P R O S P E C T U S
THE VINCAM GROUP, INC.
637,500 SHARES OF COMMON STOCK
PAR VALUE $.001 PER SHARE
The shareholders of The Vincam Group, Inc. listed on page 10 are
offering and selling 637,500 shares of Vincam common stock under this
prospectus. Vincam will not receive any of the proceeds from the sale of the
shares by the selling shareholders. Vincam will pay the costs of the
registration of the shares offered and sold by the selling shareholders,
estimated to be approximately $29,000.
The shares of Vincam common stock being offered and sold by the Gatsas
Family Limited Partnership and Theodore L. Gatsas were issued by Vincam in
December 1997 when Vincam acquired Staffing Network, Inc. in exchange for a
total of 1,800,000 shares of Vincam common stock. In connection with that
acquisition, Vincam agreed to register for resale in three equal installments
the 1,800,000 shares of Vincam common stock issued in the acquisition. The
600,000 shares being offered and sold by the Gatsas Family Limited Partnership
and Theodore L. Gatsas under this prospectus are the second installment.
Willard S. Finkle, Jr. and John J. Piscioniere acquired their shares of
Vincam common stock in January 1998 when Vincam acquired Corporate Staff
Services, Inc. in exchange for a total of 150,000 shares of Vincam common stock.
In connection with that acquisition, Vincam agreed to register the 150,000
shares of Vincam common stock issued to Mr. Finkle and Mr. Piscioniere in four
installments. The 37,500 shares being offered and sold by Mr. Finkle and Mr.
Piscioniere under this prospectus are the second installment.
The selling shareholders may offer and sell their Vincam common stock
through public or private transactions and may sell their shares at market
prices prevailing at the time of sale, at prices related to such prevailing
prices, at negotiated prices or at fixed prices. The selling shareholders may
also transfer their shares in other ways. See "Plan of Distribution."
The selling shareholders and any brokers and dealers involved in sales
of the shares of Vincam common stock offered under this prospectus may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, and the
commissions or discounts and other compensation paid to those brokers and
dealers may be regarded as underwriters' compensation. See "Risk Factors --
Possible Lack of Financial Resources of Selling Shareholders."
Vincam's common stock is traded on the Nasdaq National Market under the
symbol VCAM. On October 29, 1998, the closing price of one share of Vincam
Common Stock was $15.19.
SEE "RISK FACTORS" STARTING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF
VINCAM COMMON STOCK OFFERED BY THE SELLING SHAREHOLDERS.
THE SHARES OF VINCAM COMMON STOCK OFFERED OR SOLD UNDER THIS PROSPECTUS
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER 11, 1998.
THE COMPANY
Vincam provides small and medium-sized businesses with an outsourcing
solution to the complexities and costs related to employment and human
resources. According to Staffing Industry Analysts, Inc., Vincam was one of the
ten largest professional employer organizations (or PEOs) in the industry in
1996, based on 1996 revenues. The Company's integrated employment-related
services consist of human resource administration, employment regulatory
compliance management, workers' compensation coverage, health care and other
employee benefits. The Company establishes a co-employer relationship with its
clients and contractually assumes substantial employer responsibilities with
respect to worksite employees. The Company believes its services assist business
owners in: (i) managing costs associated with workers' compensation, health
insurance coverage, workplace safety programs, and employee-related litigation,
(ii) providing employees with competitive health care and related benefits that
are more characteristic of large employers, and (iii) reducing the time and
effort required by business owners and executives to deal with the increasingly
complex legal and regulatory environment affecting employment. As of September
30, 1998, the Company provided professional employer services to approximately
2,150 client organizations with over 45,000 worksite employees, primarily in
Florida, Georgia, Colorado, Michigan and New England. Vincam was incorporated in
Florida in September 1984 as "Human Power Resources, Inc.," and changed its name
to "The Vincam Group, Inc." in 1989. The Company's corporate headquarters are
located at 10200 Sunset Drive, Miami, Florida 33173, and its telephone number is
(305) 630-1000.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
(CAUTIONARY STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995)
This prospectus and some of the disclosure and analysis incorporated by
reference into this prospectus contain some forward-looking statements.
