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PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
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The Bon-Ton Stores, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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2

[BON-TON LOGO]
THE BON-TON STORES, INC.
2801 EAST MARKET STREET
YORK, PA 17402

May 15, 2001

Dear Shareholder:

You are cordially invited to attend our Annual Meeting of Shareholders to
be held at 9:00 a.m. on Tuesday, June 19, 2001, at the Heritage Hills Conference
Center, 2700 Mount Rose Avenue, York, Pennsylvania. Enclosed is the official
notice of meeting, the proxy statement, the proxy card and our 2000 Annual
Report.

You may now vote your shares via the Internet by accessing the voting site
shown on your proxy card, or you may vote by telephone by calling the toll-free
number shown on your proxy card. In either case you will need the "control
number" that is imprinted on your proxy card. I encourage you to try one of
these new voting methods this year.

Your vote is important to us. Even if you plan to attend the meeting,
please sign, date and return your proxy in the enclosed postage-paid envelope or
vote by telephone or over the Internet.

Sincerely,

/s/ Tim Grumbacher

Tim Grumbacher
Chairman of the Board and
Chief Executive Officer
3

THE BON-TON STORES, INC.
2801 EAST MARKET STREET
YORK, PA 17402

NOTICE OF ANNUAL MEETING

The Annual Meeting of Shareholders of The Bon-Ton Stores, Inc. will be held
on Tuesday, June 19, 2001, at 9:00 a.m., at the Heritage Hills Conference
Center, 2700 Mount Rose Avenue, York, Pennsylvania.

The purposes of this year's meeting are:

1. To elect a Board of Directors for a one-year term; and

2. To consider any other matters as may properly come before the
meeting.

Shareholders who owned shares of our stock at the close of business on May
4, 2001 may attend and vote at the meeting. If you cannot attend the meeting,
you may vote by telephone or over the Internet as instructed on the enclosed
proxy card or by mailing the proxy card in the enclosed postage-prepaid
envelope. Any shareholder attending the meeting may vote in person, even though
he or she has already returned a proxy card or voted by telephone or over the
Internet.

ROBERT E. STERN
Vice President and
Corporate Secretary

York, Pennsylvania
May 15, 2001
- --------------------------------------------------------------------------------

PLEASE VOTE BY TELEPHONE OR OVER THE INTERNET AS INSTRUCTED ON THE ENCLOSED
PROXY CARD OR COMPLETE, SIGN AND DATE THE PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU VOTE BY TELEPHONE OR OVER THE
INTERNET, DO NOT RETURN YOUR PROXY CARD.
- --------------------------------------------------------------------------------
4

CONTENTS

Voting Securities and Security Ownership.................... 2
Outstanding Shares and Voting Rights...................... 2
Principal Shareholders.................................... 3
Security Ownership of Management.......................... 5
Election of Directors....................................... 6
Meetings and Committees of the Board of Directors......... 7
Compensation of Directors................................. 7
Executive Compensation...................................... 8
Summary Compensation Table................................ 8
Stock Option Grants....................................... 8
Stock Option Exercises and Holdings....................... 9
Employment Agreements..................................... 9
Supplemental Retirement Benefits.......................... 10
Executive Severance....................................... 10
Stock Performance Graph..................................... 10
Report on Executive Compensation............................ 11
Report of the Audit Committee............................... 13
Accountant's Fees........................................... 14
Relationship with Independent Accountants................... 14
Section 16(a) Beneficial Ownership Reporting Compliance..... 14
Incorporation by Reference.................................. 14
Certain Transactions........................................ 15
Shareholder Proposals....................................... 15
Appendix A -- Audit Committee Charter....................... A-1

1
5

THE BON-TON STORES, INC.
------------------------

PROXY STATEMENT

We are providing this proxy statement to solicit your proxy for use at the
Annual Meeting of Shareholders. The proxy materials, which consist of the Annual
Report, the Notice of Annual Meeting, this proxy statement and the proxy card,
are first being sent to our shareholders on or about May 15, 2001.

We do not anticipate that any matters will be raised at the meeting other
than those described in the notice. If any other matters come before the
meeting, your proxies will be authorized to act in accordance with their
judgment.

When your proxy card is returned properly signed, or you have effectively
voted over the Internet or by telephone, your shares will be voted in accordance
with your instructions. If your proxy card is signed and returned without
specifying choices, shares will be voted "for" the Board nominees.

You may revoke your proxy before its exercise by notifying the Secretary of
the Company in writing, by delivering a properly executed, later-dated proxy
card, by voting again over the Internet or by telephone, or by voting in person
at the meeting.

Your proxy is being solicited by the Board of Directors. We will bear the
cost of this solicitation, including the charges of brokerage houses, nominees
and fiduciaries in forwarding these materials to beneficial owners. This
solicitation may be made in person or by telephone or telecopy by our directors,
officers or employees, or by a professional proxy solicitation organization
engaged by us.

References in this proxy statement to a year refer to our fiscal year,
which is the 52 or 53 week period ending on the Saturday nearer January 31 of
the following calendar year (for example, a reference to 2000 is a reference to
the fiscal year ended February 3, 2001).

VOTING SECURITIES AND SECURITY OWNERSHIP

OUTSTANDING SHARES AND VOTING RIGHTS

Only shareholders of record at the close of business on May 4, 2001 are
entitled to vote at the meeting. At that time, there were 12,494,456 shares of
common stock and 2,989,853 shares of Class A common stock outstanding. The
common stock and the Class A common stock vote together on all matters. Holders
of common stock are entitled to one vote per share and holders of Class A common
stock are entitled to ten votes per share. There are no other classes of voting
securities outstanding. In the election of directors, shareholders do not have
cumulative voting rights.

The presence at the meeting, in person or by proxy, of persons entitled to
cast a majority of the shareholder votes will constitute a quorum.

