Document:

exv10w1

 

EXHIBIT 10.1

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

     This THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (“Third Amendment”), dated July 19, 2007, is by
and between THE BON-TON STORES, INC., a Pennsylvania corporation (the “Company”), and BYRON L.
BERGREN (“Employee”).

WITNESSETH:

     WHEREAS, the Company and Employee entered into an Agreement dated as of August 24, 2004
(“Agreement”) with respect to the employment of Employee as the President and Chief Executive
Officer of the Company;

     WHEREAS, the Company and Employee entered into an amendment to the Agreement as of May 1, 2005
(“First Amendment”) pursuant to which the annual Base Salary payable to Employee was increased;

     WHEREAS, the Company and Employee entered into a second amendment to the Agreement on May 23,
2006 (“Second Amendment”) pursuant to which several provisions of the Agreement were modified;

     WHEREAS, the Human Resources and Compensation Committee (“HRCC”) of the Company’s Board of
Directors (“Board”) has approved the cash bonus opportunities described below in this Third
Amendment for which Employee shall be eligible for Fiscal Year 2007 (defined below) and Fiscal Year
2008 (defined below) and the grants of restricted shares described below in this Third Amendment,
and the Board has approved this Third Amendment, which includes an extension of the Agreement
through the Term (defined below); and

     WHEREAS, capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Agreement (as previously amended by the First Amendment and the Second Amendment).

     NOW THEREFORE, 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. Amendment of Paragraph 1 of Agreement.

          (a) Paragraph 1 of the Agreement is amended to set forth the following agreement between the
Company and Employee:

               (i) Employee shall be the Company’s President and Chief Executive Officer through January 31,
2009.

               (ii) Thereafter, through February 5, 2010, Employee shall serve the Company in an important
role to be determined by the Board based upon its decision as to what is in the best interests of
the Company. Employee shall report to the Board through February 5, 2010, and the Board agrees to
nominate Employee to serve as a Director of the Board for the

1

 

period through February 5, 2010. For purposes hereof, an “important role” with respect to
Employee’s employment commencing February 1, 2009 shall mean a role, as determined by the Board,
consisting of Board-level activities, activities to facilitate the transition of the new Chief
Executive Officer and/or such other activities as would be consistent with Employee’s position at
such time as a Director and former Chief Executive Officer of the Company.

          (b) In all other respects, Paragraph 1 of the Agreement shall remain in effect.

     2. Term of Agreement; Renewal; Effective Date of this Third Amendment.

          (a) Amendment of Paragraph 2 of Agreement. The following shall be substituted for
Paragraph 2 of the Agreement:

“Term of Agreement. This Agreement, and Employee’s
relationship hereunder, shall commence as of the date this Agreement
has been executed by both parties (the “Effective Date”), and shall
continue through and terminate on February 5, 2010 (the “Term”),
unless sooner terminated in accordance with Paragraph 12 below.”

          (b) Effective Date of this Third Amendment. This Third Amendment shall be effective
upon execution by Employee and the Company (“Effective Date of this Third Amendment”) except as
otherwise provided in paragraph 7(b) of this Third Amendment.

     3. Place of Performance. Amendment of Paragraph 3 of Agreement. Paragraph 3
of the Agreement is amended to set forth the following agreement between the Company and Employee:

          (a) Employee shall be based at the Company’s executive offices in York, Pennsylvania, except
for travel required for Company business, provided that Employee, at his option, may elect to
relocate his primary office to the Company’s executive offices in Milwaukee, Wisconsin and his
primary residence to the Milwaukee, Wisconsin metropolitan area.

          (b) In the event that Employee elects to relocate his primary office and primary residence to
Milwaukee, Wisconsin, Employee shall be reimbursed for relocation expenses in accordance with the
Company’s relocation policy applicable to Company senior executives and, at the time of the
relocation of his primary residence to the Milwaukee metropolitan area, Employee shall receive, in
addition, a payment in the amount of one hundred thousand dollars ($100,000), less applicable taxes
and normal deductions, to assist in such relocation.

          (c) In all other respects, Paragraph 3 of the Agreement shall remain in effect.

 

 

     4. Salary. Amendment of Paragraph 4(a) of the Agreement.

          (a) It is agreed that Employee’s Base Salary at the annual rate of One Million Dollars
($1,000,000), which became effective on May 1, 2006, shall remain in effect through February 5,
2010.

          (b) Employee shall receive a bonus of One Hundred Fifty Thousand Dollars ($150,000), less
taxes and normal deductions, as soon as practicable after the Effective Date of this Third
Amendment, but in no event later than ten (10) business days following the Effective Date of this
Third Amendment.

          (c) In all other respects, Paragraph 4(a) of the Agreement shall remain in effect.

     5. Bonus. Amendment of Paragraph 4(b) of the Agreement. Paragraph 4(b) of
the Agreement is further amended to set forth the following agreement between the Company and
Employee:

          (a) Fiscal Year 2007. For the fiscal year of the Company beginning February 4, 2007
(“Fiscal Year 2007”):

               (i) Employee shall be eligible for a bonus pursuant to the terms and conditions previously
established by the HRCC under The Bon-Ton Stores, Inc. Cash Bonus Plan (“Cash Bonus Plan”) with the
following parameters: a threshold bonus of one hundred twelve and one half percent (112.5%) of
Employee’s Base Salary effective May 1, 2006; a target bonus of one hundred fifty percent (150%) of
Employee’s Base Salary effective May 1, 2006; and a maximum bonus of two hundred percent (200%) of
Employee’s Base Salary effective May 1, 2006. If earned, one bonus will be paid depending upon the
level of achievement as specified in subparagraphs (ii) through (v) below.

               (ii) This bonus shall be based on attainment of specified levels of achievement with respect
to two performance measures. The achievement by the Company of a level of Net Income as determined
in accordance with the Company’s normal accounting practices, consistent with past practices (“Net
Income”) shall account for eighty percent (80%) of the potential bonus payout, and the achievement
of the Total Company Sales Plan as determined in accordance with the Company’s normal accounting
practices, consistent with past practices (“Total Company Sales Plan”) shall account for twenty
(20%) of the potential bonus payout. Employee’s bonus for Fiscal Year 2007 shall be calculated in
a manner consistent with the Company’s past practices and consistent with the bonus determinations
for Fiscal Year 2007 for the other senior executives of the Company under the Cash Bonus Plan.