Forward-looking statements give our current expectations or forecasts of future
events. You can identify these statements by the fact that they do not relate
strictly to historical or current facts. Such statements use words such as "will
result," "are expected to," "will continue," "is anticipated," "believes,"
"estimated," "intends," "plans," "projection" and "outlook," and other words of
similar meanings. Any statements using those words involve estimates,
assumptions, and uncertainties which could cause actual results to differ
materially from those expressed in those forward-looking statements. Any or all
of our forward-looking statements in this prospectus and in any documents
incorporated by reference into this prospectus may turn out to be wrong. They
can be affected by inaccurate estimates or assumptions that we may make or by
known or unknown risks and uncertainties. You should carefully read this
prospectus, and particularly the risk factors set forth in this prospectus under
"Risk Factors" for more information. Many factors discussed under "Risk Factors"
will be important in determining future results, including the effects of
various governmental regulations, the fluctuation of the Company's direct costs
and the effectiveness of the Company's acquisition strategy. Consequently, no
forward-looking statement can be guaranteed. You should not place undue reliance
on any forward-looking statements contained in this prospectus.
We undertake no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise. New factors
emerge from time to time, and it is not possible for management to predict all
of such factors. Further, management cannot assess the impact of each such
factor on the business or the degree to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements. You are advised, however, to consult any further
disclosures we make on related subjects in our 10-Q, 8-K and 10-K reports to the
SEC.
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RISK FACTORS
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of Vincam
common stock.
POTENTIAL FOR UNFAVORABLE INTERPRETATION OF GOVERNMENT REGULATIONS
The Company's operations are affected by many federal, state and local
laws relating to labor, tax, insurance and employment matters and the provision
of managed care services. By contracting with client companies to form an
employment relationship with worksite employees who work at client company
locations, the Company assumes certain obligations and responsibilities of an
employer under these laws. Many of the laws related to the employment
relationship were enacted before the development of alternative employment
arrangements, such as those provided by PEOs and other staffing businesses.
These laws do not specifically address the obligations and responsibilities of
non-traditional employers. Interpretive issues concerning such relationships
have arisen and remain unsettled. Uncertainties arising under the Internal
Revenue Code of 1986 include, but are not limited to, the qualified tax status
and favorable tax status of certain benefit plans provided by the Company and
other alternative employers. The unfavorable resolution of these unsettled
issues could have a material adverse effect on the Company's results of
operations, financial condition and liquidity.
In addition, existing laws and regulations may be interpreted more
broadly in the future so as to apply to the Company's existing activities. New
laws and regulations may be enacted with respect to the Company's activities.
Either of these events could have a material adverse effect on the Company's
business, financial condition, results of operations and liquidity.
FAILURE TO MANAGE INTERNAL GROWTH OR TO INTEGRATE ACQUISITIONS
The Company has experienced significant internal growth and growth
through acquisitions. The Company intends to continue to pursue an acquisition
strategy. Acquisitions may result in potentially dilutive issuances of equity
securities and may materially adversely affect the Company's operating results
due to
/bullet/ significant transaction expense
/bullet/ increased interest and amortization expense
/bullet/ increased depreciation expense, and
/bullet/ decreased operating income.
Acquisitions also involve other risks, including
/bullet/ increases in costs due to competition for acquisition targets
/bullet/ difficulties in integrating the acquired operations
/bullet/ diversion of management resources, and
/bullet/ the risks associated with entry into new markets.
Although the Company has acquired five PEOs since July 1996, there is a
risk that
/bullet/ other suitable acquisition candidates may not be found in the
future
/bullet/ the Company may not have or be able to obtain the necessary
financing to complete acquisitions
/bullet/ acquisitions may not be available on favorable terms to the
Company, and
/bullet/ any acquired companies may not be successfully integrated into
the Company's operations.
The Company's growth may place a significant strain on the Company's
management, financial, operating and technical resources. Management skills,
personnel, information systems and other resources and systems currently in
place may not be adequate to implement the Company's acquisition strategy or to
accommodate the Company's internal growth. The Company's failure to manage
growth effectively or to implement its acquisition
3
strategy could have a material adverse effect on the Company's results of
operations, financial condition and liquidity.
RISKS ASSOCIATED WITH EXPANSION INTO ADDITIONAL STATES
The Company operates primarily in Florida, Michigan, New England,
Colorado and Georgia. Operations in those areas accounted for the following
percentages of revenues for 1997 and the nine months ended September 30, 1998:
YEAR ENDED DECEMBER 31, 1997 NINE MONTHS ENDED SEPTEMBER 30, 1998
- ---------------------------- ------------------------------------
Florida 47% Florida 49%
Michigan 21% Michigan 22%
New England 12% New England 13%
Colorado 9% Colorado 47%
Georgia 9% Georgia 8%
Future growth of the Company's operations depends, in part, on its
ability to offer its services to prospective clients in additional states. In
order to operate effectively in a new state, the Company must:
/bullet/ obtain all necessary regulatory approvals
/bullet/ achieve acceptance in the local market
/bullet/ adapt its procedures to that state's regulatory requirements
and local market conditions, and
/bullet/ establish internal controls that enable it to conduct
operations in several locations.
