SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                 [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 2000

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-20743

                             OPEN PLAN SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

                Virginia                                         54-1515256
      (State or Other Jurisdiction                            (I.R.S. Employer
   of Incorporation or Organization)                         Identification No.)

    4299 Carolina Avenue, Building C
           Richmond, Virginia                                       23222
(Address of Principal Executive Offices)                         (Zip Code)

                                 (804) 228-5600
              (Registrant's Telephone Number, Including Area Code)

           Securities registered under Section 12(b) of the Act: None.

              Securities registered under Section 12(g) of the Act:

                           Common Stock, no par value

         Indicate  by check  mark  whether  the  registrant:  (1) has  filed all
reports  required to be filed by Section 13 or 15(d) of the  Exchange Act during
the past 12 months (or for 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         No   X
                                                               -----      -----

         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. [ ]

         Based on the closing  sales  price for the Common  Stock as reported by
the Nasdaq Stock Market on May 11, 2001 the aggregate market value of the Common
Stock held by non-affiliates of the registrant was $1,343,082.

         The number of shares of Common Stock outstanding as of May 11, 2001 was
4,337,391.



<PAGE>


                                TABLE OF CONTENTS


                                     PART I
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>                                                                                          <C>
Item 1.      Business......................................................................   1

Item 2.      Properties....................................................................   7

Item 3.      Legal Proceedings.............................................................   8

Item 4.      Submission of Matters to a Vote of Security Holders...........................   8


                                     PART II

Item 5.      Market for Registrant's Common Equity and Related Stockholder Matters.........   9

Item 6.      Selected Financial Data.......................................................  11

Item 7.      Management's Discussion and Analysis of Financial Condition
               and Results of Operations...................................................  12

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk....................  23

Item 8.      Financial Statements and Supplementary Data...................................  24

Item 9.      Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure......................................  46


                                    PART III

Item 10.     Directors and Executive Officers of the Registrant............................  47

Item 11.     Executive Compensation........................................................  49

Item 12.     Security Ownership of Certain Beneficial Owners and Management................  53

Item 13.     Certain Relationships and Related Transactions................................  56

                                     PART IV

Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K...............  57

</TABLE>


<PAGE>


                                     PART I

ITEM 1.      BUSINESS

         Open Plan Systems, Inc. (the "Company") was incorporated under the laws
of  the   Commonwealth   of  Virginia  on  September   11,  1989.   The  Company
remanufactures  and markets modular office Work Stations.  The Company  operates
remanufacturing facilities in Richmond, Virginia and Lansing, Michigan.

The Office Furniture Industry

         The trend in the office  furniture  industry  for the past 25 years has
been away from a simple desk and file  design to a  sophisticated  Work  Station
design because of the  flexibility  and  productivity  advantages that such Work
Stations provide.  Work Stations have become more  sophisticated as the usage of
computers and telecommunications equipment has increased in modern offices.

         The Company competes in the office furniture industry with national and
regional  manufacturers  of new office  furniture  and with  local and  regional
remanufacturers of used office furniture. Steelcase, Inc. ("Steelcase"),  Herman
Miller,  Inc. ("Herman  Miller") and Haworth,  Inc.  ("Haworth")  constitute the
dominant manufacturers,  collectively  representing  approximately two-thirds of
the installed base of Work Stations.  Each of these  manufacturers has created a
unique system for  connecting  panels,  power and  telecommunications  raceways,
resulting  in  virtually  no  interchangeability  between  products of different
manufacturers.  Each  manufacturer's  Work Stations  provide for several hundred
variations.  In  recent  years,  more  sophisticated  telecommunications,  power
distribution  and wire  management  elements have been added to Work Stations as
computer   usage  has  increased  in  offices.   With  respect  to   independent
remanufacturers  of used  Work  Stations,  the  Company  believes  that the vast
majority of such  remanufacturers  are local operations serving a single city or
metropolitan area from a single sales office.

         Since the  mid-1980s,  end-users  have had four  primary  options  when
considering changes in their existing Work Stations:  (i) acquire upgraded power
components,  new fabric and panel trim from the Work Station  manufacturer to be
retrofitted on existing Work Stations,  frequently during  installation in a new
facility;  (ii) acquire new Work  Stations from a  manufacturer  or dealer while
disposing of existing furniture and Work Stations to a broker or remanufacturing
company;  (iii) acquire  remanufactured Work Stations while disposing of the old
furniture and Work Stations to brokers or the  remanufacturer;  and (iv) acquire
"as is" Work Stations.

         The business of remanufacturing  Work Stations grew steadily during the
1990's and is expected  by the  Company to  continue to grow in the 2000's.  The
Company  believes this growth is principally due to the greater  availability of
high quality  remanufactured Work Stations at prices below manufacturers' retail
list prices for new Work Stations,  thereby providing end-users with substantial
value. In addition, the growth of the remanufacturing business has been assisted
by the increased  availability of used Work Stations for  remanufacturing.  Used
Work  Stations  have become more  readily  available  in recent  years due to an
increased base of installed Work Stations and corporate  events such as mergers,
acquisitions,   divestitures,  downsizings  and  relocations.  The  adoption  of
recycling  programs  or  policies  by  businesses  has also been a major  factor
leading to increased demand for remanufactured Work Stations.

Overview of the Company's Operations

         The Company's  primary business is the  remanufacture of modular office
Work Stations. The Company purchases used Work Stations from end-users,  brokers
and dealers and  transports  the Work  Stations to its  facilities  in Richmond,
Virginia and Lansing, Michigan. The Work Stations are



                                       1
<PAGE>

disassembled, inventoried by usable component parts and stored. The Company then
restores  the used Work  Stations  through the  remanufacturing  process to meet
specific customer needs.  Remanufacturing typically includes sanding,  painting,
laminating, reupholstering and updating electrical components.

         The  Company's  design  staff works with  customers  to optimize use of
available  office space through  customized  space plans.  Customers are able to
choose from among several  colors of paint,  over 300 unique  laminates and over
1,000  different  fabrics.  After the initial sales call, the Company  responds,
typically  within  72 hours,  to the  customer's  needs  with a  proposal  which
includes a computer  aided design of the space,  the number of Work Stations and
the cost.  The Company has the ability to generate  proposals at the  customer's
site using a personal computer or, in the case of complex designs, proposals are
developed by the Company with its group of in-house  designers.  Once a purchase
order is received, the fabric selected by the customer is applied to the panels,
and the various components of the Work Stations are assembled for shipping.  The
Work  Stations  sold by the  Company's  direct sales force are  installed at the
customer's offices by the Company's  employees or by approved outside installers
providing  the Company  with  control  over the entire  process.  The  Company's
inventory of disassembled  component parts generally permits shipping within two
to four weeks of  receiving a purchase  order,  depending on the product and the
selected fabrics.  The Company believes that its ability to provide high quality
Work  Stations  at  discounted  prices,  coupled  with its  emphasis on superior
customer  service  through  its design  staff and  Company  trained or  approved
installers,  gives it a  competitive  advantage  over  manufacturers  and  other
remanufacturers of Work Stations.

         The  Company's  Richmond,  Virginia  and Lansing,  Michigan  facilities
include all of the equipment required to remanufacture Work Stations,  including
closed and open painting and drying booths as well as sanding,  woodworking  and
reupholstering  equipment.  Plant  layout has been  designed to  facilitate  the
efficient flow of materials and streamline the  remanufacturing  process through
disassembly,  storage,  remanufacturing  and shipping.  Quality  control for the
remanufactured  products  occurs at various  stages  during the  remanufacturing
process,  including the final quality control verifications at shipment and upon
installation.

         The Company  sells Work  Stations  primarily  through 15  Company-owned
direct  sales  offices.  The  Company  believes  that  each  of the  50  largest
metropolitan  areas  of the  United  States  will  support  a sales  office.  In
marketing  its  products,  the Company  utilizes  several  innovative  programs,
including its asset  banking  program,  which allows  customers to trade-in used
Work Stations in exchange for a credit towards future  purchases.  Additionally,
the Company sells products  through certain  authorized  dealers  throughout the
country.

Products

         The Company's  principal  products are  remanufactured  Herman  Miller,
Haworth and Steelcase Work Stations. The Company first began remanufacturing and
selling  remanufactured  Steelcase  Work  Stations  during 2000 with the product
rollout at NeoCon, a trade show, in June, 2000.

         The  Company   believes  that  its  Work  Stations  offer   significant
advantages over the traditional desk,  free-standing  file and permanent drywall
office layout.  Work Stations enable  businesses to house more people in a given
area, while still providing  adequate amounts of space per person,  because Work
Stations  combine moveable panels,  work surfaces,  storage units,  lighting and
electrical  distribution  into a single  integrated unit. The end result is less
square feet of office space per worker and, therefore,  lower facility costs per
employee.

         Work Stations often are acoustically treated to provide  conversational
privacy  required by closer  quarters.  Because Work Stations  usually are lower
than ceiling height, lighting, heating, ventilation and



                                       2
<PAGE>

air conditioning are not confined to individual  spaces,  allowing  distribution
among more  workers  which  reduces  building  operating  costs.  Work  Stations
incorporate  electrical  circuitry  necessary to operate  today's  computers and
telecommunications  equipment.  The  Company's  Work  Stations  meet the  safety
standards established by Underwriters  Laboratories.  The Company believes it is
one of only a very few remanufacturers  whose Work Station components are listed
with Underwriters Laboratories.

         The Company  customizes its Work Stations to  accommodate  specific job
functions.  The Company offers its Work Stations with or without power access in
a variety of panel  heights,  widths,  paint colors and fabrics.  Work surfaces,
drawer and file pedestals,  storage  components and accessories are offered with
various size and finish options.

         The core of the Work  Station is a panel two inches  thick with  widths
varying  from 12 inches to 60 inches.  Panel  heights  vary from 34 inches to 96
inches.  The panel  frame may be  covered  with a  laminated  surface  or,  most
frequently,  fabric over an acoustical batting to which removable, slotted steel
side  rails  and  top  caps  are   attached  to   accommodate   the   customized
interconnection  of panels and the hanging of work surfaces or other components.
Electrical  outlets and space for telephone and computer  cables are provided by
removable  raceways of metal and plastic  attached at the base of the panel. The
Company also sells certain products which allow telephone and computer cables to
be mounted at worksurface height.

         In addition to Work Stations, the Company also sells new office chairs,
desks and other office furniture products purchased from pre-selected  strategic
partners.  These products typically are drop shipped directly from the vendor to
the  Company's  customer,  with the Company  rarely  taking  possession of these
products.  The Company continues to develop  relationships and partnerships with
its vendors to enhance the quality and cost-effectiveness of these products.

Inventory

         The number of installed  Work Stations has increased  steadily over the
past 25 years and is now  believed  to exceed 30 million.  The gradual  aging of
this installed base of Work Stations has resulted in the increased  availability
of used Work  Stations  for  remanufacturing.  The  Company  continuously  seeks
opportunities  to  purchase  used Work  Stations  throughout  the United  States
through  competitive bids or private  negotiations  with end-users,  brokers and
dealers.

         Manufacturers of new Work Stations have developed  trade-in programs to
assist their  dealers in  encouraging  their  customers  to purchase  their most
current  products.  Trade-ins also have been used to entice customers of dealers
and  manufacturers  to  trade-in  a  competitor's  Work  Stations  for new  Work
Stations.  While each  manufacturer  has a slightly  different  approach  to the
trade-in  market,  these  manufacturers  typically  contact a list of brokers or
remanufacturers,  such as the Company, to solicit the highest bid for the entire
inventory.

         At the time the Company purchases  inventory,  it disassembles the Work
Stations and ships the  disassembled  Work Stations to its facilities  where the
Company determines whether the specific parts should be cleaned and sold as part
of  its  "As  Is"  sales  program  or  stored  as  inventory  and   subsequently
remanufactured  and sold.  The  Company  strives  to ship all of its  customers'
orders within four weeks or less. The Company has initiated a two week lead time
program to accommodate shorter lead times from customers that will use a limited
selection of fabrics and laminates. The Company also has the ability to purchase
certain  strategic  new parts and  accessories  which are in short supply in the
used furniture market,  thereby eliminating the need to purchase additional Work
Stations for these specific parts.  The Company believes its ability to acquire,
on an opportunistic basis, used Work Stations at attractive prices



                                       3
<PAGE>

and hold them for  future  sale  gives it a  competitive  advantage  over  other
remanufacturers with less capital.

Distribution

         Sales Offices. The Company currently operates 15 sales offices, located
in the  metropolitan  areas of Richmond,  Washington D.C.,  Atlanta,  Nashville,
Chicago, New York, Philadelphia, Raleigh, Norfolk, Cincinnati, Lansing, Detroit,
Indianapolis,  Boston and Mexico City,  Mexico.  The Company's  sales offices in
Indianapolis and Mexico City were opened in 2000, and the Company's sales office
in Boston was opened in the first  quarter of 2001.  The Company  believes  that
marketing  and  distributing  its Work  Stations  through a direct  sales  force
located  in  geographically  dispersed  sales  offices  gives  it a  competitive
advantage over independent  remanufacturing  competitors who typically are local
companies  with  limited  sales  and  distribution  capacity  outside  of  their
immediate  market area.  Approximately  90% of the Company's sales  historically
have been made to end-users by the Company's own sales representatives. In 2001,
the Company  intends to continue its focus on improving the  performance  of its
existing sales offices.

         Marketing  and  distributing  its Work  Stations  through its own sales
staff provides the Company with several distinct  advantages.  It eliminates the
costs and additional price mark-up  associated with wholesale  distribution,  it
enables the Company to retain  direct  control and oversight of its products and
the selling  process,  and it permits  the  Company to control  the  delivery of
quality design and installation services to each customer.

         Dealer  Network.  In  addition  to its own  sales  staff,  the  Company
maintains a dealer network in those markets that are not sufficiently  developed
to support a sales office or in larger  markets to supplement the efforts of the
direct  sales  force.  The  dealer  network  allows the  Company to market  Work
Stations on a cost-effective  basis to a larger number of businesses than may be
reached  by  the  Company's  sales  representatives.  Approximately  10%  of the
Company's  sales  historically  have  been made  through  dealers.  The  Company
believes that its limited dealer network  complements  its strategy of expanding
revenues through its own sales offices.  All dealer agreements are non-exclusive
and may be terminated at any time.

         "As Is" Sales. A small but profitable portion of the Company's sales is
made to  brokers,  end-users  and  others  who buy used Work  Stations  from the
Company  on an "as is"  basis.  The  Company's  "As  Is"  program  involves  the
selective  purchase of used Work Stations in good  condition that do not require
substantial repair or other alteration. The "As Is" program appeals to customers
seeking sizable quantities of quality Work Stations at "budget" prices.

Sales and Marketing

         General.  The Company's sales and marketing  strategy relies  primarily
upon offering  quality  products at  competitive  prices and providing  superior
customer service. Each sales office advertises through direct mail,  newspapers,
business magazines and journals.  The Company often uses booth displays at trade
shows for national  organizations  of purchasing  managers,  facility  managers,
interior designers,  architects and local business groups. The Company is firmly
committed  to  advertising  as the  Company's  primary  marketing  strategy  and
constantly  re-evaluates  the  most  efficient  means  of  reaching  prospective
customers.

         The  Company's   marketing  also   emphasizes  its  commitment  to  the
environment. Through its remanufacturing process, the Company reuses or recycles
several  million  pounds  of office  systems  furniture  each  year  that  might
otherwise be deposited  in  landfills.  Some  companies  have adopted



                                       4
<PAGE>

recycling  policies  or  programs  that  require  those  businesses  to purchase
recycled products in varying  quantities.  Because the Company's  remanufactured
Work Stations are a recycled product, the Company may have a marketing advantage
over manufacturers of new Work Stations.

         Asset Banking.  The Company developed its Asset Banking program in 1994
as a means to offer additional  services to larger middle market and Fortune 500
businesses who  reconfigure,  dismantle and warehouse  large  quantities of Work
Stations  as an ongoing  part of their  operations.  The Asset  Banking  program
allows  businesses to trade-in used Work Stations by "depositing"  them with the
Company in exchange for a "credit"  toward  future  purchases  of the  Company's
remanufactured Work Stations. Work Stations "deposited" by customers become part
of the Company's  inventory of used Work  Stations  that can be  remanufactured.
When  a  business  with  a  "credit"   chooses  to  purchase  Work  Stations  at
then-prevailing prices, the customer can make a complete or partial "withdrawal"
from its account to pay for the Work  Stations.  The effect of the program is to
make a customer's used Work Stations  renewable assets.  The program  eliminates
the customer's inventory, storage and maintenance costs for Work Stations not in
use,  while at the same  time  positioning  the  Company  for a future  sale and
increasing the Company's  inventory which can be immediately  remanufactured and
sold. The Company also provides value-added services, such as design and project
management,  without charge to the customer to enhance the attractiveness of the
program.  The Company is currently  able to offer both Herman Miller and Haworth
Work Stations in the program and anticipates  adding  Steelcase Work Stations to
the program.

         Government  Services  Administration.   The  United  States  Government
Services  Administration ("GSA") in 1996 approved the Company's inclusion on the
New  Introductory  Schedule as a distributor  of Work Stations and other related
products and services to the federal government. This has enabled the Company to
sell its  remanufactured  Work  Stations  to the federal  government  as well as
develop a previously  untapped  source of supply  through  trade-ins  and "asset
banking." The GSA program was a solid  contributor  to 2000 sales volume and the
Company believes that it can continue to expand this program.

         Rental Program.  The Company's  rental program offers an alternative to
ownership of Work  Stations.  Under the rental  program,  the Company rents Work
Stations  for a minimum  term of six months.  Rates  charged by the Company vary
with the term of the rental,  with higher rates being charged for shorter terms.
Rent payments  typically are due monthly from  customers  during the term of the
rental.  Upon  expiration  of the  term of the  rental,  the Work  Stations  are
returned to the Company and can be rented again or remanufactured  and sold. The
rental  program is an attractive  alternative  for those  customers with capital
spending  constraints.  In addition,  customers  who wish to evaluate  long-term
furniture  requirements are able to defer a commitment to purchase Work Stations
while meeting their  short-term  requirements for office  furniture.  The rental
program has not contributed  significantly to the Company's past revenues due to
the limited number of rentals which have occurred to date under the program.

Customers

         The  Company's  customers  range from small  businesses  to Fortune 500
companies.  The Company is not dependent upon any single  customer or any single
group of customers for a significant  portion of its sales. In 2000, the largest
customer accounted for less than 5% of sales. The loss of any one customer would
not have a material adverse effect on the Company.

Competition

         The Company  experiences  intense  competition  in both the purchase of
used Work Stations and the sale of remanufactured and "as is" Work Stations.  In
purchasing used Work Stations, the Company



                                       5
<PAGE>

competes with manufacturers,  dealers,  brokers and other  remanufacturers.  The
competition between  remanufacturers,  manufacturers and dealers generally takes
place in  connection  with  trade-ins by end-users of used Work Stations for new
Work  Stations.  Brokers  typically  purchase  used Work  Stations for resale to
end-users   and   customers   which  may  include  the   Company,   while  other
remanufacturers  generally purchase Work Stations for their own  remanufacturing
activities.

         The Company also  competes  with  manufacturers,  dealers,  brokers and
other  remanufacturers  in the  sale of its  remanufactured  and  "As  Is"  Work
Stations.  Competition is primarily  based upon price,  delivery  time,  design,
quality  and  customer  service.  Certain  manufacturers,   such  as  Steelcase,
remanufacture  their own brand of used Work  Stations  for resale to  customers.
These   manufacturers  and  their  dealers  are  able  to  offer  both  new  and
remanufactured  Work  Stations  to  customers.  The  Company  believes  it has a
competitive  advantage over such manufacturers and other  remanufacturers due to
its direct sales force,  pricing,  customer  service and  commitment  to reusing
product.  However,  manufacturers  and dealers of new Work Stations have certain
competitive advantages including established distribution channels and marketing
programs,  substantial financial strength,  long-term customers and ready access
to  component  parts.  Manufacturers  also can sell  new Work  Stations  at very
substantial discounts which reduces the Company's pricing advantage.

         The Company believes it is the largest  independent  remanufacturer  of
Work  Stations  in the  United  States  based on  gross  revenues.  Unlike  most
independent  remanufacturers,  which are typically  local  operations  serving a
single city or metropolitan area from a single sales office, the Company is able
to compete  effectively in many markets through its distribution  channels.  The
Company also believes that its  remanufacturing  services are more comprehensive
than the services provided by most other  remanufacturers.  Many remanufacturers
provide minor repair services, but lack the personnel,  equipment and facilities
necessary to remanufacture Work Stations  completely.  The Company's  production
facilities include all of the equipment required to produce  remanufactured Work
Stations including  sanding,  painting,  drying,  woodworking and reupholstering
equipment.

