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                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                                  FORM 10-K
     [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

                 FOR THE FISCAL YEAR ENDED JANUARY 31, 1998

                                     OR
     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                       COMMISSION FILE NUMBER 0-028176

                         MARKS BROS. JEWELERS, INC.
     (Exact Name of Registrant as Specified in Its Charter)


          DELAWARE                                     36-1433610
(State or Other Jurisdiction of        (I.R.S. Employer Identification Number)
Incorporation or Organization)                                          

               155 N. WACKER DR., STE. 500, CHICAGO, IL 60606
        (Address of principal executive offices, including zip code)

                               (312) 782-6800
            (Registrant's telephone number, including area code)

      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

             COMMON STOCK, PAR VALUE $.001 PER SHARE, INCLUDING
                 ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS
                              (Title of Class)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES   X          NO
                                               -----             -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [  ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of April 24, 1998 was $171,103,355, based on the closing price of
$19.50 of the registrant's common stock on the NASDAQ Stock  Market.  This
calculation does not reflect a determination that persons are affiliates for
any other purposes.

Number of shares of Common Stock outstanding as of April 24, 1998:  10,172,638
Number of shares of Class B Common Stock outstanding as of April 24, 1998:
101.298

                    Documents Incorporated by Reference:
Part II - Portions of the registrant's annual report to stockholders for the
registrant's fiscal year ended January 31, 1998 (the "1997 Annual Report"), as
indicated herein.
Part III - Portions of the registrant's definitive proxy statement to be
distributed in conjunction with registrant's annual stockholders' meeting to be
held in 1998 (the "Proxy Statement"), as indicated herein.

==============================================================================


 
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                                   PART I

     All statements, trend analysis and other information contained in this
report relative to markets for the Company's products and trends in the
Company's operations or financial results, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend" and other similar expressions, constitute forward-looking statements
under the Private Securities Litigation Reform Act of 1995.  These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors which may cause actual results to be materially
different from those contemplated by the forward-looking statements.  Such
factors include, among other things:  (1) the extent and results of the
Company's store expansion strategy; (2) the seasonality of the Company's
business; (3) economic conditions, the retail sales environment and the
Company's ability to execute its business strategy and the related effects on
comparable store sales and other results; (4)  the success of the Company's
marketing and promotional programs; (5) the extent to which the Company is able
to retain and attract key personnel; (6) competition; (7) the availability and
cost of consumer credit; (8) relationships with suppliers; (9) the Company's
leverage; (10)  fluctuations in gem and gold prices; (10) regulation; (12)
timely "Year 2000" compliance by the Company and third party suppliers and
service providers; and (13) the risk factors listed from time to time in the
Company's filings with the Securities and Exchange Commission.

ITEM 1.  BUSINESS

THE COMPANY

     General.  Marks Bros.  Jewelers, Inc. (the "Company") is a leading,
national specialty retailer of fine jewelry (based on number of stores),
operating 198 stores in 24 states as of April 15, 1998.  Founded in 1895, the   
Company operates stores in regional and super-regional shopping malls under the
names Whitehall Co. Jewellers(R) (146 stores), Lundstrom Jewelers(R) (47
stores) and Marks Bros. Jewelers(TM) (5 stores).  The Company offers at
competitive prices an in-depth selection of fine jewelry in the following key
categories: diamond, gold, precious and semi-precious jewelry.  The Company's
target customers are middle to upper middle income women over 25 years old.
Central to the Company's growth in operating profits and its high store
productivity are its small but flexible store format, the absence of recourse
credit risk, its strong sales culture and its operating efficiencies at both
the store and corporate levels.

     The Company operates on a fiscal year ending January 31.  The year ended
January 31, 1998 is referred to herein as fiscal 1997.  From fiscal 1993 to
fiscal 1997, the Company's net sales grew at a compound annual rate of 20.0% to
$188.9 million, while income from operations grew at a compound annual rate of
28.1% to $22.2 million.  The Company's growth during this period is
attributable to (i) new store openings, which resulted in an increase in the
number of stores from 113 to 191 stores, (ii) higher store productivity, as
average annual sales per store increased from $791,000 to $1,045,000, and (iii)
improved operating efficiencies resulting in an increase in the Company's
operating margin from 9.1% to 11.8%.

     The Company believes it has significant opportunities to increase sales
and profitability through an increased number of planned store openings, the
implementation of new sales, marketing and merchandising programs designed to
continue comparable store sales growth, and continued adherence to its strict
standards regarding operating performance.

     Retailing Concepts.  As of April 15, 1998, the Company's stores operated
under the names Whitehall Co. Jewellers(R) (146 stores), Lundstrom Jewelers(R)
(47 stores) and Marks Bros.  Jewelers(TM) (5 stores).  Each store concept is
designed around an open, brightly-lit and inviting layout which encourages
browsing by mall shoppers.  The Company's multiple name format allows the
Company to open additional stores in malls where it already has profitable
locations.  Whitehall Co. Jewellers is the Company's primary trademark and is
positioned to be somewhat more upscale than the average mall-based jewelry
store.  As of April 15, 1998, the Company operated two stores in 40 malls and
three stores in one mall.  In most cases a Lundstrom store is added to a mall
only after the Company has




 
<PAGE>   3


operated a successful Whitehall store in the same center.  Generally, Lundstrom
is positioned slightly more upscale than Whitehall, with greater emphasis on
more expensive diamond and gold merchandise.

INDUSTRY

     Total retail sales by jewelry stores in the United States in 1997 were
approximately $19.5 billion, and such sales grew between 1992 and 1997 at an
annual rate of approximately 5.0%, according to the U.S. Department of
Commerce.