While many states do not explicitly regulate PEOs, approximately
one-third of the states (including Florida and New Hampshire where the Company
conducts business) have laws with respect to licensing or registration
requirements for PEOs. Several additional states (including Georgia and
Michigan, where the Company conducts business) have considered such regulation.
Such laws vary from state to state but generally provide for monitoring the
fiscal responsibility of PEOs and specify the employer responsibilities assumed
by PEOs. The Company believes that it is in material compliance with all
applicable PEO licensing and registration requirements, but PEO licensing and
registration requirements create the following risks:
/bullet/ the Company may not be able to comply with any new or
additional regulations which may be imposed upon it in the
future
/bullet/ the Company may not be able to satisfy licensing requirements
or other applicable regulations of any particular state in
which it is not currently operating
/bullet/ the Company may not be able to provide the full range of
services currently offered in Florida in another state, and
/bullet/ the Company may not be able to operate profitably within the
regulatory environment of any state in which it does obtain
regulatory approval.
The absence of required licenses would require the Company to restrict
the services it offers. In addition, as the Company expands into additional
states, the Company may not be able to duplicate in other markets the revenue
growth and operating results experienced in its Florida market.
GEOGRAPHIC MARKET CONCENTRATION
The Company's South Florida market (Dade, Broward and Palm Beach
counties) accounted for approximately 47% of the Company's revenues for the year
ended December 31, 1997, and approximately 49% of the Company's revenues for the
nine months ended September 30, 1998. For the foreseeable future, a significant
portion of the Company's revenues will depend on economic conditions prevailing
in South Florida. Economic conditions in South Florida may be affected by the
strength of Latin American economies and trade and the effects of natural
disasters, such as hurricanes and tornadoes.
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ADEQUACY OF RESERVES
The Company participates in (i) a fully insured health insurance plan
in most states, (ii) a minimum premium health insurance plan and a fully insured
health insurance plan in Florida, and (iii) a self-insured health insurance
program in other states. Third party insurers provide insurance (stop-loss
coverage) to the extent claims under such minimum premium and self-insured
health insurance plans exceed certain levels. As a result, the Company pays a
portion of the medical claims of its worksite employees. In addition, in certain
cases the Company provides specialty managed care services on a capitated,
risk-bearing basis. If the Company is not successful in managing the severity
and frequency of medical claims, the costs incurred by the Company will increase
and may have a material adverse effect on the Company's financial condition,
results of operations and liquidity. In addition, if an insurer delays or denies
the payment of a claim for stop loss coverage, or the amount of stop loss
coverage proves to be inadequate, the Company's financial condition, results of
operations and liquidity could be materially adversely affected. The Company
maintains reserves for medical and behavioral health claims based on periodic
reviews of open claims, past claims experience and other factors deemed relevant
by management. While the Company believes such reserves are adequate, the
Company cannot predict with certainty the ultimate liability associated with
open claims, and past claims experience may not be indicative of future results.
Accordingly, if estimated reserve amounts prove to be less than the ultimate
liability with respect to these claims, the Company's financial condition,
results of operations and liquidity could be materially adversely affected.
INCREASES IN HEALTH CARE AND WORKERS' COMPENSATION INSURANCE COSTS
Health care costs and insurance premiums make up a significant part of
the Company's operating expenses. Accordingly, the Company uses managed care
procedures in an attempt to control health care costs and the cost of insurance
premiums. Laws and regulations relating to health care are subject to change by
action of the U.S. Congress, various state legislatures or both. If changes in
health care laws or regulations result in an increase in the Company's health
care costs, the Company may not be able to immediately incorporate such
increases into the fees charged to clients because of its existing contractual
arrangements with clients. As a result, any such increases in health care costs
could have a material adverse effect on the Company's financial condition,
results of operations and liquidity.
The cost of workers' compensation insurance coverage is also a
significant part of the Company's operating expenses. Accordingly, the Company
also uses extensive managed care procedures in an attempt to control workers'
compensation costs and related insurance premiums. Changes to existing workers'
compensation rating systems, which could result in increased insurance premiums,
and other increases in workers' compensation costs and related insurance
premiums could have a material adverse effect on the Company's financial
condition, results of operations and liquidity.
NEED FOR LICENSES AND CERTIFICATIONS
State and federal authorities extensively regulate the managed health
care industry. Some of the Company's arrangements relating to specialty managed
care services or the maintenance or operation of health care provider networks
require the Company to satisfy operating, licensing or certification
requirements. Any further expansion of the range of specialty managed care
services offered by the Company is likely to require the Company to satisfy
additional licensing and regulatory requirements. The Company may not be able to
obtain or maintain all of the required licenses or certifications. The Company's
failure to obtain or maintain any required licenses or certifications could have
a material adverse effect on the Company's results of operations, financial
condition and liquidity.
