##### 



SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
   Form 10-K/A Amendment No. 1 (Mark One) þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 28, 2003
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 VENTURI PARTNERS, INC.  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)   (704) 442-5100
(Registrants telephone number, including area code) Personnel Group of America, Inc.
(Former name)
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)   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 [ ] 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. [ ] 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 [ ] No
[ X ] The aggregate market value of voting stock held by non-affiliates of the
registrant as of June 27, 2003, computed by reference to the closing sale price
on such date, was $4,963,803. (For purposes of calculating this amount only,
all shareholders with more than 10% of the total voting power, all directors
and all executive officers are treated as affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes. This calculation reflects the 1-for-25 reverse split of the
registrants common stock and the conversion of its outstanding Series B
preferred stock, both of which occurred after June 27, 2003.) As of March 24,
2004, 6,089,938 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 28, 2003 (the Annual Report) furnished to the
Commission pursuant to Rule 14a-3(b) are incorporated by reference into Part
II.




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##### 



Explanatory Note This Amendment No. 1 on Form 10-K/A (this Amendment) amends the Companys
Annual Report on Form 10-K for the fiscal year ended December 28, 2003,
originally filed on March 24, 2004 (the Original Filing). The Company is
refiling Part III to include information required by Items 10, 11, 12, 13 and
14 because the Companys proxy statement will not be filed within 120 days
after the end of its fiscal year ended December 28, 2003. Accordingly,
reference to the Companys definitive Proxy Statement on the cover page has
been deleted. In addition, pursuant to the rules of the Securities and
Exchange Commission, the Company is including with this Amendment certain
currently dated certifications. Except as described above, no other changes have been made to the Original
Filing. This Amendment continues to speak as of the date of the Original
Filing, and the registrant has not updated the disclosures contained therein to
reflect any events that occurred subsequent to the date of the Original Filing.
The filing of this Form 10-K/A is not a representation that any statements
contained in items of Form 10-K other than Part III, Items 10 through 14 are
true or complete as of any date subsequent to the date of the Original Filing.




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##### 



PART III Item 10. Directors and Executive Officers of the Registrant Management Information The table below sets forth certain information concerning each of our
directors and executive officers: Name
    
    Age
    
    PositionLarry L. Enterline
    
    
    51
    
    
    Chief Executive Officer and Chairman of the Board of
DirectorsJames C. Hunt
    
    
    47
    
    
    President and Chief Financial OfficerMichael H. Barker
    
    
    49
    
    
    President of Division OperationsKen R. Bramlett, Jr.
    
    
    44
    
    
    Senior Vice President, General Counsel and SecretaryThomas E. Stafford
    
    
    58
    
    
    Vice President of Human ResourcesVictor E. Mandel
    
    
    38
    
    
    DirectorChristopher R. Pechock
    
    
    39
    
    
    DirectorElias J. Sabo
    
    
    32
    
    
    DirectorJanice L. Scites
    
    
    53
    
    
    DirectorWilliam J. Simione, Jr.
    
    
    62
    
    
    Director
 Larry L. Enterline:Mr. Enterline has served as our Chief Executive
Officer and as a director since December 2000, and now serves as Chairman of
our board of directors. From 1984 to 1989, Mr. Enterline served as Vice
President of Marketing and Sales with Bailey Controls. From 1989 to 2000, Mr.
Enterline served in various management roles with Scientific-Atlanta, Inc.,
including Senior Vice President in charge of 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. 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 Technology Division. Prior to that time, Mr.
Barker served as President of Divisional Operations from October 1999 to
January 2001 and as President of the 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.




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##### 



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. Victor E. Mandel:Mr. Mandel has served as a director since the
completion of our financial restructuring in April 2003. 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. Christopher R. Pechock:Mr. Pechock has served as a director since the
completion of our financial restructuring in April 2003. Since 1998, Mr.
Pechock has served as a partner at MatlinPatterson Global Opportunities
Partners (and its predecessor), an asset management firm specializing in
corporate restructurings. Mr. Pechock has a Masters degree in business
administration from Columbia Business School. He also serves on the boards of
directors of Huntsman Holdings, Inc., Gross International Corporation and
Compass Aerospace Corporation. Elias J. Sabo:Mr. Sabo has served as a director since the completion of
our financial restructuring in April 2003 and currently serves as chair of the
Compensation Committee. Since 1998, 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
and currently serves as chair of the Governance Committee. 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 and currently serves as chair of the Audit Committee. 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.). He also served on the board of directors of CareCentric.
Since October 2001, Mr. Simione has served as managing principal of Simione
Consultants, LLC, which provides consulting services and information systems to
the home healthcare industry. He is a member of the Prospective Payment Task
Force for the National Association for Home Care and Hospice and is one of the
associations National Reimbursement Consultants. Mr. Simione is also an
associate professor at Yale University Graduate School of Nursing. Audit Committee Financial Expert The board has determined that Mr. Simione is an audit committee financial
expert under applicable SEC rules in light of his extensive prior business
experience as a certified public accountant in 2




