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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Filed by the Registrantþ | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Section 240.14a-12 |
THE BON-TON STORES, INC.
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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Sincerely, | |
Tim Grumbacher | |
Executive Chairman of the Board |
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1. | To elect a nine-member Board of Directors for a one-year term. | |
2. | To approve an amendment of The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive Plan. | |
3. | To ratify the appointment of KPMG LLP as independent registered public accounting firm for 2006. | |
4. | To consider any other matters as may properly come before the meeting. |
Robert E. Stern | |
Vice President, | |
General Counsel and Secretary |
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• | Internet: You can vote over the internet at the internet address shown on your proxy card. Internet voting is available 24 hours a day. If you have access to the Internet, we encourage you to vote this way.If you vote over the internet, do not return your proxy card. | |
• | Telephone: You can vote by calling the toll-free telephone number on your proxy card. Telephone voting is available 24 hours a day.Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.If you vote by telephone, do not return your proxy card. | |
• | Proxy Card: You can vote by signing, dating and mailing your proxy card in the postage-paid envelope provided. | |
• | Vote in Person: You can attend the Annual Meeting and vote at the meeting. |
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Class A Common Stock | Common Stock(1) | |||||||||||||||
Number of | Number of | |||||||||||||||
Name and Address | Shares | Percent | Shares | Percent | ||||||||||||
Tim Grumbacher 2801 E. Market Street York, PA 17402 | 2,406,253 | 81.53 | % | 5,883,475 | (2) | 35.98 | % | |||||||||
Dimensional Fund Advisors, Inc. 1299 Ocean Avenue Santa Monica, CA 90401 | — | — | 1,181,828 | (3) | 8.48 | % | ||||||||||
Henry F. Miller 1650 Arch Street – 22nd Floor Philadelphia, PA 19103 | 545,237 | (4) | 18.47 | % | 1,562,844 | (5) | 10.79 | % | ||||||||
Thomas W. Wolf 2801 E. Market Street York, PA 17402 | 545,237 | (4) | 18.47 | % | 1,637,054 | (6) | 11.29 | % | ||||||||
David R. Glyn 1650 Arch Street – 22nd Floor Philadelphia, PA 19103 | 545,237 | (4) | 18.47 | % | 647,851 | (7) | 4.47 | % | ||||||||
M. Thomas Grumbacher Trust dated March 9, 1989 for the benefit of Matthew Reed Grumbacher(8) 1650 Arch Street – 22nd Floor Philadelphia, PA 19103 | 181,746 | 6.16 | % | 202,898 | 1.44 | % | ||||||||||
M. Thomas Grumbacher Trust dated March 9, 1989 for the benefit of Beth Anne Grumbacher Elser(8) 1650 Arch Street – 22nd Floor Philadelphia, PA 19103 | 181,746 | 6.16 | % | 202,898 | 1.44 | % | ||||||||||
M. Thomas Grumbacher Trust dated March 9, 1989 for the benefit of Max Aaron Grumbacher(8) 1650 Arch Street – 22nd Floor Philadelphia, PA 19103 | 181,746 | 6.16 | % | 202,898 | 1.44 | % |
(1) | Each share of Class A common stock is convertible into one share of common stock at the holder’s option. Accordingly, the number of shares of common stock for each person includes the number of shares of common stock issuable upon conversion of all shares of Class A common stock beneficially owned by such person. Also, the total number of shares of common stock outstanding for purposes of calculating percentage ownership of a person includes the number of shares of Class A common stock beneficially owned by such person. |
(2) | Includes (a) 165,773 shares of common stock held by The Grumbacher Family Foundation, a charitable foundation of which Mr. Grumbacher, Nancy T. Grumbacher (Mr. Grumbacher’s wife), Henry F. Miller and Thomas W. Wolf are the directors, (b) 14,210 shares of common stock held by trusts for the benefit of Mr. Grumbacher’s grandchildren of which Ms. Grumbacher, Beth Elser, Mr. Wolf and David R. Glyn are the trustees, (c) 365,205 shares of common stock which are subject to forfeiture as provided in the Company’s Amended and Restated 2000 Stock Incentive Plan, and (d) 763,430 shares of common stock held by two grantor retained annuity trusts under which Mr. Grumbacher is the beneficiary and pursuant to which Mr. Grumbacher may at any time acquire such shares by substituting other property in such trusts. Mr. Grumbacher disclaims beneficial ownership of all shares referred to in clauses (a) and (b) of this note. |
(3) | Based solely on a Schedule 13G dated February 6, 2006 filed with the Securities and Exchange Commission by Dimensional Fund Advisors, Inc. |
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(4) | Consists of Class A common stock held by trusts for the benefit of Tim Grumbacher’s children of which Thomas W. Wolf, Henry F. Miller and David R. Glyn are the trustees. Messrs. Wolf, Miller and Glyn each disclaim beneficial ownership of all shares referred to in this note. |
(5) | Consists of (a) 165,773 shares of common stock held by The Grumbacher Family Foundation, a charitable foundation of which Tim Grumbacher, Nancy T. Grumbacher, Thomas W. Wolf and Mr. Miller are the directors, (b) 545,237 shares of Class A common stock and 63,454 shares of common stock held by trusts for the benefit of Mr. Grumbacher’s children of which Mr. Miller, Mr. Wolf and David R. Glyn are the trustees, (c) 24,950 shares of common stock held by other trusts for the benefit of Mr. Grumbacher’s children of which Messrs. Wolf, Miller and Glyn are the trustees, and (d) 763,430 shares of common stock held by two trusts for the benefit of Mr. Grumbacher of which Messrs. Wolf and Miller are the trustees. Mr. Miller disclaims beneficial ownership of all shares referred to in this note. |
(6) | Includes (a) 165,773 shares of common stock held by The Grumbacher Family Foundation, a charitable foundation of which Tim Grumbacher, Nancy T. Grumbacher, Mr. Wolf and Henry F. Miller are the directors, (b) 545,237 shares of Class A common stock and 63,454 shares of common stock held by trusts for the benefit of Tim Grumbacher’s children of which Mr. Wolf, Mr. Miller and David R. Glyn are the trustees (c) 24,950 shares of common stock held by other trusts for the benefit of Mr. Grumbacher’s children of which Messrs. Wolf, Miller and Glyn are the trustees, (d) 14,210 shares of common stock held by trusts for the benefit of Mr. Grumbacher’s grandchildren of which Nancy T. Grumbacher, Beth Elser and Messrs. Wolf and Glyn are the trustees, and (e) 763,430 shares of common stock held by two trusts for the benefit of Mr. Grumbacher of which Messrs. Wolf and Miller are the trustees. Mr. Wolf disclaims beneficial ownership of all shares referred to above. Also includes options exercisable within 60 days of April 3, 2006 to purchase 5,000 shares of common stock. Does not include 6,625 restricted stock units held by Mr. Wolf. Restricted stock units do not confer on the holder voting or dispositive control over shares of common stock until one year following termination of Board service, at which time shares of common stock are issued. |