               (iii) The amount payable to Employee at the various levels of achievement is set out on a
table entitled CEO 2007 Bonus Metrics (“CEO 2007 Bonus Metrics Table”), approved by the HRCC at its
meeting on March 26, 2007, and delivered to Employee.

               (iv) A bonus as specified in the CEO 2007 Bonus Metrics Table between the levels of the
threshold bonus and target bonus, or between the levels of the target

 

 

bonus and the maximum bonus, as applicable, shall be paid for achievement of the performance
measures specified in the CEO 2007 Bonus Metrics Table, subject to the following.

                    (A) Failure to achieve Net Income at the level required for the threshold bonus as specified
on the CEO 2007 Bonus Metrics Table shall result in no payment of any portion of the 2007 bonus.

                    (B) Failure to achieve the Total Company Sales Plan at the level required for the threshold
bonus as specified on the CEO 2007 Bonus Metrics Table shall result in no payment of the Total
Company Sales Plan portion of the 2007 bonus, but the portion of the bonus based upon Net Income
nevertheless shall be payable provided the Net Income required for that threshold bonus is
achieved.

               (v) The bonus shall be determined and awarded in accordance with objectives previously
determined by the HRCC consistent with the Cash Bonus Plan as amended and restated.

          (b) Fiscal Year 2008. For the fiscal year of the Company beginning February 3, 2008
(“Fiscal Year 2008”):

               (i) Employee shall be eligible for a bonus under the Cash Bonus Plan with the following
parameters: a threshold bonus of seventy-five percent (75%) of Employee’s Base Salary effective
May 1, 2006; a target bonus of one hundred percent (100%) of Employee’s Base Salary effective May
1, 2006; and a maximum bonus of one hundred fifty percent (150%) of Employee’s Base Salary
effective May 1, 2006. If earned, one bonus will be paid depending upon the level of achievement.

               (ii) The bonus shall be determined and awarded in accordance with objectives to be determined
by the HRCC consistent with the Cash Bonus Plan and communicated to Employee.

          (c) Fiscal Year 2009. Employee shall not be eligible to participate in the Cash Bonus
Plan for the Company’s fiscal year beginning February 1, 2009 (“Fiscal Year 2009”) unless otherwise
determined by the HRCC.

          (d) In all other respects, Paragraph 4(b) of the Agreement shall remain in effect.

     6. Long Term Incentive Program. Amendment of Paragraph 6 of the Agreement.
Paragraph 6 of the Agreement is further amended to set forth the following agreement between the
Company and Employee:

 

 

          (a) Fiscal Year 2007 Restricted Share Grants.

               (i) Time-Based Restricted Share Grant.

                    (A) As soon as practicable after the effective date of this Third Amendment, Employee shall
receive under The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive and
Performance-Based Award Plan (“Stock Incentive Plan”) an additional grant of Restricted Shares with
a value of One Million Three Hundred Fifty Thousand Dollars ($1,350,000) determined as of the effective date
of this Third Amendment.

                    (B) Employee’s ownership of these Restricted Shares shall vest as follows: fifteen percent
(15%) of the shares on February 2, 2008 provided that Employee is continuously employed by the
Company through that date; an additional thirty-five percent (35%) of the shares on January 31,
2009 provided that Employee is continuously employed by the Company through that date; and the
remaining fifty percent (50%) on February 5, 2010 provided that Employee is continuously employed
by the Company through that date. Notwithstanding the foregoing, these Restricted Shares shall
vest immediately upon Employee’s discharge without Cause as defined in Paragraph 12(e) of the
Agreement or resignation for Good Reason as defined in Paragraph 12(c) of the Agreement as amended
by Paragraph 7 of this Third Amendment, provided Employee executes a general release of claims
consistent with Paragraph 13(b) of the Agreement.

                    (C) If the Board declares any dividends in respect of the common stock, par value $0.01 per
share, of the Company, then such dividends shall be paid on these time-based Restricted Shares,
provided that the Restricted Shares have not been forfeited as of the record date for the
applicable dividend distribution.

                    (D) The material terms of this grant of Restricted Shares are set forth in Exhibit A to this
Third Amendment.

               (ii) Performance-Based Restricted Share Grant.

                    (A) As soon as practicable after the Effective Date of this Third Amendment, Employee shall
receive under the Stock Incentive Plan an additional grant of Restricted Shares with a value of One
Million Three Hundred Fifty Thousand Dollars ($1,350,000) determined as of the Effective Date of
this Third Amendment as previously approved by the HRCC.

                    (B) One-half of these Restricted Shares (with a value of Six Hundred Seventy-Five Thousand
Dollars ($675,000)) (“2007 Grant of Restricted Shares Based Upon Company Performance for Fiscal
Year 2007”) shall become vested based upon achievement of the performance goals set by the HRCC for
Fiscal Year 2007, and the other one-half of these Restricted Shares (with a value of Six Hundred
Seventy-Five Thousand Dollars ($675,000)) (“2007 Grant of Restricted Shares Based Upon Company
Performance for Fiscal Year 2008”) shall become vested based upon the achievement of the
performance goals to be set by the HRCC for Fiscal Year 2008.

 

 

                    (C) With respect to the 2007 Grant of Restricted Shares Based Upon Company Performance for
Fiscal Year 2007, as previously established by the HRCC:

                         I. One hundred percent (100%) shall become fully vested in the event that the Company achieves
the Net Income required for the target bonus as specified on the CEO 2007 Bonus Metrics Table (Net
Income for the purposes of this Paragraph 6(a)(ii) of this Third Amendment shall be determined in a
manner consistent with the determination of Net Income applicable to Employee’s bonus under
Paragraph 5(a)(ii) of this Third Amendment.)

                         II. Eighty-seven and one-half percent (87.5%) shall become fully vested in the event that the
Company achieves ninety-five percent (95%) of the Net Income required for the target bonus as
specified on the CEO 2007 Bonus Metrics Table.

                         III. Seventy-five percent (75%) shall become fully vested in the event that the Company
achieves ninety percent (90%) of the Net Income required for the target bonus as specified on the
CEO 2007 Bonus Metrics Table.

                         IV. Achievement of Net Income below the Net Income required for the threshold bonus as
specified on the CEO 2007 Bonus Metrics Table shall result in forfeiture of the 2007 Grant of
Restricted Shares Based Upon Company Performance for Fiscal Year 2007.