In the election of directors, the nine nominees receiving a plurality of
the votes cast (that is, the nine nominees receiving the greatest number of
votes) will be elected. Approval of any other matter submitted to the
shareholders requires the affirmative vote of a majority of the votes cast. For
purposes of determining the number of votes cast on any matter, only those cast
"for" or "against," or, in the election of directors, "withhold," are included.
Abstentions and broker non-votes are counted only to determine whether a quorum
is present at the meeting. A broker "non-vote" occurs when a nominee for a
beneficial owner does not vote on a particular matter because the nominee does
not have discretionary voting power as to that item and has not received voting
instructions from the beneficial owner.

If you own common stock in your own name, you are an "owner of record."
This means that you may use the enclosed proxy card to tell the persons named as
proxies how to vote your shares. If you fail to vote, the proxies cannot vote
your shares at the meeting.

2
6

You have four voting options:

- INTERNET: You can vote over the Internet at the web 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 telephone 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 OVER THE
TELEPHONE, DO NOT RETURN YOUR PROXY CARD.

- PROXY CARD: You can vote by mail by signing, dating and mailing your
proxy card in the postage-paid envelope which we have provided.

- VOTE IN PERSON: You can attend the Annual Meeting and vote at the
meeting.

If a broker, bank or other nominee holds your common stock for your benefit
but not in your name, your shares are in "street name." In that case, your bank,
broker or other nominee will send you a voting instruction form to use in voting
your shares. The availability of Internet and telephone voting depends on their
voting processes. Please follow the instructions on the voting instruction form
they send you.

If you are a participant in The Bon-Ton Stores, Inc. Profit
Sharing/Retirement Plan (the "401(k) Plan"), your proxy will incorporate all
shares you own through the 401(k) Plan, assuming your shares are registered in
the same name. Your proxy will serve as a voting instruction for the trustee of
the 401(k) Plan. If you own shares through the 401(k) Plan and you do not vote,
the plan trustee will vote your shares in the same proportion as shares for
which instructions were received from other shareholders under the plan.

The named proxies will vote all shares at the meeting that have been
properly voted (whether by Internet, telephone, or mail) and not revoked. If you
sign and return your proxy card but do not mark your proxy card to tell the
proxies how to vote your shares, the proxies will vote "for" the Board nominees.
If action is taken at the meeting on matters that are not described in this
proxy statement, the proxies will use their own judgment to determine how to
vote your shares.

Tim Grumbacher, who is the holder of shares of common stock and Class A
common stock entitled to vote approximately 77% of the votes entitled to be cast
at the meeting, has indicated that he will vote "for" each of the nominees for
director. Consequently, the election of each of the nominees for director is
assured.

PRINCIPAL SHAREHOLDERS

This table shows owners of 5% or more of the common stock or Class A common
stock as of April 12, 2001, unless otherwise noted. Each person listed has sole
voting power and sole investment power as to the shares indicated unless
otherwise noted.

CLASS A COMMON STOCK COMMON STOCK(1)
--------------------- ---------------------
NUMBER OF NUMBER OF
NAME AND ADDRESS SHARES PERCENT SHARES PERCENT
- ---------------- --------- ------- --------- -------

Tim Grumbacher................................... 2,951,490(2) 98.7% 5,987,997(3) 39.4%
2801 East Market Street
York, PA 17402
Nancy T. Grumbacher.............................. 545,237(4) 18.2% 1,082,464(5) 8.5%
2801 E. Market Street
York, PA 17402
Dimensional Fund Advisors, Inc. ................. -- -- 906,200(6) 7.4%
1299 Ocean Avenue
Santa Monica, CA 90401
T. Rowe Price Associates, Inc. .................. -- -- 900,800(7) 7.4%
100 E. Pratt Street
Baltimore, MD 21202

3
7

Henry F. Miller.................................. 545,237(4) 18.2% 891,691(8) 7.0%
1650 Arch Street -- 22nd Floor
Philadelphia, PA 19103
David R. Glyn.................................... 545,237(4) 18.2% 871,741(9) 6.8%
1650 Arch Street -- 22nd Floor
Philadelphia, PA 19103

- ---------------
(1) Each share of Class A common stock is convertible into one share of common
stock. 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 545,237 shares of Class A common stock held by trusts for the
benefit of Tim Grumbacher's children of which Nancy T. Grumbacher (Mr.
Grumbacher's wife), Henry F. Miller and David R. Glyn are the trustees. Mr.
Grumbacher disclaims beneficial ownership of all shares referred to in this
note.

(3) Includes (a) 185,773 shares of common stock held by The Grumbacher Family
Foundation, a charitable foundation of which Tim Grumbacher, Nancy T.
Grumbacher and David J. Kaufman are the directors, (b) 545,237 shares of
Class A common stock and 321,504 shares of common stock held by trusts for
the benefit of Mr. Grumbacher's children of which Ms. Grumbacher, Henry F.
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
Ms. Grumbacher and Mr. Miller are the trustees, and (d) 5,000 shares of
common stock held by a trust for the benefit of Mr. Grumbacher's grandchild
of which Ms. Grumbacher, Beth Elser and Mr. Glyn are the trustees. Mr.
Grumbacher disclaims beneficial ownership of all shares referred to above.
Also includes options to purchase 44,550 shares.

(4) Consists of Class A common stock held by trusts for the benefit of Tim
Grumbacher's children of which Nancy T. Grumbacher, Henry F. Miller and
David R. Glyn are the trustees. Ms. Grumbacher, Mr. Miller and Mr. Glyn each
disclaim beneficial ownership of all shares referred to in this note.

(5) Consists of (a) 185,773 shares of common stock held by The Grumbacher Family
Foundation, a charitable foundation of which Nancy T. Grumbacher, Tim
Grumbacher and David J. Kaufman are the directors, (b) 545,237 shares of
Class A common stock and 321,504 shares of common stock held by trusts for
the benefit of Tim Grumbacher's children of which Ms. Grumbacher, Henry F.
Miller and David R. Glyn are the trustees, (c) 24,950 shares of common stock
held by trusts for the benefit of Tim Grumbacher's children of which Ms.
Grumbacher and Mr. Miller are the trustees, and (d) 5,000 shares of common
stock held by a trust for the benefit of Tim Grumbacher's grandchild of
which Ms. Grumbacher, Beth Elser and Mr. Glyn are the trustees. Ms.
Grumbacher disclaims beneficial ownership of all shares referred to in this
note.

