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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended Commission File Number
January 29, 2000 0-19517
THE BON-TON STORES, INC.
2801 EAST MARKET STREET
YORK, PENNSYLVANIA, 17402
(717) 757-7660
INCORPORATED IN PENNSYLVANIA IRS NO. 23-2835229
---------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value
The Registrant has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
and has been subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is contained in Registrant's proxy statement incorporated by reference in Part
III of this Form 10-K.
As of March 24, 2000, the aggregate market value of the voting stock
held by non-affiliates of the Registrant was approximately $26,720,022, based
upon the closing price of $3.063 per share on March 24, 2000.*
As of March 24, 2000, there were 12,270,954 shares of Common Stock,
$.01 par value, and 2,989,853 shares of Class A Common Stock, $.01 par value,
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part II - Portions of our 1999 Annual Report to security holders
("Annual Report").
Part III - Portions of the Proxy Statement for the 2000 Annual
Meeting of Shareholders ("Proxy Statement").
- -------------------------------------
* Calculated by excluding all shares that may be deemed to be beneficially owned
by executive officers and directors of the Registrant, without conceding that
all such persons are "affiliates" of the Registrant for purposes of the federal
securities laws.
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Statements made in this Form 10-K, other than statements of historical
information, are forward-looking statements 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", "will", "plan", "expect", "intend" or
other similar expressions, involve certain risks and uncertainties that could
significantly affect anticipated results in the future, including, but not
limited to, uncertainties affecting retail generally (such as consumer
confidence and demand for soft goods); uncertainties associated with opening new
stores or expanding and remodeling existing stores; the Company's presence in
and dependence on limited geographic markets; competition within the markets in
which the Company's stores are located; the ability to attract and maintain
qualified management; failure to accurately predict customer fashion
preferences; and the ability to obtain financing for working capital, capital
expenditures and general corporate purposes. The Company assumes no obligation
to update or revise any such forward-looking statements even if future events
make it clear that any projected results implied by such statements will not be
realized.
References to a year in this Form 10-K refer to The Bon-Ton's fiscal
year, which is the 52 or 53 week period ending on the Saturday nearer January 31
of the following calendar year (e.g. a reference to 1999 is a reference to the
fiscal year ended January 29, 2000).
PART I
ITEM 1. BUSINESS
GENERAL
The Bon-Ton Stores, Inc., together with its subsidiaries, is the
successor to S. Grumbacher & Son, a family business founded in 1898, and is a
leading operator of quality fashion department stores offering moderate and
better apparel, home furnishings, cosmetics, accessories and shoes. In many of
its markets, The Bon-Ton is the primary destination for branded fashion
merchandise such as Calvin Klein, Liz Claiborne, Nautica, Ralph Lauren and Tommy
Hilfiger. We presently operate 72 stores in secondary markets - 36 stores in
Pennsylvania, 25 in New York, three stores in each of New Jersey and Maryland
and one store in each of Connecticut, New Hampshire, Massachusetts, Vermont and
West Virginia. Our strategy focuses on being the premier fashion retailer in
markets that demand, but often have limited access to, better branded
merchandise.
The Bon-Ton's executive offices are located at 2801 East Market Street,
York, Pennsylvania.
MERCHANDISING
The Bon-Ton stores offer moderate and better fashion apparel, home
furnishings, cosmetics, accessories, shoes and other items. Sales of apparel
constituted 62.3% of sales in 1999. The following chart illustrates sales by
product category for 1999, 1998 and 1997.
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MERCHANDISE CATEGORY 1999 1998 1997
- -------------------- ---- ---- ----
Women's clothing 27.2% 27.7% 28.6%
Men's clothing 18.0 18.7 17.9
Home 13.6 12.9 12.6
Cosmetics 10.5 9.9 9.9
Accessories 7.8 7.5 7.5
Children's clothing 7.1 7.2 7.2
Shoes 5.8 5.6 5.5
Intimate apparel 5.2 5.1 5.1
Junior's clothing 4.8 5.4 5.7
----- ----- -----
Total 100.0% 100.0% 100.0%
===== ===== =====
We carry a number of highly recognized brand names, including Calvin
Klein, Cole Haan, Estee Lauder, Jones New York, Kenneth Cole, Liz Claiborne,
Nautica, Nine West, Ralph Lauren, Steve Madden and Tommy Hilfiger, and within
these brands choose collections which balance fashion, price and selection. We
maintain vendor shops within our stores from key vendors such as Calvin Klein,
Nautica, Ralph Lauren and Tommy Hilfiger. In these vendor shops merchandise is
grouped and positioned in preferred floor locations to provide enhanced
visibility with distinctive, vendor-specific fixturing, signage and displays.
