BONUS ARRANGEMENTS The following bonus arrangements have been made for the named officers with respect to profits of the Company for fiscal year 1997: Regular Bonus Super Bonus(1) Mr. Adler $30,000 N/A plus 7% of any excess Mr. Montano $25,000 N/A plus 5% of any excess Mr. Mason $20,000 N/A plus 4% of any excess Ms. Drury 5% of salary 10% of salary Mr. Lefeld 5% of salary 10% of salary Mr. Galastro $5,000 plus $7,500 plus 3% of excess 4% of excess over budgeted over budgeted profit for his profit for his department department Mr. Swartz $7,500 plus $11,000 plus 3% of excess 4% of excess over budgeted over budgeted profit for his profit for his department and department and 1% of dollars 2% of excess over budgeted over budgeted profit for wholesale profit for wholesale department department (1) The `regular bonus'' and the ``super bonus'' are based on target levels for corporate profits, which vary by position. If corporate profits reach the `regular bonus'' level, the named officer will get the ``regular bonus'' indicated. If corporate profits reach the `super bonus'' level, the named officer will get only the `super bonus'' indicated, not both the "regular bonus" and the "super bonus".