Intellectual Property

         The  Company  is the owner of a service  mark for "Open  Plan  Systems"
registered with the United States Patent and Trademark  Office.  The Company has
applied for trademarks on  "Sustainable  Office  Systems,"  "Sustainable  Office
Services" and "Common Sense at Work."

         Original  equipment  manufacturers have obtained United States' patents
on certain  component parts and design and  manufacturing  processes  associated
with  their  own  Work  Stations.   Management  of  the  Company   believes  its
remanufacturing  of Work  Stations  does not  infringe any patents held by these
manufacturers.  However, there can be no assurance that infringement claims will
not be asserted against the Company.  If such claims were asserted,  the Company
could incur significant  costs and diversion of resources  defending such claims
and, in the event the Company did not prevail in its defense,  the Company could
incur  substantial  damages  that could have a  material  adverse  effect on the
Company's financial condition and results of operations.

         The Company intends to continue to review existing  patents  applicable
to Work Stations in the ordinary course of its business.

Seasonality and Backlog

         The  Company  currently  has no  discernable  pattern  of  seasonality.
Because the Company typically ships Work Stations within four weeks of an order,
a  substantial  portion of the  Company's  revenue in each quarter  results from
orders  placed by customers  during that  quarter.  As a result,  the



                                       6
<PAGE>

Company's  revenues and profits are difficult to predict and may fluctuate  from
quarter to quarter.  The Company typically does not have any significant backlog
of customer  orders  because it generally  ships  products  within four weeks of
receipt of an order.

Employees

         As of December 31, 2000, the Company had 227 full time  employees.  The
Company  also  had two  part  time  employees.  The  Company  believes  that its
continued  success depends on its ability to attract and retain highly qualified
personnel.  None  of  the  Company's  employees  are  covered  by  a  collective
bargaining  agreement.  The Company considers its relations with employees to be
good.

Government Regulation

         The Company's operations are subject to a variety of federal, state and
local  environmental  laws and  regulations  including  those  which  limit  the
discharge,  storage, handling and disposal of hazardous materials. The Company's
principal  environmental  concerns relate to the handling and disposal of paints
and solvents.  Management  believes  that the Company is in material  compliance
with applicable federal, state and local environmental  regulations.  Compliance
with  these  regulations  has not in the past  had any  material  effect  on the
Company's earnings,  capital expenditures or competitive position;  however, the
effect  of such  compliance  in the  future  cannot be  determined.  Regulations
implementing  the federal Clean Air Act, as amended in 1990, may require reduced
emissions of volatile organic compounds and hazardous air pollutants,  including
certain emissions resulting from the Company's use of paints and solvents in the
remanufacturing  process.  As a result,  the  Company may be required to install
emission  controls or to institute changes in its  remanufacturing  processes in
order to comply with these reduced emission  standards.  The furniture  industry
and its suppliers  are  attempting  to develop  water-based  paint and finishing
materials to replace commonly-used organic-based paints and finishes which are a
major source of regulated  emissions.  The Company  cannot at this time estimate
the impact of these new standards on the Company's operations and future capital
expenditure requirements or estimate the cost of compliance.

         The  Company's  operations  are also  governed by laws and  regulations
relating to work-place  safety and worker health,  principally the  Occupational
Safety and Health Act and  accompanying  regulations  and various state laws and
regulations.  The Company does not believe that future  compliance  with current
laws and  regulations  will have a  material  adverse  effect  on its  financial
condition or results of operations.

Insurance

         The Company maintains liability insurance policies covering a number of
risks,   including   business   interruption,    property,   commercial   crime,
comprehensive   general  liability  and  workers   compensation  and  employer's
liability  insurance.  The  Company  believes  that its  insurance  coverage  is
adequate.


ITEM 2.      PROPERTIES

         The Company  leases  180,000  square  feet of space at its  facility in
Richmond,  Virginia and 91,000  square feet of space at its facility in Lansing,
Michigan.  The  Richmond  lease  expires in July  2002.  The  Company  subleases
approximately  36,000  square feet at its Richmond  facility.  The Lansing lease
expired in September 2000, and the Company now leases its Lansing  facility on a
month-to-month  basis pending completion of a new 70,000 square foot facility in
Lansing. The new facility is expected to be completed



                                       7
<PAGE>

in the Summer of 2001. The new facility is being financed by $2,500,000 variable
rate limited obligation revenue bonds (Open Plan Systems, Inc. Project),  Series
2000 of the Michigan Strategic Fund. The bonds will be redeemed on the following
schedule:  $100,000 on June 1st in years 2001 through 2007, $200,000 on June 1st
in years 2008 through 2013, and $300,000 on June 1st in years 2014 and 2015.

         The Company also has other leases for its sales offices  throughout the
jurisdictions in which it operates.  The Company owns  substantially  all of its
equipment,  including office and manufacturing  equipment.  The Company believes
that its properties are maintained in good operating  condition and are suitable
for their purposes.


ITEM 3.      LEGAL PROCEEDINGS

         There are no material  pending  legal  proceedings,  other than routine
litigation  incidental  to the  business,  to which  the  Company  is a party or
pertaining to any of its properties.


ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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























                                       8
<PAGE>

                                     PART II

ITEM 5.      MARKET  FOR  REGISTRANT'S  COMMON  EQUITY AND  RELATED  STOCKHOLDER
             MATTERS

         Market for Common Stock.  The Company's Common Stock has been listed on
the Nasdaq National Market under the symbol "PLANE" since April 26, 2001.  Prior
to that time,  the Common Stock was listed on the Nasdaq  National  Market under
the symbol "PLAN."

         On April 24, 2001,  the Company  received a Nasdaq Staff  Determination
notifying the Company that the Common Stock is scheduled to be delisted from The
Nasdaq Stock Market. The Staff  Determination was based on the Company's failure
to file its Annual Report on Form 10-K for the year ended December 31, 2000 in a
timely manner, as required by Nasdaq's continued listing requirements.  On April
30,  2001,  the Company  requested  a written  hearing  before a Nasdaq  Listing
Qualifications Panel to review the Staff Determination and to stay the delisting
pending the issuance of a written determination  following the hearing. In order
to more fully  address  the issues  raised by the Staff,  however,  the  Company
subsequently requested that the hearing be changed to an oral hearing to be held
on May 25, 2001.  The Staff  granted the Company's  request.  As a result of the
failure to file the Form 10-K in a timely manner,  Nasdaq has appended an "E" to
the  Company's  trading  symbol,  indicating  a  lack  of  compliance  with  the
Securities and Exchange Commission requirements.

         On May 3, 2001, the Company received a notification from the Staff that
its Common  Stock had failed to maintain a minimum  market value of public float
of  $5,000,000  over the  previous 30  consecutive  trading  days as required by
Nasdaq's continued listing  requirements.  The notification provided the Company
until  August 1, 2001 to regain  compliance  with this  requirement.  On May 15,
2001, the Company received further  notification  from the Staff that its Common
Stock had  failed to  maintain  a minimum  bid price of $1.00 per share over the
previous 30 consecutive  trading days as required by Nasdaq's  continued listing
requirements.  The  notification  provided the Company  until August 13, 2001 to
regain compliance with this requirement.  The Company does not currently satisfy
either of these requirements.

         In the event of  delisting  from The Nasdaq Stock  Market,  the Company
expects  that the Common Stock would be eligible for trading on the OTC Bulletin
Board  provided  the Company is current  with  respect to its  filings  with the
Securities  and Exchange  Commission;  however,  there can be no assurance  that
there  will be a market  maker for the  Company's  securities  or that an active
market will develop or be maintained on the OTC Bulletin Board.

         The following table shows, for the periods indicated,  the high and low
closing  sales  prices per share for the Common  Stock as reported by the Nasdaq
National Market.

Calendar Year                                                     High      Low
-------------                                                     ----      ---

     1999
         First Quarter ..........................................$ 2.92   $ 2.12
         Second Quarter..........................................$ 3.13   $ 2.25
         Third Quarter...........................................$ 2.50   $ 2.00
         Fourth Quarter..........................................$ 2.44   $ 2.00



                                       9
<PAGE>

     2000
         First Quarter ..........................................$ 2.88   $ 1.28
         Second Quarter..........................................$ 2.19   $ 1.63
         Third Quarter...........................................$ 2.13   $ 1.50
         Fourth Quarter..........................................$ 2.00   $ 1.50

         As of May 11, 2001,  there were  approximately  83 holders of record of
the Company's Common Stock.

         Dividend Policy.  Since the Company's  initial public offering in 1996,
the Company has not declared or paid any cash dividends or  distributions on its
common stock. The Company currently intends to retain earnings of the Company to
support  operations  and to finance  expansion and therefore does not anticipate
paying  cash  dividends  on the  Common  Stock  in the  foreseeable  future.  In
addition,  the  Company's  debt  agreements  prohibit  the payment of  dividends
without the consent of the lender. See "Management's  Discussion and Analysis of
Financial  Condition and Results of Operation - Liquidity and Capital Resources"
with  respect to the  Company's  ability to pay  dividends.  The payment of cash
dividends  in the future  will  depend  upon such  factors as  earnings  levels,
capital requirements, the Company's financial condition and other factors deemed
relevant by the Board of Directors.


















                                       10
<PAGE>

ITEM 6.      SELECTED FINANCIAL DATA

         The following  table presents  selected  financial data for the Company
for each of the five years in the period ended  December  31,  2000.  All of the
selected  financial  data are  extracted  from the Company's  audited  financial
statements and should be read in conjunction  with the financial  statements and
the notes thereto included under "Item 8. Financial Statements and Supplementary
Data" of this Form 10-K.
<TABLE>
<CAPTION>
Year Ended December 31                                   2000         1999         1998          1997         1996
----------------------                                   ----         ----         ----          ----         ----
(in thousands, except per share amounts)
<S>                                                    <C>           <C>          <C>          <C>            <C>
Statement of Operations Data
Net sales.......................................       $42,675       $35,058      $33,676      $31,968        $22,398
Cost of sales...................................        33,158        24,332       25,765       23,593         15,160
                                                     ------------------------------------------------------------------
Gross profit....................................         9,517        10,726        7,911        8,375          7,238
Operating expenses:.............................
Amortization of intangibles.....................           274           213          275          275             70
Selling and marketing...........................         8,144         7,336        7,220        6,524          3,410
General and administrative......................         3,395         2,529        2,811        2,607          1,584
Arbitration costs...............................           142         1,067            -            -              -
Operational restructuring.......................             -             -        1,290            -              -
                                                     ------------------------------------------------------------------
Total operating expenses........................        11,955        11,145       11,596        9,406          5,064
                                                     ------------------------------------------------------------------
Operating (loss) income.........................        (2,438)         (419)      (3,685)      (1,031)         2,174
Interest expense................................           446           201          236           70            141
Other (income) expense, net.....................            52           (24)          12          (84)          (284)
                                                     ------------------------------------------------------------------
(Loss) income before income taxes...............        (2,936)         (596)      (3,933)      (1,017)         2,317
(Benefit) expense for income taxes (1)..........         1,571        (1,378)           -         (269)           376
                                                     ------------------------------------------------------------------
Net (loss) income (2)(3)........................       $(4,507)         $782      $(3,933)       $(748)        $1,941
                                                     ==================================================================

Pro Forma Data (4)
Pro forma income before income taxes............                                                               $2,317
Pro forma provision for income taxes............                                                                  930
                                                                                                           ------------
Pro forma net earnings..........................                                                               $1,387
                                                                                                           ============
Income (loss) per share.........................       $(1.03)          $.17       $(.86)       $(.17)             --
                                                     ==================================================================
Pro forma net earnings per share................                                                                 $.38
                                                     ==================================================================
Diluted weighted average shares outstanding.....         4,395         4,594        4,582        4,472          3,676
                                                     ==================================================================

Balance Sheet Data
Working capital.................................         4,722         8,229        9,517       11,765         13,272
Total assets....................................        23,332        23,619       20,005       26,314         23,710
Long-term debt .................................           227           163            -            -            304
Shareholders' equity............................        10,803        15,455       15,346       20,043         20,791
</TABLE>
_____________

(1)  The effect of establishing a valuation  allowance  against net deferred tax
     assets in the fourth  quarter of 2000  resulted in a net expense for income
     taxes of approximately $1.6 million. (See Note 8.) See Note 13 of the Notes
     to consolidated financial statements for information on fourth quarter 2000
     adjustments relating to inventory and other items.

(2)  Net  income  for 1999  includes  the  impact of  arbitration  costs of $1.1
     million in connection with a dispute with former officers of the Company.




                                       11
<PAGE>

(3)  Net income for 1999  includes the effect of the  reversal of the  valuation
     allowance against net deferred tax assets of $1.3 million.

(4)  The pro forma income data  reflects a provision  for income taxes as if the
     Company's  earnings had been subject to federal and state income taxes as a
     regular corporation for 1996. Pro forma earnings per common share are based
     on the weighted average common shares outstanding  increased by the 270,000
     shares of common  stock  deemed to be  outstanding,  which  represents  the
     approximate  number of common  shares  deemed  sold by the  Company  at the
     initial  public  offering of $10 per share to fund the final  S-Corporation
     distribution of $2,695,000 to the Company's shareholders.


ITEM 7.      MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND
             RESULTS OF OPERATIONS

Delay in Completion of 2000 Audit

         Reasons  for the Delay.  In the  process  of  preparing  the  Company's
financial  statements  for the year  ended  December  31,  2000,  the  Company's
management and its  independent  auditors  determined that certain balance sheet
accounts,  including,  but not limited to,  inventory,  accounts  receivable and
cash, had not been periodically reconciled to subsidiary records so as to permit
the timely  preparation of year end financial  statements.  The fiscal 2000 year
end closing process and the subsequent time consuming task of reconciling  these
accounts were further complicated by the unexpected  departures of the Company's
Chief  Financial  Officer  and  Controller  in December  2000 and its  Assistant
Controller in March 2001.

         As a result of the Chief Financial Officer and Controller's  departure,
the  Company  was left at year  end  2000  without  the  continuity  customarily
provided by a key member of its financial  management team. The departure of the
Company's Assistant Controller during the process of resolving the recordkeeping
issues and preparing  financial  statements  caused further delay as the Company
then had to recruit and hire two outside  experienced  financial  consultants to
assist in the year end closing process and the preparation of the Company's Form
10-K for the year ended  December  31, 2000.  The absence of employees  familiar
with the Company's  operations,  information  systems,  banking arrangements and
accounting  transactions for the year severely hampered the Company's ability to
quickly address the accounting  deficiencies and to complete  customary year end
closing procedures.

         The various  delays caused by the time  consuming task of resolving the
recordkeeping  issues and by the turnover in financial personnel during the year
end closing  and audit  process led to the filing of the Form 10-K after its due
date. Furthermore,  the Company's Form 10-Q for the three months ended March 31,
2001 has not yet been  filed.  As a result of the late  filing of the Form 10-K,
the Company received a Nasdaq Staff Determination notifying the Company that its
Common Stock was  scheduled to be delisted  from The Nasdaq  Stock  Market.  The
Company has requested a hearing and stayed the delisting until May 25, 2001. For
further  information  on the  delisting  proceedings,  see "Item 5 - Market  for
Registrant's Common Equity and Related Stockholder Matters."

         Accounting   Deficiencies   and   Adjustments.   The  Company's  senior
management  and the Audit  Committee of the Board of Directors have been advised
by the Company's  independent  auditors that because of the lack of  experienced
financial  and  accounting  personnel as a result of the turnover at the Company
and the  Company's  inability to reconcile  accounts in a timely  manner,  there
exists a material  weakness in the Company's  internal  controls and procedures.
Certain  weaknesses in the Company's  inventory  cost  accounting and management
information systems and inventory  procedures also contributed to the accounting
difficulties.



                                       12
<PAGE>

         No evidence of  misappropriation of funds or other malfeasance has been
discovered  by  senior  management  or  financial  consultants  retained  by the
Company.

         During the fourth quarter of 2000, the Company  recorded  charges (on a
pretax  basis) of  approximately  $3.0  million.  The  largest of these  charges
relates to inventory  adjustments  (recorded in cost of sales) of  approximately
$2.4  million  caused by book to  physical  variances  resulting  from  physical
inventory  observations  as  well  as the  write-off  of  certain  obsolete  and
slow-moving inventory items. The remainder of these charges relates to increases
in  the  allowance  for  doubtful  accounts  of  $220,000  as  well  as  various
adjustments  required by year-end accounting  reconciliations and other matters.
The Company has  recorded  these  charges in the fourth  quarter of 2000,  as it
cannot determine the amount of charges applicable to preceding interim periods.

         In connection  with the fiscal 2000 year end closing  process,  certain
weaknesses  were  discovered  in the  Company's  inventory  systems  and related
procedures that may require  replacement or upgrading of the Company's inventory
cost accounting and management  information  systems and additional  training of
personnel.  These system and procedural weaknesses led to the Company performing
an  additional  physical  inventory  count  at  March  31,  2001  to  assist  in
determining year end inventory balances.

         Also, the Company discovered that monthly cash account  reconciliations
had not been  adequately  performed  during 2000.  In addition,  the Company had
changed banks and bank accounts twice during the year, and the linkages  between
the  Company's   general  ledger  cash  accounts  and  its  bank  accounts  were
insufficiently structured. Accordingly, a $269,000 aggregate cash adjustment was
recorded as a part of the $3.0 million in charges taken in the fourth quarter of
2000. The Company has performed cash account  reconciliations  for the months of
January, February and March 2001.

         Remedial  Actions.  The Board of Directors of the Company has taken and
intends  to take  appropriate  remedial  actions to assure  that the  accounting
difficulties  encountered  during  2000 are  resolved.  In the  short  term,  as
discussed above, two experienced  financial  consultants were retained by senior
management  and the Board of Directors  to provide  full time interim  financial
assistance,  including  assisting in the completion of the financial  statements
for 2000 and the first quarter of 2001. At the direction of the Audit Committee,
these consultants have reinstituted proper accounting reconciliation procedures.
Continued  enforcement of such  procedures  should prevent a reoccurrence of the
recordkeeping  problems  experienced  in 2000.  In  addition,  with  respect  to
inventory, the Audit Committee expects to review and evaluate the inventory cost
accounting and management  information  systems,  as well as related procedures,
and make  recommendations  to the Board of  Directors.  The  Board of  Directors
intends to effect any necessary  improvements  to such systems and procedures as
soon as practicable.  In the interim, in order to mitigate additional  problems,
quarterly  physical  inventory counts have been implemented,  beginning with the
quarter ended March 31, 2001.  Finally,  the Company is actively searching for a
permanent  Chief  Financial  Officer and  Controller to fill current  vacancies.
Until such  positions  are  filled,  the Audit  Committee  is taking an enhanced
oversight  role in the  financial  management  of the Company in order to assure
that internal controls and procedures are followed.

Results of Operations

              Comparison of Years Ended December 31, 2000 and 1999

         Net Sales.  Net sales for the year ended December 31, 2000 increased to
$42.7  million  from $35.1  million for the year ended  December  31,  1999,  an
increase of 21.7%. The increased volume was the result of continuing  demand for
remanufactured office systems, increased sales at nine of the Company's 12 sales
offices  open more than one year and sales  contributions  from  offices  opened
during 2000 in Indianapolis and Mexico City, Mexico.  Sales to the Company's GSA
and National Accounts customers



                                       13
<PAGE>

also  contributed  to the increased  2000 sales.  The Company's  sales  strategy
remains focused on a direct sales force in those markets of sufficient potential
to  justify  the  investment  required,  supplemented  by dealer  sales in other
markets.  The  Company's  sales  office in Boston was not opened until the first
quarter of 2001 and, accordingly, did not contribute to sales in 2000.

         Although  net sales have  increased  steadily  over the past few years,
management believes that the recent slowing of the economy may have precipitated
a softening of the market for office furniture which, if it persists,  is likely
to have an adverse impact on net sales during 2001. At this time,  management is
unable to predict  the length of time or the extent to which such  softening  of
the market will affect the Company.

         Gross Margin.  The Company's gross margin  decreased from $10.7 million
or 30.6% for the year ended  December  31, 1999 to $9.5 million or 22.3% for the
year ended  December 31, 2000. The lower gross margin in 2000 was caused by book
to physical variances resulting from physical inventory  observations as well as
the  write-off of certain  obsolete and  slow-moving  inventory  items  totaling
approximately  $2.4 million in the fourth  quarter (see Note 13) and  production
inefficiencies  as production was quickly ramped up during the summer of 2000 to
support  the  Company's  new sales  offices.  The Company  continues  to work to
optimize  the  economic  trade-off  in  utilizing  re-manufacturing  versus  new
components  in its Work  Stations.  Additionally,  the Company is  continuing to
focus  on its  quality  management  process  to  reduce  costs  associated  with
nonconformance to customer requirements.