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##### 



private practice and as a senior executive with a number of private and
publicly held companies. In these roles, Mr. Simione has audited the financial
statements of a number of public and private companies, participated in the
preparation of financial statements for public and private companies and
supervised others who have both prepared and audited financial statements for
public and private companies. Our board of directors has also determined that
Mr. Simione is independent within the meaning of the new Nasdaq rules that
would be applicable to us as of our 2004 annual meeting if our common stock
were listed on Nasdaq (which it currently is not). 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 28, 2003, our executive officers and directors and
any greater than 10% beneficial owners complied with all applicable Section
16(a) filing requirements, except that due to administrative errors, Form 4s
were not timely filed in connection with option grants to three of our
directors (Mr. Mandel, Ms. Scites and Mr. Simione) and four of our executive
officers (Mr. Enterline, Mr. Hunt, Mr. Barker and Mr. Bramlett) in April 2003
and an option grant to Mr. Stafford in September 2003. Code of Ethics We have adopted a written code of business conduct and ethics that applies
to all of our directors, officers and employees, including our principal
executive officer, principal financial officer and principal accounting
officer. The code is available on our Internet site at
www.venturipartners.com. We intend to disclose on our Internet site any
substantive changes to the code. Item 11. Executive Compensation Compensation of Executive Officers The following table sets forth compensation information for fiscal years
2003, 2002 and 2001 for those persons who were our Chief Executive Officer and
our four other most highly paid executive officers as of December 28, 2003: 3




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##### 



Long TermCompensationAwardsAnnual Compensation
    
    
    
    
    
    SecuritiesOther Annual
    
    Underlying
    
    All OtherName and Principal Position
    
    
    
    
    
    Salary
    
    Bonus
    
    
    
    
    
    Compensation
    
    Options(#)(1)
    
    CompensationLarry L. Enterline
    
    
    2003
    
    
    $
    409,730
    
    
    $
    36,000
    
    
    
    
    
    
    
    
    
    
    
    230,000
    
    
    $
    Chief Executive Officer and Chairman of
    
    
    2002
    
    
    
    409,476
    
    
    
    280,000
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    the Board of Directors
    
    
    2001
    
    
    
    414,666
    
    
    
    400,000
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    4,404
    
    
    
    (3
    )James C. Hunt
    
    
    2003
    
    
    $
    306,872
    
    
    $
    27,000
    
    
    
    
    
    
    
    
    
    
    
    119,400
    
    
    $
    16,667
    
    
    
    (4
    )President and Chief Financial Officer
    
    
    2002
    
    
    
    307,445
    
    
    
    147,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    (5
    )2001
    
    
    
    307,965
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    131,216
    
    
    
    (6
    )Michael H. Barker
    
    
    2003
    
    
    $
    246,028
    
    
    $
    21,600
    
    
    
    
    
    
    
    
    
    
    
    90,000
    
    
    $
    9,840
    
    
    
    (4
    )President of Division Operations
    
    
    2002
    
    
    
    246,741
    
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    
    (5
    )2001
    
    
    
    247,379
    
    
    
    108,000
    
    
    
    
    
    
    
    
    
    
    
    1,600
    
    
    
    67,759
    
    
    
    (6
    )Ken R. Bramlett, Jr.
    