(7) | Consists of (a) 545,237 shares of Class A common stock and 63,454 shares of common stock held by trusts for the benefit of Tim Grumbacher’s children of which Mr. Glyn, Thomas W. Wolf and Henry F. Miller are the trustees, (b) 24,950 shares of common stock held by other trusts for the benefit of Mr. Grumbacher’s children of which Messrs. Wolf, Miller and Glyn are the trustees, and (c) 14,210 shares of common stock held by trusts for the benefit of Mr. Grumbacher’s grandchildren of which Nancy T. Grumbacher, Beth Elser and Messrs. Wolf and Glyn are the trustees. Mr. Glyn disclaims beneficial ownership of all shares referred to in this note. |
(8) | In notes (4), (5), (6) and (7) above, we discussed trusts for the benefit of Tim Grumbacher’s children, of which Thomas W. Wolf, Henry F. Miller and David R. Glyn serve as trustees. This is one of such trusts. |
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Class A Common Stock | Common Stock(1) | |||||||||||||||
Shares | Shares | |||||||||||||||
Beneficially | Beneficially | |||||||||||||||
Name | Owned | Percent | Owned(2)(3)(4) | Percent | ||||||||||||
Tim Grumbacher | 2,406,253 | 81.53 | % | 5,883,475 | (5) | 35.98 | % | |||||||||
James H. Baireuther | — | — | 191,000 | 1.37 | % | |||||||||||
Robert B. Bank | — | — | — | * | ||||||||||||
Byron L. Bergren | — | — | 76,666 | * | ||||||||||||
Philip M. Browne | — | — | 2,500 | * | ||||||||||||
Shirley A. Dawe | — | — | — | * | ||||||||||||
Marsha M. Everton | — | — | 860 | * | ||||||||||||
Michael L. Gleim | — | — | 368,342 | (6) | 2.63 | % | ||||||||||
Robert E. Salerno | — | — | 2,100 | * | ||||||||||||
Thomas W. Wolf | 545,237 | (7) | 18.47 | % | 1,637,054 | (8) | 11.29 | % | ||||||||
James M. Zamberlan | — | — | 16,000 | * | ||||||||||||
David B. Zant | — | — | 67,000 | * | ||||||||||||
All directors and executive officers as a group (17 persons) | 2,951,490 | 100.00 | % | 7,334,279 | (9) | 43.06 | % |
* | less than 1% |
(1) | See note (1) to Principal Shareholders table. |
(2) | The shares reflected in this column do not include 6,625 restricted stock units held by each of the Company’s non-employee directors, Mr. Bank, Mr. Browne, Ms. Dawe, Ms. Everton, Mr. Gleim, Mr. Salerno and Mr. Wolf. Restricted stock units do not confer on the holder voting or dispositive control over shares of common stock until one year following termination of Board service, at which time shares of common stock are issued. |
(3) | The shares reflected in this column include options exercisable within 60 days of April 3, 2006 to purchase the following number of shares as to each of the following: Mr. Bergren, 41,666 shares; Mr. Gleim, 65,667 shares; Mr. Wolf, 5,000 shares; Mr. Zamberlan, 5,000 shares; and Mr. Zant, 20,000 shares. |
(4) | The shares reflected in this column include shares of restricted stock as to each of the following: Mr. Grumbacher, 365,205 shares; Mr. Baireuther, 10,000 shares; Mr. Bergren, 35,000 shares; Mr. Zamberlan, 4,000 shares; and Mr. Zant, 31,000 shares. Shares of restricted stock confer voting rights on the holder but are subject to forfeiture as provided in the Company’s Stock Incentive Plan. |
(5) | See note (2) to Principal Shareholders table. |
(6) | Includes 103,367 shares owned by Mr. Gleim’s spouse and 5,700 shares which Mr. Gleim holds as custodian for his grandchildren. Mr. Gleim disclaims beneficial ownership of all of the foregoing shares. |
(7) | See note (4) to Principal Shareholders table. |
(8) | See note (6) to Principal Shareholders table. |
(9) | See notes (2), (3), (4), (5), (6) and (8) above. Includes 675 shares held in an IRA plan by the spouse of an executive officer not named in this table as to which the executive officer disclaims beneficial ownership. Also includes 19,500 shares of restricted stock held by executive officers not named in this table. Shares of restricted stock confer voting rights on the holder but are subject to forfeiture as provided in the Company’s Stock Incentive Plan. |
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Mr. Bank has been President of Robert B. Bank Advisory Services, a private capital investment and consulting firm, since 1990.
Mr. Bergren has been President and Chief Executive Officer of Bon-Ton since August 2004. Mr. Bergren, who joined Bon-Ton in November 2003 as Vice Chairman and served as President and Chief Executive Officer of Elder-Beerman from February 2002 through August 2004, served as Chairman of the Southern Division of Belk, Inc. from 1999 to February 2002, and in senior executive positions at Belk Stores from 1985 to 1999.
Mr. Browne has been Senior Vice President and Chief Financial Officer of Advanta Corp., one of the nation’s largest providers of business credit cards to small businesses, since June 1998. Prior to that, Mr. Browne was a partner at Arthur Andersen LLP, where he was employed for more than 15 years.
Ms. Dawe has been President of Shirley Dawe Associates, Inc., a Toronto-based consulting group since 1986. Prior to 1986, she held progressively senior merchandising positions with the Hudson’s Bay Company, a Canadian national department store chain, for over 15 years. Ms. Dawe is a director of the National Bank of Canada and Henry Birks & Sons, Inc., a North American fine jewelry retailer.
Ms. Everton has been President of The Pfaltzgraff Co., a subsidiary of Lifetime Brands, Inc., a multi-channel retail company, since July 2005. From January 2002 to July 2005, she was President and Chief Executive Officer of The Pfaltzgraff Co., a casual dinnerware manufacturer. Ms. Everton was Vice President of The Pfaltzgraff Co. for more than ten years prior, and was responsible during this period for various departments including stores and direct marketing, corporate development and market planning and administration.
Mr. Gleim was Vice Chairman and Chief Operating Officer of Bon-Ton from December 1995 to February 2002. From 1991 to December 1995 he was Senior Executive Vice President of Bon-Ton, and from 1989 to 1991 he was Executive Vice President of Bon-Ton.
Mr. Grumbacher has been Executive Chairman of the Board of Directors of Bon-Ton since February 2005. He served as Chairman of the Board of Directors of Bon-Ton from August 1991 to February 2005. He was Chief Executive Officer of Bon-Ton from 1985 to 1995 and from June 2000 to August 2004. From 1977 to 1989 he was President of Bon-Ton.
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Mr. Salerno has been Chief Operating Officer of Nancy Koltes Associates, a wholesaler of luxury domestics and linens, since June 2004. He was Chief Operating Officer of Kieselstein-Cord International, a luxury accessories wholesaler and retailer, from December 2002 to June 2004; and Vice President and Chief Operating Officer of Circline.com, an internet based broker of fine arts and antiques, from November 2001 to December 2002. From October 1999 to August 2001, Mr. Salerno was Chief Executive Officer of Bluefish Clothing, an apparel marketer. In November 1999, Bluefish Clothing filed for relief under chapter 11 of the U.S. Bankruptcy Code and the company was liquidated in November 2001. From June 1996 to February 1999, he was Senior Vice President of Bergdorf Goodman, responsible for all operational, financial and administrative functions.
