The Right Place: for Our Customers Fourth Quarter $39.36 $31.84 8

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CORPORATE INFORMATION Corporate Stock Listing and Prices: The Bon-Ton Stores, Inc. common stock trades on The Nasdaq Global Select Stock MarketSM under the symbol BONT. As of April 2, 2007, there were 198 shareholders of record of the Company’s common stock and four shareholders of contents record of the Company’s Class A common stock. 2006 ANNUAL REPORT

The quarterly high and low sales prices for 2006 and 2005 are listed below: 1. selected highlights Market Price 2006 High Low 2. letter to our shareholders First Quarter $34.14 $18.88 Second Quarter $29.36 $20.22 Third Quarter $38.60 $24.02 4. the right place: for our customers Fourth Quarter $39.36 $31.84 8. the right place: for our communities

Market Price 2005 High Low 10. the right place: for our investors First Quarter $19.78 $15.41 Second Quarter $21.90 $16.75 12. senior management committee and Third Quarter $23.22 $15.55 board of directors Fourth Quarter $22.73 $17.71 SHAREHOLDER INFORMATION Transfer Agent and Registrar Annual Meeting American Stock Transfer & Trust Company June 19, 2007, 9:00 a.m. Eastern Time 59 Maiden Lane The Bon-Ton Stores, Inc. New York, New York 10038 Corporate Headquarters 1-800-937-5449 2801 E. Market Street Website: www.amstock.com York, PA 17402 Email: [email protected] Independent Registered Public Accounting Firm Corporate Headquarters KPMG LLP 2801 E. Market Street Philadelphia, Pennsylvania York, PA 17402 (717) 757-7660 Investor Relations Website: www.bonton.com The Bon-Ton Stores, Inc. Email: [email protected] PO Box 2821 York, PA 17405 General Counsel Email: [email protected] Wolf, Block, Schorr and Solis-Cohen LLP Philadelphia, Pennsylvania

“Safe Harbor” Statement Statements made in this Annual Report, other than statements of historical information, are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve the Company’s current beliefs with respect to current and future events and financial performance. Such forward-looking statements are subject to risks and uncertainties that may cause results to differ materially from those set forth in these statements. Factors that could cause such differences include, but are not limited to, risks related to retail businesses generally, additional competition from existing and new competitors, uncertainties associated with opening new stores or expanding or remodeling existing stores, risks related to the Company’s integration of the business and operations comprising the recently-acquired Carson’s and Parisian stores, the ability to attract and retain qualified management, the right place the dependence upon key vendor relationships and the ability to obtain financing for working capital, capital expenditures and general corporate purposes. Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1 A of the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed, or to be filed, with the Securities and Exchange Commission. Consequently, forward-looking statements made by the Company in this Annual Report and in other documents are qualified by such factors and readers are cautioned not to place undue reliance on these statements. The Company does not undertake to update or revise any forward-looking statement, except as may be required by law. contents

1. selected highlights

2. letter to our shareholders

4. the right place: for our customers

8. the right place: for our communities

10. the right place: for our investors

12. senior management committee and board of directors financial highlights

$2.78 14.7% 4.3x

$1.57 9.4% 2.6x 9.1% 2.5x $1.33 8.0% $1.24

$0.62 4.6% 1.4x 0.6x

02 03 04 05 2006 02 03 04 05 2006 02 03 04 05 2006 earnings per diluted share return on average equity debt to EBITDA

5.2% $46.9 0.9%

4.5% $26.0 3.9% 3.5% 3.5% $20.6 $20.2

$9.6 -1.2% -1.6% -2.0% -2.7% 02 03 04 05 2006 02 03 04 05 2006 02 03 04 05 2006 income from operations net income comparable store sales (percent to sales) (dollars in millions) (percentage increase/decrease to prior year)

dollars in thousands except per share data 2006 2005 2004 2003 2002 financial results (1) (2) (3)

net sales $3,362,279 $1,287,170 $1,310,372 $926,409 $713,230 comparable store sales change(4) -2.7% -1.6% 0.9% -2.0% -1.2% income from operations 173,667 50,195 45,479 42,010 24,805 net income 46,883 26,014 20,162 20,601 9,605 earnings per diluted share $2.78 $1.57 $1.24 $1.33 $0.62

other financial data (3)

total assets $2,134,799 $561,343 $646,156 $629,900 $400,817 long-term debt, including capital leases 1,189,625 42,515 178,355 171,716 64,662 shareholders’equity 346,396 292,094 262,557 239,484 212,346 return on average shareholders’equity 14.7% 9.4% 8.0% 9.1% 4.6%

