THE BON-TON STORES, INC. RESTRICTED STOCK AGREEMENT
EXHIBIT 10.2
THE BON-TON STORES, INC.
This is a Restricted Stock Agreement dated as of July 19, 2007 (“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 in July, 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 “Time-Based Restricted Share Grant” to be made as soon as
practicable after the effective date of the Third Amendment to the Employment Agreement, 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.
Definitions. As used herein:
“Date of Grant” means July 19, 2007, the date on which the Company awarded the
Restricted Stock.
“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.
“Plan” means The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive and
Performance-Based Award Plan.
“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.
“Vesting Date” with respect to any shares of Restricted stock means the date set as a
vesting date pursuant to Paragraph 2 hereof, or such earlier vesting date as is otherwise provided
herein.
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.
Grant of Restricted Stock. Subject to the terms and conditions set forth herein and
in the Plan, the Company grants to Grantee 41,297 shares of the Company’s Common Stock, par value
$.01 (the “Restricted Stock”). Except as otherwise provided herein, the Restricted Stock
shall vest on the Vesting Dates as set forth in the following schedule provided that, on such
applicable Vesting Date, Grantee is, and has continuously been, an employee of the Company or an
Affiliate of the Company during such shares’ Restricted Period:
Fifteen percent (15%) of the Restricted Stock vests on February 2, 2008;
An additional thirty-five percent (35%) of the Restricted Stock vests on January 31, 2009; and
The remainder of the Restricted Stock vests on February 5, 2010.
In lieu of vesting of the Restricted Stock on the Vesting Dates noted above, the Restricted Stock
shall become fully vested: (i) if Grantee’s employment is terminated by the Company without Cause
(as that term is defined in the Employment Agreement) or if the Grantee resigns from his employment
with the Company or an Affiliate of the Company for Good Reason (as that term is defined in the
Employment Agreement), provided Grantee executes a general release as required under applicable
provisions of the Employment Agreement; or (ii) in accordance with Paragraph 8 below in the event
of a Change of Control of the Company.
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.
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.
Forfeiture of Restricted Stock. Subject to the terms and conditions set forth herein
and in the Plan, 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 the Forfeiture Date;
provided, however, that any shares required to be vested pursuant to the Employment Agreement by
reason of the Grantee’s termination of employment (i.e., discharge by the Company without Cause or
resignation for Good Reason, provided Grantee executes a general release as required under
applicable provisions of the Employment Agreement), shall be treated as vested as of such
termination of employment and no Forfeiture Date shall be applicable to Grantee’s Restricted Stock
under such circumstances. 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 as of the Forfeiture Date.
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.
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Dividends on Restricted Stock. Any cash dividends payable with respect to the
Restricted Stock during the Restricted Period shall be paid to Grantee. Any extraordinary
dividends or dividends that are in the nature of a distribution of shares or are otherwise
equivalent to a stock split, shall be subject to the same restrictions as apply to the Restricted
Stock with respect to which such extraordinary dividends or shares were issued and shall be
forfeited in accordance with Paragraph 5 unless the restrictions lapse in accordance with Paragraph 4.
Change of Control of Company. In the event of a Change of Control (as defined, from
time to time, in the Employment Agreement), the Restricted Stock shall immediately become fully
vested.
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.
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.
Delivery of Shares. Upon a Vesting Date, 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.
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 such installment’s Vesting Date in an amount
equal to the then fair market value of the shares for which restrictions have lapsed.
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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.
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.
Award Not to Affect Employment. Nothing herein contained shall affect the right of
the Company or an Affiliate to terminate Grantee’s employment, services, responsibilities, duties,
or authority to represent the Company or an Affiliate at any time for any reason whatsoever.
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.
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.
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.
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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/ Xxx Xxxxxxxxxx | |||
| Xxx Xxxxxxxxxx, Chairman | ||||
| /s/ Xxxxx Xxxxxxx | ||||
| Xxxxx Xxxxxxx | ||||
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