                    (D) With respect to the 2007 Grant of Restricted Shares Based Upon Company Performance for
Company’s 2008 Fiscal Year, performance metrics (among Net Income; GMROI Dollars ($); Total Sales;
EBITDA) and numerical values for the selected performance metrics will be in line with the
respective targets under the Company Plan for Fiscal Year 2008 as well as in line with the
respective targets for the cash bonus under the Cash Bonus Plan for Fiscal Year 2008, as determined
by the HRCC in the normal course (i.e., in the first quarter of Fiscal Year 2008).

                    (E) The performance based Restricted Shares granted pursuant to this Paragraph 6(a)(ii) of
this Third Amendment shall be forfeited to the extent not vested based upon the performance of the
Company in Fiscal Year 2007 or Fiscal Year 2008, as applicable, subject to Paragraph 6(a)(ii)(F) of
this Third Amendment.

                    (F) The performance based Restricted Shares granted pursuant to this Paragraph 6(a)(ii) of
this Third Amendment that are not earned and vested on the effective date of Employee’s termination
of employment for any reason, whether initiated by Employee or by the Company shall be forfeited,
subject to the following:

                         I. In the event that Employee, prior to February 2, 2008, is discharged without Cause or
resigns for Good Reason, the Restricted Shares awarded pursuant to the 2007 Grant of Restricted
Shares Based Upon Company Performance for Fiscal Year 2007, which under their terms, are not vested
as of the date of such termination of employment, shall become vested to the extent provided in the
performance schedule established with respect to these Restricted Shares as if Employee had
remained employed with the Company through the date that a determination of vesting of these
Restricted Shares is made,

 

 

without regard to such prior discharge without Cause or resignation for Good Reason, provided
Employee executes a general release of claims consistent with Paragraph 13(b) of the Agreement; and

                         II. In the event that Employee, on or after February 3, 2008 and prior to January 31, 2009, is
discharged without Cause or resigns for Good Reason, the Restricted Shares awarded pursuant to the
2007 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2008 which, under
their terms, are not vested as of the date of such termination of employment, shall become vested
to the extent provided in such performance schedule as has been established with respect to these
Restricted Shares as if Employee had remained employed with the Company through the date that a
determination of vesting of these Restricted Shares is made, without regard to such prior discharge
without Cause or resignation for Good Reason, provided Employee executes a general release of
claims consistent with Paragraph 13(b) of the Agreement.

                    (G) Dividends shall not accrue or be paid on the performance based Restricted Shares granted
pursuant to this Paragraph 6(a)(ii) of this Third Amendment until the Restricted Shares vest.
Future dividends will be paid thereafter to the extent declared by the Board.

                    (H) This grant of performance-based Restricted Shares is to be made pursuant to the
performance-based award provisions of the Stock Incentive Plan as amended and restated.

                    (I) The material terms of this grant of performance-based Restricted Shares are set forth in
Exhibit B to this Third Amendment.

                    (J) In the event of a Change of Control on or prior to February 2, 2008, this grant of
performance-based Restricted Shares shall vest immediately. In the event of a Change of Control on
or after February 3, 2008, the provisions of Paragraph 8(b) of this Third Amendment shall be
applicable in lieu of the preceding sentence.

          (b) Fiscal Year 2008 Performance-Based Restricted Share Grant. On or about February
4, 2008, assuming that Employee is employed at that time, Employee shall receive under the Stock
Incentive Plan an additional grant of Restricted Shares with a value of Two Million Seven Hundred
Thousand Dollars ($2,700,000) as of the date of the grant.

               (i) One half of these Restricted Shares (with a value of One Million Three Hundred Fifty
Thousand Dollars ($1,350,000)) (“2008 Grant of Restricted Shares Based Upon Company Performance for Fiscal
Year 2008”) shall become vested based upon achievement of the performance goals set by the HRCC for
Fiscal Year 2008, and the other one-half of these Restricted Shares (with a value of One Million
Three Hundred Fifty Thousand Dollars ($1,350,000)) (“2008 Grant of Restricted Shares Based Upon Company
Performance for Fiscal Year 2009”) shall become vested based upon the achievement of the
performance goals set by the HRCC for Fiscal Year 2009.

               (ii) Performance metrics (among Net Income; GMROI Dollars ($); Total Sales; EBITDA) and
numerical values for the selected performance metrics will be in line

 

 

with the respective targets under the Company Plan for Fiscal Year 2008 and Fiscal Year 2009,
respectively, as well as in line with the respective targets for the cash bonus under the Cash
Bonus Plan for each such respective fiscal year of the Company, as determined by the HRCC in the
normal course (i.e., in the first quarter of the applicable Fiscal Year).

               (iii) The Restricted Shares granted pursuant to this Paragraph 6(b) of this Third Amendment
shall be forfeited to the extent not vested based upon the performance of the Company in Fiscal
Year 2008 or Fiscal Year 2009, as applicable, subject to Paragraph 6(b)(iv) of this Third
Amendment.

               (iv) The performance-based Restricted Shares granted pursuant to this Paragraph 6(b) of this
Third Amendment that are not earned and vested as of the effective date of Employee’s termination
of employment for any reason, whether initiated by Employee or by the Company shall be forfeited,
subject to the following:

                    (A) In the event that Employee, on or after February 3, 2008 and prior to January 31, 2009, is
discharged without Cause or resigns for Good Reason, the Restricted Shares awarded pursuant to the
2008 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2008, which under
their terms, are not vested as of the date of such termination of employment, shall become vested
to the extent provided in such performance schedule established with respect to these Restricted
Shares as if Employee had remained employed with the Company through the date that a determination
of vesting of these Restricted Shares is made, without regard to such prior discharge without Cause
or resignation for Good Reason, provided Employee executes a general release of claims consistent
with Paragraph 13(b) of the Agreement; and

                    (B) In the event that Employee, on or after February 1, 2009 and prior to January 30, 2010, is
terminated by the Company without Cause from the role described in Paragraph 1(a)(ii) of this Third
Amendment or resigns for Good Reason from that role, the Restricted Shares awarded pursuant to the
2008 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2009, which under
their terms, are not vested as of the date that Employee is terminated or resigns from that role,
shall become vested to the extent provided in such performance schedule established with respect to
these Restricted Shares as if Employee had continued to perform that role through the date that a
determination of vesting of these Restricted Shares is made, without regard to such prior
termination or resignation, provided Employee executes a general release of claims consistent with
Paragraph 13(b) of the Agreement.

               (v) Dividends shall not accrue or be paid on the performance-based Restricted Shares granted
pursuant to this Paragraph 6(b) of this Third Amendment until the Restricted Shares vest. Future
dividends will be paid thereafter to the extent declared by the Board.