(1) 2006 includes operations of Carson's for the period from March 5, 2006 through February 3, 2007. 2003 includes operations of Elder-Beerman for the period from October 24, 2003 through January 31, 2004. (2) 2006 reflects the 53 weeks ended February 3, 2007. All other periods presented include 52 weeks. (3) Certain prior year balances have been reclassified to conform to the current year presentation. These reclassifications did not impact the Company's net income for any of the years presented. (4) Comparable store sales data reflects stores open for the entire current and prior fiscal year. 2006 comparable store sales data does not include Carson’s stores. 2005 comparable store sales data includes stores of Elder-Beerman.

The Bon-Ton Stores, Inc. operates on a fiscal year, which is the 52 or 53 week period ending on the Saturday nearer January 31 of the following calendar year. References to “2006,”“2005,”and “2004”represent the fiscal 2006 year ended February 3, 2007, fiscal 2005 year ended January 28, 2006 and fiscal 2004 year ended January 29, 2005, respectively. References to “2007”represent the fiscal 2007 year ending February 2, 2008. 1 Kalispell

Havre

Great Falls Missoula

Minot MONTANA Butte NORTH DAKOTA Bemidji Dickinson Virginia Bismarck Billings Fargo Moorhead MINNESOTA Duluth S Fergus Falls Brainerd

Alexandria Aberdeen St. Cloud

Willmar Stillwater SOUTH DAKOTA Watertown Minneapolis/St. Paul (3) Rapid City

WYOMING New Ulm Mankato Rochester

Sioux Falls Albert Lea Austin

Rock Springs

Mason City Cedar Falls Scottsbluff Sioux City Fort Dodge Norfolk IOWA Waterloo Ames NEBRASKA Marshalltown North Platte Des Moines (5) Omaha (2) Grand Island Kearney Hastings Lincoln Ottumwa

Grand Junction

COLORADO BON-TON (70) ELDER-BEERMAN (64) BERGNER’S (13 ) HERBERGER’S (40) BOSTON STORE (9) YOUNKERS (46) CARSON PIRIE SCOTT (27) FURNITURE GALLERIES (8) PARISIAN (2) TOTAL (279) CORPORATE OFFICES: • YORK, PA • MILWAUKEE, WI Strategic business planning and development has taken Bon-Ton from a single millinery shop founded in 1898 to one of the largest regional department store chains in the United States. Our stores reach 30% of America’s households operating under eight nameplates: Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s, Parisian (in the Detroit, Michigan area) and Younkers. Each nameplate has strong regional recognition and a heritage that approaches or exceeds 100 years. Bon-Ton operates 279 stores, including eight furniture stores, which encompass a total of approximately 26 million square feet extending across 23 contiguous states in the Northeast, Midwest and upper Great Plains. We are the hometown store, providing fashion, quality and value in our broad assortment of our national and private brand merchandise. We offer an upscale presentation and high level of service.

uperior Marquette

Massena S. Burlington Rice Lake

WISCONSIN Marinette Sturgeon Bay NEW YORK VT NH Wausau Traverse City Eau Claire Watertown Marshfield Concord Green Bay Queensbury Wisconsin Rapids Plover Appleton MICHIGAN Saratoga Springs Manitowoc Rochester (4) Syracuse Latham Midland Bay City Camillus La Crosse Fond du Lac Sheboygan MA Niagara Falls Lockport Kohler Westfield Beaver Dam Buffalo (5) West Bend Muskegon Port Huron Ithaca Grandville Lansing (2) Madison (2) Milwaukee (5) Johnson City Holland Horseheads CT Howell Lakewood Hamden Janesville Racine Olean Newburgh Beloit Rochester Hills Erie Jackson Dubuque Detroit Warren Scranton Rockford (2) Benton Harbor PENNSYLVANIA Monroe Wilkes-Barre (2) Coldwater Adrian Pennsdale Cedar Rapids (2) Chicago (23) Michigan City Stroudsburg Elkhart Toledo (2) Cranberry Bloomsburg Coralville Sterling De Kalb Sandusky Du Bois Frackville Phillipsburg Davenport Woodmar Bowling Green Selinsgrove Bethlehem (5) Moline Southlake Defiance State College LaSalle/Peru Warsaw Alliance Butler Lewistown Wyomissing Doylestown Muscatine Findlay Brick Wooster Indiana Harrisburg (2) g Galesbur ILLINOIS INDIANA Lima Johnstown Carlisle Lancaster Marion New Philadelphia Greensburg York (3) Peoria (2) Marion NJ West Burlington Kokomo OHIO Washington Chambersburg Hanover Pekin Bloomington St. Clairsville Uniontown Hagerstown Piqua Newark Anderson Muncie Zanesville Lavale Frederick Champaign Danville Springfield Morgantown (2) Richmond Lancaster Martinsburg Quincy Forsyth Indianapolis Dayton (8) MD Springfield Athens Bridgeport Hamilton Parkersburg Mattoon Terre Haute Chillicothe Columbus WEST Hurricane VIRGINIA Ashland Charleston Jasper Barboursville Frankfort Beckley