We depend on our relationships with our key vendors and our ability to
purchase better branded merchandise from them at competitive prices. If we lose
the support of these vendors, it could have a material adverse affect on The
Bon-Ton.
Complementing branded merchandise, our private brand merchandise
provides fashion at competitive pricing under names such as Andrea Viccaro,
Jenny Buchanan, Susquehanna Trail Outfitters and Zigg's. We view this private
brand merchandise as a strategic addition to our strong array of highly
recognized, quality national brands and as an opportunity to increase brand
exclusiveness, customer loyalty and competitive differentiation. Private brand
merchandise represented approximately 12.5% of 1999 total sales.
Our business, like that of most retailers, is subject to seasonal
fluctuations, with the major portion of sales and income realized during the
latter half of each year, which includes the back-to-school and holiday seasons.
MARKETING
We attract customers by offering services such as free gift wrap,
special order capability and in-store alterations. In addition, through our
"Certified Value" program, we maintain everyday value prices on staple items
such as turtlenecks, T-shirts, shorts and denim within major product groups.
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Our advertising and promotional programs are conducted through
newspaper advertisements, direct mail and, to a lesser extent, local television
and radio. We maintain an in-house advertising group that produces substantially
all our print advertising.
The effectiveness of our direct mail efforts has been greatly enhanced
through database management systems. By accurately identifying the predictors of
response to direct mail pieces, we have the ability to rank, score and select
customers with event-specific information.
CUSTOMER CREDIT
Our customers may pay for their purchases with The Bon-Ton proprietary
credit card, Visa, Mastercard, cash or check.
The Bon-Ton credit card holders generally constitute our most loyal and
active customers; during 1999, the average dollar amount for proprietary credit
card purchases substantially exceeded the average dollar amount for cash
purchases. We believe our credit card is a particularly productive tool for
customer segmentation and target marketing.
The following table summarizes the percentage of total sales generated
by payment type:
TYPE OF PAYMENT
1999 1998 1997
---- ---- ----
Bon-Ton credit card 47% 48% 50%
Visa, Mastercard, American Express* 25 23 22
Cash or check 28 29 28
--- --- ---
Total 100% 100% 100%
=== === ===
*The Company ceased accepting American Express in 1998.
During 1999, we issued 311,000 Bon-Ton credit cards for newly opened
accounts.
Sales on The Bon-Ton's proprietary credit card represent a significant
portion of our business. Deterioration in the quality of these accounts
receivable because customers fail to pay on time or at all, or any adverse
changes in laws regulating the granting or servicing of credit, could have a
material adverse effect on our business and financial condition.
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COMPETITION
We face competition for customers from traditional department stores
such as those operated by J. C. Penney Company, Inc., Federated Department
Stores Inc., The May Department Stores Company, Kohl's Corporation and Sears,
Roebuck and Co., from regional department stores such as Boscov's Department
Store, Inc., and from specialty stores and catalogue and internet retailers. In
a number of our markets, we compete with national department store chains which
are better established and in other markets, we face potential competition from
national chains that have not yet entered such markets. In all markets, we
generally compete for customers with department stores offering moderately
priced goods. Many of our competitors have substantially greater financial and
other resources than The Bon-Ton, and some of our competitors have greater
leverage with vendors, which may allow such competitors to obtain merchandise
more easily or on better terms. In several of our markets, we compete with
department stores which have a larger store or a better location in the market.
We believe we compare favorably with our competitors with respect to
quality, depth and breadth of merchandise, prices for comparable quality
merchandise, customer service and store environment. We also believe our
knowledge of secondary markets, developed over many years of operation, and our
focus on secondary markets as our primary area of operation, give us a
competitive advantage.
ASSOCIATES
As of January 29, 2000, we had approximately 3,800 full-time and 5,900
part-time associates. We also employ additional part-time associates during peak
periods. None of our associates are represented by a labor union. We believe
that our relationship with our associates is good.
ITEM 2. PROPERTIES.