    
    2003
    
    
    $
    246,602
    
    
    $
    21,600
    
    
    
    
    
    
    
    
    
    
    
    64,000
    
    
    $
    9,840
    
    
    
    (4
    )Senior Vice President, General Counsel and
    
    
    2002
    
    
    
    247,175
    
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,160
    
    
    
    (5
    )Secretary
    
    
    2001
    
    
    
    247,695
    
    
    
    96,000
    
    
    
    
    
    
    
    
    
    
    
    1,200
    
    
    
    102,013
    
    
    
    (6
    )Thomas E. Stafford
    
    
    2003
    
    
    $
    121,795
    
    
    $
    7,800
    
    
    
    
    
    
    
    
    
    
    
    7,000
    
    
    $
    3,726
    
    
    
    (4
    )Vice President of Human Resources
    
    
    2002
    
    
    
    110,526
    
    
    
    23,730
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,430
    
    
    
    (5
    )2001
    
    
    
    96,460
    
    
    
    27,500
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    7,680
    
    
    
    (6
    )
   (1)
    
    As a condition to the closing of our financial restructuring in April
2003, we granted the referenced 2003 options to Mr. Enterline, Mr. Hunt,
Mr. Barker and Mr. Bramlett in two separate tranches. These options vest
monthly on a pro rata basis, in each case at a rate of 25% per year. We
also granted options to Mr. Stafford in September 2003. Mr. Staffords
options vest annually on a pro rata basis, again at a rate of 25% per
year. See -Option Grants Table for more information about these grants.In connection with our financial restructuring, each of the named executives
irrevocably waived his right to exercise all of his outstanding stock
options granted under our previous stock option plan and forfeited all of
those options to the Company. The forfeited options included all of the
options shown in the table that were granted to the named officers in 2001.
We did not grant stock options to any of the named officers in 2002.(2)
    
    At the request of the Compensation Committee, Mr. Enterline has deferred
the payment of his bonuses for 2001 (the amount of which was guaranteed)
and 2002.(3)
    
    This amount represents relocation expense reimbursements paid to Mr.
Enterline in 2001.(4)
    
    These amounts represent 2003 allocations to our non-qualified
profit-sharing plan for the named executives.(5)
    
    These amounts represent 2002 allocations to our non-qualified
profit-sharing plan for Mr. Hunt, Mr. Bramlett and Mr. Stafford and a
matching contribution to our Technology Division 401(k) plan for Mr.
Barker.(6)
    
    These amounts represent 2001 allocations to our non-qualified
profit-sharing plan for Mr. Hunt, Mr. Barker, Mr. Bramlett and Mr.
Stafford of $50,000, $17,964, $19,903 and $7,680, respectively, and
$81,216, $49,795, $82,110 and $0, respectively, paid to the named officers
in connection with the termination and amendment of vacation and paid time
off plans. 4




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##### 



Option Grants Table The following table sets forth certain information concerning grants of
stock options to the named officers during 2003. Option Grants in Last Fiscal Year Individual Grants% of Total
    
    
    
    
    
    
    
    
    
    Potential Realizable Value atNumber of
    
    Options
    
    
    
    
    
    
    
    
    
    Assumed Annual Rates ofSecurities
    
    Granted to
    
    Exercise
    
    
    
    
    
    Stock Price Appreciation forUnderlying Options
    
    Employees
    
    or Base
    
    
    
    
    
    Option TermGranted
    
    In Fiscal
    
    Price
    
    ExpirationName
    
    (#) (1)
    
    Year
    
    ($/Sh)
    
    Date
    
    0% ($)
    
    5% ($)
    
    10% ($)Larry L. Enterline (1)
    
    
    160,000
    
    
    
    23.7
    %
    
    $
    7.80
    
    
    
    4/14/2013
    
    
    $
    
    
    
    $
    
    
    
    $
    723,24470,000
    
    
    
    10.4
    
    
    
    11.70
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    43,419James C. Hunt (1)
    
    
    80,000
    
    
    
    11.8
    
    
    
    7.80
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    361,62239,400
    
    
    
    5.8
    
    
    
    11.70
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    24,439Michael H. Barker (1)
    
    
    60,000
    
    
    
    8.9
    
    
    
    7.80
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    271,21730,000
    
    
    
    4.4
    
    
    
    11.70
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    18,608Ken R. Bramlett, Jr. (1)
    
    
    48,000
    
    
    
    7.1
    
    
    
    7.80
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    216,97316,000
    
    
    
    2.4
    
    
    
    11.70
    
    
    
    4/14/2013
    
    
    
    
    
    
    
    
    
    
    
    9,924Thomas E. Stafford (2)
    
    
    7,000
    
    
    
    1.0
    
    
    
    8.88
    
    
    
    9/03/2013
    
    
    
    11,340
    
    
    
    57,564
    
    
    
    128,480
   (1)
    
