INTERIM SERVICES INC, S-3/A, 1998-05-06

INTERIM SERVICES INC
S-3/A, 1998-05-06
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1998

REGISTRATION NO. 333-50775

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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

AMENDMENT NO. 1
TO

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

INTERIM SERVICES INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 36-3536544
(State of incorporation) (IRS E.I.N.)
</TABLE>

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

2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309, (954) 938-7600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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

JOHN B. SMITH, ESQ.
SENIOR VICE PRESIDENT
2050 SPECTRUM BOULEVARD
FORT LAUDERDALE, FL 33309
(954) 938-7600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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

COPIES TO:

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<S> <C>
ANDREW HULSH, ESQ. EDWIN D. WILLIAMSON, ESQ.
BAKER & MCKENZIE SULLIVAN & CROMWELL
701 BRICKELL AVENUE, SUITE 1600 1701 PENNSYLVANIA AVE., N.W.
MIAMI, FL 33131 WASHINGTON, D.C. 20006
(305) 789-8985 (202) 956-7500
</TABLE>

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

AS SOON AS POSSIBLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

(Approximate date of commencement of proposed sale to the public)

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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION, DATED MAY 6, 1998

$150,000,000

[LOGO]

% CONVERTIBLE SUBORDINATED NOTES DUE 2005

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

The Notes are convertible at any time prior to maturity, unless previously
redeemed or repurchased, into shares of Common Stock of Interim Services Inc. at
a conversion rate of shares per each $1,000 principal amount of Notes
(equivalent to a conversion price of approximately $ per share), subject to
adjustment in certain circumstances. On May 4, 1998, the last reported sale
price of the Common Stock, which is listed under the symbol "IS" on the New York
Stock Exchange, was $32 13/16 per share.

Interest on the Notes will be payable on and of each year,
commencing , 1998. The Notes are redeemable, in whole or in part, at the
option of the Company at any time on or after , 2001 at the redemption
prices set forth herein, plus accrued interest to the date of redemption. See
"Description of Notes--Optional Redemption." The Notes are not entitled to a
sinking fund. The Notes will mature on , 2005.

In the event of a Change of Control (as defined herein), each holder of
Notes may require the Company to repurchase its Notes, in whole or in part, for
cash or, at the Company's option, Common Stock (valued at 95% of the average
closing prices for the five trading days ending on and including the third
trading day prior to the repurchase date) at a repurchase price of 100% of the
principal amount of Notes to be repurchased, plus accrued interest to the
repurchase date. See "Description of Notes--Repurchase at Option of Holders Upon
a Change of Control."

The Notes are unsecured obligations subordinated in right of payment to all
existing and future Senior Debt (as defined herein) of the Company and will be
effectively subordinated in right of payment to all indebtedness and other
liabilities of the Company's subsidiaries. As of March 27, 1998, the Company had
$571.0 million of Senior Debt. The Indenture will not restrict the Company or
its subsidiaries from incurring Senior Debt or other indebtedness.

Concurrently with the Notes Offering, the Company is offering 7,000,000
shares of its Common Stock by a separate prospectus. The consummation of the
Notes Offering and the Common Stock Offering are not conditioned upon each
other.

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE NOTES.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

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<CAPTION>
INITIAL PUBLIC
OFFERING PRICE UNDERWRITING PROCEEDS TO
(1) DISCOUNT (2) COMPANY (1)(3)
----------------- ------------- ---------------
<S> <C> <C> <C>
Per Note...................................................... % % %
Total (3)..................................................... $ $ $
</TABLE>

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(1) Plus accrued interest, if any, from 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

(3) Before deducting estimated expenses of $350,000 payable by the Company.

(4) The Company has granted the Underwriters an option for 30 days to purchase
up to an additional $22,500,000 aggregate principal amount of Notes at the
initial public offering price shown above, less the underwriting discount,
solely to cover over-allotments. If such option is exercised in full, the
total public offering price, underwriting discount and proceeds to Company
will be $ , $ and $ , respectively. See "Underwriting".
--------------------------

The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Notes
will be ready for delivery in book-entry form only through the facilities of DTC
in New York, New York on or about , 1998, against payment therefor in
immediately available funds.

GOLDMAN, SACHS & CO. NATIONSBANC MONTGOMERY SECURITIES LLC

ROBERT W. BAIRD & CO. BT ALEX. BROWN CHASE SECURITIES INC.
Incorporated
------------------------------

The date of this Prospectus is , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CONVERTIBLE NOTES
OR THE COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT COVERING
TRANSACTIONS IN SUCH SECURITIES AND THE IMPOSITION OF A PENALTY BID. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE
DETAILED INFORMATION AND THE SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE, OR INCORPORATED BY REFERENCE,
IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, THE INFORMATION IN THIS
PROSPECTUS GIVES EFFECT TO THE SALE OF THE COMPANY'S HEALTHCARE DIVISION (THE
"HEALTHCARE DIVISION") IN SEPTEMBER 1997. REFERENCES TO FISCAL 1997, 1996, 1995,
1994 AND 1993 REFER TO THE COMPANY'S FISCAL YEARS ENDED DECEMBER 26, 1997,
DECEMBER 27, 1996, DECEMBER 29, 1995, DECEMBER 30, 1994 AND DECEMBER 24, 1993,
RESPECTIVELY. 1997 PRO FORMA FINANCIAL INFORMATION GIVES EFFECT TO ACQUISITIONS
AND A DISPOSITION MADE BY THE COMPANY IN FISCAL 1997 AS IF THEY OCCURRED AT THE
BEGINNING OF FISCAL 1997.

THE COMPANY

GENERAL

Interim Services Inc. ("Interim" or the "Company") is a worldwide leader in
recruiting, assessing and deploying talent for a wide variety of businesses.
Through flexible staffing, recruitment, search, consulting and outplacement
services, the Company provides professionals in the fields of information
technology ("IT"), finance, law, manufacturing and human resources, as well as
clerical, administrative and light industrial staffing.

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services ("Professional Services") in the areas of
information technology, legal, accounting, banking and finance and human
resources, and (ii) the Commercial Staffing Group, which offers workforce
management and clerical, administrative and light industrial staffing services
("Commercial Staffing Services"). The Professional Services Group and Commercial
Staffing Group each represented approximately 50% of the Company's pro forma
revenues in fiscal 1997. The Company believes that it is one of the five largest
worldwide providers of Professional Services, and one of the ten largest
worldwide providers of staffing services, based on revenue.

Since the Company's initial public offering in January 1994 (the "IPO"), the
Company's network of offices in the Professional Services and Commercial
Staffing Groups has nearly doubled, from 373 offices in North America to 733
offices in 12 countries at the end of the first quarter 1998. The Company's
revenues from Professional Services and Commercial Staffing Services increased
from $537.0 million in fiscal 1994 to $1.4 billion in fiscal 1997 ($1.5 billion
on a pro forma basis). This growth has been accomplished through strategic
acquisitions, internal growth and capitalizing on cross-selling opportunities.
During this period, the Company acquired 18 companies providing staffing,
consulting and employment services through approximately 161 offices,
representing over $550 million of acquired revenues, approximately $496 million
of which were from Professional Services. In April 1997, the Company acquired
Michael Page Group PLC ("Michael Page"), a premier international recruiting and
staffing company specializing primarily in the accounting, banking and finance
industries. The acquisition of Michael Page, the Company's largest acquisition
to date, has provided the Company with a strong international presence,
substantial growth in its higher-margin Professional Services business, enhanced
cross-selling opportunities and access to a worldwide customer base.

BUSINESS STRATEGY

The Company's goal is to drive revenue and earnings growth by delivering
innovative integrated human resources solutions worldwide through its
consultative approach to workforce management. The Company intends to achieve
this goal through a growth strategy that includes strategic acquisitions, with
particular emphasis in its high-margin Professional Services businesses, opening
new offices in existing and new geographic markets and continued development of
its client base by capitalizing on cross-selling opportunities. This growth
strategy is complemented by an operating strategy of offering a comprehensive
range of innovative services under common brands through decentralized,
entrepreneurial offices providing specialized expertise. Through the
implementation of the Company's strategy, earnings before interest and taxes
("EBIT") as a percentage of revenues increased from 2.6%

3
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in fiscal 1993 (without giving effect to the restatement of the Company's
financial statements to account for the acquisition of Brandon Systems
Corporation ("Brandon") as a pooling-of-interests) to 6.5% in fiscal 1997.

The key elements of the Company's strategy are:

PROVIDE INNOVATIVE PRODUCTS AND SERVICES. By taking a consultative approach
to client needs, the Company has developed innovative, value-added services that
help clients better manage their human assets. Interim On-Premise utilizes
proprietary software that provides "qualitative" measurement of performance,
quantitative analysis of staffing efficiencies and customized reporting. The
Company's "interim.com" website and "Emerging Workforce" surveys contain
employment information that can be used by both candidates and clients, and the
website was made part of the Smithsonian Institution's Permanent Research
Collection on Information Technology Innovation.

UTILIZE ADVANCED RECRUITMENT METHODS. The Company has added new techniques
to successfully recruit and retain candidates. Through five recruitment centers
in Europe, Asia and South Africa, Interim recruits professionals predominantly
to the U.S. to fill a shortage of skills. In addition, Interim was the first
company in the staffing industry to implement national television advertising
featuring a toll-free number (1-800-A-CAREER) and full-page WALL STREET JOURNAL
advertising for managerial and executive positions. Recruitment efforts are
globally supported by both Internet and Intranet-based technology and a
developing central candidate database that will allow the Company to maintain
contact with candidates throughout the duration of their careers.

LEVERAGE BRAND IDENTITY. Interim is one of a small number of staffing
companies which provide Commercial Staffing Services and Professional Services
under the same brand name. This maximizes cross-selling opportunities (e.g.,
Interim Technology, Interim Accounting Professionals, Interim Legal Services,
Interim Attorneys, Interim Personnel, etc.). Through this common branding, the
Company and its franchisees and licensees are better able to benefit from
national media advertising.

4
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the basis of brand awareness and local specialized expertise. Each of the
Company's offices are organized on this basis, thereby providing clients with
perceived value and enhanced services by enabling them to deal with Interim
representatives who "speak their language" and understand their specific human
resources requirements. Further, all Interim managers are compensated based on
profits generated within their scope of responsibility and cross-selling
activities, and they are responsible for their own hiring, pricing, business mix
and local promotion.

INDUSTRY OVERVIEW

The global staffing services industry has experienced significant growth in
response to the changing work environment worldwide. According to Eurostat, the
European Commission's statistical body, the total staffing services market in
developed economies had revenues of approximately $94 billion in 1995 (the
latest available data). The focus of the staffing industry is changing from
employers' traditional use of staffing services to manage personnel costs and
meet fluctuating staffing requirements to the reduction of administrative
overhead by outsourcing human resources operations that are not part of their
core business competencies. The use of flexible staffing services has allowed
employers to improve productivity, outsource specialized skills and avoid the
negative effects of layoffs. Rapidly changing regulations concerning employee
benefits, insurance and retirement plans, as well as the high cost of hiring,
laying off and terminating permanent employees has also prompted many employers
to take advantage of the flexibility of temporary and contract staffing
arrangements. In addition to the economic conditions driving staffing industry
growth, the Company believes that changing demographics of the workforces of
developed economies and evolving attitudes concerning work patterns, both
domestically and internationally, also contribute to growth in the staffing
industry. These trends have accelerated with the pace of technological change
and greater global competitive pressures.

The U.S. remains the largest and most important staffing service market in
the world. According to STAFFING INDUSTRY REPORT, U.S. staffing industry
revenue, including temporary help, placement, search and outplacement, grew from
approximately $29.3 billion in 1992 to approximately $65.0 billion in 1997,
representing a compound annual growth rate of 17.3%. The U.K. is the second
largest national staffing services market in the world. According to a report
commissioned by the Federation of Recruitment and Employment Services in the
U.K., staffing industry revenue in the U.K. grew from approximately $8.9 billion
in 1992 to approximately $21.8 billion in 1996, representing a compound annual
growth rate of 25.1%.

The staffing services market in most countries in which the Company operates
is highly fragmented and includes a large number of medium-sized and small
businesses, many of which operate in a single geographic market. This
fragmentation, combined with changing client demands and competitive pressures,
has resulted in a trend towards industry consolidation. This consolidation is
being driven by, among other things, client demands for "one-stop shopping" from
staffing providers. Faced with a desire to minimize the number of vendors,
coupled with the need for sophisticated management information systems, the
growth of national or global relationships and the expansion of professional
level specialties, clients demand the services of large staffing companies
capable of offering a full range of staffing services over a broad geographic
area. This ability has been particularly important in fulfilling the needs of
large regional, national and international accounts. Within this more
competitive environment, smaller companies may have difficulties competing due
to limited service offerings, geographic concentration and lack of sufficient
working capital and management resources. As a result, many smaller companies
have been acquired in recent years and the Company believes that small and
medium-sized staffing companies are becoming increasingly responsive to
acquisition proposals by larger firms, such as the Company. Furthermore, the
Company believes that consolidation may also occur among larger regional and
national companies.
------------------------

The Company is a Delaware corporation with its corporate headquarters
located at 2050 Spectrum Boulevard, Fort Lauderdale, Florida 33309. The
Company's telephone number is (954) 938-7600.

5
<PAGE>
THE OFFERING

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<S> <C>
SECURITIES OFFERED $150,000,000 aggregate principal amount of % Convertible
Subordinated Notes due 2005 (the "Notes" and the offering of
such Notes, the "Notes Offering"). The Company has granted
the Underwriters an option for 30 days to purchase up to
$22,500,000 additional aggregate principal amount of Notes,
solely to cover over-allotments.

INTEREST PAYMENT DATES Interest on the Notes is payable at the rate set forth on
the cover page hereof, semi-annually on each and
, commencing , 1998.

CONVERSION RIGHT The Notes are convertible at any time prior to maturity,
unless previously redeemed or repurchased, into shares of
Common Stock at a conversion rate of shares per $1,000
principal amount of Notes (equivalent to a conversion price
of approximately $ per share), subject to adjustment
in certain circumstances as described herein. See
"Description of Notes -- Conversion Rights."

SUBORDINATION The Notes are subordinated in right of payment to all
existing and future Senior Debt (as defined in "Description
of Notes-- Subordination") of the Company and will be
effectively subordinated to all indebtedness and other
liabilities of the Company's subsidiaries. As of March 27,
1998, the Company had $571.0 million of Senior Debt,
approximately $259.9 million of which will be repaid with
the net proceeds from this offering and the Common Stock
Offering. The indenture will not restrict the Company or its
subsidiaries from incurring additional Senior Debt or other
indebtedness. See "Capitalization," "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" and "Description of Notes -- Subordination."

OPTIONAL REDEMPTION The Notes will be redeemable at the Company's option, in
whole or in part, at any time on or after , 2001 at
the redemption prices set forth herein plus accrued interest
to the date of redemption. See "Description of Notes --
Optional Redemption."

REPURCHASE AT OPTION OF In the event of a Change of Control, each holder of Notes
HOLDERS UPON A CHANGE OF may require the Company to repurchase its Notes, in whole or
CONTROL in part, for cash or, at the Company's option, Common Stock
(valued at 95% of the average closing prices for the five
trading days immediately preceding and including the third
trading day prior to the repurchase date) at a repurchase
price of 100% of the principal amount of Notes to be
repurchased, plus accrued interest to the repurchase date.
See "Description of Notes -- Repurchase at Option of Holders
Upon a Change of Control."

USE OF PROCEEDS The Company intends to use the net proceeds to repay
outstanding borrowings under its revolving credit facility.
See "Use of Proceeds."
</TABLE>

6
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<S> <C>
LISTING The Notes will not be listed on any securities exchange or
quoted on the Nasdaq Stock Market. The Underwriters have
advised the Company that they intend to make a market in the
Notes. The Underwriters are not obligated, however, to make
a market in the Notes, and any such market making may be
discontinued at any time at the sole discretion of the
Underwriters without notice. See "Underwriting."

COMMON STOCK The Common Stock is listed on the New York Stock Exchange
under the symbol "IS."
</TABLE>

RISK FACTORS

See "Risk Factors" for certain considerations relevant to an investment in
the securities offered hereby.

CONCURRENT COMMON STOCK OFFERING

Concurrently with the Notes Offering, the Company is offering 7,000,000
shares of its Common Stock (the "Common Stock Offering") by a separate
prospectus. The consummation of the Notes Offering and the Common Stock Offering
are not conditioned upon each other.

7
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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------ FISCAL YEAR
MARCH 27, MARCH 28, PRO FORMA ----------------------------------------------------------
1998 1997 1997(1) 1997 1996 1995 1994 (2) 1993
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues:
Commercial Division
Commercial Staffing..... $ 192,482 $ 159,925 $ 744,210 $ 739,662 $ 602,396 $ 515,454 $ 431,348 $ 347,189
Professional Services..... 222,686 95,913 771,798 675,031 308,687 138,140 99,935 79,691
HealthCare Division (3)... -- 58,583 -- 186,869 228,669 205,719 165,614 143,209
Other Income.............. 1,023 2,364 3,974 6,694 7,399 4,934 7,799 4,171
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
Total Revenues...... 416,191 316,785 1,519,982 1,608,256 1,147,151 864,247 704,696 574,260
Expenses:
Cost of Services.......... 276,673 219,345 1,021,855 1,081,113 795,789 600,169 491,404 402,039
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
Gross Profit............ 139,518 97,440 498,127 527,143 351,362 264,078 213,292 172,221

Selling, General &
Admin................... 95,977 70,779 334,431 363,152 243,652 177,105 137,859 119,763
Licensee Commissions...... 11,607 9,428 43,958 45,091 39,500 37,295 33,796 20,586
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
Results of Operations... 31,934 17,233 119,738 118,900 68,210 49,678 41,637 31,872

Amort. of Intangibles..... 5,321 2,284 20,628 18,492 8,802 6,884 6,041 5,671
Interest Expense (4)(5)... 7,700 275 31,472 24,269 5,696 990 112 1,787
Gain on Sale of HealthCare
Business (6)............ -- -- -- (5,300) -- -- -- --
Merger Expense (7)........ -- -- -- -- 8,600 -- -- --
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------

Earnings Before Taxes... 18,913 14,674 67,638 81,439 45,112 41,804 35,484 24,414

Income Taxes.............. 8,360 6,149 31,255 38,928 22,097 18,071 16,028 11,564
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
Net Earnings............ $ 10,553 $ 8,525 $ 36,383 $ 42,511 $ 23,015 $ 23,733 $ 19,456 $ 12,850
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
Net Earnings Per Share
(8):
Basic................... $ 0.26 $ 0.22 $ 0.93 $ 1.08 $ 0.71 $ 0.77 $ 0.64 $ 0.47
Diluted................. 0.26 0.21 0.90 1.05 0.69 0.76 0.63 0.47
Earnings Per Share
(excl. merger expenses)
(7)(8):
Basic................... $ 0.94
Diluted................. 0.91
Weighted Average Shares
(8):
Basic................... 39,886 39,032 39,305 39,305 32,450 30,804 30,386 27,381
Diluted................. 40,828 39,812 40,407 40,407 33,418 31,324 30,782 27,476
Ratio of Earnings to Fixed
Charges (12)............ 3.01 10.80 2.81 3.66 5.59 13.35 17.41 7.30
OPERATING INFORMATION:
System-wide Sales(9)...... $ 470,612 $ 484,390 $1,743,824 $2,187,409 $1,834,258 $1,494,260 $1,279,339 $1,085,759
</TABLE>

<TABLE>
<CAPTION>
MARCH 27, 1998
-----------------------------------------
AS AS FURTHER
ACTUAL ADJUSTED(10) ADJUSTED (11)
---------- -------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital...................................................... $ 105,244 $ 122,234 $ 242,022
Total Assets......................................................... 1,183,051 1,183,051 1,302,839
Long-term Obligations................................................ 453,248 470,237 360,337
</TABLE>

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(1) Since the beginning of fiscal 1997, Interim has made certain acquisitions
which were accounted for under the purchase method of accounting, and it
disposed of its HealthCare Division on September 26, 1997. The pro forma
consolidated statement of income and sales data give effect to the
acquisitions and the disposition as though they occurred at the beginning of
fiscal 1997. See Notes to Consolidated Financial Statements.

8
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(2) Fiscal year 1994 contained 53 weeks. All other years contained 52 weeks.

(3) Revenues for the HealthCare Division are included through the date of
disposition of September 26, 1997 and do not include certain allocations of
other income.

(4) Interest expense is net of interest income earned by Brandon prior to the
Company's merger with Brandon on May 23, 1996, which was accounted for as a
pooling-of-interests. See note 7.

(5) Prior to September 25, 1993, the Company's working capital and acquisition
financing were provided by H & R Block Inc. ("Block"), which owned 100% of
the Company's issued and outstanding capital stock prior to the IPO. There
was no interest charged on intercompany debt. In conjunction with the IPO,
effective September 25, 1993, Block formalized this arrangement by (i)
providing a revolving credit facility in the amount of $20,000,000 to fund
the operating requirements of the Company; (ii) converting $30,000,000 of
intercompany indebtedness on such date to a term loan and (iii) contributing
$51,289,000 to the capital of the Company. The earnings data for fiscal 1993
give effect to this arrangement as if it occurred at the beginning of the
period. Interest expense has been computed at 6% and income taxes at the
statutory rate.

(6) On September 26, 1997, the Company sold the HealthCare Division. Amount
represents pre-tax gain on sale. Taxes on the gain were $5,272,000. See
Notes to Consolidated Financial Statements page F-11.

(7) Represents fees and expenses related to the merger with Brandon, and the
consolidation and restructuring of the combined companies.

(8) Adjusted to reflect a two-for-one stock split in the form of a 100% stock
dividend paid on September 5, 1997.

(9) System-wide sales is defined as sales of all company-owned, franchised and
licensed offices. Sales data for franchised offices are derived from reports
provided by franchisees, which are not audited. Systemwide sales should not
be considered in isolation or as a substitute for revenues prepared in
accordance with generally accepted accounting principles, or as a measure of
profitability.

(10) Adjusted to reflect the sale by the Company of $150,000,000 aggregate
principal amount of Notes (before deduction of the underwriting discount and
the Company's estimated offering expenses) and the application of the
proceeds therefrom. See "Use of Proceeds."

(11) Further adjusted to reflect the sale by the Company of the 7,000,000 shares
of Common Stock offered hereby at an assumed offering price of $32.813 per
share (before deduction of the underwriting discount and the Company's
estimated offering expenses) and the application of the proceeds therefrom.
See "Use of Proceeds."

(12) The ratio of earnings to fixed charges is calculated by dividing Earnings
Before Taxes less fixed charges by fixed charges. Fixed charges consist of
interest expense and that portion of rental expense that the Company
believes to be representative of interest.

9
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RISK FACTORS

IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING FACTORS IN ADDITION TO THE INFORMATION CONTAINED
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN.

COMPETITIVE MARKETS

The staffing services industry is intensely competitive and highly
fragmented, with few barriers to entry by potential competitors at the local
level. The Company faces significant competition in the markets it serves and
will continue to face significant competition in any geographic markets or
industry sectors that it may enter. In each market in which the Company
operates, it competes for both clients and qualified personnel with other firms
offering such consulting staffing services. The majority of competitors are
significantly smaller than the Company. However, certain of the Company's
competitors have greater marketing and financial resources than the Company.
Many clients use more than one staffing services company and it is common for a
major client to use several staffing services companies at the same time. In
recent years, however, there has been a significant increase in the number of
large potential clients consolidating their staffing services purchases with a
single company or with a small number of companies. The trend to consolidate
staffing services purchases has in some cases made it more difficult for the
Company to obtain business from potential clients who have already contracted to
fill their staffing needs with competitors of the Company. In addition,
consulting and accounting firms have begun to offer services in certain of the
Company's markets. The Company also faces the risk that certain of its current
and prospective clients may decide to provide similar services internally or use
independent contractors. There can be no assurance that the Company will not
encounter increased competition in the future, which could have a material
adverse effect on the Company's results of operations or financial condition.
See "Business--Competition".

ABILITY TO GROW AND MANAGE GROWTH

The Company has experienced significant growth in the past which has
resulted from the acquisition of existing businesses, new office openings, new
service offerings, the further development of existing offices, industry trends
towards the increasing use of temporary and contract personnel and favorable
economic conditions. The ability of the Company to continue to grow and to
successfully manage its growth will depend on a number of factors, including the
continuation of such industry trends, the availability of suitable acquisition
candidates on reasonable terms, the effective integration of newly acquired
companies, the ability of the Company to adapt to new geographic and human
resources services markets and the ability to successfully recruit and train
staff. There can be no assurance that the Company will be able to maintain or
effectively manage growth, establish and expand its market presence or continue
to identify suitable acquisition candidates or complete the acquisitions on
terms favorable to the Company. In addition, there can be no assurance that any
acquired businesses will achieve anticipated financial results. Furthermore,
acquisitions involve a number of special risks, including diversion of
management's attention, the potential failure to retain key personnel at an
acquired company, risks associated with unanticipated events or liabilities and
amortization of goodwill or other acquired intangible assets, some or all of
which could have a material adverse effect on the Company's results of
operations or financial condition. See "Business--Business Strategy" and
"Business--Acquisitions".

FLUCTUATIONS IN LOCAL ECONOMIES

The Company currently operates businesses in 12 countries worldwide. In
fiscal 1997 on a pro forma basis, approximately 78.5% of revenues and
approximately 50.8% of operating profit were generated in North America, 19.2%
of revenues and 44.6% of operating profit were generated in Europe, and 2.3% of
revenues and 4.6% of operating profit were generated in the Asia Pacific region.
Historically, the

10
<PAGE>
general level of economic activity in a country has significantly affected the
demand for staffing services in that country. An economic downturn in a country
or a region in which the Company operates may adversely affect the demand for
the Company's staffing services in that country or region and could have a
material adverse effect on the Company's results of operations or financial
condition. During such downturns, the use of temporary and contract employees
usually is curtailed, the recruitment of permanent employees is reduced and the
Company may face increased competitive pricing pressures. As economic activity
increases, temporary and contract employees often are added to the workforce
before permanent employees are hired. During periods of increased economic
activity and generally higher levels of employment in a particular country or
region, the competition among staffing firms for qualified personnel in that
country or region becomes even greater. There can be no assurance that during
these periods the Company will be able to recruit the personnel necessary to
fill its clients' needs.

BUSINESS RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS; CURRENCY FLUCTUATIONS

Operations in the Company's markets are subject to risks inherent in
international business activities, including, in particular, varying economic
and political conditions, cultures and business practices in different countries
or regions, overlapping or differing tax structures, compliance with a variety
of accounting and reporting requirements and changing and, in some cases,
complex or ambiguous foreign laws and regulations. Fluctuations in the exchange
rates between the U.S. dollar and the currencies of the other countries in which
the Company operates will affect the results of the Company's international
operations reported in U.S. dollars. See "--Fluctuations in Local Economies".

DEPENDENCE ON AVAILABILITY OF QUALIFIED PERSONNEL

The Company depends upon its ability to attract qualified personnel who
possess the skills and experience necessary to meet the staffing requirements of
its clients. The Company must continually evaluate and upgrade its base of
available qualified personnel to keep pace with changing client needs and
emerging technologies. Competition for individuals with proven professional or
technical skills is intense, and demand for such individuals is expected to
remain very strong for the foreseeable future. In particular, the Company's IT
operations are dependent upon the recruitment of qualified personnel, many of
whom are from outside the U.S. Government regulations currently impose a quota
on the number of foreign persons having this expertise who are permitted to work
in the U.S.

RELIANCE ON KEY PERSONNEL

The Company is highly dependent on its management. The continued success of
the Company will depend in large part on the abilities and continued services of
Raymond Marcy, its Chairman, President and Chief Executive Officer, and certain
other officers and key employees. The loss of Mr. Marcy or other officers and
key employees could have a material adverse effect on the Company's operations.

INFORMATION TECHNOLOGY TRENDS

Growth in the use of flexible staffing in the IT area in recent years has
been driven largely by rapid technological advances. As the sophistication and
complexity of business information systems increase, and as the general
corporate trend toward downsizing continues, businesses are increasingly turning
to specialized, outside technical personnel to support their IT operations. The
Company's success in the IT area depends in large part on its ability to keep
pace with existing technology, predict new technological advancements and
recruit and train based on these trends.

YEAR 2000 ISSUE

The Company believes that it has prepared its computer systems and related
software to accommodate data sensitive information relating to the year 2000.
The Company expects that any additional costs

11
<PAGE>

related to ensuring such systems and software to be year 2000-compliant will not
be material to the financial condition or results of operations of the Company.
In addition, the Company is discussing with its vendors and customers the
possibility of any difficulties which may affect the Company as a result of its
vendors and customers ensuring that their computer systems and software are year
2000-compliant. To date, no significant concerns have been identified. However,
there can be no assurance that no year 2000 related computer operating problems
or expenses will arise with the Company's computer systems and software or in
the computer systems and software of the Company's vendors and customers. The
Company's IT Consulting Group performs work for clients to assist them in
modifying their computer systems and software to make them year 2000-compliant.
Generally, this work is performed under the direction and supervision of the
client and without warranties as to results or usability. Accordingly, the
Company does not believe that it will incur any material liabilities to clients
for its work on their year 2000 projects.

EMPLOYER RISKS

Flexible staffing providers employ and place people in the workplace of
other businesses. Attendant risks of such activity which could increase the
Company's cost of doing business include possible claims of discrimination and
harassment, employment of illegal aliens, errors and omissions by the Company's
flexible staff, particularly for the acts of temporary professionals (e.g.,
accountants and attorneys), misuse or misappropriation of client funds or
proprietary information and other similar claims. While the Company maintains
insurance coverage for general liability, errors and omissions and employee
theft, such insurance coverage may not be adequate in scope or amount to cover
any such liability. A failure of any Company personnel to observe the Company's
policies and guidelines intended to reduce exposure to these risks, relevant
client policies and guidelines, or applicable supranational, national, regional
or local laws, rules or regulations, or other circumstances that cannot be
predicted, could result in negative publicity and the payment by the Company of
monetary damages or fines, or have other material adverse effects upon the
Company. In addition, the Company is exposed to potential claims with respect to
the placement process. Because of legal constraints and considerations in
certain jurisdictions, the Company has found it increasingly difficult to verify
candidates' backgrounds. Although the Company historically has not had any
significant problems arising from the matters discussed above, there can be no
assurance that the Company will not experience such problems in the future.

INCREASED COSTS FROM GOVERNMENT REGULATION

In conducting its business, the Company is required to pay a number of
payroll and related costs and expenses, including unemployment taxes, workers'
compensation and insurance and medical insurance for its personnel. Unemployment
insurance premiums paid by employers typically increase during periods of
increased levels of unemployment. Workers' compensation costs have increased
over the past decade and may increase in the future as states have raised
benefit levels and liberalized allowable claims. Future earnings could be
adversely affected if the Company is not able to increase the fees charged to
its clients to absorb the increased costs related to unemployment insurance or
workers' compensation benefits. The Company's costs could also increase as a
result of regulatory reforms, such as universal mandatory health insurance or
the possible imposition of additional requirements and restrictions relating to
the placement of candidates. It is uncertain whether any such proposals will be
adopted and how any such proposals, if adopted, would affect the Company.
Internationally, regulatory requirements at supranational, national, regional
and local levels vary substantially and frequently change. There can be no
assurance that the Company will be able to adapt to future regulatory changes
made by the regulatory authorities of any jurisdiction in which the Company
conducts its business.

12
<PAGE>
SUBORDINATION

The Notes will be unsecured and subordinated in right of payment in full to
all existing and future Senior Debt of the Company. As a result of such
subordination, in the event of the Company's liquidation or insolvency, payment
default with respect to Senior Debt, a covenant default with respect to Senior
Debt, or upon acceleration of the Notes due to an event of default, the assets
of the Company will be available to pay obligations on the Notes only after all
Senior Debt has been paid in full, and there may not be sufficient assets
remaining to pay amounts due on any or all of the Notes then outstanding. The
Company may from time to time incur indebtedness constituting Senior Debt. The
Notes are also effectively subordinated in right of payment to all indebtedness
and other liabilities, including trade payables, of the Company's subsidiaries.
The Indenture does not prohibit or limit the incurrence of Senior Debt or other
indebtedness and other liabilities by the Company or its subsidiaries. The
incurrence of additional indebtedness and other liabilities by the Company or
its subsidiaries could adversely affect the Company's ability to pay its
obligations on the Notes. In addition, the cash flow and ability of the Company
to service debt, including the Notes, may in the future become dependent in part
upon the earnings from the business conducted by the Company through
subsidiaries and distribution of those earnings, or upon loans or other payments
of funds by those subsidiaries to the Company. As of March 27, 1998, before
giving effect to the offering of the Notes and the application of the net
proceeds thereof, the Company would have had $571.0 million of Senior Debt. See
"Description of Notes-- Subordination."

LIMITATIONS OF REPURCHASE OF NOTES

Upon a Change of Control, each holder of Notes will have the right, at the
holder's option, to require the Company to repurchase all or a portion of such
holder's Notes. If a Change of Control was to occur, there can be no assurance
that the Company would have sufficient funds to pay the repurchase price for all
Notes tendered by the holders thereof. The Company may elect, subject to certain
conditions, to make such payment using shares of Common Stock. In addition, the
Company's repurchase of Notes as a result of the occurrence of a Change of
Control may be prohibited or limited by, or create an event of default under,
the terms of agreements related to borrowings which the Company may enter into
from time to time, including agreements relating to Senior Debt. See
"Description of Notes--Repurchase at Option of Holders Upon a Change of
Control."

ABSENCE OF PUBLIC MARKET FOR THE NOTES

The Notes will be a new issue of securities with no established trading
market. Although the Underwriters have advised the Company that they intend to
make a market in the Notes, they are not obligated to do so, and any such market
making may be discontinued at any time at the sole discretion of any such
Underwriter without notice. There can be no assurance that an active market for
the Notes will develop and continue upon completion of the Notes Offering or
that the market price of the Notes will not decline. Various factors could cause
the market price of the Notes to fluctuate significantly, including changes in
prevailing interest rates or changes in perceptions of the Company's
creditworthiness. The trading price of the Notes also could be significantly
affected by the market price of the Common Stock, which could be subject to wide
fluctuations in response to a variety of factors, including quarterly variations
in operating results and general economic and market conditions. The Notes will
not be listed on any securities exchange or quoted on the New York Stock
Exchange. See "Underwriting."

13
<PAGE>
USE OF PROCEEDS

The proceeds of the Notes Offering, before giving effect to the Company's
estimated offering expenses and the underwriting discount, are expected to be
approximately $150 million (approximately $172.5 million if the Underwriters'
over-allotment option is exercised in full). Approximately $259.9 million of the
net proceeds of the Notes Offering and the Common Stock Offering, if
consummated, will be used to repay borrowings under the Company's existing
credit facilities, with the remainder to be used for general corporate purposes,
including future acquisitions. The effective interest rate of the borrowings
under all of the credit facilities is 7.2%, including the effects of certain
interest rate swaps. Following the Notes Offering, the Company intends to
maintain a certain amount of indebtedness on its balance sheet which is
denominated in British pounds sterling.

CONCURRENT COMMON STOCK OFFERING

Concurrently with the Notes Offering, the Company is offering 7,000,000
shares of Common Stock by a separate prospectus. The consummation of the Notes
Offering and the Common Stock Offering are not conditioned upon each other. See
"Use of Proceeds."

14
<PAGE>
PRICE RANGE OF COMMON STOCK

Since August 7, 1996, the Company's Common Stock has been traded on the New
York Stock Exchange under the symbol "IS". Prior thereto, the Common Stock
traded on the Nasdaq National Market under the symbol "INTM". The following
table sets forth for the periods indicated the high and low closing prices of
the Common Stock as reported by the Nasdaq National Market and the New York
Stock Exchange.

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL 1996
First Quarter............................................ $ 20.375 $ 17.125
Second Quarter........................................... 25.125 17.375
Third Quarter............................................ 22.000 18.250
Fourth Quarter........................................... 22.813 17.000

FISCAL 1997
First Quarter............................................ 21.563 17.125
Second Quarter........................................... 21.438 17.563
Third Quarter............................................ 25.625 21.750
Fourth Quarter........................................... 31.000 23.625

FISCAL 1998
First Quarter............................................ 33.750 23.250
Second Quarter (through May 4, 1998)..................... 34.188 30.750
</TABLE>

The closing price of the Common Stock on May 4, 1998 was $32.813.

