SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   ----------
                                   FORM 10-K/A
                                 AMENDMENT NO. 1
(Mark One)

   [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (FEE REQUIRED)

                  For the Fiscal Year Ended December 31, 1997

   [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                For the transition period from _______ to _______

                           Commission File No. 1-2782

                          SIGNAL APPAREL COMPANY, INC.
             (Exact name of Registrant as specified in its charter)

                  Indiana                                       62-0641635
          (State of Incorporation)                           (I.R.S. Employer
                                                          Identification Number)

200 Manufacturers Road, Chattanooga, Tennessee                    37405
  (Address of principal executive offices)                     (zip code)

Registrant's telephone number, including area code (423) 266-2175
Securities registered pursuant to Section 12(b) of the Act:

                                                          Name of each exchange
              Title of each class                          on which registered
     Common Stock: Par value $.01 a share                New York Stock Exchange

Indicate  by a 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 requirement 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/A or any  amendment to
this Form 10-K/A.                                                            [_]

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the  registrant:  $4,948,685,  calculated  by using the closing price on the New
York  Stock  Exchange  on April 20,  1998 of the  Company's  Common  stock,  and
excluding  common  shares owned  beneficially  by directors  and officers of the
Company,  and by certain other entities,  who may be deemed to be  "affiliates",
certain of whom disclaim such status.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class                              Outstanding as of April 20, 1998
           -----                              --------------------------------
Common Stock, $.01 par value                          32,661,460 shares


<PAGE>


The registrant hereby amends the following items, financial statements, exhibits
or other  portions of its Annual Report on Form 10-K for the year ended December
31, 1997, which was filed with the Commission on March 31, 1998:

Part III, Item 10:

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Directors

The following is a list of the names, ages,  positions held with the Company and
business experience during the past five years of all directors:

<TABLE>
<CAPTION>
                                                                                           Year First
                                                   Business Experience                      Became a
Name and Address             Age                    and Directorships                       Director
----------------             ---                   -------------------                     ----------
<S>                          <C>    <C>                                                       <C> 
Jacob I. Feigenbaum          50     President  of  Miracle  Suit by Swim  Shaper  since       1994
c/o Miracle Suit                    February  1996;  President  and  owner  of  Sea  Q.
1411 Broadway, 30th                 America,  August 1994 to 1996;  President  of Robby
  Floor                             Len Swimwear  division of Apparel America,  1980 to
New York, NY  10018                 1994.

Paul R. Greenwood            51     Managing  General Partner of Walsh Greenwood & Co.,       1990
One East Putnam Ave.                a broker-dealer  engaged in effecting  transactions
Greenwich, CT  06830                in securities for others and for its own account.

David E. Houseman            57     Chief  Executive  Officer  since  September  1997;        1997
200-A Manufacturers                 President  from  August  1997 to  September  1997;  
  Road                              Chief   Operating   Officer  and  Chief  Financial  
Chattanooga,TN 37405                Officer  since June 1997;  Senior  Vice  President  
                                    Finance  and  Chief  Financial  Officer  of  Bayer  
                                    Clothing Group, Inc., April 1993 to June 1997.      
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                                           Year First
                                                   Business Experience                      Became a
Name and Address             Age                    and Directorships                       Director
----------------             ---                   -------------------                     ----------
<S>                          <C>    <C>                                                       <C> 
Thomas A. McFall             44     Chairman,  Weatherly  Financial  Companies,  since        1997
950 Lakeview Pkwy.                  1984.
Vernon Hills, IL
  60061



John W. Prutch               45     President  of  the  Company   since  October  1997;       1997
1088 National Pkwy.                 President,    GIDI   Holdings,   Inc.,   imprinted
Schaumburg, IL 60173                activewear   manufacturer,   from   July  1994  to
                                    October 1997;  President,  Merchant  Capital Group,
                                    Ltd., 1984 to January 1993.

Leon Ruchlamer               68     Vice  Chairman  of  the  Board  of  Directors  from       1995
200-A Manufacturers                 August 1995 to December 1997;  President,  February
  Road                              1995 to August 1995;  Consultant within apparel and
Chattanooga,TN  37405               textile industry, 1992 to January 1995.

Stephen Walsh                53     Chariman of the Board of Directors since September        1990
3333 New Hyde Park                  1997;  General  Partner of Walsh  Greenwood & Co., 
  Road                              broker-dealer engaged in effecting transactions in 
North Hills, NY                     securities for others and for its own account.     
 11040                              
</TABLE>

     The information set forth above with respect to the principal occupation or
employment of each nominee  during the past five years has been furnished to the
Company by the respective director.

     Pursuant to an agreement among the Company and certain  shareholders  (WGI,
LLC, FS Signal  Associates,  L.P. and FS Signal  Associates II, L.P.), FS Signal
Associates,  L.P. and FS Signal  Associates II, L.P.,  together,  have the right
until 2001 to nominate two directors to be included in the slate of nominees. As
of the date of this  Report,  neither FS Signal  Associates,  L.P. nor FS Signal
Associates II, L.P. has exercised this right by nominating any  individuals  for
election to the Board of Directors.

     Pursuant to an agreement between the Company and Weatherly  Financial,  the
Company will use its best efforts to cause two (2)


<PAGE>


persons  selected by Weatherly  Financial  (which  persons  shall be  reasonably
acceptable to the Company) to be nominated by the  Company's  Board of Directors
for election as directors of the Company at the Company's  Annual Meetings until
1999 or the termination of said agreement,  whichever is sooner.  Messrs. McFall
and Prutch were  nominated as directors at the 1997 Annual  Meeting  pursuant to
this agreement.

     The Board of Directors held six meetings in 1997.

Executive Officers

The  following  is a list of the names,  ages,  positions  with the  Company and
business  experience during the past five years of the executive officers of the
Company:

Name                        Age           Office and Business Experience
----                        ---           ------------------------------
David E. Houseman            57     Director;   Chief  Executive  Officer  since
                                    September 1997; Chief Operating  Officer and
                                    Chief  Financial  Officer  since  June 1997;
                                    President  from  August  1997  to  September
                                    1997;  Senior  Vice  President  Finance  and
                                    Chief  Financial  Officer of Bayer  Clothing
                                    Group, Inc., April 1993 to June 1997.       