         Selling  and  Marketing   Expenses.   Selling  and  marketing  expenses
increased  by 11.0% to $8.1  million for the year ended  December  31, 2000 from
$7.3 million for the year ended December 31, 1999.  This increase is largely due
to the opening of new sales offices in Indianapolis and Mexico City,  Mexico and
additions to the sales staff in the Company's  existing sales  offices.  Selling
and marketing  expenses as a percentage of sales decreased from 20.9% in 1999 to
19.2% in 2000.

         General  and  Administrative   Expenses.   General  and  administrative
expenses increased by 36.0% to $3.4 million for the year ended December 31, 2000
from $2.5 in the year ended  December 31, 1999.  This increase was primarily due
to the  start-up of the Mexico  City,  Mexico  operation  and the opening of new
sales  offices  during  the  year.  General  and  administrative  expenses  as a
percentage of sales increased from 7.2% in 1999 to 8.0% in 2000.

         Other Income and Expenses. Total other expenses increased from $177,000
for the year ended December  31,1999 to $498,000 for the year ended December 31,
2000.  This  increase was due to an increase in  outstanding  borrowings  on the
Company's line of credit,  fees related to changing banking  relationships  from
the Company's former bank to the Company's  current bank and increased  interest
expense associated with the issuance of the Industrial Revenue Bonds to fund the
construction  of the Company's new Lansing,  Michigan  production  facility (see
Note 6 of the Notes to consolidated financial statements).

         Income Taxes.  Prior to 1999,  as a result of operating  losses and the
uncertainty  of  the  realization  of  the  potential  tax  benefits  of  future
deductions,  the  Company did not  recognize  potential  income tax  benefits of
approximately  $1.3  million.  During  the last  quarter  of 1999,  the  Company
determined  that it was more probable than not that these tax benefits  would be
realized and reversed the  valuation  allowance  associated  with the income tax
benefits.  However,  during the fourth quarter of 2000, as a result of operating
losses and the  uncertainty  of the  realization  of  potential  tax benefits of
future  deductions,   the  Company  offset  potential  income  tax  benefits  of
approximately $2.5 million with a valuation allowance resulting in a net expense
for income taxes of approximately $1.6 million.  The Company will reevaluate the
potential  realizability of net deferred tax assets in future periods. (See Note
8 of the Notes to consolidated financial statements for additional information.)



                                       14
<PAGE>

         Net Income  (Loss).  The net loss for the year ended  December 31, 2000
was $4.5 million  versus net income of $782,000 for the year ended  December 31,
1999.  The net loss in 2000 was due  principally to losses  associated  with the
opening of new sales offices,  $3.0 million in fourth quarter  charges (see Note
13) and the  establishment  in the fourth  quarter of a $2.5  million  valuation
allowance  related to deferred tax assets  associated with potential  income tax
benefits  resulting  in a net expense  for income  taxes of  approximately  $1.6
million.

              Comparison of Years Ended December 31, 1999 and 1998

         Net Sales.  Net sales for the year ended December 31, 1999 increased to
$35.1  million  from $33.7  million for the year ended  December  31,  1998,  an
increase of 4.2%. The increased  volume was the result of continuing  demand for
remanufactured  office  systems and  increased  sales at 10 of the  Company's 12
sales  offices.  During  1998,  three sales  offices  were closed as part of the
operational restructuring recorded in the second quarter and discussed in detail
below. The Company's GSA and National  Accounts business also contributed to the
overall 1999 results.  The Company also benefited from improved retention of its
sales people and the average  experience level of its sales people increasing by
almost one year during 1999.

          Operational  Restructuring.  The  Company  recorded  a charge  of $1.3
million in the second quarter of 1998. The restructuring  charge of $1.3 million
recognized  the costs related to three  important  strategic  initiatives:  1) A
return to a focus on the core  remanufacturing  business;  2)  streamlining  and
consolidation  of warehouse  operations;  and 3) consolidation of existing sales
offices and reductions in sales training  staff.  Pursuant to the  restructuring
plan, the Company refocused on producing  remanufactured product, reduced excess
warehouse space,  divested  certain assets  associated with the new Work Station
manufacturing  capabilities,  and  streamlined  operations and reduced sales and
administrative staffing by approximately 30 people.

         The restructuring charge recorded included  approximately  $400,000 for
lease termination costs,  $600,000 for asset writedowns,  and $100,000 for other
costs  associated  with  streamlining  operations.  During  the third and fourth
quarters of 1998,  the  Company  disposed  of all fixed  assets  included in the
restructuring  and  incurred  substantially  all  of  the  severance  and  lease
termination costs associated with the restructuring plan.

         Under the  restructuring  plan,  the Company  reduced  its  warehousing
capacity in Dallas, Atlanta,  Cincinnati and Richmond as well as at its Lansing,
Michigan  facility.  The plan called for the reduction of 156,000 square feet of
leased warehouse space. Additionally, the Company divested certain metal working
equipment and wrote off its  investment in new software  acquired to support new
furniture manufacturing  operations.  This supported the Company's return to its
focus on remanufacturing.

         As part of the sales office  restructuring  program  implemented at the
end of the  second  quarter of 1998,  the  Company  closed its sales  offices in
Dallas,  Charlotte and Baltimore  and reduced  sales  training  staff in certain
other markets.  The sales offices closed contributed less than $800,000 in sales
during  1998.  The  thrust  of this  program  was to  reduce  the  number of low
production sales offices and personnel.

         Gross Margin. The Company's gross margin increased from $7.9 million or
23.5% for the year ended  December  31,  1998 to $10.7  million or 30.5% for the
year ended December 31, 1999. The Company's  margins  improved as cost reduction
activities  continued  to be  implemented.  The Company  benefited  from reduced
warehousing  space and  consolidation  of  certain  purchasing  activities.  The
Company  is now  experiencing  the cost  savings  that  were  expected  from the
operational restructuring in the prior year.



                                       15
<PAGE>

         Selling and Marketing  Expenses.  Selling expenses increased by 1.4% to
$7.3 million for the year ended December 31, 1999 from $7.2 million for the year
ended December 31, 1998. Selling expenses, however, decreased as a percentage of
sales. The increase in selling expenses was the result of the Company's  efforts
to grow the business  during the second half of 1999. The Company  increased its
visibility  through  targeted  marketing  programs,  a new sales  and  marketing
brochure and by becoming more visible in trade shows.

         General  and  Administrative   Expenses.   General  and  administrative
expenses decreased by 10.7% to $2.5 million for the year ended December 31, 1999
from $2.8  million for the year ended  December  31,  1998.  This was  primarily
related to decreases  in  corporate  management  and  personnel  expenses as the
result of the Company's restructuring in 1998. During 1999, the Company incurred
significant  litigation and severance expenses related to two former officers of
the Company.  This  litigation  was  resolved in December  1999 with the Company
ultimately paying $85,000 in severance to the two former officers.

         Arbitration  Costs.  Arbitration costs of approximately $1.1 million in
1999  relate to the  indemnification  claims by the  Company  against the former
shareholders of TFM, which was acquired in 1996. These costs included legal fees
and other related costs, including those awarded by the arbitration panel to the
former TFM shareholders.

         Other Income and Expenses. Total other expenses decreased from $248,000
for the year ended December 31, 1998 to $177,000 for the year ended December 31,
1999.  The primary  reasons  for the  decrease  is a  reduction  in  outstanding
borrowings  during  the year as the  Company  paid down its line of  credit  and
increased collections of finance charges on past due accounts.

         Income Taxes.  The Company  recorded a tax benefit for the year of $1.4
million as opposed to no benefit  being  recorded in 1998.  Prior to 1999,  as a
result  of  operating  losses  and the  uncertainty  of the  realization  of the
potential tax benefits thereof,  the Company did not record potential income tax
benefits  of $1.3  million.  During  the  last  quarter  of  1999,  the  Company
determined  that it was more probable than not that these tax benefits  would be
realized and reversed the  valuation  allowance  associated  with the income tax
benefits.

         Net Income (Loss).  The net income for the year ended December 31, 1999
was $782,000  versus a net loss of $3.9 million for the year ended  December 31,
1998. The net loss in 1998 was  principally  caused by higher  production  costs
relative  to  sales  revenue,   higher  selling  expenses  and  the  operational
restructuring  charge.  The Company  benefited in 1999 from  increased  margins,
reduced  expenses and reversal of the  valuation  allowance on income taxes with
offsetting amounts related to costs noted above related to increased  litigation
expenses, resulting in an increase in net income.

Liquidity and Capital Resources

         Cash Flows from Operating  Activities.  Net cash used in operations was
$7,000  for the year  ended  December  31,  2000  versus  net cash  provided  by
operations of $762,000 for the year ended  December 31, 1999.  The change in net
cash from  operations in fiscal 2000 was due  principally to the size of the net
loss in 2000 and payment of $569,000  in legal fees  awarded by the  arbitration
panel to the former TFM shareholders.

         Cash  Flows  from  Investing  Activities.  Net cash  used in  investing
activities was $3.2 million in 2000 versus $1.8 million in 1999. At December 31,
2000, the Company had  approximately  $2.2 million in cash and cash  equivalents
restricted as to use under the  agreements  relating to the  Industrial  Revenue
Bonds that were issued  during 2000.  In addition,  the Company used $276,612 of
cash in 2000 to



                                       16
<PAGE>

purchase  the  land on  which  the new  Lansing  production  facility  is  being
constructed.  In 1999, the Company paid approximately $1.0 million to the former
shareholders of TFM in connection with an arbitration proceeding relating to the
1996 acquisition of TFM.

         Cash Flows from  Financing  Activities.  Net cash provided by financing
activities  was $3.4  million in 2000  versus  net cash  provided  by  financing
activities  of  $999,000 in 1999.  The  increase  in 2000 was due  primarily  to
borrowings  of  $2.5  million  in  connection  with  the  issuance  and  sale of
Industrial  Revenue Bonds to construct the new Lansing  production  facility and
other capital  expenditures.  In 1999, the Company  repurchased  shares of stock
from the Company's  founder at a net cost of $673,000 and borrowed money to fund
fixed asset acquisitions and payments to former officers.

         During  the  first  quarter  of 2000,  the  Company  announced  a stock
repurchase  program for up to 100,000  shares of Common  Stock.  Pursuant to the
program,  the Company  repurchased  50,500  shares during 2000 and an additional
15,000  shares in the first quarter of 2001.  The total cost of the  repurchased
shares was approximately $114,000.

         The  Company  does  not  have  any  material  commitments  for  capital
expenditures  other than with  respect to the Lansing  facility.  The ability to
complete construction of the Lansing facility could be adversely impacted by the
Company's  violations  of  certain  debt  covenants.  See  "Violations  of  Loan
Covenants" and "Expected Future Cash Flows" below and Note 6 to the consolidated
financial statements.

         Violations  of Loan  Covenants.  The Company  maintains two bank credit
facilities  consisting  of a  letter  of  credit  facility  associated  with the
issuance of $2.5 million of Industrial Revenue Bonds to finance the construction
of a new  production  facility and a revolving  line of credit.  At December 31,
2000, the revolving line of credit  provided for a maximum  borrowing  amount of
$5,250,000  at  variable  interest  rates.  The  letter of credit  facility  and
revolving  line of  credit  agreements  require  the  Company  to  meet  various
restrictive  covenants,  including  a defined  tangible  net worth,  an interest
coverage ratio and certain other covenants. At December 31, 2000 and thereafter,
the Company was not in compliance with certain of the covenants contained in the
letter of credit  facility and the  revolving  line of credit  agreements.  As a
result of the covenant  violations as well as the significant net loss in fiscal
year 2000, the Company's  auditors,  in its report,  have expressed  substantial
doubt as to the Company's  ability to continue as a going concern.  See "Forward
Looking Statements" below and Note 1 to the consolidated financial statements.

         In May 2001, the Company entered into a forbearance  agreement  whereby
the bank agreed to  temporarily  waive its  existing  right to declare  defaults
relating to the Company's  failure to comply with certain loan covenants through
June 30, 2001.  The  forbearance  agreement  provides that the bank will refrain
from exercising any rights based on such a default,  including  accelerating the
maturity  of the loans  under the two credit  facilities,  until  after June 30,
2001.  Conditions to the forbearance agreement include a cap on borrowings under
the line of credit of $4,650,000. As of May 23, 2001, approximately $4.1 million
was outstanding.  Also, any  disbursements  by the Company of the  approximately
$2.2  million in remaining  proceeds  from the  Industrial  Revenue Bond held as
restricted  cash by the Company  are subject to the  approval of the bank in its
sole discretion.  Finally,  the Company has agreed to pay the bank a forbearance
fee of $89,368,  which may be  credited  against  any fees  associated  with any
subsequent credit arrangements.  Pursuant to the forbearance agreement, the bank
maintains the right to declare a default and  accelerate the loans under the two
facilities  after June 30, 2001 if the parties have not entered into  amendments
to the existing loan arrangements.

         Prior to June 30, 2001, the Company and the bank will seek to negotiate
a permanent waiver of the Company's loan covenant violations, as well as revised
loan  covenants.  These  negotiations  could



                                       17
<PAGE>

result in new terms which are less  favorable  than current terms under existing
loan  agreements  and could  involve a reduction in  availability  of funds,  an
increase in interest rates and shorter  maturities,  among other things.  If the
Company  is  not   successful  in  securing  these  waivers  and  loan  covenant
amendments,  it may  have  to seek  new  financings  from  other  lenders.  Such
alternative  financing  arrangements  could  likewise be less  favorable  to the
Company than its existing credit facilities.  If the Company is unable to either
procure  permanent  covenant  violation  waivers and  covenant  amendments  with
respect  to  existing  facilities  or  acceptable  alternative  financing,  such
failures  could  have a  material  adverse  effect  on the  Company's  financial
condition and results of operations.  No assurance can be given that the Company
will be able to obtain such  permanent  covenant  violation  waivers and revised
loan covenants or refinance its existing obligations.

         Expected Future Cash Flows.  The Company can give no assurance that its
current cash balances plus cash flows from  operations,  if any, and  borrowings
available  under  its line of  credit  will be  adequate  to fund  its  expected
operating  and capital  needs for the next twelve  months.  The  adequacy of the
Company's  cash  resources is primarily  dependent  on the  Company's  operating
results over the next twelve  months and its ability to  renegotiate  its credit
arrangements with its existing bank or procure alternate financing, all of which
are subject to substantial uncertainties.

         Based on  preliminary  estimates,  the Company  expects to report a net
loss for the first quarter of 2001.  Cash flow from operations for the 2001 year
will be dependent,  among other things,  upon the effect of the current economic
slowdown on the Company's sales, and new management's ability to implement plans
to reduce expenses and improve the Company's operating performance and financial
position.

         Under the May 2001  forbearance  agreement  between the Company and the
bank, the Company's line of credit was reduced from $5,250,000 to $4,650,000. As
of May 23, 2001,  the Company had  approximately  $550,000  available  under the
facility.  In addition,  the  forbearance  agreement  prohibits the Company from
utilizing  the  approximately  $2.2 million of remaining  cash proceeds from the
Company's  Industrial  Revenue  Bonds  related  to  the  new  Lansing,  Michigan
production  facility now under  construction  without the prior  approval of the
bank. Assumimg timely completion of the project,  the approximately $1.9 million
remaining  to be paid on the  project  will be due on or before  June 30,  2001,
including a progess  payment of  approximately  $613,000 due in early June 2001.
The  Company is unable to  determine  at this time  whether the bank will permit
such payments. The failure to return to profitabilty and optimize operating cash
flow in the short  term,  obtain  the  bank's  permission  to  utilize  the bond
proceeds  for  progress  payments  on the  Lansing  facility,  and  successfully
renegotiate its credit agreements with the bank or procure alternate  financing,
could have a material  adverse  effect on the Company's  liquidity  position and
capital resources.

Seasonality and Impact of Inflation

         The  Company has no  discernable  pattern of  seasonality.  Because the
Company  typically  ships  Work  Stations  within  four  weeks  of an  order,  a
substantial  portion of the  Company's  revenues in each  quarter  results  from
orders  placed by customers  during that  quarter.  As a result,  the  Company's
results may vary from quarter to quarter.

         Inflation  has not had a material  impact on the Company's net sales or
income to date. However,  there can be no assurances that the Company's business
will not be affected in the future by inflation.

Market Risk

         The Company is exposed to changes in interest rates  primarily from its
revolving  line of credit  arrangement  and from the  letter of credit  facility
related to the Industrial  Revenue Bonds issued to fund



                                       18
<PAGE>

the  construction  of the new  production  facility  in Lansing,  Michigan.  The
Company's interest expense is affected by changes in short-term  interest on the
debt  outstanding  under the  revolving  line of credit and  Industrial  Revenue
Bonds. These borrowings bear interest at variable rates (the "Borrowing Rates").
Assuming:  (i) the  Borrowing  Rates vary by 100 basis points from their current
levels  in  any  given  month  and  (ii)  the  Company  maintains  an  aggregate
outstanding debt balance subject to these Borrowing Rates of $5.7 million during
the month of variance,  interest expense would vary by approximately  $5,000 for
that month. The Company does not use derivative instruments.

Forward-Looking Statements

         The foregoing  discussion and the description of the Company's business
set forth in Part I, Item 1 of this Annual Report on Form 10-K contains  certain
forward-looking  statements,  which may be  identified  by phrases  such as "the
Company expects" or words of similar effect. In addition, from time to time, the
Company  may publish  forward-looking  statements  relating  to such  matters as
anticipated financial  performance,  business prospects and similar matters. The
Private  Securities  Litigation  Reform Act of 1995  provides a safe  harbor for
forward-looking statements. The following important factors, among other things,
in some cases have  affected,  and in the future  could  affect,  the  Company's
actual results and could cause the Company's actual results for fiscal year 2001
and any  interim  period  to  differ  materially  from  those  expressed  in any
forward-looking  statements  made by, or on behalf of, the Company.  The Company
assumes no duty to update any of the statements in this report.

         Material Weakness in Internal Controls.  In connection with their audit
of the Company's fiscal 2000 consolidated  financial  statements,  the Company's
independent  auditors  reported to the  Company's  Audit  Committee and Board of
Directors  that they had found  material  weaknesses in the  Company's  internal
accounting  controls.  The Audit  Committee  continues  to review the  Company's
internal  accounting  controls  with  its  independent  auditors  and  with  its
financial consultants engaged to assist in the audit to evaluate improvements to
the  Company's  internal  controls and to implement  appropriate  changes  where
necessary.  The  Company  has  already  taken  initial  steps to remedy  certain
weaknesses in its control functions;  however, it is anticipated that additional
steps will be  necessary,  including  possible  replacement  or upgrading of its
inventory  tracking  and  valuation  software  systems,  and that  they  will be
implemented  over a period of time.  The Company is unable to predict  when such
processes will be completed or the costs associated therewith.

         Ability to Continue  as a Going  Concern.  The report of the  Company's
independent auditors in connection with the Company's financial statements as of
and for the year ended December 31, 2000 contains an explanatory paragraph as to
the  Company's  ability  to  continue  as a going  concern.  Among  the  factors
contributing to the substantial doubt about the Company's ability to continue as
a going concern are significant  losses for the year ended December 31, 2000 and
the  Company's   violation  of  covenants  with  respect  to  significant   debt
obligations. For the year ended December 31, 2000, the Company had a loss before
income taxes of $2,936,000  and a net loss of  $4,507,000.  Based on preliminary
estimates,  the  Company  expects to report a net loss for the first  quarter of
2001.

         As of December 31, 2000, the Company had  classified  $2,400,000 of its
long-term  debt  as  current   liabilities   because  of  its  failure  to  meet
requirements contained in the instruments governing these debt obligations. Such
amount may be  accelerated  by the  Company's  bank as a result of the Company's
violations  of  debt  covenants.  In  May  2001,  the  Company  entered  into  a
forbearance  agreement whereby the bank agreed to temporarily waive its existing
right to declare  defaults  relating  to the  Company's  failure to comply  with
certain loan covenants through June 30, 2001. The forbearance agreement provides
that the bank will refrain from  exercising  any rights based on such a default,
including   accelerating  the  maturity  of  the  loans  under  the  two  credit
facilities,  until after June 30, 2001.  Conditions to the forbearance agreement
include a cap on borrowings under the line of credit of $4,650,000. As of



                                       19
<PAGE>

May  23,  2001,   approximately,   $4.1  million  was  outstanding.   Also,  any
disbursements  by the Company of the  approximately  $2.2  million in  remaining
proceeds from the Industrial Revenue Bond held as restricted cash by the Company
are subject to the  approval of the bank in its sole  discretion.  Finally,  the
Company has agreed to pay the bank a  forbearance  fee of $89,368,  which may be
credited  against any fees associated with any subsequent  credit  arrangements.
Pursuant to the forbearance agreement, the bank maintains the right to declare a
default and accelerate the loans under the two facilities after June 30, 2001 if
the parties have not entered into amendments to the existing loan arrangements.