Mr. Wolf has been President of the Wolf Organization, Inc., a building materials manufacturer and distributor, since 1985. He is also a director of Irex Corporation, a national building contractor.
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• | Articles of Incorporation, | |
• | Bylaws, | |
• | Corporate Governance Policies, | |
• | Audit Committee Charter, | |
• | Human Resources and Compensation Committee Charter, | |
• | Governance and Nominating Committee Charter, | |
• | Executive Committee Charter, and | |
• | Code of Ethical Standards and Business Conduct. |
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• | a $90,000 annual fee, $40,000 of which is paid in cash and $50,000 of which is paid in restricted stock units which vest 12 months following termination of Board service; | |
• | a $15,000 annual fee for serving on the Executive Committee; | |
• | a $5,000 annual fee for serving on each committee other than the Executive Committee; | |
• | a $10,000 supplemental annual fee for each Committee chair. |
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Annual | ||||||||||||||||||||
Annual Cash | Restricted | Committee | ||||||||||||||||||
Name | Retainer | Stock Units | Fees | Other Fees | Total | |||||||||||||||
Robert B. Bank | $ | 40,000 | $ | 50,000 | $ | 15,000 | 3,750 | (1) | $ | 108,750 | ||||||||||
Philip M. Browne | 40,000 | 50,000 | 25,000 | — | 115,000 | |||||||||||||||
Shirley A. Dawe | 40,000 | 50,000 | 25,000 | — | 115,000 | |||||||||||||||
Marsha M. Everton | 40,000 | 50,000 | 5,000 | — | 95,000 | |||||||||||||||
Michael L. Gleim | 40,000 | 50,000 | 30,000 | — | 120,000 | |||||||||||||||
Robert E. Salerno | 40,000 | 50,000 | 5,000 | — | 95,000 | |||||||||||||||
Thomas W. Wolf | 40,000 | 50,000 | 20,000 | — | 110,000 |
(1) | Mr. Bank serves as the Board’s representative on the committee that oversees the Company’s Retirement Contribution Plan and receives $1,250 for each meeting of such committee that he attends. |
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• | increase the number of shares available under the Stock Incentive Plan by 700,000 to an aggregate of 2,600,000 shares; and | |
• | permit, but not require, the grant of “performance-based” Awards to participants in the Stock Incentive Plan so that such awards qualify for an exemption from the limitations on deductibility of certain compensation imposed by Section 162(m) of the Internal Revenue Code. |
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a. | The expiration of the term specified in the Option, which shall not exceed ten years from the date of grant or five years from the date of grant of an ISO if the recipient owns |
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shares possessing more than 10% of the total combined voting power of all classes of stock of the Company; | ||
b. | The expiration of 90 days from the date the optionee’s employment or service with the Company terminates for any reason other than disability (as defined in the Code) or death or as otherwise specified in subparagraphs d. or e. below; |
c. | The expiration of one year from the date the optionee’s employment or service with the Company terminates due to the optionee’s death or disability; |
d. | A finding by the Committee that the optionee has breached his or her employment contract with the Company or has engaged in disloyalty to the Company; or | |
e. | Such time as the Committee may determine if there is a Change of Control of the Company as defined in the Stock Incentive Plan. |
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2005 | 2004 | |||||||
Audit Fees(1) | $ | 1,192,200 | $ | 1,386,400 | ||||
Audit-Related Fees(2) | 722,711 | 23,400 | ||||||
Tax Fees(3) | 217,020 | 308,100 | ||||||
All Other Fees | — | — |
(1) | Audit Fees include fees associated with audit services, consultation on matters related to the consolidated financial statements, review of the tax provision, consents, reviews of the Company’s quarterly reports on Form 10-Q and reviews of the Company’s filings under the Securities Exchange Act of 1934. |
(2) | Audit-Related fees in 2005 relate primarily to services, including due diligence, provided in connection with the acquisition of the Northern Department Store Group from Saks Incorporated and the related financing. Audit-Related fees in 2004 relate to benefit plan audits. |
(3) | Tax Fees reflect all tax related services, excluding any costs included in Audit Fees, including consultation, return preparation, planning and compliance. |
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Long-Term | ||||||||||||||||||||||||||||
Annual Compensation | Compensation Awards | |||||||||||||||||||||||||||
Other | Restricted | Securities | ||||||||||||||||||||||||||
Name and | Annual | Stock | Underlying | All Other | ||||||||||||||||||||||||
Position | Year | Salary | Bonus | Compensation(1) | Awards(2) | Options(#) | Compensation(3) | |||||||||||||||||||||
Tim Grumbacher | 2005 | $ | 650,000 | $ | — | $ | 22,584 | $ | 6,588,298 | — | $ | 11,590 | ||||||||||||||||
Executive Chairman | 2004 | 712,500 | 845,025 | — | — | — | 12,217 | |||||||||||||||||||||
of the Board | 2003 | 625,000 | 817,500 | — | — | — | 11,425 | |||||||||||||||||||||
Byron L. Bergren(4) | 2005 | 736,538 | — | 55,075 | — | 95,000 | 127,374 | |||||||||||||||||||||
President and CEO | 2004 | 605,662 | 247,143 | — | 456,750 | 125,000 | 1,838,760 | |||||||||||||||||||||
2003 | 148,741 | 878,750 | — | — | — | 1,413 | ||||||||||||||||||||||
James H. Baireuther | 2005 | 400,000 | — | 18,421 | 178,100 | — | 14,416 | |||||||||||||||||||||
Vice Chairman and | 2004 | 394,564 | 149,900 | — | — | — | 14,719 | |||||||||||||||||||||
Chief Administrative Officer | 2003 | 402,300 | 210,000 | — | — | — | 13,927 | |||||||||||||||||||||
David B. Zant(5) | 2005 | 500,000 | 125,000 | 24,716 | 106,860 | — | 24,108 | |||||||||||||||||||||
Vice Chairman and | 2004 | 28,846 | 225,000 | — | 630,000 | 60,000 | — | |||||||||||||||||||||
Chief Merchandising Officer | 2003 | — | — | — | — | — | — | |||||||||||||||||||||
James M. Zamberlan(6) | 2005 | 400,000 | — | 5,602 | 71,240 | — | 15,491 | |||||||||||||||||||||
Executive Vice President — | 2004 | 370,350 | 114,900 | — | 104,090 | 5,000 | 10,269 | |||||||||||||||||||||
Stores | 2003 | 99,000 | 131,400 | — | — | — | 931 |
(1) | The amounts disclosed in this column for 2005 include the following: (i) automobile allowances and Company car benefits in the amount of $13,425 for Mr. Bergren, $9,500 for Mr. Baireuther, $9,500 for Mr. Zant and $3,302 for Mr. Zamberlan; (ii) supplemental medical benefits in the amount of $22,584 for Mr. Grumbacher, $30,511 for Mr. Bergren, $2,300 for Mr. Baireuther, $3,893 for Mr. Zant and $2,300 for Mr. Zamberlan, and (iii) club membership expenses in the amount of $11,139 for Mr. Bergren, $6,621 for Mr. Baireuther and $11,323 for Mr. Zant. Prior to 2005, the Company did not disclose the value of perquisites and other personal benefits provided to its named executive officers because the dollar value of such perquisites and other personal benefits did not exceed the threshold requiring disclosure under applicable SEC rules. |
(2) | The total number of restricted stock awards held by the named executives at the end of 2005 was 445,205 shares. The closing price of the common stock on January 28, 2006 was $21.18 per share, giving the named executives’ restricted stock holdings a value of $9,429,442 at year-end. Holders of restricted stock are entitled to the same dividend that the Company pays on common stock. |
(3) | The amounts disclosed in this column for 2005 include the following: (i) life insurance premiums, or reimbursement for life insurance premiums, in the amount of $528 for Mr. Grumbacher, $1,806 for Mr. Bergren, $3,354 for Mr. Baireuther, $776 for Mr. Zant, and $4,429 for Mr. Zamberlan; (ii) Company contributions under the Company’s Retirement Contribution Plan in the amount of $11,062 for each of Messrs. Grumbacher, Bergren, Baireuther and Zamberlan; and (iii) relocation benefits in the amount of $114,506 for Mr. Bergren and $23,332 for Mr. Zant. |
(4) | Mr. Bergren became an executive officer of the Company in November 2003. |
(5) | Mr. Zant became an executive officer of the Company in January 2005. |
(6) | Mr. Zamberlan joined the Company in October 2003 upon the acquisition of Elder-Beerman and became an executive officer of the Company in November 2004. |
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Individual Grants | Potential Realizable Value at | |||||||||||||||||||||||
Assumed Annual Rate of | ||||||||||||||||||||||||