(6) Based solely on a Schedule 13G dated February 2, 2001 filed with the SEC by
Dimensional Fund Advisors, Inc. These shares are owned by investment
companies, trusts and accounts as to which Dimensional is investment advisor
or manager, and Dimensional disclaims beneficial ownership of all such
shares.

(7) Based solely on a Schedule 13G dated February 14, 2001 filed with the SEC by
T. Rowe Price Associates, Inc. ("Price Associates") and its affiliate. The
Schedule 13G indicates that, pursuant to reporting requirements, Price
Associates is the beneficial owner of such shares; however, Price Associates
disclaims that it is the beneficial owner of all such shares.

(8) Consists of (a) 24,950 shares of common stock held by trusts for the benefit
of Tim Grumbacher's children, of which Nancy T. Grumbacher and Henry F.
Miller are the trustees, and (b) 545,237 shares of Class A common stock and
321,504 shares of common stock held by other trusts for the benefit of Tim
Grumbacher's children of which Ms. Grumbacher, Mr. Miller and David R. Glyn
are the trustees. Mr. Miller disclaims beneficial ownership of all shares
referred to in this note.

4
8

(9) Consists of (a) 545,237 shares of Class A common stock and 321,504 shares of
common stock held by trusts for the benefit of Tim Grumbacher's children of
which Nancy T. Grumbacher, Henry F. Miller and David R. Glyn are the
trustees, and (b) 5,000 shares of common stock held by a trust for the
benefit of Tim Grumbacher's grandchild of which Ms. Grumbacher, Beth Elser
and Mr. Glyn are the trustees. Mr. Glyn disclaims beneficial ownership of
all shares referred to in this note.

The holders of the Class A common stock have entered into an agreement
granting Tim Grumbacher (or his personal representative) the right of first
refusal to acquire any shares of Class A common stock proposed to be
transferred.

SECURITY OWNERSHIP OF MANAGEMENT

This table shows as of April 12, 2001, the holdings of our Chief Executive
Officer, the four other most highly compensated executive officers during 2000,
and of Heywood Wilansky, who served as Chief Executive Officer for a part of the
year (the "named executives"), and of each director, and of all directors and
executive officers as a group. Each person listed has sole voting power and sole
investment power with respect to the shares indicated, unless otherwise noted.

CLASS A COMMON STOCK COMMON STOCK(1)
----------------------- -----------------------
SHARES SHARES
BENEFICIALLY BENEFICIALLY
NAME OWNED PERCENT OWNED PERCENT
- ---- ------------ ------- ------------ -------

Tim Grumbacher..................................... 2,951,490(2) 98.7% 5,987,997(3) 39.4%
Michael L. Gleim................................... -- -- 396,528(4) 3.2%
Frank Tworecke..................................... -- -- 83,916(5) *
James H. Baireuther................................ -- -- 75,000(4) *
H. Stephen Evans................................... -- -- 53,358(4) *
Samuel J. Gerson................................... -- -- 5,000(4) *
Lawrence J. Ring................................... -- -- 7,000(4) *
Robert C. Siegel................................... -- -- 4,000(4) *
Leon D. Starr...................................... -- -- 25,580(6) *
Leon F. Winbigler.................................. -- -- 20,000(4) *
Thomas W. Wolf..................................... -- -- 7,000(4) *
Heywood Wilansky................................... -- -- 589,467(7) 4.8%
All directors and executive officers as a group (21
persons)......................................... 2,951,490 98.7% 7,560,456(8) 48.2%

- ---------------
* less than 1%

(1) See note (1) to Principal Shareholders table.

(2) See note (2) to Principal Shareholders table.

(3) See note (3) to Principal Shareholders table.

(4) Includes options to purchase the number of shares indicated: Mr.
Gleim -- 183,949 shares; Mr. Baireuther -- 30,000 shares; Mr.
Evans -- 50,598 shares; Mr. Gerson -- 4,000 shares; Mr. Ring -- 4,000
shares; Mr. Siegel -- 2,000 shares; Mr. Winbigler -- 3,000 shares; and Mr.
Wolf -- 2,000 shares.

(5) Includes 2,250 shares owned by Mr. Tworecke's children, as to which Mr.
Tworecke disclaims beneficial ownership, and options to purchase 66,666
shares.

(6) Includes 21,500 shares owned by Mr. Starr's spouse, as to which Mr. Starr
disclaims beneficial ownership, and options to purchase 1,500 shares.

(7) Mr. Wilansky was formerly President and Chief Executive Officer -- he is no
longer with the Company. The information provided is as of June 27, 2000.

(8) Includes options to purchase 506,766 shares.

5
9

PROPOSAL

ELECTION OF DIRECTORS

The Board proposes the following nominees for election as directors to hold
office until the 2002 Annual Meeting of Shareholders and until their respective
successors have been elected. Each is currently a director and has agreed to
serve if elected. Should a nominee become unable or decline to serve before the
Annual Meeting, the proxies may vote for a substitute the Board recommends
unless the Board reduces the number of directors.

TIM GRUMBACHER -- Director since 1967. Age 61. Chairman of the Board of The
Bon-Ton since August 1991, and Chief Executive Officer since June 2000. From
1977 to 1989 he was President and from 1985 to 1995 he was Chief Executive
Officer of The Bon-Ton.

SAMUEL J. GERSON -- Director since 1996. Age 59. Director of Allmerica
Financial Corp., an insurance company. Mr. Gerson is a trustee emeritus of the
Kennedy Library Foundation, trustee associate of Boston College, and a board
member of Herald Media Group, Inc. and of College Coach, Inc. Mr. Gerson was
Chairman and Chief Executive Officer of Filene's Basement Corp. from 1984 to
June 2000. Filene's Basement Corp. filed for relief under Chapter 11 of the
Bankruptcy Code in August 1999, and sold substantially all its assets in March
2000.