     The jewelry market is generally divided into three segments: fine jewelry,
costume jewelry, and guild jewelry.  The broad "fine" jewelry market segment
represents a majority of the jewelry market in terms of revenue, and it
includes jewelry made from precious metals and gemstones, as well as finer
watches.  Fine jewelry is sold at a range of price points from middle to upper
end, with the upper end consisting of luxury items such as unique design
jewelry items and expensive time pieces.  Except for a few designer label
offerings, fine jewelry is generally not marketed under brand names.  Costume
jewelry consists of jewelry made of non-precious stones and rhinestones, as
well as inexpensive watches. The "guild" market represents a small percentage
of the total market.

     Jewelry is mainly distributed through jewelry stores (both independent
stores and chains), general merchandise and discount stores, department stores,
mail order and catalogs, apparel and accessories stores, and televised home
shopping networks.  General merchandisers, discount stores, and apparel and
accessories stores generally sell costume jewelry and lower-priced "fine"
jewelry.  Mail order and home shopping distributors generally offer costume
jewelry and fine jewelry at low to middle price points.  Department stores
generally offer a wider assortment of merchandise including a selection of
costume, fine and some "guild" jewelry.

     Jewelry stores, including independent stores and jewelry chains, represent
the largest distribution channel based on industry sales.  Most jewelry stores
cater to the broad fine jewelry market offering a variety of items at a range
of price points.  As of 1995, there were over 28,000 retail jewelry stores
nationwide accounting for almost one-half of all jewelry sales.  The retail
jewelry industry is highly fragmented with no single chain accounting for a
significant percentage of the fine jewelry market.

     The Company believes that the retail jewelry industry is consolidating due
to a variety of factors, including (i) bad debt exposure, which has impacted
jewelry stores that extend recourse credit to customers, (ii) over-expansion of
stores and the failure to close unprofitable stores, and (iii) financial risk
of high leverage.  The Company believes that industry consolidation will
continue as independent jewelers find it increasingly difficult to achieve
economies of scale in merchandise purchasing and real estate site selection.

OPERATING STRATEGIES

     The Company believes that its success is attributable in large measure to
its business strategy which emphasizes adherence to the Company's strict
operating standards regarding real estate selection, credit policies,
performance of sales personnel, store profitability and cost control.  The
principal elements of the Company's operating strategies are as follows:

     Small, Flexible Store Format in Regional Malls.  The Company believes it
has a competitive advantage in obtaining high traffic, "center court" locations
in desirable regional and super-regional malls due principally to (i) its small
average store size of approximately 800 square feet, which, while considerably
smaller than the average store size of most of the Company's competitors,
generates comparable sales volumes, (ii) its ability to adapt its store design
to various sizes and configurations, and (iii) its high average sales per
square foot (approximately $1,325 in fiscal 1997).  Over two-thirds of the
Company's stores are located in high traffic, "center court" locations.  The
stores' small flexible format



                                     - 2 -


 
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(which lowers the Company's fixed occupancy costs) and high productivity are
desirable to mall owners.  The stores' open, attractive design appeals to       
customers, while facilitating foot traffic and enhancing sales opportunities
for the Company.

     Absence of Recourse Credit Risk.  The Company operates based upon a "no
credit risk" policy.  When purchasing on credit, customers must use their
personal credit cards, the Company's private label credit cards (which are
available through a third party and are non-recourse to the Company), or other
non-recourse third party credit arrangements.  The Company's strict policy
eliminates its credit risk associated with the customer's failure to pay.  This
policy also distinguishes the Company from most of its competitors, which not
only bear such credit risk, but also rely on finance income in addition to
merchandise sales.

     Motivated, Sales-Oriented Store Personnel.  The primary responsibility of
store sales personnel is selling to customers.  To assist them in their selling
efforts, store personnel are authorized to discount prices within certain
limits and to choose from a variety of return/exchange options to offer the
customer. Most non-sale activities are largely centralized.  In addition, the
absence of internal credit operations reduces the need for sales personnel to
focus on many in-store credit activities.  Compensation and bonus programs
reinforce sales and margin goals on a daily, weekly and monthly basis.  The
Company continually seeks to enhance the selling skills of its sales associates
through recruitment of experienced sales personnel and extensive, ongoing
training programs.

     Differentiated Merchandising.  The Company offers an in-depth selection of
merchandise in several key categories of fine jewelry: diamond, gold, precious
and semi-precious jewelry.  This "key category" focus is oriented to the
Company's target customer, the middle to upper middle income woman.  Unlike
many of its competitors, the Company carries only a limited selection of
watches and virtually no costume jewelry or gift merchandise.  During the past
five fiscal years the Company has increased its average store inventory at an
annual rate of approximately 16% in an effort to expand the upper price points
and add more depth to the merchandise mix.

     Strict Operating Controls.  The Company emphasizes high performance
standards, backed by strong incentive programs.  Adherence to these standards
in the areas of store site selection, sales targets, store profitability and
cost control is fundamental to the Company's success.  For example, the Company
reduced central overhead as a percentage of net sales from 6.6% ($6.0 million)
in fiscal 1993 to 5.0% ($9.4 million) in fiscal 1997 while continuing to build
infrastructure to handle new store growth.  During this same period, the
Company's net sales increased by over 169% and the number of its stores
increased by 69%.


                                     - 3 -


 
<PAGE>   5


GROWTH STRATEGIES

     The Company believes that it has significant opportunities to increase
sales and profits through continued execution of its store expansion strategy
and continued comparable store sales gains.  The key elements of the Company's
growth strategies are as follows:

     Accelerated New Store Openings.  The Company opened 50 stores during the
last two fiscal years, and plans to open 35 stores in calendar 1998.  The
Company anticipates opening a similar number of stores in 1999.  The following
table shows the Company's store expansion during the periods presented
reflecting both store openings and closings for the respective periods:


<TABLE>
<CAPTION>
                                          YEAR ENDED JANUARY 31,
                               ----------------------------------------
        NUMBER OF STORES:        1994      1995      1996    1997  1998
        ---------------------  --------  --------  --------  ----  ----
        <S>                    <C>       <C>       <C>       <C>   <C>
        Open at beginning
         of period                  113       122       131   146   164
        Opened during period         11        11        15    20    30
        Closed during period         (2)       (2)       --    (2)   (3)
                               --------  --------  --------  ----  ----
        Open at end of period       122       131       146   164   191
                               ========  ========  ========  ====  ====
         Net increase                 9         9        15    18    27
</TABLE>