Securities | % of Total | Stock Price Appreciation for | ||||||||||||||||||||||
Underlying | Options Granted | Option Term(1) | ||||||||||||||||||||||
Options | to Employees in | Exercise | Expiration | |||||||||||||||||||||
Name | Granted | 2005 | Price(2) | Date | 5% | 10% | ||||||||||||||||||
Tim Grumbacher | — | — | — | — | — | — | ||||||||||||||||||
Byron L. Bergren | 95,000 | (3) | 53.07 | % | $ | 20.44 | 7-6-12 | $ | 790,508 | $ | 1,842,219 | |||||||||||||
James H. Baireuther | — | — | — | — | — | — | ||||||||||||||||||
David B. Zant | — | — | — | — | — | — | ||||||||||||||||||
James M. Zamberlan | — | — | — | — | — | — |
(1) | Illustrates value that might be realized upon exercise of options immediately prior to the expiration of their term, assuming specified compounded rates of appreciation on the Common Stock over the term of the options. Assumed rates of appreciation are not necessarily indicative of future stock performance. |
(2) | The exercise price represents the closing price of the common stock on the Nasdaq National Market on the date of grant. |
(3) | This option vests as follows: (i) 20,667 shares on July 6, 2006, (ii) 20,667 shares on July 6, 2007, (iii) 20,666 shares on July 6, 2008, and (iv) 33,000 shares on July 6, 2009. |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options at | In-the-Money Options | |||||||||||||||||||||||
Shares | January 28, 2006 | at January 28, 2006(1) | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
On Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Tim Grumbacher | 44,550 | $ | 627,634 | — | — | — | — | |||||||||||||||||
Byron L. Bergren | — | — | — | 220,000 | — | $ | 1,086,550 | |||||||||||||||||
James H. Baireuther | — | — | — | — | — | — | ||||||||||||||||||
David B. Zant | — | — | — | 60,000 | — | 325,800 | ||||||||||||||||||
James M. Zamberlan | — | — | 5,000 | — | $ | 31,550 | — |
(1) | In-the-money options are options having an exercise price below the year-end share price of $21.18. Value is calculated by multiplying the difference between the option exercise price and $21.18 by the number of shares underlying the option. |
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Number of securities | |||||||||||||||
Number of shares of | remaining available for future | ||||||||||||||
common stock to be | Weighted-average | issuance under equity | |||||||||||||
issued upon exercise of | exercise price of | compensation plans | |||||||||||||
outstanding options, | outstanding options, | (excluding securities reflected | |||||||||||||
warrants and rights | warrants and rights | in the second column) | |||||||||||||
Equity compensation plans approved by security holders | |||||||||||||||
Stock options | 546,030 | $ | 13.15 | — | (1) | ||||||||||
Restricted stock | 471,647 | — | — | (1) | |||||||||||
Restricted stock units | 46,375 | — | — | (1) | |||||||||||
Total | 1,064,052 | — | 874,448 | (2) | |||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||
Total | 1,064,052 | 874,448 | (2) |
(1) | The referenced plans do not allocate available shares among stock options, restricted stock or restricted stock units. |
(2) | Does not include the additional 700,000 shares under the amendment to the Stock Incentive Plan submitted for approval to shareholders at the June 20, 2006 annual meeting. |
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NASDAQ | ||||||||||||||
DATE | NASDAQ | RETAIL | BON-TON | |||||||||||
2/3/01 | 100.00 | 100.00 | 100.00 | |||||||||||
2/2/02 | 72.33 | 120.05 | 80.00 | |||||||||||
2/1/03 | 50.52 | 97.83 | 132.48 | |||||||||||
1/31/04 | 78.55 | 143.43 | 398.08 | |||||||||||
1/29/05 | 77.70 | 171.80 | 502.08 | |||||||||||
1/28/06 | 88.52 | 186.29 | 691.84 |
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• | Provide a competitive total compensation package that enables the Company to attract, motivate and retain key personnel. |
• | Provide variable compensation opportunities, primarily on an annual basis, that are directly linked to the attainment of corporate performance goals. |
• | Provide long-term compensation opportunities, primarily to new hires, upon promotion, to reward significant individual achievement and in connection with evaluations of retention requirements. These opportunities are made through awards of stock options and shares of restricted stock that align executive compensation with increases in shareholder value. |
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1. | Review with management and the Auditors the financial statements and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to be included in the Company’s Annual Report on Form 10K (or the annual report to shareholders if distributed prior to the filing of Form 10K), including their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the Auditors under generally accepted auditing standards. | |
2. | Review the interim financial statements and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with management and the Auditors prior to the filing of the Company’s Quarterly Report on Form 10Q. Also, the Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Committee by the Auditors under generally accepted auditing standards. |
3. | Review the proposed scope of the audit, the proposed staffing of the audit to ensure adequate coverage, as well as appropriate coverage consistent with Sections 203 and 206 of the Sarbanes Oxley Act of 2002, and the fees proposed to be charged for such audit. | |
4. | Select the Auditors, considering independence and effectiveness, and approve the fees and other compensation to be paid the Auditors. On an annual basis, the Committee should ensure receipt from the Auditors, and review, the Auditors’ formal written statement delineating all relationships between the Auditors and the Company, consistent with Independence Standards Board Standard 1. In addition, the Committee shall actively engage in dialogue with the Auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the Auditors and the Committee shall take, or recommend that the full Board take, appropriate action to oversee the independence of the Auditors. | |
5. | Review the performance of the Auditors and approve any proposed discharge of the Auditors when circumstances warrant. | |
6. | Discuss with the Auditors any communications with the Auditors’ national office respecting auditing or accounting issues presented by the engagement. | |
7. | Review and evaluate the lead partner on the audit team. Ensure the rotation of the lead partner having primary responsibility for the audit and the partner responsible for reviewing the audit. | |
8. | Periodically consult with the Auditors, without management present, regarding the Company’s internal controls and the fullness and accuracy of the Company’s financial statements. |
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9. | Receive and review regular reports from the Auditors with respect to: |
• | the critical accounting policies and practices of the Company, | |
• | all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the Auditors, and | |
• | other material written communications between the Auditors and management, such as any management letter or schedule of unadjusted differences. |
10. | Discuss with the independent auditor and management the Company’s auditing responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit program. | |
11. | Review the significant reports to management prepared by the internal auditors and management’s responses. |
12. | Review with the Auditors (i) the Company’s financial and accounting personnel, (ii) the adequacy and effectiveness of the accounting and financial controls of the Company, and (iii) elicit any recommendations for the improvement of such internal controls or particular areas where new or more detailed controls or procedures are desirable. | |
13. | Review management’s assertion on its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the Auditors’ report on management’s assertions. | |
14. | Review reports from management on material weaknesses or deficiencies in the design or operation of internal controls and on any fraud that involves personnel having a significant role in the internal controls. | |
15. | In consultation with the Auditors, review the integrity of the financial reporting processes, both internal and external. | |
16. | Consider the Auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting. | |
17. | Inquire of management, internal audit and the Auditors about significant risks or exposures and assess the steps management has taken to minimize such risks to the Company. | |
