Exhibit 10.1

 

ADDENDUM TO EMPLOYMENT AGREEMENT

 

This ADDENDUM TO EMPLOYMENT AGREEMENT (“Addendum”), effective as of May 5, 2017
(the “Effective Date”), is by and between THE BON-TON STORES, INC., a
Pennsylvania corporation (the “Company”), and KATHRYN BUFANO (“Executive”), and
amends the Executive’s Employment Agreement dated July 28, 2014 and effective as
of August 25, 2014 (“Employment Agreement”).

 

WITNESETH:

 

WHEREAS, the Executive and the Company have agreed that Executive’s employment
relationship with the Company and the Executive’s Employment Agreement shall
terminate, effective at the close of business on August 25, 2017, or on such
other earlier date as provided below (“Termination Date”);

 

WHEREAS, Executive and the Company desire to provide for the orderly transition
of Executive’s duties and responsibilities during a Transition Period (defined
below); and

 

WHEREAS, the Executive and the Company have agreed upon the terms upon which
Executive will be employed by the Company during the Transition Period;

 

NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein and intending to be legally bound hereby, the Company and Executive agree
as follows:

 

1.                                                   Termination of the
Employment Agreement and the Employment Relationship. The employment
relationship between the parties shall end on August 25, 2017, upon expiration
of Executive’s Employment Agreement, unless Executive accelerates the
Termination Date upon four (4) weeks’ advance written notice of an earlier
termination date between June 30, 2017 and August 25, 2017. Any acceleration of
the Termination Date is conditioned upon Executive’s prior completion of the
Executive’s Transition Period duties to the reasonable satisfaction of the
Company. Furthermore, the Employment Agreement between the parties shall end as
of the Termination Date. For the avoidance of doubt, this Addendum is intended
to represent the parties’ agreement not to renew the Employment Agreement upon
its expiration and the parties agree that the termination of the Employment
Agreement, the decision not to continue the parties’ employment relationship,
and any events that may occur after April 15, 2017 do not constitute, and cannot
be construed to constitute, termination of employment under Paragraphs 9(c),
(d), (e), (f) or (g) of the Employment Agreement.

 

2.                                                     Transition Period.
Executive shall continue to perform Executive’s duties and responsibilities as
President and Chief Executive Officer of the Company, as modified by this
Addendum, on a full-time basis from the Effective Date of this Agreement through
the Termination Date (the “Transition Period”). Moreover, the parties agree
that, as of May 5, 2017, to the Company’s knowledge, Executive has complied with
all of her obligations under the Employment Agreement.

 

3.                                                       Specific Transition
Period Duties and Responsibilities. Executive agrees that during the Transition
Period Executive shall work cooperatively with the Company and any

 

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successor President and Chief Executive Officer (“Successor”) in the transition
of Executive’s duties and responsibilities and that, among other duties
consistent with Executive’s position, Executive shall: (i) develop, in
conjunction with the Board of Directors, any Successor and senior Company
executives, a new strategic plan; (ii) work with senior Company executives,
including any Successor, to create and maintain relationships with key
stakeholders including, but not limited to, vendors, financial contacts,
analysts and the internal management team; (iii) work with the merchant team to
help that team form deeper relationships with vendors; and (iv) support any
Successor in determining and implementing any changes in organizational
structure. The Company agrees that it will provide Executive the information
that it reasonably deems necessary to comply with these duties and
responsibilities.

 

4.                                            Compensation.

 

(a)                                   Salary. Executive shall continue to
receive her current Base Salary, less applicable withholdings and deductions,
through the Termination Date, in substantially equal installments in accordance
with the Company’s regular executive payroll practices in effect from time to
time. For the avoidance of doubt, if Executive’s Termination Date is before
August 25, 2017, all of Executive’s right to Base Salary shall end as of the
earlier Termination Date.