Leslie W. Levy               60     Vice  President of the Company and President
                                    of the Heritage  Sportswear business unit of
                                    the Company since 1977.

Robert J. Powell             49     Vice  President  of  Licensing  and  General
                                    Counsel  since  September  1992;   Secretary
                                    since  January  1993;   Vice   President  of
                                    International  and  Domestic   Licensing  of
                                    Champion   Products,   Inc.,   May  1990  to
                                    September   1992;    General   Counsel   and
                                    Secretary of Champion  Products,  Inc., June
                                    1987 to September 1992.

John W. Prutch               45     President  since  October  1997;  President,
                                    GIDI Holdings,  Inc.,  imprinted  activewear
                                    manufacturer,  July  1994 to  October  1997;
                                    President,  Merchant  Capital  Group,  Ltd.,
                                    1984 to January 1993.

Officers  are  elected  annually  and  serve  at the  pleasure  of the  Board of
Directors.  There is no family  relationship  between any of the above executive
officers and directors.


<PAGE>


Section 16(a) Beneficial Ownership Reporting Compliance

Section  16(a) of the  Securities  Exchange Act of 1934 and  regulations  of the
Securities and Exchange  Commission  thereunder require the Company's  executive
officers  and  directors  and  persons  who own  more  than ten  percent  of the
Company's Common Stock, as well as certain  affiliates of such persons,  to file
initial  reports of  ownership  and monthly  transaction  reports  covering  any
changes in ownership  with the  Securities  and Exchange  Commission and the New
York Stock Exchange.  Executive officers, directors and persons owning more than
ten  percent of the  Company's  Common  Stock are  required  by  Securities  and
Exchange  Commission  regulations to furnish the Company with copies of all such
reports  they file.  Based  solely on its  review of the copies of such  reports
received by it and written  representations  that no other reports were required
for those persons, the Company believes that during 1997 all filing requirements
applicable  to its  executive  officers,  directors  and owners of more then ten
percent of the Company's  Common Stock were complied  with,  except for one late
filing by each of Messrs. Prutch, Ruchlamer, Feigenbaum, and McFall, and by each
of Walsh  Greenwood  & Co.,  WG  Partners,  L.P.,  WG  Trading  Company  Limited
Partnership,  FS Signal Associates,  L.P. and FS Signal Associates II, L.P., and
two late filings by each of WGI, LLC. and Messrs. Walsh and Greenwood.


<PAGE>


Part III, Item 11:

EXECUTIVE COMPENSATION

Set forth below is a summary of the annual and  long-term  compensation  paid by
the Company for each of the last three  fiscal  years to: (i) Barton J.  Bresky,
the  Company's  Chief  Executive  Officer from December 6, 1996 until August 20,
1997 (ii) David E. Houseman, Chief  Executive  Officer since September 1997, and
(iii) the  Company's  other  four most  highly  compensated  executive  officers
serving as of December 31, 1997 (the "Named Executives").

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                             Annual Compensation
                                                  -----------------------------------------
                                                                                                    Long-Term
                                                                                                   Compensation
                                                                                                       Awards
                                                                                                   ------------
                                                                                  Other              Securities           All
                                                                                  Annual             Underlying          Other
      Name and Principal                          Salary          Bonus        Compensation         Options/SARs      Compensation
          Position                 Year             ($)            ($)              ($)               (#)(2)              (3)
----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>            <C>               <C>          <C>                  <C>                <C>  
Barton J. Bresky, ...........      1997           223,383           --              --                265,000             7,378
 President and Chief ........      1996           108,608           --            40,092                 --               7,273
 Executive Officer ..........      1995              --             --              --                   --                --
 (until August 1997)

David E. Houseman, ..........      1997            90,805           --           104,226(1)           300,000               562
 Chief Executive ............      1996              --             --              --                   --                --
 Officer,  ..................      1995              --             --              --                   --                --
 Chief Operating
 Officer, and Chief
 Financial Officer

Robert J. Powell, ...........      1997           180,418           --              --                150,000             4,868
  Vice President ............      1996           185,000           --              --                   --               5,645
  and Secretary .............      1995           191,125           --              --                 50,000             5,595

John W. Prutch, .............      1997            31,705           --              --                150,000                87
 President (since ...........      1996              --             --              --                   --                --
 October 1997) ..............      1995              --             --              --                   --                --

Leslie W. Levy, .............      1997           145,192           --              --                   --              12,514
 Vice President .............      1996           145,000           --              --                   --               9,062
 and President, .............      1995           145,000           --              --                   --               8,872
 Heritage Sportswear
 Division
</TABLE>


<PAGE>


NOTES TO SUMMARY COMPENSATION TABLE

(1)  $100,475 of this amount  consisted of moving and temporary  living expenses
     and related reimbursements.

(2)  Reflects  the number of shares of the  Company's  Common  Stock  subject to
     options granted to the Named Executive Officers for the periods presented.

(3)  These amounts  include the portion of life  insurance  premiums paid by the
     Company  that   represents  term  life  insurance  on  each  of  the  Named
     Executives. In 1997, these amounts were as follows: Mr. Bresky, $4,242; Mr.
     Houseman, $562; Mr. Powell,  $1,117;Mr.  Prutch, $87; and Mr. Levy, $9,547.
     All other amounts represent Company matching contributions to a 401(k) plan
     maintained  by the Company for the  accounts  of the Named  Executives.  In
     1997,  these amounts were as follows:  Mr. Bresky,  $3,136;  Mr.  Houseman,
     none; Mr. Powell, $3,751; Mr. Prutch, none; and Mr. Levy, $2,967.

