SC 13E3

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13E-3
(Rule 13e-100)
Rule 13e-3 Transaction Statement Under Section 13(e) of the
Securities Exchange Act of 1934

The Elder-Beerman Stores Corp.
(Name of the Issuer)

The Elder-Beerman Stores Corp.
Wright Holdings, Inc.
Byron L. Bergren
Edward A. Tomechko
(Name of Person(s) Filing Statement)

Common shares, no par value
(Title of Class of Securities)

284470101
(CUSIP Number of Class of Securities)

Steven C. Mason
The Elder-Beerman Stores Corp.
3155 El-Bee Road
Dayton, Ohio 45439
(937) 296-2700
 
Michael T. Sweeney
Wright Holdings, Inc.
5250 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
(612) 338-5912

with copies to:

Joseph M. Rigot
Thompson Hine LLP
2000 Courthouse Plaza N.E.
Dayton, Ohio 45401
Telephone: (937) 443-6586 Matthew J. Knopf
Dorsey & Whitney LLP
50 South Sixth Street
Suite 1500
Minneapolis, MN 55402
Telephone: (612) 340-5603

(Name, Address and Telephone Numbers of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)

This statement is filed in connection with (check the appropriate box):

a.	[X]	The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b.	[    ]	The filing of a registration statement under the Securities Act of 1933.
c.	[    ]	A tender offer.
d	[    ]	None of the above.

     Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X]

     Check the following box if the filing is a final amendment reporting the results of the transaction: [ ]

CALCULATION OF FILING FEE

Transaction Valuation(1)	Amount of Filing Fee(2)
$74,656,885	$6,039.74

(1)	The transaction value was based upon the sum of (a) the product of 11,750,000 common shares and the merger consideration of $6.00 per share and (b) the difference between (i) the product of the merger consideration of $6.00 per share and the 1,377,523 common shares subject to outstanding stock options of which the exercise price per share is less than the per share merger consideration and (ii) the product of the weighted average exercise price per share of such stock options and such 1,377,523 common shares.
(2)	In accordance with Rule 0-11(b) under the Securities Exchange Act of 1934, as amended, the amount of the filing fee was determined by multiplying $0.00008090 by the amount of the transaction valuation calculated above.
[X]	Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: $6,039.74
Form or Registration No.: Schedule 14A Filing Party: The Elder-Beerman Stores Corp.
Date Filed: July 18, 2003

INTRODUCTION

     This Transaction Statement on Schedule 13E-3 (this “Schedule 13E-3”) is being filed jointly by The Elder-Beerman Stores Corp., an Ohio corporation (“Elder-Beerman” or the “Company”), Wright Holdings, Inc., a Delaware corporation, Byron L. Bergren and Edward A. Tomechko, in connection with the Agreement and Plan of Merger (the “Merger Agreement”), dated as of June 25, 2003, by and among Elder-Beerman, Wright Holdings, Inc., and Wright Sub, Inc., an Ohio corporation. Elder-Beerman, Wright Holdings, Inc., Byron L. Bergren and Edward A. Tomechko are referred to herein as the “Filing Persons.” If the Merger Agreement is adopted and the Merger (as defined herein) is approved by Elder-Beerman’s shareholders, Wright Sub, Inc. will merge with and into Elder-Beerman (the “Merger”), with Elder-Beerman continuing as the surviving corporation. In the Merger, each outstanding common share of Elder-Beerman, other than common shares held by Wright Holdings, Inc. or Wright Sub, Inc. or held in Elder-Beerman’s treasury, or held by shareholders who have perfected their appraisal rights under Ohio law, will be converted into the right to receive $6.00 per share in cash, without interest, less any applicable withholding taxes.

     The information contained in this Schedule 13E-3 and/or the related proxy statement concerning Elder-Beerman was supplied by Elder-Beerman and none of the other filing persons take responsibility for the accuracy of such information. Similarly, the information contained in this Schedule 13E-3 and/or the related proxy statement concerning each of the filing persons other than Elder-Beerman (except for information relating to certain filing persons in their capacities as directors or officers of Elder-Beerman) was supplied by each such filing person and no other filing person, including Elder-Beerman, takes responsibility for the accuracy of any information not supplied by such filing person.

     Concurrently with the filing of this Schedule 13E-3, Elder-Beerman is filing a preliminary proxy statement (the “Proxy Statement”) pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which the Elder-Beerman board of directors is soliciting proxies from shareholders of Elder-Beerman in connection with the Merger. The information set forth in the Proxy Statement, including all appendices thereto, is hereby incorporated herein by this reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the appendices thereto. As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and amendment. Capitalized terms used but not defined in this Schedule 13E-3 shall have the meanings given to them in the Proxy Statement.

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Item 1. Summary Term Sheet.

Regulation M-A
Item 1001

The information set forth in the Proxy Statement under the caption “Summary Term Sheet” is incorporated herein by reference.

Item 2. Subject Company Information.

Regulation M-A
Item 1002

(a)	The information set forth in the Proxy Statement under the caption “Summary Term Sheet — Who is proposing the merger?” is incorporated herein by reference. Elder-Beerman is the issuer of the class of equity securities that is the subject of the Rule 13e-3 transaction.
(b)	The class of equity securities that is the subject of the Rule 13e-3 transaction is Elder-Beerman’s common shares, no par value. The information set forth in the Proxy Statement under the caption “Summary Term Sheet — Who is entitled to vote on the merger?” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the caption “Comparative Market Price and Dividend Information” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the caption “Comparative Market Price and Dividend Information” is incorporated herein by reference.
(e)	Not applicable.
(f)	Not applicable.

Item 3. Identity and Background of Filing Person.

Regulation M-A
Item 1003

(a)-(c)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Who is proposing the merger?,” “Summary Term Sheet — With whom is Elder-Beerman proposing to merge?” and “Special Factors – Interests of Our Directors and Executive Officers in the Proposed Merger” is incorporated herein by reference.
	Wright Holdings, Inc. Wright Holdings, Inc. is a Delaware corporation that was incorporated on June 18, 2003, solely for the purpose of financing the Merger and the transactions related to the Merger and holding the shares of Wright Sub, Inc. It has not engaged in any other business activities. Following the Merger, the outstanding shares of capital stock of Wright Holdings, Inc. will be owned principally by Marathon Fund Limited Partnership IV, as well as by members of Elder-Beerman’s senior management, including Byron L. Bergren and Edward A. Tomechko. The business address for Wright Holdings, Inc. is 5250 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402. The telephone number for Wright Holdings, Inc. is (612) 338-5912.
	Directors, Executive Officers and Controlling Persons of Wright Holdings, Inc. Set forth below are the names of each director and executive officer of Wright Holdings, Inc. Each such person is a citizen of the United States, and has held his present position as set forth below since Wright Holdings, Inc.’s incorporation. During the past five years, neither Mr. Sweeney nor Mr. Israel have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceedings that resulted in a judgment, decree or final order enjoining either of them from future violations of, or prohibiting activities subject to, federal or state securities laws or a finding of any violation of such laws. Also set forth below is the information regarding the controlling person of Wright Holdings, Inc.
	Michael T. Sweeney, Managing Director. Mr. Sweeney joined Goldner Hawn Johnson & Morrison Incorporated in 2000. Previously, he was President of Starbucks Coffee Company (U.K.), Ltd. from 1998 to 2000, and prior to that, he was Chief Executive Officer of Minnesota Pizza Company, L.L.C. from 1995 to 1998. The business address for Mr. Sweeney is 5250 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402. The telephone number for Mr. Sweeney is (612) 338-5912.
	Michael S. Israel, Managing Director. Mr. Israel has been with Goldner Hawn Johnson & Morrison Incorporated for each of the last five years. The business address for Mr. Israel is 5250 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402. The telephone number for Mr. Israel is (612) 338-5912.
	Marathon Fund Limited Partnership IV. Marathon Fund Limited Partnership IV is a Delaware limited partnership whose sole general partner is Miltiades LLC, a Delaware limited liability company. Marathon Fund Limited Partnership IV is an affiliate of Goldner Hawn Johnson & Morrison Incorporated, a Minneapolis-based private equity firm principally engaged in the business of investing and managing private equity investments.
	Byron L. Bergren. Byron L. Bergren, a citizen of the United States, has his business address at 3155 El-Bee Road, Dayton, Ohio 45401. Mr. Bergren has served as President and Chief Executive Officer of the Company since February 2002. Mr. Bergren has been a Director of the Company since 2002. Prior to this time, Mr. Bergren served as Chairman of the Southern Division of Belk Stores, Inc. (“Belk”) from 1999 to February 2002. Prior to that he served as Partner of the Florida division of Belk from 1992 to 1999; Senior Vice President of Corporate Sales Promotion and Marketing of Belk from 1991 to 1992; and Senior Vice President of Merchandising and Marketing of the Belk Charlotte division from 1988 to 1991.
	Edward A. Tomechko. Edward A. Tomechko, a citizen of the United States, has his business address at 3155 El-Bee Road, Dayton, Ohio 45401. Mr. Tomechko has served as Executive Vice President, Chief Financial Officer, Treasurer and Secretary of Elder-Beerman since June 2002. Prior to this time he was a Managing Partner of M. E. Thomas & Associates, LLC, a business advisory firm, from October 2000 to May 2002. Prior to that, he served as Chief Executive Officer of Net Radio Corp., a media distribution company, from January 1999 to October 2000. He served as that company’s Senior Vice President and Chief Financial Officer from August 1998 to December of 1998. Prior to that, he served as Senior Vice President, Chief Financial Officer of David’s Bridal, a specialty retailer, from April 1997 to May 1998.
	During the past five years, neither Mr. Bergren nor Mr. Tomechko have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining either of them from future violations of, or prohibiting activities subject to, federal or state securities laws or a finding of any violation of such laws.
	Directors and Executive Officers of Elder-Beerman. Set forth below are the (i) name, (ii) current principal occupation or employment, and the name, principal business and address of any corporation or other organization in which the employment or occupation is conducted, and (iii) material occupations, positions, offices or employment during the past five years, and the name and principal business of any corporation or other organization in which the occupation, position, office or employment was carried on, of each of the directors and executive officers of Elder-Beerman, except for Byron L. Bergren and Edward A. Tomechko who are also directors or officers of Elder-Beerman and whose information is

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provided above. Each person identified below is a United States citizen. Each person’s address is 3155 El-Bee Road, Dayton, Ohio 45439. During the past five years, none of the persons listed below have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding that resulted in a judgment, decree, or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws or a finding of any violation of such laws.

Mark F.C. Berner has been a Director of the Company since 2000 and is Managing Partner of SDG Resources, L.P., an oil and gas investment fund. From 1996 to 1999, he was a private investment consultant in New York. In 1995, Mr. Berner served as Senior Vice President and Counsel for Turnberry Capital Management, L.P., a private equity fund. Mr. Berner also currently serves as a Director of ThinkSheet, Inc., a privately held technology company. Mr. Berner is also a member of the Bar of the State of New York.

Dennis S. Bookshester has been a Director of the Company since 1999 and serves as Chairman of the Illinois Racing Board. He also serves as the Chairman of Cutanix Corporation, a privately held biotechnology company. From 1999 through May 2002, he served as the President and Chief Executive Officer of Fruit of the Loom, Inc., a garment manufacturer that filed for protection under Chapter 11 of the United States Bankruptcy Code in December 1999. Mr. Bookshester also currently serves as a Director of Playboy Enterprises, Inc.

Eugene I. Davis has been a Director of the Company since 2000 and is Chairman and Chief Executive Officer of Pirinate Consulting Group, L.L.C., a corporate strategy consulting firm, Murdock Communications Corporation, a telecommunications holding company, and of RBX Industries, Inc., a rubber and foam manufacturer and distributor that filed for protection under Chapter 11 of the United States Bankruptcy Code in December 2000. Prior to serving as RBX’s Chairman and Chief Executive Officer, he served as its Chief Restructuring Officer from January to September 2001. From 1999 to 2001, he served as Chief Executive Officer of SmarTalk Teleservices Corp., an independent provider of prepaid calling cards, that filed for protection under Chapter 11 of the United States Bankruptcy Code in January 1999, and is currently being liquidated. During 1998 and 1999, Mr. Davis was Chief Operating Officer of Total-Tel Communications, Inc., a long distance telecommunications provider. From 1996 to 1997, Mr. Davis was the Chief Executive Officer of Sport Supply Group, Inc., a sporting goods and athletic equipment distributor. Mr. Davis also currently serves as a Director of Coho Energy, Inc., Murdock Communications Corp., Tipperary Corporation, Flag Telecom Group Limited, Metals USA, Inc. and Metrocall Holdings, Inc.

Charles Macaluso has been a Director of the Company since 1999 and is a Principal in Dorchester Capital Advisors (formerly East Ridge Consulting, Inc.), a management advisory and investment firm he founded in 1998. Prior to this, Mr. Macaluso served as a Principal from 1996 through 1998 in Miller Associates, Inc., a management consulting firm. Mr. Macaluso also currently serves as a Director of Flag Telecom, Ltd. and Darling International.

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Steven Mason has been a Director of the Company since 1997, was appointed interim President effective January 1, 2002, and served in this capacity role until Mr. Bergren’s appointment as President. Mr. Mason was also appointed as non-executive Chairman of the Board in January, 2002. Mr. Mason retired from Mead Corp., a forest products company, in November 1997. Prior to retirement, Mr. Mason served as Chairman of the Board and Chief Executive Officer of Mead Corp. from April 1992 to November 1997. Mr. Mason also currently serves as a Director of PPG Industries, Inc. and Convergys Corp.

Thomas J. Noonan, Jr. has been a Director of the Company since 1997 and is the Chairman and Chief Executive Officer of the Coppergate Group (“Coppergate”), a financial investment and management company, and has served in this capacity since May 1996. Prior to that, he served as a Managing Director of Coppergate from April 1993 through May 1996. He also serves as the Chairman, President and Chief Executive Officer of Intrenet, Inc. (“Intrenet”), a truckload carrier service provider that filed for protection under Chapter 11 of the United States Bankruptcy Code in January 2001, and is currently being liquidated. Mr. Noonan has served in his current position at Intrenet since January 2001. He has been a Director of Intrenet since 1991 and was named Chairman in December 2000. Mr. Noonan is Managing Director of Solutions Management, a financial advisory firm, and has served in that capacity since September 2001. From April 2000 to April 2002, Mr. Noonan served as the Chief Executive of R&S Liquidating Company, Inc., which was formerly known as WSR, Inc. (“WSR”) an automotive aftermarket retailer that filed for protection under Chapter 11 of the United States Bankruptcy Code in 1998 and is currently being liquidated. Prior to that Mr. Noonan was WSR’s Chief Restructuring Officer from August 1998 through December 1999. Mr. Noonan served as Executive Vice President and Chief Financial Officer of Herman’s Sporting Goods, Inc. from August 1994 through 1999, a sporting goods retailer that filed for protection under Chapter 11 of the United States Bankruptcy Code and is currently being liquidated.

Laura H. Pomerantz has been a Director of the Company since 1997 and currently serves as President of LHP Consulting & Management, a real estate consulting firm, and has served in this capacity since 1995. Through LHP Consulting & Management, Mrs. Pomerantz is also associated with PBS Realty Advisors, LLC, as one of the Principals, a company providing commercial real estate advisory and brokerage services. The partnership was formed in September of 2002. Prior to that, she was associated with Newmark & Company Real Estate, Inc., a commercial real estate company, as Senior Managing Director and served in this capacity from August 1996 to August 2002. Mrs. Pomerantz served as Executive Vice President and a Director of the Leslie Fay Companies, Inc. (“Leslie Fay”), an apparel design and manufacturing company, from January 1993 to November 1994, and as Senior Vice President and Vice President of Leslie Fay from 1986 through 1992.

Jack A. Staph has been a Director of the Company since 1997 and is currently a consultant, lawyer and private investor. He also serves as President of Cleveland Marathon, Inc. Mr. Staph has also served in an advisory capacity to CVS Corp. since June 1997. Prior to this time, Mr. Staph served as Senior Vice President, Secretary, and General Counsel of Revco D.S., Inc., a retail pharmacy company, from October 1972 to August 1997.

Charles H. Turner has been a Director of the Company since 2000 and is Executive Vice President of Finance, Chief Financial Officer and Treasurer of Pier 1 Imports, Inc. (“Pier 1”), and has served in this capacity since August 1999. Mr. Turner served as Pier 1’s Senior Vice President of Stores from August 1994 through August 1999.

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James M. Zamberlan has served as Executive Vice President, Stores of Elder-Beerman since July 1997. Prior to this time, Mr. Zamberlan served as Executive Vice President of Stores for Bradlee’s, Inc. from September 1995 to January 1997 and also served as Senior Vice President of Stores for the Lazarus Division of Federated from November 1989 to August 1995.

Steven D. Lipton has served as Senior Vice President, Controller of Elder-Beerman since March 1996. Prior to this time, Mr. Lipton served as Operating Vice President of Payroll for Federated Financial & Credit Services from September 1994 to January 1996 and served as Vice President and Controller of the Lazarus Division of Federated from February 1990 to August 1994.

Item 4. Terms of the Transaction.

Regulation M-A
Item 1004

(a)(1)	Not applicable.
(a)(2)(i)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet,” “The Special Meeting — Proposal to be Voted On,” “Special Factors” and “The Proposed Merger” is incorporated herein by reference.
(a)(2)(ii)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — What will I receive in the merger for my common shares?,” “The Special Meeting — Proposal to be Voted On” and “The Proposed Merger — Structure of the Merger; Consideration to be Received by our Shareholders” is incorporated herein by reference.
(a)(2)(iii)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Why is the Elder-Beerman Board Recommending the Merger?,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” and “Special Factors — Mr. Bergren’s and Mr. Tomechko’s Position as to the Fairness of the Merger and Reasons for the Merger” is incorporated herein by reference.
(a)(2)(iv)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — What shareholder vote is required to approve the merger?” and “The Special Meeting — Vote Required for Approval” is incorporated herein by reference.
(a)(2)(v)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Do any of Elder-Beerman’s directors or executive officers have an interest in the merger?,” “Special Factors —Effects of the Merger; Plans or Proposals for the Company” and “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger” is incorporated herein by reference.
(a)(2)(vi)	Not applicable.

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(a)(2)(vii)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — What will be the federal income tax consequences of the merger to the holders of common shares?” and “Special Factors — U.S. Federal Income Tax Consequences of the Merger” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Do any of Elder-Beerman’s directors or executive officers have an interest in the merger?,” “Special Factors —Effects of the Merger; Plans or Proposals for the Company,” “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger,” “The Merger Agreement — Stock Options,” “The Merger Agreement – Indemnification of Directors and Officers” and “The Merger Agreement — Employee Matters” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Are shareholders entitled to appraisal rights in connection with the merger?” and “The Proposed Merger — Appraisal Rights” is incorporated herein by reference.
(e)	None.
(f)	Not Applicable.

Item 5. Past Contacts, Transactions, Negotiations and Agreements.

Regulation M-A
Item 1005

(a)(1)	None.
(a)(2)	The information set forth in the Proxy Statement under the caption “Special Factors — Recent Related Party Transactions” is incorporated herein by reference.
(b)-(c)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Do any of Elder-Beerman’s directors or executive officers have an interest in the merger?,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Background of the Merger” and “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger” is incorporated herein by reference.
(e)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Do any of Elder-Beerman’s directors or executive officers have an interest in the merger?,” “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger,” “The Merger Agreement,” and “Principal Shareholders” is incorporated herein by reference. The information set forth in Exhibit (d)(1) below is incorporated herein by reference.

Item 6. Purposes of the Transaction and Plans or Proposals.

Regulation M-A
Item 1006

(b) The information set forth in the Proxy Statement under the captions “Summary Term Sheet — What will happen to Elder-Beerman in the merger?,” “Special Factors — Effects of the Merger; Plans or

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Proposals for the Company” and “The Proposed Merger — Structure of the Merger; Consideration to be Received by Our Shareholders” is incorporated herein by reference.

(c)(1)-(8)

The information set forth in the Proxy Statement under the captions “Summary Term Sheet,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Background of the Merger,” “Special Factors — Effects of the Merger; Plans or Proposals for the Company,” “Special Factors — Interest of Our Directors and Executive Officers in the Proposed Merger,” “The Proposed Merger — Structure of the Merger; Consideration to be Received by Our Shareholders” and “The Merger Agreement” is incorporated herein by reference.

Item 7. Purposes, Alternatives, Reasons and Effects.

Regulation M-A
Item 1013

(a)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Why is the Elder-Beerman Board recommending the merger?,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Effects of the Merger; Plans or Proposals for the Company,” “Special Factors – Recommendation of Our Board of Directors; Fairness of the Merger,” “Special Factors — Mr. Bergren’s and Mr. Tomechko’s Position as to the Fairness of the Merger and Reasons for the Merger” and “The Proposed Merger — Structure of the Merger; Consideration to be Received by Our Shareholders” is incorporated herein by reference.
(b)	The information set forth in the Proxy Statement under the captions “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Background of the Merger” and “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Background of the Merger,” “Special Factors — Recommendations of Our Board of Directors; Fairness of the Merger” and “Special Factors — Mr. Bergren’s and Mr. Tomechko’s Position as to the Fairness of the Merger and Reasons for the Merger” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet,” “Special Factors — Recommendations of Our Board of Directors; Fairness of the Merger,” “Special Factors — Purpose and Structure of the Merger,” “Special Factors — Effects of the Merger; Plans or Proposals for the Company,” “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger,” “Special Factors —U.S. Federal Income Tax Consequences of the Merger,” “The Proposed Merger — Payment of Merger Consideration and Surrender of Share Certificates” and “The Proposed Merger — Structure of the Merger; Consideration to be Received by Our Shareholders” is incorporated herein by reference.

Item 8. Fairness of the Transaction.

Regulation M-A
Item 1014

(a)-(b) The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Why is the Elder-Beerman Board recommending the merger?,” “Summary Term Sheet — What does Elder-Beerman’s board of directors think of the merger?,” “The Special Meeting — Recommendation of Our Board Of Directors,” “Special Factors — Recommendation

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	of Our Board of Directors; Fairness of the Merger,” “Special Factors — Mr. Bergren’s and Mr. Tomechko’s Position as to the Fairness of the Merger and Reasons for the Merger” and “Special Factors – Opinion of Our Financial Advisor” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the caption “Summary Term Sheet — What shareholder vote is required to approve the merger?” and “The Special Meeting —Vote Required for Approval” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the caption “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” is incorporated herein by reference.
(e)	The information set forth in the Proxy Statement under the caption “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” is incorporated herein by reference.
(f)	The information set forth in the Proxy Statement under the captions “Special Factors — Background of the Merger” and “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” is incorporated herein by reference.

Item 9. Reports, Opinions, Appraisals and Negotiations.

Regulation M-A
Item 1015

(a)-(c) The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Has Elder-Beerman received the opinion of a financial advisor as to the fairness of the merger from a financial point of view?,” “Special Factors — Opinion of Our Financial Advisor,” “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger” and “Special Factors — Fees and Expenses of the Merger” is incorporated herein by reference. The full text of the written opinion of RBC Capital Markets, dated June 25, 2003, is attached to the Proxy Statement as Appendix B and is incorporated herein by reference. The written materials presented by RBC Dain Rauscher Inc. to the Elder-Beerman Board of Directors on June 5, 2003, June 19, 2003 and June 25, 2003 are set forth as Exhibits (c)(2), (c)(3) and (c)(4) hereto, respectively, and are incorporated herein by reference.

Item 10. Source and Amounts of Funds or Other Consideration.

Regulation M-A
Item 1007

(a)-(d) The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Is the merger conditioned on the receipt of financing?,” “Special Factors — Financing of the Merger,” “Special Factors — Fees and Expenses of the Merger,” and “The Proposed Merger — Conditions to the Merger” is incorporated herein by reference.

Item 11. Interest in Securities of the Subject Company.

Regulation M-A
Item 1008

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(a)	The information set forth in the Proxy Statement under the captions “Summary Term Sheet — Do any of Elder-Beerman’s directors or executive officers have an interest in the merger?,” “The Special Meeting — Vote Required for Approval,” “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger” and “Principal Shareholders” is incorporated herein by reference.
(b)(1)-(5)	The information set forth in the Proxy Statement under the caption “Special Factors — Recent Related Party Transactions” is incorporated herein by reference.

Item 12. The Solicitation or Recommendation.

Regulation M-A
Item 1012

(d)

The information set forth in the Proxy Statement under the captions “Special Meeting — Vote Required for Approval” and “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger” is incorporated herein by reference.

(e)

The information set forth in the Proxy Statement under the captions “Summary Term Sheet — What does Elder-Beerman’s board of directors think of the merger?,” “Special Meeting – Recommendation of Our Board of Directors,” “Special Factors — Recommendation of Our Board of Directors; Fairness of the Merger,” “Special Factors — Interests of Our Directors and Executive Officers in the Proposed Merger” and “Special Factors — Mr. Bergren’s and Mr. Tomechko’s Position as to the Fairness of the Merger and Reasons for the Merger” is incorporated herein by reference.

Item 13. Financial Statements.

Regulation M-A
Item 1010

(a)

The information set forth in the Proxy Statement under the caption “Selected Historical Financial Information” is incorporated herein by reference. The full text of Elder-Beerman’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003 and the Quarterly Report on Form 10-Q for the quarter period ended May 3, 2003 are attached to the Proxy Statement as Appendices C and D and are incorporated herein by reference.

(b)

Not applicable.

Item 14. Persons/Assets, Retained, Employed, Compensated or Used.

Regulation M-A
Item 1009

(a)-(b) The information set forth in the Proxy Statement under the captions “Summary Term Sheet — To whom should I direct questions about the special meeting or the merger?,” “The Special Meeting — Solicitation of Proxies” and “Special Factors — Fees and Expenses of the Merger” is incorporated herein by reference.

Item 15. Additional Information.

Regulation M-A
Item 1011

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(b) The information set forth in the Proxy Statement and appendices thereto is incorporated herein by reference.

Item 16. Exhibits.

Regulation M-A
Item 1016

(a)(1)	Preliminary Proxy Statement of The Elder-Beerman Stores Corp., filed with the SEC on July 18, 2003 and incorporated herein by reference.
(a)(2)	Form of Proxy Card, filed with the SEC along with the Proxy Statement and incorporated herein by reference.
(a)(3)	Press Release, dated May 16, 2003 (included as Exhibit 99.1 to the Current Report on Form 8-K filed by The Elder-Beerman Stores Corp. on May 19, 2003 and incorporated herein by reference).
(a)(4)	Press Release, dated June 4, 2003 (included as Exhibit 99.1 to the Current Report on Form 8-K filed by The Elder-Beerman Stores Corp. on June 4, 2003 and incorporated herein by reference).
(a)(5)	Press Release, dated June 26, 2003 (included as Exhibit 99.1 to the Current Report on Form 8-K filed by The Elder-Beerman Stores Corp. on June 26, 2003 and incorporated herein by reference).
(b)(1)	Commitment Letter, dated June 25, 2003, by and between Marathon Fund Limited Partnership IV and Wright Holdings, Inc.
(b)(2)	Commitment Letter, dated June 25, 2003, by and among Fleet Retail Finance Inc., Back Bay Capital Funding, LLC, Fleet Securities Inc., Goldner Hawn Johnson & Morrison Incorporated and Wright Holdings, Inc.
(c)(1)	Fairness Opinion of RBC Dain Rauscher Inc. (RBC Capital Markets), dated June 25, 2003 (included as Appendix B to the Proxy Statement and incorporated herein by reference).
(c)(2)	Written materials of RBC Dain Rauscher Inc. (RBC Capital Markets) presented to the Board of Directors of The Elder-Beerman Stores Corp. on June 5, 2003.
(c)(3)	Written materials of RBC Dain Rauscher Inc. (RBC Capital Markets) presented to the Board of Directors of The Elder-Beerman Stores Corp. on June 19, 2003.
(c)(4)	Written materials of RBC Dain Rauscher Inc. (RBC Capital Markets) presented to the Board of Directors of The Elder-Beerman Stores Corp. on June 25, 2003.
(d)(1)	The Merger Agreement, dated as of June 25, 2003, by and among The Elder-Beerman Stores Corp., Wright Holdings, Inc. and Wright Sub, Inc. (included as Appendix A to the Proxy Statement and incorporated herein by reference).
(f)	Section 1701.85 of the Ohio General Corporation Law (included as Appendix E to the Proxy Statement and incorporated herein by reference).
(g)	Not applicable.

-10-

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

THE ELDER-BEERMAN STORES CORP.

By: /s/ Steven C. Mason

Name: Steven C. Mason
Title: Chairman of the Board

WRIGHT HOLDINGS, INC.

