.

The following information presents the unaudited pro forma
consolidated results of operations of the Company for the years ended December
31, 1996 and 1995 as if the SMG Acquisition had occurred on January 1, 1995,
after giving effect to certain adjustments.

December 31, December 31,
1996 1995
--------------------- ----------------------
<S> <C> <C>

Revenues............................................. $ 686,729,694 $ 461,287,877
==================== ====================

Net income........................................... $ 1,905,125 $ 572,293
==================== ====================
Diluted net income per common
share.............................................. $ 0.13 $ 0.04
==================== ====================
</TABLE>

These results are presented for informational purposes only and are
not necessarily indicative of the future results of operations or financial
position of the Company or the results of operations or financial position of
the Company that would have been achieved had the acquisition actually
occurred

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

on January 1, 1995. The Company's results of operations for the year ended
December 31, 1997 include SMG operations for the full year.

On January 7, 1997, the Company acquired Staff Administrators, Inc.
("SAI"), a privately held PEO headquartered in Denver, Colorado (the "SAI
Acquisition"). The Company issued 750,000 shares of its common stock (after
adjusting for the effect of the Stock Splits, see Note 9) in exchange for all
of the equity in SAI and its subsidiaries (other than Staff Administrators of
Western Colorado, Inc.). The transaction has been accounted for as a pooling
of interests; accordingly, all prior period financial statements presented
herein include the assets and liabilities and results of operations of SAI. In
connection with the acquisition of SAI, the Company also acquired, in a
transaction accounted for as a purchase, a 49% minority interest in Staff
Administrators of Western Colorado, Inc. ("SAWCI"), a 51% subsidiary of SAI
(the "SAWCI Acquisition"). The Company issued 30,000 shares of its common
stock (after adjusting for the effect of the Stock Splits, see Note 9) for the
49% interest in SAWCI. The most significant adjustments to the balance sheet
resulting from the SAWCI Acquisition consist primarily of an increase in
goodwill of $566,641 and an increase in client contracts of $301,848.

On June 30, 1997, the Company acquired Amstaff, Inc. ("AMI"), a
privately held PEO headquartered in Novi, Michigan (the "AMI Acquisition").
The Company issued 547,743 shares of its common stock (after adjusting for the
effect of the Stock Splits, see Note 9) in exchange for all of the outstanding
shares of common stock of AMI and its subsidiaries. The transaction has been
accounted for as a pooling of interests; accordingly, all prior period
financial statements presented herein include the assets and liabilities and
results of operations of AMI.

On December 1, 1997, the Company acquired Staffing Network, Inc.
("SNI"), a privately held PEO headquartered in Manchester, New Hampshire (the
"SNI Acquisition"). The Company issued 1,800,000 shares of its common stock
(after adjusting for the effect of the Stock Splits, see Note 9) in exchange
for all of the outstanding shares of common stock of SNI. The transaction has
been accounted for as a pooling of interests; accordingly, all prior period
financial statements presented herein include the assets and liabilities and
results of operations of SNI.

The following combines audited selected historical financial
information of SAI, AMI, SNI and Vincam for the years ended December 31, 1997,
1996 and 1995, and reflects the most significant adjustments resulting from
the SAI, AMI and SNI acquisitions.

YEAR ENDED DECEMBER 31, 1997
-------------------------------------------------------------------------
VINCAM SAI, AMI & SNI ADJUSTMENTS RESULTS
------ -------------- ----------- -------
<S> <C> <C> <C> <C>

Revenues ................. $ 663,610,270 $320,019,216 $ -- $983,629,486
============= ============ ============= ============

Net income (loss)............... $ 2,536,930 $ (877,865) $ -- $ 1,659,065
============== ============== ============= ============
Diluted net income per
common share.................. $ 0.18 $ -- $ -- $ 0.10
============== ============== ============= ============
</TABLE>

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------------------------------------
VINCAM SAI, AMI & SNI ADJUSTMENTS RESULTS
------ -------------- ---------- -------
<S> <C> <C> <C> <C>

Revenues........................ $ 395,619,538 $ 259,138,253 $ -- $ 654,757,791
============= ============= =============== ==============
Net income (loss)............... $ 3,585,976 $ (2,022,250) $ 526,117 $ 2,089,843
============= ============== =============== ==============

Diluted net income per
common share...................... $ 0.31 $ -- $ -- $ 0.14
============= ============== =============== ==============

YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------------
VINCAM SAI, AMI & SNI ADJUSTMENTS RESULTS
------ -------------- ----------- -------

Revenues.......................... $ 239,407,710 $ 179,963,262 $ -- $ 419,370,972
============= ============= ============== =============
Net income (loss)................. $ 809,837 $ (640,513) $ 201,289 $ 370,613
============= ============== ============== =============
Diluted net income per
common share...................... $ 0.08 $ -- $ -- $ 0.03
============= ============== ============== =============
</TABLE>

The following unaudited pro forma financial information is presented
to reflect the effect of the merger of AMI and SNI with wholly owned
subsidiaries of the Company, which acquisitions have been accounted for as a
pooling of interests. The pro forma financial information for each of the
three years ended December 31, 1996, assume that the mergers were consummated
on January 1, 1995. The pro forma financial information is presented for
informational purposes only and is not necessarily indicative of the results
of operations that would have been achieved had the mergers actually been
consummated on the date indicated or that may be obtained in the future. The
following pro forma adjustments to net income as reflected in the consolidated
statements of income presented herein relate to the recording of the provision
for income taxes as if AMI and SNI were taxed as "C" corporations. The
adjustments result from the fact that AMI and SNI were taxed under the
Subchapter S provisions of the Internal Revenue Code (the "IRC") before their
respective acquisitions by the Company. See Note 11.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996 1995
----------- ------------- ---------------
<S> <C> <C> <C>
Net income reported in consolidated
statement of income............................... $ 1,659,065 $ 2,089,843 $ 370,613

Pro forma adjustment:
Benefit from (provision for) taxes - current..... 632,900 (68,000) (113,800)
-------------- -------------- -------------
Pro forma net income............................... $ 2,291,965 $ 2,021,843 $ 256,813
============== ============== =============
Diluted net income per common share................ $ 0.14 $ 0.14 $ 0.02
============== ============== =============
</TABLE>

NOTE 3 - INITIAL PUBLIC OFFERING

In May 1996, the Company completed its initial public offering and
received proceeds of approximately $27,900,000, net of $2,100,000 underwriting
discounts and commissions, from the sale of 3,000,000 shares of common stock
of the Company (after adjusting for the effect of the Stock Splits, see Note
9). The Company used a portion of the proceeds to retire a subordinated
promissory note in the amount of $1,200,000 and to pay a $700,000 distribution
payable related to the Company's repurchase of an option to purchase the
Company's headquarters. In addition, the Company incurred approximately
$1,095,000 in other costs in connection with the offering. Simultaneously with
the completion of the initial public offering, the Company's mandatorily
redeemable Series A Participating Convertible Preferred Stock (the "Series A
Preferred Stock") was converted into 1,565,899 shares of the Company's common
stock (after adjusting for the effect of the Stock Splits, see Note 9).

NOTE 4 - RESTRICTED CASH

The Company had cash deposits at December 31, 1996, of $1,081,917
which served as collateral on certain standby letters of credit issued in
connection with the Company's workers' compensation insurance plan (see Note
7).

In connection with the SMG Acquisition, the Company had in escrow
$1,250,000 at December 31, 1996. On November 11, 1997, $1,177,012 out of the
$1,250,000 in escrow was paid to SMG shareholders.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

NOTE 5 - ACCOUNTS RECEIVABLE

At December 31, 1997 and 1996, accounts receivable consisted of the
following:

Billed to clients......................................... $ 16,149,364 $ 9,132,079
Unbilled revenues......................................... 34,801,470 19,466,459
---------------- --------------
50,950,834 28,598,538
Less: allowance for doubtful account .................... (2,026,587) (596,650)
---------------- ----------------
$ 48,924,247 $ 28,001,888
================ ==============
</TABLE>

NOTE 6 - PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES
1997 1996 (IN YEARS)
------------- -------------- -------------
<S> <C> <C> <C>
Land................................................... $ 284,374 $ 284,374
Building............................................... 775,158 775,158 30
Building and leasehold improvements.................... 856,914 773,924 7
Furniture and fixtures................................. 1,522,279 1,059,580 5
Office and computer equipment.......................... 7,821,501 3,704,396 3-5
Vehicles............................................... 68,488 251,010 3
------------- -----------
11,328,714 6,848,442

Less: accumulated depreciation and amortization........ (3,476,216) (1,903,247)
------------- -----------
$ 7,852,498 $ 4,945,195
============= ===========
</TABLE>

NOTE 7 - 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 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.

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

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

deductible worker's 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
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 December 31, 1997
and 1996, the Company's reserves for workers' compensation claims were
$2,035,477 and $7,408,000, respectively. Of the $2,035,477 at December 31, 1997,
and of the $7,408,000 at December 1996, $402,000 and $3,265,332, respectively,
were classified as claims expected to be settled in more than one year.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

NOTE 8 - BORROWINGS

Borrowings at December 31, 1997 and 1996 are as follows: 1997 1996
-------------- -----------
<S> <C> <C>

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

Note payable for general liability insurance premiums, maturing in
November 1998, with monthly payments of principal and interest
of $19,280, at a rate of 6.50%............................................. 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 November 1998 when a balloon payment of
$750,000 is due, secured by land and building.............................. 791,557 841,561

Note payable for state unemployment taxes, maturing in 1998
with monthly payments of $3,264............................................ 16,326 55,489

Capital lease obligations for computer hardware and software,
payable in monthly instalments of principal and interest ranging
from $3,214 to $7,479 through May 2000, with interests
ranging from 9.80% to 12.30% per annum, collateralized
by computer hardware and software.......................................... 46,276 78,566

Other notes payable, bearing interest at rates ranging from
7.50% to 10.75%, repayable in various monthly instalments.................. 35,019 130,284
--------------- -------------

11,097,827 1,105,900
Less: current portion...................................................... (11,061,009) (179,971)
--------------- ------------
$ 36,818 $ 925,929
=============== =============
</TABLE>

The Company incurred interest expense of approximately $255,400,
$225,900 and $252,800 during 1997, 1996 and 1995, respectively.