 

(b)                                  Annual Bonus. Executive shall be entitled
to a pro-rated Annual Bonus pursuant to the terms of the Amended and Restated
Cash Bonus Plan, as amended from time to time (“Cash Bonus Plan”). Any Annual
Bonus shall be computed and paid to Executive no later than April15, 2018.

 

(c)                                        Time-Based Vesting Restricted Shares.
Executive shall be vested in the Time-Based Vesting Restricted Shares set forth
in Paragraph 4(c)(ii)(A) of the Employment Agreement, as of the Termination
Date, in accordance with the terms and conditions of Paragraph 4(c)(ii)(A) of
the Employment Agreement and the Restricted Stock Award attached as Exhibit A to
the Employment Agreement.

 

(d)                                   Performance-Based Vesting Restricted
Shares. Executive shall be vested in the Performance-Based Vesting Restricted
Shares set forth in Paragraph 4(c)(ii)(B) of the Employment Agreement, to the
extent the established performance targets are met, in accordance with the terms
and conditions of Paragraph 4(c)(ii)(B) of the Employment Agreement and the
Restricted Stock Award attached as Exhibit B to the Employment Agreement.

 

(e)                                           Transition Bonus. If Executive
complies in all material respects with the terms and conditions of Executive’s
Employment Agreement, as modified by this Addendum, through the Termination
Date, and signs and does not timely revoke the Separation Agreement and General
Release attached hereto as Exhibit 1, the Company shall pay Executive a
transition bonus of Five Hundred Thousand Dollars ($500,000), less applicable
deductions and withholdings (“Transition Bonus”). The Transition Bonus shall be
payable 50% in a lump sum within 30 days after Executive signs and does not
timely revoke the Separation Agreement and General Release, and 50% in a lump
sum within 90 days after Executive signs and does not timely revoke the
Separation Agreement and General Release. In the event the review and revocation
period could cause the first payment to be made in either of two successive
calendar

 

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years, the first such payment shall be made no earlier than January 1 of the
second such calendar year.

 

(f)                                            Relocation Expenses. If Executive
complies in all material respects with the terms and conditions of Executive’s
Employment Agreement, as modified by this Addendum, through the Termination
Date, and signs and does not timely revoke the Separation Agreement and General
Release, the Company shall pay Executive the sum of One Hundred Thousand Dollars
($100,000) based on Executive’s representations of the expenses she will incur
related to relocation from Milwaukee after she leaves the Company (“Relocation
Expenses”). This payment shall be subject to all required tax withholdings and
shall be reported on IRS Form W-2, as required by law. Executive agrees to
indemnify and hold harmless the Company from any tax liabilities, interest,
penalties, and/or costs that may be assessed or incurred in relation to
payment(s) made pursuant to this Section 4(±), except that Executive shall not
be liable for any FICA contributions assessed against the Company. The
Relocation Expenses will be paid in a lump sum within 30 days after Executive
signs and does not timely revoke the Separation Agreement and General Release.
In the event the review and revocation period could cause the first payment to
be made in either of two successive calendar years, the first such payment shall
be made no earlier than January 1 of the second such calendar year.

 

(g)                                         COBRA Payments. If Executive fully
complies with the terms and conditions of Executive’s Employment Agreement, as
modified by this Addendum, through the Termination Date, signs and does not
timely revoke the Separation Agreement and General Release, the Company shall
pay to Executive the amount of any COBRA premium through December 31, 2017,
which Executive may, but is not required to, use to cover costs of health
coverage whether through COBRA continuation, or otherwise.

 

(h)                                       No Other Compensation. The Transition
Bonus, Relocation Expenses and payment provided pursuant to section 4(g) shall
be in lieu of any other payment to which Executive may be entitled by reason of
any severance plan sponsored by the Company or otherwise.

 

(i)                                              Benefits. Executive shall
remain eligible for the benefits set forth in Paragraphs 6 and 7 of the
Employment Agreement through the Termination Date and shall be paid for any
accrued, unused vacation within 30 days after Executive’s Termination Date. For
the avoidance of doubt, if Executive’s Termination Date is before August 25,
2017, all of Executive’s right to the benefits set forth in Paragraphs 6 and 7
of the Employment Agreement shall end as of the earlier Termination Date.

