<PAGE>

                                  EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT made as of this 13th day of December 2004, by and between
THE BON-TON STORES, INC., a Pennsylvania corporation (the "Company"), and DAVID
ZANT ("Employee").

                              W I T N E S S E T H:

      In consideration of the mutual promises and covenants contained herein and
intending to be legally bound hereby, the Company and Employee agree as follows:

      1. Position and Responsibilities

            (a) The Company hereby employs Employee and Employee hereby accepts
employment by the Company as the Company's Vice Chairman and Chief Merchandising
Officer. Employee shall have all the duties and responsibilities normally
attendant to the position of Chief Merchandising Officer of a retail department
store business and shall report directly to the Chief Executive Officer of the
Company or the person performing the duties of the Chief Executive Officer.

            (b) Throughout the term of this Agreement, Employee shall devote his
entire working time, energy, attention, skill and best efforts to the affairs of
the Company and to the performance of his duties hereunder in a manner which
will faithfully and diligently further the business and interests of the
Company. Employee may not, directly or indirectly, do any work for or on behalf
of a competitor or any other company while employed by the Company. However,
nothing herein contained shall be deemed to prevent or limit the right of
Employee to invest any of his personal funds in less than one percent of the
capital stock or other securities of

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any corporation whose stock or securities are publicly owned or are regularly
traded on any public exchange, nor shall this clause be construed as preventing
Employee from investing his assets in such other form or manner as will not
require any services on the part of the Employee in the operation or the affairs
of entities in which such investments are made. Approval of board memberships
and participation in lectures and teaching activities will be at the discretion
of the Chief Executive Officer, however, such approval will not be unreasonably
withheld, provided that such activities do not significantly interfere with
Employee's duties under this Agreement.

            (c) Employee shall not obtain goods or services or otherwise deal on
behalf of the Company with any business or entity in which Employee or a member
of his family has a financial interest or from which Employee or a member of his
immediate family may derive a financial benefit as a result of such transaction,
except that this prohibition shall not apply to any public company in which
Employee or a member of his immediate family owns less than one percent of the
outstanding stock.

      2. Term of Agreement Employee's employment hereunder, shall commence as of
January 1, 2005 (the "Effective Date"), and shall continue through and terminate
on January 31, 2008, unless sooner terminated in accordance with Paragraph 10
below.

      3. Place of Performance Employee shall be based at the regular executive
offices of the Company in York, PA., except for travel required for Company
business. Employee's cost of relocation to York, PA. shall be fully reimbursed
in accordance with the Company's relocation policy. In the event of a relocation
of the Company's executive offices in the future requiring Employee to relocate
his residence, Employee shall relocate subject to reimbursement for

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relocation expenses on the same basis and to the same extent as other similarly
situated Company executives.

      4. Compensation

            (a) Salary Employee shall receive a base salary at the annual rate
of $500,000. This base salary, less taxes and normal deductions, shall be paid
to Employee in substantially equal installments in accordance with the Company's
regular executive payroll practices in effect from time to time. The annual base
salary may be reviewed from time to time during the term of this Agreement by
the Chief Executive Officer (subject to review by the Compensation Committee of
the Board of Directors) to ascertain whether, in the Company's sole discretion,
such base salary should be increased, and once increased, such base salary shall
not be decreased. The first such salary review occur in 2006.

            (b) Signing Bonus Employee will receive a bonus of $225,000 in the
first payroll period following the Effective Date to compensate him for his lost
bonus opportunity at his prior employer.

            (c) Annual Bonus Employee will participate in the Company's bonus
plan for senior executives in accordance with its terms and conditions. Employee
shall be eligible to earn an annual target bonus of 50% of his base salary and a
maximum bonus of 100% of his base salary in accordance with objectives to be
determined by the Company. To the extent reasonably practicable, the annual
bonus shall be computed within 90 days following the close of the Company's
fiscal year and paid within 30 days of its computation. Employee's first year of
participation in the bonus plan shall be in the fiscal year ending January 31,
2006. For the first

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year of participation only, Employee shall be guaranteed a minimum bonus payment
of $125,000 provided he is employed by the Company on the date that bonus
payments are made in 2006.