DIVIDEND POLICY

No cash dividend or other cash distribution with respect to the Company's
Common Stock has ever been paid by the Company. The Company currently intends to
retain any earnings for use in its business and does not anticipate paying any
cash dividends in the foreseeable future.

15
<PAGE>
CAPITALIZATION

The following table sets forth the cash and capitalization of the Company as
of March 27, 1998 and (i) as adjusted to reflect the sale of $150,000,000
principal amount of Notes and (ii) as further adjusted to reflect the sale of
7,000,000 shares of Common Stock by the Company at an assumed offering price of
$32.813 per share (the last reported sales price of the Common Stock on the New
York Stock Exchange on May 4, 1998) and the application of the gross proceeds
therefrom, in each case before giving effect to the Company's estimated offering
expenses and the underwriting discount. See "Use of Proceeds"; "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Financing"; and "Concurrent Common Stock Offering". The table should
be read in conjunction with the selected consolidated financial and operating
data, the consolidated financial statements and the related notes thereto
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 27, 1998
----------------------------------
<S> <C> <C> <C>
AS AS FURTHER
ACTUAL ADJUSTED ADJUSTED
--------- ----------- ----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Cash, cash equivalents.................................... $ 24,579 $ 24,579 $ 144,367
--------- ----------- ----------
--------- ----------- ----------
Current portion of long-term debt......................... $ 33,895 $ 16,905 $ 16,905
Long-term debt............................................ 453,248 470,238 360,337
--------- ----------- ----------
Total debt............................................ $ 487,143 $ 487,143 $ 377,242
Stockholders' equity:
Preferred stock, par value $.01 per share; 2,500,000
shares authorized; none issued or outstanding......... -- -- --
Common stock, par value $.01 per share; 100,000,000
shares authorized; 39,976,969 shares issued and
outstanding (actual); 46,976,969 (as
adjusted)(1)(2)....................................... 400 400 470
Additional paid-in capital.............................. 263,183 263,183 492,801
Retained earnings....................................... 225,116 225,116 225,116
--------- ----------- ----------
Total stockholders' equity............................ $ 488,699 $ 488,699 $ 718,387
--------- ----------- ----------
Total capitalization, including short-term debt....... $ 975,842 $ 975,842 $1,095,629
--------- ----------- ----------
--------- ----------- ----------
</TABLE>

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

(1) An additional and 3,409,869 shares of Common Stock are reserved for
issuance upon the conversion of the Notes and the exercise of stock options
that have been granted under the Company's stock option plans, respectively.

(2) The number of authorized shares of common stock gives effect to the approval
of the proposal to be voted on by the Company's stockholders on May 7, 1998
to amend the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock to 100,000,000 shares.

16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The selected consolidated financial statement data for each of the three
years in the period ended fiscal 1997 and as of the end of fiscal 1997 and
fiscal 1996 are derived from, and are qualified by reference to, the Company's
audited consolidated financial statements and related notes thereto which,
together with the related report of Deloitte & Touche LLP, independent auditors,
are included elsewhere in this Prospectus. The selected consolidated financial
statement data for each of fiscal 1994 and fiscal 1993 and as of the end of
fiscal 1995, fiscal 1994 and fiscal 1993 are derived from audited consolidated
financial statements of Interim and Brandon not included herein, and have been
restated consistent with pooling-of-interests treatment. The pro forma data are
derived from the pro forma data contained in the notes to the consolidated
financial statements which give effect to certain acquisitions and a disposition
made by the Company since the beginning of fiscal 1997. The selected
consolidated financial statement data for the three month periods ended March
27, 1998 and March 28, 1997 are derived from the Company's unaudited
consolidated financial statements and, in the opinion of the Company, include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of such information. The following information should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------ FISCAL YEAR
MARCH 27, MARCH 28, PRO FORMA -------------------------------------------------------
1998 1997 1997(1) 1997 1996 1995 1994 (2) 1993
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues:
Commercial Division
Commercial Staffing.......... $ 192,482 $ 159,925 $ 744,210 $ 739,662 $ 602,396 $ 515,454 $ 431,348 $ 347,189
Professional Services........ 222,686 95,913 771,798 675,031 308,687 138,140 99,935 79,691
HealthCare Division(3)......... -- 58,583 -- 186,869 228,669 205,719 165,614 143,209
Other Income................... 1,023 2,364 3,974 6,694 7,399 4,934 7,799 4,171
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Total Revenues............. 416,191 316,785 1,519,982 1,608,256 1,147,151 864,247 704,696 574,260
Expenses:
Cost of Services............... 276,673 219,345 1,021,855 1,081,113 795,789 600,169 491,404 402,039
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Gross Profit................. 139,518 97,440 498,127 527,143 351,362 264,078 213,292 172,221
Selling, General & Admin....... 95,977 70,779 334,431 363,152 243,652 177,105 137,859 119,763
Licensee Commissions........... 11,607 9,428 43,958 45,091 39,500 37,295 33,796 20,586
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Results of Operations........ 31,934 17,233 119,738 118,900 68,210 49,678 41,637 31,872
Amort. Of Intangibles.......... 5,321 2,284 20,628 18,492 8,802 6,884 6,041 5,671
Interest Expense (4)(5)........ 7,700 275 31,472 24,269 5,696 990 112 1,787
Gain on Sale of HealthCare
Business (6)................. -- -- -- (5,300) -- -- -- --
Merger Expense (7)............. -- -- -- -- 8,600 -- -- --
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Earnings Before Taxes........ 18,913 14,674 67,638 81,439 45,112 41,804 35,484 24,414
Income Taxes................... 8,360 6,149 31,255 38,928 22,097 18,071 16,028 11,564
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Net Earnings................. $ 10,553 $ 8,525 $ 36,383 $ 42,511 $ 23,015 $ 23,733 $ 19,456 $ 12,850
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
----------- ----------- ----------- ---------- ---------- --------- --------- ---------
Net Earnings Per Share (8):
Basic........................ $ 0.26 $ 0.22 $ 0.93 $ 1.08 $ 0.71 $ 0.77 $ 0.64 $ 0.47
Diluted...................... 0.26 0.21 0.90 1.05 0.69 0.76 0.63 0.47
Earnings Per Share:
(excl. merger expenses)(7)(8):
Basic........................ $ 0.94
Diluted...................... 0.91
Weighted Average Shares (8):
Basic........................ 39,886 39,032 39,305 39,305 32,450 30,804 30,386 27,381
Diluted...................... 40,828 39,812 40,407 40,407 33,418 31,324 30,782 27,476
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA:
Working Capital................................... $ 73,210 $ 169,283 $ 67,526 $ 81,997 $ 78,898
Total Assets(9)................................... 1,091,734 512,490 424,489 275,364 242,925
Long-term Obligations............................. 379,197 -- 60,000 -- 30,000

OPERATING INFORMATION:
System-wide Sales(10)............................. $2,187,409 $1,834,258 $1,494,260 $1,279,339 $1,085,759
</TABLE>

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

(1) Since the beginning of fiscal 1997, Interim has made certain acquisitions
which were accounted for under the purchase method of accounting, and it
disposed of its HealthCare Division on September 26,1997. The pro forma
consolidated statement of income and sales data give effect to the
acquisitions and the disposition as though they occurred at the beginning of
fiscal 1997. See Notes to Consolidated Financial Statements.

(2) Fiscal year 1994 contained 53 weeks. All other years contained 52 weeks.

(3) Revenues for the HealthCare Division are included through the date of
disposition of September 26, 1997 and do not include certain allocations of
other income.

(4) Interest expense is net of interest income earned by Brandon prior to the
Company's merger with Brandon on May 23, 1996, which was accounted for as
pooling-of-interests. See note 7.

(5) Prior to September 25, 1993, the Company's working capital and acquisition
financing were provided by Block. There was no interest charged on
intercompany debt. In conjunction with the IPO, effective September 25,
1993, Block formalized this arrangement by (i) providing a revolving credit
facility in the amount of $20,000,000 to fund the operating requirements of
the Company; (ii) converting $30,000,000 of intercompany indebtedness on
such date to a term loan and (iii) contributing $51,289,000 to the capital
of the Company. The earnings data for fiscal 1993 give effect to this
arrangement as if it occurred at the beginning of the period. Interest
expense has been computed at 6% and income taxes at the statutory rate.

(7) Represents fees and expenses related to the merger with Brandon, and the
consolidation and restructuring of the combined companies.

(8) Adjusted to reflect a two-for-one stock split in the form of a 100% stock
dividend paid on September 5, 1997.

(9) Certain reclassifications have been made to prior periods to conform to
current year presentation.

(10) System-wide sales is defined as sales of all company-owned, franchised and
licensed offices. Sales data for franchised offices are derived from reports
provided by franchisees, which are not audited. Systemwide sales should not
be considered in isolation or as a substitute for revenues prepared in
accordance with generally accepted accounting principles, or as a measure of
profitability.

18
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
"SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA" AND NOTES THERETO INCLUDED
ELSEWHERE IN THIS PROSPECTUS AND THE CONSOLIDATED FINANCIAL STATEMENTS AND
RELATED NOTES INCLUDED ELSEWHERE IN THIS PROSPECTUS.

INTRODUCTION

The Company is a worldwide leader in recruiting, assessing and deploying
talent for a wide variety of businesses. Through flexible staffing, recruitment,
search, consulting and outplacement services, the Company provides professionals
in the fields of information technology, finance, law, manufacturing and human
resources, as well as clerical, administrative and light industrial staffing.

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services in the areas of information technology,
legal, accounting, banking and finance and human resources, and (ii) the
Commercial Staffing Group, which offers workforce management and clerical,
administrative and light industrial staffing services. The Professional Services
Group and the Commercial Staffing Group each represented approximately 50% of
the Company's pro forma revenues in fiscal 1997. The Company believes that it is
one of the five largest worldwide providers of Professional Services, and one of
the ten largest worldwide providers of staffing services, based on revenues.

RESULTS OF OPERATIONS

The following table sets forth operational results as a percentage of total
revenues for the periods indicated:

<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------
MARCH 27, MARCH 28, PRO FORMA
1998 1997 1997 1997 1996 1995
------------- ------------- ------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Professional Services.......... 53.5% 30.3% 50.8% 42.0% 26.9% 16.0%
Commercial Staffing............ 46.5 50.9 49.2 46.2 52.9 60.0
HealthCare Division............ -- 18.8 -- 11.8 20.2 24.0
----- ----- ----- --------- --------- ---------
Total Revenues............. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Services................. 66.5 69.2 67.2 67.2 69.4 69.4
----- ----- ----- --------- --------- ---------
Gross Profit..................... 33.5 30.8 32.8 32.8% 30.6% 30.6%
Selling, General &
Administrative................. 23.1 22.3 22.0 22.6 21.2 20.5
Licensee Commissions............. 2.8 3.0 2.9 2.8 3.4 4.3
----- ----- ----- --------- --------- ---------
Results from Operations.......... 7.6% 5.5% 7.9% 7.4% 6.0% 5.8%
Merger Expense................... -- -- -- -- 0.8 --
Gain on Sale of the HealthCare
Division....................... -- -- -- (0.3) -- --
Amortization of Intangibles...... 1.3 0.7 1.4 1.2 0.8 0.8
Interest......................... 1.8 0.1 2.1 1.5 0.5 0.1
Taxes............................ 2.0 2.0 2.0 2.4 1.9 2.1
----- ----- ----- --------- --------- ---------
Net Earnings..................... 2.5% 2.7% 2.4% 2.6% 2.0% 2.8%
----- ----- ----- --------- --------- ---------
----- ----- ----- --------- --------- ---------
Net Earnings (excluding merger
expenses)...................... 2.5% 2.7% 2.4% 2.6% 2.7% 2.8%
----- ----- ----- --------- --------- ---------
----- ----- ----- --------- --------- ---------
</TABLE>

19
<PAGE>

FIRST QUARTER 1998 COMPARED TO 1997

Revenues for the quarter increased 31.4% to $416.2 million from $316.8
million for the first quarter of the prior year. Excluding revenues from the
HealthCare Division, revenues increased 61.9% to $416.2 million from $257.1
million. Professional Services revenues increased 132.2% reflecting the strong
internal growth primarily in IT services as well as acquisitions of Michael Page
in April 1997 and AIM in March 1997 and several smaller acquisitions in the
first quarter of 1998. Excluding these acquisitions, Professional Services
revenues increased 34.9%. Commercial Staffing revenues increased 20.4%
reflecting the continued expansion of the Interim On-Premise program, increased
demand for traditional commercial staffing services and the acquisition of Crone
Corkill, a UK-based commercial staffing company in March 1998.

Gross profit increased 43.2% to $139.5 million compared with $97.4 million
for the same period in 1997. Gross profit margin increased to 33.5% from 30.8%
in the first quarter of 1997. This increase was principally due to an increase
in the amount of Professional Services revenues as a percentage of total
revenues. Excluding the HealthCare Division, Professional Services revenues
represented 37.3% of first quarter 1997 total revenues compared with 53.5% of
total revenues in 1998. Professional Services generate higher gross profit rates
than Commercial Staffing. In addition, higher pricing in IT helped to increase
the gross profit rate in 1998.

Selling, general and administrative expenses increased 35.6% to $96.0
million from $70.8 million for the same period in 1997. Selling, general and
administrative expenses as a percentage of revenues were 23.1% compared with
22.3% for the same period in 1997. Higher expenses resulted from the growth in
Professional Services, as these businesses tend to have higher selling, general
and administrative costs as a percentage of revenues compared with Commercial
Staffing.

Licensee commissions increased 23.1% to $11.6 million from $9.4 million for
the same period last year. Licensee commissions as a percentage of revenues
decreased to 2.8% from 3.0% due to branch revenues growing at a faster rate than
licensee revenues.

Amortization expenses for the period increased 133% from $2.3 million to
$5.3 million reflecting the increase in intangible assets arising from
acquisitions, primarily Michael Page.

Interest expense increased to $7.7 million from $0.3 million for the same
period last year. This resulted from increased borrowings for acquisitions,
primarily Michael Page. The Company had average borrowings outstanding during
the first quarter of 1998 of $444.4 million at an average rate of interest
(including the effects of interest rate swaps) of 7.2% compared with $18.5
million outstanding during the first quarter of 1997 at an average rate of
interest of 7.5%.

The effective tax rate for the first quarter of 1998 was 44.2% compared with
41.9% for the same period last year. This increase in the effective tax rate
resulted from higher levels of non-deductible intangible amortization in 1998
due to the Michael Page acquisition.

Net earnings for the quarter increased 23.8% to $10.6 million (or $0.26 per
diluted share) compared with $8.5 million (or $0.21 per diluted share) for the
same period last year. This represents a 23.8% increase in per share earnings.
The weighted average number of shares used in the per share calculation (as
adjusted for the dilutive impact of common stock equivalents) increased to
40,828,000 from 39,812,000 last year.

FISCAL 1997 COMPARED TO 1996

REVENUES. Revenues in 1997 increased 40.2% to $1,608.3 million from
$1,147.2 million in the prior year. Professional Services revenues increased
118.7% reflecting strong internal growth and the Michael Page and AIM
acquisitions. Excluding these acquisitions, Professional Services revenues
increased 31.0%. Commercial Staffing revenues increased 22.8% reflecting the
expansion of the Interim On-Premise program, an increase in the number of
offices and increased business in existing offices.

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HealthCare Division revenues decreased due to the sale of the HealthCare
Division at the end of the third quarter of 1997.

GROSS PROFIT. Gross profit increased 50.0% to $527.1 million from $351.4
million in the prior year. Gross profit margin was 32.8% compared with 30.6% in
fiscal 1996. This increase was principally due to the acquisition of the
higher-margin business of Michael Page, partially offset by the elimination of
higher gross profit generated by the HealthCare Division which was sold at the
end of the third quarter of 1997.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 49.0% to $363.2 million from $243.7 million in
the prior year period. Selling, general and administrative expenses as a
percentage of revenues were 22.6% compared to 21.2% a year ago due to the higher
costs associated with Professional Services. These higher gross margin
businesses have higher operating expenses than the Company's Commercial Staffing
business.

LICENSEE COMMISSIONS. Licensee commissions increased 14.2% to $45.1 million
from $39.5 million in the prior year period and is consistent with the growth in
licensee revenues. Licensee commissions as a percentage of total revenues
decreased from 3.4% to 2.8% due to licensee revenue becoming a smaller portion
of overall revenue.

AMORTIZATION OF INTANGIBLES. Amortization expense increased 110.1% to $18.5
million from $8.8 million in the prior year period reflecting the increase in
intangible assets arising from acquisitions, primarily Michael Page.

INTEREST EXPENSE. Interest expense increased 326.1% to $24.3 million from
$5.7 million in 1996. This resulted from increased borrowings for acquisitions,
primarily Michael Page. The Company had average borrowings outstanding during
1997 of $361.2 million and accrued an average interest rate of 6.9%. See
"--Liquidity and Capital Resources--Financing".

TAXES ON EARNINGS. The effective tax rate for 1997 was 47.8% compared with
49.0% last year. The 1997 effective rate includes an approximate 100% effective
rate on the $5.3 million HealthCare Division sale gain due to a lower tax basis
than book basis in this business. Last year's high rate resulted from a large
portion of the 1996 merger expense being nondeductible. The effective tax rates
excluding these two unusual items were 44.2% and 43.0% for the years ended
December 26, 1997 and December 27, 1996, respectively. The increase in the
effective rate, excluding unusual items, resulted from higher levels of
non-deductible goodwill in 1997.

NET EARNINGS. Net earnings excluding merger expenses increased 39.1% to
$42.5 million ($1.05 per diluted share) from $30.6 million ($0.91 per diluted
share) in the prior year period. This represents a 15.4% increase in per share
earnings. Including merger expenses, net earnings increased 84.7% to $42.5
million ($1.05 per diluted share) from $23.0 million ($0.69 per diluted share)
in the prior year period. The weighted average number of shares used in the per
share calculation (as adjusted for the dilutive impact of common stock
equivalents) increased to 40,407,000 from 33,418,000 in the prior year period,
primarily due to the additional shares issued as a result of the public offering
on October 17, 1996.

FISCAL 1996 COMPARED TO 1995

REVENUES. Revenues in 1996 increased 32.7% to $1,147.2 million from $864.2
million in the prior year. Professional Services revenues increased 123.5%
reflecting significant IT acquisitions and internal growth. Commercial Staffing
revenues increased 16.9% reflecting the expansion of the Interim On-Premise
program and an increase in the number of offices and services provided.
HealthCare Division revenues increased 11.3% due to increases in the number of
offices and expansion of occupational health and physicians services.

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GROSS PROFIT. Gross profit increased 33.1% to $351.4 million from $264.1
million in the prior year period. Gross profit margin was 30.6%, the same as
1995. Although the Company added revenues of higher gross profit business
through acquisitions and increases in the Professional Services, this was offset
by a decline in franchise royalties as a percent of total Company revenue and an
increase in the percentage of Commercial Staffing, which generally have lower
gross profit margins.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 37.6% to $243.7 million from $177.1 million in
the prior year period. Selling, general and administrative expenses as a
percentage of revenues were 21.2% compared with 20.5% in 1995 due to the higher
relative costs associated with Professional Services.

LICENSEE COMMISSIONS. Licensee commissions increased 5.9% to $39.5 million
from $37.3 million in the prior year period and consistent with the growth in
licensee revenues. Licensee commissions as a percentage of revenues decreased
from 4.3% to 3.4% due to the Company purchasing several license operations, one
licensee converting to a franchise and slower general growth of licensee
revenues compared with branch revenue growth.

AMORTIZATION OF INTANGIBLES. Amortization expense increased 27.9% to $8.8
million from $6.9 million in the prior year period reflecting the increase in
intangible assets arising from acquisitions.

INTEREST EXPENSE. Interest expense increased to $5.7 million from $1.0
million in the prior year; average borrowings during the year were $102.2
million and the Company accrued an average effective interest rate of 6.2%
compared to average borrowings of $22.3 million and an average effective
interest rate of 6.6% in 1995.

TAXES ON EARNINGS. The effective tax rate of 49.0% in 1996 resulted from a
large portion of merger expenses, recorded in the first half of 1996, being
nondeductible. The effective tax rate, excluding the effects of nonrecurring
merger expenses, was 43.0% compared with 43.2% in the prior year. The decline in
the effective tax rate is due primarily to higher earnings in proportion to the
level of nondeductible intangibles.

NET EARNINGS. Net earnings excluding merger expenses increased 28.8% to
$30.6 million ($0.91 per diluted share) from $23.7 million ($0.76 per diluted
share) in the prior year period. This represents a 19.7% increase in per share
earnings. Including merger expenses, net earnings decreased 3.0% to $23.0
million ($0.69 per diluted share) from $23.7 million ($0.76 per diluted share)
in the prior year period. The weighted average number of shares used in the per
share calculation (as adjusted for the dilutive impact of common stock
equivalents) increased to 33,418,000 from 31,324,000 in the prior year period,
primarily due to the additional shares issued as a result of the secondary
public offering on October 17, 1996.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW

Historically, the Company has financed its operations through cash generated
by operating activities and bank lines of credit. The Company's principal uses
of cash are funding acquisitions, capital expenditures, working capital needs
and repayment of debt. The nature of the Company's business requires payment of
wages to its flexible staff on a weekly, or bi-weekly basis, while payments from
clients are generally received 30-60 days after billing.

Cash provided by operating activities in 1997 was $57.8 million compared
with cash used by operations in 1996 of $6.1 million and cash provided by
operations in 1995 of $6.6 million. Higher operating cash flow in 1997 resulted
from increased earnings, amortization and depreciation combined with an increase
in accounts payable and accrued liabilities. Reduced cash flow from operating
activities

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in both 1996 and 1995 resulted from lower levels of earnings, depreciation and
amortization. Operating cash flow in 1996 was also impacted by higher receivable
levels due to increases in days sales outstanding and $7.6 million (after-tax)
of merger expenses paid.

Net cash provided by operating activities was $0.8 million and $8.0 million
in the first quarter of 1998 and 1997, respectively. Lower cash flow from
operating activities in 1998 resulted from a reduction in accounts payable and
accrued liabilities during 1998 compared with an increase in 1997. The increase
in 1997 was partially offset by higher other assets due to the increase in a
long-term receivable with a new major customer contract. The decrease in 1998
resulted from the timing of the Company's 1997 fiscal year-end, and tax and
annual incentive payments in the first quarter of 1998.

Investing activities used $474.7 million in 1997 primarily due to the
acquisition of Michael Page partially offset by the proceeds from the sale of
the HealthCare Division. The Company obtained funds from borrowing under a
multi-currency credit facility for the acquisition of Michael Page. See further
discussion in Financing below. Proceeds from the sale of the HealthCare
Division, net of transaction costs, and operating cash flow were used to reduce
these borrowings, leaving $413.0 million of debt outstanding at December 26,
1997. Investing activities in 1996 and 1995 included $12.0 million and $99.0
million, respectively, of other acquisitions, the most significant of which was
the acquisition of the Computer Power Group for $71 million in 1995.

Investing activities in 1997 included $24.9 million of capital expenditures
compared with $33.0 million in 1996 and $11.3 million in 1995. Capital
expenditures in 1997 were for new computer hardware and software, new office
furniture and fixtures and the completion of the Company's corporate
headquarters. Capital expenditures in 1996 were for the expansion of the
Company's headquarters and to upgrade and expand the area of information
technology. The Company anticipates continued expenditures to develop and
upgrade many of its information technology systems. Management expects
expenditures in 1998 to approximate 1997 levels.

Investing activities used $67.0 million and $117.9 million in the first
quarter of 1998 and 1997, respectively, primarily related to acquisitions. In
the first quarter of 1998, the Company acquired several Professional Services
businesses in accounting, banking and finance and completed the Crone Corkill
acquisition. In the first quarter of 1997, the Company acquired AIM and funded
the initial investments in Michael Page.

On October 17, 1996, the Company completed a public offering of 8.5 million
shares (7.9 million shares sold by the Company) of common stock at $21.63 per
share. Net proceeds to the Company were approximately $163.1 million, of which
$131.7 million was used to repay borrowings under the Company's credit
facilities.

The Company intends to continue to make strategic acquisitions to grow its
business. Funding for these acquisitions will come from: (i) internally
generated funds; (ii) borrowings on the Company's credit facility and (iii)
raising additional capital.

FINANCING

The Company has available a $535.9 million multi-currency credit agreement
entered into as of May 1, 1997 and amended as of June 2, 1997. Outstanding
borrowings at December 26, 1997 under this agreement were a $176.7 million term
loan, a $219.5 million revolving loan and $16.8 million in loan notes to prior
shareholders of Michael Page. The term loan is denominated in U.S. dollars while
the revolving loans are denominated in U.S. dollars and British pounds sterling.
Borrowings under this facility are unsecured. The credit facility is available
to fund the Company's acquisitions, to supply working capital and to provide for
general corporate needs. Interest rates on amounts outstanding under the
Company's credit facilities are based on LIBOR plus a variable margin. The
facilities contain customary covenants, which include the maintenance of certain
financial ratios including minimum net

23
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worth, restrictions on the incurrence of liens and additional indebtedness. In
addition, the Company has established short-term, unsecured, uncommitted lines
of credit with certain banks. These lines of credit are based on LIBOR and are
available to fund the Company's short-term capital requirements. No amounts were
outstanding under these agreements at December 26, 1997.

There was approximately $120.0 million available for future borrowings under
these agreements at December 26, 1997.

IMPACT OF THE YEAR 2000 ISSUE

The year 2000 issue is the result of computer applications being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in similar normal business activities.

Based on a recent assessment, the Company determined that it will be
required to upgrade certain application systems to ensure operability after the
year 1999. However, the Company's most significant internally developed systems
will require modest remediation to be fully ready for year 2000. As such, most
of the systems activity that must take place entails upgrading purchased
application systems. The Company believes that these upgrades will take place in
the ordinary course of business without significant incremental cost. Experts
from the Interim Technology Consulting Group's year 2000 practice will be
utilized to augment internal activities in the assessment and testing phases of
the project.

The Company plans to complete its year 2000 upgrade in a timely manner. The
Company does not foresee substantial incremental costs as most of the
applications that are not currently year 2000 ready are purchased third party
software packages. The vendors of those products have announced year 2000
upgrade versions scheduled to be available in the first half of 1998. The costs
of these upgrades are included as part of the ongoing maintenance fees. In
addition, the Company is discussing with its vendors and customers the
possibility of any difficulties which may affect the Company as a result of its
vendors and customers ensuring that their computer systems and software are year
2000-compliant. To date, no significant concerns have been identified. However,
there can be no assurance that no year 2000 related computer operating problems
or expenses will arise with the Company's computer systems and software or in
the computer systems and software of the Company's vendors and customers. The
Company's IT Consulting Group performs work for clients to assist them in
modifying their computer systems and software to make them year 2000 compliant.
Generally, this work is performed under the direction and supervision of the
client and without warranties as to results or usability. Accordingly, the
Company does not believe that it will incur any material liabilities to clients
for its work on their year 2000 projects.

INFLATION

The effects of inflation on the Company's operations were not significant
during the periods presented in the financial statements.

FOREIGN OPERATIONS

With the acquisition of Michael Page, the Company has significantly expanded
its business outside of North America. The results of operations of Michael Page
are included within the Professional Services Group. The Company also has
Commercial Staffing operations in The Netherlands. In 1997, revenue and
operating earnings (before interest and taxes, and gain on sale of the
HealthCare Division) from foreign operations were $251.2 million and $39.5
million, respectively. There are currently no legal restrictions regarding the
repatriation of cash flows from these foreign operations.

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SEASONALITY AND CYCLICALITY OF BUSINESS

The Company's businesses are not seasonal in nature, but the staffing
business has historically been considered to be cyclical, often acting as a
coincidental indicator of both economic downswings and upswings. However, the
balance between Professional Services and Commercial Staffing Services should
help reduce the impact of cyclicality. The acquisition in 1997 and growth of AIM
which specializes in outplacement should also mitigate the impact of cyclicality
as outplacement growth rates amplify during a slower economy, offsetting other
services which may be more sensitive to economic declines. As a result of
general shifting of employment patterns and the growth in Interim On-Premise,
the Company believes it may become less cyclical. Finally, the Company's
presence in 12 countries may reduce cyclicality based on management's belief
that the economies of every country will not suffer economic downturns
simultaneously. No single customer accounts for more than 2% of the Company's
sales.

OTHER

In June 1997, Statement of Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income," was issued. 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. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS No. 130 is effective for fiscal years beginning
after December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The Company will adopt
this standard in 1998.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information", was issued. SFAS No. 131 establishes standards for the way
that public companies report selected information about operating segments in
annual financial statements and requires that those companies report selected
information about segments in interim financial reports issued to shareholders.
SFAS No. 131 also establishes standards for related disclosures about products
and services, geographic areas, and major customers and supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise". SFAS No. 131 is
effective for financial statements for periods beginning after December 15,
1997. The Company has historically reported its information under one segment.
This standard will require the Company to report financial information
consistent with how the business is managed. The Company will adopt this
standard in 1998.

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BUSINESS

COMPANY OVERVIEW

The Company provides services in two primary groups: (i) the Professional
Services Group, which offers a comprehensive range of consulting, staffing,
outplacement and placement services in the areas of information technology,
legal, accounting, banking and finance and human resources, and (ii) the
Commercial Staffing Group, which offers workforce management and clerical,
administrative and light industrial staffing services. Professional Services and
Commercial Staffing Services each represented approximately 50% of the Company's
pro forma revenues at the end of fiscal 1997. The Company believes that it is
one of the five largest worldwide providers of Professional Services, and one of
the ten largest worldwide providers of staffing services, based on revenues.

Since the IPO, the Company's network of offices in its Professional Services
and Commercial Staffing Groups has nearly doubled, from 373 offices in North
America to 733 offices in 12 countries at the end of the first quarter of 1998.
The Company's revenues from Professional Services and Commercial Staffing
Services increased from $537.0 million in fiscal 1994 to $1.4 billion in fiscal
1997 ($1.5 billion on a pro forma basis). This growth has been accomplished
through strategic acquisitions, internal growth and by capitalizing on
cross-selling opportunities. During this period, the Company acquired 18
companies providing staffing, consulting and employment services through
approximately 161 offices, representing over $550 million of acquired revenues,
$496 million of which were from Professional Services. In April 1997, the
Company acquired Michael Page, a premier international recruiting and staffing
company specializing primarily in accounting, banking and finance, currently
with 51 offices located throughout Europe and the Asia Pacific region. The
acquisition of Michael Page, the Company's largest acquisition to date, has
provided the Company with a strong international presence, substantial growth in
its higher-margin Professional Services business, enhanced cross-selling
opportunities and access to a worldwide customer base.

INDUSTRY OVERVIEW

The global staffing services industry has experienced significant growth in
response to the changing work environment worldwide. According to Eurostat, the
European Commission's statistical body, the total staffing services market in
developed economies had revenues of approximately $94 billion in 1995 (the
latest available data). The focus of the staffing industry is changing from
employers' traditional use of staffing services to manage personnel costs and
meet fluctuating staffing requirements to the reduction of administrative
overhead by outsourcing human resources operations that are not part of their
core business competencies. The use of flexible staffing services has allowed
employers to improve productivity, to outsource specialized skills and to avoid
the negative effects of layoffs. Rapidly changing regulations concerning
employee benefits, insurance and retirement plans, as well as the high cost of
hiring, laying off and terminating permanent employees has also prompted many
employers to take advantage of the flexibility offered through temporary and
contract staffing arrangements. In addition to the economic conditions driving
staffing industry growth, the Company believes that changing demographics of the
workforces of developed economies and evolving attitudes concerning work
patterns also contribute to growth in the staffing industry. These trends have
accelerated with the pace of technological change and greater global competitive
pressures.

The U.S. remains the largest and most important staffing service market in
the world. According to STAFFING INDUSTRY REPORT, U.S. staffing industry
revenue, including temporary help, placement, search and outplacement, grew from
approximately $29.3 billion in 1992 to approximately $65.0 billion in 1997,
representing a compound annual growth rate of 17.3%. The National Association of
Temporary and Staffing Services has estimated that more than 90% of all U.S.
businesses utilize staffing services. Also, the U.S. Bureau of Labor Statistics
has stated that penetration of the U.S. work force by temporary and contract
workers has increased from approximately 0.4% in 1992 to approximately 1.9% in
1996. One of

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the fastest growing sectors for the staffing services industry, as well as for
the Company, is information technology. According to the STAFFING INDUSTRY
REPORT, 1996 revenue for this sector in the U.S. is estimated to have been $11.7
billion, a 27.2% increase over 1995, and is estimated to have grown to $14.9
billion in 1997, representing a compound annual growth rate of 23.9% since 1992.
In addition, revenues for other professional level staffing, including
accounting, finance and legal, were estimated to have grown from $1.8 billion in
1992 to $6.1 billion in 1997, representing a compound annual growth rate of
27.6%. The Company believes that Professional Services requires longer-term,
more highly-skilled personnel services and, therefore, offers the opportunity
for higher profitability than the Commercial Staffing Services because of the
value-added nature of professional and technical staffing personnel.

The U.K. is the second largest national staffing services market in the
world. According to a report commissioned by the Federation of Recruitment and
Employment Services in the U.K., staffing industry revenue in the U.K. grew from
approximately $8.9 billion in 1992 to approximately $21.8 billion in 1996,
representing a compound annual growth rate of 25.1%. According to Eurostat, the
U.K. had the highest penetration rate of temporary and contract workers in the
world in 1995 (the latest available data), at approximately 3.3%. Demographic
indicators produced by the U.K. Institute for Employment Studies predict a
return to labor shortages in the U.K., particularly in technical and skilled
sectors. This shortage is expected to result from a shrinking labor pool coupled
with continued demand for specialized skills. While a shrinking labor pool may
reduce the number of suitable candidates for the Company to place with its
clients, it may also increase the demand for the Company's specialized
recruiting skills. The Company believes that these factors, as well as the
continued relatively rapid growth in the service sector, should increase the
opportunities to place workers in the U.K.

The total staffing services market in the European Union (excluding the
U.K.) during 1995 (the latest available data) was estimated by Eurostat to be
approximately $24.0 billion, with France, Germany, The Netherlands and Belgium
accounting for over 90% of such market. The continental European staffing
services industry is currently characterized by discrete domestic markets that
have no significant cross-border contact. Between 1992 and 1995 (the latest
available data), the staffing services industry grew at compound annual rates of
11.8% in France, 12.9% in Germany, 13.4% in The Netherlands and 11.4% in
Belgium. In many other European countries, the staffing services industry has
only recently begun to develop. The European Commission has noted trends towards
deregulation and greater labor market flexibility which the Company believes
will increase the use of temporary and contract labor throughout Europe. For
example, Spain, Sweden and Italy have recently enacted legislation that
eliminated or modified laws which had previously significantly restricted or
prohibited the operations of private staffing services companies. In the
emerging markets of Eastern Europe, the Company believes that demand for
staffing services is increasing as a result of deregulation of certain local
labor laws and increasing economic development.

In certain countries in the Asia Pacific region, particularly Australia, the
staffing service industry is well developed, and the Company believes that
opportunities exist for expansion in both Professional Services and Commercial
Staffing Services.

The staffing services market in most countries in which the Company operates
is highly fragmented and includes a large number of small businesses, many of
which operate in a single geographic market. This fragmentation, combined with
changing client demands and competitive pressures, has resulted in a trend
towards industry consolidation. This consolidation is being driven by, among
other things, client demands for "one-stop shopping" from staffing providers.
Faced with a desire to minimize the number of vendors, coupled with the need for
sophisticated management information systems, the growth of national or global
relationships and the expansion of professional level specialties, clients have
begun to demand the services of large staffing companies capable of offering a
full range of staffing services over a broad geographic area. This ability has
been particularly important in fulfilling the needs of large regional, national
and international accounts. Within this more competitive environment, smaller
companies may have difficulties competing due to limited service offerings,
geographic concentration and lack of sufficient working capital and management
resources. As a result, many smaller companies have been acquired in recent
years and the Company believes that small and mid-sized staffing companies are
becoming increasingly responsive to acquisition proposals by larger firms, such
as the Company.

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Furthermore, the Company believes that consolidation may also occur among larger
regional and national companies.

BUSINESS STRATEGY

The Company's goal is to drive revenue and earnings growth by delivering
innovative integrated human resources solutions worldwide through its
consultative approach to workforce management. The Company intends to achieve
this goal through a growth strategy that includes strategic acquisitions, with
particular emphasis in its higher-margin Professional Services businesses,
opening new offices in existing and new geographic markets and continued
development of its client base by capitalizing on cross-selling opportunities.
This growth strategy is complemented by an operating strategy of offering a
comprehensive range of innovative services under common brands through
decentralized, entrepreneurial offices providing specialized expertise. Through
the implementation of the Company's strategy, EBIT as a percentage of revenues
increased from 2.6% in fiscal 1993 (without giving effect to the restatement of
the Company's financial statements to account for the acquisition of Brandon as
a pooling-of-interests) to 6.5% in fiscal 1997.