 

G)                                            Expense Reimbursement. The Company
shall pay or reimburse Executive for reasonable entertainment and other business
expenses incurred by Executive in connection with the performance of Executive’s
duties under the Employment Agreement and this Addendum through the Termination
Date, upon receipt of vouchers therefor and in accordance with the Company’s
regular reimbursement procedures and practices in effect from time to time. The
parties agree that Executive shall submit any expenses for reimbursement within
fifteen (15) days after the Termination Date.

 

(k)                                          No Other Compensation. Executive
shall only be eligible for the compensation and benefits set forth in this
Paragraph 4 of the Addendum and shall not be entitled to any additional
compensation or benefits, including, but not limited to, any

 

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equity-based compensation referenced in Paragraph 4(c)(ii)(C) of the Employment
Agreement.

 

5.                                                   Resignation from Officer
and Director Positions. Executive will resign from all director and officer
positions with the Company, effective as of the Termination Date. Executive
agrees to cooperate with the Company in transitioning her director and officer
responsibilities and to promptly execute any documents necessary to effectuate
such resignations.

 

6.                                                   Announcements. Prior to a
joint public announcement by the Company and Executive in the form agreed to by
the parties, Executive shall not announce or otherwise communicate in any manner
the existence of the terms of this Addendum or any facts or circumstances
related thereto, except to her family, attorney, and tax and financial advisors.
The Company and the Executive agree to work on an agreed-upon date for the
public announcement, and agree that such announcement will occur no later than
June 1, 2017. Subject to the mutual non-disparagement provision in Section 5 of
the Separation Agreement and Release, nothing in this Addendum prevents
Executive from accurately sharing or commenting on public information about the
Company and Executive’s tenure at the Company.

 

7.                                                    Restrictive Covenants.
Paragraph 12 of the Employment Agreement, Non- Solicitation, Non-Competition and
Confidentiality, shall be replaced as follows:

 

(a)                                             During Executive’s employment
with the Company and for a period of two (2) years after the termination of
Executive’s employment with the Company for any reason whatsoever, whether by
Executive or by the Company and whether during the term of this Addendum or
subsequent to the expiration of this Addendum, Executive shall not, directly or
indirectly, solicit, induce, encourage, influence or otherwise cause any
customer, employee, consultant, independent contractor or supplier of the
Company to change his, her or its business relationship with or terminate
employment with the Company.

 

(b)                                         During Executive’s employment with
the Company, Executive shall not be engaged by or engage in business with (as a
principal, partner, director, officer, agent, employee, consultant, owner,
independent contractor or otherwise) or be financially interested in (other than
any investment approved by the Board of Directors) any Competitor of the Company
in the United States. For purposes of this Addendum, “Competitor” means any
person or entity conducting business in the retail department store industry,
including but not limited to each of Macy’s Inc., Dillard’s Inc., Kohl’s
Corporation, Belk, Inc. and J.C. Penney, Inc. and the affiliates and successors
of each of them. Executive’s passive ownership of less than 2% of any class of
securities of a company shall not constitute a violation of the first sentence
of this Paragraph 7(b).

 

(c)                                           During Executive’s employment with
the Company and at all times thereafter, and except as required by law,
Executive shall not use for Executive’s personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of, any
person, firm, association or company other than the Company, any confidential
information of the Company that Executive acquires in the course of Executive’s
employment, which is not otherwise lawfully known by and readily available to
the general public or which has not been disclosed publically through no fault
of the Executive. This confidential information includes,

 

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but is not limited to: any material referred to in Paragraph 11 of the
Employment Agreement or any nonpublic information regarding the business,
marketing, legal or accounting methods, policies, plans, procedures, strategies
or techniques; research or development projects or results; trade secrets or
other knowledge or processes of or developed by the Company; names and addresses
of employees, suppliers or customers. Executive confirms that such information
is confidential and constitutes the exclusive property of the Company, and
agrees that, immediately upon Executive’s termination, whether by Executive or
by the Company and whether during the term of this Addendum or subsequent to the
expiration of this Addendum, Executive shall deliver to the Company all
correspondence, documents, books, records, lists, computer programs and other
writings relating to the Company’s business; and Executive shall retain no
copies, regardless of where or by whom said writings were kept or prepared.

