Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

You are cordially invited to attend our Annual Meeting of Shareholders to be held at the Company's offices, 2801 East Market Street, York, Pennsylvania on Tuesday, June 18, 2013, beginning at 9:00 a.m.

We are using the Securities and Exchange Commission rule that allows companies to furnish proxy materials over the internet. The proxy materials consist of our official notice of meeting, the proxy statement and our 2012 Annual Report. We are mailing to many of our shareholders a notice that the proxy materials, including our 2012 Annual Report, are available on our website rather than sending a paper copy of this proxy statement and our 2012 Annual Report. We believe this electronic proxy process will expedite shareholders' receipt of proxy materials, conserve valuable natural resources and reduce the Company's costs of printing and distributing proxy materials.

Your vote is important to us. Even if you plan to attend the meeting, please vote your shares by telephone or over the internet, or, alternatively, if you elect to receive a paper copy of the proxy card by mail, by signing, dating and mailing the proxy card in the postage-paid envelope provided. Instructions regarding these three methods of voting are contained in our proxy materials. If you attend the meeting, you may continue to have your shares voted as previously indicated or you may withdraw your proxy at the meeting and vote the shares in person.

The Annual Meeting of Shareholders of The Bon-Ton Stores, Inc. will be held on Tuesday, June 18, 2013, at 9:00 a.m., at the Company's offices, 2801 East Market Street, York, Pennsylvania.

Shareholders who owned shares of our stock at the close of business on April 19, 2013 may attend and vote at the meeting. You may vote by telephone or over the internet or, if you elect to receive a paper copy of the proxy card by mail, you may vote by signing, dating and mailing the proxy card in the postage-paid envelope provided. Any shareholder attending the meeting may vote in person, even if he or she has already returned a proxy card or voted by telephone or over the internet.

Please vote by telephone or over the internet as instructed on the proxy card or, if you have elected to receive a paper copy of our proxy materials by mail, complete, sign and date the proxy card as promptly as possible and return it in the envelope provided. If you vote by telephone or over the internet, do not return your proxy card.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 18, 2013

This proxy statement and the Company's Annual Report for the fiscal year ended February 2, 2013 are both available in the Investor Relations section of the Company's website at www.bonton.com.

We are providing this proxy statement to solicit your proxy for use at the Annual Meeting of Shareholders (the "meeting"), which will be held at 9:00 a.m. on Tuesday, June 18, 2013. The proxy materials, which consist of the 2012 Annual Report, the Notice of Annual Meeting, this proxy statement and the proxy card, are being made available to our shareholders on or about May 7, 2013.

The Company is furnishing proxy materials over the internet pursuant to rules adopted by the Securities and Exchange Commission (the "SEC"). We are mailing to many of our shareholders a notice that the proxy materials are available on our website. The notice provides instructions on accessing the proxy materials and submitting your proxy on-line. The notice also provides instructions for requesting paper copies of the proxy materials, which are available free of charge.

We do not anticipate that any matters will be raised at the meeting other than those described in the Notice of Annual Meeting. If any other matters come before the meeting, your proxies will be authorized to act in accordance with their best judgment.

When your proxy card is signed and returned, or you have submitted your proxy over the internet or by telephone, your shares will be voted in accordance with your instructions. If your proxy card is signed and returned without specifying choices, your shares will be voted "for" the Board nominees, "for" the approval of the compensation of the Named Executive Officers, and "for" ratification of the appointment of KPMG LLP as independent registered public accounting firm.

You may revoke your proxy before its exercise by notifying the Secretary of the Company in writing, by delivering a properly executed, later-dated proxy card, by submitting your proxy again over the internet or by telephone or by voting in person at the meeting.

Your proxy is being solicited by the Board of Directors (the "Board"). We will bear the cost of this solicitation, including the charges of brokerage houses, nominees and fiduciaries in forwarding these materials to beneficial owners. This solicitation may be made in person, by telephone or by other means of communication by our directors, officers or employees.

References in this proxy statement to a year refer to our fiscal year, which is the 52 or 53 week period ending on the Saturday nearer to January 31 of the following calendar year (for example, a reference to 2012 is a reference to the fiscal year ended February 2, 2013).

Shareholders of record at the close of business on April 19, 2013 are entitled to vote at the meeting. At that time, there were 17,396,082 shares of common stock and 2,951,490 shares of Class A common stock outstanding. The common stock and the Class A common stock vote together on all matters. Holders of common stock are entitled to one vote per share and holders of Class A common stock are entitled to ten votes per share. There are no other classes of voting securities outstanding. In the election of directors, shareholders do not have cumulative voting rights.

The presence at the meeting, in person or by proxy, of persons entitled to cast a majority of the shareholder votes will constitute a quorum.

For Proposal One, the nominees receiving a majority of the votes cast will be elected. (A majority of votes cast means that the number of votes cast "for" a director must exceed the number of votes cast "against" that director.) A proxy marked "withhold" with respect to the election of a director will not be voted as to the director indicated, but will be counted for purposes of determining whether there is a quorum.

For Proposal Two, an affirmative vote of the majority of the votes cast by shareholders present in person or represented by proxy at the meeting and entitled to vote on Proposal Two is required to

approve, on an advisory basis, the compensation of our Named Executive Officers as described in this Proxy Statement.

For Proposal Three, an affirmative vote of the majority of the votes cast by shareholders present in person or represented by proxy at the meeting and entitled to vote on Proposal Three is required to approve the ratification of the appointment of KPMG LLP as our independent registered public accounting firm.

Because your vote on Proposal Two is advisory, it will not bind the Board or the Human Resources and Compensation Committee of the Board. However, the Board and the Human Resources and Compensation Committee will review the voting results and take the results into consideration in making future determinations on executive compensation.

Abstentions and broker non-votes are counted to determine whether a quorum is present at the meeting but are not counted as a vote in favor of or against a particular matter. A "broker non-vote" occurs when a holder of record for a beneficial owner does not vote on a particular matter because the holder of record does not have discretionary voting power as to that item and has not received voting instructions from the beneficial owner.

The rules that guide how most brokers vote your stock have changed over the last several years. The rules provide that brokerage firms or other nominees may not vote your shares with respect to matters that are not "routine" under the rules. The rules now provide that the election of directors is not a "routine" matter. Accordingly, most brokerage firms or other nominees may not vote your shares with respect to the election of directors without specific instructions from you as to how your shares are to be voted. As required by Section 957 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), an advisory vote on executive compensation is also considered a non-routine matter for which brokers do not have discretionary authority to vote shares held by account holders. The ratification and appointment of our independent registered public accounting firm for 2013 is considered a "routine" matter under the rules and, therefore, brokerage firms and other nominees have the authority under the rules to vote your unvoted shares with respect to this matter if you have not furnished voting instructions within a specified period of time prior to the meeting.

If you own common stock in your own name, you are an "owner of record." This means you may direct the persons named as proxies how to vote your shares. If you fail to return your proxy, the proxies cannot vote your shares at the meeting.

If a broker, bank or other nominee holds your common stock for your benefit but not in your name, your shares are held in "street name." In that case, your bank, broker or other nominee will send you a voting instruction form to use in voting your shares. The availability of internet and

telephone voting depends on their voting processes. Please follow the voting instruction form sent to you by your bank, broker or other nominee.

If you are a participant in The Bon-Ton Stores, Inc. Retirement Contribution Plan (the "401(k) Plan"), your proxy will incorporate all shares you own through the 401(k) Plan, assuming all your shares are registered in the same name. Your proxy will serve as a voting instruction for the trustee of the 401(k) Plan. If you own shares through the 401(k) Plan and you do not vote, the 401(k) Plan trustee will vote your shares in the same proportion as shares for which instructions were received from other shareholders under the 401(k) Plan.

The NASDAQ Stock Market listing standards provide that if more than 50% of the voting power in a company is held by an individual, group or another company, the company is a "controlled" company. Bon-Ton is a "controlled" company because Tim Grumbacher, a director and Strategic Initiatives Officer of the Company, is the beneficial owner of shares of common stock and Class A common stock entitled to vote more than 50% of the votes entitled to be cast at the meeting. Mr. Grumbacher has indicated that he will vote "for" each of the nominees for director, "for" the approval of the compensation of the Named Executive Officers and "for" ratification of the appointment of KPMG LLP. Consequently, the election of each nominee for director, the approval of the compensation of the Named Executive Officers, and the ratification of the appointment of KPMG LLP are assured.

This table shows owners of 5% or more of the Class A common stock or common stock as of March 15, 2013. Each person listed has sole voting power and sole investment power as to the shares indicated unless otherwise noted.

(1): Each share of Class A common stock is convertible into one share of common stock at the holder's option. Accordingly, the number of shares of common stock for each person includes the number of shares of common stock issuable upon conversion of all shares of Class A common stock beneficially owned by such person. Also, the total number of shares of common stock outstanding for purposes of calculating percentage ownership of a person includes the number of shares of Class A common stock beneficially owned by such person.
(2): Based solely on Schedules 13G filed with the Securities and Exchange Commission by: (a) FMR, LLC on February 14, 2013, (b) Lombard Odier Asset Management (USA) Corp. on February 11, 2013 and (c) Morgan Stanley on January 30, 2013, and on Schedule 13D filed with the Securities and Exchange Commission by Gamco Investors, Inc. on March 4, 2009.
(3): Includes (a) 195,523 shares of common stock held by The Grumbacher Family Foundation, a charitable foundation of which Mr. Gleim and Tim Grumbacher are the directors, (b) 668,397 shares of common stock held by trusts for the benefit of Tim Grumbacher's children of which Messrs. Gleim and David R. Glyn are the trustees, and (c) 15,558 shares of common stock held by trusts for the benefit of Mr. Grumbacher's grandchildren of which Beth Elser, Mr. Glyn and Mr. Gleim are the trustees.. Also includes 53,367 shares owned by Cathy Gleim, Mr. Gleim's wife, and 2,300 shares which Mr. Gleim holds as custodian for his grandchildren. Mr. Gleim disclaims beneficial ownership of all shares referred to in this note. Does not include 74,433 Restricted Stock Units ("RSUs") held by Mr. Gleim. RSUs awarded in years prior to 2012 do not confer on Mr. Gleim voting or dispositive control over shares of common stock until one year following termination of his Board service and RSUs awarded in 2012 and thereafter do not confer voting or dispositive control until three months following termination of his Board service, at which time shares of common stock are issued on a one-share for one-unit basis.

This table shows, as of March 15, 2013, the holdings of Byron L. Bergren, our Chief Executive Officer through February 6, 2012; Brendan L. Hoffman, our Chief Executive Officer since February 7, 2012; our Chief Financial Officer; the three other most highly compensated executive officers during 2012 (collectively, the "Named Executive Officers"); each director; and all directors and executive officers as a group. Each person listed has sole voting power and sole investment power with respect to the shares indicated unless otherwise noted.

	Class A Common Stock					Common Stock(1)

Name	Shares Beneficially Owned		Percent of Class			Shares Beneficially Owned(2)			Percent of Class
Tim Grumbacher		2,951,490		100.00	%		4,619,424			23.39	%
Michael L. Gleim		—					994,652	(3)		5.92	%
Brendan L. Hoffman		—					511,060			3.04	%
Byron L. Bergren		—					440,756			2.62	%
Anthony J. Buccina		—					306,944			1.81	%
Stephen R. Byers		—					206,759			1.22	%
Keith E. Plowman		—					187,907	(4)		1.11	%
Lucinda M. Baier		—					10,000			*
Philip M. Browne		—					8,600			*
Marsha M. Everton		—					860			*
Todd C. McCarty		—					—			*
Jeffrey B. Sherman		—					—			*
All directors and executive officers as a group (14 persons)		2,951,490		100.00	%		7,168,719	(5)		35.75	%

The Board proposes the following nominees for election as directors to hold office until the 2014 Annual Meeting of Shareholders and until their respective successors have been elected. Each is currently a director and has agreed to serve if elected. Should a nominee become unable or decline to serve before the meeting, the proxies may vote for a substitute recommended by the Governance and Nominating Committee of the Board, unless the Board reduces the number of directors.

Byron L. Bergren and Marsha M. Everton are not nominees for re-election as directors this year. Mr. Bergren served as President and Chief Executive Officer of Bon-Ton from August 2004 to February 2012, when he retired as President and Chief Executive Officer and was named Chairman of the Board of Directors. He has served as a director since 2004. Ms. Everton has been a director since 2003. The Company thanks Mr. Bergren and Ms. Everton for their service to the Company.

Ms. Baier has served as Executive Vice President of Navigant Consulting, Inc., a specialized, global expert services firm, since February 2013, and became Chief Financial Officer in March 2013. She had been Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Central Parking System, Inc., a leading firm in parking management and marketing, from August 2011 to October 2012, having previously served as Senior Vice President and Chief Financial Officer since September 2010. Prior to that, Ms. Baier was Executive Vice President and Chief Financial Officer of Movie Gallery, Inc., a home entertainment specialty retailer, from July 2008 to February 2010. In February 2010, Movie Gallery, Inc. filed for reorganization under Chapter 11 of the Bankruptcy Code. Ms. Baier served from 2006 until July 2008 as Chief Financial Officer of World Kitchen, LLC.

In determining that Ms. Baier should serve as a director of the Company, the Board considered her significant experience as a chief financial officer of a public company, her expertise and background with regard to accounting and financial matters, as well as her expertise in financial and strategic planning, regulatory compliance and reporting and corporate financing.

Mr. Browne has served as Managing Director, Finance and Administration, of Franklin Square Capital Partners, a sponsor and distributor of investment products, since April 2012. Prior to that, he was Senior Vice President and Chief Financial Officer of Advanta Corp., one of the nation's largest credit card issuers in the small business market, from June 1998 to March 2011. In November 2009, Advanta Corp. filed for reorganization under Chapter 11 of the Bankruptcy Code. Prior to that, Mr. Browne was a partner at Arthur Andersen LLP, where he was employed for more than 15 years. Mr. Browne serves on the national Board of Directors and as the treasurer of Living Beyond Breast Cancer.