    As of December 31, 2003, the options granted to Mr. Enterline, Mr. Hunt,
Mr. Barker and Mr. Bramlett were 83.33% unvested, and the unvested
portions will continue to vest monthly on a pro rata basis, at a rate of
25% per year.(2)
    
    As of December 31, 2003, the options granted to Mr. Stafford were 100%
unvested. These options vest annually on a pro rata basis, at a rate of
25% per year. Option Exercises and Year-End Value Table The following table sets forth certain information concerning unexercised
options held as of the end of 2003. None of the named officers exercised any
options during 2003. Fiscal Year-End Option Value Number of Securities Underlying
    
    Value of Unexercised In-the-MoneyUnexercised Options at FY-End (#)
    
    Options at FY-End ($)(1)Name
    
    Exercisable (2)
    
    Unexercisable
    
    Exercisable
    
    UnexercisableLarry L. Enterline
    
    
    38,333
    
    
    
    191,667
    
    
    $
    85,600
    
    
    $
    428,000James C. Hunt
    
    
    19,900
    
    
    
    99,500
    
    
    
    42,800
    
    
    
    214,000Michael H. Barker
    
    
    15,000
    
    
    
    75,000
    
    
    
    32,100
    
    
    
    160,500Ken R. Bramlett, Jr.
    
    
    10,667
    
    
    
    53,333
    
    
    
    25,680
    
    
    
    128,400Thomas E. Stafford
    
    
    
    
    
    
    7,000
    
    
    
    
    
    
    
    14,910
   (1)
    
    The fair market value of the common stock used for these computations was
$11.01, which was the last bid price for our common stock on the OTC
Bulletin Board on December 26, 2003.(2)
    
    Includes options held by the named individuals
that were vested as of December 31, 2003. 5




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Employment Agreements Each of Mr. Enterline, Mr. Hunt, Mr. Barker and Mr. Bramlett is 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, the right to earn annual bonuses as described below and the right to
participate in our 2003 Equity Incentive Plan. The initial annual base
salaries established in these agreements for Mr. Enterline, Mr. Hunt, Mr.
Barker and Mr. Bramlett are $400,000, $300,000, $240,000 and $240,000,
respectively, the same base salaries that each executive had before the
financial restructuring. Each employment agreement is for an initial term of
two years, with automatic one-year extensions thereafter unless either party
provides written notice of termination at least three months prior to any
scheduled expiration date. These executives are also eligible to earn annual incentive bonuses under
their employment agreements. Each annual bonus 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: MaximumExecutive
    
    Bonus at Targeted 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 Targeted 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 on the
assumption that the discretionary award, which makes up 30% of the
total bonus award, is the maximum amount authorized to be awarded by
Compensation Committee in its discretion. In connection with our recent financial restructuring, each of the named
officers 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. We awarded an initial grant of stock options under our
new 2003 Equity Incentive Plan to each of these officers, as follows: 230,000
shares to Mr. Enterline, 119,400 shares to Mr. Hunt, 90,000 shares to Mr.
Barker and 64,000 shares to Mr. Bramlett. All of these grants were at exercise
prices higher than the per share trading price of our common stock on the date
of the award. See -Option Grants Table. The employment agreements for each of Mr. Enterline, Mr. Hunt, Mr. Barker
and Mr. Bramlett provide that options granted under the new incentive plan to
these executive officers will vest monthly on a pro rata basis over four 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 Mr. Enterline, Mr. Barker and Mr. Bramlett
also provide these 6




