Document:

exv4w1

 

			
	COMMON STOCK
	 	COMMON STOCK

	 	 	 
	     LSO	 	 
	 
	INCORPORATED UNDER THE LAWS

   OF THE STATE OF WASHINGTON
	 	SEE REVERSE FOR CERTAIN

DEFINITIONS AND RESTRICTIONS

CUSIP 53223M 10 1
	 
	This Certifies that	 	 

      

 

is the record holder of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $0.001 PAR VALUE PER SHARE OF

transferable on the books of the Corporation by the holder hereof, in
person or by a duly authorized attorney, upon surrender of this Certificate
properly endorsed. This certificate is not valid until countersigned
by the Transfer Agent and Registrar.

     WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.

Dated:exv10w1

 

EXHIBIT 10.1

THE BON-TON STORES, INC.

SEVERANCE PAY PLAN

			
	I.	 	BACKGROUND

     The purpose of The Bon-Ton Stores, Inc. Severance Pay Plan is to provide guidelines pursuant
to which the Company, in its sole discretion, may make severance payments to Associates who meet
the eligibility requirements described below and who are permanently terminated from their
employment with the Company under circumstances entitling such associates to benefits hereunder, as
determined by the Plan Administrator. The Plan is intended to formalize and replace the Company’s
existing severance pay program and is not intended to provide additional benefits in excess of that
program. In the event any Associate is entitled to benefits under the Plan and to any other
severance pay or similar benefits under any other circumstances, plan, arrangement or agreement,
benefits otherwise payable under the Plan are reduced by the amount of the benefits payable to the
Associate pursuant to such other circumstances, plan, arrangement or agreement.

			
	II.	 	DEFINITIONS

     A. “Active Associate” means any Associate who is not an Inactive Associate.

     B. “Associate” means any person performing services under the direction and control of the
Company who is either (i) currently in pay status, including, but not limited to, paid sick leave,
paid vacation, and paid administrative leave, or (ii) on an authorized unpaid leave from the
Company. The term Associate shall not include any individuals hired to perform services for the
Company as leased employees, agency contract personnel or independent contractors, and their
respective employees or agents, notwithstanding that such individuals may be subsequently be
re-classified by a court, government agency, tribunal or arbitrator as common law employees of the
Company.

     C. “Benefit Service” means the service performed by an Associate in a position classified on
the Company’s books and records as eligible for Company provided benefits.

     D. “Code” means the Internal Revenue Code of 1986.

     E. “Company” means The Bon-Ton Stores, Inc. and, as required by the context, and for purposes
of covering employees of affiliates of the Company, any other entity that employs employees and is
treated as a single employer along with The Bon-Ton Stores, Inc. pursuant to Section 414(b) of the
Code.

     F. The “Effective Date” of the Plan is September 1, 2006.

     G. “Eligible Associate” means:

          1. any Associate who is a Full-Time Associate or who is a Management Associate and who is
credited with at least three months of continuous Benefit Service, and

 

 

          2. any Associate who is a Regular Part-Time (B) and who is credited with at least 12 months of
continuous Benefit Service.

No other associate who is a Part-Time or Seasonal Associate shall be an Eligible Associate for
purposes of the Plan.

     H. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     I. “Full-Time Associate” means any Associate who is not a Part-Time or Seasonal Associate.

     J. “Inactive Associate” means any Associate who is currently absent from work and whose
absence is classified on the Company’s books and record as (i) leave of absence; (ii) long-term
disability; or (iii) workers’ compensation. For these purposes, an Associate may be determined to
be absent due to long-term disability whether or not such Associate has become eligible for
long-term disability benefits under a Company plan providing such benefits, as determined at the
discretion of the insurance provider. Notwithstanding the foregoing, at the discretion of the Plan
Administrator, an Associate who is absent from work on an authorized leave as to which the Company
has agreed to an anticipated end date following which such Associate is expected to return to work
may be treated for purposes of the Plan as being an Active, rather than as an Inactive, Associate.
In addition, any Associate who is absent on a leave that is determined to be covered by the Family
and Medical Leave Act shall be considered to be an Active, rather than an Inactive, Associate.

     K. “Management Associate” means an Associate who is classified on the Company’s books and
records as “management.”

     L. “Notice Pay” means pay which an Associate may receive, in the Company’s sole discretion, in
connection with a WARN Notice that is provided fewer than 60 calendar days prior to the Associate’s
Termination Date.