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

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

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.

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 lender. 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 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 $7,551,200 in standby letters of credit at December 31, 1997, which
guarantee the payment of claims to the Company's 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.

As of December 31, 1997, the scheduled annual maturities of the
Company's debt are summarized as follows:

1998................................. $ 11,061,009
1999................................. 20,173
2000................................. 16,645
------------
$ 11,097,827
============

NOTE 9 - STOCKHOLDERS' EQUITY

During June 1995, the Company increased its authorized common stock
from 500,000 shares to 39,500,000 shares and simultaneously effected an
approximate 8,417 to 1 stock split. On February 21, 1996, the Company effected a
3 for 4 reverse stock split. On November 21, 1997, the Company effected a 3 for
2 stock split by means of a stock dividend. After the completion of the
Company's initial public offering, the Company amended and restated its Articles
of Incorporation to increase the authorized number of shares of the Company's
common stock from 39,500,000 to 60,000,000, and to increase the authorized
number of shares of preferred stock from 500,000 to 20,000,000. All references
in the financial statements to per share amounts have been retroactively
restated to reflect the change in the number of common shares outstanding as a
result of the Stock Splits.

In connection with the stock split and increase in authorized shares
effected in June 1995, the Company reduced the par value of its common stock to
$.001 from $1.00.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

The following is the reconciliation of the numerators and denominators
of the basic and diluted net income per common share calculations:

<TABLE>
<CAPTION>
1997 1996 1995
---------------- --------------- ----------------
<S> <C> <C> <C>
Net income $ 1,659,065 $ 2,089,843 $ 370,613
================ =============== ================
Weighted average number of shares outstanding
used in basic earnings per share calculation 15,268,121 13,387,583 10,757,175
================ =============== ================
Basic net income per common share $ 0.11 $ 0.16 $ 0.03
================ =============== ================
Weighted average number of shares outstanding
used in basic earnings per share calculation 15,268,121 13,387,583 10,757,175
Assumed exercise of stock options, net of treasury
shares acquired 698,242 774,246 690,474
Issuance of mandatorily redeemable preferred stock
deemed a common stock equivalent -- 682,131 1,391,121
---------------- --------------- ----------------
Weighted average number of shares outstanding
used in diluted earnings per share calculation 15,966,363 14,843,960 12,838,770
================ =============== ================
Diluted net income per common share $ 0.10 $ 0.14 $ 0.03
================ =============== ================

</TABLE>

NOTE 10 - STOCK OPTION PLAN

In February 1996, the Company adopted the 1996 Long Term Incentive Plan
(the "1996 Plan") under which 1,200,000 shares of common stock, after adjusting
for the effect of the Stock Splits, were reserved for issuance in connection
with stock options, stock appreciation rights, performance awards, grants of
restricted stock and other stock based or stock related awards. The 1996 Plan
provides for the grant of both incentive stock options intended to qualify as
such under Section 422 of the Internal Revenue Code ("incentive stock options")
and nonqualified stock options, as well as other stock-based awards, to the
Company's directors, employees and consultants as determined in the discretion
of the Stock Option Committee. Under the 1996 Plan, incentive stock options and
nonqualified stock options may not be granted with an exercise price which is
less than 100% of the fair market value of the Company's shares of common stock
at the date of grant of the option.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

In May 1995, the Company adopted the 1995 Stock Option Plan (the "1995
Plan") under which 999,997 shares of common stock, after adjusting for the
effect of the Stock Splits, were reserved for issuance in connection with stock
options. The 1995 Plan provides for the grant of both incentive stock options
and nonqualified stock options to the directors, officers, key employees,
consultants and other individual contributors of or to the Company and its
subsidiaries, as determined in the discretion of the Stock Option Committee.
Under the 1995 Plan, incentive stock options and nonqualified stock options may
not be granted with an exercise price which is less than 100% and 85%,
respectively, of the fair market value of the Company's shares of common stock
at the date of grant of the option.

Stock options normally have a term of ten years and generally become
exercisable 40% after the second year from the date of grant and in instalments
of 5% quarterly thereafter.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

The following table summarizes stock option activity:

WEIGHTED
EXERCISE AVERAGE
STOCK OPTIONS PRICE EXERCISE PRICE
-------------- ---------------- ---------------
<S> <C> <C> <C>
Outstanding at January 1, 1996............ 772,495 $ 2.00-$ 2.22 $ 2.03
Granted.............................. 467,249 $ 3.11-$22.09 $13.75
Canceled............................. (67,499) $ 2.00-$ 5.37 $ 3.87
Exercised............................ (19,999) $ 2.00 $ 2.00
------------ -------------- ------

Outstanding at December 31, 1996.......... 1,152,246 $ 2.00-$24.75 $ 6.89
Granted.............................. 857,502 $18.42-$28.67 $23.69
Canceled............................. (58,831) $ 2.00-$28.33 $18.46
Exercised............................ (243,162) $ 2.00-$ 2.00 $ 2.00
------------ --------------- -------

Outstanding at December 31, 1997.......... 1,707,755 $ 2.00-$28.67 $15.45
============ =============== =======
</TABLE>

The Company had aggregate exercisable stock options under the 1995 Plan
and the 1996 Plan of 62,877 and 55,000 at December 31, 1997 and 1996,
respectively, with a weighted average exercise price of $2.17 in 1997 and $2.00
in 1996. Aggregate stock options available for grant under the 1995 Plan and the
1996 Plan as of December 31, 1997 and 1996 were 229,082 and 1,027,751,
respectively.

The Company has adopted the disclosure provisions of SFAS 123. The
assumptions used in the calculation of the fair value of the options, using the
Black-Scholes method, issued to employees and directors of the Company during
1997 and 1996 were as follows:
<TABLE>
<CAPTION>

1997 1996
------ -----
<S> <C> <C>
Expected life (years) 8.88 6.50
Interest rate............................................ 6.00 6.20%
Volatility............................................... 95% 55%
Dividend yield........................................... 0% 0%

</TABLE>

Had compensation cost for the Company's two option plans been
determined based on fair market value at the grant date for awards in 1997 and
1996 using the straight line method to recognize such cost,

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

the Company's net income and net income per common equivalent share would have
been reduced to the pro forma amounts indicated below:

1997 1996
------------- -----------
<S> <C> <C>
Pro forma net (loss) income.................. $ (1,381,308) $ 936,562
============== ===========

Pro forma diluted net (loss) income per
common share............................... $ (0.09) $ 0.05
=============== ===========
</TABLE>

Weighted-average fair value of options granted during 1997 and 1996 was
$20.51 and $9.37, respectively.

The following table summarizes the range of exercise prices, weighted
average exercise prices, and weighted average remaining contract life for the
respective range of exercise prices for options outstanding at December 31,
1997:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE REMAINING
RANGE OF NUMBER OF EXERCISE CONTRACTUAL
EXERCISE PRICE OPTIONS PRICE LIFE
---------------- --------- ----------- -------------
<S> <C> <C> <C> <C>
$ 2.00 - $ 2.22 461,002 $ 2.05 7.7
$ 2.23 - $ 8.05 155,999 $ 5.00 8.2
$ 8.05 - $15.00 27,750 $14.54 8.5
$18.01 - $21.00 313,500 $19.78 9.4
$21.01 - $24.00 409,502 $22.20 9.4
$24.01 - $27.00 190,000 $24.52 9.8
$27.01 - $30.00 150,002 $28.67 9.0
--------- ------ -----

Stock options outstanding as
of December 31, 1997 1,707,755 $15.45 8.8
========= ====== =====
</TABLE>

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

NOTE 11 - INCOME TAXES

The provision for federal and state income taxes consists of the following:

<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- ------------
<S> <C> <C> <C>
CURRENT
Federal....................................... $1,056,258 $1,294,182 $786,866
State......................................... 232,000 79,204 70,324
------------ ------------ ----------
1,288,258 1,373,386 857,190
----------- ----------- ---------
DEFERRED
Federal....................................... 1,827,733 (450,754) (747,159)
State......................................... -- (25,909) ( 27,741)
----------- ------------ ----------
1,827,733 (476,663) (774,900)
----------- ----------- ---------
Provision for income taxes......................... $3,115,991 $ 896,723 $ 82,290
========== =========== =========
</TABLE>

Prior to June 30, 1997, AMI was taxed under the Subchapter S provisions
of the IRC whereby its profits and losses flowed directly to its former
shareholders for U.S. federal income tax purposes. Upon the acquisition of AMI
by the Company on June 30, 1997, AMI no longer qualified under the Subchapter S
provisions of the IRC and became a taxable entity. In connection with AMI's
change in tax status, the Company recorded approximately $514,000 and $196,000
as of December 31, 1996 and 1995, respectively, in additional deferred tax
assets, primarily related to certain reserves for other state taxes and workers'
compensation claims.

