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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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Form 10-K



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(Mark One)


|  |  |                                                                                     
|- |  | ------------------------------------------------------------------------------------
|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2002
OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from   to

Commission file number 001-13956

PERSONNEL GROUP OF AMERICA, INC.

(Exact name of Registrant as specified in its charter)


|                                                               |  |                                                          |  |                                        
|-------------------------------------------------------------- |  | -------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 7363                                                     |  | 56-1930691                             
|(State or other jurisdiction of
incorporation or organization) |  | (Primary Standard
Industrial
Classification Code
number) |  | (I.R.S. employer
identification
number)

Five LakePointe Plaza
2709 Water Ridge Parkway, 2nd Floor
Charlotte, North Carolina 28217
(Address, including zip code, of
Registrants principal executive offices)



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(704) 442-5100




(Registrants telephone number, including area code)


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

Common Stock, $.01 par value




(Title of Class)




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

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o No
x

The aggregate market value of voting stock held by non-affiliates of the
registrant as of June 28, 2002, computed by reference to the closing sale price
on such date, was $23,654,002. (For purposes of calculating this amount only,
all directors and executive officers are treated as affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.) As of March 31, 2003, 26,881,212 shares of the
registrants Common Stock, $.01 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrants Annual Report to Stockholders for the
fiscal year ended December 29, 2002 (the Annual Report) furnished to the
Commission pursuant to Rule 14a-3(b) are incorporated herein by reference into
Parts II and IV hereof.



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PART I.




Item 1. Business

Personnel Group of America, Inc. (the Company), is a leading provider of
information technology and commercial staffing services to businesses,
professional and government organizations. The Company is organized into two
divisions, the Information Technology Services Division (IT Services) and the
Commercial Staffing Services Division (Commercial Staffing), and operates in
strategic markets throughout the United States. Certain financial information
is reported by segment in Note 17, Segment Information, to the Consolidated
Financial Statements included in Part II, Item 8 of this report. The Companys
services include information technology consulting, temporary staffing,
placement of full time employees, on-site management of temporary employees and
training and testing of temporary and permanent workers. The Company also
provides technology tools for human capital management that enable its
customers to automate portions or all of their hiring processes. At February
28, 2003, the Company operated through a network of 118 offices located in
major metropolitan areas throughout the United States.

IT Services offers information technology professionals on a temporary
basis and consulting services in a range of computer-related disciplines.
Commercial Staffing offers a wide variety of temporary office, clerical,
finance and accounting services. Commercial Staffing also provides light
technical and light industrial services to its customers, but these services
typically account for less than 25% of the divisions total revenues. Each
division also offers permanent placement services in a range of specialties.
For the year ended December 29, 2002, IT Services and Commercial Staffing
represented approximately 53% and 47%, respectively, of the Companys total
revenues.

The Company completed the rebranding of its operations in 2002, and
renamed its IT operations Venturi Technology Partners and its Commercial
Staffing operations Venturi Staffing Partners and, for commercial operations
that have a specialty in permanent placement services, Venturi Career
Partners. The Companys shareholders approved a corporate name change to
Venturi Partners, Inc. at the 2002 Annual Meeting of Shareholders, and the
Company currently expects to complete that process later this spring. The
Company endeavors to protect its intellectual property rights and has obtained
registrations in the United States of certain of the trademarks, trade names
and service marks that appear in this report.

The Company completed a
comprehensive financial restructuring in April 2003 in which it
amended and restated its revolving credit facility, issued shares of Common
Stock and Series B Preferred Stock in exchange for approximately
$109.7 million
of its outstanding 5.75% Convertible Subordinated Notes due 2004
(the 5.75% Notes). As a result of the financial
restructuring, the Company used substantially all of its cash on hand
(after payment of transaction expenses) to repay approximately
$38.0 million of its outstanding credit facility and eliminated
an additional $120.0 million of its outstanding indebtedness. See Note 1,
Subsequent Event  Comprehensive Financial Restructuring, to the Consolidated
Financial Statements included in Part II, Item 8 of this report.

Information Technology Services Division

IT Services provides information technology professionals on a temporary
basis and consulting services through 28 offices in 20 states at February 28,
2003. IT Services had approximately 1,860 consultants on assignment at
February 28, 2003, of which approximately 590 (or 32%) were salaried employees.
Of the balance (68% of the total), approximately 735 consultants were hourly
employees and 535 consultants were independent contractors.

2



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Service Offerings

IT Services provides skilled personnel, such as web developers and
consultants, project managers, programmers, systems designers, software
engineers, LAN administrators, systems integrators, helpdesk staff and other
technology specialists, to a wide variety of clients, typically on an as-needed
time and materials basis. A number of IT Services offices have developed
technology specialties, and have entered into alliances with packaged software
and systems vendors and other technology partners to provide services necessary
to install, integrate and maintain their partners technologies. Many IT
Services offices also provide software engineering, web design, applications
development and strategic consulting services.

IT Services staffing services include providing individuals or teams of
computer professionals to corporations and other organizations that need
assistance with project management, analysis, systems design, programming,
maintenance, testing and special technologies for short-term and long-term
information technology projects. The divisions service offerings encompass a
wide variety of tasks, ranging from management of all aspects of a project or
the implementation of turnkey systems to the fulfillment of temporary staffing
needs for technology projects.

Selected offices in IT Services also provide complementary or stand-alone
consulting services in the information technology area, typically on a time and
materials basis. For example, certain offices work with clients interested in
alternatives to outsourcing their internal information technology organization,
as well as implementing complex systems integration solutions, and offer a
range of consulting services in areas such as systems development and
client/server networks that span mainframe, mid-range and desktop systems.
These services are provided at the clients site or at off-site development
centers. The Company intends to continue expanding the consulting services
component of the IT Services service offerings as part of its strategy to offer
a full range of IT services to its clients.

Technology Tools and Automated Hiring Systems

To complement its core staffing and consulting services offerings, the
Company also offers its customers a variety of technology tools and automated
hiring systems designed to streamline and automate portions or all of their
human capital management processes. These tools and systems include vendor
management systems, a career enhancement website and internet job board,
website development and hosting services and web based employment channels.

Sales and Marketing

IT Services has developed a sales and marketing strategy that focuses on
both national and local accounts, and is implemented in a decentralized manner
through its various branch locations. At the national level, IT Services has
focused on the attainment of preferred vendor status at large customers to
provide leverage across the practice. These accounts are typically targeted by
a local IT Services office with a presence in a specific market, and then are
sold on the basis of the strength of IT Services geographic presence in
multiple markets. IT Services also is supported by centralized proposal
generating and vendor management systems sales departments, which assist in the
development of responses to large account RFPs and support the divisions
efforts to broaden its preferred vendor relationships.

Local accounts are targeted and sold by account managers at the branch
office level, permitting IT Services to capitalize on the established local
expertise and relationships of its branch office employees. These accounts are
solicited through personal sales presentations, telephone marketing, direct
mail solicitation, referrals and advertising in a variety of local and national
media. Advertisements appear in the Yellow Pages, newspapers and trade
publications. Local employees are encouraged to be active in civic
organizations and industry trade groups to facilitate the development of new
customer relationships.

3



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The information technology services business is affected by the timing of
holidays and seasonal vacation patterns, generally resulting in lower IT
revenues and lower operating margins in the fourth quarter of each year.

Commercial Staffing Services Division

At February 28, 2003, Commercial Staffing operated through 90 offices in
14 states and the District of Columbia. Commercial Staffing provides temporary
personnel who perform general office and administrative services, word
processing and desktop publishing, office automation, records management,
production/assembly/distribution, telemarketing, finance, accounting and other
staffing services. Certain of Commercial Staffings offices also provide
full-time placement and payrolling services. Payrolling services entail
employment by Commercial Staffing of individuals recruited by a customer on a
fee basis.

Operations

Commercial Staffing markets its staffing services to local and regional
clients through its network of offices across the United States.

Commercial Staffing strives to satisfy the needs of its customers by
providing customized services, such as on-site workforce management and
full-time placement services. The flexibility of Commercial Staffings
decentralized operations allows it to tailor its service offerings, reporting
and pricing to meet local client requirements. For example, certain clients
are provided with customized billings, utilization reports and safety awareness
and training programs.

To meet the growing demand in the
staffing services business for vendor-on-premise (VOP) capability, Commercial Staffing offers SourcePLUS, its customized
on-site temporary personnel management system. SourcePLUS places an
experienced staffing service manager at the client facility to provide complete
staffing support that is customized to meet client-specific needs. This
program facilitates client use of temporary personnel and allows the client to
outsource a portion of its personnel responsibility to Commercial Staffings
on-site representative, who gathers and records requests for temporary jobs
from client department heads and then fulfills client requirements. These
Commercial Staffing representatives can also access Commercial Staffings
systems through on-site personal computers.

Commercial Staffings full-time placement services provide traditional
staff selection and recruiting services to its clients. In addition to
recruiting employees through referrals, Commercial Staffing places
advertisements in local newspapers to recruit employees for specific positions
at client companies. Commercial Staffing utilizes its expertise and selection
methods to evaluate the applicants credentials. If the applicant receives and
accepts a full-time position at the client, Commercial Staffing charges the
employer a one-time fee, generally based on the annual salary of the employee.

