BRAINERD INTERNATIONAL INC, PRE 14A, 1995-10-18

BRAINERD INTERNATIONAL INC
PRE 14A, 1995-10-18
RACING, INCLUDING TRACK OPERATION

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant X
Filed by a Party other than the Registrant

Check the appropriate box:
X Preliminary Proxy Statement Confidential, for Use of
of the Commission Only
(as permitted by
Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

BRAINERD INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)

___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
X Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock

(2) Aggregate number of securities to which transaction applies:
677,830

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
$10,616,933 x 1/50 x 1% = $2,123.39 ($10,616,933 is the value of
The Colonel's Inc. common stock surrendered in the proposed Merger.)

(4) Proposed maximum aggregate value of transaction:
$10,616,933

(5) Total fee paid:
$2,123.39

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement.:

(3) Filing Party:

(4) Date Filed:

[BRAINERD LOGO] October 23, 1995

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of
Shareholders of Brainerd International, Inc. ("Brainerd") to be held at the
Ramada Plaza Hotel, 12201 Ridgedale Drive, Minnetonka, Minnesota 55305, on
November 21, 1995, at 9:30 a.m., local time.

The annual meeting is being held to consider and vote upon: a
proposal to adopt an Agreement and Plan of Merger between Brainerd Merger
Corporation, a wholly owned subsidiary of Brainerd, and The Colonel's, Inc.
("The Colonel's") (the "Merger"); a proposal to change the state of
incorporation of Brainerd from Minnesota to Michigan, to adopt new articles of
incorporation of Brainerd, to change Brainerd's name to The Colonel's Holdings,
Inc., and to increase the number of shares of common stock of Brainerd; a
proposal to transfer all of the operating assets of Brainerd to Brainerd
International Raceway, Inc., a wholly owned subsidiary of Brainerd; a proposal
to adopt The Colonel's Holdings, Inc; 1995 Long-Term Incentive Plan; the
election of directors; a proposal to confirm the appointment of Deloitte &
Touche LLP as the independent auditors of The Colonel's Holdings, Inc.; and to
transact such other business as may properly come before the meeting.

The Board of Directors believes that the Merger is in the best
interests of the company in that it will: diversify the investment of
Brainerd to include an interest in The Colonel's, a leading supplier of
aftermarket automotive parts in North America; benefit the financial strength
of Brainerd through affiliation with The Colonel's, which maintains a record
of adequate capital, minimal debt, profitable operations and a favorable credit
record; improve Brainerd's ability to borrow money to finance various capital
improvements at Brainerd International Raceway; and benefit Brainerd
International Raceway and the sponsors of events at the raceway through the
affiliation of Brainerd with a nationally recognized manufacturer in the
automotive industry.

THE BOARD OF DIRECTORS OF BRAINERD HAS CONCLUDED THAT THE PROPOSED
MERGER IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF BRAINERD AND RECOMMENDS
THAT BRAINERD SHAREHOLDERS VOTE "FOR" THE MERGER.

The accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement contains a detailed description of the Merger and other important
information relating to Brainerd, The Colonel's, and the combined companies.

We urge you to review the enclosed materials carefully. Whether or
not you plan to attend the meeting, please date, sign, and return your proxy
card in the enclosed envelope. If you then attend the meeting and wish to
vote your shares in person, you still may do so. Also, if you plan to attend
the meeting, please mark the appropriate box on the proxy card.

Sincerely yours,

____________________________________
Gary Moore
Chairman and Chief Executive Officer

BRAINERD INTERNATIONAL, INC.
17113 Minnetonka Boulevard, Suite 214
Minnetonka, Minnesota 55345

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Brainerd International, Inc. will be held at the Ramada Plaza Hotel, 12201
Ridgedale Drive, Minnetonka, Minnesota 55305, on November 21, 1995, at
9:30 a.m., local time for the following purposes:

1. To consider and vote upon a proposal to adopt an Agreement and
Plan of Merger between Brainerd Merger Corporation, a wholly
owned subsidiary of Brainerd, and The Colonel's, Inc.;

2. To consider and vote upon a proposal to change the state of
incorporation of Brainerd International, Inc., from Minnesota to
Michigan, adopt new Articles of Incorporation of Brainerd
International, Inc. to change the name of the corporation to The
Colonel's Holdings, Inc., and to increase the number of shares of
common stock, par value $.01 per share, of Brainerd
International, Inc. which Brainerd International, Inc. is
authorized to issue from 10,000,000 to 35,000,000 shares;

3. To consider and vote upon a proposal to authorize the transfer of
all of the operating assets of Brainerd International, Inc. to
Brainerd International Raceway, Inc., a wholly owned subsidiary
of Brainerd International, Inc.;

4. To consider and vote upon a proposal to adopt The Colonel's
Holdings, Inc. 1995 Long-Term Incentive Plan;

5. To elect directors;

6. To consider and vote upon a proposal to confirm the appointment
of Deloitte & Touche LLP as the independent auditors of The
Colonel's Holdings, Inc., as the successor of Brainerd
International, Inc., for the year ending December 31, 1995; and

7. To transact such other business as may properly come before the
meeting.

The Board of Directors has fixed the close of business on
October 20, 1995, as the record date for the determination of share-
holders entitled to notice of and to vote at the meeting and any
adjournment thereof. A proxy may be revoked at any time prior to its
exercise by written notice delivered to the Secretary of Brainerd
International, Inc. or by attending and voting at the annual meeting.

Shareholders of Brainerd International, Inc. have the right to assert
dissenters' rights and receive payment of the fair value of their shares of
Brainerd International, Inc. common stock in the event the Agreement and
Plan of Merger is adopted, in the event that the proposal to change the
state of incorporation of Brainerd International, Inc. is approved or in
the event that the proposal to transfer all of the operating assets of
Brainerd to Brainerd International Raceway, Inc. is approved and such
transactions are consummated. The right of any shareholder to receive the
value of his or her shares through the dissent process is contingent upon
strict compliance with the procedures set forth in Section 302A.473 of the
Minnesota Business Corporation Act, a copy of which is included as
Appendix C to the accompanying Proxy Statement. All information
otherwise required to be furnished in an annual report to shareholders is
included in the accompanying Proxy Statement.

By Order of The Board of Directors,

Gary Moore
Minnetonka, Minnesota Chairman and Chief Executive Officer

October 23, 1995

YOUR VOTE IS IMPORTANT

PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES

Brainerd International, Inc.
17113 Minnetonka Boulevard, Suite 214
Minnetonka, Minnesota 55345
(612) 475-1500
______________________

PROXY STATEMENT
FOR
MEETING OF
SHAREHOLDERS OF BRAINERD INTERNATIONAL, INC.

To Be Held November 21, 1995
______________________

This Proxy Statement ("Proxy Statement") is being furnished to the
shareholders of Brainerd International, Inc., a Minnesota corporation
("Brainerd"), in connection with the solicitation of proxies by the
Board of Directors of Brainerd for use at the annual meeting of shareholders of
Brainerd to be held on November 21, 1995 and any adjournment or adjournments
thereof (the "Meeting"). At the Meeting, the shareholders of Brainerd will be
asked to consider and vote upon a proposal to adopt the Agreement and Plan of
Merger, dated as of September 25, 1995 (the "Merger Agreement"), providing,
among other things, for the merger of Brainerd Merger Corporation, a Michigan
corporation and a wholly owned subsidiary of Brainerd ("Brainerd Merger
Corporation") with and into The Colonel's, Inc. ("The Colonel's") on the terms
described in this Proxy Statement(the "Merger").

In addition, at the Meeting, shareholders of Brainerd will be asked to
consider and vote upon proposals to: (i) change the state of incorporation of
Brainerd from Minnesota to Michigan, adopt new articles of incorporation of
Brainerd to change Brainerd's name from Brainerd International, Inc. to The
Colonel's Holdings, Inc. ("The Colonel's Holdings"), increase the number of
shares of common stock, par value $.01 per share, of Brainerd ("Brainerd
Common Stock") which Brainerd is authorized to issue from 10,000,000 to
35,000,000 shares and to authorize the issuance of preferred stock having
such preferences and privileges as the Brainerd Board of Directors may deter-
mine and to effect various other changes in the structure of corporate gover-
nance for Brainerd; (ii) authorize the transfer of all of Brainerd's operating
assets to Brainerd International Raceway, Inc., a wholly owned subsidiary of
Brainerd; (iii) adopt The Colonel's Holdings, Inc. 1995 Long-Term Incentive
Plan; (iv) Incorporation of Brainerd to increase the number of authorized shares
of Brainerd Common Stock and adoption of the proposal to transfer all of
Brainerd's operating assets to Brainerd International Raceway, Inc. are elect
directors of Brainerd; and (v) confirm the appointment of Deloitte & Touche LLP
as the independent auditors of Brainerd for the year ending December 31, 1995.
Adoption of the proposal to restate the Articles of conditions to the obliga-
tions of Brainerd to consummate the Merger. See "THE MERGER AGREEMENT -
Conditions to the Merger."

This Proxy Statement and the accompanying form of proxy are first being
mailed to shareholders of Brainerd on October 23, 1995. A shareholder who has
given a proxy may revoke it at any time prior to its exercise. See
"INTRODUCTION--Voting and Proxies."

Brainerd will issue a maximum of 23,500,000 shares of Brainerd Common
Stock in connection with the Merger. Upon the Merger becoming effective, each
share of common stock, par value $0.10 per share, of The Colonel's
("The Colonel's Common Stock") then outstanding will be converted into and rep-
resent the right to receive approximately 3.903 shares of Brainerd Common Stock.

The information contained herein with respect to Brainerd has been provided
by Brainerd and any information contained herein with respect to The Colonel's
has been provided by The Colonel's.

______________________

IN DETERMINING HOW TO VOTE ON THE PROPOSALS AND WHETHER TO ASSERT DISSENTERS'
RIGHTS, SHAREHOLDERS SHOULD CAREFULLY CONSIDER THE FACTORS SET FORTH UNDER THE
HEADING "RISK FACTORS". NEITHER THE PROPOSED MERGER NOR THE SECURITIES OFFERED
IN CONNECTION WITH THE PROPOSED MERGER HAVE BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF THE PROPOSED MERGER NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATION NOT CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

______________________

This Proxy Statement is dated October 23, 1995.

ii
AVAILABLE INFORMATION

Brainerd is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy and information statements and
other information with the Securities and Exchange Commission (the
"Commission"). These materials can be inspected and copied at the public
reference facilities of the Commission (Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549), and at the Commission's Regional Offices in New
York (7 World Trade Center, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661). Copies of such material can also be obtained from the
Public Reference Section of the Commission at prescribed rates. Brainerd
Common Stock is traded on the National Association of Securities Dealers
Automated Quotation System. Reports, proxy and information statements and
other information concerning Brainerd can be inspected at the offices of
the National Association of Securities Dealers, Inc. located at 1735 K.
Street, N.W., Washington, D.C. 20006.

THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM RICHARD L. ROE, VICE PRESIDENT, BRAINERD INTERNATIONAL, INC.,
17113 MINNETONKA BOULEVARD, SUITE 214, MINNETONKA, MINNESOTA 55345, TELEPHONE
NUMBER (612) 475-1500. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY NOVEMBER 13, 1995.

Brainerd undertakes to provide without charge to each person, including
any beneficial owner, to whom a Proxy Statement is delivered, upon written or
oral request, a copy of any and all information that has been incorporated by
reference in the Proxy Statement(not including exhibits to the information that
is incorporated by reference unless such exhibits are specifically incorporated
by reference into the information that the Proxy Statement incorporates). Such
information is available upon request from Richard L. Roe, Vice President,
Brainerd International, Inc. at the address and telephone number stated above.

iii

TABLE OF CONTENTS

Page

AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . .iii

SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
The Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Conditions to the Merger. . . . . . . . . . . . . . . . . . . . . . .3
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . .4
Accounting and Tax Treatment. . . . . . . . . . . . . . . . . . . . .5
Reasons for and Effects of the Merger, Recommendations. . . . . . . .5
Opinion of Financial Adviser. . . . . . . . . . . . . . . . . . . . .6
Basis and Methodology of Determining Exchange Ratio . . . . . . . . .7
Interest of Certain Persons in the Merger . . . . . . . . . . . . . .7
Sale of Brainerd Stock by Mr. Williamson. . . . . . . . . . . . . . .8
Operation of Brainerd and The Colonel's after the Merger. . . . . . .9
Affiliated Transactions Involving Brainerd and The Colonel's. . . . .9
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . 10
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Possible Detriments of The Merger . . . . . . . . . . . . . . . . . 12
Regulatory Requirements . . . . . . . . . . . . . . . . . . . . . . 12
Comparisons of Income, Dividends and Book Value Per Share . . . . . 12

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Matters to be Considered at the Shareholder Meetings. . . . . . . . 14
Voting and Proxies. . . . . . . . . . . . . . . . . . . . . . . . . 15

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Risks Associated with Brainerd's Existing Operations. . . . . . . . 17
Risks Associated with the Acquisition of The Colonel's. . . . . . . 19

PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT . . . . . . . . . . . . . 22
Background of the Merger. . . . . . . . . . . . . . . . . . . . . . 22
Brainerd's Reasons for the Merger . . . . . . . . . . . . . . . . . 23
Opinion of Brainerd's Financial Adviser . . . . . . . . . . . . . . 24
Financial Adviser Analysis. . . . . . . . . . . . . . . . . . . . . 25
Valuation Techniques Used by Financial Adviser . . . . . . . . . . 27
The Colonel's Reasons for the Merger. . . . . . . . . . . . . . . . 30
Basis and Methodology of Determining Exchange Ratio . . . . . . . . 31
Stock Purchase Agreement Between Mr. Williamson and Mr. Mott. . . . 34
Background Concerning Charles Mott . . . . . . . . . . . . . . . . 35
Shareholder Vote Required to Approve the Proposal . . . . . . . . . 35
Material Federal Income Tax Consequences. . . . . . . . . . . . . . 35

THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 37
The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
The Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . 37
Exchange of Stock Certificates. . . . . . . . . . . . . . . . . . . 37
Conditions to the Merger; Waiver and Amendment. . . . . . . . . . . 38
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Conduct of Business Prior to the Merger . . . . . . . . . . . . . . 39
Accounting and Tax Treatment. . . . . . . . . . . . . . . . . . . . 39
Resales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

RIGHTS OF DISSENTING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . 40
Procedure to Preserve Dissenters' Rights. . . . . . . . . . . . . . 40
Procedures Following an Assertion of Dissenters' Rights . . . . . . 40

SELECTED FINANCIAL DATA OF BRAINERD. . . . . . . . . . . . . . . . . . . 44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BRAINERD. . . . . . . . 45
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . 47
Projected Future Financial Condition and Operations . . . . . . . . 48
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 49
Six Month Information . . . . . . . . . . . . . . . . . . . . . . . 50

BUSINESS OF BRAINERD . . . . . . . . . . . . . . . . . . . . . . . . . . 52
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
General Operations. . . . . . . . . . . . . . . . . . . . . . . . . 53
Sources of Revenue. . . . . . . . . . . . . . . . . . . . . . . . . 53
Events and Activities . . . . . . . . . . . . . . . . . . . . . . . 55
Sanctioning Organizations . . . . . . . . . . . . . . . . . . . . . 58
Promotion and Ticket Sales. . . . . . . . . . . . . . . . . . . . . 58
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Seasonal Business/Weather . . . . . . . . . . . . . . . . . . . . . 59
Government Regulations. . . . . . . . . . . . . . . . . . . . . . . 60
Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . 60
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Attempted Development of Genoa City Racing Facility . . . . . . . . 60
Change in Control and Possible Acquisition of The Colonel's, Inc. . 62
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 64

SELECTED FINANCIAL DATA OF THE COLONEL'S . . . . . . . . . . . . . . . . 64

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE COLONEL'S . . . . . 66
Background of The Colonel's . . . . . . . . . . . . . . . . . . . . 66
Major Fire Loss and Insurance Claim . . . . . . . . . . . . . . . . 67
Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . 69

Outstanding Loans . . . . . . . . . . . . . . . . . . . . . . . . . 71
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 72
Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 74
Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . 75
Six Month Information . . . . . . . . . . . . . . . . . . . . . . . 75

BUSINESS OF THE COLONEL'S. . . . . . . . . . . . . . . . . . . . . . . . 77
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Distribution and Sales. . . . . . . . . . . . . . . . . . . . . . . 81
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Plant Fire and Insurance Settlement; Properties . . . . . . . . . . 84
Possible Industrial Design Claims and Litigation. . . . . . . . . . 85
Possible Federal Industrial Design Legislation. . . . . . . . . . . 85
Foreign Industrial Design Protection Laws . . . . . . . . . . . . . 86
Possible Addition of Industrial Design Provisions to General
Agreement on Tariffs and Trade . . .. . . . . . . . . . . . . . . . 86
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 87
Environmental Remediation . . . . . . . . . . . . . . . . . . . . . 89

UNAUDITED PRO FORMA COMBINED SELECTED
FINANCIAL DATA AND CONDENSED FINANCIAL INFORMATION . . . . . . . . . . . 90
Brainerd and The Colonel's Pro Forma Combined Selected Financial
Data (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . 90
Brainerd and The Colonel's Pro Forma Condensed Combined Balance
Sheet (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 91
Brainerd and The Colonel's Pro Forma Condensed Combined Statement
of Income (Unaudited). .. . . . . . . . . . . . . . . . . . . . . . 93

DESCRIPTION OF CAPITAL STOCK OF BRAINERD . . . . . . . . . . . . . . . . 95
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Transfer Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Reports to Shareholders . . . . . . . . . . . . . . . . . . . . . . 96

MARKET PRICES AND RELATED MATTERS. . . . . . . . . . . . . . . . . . . . 96
Brainerd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
The Colonel's . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

MANAGEMENT AND PRINCIPAL SHAREHOLDERS. . . . . . . . . . . . . . . . . . 97
Principal Shareholders of Brainerd. . . . . . . . . . . . . . . . . 97
Principal Shareholders of The Colonel's . . . . . . . . . . . . . . 97
Management of Brainerd. . . . . . . . . . . . . . . . . . . . . . . 99
Management of The Colonel's . . . . . . . . . . . . . . . . . . . . 99

CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Interests of Mr. Williamson . . . . . . . . . . . . . . . . . . . . 99
Related Party Transactions Involving The Colonel's. . . . . . . . .100

PROPOSAL II: REINCORPORATION OF BRAINERD. . . . . . . . . . . . . . . .101
Principal Features of Reincorporation . . . . . . . . . . . . . . .101
Principal Reasons for Changing Brainerd's State of Incorporation. .103
Possible Negative Considerations. . . . . . . . . . . . . . . . . .105
Comparison of Governing Instruments of The Colonel's Holdings and
Brainerd and Corporation Laws of Minnesota and Michigan . . . . . .106
Changes in Capitalization . . . . . . . . . . . . . . . . . . . . .129
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . .130
Material Federal Tax Consequences . . . . . . . . . . . . . . . . .130
Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .131
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . .131
Shareholder Vote Required to Approve the Proposal . . . . . . . . .131

PROPOSAL III: TRANSFER OF BRAINERD INTERNATIONAL RACEWAY TO
A WHOLLY OWNED SUBSIDIARY OF BRAINERD. . . . . . . . . . . . . . . . . .132
Transfer of Raceway Assets and Obligations. . . . . . . . . . . . .132
Reasons for Transfer of Raceway Assets and Obligations. . . . . . .132
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . .133
Material Federal Tax Consequences . . . . . . . . . . . . . . . . .133
Shareholder Vote Required to Approve the Proposal . . . . . . . . .134

PROPOSAL IV: APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN. . . . . . .134

NEW PLAN BENEFITS
1995 LONG-TERM INCENTIVE PLAN. . . . . . . . . . . . . . . . . . . . . .138
Shareholder Vote Required to Approve the Proposal . . . . . . . . .142

PROPOSAL V: ELECTION OF DIRECTORS OF BRAINERD . . . . . . . . . . . . .143
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Shareholder Vote Required to Elect Directors. . . . . . . . . . . .143
Voting Securities and Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . . . . . . .144
Directors and Executive Officers. . . . . . . . . . . . . . . . . .145
Organization of the Board . . . . . . . . . . . . . . . . . . . . .146
Director Compensation . . . . . . . . . . . . . . . . . . . . . . .147
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . .147
Compensation Pursuant to Plans. . . . . . . . . . . . . . . . . . .147
Certain Relationships and Related Transactions. . . . . . . . . . .148
Compliance with Section 16(a) of the Exchange Act . . . . . . . . .149

PROPOSAL VI: CONFIRMATION OF APPOINTMENT OF AUDITORS. . . . . . . . . .150
Shareholder Vote Required for Confirmation of Auditors. . . . . . .150

LEGAL OPINION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151

vii

SHAREHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . .151

OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151

Appendix A - Agreement and Plan of Merger
Appendix B - Fairness Opinion of Century Capital
Appendix C - Dissenters' Rights Provisions of Minnesota Business
Corporation Act
Appendix D - Agreement and Plan of Reorganization
Appendix E - Articles of Incorporation of The Colonel's Holdings, Inc.
Appendix F - Bylaws of The Colonel's Holdings, Inc.
Appendix G - 1995 Long-Term Incentive Plan

viii

SUMMARY

The following summary is intended only to highlight certain information
contained in this Proxy Statement. Reference is made to, and this summary
is qualified in its entirety by, the more detailed information contained
elsewhere in this Proxy Statement. Shareholders should carefully consider
the factors set forth in "RISK FACTORS."

The Companies

Brainerd . . . . . . . . . . . Brainerd owns and operates the Brainerd
International Raceway, a motor vehicle
racing facility located six miles
northwest of Brainerd, Minnesota, on a
site approximating 500 acres.
Brainerd's business is highly seasonal
with a substantial portion of its
revenues occurring in the third quarter
of each calendar year. See "BUSINESS
OF BRAINERD."

The Colonel's. . . . . . . . . The Colonel's is a leading supplier of
plastic replacement bumpers and facias
for the automotive aftermarket industry
in North America. The Colonel's
designs, manufacturers and markets
bumpers, facias, support beams and
brackets for application as replacement
collision parts for automobiles. See
"BUSINESS OF THE COLONEL'S."

The Meeting

Date, Time, and Place
of the Meeting . . . . . . . Brainerd. November 21, 1995 at 9:30 a.m.
(local time) at the Ramada Plaza Hotel,
12201 Ridgedale Drive, Minnetonka,
Minnesota 55305.

Matters to be considered . . . At the Meeting, shareholders will be
asked to consider and act upon
proposals to: (i) adopt the Merger
Agreement; (ii) change the state of
incorporation of Brainerd from
Minnesota to Michigan and adopt new
articles of incorporation of Brainerd to
change Brainerd's name from Brainerd
International, Inc. to The Colonel's

1
Holdings, Inc. ("The Colonel's Holdings"),
increase the number of shares of common
stock, par value $.01 per share, of
Brainerd ("Brainerd Common Stock") which
Brainerd is authorized to issue from
10,000,000 to 35,000,000 shares, to
authorize the issuance of up to 5,000,000
shares of preferred stock having such
preferences, and privileges as the
Brainerd Board of Directors may determine
and to effect various other changes in
the structure of corporate governance for
Brainerd; (iii) authorize Brainerd to
transfer all of its operating assets to
Brainerd International Raceway, Inc., a
wholly owned subsidiary of Brainerd;
(iv) adopt The Colonel's Holdings, Inc.
1995 Long-Term Incentive Plan; (v) elect
directors, and (vi) confirm the appoint-
ment of Deloitte & Touche LLP as the
independent auditors of Brainerd for the
fiscal year ending December 31, 1995.

Record Date . . . . . . . . . . Only shareholders of record of Brainerd
Common Stock at the close of business
on October 20, 1995 will be entitled
to notice of and to vote at the Meeting.
As of September 27,1995, there were
242 shareholders of record with 677,830
shares outstanding and entitled to vote.

Required Vote . . . . . . . . The affirmative vote of the holders
of a majority of the shares of Brainerd
stock present and entitled to vote is
required to adopt the Merger Agreement,
authorize the transfer of Brainerd's
operating assets to Brainerd
International Raceway, Inc., adopt The
Colonel's Holdings, Inc. 1995 Long-Term
Incentive Plan, elect directors, and
confirm the appointment of auditors. The
affirmative vote of the holders of a
majority of the shares of Brainerd stock
entitled to vote is required to change the
state of incorporation of Brainerd, to
adopt new articles of incorporation to
change the name of the corporation to The
Colonel's Holdings, Inc. and to increase
the number of authorized shares of

2
Brainerd Common Stock from 10,000,000 to
35,000,000. Donald J. Williamson is a
former executive officer and director
of Brainerd and owned approximately
9.9% of the Brainerd Common Stock
outstanding as of the record date.
Mr. Williamson together with the executive
officers and directors of Brainerd and
their affiliates own approximately 10.2%
of the Brainerd Common Stock outstanding
as of the record date and intend to vote
their shares in favor of all proposals set
forth for shareholder approval in this
Proxy Statement. See "INTRODUCTION -
Voting and Proxies."

The Merger

Effective Time. . . . . . . . The Merger will become effective upon the
filing of a certificate of merger with the
Secretary of State of Michigan. The filing
is expected to occur as promptly as
practicable following the adoption of the
Merger Agreement by shareholders of The
Colonel's and Brainerd, and the
satisfaction or waiver, where permissible,
of the other conditions to the consummation
of the Merger. The date and time at which
the Merger becomes effective is referred
to herein as the "Effective Time."

The Merger. . . . . . . . . . Pursuant to the Merger Agreement:
(i) Brainerd Merger Corporation will be
merged with and into The Colonel's;
(ii) The Colonel's will become a wholly
owned subsidiary of Brainerd; and
(iii) shares of The Colonel's Common Stock
outstanding at the Effective Time will be
converted into and represent the right to
receive 23,500,000 shares of Brainerd
Common Stock. See "THE MERGER AGREEMENT."

Conditions to the Merger

Waiver and Amendment. . . . . Consummation of the Merger is subject to
the satisfaction of a number of conditions
set forth in the Merger Agreement. The
Merger Agreement provides that the parties
may amend the Merger Agreement before or

3
after its approval by the shareholders of
Brainerd and The Colonel's, but, after
shareholder approval, no amendment may be
made that changes the consideration payable
to holders of The Colonel's Common Stock.
Any condition to the Merger that legally
may be waived, may be waived at any time by
the party or parties entitled to the
benefit thereof. See "THE MERGER
AGREEMENT - Conditions to the Merger."

Termination, Material . . . . The Merger Agreement will be terminated if
Amendments not adopted by the shareholders of
Brainerd and The Colonel's and may be
terminated prior to the Effective Time or
before or after approval by the
shareholders of Brainerd and The
Colonel's by: (i) mutual agreement of
the Boards of Directors of Brainerd and
The Colonel's; (ii) either Brainerd or
The Colonel's if the Merger has
not been effected on or prior to
December 30, 1995; and (iii) either
Brainerd or The Colonel's if there has been
a material misrepresentation or a material
breach in the representations, warranties
or covenants of the other party. See "THE
MERGER AGREEMENT - Termination."

If any material amendments to the terms of
the Merger Agreement are proposed following
the time that the Merger is approved by
Brainerd shareholders, Brainerd will advise
Brainerd shareholders of the amendments and
will resolicit Brainerd shareholders for
approval of the Merger upon the revised
terms.

Federal Income Tax
Consequences . . . . . . . . . . The Merger is expected to qualify as a
reorganization within the meaning of
Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and that no
gain or loss will be recognized by the
shareholders of The Colonel's to the extent
they exchange their Colonel's Common Stock
for Brainerd Common Stock. No ruling has
been or will be sought from the Internal
Revenue Service. The Merger will not have
any tax consequences to current Brainerd

4
shareholders. See "PROPOSAL I: ADOPTION
OF THE MERGER AGREEMENT - Certain Federal
Income Tax Consequences."

Accounting and Tax Treatment . . . It is anticipated that the Merger will be
accounted for as a purchase. See "THE
MERGER AGREEMENT -Accounting and Tax
Treatment."

Reasons for and Effects of the Merger, Recommendations

Reasons for the Merger. . . . The respective Boards of Directors of
Brainerd and The Colonel's have approved
the Merger. The Board of Directors of
Brainerd has determined that the Merger is
fair to its shareholders for the following
reasons: (i) the Merger will diversify the
investment of Brainerd shareholders to
include an interest in a leading supplier
of aftermarket automotive parts in North
America; (ii) the Merger will benefit the
financial strength of Brainerd through
affiliation with The Colonel's, which
maintains a record of adequate capital,
minimal debt, profitable operations and a
favorable credit record; (iii) the broader
asset base and income stream that will
result from the Merger is expected to
improve Brainerd's ability to borrow money
in order to finance various capital
improvements at Brainerd International
Raceway, such as additional bathrooms,
camping facilities, and other amenities,
which should in turn result in higher
attendance and revenue levels; and (iv) the
Merger may benefit Brainerd International
Raceway through affiliation of Brainerd
with a nationally recognized manufacturer
in the automotive industry.

The Board of Directors of The Colonel's has
determined that the Merger is fair to its
shareholders for the following reasons:
(i) the Merger will provide The Colonel's
increased access to the public market to
obtain capital as required to fund
continuing operations and any future
expansion; (ii) the Merger will enhance
The Colonel's ability to undertake future
business combinations or acquisitions

5
through the registration and issuance of
additional publicly traded shares as part
or all of the consideration in such
business combinations or acquisitions;
(iii) the Merger will achieve certain
operational efficiencies as the result of
consolidated management, accounting and
public reporting for The Colonel's
Holdings and its subsidiaries following
the Merger; and (iv) the Merger may benefit
The Colonel's and distributors of its
products through affiliation of The
Colonel's with Brainerd International
Raceway and the nationally recognized and
professionally sanctioned racing events
held at Brainerd International Raceway.

Recommendations of the Boards
of Directors. . . . . . . . The Merger Agreement, including the number
of shares of Brainerd Common Stock issuable
to shareholders of The Colonel's in
consideration of the Merger, was determined
as a result of negotiations between the
parties. See "CERTAIN TRANSACTIONS." The
Boards of Directors of both Brainerd and
The Colonel's have approved and recommend
that its shareholders adopt the Merger
Agreement.

Opinion of Financial Adviser . . . Century Capital has acted as financial
adviser to Brainerd in connection with the
Merger and has delivered to the Board of
Directors of Brainerd its written opinion
to the effect that, based upon
considerations described therein, the
proposed consideration to be offered in
the Merger is fair to the shareholders of
Brainerd from a financial point of view.
For additional information concerning the
procedures followed and other matters
considered by Century Capital in reaching
its opinion, the fee received by Century
Capital and certain other matters, see
"PROPOSAL I: ADOPTION OF THE MERGER
AGREEMENT - Opinion of Brainerd's
Financial Adviser." The opinion of
Century Capital is attached to this
Proxy Statement as Appendix B, and
shareholders are urged to read
carefully this opinion in its entirety.

6
Basis and Methodology of
Determining Exchange
Ratio. . . . . . . . . . . . . . The exchange ratio of approximately 3.903
shares of Brainerd Common Stock for each
share of The Colonel's Common Stock was
proposed to Brainerd by shareholders of
The Colonel's and was approved by the
Board of Directors of Brainerd. In making
their proposal, the shareholders of The
Colonel's determined that Brainerd had a
capacity to generate annual net income of
approximately $170,000 and that The
Colonel's had a capacity to generate annual
net income of approximately $6,000,000 or
roughly 35 times the earning capacity of
Brainerd. Applying the 35-to-1 net income
ratio to the 677,830 shares of Brainerd
Common Stock currently outstanding
indicated the shareholders of The Colonel's
should receive 23,724,050 shares of
Brainerd in exchange for their shares of
The Colonel's. The actual number of shares
proposed to be issued was reduced to
23,500,000. The proposed exchange ratio
was not materially influenced by trading
prices for Brainerd Common Stock following
September 12, 1994, the date Donald J.
Williamson purchased 487,080 shares,
because the Brainerd Board believes that
post-September 12, 1994 trading prices
reflect speculation whether the proposed
Merger will occur rather than the value of
Brainerd as an independent company and
because such trades reflect a small
percentage of the outstanding shares.
See "PROPOSAL I: ADOPTION OF THE MERGER
AGREEMENT - Basis and Methodology of
Determining Exchange Ratio."

Interest of Certain Persons
in the Merger. . . . . . . . . . Donald J. Williamson owns 67,080 shares of
Brainerd Common Stock representing
approximately 9.9% of the outstanding
shares of Brainerd Common Stock on,
October 20, 1995. Mr. Williamson, together
with his wife, owns all of the outstanding
capital stock of The Colonel's and serves
as a director and executive officer of The
Colonel's. Following completion of the

7
Merger, Mr. Williamson, together with his
wife Patsy L. Williamson, would own
approximately 97.5% of the combined
companies. Additionally, Mr. Williamson
anticipates serving as a director and
executive officer of The Colonel's
Holdings, Inc. See "PROPOSAL I: ADOPTION
OF THE MERGER AGREEMENT - Background of the
Merger" and "CERTAIN TRANSACTIONS."

Sale of Brainerd Stock by
Mr. Williamson . . . . . . . . . On September 12, 1994 Donald J. Williamson
acquired 487,080 shares of Brainerd Common
Stock representing approximately 71.9% of
the issued and outstanding shares of
Brainerd Common Stock. Upon acquiring
shares of Brainerd Common Stock, Mr.
Williamson stated his intention that
Brainerd and The Colonel's consider some
form of merger. Following the negotiation
of the terms of the proposed Merger,
Brainerd was advised by legal counsel that
the proposed Merger might be prohibited by
the Minnesota business combination statute
because Mr. Williamson was an "interested
shareholder" within the meaning of the
statute and because neither Mr.
Williamson's acquisition of stock nor the
proposed Merger had been approved by the
Brainerd Board of Directors prior to Mr.
Williamson's acquisition of stock. In
order to remove possible impediments to the
proposed Merger posed by his status as an
"interested shareholder", on April 6, 1995
Mr. Williamson sold 420,000 shares of
Brainerd Common Stock to Charles Mott and
resigned as a director and executive
officer of Brainerd. Following the sale
of shares, Mr. Williamson holds 67,080
shares of Brainerd Common Stock,
representing approximately 9.9% of
Brainerd's outstanding stock.

Mr. Williamson and Mr. Mott have no
agreement, arrangement or understanding
regarding any repurchase by Mr. Williamson
of the shares of Brainerd Common Stock
sold to Mr. Mott at any time in the
future. Additionally, there is no

8
agreement, arrangement or understanding
between Mr. Willliamson and Mr. Mott with
respect to voting any of the shares sold
by Mr. Williamson to Mr. Mott on any
matter that may be presented to Brainerd
shareholders, including any of the
proposals set forth in this Proxy
Statement. See "PROPOSAL I: ADOPTION OF
THE MERGER AGREEMENT - Background of the
Merger and Stock Purchase Agreement
Between Mr. Williamson and Mr. Mott."

Operation of Brainerd and
The Colonel's after
the Merger . . . . . . . . . . . Brainerd contemplates that after the
Merger, Brainerd International Raceway
and The Colonel's will be operated as
separate subsidiaries of the parent
company, The Colonel's Holdings, Inc.
It is anticipated that each of the
subsidiaries will continue to operate
its business substantially in the same
manner as operated prior to the
Merger. The parent company will provide
legal, accounting, and other support for
each subsidiary.

Affiliated Transactions Involving
Brainerd and The
Colonel's. . . . . . . . . . . . Donald J. Williamson owns approximately
9.9% of the outstanding shares of Brainerd
Common Stock. See "Interest of Certain
Persons in the Merger." The Colonel's is
a party to certain related party
transactions. The Colonel's leases its
Milan, Michigan manufacturing facility from
a limited liability company owned by Donald
and Patsy Williamson. The Colonel's also
engages in certain business transactions
with The Colonel's Factory Warehouse of
Arkansas, Inc., which is owned by Donald J.
Williamson, and with Blain Buick-GMC, Inc.,
which is owned by Patsy L. Williamson.
Additionally, The Colonel's leases a skybox
at the Brainerd International Raceway and
expects to stage customer appreciation and
other events at the raceway, as well as to
develop ways to enhance the public
visibility of its name and products through

9
sponsorship of events at the raceway. See
"PROPOSAL I: ADOPTION OF THE MERGER
AGREEMENT - Certain Transactions."

Dissenters' Rights. . . . . . . . . Brainerd shareholders who do not vote any
of their shares in favor of (i) adoption of
the Merger Agreement, (ii) the proposal to
change Brainerd's state of incorporation
and to increase the number of authorized
shares of Brainerd Common Stock, or
(iii) the proposal to transfer Brainerd's
operating assets to Brainerd International
Raceway, Inc., and who file with Brainerd
before the vote on the proposals a written
notice of intent to demand the fair value
of all of their shares shall be entitled to
exercise dissenters' rights in accordance
with the Minnesota Business Corporation
Act. Under Minnesota law, any Brainerd
shareholder who fully and completely
follows the procedures set forth in Section
302A.473 of the Minnesota Business
Corporation Act will be entitled to receive
payment in cash of the "fair value" of all
of such shareholder's shares. To receive
the payment, the proposal to which the
shareholder dissents must be approved by
shareholders of Brainerd at the Brainerd
Meeting. Any shareholder who wishes to
exercise dissenters' rights must file with
Brainerd before the vote on any of the
proposals for which dissenters' rights are
available, a written notice of intent to
demand the fair value of all of the shares
owned by such shareholder and must not vote
any of his or her shares in favor of the
proposal to which the shareholder desires
to dissent. If the action dissented from
is approved, Brainerd will notify
dissenting shareholders of the approval and
the dissenting shareholders' obligation to
tender all of their shares to Brainerd for
payment. Upon receipt of the shares,
Brainerd is to make payment of what
Brainerd believes to be the fair value for
the shares. If a dissenting shareholder
believes the fair value exceeds the amount
paid, the dissenting shareholder may within
30 days of receipt of the payment demand an
additional payment which demand must

10
include the shareholder's estimate of the
fair value. If Brainerd and the dissenting
shareholder are unable to resolve their
disagreement as to the fair value, Brainerd
is required to have the Minnesota District
Court for Hennepin County determine the
fair value. In determining the fair value,
the court is allowed to take into account
such factors and use any valuation method
or methods the court deems appropriate
whether or not those factors and
valuation methods were used by Brainerd
or the dissenting shareholder and may
employ its own appraisers and experts. The
court may, but is not required to, consider
Brainerd's market valuation, its book value
and the replacement cost of its assets as
well as a capitalization of Brainerd's
earnings. The court may assess costs
against a dissenting shareholder, includ-
ing attorneys fees incurred by Brainerd,
if the court finds the demand for the
additional payment was not made in good
faith. Any shareholder desiring to exer-
cise dissenters' rights should carefully
review the applicable provisions of the
Minnesota Business Corporation Act at-
tached to this Proxy Statement and
Prospectus as Appendix C. Although
Minnesota law only entitles Brainerd
shareholders to dissenters' rights with
respect to the reincorporation proposal,
the Brainerd Board of Directors voted to
grant Brainerd shareholders dissenters'
rights with respect to all three of the
foregoing proposals. See "RIGHTS OF
DISSENTING SHAREHOLDERS" and "INTRODUCTION"
for a more detailed discussion of the
rights and obligations of shareholders
desiring to exercise dissenters' rights
with respect to any of the proposals to be
considered by Brainerd shareholders. It is
a condition of the Merger Agreement that
both shareholders of The Colonel's approve
the Merger meaning neither shareholder of
The Colonel's will be entitled to exercise
any dissenters' rights.

Risk Factors . . . . . . . . . . . The decision to vote for or against the
adoption of the Merger Agreement should be

11
made only after consideration of a number
of risk factors relating to Brainerd and
The Colonel's. Risk factors relating to
Brainerd include the dependence upon
limited sources of revenue, the seasonal
nature of its business, its dependence
upon sponsorship and sanctioning for
racing events, possible liability for
injuries and damage at racing events and
limited management having experience
operating a raceway. Risk factors relat-
ing to The Colonel's include the competi-
tive nature of the aftermarket automotive
crash parts industry and possible indus-
trial design protection legislation. See
"RISK FACTORS" at page 13.

Possible Detriments of The Merger. . The combination of two companies in differ-
ent lines of business may make it more
difficult for each company to operate in a
manner appropriate to its specific business
mix, to develop its own operating
capabilities focused on its particular
business, and to determine optimal asset
deployment. Following the combination of
Brainerd and The Colonel's, it will not be
possible for shareholders to invest in
direct exclusive ownership in Brainerd and
the shareholders of Brainerd will be
exposed to risks associated with The
Colonel's. In addition, following the
Merger The Colonel's will be affiliated
with a publicly traded company meaning The
Colonel's will experience potential
disadvantages such as publicly disclosing
business and financial information that may
be competitively sensitive and bearing the
costs of complying with federal securities
laws. See "RISK FACTORS" at page 13.

Regulatory Requirements. . . . . . Other than compliance with applicable
federal securities laws and the corporate
laws of Minnesota and Michigan, the Merger
will not involve any particular federal or
state approvals or regulatory requirements.

Comparisons of Income, Dividends and Book Value Per Share

The following summary presents, at and for the periods indicated,
selected comparative per share data for Brainerd and The Colonel's on a

12
historical basis and, assuming that the Merger had been consummated at the
beginning of the year ended December 31, 1994, on a pro forma combined
basis and pro forma equivalent basis. The pro forma information assumes
that The Colonel's converted to a C corporation for federal income tax
purposes.

The pro forma combined information is not necessarily indicative of
actual or future operating results or financial position that would have
occurred or will occur upon completion of the Merger. The information
presented below should be read in connection with the companies' historical
financial statements and pro forma combined financial data included
elsewhere herein. Brainerd did not declare or pay any dividends during the
period presented. See "UNAUDITED PRO FORMA COMBINED SELECTED FINANCIAL
DATA AND CONDENSED FINANCIAL INFORMATION."

<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, 1994 June 30, 1995
Historical Pro Forma Historical Pro Forma
<S> <C> <C> <C> <C>
Income (loss) Per Share of
Common Stock
Brainerd Common Stock. . . . . $0.25 $ -- $(.43) $ --
The Colonel's Common Stock . . 1.81 -- .40 --
Combined Companies <Fa>. . . . -- 0.30 -- .05
The Colonel's Equivalent <Fb>. -- 1.17 -- .20
</TABLE>
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, 1994 June 30, 1995
Historical Pro Forma Historical Pro Forma
<S> <C> <C> <C> <C>
Dividends Per Share of Common
Stock
Brainerd Common Stock. . . . . $ -0- $ -- $ -0- $ --
The Colonel's Common Stock . . N/A <Fc> -- N/A<Fc> --
Combined Companies <Fa> . . . -- -0- -- -0-
The Colonel's Equivalent <Fb>. -- -0- -- -0-
</TABLE>

<TABLE>
<CAPTION>
Year Ended
June 30, 1995
Historical Pro Forma
<S> <C> <C>
Book Value Per Share of
Common Stock
Brainerd Common Stock. . . . . $1.94 $ --
The Colonel's Common Stock . . 1.76 --
Combined Companies <Fa>. . . . -- .45
The Colonel's Equivalent <Fb>. -- 1.76
<FN>
_______________________

<Fa> Pro forma combined amounts per share were computed based on pro forma
combined amounts divided by the pro forma weighted average number of
shares outstanding during the period.

<Fb> Pro forma The Colonel's equivalent amounts per share reflect the pro
forma combined amounts multiplied by the exchange ratio of approximately
3.903 shares of Brainerd Common Stock for one share of The Colonel's
Common Stock.

<Fc> The Colonel's was treated as an S corporation for federal income tax
purposes for the year ended December 31, 1994, and for the six-month
period ended June 30, 1995. Distributions to shareholders of The
Colonel's are discussed under "SELECTED FINANCIAL DATA OF THE
COLONEL'S."
</FN>
</TABLE>

INTRODUCTION

General

This Proxy Statement is being furnished to the shareholders of
Brainerd in connection with the solicitation of proxies by the Board of
Directors of Brainerd for use at the Meeting to be held on November 21, 1995 at
9:30 a.m. (local time) at the Ramada Plaza Hotel, 12201 Ridgedale Drive,
Minnetonka, Minnesota. This Proxy Statement, the attached notices
and the enclosed proxies are first being mailed to shareholders of
Brainerd and The Colonel's on or about October 23, 1995.

Matters to be Considered at the Meeting

At the Meeting, the shareholders of Brainerd are being asked to consider
and vote upon a proposal to adopt the Merger Agreement. Such adoption has
been approved and recommended by the Board of Directors of Brainerd. A copy
of the Merger Agreement is attached to this Proxy Statement as Appendix A.

14
Representatives of Copeland Buhl & Company P.L.L.P., Brainerd's independent
auditors, and Deloitte & Touche LLP, The Colonel's independent auditors, are
expected to be available at the Meeting to respond to appropriate questions
and will be given the opportunity to make a statement if they so desire.

If the requisite votes in favor of the proposals to adopt the Merger
Agreement are obtained and the Merger is consummated, pursuant to the terms
of the Merger Agreement: (i) Brainerd Merger Corporation, a wholly owned
subsidiary of Brainerd, will be merged with and into The Colonel's, with
The Colonel's being the surviving corporation; and (ii) each share of The
Colonel's Common Stock outstanding at the Effective Time will be converted
into and represent the right to receive approximately 3.903 shares of
Brainerd Common Stock.

In addition, at the Meeting, shareholders of Brainerd will be
asked to consider and vote upon proposals to: (i) change the state of
incorporation of Brainerd from Minnesota to Michigan and adopt new articles
of incorporation of Brainerd to change Brainerd's name from Brainerd
International, Inc., to The Colonel's Holdings, Inc. ("The Colonel's
Holdings"), increase the number of shares of common stock, par value $.01
per share, of Brainerd ("Brainerd Common Stock") which Brainerd is
authorized to issue from 10,000,000 to 35,000,000 shares and to effect various
other changes in the structure of corporate governance for Brainerd;
(ii) authorize Brainerd to transfer all of its operating assets to Brainerd
International Raceway, Inc., a wholly owned subsidiary of Brainerd;
(iii) adopt The Colonel's Holdings, Inc. 1995 Long-Term Incentive Plan;
(iv) elect directors; and (v) confirm the appointment of Deloitte & Touche LLP
as the independent auditors of Brainerd for the year ending December 31,
1995. The adoption of the proposal to amend the Articles of Incorporation
of Brainerd to increase the number of authorized shares of Brainerd Common
Stock, and approval to transfer all of the operating assets of Brainerd to
Brainerd International Raceway, Inc. are conditions to the obligations of
Brainerd to consummate the Merger. See "THE MERGER AGREEMENT - Conditions
to the Merger."

Voting and Proxies

Brainerd. The Board of Directors of Brainerd has fixed the close of
business on October 20, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the Brainerd Meeting.
Accordingly, only holders of record of shares of Brainerd Common Stock at
the close of business on that date will be entitled to notice of and to
vote at the Brainerd Meeting or any adjournment thereof. At the close of
business on such date, there were 677,830 shares of Brainerd Common Stock
outstanding.

Each holder of record of shares of Brainerd Common Stock on the record
date is entitled to cast one vote per share in person or by properly
executed proxy on any matter that may properly come before the Brainerd

15
Meeting. The presence, in person or by properly executed proxy, of the
holders of 25% of the shares of Brainerd Common Stock outstanding on the
record date is necessary to constitute a quorum at the Brainerd Meeting.
The affirmative vote of the holders of a majority of the shares of Brainerd
Common Stock present and entitled to vote, represented in person or by
properly executed proxy at the Brainerd Meeting is required to adopt the
Merger Agreement, approve transfer of Brainerd's operating assets, adopt
The Colonel's Holdings, Inc. 1995 Long-Term Incentive Plan, elect
directors, and confirm the appointment of Deloitte & Touche LLP as the
independent auditors for the year ending December 31, 1995 and the
affirmative vote of the holders of a majority of the shares of Brainerd
Common Stock entitled to vote is required to change Brainerd's state of
incorporation and restate Brainerd's Articles of Incorporation. Approval
of the Merger Agreement, restatement of the Articles of Incorporation and
approval for transfer of Brainerd's operating assets to Brainerd
International Raceway, Inc. are necessary conditions to consummation of the
Merger.

Proxy Voting, Solicitation, Revocations, and Abstentions. All
proxies received pursuant to this solicitation will be voted except as to
matters where authority to vote is specifically withheld and, where a
choice is specified as to the proposal, they will be voted in accordance
with such specification. If no instructions are given, the persons named
in the proxies solicited by the Board of Directors of Brainerd intend to
vote for the adoption of the Merger Agreement and for the change of
Brainerd's state of incorporation to Michigan, for the restatement of the
Articles of Incorporation of Brainerd, for the transfer of Brainerd's
operating assets to Brainerd International Raceway, Inc., for the adoption
of the 1995 Long-Term Incentive Plan, for the election of directors of
Brainerd listed herein, and for the confirmation of the appointment of
Deloitte & Touche LLP as the independent auditors of Brainerd.

With respect to proposals before Brainerd shareholders at the Meeting,
abstentions with respect to any proposal will be effectively treated as votes
against the proposal. The treatment of broker non-votes depends on the
specific proposal. With respect to adoption of the Merger Agreement, approval
for transfer of assets and liabilities associated with Brainerd International
Raceway to a wholly owned subsidiary of Brainerd, and adoption of The
Colonel's Holdings, Inc. 1995 Long-Term Incentive Plan, broker non-votes
will not be counted as votes for or against the proposals. With respect to
approval of the reincorporation and restatement of the Articles of
Incorporation to authorize additional shares of common stock and to
authorize preferred stock, the election of directors and the confirmation
of the appointment of Deloitte & Touche LLP as independent auditors, broker
non-votes will have the same effect as votes against the proposals.

Proxies will be solicited from shareholders of Brainerd by Brainerd.
The entire cost of proxy solicitation will be borne respectively by each of
the companies. In addition to the use of the mails, proxy solicitations may
be made by officers and employees of the respective companies, personally or
by telephone or telegram, without additional compensation.
16
The Board of Directors of Brainerd does not know of any matters, other
than the matters described in this Proxy Statement, which are expected
to be presented for consideration at the Meeting. If any other matters
are properly presented at the Meeting, the person named in the respective
accompanying proxy will have discretion to vote on such matters in accordance
with his best judgment.

Shareholders of Brainerd who execute their proxy may revoke them by
giving written notice to the Secretary of Brainerd or The Colonel's,
respectively, at any time before such proxies are voted. Attendance at the
Meeting will not have the effect of revoking a proxy unless the shareholder so
attending, in writing, so notifies the secretary of the Meeting at any time
prior to the voting of the proxy.

RISK FACTORS

Risks Associated with Brainerd's Existing Operations

Material risks associated with an investment in Brainerd Common Stock which
arise from Brainerd's existing operations are summarized below.

Dependence Upon Limited Sources of Revenue. Brainerd receives
substantially all of its revenue from the operation of the Brainerd
International Raceway. While revenues are obtained from ticket sales and
rentals of the Brainerd International Raceway for approximately 35 events
annually, a single event, a drag race sanctioned by the National Hot Rod
Association, has accounted for 58%, 56%, and 56% of the operating revenues
of Brainerd for the years ended December 31, 1994, 1993 and 1992. Four
additional events, a motorcycle race, a classic street rod exhibit and
race, and two drag racing events, accounted for 31% of the operating
revenues for 1994. (See "BUSINESS OF BRAINERD - Sources of Revenue.")

Seasonal Business/Weather. Substantially all of Brainerd's revenues
arise from the operation of Brainerd International Raceway during the
period of May through September of each year. Brainerd's revenues are
derived primarily from ticket sales for racing events, and adverse weather
could materially diminish the revenues which might otherwise be received by
Brainerd. While sports car and motorcycle races may be conducted in nearly
all weather conditions, spectator attendance is materially reduced when it
rains. A drag racing event cannot be held in rain, and adverse weather
could require the rescheduling of such events, or the cancellation of such
events and the return of ticket sale proceeds to ticket purchasers. A
substantial majority of Brainerd's revenues arise from drag racing events.
(See "BUSINESS OF BRAINERD - Seasonal Business/Weather.")

Sponsorship/Sanctioning of Races. The ability to draw ticket
purchasing spectators to racing events is largely dependent upon the
scheduling of major or popular racing events. In order to schedule such

17
events, Brainerd must enter into agreements with certain sanctioning
organizations, such as the National Hot Rod Association (the "NHRA") and
the American Motorcyclist Association. If Brainerd was unable to obtain
the approval of those sanctioning organizations, it would be unable to
present major racing events. The agreement between Brainerd and the NHRA
pursuant to which the Champion Auto Stores Nationals is held, expires upon
the conclusion of the event in 1996. As that event accounts for a
substantial portion of Brainerd's revenues, early termination of the
agreement by the NHRA, due to a breach of the agreement by Brainerd or the
failure of Brainerd to obtain an extension or renewal of the agreement
following its expiration in 1996 would have a material and adverse impact
on the business of Brainerd. In addition, agreements with businesses such
as Champion Auto Stores and R.J. Reynolds Tobacco for the sponsorship of
races provide Brainerd with sponsorship fees and promotional support.
Failure by Brainerd to enter into sponsorship agreements could have a
material adverse effect on Brainerd's business. (See "BUSINESS OF BRAINERD
- - Sanctioning Organizations.")

Liability for Injuries and Damage. The racing events at Brainerd
International Raceway can be dangerous to participants and spectators.
Brainerd requires that each race participant expressly waive any claim
against Brainerd which may arise from a racing accident; however, actions
alleging Brainerd's negligence can and have been brought based upon the
occurrence of such accidents. In addition, Brainerd has been subject to
claims by spectators for injuries occurring while attending events at the
Brainerd International Raceway. Brainerd, its officers and sponsors, and
certain participants in the racing events, are insured for up to $3,000,000
against liability for personal injury and property damage to any spectator
or racing event participant incurred at any racing event as the result of
the negligence of any named insured. This insurance policy must be renewed
annually, and there is no assurance that such insurance will continue to be
available to Brainerd at affordable rates. In addition, Brainerd requires
each participating or sanctioning organization that uses the Brainerd
Raceway to acquire insurance which will provide accidental death,
dismemberment and medical benefits for participants in each racing event.
The amount of coverage under such insurance varies from $3,000 to $20,000
per incident. Additionally, it is possible that Brainerd may face claims
and liability, potentially including consequential and punitive damages,
arising from the activities of persons at the raceway that are neither
authorized nor sanctioned by Brainerd. Insurance maintained by Brainerd
may not cover all claims for injuries, including but not limited to claims
for punitive damages." (See "BUSINESS OF BRAINERD - Liability Insurance.")

Key Employee. Brainerd is materially dependent upon the experience
and knowledge of Richard L. Roe, its Vice President and General Manager of
the Brainerd International Raceway. Brainerd has an insurance policy in
the amount of $250,000 on the life of Mr. Roe. If the services of Mr. Roe
should become unavailable, the business of Brainerd could be materially and
adversely affected. Other than Mr. Roe, none of the directors or officers
of Brainerd and The Colonel's, including Donald J. Williamson, have any

18
previous experience operating a raceway. (See "BUSINESS OF BRAINERD -
Personnel.")

Dividend Policy. Brainerd's current loan agreement restricts the
payment of dividends, and Brainerd does not anticipate payment of any cash
dividends in the foreseeable future.

Market for Common Stock. The market price for Brainerd Common Stock
has been volatile since the September 1994 acquisition of shares by
Donald J. Williamson and the announcement of the possible combination of
Brainerd and The Colonel's. While the shares of Brainerd Common Stock are
traded over the counter and eligible for listing on the NASDAQ Small-Cap
Market system, the trading activity for Brainerd shares has been limited.
The number of shares of Brainerd Common Stock currently eligible for
trading is quite small relative to the number of shares to be issued in
connection with the Merger. Sales of relatively small quantities of
Brainerd Common Stock have resulted in significant changes in market
prices. See "MARKET PRICES AND RELATED MATTERS."

Risks Associated with the Acquisition of The Colonel's

In determining whether to vote to approve the Merger, shareholders of
Brainerd should consider the risks to which Brainerd will be exposed as a
consequence of an acquisition of The Colonel's. Material risks associated
with an acquisition of The Colonel's are summarized below.

Combination of the Companies. It is possible that the Merger of the two
companies, which operate in separate lines of business, may reduce the focus of
both Brainerd and The Colonel's. Prior to the combination, each company is able
to operate in a manner appropriate to its specific business mix to develop its
own operating capabilities and to determine optimal asset development.
Following the combination of the two companies, it will no longer be possible
for shareholders to invest in direct exclusive ownership in Brainerd. Since
financial analysts tend to prefer to follow "pure play" companies which are
concentrated in a single line of business, it is possible that following
completion of the Merger, analysts may be less likely to follow the stock of
the combined entity.

Competitive Industry. The Colonel's competes in a competitive
industry which, historically, has been dominated by original equipment
manufacturers ("OEM's") such as General Motors Corporation, Ford Motor
Corporation, Chrysler Corporation, Toyota Motor Sales, U.S.A. Inc. and
Nissan Motor Corp. U.S.A. Such OEM's are more established, maintain large
marketing and sales organizations and have substantially greater financial
resources than The Colonel's. Such OEM's generally distribute their
replacement plastic automotive bumpers through their automobile
dealerships. The Colonel's generally distributes its products to autobody
shops through independent distributors. The Colonel's competes with OEM's
principally on the basis of price by selling its products at prices less
than those charged by the OEM's. Certain OEM's have lowered the prices of

19
their replacement parts and there can be no assurance that OEM's will not
seek to be more price competitive or pursue other strategies directed at
the recapture of the portion of the aftermarket collision parts market
which is now serviced by The Colonel's and other non-OEM suppliers.
The Colonel's competes with other non-OEM's and may face competition
by manufacturers of metal bumpers and other products that may extend their
product line to include plastic bumpers. In addition, following the Merger
The Colonel's will be affiliated with a publicly traded company meaning
The Colonel's will experience potential disadvantages such as publicly
disclosing business and financial information that may be competitively
sensitive and bearing the costs associated with complying with federal
securities laws.

Industrial Design Protection Legislation. Legislation has
periodically been introduced in the United States House of Representatives
that would permit registration of product design features and would expand
copyright protection for designs of replacement parts. If enacted, this
legislation could prohibit The Colonel's from manufacturing and
distributing its products using shapes or designs similar to those of OEMs
that register design features of automobile bumpers or components. Such
legislation has been introduced on a number of previous occasions and has
never been enacted into law due primarily to strong opposition by the
automobile collision repair industry, the automobile insurance industry and
by various consumer organizations interested in preserving competition for
automotive collision parts. For these reasons, The Colonel's management
does not believe that any such legislation is likely to be enacted into law
in the foreseeable future. The Colonel's is not aware of any industrial
design protection legislation currently pending or under consideration in
the United States Congress. However, there can be no assurance that
"design-rights" legislation protecting design rights of OEM automobile
parts will not be enacted. If such legislation were enacted, it could
force The Colonel's to change its product designs, subject The Colonel's to
liability for violating registered design rights, and would most likely
adversely affect the business of The Colonel's.

Control of Brainerd. Following completion of the exchange, Donald J.
Williamson and his wife, Patsy L. Williamson will collectively own
approximately 97.5% of the outstanding Brainerd Common Stock. As a result,
Mr. and Mrs. Williamson will have the power to elect Brainerd's Board of
Directors, to approve most other matters requiring shareholder approval,
and will consequently have significant influence over the management,
policies and operations of Brainerd. In addition, Donald J. Williamson is
expected to serve as a director and as the Chief Executive Officer of
Brainerd. Mr. Williamson is 61 years old. In 1962, when Mr. Williamson
was 28 years old, he was convicted of the felony of participating in a
scheme to purchase automobiles with fraudulent checks and then resell the
automobiles, with knowledge that they were stolen. Approximately two years
later, Mr. Williamson pleaded guilty to and was convicted of the felony of
conspiring to violate the federal bankruptcy laws. For these criminal
offenses, Mr. Williamson served approximately three years' time in a

20
federal penitentiary. In connection with his operation of a pawn shop
business in 1972, Mr. Williamson pleaded guilty to and was convicted of
unlawful possession of firearms as a convicted felon, and paid a small
fine. Mr. Williamson has not been arrested or convicted of any felony or
misdemeanor since 1972.

Dilution. As a result of the Merger, existing shareholders of
Brainerd will experience an immediate and substantial dilution in the net
tangible book value of their shares of Brainerd Common Stock. The net
tangible book value per share of Brainerd Common Stock at June 30, 1995,
was $1.94. "Net tangible book value" per common share is equal to total
tangible assets of Brainerd less total liabilities, divided by the number
of shares of common stock outstanding. As a result of the issuance of
23,500,000 shares of Brainerd Common Stock in connection with the proposed
Merger, the pro forma net tangible book value per share of Brainerd Common
Stock at June 30, 1995, would have been $0.45. This represents a
decrease of $1.49 per share to existing shareholders of Brainerd.

Transactions with Affiliates. Since its organization in 1982, The
Colonel's has engaged in certain transactions with Mr. Williamson and his
affiliates. Mr. Williamson has stated that it will be the policy of
Brainerd and The Colonel's following the Merger for future material
transactions with affiliates to be on terms no less favorable to Brainerd
and The Colonel's than those available from unrelated third parties and
that such transactions will be ratified by a vote of a majority of the
disinterested members of the Board of Directors.

Market Conditions; Shares Eligible for Future Sale. Sales of a
substantial number of shares of Brainerd's Common Stock in the public
market following the Merger could adversely affect the market price for
such shares. The shares which may be issued in connection with the Merger will
not be eligible for sale in the public market, except pursuant to an effective
registration statement in compliance with the conditions of Rule 144 under the
Securities Act of 1933. Such limitations include, among other things, holding
periods and quantity limitations.

Anti-Takeover Provisions in Articles of Incorporation. Certain
provisions of The Colonel's Holdings Articles of Incorporation may have an
anti-takeover impact and may make tender offers, proxy contests, and
certain mergers more difficult to consummate. These include provisions:
(i) requiring a super majority of 66 2/3% of the total voting power of all
shares of stock to amend the Bylaws; (ii) restricting the ability of
shareholders to call a special meeting of shareholders without approval by
the Board of Directors; (iii) establishing procedures by which shareholders
may nominate persons for election to the Board of Directors and procedures
by which shareholders may bring business before annual meetings of
shareholders; (iv) authorizing The Colonel's Holdings to issue preferred
stock, with such rights, preferences, privileges, and limitations as the
Board of Directors may determine; and (v) electing to opt out of the
Michigan control share acquisition and business combination statutes. See

"BRAINERD PROPOSAL II: REINCORPORATION OF BRAINERD - Possible Negative
Considerations."

PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT

Background of the Merger

On September 12, 1994, Donald J. Williamson acquired 487,080 shares of
Brainerd Common Stock. The shares acquired by Mr. Williamson represented
approximately 71.9% of the issued and outstanding shares of Brainerd Common
Stock. Mr. Williamson purchased 391,479 of the shares from Gene M. Snow
and 95,601 of the shares from James W. Littlejohn. Mr. Williamson acquired
the shares pursuant to a Stock Purchase Agreement dated September 9, 1994
with Mr. Snow and Mr. Littlejohn and paid an aggregate purchase price in
the amount of $1.1 million for the acquired shares of Brainerd Common
Stock. The purchase price for all shares of Brainerd Common Stock acquired
by Mr. Williamson from Mr. Snow and Mr. Littlejohn was $2.26 per share.
The source of funds used to purchase the acquired shares of Brainerd Common
Stock was personal cash of Mr. Williamson. Mr. Williamson, together with
his wife Patsy L. Williamson, own all of the outstanding stock of The
Colonel's. See "MANAGEMENT AND PRINCIPAL SHAREHOLDERS."

In connection with the sale of shares of Brainerd Common Stock to Mr.
Williamson, Gene M. Snow resigned as a director and as the President and
Chief Executive Officer of Brainerd and James W. Littlejohn resigned as a
director and as the Treasurer and Chief Financial Officer of Brainerd. On
September 27, 1994 the Brainerd Board of Directors appointed Donald J.
Williamson, Gary Moore, Ted Gans, J. Daniel Frisina, and Lisa Morrow
directors of Brainerd. The Brainerd Board of Directors additionally
appointed Mr. Williamson to serve as Chief Executive Officer and Chief
Financial Officer of Brainerd. See "PROPOSAL V: ELECTION OF DIRECTORS OF
BRAINERD - Directors and Executive Officers."

At the time he acquired shares of Brainerd Common Stock, Mr.
Williamson stated his intention that Brainerd continue the operation of the
Brainerd International Raceway located in Brainerd, Minnesota and for
Brainerd to retain Richard L. Roe as general manager of the racing
facility. Mr. Williamson also stated his intention that Brainerd Common
Stock remain eligible for trading on the NASDAQ system.

Upon acquiring shares of Brainerd Common Stock, Mr. Williamson stated
his further intention that Brainerd and The Colonel's consider some form of
merger or business combination. On December 15, 1994, the Boards of
Directors of Brainerd and The Colonel's approved the terms of a letter of
intent contemplating a merger of The Colonel's with a wholly owned
subsidiary of Brainerd in consideration for the issuance of shares of
Brainerd Common Stock to shareholders of The Colonel's, subject to receipt
of shareholder approvals, the effective registration of additional shares

22
of Brainerd Common Stock and certain other contingencies, including the
completion of year-end audited financial statements for Brainerd and The
Colonel's. The letter of intent was executed on behalf of Brainerd and The
Colonel's on December 15, 1994. Following completion of the audited year-end
financial statements for Brainerd and The Colonel's and receipt by
Brainerd of the fairness opinion provided by Century Capital, Brainerd and
The Colonel's completed the terms of the Merger Agreement and agreed that
the exchange ratio in connection with the Merger would be approximately
3.903 shares of Brainerd Common Stock for each share of The Colonel's
Common Stock owned by shareholders of The Colonel's. On February 27, 1995
the Boards of Directors of Brainerd and The Colonel's approved the terms of
the Merger Agreement and recommended that the Merger transaction be
submitted to shareholders of Brainerd and The Colonel's for approval.

Following the February 27, 1995 meeting of the Brainerd Board of
Directors, Brainerd was advised by legal counsel that the proposed Merger
might be prohibited by the Minnesota business combination statute because
Donald J. Williamson was an "interested shareholder" within the meaning of
the statute and because neither Mr. Williamson's acquisition of Brainerd
Common Stock nor the proposed Merger had been approved by the Brainerd
Board of Directors prior to the time Mr. Williamson first acquired Brainerd
Common Stock in September 1994. In order to remove possible impediments to
the proposed Merger posed by his status as an "interested shareholder"
under the Minnesota business combination statute, on April 6, 1995
Mr. Williamson sold 420,000 shares of his Brainerd Common Stock to Charles
Mott and resigned as a director and executive officer of Brainerd. The
sale of shares by Mr. Williamson to Mr. Mott was approved by the Brainerd
Board of Directors on April 5, 1995. Following the sale of shares,
Mr. Williamson holds 67,080 shares of Brainerd Common Stock, representing
approximately 9.9% of Brainerd's outstanding stock. Since his resignation,
Mr. Williamson has not acted in any capacity as a director or officer of
Brainerd. On April 10, 1995, the Brainerd Board of Directors approved a
written proposal by Donald J. Williamson and Patsy L. Williamson to combine
Brainerd and The Colonel's by merger upon the same terms previously adopted
by the Brainerd Board of Directors on February 27, 1995, subject to
shareholder approval. See "Stock Purchase Agreement Between Mr. Williamson
and Mr. Mott."

Brainerd's Reasons for the Merger

The Brainerd Board of Directors has determined that the Merger would
be in the best interests of Brainerd and all of Brainerd's shareholders for
the following reasons:

(1) The Merger will diversify the investment of Brainerd shareholders
to include an interest in The Colonel's, a leading supplier of
aftermarket automotive parts in North America;

(2) The Merger will benefit the financial strength of Brainerd
through affiliation with The Colonel's, which maintains a record of

23
adequate capital, minimal debt, profitable operations and a favorable
credit record;

(3) The broader asset base and income stream that will result from
the Merger is expected to improve Brainerd's ability to borrow money
in order to finance various capital improvements at Brainerd
International Raceway, such as additional bathrooms, camping
facilities, and other amenities, which should in turn result in higher
attendance and revenue levels.

(4) The Merger may benefit Brainerd International Raceway and the
sponsors of events at the raceway through the affiliation of Brainerd
with a nationally recognized manufacturer in the automotive industry.

The Brainerd Board of Directors believes that each of the foregoing
reasons for the Merger will benefit the long-term best interests of both
Brainerd and its shareholders by enhancing the financial position and
profitability of Brainerd and contributing to increased liquidity and
trading prices for Brainerd Common Stock. There can be no assurance that
any of the anticipated benefits considered by the Brainerd Board of
Directors or listed in the foregoing reasons for the Merger will
materialize and it is possible that the Merger could have material adverse
consequences for both Brainerd and its shareholders. See "RISK FACTORS."
The foregoing discussion summarizes the material reasons for the Merger
considered by the Brainerd Board of Directors and does not represent the
degree of importance assigned by the Board or individual directors to any
of the specific reasons for the Merger. For a discussion of the interests
of certain members of the management and the Brainerd Board of Directors in
the Merger, see "CERTAIN TRANSACTIONS."

Opinion of Brainerd's Financial Adviser

In December 1994, Brainerd retained Century Capital to act as
Brainerd's exclusive financial adviser with respect to a review of the
proposed affiliation of The Colonel's and Brainerd. The Brainerd Board of
Directors ratified the retention of Century Capital at its meeting on
February 27, 1995. As part of its services, Century Capital analyzed The
Colonel's and its operations, historical performance and future prospects
and provided an opinion as to the fairness, from a financial point of view,
of the consideration to be received by Brainerd and indirectly by Brainerd
shareholders in connection with the proposed Merger. The amount of
consideration to be received by Brainerd in connection with the Merger was
determined by Brainerd and The Colonel's and was not determined by Century
Capital.

Century Capital is a nationally recognized investment banking firm
regularly engaged, with respect to manufacturing companies and other
corporations, in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted

24
securities, private placements, and valuations for corporate and other
purposes. The Brainerd Board of Directors selected Century Capital on the
basis of its qualifications, ability, previous experience and its
reputation with respect to mergers and acquisitions. No limitations were
imposed by Brainerd upon Century Capital with respect to the investigations
made or procedures followed by Century Capital in rendering its opinion.

Century Capital has rendered a written opinion to the Brainerd Board
of Directors to the effect that, as of November 30, 1994, the consideration
to be received by Brainerd and indirectly by Brainerd shareholders in
connection with the proposed Merger is fair, from a financial point of
view, to Brainerd and to the holders of Brainerd's Common Stock. Such
opinion describes the assumptions made, matters considered and the scope of
the review undertaken and procedures followed by Century Capital. Century
Capital's opinion is attached hereto as Appendix B and is incorporated
herein by reference. SHAREHOLDERS ARE ENCOURAGED TO READ CENTURY CAPITAL'S
OPINION IN ITS ENTIRETY.

Brainerd's Board of Directors sought an independent valuation of The
Colonel's and Brainerd by Century Capital, in order to test whether the
proposed exchange ratio would fall within a range that could be deemed by
an informed but disinterested examiner to be "fair" at the time that the
Brainerd Board of Directors voted in April, 1995 to accept Donald and Patsy
Williamson's offer to exchange shares. Century Capital's engagement
provided that the valuation was solely for the board and not for other
parties. The two companies actual performance from December, 1994 through
May 1, 1995 has closely paralleled the projected performances for those
periods that Century Capital obtained from each company and expressly
referenced in its report to Brainerd's board. The Brainerd board has
concluded that updates or new valuations are not warranted in the absence
of any subsequent unexpected events or different results for either
company.

Century Capital's opinion is directed to the Brainerd Board of
Directors only and is directed only to the adequacy of consideration to be
received by Brainerd in connection with the proposed Merger and does not
constitute a recommendation to any holder of Brainerd Common Stock as to
how such holder should vote at the Brainerd Meeting.

Financial Adviser Analysis

For purposes of its opinion and in connection with its review of the
proposed Merger, Century Capital, among other things: (a) reviewed
Brainerd's historical and publicly filed documents, including the Annual
Report for 1992, Form 10-K for 1993, Forms 10-Q for 1993 and 1994, and
Report on Form 8-K filed for the event of September 12, 1994, as well as
Brainerd prepared interim financial statements, projections and analyses
made available to Century Capital; (b) reviewed copies of Brainerd's 1994
budget forecast, undated; (c) spoke with senior executives and members of
the Brainerd Board of Directors to discuss the operations, financial

25
condition, future prospects and projected operations and performance of
Brainerd as they relate to Brainerd and the proposed Merger; (d) reviewed
The Colonel's historical financial information, including audited financial
statements for fiscal years ending December 31, 1991, 1992 and 1993, as
well as The Colonel's prepared interim financial statements, projections
and analyses made available to Century Capital; (e) spoke with senior
executives, representatives of and members of The Colonel's Board of
Directors to discuss the operations, financial condition, future prospects
and projected operations and performance of The Colonel's as they relate to
The Colonel's and the proposed Merger; (f) reviewed the Letter of Proposed
Transaction from Brainerd to Century Capital dated December 24, 1994;
(g) reviewed the proposed letter of intent concerning the Merger between
The Colonel's and Brainerd, undated; (h) reviewed the historical market
prices and trading volume for Brainerd's publicly traded securities;
(i) reviewed certain other publicly available financial data for certain
companies deemed comparable to Brainerd or The Colonel's or that possess
similar characteristics from a market perspective, and publicly available
prices and premiums paid in other transactions that Century Capital
considered similar to the proposed Merger; and (j) conducted such other due
diligence as deemed appropriate by Century Capital.

In connection with the preparation of Century Capital's opinion, The
Colonel's furnished Century Capital and Brainerd with certain financial
forecasts and projections. The following material underlying assumptions
were used in preparing forecasts concerning The Colonel's income:
(i) sales are projected to grow, as a percentage of the previous year's
sales, by 8% in 1995, 9.5% in 1996, 12% in 1997, 1998, and 1999, and 9% in
2000 and 2001; (ii) the cost of sales was projected at 64% of sales based
in historical data; (iii) sales and general administrative expenses were
projected at 15% of sales based on historical data, with a 1.5% increase
accounting for the anticipated addition of staff; and (iv) federal income
tax was projected at the rate of 32%. The following material underlying
assumptions were used in preparing forecasts of The Colonel's cash flow:
(i) collections are assumed to be 70% of the previous month's sales, with
20% collected in 60 days and the balance of 10% collected within 90 days.