In determining that Mr. Browne should serve as a director of the Company, the Board considered his significant experience as a chief financial officer of a public company, his expertise and background with regard to accounting and financial matters, as well as his expertise in financial and strategic planning, regulatory compliance and reporting and corporate financing.

Mr. Gleim has been the Company's Lead Director since January 2010. He was Vice Chairman and Chief Operating Officer of Bon-Ton from December 1995 to February 2002. From 1991 to December 1995 he was Senior Executive Vice President of Bon-Ton, and from 1989 to 1991 he was Executive Vice President of Bon-Ton.

In determining that Mr. Gleim should serve as a director of the Company, the Board considered his numerous years of executive leadership with the Company and management experience in the department store industry as well as his expertise in strategic planning, business expansion, financing and corporate governance.

Mr. Grumbacher served as Executive Chairman of the Board of Directors of Bon-Ton from February 2005 to February 2012, when he was named Chairman Emeritus and Strategic Initiatives Officer. He served as Chairman of the Board of Directors of Bon-Ton from August 1991 to February 2005. He was Chief Executive Officer of Bon-Ton from 1985 to 1995 and in positions of senior management since 1977.

In determining that Mr. Grumbacher should serve as a director of the Company, the Board considered his numerous years of executive leadership with the Company and management experience in the department store industry as well as his expertise in strategic planning, business expansion, financing and corporate governance and his significant ownership interest in the Company.

Mr. Hoffman became President and Chief Executive Officer of Bon-Ton on February 7, 2012. Mr. Hoffman served as President and Chief Executive Officer of Lord & Taylor, a division of Hudson's Bay Trading Company, from October 2008 to January 2012. Prior to that, Mr. Hoffman served six years as President and Chief Executive Officer of Neiman Marcus Direct, where he oversaw the growth of neimanmarcus.com and the launch and growth of bergdorfgoodman.com. Mr. Hoffman has served as a director of Pier 1 Imports, Inc. since January 2011.

In determining that Mr. Hoffman should serve as a director of the Company, the Board considered his current role as President and Chief Executive Officer, his numerous years of executive leadership in the retail department store industry as well as his expertise in strategic planning, business expansion, merchandising, marketing, financing and corporate governance.

Mr. McCarty has served as Senior Vice President, Global Human Resources of Las Vegas Sands Corporation since September 2012. He had been Senior Vice President, Human Resources of The New York Times Company from December 2009 to September 2012. Prior to that, Mr. McCarty served as Senior Vice President, Global Human Resources of Readers Digest Association, Inc. from March 2008 to December 2009. In August 2009, Readers Digest Association, Inc. filed for reorganization under Chapter 11 of the Bankruptcy Code. From 2005 to February 2008, he served as Senior Vice President—Human Resources of Rite Aid Corporation.

In determining that Mr. McCarty should serve as a director of the Company, the Board considered his many years of experience as a senior executive in the field of human resources, including specialized knowledge beneficial to the Board of Directors in its formulation of compensation strategies and objectives.

Mr. Sherman has been the President of The Echo Design Group, Inc., a company that designs, manufactures and distributes accessories and home products, since 2010. From 2008 to 2010, he served as President and Chief Executive Officer of Hudson's Bay Trading Company, a retailer with over 600 retail locations in Canada and the United States. Prior to that, Mr. Sherman served as President and Chief Operating Officer of the Polo Retail Group of Ralph Lauren Corporation, as Chief

Executive Officer of Limited Stores and in positions of increasing responsibility for over thirty years with Federated Department Stores, including President and Chief Operating Officer of Bloomingdale's. Mr. Sherman serves on the Board of Directors of United Way, New York City.

Mr. Sherman was recommended to the Board by Mr. Hoffman, the Company's President and Chief Executive Officer. In determining that Mr. Sherman should serve as a director of the Company, the Board considered his numerous years of executive leadership with companies in the department store and retail industries as well as his expertise in strategic planning, business expansion, merchandising, marketing, distribution, brand development and financing.

Each of the committee charters and the Code of Ethical Standards and Business Practices is available on our website at www.bonton.com by clicking on "Investor Relations," then "Corporate Governance."

The Company maintains a Code of Ethical Standards and Business Practices (the "Code of Conduct") that sets forth the Company's policies and expectations. The Code of Conduct, which applies to every Company director, officer and employee, addresses a number of topics, including conflicts of interest, relationships with others, corporate payments, disclosure policy, compliance with laws, corporate opportunities and the protection and proper use of the Company's assets. The Code of Conduct meets the NASDAQ Stock Market's requirements for a code of conduct as well as the SEC's definition of a code of ethics applicable to the Company's senior officers.

The Board of Directors has determined that each of Messrs. Browne, Gleim, McCarty and Sherman and Ms. Baier is an "independent" director as that term is defined in the listing standards of the NASDAQ Stock Market. In determining independence, the Board of Directors carefully reviewed any possible related party transactions between the Company or any of its affiliates and each of the independent directors and determined there were no transactions that would compromise such director's independence. As discussed above, the Company is a "controlled company" and, as such, the Company may elect under Rule 5615(c) of the listing standards of the NASDAQ Stock Market not to have a majority of the Board consist of independent directors.

Since 2004, the Company has chosen to separate the roles of Chairman of the Board and Chief Executive Officer. The Company believes that this structure allows the Chairman of the Board to focus on leadership of the Board and to ensure that the Board fulfills its duties and responsibilities while the Chief Executive Officer focuses on leadership of the Company, including its strategic direction, the quality of its management and continuous operational improvement to enhance shareholder value. In addition, beginning January 2010, the Company instituted the position of Lead Director. The role of the Lead Director is described on page 13.

During 2012, the Board of Directors held ten meetings and took action by unanimous consent without a meeting two times. No director attended fewer than 75% of the total number of meetings of the Board and committees on which he or she served while in office. At each meeting of the Board of Directors, the independent directors also meet in executive session, at which only the independent directors are present.

The Board has an Audit Committee, a Human Resources and Compensation Committee, a Governance and Nominating Committee and an Executive Committee. The primary functions of each committee, its members, the number of times the committee met during 2012, and certain other information regarding each committee, are described below. The membership of each committee is as of the date of this proxy statement.

The members of the Audit Committee are Philip M. Browne (Chair), Lucinda M. Baier and Todd C. McCarty. The Board has determined that each of Mr. Browne and Ms. Baier is an "audit committee financial expert" as defined by applicable SEC rules and the listing standards of the NASDAQ Stock Market. The Audit Committee is comprised entirely of "independent" directors as defined by applicable SEC rules and NASDAQ Stock Market listing standards and operates under a charter that was adopted by the Board. This charter is posted in the Investor Relations section of the Company's website at www.bonton.com.

The Audit Committee appoints and establishes the compensation for the Company's independent registered public accounting firm and approves in advance all engagements with the independent registered public accounting firm to perform audit or non-audit services. The Audit Committee oversees (1) the integrity of the Company's financial statements, (2) the Company's system of internal control over financial reporting and disclosure controls, (3) the Company's compliance with legal and regulatory requirements, (4) the qualification, independence and performance of the Company's independent registered public accounting firm and (5) the performance of the Company's internal audit function. The Audit Committee also oversees the financial reporting processes of the Company and the audits of the Company's financial statements. To assist it in carrying out its responsibilities, the Audit Committee is authorized to retain the services of independent advisors.

The members of the Human Resources and Compensation Committee (referred to in this proxy statement as the "HRCC") are Marsha M. Everton (Chair), Todd C. McCarty and Jeffrey B. Sherman. The HRCC is comprised entirely of "independent" directors, as defined by the listing standards of the NASDAQ Stock Market, and all members are "non-employee directors" as defined by applicable SEC rules and "outside directors" as defined by applicable Internal Revenue Service Rules. The HRCC operates under a charter that was adopted by the Board. This charter is posted in the Investor Relations section of the Company's website at www.bonton.com.

The HRCC reviews and evaluates the Company's overall compensation strategy to ensure that it promotes shareholder interests, supports the Company's strategic objectives and provides for appropriate rewards and incentives for the Company's management and employees. The HRCC reviews, evaluates and provides recommendations to the Board regarding the plans, policies and programs relating to the compensation of the Company's executive officers, the general compensation

policies of the Company, succession planning, management development, and termination policies and arrangements. In addition, the HRCC reviews and approves the structure of the Company's bonus plans, administers the Company's stock incentive plans and oversees the Company's retirement, defined benefit and health and welfare plans.

At the end of each year, the HRCC evaluates the performance of the President and Chief Executive Officer and the other executive officers of the Company with respect to approved goals and objectives, and establishes the compensation levels for the executive officers, including base pay, annual incentive compensation, long-term incentive plan participation, entrance into an agreement regarding employment and any special or supplemental benefits. The HRCC also establishes compensation levels for any newly-hired executive officer. (See "Compensation Discussion and Analysis" on page 21 for additional discussion of the elements of executive officer compensation.) The compensation of the President and Chief Executive Officer is also reviewed by the full Board. The HRCC annually reviews with the President and Chief Executive Officer the performance of the other executive officers and approves their compensation for the next year. The HRCC establishes the corporate goals under the Company's Cash Bonus Plan and Management Incentive Plan and has the authority to determine whether the requirements for receipt of a bonus should be waived.

The HRCC may delegate its authority to a subcommittee comprised solely of its members. To assist it in carrying out its responsibilities, the HRCC is authorized to retain the services of advisors. During 2012, the HRCC engaged Meridian Compensation Partners, LLC ("Meridian") to provide counsel on executive compensation matters. The nature and scope of services rendered by Meridian were:

The HRCC did not direct Meridian to perform the above services in any particular manner or under any particular method. The HRCC has the final authority to hire and terminate the consultant, and the HRCC evaluates the consultant periodically.

(See "Compensation Discussion and Analysis" on page 21 for additional discussion of the processes and procedures for the consideration and determination of executive officer compensation.)

During 2012, the HRCC met eight times and took action by unanimous consent without a meeting once.

The members of the Governance and Nominating Committee (referred to in this proxy statement as the "Governance Committee") are Michael L. Gleim (Chair), Marsha M. Everton and Tim Grumbacher. As discussed above, the Company is a "controlled company" and, as such, the Company may elect, under Rule 5615(c) of the listing standards of the NASDAQ Stock Market, not to have a Governance Committee comprised solely of independent directors.

The Governance Committee reviews, develops and makes recommendations to the Board regarding the Company's governance processes and procedures. It also recommends candidates for election to fill vacancies on the Board, including renominations of members whose terms are due to expire. The Governance Committee is also responsible for making recommendations to the Board regarding the compensation of its non-employee members. The Governance Committee operates under

a charter that was adopted by the Board. This charter is posted in the Investor Relations section of the Company's website at www.bonton.com.

The members of the Executive Committee are Byron L. Bergren (Chair), Michael L. Gleim and Tim Grumbacher. The Executive Committee has the authority to act in place of the Board on specified matters.

The Executive Committee has the following responsibilities: to propose the Board meeting schedule for each year and to refine the agenda prior to each Board meeting, to keep the members of the Board informed of pertinent issues that arise between regularly scheduled quarterly Board meetings and to act as a sounding board for the Company's Chief Executive Officer when appropriate. The Executive Committee Charter under which the Executive Committee operates was adopted by the Board and is posted in the Investor Relations section of the Company's website at www.bonton.com.

The Ad Hoc Leadership Transition Committee, which reviews, develops and makes recommendations to the Board regarding Chief Executive Officer succession, was established by the Board in May 2008 and completed its initial charge in November 2008. At the behest of the Board, the Committee was reconstituted in December 2009. The members of the Ad Hoc Leadership Transition Committee are Michael L. Gleim (Chair), Philip M. Browne and Todd C. McCarty. The Ad Hoc Leadership Transition Committee met four times during 2012 and completed its duties upon the appointment of Mr. Hoffman as Chief Executive Officer in the first quarter of 2012.

In January 2010, the Board elected Michael L. Gleim as Lead Director of the Board. The primary duties of the Lead Director are, among other things, to:

The Board as a whole has responsibility for risk oversight. The oversight responsibility of the Board and the Board committees is facilitated by management reporting processes designed to provide information to the Board concerning the identification, assessment and management of critical risks and management's risk mitigation strategies and practices. These areas of focus include compensation, financial (including accounting, reporting, credit, liquidity and tax), operational, legal, regulatory, environmental, political and strategic risks. The full Board (or the appropriate Board committee), in concert with the appropriate management within the Company, reviews management reports to formulate risk identification, management and mitigation strategies. When a Board committee initially reviews management reports, the Chairman of the relevant Board committee briefs the full Board on the specifics of the matter at the next Board meeting. Additional review or reporting of risks is conducted as needed or as requested by the Board or relevant Board committee. This process enables the Board to coordinate the risk oversight role, particularly with respect to risks spanning more than one operational area.

The Governance Committee considers any appropriate recommendations for candidates for the Board. Any candidate recommended for the Board shall, at a minimum, possess a background that includes a solid education, sufficient business, professional or academic experience and the requisite reputation, character, integrity, skills, judgment and temperament and such other relevant characteristics, which, in the Governance Committee's view, have prepared him or her for dealing with the multi-faceted financial, business and other issues that confront a board of directors of a corporation with the size, complexity and reputation of the Company. The Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Candidates for Board membership are reviewed in the context of the current Board composition, the operating requirements of the Company and the long-term interests of the Company's shareholders. The Governance Committee seeks to ensure that backgrounds and qualifications of the Company's directors, as a group, provide significant breadth of experience, knowledge and abilities that will assist the Board in fulfilling its responsibilities to shareholders.