     M. “On-Call Associate” means an Associate who is classified on the Company’s books and records
as “on-call.”

     N. “Part-Time or Seasonal Associate” means any Associate who is classified on the Company’s
books and records as a Regular Part-Time (B) Associate, a Seasonal Associate (C, D and E), an
On-Call Associate, or is otherwise classified on such books and records as part-time, seasonal or
other irregular employment status.

     O. “Plan” means the Bon-Ton Stores, Inc. Severance Pay Plan.

     P. “Plan Administrator” means the Company or such other person or committee as may be
appointed from time to time by the Company to supervise the administration of the Plan.

     Q. “Regular Full-Time Associate” means an Associate who is classified on the Company’s books
and records as “regular-full time”.

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     R. “Regular Part-Time (B) Associate” means an Associate who is classified on the Company’s
books and records as “Regular Part-Time (B) Associate.”

     S. “Seasonal Associate (C, D and E)” means an Associate who is classified on the Company’s
books and records as “Seasonal Associate (C, D and E)”.

     T. “Separation Pay” means benefit payments pursuant to the terms of the Plan.

     U. “Successor Entity” means an employer that acquires business operations or assets from the
Company that is not treated as the Company, as defined herein, and that employs former Associates
whose employment was in the business operations acquired by the Successor Entity. An entity may be
a Successor Entity without regard to the nature of the transaction by which such entity acquires
business operations or assets from the Company, and such transactions may include, but are not
limited to, a sale of a subsidiary, division or affiliate, a sale of assets, or a spin-off of an
entity.

     V. “Termination Date” means the date designated by the Company as the proposed date as of
which an Associate’s employment with the Company is to cease (which includes, but is not limited
to, such a date designated in a WARN Notice).

     W. “WARN Notice” means a notification intended to comply with the notice requirements of the
federal Worker Adjustment and Retraining Notification Act as well as any other similar state or
local law.

			
	III.	 	ELIGIBILITY

     A. An Eligible Associate who is not covered under a separate written severance agreement with
the Company or an employment agreement with the Company that provides for severance or similar
benefits shall be eligible to receive Separation Pay if and only if all of the following
requirements are met as determined in the sole discretion of the Plan Administrator:

          1. The Associate is involuntarily terminated by the Company for reasons unrelated to the
Associate’s performance and as a result of a reduction in force or reorganization;

          2. The Associate, following his or her termination of employment, is not reemployed by the
Company (which includes any affiliate of the Company) or by a Successor Entity;

          3. The Associate continues to work on his scheduled days through the Associate’s Termination
Date, unless an earlier date is otherwise agreed to by the Company; and

          4. The Associate signs (and does not revoke) a general release of claims (including, without
limitation, contractual, common law and statutory claims) against the Company and its officers,
directors, employees and agents in a form acceptable to the Plan Administrator.

     B. Inactive Associates are not eligible to participate in the Plan, except to the extent the
Plan Administrator expressly provides for participation in the Plan by Inactive Associates, in

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which case, at the Plan Administrator’s discretion, Inactive Associates may participate in the
Plan either in the same manner as Active Associates, or in such other manner as may be established
for these purposes by the Plan Administrator, and to the extent the Plan Administrator determines,
at its discretion, that such participation is appropriate under the facts and circumstances.

     C. Notwithstanding anything herein go the contrary, no Associates whose terms and conditions
of employment are determined by a collective bargaining agreement between employee representatives
and the Company shall be eligible to participate in the Plan unless such collective bargaining
agreement provides to the contrary, in which case such Associates shall be eligible to participate
upon compliance with such provisions for eligibility and participation as such agreement shall
provide; and provided, further, that in the event any Associate or group of Associates becomes part
of a bargaining unit represented by a union, no such Associates shall become ineligible during the
period between the commencement of such representation and the execution of the first collective
bargaining agreement which covers such Associates.

			
	IV.	 	SEVERANCE BENEFIT AMOUNT

     A. Separation Pay. Each Associate who is, subject to all other applicable provisions of the
Plan, entitled to Separation Pay shall be entitled to an amount of Separation Pay based on the
provisions of the Schedule of Benefits attached hereto as Appendix A, with adjustments as set forth
in Section IV, B below.

     B. Calculation of Pay. For purposes of calculating the Separation Pay pursuant to Section IV,
A above and Appendix A:

          1. Pay shall be based on an Associate’s regular schedule (excluding overtime) as in effect on
the date that the separation is announced and taking into account the Associate’s base pay as in
effect as of such date. All references in Appendix A to the term “pay” shall be to the Associate’s
base rate of pay, calculated using hourly or other applicable rates of pay to determine pay on
either a daily or weekly basis as required for purposes of Appendix A.