To maintain a consistent quality standard for all its temporary employees,
Commercial Staffing uses a comprehensive automated system to screen and
evaluate potential temporary personnel, make proper assignments and review a
temporary employees performance. Commercial Staffing uses the QuestPLUS
System to integrate the results of this skills testing with personal attributes
and work history and automatically matches available candidates with customer
requirements. Commercial Staffing also provides uniform training to all of its
employees in sales, customer service and leadership skills.

Sales and Marketing

Commercial Staffing has implemented a standardized Business Development
Process to target potential customers with temporary staffing needs and to
maintain and expand existing customer relationships. The marketing efforts of
Commercial Staffing are decentralized and capitalize on the divisions
long-standing customer relationships and the lengthy market tenure of the
divisions offices, which have been in their existing geographic markets for
more than 25 years on average. Commercial Staffing obtains new clients
primarily through personal

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sales presentations and referrals from other clients
and supports its sales efforts with telemarketing, direct mail solicitation and
advertising in a variety of local and national media, including the Yellow
Pages, newspapers,
magazines and trade publications. Commercial Staffing also is supported by
centralized proposal generation and large account sales departments, which
assist in the development of responses to large account RFPs and otherwise
support the divisions efforts to broaden its large account base.

Commercial Staffing devotes the majority of its selling efforts to the
local and regional operations of a wide variety of businesses (including a
number of Fortune 500 companies) and to other potential customers that it has
identified as consistent users of temporary staffing services. Local and
regional accounts are characterized by shorter sales cycles and higher gross
margins. Commercial Staffing generally does not seek low margin national
account agreements, but does provide services to a wide variety of customers
with national and international businesses. Bids for large user accounts and
the provision of services to clients with multiple location requirements are
coordinated at the Companys headquarters.

The commercial staffing business is subject to the seasonal impact of
summer and holiday employment trends. Typically, the second half of each
calendar year is more heavily affected, as companies tend to increase their use
of temporary personnel during this period. While the commercial staffing
industry is cyclical, the Company believes that the broad geographic coverage
of its operations and the diversity of the services it provides (including its
emphasis on high-end white collar clerical workers) may partially mitigate the
adverse effects of economic cycles in a single industry or geographic region.

Recruiting and Retention of Temporary Employees

The Company recruits its Commercial Staffing temporary associates and IT
Services consultants through a decentralized recruiting program that primarily
utilizes the internet and local and national advertisements. In addition, the
Company has succeeded in recruiting qualified employees through referrals from
its existing labor force. To encourage further referrals, the IT Services and
Commercial Staffing operations pay referral fees to employees responsible for
attracting new recruits. The Company interviews, tests, checks references and
evaluates the skills of applicants for temporary employment, utilizing systems
and procedures developed and enhanced over the years. Commercial Staffing
employs temporary associates on an as needed basis dependent upon client
demand. These temporary associates are paid only for time they actually work.

In an effort to attract a broad spectrum of qualified employees, the
Company offers a wide variety of employment options and training programs. In
addition, IT Services operates a number of formal and informal training
programs to provide its consultants with access to and training in new software
applications and a diverse mix of mainframe, client/server and other computer
technologies. The Company believes that these training initiatives have
improved consultant recruitment and retention, increased the technical skills
of IT Services personnel and resulted in better service for IT Services
clients.

The Company provides competitive compensation packages and comprehensive
benefits for its Commercial Staffing temporary associates and IT Services
consultants. Most of the temporary associates and IT Services consultants are
also eligible for one of the Companys 401(k) plans.

Organizational Structure

The Company operates through a network of decentralized offices, none of
which are franchised or licensed. Each office reports to a manager who is
responsible for day-to-day operations and the profitability of the office.
Depending on, among other things, the number of offices in a region, branch
managers may report to operating company presidents, regional managers,
division vice presidents or division presidents. Branch and regional managers
are given a high level of autonomy in making decisions about the operations in
their principal region. The compensation of branch and regional managers
includes bonuses primarily based on the growth and profitability of their
operations and is designed to motivate them to maximize revenue and profit
growth each year.

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Systems

Commercial Staffing uses a number of automated systems to measure the
skills of the temporary employee candidates that make themselves available and
to match skills with client requests. The ProficiencyPLUS program is designed
to test specific computer-related skills by allowing the candidate to operate
in the actual software
program environment. The QuestPLUS system integrates the results of the
Companys skills testing with personal attributes and work history and
automatically matches available candidates with customer requirements. This
system also allows the Company to track the performance of its temporary
employees and provide quality reports to customers that document the level of
the Companys performance.

The
Company utilizes separate paybill systems for IT Services and Commercial Staffing. The
paybill processing systems provide payroll processing and customer invoicing.
The Company has also installed common financial and human resources systems in
all of its offices.

Competition

Despite significant consolidation within the United States staffing
services market, the market remains highly competitive and highly fragmented
and has limited barriers to entry. A number of publicly owned companies
specializing in professional staffing services in the United States have
greater marketing, financial and other resources than the Company.

In the temporary staffing industry, competition generally is limited to
firms with offices located within a customers particular local market. In
most major markets, commercial staffing competitors generally include many of
the publicly traded companies and, in addition, numerous regional and local
full-service and specialized temporary service agencies, some of which may
operate only in a single market. Competitors for information technology
services include local IT staffing and consulting firms, large, multi-service
staffing and consulting firms and the consulting affiliates of large accounting
firms.

Since many clients contract for their staffing services locally,
competition varies from market to market. In most areas, no single company has
a dominant share of the market. Many client companies use more than one
staffing services company, and it is common for large clients to use several
staffing services companies at the same time. However, in recent years there
has been a significant increase in the number of large customers consolidating
their temporary staffing purchases with a single supplier or vendor manager, or
with a smaller number of preferred vendors. The trend to consolidate temporary
staffing purchases has in some cases made it more difficult for the Company to
gain business from potential customers who have already contracted to fill
their staffing needs with competitors of the Company. In other cases, the
Company has been able to increase the volume of business with certain customers
who choose to purchase staffing services primarily from the Company.

The competitive factors in obtaining and retaining clients include an
understanding of clients specific job requirements, the ability to provide
appropriately skilled temporary personnel at the local level in a timely
manner, the monitoring of job performance quality and the price of services.
The primary competitive factors in obtaining qualified candidates for temporary
employment assignments are wages, responsiveness to work schedules and the
number of hours of work available. Management believes that it is highly
competitive in these areas due to its focus on local markets and the autonomy
given to its local management.

Regulation

Temporary employment service firms are generally subject to one or more of
the following types of government regulation: (i) regulation of the
employer/employee relationship between a firm and its temporary employees; (ii)
registration, licensing, record keeping and reporting requirements; and (iii)
substantive limitations on its operations. Staffing services firms are the
legal employers of their temporary workers (other than independent contractors)
and are governed by laws regulating the employer/employee relationship, such
as tax withholding or reporting, social security or retirement,
anti-discrimination and workers compensation.

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Trademarks

The Company maintains a number of trademarks, tradenames, service marks
and other intellectual property rights, and licenses certain other proprietary
rights in connection with its businesses. The Company is not currently aware
of any infringing uses or other conditions that would materially and adversely
affect its use of its proprietary rights.

Employees

At February 28, 2003, the Company had approximately 1,025 permanent
administrative employees. Additionally, approximately 1,325 of the information
technology consultants in IT Services were full-time salaried or hourly
employees. None of the Companys employees are covered by collective
bargaining agreements. The Company believes that its relationships with its
employees are good.

Risk Factors and Forward Looking Information

The Companys financial performance is subject to a number of risks and
uncertainties. Additionally, certain statements contained in or incorporated
into this report are forward-looking statements regarding events and
financial trends that may affect the Companys future operating results or
financial position. These statements may be identified by words such as
estimate, forecast, plan, intend, believe, should, expect,
anticipate, or variations or negatives thereof, or by similar or comparable
words or phrases. Forward-looking statements are also subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in such statements.

These risks and uncertainties include, but are not limited to, the following:



| |  |  | changes in levels of unemployment and other economic conditions in
the United States, or in particular regions or industries;                                                                                                                             
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | continuing weakness or further reductions in corporate information
technology spending levels;                                                                                                                                                            
|
| |  |  | the ability of the Company to maintain existing client
relationships and attract new clients in the context of changing
economic or competitive conditions;                                                                                               
|
| |  |  | the impact of competitive pressures, including any change in the
demand for the Companys services, or the Companys ability to maintain
or improve its operating margins;                                                                                
|
| |  |  | an Internal Revenue Service audit of the Companys income tax
returns and the risk that assessments for additional taxes, penalties and interest could
be levied against the Company;                                                                     
|
| |  |  | the entry of new competitors into the marketplace or expansion by
existing competitors;                                                                                                                                                                   
|
| |  |  | the Companys success in attracting, training and retaining
qualified management personnel and other staff employees;                                                                                                                                     
|
| |  |  | reductions in the supply of qualified candidates for temporary
employment or the Companys ability to attract qualified candidates;                                                                                                                       
|
| |  |  | the possibility of the Company incurring liability for the
activities of its temporary employees or for events impacting its
temporary employees on clients premises;                                                                                    
|
| |  |  | the risk in an uncertain economic environment of increased
incidences of employment disputes, employment litigation and workers
compensation claims;                                                                                                     
|
| |  |  | the risk that further cost cutting or restructuring activities
undertaken by the Company could cause an adverse impact on certain of
the Companys operations;                                                                                            
|
| |  |  | economic declines that affect the Companys liquidity or ability to
comply with its loan covenants;                                                                                                                                                       
|
| |  |  | the risks of defaults under the Companys credit agreements or the
demand by any holder of the Companys remaining outstanding 5.75% Notes
for repayment following the occurrence of a repurchase event under the
indenture applicable to the 5.75% Notes;
|
| |  |  | adverse changes in credit and capital markets conditions that may
affect the Companys ability to obtain financing or refinancing on
favorable terms;                                                                                                     
|

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| |  |  | adverse changes to managements periodic estimates of future cash
flows that may affect managements assessment of its ability to fully
recover its goodwill;                       
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | whether governments will impose additional regulations or licensing
requirements on staffing services businesses in particular or on
employer/employee relationships in general; and
|
| |  |  | other matters discussed in this
report and the Companys other SEC
filings.                                                                                                         

Because long-term contracts are not a significant part of the Companys
business, future results cannot be reliably predicted by considering past
trends or extrapolating past results. The Company undertakes no
obligation to update information contained in this report.