Our stores, which all operate under "The Bon-Ton" name, vary in size
from approximately 33,000 to 160,000 square feet. All but four of The Bon-Ton
stores are anchor tenants in shopping malls or are in, or adjacent to, strip
shopping centers.
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The following table sets forth the number of stores at the beginning
and end of each of the last five years:
Fiscal Year 1999 1998 1997 1996 1995
- ----------- ---- ---- ---- ---- ----
Number of stores:
Beginning of year 65 64 64 68 69
Additions 7 2 0 1 4
Closings 0 (1) 0 (5) (5)
-- -- -- -- --
End of year 72 65 64 64 68
We plan to maintain our growth by expanding and upgrading existing
stores and by opening new stores. In addition, we will consider acquisitions of
department store companies or their real estate assets if and when such
opportunities arise. Our market positioning strategy has been to locate new
stores or acquire existing companies or their stores in secondary markets
generally within or contiguous to existing areas of operations.
In April 1999, we opened a store in the Glens Falls, New York market
(80,300 square feet), in August 1999, a store in Pottstown, Pennsylvania (88,300
square feet), and in September 1999, stores in Hamden, Connecticut (58,900
square feet), Brick, New Jersey (53,500 square feet) and Red Bank, New Jersey
(33,300 square feet). In November 1999, we opened stores in South Burlington,
Vermont (60,000 square feet) and in Concord, New Hampshire (87,700 square feet).
The following table provides certain information regarding our store
properties:
APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
PENNSYLVANIA
Allentown South Mall 101,800 1994
Bethlehem Westgate Mall 102,000 1994
Bloomsburg Columbia Mall 46,100 1988
Butler Clearview Mall 100,800 1982
Carlisle Carlisle Plaza Mall 59,900 1977
Chambersburg Chambersburg Mall 55,600 1985
Doylestown Doylestown Shopping Center 55,500 1994
Easton Palmer Park Mall 115,100 1994
Greensburg Westmoreland Mall 100,000 1987
Hanover North Hanover Mall 67,600 1971
Harrisburg Camp Hill (Free Standing) 145,200 1987
Colonial Park Shopping Center 136,500 1987
Indiana Indiana Mall 60,400 1979
Johnstown The Galleria 80,900 1992
Lancaster Park City Center 144,800 1992
Lebanon Lebanon Plaza Mall 53,700 1994
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APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
Lewistown Central Business District 46,700 1972
Oil City Cranberry Mall 45,200 1982
Pottstown Coventry Mall 88,300 1999
Pottsville Schuylkill Mall 61,100 1987
Quakertown Richland Mall 88,100 1994
Reading Berkshire Mall 159,400 1987
Scranton Keyser Oak Plaza 57,600 1980
State College Nittany Mall 70,200 1994
Stroudsburg Stroud Mall 87,000 1994
Sunbury Susquehanna Valley Mall 90,000 1978
Trexlertown Trexler Mall 54,000 1994
Uniontown Uniontown Mall 71,000 1976
Warren Warren Mall 50,000 1980
Washington Crown Washington Center 78,100 1987
Williamsport Lycoming Mall 60,900 1986
Wilkes-Barre Midway Shopping Center 66,000 1987
Wyoming Valley Mall 159,500 1987
York York Galleria 132,000 1989
Queensgate Shopping Center 85,100 1962
West Manchester Mall 80,200 1981
NEW YORK
Binghamton Oakdale Mall 80,000 1981
Buffalo Northtown Plaza 100,800 1994
Walden Galleria 150,000 1994
Eastern Hills Mall 151,200 1994
McKinley Mall 97,200 1994
Sheridan/Delaware Plaza 124,100 1994
Southgate Plaza 100,500 1994
Elmira Arnot Mall 74,800 1995
Glens Falls Aviation Mall 80,300 1999
Ithaca Pyramid Mall 52,400 1991
Jamestown Chautauqua Mall 59,900 1998
Lockport Lockport Mall 82,000 1994
Massena St. Lawrence Centre 51,000 1994
Niagara Falls Summit Park Mall 88,100 1994
Olean Olean Mall 73,000 1994
Rochester Greece Ridge Center 144,600 1996
The Marketplace Mall 100,000 1995
Irondequoit Mall 102,600 1995
Eastview Mall 120,600 1995
Saratoga Springs Wilton Mall 71,700 1993
Syracuse Carousel Center 80,000 1994
Camillus Mall 64,700 1994
Great Northern Mall 98,400 1994
Shoppingtown Mall 70,100 1994
Watertown Salmon Run Mall 50,200 1992
MARYLAND
Cumberland Country Club Mall 60,900 1981
Frederick Frederick Towne Mall 77,900 1972
Hagerstown Valley Mall 126,000 1974