Prior to December 1, 1997, SNI was taxed under the Subchapter S
provisions of the IRC whereby its profits and losses flowed directly to its
former shareholders for U.S. federal income tax purposes. Upon the acquisition
of SNI by the Company on December 1, 1997, SNI no longer qualified under the
Subchapter S provisions of the IRC and became a taxable entity. In connection
with SNI's change in tax status, the Company recorded approximately $317,200,
$12,000 and $5,000 as of December 31, 1997, 1996 and 1995, respectively, in
additional deferred tax assets, primarily related to allowances for bad debts
and amortization of intangible assets.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

The gross amounts of deferred tax assets and liabilities recorded in
the accompanying consolidated balance sheets at December 31, 1997 and 1996 are
as follows:

<TABLE>
<CAPTION>
1997 1996
--------------- --------------
<S> <C> <C>
Current deferred tax assets (liabilities):
Allowance for doubtful accounts........................ $ 682,240 $ 167,301
Reserve for claims, net of reinsurance recoverable..... 685,235 1,416,575
Reserve for state employment taxes..................... -- 693,851
Mark to market of receivables.......................... (631,987) --
Net operating losses................................... -- 142,826
Other.................................................. -- 25,273
-------------- --------------
$ 735,488 $ 2,445,826
============== ==============

Long term deferred tax assets and (liabilities):
Deferred compensation.................................. $ -- 8,878
Reserve for claims, net of reinsurance recoverable..... 147,714 761,857
Depreciation and amortization.......................... 354,595 (26,948)
Software development costs............................. (201,574) --
Managed care provider network.......................... 340,000 --
Other.................................................. -- 14,343
-------------- --------------
$ 640,375 $ 758,130
============== ==============
</TABLE>

Realization of the above deferred tax assets is dependent on generating
sufficient taxable income in the future to offset the deductible temporary
differences generating the deferred tax assets. Although realization is not
assured, management believes that it is more likely than not that all of the
deferred tax asset will be realized. The amount of the deferred tax asset
considered realizable, however, could be reduced if estimates of future taxable
income are reduced.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

A reconciliation of the differences between income taxes computed at
the federal statutory tax rate and the income tax provisions reflected in the
accompanying consolidated statements of income is as follows:

1997 1996 1995
------------ ------------ -------
<S> <C> <C> <C>
Income taxes computed at the federal
statutory tax rate of 34%................... $1,623,520 $1,015,433 $153,987
State income taxes, net of federal
income tax effect........................... 153,120 52,275 46,414
Acquisition costs............................. 600,591 -- --
Losses of acquired companies through
acquisition dates........................... 632,899 -- --
Provision for taxes from acquired
companies................................... 13,644 -- --
Other, net 92,217 (170,985) (118,111)
---------- ----------- ---------
Provision for income taxes.................... $3,115,991 $ 896,723 $ 82,290
========== =========== =========

</TABLE>

NOTE 12 - EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution plan covering certain of
its worksite employees for a number of client companies. The Company
contributes, on behalf of each participating client, varying amounts based on
client company elections. Total Company contributions for the years ended
December 31, 1997, 1996 and 1995 were approximately $1,365,000, $1,065,100 and,
$550,800 respectively. The Company also has a deferred savings plan covering all
internal and worksite employees of a subsidiary for which contributions are
funded by the Company based on the lesser of 20% of the employee deferrals or 1%
of the employee gross wages. Total Company contributions under the deferred
savings plan for the years ended December 31, 1997, 1996 and 1995 were $222,000,
$108,000 and $73,000, respectively.

In August 1996, the Company received a favorable determination letter
from the Internal Revenue Service ("IRS") regarding the qualified status of its
defined contribution plan under Section 401(k) of the IRC. In its application to
the IRS, the Company informed the IRS that the Company is involved in the
business of leasing employees to client companies and that the 401(k) plan
covered worksite or leased employees who satisfied the plan's eligibility
requirements.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

The Company has entered into non-compete agreements with its Chairman
and Vice-Chairman, who are also the Company's principal stockholders. The
agreements are for a term to be specified by the

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

Company, not to exceed two years, in the event of the Chairman's or
Vice-Chairman's termination. The non-compete agreements require payment to the
Chairman and Vice-Chairman of their full salary and benefits during the term of
the agreement.

The Company leases certain office space, automobiles and office
equipment under non-cancelable operating leases expiring on various dates
through the year 2018. Total rent expense charged to operations during the years
ended December 31, 1997, 1996 and 1995 was approximately $1,556,000, $829,000
and $691,600, respectively.

At December 31, 1997, the minimum annual rental commitments under the
previously described operating leases are as follows:

FOR THE YEAR ENDING
DECEMBER 31,
----------------------------------
1998 $ 1,631,821
1999 1,119,899
2000 926,600
2001 700,000
2002 634,835
Thereafter 36,885
-----------
$ 5,050,040
===========

On December 9, 1997, the Company entered into a leasing arrangement
with respect to a new headquarters facility in Miami-Dade County that the
Company expects will be completed in the fall of 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. 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.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

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.

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, and discovery in the proceeding continues. Based on
consultations with the Company's counsel, management of the Company believes
that it has meritorious defenses. 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. However, any recovery
from the Company's insurance carrier would reduce the amount of coverage
available to the Company for other claims occurring in the same year. 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 that the Company will prevail in the litigation, or in a related
claim for indemnification, 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.

The Company is a defendant in a lawsuit brought in the Eleventh
Judicial Circuit in Miami-Dade County, Florida in November 1995 by an individual
who alleges that he was injured by a worksite employee of a client of the
Company who owns and operates a hotel and was a co-defendant in the litigation.
The plaintiff has settled his claims against all of the defendants in the
litigation other than the Company. The

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

plaintiff alleges that the employee, while he was working as a valet parking
attendant, was negligent in a motor vehicle collision and severely and
permanently injured the plaintiff. The plaintiff has alleged damages in excess
of $50,000 for, among other things, bodily injury, medical costs, pain and
suffering, and lost ability to earn income. The court recently granted the
plaintiff's request for summary judgment against the Company, ruling that the
Company is vicariously liable for the negligence of the worksite employee. Based
on consultations with the Company's counsel, management of the Company believes
that it has meritorious defenses to the plaintiff's claims and that if the
lawsuit is adversely determined, the Company may be entitled to indemnification
from its client and/or its liability insurance carrier. However, any recovery
from the Company's insurance carrier would reduce the amount of coverage
available to the Company for other claims occurring in the same year. 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 that the Company will prevail in the litigation, or in a related
claim for indemnification, 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.

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.

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.

NOTE 14 - SUBSEQUENT EVENTS

On January 30, 1998, the Company acquired Corporate Staff Services,
Inc. ("CSS"), a privately held PEO headquartered in Orange, Connecticut (the
"CSS Acquisition"). The Company issued 150,000 shares of its common stock in
exchange for all of the outstanding shares of common stock of CSS. The
acquisition was not material to the Company's financial condition and results of
operations and will be accounted for in future periods as a pooling of
interests.

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

NOTE 15 - QUARTERLY INFORMATION (UNAUDITED)

The following table presents unaudited quarterly operating results for
the two years ended December 31, 1997. The Company believes that all necessary
adjustments have been included in the amounts stated below to present fairly the
quarterly results when read in conjunction with the Consolidated Financial
Statements and Notes thereto for the years ended December 31, 1997 and 1996.
Results of operations for any particular quarter are not necessarily indicative
of results of operations for a full year or predictive of future periods.

1997 1996
QUARTER ENDED QUARTER ENDED
-------------------------------------- ----------------------------------------
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 JUNE 30 SEPT. 30 DEC. 31
-------- ------- -------- --------- -------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>

STATEMENT OF INCOME DATA:

Revenues................... $220,024 $236,493 $245,409 $281,703 $136,225 $152,081 $162,911 $203,542
Gross profit............... 13,180 14,389 13,876 16,648 7,469 8,883 9,458 11,380
Operating income........... 1,847 63 1,618 924 990 916 797 (517)
--------- --------- -------- --------- -------- -------- -------- --------
Net income (loss) ......... $ 1,219 $ (102) $ 1,028 $ (485) $ 845 $ 1,047 $ 725 $ (539)
========= ========= ======== ========= ======== ======== ======== ========
Diluted net income (loss)
per common share...........$ 0.08 $ (0.01) $ 0.06 $ (0.03) $ 0.07 $ 0.07 $ 0.05 $ (0.03)
========= ========= ======== ========= ======== ======== ======== ========
</TABLE>

The Company believes that the effects of inflation have not had a
significant impact on its results of operations or financial condition and the
Company's results of operations are not subject to pronounced seasonality.

Fourth quarter adjustments in 1997 had the effect of increasing net
income by approximately $196,000, resulting from the recognition into income of
a reserve for state employment taxes and the recognition of certain tax credits,
offset by increases in reserve for bad debts and health care costs. The fourth
quarter also included charges for transaction related and severance costs that
reduced net income by $1,448,000.

The results of operations for the second quarter of 1997 were
negatively affected by transaction costs of approximately $1,400,000 in
connection with the acquisition of AMI, and by approximately $1,000,000 related
to the termination of the strategic alliance under which the Company previously
operated its workers' compensation managed care business.

The results of operations for the first quarter of 1997 were negatively
affected by transaction related costs of approximately $165,000 in connection
with the acquisition of SAI.