18. | Consider and approve, if appropriate, major changes to the Company’s auditing and accounting principles and practices as suggested by the Auditors or management. |
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19. | Following completion of the annual audit, review separately with management and with the Auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of the work or access to required information. | |
20. | Review any significant disagreement between management and the Auditors in connection with the preparation of the financial statements. | |
21. | Review with the Auditors and with management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented. (This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as determined by the Committee.) |
22. | Review and approve all related-party transactions. | |
23. | Review management’s periodic update of the Company’s Code of Ethical Standards and Business Practices and ensure that management has established a system to enforce such code. | |
24. | Review management’s monitoring of the Company’s compliance with such code and periodically determine that management has the proper review system in place to ensure that the Company’s financial statements, reports and other financial information disseminated to governmental organizations and the public satisfy legal requirements. | |
25. | Review legal compliance matters, including corporate securities trading policies, with Company counsel. | |
26. | Review with Company counsel any legal matter that could have a significant impact on the financial statements. | |
27. | Review and update periodically the Company’s procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or audit matters. | |
28. | Review annually the travel and entertainment expenses of the Company’s Chief Executive Officer and a summary of all other executive officers’ travel and entertainment expenses. | |
29. | Perform any other activities consistent with this Charter, the Company’s By-laws and governing law, as the Committee or the Board deems necessary or appropriate. |
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A. | “Affiliate” means a corporation that is a parent corporation or a subsidiary corporation with respect to the Company within the meaning of Section 424(e) or (f) of the Code. | |
B. | “Award” means an award of Restricted Stock, granted under the Plan, designated by the Committee at the time of such grant as an Award, and containing the terms specified herein for Awards. | |
C. | “Award Document” means the document described in Section 9 that sets forth the terms and conditions of each grant of an Award. | |
D. | “Board of Directors” means the Board of Directors of the Company. |
E. | “Change of Control” shall have the meaning as set forth in Section 10. | |
F. | “Code” means the Internal Revenue Code of 1986, as amended. |
G. | “Committee” shall have the meaning set forth in Section 3.A. |
H. | “Company” means The Bon-Ton Stores, Inc., a Pennsylvania corporation. |
I. | “Disability” shall have the meaning set forth in Section 22(e)(3) of the Code. |
J. | “Fair Market Value” shall have the meaning set forth in Section 8.B. |
K. | “Grantee” means a person who is granted Restricted Stock. |
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L. | “ISO” means an Option granted under the Plan that is intended to qualify as an “incentive stock option” within the meaning of Section 422(b) of the Code. |
M. | “Non-qualified Stock Option” means an Option granted under the Plan that is not intended to qualify, or otherwise does not qualify, as an “incentive stock option” within the meaning of Section 422(b) of the Code. |
N. | “Option” means either an ISO or a Non-qualified Stock Option granted under the Plan. | |
O. | “Optionee” means a person to whom an Option has been granted under the Plan, which Option has not been exercised and has not expired or terminated. |
P. | “Option Document” means the document described in Section 8 that sets forth the terms and conditions of each grant of Options. |
Q. | “Option Price” means the price at which Shares may be purchased upon exercise of an Option, as calculated pursuant to Section 8.B. |
R. | “Performance-Based Award” means an Award granted pursuant to Section 16. | |
S. | “Performance-Based Award Limitation” means the limitation on the number of Shares that may be granted pursuant to Performance-Based Awards to any one Participant, as set forth in Section 16.F. |
T. | “Performance Period” means any period designated by the Committee as a period of time during which a Performance Target must be met for purposes of Section 16. |
U. | “Performance Target” means the performance target established by the Committee for a particular Performance Period, as described in Section 16.B. |
V. | “Restricted Stock” means Shares issued to a person pursuant to an Award. |
W. | “Shares” means the shares of Common Stock that are the subject of Options or Awards. |
X. | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
A. | Committee. The Plan shall be administered by the Board of Directors, or, in the discretion of the Board of Directors, by a committee composed of two (2) or more of the members of the Board of Directors. To the extent possible, and to the extent the Board of Directors deems it necessary or appropriate, each member of the Committee shall be a “Non- Employee Director” (as such term is defined in Rule 16b-3 promulgated under the Exchange Act) and an “Outside Director” (as such term is defined in Treasury Regulations Section 1.162-27 promulgated under the Code); however, the Board of Directors may designate two or more committees to operate and administer the Plan in its stead. Any of such committees designated by the Board of Directors is referred to as the “Committee,” and, to the extent that the Plan is administered by the Board of Directors, “Committee” shall also refer to the Board of Directors as appropriate in the particular context. The Board of Directors may from time to time remove members from, or add members |
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to, the Committee. Vacancies on the Committee, however caused, shall be filled by the Board of Directors. | ||
B. | Meetings. The Committee shall hold meetings at such times and places as it may determine. Acts approved at a meeting by a majority of the members of the Committee or acts approved in writing by the unanimous consent of the members of the Committee shall be the valid acts of the Committee. | |
C. | Grants. The Committee shall from time to time at its discretion direct the Company to grant Options or Awards pursuant to the terms of the Plan. The Committee shall have plenary authority to (i) determine the Optionees and Grantees to whom and the times at which Options and Awards shall be granted, (ii) determine the price at which Options shall be granted, (iii) determine the type of Option to be granted and the number of Shares subject thereto, (iv) determine the number of Shares to be granted pursuant to each Award and (v) approve the form and terms and conditions of the Option Documents and of each Award; all subject, however, to the express provisions of the Plan. In making such determinations, the Committee may take into account the nature of the Optionee’s or Grantee’s services and responsibilities, the Optionee’s or Grantee’s present and potential contribution to the Company’s success and such other factors as it may deem relevant. The interpretation and construction by the Committee of any provisions of the Plan or of any Option or Award granted under it shall be final, binding and conclusive. | |
D. | Exculpation. No member of the Committee shall be personally liable for monetary damages as such for any action taken or any failure to take any action in connection with the administration of the Plan or the granting of Options or Awards thereunder unless (i) the member of the Committee has breached or failed to perform the duties of his or her office within the meaning of subchapter B of Chapter 17 of the Pennsylvania Business Corporation Law of 1988, as amended, and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness;provided, however, that the provisions of this Section 3.D shall not apply to the responsibility or liability of a member of the Committee pursuant to any criminal statute or to the liability of a member of the Committee for the payment of taxes pursuant to local, state or federal law. |
