OPEN PLAN SYSTEMS INC, 424A, 1996-05-17

OPEN PLAN SYSTEMS INC
424A, 1996-05-17
OFFICE FURNITURE (NO WOOD)

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MAY 16, 1996

1,700,000 SHARES

COMMON STOCK

All of the shares of Common Stock, no par value, offered hereby (the
"Shares") are being sold by Open Plan Systems, Inc. ("Open Plan" or the
"Company"). Prior to this offering, there has been no public trading market for
the Company's Common Stock. It is currently anticipated that the initial public
offering price will be between $8.00 and $10.00 per share. See "Underwriting"
for information regarding the factors considered in determining the initial
public offering price.

The Common Stock has been approved for listing on the Nasdaq National
Market under the symbol "PLAN."

SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

[CAPTION]
<TABLE>
<S> <C> <C> <C>

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
Per Share........................................... $ $ $
Total (3)........................................... $ $ $
</TABLE>

(1) Assumes the sale of 170,000 Shares to existing shareholders of the Company
at an underwriting discount of 3.0% and the sale of the remaining 1,530,000
shares at an underwriting discount of 7.5%. The Company has agreed to
indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."

(2) Before deducting expenses of this offering payable by the Company estimated
at $ . Approximately $4.6 million of the net proceeds of the offering
will be used to fund a final cash distribution of $3.5 million to current
shareholders of the Company in connection with the termination of the
Company's S Corporation status and to repay $1.1 million in debt incurred
from a prior distribution on March 29, 1996. See "Use of Proceeds" and
"Prior S Corporation Status."

(3) The Company has granted the Underwriters an option to purchase up to an
additional 255,000 shares of Common Stock, at an underwriting discount of
7.5%, solely to cover over-allotments, if any. If all such shares are
purchased, the total Price to Public, Underwriting Discount and Proceeds to
Company will be $ , $ and $ , respectively. See
"Underwriting."

The Shares are being offered by the several Underwriters named herein,
subject to prior sale, when, as and if delivered to and accepted by them, and
subject to certain conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. Delivery
of the Shares is expected against payment therefor on or about , 1996, in
Richmond, Virginia at the offices of Scott & Stringfellow, Inc.

DAVENPORT & CO. OF VIRGINIA, INC. SCOTT & STRINGFELLOW, INC.

THE DATE OF THIS PROSPECTUS IS , 1996

<PAGE>

[PHOTOGRAPH]

The photograph depicts an office Work Station of the type remanufactured by
the Company and certain miscellaneous items commonly found in an office such as
chairs and a computer.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS (I) ASSUMES NO
EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION, (II) REFLECTS THE
TERMINATION PRIOR TO THE CONSUMMATION OF THE OFFERING OF THE COMPANY'S STATUS AS
AN S CORPORATION (SEE "PRIOR S CORPORATION STATUS") AND (III) ASSUMES AN INITIAL
PUBLIC OFFERING PRICE OF $9.00 PER SHARE.

THE COMPANY

The Company believes it is the largest independent remanufacturer of office
work stations ("Work Stations") in the United States as measured by revenues.
Work Stations, which consist of moveable panels, work surfaces, storage units,
lighting and electrical distribution combined into a single integrated unit,
offer a popular alternative to the desk, free-standing file and permanent
drywall dividers common to traditional office layouts. The Company purchases
used Work Stations from end-users, brokers and dealers throughout the United
States and restores these Work Stations to like-new condition at its
remanufacturing facility located in Richmond, Virginia. Limited finishing and
assembly operations are conducted at the Company's plant in Atlanta, Georgia.
The Company primarily sells its remanufactured Work Stations directly to
end-users, which range from small businesses to Fortune 500 companies. The
Company's Work Stations are sold principally in the mid-Atlantic and
southeastern regions of the United States.

Since its inception in late 1989, the Company has experienced significant
growth in sales and profitability each year. The Company attributes its success
to date to (i) the growth in demand for Work Stations and the greater
availability of Work Stations for remanufacturing, (ii) its ability to provide
value to customers by producing like-new Work Stations that are typically sold
at 30% to 50% below the actual selling prices of new Work Stations of comparable
grade, (iii) its responsive customer service, including its ability to ship Work
Stations within three weeks of an order, (iv) the increasing demand for recycled
products, (v) its network of direct sales offices which allows the Company to
bypass dealers and dealer commissions while enhancing the Company's ability to
create long-term customer relationships and (vi) its experienced management team
with over 160 years of aggregate experience in the office furniture industry.

The Company's products compete against new and remanufactured Work Stations
as well as more traditional office furniture. Herman Miller, Inc. ("Herman
Miller"), Haworth, Inc. ("Haworth") and Steelcase, Inc. ("Steelcase") are the
leading manufacturers of new Work Stations in the United States, collectively
representing approximately two-thirds of the installed base of Work Stations.
The Company currently focuses on the remanufacturing of Work Stations produced
by Herman Miller. According to The Business and Institutional Furniture
Manufacturer's Association, Work Stations accounted for approximately $3.3
billion of the $9.4 billion domestic market for office furniture in 1995. The
Company believes that the domestic market for used and remanufactured Work
Stations was approximately $500 million in 1995 and is growing more rapidly than
the market for new Work Stations.

The Company's goal is to become the dominant independent remanufacturer of
Work Stations in the United States. Key components of Open Plan's strategy to
achieve this goal include (i) opening additional direct sales offices in major
markets throughout the United States, (ii) further developing its innovative
sales and marketing techniques, (iii) expanding its remanufacturing capabilities
to include Work Stations produced by manufacturers other than Herman Miller and
(iv) continuing to capitalize on its high level of customer service and pricing
advantages.

Open Plan sells approximately 80% of its Work Stations through a network of
seven Company-owned direct sales offices with the remaining 20% of sales being
made through the Company's dealer network. The Company believes that each of the
fifty 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.
The Company's sales and purchasing efforts are supported by a telemarketing
division which identifies potential customers and sources of used Work Stations.

THE OFFERING

<TABLE>
<S> <C>
Shares Offered by the Company...................... 1,700,000 shares
Shares Outstanding After the Offering.............. 4,129,933 shares
Use of Proceeds.................................... The net proceeds of approximately $13.9 million will be used for:
general corporate purposes, including the establishment of additional
sales offices and the expansion of the Company's product lines
(approximately $5.4 million), repayment of debt (approximately $4.0
million, which includes $1.1 million of debt incurred in connection with
a prior S Corporation distribution to shareholders), payment of a final
S Corporation distribution to shareholders (approximately $3.5 million),
and upgrading existing production facilities and establishing additional
finishing plants (approximately $1.0 million). See "Use of Proceeds."
Nasdaq National Market Symbol...................... "PLAN"
</TABLE>

<PAGE>
SUMMARY FINANCIAL DATA

PRO FORMA DATA (2):
Pro forma income before income taxes.............. $ 84 $ 539 $ 869 $ 1,687 $ 1,885 $ 714 $ 914
Pro forma provision for income taxes.............. - 208 344 673 746 283 356
Pro forma net earnings............................ $ 84 $ 331 $ 525 $ 1,014 $ 1,139 $ 431 $ 558
Pro forma net earnings per share.................. $ 0.42 $ 0.16 $ 0.21
Weighted average shares outstanding (3)........... 2,734,635 2,745,615 2,718,548

AT MARCH 31, 1996
PRO
FORMA
PRO AS
ACTUAL FORMA(4) ADJUSTED(5)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................................................... $3,265 $3,313 $ 14,236
Total assets......................................................... 9,849 9,897 16,820
Long-term debt and capital leases.................................... 435 435 435
Shareholders' equity................................................. 4,110 4,158 15,081
</TABLE>

(1) Operating income as a percentage of net sales.

(2) Upon completion of the offering, the Company's status as an S Corporation
will terminate, and the Company will be subject to corporate income taxes.
Accordingly, pro forma net earnings reflect a pro forma adjustment for
income taxes which would have been recorded had the Company been a C
Corporation. See "Selected Financial Data" and "Prior S Corporation Status."

(3) Weighted average common shares outstanding have been increased for 288,615
shares of Common Stock deemed to be outstanding, which represents the
approximate number of shares of Common Stock deemed sold by the Company at
an estimated initial public offering price of $9.00 per Share to fund the
assumed distribution of $2,598 to the Company's shareholders.

(4) Adjusted to give effect to the recognition of net deferred income tax assets
in the amount of $48 upon the termination of the Company's status as an S
Corporation.

(5) Adjusted to give effect to the sale by the Company of 1,700,000 shares of
Common Stock offered hereby at an estimated initial public offering price of
$9.00 per Share and the application of the estimated net proceeds of $13,866
as follows: (i) payment of the line of credit balance at March 31, 1996 of
$4,000, (ii) distribution of pro forma retained earnings of $2,943 at March
31, 1996, including the pro forma deferred income tax benefit of $48, and
(iii) the remainder to increase working capital.

<PAGE>
RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN
ADDITION TO THE OTHER INFORMATION PRESENTED ELSEWHERE IN THIS PROSPECTUS, BEFORE
PURCHASING THE SHARES OFFERED HEREBY. THIS PROSPECTUS CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS. THE COMPANY WISHES TO CAUTION READERS THAT THE
FOLLOWING IMPORTANT FACTORS, AMONG OTHERS, 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 1996 AND BEYOND TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE HEREIN.

POTENTIAL LIMITATIONS ON FUTURE GROWTH

The Company has experienced rapid growth since it commenced operations in
1989. The Company's continued growth will be dependent in part on the Company's
ability to manage growth effectively, including the improvement and expansion of
the Company's financial and management information systems and remanufacturing
operations and the recruitment
and retention of executive staff and key employees. The Company will also 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. See "Business-Growth
Strategy" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources."

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
in 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 Work Stations in
its remanufacturing operations. The Company does not have any binding agreements
relating to the purchase of used Herman Miller 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 and other manufacturers' 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. See "Business-Inventory."

The Company also purchases new and used component parts for use in the
remanufacture of Work Stations. The Company experienced a shortage in the supply
of certain component parts during 1995 that resulted in the Company's purchase
of such component parts at higher prices. There can be no assurances that
shortages of component parts or higher prices for such parts will not occur in
the future. An inability to obtain 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. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

NO ASSURANCE OF EXPANSION OF PRODUCT LINES AND BUSINESS

The Company has concentrated its business on remanufacturing Work Stations
manufactured by Herman Miller. The Company intends to expand its product line to
include Work Stations of other manufacturers (particularly those of Haworth
and/or Steelcase) through the acquisition of other companies specializing in
remanufacturing products of those manufacturers or the establishment of
additional remanufacturing facilities. However, the Company is not currently
engaged in negotiations with acquisition candidates and has not selected any
locations for the construction of additional facilities. In addition, the
Company has limited experience in remanufacturing Work Stations of manufacturers
other than Herman Miller. Due to the differences in and lack of
interchangeability of the various Work Stations and certain component parts
produced by the major

<PAGE>

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 historical gross margins. The
failure of the Company to expand successfully its product line could have a
material adverse effect on the growth and profitability of the Company's
business.

DEPENDENCE UPON PRIMARY REMANUFACTURING FACILITY

The Company primarily remanufactures its Work Stations at one facility in
Richmond, Virginia. The Company also operates a limited finishing and assembly
plant in Atlanta, Georgia. Although the Company presently maintains $3,000,000
of business interruption insurance on the Richmond facility and $100,000 of such
insurance on the Atlanta plant, a lengthy interruption of its remanufacturing
operations at the Richmond facility would have a material adverse effect on the
Company's results of operations and financial condition. See
"Business-Insurance."

TAX MATTERS ASSOCIATED WITH PRIOR S CORPORATION STATUS

The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code of 1986, as amended, as an "S Corporation" for federal and state
income tax purposes since its incorporation in 1989. Unlike a regular or "C
Corporation," an S Corporation is generally not subject to income tax at the
corporate level; instead, the S Corporation's income is taxed on the personal
income tax returns of its shareholders. The Company's status as an S Corporation
will terminate prior to the closing of the offering. If the Company's S
Corporation status were denied for any periods prior to this termination by
reason of a failure to satisfy the S Corporation election or eligibility
requirements of the Code, the Company would be subject to tax on its income as
if it were a C Corporation for these periods. The payment of any such tax could
have a material adverse effect on the Company's financial condition and results
of operations if the full amount thereof is not reimbursed by the current
shareholders of the Company, who have agreed to pay their pro rata share of any
such tax and related interest, penalties and expenses in the event that the
Company's S Corporation status is denied for any taxable periods up to the date
immediately preceding the closing of the offering. See "Prior S Corporation
Status."

DEPENDENCE UPON KEY PERSONNEL

The Company's development and operations to date have been, and are
expected in the immediate future to be, substantially dependent on the services
of its President, Stan A. Fischer. Mr. Fischer has suffered two heart attacks
from which the Company believes he has fully recovered. Mr. Fischer currently is
not experiencing any health problems. However, there can be no assurances that
Mr. Fischer will not suffer a recurrence of his previous health problem. The
Company has made application for "key-man" insurance in the amount of $3,000,000
on the life of Mr. Fischer naming the Company as the sole beneficiary. The loss
of his services could materially and adversely affect the Company's business
prospects. The Company's future success will also depend in part on its
continuing ability to attract and retain capable and experienced personnel.
There can be no assurance that the Company will be successful in attracting and
retaining such personnel. See "Management."

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS; SEASONALITY

Historically, the Company's business has been significantly affected by
seasonal factors. The Company typically has higher sales during the first and
fourth quarters of its fiscal year due primarily to the tendency of customers to
expend funds budgeted for office furniture either early in the calendar year or
after the summer vacation season. Because the Company recognizes revenues upon
shipment and typically ships Work Stations within three 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. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business-Seasonality and
Backlog."

NO PRIOR PUBLIC MARKET; DETERMINATION OF OFFERING PRICE

Prior to this offering, there has been no public trading market for the
Company's Common Stock. The initial public offering price of the Shares offered
hereby has been determined through negotiations between the Company and the
representatives of the Underwriters and may not be indicative of the market
price for the Common Stock after this offering. The Company's Common Stock has
been approved for listing on the Nasdaq National Market; however, there can be
no assurance that an active market in the Company's Common Stock will develop
after this offering, or if developed, that such

<PAGE>
market will be sustained. Additionally, there can be no assurance that the
Company will continue to meet the criteria for continued inclusion of the Common
Stock on the Nasdaq National Market. See "Underwriting."

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
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.

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. See "Business-Competition."

OWNERSHIP OF MANAGEMENT

Immediately following this offering, the Company's executive officers and
directors will beneficially own approximately 33.8% of the outstanding shares of
the Company's Common Stock based on the number of shares beneficially owned by
them at March 31, 1996 (excluding any Shares that may be purchased by such
persons in the offering). As a result, such persons, acting together, would have
the ability to significantly affect the outcome of all matters requiring
shareholder approval and, in certain circumstances, would have the ability to
block a transaction with an "Interested Shareholder" as defined in the Company's
Amended and Restated Articles of Incorporation. The concentration of ownership
also could have the effect of discouraging certain unsolicited offers to acquire
the Company or otherwise inhibiting a change in control of the Company, and as a
result, may deprive shareholders of an opportunity to sell their stock at higher
prices. See "Management-Security Ownership of Management" and "Description of
Capital Stock-Certain Provisions of the Company's Articles of Incorporation and
Bylaws."

The Company and the Underwriters have agreed to reserve up to 10% of the
offering, or 170,000 shares, for sale to existing shareholders, including
directors and executive officers of the Company. None of these persons have any
obligation to purchase Shares in the offering.

ANTI-TAKEOVER MEASURES

Immediately prior to the closing of this offering, the Company's Articles
of Incorporation and Bylaws will be amended and restated to include certain
provisions that provide for a classified board of directors, prohibit cumulative
voting for the election of directors, eliminate the right of shareholders to
call special meetings, and impose various procedural requirements which could
make it difficult for shareholders to effect certain corporate actions. These
provisions may have the effect of deterring hostile takeovers or delaying or
preventing changes in control of the Company. In addition, the Board of
Directors will have the authority to issue up to 5,000,000 shares of
undesignated Preferred Stock, to determine the powers, preferences and rights
and the qualifications, limitations or restrictions granted to or imposed upon
any unissued series of undesignated Preferred Stock and to fix the number of
shares constituting any series and the designation of such series, without any
further vote or action by the Company's shareholders. The Preferred Stock could
be issued with voting, liquidation, dividend and other rights superior to the
rights of the Common Stock. Furthermore, such Preferred Stock may have other
rights, including economic rights, senior to the Common Stock, and as a result,
the issuance of such stock could have a material adverse effect on the market
value of the Common Stock. The Company also will be afforded the protection of
certain provisions of the Virginia Stock Corporation Act, which could delay or
prevent a change in control of the Company, impede a merger, consolidation or
other business combination involving the Company or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control of
the Company. Any of these provisions which may have the effect of delaying or
preventing a change in control of the Company could have a material adverse
effect on the market value of the Company's Common Stock. See "Description of
Capital Stock."

<PAGE>
DILUTION

The offering price of the Shares is substantially in excess of the present
book value per share. Purchasers of Shares will experience immediate and
substantial dilution in the amount of $5.35 per share in the net tangible book
value per Share of Common Stock. See "Dilution."

ENVIRONMENTAL REGULATIONS

The Company is subject to a variety of federal, state and local
governmental laws and regulations related to the storage, use, discharge and
disposal of toxic, volatile or otherwise hazardous chemicals used in its
manufacturing processes. In addition, regulations currently proposed under the
Clean Air Act Amendments of 1990 may require reduced emissions of volatile
organic compounds including emissions from paints and solvents used by the
Company in the remanufacturing process. As a result, the Company may be required
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. See
"Business-Government Regulation."