               (vi) This grant of Restricted Shares is to be made pursuant to the performance-based award
provisions of the Stock Incentive Plan as amended and restated.

 

 

               (vii) The material terms of this grant of performance-based Restricted Shares are set forth in
Exhibit C to this Third Amendment.

               (viii) In the event of a Change of Control on or after February 3, 2008, the provisions of
Paragraph 8 of this Third Amendment shall be applicable.

          (c) Unvested Options. In the event that Employee is discharged without Cause or
resigns for Good Reason, any Options that are unvested at the time of such discharge without Cause
or resignation for Good Reason shall vest immediately, provided Employee executes a general release
of claims consistent with Paragraph 13(b) of the Agreement.

     7. Termination of Employment. Amendment of Paragraph 12 of the Agreement.

          (a) Resignation for Good Reason. Amendment of Paragraph 12(c) of the
Agreement. The following shall be substituted for Paragraph 12(c) of the Agreement:

“(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 12(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:

	 	(i)	 	causing Employee to cease to be President and
Chief Executive Officer prior to January 31, 2009;
	 
	 	(ii)	 	a diminution in Employee’s responsibilities,
duties or authority prior to January 31, 2009 other than a reassignment
of such responsibilities, duties or authority in connection with the
Company’s succession planning (with good faith and cooperation between
the Board and Employee with respect to implementing a transition plan)
in anticipation that Employee shall cease to be President and Chief
Executive Officer on January 31, 2009; 
	 
	 	(iii)	 	causing the Employee to cease reporting to the
Board as President and Chief Executive Officer prior to January 31,
2009, or causing the Employee to cease reporting thereafter to the
Board in an important role prior to February 5, 2010; 
	 
	 	(iv)	 	failing to nominate Employee to continue to
serve as a Director of the Company or removing Employee from the Board
prior to February 5, 2010;

 

 

	 	(v)	 	any reduction, prior to February 5, 2010, in
the Employee’s Base Salary below the amount then in effect; 
	 
	 	(vi)	 	any reduction, prior to January 31, 2009, in
the Employee’s potential bonus-eligibility amount as specified in this
Agreement; or
	 
	 	(vii)	 	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 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.”

          (b) Change of Control. Amendment of Paragraph 12(d) of the Agreement. The
following shall be substituted for Paragraph 12(d) of the Agreement for the period commencing
February 3, 2008:

“(d) Change of Control. In the event of a Change of Control, “Good
Reason,” in addition to the matters set forth in Paragraph 12(c), shall also
mean:

	 	(i)	 	a successor or assign (whether direct or
indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of
the Company fails to assume all duties, obligations and liabilities of
the Company under the Agreement pursuant to Paragraph 21;
	 
	 	(ii)	 	an adverse change in the nature or scope of
authorities, powers, functions, responsibilities or duties attendant to
the position held by Employee from those authorities, powers,
functions, responsibilities or duties which Employee held immediately
prior to the Change of Control or would hold thereafter pursuant to the
terms of the Agreement in the absence of a Change of Control; or
	 
	 	(iii)	 	the requirement that Employee’s principal
location of work change to any location that is in excess of 50 miles
from the location immediately prior to the Change of Control;

provided, however, the Employee shall be prohibited from resigning for Good
Reason for a period of three months following the Change of Control;
provided that during such three month period, Employee may satisfy the
30-day notice period provided under Paragraph 12(c) by written notice to the
Company of Employee’s intention to resign for Good Reason after the
expiration of such three months.

 

 

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 Securities Exchange Act of 1934 (“the
Exchange Act”), who is not an Affiliate of Company as defined in the
Exchange Act 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 the Company is
continued following any such transaction by a resulting entity (which
may be, but need not be, the Company) and the shareholders of the
Company immediately prior to such transaction hold, directly or
indirectly, a majority of the voting power of the resulting entity; or
	 
	 	(iv)	 	if any one shareholder owns stock possessing a
greater voting power than held in the aggregate by M. Thomas
Grumbacher, any member of his family, any trust for the primary benefit
of M. Thomas Grumbacher or any member of his family, and any charitable
foundation of which M. Thomas Grumbacher is a founder or co-founder
with his wife (collectively, the “Grumbacher Affiliates”), or if the
Grumbacher Affiliates control less than twenty percent (20%) of the
Voting Stock.”

          (c) In all other respects, Paragraph 12 of the Agreement shall remain in effect.

     8. Payments and Rights Upon Termination. Amendment of Paragraph 13 of the
Agreement.

          (a) Discharge Without Cause or Resignation for Good Reason. Amendment of
Paragraph 13(a) of the Agreement. The following shall be substituted for Paragraph 13(a) of
the Agreement:

	 	“(a)	 	Discharge Without Cause or Resignation for
Good Reason. If Employee is discharged without Cause or resigns
for Good Reason during the Term of the Agreement, Employee shall be
entitled to severance pay and other benefits as follows:

 

 

	 	(i)	 	Prompt payment of all accrued
wages and accrued but unused vacation pay through the date of
termination of employment;
	 
	 	(ii)	 	If not following a Change
of Control:

	 	(A)	 	Severance pay in
the amount of his Base Salary payable in installments
for a period of two (2) years from the date of
termination;
	 
	 	(B)	 	Continued
participation in the Company’s group health benefit plan
pursuant to COBRA;
	 
	 	(C)	 	Reimbursement of
Employee’s premiums paid in connection with such
participation for a period of eighteen (18) months;
	 
	 	(D)	 	As soon as
practicable thereafter, a payment equal to six (6) times
the then applicable monthly COBRA premium; and
	 
	 	(E)	 	If Employee has
been employed for at least three (3) months in the
Company’s fiscal year in which the termination of his
employment occurs, Employee will receive a prorated
portion (based on the number of days employed in the
fiscal year) of the bonus which would have been earned
by Employee under Paragraph 4(b) for said fiscal year
based on the Company’s full year performance. The
bonus, if any, under this clause (E) will be paid at the
time that bonuses are paid to other Company senior
executives for the fiscal year in which the termination
occurs.

          (b) Change of Control. Amendment of Paragraph 13(f) of the Agreement. The
following shall be substituted for Paragraph 13(f) of the Agreement with respect to a Change of
Control occurring on or after February 3, 2008:

	 	“(f)	 	Change of Control.