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APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
------ -------- ------- -----------
NEW JERSEY
Brick Brick Plaza 53,500 1999
Phillipsburg Phillipsburg Mall 65,000 1994
Red Bank Central Business District 33,300 1999
WEST VIRGINIA
Martinsburg Martinsburg Mall 65,800 1994
CONNECTICUT
Hamden Hamden Mart 58,900 1999
MASSACHUSETTS
Westfield Westfield Shops 50,600 1998
NEW HAMPSHIRE
Concord Steeplegate Mall 87,700 1999
VERMONT
S. Burlington University Mall 60,000 1999
We lease 64 of our stores and own eight stores, three of which are
subject to ground leases. We lease a total of 171,000 square feet for our
executive and administrative offices in York, Pennsylvania, lease the land (but
own the building) for our 143,700 square foot distribution center in York,
Pennsylvania, and lease our 326,000 square foot distribution center in
Allentown, Pennsylvania.
ITEM 3. LEGAL PROCEEDINGS.
The Bon-Ton has been named, together with other department stores and
Nine West Group, Inc., a defendant in a number of antitrust class action
lawsuits filed in February 1999, which have been consolidated in the United
States District Court for the Southern District of New York. These lawsuits
allege that the defendants engaged in conduct in violation of the antitrust laws
relating to the sale of shoes manufactured by Nine West, and seek unspecified
damages against all defendants. We and our counsel believe these claims are
without merit and intend to vigorously defend these lawsuits.
Nine West recently announced it entered into a settlement with the
Attorneys General of the states, territories and possessions of the United
States and with the Federal Trade Commission. The agreement, which must be
approved by the Court, settles price-fixing claims against Nine West and its
alleged co-conspirators. We and our counsel believe that the settlement
agreement, if approved, may completely resolve and extinguish the claims
asserted in the private class action against The Bon-Ton and the other
department store defendants.
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We are party to other legal proceedings and claims which arise during
the ordinary course of business. We do not expect the ultimate outcome of all
such litigation and claims to have a material adverse effect on our financial
position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM A. EXECUTIVE OFFICERS OF THE COMPANY.
The Executive Officers of the Company are:
NAME AGE POSITION
- ---- --- --------
Heywood Wilansky 52 President and Chief Executive Officer and Director
M. Thomas ("Tim") Grumbacher 60 Chairman of the Board and Director
Michael L. Gleim 57 Vice Chairman and Chief Operating Officer and Director
Frank Tworecke 53 Vice Chairman and Chief Merchandising Officer and Director
James H. Baireuther 53 Executive Vice President and Chief Financial Officer
Jack Boonshaft 57 Senior Vice President - Stores
H. Stephen Evans 50 Senior Vice President - Real Estate, Legal and Governmental
Affairs
Steven D. Goldsmith 33 Senior Vice President - General Merchandise Manager
William T. Harmon 45 Senior Vice President - Sales Promotion, Marketing and Strategic
Planning
Gary Kellman 57 Senior Vice President - General Merchandise Manager
Douglas Lamm 53 Senior Vice President - General Merchandise Manager
Patrick J. McIntyre 55 Senior Vice President - Chief Information Officer
Ryan J. Sattler 55 Senior Vice President - Operations
Stephen M. Sloane 53 Senior Vice President - General Merchandise Manager
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Stephanie Stough 48 Senior Vice President - Merchandise Planning and Control
Thomas R. Tortoriello 58 Senior Vice President - Human Resources
Mr. Wilansky joined us in August 1995 as President and Chief Executive
Officer and a Director. Prior to that, Mr. Wilansky was employed by May
Department Stores for more than 19 years. From 1992 to August 1995, he was
President and Chief Executive Officer of the Foley's division of May, and from
1991 to 1992, he was President and Chief Executive Officer of the Filene's
division of May. Prior to that, he was with the Hecht's and Lord & Taylor
divisions of May.