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 the
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 and
intends to begin selling newly manufactured private label 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. See "Business-Intellectual Property."

SHARES ELIGIBLE FOR FUTURE SALE

All 2,429,933 shares of Common Stock currently outstanding are "restricted
securities" as that term is defined in
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Such shares may be sold only in compliance with Rule 144,
pursuant to registration under the Securities Act or pursuant to an exemption
therefrom. Generally, under Rule 144, a person holding restricted securities for
a period of two years would be entitled to sell within any three month period, a
number of shares that does not exceed the greater of 1% of the then-outstanding
shares of common stock of the company or the average weekly trading volume for
the four weeks prior to the proposed sale. Sales of substantial amounts of
Common Stock by shareholders of the Company under Rule 144, or otherwise, or
even the potential for such sales, could have a depressive effect on the market
price of the Common Stock and could impair the Company's ability to raise
capital through the sale of its equity securities. All officers, directors and
current shareholders of the Company have agreed with the Underwriters not to
sell any of their restricted securities without the Underwriters' consent until
180 days from the date of this Prospectus. All of the restricted securities
currently outstanding will be available for sale in the public market upon the
expiration of such 180 day period. See "Shares Eligible for Future Sale" and
"Underwriting."

<PAGE>
THE COMPANY

The Company believes it is the largest independent remanufacturer of office
Work Stations in the United States as measured by revenues, according to a study
conducted by Radley Resources, Inc., an independent market research firm. Work
Stations, which consist of moveable panels, work surfaces, storage units,
lighting and electrical distribution combined into a single integrated unit,
offer a popular alternative to the desk, free-standing file and permanent
drywall dividers common to traditional office layouts. The Company purchases
used Work Stations from end-users, brokers and dealers throughout the United
States and restores these Work Stations to like-new condition at its
remanufacturing facility located in Richmond, Virginia. Limited finishing and
assembly operations are conducted at the Company's plant in Atlanta, Georgia.
The Company primarily sells its remanufactured Work Stations directly to
end-users, which range from small businesses to Fortune 500 companies. The
Company's Work Stations are sold principally in the mid-Atlantic and
southeastern regions of the United States.

The Company's products compete against new and remanufactured Work Stations
as well as more traditional office furniture. Herman Miller, Haworth and
Steelcase are the leading manufacturers of new Work Stations in the United
States, collectively representing approximately two-thirds of the installed base
of Work Stations. The Company currently focuses on the remanufacturing of Work
Stations produced by Herman Miller. According to The Business and Institutional
Furniture Manufacturer's Association, Work Stations accounted for approximately
$3.3 billion of the $9.4 billion domestic market for office furniture in 1995.
The Company believes that the domestic market for used and remanufactured Work
Stations was approximately $500 million in 1995 and is growing more rapidly than
the market for new Work Stations.

The Company's executive offices are located at 4299 Carolina Avenue,
Building C, Richmond, Virginia 23222, and its telephone number is (804)
228-5600.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,700,000 shares of
Common Stock offered hereby are estimated to be approximately $13.9 million
($16.0 million if the Underwriters' over-allotment option is exercised in full)
after deducting the underwriting discount and estimated offering expenses.
Approximately $5.4 million of the net proceeds of the offering will be used for
general corporate purposes, including the establishment of additional sales
offices and the expansion of the Company's product lines. Approximately $4.0
million of the net proceeds of the offering will be used to repay outstanding
debt incurred by the Company under its working capital line of credit with
Crestar Bank, Richmond, Virginia (the "Line of Credit"), which at April 30, 1996
had an outstanding balance of $3,952,000 with interest payable at the lesser of
Crestar Bank's prime rate or the thirty day LIBOR plus 2.25% (7.69% at May 1,
1996). The outstanding balance on the Crestar Bank Line of Credit at April 30,
1996 included borrowings of $1.1 million that were used to make S Corporation
distributions to shareholders on March 29, 1996. See "Prior S Corporation
Status." Approximately $3.5 million of the net proceeds of the offering will be
distributed to existing shareholders in connection with the termination of the
Company's status as an S Corporation. Approximately $1.0 million of the net
proceeds will be used to upgrade the Company's existing manufacturing

<PAGE>

facilities in Richmond, Virginia and to establish additional finishing plants in
Chicago, Illinois and New York, New York. The Company may also use a portion of
the net proceeds from the offering for acquisitions of remanufacturing and
related businesses. However, the Company is not currently engaged in
negotiations with any acquisition candidates and cannot predict whether, when or
on what terms any such acquisitions may occur.

Pending the application of proceeds, the Company will invest some or all of
the proceeds from this offering in income-producing securities which will
provide adequate safety of principal, such as U.S. Treasury securities and bank
certificates of deposit.

PRIOR S CORPORATION STATUS

The Company has been taxed under Subchapter S of the Internal Revenue Code
of 1986, as amended, as an "S Corporation" for federal income tax purposes since
its incorporation in 1989. As a consequence, the taxable net earnings of the
Company are taxed as income to the Company's shareholders in proportion to their
individual stockholdings, and the federal income taxes on such proportionate
share of the Company's taxable net earnings is the personal obligation of each
shareholder. Commencing in 1992, the Company made distributions to shareholders
to enable them to pay the federal and state income taxes on their pro rata share
of the Company's S Corporation earnings and to provide a return on their
investment. In 1994 and 1995, the Company made distributions to shareholders in
the amount of $469,401 and $947,773 for tax years 1993 and 1994, respectively.
On March 29, 1996, the Company borrowed $1,131,005 under its working capital
line of credit with Crestar Bank to make the distribution to shareholders for
tax year 1995. See "Use of Proceeds."

Prior to the closing of the offering, the Company's election to be taxed as
an S Corporation will be terminated, and the Company will declare a final cash
dividend to existing shareholders estimated to be approximately $3,495,000. This
final distribution to shareholders will be payable from the net proceeds of the
offering. The entire amount of the final distribution represents retained
earnings of the Company upon which the shareholders have paid, or will be
required to pay, federal and state income taxes. The estimated amount of
approximately $3,495,000 represents the sum of (i) approximately $2,895,000 in
retained earnings which remained undistributed at March 31, 1996 and (ii)
approximately $600,000 as the estimated net income (before income taxes) of the
Company from April 1, 1996 through the termination of the Company's S
Corporation status. The exact amount of the final distribution cannot be
determined at this time since it is dependent upon the actual net earnings of
the Company from April 1, 1996 through the termination of the Company's S
Corporation status. The $600,000 estimate is based on information available to
management of the Company as of the date hereof and is provided solely for
purposes of presenting the expected amount of the final S Corporation
distribution. The Company's actual results of operations may vary from the
estimated amount of net income. No portion of the final distribution will be
paid to new investors purchasing Shares in the offering.

Following the offering, the Company will be taxed for federal and state
income tax purposes as a regular or "C Corporation" and will pay income tax at
the corporate level on all taxable net earnings from the date of termination of
the Company's S Corporation status. If the Company's S Corporation status were
denied for any periods prior to such termination by reason of a failure to
satisfy the S Corporation election or eligibility requirements of the Code, the
Company would be subject to tax on its income as if it were a C Corporation for
these periods. The Company believes, however, that it has met all requirements
of the Code with respect to its S Corporation status. In addition, the Company
has entered into an agreement with each existing shareholder pursuant to which
each such shareholder has agreed to pay his pro rata portion of any additional
taxes and any related interest, penalties and expenses, which may be imposed
against or incurred by the Company based upon or in connection with a
determination by a taxing authority that the Company's S Corporation status was
invalid for any taxable periods up to the date immediately preceding the closing
of the offering. See "Risk Factors-Tax Matters Associated with Prior S
Corporation Status."

DIVIDEND POLICY

Since 1992, the Company has made distributions to shareholders of a portion
of its retained earnings to enable shareholders to pay federal and state income
taxes on their pro rata share of the Company's S Corporation earnings and to
provide a return on their investment. See "Prior S Corporation Status." The
Company currently anticipates that, following the closing of the offering, it
will retain any future earnings to provide funds for the operation and expansion
of its business, and therefore does not intend to pay dividends on its Common
Stock for the foreseeable future. Payment of dividends in the future will be
determined by the Company's Board of Directors and will be dependent upon the
financial condition, capital requirements and earnings of the Company, together
with other factors that the Board of Directors may deem relevant.

<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company (i) as of
March 31, 1996, (ii) on a pro forma basis as of March 31, 1996 and (iii) on a
pro forma basis as adjusted as of March 31, 1996 to reflect the sale of the
Shares at an estimated initial public offering price of $9.00 per Share and the
application of the net proceeds from the offering. See "Use of Proceeds." This
table should be read in conjunction the financial statements of the Company and
the notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED
<S> <C> <C> <C>
(IN THOUSANDS)
Long-term debt and capital leases, including current portion.......................... $ 435 $ 435 $ 435
Shareholders' Equity:
Preferred Stock, no par value, 5,000,000 authorized, no shares issued and
outstanding..................................................................... - - -
Common Stock, no par value, 50,000,000 authorized, 2,429,933 shares issued and
outstanding, 2,429,933 shares issued and outstanding pro forma, and 4,129,933
shares issued and outstanding, pro forma as adjusted............................ 1,215 1,215 15,081
Retained earnings................................................................ 2,895 2,943 -
Total shareholders' equity..................................................... 4,110 4,158 15,081
Total capitalization........................................................ $4,545 $4,593 $ 15,516
</TABLE>

(1) Adjusted to give effect to the recognition of net deferred income tax assets
of $48 upon the termination of the Company's status as an S Corporation. See
"Prior S Corporation Status."

DILUTION

The pro forma net tangible book value of the Company as of March 31, 1996
would have been approximately $4,158,000 or $1.71 per share of Common Stock,
after pro forma adjustments giving effect to the recording of net deferred
income tax assets of approximately $48,000 upon the termination of the Company's
status as an S Corporation. Pro forma net tangible book value per share
represents the amount of total tangible assets of the Company reduced by the
amount of its total liabilities, divided by the number of shares of Common Stock
outstanding. After giving effect to the sale of the Shares at an estimated
initial public offering price of $9.00 per Share (after deduction of the
underwriting discount and estimated offering expenses), the adjusted pro forma
net tangible book value as of March 31, 1996 would have been approximately
$15,081,000 or $3.65 per share of Common Stock. This represents an immediate
increase in net tangible book value of $1.94 per share to existing shareholders
and an immediate dilution of $5.35 per Share to new investors purchasing the
Shares. The following table illustrates the pro forma per share dilution as of
March 31, 1996:

<TABLE>
<S> <C> <C>
Estimated initial public offering price per share............................................................ $9.00
Pro forma net tangible book value per share at March 31, 1996........................................... $1.71
Increase per share in pro forma net tangible book value attributable to new investors................... 1.94
Pro forma net tangible book value per share after the offering............................................... 3.65
Dilution per share to new investors.......................................................................... $5.35
</TABLE>

The following table sets forth, on a pro forma basis as of March 31, 1996,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price per Share paid by the
existing shareholders and by the new investors in this offering, based upon the
estimated initial public offering price of $9.00 per Share (before deduction of
the underwriting discount and estimated offering expenses):

<TABLE>
<CAPTION>
AVERAGE
SHARES PURCHASED TOTAL CONSIDERATION PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
<S> <C> <C> <C> <C> <C>
Existing shareholders............................................ 2,429,933 58.8% $ 1,215,299 7.4% $0.50
New investors.................................................... 1,700,000 41.2 15,300,000 92.6 $9.00
Total............................................................ 4,129,933 100.0% $16,515,299 100.0%
</TABLE>

<PAGE>
SELECTED FINANCIAL DATA

The selected financial data presented below for each of the years in the
five year period ended December 31, 1995 have been derived from the audited
financial statements of the Company and notes thereto. The financial data for
the three month periods ended March 31, 1995 and 1996 are derived from unaudited
financial statements. The unaudited financial statements reflect all adjustments
of a normal recurring nature which management considers necessary for a fair
presentation of the financial position and the results of operations for these
periods. Operating results for the three month period ended March 31, 1996 are
not necessarily indicative of the results that may be achieved for the entire
year ending December 31, 1996 or for any other interim period. The data set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements, notes thereto and other financial and statistical information
appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
1991 1992 1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
STATEMENT OF INCOME DATA:
Net sales......................................... $1,633 $3,670 $7,843 $12,218 $15,478 $4,574 $5,580
Cost of sales..................................... 1,124 2,256 5,441 8,015 10,434 3,084 3,595
Gross profit................................... 509 1,414 2,402 4,203 5,044 1,490 1,985
Operating expenses:
Selling and marketing.......................... 132 427 768 1,490 2,057 498 680
General and administrative..................... 275 422 733 909 975 254 342
Total operating expenses..................... 407 849 1,501 2,399 3,032 752 1,022
Operating income.................................. 102 565 901 1,804 2,012 738 963
Interest expense.................................. 19 18 50 105 163 30 63
Other (income) expense, net....................... (1) 8 (18) 12 (36) (6) (14)
Net income........................................ $ 84 $ 539 $ 869 $ 1,687 $ 1,885 $ 714 $ 914
STATISTICAL DATA:
Gross profit margin............................... 31.2% 38.5% 30.6% 34.4% 32.6% 32.6% 35.6%
Operating margin (1).............................. 6.2% 15.4% 11.5% 14.8% 13.0% 16.1% 17.3%
Ending number of sales offices.................... 1 3 4 7 6 7 7
PRO FORMA DATA (2):
Pro forma income before income taxes.............. $ 84 $ 539 $ 869 $ 1,687 $ 1,885 $ 714 $ 914
Pro forma provision for income taxes.............. - 208 344 673 746 283 356
Pro forma net earnings............................ $ 84 $ 331 $ 525 $ 1,014 $ 1,139 $ 431 $ 558
Pro forma net earnings per share.................. $ 0.42 $ 0.16 $ 0.21
Weighted average shares outstanding (3)........... 2,734,635 2,745,615 2,718,548
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31, 1996
AT DECEMBER 31, PRO FORMA
1991 1992 1993 1994 1995 ACTUAL PRO FORMA(4) AS ADJUSTED(5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA:
Working capital....................... $271 $1,127 $1,725 $2,895 $3,360 $3,265 $3,313 $ 14,236
Total assets.......................... 706 2,015 3,911 5,783 9,009 9,849 9,897 16,820
Long-term debt and capital leases..... 53 31 236 169 486 435 435 435
Shareholders' equity.................. 315 1,352 2,104 3,547 4,327 4,110 4,158 15,081
</TABLE>

(1) Operating income as a percentage of net sales.
(2) Upon completion of the offering, the Company's status as an S Corporation
will terminate, and the Company will be subject to corporate income taxes.
Accordingly, pro forma net earnings reflect a pro forma adjustment for
income taxes which would have been recorded had the Company been a C
Corporation. See "Prior S Corporation Status."

(4) Adjusted to give effect to the recognition of net deferred income tax assets
in the amount of $48 upon the termination of the Company's status as an S
Corporation.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Since its inception in 1989, the Company has generated the majority of
revenues from the sale of remanufactured Work Stations and to a lesser extent
from the sale of "as-is" Work Stations and rentals. The Company's sales are
highly dependent upon its network of Company-owned sales offices and sales
personnel because the Company sells approximately 80% of its Work Stations
directly to end-users. Sales from these offices have increased each year as the
Company has added sales personnel, as these personnel have gained experience and
as the Company has achieved greater consumer awareness and name recognition.
Generally, branch sales offices do not generate significant sales in their first
six months to one year of operation.

The Company sells approximately 20% of its Work Stations through its dealer
network. While the Company prefers to sell directly to the end-user through its
own sales offices, it will continue to use dealers in non-exclusive
relationships, in markets that are too small to support a sales office or in
markets where it does not expect to be able to open a sales office in the near
future. Selling through Company-owned sales offices rather than through dealers
increases the Company's selling costs due to increased overhead and salesperson
compensation expenses. However, the Company believes that these increased costs
are more than offset by the portion of the dealer gross profit margin captured
by the Company. The Company believes that the fifty largest metropolitan areas
in the United States are of sufficient size to support a Company sales office. A
core component of the Company's growth strategy is to increase sales by opening
new sales offices and adding additional sales personnel. To date, the Company's
limited financial resources have constrained the pace of its sales office
expansion.

Historically, the Company's business has been significantly affected by
seasonal factors. The Company typically has greater sales revenue during the
first and fourth quarters. Since most of the Company's orders are shipped within
three weeks of booking the order, the Company has no significant backlog of
orders and forecasting short-term revenue levels is difficult. The Company uses
temporary employees and other measures to increase production capacity during
periods of higher sales while keeping its baseline operating expenses to a
minimum during periods of lower sales.

RESULTS OF OPERATIONS

The following table sets forth the relationship of costs and expenses as a
percentage of the Company's sales for the periods indicated:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Net sales.......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales...................................... 69.4 65.6 67.4 67.4 64.4
Gross profit....................................... 30.6 34.4 32.6 32.6 35.6
Selling and marketing expenses..................... 9.8 12.2 13.3 10.9 12.2
General and administrative expenses................ 9.3 7.4 6.3 5.6 6.1
Operating income................................... 11.5 14.8 13.0 16.1 17.3
Other (income) expense............................. 0.4 1.0 0.8 0.5 0.9
Net income......................................... 11.1% 13.8% 12.2% 15.6% 16.4%
</TABLE>

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995

SALES. Sales in the first three months of 1996 were $5,580,000, an increase
of $1,010,000 or 22.1% over the same period in 1995, despite the number of sales
offices remaining constant at seven. This increase was primarily the result of
increased same-office sales in each of the five offices open during both periods
as well as modest sales from two new offices. The two new offices, located in
Chicago, Illinois and New York, New York, were opened during the fourth quarter
of 1995 and the first quarter of 1996, respectively, and replaced the two
Florida offices that were closed in 1995. The two new offices performed at sales
levels typical for new sales offices during the initial months of operation. The
Company believes the increase in same-office sales is the result of additional
market penetration and an increase in the experience of its sales force.