MICHAEL L. GLEIM -- Director since 1991. Age 58. Vice Chairman and Chief
Operating Officer of The Bon-Ton since December 1995. From 1991 to December 1995
he was Senior Executive Vice President and from 1989 to 1991 he was Executive
Vice President of The Bon-Ton.

LAWRENCE J. RING -- Director since 1997. Age 52. Professor of Business
Administration at the College of William and Mary's Graduate School of Business
Administration in Williamsburg, Virginia for more than five years. Dr. Ring also
conducts an international consulting and executive education practice, and is a
director of Specialty Stores, Ltd., a retailer headquartered in Durban, South
Africa.

ROBERT C. SIEGEL -- Director since 1998. Age 64. Consultant to the apparel
and footwear industry since December 1998. From December 1993 to December 1998,
he was Chairman and Chief Executive Officer of The Stride Rite Corporation, a
shoe manufacturer and retailer. Mr. Siegel is a director of McNaughton Apparel
Group, Inc., a women's sportswear manufacturer, and of Skechers U.S.A., Inc., a
footwear manufacturer and retailer.

LEON D. STARR -- Director since 1991. Age 82. Management consultant to
department and specialty stores since 1984. Before that, he held various
positions with Allied Stores Corporation, a national operator of department
stores, for over 35 years.

FRANK TWORECKE -- Director since 1999. Age 54. Vice Chairman -- Chief
Merchandising Officer at The Bon-Ton since November 1999. From January 1996
until November 1999, he was President and Chief Operating Officer of Jos. A.
Bank Clothiers.

LEON F. WINBIGLER -- Director since 1991. Age 75. Retired Chairman and
Chief Executive Officer of Mercantile Stores Company, Inc., a national
department store operator.

THOMAS W. WOLF -- Director since 1998. Age 52. President of the Wolf
Organization, Inc., a building materials manufacturer and distributor, since
1985. He is a director of Waypoint Financial Corporation, a savings and loan
association, and of Irex Corporation, a national building contractor.

6
10

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During 2000, the Board held five meetings and took action by unanimous
consent without a meeting twice. The Board has an Executive Committee, an Audit
Committee and a Compensation and Stock Option Committee but does not have a
Nominating Committee. The primary functions of the committees are as follows:

Executive Committee - has the authority to act in place of the Board on
certain specified matters.

- members are Tim Grumbacher, Frank Tworecke and
Michael L. Gleim.

- held twelve meetings during 2000.

Audit Committee - reviews our internal controls, our auditing,
accounting and financial reporting processes, and
handles matters relating to our independent
accountants.

- oversees our regulatory and ethical compliance.

- members are Samuel J. Gerson, Lawrence J. Ring,
Robert C. Siegel, Leon F. Winbigler and Thomas W.
Wolf.

- held two meetings during 2000.

Compensation and Stock
Option Committee - determines the compensation of the Chairman of
the Board and Chief Executive Officer, the Vice
Chairman and Chief Operating Officer, and the
Vice Chairman and Chief Merchandising Officer,
and oversees the compensation of all other
employees.

- administers our stock option and compensation
plans.

- members are Samuel J. Gerson, Lawrence J. Ring,
Robert C. Siegel, Leon F. Winbigler and Thomas W.
Wolf.

- held two meetings during 2000.

No director attended fewer than 75% of the total number of meetings of the
Board and committees on which he served.

COMPENSATION OF DIRECTORS

We do not pay employee directors any separate compensation for serving as
directors. We pay each non-employee director who is not a consultant to The
Bon-Ton an annual fee of $20,000, $2,000 for attendance at each Board meeting
and $1,000 for attendance at each committee meeting. Each non-employee director
also receives an annual grant of options to purchase shares of common stock, the
amount of shares to be determined each year by the Compensation and Stock Option
Committee. Each non-employee director who is a consultant to The Bon-Ton
receives one-half of the compensation paid, and one-half of the options granted,
to a non-employee director. Mr. Starr is the only non-employee director who
provides consulting services to us. We reimburse all directors for any expenses
related to their Board service.

Mr. Starr has rendered consulting services to The Bon-Ton since 1984 and
received approximately $65,000 in consulting fees in 2000. We anticipate we will
pay Mr. Starr approximately $65,000 in consulting fees in 2001.

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11

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

This table sets forth, for the last three years, the compensation paid or
accrued to each of the named executives:

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) AWARDS ($) OPTIONS (#) COMPENSATION ($)
- ----------------- ---- ---------- --------- ---------------- ---------- ----------- ----------------

Tim Grumbacher............. 2000 278,846 -- 9,302 -- -- --
Chairman of the 1999 350,000 -- 8,445 -- -- --
Board of Directors and 1998 350,000 73,626 8,061 -- -- --
Chief Executive Officer
Michael L. Gleim........... 2000 483,536 75,000 11,030 -- -- --
Vice Chairman and 1999 441,090 93,968 11,100 -- -- --
Chief Operating Officer 1998 427,659 110,550 11,436 40,000(1) 15,000 49,575
Frank Tworecke(2).......... 2000 484,754 75,000 144,595(3) -- -- --
Vice Chairman and 1999 90,000 -- 31,471 -- -- --
Chief Merchandising
Officer
James H. Baireuther........ 2000 319,115 30,000 9,724 -- -- --
Executive Vice President, 1999 258,115 35,000 9,229 -- -- 28,220
Chief Financial Officer 1998 239,192 35,000 9,076 -- 10,000 99,040
H. Stephen Evans........... 2000 271,572 6,753 15,358 -- -- --
Senior Vice President, 1999 254,810 17,348 14,650 -- -- --
Real Estate, Legal and 1998 244,816 19,210 14,729 -- -- --
Governmental Affairs
Heywood Wilansky(4)........ 2000 1,042,299 170,000 40,759 -- -- 718,749(5)
Former President and 1999 1,000,000 587,935 455,833 -- -- 427,082
Chief Executive Officer 1998 996,154 621,100 106,471 3,562,500 250,000 989,591

- ---------------
(1) This represents a grant of 5,000 restricted shares, which will vest on
August 31, 2001. The value of these restricted shares at the end of 2000 was
$15,625.

(2) Mr. Tworecke joined the Company in 1999.