	 	(i)	 	Upon a Change of Control as
defined in Paragraph 12(d) of the Agreement as amended by this
Third Amendment:

 

 

	 	(A)	 	Grants Under Stock Incentive Plan:

I. Time-Based Restricted Shares and Options:
Any time-based Restricted Shares then held by
Employee shall fully vest and any forfeiture
restrictions with respect thereto shall immediately
lapse, and any outstanding options to purchase shares
of the Company’s Common Stock will become fully and
immediately exercisable to the extent not already
exercisable on the terms provided in the Company’s
stock option plans.

II. Grants of Performance-Based Restricted Shares
Granted in Fiscal Year 2007 and Fiscal Year 2008:
The following provisions shall apply to
performance-based Restricted Shares granted in Fiscal
Year 2007 and Fiscal Year 2008 pursuant to this Third
Amendment:

     (a) If the Change of Control occurs in
Fiscal Year 2008:

          (i) The 2007 Grant of Restricted Shares Based
Upon Company Performance for Fiscal Year 2008, and
the 2008 Grant of Restricted Shares Based Upon
Company Performance for Fiscal Year 2008 will vest,
without regard to the performance of the Company in
Fiscal Year 2008 on the earlier of: (A) after the
expiration of three (3) months following a Change of
Control provided Employee is employed by the Company
for three (3) months following the Change of Control;
or (B) immediately upon a discharge without Cause
following a Change of Control.

          (ii) Fifty percent (50%) of the 2008 Grant of
Restricted Shares Based Upon Company Performance for
Fiscal Year 2009 will vest, without regard to the
performance of the Company in Fiscal Year 2009 on the
earlier of: (A) after three (3) months following a
Change of Control provided Employee is employed by
the Company for three (3) months following the Change
of Control; or (B) immediately upon a discharge
without Cause following a Change of Control.

 

 

Vesting of the remaining fifty percent (50%) of the
2008 Grant of Restricted Shares Based Upon Company
Performance for Fiscal Year 2009 shall be based upon
the performance metrics and numerical values for the
performance metrics selected by the HRCC or successor
company’s compensation committee for the Company’s
Fiscal Year 2009 (or, if different, the applicable
fiscal year following the year in which the Change of
Control occurs), provided Employee remains employed
by the Company or, if applicable, a successor
company, through the last day of the Company’s Fiscal
Year 2009 (or, if different, such applicable
subsequent fiscal year). It is understood that
Employee shall forfeit this remaining fifty percent
(50%), in the event that he resigns from the Company
or, if applicable, a successor company, whether with
or without Good Reason, prior to the end of the
Company’s Fiscal Year 2009 (or, if different, such
applicable subsequent fiscal year of the successor
company), or is discharged by the Company or, if
applicable, a successor company, with or without
Cause, prior to the end of the Company’s Fiscal Year
2009 (or, if different, such applicable subsequent
fiscal year).

     (b) If the Change of Control occurs in
Fiscal Year 2009: the 2008 Grant of Restricted
Shares Based Upon Company Performance for Fiscal Year
2009 will vest in full, without regard to the
performance of the Company in Fiscal Year 2009 on the
earlier of: (A) after the expiration of three (3)
months following a Change of Control, provided
Employee is employed by the Company for three (3)
months following the Change of Control; or (B)
immediately upon a discharge without Cause following
a Change of Control.

 

 

	 	(B)	 	Change of Control Payment:

	 	(I)	 	Employee shall receive a “Change of Control
Payment,” in the event that Employee: (i) is
discharged without Cause during the Term of this
Agreement following a Change of Control; or (ii)
resigns from the Company with or without Good
Reason during the Term of this Agreement after
the expiration of three (3) months following a
Change of Control (unrelated to a discharge with
Cause).
	 
	 	(II)	 	This Change of Control Payment shall be equal to
the lesser of 2.99 times: (x) the sum
of his Base Salary (at the salary level
immediately preceding the Change of Control)
plus his average bonus for the three (3)
immediately preceding fiscal years of the
Company; or, if applicable, (y) the “280G
Permitted Payment” as described in Paragraph
13(f)(ii) below.

	 	(C)	 	Medical Insurance Premiums. Employee shall be entitled to
the following in the event that Employee (i) is
discharged without Cause during the Term of this
Agreement following a Change of Control; or (ii) resigns
for Good Reason during the Term of this Agreement after
the expiration of three (3) months following a Change of
Control (unrelated to a discharge with Cause):

(I) Continued participation in the Company’s group
health plan pursuant to COBRA;

(II) Reimbursement of Employee’s premiums paid in
connection with such participation for a period of
eighteen (18) months; and

(III) As soon as practicable thereafter, a payment
equal to eighteen (18) times the then applicable
monthly COBRA premium.

	 	(D)	 	Restrictive
Covenants. In the event of a Change of Control and,
if prior to the end of the Term, Employee terminates his
relationship for any reason or his relationship with the
Company is terminated

 

 

	 	 	 	without Cause, the covenant of Paragraph 15(a)(ii)
shall be inapplicable to Employee.

	 	(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 Paragraph 13(f) such that the
aggregate present value of such “parachute payments” to the 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 upon a Change of Control
under this Agreement or upon a Change of Control under any severance
plan, program, policy or obligation of the Company or any 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 independent tax counsel selected by mutual agreement of the
Company and Employee, the costs of which counsel shall be borne by the
Company.”

          (c) In all other respects , Paragraph 13 of the Agreement shall remain in effect.

     9. Legal Fees. The Company agrees to pay Employee’s reasonable legal fees, costs and
expenses in connection with the negotiation of this Third Amendment up to Five Thousand Dollars
($5,000).

     10. Controlling Law. This Third Amendment 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.

     11. Execution in Counterparts. This Third Amendment 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 Third Amendment shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties hereto.

     12. Effect of Amendment. Except as may be affected by this Third Amendment, all of
the provisions of the Agreement, the First Amendment and the Second Amendment, as amended hereby,
shall continue in full force and effect. The provisions of this Third Amendment shall not
constitute a waiver or modification of any terms or conditions of the Agreement as modified by the
First Amendment and the Second Amendment other than as expressly set forth herein.

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/ Tim Grumbacher
 

Tim Grumbacher 

Executive Chairman of the Board
	 	  
	 	July 19, 2007 
Date
	 
	 	 	 	 	 	 
	 

	 	/s/ Byron L. Bergren
 

Byron L. Bergren
	 	 
	 	July 19, 2007 
Dateexv10w1

 

Exhibit 10.1

DOLLAR FINANCIAL CORP.