 

(d)                                         During Executive’s employment with
the Company, Executive shall, upon reasonable notice, furnish to the Company
such information pertaining to Executive’s employment with the Company as may be
in Executive’s possession. The Company shall reimburse Executive for all
reasonable expenses incurred by Executive in fulfilling Executive’s obligation
under this subparagraph (d).

 

(e)                                          The provisions of subparagraphs
(a), (b), (c) and (d) of this Paragraph 7 shall survive the cessation of
Executive’s employment for any reason, as well as the expiration of the
Employment Agreement at the end of its Term or the termination of the Employment
Agreement at any time prior thereto.

 

(f)                                           Executive acknowledges that the
restrictions contained in this Paragraph 7, in view of the nature of the
business in which the Company is engaged and the Executive’s position with the
Company, are reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of those restrictions would result in
irreparable injury to the Company. Executive therefore consents and agrees that,
in the event of a breach or threatened breach of any of the restrictions
contained in this Paragraph 7, the Company shall be entitled to seek a
temporary, preliminary and/or permanent injunction and/or other equitable relief
against such breach or threatened breach from any court of competent
jurisdiction, without the necessity of showing any actual damages or that money
damages would not afford an adequate remedy, and without the necessity of
posting any bond or other security. The aforementioned relief shall be in
addition to, and not in lieu of, any other legal remedies, monetary damages or
other available forms of relief.

 

(g)                                           Executive agrees that if any or
any portion of the foregoing covenants, or the application thereof, is construed
to be invalid or unenforceable, the remainder of such covenant or covenants or
the application thereof shall not be affected and the remaining covenant or
covenants will then be given full force and effect without regard to the invalid
or unenforceable portions. If any covenant is held to be unenforceable because
of the area covered, the duration thereof, or the scope thereof, Executive
agrees that the Court making such determination shall have the power to reduce
the area and/or the duration, and/or limit the scope thereof, and the covenant
shall then be enforceable in its reduced form. If Executive violates any of the
restrictions contained in subparagraphs (a) or (b), the period of such violation
(from the commencement of any such violation until such time as such violation
shall be cured by Executive to the satisfaction of the Company) shall not count
toward or be included in the

 

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restrictive period contained in subparagraphs (a) and (b).

 

(h)                                        For purposes of this Addendum, the
term “Company” shall include not only The Bon-Ton Stores, Inc., but also any of
its successors, assigns, subsidiaries or affiliates. Executive consents to the
assignment of this Addendum to any purchaser of the Company or a substantial
portion of its assets.

 

(i) Section 409A. For purposes of establishing the Executive’s right to receive
a payment under this Addendum, in no event shall the Termination Date be
considered to occur prior to the date the Executive experiences a “separation
from service” from the Company as described in Treasury Regulations
Section 1.409A-l(h). Notwithstanding any provision of this Addendum or the
Executive’s Employment Agreement to the contrary, if the Executive is considered
a “specified employee” upon the Termination Date under such procedures as
established by the Company in accordance with the Nonqualified Deferred
Compensation Rules, any portion of a cash or benefit distribution made upon her
termination from employment that would cause the acceleration of, or an addition
to, any taxes pursuant to Internal Revenue Code Section 409A (“409A”) may not
commence earlier than six (6) months after the Termination Date; any payments or
benefits that would be exempt from 409A shall be paid in accordance with the
original schedules noted in other sections of this Agreement. Therefore, in the
event this Section is applicable to the Executive, any distribution which would
cause the acceleration of, or an addition to, any taxes pursuant to 409A that
would otherwise have been paid to the Executive within the first six (6) months
following the Termination Date shall be accumulated and paid to the Executive in
a lump sum on the first day of the seventh (7th) month following the Termination
Date. All subsequent distributions, if any, shall be paid in the manner
otherwise specified herein. Executive’s right to receive any installment
payments payable hereunder shall be treated as a right to receive a series of
separate payments and, accordingly, each such installment payment shall at all
times be considered a separate and distinct payment for purposes of409A.