(3) Includes $123,802 of payments made by the Company to Mr. Tworecke pursuant
to the loan repayment provisions of his employment contract.

(4) In June 2000, Mr. Wilansky ceased to be an employee of the Company. Pursuant
to his separation agreement, the restricted stock previously granted to him
became fully vested. In addition, Mr. Wilansky will continue to receive his
base salary of $1,000,000 per year and other benefits through January 31,
2003, subject to mitigation requirements contained in the separation
agreement, and he is entitled to the benefits available under the
supplemental retirement plan previously established for him. These benefits
represent a $5.7 million liability to the Company as of February 3, 2001.

(5) Represents the value of restricted stock which became fully vested.

STOCK OPTION GRANTS

No stock option grants were made to any of the named executives during
2000. We do not have any plan which permits the granting of stock appreciation
rights.

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12

STOCK OPTION EXERCISES AND HOLDINGS

There were no options exercised by any of the named executives during 2000.

The following table shows the number and value of unexercised stock options
for the named executives during 2000.

OPTION VALUES AT FEBRUARY 3, 2001

NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FEBRUARY 3, 2001 AT FEBRUARY 3, 2001(1)
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------

Tim Grumbacher............................. 44,550 -- -- --
Michael L. Gleim........................... 183,949 5,000 -- --
Frank Tworecke............................. 66,666 133,334 -- --
James H. Baireuther........................ 26,667 3,333 -- --
H. Stephen Evans........................... 49,598 1,000 -- --
Heywood Wilansky........................... -- -- -- --

- ---------------
(1) In-the-money options are options having an exercise price below $3.125, the
year-end share price. Value is calculated by multiplying the difference
between the option exercise price and $3.125 by the number of shares
underlying the option.

EMPLOYMENT AGREEMENTS

Michael L. Gleim

Mr. Gleim's employment agreement expires January 31, 2002 and provides for
an annual base salary of $450,000. He is also eligible for an annual bonus to be
determined by the Compensation Committee. If Mr. Gleim is discharged without
cause or resigns for good reason (each as defined in his employment agreement),
he will continue to receive his base salary and other benefits for the greater
of the remaining term of the agreement or one year from termination of
employment.

Frank Tworecke

Mr. Tworecke's employment agreement commenced November 11, 1999 and
continues to February 1, 2003. It provides for an annual base salary of $450,000
and a bonus in accordance with criteria established by the Compensation
Committee up to a maximum bonus of 75% of his base salary. If Mr. Tworecke is
discharged without cause or resigns for good reason (each as defined in the
employment agreement), he will continue to receive his base salary and other
benefits for one year if the discharge or resignation occurs after November 11,
2001, or for a year and a half if the discharge or resignation occurs earlier.

Heywood Wilansky

The Company entered into an employment agreement with Mr. Wilansky which
was to expire January 31, 2003, pursuant to which Mr. Wilansky was entitled to
receive an annual base salary of $1,000,000 and an annual bonus based on the
attainment of performance goals. The agreement provided that in the event the
Company discharged Mr. Wilansky without cause or Mr. Wilansky resigned for good
reason (each as defined in the agreement), Mr. Wilansky would continue to
receive his base salary and other benefits for the remaining term of the
agreement. As previously noted, Mr. Wilansky left the Company on June 27, 2000;
this termination of employment was deemed to be a discharge by the Company
without cause and, as such, Mr. Wilansky is entitled to receive his base salary
(paid in bi-weekly installments) for the remaining term of the agreement (i.e.,
until January 31, 2003). Mr. Wilansky also received a $170,000 cash bonus he
would have been entitled to receive for fiscal 2000 based solely on the
Company's performance. In addition, 333,333

9
13

shares of restricted stock issued to Mr. Wilansky and options to purchase
265,666 shares of the Company's common stock immediately vested upon Mr.
Wilansky's resignation. The stock options were exercisable for a period of 90
days. Mr. Wilansky did not exercise any of the stock options within the 90 day
period.

SUPPLEMENTAL RETIREMENT BENEFITS

The Company has established a nonqualified, unfunded retirement plan for
certain key executives. Under the terms of this plan, each participant is
entitled to an annual retirement benefit if he or she remains employed by the
Company for a stated period, with an increase in this annual benefit for each
full year thereafter that the participant remains so employed, subject, in some
cases, to a maximum annual benefit.

The table below reflects the benefits available under this plan.

ANNUAL IF EMPLOYED ANNUAL INCREASE MAXIMUM ANNUAL
PARTICIPANT BENEFIT THROUGH THEREAFTER BENEFIT
- ----------- ------- ----------------- --------------- --------------

Frank Tworecke................. $50,000 November 10, 2004 $15,000 $125,000
Michael L. Gleim............... 30,000 January 31, 2002 10,000 --
James H. Baireuther............ 30,000 February 1, 2005 10,000 80,000

EXECUTIVE SEVERANCE

We have entered into severance agreements with certain of our executive
officers other than Messrs. Grumbacher, Gleim and Tworecke, which generally
provide for payment of one year's base salary if the executive officer is
terminated without cause (as defined in such agreement).

STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total shareholder return on common stock from February 2, 1996 through February
3, 2001, the cumulative total return on the CRSP Total Return Index for The
Nasdaq Stock Market (US Companies) and the Nasdaq Retail Trade Stocks Index
during such period. The comparison assumes $100 was invested on February 2, 1996
in the Company's common stock and in each of the foregoing indices and assumes
the reinvestment of any dividends.

