Summary of Oral Agreement with director Jess Ravich regarding Bonus Award
In connection with the closing of the termination of the Finders Agreement between Cherokee Inc. (the
“Company”) and Mossimo Inc. dated March 2000 (the “Finders Agreement”), the Company awarded Jess
Ravich, a director of the Company, a bonus in the amount of $50,000 for his extraordinary board services. Mr.
Ravich, in his capacity as a director of the Company, closely oversaw management’s activities in connection with
the negotiation and consummation of the termination of the Finders Agreement and the previously disclosed
Termination and Settlement Agreement between the Company and Iconix Brand Group, Inc. (“Iconix”) entered
into as of April 27, 2006 (the “Termination Agreement”) in connection with Iconix’s acquisition of Mossimo. The
Board determined that given the size and the complexity of these transactions, close board oversight was
appropriate. Mr. Ravich expended significant additional time performing such oversight and, therefore, the
Company’s Board of Directors determined that additional compensation was appropriate. The payment was
approved by the disinterested members of the Company’s Board of Directors.