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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
February 2, 2002 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 April 5, 2002, the aggregate market value of the voting stock
held by non-affiliates of the Registrant was approximately $38,671,578, based
upon the closing price of $4.40 per share.*
As of April 5, 2002, there were 12,472,456 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 the 2001 Annual Report to security holders
("Annual Report").
Part III - Portions of the Proxy Statement for the 2002 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.
1
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 2001 is a reference to the
fiscal year ended February 2, 2002).
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
operates 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 73 stores in secondary markets - 36 stores in Pennsylvania, 26
stores 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 apparel 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 60.7% of sales in 2001. The following chart illustrates sales by
product category for 2001, 2000 and 1999:
MERCHANDISE CATEGORY 2001 2000 1999
- -------------------- ------ ------ ------
Women's clothing 27.5% 27.6% 27.2%
Men's clothing 16.5 18.0 18.0
Home 14.5 13.5 13.6
Cosmetics 11.1 10.9 10.5
Accessories 7.9 7.9 7.8
Children's clothing 6.8 6.9 7.1
Shoes 5.8 5.3 5.8
Intimate apparel 5.0 5.2 5.2
Junior's clothing 4.9 4.7 4.8
- -------------------- ------ ------ ------
Total 100.0% 100.0% 100.0%
====== ====== ======
2
We carry a number of highly recognized brand names, including Calvin
Klein, Cole-Haan, Estee Lauder, Jones New York, Liz Claiborne, Nautica, Nine
West, Ralph Lauren and Tommy Hilfiger, and within these brands choose
collections which balance fashion, price and selection.
We depend on our relationships with our key vendors and our ability to
purchase branded merchandise from them at competitive prices. If we lose the
support of these vendors, it could have a material adverse effect on The
Bon-Ton.
Complementing branded merchandise, our private brand merchandise
provides fashion at competitive pricing under names such as Andrea Viccaro,
Jenny Buchanan, Madison & Max 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 9.8% of 2001 sales excluding leased department 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 and
special order capability. 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.
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.
MANAGEMENT INFORMATION AND CONTROL SYSTEM
We are continuing to enhance our management information and control
system in order to expedite the flow of merchandise through the distribution
centers. This should provide improved productivity, lower labor costs and better
in-stock availability. We also installed an updated price change system.
3
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 2001, 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
2001 2000 1999
---- ---- ----
Bon-Ton credit card 52% 48% 47%
Visa, Mastercard 24 26 25
Cash or check 24 26 28
---- ---- ----
Total 100% 100% 100%
==== ==== ====
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.
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.; from specialty stores; and, to a lesser extent, 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, gives us
a competitive advantage as we focus on secondary markets as our primary area of
operation.
4
ASSOCIATES
As of February 2, 2002, we had approximately 3,600 full-time and 5,100
part-time associates. We 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.
EXECUTIVE OFFICERS
The Executive Officers of the Company are:
NAME AGE POSITION
- --------------------------- --- --------
Tim Grumbacher 62 Chairman of the Board and Chief Executive Officer
James H. Baireuther 55 Vice Chairman and Chief Administrative Officer and Director
Frank Tworecke 55 Vice Chairman and Chief Merchandising Officer and Director
Lynn C. Derry 46 Senior Vice President - General Merchandise Manager
John S. Farrell 56 Senior Vice President - Stores
Robert A. Geisenberger 41 Senior Vice President - General Merchandise Manager
William T. Harmon 47 Senior Vice President - Sales Promotion and Marketing
Patrick J. McIntyre 57 Senior Vice President - Chief Information Officer
Jeffrey D. Moore 35 Senior Vice President - General Merchandise Manager
Keith E. Plowman 44 Senior Vice President - Finance
Ryan J. Sattler 57 Senior Vice President - Human Resources and Operations
Mr. Grumbacher has been Chairman of the Board for more than five years,
and has served as Chief Executive Officer since June 2000.
Mr. Baireuther has been Vice Chairman and Chief Administrative Officer
since September 2001. From February 2000 to September 2001, he was Executive
Vice President - Chief Financial Officer, and for more than three years prior to
that time he was Senior Vice President - Chief Financial Officer.
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.
5
Ms. Derry was appointed Senior Vice President - General Merchandise
Manager in February 2001. For more than four years prior to that time, Ms. Derry
was a Divisional Merchandise Manager for The Bon-Ton.
Mr. Farrell was appointed Senior Vice President - Stores in June 2000.
For more than four years prior to that time, Mr. Farrell was Vice President -
Stores for The Bon-Ton.
Mr. Geisenberger was appointed Senior Vice President - General
Merchandise Manager in July 2000. For more than four years prior to that time,
Mr. Geisenberger was a Divisional Merchandise Manager for The Bon-Ton.
