THE BON-TON STORES, INC. AMENDED AND
RESTATED
2000 STOCK INCENTIVE AND
PERFORMANCE-BASED AWARD PLAN
(Amended and Restated as of
June 20, 2006)
1. Purpose. The Bon-Ton
Stores, Inc. (the “Company”) hereby adopts The Bon-Ton
Stores, Inc. Amended and Restated 2000 Stock Incentive and
Performance-Based Award Plan (the “Plan”), effective as
of June 20, 2006. The Plan, as herein amended and restated, is
intended to recognize the contributions made to the Company by
employees (including employees who are members of the Board of
Directors), directors, consultants and advisors of the Company or
any Affiliate, to provide such persons with additional incentive to
devote themselves to the future success of the Company or an
Affiliate, to improve the ability of the Company or an Affiliate to
attract, retain, and motivate individuals upon whom the
Company’s sustained growth and financial success depend, by
providing such persons with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of rights
to acquire the Company’s Common Stock, par value
$.01 per share (the “Common Stock”), and to permit
Awards of Restricted Stock that may be characterized as
“performance-based” compensation for purposes of
Section 162(m) of the Code. No Performance-Based Award shall
become vested unless the Plan, as herein amended and restated,
including the provisions of Section 16, has been disclosed to
and approved by the Company’s shareholders.
2. Definitions. Unless the
context clearly indicates otherwise, the following terms shall have
the following meanings:
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A.
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“Affiliate” means a
corporation that is a parent corporation or a subsidiary
corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code.
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B.
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“Award” means an award
of Restricted Stock, granted under the Plan, designated by the
Committee at the time of such grant as an Award, and containing the
terms specified herein for Awards.
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C.
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“Award Document” means
the document described in Section 9 that sets forth the terms
and conditions of each grant of an Award.
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D.
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“Board of Directors”
means the Board of Directors of the Company.
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E.
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“Change of Control”
shall have the meaning as set forth in Section 10.
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F.
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“Code” means the
Internal Revenue Code of 1986, as amended.
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G.
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“Committee” shall have
the meaning set forth in Section 3.A.
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H.
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“Company” means The
Bon-Ton Stores, Inc., a Pennsylvania corporation.
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I.
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“Disability” shall have
the meaning set forth in Section 22(e)(3) of the
Code.
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J.
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“Fair Market Value”
shall have the meaning set forth in Section 8.B.
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K.
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“Grantee” means a person
who is granted Restricted Stock.
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L.
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“ISO” means an Option
granted under the Plan that is intended to qualify as an
“incentive stock option” within the meaning of
Section 422(b) of the Code.
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M.
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“Non-qualified Stock
Option” means an Option granted under the Plan that is not
intended to qualify, or otherwise does not qualify, as an
“incentive stock option” within the meaning of
Section 422(b) of the Code.
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N.
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“Option” means either an
ISO or a Non-qualified Stock Option granted under the
Plan.
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O.
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“Optionee” means a
person to whom an Option has been granted under the Plan, which
Option has not been exercised and has not expired or
terminated.
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P.
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“Option Document” means
the document described in Section 8 that sets forth the terms
and conditions of each grant of Options.
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Q.
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“Option Price” means the
price at which Shares may be purchased upon exercise of an Option,
as calculated pursuant to Section 8.B.
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R.
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“Performance-Based
Award” means an Award granted pursuant to
Section 16.
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S.
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“Performance-Based Award
Limitation” means the limitation on the number of Shares that
may be granted pursuant to Performance-Based Awards to any one
Participant, as set forth in Section 16.F.
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T.
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“Performance Period”
means any period designated by the Committee as a period of time
during which a Performance Target must be met for purposes of
Section 16.
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U.
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“Performance Target”
means the performance target established by the Committee for a
particular Performance Period, as described in
Section 16.B.
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V.
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“Restricted Stock” means
Shares issued to a person pursuant to an Award.
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W.
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“Shares” means the
shares of Common Stock that are the subject of Options or
Awards.
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X.
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“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
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3. Administration of the
Plan.
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A.