     To reduce the Company's risk associated with entering new malls, the
Company prefers to expand in established malls.  In addition, the Company seeks
to open additional stores in its existing markets where the Company believes it
can obtain greater market penetration.  The Company also seeks to identify new
geographic markets where it can cluster stores for ease of supervision and
increased name recognition.  The Company entered the St. Louis and Phoenix
markets in fiscal 1994 and now has five stores in the Phoenix area and plans to
open one in fiscal 1998, and six stores in the St. Louis area.  The Company
entered the San Diego market in fiscal 1997 with four stores.  The Company
entered the greater Los Angeles market in fiscal 1997 by opening two stores,
and plans to open three stores in fiscal 1998.  The Company plans to enter the
Portland, Oregon, market with one store opening and the Philadelphia market
with two store openings in fiscal 1998.

     The Company seeks to open new stores in key locations in regional and
super-regional malls.  The Company's national presence permits it to focus its
new store openings on desirable malls throughout the country and often to
obtain high traffic, "center court" locations in those malls to maximize
exposure to mall shoppers.  The Company uses its multiple name format to open
additional stores in malls where it already has profitable locations.  For
example, as of April 15, 1998, the Company operated two stores in 40 malls and
three stores in one mall.

     The Company continuously evaluates the performance of its stores and
closes certain stores from time to time that do not continue to meet its
strategic location profile or its performance requirements.

MERCHANDISING

     The Company believes that an important element of its success is a focused
merchandising strategy that reflects its upscale customer orientation and small
store format.  The Company seeks to provide a deep assortment of items across a
broad range of price points in its key product categories: diamonds (such as
diamond jewelry, diamond solitaires and bridal), gold, and precious and
semi-precious jewelry.  Unlike many of its competitors, the Company carries
only a limited selection of watches and virtually no costume jewelry or gift
merchandise.

     Each store offers approximately 2,500 individual items, including
approximately 600 core jewelry items, which accounted for approximately 38% of
net sales in fiscal 1997.  In addition, the



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<PAGE>   6



Company has expanded its merchandise assortment in higher price points. The
Company's average price per merchandise sale has increased from $245 in fiscal
1995 to $255 in fiscal 1996 and $273 in fiscal 1997.

     In recent years, the Company has increased the average number of items
available in its stores to broaden the appeal of its merchandise assortment and
expand its product breadth in selected product categories, particularly bridal
and other diamond jewelry.  For example, store merchandise per store (including
consigned items) has grown at a compound annual rate of approximately 16% over
the past five fiscal years (as measured by the inventory and consigned items on
hand at fiscal year end).  During fiscal 1996, the Company placed a
significantly expanded selection of higher priced merchandise in approximately
35 stores on a test basis.  Based on the initial success of expanding our
higher priced merchandise selection, the Company increased the amount of this
merchandise in a significant portion of its stores during fiscal 1997.

     The following table sets forth the Company's percentage of total
merchandise sales by category for the following periods:


<TABLE>
<CAPTION>
                                             YEAR ENDED JANUARY 31,
                                  ----------------------------------------
                                  1994      1995      1996    1997    1998
                                  -----     -----     -----   -----  -----

     <S>                       <C>       <C>       <C>       <C>     <C>
     Diamonds                      54.0%     56.8%     57.6%   57.5%  61.3%
     Gold                          26.6      25.0      25.2    25.4   21.2
     Precious/Semi-Precious        15.0      15.1      14.6    14.8   15.5
     Watches                        2.7       2.4       2.1     2.1    2.0
     Other                          1.7       0.7       0.5     0.2    ---
                                -------  --------  --------  ------  -----
         Total                    100.0%    100.0%    100.0%  100.0% 100.0%
                               ========  ========  ========  ======  ======
</TABLE>


     All stores carry the Company's core items.  The Company also customizes
the merchandising of its stores based upon each store's sales volume,
individual market preferences and historical selling patterns.  The Company
continually tests new items in its stores and monitors their sales performance
to identify additional sales opportunities.

     Along with its broad product assortment, the Company also provides jewelry
repair services to its customers (sales from which represented 3.8% of fiscal
1997 net sales).  Actual repair work is performed by jewelers under independent
contract.  Approximately 110 of the Company's stores have independent jewelers
located in the store to provide on-site repair services to the customer.

     Pricing Strategy.  For purposes of pricing, the Company classifies its
merchandise into several broad categories.  Consistent with many fine jewelry
retailers, a substantial portion of the Company's sales are made at prices
discounted from listed reference prices.  Company personnel are authorized to
discount most merchandise prices within certain limits.

CREDIT

     The Company operates based upon a "no credit risk" policy.  When
purchasing on credit, customers must use their personal credit cards (e.g.,
Visa, MasterCard, American Express and others), the Company's private label
credit cards, which are available through a third party and are non-recourse to
the Company, or other non-recourse third party credit arrangements.  Because
the Company's credit programs are non-recourse to the Company, the Company has
no customer credit risk for non-payment by the customer associated with the
sale.  At the same time, the Company believes that its ability to offer credit
through its "private label" credit cards and other non-recourse arrangements is
attractive to many customers, including those who prefer not to have their
jewelry purchases count towards their credit limits on their personal third
party credit cards.  The Company encourages sales on the Company's


                                     - 5 -


 
<PAGE>   7


private label credit card or other non-recourse third-party credit arrangements
because customer purchases on this type of credit tend to generate higher
average sales.  In fiscal 1997, the Company's average credit sale was
approximately $600, versus approximately $100 for a purchase paid for with cash
or by check.  The Company believes that its success in building its
non-recourse credit sales has been a significant factor in its improvement in
comparable store sales.

