was a Senior Vice President and the Chief

Financial Officer of Duckwall, was promoted to interim President and CEO.

      On March 1, 2008, Johnson had a conference call with Duckwall’s Board of

Directors during which the Board stressed that the company needed to be

reorganized to streamline costs and minimize overhead. That same day, Johnson

sent an e-mail to the Senior Vice Presidents with the subject line “Overhead

Efficiencies,” informing them of the conference call and notifying them that the

Board had stressed the need to move quickly on “implementing accountability.”

The Board suggested a thirty-day comment period in which to restructure the

company. Johnson therefore requested in his e-mail that, “after we get through

Tuesday,” he wanted each of the Senior Vice Presidents to develop a plan to

                                       -2-
implement savings. He informed them that he would schedule meetings with each

of them over the next few weeks so that he could have an overall cost-reduction

strategy outlined prior to the April Board meeting. The “Tuesday” that Johnson’s

e-mail referred to was March 4, 2008. On that day, a budget and planning

meeting was held with the Board at which Johnson was present along with several

corporate officers, including Mapp and Sturdivant. Mapp, Sturdivant, and others

made presentations to the Board regarding what they thought should “be done to

move the company forward.”

      On March 5, Royce Winsten, a member of the Board, e-mailed Johnson.

Winsten expressed his opinion that serious cuts needed to be made to overhead

expenses and directed Johnson to:

      Pull together your competent SVP/VPs and build from there. From
      the look of things yesterday it will be a small group. It’s clear Mapp,
      St[u]rdivant and [Virginia Meyer] are very weak players in very
      important slots. Their direct reports are likely as weak as they are.
      As I thought about Hixon, he seemed relatively strong in the group
      but the