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Committee. The Plan shall be administered by
the Board of Directors, or, in the discretion of the Board of
Directors, by a committee composed of two (2) or more of the
members of the Board of Directors. To the extent possible, and to
the extent the Board of Directors deems it necessary or
appropriate, each member of the Committee shall be a “Non-
Employee Director” (as such term is defined in
Rule 16b-3 promulgated under the Exchange Act) and an
“Outside Director” (as such term is defined in Treasury
Regulations Section 1.162-27 promulgated under the Code);
however, the Board of Directors may designate two or more
committees to operate and administer the Plan in its stead. Any of
such committees designated by the Board of Directors is referred to
as the “Committee,” and, to the extent that the Plan is
administered by the Board of Directors, “Committee”
shall also refer to the Board of Directors as appropriate in the
particular context. The Board of Directors may from time to time
remove members from, or add members
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to,
the Committee. Vacancies on the Committee, however caused, shall be
filled by the Board of Directors.
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B.
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Meetings. The Committee shall hold meetings at
such times and places as it may determine. Acts approved at a
meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of the
Committee shall be the valid acts of the Committee.
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C.
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Grants. The Committee shall from time to
time at its discretion direct the Company to grant Options or
Awards pursuant to the terms of the Plan. The Committee shall have
plenary authority to (i) determine the Optionees and Grantees
to whom and the times at which Options and Awards shall be granted,
(ii) determine the price at which Options shall be granted,
(iii) determine the type of Option to be granted and the
number of Shares subject thereto, (iv) determine the number of
Shares to be granted pursuant to each Award and (v) approve
the form and terms and conditions of the Option Documents and of
each Award; all subject, however, to the express provisions of the
Plan. In making such determinations, the Committee may take into
account the nature of the Optionee’s or Grantee’s
services and responsibilities, the Optionee’s or
Grantee’s present and potential contribution to the
Company’s success and such other factors as it may deem
relevant. The interpretation and construction by the Committee of
any provisions of the Plan or of any Option or Award granted under
it shall be final, binding and conclusive.
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D.
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Exculpation. No member of the Committee shall be
personally liable for monetary damages as such for any action taken
or any failure to take any action in connection with the
administration of the Plan or the granting of Options or Awards
thereunder unless (i) the member of the Committee has breached
or failed to perform the duties of his or her office within the
meaning of subchapter B of Chapter 17 of the Pennsylvania
Business Corporation Law of 1988, as amended, and (ii) the
breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness; provided, however , that the
provisions of this Section 3.D shall not apply to the
responsibility or liability of a member of the Committee pursuant
to any criminal statute or to the liability of a member of the
Committee for the payment of taxes pursuant to local, state or
federal law.
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E.
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Indemnification.
Service on the Committee
shall constitute service as a member of the Board of Directors.
Each member of the Committee shall be entitled without further act
on his or her part to indemnity from the Company to the fullest
extent provided by applicable law and the Company’s Articles
of Incorporation and/or Bylaws in connection with or arising out of
any action, suit or proceeding with respect to the administration
of the Plan or the granting of Options or Awards thereunder in
which he or she may be involved by reason of his or her being or
having been a member of the Committee, whether or not he or she
continues to be such member of the Committee at the time of the
action, suit or proceeding.
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4. Grants of Options under the
Plan. Grants of Options under the Plan may be in the form of a
Non-qualified Stock Option, an ISO or a combination thereof, at the
discretion of the Committee.
5. Eligibility. All employees
(including employees who are members of the Board of Directors or
its Affiliates), directors, consultants and advisors of the Company
or its Affiliates shall be eligible to receive Options or Awards
hereunder; provided, that only employees of the Company or
its Affiliates shall be eligible to receive ISOs. The Committee, in
its sole discretion, shall determine whether an individual
qualifies as an employee of the Company or its
Affiliates.
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6. Shares Subject to Plan. The
aggregate maximum number of Shares for which Options or Awards may
be granted pursuant to the Plan is two million six hundred thousand
(2,600,000) adjusted as provided in Section 11. The Shares
shall be issued from authorized and unissued Common Stock or Common
Stock held in or hereafter acquired for the treasury of the
Company. If an Option terminates or expires without having been
fully exercised for any reason, or if Restricted Stock is canceled
or forfeited pursuant to the terms of an Award, the Shares for
which the Option was not exercised or that were canceled or
forfeited pursuant to the Award may again be the subject of an
Option or Award granted pursuant to the Plan.
7. Term of the Plan. No Option
or Award may be granted under the Plan after March 2,
2010.