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 The May Department Stores Company, serving in various executive
positions.
Mr. McIntyre joined The Bon-Ton 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.
Mr. Moore was appointed Senior Vice President - General Merchandise
Manager in February 2001. He joined the Company as Vice President - Divisional
Merchandise Manager in July 1998. From July 1990 to 1998, Mr. Moore was with
Lord & Taylor, most recently as the divisional merchandise manager for men's
clothing and furnishings.
Mr. Plowman was appointed Senior Vice President - Finance in September
2001. From May 1999 to September 2001, he was Vice President - Controller, and
from August 1997 to May 1999 he was Divisional Vice President - Controller.
Prior to that, he was controller for the York Group, Inc., a manufacturing
concern.
Mr. Sattler was appointed Senior Vice President - Human Resources and
Operations in June 2000. For more than four years prior to that time, Mr.
Sattler was Senior Vice President - Operations.
CAUTIONARY STATEMENTS RELATING TO FORWARD-LOOKING INFORMATION
The Company and its representatives may, from time to time, make
written or verbal forward-looking statements. Those statements relate to
developments, results, conditions or other events the Company expects or
anticipates will occur in the future. Without limiting the foregoing, those
statements may relate to future revenues, earnings, store openings, market
conditions and the competitive environment. Forward-looking statements are based
on management's then-current views and assumptions and, as a result, are subject
to risks and uncertainties that could cause actual results to differ materially
from those projected.
6
All forward-looking statements are qualified by the following which
contain several of the important factors that could cause actual results to
differ materially from those predicted by the forward-looking statements:
Competitive Pressures
Our retail business is highly competitive. We compete for customers,
employees, locations, products, services and other important items necessary for
the successful operation of our business with local, regional and national
retailers. Those competitors, some of which have greater financial and other
resources than those of the Company, include department stores, specialty
apparel stores, outlet stores, discount stores, general and mass merchandisers,
mail-order and electronic commerce retailers, and other forms of retail
commerce.
Customer Trends
It is difficult to predict what merchandise consumers will want. A
substantial part of our business is dependent on our ability to make correct
trend decisions for a wide variety of goods and services. Failure to accurately
predict constantly changing consumer tastes, preferences, spending patterns and
other lifestyle decisions could adversely affect short-term results and
long-term relationships with our customers.
Credit Operations
Sales of merchandise and services are facilitated by the Company's
credit card operations. These credit card operations also generate additional
revenue from fees related to extending credit. Our ability to extend credit to
our customers depends on many factors, including compliance with federal and
state laws which may change from time to time. In addition, changes in credit
card use, payment patterns and default rates may result from a variety of
economic, legal, social and other factors that we cannot control or predict with
certainty. Changes that adversely affect our ability to extend credit and
collect payments could negatively affect our results and financial condition.
General Economic Conditions
General economic factors that are beyond our control influence the
Company's forecasts and directly affect performance. These factors include
interest rates, recession, inflation, deflation, consumer credit availability,
consumer debt levels, tax rates and policy, unemployment trends and other
matters that influence consumer confidence and spending. Increasing volatility
in financial markets may cause these factors to change with a greater degree of
frequency and magnitude.
Product Sourcing
The products we sell are sourced from a wide variety of domestic and
international vendors. Our ability to find qualified vendors and access products
in a timely and efficient manner is a significant challenge which is typically
even more difficult with respect to goods sourced outside of the United
7
States. Trade restrictions, tariffs, currency exchange rates, transport capacity
and costs, and other factors significant to this trade are beyond our control
and could adversely affect our business.
Advertising and Marketing Programs
The Company spends extensively on advertising and marketing. Our
business depends on high customer traffic in our stores and effective marketing.
If our advertising and marketing efforts are not effective, this could
negatively affect our results.
Inventory Control
The Company's merchants focus on inventory levels and balance these
levels with plans and trends. Excess inventories could result in significant
markdowns, which could adversely affect our results.
Cost Containment
The Company's performance depends on appropriate management of its
expense structure, including its selling, general and administrative costs. The
Company is continuously focused on reducing expenses as a percent of sales. The
Company's failure to meet its expense budget or to appropriately reduce expenses
during a weak sales season could adversely affect our results.
Other Factors
Other factors that could cause actual results to differ materially from
those predicted include: weather, changes in the availability or cost of
capital, the availability of suitable new store locations on acceptable terms,
shifts in seasonality of shopping patterns, work interruptions, the effect of
excess retail capacity in our markets, material acquisitions or dispositions, or
adverse results in material litigation.
The foregoing list of important factors is not exclusive, and the
Company does not undertake to revise any forward-looking statement to reflect
events or circumstances that occur after the date the statement is made.
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.
