8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 18, 2009

THE BON-TON STORES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-19517	23-2835229
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2801 E. Market Street, York, Pennsylvania	17402
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 717-757-7660

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) Compensatory Arrangements of Certain Officers

On March 18, 2009, The Bon-Ton Stores, Inc. (the “Company”) issued a press release announcing the amendment, on March 18, 2009, of the Employment Agreement (the “Fourth Amendment”) by and between the Company and Byron L. Bergren, the Company’s President and Chief Executive Officer. Mr. Bergren’s Employment Agreement (the “2004 Agreement”) was entered into on August 24, 2004, a First Amendment to the 2004 Agreement (the “First Amendment”) was entered into on May 1, 2005, a Second Amendment to the 2004 Agreement (the “Second Amendment”) was entered into on May 23, 2006, and a Third Amendment to the 2004 Agreement (the “Third Amendment”) was entered into on July 19, 2007. Collectively, the 2004 Agreement, First Amendment, Second Amendment, Third Amendment and Fourth Amendment are referred to as the “Agreement.”

The description of the material terms of the Fourth Amendment set forth below is qualified in its entirety by the Fourth Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Fourth Amendment provides for an extension of the term of the 2004 Agreement for approximately two years through February 5, 2012. Under its terms, Mr. Bergren will serve as President and Chief Executive Officer through January 31, 2011 and will serve in an important role to be determined by the Board of Directors from February 1, 2011 through February 5, 2012. In addition, the Board has agreed to nominate Mr. Bergren as a member of the Board of Directors for the period through February 5, 2012.

Mr. Bergren’s base salary of $1,000,000 will remain in effect through February 5, 2012.

For fiscal year 2009, Mr. Bergren will be eligible for a bonus pursuant to the Company’s Cash Bonus Plan with a target bonus of 100% of his base salary (“Base Salary”), a threshold bonus of 50% of his Base Salary, and a maximum bonus of 200% of his Base Salary. This bonus opportunity will be determined pursuant to two performance measures: 80% of the potential bonus shall be based upon achievement of Net Income and 20% of the potential bonus shall be based upon the Company maintaining a minimum level, as defined by the Human Resources and Compensation Committee of the Board of Directors (“HRCC”), of borrowing availability under its revolving credit facility. In order for any portion of the bonus opportunity to be payable, the minimum threshold for Net Income must be achieved. This bonus will be determined in accordance with objectives previously determined by the HRCC consistent with the Cash Bonus Plan.

In addition, the Fourth Amendment provides for a bonus opportunity for fiscal year 2010 pursuant to the Company’s Cash Bonus Plan, with a target bonus of 100% of Mr. Bergren’s Base Salary. This bonus will be determined in accordance with objectives to be determined by the HRCC consistent with the Cash Bonus Plan.

For fiscal year 2011, Mr. Bergren will be eligible for a bonus pursuant to the Company’s Cash Bonus Plan as determined by the HRCC based on the role assigned to Mr. Bergren pursuant to the Fourth Amendment.

The Fourth Amendment provides that Mr. Bergren will receive two grants of shares of restricted stock in fiscal year 2009. One grant (the “2009 Time-Based Grant”), of 200,000 restricted shares of the Company’s common stock shall vest 50% on February 1, 2010, and 50% on February 1, 2011, provided, in each instance, that Mr. Bergren is continuously employed by the Company through such date, except that such shares shall vest immediately upon Mr. Bergren’s discharge without “Cause” (as such term is defined in the Third Amendment) or resignation for “Good Reason” (as such term is defined in the Fourth Amendment) provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement.

The second grant of restricted stock to be awarded in fiscal year 2009 of 200,000 restricted shares of the Company’s common stock shall vest based on the achievement of performance goals for fiscal year 2009 (“2009 Performance Shares”) previously established by the HRCC.

In the event that Mr. Bergren is discharged without Cause or resigns for Good Reason on or prior to January 31, 2010, provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement, the 2009 Performance Shares granted to Mr. Bergren shall become vested, and the underlying shares shall be delivered, to the same extent as would have applied had Mr. Bergren remained employed through the date the determination of vesting for these shares would otherwise have been.

The Fourth Amendment also provides that Mr. Bergren will receive two grants of shares of restricted stock in fiscal year 2010. One grant (the “2010 Time-Based Grant”), of 200,000 restricted shares of the Company’s common stock shall vest 100% on February 5, 2012, provided that Mr. Bergren is continuously employed by the Company through such date, except that such shares shall vest immediately upon Mr. Bergren’s discharge without Cause or resignation for Good Reason provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement.