     The Company's credit strategy and its focus on a more upscale clientele
are interrelated.  A substantial portion of the users of private label credit
offered by most jewelers tend to be customers with more limited financial
resources or a weaker credit history.  In contrast, the Company's adherence to
a "no credit risk" policy limits the Company's sales to such individuals.
Thus, the Company has historically oriented its merchandising programs to
appeal to a more affluent, less credit-reliant consumer.

     The Company has established its private label program through Bank One
(and other non-recourse credit purveyors), whereby customers may apply for
instant credit on merchandise purchases.  Under these credit programs, the
credit purveyors have no recourse against the Company based on the customer's
failure to pay; recourse against the Company is restricted to those limited
cases where the receivable itself is defective (such as incorrectly completed
documentation or certain situations involving customer fraud).  The Company's
expense related to these limited cases was approximately 0.5% of sales during
fiscal 1997.  The Company's credit card discount expense for fiscal 1997 and
fiscal 1996 represented 2.9% and 3.0%, respectively, of credit sales for those
years.  In general, the Company's credit card discount expense is higher for
its private label programs than for personal credit cards, such as Visa and
MasterCard.  Pursuant to the Company's relationship with Bank One, the bank
provides credit to the Company's customers using its own credit criteria and
policies.  The Company pays a fee to Bank One based primarily upon the volume
of credit so extended.  The Company has similar non-recourse arrangements with
other credit purveyors, which it uses in addition to the Bank One program to
assist customers in financing their purchases.  In addition, the Company
utilizes a check authorization company which guarantees payments on
transactions involving certain personal checks.

     During the third quarter of fiscal 1997, the Company introduced a
"One-Year No-Interest" program through a non-recourse agreement with Bank One.
Under this program, Bank One offers customers a financing arrangement with no
interest for one year, for which the Company pays Bank One a significantly
higher fee than it pays under its standard program.  The Company feels the
usage of this program contributed to an increase in comparable store sales.

     During recent periods there has been an increase in consumer credit
delinquencies generally, which has resulted in financial institutions
reexamining their pending practices and procedures.  Consequently, the
availability or cost of third party credit offered by the Company could be
adversely affected.

STORE OPERATIONS

     Store Layout.  Over two-thirds of the Company's stores are located in high
traffic, "center court" locations.  Nearly all of the stores have an open
entrance rather than the more traditional single-doorway entrance.  Stores are
brightly-lit and generally are designed to have display cases situated along
the lease line.  By formatting the stores in this "customer-friendly" manner
and without a formal entryway, a casual mall shopper comes in very close
contact with the store's merchandise and personnel without the natural
apprehension many have upon "entering" a fine jewelry store.

     Store Management.  Each of the Company's stores is operated under the
direction of a store manager who is responsible for management of all
store-level operations, including sales and personnel matters.  Most non-sales
related administrative functions are performed at the Company's corporate
office in Chicago.  A significant portion of the compensation of store managers
is based on incentives




                                     - 6 -


 
<PAGE>   8


which focus on sales productivity.  The store managers are assisted by a staff
that usually includes an assistant manager and four to eight sales      
associates, depending upon store operating hours and anticipated sales volume.
The Company has approximately 30 supervisors who concentrate their efforts on
store-focused sales strategies.  Each supervisor is based in one store, but
spends most of his or her time visiting other stores.  The Company's senior
officers spend a substantial percentage of their time visiting stores to
reinforce the close communication between senior executives and store
personnel.

     Operating Cost Controls.  The Company's store operations are designed to
maintain low operating costs at the store level.  The Company's small average
store size reduces fixed costs, and the lack of recourse credit eliminates the
need for most overhead expenses normally associated with credit operations.
The Company also seeks to reduce store-level operating costs through efficient
sales staff utilization.  To assist store personnel in their selling efforts,
many of the administrative functions normally performed at the store level are
performed at the corporate level.   Due to computerization, more efficient use
of personnel, and the elimination of certain non-essential functions, the
Company reduced central overhead as a percentage of net sales from 6.6% in
fiscal 1993 ($6.0 million) to 5.0% in fiscal 1997 ($9.4 million).  During that
period, the Company's sales increased by over 169% and the number of stores
increased by 69%.

     Store Employee Compensation.  The Company seeks to hire experienced sales
personnel and motivate its store employees by linking a substantial percentage
of employee compensation to individual and store sales performance, as well as
by offering opportunities for promotion within the Company.

     Employee Training.  The Company believes that providing knowledgeable and
responsive customer service is critical to the Company's success and,
accordingly, has developed and implemented extensive employee training
programs.  In addition to training during the first weeks of employment and
continuous on-the-job training provided by management, the Company has several
training videos to supplement its written training materials for sales
associates.  Store managers complete a manager training and development
program.

ADVERTISING AND PROMOTIONS

     In the second quarter of fiscal 1997, the Company retained a full-service
advertising and marketing firm which helped the Company implement expanded
advertising campaigns and strategies.  The  Company improved the in-store and
point-of-sale signage with a more upscale look which is a key element of its
advertising strategy.  The Company initiated a holiday season radio campaign in
certain markets, and tested various direct mail campaigns as part of its new
advertising initiatives.  Frequent special promotions such as diamond remount
events, clearance sales, "Vice President's Day Events," and similar promotions
are designed to increase traffic through the Company's stores and generate an
urgency for customers to make purchases.  These events vary from year to year
and among stores.  Publicized events are an important part of the Company's
marketing efforts, and the Company generates a significant portion of its
revenues during such events.  The Company plans to continue its usage of
certain direct mail and media advertising programs in fiscal 1998.

     The Company offers a 30-day return policy; however, for certain sales,
store personnel may choose from a variety of return or exchange options to
offer the customer, including a 30-day return policy or a 90-day exchange
policy. During the second quarter of fiscal 1997, the Company implemented this
more liberal customer return policy.