KENTUCKY Pacudah Dear Fellow Shareholders:

Bon-Ton accomplished a great deal in 2006. $2.78 in 2006 versus $1.57 in the prior year. Current year We are not the same company we were a year ago. earnings include a favorable state tax adjustment of $0.24 On March 6, 2006, we completed the acquisition of the per share, and an unfavorable after-tax adjustment of Northern Department Store Group (“Carson’s”) from $0.09 per share for severance costs incurred in connection Saks Incorporated and started a two-year integration plan. with the closing of the Carson Pirie Scott State Street store. I am pleased to report that our strong performance in The gross margin rate increased 0.9 percentage point to 2006 reflects the success of the first 11 months of that 37.0%, primarily reflecting the weighted mix of Carson’s plan. The strategy behind the plan was a solid one – and Bon-Ton stores in 2006 versus Bon-Ton stores only in the right one. The commitment of all the members 2005. Our selling, general and administrative expense rate of the Bon-Ton team has made our Company the decreased 0.2 percentage point to 31.4% of net sales as right place – for our customers, associates, business we leveraged our increased sales base. Selling, general and partners and investors. administrative expense included the acquired Carson's and Parisian operations and support for the business, We executed to our plan and exceeded our financial goals. including the Transition Services Agreement We succeeded in meeting key milestones throughout with Saks Incorporated and integration costs. EBITDA the year. We: (earnings before interest, income taxes, depreciation and • completed the most difficult phase of the systems amortization) in 2006 was $280.6 million, a 258% increase integration; over the prior year. Our debt to EBITDA ratio was 4.3:1, • rolled out a common merchandise assortment across slightly better than our forecast. Return on average equity all locations, including the new private brand offerings; increased 5.3 percentage points to 14.7%. At year-end, • implemented a common marketing program in the our shares closed at $37.32, up 76% from the prior year’s second half of the year; closing price of $21.18, and on April 2, 2007, our stock • established the Private Brand organization in price closed at $56.97. Milwaukee, which is now an integral part of our merchandise organization; But, we’re not done. We have four key goals for 2007 • established and expanded the Planning and to build upon this foundation and continue to increase Allocation division; profitability and shareholder value: • completed the purchase and integration of four Parisian store locations acquired from Belk, Inc.; and • Continue to monitor the acceptance of the new • announced real estate initiatives which will further our merchandise assortment, including private brands, Company’s profitability. by our customer. By listening to our customer, we can identify opportunities to provide more of what she’s Our accomplishments in 2006 laid the foundation for our asking for; we’ll make the necessary adjustments to continued growth and profitability in 2007 and beyond. ensure the right merchandise at the right location. Our expanded Planning and Allocation organization The financial results of our accomplishments reflect a very will be the major driver of this initiative. This will give us strong performance across our Company. We achieved a competitive advantage and solidify our relationship new records in total sales and earnings. Total sales in 2006 with our customer as the store of choice. increased 161% to $3.4 billion, including $2.1 billion from the Carson’s and Parisian stores. Net income in 2006 increased 80% to $46.9 million from $26.0 million in 2005. We delivered significantly improved earnings per share of