 

8.                                                     Paragraph Headings. The
paragraph headings in this Addendum are for convenience only; they form no part
of this Addendum and shall not affect its interpretation.

 

9.                                                     Entire Understanding.
This Addendum contains the entire understanding between the Company and
Executive with respect to the subject matter hereof and supersedes all prior and
contemporary agreements and understandings, inducements or conditions, express
or implied, written or oral, between the Company and Executive except as herein
contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
Other than as set forth in this Addendum, all other terms and conditions of the
parties’ Employment Agreement remain in full force and effect.

 

10.                                                Execution in Counterparts.
This Addendum may be executed in any number of counterparts, each of which shall
be deemed to be an original against any party whose signature appears thereon,
and all of which shall together constitute one and the same instrument. This
Addendum shall become binding when one or more counterparts hereof, individually
or taken together, shall bear the signatures of all of the parties hereto.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly
executed and delivered this Agreement as of the date first above written.

 

 

THE BON-TON STORES, INC.

 

 

 

By:

/s/ Tim Grumbacher

 

 

Tim Grumbacher,

 

 

Chairman of the Board of Directors

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

/s/ Kathryn Bufano

 

Kathryn Bufano

 

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Exhibit 1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Separation Agreement and General Release (the “Agreement”) is by and
between The Bon- Ton Stores, Inc. (“Company”) and Kathryn Bufano (“Executive”).

 

In consideration of the mutual promises and commitments made herein, and
intending to be legally bound hereby, Executive and the Company agree as
follows:

 

1.                                      Termination of Employment and Director
Relationships

 

A.                                    Executive is party to an Employment
Agreement dated July 28, 2014 (“Employment Agreement”), and an Addendum to
Employment Agreement dated May 5, 2017 (“Addendum”).

 

B.                                    The parties, pursuant to the terms of the
Addendum, have agreed to end Executive’s employment relationship, and
Executive’s participation as an officer and director of the Company, effective
August 25, 2017 or on such other earlier date as provided pursuant to the
parties’ Addendum (the “Termination Date”); but if, upon the parties’ mutual
agreement, Executive separates from the Company on a date other than August 25,
2017, the Termination Date for purposes of this Agreement will be the actual
date on which the employment relationship between the parties is terminated.

 

C.                                    Executive no longer will be authorized to
transact business or incur any expenses, obligations and liabilities on behalf
of the Company after the Termination Date. Executive acknowledges the following:
(i) Executive has no unreported reimbursements to report or claim against the
Company; and (ii) Executive has reported to the Company any and all work-related
injuries incurred during employment.

 

2.                                      Transition Bonus, Relocation Expenses
and COBRA Payments

 

A.                                    In consideration for Executive signing,
returning and not revoking this Agreement (which contains a General Release) in
accordance with the terms of Section 12 of this Agreement, and complying with
the terms and conditions of Executive’s Employment Agreement, as modified by the
Addendum, the Company has agreed to pay Executive a transition bonus of Five
Hundred Thousand Dollars ($500,000), less applicable deductions and withholdings
(“Transition Bonus”) pursuant to the terms of the Addendum.

 

B.                                    The Transition Bonus shall be payable 50%
in a lump sum within 30 days after Executive signs and does not timely revoke
this Agreement and 50% in a lump sum within 90 days after Executive signs and
does not timely revoke this Agreement.