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##### 



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 upon termination (including any non-renewal)
without cause. Each of the four employment agreements requires the executive
to agree to customary non-compete and non-solicitation provisions. Mr. Stafford is employed pursuant to an employment agreement with the
Company dated July 24, 2003. Mr. Staffords employment agreement provides for
an annual base salary of $130,000, the right to earn annual bonuses as
described below and the right to participate in our 2003 Equity Incentive Plan.
The employment agreement is for an initial term of two years commencing on May
15, 2003, with automatic one-year extensions thereafter unless either party
provides written notice of termination at least 30 days prior to any scheduled
expiration date. Mr. Staffords annual incentive bonus under his employment agreement will
have both an objective component and a subjective component: 70% of his bonus
will be tied to achievement of at least 90% of a targeted EBITDA figure for the
year, and he will be eligible to earn the maximum portion of this component of
his bonus if we achieve 140% of the targeted EBITDA figure. The remaining 30%
will be subject to the discretion of our Compensation Committee. Mr. Stafford
will be entitled to a bonus equal to 20% of his base salary if we achieve the
targeted EBITDA figure and 40% of his base salary if we achieve 140% of the
targeted EBITDA figure, assuming that his discretionary award, which makes up
30% of the total bonus award, is the maximum amount authorized to be awarded by
Compensation Committee in its discretion. In connection with our recent financial restructuring, Mr. Stafford
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. We awarded an initial grant of 7,000 stock options under our new
2003 Equity Incentive Plan to Mr. Stafford at an exercise price of $8.88 per
share, and these options vest annually on a pro rata basis over 4 years. 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, Mr.
Stafford will have three months to exercise his vested stock options. The employment agreement for Mr. Stafford also provides him with six
months of severance and a prorated bonus upon termination (including any
non-renewal) without cause, assuming continued compliance with customary
non-compete and non-solicitation provisions contained in the employment
agreement. Compensation of Directors In 2003 we paid Mr. Mandel, Ms. Scites and Mr. Simione an annual retainer
of $15,000 each. Ms. Scites also received a retainer of $1,000 for chairing
the Governance Committee. These 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
our board that served in 2002 and the first quarter of 2003 in connection with
our financial restructuring received an additional $10,000 for their service on
that committee. In 2004, we will pay each non-employee director (including Mr. Sabo and
Mr. Pechock, who did not receive any directors fees in 2003) the $15,000
annual retainer, plus $1,000 for each board committee he or she chairs and the
meeting fees described above. 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. None of our 7




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directors participated in this plan for 2003. In connection with the closing of our financial restructuring and the
reconstitution of our board, we changed the equity component of our board
compensation package. Generally, non-employee directors who join our board
will receive stock options to purchase 1,000 shares of our common stock at an
exercise price determined on the date that they join the board, and annual
grants thereafter of 1,000 options on the date of each annual meeting of
stockholders. As of the closing of the financial restructuring, Mr. Mandel,
Ms. Scites and Mr. Simione each received a stock option grant to purchase 1,000
shares of common stock under our 2003 Equity Incentive Plan at an exercise
price of $7.8025. In 2004 each of our non-employee directors (including Mr. Sabo and Mr.
Pechock) will receive a stock option grant to purchase 1,000 shares of our
common stock at an exercise price determined on the date of our 2004 annual
meeting of shareholders. All stock options granted to the directors are
non-qualified options and are vested in full on the date of grant. Item 12. Security Ownership of Certain Beneficial Owners and Management The following
table sets forth, as of March 31, 2004 (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, by our Chief Executive Officer, by all of our
executive officers (including the four other most highly paid executive
officers for 2003) and by all of our 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. 8




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Shares of Common StockBeneficially OwnedName and Address* of Beneficial Owner
    
    Number (1)
    
    Percent (2)MatlinPatterson Global Opportunities Partners L.P. and MatlinPattersonGlobal Opportunities Partners (Bermuda) L.P.520 Madison Avenue
    
    
    2,932,076
    (3)
    
    
    46.9
    %New York, New York 10022AndLinks Partners, L.P. and Inland Partners, L.P.61 Wilton Avenue, 2nd FloorWestport, Connecticut 06880Amalgamated Gadget, L.P.City Center Tower II301 Commerce Street, Suite 2975Fort Worth, Texas 76102
    
    
    1,088,980
    (4)
    
    
    17.4
    %Zazove Associates, LLC940 Southwood Boulevard, Suite 200Incline Village, NV 89451
    
    
    1,023,337
    (5)
    
    
    16.8
    %Larry L. Enterline
    
    
    66,292
    
    
    
    1.1
    %James C. Hunt
    
    
    33,246
    (6)
    
    
    *
    *Michael H. Barker
    
    
    25,634
    
    
    
    *
    *Ken R. Bramlett, Jr.
    
    
    17,896
    (7)
    
    
    *
    *Thomas E. Stafford
    
    
    77
    
    
    
    *
    *Victor E. Mandel
    
    
    1,000
    
    
    
    *
    *Christopher R. Pechock
    
    
    
    
    
    
    *
    *Elias J. Sabo
    
    
    2,932,076
    (3)
    
    
    46.9
    %William J. Simione, Jr.
    