2 • Increase the effectiveness of our marketing and sales In 2007, we anticipate capital expenditures, net of landlord promotion programs. We will continue to monitor contributions, of approximately $106 million. As part of customer reaction to and acceptance of the new our focus on continually improving our store base, we marketing, sales promotions and special events and make have budgeted capital for the expansion and remodel appropriate adjustments. A common marketing calendar of several stores and the opening of two new stores. was implemented in the second half of 2006. While this We believe significant capital investment for information resulted in less aggressive discounting in the Company’s technology in our stores, distribution facilities and support promotional activity from the prior year at Bon-Ton stores, functions is necessary to support our business strategies. we believe it’s the right strategy for increased profitability. Our 2007 capital budget includes the necessary expenditures to support our systems enhancement Spring 2007, we’re introducing a new positioning efforts as we analyze our business needs. statement for the Company: “Come to the right place®”– conveying our message of what we are - the right place Our entire team has worked diligently and has made for great style, great selection, great value and tremendous progress toward our long-term goal of great service. positioning our Company to benefit from more efficient and profitable operations in 2007 and beyond. In any We also invested in new software which will provide integration, one never knows how well the cultures will actionable insight into the shopping patterns of our work together; I’m extremely pleased to report that over customer. This software will align us with the needs 33,000 associates came together and made it possible to of our customer, measure the success of our marketing be successful in 2006. I want to thank all the members and help us gain an understanding of what represents of the Bon-Ton team for their support, efforts and results. value to our customer, allowing us to create the right I would also like to acknowledge our Board of Directors’ kind of shopping experience to entice our customer to role in guiding the Company to where we are today. return to our stores. We have a culture that generates new ideas and • Identify and prioritize systems enhancements. thinks locally while leveraging significant economies We are currently in the planning and analysis stage of of scale. We are committed to superior execution and prioritizing our business needs. A Management Advisory long-term results. Committee has been created to prioritize resource allocation and make decisions as to how best to increase Thank you for your support and we look forward to productivity and performance. Funding system keeping you informed of our progress. We believe enhancements will deliver better business outcomes. you’ve come to the right place. We will begin a roll-out of our point-of-sale system in the Carson’s stores. This is a PC based system that affords us opportunities to communicate more efficiently with our Sincerely, associates and, ultimately, with our customers. It will provide enhanced speed, reliability and functionality which will improve the customer’s shopping experience.

• Review our stores on a store-by-store basis. We expanded our Planning and Allocation division as Byron (Bud) Bergren part of the integration plan in anticipation of making President and Chief Executive Officer the appropriate changes to assortments by store in April 2, 2007 order to meet our customer’s needs. Each store’s merchandise assortment is planned to reflect the lifestyle and preference of the customer who shops there. The analysis done by Planning and Allocation affords us opportunities for increased sales and profitability and an improvement in turnover.

Additionally, we have an initiative in place to review the standards in our stores to ensure consistencies across all locations, including the visual presentation of the merchandise and the expected level of customer service. We believe these initiatives will ultimately provide a better shopping experience for our customers and enhance financial results for our shareholders. the right place: for our customers

Our core customer is female, 35 to 60 years old, married • Differentiation is the second core initiative. We define with children and has an annual household income differentiated product as our own private brands, unique between $55,000 and $125,000. She is a woman who vendors and exclusive products purchased from our balances her identity as mother, wife and individual. existing vendors. We supplement branded offerings with She serves as the family gatekeeper in terms of style our own distinctive, exclusive private brands that help set for herself and her family. She seeks affordable style our stores apart from our competition, offer exceptional sources to help define her look with today’s fashions value and create customer loyalty. Building upon the and views shopping as a necessary experience that, favorable customer response to and financial performance most importantly, results consistently in the meaningful of our private brands, we will expand these differentiated fulfillment of her many life roles. offerings in 2007.

It’s our goal to provide our customer the merchandise • Key items is our third core initiative. We present our she’s seeking. Our merchandise strategy is powerful, customers with meaningful quantities and floor yet simple, and well communicated throughout all presentations of must-have selections in our “What’s levels of our Company. We seek to provide new and Hot,” “Incredible Values”and “Great Gifts”programs. exciting product offerings that are focused on our customer’s style needs and are not typically found During 2006, we focused on enhancing the customer in our department store competitors or in mid-line shopping experience. Our emphasis is on fast, friendly promotional chain stores. The core initiatives of our and efficient service, making our stores the right place merchandise strategy are our franchise businesses, for our customers. Numerous customer-focused initiatives differentiated products and storewide key items. have been implemented in our stores that are having a positive impact, including: • Franchise businesses are made up of seven • adding price scanners to assist customers in determining product categories--cosmetics, ladies' shoes, pricing on merchandise selections; petite sportswear, large-size sportswear, moderate • adding specialty shopping carts to assist customers in update sportswear, social occasion dressing and gifts. the Home departments; We believe intensification of these key businesses • improving descriptive merchandise signing and visual gives us a competitive advantage. We always plan presentation; for growth in our franchise businesses that exceeds • refining basic operational practices, with emphasis on total Company growth. We aggressively fund their consistently providing neat, orderly and well-stocked inventory levels, marketing, capital and square selling floors; footage in our stores and assign our best sales • reducing merchandise density; and associates, called "pacesetters," to sell these • providing open floors and aisles that are easy for product categories. customers to navigate.