By: /s/ Michael T. Sweeney

Name: Michael T. Sweeney
Title: President

By: /s/ Byron L. Bergren

Byron L. Bergren

By: /s/ Edward A. Tomechko

Edward A. Tomechko

-11- EX-99.B.1 3 l02105aexv99wbw1.txt EX (B)(1) LETTER DATED 6/25/03 MARATHON & WRIGHT Exhibit (b)(1) MARATHON FUND LIMITED PARTNERSHIP IV C/O GOLDNER HAWN JOHNSON & MORRISON 5250 WELLS FARGO CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MN 55402 June 25, 2003 Michael Sweeney President Wright Holdings, Inc. c/o Goldner Hawn Johnson & Morrison 5250 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Re: Wright Holdings, Inc. ("Wright Holdings") Dear Mike: We are pleased to confirm that Marathon Fund Limited Partnership IV, an investment affiliate of Goldner Hawn Johnson & Morrison Incorporated with $200 million under management ("Marathon"), commits to provide up to $27,000,000 of its $40 million of presently uncommitted funds in the form of junior capital (i.e., a combination of subordinated debt and equity) to Wright Holdings. The proceeds of such financing would be used by Marathon to fund its investment in Wright Holdings which would acquire by merger (the "Acquisition") The Elder-Beerman Stores Corporation ("Elder-Beerman Co.") pursuant to the Agreement and Plan of Merger, dated June 25, 2003. The closing of the financing contemplated hereby would be subject to a number of conditions, including but not limited to the following: 1. Closing of the Acquisition substantially in accordance with the terms of the Merger Agreement. 2. Availability of senior debt financing on terms and conditions satisfactory to Marathon. Please note that the terms and conditions of such financing as outlined in the commitment letter to you from Fleet Retail Finance Inc. and Back Bay Capital Funding LLC, dated June 24, 2003, are satisfactory to Marathon. 3. Absence of any material adverse change in Elder-Beerman Co.'s business or financial condition and any material litigation related to Elder-Beerman Co., the proposed financing or the Acquisition. You further agree to keep this letter and its contents confidential and, without the prior written consent of Marathon, you agree not to disclose to any person the terms, conditions or other contents of this letter or subsequent negotiations between the parties hereto other than to Elder-Beerman Co. and your and their respective employees, officers, directors, accountants, attorneys and other advisors, in each case in connection with the transactions contemplated hereby and subject to agreement to the confidentiality provisions hereof. We hereby consent to the use of our name in a press release to be issued by Elder-Beerman Co. upon the announcement of the Acquisition, and to a description of this commitment letter in a proxy statement to be filed by Elder-Beerman Co. with the Securities and Exchange Commission in connection with the Acquisition, in each case, provided that we and our counsel are satisfied with the language in such documents with respect to the use of our name and description of this letter. If the foregoing is acceptable to you, kindly sign this letter where indicated below and return it to us. We look forward to working with you towards a successful completion of the Acquisition. Sincerely, MARATHON FUND LIMITED PARTNERSHIP IV By: MILTIADES LLC, its General Partner By: /s/ Van Zandt Hawn _____________________________ Title: Authorized Member Accepted and Agreed this 25th day of June, 2003: WRIGHT HOLDINGS, INC. By: /s/ Michael T. Sweeney __________________________ Title: President 2 EX-99.B.2 4 l02105aexv99wbw2.txt EX (B)(2) LETTER 6/25/03, FLEET RETAIL & BACK BAY Exhibit (b)(2) June 25, 2003 Goldner Hawn Johnson & Morrison 5250 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402-4123 Attention: Mr. Michael Sweeney Managing Director Re: Senior Secured Revolving Credit Facility Senior Secured Term Loan Dear Mr. Sweeney: We are pleased to advise you of the several commitments of Fleet Retail Finance Inc. ("FRFI") and Back Bay Capital Funding LLC ("BACK BAY"), subject to the terms and conditions hereof, respectively to provide a senior secured revolving credit facility in the amount of $250,000,000 (the "REVOLVING CREDIT FACILITY") and a senior secured term loan in the amount of $25,000,000 (the "TERM LOAN") to an entity to be formed (together with its subsidiaries, the "BORROWER") by Goldner Hawn Johnson & Morrison (the "SPONSOR") to acquire The Elder-Beerman Stores Corp. and its subsidiaries (the "ACQUISITION"), as contemplated in the Summaries of Terms and Conditions (the "TERM SHEETS") annexed to this letter as EXHIBIT A (with respect to the Revolving Credit Facility) and EXHIBIT B (with respect to the Term Loan). The commitment of FRFI hereunder shall be limited to the Revolving Credit Facility and the commitment of Back Bay hereunder shall be limited to the Term Loan. 1. THE AGENTS Fleet Retail Finance Inc. will act as Administrative Agent and Collateral Agent (and is referred to herein in such capacities as the "Agent") for itself and other lenders (the "REVOLVING CREDIT LENDERS") which fund the Revolving Credit Facility and for Back Bay as lender for the Term Loan. (The Revolving Credit Lenders and Back Bay are referred to herein collectively as the "LENDERS"). 2. SYNDICATION (a) FRFI's affiliate, Fleet Securities Inc. ("FSI") will act as the exclusive syndication manager for the Revolving Credit Facility and in such capacity will perform the duties and exercise the authority customarily associated with such role. No additional agents, arrangers or syndication managers will be appointed with respect to the arrangement and syndication of the Revolving Credit Facility. (b) FSI in its sole discretion, but in consultation with you, will manage all aspects of the syndication of the Revolving Credit Facility, including the following: Golder Hawn Johnson & Morrison June 25, 2003 Page 2 (i) Selection of those financial institutions which will become members of the syndicate. (ii) The timing of approaches to potential members of the syndicate. (iii) The titles and roles in the syndicate given various Lenders. (iv) The allocation of the commitments among the Lenders. FSI shall, in all events have final say concerning all aspects of the syndication. (c) FSI may syndicate all or any portion of FRFI's commitments hereunder to one or more financial institutions. FRFI shall be released from a portion of its commitment hereunder in an aggregate amount equal to the commitment of those Lenders which commit and subscribe to the syndicate assembled by FSI. FRFI and Back Bay acknowledge, however, that their commitments are not conditioned on a successful syndication of the Revolving Credit Facility. (d) You will assist FSI in achieving a successful syndication, such assistance to include, among other things, the following: (i) Direct contact during the syndication between your senior officers, representatives, and advisors, on the one hand, and prospective Lenders, on the other hand, at such times and places as FSI may reasonably request. (ii) The providing to FSI and the Agent of all such financial and other information in your possession with respect to the Borrower and the transactions contemplated by this Letter, including but not limited to financial projections and forecasts relating to the foregoing, which FSI and/or the Agent reasonably may request from time to time. (iii) Assistance in the preparation of a confidential information memorandum and other marketing materials to be used in connection with the syndication. (e) You acknowledge that FRFI, Back Bay, and FSI, in consultation with you, may change the pricing, structure, and any other terms of the Revolving Credit Facility and the Term Loan if FRFI, Back Bay, and FSI reasonably determine that such changes are advisable in order to achieve a successful syndication, provided that (i) the Applicable Margin in any Level for any type of Loan under the Revolver shall not be increased by more than 0.50%, (ii) the Commitment Fee for the Revolver shall not be increased by more than 0.125%, and (iii) the required minimum excess availability for any period shall not be increased by more than $5,000,000. The provisions of this paragraph shall survive the closing of the Revolving Credit Facility and the Term Loan in the event that a successful syndication has not been consummated as of the closing date. ..2.. Golder Hawn Johnson & Morrison June 25, 2003 Page 3 3. CONDITIONS TO COMMITMENT. The commitment of FRFI, Back Bay, the Agent and FSI, as expressed in this letter, is subject to the following: (i) Timely acceptance of this letter and the enclosed Fee Letter and Back Bay Fee Letter by you as provided herein. (ii) The satisfaction of all conditions precedent referenced herein, in the Term Sheets, or in any of the loan documents. (iii) Execution and delivery of definitive and mutually satisfactory loan documents. (iv) Recordation of such instruments and documents as the Collateral Agent reasonably determines to be appropriate under the circumstances to perfect and protect the collateral interests to be granted by the Borrower under the transactions contemplated herein. (v) The contemporaneous closing of the Revolving Credit Facility and the Term Loan. 4. INDEMNIFICATION (a) Whether or not the credit facilities contemplated hereby are established, the Sponsor and the Borrower shall each indemnify and hold harmless FRFI, Back Bay, FSI, the Agent, the Lenders their respective participants (if any) and their respective directors, officers, employees, affiliates, agents, attorneys, accountants, consultants and each other entity, if any, who controls any of the foregoing, and shall indemnify and hold such persons and entities (each, an "INDEMNIFIED PERSON") harmless from and against all losses, claims, damages, liabilities and expenses, joint or several, to which any such person or entity may become subject arising out of or in connection with the Acquisition, this Letter, the Term Sheets, the credit facilities, the use of proceeds of the extensions of credit thereunder or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse each Indemnified Person upon demand for any reasonable legal or other expenses incurred in connection with investigating or defending any of the foregoing; provided, however, the foregoing indemnification shall not be available, as to any Indemnified Person, on account of or in respect to any claim as to which there is a final determination made in a judicial proceeding (in which the Agent and such Indemnified Party have had an opportunity to be heard), which determination includes a specific finding that the person seeking indemnification pursuant hereto (directly or by virtue of acts or omissions of its agents, officers, directors, employees or other representatives) had acted in a grossly negligent manner or in actual bad faith or with willful misconduct. The Agent and the Indemnified Party shall be entitled to select their own counsel in connection with the defense of any such claims, and the Sponsor and the Borrower shall promptly pay the reasonable fees and expenses thereof. ..3.. Golder Hawn Johnson & Morrison June 25, 2003 Page 4 (b) If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Sponsor and the Borrower shall each contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage or liability to the maximum amount legally permissible. The Sponsor and the Borrower each also agree that neither any Indemnified Person, nor any of their respective affiliates, partners, directors, agents, employees or controlling persons, shall have any liability to the Sponsor, the Borrower, any person asserting claims on behalf or in right of the Sponsor or the Borrower, or any other person in connection with or as a result of either this syndication or any matter referred to herein or in the loan documentation except to the extent that there is a final determination made in a judicial proceeding (in which the Agent and Back Bay each has had an opportunity to be heard), which determination includes a specific finding that the losses, claims, damages, liabilities or expenses so incurred by the Sponsor or the Borrower resulted from the gross negligence or actual bad faith or willful misconduct of such Indemnified Person (directly or by virtue of acts or omissions of its agents, officers, directors, employees or other representatives). (c) No Indemnified Person shall be liable for any indirect, special, punitive, or consequential damages in connection with or arising out of this letter or the transactions contemplated hereby. The indemnification provided herein shall survive any closing on, or retirement of, any credit facility between the Borrower, on the one hand, and the Agent, and/or any Revolving Credit Lenders, and/or Back Bay, on the other. 5. REIMBURSEMENT The Sponsor and the Borrower shall reimburse FRFI, Back Bay, the Agent and FSI from time to time on demand for reasonable out-of-pocket expenses (including, but not limited to, reasonable expenses of due diligence investigation, reasonable syndication expenses, reasonable travel expenses and reasonable fees, disbursements and charges of its counsel), in each instance incurred in connection with the preparation and negotiation of this Letter and the Term Sheets, the definitive documentation for the Revolving Credit Facility and the Term Loan, and the closing of the transactions contemplated hereby. You shall pay to the Agent for its account and the accounts of FRFI and FSI the sum of $50,000 and to Back Bay for its own account the sum of $50,000 (collectively, the "WORK FEE") to reimburse the reasonable expenses incurred by FRFI, Back Bay, the Agent and FSI. FRFl and FSI acknowledge receipt of their portion of the Work Fee and Back Bay acknowledges receipt of $20,000 of its Work Fee. Whether or not the Revolving Credit Facility and the Term Loan are so established, the Work Fee shall be accounted for by the Agent and Back Bay provided, however, the Sponsor and the Borrower shall each remain obligated to reimburse FRFI, Back Bay, the Agent and FSI for any fees and expenses reasonably incurred in connection with the transaction contemplated by this Letter (including, without limitation, reasonable legal, appraisal, and commercial finance examination fees) and not covered by the Work Fee. Each reimbursement and indemnification obligation of you and the Borrower hereunder is the joint and several obligation of you and of the Borrower and shall survive any such closing on any credit facility between the Borrower, on the one hand, and the Agent, and/or any Revolving Credit Lenders, and/or Back Bay, on the other. ..4.. Golder Hawn Johnson & Morrison June 25, 2003 Page 5 6. CLOSING (a) This letter may be accepted by you on or before 5:00 p.m. (EDT) on June 25, 2003 by signing below and returning the executed letter to FRFI, together with the balance of the Work Fee due to Back Bay and the executed Fee Letter enclosed herewith. (b) If this letter is so accepted, then, subject to the terms and conditions of this letter, FRFI would be obligated to establish the Revolving Credit Facility and Back Bay would be obligated to provide the Term Loan if all conditions precedent thereto are satisfied (as reasonably determined by FRFI and Back Bay and the Administrative Agent) on or before October 31, 2003. The closing, in such event, would take place at the offices of counsel to FRFI. 7. NONTRANSFERABILITY OF COMMITMENT The identity of the Sponsor and the Borrower is of material importance to FRFI and the Agent, Back Bay, and FSI. Consequently, this commitment may not be assigned or transferred by the Sponsor or the Borrower. FRFI, Back Bay and the Agent may assign its respective obligation (a) under this commitment to any present or future affiliate of FRFI, Back Bay or the Agent, or (b) after closing of the facilities, as provided in the loan documentation. 8. EXCLUSIVE DEALING (a) The Sponsor and the Borrower each covenant that, from and after the date of this letter, and until the consummation of the transactions contemplated herein or the expiry of the commitment provided for herein, the Sponsor and the Borrower (and any of their respective officers, directors, employees, agents and representatives) shall: (i) not directly or indirectly solicit, initiate, encourage, facilitate, or discuss any submission, proposal, or offer from, or any effort or attempt by, any other person, entity, or group relating to the financing of the Acquisition or of the Borrower. (ii) provide FRFI with immediate written notice (with reasonable detail of the facts and circumstances relating thereto) of any submission, proposal, or offer, of any request for information, related directly or indirectly to any such financing of the Acquisition or the Borrower. The Sponsor represents that neither it nor any of its affiliates is party to, or bound by, any agreement with respect to any such financing other than as contemplated by this letter, the Term Sheet and any related fee letters. (b) Except as, and only to the extent required under, applicable laws, the Sponsor and the Borrower shall maintain as confidential the terms of conditions of this Commitment and the terms, conditions, provisions, and documentation of the Revolving Credit Facility and Term Loan provided, however, that any such information may be ..5.. Golder Hawn Johnson & Morrison June 25, 2003 Page 6 disclosed (i) to the Sponsor's counsel, consultants, and other professional advisors in connection with the transactions contemplated hereby, (ii) the seller of The Elder-Beerman Stores Corp., (iii) as required by any governmental authority, or (iv) in connection with the enforcement of the obligations of the Agent, FRFI, Back Bay and FSI hereunder. In addition, reference may be made to the fact that financing is being provided in connection with the Acquisition by FRFI and Back Bay in any press release that the Sponsor and/or the seller of The Elder-Beerman Stores Corp. may issue as long as the specific terms of the financing are not disclosed. The failure of the Sponsor and the Borrower to comply with the foregoing provisions shall, at the option of the Agent and Back Bay only, terminate any and all obligations of the Agent, FRFI, Back Bay and FSI with respect to the financing contemplated hereby. (c) The Agent, FRFI, Back Bay and FSI shall maintain as confidential all nonpublic information finished to them by the Sponsor, the Borrower or their representatives and agents except for purposes of the transactions contemplated by this Commitment; provided, however, that any such information may be disclosed (i) to their respective examiners, outside auditors, counsel, consultants, appraisers and other professional advisors in connection with the transactions contemplated hereby, (ii) as required by any governmental authority, (iii) to any fund partner of Back Bay or to any proposed syndicate member or any proposed assignee or participant, or (iv) in connection with the enforcement of the Sponsor's and Borrower's obligations. Notwithstanding the foregoing, the provisions of this paragraph shall not apply to such portions of the information that (i) is or becomes available to the public through no fault or action of the Agent, FRFI, Back Bay or FSI or their representatives, or (ii) become available to the Agent, FRFI, Back Bay or FSI or their representatives on a non-confidential basis from a source, other than the Borrower or their representatives. 9. GOVERNING LAW; CONSENT TO JURISDICTION (a) This Commitment Letter, the Fee Letter and the Back Bay Fee Letter shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. The Sponsor and the Borrower each agree that any legal action, proceeding, case, or controversy against the Sponsor or the Borrower with respect to this letter or the Revolving Credit Facility or the Term Loan may be brought in the Superior Court of Suffolk County Massachusetts or in the United States District Court, District of Massachusetts, sitting in Boston, Massachusetts, as FRFI may elect in its sole discretion. By acceptance of this letter, the Sponsor and the Borrower for itself and in respect of its property, accepts, submits, and consents generally and unconditionally, to the jurisdiction of the aforesaid courts. (b) The Sponsor and the Borrower each WAIVES any objection based on forum non conveniens and any objection to venue of any action or proceeding instituted under or with respect to this letter or the Revolving Credit Facility or the Term Loan and consents to the granting of such legal or equitable remedy as is deemed appropriate by the relevant Court. ..6.. Golder Hawn Johnson & Morrison June 25, 2003 Page 7 (c) The Sponsor and the Borrower each agree that any action commenced by the Sponsor and the Borrower asserting any claim or counterclaim arising under or in connection with this letter or the Revolving Credit Facility or the Term Loan shall be brought solely in the Superior Court of Suffolk County Massachusetts or in the United States District Court, District of Massachusetts, sitting in Boston, Massachusetts, and that such Courts shall have exclusive jurisdiction with respect to any such action. 10. WAIVER OF JURY TRIAL The Sponsor, the Borrower, FRFI and Back Bay makes each of the following waivers knowingly, voluntarily, and intentionally, and understands that FRFI, Back Bay and FSI, in providing this letter is relying on such waivers. THE SPONSOR, THE BORROWER, FRFI, BACK BAY AND AND FSI WAIVES THE FOLLOWING: THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI OR IN WHICH THE SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN THE SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI. ..7.. Golder Hawn Johnson & Morrison June 25, 2003 Page 8 If the foregoing is in accordance with your understanding of our agreement, please sign this letter in the space indicated below and return it to FRFI. Very truly yours, FLEET RETAIL FINANCE INC. By /S/ Mark J. Forti ------------------------------------ Title: Director BACK BAY CAPITAL FUNDING LLC By /s/ Kristan M. O'Connor ------------------------------------ Title: Director FLEET SECURITIES INC. By /s/ Dave Demenna ------------------------------------ Title: Managing Director The foregoing is agreed to: GOLDNER HAWN JOHNSON & MORRISON as Sponsor and on behalf of the Borrower By /s/ Michael T. Sweeney --------------------------------- Title: Dated: ..8.. (FLEET RETAIL GROUP LOGO) PROJECT WRIGHT (NEWCO) SUMMARY OF TERMS AND CONDITIONS $250,000,000 SENIOR REVOLVING CREDIT FACILITY JUNE 25, 2003 - -------------------------------------------------------------------------------- BORROWER: A newly formed company ("Newco") to be formed by Goldner Hawn Johnson & Morrison (the "Sponsor") to acquire The Elder-Beerman Stores Corp. (the "Target") and the subsidiaries of such newly formed company (which subsidiaries shall in all events include the Target) (the "Company" or the "Borrower"). ADMINISTRATIVE AGENT: Fleet Retail Finance Inc. ("Fleet" or the "Agent"). COLLATERAL AGENT: Fleet Retail Finance Inc. ("FRF" or the "Collateral Agent"). ARRANGER: Fleet Securities, Inc. ("FSI" or the "Arranger"). FACILITY: Fleet will provide the Borrower with a fully underwritten commitment (the "Underwriting") for a $250,000,000 (the "Loan Cap") Senior Secured Revolving Credit Facility (the "Facility" or the "Revolver"). The Revolver shall have a sub-limit of $30,000,000 for the issuance of standby and documentary letters of credit. LENDERS: Fleet and FSI expressly reserve the right to syndicate a portion of the Facility to other financial institutions reasonably acceptable to the Borrower. USE OF PROCEEDS: To finance the acquisition by Newco of the Target and to finance other general corporate purposes of the Borrower, including capital expenditures and the issuance of standby and documentary letters of credit. CLOSING DATE: A mutually agreed upon date to be determined but in any event on or before October 31, 2003. MATURITY: Three years from the Closing Date. PRIORITY AND SECURITY: The Facility will be secured by a first priority perfected security interest in substantially all of the Borrower's assets, excluding (x) real estate in which FRF would hold a 2nd mortgage position behind Back Bay Capital Funding LLC, (y) leasehold interests and non material assets as reasonably determined by the Collateral Agent, and (c) any capital leases or other financings of equipment, the terms of which prohibit junior encumbrances on such equipment, only as long as such capital leases and financings remain outstanding (it being understood that upon payment thereof, the Collateral Agent shall have a lien on such equipment and the proceeds thereof). BORROWING BASE: The Borrowing Base will be established as a percentage of the Borrower's eligible inventory, letter of credit inventory, in-transit inventory and accounts receivable, minus applicable reserves, as follows: Inventory: The inventory advance rates will be determined following the completion of an inventory appraisal. The advance rate shall be the lesser of (i) 85% of the net appraised liquidation value of inventory at cost, or (ii) a percentage to be determined of the cost of eligible inventory. It is anticipated that the adjusted advance rate will approximate 65-70%. Eligible letter of credit inventory and in-transit inventory will be included as eligible provided that such inventory is within 90 days of receipt and such inventory can be monitored and tracked by procedures reasonably satisfactory to the Agent. Accounts Receivable: The advance rate against eligible private label credit card accounts receivable will be 90% of the appraised liquidation value. The borrowing base (the "Borrowing Base"), actual reserves and final advance rates will be determined by the Agent in consultation with the Borrower based upon the results of due diligence, which will include, but not be limited to, inventory and accounts receivable appraisals, as well as a commercial finance field examination. Borrowing Base collateral reporting will be provided to the Agent on a weekly basis. BORROWING OPTIONS: Borrowings under the Revolver shall be at the Fleet Base Rate plus the Applicable Margin ("Base Rate Loan") or the LIBOR Rate plus the Applicable Margin ("LIBOR Rate Loan"). LIBOR Rates will be quoted for one, two, three and six months. Base Rate Loans shall require same business day notice. LIBOR Rate Loans shall require three business days' advance notice. Interest on Base Rate loans will be due and payable monthly in arrears. Interest on LIBOR Rate Loans will be payable at the end of each applicable interest period or quarterly in arrears, whichever is earlier. -2- All interest shall be based on a 360-day year and actual days elapsed for LIBOR Rate Loans and on 365/366 days and actual days elapsed for Base Rate Loans and for any fees payable hereunder. APPLICABLE MARGIN: From the Closing Date until the Agent is in receipt of the audited financial statements for the FYE 1/31/04, the minimum Applicable LIBOR/Base Rate Margin will be set at Level IV. Thereafter, the Applicable Margin will be based upon the pricing grid below, based upon average excess availability for the prior quarter.

LIBOR Base Rate Applicable Applicable Level Excess Availability Margin Margin ----- ------------------- ------ ------ I > $85MM 1.75% 0.25% II > $60MM and < $85MM 2.00% 0.50% III >$40MM and < $60MM 2.25% 0.75% IV < $40MM 2.50% 1.00%