The key elements of the Company's strategy are:

CONTINUE TO EXPAND THROUGH ACQUISITIONS. The Company believes that there is
an opportunity to acquire additional companies consistent with its business
strategy because of the highly fragmented nature of the staffing industry and
the pressures of increased competition. The Company intends to continue to make
complementary acquisitions that can be integrated into existing operations, as
well as strategic acquisitions that provide entry into new geographic markets or
service lines. This acquisition strategy focuses on strong, well managed
staffing and consulting companies domestically and internationally. The Company
has a proven track record of successfully acquiring companies, integrating them
within the Company's existing operations and producing growth rates of acquired
companies in excess of their historical performance. Since the IPO, the Company
has added approximately 161 offices and over $550 million in revenues through
acquisition.

MAINTAIN STRONG ORGANIC GROWTH. A significant portion of the Company's
growth has resulted from internal expansion, which includes new office openings
and development of existing offices. The Company intends to continue to add
offices by expanding into new geographic markets, both domestically and
internationally, and to open new offices in existing markets to increase the
range of services offered in such markets. New office openings are jointly
planned by corporate and local management based upon various criteria, including
market demand, availability of quality candidates and whether a new office would
complement or broaden the Company's current geographic network or service
offerings. The Company also believes that it has been able to accelerate the
growth of existing offices by capitalizing on cross-selling opportunities. To
this end, the Company's integration managers focus on facilitating cross-selling
opportunities on a regional basis. The Company opened 199 offices from the date
of the IPO through the end of the first quarter of 1998.

PROVIDE A COMPREHENSIVE RANGE OF SERVICES. The Company believes that
significant demand exists from current and prospective clients to procure a
substantial portion of their human resources solutions from a single company,
thereby enabling them to assess and deploy personnel more efficiently and
productively. Accordingly, the Company seeks to be regarded by its clients as
their human resources partner and is committed to developing a broad range of
innovative, value-added human resource solutions to meet their evolving needs on
a worldwide basis. Since the IPO, the Company has significantly increased the
range of services offered, moving from solely providing flexible staffing
services to offering a full range of Commercial and Professional Services. The
higher-margin Professional Services include workforce management, recruitment,
consulting and outplacement services in the fields of information technology,
law, accounting, banking and finance. The Company believes that Professional
Services may be less cyclical and provide attractive cross-selling opportunities
for other Interim offices.

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<PAGE>

of performance, quantitative analysis of staffing efficiencies and customized
reporting. The Company's "interim.com" website contains employment information
that can be used by both candidates and clients, and was made part of the
Smithsonian Institution's Permanent Research Collection on Information
Technology Innovation. In addition, the Company conducted a nationwide survey
with Louis Harris and Associates to identify emerging workforce trends to assist
clients in human resource planning.

UTILIZE ADVANCED RECRUITMENT METHODS. The Company has added new techniques
to successfully recruit and retain candidates. Through five recruitment centers
in Europe, Asia and South Africa, Interim recruits professionals, predominantly
to the U.S., to fill a shortage of skills. In addition, Interim was the first
company in the staffing industry to implement national television advertising
featuring a toll-free number (1-800-A-CAREER) and full-page WALL STREET JOURNAL
advertising for managerial and executive positions. Recruitment efforts are
globally supported by both Internet and Intranet-based technology and a
developing central candidate database that will allow the Company to maintain
contact with candidates throughout the duration of their careers. Once a
candidate is employed, the Company focuses on training to maintain or enhance
skills and offers certain employees full-time salaries, benefits and
participation in the Company's employee benefit plans as a form of retention.

LEVERAGE BRAND IDENTITY. Interim is one of a small number of staffing
companies which provide Commercial Staffing Services and Professional Services
under the same brand name, This maximizes cross-selling opportunities (e.g.,
Interim Technology, Interim Accounting Professionals, Interim Legal Services,
Interim Attorneys, Interim Personnel, etc.). Through this common branding, the
Company and its franchisees and licensees are better able to benefit from
national media advertising. The Company also benefits from brand name
recognition of certain of its subsidiaries including Michael Page, a premier
recruitment organization focusing on the placement of finance professionals
internationally, has established strong name recognition within the world's
largest financial markets and The Stratford Group, the Company's executive
search business specializing in the recruitment of high-level executives,
benefits from name recognition among senior management.

DELIVER SERVICES THROUGH SPECIALIZED OFFICES SUPPORTED BY DECENTRALIZED
STRUCTURE. The Company's businesses are operated to be responsive to local
business practices and market conditions. The Company believes that its existing
and potential clients choose service providers largely on the basis of brand
awareness and local specialized expertise. Each of the Company's offices are
organized on this basis, thereby providing clients with perceived value and
enhanced services by enabling them to deal with Interim representatives who
"speak their language" and understand their specialized human resources
requirements. Further, all Interim managers are compensated based on profits
generated within their scope of responsibility and cross-selling activities, and
they are responsible for their own hiring, pricing, business mix and local
promotion. The Company believes that this (i) allows the Company to capitalize
on its managers' knowledge of local business conditions and markets, (ii) makes
the Company more attractive to acquisition candidates, (iii) allows for a smooth
transition of acquired businesses and (iv) enables local operating company
managers to develop long-term relationships with key decision makers at both
existing and potential clients.

ACQUISITIONS

The Company's corporate management team has extensive experience in
identifying acquisition candidates and integrating acquired operating companies
into the Company's international network. The Company believes its
decentralized, entrepreneurial management structure facilitates its efforts to
acquire branded staffing companies seeking alliances with an
internationally-focused provider of a broad range of staffing services.

During 1997, the Company acquired two companies which have considerably
advanced the Company's objective to grow the Professional Services Group:
Michael Page, a premier international recruiting and staffing company
specializing in accounting, banking and finance, currently with 51 offices
located in the U.K., France, The Netherlands, Italy, Germany, Australia, Hong
Kong, Singapore, Spain, New Zealand and the U.S., and AIM, a leading provider of
outplacement and career consulting services in the U.S. Since the IPO, the
Company has acquired 18 companies providing staffing, consulting and employment
services through approximately 161 offices, representing approximately $551
million in

29
<PAGE>
acquired revenues. In addition to external acquisitions, Interim usually
purchases franchise and license operations which are for sale. The Company is
generally the purchaser of choice when an Interim franchisee or licensee decides
to sell its business. The Company has a first right of refusal on any franchise
sale at the same terms and conditions as may be agreed with another purchaser
and has a standard purchase option on licenses. Overall, Company-owned branches
yield higher profits than franchised or licensed offices, and the Company
therefore believes that the purchase of these offices is accretive to overall
earnings. The Company regularly evaluates potential acquisitions of companies
that can be integrated into existing operations and strategic acquisitions that
provide entry into new geographic markets or service lines. Certain information
related to external acquisitions is summarized in the following table.

<TABLE>
<CAPTION>
NUMBER REVENUES
ACQUISITION OF IN
ACQUIRED COMPANY DATE OFFICES(1) MILLIONS(2) PRIMARY SERVICES
- -------------------------- ----------- ----------- ------------- --------------------------
<S> <C> <C> <C> <C>
PROFESSIONAL SERVICES
GROUP
Smyth, Fuchs & Company.... 3/98 5 $ 2.5 Outplacement
Network Companies, Inc.... 2/98 2 5.0 Accounting Staffing &
Placement
de Recat & Associates, 1/98 3 3.5 Outplacement
Inc.....................
A.J. Burton Group, Inc.... 1/98 3 14.6 Accounting Staffing &
Placement
Feldt Personnel 10/97 1 0.5 Accounting Staffing &
Consultants............. Placement
Mainstream Access......... 4/97 16 5.7 Outplacement
Michael Page Group PLC.... 4/97 40 220.0 Accounting & Finance
Staffing & Placement
AIM....................... 3/97 17 35.2 Outplacement, Staffing &
Placement
Brandon Systems........... 5/96 32 89.0 IT Staffing
Of-Counsel................ 5/96 1 1.0 Attorney, Paralegal &
Legal Secretary Staffing
Computer Power Group...... 12/95 17 81.0 IT Consulting and Staffing
Hernand Partners.......... 11/95 3 2.7 Attorney Staffing
Juntunen.................. 10/95 2 13.6 Placement, HR Consulting
and Staffing
OCS Services Group........ 6/95 5 16.1 IT Consulting and Staffing
Career Associates/Career
Temps................... 6/95 5 5.6 Accounting Staffing and
Placement
COMMERCIAL STAFFING GROUP
Crone Corkill............. 3/98 2 38.4 High level Administrative
Staffing
Allround/Interplan........ 11/96 6 15.0 Traditional Staffing
ICS Temporary Services.... 12/94 1 1.6 Traditional Staffing
----------- -------------
Total............. 161 $ 551.0
----------- -------------
----------- -------------
</TABLE>

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

(1) Office count at time of acquisition.

(2) Revenues shown for 1995 and 1994 acquisitions reflect annualized results for
the year. 1998, 1997 and 1996 acquisitions reflect revenues for the 12
months prior to acquisition.

30
<PAGE>
DESCRIPTION OF OPERATIONS

The Company provides its decentralized field operations with centralized
national and international support in training, information technology,
recruitment, marketing and sales. This includes national television advertising
aimed at building brand identity and recruiting candidates, centralized
candidate databases and expansive internet and intranet communication abilities.
In addition, back office support includes: centralized payroll, billing,
receivables management, risk management, legal services and cash management.
Corporate staff, as well as integration managers in key markets, are dedicated
to supporting cross-selling activities and national/international account
management and expansion. Business units that pass revenue-generating leads to
other business units are rewarded with a corporate-paid fee. This approach
facilitates an environment of high communication among offices, unifies
strategic initiatives and capitalizes upon multinational resources.

The Company provides skills in two primary groups: the Professional Services
Group and the Commercial Staffing Services Group. Each group offers a
comprehensive range of skills to fulfill client requirements and are described
below.

THE PROFESSIONAL SERVICES GROUP

The Professional Services Group offers a comprehensive range of consulting,
staffing, outplacement and placement services in the areas of IT, legal,
accounting, banking and finance and human resources. The Company's total
revenues in fiscal 1997 from Professional Services were $675.0 million,
representing an increase of approximately $366.3 million or 118.7% from fiscal
1996.

ACCOUNTING AND FINANCE. Through the acquisition of Michael Page and the
growth of Interim Accounting Professionals, the Company provides accounting,
banking and finance staffing and placement services worldwide. Michael Page
specializes in recruiting and staffing in areas such as mergers and
acquisitions, corporate finance and funds management. Michael Page operates in
major financial centers across the globe, including London, Paris, Frankfurt,
Amsterdam, Hong Kong, Singapore and Sydney and in 1997, opened its first office
in New York. As a result of the Michael Page acquisition, Interim is the second
largest provider of recruiting and staffing services in the accounting, banking
and financial areas worldwide. In addition, Michael Page provides Interim with a
global presence to grow its On-Premise and traditional staffing businesses.
Interim Accounting Professionals provides accounting and finance personnel at
all levels including bookkeepers, degreed accountants, certified public
accountants, auditors and controllers. Clients include corporate accounting
departments, small businesses and accounting firms of every size. Interim
Accounting Professionals offers temporary and project staffing, temp-to-hire and
full-time placement capabilities.

INFORMATION TECHNOLOGY. Interim has built a leading information technology
consulting and staffing services group operating through 50 offices, of which 47
are in the U.S., two are in the U.K. and one is in Asia, as well as recruiting
centers in South Africa, Asia and The Netherlands. This business provides a
comprehensive scope of IT services including management consulting, staffing and
outsourcing services. Interim Technology services are subdivided into two
specialty offerings, Technology Consulting and Technology Staffing.

Technology Consulting specializes in the areas of software design,
maintenance, development, quality assurance, implementation and strategic IT
consulting. The Technology Consulting Group has separate practices to supply
specialized expertise in the areas of client/server development, legacy systems
support, network integration, software quality management, systems engineering
and technical communications, and provides IT services to Fortune 100 companies.
In addition, the Technology Consulting Group provides management, staffing, and
testing of year 2000 projects. Technology Consulting engagements are generally
longer term and are provided by highly trained full-time employees.

31
<PAGE>
Technology Staffing provides operations-based staffing and support for IT
operations including help desk and data center operations, operations analysis,
communications, operations and PC support. The Technology Staffing Group also
offers a distinctive partnering service whereby its clients maintain complete
strategic control of their information systems and data, but are relieved of
technology staffing and performance issues and thus benefit from the traditional
savings of outsourcing. This type of outsourcing service is typically provided
to clients under a contractual arrangement. The Technology Staffing group
generally provides large numbers of personnel for shorter assignments.

LEGAL SERVICES. The Company's legal staffing offices provide attorneys,
paralegals, court reporters, litigation support and legal transcription services
predominantly to law firms and corporations. In addition, the Company operates a
"Depolab" at its corporate headquarters providing summarization, proofing,
editing and transcription services utilizing proprietary software that permits
law firms to have depositions summarized into 13 different formats. The
centralized Depolab concept enhances supervision, confidentiality and quality
control while making better use of human resources which would otherwise be
located in various local offices.

In 1997 the Company introduced Juris Partners, a product designed to be
similar to Interim On-Premise. Juris Partners is a comprehensive management
program designed to increase the effectiveness and cost-efficiency of a
company's legal support. Through Juris Partners, an on-site Interim manager
evaluates and manages a company's entire legal support function, supplying the
necessary staff and services including project staffing, litigation support,
document management and court reporting.

HUMAN RESOURCE SOLUTIONS. Interim HR Solutions offices provide skilled
professionals such as contract recruiters and human resource professionals for
project assignments and human resource consulting and project management at
client locations or on an outsourced basis. In addition, this group's expertise
ranges from organizational development and training to compensation, plan design
and benefits analysis.

RECRUITMENT. Interim provides nationwide searches for all levels of
employees, up to president and CEO. Retained searches are conducted for
executives and high-level managers, and contingency recruitment is available for
management and professional positions. Businesses rely on Interim to recruit
industry experts who will provide strategic direction and top management skills.
The search group has developed a blue chip client list, and has particular
expertise in the technology industry, working with virtually all of the leading
technology companies in the nation. Relationships are established with companies
at the highest levels when recruiting for executives and management. These
relationships serve as an excellent point of entry for a whole host of
additional Interim services including information technology, legal, accounting,
HR, clerical and light industrial.

CAREER CONSULTING. With nationwide capabilities, Interim manages projects
ranging from large-scale national restructurings to individual cases and is
ranked among the top five outplacement firms in the U.S. Interim provides career
management and outplacement services to help companies and their employees
address career transition and termination issues. Career Consulting services
provide career assessment and management, executive coaching, leadership
development and team alignment.

THE COMMERCIAL STAFFING GROUP

The Commercial Staffing Group offers services ranging from workforce
management to clerical, administrative and light industrial staffing.
Approximately 50% of the Company's total revenues at the end of fiscal 1997 were
derived from the Commercial Staffing Group.

INTERIM PERSONNEL. The traditional flexible staffing business consists of
providing a wide variety of clerical, administrative, assembly and light
industrial skills. In addition to supplying personnel to perform general office
tasks such as reception, copying and filing, the Company provides personnel who
are

32
<PAGE>
proficient in word processing, graphics, spreadsheets or database management. In
the light industrial area, Interim supplies personnel to perform light
industrial tasks such as electronic and precision assembly, PC board assembly,
packaging, shipping and receiving, warehousing, landscaping, construction and
equipment operation. The Company also offers full-time placement of these
skills.

INTERIM ON-PREMISE. In 1992, the Company introduced a new staffing concept,
Interim On-Premise, whereby a client delegates management of its staffing needs
to the Company, allowing the client to focus on its core business activities.
On-Premise has evolved to include managing a client's entire workforce, a
significant portion of which may be permanent staff. To better serve its
On-Premise clients, the Company has developed proprietary software that is
designed to facilitate managing the productivity of personnel at the client's
work site. On-Premise offices are predominantly Company-owned. Since the concept
was introduced, revenues from On-Premise clients have grown to 30% of the
Commercial Staffing Group's revenues for fiscal 1997.

The Company has found that Interim On-Premise clients, who had typically
utilized Commercial Staffing Services, are very receptive to other Interim
services, particularly in the Professional Services area. On-Premise managers
are well positioned to enhance established relationships with key people at
client organizations and, as a result, introduce Professional Services.
Conversely, Professional Services' employees often can identify instances where
clients need additional staffing services and introduce Interim On-Premise.
These clients have also sought to expand the Interim On-Premise service into
their international operations. Management believes the Company's geographic and
service breadth provide a strong competitive advantage in securing such
broad-reaching assignments. Additionally, once in place, clients are reluctant
to terminate their on-premise arrangements, having become dependent on Interim's
knowledge, productivity and proprietary software.

33
<PAGE>
OFFICE STRUCTURE

Interim offices are Company-owned, franchised and licensed. Most offices
serve multiple clients in their respective geographic area, with the exception
of Interim On-Premise sites, which are established at the client's location to
serve only that client. The Company believes that it can better leverage
profitability through its branch locations. The Company originated as a
franchise organization. Currently 83% of revenues are derived from Company owned
operations and the Company does not intend to add additional franchises. The
following table details the number of offices which are Company-owned,
franchised and licensed as of the end of the periods listed.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------
<S> <C> <C> <C>
DECEMBER
-------------------------------------

<CAPTION>
NUMBER OF OFFICES 1997 1996 1995
- ----------------------------------------------------------------------- ----- ----- -----
<S> <C> <C> <C>
BRANCH OFFICES
Commercial Staffing Group.............................................. 218 191 159
Professional Services Group............................................ 181 92 79
HealthCare Division.................................................... -- 113 104
--- --- ---
Total Branch Offices............................................. 399 396 342
--- --- ---
FRANCHISED OFFICES
Commercial Staffing Group.............................................. 136 131 123
Professional Services Group............................................ 3 3 2
HealthCare Division.................................................... -- 285 289
--- --- ---
Total Franchised Offices......................................... 139 419 414
--- --- ---
LICENSED OFFICES
Commercial Staffing Group.............................................. 150 160 163
Professional Services Group............................................ 18 16 11
HealthCare Division.................................................... -- 7 10
--- --- ---
Total Licensed Offices........................................... 168 183 184
--- --- ---
TOTAL OFFICES
Commercial Staffing Group.............................................. 504 482 445
Professional Services Group............................................ 202 111 92
HealthCare Division(1)................................................. -- 405 403
--- --- ---
TOTAL OFFICES.................................................... 706 998 940
--- --- ---
Less HealthCare Division............................................... -- 405 403
--- --- ---
TOTAL EXCLUDING HEALTHCARE DIVISION.............................. 706 593 537
--- --- ---
--- --- ---
</TABLE>

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

(1) The Company sold the HealthCare Division in September 1997.

COMPANY-OWNED OFFICES

As of December 26, 1997, the Company operated 399 branch offices. Branch
office expansion is generally pursued in markets where Interim has an
established presence and is used to increase market penetration. Additional
expansion is achieved by establishing On-Premise operations at client sites. The
Company intends to continue to expand Company-owned branches in those locations
where it can "cluster" multiple offices in close geographic proximity to utilize
centralized regional and area management and other administrative functions,
which leverages growth and increases profitability.

34
<PAGE>
LICENSED OFFICES

The Company grants licenses, which give the licensee the right to establish
a business utilizing the Company's trade names, service marks, advertising
materials, sales programs, operating procedures, manuals and forms within a
designated territory. As of December 26, 1997, the Company's 71 licensees
operated 168 licensed offices.

Licensees are required to observe the Company's operating procedures and
standards and act as a representative of the Company in recruiting, screening,
classifying, employing and placing flexible staff in response to client orders.
The licensee is responsible for establishing the office and paying related
administrative and operating expenses, such as rent, utilities and salaries of
full-time employees. The Company is responsible for paying the wages of the
flexible staff and all related payroll taxes and insurance. As a result, the
Company provides a substantial portion of the working capital needed for the
licensed businesses.

Sales by the licensed offices are included in the Company's revenues, and
the direct costs of services are included in the Company's cost of services. The
licensee receives a commission from the Company, which generally is equivalent
to 75% of the licensed offices' gross profits. The licensee is required to
participate in the Company's national advertising program and use the Company's
billing, payroll and other data processing services for which a separate fee is
paid to the Company.

FRANCHISED OFFICES

The Company has been granting franchises for approximately 40 years. The
average tenure of commercial franchise ownership exceeds 17 years, and a number
of franchisees are second generation owners. Most franchisees operate more than
one franchise. As of December 26, 1997, the Company's 19 franchisees operated
139 offices. The Company does not intend to add any franchisees.

The Company grants franchisees the right to market and furnish commercial
staffing services within a designated geographic area using the Company's trade
names, service marks, advertising materials, sales programs, operating
procedures, manuals and forms. The Company provides franchises with its
national, regional and local advertising. Franchisees operate their businesses
autonomously within the framework of the Company's policies and standards and
recruit, employ and pay their own full-time and flexible staff. The Company
receives royalty fees from each franchise based upon its sales, and in return
supplies a variety of support and marketing services.

COMPETITION

The Company's largest competitors are Manpower, Inc., Adecco S.A., Kelly
Services, Inc., The Olsten Corporation, Norrell Corporation, Robert Half
International and AccuStaff, Inc. The Company believes that it is one of the ten
largest worldwide providers of staffing services and one of the five largest
worldwide providers of Professional Services, based upon revenue.

The Company believes that the primary competitive factors in obtaining and
retaining clients are the breadth of services provided as clients seek out
providers that can service all of their staffing needs.

35
<PAGE>
Additionally, other critical competitive factors include the number and location
of offices, an understanding of clients' specific job requirements, the ability
to provide personnel in a timely manner and the ability to monitor the quality
of job performance. The primary competitive factors in obtaining qualified
candidates for employment assignments are quality of available opportunities,
wages, responsiveness to work schedules and number of hours of work available.
The Company believes it has a competitive advantage over its competitors because
it offers a wide range of services and broad availability of skills to its
customers worldwide.

EMPLOYEES

Interim employed more than 400,000 people in 1997, including the HealthCare
Division which was sold in September 1997. The Company estimates that it
assigned approximately 350,000 flexible personnel with its clients in 1997, of
whom approximately 70,000 were assigned, on average, at any given time. The
Company assigned approximately 25,000 people in permanent jobs. In addition, the
Company employs approximately 4,000 staff employees full-time in its national
and international operations.

36
<PAGE>
MANAGEMENT

The following table sets forth the names, ages and position with the Company
of its executive officers and key operating management employees.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------- --- --------------------------------------------------------
<S> <C> <C>
Raymond Marcy............... 47 Chairman, President and Chief Executive Officer

Robert E. Livonius.......... 49 Executive Vice President and Chief Operating Officer

Roy G. Krause............... 51 Executive Vice President and Chief Financial Officer

John B. Smith............... 58 Senior Vice President, Legal Counsel and Secretary

Robert Evans................ 54 Vice President and Chief Information Officer

Ken Kilburn................. 44 Vice President and Chief Administrative Officer

Terry Benson................ 45 Chief Executive Officer -Michael Page Group

Stuart N. Emanuel........... 54 President -- Interim Technology Consulting Group

Robert Miano................ 48 President -- Interim Technology Staffing Group

Gary Peck................... 45 President -- Commercial Staffing Group
</TABLE>

RAYMOND MARCY has served as the Company's Chairman since August, 1997, as
the Company's Chief Executive Officer since September 1991 and as the President
and a director since November 1989, as well as the Chief Operating Officer from
November 1989 until September 1991. Prior to joining the Company, Mr. Marcy
served as Senior Vice President of Operations for Adia Services, Inc. ("Adia"),
from 1980 through 1988. While retaining his position as Senior Vice President of
Operations for Adia, from May 1988 until November 1989, Mr. Marcy was President
and Chief Executive Officer of Nursefinders, Inc., the temporary nursing
subsidiary of Adia.

ROBERT E. LIVONIUS has served as the Company's Executive Vice President and
Chief Operating Officer since February 1997, as Executive Vice
President--Operations since August 1993, and as Vice President--HealthCare
Division from August 1991 to August 1993. Prior to joining the Company, Mr.
Livonius served as Vice President--Field Operations for a division of NYNEX
Corporation from June 1986 through June 1991.

ROY G. KRAUSE has served as the Company's Executive Vice President and Chief
Financial Officer since October 1995. Prior to joining the Company, Mr. Krause
served as Executive Vice President of HomeBank Federal Savings Bank and HomeBank
Mortgage Corporation from November 1980 to September 1995.

JOHN B. SMITH has served as the Company's Senior Vice President since
January 1980 and as Legal Counsel and Secretary since January 1965. Mr. Smith
also served as a director from January 1969 until May 1995.

ROBERT EVANS has served as the Company's Vice President and Chief
Information Officer since May 1996. Prior to joining the Company, Mr. Evans held
several executive positions with AT&T, including Vice President--Customer Care
Strategy and Reengineering, Chief Technology Officer, Chief Information Officer
and General Manager of the Consumer Interactive Services business unit.

KEN KILBURN has served as the Company's Vice President of Business
Integration and Chief Administrative Officer since January, 1998. Before joining
Interim in January 1989, Mr. Kilburn was Director of PC Options Manufacturing
for Compaq Computer Corp. For nearly 15 years prior thereto,

37
<PAGE>
Mr. Kilburn held various executive management positions in purchasing and
manufacturing operations with Digital Equipment Corp.

TERRY BENSON has served as the Chief Executive Officer of Michael Page since
1989, and held various other positions with Michael Page for nearly ten years
prior thereto.

STUART N. EMANUEL has served as the Company's President--Interim Technology
Consulting Group since May 1997. Prior to joining the Company, Mr. Emanuel held
various executive positions with the Computer Power Group, which was acquired by
the Company in December 1995, including Executive Vice President, Regional Vice
President and Director of Sales.

ROBERT MIANO has served as the Company's President -- Interim Technology
Staffing Group since December 1997. From May 1996 until November 1997, Mr. Miano
served as Executive Vice President -- Interim Technology Staffing Group. From
1992 until May 1996, Mr. Miano served as Vice President -- Operations.

GARY PECK has served as the the Company's President -- Commercial Staffing
Group since August 1997, as Vice President-Commercial Branch Operations from
January 1995 to August 1997 and as Vice President -- Special Services from
August 1991 to December 1994. Prior to joining the Company, Mr. Peck served as
Senior Vice President for Talent Tree Services, Inc., from August 1998 to August
1991.

38
<PAGE>
DESCRIPTION OF NOTES

THE NOTES WILL BE ISSUED UNDER AN INDENTURE, TO BE DATED AS OF ,
1998 (THE "INDENTURE"), BETWEEN THE COMPANY AND THE BANK OF NEW YORK, AS TRUSTEE
(THE "TRUSTEE"), A COPY OF WHICH IS FILED AS AN EXHIBIT TO THE REGISTRATION
STATEMENT. WHEREVER PARTICULAR DEFINED TERMS OF THE INDENTURE (INCLUDING THE
NOTES) ARE REFERRED TO, SUCH DEFINED TERMS ARE INCORPORATED HEREIN BY REFERENCE
(THE NOTES BEING REFERRED TO IN THE INDENTURE AS "SECURITIES"). THE FOLLOWING
SUMMARIES OF CERTAIN PROVISIONS OF THE INDENTURE DO NOT PURPORT TO BE COMPLETE
AND ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO, THE
DETAILED PROVISIONS OF THE NOTES AND THE INDENTURE, INCLUDING THE DEFINITIONS
THEREIN OF CERTAIN TERMS.

GENERAL

The Notes will be general unsecured subordinated obligations of the Company,
will be limited to $172,500,000 aggregate principal amount and will mature on
, 2005. Payment in full of the principal amount of the Notes will be
due on , 2005 at a price of 100% of the principal amount thereof.

The Notes will bear interest at the rate per annum set forth on the front
cover of this Prospectus from , 1998 or from the most recent
Interest Payment Date to which interest has been paid or provided for, payable
semi-annually on and of each year, commencing
, 1998 until the principal thereof is paid or made available for
payment, to the Person in whose name the Note (or any Predecessor Note) is
registered at the close of business on the preceding or
, as the case may be. Interest on the Notes at such rate will be
computed on the basis of a 360-day year, comprised of twelve 30-day months.

The Notes will be convertible into shares of Common Stock initially at the
conversion rate stated on the front cover of this Prospectus, subject to
adjustment upon the occurrence of certain events described under "--Conversion
Rights," at any time prior to the close of business on , 2005,
unless previously redeemed or repurchased.

The Notes are redeemable at the option of the Company, at any time on or
after , 2001, in whole or in part, at the redemption prices set
forth below under "--Optional Redemption," plus accrued interest to the
redemption date. The Notes also are subject to repurchase by the Company at the
option of the Holders, as described below under "--Repurchase at Option of
Holders Upon a Change of Control."

The principal of, premium, if any, and interest on the Notes will be
payable, and the Notes may be surrendered for registration of transfer, exchange
and conversion, at the office or agency of the Trustee in The Borough of
Manhattan, The City of New York. In addition, payment of interest may, at the
option of the Company, be made by check mailed to the address of the Person
entitled thereto as it appears in the Security Register. See "--Payment and
Conversion." Payments, transfers, exchanges and conversions relating to
beneficial interests in Notes issued in book-entry form will be subject to the
procedures applicable to Global Notes described below.

The Company initially will appoint the Trustee at its Corporate Trust Office
as paying agent, transfer agent, registrar and conversion agent for the Notes.
In such capacities, the Trustee will be responsible for, among other things, (i)
maintaining a record of the aggregate holdings of Notes represented by the
Global Note (as defined below) and accepting Notes for exchange and registration
of transfer, (ii) ensuring that payments of principal, premium, if any, and
interest received by the Company from the Trustee in respect of the Notes are
duly paid to DTC or its nominees, (iii) transmitting to the Company any notices
from Holders of the Notes, (iv) accepting conversion notices and related
documents and transmitting the relevant items to the Company and (v) delivering
certificates for Common Stock issued upon conversion of the Notes.

39
<PAGE>
The Company will cause each transfer agent to act as a registrar and will
cause to be kept at the office of such transfer agent a register in which,
subject to such reasonable regulations as it may prescribe, the Company will
provide for registration of transfers of the Notes. The Company may vary or
terminate the appointment of any paying agent, transfer agent or conversion
agent, or appoint additional or other such agents or approve any change in the
office through which any such agent acts, provided that there shall at all times
be maintained by the Company, a paying agent, a transfer agent and a conversion
agent in the Borough of Manhattan, The City of New York. The Company will cause
notice of any resignation, termination or appointment of the Trustee or any
paying agent, transfer agent or conversion agent, and of any change in the
office through which any such agent will act, to be provided to Holders of the
Notes.

No service charge will be made for any registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES

Notes will be issued only in fully registered form, without interest
coupons, in minimum denominations of $1,000 and integral multiples in excess
thereof. Notes sold in the Offering will be issued only against payment therefor
in immediately available funds.

The Notes initially will be represented by one or more Notes in registered,
global form without interest coupons (collectively, the "Global Notes" or
"Global Note"). The Global Notes will be deposited upon issuance with the
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.

Transfers of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants,
which may change from time to time.

Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for Notes
in certificated form except in the limited circumstances described below under
"--Exchanges of Book-Entry Notes for Certificated Notes."

EXCHANGES OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES. A beneficial interest
in a Global Note may not be exchanged for a Note in certificated form unless (i)
DTC (x) notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Note or (y) has ceased to be a clearing agency
registered under the Exchange Act and in either case the Company thereupon fails
to appoint a successor Depositary, (ii) the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of the Notes in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default with respect to the Notes. In all cases, certificated Notes
delivered in exchange for any Global Note or beneficial interests therein will
be registered in the names, and issued in any approved denominations, requested
by or on behalf of the Depositary (in accordance with its customary procedures).

CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL NOTES. THE DESCRIPTIONS OF THE
OPERATIONS AND PROCEDURES OF DTC, THAT FOLLOW ARE PROVIDED SOLELY AS A MATTER OF
CONVENIENCE. THESE OPERATIONS AND PROCEDURES ARE SOLELY WITHIN THE CONTROL OF
DTC AND ARE SUBJECT TO CHANGES BY THEM FROM TIME TO TIME. THE COMPANY TAKES NO
RESPONSIBILITY FOR THESE OPERATIONS AND PROCEDURES AND URGES INVESTORS TO
CONTACT DTC OR ITS PARTICIPANTS DIRECTLY TO DISCUSS THESE MATTERS.

DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the

40
<PAGE>
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("participants") and facilitate the clearance
and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").

DTC has advised the Company that its current practice, upon the issuance of
a Global Note, is to credit, on its internal system, the respective principal
amount of the individual beneficial interests represented by such Global Note to
the accounts with DTC of the participants through which such interests are to be
held. Ownership of beneficial interests in the Global Note will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by DTC or its nominees (with respect to interests of participants) and the
records of participants and indirect participants (with respect to interests of
persons other than participants).

AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL NOTE,
DTC OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND
HOLDER OF THE NOTES REPRESENTED BY SUCH GLOBAL NOTE FOR ALL PURPOSES UNDER THE
INDENTURE AND THE NOTES. Except in the limited circumstances described above
under "--Exchanges of Book-Entry Notes for Certificated Notes," owners of
beneficial interests in a Global Note will not be entitled to have any portions
of such Global Note registered in their names, will not receive or be entitled
to receive physical delivery of Notes in definitive form and will not be
considered the owners or Holders of the Global Note (or any Notes represented
thereby) under the Indenture or the Notes.

Investors may hold their interests in the Global Note directly through DTC,
if they are participants in such system, or indirectly through organizations
that are participants in such system. All interests in a Global Note will be
subject to the procedures and requirements of DTC.

The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such persons may be limited to
that extent. Because DTC can act only on behalf of its participants, which in
turn act on behalf of indirect participants and certain banks, the ability of a
person having beneficial interests in a Global Note to pledge such interest to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.

Payments of the principal of, premium, if any, and interest on the Note will
be made to DTC or its nominee, as the case may be, as the registered owner of
the Global Note. Neither the Company, the Trustee nor any of their respective
agents will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Note or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

The Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note representing any Notes held by
it or its nominee, will immediately credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Note for such Notes as shown on the records of
DTC or its nominee. The Company also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in "street name." Such payments will be the responsibility of such participants.

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<PAGE>
Interests in the Global Notes will trade in DTC's Same-Day Funds Settlement
System, and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its participants. Transfers between participants in DTC
will be effected in accordance with DTC's procedures, and will be settled in
same-day funds.

DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes (including the presentation of Notes for exchange as
described below and the conversion of Notes) only at the direction of one or
more participants to whose account with DTC interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes as to which such participant or participants has or have given such
direction. However, if there is an Event of Default (as defined below) under the
Notes, DTC reserves the right to exchange the Global Notes for Notes in
certificated form, and to distribute such Notes to its participants.

None of the Company, the Trustee nor any of their respective agents will
have any responsibility for the performance by DTC, its participants or indirect
participants of its respective obligations under the rules and procedures
governing its operations, including maintaining, supervising or reviewing the
records relating to, or payments made on account of, beneficial ownership
interests in Global Notes.

PAYMENT AND CONVERSION

The principal of the Notes will be payable in U.S. dollars, against
surrender thereof at the office or agency of the Company designated by it for
such purpose in the Borough of Manhattan, The City of New York, and at any other
office or agency of the Company maintained for such purpose, in U.S. currency by
dollar check or by transfer to a dollar account (such a transfer to be made only
to a Holder of an aggregate principal amount of Notes in excess of $5,000,000
and only if such Holder shall have furnished wire instructions to the Trustee in
writing no later than 15 days prior to the relevant payment date) maintained by
the Holder with a bank in the United States. Payment of interest on a Note may
be made by dollar check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register, or, upon written application
by the Holder to the Security Registrar setting forth instructions not later
than the relevant Record Date, by transfer to a dollar account (such a transfer
to be made only to a Holder of an aggregate principal amount of Notes in excess
of $5,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the Holder with a bank in the United States.

Any payment on a Note due on any day that is not a Business Day need not be
made on such day, but may be made on the next succeeding Business Day with the
same force and effect as if made on such due date, and no interest shall accrue
on such payment for the period from and after such date. "Business Day," when
used with respect to any place of payment, place of conversion or any other
place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in such place of payment,
place of conversion or other place, as the case may be, are authorized or
obligated by law or executive order to close.