* * * * * *

<PAGE>

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
--------- -------- -------- -------- --------
CHARGES TO PAYMENTS OF CLAIMS, BALANCE
BALANCE COSTS AND WRITE OFF OR DECEMBER 31,
JANUARY 1, 1997 EXPENSES UNCOLLECTIBLE ACCOUNTS 1997
--------------- ----------- AND OTHER ------------
REDUCTIONS
----------------------
<S> <C> <C> <C> <C>

RESERVE FOR CLAIMS $ 9,800,357 $ 18,580,339 $ (23,871,962) $ 4,508,734
=============== ============= ==================== ===============
ALLOWANCE FOR DOUBTFUL
ACCOUNTS $ 596,650 $ 1,880,253 $ (450,316) $ 2,026,587
=============== ============= =================== ===============

PAYMENTS OF CLAIMS,
WRITE OFF OR
CHARGES TO UNCOLLECTIBLE ACCOUNTS BALANCE
BALANCE COSTS AND AND OTHER DECEMBER 31,
JANUARY 1, 1996 EXPENSES REDUCTIONS 1996
---------------- -------------- ---------------------- -------------
RESERVE FOR CLAIMS
$ 6,266,241 $ 24,814,314 $ (21,280,198) $ 9,800,357
================ =============== ======================= ============
ALLOWANCE FOR DOUBTFUL
ACCOUNTS $ 214,591 $ 423,206 $ (41,147) $ 596,650
================ =============== ======================= ============

PAYMENTS OF CLAIMS,
WRITE OFF OR
CHARGES TO UNCOLLECTIBLE ACCOUNTS BALANCE
BALANCE COSTS AND AND OTHER DECEMBER 31,
JANUARY 1, 1995 EXPENSES REDUCTIONS 1995
---------------- ---------------- -------------------- - -------------
RESERVE FOR CLAIMS
$ 4,513,158 $ 11,959,869 $ (10,206,786) $ 6,266,241
================ ================ ================== =============
ALLOWANCE FOR DOUBTFUL
ACCOUNTS $ 114,747 $ 278,969 $ (179,125) $ 214,591
================ ================ ================== =============
</TABLE>

<PAGE>

THE VINCAM GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding the Company's executive officers is included
in Item 1 of Part I under "Executive Officers of the Registrant." Other
information required by this Item 10 will be contained in the Company's Proxy
Statement relating to the 1998 Annual Meeting of Shareholders to be held on
May 21, 1998 (the "Proxy Statement"), and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item 11 will be contained in the Proxy
Statement and is incorporated herein by reference, provided that the
Compensation Committee Report and Performance Graph which are contained in the
Proxy Statement shall not be deemed to be incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information required by this Item 12 will be contained in the Proxy
Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

<PAGE>

PART IV

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

(a) 1. Financial Statements - The financial statements and
independent auditors' report are listed in the "Index to
Financial Statements and Financial Schedules" on page 35 and
included on pages 36 through 64.

2. Financial Statement Schedules - The financial statement
schedule required by Item 14(a)(2) is included on p. 65.

3. Exhibits including those incorporated by reference:

EXHIBIT
NO. DESCRIPTION
------- -----------

2.1 Asset Purchase Agreement, dated as of August 21, 1996, by and
among the Registrant, The Stone Mountain Group, Inc. and the
shareholders of The Stone Mountain Group, Inc. (incorporated
herein by reference to Exhibit 2 filed as part of the
Registrant's Report on Form 8-K dated August 21, 1996 (Commission
File No. 0-28148))

2.2 Agreement and Plan of Merger, dated as of December 24, 1996, by
and among the Registrant, Staff Administrators, Inc. and the
shareholders of Staff Administrators, Inc., including the forms
of Registration Agreement, Escrow Agreement and Agreement and
Plan of Merger with respect to Staff Administrators of Western
Colorado, Inc. which are exhibits thereto (incorporated herein by
reference to Exhibit 2 filed as part of the Registrant's Report
on Form 8-K dated December 10, 1996 (Commission file No.
0-28148))

2.3 Agreement and Plan of Merger by and among The Vincam Group, Inc.,
Amstaff, Inc. and Gregory J. Packer and Gregory J. Packer, as
Trustee, dated as of June 30, 1997 (incorporated herein by
reference to Exhibit 2 filed as part of the Registrant's Report
on Form 8-K dated June 30, 1997 (Commission file No. 0-28148))

2.4 Agreement and Plan of Merger by and among The Vincam Group, Inc.,
Staffing Network, Inc., Michael J. Gatsas and Theodore L. Gatsas,
dated as of October 24, 1997 (incorporated herein by reference to
Exhibit 2 filed as part of the Registrant's Report on Form 8-K
dated December 1, 1997 (Commission file No. 0-28148))

3.1 Articles of Incorporation of the Registrant (incorporated herein
by reference to Exhibit 3.1 filed as part of the Registrant's
Report on Form 10-Q for the quarterly period ended September 30,
1996 (Commission File No. 0-28148))

3.2 Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.2 filed as part of the Registrant's Report on Form 10-Q
for the quarterly period ended September 30, 1996 (Commission
File No. 0-28148))

4.1 Form of certificate for shares of the Registrant's Common Stock
(incorporated herein by reference to Exhibit 4.1 filed as part of
Amendment No. 1 to the Company's Registration Statement on Form
S-1, filed with the Commission on March 29, 1996 (Registration
Statement File No. 333-1594))

<PAGE>

4.2 See Exhibits 3.1 and 3.2 for provision of the Articles of
Incorporation and Bylaws of the Registrant defining rights of
holders of Common Stock

10.1 Registration Rights Agreement among the Registrant, Greylock
Equity Limited Partnership, Carlos A. Saladrigas and Jose M.
Sanchez, dated February 10, 1995*

10.2 Non-Competition Agreement between the Registrant and Jose M.
Sanchez, dated February 10, 1995*

10.3 Non-Competition Agreement between the Registrant and Carlos A.
Saladrigas, dated February 10, 1995*

10.4 Credit Agreement dated as of April 24, 1997 among The Vincam
Group, Inc., its Subsidiaries and Fleet National Bank as Agent
and the various financial institutions parties thereto
(incorporated herein by reference to Exhibit 10 filed as part of
the Registrant's Report on Form 10-Q for the quarterly period
ended March 31, 1997 (Commission File No. 0-28148))

10.5 Credit and Investment Agreement dated as of December 9, 1997
among The Vincam Group, Inc., Fleet Real Estate, Inc., Fleet
National Bank and the lenders signatories thereto (including
Schedule 1.02 thereto) (incorporated herein by reference to
Exhibit 10.1 filed as part of the Registrant's Report on Form 8-K
dated December 9, 1997 (Commission File No. 0-28148))

10.6 Workers' Compensation and Employers Liability Policy No.
WA1-65D-004109-035, issued by Liberty Mutual Insurance Company,
policy period December 31, 1995 to December 31, 1996
(incorporated herein by reference to Exhibit 10.9 filed as part
of Amendment No. 2 to the Company's Registration Statement on
Form S-1, filed with the Commission on April 15, 1996
(Registration Statement File No. 333-1594))

10.7 Agreement for Guarantee of Deductible Reimbursement, dated
January 4, 1996, between the Registrant and Liberty Mutual
Insurance Company, related to Policy No. WA1-65D-004109-035*

10.8 Workers' Compensation and Employers Liability Policy No.
WA1-65D-004109-034, issued by Liberty Mutual Insurance Company,
policy period December 31, 1994 to December 31, 1995*

10.9 Agreement for Guarantee of Deductible Reimbursement, dated
January 23, 1995, between the Registrant and Liberty Mutual
Insurance Company, related to Policy No. WA1-65D-004109-034*

10.10 Workers' Compensation and Employers Liability Policy No.
WA1-65D-004109-014, issued by Liberty Mutual Insurance Company,
policy period January 1, 1994 to December 31, 1994*

10.11 Agreement for Guarantee of Deductible Reimbursement, dated
January 4, 1996, between the Registrant and Liberty Mutual
Insurance Company, related to Policy No. WA1-65D-004109-014*

10.12 1995 Stock Option Plan of the Registrant (management
compensation plan)*

10.13 1996 Long Term Incentive Plan of the Registrant (management
compensation plan)*

10.14 Vincam Human Resources, Inc. Deferred Compensation Plan
(management compensation plan)*

<PAGE>

10.15 Real Estate Mortgage and Security Agreement, dated as of
November 2, 1994, between Consolidated Bank, N.A. and the
Registrant*

10.16 Promissory Note, dated November 2, 1994, issued by The Vincam
Group, Inc. to Consolidated Bank, N.A. in the aggregate
principal amount of $1,000,000*

10.17 Amendment, entered into as of December 27, 1995, to the
Registration Rights Agreement, dated February 10, 1995, between
the Registrant, Greylock Equity Limited Partnership, Carlos A.
Saladrigas and Jose M. Sanchez (incorporated herein by reference
to Exhibit 10.23 filed as part of Amendment No. 2 to the
Company's Registration Statement on Form S-1, filed with the
Commission on April 15, 1996 (Registration Statement File No.
33-1594))

10.18 Deductible Payment Loss Portfolio Transfer Insurance Policy
effective December 31, 1996 issued by Commercial Risk
Re-Insurance Company to the Registrant. (confidential treatment
was granted for certain portions of Exhibit 10.18) (incorporated
herein by reference to Exhibit 10.24 filed as part of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (Commission File No. 0-28148))

10.19 Deductible Indemnification Agreement effective December 31, 1996
between the Registrant and the Reliance Insurance Company
(incorporated herein by reference to Exhibit 10.25 filed as part
of the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (Commission File No. 0-28148))

10.20 Deductible Liability Insurance Policy effective December 31, 1996
issued by Reliance Insurance Company of Illinois to the
Registrant, Policy No. NGB0133600-00 (confidential treatment was
granted for certain portions of Exhibit 10.20) (incorporated
herein by reference to Exhibit 10.26 filed as part of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (Commission File No. 0-28148))

10.21 Deductible Liability Insurance Policy effective December 31, 1996
issued by Reliance Insurance Company of Illinois to the
Registrant, Policy No. NXS0133598-00 (incorporated herein by
reference to Exhibit 10.27 filed as part of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1996
(Commission File No. 0-28148))