L/C ISSUING BANK: Fleet National Bank LETTER OF CREDIT FEE: Standby Letters of Credit are priced at a fee per annum equal to the LIBOR Applicable Margin, payable on the total face amount of each outstanding Standby Letter of Credit quarterly in arrears. Documentary Letters of Credit are priced at the LIBOR Applicable Margin less 0.50%, payable on the total face amount of each outstanding Documentary Letter of Credit quarterly in arrears. CASH MANAGEMENT: The Collateral Agent shall remain throughout the term of the Facility the concentration bank for the Borrower's cash management. All collections and proceeds from first priority Collateral will be deposited either directly into an account with the Collateral Agent or into an account at an institution for which the Collateral Agent has in place an agency agreement reasonably satisfactory to it in its sole discretion. All proceeds will be used to reduce borrowings under the Revolver on a daily basis, on the business day immediately following receipt by the Collateral Agent. COMMITMENT FEE: Payable at the times and in the amounts set forth in a Fee Letter of even date. -3- UNUSED LINE FEE: A fee on the unused portion of the Facility payable monthly in arrears at a rate of 0.375%. AGENT'S FEE: Payable at the times and in the amounts set forth in a Fee Letter of even date. DOCUMENTATION: The Facility will be subject to the negotiation, execution and delivery of a definitive credit agreement and any other customary documents as shall be requested by the Agent. The credit agreement will contain representations and warranties, funding and yield protection provisions, conditions precedent, covenants, events of default and other provisions appropriate for transactions of this size, type and purpose and shall be acceptable to the Agent and the Borrower and their respective counsel in all reasonable respects. DEFAULT PRICING: 2.00% above the then Applicable Margin. FINANCIAL COVENANTS: An all times minimum excess availability equal to (i) $10,000,000 through January 31, 2004, thereafter, (ii) prior to the sale of the accounts receivable portfolio $20,000,000, and (iii) after the sale of the accounts receivable portfolio, $10,000,000. OTHER COVENANTS: Other affirmative and negative covenants (subject, in each case, to exceptions and baskets to be agreed) to include without limitation,: (a) Usual and customary financial reporting requirements, including monthly stock ledger by department and certain asset based reporting requirements; (b) Maintenance of properties, insurance, and interest rate protection for fifty percent of the Facility for the first two years of the Facility; payment of taxes, compliance with laws, contracts, and permits; ERISA covenants; (c) Limitations on capital expenditures, indebtedness, guarantees, liens, investments, loans, mergers and permitted acquisitions, asset divestitures, dividends and distributions and transactions with affiliates. Note that (i) dividends shall be permitted as long as no default or event of default then exists or would arise therefrom, provided that (A) except as provided in clause (c)(i)(B) hereof, such dividends may be paid on one occasion each year between May 1 and June 15, (B) in addition to dividends permitted under clause (c)(i)(A) hereof, dividends may be paid within 45 days after the sale of the entire accounts receivable portfolio on a non-recourse basis, and (C) before and after giving effect to the payment of such dividends on a pro-forma 12 month basis, excess availability (net of the minimum excess availability required to be maintained under -4- the "Financial Covenants" section of this Term Sheet) under the Borrowing Base shall be equal to or greater than 10% of the total Borrowing Base; and (ii) acquisitions shall be permitted as long as (A) no default or event of default then exists or would arise therefrom and (B) before and after giving effect to the acquisition on a pro-forma 12 month basis, excess availability (net of the minimum excess availability required to be maintained under the "Financial Covenants" section of this Term Sheet) under the Borrowing Base shall be equal to or greater than 10% of the total Borrowing Base. (d) Collateral Agent will have the right to conduct periodic commercial finance exams and appraisals upon reasonable advance notice. (e) Definition of Change in Control to be negotiated by the Agent and the Borrower, but in all events shall be subject to modification and waiver with the consent of the Borrower and majority lenders. EVENTS OF DEFAULT: Usual and customary for facilities of this type, including but not limited to, failure to pay any interest or principal when due, failure to comply with covenants, representations or warranties materially incorrect when made, insolvency, bankruptcy, cross defaults, change of control, judgment defaults and ERISA, with appropriate grace periods and baskets to be negotiated CONDITIONS PRECEDENT: Closing shall be conditioned upon satisfaction of the following conditions precedent and other conditions customary to transactions of this type, or reasonably required by the Agent. (a) All necessary consents and approvals to the financing shall have been obtained (b) Satisfactory completion of due diligence, including a commercial finance examination, inventory appraisal (determined on the net liquidation value), accounts receivable appraisal (determined on the net liquidation value), appraisals of real estate (determined on the forced liquidation value) and environmental site assessments. Appraisals and other due diligence efforts will be undertaken by independent third parties reasonably acceptable to the Agent. (c) Capital structure reasonably acceptable to the Agent, in its sole discretion, which shall include a minimum equity/junior capital injection of not less than $25,000,000 at close. -5- (d) Minimum excess availability as of the Closing Date in an amount equal to $25,000,000 (after giving effect to the loans to be made and letters of credit to be issued on the Closing Date, but without giving effect to the minimum excess availability required under the "Financial Covenants" section of this Term Sheet). All accounts payable and taxes shall be paid current; excluding good faith disputes. (e) Legal opinions of counsel to the Borrower reasonably satisfactory in form and substance to the Administrative Agent, including, without limitation, with respect to the enforceability and perfection of the Collateral Agent's security interests. (f) The Agent shall have entered into an intercreditor and subordination agreement with the holders of the Borrower's mezzanine indebtedness reasonably satisfactory in form and substance to the Agent. The intercreditor agreement shall permit the holder of such mezzanine indebtedness (i) to receive payments of interest, and (ii) to receive payments of principal solely from the proceeds of the sale of the accounts receivable portfolio, in each case as long as no default or event of default then exists or would arise therefrom (g) Any other information (financial or otherwise) reasonably requested by the Agent shall have been received by the Agent and shall be in form and substance reasonably satisfactory to the Agent Without limitation, the Agent shall have received and be satisfied with both (a) the PricewaterhouseCoopers quality of earnings report for the Target, and (b) subject to the last sentence of this sub-paragraph, the McKinsey Co. report concerning the Target's marketing strategy. The Agent's receipt of such reports is conditioned upon the Agent's execution of a release and confidentiality agreement with each of PricewaterhouseCoopers and McKinsey Co. in form satisfactory to the Agent and such entities. In the event that the Agent and McKinsey Co. do not agree on the form of a release and confidentiality agreement (the Borrower having used its best efforts to obtained same), the satisfaction of the Agent with the McKinsey report shall not be a condition to the consummation of the Facility. (h) The Collateral Agent shall have filed all such financing statements and shall have given all such notices as may be necessary for the Collateral Agent to perfect its security interest in the collateral for itself and for the benefit of the Lenders and the Administrative Agent and to assure its first priority status therein subject to permitted liens (as described -6- above in "Priority and Security"). The Collateral Agent shall have received a mortgagee's policy of title insurance containing such exceptions and endorsements, and issued by such companies, as may be reasonably acceptable to the Collateral Agent. (i) No material misstatements in or omissions from the materials previously furnished to the Agent in writing for its review. The Agent must be satisfied that any financial statements delivered to it fairly present the business and financial condition of the Borrower and its subsidiaries, and that there has been no material adverse change in the assets, business, financial condition, or income of any Borrower since the date of the most recent financial information delivered to the Agent. (j) The absence of any litigation or other proceeding the result of which could reasonably be expected to have a Material Adverse Effect. "Material Adverse Effect" means a material adverse effect on (a) the business, operations, property, assets, or condition, financial or otherwise, of any Borrower taken as a whole, (b) the ability of any Borrower to perform any material obligation or to pay any obligations under the Facility, or (c) the validity or enforceability of any of the definitive loan documents or any of the material rights or remedies of the Administrative Agent, the Collateral Agent or the Lenders thereunder. (k) The absence of any default of any material contract or agreement of any Borrower which could reasonably be expected to have a Material Adverse Effect. (l) There shall not have occurred any material disruption or material adverse change in the U.S. financial or capital markets in general that has had, in the reasonable opinion of the Agent, a material adverse effect on the market for loan syndications, or that has materially and adversely affected the syndication of the Facility. (m) The proposed financing is subject to the condition that no material changes in governmental regulations or policies affecting the Borrower, the Agent or Lenders involved in this transaction occur prior to Closing Date. (n) The Agent's reasonable satisfaction with the acquisition documents for the Target, and consummation of the acquisition (with all conditions precedent set forth in the acquisition documents having been satisfied or waived with the consent of -7- the Agent) on terms and structure reasonably acceptable to the Agent. (o) Preparation, execution and delivery of definitive documentation (the "Definitive Documentation") satisfactory to the Borrower, the Agent and Lenders (including a certified Borrowing Base certificate, reasonably appropriate security documentation, and intercreditor provisions with Back Bay Capital Funding LLC). (r) Receipt of solvency opinion prepared by such person as the Agent may engage and otherwise reasonably satisfactory in form and substance to the Agent. The solvency opinion may also be addressed to, and for the benefit of, the Target. INDEMNIFICATION: The Borrower agrees to indemnify and hold the Agent and the Lenders and their respective shareholders, directors, agents, officers, subsidiaries and affiliates harmless from and against any and all damages, losses, settlement payments, obligations, liabilities, claims, actions or causes of action, and reasonable costs and expenses incurred, suffered, sustained or required to be paid by an indemnified party as more particularly set forth in the Commitment Letter accompanying this Term Sheet. ASSIGNMENTS AND PARTICIPATIONS: The Lenders will be permitted to grant participations or assignments of their loans and commitments. Any Lender will be permitted to assign a portion of the Revolver to another eligible lending institution (to be defined in the definitive documentation) in minimum amounts of $5,000,000, subject to customary provisions of participation or assignment transactions. Prior to the occurrence of a default and after completion of the initial syndication, the Borrower shall have the right to consent to any such assignment, such consent not to be unreasonably withheld or delayed. In no event may the Lenders grant participations or make assignments to a competitor of the Target. VOTING RIGHTS: Lenders holding at least 51% of all of the outstanding commitments under the Facility (the "Majority Lenders") for all amendments and waivers provided that the following, among others, shall require 100% of the Lenders affected thereby: (1) increase in commitments; (2) decreases in interest rates or fees; (3) change to final maturity; (4) release of substantial portions of the collateral and (5) changes in the percentage constituting Voting Rights and (6) changes to the Borrowing Base. GOVERNING LAW: The Commonwealth of Massachusetts. -8- AGENT'S COUNSEL: Riemer & Braunstein, LLP -9- [BACK BAY CAPITAL LOGO] PROJECT WRIGHT (NEWCO) SUMMARY OF TERMS AND CONDITIONS FOR TERM LOAN CREDIT FACILITY JUNE 25, 2003 BORROWER: A newly formed company ("Newco") to be formed by Goldner Hawn Johnson & Morrison (the "Sponsor") to acquire The Elder-Beerman Stores Corp. (the "Target") and the subsidiaries of such newly formed company (which subsidiaries shall in all events include the Target) (the "Company" or the "Borrower"). LENDER: Back Bay Capital Funding LLC CREDIT FACILITY: $25,000,000 term loan to be fully funded at closing, and structured on a first in/last out basis in conjunction with a $250,000,000 senior credit facility to be agented by Fleet Retail Finance Inc. (the "Senior Credit Facility"). Total facility size will be $275,000,000. PURPOSE: To finance the acquisition by Newco of the Target and to finance other general corporate purposes of the Borrower, including capital expenditures. CLOSING DATE: A mutually agreed upon date to be determined but in any event on or before October 31, 2003. MATURITY: Three (3) years from the Closing Date. SECURITY: The Credit Facility will be secured by a first priority mortgage lien on all real estate and a 2nd priority security position on all of the Borrower's other assets and capital stock, excluding (x) leasehold interests, (y) non-material assets as reasonably determined by the Lender, and (z) any capital leases or other financings of equipment, the terms of which prohibit junior encumbrances on such equipment, only as long as such capital leases and financings remain unpaid (it being understood that upon payment thereof, the Lender shall have a lien on such equipment and the proceeds thereof), subject only to a 1st security position in favor of the Senior Credit Facility. BORROWING BASE: At no time shall outstanding amounts under the Senior Credit Facility plus outstanding amounts under the Credit Facility exceed the lesser of (i) a percentage to be determined of the cost value of eligible inventory, or (ii) 96% of the current appraised liquidation (GOB) value of eligible inventory; plus, 92% of the appraised liquidation value of eligible in-house credit card receivables, plus 65% of the appraised Forced Liquidation Value of owned real estate; minus, applicable reserves. COLLATERAL ELIGIBILITY: Eligibility of inventory and accounts receivable shall be determined following the reported results of an inventory appraisal, receivables appraisal, and commercial finance examination. Eligibility qualifications shall be consistent with those determined by the Agent for the Senior Credit Facility, and upon review of the results of due diligence. Eligible real estate shall consist of real estate owned by the Borrower in fee simple title on which the Lender has a first priority lien, subject only to encumbrances reasonably acceptable to the Lender and as to which the environmental studies furnished the Lender reflect no environmental violations. The actual reserves and final advance rates will be determined based upon the results of due diligence, which will include appraisals of the value of inventories, accounts receivable and real estate, a commercial finance examination, and environmental assessment reports (as relates to the condition of the real estate). COMMITMENT FEE: Payable at the times and in the amounts set forth in a Fee Letter of even date. CURRENT PAY INTEREST: From the closing through the first anniversary date of closing, 12.00% per annum, payable monthly in arrears. Thereafter, interest shall accrue at a rate equivalent to Fleet Bank's prime lending rate plus 7.75% per annum adjusted quarterly, payable monthly in arrears. PIK (PAYMENT IN KIND) INTEREST: 2.50% per annum accruing, to be capitalized and added to the principal balance of the Credit Facility the first day of each calendar month, and payable upon maturity. -2- MONITORING FEE: Payable at the times and in the amounts set forth in a Fee Letter of even date. EARLY TERMINATION FEE: Payable at the times and in the amounts set forth in a Fee Letter of even date. AMORTIZATION: None required. The Credit Facility may be repaid from the proceeds of the sale of the accounts receivable portfolio as long (x) as no default or event of default then exists or would arise therefrom and (y) such payment is accompanied by payment of all accrued and unpaid interest and any applicable Early Termination Fee. FINANCIAL COVENANTS: Financial covenants shall include, but not be limited to: An all times minimum excess availability equal to i) $10,000,000 through January 31, 2004, thereafter ii) prior to the sale of the accounts receivable portfolio $20,000,000, and iii) after the sale of the accounts receivable portfolio, $10,000,000. OTHER COVENANTS: Other affirmative and negative covenants (subject, in each case, to exceptions and baskets to be agreed) to include without limitation,: a) Usual and customary financial reporting requirements, including monthly stock ledger by department and certain asset based reporting requirements; b) Maintenance of properties and insurance; payment of taxes, compliance with laws, contracts, and permits; ERISA covenants; c) Limitations on capital expenditures, indebtedness, guarantees, liens, investments, loans, mergers and permitted acquisitions, asset divestitures, dividends and distributions and transactions with affiliates. Note that (i) dividends shall be permitted as long as no default or event of default then exists or would arise therefrom, provided that (A) except as provided in clause (c)(i)(B) hereof, such dividends may be paid on one occasion each year between May 1 and June 15, (B) in addition to dividends permitted under clause (c)(i)(A) hereof, dividends may be paid within 45 days after the sale of the entire accounts receivable portfolio on a non-recourse basis, and (C) before and after giving effect to the payment of such dividends on a pro- -3- forma 12 month basis, excess availability (net of the minimum excess availability required to be maintained under the "Financial Covenants" section of this Term Sheet) under the Borrowing Base shall be equal to or greater than 10% of the total Borrowing Base; and (ii) acquisitions shall be permitted as long as (A) no default or event of default then exists or would arise therefrom and (B) before and after giving effect to the acquisition on a pro-forma 12 month basis, excess availability (net of the minimum excess availability required to be maintained under the "Financial Covenants" section of this Term Sheet) under the Borrowing Base shall be equal to or greater than 10% of the total Borrowing Base. d) Lender will have the right to conduct periodic commercial finance exams and appraisals upon reasonable advance notice. e) Definition of Change in Control to be negotiated by the Lender and the Borrower. CONDITIONS PRECEDENT: Closing shall be conditioned upon satisfaction of the following conditions precedent and other conditions customary to transactions of this type, or reasonably required by the Lender. 1. Capital structure reasonably acceptable to the Lender, in its sole discretion, which shall include a minimum equity/junior capital injection of not less than $25,000,000 at close. 2. Minimum excess availability as of the Closing Date in an amount equal to $25,000,000 (after giving effect to the loans to be made and letters of credit to be issued on the Closing Date, but without giving effect to the minimum excess availability required under the "Financial Covenants" section of this Term Sheet). All accounts payable and taxes shall be paid current; excluding good faith disputes. 3. Liens on all of the Borrower's collateral shall have been filed and otherwise perfected to the satisfaction of the Lender. The Lender shall have received a mortgagee's policy of title insurance containing such exceptions and endorsements, and -4- issued by such companies, as may be reasonably acceptable to the Lender. 4. Satisfactory completion of due diligence, including a commercial finance examination, inventory appraisal (determined on the net liquidation value), accounts receivable appraisal (determined on the net liquidation value), appraisals of real estate (determined on the forced liquidation value) and environmental site assessments. Appraisals and other due diligence efforts will be undertaken by independent third parties reasonably acceptable to the Lender. 5. All necessary consents and approvals to the financing shall all have been obtained. 6. Any other information (financial or otherwise) reasonably requested by the Lender shall have been received by the Lender and shall be in form and substance reasonably satisfactory to the Lender. Without limitation, the Lender shall have received and be satisfied with both (a) the PricewaterhouseCoopers quality of earnings report for the Target, and (b) subject to the last sentence of this sub- paragraph, the McKinsey Co. report concerning the Target's marketing strategy. The Lender's receipt of such reports is conditioned upon the Lender's execution of a release and confidentiality agreement with each of PricewaterhouseCoopers and McKinsey Co. in form satisfactory to the Lender and such entities. In the event that the Lender and McKinsey Co. do not agree on the form of a release and confidentiality agreement (the Borrower having used its best efforts to obtained same), the satisfaction of the Lender with the McKinsey report shall not be a condition to the consummation of the Credit Facility. 7. Completion of the legal due diligence investigation by the Lender's counsel, with results satisfactory to the Lender and its counsel. 8. Preparation, execution and delivery of definitive documentation satisfactory to the Lender and the Borrower. Documentation shall contain -5- representations, covenants, events of default, expense reimbursement, and indemnification provisions for the benefit of the Lender customary for transactions of this size, type, and purpose. 9. Satisfactory intercreditor or agency agreement provisions between the Lender and agent for the Senior Credit Facility. 10. The Lender shall have received (i) reasonable and customary opinions of counsel to the Borrower as to the transactions contemplated hereby which opinions are satisfactory to the Lender and (ii) such corporate resolutions, certificates and other documents as the Lender shall reasonably request. 11. No material misstatements in or omissions from the materials previously furnished to the Lender for its review. The Lender must be satisfied that any financial statements and projections delivered to it fairly present the business and financial condition of the Borrower, and that there has been no material adverse change in the assets, business, financial condition, income or prospects of any Borrower since the date of the most recent financial information delivered to the Lender. 12. The absence of any litigation or other proceeding the result of which could reasonably be expected to have a Material Adverse Effect. "Material Adverse Effect" means a material adverse effect on (a) the business, operations, property, assets, or condition, financial or otherwise, of any Borrower taken as a whole, (b) the ability of any Borrower to perform any material obligation or to pay any obligations under the Credit Facility, or (c) the validity or enforceability of any of the definitive loan documents or any of the material rights or remedies of the Lender thereunder. 13. The absence of any default of any material contract or agreement of any Borrower which could reasonably be expected to have a Material Adverse Effect. 14. The proposed financing is subject to the condition that no material changes in governmental -6- regulations or policies affecting any Borrower or Lender involved in this transaction occur prior to the Closing Date. 15. The Lender shall have entered into an intercreditor and subordination agreement with the holders of the Borrower's mezzanine indebtedness reasonably satisfactory in form and substance to the Lender. The intercreditor agreement shall permit the holder of such mezzanine indebtedness (i) to receive payments of interest, and (ii) to receive payments of principal solely from the proceeds of the sale of the accounts receivable portfolio, in each case as long as no default or event of default then exists or would arise therefrom. 16. The Lender's reasonable satisfaction with the acquisition documents for the Target, and consummation of the acquisition (with all conditions precedent set forth in the acquisition documents having been satisfied or waived with the consent of the Lender) on terms and structure reasonably acceptable to the Lender. 17. Receipt of solvency opinion prepared by such persons and otherwise reasonably satisfactory in form and substance to the Lender. The solvency opinion may also be addressed to, and for the benefit of, the Target. ASSIGNMENTS AND PARTICIPATIONS: The Lender will be permitted to grant participations or assignments of their loans and commitments. Prior to the occurrence of a default, the Borrower shall have the right to consent to any such assignment, such consent not to be unreasonably withheld or delayed. In no event may the Lender grant participations or make assignments to a competitor of the Target. GOVERNING LAW: The Commonwealth of Massachusetts. AGENT'S COUNSEL: Bingham McCutchen LLP -7- EX-99.C.2 5 l02105aexv99wcw2.htm EX (C)(2)

Exhibit (c)(2)

Presentation to The Board of Directors Regarding Project Buckeye Strictly Private and Confidential June 5, 2003 TO BE UPDATED AS APPROPRIATE FOR SUBSEQUENT BOARD OF DIRECTORS DELIBERATIONS

Table of Contents Transaction Overview Background to the Transaction Merger Price Analysis

I. Transaction Overview

Transaction Overview(1) Acquiror: A special purpose acquisition vehicle formed by Goldner Hawn Johnson & Morrison Incorporated with Buckeye management participation ("GHJM") Transaction Structure: Cash merger Tax Treatment: Taxable transaction Merger Price: $6.00 per share in cash Options: Part to be cashed-out and part to be exercised and rolled-over Employment Agreements: Voting Agreements: No-Shop: Termination Fee: Significant Conditions to Close: To be completed based on review of pre-execution Agreement and Plan of Merger Based upon a review of the draft Agreement and Plan of Merger dated 6/2/03.

II. Background to the Transaction

Early Background to the Transaction Timeline Comments December 14, 1999 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party A executed a confidentiality agreement. February 2000 The board of directors (the "Board") retained an investment bank to pursue strategic alternatives. March - June 2000 The investment bank contacted a broad universe of both potential strategic and financial buyers. July 19, 2000 The Board reviewed Party A's bid of $5.25 per share (the highest bid received from interested parties who had submitted bids to the investment bank in connection with the review of strategic alternatives). August 2000 Party A's bid was rejected by the Board. The Board approved a share repurchase program, in which Buckeye completed the repurchase of 3.5 million shares for $17.7 million at an average price of $5.05 per share. October 2001 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party B executed a confidentiality agreement.

Events Leading to Current Proposal Timeline Comments August 9, 2002 Party B proposed $3.50 per share. August 19, 2002 RBC Dain Rauscher Inc., a member company of RBC Capital Markets ("RBC"), was hired by the Board. Party B executed a new confidentiality agreement. September 3, 2002 Party B proposed $4.50 per share. November 20, 2002 Party B (with different advisors) proposed $4.00 per share. February 3, 2003 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party C executed a confidentiality agreement. March 13, 2003 Party B (with different advisors) proposed $4.50 per share. March 24, 2003 GHJM executed a confidentiality agreement. April 8, 2003 Party C proposed $3.50 per share. May 7, 2003 Party C proposed $4.60 per share. May 9, 2003 GHJM proposed $4.75 per share. GHJM and Party C were invited to submit best and final proposals. May 12, 2003 GHJM proposed $6.00 per share, which was superior to Party C's revised bid. May 16, 2003 Exclusivity letter agreement was signed by Buckeye with GHJM.

III. Merger Price Analysis

Financial Performance (in thousands, unless otherwise noted) Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 2/1/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM 2003E 2004E 2005E 2006E 2007E Summary Data Number of stores (ending) 64 68 68 68 69 72 74 77 80 Comparable store sales growth (0.8%) (3.5%) (2.4%) (3.5%) 0.0% 1.0% 1.0% 1.0% 1.0% Sales per square foot(2) $123 $119 $117 $117 $119 $120 $122 $124 $126 Income Statement Revenue $675,209 $661,170 $657,667 $647,471 $657,111 $678,166 $705,491 $733,648 $766,663 % Growth (2.1%) (0.5%) (2.3%) (0.1%) 3.2% 4.0% 4.0% 4.5% Gross profit $243,299 $231,830 $228,848 $226,345 $229,737 $237,877 $249,470 $259,575 $271,424 % Margin 36.0% 35.1% 34.8% 35.0% 35.0% 35.1% 35.4% 35.4% 35.4% EBITDA $42,321 $39,736 $40,402 $39,529 $40,810 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.2% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,635 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 3.4% 3.6% 4.0% 4.2% 4.3% Net income $7,227 $3,819 $5,242 $4,958 $6,452 $9,950 $12,197 $13,422 $14,062 % Margin 1.1% 0.6% 0.8% 0.8% 1.0% 1.5% 1.7% 1.8% 1.8% Balance Sheet Cash and cash equivalents $7,878 $7,142 $9,735 $7,345 $7,500 $7,575 $7,550 $7,650 $7,625 Net debt $159,263 $146,878 $110,848 $110,099 $94,500 $78,325 $65,150 $49,350 $38,675 Shareholders' equity $222,000 $217,210 $206,700 $205,077 $215,600 $225,600 $237,800 $251,200 $265,300 Ratios Inventory turnover 2.7x 2.8x 3.0x 2.8x 3.1x 3.3x 3.4x 3.4x 3.4x Accounts receivable days 74.4 72.6 70.7 68.8 70.4 69.3 69.0 69.1 68.9 Accounts payable days 29.9 30.7 33.9 38.8 33.3 30.8 30.1 30.1 30.0 Net debt/net capitalization 41.8% 40.3% 34.9% 34.9% 30.5% 25.8% 21.5% 16.4% 12.7% EBITDA/interest expense 3.0x 2.8x 3.3x 3.3x 3.5x 5.5x 5.5x 5.3x 5.1x Total debt/EBITDA 3.9x 3.9x 3.0x 3.0x 2.5x 2.0x 1.6x 1.2x 0.9x The normalized historical and forecast financial information contained on this page has been provided by the Company's management (the "Company Financials"). "Normalized" reflects adjustments by the Company's management to eliminate extraordinary and non-recurring items. In preparing its fairness analysis, RBC has relied, without independent investigation, upon the advice received by RBC from the Company that the Company Financials were prepared by the Company's management in good faith and in the ordinary course of business for use by the Company and were based on both (i) adjustments, consistent with the Company's financial books and records, to eliminate extraordinary and non-recurring items, and (ii) in the case of the forward-looking Company Financials, the best currently available estimates of the Company's future financial performance, which, in both cases management believed reasonable at the time of their preparation and RBC's use thereof in connection with its fairness analysis. The Company has also advised RBC that such use has been authorized by the Company's Board of Directors. In addition, RBC has assumed that the Company will perform substantially in accordance with the forward-looking Company Financials. RBC acknowledges that the Company has further advised RBC that actual results for the periods covered by the forward-looking Company Financials may differ materially from the results forecasted therein and that the Company has referred RBC to the Company's Report on Form 10-K for the fiscal year ended February 1, 2003 for an identification of certain factors that could materially affect its future operations and results. Represents sales per gross square foot.

Merger Price Analysis Methodologies Comparable Company Analysis Analyzed current public market trading values of comparable companies. Precedent Transaction Analysis Analyzed multiples paid on selected acquisition transactions. Discounted Cash Flow Analysis Analyzed present value of projected unlevered after-tax free cash flows of Buckeye, based on the Company Financials, utilizing a range of weighted average costs of capital and terminal EBITDA exit multiples. Premium Paid Analysis Analyzed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts).

Implied Multiples (in millions, unless otherwise noted) Purchase Price per Share Unaffected Price(2) Merger Price Variable(1) $3.19 $6.00 Equity value(3) $38.2 $79.2 Enterprise value(4) $148.3 $185.2 Enterprise value multiples: LTM revenue $647.5 0.23x 0.29x 2003E revenue $657.1 0.23x 0.28x 2004E revenue $678.2 0.22x 0.27x 2005E revenue $705.5 0.21x 0.26x LTM EBITDA $39.5 3.8x 4.7x 2003E EBITDA $40.8 3.6x 4.5x 2004E EBITDA $42.1 3.5x 4.4x 2005E EBITDA $46.2 3.2x 4.0x LTM EBIT $20.9 7.1x 8.9x 2003E EBIT $22.6 6.6x 8.2x 2004E EBIT $24.3 6.1x 7.6x 2005E EBIT $28.2 5.3x 6.6x Equity value multiples: LTM EPS $0.44 7.3x 13.8x 2003E EPS $0.57 5.6x 10.6x 2004E EPS $0.87 3.6x 6.9x 2005E EPS $1.07 3.0x 5.6x Based on the Company Financials. LTM stands for "Last Twelve Months" and is as of 5/3/03. The ("Unaffected Price") is Buckeye's closing stock price on 5/13/03, the date on which the two competing final proposals were considered by the Executive Committee of the Board, which decided to recommend the GHJM proposal to the Board for exclusive negotiation. Board approval was issued on 5/14/03. Equity value is based on TSM shares outstanding for the Unaffected Price. All other purchase price per share equity values are based on fully diluted shares outstanding. Enterprise value is based on net debt outstanding at 5/3/03. Debt is adjusted for cash balances and cash proceeds from options at the range of purchase prices per share and not at the Unaffected Price.

Implied Share Price Min Max Mean Median Comparable Company Analysis LTM Revenue ($1.38) $1.80 $1.01 $1.01 LTM EBITDA $0.55 $13.83 $5.75 $3.95 LTM EBIT $0.20 $14.38 $7.62 $7.78 LTM Earnings $2.87 $9.47 $6.18 $6.18 Precedent Transaction Analysis LTM Revenue $2.83 $35.94 $17.96 $16.10 LTM EBITDA $5.88 $19.72 $12.56 $11.56 LTM EBIT $1.89 $20.50 $8.85 $7.71 LTM Earnings $5.19 $15.50 $10.31 $10.02 DCF Analysis Company Financials $2.89 $8.02 NA NA Premium Paid Analysis 30-Day Premium Paid $2.54 $6.00 $4.06 $3.77 Merger Price $6.00 Merger Price ($6.00 per share) Merger Price Analysis Summary Range (min. - max.) Mean Median Implied Share Price (1) Implied share prices based on the Company Financials. Unaffected Price: $3.19

Comparable Company Analysis Methodology Analyzed comparable company trading multiples. No control premium is reflected in the results of the public market trading multiples. Target selection Based on a peer group of regional department store retailers with business models similar to Buckeye. No public company is directly comparable to Buckeye.

Comparable Company Analysis (Cont.)(1) Enterprise Value Multiples Earnings Number Reported Price @ % of 52W Equity Enterprise LTM Price / Earnings LTM Margins 3-5 year Of Sales per Net Debt / Company 05/30/03 High Value (2) Value Revenue EBITDA EBIT LTM FY 2003E FY 2004E Gross EBITDA Secular(3) Stores(4) Sq. Ft. Net Cap. Bon-Ton Stores Inc. $4.75 90.0% $72.8 $138.7 0.20x 3.0x 5.4x 6.6x NA NA 37.8% 6.7% NA 72 $133 23.9% Gottschalks Inc. $1.50 41.9% $19.2 $103.6 0.15x 4.1x 9.5x NM NA NA 34.8% 3.6% 25.0% 81 $173 45.2% Stein Mart Inc. $5.87 47.6% $244.0 $283.3 0.20x 7.3x 14.3x 21.7x NM 14.7x 25.0% 2.8% 20.0% 265 $184 14.9% Value City Dept. Stores Inc. $2.97 68.3% $100.8 $355.2 0.14x 3.8x 10.5x NM 37.1x NA 38.2% 3.8% 20.0% 116 $224 53.5% Min 0.14x 3.0x 5.4x 6.6x 37.1x 14.7x 25.0% 2.8% 20.0% 72 $133 14.9% Median 0.17x 4.0x 10.0x 14.2x 37.1x 14.7x 36.3% 3.7% 20.0% 99 $179 34.6% Mean 0.17x 4.6x 9.9x 14.2x 37.1x 14.7x 34.0% 4.2% 21.7% 134 $179 34.4% Max 0.20x 7.3x 14.3x 21.7x 37.1x 14.7x 38.2% 6.7% 25.0% 265 $224 53.5% Buckeye @ Unaffected Price (5) $3.19 91.1% $38.2 $148.3 0.23x 3.8x 7.1x 7.3x 5.6x 3.6x 35.0% 6.1% 21.5% 68 $117 34.9% Buckeye @ Merger Price (6) $6.00 171.4% $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 10.6x 6.9x 35.0% 6.1% 21.5% 68 $117 34.1% Source: Company press releases, SEC filings, and Wall Street Research. NA, NM, LTM, and CY are defined as not available, not meaningful, last twelve months, and calendar year, respectively. Based on shares outstanding calculated using the treasury stock method. Source: First Call. Earnings secular growth rates are 3-5 year secular projected growth rates. Buckeye's growth rate is based on the Company Financials for 2003 to 2007 EPS. As of most recent 10K filing. Gottschalks Inc. includes 12 specialty stores. Value City Dept. Stores Inc. excludes DSW and Filene's Basement stores. Buckeye includes 2 furniture stores. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value based on the treasury stock method and the Unaffected Price. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value is based on fully-diluted shares outstanding with net debt and enterprise value adjusted for cash proceeds from stock options. (in millions, unless otherwise noted) Regional Department Stores

Precedent Transaction Analysis Methodology Analyzed the multiples paid on selected acquisition transactions. Multiples paid reflect market conditions at the time of the announcement, potential synergies, and control premiums. Target selection Based on acquisitions of broad line department store retailers and moderate-priced specialty softline retail companies that are similar to Buckeye (the "Selected Precedents"). No target is directly comparable to Buckeye.

Precedent Transaction Analysis (Cont.) At Announcement Enterprise Value Price / Premium Change in Reported Date Equity Enterprise LTM Multiples(4)(5) LTM LTM Margin(5) Analysis(6) Revenue Growth Comp Store Sales per Net Debt / Ann.(1) Target Acquiror Value(2) Value(3) Revenues EBITDA EBIT Earnings Gross EBITDA EBIT 30-Day 1-Year 2-Year Sales(7) Sq. Ft. Net Cap. 07/10/01 Lane Bryant Inc. Charming Shoppes Inc. $335.0 $329.2 0.35x 9.1x 18.2x 30.8x 28.4% 3.8% 1.9% NA NA NA 3.0% NA NA 06/19/01 Liberty House Inc. Federated Department Stores Inc. NA $200.0 0.73x NA NA NA NA NA NA NA NA NA NA $231 NA 08/24/00 Thrifty's, Braemar, and NLS American Eagle Outfitters Inc. $74.0 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 11/15/99 Catherine's Stores Corp. Charming Shoppes Inc. $162.0 $149.8 0.50x 4.6x 6.3x 11.9x 32.7% 10.7% 7.8% 59.9% 5.5% 5.8% 8.9% $177 NMF 10/15/99 Zions Cooperative Merc. Inst. May Departemtent Stores Co. $52.4 $116.0 0.49x NMF NMF NMF 30.8% NMF NMF 32.4% (7.0%) (4.0%) (4.0%) NA 65.7% 05/11/99 Pamida Holdings Corp. ShopKo Stores Inc. $109.6 $344.3 0.51x 7.4x 10.3x 23.0x 24.9% 7.0% 4.9% 120.4% 2.3% 3.0% 3.0% $152 125.4% 03/04/99 K&G Men's Center Inc. Men's Wearhouse Inc. $115.5 $98.6 0.75x 9.3x 10.0x 17.1x 23.2% 8.0% 7.5% 38.4% 23.8% 29.9% 11.9% $517 NMF 11/18/98 Moores Retail Group Inc. Men's Wearhouse Inc. $64.8 $121.7 0.91x NA 9.3x 35.6x 37.5% NA 9.8% NA NA NA NA NA 91.7% 11/12/98 Hills Stores Co. Ames Department Stores Inc. $16.9 $396.3 0.22x 5.1x 13.7x NMF 26.0% 4.3% 1.6% (6.6%) (2.0%) (3.2%) (1.5%) NA 64.9% 03/13/98 Shonac Corp. Value City Department Stores Inc. $99.9 $105.7 0.35x 5.7x 6.9x NA 39.8% 6.2% 5.1% NA 20.6% NA NA NA 9.5% Min 0.22x 4.6x 6.3x 11.9x 23.2% 3.8% 1.6% (6.6%) (7.0%) (4.0%) (4.0%) $152 9.5% Median 0.50x 6.6x 10.0x 23.0x 29.6% 6.6% 5.1% 38.4% 3.9% 3.0% 3.0% $204 65.7% Mean 0.53x 6.9x 10.7x 23.7x 30.4% 6.7% 5.5% 48.9% 7.2% 6.3% 3.6% $269 71.4% Max 0.91x 9.3x 18.2x 35.6x 39.8% 10.7% 9.8% 120.4% 23.8% 29.9% 11.9% $517 125.4% Buckeye @ Merger Price - $6.00 per share(8) $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 35.0% 6.1% 3.2% 120.3% (2.3%) (1.9%) (2.4%) $117 34.1% Based on the public announcement date of offer price. Fully diluted equity value calculated using shares outstanding sourced from the 10-Q,10-K, or any other filing that would disclose shares outstanding prior to the offer announcement date and options outstanding that are in-the-money sourced from the 10-K prior to the offer announcement date. Equity value represents the total equity value of the company at offer announcement date. Enterprise value calculated using same method described in note 2 for the equity value and sourcing cash, short-term investments, debt, minority interest, preferred stock from the 10-Q or financial press release prior to the offer announcement date. The cash proceeds from the exercise of in-the-money options are used to reduce net debt. Enterprise value represents the total enterprise value of the company at the initial offer price. LTM multiples calculated from latest financials prior to offer announcement date. EBITDA, EBIT, and net income are calculated using a normalized figure. Premiums are based on the average closing stock price over the specified time interval. Buckeye's premium is based on the Unaffected Price. Change in comp store sales is based on the most recent fiscal year as of announcement date. Based on the Company Financials. (in millions, unless otherwise noted) Selected Precedents

Discounted Cash Flow Analysis Methodology Analyzed the present value of the projected after-tax cash flows of Buckeye (EBITDA less cash taxes on EBIT, capital expenditures, and increases in working capital) through 2007E at a range of discount rates and terminal value EBITDA multiples. Projected after-tax cash flows of Buckeye are based on the Company Financials. Weighted average cost of capital ("WACC") Cost of equity is based on the modified capital asset pricing model ("CAPM") method with beta, market risk premium, and size premium information sourced from Ibbotson Associates 2003 Yearbook. Cost of debt is based on the estimated spread over the 10-year Treasury as determined by RBC. Terminal value Terminal value is calculated using the terminal EBITDA multiple method, whereby an EBITDA multiple is applied to Buckeye's 2007E EBITDA. Terminal EBITDA multiple range is consistent with trading multiples for comparable regional department store companies referred to in the comparable company analysis.