Notes may be surrendered for conversion at the office or agency of the
Company in the Borough of Manhattan, The City of New York, at any other office
or agency of the Company maintained for such purpose. In the case of Global
Notes, conversion will be effected by DTC upon notice from the holder of a
beneficial interest in a Global Note in accordance with its rules and
procedures. Notes surrendered for conversion must be accompanied by a conversion
notice and any payments in respect of interest, as applicable, as described
below under "--Conversion Rights."

CONVERSION RIGHTS

The Holder of any Note will have the right, at the Holder's option, to
convert any portion of the principal amount of a Note that is an integral
multiple of $1,000 into shares of Common Stock, unless previously redeemed or
repurchased, at a conversion rate equal to the number of shares per $1,000

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<PAGE>
principal amount of Notes shown on the front cover of this Prospectus (the
"Conversion Rate"), subject to adjustment as described below. The right to
convert a Note called for redemption or delivered for repurchase will terminate
at the close of business on the Redemption Date or Repurchase Date for such
Note, unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be.

The right of conversion attaching to any Note may be exercised by the Holder
by delivering the Note at the office or agency of the Company in The Borough of
Manhattan, The City of New York, at any other office or agency of the Company
maintained for such purpose and at the office or agency of any additional
conversion agent appointed by the Company, accompanied by a duly signed and
completed notice of conversion, a copy of which may be obtained from the Trustee
and any conversion agent. The conversion date will be the date on which the Note
and the duly signed and completed notice of conversion are so delivered. As
promptly as practicable on or after the conversion date, the Company will issue
and deliver to the Trustee a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share or, at the Company's option, rounded up to the next
whole number of shares; such certificate will be sent by the Trustee to the
Conversion Agent for delivery to the Holder. Such shares of Common Stock
issuable upon conversion of the Notes, in accordance with the provisions of the
Indenture, will be fully paid and nonassessable and will also rank PARI PASSU
with the other shares of the Common Stock outstanding from time to time.

Holders that surrender Notes for conversion on a date that is not an
Interest Payment Date are not entitled to receive any interest for the period
from the next preceding Interest Payment Date to the date of conversion, except
as described below. However, Holders of Notes on a Regular Record Date,
including Notes surrendered for conversion after the Regular Record Date, will
receive the interest payable on such Notes on the next succeeding Interest
Payment Date. Accordingly, any Note surrendered for conversion during the period
from the close of business on a Regular Record Date to the opening of business
on the next succeeding Interest Payment Date must be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Notes being surrendered for conversion; provided, however,
that no such payment will be required upon the conversion of any Note (or
portion thereof) that has been called for redemption or that is eligible to be
delivered for repurchase if, as a result, the right to convert such Note would
terminate during the period between such Regular Record Date and the next
succeeding Interest Payment Date.

No other payment or adjustment for interest, or for any dividends in respect
of Common Stock, will be made upon conversion. Holders of Common Stock issued
upon conversion will not be entitled to receive any dividends payable to holders
of Common Stock as of any record date before the close of business on the
conversion date. No fractional shares will be issued upon conversion but, in
lieu thereof, the Company will calculate an appropriate amount to be paid in
cash on the basis set forth in the Indenture or, at its option, round up to the
next whole number of shares.

A Holder delivering a Note for conversion will not be required to pay any
taxes or duties in respect of the issue or delivery of Common Stock on
conversion. However, the Company shall not be required to pay any tax or duty
that may be payable in respect of any transfer involved in the issue or delivery
of the Common Stock in a name other than that of the Holder of the Note.
Certificates representing shares of Common Stock will not be issued or delivered
unless the person requesting such issue has paid to the Company the amount of
any such tax or duty or has established to the satisfaction of the Company that
such tax or duty has been paid.

The Conversion Rate is subject to adjustment in certain events, including
(a) dividends (and other distributions) payable in Common Stock on shares of
capital stock of the Company, (b) the issuance to all holders of Common Stock of
certain rights, options or warrants entitling them to subscribe for or purchase
Common Stock at less than the then current market price (determined as provided
in the

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<PAGE>
Indenture) of Common Stock as of the record date for holders entitled to receive
such rights, options or warrants, (c) subdivisions, combinations and
reclassifications of Common Stock, (d) distributions to all holders of Common
Stock of evidences of indebtedness of the Company, shares of capital stock or
other property (including securities, but excluding those dividends, rights,
options, warrants and distributions referred to in clauses (a) and (b) above,
dividends and distributions paid exclusively in cash and distributions upon
mergers or consolidations to which the next succeeding paragraph applies), (e)
distributions consisting exclusively of cash (excluding any cash portion of
distributions referred to in (d) above, or cash distributed upon a merger or
consolidation to which the next succeeding paragraph applies) to all holders of
Common Stock in an aggregate amount that, combined together with (i) other such
all-cash distributions made within the preceding 12 months in respect of which
no adjustment has been made and (ii) any cash and the fair market value of other
consideration payable in respect of any tender offer by the Company or any of
its Subsidiaries for Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the current market price per share of Common Stock on the trading day next
succeeding the date of payment (the "Current Market Price"), concluded within
the preceding 12 months in respect of which no adjustment has been made, exceeds
10% of the Company's market capitalization (being the product of the then
current market price of the Common Stock and the number of shares of Common
Stock then outstanding) on the record date for such distribution and (f) the
successful completion of a tender offer made by the Company or any of its
subsidiaries for Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the Current Market Price at such time, the aggregate amount of which, together
with (i) any cash and other consideration in excess of the then current market
price paid in a tender offer by the Company or any of its Subsidiaries for
Common Stock expiring within the 12 months preceding the expiration of such
tender offer in respect of which no adjustment has been made and (ii) the
aggregate amount of any such all-cash distributions referred to in (a) above to
all holders of Common Stock within the 12 months preceding the expiration of
such tender offer in respect of which no adjustments have been made, exceeds 10%
of the Company's market capitalization on the expiration of such tender offer.
The Company reserves the right to make such increases in the conversion rate in
addition to those required in the foregoing provisions as it considers to be
advisable in order that any event treated for income tax purposes as a dividend
or distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock will not be taxable to the recipients. No adjustment of the
conversion rate will be required to be made until the cumulative adjustments
amount to 1.0% or more of the conversion rate. The Company shall compute any
adjustments to the conversion price pursuant to this paragraph and will give
notice to the Holders of any such adjustments.

In case of any consolidation or merger of the Company with or into another
Person or any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock), or in the case of any conveyance, sale,
transfer or lease of all or substantially all of the properties and assets of
the Company, each Note then outstanding will, without the consent of the Holder
of any Note, become convertible only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale,
conveyance, lease or other transfer by a holder of the number of shares of
Common Stock into which such Note was convertible immediately prior thereto
(assuming such holder of Common Stock failed to exercise any rights of election
and that such Note was then convertible).

The Company from time to time may increase the Conversion Rate by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 days' notice of such increase, if the Board of Directors has made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. No such increase shall be taken into
account for purposes of determining whether the closing price of the Common
Stock exceeds the Conversion Price (as defined below) by 105% in connection with
an event which otherwise would be a Change of Control.

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<PAGE>
If at any time the Company makes a distribution of property to its
shareholders that would be taxable to such shareholders as a dividend for
federal income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Company, but generally not stock dividends on Common Stock or
rights to subscribe for Common Stock) and, pursuant to the anti-dilution
provisions of the Indenture, the number of shares into which Notes are
convertible is increased, such increase may be deemed for federal income tax
purposes to be the payment of a taxable dividend to Holders of Notes. See
"Certain United States Federal Tax Considerations-United States Holders".

SUBORDINATION

The payment of the principal of, premium, if any, and interest on the Notes
(including amounts payable on any redemption or repurchase) will be subordinated
in right of payment to the extent set forth in the Indenture to the prior full
and final payment of all Senior Debt of the Company. "Senior Debt" means the
principal of (and premium, if any) and interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) on, and all fees and other amounts (including collection expenses,
attorney's fees and late charges) owing with respect to, the following, whether
direct or indirect, absolute or contingent, secured or unsecured, due or to
become due, outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed: (a) indebtedness of the Company for money borrowed
or evidenced by bonds, debentures, notes or similar instruments, (b)
reimbursement obligations of the Company with respect to letters of credit,
bankers' acceptances and similar facilities issued for the account of the
Company, (c) every obligation of the Company issued or assumed as the deferred
purchase price of property or services purchased by the Company, excluding any
trade payables and other accrued current liabilities incurred in the ordinary
course of business, (d) obligations of the Company as lessee under leases
required to be capitalized on the balance sheet of the lessee under United
States generally accepted accounting principles, (e) obligations of the Company
under interest rate and currency swaps, caps, floors, collars or similar
arrangements intended to protect the Company against fluctuations in interest or
currency exchange rates, (f) indebtedness of others of the kinds described in
the preceding clauses (a) through (e) that the Company has assumed, guaranteed
or otherwise assured the payment thereof, directly or indirectly, and (g)
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness or obligation described in the preceding
clauses (a) through (f) whether or not there is any notice to or consent of the
Holders of Notes; provided, however, that the following shall not constitute
Senior Debt: (i) any particular indebtedness or obligation that is owed by the
Company to any of its direct and indirect Subsidiaries and (ii) any particular
indebtedness, deferral, renewal, extension or refunding if it is expressly
stated in the governing terms or in the assumption thereof that the indebtedness
involved is not senior in right of payment to the Notes or that such
indebtedness is PARI PASSU with or junior to the Notes.

No payment on account of principal of or premium, if any, or interest on the
Notes may be made if (a) there shall have occurred and be continuing (i) a
default in the payment of any Senior Debt or (ii) any other default with respect
to any Senior Debt permitting the holders thereof to accelerate the maturity
thereof, provided that, in the case of this clause (ii), such default shall not
have been cured or waived or ceased to exist after written notice of such
default shall have been given to the Company and the Trustee by any holder of
Senior Debt, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment or event of default. Upon any
acceleration of the principal due on the Notes or payment or distribution of
assets of the Company to creditors upon any dissolution, winding up, liquidation
or reorganization, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due on all Senior
Debt must be paid in full before the Holders of the Notes are entitled to
receive any payment. By reason of such subordination, in the event of insolvency
of the Company, creditors of the Company who are holders of Senior Debt may
recover more, ratably, than the Holders of the Notes, and such subordination may
result in a reduction or elimination of payments to

45
<PAGE>

the Holders of the Notes. As of March 27, 1998 the Company had approximately
$571.0 million of Senior Debt outstanding.

In addition, the Notes will be effectively subordinated to all indebtedness
and other liabilities (including trade payables and lease obligations) of the
Company's Subsidiaries.

The Indenture does not limit the ability of the Company or any of its
subsidiaries to incur indebtedness, including Senior Debt.

OPTIONAL REDEMPTION

The Notes may not be redeemed prior to the close of business on
, 2001. Thereafter, the Notes may be redeemed, in whole or in part,
at the option of the Company, upon not less than 30 nor more than 60 days' prior
notice as provided under "--Notices" below, at the redemption prices set forth
below. Such redemption prices (expressed as a percentage of principal amount)
are as follows for the 12-month period beginning on of the following years:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- -------------------------------------------------------------- -------------
<S> <C>
2001.......................................................... %
2002..........................................................
2003..........................................................
2004..........................................................
</TABLE>

and thereafter at a redemption price equal to 100% of the principal amount, in
each case together with accrued interest to the redemption date.

REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE OF CONTROL

If a Change of Control (as defined below) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase all
of such Holder's Notes, or any portion of the principal amount thereof that is
equal to $1,000 or an integral multiple of $1,000 in excess thereof, on the date
(the "Repurchase Date") that is 45 days after the date of the Company Notice (as
defined below), at a price in cash equal to 100% of the principal amount of the
Notes to be repurchased, together with interest accrued to the Repurchase Date
(the "Repurchase Price").

The Company may, at its option, in lieu of paying the Repurchase Price in
cash, pay the Repurchase Price by issuing shares of Common Stock. The number of
shares of Common Stock tendered in payment shall be determined by dividing the
Repurchase Price by the value of the Common Stock, which for this purpose shall
be equal to 95% of the average of the closing sale prices of the Common Stock
for the five consecutive Trading Days ending on and including the third Trading
Day preceding the Repurchase Date. Such payment may not be made in Common Stock
unless the Company satisfies certain conditions with respect thereto prior to
the Repurchase Date as provided in the Indenture.

On or before the 30th day after the occurrence of a Change of Control, the
Company is obligated to give to all Holders of the Notes notice, as provided in
the Indenture (the "Company Notice"), of the occurrence of such Change of
Control and of the repurchase right arising as a result thereof. To exercise the
repurchase right, a Holder of Notes must deliver on or before the fifth day
prior to the Repurchase Date irrevocable written notice to the Trustee of the
Holder's exercise of such right, together with the Notes with respect to which
the right is being exercised.

A Change of Control shall be deemed to have occurred at such time after the
original issuance of the Notes as there shall occur:

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<PAGE>
(i) the acquisition by any Person of beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction or
series of transactions, of shares of capital stock of the Company entitling
such Person to exercise 50% or more of the total voting power of all shares
of capital stock of the Company entitled to vote generally in elections of
directors, other than any such acquisition by the Company or any employee
benefit plan of the Company; or

(ii) any consolidation or merger of the Company with or into any other
Person, any merger of another Person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of
the properties and assets of the Company to another Person (other than (a)
any such transaction (x) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock
and (y) pursuant to which holders of Common Stock immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total voting power of all shares of capital stock entitled to
vote generally in the election of directors of the continuing or surviving
person immediately after such transaction and (b) any merger which is
effected solely to change the jurisdiction of incorporation of the Company
and results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of common stock of the surviving
entity);

PROVIDED, HOWEVER, that a Change of Control shall not be deemed to have occurred
if the closing sale price per share of the Common Stock for any five Trading
Days within the period of 10 consecutive Trading Days ending immediately after
the later of the date of the Change of Control or the date of the public
announcement of the Change of Control (in the case of a Change of Control under
clause (i) above) or ending immediately before the Change of Control (in the
case of a Change of Control under clause (ii) above) shall equal or exceed 105%
of the Conversion Price of the Notes in effect on each such Trading Day. The
"Conversion Price" is equal to $1,000 divided by the Conversion Rate.
"Beneficial owner" shall be determined in accordance with Rule 13d-3 promulgated
by the Commission under the Exchange Act. "Person" includes any syndicate or
group which would be deemed to be a "person" under Section 13(d)(3) of the
Exchange Act.

The Company may, to the extent permitted by applicable law, at any time
purchase Notes in the open market or by tender at any price or by private
agreement. Subject to certain limitations imposed by the Underwriting Agreement
with the Underwriters, any Note so purchased by the Company may be reissued or
resold or may, at the Company's option, be surrendered to the Trustee for
cancellation. Any Notes surrendered as aforesaid may not be reissued or resold
and will be cancelled promptly.

The foregoing provisions would not necessarily afford Holders of the Notes
protection in the event of highly leveraged or other transactions involving the
Company that may adversely affect Holders.

MERGERS AND SALES OF ASSETS BY THE COMPANY

The Company shall not consolidate with or merge into any other Person or,
directly or indirectly, convey, transfer, sell or lease all or substantially all
of its properties and assets to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or convey, transfer, sell
or lease all or substantially all of its properties and assets to the Company,
unless (a) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased, is a corporation, limited
liability company, partnership or trust organized and existing under the laws of
the United States, any State thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of and, premium,
if any, and interest on the Notes and the performance of the other covenants of
the Company under the Indenture and shall have provided for conversion rights as
described above under "--Conversion Rights", (b) immediately after giving effect
to such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of

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Default, shall have occurred and be continuing, and (c) the Company shall have
provided to the Trustee an Officer's Certificate and Opinion of Counsel as
provided in the Indenture.

EVENTS OF DEFAULT

The following will be Events of Default under the Indenture: (a) failure to
pay principal of or premium, if any, on any Note when due, whether or not such
payment is prohibited by the subordination provisions of the Indenture, (b)
failure to pay any interest on any Note when due, continuing for 30 days,
whether or not such payment is prohibited by the subordination provisions of the
Indenture; (c) default in the Company's obligation to provide notice of a Change
of Control; (d) failure to perform any other material covenant or warranty of
the Company in the Indenture, continuing for 60 days after written notice to the
Company by the Trustee or the Holders of at least 10% in aggregate principal
amount of Outstanding Notes; (e) failure to pay when due the principal of, or
acceleration of, any indebtedness for money borrowed by the Company in excess of
$25 million if such indebtedness is not discharged, or such acceleration is not
annulled, within 30 days after written notice to the Company by the Trustee or
the Holders of at least 10% in aggregate principal amount of Outstanding Notes;
and (f) certain events of bankruptcy, insolvency or reorganization of the
Company. Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Notes will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee.

If an Event of Default (other than an Event of Default specified in clause
(f) above) occurs and is continuing, either the Trustee or the Holders of not
less than 10% in aggregate principal amount of the Outstanding Notes may
accelerate the maturity of all Notes. If an Event of Default specified in clause
(f) occurs and is continuing, the principal of and any accrued interest on all
of the Notes then Outstanding shall ipso facto become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder.

At any time after a declaration of acceleration has been made but before a
judgment or decree based on acceleration has been issued, the Holders of a
majority in aggregate principal amount of Outstanding Notes may, under certain
circumstances as set forth in the Indenture, rescind and annul such acceleration
if all Events of Default, other than the nonpayment of accelerated principal and
interest, have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, See "--Modification and Waiver."

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 10% in aggregate principal
amount of the Outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder of
a Note for the enforcement of payment of the principal of or premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note or of the right to convert such Note in accordance with the Indenture.

The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.

48
<PAGE>
MODIFICATION AND WAIVER

The Indenture will contain provisions permitting the Company and the Trustee
to enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. Generally, modifications and amendments of the Indenture
can only be made with the written consent of the Holders of not less than a
majority in principal amount of the Notes at the time Outstanding. However, no
such modification or amendment may, without the consent of the Holder of each
Outstanding Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest on, any Note, (b) reduce the
principal amount of, or the premium, if any, or rate of interest on, any Note,
(c) modify the provisions with respect to the repurchase right of the Holders in
a manner adverse to the Holders, (d) change the place or currency of payment of
principal of, premium, if any, or interest on any Note, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to, or the
right to convert, any Note, (f) except as otherwise permitted or contemplated by
provisions concerning consolidation, merger, conveyance, transfer, sale or lease
of all or substantially all of the property and assets of the Company, adversely
affect the right to convert Notes, (g) modify the subordination provisions in a
manner adverse to the Holders of the Notes or (h) reduce the above-stated
percentage of aggregate principal amount of Outstanding Notes necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults.

The Holders of a majority in aggregate principal amount of Outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. The Holders of a majority in aggregate principal amount of the
Outstanding Notes may waive any past default by the Company under the Indenture,
except a default in the payment of principal, premium, if any, or interest or a
default in any covenant or provision which under the Indenture cannot be
modified or amended without the consent of each Holder of Outstanding Notes.

NOTICES

Notice to Holders of the Notes will be given by mail to the addresses of
such Holders as they appear in the Security Register. Such notices will be
deemed to have been given on the date of mailing of the notice.

Notice of a redemption of Notes will be given at least once not less than 30
nor more than 60 days prior to the Redemption Date (which notice shall be
irrevocable) and will specify the Redemption Date and the Redemption Price.

PAYMENT OF STAMP AND OTHER TAXES

The Company shall pay all stamp and other duties, if any, which may be
imposed by the United States or any political subdivision thereof or taxing
authority thereof or therein with respect to the issuance of the Notes. The
Company will not be required to make any payment with respect to any other tax,
assessment or governmental charge imposed by any government or any political
subdivision thereof or taxing authority therein.

GOVERNING LAW

The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York without regard to conflict of laws
provisions.

THE TRUSTEE

The Trustee for the holders of Notes issued under the Indenture will be The
Bank of New York.

49
<PAGE>
CERTAIN FEDERAL TAX CONSIDERATIONS

The following is a summary of certain material United States federal income
tax considerations relating to the purchase, ownership and disposition by United
States Holders of the Notes and of Common Stock into which Notes may be
converted, but does not purport to be a complete analysis of all the potential
tax considerations relating thereto. This summary is based on laws, regulations,
rulings and decisions now in effect, all of which are subject to change,
possibly on a retroactive basis. This summary deals only with holders that will
hold Notes and Common Stock into which Notes may be converted as "capital
assets" (within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code")), and does not address tax considerations
applicable to (i) investors that may be subject to special tax rules, such as
banks, tax-exempt organizations, insurance companies, broker-dealers, traders in
securities that elect to mark to market, (ii) persons that will hold Notes as a
position in a hedging transaction, "straddle" or "conversion transaction" for
tax purposes, (iii) persons other than United States Holders or (iv) persons who
have a "functional currency" other than the U.S. dollar. As used herein, the
term "United States Holder" means a beneficial holder of Notes or Common Stock
received on conversion of the Notes that is for United States federal income tax
purposes (1) a citizen or resident of the United States, (2) a corporation
organized under the laws of the United States or any State, (3) an estate the
income of which is subject to the United States federal income taxation
regardless of its source, (4) a trust if (i) a court within the United States is
able to exercise primary supervision over the trust's administration and (ii)
one or more U.S. persons have the authority to control all of the trust's
substantial decisions or (5) a partnership to the extent the interest therein is
owned by a person described in clause (1), (2), (3) or (4) of this sentence.
This summary discusses the tax considerations applicable to an initial purchaser
of the Notes who purchases the Notes at their "issue price" as defined in
Section 1273 of the Code and does not discuss the tax considerations applicable
to subsequent purchasers of the Notes. Moreover, the effect of any applicable
state, local or foreign tax law is not discussed. The Company has not sought any
ruling from the Internal Revenue Service (the "Service") with respect to the
statements made and the conclusions reached in the following summary, and there
can be no assurance that the Service will agree with such statements and
conclusions.

INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX
LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.

PAYMENT OF INTEREST

Interest on a Note generally will be includable in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such holder's method of accounting for United States
federal income tax purposes.

SALE, EXCHANGE OR REDEMPTION OF THE NOTES

Upon the sale, exchange or redemption of a Note (other than the conversion
of a Note into Common Stock), a United States Holder generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash, and
the fair market value of any other property, received on the sale, exchange or
redemption (except to the extent such amount is attributable to accrued interest
income not previously included in income, which is taxable as ordinary income)
and (ii) such holder's adjusted tax basis in the Note. A United States Holder's
adjusted tax basis in a Note generally will equal the cost of the Note to such
holder. Generally, such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the United States Holder's holding period in
the Note is more than one year at the time of sale, exchange or redemption.
Long-term capital gain of a non-corporate United States Holder is generally
subject to a maximum tax rate of 28% in respect of property with a holding
period of more than

50
<PAGE>
one year and to a maximum tax rate of 20% in respect of property with a holding
period of more than 18 months. The characterization of income as capital gain or
loss is also relevant for purposes of, among other things, limitations with
respect to the deductibility of capital losses.

CONSTRUCTIVE DISTRIBUTIONS

If at any time (i) the Company makes a distribution of cash or property to
its stockholders (including distributions of evidences of indebtedness or
assets, but generally not stock dividends or rights to subscribe for Common
Stock) or purchases Common Stock and such distribution or purchase would be
taxable to such stockholders as a dividend for United States federal income tax
purposes and, pursuant to the antidilution provisions of the Indenture, the
conversion rate of the Notes is increased or (ii) the conversion rate of the
Notes is increased at the discretion of the Company, such increase in conversion
rate may be deemed to be the payment of a taxable dividend to Holders of Notes
(pursuant to Section 305 of the Code). Holders of Notes might therefore be
required to recognize taxable income as a result of an event pursuant to which
they received no cash or property.

CONVERSION OF THE NOTES

A United States Holder generally will not recognize any income, gain or loss
upon conversion of a Note into Common Stock except with respect to cash received
in lieu of a fractional share of Common Stock. A holder's tax basis in the
Common Stock received on conversion of a Note will be the same as such holder's
adjusted tax basis in the Note at the time of conversion (reduced by any basis
allocable to a fractional share interest for which cash is received), and the
holding period for the Common Stock received on conversion will generally
include the holding period of the Note converted.

Cash received in lieu of a fractional share of Common Stock upon conversion
will be treated as a payment in exchange for the fractional share of Common
Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common
Stock generally will result in capital gain or loss (measured by the difference
between the cash received for the fractional share and the United States
Holder's adjusted tax basis in the fractional share).

DISTRIBUTIONS

The gross amount of a distribution with respect to the Common Stock will be
treated as a dividend taxable as ordinary income on the date of receipt, to the
extent of the Company's current and accumulated earnings and profits as
determined for United States federal income tax purposes. Distributions in
excess of such current and accumulated earnings and profits will first
constitute a non-taxable return of capital to the extent thereof, and then will
be treated as a capital gain realized on the disposition of the Common Stock.
The portion of any distribution treated as a non-taxable return of capital will
reduce such United States Holder's tax basis in such Common Stock. Subject to
certain limitations, a United States Holder of Common Stock that is a
corporation and that receives dividends on Common Stock generally will be
eligible for a dividends-received deduction equal to 70% of the dividends
received.

Section 1059 of the Code requires a corporate stockholder to reduce its
basis (but not below zero) in the Common Stock by the "nontaxed portion" of any
"extraordinary dividend" if the holder has not held its Common Stock for more
than two years as of the date the amount or payment of such dividend is agreed
to, announced or declared. Generally, the nontaxed portion of an extraordinary
dividend is the amount excluded from income under Section 243 of the Code
(relating to the dividends-received deduction). A corporate stockholder is
required to immediately recognize gain to the extent that its tax basis would
have been reduced below zero.

51
<PAGE>
SALE OF COMMON STOCK

Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash, and the fair market value of any other property, received upon
the sale or exchange and (ii) such holder's adjusted tax basis in the Common
Stock. Such capital gain or loss will be subject to the rules relating to tax
rates and holding periods discussed above under "Sale, Exchange or Redemption of
the Notes". A United States Holder's basis and holding period in Common Stock
received upon conversion of a Note are determined as discussed above under
"Conversion of the Notes."

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

In general, information reporting requirements will apply to payments to
certain noncorporate United States Holders of (i) principal, premium, if any,
and interest on a Note, (ii) dividends on Common Stock, (iii) proceeds of the
sale of a Note and (iv) proceeds of the sale of Common Stock. In addition, a 31%
backup withholding tax may apply to such payments if the United States Holder
(i) fails to furnish or certify his correct taxpayer identification number to
the payor in the manner required, or (ii) does not otherwise establish his
entitlement to an exemption. Any amounts withheld under the backup withholding
rules from a payment to a United States Holder will be allowed as a credit
against such holder's United States federal income tax and may entitle the
United States Holder to a refund, provided that the required information is
furnished to the Service.

52
<PAGE>
VALIDITY OF THE SECURITIES

The validity of the Notes offered hereby will be passed upon for the Company
by Baker & McKenzie, Miami, Florida, and for the Underwriters by Sullivan &
Cromwell, Washington, DC.

EXPERTS

The consolidated financial statements included in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein and elsewhere in the Registration Statement and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 7th Floor, New York, New York 10048. Copies of such materials may be
obtained from the web site that the Commission maintains at http://www.sec.gov.
In addition, such material may also be inspected and copied at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005,
and the Pacific Stock Exchange, Incorporated, 301 Pine Street, San Francisco,
California 94104.

This Prospectus constitutes part of a Registration Statement filed by the
Company with the Commission under the Securities Act. This Prospectus omits
certain of the information contained in the Registration Statement in accordance
with the rules and regulations of the Commission. Reference is hereby made to
the Registration Statement and related exhibits for further information with
respect to the Company and the Notes. Statements contained herein concerning the
provisions of any document are not necessarily completed and, in each instance,
where a copy of such document has been filed as an exhibit to the Registration
Statement or otherwise has been filed with the Commission, reference is made to
the copy so filed. Each such statement is qualified in its entirety by such
reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission (File No. 0-23198)
pursuant to the Exchange Act are incorporated herein by reference:

1. Annual Report on Form 10-K for the fiscal year ended December 26,
1997;

2. Proxy Statement for the Annual Meeting of Stockholders held on May
7, 1998, as supplemented;

3. Quarterly Report on Form 10-Q for the quarter ended March 27, 1998;
and

4. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering made hereby.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Company, 2050
Spectrum Boulevard, Fort Lauderdale, FL 33309, Attention: Dierdre A. Skolfield,
telephone: (954) 938-7600.
------------------------

Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.

53
<PAGE>
INTERIM SERVICES INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report......................................................... F-2

Consolidated Statements of Earnings for the Years Ended December 26, 1997, December
27, 1996 and December 29, 1995..................................................... F-3

Consolidated Balance Sheets as of December 26, 1997 and December 27, 1996............ F-4

Consolidated Statements of Stockholders' Equity for the Years Ended December 26,
1997, December 27, 1996 and December 29, 1995...................................... F-5

Consolidated Statements of Cash Flows for the Years Ended December 26, 1997, December
27, 1996 and December 29, 1995..................................................... F-6

Notes to Consolidated Financial Statements........................................... F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of Interim Services Inc.
Fort Lauderdale, Florida

We have audited the accompanying consolidated balance sheets of Interim
Services Inc. and subsidiaries (the "Company") as of December 26, 1997 and
December 27, 1996, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three years in the period
ended December 26, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Interim Services Inc. and
subsidiaries as of December 26, 1997 and December 27, 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended December 26, 1997, in conformity with generally accepted accounting
principles.

/s/ Deloitte & Touche LLP
Fort Lauderdale, Florida
February 5, 1998

F-2
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
---------- ---------- ---------
<S> <C> <C> <C>
Revenues................................................. $1,608,256 $1,147,151 $ 864,247
Cost of services......................................... 1,081,113 795,789 600,169
---------- ---------- ---------
Gross profit....................................... 527,143 351,362 264,078
---------- ---------- ---------
Selling, general and administrative expenses............. 363,152 243,652 177,105
Licensee commissions..................................... 45,091 39,500 37,295
Amortization of intangibles.............................. 18,492 8,802 6,884
Interest expense......................................... 24,269 5,696 990
Gain on sale of HealthCare business...................... (5,300) -- --
Merger expense........................................... -- 8,600 --
---------- ---------- ---------
445,704 306,250 222,274
---------- ---------- ---------
Earnings before taxes.............................. 81,439 45,112 41,804
Income taxes............................................. 38,928 22,097 18,071
---------- ---------- ---------
Net earnings....................................... $ 42,511 $ 23,015 $ 23,733
---------- ---------- ---------
---------- ---------- ---------
Basic earnings per share................................. $ 1.08 $ 0.71 $ 0.77
---------- ---------- ---------
---------- ---------- ---------
Diluted earnings per share............................... $ 1.05 $ 0.69 $ 0.76
---------- ---------- ---------
---------- ---------- ---------
Basic weighted average shares outstanding................ 39,305 32,450 30,804
---------- ---------- ---------
---------- ---------- ---------
Diluted weighted average shares outstanding.............. 40,407 33,418 31,324
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-3
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

<TABLE>
<CAPTION>
DEC. 26, DEC. 27,
1997 1996
---------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents.......................................... $ 15,570 $ 18,938
Marketable securities.............................................. -- 7,499
Receivables, less allowance for doubtful accounts of $5,229 and
$3,023........................................................... 230,947 186,732
Insurance deposits................................................. 23,974 32,794
Other current assets............................................... 37,610 18,301
---------- ---------
Total current assets............................................. 308,101 264,264
Goodwill, net........................................................ 475,656 173,638
Tradenames and other intangibles, net................................ 219,472 1,109
Property and equipment, net.......................................... 65,475 49,795
Other assets......................................................... 23,030 23,684
---------- ---------
$1,091,734 $ 512,490
---------- ---------
---------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt.................................. $ 33,827 $ --
Accounts payable and other accrued expenses........................ 86,489 27,092
Accrued salaries, wages, and payroll taxes......................... 65,256 40,948
Accrued self-insurance losses...................................... 28,466 26,782
Accrued income taxes............................................... 20,853 159
---------- ---------
Total current liabilities.......................................... 234,891 94,981
Long-Term Debt....................................................... 379,197 --
Deferred Tax Liability............................................... 4,054 2,798
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, par value $.01 per share; authorized 2,500,000
shares; none issued or outstanding............................... -- --
Common stock, par value $.01 per share; authorized 50,000,000
shares; issued and outstanding 39,745,761 and 38,953,368
shares........................................................... 397 390
Additional paid-in capital......................................... 260,067 251,041
Treasury stock..................................................... -- (460)
Retained earnings.................................................. 206,461 163,950
Cumulative translation adjustment.................................. 6,667 (210)
---------- ---------
Total stockholders' equity....................................... 473,592 414,711
---------- ---------
$1,091,734 $ 512,490
---------- ---------
---------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-4
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA )
<TABLE>
<CAPTION>
UNREALIZED
ADDITIONAL GAIN (LOSS) ON CUMULATIVE
COMMON PAID-IN TREASURY MARKETABLE RETAINED TRANSLATION
STOCK CAPITAL STOCK SECURITIES EARNINGS ADJUSTMENT
------------- ----------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of December 30, 1994......... $ 308 $ 85,915 $ -- $ (72) $ 118,883 $ (135)
Net earnings............................ -- -- -- -- 23,733 --
Transactions of pooled Company.......... -- (1,349) -- 98 (1,308) --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- (185)
Proceeds from exercise of employee stock
options............................... -- 401 -- -- -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 29, 1995......... 308 84,967 -- 26 141,308 (320)
Net earnings............................ -- -- -- -- 23,015 --
Transactions of pooled Company.......... -- 271 -- -- (373) --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- 110
Proceeds from exercise of employee stock
option................................ 2 3,116 -- -- -- --
Sale of 7,900,000 shares of common stock
in a public offering, net............. 80 162,595 -- -- -- --
Repurchase of 26,356 shares............. -- -- (460) -- -- --
Other................................... -- 92 -- (26) -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 27, 1996......... 390 251,041 (460) -- 163,950 (210)
Net earnings............................ -- -- -- -- 42,511 --
Change in foreign currency translation
adjustment............................ -- -- -- -- -- 6,877
Proceeds from exercise of employee stock
options, including tax benefit........ 7 8,744 460 -- -- --
Other................................... -- 282 -- -- -- --
----- ----------- ----------- --- ----------- -------------
Balance as of December 26, 1997......... $ 397 $ 260,067 $ -- $ -- $ 206,461 $ 6,667
----- ----------- ----------- --- ----------- -------------
----- ----------- ----------- --- ----------- -------------

TOTAL
---------
<S> <C>
Balance as of December 30, 1994......... $ 204,899
Net earnings............................ 23,733
Transactions of pooled Company.......... (2,559)
Change in foreign currency translation
adjustment............................ (185)
Proceeds from exercise of employee stock
options............................... 401
---------
Balance as of December 29, 1995......... 226,289
Net earnings............................ 23,015
Transactions of pooled Company.......... (102)
Change in foreign currency translation
adjustment............................ 110
Proceeds from exercise of employee stock
option................................ 3,118
Sale of 7,900,000 shares of common stock
in a public offering, net............. 162,675
Repurchase of 26,356 shares............. (460)
Other................................... 66
---------
Balance as of December 27, 1996......... 414,711
Net earnings............................ 42,511
Change in foreign currency translation
adjustment............................ 6,877
Proceeds from exercise of employee stock
options, including tax benefit........ 9,211
Other................................... 282
---------
Balance as of December 26, 1997......... $ 473,592
---------
---------
</TABLE>

See notes to Consolidated Financial Statements.