Although the Governance Committee does not have a formal written policy regarding diversity in composition of the Board, the Governance Committee does consider the contribution of a candidate to the overall diversity of the Board. Diversity is considered broadly and includes variety in personal and professional backgrounds, experience and skills, geographic location, as well as differences in gender, race, ethnicity and age.

Each candidate for Board membership commits to participate fully in Board activities, including active membership on at least one Board committee and attendance at, and participation in, meetings of the Board and the Board committees of which he or she is a member.

When considering whether candidates for Board membership have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively, the Governance Committee focuses on the information provided in each of the Director's individual work histories set forth on pages 7 through 9.

The Governance Committee will consider shareholder recommendations for candidates for the Board from any shareholder who has been a continuous record owner of at least 3% of the common stock of the Company for at least one year prior to submission of the recommendation and who provides a written statement that the shareholder intends to continue share ownership through the date of the meeting at which directors are to be elected. Any such shareholder recommendation should be sent to the Governance and Nominating Committee, c/o Office of the Secretary, The Bon-Ton

Stores, Inc., 2801 East Market Street, York, Pennsylvania 17402. No shareholder recommendations have been received since the June 12, 2012 shareholder meeting.

In addition, the Governance Committee considers potential candidates recommended by current directors, Company officers, employees and others. When appropriate, the Governance Committee may retain executive recruitment firms to assist in identifying suitable candidates. The Governance Committee screens all potential candidates in the same manner regardless of the source of the recommendation.

In re-nominating incumbent directors to continue for an additional term, the Governance Committee determines whether the incumbent director is willing to stand for re-election. If so, the Governance Committee evaluates his or her performance in office to determine suitability for continued service, taking into consideration the value of continuity and familiarity with the Company's business.

The Company has adopted a policy that encourages Board members who reside in the York area to attend the annual meeting of shareholders. Four of the (then) eight members of the Board attended the 2012 Annual Meeting of Shareholders.

Any shareholder who wishes to communicate with the Board of Directors or any individual director may do so by directing correspondence, which prominently displays the fact that it is a shareholder-board communication, to such director or directors, c/o Office of the Secretary, The Bon-Ton Stores, Inc., 2801 East Market Street, York, Pennsylvania 17402. Until and unless a procedure is adopted by a majority of the independent members of the Board whereby it may be deemed unnecessary or inappropriate to relay certain shareholder communications to the appropriate parties, all shareholder communications will be relayed to the intended director or directors.

During 2012, Messrs. Grumbacher and Hoffman were employees of the Company and were not paid any separate compensation for serving as directors. Messrs. Grumbacher and Hoffman are the only current employees who serve as directors.

Each non-employee director receives both cash compensation and stock compensation comprised of the following:

The RSUs issued to directors are distributable after the applicable period following termination of Board service. The current grant documents provide for a period of three months following termination of Board service.

One of the Company's non-employee directors, currently Lucinda M. Baier, serves as the Board's representative on the committee that oversees the Company's retirement contribution plan. For her service on this committee, Ms. Baier receives $5,000 annually.

In January 2010, the Board elected Mr. Gleim as Lead Director of the Board. For his service as Lead Director, Mr. Gleim receives a supplemental fee of $140,000 per year.

In February 2012, the Board elected Mr. Bergren as Chairman of the Board. For his service as Chairman of the Board, Mr. Bergren receives a supplemental fee of $170,000 per year.

During 2012, in recognition of the significant additional work performed by Ms. Everton as chair of the HRCC in the process of selecting a new Chief Executive Officer and negotiating the terms of such employment, the Board authorized an additional cash payment to Ms. Everton of $20,000.

Directors may defer all or any part of their cash compensation into additional RSUs.

The following table presents the compensation provided by the Company during 2012 to each non-employee director:

(1)

The amounts reported in this column reflect the aggregate grant date fair value of RSUs computed in accordance with Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 718, Compensation—Stock Compensation ("ASC 718") for RSUs granted on June 12, 2012 to each non-employee director and on August 23, 2012 to Mr. Bergren as prorated compensation in recognition of his service as a director from February to June 2012. The amounts do not reflect compensation actually received by the non-employee directors. For awards in years prior to 2012, RSUs do not confer on the non-employee director voting or dispositive control over common shares until one year following termination of Board service and, for awards in 2012 and thereafter, RSUs do not confer voting or dispositive control over common shares until three months following termination of Board service. Assumptions used in the calculation of these amounts are included in Note 16 to our audited financial statements included in our Form 10-K filed with the SEC on April 17, 2013.

The aggregate number of RSUs held by each non-employee director as of February 2, 2013 was:

59,823 held by Ms. Baier
23,478 held by Mr. Bergren
59,900 held by Mr. McCarty
72,320 held by each of Ms. Everton and Mr. Browne
74,433 held by Mr. Gleim
None held by Mr. Sherman

In December 2007, the Company adopted guidelines requiring each non-employee director to maintain an equity stake in the Company equal to three times the annual cash retainer paid to the director. This links the directors' interests with those of other shareholders. Shares of common stock actually owned and time-based RSUs count towards the equity ownership requirement. Each director is required to achieve this share ownership level by the later of five years after joining the Board or five years after adoption of the guideline. Accordingly, each non-employee director standing for election in 2013, with the exception of Mr. Sherman, was required to meet, and did meet, this guideline by December 2012. Mr. Sherman will be required to meet this guideline by March 2018.

Share ownership requirements for 2012 were measured based on the average price of the Company's common stock during 2010. Share ownership requirements are reviewed annually by the HRCC.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR"
THE ELECTION OF THE NOMINEES LISTED ABOVE

PROPOSAL TWO

APPROVAL, ON AN ADVISORY BASIS, OF COMPENSATION
OF THE NAMED EXECUTIVE OFFICERS

The Dodd-Frank Act provides that the Company's shareholders have the opportunity to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company's Named Executive Officers as disclosed in this proxy statement in accordance with the SEC's rules. At the 2011 Annual Meeting, the shareholders voted, on an advisory basis, to approve on an advisory basis the compensation of the Company's Named Executive Officers annually, and the Company determined to present such matter for vote annually. Pursuant to Section 14A of the Securities Exchange Act, the Company is presenting the following "say on pay" proposal, which gives shareholders the opportunity to approve or not approve, on an advisory basis, the Company's compensation program for Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, by voting for or against the resolution set out below. While our Board intends to carefully consider the shareholder vote resulting from this proposal, the final vote will not be binding on the Company and is advisory in nature. The Company submits the following proposal:

As described in the "Executive Compensation" section, the Company's executive compensation programs are designed to attract, motivate and retain talented executives. In addition, the programs are structured to create an alignment of interests between the Company's executives and shareholders. The Board and the HRCC monitor executive compensation programs and adopt changes to reflect the competitive market in which the Company competes for talent, as well as general economic, regulatory and legislative developments affecting executive compensation. The HRCC will continue to emphasize compensation arrangements that align the financial interests of our executives with the interests of long-term shareholders. Accordingly, we believe that the Company's executive compensation programs are appropriately designed and work to ensure that management's interests are closely aligned with shareholders' interests to create long-term value. Please refer to the section entitled "Executive Compensation" of this proxy statement for a detailed discussion of the Company's executive compensation practices and philosophy.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL, ON AN ADVISORY
BASIS, OF COMPENSATION OF THE NAMED EXECUTIVE OFFICERS

PROPOSAL THREE

RATIFICATION OF THE APPOINTMENT
OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has recommended ratification of its appointment of KPMG LLP ("KPMG"), which served as our independent registered public accounting firm in 2012, to serve as our independent registered public accounting firm for 2013.

In making its selection of KPMG, the Audit Committee considered whether the non-audit services provided by KPMG are compatible with maintaining KPMG's independence.

The Audit Committee is responsible for the pre-approval of all audit services and non-audit services performed by the Company's independent registered public accounting firm. All of the fees shown in the chart above were pre-approved by the Audit Committee. The Audit Committee may delegate to one of its members the authority to grant such pre-approvals, and any such approvals are presented to the full Audit Committee at its next scheduled meeting.

A representative of KPMG is expected to be present at the meeting, will have the opportunity to make a statement if he or she so desires, and will be available to respond to appropriate questions from shareholders.

THE BOARD OF DIRECTORS RECOMMENDS
VOTING "FOR" RATIFICATION OF THE APPOINTMENT
OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee is comprised of three independent directors. The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting, and rely, without independent verification, on the information provided to them and on the representations made to them by management and the Company's independent registered public accounting firm.

The role of the Audit Committee is to assist the Board in its general oversight of the integrity of the Company's consolidated financial statements and compliance with legal and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation and oversight of the Company's independent registered public accounting firm, KPMG. Management is responsible for the preparation, presentation and integrity of the Company's consolidated financial statements, for its accounting and financial reporting principles and for the establishment and effectiveness of internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. KPMG is responsible for performing an independent audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board and expressing an opinion as to the conformity of such consolidated financial statements with accounting principles generally accepted in the United States and an opinion on the effectiveness of internal control over financial reporting based on criteria established in the Internal Control-Integrated Framework issued by the Committee on Sponsoring Organizations of the Treadway Commission. KPMG has free access to the Audit Committee to discuss any matter it deems appropriate.

The Audit Committee has reviewed and discussed with management, the internal auditors and KPMG the audited consolidated financial statements, management's assessment of the effectiveness of the Company's internal control over financial reporting and KPMG's evaluation of the Company's internal control over financial reporting. Management represented to the Audit Committee that the Company's audited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee has discussed with KPMG the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, "Communication with Audit Committees" and the additional matters required to be discussed by Statement on Auditing Standards No. 114, as modified or supplemented, "The Auditor's Communication with Those Charged with Governance."

KPMG also provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG's communications with the Audit Committee concerning independence and the Audit Committee discussed KPMG's independence with them.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended February 2, 2013.

Members of the Audit Committee:
Philip M. Browne, Chairperson
Lucinda M. Baier
Todd C. McCarty

This Compensation Discussion and Analysis ("CD&A") primarily addresses the compensation of the Company's Chief Executive Officer, the Chief Financial Officer and the three other highest paid executive officers in 2012. These executive officers are referred to as the "Named Executive Officers" throughout this proxy statement:


Name		Title
Brendan L. Hoffman		President and Chief Executive Officer since February 7, 2012
Byron L. Bergren		President and Chief Executive Officer through February 6, 2012
Anthony J. Buccina		Vice Chairman, President—Merchandising
Stephen R. Byers		Executive Vice President, Stores, Visual and Loss Prevention
Tim Grumbacher		Strategic Initiatives Officer
Keith E. Plowman		Executive Vice President, Chief Financial Officer and Principal Accounting Officer

The purpose of this CD&A is to provide shareholders with a description of the material elements of the Company's compensation program for its Named Executive Officers. The CD&A should be read in conjunction with the accompanying compensation tables, corresponding footnotes and narrative discussion, as they provide information and context to the compensation disclosures.

The Company's compensation program is designed to balance near-term results with long-term success in alignment with the interests of our shareholders and the achievement of our business strategy. Bon-Ton has a pay-for-performance philosophy that forms the foundation for decisions regarding compensation made by the Company's management and the HRCC. The Company believes that a meaningful portion of each executive officer's compensation must be at risk in order to invest our executive officer in the long-term success of the Company.

The framework of our executive compensation programs includes the following governance features:

The Company's compensation program and related governance features are complemented by several specific elements designed to align the Company's executive compensation with long-term shareholder interests, including:

As described on the following pages, we require that the Company achieve a threshold level of performance to pay an annual cash bonus. Also, our long-term incentive program includes restricted stock awards that vest over time or vest if performance targets are met. These restricted stock grants are designed to align executive officer interests with shareholder interests, which we believe is crucial to our long-term success.

Fiscal 2012 was a period during which the Company faced numerous challenges, resulting in our financial performance being below our expectations. Performance thresholds for annual cash incentive compensation and long-term incentive compensation were not met, resulting in no annual bonus payout or vesting of performance-based restricted stock with respect to 2012 results (except where contractually required).

In accordance with new SEC proxy rules, at our 2012 Annual Meeting, an advisory vote was held regarding say-on-pay, the approval of the compensation of our Named Executive Officers set forth in the summary compensation table and accompanying narrative disclosure contained in our 2012 Proxy Statement. Executive compensation was approved by our shareholders by an overwhelming margin, with 96% of the votes for approval of Named Executive Officer compensation.

In addition, at our 2011 Annual Meeting, the Company provided to its shareholders the opportunity to vote on an advisory basis on the frequency of this say-on-pay vote. The Board of Directors had recommended that such vote be held on an annual basis, and the shareholders overwhelmingly approved such frequency. Following that vote, the Board of Directors determined that it will include an advisory shareholder vote on compensation of Named Executive Officers in its proxy statement annually until the next required vote on the frequency of shareholder voting on executive compensation.

We encourage you to read this CD&A for a detailed analysis of our executive compensation program, including information about the 2012 compensation of the Named Executive Officers described in the tables that follow.

The Company's philosophy is to directly link an increasing portion of an executive officer's compensation with corporate performance and in alignment with shareholder value. At the same time, an executive officer's base salary as a percentage of his or her total compensation decreases as his or her scope of responsibility increases. The following are the objectives that guide the HRCC's decisions regarding compensation:

Based on the foregoing objectives, the HRCC has structured annual and long-term executive compensation to provide incentives to executive officers to achieve the business goals set by the Company and reward them for achieving such goals. In addition, in structuring compensation, especially performance-based compensation, the HRCC reviews a risk assessment conducted by the Company to ensure that the Company's compensation program does not encourage unreasonable risk.

In December 2007, the Company adopted share ownership guidelines for our executive officers. The guidelines help ensure that our executive officers maintain an equity stake in the Company, and by doing so, appropriately link their interests with those of other shareholders. Shares beneficially owned, time-based restricted stock and time-based restricted stock units count towards the equity ownership requirement. Performance-based restricted stock and performance-based restricted stock units do not count towards the requirement. Executive officers are required to achieve these share ownership levels within five years of becoming an executive officer, or by December 2012 for those who were executive officers at the time we adopted the guidelines. The guidelines are:

Share ownership requirements for 2012 were measured based on the average price of the Company's common stock during 2010. Share ownership requirements are reviewed annually by the HRCC.