8. Option Documents and Terms.
Each Option granted under the Plan shall be a Non-qualified Stock
Option unless the Option shall be specifically designated at the
time of grant to be an ISO. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the
Committee shall from time to time approve, which Option Documents
shall comply with and be subject to the following terms and
conditions and such other terms and conditions as the Committee
shall from time to time require that are not inconsistent with the
terms of the Plan.
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A.
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Number of Option Shares.
Each Option Document
shall state the number of Shares to which it pertains. An Optionee
may receive more than one Option, which may include Options that
are intended to be ISOs and Options that are not intended to be
ISOs, but only on the terms and subject to the conditions and
restrictions of the Plan. The maximum number of Shares for which
Options may be granted to any single Optionee in any fiscal year,
adjusted as provided in Section 11, shall be four hundred
thousand (400,000) Shares.
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B.
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Option Price.
Each Option Document
shall state the Option Price that, for all ISOs, shall be at least
100% of the Fair Market Value of the Shares at the time the Option
is granted as determined by the Committee in accordance with this
Section 8.B; provided, however, that if an ISO is
granted to an Optionee who then owns, directly or by attribution
under Section 424(d) of the Code, shares of capital stock of
the Company possessing more than 10% of the total combined voting
power of all classes of stock of the Company or an Affiliate, then
the Option Price shall be at least 110% of the Fair Market Value of
the Shares at the time the Option is granted. If the Common Stock
is traded in a public market, then the Fair Market Value per Share
shall be, if the Common Stock is listed on a national securities
exchange or included in the NASDAQ National Market System, the last
reported sale price per share thereof on the relevant date, or, if
the Common Stock is not so listed or included, the mean between the
last reported “bid” and “asked” prices per
share thereof, as reported on NASDAQ or, if not so reported, as
reported by the National Daily Quotation Bureau, Inc., or as
reported in a customary financial reporting service, as applicable
and as the Committee determines, on the relevant date. If the
Common Stock is not traded in a public market on the relevant date,
the Fair Market Value shall be as determined in good faith by the
Committee.
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C.
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Exercise. No Option shall be deemed to have
been exercised prior to the receipt by the Company of written
notice of such exercise and of payment in full of the Option Price
for the Shares to be purchased. Each such notice shall specify the
number of Shares to be purchased and shall (unless the Shares are
covered by a then current registration statement or a Notification
under Regulation A under the Securities Act of 1933, as
amended (the “Act”)), contain the Optionee’s
acknowledgment in form and substance satisfactory to the Company
that (i) such Shares
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are
being purchased for investment and not for distribution or resale
(other than a distribution or resale that, in the opinion of
counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act), (ii) the Optionee has
been advised and understands that (A) the Shares have not been
registered under the Act and are “restricted
securities” within the meaning of Rule 144 under the Act
and are subject to restrictions on transfer and (B) the
Company is under no obligation to register the Shares under the Act
or to take any action that would make available to the Optionee any
exemption from such registration, (iii) such Shares may not be
transferred without compliance with all applicable federal and
state securities laws, and (iv) an appropriate legend
referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed on
the certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending
(I) registration under federal or state securities laws,
(II) the receipt of an opinion that an appropriate exemption
from such registration is available, (III) the listing or
inclusion of the Shares on any securities exchange or in an
automated quotation system or (IV) the consent or approval of
any governmental regulatory body whose consent or approval is
necessary in connection with the issuance of such Shares, the
Company may defer exercise of any Option granted hereunder until
any of the events described in this Section 8.C has
occurred.
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D.
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Medium of Payment.
An Optionee shall pay
for Shares (i) in cash, (ii) by certified check payable
to the order of the Company, or (iii) by such other mode of
payment as the Committee may approve, including, without
limitation, payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board.
Furthermore, the Committee may provide in an Option Document that
payment may be made in whole or in part in shares of Common Stock
held by the Optionee for at least six months. If payment is made in
whole or in part in shares of Common Stock, then the Optionee shall
deliver to the Company certificates registered in the name of such
Optionee representing the shares of Common Stock owned by such
Optionee, free of all liens, claims and encumbrances of every kind
and having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to
be exercised by the payment in shares of Common Stock, accompanied
by stock powers duly endorsed in blank by the Optionee.
Notwithstanding the foregoing, the Committee may impose from time
to t
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