          2. Separation Pay for Associates shall be offset by the gross amount of pay received, if any,
by the Associate pursuant to the terms of The Bon-Ton Stores, Inc. Change of Control and Material
Transaction Severance Plan for Certain Employees of Acquired Employers or any other benefits in
the nature of severance paid by the Company to the Associate, whether such payments are made
pursuant to a plan, program, arrangement, agreement or other circumstances.

          3. Excess Payments. In the event the Company pays an Associate Separation Pay in excess of
that to which the Associate is entitled under the Plan, regardless of the reason, the Company will
either (a) require the Associate to reimburse the Company for the excess payments; or (b) if
additional Separation Pay is still owed, offset the additional Separation Pay by the amount of the
excess payments.

          4. WARN Act Offset. In the event an Associate receives Notice Pay, and such Associate is
otherwise eligible for Separation Pay hereunder, the amount of Separation Pay provided hereunder
shall be offset by the amount of any Notice Pay paid to such Associate.

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Notice Pay is not provided pursuant to the Plan but may be provided by the Company independent
of the Plan, as determined by the Company in its sole discretion.

          5. The Company may deduct and withhold from Separation Pay all amounts required to be deducted
or withheld by law.

     C. Additional Separation Pay. At the discretion of the Plan Administrator, any
Associate who is entitled to Separation Pay hereunder may also be provided with additional
Separation Pay, subject to such terms and conditions as maybe established in connection with such
additional Separation Pay by the Plan Administrator, at its discretion.

			
	V.	 	ACQUISITIONS

     A. If the Company acquires another company and employees of the acquired company are separated
in connection with the acquisition process, the Company is under no obligation to apply this Plan
to such separated employees, but reserves the right, entirely at the Company’s discretion, to apply
this Plan if such an application is deemed appropriate under the circumstances, or, in the
alternative, to apply any separation pay program of the acquired company, to create a special plan,
program or arrangement specifically applicable to such an acquisition, or to provide no separation
pay benefits to any such separated employees.

     B. Employees of an acquired company who voluntarily accept and begin employment with the
Company will generally be eligible to participate in the Plan on the same terms as other
Associates, and will not be eligible for any special separation pay benefits that may be provided
to employees of the acquired company whose employment is terminated in connection with the
acquisition. If any Associate is eligible for Separation Pay pursuant to the Plan, and also
pursuant to any other plan, program, arrangement or other circumstances that may apply in
connection with an acquisition, any amounts payable hereunder shall be reduced by the benefits
payable under such other plan, program or arrangement.

			
	VI.	 	REHIRE

     A. If a separated Associate is rehired by the Company (including any affiliate of the Company)
before the end of the period of days or weeks which is equivalent to the Associate’s Separation Pay
Benefit (as set forth in Appendix A based on the Associate’s Associate Classification and Length of
Service), the Associate must repay the portion of such Separation Pay that corresponds to the
period of days or weeks after such Associate’s rehire date. For example, assume a Management
Associate who has attained 50 years old and is credited with ten years of service is separated from
employment with the Company under circumstances that entitle such Associate to Separation Pay.
Assume further that the Associate is paid Separation Pay in a lump sum corresponding to 15 weeks of
pay. If this Associate is rehired by the Company after ten weeks, the Associate would be required
to repay to the Company one-third of the Separation Pay received (representing the five weeks of
the 15 week period after the Associate’s rehire date).

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	VII.	 	DISTRIBUTION OF BENEFITS

     A. The Company will pay each Associate’s Separation Pay out of the general assets of the
Company either in a lump sum or as a series of payments on the same cycle as the Company paid its
Associates immediately prior to the Associate’s Terminate Date until all appropriate payments are
made, as approved or denied at the sole discretion of the Company.

     B. In the event it is determined that any payment of Separation Pay should be considered a
payment pursuant to a nonqualified deferred compensation plan subject to Section 409A of the Code,
such payment shall be made on, or as soon as practicable following, the first date as of which such
payment may be made after termination of employment without violating any of the applicable
requirements of Code Section 409A, and shall be paid out in the form of a single lump sum payment.
It is understood that, to the extent Code Section 409A is applicable to payments of Separation Pay,
these rules may require that payment be delayed until at least six months after the Associate’s
termination of employment with the Company.

     C. Separation Pay shall be paid to the estate of any Associate who dies before the entire
amount of Separation Pay due hereunder is paid.

			
	VIII.	 	PLAN ADMINISTRATION

     A. The Plan shall be administered by the Plan Administrator, who shall have complete authority
to prescribe, amend and rescind rules and regulations relating to the Plan. The Plan Administrator
may allocate and assign any of his responsibilities and duties for the operation and administration
of the Plan to such other persons as may be determined at the discretion of the Plan Administrator.