Each of the Named Executive Officers currently owns shares sufficient to meet the requirement.

The Chief Executive Officer annually prepares a review of his direct reports, including the Named Executive Officers (with the exceptions of Messrs. Bergren and Grumbacher) and other executive officers, compared to pre-determined, HRCC-approved performance metrics. The total compensation for the respective executives, the performance appraisals and the recommendations made by the Chief Executive Officer are presented for HRCC approval.

Other members of management also support the HRCC in its work. Management assists the Chair of the HRCC in establishing the agendas for HRCC meetings and preparing materials for the review of HRCC members in advance of each meeting. With respect to most compensation and benefit matters, including compensation of the Named Executive Officers excluding the Chief Executive Officer, management provides recommendations to the HRCC. The HRCC relies on management and, as appropriate, the advice of outside experts to evaluate executive performance and to make recommendations for salary and bonus levels as well as for grants of stock options or awards of restricted stock. Management also works with the HRCC to establish performance goals under the Company's performance-based annual cash incentive compensation program. Members of management who provide this support include Brendan L. Hoffman; Dennis R. Clouser, Executive Vice President—Information Systems, Logistics and Administration; Paul A. Cortese, Senior Vice President—Compensation, Benefits and HRIS; Denise M. Domian, Senior Vice President—Human Resources; and J. Gregory Yawman, Vice President, General Counsel and Secretary, each of whom generally attends meetings of the HRCC. Each of them is excused from a meeting during deliberation and approval of matters regarding his or her own compensation and from regularly scheduled HRCC executive sessions.

The Company competes against a wide range of companies in retaining and attracting executive personnel. Each year, the Company compares salary, annual incentive compensation and long-term equity incentive values for its executive officers against various retail companies.

For its comparative analysis, the Company utilized compensation data from the Hay Associates 2012 Retail Executive and Management Total Remuneration Report. From this data, the Company identified a subgroup of 27 retail companies with median sales of $2.9 billion (the "Hay Subgroup"). The companies in the Hay Subgroup are:

During 2012, the HRCC strove to deliver total compensation at approximately the 50th percentile of the Hay Subgroup for each element of compensation. However, as the Company competes with many larger companies for the best executive-level talent, the HRCC may decide it is in the best interests of the Company and its shareholders to provide compensation for selected positions that exceeds the targeted compensation levels depending on the circumstances, including the Company's needs, market factors, the executive's experience, the contribution of the executive to the Company, and in the HRCC's view, the positive impact the executive may have on the Company as a whole.

In addition, in 2012, the HRCC reviewed proxy statement compensation data from specific retailers in its benchmarking effort with respect to compensation of the Chief Executive Officer. These retailers included Belk Inc.; Dillard's, Inc.; J.C. Penney Company, Inc.; Kohl's Corporation; Macy's, Inc.; Nordstrom, Inc.; and Saks, Inc. These companies were chosen because they are retailers with competitive assortments and a similar customer base as the Company. The HRCC recognizes that most of these retailers are larger in size than the Company, but the HRCC also believes that the Company competes directly with them for executive talent. The HRCC reviewed the compensation practices of, and the compensation packages provided by, these retailers. The data also provided context for ongoing deliberations of the HRCC.

The principal components of compensation for the Named Executive Officers are base salary, performance-based annual cash incentive compensation, long-term equity incentive compensation, perquisites, and retirement and other benefits. The HRCC has transitioned the Company's compensation program from its historical short-term orientation, which focused on base salary and annual cash incentive compensation, to a program with an increasing emphasis on long-term equity incentive compensation to better align the interests of the Named Executive Officers with the interests of shareholders in long-term growth. The HRCC does not have a pre-established policy for allocation between cash and non-cash or short-term and long-term incentive compensation. Rather, it evaluates the actual mix against market data and attempts to provide each Named Executive Officer with a balanced compensation package that addresses retention and competitive requirements.

The following table shows the components of Named Executive Officer compensation:

Component	Purpose	Characteristics

Base Salary	Compensate Named Executive Officers for performing their roles and assuming their levels of executive responsibility. Intended to provide a competitive level of compensation, it is a necessary component in recruiting and retaining executives.	Fixed component. Annually reviewed by the HRCC and adjusted as appropriate.
Performance-based Annual Cash Incentive Compensation	Promote improvement of the Company's financial results and performance. Intended to drive performance in a particular year without being a deterrent to long-term Company goals and initiatives or encouraging unreasonable risk.	Cash bonus opportunity based on the achievement of certain goals, which may be individual performance goals, Company performance goals or a combination of the two. Where applicable, goals are typically established annually and bonus amounts awarded will vary based on performance.
Long-Term Equity Incentive Compensation	Promote the achievement of the Company's long-term financial goals and stock price appreciation. Align Named Executive Officers and shareholder interests, promote Named Executive Officers' retention and reward Named Executive Officers for superior Company performance over time.	Reviewed annually and granted, if appropriate, by the HRCC in the form of stock options, restricted stock awards and RSUs. Amounts actually earned by each Named Executive Officer will vary and will depend on stock price. Restricted stock awards and RSUs may vest over time or based on Company performance.
Perquisites and Other Benefits	Provide health and welfare benefits as available to all employees. Additional perquisites and benefits are designed to attract, retain and reward Named Executive Officers by providing an overall benefit package similar to those provided by comparable companies.	Health and welfare benefits are a fixed component that may vary based on employee elections. Perquisites and other benefits may vary from year to year.
Retirement Benefits	Provide basic retirement benefits as available to all Company associates and supplemental coverage necessary to retain key executives.	Participation in pension plans for certain Named Executive Officers is a required element under applicable employment agreements.

The HRCC has reviewed a summary, or "tally sheet," with all components of compensation of the Named Executive Officers, including base salary, performance-based cash and equity incentive compensation, long-term equity incentive compensation, accumulated realized and unrealized stock option and restricted stock gains, and the dollar value to the executive and cost to the Company of all perquisites and other benefits and obligations under the Company's supplemental executive retirement plans. The HRCC did not use the tally sheet in making individual pay decisions, but rather reviewed it to ensure the total package met the needs of both the Company and the executives. The HRCC believes the level of compensation of the Company's Named Executive Officers reflects the Company's performance and total compensation to each of the Named Executive Officers is appropriate.

The base salaries of the Company's Named Executive Officers are determined by evaluating their roles and responsibilities and compensation data compared with the Hay Subgroup. The base salary of each Named Executive Officer is reviewed annually. If appropriate, the Chief Executive Officer recommends salary increases for each of the Named Executive Officers other than himself. The HRCC's decision to increase base salary for any Named Executive Officer is based on the Company's compensation philosophy and takes into specific account the level of responsibility of the Named Executive Officer, the Company's performance, the Named Executive Officer's individual performance and the Named Executive Officer's compensation compared to similarly situated executives in the Hay Subgroup.

Minimum base salaries for Brendan L. Hoffman, Anthony J. Buccina and Stephen R. Byers were established in employment agreements approved by the HRCC and, with respect to Mr. Hoffman's employment agreement, the Board at the recommendation of the HRCC. These minimum base salaries were based on a variety of factors, including market data from the Hay Subgroup and an evaluation of each person's capacity to positively affect the Company's performance. The HRCC decided that the current base salaries were properly aligned with competitors and more emphasis should be placed on variable compensation linked to corporate performance.

The Company has an annual incentive cash bonus plan (the "Cash Bonus Plan") in which the Named Executive Officers, with the exception of Mr. Grumbacher, participate. The payout of any cash bonus under the plan is dependent upon the achievement of pre-determined Company performance goals which are pre-approved by the HRCC.

For 2012, the Cash Bonus Plan for the Named Executive Officers focused on the achievement of one or two of the following goals:

The HRCC assigns goals and weightings for each Named Executive Officer depending on the capacity of the Named Executive Officer to influence the goal and the Named Executive Officer's area of responsibility. A threshold level of performance is set for each measure. Performance must be above the threshold to receive any payment for that measure. In addition, payment of any portion of a bonus

under the Cash Bonus Plan is dependent upon the Company's achievement of at least the threshold level of net income. If the threshold level of net income is not achieved, there is no bonus payout under any of the goals for that year.

The HRCC reviewed and established competitive "threshold," "target" and "maximum" payout potentials under the Cash Bonus Plan for each Named Executive Officer. The following table sets forth (1) the approximate payouts, stated as a percentage of base salary, which could be earned by each Named Executive Officer under the Cash Bonus Plan for 2012, and (2) the Cash Bonus Plan performance goals and the weighting of such goals for each Named Executive Officer for 2012:

The net income threshold was not achieved in 2012 and consequently no bonus compensation was paid to the Named Executive Officers (except where contractually stipulated, as discussed below).

In addition to bonuses that may be awarded under the Cash Bonus Plan, a cash bonus may be awarded at the discretion of the HRCC for extraordinary individual achievement or for other reasons, such as a signing bonus upon joining the Company or an executive extending the term of his or her employment agreement. In 2012, Mr. Hoffman received a signing bonus of $1,000,000 and a minimum performance-based cash bonus of $500,000, both of which were awarded pursuant to the terms of his employment agreement. No extraordinary bonuses were awarded to any of the other Named Executive Officers in 2012.

Another component of Named Executive Officer compensation is long-term incentive compensation in the form of stock options and time-based and performance-based restricted stock. The HRCC annually reviews the performance and compensation of the Named Executive Officers to determine whether annual grants of options or awards of restricted stock or RSUs are warranted. Equity awards are made periodically at the discretion of the HRCC but generally are made within the first quarter of each fiscal year. Grants and awards (other than to the Chief Executive Officer) are made on the recommendation of the Chief Executive Officer, primarily to reward significant individual achievement and to motivate and retain key talent. The proportion of long-term equity incentive compensation in relation to base salary is a function of the Named Executive Officer's level of responsibility and capacity to enhance shareholder value.

The HRCC has decided that grants made to the Chief Executive Officer should be directly aligned to the short- and long-term performance of the Company. In addition, the Chief Executive Officer and the other Named Executive Officers are awarded restricted stock as a retention tool.

The exercise price of options granted by the HRCC is usually set at the closing price of the Company's common stock on the NASDAQ Stock Market on the date of the HRCC meeting at which the grant is approved. In certain instances, the HRCC has set the exercise price at the closing price on a grant date in the future to allow time to notify the grantee of the option grant or to set the grant

date and exercise price on the same date as the starting date of a new executive. If the HRCC sets a grant date and option exercise price based on the closing price on the NASDAQ Stock Market on a date in the future, the HRCC confirms that management does not anticipate any material announcements during the period from the HRCC meeting until such future date. No options were granted to the Named Executive Officers in 2012.

Pursuant to an employment agreement effective as of February 7, 2012, the HRCC granted Mr. Hoffman 300,000 time-based restricted shares of the Company's common stock, 100,000 of which vested on February 7, 2013, and 100,000 of which vest on each of February 7, 2014 and February 7, 2015. In addition, Mr. Hoffman received a grant of 300,000 performance-based restricted shares, 50,000 of which were subject to vesting based on achievement of Company performance goals for 2012, and 125,000 of which are subject to vesting based on achievement of Company performance goals for each of 2013 and 2014. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited.

On April 17, 2013, Mr. Hoffman was awarded a grant of 100,000 time-based restricted shares, all of which vest on April 17, 2016. In addition, Mr. Hoffman received a grant of 300,000 performance-based restricted shares which are subject to vesting based on achievement of Company performance goals for the cumulative three-year period of 2013, 2014 and 2015. For vesting of restricted shares above the target amount of 200,000 shares, it is an additional requirement that the total shareholder return ratio ("TSR") be a positive number.

Pursuant to an employment agreement dated April 30, 2012, whereby Mr. Buccina chose to retire at the end of the term of said agreement (February 15, 2013), Mr. Buccina was granted 37,500 performance-based restricted shares of the Company's common stock. In consideration for such grant of performance-based restricted stock, Mr. Buccina forfeited 75,000 unvested shares of time-based restricted stock granted on April 18, 2011. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited. On April 12, 2010, Mr. Buccina was awarded a grant of 20,000 shares of time-based restricted shares, 10,000 of which vested on April 12, 2011 and 10,000 of which vested on an accelerated basis on February 15, 2013 pursuant to the aforementioned employment agreement dated April 30, 2012.

On April 18, 2011, Mr. Buccina received a grant of 150,000 performance-based restricted shares, 50,000 of which were subject to vesting based on achievement of Company performance goals for each of 2011 and 2012, and 50,000 of which were subject to vesting based on achievement of Company performance goals for 2013. As the performance goals for 2011 and 2012 were not attained, the restricted stock awards relating to 2011 and 2012 performance goals were forfeited. As Mr. Buccina retired as of February 15, 2013, the restricted stock award relating to 2013 performance goals was forfeited.

On April 12, 2010, Mr. Byers was awarded a grant of 11,500 time-based restricted shares, 6,500 of which vested on April 12, 2011 and 5,000 of which vested on April 12, 2013.

On April 18, 2011, Mr. Byers was awarded a grant of 10,000 time-based restricted shares, all of which vest on April 18, 2014. In addition, Mr. Byers received a grant of 12,000 performance-based restricted shares which were subject to vesting based on achievement of Company performance goals for 2011. As the performance goals for 2011 were not attained, the restricted stock award relating to 2011 performance goals was forfeited.

On April 17, 2012, Mr. Byers was awarded a grant of 6,000 time-based restricted shares, all of which vest on April 17, 2015. In addition, Mr. Byers received a grant of 10,000 performance-based restricted shares which were subject to vesting based on achievement of Company performance goals for 2012. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited.