UNCERTAINTY OF IMPACT OF HEALTH CARE OR WORKERS' COMPENSATION REFORM
Regulation in the health care and workers' compensation fields
continues to evolve, and the Company cannot predict what additional government
regulations affecting its business may be adopted in the future. In addition,
health care reform and/or specific changes in laws or regulations may
5
/bullet/ adversely impact demand for the Company's services
/bullet/ require the Company to develop new or modified services to
meet the demands of the marketplace, or
/bullet/ require the Company to modify the fees that the Company
charges for its services.
For example, Colorado has enacted health care insurance legislation
which has reduced certain cost advantages that the Company can offer to small
business clients in that state. Similar legislation is being considered in at
least one other state. Although the Company is not in a position to determine
the full cost of compliance with Colorado's small business health care
legislation, the Company anticipates that such costs will be significant. Such
legislation has adversly affected the Company's ability to attract and retain
clients in Colorado. The Company cannot currently quantify the impact of such
legislation or determine whether it will ultimately be material to the Company's
results of operations.
QUARTERLY FLUCTUATIONS IN OPERATING RESULTS
In the past, the Company's quarterly operating results have fluctuated
significantly as a result of a number of factors. These factors include the
timing of new contracts and terminations of existing contracts, the effect of
employment tax limits and the delivery of health care services. None of these
factors can be predicted with any degree of certainty.
DEPENDENCE UPON KEY PERSONNEL
The Company depends to a substantial extent upon the continuing efforts
and abilities of certain key management personnel, including Carlos A.
Saladrigas (the Company's Chairman and Chief Executive Officer) and Jose M.
Sanchez (the Company's Vice Chairman and Area President--South Florida). The
Company does not have employment agreements with any of its executive officers.
The loss of services of certain of the Company's executive officers could have a
material adverse effect upon the Company's financial condition, results of
operations and liquidity.
FINANCIAL CONDITION OF CLIENTS
The Company is obligated to pay the wages and salaries of its worksite
employees regardless of whether the Company's clients pay the Company on a
timely basis or at all. The Company's financial condition, results of operations
and liquidity could be materially adversely affected if a client experiences
financial difficulty or is unable to satisfy its obligations to Vincam for other
reasons.
SHORT TERM NATURE OF PEO SERVICES AGREEMENTS
The Company's standard PEO services agreement is for an initial
one-year term, but may be terminated by the Company or the client at any time
during the first year by giving 30 days' prior written notice. After the first
year, the contract may be terminated by either Vincam or the client by giving
written notice at least 30 days before the end of the renewal term or
immediately for cause. Client contracts of companies that Vincam has acquired
may be terminated with shorter notice, or under different terms, than the
Company's standard PEO services agreements. A significant number of client
contract terminations could have a material adverse effect on the Company's
financial condition, results of operations and liquidity.
RISK OF LOSS OF QUALIFIED STATUS FOR CERTAIN TAX PURPOSES
Several years ago, the Internal Revenue Service established an Employee
Leasing Market Segment Group for the purpose of identifying specific compliance
issues prevalent in certain segments of the PEO industry. Approximately 70 PEOs
were randomly selected by the IRS for audit under this program. Vincam was not
one of the PEOs selected by the IRS for audit under this program. One issue that
arose in the course of these audits is whether PEOs should be considered the
employers of worksite employees under Internal Revenue Code provisions
applicable to employee benefit plans, which would permit PEOs to offer benefit
plans that qualify for favorable tax treatment to worksite employees. The Market
Segment Group also examined whether client company owners are employees of PEOs
under Internal Revenue Code provisions applicable to employee benefit plans. The
Company understands that these issues were referred to the IRS National Office,
which has not issued any official position statement on any of these questions.
The Company cannot predict the timing or nature of the findings of the Market
Segment Group.
If the IRS concludes that PEOs are not employers of worksite employees
for purposes of the Internal Revenue Code, the tax qualified status of the
Company's 401(k) plan could be revoked and its cafeteria plan may
6
lose its favorable tax status. Worksite employees could not continue to
participate in such plans or in certain other employee benefit plans of the
Company. In addition, the Company may no longer be able to assume the client
company's federal employment tax withholding obligations. If such a conclusion
were applied retroactively, then (i) employees' vested account balances would
become taxable immediately, (ii) the Company would lose its tax deduction to the
extent contributions were not vested, (iii) the plan trust would become a
taxable trust and (iv) penalties and additional taxes for prior periods could be
assessed. In such a circumstance, the Company would face the risk of client
dissatisfaction as well as potential litigation, and its financial condition,
results of operations and liquidity could be materially adversely affected. In
addition, if the Company is required to report and pay employment taxes for the
separate accounts of its clients rather than for its own account as a single
employer, the Company would incur increased administrative burdens.