     The table below sets forth certain information concerning grants of options
during the year ended December 31, 1997, to the Company's Named Executives.  The
plan does not provide for the granting of stock appreciation rights.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                             Individual Grants
                                       ----------------------------                                   Potential Realizable Value
                                                        % of Total                                    at Assumed Annual Rates of
                                                          Options                                      Stock Price Appreciation 
                                                        Granted to      Exercise or                        for Option Term*     
                                         Options       Employees In      Base Price     Expiration    --------------------------
Name                                   granted (#)      Fiscal Year      ($/Share)         Date         5%($)          10%($)   
--------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                <C>           <C>             <C>           <C>            <C>     
Barton J. Bresky(1)                     250,000            10.01%        $  2.375         3/03/02      $164,042       $362,490
                                         15,000              0.6%           2.375         8/21/02         Nil            Nil

David E. Houseman(2)                    300,000            14.02%           2.50          6/02/02         Nil            Nil

Robert J. Powell(3)                     150,000             6.01%           2.375         3/03/02        98,425        217,494

John W. Prutch(4)                       150,000             6.01%           2.375        10/02/02         Nil           66,509

Leslie W. Levy                             --                 --               --            --           --             --
</TABLE>

*    The dollar gains under these columns result from  calculations  assuming 5%
     and 10% growth rates as required by the Securities and Exchange  Commission
     and


<PAGE>


     are not intended to forecast  future price  appreciation  of Company Common
     Stock.  The  gains  reflect  a future  value  based  upon  growth  at these
     prescribed rates.

(1)  Options with respect to 250,000 shares were issued under the Company's 1985
     Stock  Option Plan as a component  of Mr.  Bresky's  compensation,  with an
     exercise  price equal to the market  price on the date of grant.  Under the
     original  terms of this grant,  options  with respect to 83,333 such shares
     vested two years after the date of grant and the remaining  166,667 options
     vested three years after the date of grant.  Options with respect to 15,000
     additional  shares were  issued  pursuant to the  Amendment  to  Employment
     Agreement  dated  August 21, 1997,  exercisable  one year after the date of
     grant with an exercise price that was $1.4375 above the market price on the
     date of grant.  Pursuant  to the  August  1997  Amendment  to Mr.  Bresky's
     Employmet Agreement, vesting of the original options for 250,000 shares was
     accellerated to March 2, 1998.

(2)  Options were issued to induce Mr.  Houseman to accept  employment  with the
     Company, with 200,000 options vesting two years after the date of the grant
     and the  remaining  100,000  options  vesting three years after the date of
     grant. The options were issued with an exercise price that was $1.125 above
     the market price on the date of grant.

(3)  Options  were  issued  under the  Company's  1985  Stock  Option  Plan as a
     component  of Mr.  Powell's  compensation.  Options with respect to 100,000
     shares  vest two years  after the date of grant  and the  remaining  50,000
     options  vest three years after the date of grant.  The options were issued
     with an  exercise  price that was equal to the market  price on the date of
     grant.

(4)  Options  were  issued to induce Mr.  Prutch to accept  employment  with the
     Company,  2/3 of the options vest two years after the date of grant and the
     remaining 1/3 of the options vest three years after the date of grant.  The
     options  were issued with an exercise  price that is subject to  adjustment
     and was $.625 above the market price on the date of grant.


<PAGE>


The  following  table  provides  information  about  options  held by the  Named
Executives.  The 1985 Stock  Option Plan does not  provide  for the  granting of
stock appreciation rights.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
                                                                                   Number of
                                                                                   Securities               Value of
                                                                                   Underlying               Unexercised
                                                                                   Unexercised              In-the-Money
                                                                                   Options/SARs at          Options/SARs at
                                                                                   FY-End (#)               FY-End($)(1)

                                 Shares Acquired             Value                 Exercisable/             Exercisable/
Name                             on Exercise (#)          Realized ($)             Unexercisable            Unexercisable
----                             ----------------         ------------             -------------            -------------
<S>                                    <C>                    <C>                 <C>                            <C>
Barton J. Bresky                       --                     --                  250,000 exer./                 --
                                                                                   15,000 unexer.                --

David E. Houseman                      --                     --                      0 exer./                   --
                                                                                  300,000 unexer.                --
Robert J. Powell
                                       --                     --                  125,000 exer./                 --
                                                                                  150,000 unexer.                --
John W. Prutch
                                       --                     --                      0 exer./                   --
                                                                                  150,000 unexer.                --
Leslie W. Levy
                                       --                     --                  30,000 exer./                  --
                                                                                      0 unexer.                  --
</TABLE>

(1)  Value of unexercised in-the-money options based on a fair market value of a
     share of the Company's Common Stock of $1.25 as of December 31, 1997. Based
     on such value, none of the options held by any of the Named Executives were
     "in-the-money" at December 31, 1997.


<PAGE>


Directors' Compensation

     Directors who are not employees of the Company are paid (i) $4,000 for each
Board  meeting  attended  in person up to a maximum of $20,000 per year and (ii)
$500 for each Board committee meeting attended in person or telephonically.

Employment Agreements

     David E. Houseman is employed as the  Company's  Chief  Executive  Officer,
Chief Operating  Officer and Chief Financial  Officer.  Pursuant to the terms of
his employment  agreement,  which  commenced June 2, 1997, Mr.  Houseman's  base
salary is $175,000  during the first year of the agreement (June 2, 1997 to June
1, 1998),  $200,000  during the second year of the agreement and $225,000 during
the third year of the agreement,  with the right to participate in the Company's
bonus plan and receive an annual  bonus of up to 50% of his base salary  (with a
minimum bonus payment of $75,000 guaranteed after the first year of employment).
As a further  inducement to employment,  the Company agreed to reimburse certain
additional  expenses  related  to Mr.  Houseman's  relocation  to the  Company's
corporate  offices in  Chattanooga.  The Company also  granted Mr.  Houseman (i)
options  to  purchase  300,000  shares of the  Company's  Common  Stock and (ii)
warrants to purchase  50,000  shares of the Company's  Common Stock,  both at an
exercise  price of $2.50 per share ($1.125 above the market price on the date of
grant).  The warrants were  immediately  exercisable and the options vest at the
rate of  200,000  shares two years from the date of grant,  and  100,000  shares
three years from the date of grant.  All such  warrants and options  expire five
years from the date of grant.  The shares  subject to the  warrants  and options
granted to Mr. Houseman represent  approximately  three percent of the Company's
outstanding  shares of Common  Stock on the date of grant,  and the  Company has
agreed  that upon the  issuance  of  additional  shares  of Common  Stock by the
Company (other than to Mr.  Houseman),  the Company shall issue to Mr.  Houseman
options and/or warrants to purchase  additional shares of Common Stock such that
the total  number of shares  subject  to  options  and/or  warrants  held by Mr.
Houseman shall always equal a minimum of three percent of the outstanding shares
of the Company's  Common Stock.  Any such  additional  options or warrants shall
expire five years from the date of grant,  shall have a vesting schedule similar
to his initial  options/warrants  and shall have an exercise  price equal to the
market  price on the date of grant.  Additionally,  Mr.  Houseman is entitled to
participate in all other incentive bonus,  stock option,  savings and retirement
programs and benefit programs  maintained for the Company's  executive  officers
from time to time. In the event that Mr. Houseman's employment is terminated for
cause or, under certain  circumstances,  Mr. Houseman voluntarily terminates his
employment,  the Company  shall pay Mr.  Houseman (or his legal  representative)
only  those  amounts  of  compensation  attributable  to  periods  prior  to the
termination. If the termination is for cause, all outstanding stock options held
by Mr. Houseman shall