    
    1,320
    
    
    
    *
    *Janice L. Scites
    
    
    1,440
    
    
    
    *
    *All directors and executive officers as a group (10 persons)
    
    
    3,078,981
    
    
    
    49.2
    %
   *
    
    Addresses are furnished only for beneficial owners of more than 5% of our
common stock.**
    
    Less than one percent(1)
    
    These numbers includes the following shares subject to stock options that
are exercisable now or will become exercisable within 60 days after March
31, 2004: Mr. Enterline62,292; Mr. Hunt32,338; Mr. Barker24,375; Mr.
Bramlett17,333; Mr. Mandel1,000; Ms. Scites1,000; and Mr.
Simione1,000.(2)
    
    These calculations are based on an aggregate of 6,089,938 shares issued
and outstanding as of March 31, 2004. Warrants and options to purchase
shares held by a person that are exercisable or become exercisable within
the 60-day period after March 31, 2004 are deemed to be outstanding for
the purpose of calculating the percentage of outstanding shares owned by
that person but are not deemed to be outstanding for the purpose of
calculating the percentage owned by any other person.(3)
    
    The amount and nature of the shares beneficially owned are based on the
Schedule 13D amendment filed on September 30, 2003. This amendment was
filed by MatlinPatterson Global Opportunities Partners L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P.,
MatlinPatterson Global Opportunities Partners B, L.P., Links Partners,
L.P., Inland Partners, L.P., Matlin Patterson Global Advisers LLC,
MatlinPatterson Global Partners LLC, MatlinPatterson Asset Management LLC,
MatlinPatterson LLC, Coryton Management Ltd., Mark. R. Patterson, David J.
Matlin, Arthur Coady, Elias Sabo and I. Joseph Massoud. These parties
have reported to us shared voting and dispositive powers with respect to
all shares reported. The number of shares of common stock shown in the
table includes 163,412 shares subject to warrants that are currently
exercisable.(4)
    
    The amount and nature of the shares beneficially owned are based on the
Schedule 13G amendment filed on October 3, 2003. The number of shares of
common stock shown in the table includes 163,411 shares subject to
warrants that are currently exercisable. The reporting parties have
reported sole voting power with respect to 925,569 shares.(5)
    
    The amount and nature of the shares beneficially owned are based on the
Schedule 13G amendment filed on January 9, 2004. Zazove Associates is
investment manager for a number of accounts that hold the Companys Stock.
Zazove Associates has reported sole voting and dispositive power with
respect to all 1,023,337 shares. 9




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(6)
    
    This number includes 44 shares held in the names of Mr. Hunts spouse
and children.(7)
    
    This number includes 20 shares held in the name of Mr. Bramletts spouse. Equity Compensation Plan Information The table below contains information about the Companys compensation
plans as of December 28, 2003 under which equity securities of the Company are
authorized for issuance. Number ofsecuritiesremaining availableNumber of
    
    
    
    
    
    for future issuancesecurities to be
    
    
    
    
    
    under equityissued upon
    
    Weighted-average
    
    compensation plansexercise of
    
    exercise price of
    
    (excludingoutstanding
    
    outstanding
    
    securitiesoptions, warrants
    
    options, warrants
    
    reflected in columnand rights
    
    and rights
    
    (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders(1)
    
    
    689,598
    
    
    $
    13.36
    
    
    
    118,735Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    689,598
    
    
    $
    13.36
    
    
    
    118,735
   (1)
    
    This number includes 13,498 stock options still outstanding under
our 1995 Equity Participation Plan (which will continue to be
exercisable in accordance with their terms even though that plan was
terminated in 2003) and 676,100 stock options granted under our 2003
Equity Incentive Plan. Item 13. Certain Relationships and Related Transactions According to the most recent beneficial ownership reports they had filed
with the Securities and Exchange Commission, each of the following entities and
groups beneficially owned more than 5% of our capital stock as of March 15,
2004:  
    
    a group that includes MatlinPatterson Global Opportunities
Partners L.P., or MatlinPatterson, and Inland Partners, L.P. and
Links Partners, L.P., two affiliated entities that we sometimes
refer to collectively as Inland/Links;
    
    Amalgamated Gadget, L.P., as investment manager for R2
Investments, LDC; and
    
    Zazove Associates, LLC, as investment manager for a number of
individuals and entities (including National Union Fire Insurance
Company of Pittsburgh, PA, which itself holds more than 5% of our
capital stock) that we refer to collectively as Zazove. MatlinPatterson,
Inland/Links, R2 Investments and Zazove were part of the
group of noteholders that participated in our financial restructuring in April
2003. MatlinPatterson and Inland/Links also participated in the financial
restructuring in their role as senior lenders. Note Exchange.In the restructuring, we issued shares of our common stock
and Series B preferred stock to the participating noteholders in a privately
negotiated exchange for their 5.75% notes. Each of the 10