RISK OF MULTIPLE-EMPLOYER PLAN TREATMENT
The U.S. Department of Labor has issued a few advisory opinions to PEOs
advising those PEOs that their health plans covering worksite employees were
multiple-employer plans, rather than single employer plans. The Company believes
it is a co-employer of worksite employees and, as such, views its group health
plan, which also covers worksite employees, to be a single employer plan. If
these Department of Labor opinions were applied to the Company's health plan, or
to the Company's other employee benefit plans, the Department of Labor could
assess penalties against the Company for having incorrectly filed annual reports
treating such plan(s) as a single employer plan. The Department of Labor could
also assess penalties against the Company's clients for failure to file annual
reports. States that have laws governing multiple employer plans also may assess
penalties for violations of such laws, including those that mandate certain
benefit plan trust funding and reporting requirements. In any such case, the
Company would face the risk of client dissatisfaction as well as potential
litigation, and its financial condition, results of operations and liquidity
would be materially adversely affected.
LIABILITIES FOR CLIENT AND EMPLOYEE ACTIONS
A number of legal issues with respect to the co-employment arrangements
among PEOs, their clients and worksite employees remain unresolved. These issues
include who bears the ultimate liability for violations of employment and
discrimination laws. The Company's standard client service agreement establishes
a contractual division of responsibilities between the Company and each client
for various human resource matters, including compliance with and liability
under various governmental regulations. However, as a result of the Company's
status as a co-employer, the Company may be liable for violations of these or
other laws despite these contractual provisions, even if it does not participate
in such violations. The Company's client service agreements generally provide
that the client is to indemnify the Company for any liability caused by the
client's failure to comply with its contractual obligations and the requirements
imposed by law. However, the Company may not be able to collect on such a
contractual indemnification claim and may then be responsible for satisfying
such liabilities. In addition, worksite employees may be deemed to be agents of
the Company, which could make the Company liable for their actions.
POTENTIAL LEGAL LIABILITY
The management and administration of the delivery of health care and
other services entail inherent risks of liability. In the ordinary course of the
Company's business, various claims, suits and complaints relating to the
provision of medical care may be filed or made against the Company from time to
time. These claims, suits and complaints may include those related to denial of
benefits to worksite employees and negligence in credentialing of providers. In
addition, as an employer, claims for a wide variety of employment-related
matters, such as claims for injuries, wrongful deaths, discrimination, wage and
hours violations, may be made against the Company. More specifically, the
Company's financial condition and results of operations may be affected by
several uncertainties including the conclusions that may be reached by the IRS
Market Segment Group and the resolutions of certain legal proceedings that are
currently pending against the Company. Each of these uncertainties may have a
material adverse effect on the Company's operations or financial condition. For
more information about the pending legal proceedings, please refer to the
Company's disclosures contained in (i) Item 3 "Legal Proceedings" of the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, as
amended by Form 10-K/A No.1, (ii) Note 13 of the Notes to Consolidated Financial
Statements in the 1997 Form 10-K, as amended, and (iii)
7
Note 6 of the Notes to Unaudited Consolidated Financial Statements in the
Company's Form 10-Q for the quarterly period ended June 30, 1998. The 1997 Form
10-K, as amended, and the Form 10-Q for the quarterly period ended June 30,
1998, are both incorporated by reference into this prospectus.
RISK OF INADEQUATE INSURANCE
Although the Company carries professional and general liability
insurance, the insurance carried by the Company or its providers may not be
sufficient to cover any judgments, settlements or costs relating to any present
or future claims, suits or complaints. In addition, sufficient insurance may not
be available to the Company or such providers in the future on satisfactory
terms or at all. If the insurance carried by the Company or its providers is not
sufficient to cover any judgments, settlements or costs relating to any present
or future claims, suits or complaints, the Company's business, financial
condition, results of operations and liquidity could be materially adversely
affected.
COMPETITION
The PEO industry is highly fragmented. According to the National
Association of Professional Employer Organizations, there are approximately
2,000 PEOs in operation. The Company competes with other PEOs and with
single-service and "fee for service" companies such as payroll processing firms,
insurance companies and human resource consultants. Many of these companies have
limited operations and fewer than 1,000 worksite employees, but there are
several industry participants which are comparable in size to the Company. The
Company also competes directly with independent local and national entities that
offer managed behavioral health or workers' compensation services as well as
with insurance carriers and other provider groups that have managed care
capabilities. In addition, the Company may encounter substantial competition
from new market entrants. Some of the Company's current and future competitors
may be significantly larger, have greater name recognition and have greater
financial, marketing and other resources than the Company. The Company may not
be able to compete effectively against such competitors in the future.