10.22 Excess Deductible Indemnity Agreement, effective December 31,
1996 issued by Reliance Insurance Company of Illinois
(incorporated herein by reference to Exhibit 10.28 filed as part
of the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (Commission File No. 0-28148))

10.23 Lease Agreement dated as of December 9, 1997 between Fleet Real
Estate, Inc. and The Vincam Group, Inc. (incorporated herein by
reference to Exhibit 10.2 filed as part of the Registrant's
Report on Form 8-K dated December 9, 1997 (Commission File No.
0-28148))

10.24 Guaranty dated as of December 9, 1997 of The Vincam Group, Inc.
in favor of First National Bank, as agent (incorporated herein by
reference to Exhibit 10.3 filed as part of the Registrant's
Report on Form 8-K dated December 9, 1997 (Commission File No.
0-28148))

10.25 Mortgage, Assignment of Leases and Security Agreement dated as of
December 9, 1997 by and between Fleet Real Estate, Inc., The
Vincam Group, Inc. and Fleet National Bank (incorporated herein
by reference to Exhibit 10.4 filed as part of the Registrant's
Report on Form 8-K dated December 9, 1997 (Commission File No.
0-28148))

<PAGE>

10.26 Guaranty dated as of December 9, 1997 by 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. XII, Vincam
Human Resources of Michigan, Inc., Vincam Occupational Health
Systems, Inc., Personnel Resources, Inc., Vincam Insurance
Services, Inc., Vincam Practice Management, Inc., American
Pediatric Systems, Inc., Psych/Care, Inc., Vincam/Staff
Administrators, Inc., Vincam/Staff Administrators of Western
Colorado, Inc., Staff Administrators of CO, Inc., Staff
Administrators of California, Inc., Vincam/Amstaff, Inc., RDM,
Inc., Amstaff PEO, Inc., American Staffing, Inc. and
Vincam/Staffing Network, Inc. in favor of Fleet Real Estate,
Inc., and its successors and assigns, including Fleet National
Bank as Agent (incorporated herein by reference to Exhibit 10.5
filed as part of the Registrant's Report on Form 8-K dated
December 9, 1997 (Commission File No. 0-28148))

10.27 Development Agreement, dated as of September 12, 1997 by and
between Codina Development Corporation and The Vincam Group, Inc.
(incorporated herein by reference to Exhibit 10.6 filed as part
of the Registrant's Report on Form 8-K dated December 9, 1997
(Commission File No. 0-28148))

10.28 Revision to Endorsement #1, dated December 31, 1997, to
Deductible Liability Insurance Policy effective December 31, 1996
issued by Reliance Insurance Company of Illinois to the
Registrant, Policy No. NGB0133600-00

10.29 Revision to Endorsement #1, dated December 31, 1997, to
Deductible Liability Insurance Policy effective December 31, 1996
issued by Reliance Insurance Company of Illinois to the
Registrant, Policy No. NXS0133598-00

10.30 Agreement and Amendment No. 2, effective as of December 31, 1997,
to the Credit Agreement dated as of April 24, 1997 among The
Vincam Group, Inc., its Subsidiaries, Fleet National Bank as
Agent, and the various financial institution parties thereto.

10.31 Second Amendment to Credit and Investment Agreement, effective as
of December 31, 1997, to the Credit and Investment Agreement
dated as of December 9, 1997 among The Vincam Group, Inc., Fleet
Real Estate, Inc., Fleet National Bank and the lenders
signatories thereto.

21 Subsidiaries of the registrant

23 Consent of Price Waterhouse LLP

27 Financial Data Schedule

- ---------------------
* Incorporated herein by reference to the exhibit of the same number filed as a
part of the Company's Registration Statement on Form S-1 filed with the
Commission on February 22, 1996 (Registration Statement File No. 333-1594).

(b) Reports on Form 8-K:

On October 27, 1997, the Company filed a current report on Form 8-K
with the Commission dated October 26, 1997, reporting information under Item 5,
Other Events.

<PAGE>

On November 6, 1997, the Company filed a current report on Form 8-K
with the Commission dated November 5, 1997, reporting information under Item 5,
Other Events.

On November 7, 1997, the Company filed a current report on Form 8-K
with the Commission dated November 7, 1997, reporting information under Item 5,
Other Events.

On November 21, 1997, the Company filed a current report on Form 8-K
with the Commission dated November 21, 1997, reporting information under Item 5,
Other Events.

On December 5, 1997, the Company filed a current report on Form 8-K
with the Commission dated December 1, 1997, reporting information under Item 2,
Acquisition or Disposition of Assets, and Item 7, Financial Statements and
Exhibits.

On December 22, 1997, the Company filed a current report on Form 8-K
with the Commission dated December 9, 1997, reporting information under Item 5,
Other Events, and Item 7, Financial Statements and Exhibits.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, as of the 30th day of
March, 1998.

THE VINCAM GROUP, INC.

By: /s/ CARLOS A. SALADRIGAS
----------------------------
Carlos A. Saladrigas
Chairman of the Board
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
- --------- ----- -----
<S> <C> <C>

/s/ CARLOS A. SALADRIGAS Chairman of the Board March 30, 1998
- ------------------------- and Chief Executive Officer
Carlos A. Saladrigas (Principal Executive Officer)

/s/ JOSE M. SANCHEZ Vice Chairman of the Board March 30, 1998
- -------------------- Area President - South Florida
Jose M. Sanchez

/s/ CARLOS A. RODRIGUEZ Chief Financial Officer, March 30, 1998
- ---------------------- Senior Vice President-
Carlos A. Rodriguez Finance and Administration
(Principal Financial Officer)

/s/ MARTINIANO J. PEREZ Vice President and Controller March 30, 1998
- ----------------------- (Principal Accounting Officer)
Martiniano J. Perez

/s/ HOWARD E. COX, JR. Director March 30, 1998
- ---------------------
Howard E. Cox, Jr.

/s/ CHARLES M. HAZARD, JR. Director March 19, 1998
- -------------------------
Charles M. Hazard, Jr.

/s/ JOHN H. MCARTHUR Director March 20, 1998
- --------------------
John H. McArthur

</TABLE>

<PAGE>

EXHIBIT INDEX

EXHIBIT DESCRIPTION
- ------- ------------

10.28 Revision to Endorsement #1, dated December 31, 1997, to Deductible
Liability Insurance Policy effective December 31, 1996 issued by
Reliance Insurance Company of Illinois to the Registrant, Policy No.
NGB0133600-00.

10.29 Revision to Endorsement #1, dated December 31, 1997, to Deductible
Liability Insurance Policy effective December 31, 1996 issued by
Reliance Company of Illinois to the Registrant, Policy No.
NXS0133598-00.

10.30 Agreement and Amendment No. 2, effective as of December 31, 1997, to
the Credit Agreement dated as of April 24, 1997 among The Vincam
Group, Inc., it Subsidiaried, Fleet National Bank as Agent, and the
various financial institution parties thereto.

10.31 Second Amendment to Credit and Investment Agreement, effective as of
December 31, 1997, to the Credit and Investment Agreement dated as
of December 9, 1997 among The Vincam Group, Inc., Fleet Real Estate,
Inc., Fleet National Bank and the lenders signatories thereto.

21 Subsidiaries of the registrant

23 Consent of Price Waterhouse LLP

27 Financial Data Schedule

EXHIBIT 10.28

(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. NGB0133600-00 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 (DBA: Vincam Human Resources,
Inc.)
Vincam/Staff Administrators, Inc. of California (DBA: Vincam Human Resources,
Inc.)
Vincam/Staff Administrators, Inc. of Western Colorado (DBA: Vincam Human
Resources)
American Staffing, Inc.
Vincam/Amstaff, Inc.
Amstaff HR Services, 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.
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. (DBA: Staffing Network, Inc., a Vincam Group
Company)
Corporate Staff Services, Inc.

EXHIBIT 10.29

(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. NXS0133598-00 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 (DBA: Vincam Human Resources,
Inc.)
Vincam/Staff Administrators, Inc. of California (DBA: Vincam Human Resources,
Inc.)
Vincam/Staff Administrators, Inc. of Western Colorado (DBA: Vincam Human
Resources)
American Staffing, Inc.
Vincam/Amstaff, Inc.
Amstaff HR Services, 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. (DBA: Staffing Network, Inc. a Vincam Group
Company)
Corporate Staff Services, Inc.

EXHIBIT 10.30

AGREEMENT AND AMENDMENT NO. 2

AGREEMENT AND AMENDMENT NO. 2 (this "AMENDMENT"), dated as of March 20,
1998, but effective as of December 31, 1997, by and among THE VINCAM GROUP,
INC., a Florida corporation (the "COMPANY"), the Subsidiaries of the Company
whose names appear on the signature page hereof (together with the Company,
collectively, the "BORROWERS"), the Lenders under (and as defined in) the
Revolving Credit Agreement referred to below (the "Revolver Lenders"), and FLEET
NATIONAL BANK, a national banking association ("FLEET"), as agent for both the
Revolver Lenders and for the lenders under the Lease Credit Agreement referred
to below (the "LEASE LENDERS") (in its capacity as agent for the Revolver
Lenders, Fleet shall be referred to as the "REVOLVER AGENT", and in its capacity
as agent for both the Revolver Lenders and the Lease Lenders under the Stock
Pledge Agreement referred to below, Fleet shall be referred to as the
"COLLATERAL AGENT").

WHEREAS, the Company has acquired all of the issued and outstanding
capital stock of each of 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. Service Group, Inc., Staff Resource Services,
Inc., Staffing Group Enterprises, Inc., AM Risk Management Company, Addison,
Inc., ATCO PEO, Inc. (collectively, the "AMSTAFF SUBSIDIARIES"), each of which
is an indirect wholly owned subsidiary of the Company.

