Menard, Inc. - Page 14

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          secretary.6  The officers received compensation for TYE 1998 in             
          the following amounts:                                                      
                         Officer             Compensation                             
                         Mr. Menard          $20,642,485                              
                         Mr. Prochaska       121,307                                  
                         Mr. Rasmussen       55,702                                   
                         Mr. C. Menard       172,815                                  
                    2.  Shareholders                                                  
               Since the incorporation of Menards, Mr. Menard has been the            
          controlling shareholder.  During the years at issue, Mr. Menard             
          owned all of the class A voting stock and approximately 56                  
          percent of the class B nonvoting stock.  Mr. Menard’s family                
          members and trusts named after him and his family members held              
          the remaining class B shares.7  In all, Mr. Menard owned                    
          approximately 89 percent of Menards’s voting and nonvoting stock.           
          Menards has never paid dividends to its shareholders.                       
               D.  Menards’s Employee Compensation Plan                               
                    1.  In General                                                    
               During TYE 1998, Menards provided all employees with health,           
          401(k), and instant profit-sharing (IPS)8 plans.  Other than IPS            


               6Chris Menard is Mr. Menard’s son.  In addition to his                 
          duties as secretary, Chris Menard ran Menards’s Eau Claire                  
          distribution center.                                                        
               7The record does not indicate whether Mr. Menard was a                 
          beneficiary of any shareholder trust.                                       
               8Menards implemented the IPS plan in 1966.  The amount that            
          an employee receives under the plan is a function of the                    
                                                             (continued...)           




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