8
The following table sets forth the number of stores at the beginning
and end of each of the last five years:
Fiscal Year 2001 2000 1999 1998 1997
- ----------- ---- ---- ---- ---- ----
Number of stores:
Beginning of year 73 72 65 64 64
Additions 0 1 7 2 0
Closings 0 0 0 (1) 0
---- ---- ---- ---- ----
End of year 73 73 72 65 64
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 operation.
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 Capital City Commons 141,200 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
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 The Mall at Steamtown 102,500 2000
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
9
APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
- ------ -------- ------- -----------
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
Newburgh Newburgh Mall 61,800 2000
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 97,700 1972
Hagerstown Valley Mall 126,000 1974
NEW JERSEY
Brick Brick Plaza 53,500 1999
Phillipsburg Phillipsburg Mall 65,000 1994
Red Bank Central Business District 33,300 1999
10
APPROXIMATE
SQUARE YEAR OPENED
MARKET LOCATION FOOTAGE OR ACQUIRED
- ------ -------- ------- -----------
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 65 of our stores and own eight stores, two of which are
subject to ground leases. We lease a total of 178,600 square feet for our
executive and administrative offices in York, Pennsylvania, lease 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.
We are a party to 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.
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 high and low
11
sales price of the Common Stock as furnished by Nasdaq:
2001 2000
---- ----
High Low High Low
---- --- ---- ---
1st Quarter $ 3.50 $ 2.12 $ 4.00 $ 2.28
2nd Quarter 3.16 2.45 2.88 1.75
3rd Quarter 3.00 1.77 2.44 1.69
4th Quarter 3.39 2.25 3.50 1.69
On April 5, 2002, there were approximately 336 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 cash dividends in the foreseeable
future. The Company intends to retain its earnings, if any, for 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 27 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 27 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
28 through 46 of our Annual Report,
12
attached hereto as Exhibit 13.3.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding executive officers is included in Part I
under the heading Executive Officers. 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 Items 402(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.
13
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.
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 Shareholders' Agreement among the Company Exhibit 10.3 to Amendment No. 2 to the Registration
and the shareholders named therein Statement on Form S-1, File No. 33-42142
("1991 Form S-1")
* 10.2 (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
with Michael L. Gleim for the quarter ended October 31, 1998
* (c) Second Amendment to Employment Agreement with Exhibit 10.3(c) to the Annual Report on Form 10-K
Michael L. Gleim for the fiscal year ended January 29, 2000
("1999 Form 10-K")
* 10.3 (a) Employment Agreement with Frank Tworecke Exhibit 10.2 to the Quarterly Report on Form 10-Q
for the quarter ended October 30, 1999
(b) First Amendment to Employment Agreement with
Frank Tworecke
* 10.4 Employment Agreement with James H. Baireuther
* 10.5 Form of severance agreement with certain Exhibit 10.14 to Form 8-B
executive officers
* 10.6 Supplemental Executive Retirement Plan Exhibit 10.2 to the Quarterly Report on Form 10-Q
for the quarter ended August 4, 2001
10.7 Consulting and Noncompetition Agreement Exhibit 10.1 to the Quarterly Report on Form 10-Q
Between the Company and Leon D. Starr for the quarter ended November 3, 2001
* 10.8 Amended and Restated 1991 Stock Option and Exhibit 4.1 to the Registration Statement on
Restricted Stock Plan Form S-8, File No. 333-36633
* 10.9 2000 Stock Incentive Plan Exhibit 10.2 to the 7/29/00 10-Q
* 10.10 Phantom Equity Replacement Stock Option Plan Exhibit 10.18 to the 1991 Form S-1
14
* 10.11 Management Incentive Plan and Addendum to Exhibit 10.13 to the Annual Report on Form 10-K
Management Incentive Plan for the fiscal year ended February 1, 1997
10.12 (a) Sublease of Oil City, Pennsylvania store Exhibit 10.16 to the 1991 Form S-1
between the Company and M. Thomas Grumbacher
(b) First Amendment to Oil City, Pennsylvania Exhibit 10.22 to Amendment No. 1 to the 1991
sublease Form S-1
(c) Corporate Guarantee with respect to Oil City, Exhibit 10.26 to Amendment No. 1 to the 1991
Pennsylvania lease Form S-1
10.13 (a) Amended and Restated Receivables Purchase Exhibit 10.16(a) to Amendment No. 2 to the 1998
Agreement dated as of January 12, 1995 Form S-1
("Receivables Purchase Agreement") 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 Exhibit 10.16(b) to Amendment No. 1 to the 1998
Receivables Purchase Agreement Form S-1
(c) Amendment dated as of October 29, 1999 to Exhibit 10.1 to the Quarterly Report on Form 10-Q
Receivables Purchase Agreement for the quarter ended October 30, 1999
(d) Amendment dated as of June 27, 2001 to Exhibit 10.1 to the Quarterly Report on Form 10-Q
Receivables Purchase Agreement for the quarter ended August 4, 2001
10.14 (a) Credit Agreement dated as of April 15, 1997 Exhibit 10.1 to the Quarterly Report on Form 10-Q
among the Company, Adam, Meldrum & Anderson for the quarter ended May 3, 1997
Co., Inc., and The 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 the 1998 Form S-1
(c) Second Amendment to Credit Agreement Exhibit 10.3(c) to the 1998 Form S-1
(d) Third Amendment to Credit Agreement Exhibit 10.3(d) to the 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 Exhibit 10.5(g) to the 1999 Form 10-K