Century Capital relied upon and assumed without independent
verification the accuracy and completeness of all of the financial and
other information provided to it by The Colonel's, Brainerd and their
respective representatives and of the publicly available information
reviewed by Century Capital. Century Capital also relied upon the
managements of both The Colonel's and Brainerd as to the reasonableness and
achievability of the financial and operating forecasts provided to Century
Capital (and the assumptions and bases therefor). In that regard, Century
Capital assumed that such forecasts reflect the best currently available
estimates and judgments of such respective managements and that such
projections and forecasts will be realized in the amounts and in the time
periods estimated by the managements of both The Colonel's and Brainerd.
Century Capital was not retained to and did not conduct a physical
inspection of any of the properties or facilities of The Colonel's or

26
Brainerd, nor did Century Capital make any independent evaluation or
appraisal of the assets, liabilities or prospects of The Colonel's or
Brainerd, and was not furnished with any such evaluation or appraisal.
Century Capital also assumed that the Merger is, and will be, in compliance
with all laws and regulations that are applicable to The Colonel's and
Brainerd.

Subsequent to rendering its written opinion dated as of January 3,
1995 to the Brainerd Board of Directors, Century Capital rendered an oral
opinion to the Brainerd Board of Directors on February 27, 1995.

Pursuant to the terms of a letter agreement, dated December 24, 1994
(the "Engagement Letter"), for Century Capital's services in connection
with the Merger, including the rendering of its opinion, Brainerd has paid
Century Capital $75,000. Brainerd has also agreed to reimburse Century
Capital for all reasonable out-of-pocket expenses, including reasonable
fees and expenses of legal counsel, and has agreed to indemnify Century
Capital against certain expenses and liabilities incurred in connection
with its engagement, including liabilities under federal securities laws.
The Century Capital fee is an obligation of Brainerd, and will have no
impact on the consideration to be received by the holders of The Colonel's
Common Stock in connection with the Merger.

Century Capital may, in the ordinary course of its business, actively
trade securities of Brainerd for its own account or for the accounts of
customers and thus may hold long or short positions in such securities at
any time. Century Capital may in the future be considered or employed by
The Colonel's or Brainerd to provide investment banking and securities
brokerage services. These relationships are considered by The Colonel's
and Brainerd, respectively, to be in the ordinary course of business and to
be immaterial to Century Capital's engagement relative to the Merger.

Valuation Techniques Used by Financial Adviser

The summary below does not purport to be a complete description of
the analysis employed by Century Capital in reaching its opinion. Further,
it is Century Capital's understanding that there were no other proposals other
than the proposed Merger for Century Capital to consider in making a
final determination as to the fairness from a financial point of view to
the shareholders of Brainerd. Century Capital believes that its analysis must
be considered as a whole, and that selecting portions of its analysis and of
the factors considered by Century Capital, without considering all such factors
and analyses, could create a misleading view of the processes underlying
its opinion. Arriving at a fairness opinion is a complex analytical process
and not necessarily susceptible to partial analysis or summary description.

Analysis of Publicly Traded Auto Parts Manufacturers. Century Capital
analyzed the recent financial and stock market performances of selected
publicly traded automobile parts manufacturing companies including the
following (the "C Comparables"): Bailey Corp., Echlin, Inc., Hastings

27
Manufacturing Company, Lund International Holdings, Inc., Mascotech, Inc.,
R & B, Inc., Republic Automotive Parts, Inc., Standard Products Co., Stant
Corp., Superior Industries Intl., and Universal Manufacturing, Inc. The
C Comparables were deemed most comparable because they manufactured components
for automobiles or trucks, supplied the aftermarket, had a wide range
of capitalizations, and had readily available financial data that provided
for comparison. Century Capital based its comparable company analysis on
financial statements prepared in accordance with generally accepted
accounting principles ("GAAP") focusing on revenues, earnings and other
measures of profitability, and considered multiples based on enterprise value
(the sum of the market value of equity and book value of preferred stock plus
debt, less cash) (i) to revenues, (ii) to EBITDA (earnings before interest,
taxes, depreciation and amortization), and (iii) to EBIT (earnings before
interest and taxes), and of stock price (i) to earnings per share, and (ii) to
book value.

For the C Comparables as a group, the analysis yielded a range of
multiples of enterprise value (i) to revenues of .22x to 2.67x, (ii) to EBITDA
of 5.12x to 16.01x, and (iii) to EBIT of 6.11x to 21.58x. It also yielded a
range of multiples of stock price (i) to earnings per share of 9.98x to 16.07x,
and (ii) to book value of .99x to 4.01x. As noted above, the comparable
results for the Colonel's yielded multiples of enterprise value to (i) revenues
of 1.83x, (ii) to EBITDA of 6.0x, and (iii) to EBIT of 11.87x, and of stock
price (i) to earnings per share of 11.75x, and (ii) to book value of
2.41x. Incident to its analysis, Century Capital considered the range of the
C Comparables ratios and the Colonel's ratios in addition to other data.

Valuing the proposed Merger required consideration of Brainerd's stock
value, taking into account the market for, float, availability and price
thereof. The lack of float and stock speculation surrounding the announcement
of the proposed Merger generated market valuations and multiples for Brainerd
that were flawed and unsupportable, necessitating analysis beyond the
market. Therefore, Brainerd was also analyzed independently considering the
recent financial and stock market performances of selected public companies
deemed comparable. Century Capital also considered other qualitative data
in determining a range of equity and enterprise values and per share prices
for Brainerd. The comparables for Brainerd were the following (the
"B Comparables"): Bay Meadows Operating Co., Churchill Downs, Inc., Int'l
Speedway Corp., Int'l Thoroughbred Breeders, Inc. and Turf Paradise, Inc. The
B Comparables were deemed most comparable as they were entertainment
facilities, were outdoor venues, typically single purpose, had a wide range
of capitalizations, and had readily available financial data that provided
for comparison. There existed only one comparable in the motorsport business
as Brainerd. Century Capital based its comparable company analysis on
financial statements prepared in accordance with GAAP focusing on
revenues, earnings and other measures of profitability, and considered
multiples based on enterprise value (the sum of the market value of equity and
book value of preferred stock plus debt, less cash) (i) to revenues, (ii) to
EBITDA (earnings before interest, taxes, depreciation and amortization), and
(iii) to EBIT, and of stock price (i) to earnings per share and (ii) to book
value.
28
For the B Comparables as a group, the analysis yielded a range of
multiples of enterprise value (i) to revenues of .71x to 3.29x, (ii) to EBITDA
of 8.52x to 16.36x, and (iii) to EBIT of 9.93x to 21.05x. It also yielded a
range of multiples of stock price (i) to earnings per share of 16.17x to
31.56x, and (ii) to book value of .44x to 19.42x. As noted above, the
comparable results for Brainerd yielded multiples of enterprise value to
(i) revenues of .84x, to (ii) EBITDA of 5.71x, and to (iii) EBIT of 11.68x, and
of stock price (i) to earnings per share of 50.64x, and (ii) to book value of
.66x. Incident to its analysis, Century Capital considered the range of the
B Comparables ratios and the Brainerd ratios in addition to other data.

The above analysis of the comparable public companies indicated that for
the Colonel's a range of enterprise values of $45,857,889 to $143,395,470,
and equity values of $40,104,630 million to $64,104,630 million, was within
the range of transaction values and multiples derived from analyzing the B and
C Comparables.

Discounted Cash Flow Analysis. Century Capital also prepared a
discounted cash flow valuation analysis of The Colonel's to analyze
the transaction. This analysis was based on certain operating and
financial assumptions for The Colonel's based on discussions with management.
In valuing cash flow, the projected free cash flow (EBITDA), together with
the expected terminal value of the company (EBITDA for the terminal year
multiplied by a multiple to create a terminal asset value) were discounted to
their respective present values using various terminal values and discount
rates. Using discount rates of 20% to 40% applied to yearly cash flows and a
1999 terminal value multiples of 5 to 8 applied to EBITDA, The Colonel's
equity values ranged from $29,194,828 to $73,016,887. Century Capital
also compared projected cash flow for 1995 utilizing EBITDA terminal values of
5 to 7, discounted one year by 25% to normalize the analysis. Using this
approach, equity valuations based on cash flow ranged from $43,838,973
to $62,663,969. The foregoing fell within an acceptable range of values
considered by Century Capital.

Century Capital also determined that independent of the B Comparables
and based on cash flows, terminal values and EBITDA multiples under
normalized market conditions, Brainerd had a range of enterprise values
of $1,796,305 million to $2,155,566 million, equity valuations ranging
from $1,275,653 to $1,634,914 million, and based thereon, per share values
ranging from $1.88 to $2.41. Century Capital relied on management's
assessment that Brainerd's future performance would parallel its historical
results. Based on the foregoing, a normalized share price of $2.01 for
Brainerd stock was considered as reasonably within a range of supportable
values in quantifying the exchange of shares, which also approximates the
share price prior to announcement of the Merger and is further supported when
compared to the price paid by Mr. Williamson for the controlling block of
stock (71.9%) in Brainerd.

Contribution Analysis. Century Capital compared the post-merger ownership
of the combined companies to the pro forma financial results of the combined

29
entity using various measures of performance, including revenues, net income,
total assets, and stockholder's equity. The effect of net operating loss
carry-forwards, if any, and costs of the Merger were eliminated in the analysis.
Century Capital's financial analysis indicated that holders of Brainerd stock
would realize an accretion to per share earnings of $.11 for 1994 and an
accretion to per share earnings of $.22 in 1995 should projections be
realized. Further analysis reflected that future increases in net income, and
additions to retained earnings and total assets would be derived primarily from
earnings projected to be earned by The Colonel's.

No company included in the above analysis is identical to either Brainerd
or The Colonel's, respectively. The analysis involved complex considerations
and judgments concerning differences in operating and financial characteristics
of publicly traded companies and other factors that could affect the companies
comprising the B and C Comparables, respectively. The summary listed above is
a general description of the material elements of the procedures followed,
factors considered, and assumptions made by Century Capital in rendering its
opinion. Because the summary does not address each factor considered by Century
Capital, it should not be considered a full analysis of all matters considered
by the opinion.

The Colonel's Reasons for the Merger

The Board of Directors of The Colonel's has determined that the Merger
would be in the best interests of The Colonel's and its shareholders for
the following reasons:

(1) The Merger will provide The Colonel's increased access to the
public market to obtain capital as required to fund continuing
operations and any future expansion;

(2) The Merger will enhance The Colonel's ability to undertake future
business combinations or acquisitions through the registration and
issuance of additional publicly traded shares as part or all of the
consideration in such business combinations or acquisitions;

(3) The Merger will achieve certain operating efficiencies and cost
savings as the result of a consolidated board of directors,
management, accounting and public reporting for The Colonel's as a
subsidiary of Brainerd; and

(4) The Merger may benefit The Colonel's and distributors of its
products through the affiliation of The Colonel's with the Brainerd
International Raceway and the nationally recognized and professionally
sanctioned racing events held at the Brainerd International Raceway.

The Colonel's Board of Directors believes that each of the foregoing
reasons for the Merger will benefit the long-term best interests of both
The Colonel's and its shareholders by converting the unregistered capital
stock of The Colonel's into publicly traded stock. There can be no

30
assurance that any of the anticipated benefits considered by The Colonel's
Board of Directors or listed in the foregoing reasons for the Merger will
materialize and it is possible that the Merger could have adverse
consequences to both The Colonel's and its shareholders. See "RISK
FACTORS." The foregoing discussion summarizes the material reasons for the
Merger considered by The Colonel's Board of Directors and does not
represent the degree of importance assigned by the board or any individual
directors to any of the specific reasons for the Merger. For a discussion
of the interests of certain members of the management and the Board of
Directors of The Colonel's in the Merger, see "CERTAIN TRANSACTIONS."

Basis and Methodology of Determining Exchange Ratio

The exchange ratio of approximately 3.903 shares of Brainerd Common
Stock for each share of The Colonel's Common Stock was proposed to Brainerd
by the shareholders of The Colonel's and approved by the members of the
Brainerd Board of Directors other than Mr. Williamson and Lisa Morrow, the
daughter of Mr. and Mrs. Williamson. The process of proposing and
approving the exchange ratio essentially involved a determination as to the
relative values of The Colonel's and Brainerd based on their respective
abilities to generate net income.

In formulating their final offer to the Brainerd Board of Directors, the
Williamsons' working conclusion from the companies' respective financial data
was that Brainerd had a capacity to generate annual net income of approximately
$170,000 and that The Colonel's had a capacity to generate annual net income
of approximately $6,000,000 or roughly 35 times the earning capacity of
Brainerd. Applying the 35-to-1 net income ratio to the 677,830 shares of
Brainerd Common Stock currently outstanding indicated the shareholders of The
Colonel's should receive 23,724,050 shares of Brainerd in exchange
for their shares of The Colonel's. The actual number of shares proposed
to be issued was reduced to 23,500,000 shares.

More specifically, the proposed exchange ratio of approximately 3.903
shares of Brainerd Common Stock for each share of The Colonel's Common Stock
was arrived at by the shareholders of The Colonel's following a four step
analysis. This basic analysis was applied by The Colonel's in formulating its
proposal to Brainerd for the Merger transaction.

(1) First, The Colonel's was valued as an on-going, private business,
using its audited annual financial statements for 1990 through 1993 and its
year to date statements for 1994. Its pre-tax net income was set at
$6 million annually and the resulting projected income stream was
capitalized using a multiple of 8.5. Shareholders of The Colonel's
believed that The Colonel's past performance supports the estimated income
level, because its net income from operations calculated in accordance with
GAAP had exceeded $6 million in two of the three years before its June 1,
1993 fire. While The Colonel's net income was significantly higher than
$6 million in 1993 and 1994 ($7,762,206 and $10,887,714 respectively),
those totals include gain recognized to the extent that the cost of

31
replacement assets purchased with fire insurance proceeds exceeded the net
book value of the destroyed assets they replaced. The combined total of
income from operations ($1,860,853) and partial reimbursement from lost
"Business Income and Extra Expenses" insurance coverage ($7,928,666) was
$9,789,519 for the years 1993 and 1994. That two year total would yield
net income of $4,894,759 per year if divided equally. Losses from
operations of $541,052 in 1993 and income from operations of $2,401,905 in
1994 suggested that more of the lost business income insurance proceeds of
$7,928,666 should be allocated to 1993 than to 1994. The multiple of 8.5
was the midpoint of 7 to 10 typically applied to industries similar to The
Colonel's. As a conservative measure, the resulting calculation ($6 million
x 8.5) was rounded down from approximately $51 million to $50 million.

(2) Next, that same method was used to capitalize Brainerd's
pre-tax income from operations, which had been estimated by The Colonel's
as $170,000. The estimated annual earnings of $170,000 for Brainerd was
based upon estimated 1994 earnings of Brainerd (subsequently determined
to be $170,181 for 1994). The same multiple of 8.5 was used, rather
than the lower (5-7) multiples typically employed in valuing a company
in the motor sports industry.

(3) Next, the value for Brainerd suggested by the capitalization of
income method was compared to the value suggested by multiplying
Brainerd's 677,830 outstanding shares by $2.00 per share, which was
the highest price obtained for the stock during the twelve-month period
ending on September 11, 1994, the day before Donald J. Williamson
purchased 487,080 shares of Brainerd Common Stock from Gene M. Snow and
James W. Littlejohn. Valuing Brainerd through a capitalization of
income approach that employed an 8.5 multiple produced a value for
Brainerd of $1,445,000 which was $89,340 higher than the $1,355,660
value suggested by multiplying the number of outstanding shares by the
highest per share sale price realized in the year before announcement of
the proposed merger.

(4) Using the suggested values of $50,000,000 for The Colonel's and
$1,445,000 for Brainerd yielded aggregate values of $8.30 per share for
The Colonel's 6,021,000 outstanding shares and $2.13 per share for
Brainerd's 677,830 outstanding shares. Those amounts suggested an
exchange ratio of 3.90 shares of Brainerd stock for each share of
The Colonel's stock.

In submitting the proposal to have The Colonel's be acquired by
Brainerd in exchange for 23,500,000 shares of Brainerd, the Williamsons
and representatives of The Colonel's did not disclose to the Brainerd Board
or to Century Capital the specific methodology used in arriving at the
terms of the proposal or of their earnings estimates for The Colonel's.
In accepting the proposal at its February 27, 1995 meeting, the Brainerd Board
considered Century Capital's opinion that the proposed exchange ratio was fair
to Brainerd and carefully reviewed the analysis of Century Capital included in
the fairness opinion. As part of its analysis of the fairness of the proposal,

32
Century Capital reviewed and considered the audited financial statements for The
Colonel's for the years 1991, 1992 and 1993 and interim financial statements for
The Colonel's for the eleven month period ending November 30, 1994.

The 1993 operating statement for The Colonel's provided to the
Brainerd Board and Century Capital included a $9,043,282 gain on an insur-
ance settlement for fire damage. The 1994 interim financial statements
provided to Century Capital did not reflect the $9,081,662 gain reflected
in the audited financial statements for 1994 as the final settlement had
not occurred at the time the interim statements were provided to Century
Capital. The final insurance settlement was described to the Brainerd Board at
its February 27, 1995 meeting before it voted to recommend accepting the
Williamsons' offer.

During the Brainerd Board's formal examination of the Williamsons' offer
at its February 27, 1995 meeting, the Brainerd Board questioned the Williamsons
and The Colonel's representatives about how the fire insurance proceeds had
been treated in the 1993 and interim 1994 financial statements and the basis
for any assumptions they had made about what those years' operating results
would have been "but for" the June 1, 1993 fire. The representatives responded
by expressing their opinion, based on a comparison of the 1993 sales results
before the June 1, 1993 fire with past years' comparative figures, that the
actual operating results for that period would have been higher than the
compromise estimates arrived at with the insurance company. The Brainerd Board
was also provided the opportunity to inspect the Milan facility and observe its
operations.

In addition to the fact that The Colonel's net income exceeded $6 million
two out of three years preceding the fire in June of 1993, other factors were
considered by The Colonel's shareholders in determining the annual net
income of The Colonel's for purposes of calculating the proposed exchange
ratio. By annualizing the operating results for January 1 through
April 30, 1993 (the June 1, 1993 fire destroyed the accounting records
prior to completion of the May 1993 operating statements), The Colonel's would,
on a pro forma basis, have had sales of $32,423,057 and net pre-tax income of
$6,678,051 in 1993. Since the June 1, 1993 fire, The Colonel's has consolidated
its operations at its facility in Milan, Michigan which, while it commenced
production in December 1993, did not achieve full operation until August 1994.
In establishing the Milan facility, The Colonel's has applied the insurance
proceeds and cash flow from operations to replace older, less efficient
equipment destroyed in the fire with newer more efficient equipment and has
utilized a more efficient layout including an improved paint line and materials
handling system. Additionally, The Colonel's has used insurance proceeds and
cash flow from operations following the fire to acquire molds to permit it to
currently manufacture a total of approximately 409 bumper applications compared
to the approximately 361 bumper applications manufactured at the time of the
fire.

In approving the issuance of 23,500,000 shares in connection with the
acquisition of The Colonel's, the Board of Directors of Brainerd considered

33
the market prices for Brainerd Common Stock which existed subsequent to the
September 1994 purchase of a controlling interest in Brainerd by Donald J.
Williamson and the announcement of the possible consolidation of Brainerd
and The Colonel's. While those trading values were considered, the
Brainerd Board of Directors determined that they were not reflective of
the true value of Brainerd and were attributable to the limited number of
shares available for purchase and speculation concerning the completion of
the acquisition of The Colonel's. At the time of Mr. Williamson's acquisi-
tion of Brainerd Common Stock in September 1994, there were approximately
180,150 shares in the "public float." In the twelve months preceding that
acquisition, there had been extremely limited trading of Brainerd Common
Stock at prices substantially less than those that existed after Mr.
Williamson's purchase.

Stock Purchase Agreement Between Mr. Williamson
and Mr. Mott

Donald J. Williamson and Charles Mott are parties to a Stock Purchase
Agreement dated April 6, 1995. Pursuant to the Agreement, Mr. Williamson
sold 420,000 shares of Brainerd Common Stock to Mr. Mott for a purchase
price of $2.26 per share, the same price Mr. Williamson paid for the
shares. The purchase price for the shares sold by Mr. Williamson to Mr.
Mott is payable pursuant to the terms of an Installment Promissory Note
dated April 6, 1995 in the principle amount of Nine Hundred Forty Nine
Thousand Two Hundred Dollars ($949,200). The Installment Promissory Note
bears interest on the unpaid balance at the rate of seven percent (7%) per
annum and is unsecured. The Installment Promissory Note requires equal
monthly payments of principle and accrued interest in the amount of Eleven
Thousand Twenty One Dollars and Two Cents ($11,021.02) beginning May 1,
1995 until all amounts due under the note are paid in full.

Mr. Williamson and Mr. Mott have advised Brainerd that they have no
agreement, arrangement or understanding regarding any repurchase by Mr.
Williamson of the shares of Brainerd Common Stock sold to Mr. Mott at any
time in the future. The Stock Purchase Agreement and the Installment
Promissory Note between Mr. Williamson and Mr. Mott contain no puts, calls
or other provisions of any nature relating to any repurchase by Mr.
Williamson of shares sold to Mr. Mott. Additionally, Mr. Williamson and
Mr. Mott have advised Brainerd that there is no agreement, arrangement or
understanding between them with respect to voting any of the shares sold by
Mr. Williamson to Mr. Mott on any matter that may be presented to Brainerd
shareholders, including any of the proposals set forth in this Proxy
Statement. Mr. Mott has advised Mr. Williamson and Brainerd that his
purchase of Brainerd Common Stock from Mr. Williamson is for personal
investment purposes only and not for any specific purpose of distribution
or resale.

34
Background Concerning Charles Mott

Charles Mott is a 74-year-old single man, who has resided in Genesee
County, Michigan with his brother William since 1921. Mr. Mott is a locally
well-known antiques dealer and real estate investor, who served for a period
of time on the Mount Morris, Michigan School Board. He is one of Genesee
County's largest individual land holders. Mr. Mott has provided financial
loans and business counsel to a number of independent Flint, Michigan
area businessmen over the last forty years. He made several key loans to
Donald J. Williamson and Patsy L. Williamson in the 1980s, when the
Williamsons were starting The Colonel's bumper business. Those loans have
been fully repaid. Mr. Mott has never held any equity positions in any of
the Williamsons' businesses prior to purchasing stock in Brainerd in April,
1995. Other than the shares of Brainerd Common Stock owned by Mr. Mott,
he maintains no other form of affiliation with either The Colonel's or Brainerd
or any of the directors or executive officers of either.

While Mr. Mott is under no commitment to vote in favor of the
contemplated Merger, it is anticipated that he will do so. If and when
the resulting Merger occurs, the percentage of Brainerd outstanding Common
Stock represented by Mr. Mott's 420,000 shares will immediately shrink from
62 percent to 1.7 percent.

Shareholder Vote Required to Approve the Proposal

The affirmative vote of the holders of a majority of shares of
Brainerd Common Stock present in person or by proxy and voting on this
proposal is required for Brainerd shareholders to approve the Merger
proposal. Brainerd has been informed by Donald J. Williamson, who is the
holder of approximately 9.9% of the shares of Brainerd Common Stock entitled
to vote, that he intends to vote his shares in favor of the Merger. For
purposes of counting votes on this proposal, abstentions will effectively
be treated as votes against the proposal and broker non-votes will not be
counted as voted on the proposal, and the number of shares of which a
majority is required will be reduced by the number of broker non-votes.
The shares represented by proxies received from Brainerd shareholders and
The Colonel's shareholders will be voted FOR approval of the Merger unless a
vote against the proposal is specifically indicated in the proxy.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN
FAVOR OF THE MERGER

Material Federal Income Tax Consequences

Brainerd has obtained an opinion from its legal counsel, Frommelt &
Eide, Ltd., concerning the material federal income tax consequences of the
proposed Merger (the "Tax Opinion"). The following is a summary of the
material conclusions set forth in the Tax Opinion with respect to the
proposed Merger. No ruling has been or is expected to be requested from

35
the Internal Revenue Service ("IRS") as to the tax consequences of such
merger. Since no ruling has been obtained, no assurance can be given that the
IRS will agree with the conclusions set forth in the Tax Opinion or that
a challenge by the IRS, if made, will not be successful.

The Merger will qualify for federal income tax purposes as a
reorganization within the meaning of Section 368 of the Code. Shareholders
of The Colonel's will not recognize gain or loss upon receipt of Brainerd
Common Stock in exchange for their shares of The Colonel's Common Stock.
The aggregate basis of Brainerd Common Stock received by shareholders of
The Colonel's will be the same as the aggregate basis of the shares of The
Colonel's Common Stock exchanged therefor. The holding period of the
Brainerd Common Stock received by shareholders of The Colonel's will
include the period during which the shares of The Colonel's Common Stock
surrendered in exchange therefor were held, provided that The Colonel's
Common Stock surrendered was held as a capital asset at the time of the
Merger.

It is not possible to predict whether future changes to the tax law
will be enacted, the final form of any such changes if enacted, and the
effect of any such changes on the ownership and disposition of Brainerd
Common Stock.

Currently The Colonel's is treated as an S corporation for federal
income tax purposes, meaning all items of income, gain, loss, deduction,
and credit, if any, for The Colonel's are taxed directly to shareholders on
a pro rata basis determined in proportion to the percentage of issued and
outstanding shares of Colonel's Common Stock owned by each shareholder.
Immediately upon effectiveness of the Merger, The Colonel's election to be
treated as an S corporation for federal income tax purposes will
automatically terminate by operation of law because The Colonel's will
become a wholly owned subsidiary of another corporation. Following
effectiveness of the Merger, The Colonel's will be treated as a C
corporation for federal income tax purposes, meaning all items of income,
gain, loss, deduction, and credit, if any, will be taxed directly to The
Colonel's and will not be passed through to its shareholders and
distributions to shareholders will be treated as dividends to the extent of
current and accumulated earnings and profits. Following completion of the
Merger and Reincorporation, it is anticipated that The Colonel's will file
federal income tax reports on a consolidated basis with The Colonel's
Holdings and its subsidiaries.

The above discussion summarizes the material federal income tax
consequences of the Merger for shareholders of The Colonel's who, pursuant
to the Merger, exchange shares of the Colonel's Common Stock for Brainerd
Common Stock. However, no ruling has been or will be requested from the
IRS as to the qualification of the Merger as a reorganization under 368 of
the Code or as to any other matters.

36
The Merger is not anticipated to have any tax consequences for
shareholders of Brainerd.

THE MERGER AGREEMENT

The following describes the material terms of the Merger Agreement.
The description of the Merger Agreement and the transactions contemplated by
the Merger Agreement contained in this Proxy Statement are qualified in their
entirety by reference to the Merger Agreement, the full text of which is
attached to this Proxy Statement as Appendix A and is incorporated by reference
herein.

The Merger

At the Effective Time, each share of The Colonel's Common Stock then
issued and outstanding will be converted into and represent the right to
receive approximately 3.903 shares of Brainerd Common Stock. As a result
of the Merger, Brainerd will become the holder of all of the outstanding
common stock of The Colonel's, and The Colonel's will become a wholly owned
subsidiary of Brainerd.

After consummation of the Merger, present holders of The Colonel's
Common Stock will possess no interest in, or rights as shareholders of The
Colonel's. A discussion of the instruments governing the rights of
shareholders of Brainerd following the Reincorporation and the corporate
laws of Michigan is contained in "PROPOSAL II: REINCORPORATION OF
BRAINERD."

The Effective Time

The Merger of Brainerd Merger Corporation, a wholly owned subsidiary
of Brainerd, with and into The Colonel's will become effective upon the
filing of a certificate of merger with the Secretary of State of Michigan.
It is currently anticipated that the filing of the certificate of merger
will be made as promptly as practicable following the adoption of the
Merger Agreement by shareholders of Brainerd and The Colonel's. Such
filing will be made, however, only upon the satisfaction or waiver, where
permissible, of the other conditions to consummation of the Merger.

Exchange of Stock Certificates

The Secretary of Brainerd will administer the exchange of The
Colonel's Common Stock certificates for Brainerd Common Stock certificates
in connection with the Merger. As soon as practicable after the Effective
Time, the shareholders of The Colonel's will surrender all certificates
representing shares of The Colonel's Common Stock to the Secretary of
Brainerd in exchange for certificates representing shares of Brainerd
Common Stock. Upon surrender to the Secretary of Brainerd of certificates

37
representing shares of The Colonel's Common Stock, together with such duly
executed instruments as may be required to evidence the transfer and
cancellation of such certificates, the holders of such certificates will be
entitled to receive in exchange therefor certificates representing a number
of shares of Brainerd Common Stock to which such holder will have become
entitled pursuant to the Merger Agreement, and all surrendered certificates
representing shares of The Colonel's Common Stock will promptly be
canceled.

No holder of The Colonel's Common Stock will be entitled to receive
dividends or other distributions, if any, on Brainerd Common Stock until
surrender of such holder's certificates representing The Colonel's Common
Stock for one or more certificates representing shares of Brainerd Common
Stock.

If any certificate for shares of Brainerd Common Stock is to be issued
in a name other than that in which the certificate representing shares of
The Colonel's Common Stock surrendered in exchange therefore is registered,
the holder requesting such issuance shall be required to pay any transfer
or other taxes required by reason of the issuance of certificates for such
shares or to establish to the satisfaction of Brainerd that such taxes have
been paid or are not applicable.

Conditions to the Merger; Waiver and Amendment

The respective obligations of the parties to the Merger Agreement to
effectuate the Merger are subject to the satisfaction of certain conditions
including: (i) the adoption of the Merger Agreement by the shareholders of
Brainerd and both shareholders of The Colonel's; (ii) adoption by the
shareholders of Brainerd, and the filing by Brainerd of the restated
Articles of Incorporation to change the name of the corporation to The
Colonel's Holdings, Inc. and in order to increase to 35,000,000 the number
of authorized shares of Brainerd Common Stock; (iii) adoption by the
shareholders of Brainerd of the proposal to transfer all of the operating
assets of Brainerd to Brainerd International Raceway, Inc., a wholly owned
subsidiary of Brainerd; (iv) no action taken or order issued by a court
that would prohibit the Merger or which would limit or affect Brainerd's
ownership of The Colonel's; (v) no action having been taken by any
government or by any governmental agency preventing the consummation of the
Merger or making the Merger illegal; (vi) the performance by the parties
in all material respects of their respective obligations under the Merger
Agreement, and the correctness in all material respects of the parties'
respective representations and warranties contained therein; and (vii)
delivery of certain closing certificates and opinions of counsel. See
"PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT."

The parties to the Merger Agreement may: (i) extend the time of
performance of the others' obligations or other acts; (ii) waive any
inaccuracies in the representations and warranties of the other parties
contained in the Merger Agreement or in any document delivered pursuant

38
thereto; and (iii) waive the other parties' compliance with any agreements
and certain conditions contained in the Merger Agreement.

The parties to the Merger Agreement may amend the Merger Agreement
before or after its adoption by the shareholders of Brainerd and The
Colonel's, but after shareholder approval no amendment may be made that
changes the amount or type of the consideration payable to the holders of
The Colonel's Common Stock, without the further approval of the
shareholders of The Colonel's. Additionally, if any material amendments
to the terms of the Merger Agreement are proposed following the time that
the Merger is approved by Brainerd shareholders, Brainerd will advise
Brainerd shareholders of the amendments and will resolicit Brainerd
shareholders for approval of the Merger upon the revised terms.

Termination

The Merger Agreement will be terminated if not approved by the
shareholders of Brainerd and The Colonel's and may be terminated prior to
the Effective Time before or after approval by the shareholders of Brainerd
and The Colonel's by: (i) mutual agreement of the Boards of Directors of
Brainerd and The Colonel's; (ii) either Brainerd or The Colonel's if the
Merger has not been effected on or prior to December 30, 1995; or
(iii) either Brainerd or The Colonel's, if there has been a material
misrepresentation or a material breach in the representations, warranties,
or covenants of the other party.

The Merger Agreement permits the parties to waive certain conditions
to their respective obligations without further approval by the
shareholders of Brainerd or The Colonel's. Accordingly, the respective
parties are authorized to elect not to terminate the Merger Agreement even
if the requirements or conditions described above are not met or complied
with at or before the Effective Time.

Conduct of Business Prior to the Merger

Each of Brainerd and The Colonel's has agreed to conduct its business
prior to the Merger in the ordinary and usual course and in a manner
consistent with past practice.

Accounting and Tax Treatment

It is anticipated that the Merger will be accounted for as a purchase
with The Colonel's as the acquirer for accounting and financial reporting
purposes. Following the Merger, it is currently intended that the results
of operations of The Colonel's will be included in the consolidated tax
returns of The Colonel's Holdings.

Resales

All shares of The Colonel's Holdings Common Stock received by The
Colonel's shareholders in the Merger will be restricted stock subject to
39
the provisions of Rule 144 under the Securities Act, including holding
periods and quantity limitations. Shares of The Colonel's Holdings Common
Stock received by persons who are deemed to be affiliates of The Colonel's
Holdings after the Merger may be resold only in transactions permitted by
Rule 144 promulgated under the Securities Act or as otherwise permitted
under the Securities Act. Upon completion of the Merger as proposed, the
two recipients of The Colonel's Holdings Common Stock issued in connection
with the Merger, Donald J. Williamson and Patsy L. Williamson, would be
deemed to be affiliates of The Colonel's Holdings.

Expenses

Except as provided otherwise below, all costs and expenses incurred in
connection with the Merger, regardless of whether or not consummated, are
to be paid by the party incurring such expenses, it being agreed that costs
for printing this Proxy Statement, and all amendments and exhibits hereto are to
be shared equally by Brainerd and The Colonel's.

RIGHTS OF DISSENTING SHAREHOLDERS

The following describes material provisions of the law pertaining to
appraisal rights under the Minnesota Business Corporation Act (the "MBCA").
The full text of Sections 302A. 471 and 302A. 473 of the MBCA is attached to
this Proxy Statement as Appendix C and is incorporated by reference herein. Any
shareholder of Brainerd who wishes to exercise such appraisal rights or who
wishes to preserve his or her right to do so should review the following
discussion and Appendix C carefully because failure to timely and properly
comply with the specified procedures will result in the loss of appraisal rights
under the MBCA. It is a condition of the Merger Agreement that both
shareholders of The Colonel's approve the Merger meaning neither
shareholder of The Colonel's will be entitled to exercise any dissenters'
rights.

Procedure to Preserve Dissenters' Rights

Under Minnesota law, any Brainerd shareholder who follows the
procedures set forth in Section 302A.473 of the MBCA will be entitled to
receive payment in cash of the "fair value" for all such shareholder's
shares. The amount of such cash payment may be more or less than the amount
a Brainerd shareholder may receive as a result of the sale of their shares
prior or subsequent to the completion of the Merger.

Under Section 302A.473 of the MBCA, if a corporation calls a shareholder
meeting at which approval or action to be taken by such corporation is to be
voted upon by the shareholders and the corporation's Articles, By-Laws or a
resolution adopted by the Board of Directors of the corporation directs that
dissenting shareholders may obtain payment for their shares, the notice of the
meeting must inform each shareholder of the right to dissent and must include a

40
copy of Section 302A.471 and Section 302A.473 of the MBCA and a brief
description of the procedure to be followed under such sections. This Proxy
Statement constitutes such notice to the shareholders of Brainerd and the
applicable statutory provisions of the MBCA are attached as Appendix C.
Although Brainerd does not believe that the MBCA requires either shareholder
approval or dissenters' rights in connection with the Merger proposal, the
Brainerd Board of Directors voted to submit the Merger proposal for shareholder
approval and to grant Brainerd shareholders dissenters' rights in connection
with the Merger proposal.

The Merger Agreement must be approved by the holders of a majority of
the votes voted in person or by proxy at the Brainerd Meeting. Any
shareholder who wishes to exercise dissenters' rights must file with
Brainerd before the vote on the Merger Agreement a written notice of intent
to demand the fair value for all of the shares owned by such shareholder and
must not vote any of his or her shares in favor of the Merger Agreement.
THE SHAREHOLDER NEED NOT VOTE AGAINST THE MERGER AGREEMENT. The notice of
intent to demand payment of the fair value of the shares is to be sent to the
attention of Gary Moore, Chief Executive Officer, Brainerd International,
Inc., 17113 Minnetonka Boulevard, Suite 214, Minnetonka, Minnesota 55345.

As used in this section regarding dissenters' rights, "the corporation"
refers to Brainerd and "fair value" of dissenting shares means the value of
Brainerd Common Stock immediately before the Merger is effected.

After the Merger Agreement has been approved by the shareholders,
Brainerd must send a written notice to all of its shareholders who have not
voted their shares in favor of the Merger Agreement and have delivered a
written notice of intent to demand the fair value of the shares owned by
such shareholder. The notice must contain: (i) the address to which a
demand for payment and certificates of certified shares must be sent in
order to obtain payment and the date by which they must be received;
(ii) any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received; (iii) a form to be used to
certify the date on which the shareholder, or the beneficial owner on whose
behalf the shareholder dissents, acquired the shares or an interest in them
and to demand payment; and (iv) a copy of Sections 302A.471 and 302A.473
and a brief description of the procedures to be followed under such
sections.

In order to receive the fair value of the dissenting shares, a
dissenting shareholder must demand payment and deposit certificated shares
or comply with any restrictions on transfer of uncertificated shares within
30 days after the notice was given, but the dissenter retains all other
rights of a shareholder until the Merger is effected.

A shareholder may not assert dissenters' rights as to less than all of
the shares of Brainerd Common Stock registered in the name of the
shareholder, unless the shareholder dissents with respect to all the shares
that are beneficially owned by another person but registered in the name of

41
the shareholder and discloses the name and address of each beneficial owner
on whose behalf the shareholder dissents. In that event, the rights of the
dissenter will be determined as if the shares as to which the shareholder
has dissented and the other shares were registered in the names of different
shareholders.

A beneficial owner of shares who is not the shareholder of record may have
the record owner assert dissenters' rights on behalf of such beneficial owner
or the beneficial owner may assert the dissenters' rights on the shareholder's
own behalf. If the shareholder of record asserts the rights on behalf of
beneficial owners, the shareholder of record must disclose to the corporation
the identity and address of each beneficial owner on whose behalf the
shareholder of record is dissenting. If the beneficial owner asserts
dissenters' rights on the beneficial owner's own behalf, the shareholder of
record must provide to the corporation the shareholder of record's written
consent to the beneficial owner's assertion of such rights. Procedures
Following an Assertion of Dissenters' Rights

After the Merger or after Brainerd receives a valid demand for payment,
whichever is later, Brainerd must remit to each dissenting shareholder who has
not voted his or her shares in favor of the Merger Agreement, and has filed with
the corporation before the vote on the Merger Agreement a written notice of
intent to demand the fair value of the shares owned by such shareholder, the
amount Brainerd estimates to be the fair value of the shares, plus interest
("interest" commences five days after the effective date of the Merger up to and
including the date of payment, calculated at a rate provided under Minnesota law
for interest on verdicts and judgments), accompanied by: (i) Brainerd's balance
sheet and statement of income for a fiscal year ending not more than 16 months
before the effective date of the Merger, together with the latest available
interim financial statements; (ii) an estimate by Brainerd of the fair value of
the shares and a brief description of the method used to reach the estimate;
and (iii) a copy of Sections 302A.471 and 302A.473, and a brief description
of the procedure to be followed in demanding supplemental payment.

Brainerd may withhold the above-described remittance from a person who
was not a shareholder on the date the proposed Merger was first announced
to the public or who is dissenting on behalf of a person who was not
beneficial owner on that date. If the dissenter has not voted his or her
shares in favor of the Merger Agreement and has filed with the corporation
before the vote on the Merger Agreement a written notice of intent to
demand the fair value of the shares owned by such shareholder, the
corporation must forward to the dissenter the materials described in the
preceding paragraph, a statement of reason for withholding the remittance,
and an offer to pay to the dissenter the amount listed in the materials if
the dissenter agrees to accept that amount in full satisfaction. The
dissenter may decline the offer and demand payment of the dissenters' own
estimate of the fair value of the shares, plus interest, by written notice
to the corporation. Failure to do so entitles the dissenter only to the
amount offered. If the dissenter makes demand, the procedures, costs, fees
and expenses described below for petitioning the court shall apply.

42
If the corporation fails to remit payment within 60 days of the
deposit of certificates or the imposition of transfer restrictions on
uncertificated shares, it must return all deposited certificates and cancel
all transfer restrictions. However, the corporation may require deposit or
restrict transfer at a later time and again give notice that contains:
(i) the address to which a demand for payment and certificates of certified
shares must be sent in order to obtain payment and the date by which they
must be received; (ii) any restrictions on transfer of uncertificated
shares that will apply after the demand for payment is received; (iii) a
form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and (iv) a copy of
Sections 302A.471 and 302A.473 and a brief description of the procedures to
be followed under such sections.

If a dissenter believes that the amount remitted by the corporation is
less than the fair value of the shares plus interest, the dissenter may
give written notice to the corporation of the dissenters' own estimate of
the fair value of shares, plus interest, within 30 days after the
corporation mails the remittance, and demand payment of the difference (a
"Demand"). Otherwise, a dissenter is entitled only to the amount remitted
by the corporation.

If the corporation receives a Demand, it must, within 60 days after
receiving the Demand, either pay to the dissenter the amount demanded or
agreed to by the dissenter after discussion with the corporation or file in
court a petition requesting that the court determine the fair value of the
shares, plus interest. The petition must be filed with the District Court
for Hennepin County, Minnesota. The petition must name as parties all
dissenters who made a Demand for payment and who have not reached agreement
with the corporation. The jurisdiction of the court is plenary and
exclusive. The court may appoint appraisers, with powers and authorities
the court deems proper, to receive evidence on and recommend the amount of
the fair value of the shares. The court must determine whether the
shareholder or shareholders in question have fully complied with the
requirements of Section 302A.473, and must determine the fair value of the
shares, taking into account any and all factors the court finds relevant,
computed by any method or combination of methods that the court, in its
discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The court may, but is not required to, consider the
corporation's market valuation, its book value and the replacement cost
of its assets as well as a capitalization of its earnings in determining
the fair value of the shares. The valuation determined by the court is
binding on all shareholders, wherever located. A dissenter is entitled to
judgment for the amount by which the fair value of the shares as determined
by the court, plus interest, exceeds the amount, if any, remitted by the
corporation, but a dissenter shall not be liable to the corporation for the
amount, if any, by which the amount, if any, remitted to the dissenter
exceeds the fair value of the shares as determined by the court, plus
interest.

43
The court must determine the costs and expenses of any proceeding
described under the preceding paragraph, including the reasonable expenses
and compensation of any appraisers appointed by the court, and must assess
those costs and expenses against the corporation, except that the court may
assess part or all of those costs and expenses against a dissenter whose
Demand is found to be arbitrary, vexatious, or not in good faith.

If the court finds the corporation has failed to comply substantially
with Section 302A.473, the court may assess all fees and expenses of any
experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person, including a dissenting shareholder, who
has acted arbitrarily, vexatiously, or not in good faith in bringing the
proceeding, and may be awarded to a party injured by those actions.

The court may award, in its discretion, fees and expenses to any
attorney for the dissenters out of the amount awarded to the dissenters, if
any.

SELECTED FINANCIAL DATA OF BRAINERD

The selected financial data shown below for Brainerd for each of the
five years in the period ended December 31, 1994, has been derived from
financial statements of Brainerd, which have been audited by Copeland Buhl
& Company P.L.L.P., independent auditors. The following data should be
read in conjunction with the financial statements of Brainerd and related
notes thereto included elsewhere in this Prospectus and "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
BRAINERD." Net earnings per share have been adjusted for all periods
presented to reflect Brainerd's one-for-ten reverse stock split effected
October 9, 1992. Brainerd has never paid any dividends with respect to its
Common Stock.

<TABLE>
<CAPTION>
Years Ended December 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Operations:
Operating revenues . . . . . . . . $2,449,923 $2,097,349 $1,884,936 $1,730,737 $1,580,736
Income (loss) from
continuing operations . . . . . . 234,353 (464,094) 224,446 169,374 (426,175)
Income (loss) before
extraordinary item . . . . . . . 170,181 (510,863) 131,669 68,725 (506,711)
Net income (loss). . . . . . . . . 170,181 (510,863) 228,869 104,225 (506,711)
Earnings (loss) per share:
Continuing operations . . . . . . $0.25 ($1.22) $0.47 $0.25 ($1.87)
Extraordinary item $0.35 $0.13
Net income. . . . . . . . . . . . $0.25 ($1.22) $0.82 $0.38 ($1.87)

44
Financial Condition:
Current assets . . . . . . . . . . 157,055 56,300 146,850 93,931 80,701
Current liabilities . . . . . . . 122,581 254,139 294,753 190,310 438,356
Total assets . . . . . . . . . . . 2,260,614 2,171,938 2,300,633 2,143,589 2,085,704
Long-term obligations . . . . . . 531,845 483,225 649,668 850,936 649,230
</TABLE>

<TABLE>
<CAPTION>
Six
Months
Ended
June 30,
1995 1994
<S> <C> <C>
Operations:
Operating revenues . . . . . . . . $ 481,616 $ 444,099
Income (loss) from
continuing operations . . . . . . (288,388) (408,633)
Income (loss) before
extraordinary item . . . . . . . (295,509) (393,258)
Net income (loss). . . . . . . . . (295,509) (393,258)
Earnings (loss) per share:
Continuing operations . . . . . . (.43) (.58)
Extraordinary item
Net income . . . . . . . . . . . (.43) (.58)

Financial Condition:
Current assets . . . . . . . . . . 408,969 187,978
Current liabilities . . . . . . . 776,626 642,343
Total assets . . . . . . . . . . . 2,615,368 2,278,349
Long-term obligations . . . . . . 525,738 594,690
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BRAINERD

Overview

From the time of its formation in 1982, Brainerd has operated the Brainerd
International Raceway, a motor sports facility located approximately six miles
northwest of Brainerd, Minnesota. Financial Condition: Substantially all of
Brainerd's revenues have been obtained from motor vehicle racing events at
the Current assets raceway. Historically, Brainerd has scheduled racing and
other events to be held at the Brainerd International Raceway during weekends in
the months of May through September Total assets each year; however, Brainerd
conducted a snowmobile racing event during the 1994-1995 New Year's weekend.

45
While Brainerd has scheduled approximately 35 events during each season, a
limited number of major spectator events provide a substantial portion of
Brainerd's revenues, with one event, the Champion Auto Stores Nationals, having
provided 58%, 56%, and 56% of Brainerd's operating revenues for the last three
years. Revenues from the major spectator events are provided from the sale of
admissions to the event, the sale of concessions, and fees paid by spectators
and participants for camping access at the Brainerd International Raceway. The
receipt of such revenues is affected by weather conditions. Even if an event is
not canceled due to rain or other adverse weather conditions, poor weather
conditions will reduce attendance and the sale of concessions.

In addition to spectator-related revenues, Brainerd receives: (i)
sponsorship fees from businesses which promote their products and services
at the Brainerd International Raceway; (ii) entry fees from participants in
the races and other events; and (iii) rent for use of the track for private
racing events, driving schools, and the testing or filming of motor vehicle
operations.

The costs of operations reported in Brainerd's financial statements
reflect the direct expenses incurred in holding events at and the leasing
of the Brainerd International Raceway for events including expenses paid by
Brainerd on behalf of lessees of the Brainerd International Raceway. They
do not include the salaries of Brainerd's four full-time employees, real
estate taxes and other "overhead" types of expenses which are included in
the financial statements as general and administrative expenses.

Beginning in 1988, Brainerd pursued the development of a motor sports
and entertainment facility similar to the Brainerd International Raceway to
be located in southeastern Wisconsin to serve the Chicago-Milwaukee
metropolitan area. Certain of the expenditures made in connection with
pursuing this development were expensed as general and administrative
expenses while other expenditures were capitalized as construction-in-progress.
As of December 31, 1992, Brainerd had capitalized $412,480 as
construction-in-progress. In 1991, Brainerd formed a subsidiary for the
purpose of acting as the developer of a motor sports facility to be located
upon a site which was to be annexed to the Village of Genoa City,
Wisconsin. Until March, 1993, the expenditures by the subsidiary were
funded exclusively by Brainerd. In March, 1993, Brainerd and Gene M. Snow,
then an executive officer, director and principal shareholder of Brainerd,
entered into a Financing Agreement concerning the continued funding of the
development expenses pursuant to which: (i) Brainerd agreed to provide
$3,000 per month during 1993; (ii) Mr. Snow agreed to provide up to
$250,000 in exchange for a 25% interest in the subsidiary; and (iii)
Brainerd agreed to reduce further its equity ownership in the subsidiary to
not less than a 25% interest in connection with obtaining additional
capital. In December 1993, the Brainerd Board of Directors determined to
discontinue the pursuit of the development of a second racing facility.
Brainerd recognized a loss of $462,451 in connection with the
discontinuance of the efforts. See "BUSINESS OF BRAINERD - Attempted
Development of Genoa City Racing Facility."

46
Liquidity and Capital Resources

Brainerd ended 1994 with current assets of $157,055 and current
liabilities of $122,581, for a working capital surplus of $34,474.
Brainerd ended 1993 with a working capital deficit of $197,839. The
significant improvement in working capital can be attributed to improved
operating results in 1994 and the repayment of $104,000 in accounts payable
with proceeds of a new bank loan in February 1994.

The seasonal nature of the operation of the Brainerd International
Raceway creates liquidity issues for Brainerd. Brainerd receives virtually
no revenues from operations during its first and fourth quarters. Brainerd
incurs significant expenses in preparing the Brainerd International Raceway
for the racing season and in promotion of upcoming events beginning in its
first quarter. Brainerd's cash requirements have been met with cash
retained from year to year, payment of sponsorship fees, advance ticket
sales, and payment terms granted by Brainerd's suppliers.

In addition to regular maintenance of the Brainerd International
Raceway, Brainerd from time to time makes capital improvements to the
facility, including the acquisition of additional land and equipment and
the installation of grandstands and other spectator amenities. Under its
lease arrangement with the NHRA for the Champion Auto Stores Nationals
event, the NHRA will reimburse Brainerd for one-half of the cost of making
improvements approved by the NHRA. Brainerd is to receive a $60,000
reimbursement from the NHRA in each of 1995 and 1996 for significant
improvements made in 1993.

In 1993, Brainerd acquired and installed bleachers at a cost of
approximately $330,000 and made approximately $172,500 worth of additional
capital improvements. The cost of the improvements was financed with cash
flow from operations and credit extended by the suppliers of the
improvements. On February 16, 1994, Brainerd refinanced its obligations
due its existing bank with a new bank. Under its credit agreement with the
new bank, Brainerd obtained a $550,000 term loan under which interest
calculated at 2% in excess of a designated bank's prime rate of interest is
payable on a quarterly basis with eleven $50,000 principal payments due
annually beginning September 1, 1994. The credit agreement also provides
Brainerd with a discretionary $300,000 line of credit. The line of credit,
which was subject to the same interest rate as the term loan expired in April
1995 without Brainerd having requested any advances. The bank lender is
currently considering Brainerd's request to have the line of credit
re-extended for an additional twelve months. There is no assurance of
such re-extension or that the bank will permit Brainerd to draw on the
discretionary line of credit. The term loan and line of credit are secured
by substantially all of the assets of Brainerd. Proceeds from the term loan
were applied as follows: (i) $430,055 to satisfy the existing bank
obligations (including $4,570 of accrued interest), (ii) $104,000 to
satisfy the obligations due the bleacher supplier, and (iii) $11,903
to pay closing costs, including a $5,500 loan origination fee.

47
Brainerd's pursuit of the development of a motorsports racing facility
in Wisconsin placed significant demands upon Brainerd's capital and
liquidity. Prior to Brainerd's abandonment of those efforts in December
1993, Brainerd had expended approximately $1,250,000 on the project. The
expenditures were funded with cash flow from operations, loans to Brainerd,
and capital contributions to Brainerd's subsidiary pursuing the project.
The capital contributions and approximately $405,000 in loans to Brainerd
were provided by two individuals, Gene M. Snow and James W. Littlejohn, who
were officers, directors, and principal shareholders of Brainerd at the
time the loans and capital contributions were made. The loans were
advanced by Mr. Snow and Mr. Littlejohn in 1989, 1990, and 1991. The
capital contributions were made by Mr. Snow in 1993. In 1993, Brainerd
issued to Mr. Snow and Mr. Littlejohn 363,782 shares of common stock in
full satisfaction of the principal amounts advanced and approximately
$140,700 of accrued interest.

In March 1991, Brainerd issued a promissory note in satisfaction of
its accounts payable due to a creditor which had provided services related
to Brainerd's efforts to develop a motorsports racing facility in
Wisconsin. The note was in the amount of approximately $115,000 and
required annual payments of $14,000 during the first three years and
monthly payments of $2,000 commencing in January 1994. The note bears
interest at an annual rate of 12 percent and had a balance of approximately
$95,000 remaining as of December 31, 1994.

Projected Future Financial Condition and Operations

As the operations and capitalization of The Colonel's are
substantially larger than that of Brainerd, completion of the Merger will
result in substantial changes in Brainerd's financial condition and
operating results which will be more comparable to the current financial
condition and operating results of The Colonel's. See "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COLONEL'S."

Management expects that Brainerd's existing operations will continue
following the Merger; however, the Brainerd International Raceway and
related assets will be transferred to a wholly owned subsidiary following
the Merger. It is further expected that discontinuance of the expenditures
for the development of a second racing facility and savings on interest
expense is expected to result in operating profits and positive cash flow.
Operating results and cash flow would, however, be materially and adversely
affected if the NHRA does not elect to extend the term of the arrangements
under which the Champion Auto Stores Nationals and two additional drag
racing events are held at the Brainerd International Raceway following
conclusion of the 1996 racing season. See "BUSINESS OF BRAINERD - Events
and Activities."

48
Completion of the Merger and the Reincorporation will require the
consent of Brainerd's bank lender or the repayment of the outstanding
balance of the loan provided by the bank. The principal balance of that
loan is currently $450,000.

Management expects to continue to make regular improvements to the
Brainerd International Raceway which would be funded with operating cash
flows. Potential improvements to the Brainerd International Raceway
include the modification of the road course to permit it to be used either
in its current configuration or as two courses of 2.1 miles and 1.1 miles
in length and the installation of additional restrooms and other spectator
amenities at estimated costs of $400,000 and $100,000, respectively.

If the Merger is not completed, Management expects that Brainerd's
continuing operations will be adequate to fund repayment of its
indebtedness and meet operating expenses. Brainerd will need to make
arrangements for payment of its expenses incurred in connection with
pursuing the Merger; however, Management believes operating revenues will
be adequate to satisfy these extraordinary expenses. Brainerd would also
seek to have its bank lender renew a $300,000 line of credit which Brainerd
has not been required to make use of.

Results of Operations

Year Ended December 31, 1994. Revenues for 1994 were $2,449,923,
representing an increase of $352,574 over the revenues for 1993.
Management attributes the increase to the more favorable weather occurring
in connection with the principal spectator events in 1994. Operating costs
increased by $135,891 over those incurred in 1993; however, operating costs
as a percentage of revenues were only approximately 71.5 percent in 1994
compared to approximately 77 percent in 1993. General and administrative
expenses were decreased by $19,313 resulting in operating income of
$234,353 for 1994 compared to an operating loss of $464,094 in 1993 which
amount included a loss of $462,451 from the discontinuance of efforts to
develop a motorsports racing facility in Wisconsin.

Interest expense of $66,890 for 1994 represented an increase from the
$49,385 paid in 1993. Management attributes the increase to the rise in
the prime rate upon which the interest due on Company's bank debt is based
and the February 1994 increase of the principal amount of the Company's
bank loan from $425,485 to $550,000.

The Company realized net income for 1994 of $170,181 or $0.25 per
share compared to a loss of $510,863 or $1.22 per share in 1993.

Year Ended December 31, 1993. Revenues for 1993 were $2,097,349
representing an increase of $212,413 over the revenues for 1992.
Management attributes the increase to the addition of a sixth principal
spectator event (the Brainerd 300), increased attendance at the NHRA
Champion Auto Stores Nationals event and to increased ticket prices. Costs

49
of operations, however, increased by $388,928 to $1,614,785 in 1993
resulting in a gross profit of $482,564 compared to a gross profit of
$659,079 in 1992. Management attributes the increase to the approximately
$295,000 cost of holding the Brainerd 300 event, which was a new event in
1993, and to costs resulting from rescheduling events which experienced
rain. General and administrative expenses increased by 11.4% to $484,207
in 1993 resulting in an operating loss of $464,094 compared to operating
income of $224,446 in 1992.

The loss in 1993 included a loss of $462,451 on Brainerd's investment
in pursuing development of a racing facility in southeastern Wisconsin.
This amount included the $412,480 of expenses for the project which had
been capitalized as of December 31, 1992, and an additional $49,971 in
expenditures made in 1993 prior to the determination to abandon further
pursuit of the project. In addition to the $412,480 of expenses which had
been capitalized as of December 31, 1992, the Company had expensed $792,514
on the project since 1988.

Six Month Information

Capital Resources and Liquidity. At June 30, 1995, Brainerd had
current assets of $408,969 compared to current assets of $157,055 at
December 31, 1994. During the first six months of 1995, Brainerd generated
$443,660 of net cash flow from operations compared to $76,618 of net cash
flow from operations during the first six months of 1994. The significant
improvement is attributable to (i) an approximately $107,000 reduction in
the operating loss incurred in the second quarter of 1995 from that incurred
in the second quarter of 1994; (ii) an approximately $102,000 increase in
advance ticket sales during the first six months of 1995 over those made in
the same period in 1994; and (iii) an increase in accounts payable in 1995
compared to a decrease in payables during the first six months of 1994.

As of June 30, 1995, Brainerd's current liabilities, which primarily
consist of accounts payable and deferred income from advance ticket sales,
exceeded current assets by $367,657. This compares to a working capital
deficit of $454,365 as of June 30, 1994. Brainerd has historically
experienced operating losses and deficits in its working capital during the
first six months of each year due to the seasonal nature of Brainerd's
operations. Four of the six principal spectator events to be held in 1995
are scheduled for the third quarter, including the NHRA Champion Auto
Stores Nationals which has accounted for more than half of Brainerd's
revenues in each of the previous three years.

Brainerd spent $177,840 during the first six months of 1995 and
intends to expend approximately an additional $60,000 during the remainder
of 1995 on capital improvements and equipment purchases for the Brainerd
International Raceway. The improvements were a significant contributing
factor to the increase in accounts payable of Brainerd during the second
quarter of 1995. The improvements made and to be made include
approximately $100,000 for additional restrooms, approximately $60,000 for

50
the installation of a privacy fencing and landscaping on a portion of the
perimeter of the raceway property in compliance with requirements imposed by
the local governmental authorities, approximately $25,000 for a pedestrian
bridge over the raceway road course and approximately $25,000 for the
installation of an above-ground gasoline storage tank. In connection with
these expenditures, Brainerd expects to receive contributions of
approximately $30,000 each over the next three years from the NHRA
under arrangements between Brainerd and the NHRA for the NHRA Champion Auto
Stores Nationals event.

Results of Operations. Revenues increased $18,527 or 5 percent to
$395,726 in the second quarter of 1995 compared to $377,199 in the second
quarter of 1994. Operating expenses decreased $148,507 or 35.7 percent to
$267,774 in the second quarter of 1995 compared to $416,281 in the second
quarter of 1994. In the second quarter of each of 1995 and 1994, Brainerd
held two spectator events at the Brainerd International Raceway, the Pontiac
Excitement 300 race and the Champion Auto Stores Winston Drag Race Series
event, which events generated substantial portions of Brainerd's revenues and
operating expenses for those quarters. In 1994, Brainerd acted as the
promoter of the Pontiac Excitement 300 event in which capacity it was solely
responsible for payment of all the expenses of the event including the
sanction fee paid to the American Speed Association (the "ASA") and the
price awards and appearance fees paid to the participants. In 1995, the
ASA acted as a promoter of the event and paid to Brainerd a track rental fee
and allowed Brainerd to retain compensation with respect to concession sales
at the event. The revenues for the second quarter of 1995 include
approximately $123,500 from ticket sales and sponsorship fees received by
Brainerd on behalf of the ASA for the event. The operating expenses for
the quarter include approximately $43,000 of event expenses paid by Brainerd
on behalf of the ASA and the approximately $65,000 which the company remitted
to the ASA from the event revenues after the company retained approximately
$15,000 as its track rental fee and concession revenue compensation.

In addition to the reduction of operating expenses as a result of
having the ASA act as the promoter of the Pontiac Excitement 300 event in
1995, Brainerd's operating profit for the first six months of 1995 improved
over those for the first half of 1994 due to the increased profitability
from the Champion Auto Stores Winston Drag Race Series event and from
increased rentals of the Brainerd International Raceway during the second
quarter of 1995. Management attributes the improved profitability of the
drag race series event to an increase in the number of participants which
resulted from a lack of events being scheduled at other drag racing
facilities on the weekend in which the event was held at Brainerd
International Raceway in 1995.

General and administrative expenses increased $34,702 or 14.1 percent
to $280,094 in the second quarter of 1995 over the $245,392 incurred for
the same period in 1994. The increase is attributable to increased
employment costs of approximately $23,000 which resulted from the creation
of the new position of assistant track manager and to increased hours worked

51
by seasonal employees. Brainerd also paid approximately $9,000 more to
professionals in the second quarter of 1995 than it did in the same quarter
of 1994. The substantial reduction in operating expenses and the limited
increase in general and administrative expenses resulted in a $132,332 or
46.5 percent reduction in Brainerd's operating loss in the second quarter
of 1995 compared to the operating loss for the same quarter in 1994 and a
$120,245 or 29.4 percent reduction in the operating loss for the first half
of 1995 compared to the operating loss for the first half of 1994.

Brainerd's interest expense for the first six months of 1995 was
greater than that incurred in the first six months of 1994. This reflects
an increase in the prime rate which determines the interest rate of
Brainerd's bank debt and the February 1994 increase in the principal balance
of the bank debt. Brainerd's other income for the second quarter of 1995
was substantially less than that received in the second quarter of 1994.
Brainerd's other income, which consists principally of payments for signage
at the Brainerd International Raceway and to a lesser extent miscellaneous
equipment rental income, is subject to variation from quarter to quarter
due to the timing of signage payments and the changes in frequency of
equipment rentals.

Brainerd had net losses of $158,405 and $295,509 or $0.23 and $0.43
per share, respectively, for the second quarter and first half of 1995
which represent reductions of 40.3% and 24.9% from the net losses for the
second quarter and first half of 1994. As discussed above, the reduced
losses in 1995 are principally attributable to the elimination of the
operating loss incurred from the 1994 Pontiac Excitement 300 event.

BUSINESS OF BRAINERD

History

Brainerd was incorporated under the laws of the State of Minnesota on
January 21, 1982. At that time, Brainerd assumed the business of its
predecessor, Brainerd International Raceway, Inc., a Minnesota corporation.
Brainerd and its predecessor have operated the Brainerd International
Raceway since June of 1973, when Gerald J. Hansen, the organizer and a
former director of Brainerd, personally acquired the Brainerd International
Raceway properties now owned by Brainerd. Brainerd leased the Brainerd
International Raceway from Mr. Hansen until December 21, 1984, when
Brainerd acquired the facility.

Beginning in 1988, Brainerd attempted to locate and acquire a site to
develop a motorsports racing facility in southeastern Wisconsin. The
proposed facility was intended to consist of a road course and a dragstrip.
In 1990 Brainerd obtained options to acquire land near the Village of Genoa
City, Wisconsin ("Genoa City"). As Brainerd lacked sufficient funds to
exercise such options, Gene M. Snow, then an officer, director, and

52
principal shareholder of Brainerd, acquired certain of the lands subject to
the options and subsequently entered into arrangements with Brainerd under
which Mr. Snow would fund a portion of the expenses to be incurred in
pursuing the project in exchange for an ownership interest in the project.
In December 1993, the Board of Directors of Brainerd determined to abandon
Brainerd's efforts to develop a racing facility near Genoa City. In
exchange for Brainerd's consent to his pursuing the development of the
Genoa City site, including potentially the development of a racing facility
on the site, Mr. Snow agreed to convey to Brainerd one-quarter of
Mr. Snow's interest in any racing facility he may develop on the site.

In September 1994, Donald J. Williamson acquired from Mr. Snow and
James W. Littlejohn all of their shares of Brainerd Common Stock. In
connection with the acquisition, Mr. Snow and Mr. Littlejohn resigned as
officers and directors of Brainerd and Mr. Williamson and four individuals
designated by Mr. Williamson were appointed as members of Brainerd's Board
of Directors. Mr. Williamson stated that he intended for the Boards of
Directors of Brainerd and The Colonel's, Inc. to consider the consolidation
of the two corporations. The Colonel's, Inc., which is owned by
Mr. Williamson and his spouse, is engaged primarily in the manufacture and
distribution of replacement bumpers and related parts for automobiles and
light duty trucks. In December 1994, Brainerd and The Colonel's, Inc.,
entered into a letter of intent which contemplates the acquisition by
Brainerd of The Colonel's, Inc. The proposed Merger was approved by the
Brainerd Board of Directors on February 27, 1995 and again on April 10,
1995. See "PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT - Background of
the Merger."

General Operations

At the Brainerd International Raceway, Brainerd organizes and promotes
various spectator events such as road and drag races, including races for
sports cars, stock cars, motorcycles, and go-karts, and derives a
substantial portion of its revenues from ticket sales and spectator
attendance. See "SOURCES OF REVENUE." In addition, Brainerd permits the
use of the Brainerd International Raceway by others who organize and
promote racing events, and by individuals or commercial organizations who
may use the Brainerd International Raceway for things such as automobile
road testing or filming. All racing events, whether or not organized by
Brainerd, are conducted over a two to four-day period, usually encompassing
a weekend.

Sources of Revenue

Brainerd derives its revenues from four principal sources: (i) ticket
sales; (ii) camping fees, concession sales, and track rentals; (iii) entry
fees; and (iv) sponsorship fees. Sponsorship fees were received in 1994
from commercial businesses such as Viking Coca-Cola, Inc., Anheuser-Busch
(Budweiser), Pontiac Motor Division, Champion Auto Stores, and R.J.

53
Reynolds Company which promote their names and products at and in
connection with the racing events. Sponsorship fees are contracted for and
often paid in whole or in part several months prior to the commencement of
each racing season. Entry fees are received from race participants.

Brainerd permits overnight camping during racing events within the
area surrounded by the Brainerd International Raceway track, which will
accommodate tents, trailers, and motor homes. In 1994, Brainerd charged
from $10 per person to $16 per person for each weekend, or from $5 per
person to $10 per person for one day, for use of the camping facilities.
Material revenues from camping were received by Brainerd with respect to
only six spectator events in 1994. Brainerd uses a local non-profit
organization to manage the camping activities during the principal
spectator events. The non-profit organization is currently paid 20 percent
of the camping revenues generated by the events in exchange for which the
organization supplies personnel to staff the gates to collect camping fees.

Beer, soft drinks, candy, and fast food items such as hot dogs are
served at concession stands at various locations around the Brainerd
International Raceway, but principally near the grandstand area. Brainerd
allowed both for-profit and nonprofit organizations to operate the
concession stands for the six principal spectator events in 1994. For all
other 1994 events, Brainerd permitted a single for-profit organization to
operate the concession stands. Brainerd receives a percentage of the gross
sales of all concessions, but neither Brainerd nor any affiliate of
Brainerd operates any of the concession stands. Brainerd currently plans
to continue its practice of allowing independent for-profit and non-profit
organizations to operate the concession stands.

Brainerd rents the Brainerd International Raceway to other
organizations to conduct races, hold driving schools, or to test or film
motor vehicle operations. Brainerd has also rented the Brainerd
International Raceway for use as the site of a camping convention. The fee
charged for such use varies and is negotiated in each case.

For the calendar years 1994, 1993, and 1992, the percentage of
revenues derived from Brainerd's various revenue sources were as follows:

<TABLE>
<CAPTION>
Activity 1994 1993 1992
<S> <C> <C> <C>
Ticket Sales 71% 70% 66%

Track Rentals, Concessions
and Camping Fees 11% 13% 14%

Entry Fees 8% 9% 11%

Sponsorship Fees 10% 8% 9%
</TABLE>
54
Events and Activities

During 1994, Brainerd organized and promoted six major spectator
events, including two drag races (the "Winston Drag Racing Series" and the
"Champion Auto Stores Nationals"), two special events (the "Champion Auto
Stores Show & Go" and the "Champion Auto Stores Muscle Car Shootout"), one
motorcycle race (the "Suzuki Classic"), and one road race by stock cars
(the "Pontiac Excitement 300").

The Winston Drag Racing series, held on June 4 and 5, 1994, was a drag
racing event sponsored nationally by R.J. Reynolds Tobacco Company of
Winston-Salem, North Carolina. A drag race is generally conducted between
two vehicles from a standing start over a one-quarter mile track, using
sophisticated starting and timing systems. The Winston Drag Racing Series
was sanctioned by the National Hot Rod Association (the "NHRA") and was one
of a series of five events in the Central States Division of the NHRA. See
"SANCTIONING ORGANIZATIONS." The Winston Drag Racing series was organized
and promoted jointly by Brainerd and the NHRA, and included both
professional and amateur drivers who paid Brainerd an entry fee. A
similarly sponsored event has been held at the Brainerd International
Raceway annually since 1977, with the exception of 1984, when there was a
scheduling conflict. The Sponsorship Agreement with R.J. Reynolds Tobacco
Company for this event will expire in December 1995, subject to the option
of R.J. Reynolds Tobacco Company to extend the agreement for an additional
two years. This event drew approximately 3,300 paid spectators in 1994, as
compared to approximately 3,100 in 1993 and 3,500 in 1992. The event is
scheduled for June 3 and 4, 1995.

The Pontiac Excitement 300, held on June 25 and 26, 1994, was a
300 kilometer (180 mile) road race by stock cars driven by professional
drivers and sanctioned by the American Speed Association (the "ASA"). The
event was one of only two road races included in the ASA's AC-Delco
Challenge Series. Most stock car races, including the remaining sixteen
races in the AC-Delco Challenge Series, are held on oval tracks. The event
in 1994 was sponsored by the Pontiac Motor Division of General Motors and
was nationally televised on the Nashville Network cable television program.
Management of Brainerd estimates that it realized operating losses of
$63,700 and $154,000 on the event in 1994 and 1993, respectively. The event
was scheduled for June 24 and 25 in 1995 with the ASA acting as the promoter
of the event. Under such arrangement, Brainerd was paid rent in the amount
of $10,000 and allowed to retain certain concession revenue from the event.

The Champion Auto Stores Show & Go event, held on July 2 and 3, 1994,
was sponsored by Champion Auto Stores under an agreement which extends
through 1998. This event featured "street rods," "street machines,"
antiques, and other classic cars that participated in both a car show and
drag races emphasizing a "back-to-the-fifties" style. The drag racing
portion of the event was sanctioned by the NHRA. The event had
approximately 7,300 paid spectators in 1994 and 7,000 and 7,500 in 1993 and
1992, respectively. The event was scheduled for July 1 and 2, 1995.

55
The Champion Auto Stores Muscle Car Shootout was held on July 23 and
24, 1994. As with the Show & Go event, this event is both a car show and a
drag race. The Muscle Car Shootout involves 1974 to 1995 model year
vehicles. The event is subject to the same sponsorship agreement as the
Champion Auto Stores Show & Go event. The event had approximately 6,200
paid spectators in 1994 and 6,100 and 5,900 paid spectators in 1993 and
1992, respectively. The event was scheduled for July 22 and 23, 1995.

The Suzuki Classic, held on July 29, 30, and 31, 1994, was one of a
series of nine races conducted throughout the United States pursuant to the
sanction of the American Motorcyclist Association (the "AMA"). The event
featured six races of motorcycles operating on the road course. The races
involved motorcycles of 250cc, 600cc, 750cc, and the Harley Davidson Twin
Sport and Superbike classes. The event had approximately 9,200 paid
spectators in 1994 compared to approximately 7,200 in 1993 and 5,250 in
1992. This event was scheduled this year for July 14, 15, and 16, 1995.

The Champion Auto Stores Nationals event, held on August 18, 19, 20,
and 21, 1994, was sponsored by Champion Auto Stores under an agreement with
the NHRA. This event features all professional drivers, most of whom have
national reputations, and was one of a series of nineteen drag races
conducted throughout the United States in 1993 under the national
sponsorship of the R.J. Reynolds Tobacco Company and the sanction of the
NHRA. The Champion Auto Stores Nationals are organized and promoted by the
NHRA. The NHRA leases the Brainerd International Raceway from Brainerd for
a rental equal to one-half of the net profit of this event as defined in
the lease agreement. Such profit is earned primarily through the receipt
of promotional fees and ticket sales. Brainerd's responsibilities in this
event are, among other things, to provide the Brainerd International
Raceway, ticket sellers and takers and security personnel, as well as
assisting in the management and operation of the event. The lease
agreement with the NHRA is currently scheduled to terminate upon completion
of the 1996 racing season, but is subject to an option of the NHRA to
extend the term of the lease through the 2001 racing season. Under the
lease agreement, Brainerd is not permitted to conduct any drag races at the
Brainerd International Raceway that are not sanctioned by the NHRA. Until
1991, the event was sponsored by Quaker State Oil Refining Company.
Champion Auto Stores has agreed to sponsor the event through the 2001
racing season. The Champion Auto Stores Nationals drew approximately
45,100 paid spectators in 1994. The event, which has been held at the
Brainerd International Raceway since 1982, drew approximately 42,500 paid
spectators in each of 1993 and 1992. The event was scheduled for August 17
through 20, 1995.

Additionally, during the New Year's weekend of December 30, 1994,
through January 2, 1995, Brainerd held the Brainerd 200 snowmobile race at
the Brainerd International Raceway. The race was one of eight races on the
International Series of Champions and featured Pro 500, Semi-Pro, and Stock
classes of snowmobiles competing in 200 kilometer races on a cross country
course. The race was sponsored by McDonald's, Skidoo, Polaris, and Arctic

56
Cat. The races were held on a prepared track constructed adjacent to the
road course. The event drew approximately 3,800 paid spectators.
Management of Brainerd believes attendance was adversely affected by the
limited snowfall preceding the event. The event which had been scheduled
this year for December 30 and 31, 1995 has been canceled due to inadequate
sponsorship support.