         Prior to June 30, 2001, the Company and the bank will seek to negotiate
a permanent waiver of the Company's loan covenant violations, as well as revised
loan  covenants.  These  negotiations  could  result in new terms which are less
favorable than current terms under existing loan  agreements and could involve a
reduction in  availability  of funds,  an increase in interest rates and shorter
maturities,  among other  things.  If the Company is not  successful in securing
these waivers and loan covenant  amendments,  it may have to seek new financings
from other lenders.  Such alternative  financing  arrangements could likewise be
less  favorable  to the Company  than its  existing  credit  facilities.  If the
Company is unable to either procure  permanent  covenant  violation  waivers and
covenant   amendments   with  respect  to  existing   facilities  or  acceptable
alternative financing, such failures could have a material adverse effect on the
Company's  financial  condition and results of  operations.  No assurance can be
given that the Company will be able to obtain such permanent  covenant violation
waivers and revised loan covenants or refinance its existing obligations or that
the Company will be able to continue operations as a going concern.

         Turnover in Management;  Uncertainties Regarding Management Recruitment
and Retention.  In June 2000, the Chief Financial Officer of the Company left to
pursue other  interests and thereafter the Controller of the Company was elected
to fill the vacant  position.  In December  2000, the recently  appointed  Chief
Financial Officer departed the Company. In March 2001, the Assistant  Controller
of the Company also resigned his position.  To address the resulting shortage in
executive financial  management  personnel,  the Company engaged two experienced
financial  consultants on a temporary  basis to assist the Company in completing
the 2000 financial  statements.  In April 2001, Mr. Hobey,  the Chief  Executive
Officer of the Company, announced he was retiring from the Company .

         Although the Board of Directors has  established an ad hoc committee to
assess  candidates for these  positions and engaged an executive  search firm to
locate a Chief Executive  Officer,  as of May 23, 2001 no replacements have been
named and it is uncertain as to when the offices of Chief Financial  Officer and
Controller  will be filled or Mr.  Hobey's  replacement  named.  There can be no
assurances  that the Company can  successfully  attract and retain the executive
management  talent  and  other  qualified  personnel  desired  by the  Board  of
Directors.  In addition,  the Company  cannot  predict the effect that continued
uncertainty  in  the  recruitment  or  retention  of  management  will  have  on
customers, suppliers, employees or the public perception of the Company.

         Violations of Loan Covenants. At December 31, 2000 and thereafter,  the
Company was not in  compliance  with certain of the  covenants  contained in its
letter of credit facility and revolving line of credit agreements with its bank.
In May 2001, the Company entered into a forbearance  agreement  whereby the bank
agreed to temporarily  waive its existing right to declare defaults  relating to
the  Company's  failure to comply with certain loan  covenants  through June 30,
2001.  The  Company  and the bank  will  seek to  negotiate  permanent  covenant
violation  waivers and revised  covenants  prior to such date.  Failure to reach
agreement  with its bank or procure  alternative  financing  from other  lenders
could have a material  adverse effect on the Company's  financial  condition and
results of operations. See "Ability to Continue as a Going Concern" above.

         Soft Market for Office  Furniture.  Although  net sales have  increased
steadily over the past few years, management believes that the recent slowing of
the economy may have precipitated a softening of



                                       20
<PAGE>

the market for office  furniture  which,  if it  persists,  is likely to have an
adverse  impact on net sales during 2001. At this time,  management is unable to
predict the length of time or the extent to which such  softening  of the market
will affect the Company.

         Dependence on Sales Office  Profitability.  The Company depends heavily
on its sales offices to provide  revenue  growth.  The Company  opened three new
offices  during 2000 and the first  quarter of 2001.  The  Company's  experience
indicates  that it takes  several  years for a sales office to develop  adequate
sales  volumes to generate  expected  returns.  Until that time,  the  Company's
selling  expenses  increase  faster than the gross profit  generated  from those
sales.  An  inability to increase  revenues of new sales  offices to levels that
would offset the continuing  expenses of such sales offices may adversely affect
the profitability of the Company's business.

         Potential  Limitations  on Future Growth.  The Company's  growth in the
future  will be  dependent  in part on the  Company's  ability to manage  growth
effectively, including the improvement of the Company's financial and management
information   systems,   the  expansion  of  the  Company's   manufacturing  and
remanufacturing  operations and the recruitment and retention of executive staff
and key employees.  The Company also will be required to manage working  capital
and  generate  cash  flow  from  operations  to meet the  needs of an  expanding
business.  There can be no assurances that the Company's  future growth will not
be limited by insufficient cash flow or the lack of adequate  financing required
to fund such growth.

         Impact of Customer  Preferences  and  Technological  Advances on Sales.
Certain  potential  customers  may prefer  new Work  Stations  to the  Company's
remanufactured  Work  Stations  due  to  various  factors,  including  the  more
developed   and  better   financed   marketing   efforts  of  new  Work  Station
manufacturers   and   such   potential   customers'   reluctance   to   purchase
remanufactured  products  because of image,  perceived  questions  of quality or
other factors. In addition,  technological advances are frequently  incorporated
into new Work Stations by the leading  manufacturers,  particularly with respect
to   electrical    circuits   necessary   for   more   advanced   computer   and
telecommunications features. Although the Company has the ability to incorporate
these  technological  advances in its  remanufactured  Work  Stations,  any such
incorporation  may  increase  remanufacturing  costs  and may  reduce  the price
advantage of remanufactured Work Stations over newly manufactured Work Stations.

         Dependence  Upon  Supply of Work  Stations  and  Component  Parts.  The
Company presently purchases only used Herman Miller,  Steelcase and Haworth Work
Stations  in its  remanufacturing  operations.  The  Company  does  not have any
binding agreements relating to the purchase of used Herman Miller,  Steelcase or
Haworth Work Stations for remanufacturing and generally purchases such used Work
Stations  from  end-users,  brokers  and  dealers  through  competitive  bids or
directly  negotiated  transactions.  Although  the  Company  in the past has not
experienced a shortage of used Work Stations at competitive  prices, the success
of the Company in the future will depend in part upon its  continued  ability to
obtain   Herman   Miller,   Steelcase   and  Haworth  used  Work   Stations  for
remanufacturing in sufficient  quantities and at competitive  prices.  While the
Company believes that the availability of used Work Stations for remanufacturing
will increase as the installed base of Work Stations  increases and ages,  there
may be periods of tight  supply as the demand for used Work  Stations  increases
which  could  have a  material  adverse  effect on the  Company's  business  and
profitability.

         The Company also purchases new and used component  parts for use in the
remanufacture of Work Stations.  Although the Company can manufacture certain of
the  component  parts needed to  remanufacture  Work  Stations,  there can be no
assurances  that shortages of certain  component parts or higher prices for such
parts  will not  occur in the  future.  An  inability  to  produce  or  purchase
necessary component parts in adequate quantities and at competitive prices could
have a  material  adverse  effect on the  Company's  results of  operations  and
financial condition.



                                       21
<PAGE>

         No Assurance of Expansion of Product  Lines and  Business.  The Company
has concentrated its business on remanufacturing  Work Stations  manufactured by
Herman Miller and Haworth.  The Company has only  recently  expanded its product
line to include Steelcase Work Stations.  The Company has limited  experience in
remanufacturing  Work  Stations of  manufacturers  other than Herman  Miller and
Haworth. Due to the differences in and lack of interchangeability of the various
Work Stations and certain  component parts produced by the major  manufacturers,
the Company's  expansion of its product line will require additional training of
production personnel,  the establishment of additional sources of supply of used
Work  Stations and  component  parts and, in some cases,  the  establishment  of
different remanufacturing  processes. As a result of these factors, there can be
no assurance  that the Company will be able to expand  successfully  its product
line or maintain its gross margins.

         Dependence  Upon  Primary  Remanufacturing   Facilities.   The  Company
primarily  remanufactures  Herman  Miller  Work  Stations  at  its  facility  in
Richmond,  Virginia,  and  Haworth  Work  Stations  at its  facility in Lansing,
Michigan.  Although  the  Company  presently  maintains  $2,000,000  of business
interruption  insurance on the Richmond  facility and $250,000 of such insurance
on  the  Lansing  facility,   a  lengthy  interruption  of  its  remanufacturing
operations at the Richmond or Lansing  facilities  would have a material adverse
effect on the Company's results of operations and financial condition.

         Potential  Fluctuations  in  Quarterly  Results.  Because  the  Company
typically  ships Work  Stations  within  four weeks of an order,  a  substantial
portion of the Company's  revenue in each quarter  results from orders placed by
customers in that quarter. Accordingly,  quarterly revenue levels are subject to
substantial  fluctuations  and are often  difficult to predict.  Fluctuations in
operating  results  could  result in  volatility  in the price of the  Company's
Common Stock. If revenue levels are below  expectations,  operating results will
be adversely affected.

         Competition.  Competition  in the Work  Station  segment  of the office
furniture industry is intense. The Company competes with many other companies in
the sale of its new and  remanufactured  products as well as in the  purchase of
"as  is"  Work   Stations  and   component   parts  for  use  in  the  Company's
remanufactured Work Stations.  In the sale of remanufactured Work Stations,  the
Company   competes   with   manufacturers   of  new  Work   Stations  and  their
remanufacturing  subsidiaries,  other independent remanufacturers and dealers of
"as is" Work  Stations.  In the  purchase  of used  Work  Stations  that are the
primary source of the Company's supply for its remanufacturing  operations,  the
Company  competes  with  the  manufacturers  of  new  Work  Stations  and  their
remanufacturing  subsidiaries,  both  of  which  sometimes  provide  a  trade-in
allowance to purchasers of their products, other independent remanufacturers and
Work Station brokers and dealers. In addition,  local remanufacturers may have a
competitive  advantage  over the  Company in pricing due to the cost of shipping
Work  Stations  from its  production  facilities  in  Virginia  and  Michigan to
out-of-state customers.

         Sales  of  the  Company's   remanufactured   Work  Stations  depend  on
maintaining  a  successful  balance  between  price and quality so that its Work
Stations  are  positioned  in the  marketplace  to provide a product that is (i)
comparable or superior in quality, design and appearance to higher cost new Work
Stations and (ii) superior in quality, features and appearance to lower cost "as
is" Work  Stations.  Failure by the  Company to  maintain  this  balance  due to
increased  competition  in either the  purchase or sale of Work  Stations  could
adversely affect the Company's business. Additionally,  certain of the Company's
competitors have greater financial, technical,  manufacturing,  marketing, sales
and other resources than the Company.

         Environmental  Regulations.  The  Company  is  subject  to a variety of
federal,  state and local governmental  regulations related to the storage, use,
discharge and disposal of toxic,  volatile or otherwise hazardous chemicals used
in its manufacturing  processes.  Regulations implementing the federal Clean Air



                                       22
<PAGE>

Act,  as amended in 1990,  may require  reduced  emissions  of volatile  organic
compounds and hazardous air pollutants,  including certain  emissions  resulting
from the Company's use of paints and solvents in the remanufacturing process. As
a result,  the  Company  may be  required  to install  emission  controls  or to
institute changes in its remanufacturing processes in order to comply with these
reduced  emission  standards.  There can be no  assurance  that  these and other
changes in  environmental  regulations in the future will not result in the need
for capital  expenditures or otherwise impose financial  burdens on the Company.
Further,  such  regulations  could restrict the Company's  ability to expand its
operations.  Any failure by the Company to obtain required  permits for, control
the use of, or adequately restrict the discharge of, hazardous  substances under
present or future regulations could subject the Company to substantial liability
or could cause its manufacturing  operations to be suspended.  Such liability or
suspension of  manufacturing  operations could have a material adverse effect on
the Company's results of operations and financial condition.

         Risk of Patent  Infringement  Claims.  Newly manufactured Work Stations
contain numerous patented component parts.  Although the Company is not aware of
any existing or threatened  patent  infringement  claims asserted against it and
does not  believe  that  its  remanufacturing  of Work  Stations  infringes  the
proprietary  rights  of  any  third  parties,  there  can be no  assurance  that
infringement claims will not be asserted against the Company.  In addition,  the
Company  manufactures or purchases certain new and used component parts included
in its remanufactured Work Stations.  To the extent that such activities involve
purchasing or manufacturing component parts similar to patented component parts,
the  Company  could  become  subject  to claims of  patent  infringement  if the
manufacture or use of such component parts  infringed the proprietary  rights of
third  parties.  In addition,  the existence of third party  proprietary  rights
could limit the  Company's  ability to produce or use certain  component  parts.
Damages for violation of third party proprietary rights could be substantial and
could have a material  adverse effect on the Company's  financial  condition and
results of operation.  Regardless of the validity or the successful assertion of
such  claims,  the  Company  would  incur  significant  costs and  diversion  of
resources with respect to the defense thereof.


ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Information  with  respect  to this  Item is  included  under  "Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations - Market Risk" of this Form 10-K.









                                       23
<PAGE>

ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The following audited consolidated  financial statements of the Company
are included in this report:

         Report of Independent Auditors

         Consolidated Balance Sheets at December 31, 2000 and 1999

         Consolidated Statements of Operations for the Years Ended
           December 31, 2000, 1999 and 1998

         Consolidated Statements of Shareholders' Equity for the Years Ended
           December 31, 2000, 1999 and 1998

         Consolidated Statements of Cash Flows for the Years Ended
           December 31, 2000, 1999 and 1998

         Notes to consolidated financial statements


















                                       24
<PAGE>





Report of Independent Auditors

Board of Directors and Shareholders
Open Plan Systems, Inc.

We have audited the accompany  consolidated balance sheets of Open Plan Systems,
Inc.  (the  "Company")  as of  December  31,  2000  and  1999  and  the  related
consolidated  statements of operations,  shareholders' equity and cash flows for
each of the three years in the period ended December 31, 2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Open Plan Systems,
Inc.  at  December  31,  2000 and  1999,  and the  consolidated  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2000, in conformity with accounting  principles  generally accepted
in the United States.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
consolidated  financial  statements,  during 2000 the Company had a  significant
loss from  operations.  In addition,  the Company has not complied  with certain
covenants  of its  loan  agreements  with its  lender.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these  matters are  described  in Note 1 to the
consolidated financial statements.  The consolidated financial statements do not
include  any   adjustments  to  reflect  the  possible  future  effects  on  the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of these uncertainties.

The selected quarterly  financial data included in Note 16 contains  information
that we did not audit,  and,  accordingly,  we do not express an opinion on that
data.  We did not complete a review of the  quarterly  data in  accordance  with
standards  established by the American Institute of Certified Public Accountants
due to  inadequacies  in the Company's  internal  control for the preparation of
interim financial information.



                                                /s/ ERNST & YOUNG LLP

Richmond, Virginia
May 23, 2001




                                       25
<PAGE>


OPEN PLAN SYSTEMS, INC.
Consolidated Balance Sheets
(amounts in thousands)
<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                           2000                      1999
                                                                --------------------------------------------------
<S>                                                                 <C>                        <C>
ASSETS
Current assets:
   Cash and cash equivalents                                        $       244                $        13
   Cash and cash equivalents externally restricted under
     bond indenture agreement                                             2,190                          -
   Accounts receivable, net                                               7,834                      7,144
   Inventories                                                            6,278                      7,862
   Prepaids and other                                                       458                        638
   Refundable income taxes                                                    -                        188
   Deferred income taxes                                                      -                        385
                                                                --------------------------------------------------
TOTAL CURRENT ASSETS                                                     17,004                     16,230

Property and equipment, net                                               2,393                      2,272
Goodwill, net                                                             3,664                      3,898
Deferred income taxes                                                         -                      1,093

Other                                                                       271                        126
                                                                --------------------------------------------------
TOTAL ASSETS                                                        $    23,332                $    23,619
                                                                ==================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt                                $     2,595                $        62
   Revolving line of credit                                               3,366                      2,419
   Trade accounts payable                                                 3,709                      3,464
   Accrued compensation and related costs                                 1,121                        238
   Other                                                                    631                        813
   Customer deposits                                                        860                      1,005
                                                                --------------------------------------------------
TOTAL CURRENT LIABILITIES                                                12,282                      8,001

Long-term debt                                                              227                        163
Other long-term liabilities                                                  20                          -
                                                                --------------------------------------------------
TOTAL LIABILITIES                                                        12,529                      8,164

Commitments and Contingencies                                                                            -

Shareholders' equity:
   Common stock, no par value:
     Authorized shares - 50,000
     Issued and outstanding shares    - 4,352 - 2000                     18,561                     18,651
                                      - 4,403 - 1999
   Additional capital                                                       137                        137
   Accumulated deficit                                                   (7,840)                    (3,333)
   Accumulated other comprehensive income                                     4                          -
   Notes receivable from employees for sale of stock                        (59)                         -
                                                                --------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                                               10,803                     15,455
                                                                --------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $    23,332                $    23,619
                                                                ==================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       26
<PAGE>

OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                                 Years Ended December 31,
                                                                            2000            1999            1998
                                                                     -----------------------------------------------
<S>                                                                       <C>              <C>             <C>
Net sales                                                                 $42,675          $35,058         $33,676

Cost of sales                                                              33,158           24,332          25,765
                                                                     -----------------------------------------------
Gross profit                                                                9,517           10,726           7,911

Operating expenses:
   Amortization of intangibles                                                274              213             275
   Selling and marketing                                                    8,144            7,336           7,220
   General and administrative                                               3,395            2,529           2,811
   Arbitration costs                                                          142            1,067               -
   Operational restructuring                                                    -                -           1,290
                                                                     -----------------------------------------------
                                                                           11,955           11,145          11,596
                                                                     -----------------------------------------------
Operating loss                                                             (2,438)            (419)         (3,685)

Other (income) expense:
   Interest expense                                                           446              201             236
   Other, net                                                                  52              (24)             12
                                                                     -----------------------------------------------
                                                                              498              177             248
                                                                     -----------------------------------------------
Loss before income taxes                                                   (2,936)            (596)         (3,933)

Expense (benefit) for income taxes                                          1,571           (1,378)              -
                                                                     -----------------------------------------------
Net (loss) income                                                         $(4,507)         $   782         $(3,933)
                                                                     ===============================================

Basic and diluted (loss) income per share                                 $ (1.03)         $   .17         $  (.86)
                                                                     ===============================================
Diluted weighted average common shares outstanding                          4,395            4,594           4,582
                                                                     ===============================================
Basic weighted average common shares outstanding                            4,395            4,593           4,582
                                                                     ===============================================
</TABLE>

See accompanying notes to consolidated financial statements.












                                       27
<PAGE>

OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Shareholders' Equity
Years ended December 31, 2000, 1999 and 1998
(amounts in thousands)
<TABLE>
<CAPTION>
                                                                                     Accumulated   Notes Receivable
                                                                                        Other        - Employees
                                       Common        Additional      Accumulated    Comprehensive    from Sale of
                                       Stock          Capital          Deficit          Income           Stock           Total
                                    ------------------------------------------------------------------------------------------------
<S>                                     <C>                <C>           <C>                  <C>             <C>         <C>
BALANCE AT DECEMBER 31, 1997            $20,088            $137           $(182)               -               -          $20,043

Issuance of common stock                    352               -               -                -               -              352

Reduction in connection with prior
  year's acquisition                     (1,116)              -               -                -               -           (1,116)

Net loss for 1998                             -               -          (3,933)               -               -           (3,933)
                                    ------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 1998             19,324             137          (4,115)               -               -           15,346

Issuance of common stock                    400               -               -                -               -              400

Purchase of common stock                 (1,073)              -               -                -               -           (1,073)

Net income for 1999                           -               -             782                -               -              782
                                    ------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 1999             18,651             137          (3,333)               -               -           15,455

Purchase of common stock                    (90)              -               -                -               -              (90)

Net loss for 2000                             -               -          (4,507)               -               -           (4,507)

Foreign currency translation
   adjustments                                -               -               -               $4               -                4

Net increase in notes receivable
   from employees for sale of                 -               -               -                -            $(59)             (59)
   stock
                                    ------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 2000            $18,561            $137         $(7,840)              $4            $(59)         $10,803
                                    ================================================================================================

</TABLE>


See accompanying notes to consolidated financial statements.