The second grant of restricted stock to be awarded in fiscal year 2010 of 200,000 restricted shares of the Company’s common stock shall vest based on the achievement of performance goals. These shares shall vest 50% based upon the achievement of performance goals for fiscal year 2010 (“2010 Grant of Performance Shares Based Upon Company Performance for 2010”) to be established by the HRCC and 50% based upon the achievement of performance goals for fiscal year 2011 (“2010 Grant of Performance Shares Based Upon Company Performance for 2011”) to be established by the HRCC.

In the event that Mr. Bergren is discharged without Cause or resigns for Good Reason on or prior to January 31, 2011, provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement, the 2010 Grant of Performance Shares Based Upon Company Performance for 2010 granted to Mr. Bergren shall become vested, and the underlying shares shall be delivered, to the same extent as would have applied had Mr. Bergren remained employed through the date the determination of vesting for these shares would otherwise have been. In the event that Mr. Bergren is discharged without Cause or resigns for Good Reason on or after January 30, 2011 and prior to January 29, 2012, provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement, the 2010 Grant of Performance Shares Based Upon Company Performance for 2011 granted to Mr. Bergren shall become vested, and the underlying shares shall be delivered, to the same extent as would have applied had Mr. Bergren remained employed through the date the determination of vesting for these shares would otherwise have been.

In the event that Mr. Bergren is discharged without Cause or resigns for Good Reason, any stock options that are unvested at the time of such discharge shall vest immediately, provided that Mr. Bergren executes a general release consistent with certain terms of the Agreement.

The Fourth Amendment redefines “Good Reason” to mean: (i) causing Mr. Bergren to cease being President and Chief Executive Officer prior to January 30, 2011; (ii) a diminution in Mr. Bergren’s responsibilities, duties or authority other than a reassignment of such responsibilities, duties or authority prior to January 30, 2011 other than reasonable reassignment of such responsibilities, duties and authority in connection with the Company’s succession planning in anticipation that Mr. Bergren will cease to be the President and Chief Executive Officer on January 30, 2011; (iii) causing Mr. Bergren to cease reporting to the Board of Directors as President and Chief Executive Officer prior to January 30, 2011 or causing Mr. Bergren to cease thereafter reporting to the Board of Directors in an important role prior to February 5, 2012; (iv) failing to nominate Mr. Bergren to continue to serve as a director on the Board of Directors or removing him from the Board of Directors prior to February 5, 2012; (v) any reduction, prior to February 5, 2012 in Mr. Bergren’s base salary below the amount then in effect; (vi) any reduction, prior to January 30, 2011, in Mr. Bergren’s potential bonus eligibility amount as specified in the Agreement; or (vii) any substantial breach of any material provision of the Agreement.

As previously specified in the Second Amendment, if Mr. Bergren is discharged without Cause during the term of the Agreement following a Change of Control (as defined in the Third Amendment”) or resigns from the Company with or without Good Reason during the term of the Agreement after the expiration of three months following a Change of Control, Mr. Bergren will receive a payment equal to the lesser of 2.99 times his base salary (at the salary level immediately preceding the Change of Control plus his average bonus for the three immediately preceding fiscal years) or, if applicable, the “280G Permitted Payment” (as such term is defined in the 2004 Agreement).

As defined in The Third Amendment, “Change of Control” means the occurrence of: (i) any person who is not an affiliate of the Company becoming the beneficial owner of a majority of the Company; (ii) the Company adopting a plan of liquidation providing for the distribution of all or substantially all of its assets; (iii) the Company becoming party to a merger, consolidation or other form of business combination or sale of all or substantially all its assets unless the business of the Company continues and the shareholders of the Company prior to the transaction hold, directly or indirectly, a majority of the voting power of the resulting entity; or (iv) if any stockholder holds more voting power than M. Thomas Grumbacher and his affiliates or if Mr. Grumbacher and his affiliates control less than 20% of the Company’s voting stock.

In the event of a discharge without Cause or a resignation for Good Reason, the Fourth Amendment continues the provisions of the Second Amendment with respect to severance pay and accrued vacation and wages. It provides that Mr. Bergren shall be entitled to receive the following: prompt payment of all accrued wages and all accrued, but unused vacation pay and, if not as a result of a Change of Control, two years’ base salary payable in installments for a period of two years from the date of termination and, if he has been employed for at least three months in the fiscal year, a prorated portion of the Performance Shares for that period. The Fourth Amendment amended the provision on continuation of health benefits to provide that in the event of a discharge without Cause or a resignation for Good Reason not as a result of a Change of Control Mr. Bergren will be entitled to continued participation in the Company’s group health benefit plan and supplemental health coverage until age 65.