Discounted Cash Flow Analysis Summary Equity Value per Share: Equity value per share: Terminal EBITDA Multiple 3.5x 4.0x 4.5x 5.0x 5.5x 17.0% $4.11 $5.09 $6.07 $7.04 $8.02 18.0% $3.79 $4.74 $5.68 $6.62 $7.56 WACC 19.0% $3.48 $4.40 $5.31 $6.22 $7.12 20.0% $3.18 $4.07 $4.95 $5.83 $6.70 21.0% $2.89 $3.75 $4.61 $5.45 $6.30

Discounted Cash Flow Analysis Detail Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 5/03 - 2/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM Q2/03E - Q4/03E 2004E 2005E 2006E 2007E 3/31/2003 3/31/2004 3/31/2005 3/31/2006 3/31/2007 Revenue $675,209 $661,170 $657,667 $647,471 $522,512 $678,166 $705,491 $733,648 $766,663 % Growth 2.6% (2.1%) (0.5%) (2.3%) 1.9% 3.2% 4.0% 4.0% 4.5% EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.9% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,740 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 4.4% 3.6% 4.0% 4.2% 4.3% Unlevered free cash flow EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 Less: cash taxes NA NA NA NA $227 $292 $9,787 $10,826 $11,494 Less: capital expenditures $23,471 $19,094 $8,336 $9,571 $10,161 $14,000 $12,000 $14,200 $14,000 Less: increase in working capital ($10,754) ($23,163) ($21,941) ($22,041) $2,433 $1,620 $9,887 $8,913 $9,347 Unlevered free cash flow NA NA NA NA $23,353 $26,185 $14,532 $13,816 $15,435 Sensitivity Analysis Weighted average cost of capital 17.0% 19.0% 21.0% PV of free cash flow $69,958 $67,990 $66,140 PV of terminal value(2) $116,087 $108,019 $100,632 Enterprise value $186,045 $176,009 $166,772 Less: debt $117,444 $117,444 $117,444 Add: cash $7,345 $7,345 $7,345 Add: cash from stock options $4,169 $4,089 $3,885 Less: net debt(3) $105,930 $106,010 $106,214 Equity value $80,115 $69,999 $60,558 Shares outstanding(4) 13,205 13,191 13,149 Equity value per share $6.07 $5.31 $4.61 Based on the Company Financials. Based on terminal EBITDA multiple of 4.5x. Net debt is at 5/3/03. Fully diluted shares outstanding at corresponding equity value. (in thousands, unless otherwise noted)

Weighted Average Cost of Capital Calculation Raw Levered Net Market Net Debt / Unlevered Assumed Capital Structure Regional Department Stores Beta(1) Beta(2) Debt Value Mkt. Equity(3) Beta(4) Debt 35.0% Bon-Ton Stores Inc. 0.58 0.72 $65.9 $72.8 90.4% 0.45 Equity 65.0% Gottschalks Inc. 0.75 0.83 $84.3 $19.2 439.3% 0.22 Stein Mart Inc. 1.11 1.07 $39.2 $244.0 16.1% 0.97 Debt/Equity Ratio 53.8% Value City Dept. Stores Inc. 1.80 1.53 $254.4 $100.8 252.5% 0.58 Capital Cost Assumptions and Summary Mean 1.06 1.04 199.6% 0.56 Unlevered Beta (Unadjusted)(5) 1.35 Micro-Cap Beta(5) 1.35 Relevered Beta (Adjusted)(6) 1.82 Equity Risk Premium ("ERP")(7) 9.4% Size Premium ("SP")(8) 3.5% Relevered Beta x (ERP + SP) 23.6% Risk Free Rate (10-Year US Treasury) 3.4% Cost of Equity 27.0% Credit Spread 4.5% Pre-Tax Cost of Debt 7.9% Tax Rate 35.0% WACC Sensitivity Analysis After-Tax Cost of Debt 5.1% Percentage of Debt in Capital Structure 20% 25% 30% 35% 40% 45% 50% Weighted Average Cost of Capital 19.3% 1.31 19.5% 19.3% 19.1% 18.9% 18.7% 18.5% 18.2% 1.32 19.6% 19.4% 19.2% 19.0% 18.8% 18.6% 18.4% 1.33 19.7% 19.5% 19.3% 19.1% 18.9% 18.7% 18.5% 1.34 19.9% 19.6% 19.4% 19.2% 19.0% 18.8% 18.6% 1.35 20.0% 19.8% 19.5% 19.3% 19.1% 18.9% 18.7% 1.36 20.1% 19.9% 19.7% 19.4% 19.2% 19.0% 18.8% 1.37 20.2% 20.0% 19.8% 19.6% 19.3% 19.1% 18.9% 1.38 20.3% 20.1% 19.9% 19.7% 19.4% 19.2% 19.0% 1.39 20.5% 20.2% 20.0% 19.8% 19.6% 19.3% 19.1% Source: Bloomberg. Based on two-year weekly observations. Adjusted such that Beta = (2/3) X (Raw Beta) + (1/3) X 1. Based on current capital structure. BU = BL / ((1+(1-t) X (Net Debt / Mkt Equity)). Source: Ibbotson Associates Cost of Capital 2002 Yearbook. Micro-Cap comprised of the ninth and tenth deciles of the New York Stock Exchange, includes companies with a market capitalization under approximately $215 million. BL = (BU+Risk Premium) X (1+(D/E)(1-t)). Source: Ibbotson Associates 2003 Yearbook. Equity risk premium includes estimated return in excess of riskless rate of the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. Estimated return in excess of riskless rate is estimated by the arithmetic mean total return of the S&P 500 (12.20%) minus the arithmetic mean income return component of 20-year government bonds (5.23%) from 1926 to 2002. Source: Ibbotson Associates 2003 Yearbook. Size premium is return in excess of CAPM equity risk premium for the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. (in millions, unless otherwise noted)

Premium Paid Analysis Methodology Analyzed the premiums paid on the Selected Precedents where the target was publicly traded prior to the transaction. Premium selection Reviewed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts).

Premium Paid Analysis Summary Announcement Target Target Premium Paid(2) Target Acquiror Date Equity Value Enterprise Value 1-Day 30-Day 60-Day 90-Day Catherine's Stores Corp. Charming Shoppes Inc. 11/15/99 $162.0 $149.8 69.7% 59.9% 58.0% 57.7% Zions Cooperative Merc. Inst. May Departemtent Stores Co. 10/15/99 $52.4 $116.0 2.3% 32.4% 44.1% 47.9% Pamida Holdings Corp. ShopKo Stores Inc. 5/11/99 $109.6 $344.3 39.4% 120.4% 153.4% 168.2% K&G Men's Center Inc. Men's Wearhouse Inc. 3/4/99 $115.5 $98.6 32.6% 38.4% 31.1% 28.2% Hills Stores Co. Ames Department Stores Inc. 11/12/98 $16.9 $396.3 14.3% (6.6%) (20.7%) (45.9%) Min 2.3% (6.6%) (20.7%) (45.9%) Median 32.6% 38.4% 44.1% 47.9% Mean 31.6% 48.9% 53.2% 51.2% Max 69.7% 120.4% 153.4% 168.2% Buckeye @ Merger Price - $6.00 per share(3) $79.2 $185.2 94.8% 120.3% 134.2% 140.3% Based on the Selected Precedents where the target was publicly traded prior to the transaction. Premiums are calculated to the target's average closing stock price for the specified period from the day before announcement. Buckeye's premiums are calculated as of the date of the Unaffected Price. (in millions, unless otherwise noted) Selected Precedents(1)

EX-99.B.1

                                                                  Exhibit (b)(1)


                      MARATHON FUND LIMITED PARTNERSHIP IV
                       C/O GOLDNER HAWN JOHNSON & MORRISON
                             5250 WELLS FARGO CENTER
                             90 SOUTH SEVENTH STREET
                              MINNEAPOLIS, MN 55402

                                  June 25, 2003

Michael Sweeney
President
Wright Holdings, Inc.
c/o Goldner Hawn Johnson & Morrison
5250 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN  55402

Re:  Wright Holdings, Inc. ("Wright Holdings")

Dear Mike:


      We are pleased to confirm that Marathon Fund Limited Partnership IV, an
investment affiliate of Goldner Hawn Johnson & Morrison Incorporated with $200
million under management ("Marathon"), commits to provide up to $27,000,000 of
its $40 million of presently uncommitted funds in the form of junior capital
(i.e., a combination of subordinated debt and equity) to Wright Holdings. The
proceeds of such financing would be used by Marathon to fund its investment in
Wright Holdings which would acquire by merger (the "Acquisition") The
Elder-Beerman Stores Corporation ("Elder-Beerman Co.") pursuant to the Agreement
and Plan of Merger, dated June 25, 2003.

      The closing of the financing contemplated hereby would be subject to a
number of conditions, including but not limited to the following:

1.   Closing of the Acquisition substantially in accordance with the terms of
     the Merger Agreement.

2.   Availability of senior debt financing on terms and conditions satisfactory
     to Marathon. Please note that the terms and conditions of such financing as
     outlined in the commitment letter to you from Fleet Retail Finance Inc. and
     Back Bay Capital Funding LLC, dated June 24, 2003, are satisfactory to
     Marathon.

3.   Absence of any material adverse change in Elder-Beerman Co.'s business or
     financial condition and any material litigation related to Elder-Beerman
     Co., the proposed financing or the Acquisition.

      You further agree to keep this letter and its contents confidential and,
without the prior written consent of Marathon, you agree not to disclose to any
person the terms, conditions or other contents of this letter or subsequent
negotiations between the parties hereto other than to Elder-Beerman Co. and your
and their respective employees, officers, directors, accountants,

attorneys and other advisors, in each case in connection with the transactions
contemplated hereby and subject to agreement to the confidentiality provisions
hereof. We hereby consent to the use of our name in a press release to be issued
by Elder-Beerman Co. upon the announcement of the Acquisition, and to a
description of this commitment letter in a proxy statement to be filed by
Elder-Beerman Co. with the Securities and Exchange Commission in connection with
the Acquisition, in each case, provided that we and our counsel are satisfied
with the language in such documents with respect to the use of our name and
description of this letter.

      If the foregoing is acceptable to you, kindly sign this letter where
indicated below and return it to us.

      We look forward to working with you towards a successful completion of the
Acquisition.



                                       Sincerely,



                                       MARATHON FUND LIMITED
                                       PARTNERSHIP IV



                                       By:  MILTIADES LLC,
                                            its General Partner



                                       By: /s/ Van Zandt Hawn
                                          _____________________________
                                       Title:  Authorized Member


Accepted and Agreed this 25th day of June, 2003:

WRIGHT HOLDINGS, INC.


By: /s/ Michael T. Sweeney
   __________________________
Title:  President


                                       2

EX-99.B.2

                                                                  Exhibit (b)(2)


                                                                 June 25, 2003


Goldner Hawn Johnson & Morrison
5250 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4123

Attention:  Mr. Michael Sweeney
            Managing Director

Re:               Senior Secured Revolving Credit Facility
                  Senior Secured Term Loan

Dear Mr. Sweeney:

      We are pleased to advise you of the several commitments of Fleet Retail
Finance Inc. ("FRFI") and Back Bay Capital Funding LLC ("BACK BAY"), subject to
the terms and conditions hereof, respectively to provide a senior secured
revolving credit facility in the amount of $250,000,000 (the "REVOLVING CREDIT
FACILITY") and a senior secured term loan in the amount of $25,000,000 (the
"TERM LOAN") to an entity to be formed (together with its subsidiaries, the
"BORROWER") by Goldner Hawn Johnson & Morrison (the "SPONSOR") to acquire The
Elder-Beerman Stores Corp. and its subsidiaries (the "ACQUISITION"), as
contemplated in the Summaries of Terms and Conditions (the "TERM SHEETS")
annexed to this letter as EXHIBIT A (with respect to the Revolving Credit
Facility) and EXHIBIT B (with respect to the Term Loan). The commitment of FRFI
hereunder shall be limited to the Revolving Credit Facility and the commitment
of Back Bay hereunder shall be limited to the Term Loan.

      1. THE AGENTS

      Fleet Retail Finance Inc. will act as Administrative Agent and Collateral
Agent (and is referred to herein in such capacities as the "Agent") for itself
and other lenders (the "REVOLVING CREDIT LENDERS") which fund the Revolving
Credit Facility and for Back Bay as lender for the Term Loan. (The Revolving
Credit Lenders and Back Bay are referred to herein collectively as the
"LENDERS").

      2. SYNDICATION

            (a) FRFI's affiliate, Fleet Securities Inc. ("FSI") will act as the
      exclusive syndication manager for the Revolving Credit Facility and in
      such capacity will perform the duties and exercise the authority
      customarily associated with such role. No additional agents, arrangers or
      syndication managers will be appointed with respect to the arrangement and
      syndication of the Revolving Credit Facility.

            (b) FSI in its sole discretion, but in consultation with you, will
      manage all aspects of the syndication of the Revolving Credit Facility,
      including the following:

Golder Hawn Johnson & Morrison
June 25, 2003
Page 2


               (i) Selection of those financial institutions which will become
          members of the syndicate.

               (ii) The timing of approaches to potential members of the
          syndicate.

               (iii) The titles and roles in the syndicate given various
          Lenders.

               (iv) The allocation of the commitments among the Lenders.

      FSI shall, in all events have final say concerning all aspects of the
syndication.

          (c) FSI may syndicate all or any portion of FRFI's commitments
     hereunder to one or more financial institutions. FRFI shall be released
     from a portion of its commitment hereunder in an aggregate amount equal to
     the commitment of those Lenders which commit and subscribe to the syndicate
     assembled by FSI. FRFI and Back Bay acknowledge, however, that their
     commitments are not conditioned on a successful syndication of the
     Revolving Credit Facility.

          (d) You will assist FSI in achieving a successful syndication, such
     assistance to include, among other things, the following:

               (i) Direct contact during the syndication between your senior
          officers, representatives, and advisors, on the one hand, and
          prospective Lenders, on the other hand, at such times and places as
          FSI may reasonably request.

               (ii) The providing to FSI and the Agent of all such financial and
          other information in your possession with respect to the Borrower and
          the transactions contemplated by this Letter, including but not
          limited to financial projections and forecasts relating to the
          foregoing, which FSI and/or the Agent reasonably may request from time
          to time.

               (iii) Assistance in the preparation of a confidential information
          memorandum and other marketing materials to be used in connection with
          the syndication.

          (e) You acknowledge that FRFI, Back Bay, and FSI, in consultation with
     you, may change the pricing, structure, and any other terms of the
     Revolving Credit Facility and the Term Loan if FRFI, Back Bay, and FSI
     reasonably determine that such changes are advisable in order to achieve a
     successful syndication, provided that (i) the Applicable Margin in any
     Level for any type of Loan under the Revolver shall not be increased by
     more than 0.50%, (ii) the Commitment Fee for the Revolver shall not be
     increased by more than 0.125%, and (iii) the required minimum excess
     availability for any period shall not be increased by more than $5,000,000.
     The provisions of this paragraph shall survive the closing of the Revolving
     Credit Facility and the Term Loan in the event that a successful
     syndication has not been consummated as of the closing date.


                                     ..2..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 3


     3. CONDITIONS TO COMMITMENT. The commitment of FRFI, Back Bay, the Agent
and FSI, as expressed in this letter, is subject to the following:

               (i) Timely acceptance of this letter and the enclosed Fee Letter
          and Back Bay Fee Letter by you as provided herein.

               (ii) The satisfaction of all conditions precedent referenced
          herein, in the Term Sheets, or in any of the loan documents.

               (iii) Execution and delivery of definitive and mutually
          satisfactory loan documents.

               (iv) Recordation of such instruments and documents as the
          Collateral Agent reasonably determines to be appropriate under the
          circumstances to perfect and protect the collateral interests to be
          granted by the Borrower under the transactions contemplated herein.

               (v) The contemporaneous closing of the Revolving Credit Facility
          and the Term Loan.

     4.   INDEMNIFICATION

          (a) Whether or not the credit facilities contemplated hereby are
     established, the Sponsor and the Borrower shall each indemnify and hold
     harmless FRFI, Back Bay, FSI, the Agent, the Lenders their respective
     participants (if any) and their respective directors, officers, employees,
     affiliates, agents, attorneys, accountants, consultants and each other
     entity, if any, who controls any of the foregoing, and shall indemnify and
     hold such persons and entities (each, an "INDEMNIFIED PERSON") harmless
     from and against all losses, claims, damages, liabilities and expenses,
     joint or several, to which any such person or entity may become subject
     arising out of or in connection with the Acquisition, this Letter, the Term
     Sheets, the credit facilities, the use of proceeds of the extensions of
     credit thereunder or any related transaction or any claim, litigation,
     investigation or proceeding relating to any of the foregoing, regardless of
     whether any of such Indemnified Persons is a party thereto, and to
     reimburse each Indemnified Person upon demand for any reasonable legal or
     other expenses incurred in connection with investigating or defending any
     of the foregoing; provided, however, the foregoing indemnification shall
     not be available, as to any Indemnified Person, on account of or in respect
     to any claim as to which there is a final determination made in a judicial
     proceeding (in which the Agent and such Indemnified Party have had an
     opportunity to be heard), which determination includes a specific finding
     that the person seeking indemnification pursuant hereto (directly or by
     virtue of acts or omissions of its agents, officers, directors, employees
     or other representatives) had acted in a grossly negligent manner or in
     actual bad faith or with willful misconduct. The Agent and the Indemnified
     Party shall be entitled to select their own counsel in connection with the
     defense of any such claims, and the Sponsor and the Borrower shall promptly
     pay the reasonable fees and expenses thereof.


                                     ..3..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 4


          (b) If for any reason the foregoing indemnification is unavailable to
     any Indemnified Person or insufficient to hold it harmless, then the
     Sponsor and the Borrower shall each contribute to the amount paid or
     payable by such Indemnified Person as a result of such loss, claim, damage
     or liability to the maximum amount legally permissible. The Sponsor and the
     Borrower each also agree that neither any Indemnified Person, nor any of
     their respective affiliates, partners, directors, agents, employees or
     controlling persons, shall have any liability to the Sponsor, the Borrower,
     any person asserting claims on behalf or in right of the Sponsor or the
     Borrower, or any other person in connection with or as a result of either
     this syndication or any matter referred to herein or in the loan
     documentation except to the extent that there is a final determination made
     in a judicial proceeding (in which the Agent and Back Bay each has had an
     opportunity to be heard), which determination includes a specific finding
     that the losses, claims, damages, liabilities or expenses so incurred by
     the Sponsor or the Borrower resulted from the gross negligence or actual
     bad faith or willful misconduct of such Indemnified Person (directly or by
     virtue of acts or omissions of its agents, officers, directors, employees
     or other representatives).

          (c) No Indemnified Person shall be liable for any indirect, special,
     punitive, or consequential damages in connection with or arising out of
     this letter or the transactions contemplated hereby. The indemnification
     provided herein shall survive any closing on, or retirement of, any credit
     facility between the Borrower, on the one hand, and the Agent, and/or any
     Revolving Credit Lenders, and/or Back Bay, on the other.

     5. REIMBURSEMENT

     The Sponsor and the Borrower shall reimburse FRFI, Back Bay, the Agent and
FSI from time to time on demand for reasonable out-of-pocket expenses
(including, but not limited to, reasonable expenses of due diligence
investigation, reasonable syndication expenses, reasonable travel expenses and
reasonable fees, disbursements and charges of its counsel), in each instance
incurred in connection with the preparation and negotiation of this Letter and
the Term Sheets, the definitive documentation for the Revolving Credit Facility
and the Term Loan, and the closing of the transactions contemplated hereby. You
shall pay to the Agent for its account and the accounts of FRFI and FSI the sum
of $50,000 and to Back Bay for its own account the sum of $50,000 (collectively,
the "WORK FEE") to reimburse the reasonable expenses incurred by FRFI, Back Bay,
the Agent and FSI. FRFl and FSI acknowledge receipt of their portion of the Work
Fee and Back Bay acknowledges receipt of $20,000 of its Work Fee. Whether or not
the Revolving Credit Facility and the Term Loan are so established, the Work Fee
shall be accounted for by the Agent and Back Bay provided, however, the Sponsor
and the Borrower shall each remain obligated to reimburse FRFI, Back Bay, the
Agent and FSI for any fees and expenses reasonably incurred in connection with
the transaction contemplated by this Letter (including, without limitation,
reasonable legal, appraisal, and commercial finance examination fees) and not
covered by the Work Fee. Each reimbursement and indemnification obligation of
you and the Borrower hereunder is the joint and several obligation of you and of
the Borrower and shall survive any such closing on any credit facility between
the Borrower, on the one hand, and the Agent, and/or any Revolving Credit
Lenders, and/or Back Bay, on the other.


                                     ..4..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 5


     6. CLOSING

          (a) This letter may be accepted by you on or before 5:00 p.m. (EDT) on
     June 25, 2003 by signing below and returning the executed letter to FRFI,
     together with the balance of the Work Fee due to Back Bay and the executed
     Fee Letter enclosed herewith.

          (b) If this letter is so accepted, then, subject to the terms and
     conditions of this letter, FRFI would be obligated to establish the
     Revolving Credit Facility and Back Bay would be obligated to provide the
     Term Loan if all conditions precedent thereto are satisfied (as reasonably
     determined by FRFI and Back Bay and the Administrative Agent) on or before
     October 31, 2003. The closing, in such event, would take place at the
     offices of counsel to FRFI.

     7. NONTRANSFERABILITY OF COMMITMENT

      The identity of the Sponsor and the Borrower is of material importance to
FRFI and the Agent, Back Bay, and FSI. Consequently, this commitment may not be
assigned or transferred by the Sponsor or the Borrower. FRFI, Back Bay and the
Agent may assign its respective obligation (a) under this commitment to any
present or future affiliate of FRFI, Back Bay or the Agent, or (b) after closing
of the facilities, as provided in the loan documentation.

     8. EXCLUSIVE DEALING

          (a) The Sponsor and the Borrower each covenant that, from and after
     the date of this letter, and until the consummation of the transactions
     contemplated herein or the expiry of the commitment provided for herein,
     the Sponsor and the Borrower (and any of their respective officers,
     directors, employees, agents and representatives) shall:

               (i) not directly or indirectly solicit, initiate, encourage,
          facilitate, or discuss any submission, proposal, or offer from, or any
          effort or attempt by, any other person, entity, or group relating to
          the financing of the Acquisition or of the Borrower.

               (ii) provide FRFI with immediate written notice (with reasonable
          detail of the facts and circumstances relating thereto) of any
          submission, proposal, or offer, of any request for information,
          related directly or indirectly to any such financing of the
          Acquisition or the Borrower.

     The Sponsor represents that neither it nor any of its affiliates is party
     to, or bound by, any agreement with respect to any such financing other
     than as contemplated by this letter, the Term Sheet and any related fee
     letters.

          (b) Except as, and only to the extent required under, applicable laws,
     the Sponsor and the Borrower shall maintain as confidential the terms of
     conditions of this Commitment and the terms, conditions, provisions, and
     documentation of the Revolving Credit Facility and Term Loan provided,
     however, that any such information may be


                                     ..5..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 6


     disclosed (i) to the Sponsor's counsel, consultants, and other professional
     advisors in connection with the transactions contemplated hereby, (ii) the
     seller of The Elder-Beerman Stores Corp., (iii) as required by any
     governmental authority, or (iv) in connection with the enforcement of the
     obligations of the Agent, FRFI, Back Bay and FSI hereunder. In addition,
     reference may be made to the fact that financing is being provided in
     connection with the Acquisition by FRFI and Back Bay in any press release
     that the Sponsor and/or the seller of The Elder-Beerman Stores Corp. may
     issue as long as the specific terms of the financing are not disclosed. The
     failure of the Sponsor and the Borrower to comply with the foregoing
     provisions shall, at the option of the Agent and Back Bay only, terminate
     any and all obligations of the Agent, FRFI, Back Bay and FSI with respect
     to the financing contemplated hereby.

          (c) The Agent, FRFI, Back Bay and FSI shall maintain as confidential
     all nonpublic information finished to them by the Sponsor, the Borrower or
     their representatives and agents except for purposes of the transactions
     contemplated by this Commitment; provided, however, that any such
     information may be disclosed (i) to their respective examiners, outside
     auditors, counsel, consultants, appraisers and other professional advisors
     in connection with the transactions contemplated hereby, (ii) as required
     by any governmental authority, (iii) to any fund partner of Back Bay or to
     any proposed syndicate member or any proposed assignee or participant, or
     (iv) in connection with the enforcement of the Sponsor's and Borrower's
     obligations. Notwithstanding the foregoing, the provisions of this
     paragraph shall not apply to such portions of the information that (i) is
     or becomes available to the public through no fault or action of the Agent,
     FRFI, Back Bay or FSI or their representatives, or (ii) become available to
     the Agent, FRFI, Back Bay or FSI or their representatives on a
     non-confidential basis from a source, other than the Borrower or their
     representatives.

     9. GOVERNING LAW; CONSENT TO JURISDICTION

          (a) This Commitment Letter, the Fee Letter and the Back Bay Fee Letter
     shall be governed by and construed in accordance with the laws of the
     Commonwealth of Massachusetts. The Sponsor and the Borrower each agree that
     any legal action, proceeding, case, or controversy against the Sponsor or
     the Borrower with respect to this letter or the Revolving Credit Facility
     or the Term Loan may be brought in the Superior Court of Suffolk County
     Massachusetts or in the United States District Court, District of
     Massachusetts, sitting in Boston, Massachusetts, as FRFI may elect in its
     sole discretion. By acceptance of this letter, the Sponsor and the Borrower
     for itself and in respect of its property, accepts, submits, and consents
     generally and unconditionally, to the jurisdiction of the aforesaid courts.

          (b) The Sponsor and the Borrower each WAIVES any objection based on
     forum non conveniens and any objection to venue of any action or proceeding
     instituted under or with respect to this letter or the Revolving Credit
     Facility or the Term Loan and consents to the granting of such legal or
     equitable remedy as is deemed appropriate by the relevant Court.


                                     ..6..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 7


          (c) The Sponsor and the Borrower each agree that any action commenced
     by the Sponsor and the Borrower asserting any claim or counterclaim arising
     under or in connection with this letter or the Revolving Credit Facility or
     the Term Loan shall be brought solely in the Superior Court of Suffolk
     County Massachusetts or in the United States District Court, District of
     Massachusetts, sitting in Boston, Massachusetts, and that such Courts shall
     have exclusive jurisdiction with respect to any such action.

     10. WAIVER OF JURY TRIAL

      The Sponsor, the Borrower, FRFI and Back Bay makes each of the following
waivers knowingly, voluntarily, and intentionally, and understands that FRFI,
Back Bay and FSI, in providing this letter is relying on such waivers.

      THE SPONSOR, THE BORROWER, FRFI, BACK BAY AND AND FSI WAIVES THE
FOLLOWING:

      THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE
      SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI IS OR BECOMES A
      PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE
      SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI OR IN WHICH THE
      SPONSOR, THE BORROWER, FRFI, BACK BAY, THE AGENT OR FSI IS JOINED AS A
      PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT
      OF, ANY RELATIONSHIP AMONGST OR BETWEEN THE SPONSOR, THE BORROWER, FRFI,
      BACK BAY, THE AGENT OR FSI.


                                     ..7..

Golder Hawn Johnson & Morrison
June 25, 2003
Page 8


      If the foregoing is in accordance with your understanding of our
agreement, please sign this letter in the space indicated below and return it to
FRFI.



                                                             Very truly yours,
                                                     FLEET RETAIL FINANCE INC.


                                       By    /S/ Mark J. Forti
                                          ------------------------------------
                                          Title: Director

                                                  BACK BAY CAPITAL FUNDING LLC


                                       By   /s/ Kristan M. O'Connor
                                          ------------------------------------
                                          Title: Director

                                                         FLEET SECURITIES INC.


                                       By   /s/ Dave Demenna
                                          ------------------------------------
                                          Title: Managing Director

The foregoing is agreed to:
GOLDNER HAWN JOHNSON & MORRISON
as Sponsor and on behalf of the Borrower


By    /s/ Michael T. Sweeney
   ---------------------------------
      Title:
      Dated:


                                     ..8..

                            (FLEET RETAIL GROUP LOGO)


                             PROJECT WRIGHT (NEWCO)
                         SUMMARY OF TERMS AND CONDITIONS
                  $250,000,000 SENIOR REVOLVING CREDIT FACILITY

                                  JUNE 25, 2003

- --------------------------------------------------------------------------------
BORROWER:                      A newly formed company ("Newco") to be formed by
                               Goldner Hawn Johnson & Morrison (the "Sponsor")
                               to acquire The Elder-Beerman Stores Corp. (the
                               "Target") and the subsidiaries of such newly
                               formed company (which subsidiaries shall in all
                               events include the Target) (the "Company" or the
                               "Borrower").

ADMINISTRATIVE AGENT:          Fleet Retail Finance Inc. ("Fleet" or the
                               "Agent").



COLLATERAL AGENT:              Fleet Retail Finance Inc. ("FRF" or the
                               "Collateral Agent").



ARRANGER:                      Fleet Securities, Inc. ("FSI" or the "Arranger").

FACILITY:                      Fleet will provide the Borrower with a fully
                               underwritten commitment (the "Underwriting") for
                               a $250,000,000 (the "Loan Cap") Senior Secured
                               Revolving Credit Facility (the "Facility" or the
                               "Revolver").

                               The Revolver shall have a sub-limit of
                               $30,000,000 for the issuance of standby and
                               documentary letters of credit.

LENDERS:                       Fleet and FSI expressly reserve the right to
                               syndicate a portion of the Facility to other
                               financial institutions reasonably acceptable to
                               the Borrower.

USE OF PROCEEDS:               To finance the acquisition by Newco of the Target
                               and to finance other general corporate purposes
                               of the Borrower, including capital expenditures
                               and the issuance of standby and documentary
                               letters of credit.

CLOSING DATE:                  A mutually agreed upon date to be determined but
                               in any event on or before October 31, 2003.

MATURITY:                      Three years from the Closing Date.

PRIORITY AND SECURITY:         The Facility will be secured by a first priority
                               perfected security interest in substantially all
                               of the Borrower's assets, excluding (x) real
                               estate in which FRF would hold a 2nd mortgage
                               position behind Back Bay Capital Funding LLC, (y)
                               leasehold interests and non material assets as
                               reasonably determined by the Collateral Agent,
                               and (c) any capital leases or other financings of
                               equipment, the terms of which prohibit junior
                               encumbrances on such equipment, only as long as
                               such capital leases and financings remain
                               outstanding (it being understood that upon
                               payment thereof, the Collateral Agent shall have
                               a lien on such equipment and the proceeds
                               thereof).