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shares of Series B preferred stock we issued in the exchange has since
been converted into four shares of our common stock. Taking this conversion
into account, we issued to the participating noteholders a total of 5,015,349
shares of our common stock, which represents approximately 82% of the voting
power of our outstanding voting stock. Of this total, we issued 1,384,330
shares of common stock to MatlinPatterson and 692,167 shares of common stock to
each of Inland Partners and Links Partners. This resulted in the group
consisting of MatlinPatterson, Inland/Links and their affiliates beneficially
owning approximately 45.4% of the voting power of our outstanding capital stock
(excluding shares of our common stock underlying warrants issued to them as
senior lenders in connection with the amendment of our senior revolving credit
facility, as described below). We issued 876,649 shares of common stock to R2
Investments, which together with shares obtained outside the restructuring
resulted in Amalgamated Gadget beneficially owning approximately 15.2% of the
voting power of our outstanding capital stock (excluding shares of our common
stock underlying warrants it holds in its role as a senior lender). We issued
a total of 942,636 shares of common stock to Zazove, which together with shares
obtained outside the restructuring resulted in Zazove beneficially owning 16.8%
of our capital stock. In the restructuring, we also issued a total of 91,468 shares of common
stock to a group that includes SC Fundamental Value Fund, L.P. and SC
Fundamental Value Fund BVI, Ltd., affiliated entities that we refer to
collectively as SC Fundamental Value. SC Fundamental Value owned more than 5%
of our capital stock prior to the restructuring, but the aggregate issuances of
our capital stock in the restructuring resulted in SC Fundamental Value
beneficially owning less than 5% of any class of our capital stock after the
restructuring. Reconstitution of Board.In connection with the note exchange, we agreed
to reconstitute our board of directors to provide for seven members. The
participating noteholders designated two of these seven directors, Mr. Pechock
and Mr. Sabo, prior to the exchange. Mr. Pechock is a partner of
MatlinPatterson, and Mr. Sabo is a partner of The Compass Group International
LLC, which is an affiliate of Inland/Links. In addition, Mr. Sabo is part of
the group that shares investment authority with respect to the shares of our
capital stock issued in the restructuring to MatlinPatterson and Inland/Links. As permitted by the agreement that governed our restructuring, the
participating noteholders also designated I. Joseph Massoud to attend meetings
of our board in a non-voting observer capacity. Mr. Massoud is also a partner
with The Compass Group International LLC. The restructuring agreement entitles
Mr. Pechock to designate a board observer as well. Amendments to Revolving Credit Facility.In order to permit the closing
of the note exchange and to provide for the terms on which our existing senior
lenders would continue to finance our working capital needs, we executed
definitive agreements with the existing senior lenders for amendments to our
existing senior revolving credit facility. As part of these amendments, we issued common stock purchase warrants to
the senior lenders entitling them to purchase a total of 769,001 shares of
common stock, equal to 10% of the outstanding common stock on a fully diluted
basis. These warrants are exercisable in whole or part over a 10-year period,
and their current exercise price is $7.8025 per share (which was based on a
stated valuation for our equity of $60 million). MatlinPatterson and
Inland/Links each received 163,412 of these warrants. Since the restructuring,
MatlinPatterson and Inland/Links have sold to R2 Investments portions of their
interest in our debt under the revolving credit facility, together with one
half of their warrants (for 163,412 shares in the aggregate). Registration Rights Agreement.In connection with the restructuring, we
entered into an agreement with each of our senior lenders and each of the
former noteholders participating in the note exchange, 11