PURCHASING

     The Company does not manufacture its merchandise.  The Company purchases
substantially all of its inventory, including loose gems, directly from prime
suppliers located in the United States and abroad.  The Company purchases
merchandise from approximately 150 vendors, primarily in the United



                                     - 7 -


 
<PAGE>   9


States, Israel, Italy and the Far East, who supply various jewelry products
under U.S. dollar-denominated agreements.  During fiscal 1997, the      
Company's largest supplier and five largest suppliers accounted for
approximately 17% and 35%, respectively, of the merchandise purchased by the    
Company.  The Company also has certain subcontracting arrangements with jewelry
finishers to set loose diamonds and gemstones into rings and other jewelry,
using styles established by the Company, or other companies.  Management
believes that the relationships the Company has established with its suppliers
and subcontractors are good.  The Company has not experienced any difficulty in
obtaining satisfactory sources of supply and believes that adequate alternative
sources of supply exist for substantially all types of merchandise sold in its
stores.  However, the loss of one or more of its major suppliers, particularly
at certain critical times during the year could have a material adverse effect
on the Company.

     The Company maintains a strict quality assurance program, with almost all
shipments from suppliers being counted or weighed and visually inspected upon
receipt at the Company's headquarters in Chicago, Illinois.

     During fiscal 1997, the Company's average net monthly investment in
inventory (i.e., the total cost of inventory owned and paid for) was 66% of the
total cost of the Company's on-hand merchandise. The amount of consignment
merchandise has increased in recent years.  For example, the average amount of
consignment merchandise per store has increased from $106,000 on January 31,
1997 to $169,000 on January 31, 1998.  The Company is also often granted
exchange privileges which permit it to return or exchange certain unsold
merchandise for new products at any time.  Those arrangements permit the
Company to structure its relationships with vendors to encourage their
participation in, and responsibility for, merchandise turnover and
profitability.  Those arrangements also permit the Company to have more
merchandise available for sale in stores and reduce somewhat the Company's
exposure to changes in fashion trends and inventory obsolescence.

     The Company and the jewelry industry in general are affected by
fluctuations in the prices of diamonds and gold and, to a lesser extent, other
precious and semi-precious metals and stones.  During fiscal 1997, diamonds,
gold, precious and semi-precious jewelry accounted for approximately 98% of the
Company's net merchandise sales.  The supply and price of diamonds in the
principal world markets are significantly influenced by a single entity, the
Central Selling Organization ("CSO"), a marketing arm of DeBeers Consolidated
Mines Ltd. of South Africa.  The CSO has traditionally controlled the marketing
of a substantial majority of the world's supply of diamonds and sells rough
diamonds to worldwide diamond cutters from its London office in quantities and
at prices determined in its sole discretion. The availability of diamonds to
the CSO and the Company's suppliers is to some extent dependent on the
political situation in diamond producing countries, such as South Africa,
Botswana, Zaire, republics of the former Soviet Union and Australia, and on
continuation of the prevailing supply and marketing arrangements for raw
diamonds.  Until alternate sources could be developed, any sustained
interruption in the supply of diamonds or any oversupply from the producing
countries could adversely affect the Company and the retail jewelry industry as
a whole.  The Company has been increasing the amount of inventory (especially
higher priced items) carried in its stores.  Higher priced jewelry items tend
to have a slower rate of turnover, thereby increasing the risks to the Company
associated with price fluctuations and changes in fashion trends.


                                   - 8 -


 
<PAGE>   10


MANAGEMENT INFORMATION SYSTEMS

     The Company utilizes customized management information systems throughout
its business to facilitate the design and implementation of selling strategies
and as an integral part of its financial and other operational controls.  The
Company's management information system utilizes an IBM AS400.  The system
incorporates point-of-sale computers in its stores with a merchandise
management and purchase order management system and utilizes software
specifically designed for the jewelry industry, which the Company has
customized extensively to meet its needs.  The information system has been
upgraded to support the Company's needs and further upgrading is necessary to
support the Company's growth.

     The Company uses the management information system to track each
individual item of merchandise from receipt to ultimate sale or return to the
vendor.  As a result, management can closely monitor inventory by location,
sales, gross margin, inventory levels and turnover statistics, reallocating
inventory among stores when beneficial.  This system also enables management to
review each store's and each employee's productivity and performance.  Based on
the sales data, the Company tailors each store's inventory composition and
plans the Company's purchasing requirements accordingly.  The system enables
the Company to manage its inventory at the store level, including the automatic
replenishment of merchandise no less frequently than twice a week.

     The system also automatically provides a daily reconciliation of each
store's transactions for prompt investigation of discrepancies. The
point-of-sale computers are polled nightly by the headquarters system and
updated data is available at the beginning of the following day for use by
central office and store supervisory personnel, and for transfer into the
Company's accounting, merchandising, and other management information systems.

     The Company has implemented, through its point-of-sale system, the ability
to capture and retain selected customer data from each sale (name, address,
phone, birthday, anniversaries, historical purchases, etc.).  The data is used
by Company store managers and sales associates in their efforts to contact
customers and anticipate and facilitate future add-on purchases by its
customers.  For example, a husband who buys a diamond necklace for his wife's
birthday may receive a mailing approximately a year later suggesting a matching
set of diamond earrings.  The Company believes that additional sales volume can
be achieved by utilizing such programming initiatives.  The point of sale
systems also track required inspection dates for customers with diamond
warranties.  Sales associates are prompted by the system to contact these
customers to remind them of the required in-store inspection.

     The Company's supervisors use laptop computers in the field to obtain
up-to-date financial information on their stores and down-load it on an
as-needed basis from the Company's central computer system.  The information
available via laptop includes, among other items, store sales, gross profit,
personnel costs, and sales associates' productivity information.