SUPPLEMENTAL EXECUTIVE DEFERRED AWARD PLAN

FOR CANADIAN PARTICIPANTS

 

DOLLAR FINANCIAL CORP.

SUPPLEMENTAL EXECUTIVE DEFERRED AWARD PLAN

FOR CANADIAN PARTICIPANTS

     Dollar Financial Corp., a Delaware corporation (the “Company”), hereby establishes this
Supplemental Executive Deferred Award Plan for Canadian Employees (the “Plan”), effective as of
July 13, 2007, in order to provide members of a select group of individuals in the employ of the
Company’s Canadian subsidiary, National Money Mart Company (“Dollar Canada”) with an opportunity to
receive in a year subsequent to that in which it is earned any or all discretionary bonus
compensation which the Company may in its sole and absolute discretion determine to award such
individuals. This Plan amends and restates in its entirety any similar plan established or
utilized by the Company prior to the date hereof.

ARTICLE 1

Definitions

     1.1 Account(s) shall mean the Accounts established by the Administrator for administrative
convenience or otherwise for one or more Participants pursuant to Article 3 of the Plan.

     1.2 Administrator shall mean the Company. From time to time the Chief Executive Officer of
the Company shall delegate to one or more individuals employed by the Company the responsibilities
of the Administrator under the Plan.

     1.3 Beneficiary shall mean the person(s) or entity designated as such in accordance with
Article 11 of the Plan.

     1.4 Bonus shall mean a discretionary bonus declared by the Company in an amount, if any,
determined in the sole and absolute discretion of the Company.

     1.5 Change in Control shall mean a change in ownership or effective control of the Company, or
in the ownership of a substantial portion of the assets of the Company, as described in IRS Notice
2005-1, or such other guidance as may be issued by the U.S. Department of the Treasury under IRC
Section 409A.

     1.6 Company shall have the meaning given to such tern in the introductory paragraph of the
Plan.

     1.7 Crediting Rate shall mean the notional income gains and losses notionally credited to the
Participant’s Account balance which are based on the Participant’s choice among the investment
alternatives made available by the Administrator pursuant to Article 3 of the Plan.

     1.8 Deferral Payment Date shall mean the date on which the Participant’s vested Bonus amount
and any notional income, gains and losses notionally credited thereto is to be distributed in
accordance with Article 2 of the Plan.

     1.9 Disability shall mean (i) the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be

-2-

 

expected to result in death or can be expected to last for a continuous period of not less
than twelve (12) months, or (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, the Participant is receiving income replacement
benefits for a period of not less than three (3) months under any relevant insurance plan covering
employees of Dollar Canada. The Administrator may require that the Participant submit to an
examination by a competent physician or medical clinic selected by the Administrator on an annual
basis to confirm Disability.

     1.10 Eligible Employee shall mean an employee of Dollar Canada.

     1.11 ERISA shall mean the Employee Retirement Income Security Act of 1974, 1.13. IRC shall
mean the Internal Revenue Code of 1986, as amended.

     1.12 Financial Hardship shall mean a severe financial hardship to the Participant as
determined by the Administrator resulting from an illness or accident of the Participant, the
Participant’s spouse, or the Participant’s dependent (as defined in U.S. Internal Revenue Code
Section 152(a)), loss of the Participant’s property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the
Participant.

     1.13 Participant shall mean an Eligible Employee who has been selected by the Administrator to
participate in the Plan.

     1.14 Plan Year shall mean the calendar year.

     1.15 Termination of Employment shall mean the date of the cessation of the Participant’s
employment with the Company for any reason whatsoever, whether voluntary or involuntary, including
as a result of the Participant’s Disability or death.

     1.16 Valuation Date shall mean the date through which earnings are credited and shall be as
close to the payout or other event triggering valuation as is administratively feasible but in no
event earlier than the last day of the month preceding the month in which the payout or other event
triggering valuation occurs.

ARTICLE 2

Bonus Awards

     2.1 Bonus Awards. In each Plan Year, the Company may award a Bonus or Bonuses to the
Participant of such amount and under such circumstances as the Company shall determine. Any Bonus
awarded to the Participant under the Plan shall be notionally credited to a separate notional
sub-account of the Participant’s Account and shall be subject to a vesting schedule determined by
the Administrator at the time the Bonus is awarded. The Participant shall have no right to the
notional sub-account balance or to notional accrued interest or earnings on such notional
sub-account balance and this amount shall not become due and payable until the applicable vesting
schedule is satisfied or the applicable Deferral Payment Date, if later.

-3-

 

ARTICLE 3

Accounts

     3.1 Participant Accounts. Solely for recordkeeping purposes, one (1) Account shall be
maintained for the Participant. For each Bonus awarded to the Participant under the Plan during
any Plan Year, a notional sub-account of the Participant’s Account shall be created which shall be
notionally credited with all or part of any such Bonus awarded to the Participant. Accounts shall
be deemed to be credited with notional gains or losses as provided in Section 3.3 from the date the
Bonus is credited to the Account through the Valuation Date.

     3.2 Vesting of Notional Accounts. Amounts notionally credited to the Participant’s
notional Account, including notional earnings thereon, shall vest at such time and under such terms
and conditions as may be specified by the Administrator at the time the particular Bonus is
awarded.

     3.3 Crediting Rate. The Crediting Rate on amounts in a Participant’s Account shall be
based on the Participant’s choice among the investment alternatives made available from time to
time by the Administrator. The Administrator shall establish a procedure by which a Participant
may elect to have the Crediting Rate based on one or more investment alternatives and by which the
Participant may change investment elections at least quarterly. The Participant’s Account balances
shall reflect the investments selected by the Participant. If an investment selected by a
Participant sustains a loss, the Participant’s Account shall be reduced to reflect such loss. The
Participant’s choice among investments shall be solely for purposes of calculation of the Crediting
Rate. The Participant shall have no right to receive any securities or other property with respect
to any such notional investments. If the Participant fails to elect an investment alternative the
Crediting Rate shall be based on the investment alternative selected for this purpose by the
Administrator. The Company shall have no obligation to set aside or invest funds as directed by
the Participant and, if the Company elects to invest funds as directed by the Participant, the
Participant shall have no more right to such investments than any other unsecured general creditor.

     3.4 Statement of Accounts. The Administrator shall provide each Participant with
statements at least annually setting forth the Participant’s Account balance as of the end of each
year.