On April 17, 2013, Mr. Byers was awarded a grant of 15,000 time-based restricted shares, all of which vest on April 17, 2016. In addition, Mr. Byers received a grant of 20,000 performance-based restricted shares which are subject to vesting based on achievement of Company performance goals for 2013 and a grant of 22,500 performance-based restricted shares which are subject to vesting based on achievement of Company performance goals for the cumulative three-year period of 2013, 2014 and 2015. For vesting of restricted shares above the target amount of 15,000 shares, it is an additional requirement that the TSR be a positive number.

On April 12, 2010, the HRCC granted Mr. Plowman an award of 30,000 time-based restricted shares, 5,000 of which vested on April 12, 2011 and 25,000 of which vested on April 12, 2013.

On April 18, 2011, Mr. Plowman was awarded a grant of 12,000 time-based restricted shares which vest on April 18, 2014. In addition, Mr. Plowman received a grant of 50,000 performance-based restricted shares which were subject to vesting based on achievement of Company performance goals for 2011. As the performance goals for 2011 were not attained, the restricted stock award relating to 2011 performance goals was forfeited.

On April 17, 2012, Mr. Plowman was awarded a grant of 8,000 time-based restricted shares which vest on April 17, 2015. In addition, Mr. Plowman received a grant of 50,000 performance-based restricted shares which were subject to vesting based on achievement of Company performance goals for 2012. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited.

On April 17, 2013, Mr. Plowman was awarded a grant of 15,000 time-based restricted shares, all of which vest on April 17, 2016. In addition, Mr. Plowman received a grant of 20,000 performance-based restricted shares which are subject to vesting based on achievement of Company performance goals for 2013 and a grant of 60,000 performance-based restricted shares which are subject to vesting based on achievement of Company performance goals for the cumulative three-year period of 2013, 2014 and 2015. For vesting of restricted shares above the target amount of 40,000 shares, it is an additional requirement that the TSR be a positive number.

Awards of performance-based restricted stock reflect the HRCC's objectives to link an increasing portion of compensation to Company performance and to align the interests of key executives with those of shareholders.

The aforementioned awards are reflected in the "Grants of Plan-Based Awards" table on page 36.

The Company provides the Named Executive Officers with perquisites and other benefits that the Company and the HRCC believe are reasonable and consistent with the Company's objective to motivate and retain superior executives for key positions. The HRCC periodically reviews the levels of perquisites and other benefits provided to Named Executive Officers. Perquisites primarily consist of supplemental medical benefits, automobile allowances, relocation benefits and reimbursement of legal fees incurred in connection with the negotiation of employment agreements. Perquisites traditionally have not constituted significant portions of an executive's compensation.

The Named Executive Officers also participate in benefit programs available to employees generally, such as health and dental insurance, life insurance and long-term disability insurance.

The Named Executive Officers participate in The Bon-Ton Stores, Inc. Retirement Contribution Plan, a tax-qualified defined-contribution plan. Under this plan, employees are able to contribute a portion of their annual salaries on a pre-tax basis and the Company may make discretionary retirement

contributions to each eligible employee's account. Company matching contributions may consist of two parts: a match based on an employee's years of service and a profit sharing match. Company retirement contribution amounts are included in the Summary Compensation Table on page 34.

In connection with an acquisition in March 2006, the Company assumed the Carson Pirie Scott & Co. Pension Plan (the "Carson's Pension Plan"). The Carson's Pension Plan is a qualified defined-benefit cash-balance plan in which the only Named Executive Officer who participated was Anthony J. Buccina. The Carson's Pension Plan was frozen to new participants in 2002 and all future benefit accruals were frozen in May 2006.

As discussed more fully below, the Company has entered into employment agreements with Brendan L. Hoffman, Anthony J. Buccina and Stephen R. Byers. The decisions to enter into employment agreements and the terms of those agreements were based on the Company's need to motivate and retain talent for the long-term growth of the Company.

Effective February 7, 2012, the Company elected Mr. Hoffman as its President and Chief Executive Officer, and the Company determined that it would be in its interest to enter into an employment agreement to provide for an initial term of employment of three years in order to retain Mr. Hoffman as its President and Chief Executive Officer. Mr. Hoffman was selected as President and Chief Executive Officer due to his years of executive experience in the retail department store industry and for the long-term growth of the Company.

With respect to Mr. Buccina, the HRCC and management of the Company determined his services and merchandising expertise would be critical to lead the development and execution of a comprehensive merchandising strategy. With respect to Mr. Byers, the HRCC and Company management determined it would be in the best interests of the Company to enter into an employment agreement to retain Mr. Byers due to his significant level of experience in retail and for the long-term growth of the Company. In January 2009, the Company entered into new employment agreements with both Mr. Buccina and Mr. Byers, extending the term of their respective employment relationships with the Company. In January 2011, the employment agreement of Mr. Buccina automatically renewed for an additional one-year period, and the Company elected not to renew the employment agreement of Mr. Byers. The Company and Mr. Byers entered into a new employment agreement dated May 1, 2011 that revised his duties and provided that the term shall be for one year and shall renew for successive one-year terms beginning May 1st of each year unless either party elects not to renew the agreement. In January 2012, the Company elected not to renew the employment agreement of Mr. Buccina. The Company and Mr. Buccina entered into a new agreement dated April 30, 2012 that provided for employment through February 15, 2013, after which date Mr. Buccina chose to retire from the Company.

The material terms of the employment agreements with the Named Executive Officers are described under the heading "Summary of Employment Agreements with Named Executive Officers" beginning on page 39.

Under the employment agreements, the Company has agreed to provide severance compensation in the event of a termination, change in control or other triggering events. In addition, Keith E. Plowman, with whom the Company does not have an employment agreement, is a participant in the Company's severance plan. These arrangements are designed to promote stability and continuity of senior management through a change in control of the Company. Stock options and restricted stock will generally vest upon a change in control. The Company provides for vesting of equity awards to retain, focus and motivate executives during change in control discussions. However, any cash severance benefits require a "double trigger" (including the executive's separation from the Company under specified circumstances) for payment.

Information on these arrangements for the Named Executive Officers is provided under the heading "Potential Payments Upon Termination or Change in Control" on page 45.

In order to further align management's interests with those of shareholders and to support the Company's governance practices, in 2010 the Board adopted a recoupment policy applicable to annual cash incentive awards, performance-based restricted shares and other performance-based compensation to executive officers of the Company. The policy provides that if, as a result of a restatement of the Company's financial statements, an executive officer received more incentive compensation than the executive officer would have received absent the incorrect financial statements, the Company may take such action as it deems appropriate to address the impact of the restatement of financial statements. Compensation subject to recoupment will include equity or contingent income exercised, earned or distributed during the periods, not to exceed three years, which required restatement of financial statements.

The Company prohibits derivative transactions and selling short in the Company's securities by officers, directors and their families. Specifically, they may not, at any time:

Internal Revenue Code Section 162(m) limits the deductibility of compensation in excess of $1,000,000 paid to the Chief Executive Officer and certain executive officers unless specified criteria are satisfied. The HRCC reviews and considers the deductibility of executive compensation under Section 162(m), and has generally designed the Company's compensation program in a manner that permits compensation to be deductible. However, grants of restricted stock, when and if those grants vest for tax purposes, may create compensation for the grantee that is subject to the limitations on deductibility under Section 162(m). The HRCC may award non-deductible compensation when it believes such action would be in the best interests of the Company.

The HRCC has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with Company management and, based on such review and discussion, the HRCC recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Company management performs an annual risk assessment of the Company's compensation policies and plans. This risk assessment process includes a review of plan design and performance measures. Incentive compensation targets are reviewed annually and adjusted as necessary to align with the individual goals for executive officers. The HRCC reviews the risk assessment annually.

The HRCC has determined that the Company's compensation program does not encourage excessive and unnecessary risk-taking. The Company designs the individual components of its compensation programs to encourage appropriate risk-taking to maximize long-term business potential, while avoiding undue risk that does not align with short-and long-term shareholder objectives. This design encourages the Company's managers to remain focused on both the short- and long-term operational and financial goals of the Company. The following factors mitigate risk with respect to compensation programs: approval of executive compensation by a committee of independent directors, performance-based short-term and long-term incentive awards aligned with shareholder interests, caps on incentive payments, use of multiple financial goals including both top and bottom line measures, stock ownership guidelines and an incentive recoupment policy (described on page 32).

Name and Principal Position

Brendan L. Hoffman,	2012	976,923	1,000,000	1,789,750	(8)	—	500,000	(9)	—	148,983	4,415,656
President and Chief Executive	2011	—	—	—		—	—		—	—	—
Officer	2010	—	—	—		—	—		—	—	—
Byron L. Bergren,	2012	33,750	—	137,200	(10)	—	—		—	11,402	182,352
President and Chief Executive	2011	1,000,000	—	1,410,300	(11)	—	—		—	89,185	2,499,485
Officer through February 6, 2012	2010	1,000,000	—	2,620,800	(12)	—	1,000,000		—	70,773	4,691,573
Anthony J. Buccina,	2012	850,000	—	331,000	(13)	—	—		31,260	21,068	1,233,328
Vice Chairman, President—	2011	842,500	—	1,659,600	(14)	—	—		30,922	15,138	2,548,160
Merchandising	2010	812,950	—	859,030	(15)	—	779,000		22,677	14,367	2,488,024
Stephen R. Byers,	2012	479,423	—	77,550	(16)	—	—		—	7,254	564,227
Executive Vice President,	2011	520,000	—	287,664	(17)	—	—		—	6,593	814,257
Stores, Visual and Loss Prevention	2010	545,875	—	540,130	(18)	—	522,500		—	10,516	1,619,021
Tim Grumbacher,	2012	650,000	—	—		—	—		—	88,422	738,422
Strategic Initiatives	2011	650,000	—	—		—	—		—	70,740	720,740
Officer	2010	650,000	—	—		—	260,000		—	74,039	984,039
Keith E. Plowman,	2012	510,000	—	232,650	(19)	—	—		—	8,005	750,655
Executive Vice President,	2011	504,625	—	788,310	(20)	—	—		—	4,308	1,297,243
Chief Financial Officer and Principal Accounting Officer	2010	478,875	—	745,275	(21)	—	366,375		—	9,769	1,600,294

(1): Actual base salary payments made in 2012, 2011 and 2010.
(2): "Bonus" refers to non-performance-based guaranteed cash payments. Pursuant to his employment agreement, Mr. Hoffman received a $1,000,000 signing bonus in 2012. There were no such similar payments made in 2011 and 2010. Other cash incentives were performance-based and are reflected under the column labeled "Non-Equity Incentive Plan Compensation."
(3): The amounts reported in this column reflect the aggregate grant date fair value of restricted stock share awards and RSU awards computed in accordance with ASC 718 for restricted stock and RSUs granted in 2012, 2011 and 2010 to each Named Executive Officer. The calculation of these amounts disregards any estimate of forfeitures related to time-based vesting conditions. The amounts do not reflect compensation actually received by the Named Executive Officers. Assumptions used in the calculation of these amounts are included in Note 16 to our audited financial statements included in our Form 10-K filed with the SEC on April 17, 2013.
(4): The amounts reported in this column reflect the aggregate grant date fair value of option awards computed in accordance with ASC 718 for stock options granted in 2012, 2011 and 2010 to each Named Executive Officer. No stock options were granted in these years.
(5): The amounts reported in this column reflect the annual performance-based bonus awards to the Named Executive Officers under the Company's Cash Bonus Plan, which is discussed on page 27 of the Compensation Discussion and Analysis under the heading "Performance-Based Annual Cash Incentive Compensation."
(6): The amounts reported in this column reflect changes in pension value under the Carson's Pension Plan.
(7): The compensation reflected in the "All Other Compensation" column for each of the Named Executive Officers for 2012 includes the following:

