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                                                                   EXHIBIT 10.36


                              STAFF BUILDERS, INC.


                                                   DECEMBER 1, 1998


To the Person Named as
Optionee on Schedule A
to this Agreement


                    Re:      Grant of Nonqualifying Stock Options
                             to Purchase Shares of the Common
                             Stock of Staff Builders, Inc.


Dear Optionee:

         You and Staff Builders, Inc., a Delaware corporation (the
"Corporation"), hereby agree as follows:

         1. Reference. This is the Stock Option Agreement referred to in Section
7(1) of the Corporation's 1994 Performance- Based Stock Option Plan (the
"Plan"). The stock option this Agreement grants is a Nonqualifying Stock Option,
as set forth in Section 5 below. This Agreement incorporates all terms,
conditions and provisions of the Plan.

         2. Stock Option.

              (a) The Corporation hereby grants to the Optionee the option (the
"Stock Option") to purchase that number of shares of Class A Common Stock of the
Corporation, par value $.01 per share, set forth in Paragraph (b) of this
Section. The Corporation will issue these shares as fully paid and nonassessable
shares upon the Optionee's exercise of the Stock Option. The Optionee may
exercise the Stock Option in accordance with this Agreement any time between six
months and the tenth anniversary of the date of grant of the Stock Option
evidenced by this Agreement, unless earlier terminated according to the terms of
this Agreement.

              (b) The Stock Option shall vest and become exercisable pursuant to
Section 7(c) of the plan.

         3. Exercise of Stock Option. The Optionee may


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To the Person Named as
Optionee on Schedule A
DATE
Page 2


exercise the Stock Option in whole or in part by written notice delivered to the
Corporation in the form of Schedule B to this Agreement. The Optionee shall
enclose with each such notice payment by cash or by valid check in an amount
equal to the number of shares as to which his exercise is made, multiplied by
the option price therefor. The Optionee must exercise the Stock Option on or
before December 1, 2008 after which it will lapse.

         4. Purchase Price. The option price per share shall be the Option Price
as defined in Section 7(b) of the Plan.

         5. Tax Treatment of the Stock Option. The following is a summary of the
federal income tax consequences of the issuance and exercise of nonqualifying
stock options under the Plan to optionees and to the Corporation under the
Internal Revenue Code of 1986, as amended (the "Code"). The following discussion
does not purport to be complete and does not cover, among other things, state
and local tax treatment of participation in the Plan. Furthermore, differences
in optionees' financial situations may cause federal, state and local tax
consequences of participation in the Plan to vary. Therefore, each optionee in
the Plan is urged to consult his own accountant, legal counsel or other
financial advisor regarding the particular tax consequences to him of
participation in the Plan, including the applicability and effect of any state
or local tax laws, and of changes in applicable tax laws.

         The grant of a nonqualifying stock option will not result in the
recognition of taxable income to the optionee for federal income tax purposes or
in deduction to the Corporation. Upon the exercise of a nonqualifying stock
option, the optionee will recognize ordinary income for federal income tax
purposes in an amount equal to the excess of the fair market value of the shares
of Common Stock of the Corporation over the exercise price. Such amount may be
deductible by the Corporation if it complies with applicable reporting
requirements.

         If an optionee disposes of any shares of Class A Common Stock received
upon the exercise of a nonqualifying stock option, such optionee will recognize
a capital gain or loss for federal income tax purposes equal to the difference
between the amount realized on the disposition of such shares and the fair
market value of such shares at the time the option was exercised. The


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To the Person Named as
Optionee on Schedule A
DATE
Page 3



gain or loss will be either long-term or short-term, depending on the holding
period. The Corporation will not be entitled to any tax deduction in connection
with such disposition of shares.

         6. No Rights in Option Stock. Optionee shall have no rights as a
stockholder in respect of any shares subject to the Stock Option unless and
until Optionee has exercised the Stock Option in complete accordance with the
terms hereof, and shall have no rights with respect to shares not expressly
conferred by this Agreement.