Brainerd also organized and sponsored four weekend drag racing
"bracket" events in 1994, primarily for non-professional drivers from
Minnesota and surrounding states. In bracket racing, each driver attempts
to predict his car's performance, and whether he wins or loses a particular
race will depend partially on how much his actual time over a one-quarter
mile distance exceeds his predicted time. While spectators are encouraged
to attend these drag racing events, and Brainerd receives revenues from
ticket sales, camping fees, and concessions, they are not highly promoted.
Brainerd has scheduled four bracket races for 1995.

In addition to the spectator events and the bracket races discussed
above, there are racing events conducted on approximately 24 other weekends
that are primarily for nonprofessional drivers and are often organized and
sponsored by local and regional racing clubs some of which may be members
of or affiliated with national sanctioning organizations. While spectators
attend these events, Brainerd does not receive any revenues from ticket
sales from, or engage in any significant promotion of these events.

In 1994, three weekend events involved sports car racing and were
sponsored by the "Land O' Lakes" regional affiliate of The Sports Car Club
of America (the "SCCA") which sanctions these events. In addition, in
1994, four motorcycle racing events were held, each of which was sponsored
by the Central Roadracing Association, a club located in the
Minneapolis/St. Paul, Minnesota area and associated with the AMA. During
1994, the Northland Region Karting Association, affiliated with the World
Karting Association, (the "WKA"), organized and sponsored fifteen go-kart
racing events, and the Nord Stern Regional Club of the Porsche Club of
America organized four weekend racing events for Porsche cars. A similar
schedule has been established for 1995.

Brainerd will rent the Brainerd International Raceway to various
individuals or organizations for their own unsanctioned events and driving
schools, or to test or film the operation of various motor vehicles. In
July 1992, Brainerd leased the Brainerd International Raceway to the
National Campers and Hikers Association for use as the site for a camping
convention. Only the camping areas and the grandstand, which was used for
a country music concert, were used.

In addition to attempting to continue to schedule the events discussed
above, other than the Brainerd 200 snowmobile race, Brainerd is also seeking
to establish additional revenue producing uses for the Brainerd
International Raceway. Events under consideration include additional
spectator racing events, a street rod show, snowmobile events and music
festivals.
57
In January 1995, Brainerd entered into an agreement with the
International Motor Sport Association ("IMSA") for the Brainerd
International Raceway to be the site of endurance road races featuring
domestic and foreign sportscars in 1995, 1996 and 1997. The inaugural
event was scheduled for August 4, 5 and 6, 1995. On June 16, 1995, IMSA
announced that it had cancelled the events it had scheduled to be held at
the Brainerd International Raceway as well as at a site in Portland,
Oregon. Brainerd is currently negotiating with IMSA the terms of the
compensation to be paid to Brainerd by IMSA for the cancellation of the
event. Under its agreement with IMSA, Brainerd was to be paid a track
rental fee of $20,000 and be reimbursed, on an accountable basis, for the
expenses it incurred in connection with the event. In addition, Brainerd
was to retain concession revenues from the event and was to share in
revenues received by IMSA in excess of $300,000.

Sanctioning Organizations

Most racing events conducted at the Brainerd International Raceway,
including the seven principal spectator events held by Brainerd in 1994,
are sanctioned by an organization which establishes, publishes, and
enforces rules relating to a specific class or type of participating
vehicle. These rules generally relate to the specifications which each
class of car or other vehicle must meet in order to be eligible to race,
and to driver conduct and other racing matters. Brainerd enters into
agreements annually with the various applicable sanctioning bodies with
respect to each race it organizes and promotes. These agreements provide
that the appropriate sanctioning organization will sanction the race and
provide personnel to interpret and enforce its rules. The sanctioning
bodies include the SCCA (governing sports cars), the NHRA (governing drag
racing), the AMA (governing motorcycles), the ASA (governing stock cars),
and the WKA (governing go-karts). In connection with the Suzuki Classic
scheduled for July 14, 15, and 16, 1995, Brainerd undertook in the sanction
agreement for the event to indemnify the AMA for liability arising from a
competing sanctioning organization not having a motorcycle race at the
Brainerd International Raceway in 1995. Brainerd had entered a letter of
intent with such competing sanctioning organization for such a race;
however, Brainerd obtained a release from such letter of intent prior to
entering into the sanction agreement with the AMA.

Promotion and Ticket Sales

Brainerd promotes its principal spectator events (discussed under
"Events and Activities" above) primarily through radio and television
advertising in Minnesota, through mailings made to selected potential
spectators from a list developed by Brainerd, and through racing posters
placed in service stations and auto parts and accessory stores. Brainerd
also attends five auto shows in Minnesota, where it promotes all of its
events. In a few instances, sponsoring organizations may also promote
these events. When undertaken, such sponsor promotion is generally through
newspaper or point of sale advertising.

58
Ticket sales are made at various locations by ticket agents, at
Brainerd's offices primarily by mail, and at the Brainerd International
Raceway. Brainerd sells three types of tickets: a Sunday only ticket, a
weekend ticket, and a Super Weekend ticket that includes all days of each
event as well as paddock admission and camping. Ticket agents are located
throughout Minnesota and include the retail outlets of Champion Auto
Stores. Most ticket agents receive a commission equal to 9% of the ticket
prices. Ticket prices for the eight principal racing events scheduled for
1995 will range from $8 to $90 per ticket, depending primarily on the event
and the number of days the event is held.

Brainerd estimates that over 60% of Brainerd's ticket sales are made
to residents of the Minneapolis/St. Paul, Minnesota metropolitan area, and
that approximately 20% of Brainerd's ticket sales are by mail. Advance
sales of tickets represent approximately 50% of all ticket sales.

Competition

The closest comparable race track which conducts road racing events
similar to those conducted by Brainerd is located at Elkhart Lake,
Wisconsin, which is approximately 75 miles northwest of Milwaukee,
Wisconsin, approximately 475 miles from the Brainerd International Raceway
and approximately 350 miles from Minneapolis/St. Paul, Minnesota. While
there are drag race strips in Fargo, North Dakota, and Eau Claire,
Wisconsin, the closest drag race strips that own equipment and conduct
major drag race events comparable with that owned or conducted by Brainerd
are located in Indianapolis, Indiana and Denver, Colorado. While other
regional race tracks are not generally considered competitive with
Brainerd, other events in Brainerd's market area, such as sporting events,
festivals, and concerts, may tend to attract persons who might otherwise
attend Brainerd's racing events. Brainerd does not generally consider the
schedules of other spectator events when scheduling its own events.

Seasonal Business/Weather

Substantially all of Brainerd's revenues arise from operation of the
Brainerd International Raceway during the period of May through September
of each year. Brainerd's revenues are derived primarily from ticket sales
for racing events, and adverse weather could materially diminish the
revenues which might otherwise be received by Brainerd. While sports car,
stock car, and motorcycle races may be conducted in nearly all weather
conditions, spectator attendance is materially reduced when it rains. A
drag racing event cannot be held in rain, and adverse weather could require
the rescheduling of such events, or the cancellation of such event and the
return of ticket sale proceeds to ticket purchasers. A substantial
majority of Brainerd's revenues arise from drag racing events. In 1993,
four of the six spectator events were materially and adversely affected by
rain and unseasonably cool weather. In addition to adversely affecting
attendance and concession sales, the weather required the rescheduling of
portions of three events which resulted in increased operating costs for

59
the events. The Brainerd 200 snowmobile race held over the 1994-1995 New
Years' weekend was adversely affected by limited snowfall occurring prior
to the event which reduced the number of snowmobile riders who
traditionally visit the Brainerd area during that weekend.

Government Regulations

The operation of the Brainerd International Raceway is subject to
various zoning, land use, and health laws and regulations. Brainerd's
management believes that it is and will continue to be in compliance with
such laws and regulations. In connection with obtaining a conditional use
permit for property added to the Brainerd International Raceway, Brainerd
agreed with the local government to install a privacy fence on a portion
of the perimeter of the raceway.

Liability Insurance

Brainerd requires that each race participant expressly waive any claim
against Brainerd which may arise from a racing accident; however, actions
alleging Brainerd's negligence can and have been brought based upon the
occurrence of such accidents. Brainerd, its officers, and sponsors, and
certain participants in the racing events, are insured for up to $3,000,000
against liability for personal injury and property damage to any spectator
or racing event participant incurred at any racing event as the result of
the negligence of any named insured. This insurance policy must be renewed
annually, and there is no assurance that such insurance will continue to be
available to Brainerd at affordable rates. In addition, Brainerd requires
each participating or sanctioning organization that uses the Brainerd
Raceway to acquire insurance which provides accidental death,
dismemberment, and medical benefits for participants in each racing event.
The amount of coverage under such insurance varies from $3,000 to $20,000
per incident.

Personnel

Richard L. Roe, Brainerd's Vice President, Secretary, and General
Manager; one assistant track and special projects manager; one secretarial/
administrative person; and one bookkeeping/administrative person, are
currently the only full-time employees of Brainerd. From April through
October, Brainerd employs four full-time grounds and track maintenance
personnel. In addition, Brainerd engages various independent contractors
to handle matters such as public relations, drag racing events, perimeter
and grounds security, ticket sales and ticket handling, emergency medical
service, concessions, and camping. None of the independent contractors
engaged by Brainerd are affiliated with Brainerd as an officer, director,
or principal shareholder.

Attempted Development of Genoa City Racing Facility

Brainerd management believed that the revenues obtained from the
operation of the Brainerd International Raceway would be greater if the
60
facility were located closer to a larger population base from which to draw
spectators. In 1988, Brainerd began pursuing the development of a
motorsports racing facility to be located in southeastern Wisconsin. The
proposed facility was intended to consist of a road course and drag strip
similar to the Brainerd International Raceway which would be used for
events similar to those held at the Brainerd International Raceway.

In 1990, Brainerd obtained rights to acquire a number of adjacent
parcels comprising approximately 445 acres near the Village of Genoa City
("Genoa City") in Walworth County, Wisconsin. Genoa City undertook to
annex the site to the Village. Brainerd did not acquire the property due
to its inability to obtain financing for the purchase price of the property
and delays in obtaining approvals by local governmental authorities for the
project. The rights to acquire the subject property were extended
initially by Brainerd and thereafter by Gene M. Snow, then an officer,
director, and principal shareholder of Brainerd. In 1991 and 1992,
Mr. Snow acquired ownership or rights to purchase the Genoa City site.

In June 1991, Brainerd formed a subsidiary under the laws of the State
of Wisconsin for the purpose of acting as the developer of the facility.
Such subsidiary was wholly owned by Brainerd until March 1993 when
Brainerd, the subsidiary, and Mr. Snow agreed that Mr. Snow would be
granted a 25% interest in the subsidiary in exchange for funding
substantially all of the costs of pursuing the development of the facility
in 1993.

As of December 31, 1993, Brainerd had expended approximately
$1,254,965 in pursuing the development of the Genoa City facility or of
facilities at other locations in southeastern Wisconsin. Of those
expenditures, $412,480 had been capitalized as construction in progress as
of the beginning of 1993. While the Genoa City Council had approved the
annexation of the proposed site and the terms of a development agreement
providing for the construction and operation by Brainerd of the racing
facility on that site, the development was opposed by certain owners of
property in the Genoa City area. Those opposing the annexation and
development included property owners not residing in the Genoa City area
who believed the development would diminish the value of the recreational
property they owned. The township within which the site was located and
opponents to the development brought legal actions against Genoa City
challenging the annexation as not being in compliance with laws of the
State of Wisconsin and sought to have state agencies, including the
Wisconsin Department of Natural Resources, block the development. In
proposing the annexation to Genoa City, Brainerd had been advised by legal
counsel that the proposed annexation complied with applicable law; however,
in 1993 Brainerd received a contrary opinion from other legal counsel which
resulted in Brainerd and Mr. Snow requesting Genoa City to discontinue the
challenged annexation efforts.

In December 1993, the Board of Directors of Brainerd determined that
continued pursuit of the development of a racing facility near Genoa City

61
would require substantial additional funds and would involve further
delays. Due to the financial condition of Brainerd, the Board of Directors
determined to discontinue its development efforts. Mr. Snow advised the
Board of Directors that he intended to pursue the development of the site
including, potentially, the development on the site of a racing facility.
Mr. Snow agreed that in exchange for the consent of Brainerd to Mr. Snow's
development of the site, Mr. Snow would transfer to Brainerd a 25% interest
in the development should the site be developed into a racing facility
prior to 1999.

In connection with Mr. Snow's sale of his shares of Brainerd Common
Stock to Donald J. Williamson, Mr. Williamson undertook to have Brainerd
grant to Mr. Snow an option to terminate Brainerd's contingent interest in
Mr. Snow's development of the site. Exercise of the option is contemplated
to require the payment of $10,000 by Mr. Snow to Brainerd and would expire
in September 1996. Mr. Snow's proposed option was presented to the
Brainerd Board of Directors at its meeting on February 27, 1995 but no
action was taken on the proposed option at that meeting.

Change in Control and Possible Acquisition of The Colonel's, Inc.

On September 9, 1994, Donald J. Williamson entered into a Stock
Purchase Agreement with Gene M. Snow and James W. Littlejohn who were
officers, directors, and the principal shareholders of Brainerd. Pursuant
to the Agreement, Mr. Williamson acquired from Mr. Snow and Mr. Littlejohn
a total of 487,080 shares of Brainerd Common Stock for a total purchase
price of $1,100,000, which shares constituted all of Brainerd's shares
owned by Mr. Snow and Mr. Littlejohn. In connection with their sale of
shares, Mr. Snow and Mr. Littlejohn resigned as officers and directors of
Brainerd. Mr. Williamson was elected as the Chief Executive and Chief
Financial Officer of Brainerd. Mr. Williamson and four other individuals
he designated were elected to Brainerd's Board of Directors. Mr.
Williamson subsequently resigned as a director and officer of Brainerd on
April 6, 1995. See "PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT -
Background of the Merger."

In announcing the acquisition of the shares from Mr. Snow and
Mr. Littlejohn, Mr. Williamson stated that he intended for the Boards of
Directors of Brainerd and The Colonel's, Inc., of which Mr. Williamson and
his wife owned all of the outstanding stock, to consider the consolidation
of the two companies. The Colonel's, Inc., which is based in Milan,
Michigan, is engaged in the manufacture and distribution of bumpers and
related parts for use as replacement collision parts for automobiles and
light duty trucks.

In December 1994, Brainerd and The Colonel's, Inc. entered into a
letter of intent that contemplates (i) The Colonel's, Inc. becoming a
wholly owned subsidiary of Brainerd; (ii) Brainerd issuing shares of its
common stock in exchange for all of the outstanding shares of The
Colonel's, Inc.; (iii) the shares to be issued in such exchange being

62
issued pursuant to an effective registration statement filed under the
Securities Act of 1933; and (iv) the existing assets and liabilities of
Brainerd being assigned to and assumed by a newly created subsidiary.
The Merger Agreement was subsequently revised to omit the requirement that
the shares issued in connection with the Merger be registered under the
Securities Act of 1933.

Properties

Brainerd owns and operates a three mile race track including a
one-quarter mile drag strip (referred to herein as the "Brainerd
International Raceway"), located approximately six miles northwest of
Brainerd, Minnesota. The Brainerd International Raceway was initially
constructed and first utilized for competitive racing in 1968. The site
of the Brainerd International Raceway consists of approximately 500 acres.
The terrain of the site is slightly rolling and partially wooded. The track
and various access roads are composed of blacktop.

The Brainerd International Raceway is enclosed by a five foot high
chain link fence. The site provides camping facilities and parking for
approximately 12,000 vehicles. The Brainerd International Raceway contains
several buildings including a four-story tower containing twelve executive
viewing suites, a control tower, various single story buildings containing
concession stands, restrooms, and storage and service facilities located
throughout the property. The buildings are concrete or wood frame and
constructed for warm weather use only. Grandstand bleachers for
approximately 18,000 spectators are primarily located along the dragstrip.

Brainerd made substantial improvements to the Brainerd International
Raceway in 1993. In connection with the drag racing facility, Brainerd
expended approximately $502,500 to install: (i) additional grandstand
seating for 4,000 spectators on the north side of the dragstrip; (ii) a new
press room on top of the new grandstand; (iii) a new return road and pit
lane; (iv) a maintenance garage and conference room; and (v) a relocated
scoreboard.

In 1995, Brainerd made additional improvements to the Brainerd
International Raceway with an approximate total cost of $238,000. The
improvements included the installation of additional restrooms, privacy
fencing and landscaping to a portion of the perimeter of the raceway, a new
pedestrian bridge over the road course and an above-ground gasoline storage
tank.

Brainerd's executive offices are located at 17113 Minnetonka
Boulevard, Suite 214, Minnetonka, Minnesota, where Brainerd leases
approximately 1,100 square feet of office space. The lease term expires in
February 1996.

63
Legal Proceedings

In September of 1990, an action, Jane Doe v. Brainerd International,
Inc. and North Country Security, Inc., was commenced in the District Court
for Hennepin County, Minnesota, against Brainerd by a person who allegedly
was sexually assaulted in August 1988 in connection with her participation
in a wet T-shirt contest held at the Brainerd International Raceway by
individuals not associated with Brainerd. The action called for
compensatory damages of an unspecified amount in excess of $50,000.
Brainerd's insurer accepted defense of the claim. The trial court granted
summary judgment in favor of Brainerd and its co-defendant, which had
provided security services for Brainerd during the event when the incident
occurred. The trial court found that the plaintiff had entered the contest
voluntarily, that Brainerd had not consented to the contest, and that the
plaintiff had assumed the risks of the injuries resulting from her conduct.
The plaintiff appealed the summary judgment. In April 1994, the Minnesota
Court of Appeals reversed the trial court decision finding that issues of
fact existed for a jury to resolve and a statutory obligation for Brainerd
to prevent a minor from engaging in this type of activity. Brainerd
appealed the Court of Appeals' opinion to the Minnesota Supreme Court. On
June 30, 1995, the Minnesota Supreme Court reversed the opinion of the
Court of Appeals and reinstated the trial court's grant of summary judgment
in favor of Brainerd.

In June 1994, an action, Wade Jung v. Brainerd International, Inc. and
XYZ, Inc. (case number PI 94-19690), was commenced against Brainerd and
Brainerd's security contractor in the District Court for Hennepin County,
Minnesota, by a minor and his parent. It is alleged in the action that the
minor was injured in July 1993 while attending a motorcycle race at the
Brainerd International Raceway when he fell into a campfire while
intoxicated. The plaintiffs allege Brainerd and its security contractor
were negligent in failing to prevent the minor from engaging in the conduct
which resulted in his injuries. The action calls for compensatory damages
of an unspecified amount in excess of $50,000. Brainerd's insurer has
accepted defense of this claim.

Other than the foregoing, Brainerd's management is not aware of any
material litigation pending or threatened against Brainerd or its
properties.

SELECTED FINANCIAL DATA OF THE COLONEL'S

The selected financial data shown below for The Colonel's for each of
the five years in the period ended December 31, 1994, has been derived from
audited financial statements of The Colonel's. The following data should
be read in conjunction with the financial statements of The Colonel's and
related notes thereto included elsewhere in this Prospectus and
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COLONEL'S."
64
<TABLE>
<CAPTION>
Years Ended December 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Operations:
Operating revenues . . . $28,492,013 $25,174,656 $25,835,683 $27,013,430 $25,784,088
Income (loss) from
continuing operations 2,401,905 (541,052) 3,716,198 7,116,632 6,961,665
Net income . . . . . . . 10,887,714 7,762,206 2,145,098 7,137,838 6,198,872
Earnings per share . . . $1.81

Financial Condition:
Current assets . . . . . 14,568,084 12,455,926 6,155,065 10,101,940 8,598,555
Current liabilities . . 16,051,178 22,383,895 9,411,218 9,881,130 4,289,732
Total assets . . . . . . 31,529,883 29,439,917 21,556,349 28,204,903 21,157,919
Long-term obligations . 1,990,751 438,611 5,545,653 7,462,992 5,093,527
</TABLE>

<TABLE>
<CAPTION>
Six
Months
Ended
June 30,
1995 1994
<S> <C> <C>
Operations:
Operating revenues . . . $14,651,145 $14,533,536
Income (loss) from
continuing operations 2,505,704 2,731,780
Net income . . . . . . . 2,401,020 2,564,185
Earnings per share . . . $.40

Financial Condition:
Current assets . . . . . 9,728,977 10,658,225
Current liabilities . . 15,138,676 10,345,928
Total assets . . . . . . 30,833,083 25,132,889
Long-term obligations . 4,517,206 5,579,215
</TABLE>

The Colonel's has been treated as an S corporation for federal income tax
purposes for each of the five years in the period ended December 31, 1994. Net
distributions to shareholders have been in the amounts of $6,927,171 for 1994;
$9,334,273 for 1993; $1,906,401 for 1992; $8,051,717 for 1991; and $5,694,933
for 1990.

The Colonel's recognized as "other income" net gains of approximately
$9,082,000 and $9,043,000 in 1994 and 1993 respectively. Those gains
represent the amount by which The Colonel's portion of insurance proceeds

65
of $24,370,000 (less the business interruption portion) exceeded the sum of
the net book value of asset destroyed by the fire.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE COLONEL'S

Background of The Colonel's

The Colonel's was organized in 1982 and began producing and selling
plastic bumpers and facias in 1983. By the start of 1994, The Colonel's
had grown through acquisitions, joint ventures, and normal expansion to two
manufacturing plants, three distribution warehouses and a network of
independent distributors that sell the company's products throughout the
United States, Canada, Mexico, Puerto Rico, The Bahamas, and The District
of Columbia. The Colonel's designs, manufacturers and distributes plastic
bumpers, facias, support beams and brackets to the automotive collision
parts industry. The Colonel's also purchases and resells replacement steel
and chrome bumpers, facias, header panels, steel bumpers, rebars, step
bumpers, paint and body shop repair supplies through its distributors as
replacement collision parts for most domestic and imported automobiles and
light trucks.

Today, The Colonel's is a leading domestic manufacturer of plastic
replacement bumpers and facias for the automotive and light truck
aftermarket industry. The Colonel's competes with original equipment
manufacturers ("OEMs") and other domestic and import manufacturers that
sell new replacement bumpers for the automotive aftermarket, and with the
recycled and junkyard industry that repairs and resells previously damaged
or salvaged automotive parts.

The Colonel's competes mainly on bumper quality, price, and delivery.
Prices are driven principally by the price levels that the OEMs charge.
The Colonel's considers price adjustments whenever the OEMs change their
prices. The Colonel's made general price reductions in September 1994 in
an effort to increase market share and boost sales exposure. This was the
first major sales drive since the fire and the restoration of the complete
line of manufactured products. See "Major Fire Loss and Insurance Claim."
Any further price reductions could be expected to have an adverse impact on
the company's continued earnings performance. No across the board price
adjustments are planned for the remainder of 1995. However, The Colonel's
may react to changes in the market for individual parts. The Colonel's
believes that it can stay competitive with OEM pricing because of the
company's extensive distributor network. Through this network, The
Colonel's believes that it can bring products to market with less cost or
markup than the OEMs. Additionally, because The Colonel's product line
encompasses replacement parts for five OEMs and their component, multiple
car lines, The Colonel's does not consider itself particularly vulnerable
to price decreases for competitive replacement parts by any one division or

66
OEM. OEM price changes cannot be anticipated and extensive price changes
could have a major impact either favorably (price increase) or unfavorably
(price reduction) on the market and the company's business.

The Colonel's produces consistent quality products using state of the
art domestically made machinery, domestically engineered raw materials, and
local labor forces. The Colonel's proudly displays "MADE IN USA" on all of
its manufactured products and related packaging materials and literature.
The manufacturing process, plant, and parts are checked and certified by an
independent quality agency (CAPA) to assure that parts meet or exceed
acceptable industry standards.

The Colonel's has recently completed the start up of a modern
manufacturing plant in Milan, Michigan, replacing the former Owosso,
Michigan, plant that was consumed by the June 1, 1993, fire. The Milan
plant, which also serves as corporate headquarters for The Colonel's, is
350,000 square feet plus a 45,000 square foot covered crane bay and sits on
62 acres on the outskirts of Milan, Michigan. Milan is located
approximately 10 miles south of Ann Arbor (home of the University of
Michigan), 60 miles west of Detroit, and 25 miles northwest of Toledo,
Ohio. There is sufficient room to expand the physical plant. The
Colonel's has experienced some difficulty in hiring qualified and general
labor personnel. The labor market would have to be evaluated in connection
with any expansion and could influence the company's choice of location.

Major Fire Loss and Insurance Claim

The Colonel's suffered the loss of its Owosso manufacturing plant on
June 1, 1993, to a fire that totally consumed the building and the finished
inventory stored in its warehouse area, a significant percentage of the
plant's machinery and equipment, as well as damaging many of The Colonel's
production molds. The Colonel's settled the resulting insurance claim for
all insured losses caused by the fire for $31,000,000 in January 1995. The
Colonel's insurance policies with the Home Insurance Company covered respec-
tive losses of up to $7.21 million for the leased building, $15 million for
machinery and equipment, $4 million for inventory, and $10 million for lost
business income resulting from damage to or the loss of those insured as-
sets. Payments made by the Home Insurance Company against The Colonel's
interim proofs of claim and by the final, global settlement installment
were applied as follows: $6,630,000 to the landlord for loss of the build-
ing; $3,441,434 to The Colonel's for its inventory losses, $12,324,703 to
The Colonel's for machinery and equipment losses and repair costs; and
$7,928,666 as replacement for lost business income. The remaining $675,297
represented partial payment for reimbursable expenses incurred under the
policy for debris removal and other costs incurred in containing or mitiga-
ing losses. The Home Insurance Company's senior adjusters and outside
consultants' and accountants' examination of losses in those categories
took 19 months to complete. At the time of the January, 1995 final pay-
ment, the parties had agreed that the category claims for losses to the
building, machinery and equipment, and inventory totaled $22,396,137. At

67
the point in time that agreement was reached as to those items (November
1994), the insurer had paid The Colonel's $3,251,724 against The Colonel's
$10,000,000 business interruption claim which remained open through January
1995. The Colonel's applied $675,297 of the $5,352,239 January 1995 final
payment against response and mitigation costs and the remaining $4,676,942
against its business interruption claim. As a result of the interim and
final settlement payments from the insurance company, The Colonel's financial
statements for 1993 and 1994 included $9,043,000 of those proceeds in 1993 and
$9,082,000 of those proceeds in 1994 as "other income." Those respective
entries reflect the portions of The Colonel's $24,370,000 share of the insurance
settlement that were comprised of both reimbursement for interrupted business
income and the amount by which payments for replaced destroyed property exceeded
those assets' net book value at the time of the fire. The Colonel's paid
$6,630,000 for the building's loss to the landlord.

Because the fire started in a location in the plant and under condi-
tions that suggested that it had been deliberately set, the cause of the
fire was investigated by The Federal Bureau of Alcohol, Tobacco and
Firearms in coordination with the Michigan State Police and State Fire
Marshal's office. Based upon their investigation, a criminal charge of
arson was brought against a sole individual who was employed as an hourly
worker at The Colonel's and was a captain in the Owosso Township Volunteer
Fire Department at the time of the fire. The state district court judge who
who conducted the preliminary examination of those charges in 1994 refused
to bind the case against him over to circuit court for trial, after con-
cluding that the circumstantial and scientific evidence introduced by the
prosecution was insufficient to warrant a trial. After consulting with
government investigators and concluding its own private investigation and
review of The Colonel's finances, The Colonel's insurer, the Home Insurance
Company, unconditionally accepted coverage for the fire on November 11,
1993. Prior to that date, the insurance company had advanced The Colonel's
over $8 million under a reservation of rights agreement. The Colonel's also
secured short term bridge loans from its primary lender, Comerica Bank,
which enabled the company to begin the rebuilding process. Funds from
subsequent insurance company payments were used in part to repay those
bridge loans. See "Outstanding Loans."

Operations

Immediately after the fire, The Colonel's increased the output of its
Sarasota, Florida, manufacturing operations to minimize any loss of sales
and income. Sarasota's production was increased to and kept at near
capacity while salvageable machinery and equipment from Owosso, Michigan
were moved to a newly leased facility in Milan, Michigan. Production at
the replacement facility in Milan began in November of 1993 when the first
reaction injection molding machines were brought on line. The Milan
facility began producing injection molded parts in February, 1994. By the
end of July 1994 the Milan plant was producing The Colonel's pre-fire full
line of products and inventory levels had been restored to a level where
The Colonel's could resume full truck load deliveries to its customers. As

68
Milan's production increased and its on-hand inventory reached acceptable
levels, The Colonel's reduced Sarasota's production back to its pre-fire
levels.

Because the combination of new and restored presses and an improved
layout at the Milan manufacturing facility afforded The Colonel's more
production capacity than it had enjoyed in Owosso, management decided in
October 1994 to reduce manufacturing overhead by closing the month to month
leased Sarasota facility. Sarasota's inventory was reduced through normal
sales and then shipments of remaining units went to Milan. Sarasota's
machinery and equipment will either be sold or moved to another Colonel's
location. The equipment designated for sale has been reclassified as
"assets held for sale" and valued at the lower of cost or its estimated net
realizable value. All of the production molds at the Sarasota facility
were acquired as part of The Colonel's 1991 purchase of the assets of a
competitor, Nupar, Inc. That purchase resulted in some duplicate molds
that are no longer necessary following the close of operations in Sarasota.
At December 31, 1994, The Colonel's wrote off the net book value of the
duplicate molds in the amount of $1,034,000. An additional accrual of
$355,000 has been recorded as of December 31, 1994, for the remaining
expenses expected to be incurred in fully closing the Sarasota facility.
The Sarasota facility was closed and all assets removed in May, 1995.

The Colonel's participates in the Certified Auto Parts Association
(CAPA) certification program. This independent association inspects and
sets out guidelines that form strict standards for quality. CAPA works
closely with the insurance carriers to relate their concerns and quality
issues to the manufacturing sector. The manufacturing sector places CAPA
certification stickers on each of the parts that have been tested and
certified. The serial number of the certification sticker is the means for
CAPA to trace the part back to its original manufacturer. A non-conforming
part may cause CAPA to call for an inspection of the part or facility and
may lead to the decertification of that part or part lot. Any part that is
decertified has to start over with the certification process in order to be
recertified. A CAPA catalogue is distributed quarterly listing all
certified and decertified parts or lots. Additionally, CAPA issues interim
bulletins that are circulated monthly to keep purchasers and manufacturers
advised of the status of all the parts in their program. Currently, The
Colonel's has 237 applications that are certified by CAPA. At the present
time, CAPA only has a certification program for the reaction injection
molding (RIM) process. It doesn't have a certification program for the 45
parts made by the injection molding process. It is expected that once CAPA
has incorporated this process into its certification program that The
Colonel's may spend resources for certification of the parts it produces
from the injection molding process.

Liquidity and Capital Resources

The Colonel's improved its capital resources from 1993 to 1994 by
cutting its working capital deficit from $6,883,430 to $1,483,094. The

69
Colonel's reduced its current liabilities from $22,383,895 in 1993 to
$16,051,178 in 1994, while increasing current assets from $12,455,926 to
$14,568,084. The improvement in working capital was mainly due to the
reduction of accounts payable-trade by $1,131,386. The Colonel's long-term
debt is scheduled to be retired in June 1995. The Colonel's was able to
make all of its scheduled payments on the long term debt after the fire by
using business interruption insurance proceeds and revenue from the
expanded operations in Florida. Those payments reduced the current portion
of long term debt by $5,286,000 between 1993 and 1994. For a further
discussion of bank financing arrangements, see "Outstanding Loans."

As a result of the fire, The Colonel's made higher than normal capital
expenditures by purchasing leasehold improvements in 1994 of $157,681,
furniture and fixtures in 1993 for $198,126 and $56,065 in 1994, machinery
for $1,812,397 and $2,791,024 in 1993 and 1994, and the purchase of 39 new
tools for $1,200,399 and $2,705,700 in 1993 and 1994 respectively. This
new equipment was mainly financed through insurance proceeds, and special
interim financing (bridge loans) arranged with The Colonel's primary
lender.

The Colonel's continued to build inventory throughout 1994. At the
end of 1993, The Colonel's had only been able to rebuild a portion of
optimum inventory levels. The Colonel's achieved its target inventory
levels by the end of 1994. The increase represents an inventory that is
generally based on 8 weeks of customer demand. The company considers an
11-13 week supply to be the appropriate level.

Assets held for sale consist of some rental property that The
Colonel's has for sale. The balance was reduced from $600,000 in 1993 to
$525,000 in 1994 because one property was sold. Four properties remain for
sale. The assets that will be sold as the result of the closing of the
Sarasota plant are in the current section of assets held for sale at the
lower of cost or the estimated net realizable value. Excess book value for
this machinery and equipment has been written off in 1994 in the amount of
$1,034,000.

Over the past two years, The Colonel's has loaned an affiliated
company and warehouse, The Colonel's Factory Warehouse of Arkansas, Inc.,
$2,138,000 for the purchase of capital equipment and reorganization. This
loan is secured by the majority shareholder's personal guarantee. This
affiliate is scheduled to begin making payments of principal and interest
beginning January 1, 1995. The Colonel's may continue to loan money for
the start up of operations and the purchase of new equipment. Another
affiliated loan in the amount of $695,117 to a business owned by one of The
Colonel's shareholders is currently paying interest each month at 1% above
prime and is collateralized by property and assets. The principal amount
is due on demand and is expected to be paid in full during 1995. See
"CERTAIN TRANSACTIONS."

70
Outstanding Loans

The Colonel's has a $4,500,000 line of credit that is secured by
accounts receivable and inventory which expires in August 1995. The
Colonel's expects to negotiate a renewal of the line of credit with the
current lending institution. The Colonel's pays interest at the prime rate
on a monthly basis. The outstanding balance against the line of credit was
$4,500,000 at year end.

The Term Note secured by machinery and equipment with a balance of
$1,275,000 at year end has been classified as short term since it will be
paid off in April 1995. The Colonel's pays $325,000 in principal plus
interest on a monthly basis calculated at 1% over prime on the outstanding
balance. The Term Note was The Colonel's long term debt that it used to
acquire the Sarasota facility and to purchase equipment. If the need arose
in the future, The Colonel's believes that it would be able to secure
additional financing using its assets as collateral.

During 1993 and 1994, The Colonel's received other short term bridge
loans from its primary lender for $4,500,000, $2,000,000, and $3,000,000
toward future fire proceeds. At year end, $1,500,000 of these loans still
remained unpaid. These loans provided working capital during the early
part of 1994 while The Colonel's was waiting for fire proceeds to be paid
by the insurance company. As fire proceeds were paid these loans were paid
off. The loans were used to finance the purchase of the machinery and
equipment and the construction costs associated with the setup of the Milan
plant and the expansion of the Sarasota facility to provide increased
capacity following the fire.

The Colonel's expects to secure new financing during the second
quarter of 1995 to finance additional tools. The Colonel's is currently
paying for additional tooling from operating income. The higher number of
tools that are expected to be delivered in May, June, and July will
necessitate the additional financing. During this period, the sales
volumes are also less due to seasonality. The Colonel's experiences a
moderate change of sales due to the change of the season.

The Owosso manufacturing facility was encumbered by a real estate
mortgage in the amount of approximately $1,800,000 at the time of the fire.
That mortgage included a pre-payment penalty that would have been triggered
if the insurance proceeds had been applied to retire the mortgage in 1994.
That penalty could have been passed back to The Colonel's because of loss
indemnification provisions in the lease. The landlord paid The Colonel's
an amount equal to the balance of the mortgage and The Colonel's assumed
the mortgage. The Colonel's used the cash paid from the landlord to reduce
indebtedness having a shorter maturity than the mortgage thereby
automatically extending the repayment of needed capital. The assumed
mortgage is cross collateralized by essentially all of The Colonel's assets
as are all the loans with the primary lender. The mortgage will be fully
paid by 1998.

Results of Operations

With The Colonel's broad product and customer base, the only
difference in sales levels through the year are caused by an increase in
product demand in areas of the market where winter weather increases
traffic accidents and vehicle damage. As a result, the first and fourth
quarters are generally stronger sales periods than the second and third
quarters. The company incurs additional costs during the third quarter
when it builds inventory levels to handle increased product demands during
the winter months.

Revenues for 1994 increased 13.2% to $28,492,000 from $25,175,000 in
1993 due to increased sales volume. The increase is primarily the result
of introducing 39 new products as well as recovering full production
capabilities after a fire destroyed The Colonel's main manufacturing
facility in 1993. See "Major Fire Loss and Insurance Claims." This fire
resulted in decreased revenue of 2.6% in 1993 to $25,175,000 from
$25,836,000 in 1992. The Colonel's was able to offset decreased
manufacturing capacity by increasing production to its Sarasota, Florida,
facility. The Colonel's expects revenue growth to continue in 1995 at or
near 1994 levels due to the additional products introduced in 1994,
notwithstanding an average price decrease of 9% in September 1994.

Cost of sales was 69% of sales in 1994 compared to 77% in 1993 and 67%
in 1992. The increase in the cost of sales in 1993 resulted from
inefficiencies experienced starting up production in the Milan, Michigan,
facility and increasing production in the Sarasota, Florida facility. In
1994, The Colonel's was able to restore its operating efficiencies close to
pre-fire levels; however, management expects the gross margins on products
in 1995 to change slightly due to sales price decreases and inefficiencies
in new employees.

Selling, general, and administrative expenses decreased 19.3% in 1994
to $5,101,000 from $6,319,000 In 1993. Selling, general, and
administrative expenses in 1993 of $6,319,000 represented an increase of
31.3% from $4,811,000 in 1992. In 1993, The Colonel's accrued
approximately $1.8 million for legal expenses. See "BUSINESS OF THE
COLONEL'S - Legal Proceedings." In addition, The Colonel's paid an
additional $270,000 and $490,000 in 1994 and 1993, respectively, of rent
due to entering the lease of the Milan facility while still paying rent on
the facility destroyed by fire. Management expects selling, general, and
administrative expenses to remain relatively flat in 1995.

Plant closing costs in 1994 represent approximately $355,000 of costs
accrued to close the Sarasota facility and a provision of approximately
$1,034,000 to write down assets to the lower of cost or net realizable
value of approximately $350,000. Accrued costs consist of estimates to
dismantle and dispose of the facility. The write down of assets consists
largely of tooling that duplicates assets at the Milan facility.
Management has determined duplicate tools are not needed for future

72
production, and has determined that such tools will be destroyed. The
remaining assets held for sale represent primarily machinery and equipment
that management intends to sell through various means.

Other income was 29.8%, 33.0%, and 6.1% of sales in 1994, 1993, and
1992, respectively. In 1994 and 1993, The Colonel's recorded gains of
approximately $9,082,000 and $9,043,000, respectively, which represent the
amount insurance proceeds exceeded the net book value of the assets
destroyed by fire. See "Major Fire and Insurance Claim." The amount of
gain recognized in 1993 represented management's best estimate of the
insurance proceeds to be received at that time. While management believed
that additional amounts would be forthcoming, The Colonel's and the
insurance company disagreed regarding the final settlement amount.
Therefore, the amount of gain recognized in 1994 represents the remaining
insurance proceeds received at the time such amounts became determinable.
The final settlement of the insurance claim was $31,000,000. Of that
amount, $6,630,000 was paid to the landlord, who is also The Colonel's
majority shareholder, for the Owosso building as indemnification for his
loss of the building pursuant to the lease.

The Colonel's is currently an S corporation for federal income tax
purposes. As such, The Colonel's earnings are not taxable to The
Colonel's, but are passed through to its shareholders. Upon consummation
of the proposed merger with Brainerd, The Colonel's will change its tax
status to a C corporation and will be subject to federal income taxes.
Based on The Colonel's historical level of earnings, management believes
that The Colonel's effective tax rate will be approximately 37% on an
ongoing basis.

The Colonel's accounts receivable increased as a result of an increase
in sales volume. The accrual for bad debt equates to approximately 12% of
accounts receivable. This includes a receivable in the amount of $150,000
due from a company that failed and went out of business in January 1995.
The ability of the company to collect any portion of this amount is remote.
The Colonel's from time to time will try to help a loyal, long time
distributor, by increasing a line of credit or extending credit terms in an
effort to help build or move to a new building, increase product line
coverage, or to ease tight competitive financial pressures. Other company
bad debts stem from bad or uncollectible checks written to the warehouses
for merchandise paid either on account or COD. All efforts are made to
collect these moneys by use of collection agencies and legal means. The
Colonel's policy with customers that continuously bounce checks is to
accept cash or certified checks only.

The Colonel's extends credit to each of its customers after they have
established a relationship through initial cash orders (subject to a credit
and reference check). Established credit relationships remain in effect
until a particular customer has fallen into default in its credit
arrangements. No further credit sales are made to a customer in default
until a satisfactory arrangement to cure its arrearages has been reached.

73
Individual customer credit limits are generally set at 1.5 times its
average monthly purchases. Customers whose payments are received by the
Milan office within 10 days after shipment receive a 5% discount on that
order. The discount is effected through a credit against their next
purchase.

The Accounts Receivable year end aging shows that 71.4% of the
accounts receivable were from 0-40 days, 7.3% were from 41-60 days, 9.4%
were from 61-90 days, and 11.9% were over 90 days (80% of the over 90 day
accounts were paid in full by the end of the second quarter of 1995). The
Colonel's accrues 0.5% of sales as a reserve for bad debts.

The Colonel's insurance premiums for the Sarasota plant increased
significantly during 1993 and remained high through 1994 as compared to
previous years because the plant was reclassified as located in a hurricane
district. Buildings in a hurricane district, after the recent disasters in
Florida, are charged a higher premium. The insurance rate increase equaled
168% compared to 1992.

Environmental Matters

The Colonel's ongoing operations generate waste and manufacturing
by-products in the form of excess plastic materials ("flash"), which is
trimmed off the manufactured bumpers in the finishing process, and
waterborne primer residue. Polyurethane flash is disposed of along with
cardboard and wood scraps as normal rubbish. Thermoplastic flash is
recycled in The Colonel's manufacturing process. Paint residue and paint
filters are periodically hauled away as non-hazardous waste. Lubricating
oils and greases used in maintaining presses and other machinery are
replaced and removed on a regularly scheduled basis; they are picked up and
removed from the site by a licensed hauler/recycler. The total removal
costs for those items is non-material.

The Colonel's is actively involved in remediating the site of its
former manufacturing facility in Owosso, Michigan. The mandated remediation
was necessitated by the June 1, 1993 fire, which melted building materials
and chemicals that were in turn dispersed over the site by the water poured
on the fire.

The final distinguishable category of environmental expense was
occasioned by the closing of the Sarasota, Florida manufacturing facility.
Federal and state environmental regulations require the dismantling and
removal of bulk tanks and any piping used to carry chemicals when
operations are discontinued. The Colonel's completed the required
dismantling and removals at the site and has been issued a final letter
from the Florida Department of Environmental Protection evidencing that
satisfactory completion.

74
Subsequent Events

In January 1995, The Colonel's entered into a settlement agreement
with its insurance carrier concerning the June 1, 1993, fire in Owosso,
Michigan. The global settlement in the amount of $31,000,000 covered all
claims for inventory, machinery and equipment, business interruption, and
the building on behalf of the landlord, that The Colonel's had or could
have asserted against its insurance carrier. See "Major Fire Loss and
Insurance Claim."

A long time customer of The Colonel's unexpectedly went out of
business in January 1995. The customer left an open receivable of about
$150,000 unpaid. The primary lender of the customer has substantially all
of the customer's assets encumbered. The Colonel's attempted to negotiate
an amicable settlement, but was unable to do so. The probability of
recovery with respect to this account is unlikely. The account receivable
was classified as bad debt and an accrual was booked in the 1994 financial
statements.

In February 1995, The Colonel's Board of Directors approved The
Colonel's combination with Brainerd which owns and operates Brainerd
International Raceway in Brainerd, Minnesota. Brainerd is a publicly held
company traded on the NASDAQ Small-Cap Market system. The terms of the
combination of The Colonel's and Brainerd are set forth in further detail
in this Proxy Statement. See "PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT."

Six Month Information

Liquidity and Capital Resources. The Colonel's current liabilities
were reduced from $16,051,000 at December 31, 1994 to $15,138,000 at
June 30, 1995 through regularly scheduled payments pursuant to outstanding
loan agreements.

The Colonel's completed the scheduled retirement of its last remaining
long-term debt (including the current portion) in May 1995 and retired a
$1,000,000 bridge loan that had been obtained to provide working capital
until certain insurance proceeds (discussed below) were received.

The Colonel's current assets were reduced by $4,839,000 from
December 31, 1994 to June 30, 1995, as a result of The Colonel's receiving
(and applying) insurance proceeds that had been accrued for at the end
of 1994. The Colonel's inventory levels increased $350,000 as a result
of production exceeding sales during the period.

The Colonel's added a second shift in April 1995 in order to better
balance production and sales levels. Cash required to be paid upon receipt
of new tools and for down payments on capital equipment that fell due
during the first quarter caused The Colonel's to obtain long-term
financing (discussed below) to meet the $4,451,000 cash shortfall and for
equipment down payments that fell due during the second quarter.

75
As noted above, The Colonel's completed the repayment of the remaining
balance of $1,275,000 due under its long-term note in May 1995. On May 15,
1995, The Colonel's renewed a $4,500,000 credit line with Comerica Bank for
a term ending May 15, 1996, secured by The Colonel's receivables and
inventory, and obtained a $6,000,000 long-term loan with Comerica Bank,
secured by all of The Colonel's assets. The latter loan agreement includes
covenants regarding net worth and debt-to-equity ratios. The Colonel's is
in compliance with those covenants. The loans from Comerica Bank to The
Colonel's are additionally secured by the personal guaranty of Donald and
Patsy Williamson. The terms of the loans require Comerica Bank's consent
for completion of the proposed Merger. Comerica Bank is aware of the
purposed Merger and has advised The Colonel's that it will furnish any
required consents for completion of the Merger.

The Colonel's entered into leasing agreements for approximately
$6,000,000 of new production equipment. Under the leases, the leasing
agency will pay all of the progress payments required until the equipment
is installed and accepted by The Colonel's. The Colonel's will pay monthly
interest on the outstanding advance for the progress payments at a rate of
8.75%. Once The Colonel's accepts the equipment, a long-term seven-year
financing lease will be executed which will include the purchase of all the
equipment at the termination of the lease for $1.

The Colonel's took delivery of or committed itself to the purchase of
additional tooling and capital assets totaling $6,000,000. Approximately
$1,500,000 of the cost of those assets will be paid through the proceeds of
the term note described above and the balance through capital leases.

Results of Operations. Sales revenues through the second quarter 1995
were approximately the same compared to the second quarter 1994. However,
the number of units sold was approximately 9% greater than first quarter 1994
unit sales. The Colonel's attributes that revenue increase to the
introduction of five new bumpers and a concentrated effort to increase
sales to its higher volume customers. The volume discounts offered as
part of the sale efforts accounts for the disparity between sales revenue
and volume.

Second quarter cost of goods sold decreased 13% over second quarter,
1994 costs of goods sold, due to decreased overtime and implementation of
the second shift in order to meet increased production demands. As a
result, gross profits increased from 24% for the second quarter, 1994 to 33%
for the second quarter, 1995.

Revenues from interest charged to customers increased by $13,000 over
revenue levels earned in the second quarter, 1995. Interest expenses
decreased by $190,000 for the same period compared to the second quarter,
1994, due to the low level of debt before refinancing.

The Colonel's retained its status as a S Corporation for federal income
tax purposes during the second quarter 1995; the income tax consequences of

76
The Colonel's activities passed through to its shareholders. The proposed
merger with Brainerd, when completed, will by operation of law make The
Colonel's a C corporation. Based upon The Colonel's historical earnings
level, management believes that, thereafter, The Colonel's effective tax
rate will be 37% except as federal corporate income tax rates may be
changed.

BUSINESS OF THE COLONEL'S

General

The Colonel's is a leading domestic manufacturer of plastic
replacement bumpers and facias for the automotive aftermarket industry in
North America. The Colonel's designs, manufactures and distributes plastic
bumpers, facias, support beams and brackets for application as replacement
collision parts for domestic automobile models. In addition, The Colonel's
purchases and resells plastic replacement bumpers and facias for use as
replacement collision parts on import automobile models and for models
manufactured domestically by foreign-based automobile manufacturers, and
manufactures parts for these models to a limited extent. The Colonel's
manufactures its products through the use of reaction injection molding and
plastic injection molding technology at its manufacturing facility in
Michigan.

The Colonel's distributes its products through warehouses operated by
The Colonel's or its affiliates located in Michigan, Texas, Arizona and
Arkansas. The Colonel's sells its products through a network of
independent distributors located in all fifty states, The District of
Columbia, Puerto Rico, Canada, Mexico and The Bahamas.

The Colonel's strategy is to provide a readily available, high
quality, low cost alternative to original equipment manufacturer ("OEM")
replacement bumpers, facias and other plastic components through The
Colonel's streamlined manufacturing process and extensive distribution
network.

Products

The Colonel's designs, manufactures and distributes plastic bumpers,
facias, support beams and brackets for application as replacement collision
parts for current, high volume, domestic automobile models. The Colonel's
additionally purchases and resells plastic bumpers and facias for
application as replacement collision parts on current, high volume, import
automobile models, including automobiles manufactured domestically by
foreign-based companies. The products manufactured and sold by The
Colonel's are primarily plastic molded front and rear bumper panels
designed for application to specific automobile makes and models. The
Colonel's products are sold for distribution to collision repair shops,
dealers and others in the automobile aftermarket collision industry and are

77
used for the replacement of damaged automobile bumpers and related
components.

The table set forth below shows The Colonel's sales for the years
ended December 31, 1994, 1993 and 1992 divided between products which are
manufactured by The Colonel's and products which are purchased by The
Colonel's from other manufacturers and marketed by The Colonel's:

<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C> <C>
Manufactured Products 89% 90% 91%
Purchased Products 11% 10% 9%
</TABLE>

Each product manufactured or distributed by The Colonel's is designed
for application to an automobile of a specific make, model and year.
Certain products may have more than one application because different but
similarly designed automobile models may have identical bumpers or plastic
molded components or because different years of the same model automobile
may have identical bumpers or plastic molded components. In selecting
products to manufacture and distribute, The Colonel's targets high volume
automobile models and models that statistically incur a higher frequency of
accidents, since these models support a higher volume of product sales for
each dollar invested in production tooling.

A majority of the specified parts manufactured by The Colonel's are
produced to meet the design standards and engineering tolerances of the
Certified Auto Parts Association ("CAPA"), a national standard setting
organization. A sticker acknowledging compliance with these standards and
tolerances is affixed to each certified part manufactured by The Colonel's.
CAPA is an independent association that publishes specifications for high
quality aftermarket automobile body parts and certifies specific products
as equivalent to factory built service and replacement body parts. CAPA
only certifies parts for domestic automobile models. Approximately 80% of
the automotive components manufactured by The Colonel's are examined and
tested by CAPA and are certified as equivalent or superior to comparable
OEM replacement parts in terms of fit, form, function and material grade.
The Colonel's certified products are listed in the nationally distributed
CAPA Directory of Certified Competitive Auto Parts and the CAPA
certification of The Colonel's products is generally relied upon throughout
the automobile aftermarket industry and the automobile insurance industry
as an assurance of quality and dependability.

As of December 31, 1994, The Colonel's manufactured and distributed
molded plastic replacement components for a total of 409 automotive
applications and purchased and distributed replacement components for
approximately 1,300 automotive applications. The Colonel's anticipates
continuing to manufacture and distribute replacement components for an

78
equal or greater number of applications in future operations. Although The
Colonel's has no specific plans at this time to manufacture additional
types of plastic automotive replacement components, The Colonel's believes
that there are numerous additional automobile applications for its
manufacturing process including doors, hoods, fenders and other body or
interior components and believes that plastic components will continue to
be utilized in an increased number of applications by automobile OEMs.
Only new tooling for the injection presses and certification of new
products need be obtained to add additional applications to existing lines.
Additionally, The Colonel's existing manufacturing facilities have the
capacity to produce an increased volume of products through the addition of
workshifts.

The Colonel's present inventory of new bumpers covers 330 different
bumper applications. According to their most recent sales brochures and
literature, none of The Colonel's domestic competitors offer more than 98
applications and none of its foreign competitors offer more than 190.
Although The Colonel's believes that it is number one in sales of non-OEM
aftermarket automotive bumpers, specific sales information is not available
on The Colonel's competitors because they are privately held companies and
do not publicly report sales information.

The Colonel's believes it maintains a significant market advantage by
offering its automotive replacement components at lower prices than those
offered by OEMs for comparable replacement components. The Colonel's
believes that its products are equivalent in quality, durability and
function to OEM manufactured replacement components, but are generally sold
at prices which are less than the OEM suggested list price. Furthermore,
The Colonel's believes its competitive pricing secures a significant market
advantage for its products in the aftermarket collision industry.
Competitive pricing of collision parts is generally believed to be
particularly important to automobile insurance companies which fund the
purchase of a significant percentage of automotive crash replacement parts.

The Colonel's provides a limited lifetime warranty against defects in
material and workmanship and guarantees that the products generally meet or
exceed factory and industry specifications.

The Colonel's has no patents or licenses with respect to its products.

Manufacturing

The Colonel's uses two distinct chemical processes to manufacture its
plastic products. The production cycle for each process is similar. Raw
materials are introduced into a machine press that contains a machined tool
or mold. Heat and pressure are applied to the raw materials, forcing them
into the shape of the mold. The resulting plastic molded part is then
removed from the molds to an adjacent work station where small amounts of
excess plastic are trimmed from each part. After trimming, the part is
cleaned and placed on a conveyor belt leading to the paint application

79
room. There, the part is typically painted with a water-based black primer
finish. After the finish is dried in infrared ovens on the conveyor belt,
each part is then labeled and placed in a plastic bag, packaged in boxes of
five and shipped or stored for shipment.

The Colonel's primarily uses custom molding machines manufactured by
Cincinnati Milacron, which management believes are generally recognized as
state-of-the-art for the industry. The toolings are primarily made of zinc
alloy or steel and are built to The Colonel's specifications. The
Colonel's presently maintains over 297 specially designed tools, enabling
production of approximately 409 different automotive applications.

The primary manufacturing process used by The Colonel's is referred to
as Reaction Injection Molding or the "RIM" process. Because the RIM
process is a low-temperature, low-pressure operation, The Colonel's can use
zinc alloy tools for a majority of its manufacturing. Zinc alloy tools are
less expensive to build than conventional steel injection molds.

The raw materials for the RIM process, consisting of polyol and
polyisocyanate, are available from several sources. The materials are
stored in two large closed tanks and are distributed to the presses by a
computer-regulated flow monitoring system. In the RIM process, two
reactive streams (a polyol containing extenders, catalysts and a blowing
agent; and a polyisocyanate) are mixed together under controlled
temperature and pressure while being injected into the tooling attached to
each press.

The RIM tool is filled to approximately 90% of capacity during the
injection process. A chemical reaction causes the material to heat and
expand, forcing air out through a vent, and allowing the material to fill
the mold completely. The result is a microcellular plastic elastomeric or
polyurethane part. The polyurethane part produced is lightweight,
corrosion resistant, and will recover its original form after minor impact,
lessening the likelihood of automobile body damage at very low speeds.

An alternative process used by The Colonel's is referred to as
injection molding. In injection molding, small pellets containing reactive
polymers and catalysts are melted through heat and pressure. The melted
material is forced into the mold until it is completely filled. The result
is a thermoplastic olefin polypropylene part. A significant benefit of
this process is that excess plastic can be reused after it has been trimmed
off a completed part. Additionally, a part manufactured using this
injection molding process that is damaged in production or rejected as
scrap for quality-control reasons can be reground into pellets and
completely recycled and used as raw material in the injection molding
process. The recycling ability offered by the injection molding process
appears increasingly important with steadily rising solid waste disposal
costs.

80
At the end of each production run, the tooling and the last part
produced by the tooling are inspected by production personnel. Preventive
maintenance and repair of the tooling are performed on-site by The
Colonel's tool and die personnel in order to minimize waste, reduce down-time,
prolong tooling life, and maintain product quality.

The Colonel's manufacturing facility in Milan, Michigan houses 7
reaction injecting molding machines and 6 injection molding machines. Those
machines had the combined capacity to produce the number of units sold in
1994 without operating a second or third shift. The Colonel's believes
that it will be able to fully meet all of its customers' 1995 and 1996
orders by running a first shift year round and a limited second shift
workforce during the six month period of time preceding and during the
Winter months, when demand for automotive crash parts is traditionally the
greatest.

The Colonel's has purchased raw materials from two primary suppliers,
Dow Chemical Company and Montel, Inc. (Highmont Advanced Materials) on open
credit terms for over ten years. The Colonel's does not maintain any fixed
quantity or requirements contract with either supplier. The Colonel's is
not contractually obligated to purchase any minimum quantity from either
supplier and neither supplier is obligated to sell product to The Colonel's
at any predetermined quantity or any predetermined price. The Colonel's
generally estimates and orders raw materials for production by individual
purchase orders at approximately ten-day to two-week intervals. Similarly,
The Colonel's orders molding machines and tooling from Cincinnati Milicron
by individual purchase order and does not maintain any agreement with
Cincinnati Milicron concerning the purchase of manufacturing equipment.
The Colonel's has not experienced any material difficulties in obtaining
raw materials or equipment for production as needed and management of The
Colonel's believes that the absence or unavailability of any current source
of raw materials or equipment for production would not have a material
adverse effect on The Colonel's because an adequate number of alternative
sources for both raw materials and production equipment exist to satisfy
production requirements in a timely manner.

Distribution and Sales

The Colonel's products are distributed nationally from The Colonel's
manufacturing facility and from affiliated warehouse facilities. The
Colonel's manufacturing facility is located in Milan, Michigan. Products
are shipped by The Colonel's directly from its manufacturing facility to
customers or to distribution warehouses operated by The Colonel's or its
distributors. The Colonel's does not maintain any fixed quantity or
requirement contracts (or distributor agreements) with any customers. All
sales are made in response to individual orders from customers and
distributors. Price terms are determined by the volume each customer buys
during each calendar month and credit terms are standard. The Colonel's
believes that its success has been achieved in part because of an emphasis
on rapid delivery of customer orders. To accomplish this, The Colonel's

81
maintains large inventories of the products it manufactures. The
Colonel's, Inc. fills orders from existing inventory stock and does not
build parts to fill a particular customer's order. Customer orders are
generally filled and shipped within 48 hours after their receipt. For
these reasons, The Colonel's has virtually no backlog of product orders.

The Colonel's Vice President of Sales and a staff of four sales
personnel have responsibility for sales and distribution of The Colonel's
products, promotion and advertising. The sales staff is located in a 1000
square foot sales office owned by The Colonel's and located in Flint,
Michigan.

The Colonel's also operates a warehouse distribution facility in
Houston, Texas. The distribution facility is approximately 25,410 square
feet in size, has four full-time employees of The Colonel's and is leased
by The Colonel's pursuant to a lease agreement having a term through July
1998.

The Colonel's operates a second warehouse distribution facility in
Dallas, Texas. This distribution facility is approximately 25,000 square
feet in size, has five full-time employees of The Colonel's and is leased
by The Colonel's pursuant to a lease agreement having a term through
September 1995.

The Colonel's operates a third warehouse distribution facility in
Phoenix, Arizona. This distribution facility is approximately 52,360
square feet in size, has four full-time employees of The Colonel's and is
leased by The Colonel's pursuant to a lease agreement having a term through
January 2000.

The Colonel's Factory Outlet of Arkansas, Inc., an Arkansas
corporation, in addition to operating a warehouse and distribution facility
of approximately 45,000 square feet for The Colonel's, manufacturers chrome
plated steel bumpers and custom chrome trim pieces. The Colonel's Factory
Outlet of Arkansas, Inc. occupies a 55,000 square foot manufacturing
facility and its products are sold to The Colonel's Distribution Warehouses
and to many of the same customers as The Colonel's. Donald J. Williamson,
the principal shareholder of The Colonel's, owns all of the issued and
outstanding capital stock of The Colonel's Factory Outlet of Arkansas, Inc.

The Colonel's maintains a fleet of 28 trucks for the transportation
and distribution of its products. The Colonel's trucks are maintained
pursuant to capital and operating equipment leases and are operated by 21
full-time drivers employed by The Colonel's. Approximately 60% of The
Colonel's products are delivered by The Colonel's trucks. The balance of
The Colonel's products are shipped by common carrier FOB to customer's
location at the customer's expense. The means of delivery utilized by The
Colonel's in combination with fairly flexible manufacturing processes,
allows orders to be filled on a substantially faster basis than by OEM
competitors. Plastic replacement parts for import model automobiles

82
purchased by The Colonel's internationally, for domestic resale, are
generally transported to distribution warehouse facilities at The Colonel's
expense.

The Colonel's products are principally marketed through independent
sales representatives and are sold primarily to automobile collision body
shops, automobile aftermarket supply stores and to regional and national
chain stores that sell automobile aftermarket parts. There are
approximately 180 independent sales representatives for The Colonel's
products who are located in all 50 states, The District of Columbia, Puerto
Rico, Canada, Mexico and The Bahamas. Independent sales representatives
for The Colonel's are not limited to exclusive sales of The Colonel's
products and The Colonel's does not have any written agreements with its
independent sales representatives. Compared with OEMs that generally sell
only their own parts to service departments in a dealership network, The
Colonel's offers a relatively full line of replacement bumpers and facias
for multiple automobile models and sells directly to distributors, body
shops, automobile service centers and retail customers.

The Colonel's sold product to over 290 customers throughout the United
States, Canada, Mexico and the Caribbean in the first quarter of 1995. The
Colonel's customer base has grown in each of the last ten years. In each of
the last three years, at least 96% of the prior year's customers have
continued to order product from The Colonel's. None of The Colonel's 290
active customers represent more than 10% of total sales.

The Colonel's participates in industry and automotive trade shows each
year, including Automobile Body Parts Association, Bumper Recyclers
Association of North America and NACE, at which The Colonel's promotes its
lines of plastic bumpers, facias, support beams and brackets. The
Colonel's products are reviewed in national industry publications such as
Collision Parts Journal, Body Language, and Voice of the Automotive Body
Parts Association and approximately 80% of The Colonel's products are
listed in the Certified Automotive Parts Association Directory of
Aftermarket Body Parts. The Colonel's also promotes its products through
advertisements in specialized trade and consumer magazines, through
distribution of various professionally prepared product catalogs and
brochures and through publication of a quarterly newsletter distributed to
customers. In addition, The Colonel's sponsors an annual conference and
golf outing with its major customers and suppliers in order to strengthen
customer and supplier relations and facilitate feedback with respect to
product performance, emerging technology and current market demands.

Competition

The automotive aftermarket for plastic replacement bumpers and facias
is highly competitive. The market is dominated by OEMs such as General
Motors Corporation, Ford Motor Company, Chrysler Corporation, Toyota Motor
Sales, U.S.A. Inc. and Nissan Motor Corp., U.S.A. These OEMs are more
established and have greater financial resources than The Colonel's. These

83
larger OEMs, however, also generally charge higher prices than The
Colonel's for their products and generally distribute their products
through their own automobile dealership networks rather than through
independent distributors and body shops. Automobile insurance companies
have successfully advocated the use of less expensive parts by body shops,
and OEMs have lost market share in the collision parts market as a result.
This may lead OEMs to reduce their prices or pursue such strategies as
industrial rights litigation against aftermarket parts competitors.

In addition, The Colonel's competes with other non-OEM manufacturers
of plastic bumpers for the automotive aftermarket industry in North
America. The Colonel's believes it is larger and offers a wider selection
of products than any of its non-OEM competitors. Recycling companies and
auto salvage companies also compete with The Colonel's; however, The
Colonel's believes that such competitors are generally small in size,
service only local or regional markets, and offer products of varying
quality.

There are also a number of potential competitors to The Colonel's for
the non-OEM market. Certain Asian-based companies manufacture replacement
plastic automobile bumpers and facias for imported and domestically made
foreign automobiles. The major Asian-based companies that offer competing
products for sale in North America are Tan Yang and Legion Mold, Tool &
Manufacturing Co., Ltd. There can be no assurance that these foreign-based
companies that manufacture plastic automotive replacement parts will not
enter the domestic replacement bumper and facia market and directly compete
with The Colonel's products.

Plant Fire and Insurance Settlement; Properties

On June 1, 1993, The Colonel's leased facility in Owosso, Michigan,
which included its headquarters, sales offices, and principal manufacturing
and warehouse facilities, was destroyed by a fire. The fire caused a
complete loss of the 280,000 square foot leased facility and damaged
inventory, equipment and other contents therein. As a result of the fire,
The Colonel's transferred certain of its headquarters personnel and
production to its production facility located in Sarasota, Florida, on an
interim basis, to supplement a portion of the lost production of the Owosso
facility.

In November 1993, the Company relocated its principal operations and
headquarters to Milan, Michigan, and is leasing a 350,000 square foot
facility from a company owned by the shareholders of The Colonel's. The
Colonel's began production at the Milan facility in December 1993 and was
producing the company's full range of products by August 1994.
Subsequently, The Colonel's has ceased manufacturing operations in Florida
and all manufacturing is now conducted at the Milan facility. The
Colonel's believes the Milan manufacturing facility is suitable for the
company's requirements and has adequate capacity to accommodate foreseeable
production demands. In addition to The Colonel's single manufacturing

84
facility located in Milan, a description of all other sales and
distribution facilities used by The Colonel's is contained under
"Distribution and Sales."

The Colonel's finalized negotiations with its insurance carrier for
amounts to be received on all coverages in effect at the date of the fire.
Total insurance proceeds received for the replacement cost of lost
property, lost profits, and other direct costs of the fire were
approximately $31,000,000, of which approximately $6,630,000 was due to a
shareholder as indemnification of damages to the Owosso facility. The
Colonel's has recognized in other income a net gain of approximately
$9,082,000 and $9,043,000 in 1994 and 1993, respectively, which represents
the amount by which the Colonel's insurance proceeds of $24,370,000
exceeded the sum of the net book value of the assets destroyed and the
liabilities resulting from the fire.

Possible Industrial Design Claims and Litigation

The Colonel's manufactures replacement automobile parts which
substantially resemble original automotive parts manufactured by domestic
and foreign OEMs. The Colonel's marks and packages its products with its
corporate name and distributes its products in such a manner so as not to
lead purchasers to conclude that they are purchasing OEM-manufactured
collision parts. The Colonel's is aware that some potential exists for
marketplace confusion notwithstanding The Colonel's efforts to avoid
product confusion. For example, defective OEM-manufactured parts are
sometimes mistakenly returned to The Colonel's for replacement under The
Colonel's product warranty. Other companies in the collision parts
industry have from time to time been the subject of claims and lawsuits
brought by OEM's based on claims of intellectual property-right
infringements. While The Colonel's has not to date received any such
claims or been subjected to any such litigation and is not aware of any
threatened or contemplated claims concerning design rights or intellectual
property, there can be no assurance that future claims will not be made or
that litigation will not be commenced against The Colonel's based on
allegations of infringements of intellectual property rights. There also
can be no assurance that if any such claims are made or litigation
commenced, that such claims or litigation would not adversely affect The
Colonel's operations.

Possible Federal Industrial Design Legislation

Legislation has been introduced in the United States House of
Representatives on a number of occasions that would provide a mechanism for
registration of certain product design features and would expand copyright
protection for designs of replacement parts. If enacted, such legislation
might prohibit The Colonel's from manufacturing and distributing its
products using shapes and designs similar to those of OEMs that register
design features of automobile bumpers or components. Such a prohibition
could require The Colonel's to commit significant additional funds to

85
analyze the product design of products of its OEM competitors. Even if The
Colonel's were to undertake such additional analysis, there can be no
assurance that The Colonel's product designs would not be subject to
challenge by OEMs. The Colonel's could be required to expend significant
resources for the defense of such challenges, and it could be exposed to
liability if it was found to have violated a valid design registration.
Accordingly, passage of such legislation could effectively preclude The
Colonel's from continuing its operations. It is not possible to predict
whether legislation will, in fact, ever be passed. If such legislation is
enacted, however, it is probable that it would adversely affect The
Colonel's. Such legislation has been introduced on a number of previous
occasions and has never been enacted into law due primarily to strong
opposition by the automobile collision repair industry, the automobile
insurance industry and by various consumer organizations interested in
preserving competition for automotive collision parts. For these reasons,
The Colonel's management does not believe that any such legislation is
likely to be enacted into law in the foreseeable future. The Colonel's is
not aware of any industrial design protection legislation currently pending
or under consideration in the United States Congress. However, there can
be no assurance that such opposition will prevent the passage of "design-rights"
legislation or the passage of compromise legislation which could
extend design rights for OEM automobile parts.

Foreign Industrial Design Protection Laws

The Colonel's presently distributes and sells its products in Canada
and Mexico. Such sales represented 4.3% of sales for 1994. Canadian law
extends protection for a period of up to ten years to registered industrial
designs having novelty in appearance as opposed to novelty of mechanical
construction, physical composition, or method of operation. Mexican law
extends protection for a period of up to seven years to registered designs
under ornamentality and novelty standards similar to Canadian law. The
Colonel's management believes that most bumper and facia designs lack the
requisite degree of novelty to qualify for design registration in Canada or
Mexico. The Colonel's has not been the subject of or threatened with any
design right claims under Canadian or Mexican law; however, there can be no
assurance that The Colonel's will not be the subject of future design
rights claims under Canadian or Mexican law or that Canada or Mexico will
not amend existing laws or enact more restrictive protections for
industrial design rights that could adversely affect sales of The Colonel's
products in those countries.

Possible Addition of Industrial Design Provisions to General Agreement on
Tariffs and Trade

Representatives from numerous countries meet periodically to negotiate
changes in the General Agreement on Tariffs and Trade ("GATT"). GATT
determines the basic rules for trade between countries that are signatories
to the Agreement. In April 1994, 124 countries, including the United
States, signed a trade agreement concluding more than seven years of talks

86
under the Uruguay Round of GATT. The Uruguay Round agreement extends the
term of GATT and reduces or removes tariffs and trade barriers among member
nations. The Uruguay Round agreement was approved by the U.S. Congress and
signed by President Clinton in December of 1994 and will take effect in
1995 when ratified by all the member nations.

As extended in the Uruguay Round, GATT will provide greater protection
for intellectual property rights, such as patents, trademarks and
copyrights. Although it was reported that restrictive protections for
automotive parts made by OEMs and possible "industrial design rights" were
considered, no such specific provisions are included in GATT as extended.
If restrictive design rights for OEM automotive parts were ever adopted as
a part of the GATT agreement, it might have a significant adverse impact on
The Colonel's business. Under the Uruguay Round agreement, GATT member
nations are scheduled to reconvene in the year 2000 to consider further
terms for market liberization and trade expansion.

Employees

As of December 31, The Colonel's had approximately 174 full-time
employees (including leased employees as described below), including 14
salaried managerial and administrative employees and 160 hourly employees.
The Colonel's also employs one part-time employee. Of the total number of
employees, 138 were in manufacturing, and the balance were in sales,
marketing, administrative and executive positions. The Colonel's considers
its employee relations to be good.

Approximately 144 of the hourly workers at the Milan facility are
leased from Payroll Transfers Incorporated, an employment brokerage
service. Payroll Transfers Incorporated ("PTI") provides benefits to these
employees and also pays for workers compensation insurance payroll taxes
and paychecks covering these employees. The Colonel's pays a service fee
to PTI in accordance with a contract between PTI and The Colonel's.

Legal Proceedings

The Colonel's has reserved a total of $2,895,406 against claims (which
amount includes estimated defense costs) asserted by opposing parties in
five, unrelated lawsuits:

1. Irving J. Baranski et al. v. The Colonel's, Inc. The Colonel's
was a defendant and counter-plaintiff in a lawsuit filed by Plaintiffs
Irving J. Baranski, Betty Baranski, Robert J. Armstrong and Gayle
Armstrong, in Case No. 94-1204-CA-01 in Sarasota County Circuit Court (12th
Judicial District), Sarasota, Florida. Plaintiffs alleged that their company
(Nupar, Inc.) fully performed its obligations under a contract in which
Nupar agreed to sell assets to The Colonel's. They alleged that they were
therefore entitled to receive $1,800,000 in consulting fees under an
ancillary agreement. The Colonel's sought a judgment against the plaintiffs
for damages arising from breaches of covenants given by plaintiffs and

87
Nupar in the asset sale contract. These proceedings were settled in
July 1995 under an agreement pursuant to which The Colonel's will pay the
plaintiffs $1.4 million over the next two years, without interest.

2. Micro Platers Sales, Inc. and Micro-Rim Corporation v. The
Colonel's, Inc. The Colonel's is the defendant in a suit filed by Micro
Platers Sales, Inc. and Micro-Rim Corporation on December 5, 1991, in Case
No. 91 CV 40563 FL in the United States District Court, Eastern District of
Michigan, Flint, Michigan. The plaintiffs allege that The Colonel's has
monopoly power in the replacement bumper market and they seek damages under
the Federal antitrust statutes arising from The Colonel's alleged use of
predatory pricing on two bumpers to keep Micro-Rim from entering the market
and The Colonel's alleged subsequent refusal to sell bumpers to Micro
Platers, which is Micro Rim's parent company. In order to end the rising
cost of this litigation and not as an admission of responsibility, The
Colonel's formally offered to stipulate to the entry of a $160,000 judgment
under Federal Rule of Civil Procedure 68 in February, 1994. Based upon the
plaintiffs' latest admissions of no damages on all but two of their
previously pled claims, The Colonel's believes that amount is far more than
sufficient to cover any liability arising from the alleged sale of 1,900
bumpers at a price below their average variable cost. Unless the plaintiffs
obtain a judgment in excess of $160,000, The Colonel's will be entitled to
receive its post-February, 1994 defense costs, which presently total more
than $249,000. The Colonel's is the plaintiff in a companion case, The
Colonel's, Inc., et al, vs. Micro Platers and seven other defendants, which
was consolidated by the United States District court with Case 40563. The
Colonel's believes that any damages that would result from an adverse jury
verdict on the antitrust claim will be offset by the damages that The
Colonel's and a co-plaintiff, Blain Distributing Company, are seeking for
the opposing party's illegal actions, taken in concert with the other two
named parties, to force The Colonel's to stop selling products to Blain
Distributing Company, which competed with those parties.