                                       28
<PAGE>


OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows
(amounts in thousands)
<TABLE>
<CAPTION>
                                                                                          Year Ended December 31,
                                                                                   2000             1999            1998
                                                                             -----------------------------------------------
<S>                                                                            <C>               <C>            <C>
Operating activities
Net (loss) income                                                              $    (4,507)      $      782     $   (3,933)
Adjustments to reconcile net (loss) income to net cash
   provided by (used in) operating activities:
      Provision for losses on receivables                                              469               57            166
      Depreciation expense                                                             808              760            788
      Amortization expense                                                             274              213            275
      Operational restructuring                                                          -                -          1,290
      Loss on disposal of property and equipment                                        38               10             18
      Deferred income taxes                                                          1,478           (1,478)            (4)
      Changes in operating assets and liabilities:
        Accounts receivable                                                         (1,159)            (912)          (969)
        Inventories                                                                  1,584             (954)         3,847
        Prepaids and other current assets                                              180               34              1
        Refundable income taxes                                                        188              117            490
        Other non-current assets                                                      (185)             300            (60)
        Trade accounts payable                                                         245            1,469           (416)
        Customer deposits                                                             (145)               5            159
        Accrued and other liabilities                                                  725              359           (458)
                                                                             -----------------------------------------------
Net cash provided by (used in) operating activities                                     (7)             762          1,194

Investing activities
Net increase in cash and cash equivalents restricted under bond
    indenture agreement                                                             (2,190)               -              -
Proceeds from sale of property and equipment                                            16               33            131
Arbitration payment for 1996 acquisition                                                 -             (996)             -
Purchases of property and equipment                                                   (983)            (787)          (484)
Net increase in notes receivable from employees for sale of stock                      (59)               -              -
                                                                             -----------------------------------------------
Net cash used in investing activities                                               (3,216)          (1,750)          (353)

Financing activities
Net borrowings (repayments) on revolving line of credit                                947             1,467        (1,158)
Proceeds from borrowings on long-term debt                                           2,671               247              -
Principal payments on long-term debt                                                   (74)             (42)           (106)
Purchase of common stock                                                               (90)          (1,073)              -
Proceeds from sale of common stock                                                       -              400             352
                                                                             -----------------------------------------------
Net cash provided by (used in) financing activities                                  3,454              999            (912)
                                                                             -----------------------------------------------

Change in cash and cash equivalents                                                    231               11             (71)
                                                                             -----------------------------------------------
Cash and cash equivalents at beginning of year                                          13                2              73
                                                                             -----------------------------------------------
Cash and cash equivalents at end of year                                       $       244        $      13      $       2
                                                                             ===============================================

Supplemental disclosures
Interest paid                                                                          500        $      179     $     236
                                                                             ===============================================
Income taxes paid                                                              $        24        $        -     $       -
                                                                             ===============================================
</TABLE>

See accompanying notes to consolidated financial statements.




                                       29
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Open Plan Systems,  Inc. (the  "Company")  is a  remanufacturer  and marketer of
modular  office  Work  Stations.   The  Company  remanufactures  Herman  Miller,
Steelcase and Haworth  product lines and markets these products  through Company
sales  offices  located  in the East  Coast and  Mid-West  regions of the United
States. In addition,  the Company also sells new chairs, desks, and other office
furniture  products  purchased  from other  manufacturers.  The  following  is a
description of the Company's more significant accounting policies.

Going Concern Matters

The accompanying consolidated financial statements have been prepared on a going
concern basis that  contemplates  the realization of assets and the satisfaction
of  liabilities in the normal course of business.  As shown in the  accompanying
consolidated  financial  statements,  for the year ended  December 31, 2000, the
Company  had a  loss  before  income  taxes  of  $2,936,000  and a net  loss  of
$4,507,000.  In  addition,  as of  December  31,  2000  the  Company  was not in
compliance with certain debt covenants,  thereby  requiring long term debt to be
reclassified  as  current  liabilities.   (See  Note  6.)  These  factors  raise
substantial doubt about the Company's ability to continue as a going concern.

The primary factors contributing to the Company's net loss of $4,507,000 for the
year ended  December  31,  2000 were losses  associated  with the opening of new
sales  offices,  $3.0  million in fourth  quarter  charges (see Note 13) and the
establishment  in the  fourth  quarter  of a $2.5  million  valuation  allowance
related to deferred tax assets  associated  with  potential  income tax benefits
resulting in a net expense for income taxes of approximately $1.6 million.  (See
Note 8.) The Company is actively searching for a new chief executive officer who
will be charged with  formulating,  in conjunction  with the Board of Directors,
and quickly implementing a plan to cut costs and improve the Company's operating
performance.  The  Company  is  also  seeking  a  Chief  Financial  Officer  and
Controller to fill current vacancies. Until such positions are filled, the Audit
Committee of the Board of Directors is taking an enhanced  oversight role in the
financial management of the Company. Also, two experienced financial consultants
were retained by senior management and the Board of Directors to provide interim
financial  assistance,  including  assisting in the  completion of the financial
statements for the year ended December 31, 2000 and the first quarter of 2001.

At December  31,  2000,  the Company was not in  compliance  with  certain  loan
covenants  of its long  term  debt  agreements.  Further,  the $2.5  million  in
borrowings  associated with its Industrial Revenue Bonds have been classified as
current  as the  Company  was not in  compliance  with  certain  loan  covenants
governing  these  instruments.  Under  the  terms of such  obligations,  amounts
borrowed thereunder can be accelerated by the Company's lender.

In May 2001, the Company entered into a forbearance  agreement  whereby the bank
agreed to temporarily  waive its existing right to declare defaults  relating to
the  Company's  failure to comply with certain loan  covenants  through June 30,
2001.  The  forbearance  agreement  provides  that the bank  will  refrain  from
exercising  any  rights  based on such a  default,  including  accelerating  the
maturity  of the loans  under the two credit  facilities,  until  after June 30,
2001.  Conditions to the forbearance agreement include a cap on borrowings under
the line of credit of $4,650,000.  Also, any disbursements by the Company of the



                                       30
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

proceeds from the Industrial Revenue Bond held as restricted cash by the Company
are subject to the approval of the bank in its sole discretion.  Pursuant to the
forbearance  agreement,  the bank  maintains  the right to declare a default and
accelerate the loans under the two facilities after June 30, 2001 if the parties
have not entered into amendments to the existing loan arrangements.

Prior to June 30,  2001,  the  Company  and the bank  will seek to  negotiate  a
permanent waiver of the Company's loan covenant  violations,  as well as revised
loan  covenants.  These  negotiations  could  result in new terms which are less
favorable than current terms under existing loan  agreements and could involve a
reduction in  availability  of funds,  an increase in interest rates and shorter
maturities,  among other  things.  If the Company is not  successful in securing
these waivers and loan covenant  amendments,  it may have to seek new financings
from other lenders.  Such alternative  financing  arrangements could likewise be
less  favorable  to the Company  than its  existing  credit  facilities.  If the
Company is unable to either procure  permanent  covenant  violation  waivers and
covenant   amendments   with  respect  to  existing   facilities  or  acceptable
alternative financing, such failures could have a material adverse effect on the
Company's  financial  condition and results of  operations.  No assurance can be
given that the Company will be able to obtain such permanent  covenant violation
waivers and revised loan covenants or refinance its existing obligations or that
the Company will be able to continue operations as a going concern.

Principles of Consolidation

The accompanying  consolidated  financial statements include all of the accounts
of the Company,  its wholly-owned  subsidiary (which was merged into the Company
in May 1999) and its majority-owned joint venture. All significant  intercompany
balances and transactions have been eliminated in consolidation.

Inventories

Inventories  are stated at the lower of average cost or market.  Jobs in process
and finished goods include both the direct and indirect  costs of  manufacturing
such products.

Property and Equipment

Property and equipment is stated on the basis of cost. Depreciation of equipment
and  vehicles is provided  by  straight-line  or  accelerated  methods  over the
estimated  useful lives of the related  assets,  generally three to seven years.
Improvements to leased  properties are amortized on a  straight-line  basis over
the shorter of the term of the respective lease or the estimated useful lives of
the related assets.

Goodwill

Goodwill represents the excess of the purchase price of acquired businesses over
the  fair  value  of  net  assets   acquired  and  is  being  amortized  on  the
straight-line  method over a period of 20 years.  The carrying



                                       31
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

value of goodwill is periodically  evaluated by management based on expectations
of undiscounted  cash flows of the related  business units to determine if there
has been an  impairment  in value.  Accumulated  amortization  was  $938,000 and
$704,000 at December 31, 2000 and 1999, respectively.

Revenue Recognition

Revenues from product sales and related cost of sales (including shipping costs)
are  recognized  upon  shipment of products.  Title and risk of loss pass to the
customer  upon  shipment.   Revenue  from   installation   is  recognized   when
installation is complete.

Advertising

Production   costs   associated  with  advertising  are  expensed  as  incurred.
Communication  costs  associated  with  advertising  are reported as advertising
expense as the related space is used. Prepaid advertising costs were $77,000 and
$177,000 at December 31, 2000 and 1999, respectively.  Advertising costs charged
to expense totaled $1,018,000 in 2000, $918,000 in 1999 and $887,000 in 1998.

Income Taxes

Deferred  income  taxes are  determined  based on the  differences  between  the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect in the years the differences are expected to reverse.

Cash Equivalents

The Company considers all highly liquid investments with original  maturities of
three months or less when purchased to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Earnings Per Share

Basic and diluted earnings per share are calculated in accordance with Statement
of Financial  Accounting  Standards  ("SFAS") No. 128, "Earnings Per Share." For
2000, 1999 and 1998, there was no difference  between basic and diluted earnings
per share.  Stock options of 889,750 for 2000,  866,000 for 1999 and 799,000 for
1998 have been excluded from the calculation of earnings per share in 2000, 1999
and 1998, respectively, as their impact would have been anti-dilutive.



                                       32
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Comprehensive Income and Foreign Currency Translation

Foreign currency  transactions  and financial  statements are translated in U.S.
dollars  at  current  exchange  rates  except  income  and  expenses,  which are
translated at average exchange rates during each reporting  period.  Adjustments
resulting from translations of financial statements are reflected as a component
of comprehensive income.

Accounting Pronouncements

The Company is subject to the provisions of Staff  Accounting  Bulletin  ("SAB")
No. 101, "Revenue Recognition in Financial Statements." SAB 101, as amended, did
not have a material impact on the Company's  consolidated  financial statements.
The Company  adopted the provisions of SFAS No. 133,  "Accounting for Derivative
Financial Instruments and Hedging Activities," as amended,  effective January 1,
2001. The  implementation of this new standard did not have a material effect on
the Company's results of operations or financial position.

Reclassifications

Certain  prior year  amounts have been  reclassified  to conform to current year
presentation.


NOTE 2.  MEXICAN SUBSIDIARIES

In January 2000,  the Company  entered into a Joint Venture  Agreement to open a
new sales office in Mexico City, Mexico. The Company  contributed  approximately
$50,000, for an 80% interest in the venture. The Joint Venture Agreement created
two new  companies,  Open  Plan  Systems,  S. de R.L.  de  C.V.  and  Open  Plan
Servicios,  S. de R.L. de C.V.,  each of which is 80% owned by the Company.  The
Company has reported minority interest related to the earnings and the equity of
the minority partner in the accompanying consolidated financial statements.


NOTE 3.  INVENTORIES

Inventories  are in two main stages of completion and consisted of the following
(in thousands $):

                                                           December 31,
                                                       2000           1999
                                                  ------------------------------

Components and fabric                                $   4,494      $   5,243
Jobs in process and finished goods                       1,784          2,619
                                                  ------------------------------
                                                     $   6,278      $   7,862
                                                  ==============================



                                       33
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 4.  ACCOUNTS RECEIVABLE

Accounts  receivable are shown net of the allowance for doubtful accounts in the
amounts of $499,000 and $205,000 at December 31, 2000 and 1999, respectively.


NOTE 5.  PROPERTY AND EQUIPMENT

Property and equipment by major classification was as follows (in thousands $):

                                                            December 31
                                                       2000             1999
                                                  ------------------------------

Production and warehouse equipment                 $     2,526     $     2,292
Office equipment                                         1,355           1,211
Vehicles                                                   697             510
Leasehold improvements                                     667             561
Construction-in-process                                    345             101
                                                  ------------------------------
                                                         5,590           4,675
Accumulated depreciation and amortization               (3,197)         (2,403)
                                                  ------------------------------
                                                   $     2,393     $     2,272
                                                  ==============================


NOTE 6.  INDEBTEDNESS

Long-term  debt  includes  notes  payable  related to vehicle  purchases and the
Industrial  Revenue  Bonds,  discussed  below.  Future  scheduled  maturities of
long-term debt are as follows:  $195,000 in 2001;  $193,000 in 2002; $165,000 in
2003; $138,000 in 2004; $131,000 in 2005; and $2,000,000 thereafter.

In June 2000, the Company issued $2.5 million Michigan Strategic Fund Industrial
Revenue Bonds ("Industrial  Revenue Bonds") for construction of a new production
facility in Lansing,  Michigan.  The proceeds were placed into an escrow account
with the trustee  until such time as they are used for  building  the  facility.
(See Note 9 for additional  information.)  At the same time, the Company entered
into a letter of credit  facility  with a bank to secure  the  financing  on the
facility.  At December 31,  2000,  the Company had  $2,190,000  of cash and cash
equivalents  externally restricted under the bond indenture agreement,  which is
disclosed in the  consolidated  balance sheets.  Borrowings  associated with the
Industrial  Revenue  Bonds  totaled  $2.5  million at December 31, 2000 and bore
interest at a weekly  variable tax exempt rate of interest based upon the credit
worthiness of the underlying  letter of credit (5.05% at December 31, 2000). The
obligations are secured by substantially  all of the assets of the Company.  The
bond  indenture  and related  agreements  requires  the Company to meet  certain
restrictive  covenants,  including  defined  tangible  net  worth,  an  interest
coverage ratio and certain other covenants. The Company was not in compliance at
December 31, 2000 with certain of the covenants.



                                       34
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


During December 1998, the Company negotiated a new revolving line of credit with
a financial  institution.  The credit  facility  provided for  borrowings  up to
$5,000,000  through December 2001.  During April 2000, the Company  negotiated a
new revolving line of credit with a financial institution, and the prior line of
credit  negotiated  during  December 1998 was paid off in its entirety.  The new
line of credit is secured by  substantially  all assets of the Company.  The new
credit  facility  provided  for  borrowings  up  to  80%  of  eligible  accounts
receivable  plus the lesser of 50% of eligible  inventory or $2,000,000,  with a
maximum  borrowing  amount of  $5,000,000.  The  maximum  borrowing  amount  was
increased,  pursuant to an  amendment by the parties  dated  August 1, 2000,  to
$5,250,000.  Borrowings  under the line of credit  bear  interest  at a floating
rate, which is linked to either LIBOR or prime. Outstanding borrowings under the
line  amounted to $3,366,000 at December 31, 2000 and bore interest at a rate of
8.87%. At December 31, 2000, the Company had $1,884,000 available under its line
of credit.  The letter of credit and line of credit facilities (the "agreement")
are  cross-collateralized.  The  agreement  requires the Company to meet certain
restrictive  covenants,  including  a defined  tangible  net worth,  an interest
coverage ratio and certain other covenants.

At December  31, 2000 and  thereafter,  the Company was not in  compliance  with
certain of the  covenants  contained  in the letter of credit  facility  and the
revolving line of credit agreement.  The Company's  independent auditors, in its
report, have expressed substantial doubt as to the Company's ability to continue
as a going concern. See Note 1 to the consolidated financial statements.

In May 2001, the Company entered into a forbearance  agreement  whereby its bank
agreed to temporarily  waive its existing right to declare defaults  relating to
the  Company's  failure to comply with certain loan  covenants  through June 30,
2001.  The  forbearance  agreement  provides  that the bank  will  refrain  from
exercising  any  rights  based on such a  default,  including  accelerating  the
maturity  of the loans  under the two credit  facilities,  until  after June 30,
2001.  Conditions to the forbearance agreement include a cap on borrowings under
the line of credit of $4,650,000.  Also, any disbursements by the Company of the
approximately  $2.2 million in remaining  proceeds from the  Industrial  Revenue
Bond held as  restricted  cash by the Company are subject to the approval of the
bank in its sole  discretion.  Pursuant to the forbearance  agreement,  the bank
maintains the right to declare a default and  accelerate the loans under the two
facilities  after June 30, 2001 if the parties have not entered into  amendments
to the existing loan arrangements.

Prior to June 30,  2001,  the  Company  and the bank  will seek to  negotiate  a
permanent waiver of the Company's loan covenant  violations,  as well as revised
loan  covenants.  These  negotiations  could  result in new terms which are less
favorable than current terms under existing loan  agreements and could involve a
reduction in  availability  of funds,  an increase in interest rates and shorter
maturities,  among other  things.  If the Company is not  successful in securing
these waivers and loan covenant  amendments,  it may have to seek new financings
from other lenders.  Such alternative  financing  arrangements could likewise be
less  favorable  to the Company  than its  existing  credit  facilities.  If the
Company is unable to either procure  permanent  covenant  violation  waivers and
covenant   amendments   with  respect  to  existing   facilities  or  acceptable
alternative financing, such failures could have a material adverse effect on the
Company's  financial  condition and results of  operations.  No assurance can be
given that the Company



                                       35
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


will be able to obtain such  permanent  covenant  violation  waivers and revised
loan covenants or refinance its existing obligations.

During  2000,  interest of $505,000  was  incurred  on debt  balances,  of which
$59,000 was  capitalized  relative  to the  construction  of the new  production
facility in Lansing, Michigan.


NOTE 7.  SHAREHOLDERS' EQUITY

The Company currently maintains two stock option plans: the 1996 Stock Incentive
Plan (the  "Incentive  Plan") and the 2000 Stock  Option  Plan for  Non-Employee
Directors (the "2000 Outside  Director's  Plan").  During 2000, but prior to the
annual  meeting of  shareholders  in 2000,  the Company  also  maintained a 1996
Option Plan for Non-Employee Directors (the "1996 Outside Director's Plan"). The
Company's  1996  Outside  Director's  Plan  terminated,  pursuant  to its terms,
following the annual  meeting of  shareholders  in 2000, and was replaced by the
2000 Outside  Director's Plan;  however,  options granted under the 1996 Outside
Director's Plan remained outstanding in accordance with their terms.
















                                       36
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 7.  SHAREHOLDERS' EQUITY (CONTINUED)

The  maximum  aggregate  number of shares  of  common  stock  that may be issued
pursuant to the  Incentive  Plan is 400,000.  The  Incentive  Plan  provides for
grants  of  incentive  stock  options,   non-qualified   stock  options,   stock
appreciation  rights,  restricted  stock,  and/or  phantom stock to any officer,
director,  or key employee of the Company.  The Incentive Plan will terminate in
March 2006.

The exercise price of  non-qualified  stock options  granted under the Incentive
Plan must be equal to at least the fair market  value of the common stock on the
date of grant. The aggregate fair market value of common stock (determined as of
the date of the option grant) for which a non-qualified stock option, or related
stock appreciation  rights (no stock  appreciation  rights have been issued) may
for the first  time  become  exercisable  in any  calendar  year may not  exceed
$100,000.  These options have a term of seven years.  Transactions involving the
Incentive Plan are as follows:

                                                                      Average
                                                                      Exercise
                                                         Shares        Price
                                                       -------------------------
Outstanding at December 31, 1998                         185,000       $4.97
       Issued                                             67,000       $2.63
                                                       -------------------------
Outstanding at December 31, 1999                         252,000       $4.35
       Issued                                             47,500       $1.88
       Cancelled                                         (35,750)      $3.30
                                                       =========================
Outstanding at December 31, 2000                         263,750       $4.04
                                                       =========================


The options  outstanding  at December  31, 2000 and 1999 had a weighted  average
remaining  contractual  life of four and five years,  respectively.  For options
outstanding  at December 31, 2000,  78,125  options had exercise  prices between
$5.97 and $9.88 and 185,625 options had exercise prices between $1.88 and $3.88.
For options outstanding at December 31, 1999, 84,375 options had exercise prices
between $5.97 and $9.88 and 167,625  options had exercise  prices  between $2.44
and $3.88. At December 31, 2000, there were 67,188 and 117,375 options that were
exercisable   with  weighted   average  exercise  prices  of  $7.92  and  $2.61,
respectively.  At December 31, 1999,  there were 53,906 and 84,250  options that
were  exercisable  with  weighted  average  exercise  prices of $8.01 and $2.61,
respectively.  The options granted in 2000 and 1999 had a weighted  average fair
value at grant date of $.82 and $1.25 per share, respectively.

On March 15, 2000,  the Company's  Board of Directors  approved the 2000 Outside
Director's Plan. The 2000 Outside  Director's Plan was approved by a vote of the
Company's  shareholders at the 2000 annual meeting of shareholders.  The maximum
aggregate  number of shares of common  stock that may be issued  pursuant to the
2000 Outside  Director's  Plan is 25,000.  The 2000 Outside  Director's  Plan is
scheduled to terminate  following the annual  meeting of  shareholders  in 2005.
Under the 2000  Outside  Director's  Plan,  each  non-employee  director  of the
Company  serving on the Board of Directors on May 15, 2000 was granted an option
to  purchase  1,000  shares of common  stock of the  Company.  Thereafter,  each
non-employee  director serving on the Board of Directors shall receive an option
to purchase  1,000  shares of common stock on the first  business day  following
each annual meeting of shareholders. The exercise




                                       37
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 7.  SHAREHOLDERS' EQUITY (CONTINUED)

price of stock options  granted under the 2000 Outside  Director's  Plan must be
equal to the fair market  value of the common  stock on the date of grant.  Each
option is first  exercisable  on the date,  which is six months from the date of
grant of the  option  and shall  continue  to be  exercisable  for a term of ten
years,  subject to certain  exceptions.  At December 31,  2000,  the Company had
7,000 options  outstanding and  exercisable.  These options had weighted average
remaining  contractual lives of nine years. The exercise price for these options
was $2.00.  In 2000,  the Company  granted  7,000 options under the 2000 Outside
Director's Plan with exercise prices of $2.00.  The weighted  average fair value
of these options at grant date was $.88 per share.