Item 2. Properties

Generally, the Companys offices are leased under leases of relatively
moderate duration (typically three to five years, with options to extend)
containing customary terms and conditions. IT Services and Commercial Staffing
offices are typically in office or industrial buildings, and occasionally in
retail buildings, and the Companys headquarters facilities and regional
offices are in similar facilities.

Item 3. Legal Proceedings

From time to time the Company is involved in certain disputes and
litigation relating to claims arising out of its operations in the ordinary
course of business. Further, the Company periodically is subject to government
audits and inspections. In the opinion of the Companys management, matters
presently pending will not, individually or in the aggregate, have a material
adverse effect on the Companys results of operations or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

PART II.

Item 5. Market for Registrants Common Equity and Related Shareholder Matters

The Companys Common Stock has traded since November 2002 on the Over the
Counter Bulletin Board (the OTC Bulletin Board) following notification by the
New York Stock Exchange (the NYSE) of its intent to seek the removal of the
Common Stock from the NYSE list. Following an unsuccessful appeal of the
NYSEs decision pursuant to NYSE rules, the NYSE delisted the Common Stock in February 2003. The restructuring agreement for the Companys recently
completed financial restructuring contemplates that the Company will use its
best efforts to procure a new stock exchange listing for the shares of Common
Stock issued in the restructuring (or to be issued upon the conversion of the
Series B Preferred Stock issued in the restructuring), but in the meantime the
Company expects that the Common Stock will continue to trade on the OTC
Bulletin Board.

As of February 28, 2003, there were approximately 5,044 shareholders based
on the number of holders of record and an estimate of the number of individual
participants represented by securities position listings.

The Companys policy has been to retain earnings for use in its business
and, accordingly, it has not historically paid cash dividends on the Common
Stock. In addition, the Companys revolving credit facility currently
prohibits the payment of dividends. In the future, the Companys Board of
Directors will determine whether to pay cash dividends based on conditions then
existing, including the Companys earnings, financial condition, capital
requirements, financing arrangements, the terms of the Companys credit
agreements and any other factors deemed relevant by the Board of Directors.

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The following table sets forth the high, low and closing sales prices for
the Common Stock as reported on the New York Stock Exchange for each quarter
during the fiscal year ended December 30, 2001, as well as for each quarter
during the fiscal year ended December 29, 2002, through November 20, 2002. It
also sets forth the range of high and low bids for the Common Stock from
November 21, 2002 through the end of fiscal 2002 as reported by the OTC
Bulletin Board:

|                                             |  |      |      |     |  |       |      |  |  |   |      | 
|-------------------------------------------- |  | ---- | ---- | --- |  | ----- | ---- |  |  | - | ---- | 
|                                             |  | High |      | Low |  | Close
|                                             |  |      |      |     |  |      
|2002                                         |  |      |      |     |  |       |      |  |  |   |      | 
|First Quarter                                |  | $    | 1.50 |     |  | $     | 0.81 |  |  | $ | 1.35 | 
|Second Quarter                               |  |      | 1.64 |     |  |       | 0.80 |  |  |   | 0.90 | 
|Third Quarter                                |  |      | 1.00 |     |  |       | 0.24 |  |  |   | 0.35 | 
|Fourth Quarter (through November 20, 2002)   |  |      | 0.37 |     |  |       | 0.12 |  |  |   | 0.14 | 
|Fourth Quarter (beginning November 21,
2002) |  |      | 0.18 |     |  |       | 0.06 |  |  |   | 0.14 | 
|2001                                         |  |      |      |     |  |       |      |  |  |   |      | 
|First Quarter                                |  | $    | 3.25 |     |  | $     | 1.20 |  |  | $ | 1.20 | 
|Second Quarter                               |  |      | 2.07 |     |  |       | 1.09 |  |  |   | 1.38 | 
|Third Quarter                                |  |      | 1.48 |     |  |       | 0.77 |  |  |   | 0.85 | 
|Fourth Quarter                               |  |      | 1.11 |     |  |       | 0.40 |  |  |   | 0.88 | 

The last reported bid price on March 31, 2003 was $0.17.

Item 6. Selected Financial Data.

The information required by this Item is included in the Companys Annual
Report under the caption Selected Financial Data, which information is set
forth in Exhibit 13.1 to this Form 10-K and is hereby incorporated herein by
reference.

Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations.

The information required by this Item is included in the Companys Annual
Report under the caption Managements Discussion and Analysis of Financial
Condition and Results of Operations, which information is set forth in Exhibit
13.1 to this Form 10-K and is hereby incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The information required by this Item is included in the Companys Annual
Report under the caption Managements Discussion and Analysis of Financial
Condition and Results of Operations, Market Risk Disclosures, which
information is set forth in Exhibit 13.1 to this Form 10-K and is hereby
incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

The information required by this Item is included in the Companys Annual
Report under the captions Report of Independent Accountants, Consolidated
Balance Sheets, Consolidated Statements of Operations, Consolidated
Statements of Shareholders Equity (Deficit), Consolidated Statements of Cash Flows
and Notes to

9



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Consolidated Financial Statements, which information is set
forth in Exhibit 13.1 to this Form 10-K and is hereby incorporated herein by
reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

The Company has no disagreements on accounting or financial disclosure
matters with its independent public accountants to report under this Item 9.

PART III.

Item 10. Directors and Executive Officers of the Registrant.

Information About Directors and Executive Officers

The following table sets forth information about our executive officers
and directors as of the date of this report:

|                                  |  |     |    |          |  |                                                     
|--------------------------------- |  | --- | -- | -------- |  | ----------------------------------------------------
|Name                              |  | Age |    | Position
|                                  |  |     |    |         
|Larry L. Enterline                |  |     | 50 |          |  | Chief Executive Officer and Director                
|James C. Hunt                     |  |     | 46 |          |  | President and Chief Financial Officer               
|Michael H. Barker                 |  |     | 48 |          |  | President  Division Operations                     
|Ken R. Bramlett, Jr.              |  |     | 43 |          |  | Senior Vice President, General Counsel and Secretary
|Thomas E. Stafford                |  |     | 58 |          |  | Vice President of Human Resources                   
|James V. Napier (1)(3)(5)         |  |     | 66 |          |  | Director                                            
|Christopher Pechock (1)(2)(3)(4)  |  |     | 38 |          |  | Director                                            
|Elias J. Sabo (1)(2)(3)(4)        |  |     | 32 |          |  | Director                                            
|Janice L. Scites (3)              |  |     | 52 |          |  | Director                                            
|William J. Simione, Jr. (2)(3)(5) |  |     | 61 |          |  | Director                                            
|Victor E. Mandel(4)               |  |     | 38 |          |  | Director                                            



---

|(1) |  | Member of the Compensation Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Member of the Governance Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                      
|   
|(3) |  | Member of the Audit Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                           
|   
|(4) |  | Messrs. Pechock, Sabo and Mandel were appointed to the Board in April
2003 to fill vacancies created following the completion of the Companys
financial restructuring. The Company is considering the Committee
memberships of each of its Board members and may change the composition of
certain or all of its Board Committees following a transitional period.
|   
|(5) |  | Messrs. Napier and Simione are currently serving as Class II directors
and have advised the Company that they do not intend to stand for
reelection to the Board at the Companys upcoming 2003 Annual Meeting of
Shareholders.                                                                                                                                    

Larry L. Enterline:Mr. Enterline has served as our Chief Executive
Officer and as a director since December 2000. From 1984 to 1989, Mr.
Enterline served as Vice President of Marketing and Sales with Bailey Controls.
From 1989 to 1999, Mr. Enterline served in various management roles with
Scientific-Atlanta, Inc., most recently as a Senior Vice President in charge of
its worldwide sales and service organization. Mr. Enterline holds a bachelors
degree in electrical engineering and a Masters degree in business
administration.

James C. Hunt:Mr. Hunt has served as our President and Chief Financial
Officer since January 2001. Prior to that time, Mr. Hunt served as our
President from October 1999 to January 2001, Chief Financial Officer and
Treasurer from March 1997 until October 1999 and Senior Vice President from
January 1997 until March 1997. Mr. Hunt served as a director from January 1997
to April 2003. Prior to joining us in
January 1997, Mr. Hunt spent 18 years with Arthur Andersen LLP, a worldwide
accounting and consulting firm, the last six years as a partner.