 

C.                                    In further consideration for Executive
signing, returning and not revoking this Agreement (which contains a General
Release) in accordance with the terms of Section 12 of this Agreement, and
complying with the terms and conditions of

 

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Executive’s Employment Agreement, as modified by the Addendum, the Company has
agreed to pay Executive the sum of One Hundred Thousand Dollars ($100,000) based
on Executive’s representations of the expenses she will incur related relocation
from Milwaukee after she leaves the Company (“Relocation Expenses”). As a
negotiated term of this agreement, the parties have agree that the Relocation
Expenses shall be reported on a W-2.

 

D.                                    The Relocation Expenses will be paid in a
lump sum within 30 days after Executive signs and does not timely revoke the
Separation Agreement and General Release.

 

E.                                     In further consideration for Executive
signing, returning and not revoking this Agreement (which contains a General
Release) in accordance with the terms of Section 12 of this Agreement, complying
with the terms and conditions of Executive’s Employment Agreement, as modified
by the Addendum, through the Termination Date, the Company shall pay Executive
the amount of COBRA premiums through December 31, 2017 (“COBRA Payments”), which
Executive may, but is not required to, use to cover costs of health coverage
whether through COBRA continuation, or otherwise..

 

F.                                      The Transition Bonus, Relocation
Expenses and COBRA Payments shall be in lieu of any other payment to which
Executive may be entitled by reason of any severance plan sponsored by the
Company or otherwise.

 

3.                                      General Release. In consideration for
the Transition Bonus, Relocation Expenses and COBRA Payments, Executive releases
and forever discharges the Company (defined for this General Release to include
the Company and all of its respective shareholders, officers, directors, agents,
representatives, attorneys and employees and their successors, heirs and
assigns) from every claim, demand, right, action or cause of action of
whatsoever kind or nature, in law or in equity, direct or indirect, liquidated
or unliquidated, known or unknown, that Executive ever had or now has, against
the Company (as defined herein) with respect to any and all matters relating to
Executive’s employment with the Company and the end of that employment with the
Company, and any and all other claims of whatsoever kind or nature which
Executive may have against the Company (as defined herein) arising from events
occurring on or before Executive’s execution of this Release. This Release of
the Company (as defined herein) also specifically includes, but is not limited
to, any and all claims for employment discrimination, harassment and/or
retaliation; all claims in contract, including but not limited to, claims for
breach of contract, claims for promissory estoppel and claims for detrimental
reliance; all claims in tort (including, but not limited to, all claims for
wrongful discharge, fraud, intentional and/or negligent misrepresentation,
intentional and/or negligent infliction of emotional distress,
defamation/libel/slander, fraudulent inducement, including fraudulent inducement
as to this Agreement); all claims for wages, bonuses, profit sharing,
performance awards, severance pay, vacation pay, health insurance premiums,
other insurance premiums, medical expense/costs, retirement contributions or
benefits, any other fringe benefit, or any form of income or compensation; and
all claims arising under Title VII of the Civil Rights Act of 1964, as amended,
the Pennsylvania Human Relations Act, as amended, and the Age

 

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Discrimination in Employment Act, as amended. This Release also includes, but is
not limited to, any and all claims for any type of damages (, back pay; front
pay; compensatory damages for emotional distress/pain and suffering, etc.;
punitive damages; liquidated damages; consequential damages for an employment
search); for any type of equitable relief (i.e., reinstatement; injunction;
etc.); for attorneys’ fees/costs; and for interest.

 

4.                                      Exceptions to the Release. This Release
does not waive any claims for unemployment or workers’ compensation or for any
claims related to the enforcement of this Agreement or for amounts owed under
the Addendum or this Agreement. Nothing in this Release prevents Executive from
filing a charge or complaint with or from participating in an investigation or
proceeding conducted by any federal, state or local government agency, including
but not limited to, the reporting of any whistleblower complaint to the
Securities and Exchange Commission (“SEC”). Notwithstanding the foregoing, to
the extent permitted by law, Executive waives the right to individual relief
based on claims asserted in any charge or complaint filed with the Equal
Employment Opportunity Commission (“EEOC”), the Pennsylvania Human Relations
Commission (“PHRC”) or any other applicable state or local fair employment
practices agency, including, but not limited to, an award of monetary damages or
reinstatement to employment with the Company.