            (d) Stock Options On the Effective Date, Employee shall receive a
one time grant of options to purchase 60,000 shares of the Company's Common
Stock at a purchase price equal to the fair market value of the stock on the
date of grant ("Options"). The Options will be granted pursuant to the terms of
the Company's 2000 Stock Incentive Plan or a similar plan ("the Plan"). The
Options shall vest in three annual equal installments on January 31, 2006,
January 31, 2007 and January 31, 2008.

            (e) Restricted Shares On the Effective Date, Employee will be
granted 40,000 restricted shares of the Company's Common Stock pursuant to the
terms of the Plan. Employee's ownership of 15,000 of these shares will vest on
August 31, 2005, provided he is still employed on that date. Employee's
ownership of 10,000 of these shares will vest on August 31, 2007, provided he is
still employed on that date. Employee's ownership of 15,000 of these shares will
vest on August 31, 2008, provided he is still employed on that date.

      5. Allowances The Company shall provide Employee with $9,500 per year,
payable monthly, as an automobile allowance. The Company shall also provide
Employee with an annual perquisite allowance of up to $5,000 per year to
reimburse Employee for expenses associated with membership in a private country
club of his choice.

      6. Medical Insurance Employee and his eligible dependents shall be
eligible to participate in the Company's group medical plans in accordance with
the terms of such plans and, subject to the restrictions and limitations
contained in the insurance agreement or

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agreements. The Company shall pay Employee up to $2,300 per year for medical
expenses which are not covered by the Company's medical plan.

      7. Other Benefits Employee shall be eligible to participate in the
Company's profit sharing plan, deferred compensation plan, discount program,
vacation plan, long-term disability plan and employee benefit programs generally
made available to other executives of the Company, subject to their respective
generally applicable eligibility requirements, terms, conditions and
restrictions; provided however, that payments under this Agreement shall be in
lieu of any severance benefits otherwise provided by the Company. However,
nothing in this Agreement shall preclude the Company from amending or
terminating any such insurance, benefit, program or plan so long as the
amendment or termination is applicable to the Company's executives generally.
Moreover, the Company's obligations under this provision shall not apply to any
insurance, benefit, program or plan made available on an individual basis to one
or more select executive employees by contract if such insurance, benefit,
program or plan is not made available to all executive employees. With respect
to Employee's participation in the Company's vacation plan, Employee shall be
eligible for four weeks vacation per calendar year, which vacation entitlement
shall be pro-rated in any calendar year in which the Employee does not work the
entire calendar year. Employee shall also be entitled to the one-time
transitional benefits provided for in his offer letter, and payment of his
reasonable legal fees incurred in connection with this Agreement up to a maximum
of $3,000. In addition, Employee shall be entitled to participate in the Bon-Ton
Stores, Inc. Supplemental Executive Retirement Plan (the "SERP") pursuant to all
terms and conditions set forth therein, and as further provided in Exhibit A
hereto, providing specific terms and conditions regarding Employee's
participation in the SERP.

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      8. Business Expenses The Company shall pay or reimburse Employee for
reasonable entertainment and other expenses incurred by Employee in connection
with the performance of Employee's duties under this Agreement upon receipt of
vouchers therefor and in accordance with the Company's regular reimbursement
procedures and practices in effect from time to time.

      9. Termination of Employment Notwithstanding any other provision of this
Agreement, Employee's employment and all of the Company's obligations or
liabilities under this Agreement may be terminated immediately, excluding any
obligations the Company may have under Paragraph 10 below in any of the
following circumstances:

            (a) Disability or Incapacity In the event of Employee's physical or
mental inability to perform his essential duties hereunder, with or without
reasonable accommodation, for a period of 13 consecutive weeks or for a
cumulative period of 26 weeks during the term of this Agreement.