COST OF SALES. The Company's cost of sales includes cost of raw materials
(used Work Station components, new fabric, laminate, paint, and other materials)
labor, supplies, freight, utilities, and other manufacturing related expenses.

<PAGE>

The increase in cost of sales for the first quarter of 1996 of $510,000 was
primarily attributable to increased sales volume. In addition, the gross profit
margin increased during the period to 35.6% from 32.6%. This increase was
primarily attributable to economies of scale in purchases of component parts and
in cost reductions realized in the Company's wood fabrication operations which
were commenced in the fourth quarter of 1995.

Component and fabric costs increased $220,000 or 13.3%. As a percentage of
sales, component and fabric costs decreased from 36.2% to 33.7%. This decrease
is largely attributable to cost savings realized as a result of the commencement
of the manufacture of certain component parts in the Company's wood fabricating
facility that were previously purchased from third parties.

Remanufacturing costs increased $290,000 or 20.2%. Compensation costs, the
largest single component of remanufacturing costs, increased $210,000 or 39.6%.
Compensation as a percentage of sales increased from 11.6% to 13.3%. The
increase was primarily attributable to the additional employees added to staff
the wood fabrication operations which commenced in the fourth quarter of 1995,
and to staff a second shift in certain other departments of the Richmond
facility. The increase in compensation related to the wood fabricating operation
had the effect of lowering component costs as certain components were
manufactured rather than purchased. While the manufacturing of these components
resulted in increased compensation costs, the overall cost of sales for these
components was reduced. The Company plans to expand this practice wherever
production capabilities allow and cost savings can be achieved. The partial
second shift, which was comprised almost entirely of temporary workers, was
added in response to the additional demand for certain products and increased
sales volume. Other remanufacturing costs increased $80,000 or 8.9% primarily as
a result of increased sales volume. As a percentage of sales, these costs
decreased from 19.7% to 17.6%.

SELLING AND MARKETING EXPENSES. The most significant selling and marketing
expenses are salesperson compensation, advertising and other marketing expenses
and rents. The Company compensates its salespeople through a combination of
salaries, commissions and bonuses. While most of these expenses are directly
related to the current year's sales, certain other marketing expenses are
incurred to build name recognition and generate sales leads which may contribute
to sales in later periods.

During the first three months of 1996, the Company continued to expand its
marketing efforts through increased advertising and expansion of its
telemarketing efforts begun in 1995. Salesperson compensation increased $91,000
or 27.9%. Advertising costs increased $65,000 or 110.5%, as the Company expanded
advertising into the two new markets as well as continued advertising in
existing markets.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
include administrative salaries and related employee benefits, and legal and
accounting fees. Total general and administrative expenses increased $88,000 or
34.6% relating primarily to increased legal and accounting fees and increased
administrative staffing to support increased sales volume.

OTHER (INCOME) EXPENSE. The Company operates under a Line of Credit from
Crestar Bank, Richmond, Virginia, that bears interest at the lesser of the
Crestar Bank prime rate or the thirty day LIBOR plus 2.25% (7.33% at March 31,
1996). The Company also has obligations under long-term notes incurred in
connection with the acquisition of manufacturing equipment. Interest expense
increased $33,000 or 110.0% during the first quarter of 1996 versus the prior
year period as a result of increased borrowings to support increases in
inventory and accounts receivable.

COMPARISON OF YEARS ENDED DECEMBER 31, 1995 AND DECEMBER 31, 1994

SALES. Sales in 1995 were $15,480,000, an increase of $3,260,000 or 26.7%
over 1994. This increase in sales was achieved despite a net decrease during
1995 in the Company's number of sales offices in operation from seven to six.
Fiscal year 1995 was the first year in the Company's history that its ending
sales offices decreased. The Company did open a sales office in Chicago, but
this opening was offset by the closing of two sales offices in Florida. Expiring
leases for its offices in Florida coupled with limited financial resources and a
more favorable opportunity in Chicago resulted in the Company's decision not to
retain the Florida offices.

The Company increased its sales personnel from 18.2 full-time equivalents
("FTEs") in 1994 to 25.2 FTEs in 1995, an increase of 38.5%. The Company
believes that this increase in sales personnel was the primary reason for the
increased sales volume during 1995. Another factor contributing to the sales
growth in 1995 was an average price increase of 5% that was implemented by the
Company in August 1995.

<PAGE>

COST OF SALES. The increase in cost of sales for 1995 of $2,420,000 was
primarily attributable to increased sales volume and increases in the cost of
certain raw materials as described below. As a result of the increase in cost of
sales, the gross profit margin decreased slightly during 1995 to 32.6% from
34.4% in 1994.

Component and fabric costs increased $1,450,000 or 35.1%. As a percentage
of sales, component and fabric costs increased from 33.8% to 36.0%. This
increase is largely attributable to the purchase of certain higher priced new
components rather than used components due to the limited availability of such
used components. In particular, the Company began purchasing certain wood
components from third party suppliers at prices substantially higher than had
been customary in the used market. In the fourth quarter, the Company expanded
its woodworking capabilities in order to manufacture these components internally
at costs more closely aligned with the lower costs found in the used market.
Also, suppliers of new metal components and parts increased prices early in 1995
in response to a general increase in the price of steel. During 1995 the Company
began contracting with third party metal suppliers to provide certain component
parts which are either in short supply in the used furniture market or which are
more economically purchased new. Rather than buying additional Work Stations to
source a single part, the Company buys only the parts needed. The Company is
expanding this practice where practical and believes significant cost savings
can be achieved as compared to purchasing all parts in the used furniture
market.

Remanufacturing costs increased $970,000 or 24.9%. Compensation costs, the
largest single component of remanufacturing costs, increased $250,000 or 12.6%.
Compensation as a percentage of sales decreased from 16.3% to 14.5% as the
Company continued to reduce labor costs per unit produced. Expressed as a
percentage of cost of sales, compensation declined from 24.8% to 21.5%. Other
remanufacturing costs increased $720,000 or 37.9% primarily as a result of
increased freight, utility and employee benefit costs. As a percentage of sales
these costs increased from 15.5% to 16.9%. During 1995 the Company relocated its
Washington, D.C. sales office and established a regional installation operation.
The building was leased early in the year, but the installation operation was
not staffed until late in the year. Consequently, rent expense was incurred for
a portion of the year without corresponding revenues.

SELLING AND MARKETING EXPENSES. During 1995 the Company continued to expand
its marketing efforts through increased advertising and the establishment and
operation of a telemarketing function. While print and other media advertising
have been effective in identifying short term leads, and to some extent in
building name recognition, the Company believes the telemarketing process will
be more effective in identifying longer term prospects and sources of supply for
used Work Stations. Expenses incurred in 1995 in operating the telemarketing
function include salaries, employee benefit costs, telephone expense and call
list fees.

GENERAL AND ADMINISTRATIVE EXPENSES. Total general and administrative
expenses increased $60,000 or 6.6%. As a percentage of sales these expenses
decreased to 6.3% in 1995 from 7.4% in the prior year, and further decreases are
expected in the future as the Company continues to enjoy certain economies of
scale.

OTHER (INCOME) EXPENSE. Interest expense increased $60,000 or 60.0% during
1995 as a result of increased borrowings under the Line of Credit to support
increases in inventory and accounts receivable.

COMPARISON OF YEARS ENDED DECEMBER 31, 1994 AND DECEMBER 31, 1993

SALES. Sales in 1994 were $12,220,000, an increase of $4,380,000 or 55.9%
over sales in 1993. The Company's sales are highly dependent upon its
company-owned sales offices which increased from four offices at the end of 1993
to seven offices at the end of 1994. The Company also increased sales personnel
from 8.4 FTEs in 1993 to 18.2 FTEs in 1994, an increase of 117%. The Company
believes that these increases in sales offices and personnel were the primary
reasons for the increase in sales during 1994.

COST OF SALES. Cost of sales increased $2,580,000 or 47.4% during 1994. The
gross margin increased to 34.4% from 30.6% in 1993, primarily as a result of
reduced production costs per unit as described below. Component and fabric costs
increased $1,520,000 or 58.2%. As a percentage of sales, components and fabric
costs increased from 33.3% to 33.8%.

Remanufacturing costs increased $1,060,000 or 37.5%. Compensation costs,
the largest single component of remanufacturing costs, increased $440,000 or
28.4%. During 1994 the Company converted its production facility from a "job
shop" to a "process shop" to enable it to reduce labor costs per unit produced.
Partly as a result of this conversion, compensation as a percentage of sales
decreased from 19.8% to 16.3%. As a percentage of cost of sales, compensation
decreased from 28.5% to 24.8%. Other remanufacturing costs increased $620,000 or
48.4%. As a percentage of sales these costs decreased from 16.3% to 15.5% as the
Company more fully utilized production capacity added in 1993.

<PAGE>

SELLING AND MARKETING EXPENSES. During 1994 the Company continued to expand
its marketing efforts through increased advertising and promotion. Total selling
expenses increased $720,000 or 93.5%. Salesperson compensation increased
$540,000 or 103.8% resulting from a large increase in the number of salespeople
employed. Advertising and promotional expenses increased $80,000 or 114.3% in
support of the larger sales force.

GENERAL AND ADMINISTRATIVE EXPENSES. Total general and administrative
expenses increased $180,000 or 24.7%. As a percentage of sales, these expenses
decreased to 7.4% from 9.3%. The number of administrative personnel was
increased to support the higher sales volume, while all other expenses were
tightly controlled.

OTHER (INCOME) EXPENSE. Interest expense increased $50,000 or 100.0% during
1994 as a result of increased borrowings to support increases in inventory and
accounts receivable.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's working capital needs have been driven
primarily by the growth associated with its rapidly expanding business. The
Company's primary sources of liquidity have been cash generated from operations
and borrowings under its Line of Credit from Crestar Bank. On May 9, 1996, the
Company increased the maximum amount available under its Line of Credit to
$5,000,000 and extended the expiration date to April 30, 1997. At April 30,
1996, there were $3,952,000 in borrowings outstanding under the Line of Credit
partly as a result of a dividend paid to existing shareholders on March 29,
1996. See "Prior S Corporation Status." Borrowings on the Line of Credit bear
interest at the lesser of the Crestar Bank prime rate or the thirty day LIBOR
plus 2.25% (7.69% at May 1, 1996).

Net cash provided by (used in) operating activities was $(420,000) for the
quarter ended March 31, 1996, and $10,000, $290,000 and $(330,000) for the years
ended December 31, 1995, 1994 and 1993, respectively. Because of the Company's
rapid growth, substantially all of its net cash provided by operating activities
(before changes in operating assets and liabilities) for the quarter ended March
31, 1996 and in 1995, 1994 and 1993 was used primarily to fund increased
receivables and inventories. Trade accounts receivable and inventories increased
a total of $1,190,000 during the quarter ended March 31, 1996, $2,440,000 during
1995 and $1,460,000 during 1994. The increases in trade accounts receivable were
due primarily to the growth in sales volume and in part to increases in the
accounts receivable collection period (the "Collection Period"). The Collection
Period, computed by dividing ending accounts receivable by the average daily
sales during the quarter, grew from 43 days at December 31, 1994 to 63 days at
December 31, 1995 to 64 days at March 31, 1996. The 43-day Collection Period at
December 31, 1994 was unusually low due to prepayments on certain orders shipped
in the fourth quarter of 1994. Since 1993, the Company's Collection Period has
ranged from a low of 43 days to a high of 71 days, with an average of 55 days.
Total bad debt writeoffs, net of recoveries, for the past three calendar years
were $180,000 or 0.5% of sales. The Company requires most new customers to pay a
cash deposit at the time an order is placed primarily as a means to reduce its
exposure to credit losses. Customer deposits, excluding non-cash deposits made
under the Company's asset banking program, as of December 31, 1995 and 1994 were
$280,000 and $300,000, respectively. The Company does not anticipate future
credit losses to differ materially from historical percentages. Inventories at
December 31, 1994 and 1995 and for the quarter ended March 31, 1996 increased in
line with the general increase in the Company's business. In addition, since
prices of used furniture vary greatly in the marketplace based on seasonality
and source, the Company generally purchases inventory when prices are favorable
rather than based on target stocking levels. While this methodology may increase
carrying costs somewhat, overall costs are generally reduced.

Net cash used in investing activities was $210,000 for the quarter ended
March 31, 1996, and $520,000, $100,000 and $270,000 for the years ended December
31, 1995, 1994 and 1993, respectively. During 1995, the Company's primary use of
cash in investing activities was for the purchase of $525,000 in factory and
office equipment. The most significant investment was the expansion and
modernization of the Richmond wood fabricating facility. This facility produces
new panels, worksurfaces, and shelf ends. The Company has no plans for capital
expenditures during the remainder of 1996 other than those discussed under "Use
of Proceeds."

Net cash was provided by financing activities for the first quarter of 1996
and in 1995, 1994 and 1993. In addition to borrowings under the Line of Credit,
the Company financed the acquisition of woodworking equipment in 1995 through a
three-year term note with a principal amount of $300,000. The note bears
interest at 7.75% and requires current payment of principal and interest.
Historically, the Company has distributed a portion of its earnings each year to
its shareholders to enable them to pay federal and state income taxes on their
pro rata share of S Corporation income and to provide them with a return on
their investment. The Company distributed $950,000 to shareholders in 1995 and
$470,000 in 1994. The Company made cash payments in 1995 totaling $140,000 to
purchase and retire Common Stock, thereby reducing the number of outstanding
shares from 2,457,000 at December 31, 1994 to 2,429,933 at December 31, 1995.

<PAGE>

As the Company implements its planned expansion, it will require more funds
than it has historically needed. Management believes that the net proceeds of
the offering, together with cash generated from operations and available
borrowings under the Line of Credit, will provide adequate funds for the
Company's anticipated needs, including working capital and expansion of sales
offices and product lines, for at least twelve months following the offering.
Management also believes that cash provided from operations will be sufficient
to satisfy all existing debt obligations as they mature.

IMPACT OF INFLATION

Inflation has not had a significant effect on the Company's operations.

<PAGE>
BUSINESS

The Company was incorporated under the laws of the Commonwealth of Virginia
on September 11, 1989. The Company believes it is the largest independent
remanufacturer of office Work Stations in the United States as measured by
revenues, according to a study conducted by Radley Resources, Inc., an
independent market research firm. The Company operates a remanufacturing
facility in Richmond, Virginia and a limited finishing and assembly plant in
Atlanta, Georgia. To date, the Company's products have been sold principally in
the mid-Atlantic and southeastern regions of the United States.

THE OFFICE FURNITURE INDUSTRY

The trend in the office furniture industry for the past twenty 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 market for new and remanufactured office furniture in the United States
for 1995 has been estimated to be approximately $9.4 billion. This represents an
increase of approximately 7.8% over the estimated 1994 market for new and
remanufactured office furniture of approximately $8.7 billion. The Company
believes that the market for used and remanufactured Work Stations was
approximately $500 million in 1995. The Company believes that the
remanufacturing sector of the industry will continue to grow at a much faster
rate than the new office furniture market.

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, Herman Miller and 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 with existing Work Stations 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 has grown steadily over the
past several years. The Company believes this growth is principally due to the
greater availability of high quality remanufactured Work Stations at prices
substantially 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 purchases used Work Stations from end-users, brokers and
dealers and transports the Work Stations to its facility in Richmond, Virginia.
The Work Stations are disassembled, inventoried by component parts and stored.
Remanufacturing usually includes sanding, painting, laminating, reupholstering
and updating electrical components. All of the Company's components installed
during the remanufacturing process meet the safety standards established by
Underwriters Laboratories. The Company believes it is one of only a few
remanufacturers whose Work Station components are listed with Underwriters
Laboratories.

The Company's design staff works with customers to maximize available
office space through customized space plans. Customers are able to choose from
among several colors of laminate and paint and over 1,000 different fabrics.
After the initial sales call, the Company responds to the customer's needs with
a proposal which includes a computer-aided design

<PAGE>

(CAD) of the space, the number of Work Stations and the cost, typically within
72 hours. 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 remanufactured 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 giving the Company control over the
entire process. The Company's large inventory of disassembled component parts
permits shipping generally within three weeks of receiving a purchase order. 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 facility includes all of the equipment
required to manufacture and/or 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 most
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. Limited finishing and assembly operations also take place at the
Company's facility in Atlanta, Georgia.

Open Plan primarily sells Work Stations through a network of seven
Company-owned direct sales offices. The Company believes that each of the fifty
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. The Company's
sales and purchasing efforts are supported by a telemarketing division which
identifies potential customers and sources of used Work Stations.

BUSINESS STRATEGY

The Company believes its success is attributable to the following key
components of its business strategy:

LOW COST PRODUCER. The Company buys used Work Stations for approximately 6%
to 10% of the manufacturer's list price from end-users and brokers. Used Work
Stations are sourced through the Company's customers, telemarketing efforts,
dealer network, industry brokers and its own sales force. The Company generally
maintains a level of capital that permits it to purchase used Work Stations at
opportunistic prices when they become available. As a result, the Company's cost
of inventory is believed to be lower than other remanufacturers that purchase
available inventory at current market prices at the time of a customer's order.
By opportunistically purchasing inventory and streamlining operations to provide
a more efficient manufacturing process, the Company has been able to maintain
gross margins of 30% to 35% on Work Stations sold. The Company expects to
continue emphasizing low cost manufacturing by increasing automation within its
plants and utilizing additional eight-hour work shifts to manufacture and
assemble certain components of Work Stations.