10



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##### 



Michael H. Barker:Mr. Barker has served as President of Division
Operations since January 2003. From January 2001 through January 2003, Mr.
Barker served as President of our IT Services Division. Prior to that time,
Mr. Barker served as President of Division Operations from October 1999 to
January 2001 and as President of the Commercial Staffing division from January
1998 until October 1999. Prior to joining us, from 1995 to 1997 Mr. Barker
served as the Chief Operations Officer for the Computer Group Division of IKON
Technology Services, a diversified technology company.

Ken R. Bramlett, Jr.:Mr. Bramlett has served as our Senior Vice
President, General Counsel and Secretary since January 2001. Prior to that
time, Mr. Bramlett served as our Chief Financial Officer and Treasurer from
October 1999 to January 2001 and as our Senior Vice President, General Counsel
and Secretary from October 1996 until October 1999. Mr. Bramlett also served
as a director from August 1997 to January 2001. Prior to joining us in October
1996, Mr. Bramlett spent 12 years with Robinson, Bradshaw & Hinson, P.A., a
Charlotte, North Carolina law firm, the last six years as a partner. Mr.
Bramlett serves on the board of directors of World Acceptance Corporation, a
small loan consumer finance company headquartered in Greenville, South
Carolina.

Thomas E. Stafford:Mr. Stafford has served as our Vice President of
Human Resources since January 2000. Prior to that time, Mr. Stafford served as
the Director of Human Resources for the Film and Fiber Division of
Hoechst Celanese Corporation from 1992 to April 1998 and as Director of
Benefits from April 1998 to April 1999.

James V. Napier:Mr. Napier has served as a director since September
1995. From November 1992 to November 2000, Mr. Napier served as the Chairman
of Scientific-Atlanta, Inc., a telecommunications company. In addition to
serving on our board of directors and on Scientific-Atlantas Board, Mr.
Napier serves on the boards of directors of Engelhard Corporation, Vulcan
Materials Company, McKesson Corporation, Intelligent Systems Corporation and
WABTEC Corp.

Christopher Pechock: From 1998 to 2003, Mr. Pechock has served as a
partner at MatlinPatterson Global Opportunities Partners, an asset management
firm specializing in corporate restructurings, and its predecessor. From 1996
to 1998, Mr. Pechock was employed by Turnberry Capital Management, a capital
management firm. Mr. Pechock has a Masters degree in business administration
from Columbia Business School. Mr. Pechock also serves on the board of
directors of Huntsman Holdings, Inc. and several private companies.

Elias J.Sabo:From 1998 to 2003, Mr. Sabo has served as a founding
partner at The Compass Group International LLC. Prior to joining Compass, Mr.
Sabo worked in the acquisition department for Colony Capital, a Los
Angeles-based real estate private equity firm, from 1992 to 1996 and as a
healthcare investment banker for CIBC World Markets (formerly Oppenheimer &
Co.) from 1996 to 1998. Mr. Sabo also serves on the boards of directors of
several private companies.

Janice L. Scites:Ms. Scites has served as a director since August 1999.
Since 2000, Ms. Scites has served as President of Scites Associates, Inc., an
information technology and management consulting firm. From 1995 to 2000, Ms.
Scites served in various management roles with AT&T, initially as Vice
President in its Business Customer Care and Value-Added Services organizations
and most recently as Vice President in the Internet Implementation Strategy
Group. Prior to joining AT&T, Ms. Scites spent 13 years with Phoenix Mutual
Life Insurance Company and five years with Connecticut Mutual Life Insurance
Company. Ms. Scites also serves on the board of directors of Central Vermont
Public Service Corporation, a Vermont-based electric utility.

William J. Simione, Jr.:Mr. Simione has served as a director since
September 1995. From January 1996 to October 2001, Mr. Simione served as
President of Simione Consulting, LLC, a subsidiary of CareCentric, Inc.
(formerly Simione Central Holdings, Inc.). Since October 2001, Mr. Simione has
served as managing principal of Simione Consulting, LLC, which provides
consulting services and information systems to the home healthcare industry.
Mr. Simione also serves on the board of directors of CareCentric, Inc. He is a
member of the Prospective Payment Task Force, a Regulatory Affairs Subcommittee
for the National Association for Home Care, and is one of the Subcommittees
National Reimbursement Consultants.

11



---



##### 



Victor E. Mandel:Since 2001, Mr. Mandel has served as founder and
Managing Member of Criterion Capital Management, an investment company. From
May 1999 to November 2000, Mr. Mandel was Executive Vice PresidentFinance and
Development of Snyder Communications, Inc., with operating responsibility for
its publicly-traded division Circle.com. From June 1991 to May 1999, Mr.
Mandel was a Vice President in the Investment Research department at Goldman
Sachs & Co. covering emerging growth companies.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of our equity securities. Executive officers, directors and greater
than 10% stockholders are required by Commission regulations to furnish us with
copies of all Section 16(a) forms they file. To our knowledge, based solely on
a review of the copies of such reports furnished to us during and for the
fiscal year ended December 29, 2002, our executive officers and directors and
any greater than 10% beneficial owners complied with all applicable Section
16(a) filing requirements.

Item 11. Executive Compensation.

The following table sets forth compensation information for fiscal years
2002, 2001 and 2000 for those persons who were, except as otherwise noted, our
Chief Executive Officer and our four other most highly paid
executive officers as of December 29, 2002:

|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  |              |         |  |   |        |         |    
|----------------------------- | ------------------------------------------ |  | ---- | ---- |  | ------ | ------------------- | ------- | ------------ | ------------ | ---------- | ------------- | ---------- | ------------ | - | - |  |  | ------------ | ------- |  | - | ------ | ------- | ---
|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  | Long Term    |         |  |   |       
|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  | Compensation |         |  |   |       
|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  | Awards       |         |  |   |       
|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  |              |         |  |   |       
|                              |                                            |  |      |      |  |        | Annual Compensation |         |              |              |            |               | Securities |              |   |   | 
|                              |                                            |  |      |      |  |        |                     |         | Other Annual |              | Underlying |               | All Other 
|Name and Principal Position   |                                            |  |      |      |  | Salary |                     | Bonus   |              | Compensation |            | Options(#)(1) |            | Compensation
|                              |                                            |  |      |      |  |        |                     |         |              |              |            |               |            |             
|Larry L. Enterline (2)        |                                            |  | 2002 |      |  | $      | 409,476             |         |              | $            |           | (3)           |            | $            |  |   |  |  |             |         |  | $ |       |        
|                              | Chief Executive Officer                    |  |      | 2001 |  |        |                     | 414,666 |              |              |            |              | (3)        |              |   |  |  |  |              |        |  |   |        | 4,404   | (4)
|                              |                                            |  |      | 2000 |  |        |                     | 5,000   |              |              |            |              |            |              |   |  |  |  |              | 700,000 |  |   |        |        |    
|James C. Hunt                 |                                            |  | 2002 |      |  | $      | 307,445             |         |              | $            | 147,000    |               |            | $            |  |   |  |  |             |         |  | $ | 50,000 | (5)    
|                              | President and Chief Financial Officer      |  |      | 2001 |  |        |                     | 307,965 |              |              |            | 200,000       |            |              |   |  |  |  |              | 50,000  |  |   |        | 131,216 | (6)
|                              |                                            |  | 2000 |      |  |        | 308,100             |         |              |              |           |               |            |              |  |   |  |  | 40,000       |         |  |   | 50,000 | (7)    
|Michael H. Barker             |                                            |  | 2002 |      |  | $      | 246,741             |         |              | $            | 84,000     |               |            | $            |  |   |  |  |             |         |  | $ | 2,750  | (5)    
|                              | President
 Division Operations            |  |      | 2001 |  |        |                     | 247,379 |              |              |            | 108,000       |            |              |   |  |  |  |              | 40,000  |  |   |        | 67,759  | (6)
|                              |                                            |  |      | 2000 |  |        |                     | 247,870 |              |              |            |              |            |              |   |  |  |  |              | 40,000  |  |   |        | 16,236  | (7)
|Ken R. Bramlett, Jr.          |                                            |  | 2002 |      |  | $      | 247,175             |         |              | $            | 84,000     |               |            | $            |  |   |  |  |             |         |  | $ | 20,160 | (5)    
|                              | Senior Vice President, General Counsel and |  |      | 2001 |  |        |                     | 247,695 |              |              |            | 96,000        |            |              |   |  |  |  |              | 30,000  |  |   |        | 102,013 | (6)
|                              | Secretary                                  |  |      | 2000 |  |        |                     | 248,100 |              |              |            |              |            |              |   |  |  |  |              | 40,000  |  |   |        | 50,000  | (7)
|Thomas M. Wittenschlaeger (8) |                                            |  | 2002 |      |  | $      | 205,441             |         |              | $            | 70,000     |               |            | $            |  |   |  |  |             |         |  | $ | 16,215 | (5)    
|                              | Senior Vice President, Corporate           |  |      | 2001 |  |        |                     | 165,336 |              |              |            | 69,750        |            |              |   |  |  |  |              | 50,000  |  |   |        | 27,376  | (9)
|                              | Development and Chief Technology Officer   |  |      |      |  |        |                     |         |              |              |            |               |            |              |   |   |  |  |              |         |  |   |        |         |    



