CLEO INC
                           MANAGEMENT INCENTIVE PLAN
                                     1996


I.       PURPOSE

                  The Cleo Inc Management Incentive Program (MIP) is a
financial reward based program designed to provide incentive to eligible
management participants to encourage accomplishment of established company and
individual performance goals.


II.      GENERAL

                  The MIP is an annual cash payment program based upon
achievement of Cleo's pre-tax (operating income) budget, and individual
performance goals (MBO's).

                  Individual participants will receive an incentive payment
annually computed as a percent of annual salary depending upon their MIP
Grouping, provided annual goals are met or exceeded (Exhibit "A").

                  The established Groups are:

                     GROUP            MAX INCENTIVE
                                     (% OF SALARY)

                      I-A                 50%
                      I-B                 45%
                      II                  30%
                      III                 20%
                      IV                  10%

III.     PLAN SPECIFICS

                  Seventy (70) percent of a participant's annual incentive
will be based upon accomplishment of the company's 1996 financial goal, a



budgeted loss from operations of $1,857,000. Thirty (30) percent of a
participant's annual incentive will be based upon accomplishment of individual
MBO's (3-5 written goals set by the participant and management), and an
overall satisfactory performance evaluation for the plan year.

                  Should the 1996 financial goal be achieved by Cleo,
participants will be eligible to receive 100% of their incentive payment in
accordance with their assigned MIP Group's limitation (i.e. Group I
participants could receive up to 45% of base annual salary if all MBO's are
accomplished and the company meets or exceeds the financial goal). No
incentive payments will be earned should Cleo
fail to attain the 1996 financial goal.


IV.      PARTICIPATION CRITERIA

         A. Eligible participants must be actively employed by Cleo at the
time incentive payments are distributed, except retirees will receive a
pro-rata share based upon full months worked in the plan year.

         B.       The plan year is January 1 through December 31.

         C.       Base pay for purposes of calculating incentive payments shall
be the eligible participants annualized salary on January 1 of the plan year.

         D.       New Hires into an eligible Group will receive a pro-rata share
of the applicable Group incentive rate if hired prior to June 1 of the plan year
(full month worked). New hires subsequent to June 1 of the plan year will not
be eligible to participate in the MIP.



         E.       Transfers from one eligible Group to another within the plan 
year will receive a pro-rata share based upon number of days worked in each 
Group during the plan year.

         F.       The MIP is separate and distinct from any annual merit 
increases granted by the company based upon regular annual individual 
performance reviews.

NOTE:   Cleo Sales Associates are not included in the MIP since a separate 
Sales Incentive Bonus program is applied to the Sales group.






March 7, 1996