The Fourth Amendment further provides that the Company will pay the reasonable legal fees, up to $10,000, incurred by Mr. Bergren in connection with the negotiation of the Fourth Amendment.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit Number		Description of Exhibit
	10.1	Fourth Amendment to Employment Agreement with Byron L. Bergren
	99.1	Press Release issued March 18, 2009 regarding Fourth Amendment to Employment Agreement with Byron L. Bergren

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

The Bon-Ton Stores, Inc.
By:	/s/ Keith E. Plowman
	Keith E. Plowman
	Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Dated: March 20, 2009

EX-10.1

EXHIBIT 10.1

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

This FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT (“Fourth Amendment”), dated March 18, 2009, is by and between THE BON-TON STORES, INC., a Pennsylvania corporation (the “Company”), and BYRON L. BERGREN (“Employee”).

W I T N E S S E T H:

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”), a second amendment to the Agreement on May 23, 2006 (“Second Amendment”), and a third amendment to the Agreement on July 19, 2007 (“Third Amendment”);

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 Fourth Amendment for which Employee shall be eligible for Fiscal Year 2009 (defined below) and Fiscal Year 2010 (defined below) and the grants of restricted shares described below in this Fourth Amendment, and the Board has approved this Fourth Amendment; 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, the Second Amendment and the Third 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. Paragraph 1 of the Agreement is amended to set forth the following agreement between the Company and Employee:

(a) Employee shall be the Company’s President and Chief Executive Officer through January 31, 2011.

(b) Thereafter, through February 5, 2012, 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, 2012, and the Board agrees to nominate Employee to serve as a Director of the Board for the period through February 5, 2012. For purposes hereof, an “important role” with respect to Employee’s employment commencing February 1, 2011 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.

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

2. Term of Agreement; Renewal; Effective Date of this Fourth 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 with the Company 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, 2012 (the “Term”), unless sooner terminated in accordance with Paragraph 12 below.”

(b) Effective Date of this Fourth Amendment. This Fourth Amendment shall be effective upon execution by Employee and the Company (“Fourth Amendment Effective Date”).

3. 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 2009. For the fiscal year of the Company beginning February 1, 2009 (“Fiscal Year 2009”), 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 a target bonus of one hundred percent (100%) of Employee’s Base Salary. 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.

(b) Fiscal Year 2010. For the fiscal year of the Company beginning January 31, 2010 (“Fiscal Year 2010”), Employee shall be eligible for a bonus under the Cash Bonus Plan with a target bonus of one hundred percent (100%) of Employee’s Base Salary. 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 2011. For the fiscal year of the Company beginning January 30, 2011 (“Fiscal Year 2011”), Employee’s eligibility for a bonus will be reviewed and determined by the HRCC based upon the important role assigned to Employee by the Board in accordance with Section 1(b) of this Fourth Amendment. The potential amount of such bonus, if any, and the objectives to be achieved in order for such bonus to become payable shall be determined by the HRCC in its sole discretion and shall be communicated to Employee.

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

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4. 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 2009 Restricted Share Grants.

(i) Time-Based Restricted Share Grant.

(A) As soon as practicable after the Fourth Amendment Effective Date, Employee shall receive under The Bon-Ton Stores, Inc. Amended and Restated 2000 Stock Incentive and Performance-Based Award Plan or any successor plan thereof (“Stock Incentive Plan”) an additional grant of 200,000 Restricted Shares (the “2009 Time-Based Restricted Shares”).

(B) Employee’s ownership of the 2009 Time-Based Restricted Shares shall vest 50% on February 1, 2010 and 50% on February 1, 2011, provided that Employee is continuously employed by the Company through such dates. Notwithstanding the foregoing, the 2009 Time-Based Restricted Shares shall vest immediately upon Employee’s discharge without Cause or resignation for Good Reason, provided that, in either case, 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 the 2009 Time-Based Restricted Shares, provided that the 2009 Time-Based Restricted Shares have not been forfeited as of the record date for the applicable dividend distribution.

(D) The material terms of the Time-Based Restricted Shares shall be set forth in a Restricted Stock Agreement in the form set forth as Exhibit A to the Third Amendment.

(ii) Performance-Based Restricted Share Grant.

(A) As soon as practicable after the Fourth Amendment Effective Date, Employee shall receive under the Stock Incentive Plan an additional grant of 200,000 Restricted Shares (the “2009 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2009”).

(B) The 2009 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2009 shall become vested based upon achievement of the performance goals set by the HRCC for Fiscal Year 2009.