BORROWING BASE:                The Borrowing Base will be established as a
                               percentage of the Borrower's eligible inventory,
                               letter of credit inventory, in-transit inventory
                               and accounts receivable, minus applicable
                               reserves, as follows:

                               Inventory: The inventory advance rates will be
                               determined following the completion of an
                               inventory appraisal. The advance rate shall be
                               the lesser of (i) 85% of the net appraised
                               liquidation value of inventory at cost, or (ii) a
                               percentage to be determined of the cost of
                               eligible inventory. It is anticipated that the
                               adjusted advance rate will approximate 65-70%.
                               Eligible letter of credit inventory and
                               in-transit inventory will be included as eligible
                               provided that such inventory is within 90 days of
                               receipt and such inventory can be monitored and
                               tracked by procedures reasonably satisfactory to
                               the Agent.

                               Accounts Receivable: The advance rate against
                               eligible private label credit card accounts
                               receivable will be 90% of the appraised
                               liquidation value.

                               The borrowing base (the "Borrowing Base"), actual
                               reserves and final advance rates will be
                               determined by the Agent in consultation with the
                               Borrower based upon the results of due diligence,
                               which will include, but not be limited to,
                               inventory and accounts receivable appraisals, as
                               well as a commercial finance field examination.
                               Borrowing Base collateral reporting will be
                               provided to the Agent on a weekly basis.

BORROWING OPTIONS:             Borrowings under the Revolver shall be at the
                               Fleet Base Rate plus the Applicable Margin ("Base
                               Rate Loan") or the LIBOR Rate plus the Applicable
                               Margin ("LIBOR Rate Loan"). LIBOR Rates will be
                               quoted for one, two, three and six months. Base
                               Rate Loans shall require same business day
                               notice. LIBOR Rate Loans shall require three
                               business days' advance notice.

                               Interest on Base Rate loans will be due and
                               payable monthly in arrears. Interest on LIBOR
                               Rate Loans will be payable at the end of each
                               applicable interest period or quarterly in
                               arrears, whichever is earlier.


                                      -2-

                               All interest shall be based on a 360-day year and
                               actual days elapsed for LIBOR Rate Loans and on
                               365/366 days and actual days elapsed for Base
                               Rate Loans and for any fees payable hereunder.

APPLICABLE MARGIN:             From the Closing Date until the Agent is in
                               receipt of the audited financial statements for
                               the FYE 1/31/04, the minimum Applicable
                               LIBOR/Base Rate Margin will be set at Level IV.
                               Thereafter, the Applicable Margin will be based
                               upon the pricing grid below, based upon average
                               excess availability for the prior quarter.



                                                                         LIBOR         Base Rate
                                                                       Applicable     Applicable
                                 Level      Excess Availability          Margin         Margin
                                 -----      -------------------          ------         ------
                                                                             
                                   I              > $85MM                1.75%           0.25%
                                  II        > $60MM and < $85MM          2.00%           0.50%
                                  III        >$40MM and < $60MM          2.25%           0.75%
                                  IV              < $40MM                2.50%           1.00%


L/C ISSUING BANK:              Fleet National Bank

LETTER                         OF CREDIT FEE: Standby Letters of Credit are
                               priced at a fee per annum equal to the LIBOR
                               Applicable Margin, payable on the total face
                               amount of each outstanding Standby Letter of
                               Credit quarterly in arrears. Documentary Letters
                               of Credit are priced at the LIBOR Applicable
                               Margin less 0.50%, payable on the total face
                               amount of each outstanding Documentary Letter of
                               Credit quarterly in arrears.

CASH MANAGEMENT:               The Collateral Agent shall remain throughout the
                               term of the Facility the concentration bank for
                               the Borrower's cash management. All collections
                               and proceeds from first priority Collateral will
                               be deposited either directly into an account with
                               the Collateral Agent or into an account at an
                               institution for which the Collateral Agent has in
                               place an agency agreement reasonably satisfactory
                               to it in its sole discretion. All proceeds will
                               be used to reduce borrowings under the Revolver
                               on a daily basis, on the business day immediately
                               following receipt by the Collateral Agent.

COMMITMENT FEE:                Payable at the times and in the amounts set forth
                               in a Fee Letter of even date.


                                      -3-

UNUSED LINE FEE:               A fee on the unused portion of the Facility
                               payable monthly in arrears at a rate of 0.375%.


AGENT'S FEE:                   Payable at the times and in the amounts set
                               forth in a Fee Letter of even date.


DOCUMENTATION:                 The Facility will be subject to the negotiation,
                               execution and delivery of a definitive credit
                               agreement and any other customary documents as
                               shall be requested by the Agent. The credit
                               agreement will contain representations and
                               warranties, funding and yield protection
                               provisions, conditions precedent, covenants,
                               events of default and other provisions
                               appropriate for transactions of this size, type
                               and purpose and shall be acceptable to the Agent
                               and the Borrower and their respective counsel in
                               all reasonable respects.


DEFAULT PRICING:               2.00% above the then Applicable Margin.


FINANCIAL COVENANTS:           An all times minimum excess availability equal
                               to (i) $10,000,000 through January 31, 2004,
                               thereafter, (ii) prior to the sale of the
                               accounts receivable portfolio $20,000,000, and
                               (iii) after the sale of the accounts receivable
                               portfolio, $10,000,000.

OTHER COVENANTS:               Other affirmative and negative covenants
                               (subject, in each case, to exceptions and
                               baskets to be agreed) to include without
                               limitation,:

                               (a)      Usual and customary financial reporting
                                        requirements, including monthly stock
                                        ledger by department and certain asset
                                        based reporting requirements;

                               (b)      Maintenance of properties, insurance,
                                        and interest rate protection for fifty
                                        percent of the Facility for the first
                                        two years of the Facility; payment of
                                        taxes, compliance with laws, contracts,
                                        and permits; ERISA covenants;

                               (c)      Limitations on capital expenditures,
                                        indebtedness, guarantees, liens,
                                        investments, loans, mergers and
                                        permitted acquisitions, asset
                                        divestitures, dividends and
                                        distributions and transactions with
                                        affiliates. Note that (i) dividends
                                        shall be permitted as long as no default
                                        or event of default then exists or would
                                        arise therefrom, provided that (A)
                                        except as provided in clause (c)(i)(B)
                                        hereof, such dividends may be paid on
                                        one occasion each year between May 1 and
                                        June 15, (B) in addition to dividends
                                        permitted under clause (c)(i)(A) hereof,
                                        dividends may be paid within 45 days
                                        after the sale of the entire accounts
                                        receivable portfolio on a non-recourse
                                        basis, and (C) before and after giving
                                        effect to the payment of such dividends
                                        on a pro-forma 12 month basis, excess
                                        availability (net of the minimum excess
                                        availability required to be maintained
                                        under


                                      -4-

                                        the "Financial Covenants" section of
                                        this Term Sheet) under the Borrowing
                                        Base shall be equal to or greater than
                                        10% of the total Borrowing Base; and
                                        (ii) acquisitions shall be permitted as
                                        long as (A) no default or event of
                                        default then exists or would arise
                                        therefrom and (B) before and after
                                        giving effect to the acquisition on a
                                        pro-forma 12 month basis, excess
                                        availability (net of the minimum excess
                                        availability required to be maintained
                                        under the "Financial Covenants" section
                                        of this Term Sheet) under the Borrowing
                                        Base shall be equal to or greater than
                                        10% of the total Borrowing Base.

                               (d)      Collateral Agent will have the right to
                                        conduct periodic commercial finance
                                        exams and appraisals upon reasonable
                                        advance notice.

                               (e)      Definition of Change in Control to be
                                        negotiated by the Agent and the
                                        Borrower, but in all events shall be
                                        subject to modification and waiver with
                                        the consent of the Borrower and majority
                                        lenders.

EVENTS OF DEFAULT:             Usual and customary for facilities of this type,
                               including but not limited to, failure to pay any
                               interest or principal when due, failure to
                               comply with covenants, representations or
                               warranties materially incorrect when made,
                               insolvency, bankruptcy, cross defaults, change
                               of control, judgment defaults and ERISA, with
                               appropriate grace periods and baskets to be
                               negotiated

CONDITIONS PRECEDENT:          Closing shall be conditioned upon satisfaction
                               of the following conditions precedent and other
                               conditions customary to transactions of this
                               type, or reasonably required by the Agent.

                               (a)      All necessary consents and approvals to
                                        the financing shall have been obtained

                               (b)      Satisfactory completion of due
                                        diligence, including a commercial
                                        finance examination, inventory appraisal
                                        (determined on the net liquidation
                                        value), accounts receivable appraisal
                                        (determined on the net liquidation
                                        value), appraisals of real estate
                                        (determined on the forced liquidation
                                        value) and environmental site
                                        assessments. Appraisals and other due
                                        diligence efforts will be undertaken by
                                        independent third parties reasonably
                                        acceptable to the Agent.

                               (c)      Capital structure reasonably acceptable
                                        to the Agent, in its sole discretion,
                                        which shall include a minimum
                                        equity/junior capital injection of not
                                        less than $25,000,000 at close.


                                      -5-

                               (d)      Minimum excess availability as of the
                                        Closing Date in an amount equal to
                                        $25,000,000 (after giving effect to the
                                        loans to be made and letters of credit
                                        to be issued on the Closing Date, but
                                        without giving effect to the minimum
                                        excess availability required under the
                                        "Financial Covenants" section of this
                                        Term Sheet). All accounts payable and
                                        taxes shall be paid current; excluding
                                        good faith disputes.

                               (e)      Legal opinions of counsel to the
                                        Borrower reasonably satisfactory in form
                                        and substance to the Administrative
                                        Agent, including, without limitation,
                                        with respect to the enforceability and
                                        perfection of the Collateral Agent's
                                        security interests.

                               (f)      The Agent shall have entered into an
                                        intercreditor and subordination
                                        agreement with the holders of the
                                        Borrower's mezzanine indebtedness
                                        reasonably satisfactory in form and
                                        substance to the Agent. The
                                        intercreditor agreement shall permit the
                                        holder of such mezzanine indebtedness
                                        (i) to receive payments of interest, and
                                        (ii) to receive payments of principal
                                        solely from the proceeds of the sale of
                                        the accounts receivable portfolio, in
                                        each case as long as no default or event
                                        of default then exists or would arise
                                        therefrom

                               (g)      Any other information (financial or
                                        otherwise) reasonably requested by the
                                        Agent shall have been received by the
                                        Agent and shall be in form and substance
                                        reasonably satisfactory to the Agent
                                        Without limitation, the Agent shall have
                                        received and be satisfied with both (a)
                                        the PricewaterhouseCoopers quality of
                                        earnings report for the Target, and (b)
                                        subject to the last sentence of this
                                        sub-paragraph, the McKinsey Co. report
                                        concerning the Target's marketing
                                        strategy. The Agent's receipt of such
                                        reports is conditioned upon the Agent's
                                        execution of a release and
                                        confidentiality agreement with each of
                                        PricewaterhouseCoopers and McKinsey Co.
                                        in form satisfactory to the Agent and
                                        such entities. In the event that the
                                        Agent and McKinsey Co. do not agree on
                                        the form of a release and
                                        confidentiality agreement (the Borrower
                                        having used its best efforts to obtained
                                        same), the satisfaction of the Agent
                                        with the McKinsey report shall not be a
                                        condition to the consummation of the
                                        Facility.

                               (h)      The Collateral Agent shall have filed
                                        all such financing statements and shall
                                        have given all such notices as may be
                                        necessary for the Collateral Agent to
                                        perfect its security interest in the
                                        collateral for itself and for the
                                        benefit of the Lenders and the
                                        Administrative Agent and to assure its
                                        first priority status therein subject to
                                        permitted liens (as described


                                      -6-

                                        above in "Priority and Security"). The
                                        Collateral Agent shall have received a
                                        mortgagee's policy of title insurance
                                        containing such exceptions and
                                        endorsements, and issued by such
                                        companies, as may be reasonably
                                        acceptable to the Collateral Agent.

                               (i)      No material misstatements in or
                                        omissions from the materials previously
                                        furnished to the Agent in writing for
                                        its review. The Agent must be satisfied
                                        that any financial statements delivered
                                        to it fairly present the business and
                                        financial condition of the Borrower and
                                        its subsidiaries, and that there has
                                        been no material adverse change in the
                                        assets, business, financial condition,
                                        or income of any Borrower since the date
                                        of the most recent financial information
                                        delivered to the Agent.

                               (j)      The absence of any litigation or other
                                        proceeding the result of which could
                                        reasonably be expected to have a
                                        Material Adverse Effect. "Material
                                        Adverse Effect" means a material adverse
                                        effect on (a) the business, operations,
                                        property, assets, or condition,
                                        financial or otherwise, of any Borrower
                                        taken as a whole, (b) the ability of any
                                        Borrower to perform any material
                                        obligation or to pay any obligations
                                        under the Facility, or (c) the validity
                                        or enforceability of any of the
                                        definitive loan documents or any of the
                                        material rights or remedies of the
                                        Administrative Agent, the Collateral
                                        Agent or the Lenders thereunder.

                               (k)      The absence of any default of any
                                        material contract or agreement of any
                                        Borrower which could reasonably be
                                        expected to have a Material Adverse
                                        Effect.

                               (l)      There shall not have occurred any
                                        material disruption or material adverse
                                        change in the U.S. financial or capital
                                        markets in general that has had, in the
                                        reasonable opinion of the Agent, a
                                        material adverse effect on the market
                                        for loan syndications, or that has
                                        materially and adversely affected the
                                        syndication of the Facility.

                               (m)      The proposed financing is subject to the
                                        condition that no material changes in
                                        governmental regulations or policies
                                        affecting the Borrower, the Agent or
                                        Lenders involved in this transaction
                                        occur prior to Closing Date.

                               (n)      The Agent's reasonable satisfaction with
                                        the acquisition documents for the
                                        Target, and consummation of the
                                        acquisition (with all conditions
                                        precedent set forth in the acquisition
                                        documents having been satisfied or
                                        waived with the consent of


                                      -7-

                                        the Agent) on terms and structure
                                        reasonably acceptable to the Agent.

                               (o)      Preparation, execution and delivery of
                                        definitive documentation (the
                                        "Definitive Documentation") satisfactory
                                        to the Borrower, the Agent and Lenders
                                        (including a certified Borrowing Base
                                        certificate, reasonably appropriate
                                        security documentation, and
                                        intercreditor provisions with Back Bay
                                        Capital Funding LLC).

                               (r)      Receipt of solvency opinion prepared by
                                        such person as the Agent may engage and
                                        otherwise reasonably satisfactory in
                                        form and substance to the Agent. The
                                        solvency opinion may also be addressed
                                        to, and for the benefit of, the Target.

INDEMNIFICATION:               The Borrower agrees to indemnify and hold the
                               Agent and the Lenders and their respective
                               shareholders, directors, agents, officers,
                               subsidiaries and affiliates harmless from and
                               against any and all damages, losses, settlement
                               payments, obligations, liabilities, claims,
                               actions or causes of action, and reasonable
                               costs and expenses incurred, suffered, sustained
                               or required to be paid by an indemnified party
                               as more particularly set forth in the Commitment
                               Letter accompanying this Term Sheet.

ASSIGNMENTS AND
PARTICIPATIONS:                The Lenders will be permitted to grant
                               participations or assignments of their loans and
                               commitments. Any Lender will be permitted to
                               assign a portion of the Revolver to another
                               eligible lending institution (to be defined in
                               the definitive documentation) in minimum amounts
                               of $5,000,000, subject to customary provisions
                               of participation or assignment transactions.
                               Prior to the occurrence of a default and after
                               completion of the initial syndication, the
                               Borrower shall have the right to consent to any
                               such assignment, such consent not to be
                               unreasonably withheld or delayed. In no event
                               may the Lenders grant participations or make
                               assignments to a competitor of the Target.

VOTING RIGHTS:                 Lenders holding at least 51% of all of the
                               outstanding commitments under the Facility (the
                               "Majority Lenders") for all amendments and
                               waivers provided that the following, among
                               others, shall require 100% of the Lenders
                               affected thereby: (1) increase in commitments;
                               (2) decreases in interest rates or fees; (3)
                               change to final maturity; (4) release of
                               substantial portions of the collateral and (5)
                               changes in the percentage constituting Voting
                               Rights and (6) changes to the Borrowing Base.

GOVERNING LAW:                 The Commonwealth of Massachusetts.


                                      -8-

AGENT'S COUNSEL:               Riemer & Braunstein, LLP


                                      -9-

[BACK BAY CAPITAL LOGO]

PROJECT WRIGHT (NEWCO)

                         SUMMARY OF TERMS AND CONDITIONS
                          FOR TERM LOAN CREDIT FACILITY
                                  JUNE 25, 2003

BORROWER:               A newly formed company ("Newco") to be formed by Goldner
                        Hawn Johnson & Morrison (the "Sponsor") to acquire The
                        Elder-Beerman Stores Corp. (the "Target") and the
                        subsidiaries of such newly formed company (which
                        subsidiaries shall in all events include the Target)
                        (the "Company" or the "Borrower").

LENDER:                 Back Bay Capital Funding LLC


CREDIT FACILITY:        $25,000,000 term loan to be fully funded at closing, and
                        structured on a first in/last out basis in conjunction
                        with a $250,000,000 senior credit facility to be agented
                        by Fleet Retail Finance Inc. (the "Senior Credit
                        Facility"). Total facility size will be $275,000,000.

PURPOSE:                To finance the acquisition by Newco of the Target and to
                        finance other general corporate purposes of the
                        Borrower, including capital expenditures.

CLOSING DATE:           A mutually agreed upon date to be determined but in any
                        event on or before October 31, 2003.

MATURITY:               Three (3) years from the Closing Date.


SECURITY:               The Credit Facility will be secured by a first priority
                        mortgage lien on all real estate and a 2nd priority
                        security position on all of the Borrower's other assets
                        and capital stock, excluding (x) leasehold interests,
                        (y) non-material assets as reasonably determined by the
                        Lender, and (z) any capital leases or other financings
                        of equipment, the terms of which prohibit junior
                        encumbrances on such equipment, only as long as such
                        capital leases and financings remain unpaid (it being
                        understood that upon payment thereof, the Lender shall
                        have a lien on such equipment and the




                        proceeds thereof), subject only to a 1st security
                        position in favor of the Senior Credit Facility.

BORROWING BASE:         At no time shall outstanding amounts under the Senior
                        Credit Facility plus outstanding amounts under the
                        Credit Facility exceed the lesser of (i) a percentage to
                        be determined of the cost value of eligible inventory,
                        or (ii) 96% of the current appraised liquidation (GOB)
                        value of eligible inventory; plus, 92% of the appraised
                        liquidation value of eligible in-house credit card
                        receivables, plus 65% of the appraised Forced
                        Liquidation Value of owned real estate; minus,
                        applicable reserves.


COLLATERAL ELIGIBILITY: Eligibility of inventory and accounts receivable shall
                        be determined following the reported results of an
                        inventory appraisal, receivables appraisal, and
                        commercial finance examination. Eligibility
                        qualifications shall be consistent with those determined
                        by the Agent for the Senior Credit Facility, and upon
                        review of the results of due diligence.

                        Eligible real estate shall consist of real estate owned
                        by the Borrower in fee simple title on which the Lender
                        has a first priority lien, subject only to encumbrances
                        reasonably acceptable to the Lender and as to which the
                        environmental studies furnished the Lender reflect no
                        environmental violations.

                        The actual reserves and final advance rates will be
                        determined based upon the results of due diligence,
                        which will include appraisals of the value of
                        inventories, accounts receivable and real estate, a
                        commercial finance examination, and environmental
                        assessment reports (as relates to the condition of the
                        real estate).

COMMITMENT FEE:         Payable at the times and in the amounts set forth in a
                        Fee Letter of even date.

CURRENT PAY INTEREST:   From the closing through the first anniversary date of
                        closing, 12.00% per annum, payable monthly in arrears.
                        Thereafter, interest shall accrue at a rate equivalent
                        to Fleet Bank's prime lending rate plus 7.75% per annum
                        adjusted quarterly, payable monthly in arrears.

PIK (PAYMENT IN KIND)
   INTEREST:            2.50% per annum accruing, to be capitalized and added to
                        the principal balance of the Credit Facility the first
                        day of each calendar month, and payable upon maturity.

                                      -2-


MONITORING FEE:         Payable at the times and in the amounts set forth in a
                        Fee Letter of even date.

EARLY TERMINATION FEE:  Payable at the times and in the amounts set forth in a
                        Fee Letter of even date.

AMORTIZATION:           None required.  The Credit Facility may be repaid from
                        the proceeds of the sale of the accounts receivable
                        portfolio as long (x) as no default or event of default
                        then exists or would arise therefrom and (y) such
                        payment is accompanied by payment of all accrued and
                        unpaid interest and any applicable Early Termination
                        Fee.

FINANCIAL COVENANTS:    Financial covenants shall include, but not be limited
                        to:


                        An all times minimum excess availability equal to i)
                        $10,000,000 through January 31, 2004, thereafter ii)
                        prior to the sale of the accounts receivable portfolio
                        $20,000,000, and iii) after the sale of the accounts
                        receivable portfolio, $10,000,000.

OTHER COVENANTS:       Other affirmative and negative covenants (subject, in
                       each case, to exceptions and baskets to be agreed) to
                       include without limitation,:


                        a)    Usual and customary financial reporting
                              requirements, including monthly stock ledger by
                              department and certain asset based reporting
                              requirements;

                        b)    Maintenance of properties and insurance; payment
                              of taxes, compliance with laws, contracts, and
                              permits; ERISA covenants;

                        c)    Limitations on capital expenditures, indebtedness,
                              guarantees, liens, investments, loans, mergers and
                              permitted acquisitions, asset divestitures,
                              dividends and distributions and transactions with
                              affiliates. Note that (i) dividends shall be
                              permitted as long as no default or event of
                              default then exists or would arise therefrom,
                              provided that (A) except as provided in clause
                              (c)(i)(B) hereof, such dividends may be paid on
                              one occasion each year between May 1 and June 15,
                              (B) in addition to dividends permitted under
                              clause (c)(i)(A) hereof, dividends may be paid
                              within 45 days after the sale of the entire
                              accounts receivable portfolio on a non-recourse
                              basis, and (C) before and after giving effect to
                              the payment of such dividends on a pro-


                                      -3-


                              forma 12 month basis, excess availability (net of
                              the minimum excess availability required to be
                              maintained under the "Financial Covenants" section
                              of this Term Sheet) under the Borrowing Base shall
                              be equal to or greater than 10% of the total
                              Borrowing Base; and (ii) acquisitions shall be
                              permitted as long as (A) no default or event of
                              default then exists or would arise therefrom and
                              (B) before and after giving effect to the
                              acquisition on a pro-forma 12 month basis, excess
                              availability (net of the minimum excess
                              availability required to be maintained under the
                              "Financial Covenants" section of this Term Sheet)
                              under the Borrowing Base shall be equal to or
                              greater than 10% of the total Borrowing Base.

                        d)    Lender will have the right to conduct periodic
                              commercial finance exams and appraisals upon
                              reasonable advance notice.

                        e)    Definition of Change in Control to be negotiated
                              by the Lender and the Borrower.

CONDITIONS PRECEDENT:   Closing shall be conditioned upon satisfaction of the
                        following conditions precedent and other conditions
                        customary to transactions of this type, or reasonably
                        required by the Lender.


                        1.    Capital structure reasonably acceptable to the
                              Lender, in its sole discretion, which shall
                              include a minimum equity/junior capital injection
                              of not less than $25,000,000 at close.

                        2.    Minimum excess availability as of the Closing Date
                              in an amount equal to $25,000,000 (after giving
                              effect to the loans to be made and letters of
                              credit to be issued on the Closing Date, but
                              without giving effect to the minimum excess
                              availability required under the "Financial
                              Covenants" section of this Term Sheet). All
                              accounts payable and taxes shall be paid current;
                              excluding good faith disputes.

                        3.    Liens on all of the Borrower's collateral shall
                              have been filed and otherwise perfected to the
                              satisfaction of the Lender. The Lender shall have
                              received a mortgagee's policy of title insurance
                              containing such exceptions and endorsements, and



                                      -4-


                              issued by such companies, as may be reasonably
                              acceptable to the Lender.

                        4.    Satisfactory completion of due diligence,
                              including a commercial finance examination,
                              inventory appraisal (determined on the net
                              liquidation value), accounts receivable appraisal
                              (determined on the net liquidation value),
                              appraisals of real estate (determined on the
                              forced liquidation value) and environmental site
                              assessments. Appraisals and other due diligence
                              efforts will be undertaken by independent third
                              parties reasonably acceptable to the Lender.

                        5.    All necessary consents and approvals to the
                              financing shall all have been obtained.

                        6.    Any other information (financial or otherwise)
                              reasonably requested by the Lender shall have been
                              received by the Lender and shall be in form and
                              substance reasonably satisfactory to the Lender.
                              Without limitation, the Lender shall have received
                              and be satisfied with both (a) the
                              PricewaterhouseCoopers quality of earnings report
                              for the Target, and (b) subject to the last
                              sentence of this sub- paragraph, the McKinsey Co.
                              report concerning the Target's marketing strategy.
                              The Lender's receipt of such reports is
                              conditioned upon the Lender's execution of a
                              release and confidentiality agreement with each of
                              PricewaterhouseCoopers and McKinsey Co. in form
                              satisfactory to the Lender and such entities. In
                              the event that the Lender and McKinsey Co. do not
                              agree on the form of a release and confidentiality
                              agreement (the Borrower having used its best
                              efforts to obtained same), the satisfaction of the
                              Lender with the McKinsey report shall not be a
                              condition to the consummation of the Credit
                              Facility.

                        7.    Completion of the legal due diligence
                              investigation by the Lender's counsel, with
                              results satisfactory to the Lender and its
                              counsel.

                        8.    Preparation, execution and delivery of definitive
                              documentation satisfactory to the Lender and the
                              Borrower. Documentation shall contain



                                      -5-


                              representations, covenants, events of default,
                              expense reimbursement, and indemnification
                              provisions for the benefit of the Lender customary
                              for transactions of this size, type, and purpose.

                        9.    Satisfactory intercreditor or agency agreement
                              provisions between the Lender and agent for the
                              Senior Credit Facility.

                        10.   The Lender shall have received (i) reasonable and
                              customary opinions of counsel to the Borrower as
                              to the transactions contemplated hereby which
                              opinions are satisfactory to the Lender and (ii)
                              such corporate resolutions, certificates and other
                              documents as the Lender shall reasonably request.

                        11.   No material misstatements in or omissions from the
                              materials previously furnished to the Lender for
                              its review. The Lender must be satisfied that any
                              financial statements and projections delivered to
                              it fairly present the business and financial
                              condition of the Borrower, and that there has been
                              no material adverse change in the assets,
                              business, financial condition, income or prospects
                              of any Borrower since the date of the most recent
                              financial information delivered to the Lender.

                        12.   The absence of any litigation or other proceeding
                              the result of which could reasonably be expected
                              to have a Material Adverse Effect. "Material
                              Adverse Effect" means a material adverse effect on
                              (a) the business, operations, property, assets, or
                              condition, financial or otherwise, of any Borrower
                              taken as a whole, (b) the ability of any Borrower
                              to perform any material obligation or to pay any
                              obligations under the Credit Facility, or (c) the
                              validity or enforceability of any of the
                              definitive loan documents or any of the material
                              rights or remedies of the Lender thereunder.

                        13.   The absence of any default of any material
                              contract or agreement of any Borrower which could
                              reasonably be expected to have a Material Adverse
                              Effect.

                        14.   The proposed financing is subject to the condition
                              that no material changes in governmental

                                      -6-


                              regulations or policies affecting any Borrower or
                              Lender involved in this transaction occur prior to
                              the Closing Date.

                        15.   The Lender shall have entered into an
                              intercreditor and subordination agreement with the
                              holders of the Borrower's mezzanine indebtedness
                              reasonably satisfactory in form and substance to
                              the Lender. The intercreditor agreement shall
                              permit the holder of such mezzanine indebtedness
                              (i) to receive payments of interest, and (ii) to
                              receive payments of principal solely from the
                              proceeds of the sale of the accounts receivable
                              portfolio, in each case as long as no default or
                              event of default then exists or would arise
                              therefrom.

                        16.   The Lender's reasonable satisfaction with the
                              acquisition documents for the Target, and
                              consummation of the acquisition (with all
                              conditions precedent set forth in the acquisition
                              documents having been satisfied or waived with the
                              consent of the Lender) on terms and structure
                              reasonably acceptable to the Lender.

                        17.   Receipt of solvency opinion prepared by such
                              persons and otherwise reasonably satisfactory in
                              form and substance to the Lender. The solvency
                              opinion may also be addressed to, and for the
                              benefit of, the Target.

ASSIGNMENTS AND
PARTICIPATIONS:         The Lender will be permitted to grant participations or
                        assignments of their loans and commitments. Prior to the
                        occurrence of a default, the Borrower shall have the
                        right to consent to any such assignment, such consent
                        not to be unreasonably withheld or delayed. In no event
                        may the Lender grant participations or make assignments
                        to a competitor of the Target.

GOVERNING LAW:          The Commonwealth of Massachusetts.


AGENT'S COUNSEL:        Bingham McCutchen LLP





                                      -7-

EX-99.C.2

EX (C)(2)

EX-99.C.3

Exhibit (c)(3)

Presentation to The Board of Directors Regarding Project Buckeye Strictly Private and Confidential June 19, 2003 TO BE UPDATED AS APPROPRIATE FOR SUBSEQUENT BOARD OF DIRECTORS DELIBERATIONS

Table of Contents Transaction Overview Background to the Transaction Merger Price Analysis

I. Transaction Overview

Transaction Overview(1) Acquiror: A special purpose acquisition vehicle formed by Goldner Hawn Johnson & Morrison Incorporated with Buckeye management participation ("GHJM") Transaction Structure: Cash merger Tax Treatment: Taxable transaction Merger Price: $6.00 per share in cash Options: Options of non-participating management and other employees to be cashed out Management Agreements: Selected key management personnel to contribute existing shares and options in exchange for equity in the surviving company No-Shop: Standard with fiduciary out Termination Fee: Topping fee of $2 million as well as up to $1 million for documented expenses in certain cases Significant Conditions to Close: Funding provided under existing commitment letters Shareholder approval (662/3%) HSR approval Based upon a review of the draft Agreement and Plan of Merger dated 6/23/03.