 

5.                                      Mutual Non-Disparagement. Executive
agrees that Executive will not at any time or in any manner make or cause to be
made any written or verbal statements, or take any actions that disparage, are
detrimental to or damage the reputation of the Company and its former or current
officers, directors, employees, agents and/or owners. The Company’s Board of
Directors and the Company’s then President and Chief Executive Officer agree
that they will not at any time or in any manner make or cause to be made any
written or verbal statements, or take any actions that disparage, are
detrimental to, or damage the reputation of the Executive.

 

6.                                      Company Property. Executive agrees that
Executive has returned or will return to the Company on or before Executive’s
Termination Date, any and all Company property and proprietary and/or
confidential information, including originals and copies thereof (whether in
hard copy or electronic form), which was or may be in Executive’s possession or
under Executive’s control. Any such materials and other property of Company that
Executive possesses, including that which exists on Executive’s personal
computer(s), electronic equipment, storage media and e-mail account(s), shall be
returned in the same format that Executive possesses such (i.e., hardcopy paper
documents returned in their original format and all electronically stored
documents returned via electronic media (e.g., thumb drive or CD Rom)) on or
before Executive’s Termination Date. To the extent an electronic copy exists of
the returned materials, Executive must permanently delete such electronic
copy/copies on or before Executive’s Termination Date (following transmittal to
Company of such documents as set forth above). Executive understands that if
Executive does not return any hardcopy paper documents and/or electronic media
within the time period set forth above, Executive is affirming and representing
to the best of Executive’s knowledge that Executive has no such materials in
Executive’s possession.

 

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7.                                     Employment Agreement and Addendum
Obligations. This Agreement does not affect the Executive’s continuing
obligations under the Employment Agreement and the Addendum. Executive expressly
agrees to comply with all obligations set forth in the Employment Agreement and
Addendum that survive termination of the Parties’ employment relationship.

 

8.                                     No Knowledge of Wrongdoing. Executive
represents and warrants that Executive (a) has no knowledge that any officer,
director, employee, agent, or representative of the Company has committed or is
suspected of committing any act which is or may be in violation of any federal
or state law or regulation or has acted in a manner which requires corrective
action of any kind and (b) Executive has not informed the Company of, and
Executive is unaware of, any alleged violations of the Company’s standards of
business conduct or personnel policies, or other misconduct by the Company (as
defined in Section 3 of this Agreement), that have not been resolved
satisfactorily by the Company.

 

9.                                     No Obligation to Employ Executive in the
Future. The Company has no obligation, contractual or otherwise, to rehire,
employ, or hire Executive at any time in the future. Executive further agrees
that if Executive seeks any employment with the Company, a rejection of
Executive’s application or inquiry will not constitute a breach of this
Agreement or a violation in any manner whatsoever by the Company.

 

10.                              Cooperation. Executive agrees to cooperate with
the Company and its attorneys with respect to any proceedings arising out of or
relating to matters of which Executive was involved prior to the termination of
Executive’s employment.

 

11.                              No Admission of Wrongdoing. Neither this
Agreement nor the furnishing of the consideration for this Agreement shall be
deemed or construed at any time for any purpose as an admission or evidence of
any liability or unlawful conduct of any kind by the Company.

 

12.                               Advice of Counsel, Consideration and
Revocation Periods and Effective Date.

 

A.                                    Executive is advised to consult with an
attorney prior to signing this Agreement that includes a General Release.
Executive has twenty-one (21) days to consider whether to sign this Agreement
(the “Consideration Period”), and is advised that the Agreement may not be
signed before the Termination Date. If the Consideration Period ends before
Executive’s Termination Date, Executive will be able to sign the Agreement (if
Executive so chooses) on Executive’s Termination Date or within five
(5) calendar days after Executive’s Termination Date.