Mr. Tworecke joined the Company in November 1999 as Vice Chairman and
Chief Merchandising Officer and a Director. From January 1996 until November
1999, he was President and Chief Operating officer of Jos. A. Bank Clothiers,
and from August 1994 to December 1995, he was President of Merry-Go-Round
Enterprises, Inc.
Mr. Baireuther was elected Senior Vice President and Chief Financial
Officer in June 1996 and appointed Executive Vice President and Chief Financial
Officer in January 2000. From September 1994 until June 1996, he was Senior Vice
President - Chief Financial Officer at DAC Vision, a manufacturer and
distributor of optical supplies. From 1989 to 1994, he was Executive Vice
President - Chief Financial Officer for Eye Care Centers of America, a retail
optical superstore chain and wholly-owned subsidiary of Sears. From 1969 to
1989, Mr. Baireuther held a variety of positions with Sears including Director
of Mergers and Acquisitions, Manager of Corporate Financial Analysis and
Controller.
Mr. Boonshaft joined us in January 1996 as Vice President - Stores'
Merchandising and was named Senior Vice President - Stores in February 1998.
Prior to that, Mr. Boonshaft was with the Hecht's division of May, where his
last position was Regional Vice President - Stores from 1986 to 1995.
Mr. Goldsmith was appointed Divisional Vice President - Divisional
Merchandise Manager in February 1997 and was named Senior Vice President -
General Merchandise Manager in March 1999. From November 1992 to February 1997,
Mr. Goldsmith was with the Foley's division of May, where he held various
positions, including buyer and Director of Merchandising Analysis.
Mr. Harmon joined the Company as Senior Vice President - Sales
Promotion, Marketing and Strategic Planning in June 1997. From 1989 to 1997, Mr.
Harmon was with May, serving as Senior Vice President - Merchandise Planning of
Foley's from November 1994 to June 1997, Vice President - Merchandise Planning
of Foley's from December 1992 to October 1994, and Vice President - Assistant to
the President of Filene's from June 1989 to December 1992. Prior to that, he was
employed by McKinsey & Company for seven years.
Mr. Kellman became Senior Vice President - General Merchandise Manager
in August 1999. From November 1996 to April 1999, he was Executive Vice
President of Today's Man, Inc., and from March 1989 to June 1996 he was Senior
Vice President - Merchandising at Lord & Taylor.
Mr. Lamm was elected Senior Vice President - General Merchandise
Manager in October 1995, appointed Executive Vice President - Softlines
Merchandise in February 1998, and appointed Senior Vice President - General
Merchandise Manager in January 2000. He owned a chain of women's large size
apparel boutiques from 1988 to 1995, and from 1984 to 1988 was Senior Vice
President and General
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Merchandise Manager of Venture Stores, Inc. in St. Louis.
Mr. McIntyre joined us as Senior Vice President - Chief Information
Officer in June 1997. From 1988 to June 1997, Mr. McIntyre was Senior Vice
President - Chief Information Officer for the Cato Corporation, a women's
specialty retailer. Prior to that, he held similar positions with the Higbee
Company and Burdine's Department Store.
Mr. Sloane joined the Company as Senior Vice President - General
Merchandise Manager in February 1997. From December 1995 until February 1997, he
was Vice President - General Merchandise Manager at Dick's Clothing & Sporting
Goods, and from July 1995 until December 1995 he was Vice President - General
Merchandise Manager at McRae's Department Stores. Prior to that, Mr. Sloane was
with May for over 17 years, having most recently served as Vice
President - Merchandising at Foley's.
Mr. Tortoriello joined the Company in June 1998 as Senior Vice
President - Human Resources. From April 1995 until he joined the Company, Mr.
Tortoriello was Vice President - Organization Development at the Handleman
Company, a distributor to retailers, and from January 1993 to June 1994 he was
Senior Vice President, Human Resources at Office Max.
Messrs. Grumbacher, Gleim, Evans, Sattler and Ms. Stough have been
executive officers of The Bon-Ton for more than five years.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Common Stock is traded on the Nasdaq Stock Market (symbol: BONT).