---

|(1) |  | Option grants for the named
officers in 2000 and 2001 generally vested 25%
on each of the first four anniversaries of the grant dates. In connection
with the Companys recently completed financial restructuring, each of the
named executives has irrevocably waived his right to exercise all of his
outstanding PGA stock options granted under the 1995 Stock Option
Plan, including these options, and has forfeited all of such options to
the Company.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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##### 



|(2) |  | Mr. Enterline was appointed as our Chief Executive Officer in December
2000.                                                                                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | At the request of the Compensation Committee, Mr. Enterline has deferred
the payment of his bonuses for 2001 and 2002. Mr. Enterlines bonus for
2001 was a guaranteed $400,000, and his bonus for 2002 was $280,000.                                                                                                                    
|   
|(4) |  | Represents relocation expense reimbursements paid to Mr. Enterline in
2001.                                                                                                                                                                                                                                                              
|   
|(5) |  | Represents 2002 allocations to our non-qualified profit-sharing plan for
Messrs. Hunt, Bramlett and Wittenschlaeger and a matching contribution to
our IT Services Division 401(k) plan for Mr. Barker.                                                                                                                                  
|   
|(6) |  | Represents 2001 allocations to our non-qualified profit-sharing plan for
Messrs. Hunt, Barker and Bramlett of $50,000, $17,964 and $19,903,
respectively, and $81,216, $49,795 and $82,110, respectively, paid to the
named officers in connection with the termination and amendment of then in
effect vacation and paid time off plans.
|   
|(7) |  | Represents 2000 allocations to our non-qualified profit-sharing plan for
the named officers.                                                                                                                                                                                                                                             
|   
|(8) |  | Mr. Wittenschlaeger served as our Senior Vice President, Corporate
Development and Chief Technical Officer from April 2001 until his
resignation in January 2003.                                                                                                                                                                        
|   
|(9) |  | Represents a 2001 allocation to our non-qualified profit-sharing plan for
Mr. Wittenschlaeger of $10,020 and $17,356 of relocation expense
reimbursements.                                                                                                                                                                               

The Company did not grant stock options to any of the named officers in
2002.

Option Year-End Value Table

The following table sets forth certain information concerning unexercised
options held as of the end of 2002. None of the named officers exercised any
options during 2002.

Fiscal Year-End Option Value

|                          |  |                                      |         |                                   |  |             |         |               |  |   |   |  |  |   |   | 
|------------------------- |  | ------------------------------------ | ------- | --------------------------------- |  | ----------- | ------- | ------------- |  | - | - |  |  | - | - | 
|                          |  | Number of Securities Underlying      |         | Value of Unexercised In-the-Money
|                          |  | Unexercised Options at FY-End (#)(1) |         | Options at FY-End ($)(2)         
|                          |  |                                      |         |                                  
|Name                      |  | Exercisable                          |         | Unexercisable                     |  | Exercisable |         | Unexercisable
|                          |  |                                      |         |                                   |  |             |         |              
|Larry L. Enterline        |  |                                      | 350,000 |                                   |  |             | 350,000 |               |  | $ | 0 |  |  | $ | 0 | 
|James C. Hunt             |  |                                      | 296,248 |                                   |  |             | 71,574  |               |  |   | 0 |  |  |   | 0 | 
|Ken R. Bramlett, Jr.      |  |                                      | 177,771 |                                   |  |             | 52,199  |               |  |   | 0 |  |  |   | 0 | 
|Michael H. Barker         |  |                                      | 103,471 |                                   |  |             | 54,375  |               |  |   | 0 |  |  |   | 0 | 
|Thomas M. Wittenschlaeger |  |                                      | 12,500  |                                   |  |             | 37,500  |               |  |   | 0 |  |  |   | 0 | 



---

|(1) |  | In connection with PGAs recently completed financial restructuring, each
of the named officers has irrevocably waived his rights to exercise all of
these options and forfeited them to the Company.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The fair market value of the common stock used for these computations was
$0.14, which was the last bid price for our Common Stock on the OTC
Bulletin Board on December 27, 2002.                   

Employment Agreements

The following six paragraphs describe the employment agreements with our
executive officers that were in effect until the completion of our financial
restructuring in April 2003, or in the case of Mr. Wittenschlaeger, until his
resignation as an executive officer in January 2003.

Larry L. Enterline was employed pursuant to a letter agreement dated
December 20, 2000. The letter agreement provided for (i) an annual base salary
of $400,000 (subject to annual adjustment as determined by the Compensation
Committee), and (ii) the right to earn bonuses under the Companys Management
Incentive Compensation Plan. The letter agreement also provided for a minimum
annual bonus for 2001 of $400,000, but the Compensation Committee notified Mr.
Enterline in December 2001 that it had elected to defer the payment

13



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##### 



of his 2001
bonus until January 2003. The letter agreement did not specify a term of
employment for Mr. Enterline. However, it did provide that if Mr. Enterlines
employment were terminated within the first two years by the Company other than
for cause or by Mr. Enterline following a change in control of the Company, the
Company would pay Mr. Enterline severance equal to 12 months salary and any
unpaid bonus to which he would otherwise have been entitled, and all unvested
options to purchase Common Stock then held by Mr. Enterline would become
immediately exercisable.

James C. Hunt was employed pursuant to the terms of an employment
agreement, dated as of January 2, 1997, that provided for his employment until
December 31, 2002, subject to automatic renewal for successive one-year periods
unless either the Company or Mr. Hunt gave notice of non-renewal six months
prior to expiration. Neither the Company nor Mr. Hunt gave notice of
non-renewal prior to June 30, 2002. The employment agreement provided for (i)
an annual base salary of $300,000 (subject to annual adjustment as determined
by the Compensation Committee) and (ii) the right to earn bonuses under the
Companys Management Incentive Compensation Plan.

Michael H. Barker was employed pursuant to the terms of an employment
agreement, dated as of January 19, 1998, that provided for his employment until
January 18, 2003, subject to automatic renewal for successive one-year periods
unless either the Company or Mr. Barker gave notice of non-renewal six months
prior to expiration. Neither the Company nor Mr. Barker gave notice of
non-renewal prior to July 18, 2002. The employment agreement provided for (i)
an annual base salary of $240,000 (subject to annual adjustment as determined
by the Compensation Committee) and (ii) the right to earn bonuses under the
Companys Management Incentive Compensation Plan.

Ken R. Bramlett, Jr. was employed pursuant to the terms of an employment
agreement, dated as of October 7, 1996, that provided for his employment until
September 30, 2002, subject to automatic renewal for successive one-year
periods unless either the Company or Mr. Bramlett gave notice of non-renewal
six months prior to expiration. Neither the Company nor Mr. Bramlett gave
notice of non-renewal prior to March 31, 2002. The employment agreement
provided for (i) an annual base salary of $240,000 (subject to annual
adjustment as determined by the
Compensation Committee) and (ii) the right to earn bonuses under the Companys
Management Incentive Compensation Plan.

Thomas M. Wittenschlaeger was employed pursuant to the terms of an
employment agreement, dated as of April 11, 2001, that provided for his
employment until April 11, 2003, subject to automatic renewal for successive
one-year periods unless either the Company or Mr. Wittenschlaeger gave notice of
non-renewal six months prior to expiration. The employment agreement currently
provides for (i) an annual base salary of $200,000 (subject to annual
adjustment as determined by our Compensation Committee) and (ii) the right to
earn bonuses under the Companys Management Incentive
Compensation Plan. In accordance with the terms of Mr.
Wittenschlaegers separation arrangement, the Company will pay
him severance equal to one years base salary.

Each of these employment agreements for Messrs. Hunt, Barker, Bramlett and
Wittenschlaeger also provided that if the employment agreement were terminated
by the Company other than for cause, or by the executive upon a change in terms
and conditions of employment or following a change in control of the Company,
the Company would pay the executive severance equal to 12 months salary (24
months salary, in the case of Mr. Hunt) and any unpaid bonus to which he would
otherwise have been entitled, and all unvested options to purchase Common Stock
then held by the executive would become immediately exercisable. Each
employment agreement also contained a provision prohibiting the executive from
competing with the Company or soliciting employees and customers of the Company
for a period of two years from the date his employment with the Company ceased.

Each of Messrs. Enterline, Hunt, Barker and Bramlett is now employed
pursuant to an employment agreement dated as of the closing date of our
financial restructuring. Each employment agreement provides for an annual base
salary (subject to annual adjustment as determined by our Compensation
Committee), the right to earn annual bonuses as described below and
in the event that
our shareholders approve our new equity incentive plan at our 2003 annual
meeting, the right to participate in such new plan. The initial annual base
salaries established in these agreements for Messrs. Enterline, Hunt, Barker
and Bramlett are $400,000, $300,000, $240,000 and $240,000, respectively. Each
employment agreement is for an initial term of two years, with automatic
one-year

14



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##### 



extensions thereafter unless either party provides written notice of
termination at least three months prior to any scheduled expiration date.