YEAR 2000

     The Company has reviewed its computer and other operating systems to
identify those which it believes could be affected by the "Year 2000" issue.
The Company has begun to upgrade certain information systems to improve
operations and support future growth as well as to address the "Year 2000"
issue.  With respect to systems that the Company is not upgrading, the Company
plans to renovate those systems to be "Year 2000" compliant.  The Company
believes that such systems upgrades and renovations will be made on a timely
basis, and that if made on a  timely basis, that the "Year 2000" issue will not
pose significant operational problems or results in costs that have a material
adverse impact on the Company's business, financial condition or results of
operations.  In addition, certain systems of third party suppliers and service
providers which are not currently "Year 2000" compliant could adversely impact
the Company's operations.  The Company has confirmed with these suppliers



                                     - 9 -


 
<PAGE>   11


and service providers that they are implementing  plans to address the "Year
2000" issue.  However, there can be no assurance that the systems of such       
third parties will be timely converted.  A failure by the Company or any such
third party to timely address the "Year 2000" issue could have a material
impact on the Company's business, financial condition or results of operations.

INVENTORY LOSS PREVENTION AND INSURANCE

     The Company undertakes substantial efforts to safeguard its jewelry
inventory from loss and theft, including the use of security alarm systems and
safes at each store and the taking of daily inventory of higher value items.
In addition, the Company's inventory management and control system, which
tracks each item in the Company's inventory, provides a further check against
loss or theft.  During fiscal 1997, in-store inventory shrinkage amounted to
approximately 1.0% of sales.  The Company has a full-time manager who directs
the Company's loss prevention efforts.  The Company maintains insurance
(subject to certain deductibles) covering the risk of loss of merchandise in
transit and at store premises (whether owned or on consignment) in amounts that
the Company believes are reasonable and adequate for the types and amounts of
merchandise carried by the Company.

COMPETITION

     The jewelry business is fragmented and highly competitive.  The Company
competes with national and regional jewelry chains and local independently
owned jewelry stores, especially those that operate in malls, as well as with
department stores, catalog showrooms, discounters, direct mail suppliers and
televised home shopping networks.  Certain of the Company's competitors are
substantially larger and have greater financial resources than the Company and
can take advantage of national advertising programs.  The Company also believes
that it competes for consumers' discretionary spending dollars with retailers
that offer merchandise other than jewelry.

     Management believes that the primary competitive factors affecting its
operations are store location and atmosphere, quality of sales personnel and
service, breadth and depth of merchandise offered, pricing, credit and
reputation.  The Company emphasizes its merchandise selection, sales personnel,
store location and design and pricing in competing in its target market, which
is relatively less credit sensitive.

TRADEMARKS

     Whitehall Co. Jewellers(R), Lundstrom Jewelers(R) and Marks Bros.
Jewelers(TM) are registered trademarks in the United States.

EMPLOYEES

     As of January 31, 1998 the Company had approximately 1,300 employees,
including approximately 1,200 store level employees.  The Company usually hires
a limited number of temporary employees during each Christmas selling season.
None of the Company's employees are represented by a union.  The Company
believes that its relations with its employees are good.

REGULATION

     The Company's operations are affected by numerous federal and state laws
that impose disclosure and other requirements upon the origination, servicing
and enforcement of credit accounts, and limitations on the maximum amount of
finance charges that may be charged by a credit provider.  Although credit to
the Company's customers is provided by third parties without recourse to the
Company based upon a customer's failure to pay, any restrictive change in the
regulation of credit, including the imposition of, or changes in, interest rate
ceilings, could adversely affect the cost or



                                     - 10 -


 
<PAGE>   12


availability of credit to the Company's customers and, consequently, the 
Company's results of operations or financial condition.

     The Company's operations are also affected by federal and state laws
relating to marketing practices in the retail jewelry industry.  In marketing
to its customers, the Company compares many of its prices to "reference
prices." The Company's literature indicates to customers that its reference
price for an item is either the manufacturer's suggested retail price or the
Company's determination of the non-discounted price at which comparable
merchandise of like grade or quality is advertised or offered for sale by
competitive retailers and is not the Company's current selling price or the
price at which it formerly sold such item.  Although the Company believes that
pricing comparisons are common in the jewelry business and that the Company's
practice is in compliance with applicable laws relating to trade practices,
there can be no assurance that this position would be upheld.

ITEM 2.  PROPERTIES

PROPERTIES

     As of April 15, 1998 the Company operated 198 stores in 24 states.  All of
these stores are leased and are located in regional or super-regional malls.
The Company's typical new store lease has a term of 10 years plus the first
partial lease year.  Terms generally include a minimum base rent, a percentage
rent based on store sales and certain other occupancy charges.  At January 31,
1998 the average remaining life of the leases for the Company's stores was
approximately six years.  While there can be no assurance, the Company expects
to be generally able to renew these leases as they expire.

     The Company also leases approximately 24,300 square feet of office and
administrative space in Chicago, Illinois in an office building housing its
corporate headquarters, distribution functions and quality assurance
operations.  This lease expires on May 2, 2004.

ITEM 3. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

     The Company is involved in certain legal actions from time to time arising
in the ordinary course of business, but management believes that none of these
actions, either individually or in the aggregate, will have a material adverse
effect on the Company's results of operations or financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


                                     - 11 -


 
<PAGE>   13


                                      PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

     Incorporated herein by reference to section entitled "Related Stockholder
Matters and Market for the Company's Common Stock" in the Company's 1997 Annual
Report, which is included as Exhibit 13 to this Annual Report on Form 10-K.

ITEM 6. SELECTED FINANCIAL DATA

     Incorporated herein by reference to section entitled "Selected Historical
Financial and Operating Data" in the Company's 1997 Annual Report, which is
included as Exhibit 13 to this Annual Report on Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     Incorporated herein by reference to section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
the Company's 1997 Annual Report, which is included as Exhibit 13 to this
Annual Report on Form 10-K.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          N/A.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


     Incorporated herein by reference to sections entitled "Statements of
Operations," "Balance Sheets," "Statements of Stockholders' Equity (Deficit),"
"Statements of Cash Flows" and "Notes to Financial Statements" in the Company's
1997 Annual Report, which is included as Exhibit 13 to this Annual Report on
Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

        None.