The 1996 Outside Directors' Plan terminated in 2000 following the annual meeting
of  shareholders.  Under the 1996 Outside  Directors'  Plan,  each  non-employee
director of the Company  serving on the Board of  Directors  on July 1, 1996 was
granted  an option to  purchase  1,000  shares of common  stock of the  Company.
Thereafter,  each  non-employee  director  serving  on the  Board  of  Directors
received  an  option to  purchase  1,000  shares  of  common  stock on the first
business day following each annual meeting of  shareholders.  The exercise price
of stock options granted under the 1996 Outside Directors' Plan must be equal to
the fair market value of the common  stock on the date of grant.  Each option is
first exercisable on the date, which is six months from the date of grant of the
option and shall continue to be exercisable for a term of ten years,  subject to
certain exceptions. At December 31, 2000 and 1999, respectively, the Company had
19,000 and 20,000 options outstanding and exercisable. These options outstanding
at December 31, 2000 and 1999 had weighted average  remaining  contractual lives
of seven and nine years,  respectively.  The exercise  prices for these  options
were 4,000 at  $11.75;  4,000 at $5.97;  5,000 at $2.14;  and 6,000 at $2.81 for
2000 and 4,000 at $11.75; 4,000 at $5.97; 6,000 at $2.14; and 6,000 at $2.81 for
1999.  In 1999,  the  Company  granted  6,000  options  under  the 1996  Outside
Directors' Plan with an exercise price of $2.81. The weighted average fair value
of these  options  at grant  date was $1.20 per  share.  1,000  options  with an
exercise price of $2.14 were cancelled during 2000.

The Company has elected to recognize expense for stock-based  compensation under
these  plans  based upon the  intrinsic  value  based  method as  prescribed  by
Accounting Principles Board Opinion No. 25. If the Company had accounted for its
stock options based upon fair values at the date of grant,  consistent with FASB
Statement  No. 123, the net loss would have  increased  by $59,000,  or $.01 per
share, for the year ended December 31, 2000, the net income would have decreased
by $92,000,  or $.02 per share for the year ended  December 31, 1999 and the net
loss  would have  increased  by  $323,000,  or $.07 per share for the year ended
December  31,  1998.  These  amounts  are not  indicative  of future  effects of
applying  the fair  value  based  method  since the  vesting  period was used to
measure compensation  expense. The fair value for these options was estimated at
the  date of  grant  using a  Black-Scholes  option  pricing  model  assuming  a
risk-free  interest  rate of 5.6%,  dividend  yield of 0.0%, a weighted  average
expected  life of the option of 5 years in 2000 and 1999 and 6 years in 1998 and
a volatility factor of .403 for 2000, .461 for 1999 and .522 for 1998.

In 2000, the Company  established the Loan Program (the "Program") to facilitate
purchase of shares of the  Company's  common  stock  pursuant  to the  Company's
Employee Stock Purchase and Bonus Plan (the "Stock  Purchase  Plan").  Under the
Program an eligible  participant may borrow an amount equal to the full purchase
price of shares (at fair market value) of common stock purchased under the Plan.
A total of



                                       38
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 7.  SHAREHOLDERS' EQUITY (CONTINUED)

150,000 shares have been authorized for acquisition  under the Program,  subject
to  adjustment  as a result of  various  changes  in the  capitalization  of the
Company.  Any shares  authorized  but not acquired under the Program will remain
available under the Plan for acquisition outside this Program.  This Program was
only offered  through June 15,  2000.  At December 31, 2000,  loans to employees
totaling approximately $59,000 were outstanding under the Program.

In June 1998,  the Company  sold  200,000  shares of common stock to Great Lakes
Capital,  LLC (GLC) for $2.175 per share and granted  nonqualified stock options
to GLC as follows:

                      Number of                   Exercise
                       Shares                      Price
                      -------------------------------------
                      150,000                       $3.00
                      150,000                       $4.50
                      150,000                       $6.00
                      150,000                       $7.50

The GLC options were not granted  under the Incentive  Plan.  All of the options
are exercisable and expire June 30, 2003.  These options had a weighted  average
fair value at grant date of $.76 per share.

Additionally, the Company and GLC entered into a Voting and Standstill Agreement
whereby GLC will beneficially own no more than 21% of the issued and outstanding
shares of the Company on a fully diluted basis (as described in the  Agreement),
provided  that the shares GLC and its  affiliates  may  acquire  pursuant to the
Incentive  Plan and Outside  Directors Plan shall not be deemed to be additional
shares.  The Voting and Standstill  Agreement was later amended,  pursuant to an
amendment dated July 21, 2000, to increase the beneficial  ownership  limitation
to 25%.

In 2000,  the  Company's  Board of Directors  approved the  repurchase  of up to
100,000  shares of the Company's  common stock.  For the year ended December 31,
2000, the Company  repurchased 50,500 shares of its common stock at an aggregate
cost of $90,000.

On  September  15, 1999,  the Company and certain  investors  purchased  993,542
shares of Common  Stock  held by the  Company's  founder at a price of $2.50 per
share. The transaction resulted in the Company purchasing  approximately 430,000
shares of stock.  In an event  related to this  transaction,  the  Company  then
immediately resold 160,000 shares of Common Stock to affiliates of GLC for $2.50
per share.  This resulted in a net  redemption  by the Company of  approximately
270,000 shares.

The Company has not declared  dividends for any of the three years in the period
ended December 31, 2000.






                                       39
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 8.  INCOME TAXES

The  expense  (benefit)  for income  taxes is  comprised  of the  following  (in
thousands $):
<TABLE>
<CAPTION>
                                                 2000              1999             1998
                                            ---------------- ----------------- ----------------
Current:
<S>                                            <C>              <C>               <C>
   Federal                                     $      -         $     89          $      3
   State and foreign                                 93               11                 1
                                            ---------------- ----------------- ----------------
                                                     93              100                 4
Deferred:
   Federal                                        1,322           (1,322)               (3)
   State and foreign                                156             (156)               (1)
                                            ---------------- ----------------- ----------------
                                                  1,478           (1,478)               (4)

                                            ---------------- ----------------- ----------------
                                               $  1,571         $ (1,378)         $      -
                                            ================ ================= ================
</TABLE>

A reconciliation  of the expense  (benefit) from income taxes for the year ended
December  31, 2000,  1999 and 1998 and the amount  computed by applying the U.S.
statutory federal income tax rate of 34% to income (loss) before income taxes is
as follows (in thousands $):
<TABLE>
<CAPTION>
                                                                    2000              1999               1998
                                                              -------------------------------------------------------
<S>                                                             <C>                <C>               <C>
Income tax expense (benefit) at U.S. statutory rates            $       (998)      $      (203)      $     (1,337)
State taxes, net of federal benefit                                     (117)              (14)              (157)
Amortization of intangibles                                               93                73                 86
Other, net                                                               105                78                 96
Change in valuation allowance                                          2,488            (1,312)             1,312
                                                              -------------------------------------------------------
Total income tax expense (benefit)                               $     1,571       $    (1,378)      $          -
                                                              =======================================================
</TABLE>

The  deferred  income tax  balances at December  31, 2000 and  December 31, 1999
consisted of the following (in thousands $):
<TABLE>
<CAPTION>
                                                                                      2000               1999
                                                                                 ------------------------------------
<S>                                                                                <C>                <C>
Deferred tax assets
   Accounts receivable allowances                                                  $       190        $        78
   Accrued liabilities                                                                      19                222
   Net operating losses                                                                  2,235              1,143
   Other                                                                                    31                 86
   Valuation allowance                                                                  (2,488)                 -
Deferred tax liabilities:
   Tax versus book depreciation                                                             13                (51)
                                                                                 ------------------------------------
                                                                                   $         -        $     1,478
                                                                                 ====================================
</TABLE>



                                       40
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 8.  INCOME TAXES (CONTINUED)

Prior to 1999,  as a result  of  operating  losses  and the  uncertainty  of the
realization of the potential tax benefits of future deductions,  the Company did
not  recognize  potential  income tax benefits of  approximately  $1.3  million.
During  the  last  quarter  of 1999,  the  Company  determined  that it was more
probable  than not that these tax  benefits  would be realized  and reversed the
valuation allowance associated with the income tax benefits. However, during the
fourth quarter of 2000, as a result of operating  losses and the  uncertainty of
the  realization  of potential  tax benefits of future  deductions,  the Company
offset  potential  income tax  benefits of  approximately  $2.5  million  with a
valuation allowance resulting in a net expense for income taxes of approximately
$1.6 million.  The Company will  reevaluate the potential  realizability  of net
deferred tax assets in future periods.

Net operating loss  carryforwards of approximately  $6.0 million begin to expire
in 2013.


NOTE 9.  COMMITMENTS AND CONTINGENCIES

On April 30, 2000, the Company signed a contract for the  construction  of a new
production  facility  in  Lansing,  Michigan.  The  Company  purchased  a 5-acre
building  site and is in the process of  constructing  an  approximately  70,000
square-foot  facility.  The Company expects this project to be completed in July
of 2001. Total costs are currently  estimated to approximate  $2.5 million.  The
ability to complete  construction could be impacted by the Company's  violations
of certain debt covenants. (See Note 6.)

Lease Agreements

The Company  leases  office  space and  production  facilities  in Richmond  and
Lansing. The Lansing lease expired in September 2000, and the Company now leases
its Lansing  facility  on a  month-to-month  basis  pending  the  completion  of
construction of the new facility in Lansing.

In  addition,  the  Company  leases  its sales  offices  under  operating  lease
agreements   expiring  in  various  periods  through   February  2005.   Certain
automobiles are also leased under terms not exceeding three years.  All of these
leases are accounted for as operating leases.

Future minimum lease payments were as follows at December 31, 2000 (in thousands
$):

                     Year                  Lease Payments
                  ---------             --------------------
                     2001                     $   1,194
                     2002                           837
                     2003                           483
                     2004                            50
                     2005                             4
                                        --------------------
                                              $  2,568
                                        ====================



                                       41
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 9.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Rent expense amounted to $1,177,000 in 2000,  $875,000 in 1999 and $1,164,000 in
1998.

Legal Matters

A portion of the potential  consideration for the 1996 acquisition of Immaculate
Eagle,  Inc.  (d/b/a TFM  Remanufactured  Office  Furniture)  ("TFM") was 87,500
shares of common  stock of the  Company,  which was  placed in  escrow,  with an
agreed upon value of $1.3 million, as security for  indemnification  obligations
of the  former  shareholders  of TFM.  In  addition,  under the terms of the TFM
purchase agreement,  if the closing sales price of the Company's common stock on
October  1, 1998 was less than $15 per  share,  the  Company  was to make a cash
payment to the former  shareholders  of TFM equal to the difference  between the
closing  sales price on that date and $15,  multiplied  by the 87,500  shares of
common stock (subject to certain  adjustments,  including  claims by the Company
for  indemnification).  The Company's  common stock traded at $2.25 per share on
October 1, 1998 and,  accordingly,  the amount potentially payable to the former
TFM shareholders was $1,115,625.

Prior to October 1, 1998,  management of the Company reviewed the  circumstances
of the TFM  acquisition  and concluded the  indemnification  obligations  of the
former TFM  shareholders  exceeded the $1.3 million agreed value of the stock in
escrow.  The Company served notice of the  indemnification  claims to the former
TFM shareholders.  The former  shareholders of TFM disputed the  indemnification
claims and pursuant to the purchase  agreement,  the matter went to arbitration.
Based on the indemnification claims, the aggregate $1,115,625 difference between
the stock's market price on October 1, 1998 and the $15 value assumed in the TFM
purchase  agreement  was recorded as a reduction  in goodwill and  shareholders'
equity.

In December 1999, the arbitration  panel ruled that the former TFM  shareholders
had  breached  their  warranties  in three  instances  and  awarded  the Company
$120,000.  As a result,  the Company paid approximately $1 million to the former
TFM shareholders,  which was recorded as an increase in goodwill. The former TFM
shareholders  were also awarded  reimbursement  of certain  legal fees and other
costs and those  amounts are  included in the  arbitration  costs of  $1,067,000
reflected in the consolidated statements of operations.

In June 2000,  the Company  received  the final  results of certain  arbitration
matters  related to the  finalization  of the purchase  price for TFM. The final
arbitration  award  required the Company to pay $564,000 in fees and expenses to
the former  shareholders of TFM and the  arbitrators.  As a result,  the Company
took additional  expense of $142,000 in the second quarter of 2000 to record the
final results of these proceedings in the financial statements. The Company paid
all amounts to these parties in July 2000.


NOTE 10.  EMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering substantially all employees
meeting  eligibility  requirements.  Under the plan,  participants  may elect to
contribute  a  specified  portion  of  their  compensation  to the plan on a tax
deferred   basis.   The  Company  will  match  one-half  of  the   participant's



                                       42
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 10.  EMPLOYEE BENEFIT PLAN (CONTINUED)

contributions up to six percent of compensation. The Company may make additional
contributions at its discretion.

The  Company  recorded  total  expense  related to the plan of $166,000 in 2000,
$147,000 in 1999 and $126,000 in 1998.


NOTE 11.  RELATED PARTY TRANSACTIONS

The  Company  incurred  legal fees of  $136,000  in 2000,  $594,000  in 1999 and
$258,000  in 1998 to a law firm in which one of the  Company's  directors  was a
principal  during 1998, 1999 and through  February 1, 2000. The Company also had
approximately  $1,300 and $150,000 in accounts  payable to this firm at December
31, 2000 and 1999, respectively.

The Company  purchased and leased a total of 8 and 12 vehicles in 2000 and 1999,
respectively,  from a company whose  chairman is a director of the Company.  The
Company  purchases  directors  and  officers  insurance  from  a  company  whose
President is a director of the Company.


NOTE 12.  CONCENTRATIONS OF CREDIT RISK AND FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to concentrations of
credit risk consist  primarily of accounts  receivable.  The Company markets its
products and services to customers located primarily in the Eastern and Mid-West
regions of the United  States.  Production  is primarily in response to specific
customer orders and larger jobs typically require advance deposits.  The Company
performs  credit  evaluations of its customers prior to delivery or commencement
of services and normally does not require collateral. Payments are typically due
within 30 days of billing.  The Company  maintains  an  allowance  for  doubtful
accounts and losses have historically been within management's expectations.

The  carrying  values  of  amounts   classified  as  current   assets,   current
liabilities,  cash  and  cash  equivalents  externally  restricted  under a bond
indenture agreement, and long-term debt approximate fair value.


NOTE 13.  SIGNIFICANT FOURTH QUARTER 2000 ADJUSTMENTS

During the fourth  quarter of 2000,  the Company  recorded  charges (on a pretax
basis) of  approximately  $3.0 million.  The largest of these charges relates to
inventory  adjustments (recorded in cost of sales) of approximately $2.4 million
caused  by  book  to  physical  variances   resulting  from  physical  inventory
observations  as well as the  write-off  of  certain  obsolete  and  slow-moving
inventory  items.  The  remainder of these  charges  relates to increases in the
allowance  for  doubtful  accounts of  $220,000  as well as various  adjustments
required by year-end accounting  reconciliations and other matters.  The Company
has recorded these charges in the fourth quarter of 2000, as it cannot determine
the amount of charges  applicable to preceding  interim periods.  See Note 8 for
information on income taxes.



                                       43
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 14.  OPERATIONAL RESTRUCTURING

During the second quarter of 1998, the Company  recorded a restructuring  charge
of  $1,290,000  related  to  warehouse  consolidation,  returning  to a focus on
remanufacturing and consolidating sales offices.  Significant  components of the
operational  restructuring  charge were  $138,000 for  severance  pay,  $418,000
related to anticipated  payouts under lease  agreements and estimated  losses of
$627,000 on the disposal of certain fixed assets.  In connection with this plan,
the  Company  reduced  sales and  administrative  staffing by  approximately  30
people.

The  Company  has  disposed  of  all  the  fixed  assets   contemplated  in  the
restructuring and incurred all costs associated with the restructuring  plan. No
adjustment to the original charge recorded was necessary.


NOTE 15.  VALUATION AND QUALIFYING ACCOUNTS

Activity related to valuation and qualifying accounts is as follows:
<TABLE>
<CAPTION>
                                                                    Allowance for         Inventory
                                                                       Doubtful         Obsolescence
                                                                       Accounts            Reserve
                                                                       --------            -------
<S>                                                                       <C>                  <C>
Balance December 31, 1997                                                  152                  --
Charges to expense                                                         166                 314
Deductions - net write-off of uncollectible accounts                       (43)

Balance December 31, 1998                                                  275                 314
Charges to expense                                                          57                  --
Deductions - net write-off of uncollectible accounts or                   (126)                (88)
   obsolete inventory, as applicable

Balance December 31, 1999                                                  206                 226
Charges to expense                                                         480                 (55)
Deductions - net write-off of uncollectible accounts or                   (187)                (36)
   obsolete inventory, as applicable (1)

Balance December 31, 2000                                                  499                 135
</TABLE>

-----------

(1) This does not include the write-off of obsolete and slow-moving inventory in
the fourth quarter of 2000 in conjunction with the physical counts of inventory.




                                       44
<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 2000


NOTE 16.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Results of operations  for each of the quarters  during the years ended December
31, 2000 and 1999 are as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
                                                                        Quarter Ended
                                               ---------------------------------------------------------------
                                                  March            June         September      December
                                                   31st            30th           30th          31st(1)
Year ended December 31, 2000
<S>                                            <C>             <C>             <C>            <C>
Net sales                                      $     9,333     $    10,459     $    10,398    $    12,485
Gross Profit                                   $     2,913     $     2,771     $     3,013    $       820
Operating income (loss)                        $       324     $      (342)    $       324    $    (2,744)
Income (loss) before income taxes              $       228     $      (466)    $       201    $    (2,899)
Net income (loss)                              $       124     $      (267)    $       120    $    (4,484) (1)
Earnings (loss) per common share               $       .03     $      (.06)    $       .03    $     (1.03)



Year ended December 31, 1999

Net sales                                      $     7,509     $     8,878     $     8,945      $   9,726
Gross Profit                                   $     2,121     $     2,849     $     2,874      $   2,882
Operating income (loss) (2)                    $        63     $       226     $       137      $    (845)
Income (loss) before income taxes (2)          $        26     $       185     $       101      $    (908)
Net income (loss) (2)                          $        26     $       185     $       101      $     470 (3)
Earnings (loss) per common share               $       .01     $       .04     $       .02      $     .11

</TABLE>

-----------

    (1) Net  income  (loss) for fourth  quarter of 2000  includes  the effect of
        establishing  a  valuation  allowance  against net  deferred  tax assets
        resulting  in a net  expense  for  income  taxes of  approximately  $1.6
        million.  See Note 13 for information on fourth quarter 2000 adjustments
        relating to inventory and other items.

    (2) Results of operations for 1999 include the impact of  arbitration  costs
        of $1.1 million, of which $786,000 was recorded in the fourth quarter.

    (3) Net  income for the fourth  quarter of 1999  includes  the effect of the
        reversal of the valuation  allowance  against net deferred tax assets of
        approximately $1.3 million.




                                       45
<PAGE>

ITEM 9.      CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
             FINANCIAL DISCLOSURE

         None.



































                                       46
<PAGE>

                                    PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

         The  following  information  sets  forth  the  names,  ages,  principal
occupations and business experience for the past five years for all directors.

         Theodore  L.  Chandler,  Jr.,  age 49, has been Senior  Executive  Vice
President of LandAmerica  Financial Group, Inc., a title insurance and financial
services  company,  since  February 1, 2000.  Prior to that time,  Mr.  Chandler
served as a Vice  President and a director of the law firm of Williams,  Mullen,
Clark & Dobbins  in  Richmond,  Virginia,  positions  he held for more than five
years. He is a director of LandAmerica and Hilb, Rogal and Hamilton Company. Mr.
Chandler is a member of the Audit Committee and the Executive  Committee and has
been a director of the Company since 1996.

         J. Wesley Hall,  age 63,  retired as Chairman of National Card Control,
Inc., a credit card  services  company and  wholly-owned  subsidiary  of Cendant
Corporation,  a position he held for more than five years, in December 2000. Mr.
Hall is a member of the  Compensation  Committee  and has been a director of the
Company since 2000.

         John L. Hobey, age 54, has been Chief Executive  Officer of the Company
since June 1998.  From July 1997 to June 1998,  he was  employed  by Great Lakes
Capital,  LLC, an affiliate  of the Company  ("Great  Lakes"),  and he currently
remains a principal  of Great  Lakes.  Prior to July 1997,  Mr.  Hobey was Chief
Executive  Officer of the Olofsson  Corporation,  a machine tool manufacturer in
Lansing,  Michigan,  a position he held for more than five years. He is a member
of the Executive Committee and has been a director of the Company since 1998.