LOSS OF BENEFIT PLANS
The Company's business depends on maintaining health and workers'
compensation insurance plans that cover worksite employees. The Company believes
that the terms of its current health and workers' compensation contracts are
favorable. While the Company believes that replacement contracts could be
secured on competitive terms without causing significant disruption to the
Company's business, the Company may be wrong.
CONCENTRATION OF COMMON STOCK OWNERSHIP
As of September 30, 1998, the executive officers and directors of the
Company beneficially owned an aggregate of approximately 5,486,343 of the
outstanding shares of common stock of the Company, constituting approximately
35.0% of the outstanding shares of common stock of the Company. As a result, the
Company's executive officers and directors are in a position to influence
significantly the Company's affairs and operations, including the election of
directors.
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of the Company's common stock could be highly
volatile, fluctuating in response to factors such as
/bullet/ changes in the economy or the financial markets
/bullet/ variations in the Company's operating results
/bullet/ the Company's failure to achieve earnings consistent with
analysts' estimates
/bullet/ announcements of new services, acquisitions or market
expansions by the Company or its competitors, and
/bullet/ developments relating to regulatory or other issues affecting
the PEO or managed care industries.
8
In addition, the Nasdaq National Market generally has experienced and
will likely continue to experience significant price and volume fluctuations
which could adversely affect the market price of the Company's common stock,
regardless of the Company's operating performance.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Vincam common stock in the public
market could have an adverse effect on prevailing market prices of the common
stock and adversely affect the Company's ability to raise capital at a time and
on terms favorable to the Company. After this offering, approximately 9,838,000
shares may be traded on the public market without restriction, while
approximately 5,197,000 additional shares of the Company's common stock will be
eligible for sale under Rule 144 under the Securities Act of 1933. In addition,
certain shareholders will have the right to require the Company to register up
to a total of 660,000 additional shares of common stock which are not currently
eligible for sale under Rule 144.
ANTI-TAKEOVER EFFECT
Certain Florida legislation applicable to the Company may deter or
frustrate takeovers of the Company. Certain provisions of the Articles of
Incorporation and Bylaws of the Company may also deter takeovers of the Company.
In addition, the Company is authorized to issue 20,000,000 shares of preferred
stock with terms determined by the Board of Directors without a shareholder
vote. These terms include voting, dividend or liquidation rights that could be
greater than or senior to the rights of common shareholders. The Company could
issue preferred stock with greater rights than the common stock as an
anti-takeover device. The Company does not currently plan or intend to issue any
such preferred stock.
POSSIBLE LACK OF FINANCIAL RESOURCES OF SELLING SHAREHOLDERS
The selling shareholders may be deemed to be underwriters under the
Securities Act of 1933. As underwriters, they may become liable to the
purchasers of the shares of Vincam common stock offered and sold under this
prospectus under the terms of the Securities Act of 1933 if certain provisions
of the Act are not complied with by them. The selling shareholders may not have
the financial resources necessary to satisfy any such liability.
9
SELLING SHAREHOLDERS
The selling shareholders are Theodore L. Gatsas, the Gatsas Family
Limited Partnership, Willard S. Finkle, Jr., and John J. Piscioniere. The
Company will not receive any proceeds from the sale of the shares offered and
sold by the selling shareholders.
Michael J. Gatsas and Theodore L. Gatsas each acquired 900,000 shares
of Vincam common stock from the Company in exchange for their shares of Staffing
Network, Inc. in December 1997. Michael J. Gatsas then contributed 300,000 of
his shares to the Gatsas Family Limited Partnership in October 1998. All of
these acquisitions of Vincam common stock were exempt from the registration
provisions of the Securities Act of 1933.
Willard S. Finkle, Jr. and John J. Piscioniere each acquired 75,000
shares of Vincam common stock from the Company in exchange for their shares of
Corporate Staff Services, Inc. in January 1998. The acquisition of Vincam common
stock by Mr. Finkle and Mr. Piscioniere was exempt from the registration
provisions of the Securities Act of 1933.
To the best of the Company's knowledge, the following table sets forth
certain information about the selling shareholders as of October 5, 1998. All
share numbers in the table have been adjusted to reflect the three-for-two stock
split effected by way of a stock dividend, which was declared by the Company on
November 6, 1997 and paid on December 10, 1997 to stockholders of record on
November 21, 1997. The Company believes that the selling shareholders have sole
voting power and investment power over all shares of Vincam common stock listed
below, except as otherwise reflected in the footnotes to the table.