WHEREAS, the Company has formed each of Vincam Staffing, Inc., a
Florida corporation, and Vincam Government Solutions, Inc., a Florida
corporation (together with the Amstaff Subsidiaries, the "NEW Subsidiaries"),
and the Company is the owner of all of the issued and outstanding capital stock
of each of the New Subsidiaries.

WHEREAS, pursuant to the terms of the Credit Agreement, dated as of
April 24, 1997, as the same has been and may hereafter be amended from time to
time (the "REVOLVING CREDIT AGREEMENT"), by and among the Company, the
subsidiaries of the Borrowers named therein, the Revolver Lenders and the
Revolver Agent, each of the New Subsidiaries is required to become a party to
the Revolving Credit Agreement as a "Borrower" thereunder and to assume all
Obligations (such term and all other capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Revolving Credit
Agreement).

WHEREAS, pursuant to the terms of that certain Stock Pledge Agreement,
dated as of April 24, 1997, as the same has been and may hereafter be amended
from time to time (the "STOCK PLEDGE AGREEMENT"), between the Company and the
Collateral Agent, the Company is required to grant to the Collateral Agent, for
the benefit of the Revolver Lenders and the Lease Lenders, a continuing security
interest in and to all of the issued and outstanding capital stock of the New
Subsidiaries, as security for the Borrowers obligations under, among other
things, (a) that certain Lease Agreement, dated as of December 9, 1997, between
the Company and Fleet Real Estate, Inc. (the "LESSOR"), (b) that certain
Guaranty (Lessor), dated as of December 9, 1997, from the Company to Fleet in
its capacity as lease agent (in such capacity, the "LEASE AGENT") under that
certain Credit and investment Agreement, dated as of December 9, 1997 (the
"LEASE CREDIT AGREEMENT"), among the Company, the Lessor, the Lease Lenders and
the Lease Agent and (c) the Revolving Credit Agreement; and

WHEREAS, the parties hereto desire to amend, on the terms set forth
herein, the Credit Agreement and the Stock Pledge Agreement.

<PAGE>

NOW, THEREFORE, in consideration of these premises, and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

1. AMENDMENTS TO CREDIT AGREEMENT.

a. AMENDMENT OF SECTION 10.4.

Section 10.4 of the Credit Agreement is hereby amended to read in its
entirety as follows:

10.4 CURRENT RATIO. The Borrowers will not permit the ratio of
Current Assets to Current Liabilities to be less than 1.25 to 1.0 at
any fiscal quarter end, commencing with the fiscal quarter ending
December 31, 1997.

b. AMENDMENT OF SECTION 10.5.

Section 10.5 of the Credit Agreement is hereby amended to read in its
entirety as follows:

10.5 MINIMUM TANGIBLE NET WORTH. Commencing with the fiscal
quarter ending December 31, 1997, the Borrowers shall at all times
maintain consolidated Tangible Net Worth of not less than (i)
$22,500,000, plus (ii) seventy-five percent (75%) of all cumulative
consolidated Net Income of the Borrowers after December 31, 1997,
PROVIDED, that for purposes of this clause (ii) only positive
consolidated Net Income shall be included and any net losses shall be
disregarded, PLUS (iii) seventy-five percent (75%) of the net proceeds
of any public offering or private placement by any of the Borrowers of
shares of capital stock of any of the Borrowers. The level of Tangible
Net Worth required under this Section 10.5 may be adjusted, for certain
non-cash charges to the extent incurred in connection with Permitted
Acquisitions which are identified to and approved by the Agent in
writing.

2. JOINDER OF NEW SUBSIDIARIES. Each of the Credit Agreement and the Notes
is hereby amended by including each of the New Subsidiaries as a
"Borrower" thereunder. Each of the New Subsidiaries hereby expressly
assumes all of the Obligations and acknowledges and agrees that it
shall be jointly and severally liable for all Obligations as a
"Borrower" under each of the Credit Agreement, the Notes and the other
Loan Documents.

3. AMENDMENT TO STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement is
hereby amended by (a) including each of the New Subsidiaries as an
"Issuer" thereunder and (b) deleting SCHEDULE I therefrom and inserting
in place thereof SCHEDULE I attached hereto.

4. SUPPORTING DOCUMENTS. Contemporaneously with the execution hereof, the
Company shall deliver to the Collateral Agent the following:

i. original stock certificates representing all of the
issued and outstanding shares of capital stock of each of the
New Subsidiaries, together with stock powers therefor duly
executed in blank; and

ii. a certificate of the Secretary or Assistant Secretary of each
of the New Subsidiaries certifying as to (i) the Articles of
Incorporation and By-Laws of such New Subsidiary, as in effect
on the date hereof, (ii) the incumbency and signatures of the
officers of such New Subsidiary that are authorized to execute
and deliver this Amendment and (iii) the resolutions of the
Board of Directors of such New

2
<PAGE>

Subsidiary authorizing the execution, delivery and performance
of this Amendment.

5. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby represent and
warrant to the Revolver Agent and the Revolver Lenders as follows:

a. REPRESENTATIONS IN LOAN DOCUMENTS. Except as set forth on SCHEDULE
II attached hereto, each of the representations and warranties made
by or on behalf of the Borrowers in any of the Loan Documents was
true and correct when made and is true and correct on and as of the
date of this Amendment, except to the extent that any such
representation or warranty relates by its express terms solely to a
prior date.

b. NO DEFAULTS. After giving effect to the amendments to the Revolving
Credit Agreement effectuated by this Amendment, no Default or Event
of Default exists.

c. CORPORATE AUTHORITY AND ENFORCEABILITY. This Amendment has been duly
executed and delivered by the Borrowers and is in full force and
effect as of the date hereof, and constitutes the valid and binding
obligation of the Borrowers enforceable against the Borrowers in
accordance with its terms.

6. NO OTHER AMENDMENTS. Except as specifically provided herein, the terms
and provisions of the Revolving Credit Agreement and the Stock Pledge
Agreement shall be and remain unaltered and in full force and effect.

7. MISCELLANEOUS. This Amendment shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts (without
regard to conflicts of laws principles). This Amendment may be executed
in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but
all of which together shall constitute one instrument.

[Remainder of page intentionally blank.]

3
<PAGE>

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed under seals as of the date first set forth above.

VINCAM HUMAN RESOURCES, INC. THE VINCAM GROUP, INC.
VINCAM HUMAN RESOURCES, INC. I
VINCAM HUMAN RESOURCES, INC. II By: /s/ CARLOS RODRIGUEZ
VINCAM HUMAN RESOURCES, INC. III ---------------------------
VINCAM HUMAN RESOURCES, INC. IV Name: Carlos Rodriguez
VINCAM HUMAN RESOURCES, INC. V Title: CFO
VINCAM HUMAN RESOURCES, INC. VI
VINCAM HUMAN RESOURCES, INC. XII FLEET NATIONAL BANK,
VINCAM HUMAN RESOURCES OF individually and as
MICHIGAN, INC. Revolver Agent and
VINCAM OCCUPATIONAL HEALTH Collateral Agent
SYSTEMS, INC.
PERSONNEL RESOURCES, INC. By: /s/ GINGER STOLZENTHALER
VINCAM INSURANCE SERVICES, INC. ---------------------------
VINCAM PRACTICE MANAGEMENT, INC. Name: G. Stolzenthaler
AMERICAN PEDIATRIC SYSTEMS, INC. Title: SVP
PSYCH/CARE, INC.
VINCAM/STAFF ADMINISTRATORS, INC. NATIONSBANK, N.A.
VINCAM/STAFF ADMINISTRATORS OF
WESTERN COLORADO, INC. By: /s/ ALLEN A. TAYLOR
VINCAM/STAFF ADMINISTRATORS OF ---------------------------
CO, INC., f/k/a Staff Name: Allen A. Taylor
Administrators of CO, Inc. Title: Vice President
VINCAM/STAFF ADMINISTRATORS OF
CALIFORNIA, INC., f/k/a Staff SUNTRUST BANK, MIAMI, N.A.
Administrators of California, Inc.
VINCAM/AMSTAFF, INC.
AMSTAFF HR SERVICES, INC. By: /s/ JORGE ARRIETA
R.D.M., INC. ---------------------------
AMERICAN STAFFING, INC. Name: Jorge Arrieta
AMSTAFF PEO, INC. Title: Vice President
AMSTAFF H.R.M., INC.
AMSTAFF MANAGEMENT SERVICES, INC.
AMSTAFF PROFESSIONAL SERVICES, INC.
AMSTAFF EMPLOYER RESOURCES, INC.
AMSTAFF P.C.S., INC.
A.E. SERVICE GROUP, INC.
STAFF RESOURCE SERVICES, INC.
STAFFING GROUP ENTERPRISES, INC.
AM RISK MANAGEMENT COMPANY
ADDISON, INC.
ATCO PEO, INC.
VINCAM/STAFFING NETWORK, INC.
VINCAM/CORPORATE STAFF SERVICES, INC.
VINCAM STAFFING, INC.
VINCAM GOVERNMENT SOLUTIONS, INC.