<PAGE>


expire.  If Mr.  Houseman  voluntarily  terminates his  employment,  all options
vested as of the date of termination  shall expire ninety days after the date of
termination.  In the event that Mr. Houseman's  employment is terminated without
cause (as  defined in his  employment  agreement),  and if such  termination  of
employment  occurs before June 1, 1999,  then Mr.  Houseman shall be entitled to
payments  equal to either one year's base salary or his base salary through June
1, 1999,  whichever is greater.  Furthermore,  all unvested  options or warrants
shall  become  proportionately  exercisable  based upon the number of months Mr.
Houseman has been  employed by the Company  relative to the vesting  schedule of
such options or warrants.  Any vested  Incentive Stock Options will expire three
months from the date of termination,  and any vested Non-Incentive Stock Options
or warrants will expire one year from the date of termination.  In addition, Mr.
Houseman  will be paid a pro-rata  share of any annual bonus  otherwise  payable
based upon the number of complete months he has been employed during that fiscal
year. In the event that Mr.  Houseman's  employment is terminated  without cause
(as defined in his employment agreement),  and if such termination of employment
occurs after June 1, 1999 but prior to June 2, 2000,  then Mr.  Houseman will be
entitled to one year's base  salary.  Any vested  Incentive  Stock  Options will
expire three months from the date of termination,  and any vested  Non-Incentive
Stock Options or warrants will expire one year from the date of termination.  In
addition,  Mr.  Houseman  will be paid a  pro-rata  share  of any  annual  bonus
otherwise  payable based upon the number of complete months he has been employed
during that fiscal year. Mr. Houseman's  employment agreement expires on June 1,
2000.

     John W.  Prutch is  employed as the  Company's  President.  Pursuant to the
terms of his employment agreement, which commenced October 2, 1997, Mr. Prutch's
base salary is $150,000 with the right to receive an annual bonus.  As a further
inducement to employment, the Company granted Mr. Prutch options pursuant to the
Company's  1985 Stock Option Plan to purchase  150,000  shares of the  Company's
Common  Stock at an exercise  price of $2.375 per share,  subject to  adjustment
($.625 above the market price on the date of grant),  with such options  vesting
at the rate of  100,000  shares  two  years  after  the  date of  grant  and the
remaining  50,000  shares three years after the date of grant.  All such options
expire five years from the date of grant.  Additionally,  Mr. Prutch is entitled
to  participate  in  all  other  incentive  bonus,  stock  option,  savings  and
retirement  programs and benefit programs maintained for the Company's executive
officers  from  time to time.  In the  event  that Mr.  Prutch's  employment  is
terminated  for cause or, under certain  circumstances,  Mr. Prutch  voluntarily
terminates  his  employment,  the  Company  shall pay Mr.  Prutch  (or his legal
representative) only those amounts of compensation attributable to periods prior
to the  termination.  If the  termination is for cause,  all  outstanding  stock
options held by Mr. Prutch shall expire.  If Mr. Prutch  voluntarily  terminates
his  employment,  all options vested as of the date of termination  shall expire
ninety days after the date of termination. In the event that Mr.


<PAGE>


Prutch's  employment is terminated  without cause (as defined in his  employment
agreement  then he will be entitled to payments equal to one year's base salary.
Furthermore,  all unvested  options shall become  immediately  exercisable.  Any
vested  Incentive  Stock  Options  will  expire  three  months  from the date of
termination,  and any vested  Non-Incentive  Stock  Options will expire one year
from the date of termination.

     Barton J. Bresky was employed as President and Chief  Executive  Officer of
the Company from  December 6, 1996,  until his  resignation  on August 20, 1997.
Pursuant to the terms of his employment agreement, Mr. Bresky was paid an annual
base salary of $250,000.  Pursuant to the terms of the  Amendment to  Employment
Agreement dated August 21, 1997, by and between the Company and Mr. Bresky,  Mr.
Bresky will receive  severance  payments equal to one year's salary,  his health
benefits will be continued until August 19, 1998,  vesting of optons  previously
granted  with  respect  to  250,000  shares of the  Company's  Common  Stock was
accellerated to March 2, 1998 and he received an option to purchase up to 15,000
shares of the Company's  Common Stock at an exercise  price of $2.375 per share,
vesting August 21, 1998 and exercisable until August 21, 2002.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Jacob I.  Feigenbaum,  Paul R.  Greenwood and Stephen Walsh are the current
members of the Board's Compensation Committee.