II. Background to the Transaction

Early Background to the Transaction Timeline Comments December 14, 1999 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party A executed a confidentiality agreement. February 2000 The board of directors (the "Board") retained an investment bank to pursue strategic alternatives. March - June 2000 The investment bank contacted a broad universe of both potential strategic and financial buyers. July 19, 2000 The Board reviewed Party A's bid of $5.25 per share (the highest bid received from interested parties who had submitted bids to the investment bank in connection with the review of strategic alternatives). August 2000 Party A's bid was rejected by the Board. The Board approved a share repurchase program, in which Buckeye completed the repurchase of 3.5 million shares for $17.7 million at an average price of $5.05 per share. October 2001 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party B executed a confidentiality agreement.

Events Leading to Current Proposal Timeline Comments August 9, 2002 Party B proposed $3.50 per share. August 19, 2002 RBC Dain Rauscher Inc., a member company of RBC Capital Markets ("RBC"), was hired by the Board. Party B executed a new confidentiality agreement. September 3, 2002 Party B proposed $4.50 per share. November 20, 2002 Party B (with different advisors) proposed $4.00 per share. February 3, 2003 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party C executed a confidentiality agreement. March 13, 2003 Party B (again with different advisors) proposed $4.50 per share. March 24, 2003 GHJM executed a confidentiality agreement. April 8, 2003 Party C proposed $3.50 per share. May 7, 2003 Party C proposed $4.60 per share. May 9, 2003 GHJM proposed $4.75 per share. GHJM and Party C were invited to submit best and final proposals. May 12, 2003 GHJM proposed $6.00 per share, which was superior to Party C's revised bid. May 16, 2003 Exclusivity letter agreement was signed by Buckeye with GHJM.

III. Merger Price Analysis

Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 2/1/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM 2003E 2004E 2005E 2006E 2007E Summary Data Number of stores (ending) 64 68 68 68 69 72 74 77 80 Comparable store sales growth (0.8%) (3.5%) (2.4%) (3.5%) 0.0% 1.0% 1.0% 1.0% 1.0% Sales per square foot(2) $123 $119 $117 $117 $119 $120 $122 $124 $126 Income Statement Revenue $675,209 $661,170 $657,667 $647,471 $657,111 $678,166 $705,491 $733,648 $766,663 % Growth (2.1%) (0.5%) (2.3%) (0.1%) 3.2% 4.0% 4.0% 4.5% Gross profit $243,299 $231,830 $228,848 $226,345 $229,737 $237,877 $249,470 $259,575 $271,424 % Margin 36.0% 35.1% 34.8% 35.0% 35.0% 35.1% 35.4% 35.4% 35.4% EBITDA $42,321 $39,736 $40,402 $39,529 $40,810 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.2% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,635 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 3.4% 3.6% 4.0% 4.2% 4.3% Net income $7,227 $3,819 $5,242 $4,958 $6,452 $9,950 $12,197 $13,422 $14,062 % Margin 1.1% 0.6% 0.8% 0.8% 1.0% 1.5% 1.7% 1.8% 1.8% Balance Sheet Cash and cash equivalents $7,878 $7,142 $9,735 $7,345 $7,500 $7,575 $7,550 $7,650 $7,625 Net debt $159,263 $146,878 $110,848 $110,099 $94,500 $78,325 $65,150 $49,350 $38,675 Shareholders' equity $222,000 $217,210 $206,700 $205,077 $215,600 $225,600 $237,800 $251,200 $265,300 Ratios Inventory turnover 2.7x 2.8x 3.0x 2.8x 3.1x 3.3x 3.4x 3.4x 3.4x Accounts receivable days 74.4 72.6 70.7 68.8 70.4 69.3 69.0 69.1 68.9 Accounts payable days 29.9 30.7 33.9 38.8 33.3 30.8 30.1 30.1 30.0 Net debt/net capitalization 41.8% 40.3% 34.9% 34.9% 30.5% 25.8% 21.5% 16.4% 12.7% EBITDA/interest expense 3.0x 2.8x 3.3x 3.3x 3.5x 5.5x 5.5x 5.3x 5.1x Total debt/EBITDA 3.9x 3.9x 3.0x 3.0x 2.5x 2.0x 1.6x 1.2x 0.9x The normalized historical and forecast financial information contained on this page has been provided by the Company's management (the "Company Financials"). "Normalized" reflects adjustments by the Company's management to eliminate extraordinary and non-recurring items. In preparing its fairness analysis, RBC has relied, without independent investigation, upon the advice received by RBC from the Company that the Company Financials were prepared by the Company's management in good faith and in the ordinary course of business for use by the Company and were based on both (i) adjustments, consistent with the Company's financial books and records, to eliminate extraordinary and non-recurring items, and (ii) in the case of the forward-looking Company Financials, the best currently available estimates of the Company's future financial performance, which, in both cases management believed reasonable at the time of their preparation and RBC's use thereof in connection with its fairness analysis. The Company has also advised RBC that such use has been authorized by the Company's Board of Directors. In addition, RBC has assumed that the Company will perform substantially in accordance with the forward-looking Company Financials. RBC acknowledges that the Company has further advised RBC that actual results for the periods covered by the forward-looking Company Financials may differ materially from the results forecasted therein and that the Company has referred RBC to the Company's Report on Form 10-K for the fiscal year ended February 1, 2003 for an identification of certain factors that could materially affect its future operations and results. Represents sales per gross square foot. Financial Performance (in thousands, unless otherwise noted)

Merger Price Analysis Methodologies Premium Paid Analysis Analyzed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts). Discounted Cash Flow Analysis Analyzed present value of projected unlevered after-tax free cash flows of Buckeye, based on the Company Financials, utilizing a range of weighted average costs of capital and terminal EBITDA exit multiples. Comparable Company Analysis Analyzed current public market trading values of comparable companies. Precedent Transaction Analysis Analyzed multiples paid on selected acquisition transactions.

Implied Multiples (in millions, unless otherwise noted) Purchase Price per Share Unaffected Price(2) Merger Price Variable(1) $3.19 $6.00 Equity value(3) $38.2 $79.2 Enterprise value(4) $148.3 $185.2 Enterprise value multiples: LTM revenue $647.5 0.23x 0.29x 2003E revenue $657.1 0.23x 0.28x 2004E revenue $678.2 0.22x 0.27x 2005E revenue $705.5 0.21x 0.26x LTM EBITDA $39.5 3.8x 4.7x 2003E EBITDA $40.8 3.6x 4.5x 2004E EBITDA $42.1 3.5x 4.4x 2005E EBITDA $46.2 3.2x 4.0x LTM EBIT $20.9 7.1x 8.9x 2003E EBIT $22.6 6.6x 8.2x 2004E EBIT $24.3 6.1x 7.6x 2005E EBIT $28.2 5.3x 6.6x Equity value multiples: LTM EPS $0.44 7.3x 13.8x 2003E EPS $0.57 5.6x 10.6x 2004E EPS $0.87 3.6x 6.9x 2005E EPS $1.07 3.0x 5.6x Based on the Company Financials as of 5/3/03. The ("Unaffected Price") is Buckeye's closing stock price on 5/13/03, the date on which the two competing final proposals were considered by the Executive Committee of the Board, which decided to recommend the GHJM proposal to the Board for exclusive negotiation. Board approval of exclusive negotiations was issued on 5/14/03. Equity value is based on the Treasury Stock Method ("TSM") shares outstanding for the Unaffected Price. All other purchase price per share equity values are based on fully diluted shares outstanding. Enterprise value is based on net debt outstanding at 5/3/03. Debt is adjusted for cash balances and cash proceeds from options at the range of purchase prices per share and not at the Unaffected Price.

Market Trading Performance(1) Source: Factset. Includes only market trading days leading up to the date of the Unaffected Price. From January 1, 2001 to Date of Unaffected Price Stock Volume Date Price (000's) 5/13/2003 3.19 41,000 Buckeye Historical Trading 5/12/2003 3.08 60,800 Min Mean Median Max 5/9/2003 3.05 19,300 LTM Period $1.56 $2.49 $2.50 $3.50 5/8/2003 2.79 7,300 Since 1/1/01 $1.56 $2.91 $2.99 $4.38 5/7/2003 2.75 5,400 5/6/2003 2.94 15,200 Unaffected Price: $3.19 5/5/2003 2.97 13,500 5/2/2003 3.05 26,600 5/1/2003 3.24 19,400 4/30/2003 3.06 10,100 4/29/2003 2.99 1,400 4/28/2003 3.04 8,100 4/25/2003 2.92 6,700 4/24/2003 2.94 16,700 4/23/2003 2.84 24,600 4/22/2003 2.55 3,800 4/21/2003 2.38 2,100 4/17/2003 2.58 237,200 4/16/2003 2.51 - 4/15/2003 2.47 20,000 4/14/2003 2.54 71,600 4/11/2003 2.55 1,000 4/10/2003 2.49 57,200 4/9/2003 2.45 1,300 4/8/2003 2.60 5,000 4/7/2003 2.45 1,000 4/4/2003 2.59 5,000 4/3/2003 2.51 10,100 4/2/2003 2.50 57,600 4/1/2003 2.50 64,500 3/31/2003 2.40 1,600 3/28/2003 2.50 4,800 3/27/2003 2.12 8,376 3/26/2003 2.51 3,000 3/25/2003 2.48 9,000 3/24/2003 2.48 34,300 3/21/2003 2.41 200 3/20/2003 2.50 17,500 3/19/2003 2.35 800 3/18/2003 2.37 3,700 3/17/2003 2.24 1,200 3/14/2003 2.18 2,600 3/13/2003 2.32 1,000 3/12/2003 2.30 300 3/11/2003 2.34 1,300 3/10/2003 2.36 1,700 3/7/2003 2.54 15,800 3/6/2003 2.10 7,300 3/5/2003 2.74 10,200 3/4/2003 2.76 11,400 3/3/2003 2.51 600 2/28/2003 2.49 2,597 2/27/2003 2.18 11,603 2/26/2003 2.23 - 2/25/2003 2.24 5,000 2/24/2003 2.30 7,600 2/21/2003 2.45 2,400 2/20/2003 2.43 1,700 2/19/2003 2.49 100 2/18/2003 2.49 400 2/14/2003 2.55 4,700 2/13/2003 2.60 4,200 2/12/2003 2.57 2,500 2/11/2003 2.70 16,200 2/10/2003 2.79 1,900 2/7/2003 2.48 7,900 2/6/2003 2.48 43,197 2/5/2003 2.78 29,200 2/4/2003 2.80 4,000 2/3/2003 2.80 5,200 1/31/2003 2.61 3,703 1/30/2003 2.72 500 1/29/2003 2.78 - 1/28/2003 2.80 5,000 1/27/2003 2.69 400 1/24/2003 2.43 11,700 1/23/2003 2.85 7,400 1/22/2003 3.00 33,300 1/21/2003 2.79 27,500 1/17/2003 2.21 19,600 1/16/2003 2.00 9,200 1/15/2003 1.90 1,000 1/14/2003 1.98 1,500 1/13/2003 1.78 3,600 1/10/2003 1.78 11,900 1/9/2003 1.87 1,600 1/8/2003 1.84 - 1/7/2003 1.99 3,300 1/6/2003 1.82 4,100 1/3/2003 1.56 4,000 1/2/2003 1.62 24,000 12/31/2002 1.80 30,100 12/30/2002 1.80 6,300 12/27/2002 1.84 7,900 12/26/2002 1.91 1,200 12/24/2002 1.83 600 12/23/2002 2.04 4,300 12/20/2002 1.82 11,200 12/19/2002 1.77 14,100 12/18/2002 1.90 2,900 12/17/2002 1.84 20,100 12/16/2002 1.99 2,400 12/13/2002 2.00 4,100 12/12/2002 2.15 16,100 12/11/2002 2.04 16,000 12/10/2002 1.91 4,500 12/9/2002 2.05 19,700 12/6/2002 1.90 10,200 12/5/2002 2.05 2,000 12/4/2002 2.07 9,500 12/3/2002 2.05 9,200 12/2/2002 1.88 8,100 11/29/2002 1.73 2,400 11/27/2002 1.70 28,200 11/26/2002 1.81 12,200 11/25/2002 1.79 5,100 11/22/2002 1.91 3,800 11/21/2002 2.20 7,800 11/20/2002 2.00 1,900 11/19/2002 1.80 3,700 11/18/2002 1.81 3,500 11/15/2002 1.93 500 11/14/2002 1.80 5,400 11/13/2002 1.93 300 11/12/2002 1.92 1,800 11/11/2002 1.92 1,200 11/8/2002 1.91 1,700 11/7/2002 1.92 600 11/6/2002 1.99 1,900 11/5/2002 1.96 - 11/4/2002 1.96 - 11/1/2002 1.96 3,800 10/31/2002 1.98 6,400 10/30/2002 2.05 4,100 10/29/2002 2.05 1,700 10/28/2002 2.05 8,985 10/25/2002 2.32 - 10/24/2002 2.13 1,200 10/23/2002 2.11 - 10/22/2002 2.17 8,600 10/21/2002 1.91 8,500 10/18/2002 1.90 - 10/17/2002 1.88 - 10/16/2002 1.86 2,000 10/15/2002 1.97 6,300 10/14/2002 1.89 - 10/11/2002 1.89 3,300 10/10/2002 1.89 - 10/9/2002 1.82 1,500 10/8/2002 1.80 5,900 10/7/2002 1.85 3,300 10/4/2002 2.00 23,600 10/3/2002 1.90 6,200 10/2/2002 2.00 28,100 10/1/2002 1.90 76,200 9/30/2002 2.21 22,600 9/27/2002 2.15 8,400 9/26/2002 2.35 2,600 9/25/2002 2.34 600 9/24/2002 2.45 200 9/23/2002 2.42 1,000 9/20/2002 2.45 2,100 9/19/2002 2.50 8,900 9/18/2002 2.45 - 9/17/2002 2.35 27,300 9/16/2002 2.55 2,600 9/13/2002 2.65 1,600 9/12/2002 2.56 1,300 9/11/2002 2.60 1,900 9/10/2002 2.62 - 9/9/2002 2.60 1,000 9/6/2002 2.55 4,900 9/5/2002 2.70 1,900 9/4/2002 2.74 1,100 9/3/2002 2.31 4,800 8/30/2002 2.80 600 8/29/2002 2.70 20,300 8/28/2002 2.89 900 8/27/2002 2.51 400 8/26/2002 2.78 8,000 8/23/2002 2.72 2,400 8/22/2002 2.81 7,300 8/21/2002 2.50 1,600 8/20/2002 2.83 200 8/19/2002 2.37 1,100 8/16/2002 2.54 4,000 8/15/2002 2.64 2,300 8/14/2002 2.39 6,000 8/13/2002 2.35 500 8/12/2002 2.50 9,500 8/9/2002 2.75 2,000 8/8/2002 2.60 4,700 8/7/2002 2.46 4,200 8/6/2002 2.46 25,300 8/5/2002 2.80 3,700 8/2/2002 2.80 1,100 8/1/2002 2.88 4,700 7/31/2002 2.75 4,100 7/30/2002 2.84 100 7/29/2002 2.43 1,500 7/26/2002 2.73 1,000 7/25/2002 2.45 1,300 7/24/2002 2.08 22,600 7/23/2002 2.55 27,300 7/22/2002 2.80 30,882 7/19/2002 2.75 1,200 7/18/2002 3.00 25,900 7/17/2002 2.38 400 7/16/2002 2.70 15,200 7/15/2002 2.77 13,600 7/12/2002 2.70 70,200 7/11/2002 2.97 7,400 7/10/2002 3.05 40,800 7/9/2002 3.20 1,900 7/8/2002 3.16 100 7/5/2002 3.20 1,000 7/3/2002 3.10 11,400 7/2/2002 3.13 18,900 7/1/2002 3.13 4,900 6/28/2002 3.10 15,800 6/27/2002 3.18 - 6/26/2002 3.10 12,700 6/25/2002 3.18 9,200 6/24/2002 3.10 8,900 6/21/2002 3.14 2,100 6/20/2002 3.09 78,800 6/19/2002 3.10 3,900 6/18/2002 3.15 17,700 6/17/2002 3.10 20,100 6/14/2002 3.16 600 6/13/2002 3.18 - 6/12/2002 3.16 13,600 6/11/2002 3.15 1,100 6/10/2002 3.28 - 6/7/2002 3.15 7,400 6/6/2002 3.09 700 6/5/2002 3.09 2,000 6/4/2002 3.10 2,400 6/3/2002 3.40 6,800 5/31/2002 2.98 7,900 5/30/2002 3.22 1,700 5/29/2002 3.16 14,300 5/28/2002 3.50 4,000 5/24/2002 2.96 7,900 5/23/2002 3.50 14,900 5/22/2002 3.30 2,100 5/21/2002 3.30 3,000 5/20/2002 3.32 200 5/17/2002 3.35 100 5/16/2002 3.30 7,700 5/15/2002 3.30 3,300 5/14/2002 3.50 1,500 5/13/2002 3.35 300 5/10/2002 3.50 2,200 5/9/2002 3.34 400 5/8/2002 3.30 1,400 5/7/2002 3.17 1,200 5/6/2002 3.15 3,100 5/3/2002 3.36 3,200 5/2/2002 3.50 4,200 5/1/2002 3.35 26,200 4/30/2002 3.15 12,900 4/29/2002 3.21 100 4/26/2002 3.18 7,200 4/25/2002 3.40 4,900 4/24/2002 3.50 1,100 4/23/2002 3.18 17,400 4/22/2002 3.40 67,500 4/19/2002 3.50 10,000 4/18/2002 3.25 9,600 4/17/2002 3.05 3,600 4/16/2002 3.16 12,500 4/15/2002 2.95 3,200 4/12/2002 2.90 900 4/11/2002 2.70 3,600 4/10/2002 2.65 21,800 4/9/2002 2.65 17,400 4/8/2002 2.70 35,900 4/5/2002 2.74 17,800 4/4/2002 2.60 13,300 4/3/2002 2.65 24,900 4/2/2002 2.75 15,900 4/1/2002 2.75 9,200 3/28/2002 2.60 33,900 3/27/2002 2.65 36,900 3/26/2002 2.70 17,700 3/25/2002 2.45 31,000 3/22/2002 2.60 15,400 3/21/2002 2.59 800 3/20/2002 2.60 23,400 3/19/2002 2.70 17,900 3/18/2002 2.45 16,000 3/15/2002 2.25 2,000 3/14/2002 2.79 900 3/13/2002 2.65 200 3/12/2002 2.75 6,300 3/11/2002 2.75 1,700 3/8/2002 2.60 13,200 3/7/2002 2.59 12,700 3/6/2002 2.50 16,500 3/5/2002 2.45 1,700 3/4/2002 2.45 24,300 3/1/2002 2.63 1,000 2/28/2002 2.63 4,400 2/27/2002 2.56 8,200 2/26/2002 2.05 6,400 2/25/2002 2.22 - 2/22/2002 2.29 9,300 2/21/2002 2.35 19,500 2/20/2002 2.40 6,800 2/19/2002 2.45 16,800 2/15/2002 2.35 3,100 2/14/2002 2.25 7,900 2/13/2002 2.41 10,900 2/12/2002 2.45 5,700 2/11/2002 2.60 300 2/8/2002 2.55 16,300 2/7/2002 2.65 13,100 2/6/2002 2.65 16,900 2/5/2002 2.83 200 2/4/2002 2.65 2,000 2/1/2002 2.70 39,600 1/31/2002 2.80 11,100 1/30/2002 2.70 122,000 1/29/2002 2.85 48,400 1/28/2002 2.80 21,000 1/25/2002 3.17 21,200 1/24/2002 2.89 47,500 1/23/2002 2.85 4,300 1/22/2002 2.80 900 1/18/2002 2.79 - 1/17/2002 2.82 10,900 1/16/2002 2.89 16,100 1/15/2002 2.85 - 1/14/2002 2.73 3,000 1/11/2002 2.94 - 1/10/2002 2.90 43,300 1/9/2002 2.91 2,900 1/8/2002 2.91 40,400 1/7/2002 3.05 1,200 1/4/2002 3.05 5,000 1/3/2002 3.15 18,900 1/2/2002 2.81 4,600 12/31/2001 2.94 52,100 12/28/2001 2.65 14,200 12/27/2001 2.90 30,600 12/26/2001 3.00 10,600 12/24/2001 2.96 400 12/21/2001 3.00 14,000 12/20/2001 3.01 4,100 12/19/2001 3.10 65,100 12/18/2001 3.13 13,700 12/17/2001 3.00 17,500 12/14/2001 3.00 8,600 12/13/2001 3.05 7,100 12/12/2001 3.00 4,100 12/11/2001 2.97 54,400 12/10/2001 2.95 4,300 12/7/2001 3.00 3,500 12/6/2001 3.00 2,500 12/5/2001 3.00 12,100 12/4/2001 3.00 52,400 12/3/2001 2.95 32,600 11/30/2001 2.95 18,500 11/29/2001 2.95 88,700 11/28/2001 3.00 100 11/27/2001 2.98 7,200 11/26/2001 2.98 22,400 11/23/2001 3.00 3,100 11/21/2001 2.95 25,700 11/20/2001 2.96 1,500 11/19/2001 2.96 1,900 11/16/2001 3.00 115,600 11/15/2001 3.00 5,600 11/14/2001 3.00 4,500 11/13/2001 3.05 3,100 11/12/2001 2.61 4,300 11/9/2001 3.00 200 11/8/2001 3.00 16,000 11/7/2001 3.00 200 11/6/2001 2.85 2,600 11/5/2001 2.94 6,800 11/2/2001 3.00 3,400 11/1/2001 2.80 7,000 10/31/2001 2.96 6,000 10/30/2001 3.05 44,500 10/29/2001 3.08 1,342,300 10/26/2001 3.13 5,800 10/25/2001 3.13 16,200 10/24/2001 3.11 16,400 10/23/2001 3.17 7,500 10/22/2001 3.12 4,900 10/19/2001 3.02 15,200 10/18/2001 3.40 1,300 10/17/2001 3.08 30,000 10/16/2001 3.13 30,000 10/15/2001 3.35 2,100 10/12/2001 3.30 30,600 10/11/2001 3.07 5,600 10/10/2001 3.09 1,000 10/9/2001 3.15 106,200 10/8/2001 3.36 5,200 10/5/2001 3.40 26,800 10/4/2001 3.41 13,900 10/3/2001 3.40 201,400 10/2/2001 3.60 9,400 10/1/2001 3.50 5,100 9/28/2001 3.55 8,000 9/27/2001 3.50 30,000 9/26/2001 3.54 7,000 9/25/2001 3.57 13,200 9/24/2001 3.55 33,000 9/21/2001 3.51 24,300 9/20/2001 3.82 28,600 9/19/2001 3.85 38,300 9/18/2001 3.76 11,300 9/17/2001 3.90 58,300 9/10/2001 4.05 22,200 9/7/2001 3.95 2,900 9/6/2001 3.99 11,900 9/5/2001 4.38 105,400 9/4/2001 4.00 21,900 8/31/2001 3.95 7,600 8/30/2001 4.00 21,400 8/29/2001 3.97 2,000 8/28/2001 4.02 8,900 8/27/2001 4.04 11,200 8/24/2001 4.00 - 8/23/2001 4.04 33,200 8/22/2001 3.98 4,300 8/21/2001 4.00 11,900 8/20/2001 3.98 12,600 8/17/2001 4.00 1,500 8/16/2001 3.96 14,800 8/15/2001 4.00 3,300 8/14/2001 3.93 7,800 8/13/2001 4.00 600 8/10/2001 3.80 2,800 8/9/2001 3.79 27,600 8/8/2001 3.95 1,000 8/7/2001 3.95 1,500 8/6/2001 3.95 10,700 8/3/2001 3.95 100 8/2/2001 3.95 1,600 8/1/2001 3.95 4,200 7/31/2001 3.90 10,800 7/30/2001 3.95 300 7/27/2001 4.00 1,900 7/26/2001 4.00 500 7/25/2001 3.95 12,400 7/24/2001 3.97 5,000 7/23/2001 4.00 1,800 7/20/2001 4.00 3,800 7/19/2001 4.00 1,000 7/18/2001 3.95 8,600 7/17/2001 3.90 1,800 7/16/2001 3.97 700 7/13/2001 3.97 1,000 7/12/2001 3.95 3,200 7/11/2001 3.80 1,900 7/10/2001 3.81 700 7/9/2001 3.80 17,100 7/6/2001 3.77 7,300 7/5/2001 3.50 19,800 7/3/2001 3.75 600 7/2/2001 3.77 5,100 6/29/2001 3.75 6,700 6/28/2001 3.77 39,800 6/27/2001 3.78 48,600 6/26/2001 3.73 11,300 6/25/2001 3.76 4,800 6/22/2001 3.76 600 6/21/2001 3.75 1,100 6/20/2001 3.76 4,600 6/19/2001 3.75 7,400 6/18/2001 3.75 7,400 6/15/2001 3.71 15,100 6/14/2001 3.80 6,300 6/13/2001 3.75 2,300 6/12/2001 3.80 700 6/11/2001 3.70 12,800 6/8/2001 3.85 11,100 6/7/2001 3.55 22,400 6/6/2001 3.54 7,500 6/5/2001 3.40 1,400 6/4/2001 3.38 1,500 6/1/2001 3.35 4,800 5/31/2001 3.15 600 5/30/2001 3.16 6,500 5/29/2001 3.60 8,100 5/25/2001 3.50 4,700 5/24/2001 3.25 3,600 5/23/2001 3.19 185,200 5/22/2001 3.05 11,200 5/21/2001 3.15 600 5/18/2001 3.20 200 5/17/2001 3.20 1,000 5/16/2001 3.13 300 5/15/2001 3.24 10,200 5/14/2001 3.15 2,300 5/11/2001 3.07 100 5/10/2001 3.07 3,300 5/9/2001 3.15 600 5/8/2001 3.10 200 5/7/2001 3.10 1,800 5/4/2001 3.10 5,800 5/3/2001 3.07 1,500 5/2/2001 3.06 4,600 5/1/2001 3.05 300 4/30/2001 3.06 400 4/27/2001 3.06 6,100 4/26/2001 3.10 900 4/25/2001 3.10 500 4/24/2001 3.10 6,600 4/23/2001 3.10 2,600 4/20/2001 3.06 2,400 4/19/2001 3.10 15,200 4/18/2001 3.10 53,200 4/17/2001 3.02 900 4/16/2001 3.10 400 4/12/2001 3.10 14,900 4/11/2001 3.25 14,700 4/10/2001 3.22 20,300 4/9/2001 3.50 800 4/6/2001 3.50 12,800 4/5/2001 3.50 6,600 4/4/2001 3.00 3,800 4/3/2001 3.00 6,100 4/2/2001 3.38 3,000 3/30/2001 3.63 13,500 3/29/2001 3.53 800 3/28/2001 3.50 7,800 3/27/2001 3.50 22,800 3/26/2001 3.63 18,100 3/23/2001 3.25 13,500 3/22/2001 3.13 48,800 3/21/2001 3.25 11,600 3/20/2001 3.13 13,300 3/19/2001 3.13 2,200 3/16/2001 3.13 2,100 3/15/2001 3.13 700 3/14/2001 3.13 1,200 3/13/2001 3.34 29,200 3/12/2001 3.56 900 3/9/2001 3.50 8,900 3/8/2001 3.39 100 3/7/2001 3.63 1,100 3/6/2001 3.50 6,300 3/5/2001 3.31 7,300 3/2/2001 3.38 1,300 3/1/2001 3.38 50,400 2/28/2001 3.53 - 2/27/2001 3.50 8,300 2/26/2001 3.63 1,800 2/23/2001 3.63 29,600 2/22/2001 3.25 8,300 2/21/2001 3.25 28,000 2/20/2001 3.25 28,500 2/16/2001 3.00 3,300 2/15/2001 2.81 400 2/14/2001 2.88 1,200 2/13/2001 2.88 14,100 2/12/2001 2.94 19,000 2/9/2001 2.88 6,100 2/8/2001 3.00 700 2/7/2001 3.00 12,200 2/6/2001 3.00 1,300 2/5/2001 3.00 6,900 2/2/2001 3.00 12,000 2/1/2001 3.00 9,000 1/31/2001 3.06 12,400 1/30/2001 3.09 6,300 1/29/2001 3.00 79,300 1/26/2001 3.00 2,400 1/25/2001 3.25 6,100 1/24/2001 3.31 - 1/23/2001 3.31 10,100 1/22/2001 3.09 500 1/19/2001 3.25 4,700 1/18/2001 3.25 3,400 1/17/2001 3.25 600 1/16/2001 3.38 9,100 1/12/2001 3.38 1,100 1/11/2001 3.31 400 1/10/2001 3.25 1,900 1/9/2001 3.38 200 1/8/2001 3.38 4,700 1/5/2001 3.38 1,300 1/4/2001 3.44 22,100 1/3/2001 3.25 13,300 1/2/2001 3.00 16,600

Premium Paid Analysis Methodology Based on acquisitions of broad line department store retailers and moderate-priced specialty softline retail companies that are similar to Buckeye (the "Selected Precedents"). Analyzed the premiums paid on the Selected Precedents where the target was publicly traded prior to the transaction. Premium selection Reviewed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts).

Announcement Target Target Premium Paid(2) Target Acquiror Date Equity Value Enterprise Value 1-Day 30-Day 60-Day 90-Day Catherine's Stores Corp. Charming Shoppes Inc. 11/15/99 $162.0 $149.8 69.7% 59.9% 58.0% 57.7% Zions Cooperative Merc. Inst. May Departemtent Stores Co. 10/15/99 $52.4 $116.0 2.3% 32.4% 44.1% 47.9% Pamida Holdings Corp. ShopKo Stores Inc. 5/11/99 $109.6 $344.3 39.4% 120.4% 153.4% 168.2% K&G Men's Center Inc. Men's Wearhouse Inc. 3/4/99 $115.5 $98.6 32.6% 38.4% 31.1% 28.2% Hills Stores Co. Ames Department Stores Inc. 11/12/98 $16.9 $396.3 14.3% (6.6%) (20.7%) (45.9%) Min 2.3% (6.6%) (20.7%) (45.9%) Median 32.6% 38.4% 44.1% 47.9% Mean 31.6% 48.9% 53.2% 51.2% Max 69.7% 120.4% 153.4% 168.2% Buckeye @ Merger Price - $6.00 per share(3) $79.2 $185.2 94.8% 120.3% 134.2% 140.3% Premium Paid Analysis Summary Based on the Selected Precedents where the target was publicly traded prior to the transaction. Premiums are calculated to the target's average closing stock price for the specified period from the day before announcement. Buckeye's premiums are calculated as of the date of the Unaffected Price. (in millions, unless otherwise noted) Selected Precedents(1)

Discounted Cash Flow Analysis Methodology Analyzed the present value of the projected after-tax cash flows of Buckeye (EBITDA less cash taxes on EBIT, capital expenditures, and increases in working capital) through 2007E at a range of discount rates and terminal value EBITDA multiples. Projected after-tax cash flows of Buckeye are based on the Company Financials. Weighted average cost of capital ("WACC") Cost of equity is based on the modified capital asset pricing model ("CAPM") method with beta, market risk premium, and size premium information sourced from Ibbotson Associates 2003 Yearbook. Cost of debt is based on the estimated spread over the 10-year Treasury as determined by RBC. Terminal value Terminal value is calculated using the terminal EBITDA multiple method, whereby an EBITDA multiple is applied to Buckeye's 2007E EBITDA. Terminal EBITDA multiple range is consistent with trading multiples for comparable regional department store companies referred to in the comparable company analysis.