 

B.                                    Executive must return this signed
Agreement to the Chairman of the Board of the Company, at The Bon-Ton
Stores, Inc., 2801 East Market Street, York, PA 17402, by first class mail or by
hand delivery within the Consideration Period. If Executive signs and returns
this Agreement before the end of the Consideration Period, it is because
Executive freely chose to do so after carefully considering its terms. If
Executive does, by mistake, sign this Agreement before Executive’s

 

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Termination Date, that mistaken, premature signature will not be valid and will
not create a legally effective or binding Agreement. Instead, if Executive signs
this Agreement before Executive’s Termination Date, this Agreement will be
returned to Executive with a blank signature page to be signed by Executive on
Executive’s Termination Date should Executive still want to do so.

 

C.                                    Additionally, Executive shall have seven
(7) days from the date of the signing of this Agreement to revoke it by
delivering a written notice of revocation within the seven-day revocation period
to the Chairman of the Board at the above address. If the revocation period
expires on a weekend or holiday, Executive will have until the end of the next
business day to revoke.

 

D.                                    This Agreement will become effective on
the eighth day after Executive signs this Agreement provided Executive does not
revoke this Agreement.

 

E.                                     Executive agrees with the Company that
changes to the Agreement, whether material or immaterial, do not restart the
running of the Consideration Period. The Company is not required to make any
payment described in this Agreement unless the Agreement becomes effective.

 

13.                              Applicable Law and General Provisions. This
Agreement shall be interpreted under the laws of Pennsylvania. Except for the
Employment Agreement and Addendum between Executive and the Company, certain
portions of which remain in full force and effect, this Agreement sets forth the
entire agreement between the Parties. Executive is not relying on any other
agreements or oral representations not fully addressed in this
Agreement.           The provisions of this Agreement are severable, and if any
part of this Agreement is found by a court of law to be unenforceable, the
remainder of this Agreement will continue to be valid and effective.

 

14.                              Paragraph Headings. The paragraph headings in
this Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.

 

15.                              Significance of Executive’s
Signature.                           Executive’s signature below indicates that
Executive:

 

A.                                    has carefully read and reviewed this
Agreement;

 

B.                                    fully understands all of its terms and
conditions;

 

C.                                    fully understands that the Agreement is
legally binding and that by signing it, Executive is giving up certain rights;

 

D.                                    has not relied on any other
representations by the Company, whether written or oral, concerning the terms of
the Agreement;

 

E.                                     has been provided at least twenty-one
(21) days to consider this Agreement (which includes a General Release) and
agrees that changes to this Agreement, whether material or immaterial, do not
restart the Consideration Period;

 

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F.                                      will have seven (7) days to revoke
Executive’s acceptance of this Agreement after signing it;

 

G.                                    has been advised, and has had the
opportunity, to consult with an attorney prior to signing the Agreement;

 

H.                                   has signed and delivered this Agreement
freely and voluntarily; and

 

I.                                        is duly authorized to sign this
Agreement and has not assigned or attempted to assign or give to anyone else any
claim Executive has or believes that Executive may have against the Company.

 

16.                              Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. A signature made on a
faxed or electronically mailed copy of the Agreement, or a signature transmitted
by facsimile or electronic mail, shall have the same effect as the original
signature.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Separation Agreement and
General Release on the date(s) set forth below.

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

Date of Signing

 

 

Kathryn Bufano

 

 

 

NOT TO BE SIGNED BEFORE THE

TERMINATION DATE

 

 

 

 

 

 

 

ACCEPTED:

 

 

 

 

 

 

 

THE BON-TON STORES, INC.

 

 

 

 

 

 

By:

 

Date of Signing

 

 

Chairman of the Board of Directors

 

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