Exhibit (10)(j) CALLOWAY'S NURSERY, INC. MANAGEMENT PROFIT SHARING BONUS PLAN FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997 I. PROFIT SHARING BONUS A. An annual management profit sharing bonus will be paid on the income of Calloway's Nursery, Inc. (the "Company") after payment of all expenses but before payment of state and federal income taxes ("Pre- tax Net Profit"). B. The total profit sharing bonus pool will be equal to the sum of (1) and (2) below: (1) 6% of Pre-tax Net Profit until the prior year's Pre-tax Net Profit is exceeded. If the Company's Pre-tax Net Profit exceeds 15% of net sales, then the bonus rate will be 8% of Pre-tax Net Profit until the prior fiscal year's Pre-tax Net Profit is exceeded. (2) 12% of Pre-tax Net Profit increases over the prior fiscal year's Pre-tax Net Profit. C. Example: Current Year Prior Year Sales $29,500,000 $24,000,000 Cost of goods sold 15,900,000 12,700,000 -------------------------- Gross profit 13,600,000 11,300,000 Retail payroll expenses 3,800,000 3,100,000 Retail operating expenses 2,300,000 2,100,000 Retail Rent expense 2,400,000 2,400,000 General & administrative expenses 2,200,000 2,000,000 Advertising expenses 1,200,000 1,100,000 Depreciation & amortization 400,000 450,000 Net interest expense (income) (200,000) (150,000) Store management bonuses 162,000 30,000 Product line management bonuses 53,520 10,800 -------------------------- Pre-tax Net Profit (Loss) $ 1,284,480 $ 259,200 ========================== CALLOWAY'S NURSERY, INC. MANAGEMENT PROFIT SHARING BONUS PLAN FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997 $1,025,280 increase current year over prior year. BONUS POOL CALCULATION: 6% of first year = $ 15,552 12% of increase = $123,034 Bonus Pool = $138,586 D. Management profit sharing bonuses will be awarded to each participant on the basis of a fraction multiplied by the amount of the bonus pool. The numerator of the fraction is the salary of the participant in effect on September 30, 1997 and the denominator of the fraction is the total of the annual salaries of all participants in effect on September 30, 1997. In the event a participant serves less than the full fiscal year: A participant in the Plan who does not start the year, and therefore serves less than the full fiscal year, will receive a bonus for the portion of the fiscal year the participant does serve. Therefore, a participant who starts on September 1st will receive 30/365ths of the bonus attributable to his fraction of the bonus pool. The remaining 335/365ths will be allocated to the other participants on a pro rata basis in accordance with their respective shares in the bonus pool. II. PARTICIPANTS The participants in the Plan are those who hold the following positions in the Company: President Vice President, Corporate Development Vice President, Operations Vice President, Merchandising Vice President, Chief Financial Officer CALLOWAY'S NURSERY, INC. MANAGEMENT PROFIT SHARING BONUS PLAN FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997 III. GENERAL PROVISIONS A. No bonus accrues for any reason on any amount less than "0", or break- even. For the purposes of calculating improvements over a prior year, no bonus is calculated on amounts less than break-even. B. All bonuses are payable after the end of the fiscal year and no bonus will be paid in the event of termination of employment on or prior to September 30, 1997, whether termination be voluntary or involuntary, with cause or without cause. C. For purposes of all calculations under the plan, the amounts shall be taken from the Company's audited financial statements, except, that ------ Goodwill amortization expense shall be calculated using a forty (40) year straight-line amortization based on the original amount of Goodwill "pushed-down" to the Company.