(C) With respect to the 2009 Grant of Restricted Shares Based Upon Company Performance for Company’s 2009 Fiscal Year, performance metrics and numerical values for the selected performance metrics will be in line with the respective targets under the Company Plan for Fiscal Year 2009 as well as in line with the respective targets for the cash bonus under the Cash Bonus Plan for Fiscal Year 2009, as determined by the HRCC in the normal course (i.e., in the first quarter of Fiscal Year 2009).

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(D) The performance-based Restricted Shares granted pursuant to this Paragraph 4(a)(ii) of this Fourth Amendment shall be forfeited to the extent not vested based upon the performance of the Company in Fiscal Year 2009. Notwithstanding the foregoing, in the event that Employee is discharged without Cause or resigns for Good Reason prior to January 31, 2010, the Restricted Shares granted pursuant to this Paragraph 4(a)(ii) shall become vested to the extent provided in the performance schedule established with respect to such Restricted Shares as if Employee had remained employed by the Company through the date that a determination of vesting of such Restricted Shares is made by the HRCC, without regard to such prior discharge without Cause or resignation for Good Reason, provided that, in either case, Employee executes a general release of claims consistent with Paragraph 13(b) of the Agreement.

(E) Dividends shall not accrue or be paid on the performance based Restricted Shares granted pursuant to this Paragraph 4(a)(ii) of this Fourth Amendment until the Restricted Shares vest.

(F) 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.

(G) The material terms of this grant of performance-based Restricted Shares shall be set forth in a Restricted Stock Agreement in the form set forth as Exhibit C to the Third Amendment.

(b) Fiscal Year 2010 Restricted Share Grants.

(i) Time-Based Restricted Share Grant.

(A) On or about the first business day of Fiscal Year 2010, assuming Employee is employed by the Company at that time, Employee shall receive under the Stock Incentive Plan an additional grant of 200,000 Restricted Shares (the “2010 Time-Based Restricted Shares”).

(B) Employee’s ownership of the 2010 Time-Based Restricted Shares shall vest 100% on February 5, 2012 provided that Employee is continuously employed by the Company through that date. Notwithstanding the foregoing, the 2010 Time-Based Restricted Shares shall vest immediately upon Employee’s discharge without Cause or resignation for Good Reason, provided that, in either case, 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 the 2010 Time-Based Restricted Shares, provided that the 2010 Time-Based Restricted Shares have not been forfeited as of the record date for the applicable dividend distribution.

(D) The material terms of the grant of 2010 Time-Based Restricted Shares shall be set forth in a Restricted Stock Agreement in the form set forth as Exhibit A to the Third Amendment.

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(ii) Performance-Based Restricted Share Grant.

(A) On or about the first business day of Fiscal 2010, assuming that Employee is employed by the Company at that time, Employee shall receive under the Stock Incentive Plan an additional grant of 200,000 Restricted Shares.

(B) One half of these Restricted Shares (“2010 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2010”) shall become vested based upon achievement of the performance goals set by the HRCC for Fiscal Year 2010, and the other one-half of these Restricted Shares (“2010 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2011”) shall become vested based upon the achievement of the performance goals set by the HRCC for Fiscal Year 2011.

(C) Performance metrics and numerical values for the selected performance metrics will be in line with the respective targets under the Company Plan for Fiscal Year 2010 and Fiscal Year 2011, 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).

(D) The Restricted Shares granted pursuant to this Paragraph 4(b)(ii) of this Fourth Amendment shall be forfeited to the extent not vested based upon the performance of the Company in Fiscal Year 2010 or Fiscal Year 2011, as applicable. Notwithstanding the foregoing, in the event that (1) Employee is discharged without Cause or resigns for Good Reason prior to January 30, 2011, the 2010 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2010 shall become vested to the extent provided in the performance schedule established with respect to such Restricted Shares as if Employee had remained employed by the Company through the date that a determination of vesting of such Restricted Shares is made by the HRCC, without regard to such prior discharge without Cause or resignation for Good Reason, provided that, in either case, Employee executes a general release of claims consistent with Paragraph 13(b) of the Agreement, or (2) Employee is discharged without Cause or resigns for Good Reason on or after January 30, 2011 and prior to January 29, 2012, the 2010 Grant of Restricted Shares Based Upon Company Performance for Fiscal Year 2011 shall become vested to the extent provided in the performance schedule established with respect to such Restricted Shares as if Employee had remained employed by the Company through the date that a determination of vesting of such Restricted Shares is made by the HRCC, without regard to such prior discharge without Cause or resignation for Good Reason; provided that, in either case, Employee executes a general release of claims consistent with Paragraph 13(b) of the Agreement.

