• New market will increase company’s current prospect base by more than 20%

HOUSTON, TX – December 14, 1998 – Administaff, Inc. (NYSE: ASF), a leading Professional Employer Organization (PEO), today announced plans to expand into New York City in April 1999, thereby strengthening the company’s leadership in the fast-growing PEO industry.

The planned opening of two sales offices in midtown Manhattan will increase Administaff’s current prospect base by 23 percent, or more than 97,000 small- to medium-sized businesses, according to company estimates. In addition, the New York City offices will expand Administaff’s sales operations to include a total of 15 markets. Together, those 15 markets represent more than 500,000 businesses and approximately 7.5 million worksite employees that fit our target profile.

"New York City represents one of the nation’s largest concentrations of small business prospects, so this market presents Administaff with a tremendous growth opportunity," said Paul J. Sarvadi, Administaff president and chief executive officer.

"Our entry into this market was accelerated by at least a year due to the initial success of our marketing alliance with American Express," Sarvadi added. "We expect American Express’ strong position in New York City to help us reach our prospect base more efficiently."

Under the terms of a marketing alliance announced earlier this year, American Express is generating appointments with small business customers that are good prospects for Administaff’s services.

In addition to the planned expansion into New York City, Administaff’s national presence includes sales offices in Atlanta, Austin, Charlotte, Chicago, Dallas, Denver, Houston, Los Angeles, Orlando, Phoenix, San Antonio, San Francisco, St. Louis, and Washington, D.C.

Administaff is one of the nation’s leading Professional Employer Organizations, providing small- to medium-sized businesses with a comprehensive Personnel Management System that includes benefits and payroll administration, medical and workers’ compensation insurance programs, personnel records management, employer liability management, employee recruiting and selection, performance management, and training and development services. The company currently has 22 offices in 14 major markets and serves clients and worksite employees throughout the United States.

(NOTE: The statements contained in this press release that are not historical facts are forward-looking statements that involve a number of risks and uncertainties. Therefore, the actual results of future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) regulatory and tax developments; (ii) changes in the company’s direct costs and operating expenses; (iii) the effectiveness of the company’s sales and marketing efforts, including its marketing agreement with American Express, American Express’ ability to set qualified appointments and the company’s ability to convert those appointments into sales; (iv) the estimated costs and effectiveness of capital projects and investments in technology and infrastructure; (v) changes in the competitive environment in the PEO industry; and (vi) the effectiveness and estimated costs of the company’s Year 2000 conversion and contingency plans. These factors are described in further detail in the company’s filings with the Securities and Exchange Commission.)