     Effective March 31, 1995, the Company entered into a credit  agreement (the
"WGI Credit  Agreement")  with Walsh  Greenwood & Co. ( "Walsh  Greenwood"),  an
entity in which  Paul R  Greenwood  is a general  partner.  Under the WGI Credit
Agreement,  Walsh Greenwood lent the Company  $15,000,000 for a three-year term.
The  terms  of the  WGI  Credit  Agreement  initially  included:  (i) a  maximum
borrowing of  $15,000,000;  (ii) the issuance to Walsh  Greenwood of warrants to
purchase  1,500,000  shares of the  Company's  Common  Stock at $2.25 per share,
which warrants vested on the basis of 100,000 warrants for each $1,000,000 drawn
and  which are  exercisable  for three  years  from  vesting  (the  "Fixed  Rate
Warrants");  (iii) the  issuance  to Walsh  Greenwood  of  warrants  to purchase
1,500,000  shares of the Company's  Common Stock at a 25% discount to the 20 day
average trade price in December 1996,  which warrants vested upon the commitment
by Walsh  Greenwood  of the full amount of the credit and which are  exercisable
for three years beginning January 1, 1997 at a price (pursuant to such terms) of
approximately $2.42 per share (the "Discount Rate Warrants");  (iv) antidilution
provisions and registration  rights for all such warrants no more favorable than
the  equivalent  provisions in other  outstanding  warrants  issued to principal
shareholders of the Company,  except that the registration rights included three
demand  registrations;  (v) stated interest upon the outstanding  balance of the
credit at the rate of 25% per  annum;  (vi) all  borrowings  were  secured  by a
security  interest  in all  assets  of the  Company  then  pledged  to two other
lenders,


<PAGE>


subordinate to the security interests of such lenders;  and (vii) all borrowings
could be used  only for  working  capital  and  could  not be used to repay  any
principal of any bank debt.  The WGI Credit  Agreement  also  contained  certain
covenants  regarding  the  operation  of  the  Company's   business,   including
limitations on investments and incurring  additional  indebtedness  and required
compliance  with  all of the  financial  covenants  contained  in the  Company's
factoring  agreement  with its senior  lender,  BNY Financial  Corporation  (the
"Senior  Lender").   All  indebtedness   under  the  WGI  Credit  Agreement  was
subordinated to the Company's obligations to its Senior Lender.

     As  additional  conditions  to the  foregoing  extension  of credit,  Walsh
Greenwood  required  the Company  and FS Signal to enter into a  contemporaneous
agreement  (the  "Preferred  Stock  Agreement")  pursuant to which,  among other
things:  (i) FS  Signal  and  Walsh  Greenwood  (as  the  holders  of all of the
Company's  outstanding  preferred  stock) agreed to forego accrual of all future
dividends  from  January  1,  1995,  until the  principal  and  interest  of all
borrowings  under the WGI Credit Agreement were paid in full; (ii) FS Signal and
Walsh Greenwood  granted the Company the right,  after repayment of a $6,500,000
NationsBank  loan  pertaining  to the  Company's  1994  acquisition  of American
Marketing  Works,  Inc. (the "AMW Loan," which was  subsequently  purchased from
NationsBank  by  Walsh  Greenwood)  and the  borrowings  under  the  WGI  Credit
Agreement,  to redeem the  outstanding  shares of preferred stock with shares of
its Common  Stock  valued for such  purpose at $7.00 per share,  which  right of
redemption  extended  until June 30,  1998;  and (iii) FS Signal  granted  Walsh
Greenwood the right to require FS Signal to transfer to Walsh Greenwood, for use
as  consideration  in the exercise of warrants to purchase the Company's  Common
Stock, up to $3,375,000 in stated value of Series C Signal  Preferred Stock held
by FS Signal.

     Effective  August 10,  1995,  Walsh  Greenwood  and the  Company  agreed to
increase the principal  amount  available under the WGI Credit  Agreement to $20
million.  In consideration of this additional  extension of credit,  the Company
issued to Walsh  Greenwood  an  additional  500,000  Fixed Rate  Warrants and an
additional  500,000  Discount  Rate  Warrants.  All Fixed Rate  Warrants and all
Discount  Rate Warrants  have vested and are  presently  exercisable.  Effective
September  25, 1997,  Walsh  Greenwood  exercised  its right under the Preferred
Stock  Agreement,  by notice to FS  Signal,  to  require  FS Signal to  transfer
$3,375,000  in stated value of the Company's  Series C Preferred  Stock to Walsh
Greenwood,  for use as  consideration  in the exercise of  warrants.  In October
1997, the WGI Credit  Agreement and all warrants  issued  pursuant  thereto were
assigned  to WGI,  an  affiliate  of Walsh  Greenwood.  Subsequently,  effective
November 7, 1997,  WGI  exercised  warrants to acquire an aggregate of 4,630,000
additional  shares of Common Stock,  using the  $3,375,000 of Series C Preferred
Stock  transferred by FS Signal to exercise warrants to acquire 1,500,000 shares
at a price of $2.25 per share and  extinguishing  $9,452,120 of debt owed by the


<PAGE>


Company under the WGI Credit  Agreement to exercise:  (i) warrants to acquire an
additional  500,000  shares  at a price of $2.25 per  share;  (ii)  warrants  to
acquire an additional  2,000,000  shares at a price of  approximately  $2.42 per
share  (such  warrants  having an  exercise  price set at a 25%  discount to the
20-day average trading price for the Common Stock on the NYSE in December 1996);
(iii) warrants to acquire an additional  300,000 shares at a price of $7.625 per
share;  and (iv) warrants to acquire an additional  300,000 shares at a price of
$7.06 per share. WGI thereby increased its aggregate  ownership of the Company's
Common Stock from 3,977,349 shares (34.35% of the total  outstanding  shares) to
8,607,349 shares (50.44% of the total outstanding shares).