            (b) Death of Employee In the event of Employee's death.

            (c) Resignation for Good Reason Employee may resign for "Good
Reason," defined below, upon 30 days' written notice by Employee to the Company
except as set forth in paragraph 10(d) below. The Company may waive Employee's
obligation to work during this 30 day notice period and terminate his employment
immediately, but if the Company takes this action in the absence of agreement by
Employee, Employee shall receive the salary which otherwise would be due through
the end of the notice period. For purposes of this Agreement, "Good Reason"
shall mean any of the following violations of this Agreement by the Company:
causing Employee to cease to be Vice Chairman and Chief Merchandising Officer
with

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commensurate duties and responsibilities without Employee's consent; any
reduction in the Employee's base salary; any reduction in the Employee's
potential bonus eligibility amount; and any substantial breach of any material
provision of this Agreement. Notwithstanding the foregoing, the acts or
omissions described above shall not constitute "Good Reason" unless the Employee
provides the Company with written notice detailing the matters he asserts to be
"Good Reason" which the Company does not cure within thirty (30) days of
receiving the notice.

            (d) Change in Control In the event of a Change of Control, the
Employee shall be prohibited from resigning for Good Reason for a period of
three months following the Change of Control. For purposes of this Agreement, a
Change of Control shall be deemed to occur if:

                  (i) any "person," as such term is defined under Sections
3(a)(9) and 13(d) of the Exchange Act, who is not an Affiliate of Company on the
date hereof, becomes a "beneficial owner," as such term is used in Rule 13d-3
under the Exchange Act, of a majority of the Company's Voting Stock;

                  (ii) the Company adopts any plan of liquidation providing for
the distribution of all or substantially all of its assets;

                  (iii) the Company is party to a merger, consolidation, other
form of business combination or a sale of all or substantially all of its
assets, unless the business of Company is continued following any such
transaction by a resulting entity (which may be, but need not be, Company) and
the shareholders of Company immediately prior to such transaction (the "Prior
Shareholders") hold, directly or indirectly, a majority of the voting power of
the resulting entity; or

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                  (iv) if any shareholder owns stock possessing a greater voting
power than held by M. Thomas Grumbacher and his family, or if M. Thomas
Grumbacher and his family control less than 20% of the Voting Stock.

            (e) Discharge for Cause Company may discharge Employee at any time
for "Cause," which shall be limited to: willful and proven violation of
reasonable directives from either the Board or CEO or of standards of conduct
established by law; fraud, willful misconduct, misappropriation of funds or
other dishonesty; conviction of a crime of moral turpitude; any
misrepresentation made in this Agreement; or any material breach of any
provision of this Agreement (including, without limitation, acceptance of
employment with another company or performing work or providing advice to
another company, as an employee, consultant or in any other similar capacity
while still an Employee of the Company).

            (f) Discharge without Cause Notwithstanding any other provision of
this Agreement, Employee's employment and any and all of the Company's
obligations under this Agreement (excluding any obligations the Company may have
under Paragraph 10 below) may be terminated by the Company at any time without
Cause.

      10. Payments Upon Termination

            (a) Discharge Without Cause or Resignation for Good Reason. If
Employee is discharged without Cause or resigns for Good Reason, other than
following a Change in Control, Employee shall receive his base salary (paid in
monthly installments) for twelve (12) months plus continuation of the Company
contribution towards his Company group medical benefits (but not the allowances
referred to in paragraph 5 of this Agreement) for up to twelve (12) months or
until Employee becomes eligible for comparable benefits at a new employer. In