Discounted Cash Flow Analysis Summary Equity Value per Share: Equity value per share: Terminal EBITDA Multiple 4.0x 4.5x 5.0x 5.5x 6.0x 17.0% $5.09 $6.07 $7.04 $8.02 $8.99 18.0% $4.74 $5.68 $6.62 $7.56 $8.50 WACC 19.0% $4.40 $5.31 $6.22 $7.12 $8.03 20.0% $4.07 $4.95 $5.83 $6.70 $7.58 21.0% $3.75 $4.61 $5.45 $6.30 $7.15

Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 5/03 - 2/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM Q2/03E - Q4/03E 2004E 2005E 2006E 2007E 3/31/2003 3/31/2004 3/31/2005 3/31/2006 3/31/2007 Revenue $675,209 $661,170 $657,667 $647,471 $522,512 $678,166 $705,491 $733,648 $766,663 % Growth 2.6% (2.1%) (0.5%) (2.3%) 1.9% 3.2% 4.0% 4.0% 4.5% EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.9% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,740 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 4.4% 3.6% 4.0% 4.2% 4.3% Unlevered free cash flow EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 Less: cash taxes NA NA NA NA $227 $292 $9,787 $10,826 $11,494 Less: capital expenditures $23,471 $19,094 $8,336 $9,571 $10,161 $14,000 $12,000 $14,200 $14,000 Less: increase in working capital ($10,754) ($23,163) ($21,941) ($22,041) $2,433 $1,620 $9,887 $8,913 $9,347 Unlevered free cash flow NA NA NA NA $23,353 $26,185 $14,532 $13,816 $15,435 Sensitivity Analysis Weighted average cost of capital 17.0% 19.0% 21.0% PV of free cash flow $69,958 $67,990 $66,140 PV of terminal value(2) $128,985 $120,021 $111,813 Enterprise value $198,943 $188,011 $177,953 Less: debt $117,444 $117,444 $117,444 Add: cash $7,345 $7,345 $7,345 Add: cash from stock options $4,358 $4,184 $4,089 Less: net debt(3) $105,741 $105,915 $106,010 Equity value $93,202 $82,097 $71,943 Shares outstanding(4) 13,233 13,207 13,191 Equity value per share $7.04 $6.22 $5.45 Discounted Cash Flow Analysis Detail Based on the Company Financials. Based on terminal EBITDA multiple of 5.0x. Net debt is at 5/3/03. Fully diluted shares outstanding at corresponding equity value. (in thousands, unless otherwise noted)

Weighted Average Cost of Capital Calculation Raw Levered Net Market Net Debt / Unlevered Assumed Capital Structure Regional Department Stores Beta(1) Beta(2) Debt Value Mkt. Equity(3) Beta(4) Debt 35.0% Bon-Ton Stores Inc. 0.67 0.78 $65.9 $74.1 88.9% 0.49 Equity 65.0% Gottschalks Inc. 0.78 0.85 $121.3 $24.5 496.2% 0.20 Stein Mart Inc. 1.10 1.07 $39.2 $247.5 15.9% 0.97 Debt/Equity Ratio 53.8% Value City Dept. Stores Inc. 1.86 1.57 $301.9 $79.4 380.5% 0.45 Capital Cost Assumptions and Summary Mean 1.10 1.07 245.4% 0.53 Unlevered Beta (Unadjusted)(5) 1.35 Micro-Cap Beta(5) 1.35 Relevered Beta (Adjusted)(6) 1.82 Equity Risk Premium ("ERP")(7) 9.4% Size Premium ("SP")(8) 3.5% Relevered Beta x (ERP + SP) 23.6% Risk Free Rate (10-Year US Treasury) 3.1% Cost of Equity 26.7% Credit Spread 4.5% Pre-Tax Cost of Debt 7.6% Tax Rate 35.0% WACC Sensitivity Analysis After-Tax Cost of Debt 4.9% Percentage of Debt in Capital Structure 20% 25% 30% 35% 40% 45% 50% Weighted Average Cost of Capital 19.1% 1.31 19.3% 19.1% 18.9% 18.7% 18.5% 18.2% 18.0% 1.32 19.4% 19.2% 19.0% 18.8% 18.6% 18.4% 18.1% 1.33 19.5% 19.3% 19.1% 18.9% 18.7% 18.5% 18.3% 1.34 19.6% 19.4% 19.2% 19.0% 18.8% 18.6% 18.4% 1.35 19.8% 19.5% 19.3% 19.1% 18.9% 18.7% 18.5% 1.36 19.9% 19.7% 19.4% 19.2% 19.0% 18.8% 18.6% 1.37 20.0% 19.8% 19.6% 19.3% 19.1% 18.9% 18.7% 1.38 20.1% 19.9% 19.7% 19.5% 19.2% 19.0% 18.8% 1.39 20.2% 20.0% 19.8% 19.6% 19.3% 19.1% 18.9% Source: Bloomberg. Based on two-year weekly observations. Adjusted such that Beta = (2/3) X (Raw Beta) + (1/3) X 1. Based on current capital structure. BU = BL / ((1+(1-t) X (Net Debt / Mkt Equity)). Source: Ibbotson Associates Cost of Capital 2002 Yearbook. Micro-Cap comprised of the ninth and tenth deciles of the New York Stock Exchange, includes companies with a market capitalization under approximately $215 million. BL = (BU+Risk Premium) X (1+(D/E)(1-t)). Source: Ibbotson Associates 2003 Yearbook. Equity risk premium includes estimated return in excess of riskless rate of the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. Estimated return in excess of riskless rate is estimated by the arithmetic mean total return of the S&P 500 (12.20%) minus the arithmetic mean income return component of 20-year government bonds (5.23%) from 1926 to 2002. Source: Ibbotson Associates 2003 Yearbook. Size premium is return in excess of CAPM equity risk premium for the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. (in millions, unless otherwise noted)

Comparable Company Analysis Methodology Analyzed comparable company trading multiples. No control premium is reflected in the results of the public market trading multiples. Target selection Based on a peer group of regional department store retailers with business models similar to Buckeye. No public company is directly comparable to Buckeye.

Comparable Company Analysis (Cont.)(1) --------------- Enterprise Value Multiples Earnings Number Reported Price @ % of 52W Equity Enterprise LTM Price / Earnings LTM Margins 3-5 year Of Sales per Net Debt / Company 06/17/03 High Value (2) Value Revenue EBITDA EBIT LTM FY 2003E FY 2004E Gross EBITDA Secular(3) Stores(4) Sq. Ft. Net Cap. Bon-Ton Stores Inc. $4.86 92.0% $74.1 $139.9 0.20x 3.0x 5.4x 6.8x 7.2x NA 37.8% 6.6% NA 72 $133 23.9% Gottschalks Inc. $1.91 54.1% $24.5 $145.8 0.21x 5.8x 13.4x NM NA NA 34.8% 3.6% NA 81 $173 54.2% Stein Mart Inc. $5.95 48.3% $247.5 $286.7 0.21x 6.8x 12.3x 22.0x NM 14.9x 24.3% 3.0% 20.0% 265 $184 14.9% Value City Dept. Stores Inc. $2.34 56.7% $79.4 $381.3 0.16x 4.8x 17.5x NM 46.8x 11.7x 37.9% 3.2% 20.0% 116 $224 59.1% Min 0.16x 3.0x 5.4x 6.8x 7.2x 11.7x 24.3% 3.0% 20.0% 72 $133 14.9% Median 0.20x 5.3x 12.9x 14.4x 27.0x 13.3x 36.3% 3.4% 20.0% 99 $179 39.1% Mean 0.19x 5.1x 12.2x 14.4x 27.0x 13.3x 33.7% 4.1% 20.0% 134 $179 38.0% Max 0.21x 6.8x 17.5x 22.0x 46.8x 14.9x 37.9% 6.6% 20.0% 265 $224 59.1% Buckeye @ Unaffected Price (5) $3.19 91.1% $38.2 $148.3 0.23x 3.8x 7.1x 7.3x 5.6x 3.6x 35.0% 6.1% 21.5% 68 $117 34.9% Buckeye @ Merger Price (6) $6.00 171.4% $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 10.6x 6.9x 35.0% 6.1% 21.5% 68 $117 34.1% Source: Company press releases, SEC filings, and Wall Street Research. NA, NM, LTM, and CY are defined as not available, not meaningful, last twelve months, and calendar year, respectively. Based on shares outstanding calculated using the treasury stock method. Source: First Call. Earnings secular growth rates are 3-5 year secular projected growth rates. Buckeye's growth rate is based on the Company Financials for 2003 to 2007 EPS. As of most recent 10K filing. Gottschalks Inc. includes 12 specialty stores. Value City Dept. Stores Inc. excludes DSW and Filene's Basement stores. Buckeye includes 2 furniture stores. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value based on the treasury stock method and the Unaffected Price. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value is based on fully-diluted shares outstanding with net debt and enterprise value adjusted for cash proceeds from stock options. (in millions, unless otherwise noted) Regional Department Stores

Precedent Transaction Analysis Methodology Analyzed the multiples paid on selected acquisition transactions. Multiples paid reflect market conditions at the time of the announcement, potential synergies, and control premiums. Target selection Based on the Selected Precedents. No target is directly comparable to Buckeye.

At Announcement Enterprise Value Price / Premium Change in Reported -------------- Date Equity Enterprise LTM Multiples(4)(5) LTM LTM Margin(5) Analysis(6) Revenue Growth Comp Store Sales per Net Debt / Ann.(1) Target Acquiror Value(2) Value(3) Revenues EBITDA EBIT Earnings Gross EBITDA EBIT 30-Day 1-Year 2-Year Sales(7) Sq. Ft. Net Cap. 07/10/01 Lane Bryant Inc. Charming Shoppes Inc. $335.0 $329.2 0.35x 9.1x 18.2x 30.8x 28.4% 3.8% 1.9% NA NA NA 3.0% NA NA 06/19/01 Liberty House Inc. Federated Department Stores Inc. NA $200.0 0.73x NA NA NA NA NA NA NA NA NA NA $231 NA 08/24/00 Thrifty's, Braemar, and NLS American Eagle Outfitters Inc. $74.0 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 11/15/99 Catherine's Stores Corp. Charming Shoppes Inc. $162.0 $149.8 0.50x 4.6x 6.3x 11.9x 32.7% 10.7% 7.8% 59.9% 5.5% 5.8% 8.9% $177 NMF 10/15/99 Zions Cooperative Merc. Inst. May Departemtent Stores Co. $52.4 $116.0 0.49x NMF NMF NMF 30.8% NMF NMF 32.4% (7.0%) (4.0%) (4.0%) NA 65.7% 05/11/99 Pamida Holdings Corp. ShopKo Stores Inc. $109.6 $344.3 0.51x 7.4x 10.3x 23.0x 24.9% 7.0% 4.9% 120.4% 2.3% 3.0% 3.0% $152 125.4% 03/04/99 K&G Men's Center Inc. Men's Wearhouse Inc. $115.5 $98.6 0.75x 9.3x 10.0x 17.1x 23.2% 8.0% 7.5% 38.4% 23.8% 29.9% 11.9% $517 NMF 11/18/98 Moores Retail Group Inc. Men's Wearhouse Inc. $64.8 $121.7 0.91x NA 9.3x 35.6x 37.5% NA 9.8% NA NA NA NA NA 91.7% 11/12/98 Hills Stores Co. Ames Department Stores Inc. $16.9 $396.3 0.22x 5.1x 13.7x NMF 26.0% 4.3% 1.6% (6.6%) (2.0%) (3.2%) (1.5%) NA 64.9% 03/13/98 Shonac Corp. Value City Department Stores Inc. $99.9 $105.7 0.35x 5.7x 6.9x NA 39.8% 6.2% 5.1% NA 20.6% NA NA NA 9.5% Min 0.22x 4.6x 6.3x 11.9x 23.2% 3.8% 1.6% (6.6%) (7.0%) (4.0%) (4.0%) $152 9.5% Median 0.50x 6.6x 10.0x 23.0x 29.6% 6.6% 5.1% 38.4% 3.9% 3.0% 3.0% $204 65.7% Mean 0.53x 6.9x 10.7x 23.7x 30.4% 6.7% 5.5% 48.9% 7.2% 6.3% 3.6% $269 71.4% Max 0.91x 9.3x 18.2x 35.6x 39.8% 10.7% 9.8% 120.4% 23.8% 29.9% 11.9% $517 125.4% Buckeye @ Merger Price - $6.00 per share(8) $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 35.0% 6.1% 3.2% 120.3% (2.3%) (1.9%) (2.4%) $117 34.1% Precedent Transaction Analysis (Cont.) Based on the public announcement date of offer price. Fully diluted equity value calculated using shares outstanding sourced from the 10-Q,10-K, or any other filing that would disclose shares outstanding prior to the offer announcement date and options outstanding that are in-the-money sourced from the 10-K prior to the offer announcement date. Equity value represents the total equity value of the company at offer announcement date. Enterprise value calculated using same method described in note 2 for the equity value and sourcing cash, short-term investments, debt, minority interest, preferred stock from the 10-Q or financial press release prior to the offer announcement date. The cash proceeds from the exercise of in-the-money options are used to reduce net debt. Enterprise value represents the total enterprise value of the company at the initial offer price. LTM multiples calculated from latest financials prior to offer announcement date. EBITDA, EBIT, and net income are calculated using a normalized figure. Premiums are based on the average closing stock price over the specified time interval. Buckeye's premium is based on the Unaffected Price. Change in comp store sales is based on the most recent fiscal year as of announcement date. Based on the Company Financials. (in millions, unless otherwise noted) Selected Precedents

EX-99.C.4

Exhibit (c)(4)

Presentation to The Board of Directors Regarding Project Buckeye Strictly Private and Confidential June 25, 2003

Table of Contents Transaction Overview Background to the Transaction Merger Price Analysis

I. Transaction Overview

Transaction Overview(1) Acquiror: A special purpose acquisition vehicle formed by Goldner Hawn Johnson & Morrison Incorporated with Buckeye management participation ("GHJM") Transaction Structure: Cash merger Tax Treatment: Taxable transaction Merger Price: $6.00 per share in cash Options: Options of non-participating management and other employees to be cashed out Management Agreements: Selected key management personnel to contribute existing shares and options in exchange for equity in the surviving company No-Shop: Standard with fiduciary out Termination Fee: Topping fee of $2 million as well as up to $1 million for documented expenses in certain cases Significant Conditions to Close: Funding provided under existing commitment letters Shareholder approval (662/3%) HSR approval Based upon a review of the draft Agreement and Plan of Merger dated 6/23/03.

II. Background to the Transaction

Early Background to the Transaction Timeline Comments December 14, 1999 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party A executed a confidentiality agreement. February 2000 The board of directors (the "Board") retained an investment bank to pursue strategic alternatives. March - June 2000 The investment bank contacted a broad universe of both potential strategic and financial buyers. July 19, 2000 The Board reviewed Party A's bid of $5.25 per share (the highest bid received from interested parties who had submitted bids to the investment bank in connection with the review of strategic alternatives). August 2000 Party A's bid was rejected by the Board. The Board approved a share repurchase program, in which Buckeye completed the repurchase of 3.5 million shares for $17.7 million at an average price of $5.05 per share. October 2001 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party B executed a confidentiality agreement.

Events Leading to Current Proposal Timeline Comments August 9, 2002 Party B proposed $3.50 per share. August 19, 2002 RBC Dain Rauscher Inc., a member company of RBC Capital Markets ("RBC"), was hired by the Board. Party B executed a new confidentiality agreement. September 3, 2002 Party B proposed $4.50 per share. November 20, 2002 Party B (with different advisors) proposed $4.00 per share. February 3, 2003 In response to an unsolicited expression of interest and ensuing preliminary discussions, Party C executed a confidentiality agreement. March 13, 2003 Party B (again with different advisors) proposed $4.50 per share. March 24, 2003 GHJM executed a confidentiality agreement. April 8, 2003 Party C proposed $3.50 per share. May 7, 2003 Party C proposed $4.60 per share. May 9, 2003 GHJM proposed $4.75 per share. GHJM and Party C were invited to submit best and final proposals. May 12, 2003 GHJM proposed $6.00 per share, which was superior to Party C's revised bid. May 16, 2003 Exclusivity letter agreement was signed by Buckeye with GHJM.

III. Merger Price Analysis

Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 2/1/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM 2003E 2004E 2005E 2006E 2007E Summary Data Number of stores (ending) 64 68 68 68 69 72 74 77 80 Comparable store sales growth (0.8%) (3.5%) (2.4%) (3.5%) 0.0% 1.0% 1.0% 1.0% 1.0% Sales per square foot(2) $123 $119 $117 $117 $119 $120 $122 $124 $126 Income Statement Revenue $675,209 $661,170 $657,667 $647,471 $657,111 $678,166 $705,491 $733,648 $766,663 % Growth (2.1%) (0.5%) (2.3%) (0.1%) 3.2% 4.0% 4.0% 4.5% Gross profit $243,299 $231,830 $228,848 $226,345 $229,737 $237,877 $249,470 $259,575 $271,424 % Margin 36.0% 35.1% 34.8% 35.0% 35.0% 35.1% 35.4% 35.4% 35.4% EBITDA $42,321 $39,736 $40,402 $39,529 $40,810 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.2% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,635 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 3.4% 3.6% 4.0% 4.2% 4.3% Net income $7,227 $3,819 $5,242 $4,958 $6,452 $9,950 $12,197 $13,422 $14,062 % Margin 1.1% 0.6% 0.8% 0.8% 1.0% 1.5% 1.7% 1.8% 1.8% Balance Sheet Cash and cash equivalents $7,878 $7,142 $9,735 $7,345 $7,500 $7,575 $7,550 $7,650 $7,625 Net debt $159,263 $146,878 $110,848 $110,099 $94,500 $78,325 $65,150 $49,350 $38,675 Shareholders' equity $222,000 $217,210 $206,700 $205,077 $215,600 $225,600 $237,800 $251,200 $265,300 Ratios Inventory turnover 2.7x 2.8x 3.0x 2.8x 3.1x 3.3x 3.4x 3.4x 3.4x Accounts receivable days 74.4 72.6 70.7 68.8 70.4 69.3 69.0 69.1 68.9 Accounts payable days 29.9 30.7 33.9 38.8 33.3 30.8 30.1 30.1 30.0 Net debt/net capitalization 41.8% 40.3% 34.9% 34.9% 30.5% 25.8% 21.5% 16.4% 12.7% EBITDA/interest expense 3.0x 2.8x 3.3x 3.3x 3.5x 5.5x 5.5x 5.3x 5.1x Total debt/EBITDA 3.9x 3.9x 3.0x 3.0x 2.5x 2.0x 1.6x 1.2x 0.9x The normalized historical and forecast financial information contained on this page has been provided by the Company's management (the "Company Financials"). "Normalized" reflects adjustments by the Company's management to eliminate extraordinary and non-recurring items. In preparing its fairness analysis, RBC has relied, without independent investigation, upon the advice received by RBC from the Company that the Company Financials were prepared by the Company's management in good faith and in the ordinary course of business for use by the Company and were based on both (i) adjustments, consistent with the Company's financial books and records, to eliminate extraordinary and non-recurring items, and (ii) in the case of the forward-looking Company Financials, the best currently available estimates of the Company's future financial performance, which, in both cases management believed reasonable at the time of their preparation and RBC's use thereof in connection with its fairness analysis. The Company has also advised RBC that such use has been authorized by the Company's Board of Directors. In addition, RBC has assumed that the Company will perform substantially in accordance with the forward-looking Company Financials. RBC acknowledges that the Company has further advised RBC that actual results for the periods covered by the forward-looking Company Financials may differ materially from the results forecasted therein and that the Company has referred RBC to the Company's Report on Form 10-K for the fiscal year ended February 1, 2003 for an identification of certain factors that could materially affect its future operations and results. Represents sales per gross square foot. Financial Performance (in thousands, unless otherwise noted)

Merger Price Analysis Methodologies Premium Paid Analysis Analyzed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts). Discounted Cash Flow Analysis Analyzed present value of projected unlevered after-tax free cash flows of Buckeye, based on the Company Financials, utilizing a range of weighted average costs of capital and terminal EBITDA exit multiples. Comparable Company Analysis Analyzed current public market trading values of comparable companies. Precedent Transaction Analysis Analyzed multiples paid on selected acquisition transactions.

Implied Multiples (in millions, unless otherwise noted) Purchase Price per Share Unaffected Price(2) Merger Price Variable(1) $3.19 $6.00 Equity value(3) $38.2 $79.2 Enterprise value(4) $148.3 $185.2 Enterprise value multiples: LTM revenue $647.5 0.23x 0.29x 2003E revenue $657.1 0.23x 0.28x 2004E revenue $678.2 0.22x 0.27x 2005E revenue $705.5 0.21x 0.26x LTM EBITDA $39.5 3.8x 4.7x 2003E EBITDA $40.8 3.6x 4.5x 2004E EBITDA $42.1 3.5x 4.4x 2005E EBITDA $46.2 3.2x 4.0x LTM EBIT $20.9 7.1x 8.9x 2003E EBIT $22.6 6.6x 8.2x 2004E EBIT $24.3 6.1x 7.6x 2005E EBIT $28.2 5.3x 6.6x Equity value multiples: LTM EPS $0.44 7.3x 13.8x 2003E EPS $0.57 5.6x 10.6x 2004E EPS $0.87 3.6x 6.9x 2005E EPS $1.07 3.0x 5.6x Based on the Company Financials as of 5/3/03. The ("Unaffected Price") is Buckeye's closing stock price on 5/13/03, the date on which the two competing final proposals were considered by the Executive Committee of the Board, which decided to recommend the GHJM proposal to the Board for exclusive negotiation. Board approval of exclusive negotiations was issued on 5/14/03. Equity value is based on the Treasury Stock Method ("TSM") shares outstanding for the Unaffected Price. All other purchase price per share equity values are based on fully diluted shares outstanding. Enterprise value is based on net debt outstanding at 5/3/03. Debt is adjusted for cash balances and cash proceeds from options at the range of purchase prices per share and not at the Unaffected Price.