In 2007, our stores will continue to focus on providing At Bon-Ton, our marketing strategy starts with our optimal customer service by capitalizing on the respective customer. We are her source of fashion ideas. She strengths of the previously separate Bon-Ton and Carson’s comes to the right place for great style and great value. store groups. We are taking proven strategies from each Our marketing strategy includes weekly communication group and synthesizing them to benefit our customers. with our core customer, presenting merchandise Along with our store management, the corporate store assortments advertised in a multimedia approach. administration team is directing the roll-out of proven Our newspaper inserts reach approximately customer service initiatives across the Company. This 9 million customers. Our direct mail catalogs and includes the initial installation of Bon-Ton’s advanced mailers regularly connect us with approximately point-of-sale system in the Carson’s stores, which will 5 million charge customers. We also reach our customers provide enhanced speed, reliability and functionality to through television, e-mail and our Internet website. improve customer service levels. Other customer service enhancements include the addition of customer seating Our marketing strategy works hand-in-hand to support zones and improved directional signing. our merchandising strategy, which consists of franchise businesses, including private brand, key items and In addition to initiatives that are visible to our customer, by-door opportunities. we will also capitalize on the combined size and technical capabilities of the new organization, with the goal of Spring of 2007 unveils our new marketing theme that allowing our in-store teams to focus on “behind the not only connects with our customer, but evokes what scenes”activities which directly benefit our customer. we are and what we offer. We invite our customer to Store operations are being enhanced by powerful, "Come to the Right Place" for the right merchandise, the simple communication. We have invested in an internal right style, at the right price. This theme will be integrated website which we call “the ONE.” It provides timely, throughout our entire media mix, from shopping bags concise communication and easy to access reference to the Internet. tools. Our Bon-Ton satellite broadcast network communicates directly to the stores with live broadcasts to our associates in 23 states. From our professional production studio in Milwaukee, senior management can provide current information to the stores on fashion trends, visual presentation and upcoming marketing initiatives, making our stores right for our customer.

7 the right place: for our communities To truly stand out from our competition, we believe and the Charge Against Breast Cancer. Together, that we must build on the 100-plus year tradition of our our customers and associates helped generate record nameplates, each of which resonates with our customers. donations in 2006. This awareness fosters a hometown culture and allows us to be part of our communities in a way that improves For 11 days in each of March and September, the lives of our associates and our customers. We utilize customers who donate clean clothing and home community-oriented sales promotion activities to solidify goods at our stores receive coupons toward the our position as the hometown store. Further, by relating purchase of new merchandise. The donations support to the essential interests of our markets through sports Goodwill Industries’mission of funding job training and cultural sponsorships, we reinforce our relevance to and career services in local communities. Partnerships our customers. And, by returning nearly $20 million such as the Goodwill Sale engage our customer in a annually to our communities, we demonstrate our way that helps this particular organization and commitment as good corporate citizens. enhances its career programs in their community. During our four-day Fall Food Drive, we partner with We connect with our communities. Through the local non-profit food distribution organizations in each continuing commitment of both philanthropic and of our communities. Customers receive a coupon for volunteer resources, our Company supports efforts that every non-perishable food item donated. Collectively, build partnerships and strengthen the communities we gathered enough food to provide over 200,000 where Bon-Ton associates live and work. Rather than meals in 2006. being involved with a national organization, we believe it is appropriate for us to localize our involvement in During the months of May and October, we help communities where we do business. An integral part of support breast cancer awareness and research by our marketing strategy is to support our hometowns. selling pink-themed merchandise in our “Pink Shops.” We believe this strategic initiative drives traffic, generates In 2006, we donated over $400,000 to five cancer incremental sales, reaches all stores and communities centers through these merchandise sales. and garners meaningful editorial opportunities. It is also a means of differentiating our Company We take pride in our support of the civic and cultural from our competitors. lives of the markets we serve. This has been a long- standing tradition at Bon-Ton. It is our conviction that Our Community Day semi-annual event involves by making these investments, we help build healthier approximately 11,000 non-profit organizations and raises communities, provide a better environment for our approximately $10 million annually. Other charitable- stores to do business and create value for our giving events in which we partner with our communities shareholders as well. include the Fall Food Drive, the semi-annual Goodwill Sale