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING NUMBER OF SHARES OWNED AFTER OFFERING(1)
SELLING SHAREHOLDERS NUMBER PERCENT BEING OFFERED NUMBER PERCENT
- -------------------- ------ ------- ---------------- ------ -------
Gatsas Family Limited
Partnership (2) 818,100 5.2% 300,000 518,100 3.3%
Theodore L. Gatsas (2) 900,000 5.8% 300,000 600,000 3.8%
Willard S. Finkle, Jr. (3) 72,500 * 18,750 53,750 *
John J. Piscioniere (3) 75,000 * 18,750 56,250 *
<FN>
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(1) Assumes that all of the shares held by the selling shareholders and
being offered under this prospectus are sold, and that the selling shareholders
do not acquire or dispose of any other shares of common stock before the
completion of this offering.
(2) A total of 510,000 of the shares of common stock which will be owned by
the Gatsas Family Limited Partnership and Theodore L. Gatsas after the
completion of this offering, plus an additional 90,000 owned by Michael J.
Gatsas, may be registered in the future by the Company as a result of certain
registration rights granted to Michael J. Gatsas and Theodore L. Gatsas by the
Company. A total of 300,000 shares of common stock have already been registered
for resale by the Gatsas Family Limited Partnership, and another 300,000 shares
of common stock have already been registered for resale by Theodore L. Gatsas.
Michael J. Gatsas is the sole member of the limited liability company which is
the general partner of the Gatsas Family Limited Partnership. As a result,
Michael J. Gatsas has voting and dispositive power over all shares of common
stock held by the Gatsas Family Limited Partnership.
Theodore L. Gatsas, Michael J. Gatsas and the Gatsas Family Limited
Partnership did not have any material relationship with Vincam before Vincam's
acquisition of Staffing Network, Inc., in December 1997. Michael J. Gatsas and
Theodore L. Gatsas are both employed by Vincam/Staffing Network, Inc., a wholly
owned subsidiary of the Company.
(3) A total of 60,000 shares of common stock which will be owned by Willard
S. Finkle, Jr. and John J. Piscioniere after the completion of this offering may
be registered in the future by the Company as a result of certain
10
registration rights granted to Mr. Finkle and Mr. Piscioniere by the Company. A
total of 23,750 shares of common stock have already been registered for resale
by Mr. Finkle, and another 26,250 shares of common stock have already been
registered for resale by Mr. Piscioniere.
Neither Mr. Finkle nor Mr. Piscioniere had any material relationship
with Vincam before Vincam's acquisition of Corporate Staff Services, Inc. in
January 1998. Mr. Finkle and Mr. Piscioniere both became employees of Vincam in
connection with that acquisition.
</FN>
PLAN OF DISTRIBUTION
The selling shareholders may offer their Vincam common stock at various
times in one or more of the following transactions:
/bullet/ on the Nasdaq Stock Market
/bullet/ in the over-the-counter market
/bullet/ in transactions other than on the Nasdaq Stock Market or the
over-the-counter market
/bullet/ in connection with short sales of Vincam shares
/bullet/ by pledge to secure debts and other obligations
/bullet/ in connection with the writing of non-traded and
exchange-traded call options
/bullet/ in hedge transactions
/bullet/ in settlement of other transactions in standardized or
over-the-counter options and
/bullet/ in a combination of any of the above transactions.
The selling shareholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing prices, at
negotiated prices or at fixed prices.
If a selling shareholder pledges Vincam shares to secure a debt and
defaults on that debt, the pledgee in that transaction would have the same
rights of sale as the selling shareholders under this prospectus. The selling
shareholders may also transfer their shares of Vincam common stock in other ways
which do not involve market makers or established trading markets, including
directly by gift, distribution, or other transfer without consideration. The
recipient of such shares of Vincam common stock would have the same rights of
sale as the selling shareholders under this prospectus. The selling shareholders
may also sell shares of Vincam common stock under Rule 144 of the Securities Act
of 1933 rather than under this prospectus.
The selling shareholders may use broker-dealers to sell their shares.
If this happens, broker-dealers will either receive discounts or commissions
from the selling shareholders, or they will receive commissions from purchasers
of shares for whom they acted as agents. The selling shareholders and any
brokers and dealers through whom sales of the shares are made may be deemed to
be "underwriters" under the Securities Act of 1933, and the commissions or
discounts and other compensation paid to such persons may be regarded as
underwriters' compensation. See "Risk Factors -- Possible Lack of Financial
Resources of Selling Shareholders." The Company has agreed to indemnify the
selling shareholders against certain liabilities, including liabilities under
the Securities Act of 1933.