There is no established public trading market for the Class A Common Stock. The
Class A Common Stock is convertible on a share for share basis into Common
Stock. The following table sets forth the range of the sales price of the Common
Stock as furnished by Nasdaq:
1999
-----------------------
HIGH LOW
---- ---
1st Quarter $ 8.125 $ 4.500
2nd Quarter 6.719 5.438
3rd Quarter 5.688 3.625
4th Quarter 6.375 3.438
1998
-----------------------
HIGH LOW
---- ---
1st Quarter $ 18.000 $ 13.750
2nd Quarter 17.625 11.250
3rd Quarter 14.000 6.000
4th Quarter 9.250 6.000
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On March 24, 2000, there were approximately 322 shareholders of record
of Common Stock and five shareholders of record of Class A Common Stock.
We have not paid cash dividends since our initial public offering in
September 1991 and do not anticipate paying any cash dividends in the
foreseeable future. The Company intends to retain its earnings, if any, for the
operation and expansion of the business. The payment and rate of future
dividends, if any, are subject to the discretion of the Board of Directors and
will depend upon earnings, financial condition, capital requirements,
contractual restrictions under current indebtedness and other factors. Our
revolving credit agreement contains restrictions on our ability to pay dividends
and make other distributions.
ITEM 6. SELECTED FINANCIAL DATA.
Item 6 is hereby incorporated by reference to the material under
"Selected Consolidated Financial and Operating Data" on page 20 of our Annual
Report, attached hereto as Exhibit 13.1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Item 7 is hereby incorporated by reference to the material under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 21 through 25 of our Annual Report, attached hereto as
Exhibit 13.2.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Item 7A is hereby incorporated by reference to the material under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 21 through 25 of our Annual Report, attached hereto as
Exhibit 13.2.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Item 8 is hereby incorporated by reference to the Report of Independent
Public Accountants, Consolidated Financial Statements and Notes thereto on pages
26 through 43 of our Annual Report, attached hereto as Exhibit 13.3.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding executive officers called for by Item 401 of
Regulation S-K is included in Part I as Item A, in accordance with General
Instruction G(3) to Form 10-K. The remainder of the information called for by
this Item will be contained in our Proxy Statement and is hereby incorporated by
reference thereto.
ITEM 11. EXECUTIVE COMPENSATION.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto (other than the
information called for by Item 402(i), (k) and (l) of Regulation S-K, which is
not incorporated herein by reference).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information called for by this Item will be contained in our Proxy
Statement and is hereby incorporated by reference thereto.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Consolidated Financial Statements -- See Item 8 above.
2. Consolidated Financial Statement Schedules -- See the Index to
Consolidated Financial Statement Schedules on page F-1.
3. The Securities and Exchange Commission allows us to "incorporate
by reference" information into this Form 10-K, which means we can
disclose important information by referring to another document
filed with the Commission. The following are exhibits to this
Form 10-K and, if incorporated by reference, we have indicated
the document previously filed with the Commission in which the
exhibit was included.
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EXHIBIT DESCRIPTION DOCUMENT IF INCORPORATED BY REFERENCE
NO.
3.1 Articles of Incorporation Exhibit 3.1 to the Report on Form 8-B, File No.
0-19517 ("Form 8-B")
3.2 Bylaws Exhibit 3.2 to Form 8-B
10.1 Shareholder's Agreement by and among the Exhibit 10.3 to Amendment No. 2 to the Registration
Company and the shareholders named therein Statement on Form S-1, File No. 33-42142 ("1991
Form S-1")
* 10.2 (a) Employment Agreement with Heywood Wilansky Exhibit 99 to the Report on Form 8-K dated March 26,
1998
* (b) The Bon-Ton Stores, Inc. Supplemental Exhibit 10.2(b) to the Registration Statement on Form
Executive Retirement Plan for Heywood Wilansky S-1, File No. 333-48811 ("1998 Form S-1")
* (c) The Bon-Ton Stores, Inc. Five Year Cash Bonus Exhibit 10.2(c) to 1998 Form S-1
Plan for Heywood Wilansky
* (d) The Bon-Ton Stores, Inc. Performance Based Stock Exhibit 4 to the Registration Statement on Form S-8,
Incentive Plan for Heywood Wilansky File No. 333-58591
* 10.3 (a) Employment Agreement with Michael L. Gleim Exhibit 10.4 to Form 8-B
* (b) First Amendment to Employment Agreement Exhibit 10.1 to the Quarterly Report on Form 10-Q for
with Michael L. Gleim the quarter ended October 31, 1998
* (c) Second Amendment to Employment Agreement with Michael
L. Gleim
* 10.4 Employment Agreement with Frank Tworecke Exhibit 10.2 to the Quarterly Report on Form 10-Q for
the quarter ended October 30, 1999
* 10.5 Form of severance agreement with certain executive Exhibit 10.14 to Form 8-B
officers
* 10.6 Supplemental Retirement Plan for James H. Baireuther
* 10.7 (a) Amended and Restated 1991 Stock Option and Exhibit 4.1 to the Registration Statement on Form S-8,
Restricted Stock Plan File No. 333-36633
* (b) Phantom Equity Replacement Stock Option Plan Exhibit 10.18 to 1991 Form S-1
10.8 Ground Leases for distribution center located in Exhibit 10.12 to 1991 Form S-1
York, Pennsylvania between the Company and M.