(h) Seventh Amendment to Credit Agreement Exhibit 10.1 to the 7/29/00 10-Q
15
(i) Eighth Amendment to Credit Agreement
13.1 Page 20 of the Annual Report.
13.2 Pages 21 through 27 of the Annual Report.
13.3 Pages 28 through 46 of the Annual Report.
21. Subsidiaries of The Bon-Ton.
23. Consent of Arthur Andersen LLP.
99.1 Letter to the SEC pursuant to Temporary Rule 3T.
* Constitutes a management contract or compensatory plan or
arrangement.
(b) Reports on Form 8-K filed during the fourth quarter.
None
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 16, 2002 By: /s/ Tim Grumbacher
-----------------------
Tim Grumbacher
Chairman of the Board
Chief Executive Officer
16
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/ Tim Grumbacher Chairman of the Board April 16, 2002
- -------------------------------
Tim Grumbacher and Chief Executive Officer
/s/ James H. Baireuther Vice Chairman, Chief April 16, 2002
- -------------------------------
James H. Baireuther Administrative Officer and Director
(principal financial and
accounting officer)
/s/ Samuel J. Gerson Director April 16, 2002
- -------------------------------
Samuel J. Gerson
/s/ Michael L. Gleim Director April 16, 2002
- -------------------------------
Michael L. Gleim
/s/ Lawrence J. Ring Director April 16, 2002
- -------------------------------
Lawrence J. Ring
/s/ Robert C. Siegel Director April 16, 2002
- -------------------------------
Robert C. Siegel
/s/ Leon D. Starr Director April 16, 2002
- -------------------------------
Leon D. Starr
/s/ Frank Tworecke Vice Chairman, Chief April 16, 2002
- -------------------------------
Frank Tworecke Merchandising Officer
and Director
/s/ Leon F. Winbigler Director April 16, 2002
- -------------------------------
Leon F. Winbigler
/s/ Thomas W. Wolf Director April 16, 2002
- -------------------------------
Thomas W. Wolf
17
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS................................. F-2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS.......................... F-3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
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 to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated March 6, 2002. Our audit was
made for the purpose of forming an opinion on those 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 6, 2002
F-2
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
THE BON-TON STORES, INC. AND SUBSIDIARIES
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS END OF
CLASSIFICATION OF PERIOD & EXPENSES DEDUCTIONS PERIOD
- -------------- --------- ---------- ---------- ------
YEAR ENDED JANUARY 29, 2000:
Allowances for doubtful
accounts and sales returns.......... $ 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
YEAR ENDED FEBRUARY 3, 2001:
Allowances for doubtful
accounts and sales returns.......... $ 3,167,000 $ 7,797,000(1) $ (6,919,000)(2) $ 4,045,000
Reserve for store closing.............. $ 230,000 $ -- $ (140,000)(3) $ 90,000
YEAR ENDED FEBRUARY 2, 2002:
Allowances for doubtful
accounts and sales returns.......... $ 4,045,000 $ 7,682,000 (1) $ (8,319,000)(2) $ 3,408,000
Reserve for store closing.............. $ 90,000 $ -- $ (4,000)(3) $ 86,000
- --------------
NOTES:
(1) Provision for merchandise returns and loss on credit sales.
(2) Uncollectible accounts written off, net of recoveries.
(3) Store closing expenses, net of recoveries.
(4) Restructuring income, relating to the lease termination as discussed in
Note 16 of the financial statements.
F-3
EXHIBIT INDEX
Exhibit Description
- ------- -----------
10.3(b) First Amendment to Employment Agreement with Frank Tworecke.
10.4 Employment Agreement with James H. Baireuther.
10.14(i) Eighth Amendment to Credit Agreement.
13.1 Page 20 of the Company's Annual Report.
13.2 Pages 21 through 27 of the Company's Annual Report.
13.3 Pages 28 through 46 of the Company's Annual Report.
21. Subsidiaries of the Registrant.
23. Consent of Arthur Andersen LLP.
99.1 Letter to SEC pursuant to Temporary Rule 3T.