By: /s/ CARLOS RODRIGUEZ
-------------------------
Name: Carlos Rodriguez
Title: CFO

EXHIBIT 10.31

SECOND AMENDMENT TO CREDIT AND INVESTMENT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AND INVESTMENT AGREEMENT (this "SECOND
AMENDMENT") is dated as of March 20,1998, but effective as of December 31, 1997,
by and among The Vincam Group, Inc. (the "COMPANY"), Fleet Real Estate, Inc., a
Rhode Island corporation (the "LESSOR"); Fleet Real Estate Capital, Inc.,
NationsBank, N.A. and SunTrust Bank, Miami, N.A. (individually, together with
its successors and assigns, a "LENDER," and collectively, together with their
successors and assigns, the "LENDERS"); and FLEET NATIONAL BANK, a national
banking association (as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent");

W I T N E S S E T H:

WHEREAS, the Company, the Lessor, the Lenders and the Agent executed
and delivered that certain Credit and Investment Agreement, dated as of December
9, 1997, as amended by an Amendment to Credit and Investment Agreement and
Joinder to Guaranty and Contribution Agreement dated as of January 30, 1998 (as
so amended, the "CREDIT AGREEMENT");

WHEREAS, the Company has requested and the Lessor, the Lenders and the
Agent have agreed to certain amendments to the Credit Agreement, subject to the
terms and conditions hereof; and

WHEREAS, the Company has formed each of Vincam Staffing, Inc. and
Vincam Government Solutions, Inc., each a Florida corporation (individually a
"NEW SUBSIDIARY" and collectively, the "NEW SUBSIDIARIES") and the Company is
the owner of all of the issued and outstanding capital stock of each of the New
Subsidiaries, and Section 8.33 of the Credit Agreement requires that the Company
(i) deliver to the Agent pursuant to the Security Instruments the certificates
evidencing all of the issued and outstanding shares of stock of the New
Subsidiaries, accompanied by undated stock powers executed in blank and (ii)
cause the New Subsidiaries to become Guarantors;

NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Company, the Lessor, the
Lenders and the Agent hereby covenant and agree as follows:

1. DEFINITIONS. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference

<PAGE>

contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended hereby.

2. Amendment to Section 8.23. Section 8.23 of the Credit Agreement
hereby is deleted in its entirety and the following is substituted therefor:

Section 8.23 CURRENT RATIO. The Company will not permit the ratio
of Current Assets to Current Liabilities to be less than 1.25 to 1.0 at
any fiscal quarter end, commencing with the fiscal quarter ending
December 31, 1997.

3. Amendment to Section 8.24. Section 8.24 of the Credit Agreement
hereby is deleted in its entirety and the following is substituted therefor:

Section 8.24 MINIMUM TANGIBLE NET WORTH. Commencing with the
fiscal quarter ending December 31, 1997, the Company shall at all times
maintain consolidated Tangible Net Worth of not less than (i)
$22,500,000, plus (ii) seventy-five percent (75%) of all cumulative
consolidated Net Income of the Company after December 31, 1997,
PROVIDED, that for purposes of this clause (ii) only positive
consolidated Net Income shall be included and any net losses shall be
disregarded, plus (iii) seventy-five percent (75%) of the net proceeds
of any public offering or private placement by the Company of shares of
capital stock of the Company. The level of Tangible Net Worth required
under this Section 8.24 may be adjusted, for certain non-cash charges
to the extent incurred in connection with Permitted Acquisitions which
are identified to and approved by the Agent in writing.

4. RESTATEMENT OF REPRESENTATIONS AND WARRANTIES. The Company hereby
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement and the other Transaction Documents as fully as if
made on the date hereof and with specific reference to this Second Amendment,
including the supplemental disclosures set forth in Schedule I attached hereto
and made a part hereof, and all other Transaction Documents executed and/or
delivered in connection herewith.

5. REPLACEMENT OF COMPLIANCE CERTIFICATE. Exhibit H to the Credit
Agreement (the Compliance Certificate) hereby is deleted in its entirety and
Exhibit H hereto is substituted therefor.

6. EFFECT OF AMENDMENT. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Transaction Documents shall be and
remain in full force and effect, and shall constitute the legal, valid, binding
and

2
<PAGE>

enforceable obligations of the Company. The amendments contained herein shall be
deemed to have prospective application only, unless otherwise specifically
stated herein.

7. RATIFICATION. The Company hereby restates, ratifies and reaffirms
each and every term, covenant and condition set forth in the Credit Agreement
and the other Transaction Documents effective as of the date hereof.

8. COUNTERPARTS. This Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.

9. SECTION REFERENCES. Section titles and references used in this
Second Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.

10. NO DEFAULT. To induce the Lessor, the Lenders and the Agent to
enter into this Second Amendment and to continue to make advances pursuant to
the Credit Agreement, the Company hereby acknowledges and agrees that, as of the
date hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of the Company arising out of or with respect to any
of the Loans or Lessor Investment Payments or other obligations of the Company
owed to the Lenders or the Lessor under the Credit Agreement and the other
Transaction Documents.

11. FURTHER ASSURANCES. The Company agrees to take such further actions
as the Agent shall reasonably request in connection herewith to evidence the
amendments herein contained to the Company.

12. GOVERNING LAW. This Second Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of New York.

13. CONDITIONS PRECEDENT. This Second Amendment shall become effective
only upon execution and delivery (i) of this Second Amendment by each of the
parties hereto, (ii) of the Consent and Reaffirmation of Guarantors at the end
hereof by each of the Guarantors, (iii) of the Joinder Agreement in the form of
Annex 1 hereto by the New Subsidiaries, whereby they become Guarantors and
parties to the Contribution Agreement, and (iv) delivery to the Agent pursuant
to the Security Instruments of the certificates evidencing all of the issued and
outstanding

3
<PAGE>

shares of stock of the New Subsidiaries, accompanied by undated stock powers
executed in blank.

[SIGNATURES CONTAINED ON NEXT PAGE]

4
<PAGE>

IN WITNESS WHEREOF, the Company, the Lessor, each of the Lenders and
the Agent has caused this Second Amendment to be duly executed, under seal, by
its duly authorized officer as of the day and year first above written.

The Company: THE VINCAM GROUP, INC.

By: /s/ CARLOS RODRIGUEZ
------------------------------------
Name: Carlos Rodriguez
Title: CFO

Lessor: FLEET REAL ESTATE, INC.

By: /s/ MARK E. CONNORS
------------------------------------
Name: Mark E. Connors
Title: Senior Vice President

Lenders: FLEET REAL ESTATE CAPITAL, INC.

By: /s/ MARK E. CONNORS
------------------------------------
Name: Mark E. Connors
Title: Senior Vice President

NATIONSBANK, N.A.

By: /s/ ALLEN A. TAYLOR
------------------------------------
Name: Allen A. Taylor
Title: Vice President

SUNTRUST BANK, MIAMI, N.A.

By: /s/ JORGE ARRIETA
------------------------------------
Name: Jorge Arrieta
Title: Vice President

Agent: FLEET NATIONAL BANK

By: /s/ GINGER STOLZENTHALER
------------------------------------
Name: G. Stolzenthaler
Title: SVP

5
<PAGE>

CONSENT AND REAFFIRMATION OF GUARANTORS

Each of the undersigned (i) acknowledges receipt of the foregoing Second
Amendment to Credit and Investment Agreement (the "SECOND AMENDMENT"), (ii)
consents to the execution and delivery of the Second Amendment by the parties
thereto and the addition of the New Subsidiaries as Guarantors and (iii)
reaffirms all of its obligations and covenants under the Guaranty (Lessee) dated
as of December 9, 1998 executed by it, and agrees that none of such obligations
and covenants shall be affected by the execution and delivery of the Second
Amendment or the addition of the New Subsidiaries as Guarantors and parties to
the Contribution Agreement. This Consent and Reaffirmation may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts, taken together, shall constitute but
one and the same instrument.

[SIGNATURES CONTAINED ON NEXT PAGE]

6
<PAGE>

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. XII
VINCAM HUMAN RESOURCES OF MICHIGAN, INC.
VINCAM OCCUPATIONAL HEALTH SYSTEMS, INC.
PERSONNEL RESOURCES, INC.
VINCAM INSURANCE SERVICES, INC.
VINCAM PRACTICE MANAGEMENT, INC.
AMERICAN PEDIATRIC SYSTEMS, INC.
PSYCH/CARE, INC.
VINCAM/STAFF ADMINISTRATORS, INC.
d/b/a STAFF ADMINISTRATORS, INC.)
VINCAM/STAFF ADMINISTRATORS OF
WESTERN COLORADO, INC. (d/b/a
STAFF ADMINISTRATORS OF
WESTERN COLORADO, INC.)
VINCAM/STAFF ADMINISTRATORS OF CO,
INC. (f/k/a STAFF
ADMINISTRATORS OF CO., INC.)
VINCAM/STAFF ADMINISTRATORS OF
CALIFORNIA, INC.(f/k/a STAFF
ADMINISTRATORS OF CALIFORNIA,
INC.)
VINCAM/AMSTAFF, INC.
R.D.M., INC.
AMSTAFF PEO, INC.
AMERICAN STAFFING, INC.
ADDISON, INC.
AMSTAFF PROFESSIONAL SERVICES, INC.
AMSTAFF HR SERVICES, INC.
AMSTAFF MANAGEMENT SERVICES, INC.
AMSTAFF H.R.M., INC.
A.E. SERVICE GROUP, INC.
STAFF RESOURCE SERVICES, INC.
AMSTAFF EMPLOYER RESOURCES, INC.
AMSTAFF P.C.S., INC.
STAFFING GROUP ENTERPRISES, INC.
A.M. RISK MANAGEMENT COMPANY
ATCO PEO, INC.
VINCAM/STAFFING NETWORK, INC.
VINCAM/CORPORATE STAFF SERVICES,
INC.