     From June 1996  through  December  1997,  the Company  incurred  additional
indebtedness  to WGI for funds advanced in an aggregate  amount of  $31,544,000,
bringing the Company's  total  indebtedness to WGI (including  accrued  interest
thereon) to  approximately  $49,995,000  as of December  1997.  These funds were
advanced to the Company on an "as needed" basis with the understanding  that the
additional  indebtedness  would be  documented on the same terms as the existing
WGI Credit Agreement. Additionally, as of December 31, 1996, the Company had not
made all interest payments required by the WGI Credit Agreement and had breached
the  financial  covenants  specified  by the  agreement.  In March  1997,  Walsh
Greenwood  agreed to waive those  conditions.  Finally,  in connection  with the
Company's October 31, 1997 amendment and restatement of the factoring  agreement
with its Senior  Lender  (and  pursuant  to a separate  reimbursement  agreement
between  the  Company  and  WGI),  Walsh  Greenwood  deposited   $15,000,000  of
collateral  with BNY in  support of a portion of the  Company's  borrowing  base
under  the  facility.  As an  inducement  to Walsh  Greenwood  to  provide  such
additional  funding  to the  Company,  and in  connection  with such  waiver and
collateral  deposit,  the Company issued warrants to Walsh Greenwood to purchase
up to 4,500,000  additional  shares of the Company's Common Stock at an exercise
price of $1.75 per share (the  approximate  market  price on the date of grant).
Using a formula  vesting  such  warrants at the rate of 100,000  shares for each
$1,000,000  of  additional  funding (as under the WGI Credit  Agreement),  these
warrants vested as to all 4,500,000  shares upon issuance.  All of such warrants
have antidilution  provisions and registration rights no more favorable than the
equivalent   provisions  in  other  outstanding  warrants  issued  to  principal
shareholders of the Company,  except that the registration  rights shall include
three demand registrations.

     At the 1997 Annual Meeting of the Company, the Shareholders approved a plan
for  restructuring  the Company's debt and preferred  stock (the  "Restructuring
Plan"). The Restructuring  Plan included certain  provisions  negotiated between
the Company and WGI as well as the Company's  exercise (as  described  below) of
certain of its rights  under the  Preferred  Stock  Agreement.  Pursuant  to the
agreement  between the Company and WGI  concerning the  Restructuring  Plan, the
Company applied $20,000,000 of


<PAGE>


increased funding available under the amended and restated  factoring  agreement
with its  Senior  Lender to retire  the  entire  balance  due under the AMW Loan
(which had been  purchased  by WGI) and to reduce its  outstanding  indebtedness
under the WGI Credit Agreement.  The  Restructuring  Plan also provided for: (i)
amendment of all remaining outstanding warrants held by WGI (covering a total of
345,000  shares with an exercise price of $7.06 per share) to reset the exercise
price of such  warrants  to $1.75  per  share  (approximately  equal to the then
current market price);  (ii) issuance to WGI of 8,000,000 shares of Common Stock
valued at approximately $1.98 per share (a premium of approximately 13% over the
then  current  market  price)  in  payment  for  $15,831,950  of  the  remaining
subordinated  debt then owed by the Company to WGI  (representing  a discount on
the debt  repayment of  $1,831,950,  which  equaled the net economic  benefit of
repricing  the  WGI  warrants);  and  (iii)  conversion  of both  the  remaining
outstanding  balance of such debt (approximately  $24,930,400  including accrued
interest) and the $20,513,958.31 in stated value (plus accumulated dividends) of
Series C  Preferred  Stock  held by WGI into a total  of  approximately  454.444
shares of a new Series F Preferred Stock, stated value $100,000 per share.

     The new Series F Preferred Stock accrues cumulative undeclared dividends at
the rate of 9% per annum. These dividends are payable in cash when declared. The
Series F Preferred Stock is not convertible  into Common Stock or into any other
security  issued by the Company,  and does not have any mandatory  redemption or
call features.

     In addition to the  transactions  described  above  between the Company and
WGI, the  Restructuring  Plan  involved the exercise by the Company of its right
under the Preferred Stock  Agreement to redeem all of the remaining  outstanding
shares  (including  accumulated  dividends) of the Company's  Series A Preferred
Stock and Series C Preferred  Stock with shares of Common  Stock valued for such
purpose at $7 per  share.  WGI held  177.969  shares of the  Company's  Series C
Preferred Stock at the time of said redemption.

     Stephen Walsh and Paul R.  Greenwood,  directors of the Company and members
of the  Compensation  Committee  and the  Executive  Committee  of the  Board of
Directors, are the managers of WGI.


Part III, Item 12:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following  table sets forth certain  information  regarding  beneficial
ownership of the  Company's  equity  securities  as of April 20,  1998,  by each
shareholder  that the  Company  knows to own  beneficially  more  than 5% of the
issued and outstanding shares


<PAGE>


of the Company's  Common  Stock,  director of the Company,  Named  Executive (as
defined  herein) and by the directors  and Named  Executives of the Company as a
group.

<TABLE>
<CAPTION>
                                                                        Amount and Nature
            Name and Address of                    Title                   of Beneficial              Percent
             Beneficial Owner                     of Class                 Ownership(1)               of Class
             ----------------                     --------                 ------------               --------
<S>                                            <C>                          <C>                         <C>  
FS Signal Associates, L.P.; FS Signal          Common Stock                 15,987,502                  43.2%
Associates II, L.P.; FS Signal, Inc.; and      $.01 par value
Kevin S. Penn, as a group
65 E. 55th St., 18th Floor
New York, New York 10022(2)

Kevin S. Penn                                  Common Stock                 15,987,502                  43.2%
65 E. 55th St., 18th Floor                     $.01 par value
New York, New York 10022(2)

FS Signal, Inc.                                Common Stock $.01            15,687,502                  42.7%
65 E. 55th St., 18th Floor                     par value
New York, New York 10022(2)(3)

FS Signal Associates, L.P.                     Common Stock                  5,380,013                  16.1%
c/o Kenneth Musen                              $.01 par value
157 Church Street, Box 426
New Haven, Connecticut 06502(2)(4)

FS Signal Associates II, L.P.                  Common Stock                 10,307,489                  28.7%
c/o Kenneth Musen                              $.01 par value
157 Church Street, Box 426
New Haven, Connecticut 06502 (2)(5)


WGI, LLC                                       Common Stock                 21,452,349                  57.2%
One East Putnam Avenue                         $.01 par value
Greenwich, Connecticut 06830 (6)
                                               Series F
                                               Preferred Stock
                                               $100,000 stated                 454.444                   100%
                                               value
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                        Amount and Nature
            Name and Address of                    Title                   of Beneficial              Percent
             Beneficial Owner                     of Class                 Ownership(1)               of Class
             ----------------                     --------                 ------------               --------
<S>                                            <C>                          <C>                         <C>  
Jacob I. Feigenbaum                            Common Stock                       --                      --
                                               $.01 par value