     B. The determinations by the Plan Administrator on all matters arising under the terms of the
Plan shall be conclusive. The Plan Administrator shall have full discretionary authority, the
maximum discretion allowed by law, to administer, interpret and apply the terms of this Plan, and
determine any and all questions or disputes hereunder, including but not limited to eligibility for
benefits and the amount of benefits due.

     C. Notwithstanding any other provision in the Plan to the contrary, and to the full extent
permitted by law, the Plan Administrator shall have the exclusive authority and discretion to
construe any uncertain or disputed term or provision in the Plan and to make factual findings.
This discretionary authority includes, but is not limited to: (i) determining whether any
individual is eligible for benefits under this Plan; (ii) interpreting all of the provisions of
this Plan; and (iii) interpreting all of the terms used in this Plan.

     D. The Plan Administrator’s exercise of this discretionary authority shall (i) be binding upon
all interested parties, including, but not limited to, the Associate, the Associate’s estate, any
beneficiary of the Associate and the Company; (ii) be entitled to deference upon review by any
court, agency or other entity empowered to review the Plan Administrator’s decisions, to the
fullest extent permitted by law; and (iii) not be overturned or set aside on such review, unless
found to be arbitrary, capricious and without rational basis, or made in bad faith.

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     E. Each Associate whose employment terminates for any reason and who believes he or she is
entitled to Separation Pay (or the Associate’s legally authorized representative) may apply to the
Plan Administrator in writing at the following address:

The Bon-Ton Stores, Inc.

2801 E. Market Street

York, PA 17402

Attn: Human Resources Department

The Plan Administrator shall ensure that all claim determinations are made in accordance with the
terms of the Plan document, and, where appropriate, that Plan provisions are applied consistently
with respect to similarly situated Associates.

          1. In the event that any claim, made writing as indicated above, for a severance benefit is
denied in whole or in part by the Plan Administrator, the Associate whose claim has been so denied
shall be notified of such denial in writing by the Plan Administrator within 90 days from the date
the written application is received by the Plan Administrator. If, however, special circumstances
require additional time for processing of the claim, the Plan Administrator will provide the
Associate with written notice of the need for additional time prior to the expiration of the
initial 90-day period. The notice of the need for additional time shall indicate the special
circumstances requiring the extension of time and the date by which the Plan Administrator expects
to render the final decision. In no event shall a decision regarding a claim be rendered later
than 180 days after the Plan Administrator receives the Associate’s claim.

          2. A notice advising an Associate of the denial of a claim shall (i) specify the reason or
reasons for denial, (ii) make specific reference to pertinent plan provisions, (iii) describe any
additional material or information necessary for the claimant to perfect the claim (explaining why
such material or information is needed), (iv) advise the Associate of the procedure for the appeal
of the denial, and (v) include a statement of the Associate’s right to bring a civil action under
502(a) of ERISA following an adverse benefit determination on appeal.

          3. All appeals shall be made by the following procedures:

               a. The Associate whose claim has been denied (or the Associate’s legally authorized
representative) shall send to the Plan Administrator a written notice of desire to appeal the
denial. Such notice shall be filed within sixty (60) days of notification of the claim denial,
shall set forth all of the facts upon which the appeal is based. Appeals not timely filed shall be
barred. The Associate may request in writing to review any documents pertinent to his claim.

               b. The Plan Administrator shall have full discretion to establish a hearing date on which the
Associate may make an oral presentation in support of the Associate’s appeal. If no hearing is
provided by the Plan Administrator, the Associate shall have an opportunity to submit in writing to
the Plan Administrator any issues or comments relating to such Associate’s claim. Regardless of
whether a hearing is provided by the Plan Administrator, the Associate will have the opportunity to
submit written documents, records, and other information relating to the claim. The Associate
shall be provided, upon request and free of

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charge, reasonable access to, and copies of, all documents, records and other information
relevant to the Associate’s claim. Any facts, issues or theories that are not so raised by the
Associate shall be deemed waived for all purposes and all subsequent proceedings.