E. | Indemnification. Service on the Committee shall constitute service as a member of the Board of Directors. Each member of the Committee shall be entitled without further act on his or her part to indemnity from the Company to the fullest extent provided by applicable law and the Company’s Articles of Incorporation and/or Bylaws in connection with or arising out of any action, suit or proceeding with respect to the administration of the Plan or the granting of Options or Awards thereunder in which he or she may be involved by reason of his or her being or having been a member of the Committee, whether or not he or she continues to be such member of the Committee at the time of the action, suit or proceeding. |
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A. | Number of Option Shares. Each Option Document shall state the number of Shares to which it pertains. An Optionee may receive more than one Option, which may include Options that are intended to be ISOs and Options that are not intended to be ISOs, but only on the terms and subject to the conditions and restrictions of the Plan. The maximum number of Shares for which Options may be granted to any single Optionee in any fiscal year, adjusted as provided in Section 11, shall be four hundred thousand (400,000) Shares. | |
B. | Option Price. Each Option Document shall state the Option Price that, for all ISOs, shall be at least 100% of the Fair Market Value of the Shares at the time the Option is granted as determined by the Committee in accordance with this Section 8.B;provided, however,that if an ISO is granted to an Optionee who then owns, directly or by attribution under Section 424(d) of the Code, shares of capital stock of the Company possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, then the Option Price shall be at least 110% of the Fair Market Value of the Shares at the time the Option is granted. If the Common Stock is traded in a public market, then the Fair Market Value per Share shall be, if the Common Stock is listed on a national securities exchange or included in the NASDAQ National Market System, the last reported sale price per share thereof on the relevant date, or, if the Common Stock is not so listed or included, the mean between the last reported “bid” and “asked” prices per share thereof, as reported on NASDAQ or, if not so reported, as reported by the National Daily Quotation Bureau, Inc., or as reported in a customary financial reporting service, as applicable and as the Committee determines, on the relevant date. If the Common Stock is not traded in a public market on the relevant date, the Fair Market Value shall be as determined in good faith by the Committee. | |
C. | Exercise. No Option shall be deemed to have been exercised prior to the receipt by the Company of written notice of such exercise and of payment in full of the Option Price for the Shares to be purchased. Each such notice shall specify the number of Shares to be purchased and shall (unless the Shares are covered by a then current registration statement or a Notification under Regulation A under the Securities Act of 1933, as amended (the “Act”)), contain the Optionee’s acknowledgment in form and substance satisfactory to the Company that (i) such Shares |
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are being purchased for investment and not for distribution or resale (other than a distribution or resale that, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Act), (ii) the Optionee has been advised and understands that (A) the Shares have not been registered under the Act and are “restricted securities” within the meaning of Rule 144 under the Act and are subject to restrictions on transfer and (B) the Company is under no obligation to register the Shares under the Act or to take any action that would make available to the Optionee any exemption from such registration, (iii) such Shares may not be transferred without compliance with all applicable federal and state securities laws, and (iv) an appropriate legend referring to the foregoing restrictions on transfer and any other restrictions imposed under the Option Documents may be endorsed on the certificates. Notwithstanding the foregoing, if the Company determines that issuance of Shares should be delayed pending (I) registration under federal or state securities laws, (II) the receipt of an opinion that an appropriate exemption from such registration is available, (III) the listing or inclusion of the Shares on any securities exchange or in an automated quotation system or (IV) the consent or approval of any governmental regulatory body whose consent or approval is necessary in connection with the issuance of such Shares, the Company may defer exercise of any Option granted hereunder until any of the events described in this Section 8.C has occurred. | ||
D. | Medium of Payment. An Optionee shall pay for Shares (i) in cash, (ii) by certified check payable to the order of the Company, or (iii) by such other mode of payment as the Committee may approve, including, without limitation, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board. Furthermore, the Committee may provide in an Option Document that payment may be made in whole or in part in shares of Common Stock held by the Optionee for at least six months. If payment is made in whole or in part in shares of Common Stock, then the Optionee shall deliver to the Company certificates registered in the name of such Optionee representing the shares of Common Stock owned by such Optionee, free of all liens, claims and encumbrances of every kind and having an aggregate Fair Market Value on the date of delivery that is at least as great as the Option Price of the Shares (or relevant portion thereof) with respect to which such Option is to be exercised by the payment in shares of Common Stock, accompanied by stock powers duly endorsed in blank by the Optionee. Notwithstanding the foregoing, the Committee may impose from time to time such limitations and prohibitions on the use of shares of Common Stock to exercise an Option as it deems appropriate. |
1. No Option shall be exercisable after the first to occur of the following: |
(a) | Expiration of the Option term specified in the Option Document, which shall not exceed (i) ten years from the date of grant, or (ii) five years from the date of grant of an ISO if the Optionee on the date of grant owns, directly or by attribution under Section 424(d) of the Code, shares of capital stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Company or of an Affiliate; | |
(b) | Expiration of ninety (90) days from the date the Optionee’s employment or service with the Company or its Affiliate terminates for any reason other |
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than Disability or death or as otherwise specified in Section 8.E.1(d) or Section 10 below; |
(c) | Expiration of one year from the date the Optionee’s employment or service with the Company or its Affiliate terminates due to the Optionee’s Disability or death; |
(d) | A finding by the Committee, after full consideration of the facts presented on behalf of both the Company and the Optionee, that the Optionee has breached his or her employment or service contract with the Company or an Affiliate, or has been engaged in any sort of disloyalty to the Company or an Affiliate, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty in the course of his or her employment or service, or has disclosed trade secrets or confidential information of the Company or an Affiliate. In such event, in addition to immediate termination of the Option, the Optionee shall automatically forfeit all Shares for which the Company has not yet delivered the share certificates upon refund by the Company of the Option Price of such Shares. Notwithstanding anything herein to the contrary, the Company may withhold delivery of share certificates pending the resolution of any inquiry that could lead to a finding resulting in a forfeiture; or |
(e) | The date, if any, set by the Board of Directors as an accelerated expiration date pursuant to Section 10 hereof. |
2. | Notwithstanding the foregoing, the Committee may extend the period during which an Option may be exercised to a date no later than the date of the expiration of the Option term specified in the Option Documents, as they may be amended, provided that any change pursuant to this Section 8.E.2 that would cause an ISO to become a Non-qualified Stock Option may be made only with the consent of the Optionee. | |