10
14

THE BON-TON STORES, INC.
STOCK PERFORMANCE GRAPH
FISCAL 2000
[STOCK PERFORMANCE GRAPH]

BON-TON NASDAQ NASDAQ RETAIL
------- ------ -------------

2/2/96 100 100 100
2/1/97 133.33 129.68 123.41
1/30/98 266.67 153.45 144.41
1/29/99 150 239.15 175.88
1/29/00 69.05 361.05 144.23
2/3/01 59.52 251.48 108.16

- --------------------------------------------------------------------------------
NASDAQ
Date NASDAQ RETAIL BON-TON
- --------------------------------------------------------------------------------

2/2/96 100.00 100.00 100.00
2/1/97 129.68 123.41 133.33
1/30/98 153.45 144.41 266.67
1/29/99 239.15 175.88 150.00
1/29/00 361.05 144.23 69.05
2/3/01 251.48 108.16 59.52
- --------------------------------------------------------------------------------

REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee, which consists of only non-employee directors,
approves all general policies affecting the compensation of The Bon-Ton's
executive officers. The Compensation Committee determines the compensation of
Tim Grumbacher, Chairman of the Board and Chief Executive Officer, Michael L.
Gleim, Vice Chairman and Chief Operating Officer, and Frank Tworecke, Vice
Chairman and Chief Merchandising Officer, and utilizes recommendations from the
Executive Committee with respect to the compensation of all other executive
officers, but retains the authority to determine the compensation of such other
executive officers and may accept, reject or modify, in its discretion, the
Executive Committee's recommendations.

The basic forms of executive compensation are annual compensation, in the
form of salary and bonus, and long-term incentives, currently consisting
primarily of stock options. The Compensation Committee seeks to achieve a mix of
these to properly compensate and motivate the Company's executives. In doing so,
the Compensation Committee considers various aspects of the Company's operating
results as well as its financial condition, and considers each executive's role
in such achievement.

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15

Annual Compensation -- Salary and Bonus

Annual compensation is comprised of a base salary and a possible bonus. The
base salaries of Michael L. Gleim and Frank Tworecke are established pursuant to
employment agreements which were approved by the Compensation Committee based on
a variety of factors, including the general level of executive compensation in
the industry, the general level of executive compensation at The Bon-Ton and the
evaluation of the importance of the executive to The Bon-Ton. The base salaries
of the remainder of the Company's senior executives are approved annually by the
Compensation Committee upon recommendations from the Executive Committee based
on such subjective factors as individual and Company performance. The
Compensation Committee commissions an independent contractor to conduct periodic
surveys of executive compensation in the department store industry and utilizes
such survey information in making its decisions on executive compensation.

The Compensation Committee believes it appropriate that an increasing
amount of the potential annual compensation for these senior executives be in
the form of an annual bonus which is dependent upon The Bon-Ton's performance.
The bonus for 2000 for each of Mr. Gleim and Mr. Tworecke was determined under a
bonus plan based on the Company's net income during 2000. The Compensation
Committee certified that bonuses be paid to these executives in the amounts
indicated in the Summary Compensation Table.

For executive officers other than Messrs. Grumbacher, Gleim and Tworecke,
we adopted the Management Incentive Plan, which provides for the granting of
cash bonuses to participants based on a combination of Company performance,
measured by earnings before interest, and the participant's individual
performance, measured against various personal goals and objectives established
at the beginning of the year. The Management Incentive Plan is currently
administered by the Compensation Committee. Bonus payouts are discretionary and
no bonus payouts may be made if the Company fails to achieve established minimum
performance goals. Management Incentive Plan participants had the right to elect
to receive a portion of their bonus in restricted shares of common stock which
shares were issued in the name of the participant but are not eligible for
resale until bonus awards for such participants are made. The Compensation
Committee may accelerate the vesting of the restricted shares.

A cash bonus award or option grant may, in addition, be made at the
discretion of the Compensation Committee without regard to whether any specified
criteria are met.

Compensation of the Chief Executive Officer

The Compensation Committee set the base salary for Tim Grumbacher for 2000,
prior to his resuming the position of Chief Executive Officer. This base salary
remained unchanged after Mr. Grumbacher resumed the position of Chief Executive
Officer. Mr. Grumbacher did not receive a bonus for 2000.

Mr. Wilansky, the Company's former Chief Executive Officer, left the
Company on June 27, 2000. Mr. Wilansky will continue to be compensated pursuant
to a severance agreement he entered into with the company that was approved by
the Compensation Committee. The terms of Mr. Wilansky's compensation are more
fully described above in the discussion of "Executive Compensation: Employment
Agreements."

Long-Term Incentives -- Stock Options and Restricted Stock Awards

The Compensation Committee administers The Bon-Ton Stores, Inc. 1991 Stock
Option Plan and The Bon-Ton Stores, Inc. 2000 Stock Incentive Plan, both of
which provide for the grant of stock options and restricted stock awards. These
options and awards are intended to help align the executive officers' interests
with those of shareholders by increasing such officers' stake in The Bon-Ton.

Stock options and restricted stock awards generally vest over a number of
years, and any unvested options or shares of restricted stock are usually
forfeited 90 days after termination of the recipient's employment. Such awards,
therefore, are also intended to encourage recipients to remain in the employ of
The Bon-Ton over a substantial period of time.

Of the 10,500 total stock options granted in 2000, none were granted to the
named executives.

12
16

Qualifying Executive Compensation for Deductibility Under Provisions of the
Internal Revenue Code

The Internal Revenue Code provides that a publicly-held corporation may not
generally deduct compensation for its chief executive officer and certain other
executive officers to the extent that compensation for the executive exceeds
$1,000,000 unless such compensation is "performance based" as defined in the
Code. The Compensation Committee does not anticipate that compensation for any
of the Company's executives shall exceed $1,000,000 in 2001. If any executive's
compensation may exceed that threshold, the Compensation Committee will take
such actions as are appropriate to qualify, to the extent it determines such
actions are in the best interests of the Company, compensation paid to
executives for deductibility under the Code. Nevertheless, the Compensation
Committee has in the past, and may in the future, recommend or approve payment
of compensation that may not be deductible under these provisions if the
Compensation Committee has determined that such payments are in the best
interests of the Company.

Members of the Compensation Committee:

Leon F. Winbigler, Chairman
Samuel J. Gerson
Lawrence J. Ring
Robert C. Siegel
Thomas W. Wolf

REPORT OF THE AUDIT COMMITTEE

The functions of the Audit Committee are focused on three areas:

- the adequacy of the Company's internal controls and financial reporting
process and the reliability of the Company's financial statements.

- the independence and performance of the Company's independent
accountants.