                                     - 12 -


 
<PAGE>   14


                                  PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information contained under the headings "Election of Directors" and
"Executive Officers" in the Proxy Statement (which Proxy Statement will be
filed with the Securities and Exchange Commission on or before May 10, 1998) is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     Except for information referred to in Item 402(a)(8) of Regulation S-K,
the information contained under the headings "Election of Directors" and
"Executive Compensation and Other Information" in the Proxy Statement (which
Proxy Statement will be filed with the Securities and Exchange Commission on or
before May 10, 1998) is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information contained under the heading "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement (which Proxy Statement
will be filed with the Securities and Exchange Commission on or before May 10,
1998) is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information contained under the heading "Certain Relationships and
Related Transactions" in the Proxy Statement (which Proxy Statement will be
filed with the Securities and Exchange Commission on or before May 10, 1998) is
incorporated herein by reference.



                                     - 13 -


 
<PAGE>   15


                                   PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

          (a)(1)    Financial Statements
                    --------------------             


          The following financial statements are filed as part of this report:

               Report of Independent Public Accountants.*

               Balance Sheets of the Company as of January 31, 1998 and 1997.*

               Statements of Operations of the Company for the years ended
               January 31, 1998, 1997 and 1996.*

               Statements of Stockholders' Equity (Deficit) of the Company for
               the years ended January 31, 1998, 1997 and 1996.*

               Statements of Cash Flows of the Company for the years ended
               January 31, 1998, 1997 and 1996.*

               Notes to Financial Statements.*

_________________________
   *   Incorporated herein by reference from the Company's 1997 Annual Report.


          (a)(2)  Financial Statement Schedules
                  ---------------------------
                  Report of Independent Public Accountants on Finanical 
                  Statement Schedule                                  Page 17
                  Schedule II - Valuation and Qualifying Accounts     Page 18


        All other schedules for which provision is made in the applicable
   accounting regulation of the Securities and Exchange Commission are not
   required under the related instructions or are inapplicable, and therefore
   have been omitted.

          (a)(3) Exhibits

          The following Exhibits are filed herewith or incorporated herein:


EXHIBIT NO.         DESCRIPTION
     3.1            Restated Certificate of Incorporation of the Company (1)

     3.2            Restated By-Laws of the Company (1)

     4.1            Stockholders Rights Plan (2)

     4.2            Certificate of Designations of Series A Junior Participating
                    Preferred Stock (1)

     4.3            Indenture governing the Notes dated as of April 15, 1996
                    between the Company and Norwest Bank Minnesota, National
                    Association, as Trustee (2)                             
                                                                            
     4.4            Form of Series C Notes (included in Exhibit 4.3 to this 
                    Form 10-K) (2)

     4.5            Form of Series D Notes (included in Exhibit 4.3 to this Form
                    10-K) (2)

     4.6            First Supplemental Indenture to Indenture (incorporated by
                    reference to Exhibit 4.4 of the Registration Statement on 
                    Form S-1 (Commission File No. 333-0403))                  

     4.7            Second Supplemental Indenture to Indenture

     10.1           Second Amended and Restated Registration Agreement (2)


                                    - 14 -
<PAGE>   16
     10.2           Letter Agreements re: Incentive Stock Option dated        
                    September 28, 1995 between the Company and each of Hugh M.
                    Patinkin, John R. Desjardins and Matthew M. Patinkin,     
                    respectively (1) (3)                                      
                                                                              
     10.3           Letter Agreements re: Restricted Stock Awards dated
                    September 28, 1995 between the Company and each of Hugh M. 
                    Patinkin, John R. Desjardins and Matthew M. Patinkin (1)(3)

     10.4           Letter Agreements re: Incentive Compensation dated September
                    28, 1995 between  the Company and each of Hugh M.           
                    Patinkin, John R. Desjardins and Matthew M. Patinkin (1)    
                    (3)                                                         

     10.5           Company's 1995 Executive Incentive Stock Option Plan (1) (3)

     10.6           Letter Agreement re: Incentive Stock Option between the 
                    Company and Lynn D. Eisenheim (1) (3)

     10.7           1996 Long-Term Incentive Plan (2) (3)  
     
     10.8           Amended and Restated Private Label Revolving Credit Plan 
                    Agreement, dated May 31, 1996, between the Company and   
                    Bank One, N.A. (2)                                       
                                                                             
     10.9           Lease dated May 14, 1992 between the Company and New  
                    York Life Insurance Company relating to the Company's 
                    corporate headquarters (1)                            
                                                                          
     10.10          Revolving Credit, Term Loan and Gold Consignment Agreement, 
                    dated as of May 3, 1996, among the Company, the Banks (as   
                    defined therein), The First National Bank of Boston and     
                    Rhode Island Hospital Trust National Bank, as Agent for the 
                    Banks, governing the Bank Facility and the Gold Consignment 
                    Facility, as amended by the First Amendment thereto, the    
                    Second Amendment thereto and the Third Amendment thereto (4)

     10.11          Executive Severance Agreements each dated May 7, 1996,   
                    between the Company and each of Hugh M. Patinkin, John R.
                    Desjardins, Matthew M. Patinkin and Lynn D. Eisenheim (2)
                    (3)                                                      
                                                                             
     10.12          ESOP Restructuring Agreement, dated as of March 29, 1996,
                    between the Company and the Marks Bros. Jewelers, Inc.   
                    Employee Stock Ownership Trust (2)                       
                                                                             
                                                                             

     10.13          1997 Long-Term Incentive Plan (incorporated by reference    
                    to exhibits filed with the Company's Registration Statement 
                    on Form S-8 (Registration No. 333-47601)) (3)               
                                                                                
     10.14          Fourth Amendment to Revolving Credit, Term Loan and Gold    
                    Consignment Agreement, dated as of March 14, 1997, among the
                    Company, the Banks (as defined therein),    The First       
                    National Bank of Boston and Rhode Island Hospital Trust     
                    National Bank, as Agent for the Banks, governing the Bank   
                    Facility and the Gold Consignment Facility (5)              
                                                                                