               c. The Plan Administrator shall consider the merits of: (i) the Associate’s written and oral
presentations, (ii) the merits of any facts or evidence in support of the denial of benefits, (iii)
any and all comments, documents, records, and other information relating to the claim submitted by
the Associate, (iv) and such other facts and circumstances as the Plan Administrator shall deem
relevant. The Plan Administrator shall render a determination upon the appeal within 60 days from
the date of the notice of desire to appeal is received by the Plan Administrator. If, however,
special circumstances (including, but not limited to, the establishment of a hearing date) require
an extension of time for processing the appeal, the Plan Administrator will provide the claimant
with written notice of the need for additional time prior to the expiration of the initial 60-day
period. The notice shall indicate the special circumstances requiring the extension of time and
the date by which the Plan Administrator expects to render the decision on appeal. In no event
shall a decision regarding an appeal be rendered later than 120 days after the Plan Administrator
receives the Associate’s notice of desire to appeal. If the appeal is denied, the determination
shall be accompanied by a written statement reasonably calculated to be understood by the
Associate, which: (i) specifies the reason or reasons for denial, (ii) makes specific reference to
pertinent plan provisions, (iii) informs the Associate of his right to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and other information
relevant to the Associate’s claim for Severance Benefits, and (iv) contains a statement of the
Associate’s right to bring an action under Section 502(a) of ERISA.

			
	IX.	 	PLAN MODIFICATION OR TERMINATION

     A. The Plan may be modified, amended, or terminated at any time by the Company, with or
without notice. Any such modification, amendment or termination shall be effective as of such date
as the Company may determine.

     B. All claims for benefits hereunder, even if raised after the termination of the Plan, shall
be determined pursuant to Section VIII, and when acting pursuant thereto, the Plan Administrator
shall retain the authority provided in Section VIII. Notwithstanding any termination of the Plan,
all Associates who are eligible before such date of termination to receive Separation Pay pursuant
to this Plan shall remain entitled to receive said benefit under the terms and conditions of this
Plan.

			
	X.	 	GENERAL PROVISIONS

     A. Nothing herein contained shall be deemed to give any Associate the right to be retained in
the employ of the Company or to interfere with the right of the Company to discharge him or her at
any time.

     B. Except as otherwise provided by law, no right or interest of any Associate under the Plan
shall be assignable or transferable, in whole or in part, either directly or by operation of law or
otherwise, including without limitation by execution, levy, garnishment, attachment,

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pledge or in any other manner, but excluding adjudication of incompetency; no attempted
assignment or transfer thereof shall be effective; and no right or interest of any Associate under
the Plan shall be liable for, or subject to, any obligation or liability of such Associate, except
to the extent specifically provided for herein.

     C. The Plan is unfunded. All benefits payable under the Plan shall be paid out of the general
assets of the Company.

     D. The Plan shall be governed by and construed in accordance with ERISA, and to the extent not
preempted, the laws of the Commonwealth of Pennsylvania.

     E. The Plan is intended to constitute a “welfare plan” under ERISA, and any ambiguities in the
Plan shall be construed to effect that intent.

     F. Whenever applicable the masculine gender, as used in the Plan, shall include the feminine
or neuter.

	 	 	 	 	 
	 	THE BON-TON STORES, INC.

	 	 
	 	BY	 
	 	 	 

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APPENDIX A

SCHEDULE OF BENEFITS

	 	 	 	 	 	 	 	 	 
	 	Associate Classification

	 	 	Length of Service
	 	 	Benefits	 
	 	Management Associate

	 	 	At least 3 months
but less than 1 year
of continuous
Benefit Service
	 	 	1/2 day of pay for
each complete 2
months of continuous
Benefit Service up
to a maximum of 2
and 1/2 days.	 
	 	Management Associate

	 	 	One or more years of
continuous Benefit
Service
	 	 	1 week of pay for
each year of
continuous Benefit
Service up to 26
weeks of pay. All
Management
Associates with one
or more years of
continuous Benefit
Service will receive
at least 4 weeks of
pay.	 
	 	Management Associate

	 	 	Age 50 or older with
at least 10 or more
years of continuous
Benefit Service
	 	 	1 and 1/2 weeks of pay
per completed year
of continuous
Benefit Service up
to 39 weeks of pay.	 
	 	Full-Time (A, F)
Associates (who are not
Management Associates)

	 	 	At least 3 months
but less than one
year of continuous
Benefit Service
	 	 	1/2 day for each
complete 2 months of
continuous Benefit
Service up to a
maximum of 2 and 1/2
days.	 
	 	Full-Time (A, F)
Associates (who are not
Management Associates)

	 	 	One or more years of
continuous Benefit
Service
	 	 	1/2 week of pay for
each complete year
of continuous
Benefit Service up
to a maximum of 13
weeks of pay.	 
	 	Regular Part-Time (B)
Associates (who are not
Management Associates)

	 	 	One or more years of
continuous Benefit
Service
	 	 	1/2 week of pay for
each complete year
of continuous
Benefit Service up
to a maximum of 4
weeks of pay.	 
	 

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