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addition, if Employee resigns for Good Reason after having completed at least
three (3) months of employment in the Company's fiscal year, Employee shall be
entitled to a pro-rata bonus for that year (based on the number of days employed
in the fiscal year) based on the Company's full year performance. The bonus, if
any, will be paid as soon as practicable after the end of the fiscal year in
which the termination occurs. The Employee's right to any payments or benefits
under this paragraph shall be contingent upon (i) execution by the Employee at
or about the time of termination of his employment of a general release of
claims (including without limitation contractual, common law and statutory
claims) in a form satisfactory to the Company in favor of the Company and its
officers, directors, executives and agents substantially; and (ii) compliance by
the Employee with all of the terms of this Agreement including without
limitation paragraphs 11 and 12 hereof.

            (b) Death or Disability/Incapacity

                  (i) On death, Employee's estate's sole entitlement will be to
base salary for any days worked prior to his death, amounts payable on account
of Employee's death under any insurance or benefit plans or policies maintained
by the Company, and any vested benefits to which Employee is entitled under the
Company's stock option and employee benefit plans in accordance with, to the
extent provided in, and subject to the restrictions and payout schedules
contained in those plans.

                  (ii) On termination for disability or incapacity, Employee's
sole entitlement will be to base salary for any days worked prior to the date of
termination, amounts payable on account of disability or incapacity under any
insurance or benefit plans or policies maintained and any vested benefits to
which Employee is entitled under the Company's stock

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option and employee benefit plans in accordance with, to the extent provided in,
and subject to the restrictions and payout schedules contained in those plans.

            (c) Discharge for Cause If Employee is discharged for Cause or
resigns without Good Reason, Employee's sole entitlement will be the receipt of
base salary for any days worked through the date of termination and any vested
benefits to which Employee is entitled under the Company's stock option and
employee benefit plans in accordance with, to the extent provided in, and
subject to the restrictions and payout schedules contained in those plans.

            (d) Change in Control

                  (i) Notwithstanding the foregoing, upon a Change in Control as
defined in Paragraph 9(d) while Employee is employed pursuant to this Agreement
Employee's Options and Restricted Shares shall immediately vest. In addition, if
either (x) the Employee's employment ceases for any reason after the expiration
of three months following the Change in Control; or (y) during the three months
immediately following the Change in Control he is terminated other than for
Cause, Employee shall receive a "Change of Control Payment" equal to the lesser
of 2.99 time his base salary (at the salary level immediately preceding the
Change in Control) or, if applicable, the "280G Permitted Payment" (as defined
below).

                  (ii) Notwithstanding any other provision of this Agreement, if
the aggregate present value of the "parachute payments" to the Employee,
determined under Section 280G(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), would be at least three times the "base amount" determined
under Code Section 280G, then the "280G Permitted Payment" shall be the maximum
amount that may be paid as a Change of Control Payment under this Section 10(d)
such that the aggregate present value of such "parachute payments" to the

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Employee is less than three times his "base amount." In addition, in the event
the aggregate present value of the parachute payments to the Employee would be
at least three times his base amount even after a reduction of the Change of
Control Payment to $0 (all as determined for purposes of Code Section 280G),
compensation otherwise payable under this Agreement and any other amount payable
hereunder or any other severance plan, program, policy or obligation of the
Company or any other affiliate thereof shall be reduced so that the aggregate
present value of such parachute payments to the Employee, as determined under
Code Section 280G(b) is less than three times his base amount. Any decisions
regarding the requirement or implementation of such reductions shall be made by
such tax counsel as may be selected by the Company and acceptable to the
Employee.

      11. Company Property All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, customer sales analyses, invoices, price lists or
information or any other materials or data of any kind furnished to Employee by
the Company or developed by Employee on behalf of the Company or at the
Company's direction or for the Company's use or otherwise in connection with
Employee's employment with the Company, are and shall remain the sole and
confidential property of the Company.