3. Smillie Plumbing & Heating, Inc. v. The Colonel's, Inc. et al.
The Colonel's is an additional named party defendant in a civil action
brought against a contractor, Unique Creations, Inc., which contracted with
The Colonel's to design, fabricate and install the automated paint line
system in The Colonel's Milan, Michigan manufacturing facility. The
lawsuit, Smillie Plumbing and Heating, Inc. v. The Colonel's, Inc. and
fourteen other defendants, was filed on July 20, 1994 in Monroe County
Circuit Court Case No. 94-2727-CH after it was discovered that the
contractor, Unique Creations, Inc., owed its subcontractors $71,000 more
than The Colonel's would owe Unique if and when Unique completed its
contract with The Colonel's. The Colonel's has purchased 10 of the 13
subcontractors' construction lien claims and expects to resolve the
remaining three for less than $44,000. The Colonel's cannot place a value
on any expected recovery on its own claim to over $200,000 in damages and
reimbursement from the contractor, which is insolvent and out of business.

88
4. Frank J. Kelley, Attorney General of the State of Michigan, ex
rel, The Michigan Department of Natural Resources v. The Colonel's, Inc.
The Colonel's was the named defendant in a civil action brought against it
by the Michigan Department of Natural Resources on October 30, 1994 in
Monroe County Circuit Court Case No. 94-2942-CE. This case arose from the
failure of The Colonel's paint line system contractor, Unique Creations,
Inc., to obtain an air quality installation permit before beginning to
install the paint line in November, 1993. The Colonel's, Inc. and the MDNR
negotiated a $200,000 settlement of all claims raised in that suit. The
Colonel's timely paid that amount and an order was entered by Judge Michael
W. LaBeau on May 4, 1995, dismissing the action upon the parties' earlier
stipulation that both had fully performed their obligations under the
settlement agreement.

5. The Colonel's, Inc. v. Cincinnati Milacron Marketing Company.
The Colonel's is the plaintiff and counter-defendant in a suit that it
filed on February 14, 1994 in Monroe County Circuit Court against
Cincinnati Milacron Marketing Company. That action was later removed on
defendant's motion to the United States District Court, Eastern District of
Michigan, Detroit, Michigan and has been assigned Case No. 94 CV 70690 DT.
The underlying controversy arose because a machine, as delivered, did not
have the capacities promised at the time The Colonel's issued a purchase
order for the machine. The trial court has issued an interim ruling that
The Colonel's cannot introduce evidence regarding those promises unless
they were incorporated in a writing signed by the defendant. The defendant
sold the rejected machine to another buyer for more money than The
Colonel's purchase order required it to pay, but has filed a counterclaim
seeking its costs for finding another buyer and for lost profits. The
Colonel's believes the vendor will be found not to be entitled to damages
and may owe The Colonel's the difference between the sales prices, because
Cincinnati Milacron asserted its rights as a secured party and not as an
unsecured seller. The Colonel's cannot appeal the trial court's ruling
regarding its damages against Cincinnati Milacron until the case has been
completely resolved at the trial level.

The Colonel's is involved in various other legal proceedings which
have arisen in the normal course of its operations. While the results of
such proceedings and those discussed in the five preceding paragraphs
cannot be predicted with certainty, management believes that any amounts
that may be required resulting from the final outcome of such matters in
addition to amounts presently accrued will not have a material adverse
effect on The Colonel's financial position or results of operations.

Environmental Remediation

The Colonel's is responsible for the cleanup of hazardous materials
and ground contamination located at the Owosso, Michigan facility as a
result of the fire. See "Plant Fire and Insurance Settlement; Properties."
In August 1993, the Michigan Department of Natural Resources required that
The Colonel's perform a complete hydrogeological study of this site to

89
determine the extent of the contamination. The Colonel's will engage
environmental consultants in the summer of 1995 to determine the extent of
the hazardous materials located at this site, if any, and the cost of any
cleanup. The cost of any cleanup that may be required at the Owosso site
is not expected to have a material adverse impact on the financial position
or results of operations of The Colonel's.

As part of the lease agreement with a related party for the Milan,
Michigan facility, The Colonel's is also responsible up to an amount of
$2,000,000 for the remediation of hazardous material, if any, that existed
at this site prior to The Colonel's entering into the lease in June 1993.
The Colonel's has accrued reserves for all estimated cleanup costs based on
an environmental study of the site. The cost of any remediation that may
be required at the Milan facility is not expected to have a material
adverse impact on the financial position or results of operations of The
Colonel's.

UNAUDITED PRO FORMA COMBINED SELECTED
FINANCIAL DATA AND CONDENSED FINANCIAL INFORMATION

Brainerd and The Colonel's Pro Forma Combined Selected Financial Data
(Unaudited)

The following unaudited pro forma combined selected financial data
accounts for the Merger as a purchase of Brainerd by The Colonel's. For
the purpose of the pro forma combined financial information, the purchase
price is assumed to be approximately $1,494,000, which is the estimated
fair value of 97.5% of Brainerd at $2.26 per share. This unaudited pro
forma combined financial data should be read in conjunction with the
unaudited pro forma condensed combined balance sheet and statement of
income appearing elsewhere in this section. The unaudited pro forma
financial information has been included as required by the rules and
regulations of the Commission, is provided for comparative purposes only,
and does not purport to be indicative of the results that actually would
have been obtained if the Merger had been effected on the dates indicated
or of those results that may be obtained in the future.

<TABLE>
<CAPTION>
Combined
Operations for Year Historical December 31, 1994 Pro Forma Pro Forma
Ended December 31, 1994 Colonel's Brainerd Adjustments December 31, 1994
<S> <C> <C> <C> <C> <C>
Net Sales $28,492,013 $2,449,923 $30,941,936
Net Income 10,887,714 170,181 (3,752,000) 7,305,895
Net Income
per Share $1.81 $0.25 $0.30
</TABLE>

90
<TABLE>
<CAPTION>
Combined
Operations for Six Months Historical June 30, 1995 Pro Forma Pro Forma
Ended June 30, 1995 Colonel's Brainerd Adjustments June 30, 1995
<S> <C> <C> <C> <C> <C>
Net Sales $14,651,145 $481,616 $15,132,761
Net Income
(loss) 2,401,020 (295,509) (784,519) 1,328,992
Net Income
(loss) per
Share $.40 $(.43) $.05
</TABLE>

<TABLE>
<CAPTION>
Combined
Historical June 30, 1995 Pro Forma Pro Forma
Financial Condition Colonel's Brainerd Adjustments June 30, 1995
<S> <C> <C> <C> <C> <C>
Total Assets $30,833,083 $2,615,368 $ 496,375 $33,944,826
Long-Term
Obligations 5,077,474 525,738 1,395,000 6,998,212
Book Value
per Share $1.76 $1.94 $.45
</TABLE>

Brainerd and The Colonel's Pro Forma Condensed Combined Balance Sheet
(Unaudited)

The following unaudited pro forma condensed combined balance sheet
combines the condensed balance sheet of Brainerd at June 30, 1995, with
the condensed balance sheet of The Colonel's at June 30, 1995, accounting
for the Merger as a purchase of Brainerd by The Colonel's, as though the
Merger had occurred as of June 30, 1995. The pro forma amounts assume The
Colonel's converted to a C corporation for federal income tax purposes.
This unaudited pro forma condensed combined balance sheet should be read in
conjunction with the accompanying historical financial statements and
related notes thereto of Brainerd and The Colonel's, and their respective
management's discussion and analysis of financial condition and results of
operations, appearing elsewhere in this Proxy Statement.

91
<TABLE>
<CAPTION>
Combined
Historical June 30, 1995 Pro Forma Pro Forma
Colonel's Brainerd Adjustments June 30, 1995
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 224,486 $ 377,534 $ 602,020
Accounts receivable 2,420,593 0 2,420,593
Inventories 6,046,165 0 6,046,165
Notes receivable 425,927 0 425,927
Other current assets 611,806 31,435 286,000<FN1>
23,000<FN3> 952,241

Total current assets 9,728,977 408,969 309,000 10,446,946

Property, Plant and
Equipment, net 13,322,157 2,206,399 187,375<FN2> 15,715,931

OTHER ASSETS:
Notes receivable 3,519,561 0 3,519,561
Other long-term assets 4,262,388 0 4,262,388
Total other assets 7,781,949 0 0 7,781,949

TOTAL ASSETS $ 30,833,083 $2,615,368 $ 496,375 $ 33,944,826

LIABILITIES AND
SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Notes payable $ 4,200,000 $ 4,200,000
Current portion of
long-term obligations 2,973,584 76,021 3,049,605
Other current liabilities 7,965,092 700,605 8,665,697
Total current liabilities 15,138,676 776,626 0 15,915,302

LONG-TERM LIABILITIES 5,077,474 525,738 1,054,000 <FN1>
341,000 <FN3> 6,998,212
SHAREHOLDERS' EQUITY:
Common stock 602,100 6,778 (367,100)<FN2> 241,778
Additional paid-in capital 1,244,511 3,432,303 367,100 <FN2>
(1,938,702)<FN2> 3,105,212
Retained earnings
(Accumulated deficit) 8,770,322 (2,126,077) 2,126,077 <FN2>
(318,00) <FN3>
(768,000)<FN1> 7,684,322
Total shareholders' equity 10,616,933 1,313,004 (898,625) 11,031,312

TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 30,833,083 $ 2,615,368 $ 496,375 $ 33,944,826
92
<FN>
<FN1> Represents the deferred taxes at December 31, 1994.
<FN2> Represents the reclassification from common stock to additional paid-in capital due to the recapitalization in
connection with the Merger, the increase in shareholders' equity and property, plant and equipment due to
purchase accounting. The purchase price was calculated using the price per share of $2.26 paid April 6, 1995,
for a controlling interest in Brainerd, as follows:

Outstanding shares of Brainerd Common Stock
at $2.26 (rounded) . . . . . . . . . . . . . . . $1,532,000
Percent of Brainerd Common Stock exchanged
for The Colonel's Common Stock . . . . . . . x 97.5%
Assumed fair value of the purchase (rounded) . . $1,494,000
<FN3> Represents the deferred taxes at June 30, 1995.
</FN>
</TABLE>

Brainerd and The Colonel's Pro Forma Condensed Combined Statement of Income
(Unaudited)

The following unaudited pro forma condensed combined statement of
income combines the condensed statement of income of Brainerd and the
condensed statement of income for The Colonel's for the year ended
December 31, 1994, and for the six-month period ended June 30, 1995,
accounting for the Merger as a purchase of Brainerd by The Colonel's, as
though the Merger had occurred at the beginning of the fiscal year ended
December 31, 1994. The pro forma amounts assume The Colonel's converted to
a C corporation for federal income tax purposes. The pro forma condensed
combined statement of income should be read in conjunction with the
historical financial statements and related notes thereto of Brainerd and
The Colonel's, which accompany this Proxy Statement.

Year Ended Historical December 31, 1994 Pro Forma Pro Forma
December 31, 1994: Colonel's Brainerd Adjustments December 31, 1994
<S> <C> <C> <C> <C>
Net Sales $ 28,492,013 $ 2,449,923 $ 30,941,936
Cost of Sales 19,599,470 1,750,676 (8,000)<FN3> 21,342,146
Gross Profit 8,892,543 699,247 8,000 9,599,790
Selling, General and
Administrative Expenses 5,101,270 464,894 5,566,164
Plant Closing Costs 1,389,368 1,389,368
Income from Operations 2,401,905 234,353 8,000 2,644,258

Interest Expense, net (679,196) (64,172) (743,368)
Gain on Insurance Settlement 9,081,662 9,081,662
Other 83,343 83,343

93
Net Income before
income taxes 10,887,714 170,181 8,000 11,065,895

Tax (provision) benefit 363,000 <FN1>
(4,123,000)<FN2> ($ 3,760,000)
(3,760,000) (3,760,000)
Net income $ 10,887,714 $ 170,181 $(3,752,000) $ 7,305,895
Net income per Share $1.81 $0.25 $0.30<FN4>

Number of Shares 6,021,000 677,830 24,177,830<FN5>
<FN>
<FN1> Represents the 1994 effect of the deferred tax provision.
<FN2> Represents the adjustment to record the 1994 current tax liability.
<FN3> Represents the reduction in depreciation due to reduction in the
carrying value of certain plant and equipment.
<FN4> Pro forma net income per share was calculated by dividing the combined
pro forma net income by the number of shares of Brainerd Common Stock
outstanding after the Merger (24,177,830).
<FN5> Common shares outstanding assume that the 23.5 million shares of
Brainerd Common Stock to be issued to The Colonel's shareholders and
the 677,830 shares of existing Brainerd Common Stock were outstanding
for the entire year.
</FN>
</TABLE>

<TABLE>
<CAPTION>
Combined
Six Months Ended Historical June 30, 1995 Pro Forma Pro Forma
June 30, 1995 Colonel's Brainerd Adjustments June 30, 1995
<S> <C> <C> <C> <C>
Net Sales $14,651,145 $ 481,616 $15,132,761
Cost of Sales 9,807,373 311,966 (4,000)<FN3> 10,115,339
Gross Profit 4,843,772 169,650 5,017,422

Selling, General and
Administrative Expenses 2,338,068 458,038 2,796,106
Income (loss) from Operations 2,505,704 (288,388) 2,221,316
Interest Expense, net (143,909) (32,983) (176,892)
Other 39,225 25,882 65,087
Net Income (loss) before
income taxes 2,401,020 (295,509) 2,109,511
$ (4,000)

Tax (provision) benefit 0 0 462,519 <FN1>
-- -- 318,000 <FN2> 780,519
Net income $ 2,401,020 $(295,509) $ 784,519 $ 1,328,992
Net income per Share $0.40 $ (0.43) $ 0.05

Number of Shares 6,021,000 677,800 24,177,800

94
<FN>
_________________________________

<FN1> Represents current tax expense for the six-month period.
<FN2> Represents the effect of deferred taxes for the six-month period.
<FN3> Represents the reduction in depreciation expense if the purchase took place at December 31, 1994.
</FN>
</TABLE>

DESCRIPTION OF CAPITAL STOCK OF BRAINERD

Upon the adoption of the new Articles of Incorporation for The
Colonel's Holdings, the Company will be authorized to issue 35,000,000
shares of $0.01 par value common stock and 5,000,000 undesignated preferred
shares. All shares of Brainerd Common Stock presently outstanding are, and
the shares to be issued in the Merger will be, legally issued, fully paid
and nonassessable. A discussion of provisions in Brainerd's Articles of
Incorporation and Bylaws that may have the effect of delaying, deferring or
preventing a change in control following effectiveness of the proposed
Reincorporation is contained in "PROPOSAL II: REINCORPORATION OF BRAINERD -
Possible Negative Considerations."

Common Stock

Authorized shares of common stock not yet outstanding may be issued
from time to time in such amounts as determined by the Board of Directors
of Brainerd. The holders of common stock of Brainerd do not have any
preemptive rights to subscribe for any shares or other securities of
Brainerd, nor any right to have their shares redeemed by Brainerd. Each
holder of common stock has one vote per share upon all matters voted upon
by shareholders. Such voting rights are noncumulative so that shareholders
having more than 50% of the outstanding common stock are able to elect all
members of the Board of Directors. When and if dividends are declared,
they will be paid equally on all outstanding shares. In the event of
liquidation, each share of common stock will participate equally in the
distribution of assets to shareholders. The dividend and liquidation
rights of holders of common stock may be subordinate to those of holders of
undesignated shares, if and when such shares are designated and issued.

Preferred Stock

The Board of Directors of Brainerd will be authorized to determine,
without any further action by the shareholders, the rights, preferences and
privileges of 5,000,000 authorized but unissued, undesignated preferred
shares. Should the Board of Directors elect to exercise its authority, the
rights, preferences and privileges of holders of common stock could be made
subject to the rights, preferences and privileges of the undesignated
preferred shares established by the Board of Directors which could

adversely affect the rights of holders of common stock, and could defer or
prevent a change in control of Brainerd. Neither Brainerd nor The
Colonel's currently have any pending negotiations, contracts or
transactions relating to the issuance of preferred shares.

Dividend Policy

Brainerd has not paid any cash dividends on its common stock for the
two most recent fiscal years or for the six-month period ended June 30,
1995, and does not anticipate paying any such dividends in the foreseeable
future. Management intends to apply future earnings, if any, to the
development of the business of Brainerd and The Colonel's.

Transfer Agent

The current transfer agent and registrar for Brainerd's common stock
is American Stock Transfer, Inc. located in Denver, Colorado. The Brainerd
Board of Directors has authorized management to retain the Registrar and
Transfer Company located in Cranford, New Jersey as the transfer agent and
registrar for the Colonel's Holdings following effectiveness of the Merger
and reorganization.

Reports to Shareholders

Following the Merger, The Colonel's Holdings will provide its
shareholders with an annual report containing audited financial statements
of the Company. In addition, The Colonel's Holdings will distribute
periodic reports and unaudited interim financial reports to its
shareholders in accordance with applicable federal securities laws.

MARKET PRICES AND RELATED MATTERS

Brainerd

Brainerd Common Stock has been traded over-the-counter and is quoted
on the NASDAQ Small-Cap Market system under the symbol "BIRI." Trading on
the NASDAQ system commenced in January 1986. The following table sets
forth for each period indicated the high and low last sale prices for
Brainerd Common Stock as reported on the NASDAQ system. Such prices
reflect inter-dealer prices, without retail mark-up, mark-down or
commissions, and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
Quarterly Period Ended High Bid Low Bid
<S> <C> <C> <C>
March 31, 1993 $1.75 $1.50
June 30, 1993 $2.00 $1.75
September 30, 1993 $2.00 $1.25
December 31, 1993 $1.25 $0.50
March 31, 1994 $1.19 $1.00
June 30, 1994 $1.19 $1.19
September 30, 1994 $9.00 $1.13
December 31, 1994 $13.38 $4.75
March 31, 1995 $12.00 $6.00
June 30, 1995 $8.50 $6.50
September 30, 1995 $6.00 $6.00
</TABLE>

The high bid and low asked prices for Brainerd Common Stock as of the
close of business on December 14, 1994 (the last trading date prior to
public announcement of the signing of the letter of intent for the Merger
transaction), was $13.00 and $10.75, respectively. There were 242
shareholders owning Brainerd common stock on September 27, 1995; however,
Brainerd believes that the number of beneficial owners of Brainerd Common
Stock exceeds 500. The number of shares of Brainerd Common Stock held by
persons owning 5% or more of Brainerd's Common Stock, directors and
executive officers is set forth under "PROPOSAL V: ELECTION OF DIRECTORS OF
BRAINERD - Voting Securities and Security Ownership of Certain Beneficial
Owners and Management."

The Colonel's

Since its incorporation in 1982, all issued shares of The Colonel's
Common Stock have been owned solely by Donald J. Williamson and Patsy L.
Williamson. There is no established public trading market for The
Colonel's Common Stock. There were two shareholders owning The Colonel's
Common Stock on May 15, 1995, the Record Date for the Colonel's Meeting. A
discussion of distributions from The Colonel's to its shareholders is
contained in "SELECTED FINANCIAL DATA OF THE COLONEL'S."

MANAGEMENT AND PRINCIPAL SHAREHOLDERS

Principal Shareholders of Brainerd

Information regarding persons or groups known by Brainerd to be the
beneficial owners of more than 5% of the outstanding shares of Brainerd
Common Stock as of July 31, 1995, is shown in the following table.
Information concerning such security holdings has been furnished by the
holders thereof to Brainerd. Mr. Mott may be deemed to be a "control

97
person" by virtue of his ownership of Brainerd Common Stock. For
additional information relating to the principal shareholders of Brainerd,
see "PROPOSAL V: ELECTION OF DIRECTORS OF BRAINERD - Voting Securities and
Security Ownership of Certain Beneficial Owners and Management."

<TABLE>
<CAPTION>
Amount and
Nature of Pro Forma
Name and Address Beneficial Percent Percent of
of Beneficial Owner Ownership <FN1> of Class Class <FN2>
<S> <C> <C> <C>
Charles Mott 420,000 61.96% 1.8%
G9502 North Saginaw
Mt. Morris, Michigan 48458

Donald J. Williamson 67,080 9.9% 97.5%
3425 Parkside Drive
Flint, Michigan 48503
<FN>
_____________________
<FN1> Except as otherwise disclosed, shares owned represent shares for which
the beneficial owner has sole voting and investment power.
<FN2> Gives pro forma effect to the Merger and to the issuance of 23,500,000
shares of Brainerd Common Stock to Donald and Patsy Williamson in the
Merger, in addition to Brainerd shares currently owned by
Mr. Williamson.
</FN>
</TABLE>

Principal Shareholders of The Colonel's

Information regarding persons or groups known by The Colonel's to be
the beneficial owners of more than 5% of the outstanding shares of The
Colonel's Common Stock as of July 31, 1995, is shown in the following table.
Information concerning such security holdings has been furnished by the
holders thereof to The Colonel's.

<TABLE>
<CAPTION>
Amount and
Nature of Pro Forma
Name and Address Beneficial Percent Percent of
of Beneficial Owner <FN1> Ownership <FN2> of Class Class <FN3>
<S> <C> <C> <C>
Donald J. Williamson 3,040,605 50.5% 49.4%

Patsy L. Williamson 2,980,395 49.5% 48.1%
<FN>
_____________________

98
<FN1> The address of each listed shareholder is 3425 Parkside Drive, Flint,
Michigan 48503.
<FN2> Except as otherwise disclosed, shares owned represent shares for which
the beneficial owner has sole voting and investment power.
<FN3> Gives pro forma effect to the Merger and to the issuance of 23,500,000
shares of Brainerd Common Stock to Donald and Patsy Williamson in the
Merger, in addition to Brainerd shares currently owned by
Mr. Williamson.
</FN>
</TABLE>

Management of Brainerd

Directors of Brainerd hold office (subject to Brainerd's Bylaws) until
the next annual meeting of shareholders and until their respective
successors have been elected and qualified. Officers of Brainerd are
appointed to serve, subject to discretion of the Board, for the term for
which they were appointed and until their successors have been elected and
have qualified. For information relating to the directors and executive
officers of Brainerd, see "PROPOSAL V: ELECTION OF DIRECTORS OF BRAINERD -
Directors and Executive Officers."

Management of The Colonel's

General. Directors of The Colonel's hold office (subject to The
Colonel's Bylaws) until the next annual meeting of shareholders and until
their respective successors have been elected and qualified. Officers of
The Colonel's are appointed to serve, subject to discretion of the Board,
for the term for which they were appointed and until their successors have
been elected and have qualified.

CERTAIN TRANSACTIONS

Interests of Mr. Williamson

Donald J. Williamson owns 67,080 shares of Brainerd Common Stock
representing approximately 9.9% of the outstanding shares of Brainerd
Common Stock on July 31, 1995. Mr. Williamson, together with his wife, owns
all of the outstanding capital stock of the Colonel's. See "MANAGEMENT AND
PRINCIPAL SHAREHOLDERS." Additionally, Mr. Williamson serves as a director
and President of The Colonel's and is a nominee for election to the
Brainerd Board of Directors. Assuming the Merger is approved and
Mr. Williamson is elected to the Board, it is anticipated that
Mr. Williamson would serve as Chief Executive Officer of The Colonel's
Holdings.

Upon completion of the proposed Merger, Mr. Williamson and Mrs.
Williamson would own 23,567,080 shares of Common Stock of The Colonel's

99
Holdings representing approximately 97.5% of the outstanding shares of
Common Stock of The Colonel's Holdings immediately following the Merger.
Additionally, it is anticipated that Mr. Williamson would serve in the
positions of director, Chairman and Chief Executive Officer of The
Colonel's Holdings following the Merger. See "PROPOSAL V: ELECTION OF
DIRECTORS OF BRAINERD." Mr. Williamson has advised Brainerd and The
Colonel's that he intends to vote all of his shares of Brainerd Common
Stock and The Colonel's Common Stock in favor of the Merger and all
other proposals set forth in this Proxy Statement.

Related Party Transactions Involving The Colonel's

The Colonel's is a party to certain transactions with related parties
which are summarized below.

Lease of Milan, Michigan, Facility. In June of 1993, the Colonel's
began leasing its Milan, Michigan, facility from an affiliated company
620 Platt Road, LLC. Donald J. Williamson and Patsy L. Williamson own all
of the outstanding capital stock of The Colonel's and are the sole members
of 620 Platt Road, LLC. The term of the current lease is from June 18,
1993, to June 17, 1995. Rent expense to The Colonel's for the Milan
facility was $490,000 in 1993 and $840,000 in 1994. It is anticipated that
The Colonel's will maintain its manufacturing operations and principal
executive offices in the Milan facility and that a new lease will be
negotiated upon similar terms for a term beginning June 18, 1995. The
Colonel's formerly leased its Owosso, Michigan facility from the
shareholders of The Colonel's. See "BUSINESS OF THE COLONEL'S - Plant Fire
and Insurance Settlement."

The Colonel's Factory Warehouse of Arkansas, Inc. Donald J.
Williamson owns all of the outstanding capital stock of The Colonel's
Factory Warehouse of Arkansas, Inc. ("The Colonel's Arkansas"). The
Colonel's Arkansas is located in West Memphis, Arkansas, and is primarily
engaged in manufacturing chrome plated bumpers for sale as aftermarket
replacement parts. The Colonel's engages in certain transactions with The
Colonel's Arkansas including sales and purchases of inventory and payment
for and reimbursement of payroll expenses of The Colonel's Arkansas. As of
December 31, 1994, The Colonel's held a note receivable from The Colonel's
Arkansas in the amount of $2,138,186. The note bears interest at the
annual rate of 7% and is payable in monthly installments until January 1,
2000, when the remaining balance is due and payable. The note is secured
by the personal guaranty of Mr. Williamson. During 1994, sales of
inventory by The Colonel's to The Colonel's Arkansas were in the amount of
$309,500 and purchases of inventory were in the amount of $224,300.

Blain Buick-GMC, Inc. Patsy L. Williamson owns all of the outstanding
capital stock of Blain Buick-GMC, Inc. ("Blain Buick"). Blain Buick is an
automobile dealership located in Flint, Michigan. The Colonel's engages in
certain transactions with Blain Buick, including the purchase of
automobiles, parts, and automotive service and the lease of certain

100
property from which rental income is earned. During 1994, purchases of
automobiles, parts, and services by The Colonel's from Blain Buick were in
the amount of $147,000 and rental income paid by Blain Buick to The
Colonel's was in the amount of $12,000. As of December 31, 1994, The
Colonel's held a note receivable from Blain Buick in the amount of
$695,118. The note bears interest at 1% above the prime rate.

Transactions with Brainerd. The Colonel's leases a skybox at the
Brainerd International Raceway and pays rent equal to that charged to
unaffiliated parties. The Colonel's expects to stage customer appreciation
and other events at the raceway, as well as to develop ways to enhance the
public visibility of its name and products through sponsorship of events at
the raceway.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THIS PROPOSAL

PROPOSAL II:
REINCORPORATION OF BRAINERD

Principal Features of Reincorporation

The Brainerd Board of Directors has unanimously approved, and
recommends for shareholder approval, a plan of reorganization (the
"Reincorporation") in the form of a merger pursuant to which Brainerd's
state of incorporation will change from Minnesota to Michigan. The
Reincorporation will affect a number of important changes in the structure
of corporate governance under which Brainerd has previously operated,
including: (1) changing Brainerd's name from Brainerd International, Inc.
to The Colonel's Holdings, Inc.; (2) increasing the number of authorized
shares of Brainerd Common Stock and authorizing the issuance of preferred
stock having such rights, preferences, and privileges as the Board of
Directors may determine; (3) converting each outstanding share of Brainerd
Common Stock (other than dissenting shares) into one share of Common Stock,
$.01 par value per share of The Colonel's Holdings, Inc., a Michigan
corporation; (4) establishing a classified Board of Directors;
(5) eliminating shareholders' ability to call special meetings of
shareholders; (6) requiring that all shareholder business or actions be
conducted or taken only at an annual or special meeting of shareholders and
not through an action by written consent of shareholders, except as
ratified in advance by the Board of Directors; and (7) creating certain
requirements concerning advance notice of (i) nominations by shareholders
of persons for election to the Board of Directors and (ii) business matters
proposed to be introduced by shareholders at annual meetings. The
Reincorporation will not result in any change in the business, management,
assets, liabilities or net worth of Brainerd. Reincorporation in Michigan
will allow Brainerd to take advantage of certain provisions of the
corporate laws of Michigan. The purposes and effects of the proposed
Reincorporation are summarized below.
101
In order to effect Brainerd's reincorporation in Michigan, Brainerd
will be merged into a newly formed, wholly owned subsidiary incorporated in
Michigan named The Colonel's Holdings, Inc. ("The Colonel's Holdings").
The Colonel's Holdings has not engaged in any activities except in
connection with the proposed Reincorporation described herein. Following
the Reincorporation, the principal executive office of Brainerd
International Raceway, Inc. will remain at the same location as the current
executive office of Brainerd in Minnetonka, Minnesota and the principal
executive office of The Colonel's Holdings will be located at the same
location of The Colonel's executive office and manufacturing facility in
Milan, Michigan. In addition, upon effectiveness of the Reincorporation,
the Board of Directors of The Colonel's Holdings will consist of those
persons elected to the Board of Directors of Brainerd at the Brainerd
Meeting. Such persons and their respective terms of office are set forth
in "PROPOSAL V: ELECTION OF DIRECTORS OF BRAINERD." The individuals serving
as executive officers of Brainerd immediately prior to the Reincorporation
will serve as executive officers of The Colonel's Holdings upon effectiveness
of the Reincorporation except as otherwise designated by the Board. In
connection with its approval and recommendation of Brainerd's reincorporation
in Michigan, the Board has approved, and recommends to Brainerd shareholders
for their adoption and approval, an Agreement and Plan of Reorganization (the
"Reincorporation Agreement") pursuant to which Brainerd International, Inc.
will be merged with and into The Colonel's Holdings. The full texts of the
Agreement and Plan of Reorganization and the Articles of Incorporation and
Bylaws of the successor Michigan corporation under which Brainerd's business
would be conducted after the merger are set forth as Exhibit D, Exhibit E,
and Exhibit F, respectively, hereto. The discussion contained in this Proxy
Statement is qualified in its entirety by reference to such exhibits.

In the following discussion of the proposed Reincorporation, the term
"Brainerd" refers to Brainerd as currently organized as a Minnesota
corporation; the term "The Colonel's Holdings" refers to the newly formed,
wholly owned Michigan subsidiary of Brainerd that will be the surviving
corporation after the completion of the Reincorporation; and the term
"Company" includes either or both, as the context may require, without
regard to the state of incorporation.

Upon shareholder approval of the Reincorporation, and upon approval of
appropriate articles or certificates of merger by the Secretaries of State
of the States of Minnesota and Michigan, Brainerd will be merged with and
into The Colonel's Holdings pursuant to the Reincorporation Agreement,
resulting in a change in Brainerd's state of incorporation. Brainerd will
then be subject to the Michigan Business Corporation Act and the Articles
of Incorporation and Bylaws set forth as Exhibit E and Exhibit F,
respectively. In addition, the proposed Articles of Incorporation set
forth as Exhibit E attached hereto include provisions opting out of the
Michigan control share acquisition and business combination statutes, which
statutes may otherwise provide certain protection to shareholders in
connection with a proposed takeover or other business combination with an
interested shareholder. As a result of the change in governing law from

102
Minnesota to Michigan and the provisions in the proposed Articles of
Incorporation of The Colonel's Holdings electing to opt out of the Michigan
control share acquisition and business combination statutes, the
shareholders of Brainerd will lose the benefits of certain protection
provided by the Minnesota Business Corporation Act and the Michigan
Business Corporation Act as described below. See "Comparison of Governing
Instruments of The Colonel's Holdings and Brainerd and Corporation Laws of
Minnesota - Anti-Takeover Legislation." Upon the effective time of the
Reincorporation, each one outstanding share of Common Stock of Brainerd
automatically will be converted into one share of Common Stock of The
Colonel's Holdings. Outstanding options and warrants to purchase shares of
Common Stock of Brainerd, if any, will be converted into options or
warrants, as applicable, to purchase shares of Common Stock of The
Colonel's Holdings at a ratio of one share of Brainerd Common Stock to one
share of The Colonel's Holdings Common Stock.

IT WILL NOT BE NECESSARY FOR BRAINERD SHAREHOLDERS TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF THE COLONEL'S
HOLDINGS; OUTSTANDING STOCK CERTIFICATES OF BRAINERD SHOULD NOT BE
DESTROYED OR SENT TO BRAINERD. Following the Reincorporation, delivery of
previously outstanding stock certificates of Brainerd will constitute "good
delivery" in connection with sales through a broker, or otherwise, of
shares of The Colonel's Holdings. Shares of The Colonel's Holdings Common
Stock will be traded in the over-the-counter market on the NASDAQ Small-Cap
Market system, where shares of Brainerd Common Stock are presently traded.

Principal Reasons for Changing Brainerd's State of Incorporation

Brainerd's Board of Directors believes that the Reincorporation will
provide flexibility for both the management and business of Brainerd.

The Brainerd Board of Directors believes that Michigan has a favorable
legal and regulatory environment in which to operate. The Colonel's has
been incorporated in the State of Michigan and has maintained its principal
executive offices and manufacturing facilities in Michigan since its
formation in 1982. Directors and executive officers of The Colonel's who
are currently members of and nominees for election to the Brainerd Board of
Directors are familiar with incorporation in the State of Michigan and
desire that The Colonel's Holdings be incorporated in the State of
Michigan. Michigan corporate law has been intentionally enacted to
parallel closely Delaware corporate law in many respects. For many years,
Delaware has followed a policy of encouraging incorporation in that state
and has adopted comprehensive and flexible corporate laws and has developed
a substantial body of case law construing Delaware corporate law. Because
Michigan corporate law closely parallels Delaware corporate law, the
Brainerd Board of Directors believes the Company will have the benefit of
greater predictability with respect to corporate legal affairs.
Additionally, by incorporating in Michigan rather than Delaware, the
Company will not be liable for annual franchise taxes. Delaware imposes an
annual franchise tax upon companies incorporated in Delaware regardless of

103
where their operations are located, which taxes can be significant in
amount. Michigan has no annual franchise tax.

The Company believes that the Reincorporation will also allow the
Company to make use of the increased flexibility and certain other features
afforded by Michigan law that the board of directors believes will
encourage potential acquirers in any takeover attempt to negotiate directly
with the Board of Directors. Takeover attempts have become increasingly
common in recent years. Takeover attempts that are not negotiated and
approved by the Board of Directors can seriously disrupt the business and
management of a company and cause that company to incur great expense.
Such attempts may also take place at inopportune times and may involve
terms which may be less favorable to all of the shareholders than would be
available in a transaction negotiated and approved by the board of
directors. On the other hand, transactions approved by the board of
directors can be carefully planned and undertaken at an opportune time in
order to obtain maximum value for the company and all of its shareholders.
In addition, in the case of a proposal which is presented to the board of
directors, there is greater opportunity for the board of directors to
analyze the proposal thoroughly and to present that analysis to the
shareholders in the most effective manner.

Unsolicited or hostile takeover attempts are frequently structured in
ways which the Board of Directors believes may not be in the best interests
of all the shareholders. Although a takeover attempt may be made at a
price substantially above then current market prices, such offers are
sometimes made for less than all of the outstanding shares of a target
company. As a result, shareholders may be presented with the alternatives
of either partially liquidating their investment at a time that may be
disadvantageous or retaining their investment as minority shareholders in
an enterprise that is controlled by persons whose objectives may be
different from those of the remaining minority shareholders. A takeover
attempt may take the form of a two-tier offer in which cash is offered for
a portion of the target company's outstanding shares and thereafter
securities that are or may be worth less than the cash portion are offered
for the remaining shares. Furthermore, hostile takeover attempts are
sometimes timed and designed to foreclose or minimize the possibility of
more favorable competing bids, which frequently may result in shareholders
losing the opportunity to receive and consider alternative and possibly
more attractive proposals.

The Board of Directors recognizes that takeover attempts that are not
negotiated with and approved by a target company's board of directors do
not always have the unfavorable consequences or effects described above.
See "Possible Negative Considerations" below. However, the Board of
Directors believes that the potential advantages of unapproved takeover
attempts are sufficiently great that prudent steps to reduce the likelihood
of such takeover attempts are in the best interests of the Company and all
of its shareholders. Accordingly, the Board of Directors believes that it
is in the best interests of the Company and its shareholders to encourage

104
potential acquirers to negotiate directly with the Board of Directors and
that certain of the changes resulting from the proposed Reincorporation
will encourage such negotiations and may discourage hostile takeover
attempts. It is also the Board of Directors' view that the existence of
these provisions should not discourage anyone from proposing a merger or
other transaction at a price reflective of the true value of The Colonel's
Holdings and that is in the best interests of all of its shareholders. No
aspect of the proposed Reincorporation would prevent any person from making
a tender offer to The Colonel's Holdings shareholders or prevent any
shareholder from accepting such an offer.

The Reincorporation proposal does not reflect knowledge on the part of
the Board of Directors or management of any proposed or threatened takeover
or other attempts to acquire control of the Company. The Board of
Directors is not aware of any tender offer, proxy contest, or other similar
transaction involving a change in control of the Company that is now
pending or under consideration. Management does not currently have under
consideration, and does not have any current intention to propose or adopt,
any other measures which might discourage takeovers apart from those
proposed in this Proxy Statement. However, the Board of Directors may adopt
such measures at some time in the future, which may or may not require
shareholder approval.

Possible Negative Considerations

Notwithstanding the belief of the Board of Directors as to the
benefits to shareholders of the Reincorporation, shareholders should
recognize that one of the effects of the Reincorporation may be to
discourage a future attempt to acquire control of the Company, that is not
presented to and approved by the Board, but which a substantial number and
perhaps even a majority of the Colonel's Holdings shareholders might
believe to be in their best interests or in which shareholders might
receive a substantial premium for their shares over then-current market
prices. As a result, shareholders who might desire to participate in such
a transaction may not have an opportunity to do so. In addition,
unapproved tender offers and takeover attempts may be made at times and in
circumstances that are beneficial to and in the interests of shareholders.
Tender offers or takeover attempts do not all have features of the type
described above that may be to the disadvantage of shareholders.
Furthermore, it is not always the case that an unsolicited offer will be
less advantageous than a company-negotiated transaction. Such transactions
can provide the shareholders with considerable value for their shares and
can be in the interests of all the shareholders.

In considering the Reincorporation, shareholders should also be aware
that the overall effect of the Reincorporation is to make it more difficult
for holders of even a majority of the outstanding shares of The Colonel's
Holdings Common Stock to change the composition of the Board of Directors
and remove existing management in circumstances where a majority of the
shareholders may be dissatisfied with the performance of the incumbent
directors or otherwise desire to make changes.
105
The provisions of The Colonel's Holdings Articles of Incorporation and
Bylaws could make a proxy contest a less effective means of removing or
replacing existing directors or could make it more difficult to make a
change in control of The Colonel's Holdings which is opposed by the Board.
Accordingly, these provisions could enable the Board of Directors to resist
change and otherwise thwart the desires of a majority of the shareholders.

The Colonel's Holdings will have 5,000,000 shares of authorized but
unissued preferred stock. The Board of Directors would have the authority,
without further action by shareholders, to determine the principal rights,
preferences, and privileges of the unissued preferred stock. Provisions
could be included in the preferred stock, such as extraordinary voting,
dividend, redemption, or conversion rights, which could discourage an
unsolicited tender offer or takeover proposal. Brainerd currently has no
authorized shares of preferred stock and the Board of Directors currently
has no comparable authority with regard to authorized but unissued
preferred stock.

The Board has considered these potential disadvantages and has
concluded that the potential benefits of the Reincorporation significantly
outweigh its possible disadvantages.

Comparison of Governing Instruments of The Colonel's Holdings and Brainerd
and Corporation Laws of Minnesota and Michigan

Upon the Reincorporation, the Articles of Incorporation and Bylaws of
The Colonel's Holdings will become Brainerd's Articles of Incorporation and
Bylaws and Brainerd will become subject to Michigan law. The following is
a summary of certain significant differences between the provisions of the
Articles of Incorporation and Bylaws of The Colonel's Holdings and those of
the Restated Articles of Incorporation and Bylaws of Brainerd as well as
differences between the corporation laws of Minnesota and Michigan. This
summary does not purport to be complete, and reference is made to the
Articles of Incorporation and Bylaws of The Colonel's Holdings, which are
attached hereto as Exhibit E and Exhibit F, respectively, and to the
provisions of the Minnesota Business Corporation Act and the Michigan
Business Corporation Act. Copies of the Restated Articles of Incorporation
and Bylaws of Brainerd are available for inspection at the principal
executive offices of Brainerd and will be sent to shareholders of Brainerd
upon written request.

Certain provisions of The Colonel's Holdings Articles of Incorporation
described below may have an anti-takeover impact and may make tender
offers, proxy contests and certain mergers more difficult to consummate.
These include provisions (i) requiring a super majority of 66 2/3% of the
total voting power of all shares of stock entitled to vote in the election
of directors to amend the Company's Bylaws; and (ii) restricting the
ability of shareholders to call a special meeting of shareholders without
approval by the Board of Directors. The Colonel's Holdings Bylaws contain
additional provisions that may have an anti-takeover impact by making proxy

106
contests more difficult. The Colonel's Holdings Bylaws also contain
restrictions on the procedures by which shareholders may nominate persons
for election to the Board of Directors and the procedures by which
shareholders may properly bring business before annual meetings of
shareholders. In addition, the ability of the Company to issue preferred
stock, with such rights, preferences, privileges, and limitations as the
Company's Board of Directors may determine, could have the effect of
impeding the acquisition of control of the Company. Moreover, the proposed
Articles of Incorporation for the Company contain provisions electing to
opt out of the Michigan control share acquisition and business combination
statutes, which may result in less protection being afforded to
shareholders in connection with certain business combinations.

Anti-Takeover Legislation. Both the Minnesota Business Corporation
Act and the Michigan Business Corporation Act contain provisions intended
to protect shareholders from individuals or companies attempting a takeover
of the corporation in certain circumstances. The Restated Articles of
Incorporation of Brainerd contains a provision opting out of the "control
share acquisition" provisions of the Minnesota Business Corporation Act.
See "Control Share Acquisition" below. The Articles of Incorporation of
The Colonel's Holdings contain provisions electing to opt out of the
control share acquisition and the business combination statutes under
Michigan law.

Control Share Acquisition. The Minnesota control share acquisition
statute provisions are designed to deal with the problem of the hostile
takeover bid by establishing various disclosure and shareholder approval
requirements to be met by individuals or companies attempting a takeover.
The Minnesota statute requires disinterested shareholder approval for any
acquisition of shares of an "issuing public corporation" that results in
the "acquiring person" owning more than a designated percentage of the
outstanding shares of such corporation. Shares that exceed certain
thresholds and are acquired without shareholder approval lose their voting
rights and are subject to certain redemption privileges of the corporation.
Such shares regain their voting rights only if the acquiring person
discloses certain information to the corporation and such voting rights are
granted by the shareholders at a special or annual meeting of the
shareholders. The Minnesota control share acquisition statute applies
unless the issuing public corporation opts out of the statute in its
articles of incorporation or bylaws. Brainerd has opted out of such
provisions. An "issuing public corporation" is one which is incorporated
under or governed by the Minnesota Business Corporation Act and has at
least fifty shareholders.

The Michigan control share acquisition statute is similar to that of
Minnesota. An "issuing public corporation" subject to the statute is
defined as "a corporation that (a) has 100 or more shareholders of record,
(b) has its principal place of business, its principal office, or
substantial assets within Michigan, and (c) one or more of the following:
(i) more than 10% of shareholders of record resident in Michigan, (ii) more

107
than 10% of its shares owned of record by Michigan residents, or (iii)
10,000 shareholders of record resident in Michigan." The basic concept of
this statute is that if a control share acquisition, as defined, is made,
then shares acquired in such an acquisition do not have voting rights
unless the acquiring person obtains the approval of a super majority of
disinterested shares, either before or after the acquisition. Because the
Colonel's Holdings Articles of Incorporation contain a provision opting out
of the Michigan control share acquisition statute, the statute will not
apply to the Company.

"Control shares" are defined as shares in an issuing public
corporation that, when added to all other shares of the corporation owned
by a person, would entitle that person, directly or indirectly, alone or as
part of a group, to exercise voting power within any of the following
ranges: (a) one-fifth but less than one-third of all voting power, (b)
one-third but less than a majority of all voting power, and (c) a majority
of all voting power. A "control share acquisition" is defined as "the
acquisition, directly or indirectly, by a person of ownership of, or the
power to direct the exercise of voting power with respect to, issued and
outstanding shares." Shares acquired within a 90-day period, as well as
shares acquired pursuant to a "plan to make a control share acquisition"
are deemed to have been acquired in the same transaction. The statute
excludes from the definition of control share acquisition the following
acquisitions: those occurring (a) before January 1, 1988, (b) pursuant to
a contract existing before January 1, 1988, (c) by gift, testamentary
disposition, marital settlement, descent and distribution, or otherwise
without consideration, (d) pursuant to the satisfaction of a pledge or
other security interest created in good faith and not for the purpose of
circumventing this statute, (e) pursuant to a merger or consolidation
effected in compliance with Sections 701 through 733 of the Michigan
Business Corporation Act if the issuing public corporation is a party to
the agreement of merger or consolidation, or (f) by a governmental official
acting in an official or fiduciary capacity.

Control shares acquired in a control share acquisition do not have
voting rights unless, prior to or after the control share acquisition, the
shareholders of the corporation pass a resolution granting voting rights to
the control shares. Such a resolution must be approved by both of the
following: (a) a majority of the shares entitled to vote, and if the
control share acquisition would result in any action which would require a
class or series vote, by a majority of such class or series entitled to
vote thereon, and (b) a majority of the shares entitled to vote and a
majority of the shares of each class or series entitled to vote as a class
or series, excluding all "interested shares." Interested shares are
defined as shares in respect of which any of the following persons may
exercise or direct the exercise of the voting power of the corporation: (a)
an acquiring person (or member of a group) with respect to a control share
acquisition, (b) an officer of the issuing corporation, (c) an employee of
the issuing corporation who is also a director of the corporation, and (d)
if the issuing corporation is a bank holding company, certain officers and
directors.
108
To obtain voting rights, the acquiring person must obtain the
requisite shareholder approval described in the foregoing paragraph. The
first step in this process is for the acquiring person to request a
special meeting of shareholders for the purpose of voting on the
resolution. At the time of making this request, the acquiring person must
deliver to the corporation an "acquiring person statement" setting forth
certain information, including the identity of the acquiring person and
each other member of the group of which the person is a part, the number of
shares owned, directly or indirectly, by the acquiring person or the group
of which he is a member and the number of shares with respect to which the
acquiring person or group may exercise voting power, the range of voting
power under which the control share acquisition falls or would fall, a
description of the terms of the proposed control share acquisition and a
statement as to the purpose of the acquisition, including if the purpose is
to acquire control of the business of the issuer, any plans or proposals
which the acquiring person may have to liquidate the issuer, to sell its
assets to or merge it with any other business, or to make any other major
change in its business or corporate structure.

Within 10 days after receiving the acquiring person's request for a
special meeting and his undertaking to pay the expenses of such a meeting,
the corporation must call a shareholder meeting. The meeting must be held
within 50 days of the request. If no request is made, but an acquiring
person statement is submitted, the resolution granting the control shares
voting rights will be voted on at the corporation's next annual meeting.

If a resolution is passed by the requisite shareholder vote, the
control shares will be afforded voting rights to the extent stated in the
shareholders' resolution. If a resolution is not passed affording full
voting rights to the control shares, the corporation has the option to
repurchase the shares from the acquiring person at "fair value" if the
corporation's articles of incorporation or bylaws authorize such
repurchases.

If the control shares are afforded full voting rights and the
acquiring person thereafter has a majority of all voting power of the
corporation, shareholders (other than the acquiring person) have certain
dissenters' rights, unless the corporation's articles or bylaws otherwise
provide. Such rights include the right to receive "fair value" for their
shares. Fair value is defined as a value not less than the highest price
per share paid by the acquiring person in the control share acquisition.

At any time prior to the control share acquisition, the board of
directors may adopt a bylaw electing not to be subject to the control share
acquisition statute. As noted previously, Brainerd has opted out of the
comparable control share acquisition statute of Minnesota. The Articles of
Incorporation of The Colonel's Holdings similarly contains a provision
opting out of the Michigan control share acquisition statute. The Board of
Directors believes that such election will provide the Company with maximum
flexibility to engage in transactions that are regarded as in the best

109
interests of the Company and its shareholders but that would otherwise be
prohibited or restricted by the Michigan control share acquisition statute.

Business Combination. Both Minnesota and Michigan have business
combination statutes that are intended primarily to deter highly leveraged
takeover bids that propose to use the target's assets as collateral for the
offeror's debt financing and to liquidate the target, in whole or in part,
to satisfy financing obligations. Proponents of the business combination
statutes argue that such takeovers have a number of abusive effects, such
as adverse effects on the community and employees, when the target is
broken up. Further, proponents argue that if the offeror can wholly
finance its bid with the target's assets, that fact suggests that the price
offered is not fair in relation to the value of the company, regardless of
the current market price.

The Minnesota statute provides that an issuing public corporation (as
described above with respect to the Minnesota control share acquisition
statute) may not engage in certain business combinations with any person
that acquires beneficial ownership of 10% or more of the voting stock of
that corporation (i.e., an interested shareholder) for a period of
four years following the date that the person became a 10% shareholder
(share acquisition date) unless, prior to that share acquisition date, a
committee of the corporation's disinterested directors approves either the
business combination or the acquisition of shares.

Only defined types of business combinations are prohibited by the
Minnesota statute. In general, the definition includes: any merger or
exchange of securities of the corporation with the interested shareholder;
certain sales, transfers, or other dispositions of assets of the
corporation to an interested shareholder; transfers by the corporation to
interested shareholders of shares that have a market value of 5% or more of
the value of all outstanding shares, except for a pro rata transfer made to
all shareholders; any liquidation or dissolution of, or reincorporation in
another jurisdiction of, the corporation which is proposed by the
interested shareholder; certain transactions proposed by the interested
shareholder or any affiliate or associate of the interested shareholder
that would result in an increase in the proportion of shares entitled to
vote owned by the interested shareholder; and transactions whereby the
interested shareholder receives the benefit of loans, advantages,
guarantees, pledges, or other financial assistance or tax advances or
credits from the corporation.

For purposes of selecting a committee, a director or person is
"disinterested" if the director or person is neither an officer nor an
employee, nor has been an officer or employee within five years preceding
the formation of the committee of the issuing public corporation, or of a
related corporation. The committee must consider and act on any written,
good faith proposal to acquire shares or engage in a business combination.
The committee must consider and take action on the proposal and within
30 days render a decision in writing regarding the proposal.

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The Michigan business combination statute provides that if a person
acquires 10% or more of the voting stock of a Michigan corporation the
person is deemed an interested shareholder and the corporation may not
engage in certain business combinations with that person for a period of
five years. However, an otherwise prohibited business combination may be
permitted if one of three conditions is met. First, if prior to the date
the person became an interested shareholder, the board of directors passed
a resolution exempting the interested shareholder from the provisions of
the business combination statute, then the business combination is
permitted. (The board of directors, however, may revoke such a resolution
at any time prior to the consummation of the exempted business
combination.)

Second, an otherwise prohibited business combination will be permitted
if the following requirements are met: (a) the aggregate amount of cash and
other consideration to be received per share by holders of common stock in
the business combination is at least equal to the highest of the following:
(i) the highest price per share paid by the interested shareholder within
the two-year period immediately prior to the time the business combination
is announced or the time when the person became an interested shareholder,
whichever is higher, or (ii) the market value per share on the date the
business combination is announced or the date when the person became an
interested shareholder, whichever is higher; (b) the aggregate amount of
cash and other consideration to be received by the holders of stock other
than common stock is at least equal to the highest of the following: (i)
the highest price per share paid by the interested shareholder within the
two-year period immediately prior to the time the business combination is
announced or the time when the person became an interested shareholder,
whichever is higher, (ii) the highest preferential amount per share to
which the holders of the class of stock are entitled to in the event of the
liquidation, dissolution or winding up of the corporation, or (iii) the
market value per share of the class of stock on the date the business
combination is announced or the date when the person became an interested
shareholder, whichever is higher; (c) the consideration to be received by
holders of any class or series of stock is cash or the same form of
consideration used by the interested shareholder to acquire shares in the
corporation; (d) after the person becomes an interested shareholder, but
prior to the consummation of the business combination, all of the following
occur: (i) any full periodic dividends, whether or not cumulative, have
been declared and paid on any outstanding preferred stock of the
corporation, (ii) the annual rate of dividends on any stock other than
preferred stock was not reduced (except as was necessary to reflect any
stock splits), and the annual rate of dividends was increased to reflect
any stock reclassification or other transaction that reduced the number of
shares of stock, (iii) after the person became an interested shareholder,
he did not receive (except proportionately as a shareholder) the benefit,
directly or indirectly, of any financial assistance or tax advantages
provided by the corporation or any of its subsidiaries; (iv) the interested
shareholder did not become the beneficial owner of any additional shares of
the corporation, except in the transaction in which he became an interested

111
shareholder or by virtue of a stock split, and (v) five years have elapsed
since the person became an interested shareholder.

Third, the interested shareholder may comply with the requirements of
Section 780 of the Michigan Business Corporation Act. This section
requires that a business combination with an interested shareholder
requires both of the following: (a) an advisory statement from the board of
directors of the corporation; and (b) the affirmative vote of both: (i)
not less than 90% of the vote of each class of stock entitled to vote, and
(ii) not less than two-thirds of the votes of each class of stock entitled
to vote, other than shares beneficially owned by an interested shareholder
who is, or whose affiliate is, a party to the business combination.

As in Minnesota, certain corporations are not subject to the business
combination statute, unless their articles of incorporation otherwise
provide. Such corporations are (a) those having fewer than 100
shareholders, (b) a corporation that has opted out of the statute, and (c)
investment companies registered under the Investment Company Act of 1940.
As drafted, the statute determines the number of shareholders as of the
date of the business combination. Thus, if an interested shareholder can
persevere in his acquisition of shares of the corporation until such time
as there are less than 100 shareholders, the business combination statute
will cease to apply to the corporation.

Only certain business combinations are prohibited under the Michigan
statute. Such prohibited transactions are: (a) any merger, consolidation,
or share exchange of the corporation or any subsidiary which alters the
contract rights of the shares as expressly set forth in the articles of
incorporation or which changes or converts the shares with either (i) any
interested shareholder, or (ii) any other corporation, that is, or after
the business combination will be, an affiliate of an interested shareholder
that was an interested shareholder prior to the business combination; (b)
any sale, lease, transfer, or other disposition outside the regular course
of business of assets of the corporation or any subsidiary having a value
equal to or greater than 10% of the corporation's or subsidiary's net worth
in any twelve-month period to an interested shareholder or his affiliate;
(c) the transfer by the corporation or a subsidiary of securities having a
value equal to or greater than 5% of the market value of the outstanding
securities of the corporation in any twelve-month period to an interested
shareholder or his affiliate; (d) the adoption of a plan of liquidation or
dissolution in which an interested shareholder or his affiliate will
receive anything other than cash; and (e) any reclassification of
securities or any merger, consolidation or share exchange of the
corporation with any of its subsidiaries which has the effect of increasing
by 5% or more of the total number of outstanding shares the proportionate
amount of the outstanding shares of any class of equity securities of the
corporation or a subsidiary directly or indirectly owned by an interested
shareholder or his affiliate.

112
A comparison of the two laws reveals that Michigan law is somewhat
more restrictive with respect to a prospective takeover attempt than
Minnesota. Minnesota requires approval of the business combination or the
acquisition of shares by a committee of the corporation's disinterested
directors, unless more than four years has passed since the interested
shareholder acquired shares in the corporation. Michigan, on the other
hand, requires the approval of a super majority of the corporation's
shareholders, unless more than five years has passed and certain price
requirements are met. The two statutes are similar in their definitions of
interested shareholders and prohibited business combinations.

Both the Minnesota and the Michigan provisions permit a corporation to
"opt out" of the business combination statute by electing to do so in its
articles of incorporation or bylaws. Neither the Restated Articles of
Incorporation nor the Bylaws of Brainerd contain such an "opt out"
provision. However, the Articles of Incorporation of The Colonel's
Holdings contain a provision electing not to be governed by the Michigan
business combination statute. The Board of Directors believes that such
election will provide Brainerd with maximum flexibility to engage in
transactions that are regarded as in the best interests of Brainerd and its
shareholders but that would otherwise be prohibited or restricted by the
Michigan business combination statute.

Other Anti-Takeover Provisions. The Minnesota Business Corporation
Act also contains three other provisions relating to takeovers, only one of
which has a counterpart in the Michigan Business Corporation Act. The
provisions address a corporation's use of "golden parachutes," the standard
of conduct of the Board of Directors in connection with the consideration
of takeover proposals, and "greenmail."

The Minnesota Business Corporation Act contains a provision that
prohibits a publicly held corporation from entering into or amending
agreements (commonly referred to as golden parachutes) that increase
current or future compensation of any officer or director during any tender
offer or request for invitation of tender offers. The Michigan Business
Corporation Act does not contain a comparable provision.

The Minnesota Business Corporation Act authorizes the board of
directors, in considering the best interests of the corporation with
respect to a proposed acquisition of an interest in the corporation, to
consider the interests of the corporation's employees, customers, suppliers
and creditors, the economy of the state and the nation, community and
social considerations and the long-term as well as short-term interests of
the corporation and its shareholders, including the possibility that these
interests may be best served by the continued independence of the
corporation. The Michigan Business Corporation Act does not contain a
comparable provision.

The Minnesota Business Corporation Act also contains a provision that
limits the ability of a corporation to pay greenmail. The statute provides

113
that a publicly held corporation is prohibited from purchasing or agreeing
to purchase any shares from a person who beneficially owns more than 5% of
the voting power of the corporation if the shares have been beneficially
owned by that person for less than 6 months, and if the purchase price
would exceed the market value of those shares. However, such a purchase
will not violate the statute if the purchase is approved at a meeting of
the shareholders by a majority of the voting power of all shares entitled
to vote or if the corporation's offer is of at least equal value per share
and is made to all holders of shares of the class or series and to all
holders of any class or series into which the securities may be converted.

The Michigan greenmail statute provides that a corporation shall not
purchase any of its shares that are listed on a national securities
exchange from any person who owns 3% or more of its shares, unless (a) the
corporation makes an offer of at least equal value to all other holders of
the same class of shares, (b) the purchase is authorized in advance by the
shareholders entitled to vote, (c) the corporation's articles of
incorporation allow such a purchase, (d) the shares have been beneficially
owned by the person for two or more years, (e) the purchase is made on the
open market and not as a result of a privately negotiated transaction, (f)
the purchase price is not greater than the average market price per share
during the 30 business days preceding the purchase, or (g) the purchase is
authorized by other provisions of the Michigan Business Corporation Act.

Capitalization. The Articles of Incorporation of The Colonel's
Holdings authorizes the issuance of 35,000,000 shares of Common Stock, par
value $.01 per share, and 5,000,000 shares of preferred stock, par value
$.01 per share. Preferred shares may be issued in series, each series being
composed of such number of shares and having such dividend, liquidation,
voting, conversion, redemption and other rights, if any, as the Board of
Directors may determine. Currently, Brainerd is authorized to issue
10,000,000 shares of Common Stock, par value $.01 per share, 677,830 shares
of which were outstanding as of July 31, 1995. In the Reincorporation, one
share of Common Stock of The Colonel's Holdings will be issued for each one
outstanding share of Common Stock of Brainerd. Accordingly, while the
Reincorporation alone would not affect any shareholder's proportional
ownership interest in Brainerd, it would increase Brainerd's authorized but
unissued shares of Common Stock that would be available for future issuance
by the Board of Directors as it deems advisable and would grant the Board
the authority to issue preferred shares as it deems advisable.

Following the Reincorporation, the Board of Directors of The Colonel's
Holdings, without any further action on the part of the shareholders, will
be empowered to issue preferred shares in one or more series and to
determine the designation and authorized number of preferred shares of each
series, the dividend rates and payment dates for such series, the
liquidation prices for such series, the redemption rights and prices for
such series, voting rights, any sinking fund requirements for the series
and certain other rights, preferences, and privileges. In order to create
a particular series of preferred shares, the Board of Directors is required

114
under Michigan law to adopt resolutions establishing and designating the
preferred shares. A certificate containing the resolution(s) of the Board
of Directors establishing and designating the preferred shares and
prescribing the shares' relative rights and preferences must be filed with
the Michigan Corporation and Securities Bureau. Upon filing, the
certificate constitutes an amendment to the articles of incorporation.

Shareholder action generally would not be required with respect to any
such amendment, except as required under applicable law and stock exchange
or NASDAQ rules. It is currently anticipated that, subject to such law and
rules, no shareholder authorization for the issuance of any particular
series of the preferred shares would be sought.

Upon the issuance of preferred shares, no shareholder of the Company
would be entitled as a matter of right to subscribe for or purchase any
part of such issue.

Preferred shares will be available for issuance from time to time by
the Board of Directors of the Company for appropriate corporate purposes,
including the raising of capital through the sale of preferred shares in
public or private offerings, the issuance of warrants, options, or rights
to subscribe for such shares, the issuance of such shares in connection
with stock splits or dividends, the acquisition by the Company of other
businesses or properties and for other proper corporate purposes not now
determinable. The timing and terms of the issuance of preferred shares in
connection with any such transaction will depend on a number of factors,
including the economic and market conditions at the time of the specific
transaction, the Company's business, financial condition and strategic
goals, the particular circumstances of the transaction in which the shares
are issued and other factors.

The Company could issue previously authorized but unissued preferred
shares in a manner that could, depending on the terms of such issue, either
impede or facilitate the consummation of a merger, tender offer or other
take-over attempt. Although the Board of Directors of The Colonel's
Holdings would make any such determination to issue such stock based on its
judgment as to the best interests of the shareholders of the Company, the
Board of Directors could act so as to discourage an acquisition attempt or
other transaction that some or a majority of the shareholders might believe
to be in their best interests or in which shareholders might receive a
premium for their stock over the then market price of such stock.

The preferred shares also could be issued pursuant to a shareholders'
rights plan and, accordingly, may discourage a third party from making a
bid for the Company that is not approved by the Board of Directors.
Brainerd currently knows of no attempt to acquire the Company and, although
the Company may in the future consider adopting a shareholders' rights
plan, Brainerd has no plans to issue preferred shares to discourage such an
attempt. Brainerd has no agreements, commitments, or plans with respect to
the sale or issuance of any preferred shares.

115
Establishment of Classified Board of Directors. The Colonel's
Holdings Articles of Incorporation provide that the directors of The
Colonel's Holdings shall be divided into three classes, designated Class I,
Class II, and Class III. See "PROPOSAL V: ELECTION OF DIRECTORS" for the
identity of the directors who will be designated as Class I, Class II, and
Class III directors, and for their initial respective terms of office, which
will range from one to three years. At each annual meeting of shareholders
of The Colonel's Holdings, commencing in 1996, successors of the class of
directors whose term expires at that annual meeting will be elected for a
three-year term. If the number of directors is changed (other than as
discussed in the next paragraph with respect to directors elected by the
holders of preferred stock), any increase or decrease is to be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible. Any director elected to fill a vacancy or a newly
created directorship resulting from an increase in the authorized number of
directors shall hold office for a term coinciding with the remaining term of
the other directors of the same class. In no case will a decrease in the
number of directors shorten the term of any incumbent director.

Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock issued by The Colonel's Holdings have
the right, voting separately by class or series, to elect one or more
directors at an annual or special meeting of shareholders, the election,
term of office, filling of vacancies, and other features of such
directorships shall be governed by the terms of such preferred stock, and
such directors so elected shall not be divided into classes unless
expressly provided by such terms.

The Board of Directors believes that including a classified board
provision in The Colonel's Holdings Articles of Incorporation will be
advantageous to The Colonel's Holdings and its shareholders because, by
providing that directors will serve three-year terms rather than one-year
terms, it will enhance the likelihood of continuity and stability in the
composition of the Company's Board of Directors and in the policies
formulated by the board. The Board of Directors believes that this, in
turn, will permit The Colonel's Holdings Board more effectively to
represent the interests of all shareholders.

With a classified board of directors, it will generally take a
majority shareholder two annual meetings of shareholders to elect a
majority of the board of directors. As a result, a classified board may
discourage proxy contests for the election of directors or purchases of a
substantial block of stock because it could operate to prevent obtaining
control of the board in a relatively short period of time.

Personal Liability of Directors. Minnesota law provides that a
director of a Minnesota corporation shall discharge the duties of a
director in good faith, in a manner the director reasonably believes to be
in the best interests of the corporation, and with the care an ordinarily
prudent person in a like position would exercise under similar

116
circumstances. A director who so performs those duties may not be held
liable by reason of being a director or having been a director of the
corporation.

The Restated Articles of Incorporation of Brainerd provide that
directors shall not have personal liability to Brainerd or its shareholders
for monetary damages arising out of a breach of fiduciary duty. However,
such Restated Articles of Incorporation and Minnesota law provide that the
liability may not be eliminated or limited: (a) for any breach of a
director's duty of loyalty to the corporation or its shareholders; (b) for
acts or omissions of the director not in good faith or that involve
intentional misconduct or a knowing violation of law; (c) for illegal
distributions or other acts creating liability under Section 302A.559 of
the Minnesota Business Corporation Act; (d) for acts in connection with the
issuance of securities or other acts creating liability under
Section 80A.23 of the Minnesota Business Corporation Act; or (e) for any
transaction from which the director derived an improper personal benefit.

Section 541a of the Michigan Business Corporation Act provides that a
director of a Michigan corporation shall discharge his duties as a director
(including duties as a member of a committee) in good faith, with the care
an ordinarily prudent person in a like position would exercise under
similar circumstances, and in a manner he reasonably believes to be in the
best interests of the corporation. In discharging these duties, a director
is entitled to rely on information, reports, or statements prepared by
directors, officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented;
legal counsel, accountants, engineers or other persons as to matters the
director reasonably believes are within the person's professional or expert
competence; or a committee of the board of which the director is not a
member if the director believes the committee merits confidence. A
director is not, however, entitled to rely on the foregoing information if
he has knowledge that makes such reliance unwarranted. A director who so
performs these duties may not be held liable by reason of being a director
or having been a director of the corporation. No director may be sued for
failing to perform these duties more than two years after the cause of
action is discovered or reasonably should have been discovered or more than
three years after the act or omission occurred, which ever period is
shorter.

The Articles of Incorporation of The Colonel's Holdings provide that
directors shall not have personal liability to The Colonel's Holdings or
its shareholders for monetary damages arising out of a breach of fiduciary
duty by directors in their capacities as directors and that The Colonel's
Holdings will to the fullest extent of the law indemnify each director
against all actions, suits, or proceedings in which a director is made a
party by reason of being or having been a director of The Colonel's
Holdings, except in relation to matters in which the director is adjudged
to be liable for negligence or misconduct in the performance of duty. In
addition, under Michigan law, liability may not be eliminated for (a) a

117
breach of the duty of loyalty, (b) acts or omissions not in good faith or
that involve intentional misconduct or knowing violation of law, (c)
violations of Section 591(1) of the Michigan Business Corporation Act,
which creates director liability for various types of illegal distributions
or the making of improper loans, (d) transactions from which an improper
personal benefit was obtained, or (e) acts or omissions occurring prior to
the time the provision limiting liability became effective. Article XIX of
the proposed Articles of Incorporation is intended to give to the directors
of The Colonel's Holdings the full protection against personal liability
that is permitted under Michigan law.

The potential risks of personal liability may deter qualified
individuals from accepting a position as a director of The Colonel's
Holdings unless adequate insurance or other protection is available. The
Board believes that Article XIX will be important to Brainerd's efforts to
attract and retain qualified directors in the future.

Article XIX effects this limitation of directors' liability by
eliminating monetary liability for breach of the fiduciary duty of care.
The provision does not eliminate the duty of care imposed upon directors of
The Colonel's Holdings, but only eliminates a director's personal monetary
liability to the Company and the shareholders for actions that may be
deemed to constitute a breach of the duty of care in the decision making
context. The director's duty of care remains unchanged and will be
enforceable through such equitable remedies as injunctive relief or
rescission. The provision also does not eliminate the personal liability
of directors to the Company or the shareholders for monetary damages for
breaching their duty of loyalty, failing to act in good faith, engaging in
intentional misconduct or knowingly violating law, paying a dividend or
making an improper loan in violation of Section 551(1) of the Michigan
Business Corporation Act, or obtaining an improper personal benefit. The
provision will not eliminate or otherwise limit the liability of a director
for any act or omission occurring prior to the date the Reincorporation
becomes effective. The provision also does not change any of the separate
obligations of directors under the federal securities laws.

Even if directors were to breach their duty of care in performing
their duties as directors, neither The Colonel's Holdings nor its
shareholders could recover damages from any of the directors. In the
absence of Article XIX, The Colonel's Holdings or its shareholders could
recover damages from directors of the Company if the directors were to
breach their duty of care. Therefore, the personal benefits to the
directors of this provision may be at the expense of the shareholders of
the Company because Article XIX may reduce the likelihood of derivative
litigation against directors and may discourage or deter shareholders from
bringing a lawsuit against directors for breach of their duty of care, even
though such action, if successful, might otherwise have benefited The
Colonel's Holdings and its shareholders.

Brainerd is not aware of any pending or threatened litigation to which
the limitation of directors' liability would apply.
118
Indemnification. Minnesota law generally provides for mandatory
indemnification of persons acting in an official capacity on behalf of the
corporation if such person acted in good faith, received no improper
personal benefit, acted in a manner he reasonably believed to be in, or not
opposed to the best interests of the corporation and, in the case of a
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful.

Michigan law permits a corporation to indemnify officers, directors,
employees, or agents and expressly provides that the indemnification
provided for therein shall not be deemed exclusive of any indemnification
right under any bylaw, vote of shareholders, or disinterested directors, or
otherwise. Article VII of the Bylaws of The Colonel's Holdings provides
that the Company will indemnify its officers and directors to the fullest
extent permitted by law. Michigan law permits indemnification of directors
and officers against expenses and certain other liabilities arising out of
legal actions brought or threatened against them for their conduct on
behalf of The Colonel's Holdings, provided that each such person acted in
good faith and in a manner that he reasonably believed was in or not
opposed to the best interests of the Company. Indemnification by The
Colonel's Holdings is available in a criminal action only if such person
had no reasonable cause to believe that his conduct was unlawful.

Michigan law does not allow indemnification for directors in the case
of an action by or in the right of The Colonel's Holdings (including
shareholder derivative suits) unless the directors successfully defend the
action or indemnification (limited to expenses) is ordered by a court.

Amendment or Repeal of the Certificate and Bylaws. Under Michigan
law, the board of directors need not adopt a resolution setting forth an
amendment to the articles of incorporation before the shareholders may vote
thereon. Unless the articles of incorporation provide otherwise,
amendments of the articles of incorporation generally require the approval
of the holders of a majority of the outstanding stock entitled to vote
thereon, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of such shares or
would adversely affect the rights, powers, or preferences of such class or
series, a majority of the outstanding stock of such class or series also
would have to approve the amendment. The Colonel's Holdings Articles of
Incorporation provide for the amendment thereof in the manner prescribed by
statute except that they require approval of at least 66 2/3% of the total
voting power of all shares of stock entitled to vote, voting together as a
single class, for the amendment or repeal of, or the adoption of any
provision inconsistent with, the provisions of The Colonel's Holdings
Articles of Incorporation relating to (i) the alteration of The Colonel's
Holdings Bylaws by shareholders; (ii) election and removal of directors; or
(iii) the right to call a special meeting of the shareholders without
approval of the Board of Directors.

119
The Colonel's Holdings Articles of Incorporation and Bylaws each
provide that The Colonel's Holdings Bylaws may be repealed, altered,
amended, or rescinded by the Board of Directors without shareholder
approval. In addition, The Colonel's Holdings Bylaws may be repealed,
altered, amended, or rescinded by the shareholders of Brainerd at any
annual or special meeting of shareholders but only by the vote of holders
of not less than 66 2/3% of the total voting power of all shares of stock
of the Company entitled to vote in the election of directors, voting as a
single class.

The provisions requiring the affirmative vote of the holders of
66 2/3% or more of the total voting power of all shares of stock entitled
to vote to amend certain provisions of The Colonel's Holdings Articles of
Incorporation (including the provisions relating to the removal of
directors) and any provision of The Colonel's Holdings Bylaws will make it
more difficult for shareholders to make changes in The Colonel's Holdings
Articles of Incorporation and Bylaws, including changes designed to
facilitate the exercise of control over the Company. The requirement for a
66 2/3% shareholder vote will enable the holders of a minority of the
Company's stock to prevent the holders of a majority of the stock from
amending such provisions of The Colonel's Holdings Articles of
Incorporation or The Colonel's Holdings Bylaws. In addition, the
requirement for a 66 2/3% vote may be difficult to obtain because at least
66 2/3% of Brainerd's outstanding voting stock must be present or
represented by proxy at any meeting at which any such amendment is proposed
and must vote in favor of the amendment.

Under Minnesota law, before the shareholders may vote on an amendment
to the articles of incorporation, either a resolution to amend the articles
must have been approved by the affirmative vote of a majority of the
directors present at the meeting when such resolution was considered, or
the amendment must have been proposed by shareholders holding 3% or more of
the voting power of the shares entitled to vote. Amending the articles of
incorporation requires the affirmative vote of the holders of a majority of
the voting power present and entitled to vote at the meeting (and of each
class, if entitled to vote as a class), unless the articles of
incorporation require a larger proportion. Like Michigan law, Minnesota
law provides that a proposed amendment may be voted upon by the holders of
a class or series even if the articles of incorporation would deny that
right if, among other things, the proposed amendment would increase or
decrease the aggregate number of authorized shares of the class or series,
change the rights or preferences of the class or series, create a new class
or series of shares having rights and preferences prior and superior to the
shares of that class or series or limit or deny any existing preemptive
right of the shares of the class or series. The Restated Articles of
Incorporation of Brainerd are silent concerning their amendment.

Under Minnesota law, the power to adopt, amend, or repeal the bylaws
is vested in the board, unless the articles of incorporation reserve the
power for the shareholders. However, even if the power to amend the bylaws

120
is not so reserved, the power of the board is still subject to the
shareholders' power (under certain circumstances) to adopt, amend, or
repeal bylaws adopted, amended, or repealed by the board. Additionally,
only the shareholders may adopt or amend a bylaw provision fixing the
quorum for shareholder meetings, prescribing procedures for removing
directors or filling vacancies in the board, or fixing the number of
directors or their qualifications, terms of office and classifications.
The directors are allowed, however, to amend the bylaws to increase the
number of directors.

Unlike the Articles of Incorporation and Bylaws of The Colonel's
Holdings, neither the Restated Articles of Incorporation nor the Bylaws of
Brainerd contain any super majority provisions with respect to making,
amending, or repealing the Articles of Incorporation or Bylaws of Brainerd.

Nomination of Directors. The Colonel's Holdings Bylaws provide that
nominations of persons for election to the Board of Directors of The
Colonel's Holdings at the annual meeting of shareholders may be made at
such meeting by or at the direction of the Board of Directors, by any
nominating committee or person appointed by the Board of Directors, or by
any shareholder of The Colonel's Holdings entitled to vote for the election
of directors at the meeting who timely complies with the notice procedures
set forth in the Bylaws. To be timely, a shareholder's notice must be
delivered to or mailed to and received by the Secretary of the Company at
its principal executive office not less than 120 days prior to the
solicitation of proxies for the annual meeting of shareholders, subject to
any other requirements of law. Each notice of nomination must set forth:
(1) the name, age, business address, and residence address of each nominee
proposed in the notice; (2) the principal occupation or employment of each
nominee; (3) the number of shares of capital stock of the Company
beneficially owned by each nominee; (4) a statement that the nominee is
willing to be nominated; and (5) such other information concerning each
nominee as would be required under the rules of the Securities and Exchange
Commission in a Proxy Statement soliciting proxies for the election of such
nominees.

The Board believes that advance notice of nominations by shareholders
will afford a meaningful opportunity to consider the qualifications of the
proposed nominees and, to the extent deemed necessary or desirable by the
Board of Directors, will provide an opportunity to inform shareholders
about such qualifications. Although this nomination procedure does not
give the Board of Directors any power to approve or disapprove of
shareholder nominations for the election of directors, this nomination
procedure may have the effect of precluding a nomination for the election
of directors at a particular annual meeting if the proper procedures are
not followed and may discourage or deter a shareholder from conducting a
solicitation of proxies to elect directors or otherwise attempting to
obtain control of The Colonel's Holdings.

There are no comparable notice requirements in the Brainerd Restated
Articles of Incorporation or Bylaws.
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Removal of Directors; Filling Vacancies on the Board of Directors.
Under Michigan law, any director or the entire board of directors generally
may be removed, with or without cause, by the holders of a majority of the
shares entitled to vote at an election of directors. The Articles of
Incorporation and Bylaws of the Colonel's Holdings provide that the holders
of a majority of the shares entitled to vote may remove one or more
directors with or without cause. However, the Articles of Incorporation
and Bylaws further provide that if the holders of any class or series of
preferred stock are entitled to elect directors to the exclusion of the
other shareholders, then directors elected by such class or series shall
only be removed by the holders of a majority of that class or series.

The Brainerd Restated Articles of Incorporation and Bylaws do not
provide for the removal of directors. Under Minnesota law, directors may
be removed, with or without cause, by the affirmative vote of the holders
of the proportion or number of voting shares sufficient to elect a
director.

Under The Colonel's Holdings Articles of Incorporation and Bylaws,
newly created directorships resulting from any increase in the number of
directors or any vacancies on the Board of Directors may be filled by the
affirmative vote of a majority of the directors then in office. In
addition, The Colonel's Holdings Bylaws provide that the directors elected
to fill vacancies on the Board of Directors will serve for the unexpired
portion of the term of the director whose place has been filled, and a
director elected by the Board of Directors to fill a newly created
directorship resulting from an increase in the number of directors will
hold office until the next election of directors in the class to which he
is elected. The Articles of Incorporation and Bylaws of The Colonel's
Holdings further provide, however, that if the holders of any class or
series of preferred stock are entitled to elect one or more directors to
the exclusion of other shareholders, vacancies of that class or series may
be filled only by a majority vote of the directors elected by that class or
series then in office, whether or not those directors constitute a quorum
of the Board of Directors, or by the holders of that class or series.

The Brainerd Bylaws provide that vacancies on the Board of Directors
will be filled by the affirmative vote of a majority of the remaining
directors. Such Bylaws further provide that a director elected to fill a
vacancy shall hold office until a qualified successor is elected by the
shareholders.

Action by Directors Without a Meeting. Minnesota law permits
directors to take unanimous written action without a meeting in an action
otherwise required or permitted to be taken at a board meeting. Minnesota
law also provides that a corporation's articles of incorporation may
provide for such written action by the number of directors that would be
required to take the same action at a meeting of the board at which all
directors were present. The Brainerd Restated Articles of Incorporation
contain such a provision.

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Michigan law also allows director action without a meeting, unless the
corporation's articles of incorporation or bylaws prohibit such action.
The Michigan Business Corporation Act does not contain a provision allowing
director action on less than unanimous consent, meaning that written
actions by directors must be unanimous.

Limitation on Call of Meetings. The Articles of Incorporation and
Bylaws of The Colonel's Holdings provide that a special meeting of
shareholders may be called by the Board of Directors or by a committee of
the Board of Directors empowered to call special shareholder meetings (the
"Shareholder Meeting Provision"). The Shareholder Meeting Provision
further provides that special meetings shall not be called by shareholders,
except (a) in accordance with Section 403 of the Michigan Business
Corporation Act, or (b) upon approval by the Board of Directors, after a
shareholder has submitted a written request for a special meeting in
accordance with the procedures contained in The Colonel's Holdings Bylaws.

Section 403 of the Michigan Business Corporation Act provides that
upon the application of the holders of 10% or more of the outstanding stock
of a corporation entitled to vote at a meeting, the circuit court for the
county in which the corporation's registered office is located may, for
good cause shown, order a special meeting of shareholders. In addition,
under the Company's Bylaws, a shareholder may submit a written request for
a special meeting to the Secretary of the Company to call a special meeting
of shareholders. This application must contain a brief description of the
business to be conducted at the meeting and the reasons for conducting such
business at the meeting, the name and record address of the shareholder
proposing such business, the class and/or series and number of shares in
the Company held by the applicant shareholder, and any material interest to
the shareholder in such business. A special meeting shall be called if the
Board of Directors approves such an application.

The Shareholder Meeting Provision may make it more difficult for
shareholders to take actions that require a meeting of shareholders unless
the Board of Directors or a committee of the Board of Directors calls such
a meeting. Although the Shareholder Meeting Provision may have the effect
of delaying shareholder consideration of a proposal over the opposition of
the Board of Directors, the Board of Directors believes that shareholders
are provided a full opportunity to make proper proposals at duly convened
shareholder meetings and to request that any such proposal be presented for
consideration to other shareholders in the Company's annual proxy
statement.

Minnesota law provides that special meetings of the shareholders may
be called by the chief executive officer, the chief financial officer, two
or more directors, a person authorized in the articles of incorporation or
bylaws to call special meetings, or a shareholder or shareholders holding
10% or more of the voting power of the corporation, except that a special
meeting for the purpose of considering any action to facilitate or effect a
business combination, including any action that would affect the

123
composition of the board of directors for that purpose, may be called by a
shareholder or shareholders holding no less than 25% of the voting power of
the corporation. The Brainerd Bylaws provide that shareholders may call
special meetings in accordance with Minnesota law.

Business Introduced by Shareholders at Annual Meetings. The Colonel's
Holdings Bylaws provide that, where business introduced by a shareholder is
not specified in the notice of annual meeting, then in addition to any
other applicable requirements, for business to be properly introduced by a
shareholder at an annual meeting of shareholders, the shareholder must have
given timely notice thereof in writing to the Secretary of the Company. To
be timely, a shareholder's notice must be delivered to or mailed and
received by the Secretary of The Colonel's Holdings in the same manner and
subject to the same time requirements provided for stockholder notice of
nominations to the Board of Directors in accordance with Rule 14a-8 issued
under the Securities Exchange Act of 1934. See "Nomination of Directors."
A shareholder's notice must set forth as to each matter the shareholder
proposes to bring before the meeting: (1) a brief description of the
business desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (2) the name and record address of
the shareholder proposing such business; (3) the class, series, and number
of shares of The Colonel's Holdings Common Stock which are beneficially
owned by the shareholder; (4) any material interest of the shareholder in
such business; and (5) any other information required by Rule 14a-8.

The purpose of requiring advance notice of business to be brought by a
shareholder before an annual meeting is to enable the Board of Directors to
give advance notice of such business to the shareholders generally, and to
afford the Board of Directors a meaningful opportunity to consider the
merits of any matters to be raised by the shareholders. Although this
procedure does not give the Board of Directors any power to approve or
disapprove of such matters, this procedure may have the effect of
precluding the consideration of matters at a particular annual meeting if
the proper procedures are not followed, even if approval of such matters
may be deemed by some shareholders to be beneficial to The Colonel's
Holdings and its shareholders.

There are no comparable requirements in the Brainerd Restated Articles
of Incorporation or Bylaws.

Shareholders' Action Without a Meeting. Under Minnesota law, any
action required or permitted to be taken at a shareholders' meeting may be
taken without a meeting by written consent signed by all of the
shareholders entitled to vote on such action. This power cannot be
restricted by a Minnesota corporation's articles.

Michigan law provides that if a corporation's articles or bylaws so
provide, any action required or permitted to be taken at a shareholders'
meeting may be taken without a meeting upon the written consent of the
holders of outstanding shares having not less than the minimum number of

124
shares that would be required to take such action. Michigan law also
provides that any action required or permitted to be taken at a
shareholders' meeting may be taken without a meeting upon the unanimous
written consent of the shareholders. This power cannot be restricted by a
Michigan corporation's articles of incorporation.

The Colonel's Holdings Articles of Incorporation and Bylaws provide
that shareholder action may be taken without a meeting provided that (a)
written consents setting forth the action taken are signed by the holders
of record of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a
meeting, and (b) the Board of Directors ratifies the action to be taken in
advance.

Action by written consent may, in some circumstances, permit the
taking of shareholder action opposed by the Board of Directors more rapidly
than would be possible if a meeting of shareholders were required. The
Board of Directors believes, however, that it is important that it be able
to give advance notice of and consideration to any such shareholder action
in certain circumstances, and that shareholders be able to discuss at a
meeting matters which may affect their rights. The Board of Directors
believes that it is inappropriate for shareholders of a publicly held
corporation to take action affecting the corporation and its shareholders
without a meeting in certain circumstances, and, therefore, the Colonel's
Holdings Articles of Incorporation include a provision requiring board
ratification for shareholder action by written consent without a meeting.

Voluntary Dissolution. Minnesota law provides that a corporation may
be dissolved by the voluntary action of holders of a majority of a
corporation's shares entitled to vote at a meeting called for the purpose
of considering such dissolution. Michigan law provides that voluntary
dissolution of a corporation first must be recommended to the shareholders
by the Board of Directors. Michigan law, however, further provides that in
certain circumstances a corporation's articles of incorporation may
contain a provision that a shareholder, or the holders of a specified
number of shares, may require dissolution of a corporation at will or upon
the occurrence of a specified event. The Articles of Incorporation of The
Colonel's Holdings do not contain such a provision.

Involuntary Dissolution. Minnesota law provides that a court may
dissolve a corporation in an action by a shareholder where: (i) the
situation involves a deadlock in the management of corporate affairs and
the shareholders cannot break the deadlock; (ii) the directors have acted
fraudulently, illegally, or in a manner unfairly prejudicial to the
corporation; (iii) the shareholders are divided in voting power for two
consecutive regular meetings to the point where successor directors are not
elected; (iv) there is a case of misapplication or waste of corporate
assets; or (v) the duration of the corporation has expired.

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Michigan law provides that a court may dissolve a corporation in an
action brought by a shareholder where the directors or shareholders are
unable to agree by the requisite vote on material matters respecting
management of the corporation, or if the shareholders are so divided in
voting power that they have failed to elect successors to any directors
whose terms have expired. Dissolution is discretionary; it may be granted
in this situation if the corporation is unable to function effectively in
the best interests of its creditors and shareholders. In addition, the
Michigan Attorney General may bring an action to dissolve a corporation
that procured its organization through fraud or which repeatedly and
willfully either exceeded its legal authority or conducted its business in
an unlawful manner. These grounds are in addition to other statutory and
common law grounds for such an action by the attorney general. Dissolution
of a Michigan corporation will also occur upon the expiration of its term
as stated in its articles of incorporation, or where it has failed to file
an annual report or pay annual filing fees for two consecutive years.
Finally, under Section 489 of the Michigan Business Corporation Act, if a
shareholder establishes that the acts of the directors or those in control
of the corporation are willfully unfair and oppressive to the corporation
or to the shareholder, then a court may order appropriate remedies, which
may include dissolution.

Reorganization, Exchanges, Consolidation, and Sale of Assets;
Shareholder Voting and Appraisal Rights. With certain exceptions,
Minnesota law requires that a merger, sale of assets, or similar
reorganization transaction be approved by a majority vote of each class of
shares outstanding. Michigan law requires that a plan of merger or share
exchange be approved upon the majority vote of the holders of shares
entitled to vote, unless the articles of incorporation require a higher
percentage vote. Holders of a class or series are entitled to vote as a
class in the case of a merger if the plan contains a provision that, if
contained in a proposed amendment to the articles of incorporation, would
entitle the class or series to vote as a class, or, in the case of a share
exchange, if the class or series is included in the exchange. In addition,
Michigan law permits a merger without the approval of shareholders of the
surviving corporation, unless the articles or bylaws otherwise provide, if
(a) the articles of the surviving corporation will not be amended, and (b)
each shareholder of the surviving corporation will hold the same number of
shares, with identical rights, after the merger.

Michigan law provides for appraisal rights in merger and consolidation
situations, but does not provide for dissenters' rights of appraisal with
respect to: (a) shares that are listed on a national securities exchange or
that are held of record by not less than 2,000 persons, (b) mergers in
which the shareholders will receive cash, shares that are listed on a
national securities exchange or held by not less than 2,000 holders, or a
combination thereof, (c) share exchanges in which the shareholders will
receive cash, shares that are listed on a national securities exchange or
held by not less than 2,000 holders, or a combination thereof, or (d) sales
or exchanges of all or substantially all of the corporation's property

126
outside the usual course of business that are conducted pursuant to a plan
providing for distribution to the shareholders of substantially all of the
corporation's net interests within one year, if the transaction is for
cash, shares that are listed on a national securities exchange or held by
not less than 2,000 holders, or a combination thereof. Although held by
fewer than 2,000 shareholders, shares of Brainerd Common Stock are
currently listed on the NASDAQ Small-Cap Market system.

Minnesota law does, in general, afford dissenters' rights with respect
to the sale of all or substantially all of a corporation's assets, and a
merger by a corporation, regardless of whether the shares of the
corporation are listed on a national securities exchange or widely held.
In addition, Minnesota law provides that a shareholder may seek appraisal
rights for an amendment to the charter that materially and adversely
affects the rights or preferences of the shares of the dissenting
shareholder. The Michigan Business Corporation Act contains a comparable
provision. Finally, Michigan and Minnesota are similar as to the
procedures for asserting appraisal rights insofar as both states impose
most of the financial burden of the procedure on the corporation.

Conflicts of Interest. Under both Minnesota law and Michigan law, a
contract or transaction between a corporation and one or more of its
directors, or an entity in or of which one or more of the corporation's
directors are directors, officers, or legal representatives or have a
material financial interest, is not void or voidable solely by reason of
the conflict, provided that: (1) the transaction is fair to the
corporation at the time it is authorized or approved; (2) the shareholders
approve the transaction after disclosure of the relationship or interest;
or (3) after disclosure to the board, a majority of the disinterested board
members authorize the transaction. A transaction involving a loan,
guaranty, or other financial assistance by the corporation to a director
who also serves as an officer or employee of the Company would also require
board approval. For purposes of approval of the transaction by the board
of directors, Minnesota law provides that the interested director shall not
be counted in determining whether a quorum is present and shall not vote.
Michigan law provides that the directors may approve the transaction
regardless of whether the absence of the interested director or directors
results in the lack of a quorum of the board of directors. In addition,
while the presence of a vote cast by an interested director does not affect
the validity of such approval under Michigan law, a vote by an interested
director is not counted in determining whether the transaction has been
approved.

Management of the Affairs of the Corporation. Michigan and Minnesota
law both provide that the business and affairs of a corporation shall be
managed by or under the direction of the board of directors unless, in the
case of a Michigan corporation, the articles of incorporation provide
otherwise. Minnesota law provides that shareholders, by unanimous consent,
may take any action that Minnesota law requires or permits the board to
take or the shareholders to take after action or approval of the board. No
similar provision exists under Michigan law.
127

Preemptive Rights. Under Minnesota law, shareholders have preemptive
rights to acquire a certain fraction of the unissued securities or rights
to purchase securities of a corporation before the corporation may offer
them to other persons, unless the corporation's articles of incorporation
otherwise provide. The Brainerd Restated Articles of Incorporation
currently provide that Brainerd shareholders maintain no such preemptive
rights. Under Michigan law, no such preemptive right will exist, unless
the corporation's certificate of incorporation or an agreement between the
corporation and one or more shareholders specifies otherwise. The
Colonel's Holdings Articles of Incorporation will not provide for any such
preemptive rights.

Elimination of Cumulative Voting. Minnesota law provides that each
shareholder entitled to vote for directors has the right to cumulate those
votes in the election of directors by giving written notice of intent to do
so, unless the corporation's articles of incorporation provide otherwise.
Under cumulative voting, each share of stock entitled to vote in the
election of directors has such number of votes as is equal to the number of
directors to be elected. A shareholder may then cast all of his votes for
a single candidate or may allocate them among as many candidates as he may
choose. As a result, shareholders holding a significant minority
percentage of the outstanding shares entitled to vote in the election of
directors may be able to assure the election of one or more directors.
Currently, the Brainerd Restated Articles of Incorporation provide that
shareholders have no right to cumulate votes for the election of directors
or for any other matter.

Michigan law does not require that shareholders be given the right to
cumulate their votes, and The Colonel's Holdings Articles of Incorporation
do not provide for cumulative voting. As a result, the holder or holders
of a majority of the shares entitled to vote in an election of directors
will be able to elect all directors of the class then being elected.
Consequently, the absence of cumulative voting could have the effect of
preventing minority representation on the Board of Directors of The
Colonel's Holdings.

The Board of Directors believes that, in general, in publicly held
corporations each director should represent the interests of all of the
shareholders, rather than the interests of a special constituency, and that
the presence on the Board of one or more directors representing such a
constituency could disrupt and impair the efficient management of The
Colonel's Holdings.

Dividends. Generally, a Minnesota corporation may pay dividends if it
will be able to pay its debts in the ordinary course of business after
paying the dividend and if enough value remains in the corporation to
satisfy all preferences of senior securities. A Michigan corporation may
pay dividends or make other distributions if, after taking the distribution
into account, it would be able to pay its debts as they become due in the
ordinary course of business, and the corporation's total assets would be

128

greater than its liabilities plus, if the articles of incorporation so
provide, the amount that would be needed to satisfy the preferential rights
of shareholders upon distribution.

Stock Repurchases. Under Michigan law, unless its articles of
incorporation otherwise provide, a corporation may repurchase its shares,
subject to the same requirements for dividends and distributions set forth
above. Such shares generally become authorized but unissued shares and may
be reissued by the corporation unless its articles of incorporation
restrict its ability to do so. A Minnesota corporation may acquire its own
shares if, after the acquisition, it is able to pay its debts as they
become due in the ordinary course of business and if enough value remains
in the corporation to satisfy all preferences of senior securities.

Certain Consideration for Shares. Under both Minnesota and Michigan
law, shares will be fully paid if issued in exchange for a written
agreement to perform future services. In addition, both Minnesota and
Michigan law allow an unsecured written promissory note to serve as
sufficient consideration for the issuance of stock.

Changes in Capitalization

The Reincorporation of Brainerd in Michigan will not result in any
change in the business, management, assets, liabilities, or net worth of
Brainerd. Brainerd's stock certificates will automatically be deemed to
represent one share of The Colonel's Holdings Common Stock for each one
share of Brainerd Common Stock represented by such certificates prior to
the Reincorporation. Following the Reincorporation, previously outstanding
certificates for Brainerd Common Stock may be delivered in effecting sales
through a broker, or otherwise, of shares of The Colonel's Holdings. The
Colonel's Holdings Common Stock will be traded initially in the over-the-
counter market on the NASDAQ Small-Cap Market system where Brainerd's
shares are presently traded. The Colonel's Holdings Articles of
Incorporation authorize the issuance of 35,000,000 shares of common stock
and 5,000,000 shares of preferred stock while the Brainerd Restated
Articles of Incorporation authorize the issuance of 10,000,000 shares of
common stock. Thus, while the Reincorporation alone would not affect the
extent of any shareholder's proportional ownership interest in Brainerd, it
would increase Brainerd's authorized but unissued shares of Common Stock
which would be available for future issuance by the Board of Directors as
it deems advisable and substantially increases the authorized but unissued
shares of preferred stock available for such future issuance.

If approved by the shareholders, it is anticipated that the
Reincorporation will be completed as soon as practicable following such
approval. The Reincorporation may, however, be abandoned, either before or
after shareholder approval, if circumstances arise that, in the opinion of
the Brainerd Board of Directors, make it inadvisable to proceed.

129

Rights of Dissenting Shareholders

Section 302A.471 of the Minnesota Business Corporation Act grants any
shareholder of Brainerd of record on October 20, 1995, who objects to
the Reincorporation the right to have Brainerd purchase all of his shares
at their fair value. To be entitled to payment, the dissenting shareholder
must file a written objection to the Reincorporation with Brainerd prior
to the vote for the proposed Reincorporation and a written notice of intent
to demand payment of the fair value of his shares and must not vote any
shares in favor of the proposed Reincorporation; provided, however, that
such demand shall be of no force and effect if the proposed
Reincorporation is not effected. The liability to the dissenting
shareholder for the fair value of his shares also shall be the liability of
The Colonel's Holdings when and if the Reincorporation is consummated.
The rights of any dissenting shareholders and the specific procedures that
must be followed by any shareholder exercising dissenters' rights are
described in detail under "RIGHTS OF DISSENTING SHAREHOLDERS" above.
Additionally, attached as Appendix C are copies of Sections 302A.471
and 302A.473 of the Minnesota Business Corporation Act.

Material Federal Tax Consequences

The following is a summary of the material conclusions set forth in
the Tax Opinion with respect to the proposed Reincorporation. No ruling
has been or is expected to be requested from the Internal Revenue Service
("IRS") as to the tax consequences of such merger. Since no ruling has
been obtained, no assurance can be given that the IRS will agree with the
conclusions set forth in the Tax Opinion or that a challenge by the IRS, if
made, will not be successful.

The Reincorporation will qualify for federal income tax purposes as a
tax-free reorganization within the meaning of Section 368 of the Code. As
a tax-free reorganization, the federal income tax consequences to Brainerd
and its shareholders are as follows. No gain or loss will be recognized to
Brainerd or The Colonel's Holdings as a result of this transaction. No
gain or loss will be recognized to shareholders who are deemed to exchange
their Brainerd shares solely for The Colonel's Holdings shares by operation
of the Reincorporation. Shareholders will have the same tax basis in the
shares of The Colonel's Holdings deemed to be received in this transaction
as the basis in the shares of Brainerd deemed to be exchanged therefor, and
the holding period of the shares of The Colonel's Holdings will include the
period during which the shares of Brainerd were held, provided such shares
of Brainerd were held as capital assets on the effective date of
Reincorporation. In most instances, a dissenting shareholder who receives
payment for shares upon exercise of the right of appraisal will recognize
gain or loss for federal income tax purposes measured by the difference
between the basis for the shares and the amount of payment received. Such
gain or loss will be capital gain or loss if the shares were held as a
capital asset on the effective date of the Reincorporation.

130

The foregoing summary of material federal income tax consequences is
included for general information only and does not address the federal
income tax consequences to all holders, including any holder who acquired
shares of Brainerd Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation and corporations subject to the
alternative minimum tax. In view of the individual nature of tax
consequences, holders are urged to consult their own tax advisers as to the
specific tax consequences of the transaction, including the application and
effect of state, local, and foreign income and other tax laws.

Amendment

The Reincorporation Agreement may be amended, modified, or
supplemented prior to the effective time of the Reincorporation upon the
approval of the Board of Directors of Brainerd and The Colonel's Holdings
except that no amendment, modification, or supplement may be made after the
adoption of the Reincorporation Agreement by the shareholders of Brainerd
which changes the Reincorporation Agreement in a way which, in the judgment
of the Board of Directors of Brainerd, would have a material adverse effect
on the shareholders of Brainerd, unless such amendment, modification, or
supplement is approved by such shareholders.

Termination

The Reincorporation Agreement provides that the Board of Directors of
Brainerd may terminate the Reincorporation Agreement and abandon the merger
contemplated thereby at any time prior to its effective time, whether
before or after approval by the shareholders of Brainerd, if (i) the
Reincorporation shall not have received the requisite approval of the
shareholders of Brainerd or (ii) the Board of Directors of Brainerd
determines for any reason in its sole judgment that the consummation of the
transaction would be inadvisable or not in the best interests of Brainerd
and its shareholders.

Shareholder Vote Required to Approve the Proposal

Approval of the Reincorporation proposal will require the affirmative
vote of the holders of a majority of the shares of Brainerd Common Stock
entitled to vote at the Brainerd Meeting. Brainerd has been informed by
Donald J. Williamson, who is the holder of approximately 9.9% of the shares
of Common Stock entitled to vote, that he intends to vote his shares in favor
of the proposal. For purposes of counting votes on this proposal,
abstentions and broker non-votes will effectively be treated as votes against
the proposal. The shares represented by proxies received from Brainerd
shareholders will be voted FOR approval of the Reincorporation proposal unless
a vote against the proposal is specifically indicated in the proxy.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THIS PROPOSAL

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PROPOSAL III:
TRANSFER OF BRAINERD INTERNATIONAL RACEWAY
TO A WHOLLY OWNED SUBSIDIARY OF BRAINERD

Transfer of Raceway Assets and Obligations

The Brainerd Board of Directors has approved and recommends for
shareholder approval the transfer of all of the assets and obligations of
Brainerd associated with the Brainerd International Raceway (the "Raceway")
to a wholly owned subsidiary of Brainerd. The subsidiary is to be
incorporated in the State of Minnesota with the name Brainerd International
Raceway, Inc. ("Brainerd Subsidiary"). Following approval by shareholders,
Brainerd would transfer and assign all of the assets and property
associated with the Raceway to Brainerd Subsidiary and Brainerd Subsidiary
would assume and agree to perform all liabilities and obligations of
Brainerd associated with the Raceway. It is anticipated that the consent
of certain third parties may be required to assign certain executory
contracts or agreements currently in effect from Brainerd to Brainerd
Subsidiary. In the event any such third party consents are not obtained,
Brainerd's successor following the Reincorporation, The Colonel's Holdings,
would enforce and perform such executory contracts or agreements on behalf
of Brainerd Subsidiary. All of the issued capital stock of Brainerd
Subsidiary will be held by Brainerd's successor following the Merger, The
Colonel's Holdings. It is anticipated that the transfer of assets and
assumption of liabilities associated with the Raceway would occur as soon
as reasonably practicable following completion of the proposed Merger and
Reincorporation.

Reasons for Transfer of Raceway Assets and Obligations

The formation of Brainerd Subsidiary and the transfer of the assets
and obligations associated with the Raceway to Brainerd Subsidiary is
designed, in connection with the proposed Merger and Reincorporation, to
result in a corporate organization having a holding company with two
operating subsidiaries. The Colonel's Holdings as the successor of
Brainerd in the Reincorporation will be the issuer of publicly traded
shares of common stock and will serve as the holding company of two wholly
owned operating subsidiaries: The Colonel's and Brainerd Subsidiary. The
Colonel's, a Michigan corporation, will conduct the business of
manufacturing and selling plastic replacement bumpers and facias and will
hold title to the assets associated with the automotive replacement parts
manufacturing business. Brainerd Subsidiary will conduct the business of
the Raceway and will hold title to the assets associated with the Raceway.

The Brainerd Board of Directors believes that the holding company form
of corporate organization outlined above will serve as the most efficient
form of organization for the combined operations of The Colonel's and
Brainerd. The Colonel's Holdings will have general management authority

132
and oversight for both The Colonel's and Brainerd Subsidiary, will be
responsible for preparing consolidated financial statements and periodic
reports required under federal securities laws for the affiliated companies
and will be responsible for investor relations with shareholders of The
Colonel's Holdings. Because The Colonel's and Brainerd Subsidiary have
different types of business operations, have not historically shared
management and have principal business locations in different states,
Brainerd believes that the most efficient corporate structure will be a
holding company with separate subsidiaries for the business of each of The
Colonel's and Brainerd Subsidiary. The holding company structure is also
intended to benefit The Colonel's Holdings in the event of any future
acquisitions or business combinations by permitting The Colonel's Holdings,
as the holding company, to form new wholly owned subsidiaries as required
for new business ventures, consistent with the existing corporate
structure.

Rights of Dissenting Shareholders

Any shareholder of Brainerd of record on October 20, 1995, who objects
to the transfer of Brainerd's assets to Brainerd International Raceway,
Inc. has the right to have Brainerd purchase all of his shares at their
fair value. Although Brainerd does not believe that the Minnesota
Business Corporation Act requires dissenters' rights in connection with
the transfer of Raceway assets to a wholly owned subsidiary, the Brainerd
Board of Directors voted to grant Brainerd shareholders dissenters' rights
in connection with the proposal. To be entitled to payment, the dissent-
ing shareholder must file a written objection to the proposed transfer with
Brainerd prior to the vote for the proposal and a written notice of intent
to demand payment of the fair value of all of his shares and must not vote
any shares in favor of the proposed transfer; provided, however, that such
demand shall be of no force and effect if the proposed transfer is not
effected. The liability to the dissenting shareholder for the fair value
of his shares also shall be the liability of The Colonel's Holdings when
and if the Reincorporation is consummated. The rights of any dissenting
shareholders and the specific procedures that must be followed by any
shareholder exercising dissenters' rights are described in detail under
"RIGHTS OF DISSENTING SHAREHOLDERS" above. Additionally, attached as
Appendix C is a copy of Sections 302A.471 and 302A.473 of the Minnesota
Business Corporation Act.

Material Federal Tax Consequences

The following is a summary of the material conclusions set forth in
the Tax Opinion with respect to the proposed transfer of assets and
liabilities associated with the Raceway to Brainerd Subsidiary. No ruling
has been or is expected to be requested from the Internal Revenue Service
("IRS") as to the tax consequences of such transfer. Since no ruling has
been obtained, no assurance can be given that the IRS will agree with the
conclusions set forth in the Tax Opinion or that a challenge by the IRS,
if made, will not be successful.

133
The proposed transfer of Raceway assets and liabilities to the wholly
owned subsidiary will qualify for federal income tax purposes as a tax-free
transaction under Sections 351 and 357 of the Code. a tax-free transaction,
the federal income tax consequences to Brainerd and its shareholders are as
follows. No gain or loss will be recognized to Brainerd or Brainerd
Subsidiary as a result of this transaction. No gain or loss will be
recognized to shareholders of Brainerd. Brainerd Subsidiary will have the
same tax basis in the assets transferred from Brainerd in this transaction
as the basis in the assets previously maintained by Brainerd.

Shareholder Vote Required to Approve the Proposal

Approval of the proposal will require the affirmative vote of the
holders of a majority of shares of Brainerd common stock voting in person
or by proxy at the Brainerd Meeting. Brainerd has been informed by
Donald J. Williamson, who is the holder of approximately 9.9% of the shares
of common stock entitled to vote, that he intends to vote his shares in favor
of the proposal. For purposes of counting votes on this proposal,
abstentions will effectively be treated as votes against the proposal and
broker non-votes will not be counted as voted on the proposal, and the number
of shares of which a majority is required will be reduced by the number of
broker non-votes. The shares represented by proxies received from Brainerd
shareholders will be voted FOR approval of the proposal unless a vote against
the proposal is specifically indicated in the proxy.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THIS PROPOSAL

PROPOSAL IV:
APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN

The Brainerd Board of Directors believes that Brainerd's long-term
interests will best be advanced by aligning the interests of its key
business leaders and employees with the interests of its shareholders.
Therefore, to attract and retain directors, officers, and other key
management employees of exceptional abilities, and in recognition of the
significant and extraordinary contributions to the long-term performance
and growth of the company made by these individuals, on February 27, 1995,
the Board of Directors adopted, subject to shareholder approval, The
Colonel's Holdings, Inc. 1995 Long-Term Incentive Plan (the "1995 Incentive
Plan"). ("The Colonel's Holdings" is the proposed new name for Brainerd.
See "PROPOSAL II: REINCORPORATION OF BRAINERD.") The 1995 Incentive Plan is
intended to supplement Brainerd's existing 1987 Stock Option Plan as
described later in this Proxy Statement. The Board of Directors
believes that the adoption and implementation of the 1995 Incentive Plan is now
advisable to make additional shares available for stock option grants, and
restricted stock awards and other forms of long-term incentive compensation.

134
The Board of Directors contemplates that the 1995 Incentive Plan would
primarily be used to grant stock options. However, the 1995 Incentive Plan
would also permit grants of restricted stock, stock awards, stock
appreciation rights and tax benefit rights if determined to be desirable to
advance the purposes of the 1995 Incentive Plan. These grants and awards
are referred to as "Incentive Awards." By combining in a single plan many
types of incentives commonly used in long-term incentive compensation
programs, it is intended that the 1995 Incentive Plan would provide
significant flexibility to the Compensation Committee of the Board of
Directors to tailor specific long-term incentives that would best promote
the objectives of the 1995 Incentive Plan, and in turn promote the
interests of the company's shareholders.

The following is a summary of the principal features of the 1995
Incentive Plan. The summary is qualified in its entirety by reference to
the terms of the 1995 Incentive Plan, the complete text of which is
attached as Appendix G to this Proxy Statement.

Persons eligible to receive Incentive Awards under the 1995 Incentive
Plan (with certain limitations discussed below) include directors
(currently five persons), corporate officers (currently three persons), and
other key employees (currently no other persons) of Brainerd. Following
completion of the Merger and transfer of Brainerd's operating assets to
Brainerd International Raceway, Inc., The Colonel's and Brainerd
International Raceway, Inc. will be wholly owned subsidiaries of The
Colonel's Holdings. The directors, executive officers and other key
employees of The Colonel's Holdings, The Colonel's and Brainerd
International Raceway, Inc. will be eligible to receive Incentive Awards
under the 1995 Incentive Plan. Other individuals eligible to participate in
the 1995 Incentive Plan may join The Colonel's Holdings, The Colonel's or
Brainerd International Raceway, Inc. in the future. A maximum of 3,000,000
shares of Common Stock (subject to certain antidilution adjustments) would
be available for Incentive Awards under the 1995 Incentive Plan. Of the
3,000,000 shares authorized for Incentive Awards under the 1995 Incentive
Plan, only one-half could be awarded as restricted stock. Shares to be
issued under the 1995 Incentive Plan would be authorized and unissued.
Because directors, officers and key employees of The Colonel's Holdings and
its subsidiaries may receive awards under the 1995 Incentive Plan, they may
be deemed to have an interest in the 1995 Incentive Plan. The 1995
Incentive Plan would not be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code") and would not be subject to
the Employee Retirement Income Security Act of 1974.

The 1995 Incentive Plan would be administered by a Stock Option
Committee (the "Committee"), which is to be comprised of two nonemployee
directors, neither of whom participates or is eligible to participate in
any long-term incentive plan of The Colonel's Holdings or its subsidiaries,
except for nondiscretionary stock option grants based upon a specified
formula, and both of whom must be "outside directors" as defined in the
rules issued pursuant to Section 162(m) of the Code. The Committee would

135
make determinations, subject to the terms of the 1995 Incentive Plan, as to
the persons to receive Incentive Awards, the amount of Incentive Awards to
be granted to each person, the terms of each grant, and all other
determinations necessary or advisable for administration of the 1995
Incentive Plan. The Committee could amend the terms of Incentive Awards
granted under the 1995 Incentive Plan from time to time in a manner
consistent with the 1995 Incentive Plan; provided, however, that no
amendment could be effective relating to a particular Incentive Award
without the consent of the relevant participant, except to the extent the
amendment operated solely to the benefit of the participant.

Under the 1995 Incentive Plan, participants could be granted stock
options. A stock option is the right to purchase a specified number of
shares of stock issued by the company for a stated price at specified
times. Certain stock options that could be granted to employees under the
1995 Incentive Plan may qualify as incentive stock options as defined in
Section 422(b) of the Code. Other stock options, including all stock
options that will be granted to directors who are not employees, would not
be incentive stock options within the meaning of the Code. Stock options
could be granted at any time prior to the termination of the 1995 Incentive
Plan according to its terms or by action of the Committee.

The Committee would set forth the terms of individual grants of stock
options in stock option agreements, which agreements would contain such
terms and conditions, consistent with the provisions of the 1995 Incentive
Plan, as the Committee determined appropriate. These restrictions may
include vesting requirements to encourage long-term ownership of shares.
The Colonel's Holdings will receive no consideration upon the award of
options. The option price per share would be determined by the Committee
and would be a price equal to or higher than the "market value" of The
Colonel's Holdings Common Stock on the date of grant. "Market Value" means
the last reported sales price of shares of The Colonel's Holdings Common
Stock as reported on the NASDAQ system on the date of grant, or if no
shares were traded on that date, the last preceding date on which shares
were traded. On September 19, 1995, the last reported sales price of
Brainerd Common Stock on the NASDAQ system was $5.50 per share. When
exercising all or a portion of an option, a participant could pay the
exercise price with cash or, with the consent of the Committee, shares of
common stock or other consideration substantially equivalent to cash. If
shares of common stock are used to pay the exercise price and the Committee
consents, a participant may use the value of shares received upon exercise
for further exercises in a single transaction, permitting a participant to
fully exercise an option with a relatively small initial cash or stock
payment. The Committee could also authorize payment of all or a portion of
the option price in the form of a promissory note or installments on such
terms as the Committee approved. The Board of Directors could restrict or
suspend the power of the Committee to permit such loans and could require
that adequate security be provided.

136
In addition to the options that can be granted in the discretion of
the Committee, the 1995 Incentive Plan provides that stock options will be
automatically granted to each nonemployee director on March 1 and
September 1 of each year. The 1995 Incentive Plan provides that the
directors eligible to receive automatic options will receive options to
purchase 500 shares on September 1, 1995. For each automatic grant after
September 1, 1995, the number of shares subject to the grant will equal
105% of the number of shares subject to the previous automatic grant under
the 1995 Incentive Plan, with the result rounded up or down to the nearest
5-share increment (for example, options for 105% of 500 shares will be
granted on March 1, 1996; options for 105% of that figure will be granted
on September 1, 1996).

Stock options granted to nonemployee directors will not qualify as
incentive stock options. The exercise price of each option awarded to a
nonemployee director will be 100% of the market value at the date of grant.
A nonemployee director may pay the exercise price in cash or stock and
would have 10 years after the date of grant to exercise each option. The
1995 Incentive Plan provides that any new director who would be eligible to
receive an automatic grant and is elected or appointed other than on a
grant date would receive an option on the date of his or her election or
appointment for the number of shares granted to nonemployee directors in
the previous grant under the 1995 Incentive Plan. The option price for an
option awarded to a new director under this provision would be the market
value of Common Stock as of the date of his or her appointment or the date
of the prior grant, whichever is higher.

Although the term of each stock option would be determined by the
Committee, no stock option would be exercisable under the 1995 Incentive
Plan after the expiration of 10 years from the date it was granted.
Options generally would be exercisable for limited periods of time in the
event an option holder was terminated from employment with The Colonel's
Holdings or its subsidiary without cause, died, or became disabled. If an
option holder was terminated for cause, the option holder would forfeit all
rights to exercise any outstanding options. Options granted to
participants under the 1995 Incentive Plan could not be transferred except
by will or by the laws of descent and distribution. There is no specified
limit on the number of options that could be granted to any individual
participant under the 1995 Incentive Plan, except that (i) semiannual
grants to each nonemployee director are limited to the formula as provided
in the 1995 Incentive Plan; and (ii) no participant could receive Incentive
Awards which constitute more than 25% of the total Incentive Awards granted
under the 1995 Incentive Plan.

Because the number of participants and the market value of The
Colonel's Holdings Common Stock on the grant date cannot presently be
determined, the benefits or amounts that will be received by participants
under the 1995 Incentive Plan are not determinable. If the 1995 Incentive
Plan had been in effect for the fiscal year ended December 31, 1994, no

137
benefits would be determinable, except stock option awards to nonemployee
directors would have been as follows:

<TABLE>
NEW PLAN BENEFITS
1995 LONG-TERM INCENTIVE PLAN
<CAPTION>
Dollar Value at Number of Securities
Group September 19, 1995<FN1> underlying Options

<S> <C> <C>
Non-Executive Director Group $6,253.12 3,125<FN2><FN3>
<FN>
___________________________

<FN1> The dollar value of a stock option is determined by calculating the
spread between the exercise price of the option and the current value
of the company's common stock. In the table, the dollar value is
calculated for the directors serving on the dates of grant (March 1,
1994, September 1, 1994, and September 27, 1994) as the difference
between the market value of Brainerd Common Stock on the date of grant
and the market value as of September 19, 1995. The dollar value in
the table for the directors appointed or elected after one of those
grant dates is the difference between the market value on the date of
his or her election or appointment or the date of the previous grant,
whichever is higher, and the market value as of September 19, 1995.
On March 1, 1994, the last reported sale for Brainerd Common Stock on
the NASDAQ System was $1.00. On September 1, 1994, the last sale for
Brainerd Common Stock was $1.875. On September 27, 1994 (when 4
nonemployee directors were appointed), the last sale was reported at
$4.50. On September 19, 1995, the last sale was $5.50.

<FN2> Includes the following: (a) stock options to purchase 500 shares of
Common Stock granted on March 1, 1994, to 1 nonemployee director
serving on that date; (b) stock options to purchase 525 shares (105%
of 500 rounded to the nearest 5-share increment) granted on
September 1, 1994, to 1 nonemployee director serving on that date; and
(c) stock options to purchase 2,100 shares for 4 nonemployee directors
whose service as directors began after September 1, 1994.

<FN3> Because of the changes of the Brainerd Board during the past year
arising in connection with the purchase of Brainerd shares by
Donald J. Williamson, a different depiction of benefits under the
1995 Incentive Plan would have transpired if the current directors
served on the Board for 1994. In addition to the assumptions above,
if the current Board also served as directors for all of 1994, the
dollar value of benefits to nonemployee directors as of September 19,
1995 would have been $16,612.50. This calculation is based on the
assumption that 500 shares would have been granted on March 1, 1994

138
to each of the four nonemployee directors and 525 shares would have
been granted on September 1, 1994 to each of those directors.
</FN>
</TABLE>

Under current federal income tax laws, no income would be realized
when an option is granted pursuant to the 1995 Incentive Plan. A
participant exercising an incentive stock option would not recognize income
at the time of the exercise. The difference between the market value and
the exercise price would, however, be a tax preference item for the purpose
of calculating alternative minimum tax. Upon sale of the stock, so long as
the participant held the stock for at least one year after the exercise of
the option and at least two years after the grant of the option, the
participant's basis would equal the option price, and the participant would
pay tax on the difference between the sale price and the option price as
capital gain, in which case Brainerd would not be entitled to any deduction
for compensation income. If, prior to the expiration of either of the
above holding periods, the participant sold shares acquired under an
incentive stock option, the tax deferral would be lost, and the participant
would recognize compensation income equal to the difference between the
option price and the fair market value of the shares sold at the time of
exercise, but not more than the maximum amount that would not result in a
loss on the disposition (generally the difference between the option price
and the price at which the shares are sold). Brainerd would then receive a
corresponding deduction for federal income tax purposes. Additional gains,
if any, would be recognized by the participant as short- or long-term
capital gain.

If a participant exercised stock options that were not incentive stock
options, the participant would recognize compensation income in the year of
exercise equal to the difference between the stock option price and the
fair market value of the shares on the date of exercise. The Colonel's
Holdings would receive a corresponding deduction for federal income tax
purposes. The optionee's tax basis in the shares acquired would be
increased by the amount of compensation income recognized. Sale of the
stock after exercise would result in recognition of short- or long-term
capital gain or loss.

In addition to the authority to grant stock options under the 1995
Incentive Plan, the 1995 Incentive Plan would allow the Committee to award
restricted stock. Restricted stock would be subject to such terms and
conditions, consistent with the provisions of the 1995 Incentive Plan, as
the Committee from time to time determined. As with stock option grants,
the Committee would set forth the terms of individual awards of restricted
stock in restricted stock agreements. Unlike stock options, however, no
more than one-half of the 3,000,000 shares available for Incentive Awards
under the 1995 Incentive Plan could be awarded as restricted stock. Unless
the Committee provided otherwise in a restricted stock agreement, if a
participant's employment is terminated during the restricted period set by
the Committee for any reason other than death, disability, retirement (as

139
defined in the 1995 Incentive Plan), or termination for cause, the
participant's restricted stock would be entirely forfeited. If the
participant's employment is terminated during the restricted period by
reason of death, disability or retirement, the restrictions on the
participant's shares would terminate automatically with respect to that
number of shares (rounded to the nearest whole number) equal to the total
number of shares of restricted stock awarded to the participant multiplied
by the percentage of the total restricted period that had elapsed since the
date of grant. All remaining shares would be forfeited and returned to the
Company, unless the Committee provided otherwise. If the participant's
employment is terminated for cause, the participant would forfeit all stock
then subject to restrictions.

Without Committee authorization, a recipient of restricted stock could
not sell, exchange, transfer, pledge, assign, or otherwise dispose of such
stock other than to The Colonel's Holdings or by will or the laws of
descent or distribution. In addition, the Committee could impose other
restrictions on shares of restricted stock. However, holders of restricted
stock would enjoy all other rights of shareholders with respect to
restricted stock, including the right to vote restricted shares at
shareholders' meetings and the right to receive all dividends paid with
respect to restricted stock. Any securities received by a holder of
restricted stock pursuant to a stock dividend, stock split,
recapitalization, or reorganization would be subject to the same terms,
conditions, and restrictions applicable to the restricted stock for which
such shares are received.

Generally, a participant would not recognize income upon the award of
restricted stock. However, a participant would be required to recognize
compensation income on the value of restricted stock at the time the
restricted stock vested (when the restrictions lapse). At the time the
participant recognized this compensation income, Brainerd would be entitled
to a corresponding deduction for federal income tax purposes. If
restricted stock was forfeited by a participant, the participant would not
recognize income, and Brainerd would not receive a deduction. Prior to the
lapse of restrictions, dividends paid on restricted stock would be reported
as compensation income to the participant, and Brainerd would receive a
corresponding deduction.

A participant could, within thirty days after the date of an award of
restricted stock, elect to report compensation income for the tax year in
which the award of restricted stock occurred. If the participant made such
an election, the amount of compensation income would be the value of the
restricted stock at the time of the award. Any later appreciation in the
value of the restricted stock would be treated as capital gain and realized
only upon the sale of the restricted stock. Dividends received after such
an election was made would be taxable as dividends and not treated as
additional compensation income. If, however, restricted stock was
forfeited after the participant had made an election as described above,
the participant would not be allowed any deduction for the amount earlier

140
taken into income. Upon the sale of restricted stock, a participant would
realize capital gain (or loss) in the amount of the difference between the
sale price and the value of the stock previously reported by the
participant as compensation income.

The 1995 Incentive Plan also permits the Committee to grant tax
benefit rights, which would be subject to such terms and conditions as the
Committee determined appropriate. A tax benefit right is a cash payment
received by a participant upon exercise of a stock option. The amount of
the payment would not exceed the amount determined by multiplying the
ordinary income realized by the participant (and deductible by the Company)
upon exercise of stock options that are not incentive stock options, or
upon a disqualifying disposition of an incentive stock option, by the
maximum federal income tax rate (including any surtax or similar charge or
assessment) for corporations plus the applicable state and local tax
imposed on the exercise of the stock option or disqualifying disposition.
Unless the Committee provided otherwise, the net amount of a tax benefit
right, subject to withholding, could be used to pay a portion of the stock
option price. Tax benefit rights could be issued with respect to stock
options granted not only under the 1995 Incentive Plan but also with
respect to existing or future stock options awarded under any other plan of
the Company that has been approved by the stockholders as of the date of
the 1995 Incentive Plan.

The 1995 Incentive Plan permits the Committee to grant stock
appreciation rights. A stock appreciation right is an award that allows
the participant to receive the appreciation value of the Company's Common
Stock without actually owning shares in the Company. The appreciation
value would be equal to the excess of the market value of the shares at the
time of exercise less the option price of those shares. The participant
would receive payment in cash, shares of Common Stock or some combination
of the two. For payments made in shares of Common Stock, the shares would
be valued as of the date of surrender of the stock appreciation right. The
1995 Incentive Plan provides that stock appreciation rights must be related
to a particular option. A stock appreciation right could be granted at the
same time or after the option to which the right is related. The stock
appreciation right, therefore, could provide the participant with the
capital necessary to exercise a stock option.

Finally, the 1995 Incentive Plan gives the Committee authority to make
stock awards. A stock award is an award of the Company's Common Stock that
is subject to terms and conditions determined by the Committee at the time
of the award. Stock award recipients would generally have all voting,
dividend, liquidation and other rights with respect to shares of Common
Stock received upon becoming the holder of record of the Common Stock.
However, the Committee could impose restrictions on the assignment or
transfer of Common Stock awarded under a stock award.

Whenever Incentive Awards are made under the 1995 Incentive Plan,
Brainerd could withhold from any cash otherwise payable to the participant

142
or require the participant to remit to Brainerd an amount sufficient to
satisfy all applicable federal, state, and local withholding taxes.
Withholding could be satisfied by withholding shares of Brainerd Common
Stock to be received upon exercise or by delivery to Brainerd of previously
owned shares of Brainerd Common Stock.

The Board of Directors could terminate the 1995 Incentive Plan at any
time, and could from time to time amend the 1995 Incentive Plan as it
deemed proper and in the best interests of Brainerd, provided that without
shareholder approval no such amendment could: (i) materially increase
either the benefits to participants under the 1995 Incentive Plan or the
number of shares that could be issued under the 1995 Incentive Plan; (ii)
materially modify eligibility requirements; (iii) modify the formula grant
provisions with respect to automatic grants to nonemployee directors more
than once in any six-month period; or (iv) impair any outstanding Incentive
Award without the consent of the participant, except according to the terms
of the Incentive Award. Subject to approval by Brainerd shareholders, the
1995 Incentive Plan would take effect at the 1995 Annual Meeting of
Shareholders, and, unless previously terminated by the Board of Directors,
the 1995 Incentive Plan would terminate ten years after the date it becomes
effective. No award could be made under the 1995 Incentive Plan after that
date.

Brainerd intends to register shares covered by the 1995 Incentive Plan
under the Securities Act of 1933 before any Incentive Award would vest or
become exercisable.

Shareholder Vote Required to Approve the Proposal

The affirmative vote of the holders of a majority of shares of
Brainerd Common Stock present in person or by proxy and voting on this
proposal is required to approve the 1995 Incentive Plan. Brainerd has been
informed by Donald J. Williamson, who is the holder of approximately 9.9% of
the shares of common stock entitled to vote, that he intends to vote his
shares in favor of the proposal. For purposes of counting votes on this
proposal, abstentions will effectively be treated as votes against the
proposal and broker non-votes will not be counted as voted on this proposal,
and the number of shares of which a majority is required will be reduced by
the number of broker non-votes. The Board of Directors has determined that
the 1995 Incentive Plan is in the best interests of Brainerd and its
shareholders. The shares represented by proxies received from Brainerd
shareholders will be voted FOR approval of the adoption of the 1995 Incentive
Plan unless a vote against such approval or to abstain from voting is
specifically indicated in the proxy.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN

142
PROPOSAL V:
ELECTION OF DIRECTORS OF BRAINERD

General

The Brainerd Board of Directors proposes that the following six
directors be elected as directors of Brainerd to hold office (subject to
Brainerd's Bylaws) until their successors have been elected and qualified.
Assuming approval of the restatement of the Articles of Incorporation of
Brainerd to provide for a classified Board of Directors, two directors will
be elected to three-year terms, two directors will be elected to two-year
terms and two directors will be elected to one-year terms, as set forth
under "Directors and Executive Officers." See "BRAINERD PROPOSAL II:
REINCORPORATION OF BRAINERD - Establishment of Classified Board of
Directors." If the proposal to provide for a classified board is not
approved, six directors will be elected to one-year terms. The nominees
for election are:

Donald J. Williamson
Richard L. Roe
Gary Moore
Ted M. Gans
J. Daniel Frisina
Lisa K. Morrow

It is the intention of the person named on the enclosed proxy to vote,
unless otherwise instructed, for the election of the nominees listed above.
Each of the nominees has consented to being named in this Proxy Statement and
Prospectus and to serve if elected. If any nominee should become unable or
unwilling to serve, which is not contemplated, the enclosed proxy may be voted
for the election of a substitute nominee who may be designated by the Brainerd
Board of Directors.

Shareholder Vote Required to Elect Directors

The affirmative vote of the holders of a majority of shares of
Brainerd Common Stock present in person or by proxy is required to elect
directors of Brainerd. Brainerd has been informed by Donald J. Williamson,
who is the holder of approximately 9.9% of the shares of common stock
entitled to vote, that he intends to vote his shares in favor of management's
nominees. For purposes of counting votes on this proposal, abstentions and
broker non-votes will effectively be counted as votes against management's
nominees. The shares represented by proxies received from Brainerd
shareholders will be voted FOR election of management's nominees for
directors unless a vote against any nominee is specifically indicated in
the proxy.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ALL NOMINEES LISTED ABOVE

143
Voting Securities and Security Ownership of Certain Beneficial Owners and
Management

October 20, 1995 has been fixed by the Brainerd Board of Directors as
the record date for determining the Brainerd shareholders who are entitled
to vote at the Brainerd Meeting. On that date, 677,830 shares of Brainerd
Common Stock were issued and outstanding. Brainerd shareholders are
entitled to one vote on each matter presented for shareholder action for
each share of Brainerd Common Stock registered in their names at the close
of business on the record date.

The following table contains information with respect to ownership of
Brainerd Common Stock by all directors, all nominees for election as
directors, executive officers, all directors and executive officers as a
group, and by each person known to Brainerd to own beneficially more than
5% of Brainerd's outstanding common stock. The content of this table is
based upon information supplied by Brainerd's officers, directors and
nominees for election as directors, and represents Brainerd's understanding
of circumstances in existence as of September 20, 1995.

<TABLE>
<CAPTION>
Pro Forma
Percent Percent
Name of Shares Stock of of
Beneficial Owner Owned<FN1> Options<FN2> Total Class Class<FN3>
<S> <C> <C> <C> <C> <C>
Charles Mott 420,000 -0- 420,000 62.0% 1.7%
Donald J. Williamson 67,080 -0- 67,080 9.9% 97.5%
Richard L. Roe 2,195 -0- 2,195 0.3% 0.01%
Gary Moore -0- -0- -0- -0- -0-
Ted M. Gans -0- -0- -0- -0- -0-
J. Daniel Frisina -0- -0- -0- -0- -0-
Lisa K. Morrow -0- -0- -0- -0- -0-

All Directors and
Executive Officers
as a Group 2,195 -0- 2,195 0.3% 97.51%<FN4>
<FN>
__________________________

<FN1> Except as otherwise disclosed, shares owned represent shares for which
the beneficial owner has sole voting and investment power.
<FN2> Shares in this column may be acquired by the exercise of options
legally exercisable within 60 days of September 20, 1995.
<FN3> Gives pro forma effect to the Merger as of September 20, 1995, and to
the issuance of 23,500,000 shares of Brainerd Common Stock in the
Merger to Donald J. Williamson and his wife Patsy L. Williamson
proportionate to their ownership of shares of The Colonel's Common
Stock.

144
<FN4> Assuming the election of Donald J. Williamson to the Board of
Directors.
</FN>
</TABLE>

Directors and Executive Officers

Six directors of Brainerd are to be elected at the Brainerd Meeting to
hold office until their successors have been elected and qualified.
Brainerd's executive officers are appointed annually by and serve at the
pleasure of the Brainerd Board of Directors. The following table shows
certain information with respect to each director and executive officer of
Brainerd, each of whom is a citizen of the United States and of no other
nation.
<TABLE>
<CAPTION>
Nominees to be
Elected and Term Principal Year First
Expiration <FN1> Occupation <FN2> Elected Director

<S> <C> <C>
Donald J. Williamson Founder, Chairman of 1994 <FN3>
Age 61 the Board, President and
Term expiring in 1998 Director, The Colonel's (since
1982)

Richard L. Roe Vice President, 1974
Age 56 Brainerd (since 1988);
Term expiring in 1996 Secretary, Brainerd
(since 1989); President,
Brainerd (1982 to 1987);
Treasurer, Brainerd
(1985 to 1986)

Gary Moore National Sales & Accounts 1994
Age 45 Manager for Tremco Division
Term expiring in 1997 of B.F. Goodrich (since 1987);
Chairman of the Board, Chief
Executive Officer, Brainerd
(since 1995)

Ted Gans Attorney at Law with 1994
Age 60 Ted M. Gans, P.C., Bloomfield
Term expiring in 1998 Hills, Michigan (since 1965)

145
J. Daniel Frisina National Sales Manager for 1994
Age 47 Legion Products (since 1992).
Term expiring in 1997 President of The Colonel's
(1989-1991); Treasurer and
Chief Financial Officer,
Brainerd (since 1995)

Lisa K. Morrow <FN4> Vice President of Sales 1994
Age 34 and Secretary, The Colonel's
Term expiring in 1996 (since 1989)
<FN>
__________________________

<FN1> Term expirations assume Proposal II providing for a classified Board
of Directors will be approved. If Proposal II is not approved, each
nominee will be elected for a term of one year and until his or her
successor is elected and qualified.
<FN2> Except as noted, each person listed has been engaged in the same
principal occupation for five years or more.
<FN3> Mr. Williamson resigned as Chairman of the Board, Chief Executive
Officer, Treasurer and Chief Financial Officer of Brainerd on April 6,
1995. See "PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT - Background
of the Merger."
<FN4> Lisa K. Morrow is the step-daughter of Donald J. Williamson.
</FN>
</TABLE>

Organization of the Board

In February 1995, the Brainerd Board of Directors established three
standing committees: the Audit Committee, the Compensation Committee, and
the Stock Option Committee. Brainerd does not have a standing nominating
committee. The following information includes a description of each
Committee of the Brainerd Board of Directors, as each was constituted. The
Brainerd Board of Directors intends to appoint chairmen and members of each
committee promptly following the election of directors at the Brainerd
Meeting.

The Audit Committee was formed in February, 1995 and did not meet last
year. Each year, the Audit Committee will review the upcoming audit
plan submitted by the independent auditors with respect to the scope of
procedures that will be performed and the fee that will be charged. The
Audit Committee will also review the results of the independent audit each
year, including any associated recommendations on internal controls. It is
additionally intended that the Audit Committee will meet periodically with
Brainerd's internal auditor.

The Compensation Committee will be responsible to establish the
compensation of the executive officers of Brainerd and its subsidiaries.

146
The Compensation Committee was formed in February, 1995 and did not meet
last year.

The Stock Option Committee will be responsible for the administration
and award of stock options and restricted stock under Brainerd's stock
plans, including the 1995 Long-Term Incentive Plan, if adopted by Brainerd
shareholders. The Stock Option Committee was formed in February, 1995 and
did not meet last year.

The Brainerd Board of Directors met four times last year.

Director Compensation

No compensation was paid to any director for services rendered in such
capacity during the fiscal year ended December 31, 1994. Directors of the
Company who are not employees of the Company may be reimbursed for expenses
incurred in attending meetings of the Board of Directors. John B. Welch, a
director of the Company, who resigned as a director effective February 23,
1995, received consulting fees of $500 per month from the Company since
April 1991. The Brainerd Board of Directors has not yet determined whether
to continue Mr. Welch's consulting arrangement or, if so, upon what terms.

Executive Compensation

Donald J. Williamson, former Chairman of the Board, Chief Executive
Officer, Treasurer and Chief Financial Officer of Brainerd, received no
cash compensation from Brainerd during the fiscal year ended December 31,
1994. Richard L. Roe, Vice President and Secretary of Brainerd and General
Manager of the Brainerd International Raceway, received cash compensation
from Brainerd in the aggregate amount of $75,000 during the fiscal year
ended December 31, 1994. Except for Mr. Roe, no executive officer of
Brainerd received cash compensation from Brainerd during the company's most
recent three fiscal years ended December 31, 1994.

Mr. Roe is entitled to the use of two automobiles provided without
charge to Brainerd by the Pontiac Motor Division of General Motors
Corporation. Other than the automobiles, none of the executive officers of
Brainerd received personal non-cash benefits from Brainerd valued in excess
of $25,000 during the company's most recent three fiscal years ended
December 31, 1994.

Compensation Pursuant to Plans

Employment Agreements. Brainerd does not have any employment
agreements with any directors or executive officers of Brainerd.

1987 Stock Option Plan. Brainerd adopted an Incentive Stock Option
Plan for key employees and directors of Brainerd (the "Plan") in June of
1987 at the annual meeting of shareholders. The Plan provides for the
issuance of common shares as incentive stock options and non-statutory

147
stock options. Non-statutory options do not qualify for favorable tax
treatment upon exercise afforded by Section 422 of the Internal Revenue
Code. A total of 50,000 common shares of Brainerd are reserved for
issuance under the Plan. The Plan is administered by a Stock Option
Committee, appointed by Brainerd's Board of Directors, which currently has
no acting members.

There are no stock options issued or outstanding to executive officers
or directors of Brainerd.

Certain Relationships and Related Transactions

Brainerd has engaged in the following described transactions with
members of its Board of Directors. In each instance, the transaction has
been approved by the Board of Directors of Brainerd with the director or
directors involved in the transaction abstaining from approving the
transaction. In connection with the approval of the transactions, the
Board of Directors of Brainerd determined such transactions were on terms
as favorable to Brainerd as were believed to be available from an unrelated
party.

Transactions with Gene M. Snow and James W. Littlejohn. In 1989,
1990, and 1991, Gene M. Snow and James W. Littlejohn, then officers,
directors, and principal shareholders of Brainerd, loaned to Brainerd a
total of approximately $405,000 used in pursuing the development of a
motorsports racing facility to be located in southeastern Wisconsin. In
1993, the amounts loaned and approximately $140,700 of accrued interest due
thereon were satisfied with issuance of a total of 363,782 shares of
Brainerd Common Stock to Mr. Snow and Mr. Littlejohn.

In 1993, Mr. Snow entered into a financing agreement with Brainerd and
its subsidiary which was pursuing the development of the motorsports racing
facility, pursuant to which Brainerd was to provide the subsidiary with
$3,000 per month in 1993 and Mr. Snow was to provide up to $250,000 to the
subsidiary in exchange for a 25% interest in the subsidiary. In December
1993, Brainerd abandoned further pursuit of the efforts to develop the
racing facility, the subsidiary was liquidated and Mr. Snow agreed to
assign to Brainerd, for no additional consideration, a 25% interest in any
motorsports racing facility which Mr. Snow may develop on the site near
Genoa City, Wisconsin. Such obligation expires in December 1998.

In September 1994, Mr. Snow and Mr. Littlejohn entered into a Stock
Purchase Agreement with Donald J. Williamson pursuant to which
Mr. Williamson acquired all of the stock of Brainerd owned by Mr. Snow and
Mr. Littlejohn. The Agreement included an undertaking by Mr. Williamson to
cause Brainerd to grant to Mr. Snow an option, exercisable on or prior to
September 12, 1996, to terminate Brainerd's contingent interest in the
motorsports facility which Mr. Snow may develop. Exercise of the option
would require a payment to Brainerd of the sum of $10,000.

148
Consulting Arrangement with Director. John B. Welch, a former
director of Brainerd, rendered business consulting services to Brainerd
since April 1991 for which Mr. Welch received $500, per month. Mr. Welch
resigned from the Board of Directors effective February 23, 1995. The
Brainerd Board of Directors has not yet determined whether to continue
Mr. Welch's consulting arrangement or, if so, upon what terms.

Other Transactions with Directors. Ted Gans is a Director of Brainerd
and practices law with Ted M. Gans, P.C. During the past year, The
Colonel's retained Ted M. Gans, P.C. for certain legal services and it is
anticipated that the Company may retain Ted M. Gans, P.C. to render certain
legal services during the current year. Gary Moore is currently serving as
Chairman and Chief Executive Officer of Brainerd and is a National Sales
and Accounts Manager for the Tremco Division of B.F. Goodrich. During the
past year, The Colonel's purchased paint from Tremco in the ordinary course
of business and it is anticipated that The Colonel's will continue to
purchase paint from Tremco during the current year. J. Daniel Frisina
represents Legion Tool, Mold and Manufacturing Company, Ltd., which sells
among other products, automotive body replacement parts to The Colonel's as
well as other customers in the automotive crash parts industry.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended,
required Brainerd's directors and officers, and persons who own more than
10% of Brainerd's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the NASDAQ
system. Directors, officers and greater than 10% beneficial owners are
required by SEC regulation to furnish Brainerd with copies of all Section
16(a) forms they file.

Donald J. Williamson, Gary Moore, Ted M. Gans, J. Daniel Frisina, and
Lisa K. Morrow did not make timely filings of their Initial Statement of
Beneficial Ownership on Form 3 required by Section 16(a) of the Securities
Exchange Act of 1934. Mr. Williamson, who became a principal shareholder
of Brainerd on September 12, 1994, filed his report on Form 3 in March
1995. Messrs. Moore, Gans, and Frisina and Ms. Morrow, who became
directors of Brainerd on September 14, 1994, filed their reports on Form 3
on October 17, November 7, and October 11, 1994, respectively. Other than
the foregoing, to the best of Brainerd's knowledge, no director, officer,
or beneficial owner of more than 10% of Brainerd's outstanding shares
failed to file on a timely basis any report required by Section 16(a) of
the Securities Exchange Act with respect to the year ended December 31,
1994.

149
PROPOSAL VI:
CONFIRMATION OF APPOINTMENT OF AUDITORS

Brainerd selected Copeland Buhl & Company P.L.L.P. as its principal
auditors for 1994 pursuant to the recommendation of its Board of Directors.
Representatives of Copeland Buhl & Company P.L.L.P. are expected to be
present at the Brainerd Meeting and will have the opportunity to make a
statement if they desire to do so and are expected to be available to
respond to appropriate questions.

In light of the proposed Merger involving The Colonel's, the Brainerd
Board of Directors recommended that Brainerd engage Deloitte & Touche LLP
as its principal auditors. Deloitte & Touche LLP has served as the
principal auditors of The Colonel's since December 1990. On February 27,
1995, the Brainerd Board of Directors approved the appointment of Deloitte
& Touche LLP as Brainerd's principal independent accountants for the fiscal
year ending December 31, 1995, replacing Copeland Buhl & Company P.L.L.P.,
which previously served in this role.

The reports of Copeland Buhl & Company P.L.L.P. on Brainerd's
financial statements for the past three years (1994, 1993 and 1992) did not
contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principals.

In connection with the audits of Brainerd's financial statements for
each of the past three fiscal years (1994, 1993 and 1992) and in any
subsequent interim period, there were no disagreements with Copeland Buhl &
Company P.L.L.P. on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which, if
not resolved to the satisfaction of Copeland Buhl & Company P.L.L.P., would
have caused them to make reference to the matter in their report.

Shareholder Vote Required for Confirmation of Auditors

The affirmative vote of the holders of a majority of shares of
Brainerd Common Stock present in person or by proxy is required to confirm
the appointment of auditors. Brainerd has been informed by Donald J.
Williamson, who is the holder of approximately 9.9% of the shares of common
stock entitled to vote, that he intends to vote his shares in favor of the
proposal. For purposes of counting votes on this proposal, abstentions and
broker non-votes will effectively be counted as votes against the proposal.
The shares represented by proxies received from Brainerd shareholders will be
voted FOR the proposal unless a vote against the proposal is specifically
indicated in the proxy.

THE BRAINERD BOARD OF DIRECTORS RECOMMENDS
A VOTE TO CONFIRM THE APPOINTMENT OF AUDITORS

150
LEGAL OPINION

Certain legal matters in connection with the Brainerd Common Stock to
be issued in connection with the Merger will be passed upon for Brainerd by
Frommelt & Eide, Ltd., Minneapolis, Minnesota.

SHAREHOLDER PROPOSALS

Assuming the adoption of Proposal II, shareholder proposals intended
to be presented at the next annual meeting of shareholders must be received
by the Company for inclusion in its Proxy Statement and form of proxy relating
to that meeting by July 24, 1996. Shareholder proposals should be made in
accordance with Rule 14a-8 promulgated under the Securities Exchange Act of
1934, as amended, and should be addressed to: Corporate Secretary, The Colonel's
Holdings, Inc., 620 South Platt Road, Milan, Michigan 48160.

OTHER MATTERS

The Brainerd Board of Directors is not aware of any matters other than
those specifically set forth in the Notice of Annual Meeting which will be
presented for action at the Brainerd Meeting. If any other matters
properly come before the Brainerd Meeting or any adjournments thereof, the
proxy holder named in the accompanying proxy will vote in accordance with
his best judgment.

151

INDEX TO FINANCIAL STATEMENTS

Financial Statements of Brainerd International, Inc.: . . . . . . . . Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . . F-1
Balance Sheets as of December 31, 1994 and 1993 . . . . . . . . F-2
Statements of Operations for the Years Ended December 31,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . F-4
Statements of Shareholders' Equity for the Two Years
Ended December 31, 1994 . . . . . . . . . . . . . . . . . . . F-5
Statements of Cash Flows for the Years Ended December 31,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Financial Statements . . . . . . . . . . . . . . . . . F-7
Balance Sheets as of June 30, 1995 and 1994 (unaudited) . . . . F-15
Statements of Operations for the six months ended
June 30, 1995 and 1994 (unaudited) . . . . . . . . . . . . . . F-17
Statements of Cash Flows for the six months ended
June 30, 1995 and 1994 (unaudited) . . . . . . . . . . . . . . F-18
Notes to Unaudited Financial Statements . . . . . . . . . . . . F-19

Financial Statements of The Colonel's, Inc.:

Independent Auditors' Report . . . . . . . . . . . . . . . . . . F-20
Balance Sheets as of December 31, 1994 and 1993 . . . . . . . . F-21
Statements of Income for the Years Ended December 31,
1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . F-22
Statements of Shareholders' Equity for the Years Ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . . . F-23
Statements of Cash Flows for the Years Ended December 31,
1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . F-24
Notes to Financial Statements . . . . . . . . . . . . . . . . . F-26
Balance Sheets as of June 30, 1995 and 1994 (unaudited) . . . . F-36
Statements of Income for the six months ended June 30,
1995 and 1994 (unaudited) . . . . . . . . . . . . . . . . . . F-37
Statements of Cash Flows for the six months ended June 30,
1995 and 1994 (unaudited) . . . . . . . . . . . . . . . . . . F-38
Notes to Unaudited Financial Statements . . . . . . . . . . . . F-39

152
TABLE OF CONTENTS

AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . .iii
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
PROPOSAL I: ADOPTION OF THE MERGER AGREEMENT. . . . . . . . . . . . . . 22
THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 37
RIGHTS OF DISSENTING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . 40
SELECTED FINANCIAL DATA OF BRAINERD. . . . . . . . . . . . . . . . . . . 44
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF BRAINERD. . . . . . . . . . . . . . . . . . . . . . . 45
BUSINESS OF BRAINERD . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SELECTED FINANCIAL DATA OF THE COLONEL'S . . . . . . . . . . . . . . . . 64
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OF THE COLONEL'S. . . . . . . . . . . . . . . . . . . 66
BUSINESS OF THE COLONEL'S. . . . . . . . . . . . . . . . . . . . . . . . 77
UNAUDITED PRO FORMA COMBINED SELECTED
FINANCIAL DATA AND CONDENSED
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 90
DESCRIPTION OF CAPITAL STOCK OF BRAINERD . . . . . . . . . . . . . . . . 95
MARKET PRICES AND RELATED MATTERS. . . . . . . . . . . . . . . . . . . . 96
MANAGEMENT AND PRINCIPAL SHAREHOLDERS. . . . . . . . . . . . . . . . . . 97
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 99
PROPOSAL II: REINCORPORATION OF BRAINERD . . . . . . . . . . . . . . .101
PROPOSAL III: TRANSFER OF BRAINERD INTERNATIONAL RACEWAY
TO A WHOLLY OWNED SUBSIDIARY OF BRAINERD. . . . . . . . . . . . . .132
PROPOSAL IV: APPROVAL OF THE 1995 LONG-TERM INCENTIVE PLAN. . . . . . .134
NEW PLAN BENEFITS
1995 LONG-TERM INCENTIVE PLAN . . . . . . . . . . . . . . . . . . .138
PROPOSAL V: ELECTION OF DIRECTORS OF BRAINERD . . . . . . . . . . . . .143
PROPOSAL VI: CONFIRMATION OF APPOINTMENT OF AUDITORS. . . . . . . . . .150
LEGAL OPINION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151
SHAREHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . .151
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151

Appendix A - Agreement and Plan of Merger
Appendix B - Fairness Opinion of Century Capital
Appendix C - Dissenters' Rights Provisions of
Minnesota Business Corporation Act
Appendix D - Agreement and Plan of
Reorganization
Appendix E - Articles of Incorporation of The
Colonel's Holdings, Inc.
Appendix F - Bylaws of The Colonel's
Holdings, Inc.
Appendix G - 1995 Long-Term Incentive Plan

[BRAINERD LOGO]

PROXY STATEMENT

Annual Meeting of Shareholders of
Brainerd International, Inc.

For the Issuance of 23,500,000 Shares

BRAINERD INTERNATIONAL, INC.
COMMON STOCK, $0.01 PAR VALUE

Dated October 23, 1995

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
BRAINERD INTERNATIONAL, INC.
Minnetonka, Minnesota

We have audited the accompanying balance sheets of Brainerd International,
Inc. (A Minnesota corporation) as of December 31, 1994 and 1993, and the
related statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Brainerd
International, Inc. As of December 31, 1994 and 1993, and the results of
its operations and cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Copeland Buhl & Company PLLP

COPELAND BUHL & COMPANY P.L.L.P.

Wayzata, Minnesota

January 13, 1995

F-1

<TABLE>
BRAINERD INTERNATIONAL, INC.
BALANCE SHEETS
DECEMBER 31

<CAPTION>
ASSETS 1994 1993
<S> <C> <C>
Current Assets:
Cash (Note A) $ 115,496 $ 18,113
Prepaid expenses 41,559 38,187

Total Current Assets 157,055 56,300

Property and Equipment, at cost (Notes A and C):
Buildings 1,005,276 950,956
Racetrack 790,127 790,127
Bleachers 761,297 761,297
Site improvements 588,560 545,895
Equipment 277,416 247,582
Automotive 194,691 194,691
Furniture and fixtures 18,403 18,403
3,635,770 3,508,951
Less accumulated depreciation 1,663,002 1,524,104

Land 130,791 130,791

Total Property and Equipment 2,103,559 2,115,638

TOTAL ASSETS $ 2,260,624 $ 2,171,938
</TABLE>

See notes to financial statements.