- the Company's compliance with legal and regulatory requirements.

The Audit Committee meets with management periodically to consider the
adequacy of the Company's internal controls and the objectivity of its financial
reporting. These matters are discussed with the Company's independent
accountants and with appropriate Company financial personnel.

The Audit Committee meets privately with the independent accountants who
have unrestricted access to the members of the Audit Committee. The Audit
Committee also recommends to the Board the appointment of the independent
accountants and reviews periodically their performance and independence from
management.

The members of the Audit Committee are all "independent" directors as
defined in the listing standards of the National Association of Securities
Dealers.

The Board has adopted a written charter setting out the audit related
functions the Audit Committee is to perform. A copy of that charter is attached
to this proxy statement as Appendix A.

Management has primary responsibility for the Company's financial
statements and the overall reporting process, including the Company's system of
internal controls.

The independent accountants audit the annual financial statements prepared
by management, express an opinion as to whether those financial statements
fairly present the financial position, results of operations and cash flows of
the Company in conformity with generally accepted accounting principles and
discuss with the Audit Committee any issues they believe should be raised.

This year, the Audit Committee held two meetings. The Audit Committee
reviewed the Company's audited financial statements and met with both management
and Arthur Andersen LLP, the Company's independent accountants, to discuss those
financial statements. Management has represented to the Audit Committee that the
financial statements were prepared in accordance with generally accepted
accounting principles.
13
17

The Audit Committee has received from and discussed with Arthur Andersen
LLP the written disclosure and the letter required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees). These
items relate to that firm's independence from the Company. The Audit Committee
also discussed with Arthur Andersen LLP any matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).

Based on these reviews and discussions, the Audit Committee recommended to
the Board that the Company's audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2001.
The Audit Committee has recommended and the Board has approved the selection of
the Company's independent accountants.

Members of the Audit Committee:

Lawrence J. Ring, Chairman
Samuel J. Gerson
Robert C. Siegel
Leon F. Winbigler
Thomas W. Wolf

ACCOUNTANT'S FEES

During 2000, we retained Arthur Andersen LLP, our independent accountant,
to provide services in the following categories and amounts:

Audit fees................................................ $233,000
Financial information systems design and implementation
fees.................................................... --
All other fees............................................ $169,000

The Audit Committee also considered whether the provision of non-audit
services by our independent accountant is compatible with maintaining auditor
independence.

RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS

The firm of independent accountants recommended by the Audit Committee and
selected by the Board for 2001 is Arthur Andersen LLP. The Board expects that a
representative of Arthur Andersen LLP will be present at the meeting, will be
given an opportunity to make a statement at such meeting if he desires to do so,
and will be available to respond to appropriate questions.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Executive officers, directors and persons who own more than 10% of either
class of the Company's stock are required to file reports of ownership and
changes in ownership with the SEC and furnish the Company with copies of these
reports. Based on the Company's review of the reports received and on written
representations from those who are subject to these requirements, we believe
that all 2000 filing requirements were timely made except that Leon F. Winbigler
filed a Form 4 with respect to the purchase of 5,000 shares of common stock one
day late and Michael L. Gleim filed a Form 4 with respect to the purchase of
6,000 shares of common stock one day late. The Company did not receive any
written representations from Heywood Wilansky concerning his filing, or failure
to file, any required reports.

INCORPORATION BY REFERENCE

To the extent that this proxy statement is incorporated by reference into
any other filing by the Company under the Securities Act of 1933 or the
Securities Exchange Act of 1934, the sections of this proxy statement entitled
Report of the Compensation Committee, Report of the Audit Committee (to the
extent permitted by the rules of the Securities and Exchange Commission) and
Stock Price Performance Graph, as well as the Audit Committee Charter attached
as Appendix A, will not be deemed incorporated unless specifically provided
otherwise in such filing.

14
18

CERTAIN TRANSACTIONS

The Company leases its Oil City, Pennsylvania store from Tim Grumbacher
pursuant to a lease entered into on January 1, 1981. The rental payments during
2000 under this lease were $223,500. The Oil City lease terminates on July 31,
2006 and the Company has five five-year renewal options.

The Company leased the land for its York Galleria store from MBM Land
Associates Limited Partnership ("MBM"), a partnership of which Tim Grumbacher,
through a wholly-owned corporation, and certain trusts established for the
benefit of his three children, are the partners. This lease was terminated in
December 2000 when the Company purchased this land. The land and the store were
immediately sold to an independent third party and leased back by the Company.
Rental payments by the Company to MBM during 2000, prior to termination of this
lease, were $57,750.

The Company also leased from MBM a portion of the property on which its
distribution center is located. The remainder was leased from Mr. Grumbacher.
These leases were terminated in December 2000 when the Company purchased this
land. The major portion of the land and the distribution center were immediately
sold to an independent third party and leased back by the Company. During 2000,
Mr. Grumbacher and MBM received rental payments prior to termination of these
leases aggregating $118,976 and $29,524, respectively.

Total lease payments to Tim Grumbacher and affiliated entities during 2000
were $429,750.

In 1999, we made a $160,000 loan to Frank Tworecke pursuant to the terms of
his employment agreement. This loan bears interest at 5.57% per annum and is
repayable in 36 equal installments. As of February 3, 2001, the principal amount
outstanding was $96,090.

Pursuant to Heywood Wilansky's employment agreement, the Company made a
loan to Mr. Wilansky in 1998 in the amount of $480,447, and made a loan to Mr.
Wilansky in 1999 in the amount of $207,775. Mr. Wilansky repaid both of these
loans in full on the termination of his employment.

SHAREHOLDER PROPOSALS

Shareholder proposals for the 2002 Annual Meeting of Shareholders must be
received by the Company by January 15, 2002 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.

A shareholder may wish to have a proposal presented at the 2002 Annual
Meeting of Shareholders but not included in the Company's proxy statement and
form of proxy for that meeting. If notice of any such proposal is received by
the Company after March 30, 2002, such proposal shall be deemed "untimely" for
purposes of Rule 14a-4(c) under the Securities Exchange Act of 1934 and,
therefore, the Company will have the right to exercise discretionary voting
authority with respect to such proposal.