VALUE PRICING. The Company's marketing strategy targets both large and
mid-sized businesses. Although the Company's typical order is for ten Work
Stations, or approximately $25,000, the Company also serves several Fortune 500
customers who generally order in much larger quantities. In a typical order, the
Company will sell remanufactured Work Stations at 30% of the manufacturer's list
price for new Work Stations. In contrast, new office furniture from a major
manufacturer will typically sell through such manufacturer's dealer network at
approximately 55% of the manufacturers' list price for new Work Stations. The
Company believes that its ability to sell remanufactured Work Stations at
substantial discounts to the manufacturers' list price gives the Company a
competitive advantage that will help sustain future growth. Due to volume
discounting by the manufacturers and their dealers, the price differential
becomes smaller as the size of the customer order becomes larger. Nevertheless,
the Company believes its low overall costs provide it with a pricing advantage
on all but the very largest orders.

CUSTOMER SERVICE. The Company believes that it offers superior customer
service particularly in providing a quick response to customer needs. The
Company's designers typically deliver to potential customers a computer-assisted
floor plan design and pricing information within 72 hours of making the initial
contact with the customer. The Company delivers substantially all of its Work
Stations to customers within three weeks from the date of the purchase order, as
compared to the typical delivery time for new Work Stations of eight to sixteen
weeks. The Company only uses company employees or approved outside contractors
to install its Work Stations. As a result, the Company can better manage
customer satisfaction and quality control during the installation process. For
example, if additional parts or design changes are required during installation
of the Work Stations, the Company is positioned to quickly supply the needed
parts or make the necessary changes.

<PAGE>

DIRECT SALES FORCE. The Company employs six sales managers and twenty-nine
trained salespersons located in seven sales offices in the metropolitan areas of
Richmond, Washington, D.C./Baltimore, Atlanta, Charlotte, Nashville, Chicago and
New York. The salespersons are supported by seven telemarketers who collect data
on existing and potential customers. The Company's sales force is compensated
through salary, commissions and bonuses that are based on gross sales to
maximize incentives to produce sales. The Company believes that its direct sales
force provides an important competitive advantage over manufacturers of new Work
Stations who distribute through a dealer network and over independent
remanufacturers. Independent remanufacturers are primarily local operations
without a significant number of trained sales employees. Dealers often have
conflicts of interest as a result of carrying other products that compete with
Work Stations. A direct sales force not only gives the Company complete control
over the selling process, but also allows the Company to capture a portion of
the dealer's "mark-up" in addition to the manufacturing profit.

GROWTH STRATEGY

In recent years, the Company has grown by increasing its direct sales staff
and manufacturing capacity. The Company's strategy for future growth includes
the following elements:

EXPANSION OF MARKETS. Approximately 90% of the Company's sales through the
Company's seven sale offices presently occur in the mid-Atlantic and
southeastern regions of the United States. The Company believes it can
substantially increase sales, even without further expansion of its product
line, by opening new sales offices throughout the United States. The Company
believes that the fifty largest metropolitan areas in the United States will
support a sales office. Consequently, the Company intends to use a portion of
the proceeds of the offering to establish sales offices in new market areas,
including the midwestern, southwestern and western regions of the United States,
and to enhance its current sales force of 33 employees as new sales offices are
established.

The following table shows the Company's annual net sales, by sales office
location, for the five years ended December 31, 1995:

<TABLE>
<CAPTION>
ANNUAL SALES BY LOCATION
LOCATION DATE OPENED 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS)
Richmond............................................................ October 1989 $1.6 $3.2 $5.1 $ 5.5 $ 6.2
Washington, D.C./Baltimore.......................................... April 1991 - 0.5 1.6 2.9 3.5
Atlanta............................................................. November 1991 - - 0.8 2.8 3.1
Charlotte........................................................... August 1994 - - - 0.1 1.0
Nashville........................................................... August 1994 - - - 0.1 0.6
Chicago............................................................. November 1995 - - - - 0.1
New York............................................................ March 1996 - - - - -
Closed offices (1).................................................. - - - 0.3 0.8 1.0
Total........................................................ $1.6 $3.7 $7.8 $12.2 $15.5
Salespersons (2)............................................. 2.0 3.8 8.4 18.2 25.2
</TABLE>

(1) Includes sales offices in Fort Lauderdale and Tampa, Florida that were
closed in 1995.

(2) Represents the number of full-time equivalent salespersons employed during
the years indicated.

INNOVATIVE MARKETING PROGRAMS. The Company primarily markets directly to
end-users and, accordingly, has developed a number of innovative marketing
programs. These programs include:

Asset Banking. The Company has established an "asset banking" program in
which businesses may dispose of used Work Stations by "depositing" them with the
Company in exchange for a "credit" toward purchases of the Company's
remanufactured Work Stations in the future. The asset banking program eliminates
storage costs for the customers while at the same time positioning the Company
for a future sale and increasing inventory.

Telemarketing. The Company employs seven telemarketers to prospect for
customers and to acquire used Work Stations for remanufacturing. The Company has
established a database through its telemarketing efforts that identifies
immediate, intermediate and long term prospects for the purchase of
remanufactured Work Stations. There are currently in excess of 100,000 records
in the database and it is the Company's goal to build the most complete database
of any furniture systems producer in the industry. The Company believes that due
to the traditional industry practice of manufacturers distributing their product
through local dealers, original equipment manufacturers have not developed such
a database.

<PAGE>

Private Label. The Company is currently planning to introduce its own newly
manufactured private label Work Stations which it intends to market and sell
through national office products retailers. Although the Company has no prior
experience in manufacturing new Work Stations, the process is similar to the
remanufacturing of used Work Stations. The Company believes it is
well-positioned to capitalize on a private label opportunity that is unavailable
to many manufacturers or remanufacturers who would be competing against their
own dealer network by marketing a private label product through a national
office products retailer. The Company has no such impediment.

Rental. The Company also recently established a rental program in which "as
is" and remanufactured Work Stations are rented to customers and, upon
expiration of the term of the rental, returned to the Company for additional
rental or remanufacturing and sale to other customers. To date, substantially
all of the Company's rentals have been of "as is" Work Stations, although the
Company is planning to expand its rentals of remanufactured Work Stations. The
rental program is attractive to certain customers as a cost-effective
alternative to purchasing Work Stations.

GSA Program. The United States Government Services Administration ("GSA")
recently approved the Company's inclusion on the GSA's New Introductory Schedule
as a distributor of Work Stations and other related products and services to the
federal government. The Company is currently in the process of negotiating the
pricing structures that will be available to the government. This process is
expected to be completed during the second quarter of 1996.

For additional information on the Company's marketing strategies, see
"-Sales and Marketing."

EXPANSION OF PRODUCT LINE. The Company historically has concentrated its
efforts on remanufacturing Herman Miller Work Stations. The Company believes
that it can apply its inventory management, low cost manufacturing and sales and
marketing techniques to products manufactured by Steelcase and Haworth.
Dedicated plant facilities will allow the Company to maintain its operating
efficiency and productivity in manufacturing. The Company intends to use a
portion of the proceeds of the offering to acquire or construct dedicated plant
facilities for remanufacturing Steelcase and/or Haworth products within twelve
to twenty-four months following completion of the offering.

The Company also expects during 1996 to begin to offer its own line of new
office chairs assembled from components acquired from original equipment
manufacturers. The office chairs will be sold as a complement to the sale of
Work Stations and to enhance the concept of one-stop shopping. The Company
currently purchases office chairs from a nationally recognized manufacturer for
sale under a private label program. Fourteen chairs with styles ranging from
adjustable task chairs to high-back executive seating to stack chairs are
currently available. The sale of new office chairs is expected to increase
profit margins by providing more flexibility in finish options and reducing lead
times to customers.

PRODUCTS

The Company's principal product to date has been remanufactured Herman
Miller Work Stations. The Company believes that Work Stations offer significant
advantages over the traditional desk, free-standing file and permanent drywall
dividers common to historical office layouts. Work Stations enable businesses to
house more people in a given space than previously was possible because Work
Stations combine moveable panels, work surfaces, storage units, lighting and
electrical distribution combined 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 air conditioning are not
confined to individual spaces, allowing distribution among more workers which
reduces building and operating costs per employee. Work Stations incorporate
electrical circuitry necessary to operate 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 few
remanufacturers whose Work Station components are listed with Underwriters
Laboratories. Such listing provides the Company with a significant marketing
advantage over other independent remanufacturers.

Manufacturers and remanufacturers customize Work Stations to accommodate
specific job functions. Each manufacturer 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. 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

<PAGE>
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.

Using component parts purchased from third parties, the Company intends to
assemble and upholster its own line of office chairs to sell with its Work
Stations. The Company believes that expanding its product line to offer office
chairs is a natural extension of its product line and an excellent growth
opportunity that fits well with its current operations. In addition, the Company
is planning to introduce its own private label Work Stations which it intends to
market and sell through a national office products retailer. See "-Growth
Strategy."

INVENTORY

The number of installed Work Stations has increased steadily over the past
twenty years and is now believed to exceed 19 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. The Company also operates a telemarketing program to locate inventory
throughout the United States.

Manufacturers of new Work Stations have developed trade-in programs to
assist their dealers in encouraging their customers to purchase the 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 of
the manufacturer. While each manufacturer has a slightly different approach to
the trade-in market, each manufacturer frequently contacts 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 parts should be cleaned and sold as part of its
"as is" sales program or remanufactured and stored as inventory and sold
thereafter. The Company currently has in its inventory the requisite component
parts with which to remanufacture approximately 5,000 Work Stations. The Company
strives to ship its customers' orders in three weeks or less. The Company also
has the ability to purchase new parts and accessories which are in short supply
in the used furniture market from third party vendors, thereby eliminating the
need to purchase additional Work Stations for these specific parts. The Company
believes its ability to opportunistically acquire used Work Stations at
attractive prices and hold them for future sale gives it a competitive advantage
over other remanufacturers with less capital to do the same.

The Company utilizes a computerized inventory control system which serves
its sales, production, shipping and accounting functions. The system enables the
Company to continually monitor its inventory of component parts, to determine
its needs for additional purchases of used Work Stations, to track its work in
process and to facilitate the prompt delivery of remanufactured Work Stations to
its customers.

The Company plans to use a portion of the net proceeds of this offering to
acquire additional inventory of Herman Miller Work Stations as well as inventory
of Steelcase and/or Haworth in connection with the Company's planned expansion
into additional product lines.

DISTRIBUTION

SALES OFFICES. The Company operates seven sales offices in the metropolitan
areas of Richmond, Washington D.C./Baltimore, Atlanta, Charlotte, Nashville,
Chicago and New York. 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 are typically local companies with limited sales and
distribution capacity outside of their immediate market area. Approximately 80%
of Open Plan's sales historically have been made to end-users by the Company's
own sales representatives. The Company intends to open a substantial number of
additional sales offices as conditions permit using a portion of the proceeds of
the offering.

Marketing and distributing its Work Stations through its own sales staff
allows the Company to eliminate the costs and additional price mark-up
associated with wholesale distribution, as well as enabling the Company to
retain direct control and oversight of its products and the selling process. A
direct sales force also permits the Company to deliver quality service to each
customer through its design and installation programs.

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 where the Company does not yet have a sales
office. The

<PAGE>
dealer network allows the Company to market Work Stations on a cost-effective
basis to a large number of businesses which may not be reached by the Company's
sales representatives. Approximately 20% of Open Plan's sales historically have
been made through dealers. The Company believes that its limited dealer network
complements its core growth strategy of expanding revenues through its own sales
offices. All dealer agreements are non-exclusive and may be terminated at any
time, which gives the Company the ability to establish a sales office as soon as
a market becomes capable of supporting an office.

"AS IS" SALES. A small but profitable portion of Open Plan's sales are 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 Company sells "as is" Work Stations at prices that are
typically 20% of the retail list price for new Work Stations. The "as is"
program appeals to customers seeking "budget" prices for quality used Work
Stations. The Company also uses the "as is" program as a means to reduce excess
inventory.

SALES AND MARKETING

GENERAL. The Company's sales and marketing strategy relies primarily upon
producing quality products at competitive prices and providing superior customer
service. See "-Business Strategy." The Company's sales offices account for
approximately 80% of sales. See "-Distribution." Each sales office expends
approximately 3% of its revenues for advertising through direct mail,
billboards, newspapers, business magazines and journals. Direct mailing to
targeted professional groups as well as mailings prior to and following trade
shows have resulted in large sales to several new customers. 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 retained a regional advertising firm in the past calendar
year to design a new logo, corporate brochure and sales presentation materials,
as well as a variety of retail advertising campaigns. The Company is firmly
committed to advertising and constantly re-evaluates the most efficient means of
reaching prospective customers.

The Company's marketing also emphasizes its commitment to recycling.
Through its remanufacturing process, the Company recycles several million pounds
of office systems furniture each year that might otherwise be deposited in
landfills. Some companies have adopted recycling policies or programs that
require those businesses to purchase recycled products in varying quantities.
Because the Company's Work Stations are a recycled product, the Company has 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" based on current list prices of new Work
Stations 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 and are not expected to be
returned to the customer. 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 customer
has the option to receive cash rather than a "credit" toward a Work Station
purchase. The effect of the program is to make a customer's used Work Stations a
renewable asset. 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. Although a customer
may receive a "credit" for non-Herman Miller Work Stations in the program, the
Company is currently able to offer only Herman Miller Work Stations as a
replacement. However, the Company's planned expansion into Steelcase and/or
Haworth Work Stations will allow the Company to "bank" these lines as well,
thereby expanding the availability and attractiveness of the program to more
prospective purchasers of Work Stations.

TELEMARKETING. The Company employs seven telemarketers to prospect for
customers and to acquire used Work Stations for remanufacturing. The Company has
established a database through its telemarketing efforts that identifies
immediate, intermediate and long term prospects for the purchase of
remanufactured Work Stations. The database is not limited to potential
purchasers of Herman Miller Work Stations, but includes potential customers who
currently desire other brands of Work Stations. Thus, when the Company expands
its product line to include Steelcase and/or Haworth, it will be possible to
access the telemarketing database for potential purchasers of these product
lines as well. The database currently contains

<PAGE>

more than 100,000 records of actual and potential customers. It is the Company's
goal to build the most complete database of any furniture systems manufacturer.
The Company believes that due to the traditional industry practice of
manufacturers distributing their product through local dealers, original
equipment manufacturers have not developed such a database. With time,
utilization of the database may supplant a portion of the Company's retail print
advertising as it allows the Company to identify specific companies to be
directly marketed by a Company representative.

RENTAL PROGRAM. The Company's rental program offers a cost-effective
alternative to ownership of Work Stations which the Company believes could
become a significant source of revenue in the future. Under the rental program,
the Company rents its Work Stations and receives rent payments during the term
of the lease. 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 for
an additional profit. The minimum rental term is six months. 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. To date,
substantially all of the Company's rentals have been of "as is" Work Stations,
although the Company is planning to expand its rentals of remanufactured Work
Stations.

GOVERNMENT SERVICES ADMINISTRATION. The GSA recently approved the Company's
inclusion on the GSA's New Introductory Schedule as a distributor of Work
Stations and other related products and services to the federal government. The
Company is currently in the process of negotiating the pricing structures that
will be available to the government. This process is expected to be completed
during the second quarter of 1996 and will enable 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
Company believes that its asset banking program should be very attractive to the
government due to the large inventories of excess and aging Work Stations held
by the government.

CUSTOMERS

The Company's customers range from small businesses to Fortune 500
companies. The typical size of a customer order is ten Work Stations or
approximately $25,000. Profit margins on smaller orders by small to mid-sized
customers are greater than on larger orders by Fortune 500 companies due to
volume discounts provided by manufacturers of new Work Stations on large orders,
which the Company is required to meet to compete for such orders. The Company is
not dependent upon any single customer or any single group of customers for a
significant portion of its sales. In 1995, the largest customer accounted for
less than 6% 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. See
"Risk Factors-Competition." In purchasing used Work Stations, the Company
competes with manufacturers, dealers, brokers and other remanufacturers. The
competition between remanufacturers and either manufacturers or 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 competes with manufacturers, dealers, brokers and other
remanufacturers in the sale of remanufactured and "as is" Work Stations.
Competition is primarily based upon price, design, quality and customer service.
Certain manufacturers, such as Herman Miller and Steelcase, have operations that
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 innovative marketing programs, direct sales force, discount pricing and
customer service. However, manufacturers and dealers of new and remanufactured
Work Stations have certain competitive advantages, including established
distribution channels and marketing programs, substantial financial strength,
long-term customers, ready access to component parts, and availability of used
Work Stations through trade-ins. Manufacturers also can sell new Work Stations
at very substantial discounts which reduces the Company's pricing advantage.
Such deeply discounted sales, however, generally occur only for very large
orders which often provide remanufacturers such as the Company the opportunity
to acquire used Work Stations of such purchasers at very attractive prices.

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.

<PAGE>

See "-Distribution." 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 completely remanufacture Work Stations.
The Company's remanufacturing facilities include all of the equipment required
to produce new as well as remanufactured Work Stations including sanding,
painting, drying, woodworking and reupholstering equipment, and parts
manufacturing 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
no trademarks or patents.

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 that the
remanufacturing of such Work Stations does not constitute an infringement of 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 would 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 from time to time manufactures new component parts that it
cannot purchase through the used Work Station market. In addition, the Company
expects to introduce newly manufactured private label Work Stations to be sold
through a national office products retailer. The Company intends to review
existing patents applicable to Work Stations in the ordinary course of
manufacturing new component parts and developing its own product line. See "Risk
Factors-Risk of Patent Infringement Claims."