ARTICLE 4

Scheduled Distributions

     4.1 Timing of Scheduled Distribution. The vested portion of each Bonus awarded to the
Participant under the Plan shall be paid by the Company to the Participant in a lump sum on the
last business day of October of the third calendar year following the year of vesting. In the
event of the Participant’s Termination of Employment or the Participant’s death prior to the
scheduled distribution date for the vested portion of a Bonus, the vested portion shall be paid in
a single lump sum as soon as practicable following Termination of Employment or death as provided
in Articles 5, 6 and 7 of the Plan.

-4-

 

ARTICLE 5

Termination Benefits

     5.1 Termination Benefit. Upon the Participant’s Termination of Employment other than
by reason of Disability or death, the Company shall pay to the Participant the vested balance of
all of the Participant’s Accounts credited with notional earnings as provided in Article 3 through
the Valuation Date. The termination benefits shall be paid in a single lump sum as soon as
practicable following the Participant’s Termination of Employment.

ARTICLE 6

Death Benefits

     6.1 Survivor Benefit. If the Participant dies prior to complete distribution of all
of the Participant’s Accounts, the Company shall pay to the Participant’s Beneficiary a death
benefit equal to the total balance on death of all of the Participant’s Accounts credited with
notional earnings as provided in Article 3 through the Valuation Date. The death benefit shall be
paid in a single lump sum as soon as practicable following the date the Participant’s death is
established by reasonable documentation.

ARTICLE 7

Disability

     7.1 Disability. In the event of the Participant’s Termination of Employment by reason
of Disability, the Participant shall be entitled to receive an amount equal to the total balance on
Termination of Employment of all of the Participant’s Accounts credited with notional earnings as
provided in Article 3 through the Valuation Date. The Disability benefits shall be paid in a
single lump sum as soon as practicable following Termination of Employment by reason of Disability.

ARTICLE 8

Financial Hardship Distribution and Other Acceleration Events

     8.1 Financial Hardship Distribution. Upon a finding that the Participant has suffered
a Financial Hardship, the Administrator may, at the request of the Participant, accelerate
distribution of benefits under the Plan in the amount reasonably necessary to alleviate such
Financial Hardship. The amount distributed pursuant to this Section with respect to a hardship
shall not exceed the amount necessary to satisfy such a hardship plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution, after taking into account the extent
to which such hardship is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

ARTICLE 9

Change in Control

     9.1 Board Discretion to Provide for Distribution Upon a Change in Control. To the
extent permitted by applicable law, in connection with, in anticipation of and contingent on a
Change in Control, the Board may exercise its discretion to terminate the Plan and,

-5-

 

notwithstanding any other provision of the Plan, distribute all the Accounts of each
Participant in full.

ARTICLE 10

Amendment and Termination of Plan

     10.1 Amendment or Termination of Plan. The Company may, at any time, without the
Participants’ consent, direct the Administrator to amend or terminate the Plan, subject to
applicable law, except that no such amendment or termination may reduce a Participant’s Account
balances. If the Company terminates the Plan, no further amounts shall be deferred hereunder, and
amounts previously deferred or contributed to the Plan shall be fully vested and shall be paid in
accordance with the provisions of the Plan prior to the termination.

ARTICLE 11

Beneficiaries

     11.1 Beneficiary Designation. The Participant shall have the right, at any time, to
designate any person or persons as Beneficiary (both primary and contingent) to whom payment under
the Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall
be effective when it is submitted in writing to and acknowledged by the Administrator during the
Participant’s lifetime on a form prescribed by the Administrator.

     11.2 Revision of Designation. The submission of a new Beneficiary designation shall
cancel all prior Beneficiary designations. Any finalized divorce or marriage (other than a common
law marriage) of a Participant subsequent to the date of a Beneficiary designation shall revoke
such designation, unless in the case of divorce the previous spouse was not designated as
Beneficiary and unless in the case of marriage the Participant’s new spouse has previously been
designated as Beneficiary.

     11.3 Absence of Valid Designation. If a Participant fails to designate a Beneficiary
as provided above, or if the Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if every person designated as Beneficiary predeceases
the Participant or dies prior to complete distribution of the Participant’s benefits, then the
Administrator shall direct the distribution of such benefits to the Participant’s estate.

ARTICLE 12

Administration/Claims Procedures

     12.1 Administration. The Plan shall be administered by the Administrator, which shall
have the exclusive right and full discretion (i) to interpret the Plan, (ii) to decide any and all
matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or
admissions), (iii) to make, amend and rescind such rules as it deems necessary for the proper
administration of the Plan and (iv) to make all other determinations and resolve all questions of
fact necessary or advisable for the administration of the Plan, including determinations regarding
eligibility for benefits payable under the Plan and the determinations of financial hardship under
the Plan. All interpretations of the Administrator with respect to any matter hereunder shall be
final, conclusive and binding on all persons affected thereby. No

-6-

 

member of the Administrator shall be liable for any determination, decision, or action made in
good faith with respect to the Plan. The Company will indemnify and hold harmless the members of
the Administrator from and against any and all liabilities, costs, and expenses incurred by such
persons as a result of any act, or omission, in connection with the performance of such persons’
duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and
expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

     12.2 Claims Procedure. Any Participant, former Participant or Beneficiary may file a
written claim with the Administrator setting forth the nature of the benefit claimed, the amount
thereof, and the basis for claiming entitlement to such benefit. The Administrator shall determine
the validity of the claim and communicate a decision to the claimant promptly and, in any event,
not later than ninety (90) days after the date of the claim. The claim may be deemed by the
claimant to have been denied for purposes of further review described below in the event a decision
is not furnished to the claimant within such ninety (90) day period. If additional information is
necessary to make a determination on a claim, the claimant shall be advised of the need for such
additional information within forty-five (45) days after the date of the claim. The claimant shall
have up to one hundred and eighty (180) days to supplement the claim information, and the claimant
shall be advised of the decision on the claim within forty-five (45) days after the earlier of the
date the supplemental information is supplied or the end of the one hundred and eighty (180) day
period. Every claim for benefits which is denied shall be denied by written notice setting forth
in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the
denial, (ii) specific reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based, (iii) description of any
additional material or information that is necessary to process the claim, and (iv) an explanation
of the procedure for further reviewing the denial of the claim.