      12. Non-Competition and Confidentiality To the maximum extent permissible
by law:

            (a) During his employment with the Company and for a period of one
year after the termination of his employment with the Company for any reason
whatsoever, whether by Employee or by the Company and whether during the term of
this Agreement or subsequent to the expiration of this Agreement, Employee shall
not, directly or indirectly:

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                  (i) Induce or intentionally influence any customer, employee,
consultant, independent contractor or supplier of the Company to change its
business relationship with or terminate employment with the Company.

                  (ii) After the cessation of his employment, engage in (as a
principal, partner, director, officer, agent, employee, consultant, owner,
independent contractor or otherwise) or be financially interested in the retail
department store business of Boscov's (or any successor or purchaser of Boscov's
retail department store business) or any department store business which
competes with stores of the Company which in the aggregate contribute to at
least 50% of the volume of the Company as of the date of Employee's termination
of employment.

            (b) During his employment with the Company and at all times
thereafter, and except as required by law, Employee shall not use for his
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 which Employee acquires in
the course of his employment, which is not otherwise lawfully known by and
readily available to the general public. This confidential information includes,
but is not limited to: any material referred to in Paragraph 11 or any
non-public 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. Employee confirms that such information is confidential and
constitutes the exclusive property of the Company, and agrees that, immediately
upon his termination, whether by Employee or by the Company and whether during
the term of this Agreement or

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<PAGE>

subsequent to the expiration of this Agreement, Employee shall deliver to
Company all correspondence, documents, books, records, lists, computer programs
and other writings relating to Company's business; and Employee shall retain no
copies, regardless of where or by whom said writings were kept or prepared.

            (c) Both during his employment with the Company and following his
termination for any reason, whether by Employee or by the Company and whether
during the term of this Agreement or following the expiration of the Agreement,
Employee shall, upon reasonable notice, furnish to the Company such information
pertaining to his employment with the Company as may be in his possession. The
Company shall reimburse Employee for all reasonable expenses incurred by him in
fulfilling his obligation under this subparagraph (c).

            (d) The provisions of subparagraphs (a), (b) and (c) shall survive
the cessation of Employee's employment for any reason, as well as the expiration
of this Agreement at the end of its term or at any time prior thereto.

            (e) Employee acknowledges that the restrictions contained in this
Paragraph 11, in view of the nature of the business in which the Company is
engaged and the Employee'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. Employee therefore agrees that, in the event of his violation of any of
those restrictions, the Company shall be entitled to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief against
Employee, in addition to damages from Employee and an equitable accounting of
all commissions, earnings, profits and other benefits

                                      -13-
<PAGE>

arising from such violation, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be entitled.

            (f) Employee 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, Employee 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 Employee violates any of the restrictions
contained in subparagraph (a), the period of such violation (from the
commencement of any such violation until such time as such violation shall be
cured by Employee to the satisfaction of the Company) shall not count toward or
be included in the one year (or such longer period as may be prescribed by such
section) restrictive period contained in subparagraph (a).

            (g) Employee represents and warrants that the knowledge, skill and
abilities he possesses at the time of his execution of this Agreement are
sufficient to permit him to earn a living by working for a non-competitor of the
Company for the restrictive period set forth in subparagraph (a) above.

            (h) For purposes of Paragraphs 11 and 12 of this Agreement, the term
"Company" shall include not only The Bon-Ton Stores, Inc., but also any of its
successors,

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assigns, subsidiaries or affiliates. Employee consents to the Assignment of this
Agreement to any purchaser of the Company or its assets.

      13. Taxes Employee agrees that he is responsible for paying any and all
federal, state and local income taxes assessed with respect to any money,
benefits or other consideration received from the Company and that the Company
is entitled to withhold any tax payments from amounts otherwise due Employee to
the extent required by applicable statutes, rulings or regulations.

      14. Prior Agreements

            (a) Employee represents that there are no restrictions, agreements
or understandings whatsoever to which Employee is a party which could impact
upon his employment under the Agreement or would prevent or make unlawful his
execution of this Agreement or his employment hereunder.