F-2
<TABLE>
BRAINERD INTERNATIONAL, INC.
BALANCE SHEETS
DECEMBER 31

<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY 1994 1993
<S> <C> <C>
Current Liabilities:
Accounts payable $ 6,037 $ 125,763
Accrued expenses 8,226 11,842
Deferred income 32,297 32,050
Current maturities of installment obligations
(Note C) 76,021 84,484

Total Current Liabilities 122,581 254,139

Installment Obligations (Note C) 531,845 483,225

Total Liabilities 654,426 737,364

Commitments and Contingencies (Note E)

Stockholders' Equity:
Common stock - $.01 par value;
10,000,000 shares authorized;
677,830 shares issued and outstanding 6,778 6,778
Paid-in capital 3,429,978 3,428,545
Accumulated deficit (1,830,568) (2,000,749)

Total Stockholders' Equity 1,606,188 1,434,574

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,260,614 $ 2,171,938
</TABLE>

See notes to financial statements.

F-3
<TABLE>
BRAINERD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31

<CAPTION>
1994 1993
<S> <C> <C>
Revenues (Note G) $ 2,449,923 $ 2,097,349

Cost of Operations 1,750,676 1,614,785

Gross Profit 699,247 482,564

General and Administrative Expenses (Note E) 464,894 484,207
Loss on investment (Note H) (426,451)

Income (Loss) from Operations 243,353 (464,094)

Other Income (Expense):
Interest income 2,718 2,616
Interest expense (Notes C and D) (66,890) (49,385)
Total Other (Expense) (64,172) (46,769)

Income (Loss) before Income Taxes 170,181 (510,863)

Provision for Income Taxes (Note I)

Net Income (Loss) $ 170,181 $ (510,863)

Income (Loss) per Common Share (Note J) $ .25 $ (1.22)
</TABLE>

See notes to financial statements.

F-4
<TABLE>
BRAINERD INTERNATIONAL, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
TWO YEARS ENDED DECEMBER 31, 1994

<CAPTION>
COMMON STOCK Total
# of Par Paid-In Accumulated Stockholders'
Shares Value Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balances at
January 1, 1993 285,013 $ 2.850 $ 2,843,248 $ (1,489,886) $ 1,356,212

Issuance of common stock
in satisfaction of
stockholder debt
(Note D) 363,782 3,638 542,034 545,672

Other issuances
of common stock 29,035 290 43,263 43,553

Net loss for the year (510,863) (510,863)

Balances at
December 31, 1993 677,830 6,778 3,428,545 (2,000,749) 1,434,574

Recovered short-swing
profits received from
shareholders 1,433 1,433

Net income for the year 170,181 170,181

Balances at
December 31, 1994 677,830 $ 6,778 $ 3,429,978 $ (1,830,568) $ 1,606,188
</TABLE>

See notes to financial statements.

F-5

<TABLE>
BRAINERD INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31

<CAPTION>
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 170,181 $ (510,863)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation 144,698 154,058
Loss on investment 412,480
Discount on note repayment (1,000)
Note payable issued for services 25,000
Stock issued for services 15,000
Stock issued for interest expense 21,004
(Increase) decrease in prepaid expenses 8,531 (5,119)
Increase (decrease) in accounts payable (15,726) 49,873
Increase (decrease) in accrued expenses (3,616) 4,508
Increase in deferred income 247 30,440

Net Cash Provided by Operating Activities 304,315 195,381

Cash Flows from Investing Activities:
Purchase of property and equipment (132,619) (291,393)

Cash Flows from Financing Activities:
Issuance of installment obligations 4,042 106,400
Repayment of installment obligations (79,788) (134,610)
Issuance of common stock 28,533
Funds received from shareholders for
short-swing profits earned on their stock sales 1,433

Net Cash Provided by (Used in) Financing
Activities (74,313) 343

Net Increase (Decrease) in Cash 97,383 (95,669)

Cash at beginning of year 18,113 113,782

Cash at end of year $ 115,496 $ 18,113
</TABLE>

See notes to financial statements.

F-6

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE A: SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

The Company provides for depreciation in amounts sufficient to relate
the cost of depreciable assets to operations over the following
estimated service lives:
<TABLE>
<CAPTION>
<S> <C> <C>
Buildings 15 - 31 years
Racetrack 31 years
Bleachers 7 - 19 years
Site improvements 15 - 31 years
Equipment 5 - 7 years
Automotive 5 years
Furniture and fixtures 5 - 7 years
</TABLE>

The straight-line method of depreciation is followed for
substantially all assets for financial reporting purposes.
Accelerated methods are used for tax purposes.

Expenditures for maintenance and repairs are charged to
operations when the expense is incurred. Expenditures determined
to represent additions and betterments are capitalized.

F-7

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE A: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company has adopted the liability method for reporting income
taxes. Deferred tax assets and liabilities are determined based
on the difference between the financial statements and tax bases
of assets and liabilities as measured by the enacted tax rates
which will be in effect when these differences reverse. The
principal difference between assets and liabilities for financial
statements and tax return purposes is accumulated depreciation.
Adoption of this statement had no impact on the Company's
financial statements.

RECLASSIFICATIONS

Certain reclassifications have been made in the 1993 financial
statements to conform to the classifications used in 1994. These
reclassifications have no effect on retained earnings.

NOTE B: PROPOSED BUSINESS COMBINATION

On December 14, 1994, a nonbinding letter of intent was signed
with The Colonel's. Inc. which contemplates a business
combination between Brainerd International, Inc. and The
Colonel's, Inc. The Colonel's, Inc. is a leading supplier of
plastic replacement bumpers and facias for the automotive
aftermarket industry in North America. The majority shareholder
of Brainerd International, Inc. is also the majority shareholder
of The Colonel's, Inc. Consummation of the business combination
is subject to the completion of due diligence by the parties, the
negotiation and execution of the definitive merger agreement
containing customary representations, warranties and covenants,
approval of the proposed transactions by the shareholders of both
companies and the registration of common stock of Brainerd
International, Inc. constituting consideration for the merger. It
is anticipated that the closing of this business combination
would occur on or before May 31, 1995.

F-8

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE C: INSTALLMENT OBLIGATIONS

At December 31, installment obligations are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Mortgage notes payable $ 500,000 $ 425,485
10-12% installment notes 107,866 142,224
607,866 567,709
Less current maturities 76,021 84,484
$ 531,845 $ 483,225
</TABLE>

MORTGAGE NOTES PAYABLE

On February 16, 1994, the Company refinanced the mortgage note
that existed at December 31, 1993 The following is a schedule
showing the details of the refinance:
<TABLE>
<CAPTION>
<S> <C> <C>
Non-Cash Activities:
Mortgage note satisfaction $ 425,485
Interest paid on prior mortgage note 4,570
Accounts payable satisfaction 104,000
Closing costs 11,803

Cash 4,042

Total of new mortgage note $ 550,000
</TABLE>

The new loan agreement includes an installment note for $550,000
and a line of credit note for $300,000 of which none has been
used at December 31, 1994. The installment note and line of
credit are collateralized by substantially all of the Company's
assets. The notes bear interest at a variable rate (10.5% at
December 31, 1994) and are guaranteed by a stockholder. The notes
contain restrictions, among others, on the payment of dividends,
expenditures for property and equipment, and on certain financial
ratios. The installment note is due in annual principal payments
of $50,000 and interest is due quarterly. The note matures in
September 2004. The line of credit funds are available through
April 16, 1995, with interest, payments due monthly.

F-9

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE C: INSTALLMENT OBLIGATIONS (CONTINUED)

INSTALLMENT NOTES PAYABLE

Installment notes mature at various dates through May 2000.
Installment notes of $12,735 are collateralized by land. The
other note is unsecured.

During 1993, the Company issued installment notes totaling
$25,000 to finance trade accounts payable and $14,000 for the
purchase of land.

Aggregate maturities of all installment obligations are as
follows for years ending December 31:
<TABLE>
<CAPTION>
<S> <C> <C>
1995 $ 76,021
1996 64,971
1997 66,870
1998 69,009
1999 71,420
Thereafter 259,575

$ 607,866
</TABLE>

Interest expense on installment obligations totaled $66,890 and
$28,381 in 1994 and 1993, respectively.

Cash payments for interest on all obligations amounted to $70,505
and $21,669 in 1994 and 1993, respectively.

NOTE D: NOTES PAYABLE TO DIRECTORS/STOCKHOLDERS

During 1993, the Company issued 363,782 shares of common stock to
two directors/stockholders in full satisfaction of promissory
notes payable and accrued interest totaling $545,672.

Interest expense charged to operations by the Company on notes
payable to directors/stockholders amounted to $21,004 in 1993.

F-10

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE E: COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases its Minnetonka, Minnesota, general office
facility and various office equipment under operating leases.

The following is a schedule by years of future minimum rental
payments required under operating leases that have initial or
remaining non-cancelable lease terms in excess of one year as of
December 31, 1994:
<TABLE>
<CAPTION>
<S> <C> <C>
1995 $ 20,588
1996 4,931

$ 25,519
</TABLE>

Rental expense for all operating leases amounted to $22,152 and
$20,097 in 1994 and 1993, respectively.

PUBLIC RELATIONS AND MARKETING AGREEMENT

An agreement for public relations and marketing services provides
for an annual fee of $22,800 and $21,600 in 1994 and 1993,
respectively. The agreement provides for additional payments
based on net profits as defined in the agreement.

NOTE F: STOCK OPTION PLAN

The Company has a stock option plan which provides for the
issuance of incentive stock options for key employees and
nonstatutory stock options for outside directors. A total of
50,000 common shares of the Company are reserved under the plan.
There are no outstanding stock options at December 31, 1994.

F-11

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE G: REVENUE

The Company derives its revenue from six sources which, in order
of importance are ticket sales, entry fees,
sponsorship/advertising fees, camping fees, concession sales and
track rentals.

Sponsorship/advertising fees are received from commercial
organizations such as Champion Auto Stores, Inc., Coca-Cola
Bottling Company, R.J. Reynolds Tobacco Company and
Anheuser-Busch, Inc., which promote their names and products at,
and in connection with, the racing events. Revenue from
sponsorship fees amounted to approximately $127,500 in both 1994
and 1993.

NOTE H: LOSS ON INVESTMENT

In 1993, the Company's only subsidiary, Motor Sports Stadium,
Inc., ceased its efforts to develop a motorsports facility in
Southeastern Wisconsin and was dissolved on December 29, 1993. In
the fourth quarter of 1993 the Company recognized a loss of
$462,451 in connection with the dissolution of the subsidiary.

F-12
BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

NOTE I: INCOME TAXES

The income tax provision reconciled to the tax computed at the
statutory federal rate of 34% is as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Income tax expense
(benefit) at statutory
rate of 34% $ 52,650 $ (174,000)
Surtax exemption (9,250)
State income taxes 16,900
(Recognized) Unrecognized
net operating loss (60,300) 174,000
$ - $ -
</TABLE>

As of December 31, 1994, the Company has net operating loss
carryforwards, capital loss carryforwards and general business
tax credits available to offset future taxable income. These
carryforwards expire as follows:

<TABLE>
<CAPTION>
NET OPERATING CAPITAL LOSS INVESTMENT
CALENDAR YEAR LOSSES CARRYFORWARDS TAX CREDIT
<S> <C> <C> <C> <C>
1998 $ 275,000
1999 $ 990
2000 2,150
2001 260
2003 $ 72,000
2004 360,000
2005 599,000
2008 332,000
$1,363,000 $ 275,000 $ 3,400
</TABLE>

F-13

BRAINERD INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993

Note I: Income Taxes (Continued)

No deferred taxes have been recognized in the accompanying
balance sheets at December 31, 1994 and 1993. Deferred tax
assets and liabilities at December 31 consist of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Investment tax credit carryforwards $ 3,400 $ 3,400
Property and equipment temporary
differences 70,000 111,000
Net operating loss carryforward 477,000 516,000
Capital loss carryforward 77,000 77,000
627,400 707,400
Valuation allowance (627,400) (707,400)
$ - $ -
</TABLE>

NOTE J: INCOME (LOSS) PER COMMON SHARE

Income (loss) per common share is computed based on the weighted
average number of common shares outstanding during each year.
Weighted average shares outstanding were 677,830 in 1994 and
417,090 in 1993.

F-14

<TABLE>
BRAINERD INTERNATIONAL, INC.
BALANCE SHEET

<CAPTION>
ASSETS

June 30, December 31,
1995 1994
(Not Audited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 377,534 $ 115,496
Prepaid Expenses 31,435 41,559

Total current assets $ 408,969 $ 157,055

PROPERTY & EQUIPMENT, AT COST:
Buildings $ 1,043,826 $ 1,005,276
Race Track 790,127 790,127
Bleachers 761,297 761,297
Site improvements 691,462 588,560
Equipment 300,688 277,416
Automotive 207,807 194,691
Furniture & fixtures 18,403 18,403
$ 3,813,610 $ 3,635,770
Less accumulated depreciation 1,738,002 1,663,002
$ 2,075,608 $ 1,972,768

Land 130,791 130,791

Total Property & Equipment $ 2,206,399 $ 2,103,559

TOTAL ASSETS $ 2,615,368 $ 2,260,614
</TABLE>

F-15
<TABLE>
BRAINERD INTERNATIONAL, INC.
BALANCE SHEET

<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY

June 30, December 31,
1995 1994
(Not Audited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 149,185 $ 6,037
Accrued expenses 7,153 8,226
Deferred income 544,267 32,297
Current Maturities of Long-term
obligations 76,021 76,021

Total Current Liabilities $ 776,626 $ 122,581

Long-Term Obligations:
Installment Obligation $ 525,738 $ 531,845

TOTAL LIABILITIES $ 1,302,364 $ 654,426

Stockholders' Equity
Common stock -$.01 par value:
10,000,000 shares authorized;
677,830 shares issued and outstanding $ 6,778 $ 6,778
Paid in capital 3,432,303 3,429,978
Accumulated deficit (2,126,077) (1,830,568)

Total Stockholders' Equity $ 1,313,004 $ 1,606,188

TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 2,615,368 $ 2,260,614
</TABLE>

F-16

<TABLE>
BRAINERD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, June 30, June 30,
1995 1994 1995 1994
(Not Audited) (Not Audited) (Not Audited) (Not Audited)
<S> <C> <C> <C> <C>
Revenues $ 395,726 $ 377,199 $ 481,616 $ 444,099

Cost of Operations 267,774 416,281 311,966 438,298

Gross Profit $ 127,952 $ (39,082) $ 169,650 $ 5,801

General and Administrative 280,094 245,392 458,038 414,434

Operating (Loss) $ (152,142) $ (284,474) $ (288,388) $ (408,633)

Other Income (Expense):
Miscellaneous Income 10,363 30,287 25,862 35,229
Interest Expense (16,626) (11,286) (32,983) (19,584)
Total Other (Expense) (6,263) 19,001 (7,121) 15,375

(Loss) Before Taxes $ (158,405) $ (265,473) $ (295,509) $ (393,258)

Net (Loss) $ (158,405) $ (265,473) $ (295,509) $ (393,258)

Retained Earnings (Deficit)
Beginning of
Period $(1,830,568) $(2,000,749) $(1,830,568) $(2,000,749)

Retained Earnings
(Deficit)
End of
Period $(1,988,973) $(2,266,222) $(2,126,077) $(2,394,077)

(Loss) per
Common Share $ (.23) $ (.39) $ (.43) $ (.58)
</TABLE>

F-17

<TABLE>
BRAINERD INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months Six Months
Ended June 30, Ended June 30,
1995 1994
(Not Audited) (Not Audited)
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ (295,509) $ (393,258)
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation $ 75,000 $ 75,000
(Increase) Decrease in prepaid
expense 10,124 6,672
Increase in accounts payable 143,148 (15,311)
Increase (Decrease) in
accrued expenses (1,073) (6,589)
Increase (Decrease) in
deferred income 511,970 410,104

Net Cash provided by (Used in)
Operating Activities: $ 443,660 $ 76,618

CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Property & Equip. $ (177,840) $ (49,733)
Net Cash provided by (Used in)
Investing Activities: $ (177,840) $ (49,733)

CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Issuance of Long-
Term Obligations $ $ 550,000
Repayment of Long-Term Obligations (6,107) (438,535)
Funds received from shareholders for short-
swing profit earned on their stock sales 2,325
Net Cash Provided by (Used in)

Financing Activities $ (3,782) $ 111,465

Net Increase (Decrease) in Cash $ 262,038 $ 138,350
Cash at Beginning of Period 115,496 18,113
Cash at End of Period $ 377,534 $ 156,463
</TABLE>

F-18

BRAINERD INTERNATIONAL, INC.

Notes to Condensed Financial Statements

June 30, 1995

(Unaudited)

NOTE 1. FINANCIAL STATEMENTS

The condensed balance sheet as of June 30, 1994, the condensed
statements of operations for the three and six month periods ended June
30, 1995 and 1994 and the statement of cash flows for the six months ended
June 30, 1995 and 1994 have been prepared by Brainerd International, Inc.
(the "Company") without audit. In the opinion of management, all
adjustments necessary to present fairly the financial position of the
Company as of the June 30, 1995 and the results of operation and cash
flows for the periods presented have been made and that such financial
statements are not misleading. The results of operations for interim
periods are not indicative of the results for the year due to the seasonal
nature of the Company's business. The Financial Statements should be read
in conjunction with the Financial Statements and notes thereto included in
the Company's December 31, 1994, Annual Report on Form 10-KSB.

NOTE 2. EARNINGS PER SHARE

Earnings per share was computed by dividing the net income for
the period by the weighted average common shares outstanding during the
period. For the six months period ended June 30, 1995, the weighted
averaged were 677,830 and 677,830.

F-19

[Letter on Deloitte & Touche LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Shareholders of
The Colonel's, Inc.
Milan, Michigan

We have audited the accompanying balance sheets of The Colonel's, Inc.
(the "Company") as of December 31, 1994 and 1993, and the related
statements of income, shareholders' equity and cash flows for each of the
three years ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1994
and 1993, and the results of its operations and its cash flows for each of
the three years ended December 31, 1994, in conformity with generally
accepted accounting principles.

/s/ Deloitte & Touche LLP

March 1, 1995

F-20
<TABLE>
THE COLONEL'S, INC.
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
<CAPTION>
ASSETS 1994 1993
<S> <C> <C>
CURRENT ASSETS:
Cash $ 164,286 $ 2,433,295
Accounts receivable:
Trade (net of allowance for doubtful accounts of
$345,900 and $337,900 at December 31, 1994
and 1993, respectively) (Note 8) 2,474,565 1,598,967
Related party (Note 12) 173,400
Insurance (Note 3) 4,352,239 4,299,203
Inventories (Note 4 and 8) 5,696,584 3,239,037
Prepaid expenses 239,935 325,277
Notes receivable:
Related party (Notes 6 and 12) 863,658
Other (Note 6) 222,381 242,150
Current portion of deferred compensation (Note 11) 204,436 144,597
Assets held for sale (Note 14) 350,000
Total current assets 14,568,084 12,455,926

PROPERTY, PLANT AND EQUIPMENT - Net
(Notes 5, 9, and 11) 12,552,006 11,110,730

OTHER ASSETS:
Notes receivable:
Related party (Notes 6 and 12) 1,969,645 1,982,539
Other (Note 6) 43,285 261,178
Long-term portion of deferred compensation (Note 11) 624,136 306,932
Deposits (Note 11) 1,247,727 2,632,612
Assets held for sale (Note 2) 525,000 600,000
Total other assets 4,409,793 5,783,261

TOTAL ASSETS (Note 9) $ 31,529,883 $ 29,349,917

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Notes payable (Note 8) $ 6,000,000 $ 6,000,000
Current portion of long-term obligations (Note 9) 1,843,218 7,128,802
Accounts payable - trade 2,809,113 3,940,499
Accrued expenses (Note 10) 5,194,411 5,169,997
Current portion of deferred compensation (Note 11) 204,436 144,597
Total current liabilities 16,051,178 22,383,895

LONG-TERM OBLIGATIONS, NET OF CURRENT
PORTION (Note 9) 1,366,615 131,679

F-21
LONG-TERM PORTION OF DEFERRED COMPENSATION
(Note 11) 624,136 306,932

SHAREHOLDERS' EQUITY:
Common stock; 10,000,000 shares authorized at
$.10 par value, 6,021,000 shares issued and
outstanding (Note 9) 602,100 602,100
Additional paid-in capital 1,244,511 1,244,511
Retained earnings 11,641,343 7,680,800
Notes receivable - shareholders (Note 7) (3,000,000)
Total shareholders' equity 13,487,954 6,527,411

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 31,529,883 $ 29,349,917
</TABLE>
See notes to financial statements

F-22

THE COLONEL'S, INC.
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

1994 1993 1992
<S> <C> <C> <C>
SALES (Notes 12 and 13) $ 28,492,013 $ 25,174,656 $ 25,835,683

COST OF SALES (Note 12) 19,599,470 19,396,926 17,308,820

GROSS PROFIT 8,892,543 5,777,730 8,526,863

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 5,101,270 6,318,782 4,810,665

PLANT CLOSING COSTS (Note 14) 1,389,368

Income (loss) from operations 2,401,905 (541,052) 3,716,198

OTHER INCOME (EXPENSE):
Interest expense (785,969) (864,681) (841,525)
Interest income (Note 12) 106,773 206,480 217,461
Gain on insurance settlement (Note 3) 9,081,662 9,043,282
Rental income (Note 12) 73,000 87,750 132,000
Gain (loss) on sale of property and
equipment (1,584) 2,499 726,109
Write-off of noncompete agreement
and other deferred costs (Note 1) (1,030,515)
Equity in net losses of affiliated
companies
(Note 17) (344,069)
Other 11,927 (172,072) (430,561)

Other income (expense), net 8,485,809 8,303,258 (1,571,100)

NET INCOME $ 10,887,714 $ 7,762,206 $ 2,145,098
</TABLE>

See notes to financial statements.

F-23

THE COLONEL'S, INC.
<TABLE>
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
Additional Note
COMMON STOCK Paid-In Receivable- Retained
Shares Amount Capital Shareholders Earnings Total
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1992 6,021,000 $ 602,100 $ 1,244,511 $ 0 $ 9,014,170 $ 10,860,781

Net income 2,145,098 2,145,098

Transactions with shareholders
(Notes 7 and 12) (4,500,000) (1,906,401) (6,406,401)

BALANCE, DECEMBER 31, 1992 6,021,000 602,100 1,244,511 (4,500,000) 9,252,867 6,599,478

Net income 7,762,206 7,762,206

Transactions with shareholders
(Notes 7 and 12) 1,500,000 (9,334,273) (7,834,278)

BALANCE, DECEMBER 31, 1993 6,021,000 602,100 1,244,511 (3,000,000) 7,680,800 6,527,411

Net income 10,887,714 10,887,714

Transactions with shareholders
(Notes 7 and 12) 3,000,000 (6,927,171) (3,927,171)

BALANCE, DECEMBER 31, 1994 6,021,000 $ 602,100 $ 1,244,511 NONE $11,641,343 $ 13,487,954
</TABLE>

See notes to financial statements.

F-24

THE COLONEL'S, INC.
<TABLE>
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 10,887,714 $ 7,762,206 $ 2,145,098
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation 3,075,351 3,052,275 3,026,100
Write-off of a noncompete
agreement and other deferred costs 1,030,515
Net book value of property and equipment
destroyed in fire 1,588,670
Provision for impairment of assets held for sale 1,109,368 200,000
(Gain) loss on sale of property and equipment 1,584 (2,499) (726,109)
Net loss of affiliates 344,069
Changes in assets and liabilities that provided
(used) cash:
Accounts receivable:
Trade (875,598) 146,064 1,120,332
Related parties 173,400 (48,055) 994,267
Insurance (53,036) (4,299,203)
Inventories (2,457,547) 228,732 1,267,926
Prepaid expenses 85,342 (150,020) 115,069
Accounts payable (1,131,386) 2,079,525 43,534
Accrued expenses 24,414 4,071,571 624,988
Net cash provided by operating activities 10,839,606 14,629,266 9,985,789

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment (5,905,381) (3,468,238) (2,605,815)
Proceeds from sale of property, plant
and equipment 2,802 10,300 2,647,515
Net change in deposits (principally for tooling
and equipment) 1,384,885 (1,929,881) (307,969)
Additions to notes receivable - related party (886,369) (1,303,744) (1,356,864)
Payments received on notes receivable - related party 35,604 203,155
Payments received on notes receivable - other 237,663 37,422 688,051
Proceeds from sale of investments in affiliated
companies 37,250
Net cash used in investing activities (5,130,796) (6,450,986) (897,832)

F-25
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under notes payable 3,900,000 (1,790,000)
Proceeds from long-term obligations 1,700,000 9,325,000
Principal payments on long-term debt (5,993,777) (3,631,459) (10,933,910)
Principal payment on obligations under capital
leases (173,995) (151,665) (169,099)
Distributions paid to shareholders (1,810,047) (7,834,273) (1,906,401)
Cash disbursed for notes receivable - shareholders (4,500,000)
Net cash used in financing activities (7,977,819) (6,017,397) (9,374,410)

NET INCREASE (DECREASE) IN CASH $ (2,269,009) $ 2,160,883 $ (286,453)
</TABLE>

(Continued)

F-26

THE COLONEL'S, INC.
<TABLE>
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>

1994 1993 1992
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH $ (2,269,009) $ 2,160,883 $ (286,453)

CASH, BEGINNING OF YEAR 2,433,295 272,412 558,865

CASH, END OF YEAR $ 164,286 $ 2,433,295 $ 272,412

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION -
Cash paid during the year for interest $ 901,327 $ 821,167 $ 896,775
</TABLE>

SUPPLEMENTAL SCHEDULES OF NONCASH FINANCING AND INVESTING ACTIVITIES -
Shareholder note receivable was reduced by $3,000,000 and $1,500,000 in 1994
and 1993, respectively, by reclassifying such amounts to shareholder
distribution. In connection with the sale of the Company's investments in
affiliates, in 1992 the Company issued a note receivable of $260,000 (see Note
6).

See notes to financial statements (Concluded)

F-27

THE COLONEL'S, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

1. ORGANIZATION

The Colonel's, Inc. (the "Company") was incorporated in Michigan in
1982 and principally designs, manufactures and distributes plastic
automotive bumper fascias and miscellaneous reinforcement beams and
brackets, as replacement collision parts to the automotive aftermarket
industry in North America. The Company manufactures its products using
reaction injection molding and plastic injection molding technology.
The Company sells its products throughout North America through its
warehouses and a network of distributors.

In connection with the acquisition of its Florida facility, noncompete
agreements were obtained from the former shareholders of that company
for cash consideration of $1,000,000. The value assigned to the
noncompete agreement was being amortized on a straight-line basis over
the three-year term of the agreement. The Company wrote-off the
remaining unamortized balance of the noncompete agreements in 1992
based on management's evaluation of the future benefit of the
agreements to the Company (Note 15).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES are stated at the lower of cost or market, and cost is
determined by the first-in, first-out (FIFO) method.

PROPERTY, PLANT AND EQUIPMENT is stated at cost. Depreciation is
computed using the straight-line method over the estimated useful
lives of the assets as follows:

<TABLE>
<CAPTION>
<S> <C> <C>
Leasehold improvements 10-25 years
Equipment 5-10 years
Furniture and fixtures 3-10 years
Vehicles 3-7 years
Tooling 5-7 years
</TABLE>

Leasehold improvements are depreciated over the shorter of the life of
the lease or their estimated useful life of 10-25 years.

F-28
Expenditures for major renewals and betterments that extend the useful
life of the related property, plant and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expense as
incurred. When properties are retired or sold, the related cost and
accumulated depreciation are removed from the accounts and any gain or
loss on disposition is recognized.

REVENUE RECOGNITION - Sales and trade accounts receivable are
recognized at the time the product is shipped to the Company's
customers.

ASSETS HELD FOR SALE - The Company holds for sale certain machinery,
equipment and real estate rental property not needed in its
operations. These assets have been valued at the lower of cost or net
realizable value, and are classified as short or long term based on
the anticipated time of sale.

ACCRUED LEGAL FEES - The Company accrues for anticipated legal and
other professional fees in the same period that the related legal
matters are accrued.

ACCRUED ENVIRONMENTAL COSTS - The Colonel's accrues for environmental
costs when environmental assessments or remedial efforts are probable,
and the costs can be reasonably estimated. Generally, the timing of
these accruals coincide with the earlier of a feasibility study or the
Company's commitment to a plan of action based on the known facts.
Accruals are recorded based on existing technology available,
presently enacted laws and regulations, and without giving effect to
insurance proceeds. Such accruals are not discounted. As assessments
and cleanups proceed, environmental accruals are periodically reviewed
and adjusted as additional information becomes available as to the
nature or extent of contamination, methods of remediation required,
and other actions by governmental agencies or private parties.

INCOME TAX - Effective June 1, 1989, the Company elected to be taxed
as an S Corporation for federal income tax purposes. Under these
provisions. the Company's income is not taxable to the Company and is
passed through to its shareholders.

RECLASSIFICATIONS - Certain 1993 and 1992 amounts have been
reclassified to conform to the 1994 presentation.

3. PLANT FIRE

On June 1, 1993, the Company's leased facility in Owosso, Michigan,
which included its headquarters. sales offices and the principal
manufacturing and warehouse facilities, was destroyed by a fire. The
fire caused a complete loss of the approximate 280,000 square foot
facility and damaged inventory, equipment and other contents therein.
As a result of the fire, the Company transferred certain of its

F-29
headquarter personnel and production to its Florida facility on an
interim basis, to supplement a portion of the lost production of the
Owosso facility.

In 1994, the Company finalized negotiations with its insurance carrier
for amounts to be received on all coverages in effect at the date of
the fire. Total insurance proceeds received for the replacement cost
of lost property, lost profits and other direct costs of the fire were
approximately $31,000,000, of which approximately $6,630,000 was due
to a shareholder as indemnification of damages to the Owosso facility.
The Company has recognized in other income a net gain of approximately
$9,082,000 and $9,043,000 in 1994 and 1993, respectively, which
represents the amount by which the Company's insurance proceeds of
$24,381,000 exceeded the sum of the net book value of the assets
destroyed and the liabilities resulting from the fire.

4. INVENTORIES

Inventories at December 31 are summarized as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Finished products $ 5,320,211 $ 3,068,029
Raw materials 376,373 171,008

Total inventories $ 5,696,584 $ 3,239,037
</TABLE>

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31 is summarized by major
classifications as follows:

F-30
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Land and improvements $ 30,000 $ 30,000
Leasehold improvements 381,883 157,795
Equipment 6,500,354 5,410,466
Transportation equipment (including equipment
under capital lease) 1,465,918 1,381,131
Furniture and fixtures 364,906 318,811
Tooling 17,107,267 16,542,962
Total 25,850,328 23,841,165
Less accumulated depreciation and
amortization (13,298,322) (12,730,435)

Net property, plant and equipment $ 12,552,006 $ 11,110,730
</TABLE>

6. NOTES RECEIVABLE

Notes receivable at December 31 are summarized as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Note receivable from a company affiliated
through common control and ownership, due
in monthly payments of $25,000 including
interest at 7%, beginning January 1, 1995,
secured by a guarantee of the majority
shareholder. Any remaining unpaid principal
is due January 1, 2000 $ 2,138,186 $ 1,303,744
Notes receivable from a company affiliated
through common control and ownership, due
on demand, bearing interest at the prime rate,
collateralized by property and assets 695,117 678,794
Notes receivable from customer, aggregate
monthly installments of $20,629 including
interest at 7%, commencing February 1, 1993,
secured by shares of common stock of a company. 242,887 464,914
Land contract receivable, monthly installments of
$750, including interest at 10% per annum,
collateralized by land 22,779 22,779
Note receivable from customer, monthly
installments of $3,198, including interest
at 9% 15,636
Total 3,098,969 2,485,867
Less current portion (1,086,039) (242,150)

Long-term $ 2,012,930 $ 2,243,717
</TABLE>
F-31
7. NOTES RECEIVABLE - SHAREHOLDERS

Notes receivable from shareholders of $4,500,000 at December 31, 1992,
was reduced by $3,000,000 and $1,500,000 in 1994 and 1993,
respectively, by reclassifying such amounts to distributions to
shareholders.

8. NOTES PAYABLE

Notes payable at December 31 consist of the following short-term
credit facilities:

<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Line of credit with a bank, interest is due
monthly at the bank's prime rate
(8 1/2% and 6% at December 31, 1994
and 1993, respectively) $ 4,500,000 $ 3,000,000

Bridge notes payable to a bank. interest is
due monthly at 1% above the bank's prime
rate (effective rate of 9 1/2% and 7% at
December 31, 1994 and 1993, respectively) 1,500,000 3,000,000

$ 6,000,000 $ 6,000,000
</TABLE>

The Company's line of credit with a bank provides for maximum
borrowings of $4,500,000, based upon eligible accounts receivable and
inventories. The line of credit expires August 1, 1995.

The bridge notes were extended to the Company as an advance on
insurance proceeds to be received (see Note 3) and are due on demand.

The short-term credit facilities are with the same bank as the term
note (Note 9) and are secured by the same collateral. The weighted
average outstanding interest rate on the short-term credit facilities
were 7.25% and 6.25% in 1994 and 1993, respectively.

F-32
9. LONG-TERM OBLIGATIONS

Long-term obligations at December 31 consist of the following:

<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Term note payable to a bank, monthly
principal payments of $325,000 plus
interest at the bank's prime rate plus 1%
(effective rate of 9 1/2% and 7% at
December 31, 1994 and 1993, respectively)
through August 31, 1995, at which time
any unpaid principal and interest is due $ 1,275,000 $ 6,950,000
Mortgage payable to bank, interest at 9 1/4%,
payable monthly installments of $52,000
through May 1998, and secured by
underlying property 1,808,615
Capital lease obligations - due through
June 1995; individual leases having monthly
installments ranging from $470 to $9,008,
including interest imputed at rates from 4% to
11%, collateralized by the related machinery
and equipment (see Note 11) 126,218 300,213
Other, due on demand 10,268
Total 3,209,833 7,260,481
Less current portion (1,843,218) (7,128,802)

Long-term $ 1,366,615 $ 131,679
</TABLE>

The term note is part of a bank loan agreement that includes the
Company's short-term credit facilities (Note 8). This bank loan
agreement is guaranteed by the shareholders of the Company and
collateralized by a first priority security interest in substantially
all the Company's assets and by all of the Company's issued and
outstanding shares of common stock and contains certain covenants
which include restrictions on the acquisition of businesses and limits
the amount of shareholder distributions. The Company is also required
to maintain minimum levels of working capital and net worth, and may
not exceed certain debt ratios. Under the most restrictive of these
covenants, the Company is prohibited from making any distributions to
its shareholders in excess of amounts required for personal income tax
payments. As of December 31, 1994, the Company was in violation of
certain debt covenants. The Company received a waiver from the bank
waiving such violations through March 31, 1995.

In 1994, the Company assumed the outstanding mortgage payable of
approximately $2,100,000 on the Company's Owosso facility from its

F-33
shareholders. The assumption of the mortgage was treated as a
distribution to the shareholders in the 1994 financial statements.

The scheduled future repayments of long-term obligations at December
31, 1994, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1995 $ 1,843,000
1996 527,000
1997 578,000
1998 262,000
</TABLE>

10. ACCRUED EXPENSES

Accrued expenses at December 31 consist of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Accrued legal fees and settlement costs (Note 15) $ 2,895,406 $ 2,476,368
Accrued environmental costs (Note 16) 850,000 1,585,590
Accrued taxes 661,230 296,179
Accrued plant closing costs (Note 14) 355,000
Accrued payroll and payroll related accounts 102,621 552,917
Other 330,154 258,943

Total $ 5,194,411 $ 5,169,997
</TABLE>

11. COMMITMENTS

The Company leases trucks and equipment under capital leases (see Note
9). The Company also leases warehouse space under noncancelable
operating agreements. The warehouse leases require that the Company
pay the taxes, insurance and maintenance expense related to the leased
property. The cost and accumulated amortization of the Company's
assets under capital leases at December 31 are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C> <C>
Property under capital lease $ 428,680 $ 924,059
Less accumulated amortization 200,051 416,015

Total $ 228,629 $ 508,044
</TABLE>

F-34
Minimum future lease payments under noncancelable leases at December
31, 1994, are summarized as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
<S> <C> <C> <C>
Years ending December 31:
1995 $ 131,679 $ 853,000
1996 459,000
1997 558,000
1998 153,000
1999 117,000
Thereafter 9,000

Total 131,679 $ 2,149,000
Less amount representing interest 5,461
Present value of minimum lease payments 126,218
Less current maturities 126,218

Long-term portion of capital lease
obligations NONE
</TABLE>

Rent expense, including month to month rentals, was approximately
$1,952,000, $2,072,000 and $1,456,000 for the three years ended
December 31, 1994, 1993 and 1992, respectively. Included in rent
expense are amounts paid to the related parties of the Company for
rental of its principal operating facilities (See Note 12).

The Company entered into a ten-year employment agreement beginning
March 1, 1987, with a key employee who is related to the Company's
majority shareholder. The agreement guarantees the employee annual
compensation of $104,000 starting March 1, 1987 and is increased by 5%
on each anniversary date of the agreement. The Company may terminate
this agreement. but it is obligated to pay the employee the remaining
compensation due under the terms of the agreement. If the employee
terminates the agreement, the Company is obligated to pay the employee
80% of the remaining compensation due under the terms of the
agreement. The Company recorded a liability and related deferred
costs for the remaining compensation due under the terms of the
agreement based upon the net present value of such payments. The
deferred cost amount is being amortized to operations over the term of
the agreement.

The Company entered into a ten-year consulting agreement beginning
January 1, 1994, with the former president of the Company. The
agreement guarantees him $52,000 per year. The Company may terminate

F-35
this agreement, but is obligated to pay him the remaining compensation
due under the terms of the agreement. The Company recorded a liability
and related deferred costs for the remaining compensation due under
the terms of the agreement based upon the net present value of such
payments. The deferred cost amount is being amortized to operations
over the term of the agreement.

As of December 31, 1994, the Company has purchase commitments
aggregating approximately $2,055,000 relating to the construction and
purchase of tooling and machinery and equipment. The Company has
recorded deposits as of December 31, 1994, of approximately $1,247,700
relating to these commitments.

12. RELATED PARTY TRANSACTIONS

RELATED PARTIES - The primary, parties related to the Company are as
follows:

<circle> The majority shareholder, with whom various transactions are
made, including payment of monthly rent for the Owosso facility
through March 1994;

<circle> 620 Platt Road, Inc. ("Platt"), a company affiliated through
common ownership, to which rental payments are made for the Milan
facility;

<circle> The Colonel's Factory Warehouse of Arkansas, Inc.
("Arkansas"), a company affiliated through common ownership, with
which various transactions are made, including sales and purchases
of inventory, and payment for and reimbursement of Arkansas'
expenses; and

<circle> Blain Buick - GMC, Inc. ("Blain"), a company affiliated
through common ownership, from which automobiles, parts, and
service are purchased, and rental income is earned.

A summary, of transactions with these related parties is as follows:

<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C> <C>
Majority Shareholder:
Short-term advances $ 13,792,000 $ 8,041,000 $ 4,242,000
Payments on short-term advances 11,992,000 207,000 2,336,000
Reduction of note receivable 3,000,000 1,500,000
Assumption of mortgage 2,127,000
Shareholder distributions 6,927,000 9,334,000 1,906,000
Rental expense 280,000 840,000 840,000
Issuance of note receivable 4,500,000

F-36

Platt - rental expense 840,000 490,000

Arkansas:
Sales of inventory 309,500 568,300
Purchases of inventory 224,300 300,400

Blain:
Purchases of automobiles, parts
and service 147,000 52,000 72,000
Rental income 12,000 12,000 12,000
Interest income on note receivable 48,000 52,000 42,000
</TABLE>

Additionally, during 1992, the Company had transactions with other
related parties, which are described as follows:

The Company owned 40% and 30% of the common stock of Trojan Auto
Connection, Inc. and Leader, Automotive, Inc., respectively
(together, "Leader"), during 1992. A customer of the Company
owned a portion of the common stock of Leader in 1992. In
December 1992, this customer purchased the Company's equity
interests in Leader (see Note 16). During 1992, the Company had
sales to Leader of approximately $540,000. The Company had sales
to this customer of approximately $1,669,000 in 1992, and wrote
off $84,000 of accounts receivable due from this customer.
The majority shareholder of the Company owned 50% of the
outstanding common stock of Astro Auto Connection. Inc. ("Astro")
prior to March 1992, and acquired the remaining 50% of Astro in
March 1992. In June 1992, the majority shareholder of the Company
sold his equity interest to an unrelated party. In connection
with the sale, approximately $550,000 of Astro's trade accounts
receivable was forgiven by the Company. This transaction was
treated as a distribution to the majority shareholder of the
Company. The Company had sales to Astro of approximately $181,000
in 1992.

13. MAJOR CUSTOMER

The Company had sales to a significant customer aggregating
approximately $2,782,000 during the year ended December 31, 1992. The
Company had no major customers in 1994 or 1993.

14. PLANT CLOSING

F-37
expenses. Assets held at the facility that are not expected to be
transferred to the Milan facility have been classified as short-term
assets held for sale.

15. LITIGATION

In connection with the acquisition of the Florida facility (known as
"NuPar"), the Company signed employment agreements with the former
NuPar shareholders for the three-year period beginning December 4,
1991. Payments under the agreements were contingent upon the former
NuPar shareholders meeting the conditions set forth in the agreements.
The Company contends that the former NuPar shareholders have not met
such conditions, and therefore have made no such payments. In March
1994, the former NuPar shareholders filed a lawsuit against the
Company for $1,800,000 claiming they have met the conditions of the
agreements and are therefore entitled to the payments thereunder.

A second component of that action involved a purchase contract between
NuPar's shareholders and the Company, covering the building leased by
NuPar from those shareholders. The Company had the right to terminate
that contract if certain environmental conditions were not satisfied.
While the parties were litigating the issue of whether those
conditions had been satisfied, the mortgage holder foreclosed the
property and took title to it after NuPar's shareholders failed to
redeem it. NuPar's shareholders' inability to deliver title to the
building mooted their action to force the Company to purchase it.
While the ultimate result of this lawsuit cannot be determined, it is
not expected that final outcome resulting from this matter will have a
material adverse effect on the financial position of the Company.

A suit was filed against the Company in 1992 claiming the Company
violated anti-trust laws and alleging that the Company has engaged in
predatory pricing, monopolization and anti-competitive acquisitions.
Discovery has narrowed the plaintiffs' theories of recoveries and the
allegedly offending sales at issue to only two bumper models of which
fewer than 2,000 parts were sold during the relevant period. The suit
was originally filed seeking $400,000, before trebling. The Company
has offered to settle this dispute for $160,000. While the ultimate
result of this lawsuit cannot be determined, it is not expected that
final outcome resulting from this matter will have a material adverse
effect on the financial position of the Company.

The outside designer and installer of the automated paint line system
for the Company's Milan, Michigan, facility abandoned the project
before it was completed, leaving his suppliers and subcontracts owed
more than the Company owed to the installer under the sales contract
if he had finished it. The Company arranged with third parties to have
the installation completed. The installer's unpaid subcontractors are
seeking to assert construction liens against the Company as well. The
Company's costs to correct defects and complete performance approach,

F-38
if not exceed, the unpaid contract balance. While the ultimate result
of this lawsuit cannot be determined, it is not expected that final
outcome resulting from this matter will have a material adverse effect
on the financial position of the Company.

In connection with the paint line system, the Company entered into a
consent agreement with the Michigan Department of Natural Resources
under which the Company will pay a $200,000 fine which arose because
the Company failed to apply for a permit before beginning the actual
erection and test operation of the system.

The Company is involved in various other legal proceedings which have
arisen in the normal course of its operations. While the results of
such proceedings and those discussed in the preceding paragraphs
cannot be predicted with certainty, management believes that any
additional amounts that may be required resulting from the final
outcome of such matters over amounts presently accrued will not have a
material adverse effect on the Company's financial position.

In January 1993, the Company and the UAW entered into a settlement
agreement which is pending approval from the United States Attorney
Generals office. As a result of this agreement, the Company paid
approximately $215,000 in back wages. Such amount was recorded in the
1992 financial statements.

16. ENVIRONMENTAL REMEDIATION

The Company is responsible for the remediation of hazardous materials
and ground contamination located at the Owosso facility as a result of
the fire (see Note 3). In August 1993, the Michigan Department of
Natural Resources required that the Company perform a complete
hydrogeological study of this site to determine the extent of the
contamination. The Company will engage environmental consultants in
the summer of 1995 to determine the extent of the hazardous materials
located at this site, if any, and the cost of any remediation. The
cost of any remediation that may be required in excess of amounts
accrued is not expected to have a material adverse effect on the
financial position of the Company.

As part of the lease agreement with a related party for the Milan,
Michigan, facility, the Company is also responsible for the
remediation of hazardous material, up to an amount of $2,000,000,
which existed at this site prior to the Company entering into the
lease in June 1993. The Company has accrued for all estimated
remediation costs based on an environmental study of the site. The
cost of any remediation that may be required in excess of amounts
accrued is not expected to have a material adverse effect on the
financial position of the Company.

F-39
17. EQUITY IN NET LOSSES OF AFFILIATED COMPANIES

On December 18, 1992, the Company sold all its shares of common stock
in Leader to a customer for an aggregate sale price of $297,000,
consisting of $37,000 cash and a $260,000 note receivable and,
accordingly, the Company's losses from such investments in 1992
included the losses on their sale.

18. SUBSEQUENT EVENT

Subsequent to the Company's year-end, a non-binding letter of intent
was signed with Brainerd International ("Brainerd") regarding the
Company's potential merger with Brainerd, a publicly held company that
owns and operates an automobile race track in Minnesota. Consummation
of the merger is subject to a number of conditions including
negotiating definitive agreements, approval by the directors of
both companies' clearance by the appropriate governmental agencies
and additional investigation. There are also certain aspects of
Minnesota's laws which may restrict the ability of the Companies to
combine. Either party may terminate the discussions.

The merger with Brainerd, if consummated, is not expected to have a
material effect on the Company's operations.

******

F-40

<TABLE>
<CAPTION>
THE COLONEL'S, INC.

BALANCE SHEETS (Unaudited)
ASSETS June 30 Dec 31
1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash $ 224,486 $ 164,286
Accounts receivable:
Trade (net of allowance for doubtful
accounts of $413,809 and $345,900 at
June 30, 1995, and Dec 31, 1994,
respectively) 2,091,186 2,474,565
Related party 329,407
Insurance 4,352,239
Inventories (Note 2) 6,046,165 5,696,584
Prepaid expenses 328,559 239,935
Notes receivable:
Related party 300,000 863,658
Other 125,927 222,381
Current portion of deferred compensation 208,247 204,436
Assets held for sale 75,000 350,000
Total current assets 9,728,977 14,568,084

PROPERTY, PLANT, AND EQUIPMENT-Net
(Note 3) 13,322,157 12,552,006

OTHER ASSETS:
Notes receivable:
Related party 3,519,561 1,969,645
Other 0 43,285
Long-term portion of deferred compensation 560,268 624,136
Deposits 3,177,120 1,247,727
Assets held for sale 525,000 525,000
Total other assets 7,781,949 4,409,793

TOTAL ASSETS $ 30,833,083 $ 31,529,883

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Notes payable (Note 5) $ 4,200,000 $ 6,000,000
Current portion of long-term 2,973,584 1,843,218
obligations (Note 5)
Accounts payable-trade 3,367,617 2,809,113
Accrued expenses (Note 4) 4,389,228 5,194,411
Current portion of deferred compensation 208,247 204,436
Total current liabilities 15,322,676 16,051,178

F-41
LONG-TERM OBLIGATIONS, NET OF
CURRENT PORTION (Note 5) 4,517,206 1,366,615
Commitments and Contingencies
(Note 7 & 8)

LONG-TERM PORTION OF DEFERRED
COMPENSATION 560,268 624,136

SHAREHOLDERS' EQUITY:
Common stock: 10,000,000 shares $0.10
authorized at par value, 6,021,000 602,100 602,100
shares issued and outstanding
Additional paid-in capital 1,244,511 1,244,511
Retained earnings 8,770,322 11,641,343
Total shareholders' equity 10,616,933 13,487,954

TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 31,017,083 $ 31,529,883
</TABLE>
See notes to financial statements.

F-42

<TABLE>
<CAPTION>
THE COLONEL'S, INC.

STATEMENTS OF INCOME (Unaudited)
Six Months Ending Three Months Ending
June 30 June 30
1995 1994 1995 1994

<S> <C> <C> <C> <C>
SALES $14,651,145 $ 14,533,536 $ 6,831,901 $ 6,896,013

COST OF SALES 9,807,373 9,830,552 4,555,715 5,249,949

GROSS PROFIT 4,843,772 4,702,984 2,276,186 1,646,064

SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 2,338,068 1,971,204 1,234,315 1,773,209

INCOME FROM OPERATIONS 2,505,704 2,731,780 1,041,871 (127,145)

OTHER INCOME (EXPENSE):
Interest expense (251,124) (403,986) (49,773) (240,448)
Interest income 107,215 76,524 48,021 35,507
Rental income 36,000 37,000 18,000 18,000
Other 3,225 122,867 (2,421) 68,418

TOTAL OTHER INCOME
(EXPENSE), Net (104,684) (167,595) 13,827 (118,523)

NET INCOME $ 2,401,020 $ 2,564,185 $ 1,055,698 $ (245,668)
</TABLE>
See notes to financial statements.

F-43

<TABLE>
<CAPTION>
THE COLONEL'S, INC.

STATEMENTS OF CASH FLOWS (Unaudited):

Six Months Ended
June 30
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 2,401,020 $ 2,564,185
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation 1,337,449 2,190,600
Loss on Sale of Assets 58,883

Changes in assets and liabilities that
provided (used) cash:
Accounts receivable:
Trade 383,379 (1,035,479)
Related Parties (329,407) 173,400
Insurance 4,352,239 4,299,203
Inventories (533,581) (803,471)
Prepaid expenses (88,624) 93,720
Accounts payable 558,504 (2,469,244)
Accrued expenses (621,183) (339,922)
Net cash provided by operating activities 7,518,679 4,672,992

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and (2,065,736) (1,120,228)
equipment
Proceeds from sale of property, plant 174,254 0
and equipment
Net change in deposits (principally for (1,929,393) (721,132)
tooling and equipment)
Additions to notes receivable-related party (1,071,375) (16,324)
Payments received on notes receivable-
related party 85,117 30,009
Payments received on notes receivable-other 139,739 118,316
Net cash used in investing activities (4,667,394) (1,709,359)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under notes
payable (1,800,000) 340,000

F-44
Proceeds from long-term obligations 6,437,275 2,289,846
Principal payments on long-term debt (2,147,664) (4,482,184)
Principal payment on obligations under
capital leases (8,654) (17,266)

Distributions paid to shareholders (5,272,042) (2,101,804)
Net cash used in financing activities (2,791,085) (3,972,038)

NET INCREASE (DECREASE) IN CASH $ 60,201 $ (1,008,405)

CASH, BEGINNING OF YEAR 164,286 2,433,295

CASH END OF PERIOD $ 224,486 $ 1,424,890
</TABLE>
See notes to financial statements.

F-45

THE COLONEL'S, INC.

Notes to financial Statements (Unaudited)

Note 1 BASIS OF PRESENTATION

The financial information included herein is unaudited; however such
information reflects all adjustments (consisting solely of normal
recurring adjustments) that are, in the opinion of management, necessary
for a fair presentation of the results of operations, financial position
and cash flows for the periods presented. The accompanying unaudited
financial statements have been prepared in accordance with Article 10 of
Regulation S-X.

The results of operations for the six months ended June 30, 1995 are not
necessarily indicative of the results to be expected for the full year.

Note 2 INVENTORIES

<TABLE>
<CAPTION>
Inventories are summarized as
follows: June 30 Dec 31
1995 1994
<S> <C> <C>
Finished products $ 5,287,461 $ 5,320,211
Raw materials 758,704 376,373

Total inventories $ 6,046,165 $ 5,696,584
</TABLE>

F-46
Note 3 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is summarized by major classification as
follows:

<TABLE>
<CAPTION>
June 30 Dec 31
1995 1994
<S> <C> <C>
Land and improvements $ 30,000 $ 30,000
Leasehold improvements 381,883 381,883
Equipment 6,822,701 6,500,354
Transportation equipment
(including equipment under
capital lease) 1,493,617 1,465,918
Furniture and fixtures 354,980 364,906
Tooling 18,874,747 17,107,267

Total 27,957,928 25,850,328

Less accumulated
depreciation and
amortization (14,635,771) (13,298,322)

Net property, plant and
equipment $ 13,322,157 $ 12,552,006
</TABLE>

Note 4 ACCRUED EXPENSES

Accrued expenses consist of the following:
<TABLE>
<CAPTION>
June 30 Dec 31
1995 1994
<S> <C> <C>
Accrued legal fees and
settlement costs $ 2,498,287 $ 2,895,406
Accrued environmental
costs 831,798 850,000
Accrued taxes 599,000 661,230
Accrued plant closing costs 0 355,000
Accrued payroll and payroll
related accounts 181,203 102,621
Other 278,940 330,154

Total $ 4,389,228 $ 5,194,411
</TABLE>

F-47

Note 5 NOTES PAYABLE AND LONG-TERM OBLIGATIONS

Notes payable consist of the following:
<TABLE>
<CAPTION>
June 30 Dec 31
1995 1994
<S> <C> <C>
Line of credit with a bank,
interest due monthly at
the bank's prime rate (9%
and 8 1/2% - June 30, 1995
and December 31, 1994
respectively) $ 4,200,000 $ 4,500,000

Bridge notes payable to bank,
repaid in 1995 0 1,500,000

Total Short Term $ 4,200,000 $ 6,000,000
Long term obligations consist
of the following:
</TABLE>
<TABLE>
<CAPTION>
June 30 Dec 31
1995 1994
<S> <C> <C>
Term note payable to bank,
payable in monthly
installments of $200,000
plus interest at 1/2%
above the bank's prime
rate (9% at June 30, 1995)
through October 1998. $ 5,800,000

Term note payable to a bank,
repaid in 1995 $ 1,275,000
Mortgage payable to a bank,
interest at 9 1/2%, payable
in monthly installments
$52,000 through May 1998
and secured by underlying
property. 1,573,226 1,808,615

F-48
Capital lease obligations-due
through June 1996; individ-
ual leases having monthly
installments of $9,008,
including interest imputed at
rates of 4% collateralized
by the related machinery
and equipment. 117,564 126,218

Total 7,490,790 3,209,833

Less current portion (2,973,584) (1,843,218)

Long-term $ 4,517,206 $ 1,366,615
</TABLE>

In May 1995, the Company secured a new credit facility with a bank that
consists of a line of credit that provides for maximum borrowings of
$4,500,000 based on eligible receivables and inventories, and a
$6,000,000 term loan. The Company's credit facility is secured by
all of the assets of the Company as well as personal guarantees of the
shareholders. The Company is required to maintain certain net worth
and debt to equity ratios as part of the credit agreement.

In July 1995, the Company entered into a credit/lease agreement with its
primary lending institution to purchase approximately $6,000,000 of new
capital equipment. Under the arrangement, the leasing agency will
make progress payments on behalf of the Company and charge interest at
8.75% on the money advanced until the equipment is installed and
accepted by the Company. The Company then would initiate a 7 year
lease on the equipment with a $1.00 buy out. The leasing agency has
advanced $2,100,280 towards the $6,000,000.

Note 6 PLANT CLOSING

In August 1994, the Company ceased operations and began the steps
necessary to close its Florida facility. At December 31, 1994,
the Company accrued estimated costs required to close the facility.
Such costs include approximately $1,034,000 for the write down of
assets to their net realizable value of $350,000 and $355,000
for costs of the storage, dismantling and disposing of the
equipment, and other related expanses. Assets held at the
facility that are not expected to be transferred to the Milan
facility have been classified as short-term assets held for sale.
The Company completed its closing of the Florida facility in May
1995. There is no material change in the costs to close the
plant from the initial accrual.

F-49
Note 7 LITIGATION

Reference is made to Note 15 of the Company's annual financial
statements.

With respect to the Nupar shareholders' actions, the Company
settled these actions in July 1995 for $1.4 million payable
over the next two years interest free. This amount has
already been accrued in the Company's financial statements
as of June 30, 1995.

A suit was filed against the Company in 1992 claiming the
Company violated anti-trust laws and alleging that the
Company has engaged in predatory pricing, monopolization
and anti-competitive acquisitions. Discovery has narrowed
the plaintiffs' theories of recoveries and the allegedly
offending sales at issue to only two bumper models of
which fewer than 2,000 parts were sold during the relevant
period. The suit was originally filed seeking $400,000,
before trebling. The Company has offered to settle this
dispute for $160,000. While the ultimate result of this
lawsuit cannot be determined, it is not expected that
the final outcome resulting from this matter will have a
material adverse effect on the financial position or
results of operations of the Company.

With respect to the actions involving installation of the
automated paint system at Milan, Michigan, the Company
settled directly with 12 of the 14 subcontractors for
$240,000. Attempts to settle with the last two
subcontractors remain and an accrual of $45,000 remains
on the books for this settlement.

The Company is involved in various other legal proceedings which
have arisen in the normal course of its operations. While the
results of such proceedings and those disclosed in the preceding
paragraphs cannot be predicted with certainty, management believes
that any additional amounts that may be required resulting from the
final outcome of such matters over amounts presently accrued will
not have a material adverse effect on the financial position or
results of operations of the Company.

Note 8 ENVIRONMENTAL REMEDIATION

The Colonel's on-going operations generate waste and manufacturing
by-products in the form of excess plastic materials ("flash"), which
is trimmed off the manufactured bumpers in the process of finishing
them, and waterborne primer residue. Polyurethane flash is disposed
of along with cardboard and wood scraps as normal rubbish. TPO flash

F-50
is recycled in the Colonel's manufacturing process. Paint residue and
paint filters are periodically hauled away as non-hazardous waste.
Lubricating oils and greases used in maintaining presses and other
machinery are replaced and removed on a regularly scheduled basis;
they are picked up and removed from the site by a licensed hauler/
recycler. The total costs of those items removal is non-material.

The final distinguishable category of environmental expense was
occasioned by the closing of the Sarasota, Florida manufacturing
facility. Federal and state environmental regulations require the
dismantling and removal of bulk tanks and any piping that had carried
chemicals when operations are discontinued. The Colonel's completed
the required discontinuance activity at the site and has been issued a
final letter from the Florida Department of Environmental Protection
evidencing that satisfactory completion.

The Company is responsible for the remediation of hazardous materials and
ground contamination located at the Owosso facility as a result of the
fire (see Note 6 ). In August 1993, the Michigan Department of Natural
Resources required that the Company perform a complete hydrogeological
study of this site to determine the extent of the contamination. The
Company will engage environmental consultants in the summer of 1995 to
determine the extent of the hazardous materials located at this site,
if any, and the cost of any remediation. The cost of any remediation
that may be required in excess of amounts accrued is not expected to
have a material adverse effect on the financial position or results of
operations of the Company.

As part of the lease agreement with a related party for the Milan,
Michigan facility, the Company is also responsible for the remediation
of hazardous material, up to an amount of $2,000,000, which existed at
this site prior to the Company entering into the lease in June 1993.
The Company has accrued for all estimated remediation costs based on an
environmental study of the site. The cost of any remediation that may
be required in excess of amounts accrued is not expected to have a
material adverse effect on the financial position or results of
operations of the Company.

Note 9 SUBSEQUENT EVENTS

Subsequent to December 31, 1994, a non-binding letter of intent the
Company signed, with Brainerd International ("Brainerd") regarding the
Company's potential merger with Brainerd, a publicly held company that
owns and operates an automobile race track in Minnesota. Consummation
of the merger is subject to a number of conditions including
negotiating definitive agreements, approval by the directors of
both companies, clearance by the appropriate governmental agencies
and additional investigation. There are also certain aspects of
Minnesota's laws which may restrict the ability of the Companies to

F-51

combine. Either party may terminate the discussions. The merger
with Brainerd, if consummated, is not expected to have a material
effect on the Company's operations.

The Company has issued purchase orders in excess of $5,000,000 for
purchase of additional new machinery and equipment. It also has
committed $3,400,000 to new tools. The Company signed new
financing/lease agreements with a leasing company which will make
progress payments to the manufacturers and commence the lease after
installation. The Company will pay interest only at 8.75% on money
advanced for progress payments before the commencement of the
lease.

F-52

APPENDIX A

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made as of
October __, 1995 between THE COLONEL'S, INC. and BRAINERD MERGER
CORPORATION, and is joined in by BRAINERD INTERNATIONAL, INC.

THE COLONEL'S, INC. ("The Colonel's") is a Michigan corporation
with its principal executive offices located at 620 South Platt Road,
Milan, Michigan 48160. The Colonel's has two shareholders, Donald J.
Williamson and Patsy L. Williamson ("Shareholders").

BRAINERD INTERNATIONAL, INC. ("Brainerd") is a Minnesota
corporation with its principal place of business located at 17113
Minnetonka Boulevard, Minnetonka, Minnesota 55345.

BRAINERD MERGER CORPORATION ("Brainerd Sub") is or will be a
newly incorporated Michigan corporation and a wholly owned subsidiary of
Brainerd.

The Colonel's, Brainerd and Brainerd Sub have executed this
Agreement and Plan of Merger (the "Agreement") intending to be legally
bound.

1. General.

1.1 Execution of Certificate of Merger. Subject to the
conditions of this Agreement, The Colonel's and Brainerd Sub shall cause a
Certificate of Merger in substantially the form of Exhibit A to be attached
hereto (the "Certificate of Merger") to be executed and filed in accordance
with the Michigan Business Corporation Act. Execution shall occur at a
time and place reasonably designated by The Colonel's. It is the intention
of the parties that the execution and filing of the Certificate of Merger
will occur on or before June 30, 1995.

1.2 Date of Merger. The effective date and time of the merger
shall be the date and time as may be set forth in the Certificate of Merger
("Merger Date"). As of the Merger Date, Brainerd Sub shall be merged with
and into The Colonel's, which shall be the surviving corporation pursuant
to this Agreement. The Colonel's, in its capacity as the surviving
corporation, is sometimes herein called the "Surviving Corporation."

1.3 Effect of the Merger. On the Merger Date, the separate
existence of Brainerd Sub shall cease, and the Surviving Corporation shall
succeed to and possess all the rights, privileges, immunities and powers,
public or private, and be subject to all the debts, liabilities,
obligations and duties of Brainerd Sub and The Colonel's all without
further act or deed, as provided in Section 724 of the Michigan Business
Corporation Act.

1.4 Articles of Incorporation, Bylaws, Directors and Officers.
The Articles of Incorporation and Bylaws of The Colonel's which are in
effect on the Merger Date shall be, from and after the Merger Date, the
Articles of Incorporation and Bylaws of the Surviving Corporation until
they are amended. The directors and officers of The Colonel's shall be,
from and after the Merger Date, the directors and officers of the Surviving
Corporation until their successors are duly elected or appointed.

1.5 Further Documents or Necessary Action. Brainerd, Brainerd
Sub and The Colonel's, respectively, shall take all such actions as may be
necessary or appropriate in order to effectuate the transactions
contemplated hereby. On or after the Merger Date, if any further action is
necessary or desirable to carry out the purposes of this Agreement and to
vest the Surviving Corporation with full title to all properties, assets,
rights, approvals, immunities and powers of The Colonel's or Brainerd Sub,
the officers and directors of such corporation, at the expense of the
Surviving Corporation shall take all such necessary or appropriate action.

1.6 Closing. A closing shall be held at the time and place
specified by The Colonel's pursuant to Section 1.1 of this Agreement (the
"Closing") for execution of the Certificate of Merger and the delivery of
any opinions, certificates or other documents which may then be required to
satisfy the conditions of this Agreement.

2. Continuation and Conversion of Securities.

2.1 Continuation of Brainerd Sub Common Stock. On the Merger
Date, the Shares of Brainerd Sub Common Stock which are outstanding
immediately prior to the Merger Date shall remain issued and outstanding
shares of $0.10 par value common stock of the Surviving Corporation, which
shall represent all of the issued and outstanding shares of the common
stock of the Surviving Corporation.

2.2 Conversion of The Colonel's Common Stock. On the Merger
Date, all shares of The Colonel's Common Stock held by the Shareholders of
The Colonel's shall, without further act or action, cease to exist as such
and shall be converted into a right to receive aggregate consideration from
Brainerd as set forth below (the "Merger Consideration").

3. Merger Consideration. Brainerd shall issue to the Shareholders
an aggregate of Twenty-Three Million Five Hundred Thousand (23,500,000)
shares of Brainerd Common Stock (the "Shares"). The Shares shall be issued
to the Shareholders proportionate to their ownership of The Colonel's
Common Stock. Stock certificates representing the Shares shall be
delivered by Brainerd Sub to the Shareholders on or as soon as practicable
following the Merger Date, but in no event more than fourteen (14) days
following the Merger Date.

4. Representations, Covenants and Warranties of Brainerd and
Brainerd Sub. Except as may be elsewhere disclosed or provided in this
Agreement, Brainerd and Brainerd Sub jointly and severally represent,
covenant and warrant as follows.

-2-
4.1 Disclosure Schedule. Brainerd and Brainerd Sub will respond
to requests for corporate documents from The Colonel's and promptly
complete and deliver to The Colonel's (and in no event less than thirty
(30) days prior to the Merger Date), disclosure schedules and related
documents which may be requested by The Colonel's in connection with its
due diligence review of Brainerd and Brainerd Sub (hereinafter referred to
as the "Disclosure Schedule"), which will include the numbered exhibits
specifically referred to in this Agreement. The information contained in
the Disclosure Schedule, and all documents which form a part thereof, will
be all of the information and documents requested by such schedules. The
information to be contained in the Disclosure Schedule will be complete and
accurate in all material respects, and all documents which form a part of
the Disclosure Schedule will be true and complete copies of the documents
they purport to represent. The representations and warranties with respect
to the Disclosure Schedule will be deemed given as and when the final
Disclosure Schedule is furnished to The Colonel's and again at Closing.

4.2 Organization and Good Standing. Brainerd is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota, has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted, and is duly qualified to do business in all jurisdictions
where such qualification is required. Brainerd Sub is or will be a
corporation duly organized, validly existing and in good standing under the
laws of the State of Michigan, with all requisite corporate power and
authority to own, lease and operate its properties, if any, and to carry on
its business, if any, and is or will be duly qualified to do business in
all jurisdictions where such qualification is required.

4.3 Enforceability, Consents. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on
the part of Brainerd and Brainerd Sub, and this Agreement is valid and
binding obligation of Brainerd and Brainerd Sub, subject only to approval
by Brainerd shareholders in accordance with Section 6.2.3. No consent or
approval by any governmental authority, other than compliance with
applicable federal and state securities laws, is required in connection
with the execution and delivery by Brainerd and Brained Sub of this
Agreement, the Certificate of Merger or the consummation by Brainerd and
Brainerd Sub of the transactions contemplated hereby.

4.4 Financial Statements. The audited financial statements of
Brainerd for the years ended December 31, 1993 and December 31, 1994,
attached as Exhibit B to this Agreement ("Financial Statements") are true,
complete and correct, and present fairly the financial position of Brainerd
as of December 31, 1993 and December 31, 1994, and the results of
operations for the years then ended, in conformity with generally accepted
accounting principles, consistently applied.

4.5 No Conflicts. Neither the execution nor the delivery of
this Agreement, nor the performance hereof will conflict with, or result in
-3-
a breach of the terms, conditions or provisions of, or constitute a default
under, or give rise to a right of acceleration under, the corporate charter
or Bylaws of Brainerd or Brainerd Sub, or any indenture, mortgage, deed or
trust, or any other agreement or instrument to which Brainerd or Brainerd
Sub are a party or by which they are bound, or any decree, or order or rule
of a court or governmental authority that is binding on Brainerd or
Brainerd Sub.

4.6 Absence of Undisclosed Liabilities. Except to the extent
reflected or reserved against in the Financial Statements, Brainerd had no
material liabilities of any nature, whether accrued, absolute, contingent,
or otherwise as of the dates of the Financial Statements. Brainerd
represents and warrants that there is no basis for the assertion against
Brainerd or Brainerd Sub of any material liability of any nature or in any
amount not fully reflected or reserved against in the Financial Statements
as of the dates of the Financial Statements.

4.7 Adverse Changes. Since January 1, 1995, there has not been
any material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of Brainerd.

4.8 Capital Stock. The authorized capital stock of Brainerd
consists of Ten Million (10,000,000) shares of voting Common Stock, $.01
par value, of which Six Hundred Seventy Seven Thousand Eight Hundred Thirty
(677,830) shares are validly issued and outstanding and fully paid and
nonassessable; no person has any present or future right, conditional,
preemptive or otherwise, to acquire any additional shares of capital stock
of Brainerd, or any securities which may be convertible into shares of such
capital stock. The authorized capital stock of Brainerd Sub consists or
will consist of one thousand (1,000) shares of voting Common Stock, $0.10
par value, of which one thousand (1,000) shares are or will be validly
issued and outstanding and are or will be fully paid and nonassessable; no
person has or will have prior to the Closing have any present or future
right, conditional, preemptive or otherwise, to acquire any additional
shares of capital stock of Brainerd Sub, or any securities which may be
convertible into shares of such capital stock.

4.9 Bank Accounts. The names and locations of all banks and
other financial institutions at which Brainerd has any accounts or safe
deposit boxes and the names of all persons authorized to draw thereon or
have access thereto are set forth on Exhibit C.

4.10 Absence of Claims. Except as listed on Exhibit D hereto or
except as set forth in the Schedule 14A Proxy Statement of Brainerd
prepared in connection with this Agreement (the "Proxy Statement"),
there are no claims, suits, actions, injunctions, orders, decrees,
proceedings or investigations of a material nature entered, pending or
threatened against or involving Brainerd or Brainerd Sub in any court or
before any governmental agency, nor is there any basis for any such claim,
suit or proceeding.

-4-
4.11 Certain Employment Matters. There are no strikes,
slowdowns, stoppages, organizational efforts, or other labor disputes
pending or threatened against Brainerd or Brainerd Sub. Except as set
forth in Exhibit E, Brainerd and Brainerd Sub are in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and neither is engaged in any
unfair labor practice. Except as set forth in Exhibit E, no key employee
of Brainerd, having annual base compensation exceeding $50,000 has notified
Brainerd of his or her intention to terminate employment in advance of
scheduled retirement and, except as set forth in Exhibit E, Brainerd does
not have reason to anticipate the resignation of any key employee as a
result of the transactions contemplated in this Agreement.

4.12 Real Property Leases. Brainerd is not a party to any leases
of real property, except as listed on Exhibit F, and all such leases are
valid and enforceable in accordance with their terms, and Brainerd and all
other parties to each of the foregoing have performed all obligations
required to be performed to date.

4.13 Personal Property Leases. Leases of personal property by
Brainerd are valid and enforceable in accordance with their terms, and
Brainerd and all other parties to each of the foregoing have performed all
obligations required to be performed to date. All leases of personal
property to which Brainerd is a party requiring aggregate payments in
excess of $5,000 are listed on Exhibit F.

4.14 Title to Personal Properties. Brainerd has good and
marketable title to all property, inventory, accounts receivable, and all
other assets, reflected in the Financial Statements and to all tangible
personal property not reflected in its Financial Statements, but presently
utilized by Brainerd except for personal property disposed of or replaced
in the ordinary course of business, and all such personal property is held
by Brainerd free of all liens, encumbrances, security interests, and
charges except as disclosed on Exhibit G. The furniture, fixtures,
machinery and equipment of Brainerd is in good and operable condition and
repair, normal wear and tear excepted.

4.15 Tax Matters. Except as set forth in Exhibit H, Brainerd has
filed all federal, state, and local tax returns required to be filed as of
the date of this Agreement and will continue to file all such returns
through the Merger Date. All taxes, charges, penalties or fees imposed,
due or levied by or for any governmental agency against Brainerd including
but not limited to all federal, state or other governmental tax returns
which have been filed, for the years ended December 31, 1994, 1993, and
1992 or which are, or will be required to be field for the period January
1, 1995 through the Merger Date, have been paid in full or adequately
provided for and are otherwise reflected in the Financial Statements of
Brainerd. No extension of time for the assessment of deficiencies for any
such taxes, charges, or fees is in effect, and, to the best of Brainerd's
knowledge, there is no unassessed tax deficiency proposed or threatened

-5-
against Brainerd. All moneys required to be withheld by Brainerd from
employees for income taxes, Social Security and unemployment insurance
taxes have been collected or withheld, and either paid to the respective
governmental agencies or set aside in accounts for such purpose, or
properly reserved against.

4.16 Agreements and Notes. Except as set forth in Exhibit I, and
other than contracts or agreements entered into in the ordinary course of
business involving amounts of less than Fifty Thousand Dollars ($50,000),
Brainerd is not a party to or subject to any contract or agreement, express
or implied, written or oral, for the purchase, sale, furnishing or use of
any property or services, or any other agreement, note, instrument,
contract, or undertaking which affects the business properties or assets of
Brainerd and all such agreements or contracts are valid and enforceable in
accordance with their terms, and Brainerd and all other parties to each of
the foregoing have performed all obligations required to be performed to
date.

4.17 Permits and Licenses. Brainerd has all permits, licenses,
orders, and approvals of all governmental bodies necessary for it to carry
on its business as presently conducted; all such permits, licenses, orders,
and approvals are in full force and effect and have been complied with;
all fees and charges incident thereto are fully paid and current; and no
suspension or cancellation of any of them is threatened, except as set
forth on Exhibit D.

4.18 Compliance with Laws. To the best of Brainerd's knowledge,
Brainerd has complied with all federal, state and local laws, regulations
and ordinances. Brainerd is not presently subject to, any fine, penalty,
liability or disability as the result of any failure to comply with any
requirement of federal, state local or foreign law or regulation (including
those relating to the employment of labor or occupational health and
safety) or any requirement of any domestic or foreign governmental body or
agency having jurisdiction over it, material to the conduct of its
business, the use of its assets and properties, or the real property owned
by it. Brainerd has not been subject to any inspection or investigation by
any domestic or foreign governmental agency from January 1, 1994, to the
date of this Agreement, except as set forth on Exhibit D.