SEASONALITY AND BACKLOG

Historically, the Company's sales volume has been lower in the spring and
summer months and higher in the fall and winter months. The Company believes
that this seasonal increase in sales volume, which generally coincides with the
first and fourth quarters of the Company's fiscal year, is due to the tendency
of customers to expend funds budgeted for office furniture either early in the
calendar year or after the summer vacation season. Because the Company
recognizes revenues upon shipment and typically ships Work Stations within three
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 Company's revenues and profits are difficult to predict and may
fluctuate from quarter to quarter. The Company typically does not have a
significant backlog of customer orders because it generally ships products
within three weeks of receipt of an order. See "Risk Factors-Potential
Fluctuations in Quarterly Results; Seasonality."

EMPLOYEES

As of March 31, 1996, the Company had 154 full-time employees, of whom 76
are manufacturing and remanufacturing personnel, six are sales managers, 27 are
salespersons, 15 are installers, 25 are office administrators, telemarketers and
designers and five are management employees. The Company also had nine part-time
employees consisting of five telemarketers, two office administrators and two
manufacturing and remanufacturing 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 with the Company. The executive officers and substantially
all of the salespersons of the Company have agreed that they will not disclose
certain proprietary information of the Company, and upon termination, will not
solicit any customer of the Company for two years and will not compete with the
Company for one year. The Company has never suffered a work stoppage and
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
currently proposed under the Clean Air Act Amendments of 1990 may require
reduced emissions of volatile organic compounds including emissions from paints
and

<PAGE>
solvents used by the Company in the remanufacturing process. As a result, the
Company may be required 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 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 such 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. In addition, the Company has made application for "key-man" insurance
in the amount of $3,000,000 on the life of Mr. Fischer naming the Company as
sole beneficiary. See "Risk
Factors-Dependence Upon Key Personnel."

PROPERTIES

The Company leases 157,720 square feet of space at its remanufacturing
facility in Richmond, Virginia and 43,250 square feet of space at its finishing
plant in Atlanta, Georgia. Effective June 1, 1996, the Company will begin
leasing an additional 22,280 square feet of space at its Richmond facility for a
total of 180,000 square feet. The Richmond lease expires in July 1999, subject
to an option to renew for an additional three-year term. The Atlanta lease
expires in April 1999. The Company's two manufacturing facilities are encumbered
under existing credit arrangements. The Company also has numerous other leases
for its sales offices throughout the states 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 its purposes.

LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, or any proceedings known to be
contemplated by governmental authorities, to which Open Plan is a party or of
which any of its property is the subject.

<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company have been elected to
serve one year terms expiring at the 1997 annual meeting of shareholders. The
Company's Articles of Incorporation and Bylaws will both be amended and restated
immediately prior to the closing of the offering to provide for three classes of
directors and staggered terms of three years each commencing with the 1997
annual meeting of shareholders. See "Description of Capital Stock-Certain
Provisions of the Company's Articles and Bylaws." Class I directors will hold
office until the annual meeting of shareholders in 1998, Class II directors will
hold office until the annual meeting of shareholders in 1999, and Class III
directors will hold office until the annual meeting of shareholders in 2000,
with the members of each class to hold office until their successors are elected
and qualify.

The following table sets forth certain information concerning the directors
and executive officers of the Company:

<TABLE>
<CAPTION>
DIRECTOR OR
NAME AGE POSITION OFFICER SINCE
<S> <C> <C> <C>
Stan A. Fischer (1)......................................... 55 President and Director 1989
Gary M. Farrell (1)......................................... 36 Chief Financial Officer, Secretary 1993
and Director
Gregory P. Campbell......................................... 38 Executive Vice President-Sales 1990
Elizabeth C. Connolly....................................... 39 Vice President-Marketing 1993
David J. Morrison........................................... 35 Vice President-Operations 1995
Troy A. Peery, Jr. (2), (3)................................. 50 Director 1989
Anthony F. Markel (1), (3).................................. 54 Director 1989
Theodore L. Chandler, Jr. (2), (3).......................... 44 Director 1996
Robert F. Mizell (1), (2), (3).............................. 39 Director 1996
C.T. Hill (1), (2).......................................... 45 Director 1996
</TABLE>

(1) To become a member of the Executive Committee of the Board of Directors upon
completion of the offering.
(2) To become a member of the Audit Committee of the Board of Directors upon
completion of the offering.
(3) To become a member of the Compensation Committee of the Board of Directors
upon the completion of the offering.

BUSINESS EXPERIENCE OF MANAGEMENT

Set forth below is a brief summary of the recent business experience and
background of each director and executive officer and certain other key managers
of the Company.

DIRECTORS AND EXECUTIVE OFFICERS

STAN A. FISCHER has been President and a director of the Company since
founding the Company in 1989. From 1986 to 1989, Mr. Fischer was Sales Manager
of Chasen's Business Interiors, Inc., a marketer of new office furniture and
furnishings in Richmond, Virginia. Prior to this, Mr. Fischer was employed by
Xerox Corporation for over ten years in a variety of sales and management
positions. Mr. Fischer is a graduate of the University of Virginia and has been
involved in the office furniture industry for over 10 years.

GARY M. FARRELL has been Chief Financial Officer of the Company since June
1993 and Secretary and a member of the Board of Directors since January 1994.
Prior to his employment by the Company, Mr. Farrell was Vice President and
Corporate Audit Manager at Virginia Beach Federal Savings Bank from April 1992
to May 1993. Mr. Farrell was also employed by NationsBank Corporation from 1984
to 1992 where he held several positions, including Vice President and EDP Audit
Manager. Mr. Farrell is a graduate of Virginia Commonwealth University and is a
Certified Public Accountant.

GREGORY P. CAMPBELL has been Executive Vice President-Sales since August
1993. Mr. Campbell was Vice President of Sales from 1990 to 1994. Previously,
Mr. Campbell was the Sales Manager at Morton Marks & Sons, Inc., a contract
furniture dealer in Richmond, Virginia, from 1980 to 1989. Mr. Campbell is a
graduate of Virginia Polytechnic Institute and State University and has been
involved in the office furniture industry for 17 years.

ELIZABETH C. CONNOLLY has been Vice President-Marketing since August 1994.
Prior to her employment with the Company as Sales Manager in August 1993, Mrs.
Connolly had been Sales Manager at Chasen's Business Interiors, Inc., since
1986. Mrs. Connolly is a graduate of Rutgers University and has been involved in
the office furniture industry for 10 years.

<PAGE>

DAVID J. MORRISON has been Vice President-Operations since September 1995.
Previously, he was an account manager with a subsidiary of Herman Miller from
1992 to 1995 and President of Halmor Associates, Inc., a Michigan-based office
furniture manufacturer, from 1990 to 1992. Mr. Morrison is a graduate of North
Central Michigan College and has been involved in the office furniture industry
for 13 years.

TROY A. PEERY, JR. is President and Chief Operating Officer and a director
of Heilig-Meyers Company, a national retailer of home furniture and furnishings
headquartered in Richmond, Virginia and traded on the New York Stock Exchange.
Mr. Peery has held this position since 1985. Mr. Peery currently serves on the
Board of Directors of Galeski Optical Co. and S&K Famous Brands, Inc., and
serves on the Board of Trustees for Randolph Macon College and the Medical
College of Virginia.

ANTHONY F. MARKEL is President, Chief Operating Officer and a director of
Markel Corporation, a Richmond, Virginia based publicly held insurance brokerage
company. Mr. Markel has held these positions since 1992. Prior to 1992, Mr.
Markel was employed in various other capacities with Markel Corporation.

THEODORE L. CHANDLER, JR. is a member and a director of the law firm of
Williams, Mullen, Christian & Dobbins in Richmond, Virginia. Mr. Chandler is a
director of Lawyers Title Corporation, a national title insurance underwriter
traded on the New York Stock Exchange. Mr. Chandler is also a director of Hilb,
Rogal & Hamilton Company, a national insurance intermediary traded on the New
York Stock Exchange.

ROBERT F. MIZELL is a Senior Vice President and a director of Davenport &
Co. of Virginia, Inc., where he manages the firm's Corporate Finance Department.
Prior to joining Davenport in 1988, Mr. Mizell was a partner with the accounting
firm of KPMG Peat Marwick. Mr. Mizell is also a director of Manorhouse
Retirement Centers, Inc. and Security Filter Products Co., Inc.

C.T. HILL is President/Capital Region of Crestar Bank, the Virginia banking
subsidiary of Crestar Financial Corporation. Prior to his appointment as
President/Capital Region in 1994, Mr. Hill had been Executive Vice President of
Crestar Bank.

OTHER KEY MANAGERS

RANDY L. ALDERSON has been Regional Vice President since 1994 and was
Regional Manager from 1992 to 1994. Prior to his employment by the Company, he
had been a Sales Representative for American Furniture and Fixture Co., Inc. Mr.
Alderson is a graduate of James Madison University and has been involved in the
office furniture industry for 14 years.

DAVID K. DENSON has been a Regional Manager of the Company since 1993. From
1992 to 1993, he was Vice President-Sales for Environmental Interiors, Inc., a
contract office furniture dealer in Harrisburg, Pennsylvania. Mr. Denson is a
graduate of the United States Naval Academy, is a former naval aviator, and has
been involved in the office furniture industry for 17 years.

DAVID E. GREEN has been Director of Procurement since 1994. Mr. Green was
Operations Manager at Chasen's Business Interiors, Inc. from 1985 to 1994 and
has been involved in the office furniture industry for 10 years.

STEPHEN P. HINDLE has been a Marketing Manager since March, 1996. Mr.
Hindle was Vice President of Sales for Creative Office Environments, LLC, a
contract office furniture dealer, from 1992 to 1996, and District Manager of the
Harbinger Company from 1990 to 1992. Mr. Hindle is a graduate of the University
of Maryland, and has been involved in the office furniture industry for 12
years.

LORI M. KERR has been Director of Design since 1990. Mrs. Kerr was Director
of Design at Chasen's Business Interiors, Inc. from 1986 to 1990. Mrs. Kerr is a
graduate of West Virginia University and has been involved in the office
furniture industry for 10 years.

DENNIS E. LAMBERT has been a Regional Manager since 1992. Mr. Lambert was
Vice President-Sales for Joyce Office Products from 1987 to 1992. Mr. Lambert is
a graduate of the University of Richmond and has been involved in the office
furniture industry for 12 years.

DAVID C. SPANNAUS has been a Regional Manager since 1994. Mr. Spannaus was
a principal in Modular Office Design, Inc., a contract furniture dealer in
Raleigh, North Carolina, from 1992 to 1994, and Director of Sales and Marketing
for Storr Office Environments in Raleigh, North Carolina, from 1990 to 1992. Mr.
Spannaus is a graduate of Elmira College and has been involved in the office
furniture industry for 12 years.

<PAGE>

KERRY M. WASHAY has been a Regional Manager since 1994. Mr. Washay was
President of Encore, Inc., an independent office furniture sales representative
company, from 1989 to 1994, Vice President of Sales for International Contract
Furniture, Inc., a New York-based contract furniture dealer, from 1987 to 1988.
From 1975 to 1987, he held a variety of positions in the office furniture
industry, including six years as Eastern Region Manager for Herman Miller. Mr.
Washay is a graduate of Western Illinois University and has been involved in the
office furniture industry for 21 years.

FAMILY RELATIONSHIPS

No family relationships exist among any of the directors or between any of
the directors and executive officers of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

EXECUTIVE COMMITTEE. The Company will establish an Executive Committee,
comprised of a majority of non-employee directors, after completion of this
offering, which may exercise, subject to applicable provisions of law, all the
powers of the Board in the management of the business and affairs of the Company
when the Board is not in session.

AUDIT COMMITTEE. The Company will establish an Audit Committee, comprised
exclusively of non-employee directors, after completion of this offering to make
recommendations concerning the engagement of independent public accountants,
review with the independent public accountants the plans and results of the
audit engagement, approve professional services provided by the independent
public accountants, review the independence of the independent public
accountants, consider the range of audit and non-audit fees and review the
adequacy of the Company's internal accounting controls.

COMPENSATION COMMITTEE. The Company will establish a Compensation Committee
after completion of this offering consisting exclusively of non-employee
directors to determine compensation for the Company's directors and executive
officers and to administer the Company's stock option plans.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information with respect to the
beneficial ownership of shares of the Company's Common Stock as of March 31,
1996, as adjusted to reflect the sale of the Shares offered hereby, by each
director of the Company, by those executive officers named in the Summary
Compensation Table set forth under the caption "Executive Compensation" below,
and by all of the directors and executive officers as a group.

<TABLE>
<CAPTION>
PERCENT OF CLASS
BENEFICIALLY OWNED (2)
NUMBER OF SHARES PRIOR TO AFTER
NAME BENEFICIALLY OWNED (1) OFFERING OFFERING (3)
<S> <C> <C> <C>
Stan A. Fischer............................................................ 1,062,042 43.71% 25.72%
Gary M. Farrell (4)........................................................ 15,082 * *
Gregory P. Campbell........................................................ 100,545 4.14 2.43
Elizabeth C. Connolly (4).................................................. 15,000 * *
David J. Morrison.......................................................... - - -
Troy A. Peery, Jr.......................................................... 69,376 2.86 1.68
Anthony F. Markel.......................................................... 133,131 5.48 3.22
Theodore L. Chandler, Jr................................................... - - -
Robert F. Mizell........................................................... - - -
C.T. Hill.................................................................. - - -
All directors and executive officers as a group (10 persons)............... 1,395,176 57.42% 33.78%
</TABLE>

* Percentage of ownership is less than 1% 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, 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. Each shareholder identified in the table possesses sole voting and
investment power with respect to his shares.

(2) Percentages for shares beneficially owned prior to the offering are based on
2,429,933 shares of Common Stock issued and outstanding at March 31, 1996.
Percentages for shares beneficially owned after the offering assume the sale
of all 1,700,000 of the Shares offered hereby and 4,129,933 shares of Common
Stock issued and outstanding upon completion of the offering.
(3) Does not include Shares that may be purchased in the offering by the persons
named in the table.

(4) Includes 15,000 shares pledged to a commercial bank as security for a loan
to acquire such shares.

<PAGE>
The Company and the Underwriters have agreed to reserve up to 10% of the
offering, or 170,000 shares, for sale to existing shareholders, including
directors and executive officers of the Company. None of these persons have any
obligation to purchase Shares in the offering.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The persons, groups or other entities known by the Company to be beneficial
owners of more than 5% of the outstanding Common Stock of the Company as of
March 31, 1996, as adjusted to reflect the sale of the Shares offered hereby,
are set forth in the following table:

<TABLE>
<CAPTION>
PERCENT OF CLASS
BENEFICIALLY OWNED (2)
NAME AND ADDRESS NUMBER OF SHARES PRIOR TO AFTER
OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OFFERING OFFERING (3)
<S> <C> <C> <C>
Stan A. Fischer............................................................ 1,062,042 43.71% 25.72%
c/o Open Plan Systems, Inc.
4299 Carolina Avenue
Building C
Richmond, Virginia 23222

P. D. Brooks, Jr........................................................... 151,822 6.25 3.68
8 Redfox Road
Manakin-Sabot, Virginia 23103

Gary L. Markel............................................................. 145,000 5.97 3.51
9700 9th Street North
Suite 400
St. Petersburg, Florida 33702

Edwin W. Mugford........................................................... 141,000 5.80 3.41
c/o Royal Oldsmobile-Isuzu, Inc.
8200 West Broad Street
Richmond, Virginia 23294

Anthony F. Markel.......................................................... 133,131 5.48 3.22
c/o Markel Corporation
4551 Cox Road
Richmond, Virginia 23060

A. G. Bertozzi............................................................. 121,658 5.01 2.95
3006 Impala Place
Richmond, Virginia 23228
</TABLE>

(3) Does not include Shares that may be purchased in the offering by the persons
named in the table.

DIRECTOR COMPENSATION

Prior to December 31, 1995, directors received no compensation for serving
in such capacity. After completion of this offering, each non-employee director
of the Company will receive 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 will also be reimbursed for certain
expenses incurred in connection with attendance at Board and committee meetings.

<PAGE>

On March 27, 1996, the Company's shareholders adopted the 1996 Stock Option
Plan for Non-Employee Directors (the "Outside Directors' Plan") to become
effective upon the closing of the offering. The maximum aggregate number of
shares of Common Stock that may be issued pursuant to the Outside Directors'
Plan is 25,000. The Outside Directors' Plan will be administered by the
Compensation Committee of the Board of Directors of the Company, and will
terminate following the annual meeting of shareholders in 2000.

Under the Outside Directors' Plan, each non-employee director of the
Company serving on the Board of Directors on July 1, 1996 shall be 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 price of stock options granted
under the 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. Options
granted under the 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.
No options have been granted under the Outside Directors' Plan.

EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended December 31,
1993, 1994 and 1995, the compensation paid by the Company to the Company's
President and each of its four other most highly paid executive officers in all
capacities in which they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) COMPENSATION
<S> <C> <C> <C> <C> <C>
Stan A. Fischer............................... 1995 $125,000 $40,000 - $116,348(2)
President 1994 125,000 50,000 $ 18,686(3) 52,169
1993 95,435 30,000 - 22,046

Gary M. Farrell (4)........................... 1995 65,000 20,000 - 1,950(5)
Chief Financial Officer 1994 64,946 15,000 - -
1993 35,138 5,000 - -

Gregory P. Campbell........................... 1995 85,000 20,000 - 10,982(6)
Executive Vice President-Sales 1994 84,752 25,000 - 8,432
1993 66,319 15,000 - 8,432

Elizabeth C. Connolly (7)..................... 1995 60,000 20,000 - 1,662(5)
Vice President-Marketing 1994 42,792 12,000 - -
1993 19,510 2,000 - -

David J. Morrison (8)......................... 1995 11,750 5,000 7,521(9) -
Vice President-Operations 1994 - - - -
1993 - - - -
</TABLE>

(1) Except as otherwise indicated, the dollar value of perquisites and other
personal benefits did not exceed the lesser of $50,000 or 10% of the total
amount of salary and bonus reported for each officer during the years shown.

