THE BON-TON STORES, INC. RESTRICTED STOCK AGREEMENT
EXHIBIT 10.1
THE BON-TON STORES, INC.
This is a Restricted Stock Agreement dated as of February 4, 2008 (“Agreement”), between The
Bon-Ton Stores, Inc. (the “Company”) and the undersigned (“Grantee”). This Agreement is entered
into pursuant to the provisions of the Plan (as defined below) and in connection with a certain
employment agreement entered into by and between the Grantee and the Company on August 24, 2004,
and as such has been amended from time to time (including the Third Amendment to Employment
Agreement, entered into on July 19, 2007 (the employment agreement, including all amendments
thereto being referred to herein as the “Employment Agreement”). This Agreement is intended to be
consistent with the Employment Agreement and specifically those provisions of the Employment
Agreement regarding the grant of a “Fiscal Year 2008 Performance-Based Restricted Share Grant” to
be made on or about February 4, 2008, and shall be so interpreted. To the extent any provision
hereof is inconsistent with the provisions of the Employment Agreement, the provisions of the
Employment Agreement shall be given effect. To the extent the definition of any terms defined in
the Employment Agreement is modified from time to time by amendments made to the Employment
Agreement, the definition as in effect at the relevant time shall apply for purposes of this
Agreement. All determinations regarding the vesting of Restricted Stock hereunder shall be made by
the Committee (as that term is defined in the Plan) consistent with the Plan’s provisions regarding
performance-based compensation.
1. Definitions. As used herein:
(a) “Date of Grant” means February 4, 2008, the date on which the Company awarded the
Restricted Stock.
(b) “Forfeiture Date” means any date as of which Grantee’s rights to all or any
portion of the Restricted Stock are forfeited pursuant to applicable provisions of this Agreement.
(c) “Plan” means The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive
and Performance-Based Award Plan.
(d) “Restricted Period” with respect to any shares of Restricted Stock means the
period beginning on the Date of Grant and ending on the Vesting Date applicable to such shares.
(e) “Vesting Date” with respect to any shares of Restricted stock means the date set
as a vesting date pursuant to Paragraph 2 hereof.
All other capitalized terms used herein shall have the meaning set forth in the Employment
Agreement or in the Plan, as applicable. In the event of any inconsistency in the definition contained in the Employment Agreement and that contained in the Plan, the definition in the
Employment Agreement shall control.
2. Grant of Restricted Stock. Subject to the terms and conditions set forth herein
and in the Plan, the Company grants to Grantee 365,854 shares of the Company’s Common Stock, par
value $.01 (the “Restricted Stock”). Of the Restricted Stock subject to this Agreement, fifty
percent (50%) is subject to vesting (or forfeiture) on the basis of the achievement of certain
performance goals established for the Company’s 2008 fiscal year (i.e., the fiscal year ending on
or about January 31, 2009), and the remaining fifty percent (50%) is anticipated as being vested
(or forfeited) on the basis of the achievement of performance goals to be established for the
Company’s 2009 fiscal year (i.e., the fiscal year ending on or about January 31, 2010). The two
portions of the Restricted Stock are referred to herein as the “2008 Performance Shares Based Upon
Company Performance For Fiscal Year 2008” and the “2008 Performance Shares Based Upon Company
Performance For Fiscal Year 2009,” respectively. Except as otherwise provided herein, the
Restricted Stock shall vest (or be forfeited) as follows:
(a) 2008 Performance Shares Based Upon Company Performance For Fiscal Year 2008. The
2008 Performance Shares Based Upon Company Performance For Fiscal Year 2008 shall become vested or
shall be forfeited as a result of the achievement or non-achievement of performance targets for the
selected performance metrics (among Net Income, GMROI Dollars ($); Total Sales, and EBITDA)
established for the Company’s 2008 fiscal year by the Committee. These performance targets shall
be in line with the respective targets under the Company Plan for its 2008 fiscal year as well as in line with the respective targets established with respect to bonuses payable under the
Company’s Cash Bonus Plan for the Company’s 2008 fiscal year, all as determined by the Committee
consistent with the Plan and in the normal course (i.e., in the first quarter of the Company’s 2008
fiscal year).
The Vesting Date with respect to the 2008 Performance Shares Based Upon Company Performance For
Fiscal Year 2008 shall be as of January 31, 2009, subject to the Committee’s certification in
writing of its determination of the level of achievement of the performance goals established in
connection with the vesting of such shares of Restricted Stock (without regard to whether Grantee
has remained employed by the Company or an Affiliate of the Company after the Vesting Date). Any
2008 Performance Shares Based Upon Company Performance For Fiscal Year 2008 not vested as a result
of such determination shall be considered as having been forfeited as of January 31, 2009.
(b) 2008 Performance Shares Based Upon Company Performance For Fiscal Year 2009. The
2008 Performance Shares Based Upon Company Performance For Fiscal Year 2009 shall become vested or
shall be forfeited as a result of the achievement or non-achievement of performance targets for the
selected performance metrics (among Net Income, GMROI Dollars ($); Total Sales, and EBITDA)
established for the Company’s 2009 fiscal year by the Committee. These performance targets shall
be in line with the respective targets under the Company Plan for its
2009 fiscal year as well as in line with the respective targets established with respect to bonuses payable under the
Company’s Cash Bonus Plan for the Company’s 2009 fiscal year, all as determined by the Committee
consistent with the Plan and in the normal course (i.e., in the first quarter of the Company’s 2009
fiscal year).
The Vesting Date with respect to the 2008 Performance Shares Based Upon Company Performance For
Fiscal Year 2009 shall be as of January 30, 2010, subject to the Committee’s certification in
writing of its determination of the level of achievement of the performance goals established in
connection with the vesting of such shares of Restricted Stock (without regard to whether Grantee
has remained employed by the Company after the Vesting Date). Any 2008 Performance Shares Based
Upon Company Performance For Fiscal Year 2009 not vested as a result of such determination shall be
considered as having been forfeited as of January 30, 2010.
(c) Termination of Employment. Any Restricted Stock that is not earned and vested on
the effective date of the Grantee’s termination of employment for any reason shall be forfeited (if
not already forfeited), subject to the following:
(i) In the event that the Grantee is discharged without Cause or resigns for Good Reason after
the Date of Grant and prior to January 31, 2009, the 2008 Performance Shares Based Upon Company
Performance For Fiscal Year 2008 shall become vested to the same extent such Restricted Stock would
have become vested had the Grantee remained employed with the Company or an Affiliate of the
Company through the date that the Committee makes a determination regarding the achievement of the
performance goals established for the Company’s 2008 fiscal year; provided, however, that no
portion of the 2008 Performance Shares Based Upon Company Performance For Fiscal Year 2008 shall be
vested in such a situation unless the Grantee executes a general release as required under
applicable provisions of the Employment Agreement.
(ii) In the event that the Grantee is discharged without Cause or resigns for Good Reason on
or after February 1, 2009 and before the end of the Company’s 2009 fiscal year, the 2009
Performance Shares shall become vested to the same extent such Restricted Stock would have become
vested had the Grantee remained employed with the Company or an Affiliate of the Company through
the date that the Committee makes a determination regarding the achievement of the performance
goals established for the Company’s 2009 fiscal year; provided, however, that no portion of the
2008 Performance Shares Based Upon Company Performance For Fiscal Year 2009 shall be vested in such
a situation unless the Grantee executes a general release as required under applicable provisions
of the Employment Agreement.
3. Restrictions on Restricted Stock. Subject to the terms and conditions set forth
herein and in the Plan, Grantee shall not be permitted to sell, transfer, pledge or assign any
Restricted Stock during such shares’ Restricted Period.
4. Lapse of Restrictions. Subject to the terms and conditions set forth herein and in
the Plan, the restrictions on Restricted Stock set forth in Paragraph 3 shall lapse on the date
such shares become vested.
5. Forfeiture Dates and Forfeiture of Restricted Stock. Subject to the terms and
conditions set forth herein and in the Plan;
(a) If Grantee’s employment with the Company or an Affiliate of the Company terminates during
the Restricted Period for any reason, such date shall be the Forfeiture Date, and Grantee shall forfeit any Restricted Stock still subject to restrictions
as of such Forfeiture Date, except as provided above in Paragraph 2(c).
(b) Any shares that may become vested or forfeited while Grantee remains employed by the
Company or an Affiliate of the Company pursuant to Paragraph 2(a) or 2(b) above shall be forfeited,
to the extent not vested as of the applicable date set forth in Paragraph 2(a) or 2(b), as the case
may be (such date being the applicable Forfeiture Date).
(c) Any shares that may become vested or forfeited after a termination of Grantee’s employment
in accordance with Paragraph 2(c) above shall be forfeited, to the extent not vested, as of the
applicable date set forth in Paragraph 2(a) or 2(b), as the case may be (such date being the
applicable Forfeiture Date).
(d) Upon a forfeiture of any shares of Restricted Stock as provided in this Paragraph 5, the
shares of Restricted Stock so forfeited shall be reacquired by the Company without consideration.
6. Rights of Grantee. Except for the restrictions set forth in Paragraph 3 and the
provisions respecting dividends on Restricted Stock set forth in Paragraph 7, during the Restricted
Period Grantee shall have all of the rights of a shareholder with respect to the Restricted Stock,
including the right to vote the Restricted Stock to the same extent that such shares could be voted
if they were not subject to the restrictions set forth in this Agreement.
7. Dividends on Restricted Stock. No dividends shall accrue or be paid to the Grantee
with respect to any shares of Restricted Stock for any period prior to the date such shares become
vested.
8. Change of Control of Company. Notwithstanding any other provisions of this
Agreement, the following provisions shall apply on the occurrence, after the Date of Grant, of a
Change of Control (as defined, from time to time, in the Employment Agreement):
(a) If the Change of Control occurs during the Company’s 2008 fiscal year, one hundred
percent (100%) of the 2008 Performance Shares Based Upon Company Performance For Fiscal Year 2008
and fifty percent (50%) of the 2008 Performance Shares Based Upon Company Performance For Fiscal
Year 2009 shall become vested without regard to the achievement of the goals established for the
Company’s 2008 or 2009 fiscal years on the third month anniversary of the date of the Change of
Control, provided the Grantee remains employed by the Company or an Affiliate of the Company
through such date, or on such earlier date following the Change of Control if the Grantee is
terminated by the Company or an Affiliate of the Company without Cause.
Vesting of the remaining fifty percent (50%) of the 2008 Performance Shares Based Upon Company
Performance for Fiscal Year 2009 shall be based upon the performance metrics and numerical values
for the performance metrics selected by the HRCC or successor company’s compensation committee for
the Company’s Fiscal Year 2009 (or, if different, the applicable fiscal year following the year in
which the Change of Control occurs), provided Grantee remains employed by the Company or, or an
Affiliate of the Company or, if applicable, a successor company, through the last day of the
Company’s 2009 fiscal year (or, if
different, such applicable subsequent fiscal year). It is understood that Grantee shall
forfeit this remaining fifty percent (50%), in the event that he resigns from the Company, or an
Affiliate of the Company or, if applicable, a successor company, whether with or without Good
Reason, prior to the end of the Company’s 2009 fiscal year (or, if different, such applicable
subsequent fiscal year of the successor company), or is discharged by the Company, or an Affiliate
of the Company or, if applicable, a successor company, with or without Cause, prior to the end of
the Company’s Fiscal Year 2009 (or, if different, such applicable subsequent fiscal year).
(b) If the Change of Control occurs during the Company’s 2009 fiscal year, one hundred
percent (100%) of the 2008 Performance Shares Based Upon Company Performance For Fiscal Year 2009
shall become vested without regard to the achievement of the goals established for the Company’s
2009 fiscal year on the third month anniversary of the date of the Change of Control; provided the
Grantee remains employed by the Company or an Affiliate of the Company through such date, or on
such earlier date following the Change of Control if the Grantee is terminated by the Company or an
Affiliate of the Company without Cause.
9. Notices. Any notice to be given to the Company shall be addressed to the
Controller of the Company at its principal executive office, and any notice to be given to the
Grantee shall be addressed to the Grantee at the address then appearing on the personnel records of
the Company or the Affiliate of the Company by which he or she is employed, or at such other
address as either party hereafter may designate in writing to the other. Any such notice shall be
deemed to have been duly given when personally delivered, by courier service such as Federal
Express, or by other messenger, or when deposited in the United States mail, addressed as
aforesaid, registered or certified mail, and with proper postage and registration or certification
fees prepaid.
10. Securities Laws. The Committee may from time to time impose any conditions on the
Restricted Stock as it deems necessary or advisable to ensure that all rights granted under the
Plan satisfy the conditions of Rule 16b-3 promulgated pursuant to the Securities Exchange Act of
1934, as amended.
11. Delivery of Shares. Upon the determination that any portion of the Restricted
Stock has become vested, the Company shall notify Grantee (or Grantee’s personal representative,
heir or legatee in the event of Grantee’s death) that the restrictions on an installment of
Restricted Stock have lapsed, and shall, without payment from Grantee for such Restricted Stock,
upon such Grantee’s request deliver a certificate for such Restricted Stock without any legend or
restrictions, except for such restrictions as may be imposed by the Committee, in its sole
judgment, under Paragraph 10, provided that no certificates for shares will be delivered to Grantee
(or to his or her personal representative, heir or legatee) until appropriate arrangements have
been made with the Company for the withholding of any taxes which may be due with respect to such
shares. The Company may condition delivery of certificates for shares upon the prior receipt from
Grantee of any undertakings which it may determine are required to assure that the certificates are
being issued in compliance with federal and state securities laws. The right to payment of any
fractional shares shall be satisfied in cash, measured by the product of the fractional amount
times the Fair Market Value of a share on the Vesting Date.
12. Status of Restricted Stock. The Restricted Stock is intended to constitute
property that is subject to a substantial risk of forfeiture during the Restricted Period, and
subject to federal income tax in accordance with section 83 of the Internal Revenue Code of 1986,
as amended (the “Code”). Section 83 generally provides that Grantee will recognize compensation
income with respect to each installment of the Restricted Stock on the date such installment ceases
to be subject to a substantial risk of forfeiture in an amount equal to the then fair market value
of the shares for which restrictions have lapsed. Alternatively, Grantee may elect, pursuant to
Section 83(b) of the Code, to recognize compensation income for all or any part of the Restricted
Stock at the Date of Grant in an amount equal to the fair market value of the Restricted Stock
subject to the election on the Date of Grant. Such election must be made within 30 days of the
Date of Grant and Grantee shall immediately notify the Company if such an election is made.
Grantee should consult his or her tax advisors to determine whether a Section 83(b) election is
appropriate.
13. Administration. This Award has been granted pursuant to and is subject to the
terms and provisions of the Plan. All questions of interpretation and application of the Plan and
this Award shall be determined by the Committee. The Committee’s determination shall be final,
binding and conclusive.
14. Award Not to Affect Employment. Nothing herein contained shall affect the right
of the Company or an Affiliate of the Company to terminate Grantee’s employment, services,
responsibilities, duties, or authority to represent the Company or an Affiliate of the Company at
any time for any reason whatsoever.
15. Withholding of Taxes. Whenever the Company proposes or is required to deliver or
transfer shares in connection with this Award, the Company shall have the right to (a) require the
Grantee to remit to the Company an amount sufficient to satisfy any federal, state and/or local
withholding tax requirements prior to the delivery or transfer of any certificate or certificates
for such shares or (b) take whatever action it deems necessary to protect its interest with respect
to tax liabilities. In addition, Grantee shall have the right to have such withholding tax
requirements satisfied, either in whole or in part, by means of a relinquishment back to, the
Company of a number of shares as to which Grantee’s interest is fully vested having a Fair Market
Value equal to the amount of such withholding tax requirements as Grantee indicates he wants to
meet by such means.
16. Governing Law. The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect
to principles of conflicts of law.
17. Entire Agreement. This Agreement is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter herein. This Agreement
supersedes all prior agreements and understandings between the parties with respect to such subject
matter, except that the Employment Agreement shall control in the event of any inconsistencies
between this Agreement and the Employment Agreement.
IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed this Agreement
as of the day and year first above written.
| THE BON-TON STORES, INC. |
||||
| By: | /s/ XXXXX X. XXXXXXX | |||
| Xxxxx X. Xxxxxxx | ||||
| Executive Vice President | ||||
| /s/ XXXXX XXXXXXX | ||||
| Xxxxx Xxxxxxx | ||||