Each annual bonus under these employment agreements will have both an
objective component and a subjective component: 70% of the bonus will be tied
to achievement of at least 90% of a targeted EBITDA figure for the year, with the executive eligible to earn the
maximum portion of this component of the bonus if we achieve 140% of the
targeted EBITDA figure. The remaining 30% will be subject to the discretion of
our Compensation Committee. The targeted EBITDA bonus awards for each
executive officer will be determined as a percentage of the executives base
salary, as follows:

|                     |  |                           |    |          |  |         |     |  
|-------------------- |  | ------------------------- | -- | -------- |  | ------- | --- | -
|                     |  |                           |    |          |  | Maximum
|Executive            |  | Bonus at Target EBITDA(1) |    | Bonus(1)
|                     |  |                           |    |         
|Larry L. Enterline   |  |                           | 30 | %        |  |         | 100 | %
|James C. Hunt        |  |                           | 30 | %        |  |         | 90  | %
|Michael H. Barker    |  |                           | 30 | %        |  |         | 90  | %
|Ken R. Bramlett,
Jr. |  |                           | 30 | %        |  |         | 60  | %



---

|(1) |  | Percentage of base salary. The Bonus at Target EBITDA column is based
upon achievement of 100% of the targeted EBITDA number, while the Maximum
Bonus column is based upon achievement of 140% of the targeted EBITDA
number. Both columns are based upon full award of the 30% of bonus that
is subject to the Compensation Committees discretion.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In connection with our recently completed financial restructuring, each of
the named officers has irrevocably waived all of his rights to exercise his
outstanding stock options granted under our 1995 Stock Option Plan and
forfeited all of such options to the Company. For the number of options
forfeited by each of these executives, see the table labeled Fiscal Year-End
Option Value above. Each of these officers has also been awarded an initial
grant of stock options under our new 2003 Equity Incentive Plan , subject to
shareholder approval of the new plan at our upcoming 2003 Annual Meeting of
Shareholders. Those initial stock option awards under the new plan were for
5,750,000 shares to Mr. Enterline, 2,985,000 shares to Mr. Hunt, 2,250,000
shares to Mr. Barker and 1,600,000 shares to Mr. Bramlett
and all have exercise prices higher than the per share trading price
of the Common Stock on the date of the award.

The employment agreement of each of Messrs. Enterline, Hunt, Barker and
Bramlett provides that options granted under the new equity incentive plan to
these executive officers will vest on a pro rata basis over 4 years. If any of
these executive officers is terminated without cause prior to the first
anniversary of the date of his employment agreement, 25% of the options
initially granted to him will vest automatically as of the date of termination.
In addition, all of these options will vest automatically in the event of a
change of control involving the Company. Following a termination of
employment, each executive will have three months to exercise his vested stock
options unless his termination was without cause, in which event the exercise
period will be extended to 12 months.

The employment agreements for Messrs. Enterline, Barker and Bramlett also
provide these executive officers with one year of severance upon termination
(including any non-renewal) without cause. Mr. Hunts employment agreement
provides him with two years of severance. Each of the four employment
agreements requires the executive to agree to customary non-compete and
non-solicitation provisions.

The employment agreements for Messrs. Enterline and Bramlett also provide
them with additional severance benefits if there is a change of control
involving the Company in the first year of their agreements term (i.e., before
April 2004). If a change of control occurs during this first year, the
severance benefits for Messrs. Enterline and Bramlett severance will be
extended to two years from one year. However, if the sale price per share of
our capital stock in such change of control transaction represents a total
equity value of more than $100 million each of these officers additional
severance will be reduced, dollar for dollar, if and to the extent that the sum
of any stock option gains realized by the officer in such change of control
transaction, plus the additional

15



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##### 



severance, exceeds the sum of the officers
additional severance plus his realized stock option gains in a change of
control transaction with a total equity value equal to $100 million.

Director Compensation

In 2002, Mr. Kevin Egan was paid $10,000 for his service as non-executive
Chairman of the Board during the year and $10,000 for special services as a
director in connection with our financial restructuring. Additionally, each
non-employee director received an annual retainer of $15,000, and an additional
annual retainer of $1,000 for each Board committee he or she chaired.
Non-employee directors also received meeting fees of $1,000 per Board meeting
attended and $750 per committee meeting attended, plus reimbursement of
expenses. Members of the Special Committee of the Board received an additional $10,000 for
their service on that committee. Mr. Egan and Mr. Roger King (each of whom had
served on our Board of Directors since 1995) recently resigned from the Board
simultaneously with the closing of our financial restructuring.

We offer a deferred fee plan for our non-employee directors under which
participating directors may defer any or all of their retainer and meeting fees
for specified time periods. The deferred fee plan is non-qualified for tax
purposes. Deferred fees under the plan earn interest at the prime rate or, at
each participating directors option, a return based on our stock price
performance over time. Each non-employee director, except for Mr. King,
elected to defer 100% of the retainer and meeting fees to which he or she
otherwise was entitled in 2002 under the deferred fee plan. None of our directors
are participating in this plan for 2003.

Each of our 2002 directors also received an annual option grant to
purchase 3,000 shares of common stock in 2002 under our 1995 Stock
Option Plan, which required that the exercise price for options granted
under the plan equal the fair market value of our common stock on the date of
grant. In connection with the Companys recently completed financial
restructuring, each of our 2002 directors (other than Mr. King) has irrevocably
waived his or her right to exercise all of his or her outstanding PGA stock
options granted under the 1995 Stock Option Plan, including these
options, and has forfeited all of such options to the Company. Additionally,
the 1995 Stock Option Plan has been terminated.

Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of March 31, 2003 (except where
otherwise noted), the number and percentage of outstanding shares beneficially
owned by each person known by us to own beneficially more than 5% of our common
stock, by each of our directors who were serving as directors on March 31,
2003, by our Chief Executive Officer, by all of our executive officers
(including the four other most highly paid executive officers for 2002) and by
all of our 2002 directors and executive officers as a group. Except as
otherwise set forth below, each stockholder named has sole voting and
investment power with respect to his or her or its shares.

16



---



##### 



|                                                                                                                    |                                                                                                                                     |                       |                             |                   |                   |  |       |  | 
|------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | --------------------- | --------------------------- | ----------------- | ----------------- |  | ----- |  | 
|                                                                                                                    |                                                                                                                                     |                       | Amount and Nature of Shares |                   | Percent of Common
|Name and Address* of Beneficial Owner                                                                               |                                                                                                                                     | Beneficially Owned(1) |                             | Stock Outstanding
|                                                                                                                    |                                                                                                                                     |                       |                             |                  
|MatlinPatterson Global
Opportunities Partners L.P.
and MatlinPatterson Global Opportunities Partners (Bermuda) L.P. |                                                                                                                                     |                       | 3,398,568                   | (2)               |                   |  | 11.2% | 
|                                                                                                                    | 520 Madison Avenue                                                                                                                  |                       |                             |                   |                   |  |       |  | 
|                                                                                                                    | New York, New York 10022
and
Links Partners, L.P. and
Inland Partners, L.P.
61 Wilton Avenue, 2nd Floor
Westport, Connecticut 06880 |                       |                             |                   |                   |  |       |  | 
|Amalgamated Gadget, L.P.                                                                                            |                                                                                                                                     |                       | 2,012,051                   | (3)               |                   |  | 7.3%  | 
|                                                                                                                    | City Center Tower II                                                                                                                |                       |                             |                   |                   |  |       |  | 
|                                                                                                                    | 301 Commerce Street, Suite 2975                                                                                                     |                       |                             |                   |                   |  |       |  | 
|                                                                                                                    | Fort Worth, Texas 76102                                                                                                             |                       |                             |                   |                   |  |       |  | 
|SC Fundamental Value Fund, L.P. et al                                                                               |                                                                                                                                     |                       | 1,583,087                   | (4)               |                   |  | 5.9%  | 
|                                                                                                                    | 420 Lexington Avenue, Suite 2601                                                                                                    |                       |                             |                   |                   |  |       |  | 
|                                                                                                                    | New York, New York 10170                                                                                                            |                       |                             |                   |                   |  |       |  | 
|Larry L. Enterline                                                                                                  |                                                                                                                                     |                       | 450,000                     |                   |                   |  | 1.7%  | 
|James C. Hunt                                                                                                       |                                                                                                                                     |                       | 334,282                     | (5)               |                   |  | 1.2%  | 
|Michael H. Barker                                                                                                   |                                                                                                                                     |                       | 144,948                     |                   |                   |  | **    | 
|Ken R. Bramlett, Jr.                                                                                                |                                                                                                                                     |                       | 202,185                     | (6)               |                   |  | **    | 
|Thomas M. Wittenschlaeger                                                                                           |                                                                                                                                     |                       | 37,500                      |                   |                   |  | **    | 
|Thomas E. Stafford                                                                                                  |                                                                                                                                     |                       | 15,063                      |                   |                   |  | **    | 
|Kevin P. Egan                                                                                                       |                                                                                                                                     |                       | 201,974                     |                   |                   |  | **    | 
|J. Roger King                                                                                                       |                                                                                                                                     |                       | 99,200                      | (7)               |                   |  | **    | 
|James V. Napier                                                                                                     |                                                                                                                                     |                       | 85,000                      |                   |                   |  | **    | 
|William J. Simione, Jr.                                                                                             |                                                                                                                                     |                       | 48,000                      |                   |                   |  | **    | 
|Janice L. Scites                                                                                                    |                                                                                                                                     |                       | 35,750                      |                   |                   |  | **    | 
|All directors and executive officers as a group (11 persons)                                                        |                                                                                                                                     |                       | 1,653,902                   | (8)               |                   |  | 5.9%  | 