F-5
<PAGE>
INTERIM SERVICES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Earnings............................................... $ 42,511 $ 23,015 $ 23,733
Adjustments to reconcile net earnings to net cash from
operating activities:
Depreciation and amortization............................ 34,874 18,911 14,556
Deferred income tax (benefit) expense.................... (5,654) 687 (74)
Gain on sale of HealthCare business...................... (5,300) -- --
Changes in assets and liabilities, net of effects of
acquisitions:
Receivables............................................ (48,288) (40,724) (27,458)
Other assets........................................... (12,615) (18,253) (17,999)
Accounts payable and accrued liabilities............... 50,772 8,828 14,030
Other.................................................. 1,457 1,437 (226)
--------- --------- ---------
Net Cash (Used in) Provided by Operating
Activities......................................... 57,757 (6,099) 6,562
--------- --------- ---------

Cash Flows from Investing Activities:
Acquisitions, net of cash acquired......................... (570,356) (11,964) (98,955)
Proceeds from the sale of HealthCare business, net......... 113,109 -- --
Capital expenditures....................................... (24,913) (32,982) (11,303)
Net proceeds from sale (purchase) of marketable
securities............................................... 7,499 15,631 (5,174)
--------- --------- ---------
Net Cash Used in Investing Activities.................. (474,661) (29,315) (115,432)
--------- --------- ---------

Cash Flows from Financing Activities:
Debt proceeds.............................................. 509,019 -- 108,218
Debt repayments............................................ (101,911) (114,727) --
Proceeds from stock offering............................... -- 163,114 --
Other...................................................... 6,428 1,940 (2,195)
--------- --------- ---------
Net Cash Provided by Financing Activities.............. 413,536 50,327 106,023
--------- --------- ---------

Increase (decrease) in cash and cash equivalents............. (3,368) 14,913 (2,847)
Cash and cash equivalents, beginning of period............... 18,938 4,025 6,872
--------- --------- ---------
Cash and cash equivalents, end of period..................... $ 15,570 $ 18,938 $ 4,025
--------- --------- ---------
--------- --------- ---------

Supplement Cash Flow Information:
Income taxes paid.......................................... $ 37,917 $ 21,602 $ 17,570
--------- --------- ---------
--------- --------- ---------

Interest paid.............................................. $ 21,316 $ 6,546 $ 1,452
--------- --------- ---------
--------- --------- ---------
</TABLE>

See notes to Consolidated Financial Statements.

F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS. Interim Services Inc. (the "Company" or "Interim") is a world
leader in staffing, consulting and career management services, including
flexible staffing, full-time placement, executive search, human resources
consulting, workforce management and outplacement. The Company offers a wide
range of skills including information technology, legal, accounting and finance,
human resources, technical, clerical, administrative and light industrial. The
Company operates through a network of offices throughout the United States,
Australia, Canada, France, Germany, Hong Kong, Italy, New Zealand, Spain,
Singapore, The Netherlands and the United Kingdom.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All material
intercompany transactions and balances have been eliminated.

USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Due to the inherent uncertainty involved in making
estimates, actual results reported in future periods may be based upon amounts
which differ from those estimates.

FISCAL YEAR. The Company's fiscal year is comprised of 52 or 53 weeks,
ending on the last Friday in December. The fiscal years ended December 26, 1997,
December 27, 1996 and December 29, 1995 were all 52 weeks.

CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments with original maturities of 90 days or less at the time of purchase
to be cash equivalents. Cash equivalents are carried at cost which approximates
fair value.

MARKETABLE SECURITIES. Marketable securities are comprised of readily
marketable debt securities with remaining maturities of more than 90 days at the
time of purchase. The Company has classified its investment portfolio as trading
securities and the carrying value of such securities has been adjusted to fair
market value, which was not materially different from cost.

ALLOWANCE FOR DOUBTFUL ACCOUNTS. The Company carries accounts receivable at
the amount it estimates to be collectible. Accordingly, the Company provides
allowances for accounts receivable it estimates to be uncollectible based on
management's best estimates. Recoveries are recognized in the period they are
received. The ultimate amount of accounts receivable that become uncollectible
could differ from those estimated.

INTANGIBLE ASSETS. Intangible assets consist principally of goodwill and
tradenames and are being amortized on a straight-line basis over periods of
approximately 38 years. The Company evaluates the recoverability of intangible
assets, as well as amortization periods, to determine whether an adjustment to
carrying values or a revision to estimated useful lives is appropriate.
Recoverability is determined through evaluation of anticipated cash flows on an
undiscounted basis. If the estimated future cash flows are projected to be less
than the carrying value, an impairment write-down would be recorded.

PROPERTY AND EQUIPMENT. Property and equipment are stated at cost and
depreciated using the straight-line method over the estimated useful lives of
the related assets. Leasehold improvements are

F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amortized over the shorter of their estimated useful life or the lease term
using the straight-line method. Maintenance and repairs which do not improve or
extend the life of an asset are expensed as incurred.

ACCRUED SELF-INSURANCE LOSSES. The Company retains a portion of the risk
under its workers' compensation, general liability and professional liability
insurance programs. Reserves have been recorded which reflect the discounted
estimated liabilities including claims incurred but not reported. Losses have
been discounted at approximately 5.8% and 6.2% at December 26, 1997 and December
27, 1996, respectively. Such liabilities are necessarily based on estimates and,
while management believes that the amount is adequate, there can be no assurance
that changes to management's estimates may not occur due to limitations inherent
in the estimation process. Changes in the estimates of these accruals are
charged or credited to income in the period determined. The Company funds
portions of its retained risks through deposits with insurance carriers and
others. These deposits are reflected as insurance deposits on the accompanying
Consolidated Balance Sheets and reflect the estimated fair market value of such
amounts.

FOREIGN CURRENCY TRANSLATION. The Company's foreign operations use the
local currency as their functional currency. Assets and liabilities of these
operations are translated at the exchange rates in effect on the balance sheet
date. Income statement items are translated at the average exchange rates for
the year. The impact of currency fluctuation is included in stockholders' equity
as a translation adjustment.

REVENUE RECOGNITION. The Company generates revenues from sales of services
by its own branch and licensed operations and from royalties earned on sales of
services by its franchise operations. Franchise royalties, which are included in
revenues, were $23,091, $27,009 and $24,316 for the years ended December 26,
1997, December 27, 1996 and December 29, 1995, respectively. Revenues and the
related labor costs and payroll taxes are recorded in the period in which
temporary staffing services are performed. Revenues on placements are recognized
when services provided are substantially completed. Allowances are established
to estimate losses due to placed candidates not remaining employed for the
Company's guarantee period.

THE COMPANY UTILIZES TWO FORMS OF FRANCHISING AGREEMENTS. Under the first
form, the Company records franchise royalties, based upon the contractual
percentage of franchise sales, in the period in which the franchise provides the
service. Under the second form (termed "licensee" by the Company), revenues
generated by the licensee and related direct costs are included as part of the
Company's revenues and cost of services, respectively. The net distribution paid
to the licensee is based upon a percentage of the gross profit generated, and is
captioned "licensee commissions" in the Consolidated Statements of Earnings.

INCOME TAXES. The Company accounts for income taxes under an asset and
liability approach, which requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of temporary differences
between tax bases and financial reporting bases of assets and liabilities. The
Company's policy is to not provide deferred taxes on temporary differences
related to investment in foreign subsidiaries as they are considered permanent
in duration. These differences, primarily undistributed foreign earnings, were
not material at December 26, 1997.

EARNINGS PER SHARE. Basic earnings per share is computed by dividing the
Company's net income by the weighted average number of shares outstanding during
the period.

F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Diluted earnings per share is computed by dividing the Company's net income
by the weighted average number of shares outstanding and the dilutive impact of
common stock equivalents, primarily stock options. The dilutive impact of common
stock equivalents is determined by applying the treasury stock method.

On August 7, 1997, the Company announced a two-for-one stock split in the
form of a 100% stock dividend, to stockholders of record as of the close of
business on August 18, 1997, payable on September 5, 1997. All shares
outstanding and per share amounts have been restated to reflect the stock split.

DERIVATIVE FINANCIAL INSTRUMENTS. The Company enters into interest rate
swap agreements and foreign exchange forward contracts as part of the management
of its interest rate and foreign currency exchange rate exposures; it has no
derivative financial instruments held for trading purposes and none of the
instruments are leveraged. All financial instruments are put into place to hedge
specific exposures. Amounts to be paid or received under swap agreements are
recognized over the terms of the agreements as adjustments to interest expense.
Amounts receivable or payable under the agreements are included in receivables
or accrued expenses in the accompanying Consolidated Balance Sheets. Gains and
losses on foreign currency forward contracts offset gains and losses resulting
from the underlying transactions. Gains and losses on contracts that hedge
specific foreign currency commitments are deferred and recorded in net income in
the period in which underlying transaction is recorded.

STOCK BASED COMPENSATION. The Company has chosen to account for stock-based
compensation to employees using the intrinsic value method as prescribed by
Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued
to Employees," and related Interpretations. Accordingly, compensation cost for
stock options issued to employees is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of grant over the amount
an employee must pay for the stock. Compensation cost related to restricted
stock granted as part of bonus compensation is recognized in the period the
bonus is earned and measured using the quoted market price on the effective
grant date. Compensation cost related to stock options of non-employees is
recorded at fair value (in accordance with SFAS No. 123).

NEW ACCOUNTING PRONOUNCEMENTS. In June 1997, Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," was
issued. 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. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. SFAS No. 130
is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The Company will adopt this standard in 1998.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," was issued. SFAS No. 131 establishes standards for the way
that public companies report selected information about operating segments in
annual financial statements and require that those companies report selected
information about segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about products and
services, geographic areas and major customers and supercedes SFAS No. 14,
"Financial Reporting for Segments of a Business

F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Enterprise." SFAS No. 131 is effective for financial statements for periods
beginning after December 15, 1997. The Company has historically reported its
information under one segment. This standard will require the Company to report
financial information consistent with how the business is managed. The Company
manages its business primarily by skills provided, and thus expects this will
determine its segments to comply with the new standard. The Company will adopt
this standard in 1998.

ACQUISITIONS AND DISPOSITION

ACQUISITIONS

MICHAEL PAGE GROUP, PLC. On April 18, 1997, the Company completed the
purchase of the outstanding shares of Michael Page Group, PLC ("Michael Page"),
a public company in the United Kingdom, for $577,575. Michael Page provides
staffing and placement services primarily in the fields of finance and
accounting with 51 offices in 11 countries. This acquisition was accounted for
under the purchase method of accounting. Accordingly, the operations of Michael
Page are included in the Consolidated Statement of Earnings from the date of
acquisition. The excess of the purchase price over the fair value of the net
tangible assets acquired was $512,469. This amount has been allocated to trade
names and goodwill based upon an independent valuation performed to assist
management in this allocation. Both intangible assets are being amortized over
40 years.

BRANDON SYSTEMS CORPORATION. On May 23, 1996, the Company completed its
merger with Brandon Systems Corporation ("Brandon"), an information technology
staffing company. The Company issued 7,745,380 shares of its common stock in
exchange for 100% of the outstanding shares of Brandon common stock. In
addition, Brandon stock options outstanding at the effective time of the merger
were converted into options to purchase an aggregate of 415,184 additional
Interim common shares. The merger has been accounted for as a
pooling-of-interests for accounting and financial reporting purposes.
Accordingly, the historical financial statements for the periods prior to the
merger are restated as though the companies had been combined. All fees and
expenses related to the merger and the consolidation and restructuring of the
combined companies have been expensed. Such fees and expenses were $8,600.

Revenues of Brandon from periods prior to the merger are included in the
accompanying income statements and were $22,311 for the quarter ended March 29,
1996 and $83,361 for the year ended December 29, 1995. Net earnings and earnings
per share related to Brandon were $1,244 and $0.04, respectively, for the
quarter ended March 29, 1996 and $6,206 and $0.20, respectively, for the year
ended December 29, 1995.

COMPUTER POWER GROUP. Effective December 1, 1995, the Company acquired the
U.S. and U.K. based assets of Computer Power Group ("CPG"), a subsidiary of
Australia-based Computer Power Group, Ltd., for $71,000 in cash. CPG provides
staffing and consulting services in a variety of information technology
disciplines. This acquisition was accounted for under the purchase method of
accounting. Accordingly, the operations of CPG are included in the Consolidated
Statements of Earnings from the date of acquisition. The excess of the purchase
price over the fair value of the net tangible assets acquired (goodwill) was
$56,618 and is being amortized over 40 years.

F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
OTHER ACQUISITIONS. During 1997, 1996 and 1995 the Company made certain
other acquisitions that were accounted for under the purchase method of
accounting. Their operations are included in the Consolidated Statements of
Earnings from the date of acquisition.

The fair value of assets acquired and liabilities assumed (excluding cash
acquired) in connection with the acquisitions follows.

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
--------- ----------- -----------
<S> <C> <C> <C>
Working capital (deficit).................................... $ (8,456) $ 615 $ 9,620
Goodwill and Tradenames...................................... 563,802 12,016 86,715
Other net assets............................................. 15,327 (667) 3,029
Debt assumed................................................. (317) -- (409)
--------- ----------- -----------
Net assets acquired.......................................... $ 570,356 $ 11,964 $ 98,955
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

DISPOSITION

HEALTHCARE DIVISION. On September 26, 1997, the Company completed the sale
of its HealthCare business to Cornerstone Equity Investors IV, L.P. ("Buyer").
The Company received $118,590 in cash at closing ($113,109 net of transaction
related cash costs), with the remainder of the $134,000 purchase price to be
paid upon approval of the ownership transfer of Interim HealthCare of New York
Inc. to the Buyer by New York State regulators. Accordingly, recognition of the
remaining portion of the gain on sale has been postponed pending this final
approval. The pre-tax gain on sale recognized in 1997 was $5,300 with taxes on
the gain of $5,272. Revenues, prior to the sale, related to the HealthCare
business were $189,589, $231,268, $207,242 for the years ended December 26,
1997, December 27, 1996, and December 29, 1995, respectively.

Pursuant to the terms of the sales agreement and subject to certain
restrictions, the Company gave the Buyer a royalty-free license to use the
"Interim" trademark and trade names for an initial period of five years. After
that time, a license fee will be charged. Under a transitional service
agreement, the Company will continue to provide various services to the Buyer
including access to and use of information systems. These services will be
provided at rates included in the agreement which approximate the costs the
Company will incur. This service agreement is for two years with an option to
request an additional year. The Company has provided indemnification to the
Buyer on various pending issues with respect to the HealthCare business
including certain medicare reimbursement issues and the collectibility of loans
related to the businesses' physical therapy student loan program. The Company
does not expect that the outcome of these matters will have a material effect on
the Company's financial position or results of operation.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited Pro Forma Condensed Consolidated Statement of
Earnings of the Company for the year ended December 26, 1997 is based on
historical financial statements of the Company and has been adjusted to reflect
the sale of the Company's HealthCare business, the acquisition of Michael Page
and other acquisitions made since the beginning of the year, as if such
acquisitions and disposition had occurred at the beginning of the year.

F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 26, 1997

<TABLE>
<CAPTION>
PRO FORMA
PROFORMA ACQUISITIONS AFTER
EFFECT OF ------------------------------------------- DISPOSITION
HISTORICAL HEALTHCARE MICHAEL OTHER PRO FORMA AND
INTERIM DISPOSITION(A) PAGE(E) ACQUISITIONS(E) ADJUSTMENTS ACQUISITIONS
---------- -------------- ----------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues......................... $1,608,256 $ (189,589) $ 76,253 $ 25,200 $ (138)(f) $1,519,982
Cost of services................. 1,081,113 (113,050) 38,213 15,717 (138)(f) 1,021,855
---------- -------------- ----------- --------------- ------------- ------------
Gross Profit................. 527,143 (76,539) 38,040 9,483 -- 498,127
---------- -------------- ----------- --------------- ------------- ------------
Selling, general & admin. exp.... 363,152 (61,094) 25,073 6,764 536(g) 334,431
Licensee commissions............. 45,091 (597) -- -- (536)(g) 43,958
Amortization of intangibles...... 18,492 (1,812) -- -- 3,948(h) 20,628
Interest expense................. 24,269 (5,288)(b) (964) -- 13,455(i) 31,472
Gain on sale of HealthCare
Business....................... (5,300) 5,300(c) -- -- -- --
Merger expense................... -- -- 5,064 -- (5,064)(j) --
---------- -------------- ----------- --------------- ------------- ------------
445,704 (63,491) 29,173 6,764 12,339 430,489
---------- -------------- ----------- --------------- ------------- ------------
Earnings before taxes........ 81,439 (13,048) 8,867 2,719 (12,339) 67,638
Income taxes..................... 38,928 (8,793)(d) 4,593 (3,473)(k) 31,255
---------- -------------- ----------- --------------- ------------- ------------
Net earnings................. $ 42,511 $ (4,255) $ 4,274 $ 2,719 $ (8,866) $ 36,383
---------- -------------- ----------- --------------- ------------- ------------
---------- -------------- ----------- --------------- ------------- ------------
Diluted earnings per share....... $ 1.05 $ 0.90
---------- ------------
---------- ------------
Diluted weighted average shares
outstanding.................... 40,407 40,407
---------- ------------
---------- ------------
</TABLE>

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

NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS

(a) To eliminate the results of operations of the HealthCare business. A portion
of the eliminated selling, general and administrative costs reflect
corporate expenses that have been allocated to the HealthCare business or
that will be eliminated. These corporate expenses reflect management's best
estimate of the costs no longer expected to be incurred by Interim
subsequent to the disposition of the HealthCare business.

(b) To reduce interest expense due to the reduction of debt from cash flows
generated from the sale of the HealthCare business.

(d) To reflect the aggregate tax benefit of eliminating the HealthCare business,
taxes on the gain and reducing borrowings.

(e) Reflects the historical financial statements of the acquired companies.
Michael Page's financial statements have been adjusted for differences
between U.S. and U.K. Generally Accepted Accounting Principles. Michael
Page's statement of income has been translated into U.S. dollars using
average exchange rates for the period.

(f) To eliminate royalties as a result of the repurchase of Interim franchises.

(g) To eliminate licensee commissions as a result of the repurchase of several
Interim license operations.

(h) To reflect amortization of goodwill and other intangibles generated by the
acquisitions on a straight-line basis over a weighted average life of 40
years.

(i) To reflect the pro forma effect of interest on the additional borrowings
used to fund the acquisitions. Interest on the credit facilities is computed
at LIBOR plus 85 basis points.

(j) To eliminate one-time costs incurred by Michael Page related to it being
acquired by the Company.

F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ACQUISITIONS AND DISPOSITION (CONTINUED)
(k) To reflect the aggregate tax benefit of pro forma acquisition adjustments.

For the year ended December 27, 1996 revenues, net earnings and diluted
earnings per share would have been $1,201,548, $11,500 and $0.34, respectively,
had these acquisitions and the disposition of the HealthCare business occurred
at the beginning of the period.

INTANGIBLE ASSETS

A summary of intangible assets is as follows:

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE LIFE AVERAGE LIFE
(IN YEARS) DEC. 26, 1997 (IN YEARS) DEC. 27, 1996
----------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C>
Goodwill........................ 37 $ 516,058 29 $ 214,416
Less accumulated amortization... (40,402) (40,778)
-------------- --------------
Goodwill, net................... $ 475,656 $ 173,638
-------------- --------------
-------------- --------------

Tradenames...................... 40 $ 223,216 5 $ 394
Other intangibles............... 5 3,098 5 4,561
-- --
-------------- --------------
38 226,314 29 4,955
Less accumulated amortization... (6,842) (3,846)
-------------- --------------
Tradenames and other
intangibles, Net.............. $ 219,472 $ 1,109
-------------- --------------
-------------- --------------
</TABLE>

Amortization of intangible assets is as follows:

<TABLE>
<CAPTION>
DEC. 26, DEC. 27, DEC. 29,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Goodwill..................................................... $ 14,193 $ 8,241 $ 6,021
Tradenames................................................... 3,877 1 --
Other intangibles............................................ 422 560 863
----------- ----------- -----------
$ 18,492 $ 8,802 $ 6,884
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

PROPERTY AND EQUIPMENT

A summary of property and equipment follows:

<TABLE>
<CAPTION>
LIFE DEC. 26, DEC. 27,
(IN YEARS) 1997 1996
----------- --------- ---------
<S> <C> <C> <C>
Land........................................................ -- $ 4,167 $ 4,167
Buildings................................................... 10 - 40 14,331 11,394
Equipment................................................... 3 - 8 82,871 60,453
Software.................................................... 3 - 5 15,060 14,270
Leasehold improvements and other............................ 3 - 5 7,653 2,419
--------- ---------
124,082 92,703
Less accumulated depreciation and amortization.............. (58,607) (42,908)
--------- ---------
$ 65,475 $ 49,795
--------- ---------
--------- ---------
</TABLE>

Depreciation and amortization of property and equipment for the years ended
December 26, 1997, December 27, 1996 and December 29, 1995 amounted to $16,382,
$10,109, and $7,672, respectively.

F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

LONG-TERM DEBT

The Company's debt as of December 26, 1997 was comprised of the following:

<TABLE>
<S> <C>
U.S. dollar denominated term loan, due 1998 through 2003......... $ 176,700
Revolving loan facility, due 2003--
British pound sterling denominated borrowings.................. 209,488
U.S. dollar denominated borrowings............................. 10,000
Loan notes denominated in British Pound Sterling................. 16,836
---------
413,024
Less current portion of long term debt........................... (33,827)
---------
$ 379,197
---------
---------
</TABLE>

The Company has available $535,908 under a multi-currency syndicated credit
agreement entered into as of May 1, 1997 and amended as of June 2, 1997 ("Credit
Facility"). This agreement provides both a U.S. dollar denominated term loan and
a multi-currency revolving loan facility. Borrowings under this facility are
unsecured. Interest rates on amounts outstanding under the term loan and
revolving loan are based on LIBOR plus a variable margin. The facility contains
customary covenants, which include the maintenance of certain financial ratios
including minimum net worth, restrictions on the incurrence of lines and
additional indebtedness. The average interest rate for the year ending December
26, 1997 was 6.9%.

The Company also has sterling denominated loan notes outstanding payable to
certain former shareholders of Michael Page. Interest on these notes is based on
six month sterling LIBOR less 1%. The Company expects the majority of these
notes to be paid in 1998.

In addition, the Company has established short-term, unsecured, uncommitted
lines of credit with certain banks. These lines of credit are based on LIBOR and
are available to fund the Company's short-term capital requirements.

Under these agreements, the Company had approximately $120.0 million
available for future borrowings as of December 26, 1997.

The maturities of long term debt outstanding at December 26, 1997, are
summarized as follows: $33,827 in 1998, $23,787 in 1999, $33,981 in 2000,
$50,971 in 2001, $50,971 in 2002.

The Company had various credit facilities in place prior to 1997 with
variable interest rates. No debt was outstanding as of December 27, 1996
pursuant to these agreements.

F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

INCOME TAXES

The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Current tax expense:
Federal.................................... $ 23,220 $ 17,062 $ 14,509
State and Local............................ 6,055 4,110 3,636
Foreign.................................... 15,307 238 --
-------------- -------------- --------------
44,582 21,410 18,145
-------------- -------------- --------------
Deferred tax (benefit) expense:
Federal.................................... (3,029) 538 (63)
State and Local............................ (721) 149 (11)
Foreign.................................... (1,904) -- --
-------------- -------------- --------------
(5,654) 687 (74)
-------------- -------------- --------------
Total Provision for Income Taxes............. $ 38,928 $ 22,097 $ 18,071
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

The following table reconciles the U.S. Federal income tax rate to the
Company's effective tax rate:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Statutory Rate............................... 35.0% 35.0% 35.0%
Increase (decrease) in rate resulting from:
State and local income taxes, net of
federal benefit.......................... 4.3 6.2 5.6
Nondeductible amortization of
intangibles.............................. 5.9 3.6 3.9
Sale of HealthCare business................ 3.2 -- --
Merger expense............................. -- 4.7 --
Other, net................................. (0.6) (0.5) (1.3)
--- --- ---
Effective Tax Rate........................... 47.8% 49.0% 43.2%
--- --- ---
--- --- ---
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
are as follows:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996
--------------- ---------------
<S> <C> <C>
Current deferred tax assets:
Employee benefits and self-insurance....................... $ 9,529 $ 2,935
Receivables allowances..................................... 1,354 1,114
Other...................................................... 26 128
------- -------
10,909 4,177
------- -------
Noncurrent deferred tax assets (liabilities):
Fixed assets............................................... (1,123) (1,688)
Intangible assets.......................................... (2,947) (1,075)
Other...................................................... 16 (35)
------- -------
(4,054) (2,798)
------- -------
Net deferred tax assets...................................... $ 6,855 $ 1,379
------- -------
------- -------
</TABLE>

F-15
<PAGE>
EMPLOYEE BENEFIT PLANS

The Company has various savings plans covering substantially all eligible
employees. Company contributions to the plans are based on employee
contributions, the level of the Company match and the attainment of certain
financial objectives. During 1997, plans maintained by three of the Company's
business units were merged into one. Contributions by the Company under these
plans amounted to $2,402, $393 and $666 for the years ended December 26, 1997,
December 27, 1996 and December 29, 1995, respectively.

During 1995, the Company started a deferred compensation plan for certain
employees who are not eligible to participate in the Company's 401(k) savings
plan. This plan was extended to a larger group in 1997. The plan allows eligible
employees to defer receipt of a portion of their compensation. The Company
matches and accrues certain amounts deferred pursuant to this plan based upon
the same criteria as the 401(k) plan. The deferred compensation, along with the
Company matching amounts and accumulated investment earnings, is accrued. Such
accrual amounted to $5,507, $1,821 and $710 at December 26, 1997, December 27,
1996 and December 29, 1995, respectively.

Effective July 1997, the Company adopted a new Employee Stock Purchase Plan
(ESPP) to provide substantially all employees who have been employed for at
least 12 months an opportunity to purchase shares of its common stock at a
discount of 15%. The aggregate amount an employee may purchase is limited to a
maximum of 15% of an employee's compensation up to $25,000 of stock. There were
9,294 shares issued in 1997 under this plan. A total of 590,706 shares are
available as of December 26, 1997 for purchase under the plan which expires on
July 1, 2002.

STOCK-BASED COMPENSATION PLANS

The Company has three primary option stock plans, the 1997 Long-Term
Executive Compensation and Outside Directors Stock Option Plan, the 1997 Stock
Option Plan for employees of Michael Page Group PLC and the 1994 Stock Option
Plan for Franchisees, Licensees and Agents. The 1997 stock option plan for
employees of Michael Page was adopted solely to grant options to employees of
Michael Page to induce them to continue employment after the Michael Page
acquisition. Under the other two plans, options may be granted to outside
directors, selected employees of the Company and its subsidiaries, franchisees,
licensees and agents to purchase the Company's Common Stock for periods not to
exceed ten years at a price that is not less than 100 percent of fair market
value on the date of grant. Options granted under all plans are exercisable
cumulatively 20% to 100% each year beginning one-year after the initial date of
grant. At December 26, 1997 and December 27, 1996, the Company had 1,964,723 and
1,085,606 shares, respectively, reserved for future grants under these plans. In
addition, the Company's Outside Directors Compensation Plan provides for the
annual retainer to be paid in the form of the Company's Common Stock. At
December 26, 1997 and December 27, 1996, 5,027 and 7,162 shares, respectively,
were reserved for future grant under this Plan.

As part of the Company's bonus plan, the Board of Directors has authorized
50,000 shares of Common Stock to be used for payment of a portion of the bonus
payable to certain employees in the form of restricted shares of the Company's
Common Stock. These shares vest ratably over a three-year period. At December
26, 1997 and December 27, 1996, the Company had 21,858 and 3,306 shares,
respectively, reserved for future grant under this plan.

F-16
<PAGE>
Changes under these plans for 1997, 1996 and 1995 were as follows:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- ----------- --------- ----------- --------- -----------
Outstanding at beginning of
year......................... 2,642,554 $ 13.24 2,203,422 $ 10.60 1,614,210 $ 9.28
Granted........................ 1,678,910 18.53 840,326 19.01 826,170 12.86
Exercised...................... (866,241) 11.09 (281,692) 9.49 (94,806) 7.49
Forfeited...................... (353,619) 16.85 (119,502) 14.25 (142,152) 10.89
--------- --------- ---------
Outstanding at end of year..... 3,101,604 $ 16.28 2,642,554 $ 13.24 2,203,422 $ 10.60
--------- --------- ---------
--------- --------- ---------
Options exercisable at
year-end..................... 908,495 $ 13.01 927,968 $ 9.83 650,046 $ 7.78
--------- --------- ---------
--------- --------- ---------
</TABLE>

The following table summarizes information about fixed stock options
outstanding at December 26, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------ -------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
RANGE OF EXERCISE PRICES AT 12/26/97 LIFE PRICE AT 12/26/97 PRICE
- ------------------------- ------------ --------------- ----------- ------------ -----------
$0-$9.99................. 32,000 4.02 $ 6.74 32,000 $ 6.74
$10.00-$14.99............ 952,534 6.64 11.45 639,862 11.21
$15.00-$19.99............ 2,021,762 8.48 18.44 201,753 18.21
$20.00-$24.00............ 95,308 8.75 22.00 34,880 21.89
------------ ----- ----------- ------------ -----------
3,101,604.. 7.88 $ 16.28 908,495 $ 13.01
------------ ----- ----------- ------------ -----------
------------ ----- ----------- ------------ -----------
</TABLE>

The weighted average per share fair values of options granted under the
Company's stock option plans during 1997, 1996 and 1995 were $3.90, $4.03 and
$2.76, respectively. Had the fair value of the grants under these plans been
recognized as compensation expense over the vesting period of the awards,
compensation cost would have been increased by $2,896 ($2,039 after tax, $0.05
per share), $2,136 ($1,524 after tax, $0.05 per share) and $890 ($632 after tax,
$0.02 per share) in 1997, 1996 and 1995, respectively.

The fair value of options at grant date was estimated using the
Black-Scholes multiple option model where each vesting increment is treated as a
separate option with its own expected life and own fair value. The following
weighted average assumptions were used:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Expected life................................ 2 2 2
Interest rate................................ 5.99% 5.94% 5.98%
Volatility................................... 29.79% 30.30% 31.23%
Dividend Yield............................... -- -- --
</TABLE>

SHAREHOLDER RIGHTS PLAN

On February 17, 1994, the Company's Board of Directors adopted a shareholder
rights plan to protect shareholders in the event of an unsolicited attempt to
acquire the Company which is not believed by the Board of Directors to be in the
best interest of shareholders. Under the plan, a dividend of one

F-17
<PAGE>
right (a "Right") per share was declared and paid on each share of the Company's
Common Stock outstanding on April 1, 1994. As to shares issued after such date,
rights will automatically attach to them after their issuance.

Under the plan, registered holders of each Right may purchase from the
Company one one-hundredth of a share of a new class of the Company's Preferred
Stock, $0.01 par value per share, at a price of $150.00, subject to adjustment,
when the Rights become exercisable. The Rights become exercisable when a person
or group of persons acquires 15% or more of the outstanding shares of the
Company's Common Stock without the prior written approval of the Company's Board
of Directors (an "Unapproved Stock Acquisition"), and after ten business days
following the commencement of a tender offer that would result in an Unapproved
Stock Acquisition. If a person or group of persons makes an Unapproved Stock
Acquisition, the registered holder of each Right has the right to purchase, for
the exercise price of the Right, a number of shares of the Company's Common
Stock having a market value equal to twice the exercise price of the Right.
Following an Unapproved Stock Acquisition, if the Company is involved in a
merger, or 50% or more of the Company's assets or earning power are sold, the
registered holder of each Right has the right to purchase, for the exercise
price of the Right, a number of shares of the common stock of the acquiring
company having a market value equal to twice the exercise price of the Right.

After an Unapproved Stock Acquisition, but before any person or group of
persons acquires 50% or more of the outstanding shares of the Company's Common
Stock, the Board of Directors may exchange all or part of the then outstanding
and exercisable Rights for Common Stock at an exchange ratio of one share of
Common Stock per Right. Upon any such exchange, the right of any holder to
exercise a Right terminates.

The Company may redeem the Rights at a price of $0.01 per Right at any time
prior to an Unapproved Stock Acquisition (and after such time in certain
circumstances). The Rights expire on April 1, 2004, unless extended by the Board
of Directors. Until a Right is exercised, the holder thereof, as such, has no
rights as a stockholder of the Company, including the right to vote or to
receive dividends. The issuance of the Rights alone has no dilutive effect and
does not affect reported earnings per share.

FINANCIAL INSTRUMENTS AND FAIR VALUES

The Company had entered into variable to fixed interest rate swap agreements
in the notional amount of $100,000 as of December 26, 1997. These agreements
have expiration dates between 2000 and 2002. Under these agreements, the Company
received an average variable rate of 5.8% and paid an average fixed rate of 6.2%
during the twelve months ended December 26, 1997. The Company also has variable
to variable interest rate swap agreements outstanding at December 26, 1997 with
notional amounts of $225,693, which effectively convert interest from a LIBOR
basis to a broader index and cap the Company's exposure to upward movement in
rates at 8.5%. These agreements expire in 2002. Under these agreements, the
Company received an average variable rate of 6.3% and paid an average variable
rate of 5.4% during the twelve months ended December 26, 1997.

Exposure to market risk on interest rate and foreign currency financial
instruments results from fluctuations in interest and currency rates,
respectively, during the periods in which the contracts are outstanding. The
counterparties to the Company's interest rate swap agreements and currency
exchange contracts consist of a diversified group of major financial
institutions, each of which is rated investment grade A or better. The Company
is exposed to credit risk to the extent of potential nonperformance by
counterparties on financial instruments. Any potential credit exposure does not
exceed the fair value as stated below; the Company believes the risk of
incurring losses due to credit risk is remote.

The cost to terminate the outstanding interest rate swaps as of December 26,
1997 was $5,054. Book value at December 26, 1997 was a $287 receivable. The fair
values of all other financial instruments, including debt, approximate their
book values.

F-18
<PAGE>
COMMITMENTS AND CONTINGENCIES

Substantially all of the Company's operations are conducted in leased
premises. Total lease expense for the years ended December 26, 1997, December
27, 1996 and December 29, 1995 was $19,085, $11,543 and $7,187, respectively.
Future minimum lease payments under non-cancelable leases as of December 26,
1997 are $15,527, $14,593, $12,140, $9,594, $5,747 in 1998, 1999, 2000, 2001 and
2002, respectively.

Additionally, the Company had outstanding irrevocable letters of credit of
approximately $37.8 million (same as fair value). These letters of credit, which
expire in 1998, collateralize the Company's obligation under certain workers'
compensation insurance programs.

The Company in the ordinary course of its business is threatened with or
named as a defendant in various lawsuits. It is not possible to determine the
ultimate disposition of these matters; however, management is of the opinion
that the final resolution of any threatened or pending litigation is not likely
to have a material adverse effect on the financial position or results of
operations of the Company.

GEOGRAPHIC INFORMATION

The Company operates within one industry segment, providing employment
services in the United States, Puerto Rico, Canada, The Netherlands, United
Kingdom, France, Germany, Italy, Spain, Hong Kong, Singapore, Australia and New
Zealand. Prior to April 18, 1997, when the Company acquired Michael Page, the
Company's global interest was almost entirely in North America. For purposes of
this disclosure the Company has grouped its operations into these regions: North
America, Europe, and Asia Pacific.

The table below provides information pertaining to the Company's operation
by geographic area:

<TABLE>
<CAPTION>
DEC. 26, 1997 DEC. 27, 1996 DEC. 29, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues:
North America.............................. $ 1,357,093 $ 1,144,558 $ 864,247
Europe..................................... 214,930 2,593 --
Asia Pacific............................... 36,233 -- --
-------------- -------------- --------------
$ 1,608,256 $ 1,147,151 $ 864,247
-------------- -------------- --------------
-------------- -------------- --------------
Operating Profit:
North America.............................. $ 60,912 $ 58,973 $ 42,794
Europe..................................... 34,963 435 --
Asia Pacific............................... 4,533 -- --
-------------- -------------- --------------
100,408 59,408 42,794
Interest Expense............................. 24,269 5,696 990
Gain on sale of HealthCare business/merger
expenses................................... (5,300) 8,600 --
-------------- -------------- --------------
Earnings before income taxes................. $ 81,439 $ 45,112 $ 41,804
-------------- -------------- --------------
-------------- -------------- --------------
Identifiable Assets:
North America.............................. $ 465,367 $ 512,490 $ 424,489
Europe..................................... 548,268 -- --
Asia Pacific............................... 78,099 -- --
-------------- -------------- --------------
$ 1,091,734 $ 512,490 $ 424,489
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

F-19
<PAGE>
QUARTERLY FINANCIAL DATA (UNAUDITED-AMOUNT IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)

The following is a tabulation of the quarterly results of operations for the
years ended December 26, 1997 and December 27, 1996.