(2) Represents $1,875 contributed to the Company's Section 401(k) plan on behalf
of Mr. Fischer and $114,473 in premiums paid by the Company on life
insurance policies to fund certain stock purchase obligations to Mr.
Fischer. See
"-Transactions With Management."

(3) Includes a $16,186 payment to Mr. Fischer for interest expense associated
with an outstanding loan to the Company and $2,500 relating to an automobile
allowance.

(4) Mr. Farrell was employed by the Company commencing in June 1993. Amounts
shown for 1993 are for the period from June 1993 to December 31, 1993.

<PAGE>
(5) Represents amounts contributed to the Company's Section 401(k) plan on
behalf of the named officer. See
"-Employee Benefit Plans-401(k) Thrift Plan."

(6) Represents $2,550 contributed to the Company's Section 401(k) plan on behalf
of Mr. Campbell and $8,432 in premiums paid by the Company on life insurance
policies to fund certain stock purchase obligations to Mr. Campbell. See
"-Transactions With Management."

(7) Mrs. Connolly was employed by the Company commencing in August 1993. Amounts
shown for 1993 are for the period from August 1993 to December 31, 1993.

(8) Mr. Morrison was employed by the Company commencing in September 1995.
Amounts shown for 1995 are for the period from September 1995 to December
31, 1995.

(9) Represents moving expenses paid by the Company to Mr. Morrison.

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.

EMPLOYMENT AND SEVERANCE CONTRACTS

Each executive officer of the Company and substantially all of the
Company's salespersons have agreed not to disclose certain proprietary
information of the Company, and upon termination of employment, not to solicit
the Company's customers for a period of two years or compete with the Company
for a period of one year following termination of employment.

EMPLOYEE BENEFIT PLANS

1996 STOCK INCENTIVE PLAN. The Company's 1996 Stock Incentive Plan (the
"Incentive Plan") was adopted by the Board of Directors and the current
shareholders on March 27, 1996 and will become effective upon the closing of the
offering. 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 be administered
by the Compensation Committee consisting of non-employee directors of the
Company, which determines the optionees and the terms of the options granted,
including the exercise price, number of shares subject to the option, and the
exercisability thereof. The Incentive Plan will terminate on March 26, 2006.

The exercise price of incentive 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 exercise price for non-statutory stock options will be
established by the Compensation Committee. The terms of all other options
granted under the Incentive Plan will be determined by the Compensation
Committee. The aggregate fair market value of Common Stock (determined as of the
date of the option grant) for which an incentive stock option, or related stock
appreciation rights may for the first time become exercisable in any calendar
year may not exceed $100,000.

There are no outstanding options to purchase shares of the Company's Common
Stock.

401(K) THRIFT PLAN. The Company has adopted a thrift savings plan qualified
under Section 401(k) of the Internal Revenue Code (the "401(k) Plan"). Employees
who have attained the age of 21 years and completed 12 months of service with
the Company are eligible to participate in the 401(k) Plan. Eligible employees
who elect to participate may contribute up to 15% of their annual salary to the
401(k) Plan. The Company will match 50% of employee contributions up to 6% of
the employee's compensation. Employees become fully vested in their
contributions immediately at the time of contribution and in employer-matching
contributions after six years of employment.

TRANSACTIONS WITH MANAGEMENT

In June 1994, the Company advanced $200,000 to Stan A. Fischer, President
of the Company, in connection with the purchase by Mr. Fischer of certain real
estate. Interest on the outstanding principal balance was computed at the same
interest rate incurred by the Company on its working capital Line of Credit with
Crestar Bank. On March 31, 1996, the entire outstanding balance of the loan,
including certain advances made to Mr. Fischer during the term of the loan, was
repaid in full. The largest aggregate amount outstanding under the loan from
June 1994 to March 1996 was $268,808.

The Company has been taxed as an S Corporation for federal income tax
purposes since its organization. As a consequence, the taxable net earnings of
the Company are taxed to the individual shareholders in proportion to their
individual stockholdings, and the federal income taxes thereon are the personal
liability of the shareholders. Commencing in 1992, the

<PAGE>

Company has distributed to shareholders a portion of the Company's S Corporation
earnings taxable to such shareholders. The Company will make a final S
Corporation distribution to current shareholders from the proceeds of this
offering. As part of the consideration for the final S Corporation distribution,
each current shareholder of the Company has agreed to pay his pro rata portion
of any additional taxes, interest, penalties and expenses which may be imposed
against or incurred by the Company based upon or in connection with a
determination by a taxing authority that the Company's S Corporation status was
invalid for any taxable periods up to the date immediately preceding the closing
of the offering. See "Prior S Corporation Status."

In connection with the Company's status as an S Corporation for federal
income tax purposes, the Company has made individual loans in quarterly advances
to Stan A. Fischer, commencing in 1992, and to Gregory P. Campbell, the
Executive Vice President - Sales of the Company, commencing in 1995, in sums
sufficient to allow each to pay his estimated quarterly federal income taxes.
Interest on the outstanding balances owed by Mr. Fischer and Mr. Campbell accrue
in accordance with the Annual Federal Blended Rate. Partial repayments on each
loan are made by Mr. Fischer and Mr. Campbell in April of each year following
receipt of their S Corporation distribution for the previous year. The largest
aggregate amount outstanding on Mr. Fischer's loan during 1995 was $283,536. The
largest aggregate amount outstanding on Mr. Campbell's loan during 1995 was
$17,384. As of March 31, 1996, the outstanding principal balance under each loan
had been repaid in full. Accrued interest in the amount of $19,603 for Mr.
Fischer and $1,213 for Mr. Campbell remained unpaid at April 30, 1996.
Additional advances of $110,485 and $10,000 were made under these loans to Mr.
Fischer and Mr. Campbell, respectively, as of April 1, 1996 to allow each of
them to pay 1996 quarterly estimated federal income taxes. These additional
advances are expected to be repaid upon completion of the offering from the
final distribution made to shareholders in connection with the termination of
the Company's S Corporation status. See "Prior S Corporation Status."

The Company currently guarantees indebtedness of five shareholders of the
Company to Crestar Bank in connection with certain purchases of the Company's
Common Stock by such shareholders. Each loan is secured by the shareholder's
Common Stock. The principal amount of each loan is paid in annual installments
with interest payable monthly. The aggregate outstanding principal indebtedness
of the five shareholders under these loans was $251,984 at March 31, 1996. Two
of the shareholders for whom loans were guaranteed in full by the Company are
Gary M. Farrell, Chief Financial Officer of the Company, and Elizabeth C.
Connolly, Vice President - Marketing of the Company, each of whom borrowed
$75,000 from Crestar Bank as of January 1, 1994. As of April 30, 1996, the
outstanding principal balances due on the loans to Mr. Farrell and Mrs. Connolly
were each $56,250.

On May 15, 1996, the Company entered into separate agreements with Stan A.
Fischer and Gregory P. Campbell to purchase that number of shares of Common
Stock owned by each at the time of his death which the Company will be able to
purchase with the proceeds of certain life insurance policies in aggregate face
amounts of $3,100,000 and $500,000 on the lives of Mr. Fischer and Mr. Campbell,
respectively. The purchase price for the shares will be the fair market value of
the shares on the date immediately preceding the date of payment of the policy
proceeds to the Company. The Company's purchase obligations under the agreements
are limited to the face amounts of the policies. In 1995, the Company paid
premiums of $114,473 and $8,432 on the policies for Mr. Fischer and Mr.
Campbell, respectively. The agreements replace prior agreements with Mr. Fischer
and Mr. Campbell.

CERTAIN BUSINESS RELATIONSHIPS

Robert F. Mizell, a Senior Vice President of Davenport & Co. of Virginia,
Inc., was elected to serve on the Company's Board of Directors effective March
27, 1996. Davenport & Co. of Virginia, Inc. has provided financial advisory
services to the Company during the past twelve months at fees that are customary
for such services and is one of two firms serving as managing underwriters for
the sale of the Shares offered hereby.

Theodore L. Chandler, Jr., a principal of the firm of Williams, Mullen,
Christian & Dobbins, was elected to serve on the Company's Board of Directors
effective March 27, 1996. Williams, Mullen, Christian & Dobbins serves as
counsel to the Company.

C. T. Hill, the President/Capital Region of Crestar Bank, was elected to
serve on the Company's Board of Directors effective March 27, 1996. The Company
maintains a general banking relationship with Crestar Bank, including depository
services and a $5.0 million working capital Line of Credit that is scheduled to
expire on April 30, 1997. At April 30, 1996, there were $3,952,000 in borrowings
under the Crestar Bank Line of Credit.

<PAGE>
DESCRIPTION OF CAPITAL STOCK

The following summary description of the capital stock of the Company is
qualified in its entirety by reference to applicable provisions of Virginia law
and the Amended and Restated Articles of Incorporation of the Company (the
"Articles") and the Amended and Restated Bylaws of the Company (the "Bylaws"),
which are exhibits to the Registration Statement on file with the Commission.

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

Immediately prior to the closing of this offering, the Company's Articles
of Incorporation will be amended and restated such that the authorized capital
stock of the Company will consist of 50,000,000 shares of Common Stock, no par
value, and 5,000,000 shares of Preferred Stock, no par value. Immediately
following the closing of the offering, the Company estimates that there will be
an aggregate of 4,129,933 shares of Common Stock issued and outstanding and no
shares of Preferred Stock issued and outstanding. As of March 31, 1996, there
were 2,429,933 shares of Common Stock issued and outstanding held by nineteen
holders of record.

COMMON STOCK

The holders of Common Stock are entitled to one vote per share on all
matters voted on by shareholders, including elections of directors, and possess
exclusively all voting power except as otherwise required by law or provided in
any resolution adopted by the Company's Board of Directors with respect to any
class or series of Preferred Stock. The Articles do not provide for cumulative
voting for the election of directors. Subject to any preferential rights of any
outstanding class or series of Preferred Stock designated by the Company's Board
of Directors from time to time, the holders of Common Stock are entitled to such
dividends as may be declared from time to time by the Company's Board of
Directors from funds available therefore, and upon liquidation, dissolution or
winding up will be entitled to receive pro rata all assets of the Company
available for distribution to such holders after payment, or provision for, all
liabilities of the Company. The holders of Common Stock have no preemptive or
other subscription rights, and there are no conversion rights or redemption or
sinking fund provisions with respect to the Common Stock.

PREFERRED STOCK

The Company's Board of Directors is authorized, without further action of
the shareholders of the Company, to provide for the issuance of shares of
Preferred Stock, in one or more classes or series, and to fix for each such
class or series such designations, rights and preferences as are stated in the
resolution adopted by the Company's Board of Directors providing for the
issuance of such class or series and as are not prohibited by law. Such
Preferred Stock may rank prior to the Common Stock as to dividend rights,
liquidation preferences or both, may have full or limited voting rights and may
be convertible into shares of Common Stock. In addition, the issuance of
Preferred Stock by the Board of Directors could be utilized, under certain
circumstances, as a method of preventing or discouraging a takeover of the
Company in which some shareholders may have received a premium for their shares
of Common Stock over the then current market price of such Common Stock. There
are no shares of Preferred Stock outstanding and the Company has no present plan
or agreement to issue shares of Preferred Stock, although it may determine to do
so in the future.

CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION AND BYLAWS

The Articles and Bylaws contain provisions which may have the effect of
delaying or preventing a change in control of the Company. The Articles and
Bylaws provide, subject to the rights of any holders of Preferred Stock: (i)
that at the 1997 annual meeting of shareholders, the Board of Directors shall be
divided into three classes and at each annual meeting of shareholders thereafter
one class shall be elected each year to serve a three-year term, (ii) that
directors may be removed only for cause, (iii) that a vacancy on the Board shall
be filled by the remaining directors, and (iv) that special meetings of the
shareholders may be called only by the President or by the Board of Directors
and may not be called by the shareholders. The Bylaws require advance
notification for a shareholder to bring business before a shareholders' meeting
or to nominate a person for election as a director.

The Articles also contain an "affiliated transaction provision" which
provides that the affirmative vote of the holders of at least 70% of the votes
entitled to be cast by the outstanding shares of capital stock entitled to vote
(the "Voting Stock") shall be required for the approval of transactions with
certain interested shareholders. Such supermajority approval would be required
for (i) a merger or consolidation involving any person or entity who directly or
indirectly owns or controls 10% or more of the votes entitled to be cast by the
Voting Stock (an "Interested Shareholder") at the record date for determining

<PAGE>
shareholders entitled to vote on such merger or consolidation and (ii) a sale,
lease or exchange of substantially all of the Company's assets and property to
or with an Interested Shareholder, or for the approval of a sale, lease or
exchange of substantially all of the assets and property of an Interested
Shareholder to or with the Company. In addition, the Articles provide that the
same 70% vote shall be required for the approval of certain transactions,
including a reclassification of securities, recapitalization, share exchange or
other transaction designed to decrease the number of holders of Common Stock
remaining after any person or entity has become an Interested Shareholder.
Notwithstanding the foregoing, the supermajority shareholder approval
requirement will not apply to any transaction that is approved by the Board of
Directors prior to the time that the Interested Shareholder becomes an
Interested Shareholder.

For purposes of the affiliated transaction provision, a person or entity
shall not be deemed to be an Interested Shareholder if (i) on March 27, 1996,
such person or entity was the beneficial owner of shares representing 10% or
more of the votes entitled to be cast by the Voting Stock or (ii) such person or
entity became the beneficial owner of such shares as a result of acquiring
shares from a person or entity specified in (i) above by gift, testamentary
bequest or the laws of descent and distribution and who has continued thereafter
to be the beneficial owner of shares representing 10% or more of the votes
entitled to be cast by the Voting Stock, or who would have so continued but for
the unilateral action of the Company.

The Articles and Bylaws provide that the affirmative vote of the holders of
at least 70% of the Voting Stock is required to alter, amend or repeal the
foregoing provisions.

The foregoing provisions of the Articles and Bylaws are intended to prevent
inequitable shareholder treatment in a two-tier takeover and to reduce the
possibility that a third party could effect a sudden or surprise change in
majority control of the Board of Directors without the support of the incumbent
Board, even if such a change were desired by, or would be beneficial to, a
majority of the Company's shareholders. Such provisions therefore may have the
effect of discouraging certain unsolicited offers for the Company's capital
stock.

VIRGINIA STOCK CORPORATION ACT

AFFILIATED TRANSACTIONS. The Virginia Stock Corporation Act (the "Virginia
Act") contains provisions governing "Affiliated Transactions" designed to deter
certain coercive two-tier takeovers of Virginia corporations. Affiliated
Transactions include, without limitation, certain mergers and share exchanges,
material dispositions of corporate assets not in the ordinary course of
business, any dissolution of the corporation proposed by or on behalf of an
"Interested Shareholder" (as defined below), or reclassifications, including
reverse stock splits, recapitalizations or mergers of the corporation with its
subsidiaries which have the effect of increasing the percentage of voting shares
beneficially owned by an Interested Shareholder by more than 5%. For purposes of
the Virginia Act, an "Interested Shareholder" is defined as any beneficial owner
of more than 10% of any class of the voting securities of a Virginia
corporation.

Subject to certain exceptions discussed below, the provisions governing
Affiliated Transactions require that, for three years following the date upon
which any shareholder becomes an Interested Shareholder, a Virginia corporation
cannot engage in an Affiliated Transaction with such Interested Shareholder
unless approved by the affirmative vote of the holders of two-thirds of the
outstanding shares of the corporation entitled to vote, other than the shares
beneficially owned by the Interested Shareholder, and by a majority (but not
less than two) of the "Disinterested Directors." A "Disinterested Director"
means, with respect to a particular Interested Shareholder, a member of a
corporation's board of directors who (i) was a member before the date on which
an Interested Shareholder became an Interested Shareholder and (ii) was
recommended for election by, or was elected to fill a vacancy and received the
affirmative vote of, a majority of the Disinterested Directors then on the
corporation's board of directors. At the expiration of the three year period,
these provisions require approval of Affiliated Transactions by the affirmative
vote of the holders of two-thirds of the outstanding shares of the corporation
entitled to vote, other than those beneficially owned by the Interested
Shareholder.

The principal exceptions to the special voting requirement apply to
Affiliated Transactions occurring after the three-year period has expired and
require either that the transaction be approved by a majority of the
Disinterested Directors or that the transaction satisfy certain fair price
requirements of the statute. In general, the fair price requirements provide
that the shareholders must receive the highest per share price for their shares
as was paid by the Interested Shareholder for his shares or the fair market
value of their shares, whichever is higher. The fair price requirements also
require that, during the three years preceding the announcement of the proposed
Affiliated Transaction, all required dividends have been paid and no special
financial accommodations have been accorded the Interested Shareholder, unless
approved by a majority of the Disinterested Directors.

<PAGE>
None of the foregoing limitations and special voting requirements applies
to an Affiliated Transaction with an Interested Shareholder (i) who was an
Interested Shareholder on the date the corporation first became subject to the
provisions of the Virginia Act governing Affiliated Transactions by virtue of
its having 300 shareholders of record or (ii) whose acquisition of shares making
such a person an Interested Shareholder was approved by a majority of the
corporation's Disinterested Directors.