The selling shareholders may decide not to sell any of the shares
offered under this prospectus.
LEGAL MATTERS
Steel Hector & Davis LLP, Miami, Florida, has rendered an opinion as to
the validity of the shares of common stock offered under this prospectus.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as amended by Form 10-K/A No. 1 and (ii) its Amendment No. 1
to the Current Report on Form 8-K dated December 1, 1997 have been so
incorporated in reliance
11
on the reports of PricewaterhouseCoopers LLP, independent certified public
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of Staffing Network, Inc. at December 31, 1996
and 1995, and for the years then ended, incorporated in this prospectus by
reference to the Company's Amendment No. 1 to the Current Report on Form 8-K
dated December 1, 1997 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in auditing and accounting.
The financial statements of Staffing Network, Inc. for the year ended
December 31, 1994 incorporated in this prospectus by reference to the Company's
Amendment No. 1 to the Current Report on Form 8-K dated December 1, 1997 have
been so incorporated in reliance, in part, on the report of Howe, Riley & Howe
Professional Corporation, given on the authority of said firm as experts in
auditing and accounting.
The report of Plante & Moran, LLP relating to the consolidated
financial statements of Amstaff, Inc. for the two year period ended December 31,
1996 incorporated in this prospectus by reference to the Company's 1997 Form
10-K, as amended, have been so incorporated in reliance on the report of Plante
& Moran, LLP, independent certified public accountants, given upon the authority
of said firm as experts in auditing and accounting.
The report of Ehrhardt Keefe Steiner & Hottman PC relating to the
consolidated financial statements of Staff Administrators, Inc. for the two year
period ended December 31, 1996 incorporated in this prospectus by reference to
the Company's 1997 Form 10-K, as amended, have been so incorporated in reliance
on the report of Ehrhardt Keefe Steiner & Hottman PC, given upon the authority
of said firm as experts in auditing and accounting.
12
WHERE YOU CAN FIND MORE INFORMATION
Vincam files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any document Vincam
files at the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms. Vincam's SEC filings are also
available to the public from the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference in
this prospectus is considered to be part of this prospectus, and information
that we file after the date of filing of this prospectus with the SEC will
automatically update and supersede the information contained in this prospectus.
We incorporate by reference the documents listed below and any filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this prospectus:
1. Vincam's Annual Report on Form 10-K for the year ended
December 31, 1997 (Commission File No. 0-28148).
2. Vincam's Form 10-K/A No. 1 for the year ended December 31,
1997 (Commission File No. 0-28148).
3. Vincam's Amendment No. 1 to its Current Report on Form 8-K
dated December 1, 1997 (Commission File No. 0-28148).
4. Vincam's Proxy Statement dated April 22, 1998 (Commission File
No. 0-28148).
5. Vincam's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998 (Commission File No. 0-28148).
6. Vincam's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1998 (Commission File No. 0-28148).
7. Vincam's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1998 (Commission File No. 0-28148).
8. Vincam's Form 10-Q/A No. 1 for the quarterly period ended
September 30, 1998 (Commission File No. 0-28148).
9. Vincam's Current Report on Form 8-K, dated December 3, 1998
(Commission File No. 0-28148).
10. The description of the Vincam common stock which is contained
in Vincam's Registration Statement filed on Form 8-A, dated
April 4, 1996 (Commission File No. 0-28148).
You may request a copy of these filings (but not the exhibits to the
filings, unless the exhibits are specifically incorporated by reference into
this prospectus), at no cost, by writing or telephoning Vincam's Investor
Relations Department at the following address:
The Vincam Group, Inc.
Investor Relations Department
10200 Sunset Drive
Miami, FL 33173
Telephone number: (305) 630-1000
This prospectus is part of a registration statement we filed with the
SEC. Any information in this prospectus concerning any documents that are
exhibits to the registration statement may not be complete, and you should refer
to the copy of such document filed as an exhibit to the registration statement
or otherwise filed with the SEC for more information.
You should rely only on the information or representations provided in
this prospectus. Vincam has not authorized anyone to provide you with different
or additional information. We are not making an offer of Vincam common stock in
any state were the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the prospectus.
13
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NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS
PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
PAGE
----
The Company............................... 2
Cautionary Note Regarding Forward
Looking Statements.................... 2
Risk Factors.............................. 3
Selling Shareholders...................... 10
Plan of Distribution ..................... 11
Legal Matters............................. 11
Experts................................... 11
Where You Can Find More
Information........................... 13
THE VINCAM GROUP, INC.
637,500 SHARES
COMMON STOCK
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P R O S P E C T U S
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December 11, 1998
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