            (b) Employee agrees that he will not use or disclose any
confidential or proprietary information of any of his prior employers during the
course of his employment under this Agreement.

      15. Entire Understanding This Agreement contains the entire understanding
between the Company and Employee 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
Employee 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.

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      16. Modifications This Agreement may not be modified orally but only by
written agreement signed by Employee and the Company's Chief Executive Officer
or such other person as the Board may designate specifically for this purpose.

      17. Provisions Separable The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

      18. Consolidation, Merger or Sale of Assets Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another entity which
assumes this Agreement and all obligations and undertakings of the Company
hereunder. Under such a consolidation, merger or transfer of assets and
assumption, the term "the Company" as used herein, shall mean such other entity
and this Agreement shall continue in full force and effect.

      19. Notices All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered (personally, by
courier service such as Federal Express, or by messenger) or when deposited in
the United States mails, registered or certified mail, postage pre-paid, return
receipt requested, addressed as set forth below:

            (a)   If to the Company:

                  The Bon-Ton Stores, Inc.
                  2801 East Market Street
                  York, PA 17402
                  Attention: Chief Executive Officer

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<PAGE>

                  with a copy to:

                  Henry F. Miller, Esquire
                  Wolf, Block, Schorr and Solis-Cohen LLP
                  1650 Arch Street
                  22nd Floor
                  Philadelphia, PA 19103-2097

            (b)   If to Employee:

                  David Zant
                  8934 Challis Hill Lane
                  Charlotte, NC 28226

                  with a copy to:

                  William J. Keating, Jr., Esquire
                  Keating, Muething & Klekamp, P.L.L.
                  1400 Provident Tower
                  One East Fourth Street
                  Cincinnati, OH 45202

      In addition, notice by mail shall be by air mail if posted outside of the
continental United States. Any party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this paragraph for the giving of
notice.

      20. No Attachment Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

      21. Binding Agreement This Agreement shall be binding upon, and shall
inure to the benefit of the Company and its successors, representatives, and
assigns and shall be binding upon Employee, his heirs, executors and legal
representatives.

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<PAGE>

      22. No Assignment by Employee Employee acknowledges that the services to
be rendered by him are unique and personal. Accordingly, Employee may not assign
or delegate any of his rights or obligations hereunder, except that he may
assign certain rights hereunder if agreed to in writing by the Chief Executive
Officer.

      23. Indulgences Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

      24. 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.

      25. Controlling Law This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such state or any other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.

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<PAGE>

      26. Chief Employee Officer In the absence of the Chief Executive Officer,
the decisions of the Chief Executive Officer may be made by such other person as
designated by the Board.

      27. 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. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties hereto.

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

                                              THE BON-TON STORES, INC.

                                              By: /s/ Byron Bergren
                                                      Byron Bergren
                                                      Chief Executive Officer

                                                      EMPLOYEE

                                                  /s/ David Zant
                                                      David Zant

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EXHIBIT A - TERMS OF PARTICIPATION IN THE SERP

Amount of Supplemental Benefit Payable to Employee under SERP:

      Employee shall be entitled to a benefit under the SERP equal to $50,000
annually, payable at the time and in the manner provided for under the SERP.

Vesting:

      Employee shall become vested in his SERP benefit if he remains
continuously employed with the Company through the date that he attains sixty
(60) years of age.

Significance of Terms Set Forth Herein:

      The terms of Employee's participation in the SERP, as set forth in this
Exhibit A, are intended to establish the amount of the SERP annual benefit
payment and the conditions for vesting. All terms and provisions of the SERP, as
that may be amended from time to time, shall be applicable, which provisions may
include, without limitation, provisions intended to ensure that the SERP
complies with applicable provisions of Section 409A of the Code (relating to the
inclusion in gross income of deferred compensation under nonqualified deferred
compensation plans).

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