(9): In 2012, Mr. Hoffman received a minimum performance-based cash bonus of $500,000, which was awarded pursuant to the terms of his employment agreement.
(10): Represents the grant date fair value of RSUs awarded to Mr. Bergren for his service as a director of the Company.
(11): The grant date fair value of 2011 performance-based restricted stock awarded to Mr. Bergren was $1,410,300, computed based upon an assessment, as of the grant date, that it was probable that 90% of the performance target would be met for the 2011 year. Based upon 2011 performance, the actual grant date fair value to Mr. Bergren for 2011 performance-based restricted stock was zero. The grant date fair value of 2011 performance-based restricted stock consists of 100,000 performance-based restricted shares awarded to Mr. Bergren in 2010 that were excluded from the Summary Compensation Table in 2010 as the award was contingent upon 2011 performance for which criteria was not established by the HRCC until March 2011. See footnote 12 below.
(12): The grant date fair value of 2010 time-based restricted stock awarded to Mr. Bergren was $1,750,000. The grant date fair value of 2010 performance-based restricted stock awarded to Mr. Bergren was $870,800, computed based upon an assessment, as of the grate date, that it was probable that 70% of the performance target would be met for the 2010 year. Based upon the achievement of 100% of the 2010 performance target, the actual grant date fair value to Mr. Bergren for 2010 performance-based restricted stock was $1,244,000. An additional 100,000 performance-based restricted shares were awarded to Mr. Bergren in 2010 but are excluded from the Summary Compensation Table as the award is contingent upon 2011 performance for which criteria was not established by the HRCC until March 2011.
(13): The grant date fair value of 2012 performance-based restricted stock awarded to Mr. Buccina was $331,000, computed based upon an assessment, as of the grant date, that it was probable that 50% of the performance target would be met for the 2012 year. Based upon 2012 performance, the actual grant date fair value to Mr. Buccina for 2012 performance-based restricted stock was zero.
(14): The grant date fair value of 2011 time-based restricted stock awarded to Mr. Buccina was $1,037,250. The grant date fair value of 2011 performance-based restricted stock awarded to Mr. Buccina was $622,350, computed based upon an assessment, as of the grant date, that it was probable that 90% of the performance target would be met for the 2011 year. Based upon 2011 performance, the actual grant date fair value to Mr. Buccina for 2011 performance-based restricted stock was zero.
(15): The grant date fair value of 2010 time-based restricted stock awarded to Mr. Buccina was $313,800. The grant date fair value of 2010 performance-based restricted stock awarded to Mr. Buccina was $545,230, computed based upon an assessment, as of the grant date, that it was probable that 70% of the performance target would be met for the 2010 year. Based upon the achievement of 100% of the 2010 performance target, the actual grant date fair value to Mr. Buccina for 2010 performance-based restricted stock was $778,900. The grant date fair value of 2010 performance-based restricted stock includes 50,000 performance-based restricted shares awarded to Mr. Buccina in 2009 that were excluded from the Summary Compensation Table in 2009 as the award was contingent upon 2010 performance for which criteria was not established by the HRCC until March 2010.
(16): The grant date fair value of 2012 time-based restricted stock awarded to Mr. Byers was $42,300. The grant date fair value of 2012 performance-based restricted stock awarded to Mr. Byers was $35,250, computed based upon an assessment, as of the grant date, that it was probable that 50% of the performance target would be met for the 2012 year. Based upon 2012 performance, the actual grant date fair value to Mr. Byers for 2012 performance-based restricted stock was zero.
(17): The grant date fair value of 2011 time-based restricted stock awarded to Mr. Byers was $138,300. The grant date fair value of 2011 performance-based restricted stock awarded to Mr. Byers was $149,364, computed based upon an assessment, as of the grant date, that it was probable that 90% of the performance target would be met for the 2011 year. Based upon 2011 performance, the actual grant date fair value to Mr. Byers for 2011 performance-based restricted stock was zero.
(18): The grant date fair value of 2010 time-based restricted stock awarded to Mr. Byers was $180,435. The grant date fair value of 2010 performance-based restricted stock awarded to Mr. Byers was $359,695, computed based upon an assessment, as of the grant date, that it was probable that 70% of the performance target would be met for the 2010 year. Based upon the achievement of 100% of the 2010 performance target, the actual grant date fair value to Mr. Byers for 2010 performance-based restricted stock was $513,850. The grant date fair value of 2010 performance-based restricted stock includes 35,000 performance-based restricted shares awarded to Mr. Byers in 2009 that were excluded from the Summary Compensation Table in 2009 as the award was contingent upon 2010 performance for which criteria was not established by the HRCC until March 2010.
(19): The grant date fair value of 2012 time-based restricted stock awarded to Mr. Plowman was $56,400. The grant date fair value of 2012 performance-based restricted stock awarded to Mr. Plowman was $176,250, computed based upon an assessment, as of the grant date, that it was probable that 50% of the performance target would be met for the 2012 year. Based upon 2012 performance, the actual grant date fair value to Mr. Plowman for 2012 performance-based restricted stock was zero.
(20): The grant date fair value of 2011 time-based restricted stock awarded to Mr. Plowman was $165,960. The grant date fair value of 2011 performance-based restricted stock awarded to Mr. Plowman was $622,350, computed based upon an assessment, as of the grant date, that it was probable that 90% of the performance target would be met for the 2011 year. Based upon 2011 performance, the actual grant date fair value to Mr. Plowman for 2011 performance-based restricted stock was zero.
(21): The grant date fair value of 2010 time-based restricted stock awarded to Mr. Plowman was $470,700. The grant date fair value of 2010 performance-based restricted stock awarded to Mr. Plowman was $274,575, computed based upon an assessment, as of the grant date, that it was probable that 70% of the performance target would be met for the 2010 year. Based upon the achievement of 100% of the 2010 performance target, the actual grant date fair value to Mr. Plowman for 2010 performance-based restricted stock was $392,250.

Stock options and awards of restricted stock generally vest over a number of years. Any vested options are usually forfeited 90 days after termination of the recipient's employment, and any unvested shares of restricted stock and unvested options are usually forfeited upon termination of employment.

The table below provides information regarding grants of options and awards of restricted stock and RSUs made during 2012 to the Named Executive Officers under the Company's Stock Incentive Plan.

								Estimated Possible Payouts Under Equity Incentive Plan Awards(2)

													All Other Stock Awards; Number of Shares of Stock or Units (#)(3)		All Other Option Awards; Number of Securities Underlying Options (#)(4)
		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)															Exercise or Base Price of Option Awards ($/share)		Grant Date Fair Value of Stock and Option Awards ($)(5)
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)							Exercise or Base Price of Option Awards ($/share)		Grant Date Fair Value of Stock and Option Awards ($)(5)
Brendan L. Hoffman	N/A		500,000		1,000,000		2,000,000		—		—			—		—		—		—
	3/13/12		—		—		—		25,000		50,000	(6)		—		—		—		214,750
	2/7/12		—		—		—		—		—			300,000		—		—		1,575,000
Byron L. Bergren	6/12/12		—		—		—		—		—			17,612		—		—		90,000
	8/23/12		—		—		—		—		—			5,866		—		—		47,200
Anthony J. Buccina	N/A		425,000		850,000		1,700,000		—		—			—		—		—		—
	3/13/12		—		—		—		25,000		50,000	(7)		—		—		—		214,750
	4/30/12		—		—		—		18,750		37,500	(8)		—		—		—		116,250
Stephen R. Byers	N/A		117,500		235,000		470,000		—		—			—		—		—		—
	4/17/12		—		—		—		5,000		10,000	(9)		—		—		—		35,250
	4/17/12		—		—		—		—		—			6,000		—		—		42,300
Keith E. Plowman	N/A		191,300		382,500		765,000		—		—			—		—		—		—
	4/17/12		—		—		—		25,000		50,000	(10)		—		—		—		176,250
	4/17/12		—		—		—		—		—			8,000		—		—		56,400

(1): Represents the range of cash payouts targeted for 2012 performance under the Cash Bonus Plan described in the Compensation Discussion and Analysis on page 27 under the heading "Performance-Based Annual Cash Incentive Compensation." The amounts shown in the "Threshold" column reflect the minimum payout opportunity if threshold performance was achieved. As the net income threshold was not met, the only payout under the Cash Bonus Plan in 2012 was the $500,000 minimum performance-based cash bonus awarded to Mr. Hoffman pursuant to the terms of his employment agreement.
(2): Represents the range of performance-based restricted share payouts targeted for 2012 performance. These performance-based restricted shares are earned based on the achievement of goals for 2012 established by the HRCC. Dividends are not paid on performance-based restricted shares until such shares are vested. As performance thresholds with respect to 2012 performance were not met, none of the target performance-based restricted shares were actually earned.
(3): Represents awards of restricted shares and RSUs made under the Stock Incentive Plan. Information regarding the vesting schedules of these awards is included in the footnotes to the Outstanding Equity Awards at Fiscal Year-End table on page 37. Dividends and dividend equivalents are generally paid on unvested restricted shares and RSUs, respectively, when dividends are paid on Company common stock. Restricted shares will vest on an accelerated basis upon the executive's termination of employment under certain circumstances. Additional information regarding the vesting acceleration provisions applicable to equity awards is included under the heading "Potential Payments upon Termination or Change in Control" on page 45.
(4): Represents options issued under the Stock Incentive Plan, of which there were none in 2012.
(5): Represents the grant date fair value of each equity award computed in accordance with ASC 718. The dollar value of restricted shares and RSUs shown represents the grant date fair value calculated as the fair market value of our common stock on the respective grant dates. The dollar value of performance-based restricted shares awarded is computed based upon an assessment, as of the grant date, that it was probable that 50% of the performance target would be met for the 2012 year. Based upon 2012 performance, the actual grant date fair value for 2012 performance-based restricted shares was zero. Reference footnotes 8, 13, 16 and 19 to the Summary Compensation Table.
(6): Represents the target award of performance-based restricted shares granted to Mr. Hoffman on February 7, 2012. The performance goals were established by the HRCC on March 13, 2012.
(7): Represents the target award of performance-based restricted shares granted to Mr. Buccina on April 18, 2011. The performance goals were established by the HRCC on March 13, 2012.

	Option Awards										Stock Awards

Name	Number of Securities Underlying Unexercised Options— Exercisable (#)		Number of Securities Underlying Unexercised Options— Unexercisable (#)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)(1)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1)
Brendan L. Hoffman		—		—		—		—		—		300,000	(2)		3,930,000		—			—
		—		—		—		—		—		—			—		250,000	(3)		3,275,000
Byron L. Bergren		125,000		—		—		13.05		2/6/2013		—			—		—			—
		—		—		—		—		—		23,478	(4)		307,600		—			—
Anthony J. Buccina		96,000		—		—		27.15		5/31/2013		—			—		—			—
		11,019		—		—		55.85		3/26/2014		—			—		—			—
		50,000		—		—		4.96		3/17/2015		—			—		—			—
		—		—		—		—		—		10,000	(5)		131,000		—			—
		—		—		—		—		—		—			—		50,000	(6)		655,000
Stephen R. Byers		15,000		—		—		31.84		4/2/2013		—			—		—			—
		21,500		—		—		29.90		10/1/2013		—			—		—			—
		11,019		—		—		55.85		3/26/2014		—			—		—			—
		50,000		—		—		4.96		3/17/2015		—			—		—			—
		—		—		—		—		—		5,000	(7)		65,500		—			—
		—		—		—		—		—		10,000	(8)		131,000		—			—
		—		—		—		—		—		6,000	(9)		78,600		—			—
Keith E. Plowman		11,019		—		—		55.85		3/26/2014		—			—		—			—
		40,000		—		—		4.96		3/17/2015		—			—		—			—
		—		—		—		—		—		25,000	(7)		327,500		—			—
		—		—		—		—		—		12,000	(8)		157,200		—			—
		—		—		—		—		—		8,000	(9)		104,800		—			—

The Pension Benefits Table below shows the actuarial present value of accumulated benefits payable to each of our Named Executive Officers and the number of years credited to each Named Executive Officer under the Carson's Pension Plan, in which only Mr. Buccina was a participant.

The present value set forth has been calculated for Mr. Buccina assuming he remained in service until normal retirement age as defined under the Carson's Pension Plan. The assumptions set forth in Note 9 to our audited financial statements included in our Form 10-K filed with the SEC on April 17, 2013 were used to calculate the numbers below and are incorporated by reference.

In connection with the acquisition of Carson's in March 2006, the Company assumed the Carson's Pension Plan. The Carson's Pension Plan is a qualified defined-benefit cash-balance plan in which the only Named Executive Officer participant was Anthony J. Buccina. The Carson's Pension Plan was frozen to new participants in 2002 and all future benefit accruals were frozen in May 2006. The Carson's Pension Plan was amended in 2007 in compliance with the Pension Protection Act of 2006.

Normal Retirement: Employees who terminate employment with three or more years of service and have attained age 65 qualify for normal retirement. Payment of the full benefit commences as soon as practicable following termination. Mr. Buccina was not eligible for normal retirement under the Carson's Pension Plan on the date of his retirement, February 15, 2013.

Early Retirement: Employees who have completed three or more years of service and are age 55 or older upon termination are eligible for early retirement. In addition, employees who participated in Carson's previous plan, which was merged into the Carson's Pension Plan, are eligible for early retirement after 30 years of service. Payment of pension benefits will commence at age 65, unless the employee elects to begin such payments earlier in which case the pension benefit amount may be reduced. Mr. Buccina was eligible for early retirement under the Carson's Pension Plan.

For an unmarried employee, the normal form of payment is a life annuity. For a married employee, the normal form of payment is a qualified joint and surviving spouse annuity; however, the married employee may elect to receive payment in the form of a single life annuity. Any employee may elect to receive pension benefits in the form of an actuarially equivalent life annuity, joint and survivor annuity, life annuity with ten years guaranteed, ten-year annuity with specified monthly payments, or, under certain circumstances, a lump sum.

Effective May 1, 2002, the Carson's Pension Plan was amended and restated to convert the plan's benefit formula to a cash-balance design. Under this design, the pension benefit is expressed as a

cash-balance account. Employees with accrued pension benefits as of April 30, 2002, including Mr. Buccina, are considered continued participants under the current Carson's Pension Plan.

Effective May 20, 2006, future accruals in the Carson's Pension Plan were eliminated. Generally, the lump sum benefit payable under the Plan is the cash balance account value as of that date, with annual interest credits at the greater of 4.75% or the yield on three-year U.S. Treasury constant maturities as of the last day of the prior calendar year. However, the lump sum benefit is not less than the lump sum value of benefits accrued under prior Plan formulas as of May 20, 2006.

On January 23, 2012, the Company entered into an employment agreement (the "Hoffman Employment Agreement") with Mr. Hoffman providing that he would serve as President and Chief Executive Officer effective February 7, 2012, with a term running through February 7, 2015.

Mr. Hoffman's initial base salary under the Hoffman Employment Agreement is $1,000,000 per year and provides that Mr. Hoffman will be paid a signing bonus of $1,000,000 within thirty days following the effective date and $1,000,000 on the first anniversary of the effective date if he is still employed by the Company at that time.

The Hoffman Employment Agreement provides that Mr. Hoffman is eligible for a bonus under the Cash Bonus Plan under the following parameters: a target bonus of 100% of base salary, with a threshold bonus of 50% of base salary, and a maximum bonus of 200% of base salary. The performance measures to be utilized and the weighting of these performance measures will be determined by the HRCC in its discretion. With respect to fiscal year 2012, the Hoffman Employment Agreement provided that Mr. Hoffman receive a minimum cash bonus of $500,000.

The Hoffman Employment Agreement provides that Mr. Hoffman receive a grant of 300,000 restricted shares of the Company's common stock, of which 100,000 shares vested on February 7, 2013 and 100,000 shares vest on each of February 7, 2014 and February 7, 2015, provided that Mr. Hoffman is still employed by the Company on each such date. In addition, Mr. Hoffman received, as performance-based compensation, a grant of 300,000 restricted shares of the Company's common stock, 50,000 of which were subject to vesting based on achievement of Company performance goals for 2012,

and 125,000 of which are subject to vesting based on achievement of Company performance goals for each of 2013 and 2014. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited.