the right place: for our investors

Our CEO stated in his letter to shareholders that we Additionally, we have budgeted capital expenditures in were pleased to report our financial results for 2006 2007 for the addition of two new stores, expansion of exceeded our expectations. We are looking forward to three stores, renovation and reconfiguration of several the second year of the integration process of Bon-Ton existing stores and conversion of one of our duplicate and Carson’s and remain confident we are positioning stores in the Green Bay, Wisconsin market to a furniture our Company to benefit from more efficient operations gallery. These initiatives will allow us to increase the in 2007 and beyond. productivity of our stores and enhance the shopping experience for our customers, resulting in a more We seek to add shareholder value through growth profitable store base. in our base business as well as debt reduction, responsible acquisitions, asset sales and real estate A smart investment for our Company and, ultimately, initiatives. In 2006, we executed on all fronts. The our shareholders, is investing in Business Intelligence. strength of the combined Company is evidenced by Business Intelligence is the ability to analyze data in the appreciation in the value of our stock. At year-end, order to make better decisions; it is critical to our our shares closed at $37.32, a 76% increase over success. It helps us understand our customer, Bon-Ton’s closing price of $21.18 at year-end 2005. measure the effectiveness of our merchandise Market capitalization at year-end increased 79% to assortment, identify the success of our promotions $637.5 million. Our debt to EBITDA ratio was 4.3:1, and marketing, and measure the experience our slightly better than our forecast of 4.4:1 to 4.5:1. customer has when she shops with us. Business Return on average equity increased 5.3 percentage Intelligence supports the right merchandise, the right points to 14.7%. In 2006, we completed the acquisition level of stock and the right colors and sizes for each of Carson’s and four Parisian locations and are well store. We believe enhancing and updating our systems on our way to completing the integration of the will allow us to better serve our customer, give us aforementioned entities. We also announced the a competitive advantage and ultimately produce closing of three unprofitable stores and improved incremental value for our shareholders over time. the efficiency of our distribution operations by closing one distribution center. Our focus is to provide sustained increases in the value of our shareholders’investment. We are exploiting In 2007, we will continue to seek ways to increase profitable business opportunities and building a shareholder value. We will review all of our assets on business platform for future growth, a growth that a continuous basis to determine the best course of makes us the right place for our investors. action and, to that end, we have announced the closing of two additional underperforming locations.

11 senior management committee Byron L. Bergren President, Chief Executive Officer and Director

Anthony J. Buccina Vice Chairman, President – Merchandising

Stephen R. Byers Vice Chairman, Stores, Operations, Real Estate, Private Brand, Planning & Allocation

David B. Zant Vice Chairman, Private Brand and Planning & Allocation

Edward P. Carroll, Jr. Executive Vice President, Sales Promotion and Marketing

Dennis R. Clouser Executive Vice President, Human Resources

Keith E. Plowman Executive Vice President, Chief Financial Officer and Principal Accounting Officer

James M. Zamberlan Executive Vice President, Stores and Visual

board of directors Tim Grumbacher (1) Executive Chairman of the Board of Directors

Robert B. Bank (2) (3) President of Robert B. Bank Advisory Services

Byron L. Bergren President and Chief Executive Officer

Philip M. Browne (3) Senior Vice President and Chief Financial Officer of Advanta Corp.

Shirley A. Dawe (1) (2) President of Shirley Dawe Associates, Inc.

Marsha M. Everton (2) (4) President of Marsha Everton LLC

Michael L. Gleim (1) (4) Former Vice Chairman and Chief Operating Officer of The Bon-Ton Stores, Inc.

Robert E. Salerno (3) Chief Operating Officer of Nancy Koltes Associates

1 – Executive Committee of the Board 2 – Human Resources and Compensation Committee 3 – Audit Committee 4 – Governance and Nominating Committee 12 CC13571-01p15-AnnRep_cara 5/10/07 4:19 PM Page 1