4.19 Intellectual Property. Brainerd owns or is licensed or
otherwise has the right to use all patents, trademarks, trade names,
copyrights permits, licenses, technology, formulas, know-how and process
used in or necessary for the conduct of its business. All of Brainerd's
registered patents, trademarks, trade names and copyrights, if any, are
listed on Exhibit J. The use of such patents, trademarks, trade names,
copyrights, technology, formulas, know-how and processes by Brainerd does
not, to the best of Brainerd's knowledge, infringe on the rights of any
other person, company or entity, and there is no infringement or unlawful
use by any other person, company or entity of any such patents, trademarks,
trade names, copyrights, technology, formulas, know-how or processes.

-6-
4.20 Insurance. The present insurance coverage of Brainerd is
set forth in Exhibit K and will not be in any way materially affected by,
or terminate or lapse by reason of, the transactions contemplated by this
Agreement. The policies listed on Exhibit K are outstanding and duly in
force and all premiums with respect to such policies have been paid to
date.

4.21 Employee Benefit Plans. Except as set forth on Exhibit E,
Brainerd is not a party to (i) any plan or contract providing for bonuses,
options, the purchase of stock, deferred compensation, retirement payments
or profit sharing; (ii) any collective bargaining agreement or other
contract or agreement with any labor union; or (iii) any employment
agreement or other similar arrangement which is not terminable upon sixty
(60) days' or less notice without penalty to Brainerd or severance
payments(s) by Brainerd. Brainerd is in compliance, to the extent required
to date, with all applicable provisions of ERISA and all regulations issued
thereunder, and no "reportable event" (as defined in Section 4043(b) or
ERISA) which has resulted or could result in any liability under ERISA has
occurred with respect to any "plan" (as defined in Section 4021 ERISA)
maintained for any employee of Brainerd. True and complete copies of the
most recent determination letters from the Internal Revenue Service with
respect to the qualification of any plan qualified or intended to qualify,
under Section 401(a) of the Internal Revenue Code of 1954, as amended
("Code"), and copies of all amendments to such plans (or descriptions of
any amendments which have not yet been adopted as formal amendments) are
attached as a part of Exhibit E. Full payment has been (or prior to the
Merger Date will be) made by Brainerd through accrual or actual payment of
all minimum amounts which Brainerd is required or expected under the terms
of each plan to have paid for the period ending on the Merger Date. At
December 31, 1994, no "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
existed with respect to any plan qualified, or intended to qualify, under
the Code, and the "current value" of assets of each such plan equals or
exceeds the "present value" of all "accrued benefits" thereunder, and, to
the best of Brainerd's knowledge, this will remain the case as of the
Merger Date (all as such terms are defined in Section 3 of ERISA).
Brainerd has not incurred any liability to the Pension Benefit Guaranty
Corporation ("PBGC"), and there has not occurred any event or condition
which presents the risk of termination of any plan by the PBGC. To the
best of Brainerd's knowledge, there has been no transaction in connection
with which Brainerd could be subject to either a civil penalty pursuant to
Section 502(i) of ERISA or a tax imposed under Section 4975 of the Code.

4.22 Illegal Payments. Neither Brainerd nor to Brainerd's
knowledge any person associated with or acting on behalf of Brainerd has
used any corporate funds for unlawful contributions, gifts, entertainment
or other unlawful expenses relating to political activity, or made any
direct or indirect unlawful payments to government officials or others from
corporate funds, or established or maintained any unlawful or unrecorded
funds.

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4.23 Accounts Receivable. The accounts receivable shown on the
Financial Statements have been collected or are collectible at the
aggregate recorded amounts thereof less applicable reserves and the
accounts receivable shown on the Financial Statements will be collectible
at the aggregate recorded amounts thereof less applicable reserves.

4.24 Environmental. Exhibit L contains true, accurate and
complete descriptions of (i) all licenses, permits, regulatory plans and
compliance schedules, together with the durations and renewal dates
thereof, which relate to Brainerd (including, without limitation, a
statement of whether each was timely filed or obtained), copies of which
have been or will be delivered to The Colonel's; and (ii) all litigation,
investigations, inquires, and other proceedings, rulings, orders or
citations pending or threatened or known to be contemplated by government
officials with respect to Brainerd, as the result of any actual or alleged
failure to comply with any requirement of federal, state, local or foreign
law, civil or common, or regulations relating to air quality, water
quality, solid waste management, hazardous or toxic substances, or the
protection of health or the environment. To Brainerd's knowledge, Exhibit
L also contains a complete list of all waste dumps and disposal, treatment
and storage sites known to Brainerd to have been used by Brainerd, and the
names of the entities known to Brainerd to have been engaged in the
handling, transportation and disposal of waste materials for Brainerd.
Except as disclosed on Exhibit L, Brainerd has received all permits and
approvals with respect to emissions, past or present, into the environment
(including solids, liquids and gases) and the proper disposal of such
materials (including solid waste material) required for the operation of
the business at past or present operating levels. Brainerd has kept all
records and made all filings required by applicable domestic and foreign,
federal, state and local laws and regulations with respect to emissions
into the environment (including solids, liquids and gases), and the proper
disposal of such materials (including solid waste materials). To
Brainerd's knowledge, none of the sites listed on Exhibit L are priority
sites or proposed priority sites in the National Contingency Plan under
CERCLA or have been designated as Superfund sites thereunder or sites to
which moneys authorized under CERCLA are being spent or applied. To the
knowledge of Brainerd, the air and water emission discharge and waste
disposal practices of Brainerd comply and have fully complied with all
applicable laws and regulations in all material respects, except as
disclosed on Exhibit L. Except as disclosed on Exhibit L, none of the
material assets of Brainerd is contaminated with any wastes or hazardous
substances.

4.25 Books and Records. Brainerd had made and kept books,
records, and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of Brainerd and
transactions are executed in accordance with management's general or
specific authorization and transactions are recorded as necessary (i) to
permit preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable to such

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statements, and (ii) to maintain accountability for assets; access to
assets is permitted only in accordance with management's general or
specific authorization; and the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

4.26 Corporate Records. The minute book of Brainerd accurately
records all actions taken by its shareholders, board of directors and
committees of its board of directors.

4.27 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby on behalf of Brainerd have been
carried on by Brainerd in such a manner as not to give rise, as the result
of any action of Brainerd, to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee or other like payment.

4.28 Truth and Completeness of Representations and Warranties.
None of the information contained in the representations and warranties of
Brainerd and Brainerd Sub set forth in this Agreement, or in any of the
certificates, schedules, lists, documents, exhibits or other instruments
delivered or to be delivered to The Colonel's as contemplated by any
provision of this Agreement, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary
to make the statements contained herein or therein not misleading. All
documents provided to The Colonel's by Brainerd and Brainerd Sub are true
and correct copies of the documents which they purport to represent. All
representations and warranties of Brainerd and Brainerd Sub contained in
this Agreement, and all information furnished by them (except as affected
by transactions contemplated by this Agreement) shall be true in all
material respects at and as of the Merger Date as if such representations
and warranties were made and such information were furnished at and as of
such time and Brainerd and Brainerd Sub shall execute and perform all
agreements and covenants required by this Agreement.

5. Representations and Warranties of The Colonel's. The Colonel's
represents and warrants to and agrees with Brainerd and Brainerd Sub as
follows:

5.1 Organization and Good Standing. The Colonel's is a
corporation duly organized and validly existing and in good standing under
the laws of the State of Michigan and has the corporate power necessary to
carry out the transactions contemplated by this Agreement.

5.2 Enforceability, Consents. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on
the part of The Colonel's and this Agreement is a valid and binding
obligation of The Colonel's, subject only to approval by The Colonel's
Shareholders in accordance with Section 6.1.3. No consent or approval by
any governmental authority, other than compliance with applicable federal

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and state securities laws, is required in connection with the execution and
delivery by The Colonel's of this Agreement, the Certificate of Merger or
the consummation by The Colonel's of the transactions contemplated hereby.

5.3 Financial Statements. The audited financial statements of
The Colonel's for the years ended December 31, 1993 and December 31, 1994,
attached as Exhibit C to this Agreement ("Financial Statements") are true,
complete and correct, and present fairly the financial position of The
Colonel's as of December 31, 1993 and December 31, 1994, and the results of
operations for the years then ended, in conformity with generally accepted
accounting principles, consistently applied.

5.4 No Conflicts. Neither the execution nor the delivery of
this Agreement, nor the performance hereof will conflict with, or result in
a breach of the terms, conditions or provisions of, or constitute a default
under, or give rise to a right of acceleration under, the corporate charter
or Bylaws of The Colonel's, or any indenture, mortgage, deed of trust, or
any other agreement or instrument to which The Colonel's is a party or by
which it is bound, or any decree, order or rule of a court or governmental
authority that is binding on The Colonel's.

5.5 Absence of Undisclosed Liabilities. Except to the extent
reflected or reserved against in the Financial Statements, The Colonel's
had no material liabilities of any nature, whether accrued, absolute,
contingent, or otherwise as of the dates of the Financial Statements. The
Colonel's represents and warrants that there is no basis for the assertion
against The Colonel's of any material liability of any nature or in any
amount not fully reflected or reserved against in the Financial Statements
as of the dates of the Financial Statements.

5.6 Adverse Changes. Since January 1, 1995, there has not been
any material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of The Colonel's.

5.7 Capital Stock of The Colonel's. The authorized capital
stock of The Colonel's consists of Ten Million (10,000,000) shares of
Common Stock, Ten Cents ($0.10) par value, Six Million Twenty-One Thousand
(6,021,000) shares of which have been duly authorized and validly issued
and are outstanding, fully paid, and nonassessable, and One Million
(1,000,000) shares of preferred stock, One Dollar ($1.00) par value, of
which no shares have been issued. No other class of capital stock of The
Colonel's is authorized or outstanding.

5.8 Rights to Purchase Capital Stock. There is no right,
subscription, warrant, call, preemptive right, option, or other agreement
of any kind to purchase or otherwise to receive from The Colonel's or be
issued any shares of the capital stock of The Colonel's, and there is no
outstanding security of any kind convertible into such capital stock.

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5.9 Absence of Claims. Except as set forth in the Proxy
Statement there are no claims, suits, actions, injunctions, orders, decrees,
proceedings or investigations of a material nature entered, pending or
threatened against or involving The Colonel's in any court or before any
governmental agency, nor is there any basis for any such claim, suit or
proceeding.

5.10 Certain Employment Matters. There are no strikes,
slowdowns, stoppages, organizational efforts, or other labor disputes
pending or threatened against The Colonel's. The Colonel's is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is
not engaged in any unfair labor practice. No key employee of The
Colonel's, having annual base compensation exceeding $50,000 has notified
The Colonel's of his or her intention to terminate employment in advance of
scheduled retirement and, The Colonel's does not have reason to anticipate
the resignation of any key employee as a result of the transactions
contemplated in this Agreement.

5.11 Tax Matters. The Colonel's has filed all federal, state,
and local tax returns required to be filed as of the date of this Agreement
and will continue to file all such returns through the Merger Date. All
taxes, charges, penalties or fees imposed, due or levied by or for any
governmental agency against The Colonel's including but not limited to all
federal, state or other governmental tax returns which have been filed, for
the years ended December 31, 1994, 1993, and 1992 or which are, or will be
required to be field for the period January 1, 1995 through the Merger
Date, have been paid in full or adequately provided for and are otherwise
reflected in the Financial Statements of The Colonel's. No extension of
time for the assessment of deficiencies for any such taxes, charges, or
fees is in effect, and, to the best of The Colonel's knowledge, there is no
unassessed tax deficiency proposed or threatened against The Colonel's.
All moneys required to be withheld by The Colonel's from employees for
income taxes, Social Security and unemployment insurance taxes have been
collected or withheld, and either paid to the respective governmental
agencies or set aside in accounts for such purpose, or properly reserved
against.

5.12 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by The Colonel's
in such manner as not to give rise, as the result of any action of The
Colonel's, to any valid claim against any of the parties to this Agreement
for a brokerage commission, finder's fee or other like payment.

5.13 Truth and Completeness of Representations and Warranties.
None of the information contained in the representations and warranties of
The Colonel's set forth in this Agreement, or in any of the certificates,
schedules, lists, documents, exhibits or other instruments delivered or to
be delivered to Brainerd or Brainerd Sub as contemplated by any provision
of this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to
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make the statements contained herein or therein not misleading. All
documents provided to Brainerd or Brainerd Sub by The Colonel's are true
and correct copies of the documents which they purport to represent. All
representations and warranties of The Colonel's contained in this
Agreement, and all information furnished by it (except as affected by
transactions contemplated by this Agreement) shall be true in all material
respects at and as of the Merger Date as if such representations and
warranties were made and such information was furnished at and as of such
time and The Colonel's shall execute and perform all agreements and
covenants required by this Agreement.

6. Conditions Precedent.

6.1 Conditions Precedent to Obligations of The Colonel's. The
obligations of The Colonel's under this Agreement are, at the option of The
Colonel's, subject to the satisfaction of the following conditions on or
before the Merger Date:

6.1.1 Renewal of Representations and Warranties. The
representations and warranties of Brainerd and Brainerd Sub herein
shall have been true and correct in all material respects when made,
and, in addition, shall be true and correct in all material respects
on and as of the Merger Date with the same force and effect as though
made on and as of the Merger Date, except as affected by the
transactions contemplated hereby.

6.1.2 Performance of Covenants. Brainerd and Brainerd
Sub shall have in all material respects performed all obligations and
agreements and complied with all covenants and conditions contained in
this Agreement to be performed and complied with by them or either of
them.

6.1.3 Required Approvals. All necessary corporate
action on the part of the directors and shareholders of Brainerd and
Brainerd Sub approving and adopting this Agreement shall have been
taken. Additionally, this Agreement shall have received the requisite
approval of the Shareholders of The Colonel's pursuant to the Michigan
Business Corporation Act.

6.1.4 Approval of Related Transactions. The
Shareholders of Brainerd shall approve in accordance with the
Minnesota Business Corporation Act: (i) the change in the state of
incorporation of Brainerd from Minnesota to Michigan and the adoption
of new articles of incorporation as set forth in Proposal II of the
Proxy Statement (the "Reincorporation"); and (ii) the transfer
of assets and liabilities associated with the Brainerd International
Raceway to Brainerd International Raceway, Inc., a wholly owned
subsidiary of Brainerd as set forth in Proposal III of the
Proxy Statement. The Reincorporation of Brainerd shall have
been completed prior to or simultaneously with the merger contemplated
in this Agreement.
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6.1.5 Opinion of Counsel. The Colonel's shall have
received a satisfactory opinion of counsel dated as of the Merger Date
substantially to the effect set forth in Section 7.3.

6.1.6 Required Consents. To the extent that any
material lease, contract or agreement to which Brainerd or Brainerd
Sub is a party shall require the consent of any other person or entity
(including governmental entities) to the merger and any other
transaction provided for herein, such consent shall have been
obtained; provided, however, that Brainerd or Brainerd Sub shall not
make, as a condition for the obtaining of any such consent, any
agreements or undertakings not approved by The Colonel's. To the
extent that any material loan agreement, lease, contract or other
agreement to which Brainerd or Brainerd Sub is a party shall require
the consent of any other person or entity to the merger and any other
transaction provided for herein, such consent shall have been
obtained.

6.1.7 Environmental Matters. The Colonel's shall have
received a completed Environmental and Industrial Health Review
Preliminary Questionnaire (the "Questionnaire"), in a form provided by
The Colonel's, and The Colonel's shall be satisfied with the contents
and disclosures set forth in the Questionnaire. Additionally,
Brainerd shall have provided The Colonel's and its agents access to
the properties and records of Brainerd for the purpose of conducting
such environmental assessments of Brainerd's properties as The
Colonel's may deem necessary or appropriate. Any environmental
assessments requested by The Colonel's shall be at the sole expense of
The Colonel's and shall not unreasonably interfere with the ongoing
business operations of Brainerd. The Colonel's shall be satisfied in
its sole judgment with the results of any environmental assessments of
Brainerd's properties conducted at the request of The Colonel's.

6.1.8 Disclosures. The parties acknowledge that this
Agreement is being executed prior to the completion by The Colonel's
of its financial and other due diligence and prior to the completion
by Brainerd and Brainerd Sub and the delivery to The Colonel's of the
Disclosure Schedule and the documents and information associated
therewith. Brainerd and Brainerd Sub will fully cooperate with The
Colonel's in completing its financial and other due diligence. The
completed Disclosure Schedule and ancillary documents and information
will be furnished to The Colonel's promptly and no later than thirty
(30) days prior to the Merger Date. The Colonel's shall be satisfied
with the content of all exhibits, schedules, information, and
materials including the Disclosure Schedule, and that the results of
The Colonel's examination of the business, condition, and future
prospects (financial and otherwise) of Brainerd, including without
limitation the value of Brainerd's assets, did not disclose items or
events materially adverse to Brainerd.

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6.1.9 Absence of Adverse Changes. No material adverse
change in the business, properties or financial condition of Brainerd
or Brainerd Sub shall have occurred.

6.1.10 Proceedings. No action or proceeding by any
governmental agency or third party shall have been instituted or
threatened which would enjoin, restrain or prohibit, or might result
in substantial damages in respect of this Agreement or the
consummation of the transactions contemplated by this Agreement, which
would in the reasonable judgment of The Colonel's make it inadvisable
to consummate such transactions, and no court order shall have been
entered in any action or proceeding instituted by any other party
which enjoins, restrains or prohibits or seeks to enjoin, restrain or
prohibit this Agreement or consummation of the transactions
contemplated by this Agreement.

6.1.11 Documentation. All proceedings taken by Brainerd and
Brainerd Sub and all instruments executed and delivered by Brainerd
and Brainerd Sub on or prior to the Merger Date in connection with the
transactions herein contemplated shall be satisfactory, in all
reasonable respects, in form and substance to The Colonel's and its
counsel.

6.2 Conditions Precedent to Obligations of Brainerd and Brainerd
Sub. The obligations of Brainerd and Brainerd Sub under this Agreement
are, at the option of Brainerd, subject to the satisfaction of the
following conditions on or before the Merger Date:

6.2.1 Renewal of Representations and Warranties. The
representations and warranties of The Colonel's herein contained shall
have been true and correct in all material respects when made and, in
addition, shall be true and correct in all material respects on and as
of the Merger Date with the same force and effect as though made on
and as of the Merger Date, except as affected by the transactions
contemplated hereby.

6.2.2 Performance of Covenants. The Colonel's shall
have in all material respects performed all obligations and agreements
and complied with all covenants and conditions contained in this
Agreement to be performed and complied with by it.

6.2.3 Required Approvals. All necessary corporate
action on the part of the directors and Shareholders of The Colonel's
approving and adopting this Agreement shall have been taken. The
Agreement shall have been approved by both Shareholders of The
Colonel's such that neither Shareholder of The Colonel's will be
entitled to exercise any dissenter's rights under Michigan law with
respect to the transactions contemplated in this Agreement.
Additionally, this Agreement shall have received the requisite
approval of the shareholders of Brainerd pursuant to the Minnesota
Business Corporation Act.
-14-

6.2.4 Approval of Related Transactions. The
Shareholders of Brainerd shall approve in accordance with the
Minnesota Business Corporation Act: (i) the change in the state of
incorporation of Brainerd from Minnesota to Michigan and the adoption
of new articles of incorporation as set forth in Proposal II of the
Proxy Statement (the "Reincorporation"); and (ii) the transfer
of assets and liabilities associated with the Brainerd International
Raceway to Brainerd International Raceway, Inc., a wholly owned
subsidiary of Brainerd as set forth in Proposal III of the
Proxy Statement. The Reincorporation of Brainerd shall have
been completed prior to or simultaneously with the merger contemplated
in this Agreement.

6.2.5 Opinion of Counsel. Brainerd shall have received
a satisfactory opinion of counsel dated as of the Merger Date
substantially to the effect set forth in Section 8.4 herein.

6.2.6 Absence of Adverse Changes. No material adverse
change in the business, properties or financial condition of The
Colonel's shall have occurred.

6.2.7 Proceedings. No action or proceeding by any
governmental agency or third party shall have been instituted or
threatened which would enjoin, restrain or prohibit, or might result
in substantial damages in respect of this Agreement or the
transactions contemplated by this Agreement, and which would in the
reasonable judgment of Brainerd make it inadvisable to consummate such
transactions, and no court order, decree, or injunction shall have
been entered in any action or proceeding instituted by any other party
which enjoins, restrains or prohibits or seeks to enjoin, restrain or
prohibit this Agreement or consummation of the transactions
contemplated by this Agreement.

6.2.8 Documentation. All proceedings taken by The
Colonel's and all instruments executed and delivered by The Colonel's
on or before the Merger Date in connection with the transactions
herein contemplated shall be satisfactory, in all reasonable respects,
in form and substance to Brainerd and Brainerd's counsel.

7. Delivery of Documents and Property. In addition to those items
which elsewhere in this Agreement are required to be acknowledged,
executed, delivered, or exchanged between the parties, the following items
have been, or shall be, executed, delivered, or exchanged as described
below:

7.1 Stock Certificates. Certificates representing all of the
issued and outstanding shares of the capital stock of The Colonel's, duly
endorsed in blank and accompanied by irrevocable stock powers, also
endorsed in blank and represented by Shareholders as sufficient to transfer
and assign to Brainerd good and marketable title to all such stock, free

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and clear of all liens, encumbrances, equities and claims, shall be
delivered by the Shareholders to Brainerd in exchange for the Shares of
Brainerd Common Stock issuable to Shareholders in accordance with
Section 3.

7.2 Secretary's Certificate. A certificate or certificates
dated as of the Merger Date, signed by the Secretary of Brainerd, shall be
delivered to The Colonel's, setting forth (i) the authorized, outstanding
and unissued capital stock of Brainerd; (ii) the names and addresses of the
holders (of record and beneficially) of such authorized and outstanding
stock, and the number of shares owned by each; (iii) the names and
addresses of all directors and officers of Brainerd, and (iv) the names of
the officers authorized to execute and deliver the documents and related
instruments deliverable hereunder.

7.3 Opinion of Brainerd's Counsel. An opinion of Frommelt &
Eide, Ltd., counsel to Brainerd and Brainerd Sub, will be delivered to The
Colonel's, dated as of the Merger Date, to the effect that:

7.3.1 Brainerd is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Minnesota; and Brainerd Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan.

7.3.2 The execution and delivery of this Agreement to The
Colonel's and the transactions provided for herein have been duly
authorized by the Board of Directors and shareholders of Brainerd in
accordance with its Articles of Incorporation and Bylaws and by the
Board of Directors and shareholder of Brainerd Sub in accordance with
its Articles of Incorporation and Bylaws;

7.3.3 This Agreement constitutes a binding obligation of
Brainerd and Brainerd Sub, enforceable in accordance with its terms.

7.3.4 All of the Shares to be issued to the Shareholders
pursuant to the Merger, have been duly authorized and, upon exchange
pursuant to the terms of this Agreement, such shares of Brainerd
Common Stock will be validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof;

7.3.5 Except as specifically may be disclosed in the
opinion, the execution and delivery by Brainerd of this Agreement, and
consummation of the transactions contemplated herein, do not, to the
knowledge of such counsel after making reasonable inquiry of Brainerd
with respect thereto, constitute a default (or give rise to a right of
termination, cancellation or acceleration) under any of the terms,
conditions, or provisions of any note, mortgage, indenture, license,
agreement or any other instrument or obligation to which Brainerd or
Brainerd Sub is a party or violate any court order, writ, injunction

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or decree applicable to Brainerd or Brainerd Sub or any of their
properties or assets;

7.4 Opinion of The Colonel's. An opinion of Warner Norcross &
Judd LLP, counsel to The Colonel's, will be delivered to Brainerd and
Brainerd Sub, dated as of the Merger Date, to the effect that:

7.4.1 The Colonel's is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Michigan;

7.4.2 The execution and delivery of this Agreement to
Brainerd and Brainerd Sub and the transactions provided for herein
have been duly authorized by the Board of Directors and Shareholders
of The Colonel's in accordance with its Articles of Incorporation and
Bylaws;

7.4.3 This Agreement constitutes a binding obligation of
The Colonel's, enforceable in accordance with its terms.

7.4.4 Except as specifically may be disclosed in the
opinion, the execution and delivery by The Colonel's of this
Agreement, and consummation of the transactions contemplated herein,
do not, to the knowledge of such counsel after making reasonable
inquiry of The Colonel's with respect thereto, constitute a default
(or give rise to a right of termination, cancellation or acceleration)
under any of the terms, conditions, or provisions of any note,
mortgage, indenture, license, agreement or any other instrument or
obligation to which The Colonel's is a party or violate any court
order, writ, injunction or decree applicable to The Colonel's or any
of its properties or assets;

8. Conduct of Business by Brainerd to Merger Date. During the
period from the date of this Agreement to the Merger Date, except as may be
specifically anticipated by this Agreement, Brainerd will continue to
conduct its operations according to its ordinary and usual course of
business and to maintain its records and books of account in a manner that
fairly and correctly reflects its income, expenses and liabilities in
accordance with generally accepted accounting principles consistently
applied. Brainerd warrants that during such period Brainerd will, or
except as elsewhere provided in this Agreement:

8.1 Corporate Charter. Make no change in its corporate
charter;

8.2 Listing. Maintain the listing of shares of Brainerd Common
Stock on the NASDAQ Small-Cap Market and remain subject to and comply with
the reporting and other requirements of the Securities Exchange Act of
1934;

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8.3 Capital Stock. Not (i) issue any shares of any class of
its capital stock; (ii) enter into any contract, or grant any option,
warrant or right, calling for the issuance of any such shares; or
(iii) create or issue any securities convertible into any such shares, or
convertible into securities in turn so convertible, or enter into any
contract, or grant any option, warrant or right, calling for the issuance
of any such convertible securities.

8.4 Obligations. Pay or incur any obligation or liability,
absolute or contingent, other than current liabilities incurred or paid in
the ordinary and usual course of business;

8.5 Indebtedness. Incur any indebtedness for borrowed money
(except for endorsements, for collection or deposit, of negotiable
instruments received in the ordinary and usual course of business), assume,
guarantee, endorse or otherwise become responsible for the obligations of
any other individual, firm or corporation, other than in the ordinary
course of business, or make any loans or advances to any individual, firm
or corporation.

8.6 Distributions. Declare or pay any dividends or make any
payment or distribution to any shareholder as such, issue any capital stock
or purchase or otherwise acquire for value any of its outstanding capital
stock or grant options, warrants or rights to purchase any shares of its
capital stock;

8.7 Encumbrances. Mortgage, pledge or subject to lien or other
encumbrance any of its properties or assets;

8.8 Disposition of Assets. Except as disclosed in this
Agreement or the exhibits hereto, sell or transfer any of its properties or
assets except in the ordinary and usual course of business or cancel,
release or assign any indebtedness owed to it or any claims held by it;

8.9 Capital Investments. Make any investment of a capital
nature either by the purchase of stock or securities, contributions to
capital, property transfers or otherwise, or by the purchase of any
property or assets of any other individual, firm or corporation, other than
such investments in individual amounts not in excess of $10,000 and in the
ordinary course of business;

8.10 Agreements. Except as disclosed in this Agreement, make
any material change in its insurance coverage, licensing, or contracts for
the promotion of events or the purchase or sale of any materials, products,
supplies or services other than such contracts incurred in the ordinary and
usual course of business, or any lease, or any other agreement or contract
except in the ordinary and usual course of business;

8.11 Compensation. Except for bonuses and salary adjustments
paid or accrued in a manner consistent with prior practices, increase the

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compensation of any of its officers or employees, or pay any bonuses, or
pay or agree to pay any amended or new pension or retirement allowance to
any of such officers or employees, or commit itself to any pension,
retirement, or profit sharing plan or agreement or employment agreement
with or for the benefit of any officer, employee, or other person.

8.12 Best Efforts of Brainerd to Obtain Consents. Brainerd shall
use its best efforts to obtain promptly all consents and authorizations of
third parties, to make all filings, and to give all notices to third
parties which may be necessary and reasonably required in order to effect,
or in connection with, the transactions contemplated by this Agreement.

9. Access. During the period from the date of this Agreement until
the Merger Date, Brainerd and Brainerd Sub shall, to the extent possible,
cause The Colonel's to be given reasonable access during customary business
hours to the buildings, offices, records, files, books of account, and
other records applicable to the business for the purpose of conducting an
investigation of Brainerd's financial condition, liabilities, contracts,
business operations, property, litigation and all other matters relating to
its business, properties and assets through Brainerd's employees,
attorneys, independent accountants and other professional consultants
involved in the transaction. Brainerd agrees to assist The Colonel's in
making such investigation and shall cause the employees and other
representatives of Brainerd to be available to The Colonel's for personal
interviews and all such other purposes set forth in this Section. Such
investigation shall be conducted in a manner that does not unreasonably
interfere with the normal operations and employee relationships of
Brainerd. During such investigation, The Colonel's shall have the right to
make copies of such records, files and other materials as it may reasonably
deem advisable, provided, however, that such copying shall be done in a
manner that does not unreasonably disrupt the normal operations of
Brainerd. If this Agreement is not consummated, The Colonel's and its
representatives shall treat all information obtained in such investigation,
and not otherwise known to The Colonel's or already in the public domain,
as confidential. In such event, all copies of any materials supplied to
The Colonel's will be destroyed and The Colonel's will use its best efforts
to obliterate any proprietary information of Brainerd incorporated in
materials prepared by The Colonel's.

10. Actions After Closing. Each party to this Agreement shall, at
the request of another, execute and deliver such documents, instruments,
certificates, notices or other further assurances as the requesting party
shall reasonably require as necessary or desirable to effect complete
consummation of this Agreement.

11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
delivered if delivered in person or if sent by first class and certified
mail:

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11.1 If to The Colonel's, to

The Colonel's, Inc.
620 South Platt Road
Milan, Michigan 48160
Attention: Jeffrey A. Chimovitz

11.2 If to Brainerd or Brainerd Sub, to

Brainerd International, Inc.
17113 Minnetonka Boulevard
Minnetonka, Minnesota 55345
Attention: Richard L. Roe

12. Assignability; Successors and Assigns. This Agreement is not
assignable except by operation of law. This Agreement shall be binding
upon and shall inure to the benefit of the undersigned parties and their
respective successors and permitted assigns; nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any
rights or remedies under or by reason of this Agreement.

13. Abandonment. The merger may be terminated and abandoned:

13.1 At any time until the Merger Date by mutual agreement.

13.2 By Brainerd and Brainerd Sub, on or before the Merger
Date, if any of the conditions provided in Section 6.2 shall not have been
satisfied, complied with or performed in any material respect, or become
impossible to satisfy, comply with or perform for reasons beyond the
control of Brainerd and Brainerd Sub and Brainerd and Brainerd Sub shall
not have waived such failure of satisfaction, noncompliance or
nonperformance.

13.3 By The Colonel's, on or before the Merger Date, if any of
the conditions provided in Section 6.1 shall not have been satisfied,
complied with or performed in any material respect, or become impossible to
satisfy, comply with or perform for reasons beyond the control of The
Colonel's, and The Colonel's shall not have waived such failure of
satisfaction, noncompliance or nonperformance.

13.4 By either party, if during or after its investigation of
the business operations or assets of the other party, it shall have
determined in good faith that certain events or conditions discovered in
such investigation or occurring after the date hereof have materially and
adversely affected or will materially and adversely affect the condition
(financial or otherwise), operations, or business prospects of the other
party.

13.5 Automatically, at the option of either Brainerd or The
Colonel's, if the Closing does not occur on or before December 30, 1995,
unless such date is extended by mutual written agreement of the parties.
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13.6 If the merger is abandoned pursuant to this Section 13,
this Agreement shall forthwith become wholly void and of no effect without
liability on the part of any party to this Agreement or its directors or
officers, and Brainerd and The Colonel's shall each pay its own fees and
expenses incident to the negotiation, preparation and execution of this
Agreement and the obtaining of the necessary approvals thereof, including
fees and expenses of counsel, accountants, brokers, agents and other
experts and shall return to the other party all documents and materials,
and all copies thereof, delivered to or obtained by it hereunder or in
connection herewith.

14. Entire Agreement. This document, together with all exhibits,
which are hereby incorporated by reference, represents the entire agreement
of the parties with respect to matters addressed herein, and no other prior
written or oral representation or understanding of the parties shall have
any further force or effect. Capitalized terms used in the exhibits which
are not defined therein but which are defined herein shall have the
meanings ascribed to them in this Agreement.

15. Survival of Covenants, Representations and Warranties. All
covenants, representations and warranties made by either party to this
Agreement shall be deemed made for the purpose of inducing the other party
to enter into this Agreement and shall be deemed to have been relied upon
by such other party. The covenants, representations and warranties of the
parties are made only to and for the benefit of the other parties and shall
not create or vest rights in other persons.

16. Expenses. Brainerd, Brainerd Sub and The Colonel's shall pay
their own respective expenses, costs, and fees (including, without
limitation, attorneys' and accountants' fees) incurred in connection with
the negotiation, preparation, execution, and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement.

17. Amendment and Waiver. This Agreement may be amended, modified,
superseded, or canceled and any of the terms, covenants, representations,
warranties, or conditions of this Agreement may be waived only by a written
instrument executed by all the parties hereto, or, in the case of a waiver,
by or on behalf of the party waiving compliance. Following approval of
this Agreement by Shareholders of The Colonel's, no amendment shall be made
to this Agreement that changes the amount of type of the Merger
Consideration payable to the Shareholders, without the approval of the
Shareholders. The failure of any party at any time to require performance
of any provision of this Agreement shall not affect the right of that party
at a later time to enforce the same. No waiver by any party of any
condition or of any breach of any term, covenant, representation, or
warranty contained in this Agreement, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of the
condition or of any breach of the term, covenant, representation, or
warranty or any other term, covenant, representation, or warranty set forth
in this Agreement.

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18. Severability. Any provision, or clause thereof, of this
Agreement that shall be found to be contrary to Michigan law or otherwise
unenforceable shall not affect the remaining terms of this Agreement, which
shall be construed as if the unenforceable provision, or clause thereof,
were absent from this Agreement.

19. Headings. The headings of the sections and subsections of this
Agreement have been inserted for convenience of reference only and shall
not restrict or otherwise modify any of the terms or provisions of this
Agreement.

20. Disclosure on Exhibits. Any matter disclosed on any exhibit to
this Agreement shall also be deemed to be sufficiently disclosed on any
other exhibit hereto as such matter may be applicable to such other
exhibit.

21. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan as applicable to
contracts made and to be performed in the State of Michigan.

IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the day and year first above written.

ATTEST: THE COLONEL'S, INC.

By ___________________________ By ______________________________________
Donald J. Williamson
Secretary Its President
"The Colonel's"

ATTEST: BRAINERD INTERNATIONAL, INC.

By ___________________________ By ______________________________________
Gary Moore
Secretary Its Chairman and Chief Executive
Officer
"Brainerd"

ATTEST: BRAINERD MERGER CORPORATION

By ___________________________ By ____________________________________
Gary Moore
Secretary Its President
"Brainerd Sub"

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CENTURY CAPITAL
Investment Banking - Financial Advisory Services
2049 Century Park East Suite 4080
Los Angeles, CA 90067
(310) 772-0733
Fax (310) 772-0139

January 3, 1995

To The Board of Directors of
Brainerd International, Inc.
17113 Minnetonka Blvd. Ste 214
Minnetonka, MN 55345

Gentlemen:

You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the holders of outstanding shares of
Common Stock, par value $0.01 per share (the "Common Stock"), of Brainerd
International, Inc. ("Company"), of the consideration to be received in
connection with a proposed merger of The Colonel's, a Michigan corporation
("Target"), with and into a subsidiary of Company to be formed, all as more
completely described below as the "Transaction". The Opinion does not
address the Company's underlying business decision to effect the
Transaction.

The Transaction
We have been advised by the Board of Company that Company is considering a
business proposal that calls for merger of Target with and into a wholly
owned subsidiary of Company to be formed, and that on such date, of 100% of
Target's outstanding common stock, Donald and Patsy Williamson ("Holders"),
would receive from Company 23,500,000 shares of Company Common Stock, par
value $0.01 per share (the "New Shares") in exchange for their Target
shares, and that Company would take such other action consistent with the
terms set forth in the Letter of Proposal attached hereto as Exhibit "A".

We have been further advised by the Company that after giving effect to the
issuance of the New Shares, Holders will own aggregate voting interests in
Company of 99.21%, including the shares of Company Common Stock that
Holders owned prior to the Transaction. In connection with this opinion, we
have made such reviews, analyses and inquiries as we have deemed necessary
and appropriate under the circumstances. Among other things, we have:

1. Reviewed Company's historical and publicly filed documents, including
Annual Report for 1992, Form 10-K for 1993, Forms 10-Q for 1993 and 1994,
and Report on Form 8-K filed for event of September 12, 1994, as well as
Company prepared interim financial statements, projections and analyses
made available to us;

2. Reviewed copies of Company's 1994 Budget Forecast, undated;

3. Spoke with senior executives and members of the Board of Company to
discuss the operations, financial condition, future prospects and projected
operations and performance of Company as they relate to Company and the
proposed Transaction;

4. Reviewed Target's historical financial information, including audited
financial statements for fiscal years ending December 31, 1991, 1992, and
1993, as well as Target prepared interim financial statements, projections
and analyses made available to us;

5. Spoke with senior executives, representatives of, and members of the
Board of Target to discuss the operations financial condition, future
prospects and projected operations and performance of Target as they relate
to Target and the proposed Transaction;

6. Reviewed the Letter of Proposed Transaction from Company to us dated
December 24, 1994;

7. Reviewed the Proposed Letter of Intent dated December __, 1995 (not
finalized) between Company and Target which relates to the Transaction;

8. Reviewed the historical market prices and trading volume for the
Company's publicly traded securities;

9. Reviewed certain other publicly available financial data for certain
companies that we deem comparable to the Company or Target or which possess
similar characteristics from a market perspective, and publicly available
prices and premiums paid in other transactions that we considered similar
to the Transaction;

10. Conducted such other due diligence as we have deemed appropriate. We
have relied upon and assumed, without independent verification, that the
general forecasts and business plans provided to us by each of Company and
Target have been reasonably prepared and reflect the best currently
available estimates of the future financial results and condition of the
Company and Target, each on a stand alone basis. We assume that each
Company is in accord with all applicable laws and regulations. We also
assumed that all information that is material to each of Company and Target
has been delivered to us in writing and is accurate in all material regards
to enable us to render the opinion herein. We have not been requested to,
and did not, solicit third party indications of interest in acquiring all
or any part of the Company or Target. Furthermore, we have not negotiated
the Transaction or advised you with respect to any alternatives.

We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company or Target and do not
assume any responsibility" with respect to such information. We have not
made any physical inspection or independent appraisal of any of the
properties or assets of the Company or Target. Our opinion is therefore
necessarily based upon the accuracy and completeness of all of the data
provided by the Company and Target and on the business, economic, market
and other conditions as they exist, and can be evaluated by us on the date
of this letter. Additionally, we express no opinion on the ultimate effect
of any pending litigation or regulatory matters involving Target or the
potential effect thereof on its financial condition or prospects.

Based upon the foregoing, and in reliance thereon, it is our opinion that
at November 30, 1994, the consideration to be received by the Company and,
indirectly, by the public stockholders of the Company in connection with
the Transaction is fair to them from a financial point of view.

Sincerely,

/s/ Century Capital
Century Capital
Los Angeles, California

APPENDIX C

MINNESOTA STATUTES ANNOTATED
CORPORATIONS
CHAPTER 302A. BUSINESS CORPORATIONS
SHARES; SHAREHOLDERS

302A.471. Rights of dissenting shareholders

Subdivision 1. Actions creating rights. A shareholder of a corporation
may dissent from, and obtain payment for the fair value of the
shareholder's shares in the event of, any of the following corporate
actions:

(a) An amendment of the articles that materially and adversely affects
the rights or preferences of the shares of the dissenting shareholder in
that it:

(1) alters or abolishes a preferential right of the shares;

(2) creates, alters, or abolishes a right in respect of the redemption
of the shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;

(3) alters or abolishes a preemptive fight of the holder of the shares
to acquire shares, securities other than shares, or rights to purchase
shares or securities other than shares;

(4) excludes or limits the right of a shareholder to vote on a matter,
or to cumulate votes, except as the right may be excluded or limited
through the authorization or issuance of securities of an existing or new
class or series with similar or different voting rights; except that an
amendment to the articles of an issuing public corporation that provides
that section 302A.671 does not apply to a control share acquisition does
not give risk to the right to obtain payment under this section;

(b) A sale, lease, transfer, or other disposition of all or
substantially all of the property and assets of the corporation, but not
including a transaction permitted without shareholder approval in section
302A.661, subdivision 1, or a disposition in dissolution described in
section 302A.725, subdivision 2, or a disposition pursuant to an order of a
court, or a disposition for cash on terms requiring that all or
substantially all of the net proceeds of disposition be distributed to the
shareholders in accordance with their respective interests within one year
after the date of disposition;

(c) A plan of merger, whether under this chapter or under chapter
322B, to which the corporation is a party, except as provided in
subdivision 3;

(d) A plan of exchange, whether under this chapter or under chapter
322B, to which the corporation is a party as the corporation whose shares

will be acquired by the acquiring corporation, if the shares of the
shareholder are entitled to be voted on the plan; or

(e) Any other corporate action taken pursuant to a shareholder vote
with respect to which the articles, the bylaws, or a resolution approved by
the board directs that dissenting shareholders may obtain payment for their
shares.

Subd 2. Beneficial owners. (a) A shareholder shall not assert
dissenters' rights as to less than all of the shares registered in the name
of the shareholder, unless the shareholder dissents with respect to all the
shares that are beneficially owned by another person but registered in the
name of the shareholder and discloses the name and address of each
beneficial owner on whose behalf the shareholder dissents. In that event,
the rights of the dissenter shall be determined as if the shares as to
which the shareholder has dissented and the other shares were registered in
names of different shareholders.

(b) The beneficial owner of shares who is not the shareholder may
assert dissenters' rights with respect to shares held on behalf of the
beneficial owner, and shall be treated as a dissenting shareholder under
the terms of this section and section 302A.473, if the beneficial owner
submits to the corporation at the time of or before the assertion of the
rights a written consent of the shareholder.

Subd. 3. Rights not to apply. Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain
payment under this section does not apply to a shareholder of the surviving
corporation in a merger, if the shares of the shareholder are not entitled
to be voted on the merger.

Subd. 4. Other rights. The shareholders of a corporation who have a
right under this section to obtain payment for their shares do not have a
right at law or in equity to have a corporate action described in
subdivision 1 set aside or rescinded, except when the corporate action is
fraudulent with regard to the complaining shareholder or the corporation.

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MINNESOTA STATUTES ANNOTATED
CORPORATIONS
CHAPTER 302A. BUSINESS CORPORATIONS
SHARES; SHAREHOLDERS

302A.473. Procedures for asserting dissenters' rights

Subdivision 1. Definitions. (a) For purposes of this section, the
terms defined in this subdivision have the meanings given them.

(b) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action referred to in section 302A.471, subdivision 1
or the successor by merger of that issuer.

(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.

(d) "Interest" means interest commencing five days after the effective
date of the corporate action referred to in section 302A.471, subdivision
1, up to and including the date of payment, calculated at the rate provided
in section 549.09 for interest on verdicts and judgments.

Subd. 2. Notice of action. If a corporation calls a shareholder
meeting at which any action described in section 302A.471, subdivision 1 is
to be voted upon, the notice of the meeting shall inform each shareholder
of the right to dissent and shall include a copy of section 3022A.471 and
this section and a brief description of the procedure to be followed under
these
sections.

Subd. 3. Notice of dissent. If the proposed action must be approved by
the shareholders, a shareholder who wishes to exercise dissenters' rights
must file with the corporation before the vote on the proposed action a
written notice of intent to demand the fair value of the shares owned by
the shareholder and must not vote the shares in favor of the proposed
action.

Subd. 4. Notice of procedure; deposit of shares. (a) After the
proposed action has been approved by the board and, if necessary, the
shareholders, the corporation shall send to all shareholders who have
complied with subdivision 3 and to all shareholders entitled to dissent if
no shareholder vote was required, a notice that contains:

(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date by
which they must be received;

-3-

(2) Any restrictions on transfer of uncertificated shares that will
apply after the demand for payment is received;

(3) A form to be used to certify the date on which the shareholder, or
the beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and

(4) A copy of section 302A.471 and this section and a brief
description of the procedures to be followed under these sections.

(b) In order to receive the fair value of the shares, a dissenting
shareholder must demand payment and deposit certificated shares or comply
with any restrictions on transfer of uncertificated shares within 30 days
after the notice required by paragraph (a) was given, but the dissenter
retains all other rights of a shareholder until the proposed action takes
effect.

Subd. 5. Payment; return of shares. (a) After the corporate action
takes effect, or after the corporation receives a valid demand for payment,
whichever is later, the corporation shall remit to each dissenting
shareholder who has complied with subdivisions 3 and 4 the amount the
corporation estimates to be the fair value of the shares, plus interest,
accompanied by:

(1) The corporation's closing balance sheet and statement of income
for a fiscal year ending not more than 16 months before the effective date
of the corporate action, together with the latest available interim
financial statements;

(2) An estimate by the corporation of the fair value of the shares and
a brief description of the method used to reach the estimate; and

(3) A copy of section 302A.471 and this section, and a brief descrip-
tion of the procedure to be followed in demanding supplemental payment.

(b) The corporation may withhold the remittance described in paragraph
(a) from a person who was not a shareholder on the date the action
dissented from was first announced to the public or who is dissenting on
behalf of a person who was not a beneficial owner on that date. If the
dissenter has complied with subdivisions 3 and 4, the corporation shall
forward to dissenter the materials described in paragraph (a), a statement
of the reason for withholding the remittance, and an offer to pay to the
dissenter the amount listed in the materials if the dissenter agrees to
accept that amount in full satisfaction. The dissenter may decline the
offer and demand payment under subdivision 6. Failure to do so entitles the
dissenter only to the amount offered. If the dissenter makes demand,
subdivisions 7 and 8 apply.

(c) If the corporation fails to remit payment within 60 days of the
deposit of certificates or the imposition of transfer restrictions on

-4-

uncertificated shares, it shall return all deposited certificates and

cancel all transfer restrictions. However, the corporation may again give
notice under subdivision 4 and require deposit or restrict transfer at a
later time.

Subd. 6. Supplemental payment; demand. If a dissenter believes that
the amount remitted under subdivision 5 is less than the fair value of the
shares plus interest, the dissenter may give written notice to the
corporation of the dissenter's own estimate of the fair value of the
shares, plus interest, within 30 days after the corporation mails the
remittance under subdivision 5, and demand payment of the difference.
Otherwise, a dissenter is entitled only to the amount remitted by the
corporation.

Subd. 7. Petition; determination. If the corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand,
either pay to the dissenter the amount demanded or agreed to by the
dissenter after discussion with the corporation or file in court a petition
requesting that the court determine the fair value of the shares, plus
interest. The petition shall be filed in the county in which the
registered office of the corporation is located, except that a surviving
foreign corporation that receives a demand relating to the shares of a
constituent domestic corporation shall file the petition in the county in
this state in which the last registered office of the constituent
corporation was located. The petition shall name as parties all dissenters
who have demanded payment under subdivision 6 and who have not reached
agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under
the rules of civil procedure. Nonresidents of this state may be served by
registered or certified mail or by publication as provided by law. Except
as otherwise provided, the rules of civil procedure apply to this
proceeding. The jurisdiction of the court is plenary and exclusive. The
court may appoint appraisers, with powers and authorities the court deems
proper, to receive evidence on and recommend the amount of the fair value
of the shares. The court shall determine whether the shareholder or
shareholders in question have fully complied with the requirements of this
section, and shall determine the fair value of the shares, taking into
account any and all factors the court finds relevant, computed by any
method or combination of methods that the court, in its discretion, sees
fit to use, whether or not used by the corporation or by a dissenter. The
fair value of the shares as determined by the court is binding on all
shareholders, wherever located. A dissenter is entitled to judgment in cash
for the amount by which the fair value of the shares as determined by the
court, plus interest, exceeds the amount, if any, remitted under
subdivision 5, but shall not be liable to the corporation for the amount,
if any, by which the amount, if any, remitted to the dissenter under
subdivision 5 exceeds the fair value of the shares as determined by the
court, plus interest.

-5-

Subd. 8. Costs; fees; expenses. (a) The court shall determine the
costs and expenses of a proceeding under subdivision 7, including the
reasonable expenses and compensation of any appraisers appointed by the
court, and shall assess those costs and expenses against the corporation,
except that the court may assess part or all of those costs and expenses
against a dissenter whose action in demanding payment under subdivision 6
is found to be arbitrary, vexatious, or not in good faith.

(b) If the court finds that the corporation has failed to comply
substantially with this section, the court may assess all fees and expenses
of any experts or attorneys as the court deems equitable. These fees and
expenses may also be assessed against a person who has acted arbitrarily,
vexatiously, or not in good faith in bringing the proceeding, and may be
awarded to a party injured by those actions.

(c) The court may award, in its discretion, fees and expenses to an
attorney for the dissenters out of the amount awarded to the dissenters, if
any.

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APPENDIX D

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"),
dated as of October __, 1995, is entered into between Brainerd International,
Inc., a Minnesota corporation ("Brainerd"), and The Colonel's Holdings,
Inc., a Michigan corporation ("The Colonel's Holdings"). Brainerd and The
Colonel's Holdings are sometimes collectively referred to as the
"Constituent Corporations."

RECITALS:

Brainerd is a corporation duly organized and existing under the
laws of the State of Minnesota;

The Colonel's Holdings is or will be a corporation duly organized
and existing under the laws of the State of Michigan;

On the date of this Agreement, Brainerd has authority to issue
ten million (10,000,000) shares of voting Common Stock, $0.01 par value
(the "Brainerd Common Stock"), of which six hundred and seventy-seven
thousand eight hundred and thirty (677,830) shares are validly issued and
outstanding and fully paid and nonassessable;

On the date of this Agreement, The Colonel's Holdings has or will
have authority to issue thirty-five million (35,000,000) shares of Common
Stock, $0.01 par value ("The Colonel's Holdings Common Stock"), of which
one hundred (100) shares are or will be validly issued and outstanding and
owned by Brainerd and has or will have authority to issue five million
(5,000,000) shares of Preferred Stock;

The respective Boards of Directors of Brainerd and The Colonel's
Holdings have determined that it is advisable and in the best interests of
each of such corporations that Brainerd merge with and into The Colonel's
Holdings upon the terms and subject to the conditions set forth in the
Agreement for the purpose of effecting the change of the state of
incorporation of Brainerd from Minnesota to Michigan;

The Boards of Directors of Brainerd and The Colonels' have, by
resolutions duly adopted, approved this Agreement;

Brainerd has approved this Agreement as the sole shareholder of
The Colonel's Holdings;

The Board of Directors of Brainerd has directed that this
Agreement be submitted to a vote of its shareholders at a shareholder
meeting to be held on June 15, 1995, or at any and all postponements and
adjournments thereof;

NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained in this Agreement, Brainerd and The Colonel's Holdings
hereby agree as follows:

1. Merger. Brainerd shall be merged with and into The
Colonel's Holdings (the "Merger"), and The Colonel's Holdings shall be the
surviving corporation (hereinafter sometimes referred to as the "Surviving
Corporation"). Subject to Section 12 of this Agreement, appropriate
documents necessary to effectuate a merger shall be filed with the
Secretary of State of the State of Minnesota and the Corporation and
Securities Bureau of the State of Michigan and the Merger shall become
effective at the time provided by applicable law (the "Effective Time").

2. Governing documents. The Articles of Incorporation of The
Colonel's Holdings, as in effect immediately prior to the Merger, shall be
the Articles of Incorporation of the Surviving Corporation without change
or amendment until thereafter amended in accordance with the provisions
thereof and applicable law, and the Bylaws of The Colonel's Holdings, as in
effect immediately prior to the Merger, shall be the Bylaws of the
Surviving Corporation without change or amendment until thereafter amended
in accordance with the provisions thereof and applicable law.

3. Officers and Directors. The persons who are the officers
and directors of Brainerd immediately prior to the Effective Time shall,
after the Effective Time, be the officers and directors of the Surviving
Corporation, without change until their successors have been duly elected
and qualified in accordance with the Articles of Incorporation and Bylaws
of the Surviving Corporation.

4. Succession. At the Effective Time, the separate corporate
existence of Brainerd shall cease, and The Colonel's Holdings shall possess
all the rights, privileges, powers, and franchises of a public and private
nature and be subject to all the restrictions, disabilities, and duties of
each of the Constituent Corporations, the rights, privileges, powers, and
franchises of each of the Constituent Corporations, and all property, real,
personal, and mixed, and all debts due to each of the Constituent
Corporations on whatever account, as well as for stock subscriptions as all
other things in action, or belonging to each of the Constituent
Corporations, shall be vested in the Surviving Corporation, as provided in
Section 724 of the Michigan Business Corporation Act and Section 302A.641
of the Minnesota Business Corporation Act.

All property, rights, privileges, powers and franchises, and all
and every other interest shall thereafter be as effectually the property of
the Surviving Corporation as they were of the respective Constituent
Corporations, and the title to any real estate vested by deed or otherwise,
in either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger, but all rights of creditors and all liens
upon any property of Brainerd shall be preserved unimpaired.

-2-

To the extent permitted by law, any claim existing or action or
proceeding pending by or against either of the Constituent Corporations may
be prosecuted as if the Merger had not taken place.

All debts, liabilities, and duties of the Constituent
Corporations shall, at the Effective Time, attach to the Surviving
Corporation and may be enforced against it to the same extent as if such
debt, liabilities, and duties had been incurred or contracted by it.

All corporate acts, plans, policies, agreements, arrangements,
approvals, and authorizations of Brainerd, its shareholders, Board of
Directors and committees thereof, officers, and agents, which were valid
and effective immediately before the Effective Time, shall be taken for all
purposes as the acts, plans, policies, agreements, arrangements, approvals,
and authorizations of the Surviving Corporation and shall be as effective
and binding thereon as the same were with respect to Brainerd.

The employees and agents of Brainerd shall become the employees
and agents of the Surviving Corporation and continue to be entitled to the
same rights and benefits which they enjoyed as agents and employees of
Brainerd. The requirements of any plans or agreements of Brainerd
involving the issuance or purchase by Brainerd of certain shares of its
capital stock shall be satisfied by the issuance or purchase of like
number of shares of the Surviving Corporation.

5. Further Assurances. From time to time, as and when required
by the Surviving Corporation or by its successors or assigns, there shall
be executed and delivered on behalf of Brainerd such deeds and other
instruments, and there shall be taken or caused to be taken by it all such
further and other action, as shall be appropriate, advisable or necessary
in order to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation the title to and possession of all property,
interests, assets, rights, privileges, immunities, powers, franchises, and
authority of Brainerd, and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Surviving Corporation are
fully authorized in the name and on behalf of Brainerd or otherwise, to
take any and all such action and to execute and deliver any and all such
deeds and other instruments.

6. Conversion of Shares. At the effective time, by virtue of
the Merger and without any action on the part of the holder thereof:

(a) Each share of Brainerd Common Stock issued and
outstanding immediately prior to the Effective Time shall be changed and
converted into and shall be the right to receive one fully paid and
nonassessable share of The Colonel's Holdings Common Stock; and

(b) All shares of The Colonel's Holdings Common Stock
issued and outstanding in the name of Brainerd shall be cancelled and

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retired and resume the status of authorized and unissued shares of The
Colonel's Holdings Common Stock, and no shares of The Colonel's Holdings
Common Stock or securities of The Colonel's Holdings shall be issued in
respect thereof.

7. Employee Option and Benefit Plans. Each option or other
right, if any, to purchase or otherwise acquire shares of Brainerd Common
Stock granted under any employee option or benefit plan of Brainerd
(collectively, the "Plans") which is outstanding at the Effective Time
shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become an option or right to acquire
(and The Colonel's Holdings hereby assumes the obligation to deliver) the
same number of shares of The Colonel's Holdings Common Stock at the same
price per share, and upon the same terms and subject to the same
conditions, as set forth in each of such Plans as in effect at the
Effective Time. The same number of shares of The Colonel's Holdings Common
Stock shall be reserved for purposes of such Plans as is equal to the
number of shares of Brainerd Common Stock so reserved as of the Effective
Time.

The Colonel's Holdings hereby assumes, as of the Effective
Time, (i) the Plans and all obligations of Brainerd under the Plans,
including the outstanding options or awards or portions thereof granted
pursuant to the Plans, and (ii) all obligations of Brainerd under all other
benefit plans in effect as of the Effective Time with respect to which
employee rights or accrued benefits are outstanding as of the Effective
Time.

8. Conditions to Merger. The consummation of the Merger and
other transactions provided for in this Agreement is subject to the
satisfaction of the following conditions prior to the Effective Time:

(a) Shareholder Approval. The Merger shall have received
the requisite approval of the holders of the Brainerd Common Stock pursuant
to the Minnesota Business Corporation Act; and

(b) Listing. The Colonel's Holdings Common Stock to be
issued or reserved for issuance shall be approved for trading on the NASDAQ
Small-Cap Market system.

9. Stock Certificates. At and after the Effective Time, all
of the outstanding certificates which immediately prior to the Effective
Time represented shares of Brainerd Common Stock shall be deemed for all
purposes to evidence ownership of, and to represent, shares of The
Colonel's Holdings Common Stock into which the shares of Brainerd Common
Stock, formerly represented by such certificates, have been converted as
provided for in this Agreement. At and after the Effective Time,
outstanding warrants and options to purchase shares of Brainerd, if any,
will be converted and changed into options or warrants, as applicable, to
purchase shares of The Colonel's Holdings Common Stock at a ratio of one

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share of Brainerd Common Stock to one share of The Colonel's Holdings
Common Stock.

At and after the Effective Time, it will not be necessary for
Brainerd shareholders to exchange their existing stock certificates for
stock certificates of The Colonel's Holdings.

10. Amendment. The parties hereto, by mutual consent of their
respective Boards of Directors, may amend, modify, or supplement this
Agreement prior to the Effective Time; PROVIDED, HOWEVER, that no amendment
shall be made subsequent to the adoption of this Agreement by the
shareholders of Brainerd which changes this Agreement in a way which, in
the judgment of the Board of Directors of Brainerd, would have a material
adverse effect on the shareholders of Brainerd or that changes the
consideration payable to the shareholders of Brainerd, unless such
amendment is approved by such shareholders.

11. Deferral. Consummation of the transactions herein provided
for may be deferred by the Board of Directors of Brainerd for a reasonable
period of time if the Board of Directors determines that such deferral
would be in the best interests of Brainerd and its shareholders.

12. Termination. This Agreement may be terminated and the
Merger and other transactions provided for in this Agreement abandoned at
any time prior to the Effective Time, whether before or after approval of
this Agreement by the shareholders of Brainerd, by action of the Board of
Directors of Brainerd, if the Board of Directors determines that the
consummation of the transactions provided for in this Agreement would not,
for any reason, be in the best interests of Brainerd and its shareholders.

13. Counterparts. This Agreement may be executed in one or more
identical counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together constitute
but one agreement.

14. Descriptive Headings. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Michigan.

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IN WITNESS WHEREOF, Brainerd and The Colonel's Holdings have
caused this Agreement to be executed and delivered as of the date first
written above.

THE COLONEL'S HOLDINGS, INC. BRAINERD INTERNATIONAL, INC.
a Michigan corporation a Minnesota corporation

By: ________________________ By: ____________________________
Gary Moore Gary Moore
Its President Its Chairman and Chief
Executive Officer

APPENDIX E

ARTICLES OF INCORPORATION

THE COLONEL'S HOLDINGS, INC.

ARTICLE I
NAME

The name of the corporation is The Colonel's Holdings, Inc.

ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT

The address of the Corporation's registered office in the State
of Michigan is 620 South Platt Road, Milan, Michigan 48160. The name of
its registered agent at such address is Jeffrey A. Chimovitz.

ARTICLE III
PURPOSES

The nature of the business or purpose to be conducted or promoted
by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Act of
Michigan.

ARTICLE IV
CAPITAL STOCK

The total number of shares of stock which the Corporation shall
have authority to issue is 35,000,000 shares of Common Stock, each with a
par value of $0.01, and 5,000,000 shares of Preferred Stock, each with a
par value of $0.01. Preferred Shares may be issued in series, each series
being composed of such number of shares and having such dividend,
liquidation, voting, conversion, redemption and other rights, if any, as
the Board of Directors may determine from time to time by resolution.

ARTICLE V
INCORPORATOR

The name and mailing address of the incorporator is Jeffrey A.
Chimovitz, 620 South Platt Road, Milan, Michigan 48160.

ARTICLE VI
DURATION

The Corporation is to have perpetual existence.

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ARTICLE VII
BOARD OF DIRECTORS; NUMBER; CLASSIFICATION; VACANCIES

(a) The number of directors constituting the entire Board
shall be not less than five (5) nor more than fifteen (15) as fixed from
time to time by vote of a majority of the entire Board, provided, however,
that the number of directors shall not be reduced so as to shorten the term
of any director at the time in office. Each director shall be the record
owner of one or more shares of Common Stock of the Corporation.

(b) The Board of Directors shall be divided into three
classes, as nearly equal in numbers as the then total number of directors
constituting the entire Board permits with the term of office of one class
expiring each year. At the annual meeting of shareholders in June, 1995,
or the adjournment thereof, directors of the first class shall be elected
to hold office for a term expiring at the next annual meeting, directors of
the second class shall be elected to hold office for a term expiring at the
second succeeding annual meeting, and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding annual
meeting.

(c) Any vacancies in the Board or Directors for any reason,
and any directorships resulting from any increase in the number of
directors, may be filled only by the Board of Directors, acting by a
majority of the directors then in office, although less than a quorum, and
any directors so chosen shall hold office until the next election of the
class for which such directors shall have been chosen and until their
successors shall be elected and qualified. Subject to the foregoing, at
each annual meeting of shareholders the successors to the class of
directors whose term shall then expire shall be elected to hold office for
a term expiring at the third succeeding annual meeting. Notwithstanding
the foregoing, if the holders of any class or series of Preferred Stock are
entitled to elect one or more directors to the exclusion of other
shareholders, vacancies of that class or series may be filled only by
majority vote of the directors elected by that class or series then in
office, whether or not a quorum, or by the holders of that class or series.

ARTICLE VIII
BOARD AUTHORITY

In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:

To make, alter or repeal the Bylaws of the Corporation.

To adopt resolutions to issue shares of Preferred Stock, in
such amounts and series, and with such dividend, liquidation, voting,
conversion, redemption and other rights as shall be set forth in the
resolution, and to execute, acknowledge, and file a certificate setting
forth a copy of such resolution(s) and the number of shares of stock of

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such class or series as to which the resolution(s) apply, pursuant to
Michigan law. Upon filings, the certificate shall constitute an amendment
to these Articles of Incorporation.

To authorize and cause to be executed mortgages and liens
upon the real property of the Corporation.

To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.

By a majority vote of the whole Board, to designate one or
more committees, each committee to consist of one or more directors of the
Corporation. The Board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member
at any meeting of the committee. The Bylaws may provide that in the
absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the Board of Directors, or in the
Bylaws of the Corporation, shall have and may exercise all of the powers
and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Articles of Incorporation, adopting an agreement of merger or
consolidation, recommending to the shareholders the sale, lease or exchange
of all or substantially all of the Corporation's property and assets,
recommending to the shareholders a dissolution of the corporation or a
revocation of a dissolution, or amending the Bylaws of the Corporation;
and, unless the resolution or Bylaws expressly so provide, no such
committee shall have the power or authority to declare a dividend or
distribution or to authorize the issuance of stock.

When and as authorized by the shareholders in accordance
with law, to sell, lease or exchange all or substantially all of the
property and assets of the corporation, including its good will and its
corporate franchises, upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or property
including shares of stock in, and/or securities of, any other corporation
or corporations, as its Board of Directors shall deem expedient or for the
best interest of the corporation.

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ARTICLE IX
ELECTION OF DIRECTORS; LOCATION OF MEETINGS, BOOKS, AND OFFICES

Elections of the directors need not be by written ballot unless
the Bylaws of the Corporation shall so provide. If the Bylaws so provide,
the shareholders and directors shall have power to hold meetings, to keep
the books, documents and papers of the Corporation outside the state of
Michigan, and to have one or more offices within or without the state of
Michigan, at such places as may be from time to time designated by the
Bylaws or by resolution of the shareholders or directors, except as
otherwise required by the laws of Michigan. Notwithstanding the foregoing,
neither the directors nor the shareholders shall have power to keep the
original and duplicate stock ledger outside the state of Michigan.

ARTICLE X
REMOVAL

One or more directors may be removed by the shareholders, with or
without cause. Notwithstanding the foregoing if the holders of any class
or series of Preferred Stock are entitled to elect one or more directors to
the exclusion of the other shareholders, the directors elected by that
class or series may be removed only by the holders of that class or series.

ARTICLE XI
CREDITOR ARRANGEMENTS

When a compromise or plan of reorganization of this Corporation
is proposed between this Corporation and its creditors or any class of them
or between this Corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of this
Corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the corporation may order a meeting of the creditors
or class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization to be
summoned in such manner as the court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
or of the shareholders or class of shareholders to be affected by the
proposed compromise or arrangement or reorganization, agree to a compromise
or arrangement or a reorganization of this Corporation as consequence of
compromise or arrangement, the compromise or arrangement and the
reorganization, if sanctioned by the court to which the application has
been made, shall be binding on all the creditors or class of creditors, or
on all the shareholders or class of shareholders and also on this
Corporation.

-4-

ARTICLE XII
AMENDMENT OF ARTICLES OF INCORPORATION

The Corporation reserves the right to amend, alter, change or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by the statutes of Michigan, and all rights and powers
conferred on directors and shareholders prescribed herein are subject to
this reservation; provided, however, that this Article XII, as well as the
following provisions of these Articles of Incorporation, may not be
amended, altered, changed or repealed, nor may any provision inconsistent
with the following provisions be adopted, without the approval of at least
66 2/3 percent of the total voting power of all shares of stock entitled to
vote, voting together as a single class at an annual or special meeting of
shareholders: (i) Article IX, relating to the election of directors, (ii)
Article X, relating to the removal of directors, (iii) Article XIII,
relating to the power of shareholders to alter the Corporation's Bylaws,
and (iv) Article XIV, relating to the right of the right of shareholders to
call a special shareholder meeting without approval of the Board of
Directors.

ARTICLE XIII
AMENDMENT OF BYLAWS

The Bylaws of the Corporation may be repealed, altered, amended
or rescinded at any time by the Board of Directors without shareholder
approval. The Bylaws of the Corporation may not be amended by the
shareholders of the Corporation except upon the affirmative vote of at
least 66 2/3 percent of the total voting power of all shares of stock
entitled to vote in the election of directors, voting together as a single
class at an annual or special meeting of shareholders.

ARTICLE XIV
SPECIAL SHAREHOLDER MEETINGS

Special Shareholder meetings may be called by the Board of
Directors or a committee of the Board authorized to call special
shareholder meetings. The shareholders of the Corporation shall not have
the power or ability to call a special shareholder meeting, except as
provided in the Bylaws or under the Michigan Business Corporation Act.

ARTICLE XV
SHAREHOLDER ACTION WITHOUT A MEETING

Any action required or permitted to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without
notice, and without a vote, provided that (i) written consents setting
forth the action taken are signed by the holders of record of outstanding
stock having not less than the minimum number of votes that would be

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necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and (ii) the Board of
Directors ratifies the action to be taken in advance.

ARTICLE XVI
OPTION OUT OF MICHIGAN BUSINESS COMBINATION STATUTE

The Corporation shall not be governed by Section 780 of the
Michigan Business Corporation Act.

ARTICLE XVII
OPTION OUT OF MICHIGAN
CONTROL SHARE ACQUISITION STATUTE

The corporation shall not be governed by Sections 790 through 799
of the Michigan Business Corporation Act.

ARTICLE XVIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Corporation shall indemnify any director of the Corporation
who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding by reason of
the fact that he or she is or was a director or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by the Michigan Business Corporation Act in the
absence of rights granted under Articles of Incorporation, Bylaws, or a
contractual agreement. The Corporation may further indemnify directors,
and may indemnify persons who are not directors, as authorized by Bylaws,
resolution of the Board of Directors, or contractual agreement authorized
by the Board of Directors. Changes in these Articles or in the Bylaws
reducing the scope of indemnification shall not apply to actions or
omissions occurring before such change.

ARTICLE XIX
LIMITATION ON DIRECTOR LIABILITY

A director of the Corporation shall not be personally liable to
the Corporation or its shareholders for monetary damages for a breach of
fiduciary duty as a director, except that a director's liability is not
limited for:

(1) a breach of the director's duty of loyalty to the
Corporation or its shareholders;

(2) acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of law;

-6-
(3) a violation of Section 551(1) of the Michigan Business
Corporation Act, which section relates to the making of unauthorized
dividends, distributions, or loans; or

(4) a transaction from which the director derived an improper
personal benefit.

If the Michigan Business Corporation Act is amended to further
eliminate or limit the liability of a director, then a director of the
Corporation (in addition to the circumstances in which a director is not
personally liable as set forth in the preceding paragraph) shall, to the
fullest extent permitted by the Michigan Business Corporation Act, as so
amended, not be liable to the Corporation or its shareholders. No
amendment to or modification or repeal of this Article shall increase the
liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment,
modification or repeal.

This Article applies only to acts or omissions and to breaches of
fiduciary duty occurring after this Article became effective.

ARTICLE XX
DENIAL OF PREEMPTIVE RIGHTS

The holders of the Common Stock shall have no preemptive rights
to subscribe for any shares of any class of stock of the Corporation
whether now or hereafter authorized.

The undersigned incorporator, for the purpose of forming a
corporation pursuant to the Michigan Business Corporation Act, has executed
these Articles of Incorporation this ___ day of ______________, 1995.

___________________________________
Jeffrey A. Chimovitz, Incorporator

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APPENDIX F

THE COLONEL'S HOLDINGS, INC.

(a Michigan Corporation)

BYLAWS

THE COLONEL'S HOLDINGS, INC.

(a Michigan Corporation)

BYLAWS

TABLE OF CONTENTS

Page

ARTICLE I - OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1. Registered Office and Registered Agent . . . . . . . . . . 1
Section 2. Other Offices. . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II - MEETINGS OF SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . 1

Section 1. Times and Places of Meetings . . . . . . . . . . . . . . . 1
Section 2. Annual Meetings. . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Notice of Annual Meeting . . . . . . . . . . . . . . . . . 1
Section 4. Business Conducted at Annual Meetings. . . . . . . . . . . 2
Section 5. Shareholder List . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Special Meetings. . . . . . . . . . . . . . . . . . . . . 3
Section 7. Notice of Special Meetings . . . . . . . . . . . . . . . . 3
Section 8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Vote Required. . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Voting Rights. . . . . . . . . . . . . . . . . . . . . . . 4
Section 11. Chairman and Secretary of the Meetings . . . . . . . . . . 4
Section 12. Conduct of Meetings. . . . . . . . . . . . . . . . . . . . 4
Section 13. Inspectors of Election . . . . . . . . . . . . . . . . . . 5
Section 14. Shareholder Action Without Meeting . . . . . . . . . . . . 5

ARTICLE III - DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 1. (a) Number of Directors. . . . . . . . . . . . . . . . . . 5
(b) Classification . . . . . . . . . . . . . . . . . . . . 6
(c) Nominations of Director Candidates.. . . . . . . . . . 6
(d) Vacancies and Newly Created Directorships. . . . . . . 7
(e) Removal . . . . . . . . . . . . . . . . . . . . . . . 7

Section 2. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Compensation of Directors. . . . . . . . . . . . . . . . . 7
Section 4. Places of Meetings . . . . . . . . . . . . . . . . . . . . 8

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Section 5. First Meeting of Newly Elected Board . . . . . . . . . . . 8
Section 6. Regular Meetings . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Special Meetings . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Purpose Need Not be Stated . . . . . . . . . . . . . . . . 8
Section 9. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Action Without a Meeting . . . . . . . . . . . . . . . . . 8
Section 11. Meeting by Telephone or Similar Equipment. . . . . . . . . 9
Section 12. Written Notice . . . . . . . . . . . . . . . . . . . . . . 9
Section 13. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE IV - COMMITTEES OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . 9

Section 1. Executive Committee. . . . . . . . . . . . . . . . . . . . 9
Section 2. Audit Committee. . . . . . . . . . . . . . . . . . . . . .10
Section 3. Organization/Compensation Committee. . . . . . . . . . . .10
Section 4. Nominating Committee . . . . . . . . . . . . . . . . . . .10
Section 5. Finance Committee. . . . . . . . . . . . . . . . . . . . .10
Section 6. Other Committees . . . . . . . . . . . . . . . . . . . . .10
Section 7. Committee Meetings . . . . . . . . . . . . . . . . . . . .10

ARTICLE V - ADVISORY DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . .11

Section 1. Invitations to Non-Directors
to Attend Meetings of Board of Directors . . . . . . . . .11
Section 2. Designation of Persons as Advisory Directors . . . . . . .11
Section 3. Role of Advisory Directors . . . . . . . . . . . . . . . .11
Section 4. Limitation of Liability of Advisory Directors. . . . . . .11
Section 5. Compensation . . . . . . . . . . . . . . . . . . . . . . .12
Section 6. Termination of Status as Advisory Director . . . . . . . .12

ARTICLE VI - OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Section 1. (a) Central Staff. . . . . . . . . . . . . . . . . . . . .12
(b) Divisional Officers. . . . . . . . . . . . . . . . . .12
Section 2. Chairman of the Board. . . . . . . . . . . . . . . . . . .12
Section 3. President. . . . . . . . . . . . . . . . . . . . . . . . .13
Section 4. Chief Executive Officer. . . . . . . . . . . . . . . . . .13
Section 5. Chief Operating Officer. . . . . . . . . . . . . . . . . .13
Section 6. Vice Presidents. . . . . . . . . . . . . . . . . . . . . .13
Section 7. Secretary. . . . . . . . . . . . . . . . . . . . . . . . .13
Section 8. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . .14
Section 9. Assistant Secretary and Assistant Treasurer. . . . . . . .14
Section 10. Other Officers . . . . . . . . . . . . . . . . . . . . . .14

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ARTICLE VII - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .14

Section 1. Indemnification in Action by Third Party . . . . . . . . .14
Section 2. Indemnification in Action by or in
Right of the Corporation . . . . . . . . . . . . . . . . .15
Section 3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 4. Authorization of Indemnification.. . . . . . . . . . . . .15
Section 5. Advances . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 6. Other Indemnification Agreements . . . . . . . . . . . . .17
Section 7. Insurance. . . . . . . . . . . . . . . . . . . . . . . . .17
Section 8. Constituent Corporation. . . . . . . . . . . . . . . . . .17
Section 9. Partial Indemnification. . . . . . . . . . . . . . . . . .17
Section 10. Savings Clause . . . . . . . . . . . . . . . . . . . . . .18
Section 11. Definitions. . . . . . . . . . . . . . . . . . . . . . . .18
Section 12. Construction . . . . . . . . . . . . . . . . . . . . . . .18

ARTICLE VIII - SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . .18

Section 1. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .18
Section 2. Subsidiary Officers Not Executive Officers . . . . . . . .19

ARTICLE IX - CERTIFICATES OF STOCK . . . . . . . . . . . . . . . . . . . . . .19

Section 1. Form . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 2. Facsimile Signature. . . . . . . . . . . . . . . . . . . .19
Section 3. Lost Certificates. . . . . . . . . . . . . . . . . . . . .19
Section 4. Transfers of Stock . . . . . . . . . . . . . . . . . . . .20
Section 5. Fixing of Record Date by Board . . . . . . . . . . . . . .20
Section 6. Provision for Record Date in the Absence
of Board Action. . . . . . . . . . . . . . . . . . . . . .20
Section 7. Adjournments . . . . . . . . . . . . . . . . . . . . . . .21
Section 8. Registered Shareholders. . . . . . . . . . . . . . . . . .21

ARTICLE X - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .21

Section 1. Dividends. . . . . . . . . . . . . . . . . . . . . . . . .21
Section 2. Reserves . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 3. Checks . . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 4. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . .22
Section 5. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 6. Written Waiver of Notice . . . . . . . . . . . . . . . . .22

ARTICLE XI - AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .22

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BYLAWS

THE COLONEL'S HOLDINGS, INC.