     12.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a
claim, a claimant or his/her authorized representative may file a written request for review of
such denial. Such review shall be undertaken by the Administrator and shall be a full and fair
review. The claimant shall have the right to review all pertinent documents. The Administrator
shall issue a decision not later than sixty (60) days after receipt of a request for review from a
claimant unless special circumstances, such as the need to hold a hearing, require a longer period
of time, in which case a decision shall be rendered as soon as possible but not later than one
hundred and twenty (120) days after receipt of the claimant’s request for review. The decision on
review shall be in writing and shall include specific reasons for the decision written in a manner
calculated to be understood by the claimant with specific reference to any provisions of the Plan
on which the decision is based and shall include an explanation of the claimant’s right to submit
the claim for binding arbitration in the event of an adverse determination on review.

ARTICLE 13

Conditions Related to Benefits

     13.1 Nonassignability. The benefits provided under the Plan may not be alienated,
assigned, transferred, pledged or hypothecated by any person, at any time, or to any person
whatsoever. Those benefits shall be exempt from the claims of creditors or other claimants of the
Participant or Beneficiary and from all orders, decrees, levies, garnishment or executions to the
fullest extent allowed by law.

-7-

 

     13.2 No Right to Company Assets. The benefits paid under the Plan shall be paid from
the general funds of the Company, and the Participant and any Beneficiary shall be no more than
unsecured general creditors of the Company with no special or prior right to any assets of the
Company for payment of any obligations hereunder.

     13.3 Protective Provisions. The Participant shall cooperate with the Company by
furnishing any and all information requested by the Administrator, in order to facilitate the
payment of benefits hereunder, taking such physical examinations as the Administrator may deem
necessary and taking such other actions as may be requested by the Administrator. If the
Participant refuses to so cooperate, the Company shall have no further obligation to the
Participant under the Plan. In the event of the Participant’s suicide during the first two (2)
years in the Plan, or if the Participant makes any material misstatement of information or
nondisclosure of medical history, then no benefits shall be payable to the Participant under the
Plan, except that benefits may be payable in a reduced amount in the sole discretion of the
Administrator.

     13.4 Withholding. The Participant shall make appropriate arrangements with the
Company or Dollar Canada for satisfaction of any income tax or other withholding requirements
applicable to the payment of benefits under the Plan. If no other arrangements are made, the
Company may provide, at its discretion, for such withholding and tax payments as may be required,
including, without limitation, by the reduction of other amounts payable to the Participant.

     13.5 Assumptions and Methodology. The Administrator shall establish the assumptions
and method of calculation used in determining the present or future value of benefits, earnings,
payments, fees, expenses or any other amounts required to be calculated under the terms of the
Plan. The Administrator shall also establish reasonable procedures regarding the form and timing
of installment payments.

     13.6 Trust. The Company shall be responsible for the payment of all benefits under
the Plan. At its discretion, the Company may establish one or more grantor trusts for the purpose
of providing for payment of benefits under the Plan. Such trust or trusts may be irrevocable, but
the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the
Participant from any such trust or trusts shall be considered paid by the Company for purposes of
meeting the obligations of the Company under the Plan.

ARTICLE 14

Miscellaneous

     14.1 Successors of the Company. The rights and obligations of the Company under the
Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the
Company.

     14.2 Employment Not Guaranteed. Nothing contained in the Plan nor any action taken
hereunder shall be construed as a contract of employment or as giving any Participant any right to
continued employment with the Company, Dollar Canada or any subsidiary of the Company.

-8-

 

     14.3 Gender, Singular and Plural. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural and the plural as the
singular.

     14.4 Captions. The captions of the articles, paragraphs and sections of the Plan are
for convenience only and shall not control or affect the meaning or construction of any of its
provisions.

     14.5 Validity. In the event any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other
provisions of the Plan.

     14.6 Waiver of Breach. The waiver by the Company of any breach of any provision of
the Plan shall not operate or be construed as a waiver of any subsequent breach by that Participant
or any other Participant.

     14.7 Notice. Any notice or filing required or permitted to be given to the Company or
the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent
by registered or certified mail, in the case of the Company, to the principal office of the
Company, directed to the attention of the Administrator, and in the case of the Participant, to the
last known address of the Participant indicated on the employment records of the Company. Such
notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification. Notices to the
Company may be permitted by electronic communication according to specifications established by the
Administrator.

     14.8 Inability to Locate Participant or Beneficiary. It is the responsibility of a
Participant to apprise the Administrator of any change in address of the Participant or
Beneficiary. In the event that the Administrator is unable to locate a Participant or Beneficiary
for a period of three (3) years, the Participant’s Account shall be forfeited to the Company.

     14.9 Errors in Benefit Statement or Distributions. In the event an error is made in a
benefit statement, such error shall be corrected on the next benefit statement following the date
such error is discovered. In the event of an error in a distribution, the Participant’s Account
shall, immediately upon the discovery of such error, be adjusted to reflect such under or over
payment and, if possible, the next distribution shall be adjusted upward or downward to correct
such prior error. If the remaining balance of a Participant’s Account is insufficient to cover an
erroneous overpayment, the Company may, at its discretion, offset other amounts payable to the
Participant from the Company (including but not limited to salary, bonuses, expense reimbursements,
severance benefits or other employee compensation benefit arrangements, as allowed by law) to
recoup the amount of such overpayment(s).

     14.10 ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of “management or highly compensated
employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from
Parts 2, 3 and 4 of Title I of ERISA.

-9-

 

     14.11 Applicable Law. In the event any provision of, or legal issue relating to, this
Plan is not fully preempted by ERISA, such issue or provision shall be governed by the laws of the
Commonwealth of Pennsylvania.

     14.12 Arbitration. Any claim, dispute or other matter in question of any kind
relating to this Plan which is not resolved by the claims procedures under this Plan shall be
settled by arbitration in accordance with the applicable employment dispute resolution rules of the
American Arbitration Association. Notice of demand for arbitration shall be made in writing to the
opposing party and to the American Arbitration Association within a reasonable time after the
claim, dispute or other matter in question has arisen. In no event shall a demand for arbitration
be made after the date when the applicable statute of limitations would bar the institution of a
legal or equitable proceeding based on such claim, dispute or other matter in question. The
decision of the arbitrators shall be final and may be enforced in any court of competent
jurisdiction. The arbitrators may award reasonable fees and expenses to the prevailing party in
any dispute hereunder and shall award reasonable fees and expenses in the event that the
arbitrators find that the losing party acted in bad faith or with intent to harass, hinder or delay
the prevailing party in the exercise of its rights in connection with the matter under dispute.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed this ___ day of July,
2007.

DOLLAR FINANCIAL CORP.

By:
/s/  Donald F. Gayhardt

Title: President

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