<TABLE>
<CAPTION>
1997 QUARTER ENDED
------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEC. 26, 1997 SEPT. 26, 1997(A) JUNE 27, 1997 MARCH 28, 1997
-------------- ----------------- -------------- ---------------
Revenues................. $ 412,868 $ 455,770 $ 422,833 $ 316,785
Gross profit............. 134,331 153,414 141,958 97,440
Earnings before taxes.... 21,546 26,844 18,375 14,674
Income taxes............. 9,529 14,797 8,453 6,149
Net earnings (loss)...... 12,017 12,047 9,922 8,525
Basic earnings (loss) per
share.................. 0.30 0.31 0.25 0.22
Diluted earnings (loss)
per share.............. 0.29 0.30 0.25 0.21
Share price:
High..................... 31.000 25.625 21.438 21.563
Low...................... 23.625 21.750 17.563 17.125
</TABLE>

<TABLE>
<CAPTION>
1996 QUARTER ENDED
------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEC. 27, 1996 SEPT. 27, 1996 JUNE 28, 1996(B) MARCH 29, 1996
-------------- -------------- ----------------- ---------------
Revenues................. $ 306,527 $ 294,711 $ 281,188 $ 264,725
Gross profit............. 94,521 91,160 86,684 78,997
Earnings before taxes.... 17,237 13,970 4,069 9,836
Income taxes............. 7,192 6,143 4,415 4,347
Net earnings (loss)...... 10,045 7,827 (346) 5,489
Basic earnings (loss) per
share.................. 0.27 0.25 (0.01) 0.18
Diluted earnings (loss)
per share.............. 0.26 0.25 (0.01) 0.17
Share price:
High..................... 22.813 22.000 25.125 20.375
Low...................... 17.000 18.250 17.375 17.125
</TABLE>

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

(a) Includes pretax gain on sale of HealthCare business of $5,300 and taxes of
$5,272.

(b) Includes $8,600 pretax of Brandon merger expenses.

F-20
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each of
such Underwriters, has severally agreed to purchase from the Company, the
principal amount of the Notes set forth opposite its name below:

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
- ------------------------------------------------------------------------ --------------------
<S> <C>
Goldman, Sachs & Co.....................................................
NationsBanc Montgomery Securities LLC...................................
Robert W. Baird & Co. Incorporated......................................
BT Alex. Brown Incorporated.............................................
Chase Securities Inc....................................................
--------------------
Total............................................................. $ 150,000,000
--------------------
--------------------
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.

The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of % of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering price and other selling terms
may from time to time be varied by the representatives.

The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of $22,500,000
principal amount of Notes solely to cover over-allotments, if any. If the
Underwriters exercise their over-allotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the principal amount of the Notes to be purchased
by each of them, as shown in the foregoing table, bears to the $150,000,000
principal amount of Notes offered.

The consummation of the Notes Offering and the Common Stock Offering are not
conditioned upon each other.

The Company has agreed that, during the period beginning from the date of
this Prospectus and continuing to and including the date 90 days after the date
of the Prospectus, it will not offer, sell, contract to sell or otherwise
dispose of any securities of the Company (other than pursuant to employee stock
option plans existing, or on the conversion or exchange of convertible or
exchangeable securities outstanding, on the date of this Prospectus) which are
substantially similar to the shares of the Common Stock or which are convertible
or exchangeable into securities which are substantially similar to the shares of
the Common Stock without the prior written consent of the Underwriters, except
for (i) the shares of Common Stock offered in connection with the concurrent
Common Stock Offering, (ii) the Notes, (iii) the shares of Common Stock issuable
upon conversion of the Notes offered hereby, (iv) 500,000 shares of Common
Stock, or such securities that are convertible or exchangeable for 500,000
shares of Common Stock, issued in connection with any merger or acquisition
announced after the date of this Prospectus, and (v) such additional shares of
Common Stock, or such securities that are convertible or exchangeable for shares
of Common Stock, in excess of 500,000 shares of Common Stock issued in
connection with a merger or acquisition, provided that all the recipients of
such shares of Common Stock or convertible or exchangeable securities agree in
writing not to offer, sell, contract to sell or otherwise dispose of such shares
of Common Stock or convertible or exchangeable securities until after the 90th
day following the date of this Prospectus.

In connection with the Notes Offering and the Common Stock Offering, the
Underwriters may purchase and sell the Common Stock and the Notes in the open
market. These transactions may include

U-1
<PAGE>

over-allotment and stabilizing transactions and purchases to cover syndicate
short positions in connection with the Notes Offering and the Common Stock
Offering. Stabilizing transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price of the Common
Stock or the Notes; and syndicate short positions involve the sale by the
Underwriters of a greater number of shares of Common Stock or Notes than they
are required to purchase from the Company in the Notes Offering or the Common
Stock Offering. The Underwriters also may impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers in respect of
the Common Stock or Notes sold in the Notes Offering and the Common Stock
Offering for their account may be reclaimed by the syndicate if such Common
Stock or Notes are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Common Stock or the Notes, which may be higher than the
price that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
on the New York Stock Exchange, in the over-the-counter market or otherwise.

Each Underwriter has also agreed that (a) it has not offered or sold and
prior to the date six months after the date of issue of the Notes will not offer
or sell any of the Notes to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (b) it has complied, and will
comply with, all applicable provisions of the Financial Services Act of 1988 of
Great Britain with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom, and (c) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Notes to a person who is
of a kind described in Article 11 (3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1995 of Great Britain or is a
person to whom the document may otherwise lawfully be issued or passed on.

The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the Notes.

An affiliate of NationsBanc Montgomery Securities LLC and an affiliate of
Chase Securities Inc. provide certain commercial banking services to the
Company.

The Company intends to use more than 10% of the net proceeds from the sale
of the Notes to repay indebtedness owed by it to an affiliate of NationsBanc
Montgomery Securities LLC and an affiliate of Chase Securities Inc. See "Use of
Proceeds". Accordingly, the Notes Offering is being made in compliance with the
requirements of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. Such rule provides generally that if more than 10% of the
aggregate net proceeds from the sale of debt securities, not including
underwriting compensation, is paid to the underwriters of such debt securities
or their affiliates, the yield on the debt securities may not be lower than that
recommended by a "qualified independent underwriter" (a "QIU") meeting certain
standards. Accordingly, Goldman, Sachs & Co. is assuming the responsibilities of
acting as the QIU in pricing the Notes Offering and conducting due diligence.
The yield on the Notes, when sold to the public at the public offering price set
forth on the cover page of this Prospectus, will be no lower than that
recommended by the QIU.

The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

U-2
<PAGE>
[INSIDE BACK COVER: WORLD MAP INDICATING OFFICE LOCATIONS FOR COMMERCIAL AND
PROFESSIONAL SERVICES]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 10
Use of Proceeds....................... 14
Concurrent Common Stock Offering...... 14
Price Range of Common Stock........... 15
Dividend Policy....................... 15
Capitalization........................ 16
Selected Consolidated Financial and
Operating Data...................... 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 26
Management............................ 37
Description of Notes.................. 39
Certain Federal Tax Considerations.... 50
Validity of the Securities............ 53
Experts............................... 53
Available Information................. 53
Incorporation of Certain Documents by
Reference........................... 53
Index to Consolidated Financial
Statements.......................... F-1
Underwriting.......................... U-1
</TABLE>

$150,000,000

[LOGO]

% CONVERTIBLE SUBORDINATED
NOTES DUE 2005

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

PROSPECTUS

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

GOLDMAN, SACHS & CO.
NATIONSBANC MONTGOMERY
SECURITIES LLC
ROBERT W. BAIRD & CO.
Incorporated

BT ALEX. BROWN
CHASE SECURITIES INC.

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Common Stock and
Notes being registered.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............ $ 50,888
NASD filing fee................................................ 30,000
Accounting fees and expenses................................... 37,500
Legal Fees and expenses........................................ 80,000
Printing and Engraving expenses................................ 75,000
Blue Sky fees and expenses..................................... 1,000
Trustee's Fees and Expenses.................................... 3,000
Miscellaneous.................................................. 72,612
----------
Total...................................................... $ 350,000
----------
----------
</TABLE>

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

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Amended and Restated Certificate of Incorporation and By-laws
provide that the Company shall indemnify its directors and officers and, upon
certain conditions and in certain circumstances, may advance expenses, to the
fullest extent permitted by the General Corporation Law of the State of Delaware
(the "GCL"), except that they do not permit indemnification or eliminate
liability for: (i) any breach of the duty of loyalty to the Company or its
shareholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) an act or omission
expressly described in Section 174 of the GCL; or (iv) any transaction from
which the director derived an improper personal benefit. Generally, Section 145
of the GCL authorizes Delaware corporations, under certain circumstances, to
indemnify their officers and directors against all expenses and liabilities
(including attorneys' fees) incurred by them as a result of any suit brought
against them in their capacity as a director or an officer, if they acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, if they had no reasonable cause to believe their conduct was
unlawful. A director or officer may also be indemnified against expenses
incurred in connection with a suit by or in the right of the corporation if such
director or officer acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification may be made without court approval if such person was adjudged
liable to the corporation. The foregoing provisions may reduce the likelihood of
derivative litigation against directors, officers and employees of the Company
and may discourage or deter shareholders or management from bringing a lawsuit
against directors and officers for breaches of their fiduciary duties, even
though such an action, if successful, might otherwise have benefited the Company
and its shareholders.

Additionally, the Underwriting Agreement provides that the Underwriter shall
indemnify each director of the Company, each officer of the Company who signed
this Registration Statement, and each person who controls the Company for
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended.

II-1
<PAGE>
ITEM 16. EXHIBITS

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME
- ----------- ----------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement (2).

2.1 Agreement and Plan of Merger, filed as an Exhibit to the Company's Proxy
Statement/ Prospectus, dated April 24, 1996 and is incorporated herein by
reference.

4.1 Form of Stock Certificate, filed as Exhibit 4.3 to the Company's Form 10-K for the
fiscal year ended December 27, 1996, is incorporated herein by reference.

4.2 Rights Agreement dated as of March 17, 1994 between the Company and Boatmen's
Trust Company, filed as Exhibit 1.1 to the Company's Form 8-A filed April 11,
1994, is incorporated herein by reference.

4.3 Certificate of Designation, Preferences and Rights filed with the Secretary of
State of the State of Delaware, filed as Exhibit 2.1 to the Company's Form 8- A
filed April 11, 1994, is incorporated herein by reference.

4.4 Amendment No. 1 to Rights Agreement dated June 26, 1996 between the Company,
Boatmen's Trust Company and ChaseMellon Shareholder Services L.L.C., filed as
Exhibit 4.1(A) to the Company's Form 10-Q for the quarter ended September 27,
1996, is incorporated herein by reference.

4.5 Amendment No. 2 to Rights Agreement dated February 25, 1997 between the Company
and ChaseMellon Shareholder Services L.L.C., filed as Exhibit 4.1(B) to the
Company's Form 10-Q for the quarter ended March 28, 1997, is incorporated herein
by reference.

4.6 Articles Fourth, Fifth, Seventh, Eighth and Tenth of the Restated Certificate of
Incorporation of the Company, as amended September 12, 1996, filed as part of
Exhibit 4.4 to the Company's Form 10-K for the fiscal year ended December 27,
1996, are incorporated herein by reference.

4.7 Sections Four through Twelve and Thirty-five through Forty-one of the Bylaws of
the Company, as amended, filed as part of Exhibit 4.2 to registrant's Form S- 3
filed September 16, 1996, are incorporated herein by reference.

4.8 Certificate of Increase of Shares Designated as Participating Preferred Stock,
filed as Exhibit 2.2 to the Corporation's Form 8-A/A2, dated November 3, 1997, is
incorporated herein by reference.

4.9 Form of Indenture including Form of Debenture (2).

5.1 Opinion of Baker & McKenzie (2).

12.1 Statement regarding computation of ratios (2).

23.1 Consent of Baker & McKenzie (included in Exhibit 5.1) (2).

23.2 Consent of Deloitte & Touche LLP (1).

24.1 Power of Attorney (included on Signature Page) (1).

25.1 Statement of eligibility of trustee on Form T-1 (2).

27.1 Financial Data Schedule, filed as Exhibit 27 to the Company's Form 10-Q for the
quarter ended March 27, 1998, is incorporated herein by reference.
</TABLE>

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

(1) Previously filed.

(2) Filed herewith.

II-2
<PAGE>
ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offering therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.

(2) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report, to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation
S-X is not set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the prospectus to
provide such interim financial information.

(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(4) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(5) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

(6) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
section 305(b)2 of the Act.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Fort Lauderdale, state of Florida, on
the 5th day of May, 1998.

INTERIM SERVICES INC.

BY: /S/ RAYMOND MARCY
-----------------------------------------
Raymond Marcy
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
* Director
- ------------------------------ May 5, 1998
Steven S. Elbaum

* Director
- ------------------------------ May 5, 1998
William F. Evans

* Director
- ------------------------------ May 5, 1998
Jerome B. Grossman

* Director
- ------------------------------ May 5, 1998
Cinda A. Hallman

* Director
- ------------------------------ May 5, 1998
J. Ian Morrison

* Director
- ------------------------------ May 5, 1998
A. Michael Victory

Chairman, President and
/s/ RAYMOND MARCY Chief Executive Officer
- ------------------------------ (principal executive May 5, 1998
Raymond Marcy officer)

Executive Vice President
* and Chief Financial
- ------------------------------ Officer (principal May 5, 1998
Roy G. Krause financial officer)

* Vice President--Finance
- ------------------------------ (principal accounting May 5, 1998
Mark W. Smith officer)

*By: /s/ RAYMOND MARCY
-------------------------
Raymond Marcy
ATTORNEY-IN-FACT

II-4

<PAGE>

Exhibit 1.1

Draft of May 1, 1998

INTERIM SERVICES INC.

% CONVERTIBLE SUBORDINATED NOTES DUE 2005
UNDERWRITING AGREEMENT

. . . . . . . ., 1998

Goldman, Sachs & Co.,
NationsBanc Montgomery Securities LLC,
Robert W. Baird & Co. Incorporated,
BT Alex. Brown Incorporated,
Chase Securities Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.

Ladies and Gentlemen:

Interim Services Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$150,000,000 principal amount of the Convertible Subordinated Notes, convertible
into Common Stock (par value $.01 per share) ("Stock") of the Company, specified
above (the "Firm Securities") and, at the election of the Underwriters, up to an
aggregate of $22,500,000 additional aggregate principal amount (the "Optional
Securities") (the Firm Securities and the Optional Securities which the
Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Securities").

1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:

(a) A registration statement on Form S-3 (File No. 333-....) (the
"Initial Registration Statement") in respect of the Securities and shares
of the Stock issuable upon conversion thereof has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed with the Commission; and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued and no

<PAGE>

Draft of May 1, 1998

proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto but excluding Form T-1 and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective or
such part of the Rule 462(b) Registration Statement, if any became or
hereafter becomes effective and (ii) the documents incorporated by
reference in the prospectus contained in the registration statement at the
time such part of the registration statement became effective, each as
amended at the time such part of the registration statement became
effective are hereinafter collectively called the "Registration Statement";
and such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "Prospectus"; and any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;

(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;

(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
Exchange Act as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein

2
<PAGE>

Draft of May 1, 1998

or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;

(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Goldman, Sachs & Co.
expressly for use therein;

(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Registration Statement and the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in
the capital stock or change in excess of $25 million of long-term debt of
the Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;

(f) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case (except for shares of common
stock in its subsidiaries, which the Company has pledged to its lenders
pursuant to a credit agreement dated May 1, 1997 between the Company and
NationsBank) free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries;
and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere in any
material respect with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;

(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by

3
<PAGE>

Draft of May 1, 1998

reason of the failure to be so qualified in any such jurisdiction; and each
active subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;

(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; the shares of Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture referred to below, will be duly and
validly issued, fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims;

(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture dated as of ................, 1998 (the "Indenture") between the
Company and............, as Trustee (the "Trustee"), under which they are
to be issued, which is substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;

(j) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or material instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except the registration
under the Act of the Securities and the shares of Stock issuable upon
conversion thereof, such as have been obtained under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters;

(k) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-Laws or in default in the
performance or observance of any obligation,

4
<PAGE>

Draft of May 1, 1998

agreement, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound which
violation or default would have a material adverse effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;

(l) The statements set forth in the Prospectus under the caption
"Description of Notes" , insofar as they purport to constitute a summary
of the terms of the Securities and under the captions "Certain Federal
Tax Considerations" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects; PROVIDED, HOWEVER,
that this representation and warranty shall not apply to any statements
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Goldman, Sachs & Co.
expressly for use therein;

(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;

(n) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");

(o) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;

(p) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;

(q) The Company owns or possesses adequate licenses or other rights
to use all trademarks, service marks, trade names, copyrights, and know-how
necessary to conduct the business now or proposed to be conducted by the
Company as described in the Prospectus, and the Company has not received
any notice of infringement of or conflict with (and knows of no such
infringement of or conflict with) asserted rights of others with respect to
trademarks, service marks, trade names, copyrights, and know-how which,
individually or in the aggregate, is reasonably likely to result in any
material adverse effect upon the financial position, stockholders' equity
or result in any material adverse effect upon the financial position,
stockholders' equity or

5
<PAGE>

Draft of May 1, 1998

results of operations of the Company, the Company does not in the conduct
of its business as now or proposed to be conducted as described in the
Prospectus, infringe or conflict with any right of any third party, known
to the Company, where such infringement or conflict is reasonably likely to
result in any material adverse effect upon the financial position,
stockholders' equity or results of operations of the Company; and

(r) The Company has obtained any permits, consents and authorizations
required to be obtained by it under laws or regulations relating to its
business, including, without limitation, laws or regulations relating to
the operation and sales of franchises (collectively, "Laws"), and any such
permits, consents and authorizations remain in full force and effect,
except as to any of the foregoing the absence of which (individually or in
the aggregate) will not have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company.
The Company is in compliance with the Laws in all material respects, and
there is no pending or, to the Company's knowledge, threatened, action or
proceeding against the Company under such Laws, other than any such actions
or proceedings which, individually or in the aggregate, if adversely
determined, is not reasonably likely to have a material adverse effect on
the financial position, stockholders' equity or results of operations of
the Company.

2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of .....% of the principal amount thereof, plus accrued
interest, if any, from ...................., 1998 to the Time of Delivery
hereunder, the principal amount of Securities set forth opposite the name of
such Underwriter in Schedule I hereto, and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Securities as provided below, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the same purchase price set forth in
Clause (a) of this Section 2, that portion of the aggregate principal amount of
the Optional Securities as to which such election shall have been exercised (to
be adjusted by you so as to eliminate fractions of $..............,) determined
by multiplying such aggregate principal amount of Optional Securities by a
fraction, the numerator of which is the maximum aggregate principal amount of
Optional Securities which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum aggregate principal amount of Optional Securities which
all of the Underwriters are entitled to purchase hereunder.

The Company hereby grants to the Underwriters the right to purchase at
their election up to $22,500,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in Clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering overallotments in the sale
of Firm Securities. Any such election to purchase Optional Securities may be
exercised by written notice from you to the Company, given within a period of 30
calendar days after the date of this Agreement, setting forth the aggregate
principal amount of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.

3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.

4. (a)The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day)

6
<PAGE>

Draft of May 1, 1998

funds to the account specified by the Company to Goldman, Sachs & Co. at least
forty-eight hours in advance, by causing DTC to credit the Securities to the
account of Goldman, Sachs & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Goldman, Sachs & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Securities, 9:30 a.m., New York City time, on ................, 1998
or such other time and date as Goldman, Sachs & Co. and the Company may agree
upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New
York City time, on the date specified by Goldman, Sachs & Co. in the written
notice given by Goldman, Sachs & Co. of the Underwriters' election to purchase
such Optional Securities, or such other time and date as Goldman, Sachs & Co.
and the Company may agree upon in writing. Such time and date for delivery of
the Firm Securities is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Securities, if not the First Time of Delivery,
is herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".

(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7(j) hereof, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004-2498 (the "Closing
Location"), and the Securities will be delivered at the Designated Office, all
at the Time of Delivery. A meeting will be held at the Closing Location at 4:00
p.m., New York City time, on the New York Business Day next preceding the Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York City are generally authorized or obligated by
law or executive order to close.

5. The Company agrees with each of the Underwriters:

(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to such Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities or the shares of Stock
issuable upon conversion of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification,

7
<PAGE>

Draft of May 1, 1998

promptly to use its best efforts to obtain the withdrawal of such order;

(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;

(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Securities and the shares of
Stock issuable upon conversion of the Securities and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify you and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Securities and
the shares of Stock issuable upon conversion of the Securities at any time nine
months or more after the time of issue of the Prospectus, upon your request but
at the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;

(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);

(e) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Securities or
the Stock, including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than (i) the Stock registered pursuant
to Registration Statement No. 333-____ ;(ii) pursuant to employee stock option
plans, employee stock purchase plans, 401(k) plans, the director's compensation
plan or other employee plans of a similar nature existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding as
of, the date of this Agreement; (iii) 500,000 shares of Stock, or such
securities that are convertible or exchangeable for 500,000 shares of Stock,
issued in connection with any merger or acquisition announced after the date of
the Prospectus; and (iv) such additional shares of Stock, or

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such securities that are convertible or exchangeable for shares of Stock, in
excess of 500,000 shares of Stock issued in connection with a merger or
acquisition, PROVIDED that all the recipients of such shares of Stock or
convertible or exchangeable securities agree in writing not to offer, sell,
contract to sell or otherwise dispose of such shares of Stock or convertible or
exchangeable securities until after the 90th day following the date of the
Prospectus), without your prior written consent;

(f) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;

(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which the Securities or any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);

(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";

(i) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;

(j) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities; and

(k) To use its best efforts to list, subject to notice of issuance, the
shares of Stock issuable upon conversion of the Securities on the New York Stock
Exchange (the "Exchange").

6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities and the shares of Stock
issuable upon conversion of the Securities under the Act and all other expenses
in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Indenture, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities and
the

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Draft of May 1, 1998

shares of Stock issuable upon conversion of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky surveys, provided that such
fees, exclusive of disbursements, shall not exceed $3,000; (iv) any fees charged
by securities rating services for rating the Securities; (v) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the
cost of preparing the Securities; (vii) the fees and expenses of the Trustee and
any agent of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section 6, and Sections
8 and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees and expenses of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.

7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:

(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction (if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 p.m., Washington, D.C. time, on the date of this Agreement);

(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such opinion
is attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (iv), (v), (vi), (ix), (xi) and
(xii) of subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;

(c) Baker & McKenzie, counsel for the Company, shall have furnished to you
their written opinion, (a draft of each such opinion is attached as Annex II(b)
hereto), dated the date of such Time of Delivery, in form and substance
satisfactory to you, to the effect that:

(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus;

(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; and the shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized

10
<PAGE>

Draft of May 1, 1998

and reserved for issuance and, when issued and delivered in accordance with
the provisions of the Securities and the Indenture, will be duly and
validly issued and fully paid and non-assessable, and will conform to the
description of the Stock contained in the Prospectus;

(iii) Each of the Company's active subsidiaries incorporated in the
state of Delaware or the state of Florida (the "Active Delaware/Florida
Subsidiaries") has been duly incorporated and is a corporation validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital
stock of each of the Active Delaware/Florida Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable. All
of the issued shares of capital stock of each of the Company's active
domestic subsidiaries are owned of record directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
Clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);

(iv) This Agreement has been duly authorized, executed and
delivered by the Company;

(v) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform to the descriptions
thereof in the Prospectus;

(vi) The Indenture has been duly authorized, executed and delivered
by the parties thereto and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture has been duly qualified under
the Trust Indenture Act;

(vii) The issuance and sale of the Securities by the Company to the
Underwriters and the fulfillment of and compliance by the Company with all
of the provisions of the Securities, the Indenture and this Agreement do
not violate or result in a breach of the terms or provisions of, or
constitute a default under, any existing obligation of the Company or any
of its subsidiaries under any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument for money borrowed
known to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action violate any of the provisions
of the Certificate of Incorporation or By-Laws of the Company, each as
amended, any applicable statute, rule or regulation or any order known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties;

(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the

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Draft of May 1, 1998

Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such as have been
obtained under the Act and the Trust Indenture Act, such as may be required
under the Act in connection with the shares of Stock issuable upon
conversion of the Securities, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;

(ix) The statements set forth in the Prospectus under the caption
"Description of Notes" insofar as they purport to constitute a summary of
the terms of the Securities, and under the captions "Certain Federal Tax
Considerations" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate and
complete in all material respects;

(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;

(xi) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules and
other financial data therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder;

(xii) On the basis of the information which was reviewed in the
course of the performance of the services referred to in their opinion
considered in the light of their understanding of the applicable law
(including the requirements of the Registration Statement on Form S-3 and
the character of the prospectus contemplated thereby) and the experience
they have gained through their practice under the Act, such counsel are of
the opinion that the Registration Statement, as of its effective date, and
the Prospectus, as of the date of the Prospectus appeared on their face to
be appropriately responsive in all material respects to the requirements of
the Act and the applicable rules and regulations of the Commission
thereunder; and that nothing that came to their attention in the course of
their review has caused them to believe that the Registration Statement, as
of its effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; also, nothing that has come to such counsel's
attention in the course of certain procedures (as described in such
opinion) has caused such counsel to believe that the Prospectus, as of the
date and time of delivery of such opinion, contained any untrue statement
of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that such opinion
may state that the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except as
otherwise specifically referred to in paragraph (ix) above, and that

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Draft of May 1, 1998

such counsel need not express an opinion or belief as to the financial
statements and schedules or other financial data contained in the
Registration Statement or the Prospectus.

(xiii) Such counsel does not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required; and

(xiv) Such counsel shall also confirm that the documents
incorporated by reference in the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;

In giving these opinions, Baker & McKenzie may state that they are
admitted to the bar of the State of New York and Florida and do not
express any opinion as to the laws of any other jurisdiction other than
the federal laws of the United States of America and may rely (1) as to
all matters of fact, upon certificates and written statements of
officers and employees of an accountants for the Company and (2) as to
the qualification and good standing of the Company or any of its
subsidiaries, upon opinions of counsel in such other jurisdictions and
certificates of appropriate government officials.

(d) John B. Smith, Senior Vice President, Secretary and Legal Counsel of
Interim Services Inc., shall have furnished you with a written opinion, a draft
of which is attached as Annex II(c) hereto, dated the date of such Time of
Delivery, in form and substance satisfactory to you, the effect that:

(i) Each of the Company's active subsidiaries incorporated in the
State of Florida has been duly incorporated and is a corporation validly
existing in good standing under the laws of the State of Florida.

(ii) All of the issued shares of capital stock of each of the
Active Florida Subsidiaries have been duly authorized and validly issued,
and are fully paid and nonassessable.

(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
every state of the United States (other than Delaware) and the District of
Columbia (such counsel being entitled to rely in respect of the opinion in
this Clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such opinions and certificates);

(iv) To the best of such counsel's knowledge, neither the Company
nor any of its active domestic subsidiaries or any of Michael Page Group
PLC, Crone Corekill Group PLC or Spectrum Insurance Company Ltd. (together
with the active domestic subsidiaries, collectively referred to herein as
"Active Subsidiaries") is in material violation of their respective
Certificate of Incorporation or By-Laws;

13
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Draft of May 1, 1998

(v) All of the issued shares of capital stock of each of the
Company's active foreign subsidiaries are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
Clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that both of you and they
are justified in relying upon such opinions and certificates).

(vi) The Company has been registered to offer franchises or has
obtained an exemption from registration or has filed notice of franchise
offering or has filed its offer of franchises (and, to such counsel's
knowledge, such registrations, notices and filings are still effective and
have not been revoked) in each jurisdiction in which the conduct of its
business requires such registrations and filings. The Company's current
franchise offering circular substantially complies as to form with
applicable federal laws and regulations regarding the offer and sale of
franchises. To such counsel's knowledge, the Company has never been denied
franchise registration by any jurisdiction and the Company has never been
and is not now the subject of any cease or desist order issued by the
Federal Trade Commission or other federal agency or state agency having
jurisdiction over franchising activities. To such counsel's knowledge, the
offer and sale of each franchise offered or sold by the Company to date
does not constitute the offer and sale of a security under applicable
federal securities laws. The Company's current form of franchise agreement
is enforceable in accordance with its terms. As used in this
paragraph (iv) and in the applicable assumptions, exceptions,
qualifications and limitations set forth below, the terms "franchise",
"franchises", "franchisee" or "franchisees" also include any license or
licenses offered or sold by the Company in connection with the Company's
licensed office program and licensees thereunder, as described in the
Prospectus.

(vii) Except as disclosed in the Prospectus, to the best of such
counsel's knowledge, (i) there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or to
which any property of the Company or any of its subsidiaries is subject
which, if determined adversely to the Company or any of its subsidiaries,
would, individually or in the aggregate, have a material adverse effect on
the consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, which in such counsel's
opinion is not likely to be determined adversely to the Company or any
subsidiary and (ii) no such proceedings are threatened or contemplated by
the governmental authorities or threatened by others.

(e) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Deloitte & Touche LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto");

(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss

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Draft of May 1, 1998

or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus, and (ii) since
the respective dates as of which information is given in the Registration
Statement and the Prospectus there shall not have been any change in the capital
stock or change in excess of $25 million of long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development involving
a prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;

(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with negative
implications, its rating of any of the Company's debt securities;

(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;

(i) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the Exchange;

(j) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and

(k) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.

8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or

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Draft of May 1, 1998

supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Goldman, Sachs & Co.
expressly for use therein.

(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold

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Draft of May 1, 1998

harmless an indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters with respect to the Securities purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by PRO RATA allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.

(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within

17
<PAGE>

Draft of May 1, 1998

thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, you notify the Company
that you have so arranged for the purchase of such Securities, or the Company
notifies you that it has so arranged for the purchase of such Securities, you or
the Company shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities.

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities to be purchased at such Time of
Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Securities which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities to be purchased at such Time of Delivery, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligation of the Underwriters to purchase and of the
Company to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.

10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.

11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in

18
<PAGE>

Draft of May 1, 1998

making preparations for the purchase, sale and delivery of the Securities, but
the Company shall then be under no further liability to any Underwriter except
as provided in Sections 6 and 8 hereof.

12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.

All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.

13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.

14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.

15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.

16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.

19
<PAGE>

Draft of May 1, 1998

If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.

Very truly yours,

Interim Services Inc.

BY: _________________________________
NAME:
TITLE:

Accepted as of the date hereof:

Goldman, Sachs & Co.,
Nationsbanc Montgomery Securities Llc,
Robert W. Baird & Co. Incorporated,
BT Alex. Brown Incorporated,
Chase Securities Inc.

By: _____________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters

20
<PAGE>

Draft of May 1, 1998

SCHEDULE I

PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF OPTIONAL SECURITIES
FIRM SECURITIES TO BE PURCHASED
TO BE IF MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
- ----------- --------- ---------

Goldman, Sachs & Co. . . . . . . . . . $ $
NationsBanc Montgomery Securities, Inc.
Robert W. Baird & Co. Incorporated . .
BT Alex, Brown Incorporated . . . . . .
Chase Securities Inc.

Total . . . . . . . . . . . . . . . .

21
<PAGE>

ANNEX I

Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;

(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial and/or
pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been separately furnished to the representatives of the
Underwriters (the "Representatives");

(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's Quarterly Report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives; and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;

(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;

(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused

22
<PAGE>

them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation
S-K;

(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:

(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;

(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;

(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;

(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;

(E) as of a specified date not more than five days prior to the date
of such letter,

23
<PAGE>

there have been any changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the date of
the latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and

(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and

(vii) In addition to the examination referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference) or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.

<PAGE>

Exhibit 4.9

_______________________________

INTERIM SERVICES INC.

as Issuer

as Trustee

________________

Indenture

Dated as of [ ,] 1998

________________

[ ]% Convertible Subordinated Notes
due [ ,]

_______________________________

<PAGE>

INTERIM SERVICES INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

TRUST INDENTURE
ACT SECTION INDENTURE SECTION

Section 310(a)(1) . . . . . . . . . . . . . . . . . . . 6.9
(a)(2) . . . . . . . . . . . . . . . . . . . 6.9
(a)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 6.8
6.10
Section 311(a) . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . 6.13
Section 312(a) . . . . . . . . . . . . . . . . . . . 7.1
7.2
(b) . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . 7.2
Section 313(a) . . . . . . . . . . . . . . . . . . . 7.3
(b) . . . . . . . . . . . . . . . . . . . 7.3
(c) . . . . . . . . . . . . . . . . . . . 7.3
(d) . . . . . . . . . . . . . . . . . . . 7.3
Section 314(a) . . . . . . . . . . . . . . . . . . . 7.4
(a)(4) . . . . . . . . . . . . . . . . . . . 1.1
10.4
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 1.2
(c)(2) . . . . . . . . . . . . . . . . . . . 1.2
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . 1.2
Section 315(a) . . . . . . . . . . . . . . . . . . . 6.1
(b) . . . . . . . . . . . . . . . . . . . 6.2
(c) . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . 5.14
Section 316(a) . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . 5.2
5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . 1.4
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . 10.3
Section 318(a) . . . . . . . . . . . . . . . . . . . 1.7

___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

<PAGE>

TABLE OF CONTENTS
___________

PAGE

RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Applicable Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Cash Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request" or "Company Order . . . . . . . . . . . . . . . . . . . . . 4
Constituent Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollar" or "U.S.$. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Excess Purchase Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Expiration Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Global Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

-i-

<PAGE>

PAGE

Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Market Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Non-electing Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Record Date Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register" and "Security Registrar . . . . . . . . . . . . . . . . . 7
Senior Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trading Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . 9
SECTION 1.3. Form of Documents Delivered to the Trustee . . . . . . . . . . 9
SECTION 1.4. Acts of Holders of Securities. . . . . . . . . . . . . . . . . 10
SECTION 1.5. Notices, Etc., to Trustee and Company. . . . . . . . . . . . . 12
SECTION 1.6. Notice to Holders of Securities; Waiver. . . . . . . . . . . . 12
SECTION 1.7. Effect of Headings and Table of Contents . . . . . . . . . . . 13
SECTION 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.9. Separability Clause. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.12. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.13. Conflict with Trust Indenture Act . . . . . . . . . . . . . . 14

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

PAGE

ARTICLE TWO

SECURITY FORMS

SECTION 2.1. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.2. Forms of Securities. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.3. Form of Trustee's Certificate of Authentication . . . . . . . 22
SECTION 2.4. Form of Conversion Notice. . . . . . . . . . . . . . . . . . . 23

ARTICLE THREE

THE SECURITIES

SECTION 3.1. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.2. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.3. Execution, Authentication, Delivery and Dating . . . . . . . . 24
SECTION 3.4. Temporary Securities . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.5. Global Securities; Non-Global Securities . . . . . . . . . . . 25
SECTION 3.6. Registration, Registration of Transfer and Exchange. . . . . . 27
SECTION 3.7. Mutilated, Destroyed, Lost or Stolen Securities. . . . . . . . 28
SECTION 3.8. Payment of Interest; Interest Rights Preserved . . . . . . . . 28
SECTION 3.9. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.10. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.11. Computation of Interest . . . . . . . . . . . . . . . . . . . 30
SECTION 3.12. CUSIP and ISIN Numbers. . . . . . . . . . . . . . . . . . . . 30

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 4.1. Satisfaction and Discharge of Indenture. . . . . . . . . . . . 31
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . 32

ARTICLE FIVE

REMEDIES

SECTION 5.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . . . . 34
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 35
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities. . 36
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . 36
SECTION 5.7. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 36

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

PAGE

SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert. . . . . . . . . . . . . . 37
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . 37
SECTION 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . 37
SECTION 5.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . 38
SECTION 5.12. Control by Holders of Securities. . . . . . . . . . . . . . . 38
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 38
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.15. Waiver of Stay, Usury or Extension Laws . . . . . . . . . . . 39

ARTICLE SIX

THE TRUSTEE

SECTION 6.1. Certain Duties and Responsibilities. . . . . . . . . . . . . . 39
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.3. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . 40
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities . . . . 42
SECTION 6.5. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.6. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . 42
SECTION 6.8. Disqualification; Conflicting Interests. . . . . . . . . . . . 43
SECTION 6.9. Corporate Trustee Required; Eligibility. . . . . . . . . . . . 43
SECTION 6.10. Resignation and Removal; Appointment of Successor . . . . . . 43
SECTION 6.11. Acceptance of Appointment by Successor. . . . . . . . . . . . 44
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business . 45
SECTION 6.13. Preferential Collection of Claims Against Company . . . . . . 45
SECTION 6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . 45

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders. . . 47
SECTION 7.2. Preservation of Information; Communications to Holders . . . . 47
SECTION 7.3. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.4. Reports by Company . . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms . . . . . 48
SECTION 8.2. Successor Substituted. . . . . . . . . . . . . . . . . . . . . 49

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

PAGE

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 9.1. Supplemental Indentures Without Consent of Holders of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.2. Supplemental Indentures with Consent of Holders of Securities. 50
SECTION 9.3. Execution of Supplemental Indentures . . . . . . . . . . . . . 51
SECTION 9.4. Effect of Supplemental Indentures. . . . . . . . . . . . . . . 51
SECTION 9.5. Conformity with Trust Indenture Act. . . . . . . . . . . . . . 51
SECTION 9.6. Reference in Securities to Supplemental Indentures . . . . . . 51

ARTICLE TEN

COVENANTS

SECTION 10.1. Payment of Principal, Premium and Interest. . . . . . . . . . 52
SECTION 10.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . 52
SECTION 10.3. Money for Security Payments to Be Held in Trust . . . . . . . 52
SECTION 10.4. Statement by Officers as to Default . . . . . . . . . . . . . 53
SECTION 10.5. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.6. Maintenance of Properties . . . . . . . . . . . . . . . . . . 54
SECTION 10.7. Payment of Taxes and Other Claims . . . . . . . . . . . . . . 54
SECTION 10.8. Registration and Listing. . . . . . . . . . . . . . . . . . . 54
SECTION 10.9. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . 55

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 11.1. Right of Redemption . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.2. Applicability of Article. . . . . . . . . . . . . . . . . . . 55
SECTION 11.3. Election to Redeem; Notice to Trustee . . . . . . . . . . . . 55
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed . . . . . . 56
SECTION 11.5. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.6. Deposit of Redemption Price . . . . . . . . . . . . . . . . . 57
SECTION 11.7. Securities Payable on Redemption Date . . . . . . . . . . . . 57
SECTION 11.8. Securities Redeemed in Part . . . . . . . . . . . . . . . . . 58

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

PAGE

ARTICLE TWELVE

CONVERSION OF SECURITIES

SECTION 12.1. Conversion Privilege and Conversion Rate . . . . . . . . . . 58
SECTION 12.2. Exercise of Conversion Privilege . . . . . . . . . . . . . . 58
SECTION 12.3. Fractions of Shares. . . . . . . . . . . . . . . . . . . . . 59
SECTION 12.4. Adjustment of Conversion Rate. . . . . . . . . . . . . . . . 60
SECTION 12.5. Notice of Adjustments of Conversion Rate . . . . . . . . . . 63
SECTION 12.6. Notice of Certain Corporate Action . . . . . . . . . . . . . 64
SECTION 12.7. Company to Reserve Common Stock. . . . . . . . . . . . . . . 65
SECTION 12.8. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . 65
SECTION 12.9. Covenant as to Common Stock. . . . . . . . . . . . . . . . . 65
SECTION 12.10. Cancellation of Converted Securities . . . . . . . . . . . . 65
SECTION 12.11. Provision in Case of Consolidation, Merger or Sale of
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 12.12. Responsibility of Trustee for Conversion Provisions. . . . . 67

ARTICLE THIRTEEN

SUBORDINATION OF SECURITIES

SECTION 13.1. Securities Subordinate to Senior Debt . . . . . . . . . . . . 67
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . 67
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 13.4. No Payment When Senior Debt in Default. . . . . . . . . . . . 69
SECTION 13.5. Payment Permitted If No Default . . . . . . . . . . . . . . . 69
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt . . . . . . . 70
SECTION 13.7. Provisions Solely to Define Relative Rights . . . . . . . . . 70
SECTION 13.8. Trustee to Effectuate Subordination . . . . . . . . . . . . . 70
SECTION 13.9. No Waiver of Subordination Provisions . . . . . . . . . . . . 70
SECTION 13.10. Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt . . . . . . 72
SECTION 13.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights . . . . . . . . . . . . . . 72
SECTION 13.14. Article Applicable to Paying Agents. . . . . . . . . . . . . 72
SECTION 13.15. Certain Conversions and Repurchases Deemed Payment . . . . . 73

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

PAGE

ARTICLE FOURTEEN

REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE OF CONTROL

SECTION 14.1. Right to Require Repurchase . . . . . . . . . . . . . . . . . 73
SECTION 14.2. Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock. . . . . . . . . . . . . . . 74
SECTION 14.3. Notices; Method of Exercising Repurchase Right, Etc.. . . . . 74
SECTION 14.4. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 77

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE>

INDENTURE, dated as of [ ,] 1998, between INTERIM SERVICES
INC., a corporation duly organized and existing under the laws of Delaware,
having its principal executive office at (herein
called the "Company"), and , a banking corporation, as
Trustee hereunder (herein called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of its [
]% Convertible Subordinated Notes due [ ,] (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.

