Related Party Transactions and Outside Related Director Information

ShopKo Stores, Inc. (Retired) (SKO.X)

5/31/2005 10-K Information

Pursuant to the Pending Merger, upon Badger Acquisition being merged with and into ShopKo, each outstanding share of common stock of ShopKo will be converted into the right to receive $24.00 per share in cash, without interest. A copy of the Agreement and Plan of Merger Agreement was filed as an exhibit to a Current Report on Form 8-K filed by ShopKo on April 8, 2005.

Badger Retail Holding is a Delaware corporation that is currently wholly-owned by Marathon, a private equity fund sponsored by Goldner Hawn, a Minneapolis-based private equity firm. Badger Acquisition is a Wisconsin corporation and a wholly-owned subsidiary of Badger Retail Holding.

Upon completion of the Pending Merger, Marathon has agreed to capitalize Badger Retail Holding with an equity investment of up to $27 million in cash, and Mr. Eugster has agreed to capitalize Badger Retail Holding with an equity investment of $3 million in cash. Mr. Eugster will have an indirect equity ownership interest in ShopKo as a result of providing equity financing to Badger Retail Holding and being granted options to purchase additional shares of Badger Retail Holding. He will be a party to an employment agreement with ShopKo effective upon completion of the Pending Merger. After the Pending Merger becomes effective, Mr. Eugster is expected to serve as Chairman of the Board of ShopKo as well as acting Chief Executive Officer until a new President and Chief Executive Officer is named.

Mr. Zona has committed to invest an amount representing approximately 0.1% of the total funds committed by investors in Marathon. Accordingly, after the completion of the Pending Merger, Mr. Zona will have an indirect equity ownership interest in ShopKo through Marathon's investment in Badger Retail Holding. Mr. Zona serves on an advisory board that Goldner Hawn established with respect to Marathon.

Further information regarding the Pending Merger and the interests of Mr. Eugster and Mr. Zona relating to the Pending Merger will be described in the proxy statement to be filed by ShopKo with the SEC in connection with ShopKo's solicitation of proxies with respect to the meeting of shareholders to be called with respect to the Pending Merger.

In addition, the Company and its subsidiaries have transactions in the ordinary course of business with unaffiliated corporations for whom certain of the non-employee directors serve as directors. We do not consider the amounts involved in such transactions to be material in relation to our business and believe that such amounts are not material to the interests of the other corporations or the interests of the non-employee directors involved and the non-employee directors had no role in any such negotiations.

4/26/2004 Proxy Information

Mr. Kramer was Chairman of ShopKo Stores, Inc. from July 1997 to March 2000, President and Chief Executive Officer from February 1991 to March 1999, Executive Vice President from April 1983 to February 1986 and Executive Vice President and Chief Operating Officer from February 1986 to February 1991.

4/28/2003 Proxy Information

Mr. Watson serves on the board of directors of Retek, Inc., a provider of software and services to the retail industry. Retek, Inc. is a vendor of the Company, having received approximately $160,000 in the last fiscal year to update the Pamida division's retail merchandising system. All transactions with Retek, Inc. were made in the ordinary course and Mr. Watson had no role in any negotiations between the companies. While additional transactions with Retek, Inc. might take place in the future, no significant expenditures are planned.