Paul R. Greenwood (6)                          Common Stock                 21,452,349                  57.2%
                                               $.01 par value

                                               Series F
                                               Preferred Stock
                                               $100,000 stated                 454.444                   100%
                                               value


Leon Ruchlamer (7)                             Common Stock                    100,000                    *
                                               $.01 par value


Stephen Walsh (6)                              Common Stock                 21,452,349                  57.2%
                                               $.01 par value

                                               Series F
                                               Preferred Stock
                                               $100,000 stated                 454.444                   100%
                                               value



David E. Houseman (8)                          Common Stock                     55,000                     *
                                               $.01 par value

Barton J. Bresky (7)                           Common Stock                    250,000                     *
                                               $.01 par value
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                        Amount and Nature
            Name and Address of                    Title                   of Beneficial              Percent
             Beneficial Owner                     of Class                 Ownership(1)               of Class
             ----------------                     --------                 ------------               --------
<S>                                            <C>                          <C>                         <C>  
Leslie W. Levy (9)                             Common Stock                     40,278                     *
                                               $.01 par value

Tom McFall                                     Common Stock                     --                        --
                                               $.01 par value

Robert J. Powell (7)                           Common Stock                    125,000                     *
                                               $.01 par value

John W. Prutch                                 Common Stock                     --                        --
                                               $.01 par value

All directors and executive                    Common Stock                 21,772,627                  57.6%
officers as a group                            $.01 par value
[9 individuals] (10)
                                               Series F
                                               Preferred Stock
                                               $100,000 stated                 454.444                   100%
                                               value
</TABLE>
----------
*    Less than 1%

NOTES TO TABLE OF BENEFICIAL OWNERSHIP

(1)  As of April 20,  1998,  the Company had issued and  outstanding  32,661,460
     shares of Common  Stock,  454.444  shares of Series F Preferred  Stock.  In
     general,  a person is deemed to be a  "beneficial  owner" of a security  if
     that person has or shares "voting  power," which includes the power to vote
     or direct  the  voting  of such  security,  or  "investment  power,"  which
     includes  the power to  dispose  of or to direct  the  disposition  of such
     security,  or if a person has the right to acquire  either  voting power or
     investment  power over such  security  through the exercise of an option or
     the conversion of another security within 60 days. More than one person may
     be a beneficial owner of the same security, and a person may be


<PAGE>


     deemed  to be a  beneficial  owner  of  securities  as to  which  he has no
     personal economic interest or which he may not vote. In the case of persons
     who hold  options or warrants to purchase  shares of Common  Stock that are
     exercisable  either  immediately  or within 60 days of April 20, 1998,  the
     shares of Common Stock represented thereby have been treated as outstanding
     for purposes of calculating the ownership  totals and percentages  (and the
     percentage of voting  power) for only the persons  holding such options and
     warrants, and have not otherwise been treated as outstanding shares.

(2)  FS Signal  Associates,  L.P. ("FS Signal");  FS Signal  Associates II, L.P.
     ("FS Signal II"); FS Signal, Inc. ("FSSI"); and Kevin S. Penn ("Penn") have
     filed a report,  as a group,  on  Schedule  13D  disclosing  their  various
     relationships. Such persons may be deemed to be a group for purposes of the
     beneficial  ownership of the  securities  disclosed in the table,  although
     they disclaim  membership in a group. The 15,987,502 shares of Common Stock
     include (i)  4,645,013  shares of Common Stock held  directly by FS Signal;
     (ii) 6,994,989  shares of Common Stock held directly by FS Signal II; (iii)
     warrants  held  directly by FS Signal to acquire  735,000  shares of Common
     Stock;  (iv) warrants  held  directly by FS Signal II to acquire  3,312,500
     shares of Common  Stock;  and (v) warrants held directly by Penn to acquire
     300,000 shares of Common Stock.  The reporting  persons may be deemed to be
     members  of a  group  and,  accordingly,  could  each  be  deemed  to  have
     beneficial  ownership  (by virtue of Rule  13(d)-5) of all shares of Common
     Stock  held  directly  by the  various  members  of the  group.  Except  as
     disclosed  herein,  no other  entity or  person  that may be deemed to be a
     member of the group holds direct beneficial ownership of such Common Stock.
     Penn is the  President  of FSSI,  which is the  general  partner of both FS
     Signal  and FS  Signal  II.  Both FS Signal  and FS  Signal II are  limited
     partnerships.  Pursuant  to both the  bylaws  of FSSI and an  understanding
     among  the  limited  partners  of FS  Signal  and FS Signal  II,  Penn,  as
     President  of FSSI,  has the sole  voting  and  investment  power  over the
     securities held by both limited partnerships.

(3)  As the  general  partner of both FS Signal  and FS Signal  II,  FSSI may be
     deemed to be the beneficial  owner of (i) 4,645,013  shares of Common Stock
     held  directly by FS Signal;  (ii)  6,994,989  shares of Common  Stock held
     directly  by FS Signal II;  (iii)  warrants  held  directly by FS Signal to
     acquire 735,000 shares of Common Stock;  and (iv) warrants held directly by
     FS Signal II to acquire  3,312,500  shares of Common  Stock.  Kevin S. Penn
     ("Penn") is the President of FSSI.  Pursuant to both the bylaws of FSSI and
     an understanding  among the limited partners of FS Signal and FS Signal II,
     Penn, as President of FSSI, has the sole voting and  investment  power over
     the securities held by both limited partnerships.

(4)  FS Signal, a Connecticut limited  partnership,  owns directly (i) 4,645,013
     shares of Common  Stock and (ii)  warrants  to  acquire  735,000  shares of
     Common  Stock.  Kevin S. Penn,  in his  capacity as President of FS Signal,
     Inc., the general partner of FS Signal,  may be deemed to own  beneficially
     all shares of Common Stock and Series C Preferred Stock held by FS Signal.