Thomas Grumbacher, as amended
10.9 Ground Lease for York Galleria store, York, Exhibit 10.14 to 1991 Form S-1
Pennsylvania between the Company and MBM Land
Associates Limited Partnership
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10.10 (a) Sublease of Oil City, Pennsylvania store between Exhibit 10.16 to 1991 Form S-1
the Company and M. Thomas Grumbacher
(b) First Amendment to Oil City, Pennsylvania sublease Exhibit 10.22 to Amendment No. 1 to 1991 Form S-1
(c) Corporate Guarantee with respect to Oil City, Exhibit 10.26 to Amendment No. 1 to 1991 Form S-1
Pennsylvania lease
* 10.11 The Company's Profit Sharing/Retirement Savings Exhibit 10.24 to the Annual Report on Form 10-K for the
Plan, amended and restated as of July 1, 1994 fiscal year ended January 28, 1995
10.12 (a) Amended and Restated Receivables Purchase Agreement Exhibit 10.16(a) to Amendment No. 2 to 1998 Form S-1
dated as of January 12, 1995 among The Bon-Ton
Receivables Corp., The Bon-Ton Receivables
Partnership, L.P., Falcon Asset Securitization
Corporation, The First National Bank of Chicago, and
the other financial institutions party thereto
(b) Amendment dated as of June 30, 1995 to Amended and Exhibit 10.16(b) to Amendment No. 1 to 1998 Form S-1
Restated Receivables Purchase Agreement
(c) Amendment dated as of October 29, 1999 to Amended and Exhibit 10.1 to the Quarterly Report on Form 10-Q for
Restated Receivables Purchase Agreement the quarter ended October 30, 1999
* 10.13 Management Incentive Plan and Addendum to Management Exhibit 10.13 to the Annual Report on Form 10-K for the
Incentive Plan fiscal year ended February 1, 1997 ("1996 Form 10-K")
* 10.14 The Bon-Ton Stores, Inc. Long-Term Incentive Plan For Exhibit 10.14 to 1996 Form 10-K
Principals
10.15 (a) Credit Agreement dated as of April 15, 1997 among the Exhibit 10.1 to the Quarterly Report on Form 10-Q for
Company, Adam, Meldrum & Anderson Co., Inc., and The the quarter ended May 3, 1997
Bon-Ton Stores of Lancaster, Inc., the Other Credit
Parties Signatory thereto, the Lenders Signatory
thereto from time to time, the First National Bank of
Boston and General Electric Capital Corporation
(b) First Amendment to Credit Agreement Exhibit 10.3(b) to 1998 Form S-1
(c) Second Amendment to Credit Agreement Exhibit 10.3(c) to 1998 Form S-1
(d) Third Amendment to Credit Agreement Exhibit 10.3(d) to 1998 Form S-1
(e) Fourth Amendment to Credit Agreement Exhibit 10.2 to the Quarterly Report on Form 10-Q for
the quarter ended October 31, 1998
(f) Fifth Amendment to Credit Agreement Exhibit 10.14(f) to the Annual Report on Form 10-K for
the fiscal year ended January 30, 1999
(g) Sixth Amendment to Credit Agreement
15
16
13.1 Page 20 of the Annual Report.
13.2 Pages 21 through 25 of the Annual Report.
13.3 Pages 26 through 43 of the Annual Report.
21. Subsidiaries of The Bon-Ton.
23. Consent of Arthur Andersen LLP.
27. Financial Data Schedule - Year ended January 29, 2000
(b) Reports on Form 8-K filed during the fourth quarter.
None
- ------------------------------
* Constitutes a management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned.