The Company has agreed to reimburse Mr. Hoffman for reasonable attorney's fees in connection with the negotiation of the Hoffman Employment Agreement of up to $20,000. In addition, the Company has agreed to reimburse Mr. Hoffman for all expenses related to Mr. Hoffman's relocation to Milwaukee, Wisconsin, in accordance with the Company's policy on relocation of senior executives, including additional amounts for the payment of related federal and state taxes. Pending Mr. Hoffman's relocation, the Company has agreed to reimburse Mr. Hoffman for his travel between New York, New York and the Company's offices, stores and facilities, including lodging, up to $75,000 per year. The Company has also agreed to gross up the payments made to Mr. Hoffman for these attorney's fees and travel and lodging expenses. Mr. Hoffman will also be eligible to participate in the Company's health plans and other plans and programs generally available to the Company's employees.

In the event of discharge without "Cause" or resignation for "Good Reason" (as such terms are defined in the Hoffman Employment Agreement) during the term of the Hoffman Employment Agreement, Mr. Hoffman will be entitled to receive (1) severance pay equal to the greater of his base salary for the remaining contract term or 200% of his base salary, (2) an amount equal to 24 times the monthly COBRA payment applicable to him as of the termination date, (3) an amount equal to the annual bonus Mr. Hoffman would have received with respect to the fiscal year of termination, prorated based on the number of days employed by the Company during that year, and (4) any unpaid signing bonus amounts. The severance payment will be payable 50% in a lump sum as of the six month anniversary of Mr. Hoffman's termination of employment and 50% in a lump sum as of the one-year anniversary of Mr. Hoffman's termination of employment. The severance payment is contingent on Mr. Hoffman signing and not timely revoking a general release of claims. In addition, in the event of discharge without Cause or resignation for Good Reason, any unvested restricted stock issued pursuant to the Restricted Stock Agreements will automatically vest in full.

Upon a "Change of Control" (as such term is defined in the Hoffman Employment Agreement), the vesting of stock options and restricted shares held by Mr. Hoffman shall be governed by the terms of such stock options or restricted shares award. If following a Change of Control Mr. Hoffman is discharged without Cause or resigns for Good Reason within one year following the Change of Control, Mr. Hoffman will receive (1) a severance payment equal to two times his base salary, (2) an amount equal to two times the average annual bonus paid to him during the term of the Employment Agreement, (3) an amount equal to 24 times the monthly COBRA payment applicable to him as of the termination date, and (4) an amount equal to the annual bonus Mr. Hoffman would have received with respect to the fiscal year of termination, prorated based on the number of days employed by the Company during that year. The Change of Control severance payment will be payable 50% in a lump sum as of the six month anniversary of Mr. Hoffman's termination of employment and 50% in a lump sum as of the one-year anniversary of Mr. Hoffman's termination of employment. The Change of Control severance payment is contingent on Mr. Hoffman signing and not timely revoking a general release of claims. Pursuant to the Hoffman Employment Agreement, if the aggregate present value of the "parachute payments" determined under Section 280G of the Internal Revenue Code exceeds three times his "base amount," as defined in Section 280G, the payouts upon a Change in Control shall be reduced to be less than three times his base amount.

For information regarding potential severance payments and accelerated vesting of equity awards to which Mr. Hoffman may be entitled upon certain events and/or a Change in Control, see "Potential Payments Upon Termination or Change in Control" on page 45.

The Hoffman Employment Agreement contains a non-solicitation clause that, during Mr. Hoffman's employment and for a period of two years following termination of his employment, prohibits Mr. Hoffman from, directly or indirectly, soliciting, inducing, encouraging, influencing or otherwise causing any customer, employee, consultant, independent contractor or supplier of the Company to change his, her or its business relationship with or terminate employment with the Company.

The Hoffman Employment Agreement contains a non-competition clause that, during Mr. Hoffman's employment and for a period of one year following termination of his employment, prohibits Mr. Hoffman from engaging in or being financially interested in any competitor of the Company, other than the passive ownership of less than 2% of any class of securities of a company. The Hoffman Employment Agreement also contains confidentiality provisions relating to the Company's confidential information.

Byron L. Bergren, President and Chief Executive Officer through February 6, 2012

Mr. Bergren's employment agreement with the Company was entered into on August 24, 2004 (the "2004 Agreement") and amended on May 1, 2005; May 23, 2006; July 19, 2007; March 18, 2009; January 21, 2011 and November 14, 2011. Mr. Bergren's employment agreement, as amended, provided for a minimum annual base salary of $1,000,000 and a bonus in accordance with the Cash Bonus Plan. In January 2011, the Company entered into an amendment of Mr. Bergren's employment agreement, which provided that he would serve as President and Chief Executive Officer through February 5, 2012, with the term of the agreement extending automatically from year to year thereafter unless either party elected not to renew the agreement. If Mr. Bergren elected not to renew, the Board agreed to nominate Mr. Bergren as a member of the Board of Directors to serve until the annual meeting that was at least one year after expiration of the agreement. If the Company elected not to renew the agreement, the Board agreed to nominate Mr. Bergren as a member of the Board of Directors and to effect his appointment as the non-executive Chairman of the Board to serve until the annual meeting that was at least one year after expiration of the agreement. On November 14, 2011, the Company announced that Mr. Bergren would transition from his role as President and Chief Executive Officer to become Chairman of the Board and entered into a sixth amendment of Mr. Bergren's employment agreement. On February 6, 2012, Mr. Bergren retired as President and Chief Executive Office and was named Chairman of the Board.

Pursuant to the March 18, 2009 amendment to his employment agreement, Mr. Bergren was granted 200,000 time-based restricted shares of the Company's common stock of which 50% (100,000 shares) vested on February 1, 2010 and the remainder (100,000 shares) vested on February 1, 2011. He was also granted 200,000 performance-based restricted shares, 90% of which (180,000 shares) vested based upon the achievement of performance targets for 2009. This amendment also provided for two grants of shares of restricted stock in fiscal year 2010:

The employment agreement provided that in the event that Mr. Bergren was discharged without cause or resigned for good reason, Mr. Bergren would be appointed as non-executive Chairman of the Board and would also be entitled to payment of all accrued and unpaid Base Salary and accrued but unused vacation pay through the date of termination of employment as President and/or Chief Executive Officer, and a pro-rated bonus, if earned, based on the Company's full-year performance. The vesting of restricted stock and the payment of severance benefits were contingent on Mr. Bergren executing a general release consistent with certain terms of his employment agreement.

The employment agreement also provided that if Mr. Bergren was discharged without cause during the term of his employment agreement following a "Change in Control" (as defined in the employment agreement) or resigned from the Company with or without good reason during the term of his employment agreement after the expiration of three months following a Change in Control, Mr. Bergren would receive a payment equal to the lesser of 2.99 times his base salary (at the salary level immediately preceding the Change in Control plus his average bonus for the three immediately preceding fiscal years) or, if applicable, the "280G Permitted Payment" (as defined in the 2004 Agreement). The Change in Control severance payment was contingent on Mr. Bergren signing and not timely revoking a general release of claims.

Mr. Bergren's employment agreement contained a non-competition clause that, during Mr. Bergren's employment and for a period of one year after termination of his employment, prohibited Mr. Bergren from engaging in or being financially interested in the retail department stores business of any competitor of the Company identified in the employment agreement. Mr. Bergren's employment agreement also contained confidentiality provisions relating to the Company's confidential information.

On April 30, 2012, Mr. Buccina announced his intention to retire on February 15, 2013. Also on that date, the Company entered into an employment agreement (the "Buccina Employment Agreement") to retain the services of Mr. Buccina through February 15, 2013. The Company and Mr. Buccina were party to an employment agreement dated as of February 1, 2009, as amended by Amendment No. 1 to Employment Agreement dated April 12, 2011, which expired on April 30, 2012.

Mr. Buccina's base salary under the Buccina Employment Agreement is $850,000 per year. The Buccina Employment Agreement provides that Mr. Buccina is eligible for a bonus under the Cash Bonus Plan under the following parameters: a target bonus of 100% of base salary in effect on the last day of the relevant fiscal year, with threshold and maximum bonuses as determined by the HRCC. The performance measures to be utilized, and the weighting of these performance measures, will be determined by the HRCC consistent with its determinations for other senior executives under the Cash Bonus Plan.

The Buccina Employment Agreement provides that Mr. Buccina will be paid a retention bonus of one times base salary ($850,000) provided that Mr. Buccina is employed by the Company at February 15, 2013. As Mr. Buccina completed the term of the Buccina Employment Agreement, he was eligible for and subsequently received the retention bonus.

The Buccina Employment Agreement provides that Mr. Buccina receive a grant of 37,500 performance-based restricted shares of the Company's common stock. In consideration for such grant of performance-based restricted stock, Mr. Buccina agreed to forfeit 75,000 unvested shares of time-based restricted stock granted pursuant to a restricted stock agreement dated April 18, 2011. As the performance goals for 2012 were not attainted, the restricted stock award relating to 2012 performance goals was forfeited.

Pursuant to a previous employment agreement dated February 1, 2009, the HRCC granted Mr. Buccina 100,000 time-based restricted shares of the Company's common stock. Such grant was awarded on February 2, 2009 and such restricted shares vested on April 30, 2011. On April 12, 2010, Mr. Buccina was awarded a grant of 20,000 shares of time-based restricted shares, 10,000 of which vested on April 12, 2011 and 10,000 of which would have vested on April 12, 2013 and were accelerated to vest on February 15, 2013 pursuant to the terms of the Buccina Employment Agreement.

On April 18, 2011, Mr. Buccina received a grant of 150,000 performance-based restricted shares, 50,000 of which were subject to vesting based on achievement of Company performance goals for each of 2011 and 2012, and 50,000 of which were subject to vesting based on achievement of Company performance goals for 2013. As the performance goals for 2011 and 2012 were not attained, the restricted stock awards relating to each of 2011 and 2012 performance goals were forfeited. As Mr. Buccina retired as of February 15, 2013, the restricted stock award relating to 2013 performance goals was forfeited.

The Buccina Employment Agreement provides that in the event of termination without cause or resignation for good reason during the term of the agreement, Mr. Buccina will receive a severance payment equal to two years of his base salary and will receive a stipend equal to the cost of COBRA premiums for medical and dental coverage for two years.

Upon a "Change in Control" (as defined in the Buccina Employment Agreement), Mr. Buccina's stock options and restricted shares shall vest according to the terms of the respective stock agreements. If following a Change in Control he is discharged without cause or resigns for good reason during the term of the Buccina Employment Agreement, Mr. Buccina will receive a severance payment equal to two times his average base pay for the most recently completed three years plus two times the average bonus paid to him for the most recently completed three years, or, if applicable, the "280G Permitted Payment" (as such term is defined in the Buccina Employment Agreement). The Change in Control severance payment is contingent on Mr. Buccina signing and not timely revoking a general release of claims.

For information regarding potential severance payments and accelerated vesting of equity awards to which Mr. Buccina may be entitled upon certain events and/or a Change in Control, see "Potential Payments Upon Termination or Change in Control" on page 45.

The Buccina Employment Agreement contains a non-competition clause that, during Mr. Buccina's employment and for a period equal to one-half of the period for which he receives severance payments after termination of his employment, prohibits Mr. Buccina from engaging in or being financially interested in the retail department stores business of any competitor of the Company named in the Buccina Employment Agreement. The Buccina Employment Agreement also contains confidentiality provisions relating to the Company's confidential information.

Stephen R. Byers, Executive Vice President, Stores, Visual and Loss Prevention

On May 2, 2011, the Company and Stephen R. Byers entered into a new employment agreement effective May 1, 2011 (the "Byers Employment Agreement"). The Byers Employment Agreement replaces an employment agreement dated as of February 1, 2009 (the "2009 Agreement"), which expired April 30, 2011. The Byers Employment Agreement provides that the term shall be for one year and shall renew for successive one-year terms beginning May 1st of each year, unless terminated by either party pursuant to the terms of the Byers Employment Agreement.

Pursuant to the Byers Employment Agreement, Mr. Byers shall receive a base salary effective May 1, 2011 through April 28, 2012 at an annual rate of $510,000, and, effective April 29, 2012, at an annual rate of $470,000. This base salary is subject to review during the term of the Byers Employment Agreement and may be increased in the sole discretion of the Company.

The Byers Employment Agreement provides that Mr. Byers is eligible for a bonus under the Cash Bonus Plan under the following parameters: beginning with fiscal year 2012, a target bonus of 50% of base salary in effect on the last day of the fiscal year, with threshold and maximum bonuses as determined by the HRCC, and for fiscal year 2011, a target bonus prorated between the 100% target established by the 2009 Agreement for the first three months of the fiscal year and a 50% target for the remaining nine months of the fiscal year. The performance measures to be utilized and the weighting of these performance measures will be determined by the HRCC consistent with its determinations for other senior executives under the Cash Bonus Plan. Mr. Byers is also eligible to participate in plans and programs that are generally made available to the other employees of the Company.

On April 17, 2012, Mr. Byers was awarded a grant of 6,000 time-based restricted shares which vest on April 17, 2015. In addition, Mr. Byers received a grant of 10,000 performance-based restricted shares where were subject to vesting based on achievement of Company performance goals for 2012. As the performance goals for 2012 were not attained, the restricted stock award relating to 2012 performance goals was forfeited.

The Byers Employment Agreement provides that in the event of termination without cause or resignation for good reason, Mr. Byers will receive a severance payment equal to one and one-half years of his base salary and will receive a stipend equal to the cost of COBRA premiums for medical and dental coverage for one and one-half years. It also provides that if, prior to February 1, 2014, the Company exercises its right not to renew the Byers Employment Agreement and the Company and Mr. Byers do not enter into a new employment agreement and Mr. Byers is terminated without cause or resigns for good reason, he will be entitled to a severance payment equal to one year of his base salary. The severance payment is contingent on Mr. Byers signing and not timely revoking a general release of claims.