The Affiliated Transactions provisions provide that, by affirmative vote of
a majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation may adopt, by meeting certain voting requirements, an
amendment to its articles of incorporation or bylaws providing that the
Affiliated Transactions provisions shall not apply to the corporation. The
Company has not adopted such an amendment.

CONTROL SHARE ACQUISITIONS. The Virginia Act contains provisions regulating
certain "control share acquisitions," which are transactions causing the voting
strength of any person acquiring beneficial ownership of shares of a public
corporation in Virginia to meet or exceed certain threshold percentages (20%,
33 1/3% or 50%) of the total votes entitled to be cast for the election of
directors. Shares acquired in a control share acquisition have no voting rights
unless granted by a majority vote of all outstanding shares other than those
held by the acquiring person or any officer or employee director of the
corporation. The acquiring person may require that a special meeting of the
shareholders be held to consider the grant of voting rights to the shares
acquired in the control share acquisition. If the acquiring person's shares are
not accorded voting rights (or if no request for a special meeting is made by an
acquiror), the corporation may, if authorized by its charter and bylaws prior to
the control share acquisition, purchase the acquiring person's shares at their
cost to the acquiring person. The Articles authorize the repurchase of any
acquiring person's shares that are not accorded voting rights under the control
share provisions of the Virginia Act. If voting rights are approved and the
acquiring person controls 50% or more of the voting power, all shareholders
other than the acquiring person have dissenters' rights which enable them to
receive the "fair value" of their shares. "Fair value" is not less than the
highest price paid in the control share acquisition. The Virginia Act permits
corporations to opt-out of its provisions by adopting a bylaw or charter
provision prior to a control share acquisition stating that the control share
provisions of the Virginia Act shall not apply. The Articles and Bylaws do not
contain a provision opting-out of the control share provisions of the Virginia
Act.

LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by the Virginia Act, the Articles contain provisions which
indemnify directors and officers of the Company to the full extent permitted by
Virginia law and eliminate the personal liability of directors and officers for
monetary damages to the Company or its shareholders for breach of their
fiduciary duties, except to the extent such indemnification or elimination of
liability is prohibited by the Virginia Act. These provisions do not limit or
eliminate the rights of the Company or any shareholder to seek an injunction or
any other non-monetary relief in the event of a breach of a director's or
officer's fiduciary duty. In addition, these provisions apply only to claims
against a director or officer arising out of his role as a director or officer
and do not relieve a director or officer from liability if he engaged in willful
misconduct or a knowing violation of the criminal law or any federal or state
securities law.

In addition, the Articles provide for the indemnification of both directors
and officers for expenses incurred by them in connection with the defense or
settlement of claims asserted against them in their capacities as directors and
officers. In certain cases, this right of indemnification extends to judgments
or penalties assessed against them. To date, the Company has not limited its
exposure to liability for indemnification of directors and officers by
purchasing directors and officers liability insurance coverage.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

TRANSFER AGENT AND REGISTRAR

American Stock Transfer & Trust Company will serve as transfer agent and
registrar for the Common Stock.

<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon the completion of this offering, the Company will have issued and
outstanding 4,129,933 shares of Common Stock. Of these shares, the 1,700,000
shares sold in this offering will be freely tradable without restriction under
the Securities Act, unless such shares are held by "affiliates" of the Company,
as that term is defined in Rule 144 under the Securities Act. The remaining
2,429,933 shares of Common Stock outstanding upon completion of this offering
will be "restricted securities" as that term is defined in Rule 144 ("Restricted
Shares"). Restricted Shares may be sold in the public market only if registered
or if the sale transaction qualifies for an exemption from registration, such as
that provided by Rule 144 under the Securities Act, which is summarized below.
Sales of Restricted Shares in the public market, or the availability of such
shares for sale, could adversely affect the market price of the Common Stock.

All officers, directors, and current shareholders of the Company have
entered into contractual "lock-up" agreements providing that they will not
offer, sell, contract to sell or grant any option to purchase or otherwise
dispose of the shares of Common Stock, any options or warrants to acquire shares
of Common Stock or any securities exercisable for or convertible into the
Company's Common Stock owned by them or acquired in the offering for a period of
180 days from the date of this Prospectus, without the prior written consent of
the Underwriters. As a result of these contractual restrictions, notwithstanding
possible earlier eligibility for sale under the provisions of Rule 144, shares
subject to lock-up agreements will not be saleable until such agreements expire
or are waived by the Underwriters. All of the Restricted Shares will be
available for sale in the public market 180 days after the date of this
Prospectus.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least two years (including the holding period of any prior owner except an
affiliate) would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of (i) one percent of the then
outstanding shares of Common Stock or (ii) the average weekly trading volume of
the Common Stock during the four calendar weeks preceding the filing of a Form
144 with respect to such sale. Sales under Rule 144 are also subject to certain
manner of sale provisions and notice requirements and to the availability of
current public information about the Company. Under Rule 144(k), a person who is
not deemed to have been an affiliate of the Company at any time during the 90
days preceding a sale, and who has beneficially owned the shares proposed to be
sold for at least three years (including the holding period of any prior owner
except an affiliate of the Company), is entitled to sell such shares without
complying with the manner of sale, public information, volume limitation or
notice provisions of Rule 144. Unless otherwise restricted, such "144(k) shares"
may therefore be sold immediately upon the completion of this offering.

Prior to the offering, there has been no public market for the Common Stock
of the Company and no predictions can be made as to the effect, if any, that
future sales of shares of Common Stock will have on the market price of the
Common Stock prevailing from time to time. Nevertheless, sales of significant
numbers of shares of the Common Stock in the public market could adversely
affect the market price of the Common Stock and could impair the Company's
future ability to raise capital through an offering of its equity securities.

<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in the Underwriting
Agreement, the underwriters named below (the "Underwriters"), for whom Davenport
& Co. of Virginia, Inc. and Scott & Stringfellow, Inc. are acting as
representatives (the "Representatives"), have severally agreed to purchase from
the Company, and the Company has agreed to sell to the Underwriters named below,
the respective number of Shares set forth opposite each Underwriter's name
below:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
<S> <C>
Davenport & Co. of Virginia, Inc. ..........................................................................
Scott & Stringfellow, Inc. .................................................................................

Total................................................................................................ 1,700,000
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to purchase and pay for all the
Shares if any are purchased.

The Underwriters propose to offer 1,530,000 Shares directly to the public
at the public offering price set forth on the cover page of this Prospectus and
to certain securities dealers at such price less a concession not in excess of
$ per share. The Underwriters may allow, and such selected dealers may
reallow, a concession not in excess of $ per share to certain brokers and
dealers. After the offering, the price to public, concession, allowance and
reallowance may be changed by the Representatives. In addition, the Underwriters
have agreed with the Company to reserve not more than 170,000 Shares,
representing 10% of the total offering, for sale to existing shareholders of the
Company at an underwriting discount of 3.0%, as compared to an underwriting
discount of 7.5% on the remainder of the Shares sold to the public.

The Company has granted to the Underwriters an option, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to 255,000
additional Shares to cover over-allotments, if any, at the same price per share
as the initial shares to be purchased by the Underwriters from the Company (at a
7.5% underwriting discount). To the extent the Underwriters exercise this
option, each of the Underwriters will be committed, subject to certain
conditions, to purchase such additional shares in approximately the same
proportion as set forth in the above table. The Underwriters may purchase such
shares only to cover over-allotments, if any, made in connection with this
offering.

The executive officers, directors, and all current shareholders of the
Company have agreed that they will not offer, sell, contract to sell or grant an
option to purchase or otherwise dispose of any shares of the Company's Common
Stock, options or warrants to acquire shares of Common Stock or any securities
exercisable for or convertible into Common Stock owned by them or acquired in
the offering, in the open market or otherwise, for a period of 180 days from the
date of this Prospectus,

<PAGE>
without the prior written consent of the Underwriters. The Company has agreed
not to offer, sell or issue any shares of Common Stock, options or warrants to
acquire Common Stock or securities exercisable for or convertible into shares of
Common Stock for a period of 180 days after the date of this Prospectus, without
the prior written consent of the Underwriters, except that the Company may issue
securities pursuant to the Company's stock option plans.

Prior to this offering, there has been no public trading market for the
Company's Common Stock. The Common Stock has been approved for listing on the
Nasdaq National Market; however, there can be no assurance that an active
trading market for the Company's Common Stock will develop after the offering,
or if developed, that such a market will be sustained. See "Risk Factors-No
Prior Public Market; Determination of Offering Price."

The initial public offering price for the Common Stock has been determined
by negotiations between the Company and the Representatives. Among the factors
considered in determining the initial public offering price were prevailing
market conditions, revenue and earnings of the Company, estimates of the
business potential and prospects of the Company, the present state of the
Company's business operations, an assessment of the Company's management and the
consideration of the above factors in relation to the market valuation of
certain publicly traded companies.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make in respect thereof.

LEGAL MATTERS

The validity of the Shares offered hereby will be passed upon for the
Company by Williams, Mullen, Christian & Dobbins, Richmond, Virginia. Certain
legal matters in connection with the offering will be passed upon for the
Underwriters by Hunton & Williams, Richmond, Virginia.

CHANGE OF ACCOUNTANTS

In March, 1996 the Board of Directors of the Company engaged Ernst & Young
LLP as outside auditors and notified Martin, Dolan & Holton, Ltd. that the
Company elected not to engage that firm to perform the 1995 audit. The reports
of Martin, Dolan & Holton, Ltd. on the Company's financial statements for 1994
and 1993 contained no disclaimers, adverse opinions, or qualifications or
modifications as to uncertainty, audit scope or accounting principles. During
the period of those audits and through the Company's decision in March, 1996 to
change auditors, there were no disagreements between the Company and Martin,
Dolan & Holton, Ltd.

EXPERTS

The financial statements of Open Plan Systems, Inc. at December 31, 1995,
and for the year then ended, appearing in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, and at
December 31, 1994, and for each of the two years in the period ended December
31, 1994, by Martin, Dolan & Holton, Ltd., independent auditors, as set forth in
their respective reports thereon appearing elsewhere herein, and are included in
reliance upon such reports given upon the authority of such firms as experts in
accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the United States Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Shares offered hereby. For further information with respect to
the Company and the Shares offered by this Prospectus, reference is made to the
Registration Statement and the exhibits filed as a part thereof. The
Registration Statement, including exhibits, may be inspected without charge at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 5th Street, N.W., Washington, D.C. 20549, and at its regional offices
located at CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of all or part of the Registration Statement may be obtained from the
Commission's principal office in Washington, D.C. upon payment of the prescribed
fees. Statements contained in this Prospectus as to the contents of any contract
or other document

<PAGE>
referred to are not necessarily complete, and in each instance reference is made
to the copy of the contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.

Prior to this offering, the Company has not been subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and accordingly has not filed reports and other
information pursuant thereto with the Commission. As a result of the offering,
however, the Company will become subject to the informational requirements of
the Exchange Act and will furnish the reports and other information required
thereby to the Commission. The Company also will furnish annual reports to its
shareholders containing audited financial statements of the Company, as well as
quarterly reports containing unaudited financial information.

40
<PAGE>

OPEN PLAN SYSTEMS, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Reports of Independent Auditors........................................................................................ F-2
Balance Sheets at December 31, 1994 and 1995 and March 31, 1996 (unaudited)............................................ F-4
Statements of Income for the Years Ended December 31, 1993, 1994 and 1995
and for the Three Month Periods Ended March 31, 1995 and 1996 (unaudited)............................................ F-5
Statement of Stockholders' Equity for the Years Ended December 31, 1993, 1994 and 1995
and for the Three Month Period Ended March 31, 1996 (unaudited)...................................................... F-6
Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995
and for the Three Month Periods Ended March 31, 1995 and 1996 (unaudited)............................................ F-7
Notes to Financial Statements.......................................................................................... F-8
</TABLE>

F-1

<PAGE>
REPORT OF INDEPENDENT AUDITORS

BOARD OF DIRECTORS AND STOCKHOLDERS
OPEN PLAN SYSTEMS, INC.

We have audited the accompanying balance sheet of Open Plan Systems, Inc.
as of December 31, 1995 and the related statements of income, stockholders'
equity, and cash flows for the year then ended. 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 audit. The financial
statements of Open Plan Systems, Inc. as of December 31, 1994 and for each of
the two years then ended were audited by other auditors whose report dated March
27, 1995 expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis for our opinion.

In our opinion, the 1995 financial statements referred to above present
fairly, in all material respects, the financial position of Open Plan Systems,
Inc. at December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

/s/ ERNST & YOUNG LLP

Richmond, Virginia
March 27, 1996

F-2

<PAGE>
REPORT OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS
OPEN PLAN SYSTEMS, INC.
Richmond, Virginia

We have audited the accompanying balance sheet of Open Plan Systems, Inc.
as of December 31, 1994, and the related statements of income, stockholders'
equity and cash flows for each of the two years in the period then ended. These
financial statements are the responsibility of the management of Open Plan
Systems, Inc. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 financial position of Open Plan Systems, Inc. as
of December 31, 1994, and the results of its operations and its cash flows for
each of the two years in the period then ended, in conformity with generally
accepted accounting principles.

MARTIN, DOLAN & HOLTON, LTD.

Glen Allen, Virginia
March 27, 1995

F-3

<PAGE>
OPEN PLAN SYSTEMS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
PRO FORMA
MARCH 31,
DECEMBER 31, MARCH 31, 1996
1994 1995 1996 (NOTE 9)
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash............................................................... $ 206,136 $ 241,564 $ 74,896 $ 74,896
Trade accounts receivable, less allowance of $60,000 at December
31, 1995 and $82,000 at March 31, 1996, ........................ 1,552,134 3,091,607 3,993,345 3,993,345
Inventories (Note 2)............................................... 3,141,630 4,045,144 4,337,728 4,337,728
Prepaids and other................................................. 99,217 360,345 337,542 337,542
Deferred income taxes (Note 9)..................................... - - - 48,260
TOTAL CURRENT ASSETS............................................ 4,999,117 7,738,660 8,743,511 8,791,771
PROPERTY AND EQUIPMENT:
Production and warehouse equipment................................. 294,960 595,886 651,057 651,057
Office equipment................................................... 187,460 322,924 366,886 366,886
Vehicles........................................................... 56,860 137,705 188,252 188,252
Leasehold improvements............................................. 31,134 106,146 161,186 161,186
570,414 1,162,661 1,367,381 1,367,381
Accumulated depreciation and amortization.......................... (285,294) (409,086) (458,820) (458,820)
285,120 753,575 908,561 908,561
Advances to stockholders (Note 3).................................... 395,183 377,663 20,277 20,277
Cash surrender value of life insurance............................... 47,135 89,782 120,915 120,915
Deposits and other................................................... 56,270 49,805 55,853 55,853
TOTAL ASSETS......................................................... $5,782,825 $9,009,485 $9,849,117 $9,897,377
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit (Note 4).................................. $1,342,000 $2,706,000 $4,000,000 $4,000,000
Trade accounts payable............................................. 145,625 733,997 800,166 800,166
Distributions payable (Note 9)..................................... - - - 2,943,462
Accrued compensation and related costs............................. 19,234 355,843 207,008 207,008
Other accrued liabilities.......................................... 41,671 45,825 41,137 41,137
Customer deposits.................................................. 463,133 336,634 247,353 247,353
Current portion of long-term debt (Note 4)......................... 56,000 164,333 156,000 156,000
Current portion of capital lease obligations (Note 6).............. - 18,333 18,746 18,746
Current portion of deferred rent................................... 36,492 17,598 8,319 8,319
TOTAL CURRENT LIABILITIES....................................... 2,104,155 4,378,563 5,478,729 8,422,191
LONG-TERM DEBT, less current portion (Note 4)........................ 112,540 248,207 209,207 209,207
CAPITAL LEASE OBLIGATIONS, less current portion (Note 6)............. - 55,526 50,680 50,680
DEFERRED RENT, less current portion.................................. 18,774 - - -
TOTAL LIABILITIES............................................... 2,235,469 4,682,296 5,738,616 8,682,078
STOCKHOLDERS' EQUITY (Note 5, 10):
Common stock, no par value:
Authorized shares-5,000,000
Issued and outstanding shares-2,457,000 at December 31, 1994;
2,429,933 at December 31, 1995; and 2,429,933
at March 31, 1996............................................. 1,286,000 1,215,299 1,215,299 1,215,299
Retained earnings.................................................. 2,261,356 3,111,890 2,895,202 -
TOTAL STOCKHOLDERS' EQUITY...................................... 3,547,356 4,327,189 4,110,501 1,215,299
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...................... $5,782,825 $9,009,485 $9,849,117 $9,897,377
</TABLE>

See accompanying notes.