         7. Shares Reserved. The Corporation shall at all times during the term
of this Agreement reserve and keep available such number of shares of Class A
Common Stock as will be sufficient to satisfy the requirements of this
Agreement, and shall pay all original issue taxes on the exercise of the Stock
Option, and all other fees and expenses necessarily incurred by the Corporation
in connection therewith; provided, however, that pursuant to Section 7(g) of the
Plan, upon settlement of the Stock Option, it shall be a condition to the
obligation of the Corporation that the Optionee pay to the Corporation such
amount as the Corporation may request for the purpose of satisfying its
liability to withhold federal, state or local income or other taxes.

         8. Nonassignability. The Stock Option and this Agreement shall not be
encumbered, disposed of, assigned or transferred in whole or part, and, except
as described in the Plan, may only be exercised by the Optionee unless the prior
written consent of the Corporation has been obtained. All shares of Class A
Common Stock purchased pursuant to this Agreement shall be purchased for
investment by the Optionee.

         9. Effect Upon Employment. Nothing in this Agreement shall confer on
the Optionee any right to continue in the employment of the Corporation or shall
interfere in any way with the right of the Corporation to terminate Optionee's
employment at any time.

         10. Successors. This agreement shall be binding upon any successor of
the Corporation.


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         In order to indicate your acceptance of the Stock Option on the above
terms and conditions, kindly sign the enclosed copy of this letter agreement and
return it to the Corporation.



                                     STAFF BUILDERS, INC.



                                     /s/ Stephen Savitsky
                                     --------------------
                                     By: Stephen Savitsky




Accepted and Agreed to:



/s/ Willard T. Derr
-------------------
By:Willard T. Derr


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                                                                      SCHEDULE A


                           Nonqualifying Stock Options





Date of Grant: December 1, 1998

Name of Optionee: Willard T. Derr

Number of Shares as to
which the Option is Granted: 15,000

Option Price per Share: $.53

Additional Vesting Provision: All options will automatically
become exercisable on December 1, 2004 regardless of the market
price of the Class A Common Stock.



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                                                                      SCHEDULE B


                         NOTICE OF ELECTION TO EXERCISE


STAFF BUILDERS, INC.
1981 Marcus Avenue
Lake Success, New York  11042


Attention:
          ------------------------------


Gentlemen:

         I hereby irrevocably elect to exercise the Stock Option held by me
under the 1994 Performance-Based Stock Option Plan of Staff Builders, Inc. (the
"Company") to purchase shares of the Class A Common Stock, par value $.01 per
share, of the Company at an option price of $____________ per share.

         Enclosed is a check, payable to the order of the Company, in the amount
of $_____________ .

         A completed Exercise of Stock Option Payment Remittance Form is
attached.

         Please issue __________ certificate(s) for __________ shares each and,
if applicable, a separate certificate for the remaining ____________ shares in
my name as shown below.


                      ------------------------------------
                                      Name

                      ------------------------------------
                              Taxpayer I.D. Number
                     (i.e. Social Security/Insurance Number)

                      ------------------------------------
                                Number and Street

                      ------------------------------------
                      City          State         Zip Code


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Please forward the certificate(s) to me at the following address:


                      ------------------------------------
                                Number and Street

                      ------------------------------------
                      City           State        Zip Code

         This election incorporates, and is subject to, all terms and conditions
of the Plan and my Stock Option Agreement with the Company.

         I am acquiring the foregoing shares for investment purposes only, and
not with a view to their sale or distribution.


Dated:
      --------------------


                                            ------------------------------------
                                            Signature


                                            ------------------------------------
                                            Print Name


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                                                                    SCHEDULE B-1



                              STAFF BUILDERS, INC.

                                      1994
                       PERFORMANCE-BASED STOCK OPTION PLAN

                Exercise of Stock Option Payment Remittance Form



         In fulfillment of the accompanying Notice of Election to Exercise,
which advises you of my intention to exercise options to purchase _____ shares
of Staff Builders, Inc. Class A Common Stock at an option price of $___ per
share, for a total purchase price of $____ , I enclose in full payment of the
purchase price a check in the amount of $___ made payable to Staff Builders,
Inc.




Dated:
      --------------------


                                            ------------------------------------
                                            Signature


                                            ------------------------------------
                                            Type Name