(ii) For the fiscal year of the Company beginning January 29, 2006 (“CurrentFiscal Year”), Employee’s bonus eligibility shall be calculated on a prorata basis, based upon the date of his promotion to the position of ViceChairman, Stores, Operations, Private Brand, Merchandise Planning andAllocation, as follows:(A) For the period through October 1, 2006, Employee shall beeligible for a bonus with the following parameters: a thresholdbonus of 33.75% of Employee’s Base Salary in effect at the end of theCurrent Fiscal Year; a target bonus of 45% of Employee’s Base Salaryin effect at the end of the Current Fiscal Year; and a maximum bonusof 67.5% of Employee’s Base Salary in effect at the end of theCurrent Fiscal Year.(B) For the period commencing October 2, 2006, Employee shall beeligible for a bonus with the following parameters: a thresholdbonus of 56.25% of Employee’s Base Salary in effect at the end of theCurrent Fiscal Year; a target bonus of 75% of Employee’s Base Salaryin effect at the end of the Current Fiscal Year; and a maximum bonusof 112.5% of Employee’s Base Salary in effect at the end of theCurrent Fiscal Year.(C) If earned, one bonus will be paid, based upon provisions ofsubsections (A) and (B) above, depending upon the level ofachievement with respect to the performance measures determined bythe HRCC.(iii) For fiscal years of the Company subsequent to the Current Fiscal Yearduring the Term of this Agreement, Employee shall be eligible to earn abonus, with the following parameters: a threshold bonus of 56.25% ofEmployee’s Base Salary; a target bonus of 75% of Employee’s Base Salary; anda maximum bonus of 112.5% of Employee’s Base Salary. If earned, one bonuswill be paid depending upon the level of achievement with respect to theperformance measures determined by the HRCC.”Section 4. Long Term Incentive Plan. Amendment of Paragraph 4(c) of theAgreement. The following is substituted for Paragraph 4(c) of the Agreement:“4(c). Long Term Incentives(i) Restricted Share Grant. On October 2, 2006, Employee received,under The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive andPerformance-Based Award Plan (“Stock Incentive Plan”), a one time grant of5,250 restricted shares of the Company’s Common Stock (“Restricted Shares”).Employee’s ownership of these Restricted Shares shall vest on October 2,2009 provided that Employee is continuously employed by the Company throughOctober 2, 2009.
 
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(ii) On October 2, 2006, Employee received, under the Stock Incentive Plan,a one time grant of options to purchase 21,500 shares of the Company’sCommon Stock at a purchase price equal to the fair market value of the stockon October 2, 2006 (“Options”). The Options shall vest ratably, providedthat Employee is continuously employed by the Company on each respectivedate, in three installments as follows: 7,166 shares on October 2, 2007;7,167 shares on October 2, 2008; and 7,167 shares on October 2, 2009.(iii) Employee may receive grants of restricted shares or options in thefuture in the discretion of the Company.”Section 5. Resignation for “Good Reason.” The following shall apply in lieuof Paragraph 8(b)(i) of the Agreement:Employee may resign for “Good Reason,” defined below, upon 30 days’ writtennotice by Employee to the Company except as set forth in Paragraph 8(c) ofthe Agreement. The Company may waive Employee’s obligation to work duringthis 30 day notice period and terminate his employment immediately, but ifthe Company takes this action in the absence of agreement by Employee,Employee shall receive the salary that otherwise would be due through theend of the notice period. For purposes of this Agreement, “Good Reason”shall mean any of the following: (A) the Company’s transfer of Employee toa position belowthe level of an Executive Vice President; (B) the reduction of Employee’sannualized Base Salary to an amount that is less than Four HundredTwenty-Five Thousand Dollars ($425,000); (C) the reduction of Employee’sthreshold bonus potential below 33.75%, Employee’s target bonus potentialbelow 45% or Employee’s maximum bonus potential below 67.5%; (D) anyrequired relocation from the Milwaukee, Wisconsin area; or (E) any othersubstantial breach of any material provision of the Agreement as modified bythis First Amendment. The parties agree that any changes in Employee’sposition, Base Salary or bonus potential that do not constitute “GoodReason” under (A), (B) or (C) of this subsection shall not be deemed to be abreach of the Agreement or of this First Amendment for any purpose. It isunderstood that the acts or omissions referenced above shall not constitute“Good Reason” unless the Employee provides the Company with written noticedetailing the matters he asserts to be “Good Reason” that the Company doesnot cure within thirty (30) days of receiving the written notice.
 
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Section 6. Term of Agreement; Effective Date of this First Amendment. Amendmentof Paragraph 2 of the Agreement.(a) This First Amendment is effective as of October 2, 2006.(b) In all other respects, Paragraph 2 of the Agreement shall remain in effect.Section 7. Controlling Law. This First Amendment and all questions relatingto its validity, interpretation, performance and enforcement (including, without limitation,provisions concerning limitations of actions), shall be governed by and construed in accordancewith the laws of the Commonwealth of Pennsylvania, notwithstanding any conflict-of-laws doctrinesofsuch state or any other jurisdiction to the contrary, and without the aid of any canon, custom orrule of law requiring construction against the draftsman.Section 8. Execution in Counterparts. This First Amendment may be executedin any number of counterparts, each of which shall be deemed to be an original against any partywhose signature appears thereon, and all of which shall together constitute one and the sameinstrument. This First Amendment shall become binding when one or more counterparts hereof,individually or taken together, shall bear the signatures of all of the parties hereto.Section 9. Effect of First Amendment. Except as may be affected by thisFirst Amendment, all of the provisions of the Agreement, as amended hereby, shall continue in fullforce and effect. The provisions of this First Amendment shall not constitute a waiver ormodification of any terms or conditions of the Agreement other than as expressly set forth herein.IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly executed anddelivered this Agreement, in Pennsylvania.         THE BON-TON STORES, INC.               By: /s/ BYRON BERGREN   12/20/06             Byron Bergren   Date    President and Chief Executive Officer               /s/ STEPHEN BYERS   12/12/06         Stephen Byers   Date  
 
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