---

|*   |  | Addresses are furnished only for beneficial owners of more than 5% of our
common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|**  |  | Less than one percent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(1) |  | Includes the following shares subject to stock options exercisable within
60 days after March 31, 2003: Mr. Enterline  350,000; Mr. Hunt 
311,572; Mr. Barker  113,471; Mr. Bramlett  188,095; Mr. Wittenschlaeger
 12,500; Mr. Stafford  13,125; Mr. Egan  97,000; Mr. Napier  40,000;
Mr. King  40,000; Mr. Simione  40,000; Ms. Scites  24,750; and all
directors and executive officers as a group  1,230,513. Each of these
persons (other than Mr. King) has irrevocably waived his or her right to
exercise all of these options and has forfeited all of such options to the
Company. Additionally, the 1995 Equity Participation has been terminated
|   
|(2) |  | The amount and nature of the shares beneficially owned are as of
March 14, 2003, and are based on the most recent
Schedule 13D amendment on file with us. Such amendment
was filed by MatlinPatterson Global Opportunities Partners L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P., Links
Partners, L.P., Inland Partners, L.P., MatlinPatterson Global
Advisers LLC, MatlinPatterson Global Partners LLC, MatlinPatterson
Asset Management LLC, MATLINPATTERSON LLC, Coryton Management Ltd.,
Arthur Coady, Elias Sabo and I. Joseph Massoud and the parties
reported shared voting and dispositive powers with respect to all
shares reported.     
|   
|(3) |  | The amount and nature of the shares beneficially owned are as of February
10, 2003, and are based on the most recent Schedule 13G (or amendment
thereto) on file with us. Amalgamated Gadget
reports sole voting and dispositive power with respect to only
1,223,000 of the shares reported.                                                                                                                                                                                                                                                                                                                                                                            
|   
|(4) |  | In its Schedule 13G dated as of
January 2, 2003, the most recent Schedule 13G or amendment on file
with us, SC Fundamental Value Fund, L.P., reports
voting and dispositive power with respect to 647,150 shares, and
SC Fundamental Value BVI, Ltd. reports sole voting and
dispositive power with respect to 823,641 shares. Related
parties variously report shared voting and dispositive power with
respect to 647,150, 823,641 and 1,470,791 shares.                                                                                                                                                                                                               
|   
|(5) |  | Includes 1,120 shares held in the names of Mr. Hunts spouse and
children.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(6) |  | Includes 500 shares held in the name of Mr. Bramletts spouse.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(7) |  | Includes 8,500 shares and options to purchase 15,500 shares over which
beneficial ownership has been transferred to Mr. Kings ex-spouse under
the terms of a property settlement. Mr. King disclaims beneficial
ownership of these shares. Also includes 1,700 shares held in the name of
Mr. Kings current spouse.                                                                                                                                                                                                                                                                                                                                                    

17



---



##### 



Equity Compensation Plan Information

The table below contains information about the Companys compensation
plans as of December 29, 2002 under which equity securities of the Company are
authorized for issuance.

|                                                           |           |            |                   |            |                   |      |                     |      |                     |  |                     |           | 
|---------------------------------------------------------- | --------- | ---------- | ----------------- | ---------- | ----------------- | ---- | ------------------- | ---- | ------------------- |  | ------------------- | --------- | 
|                                                           |           |            |                   |            |                   |      |                     |      |                     |  | Number of          
|                                                           |           |            |                   |            |                   |      |                     |      |                     |  | securities         
|                                                           |           |            |                   |            |                   |      |                     |      |                     |  | remaining available
|                                                           |           |            | Number of         |            |                   |      |                     |      | for future issuance
|                                                           |           |            | securities to be  |            |                   |      |                     |      | under equity       
|                                                           |           |            | issued upon       |            | Weighted-average  |      | compensation plans 
|                                                           |           |            | exercise of       |            | exercise price of |      | (excluding         
|                                                           |           |            | outstanding       |            | outstanding       |      | securities         
|                                                           |           |            | options, warrants |            | options, warrants |      | reflected in column
|Plan Category                                              |           | and rights |                   | and rights |                   | (a))
|                                                           |           |            |                   |            |                   |     
|                                                           |           |            | (a)               |            | (b)               |      | (c)                
|Equity compensation
plans approved by
security holders(1)  |           |            | 2,837,635         |            |                   | $    | 6.63                |      |                     |  | 2,162,968           |          
|Equity compensation
plans not approved
by security holders |           |            |                  |            |                   |      |                    |      |                     |  |                    |          
|                                                           |           |            |                   |            |                   |      |                     |      |                     |  |                     |          
|                                                           | Total
(2) |            |                   | 2,837,635  |                   |      | $                   | 6.63 |                     |  |                     | 2,162,968 | 



---

|(1) |  | A number of the Companys employees, including each of the Companys
executive officers at the end of 2002, and all but one of the
Companys 2002 Directors have irrevocably cancelled any and all rights that they had to
exercise any and all stock options that were previously granted to such persons
and agreed that all such options would be forfeited to the Company. These
directors and employees held in the aggregate 2,190,030 of the stock options
that were outstanding under the 1995 Stock Option Plan as of December 29, 2002.
As a result of these voluntary forfeitures, only 545,445 stock options remain
outstanding under the 1995 Stock Option Plan and these options have a weighted
average exercise price of $9.23 per share. Although the 1995 Stock Option Plan
has been terminated and no future issuances thereunder will be made, these
remaining outstanding stock options will continue to be exercisable in
accordance with their terms.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Excludes 1,734,894 shares reserved
at December 29, 2002 for issuance under the Companys 2001
Non-Qualified Employee Stock Purchase Plan, which plan was terminated
on December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Item 13. Certain Relationships and Related Transactions

The Company has no relationships or transactions to report under this Item 13.

Item 14. Controls and Procedures

Within the 90 days prior to the date of this annual report on Form 10-K,
the Company evaluated the effectiveness of the design and operation of its
disclosure controls and procedures (disclosure controls), and its internal
controls and procedures for financial reporting (internal controls).
Disclosure controls mean those controls and other procedures that are designed
for the purpose of ensuring that information required to be disclosed in the
Companys reports filed under the Securities Exchange Act of 1934, such as this
annual report, is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms. Internal
controls are procedures designed for the purpose of providing reasonable
assurance that the Companys transactions are properly authorized, its assets
are safeguarded against unauthorized or improper use and its transactions are
properly recorded and reported, all to permit the preparation of the Companys
financial statements in conformity with generally accepted accounting
principles. This evaluation was performed under the

18



---



##### 



supervision and with the
participation of management, including the Companys Chief Executive Officer
and Chief Financial Officer.

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.



| | a. |  | Documents filed as part of this report:
| | -- |  | ---------------------------------------



| | (1) |  | The following Report of Independent Accountants and
financial statements of the Company are contained in Item 8
above:
| | --- |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | Consolidated Financial Statements:
| |  |  | ----------------------------------



| |  |  | Report of Independent Accountants                                                                                                       
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Consolidated Balance Sheets as of December 29, 2002 and
December 30, 2001                                                               
|
| |  |  | Consolidated Statements of Operations for the years ended
December 29, 2002, December 30, 2001 and December 31, 2000                    
|
| |  |  | Consolidated Statements of
Shareholders Equity (Deficit) for the years
ended December 29, 2002, December 30, 2001 and December 31,
2000
|
| |  |  | Consolidated Statements of Cash Flows for the years ended
December 29, 2002, December 30, 2001 and December 31, 2000                    
|
| |  |  | Notes to Consolidated Financial Statements                                                                                              



| | (2) |  | No financial statement schedules are filed as part of
this report. All financial statement schedules for which
provision is made in the applicable accounting regulations of the
Securities and Exchange Commission are not required under the
related instructions, are inapplicable, or the required
information is included elsewhere in the notes to the financial
statements referred to above.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) |  | Exhibits:
| | --- |  | ---------



| |  |  | The Exhibits filed with or
incorporated by reference into this annual report on Form 10-K are listed in the accompanying Exhibit Index.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------



| | b. |  | Reports on Form 8-K:
| | -- |  | --------------------



| |  |  | The Company submitted the following reports on Form 8-K during the fourth
quarter:
| |  |  | ----------------------------------------------------------------------------------



| | (i)  |  | November 12, 2002, in which
the Company reported on the execution of an
Agreement in Principle for a financial
restructuring; and                                                                 
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | November 19, 2002, in which
the Company commented on an announcement by the
NYSE of its intent to
suspend the Common Stock from trading on the
NYSE and to seek the delisting of the Common
Stock.