F-4

<PAGE>
OPEN PLAN SYSTEMS, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
NET SALES............................................ $7,842,749 $12,217,571 $15,478,116 $4,574,325 $5,580,049
COST OF SALES........................................ 5,440,906 8,014,563 10,434,610 3,083,851 3,595,097
GROSS PROFIT......................................... 2,401,843 4,203,008 5,043,506 1,490,474 1,984,952
OPERATING EXPENSES:
Selling and marketing.............................. 767,998 1,489,873 2,056,653 498,149 680,351
General and administrative......................... 733,066 909,408 974,892 254,398 341,989
1,501,064 2,399,281 3,031,545 752,547 1,022,340
OPERATING INCOME..................................... 900,779 1,803,727 2,011,961 737,927 962,612
OTHER (INCOME) EXPENSE:
Interest........................................... 50,251 104,862 163,450 29,852 63,456
Other, net......................................... (18,801) 11,530 (36,497) (6,198) (15,161)
31,450 116,392 126,953 23,654 48,295
NET INCOME........................................... $ 869,329 $ 1,687,335 $ 1,885,008 $ 714,273 $ 914,317
PRO FORMA INCOME DATA (UNAUDITED) (NOTE 9):
Pro forma income before income taxes............... $ 869,329 $ 1,687,335 $ 1,885,008 $ 714,273 $ 914,317
Pro forma provision for income taxes............... 343,733 673,183 746,430 282,839 356,584
Pro forma net income............................... $ 525,596 $ 1,014,152 $ 1,138,578 $ 431,434 $ 557,733
Pro forma earnings per common share (Note 9)....... $ 0.19 0.37 0.42 0.16 0.21
Weighted average common shares outstanding (Note
9).............................................. 2,700,615 2,745,615 2,734,635 2,745,615 2,718,548
</TABLE>

See accompanying notes.

F-5

<PAGE>
OPEN PLAN SYSTEMS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON RETAINED
STOCK EARNINGS TOTAL
<S> <C> <C> <C>
BALANCE AT DECEMBER 31, 1992........................................................ $ 875,000 $ 477,193 $1,352,193
Issuance of 62,000 shares of common stock for cash.................................. 186,000 - 186,000
Cash distributions to stockholders.................................................. - (303,100) (303,100)
Net income.......................................................................... - 869,329 869,329
BALANCE AT DECEMBER 31, 1993........................................................ 1,061,000 1,043,422 2,104,422
Issuance of 45,000 shares of common stock for cash.................................. 225,000 - 225,000
Cash distributions to stockholders.................................................. - (469,401) (469,401)
Net income.......................................................................... - 1,687,335 1,687,335
BALANCE AT DECEMBER 31, 1994........................................................ 1,286,000 2,261,356 3,547,356
Purchase of 27,067 shares of common stock........................................... (70,701) (86,701) (157,402)
Distributions to stockholders:
Cash.............................................................................. - (791,477) (791,477)
Offset against advances to stockholders........................................... - (156,296) (156,296)
Net income.......................................................................... - 1,885,008 1,885,008
BALANCE AT DECEMBER 31, 1995........................................................ 1,215,299 3,111,890 4,327,189
Distributions to stockholders (unaudited):
Cash.............................................................................. - (723,436) (723,436)
Offset against advances to stockholders........................................... - (407,569) (407,569)
Net income (unaudited).............................................................. - 914,317 914,317
BALANCE AT MARCH 31, 1996 (unaudited)............................................... $1,215,299 $2,895,202 $4,110,501
</TABLE>

See accompanying notes.

F-6

<PAGE>
OPEN PLAN SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
OPERATING ACTIVITIES
Net income......................................... $ 869,329 $ 1,687,335 $ 1,885,008 $ 714,273 $ 914,317
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Provision for losses on receivables........... 156,811 14,392 64,919 8,412 22,572
Depreciation and amortization................. 88,040 128,444 134,023 26,472 49,734
Deferred rent................................. 36,566 (49,716) (37,668) (9,418) (9,279)
Loss on disposition of equipment.............. - 2,635 3,115 - -
Increase in cash surrender value of life
insurance.................................. (15,653) (28,823) (42,647) (10,662) (31,133)
Changes in operating assets and liabilities:
Trade accounts receivable.................. (1,051,166) (230,706) (1,604,392) (1,242,266) (924,310)
Inventories................................ (594,712) (1,242,193) (903,514) 185,220 (292,584)
Prepaids and other......................... (58,079) (60,296) (289,703) (26,000) 31,103
Trade accounts payable..................... 218,680 (301,909) 588,372 1,256,351 66,169
Customer deposits.......................... (49,846) 404,248 (126,499) (269,819) (89,281)
Accrued and other liabilities.............. 66,234 (37,965) 340,763 124,739 (153,523)
Net cash provided (used) by operating activities... (333,796) 285,446 11,777 757,302 (416,215)
INVESTING ACTIVITIES
Purchases of property and equipment................ (237,809) (99,710) (525,360) (53,308) (204,720)
Proceeds from sale of property and equipment....... - 450 700 - -
Other.............................................. (29,848) (783) 6,465 572 (6,048)
Net cash used in investing activities.............. (267,657) (100,043) (518,195) (52,736) (210,768)
FINANCING ACTIVITIES
Advances to stockholders........................... (246,020) (320,993) (322,701) (70,525) (120,485)
Repayment of advances to stockholders.............. 92,352 171,620 200,000 - 62,002
Net borrowings on revolving line of credit......... 668,000 481,000 1,364,000 (34,000) 1,294,000
Proceeds from notes payable to bank................ 268,200 - 300,000 - -
Principal payments on long-term debt and capital
lease obligations............................... (63,979) (66,993) (63,074) (14,000) (51,766)
Proceeds from sale of common stock................. 186,000 225,000 - - -
Purchase of common stock........................... - - (144,902) - -
Distributions to stockholders...................... (303,100) (469,401) (791,477) (791,477) (723,436)
Net cash provided by financing activities.......... 601,453 20,233 541,846 (910,002) 460,315
INCREASE IN CASH..................................... - 205,636 35,428 (205,436) (166,668)
CASH AT BEGINNING OF YEAR............................ 500 500 206,136 206,136 241,564
CASH AT END OF YEAR.................................. $ 500 $ 206,136 $ 241,564 $ 700 $ 74,896
</TABLE>

See accompanying notes.

F-7

<PAGE>
OPEN PLAN SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995
(INFORMATION PRESENTED AS OF MARCH 31, 1996 AND FOR THE THREE MONTH PERIODS
ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

1. SIGNIFICANT ACCOUNTING POLICIES

Open Plan Systems, Inc. (the Company) was incorporated in Virginia in
September 1989 and is a remanufacturer and marketer of modular office work
stations. The following is a description of the Company's more significant
accounting policies.

INVENTORIES

Inventories are stated at the lower of average cost or market.

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.

DEFERRED RENT

Rent expense for operating leases with initial rent abatement periods or
escalating rental payments is recognized on a straight-line basis over the term
of the lease.

REVENUE RECOGNITION

Revenues from product sales are recognized when the products are shipped
and title and risk of loss pass to the customer.

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 amounted to
$165,529 at December 31, 1995 and $163,449 at March 31, 1996. Advertising costs
charged to expense amounted to $39,134, $79,637, and $197,862 for the years
ended December 31, 1993, 1994, and 1995, respectively, and $37,380 and $88,431
for the three month periods ended March 31, 1995 and 1996, respectively.

INCOME TAXES

The Company has elected by consent of its stockholders to be taxed under
the provisions of Subchapter S of the Internal Revenue Code. Under these
provisions, the Company does not pay federal and state income taxes on its
corporate income. Instead the Corporation's income is included in the income of
its stockholders for federal and state income tax purposes.

USE OF ESTIMATES

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

RECLASSIFICATIONS

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

F-8

<PAGE>
OPEN PLAN SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS-CONTINUED

BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements reflect all
adjustments of a normal recurring nature which the Company considers necessary
for a fair presentation of its financial position at March 31, 1996 and results
of its operations and its cash flows for the three month periods ended March 31,
1995 and 1996. Historically, the Company's business has been significantly
affected by seasonal factors. The Company typically has greater sales revenue
during the first and fourth quarters. The results for the three month period
ended March 31, 1996 are not necessarily indicative of the results that may be
achieved for the entire year ending December 31, 1996 or for any other interim
period.

LONG-LIVED ASSETS

In March 1995, the Financial Accounting Standards Board issued Statement
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF, which requires impairment losses be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement 121 in the first quarter of 1996, and such adoption
had no effect on the financial statements.

2. INVENTORIES

Inventories are in two main stages of completion and consisted of the
following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1995 1996
<S> <C> <C> <C>
(UNAUDITED)
Components and fabric $1,796,229 $2,103,176 2,460,809
Jobs in process and finished goods 1,345,401 1,941,968 1,876,919
$3,141,630 $4,045,144 $4,337,728
</TABLE>

3. ADVANCES TO STOCKHOLDERS

From time to time the Company has advanced funds to certain stockholders.
Most of the advances were made to enable payment by stockholders of estimated
quarterly income taxes. In one instance, $200,000 was advanced to the Company's
president to enable the purchase of certain real estate. These advances, which
are reflected in the accompanying balance sheets net of repayments from the
stockholders, are not subject to any contractual repayment terms. At December
31, 1995, these advances bear interest at rates ranging from 6.58% to 8.19% per
annum. Interest income recognized on these advances amounted to $9,081, $20,075,
and $28,576, for the years ended December 31, 1993, 1994, and 1995,
respectively, and $8,486 and $7,708 for the three month periods ended March 31,
1995 and 1996, respectively.

4. INDEBTEDNESS

At December 31, 1995, the Company has a revolving line of credit from a
bank providing for short-term borrowings up to $3,000,000. These borrowings bear
interest at the lesser of the prime rate or LIBOR plus 2.25% (8.19% at December
31, 1995). Advances under the line are limited to specified percentages of trade
accounts receivable and inventories. Under the terms of the agreement, the
Company is required to maintain a defined debt to net worth ratio and to limit
annual distributions to stockholders to no more than 60% of net income for the
prior year. The Company was in compliance with all covenants of the agreement at
December 31, 1995.

F-9

<PAGE>
OPEN PLAN SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS-CONTINUED

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1994 1995 1996
<S> <C> <C> <C>
(UNAUDITED)
Note payable to bank, due $8,333 per month, plus interest
at 7.75% per annum, through November 1998 $ - $ 300,000 $ 266,667

Note payable to bank, due $4,667 per month, plus interest
at 8.25% per annum, through May 1998 168,540 112,540 98,540
168,540 412,540 365,207
Less current portion 56,000 164,333 156,000
$ 112,540 $ 248,207 $ 209,207
</TABLE>

Substantially all assets are pledged as collateral for the above
indebtedness.

Future scheduled principal payments on long-term debt at December 31, 1995
were as follows: $164,333 in 1996; $156,000 in 1997; and $92,207 in 1998.

Interest paid on all indebtedness amounted to $46,398, $133,025, and
$161,448 for the years ended December 31, 1993, 1994, and 1995, respectively,
and $29,852 and $63,456 for the three month periods ended March 31, 1995 and
1996, respectively.

On March 29, 1996, the bank lender increased the maximum amount available
under the line of credit to $4,000,000 and extended the expiration date to May
31, 1996.

5. STOCKHOLDERS' EQUITY

The Company has agreements with two officers to purchase upon the death of
each all of the shares of common stock owned at the time of his death. In order
to fund its potential purchase obligations under these agreements, the Company
owns and is the beneficiary of certain life insurance policies. The purchase
price for the shares will be the fair market value of the shares on the date of
death, except that the Company's purchase obligations under the agreements is
limited to the face amounts of the policies which total $3.6 million.

The Company and its other stockholders were parties to agreements whereby
the stockholders agreed not to sell or transfer their common stock without first
offering such shares to the Company. The agreements also gave the Company the
option to purchase such shares in the event of the termination of a stockholder
who is also an employee and required the Company to purchase such shares upon
the death of a stockholder. On March 27, 1996, the stockholders agreed that
these agreements will terminate upon the closing of an initial public offering
(see Note 10). Accordingly, the carrying value of common stock has been
classified as permanent equity for all periods presented.

In August 1995, the Company retired 27,067 shares of its common stock that
it purchased from a stockholder. The amount of the original sales price,
$70,701, was deducted from common stock, while the remainder of the $157,402
purchase price was recorded as a reduction in retained earnings.

6. COMMITMENTS AND CONTINGENCIES

During 1995, the Company entered into capital lease agreements to purchase
two trucks with an aggregate cost of $80,933. The net book value of these trucks
at December 31, 1995 was $73,350. Amortization of these trucks is included in
depreciation expense. The Company leases office space and remanufacturing and
finishing facilities in Richmond and Atlanta under operating lease agreements.
The Richmond lease expires in July 1999 and provides for an option to renew for
an additional three years. The Atlanta lease expires in April 1999. In addition,
the Company leases five sales offices under operating lease agreements expiring
in various periods through October 1999. Certain automobiles are also leased
under three-year operating leases.

F-10

<PAGE>
OPEN PLAN SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS-CONTINUED

Future minimum lease payments under the above leases were as follows at
December 31, 1995:

<TABLE>
<CAPTION>
YEAR CAPITAL OPERATING
<S> <C> <C>
1996 $ 25,790 $ 611,410
1997 25,790 602,369
1998 19,406 511,345
1999 13,022 268,874
2000 9,766 -
Total minimum lease payments 93,774 $1,993,998
Amounts representing interest (19,916)
Present value of total minimum lease payments $ 73,858
</TABLE>

Rent expense amounted to $354,133, $522,828, and $596,336 for the years
ended December 31, 1993, 1994, and 1995, respectively, and $153,957 and $162,602
for the three month periods ended March 31, 1995 and 1996, respectively.

The Company guarantees certain bank borrowings of five stockholders
aggregating $269,998 at December 31, 1995 and $251,984 at March 31, 1996. The
loans were made to enable the individuals to purchase shares of the Company's
common stock. These loans bear interest at the prime rate plus 1.50% and are
scheduled to be fully paid by April 1999. The 75,000 shares of common stock held
by these stockholders serve as collateral for the loans.

7. EMPLOYEE BENEFIT PLAN

In January 1995, the Company adopted 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 contributions up to six percent of compensation. The Company may
make additional contributions at its discretion. The Company recorded expense
related to the Plan of $53,322 for the year ended December 31, 1995 and $18,589
for the three month period ended March 31, 1996.

8. CONCENTRATIONS OF CREDIT RISK AND FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts receivable.

The Company markets its products and services to customers located
primarily in the mid-Atlantic and southeastern regions of the United States.
Production is primarily in response to 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 thirty days of billing.
The Company maintains an allowance for potential credit losses and losses have
historically been within management's expectations.

The carrying values of amounts classified as current assets or current
liabilities approximate fair value due to the short-term maturities of these
instruments. The carrying value of long-term debt approximates fair value as the
current rates approximate market rates.

F-11

<PAGE>
OPEN PLAN SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS-CONTINUED

9. PRO FORMA INFORMATION (UNAUDITED)

Certain pro forma financial information is presented in connection with a
planned initial public offering by the Company (see Note 10).

The accompanying unaudited pro forma balance sheet at March 31, 1996 has
been adjusted to reflect the following items:

(Bullet) the recognition of a net deferred tax asset of $48,260 which would
have been required if the Company had terminated its Subchapter S
status at March 31, 1996;

(Bullet) the payment of an expected distribution of $345,924 to the
Company's stockholders to enable them to pay federal and state
income taxes on the Company's estimated taxable income for the
three month period ended March 31, 1996; and

(Bullet) the payment of an expected distribution of $2,597,538 to the
Company's stockholders equal to the Company's undistributed
retained earnings as an S-Corporation.

The accompanying unaudited pro forma income data for the years ended
December 31, 1993, 1994, and 1995 and the three month periods ended March 31,
1995 and 1996 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
all periods presented.

Pro forma earnings per common share are based on the weighted average
common shares outstanding during each period presented increased by 288,615
shares of common stock deemed to be outstanding, which represents the
approximate number of common shares deemed sold by the Company at a price of
$9.00 per share in its planned initial public offering to fund the assumed
distribution of $2,597,538 to the Company's stockholders.

10. SUBSEQUENT EVENTS

On March 27, 1996, the Company's stockholders voted to authorize an initial
public offering of common stock. Subject to closing of this offering, the
stockholders approved the following:

(Bullet) the amendment and restatement of the articles of incorporation to
increase the authorized shares of common stock to 50,000,000 and
authorize 5,000,000 shares of preferred stock;

(Bullet) adoption of the 1996 Stock Incentive Plan providing for issuance
of up to 400,000 shares of common stock by the Company to
officers, directors, and other key employees; and

(Bullet) adoption of the 1996 Stock Option Plan for Non-Employee Directors
providing for issuance of up to 25,000 shares of common stock by
the Company.

In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION. With respect to accounting for
its stock options, as permitted under Statement 123, the Company intends to use
the intrinsic value method as prescribed by Accounting Principles Board Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. The Company will provide
disclosures in accordance with Statement 123.

F-12

<PAGE>

[PHOTOGRAPH]
The photograph depicts a woman sitting in a chair at an
office Work Station reviewing a computer-assisted design
layout for Work Stations.

[PHOTOGRAPH]
The photograph depicts two employees of the Company
engaged in laminating work surfaces for office Work Stations.

[PHOTOGRAPH]
The photograph depicts two employees of the Company securing
fabric to a panel as part of the remanufacturing process.

<PAGE>

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION WHERE, OR TO
ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary................................... 3
Risk Factors......................................... 5
The Company.......................................... 9
Use of Proceeds...................................... 9
Prior S Corporation Status........................... 10
Dividend Policy...................................... 10
Capitalization....................................... 11
Dilution............................................. 11
Selected Financial Data.............................. 12
Management's Discussion and Analysis
of Financial Condition and Results of
Operations......................................... 13
Business............................................. 18
Management........................................... 27
Description of Capital Stock......................... 34
Shares Eligible for Future Sale...................... 37
Underwriting......................................... 38
Legal Matters........................................ 39
Change of Accountants................................ 39
Experts.............................................. 39
Additional Information............................... 39
Index to Financial Statements........................ F-1
</TABLE>

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN
THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

1,700,000 SHARES

COMMON STOCK

PROSPECTUS

DAVENPORT & CO.
OF VIRGINIA, INC.

SCOTT & STRINGFELLOW, INC.

, 1996