(E) Dividends shall not accrue or be paid on the performance-based Restricted Shares granted pursuant to this Paragraph 4(b)(ii) of this Fourth Amendment until the Restricted Shares vest.

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(F) 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.

(G) The material terms of this grant of performance-based Restricted Shares shall be set forth in a Restricted Stock Agreement in the form set forth as Exhibit C to the Third Amendment.

5. Amendment of Paragraph 12 of the Agreement.

(a) 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 30, 2011;

(ii) a diminution in Employee’s responsibilities, duties or authority prior to January 30, 2011 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 30, 2011;

(iii) causing the Employee to cease reporting to the Board as President and Chief Executive Officer prior to January 30, 2011, or causing the Employee to cease reporting thereafter to the Board in an important role prior to February 5, 2012;

(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, 2012;

(v) any reduction, prior to February 5, 2012, in the Employee’s Base Salary below the amount then in effect;

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(vi) any reduction, prior to January 30, 2011, 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) In all other respects Paragraph 12 of the Agreement shall remain in effect.

6. Amendment of Paragraph 13 of the Agreement. Paragraph 13(a)(ii)(B) of the Agreement, as amended, is hereby amended and restated to read as follows: “Continued participation in the Company’s group health benefit plan until Employee attains age 65 and continued participation in supplemental Pinnacle health coverage until Employee attains age 65.” Paragraphs 13(a)(ii)(C) and 13(a)(ii)(D) of the Agreement, as amended, are hereby deleted.

7. Legal Fees. The Company agrees to pay Employee’s reasonable legal fees, costs and expenses in connection with the negotiation of this Fourth Amendment up to Ten Thousand Dollars ($10,000).

8. Controlling Law. This Fourth 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.

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

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

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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	Date: March 18, 2009
	Tim Grumbacher
	Executive Chairman of the Board
	/s/ Byron L. Bergren	Date: March 16, 2009
	Byron L. Bergren

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EX-99.1

EXHIBIT 99.1

N E W S     R E L E A S E

FOR IMMEDIATE RELEASE	CONTACT:
	Mary Kerr
	Vice President
	Investor & Public Relations
	(717) 751-3071
	mkerr@bonton.com

THE BON-TON STORES, INC. ANNOUNCES AMENDMENT TO BUD BERGREN’S CONTRACT

York, PA, March 18, 2009 — The Bon-Ton Stores, Inc. (NASDAQ: BONT) today announced its Board of Directors unanimously agreed to ask Byron L. (Bud) Bergren to continue in his role as president and chief executive officer. Mr. Bergren’s contract was amended to stipulate he would continue to serve as president and chief executive officer through January 31, 2011 and would serve in an important role to be determined by the Board of Directors from February 1, 2011 through February 5, 2012.

Tim Grumbacher, Executive Chairman of the Board of Directors, commented, “We are very pleased that Bud has accepted the Board’s request to continue in his role as president and chief executive officer. Bud’s vision, leadership and execution continue to guide us through the challenging times we are facing in this very difficult retail environment. We look forward to Bud’s ongoing contributions as we position our Company for future growth and profitability.”

Mr. Bergren, commented, “I want to thank the Board of Directors and Tim for their continued support and confidence. We will implement opportunities to increase sales and focus on profitability. We believe our positioning as a source of appealing and differentiated product at value price points is more attractive than ever in these challenging times and we plan to capitalize on these attributes. I am very fortunate to have a strong, experienced management team and dedicated group of associates assisting me in the pursuit of these goals.”

The Bon-Ton Stores, Inc. operates 280 stores, which includes twelve furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers nameplates and under the Parisian nameplate, stores in the Detroit, Michigan area. The stores offer a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. For further information, please visit the investor relations section of the Company’s website at http://investors.bonton.com.

Certain information included in this press release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which may be identified by words such as “may,” “could,” “will,” “plan,” “expect,” “anticipate,” “estimate,” “project,” “intend” or other similar expressions, involve important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Factors that could cause such differences include, but are not limited to, risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company, including the potential write-down of the current valuation of intangible assets and deferred taxes; potential increase in pension obligations; consumer spending patterns and debt levels; additional competition from existing and new competitors; inflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with opening new stores or expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon vendor relationships; a privacy breach; the ability to reduce SG&A expenses; the incurrence of unplanned capital expenditures; the ability to realize the expected benefits from our planned changes in operating structure and the ability to obtain financing for working capital, capital expenditures and general corporate purposes. Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Company’s Form 10-K filed with the Securities and Exchange Commission.

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