(5)  FS  Signal  II,  a  Connecticut  limited  partnership,  owns  directly  (i)
     6,994,989  shares of Common  Stock and (ii)  warrants to acquire  3,312,500


<PAGE>


     shares of Common Stock.  Kevin S. Penn, in his capacity as the President of
     FS Signal,  Inc., the general partner of FS Signal II, may be deemed to own
     beneficially  all  shares of Common  Stock,  Series A  Preferred  Stock and
     Series C Preferred Stock held by FS Signal II.

(6)  WGI, LLC ("WGI"), a New York limited liability  company,  owns directly (i)
     16,607,349  shares of Common  Stock;  (ii)  warrants  to acquire a total of
     4,845,000  shares of Common  Stock;  and (iii)  454.444  shares of Series F
     Preferred Stock. WGI's managers,  Stephen Walsh and Paul R. Greenwood,  may
     be  deemed to share the power to vote and  direct  the  disposition  of the
     shares of Common  Stock,  the  warrants  to purchase  Common  Stock and the
     shares of Series F Preferred Stock beneficially owned by WGI.

(7)  The beneficial ownership reported for Messrs. Ruchlamer,  Bresky and Powell
     represents  options that are  immediately  exercisable to acquire shares of
     Common Stock, which were issued pursuant to the Company's 1985 Stock Option
     Plan.

(8)  This figure  includes  presently  exercisable  warrants  to acquire  50,000
     shares of  Common  Stock  which  were  issued  pursuant  to Mr.  Houseman's
     Employment Agreement.

(9)  This figure includes presently exercisable options to acquire 30,000 shares
     of Common  Stock which were issued  under the  Company's  1985 Stock Option
     Plan.

(10) This figure includes shares for which indirect beneficial  ownership may be
     attributed  to certain  directors of the Company,  as discussed in Note (6)
     above. The figure includes  warrants to acquire  4,895,000 shares of Common
     Stock and  options  to acquire  255,000  shares of Common  Stock.  All such
     warrants and options are immediately  exercisable and,  consequently,  have
     been  treated as  outstanding  shares of Common Stock for  calculations  of
     share  ownership  and voting power for the group of directors and executive
     officers. See Note (1) above.

Part III, Item 13:

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Effective May 9, 1997, the Company entered into an agreement with Weatherly
Financial  ("Weatherly"),  pursuant  to which  Weatherly  was  engaged to act as
financial  advisor  to  the  Company  on an  exclusive  basis  with  respect  to
evaluating,  pricing, negotiating and closing mergers and acquisitions and other
investments  and  arranging  financing on the Company's  behalf (the  "Weatherly
Agreement").  The Weatherly  Agreement  has a term of two years,  subject to the
Company's  right to terminate  the  agreement  upon ninety  days' prior  written
notice at any time after May 9, 1998. The agreement  provides  that,  subject to
its  fiduciary  duties,  the Company  will use its best efforts to cause two (2)
persons selected by Weatherly  (which persons shall be reasonably  acceptable to
the Company) to be nominated by the Company's Board of Directors for


<PAGE>


election as directors of the Company at the Company's Annual Meetings throughout
the term of the Agreement. Messrs. McFall and Prutch were nominated for election
(and  subsequently  elected) to the  Company's  Board of  Directors  at the 1997
Annual Meeting pursuant to the terms of the Weatherly Agreement.

     The Weatherly Agreement provides that Weatherly will receive a base monthly
fee of $5,000 in performing such services for the Company.  It also provides for
a fee of up to 10%  of  the  gross  proceeds  of  capital  raising  transactions
consummated  with  Weatherly's  assistance.  If Weatherly  acts as a "finder" in
connection  with any  merger,  consolidation,  reorganization  or other  similar
transaction,  Weatherly's  fee will be determined  in accordance  with a sliding
scale based on the size of the  transaction,  but limited to a maximum of 10% of
the total  transaction  value and  subject  to  reduction  by the  amount of any
compensation that Weatherly may be entitled to receive from any other party as a
result of any such  transaction.  The  Weatherly  Agreement  also  provides  for
additional  compensation  to Weatherly in the form of warrants  which vest based
upon  the  achievement  of  certain  targeted   improvements  in  the  Company's
operations as a result of acquisitions  consummated with Weatherly's assistance.
These  targets  consist  of  increasing  the  Company's   annual  net  sales  by
$50,000,000  and  increasing  its  annual  pre-tax  profits by  $5,000,000.  The
Agreement  provides that Weatherly will initially  receive warrants  exercisable
for a period  of 7 years  from May 9,  1997 to  purchase  a number  of shares of
Common Stock  representing 3% of the total number of outstanding  shares of such
stock on a  fully-diluted  basis at an exercise price of $2.50 per share.  These
warrants vest in full if the Company  realizes the targeted  increases by May 9,
2000, and vest in proportion to actual improvements  achieved if the targets are
not fully met by such date.  Additional warrants may be issued to Weatherly upon
the  consummation  of any merger or acquisition  transaction  consummated by the
Company with Weatherly's  assistance,  pursuant to a detailed formula prescribed
in the Agreement.  In no event,  however,  may the aggregate  number of warrants
issued  pursuant  to  the  Weatherly  Agreement  exceed  10%  of  the  Company's
outstanding shares of Common Stock on a fully-diluted basis.

     When the  Weatherly  Agreement  was  executed,  all of the parties  thereto
anticipated  that John W. Prutch,  in his capacity as an associate of Weatherly,
would play a significant  role in performing  the services to be provided to the
Company by Weatherly and, in such capacity,  would receive a significant portion
of the compensation  payable under the Weatherly  Agreement.  In connection with
Mr. Prutch's subsequent employment as President of the Company effective October
2, 1997,  the Company and Weatherly  agreed that Mr. Prutch shall be entitled to
receive one-half of the compensation  (including both cash payments and issuance
of warrants)  otherwise  payable to Weatherly  under the terms of the  Weatherly
Agreement.


<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  Amendment  to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                        SIGNAL APPAREL COMPANY, INC.


                                        By:  /s/ Robert J. Powell
                                             ---------------------------
                                             Robert J. Powell
                                             Vice President and
                                             Secretary

Date: April 30, 1998