     10.15          Amended and Restated Employee Stock Ownership Plan (5)

     10.16          1998 Non-Employee Directors Stock Option Plan (incorporated
                    by reference to exhibits filed with the Company's
                    Registration Statement on Form S-8 (Registration No.
                    333-5015) (3)

     10.17          401(k) Plan (3)

     10.18         Fifth Amendment to Revolving Credit, Term Loan and Gold    
                   Consignment Agreement, dated as of November 13, 1997, among
                   the Company, the Banks (as defined therein), The First     
                   National Bank of Boston and Rhode Island Hospital Trust    
                   National Bank, as Agent for the Banks, governing the Bank  
                   Facility and the Gold Consignment Facility                 
                                                                              
     13            1997 Annual Report

     23            Consent of Coopers & Lybrand, L.L.P.

     24            Powers of Attorney (included on signature page)

     27            Financial Data Schedules.



                                     - 15 -


 
<PAGE>   17

_______________________
(1)  Incorporated herein by reference to the exhibits filed with the
     Company's Registration Statement on Form S-1, as amended
     (Registration No. 333-1794).

(2)  Incorporated herein by reference to the exhibits filed with the
     Company's Registration Statement on Form S-1, as amended
     (Registration No. 333-0403).

(3)  Represents management contract or compensatory plan or arrangement.

(4)  Incorporated herein by reference to the exhibits filed with the
     Company's Registration Statement on Form S-1, as amended
     (Registration No. 333-13903).

(5)  Incorporated herein by reference to the exhibits filed with the Company's 
     Annual Report on Form 10-K for the fiscal year ended January 31, 1997.


      (b)  Reports on Form 8-K

           None.


                                     - 16 -


 
<PAGE>   18

                        [COOPERS & LYBRAND LETTERHEAD]





REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors of
Marks Bros. Jewelers, Inc.

Our report on the financial statements of Marks Bros. Jewelers, Inc. has been
incorporated by reference in this Form 10-K from page 28 of the 1997 Annual
Report of  Mark Bros. Jewelers, Inc.  In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule which is included on page 18 of this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

                                                /s/ Coopers & Lybrand L.L.P.



Chicago, Illinois
March 12, 1998










                                     - 17 -


 
<PAGE>   19




                           MARKS BROS. JEWELERS, INC.

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

               TWELVE MONTHS ENDED JANUARY 31, 1996, 1997 AND 1998
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>                                                                                                                 
       COLUMN A                          COLUMN B                    COLUMN C              COLUMN D       COLUMN E       
---------------------------------  --------------------  --------------------------------  ---------    --------------    
                                   BALANCE AT            CHARGED TO              CHARGED                                  
                                   BEGINNING             COSTS AND               TO OTHER                   BALANCE         
           DESCRIPTION             OF PERIOD             EXPENSES                ACCOUNTS  DEDUCTION       OF PERIOD      
---------------------------------  --------------------  --------------------  ----------  ---------    --------------    
<S>                                <C>                   <C>                   <C>         <C>          <C>               
Twelve months ended 1/31/96:                                                                                              
 Allowance for doubtful accounts.   $               505  $                918      --      $     858(1) $          565    
                                   ====================  ====================              =========    ==============    
 Inventory allowance.............                 1,564                 2,045      --          2,346             1,263    
                                   ====================  ====================              =========    ==============    
Twelve months ended 1/31/97                                                                                               
 Allowance for doubtful accounts.  $                565  $              1,037      --            894(1)            708    
                                   ====================  ====================              =========    ==============    
 Inventory allowance.............                 1,263                 2,662      --          2,214             1,711    
                                   ====================  ====================              =========    ==============    
Twelve months ended 1/31/98                                                                                               
 Allowance for doubtful accounts.  $                708  $              1,182      --      $   1,206               684    
                                   ====================  ====================              =========    ==============    
 Inventory allowance.............                 1,711                 3,764      --          3,776             1,699    
                                   ====================  ====================              =========    ==============    
</TABLE>
        
Note:

(1)  Uncollectible items written off, less recoveries of items previously
written off.



                                     - 18 -
                                       

<PAGE>   20

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, this Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.


Date: April 24, 1998                MARKS BROS. JEWELERS, INC.

                              By:   /s/ John R. Desjardins
                                    ----------------------
                                    John R. Desjardins
                                    Executive Vice President, Finance &
                                    Administration, Treasurer and
                                    Secretary
                                    
                        POWER OF ATTORNEY AND SIGNATURES

     Each of the undersigned officers and directors of Marks Bros Jewelers,
Inc. hereby severally constitutes and appoints Hugh M. Patinkin and John R.
Desjardins, and each of them singly, our true and lawful attorneys, with full
power to them and each of them singly, to sign for us in our names in the
capacities indicated below, all amendments to this Annual Report on Form 10-K,
and generally to do all things in our names and on our behalf in such
capacities to enable Marks Bros. Jewelers, Inc. to comply with the provisions
of the Securities Exchange Act of 1934, as amended, and all requirements of the
Securities and Exchange Commission.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Registration Statement has been signed by the following persons on behalf of
the registrant and in the capacities indicated on this 24th day of April, 1998.







     Name                                  Capacity
     ----                                  --------

/s/ Hugh M. Patinkin        Chairman, President and Chief Executive Officer
 ----------------------     (principal executive officer) and Director
    Hugh M. Patinkin                                                  


/s/ John R. Desjardins      Executive Vice President, Finance & Administration,
 ----------------------     Treasurer and Secretary (principal financial 
                            officer) and Director                        
John R. Desjardins                                                       
                                                                         


/s/ Matthew M. Patinkin     Director
-----------------------
    Matthew M. Patinkin


/s/ Norman J. Patinkin      Director
-----------------------
Norman J. Patinkin


/s/ Jack A. Smith           Director 
-----------------------              
Jack A. Smith                        
                                     
                                     
/s/ Daniel H. Levy          Director 
-----------------------     
    Daniel H. Levy




                                     - 19 -