By order of the Board of Directors

ROBERT E. STERN
Vice President and
Corporate Secretary

May 15, 2001

15
19

APPENDIX A
THE BON-TON STORES, INC.

AUDIT COMMITTEE CHARTER

ORGANIZATION

The Audit Committee (the "Committee") of the Board of Directors (the
"Board") of The Bon-Ton Stores, Inc. (the "Company") shall be composed of three
or more directors who are independent of the management of the Company and are
free of any relationship that, in the opinion of the Board, would interfere with
their exercise of independent judgment as a committee member. All members of the
Committee shall be financially literate with at least one member having
accounting or other related financial management expertise.

The members of the Committee shall be elected by the Board at its annual
organizational meeting and shall serve until their successors shall be duly
elected and qualified. Unless a Chair is elected by the Board, the members of
the Committee may designate a Chair by majority vote of the full Committee
membership. The Committee shall report through its Chair to the Board following
meetings of the Committee. Minutes or other records of meetings and activities
of the Committee shall be maintained.

STATEMENT OF POLICY

The Committee shall provide assistance to the Board in fulfilling its
responsibility to the shareholders, potential shareholders, and investment
community relating to corporate accounting, reporting practices, and the quality
and integrity of the financial reports of the Company. In so doing, it is the
responsibility of the Committee to maintain free and open means of communication
between the directors, independent accountants (the "Accountants") and the
management of the Company.

MEETINGS

The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the Accountants in
separate executive sessions to discuss any matters that the Committee or each of
these groups believe should be discussed privately. In addition, the Committee,
or its Chair, will meet with the Accountants and management to review the
Company's financials consistent with item 4. (see next page)

RESPONSIBILITIES

In carrying out its responsibilities, the Committee's policies and
procedures should remain flexible to best react to changing conditions and to
ensure to the directors and shareholders that the corporate accounting and
reporting practices of the Company are in accordance with all requirements and
are of the highest quality.

In carrying out these responsibilities, the Committee shall:

Documents/Reports Review

1. Review and update this Charter periodically, at least annually, as
conditions dictate.

2. Review the Company's annual financial statements and any reports or other
financial information submitted to any governmental body or the public,
including any certification, report, opinion or review rendered by the
Accountants.

3. Review the reports to management prepared in the contract audit function and
management's response.

4. Review with management and the Accountants the 10-Q prior to its filing or
prior to the release of earnings if significant events, transactions or
changes in accounting estimates occur which affect the

A-1
20

quality of the Company's financial reporting. The Chair may represent the
entire Committee for purposes of this review.

Independent Accountants

5. Recommend to the Board the selection of the Accountants, considering
independence and effectiveness, and approve the fees and other compensation
to be paid to the Accountants. On an annual basis, the Committee should
review the Accountants formal written statement regarding all significant
relationships the Accountants have with the Company to determine the
Accountants' independence. The Committee will instruct the Accountants that
the Board is the client.

6. Review the performance of the Accountants and approve any proposed discharge
of the Accountants when circumstances warrant.

7. Periodically consult with the Accountants, without management present, about
internal controls and the fullness and accuracy of the financial statements.

Financial Reporting Processes

8. In consultation with the Accountants, review the integrity of the financial
reporting processes, both internal and external.

9. Consider the Accountants' judgments about the quality and appropriateness of
the Company's accounting principles as applied in its financial reporting.

10. Inquire of management and the Accountants about significant risks or
exposures and assess the steps management has taken to minimize such risks
to the Company.

11. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
Accountants or management.

Process Improvement

12. Following completion of the annual audit, review separately with management
and with the Accountants any significant difficulties encountered during the
course of the audit, including any restrictions on the scope of the work or
access to required information.

13. Review any significant disagreement between management and the Accountants
in connection with the preparation of the financial statements.

14. Review with the Accountants 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.)

Ethical and Legal Compliance

15. Review and update periodically the Company's Code of Ethical Standards and
Business Practices (the "Code") and ensure that management has established a
system to enforce the Code.

16. Review management's monitoring of the Company's compliance with the 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.

17. Review activities, organizational structure and qualifications of the
contract audit function.

18. Review legal compliance matters, including corporate securities trading
policies, with Company counsel.

A-2
21

19. Review with Company counsel any legal matter that could have a significant
impact on the financial statements.

20. 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.

A-3
22
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 Tim Grumbacher and Michael L. Gleim, 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 Heritage Hills Conference Center, 2700 Mount Rose Avenue,
York, PA 17402 on June 19, 2001, at 9:00 a.m., provided that said proxies are
authorized and directed to vote as indicated with respect to 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. 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)
23
PLEASE DATE, SIGN AND MAIL YOUR PROXY
CARD BACK AS SOON AS POSSIBLE.

ANNUAL MEETING OF SHAREHOLDERS
THE BON-TON STORES, INC.

JUNE 19, 2001

- Please Detach and Mail in the Envelope Provided -
- --------------------------------------------------------------------------------

A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

FOR WITHHELD
1. Election of NOMINEES: Tim Grumbacher
Directors: / / / / Samuel J. Gerson
Michael L. Gleim
FOR, except vote withheld for the Lawrence J. Ring
following nominee(s): Robert C. Siegel
Leon D. Starr
Frank Tworecke
_______________________________________ Leon F. Winbigler
Thomas W. Wolf

SIGNATURE(S)_______________________________________________ Date:_________, 2001

NOTE: Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
24
ANNUAL MEETING OF SHAREHOLDERS OF

THE BON-TON STORES, INC.

JUNE 19, 2001

PROXY VOTING INSTRUCTIONS

TO VOTE BY MAIL
- ---------------
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.

TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.

TO VOTE BY INTERNET
- -------------------
PLEASE ACCESS THE WEB PAGE AT "WWW.VOTEPROXY.COM" AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.

YOUR CONTROL NUMBER IS --
---------------------------------

- Please Detach and Mail in the Envelope Provided -

SIGNATURE(S)_______________________________________________ Date:_________, 2001

NOTE: Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.