THE BON-TON STORES, INC.
Dated: April 14, 2000 By: /s/ Heywood Wilansky
---------------------------
Heywood Wilansky
President and
Chief Executive Officer
16
17
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Heywood Wilansky President, Chief Executive April 14, 2000
-------------------------------------- Officer and Director
Heywood Wilansky (principal executive officer)
/s/ M. Thomas Grumbacher Chairman of the Board April 14, 2000
-------------------------------------- and Director
M. Thomas Grumbacher
/s/ Samuel J. Gerson Director April 14, 2000
--------------------------------------
Samuel J. Gerson
/s/ Michael L. Gleim Vice Chairman, Chief April 14, 2000
-------------------------------------- Operating Officer
Michael L. Gleim and Director
/s/ Lawrence J. Ring Director April 14, 2000
--------------------------------------
Lawrence J. Ring
/s/ Robert C. Siegel Director April 14, 2000
------------------------------------
Robert C. Siegel
/s/ Leon D. Starr Director April 14, 2000
--------------------------------------
Leon D. Starr
/s/ Frank Tworecke Vice Chairman, Chief April 14, 2000
-------------------------------------- Merchandising Officer
Frank Tworecke and Director
/s/ Leon F. Winbigler Director April 14, 2000
--------------------------------------
Leon F. Winbigler
/s/ Thomas W. Wolf Director April 14, 2000
--------------------------------------
Thomas W. Wolf
17
18
/s/ James H. Baireuther Executive Vice President April 14, 2000
-------------------------------------- and Chief Financial Officer
James H. Baireuther (principal financial and
accounting officer)
18
19
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS .............................. F-2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS ....................... F-3
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Bon-Ton Stores, Inc.:
We have audited in accordance with auditing standards generally
accepted in the United States, the consolidated financial statements included in
The Bon-Ton Stores, Inc.'s annual report incorporated by reference in this Form
10-K and have issued our report thereon dated March 3, 2000. Our audit was made
for the purpose of forming an opinion on the basic financial statements taken as
a whole. The schedule listed in the accompanying index is the responsibility of
the Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
Philadelphia, PA
March 3, 2000
F-2
21
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
THE BON-TON STORES, INC. AND SUBSIDIARIES
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- -------- -------- -------- -------- -------- --------
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS OTHER END OF
CLASSIFICATION OF PERIOD & EXPENSES INCREASE DEDUCTIONS PERIOD
- -------------- ---------- ---------- -------- ---------- ----------
Year ended January 31, 1998:
Allowance for doubtful
accounts.................... $ 2,769,000 $ 3,549,000 (1) $ --- $ (4,341,000)(2) $ 1,977,000
Reserve for store closing........ $ 6,984,000 $ --- $ --- $ (1,513,000)(3) $ 5,471,000
Year ended January 30, 1999:
Allowance for doubtful
accounts.................... $ 1,977,000 $ 8,851,000 (1) $ --- $ (7,136,000)(2) $ 3,692,000
Reserve for store closing........ $ 5,471,000 $ --- $ --- $ (2,663,000)(3) $ 2,808,000
Year ended January 29, 2000:
Allowance for doubtful
accounts.................... $ 3,692,000 $ 7,038,000 (1) $ --- $ (7,563,000)(2) $ 3,167,000
Reserve for store closing........ $ 2,808,000 $ (2,492,000)(4) $ --- $ (86,000)(3) $ 230,000
- -------------------
NOTES:
(1) Provision for loss on credit sales.
(2) Uncollectible accounts, written off, net of recoveries.
(3) Store closing expenses, net of monies received from asset liquidation.
(4) Restructuring income, relating to the lease termination as discussed in
Note 16 of the financial statements.
F-3
22
EXHIBIT INDEX
Exhibit Description
- ------- -----------
10.3(c) Second Amendment to Employment Agreement with Michael L. Gleim.
10.6 Supplemental Retirement Plan for James H. Baireuther.
10.15(g) Sixth Amendment to Credit Agreement.
13.1 Page 20 of the Company's Annual Report.
13.2 Pages 21 through 25 of the Company's Annual Report.
13.3 Pages 26 through 43 of the Company's Annual Report.
21. Subsidiaries of the Registrant
23. Consent of Arthur Andersen LLP
27. Financial Data Schedule - Year Ended January 29, 2000