All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. Further, all
things necessary to duly authorize the issuance of the Common Stock of the
Company issuable upon the conversion of the Securities, and to duly reserve for
issuance the number of shares of Common Stock issuable upon such conversion,
have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 1.1. DEFINITIONS.

For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

(3) unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended from time to
time; and

<PAGE>

(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of such
computation; and

(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Agent Member" means any member of, or participant in, the Depositary.

"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, to the extent
applicable to such transaction and as in effect from time to time.

"Authenticating Agent" means any Person authorized pursuant to
Section 6.14 to act on behalf of the Trustee to authenticate Securities.

"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.

"Board Resolution" means a vote duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.

"Business Day", when used with respect to any place of payment, place
of conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such place of payment, place of conversion or other place, as
the case may be, are authorized or obligated by law or executive order to close;
PROVIDED, HOWEVER, that a day on which banking institutions in New York,
New York are authorized or obligated by law or executive order to close shall
not be a Business Day for purposes of Sections 10.1, 10.3 or 11.7.

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<PAGE>

"Cash Distribution" means the distribution by the Company to all
holders of its Common Stock of cash, other than any cash that is distributed
upon a merger or consolidation to which Section 12.11 applies or as part of a
distribution referred to in paragraph (4) of Section 12.4.

"Change of Control" has the meaning specified in Section 14.4.

"Closing Price" means, with respect to the Common Stock of the
Company, for any day, the reported last sale price per share on the New York
Stock Exchange or, if the Common Stock is not listed on the New York Stock
Exchange, on the principal national securities exchange or inter-dealer
quotation system on which the Common Stock is listed or admitted to trading, or
if not listed on the New York Stock Exchange or listed or admitted to trading on
any national securities exchange or inter-dealer quotation system, the average
of the closing bid and asked prices per share in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose.

"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

"Common Stock" means the Common Stock, $.01 par value, of the Company
authorized at the date of this instrument as originally executed. Subject to the
provisions of Section 12.11, shares issuable on conversion or repurchase of
Securities shall include only shares of Common Stock or shares of any class or
classes of common stock resulting from any reclassification or reclassifications
thereof; PROVIDED, HOWEVER, that if at any time there shall be more than one
such resulting class, the shares so issuable on conversion of Securities shall
include shares of all such classes, and the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

"common stock" includes any stock of any class of capital stock which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
issuer thereof and which is not subject to redemption by the issuer thereof.

"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

"Company Notice" has the meaning specified in Section 14.3.

"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President or a Vice President, and by its principal
financial officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.

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<PAGE>

"Constituent Person" has the meaning specified in Section 12.11.

"Conversion Rate" has the meaning specified in Section 12.1.

"Corporate Trust Office" shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of the Indenture is
located at [ ], Attention: Corporate Trust and Agency Group
or at any other time at such other address as the Trustee may designate from
time to time by notice to the Noteholders.

"Corporation" means a corporation, company, association, joint-stock
company or business trust.

"Defaulted Interest" has the meaning specified in Section 3.8.

"Depositary" means, with respect to any Security, a clearing agency
that is registered as such under the Exchange Act and is designated by the
Company to act as Depositary for such Security (or any successor securities
clearing agency so registered).

"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender offer,
the last time that tenders could have been made pursuant to such tender offer.

"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.

"DTC" means The Depository Trust Company, a New York corporation.

"Event of Default" has the meaning specified in Section 5.1.

"Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.

"Excess Purchase Payment" means the excess, if any, of (i) the amount
of cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution) of
any non-cash consideration required to be paid with respect to one share of
Common Stock acquired or to be acquired in a tender offer made by the Company or
any Subsidiary for all or any portion of the Common Stock over (ii) the current
market price per share as of the last time that tenders could have been made
pursuant to such tender offer.

"Expiration Date" has the meaning specified in Section 1.4.

"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.

-4-
<PAGE>

"Holder" means the Person in whose name a Security is registered in
the Security Register.

"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.

"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.

"Market Capitalization" means, with respect to a specified date, the
product of (i) the current market price per share (determined as provided in
paragraph (8) of Section 12.4) of the Common Stock as of such date times (ii)
the number of shares of Common Stock outstanding on such date.

"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.

"Non-electing Share" has the meaning specified in Section 12.11.

"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President or a Vice President and
by the principal financial officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company and who shall be reasonably acceptable to the Trustee.

"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT:

(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;

(ii) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities, PROVIDED that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and

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<PAGE>

(iii) Securities which have been paid pursuant to Section 3.7 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor.

"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.

"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

"Record Date" means any Regular Record Date or Special Record Date.

"Record Date Period" means the period from the close of business of
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on such Interest Payment Date.

"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for interest payable in respect of any Security
on any Interest Payment Date means the [ or ]
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.

"Repurchase Date" has the meaning specified in Section 14.1.

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<PAGE>

"Repurchase Price" has the meaning specified in Section 14.1.

"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".

"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.

"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.6.

"Senior Debt" means the principal of (and premium, if any) and
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts (including collection expenses, attorney's fees and late charges)
owing with respect to, the following, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, outstanding at the date
of execution of this Indenture or thereafter incurred, created or assumed: (a)
indebtedness of the Company for money borrowed or evidenced by bonds,
debentures, notes or similar instruments, (b) reimbursement obligations of the
Company with respect to letters of credit, bankers' acceptances and similar
facilities issued for the account of the Company, (c) every obligation of the
Company issued or assumed as the deferred purchase price of property or services
purchased by the Company, excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business, (d) obligations of the
Company as lessee under leases required to be capitalized on the balance sheet
of the lessee under United States generally accepted accounting principles, (e)
obligations of the Company under interest rate and currency swaps, caps, floors,
collars or similar arrangements intended to protect the Company against
fluctuations in interest or currency exchange rates, (f) indebtedness of others
of the kinds described in the preceding clauses (a) through (e) that the Company
has assumed, guaranteed or otherwise assured the payment thereof, directly or
indirectly, and/or (g) deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness or obligation
described in the preceding clauses (a) through (f) whether or not there is any
notice to or consent of the Holders; PROVIDED, HOWEVER, that the following shall
not constitute Senior Debt: (i) any particular indebtedness or obligation that
is owed by the Company to any of its direct and indirect Subsidiaries and (ii)
any particular indebtedness, deferral, renewal, extension or refunding if it is
expressly stated in the governing terms or in the assumption thereof that the
indebtedness involved is not senior in right of payment to the Securities or
that such indebtedness is PARI PASSU with or junior to the Securities.

"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Company pursuant to Section 3.8.

"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.

"Subsidiary" means a corporation, limited liability company,
partnership or other entity more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by

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<PAGE>

the Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock or other equity interests in the corporation, limited liability
company, partnership or other entity which ordinarily has or have voting power
for the election of directors, or persons performing similar functions, whether
at all times or only so long as no senior class of stock or other interests has
or have such voting power by reason of any contingency.

"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

"Trading Day" means (i) if the Common Stock is listed or admitted for
trading on the New York Stock Exchange or any other national securities
exchange, a day on which such exchange is open for business; (ii) if the Common
Stock is quoted on the Nasdaq National Market or any other system of automated
dissemination of quotations of securities prices, a day on which trades may be
effected through such system; or (iii) if the Common Stock is not listed or
admitted for trading on any national securities exchange or quoted on the Nasdaq
National Market or any other system of automated dissemination of quotation of
securities prices, a day on which the Common Stock is traded regular way in the
over-the-counter market and for which a closing bid and a closing asked price
for the Common Stock are available.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".

SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.

Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

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<PAGE>

Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;

(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO THE TRUSTEE.

In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 1.4. ACTS OF HOLDERS OF SECURITIES.

Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record is delivered to the Trustee and, where it is hereby
expressly required, to the

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<PAGE>

Company. The Trustee shall promptly deliver to the Company copies of all such
instruments and records delivered to the Trustee. Such instrument or
instruments and record (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders of Securities
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy, or of the holding
by any Person of a Security, shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section.

The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of execution of any such instrument or
writing and the authority of the Person executing the same may also be proved in
any other manner which the Trustee deems sufficient.

The ownership of Securities shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, regardless of whether notation of such action is made upon
such Security.

The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders, PROVIDED that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, regardless of whether such Holders remain
Holders after such record date; PROVIDED that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date, if any, by
Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities in the manner set forth in Section 1.6.

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<PAGE>

The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 5.2, (iii) any request to institute proceedings referred
to in Section 5.7(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, regardless of whether such
Holders remain Holders after such record date; PROVIDED that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date, if any, by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
(whereupon the record date previously set shall automatically and without any
action by any Person be cancelled and of no effect), nor shall anything in this
paragraph be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities in the manner set forth in
Section 1.6.

With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, PROVIDED that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 1.6, on or prior
to the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the party hereto that
set such record date shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

SECTION 1.5. NOTICES, ETC., TO TRUSTEE AND COMPANY.

Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of Holders of Securities or other document
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with,

(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee and received at its Corporate Trust Office,
Attention: , or

(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing, mailed, first-class postage prepaid, or telecopied and
confirmed by mail, first-class postage prepaid, or

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<PAGE>

delivered by hand or overnight courier, addressed to the Company at
, telecopy no.: ( ) - , Attention:
, Secretary or at any other address previously furnished in writing to the
Trustee by the Company.

SECTION 1.6. NOTICE TO HOLDERS OF SECURITIES; WAIVER.

Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders.

Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

SECTION 1.8. SUCCESSORS AND ASSIGNS.

All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 1.9. SEPARABILITY CLAUSE.

In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.10. BENEFITS OF INDENTURE.

Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt and the Holders of Securities, any benefit
or any legal or equitable right, remedy or claim under this Indenture.

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<PAGE>

SECTION 1.11. GOVERNING LAW.

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF
AMERICA WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.

SECTION 1.12. LEGAL HOLIDAYS.

In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert his Security shall not be a Business
Day at a place of payment or place of conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or conversion of, such
Security need not be made on such day, but may be made on or by the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated
Maturity or on such last day for conversion; PROVIDED, HOWEVER, that in the case
that payment is made on such succeeding Business Day, no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Repurchase Date, Stated Maturity or last day for conversion, as the case may be,
to such succeeding Business Day.

SECTION 1.13. CONFLICT WITH TRUST INDENTURE ACT.

If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such act to be a
part of and govern this Indenture, the latter provision of the Trust Indenture
Act shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision of the Trust Indenture Act shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.

ARTICLE TWO

SECURITY FORMS

SECTION 2.1. FORMS GENERALLY.

The Securities shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.

The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner provided that it is permitted by the rules of
any securities exchange on which the Securities

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<PAGE>

may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution thereof.

Upon their original issuance, the Securities shall be issued in the
form of one or more Global Securities registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct).

SECTION 2.2. FORMS OF SECURITIES.

[FORM OF FACE]

[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS SECURITY IS
A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND
NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[IF THE SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST COMPANY
IS TO BE THE DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

INTERIM SERVICES INC.

[ ]% CONVERTIBLE SUBORDINATED NOTE DUE[ ,]

No. _____________ $_____

[CUSIP NO. ]

INTERIM SERVICES INC., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture referred to on the reverse hereof), for
value received, hereby promises to pay to

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<PAGE>

_______________, or registered assigns, the principal sum of _____________
Dollars ($_____) [IF THIS SECURITY IS A GLOBAL SECURITY, THEN INSERT -- (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $ in the aggregate at any
time) by adjustments made on the records of the Trustee hereinafter referred to
in accordance with the Indenture)] on [ ,] and to pay interest
thereon, from [ ,] 1998, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on[
and ] in each year, commencing [ ,] 1998,
at the rate of [ ] % per annum, until the principal hereof is due, and at the
rate of [ ] % per annum on any overdue principal and premium, if any, and,
to the extent permitted by law, on any overdue interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the [
or ] (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of (and premium, if any, on) this Security shall be made upon the
surrender of this Security at the option of the Holder at the office or agency
of the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, or at such other offices or agencies as the Company
may designate, by Dollar check or by transfer to a Dollar account (such a
transfer to be made only to a Holder of an aggregate principal amount of
Securities in excess of $5,000,000, and only if such Holder shall have furnished
wire instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date) maintained by the payee with a bank in the United States
of America. Payment of interest on this Security may be made by Dollar check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register, or, upon written application by the Holder to
the Security Registrar setting forth wire instructions not later than the
relevant Record Date, by transfer to a Dollar account (such a transfer to be
made only to a Holder of an aggregate principal amount of Securities in excess
of $5,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the payee with a bank in the United States of America.

Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

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<PAGE>

Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.

Dated:

INTERIM SERVICES INC.

By:__________________________
Name:
Title:

Attest:

________________________
Name:
Title:

[FORM OF REVERSE]

This Security is one of a duly authorized issue of securities of the
Company designated as its "[ ]% Convertible Subordinated Notes due [
,] " (herein called the "Securities"), limited in aggregate principal amount to
[$ ] , issued and to be issued under an Indenture, dated as of [
,] 1998 (herein called the "Indenture"), between the Company and [
], as Trustee, (herein called the "Trustee"), which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

The Securities are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, at any time on or after [ , ],
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period beginning [ ]of the years indicated:

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<PAGE>

Year Redemption Price
- ---- ----------------

and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.

Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled at any time before the close of business
on [ ,] (or, in case this Security or a portion hereof is called
for redemption or the Holder hereof has exercised his right to require the
Company to repurchase this Security or a portion hereof, then in respect of this
Security or such portion hereof, as the case may be, until and including, but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the
Redemption Date or the Repurchase Date, as the case may be) to convert this
Security (or any portion of the principal amount hereof that is an integral
multiple of $1,000), into fully paid and nonassessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Stock of the Company
at the rate of [ ] shares of Common Stock for each $1,000 principal
amount of Security (or at the current adjusted rate if an adjustment has been
made as provided in the Indenture) by surrender of this Security, duly endorsed
or assigned to the Company or in blank to the Company at the Corporate Trust
Office of the Trustee, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, at any other office or agency of the Company
maintained for such purpose and at the office or agency of any additional
conversion agent appointed by the Company, accompanied by written notice to the
Company that the Holder hereof elects to convert this Security (or if less than
the entire principal amount hereof is to be converted, specifying the portion
hereof to be converted). Holders that surrender Securities for conversion on a
date that is not an Interest Payment Date are not entitled to receive any
interest for the period from the next preceding Interest Payment Date to the
date of conversion, except as described below. However, Holders of Securities on
a Regular Record Date, including Securities surrendered for conversion after the
Regular Record Date, will receive the interest payable on such Securities on the
next succeeding Interest Payment Date. Accordingly, any Security surrendered
for conversion during the period from the close of business on a Regular Record
Date to the opening of business on the next succeeding Interest Payment Date
must be accompanied by payment of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion; PROVIDED, HOWEVER, that no such payment will be
required upon the conversion of any Security (or portion thereof) that has been
called for redemption or that is eligible to be delivered for repurchase if, as
a result, the right to convert such Security would terminate during the period
between such Regular Record Date and the next succeeding Interest Payment Date.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest, the Company shall pay a
cash adjustment as provided in the Indenture or, at its option, the Company
shall round up to the next higher whole share.

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<PAGE>

The Conversion Rate is subject to adjustment as provided in the
Indenture. The Indenture also provides that in case of certain consolidations
or mergers to which the Company is a party or the conveyance, transfer, sale or
lease of all or substantially all of the properties and assets of the Company,
the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
(including any Common Stock retainable) by a holder of the number of shares of
Common Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease (assuming such holder of Common Stock failed to exercise any rights of
election and received per share the kind and amount received per share by a
plurality of non-electing Shares and further assuming, if such consolidation,
merger, conveyance, transfer, sale or lease is prior to the first date on which
this Security may be converted as provided above, that this Security was
convertible immediately prior to the time of such occurrence at the initial
Conversion Rate specified above as adjusted from the first original issue date
of the Securities to such time as provided in the Indenture). No adjustment in
the Conversion Rate will be made until such adjustment would require an increase
or decrease of at least one percent of such rate, PROVIDED that any adjustment
that would otherwise be made will be carried forward and taken into account in
the computation of any subsequent adjustment.

If a Change of Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000) at a
Repurchase Price equal to 100% of the principal amount thereof plus interest
accrued to the Repurchase Date. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the conditions provided in the
Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Price for the five consecutive
Trading Days ending on and including the third Trading Day immediately preceding
the Repurchase Date. Whenever in this Security there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Security shall not be construed as excluding the Repurchase
Price so payable in those provisions of this Security where such express mention
is not made; PROVIDED, HOWEVER, that for the purposes of the second succeeding
paragraph (regarding subordination), such reference shall be deemed to include
reference to the Repurchase Price only if the Repurchase Price is payable in
cash.

[IF NOT A GLOBAL SECURITY INSERT -- In the event of redemption,
repurchase or conversion of this Security in part only, a new Security or
Securities for the unredeemed, unrepurchased or unconverted portion hereof will
be issued in the name of the Holder hereof.]

[IF A GLOBAL SECURITY INSERT -- In the event of a deposit or
withdrawal of an interest in this Security (including upon an exchange,
transfer, redemption, repurchase or conversion of this Security in part only)
effected in accordance with the Applicable Procedures,

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<PAGE>

the Security Registrar, upon receipt of notice of such event from the
Depositary's custodian for this Security, shall make an adjustment on its
records to reflect an increase or decrease of the Outstanding principal amount
of this Security resulting from such deposit or withdrawal, as the case may be.]

The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, and this
Security is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.

If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.

As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 10% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium, if any, or interest hereon on or after the respective due dates
expressed herein or for the enforcement of the right to convert this Security as
provided in the Indenture.

No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, places and rate,

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<PAGE>

and in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.

As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Securities is registrable on the Security
Register upon surrender of a Security for registration of transfer at the office
or agency of the Company in the Borough of Manhattan, The City of New York, and
at such other offices or agencies as the Company may designate, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.

Prior to due presentation of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered, as the owner thereof for
all purposes, whether or not such Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.

All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

ELECTION OF HOLDER TO REQUIRE REPURCHASE

1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have all or a portion of this Security repurchased by the Company.

2. The undersigned hereby directs the Trustee or the Company to pay
[choose one] (a) it or (b) Name: __________________; address:
__________________; Social Security or Other Taxpayer Identification Number, if
any: ____________, an amount in cash or, at the

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<PAGE>

Company's election, Common Stock valued as set forth in the Indenture, equal to
100% of the principal amount to be repurchased (as set forth below), plus
interest accrued to the Repurchase Date, as provided in the Indenture.

Dated: _______________________

_______________________
Signature

Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if cash or Common Stock is to be delivered other than
to, and in the name of, the registered Holder.

_______________________
Signature Guarantee

Principal amount to be repurchased
(an integral multiple of $1,000): ______________________

Remaining principal amount following such repurchase
(not less than $1,000): ______________________

NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.

SECTION 2.3. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

This is one of the Securities referred to in the within-mentioned
Indenture.

[ ],
as Trustee

By:________________________
Authorized Signatory

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<PAGE>

SECTION 2.4. FORM OF CONVERSION NOTICE.

CONVERSION NOTICE

The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of $1,000) below designated, into shares
of Common Stock in accordance with the terms of the Indenture referred to in
this Security, and directs that such shares, together with a check in payment
for any fractional share and any Securities representing any unconverted
principal amount hereof, be delivered to and be registered in the name of the
undersigned unless a different name has been indicated below. If shares of
Common Stock or Securities are to be registered in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account
of interest accompanies this Security.

Dated: _____________________
___________________________
Signature

If shares or Securities are to be registered in the name of a Person other than
the Holder, please print such Person's name and address:

_________________________
Name

_________________________
Address

_________________________
Social Security or other Taxpayer Identification Number, if any

If only a portion of the Securities is to be converted, please indicate:

1. Principal amount to be converted:

$___________

2. Principal amount and denomination of Securities representing unconverted
principal amount to be issued:

Amount: $________

Denominations: $________
(any integral multiple of $1,000)

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<PAGE>

[Signature Guarantee]

ARTICLE THREE

THE SECURITIES

SECTION 3.1. TITLE AND TERMS.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to [$ ],
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to Section 3.4, 3.5, 3.6, 3.7, 9.6, 11.8, 12.2 or
14.3.

The Securities shall be known and designated as the "[ ]%
Convertible Subordinated Notes due [ ], " of the Company. Their
Stated Maturity shall be [ ,] , and they shall bear interest at the
rate of [ %] per annum, from [ , 1998] or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, as
the case may be, payable semi-annually on [ ]and[
,] commencing [ ,] 1998, until the principal thereof is paid or made
available for payment.

The principal of, premium, if any, and interest on the Securities
shall be payable as provided in the forms of Securities set forth in
Section 2.2.

The Securities shall be redeemable as provided in Article Eleven.

The Securities shall be convertible as provided in Article Twelve.

The Securities shall be subordinated in right of payment to Senior
Debt as provided in Article Thirteen.

The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Fourteen.

SECTION 3.2. DENOMINATIONS.

The Securities shall be issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof.

SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. Any such signature may be manual
or facsimile.

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<PAGE>

Securities bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.

SECTION 3.4. TEMPORARY SECURITIES.

Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

SECTION 3.5. GLOBAL SECURITIES; NON-GLOBAL SECURITIES.

(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in

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<PAGE>

whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (i) such
Depositary (A) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) has ceased to be a
clearing agency registered as such under the Exchange Act, and in either case
the Company thereupon fails to appoint a successor Depositary, (ii) there shall
have occurred and be continuing an Event of Default with respect to such Global
Security or (iii) the Company executes and delivers to the Trustee a Company
Order stating that all Global Securities shall be exchanged in whole for
Securities that are not Global Securities (in which case such exchange shall be
effected by the Trustee).

(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation
as provided in this Article Three. If any Global Security is to be exchanged
for other Securities or canceled in part, or if another Security is to be
exchanged in whole or in part for a beneficial interest in any Global Security,
in each case, as provided in Section 3.6, then either (i) such Global Security
shall be so surrendered for exchange or cancellation as provided in this Article
Three or (ii) the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or canceled, or equal to
the principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 3.6(c) and as otherwise provided in this Article Three,
authenticate and deliver any Securities issuable in exchange for such Global
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to conclusively rely upon any order, direction or request of the
Depositary or its authorized representative which is given or made pursuant to
this Article Three if such order, direction or request is given or made in
accordance with the Applicable Procedures.

(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.

(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders of such Global Security for any purpose of this Indenture
or the Securities.

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<PAGE>

SECTION 3.6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE

The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 10.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided.

Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.

At the option of the Holder, and subject to the other provisions of
this Section 3.6, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 3.5, 9.6, 11.8, 12.2 or 14.3 not involving
any transfer.

The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.4 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.

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<PAGE>

SECTION 3.7. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.

If any mutilated Security is surrendered to the Trustee or to a
Transfer Agent, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be satisfactory to the
Company or the Trustee to save each of them and any agent of either of them
harmless, then, in the absence of actual notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security.

Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 3.8. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.

Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:

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<PAGE>

(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security, the date of the proposed payment and the Special Record Date, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. The Special Record
Date for the payment of such Defaulted Interest shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities at such Holder's address as
it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

Interest on any Security which is converted in accordance with Section
12.2 during a Record Date Period shall be payable in accordance with the
provisions of Section 12.2.

SECTION 3.9. PERSONS DEEMED OWNERS.

Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.8) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

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<PAGE>

SECTION 3.10. CANCELLATION.

All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.

SECTION 3.11. COMPUTATION OF INTEREST.

Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.

SECTION 3.12. CUSIP AND ISIN NUMBERS.

The Company in issuing Securities may use "CUSIP" and "ISIN" numbers
(if then generally in use) in addition to serial numbers; if so, the Trustee
shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers in
notices of redemption and repurchase as a convenience to Holders; PROVIDED that
any such notice may state that no representation is made as to the correctness
of such CUSIP and ISIN numbers either as printed on the Securities or as
contained in any notice of a redemption or repurchase and that reliance may be
placed only on the serial or other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected by any
defect in or omission of such CUSIP and ISIN numbers.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE.

This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on reasonable demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.7 and (ii) Securities
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to

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the Company or discharged from such trust, as provided in Section 10.3)
have been delivered to the Trustee for cancellation; or

(B) all such Securities not theretofore delivered to the Trustee for
cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within
one year, or

(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,

and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;

(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive. Funds held in trust pursuant to this
Section are not subject to the provisions of Article Thirteen.

SECTION 4.2. APPLICATION OF TRUST MONEY.

Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.

All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.

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ARTICLE FIVE

REMEDIES

SECTION 5.1. EVENTS OF DEFAULT.

"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(1) default in the payment of the principal of or premium, if any, on
any Security at its Maturity; or

(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days; or

(3) failure by the Company to give the Company Notice in accordance
with Section 14.3; or

(4) default in the performance, or breach, of any material covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is specifically
dealt with elsewhere in this Section), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 10% in principal amount of the
Outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or

(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company, or under any agreement,
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company, with a principal amount then outstanding in excess of $
, whether such indebtedness now exists or shall hereafter be
created, which default shall constitute a failure to pay the principal of
such indebtedness (in whole or in any part greater than $ )
when due and payable or shall have resulted in such indebtedness (in whole
or in any part greater than $ ) becoming or being declared due
and payable prior to the date on which it would otherwise have become due
and payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 30 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 10% in aggregate principal amount of the Outstanding Securities a
written notice specifying such default and requiring the Company to cause
such indebtedness to be discharged or cause such

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acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or

(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or

(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or similar
relief under any applicable Federal or State law, or the consent by it to
the filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action.

SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

If an Event of Default (other than an Event of Default specified in
Section 5.1(6) or 5.1(7)) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 10% in aggregate principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If
an Event of Default specified in Section 5.1(6) or 5.1(7) occurs and is
continuing, the principal of, and accrued interest on, all the Securities shall
IPSO FACTO become immediately due and payable without any declaration or other
Act of the Holders or any act on the part of the Trustee.

At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding

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Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay

(A) all overdue interest on all Securities,

(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate borne by the
Securities,

(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided therefor in the
Securities, and

(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;

and

(2) all Events of Default, other than the nonpayment of the principal
of, and any premium and interest on, Securities which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13.

No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.

SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

The Company covenants that if

(1) default is made in the payment of any interest on any Security
when it becomes due and payable and such default continues for a period of
30 days, or

(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and interest on any overdue principal and
premium, if any, and on any overdue interest, at the rate provided therefor in
the Securities, and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

If an Event of Default occurs and is continuing, the Trustee, subject
to Article VI, may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to

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protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.

In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursement and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 6.7.

No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security in any such proceeding;
PROVIDED, HOWEVER, that the Trustee may, on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other such committee.

SECTION 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.

SECTION 5.6. APPLICATION OF MONEY COLLECTED.

Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Securities, or both, as the case may
be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section
6.7; and

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SECOND: Subject to Article Thirteen, to the payment of the amounts
then due and unpaid for principal of, premium, if any, or interest on, the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium, if any, and interest, respectively.

SECTION 5.7. LIMITATION ON SUITS.

No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;

(2) the Holders of not less than 10% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

SECTION 5.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST AND TO CONVERT.

Notwithstanding any other provision in this Indenture, but subject to
the provisions of Article Thirteen, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of, premium, if any, and (subject to Section 3.8) interest on such Security or
payment on the respective Stated Maturities expressed in such Security (or, in
the case of redemption or repurchase, on the Redemption Date or Repurchase Date,
as the case may be), and to convert such Security in accordance with Article
Twelve, and to institute suit for the enforcement of any such payment and right
to convert, and such rights shall not be impaired without the consent of such
Holder.

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SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.

If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.

Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.7, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

SECTION 5.11. DELAY OR OMISSION NOT WAIVER.

No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.

SECTION 5.12. CONTROL BY HOLDERS OF SECURITIES.

The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, PROVIDED that

(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and

(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.

SECTION 5.13. WAIVER OF PAST DEFAULTS.

The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default

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(1) in the payment of the principal of, premium, if any, or interest
on any Security, or

(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 5.14. UNDERTAKING FOR COSTS.

In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by its as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company, the Trustee or
any Holder, or group of Holders, holding in the aggregate at least 10% in
principal amount of the Outstanding Securities or in any suit instituted by any
Holder for the enforcement of principal of (and premium, if any) or interest on
any Security on or after the respective maturities or Stated Maturities
expressed in such Security or for the enforcement of the right to convert any
Security in accordance with Article Twelve.

SECTION 5.15. WAIVER OF STAY, USURY OR EXTENSION LAWS.

Subject to Article Thirteen hereof, the Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, usury or extension law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

SECTION 6.1. CERTAIN DUTIES AND RESPONSIBILITIES.

(a) Except during the continuance of an Event of Default,

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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and

(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture, but not to verify the
contents thereof.

(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, EXCEPT that

(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment made in
good faith by it, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and

(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

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SECTION 6.2. NOTICE OF DEFAULTS.

The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that
in the case of any default of the character specified in Section 5.1(4), no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.

SECTION 6.3. CERTAIN RIGHTS OF TRUSTEE.

Subject to the provisions of Section 6.1:

(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;

(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate;

(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney so long as reasonable prior
notice is provided to the Company and such investigation does not
unreasonably interfere with the Company's operations;

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(g) the permissive right of the Trustee to take or refrain from
taking any actions enumerated in this Indenture shall not be construed as a
duty and the Trustee shall not be answerable in any such actions other than
for its own negligence or willful misconduct;

(h) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights and powers conferred upon it
by this Indenture; and

(i) in the event the Trustee is also acting as Paying Agent or
Transfer Agent and Security Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Section 6.3 shall also be afforded
to such Paying Agent or Transfer Agent and Security Registrar.

SECTION 6.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.

SECTION 6.5. MAY HOLD SECURITIES.

The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee hereunder.

SECTION 6.6. MONEY HELD IN TRUST.

Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company in writing.

SECTION 6.7. COMPENSATION AND REIMBURSEMENT.

The Company agrees

(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder in accordance with the agreement
between the Company and the Trustee (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);

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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its written request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) as detailed in such
request, except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and

(3) to indemnify the Trustee, its officers, directors, employees and
agents for, and to hold it and them harmless against, any loss, liability
or expense incurred without negligence or bad faith on its or their part,
arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself
or themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.

When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(6) or Section 5.1(7), the
expenses (including the reasonable fees and expenses of counsel) and the
compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.

The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.

SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.

If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

SECTION 6.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.

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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.

(d) If at any time:

(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or

(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

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SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of the fees and
expenses and any other monies due and owing to the retiring Trustee, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee (including the trust created by this Indenture), shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT.

The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 3.7, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include

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authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.

The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, immediately upon
demand.

If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:

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This is one of the Securities described in the within-mentioned
Indenture.

,
AS TRUSTEE

By___________________________,
AS AUTHENTICATING AGENT

By___________________________
AUTHORIZED SIGNATORY

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

The Company will furnish or cause to be furnished to the Trustee

(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date,
EXCLUDING from any such list names and addresses received by the Trustee in
its capacity as Security Registrar; provided, that, if after so excluding
such names and addresses there are no names and addresses to furnish, the
Company shall not be obligated to furnish or cause to be furnished such
list, and

(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished, EXCLUDING from any such list names and
addresses received by the Trustee in its capacity as Security Registrar.

SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

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(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

SECTION 7.3. REPORTS BY TRUSTEE.

(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.

SECTION 7.4. REPORTS BY COMPANY.

The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; PROVIDED that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer, sell or lease all or substantially all of its
properties and assets to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or sale, or which leases, all or

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substantially all the properties and assets of the Company shall be a
corporation, limited liability company, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Securities and the performance or observance of
every covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Article Twelve;

(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and

(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer, sale or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.

SECTION 8.2. SUCCESSOR SUBSTITUTED.

Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer, sale or lease of all or
substantially all of the properties and assets of the Company in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer, sale or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS OF SECURITIES.

Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

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(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants and obligations of
the Company herein and in the Securities as permitted by this Indenture; or

(2) to add to the covenants of the Company for the benefit of the
Holders of Securities, or to surrender any right or power herein conferred
upon the Company; or

(3) to secure the Securities; or

(4) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11; or

(5) to comply with the requirements of the Trust Indenture Act or the
rules and regulations of the Commission thereunder in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by this Indenture or otherwise; or

(6) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to make
any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture, PROVIDED that such action pursuant to this Clause (6) shall not
adversely affect the interests of the Holders of Securities.

SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS OF SECURITIES.

With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent or affirmative vote of the Holder of each Outstanding Security affected
thereby,

(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or reduce the principal amount or
the rate of interest payable thereon or any premium payable upon redemption
or mandatory repurchase thereof, or change the coin or currency in which
any Security or the interest or any premium thereon or any other amount in
respect thereof is payable, modify the provisions of Article Fourteen in a
manner adverse to the Holders or impair the right to institute suit for the
enforcement of any payment in respect of any Security on or after the
Stated Maturity thereof (or, in the case of redemption or any repurchase,
on or after the Redemption Date or Repurchase Date, as the case may be) or
the right to convert any Security or, except as permitted by Section 12.11,
adversely affect the right to convert any Security as provided in Article
Twelve, or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders of
Securities, or

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(2) reduce the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or

(3) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York pursuant to
Section 10.2, or

(4) modify any of the provisions of this Section or Section 5.13 or
10.9, except to increase any percentage contained herein or therein or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby.

It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and, subject to the provisions of Section 6.7, shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.

Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT.

Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by

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the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

ARTICLE TEN

COVENANTS

SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.

SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.

The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange, where Securities may be surrendered for conversion and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

SECTION 10.3. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.

If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
in writing of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit

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with a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

Subject to any applicable abandoned property laws, any money deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of (and premium, if any) or interest on any
Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.

SECTION 10.4. STATEMENT BY OFFICERS AS TO DEFAULT.

The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

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The Company shall deliver to the Trustee, as soon as possible and in
any event within 10 days after the Company becomes aware of the occurrence of an
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which the Company
proposes to take with respect thereto.

SECTION 10.5. EXISTENCE.

Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.

SECTION 10.6. MAINTENANCE OF PROPERTIES.

The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section shall prevent the Company or any such Subsidiary from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.

SECTION 10.7. PAYMENT OF TAXES AND OTHER CLAIMS.

The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.

SECTION 10.8. REGISTRATION AND LISTING.

The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) for the shares of Common Stock
issuable upon conversion of Securities to be lawfully issued and delivered as
provided herein, and thereafter publicly traded (if permissible under the
Securities Act) and qualified or listed as contemplated by clause (ii); and
(ii) will list the shares of Common Stock

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required to be issued and delivered upon conversion of Securities, prior to such
issuance or delivery, on each national securities exchange on which outstanding
Common Stock is listed or quoted at the time of such delivery, or if the Common
Stock is not then listed on any securities exchange, to qualify the Common Stock
for quotation on the Nasdaq National Market or such other inter-dealer quotation
system, if any, on which the Common Stock is then quoted.

SECTION 10.9. WAIVER OF CERTAIN COVENANTS.

The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 10.5 to 10.7, inclusive, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 11.1. RIGHT OF REDEMPTION.

The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time on or after [ ,]
, at the Redemption Prices specified in the form of Security hereinbefore set
forth.

SECTION 11.2. APPLICABILITY OF ARTICLE.

Redemption of Securities at the election of the Company, as permitted
by any provision of this Indenture, shall be made in accordance with such
provision and this Article.

SECTION 11.3. ELECTION TO REDEEM; NOTICE TO TRUSTEE.

The election of the Company to redeem any Securities pursuant to
Section 11.1 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities to
be redeemed.

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SECTION 11.4. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000.

If (i) the Company selects any Security for partial redemption and
(ii) after receiving notice of such partial redemption (but before the
Redemption Date), the Holder of such Security tenders such Security for
conversion in part, then the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities which
have been converted during a selection of Securities to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection.

The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

SECTION 11.5. NOTICE OF REDEMPTION.

Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,

(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,

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(5) the Conversion Rate, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where such
Securities may be surrendered for conversion,

(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.

Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION 11.6. DEPOSIT OF REDEMPTION PRICE.

On or before 12 noon New York time prior to any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.

If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.8) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.

SECTION 11.7. SECURITIES PAYABLE ON REDEMPTION DATE.

Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 3.8.

If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.

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SECTION 11.8. SECURITIES REDEEMED IN PART.

Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

ARTICLE TWELVE

CONVERSION OF SECURITIES

SECTION 12.1. CONVERSION PRIVILEGE AND CONVERSION RATE.

Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion which is $1,000 or
an integral multiple thereof may be converted into fully paid and nonassessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock of the Company at the Conversion Rate, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
commence upon issuance of such Security and shall expire at the close of
business on [ ,] , subject, in the case of conversion of any Global
Security, to any Applicable Procedures. In case a Security or portion thereof
is called for redemption at the election of the Company or the Holder thereof
exercises his right to require the Company to repurchase the Security, such
conversion right in respect of the Security, or portion thereof, so called or
repurchasable, shall expire at the close of business on the Redemption Date or
the Repurchase Date, as the case may be, unless the Company defaults in making
the payment due upon redemption or repurchase, as the case may be (in each case
subject as aforesaid to any Applicable Procedures with respect to any Global
Security).

The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially [
] shares of Common Stock for each $1,000 principal amount of Securities, which
is the equivalent of [$ ] per share. The Conversion Rate shall be adjusted
in certain instances as provided in this Article Twelve.

SECTION 12.2. EXERCISE OF CONVERSION PRIVILEGE.

In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 10.2, accompanied by a duly
signed conversion notice substantially in the form provided in Section 2.4
stating that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted. Holders that surrender Securities

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for conversion on a date that is not an Interest Payment Date are not entitled
to receive any interest for the period from the next preceding Interest Payment
Date to the date of conversion, except as described below. However, Holders of
Securities on a Regular Record Date, including Securities surrendered for
conversion after the Regular Record Date, will receive the interest payable on
such Securities on the next succeeding Interest Payment Date. Accordingly, any
Security surrendered for conversion during the period from the close of business
on a Regular Record Date to the opening of business on the next succeeding
Interest Payment Date must be accompanied by payment of an amount, in New York
Clearing House funds, equal to the interest payable on such Interest Payment
Date on the principal amount of Securities being surrendered for conversion;
PROVIDED, HOWEVER, that no such payment will be required upon the conversion of
any Security (or portion thereof) that has been called for redemption or that is
eligible to be delivered for repurchase if, as a result, the right to convert
such Security would terminate during the period between such Regular Record Date
and the next succeeding Interest Payment Date. Except as provided in this
paragraph, no cash payment or adjustment shall be made upon any conversion on
account of any interest accrued from the Interest Payment Date next preceding
the conversion date, in respect of any Security (or part thereof, as the case
may be) surrendered for conversion, or on account of any dividends on the Common
Stock issued upon conversion.

Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 12.3.

All shares of Common Stock delivered upon such conversion of
Securities shall rank PARI PASSU with other shares of Common Stock of the
Company.

In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.

SECTION 12.3. FRACTIONS OF SHARES.

No fractional shares of Common Stock shall be issued upon conversion
of any Security or Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to

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the nearest 1/100th of a share) in an amount equal to the same fraction of the
Closing Price at the close of business on the day of conversion (or, if such day
is not a Trading Day, on the Trading Day immediately preceding such day),
alternatively, the Company shall round up to the next higher whole share.

SECTION 12.4. ADJUSTMENT OF CONVERSION RATE.

The Conversion Rate shall be subject to adjustments from time to time
as follows:

(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the Determination Date for such dividend or other distribution
shall be increased by dividing such Conversion Rate by a fraction (a) the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on such Determination Date and (b) the denominator of
which shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following such
Determination Date. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company.

(2) Subject to the last sentence of paragraph (7) of this Section, in
case the Company shall issue rights, options or warrants to all holders of its
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the current market price per share (determined as
provided in paragraph (8) of this Section 12.4) of the Common Stock on the
Determination Date for such distribution, the Conversion Rate in effect at the
opening of business on the day following such Determination Date shall be
increased by dividing such Conversion Rate by a fraction (a) the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on such Determination Date plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and (b) the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on such
Determination Date plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following such Determination Date. For the
purposes of this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not issue any rights,
options or warrants in respect of shares of Common Stock held in the treasury of
the Company.

(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined

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into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.

(4) Subject to the last sentence of paragraph (7) of this Section, in
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class of capital
stock, or other property (including securities, but excluding (i) any rights,
options or warrants referred to in paragraph (2) of this Section, (ii) any
dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this Section and (iv) any merger or
consolidation to which Section 12.11 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such distribution by a fraction (a) the numerator of
which shall be the current market price per share (determined as provided in
paragraph (8) of this Section 12.4) of the Common Stock on such Determination
Date less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Trustee) of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one share of Common Stock and (b) the
denominator of which shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following such Determination Date. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market for
any securities comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the current market
price per share pursuant to paragraph (8) of this Section.

(5) In case the Company shall, by dividend or otherwise, make a Cash
Distribution in an aggregate amount that, combined with (i) the aggregate amount
of any other Cash Distributions made within the 12 months preceding the date of
payment of such distribution in respect of which no adjustment pursuant to this
paragraph (5) has been made and (ii) any Excess Purchase Payment made within the
12 months preceding the date of such distribution and in respect of which no
adjustment has been made pursuant to paragraph (6) of this Section 12.4, exceeds
10% of the Company's Market Capitalization on the Determination Date for such
Cash Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on such Determination Date
less an amount equal to the quotient of (1) the amount of such excess divided by
(2) the number of shares of Common Stock outstanding on such Determination Date
and (b) the denominator of which shall be equal to the current market price per
share (determined as provided in paragraph (8) of this Section 12.4) of the
Common Stock on such Determination Date.

(6) In case the Company or any Subsidiary shall make an Excess
Purchase Payment in an aggregate that, combined with (i) the aggregate amount of
any other Excess

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Purchase Payments made by the Company or any Subsidiary within the 12 months
preceding such Excess Purchase Payment in respect of which no adjustment
pursuant to this paragraph (6) has been made and (ii) the aggregate amount of
any Cash Distributions made within the 12 months preceding such Excess Purchase
Payment in respect of which no adjustment pursuant to paragraph (5) of this
Section 12.4 has been made, exceeds 10% of the Company's Market Capitalization
as of the Determination Date, then, and in each such case, immediately prior to
the opening of business on the day after the tender offer in respect of which
such Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal (1) to the product of (A) the number of shares of Common
Stock outstanding (including any tendered shares) at such Determination Date
less (B) the amount of such excess and (b) the denominator of which shall be
equal to the product of (X) the current market price per share of the Common
Stock (determined as provided in paragraph (8) of this Section 12.4) as of such
Determination Date multiplied by (Y) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date.

(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger to
which Section 12.11 applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be the Determination
Date), and (b) a subdivision or combination, as the case may be, of the number
of shares of Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be "the day
upon which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of paragraph
(3) of this Section 12.4). Rights or warrants issued by the Company to all
holders of its Common Stock entitling the holders thereof to subscribe for or
purchase shares of Common Stock, which rights or warrants (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case in
clauses (i) through (iii) until the occurrence of a specified event or events
("Trigger Event"), shall for purposes of this Section 12.4 not be deemed issued
until the occurrence of the earliest Trigger Event.

(8) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 12.4, the current market price per share of Common Stock
on any date shall be calculated by the Company and be deemed to be the average
of the daily Closing Prices for the five consecutive Trading Days selected by
the Company commencing not more than 10 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock trades
regular way in the applicable securities market or on the applicable securities
exchange without the right to receive such issuance or distribution.

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(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent in
such rate; PROVIDED, HOWEVER, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.

(10) The Company may make such increases in the Conversion Rate, for
the remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 12.4, as
it considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes. The Company shall have
the power to resolve any ambiguity or correct any error in the application of
this paragraph (10) and its actions in so doing shall, absent manifest error, be
final and conclusive.

(11) The Company from time to time at its option may increase the
Conversion Rate by any amount for any period of at least 20 calendar days if the
Board of Directors has made a determination that such increase would be in the
best interests of the Company, which determination shall be conclusive and
evidenced by a Board Resolution. To exercise this option the Company shall
provide a written notice to the Trustee and the Holders in accordance with
Sections 1.5 and 1.6 at least 15 calendar days prior to the first day of the
period during which the Conversion Rate will be adjusted stating that the
Conversion Rate will be adjusted pursuant to this provision, the period during
which the adjusted Conversion Rate will be in effect and the adjusted Conversion
Rate.

SECTION 12.5. NOTICE OF ADJUSTMENTS OF CONVERSION RATE.

Whenever the Conversion Rate is adjusted as provided in Section 12.4:

(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 12.4 and shall prepare a certificate signed by
either the chief financial officer, the treasurer or the controller of the
Company setting forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of Securities pursuant to
Section 10.2; and

(2) a written notice stating that the Conversion Rate has been
adjusted and setting forth the adjusted Conversion Rate shall forthwith be
prepared, and as soon as practicable after it is prepared, such written
notice shall be provided by the Company to the Trustee and to all Holders
in accordance with Sections 1.5 and 1.6. Unless and until the Trustee
receives such written notice, it need not inquire into whether any
adjustment of the Conversion Rate is required and may assume that no such
adjustment has been, or is required to be, made.

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SECTION 12.6. NOTICE OF CERTAIN CORPORATE ACTION.

In case:

(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require any adjustment pursuant to Section 12.4; or

(b) the Company shall authorize the granting to all the holders
of its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights; or

(c) of any reclassification of the Common Stock of the Company,
or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the Company
is required, or of the conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or

(e) the Company or any Subsidiary shall commence a tender offer
for all or a portion of the Company's outstanding shares of Common
Stock (or shall amend any such tender offer);

then the Company shall cause to be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of Securities pursuant to
Section 10.2, and shall cause to be provided to all Holders in accordance with
Section 1.6, at least 20 days (or 10 days in any case specified in clause (a) or
(b) above) prior to the applicable record, expiration or effective date
hereinafter specified, a written notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, distribution, rights, options
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up.
Neither the failure to give such written notice or the notice referred to in the
following paragraph nor any defect therein shall affect the legality or validity
of the proceedings described in clauses (a) through (e) of this Section 12.6.

The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6,

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notice of any tender offer by the Company or any Subsidiary for all or any
portion of the Common Stock at or about the time that such notice of tender
offer is provided to the public generally.

SECTION 12.7. COMPANY TO RESERVE COMMON STOCK.

The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.

SECTION 12.8. TAXES ON CONVERSIONS.

Except as provided in the next sentence, the Company will pay any and
all taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Security or Securities to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax
or duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.

SECTION 12.9. COVENANT AS TO COMMON STOCK.

The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable (and
shall be issued out of the Company's authorized but unissued Common Stock) and,
except as provided in Section 12.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.

SECTION 12.10. CANCELLATION OF CONVERTED SECURITIES.

All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent or its agent to be canceled by or at the direction
of the Trustee, which shall dispose of the same as provided in Section 3.10.

SECTION 12.11. PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

In case of any consolidation of the Company with any other Person, any
merger of the Company into another Person or of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any conveyance, sale, transfer or lease of all or substantially all of the
properties and assets of the Company, the Person formed by such consolidation or
resulting from such merger or which acquires such properties and assets, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then Outstanding shall have the right
thereafter, during the period such Security shall be convertible as specified in
Section 12.1, to convert such Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,

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conveyance, sale, transfer or lease (including any Common Stock retainable) by a
holder of the number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such consolidation,
merger, conveyance, sale, transfer or lease, (a) assuming such holder of Common
Stock of the Company (i) is not a Person with which the Company consolidated,
into which the Company merged or which merged into the Company or to which such
conveyance, sale, transfer or lease was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease (PROVIDED that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, conveyance, sale, transfer
or lease by others than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section 12.11 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Non-electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares), and (b) further assuming
that, if such consolidation, merger, conveyance, transfer, sale or lease occurs
before the first date on which Securities may be converted as provided herein,
such Security was convertible immediately prior to the time of such occurrence
at the initial Conversion Rate as adjusted from the first original issue date of
the Securities to such time as provided herein. Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section 12.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Security as provided in Section 1.6 promptly upon such execution.
In this paragraph, "securities of the kind receivable" upon such consolidation,
merger, conveyance, transfer, sale or lease by a holder of Common Stock means
securities that, among other things, are registered and transferable under the
Securities Act, and listed and approved for quotation in all securities markets,
in each case to the same extent as such securities so receivable by a holder of
Common Stock.

Neither the Trustee nor any Paying Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders upon the
conversion of their Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be fully protected
in relying upon, an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee.

SECTION 12.12. RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.

The Trustee shall not at any time be under any duty or responsibility
to any Holder to determine whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making

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the same, or whether a supplemental indenture need be entered into. The Trustee
shall not be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
The Trustee shall not be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any shares of Common
Stock or share certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion; and the Trustee shall
not be responsible for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.

ARTICLE THIRTEEN

SUBORDINATION OF SECURITIES

SECTION 13.1. SECURITIES SUBORDINATE TO SENIOR DEBT.

The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article (subject to the provisions
of Article Four), the indebtedness represented by the Securities and the payment
of the principal of (and premium, if any) and interest on each and all of the
Securities and any payment of the Repurchase Price (other than by delivery of
shares of Common Stock) are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt.

SECTION 13.2. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.

In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Debt shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior Debt
before the Holders of the Securities are entitled to receive any payment on
account of principal of (or premium, if any) or interest on the Securities or on
account of the purchase, redemption or other acquisition of Securities, and to
that end the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event.

In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, before all Senior Debt is paid in
full, and if such fact shall, at or prior to the time of such payment or

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distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.

For purposes of this Article only, the words "cash, securities or
other property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which shares of stock
are subordinated in right of payment to all then outstanding Senior Debt to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article Eight.

SECTION 13.3. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF SECURITIES.

In the event that any Securities are declared due and payable before
their Stated Maturity pursuant to Section 5.2, then and in such event the
holders of the Senior Debt outstanding at the time such Securities so become due
and payable shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Debt before the Holders of the
Securities are entitled to receive any payment by the Company on account of the
principal of (or premium, if any) or interest on the Securities or on account of
the purchase or other acquisition of Securities.

In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.

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SECTION 13.4. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.

(a) (i) In the event and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any Senior Debt
beyond any applicable grace period with respect thereto or (ii) in the event
that any other event of default with respect to any Senior Debt shall have
occurred and be continuing which would then permit the holders of such Senior
Debt (or a trustee on behalf of the holders thereof) to declare such Senior Debt
due and payable prior to the date on which it would otherwise have become due
and payable, unless and until, in the case of this clause (ii), such event of
default shall have been cured or waived or shall have ceased to exist after
written notice of such event of default to the Company and the Trustee by any
holder of such Senior Debt (or a trustee on behalf of the holders thereof), or
(b) in the event any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be made by
the Company on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase, redemption or other acquisition of
Securities.

The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.

SECTION 13.5. PAYMENT PERMITTED IF NO DEFAULT.

Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3 or 13.4, from making payments at any time of principal
of (and premium, if any) or interest on the Securities, or (b) the application
by the Trustee of any money deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest on the Securities
or the retention of such payment by the Holders if, at the time of such
application by the Trustee, it did not have actual knowledge that such payment
would have been prohibited by the provisions of this Article.

SECTION 13.6. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.

Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this
Article to the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any

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cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.

SECTION 13.7. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.

The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.

SECTION 13.8. TRUSTEE TO EFFECTUATE SUBORDINATION.

Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.

SECTION 13.9. NO WAIVER OF SUBORDINATION PROVISIONS.

No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder of any Senior Debt, or by
any non-compliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.

Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or written notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Debt, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged

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or otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.

SECTION 13.10. NOTICE TO TRUSTEE.

The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.

The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior
Debt (or a trustee therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

SECTION 13.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.

Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.

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SECTION 13.12. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.

The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or otherwise.

SECTION 13.13. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS.

The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.

Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.

SECTION 13.14. ARTICLE APPLICABLE TO PAYING AGENTS.

In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 13.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.

SECTION 13.15. CERTAIN CONVERSIONS AND REPURCHASES DEEMED PAYMENT.

For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Twelve or upon the repurchase of Securities in accordance with Article Fourteen
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section, the term "junior securities"
means (a) shares of any stock of any class of the Company and any cash, property
or securities into which the Securities are convertible pursuant to Article
Twelve and (b) securities of the Company which are subordinated in right of
payment to all Senior Debt which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Debt and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Twelve or to

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exchange such Security for Common Stock in accordance with Article Fourteen if
the Company elects to satisfy the obligations under Article Fourteen by the
delivery of Common Stock.

ARTICLE FOURTEEN

REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE OF CONTROL

SECTION 14.1. RIGHT TO REQUIRE REPURCHASE.

In the event that a Change of Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at such Holder's option, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Securities, or any portion of the
principal amount thereof that is equal to $1,000 or any integral multiple
thereof, on the date (the "Repurchase Date") that is 45 days after the date on
which the Company Notice (as defined in Section 14.3) is given to Holders at a
purchase price equal to 100% of the principal amount of the Securities to be
repurchased plus interest accrued to the Repurchase Date (the "Repurchase
Price"); PROVIDED, HOWEVER, that installments of interest on Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Date according to their terms and the provisions of
Section 3.8. At the option of the Company, the Repurchase Price may be paid in
cash or, subject to the fulfillment by the Company of the conditions set forth
Section 14.2, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price as described in Section 14.2(a). Whenever in this
Indenture (including Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in
any context, to the principal of any Security as of any time, such reference
shall be deemed to include reference to the Repurchase Price payable in respect
of such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; PROVIDED, HOWEVER, that for the purposes of Article Thirteen, such
reference shall be deemed to include reference to the Repurchase Price only if
the Repurchase Price is payable in cash.

SECTION 14.2. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE
REPURCHASE PRICE IN COMMON STOCK.

The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 14.1 if and only if the following conditions
have been satisfied:

(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date of not
less than the Repurchase Price. For purposes of this Section 14.2, the fair
market value of shares of Common Stock shall be determined by the Company and
shall be equal to 95% of the average of the Closing Prices for the five
consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date;

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(b) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have been listed on the New York Stock Exchange or, if
the Common Stock is not then so listed, such shares shall be have been approved
for quotation in the Nasdaq National Market, in either case, immediately prior
to the Repurchase Date; and

(c) All shares of Common Stock deliverable in payment of the
Repurchase Price shall be issued out of the Company's authorized but unissued
Common Stock and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.

If all of the conditions set forth in this Section 14.2 are not
satisfied in accordance with the terms thereof, the Repurchase Price shall be
paid by the Company only in cash.

SECTION 14.3. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.

(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Change of Control, the Company or, at the request and expense of
the Company, the Trustee, shall give to all Holders of Securities, in the manner
provided in Section 1.6, notice (the "Company Notice") of the occurrence of the
Change of Control and of the repurchase right set forth herein arising as a
result thereof. The Company shall also deliver a copy of such notice of a
repurchase right to the Trustee.

Each notice of a repurchase right shall state:

(1) the Repurchase Date,

(2) the date by which the repurchase right must be exercised,

(3) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,

(4) the instructions a Holder must follow to exercise a repurchase
right,

(5) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date, and

(6) the Conversion Rate then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities may be surrendered
for conversion.

No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.

If any of the foregoing provisions or other provisions of this Article
Fourteen are inconsistent with applicable law, such law shall govern.

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(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 5th day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Securities
to be repurchased (and, if any Security is to be repurchased in part, the serial
number thereof, the portion of the principal amount thereof to be repurchased
and the name of the Person in which the portion thereof to remain Outstanding
after such repurchase is to be registered) and a statement that an election to
exercise the repurchase right is being made thereby, and, in the event that the
Repurchase Price shall be paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of Common
Stock shall be issued, and (ii) the Securities with respect to which the
repurchase right is being exercised. Such written notice shall be irrevocable,
except that the right of the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall continue until the close of
business on the Repurchase Date.

(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to the Repurchase Date payable with respect to the
Securities as to which the purchase right has been exercised; PROVIDED, HOWEVER,
that installments of interest that mature on or prior to the Repurchase Date
shall be payable in cash, to the Holders of the Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date.

(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate per annum borne by such Security, and each Security shall remain
convertible into Common Stock until the principal of such Security (or portion
thereof, as the case may be) shall have been paid or duly provided for.

(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee at the office or agency of the Company designated for
that purpose pursuant to Section 10.2 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.

(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
PROVIDED, HOWEVER, that any surrender for repurchase on a date when the stock
transfer books of the

-73-
<PAGE>

Company shall be closed shall constitute the Person or Persons in whose name or
names the certificate or certificates for such shares are to be issued as the
record holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open. No payment
or adjustment shall be made for dividends or distributions on any Common Stock
issued upon repurchase of any Security declared prior to the Repurchase Date.

(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Security or Securities, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share shall be
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock shall be the
Closing Price of the Common Stock on the Trading Day immediately preceding the
Repurchase Date.

(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; PROVIDED, HOWEVER, that the Company shall not be required
to pay any tax or duty which may be payable in respect of any transfer involved
in the issuance or delivery of certificates for shares of Common Stock in a name
other than that of the Holder of the Securities being repurchased, and no such
issuance or delivery shall be made unless and until the Person requesting such
issuance or delivery has paid to the Company the amount of any such tax or duty
or has established, to the satisfaction of the Company, that such tax or duty
has been paid.

(i) All Securities delivered for repurchase shall be delivered to the
Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.10.

SECTION 14.4. CERTAIN DEFINITIONS.

For purposes of this Article Fourteen,

(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3 promulgated by the Commission pursuant to the Exchange Act;

(b) a "Change of Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:

(i) the acquisition by any person of beneficial ownership, directly
or indirectly, through a purchase, merger or other acquisition transaction
or series of transactions, of shares of capital stock of the Company
entitling such person to exercise 50% or more of the total voting power of
all shares of capital stock of the Company entitled to vote

-74-
<PAGE>

generally in the elections of directors (any shares of voting stock of
which such person is the beneficial owner that are not then outstanding
being deemed outstanding for purposes of calculating such percentage) other
than any such acquisition by the Company or any employee benefit plan of
the Company; or

(ii) any consolidation or merger of the Company with or into, any
other person, any merger of another person with or into the Company, or any
conveyance, transfer, sale, lease or other disposition of all or
substantially all of the assets of the Company to another person (other
than (a) any such transaction (x) which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock and (y) pursuant to which holders of Common Stock
immediately prior to such transaction have the entitlement to exercise,
directly or indirectly, 50% or more of the total voting power of all shares
of capital stock entitled to vote generally in the election of directors of
the continuing or surviving person immediately after such transaction and
(b) any merger which is effected solely to change the jurisdiction of
incorporation of the Company and results in a reclassification, conversion
or exchange of outstanding shares of Common Stock into solely shares of
common stock);

PROVIDED, HOWEVER, that a Change of Control shall not be deemed to have occurred
if the Closing Price for any five Trading Days within the period of 10
consecutive Trading Days (x) ending immediately after the later of the date of
the Change of Control or the date of the public announcement of the Change of
Control (in the case of a Change of Control under Clause (i) above) or (y)
ending immediately prior to the date of the Change of Control (in the case of a
Change of Control under Clause (ii) above) shall equal or exceed 105% of the
Conversion Price in effect on each such Trading Day; PROVIDED, that any
temporary increase in the Conversion Rate made by the Company pursuant to
paragraph (11) of Section 12.4 shall not be taken into account for purposes of
the foregoing determination;

(c) the term "Conversion Price" on any day shall equal $1,000 divided
by the Conversion Rate in effect on each such day; and

(d) for purposes of this Section 14.4, the term "person" shall
include any syndicate or group which would be deemed to be a "person" under
Section 13(d)(3) of the Exchange Act.

-75-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

INTERIM SERVICES INC.

By_______________________________
Name:
Title:

Attest:

______________________________
Name:
Title:

[ ,]
Trustee

By______________________________
Name:
Title:

Attest:

_______________________________
Name:
Title:

-76-
<PAGE>

STATE OF ______ )
) : ss.:
COUNTY OF _____ )

On the __th day of , 1998, before me personally
came _________________, to me known, who, being by me duly sworn, did depose and
say that [s]he is ______________________ of Interim Services Inc., one of the
corporations described in and which executed the foregoing instrument; that
[s]he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that [s]he signed his name thereto
by like authority.

______________________________
Notary Public

STATE OF )
) : ss.:
COUNTY OF )

On the th day of , 1998, before me
personally came , to me known, who, being by me duly sworn, did
depose and say that [s]he is of , a
described in and which executed the foregoing instrument;
that she knows the seal of said ; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
pursuant to the bylaws of said ; and that [s]he signed
her name thereto by like authority.

______________________________
Notary Public

-77-

<PAGE>
EXHIBIT 5.1

[BAKER & MCKENZIE LETTERHEAD]

May 5, 1998

Interim Services Inc.
2050 Spectrum Boulevard
Fort Lauderdale, FL 33309

Gentlemen:

Interim Services Inc., a Delaware corporation (the "Company"), has filed
with the Securities and Exchange Commission a Registration Statement on Form S-1
(the "Registration Statement") (Registration No. 333-50775) under the Securities
Act of 1933, as amended (the "Act"). Such Registration Statement relates to the
sale by the Company of up to $150,000,000 aggregate principal amount of
Convertible Subordinated Notes due 2005 (the "Notes"), and up to an additional
$22,500,000 aggregate principal amount of Notes upon the exercise of the
underwriters' over-allotment option. We have acted as counsel to the Company in
connection with the preparation and filing of the Registration Statement.

In connection with the Registration Statement, we have examined, considered
and relied upon copies of the following documents (collectively, the
"Documents"): (i) the Company's Certificate of Incorporation, as amended, and
the bylaws, as amended; (ii) resolutions of the Company's Board of Directors
authorizing the offering and the issuance of the Common Stock to be sold by the
Company and related matters; (iii) the Registration Statement and schedules and
exhibits thereto; and (iv) such other documents and instruments that we have
deemed necessary for the expression of the opinions herein contained. In making
the foregoing examinations, we have assumed without investigation, the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to authentic original documents of all documents
submitted to us as copies, and the veracity of the documents. As to various
questions of fact material to the opinion expressed below, we have relied, to
the extent we deemed reasonably appropriate, upon the representations or
certificates of officers and/or directors of the Company and upon documents,
records and instruments furnished to us by the Company, without independently
verifying the accuracy of such certificates, documents, records or instruments.

Based upon the foregoing examination, and subject to the qualifications set
forth below, we are of the opinion that: (i) the Notes have been duly and
validly authorized and, when issued and delivered in accordance with the terms
of the Underwriting Agreement and the Indenture filed as Exhibits 1.1 and 4.9,
respectively, to the Registration Statement, will be validly issued and binding
obligations of the Company, enforceable in accordance with their terms, subject,
as to enfocement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; and (ii) assuming approval of the proposal to be voted on by
the Company's Stockholders on May 7, 1998 to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock to
100,000,000 shares, the Common Stock to be issued by the Company upon conversion
of the Notes in accordance therewith has been duly and validly authorized, and
when issued and delivered in exchange for the Notes as described in the
Registration Statement, will be validly issued, fully paid and non-assessable.

Although we have acted as counsel to the Company in connection with the
preparation and filing of the Registration Statement, our engagement has been
limited to certain matters about which we have been consulted. Consequently,
there may exist matters of a legal nature involving the Company in which we have
not been consulted and have not represented the Company. We express no opinion
as to the laws of any jurisdiction other than the General Corporation Law of the
State of Delaware and the laws of the States of Florida and New York. The
opinions expressed herein concern only the effect of the laws (excluding the
principles of conflict of laws) of the General Corporation Laws of the State of
Delaware and the States of Florida and New York as currently in effect. This
opinion letter is limited to the matters
<PAGE>
stated herein and no opinions may be implied or inferred beyond the matters
expressly stated herein. The opinions expressed herein are given as of this
date, and we assume no obligation to update or supplement our opinions to
reflect any facts or circumstances that may come to our attention or any change
in law that may occur or become effective at a later date.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the prospectus comprising a part of the Registration Statement. In
giving such consent, we do not thereby admit that we are included within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations promulgated thereunder.

Sincerely,
BAKER & MCKENZIE
By: /s/ ANDREW HULSH
-----------------------------------
Andrew Hulsh

<PAGE>

Exhibit 12.1

INTERIM SERVICES INC.
STATEMENT REGARDING COMPUTATION OF RATIOS

PROFORMA
1997 1997 1996 1995 1994 1993
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings Before Taxes $ 67,638 $ 81,439 $ 45,112 $ 41,804 $ 35,484 $ 24,414

Add/(deduct):

Fixed Charges, below 37,331 30,631 9,769 3,386 2,162 3,876

Income (loss) of 50% owned companies

Minority interest in income/(loss) of
majority-owned subs - - - - - -

Distributed earnings of less than 50% owned cos - - - - - -

Amortization of Capitalized Interest 6 6

Interest Capitalized during period (225)

Income, as adjusted $104,975 $112,076 $ 54,656 $ 45,190 $ 37,646 $ 28,290

Fixed Charges:

Interest expense 31,472 24,269 5,696 990 112 1,787

Capitalized Interest - - 225 - - -

Amortization of debt discount and expense - - - - - -

Estimated amount of rental expense deemed to
represent interest factor 5,859 6,362 3,848 2,396 2,050 2,089

Preferred Stock dividend requirements - - - - - -

Fixed Charges 37,331 30,631 9,769 3,386 2,162 3,876

Ratio of Earnings to Fixed Charges 2.81 3.66 5.59 13.35 17.41 7.30
</TABLE>

<PAGE>

Exhibit 25.1

THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T

================================================================================

FORM T-1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|

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

THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)

New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)

48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)

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

Interim Services Inc.
(Exact name of obligor as specified in its charter)

Delaware 36-3536544
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)

2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip code)

______________________

Convertible Subordinated Notes due 2005
(Title of the indenture securities)

===============================================================================

<PAGE>

1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.

- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------

Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203

Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045

Federal Deposit Insurance Corporation Washington, D.C. 20429

New York Clearing House Association New York, New York 10005

(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

Yes.

2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

None.

16. LIST OF EXHIBITS.

EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).

1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)

4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)

-2-
<PAGE>

6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)

7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.

-3-
<PAGE>

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 4th day of May, 1998.

THE BANK OF NEW YORK

By: /s/ JAMES W.P. HALL
----------------------------
Name: JAMES W.P. HALL
Title: VICE PRESIDENT

-4-

<PAGE>
Exhibit 7

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

Consolidated Report of Condition of

THE BANK OF NEW YORK

of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the
close of business December 31, 1997, published in
accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.

Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ....................................... $ 5,742,986
Interest-bearing balances ................................ 1,342,769
Securities:
Held-to-maturity securities .............................. 1,099,736
Available-for-sale securities ............................ 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell......................... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ......................................35,019,608
LESS: Allowance for loan and
lease losses ...................................627,350
LESS: Allocated transfer risk
reserve...............................................0
Loans and leases, net of unearned
income, allowance, and reserve 34,392,258
Assets held in trading accounts ............................ 2,521,451
Premises and fixed assets (including
capitalized leases) ...................................... 659,209
Other real estate owned .................................... 11,992
Investments in unconsolidated
subsidiaries and associated
companies ................................................ 226,263
Customers' liability to this bank on
acceptances outstanding .................................. 1,187,449
Intangible assets .......................................... 781,684
Other assets ............................................... 1,736,574
Total assets ............................................... $56,153,587

LIABILITIES
Deposits:
In domestic offices ...................................... $27,031,362
Noninterest-bearing ............................11,899,507
Interest-bearing ...............................15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ......................... 13,794,449
Noninterest-bearing ...............................590,999
Interest-bearing ...............................13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase....................... 2,338,881
Demand notes issued to the U.S.
Treasury ................................................. 173,851
Trading liabilities ........................................ 1,695,216
Other borrowed money:
With remaining maturity of one year
or less ................................................ 1,905,330
With remaining maturity of more than
one year through three years............................ 0
With remaining maturity of more than
three years ............................................ 25,664
Bank's liability on acceptances exe-
cuted and outstanding .................................... 1,195,923
Subordinated notes and debentures .......................... 1,012,940
Other liabilities .......................................... 2,018,960
Total liabilities .......................................... 51,192,576

EQUITY CAPITAL
Common stock ............................................... 1,135,284
Surplus .................................................... 731,319
Undivided profits and capital
reserves ................................................. 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ............................................... 36,866
Cumulative foreign currency transla-
tion adjustments ......................................... ( 36,184)
Total equity capital ....................................... 4,961,011
Total liabilities and equity
capital .................................................. $56,153,587

I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

Robert E. Keilman

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

\
Thomas A. Renyi |
Alan R. Griffith > Directors
J. Carter Bacot |
/
------------------------------------------------------