         Anthony F. Markel, age 59, has been President of Markel Corporation, an
insurance brokerage company,  since 1992. Mr. Markel is a director of Markel and
Hilb, Rogal & Hamilton Company.  He is Chairman of the Executive Committee and a
member of the  Compensation  Committee.  Mr.  Markel has been a director  of the
Company since 1989 and Chairman of the Board of the Company since 1998.

         Robert F. Mizell, age 44, has been Senior Vice President and a director
of Davenport & Company  LLC, an  investment  banking  company,  since 1988.  Mr.
Mizell  directs  Davenport's  Corporate  Finance  Department,  and  he  is  also
President  of  Davenport  Financial  Advisors,  LLC. He is Chairman of the Audit
Committee and a member of the Executive Committee and has been a director of the
Company since 1996.

         Edwin W.  Mugford,  age 65,  has been  President  and  Chief  Executive
Officer of Royal  Oldsmobile-Isuzu  Inc.,  an automobile  dealership  located in
Richmond, Virginia, since 1971. Mr. Mugford has also been President of Key Royal
Reinsurance  Company Ltd., an automobile  insurance company located in Richmond,
Virginia,  since 1995. He is a member of the Compensation Committee and has been
a director of the Company since 1998.

         Troy A. Peery,  Jr.,  age 55, has been a private  investor and owner of
Peery  Enterprises,  Inc. since January 1999.  From 1985 until his retirement in
November  1998,  he was President  and Chief  Operating  Officer and director of
Heilig-Meyers  Company,  a national  retailer of home furniture and  furnishings
headquartered in Richmond, Virginia. He is a director of S&K Famous Brands, Inc.
Mr. Peery is Chairman of the  Compensation  Committee and has been a director of
the Company since 1989.



                                       47
<PAGE>

         William  Sydnor  Settle,  age 67,  has been  Chairman  of  Great  Lakes
Capital, Inc. ("GLC"), a company primarily engaged in leveraged buyouts of other
entities  and an  affiliate  of Great  Lakes,  since  1990.  Mr.  Settle is also
Chairman and a principal of Great Lakes.  He is a member of the Audit  Committee
and has been a director of the Company since 1998.

Executive Officers

         The  following  information  sets  forth  the  names,  ages,  principal
occupations  and business  experience  for the past five years for all executive
officers and significant  employees.  Such  information  with respect to John L.
Hobey, Chief Executive Officer, is set forth above.

         Stephen P. Hindle,  age 44, has been Vice President - Sales & Marketing
of the Company since January 31, 2000. Mr. Hindle was Regional Vice President of
the Company from December  1997 to December  1999,  Regional  Sales Manager from
January  1997 to  November  1997 and  Director of  Marketing  from March 1996 to
December 1996.

         Robert E.  O'Neil,  Jr.,  age 51,  has been Vice  President  - National
Accounts of the Company  since  December  1997.  From  November 1996 to November
1997,  he was Vice  President - Sales of the  Company.  From  September  1994 to
November 1996, he was Vice President - Sales of Superior Chaircraft Corporation,
a seating manufacturing company.

         Timmouthy G. Zemer, age 32, has been Vice President - Operations of the
Company  since  May  1997.  From  June  1994 to May  1997,  he was  Director  of
Operations of the Company.















                                       48
<PAGE>

ITEM 11.     EXECUTIVE COMPENSATION

Executive Compensation

         The following table sets forth, for the fiscal years ended December 31,
2000, 1999 and 1998, the compensation paid by the Company to the Company's Chief
Executive  Officer,  and each  other  executive  officer  earning  in  excess of
$100,000 during 2000, in all capacities in which they served:

                           Summary Compensation Table
<TABLE>
<CAPTION>
                                                                                  Long Term
                                                                                Compensation
                                              Annual Compensation                  Awards
                                  --------------------------------------------   ----------
                                                                                 Securities
Name and                                                      Other Annual       Underlying          All Other
Principal Position          Year    Salary       Bonus        Compensation       Options (#)      Compensation (1)
------------------          ----    ------       -----        ------------       -----------      ----------------
<S>                         <C>     <C>          <C>              <C>               <C>                 <C>
John L. Hobey (2)           2000    $168,846     $  --             *                25,000              $4,628
Chief Executive Officer     1999     160,000        --             *                25,000               4,591
                            1998      83,962        --             *                25,000                 --

William F. Crabtree (3)     2000     125,308        --             *                12,500               2,002
Former Chief Financial      1999     120,000        --             *                12,500               3,302
  Officer                   1998      69,322        --             *                12,500               1,937

Stephen P. Hindle (4)       2000     109,576      5,000            *                 1,500               3,263
Vice President - Sales &
  Marketing

Robert E. O'Neil, Jr.       2000     124,973      5,000            *                 1,000               3,617
Vice President - National   1999     119,931      5,000            *                 2,500               3,619
  Accounts                  1998     119,931     10,000            *                   --                9,270

Neil F. Suffa (5)           2000      97,500      5,000            *                 1,500               2,928
Former Chief Financial      1999      72,531      5,000            *                 3,500               2,302
  Officer and Corporate     1998      63,769      5,000            *                 2,500               1,913
  Controller

Timmouthy G. Zemer (6)      2000      99,423      5,000            *                 1,000               2,992
Vice President -
  Operations
</TABLE>
__________________

*    The dollar value of perquisites and other personal benefits received by the
     named executive officer during the fiscal year did not exceed the lesser of
     $50,000 or 10% of the total  amount of salary and bonus  reported  for that
     year.

(1)  The amounts shown represent  employer  contributions  for each of the named
     executive  officers to the Company's 401(k) Plan to match elective deferral
     contributions made by each to such Plan.
(2)  Mr. Hobey's employment with the Company commenced on June 17, 1998.
(3)  Mr.  Crabtree's  employment with the Company commenced on June 17, 1998 and
     terminated on July 1, 2000. The amounts shown for 2000 include  payments to
     Mr. Crabtree under the terms of a severance agreement with the Company.
(4)  Mr. Hindle became an executive  officer of the Company on January 31, 2000.
     The amounts shown for 2000 include all  compensation  paid to Mr. Hindle by
     the Company from January 1, 2000.


                                       49
<PAGE>

(5)  Mr. Suffa's employment with the Company terminated on December 31, 2000.
(6)  Mr. Zemer  became an executive  officer of the Company on October 25, 2000.
     The amounts  shown for 2000 include all  compensation  paid to Mr. Zemer by
     the Company from January 1, 2000.

         The  executive  officers of the Company  participate  in other  benefit
plans  provided to all full-time  employees of the Company who meet  eligibility
requirements, including group health, dental, disability and life insurance.

Stock Options

         The following  table contains  information  concerning  grants of stock
options to the executive officers named in the Summary Compensation Table during
the fiscal year ended December 31, 2000:

                        Option Grants In Last Fiscal Year
                               (Individual Grants)
<TABLE>
<CAPTION>
                                                   Percent of Total
                           Number of Securities   Options Granted to   Exercise or                        Grant Date
                            Underlying Options       Employees in       Base Price       Expiration     Present Value
Name                           Granted (1)            Fiscal Year       ($/Sh) (2)        Date (3)         ($) (4)
----                           -----------            -----------       ----------        --------         -------
<S>                               <C>                    <C>             <C>              <C>              <C>
John L. Hobey                     25,000                 52.6%           $1.875           1/31/06          $20,500

William F. Crabtree               12,500 (5)             26.3%           $1.875           1/31/06          $10,250

Stephen P. Hindle                  1,500                  3.2%           $1.875           1/31/06           $1,230

Robert E. O'Neil, Jr.              1,000                  2.1%           $1.875           1/31/06             $820

Neil F. Suffa                      1,500 (6)              3.2%           $1.875           1/31/06           $1,230

Timmouthy G. Zemer                 1,000                  2.1%           $1.875           1/31/06             $820

</TABLE>
___________________

(1)  The options  listed in the table were  granted on January 31, 2000 and vest
     25% per year commencing six months after the date of grant.
(2)  The exercise  price for the options  listed in the table was the average of
     the high and low trading  prices of the Common  Stock on the date of grant.
     The  exercise  price may be paid in cash,  in shares of Common Stock of the
     Company valued at fair market value on the date of exercise, or pursuant to
     a cashless exercise procedure under which the optionee provides irrevocable
     instructions to a brokerage firm to sell the purchased  shares and to remit
     to the Company,  out of the sale proceeds,  an amount equal to the exercise
     price plus all required withholding and other deductions.
(3)  The  options  listed in the table  expire  January  31,  2006.  An  earlier
     expiration  date may apply in the event of the  optionee's  termination  of
     employment, retirement, death or disability.
(4)  The fair value for these options was estimated at the date of grant using a
     Black-Scholes  option pricing model  assuming a risk-free  interest rate of
     5.6%,  dividend  yield of 0.0%,  a weighted  average  expected  life of the
     option of 5 years and a volatility factor of .403 for 2000.
(5)  The options granted to Mr. Crabtree expired on September 29, 2000 following
     the termination of his employment with the Company.
(6)  All  options  held by Mr.  Suffa  expired on March 31, 2001  following  the
     termination of his employment with the Company.





                                       50
<PAGE>

Option Exercises and Holdings

         None of the executive officers named in the Summary  Compensation Table
exercised  options during the fiscal year ended December 31, 2000. The following
table sets forth  information with respect to the value of all unexercised stock
options held by such officers as of the end of the fiscal year:
<TABLE>
<CAPTION>
                          Fiscal Year End Option Values

                                          Number of Securities                       Value of Unexercised
                                         Underlying Unexercised                      In-the-Money Options
                                       Options at Fiscal Year End                   at Fiscal Year End (1)
                                       --------------------------                   ----------------------
Name                                Exercisable         Unexerciseable        Exercisable         Unexerciseable
----                                -----------         --------------        -----------         --------------
<S>                                    <C>                    <C>                  <C>                  <C>
John L. Hobey                          56,250                 18,750               --                   --

William F. Crabtree                      -- (2)                -- (2)              --                   --

Stephen P. Hindle                      17,875                  2,375               --                   --

Robert E. O'Neil, Jr.                  23,375                  5,125               --                   --

Neil F. Suffa                          12,593.75 (3)           3,656.25 (3)        --                   --

Timmouthy G. Zemer                     18,218.75               4,031.25            --                   --

</TABLE>
_______________

(1)  The value of the  unexercised  options at fiscal year end is  calculated by
     determining  the  difference  between the fair  market  value of the Common
     Stock on December  31, 2000 and the  exercise  price of such  options.  The
     average of the high and low sales prices of the Common Stock of the Company
     on the last  trading day prior to  December  31,  2000,  as reported by The
     Nasdaq National Market,  was $1.625.  All of the options  identified in the
     table had an exercise  price that was higher  than  $1.625 on December  31,
     2000, and therefore all of the options were out-of-the money on that date.
(2)  All options held by Mr.  Crabtree  expired on September 29, 2000  following
     the termination of his employment with the Company.
(3)  All  options  held by Mr.  Suffa  expired on March 31, 2001  following  the
     termination of his employment with the Company.


Directors' Compensation

         Each  non-employee  director of the Company receives an annual retainer
of $5,000 payable quarterly, a fee of $1,000 for each Board meeting attended and
a fee of $500  for  each  committee  meeting  attended.  Each  director  is also
reimbursed for certain expenses  incurred in connection with attendance at Board
and committee meetings.

         Effective May 12, 2000, the Company  adopted the 2000 Stock Option Plan
for Non-Employee  Directors (the "2000 Outside  Directors'  Plan").  The maximum
aggregate  number of shares of Common  Stock that may be issued  pursuant to the
2000 Outside  Directors'  Plan is 25,000.  The 2000 Outside  Directors'  Plan is
administered  by the  Compensation  Committee  of the Board of  Directors of the
Company,  and will  terminate  following the annual meeting of  shareholders  in
2005. The 2000 Outside  Directors'  Plan replaced the 1996 Stock Option Plan for
Non-Employee  Directors (the "1996 Outside Directors'  Plan"),  which terminated
following the annual meeting of shareholders  in 2000. All



                                       51
<PAGE>

outstanding  options  granted  under the 1996 Outside  Director's  Plan remained
outstanding in accordance with their terms.

         Under the 2000 Outside  Directors' Plan, each non-employee  director of
the  Company  serving on the Board of  Directors  receives an option to purchase
1,000 shares of Common Stock on the first  business  day  following  each annual
meeting of  shareholders.  The exercise price of stock options granted under the
2000  Outside  Directors'  Plan is equal to the fair market  value of the Common
Stock on the date of grant.  Each  option is granted for a term of ten years and
is first  exercisable  on the date that is six months  from the date of grant of
the  option.  Options  granted  under the 2000  Outside  Directors'  Plan may be
exercised  in whole or in part at any time upon  payment by the  optionee of the
exercise  price in cash or by  surrendering  previously-owned  shares  of Common
Stock to the Company with a fair market value not less than the exercise  price.
In addition, the Company will cooperate in a cashless exercise of an option upon
the request of a participant.

         Prior to its termination,  under the 1996 Outside Directors' Plan, each
non-employee  director of the Company serving on the Board of Directors received
an option to purchase  1,000  shares of Common  Stock on the first  business day
following each annual meeting of shareholders.  The terms of the options granted
under the 1996 Outside  Directors' Plan were similar to the terms of the options
that are being granted under the 2000 Outside Directors' Plan.

Compensation Committee Interlocks and Insider Participation

         Theodore L. Chandler,  Jr. served on the Compensation  Committee of the
Board of  Directors  until May 12,  2000.  Prior to February  1, 2000,  he was a
member of the law firm of  Williams,  Mullen,  Clark & Dobbins,  which serves as
counsel to the Company.















                                       52
<PAGE>

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Management

         The following table sets forth certain  information with respect to the
beneficial  ownership  of shares of Common  Stock as of March 9,  2001,  by each
director  and nominee of the  Company,  by those  current  and former  executive
officers  named in the  Summary  Compensation  Table set forth under the caption
"Executive  Compensation"  in Item 11  above,  and by all of the  directors  and
executive officers as a group.
<TABLE>
<CAPTION>
                                            Amount and Nature of Beneficial Ownership (1)
                                      ----------------------------------------------------------

                                                                        Acquirable Within           Percent of
Name                                          Common Stock                 60 Days (2)               Class (3)
----                                          -------------                -----------               ---------
<S>                                              <C>                         <C>                        <C>
Theodore L. Chandler, Jr.                         25,000                       5,000                     *
William F. Crabtree                              211,000 (4)                 600,000 (5)                16.4%
J. Wesley Hall                                   375,900                       1,000                     8.7%
Stephen P. Hindle                                    200                      17,875                     *
John L. Hobey                                    262,211 (4)                 656,250 (5)                18.4%
Anthony F. Markel                                559,035 (6)                   5,000                    13.0%
Robert F. Mizell                                  27,500                       5,000                     *
Edwin W. Mugford                                 157,545                       2,000                     3.7%
Robert E. O'Neil, Jr.                              3,000                      45,875                     1.1%
Troy A. Peery, Jr.                               174,376                       5,000                     4.1%
William Sydnor Settle                            260,211 (4)                 602,000 (5)                17.5%
Neil F. Suffa                                      7,093                      12,593.75 (7)              *
Timmouthy G. Zemer                                 5,973                      18,218.75                  *

All directors and executive
  officers as a group (11
  persons)                                     1,646,951                     763,218.75                 47.1%
</TABLE>
___________________

*    Percentage of ownership is less than one percent of the outstanding  shares
     of Common Stock of the Company.

(1)  Beneficial  ownership has been determined in accordance with the provisions
     of Rule 13d-3 under the  Securities  Exchange Act of 1934,  as amended (the
     "Exchange  Act"),  under  which,  in  general,  a person  is deemed to be a
     beneficial  owner of a  security  if he has or shares  the power to vote or
     direct  the  voting of the  security  or the power to dispose or direct the
     disposition of the security,  or if he has the right to acquire  beneficial
     ownership of the security within 60 days.
(2)  The amounts  shown  represent  shares of Common Stock that can be purchased
     upon the exercise of vested stock options.
(3)  Percentages for shares  beneficially owned are based on 4,337,391 shares of
     Common Stock issued and outstanding at March 9, 2001.
(4)  The amount shown includes 204,000 shares of Common Stock beneficially owned
     by Great Lakes, of which Messrs. Crabtree, Hobey and Settle are principals.
(5)  The  amount  shown  includes  600,000  shares of Common  Stock  that may be
     acquired  pursuant to stock  options held by Great Lakes,  of which Messrs.
     Crabtree, Hobey and Settle are principals.




                                       53
<PAGE>

(6)  The amount shown includes 264,817 shares of Common Stock beneficially owned
     by a family limited partnership. Mr. Markel has sole voting and dispositive
     power for the general partner of the family limited partnership.
(7)  The options shown in the table for Mr. Suffa expired  unexercised  on March
     31, 2001.

Security Ownership of Certain Beneficial Owners

         The  persons,  groups  or other  entities  known by the  Company  to be
beneficial owners of more than five percent of the outstanding  shares of Common
Stock as of March 9, 2001 are set forth in the following table:
<TABLE>
<CAPTION>
Name and Address                                            Number of Shares
of Beneficial Owner                                      Beneficially Owned (1)           Percent of Class (2)
-------------------                                      ----------------------           --------------------
<S>                                                          <C>                                  <C>
Great Lakes Capital, LLC                                     1,047,250 (3)                        21.0%
W. Sydnor Settle
Thomas H. Corson
William F. Crabtree
John L. Hobey
Charles B. Kaufmann, III
Thomas J. McGrath
  310 South Street
  Morristown, NJ. 07960

Anthony F. Markel                                             564,035 (4)                         13.0%
  c/o Markel Corporation
  4521Highwoods Parkway
  Glen Allen VA 23060-6148

Royce & Associates, Inc.                                      407,600 (5)                         9.4%
Charles M. Royce
  1414 Avenue of the Americas
  New York, New York  10019

SAFECO Resource Series Trust                                  331,900 (6)                         7.7%
  10865 Willows Road NE
  Redmond, Washington  98052
SAFECO Asset Management Company
  601 Union Street, Suite 2500
  Seattle, Washington  98101
SAFECO Corporation
  SAFECO Plaza
  Seattle, Washington  98185

J. Wesley Hall                                                376,900 (7)                         8.7%
  15 Broad Run Road
  Manakin-Sabot, VA 23103

John C. Cullather                                             232,650 (8)                         5.4%
  16 Ellensview Circle
  Richmond, Virginia  23226
</TABLE>

                                       54
<PAGE>
__________________

(1)  Beneficial  ownership has been determined in accordance with the provisions
     of Rule 13d-3 under the Exchange Act, under which, in general,  a person is
     deemed to be a beneficial owner of a security if he has or shares the power
     to vote or direct  the  voting of the  security  or the power to dispose or
     direct the  disposition of the security,  or if he has the right to acquire
     beneficial ownership of the security within 60 days.
(2)  Percentages for shares  beneficially owned are based on 4,337,391 shares of
     Common Stock issued and outstanding at March 9, 2001.
(3)  In Amendment No. 2 to a Joint  Schedule 13D filed with the SEC on September
     12, 2000, Great Lakes Capital, LLC reported beneficial ownership of 804,000
     shares of Common Stock.  Of that amount,  Great Lakes  reported that it had
     sole voting and dispositive  power with respect to 204,000 shares of Common
     Stock and it would have,  upon the exercise of certain stock options,  sole
     voting and dispositive  power with respect to an additional  600,000 shares
     of Common Stock. Each of Messrs. Settle, Corson, Crabtree,  Hobey, Kaufmann
     and McGrath  reported  that he had sole voting and  dispositive  power with
     respect to 56,211,  53,211, 7,385, 58,211, 6,771 and 3,211 shares of Common
     Stock,  respectively.  Each of Messrs. Settle,  Crabtree and Hobey reported
     that he would have, upon the exercise of certain stock options, sole voting
     and  dispositive  power with  respect to an  additional  2,000,  25,000 and
     37,500 shares of Common Stock,  respectively.  The amounts  reported in the
     Joint  Schedule 13D have been adjusted for purposes of the table to reflect
     the  expiration of Mr.  Crabtree's  options on September 29, 2000 following
     the  termination  of his  employment  with the  Company  and the vesting of
     options held by Mr. Hobey with respect to an  additional  18,750  shares of
     Common Stock.
(4)  Mr. Markel has beneficial  ownership of 564,035 shares of Common Stock,  of
     which  299,218  shares  are  held  directly  and  264,817  shares  are held
     indirectly through a family limited partnership. Mr. Markel has sole voting
     and  dispositive  power  for the  general  partner  of the  family  limited
     partnership.
(5)  In Amendment  No. 1 to Schedule 13G filed with the SEC on February 5, 2001,
     Royce & Associates, Inc. and Charles M. Royce reported beneficial ownership
     as of December 31, 2000 of 407,600 shares of Common Stock.
(6)  In Amendment  No. 5 to Schedule 13G filed with the SEC on January 23, 2001,
     SAFECO Resource Series Trust,  SAFECO Asset  Management  Company and SAFECO
     Corporation  reported  beneficial  ownership  as of  December  31,  2000 of
     331,900 shares of Common Stock.  The Schedule 13G reported that such shares
     were owned beneficially by registered investment companies for which SAFECO
     Asset  Management  Company  serves as  investment  adviser and included the
     shares beneficially owned by SAFECO Resource Series Trust.
(7)  In Amendment  No. 1 to Schedule 13D filed with the SEC on May 17, 2001,  J.
     Wesley Hall reported beneficial ownership as of that date of 376,900 shares
     of Common Stock.  Mr. Hall reported that he had sole voting and dispositive
     power with respect to all such shares.
(8)  In a Schedule 13D filed with the SEC on August 17, 2000,  John C. Cullather
     reported  beneficial  ownership  as of June 18,  2000 of 232,650  shares of
     Common  Stock.  Of that amount,  Mr.  Cullather  reported  that he had sole
     voting and dispositive power with respect to 226,144 shares of Common Stock
     and shared  voting and  dispositive  power with  respect to 7,506 shares of
     Common Stock.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Exchange Act requires the Company's  directors and
executive  officers  and  persons  who  beneficially  own  more  than 10% of the
Company's  Common  Stock to file  initial  reports of  ownership  and reports of
changes  in  ownership  of  Common  Stock  with  the   Securities  and  Exchange
Commission.  Such persons are required by  Commission  regulation to furnish the
Company  with copies of all  Section  16(a)  forms they file.  To the  Company's
knowledge, based solely upon a review of the copies of such reports furnished to
the Company,  the Company  believes  that all  applicable  Section  16(a)



                                       55
<PAGE>

filing  requirements were satisfied for events and transactions that occurred in
2000, except that Stephen P. Hindle  inadvertently  filed late a Form 3 in March
2000.


ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions With Management

         John L.  Hobey,  the  Company's  Chief  Executive  Officer,  William F.
Crabtree,  the Company's  former Chief  Financial  Officer,  and William  Sydnor
Settle, a director of the Company,  are principals of Great Lakes and GLC. Great
Lakes,  GLC and the Company  entered into a Management and Consulting  Agreement
(the  "Consulting  Agreement")  and the Voting  and  Standstill  Agreement  (the
"Standstill Agreement") in June 1998. Great Lakes, GLC and the Company agreed to
certain amendments to the Standstill Agreement in July 2000 to allow Great Lakes
and certain of its affiliates to acquire  additional  shares of Common Stock for
investment purposes.

         Under the Consulting  Agreement,  Great Lakes agreed to provide certain
management  and  consulting  services to the  Company  for an  18-month  period,
including making available to the Company two of its members,  Messrs. Hobey and
Crabtree,  to serve as Chief  Executive  Officer  and Chief  Financial  Officer,
respectively,  of the Company.  In  connection  with the  Consulting  Agreement,
Messrs. Hobey and Crabtree each entered into a written employment agreement with
the Company for a term of 18 months  commencing  on June 17,  1998.  The Company
also appointed Messrs. Hobey and Settle to its Board of Directors. In connection
with the execution of the Consulting  Agreement,  Great Lakes purchased  200,000
shares of Common Stock  directly from the Company.  Also, as  consideration  for
services  under the  Consulting  Agreement,  Great  Lakes  acquired an option to
purchase up to 600,000 shares of the Common Stock (the "Option").  The Option is
fully  vested and  immediately  exercisable  by Great Lakes in blocks of 150,000
shares each at exercise prices of $3.00,  $4.50, $6.00 and $7.50,  respectively.
The option expires June 30, 2003.

         Under the Standstill  Agreement,  GLC and Great Lakes would, during the
duration  of the  Agreement,  take such  actions as may be  required so that the
shares of Common  Stock  beneficially  owned and entitled to be voted by GLC and
Great Lakes and their affiliates would be voted (i) with respect to the nominees
to the Board of Directors of the Company, in accordance with the recommendations
of the Board,  and (ii) with  respect to any election  contest  initiated by any
person in connection  with a tender offer,  in the same  proportion as the total
votes cast by or on behalf of all of the Company's shareholders (other than GLC,
Great Lakes and their affiliates).  In all other matters to be voted upon by the
Company's  shareholders,  Great Lakes and its affiliates are permitted under the
Standstill Agreement to vote in their independent judgment,  notwithstanding the
recommendation  of  the  Board  of  Directors.  The  Standstill  Agreement  also
prohibits Great Lakes and its affiliates from  beneficially  owning greater than
25% of the outstanding shares of the Company's common stock.

         Anthony F. Markel, Chairman of the Board and a director of the Company,
is the President and a director of Markel.  Evanston Insurance Company, a wholly
owned  subsidiary of Markel,  provided  directors and officers  insurance to the
Company during 2000 at fees that are customary for such services.







                                       56
<PAGE>

                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      (a)    Financial  statements,  financial  statement  schedules and reports
             included in this Annual Report on Form 10-K

             (1)    Financial Statements

                    The  response to this  portion of Item 14 is  submitted as a
                    separate section of this report.

             (2)    Financial Statement Schedules

                    Schedule II - Valuation and Qualifying Accounts, for each of
                    the three years in the period  ending  December 31, 2000, is
                    included in Note 15 of the Notes to  consolidated  financial
                    statements  on page 44 of  this  Annual Report on Form 10-K.
                    Schedules  other than that  listed  above have been  omitted
                    because  such   schedules   are  not  required  or  are  not
                    applicable.

             (3)    The exhibits  that are required to be filed or  incorporated
                    by reference herein are as follows:

             Exhibit No.                       Document
             -----------                       --------

                3.1        Amended  and  Restated   Articles  of  Incorporation,
                           incorporated  by  reference  to  Exhibit  3(i) of the
                           Company's  Registration  Statement  on Form SB-2,  as
                           amended, File No. 333-3188 (the "Form SB-2").

                3.2        Amended  and   Restated   Bylaws,   incorporated   by
                           reference to Exhibit 3.2 of the  Company's  Form 10-K
                           for the  fiscal  year ended  December  31,  1999,  as
                           amended by Form  10-K/A  (Amendment  No. 1), File No.
                           0-20743.

                4          Form of Stock Certificate,  incorporated by reference
                           to Exhibit 4 of the Form SB-2.

                10.1       Buy-Sell  Agreement,  dated May 15, 1996, between the
                           Company  and  Gregory P.  Campbell,  incorporated  by
                           reference to Exhibit 10.8 of the Form SB-2.

                10.2       Form   of   Employee   Non-Qualified   Stock   Option
                           Agreement, incorporated by reference to Exhibit 10.10
                           of the Company's Annual Report on Form 10-KSB for the
                           fiscal  year  ended  December  31,  1996,   File  No.
                           0-20743.

                10.3       Form of  Non-Employee  Director  Non-Qualified  Stock
                           Option   Agreement,   incorporated  by  reference  to
                           Exhibit 10.11 of the Company's  Annual Report on Form
                           10-KSB for the fiscal year ended  December  31, 1996,
                           File No. 0-20743.



                                       57
<PAGE>

                10.4       Management and Consulting  Agreement,  dated June 17,
                           1998,  between the  Company and Great Lakes  Capital,
                           LLC,  incorporated  by reference to Exhibit 10 of the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter ended June 30, 1998, File No. 0-20743.

                10.5       Voting and Standstill Agreement, dated June 17, 1998,
                           between the  Company,  Great Lakes  Capital,  LLC and
                           Great Lakes Capital, Inc.,  incorporated by reference
                           to Exhibit 10 of the  Company's  Quarterly  Report on
                           Form 10-Q for the quarter  ended June 30, 1998,  File
                           No. 0-20743.

                10.6       Registration  Rights Agreement,  dated June 17, 1998,
                           between the Company  and Great  Lakes  Capital,  LLC,
                           incorporated  by  reference  to  Exhibit  10  of  the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter ended June 30, 1998, File No. 0-20743.

                10.7       Amendment No. 1 to Voting and  Standstill  Agreement,
                           dated as of July 21, 2000, between the Company, Great
                           Lakes  Capital,  LLC and Great Lakes  Capital,  Inc.,
                           incorporated  by  reference  to  Exhibit  10.1 of the
                           Company's  Form 8-K  dated  July 21,  2000,  File No.
                           0-20743.

                10.8       Amendment  No. 1 to  Registration  Rights  Agreement,
                           dated as of July 21,  2000,  between  the Company and
                           Great Lakes Capital,  LLC,  incorporated by reference
                           to Exhibit 10.2 of the Company's  Form 8-K dated July
                           21, 2000, File No. 0-20743.

                10.9       Stock  Purchase  Agreement,  dated as of  August  31,
                           1999, by and between Stan A. Fischer, the Company and
                           A.G. Bertozzi, J. Cullather,  J. Wesley Hall, Anthony
                           F.  Markel,  Gary L. Markel,  Robert F. Mizell,  E.W.
                           Mugford  and  Troy  A.  Peery,  Jr.  incorporated  by
                           reference to Exhibit 99.2 of the  Company's  Form 8-K
                           filed September 30, 1999, File No. 0-20743.

                10.10      Stock  Redemption and Sale Agreement,  made effective
                           as August 31,  1999,  by and  between the Company and
                           Thomas H. Carson, William F. Crabtree, John L. Hobey,
                           Charles  Kaufmann and W. Sydnor Settle,  incorporated
                           by reference to Exhibit  99.3 of the  Company's  Form
                           8-K filed September 30, 1999, File No. 0-20743.

                10.11      Commercial Lease Contract, dated May 1, 1998, between
                           Liberty Property Limited Partnership and the Company,
                           incorporated  by  reference  to Exhibit  10.14 of the
                           Company's  Annual  Report  on Form  10-K for the year
                           ended  December 31,  1999,  as amended by Form 10-K/A
                           (Amendment No. 1), File 0-20743.

                10.12      Commercial Lease Contract,  dated September 18, 1998,
                           between   Quality  Dairy  Company  and  the  Company,
                           incorporated  by  reference  to Exhibit  10.15 of the
                           Company's  Annual  Report  on Form  10-K for the year
                           ended  December 31,  1999,  as amended by Form 10-K/A
                           (Amendment No. 1), File 0-20743.



                                       58
<PAGE>

                10.13      Open Plan Systems, Inc. 1996 Stock Incentive Plan, as
                           amended on May 12, 2000.*

                10.14      Open Plan  Systems,  Inc.  1996 Stock Option Plan For
                           Non-Employee  Directors,  as  amended  May 12,  2000,
                           incorporated  by  reference  to  Exhibit  10.1 of the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter ended March 31, 2000.

                10.15      Open Plan  Systems,  Inc.  2000 Stock Option Plan for
                           Non-Employee  Directors,  as  amended  May 12,  2000,
                           incorporated  by  reference  to  Exhibit  10.2 of the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter ended March 31, 2000, File No. 0-20743.

                10.16      Open Plan Systems,  Inc.  Employee Stock Purchase and
                           Bonus Plan and Prospectus,  incorporated by reference
                           to  Exhibit   4.3  of  the   Company's   Registration
                           Statement on Form S-8, File No. 333-38588.

                10.17      Severance and Release Agreement,  dated July 1, 2000,
                           between  the   Company   and  William  F.   Crabtree,
                           incorporated  by  reference  to  Exhibit  10.1 of the
                           Company's  Form  8-K  dated  July 1,  2000,  File No.
                           0-20743.

                10.18      Loan Agreement  between  Michigan  Strategic Fund and
                           the Company, dated June 1, 2000.*

                10.19      Reimbursement  and  Security  Agreement  between  the
                           Company and Wachovia Bank, N.A., dated June 1, 2000.*

                10.20      Commitment  Letter  between the Company and  Wachovia
                           Bank, dated March 15, 2000.*

                10.21      Amendment to  Commitment  Letter  between the Company
                           and Wachovia Bank, dated August 1, 2000.*

                10.22      Waiver letter  between the Company and Wachovia Bank,
                           N.A., dated May 23, 2001.*

                21         Subsidiaries of the Company.*

                23         Consent of Ernst & Young LLP.*
                _________________

                *  Filed herewith

         (b)    Reports on Form 8-K.

                None.

         (c)    Exhibits

                The  response  to this  portion  of Item  14 is  submitted  as a
                separate section of this report.



                                       59
<PAGE>

         (d)    Financial Statement Schedules

                The  response  to this  portion  of Item  14 is  submitted  as a
                separate section of this report.





























                                       60
<PAGE>

                                   SIGNATURES

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

                                             OPEN PLAN SYSTEMS, INC.



Dated:  May 23, 2001                         By: /s/ John L. Hobey
                                                 -------------------------------
                                                 John L. Hobey
                                                 Chief Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
                 Signature                                        Title                             Date
                 ---------                                        -----                             ----
<S>                                                  <C>                                         <C>

             /s/ John L. Hobey                            Chief Executive Officer                May 23, 2001
------------------------------------------                     and Director
                John L. Hobey                        (Principal Executive, Financial
                                                          and Accounting Officer)


       /s/ Theodore L. Chandler, Jr.                            Director                         May 23, 2001
------------------------------------------
         Theodore L. Chandler, Jr.


            /s/ J. Wesley Hall                                  Director                         May 23, 2001
------------------------------------------
              J. Wesley Hall


           /s/ Anthony F. Markel                                Director                         May 23, 2001
------------------------------------------
             Anthony F. Markel


           /s/ Robert F. Mizell                                 Director                         May 23, 2001
------------------------------------------
             Robert F. Mizell


           /s/ Edwin W. Mugford                                 Director                         May 23, 2001
------------------------------------------
             Edwin W. Mugford


          /s/ Troy A. Peery, Jr.                                Director                         May 23, 2001
------------------------------------------
            Troy A. Peery, Jr.


           /s/ W. Sydnor Settle                                 Director                         May 23, 2001
------------------------------------------
             W. Sydnor Settle

</TABLE>


<PAGE>

                                  EXHIBIT INDEX


    Exhibit No.                             Document
    -----------                             --------

       3.1         Amended and Restated Articles of Incorporation,  incorporated
                   by reference to Exhibit  3(i) of the  Company's  Registration
                   Statement on Form SB-2,  as amended,  File No.  333-3188 (the
                   "Form SB-2").

       3.2         Amended and  Restated  Bylaws,  incorporated  by reference to
                   Exhibit  3.2 of the  Company's  Form 10-K for the fiscal year
                   ended December 31, 1999, as amended by Form 10-K/A (Amendment
                   No. 1), File No. 0-20743.

       4           Form of  Stock  Certificate,  incorporated  by  reference  to
                   Exhibit 4 of the Form SB-2.

       10.1        Buy-Sell  Agreement,  dated May 15, 1996, between the Company
                   and Gregory P. Campbell, incorporated by reference to Exhibit
                   10.8 of the Form SB-2.

       10.2        Form  of  Employee   Non-Qualified  Stock  Option  Agreement,
                   incorporated  by reference to Exhibit  10.10 of the Company's
                   Annual  Report  on Form  10-KSB  for the  fiscal  year  ended
                   December 31, 1996, File No. 0-20743.

       10.3        Form of  Non-Employee  Director  Non-Qualified  Stock  Option
                   Agreement,  incorporated by reference to Exhibit 10.11 of the
                   Company's  Annual  Report on Form  10-KSB for the fiscal year
                   ended December 31, 1996, File No. 0-20743.

       10.4        Management  and  Consulting  Agreement,  dated June 17, 1998,
                   between   the  Company   and  Great   Lakes   Capital,   LLC,
                   incorporated  by  reference  to Exhibit  10 of the  Company's
                   Quarterly  Report on Form 10-Q for the quarter ended June 30,
                   1998, File No. 0-20743.

       10.5        Voting and Standstill Agreement, dated June 17, 1998, between
                   the  Company,  Great  Lakes  Capital,  LLC  and  Great  Lakes
                   Capital, Inc., incorporated by reference to Exhibit 10 of the
                   Company's Quarterly Report on Form 10-Q for the quarter ended
                   June 30, 1998, File No. 0-20743.

       10.6        Registration  Rights Agreement,  dated June 17, 1998, between
                   the Company and Great Lakes  Capital,  LLC,  incorporated  by
                   reference to Exhibit 10 of the Company's  Quarterly Report on
                   Form  10-Q for the  quarter  ended  June 30,  1998,  File No.
                   0-20743.

       10.7        Amendment No. 1 to Voting and Standstill Agreement,  dated as
                   of July 21, 2000,  between the Company,  Great Lakes Capital,
                   LLC and Great Lakes Capital, Inc.,  incorporated by reference
                   to  Exhibit  10.1 of the  Company's  Form 8-K dated  July 21,
                   2000, File No. 0-20743.

       10.8        Amendment No. 1 to Registration Rights Agreement, dated as of
                   July 21, 2000,  between the Company and Great Lakes  Capital,
                   LLC,  incorporated  by  reference



<PAGE>

                   to  Exhibit  10.2 of the  Company's  Form 8-K dated  July 21,
                   2000, File No. 0-20743.

       10.9        Stock Purchase Agreement, dated as of August 31, 1999, by and
                   between Stan A. Fischer,  the Company and A.G.  Bertozzi,  J.
                   Cullather, J. Wesley Hall, Anthony F. Markel, Gary L. Markel,
                   Robert  F.  Mizell,  E.W.  Mugford  and  Troy A.  Peery,  Jr.
                   incorporated  by reference  to Exhibit 99.2 of the  Company's
                   Form 8-K filed September 30, 1999, File No. 0-20743.

       10.10       Stock Redemption and Sale Agreement, made effective as August
                   31,  1999,  by and between the Company and Thomas H.  Carson,
                   William F. Crabtree,  John L. Hobey,  Charles Kaufmann and W.
                   Sydnor Settle,  incorporated  by reference to Exhibit 99.3 of
                   the Company's  Form 8-K filed  September  30, 1999,  File No.
                   0-20743.

       10.11       Commercial Lease Contract, dated May 1, 1998, between Liberty
                   Property Limited Partnership and the Company, incorporated by
                   reference to Exhibit 10.14 of the Company's  Annual Report on
                   Form 10-K for the year ended December 31, 1999, as amended by
                   Form 10-K/A (Amendment No. 1), File 0-20743.

       10.12       Commercial Lease Contract,  dated September 18, 1998, between
                   Quality  Dairy  Company  and  the  Company,  incorporated  by
                   reference to Exhibit 10.15 of the Company's  Annual Report on
                   Form 10-K for the year ended December 31, 1999, as amended by
                   Form 10-K/A (Amendment No. 1), File 0-20743.

       10.13       Open Plan Systems, Inc. 1996 Stock Incentive Plan, as amended
                   on May 12, 2000.*

       10.14       Open  Plan   Systems,   Inc.   1996  Stock  Option  Plan  For
                   Non-Employee Directors, as amended May 12, 2000, incorporated
                   by  reference  to  Exhibit  10.1 of the  Company's  Quarterly
                   Report on Form 10-Q for the quarter ended March 31, 2000.

       10.15       Open  Plan   Systems,   Inc.   2000  Stock  Option  Plan  for
                   Non-Employee Directors, as amended May 12, 2000, incorporated
                   by  reference  to  Exhibit  10.2 of the  Company's  Quarterly
                   Report on Form 10-Q for the  quarter  ended  March 31,  2000,
                   File No. 0-20743.

       10.16       Open Plan Systems,  Inc.  Employee  Stock  Purchase and Bonus
                   Plan and Prospectus, incorporated by reference to Exhibit 4.3
                   of the Company's Registration Statement on Form S-8, File No.
                   333-38588.

       10.17       Severance and Release Agreement,  dated July 1, 2000, between
                   the  Company  and  William  F.  Crabtree,   incorporated   by
                   reference  to Exhibit  10.1 of the  Company's  Form 8-K dated
                   July 1, 2000, File No. 0-20743.

       10.18       Loan  Agreement  between  Michigan  Strategic  Fund  and  the
                   Company, dated June 1, 2000.*




<PAGE>

       10.19       Reimbursement and Security  Agreement between the Company and
                   Wachovia Bank, N.A., dated June 1, 2000.*

       10.20       Commitment  Letter  between the Company  and  Wachovia  Bank,
                   dated March 15, 2000.*

       10.21       Amendment  to  Commitment  Letter  between  the  Company  and
                   Wachovia Bank, dated August 1, 2000.*

       10.22       Waiver letter  between the Company and Wachovia  Bank,  N.A.,
                   dated May 23, 2001.*

       21          Subsidiaries of the Company.*

       23          Consent of Ernst & Young LLP.*

       ____________________

       *  Filed herewith