SENIOR EXECUTIVE INCENTIVE PLAN
This Senior Executive Incentive Plan (the "EIP") of Designs, Inc. (the "Corporation") has been adopted and
approved by the Compensation Committee of the Board of Directors of the Corporation (the "Board") in order
to link annual cash bonus payments to senior executive officers of the Corporation to the achievement of annual
corporate performance measurements. A senior executive officer of the Corporation may be eligible to receive
cash bonus payments under the EIP provided that such officer is designated for a particular fiscal year as a
participant ("Participant") in the EIP by the Compensation Committee of the Board, or such other committee of
the Board which the Board may so designate to administer the EIP (the "Committee").
"EPS" means, on a consolidated basis, the Net Earnings (as defined below) of the Corporation for the fiscal year
divided by the number of shares of the Corporation's common stock outstanding at the end of the fiscal year.
"Net Earnings" means, on a consolidated basis, the Corporation's gross sales for the fiscal year minus the
Corporation's expenses for that fiscal year.
"RONA" means, on a consolidated basis, EBIT (as defined below) for the fiscal year divided by the Net Assets
(as defined below) of the Corporation at the end of that fiscal year.
"EBIT" means, on a consolidated basis, the Net Earnings of the Corporation for the fiscal year plus interest and
taxes for that fiscal year.
"Net Assets" means, on a consolidated basis, the Corporation's inventory (product) plus the Corporation's fixed
assets (stores, other buildings, capital equipment and the like), each determined at the end of the fiscal year.
The EIP is designed to reward Participants based on the following two (2) measures of corporate performance:
EPS and RONA. Each fiscal year, the Committee will establish an EPS corporate performance target and a
RONA corporate performance target, each of which is independent of the other