19



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on April 14, 2003.

| |  |                                  |  |                                           
| |  | -------------------------------- |  | ------------------------------------------
| |  | PERSONNEL GROUP of AMERICA, INC.
| |  |                                  |  |                                           
| |  | By:                              |  | /s/ Larry L. Enterline                    
| |  |                                  |  |                                           
| |  |                                  |  | Larry L. Enterline
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the Chief Executive Officer and Chief Financial
Officer of the Company, and by a majority of the Companys Board of Directors,
on April 14, 2003.

|                                                    |  |                                      
|--------------------------------------------------- |  | -------------------------------------
|Signature                                           |  |                                      
|                                                    |  |                                      
|/s/  Larry L. EnterlineLarry L. Enterline           |  | Chief Executive Officer and Director 
|                                                   
|/s/  James C. HuntJames C. Hunt                     |  | President and Chief Financial Officer
|                                                   
|/s/  James V. NapierJames V. Napier                 |  | Director                             
|                                                   
|/s/  William J. Simione, Jr.William J. Simione, Jr. |  | Director                             
|                                                   
|/s/  Janice L. ScitesJanice L. Scites               |  | Director                             

20



---



##### 



CERTIFICATIONS

I, Larry L. Enterline, certify that:

1.     I have reviewed this annual report on Form 10-K of Personnel Group of
America, Inc. (the registrant);

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                           
|-------------------- |  | ------------------------------------------
|Date: April 14, 2003 |  | /s/ Larry L. Enterline                    
|                     |  |                                           
|                     |  | Larry L. Enterline
Chief Executive Officer

21



---



##### 



CERTIFICATIONS

I, James C. Hunt, certify that:

1.     I have reviewed this annual report on Form 10-K of Personnel Group of
America, Inc. (the registrant);

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                                    
|-------------------- |  | ---------------------------------------------------
|Date: April 14, 2003 |  | /s/ James C. Hunt                                  
|                     |  |                                                    
|                     |  | James C. Hunt
President and Chief Financial Officer

22



---



##### 



EXHIBIT INDEX

|        |  |                                                                                           |  |                     |       |                  |  |                             
|------- |  | ----------------------------------------------------------------------------------------- |  | ------------------- | ----- | ---------------- |  | ----------------------------
|        |  |                                                                                           |  | Filed Herewith (*)  |       |                 
|        |  |                                                                                           |  | Non-Applicable (NA) |       |                 
|        |  |                                                                                           |  | or Incorporated by  |       |                 
|        |  |                                                                                           |  | Reference from      |       |                 
|        |  |                                                                                           |  | Previous            |       | Company Reg. No.
|Exhibit |  |                                                                                           |  | Exhibit             |       | or              
|Number  |  | Description                                                                               |  | Number              |       | Report          
|        |  |                                                                                           |  |                     |       |                 
|3.1     |  | Restated Certificate of
Incorporation of the Company, as
amended                          |  |                     | 3.1   |                  |  | 333-31863                   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|3.2     |  | Amended and Restated Bylaws of the
Company                                                |  |                     | 3.2   |                  |  | 33-95228                    
|        |  |                                                                                           |  |                     |       |                  |  |                             
|4.0     |  | Specimen Stock Certificate                                                                |  |                     | 4.0   |                  |  | 33-95228                    
|        |  |                                                                                           |  |                     |       |                  |  |                             
|4.1     |  | Rights Agreement between the Company
and First Union National Bank (as
successor trustee) |  |                     | 1     |                  |  | 0-27792                     
|        |  |                                                                                           |  |                     |       |                  |  |                             
|4.2     |  | First Amendment to Rights Agreement                                                       |  |                     | 4.1   |                  |  | 8-K filed 12/31/01          
|        |  |                                                                                           |  |                     |       |                  |  |                             
|4.3     |  | Indenture between the Company and
HSBC Bank USA (as successor trustee)                    |  |                     | 4.2   |                  |  | 333-31863                   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|4.4     |  | Form of Note Certificate for 5-3/4%
Convertible Subordinates Notes                        |  |                     | 4.3   |                  |  | 333-31863                   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.1+   |  | 1995 Equity Participation Plan, as amended                                                |  |                     | 10.1  |                  |  | 333-31863                   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.2+   |  | Amended and Restated Management
Incentive Compensation Plan                               |  |                     | 10.2  |                  |  | 10-K for year ended
1/3/99  
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.3+   |  | 2001 Non-Qualified Employee Stock Purchase Plan                                           |  |                     | 4.1   |                  |  | 333-66334                   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.4#+  |  | Director and Officer Indemnification
Agreement of James V. Napier                         |  |                     | 10.3  |                  |  | 10-K for year ended
12/31/95
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.5+   |  | Letter of Employment between the
Company and Larry L. Enterline                           |  |                     | 10.5  |                  |  | 10-K for year ended
12/31/00
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.6+   |  | Supplemental Retirement Plan for
Edward P. Drudge, Jr.                                    |  |                     | 10.7  |                  |  | 10K for year ended
1/2/00   
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.7+   |  | Form of Retirement Agreement between
the Company and Edward P. Drudge,
Jr.                |  |                     | 10.8  |                  |  | 10-K for year ended
1/2/00  
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.8+   |  | Employment Agreement between the
Company and James C. Hunt                                |  |                     | 10.10 |                  |  | 10-K for year ended
12/29/96
|        |  |                                                                                           |  |                     |       |                  |  |                             
|10.9+   |  | Employment Agreement between the
Company and Ken R. Bramlett, Jr.                         |  |                     | 10.13 |                  |  | 10-K for year ended
12/29/96

23



---



##### 



|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | ----- | ---------------- |  | ----------------------------
|        |  |                                                                                                                                                                                                                                                                  |  | Filed Herewith (*)  |       |                 
|        |  |                                                                                                                                                                                                                                                                  |  | Non-Applicable (NA) |       |                 
|        |  |                                                                                                                                                                                                                                                                  |  | or Incorporated by  |       |                 
|        |  |                                                                                                                                                                                                                                                                  |  | Reference from      |       |                 
|        |  |                                                                                                                                                                                                                                                                  |  | Previous            |       | Company Reg. No.
|Exhibit |  |                                                                                                                                                                                                                                                                  |  | Exhibit             |       | or              
|Number  |  | Description                                                                                                                                                                                                                                                      |  | Number              |       | Report          
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                 
|10.10+  |  | Employment Agreement between the
Company and Michael H. Barker                                                                                                                                                                                                   |  |                     | 10.9  |                  |  | 10-K for year ended
1/3/99  
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.11+  |  | Employment Agreement between the
Company and Thomas M.
Wittenschlaeger                                                                                                                                                                                           |  |                     | 10.11 |                  |  | 10-K for year ended
12/30/01
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.12   |  | Amended and Restated Non-Qualified
Profit-Sharing Plan                                                                                                                                                                                                           |  |                     | 10.16 |                  |  | 10-K for year ended
12/29/96
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.13+  |  | Directors Non-Qualified Deferred
Fee Plan                                                                                                                                                                                                                       |  |                     | 10.12 |                  |  | 10-K for year ended
12/28/97
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.14   |  | Amendment No. 4 to Amended and
Restated Credit Agreement among the
Company and its subsidiaries, the
lenders party thereto and Bank of
America, as Agent                                                                                                         |  |                     | 99.2  |                  |  | 8-K filed 2/12/02           
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.15   |  | Equity Appreciation Rights Agreement                                                                                                                                                                                                                             |  |                     | 99.3  |                  |  | 8-K filed 2/12/02           
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.16   |  | Registration Rights Agreement
between the Company and the Initial
Purchasers                                                                                                                                                                                     |  |                     | 10.17 |                  |  | 333-31863                   
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.17   |  | Agreement-in-principle among the
Company, certain of its lenders
under Amendment No. 4 to the Amended
and Restated Credit Agreement and
certain holders of the Companys
5-3/4% Convertible Subordinated
Notes, due 2004                                         |  |                     | 99.2  |                  |  | 8-K filed 11/12/02          
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.18   |  | Purchase Option Agreement among the
Company, certain of its lenders and
Bank of America, N.A., as agent
under Amendment No. 4 to the Amended
and Restated Credit Agreement, and
certain holders of the Companys
5-3/4% Convertible Subordinated
Notes, due 2004 |  |                     | 99.3  |                  |  | 8-K filed 11/12/02          
|        |  |                                                                                                                                                                                                                                                                  |  |                     |       |                  |  |                             
|10.19   |  | Amendment No. 5 to Amended and
Restated Credit Agreement among the
Company and its subsidiaries, the
lenders party thereto and Bank of
America, as Agent                                                                                                         |  |                     | *     |                  |  |                             

24



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##### 



|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | - | ---------------- |  | 
|        |  |                                                                                                                                           |  | Filed Herewith (*)  |   |                 
|        |  |                                                                                                                                           |  | Non-Applicable (NA) |   |                 
|        |  |                                                                                                                                           |  | or Incorporated by  |   |                 
|        |  |                                                                                                                                           |  | Reference from      |   |                 
|        |  |                                                                                                                                           |  | Previous            |   | Company Reg. No.
|Exhibit |  |                                                                                                                                           |  | Exhibit             |   | or              
|Number  |  | Description                                                                                                                               |  | Number              |   | Report          
|        |  |                                                                                                                                           |  |                     |   |                 
|12.1    |  | Statement regarding computation of
ratio of earnings to fixed charges                                                                     |  |                     | * |                  |  | 
|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|13.1    |  | Those portions of the Annual Report
incorporated by reference in Parts
II, Items 6, 7, 7A and 8 and Part
IV, Item 15(a)(1) of this report |  |                     | * |                  |  | 
|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|21.1    |  | Subsidiaries of the Company                                                                                                               |  |                     | * |                  |  | 
|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|23.1    |  | Consent of PricewaterhouseCoopers LLP                                                                                                     |  |                     | * |                  |  | 
|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|99.1    |  | Section 906 Certification of Larry L. Enterline, Chief Executive
Officer of the Company                                                   |  |                     | * |                  |  | 
|        |  |                                                                                                                                           |  |                     |   |                  |  | 
|99.2    |  | Section 906 Certification of James C. Hunt, Chief Financial Officer
of the Company                                                        |  |                     | * |                  |  | 

# This Exhibit is substantially identical to Director and Officer
Indemnification Agreements (i) of the same date between the Company and the
following individuals: Kevin P. Egan, J. Roger King, and William Simione, Jr.;
(ii) dated April 17, 1998 between the Company and each of James C. Hunt and Ken
R. Bramlett, Jr.; and (iii) dated August 9, 1999 between the Company and Janice
L. Scites.

+ Management Contract or Compensatory plan required to be filed under Item
14(c) of this report and Item 601 of Regulation
S-K of the Securities and Exchange Commission.

25