By: /s/ CARLOS RODRIGUEZ
--------------------------------
Name: Carlos Rodriguez
Title: CFO

7
<PAGE>

ANNEX 1 TO SECOND AMENDMENT
TO CREDIT AND INVESTMENT
AGREEMENT

JOINDER AGREEMENT

THIS JOINDER AGREEMENT dated as of March 20, 1998 by VINCAM STAFFING,
INC. and VINCAM GOVERNMENT SOLUTIONS, INC., each a Florida corporation
(individually a "NEW SUBSIDIARY" and collectively, the "NEW SUBSIDIARIES").

WHEREAS, The Vincam Group, Inc., as the Company, Fleet Real Estate,
Inc., as the Lessor, Fleet Real Estate Capital, Inc., NationsBank, N.A. and
SunTrust Bank, Miami, N.A., as the Lenders and Fleet National Bank, as the Agent
executed and delivered a Credit and Investment Agreement dated as of December 9,
1997, as amended by a First Amendment to Credit and Investment Agreement and
Joinder to Guaranty and Contribution Agreement dated as of January 30, 1998 and
a Second Amendment to Credit and Investment Agreement of even date herewith (as
so amended, and as hereafter amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms, the "CREDIT AGREEMENT;
capitalized terms used herein without definition have the meanings given them in
the Credit Agreement);

WHEREAS, each of the New Subsidiaries has become a wholly owned
subsidiary of the Company, pursuant to Section 8.33 of the Credit Agreement,
each of the New Subsidiaries is required to become a Guarantor and a party to
the Contribution Agreement;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

1. JOINDER OF NEW SUBSIDIARIES. Each of the New Subsidiaries is hereby
joined as a Guarantor under the Guaranty (Lessee) for all purposes thereunder
(as a Florida Guarantor and a Guarantor) and under the Credit Agreement and the
other Loan Transaction Documents, and as a party to the Contribution Agreement
(as a "Florida Subsidiary Guarantor", a "Subsidiary Guarantor" and a
"Contributing Party", as those terms are defined therein) thereunder, and each
of the New Subsidiaries shall have all of the rights and undertakes and assumes
all of the obligations of a Guarantor under the Guaranty Agreement, and as a
Contributing Party under the Contribution Agreement, in each case as if it had
been an original party thereto.

2. COUNTERPARTS. This Joinder Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same agreement.

8
<PAGE>

IN WITNESS WHEREOF the parties hereto have entered into this Joinder
Agreement as of the date and year first written above.

VINCAM STAFFING, INC.
VINCAM GOVERNMENT SOLUTIONS, INC.

By: /s/ CARLOS RODRIGUEZ
--------------------------
Name: Carlos Rodriguez
Title: CFO

9
<PAGE>

EXHIBIT H

COMPLIANCE CERTIFICATE

TO: Fleet National Bank, as Agent
75 State Street
Boston, Massachusetts 02109

The undersigned Responsible Officer of The Vincam Group, Inc., a
Florida corporation (the "COMPANY"), and each of the subsidiaries of the Company
(together with the Company, the "BORROWERS"), hereby certifies, with respect to
the Credit and Investment Agreement dated as of December 9, 1997 among Fleet
National Bank (the "Agent"), Fleet Real Estate, Inc., certain Lenders parties
thereto from time to time, and the Company as amended through the date hereof
(the "CREDIT AGREEMENT") that (a) the Company has been in complete compliance
for the period from ____/____/____ to ____/____/____ (the "APPLICABLE FINANCIAL
STATEMENTS DATE") with the covenants of the Company contained therein, as
demonstrated below, and (b) no Default has occurred and is continuing as of the
date hereof, except, in either case, as noted below. All capitalized terms used
herein and not otherwise defined shall have the meanings prescribed therefor in
the Credit Agreement.

- ---------------------------------------- ------------------------------------- -------------------------------
ACTUAL AS OF
COVENANT REQUIRED ____________ ____, ______
- ---------------------------------------- ------------------------------------- -------------------------------
<S> <C> <C>
Financial Statements Quarterly w/in 45 days; and
annually w/in 120 days
- ---------------------------------------- ------------------------------------- -------------------------------

All documents filed with SEC Within 10 days after filing
- ---------------------------------------- ------------------------------------- -------------------------------

Maximum Ratio of Total Funded Debt to 2.5:1 at the end of any fiscal ___.___:1 ($____________ to
Adjusted EBITDA quarter for the prior four $____________)
consecutive fiscal quarters
- ---------------------------------------- ------------------------------------- -------------------------------

Minimum Ratio of Adjusted EBITDA plus 1.05:1 at the end of each fiscal
rental payments in respect of the quarter through 12/31/97 and then
Lease to Fixed Charges plus rental 1.25:1, at the end of each fiscal ___.___:1 ($____________ to
payments in respect of the Lease quarter thereafter, in each case, $____________)
for the prior four consecutive
fiscal quarters
- ---------------------------------------- ------------------------------------- -------------------------------

Maximum Ratio of Total Funded Debt to 0.5:1 at the end of any fiscal ___.___:1 ($____________ to
Capitalization quarter $____________)
- ---------------------------------------- ------------------------------------- -------------------------------

10
<PAGE>

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

Minimum Ratio of Current Assets to 1.25:1 at the end of any fiscal
Current Liabilities quarter, commencing with the fiscal ___.___:1 ($__________
quarter ending December 31, 1997 to $____________)
- ---------------------------------------- ------------------------------------- -------------------------------

Minimum Tangible Net Worth Required pursuant to Section 10.5
of the Credit Agreement: $____________
$____________1
- ---------------------------------------- ------------------------------------- -------------------------------
</TABLE>

Comments Regarding Exceptions:

Attached hereto are financial statements as of and for the fiscal
[quarter] [year] ended on the Applicable Financial Statements Date, which have
been certified by the (undersigned) [and Accountants] as required by Section
8.01(c) of the Credit Agreement.

Submitted by:

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

Name:
-----------------------------

Title:
----------------------------

Date:
-----------------------------

- --------
1 Insert amount equal to sum of (i) $22,500,000, plus (ii) seventy-five percent
(75%) of all cumulative consolidated Net Income of the Company after December
31, 1997, PROVIDED, that for purposes of this clause (ii) only positive
consolidated Net Income shall be included and any net losses shall be
disregarded, plus (iii) seventy-five percent (75%) of the net proceeds of any
public offering or private placement by the Company of shares of capital stock
of the Company. Such amount may be adjusted pursuant to terms of the Credit
Agreement with the written approval of the Agent.

EXHIBIT 21

SUBSIDIARIES OF REGISTRANT

NAME STATE OF INCORPORATION
---- ----------------------
Vincam Human Resources, Inc. Florida
Vincam Human Resources, Inc. I Florida
Vincam Human Resources, Inc. II Florida
Vincam Human Resources, Inc. III Florida
Vincam Human Resources, Inc. IV Florida
Vincam Human Resources, Inc. V Florida
Vincam Human Resources, Inc. VI Florida
Vincam Human Resources, Inc. XII Florida
Vincam Human Resources of Michigan, Inc. Florida
Personnel Resources, Inc. Florida
Vincam Staffing, Inc. Florida
Vincam Government Solutions, Inc. Florida
Psych/Care, Inc. Florida
Vincam Occupational Health Systems, Inc. Florida
Vincam Insurance Services, Inc. Florida
American Pediatric System, Inc. Florida
Vincam Practice Management, Inc. Florida
Vincam/Staff Administrators, Inc. Colorado
Vincam/Staff Administrators of CO, Inc. Colorado
Vincam/Staff Administrators of California, Inc. Colorado
Vincam/Staff Administrators of Western Colorado, Inc. Colorado
American Staffing, Inc. Michigan
Vincam/Amstaff, Inc. Michigan
Amstaff HR Services, Inc. Michigan
R.D.M., Inc. Michigan
Amstaff PEO, Inc. Michigan
Amstaff H.R.M., Inc. Michigan
Amstaff Management Services, Inc. Michigan
Amstaff Professional Services, Inc. Michigan
Amstaff Employer Resources, Inc. Michigan
Amstaff P.C.S., Inc. Michigan
A.E. Service Group, Inc. Michigan
Staff Resource Services, Inc. Michigan
Staffing Group Enterprises, Inc. Michigan
AM Risk Management Company Michigan
Addison, Inc. Michigan
ATCO PEO, Inc. Michigan
Vincam/Staffing Network Inc. New Hampshire
Vincam/Corporate Staff Services, Inc. Connecticut

EXHIBIT 23

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File No. 333-08003), Form S-3 (File No. 333-39681) and
Form S-3, as amended (File No. 333-45201) of The Vincam Group, Inc. of our
report dated March 6, 1998 appearing on page 36 of this Annual Report on Form
10-K.

PRICE WATERHOUSE LLP

Miami, Florida
March 31, 1998

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of The Vincam Group, Inc. for the year ended
December 31, 1997 included in this Annual Report on Form 10-K and is qualified
in its entirety by reference to such financial statements.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,934,755
<SECURITIES> 1,766,737
<RECEIVABLES> 50,950,834
<ALLOWANCES> 2,026,587
<INVENTORY> 0
<CURRENT-ASSETS> 77,639,932
<PP&E> 11,328,714
<DEPRECIATION> 3,476,216
<TOTAL-ASSETS> 95,015,926
<CURRENT-LIABILITIES> 60,228,337
<BONDS> 0
0
0
<COMMON> 15,391
<OTHER-SE> 33,295,343
<TOTAL-LIABILITY-AND-EQUITY> 95,015,926
<SALES> 983,629,486
<TOTAL-REVENUES> 983,629,486
<CGS> 0
<TOTAL-COSTS> 925,535,953
<OTHER-EXPENSES> 53,641,055
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 255,350
<INCOME-PRETAX> 4,755,056
<INCOME-TAX> 3,115,991
<INCOME-CONTINUING> 1,659,065
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,659,065
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.10

</TABLE>