3. | During the period in which an Option may be exercised after the termination of the Optionee’s employment or service with the Company or any Affiliate, such Option shall only be exercisable to the extent it was exercisable immediately prior to such Optionee’s termination of service or employment, except to the extent specifically provided to the contrary in the applicable Option Document. |
F. | Transfers. No Option may be transferred except by will or by the laws of descent and distribution. During the lifetime of the person to whom an Option is granted, such Option may be exercised only by him or her. Notwithstanding the foregoing, a Non-qualified Stock Option may be transferred pursuant to the terms of a “qualified domestic relations order” within the meaning of Sections 401(a)(13) and 414(p) of the Code or within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended. |
G. | Holding Period. No Option may be exercised unless six months, or such greater period of time as may be specified in the Option Documents, have elapsed from the date of grant. |
H. | Limitation on ISO Grants. In no event shall the aggregate Fair Market Value of the Shares (determined at the time the ISO is granted) with respect to which an ISO is exercisable for the first time by the Optionee during any calendar year (under all incentive stock option plans of the Company or its Affiliates) exceed $100,000. |
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I. | Other Provisions. The Option Documents shall contain such other provisions including, without limitation, provisions authorizing the Committee to accelerate the exercisability of all or any portion of an Option, additional restrictions upon the exercise of the Option or additional limitations upon the term of the Option, as the Committee shall deem advisable. |
J. | Amendment. The Committee shall have the right to amend Option Documents issued to an Optionee, subject to the Optionee’s consent if such amendment is not favorable to the Optionee, except that the consent of the Optionee shall not be required for any amendment made under Section 10. |
A. | Number of Shares and Price. Each Award Document shall state the number of Shares of Restricted Stock to which it pertains. No cash or other consideration shall be required to be paid by the Grantee for an Award. | |
B. | Certificates. Each Grantee shall be issued a certificate in respect of Shares subject to an Award. Such certificate shall be registered in the name of the Grantee and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. The Company may require that the certificate evidencing such Shares be held by the Company until all restrictions on such Shares have lapsed. | |
C. | Restrictions. Subject to the provisions of the Plan and the Award Documents, during a period set by the Committee commencing with the date of such Award, which period shall extend for at least six months from the date of such Award (except as provided by Section 9.G), the Grantee shall not be permitted to sell, transfer, pledge, assign, or otherwise dispose of the Restricted Stock awarded under the Plan. | |
D. | Lapse of Restrictions. Subject to the provisions of the Plan and the Award Document, restrictions upon Restricted Stock shall lapse at such time or times and on such terms and conditions as the Committee may determine and set forth in the Award Document;provided, however,that the restrictions upon such Shares shall lapse only if the Grantee on the date of such lapse is, and has continuously been an employee of the Company or its Affiliate from the date such Award was granted. The Award Document may provide for the lapse of restrictions in installments, as determined by the Committee. In the event that a Grantee’s employment terminates as a result of the Grantee’s death or Disability, all remaining restrictions with respect to such Grantee’s Restricted Stock shall immediately lapse, unless otherwise provided in the Award Document. |
E. | Rights of the Grantee. Grantees may have such rights with respect to the Shares subject to an Award as may be determined by the Committee and set forth in the Award Document, including, without limitation, the right to vote such Shares and the right to receive dividends paid with the respect to such Shares. |
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F. | Dividends. The Committee may, in its sole discretion, provide in an Award Document that an amount equivalent to any dividends payable with respect to the number of Shares of Restricted Stock granted, but not yet delivered, be invested and reinvested in additional Shares of Restricted Stock, which shall be subject to the same restrictions as Restricted Stock to which the dividends relate. Such Shares of Restricted Stock shall be reflected in accordance with the terms of the Award Document by the credit of additional full or fractional Shares, calculated to the thousandth of a Share, in an amount equal to the value of the declared dividend divided by the Fair Market Value of a Share on the date of payment of the dividend. Any arrangements for the credit of additional Shares of Restricted Stock shall terminate if, and to the extent that, under the terms of the Award Document the right to receive the Restricted Stock to which the dividends relate shall terminate or lapse. |
G. | Forfeiture of Restricted Stock. In the event that a Grantee’s employment with the Company terminates for any reason other than because of death or Disability, any Restricted Stock held by such Grantee shall be forfeited by the Grantee and reacquired by the Company. The Company may, in its sole discretion, waive, in whole or in part, any remaining restrictions with respect to such Grantee’s Restricted Stock. |
H. | Delivery of Shares. When the restrictions imposed on Restricted Stock expire or have been canceled with respect to one or more Shares (whether issued as an Award or as additional Restricted Stock pursuant to Section 9.F), the Company shall notify the Grantee that such restrictions no longer apply with respect to such Shares, and shall deliver to the Grantee (or the person to whom ownership rights in such Restricted Stock may have passed by will or the laws of descent and distribution) a certificate for the number of Shares for which restrictions have been canceled or have expired, without any legend or restrictions (except those that may be imposed by the Committee in its sole judgment to ensure compliance with the then existing requirements of the Act and the Exchange Act). The right to payment for any fractional Shares that may have accrued shall be satisfied in cash based on the Fair Market Value of a Share on the date the restriction with respect to such fractional Share lapsed or terminated. |
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A. | Performance-Based Awards. The Committee may grant Awards of Restricted Stock pursuant to the terms of this Section 16, and consistent with Section 9, above, which shall include vesting requirements based specifically on the attainment of one or more Performance Targets applicable to any such Award, as set forth in this Section 16. In the event a Participant who has been granted a Performance-Based Award terminates his or her employment with the Company prior to the date on which the applicable Performance Target or Targets have been met or prior to the satisfaction of any other applicable conditions or requirements have been met or satisfied, such Performance-Based Award shall be immediately forfeited. In addition, the Committee shall have the authority to cause a Performance-Based Award to be forfeited, in whole or in part, at any time prior to the Committee’s determination that such Performance-Based Award has become vested by reason of attainment of one or more of the applicable Performance Targets, at the Committee’s sole discretion. Such absolute right to reduce or eliminate a Performance-Based Award shall be exercised by the Committee in light of the Committee’s review of all facts and circumstances the Committee deems to be relevant. The Committee shall have no authority to cause any Performance-Based Award to become vested in the absence of the achievement of any applicable Performance Target(s). |
B. Establishment of Performance Targets. |
1. | The Committee shall establish one or more Performance Targets for each Performance Period, which Performance Targets may vary for different Participants who may be granted Performance-Based Awards. | |
2. | In all cases, the Performance Target(s) established with respect to any Performance Period shall be established within the first 90 days of the Performance Period or, if shorter, within the first twenty five percent (25%) of such Performance Period. | |