Market Trading Performance(1) Stock Volume Date Price (000's) 5/13/2003 3.19 41,000 Buckeye Historical Trading 5/12/2003 3.08 60,800 Min Mean Median Max 5/9/2003 3.05 19,300 LTM Period $1.56 $2.49 $2.50 $3.50 5/8/2003 2.79 7,300 Since 1/1/01 $1.56 $2.91 $2.99 $4.38 5/7/2003 2.75 5,400 5/6/2003 2.94 15,200 Unaffected Price: $3.19 5/5/2003 2.97 13,500 5/2/2003 3.05 26,600 5/1/2003 3.24 19,400 4/30/2003 3.06 10,100 4/29/2003 2.99 1,400 4/28/2003 3.04 8,100 4/25/2003 2.92 6,700 4/24/2003 2.94 16,700 4/23/2003 2.84 24,600 4/22/2003 2.55 3,800 4/21/2003 2.38 2,100 4/17/2003 2.58 237,200 4/16/2003 2.51 - 4/15/2003 2.47 20,000 4/14/2003 2.54 71,600 4/11/2003 2.55 1,000 4/10/2003 2.49 57,200 4/9/2003 2.45 1,300 4/8/2003 2.60 5,000 4/7/2003 2.45 1,000 4/4/2003 2.59 5,000 4/3/2003 2.51 10,100 4/2/2003 2.50 57,600 4/1/2003 2.50 64,500 3/31/2003 2.40 1,600 3/28/2003 2.50 4,800 3/27/2003 2.12 8,376 3/26/2003 2.51 3,000 3/25/2003 2.48 9,000 3/24/2003 2.48 34,300 3/21/2003 2.41 200 3/20/2003 2.50 17,500 3/19/2003 2.35 800 3/18/2003 2.37 3,700 3/17/2003 2.24 1,200 3/14/2003 2.18 2,600 3/13/2003 2.32 1,000 3/12/2003 2.30 300 3/11/2003 2.34 1,300 3/10/2003 2.36 1,700 3/7/2003 2.54 15,800 3/6/2003 2.10 7,300 3/5/2003 2.74 10,200 3/4/2003 2.76 11,400 3/3/2003 2.51 600 2/28/2003 2.49 2,597 2/27/2003 2.18 11,603 2/26/2003 2.23 - 2/25/2003 2.24 5,000 2/24/2003 2.30 7,600 2/21/2003 2.45 2,400 2/20/2003 2.43 1,700 2/19/2003 2.49 100 2/18/2003 2.49 400 2/14/2003 2.55 4,700 2/13/2003 2.60 4,200 2/12/2003 2.57 2,500 2/11/2003 2.70 16,200 2/10/2003 2.79 1,900 2/7/2003 2.48 7,900 2/6/2003 2.48 43,197 2/5/2003 2.78 29,200 2/4/2003 2.80 4,000 2/3/2003 2.80 5,200 1/31/2003 2.61 3,703 1/30/2003 2.72 500 1/29/2003 2.78 - 1/28/2003 2.80 5,000 1/27/2003 2.69 400 1/24/2003 2.43 11,700 1/23/2003 2.85 7,400 1/22/2003 3.00 33,300 1/21/2003 2.79 27,500 1/17/2003 2.21 19,600 1/16/2003 2.00 9,200 1/15/2003 1.90 1,000 1/14/2003 1.98 1,500 1/13/2003 1.78 3,600 1/10/2003 1.78 11,900 1/9/2003 1.87 1,600 1/8/2003 1.84 - 1/7/2003 1.99 3,300 1/6/2003 1.82 4,100 1/3/2003 1.56 4,000 1/2/2003 1.62 24,000 12/31/2002 1.80 30,100 12/30/2002 1.80 6,300 12/27/2002 1.84 7,900 12/26/2002 1.91 1,200 12/24/2002 1.83 600 12/23/2002 2.04 4,300 12/20/2002 1.82 11,200 12/19/2002 1.77 14,100 12/18/2002 1.90 2,900 12/17/2002 1.84 20,100 12/16/2002 1.99 2,400 12/13/2002 2.00 4,100 12/12/2002 2.15 16,100 12/11/2002 2.04 16,000 12/10/2002 1.91 4,500 12/9/2002 2.05 19,700 12/6/2002 1.90 10,200 12/5/2002 2.05 2,000 12/4/2002 2.07 9,500 12/3/2002 2.05 9,200 12/2/2002 1.88 8,100 11/29/2002 1.73 2,400 11/27/2002 1.70 28,200 11/26/2002 1.81 12,200 11/25/2002 1.79 5,100 11/22/2002 1.91 3,800 11/21/2002 2.20 7,800 11/20/2002 2.00 1,900 11/19/2002 1.80 3,700 11/18/2002 1.81 3,500 11/15/2002 1.93 500 11/14/2002 1.80 5,400 11/13/2002 1.93 300 11/12/2002 1.92 1,800 11/11/2002 1.92 1,200 11/8/2002 1.91 1,700 11/7/2002 1.92 600 11/6/2002 1.99 1,900 11/5/2002 1.96 - 11/4/2002 1.96 - 11/1/2002 1.96 3,800 10/31/2002 1.98 6,400 10/30/2002 2.05 4,100 10/29/2002 2.05 1,700 10/28/2002 2.05 8,985 10/25/2002 2.32 - 10/24/2002 2.13 1,200 10/23/2002 2.11 - 10/22/2002 2.17 8,600 10/21/2002 1.91 8,500 10/18/2002 1.90 - 10/17/2002 1.88 - 10/16/2002 1.86 2,000 10/15/2002 1.97 6,300 10/14/2002 1.89 - 10/11/2002 1.89 3,300 10/10/2002 1.89 - 10/9/2002 1.82 1,500 10/8/2002 1.80 5,900 10/7/2002 1.85 3,300 10/4/2002 2.00 23,600 10/3/2002 1.90 6,200 10/2/2002 2.00 28,100 10/1/2002 1.90 76,200 9/30/2002 2.21 22,600 9/27/2002 2.15 8,400 9/26/2002 2.35 2,600 9/25/2002 2.34 600 9/24/2002 2.45 200 9/23/2002 2.42 1,000 9/20/2002 2.45 2,100 9/19/2002 2.50 8,900 9/18/2002 2.45 - 9/17/2002 2.35 27,300 9/16/2002 2.55 2,600 9/13/2002 2.65 1,600 9/12/2002 2.56 1,300 9/11/2002 2.60 1,900 9/10/2002 2.62 - 9/9/2002 2.60 1,000 9/6/2002 2.55 4,900 9/5/2002 2.70 1,900 9/4/2002 2.74 1,100 9/3/2002 2.31 4,800 8/30/2002 2.80 600 8/29/2002 2.70 20,300 8/28/2002 2.89 900 8/27/2002 2.51 400 8/26/2002 2.78 8,000 8/23/2002 2.72 2,400 8/22/2002 2.81 7,300 8/21/2002 2.50 1,600 8/20/2002 2.83 200 8/19/2002 2.37 1,100 8/16/2002 2.54 4,000 8/15/2002 2.64 2,300 8/14/2002 2.39 6,000 8/13/2002 2.35 500 8/12/2002 2.50 9,500 8/9/2002 2.75 2,000 8/8/2002 2.60 4,700 8/7/2002 2.46 4,200 8/6/2002 2.46 25,300 8/5/2002 2.80 3,700 8/2/2002 2.80 1,100 8/1/2002 2.88 4,700 7/31/2002 2.75 4,100 7/30/2002 2.84 100 7/29/2002 2.43 1,500 7/26/2002 2.73 1,000 7/25/2002 2.45 1,300 7/24/2002 2.08 22,600 7/23/2002 2.55 27,300 7/22/2002 2.80 30,882 7/19/2002 2.75 1,200 7/18/2002 3.00 25,900 7/17/2002 2.38 400 7/16/2002 2.70 15,200 7/15/2002 2.77 13,600 7/12/2002 2.70 70,200 7/11/2002 2.97 7,400 7/10/2002 3.05 40,800 7/9/2002 3.20 1,900 7/8/2002 3.16 100 7/5/2002 3.20 1,000 7/3/2002 3.10 11,400 7/2/2002 3.13 18,900 7/1/2002 3.13 4,900 6/28/2002 3.10 15,800 6/27/2002 3.18 - 6/26/2002 3.10 12,700 6/25/2002 3.18 9,200 6/24/2002 3.10 8,900 6/21/2002 3.14 2,100 6/20/2002 3.09 78,800 6/19/2002 3.10 3,900 6/18/2002 3.15 17,700 6/17/2002 3.10 20,100 6/14/2002 3.16 600 6/13/2002 3.18 - 6/12/2002 3.16 13,600 6/11/2002 3.15 1,100 6/10/2002 3.28 - 6/7/2002 3.15 7,400 6/6/2002 3.09 700 6/5/2002 3.09 2,000 6/4/2002 3.10 2,400 6/3/2002 3.40 6,800 5/31/2002 2.98 7,900 5/30/2002 3.22 1,700 5/29/2002 3.16 14,300 5/28/2002 3.50 4,000 5/24/2002 2.96 7,900 5/23/2002 3.50 14,900 5/22/2002 3.30 2,100 5/21/2002 3.30 3,000 5/20/2002 3.32 200 5/17/2002 3.35 100 5/16/2002 3.30 7,700 5/15/2002 3.30 3,300 5/14/2002 3.50 1,500 5/13/2002 3.35 300 5/10/2002 3.50 2,200 5/9/2002 3.34 400 5/8/2002 3.30 1,400 5/7/2002 3.17 1,200 5/6/2002 3.15 3,100 5/3/2002 3.36 3,200 5/2/2002 3.50 4,200 5/1/2002 3.35 26,200 4/30/2002 3.15 12,900 4/29/2002 3.21 100 4/26/2002 3.18 7,200 4/25/2002 3.40 4,900 4/24/2002 3.50 1,100 4/23/2002 3.18 17,400 4/22/2002 3.40 67,500 4/19/2002 3.50 10,000 4/18/2002 3.25 9,600 4/17/2002 3.05 3,600 4/16/2002 3.16 12,500 4/15/2002 2.95 3,200 4/12/2002 2.90 900 4/11/2002 2.70 3,600 4/10/2002 2.65 21,800 4/9/2002 2.65 17,400 4/8/2002 2.70 35,900 4/5/2002 2.74 17,800 4/4/2002 2.60 13,300 4/3/2002 2.65 24,900 4/2/2002 2.75 15,900 4/1/2002 2.75 9,200 3/28/2002 2.60 33,900 3/27/2002 2.65 36,900 3/26/2002 2.70 17,700 3/25/2002 2.45 31,000 3/22/2002 2.60 15,400 3/21/2002 2.59 800 3/20/2002 2.60 23,400 3/19/2002 2.70 17,900 3/18/2002 2.45 16,000 3/15/2002 2.25 2,000 3/14/2002 2.79 900 3/13/2002 2.65 200 3/12/2002 2.75 6,300 3/11/2002 2.75 1,700 3/8/2002 2.60 13,200 3/7/2002 2.59 12,700 3/6/2002 2.50 16,500 3/5/2002 2.45 1,700 3/4/2002 2.45 24,300 3/1/2002 2.63 1,000 2/28/2002 2.63 4,400 2/27/2002 2.56 8,200 2/26/2002 2.05 6,400 2/25/2002 2.22 - 2/22/2002 2.29 9,300 2/21/2002 2.35 19,500 2/20/2002 2.40 6,800 2/19/2002 2.45 16,800 2/15/2002 2.35 3,100 2/14/2002 2.25 7,900 2/13/2002 2.41 10,900 2/12/2002 2.45 5,700 2/11/2002 2.60 300 2/8/2002 2.55 16,300 2/7/2002 2.65 13,100 2/6/2002 2.65 16,900 2/5/2002 2.83 200 2/4/2002 2.65 2,000 2/1/2002 2.70 39,600 1/31/2002 2.80 11,100 1/30/2002 2.70 122,000 1/29/2002 2.85 48,400 1/28/2002 2.80 21,000 1/25/2002 3.17 21,200 1/24/2002 2.89 47,500 1/23/2002 2.85 4,300 1/22/2002 2.80 900 1/18/2002 2.79 - 1/17/2002 2.82 10,900 1/16/2002 2.89 16,100 1/15/2002 2.85 - 1/14/2002 2.73 3,000 1/11/2002 2.94 - 1/10/2002 2.90 43,300 1/9/2002 2.91 2,900 1/8/2002 2.91 40,400 1/7/2002 3.05 1,200 1/4/2002 3.05 5,000 1/3/2002 3.15 18,900 1/2/2002 2.81 4,600 12/31/2001 2.94 52,100 12/28/2001 2.65 14,200 12/27/2001 2.90 30,600 12/26/2001 3.00 10,600 12/24/2001 2.96 400 12/21/2001 3.00 14,000 12/20/2001 3.01 4,100 12/19/2001 3.10 65,100 12/18/2001 3.13 13,700 12/17/2001 3.00 17,500 12/14/2001 3.00 8,600 12/13/2001 3.05 7,100 12/12/2001 3.00 4,100 12/11/2001 2.97 54,400 12/10/2001 2.95 4,300 12/7/2001 3.00 3,500 12/6/2001 3.00 2,500 12/5/2001 3.00 12,100 12/4/2001 3.00 52,400 12/3/2001 2.95 32,600 11/30/2001 2.95 18,500 11/29/2001 2.95 88,700 11/28/2001 3.00 100 11/27/2001 2.98 7,200 11/26/2001 2.98 22,400 11/23/2001 3.00 3,100 11/21/2001 2.95 25,700 11/20/2001 2.96 1,500 11/19/2001 2.96 1,900 11/16/2001 3.00 115,600 11/15/2001 3.00 5,600 11/14/2001 3.00 4,500 11/13/2001 3.05 3,100 11/12/2001 2.61 4,300 11/9/2001 3.00 200 11/8/2001 3.00 16,000 11/7/2001 3.00 200 11/6/2001 2.85 2,600 11/5/2001 2.94 6,800 11/2/2001 3.00 3,400 11/1/2001 2.80 7,000 10/31/2001 2.96 6,000 10/30/2001 3.05 44,500 10/29/2001 3.08 1,342,300 10/26/2001 3.13 5,800 10/25/2001 3.13 16,200 10/24/2001 3.11 16,400 10/23/2001 3.17 7,500 10/22/2001 3.12 4,900 10/19/2001 3.02 15,200 10/18/2001 3.40 1,300 10/17/2001 3.08 30,000 10/16/2001 3.13 30,000 10/15/2001 3.35 2,100 10/12/2001 3.30 30,600 10/11/2001 3.07 5,600 10/10/2001 3.09 1,000 10/9/2001 3.15 106,200 10/8/2001 3.36 5,200 10/5/2001 3.40 26,800 10/4/2001 3.41 13,900 10/3/2001 3.40 201,400 10/2/2001 3.60 9,400 10/1/2001 3.50 5,100 9/28/2001 3.55 8,000 9/27/2001 3.50 30,000 9/26/2001 3.54 7,000 9/25/2001 3.57 13,200 9/24/2001 3.55 33,000 9/21/2001 3.51 24,300 9/20/2001 3.82 28,600 9/19/2001 3.85 38,300 9/18/2001 3.76 11,300 9/17/2001 3.90 58,300 9/10/2001 4.05 22,200 9/7/2001 3.95 2,900 9/6/2001 3.99 11,900 9/5/2001 4.38 105,400 9/4/2001 4.00 21,900 8/31/2001 3.95 7,600 8/30/2001 4.00 21,400 8/29/2001 3.97 2,000 8/28/2001 4.02 8,900 8/27/2001 4.04 11,200 8/24/2001 4.00 - 8/23/2001 4.04 33,200 8/22/2001 3.98 4,300 8/21/2001 4.00 11,900 8/20/2001 3.98 12,600 8/17/2001 4.00 1,500 8/16/2001 3.96 14,800 8/15/2001 4.00 3,300 8/14/2001 3.93 7,800 8/13/2001 4.00 600 8/10/2001 3.80 2,800 8/9/2001 3.79 27,600 8/8/2001 3.95 1,000 8/7/2001 3.95 1,500 8/6/2001 3.95 10,700 8/3/2001 3.95 100 8/2/2001 3.95 1,600 8/1/2001 3.95 4,200 7/31/2001 3.90 10,800 7/30/2001 3.95 300 7/27/2001 4.00 1,900 7/26/2001 4.00 500 7/25/2001 3.95 12,400 7/24/2001 3.97 5,000 7/23/2001 4.00 1,800 7/20/2001 4.00 3,800 7/19/2001 4.00 1,000 7/18/2001 3.95 8,600 7/17/2001 3.90 1,800 7/16/2001 3.97 700 7/13/2001 3.97 1,000 7/12/2001 3.95 3,200 7/11/2001 3.80 1,900 7/10/2001 3.81 700 7/9/2001 3.80 17,100 7/6/2001 3.77 7,300 7/5/2001 3.50 19,800 7/3/2001 3.75 600 7/2/2001 3.77 5,100 6/29/2001 3.75 6,700 6/28/2001 3.77 39,800 6/27/2001 3.78 48,600 6/26/2001 3.73 11,300 6/25/2001 3.76 4,800 6/22/2001 3.76 600 6/21/2001 3.75 1,100 6/20/2001 3.76 4,600 6/19/2001 3.75 7,400 6/18/2001 3.75 7,400 6/15/2001 3.71 15,100 6/14/2001 3.80 6,300 6/13/2001 3.75 2,300 6/12/2001 3.80 700 6/11/2001 3.70 12,800 6/8/2001 3.85 11,100 6/7/2001 3.55 22,400 6/6/2001 3.54 7,500 6/5/2001 3.40 1,400 6/4/2001 3.38 1,500 6/1/2001 3.35 4,800 5/31/2001 3.15 600 5/30/2001 3.16 6,500 5/29/2001 3.60 8,100 5/25/2001 3.50 4,700 5/24/2001 3.25 3,600 5/23/2001 3.19 185,200 5/22/2001 3.05 11,200 5/21/2001 3.15 600 5/18/2001 3.20 200 5/17/2001 3.20 1,000 5/16/2001 3.13 300 5/15/2001 3.24 10,200 5/14/2001 3.15 2,300 5/11/2001 3.07 100 5/10/2001 3.07 3,300 5/9/2001 3.15 600 5/8/2001 3.10 200 5/7/2001 3.10 1,800 5/4/2001 3.10 5,800 5/3/2001 3.07 1,500 5/2/2001 3.06 4,600 5/1/2001 3.05 300 4/30/2001 3.06 400 4/27/2001 3.06 6,100 4/26/2001 3.10 900 4/25/2001 3.10 500 4/24/2001 3.10 6,600 4/23/2001 3.10 2,600 4/20/2001 3.06 2,400 4/19/2001 3.10 15,200 4/18/2001 3.10 53,200 4/17/2001 3.02 900 4/16/2001 3.10 400 4/12/2001 3.10 14,900 4/11/2001 3.25 14,700 4/10/2001 3.22 20,300 4/9/2001 3.50 800 4/6/2001 3.50 12,800 4/5/2001 3.50 6,600 4/4/2001 3.00 3,800 4/3/2001 3.00 6,100 4/2/2001 3.38 3,000 3/30/2001 3.63 13,500 3/29/2001 3.53 800 3/28/2001 3.50 7,800 3/27/2001 3.50 22,800 3/26/2001 3.63 18,100 3/23/2001 3.25 13,500 3/22/2001 3.13 48,800 3/21/2001 3.25 11,600 3/20/2001 3.13 13,300 3/19/2001 3.13 2,200 3/16/2001 3.13 2,100 3/15/2001 3.13 700 3/14/2001 3.13 1,200 3/13/2001 3.34 29,200 3/12/2001 3.56 900 3/9/2001 3.50 8,900 3/8/2001 3.39 100 3/7/2001 3.63 1,100 3/6/2001 3.50 6,300 3/5/2001 3.31 7,300 3/2/2001 3.38 1,300 3/1/2001 3.38 50,400 2/28/2001 3.53 - 2/27/2001 3.50 8,300 2/26/2001 3.63 1,800 2/23/2001 3.63 29,600 2/22/2001 3.25 8,300 2/21/2001 3.25 28,000 2/20/2001 3.25 28,500 2/16/2001 3.00 3,300 2/15/2001 2.81 400 2/14/2001 2.88 1,200 2/13/2001 2.88 14,100 2/12/2001 2.94 19,000 2/9/2001 2.88 6,100 2/8/2001 3.00 700 2/7/2001 3.00 12,200 2/6/2001 3.00 1,300 2/5/2001 3.00 6,900 2/2/2001 3.00 12,000 2/1/2001 3.00 9,000 1/31/2001 3.06 12,400 1/30/2001 3.09 6,300 1/29/2001 3.00 79,300 1/26/2001 3.00 2,400 1/25/2001 3.25 6,100 1/24/2001 3.31 - 1/23/2001 3.31 10,100 1/22/2001 3.09 500 1/19/2001 3.25 4,700 1/18/2001 3.25 3,400 1/17/2001 3.25 600 1/16/2001 3.38 9,100 1/12/2001 3.38 1,100 1/11/2001 3.31 400 1/10/2001 3.25 1,900 1/9/2001 3.38 200 1/8/2001 3.38 4,700 1/5/2001 3.38 1,300 1/4/2001 3.44 22,100 1/3/2001 3.25 13,300 1/2/2001 3.00 16,600 Source: Factset. Includes only market trading days leading up to the date of the Unaffected Price. From January 1, 2001 to Date of Unaffected Price

Premium Paid Analysis Methodology Based on acquisitions of broad line department store retailers and moderate-priced specialty softline retail companies that are similar to Buckeye (the "Selected Precedents"). Analyzed the premiums paid on the Selected Precedents where the target was publicly traded prior to the transaction. Premium selection Reviewed 1-day prior, 30-day, 60-day, and 90-day trailing average take-out premiums / (discounts).

Premium Paid Analysis Summary Announcement Target Target Premium Paid(2) Target Acquiror Date Equity Value Enterprise Value 1-Day 30-Day 60-Day 90-Day Catherine's Stores Corp. Charming Shoppes Inc. 11/15/99 $162.0 $149.8 69.7% 59.9% 58.0% 57.7% Zions Cooperative Merc. Inst. May Departemtent Stores Co. 10/15/99 $52.4 $116.0 2.3% 32.4% 44.1% 47.9% Pamida Holdings Corp. ShopKo Stores Inc. 5/11/99 $109.6 $344.3 39.4% 120.4% 153.4% 168.2% K&G Men's Center Inc. Men's Wearhouse Inc. 3/4/99 $115.5 $98.6 32.6% 38.4% 31.1% 28.2% Hills Stores Co. Ames Department Stores Inc. 11/12/98 $16.9 $396.3 14.3% (6.6%) (20.7%) (45.9%) Min 2.3% (6.6%) (20.7%) (45.9%) Median 32.6% 38.4% 44.1% 47.9% Mean 31.6% 48.9% 53.2% 51.2% Max 69.7% 120.4% 153.4% 168.2% Buckeye @ Merger Price - $6.00 per share(3) $79.2 $185.2 94.8% 120.3% 134.2% 140.3% Based on the Selected Precedents where the target was publicly traded prior to the transaction. Premiums are calculated to the target's average closing stock price for the specified period from the day before announcement. Buckeye's premiums are calculated as of the date of the Unaffected Price. (in millions, unless otherwise noted) Selected Precedents(1)

Discounted Cash Flow Analysis Methodology Analyzed the present value of the projected after-tax cash flows of Buckeye (EBITDA less cash taxes on EBIT, capital expenditures, and increases in working capital) through 2007E at a range of discount rates and terminal value EBITDA multiples. Projected after-tax cash flows of Buckeye are based on the Company Financials. Weighted average cost of capital ("WACC") Cost of equity is based on the modified capital asset pricing model ("CAPM") method with beta, market risk premium, and size premium information sourced from Ibbotson Associates 2003 Yearbook. Cost of debt is based on the estimated spread over the 10-year Treasury as determined by RBC. Terminal value Terminal value is calculated using the terminal EBITDA multiple method, whereby an EBITDA multiple is applied to Buckeye's 2007E EBITDA. Terminal EBITDA multiple range is consistent with trading multiples for comparable regional department store companies referred to in the comparable company analysis.

Discounted Cash Flow Analysis Summary Equity Value per Share: Equity value per share: Terminal EBITDA Multiple 4.0x 4.5x 5.0x 5.5x 6.0x 17.0% $5.09 $6.07 $7.04 $8.02 $8.99 18.0% $4.74 $5.68 $6.62 $7.56 $8.50 WACC 19.0% $4.40 $5.31 $6.22 $7.12 $8.03 20.0% $4.07 $4.95 $5.83 $6.70 $7.58 21.0% $3.75 $4.61 $5.45 $6.30 $7.15

Discounted Cash Flow Analysis Detail Normalized Historical Results(1) Management Forecast(1) Fiscal Year Ended, Fiscal Year Ended, 2/1/01 2/1/02 2/1/03 5/3/03 5/03 - 2/04 2/1/05 2/1/06 2/1/07 2/1/08 2000A 2001A 2002A LTM Q2/03E - Q4/03E 2004E 2005E 2006E 2007E 3/31/2003 3/31/2004 3/31/2005 3/31/2006 3/31/2007 Revenue $675,209 $661,170 $657,667 $647,471 $522,512 $678,166 $705,491 $733,648 $766,663 % Growth 2.6% (2.1%) (0.5%) (2.3%) 1.9% 3.2% 4.0% 4.0% 4.5% EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 % Margin 6.3% 6.0% 6.1% 6.1% 6.9% 6.2% 6.5% 6.5% 6.6% EBIT $26,121 $20,279 $21,080 $20,857 $22,740 $24,319 $28,201 $31,088 $32,942 % Margin 3.9% 3.1% 3.2% 3.2% 4.4% 3.6% 4.0% 4.2% 4.3% Unlevered free cash flow EBITDA $42,321 $39,736 $40,402 $39,529 $36,174 $42,097 $46,206 $47,755 $50,276 Less: cash taxes NA NA NA NA $227 $292 $9,787 $10,826 $11,494 Less: capital expenditures $23,471 $19,094 $8,336 $9,571 $10,161 $14,000 $12,000 $14,200 $14,000 Less: increase in working capital ($10,754) ($23,163) ($21,941) ($22,041) $2,433 $1,620 $9,887 $8,913 $9,347 Unlevered free cash flow NA NA NA NA $23,353 $26,185 $14,532 $13,816 $15,435 Sensitivity Analysis Weighted average cost of capital 17.0% 19.0% 21.0% PV of free cash flow $69,958 $67,990 $66,140 PV of terminal value(2) $128,985 $120,021 $111,813 Enterprise value $198,943 $188,011 $177,953 Less: debt $117,444 $117,444 $117,444 Add: cash $7,345 $7,345 $7,345 Add: cash from stock options $4,358 $4,184 $4,089 Less: net debt(3) $105,741 $105,915 $106,010 Equity value $93,202 $82,097 $71,943 Shares outstanding(4) 13,233 13,207 13,191 Equity value per share $7.04 $6.22 $5.45 Based on the Company Financials. Based on terminal EBITDA multiple of 5.0x. Net debt is at 5/3/03. Fully diluted shares outstanding at corresponding equity value. (in thousands, unless otherwise noted)

Weighted Average Cost of Capital Calculation Raw Levered Net Market Net Debt / Unlevered Assumed Capital Structure Regional Department Stores Beta(1) Beta(2) Debt Value Mkt. Equity(3) Beta(4) Debt 35.0% Bon-Ton Stores Inc. 0.67 0.78 $65.9 $76.1 86.6% 0.50 Equity 65.0% Gottschalks Inc. 0.80 0.87 $121.3 $26.1 464.6% 0.22 Stein Mart Inc. 1.11 1.07 $39.2 $247.9 15.8% 0.97 Debt/Equity Ratio 53.8% Value City Dept. Stores Inc. 1.87 1.58 $301.9 $78.7 383.8% 0.45 Capital Cost Assumptions and Summary Mean 1.11 1.08 237.7% 0.53 Unlevered Beta (Unadjusted)(5) 1.35 Micro-Cap Beta(5) 1.35 Relevered Beta (Adjusted)(6) 1.82 Equity Risk Premium ("ERP")(7) 9.4% Size Premium ("SP")(8) 3.5% Relevered Beta x (ERP + SP) 23.6% Risk Free Rate (10-Year US Treasury) 3.3% Cost of Equity 26.9% Credit Spread 4.5% Pre-Tax Cost of Debt 7.8% Tax Rate 35.0% WACC Sensitivity Analysis After-Tax Cost of Debt 5.0% Percentage of Debt in Capital Structure 20% 25% 30% 35% 40% 45% 50% Weighted Average Cost of Capital 19.3% 1.31 19.4% 19.2% 19.0% 18.8% 18.6% 18.4% 18.2% 1.32 19.5% 19.3% 19.1% 18.9% 18.7% 18.5% 18.3% 1.33 19.7% 19.5% 19.2% 19.0% 18.8% 18.6% 18.4% 1.34 19.8% 19.6% 19.4% 19.1% 18.9% 18.7% 18.5% 1.35 19.9% 19.7% 19.5% 19.3% 19.0% 18.8% 18.6% 1.36 20.0% 19.8% 19.6% 19.4% 19.1% 18.9% 18.7% 1.37 20.1% 19.9% 19.7% 19.5% 19.3% 19.0% 18.8% 1.38 20.3% 20.0% 19.8% 19.6% 19.4% 19.1% 18.9% 1.39 20.4% 20.2% 19.9% 19.7% 19.5% 19.3% 19.0% Source: Bloomberg. Based on two-year weekly observations. Adjusted such that Beta = (2/3) X (Raw Beta) + (1/3) X 1. Based on current capital structure. BU = BL / ((1+(1-t) X (Net Debt / Mkt Equity)). Source: Ibbotson Associates Cost of Capital 2002 Yearbook. Micro-Cap comprised of the ninth and tenth deciles of the New York Stock Exchange, includes companies with a market capitalization under approximately $215 million. BL = (BU+Risk Premium) X (1+(D/E)(1-t)). Source: Ibbotson Associates 2003 Yearbook. Equity risk premium includes estimated return in excess of riskless rate of the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. Estimated return in excess of riskless rate is estimated by the arithmetic mean total return of the S&P 500 (12.20%) minus the arithmetic mean income return component of 20-year government bonds (5.23%) from 1926 to 2002. Source: Ibbotson Associates 2003 Yearbook. Size premium is return in excess of CAPM equity risk premium for the portfolio of stocks comprised of the ninth and tenth deciles of the New York Stock Exchange. (in millions, unless otherwise noted)

Comparable Company Analysis Methodology Analyzed comparable company trading multiples. No control premium is reflected in the results of the public market trading multiples. Target selection Based on a peer group of regional department store retailers with business models similar to Buckeye. No public company is directly comparable to Buckeye.

Comparable Company Analysis (Cont.)(1) --------------- Enterprise Value Multiples Earnings Number Reported Price @ % of 52W Equity Enterprise LTM Price / Earnings LTM Margins 3-5 year Of Sales per Net Debt / Company 06/24/03 High Value (2) Value Revenue EBITDA EBIT LTM FY 2003E FY 2004E Gross EBITDA Secular(3) Stores(4) Sq. Ft. Net Cap. Bon-Ton Stores Inc. $4.99 94.5% $76.1 $141.9 0.20x 3.0x 5.5x 7.0x 7.4x NA 37.8% 6.6% NA 72 $133 23.9% Gottschalks Inc. $2.04 61.8% $26.1 $147.4 0.21x 5.9x 13.6x NM NA NA 34.8% 3.6% NA 81 $173 54.2% Stein Mart Inc. $5.96 48.4% $247.9 $287.2 0.21x 6.8x 12.4x 22.1x NM 14.9x 24.3% 3.0% 20.0% 265 $184 14.9% Value City Dept. Stores Inc. $2.32 61.9% $78.7 $380.6 0.16x 4.8x 17.4x NM 46.4x 11.6x 37.9% 3.2% 20.0% 116 $224 59.1% Min 0.16x 3.0x 5.5x 7.0x 7.4x 11.6x 24.3% 3.0% 20.0% 72 $133 14.9% Median 0.20x 5.3x 13.0x 14.6x 26.9x 13.3x 36.3% 3.4% 20.0% 99 $179 39.1% Mean 0.19x 5.1x 12.2x 14.6x 26.9x 13.3x 33.7% 4.1% 20.0% 134 $179 38.0% Max 0.21x 6.8x 17.4x 22.1x 46.4x 14.9x 37.9% 6.6% 20.0% 265 $224 59.1% Buckeye @ Unaffected Price (5) $3.19 91.1% $38.2 $148.3 0.23x 3.8x 7.1x 7.3x 5.6x 3.6x 35.0% 6.1% 21.5% 68 $117 34.9% Buckeye @ Merger Price (6) $6.00 171.4% $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 10.6x 6.9x 35.0% 6.1% 21.5% 68 $117 34.1% Source: Company press releases, SEC filings, and Wall Street Research. NA, NM, LTM, and CY are defined as not available, not meaningful, last twelve months, and calendar year, respectively. Based on shares outstanding calculated using the treasury stock method. Source: First Call. Earnings secular growth rates are 3-5 year secular projected growth rates. Buckeye's growth rate is based on the Company Financials for 2003 to 2007 EPS. As of most recent 10K filing. Gottschalks Inc. includes 12 specialty stores. Value City Dept. Stores Inc. excludes DSW and Filene's Basement stores. Buckeye includes 2 furniture stores. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value based on the treasury stock method and the Unaffected Price. Historical results based on actuals as of 5/3/03. Forecast based on the Company Financials. Equity value is based on fully-diluted shares outstanding with net debt and enterprise value adjusted for cash proceeds from stock options. (in millions, unless otherwise noted) Regional Department Stores

Precedent Transaction Analysis Methodology Analyzed the multiples paid on selected acquisition transactions. Multiples paid reflect market conditions at the time of the announcement, potential synergies, and control premiums. Target selection Based on the Selected Precedents. No target is directly comparable to Buckeye.

Precedent Transaction Analysis (Cont.) At Announcement Enterprise Value Price / Premium Change in Reported Date Equity Enterprise LTM Multiples(4)(5) LTM LTM Margin(5) Analysis(6) Revenue Growth Comp Store Sales per Net Debt / Ann.(1) Target Acquiror Value(2) Value(3) Revenues EBITDA EBIT Earnings Gross EBITDA EBIT 30-Day 1-Year 2-Year Sales(7) Sq. Ft. Net Cap. 07/10/01 Lane Bryant Inc. Charming Shoppes Inc. $335.0 $329.2 0.35x 9.1x 18.2x 30.8x 28.4% 3.8% 1.9% NA NA NA 3.0% NA NA 06/19/01 Liberty House Inc. Federated Department Stores Inc. NA $200.0 0.73x NA NA NA NA NA NA NA NA NA NA $231 NA 08/24/00 Thrifty's, Braemar, and NLS American Eagle Outfitters Inc. $74.0 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 11/15/99 Catherine's Stores Corp. Charming Shoppes Inc. $162.0 $149.8 0.50x 4.6x 6.3x 11.9x 32.7% 10.7% 7.8% 59.9% 5.5% 5.8% 8.9% $177 NMF 10/15/99 Zions Cooperative Merc. Inst. May Departemtent Stores Co. $52.4 $116.0 0.49x NMF NMF NMF 30.8% NMF NMF 32.4% (7.0%) (4.0%) (4.0%) NA 65.7% 05/11/99 Pamida Holdings Corp. ShopKo Stores Inc. $109.6 $344.3 0.51x 7.4x 10.3x 23.0x 24.9% 7.0% 4.9% 120.4% 2.3% 3.0% 3.0% $152 125.4% 03/04/99 K&G Men's Center Inc. Men's Wearhouse Inc. $115.5 $98.6 0.75x 9.3x 10.0x 17.1x 23.2% 8.0% 7.5% 38.4% 23.8% 29.9% 11.9% $517 NMF 11/18/98 Moores Retail Group Inc. Men's Wearhouse Inc. $64.8 $121.7 0.91x NA 9.3x 35.6x 37.5% NA 9.8% NA NA NA NA NA 91.7% 11/12/98 Hills Stores Co. Ames Department Stores Inc. $16.9 $396.3 0.22x 5.1x 13.7x NMF 26.0% 4.3% 1.6% (6.6%) (2.0%) (3.2%) (1.5%) NA 64.9% 03/13/98 Shonac Corp. Value City Department Stores Inc. $99.9 $105.7 0.35x 5.7x 6.9x NA 39.8% 6.2% 5.1% NA 20.6% NA NA NA 9.5% Min 0.22x 4.6x 6.3x 11.9x 23.2% 3.8% 1.6% (6.6%) (7.0%) (4.0%) (4.0%) $152 9.5% Median 0.50x 6.6x 10.0x 23.0x 29.6% 6.6% 5.1% 38.4% 3.9% 3.0% 3.0% $204 65.7% Mean 0.53x 6.9x 10.7x 23.7x 30.4% 6.7% 5.5% 48.9% 7.2% 6.3% 3.6% $269 71.4% Max 0.91x 9.3x 18.2x 35.6x 39.8% 10.7% 9.8% 120.4% 23.8% 29.9% 11.9% $517 125.4% Buckeye @ Merger Price - $6.00 per share(8) $79.2 $185.2 0.29x 4.7x 8.9x 13.8x 35.0% 6.1% 3.2% 120.3% (2.3%) (1.9%) (2.4%) $117 34.1% Based on the public announcement date of offer price. Fully diluted equity value calculated using shares outstanding sourced from the 10-Q,10-K, or any other filing that would disclose shares outstanding prior to the offer announcement date and options outstanding that are in-the-money sourced from the 10-K prior to the offer announcement date. Equity value represents the total equity value of the company at offer announcement date. Enterprise value calculated using same method described in note 2 for the equity value and sourcing cash, short-term investments, debt, minority interest, preferred stock from the 10-Q or financial press release prior to the offer announcement date. The cash proceeds from the exercise of in-the-money options are used to reduce net debt. Enterprise value represents the total enterprise value of the company at the initial offer price. LTM multiples calculated from latest financials prior to offer announcement date. EBITDA, EBIT, and net income are calculated using a normalized figure. Premiums are based on the average closing stock price over the specified time interval. Buckeye's premium is based on the Unaffected Price. Change in comp store sales is based on the most recent fiscal year as of announcement date. Based on the Company Financials. (in millions, unless otherwise noted) Selected Precedents