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including MatlinPatterson, Inland/Links and R2 Investments, to provide
them with registration rights with respect to the following shares of our
common stock:  
    
    shares issued in the note exchange;
    
    shares acquired upon conversion of the Series B preferred
stock issued in the note exchange; and
    
    shares acquired upon exercise of the warrants issued to the
senior lenders in connection with the amendments to our senior
revolving credit facility. Amendments to Stockholder Rights Plan.In connection with the
restructuring, we also amended and restated the stockholder rights plan that
governs the terms of preferred share purchase rights that currently accompany
our common stock. The amendments included, among other things, an additional
exception to the definition of an Acquiring Person that precludes each of
MatlinPatterson, Inland/Links, Amalgamated Gadget and Zazove from becoming an
Acquiring Person. In addition, the stockholder rights plan was amended to include a
tag-along right for the benefit of any holder (including certain holders of
more than 2% acting together as a group) of 5% or more of our voting stock.
This tag-along right entitles each 5% holder (or group) to participate pro
rata, for the same amount and form of consideration and otherwise on
substantially the same terms and conditions, in any transfer by any holders of
20% or more of our voting stock. Based on their current holdings of our
capital stock, each of MatlinPatterson, Inland/Links, Amalgamated Gadget and
Zazove could exercise this tag-along right. Amendments to Bylaws and Charter.As a result of changes to our bylaws we
adopted in connection with the restructuring, our significant holders
(currently only the group that includes MatlinPatterson and Inland/Links)
together will have the power to designate, either directly or through a
committee including members of our board of directors that they have previously
designated, up to six nominees for election to our board of directors (at least
four of whom must qualify as independent directors under applicable exchange
rules and listing standards) and two board observers. The bylaws, as amended,
are an exhibit to our annual report on Form 10-K for the 2003 fiscal year. We also agreed in connection with the restructuring to propose a number of
changes to our certificate of incorporation for adoption by our stockholders.
The stockholders adopted these changes at our 2003 annual meeting, and we have
filed a restated certificate of incorporation that implements them. The
changes benefit holders of a significant amount of our capital stock,
including MatlinPatterson, Inland/Links, Amalgamated Gadget and Zazove. You
can find a description of the changes in our definitive proxy statement for the
2003 annual meeting, and our restated certificate of incorporation is an
exhibit to this annual report on Form 10-K. Item 14. Principal Accountant Fees and Services Audit Fees PricewaterhouseCoopers LLP billed us the following amounts in aggregate
fees for fiscal year 2003 and 2002 audit services, the review of the financial
statements included in our quarterly reports on Form 10-Q during those years
and the services that are normally provided by them in connection with our
statutory and regulatory filings: 2003  $259,875
    
    
    2002  $285,000
 12




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Audit-Related Fees PricewaterhouseCoopers billed us the following amounts in aggregate fees
for fiscal years 2003 and 2002 for assurance and related services, other than
those described above under -Audit Fees, that are reasonably related to the
performance of the audit or review of our financial statements: 2003  $26,320
    
    
    2002  $81,685
 The services provided under this category included restructuring advisory
services, audits of employee benefits plans, accounting advisory services and a
review of the Companys information technology controls. Tax Fees For 2003 and 2002, PricewaterhouseCoopers billed us the following amounts
in aggregate fees for tax compliance, tax advice and tax planning services: 2003  $573,781
    
    
    2002  $402,954
 All Other Fees Aggregate fees billed for all other audit-related services rendered by
PricewaterhouseCoopers for fiscal years 2003 and 2002 were: 2003  $ 
    
    
    2002  $ 
 All of the fees listed above
incurred after May 2003 were pre-approved by our Audit Committee. Pre-Approval of Services by Independent Auditors As required by SEC regulations, the Audit Committee has a pre-approval policy
that all audit and non-audit services provided to the Company by our
independent auditors are approved directly by the Audit Committee in advance.
The policy mandates that all audit and non-audit services, including tax
compliance, tax planning and other advisory services, be submitted to the Audit
Committee for pre-approval, along with specific information regarding the
proposed services and fees. The Audit Committee may form and delegate this
authority to subcommittees consisting of one or more Audit Committee members,
including the authority to grant pre-approvals of audit and permitted non-audit
services, provided the decisions of such subcommittee to grant pre-approvals
shall be presented to the full Audit Committee at its next meeting. The Audit
Committee is furnished with periodic reports identifying the spending for
approved services. The Audit Committee will consider whether the services to be performed are
consistent with the SECs rules on auditor independence. The Audit Committee
will also consider whether the independent auditor may be best positioned to
provide the most effective and efficient service, for reasons such as
familiarity with the Companys business, people, accounting systems, and other
factors, and whether the service might enhance the Companys ability to manage
or control risk or improve audit quality. All such factors will be considered
as a whole, and no one factor is necessarily determinative. 13




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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 26, 2004. VENTURI PARTNERS, INC.By:
    
    /s/ Larry L. EnterlineLarry L. Enterline
Chief Executive Officer
 14