3. | Each Performance Target established under the Plan shall constitute a goal as to which an objective method or methods is available for determining whether such Performance Target has been achieved. In addition, the Committee shall establish in connection with the Performance Targets applicable to a Performance Period an objective method for computing the |
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portion of a particular Performance-Based Award that may be treated as vested as a result of attaining such Performance Target(s). |
C. | Vesting of Performance-Based Awards. Vesting of Performance-Based Awards shall be determined at the time (or times) and in the manner established by the Committee for a Performance Period;provided, however,that no portion of a Performance-Based Award shall become vested unless and until (i) the Plan (including the provisions of this Section 16 of the Plan) is approved by the Company’s shareholders (and such shareholder approval is still effective for purposes of the rules on performance-based compensation applicable in connection with Code Section 162(m), as required under Section 16.D), and (ii) the Committee has certified in writing that each Performance Target for the particular Performance Period for which a Performance-Based Award is granted has been achieved. | |
D. | Subsequent Shareholder Approval. The Plan (including the provisions of this Section 16) shall again be disclosed to the Company’s shareholders for approval at the time or times required under Code Section 162(m) and/or Treasury Regulations promulgated thereunder in order for the Performance-Based Awards granted under the Plan to continue to qualify as performance-based compensation that is exempt from the limitations on deductibility by the Company of compensation under Code Section 162(m). No Performance-Based Awards shall become vested if such required shareholder approval has not been obtained. |
E. | Criteria to be Used in Establishing Performance Targets. In establishing any Performance Target under the Plan, the Committee shall establish an objective target based upon one or more of the following business criteria (which may be determined for these purposes by reference to (i) the Company as a whole, (ii) any of the Company’s subsidiaries, operating divisions, business segments or other operating units, or (iii) any combination thereof): earnings before interest, taxes, depreciation, and amortization; profit before taxes; stock price; market share; gross revenue; net revenue; pretax income; net operating income; cash flow; earnings per share; return on equity; return on invested capital or assets; cost reductions and savings; return on revenues or productivity; loss ratio; expense ratio; combined ratio; product spread; or any variations or combinations of the preceding business criteria, which may also be modified at the discretion of the Committee, to take into account extraordinary items or which may be adjusted to reflect such costs or expense as the Committee deems appropriate. | |
F. | Performance-Based Award Limitation. Notwithstanding anything to the contrary herein, no Participant shall receive a Performance-Based Award for Shares having a Fair Market Value, as of the date of grant, in excess of $3,000,000. |
1. | The limitation set forth in this Section 16.F shall be applied with respect to Performance-Based Awards that relate to a Performance Period longer than one year by multiplying that limitation by a fraction equal to the number of full calendar months in the Performance Period divided by twelve (12). | |
2. | If a Performance Period is less than a full year, the limitation of this Section 16.F shall apply without adjustment;provided, however,that any |
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such short Performance Period shall be treated as though it were a Performance Period that extends until the end of the one year period that starts as of the first day of the short Performance Period, and any other Performance Periods that overlap such one year period will be subject to further limitations as though such Performance Periods were overlapping Performance Periods, as described in subsection 16.F.3. | ||
3. | If Performance-Based Awards with overlapping Performance Periods are granted to any one employee, the limitations of this Section 16.F shall be reduced with respect to any such overlapping Performance Periods so that the aggregate value of such multiple Performance-Based Awards does not exceed the limitation set forth in the first sentence of this Section 16.F, multiplied by a fraction, the numerator of which is the number of full calendar months occurring during the period commencing as of the first day of the first to start of such overlapping Performance Periods, and the last day of which is the last day of the last to end of such overlapping Performance Periods, and the denominator of which is twelve (12). |
B-12
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envelope provided as soon as possible.
(1-800-776-9437) from any touch-tone telephone and follow
the instructions. Have your proxy card available when you call.
on-screen instructions. Have your proxy card available when you access the web page.
COMPANY NUMBER | |||||
ACCOUNT NUMBER | |||||
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx
1. Election of Directors: | ||
o | FOR ALL NOMINEES | |
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | |
o | FOR ALL EXCEPT (See instructions below) |
NOMINEES: | ||
O | Robert B. Bank | |
O | Byron L. Bergren | |
O | Philip M. Browne | |
O | Shirley A. Dawe | |
O | Marsha M. Everton | |
O | Michael L. Gleim | |
O | Tim Grumbacher | |
O | Robert E. Salerno | |
O | Thomas W. Wolf |
INSTRUCTION: | To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here:l |
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o |
FOR | AGAINST | ABSTAIN | ||||||
2. | Amendment of The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive Plan. | o | o | o | ||||
3. | Ratification of appointment of KPMG LLP as the Company’s independent auditor. | o | o | o |
Signature of Shareholder | | Date: | | Signature of Shareholder | | Date: | |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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THE BON-TON STORES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of THE BON-TON-STORES, INC. (the “Company”) hereby appoints Byron L. Bergren and James H. Baireuther, or either of them, with full power of substitution, to act as attorneys and proxies for the undersigned and to vote all shares of stock of the Company which the undersigned is entitled to vote if personally present at the Annual Meeting of Shareholders of the Company, to be held at the Yorktowne Hotel, 48 E. Market Street, York, PA 17401 on June 20, 2006, at 9:00 a.m., provided that said proxies are authorized and directed to vote as indicated below with respect to the matters set forth on the opposite side of this proxy.
UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED “FOR” THE ELECTION OF ALL NOMINATED DIRECTORS, “FOR” AMENDMENT OF THE BON-TON STORES, INC. AMENDED AND RESTATED 2000 STOCK INCENTIVE PLAN, AND “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT AUDITOR. This proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the meeting.
(To be signed on reverse side)
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ANNUAL MEETING OF SHAREHOLDERS OF
THE BON-TON STORES, INC.
June 20, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
êPlease detach along perforated line and mail in the envelope provided.ê
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSALS 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx
1. Election of Directors: | ||
o | FOR ALL NOMINEES | |
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | |
o | FOR ALL EXCEPT (See instructions below) |
NOMINEES: | ||
O | Robert B. Bank | |
O | Byron L. Bergren | |
O | Philip M. Browne | |
O | Shirley A. Dawe | |
O | Marsha M. Everton | |
O | Michael L. Gleim | |
O | Tim Grumbacher | |
O | Robert E. Salerno | |
O | Thomas W. Wolf | |
INSTRUCTION: | To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here:l |
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o |
FOR | AGAINST | ABSTAIN | ||||||
2. | Amendment of The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive Plan. | o | o | o | ||||
3. | Ratification of appointment of KPMG LLP as the Company’s independent auditor. | o | o | o |
Signature of Shareholder | | Date: | | Signature of Shareholder | | Date: | |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |