THE BON-TON STORES, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT 10.4
THE BON-TON STORES, INC.
THIS STOCK OPTION is granted as of by THE BON-TON STORES, INC., a
Pennsylvania corporation (the “Company”), to (“Optionee”).
1. Grant. The Company hereby grants to Optionee an option (the “Option”) to
purchase on the terms and conditions hereinafter set forth all or any part of an aggregate of
shares of the Company’s Common Stock, par value $.01 per share (the “Option
Shares”), at a purchase price of $ per share (the “Option Price”). This Option
is granted pursuant to The Bon-Ton Stores, Inc. 2009 Omnibus Incentive Plan, as may be amended from
time to time (the “Plan”). Capitalized terms used herein shall have the same meaning as
set forth in the Plan except to the extent the context clearly requires otherwise. This Option is
intended to be consistent with the terms of the Plan and is subject in all regards to the terms of
the Plan. In any case in which there is a conflict between the terms of this Option and the terms
of the Plan, the conflict shall be resolved in favor of the Plan. This Option is not intended to
be an “incentive stock option” within the meaning of Section 422(b) the Internal Revenue Code of
1986, as amended (the “Code”).
2. Term.
(a) General Rule. The Option Shares shall vest and be exercisable on
_____, 20_____. The Option shall terminate in full at 5:00 p.m. York, Pennsylvania time on
_____. 20_____, unless sooner terminated under Subsection 2(b) or (c) below. This Option may be
exercised in whole or in part with respect to any Option Shares that have vested and become
exercisable, except that this Option may in no event be exercised with respect to fractional
shares.
(b) Termination of Employment. If the employment of Optionee by the Company or its
Affiliates (as defined below) should terminate for any reason other than death or disability
(within the meaning of Subsection 22(e)(3) of the Code) of Optionee, and except as otherwise
provided in Section 7 below, any non-vested Option shall terminate upon such termination of
employment, and any Option which is vested prior to termination of employment shall
terminate ninety (90) days from the date such employment terminates. In the event
Optionee’s employment with the Company or its Affiliates terminates by reason of Optionee’s
death or disability, the Option shall terminate one year from the date such employment
terminates. For purposes of this Option, the term “Affiliate” shall mean a
corporation that is a parent corporation or a subsidiary corporation with respect to the
Company within the meaning of Subsection 424(e) or (f) of the Code.
(c) Forfeiture. If the Human Resources and Compensation Committee of the Board of
Directors of the Company, or such other committee as may be designated by the Board of
Directors pursuant to the Plan (the “Committee”) makes a finding, after full
consideration of the facts presented on behalf of both the Company and Optionee, that
Optionee has: (i) committed a material and serious breach or neglect of Optionee’s
responsibilities to the Company; (ii) committed a willful violation or disregard of
standards of conduct established by law; (iii) committed a willful violation or disregard of
standards of conduct established by Company policy as may from time to time be communicated
to Optionee; (iv) committed fraud, willful misconduct, misappropriation of funds or other
dishonesty; (v) been convicted of a crime of moral turpitude; or (vi) accepted employment
with another company or performed work or provided advice to another company, as an
employee, consultant or in any other similar capacity, while still an employee of the
Company, then the Option shall terminate on the date of such finding. In addition to
immediate termination of the Option, Optionee shall forfeit all Option
Shares for any exercised portion of the Option for which the Company has not yet delivered
the share certificates to Optionee upon refund by the Company of the Option Price paid by
Optionee with respect to such Option Shares.
3. Transfers. This Option may not be transferred except by will or by the laws of
descent and distribution. During the lifetime of the person to whom this Option is granted, the
Option may be exercised only by him or her. Notwithstanding the foregoing, this 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.
4. Method of Exercise and Payment.
(a) When exercisable under Section 2 or Section 7, this Option may be exercised by written
notice, pursuant to Section 9, to the Company’s General Counsel specifying the number of
Option Shares to be purchased (the “Notice”). The Notice shall be accompanied by
payment of the aggregate Option Price of the Option Shares being purchased (a) in cash, (b)
by certified check payable to the order of the Company or (c) by a combination of the
foregoing. Such exercise shall be effective upon the actual receipt by the Company’s
General Counsel of such Notice and payment.
(b) Unless the Option 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”), and current registrations under all applicable state securities laws, the
Notice shall include Optionee’s acknowledgement, in form and substance satisfactory to the
Company, that Optionee (a) is purchasing such Option Shares for investment and not for
distribution or resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration provisions of
the Act or any state securities laws), (b) has been advised and understands that (i) the
Option 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, (ii) the
Company is under no obligation to register the Option Shares under the Act or to take any
action which would make available to Optionee any exemption from such registration, and
(iii) the Option Shares may not be transferred without compliance with all applicable
federal and state securities laws.
(c) In addition, except as provided below, Optionee may make payment in whole or in part in
shares of the Company’s Common Stock held by the Optionee for more than six months. If
payment is made in whole or in part in shares of the Company’s Common Stock, then Optionee
shall deliver to the Company certificates registered in the name of Optionee representing
shares of the Company’s Common Stock legally and beneficially owned by Optionee, free of all
liens, claims and encumbrances of every kind and having a Fair Market Value (as defined in
the Plan) on the date of delivery of such notice that is not greater than the Option Price
of the Option Shares with respect to which the Option is to be exercised, accompanied by
stock powers duly endorsed in blank by the record holder of the shares represented by such
certificates. Notwithstanding the foregoing, the Committee, in its sole discretion, may
refuse to accept shares of the Company’s Common Stock in payment of the Option Price. In
that event, any certificates representing shares of the Company’s Common Stock which were
delivered to the Company shall be returned to Optionee with notice of the refusal of the
Committee to accept such shares in payment of the Option Price. Furthermore, the Committee
may impose such limitations and prohibitions on the use of shares of the Company’s Common
Stock to exercise the Option as it deems appropriate.
2
5. Adjustments on Changes in Capitalization. In the event that, prior to the delivery
by the Company of all the Option Shares in respect of which the Option is granted, there shall be a
stock dividend, stock split, recapitalization or other change in the number or class of issued and
outstanding equity securities of the Company resulting from a subdivision or consolidation of the
Company’s Common Stock and/or other outstanding equity security or a recapitalization or other
capital adjustment affecting the Company’s Common Stock or an equity security of the Company which
is effected without receipt of consideration by the Company, the remaining number of Option Shares
(or class of shares) subject to the Option and Option Price therefor shall be adjusted in a manner
determined by the Committee so that the adjusted number of Option Shares (or class of shares) and
the adjusted Option Price shall be the substantial equivalent of the remaining number of Option
Shares subject to the Option and Option Price thereof prior to such change. For purposes of this
Section 5, no adjustment shall be made as a result of the issuance of the Company’s Common Stock
upon the conversion of other securities of the Company which are convertible into Common Stock.
6. Legal Requirements. If the listing registration or qualification of the Option
Shares upon any securities exchange or under any federal or state law, or the consent or approval
of any governmental regulatory body is necessary as a condition of or in connection with the
purchase of such Option Shares, the Company shall not be obligated to issue or deliver the
certificates representing the Option Shares as to which the Option has been exercised unless and
until such listing, registration, qualification, consent or approval shall have been effected or
obtained. If registration is considered unnecessary by the Company or its counsel, the Company may
cause a legend to be placed on the Option Shares being issued calling attention to the fact that
they have been acquired by Optionee for investment and have not been registered.
7. Change of Control of Company. In the event of a Change of Control, the Committee
may take whatever action with respect to the Option it deems necessary or desirable, including,
without limitation, removing any restrictions or imposing any additional restrictions on the Option
or Option Shares.
8. Administration. This Option has been granted pursuant to and is subject to the
terms and provisions of the Plan, as it may be amended from time to time. All questions of
interpretation and application of the Plan and this Option shall be determined by the Committee.
The Committee’s determination shall be final, binding and conclusive.
9. Notices. Any notice to be given to the Company shall be addressed to the General
Counsel of the Company at its principal executive office, and any notice to be given to Optionee
shall be addressed to Optionee at the address then appearing on the personnel records of the
Company or the Affiliate of the Company by which Optionee 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, sent by recognized courier service 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. Not to Affect Employment. Nothing herein contained shall affect the right of the
Company or any Affiliate to terminate Optionee’s employment, services, responsibilities, duties or
authority to represent the Company or any Affiliate at any time or for any reason whatsoever.
11. Withholding of Taxes. Whenever the Company proposes or is required to deliver or
transfer Option Shares in connection with the exercise of this Option, the Company shall have the
right to (a) require Optionee 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 Option Shares or (b) take whatever action it deems necessary
to protect its interest with respect to tax liabilities.
12. 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.
3
13. 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.
IN WITNESS WHEREOF, the Company has granted this Option on the day and year first above written.
| THE BON-TON STORES, INC. |
||||
| By: | ||||
| ACCEPTED BY: | ||||
4