ARTICLE I

OFFICES

Section 1. Registered Office and Registered Agent. The registered
office of the Corporation shall be in the County of Monroe, State of
Michigan. The name of its registered agent at such address is 620 South
Platt Road, Milan, Michigan 48160.

Section 2. Other Offices. The Corporation may also have offices
at such places, both within and without the State of Michigan as the Board
of Directors may from time to time determine or the business of the
Corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Times and Places of Meetings. All meetings of the
shareholders shall be held, except as otherwise provided by statute or
these Bylaws, at such time and place as may be fixed from time to time by
the Board of Directors. Meetings of shareholders may be held within or
without the State of Michigan.

Section 2. Annual Meetings. Annual meetings of the shareholders
shall be held at a time and place so designated by a majority vote of the
Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may properly be brought before the
meeting.

Section 3. Notice of Annual Meeting. Written notice of the annual
meeting, specifying the date, time and location of the meeting, shall be
given personally or by mail at least ten (10) and not more than sixty (60)
days before the date of the meeting to each shareholder entitled to vote
thereat who shall have furnished a written address to the Secretary of the
Corporation for such purpose. Notice of any meeting need not be given to
any shareholder who signs a waiver of notice before or after the meeting.
Attendance of a shareholder at a meeting shall constitute a waiver of
notice, except when the shareholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the holding of
the meeting or the transaction of any business because the meeting is not
lawfully called or convened.

Section 4. Business Conducted at Annual Meetings. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at
an annual meeting of the shareholders except in accordance with the
procedures hereinafter set forth in this Section 4; PROVIDED, HOWEVER, that
nothing in this Section 4 shall be deemed to preclude discussion by any
shareholder of any business properly brought before the annual meeting in
accordance with said procedures.

At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (1) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (2) otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or (3) other-
wise properly brought before the meeting by a shareholder. In addition to
any other applicable requirements, for business to be properly brought before
an annual meeting by a shareholder, the shareholder must comply with all
applicable requirements of Securities and Exchange Commission Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended from time to
time. Any adjournment(s) or postponement(s) of the original meeting whereby the
meeting will reconvene within thirty (30) days from the original date shall be
deemed for purposes of notice to be a continuation of the original meeting and
no business may be brought before any such reconvened meeting unless timely
notice of such business was given to the Secretary of the Corporation for the
meeting as originally scheduled.

A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (i) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(ii) the name and record address of the shareholder proposing such business,
(iii) the class and/or series and number of shares of the Corporation that are
beneficially owned by the shareholder, (iv) any material interest of the share-
holder in such business, and (v) any other information as may be required by
Rule 14a-8.

For purposes of these Bylaws, notice of any shareholder meeting shall
be deemed to first be given to shareholders when disclosure of such date is
first made in a press release reported by the Dow Jones News Services, Associ-
ated Press or comparable national news service or in a document publicly filed
by the Corporation with the Securities and Exchange Commission pursuant to
Sections 13, 14, or 15(d) of the Securities Exchange Act of 1934, as amended.

Section 5. Shareholder List. The officer or agent who has charge
of the stock ledger or stock transfer books of the Corporation shall make
and certify a complete list of the shareholders entitled to vote at a
shareholders' meeting, arranged by class or series in alphabetical order,
showing the address of and the number of shares registered in the name of
each shareholder. Such list shall be produced at the meeting and be open to

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the examination of any shareholder, for any purpose germane to the meeting,
during the whole time of the meeting.

Section 6. Special Meetings.

(a) Special meetings of the shareholders for any purpose or
purposes may be called by the Board of Directors, or a committee of the
Board of Directors empowered to call special meetings. Special meetings
shall not be called by shareholders, except: (i) in accordance with Section
403 of the Michigan Business Corporation Act, or (ii) upon the approval of
the Board of Directors after a shareholder has submitted a written request
for a special meeting in accordance with (b), immediately below.

(b) A shareholder may submit a written request to the Secretary
of the Corporation to call a special meeting of shareholders, which written
request shall contain (i) a brief description of the business desired to be
brought before such special meeting and the reasons for conducting such
business at a special meeting, (ii) the name and record address of the
shareholder proposing such business, (iii) the class and/or series and
number of shares of the Corporation that are beneficially owned by the share
holder, and (iv) any material interest to the shareholder in such business.

Section 7. Notice of Special Meetings. Written notice of a special
meeting of shareholders, stating the date, time, place, and object thereof,
shall be given personally or by mail to each shareholder entitled to vote
thereat who shall have furnished a written address to the Secretary of the
Corporation for such purpose, not less than ten (10) nor more than sixty
(60) days before the date fixed for the meeting. Business transacted at any
special meeting shall be limited to the purpose or purposes stated in the
notice.

Section 8. Quorum. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business, except as otherwise provided
by statute or by the Articles of Incorporation. The shareholders present
in person or by proxy at such meeting may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave
less than a quorum. Whether or not a quorum is present, the meeting may be
adjourned by a vote of the shares present. No notice of the date, time and
place of adjourned meetings need be given, provided that the time and place
to which the meeting is adjourned is announced at the meeting and at the
adjourned meeting only business is transacted as might have been transacted
at the original meeting.

Except when the holders of a class or series of shares are entitled to
vote separately on an item of business, shares of all classes and series
entitled to vote shall be combined as a single class and series for the
purpose of determining a quorum. When the holders of a class or series of

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shares are entitled to vote separately on an item of business, shares of
that class or series entitled to cast a majority of the votes of that class
or series at a meeting constitute a quorum of that class or series at that
meeting, unless a greater or lesser quorum is provided by statute or the
Articles of Incorporation.

Section 9. Vote Required. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any question other
than the election of directors brought before such meeting, or the
amendment of the Articles of Incorporation or these Bylaws, unless the
question is one upon which by express provision of statute or of the
Articles of Incorporation a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Election of directors shall be by ballot, and directors shall be elected by
a plurality of the shares present in person or represented by proxy and
entitled to vote on the election of directors.

Section 10. Voting Rights. Except as otherwise provided by the
Articles of Incorporation or the resolution or resolutions of the Board of
Directors creating any class or series of stock, each shareholder shall at
every meeting of shareholders be entitled to one (1) vote in person or by
proxy for each share of the capital stock having voting power held by such
shareholder. A proxy shall be valid only with respect to the particular
meeting, or any adjournment or adjournments thereof, to which it
specifically pertains. No proxy shall be voted or acted upon after three
(3) years from its date, unless the proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A shareholder may
revoke any proxy which is not irrevocable by attending the meeting and
voting in person or by filing an instrument in writing revoking the proxy
or another duly executed proxy bearing a later date with the Secretary of
the Corporation.

Section 11. Chairman and Secretary of the Meetings. Meetings of the
shareholders shall be presided over by the Chairman of the Board or such
executive officer of the Corporation that he may designate, or in his
absence, by the President, or in his absence, by such officer as has been
designated by the Board of Directors, or if none of the foregoing officers
is present, by a chairman to be chosen at the meeting. The Secretary of the
Corporation, or in his absence, such officer as has been designated by the
Board of Directors, or if none of the foregoing officers is present, such
person as is chosen at the meeting by the person presiding thereat, shall
act as Secretary of the meeting.

Section 12. Conduct of Meetings. Meetings of shareholders generally
shall follow accepted rules of parliamentary procedure, subject to the
following:

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(a) The chairman of the meeting shall have absolute authority
over matters of procedure, and there shall be no appeal from the
ruling of the chairman. If, in his absolute discretion, the chairman
deems it advisable to dispense with the rules of parliamentary
procedure as to any one (1) meeting of shareholders or part thereof,
he shall so state and shall clearly state the rules under which the
meeting or appropriate part thereof shall be conducted.

(b) If disorder should arise which prevents the continuation of
the legitimate business of the meeting, the chairman may quit the
chair and announce the adjournment of the meeting. Upon his so doing,
the meeting is immediately adjourned.

(d) A resolution or motion shall be considered for vote only if
proposed by a shareholder or a duly authorized proxy in accordance
with these Bylaws and seconded by an individual who is a shareholder
or a duly authorized proxy other than the individual who proposed the
resolution or motion.

Section 13. Inspectors of Election. The Board of Directors or, if
they shall not have so acted, the chairman of the meeting, may appoint, at
or prior to any meeting of shareholders, two (2) persons (who may be employees
of the Corporation other than directors or candidates for the office of
director) to serve as inspectors of election. Such inspectors shall first take
and subscribe an oath or affirmation faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
their ability. The inspectors shall determine the number of shares outstanding
and the voting power of each, the shares represented at the meeting, the
existence of a quorum, the validity and effect of proxies, and shall receive
votes or ballots, hear and determine challenges and questions arising in
connection with the right to vote, count and tabulate votes or ballots,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders.

Section 14. Shareholder Action Without Meeting. Any action
required or permitted to be taken at an annual or special meeting of
shareholders may be taken without a meeting, without notice, and without
vote, provided that: (i) written consents setting forth the action to be
taken are signed by the holders of record of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, and (ii) such action is ratified in advance
by the Board of Directors.

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ARTICLE III

DIRECTORS

Section 1. Members of the Board of Directors of the Corporation
shall be selected, replaced, and removed as follows:

(a) Number of Directors. The number of the directors of the
Corporation shall be fixed from time to time by resolution adopted by
the affirmative vote of at least fifty percent (50%) of the entire
Board of Directors but shall not be less than five (5), nor more than
fifteen (15).

(b) Classification. The Board of Directors, other than those who
may be elected by the holders of any class or series of stock having a
preference over the common stock as to dividend or upon liquidation,
shall be divided into three (3) classes as nearly equal in number as
possible, with the term of office of one class expiring each year. At
each annual meeting of the shareholders, the successors of the class
of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of shareholders
held in the third year following the year of their election.

(i) Nominations of candidates for election for directors of
the Corporation at any meeting of shareholders called for election of
directors (an "Election Meeting") may be made by the Board of
Directors or by any shareholder entitled to vote at such Election
Meeting, as provided in (ii) and (iii), immediately below.

(ii) Nominations made by the Board of Directors shall be
made at a meeting of the Board of Directors, or by written
consent of directors in lieu of a meeting, not less than thirty
(30) days prior to the date of the Election Meeting, and such
nominations shall be reflected in the minute books of the
Corporation as of the date made. At the request of the Secretary
of the Corporation, each proposed nominee shall provide the
Corporation with such information concerning himself as is
required under the rules of the Securities and Exchange
Commissions, to be included in the Corporation's Proxy Statement
soliciting proxies for his election as a director.

(iii) Any shareholder who intends to make a nomination at
the Election Meeting shall deliver a timely notice to the
Secretary of the Corporation setting forth (A) the name, age,
business address, and residence address of each nominee proposed
in such notice; (B) the principal occupation or employment of
each such nominee; (C) the number of shares of capital stock of
the Corporation which are beneficially owned by each such
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nominee; (D) a statement that the nominee is willing to be
nominated; and (E) such other information concerning each such
nominee as would be required under the rules of the Securities
and Exchange Commission in a Proxy Statement soliciting proxies for
the election of such nominees. To be timely, a shareholder's
notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than
forty (40) days nor more than sixty (60) days prior to
the Election Meeting as originally scheduled; provided however,
that in the event that less than fifty (50)days' notice or
prior public disclosures of the date of the Election Meeting
is given or made to shareholders, notice by the shareholder
to be timely must be so received not later than the close of
business on the tenth (10th) day following the day on which
such notice of the date of the Election Meeting was mailed
or such public disclosure was made.

(iv) If the chairman of the Election Meeting determines that
a nomination was not made in accordance with the foregoing
procedures, such nomination shall be void.

(d) Vacancies and Newly Created Directorships. Subject to the
rights of the holders of any series of Serial Preferred Stock then
outstanding, any vacancy occurring in the Board of Directors caused by
resignation, removal, death, disqualification, or other incapacity,
and any newly created directorships resulting from an increase in the
number of directors, shall be filled by a majority vote of directors
then in office, whether or not a quorum. Each director chosen to fill
a newly created directorship shall hold office until the next election
of directors by the shareholders. Each director chosen to fill a
vacancy shall hold office for the unexpired term of the director whose
place he is taking. When the number of directors is changed, any newly
created or eliminated directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as possible.
No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.

Notwithstanding the foregoing, if the holders of any class or
series of Preferred Stock are entitled to elect one or more directors
to the exclusion of other shareholders, vacancies of that class or
series may be filled only by one of the following: (i) by a majority
vote of the directors elected by the holders of that class or series
then in office, whether or not those directors constitute a quorum of
the Board of Directors, or (ii) by the holders of shares of that class
or series.

(e) Removal. Subject to the rights of the holders of any class
or series of Preferred Stock, the holders of a majority of the shares
entitled to vote for the election of directors may remove one or more
of the directors with or without cause. Notwithstanding the

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foregoing, if the holders of any class or series of Preferred Stock
are entitled to elect directors to the exclusion of the other
shareholders, directors elected by such class or series shall only be
removed by a majority of the shares of such class or series.

Section 2. Powers. The business of the Corporation shall be
managed by its Board of Directors, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws directed or
required to be exercised or done by the shareholders.

Section 3. Compensation of Directors. Each director who is not a
salaried officer of the Corporation may receive as compensation for his
services in that capacity such sums and such benefits as shall from time to
time be determined by the Board of Directors, plus traveling expenses and
other expenses necessary for attendance at regular or special meetings of
the Board of Directors and committees of the board. Members of special or
standing committees may be allowed like compensation for attending
committee meetings. Nothing herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.

Section 4. Places of Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Michigan.

Section 5. First Meeting of Newly Elected Board. The first meeting
of each Board of Directors having a newly elected class of directors shall
be held following the annual meeting of shareholders, and no notice of such
meeting shall be necessary to the newly elected directors in order to
legally constitute the meeting, provided a quorum shall be present. In the
event such meeting is not held immediately following the annual meeting of
shareholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of
the Board of Directors, or as shall be specified in a written waiver signed
by all of the directors.

Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as
shall from time to time be determined by the board.

Section 7. Special Meetings. Subject to the provisions of Section
12 of this Article III, special meetings of the Board of Directors may be
called by the Chairman, Chief Executive Officer, or Secretary or by any two
(2) directors on one (1) day's notice to each director.

Section 8. Purpose Need Not be Stated. Neither the business to be
transacted at nor the purpose of any regular or special meeting of the
Board of Directors need be specified in the notice of such meeting.

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Section 9. Quorum. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business, and
the acts of a majority of the directors present at any meeting at which
there is a quorum shall be acts of the Board of Directors except as may be
otherwise specifically provided by statute or by the Articles of
Incorporation. If a quorum shall not be present at any meeting of the Board
of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until
a quorum shall be present.

Section 10. Action Without a Meeting. Unless otherwise restricted
by the Articles of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if, before or after the
action, all members of the board or of such committee, as the case may be,
consent thereto in writing and such written consent is filed with the
minutes or proceedings of the board or committee.

Section 11. Meeting by Telephone or Similar Equipment. The Board of
Directors or any committee designated by the Board of Directors may
participate in a meeting of such board or committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this section shall constitute presence in person at
such meeting.

Section 12. Written Notice. Notices to directors shall be in
writing and delivered personally or mailed to the directors at their
addresses appearing on the books of the Corporation. Notice by mail shall
be deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram or telecopy. Notwithstanding the
foregoing, notice shall also be given by telegram or telecopy if the date
of the meeting to which such notice relates is within three (3) days of the
date that such notice is given.

Section 13. Waiver of Notice. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting has not been lawfully
called or convened.

ARTICLE IV

COMMITTEES OF DIRECTORS

Section 1. Executive Committee. The Board of Directors may appoint
an Executive Committee whose membership shall consist of the Chairman
and/or President and such number of other directors (not less than four
(4)) as a majority of the entire Board of Directors may deem advisable from

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time to time to serve during the pleasure of the board. One of the members
of the committee shall be designated the chairman thereof by the Board of
Directors. The Board of Directors may also appoint directors to serve as
alternates for members of the committee in the absence or disability of
regular members. The Executive Committee shall have and may exercise the
powers of the board in the management of the business and affairs of the
Corporation, except the power to change the membership or to fill vacancies
in the board or the Committee, the power to amend, add to, rescind, or
repeal the Bylaws of the Corporation and any other powers that, under
Delaware law, may not be delegated to it by the Board of Directors. The
board shall have the power at any time to change the membership of the
Executive Committee (subject to the requirement that the Chairman and/or
the President of the Corporation be a member thereof) and to fill vacancies
in it. The Executive Committee may make rules for the conduct of its
business and may appoint such committees and assistants as it shall from
time to time deem necessary. A majority of the members of the committee
shall constitute a quorum.

Section 2. Audit Committee. The Audit Committee, if there be one,
shall cause a suitable examination of the financial records and operations
of the Corporation and its subsidiaries to be made by the Corporation. The
Audit Committee shall also recommend to the Board of Directors the
employment of independent certified public accountants to examine the
financial statements of the Corporation and its subsidiaries; and report to
the Board of Directors at least once each calendar year.

Section 3. Organization/Compensation Committee. The
Organization/Compensation Committee, if there be one, shall review the
organizational structure and the personnel policies, plans, and programs of
the Corporation, including individual salaries of executive officers, and
submit recommendations to the Chief Executive Officer and Board of
Directors. The Organization/ Compensation Committee shall also recommend to
the Board of Directors the retainer and attendance fee for non employee
directors.

Section 4. Nominating Committee. The Nominating Committee, if
there be one, shall develop and recommend to the Board of Directors
criteria for the selection of candidates for director, to seek out and
receive suggestions concerning possible candidates, to review and evaluate
the qualifications of possible candidates and to recommend to the Board of
Directors candidates for vacancies occurring from time to time and for the
slate of directors to be proposed on behalf of the Board of Directors at
the annual meeting of shareholders. The Nominating Committee will consider
nominees recommended by the shareholders, as properly submitted to the
Secretary of the Corporation.

Section 5. Finance Committee. The Finance Committee, if there be
one, shall review the capital structure and needs of the Corporation and
shall examine acquisition data and submit recommendations to the Board of

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Directors. The Finance Committee shall also review the Corporation's
employee benefit plans and insurance program.

Section 6. Other Committees. The Board of Directors may designate
such other committees as it may deem appropriate, and such committees shall
exercise the authority delegated to them. Unless the Board shall otherwise
provide, a majority of any such Committee may determine its action and fix
the time and place of its meetings. The board shall have power at anytime
to change the members of any such Committee, to fill vacancies, and to
discharge any such Committee.

Section 7. Committee Meetings. Each committee provided for above
shall meet as often as its business may require and may fix a day and time
each week or at other intervals for regular meetings, notice of which shall
not be required. Whenever the day fixed for a meeting shall fall on a
holiday, the meeting shall be held on the business day following or on such
other day as the committee may determine. Special meetings of the
committees may be called by the chairman of the committee or any two (2)
members other than the chairman, and notice thereof may be given to the
members by telephone, telegram, telecopy or letter. A majority of its
members shall constitute a quorum for the transaction of the business of
any of the committees. A record of the proceedings of each committee shall
be kept and presented to the Board of Directors.

ARTICLE V

ADVISORY DIRECTORS

Section 1. Invitations to Non-Directors to Attend Meetings of
Board of Directors. The President or the Chairman of the Board, if any,
may from time to time invite one or more non-directors to attend meetings
of the Board of Directors for the purpose of (i) consulting with the
officers and directors of the Corporation; and (ii) providing guidance (but
not direction) concerning the management and operation of the business of
the Corporation.

Section 2. Designation of Persons as Advisory Directors. To the
extent that the Board of Directors desires one or more persons to regularly
attend meetings of the Board of Directors, the Board of Directors may
confer upon any such person the honorary title of "advisory director." Any
person designated as an advisory director may be invited to attend any
meeting of the Board of Directors of this Corporation or any Committee
meeting of this Board of Directors by the President or the Chairman of the
Board, if any, without further action by this Board of Directors.

Section 3. Role of Advisory Directors. The business of the
Corporation shall remain solely under the direction of the Board of
Directors, and any persons designated as advisory directors shall not by
virtue of their designation as advisory directors or by virtue of their

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willingness to provide consultation to the Corporation be deemed to have
undertaken any duty to the Corporation or its shareholders.

Section 4. Limitation of Liability of Advisory Directors. Any
person designated as an advisory director by the Board of Directors shall
be wholly immune from liability to the Corporation and its shareholders by
reason of his service as an advisory director. If, notwithstanding the
foregoing, a claim should ever be asserted against any such advisory
director by or on behalf of the Corporation or any shareholders or
otherwise, the advisory director shall, in addition to the foregoing
limitation of liability, also be entitled to the protection of Section 18
of the Corporation's Certificate of Incorporation, Article VII of the
bylaws of this Corporation, and to the protection of any other
indemnification or limitation of liability provisions that may exist from
time to time with respect to members of the Board of Directors, either in
the Certificate of Incorporation, Bylaws, minutes, agreements, or other
documents of the Corporation or applicable law.

Section 5. Compensation. Advisory directors shall be compensated
in such manner and in such amounts as the Board of Directors shall
determine.

Section 6. Termination of Status as Advisory Director. The Board
of Directors may terminate the status as an advisory director of any person
so designated at any time without any liability or obligation to such
person whatsoever; provided, however, that the obligation of the
Corporation to indemnify the advisory director as provided in Section 4
above and as provided in any indemnification agreement between the
Corporation and the advisory director, and the obligation of the
Corporation to pay the advisory director the full amount of compensation
earned by such advisory director through the date of termination as
provided in Section 5 above, shall continue notwithstanding any termination
of status as an advisory director.

ARTICLE VI

OFFICERS

Section 1.

(a) Central Staff. The executive officers of the Corporation
shall be a President, one or more Vice Presidents, a Secretary, and a
Treasurer who shall be appointed by the Board of Directors at its
first meeting after each regular annual meeting of shareholders. The
Board of Directors may also appoint such other officers as they may
deem necessary. The dismissal of an officer, the appointment of an
officer to fill the place of one who has been dismissed or has ceased
for any reason to be an officer, the appointment of any additional
officers, and the change of an officer to a different office may be

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made by the Board of Directors at any later meeting. The board may
remove any officer from any office at any time with or without cause.
Unless removed by the board, each officer shall hold office for one
(1) year and until their respective successor shall have been elected
and qualified. Any two (2) of the above offices, except those of the
President and Vice President may be held by the same person.

(b) Divisional Officers. The Board of Directors or the Chief
Executive Officer may, as they shall deem necessary, designate certain
individuals as divisional officers. Any titles so given to divisional
officers may be withdrawn at any time with or without cause by the
Board of Directors or the Chief Executive Officer.

Section 2. Chairman of the Board. There shall be elected a
Chairman of the Board, who shall be chosen from among the directors. The
Chairman of the Board shall preside at all meetings of the Board of
Directors and shareholder meetings, and shall have such other duties and
powers as may be imposed or given by the Board of Directors.

Section 3. President. The President shall, subject to the
direction of the Board of Directors, see that all orders and resolutions of
the Board of Directors are carried into effect, and shall perform all other
duties necessary or appropriate to his office, subject, however, to his
right and the right of the directors to delegate any specific powers to any
other officer or officers of the Corporation. In the absence of the
Chairman of the Board or his designee or if no Chairman is elected, the
President shall preside at all meetings of the shareholders and at all
meetings of the Board of Directors. The President shall be an ex officio
voting member of all standing committees designated by the Board of
Directors except the Audit Committee.

Section 4. Chief Executive Officer. The Chief Executive Officer,
in addition to his duties as Chairman of the Board or President as the case
may be, shall have final authority, subject to the control of the Board of
Directors, over the general policy and business of the Corporation and
shall have the general control and management of the business and affairs
of the Corporation. The Chief Executive Officer shall have the power,
subject to the control of the Board of Directors, to appoint, suspend, or
discharge and to prescribe the duties and to fix the compensation of such
agents and employees of the Corporation, other than the officers appointed
by the board, as he may deem necessary.

Section 5. Chief Operating Officer. There may be elected a Chief
Operating Officer who shall, if elected, have general charge, control, and
supervision over the administration and operations of the Corporation and
shall have such other duties and powers as may be imposed or given by the
Board of Directors. If no Chief Operating Officer is elected, the duties
and powers of the Chief Operating Officer shall be performed by the Chief
Executive Officer.

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Section 6. Vice Presidents. The Vice President or Vice Presidents
shall perform such duties and have such powers as the Chief Executive
Officer or the Board of Directors may from time to time prescribe. The
Board of Directors may at its discretion designate one or more of the Vice
Presidents as Executive Vice Presidents or Senior Vice Presidents. Any Vice
President so designated shall have such duties and responsibilities as the
board shall prescribe.

Section 7. Secretary. The Secretary shall attend all meetings of
the shareholders, and of the Board of Directors and of the Executive
Committee, and shall preserve in the books of the Corporation true minutes
of the proceedings of all such meetings. He shall safely keep in his
custody the seal of the Corporation, if any, and shall have authority to
affix the same to all instruments where its use is required or appropriate.
He shall give all notices required or appropriate pursuant to statute,
bylaws, or resolution. He shall perform such other duties as may be
delegated to him by the Board of Directors or by the Executive Committee.

Section 8. Treasurer. The Treasurer shall have custody of all
corporate funds and securities and shall keep in books belonging to the
Corporation full and accurate accounts of all receipts and disbursements;
he shall deposit all moneys, securities, and other valuable effects in the
name of the Corporation in depositories as may be designated for that
purpose by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chief Executive
Officer and directors at the regular meetings of the board, and whenever
requested by them, an account of all his transactions as Treasurer and of
the financial condition of the Corporation. If required by the Board of
Directors, he shall deliver to the Chief Executive Officer of the
Corporation, and shall keep in force, a bond in form, amount, and with a
surety or sureties satisfactory to the Board of Directors, conditioned for
faithful performance of the duties of his office, and for restoration to
the Corporation in case of his death, resignation, retirement, or removal
from office, of all books, papers, vouchers, money, and property of
whatever kind in his possession or under his control belonging to the
Corporation.

Section 9. Assistant Secretary and Assistant Treasurer. There may
be elected an Assistant Secretary and Assistant Treasurer who shall, in the
absence, disability, or nonfeasance of the Secretary or Treasurer, perform
the duties and exercise the powers of such persons respectively.

Section 10. Other Officers. All other officers, as may from time to
time be appointed by the Board of Directors pursuant to Paragraph (a) of
Section 1 of this Article V, shall perform such duties and exercise such
authority as the Board of Directors shall prescribe. All divisional
officers, as may from time to time be appointed by the Board of Directors
or the Chief Executive Officer pursuant to Paragraph (b) of Section 1 of
this Article V, shall perform such duties and exercise such authority as
the Board of Directors or the Chief Executive Officer shall prescribe.
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ARTICLE VII

INDEMNIFICATION

Section 1. Indemnification in Action by Third Party. The
corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal (other than an action by or in
the right of the corporation) by reason of the fact that the person is or
was a director or officer of the corporation, or, is or was serving at the
request of the corporation as a director, officer, employee, agent, or
trustee of another foreign or domestic corporation, partnership, joint
venture, trust, or other enterprise, whether for profit or not for profit,
against expenses (including attorneys' fees), judgments, penalties, fines,
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit, or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation or its
shareholders, and with respect to a criminal action or proceeding, the
person had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did
not act in good faith and in a manner that the person reasonably believed
to be in or not opposed to the best interests of the corporation or its
shareholders, and with respect to a criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.

Section 2. Indemnification in Action by or in Right of the
Corporation. The corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director or officer of the corporation, or, is or was serving at the
request of the corporation as a director, officer, employee, agent, or
trustee of another foreign or domestic corporation, partnership, joint
venture, trust, or other enterprise, whether for profit or not for profit,
against expenses including attorneys' fees and amounts paid in settlement
actually and reasonably incurred by the person in connection with the
action or suit, if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of
the corporation or its shareholders. Indemnification shall not be made for
a claim, issue, or matter in which the person shall have been found liable
to the corporation except to the extent authorized by statute.

Section 3. Expenses. To the extent that a person has been
successful on the merits or otherwise in defense of an action, suit, or
proceeding referred to in Section 1 or 2 of this Article, or in defense of

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a claim, issue, or matter in the action, suit, or proceeding, the
corporation shall indemnify that person against actual and reasonable
expenses, including attorneys' fees incurred by him or her in connection
with the action, suit, or proceeding and an action, suit, or proceeding
brought to enforce the mandatory indemnification provided in this Section.

Section 4. Authorization of Indemnification.

(a) An indemnification under Sections 1 or 2 of this Article,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper
in the circumstances because he or she has met the applicable standard
of conduct set forth in Sections 1 or 2 of this Article and upon an
evaluation of the reasonableness of expenses and amounts paid in
settlement. This determination and evaluation shall be made in any of
the following ways:

(1) By a majority vote of a quorum of the Board of Directors
consisting of directors who are not parties or threatened to be
made parties to the action, suit, or proceeding.

(2) If a quorum cannot be obtained under Subsection (1) above,
by majority vote of a committee duly designated by the Board and
consisting solely of two or more directors not at the time
parties or threatened to be made parties to the action, suit, or
proceeding.

(3) By independent legal counsel in a written opinion, which
counsel shall be selected in one of the following ways:

(A) By the Board or its committee in the manner prescribed
in Subsections (1) or (2) above.

(B) If a quorum of the Board cannot be obtained under
Subsection (1) above and a committee cannot be
designated under Subsection (2) above, by the Board.

(4) By all independent directors who are not parties or
threatened to be made parties to the action, suit, or proceeding.

(5) By the shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made
parties to the action, suit, or proceeding may not be voted.

(b) In the designation of a committee under Subsection (a)(2) or
in the selection of independent legal counsel under Subsection
(a)(3)(B), all directors may participate.

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(c) If a person is entitled to indemnification under Sections 1
or 2 for a portion of expenses, including reasonable attorneys' fees,
judgments, penalties, fines, and amounts paid in settlement, but not
for the total amount, the corporation may indemnify the person for the
portion of the expenses, judgments, penalties, fines, or amounts paid
in settlement for which the person is entitled to be indemnified.

Section 5. Advances. The corporation may pay or reimburse the
reasonable expenses incurred by a director, officer, employee, or agent who
is a party or threatened to be made a party to an action, suit, or
proceeding before final disposition of the proceeding if all of the
following apply:

(a) The person furnishes the corporation a written affirmation
of the person's good faith belief that he or she has met the
applicable standard of conduct set forth in Sections 1 and 2 of this
Article.

(b) The person furnishes the corporation a written undertaking,
executed personally or on the person's behalf, to repay the advance if
it is ultimately determined that the person did not meet the standard
of conduct.

(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this
Article.

The undertaking required by Subsection (b) above must be an unlimited
general obligation of the person but need not be secured. Determinations
of payments under this Section shall be made in the manner specified in
Section 4 of this Article.

Section 6. Other Indemnification Agreements. The indemnification
or advancement of expenses provided by this Article is not exclusive of any
other rights to which a person seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of shareholders
or directors, or otherwise. The indemnification provided in Sections 1 to
6 of this Article continues as to a person who ceases to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of the person.

Section 7. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against the person and incurred
by the person in any such capacity or arising out of the person's status as
such whether or not the corporation would have power to indemnify the
person against the liability under Sections 1 to 6 of this Article.

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Section 8. Constituent Corporation. For the purposes of this
Article, references to the corporation include all constituent corporations
absorbed in a consolidation or merger and the resulting or surviving
corporation, so that a person who is or was a director or officer of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, partner, trustee, employee,
or agent of another corporation, partnership, joint venture, trust, or
other enterprise shall stand in the same position under the provisions of
this Article with respect to the resulting or surviving corporation as he
or she would if he or she had served the resulting or surviving corporation
in the same capacity.

Section 9. Partial Indemnification. If a person is entitled to
indemnification under Sections 1 or 2 of this Article for a portion of
expenses, including attorneys' fees, judgments, penalties, fines, and
amounts paid in settlement, but not for the total amount thereof, the
Corporation may indemnify the person for the portion of the expenses,
judgments, penalties, fines, or amounts paid in settlement for which the
person is entitled to be indemnified.

Section 10. Savings Clause. If this Article or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction,
the Corporation shall nevertheless indemnify each director, executive
officer, or other person whose indemnification is authorized by the Board
of Directors as to expenses, including attorneys' fees, judgments, fines,
and amounts paid in settlement with respect to any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative,
including a grand jury proceeding and an action by the Corporation, to the
full extent permitted by any applicable portion of this Article that shall
not have been invalidated or by any other applicable law.

Section 11. Definitions. For the purposes of this Article, "other
enterprises" shall include employee benefit plans; "fines" shall include
any excise taxes assessed on a person with respect to an employee benefit
plan; and "serving at the request of the Corporation" shall include any
service as a director, officer, partner, trustee, employee, or agent of the
Corporation, which imposes duties on, or involves services by the director,
officer, employee, or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be considered to have
acted in a manner "not opposed to the best interest of the Corporation or
its shareholders" as referred to in Sections 1 and 2 of this Article.

Section 12. Construction. It is the intent of this Article VI to
grant to the directors and executive officers of the Corporation (and such
other persons as the Board of Directors may designate) the broadest
indemnification permitted under the laws of the State of Delaware, as the
same may be amended from time to time, and this Article shall be liberally
construed to give effect to such intent. The Corporation further intends,

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acknowledges, and agrees that all of the Corporation's directors and
executive officers have undertaken and will undertake the performance of
their duties and obligations in reliance upon the indemnification provided
for in this Article VI, and accordingly, such rights of indemnification may
not be retroactively reduced or abolished as to any such director or
executive officer with the written consent of such person.

ARTICLE VIII

SUBSIDIARIES

Section 1. Subsidiaries. The Board of Directors, the Chief
Executive Officer, or any executive officer designated by the Board of
Directors may vote the shares of stock owned by the Corporation in any
subsidiary, whether wholly or partly owned by the Corporation, in such
manner as they may deem in the best interests of the Corporation,
including, without limitation, for the election of directors of any
subsidiary Corporation, or for any amendments to the charter or bylaws of
any such subsidiary Corporation, or for the liquidation, merger, or sale of
assets of any such subsidiary Corporation. The Board of Directors, the
Chief Executive Officer, or any executive officer designated by the Board
of Directors may cause to be elected to the Board of Directors of any such
subsidiary Corporation such persons as they shall designate, any of whom
may, but need not be, directors, executive officers, or other employees or
agents of the Corporation. The Board of Directors, the Chief Executive
Officer, or any executive officer designated by the Board of Directors may
instruct the directors of any such subsidiary Corporation as to the manner
in which they are to vote upon any issue properly coming before them as the
directors of such subsidiary Corporation, and such directors shall have no
liability to the Corporation as the result of any action taken in
accordance with such instructions.

Section 2. Subsidiary Officers Not Executive Officers. The
officers of any subsidiary Corporation, shall not, by virtue of holding
such title and position, be deemed to be executive officers of the
Corporation, nor shall any such officer of a subsidiary Corporation, unless
he shall also be a director or executive officer of the Corporation, be
entitled to have access to any files, records, or other information
relating or pertaining to the Corporation, its business and finances, or to
attend or receive the minutes of any meetings of the Board of Directors or
any committee of the Corporation, except as and to the extent expressly
authorized and permitted by the Board of Directors or the Chief Executive
Officer.

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ARTICLE IX

CERTIFICATES OF STOCK

Section 1. Form. Every holder of stock in the Corporation shall be
entitled to have a certificate in the name of the Corporation, signed by
the Chairman of the Board or the President or a Vice President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, certifying the number of shares owned by him
in the Corporation.

Section 2. Facsimile Signature. Where a certificate is signed (1)
by a transfer agent or an assistant transfer agent, or (2) by a transfer
clerk acting on behalf of the Corporation and a registrar, the signature of
any such Chairman, President, Vice President, Treasurer, Assistant
Treasurer, Secretary, or Assistant Secretary may be a facsimile. In case
any officer, transfer agent, or registrar who has signed, or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he
were such officer, transfer agent, or registrar at the date of issue.

Section 3. Lost Certificates. The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been
lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative, to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may
be made against the Corporation with respect to the certificate alleged to
have been lost or destroyed.

Section 4. Transfers of Stock. Upon surrender to the Corporation
or the transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment, or
authority to transfer, it shall be the duty of the Corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.

Section 5. Fixing of Record Date by Board. For the purpose of
determining the shareholders entitled to notice of or to vote at any
meeting of shareholders, or any adjournment thereof, or to express consent
to or dissent from any corporate action in writing without a meeting, or
for the purpose of determining shareholders entitled to receive payments of
any dividend or the distribution or allotment of any rights or evidences of
interests arising out of any change, conversion, or exchange of capital
stock, or for the purpose of any other action, the Board of Directors may

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fix, in advance, a date as the record date for any such determination of
shareholders. The record date for determining the shareholders entitled to
notice of or to vote at any meeting of shareholders shall not precede the
date upon which the resolution fixing the record date is adopted, and shall
not be more than sixty (60) nor less than ten (10) days before the date of
such meeting. The record date for determining the shareholders entitled to
consent to corporate action in writing without a meeting shall not precede
the date upon which the resolution fixing the record date is adopted, and
shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted. The record date for
determining the shareholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or the shareholders entitled
to exercise any rights in respect of any changes, conversion, or exchange
of stock, or for the purpose of any other lawful action shall not precede
the date upon which the resolution fixing the record date is adopted, and
shall not be more than sixty (60) days prior to such action. Only
shareholders of record on a record date so fixed shall be entitled to
notice of, and to vote at, such meeting or to receive payment of any
dividend or the distribution or allotment of any rights or evidences of
interests arising out of any change, conversion, or exchange of capital
stock.

Section 6. Provision for Record Date in the Absence of Board
Action. If a record date is not fixed by the Board of Directors: (a) the
record date for determination of shareholders entitled to notice of or to
vote at a meeting of shareholders shall be the close of business on the day
next preceding the day on which notice is given, or, if notice is waived,
the close of business on the day next preceding the day on which the
meeting is held; and (b) the record date for determining shareholders
entitled to express consent to corporate action in writing, without a
meeting, when no prior action by the Board of Directors is necessary, shall
be the first date on which a signed written consent is delivered to the
Corporation; and (c) the record date for determining shareholders for any
other purpose shall be the close of business on the day on which the
resolution of the board relating thereto is adopted.

Section 7. Adjournments. When a determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders has
been made as provided in this Article, the determination applies to any
adjournment of the meeting, unless the board fixes a new record date for
the adjourned meeting.

Section 8. Registered Shareholders. The Corporation shall be
entitled to recognize the exclusive rights of a person registered on its
books as the owner of shares to receive dividends, and to vote as such
owner, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.

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ARTICLE X

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Articles of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting pursuant to law. Dividends may be paid in cash, in property, or in
shares of capital stock, subject to the provisions of the Certificate of
Incorporation.

Section 2. Reserves. Before payment of any dividends, there may be
set aside out of any funds of the Corporation available for dividends such
sum or sums as the directors from time to time, in their absolute
discretion, think proper as reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property of
the Corporation, or for such other purpose as the directors shall think
conducive to the interest of the Corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.

Section 3. Checks. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.

Section 4. Fiscal Year. The fiscal year of the Corporation shall
be fixed by resolution of the Board of Directors.

Section 5. Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, and the words "Corporate Seal, Delaware." The
seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.

Section 6. Written Waiver of Notice. Whenever any notice is
required to be given under the provisions of the statutes or of the
Certificate of Incorporation or of these Bylaws, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent
thereto.

ARTICLE XI

AMENDMENTS

These Bylaws may be altered, amended, or repealed, in whole or in
part, or new Bylaws may be adopted by, the Board of Directors, provided,
however, that notice of such alteration, amendment, repeal, or adoption of
new Bylaws, be contained in the notice of such meeting of the Board of
Directors. Except as otherwise required by statute, the Articles of

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Incorporation, or these Bylaws, these Bylaws may be altered, amended, or
repealed, in whole or in part, or new Bylaws may be adopted by, the
Shareholders upon the affirmative vote of at least 66 2/3 percent of the
total voting power of all shares of stock entitled to vote, voting together
as a single class.

APPENDIX G

THE COLONEL'S HOLDINGS, INC.

1995 LONG-TERM INCENTIVE PLAN

SECTION 1

Establishment of Plan; Purpose of Plan

1.1 Establishment of Plan. The Colonel's Holdings, Inc., hereby
establishes the 1995 LONG-TERM INCENTIVE PLAN (the "Plan") for its
corporate, divisional, and Subsidiary directors, officers, and other key
employees. The Plan permits the grant and award of Stock Options, Stock
Appreciation Rights, Restricted Stock, Stock Awards, and Tax Benefit
Rights.

1.2 Purpose of Plan. The purpose of the Plan is to provide
directors, officers, and key management employees of the Company, its
divisions, and its Subsidiaries with an increased incentive to make
significant and extraordinary contributions to the long-term performance
and growth of the Company and its Subsidiaries, to join the interests of
directors, officers, and key employees with the interests of the Company's
stockholders through the opportunity for increased stock ownership, and to
attract and retain officers and key employees of exceptional ability. The
Plan is further intended to provide flexibility to the Company in
structuring long-term incentive compensation to best promote the foregoing
objectives.

SECTION 2

Definitions

The following words have the following meanings unless a
different meaning is plainly required by the context:

2.1 "Act" means the Securities Exchange Act of 1934, as amended.

2.2 "Board" means the Board of Directors of the Company.

2.3 "Change in Control" means (a) the sale, lease, exchange, or other
transfer of substantially all of the Company's assets (in one
transaction or in a series of related transactions) to, or the
merger or consolidation of the Company with, a corporation that
is not controlled by the Company; or (b) a change in control of
the Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Act; PROVIDED THAT, without limitation,
such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d)(2)

of the Act), other than a Subsidiary or any employee benefit plan
of the Company or a Subsidiary or any entity holding Common Stock
pursuant to the terms of any such employee benefit plan, is or
becomes the beneficial owner (as defined in Rule 13(d)-3 under
the Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board cease for any
reason to constitute at least a majority of the Board, unless the
election, or nomination for election by the Company's
shareholders, of each new director was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
were directors at the beginning of the period.

2.4 "Code" means the Internal Revenue Code of 1986, as amended.

2.5 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the
Plan. The Committee shall consist of at least two members of the
Board, and all of its members shall be "disinterested persons" as
defined in Rule 16b-3 under the Act.

2.6 "Common Stock" means the Common Stock of the Company, par value
$0.01 per share.

2.7 "The Company" means The Colonel's Holdings, Inc., a Michigan
corporation, and its successors and assigns.

2.8 "Incentive Award" means the award or grant of a Stock Option,
Stock Appreciation Right, Restricted Stock, Stock Award, or Tax
Benefit Right to a Participant pursuant to the Plan.

2.9 "Market Value" of any security on any given date means: (a) if
the security is listed for trading on one or more national
securities exchanges (including the NASDAQ National Market
System), the last reported sales price on the principal such
exchange on the date in question, or if such security shall not
have been traded on such principal exchange on such date, the
last reported sales price on such principal exchange on the first
day prior thereto on which such security was so traded; or (b) if
the security is not listed for trading on a national securities
exchange (including the NASDAQ National Market System) but is
traded in the over-the-counter market, the mean of highest and
lowest bid prices for such security on the date in question, or
if there are no such bid prices on the first day prior thereto on
which such prices existed; or (c) if neither (a) nor (b) is
applicable, the value as determined by any means deemed fair and
reasonable by the Committee, which determination shall be final
and binding on all parties.

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2.10 "Participant" means a corporate director or officer, divisional
officer, or other key employee of the Company, its divisions, or
its Subsidiaries who the Committee determines is eligible to
participate in the Plan and who is designated to be granted an
Incentive Award under the Plan.

2.11 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to
restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect
to shares of Common Stock covered by the same Incentive Award.

2.12 "Restricted Stock" means Common Stock awarded to a Participant
pursuant to Section 6 of the Plan.

2.13 "Retirement" means the voluntary termination of all employment
and service as a director with the Company by a Participant after
the Participant has attained 60 years of age, or age 55 with at
least five years of service, or such other age as shall be
determined by the Committee in its sole discretion or as
otherwise may be set forth in the Incentive Award agreement or
other grant document with respect to a Participant and a
particular Incentive Award.

2.14 "Stock Appreciation Right" means a right granted in connection
with a Stock Option pursuant to Section 8 of the Plan.

2.15 "Stock Award" means an award of Common Stock awarded to a
Participant pursuant to Section 7 of the Plan.

2.16 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of the
Plan, a Stock Option may be either an incentive stock option
within the meaning of Section 422(b) of the Code or a
nonqualified stock option, and the option shall be interpreted in
accordance with such intention as stated in the applicable Stock
Option Agreement.

2.17 "Subsidiary" means any corporation or other entity of which fifty
percent (50%) or more of the outstanding voting stock or voting
ownership interest is directly or indirectly owned or controlled
by the Company or by one or more Subsidiaries of the Company.

2.18 "Tax Benefit Right" means any right granted to a Participant
pursuant to Section 9 of the Plan.

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SECTION 3

Administration

3.1 Power and Authority. The Committee shall have full power and
authority to interpret the provisions of the Plan, and shall have full
power and authority to supervise the administration of the Plan. All
determinations, interpretations, and selections made by the Committee
regarding the Plan shall be final and conclusive. The Committee shall hold
its meetings at such times and places as it deems advisable. Action may be
taken by a written instrument signed by a majority of the members of the
Committee, and any action so taken shall be fully as effective as if it had
been taken at a meeting duly called and held. The Committee shall make
such rules and regulations for the conduct of its business as it deems
advisable. The members of the Committee shall not be paid any additional
fees for their services.

3.2 Grants or Awards to Participants. In accordance with and subject
to the provisions of the Plan, the Committee shall have the authority to
determine all provisions of Incentive Awards as the Committee may deem
necessary or desirable and as are consistent with the terms of the Plan,
including, without limitation, the following: (a) the employees who shall
be selected as Participants; (b) the nature and extent of the Incentive
Awards to be made to each employee (including the number of shares of
Common Stock to be subject to each Incentive Award, any exercise price, the
manner in which an Incentive Award will vest or become exercisable, and the
form of payment for the Incentive Award); (c) the time or times when
Incentive Awards will be granted to employees; (d) the duration of each
Incentive Award; and (e) the restrictions and other conditions to which
payment or vesting of Incentive Awards may be subject.

3.3 Amendments or Modifications of Awards. The Committee shall have
the authority to amend or modify the terms of any outstanding Incentive
Award granted to an employee Participant in any manner, provided that the
amended or modified terms are not prohibited by the Plan as then in effect,
including, without limitation, the authority to: (a) modify the number of
shares or other terms and conditions of an Incentive Award; (b) extend the
term of an Incentive Award; (c) accelerate the exercisability or vesting or
otherwise terminate any restrictions relating to an Incentive Award; (d)
accept the surrender of any outstanding Incentive Award; or (e) to the
extent not previously exercised or vested, authorize the grant of new
Incentive Awards in substitution for surrendered Incentive Awards.
Modification of options granted to nonemployee directors may be made only
as necessary or desirable to comply with securities or income tax law. No
such amendment or modification shall become effective without consent of
the Participant except to the extent that such amendment operates solely to
the benefit of the Participant.

3.4 Indemnification of Committee Members. Each person who is or
shall have been a member of the Committee shall be indemnified and held

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harmless by the Company from and against any cost, liability, or expense
imposed or incurred in connection with such person's or the Committee's
taking or failing to take any action under the Plan. Each such person
shall be justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.

3.5 Incentive Awards for Nonemployee Directors. Directors who are
not also employees shall receive nondiscretionary Stock Options awarded
automatically under the terms of subsection 5.5, and shall not receive
other Incentive Awards.

SECTION 4

Shares Subject to the Plan

4.1 Number of Shares. Subject to adjustment as provided in
subsection 4.2 of the Plan, a maximum of 3,000,000 shares of Common Stock
shall be available for Incentive Awards under the Plan. Such shares shall
be authorized and may be either unissued or treasury shares.

4.2 Adjustments. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, combination, exchange of shares, or any other change
in the corporate structure or shares of the Company, the number and kind of
securities subject to and reserved under the Plan, together with applicable
exercise prices, shall be appropriately adjusted. No fractional shares
shall be issued pursuant to the Plan, and any fractional shares resulting
from adjustments shall be eliminated from the respective Incentive Awards,
with an appropriate cash adjustment for the value of any Incentive Awards
eliminated. If an Incentive Award is cancelled, surrendered, modified,
exchanged for a substitute Incentive Award, or expires or terminates during
the term of the Plan but prior to the exercise or vesting of the Incentive
Award in full, the shares subject to but not delivered under such Incentive
Award shall be available for other Incentive Awards.

SECTION 5

Stock Options

5.1 Grant. A Participant may be granted one or more Stock Options
under the Plan. Stock Options shall be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. In addition, the
Committee may vary, among Participants and among Stock Options granted to
the same Participant, any and all of the terms and conditions of the Stock
Options granted under the Plan. The Committee shall have complete
discretion in determining the number of Stock Options granted to each
Participant. The Committee may designate whether or not a Stock Option is

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to be considered an incentive stock option as defined in Section 422(b) of
the Code.

5.2 Stock Option Agreements. Stock Options shall be evidenced by
Stock Option agreements containing such terms and conditions, consistent
with the provisions of the Plan, as the Committee shall from time to time
determine. Stock Options shall be subject to the terms and conditions set
forth in this Section 5.

5.3 Stock Option Price. The per share Stock Option price shall be
determined by the Committee, but shall be a price that is equal to or
higher than the par value of the Company's Common Stock; PROVIDED, HOWEVER,
that the per share Stock Option price for any shares designated as
incentive stock options shall be equal to or greater than one hundred
percent (100%) of the Market Value on the date of grant.

5.4 Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be
payable in cash or, if the Committee consents, in shares of Common Stock
(including Common Stock to be received upon a simultaneous exercise) or
other consideration substantially equivalent to cash. The time and terms
of payment may be amended with the consent of a Participant before or after
exercise of a Stock Option, but such amendment shall not reduce the Stock
Option price. The Committee may from time to time authorize payment of all
or a portion of the Stock Option price in the form of a promissory note or
installments according to such terms as the Committee may approve. The
Board may restrict or suspend the power of the Committee to permit such
loans and may require that adequate security be provided.

5.5 Stock Options Granted to Nonemployee Directors.

(a) Automatic Grants. Options shall be granted to
nonemployee Directors on March 1 and September 1 of each year,
and no discretionary options shall be granted to such Directors
under the Plan. The number of shares subject to options granted
on September 1, 1995, shall be 500 shares. The number of shares
to be subject to options granted on each succeeding option date
during the term of the Plan thereafter shall be 105% of the
previous period's grant, with the result rounded up or down to
the nearest 5 share increment. This provision for automatic
grants shall be effective when there are insufficient shares
available for such automatic grants under prior Company stock
option plans.

(b) Price and Terms. The price shall be 100% of the Market
Value as of the date of the grant and may be paid in cash or
shares of Common Stock. The term shall be ten years.

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date of his or her election or appointment, an option for the
number of shares granted to a nonemployee Director as of the
previous grant date. The option price for such new Director
shall be the higher of the market value as of the date of grant
or the market value as of the prior grant date.

5.6 Limits on Exercisability. Stock Options shall be exercisable for
such periods as may be fixed by the Committee, not to exceed 10 years from
the date of grant. At the time of the exercise of a Stock Option, the
holder of the Stock Option, if requested by the Committee, must represent
to the Company that the shares are being acquired for investment and not
with a view to the distribution thereof. The Committee may in its
discretion require a Participant to continue the Participant's service with
the Company and its Subsidiaries for a certain length of time prior to a
Stock Option becoming exercisable and may eliminate such delayed vesting
provisions. No Stock Option issued to directors and employees subject to
Section 16 of the Act shall be exercisable during the first six months of
its term.

5.7 Restrictions on Transferability.

(a) General. Unless the Committee otherwise consents or
unless the Stock Option agreement or grant provide otherwise:
(i) no Stock Options granted under the Plan may be sold,
exchanged, transferred, pledged, assigned, or otherwise alienated
or hypothecated except by will or the laws of descent and
distribution; and (ii) all Stock Options granted to a Participant
shall be exercisable during the Participant's lifetime only by
such Participant, his guardian, or legal representative.

(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to
the exercise of a Stock Option under the Plan as the Committee
deems advisable, including, without limitation, restrictions
under applicable federal or state securities laws.

5.8 Termination of Employment or Directorship.

(a) General. If a Participant ceases to be employed by or
a director of the Company or one of its Subsidiaries for any
reason other than the Participant's death, disability,
Retirement, or termination for cause, the Participant may
exercise his Stock Options only for a period of three months
after such termination of employment or director status, but only
to the extent the Participant was entitled to exercise the Stock
Options on the date of termination, unless the Committee
otherwise consents or the terms of the Stock Option agreement or
grant provide otherwise. For purposes of the Plan, the following
shall not be deemed a termination of employment or officer
status: (i) a transfer of an employee from the Company to any

-7-
Subsidiary; (ii) a leave of absence, duly authorized in writing
by the Company, for military service or for any other purpose
approved by the Company if the period of such leave does not
exceed 90 days; (iii) a leave of absence in excess of 90 days,
duly authorized in writing by the Company, provided that the
employee's right to reemployment is guaranteed either by statute
or contract; or (iv) a termination of employment with continued
service as a director.

(b) Death. If a Participant dies either while an employee
or director of the Company or one of its Subsidiaries or after
the termination of employment other than for cause but during the
time when the Participant could have exercised a Stock Option
under the Plan, the Stock Option issued to such Participant shall
be exercisable by the personal representative of such Participant
or other successor to the interest of the Participant for one
year after the Participant's death, but only to the extent that
the Participant was entitled to exercise the Stock Option on the
date of death or termination of employment or directorship,
whichever first occurred, unless the Committee otherwise consents
or the terms of the Stock Option agreement or grant provide
otherwise.

(c) Disability. If a Participant ceases to be an employee
or director of the Company or one of its Subsidiaries due to the
Participant's disability, the Participant may exercise a Stock
Option for a period of one year following such termination of
employment or directorship, but only to the extent that the
Participant was entitled to exercise the Stock Option on the date
of such event, unless the Committee otherwise consents or the
terms of the Stock Option agreement or grant provide otherwise.

(d) Participant Retirement. If a Participant Retires as an
employee or director of the Company or one of its Subsidiaries,
any Stock Option granted under the Plan may be exercised during
the remaining term of the Stock Option, unless the terms of the
Stock Option agreement or grant provide otherwise.

(e) Termination for Cause. If a Participant is terminated
for cause, the Participant shall have no further right to
exercise any Stock Option previously granted.

SECTION 6

Restricted Stock

6.1 Grant. A Participant may be granted Restricted Stock under the
Plan. Restricted Stock shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as shall be determined by

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the Committee in its sole discretion. The Committee may impose such
restrictions or conditions, consistent with the provisions of the Plan, to
the vesting of Restricted Stock as it deems appropriate. No more than one-
half of the total shares available for Incentive Awards under the Plan
shall be awarded in the form of Restricted Stock. Forfeited Restricted
Stock shall again become available for awards of Restricted Stock.

6.2 Restricted Stock Agreements. Awards of Restricted Stock shall be
evidenced by Restricted Stock agreements containing such terms and
conditions, consistent with the provisions of the Plan, as the Committee
shall from time to time determine. Unless a Restricted Stock agreement
provides otherwise, Restricted Stock Awards shall be subject to the terms
and conditions set forth in this Section 6.

6.3 Termination of Employment or Officer Status.

(a) General. In the event of termination of employment
during the Restricted Period for any reason other than death,
disability, Retirement, or termination for cause, then any shares
of Restricted Stock still subject to restrictions at the date of
such termination shall automatically be forfeited and returned to
the Company; PROVIDED, HOWEVER, that in the event of a voluntary
or involuntary termination of the employment of a Participant by
the Company, the Committee may, in its sole discretion, waive the
automatic forfeiture of any or all such shares of Restricted
Stock and/or may add such new restrictions to such shares of
Restricted Stock as it deems appropriate. For purposes of the
Plan, the following shall not be deemed a termination of
employment: (i) a transfer of an employee from the Company to any
Subsidiary; (ii) a leave of absence, duly authorized in writing
by the Company, for military service or for any other purpose
approved by the Company if the period of such leave does not
exceed 90 days; (iii) a leave of absence in excess of 90 days,
duly authorized in writing by the Company, provided that the
employee's right to reemployment is guaranteed either by statute
or contract; and (iv) a termination of employment with continued
service as a director.

(b) Death, Retirement, or Disability. Unless the Committee
otherwise consents or unless the terms of the Restricted Stock
agreement or grant provide otherwise, in the event a Participant
terminates his or her employment with the Company because of
death, disability, or Retirement during the Restricted Period,
the restrictions applicable to the shares of Restricted Stock
shall terminate automatically with respect to that number of
shares (rounded to the nearest whole number) equal to the total
number of shares of Restricted Stock granted to such Participant
multiplied by the number of full months that have elapsed since
the date of grant divided by the maximum number of full months of
the Restricted Period. All remaining shares shall be forfeited

-9-
and returned to the Company; PROVIDED, HOWEVER, that the
Committee may, in its sole discretion, waive the restrictions
remaining on any or all such remaining shares of Restricted Stock
either before or after the death, disability, or Retirement of
the Participant.

(c) Termination for Cause. If a Participant's employment
is terminated for cause, the Participant shall have no further
right to exercise or receive any Restricted Stock, and all
Restricted Stock still subject to restrictions at the date of
such termination shall automatically be forfeited and returned to
the Company.

6.4 Restrictions on Transferability.

(a) General. Unless the Committee otherwise consents or
unless the terms of the Restricted Stock agreement or grant
provide otherwise: (i) shares of Restricted Stock shall not be
sold, exchanged, transferred, pledged, assigned, or otherwise
alienated or hypothecated during the Restricted Period except by
will or the laws of descent and distribution; and (ii) all rights
with respect to Restricted Stock granted to a Participant under
the Plan shall be exercisable during the Participant's lifetime
only by such Participant, his or her guardian, or legal
representative.

(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to
an award of Restricted Stock under the Plan as the Committee
deems advisable, including, without limitation, restrictions
under applicable federal or state securities laws.

6.5 Legending of Restricted Stock. Any certificates evidencing
shares of Restricted Stock awarded pursuant to the Plan shall bear the
following legend:

The shares represented by this certificate were issued
subject to certain restrictions under The Colonel's Holdings,
Inc. 1995 LONG-TERM INCENTIVE PLAN (the "Plan"). A copy of the
Plan is on file in the office of the Secretary of the Company.
This certificate is held subject to the terms and conditions
contained in a restricted stock agreement that includes a
prohibition against the sale or transfer of the stock represented
by this certificate except in compliance with that agreement, and
that provides for forfeiture upon certain events.

6.6 Representations and Warranties. A Participant who is awarded
Restricted Stock shall represent and warrant that the Participant is
acquiring the Restricted Stock for the Participant's own account and
investment and without any intention to resell or redistribute the

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Restricted Stock. The Participant shall agree not to resell or distribute
such Restricted Stock after the Restricted Period except upon such
conditions as the Company may reasonably specify to ensure compliance with
federal and state securities laws.

6.7 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to Restricted Stock
held of record by such Participant as if the Participant held unrestricted
Common Stock; PROVIDED, HOWEVER, that the unvested portion of any award of
Restricted Stock shall be subject to any restrictions on transferability or
risks of forfeiture imposed pursuant to subsections 6.1 and 6.4 of the
Plan. Unless the Committee otherwise determines or unless the terms of the
Restricted Stock agreement or grant provide otherwise, any noncash
dividends or distributions paid with respect to shares of unvested
Restricted Stock shall be subject to the same restrictions as the shares to
which such dividends or distributions relate.

SECTION 7

Stock Awards

7.1 Grant. A Participant may be granted one or more Stock Awards
under the Plan in lieu of, or as payment for, the rights of a Participant
under any other compensation plan, policy, or program of the Company or its
Subsidiaries. Stock Awards shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by
the Committee in its sole discretion.

7.2 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to shares of Common
Stock issued to the Participant as a Stock Award under this Section 7 upon
the Participant becoming the holder of record of the Common Stock granted
pursuant to such Stock Awards; PROVIDED, HOWEVER, that the Committee may
impose such restrictions on the assignment or transfer of Common Stock
awarded pursuant to a Stock Award as it deems appropriate.

SECTION 8

Stock Appreciation Rights

8.1 Grant. The Committee may grant Stock Appreciation Rights to
individuals granted related options under the Plan.

8.2 Restrictions. A Stock Appreciation Right may be granted
simultaneously with or subsequent to the option to which the right is
related, but each Stock Appreciation Right must relate to a particular
option. In exchange for the surrender in whole or in part of the right to
exercise the related option to purchase shares of Common Stock, the

-11-
exercise of a Stock Appreciation Right shall entitle a Plan participant to
an amount equal to the appreciation in value of the shares covered by the
related option surrendered. Such appreciation in value shall be equal to
the excess of the market value of such shares at the time of the exercise
of the Stock Appreciation Right over the option price of such shares.
Stock Appreciation Rights may be exercised only when the related option
could be exercised and only when the market price of the stock subject to
the option exceeds the exercise price of the option. Neither a Stock
Appreciation Right nor any related stock option issued to officers and
directors subject to Section 16 of the Securities and Exchange Act of 1934
shall be exercisable during the first six months of the terms of the
respective right or option.

8.3 Payment. Upon the exercise of a Stock Appreciation Right,
payment by the Company may be made in cash, in shares of Common Stock, or
partly in cash and partly in shares of Common Stock. The Committee shall
have sole discretion to determine the form of payment made upon the
exercise of a Stock Appreciation Right. If payment is made in shares of
Common Stock, such shares shall be valued at their market value as of the
date of surrender of the right to exercise the option. When an
appreciation right is exercised pursuant to an option, the shares subject
to the underlying option shall no longer be available for grant of
Incentive Awards under the Plan.

SECTION 9

Tax Benefit Rights

9.1 Grant. A Participant may be granted Tax Benefit Rights under the
Plan to encourage a Participant to exercise Stock Options and provide
certain tax benefits to the Company. A Tax Benefit Right entitles a
Participant to receive from the Company or a Subsidiary a cash payment not
to exceed the amount calculated by multiplying the ordinary income, if any,
realized by the Participant for federal tax purposes as a result of the
exercise of a nonqualified stock option, or the disqualifying disposition
of shares acquired under an incentive stock option, by the maximum federal
income tax rate (including any surtax or similar charge or assessment) for
corporations, plus the applicable state and local tax imposed on the
exercise of the Stock Option or the disqualifying disposition.

9.2 Restrictions. A Tax Benefit Right may be granted only with
respect to a stock option issued and outstanding or to be issued under the
Plan or any other plan of the Company or its Subsidiaries that has been
approved by the shareholders as of the date of the Plan and may be granted
concurrently with or after the grant of the stock option. Such rights with
respect to outstanding stock options shall be issued only with the consent
of the Participant if the effect would be to disqualify an incentive stock
option, change the date of grant or the exercise price, or otherwise impair
the Participant's existing stock options. A stock option to which a Tax

-12-
Benefit Right has been attached shall not be exercisable by a director,
officer or employee subject to Section 16 of the Act for a period of six
months from the date of the grant of the Tax Benefit Right.

9.3 Terms and Conditions. The Committee shall determine the terms
and conditions of any Tax Benefit Rights granted and the Participants to
whom such rights will be granted with respect to stock options under the
Plan or any other plan of the Company. The Committee may amend, cancel,
limit the term of, or limit the amount payable under a Tax Benefit Right at
any time prior to the exercise of the related stock option, unless
otherwise provided under the terms of the Tax Benefit Right. The net
amount of a Tax Benefit Right, subject to withholding, may be used to pay a
portion of the stock option price, unless otherwise provided by the
Committee.

SECTION 10

Change in Control

10.1 Acceleration of Vesting. If a Change in Control of the Company
shall occur, then, unless the Committee or the Board otherwise determines
with respect to one or more Incentive Awards, without action by the
Committee or the Board (a) all outstanding Stock Options shall become
immediately exercisable in full and shall remain exercisable during the
remaining term thereof, regardless of whether the Participants to whom such
Stock Options have been granted remain in the employ or service of the
Company or any Subsidiary; and (b) all other outstanding Incentive Awards
shall become immediately fully vested and nonforfeitable.

10.2 Cash Payment for Stock Options. If a Change in Control of the
Company shall occur, then the Committee, in its sole discretion, and
without the consent of any Participant affected thereby, may determine that
some or all Participants holding outstanding Stock Options shall receive,
with respect to some or all of the shares of Common Stock subject to such
Stock Options, as of the effective date of any such Change in Control of
the Company, cash in an amount equal to the greater of the excess of (a)
the highest sales price of the shares on the NASDAQ Market System (or other
public exchange upon which the Company's stock is then traded) on the date
immediately prior to the effective date of such Change in Control of the
Company or (b) the highest price per share actually paid in connection with
any Change in Control of the Company over the exercise price per share of
such Stock Options.

10.3 Limitation on Change in Control Payments. Notwithstanding
anything in subsection 10.1 or 10.2 to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as
provided in subsection 10.1 or the payment of cash in exchange for all or
part of a Stock Option as provided in subsection 10.2 (which acceleration
or payment could be deemed a "payment" within the meaning of Section

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280G(b)(2) of the Code), together with any other payments that such
Participant has the right to receive from the Company or any corporation
that is a member of an "affiliated group" (as defined in Section 1504(a) of
the Code without regard to Section 1504(b) of the Code) of which the
Company is a member, would constitute a "parachute payment" (as defined in
Section 280G(b)(2) of the Code), then the payments to such Participant
pursuant to subsection 10.1 or 10.2 shall be reduced to the largest amount
as will result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code.

SECTION 11

General Provisions

11.1 No Rights to Awards. No Participant or other person shall have
any claim to be granted any Incentive Award under the Plan, and there is no
obligation of uniformity of treatment of Participants or holders or
beneficiaries of Incentive Awards under the Plan. The terms and conditions
of Incentive Awards of the same type and the determination of the Committee
to grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant.

11.2 Withholding. The Company or a Subsidiary shall be entitled to
(a) withhold and deduct from future wages of a Participant (or from other
amounts that may be due and owing to a Participant from the Company or a
Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state, and local
withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise, or
vesting of, or payment of dividends with respect to, an Incentive Award or
a disqualifying disposition of Common Stock received upon exercise of an
incentive stock option; or (b) require a Participant promptly to remit the
amount of such withholding to the Company before taking any action with
respect to an Incentive Award. Unless the Committee determines otherwise,
withholding may be satisfied by withholding Common Stock to be received
upon exercise or by delivery to the Company of previously owned Common
Stock. The Company may establish such rules and procedures concerning
timing of any withholding election as it deems appropriate to comply with
Rule 16b-3 under the Act.

11.3 Compliance With Laws; Listing and Registration of Shares. All
Incentive Awards granted under the Plan (and all issuances of Common Stock
or other securities under the Plan) shall be subject to all applicable
laws, rules, and regulations, and to the requirement that if at any time
the Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the grant of such Incentive Award or

-14-
the issue or purchase of shares thereunder, such Incentive Award may not be
exercised in whole or in part, or the restrictions on such Incentive Award
shall not lapse, unless and until such listing, registration,
qualification, consent, or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.

11.4 Limit on Plan Awards. No participant shall be eligible to
receive Incentive Awards under the Plan which in the aggregate constitute
more than 25% of the total Incentive Awards granted under the Plan.

11.5 No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Subsidiary from adopting or
continuing in effect other or additional compensation arrangements,
including the grant of stock options and other stock-based awards, and such
arrangements may be either generally applicable or applicable only in
specific cases.

11.6 No Right to Employment. The grant of an Incentive Award shall
not be construed as giving a Participant the right to be retained in the
employ of the Company or any Subsidiary. The Company or any Subsidiary may
at any time dismiss a Participant from employment, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the
Plan or in any written agreement with a Participant.

11.7 Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Michigan and applicable federal
law.

11.8 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.

SECTION 12

Termination and Amendment

The Board may terminate the Plan at any time, or may from time to
time amend the Plan as it deems proper and in the best interests of the
Company, provided that without stockholder approval no such amendment may:
(a) materially increase either the benefits to Participants under the Plan
or the number of shares that may be issued under the Plan; (b) materially
modify the eligibility requirements; (c) modify the formula grant
provisions of subsection 5.5 with respect to nonemployee directors more
than once in any six month period, or (d) impair any outstanding Incentive
Award without the consent of the Participant, except according to the terms
of the Plan or the Incentive Award. No termination, amendment, or

-15-
modification of the Plan shall become effective with respect to any
Incentive Award previously granted under the Plan without the prior written
consent of the Participant holding such Incentive Award unless such
amendment or modification operates solely to the benefit of the
Participant.

SECTION 13

Effective Date and Duration of the Plan

This Plan shall take effect upon approval by the shareholders at
the 1995 Annual Meeting of Shareholders or any adjournment thereof or at a
Special Meeting of Shareholders. Unless earlier terminated by the Board of
Directors, the Plan shall terminate on ________________, 2005. No
Incentive Award shall be granted under the Plan after such date.

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APPENDIX H

FORM OF PROXY

BRAINERD INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS

The undersigned shareholder acknowledges receipt of a Notice of Annual Meeting
and a Proxy Statement for the annual meeting referred to above and appoints
Gary Moore and J. Daniel Frisina, or either of them, each with full power of
substitution, attorneys and proxies to represent the shareholder, and to vote
and act with respect to all shares that the shareholder would be entitled to
vote, at the annual meeting of shareholders of Brainerd International, Inc.
referred to above and at any adjournment of that meeting on all matters that
come before the meeting.

1. The proposal to adopt the Agreement and Plan of Merger, dated
as of October __, 1995, between Brainerd Merger Corporation and The Colonel's,
Inc.

_____ FOR _____ AGAINST _____ ABSTAIN

Your Board of Directors recommends that you vote FOR the proposal.

2. The proposal to change the state of incorporation of Brainerd
International, Inc., from Minnesota to Michigan, adopt new Articles of
Incorporation of Brainerd International, Inc. to change the name of the
corporation to The Colonel's Holdings, Inc., and to increase the number of
shares of common stock, par value $.01 per share, of Brainerd International,
Inc. which Brainerd International, Inc. is authorized to issue from 10,000,000
to 35,000,000 shares.

_____ FOR _____ AGAINST _____ ABSTAIN

Your Board of Directors recommends that you vote FOR the proposal.

3. The proposal to authorize the transfer of all of the operating assets
of Brainerd International, Inc. to Brainerd International Raceway, Inc., a
wholly owned subsidiary of Brainerd International, Inc.

_____ FOR _____ AGAINST _____ ABSTAIN

Your Board of Directors recommends that you vote FOR the proposal.

4. The proposal to adopt The Colonel's Holdings, Inc. 1995 Long-Term
Incentive Plan.

_____ FOR _____ AGAINST _____ ABSTAIN

Your Board of Directors recommends that you vote FOR the proposal.

5. The election of directors. Nominees for election are:

Donald J. Williamson
Richard L. Roe
Gary Moore
Ted M. Gans
J. Daniel Frisina
Lisa K. Morrow

_____ FOR ALL NOMINEES LISTED ABOVE

_____ ABSTAIN

(Instruction: To withhold authority to vote for any individual nominee
write that nominee's name on the line below.)

____________________________________________________________________________

Your Board of Directors recommends that you vote FOR ALL nominees for
election.

6. The proposal to confirm the appointment of Deloitte & Touche LLP as
the independent auditors of The Colonel's Holdings, Inc., as the successor of
Brainerd International, Inc., for the year ending December 31, 1995.

_____ FOR _____ AGAINST _____ ABSTAIN

Your Board of Directors recommends that you vote FOR the proposal.

7. In their discretion, upon any other matter which may properly come
before the meeting.

This Proxy is solicited on behalf of the Board of Directors. If this proxy is
properly executed and returned, the shares represented by this proxy will be
voted as specified. If no specification is given, the shares will be voted for
adoption of all of the foregoing proposals and the nominees for directors listed
above. The shares represented by this proxy will be voted in the discretion of
the proxies on any other matter which comes before the meeting.

The undersigned hereby revokes any proxy previously given to vote such shares
at the meeting or at any adjournment thereof.

Please sign exactly as name(s) appear(s)
on your stock certificate indicating,
where proper, official position or
representative capacity. When shares
are held by joint tenants, both should
sign.)

_____________________________________

______________________________________
Signature(s) of Shareholder(s)

Date: ______________, 1995

Please mark, sign, and return promptly in the enclosed envelope.