Upon a "Change of Control" (as such term is defined in the Byers Employment Agreement), (1) stock options and restricted shares held by Mr. Byers shall vest if Mr. Byers is discharged without cause or resigns for good reason and (2) Mr. Byers is prohibited from resigning for good reason for a period of six months following the Change of Control. If following a Change of Control he is discharged without cause or resigns for good reason within two years of the Change of Control, Mr. Byers will receive a severance payment equal to one and one-half times his average base pay for the most recently completed three years plus one and one-half times the average bonus paid to him for the most recently completed three years or, if applicable, the "280G Permitted Payment" (as such term is defined in the Byers Employment Agreement). The Change of Control severance payment is contingent on Mr. Byers signing and not timely revoking a general release of claims.

For information regarding potential severance payments and accelerated vesting of equity awards to which Mr. Byers may be entitled upon certain events and/or a Change in Control, see "Potential Payments Upon Termination or Change in Control" on page 45.

The Byers Employment Agreement contains a non-competition clause that, during Mr. Byers's employment and for a period equal to one-half of the period for which he receives severance payments after termination of his employment, prohibits Mr. Byers from engaging in or being financially interested in the retail department stores business of any competitor of the Company named in the Byers Employment Agreement. The Byers Employment Agreement also contains confidentiality provisions relating to the Company's confidential information.

The Company has entered into agreements and maintains plans that will require it to provide compensation to the Named Executive Officers (with the exception of Mr. Bergren, who retired as President and Chief Executive Officer on February 6, 2012) in the event of a termination of employment or a "Change in Control" of the Company, as such term is defined in the agreements and plans. The potential amount of compensation payable to each such Named Executive Officer in each situation is set forth in the tables below. The amounts shown in the tables assume that termination of the Named Executive Officer and/or a Change in Control occurred on February 2, 2013. The actual amounts to be paid will depend on the circumstances and time of the termination or Change in Control.

Keith E. Plowman—Executive Vice President, Chief Financial Officer and Principal Accounting Officer

At February 2, 2013, The Bon-Ton Stores, Inc. Amended and Restated 2009 Omnibus Incentive Plan and the Amended and Restated 2000 Stock Incentive and Performance-Based Award Plan were in effect. Each of these plans has been approved by the shareholders. There were no other equity compensation plans in effect. The following information concerning these plans is as of February 2, 2013:

Executive officers, directors and persons who own more than 10% of the Company's common stock are required to file reports of their holdings and transactions in Company stock with the SEC. To our knowledge, based solely on our review of copies of Section 16(a) forms furnished to us or upon written representations from these reporting persons that no other reports were required, all such filings in 2012 were made in a timely manner.

The Company's Code of Ethical Standards and Business Conduct provides that no director or associate of the Company shall engage in any transactions with the Company unless approved by the Audit Committee. The Audit Committee Charter provides that the Audit Committee shall have the responsibility to review and approve all such related party transactions. All executive officers and directors are required to disclose any possible related party transaction in which such executive officer or director may participate and each such transaction must be approved by the Audit Committee.

The Company leases its Oil City, Pennsylvania store from the estate of Nancy T. Grumbacher, Trustee of the 2002 Indenture of Trust of M. Thomas Grumbacher, pursuant to a lease entered into on January 1, 1981. The Oil City lease terminates on July 31, 2021, and the Company has two five-year renewal options. The rental payments during 2012 under this lease were $223,500. The aggregate amount of all payments due under the terms of the lease at the beginning of 2013 through the

remainder of the current term, which includes a lease renewal determined to be reasonably assured, is approximately $1,899,750. The late Ms. Grumbacher was the wife of Tim Grumbacher, Chairman Emeritus of the Board and Strategic Initiatives Officer.

Michael L. Gleim, a non-employee Director, received a $50,000 supplemental retirement benefit during 2012 from the Company which was paid pursuant to the terms of an employment agreement with Mr. Gleim with respect to his employment as Vice Chairman of the Company from 1995 to 2002.

Mr. Sherman is President of The Echo Design Group, Inc., which in 2012 supplied certain products to the Company. Payments for purchases by the Company in 2012 totaled $380,049.

Shareholder proposals for the 2014 Annual Meeting of Shareholders must be received by the Company by January 8, 2014 in order to be considered at the meeting and included in the Company's proxy statement and form of proxy relating to that meeting.

If notice of any proposal with respect to a matter to be addressed at the 2014 Annual Meeting of Shareholders is received by the Company after March 18, 2014, the proposals with respect to such matter shall be deemed "untimely" for purposes of Rule 14a-4(c) under the Securities Exchange Act and, therefore, the Company will have the right to exercise discretionary voting authority with respect to such proposal.

SEC regulations permit the Company to send a single set of proxy materials, which includes this proxy statement, the Annual Report to Shareholders and the Notice of Internet Availability of Proxy Materials, to two or more shareholders that share the same address. Each shareholder will continue to receive his or her own separate proxy card. Upon written or oral request, the Company will promptly deliver a separate set of proxy materials to a shareholder at a shared address that only received a single set of proxy materials for this year. If a shareholder would prefer to receive his or her own copy, please contact Mary Kerr, Vice President—Investor Relations, by telephone at (717) 757-7660, by U.S. mail at 2801 East Market Street, York, Pennsylvania 17402 or by e-mail at ir@bonton.com. Similarly, if a shareholder would like to receive his or her own set of the Company's proxy materials in future years or if a shareholder shares an address with another shareholder and both would like to receive only a single set of the Company's proxy materials in future years, please contact Ms. Kerr.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0000174781_1 R1.0.0.51160 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees 01 Lucinda M. Baier 02 Philip M. Browne 03 Michael L. Gleim 04 Tim Grumbacher 05 Brendan L. Hoffman 06 Todd C. McCarty 07 Jeffrey B. Sherman The Bon-Ton Stores, Inc. c/o Proxy Services PO Box 9142 Farmingdale, NY 11735 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 17, 2013. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by The Bon-Ton Stores, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 17, 2013. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To approve, on an advisory basis, the compensation of the named executive officers of the Company, as disclosed in the Proxy Statement; 3. To ratify the appointment of KPMG LLP as independent registered public accounting firm for 2013; and NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. Yes No Please indicate if you plan to attend this meeting

0000174781_2 R1.0.0.51160 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report/10-K Wrap is/are available at www.proxyvote.com . THE BON-TON STORES, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS June 18, 2013 The shareholder hereby appoints Brendan L. Hoffman and Keith E. Plowman, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of The Bon-Ton Stores, Inc. that the shareholder is entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 a.m. Eastern Time on June 18, 2013, at Bon-Ton's Corporate Office, 2801 E. Market Street, York, PA 17402, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS AND FOR THE PROPOSALS LISTED ON THE REVERSE SIDE. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE. Continued and to be signed on reverse side


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THE BON-TON STORES, INC.
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	2012		2011

Audit Fees(1)	$	1,912,506	$	1,800,578
Audit-Related Fees		—		—
Tax Fees(2)		55,345		238,931
All Other Fees		—		—

Position		Ownership Guideline

Chief Executive Officer			3x base salary
Vice Chairman			2x base salary
Executive Vice President			1x base salary


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		J. Gregory Yawman Vice President, General Counsel and Secretary

		Page

Voting Procedures and Security Ownership			1
Outstanding Shares and Voting Rights			1
Principal Shareholders			4
Security Ownership of Directors and Executive Officers			5
Proposal One: Election of Directors			7
Corporate Governance and Board of Directors Information			10
Governing Documents			10
Code of Conduct			10
Director Independence			10
Leadership Structure			10
Meetings of the Board of Directors			11
Board Committees			11
Role of the Lead Director			13
Role of the Board in Risk Oversight			14
Director Nominations Process and Director Qualifications			14
Director Attendance at Annual Meetings			15
Shareholder Communication with the Board of Directors			15
Compensation of Directors			15
Share Ownership Guidelines			17
Proposal Two: Approval, on an Advisory Basis, of Compensation of the Named Executive Officers			18
Proposal Three: Ratification of the Appointment of the Independent Registered Public Accounting Firm			19
Report of the Audit Committee			20
Executive Compensation			21
Compensation Discussion and Analysis			21
Report of the Human Resources and Compensation Committee			33
Risk Considerations in our Compensation Policies			33
Summary Compensation Table			34
Grants of Plan-Based Awards			36
Outstanding Equity Awards at Fiscal Year-End			37
Pension Benefits			38
Option Exercises and Stock Vested During 2012			39
Summary of Employment Agreements with Named Executive Officers			39
Potential Payments Upon Termination or Change in Control			45
Equity Compensation Plan Information			47
Section 16(a) Beneficial Ownership Reporting Compliance			47
Related Party Transactions			47
Shareholder Proposals			48
Householding of Proxy Materials			48

	Class A Common Stock					Common Stock(1)

Name and Address	Number of Shares		Percent of Class			Number of Shares			Percent of Class
Tim Grumbacher		2,951,490		100.00	%		4,619,424			23.39	%
2801 E. Market Street York, PA 17402
FMR, LLC							2,221,409	(2)		13.22	%
82 Devonshire St. Boston, MA 02109
Lombard Odier Asset Management (USA) Corp.							1,619,394	(2)		9.64	%
888 7^th Avenue New York, NY 10106
Morgan Stanley							1,225,501	(2)		7.29	%
1585 Broadway New York, NY 10036
Michael L. Gleim							994,652	(3)		5.92	%
2801 E. Market Street York, PA 17402
Gamco Investors, Inc.							861,500	(2)		5.13	%
One Corporate Center Rye, NY 10580-1435

Name

Tim Grumbacher	—	—	—
Michael L. Gleim	—	—	74,433
Byron L. Bergren	—	—	23,478
Brendan L. Hoffman	—	450,000	—
Anthony J. Buccina	157,019	—	—
Stephen R. Byers	82,519	21,000	—
Keith E. Plowman	51,019	45,000	—
Lucinda M. Baier	—	—	59,823
Philip M. Browne	—	—	72,320
Marsha M. Everton	—	—	72,320
Todd C. McCarty	—	—	59,900
Jeffrey B. Sherman	—	—	—
All directors and executive officers as a group (14 persons)	297,444	547,000	362,274

Name

Lucinda M. Baier	55,000	70,000	—		5,000	(2)	130,000
Byron L. Bergren	110,000	137,200	—		170,000	(3)	417,200
Philip M. Browne	66,250	75,000	—		—		141,250
Marsha M. Everton	70,000	75,000	—		20,000	(4)	165,000
Michael L. Gleim	98,750	80,000	—	(5)	140,000	(6)	318,750
Todd C. McCarty	61,250	70,000	—		—		131,250

Goal	Threshold		Target		Maximum

Net income	$	5.8 million	$	14.5 million	$	41.8 million
Net sales	$	2.918 billion	$	2.976 billion	$	3.087 billion
Adjusted EBITDA(1)	$	185.2 million	$	199.5 million	$	243.2 million

Name							Bonus Criteria (weighting)

Brendan L. Hoffman	50	%	100	%	200	%	Net income (75%)
							Net sales (25%)
Anthony J. Buccina	50	%	100	%	200	%	Net sales (50%)
							Adjusted EBITDA (50%)
Stephen R. Byers	25	%	50	%	100	%	Net sales (50%)
							Adjusted EBITDA (50%)
Keith E. Plowman	37.5	%	75	%	150	%	Net income (90%)
							Net sales (10%)

Name

Brendan L. Hoffman	—	3,320	—	67,190	808	20,000	57,665	—	148,983
Byron L. Bergren	946	308	5,000	3,961	—	—	—	1,187	11,402
Anthony J. Buccina	—	—	—	—	13,068	5,000	—	3,000	21,068
Stephen R. Byers	—	—	—	—	5,004	—	—	2,250	7,254
Tim Grumbacher	6,056	—	35,010	23,929	19,677	—	—	3,750	88,422
Keith E. Plowman	—	—	—	—	5,005	—	—	3,000	8,005

	Option Awards				Stock Awards

	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)			Value Realized on Vesting ($)(1)
Brendan L. Hoffman		—		—		—			—
Byron L. Bergren		—		—		200,000			1,000,000
		—		—		20,259	(2)		144,000
Anthony J. Buccina		—		—		—			—
Stephen R. Byers		—		—		—			—
Tim Grumbacher		—		—		—			—
Keith E. Plowman		—		—		50,000			336,000

Executive Benefits and Payments Upon Termination		Voluntary Termination Without Good Reason		Involuntary Termination Without Cause or Resignation for Good Reason(1)		Change in Control Without Termination		Change in Control with Termination(2)			Retirement		Disability		Death

Cash Severance	—		—	$	2,000,000		—	$	2,193,354	(3)		—		—		—
Pro-rated Non-Equity Incentive Compensation (Cash Bonus)	—	$	500,000		500,000	$	500,000		500,000		$	500,000	$	500,000	$	500,000
Value of Accelerated Restricted Stock(4)	—		—		7,205,000		7,205,000		7,205,000			—		7,205,000		7,205,000
Continuing Health and Welfare Benefits	—		—		30,430		—		30,430			—		—		—
Life Insurance	—		—		—		—		—			—		—		2,000,000

Total	—	$	500,000	$	9,735,430	$	7,705,000	$	9,928,784		$	500,000	$	7,705,000	$	9,705,000


		Sincerely,

		Byron L. Bergren Chairman of the Board

Executive Benefits and Payments Upon Termination	For Cause Termination		Voluntary Termination without Good Reason		Involuntary Termination Without Cause or Resignation for Good Reason(1)		Change in Control Without Termination		Change in Control with Termination(2)			Retirement		Disability		Death

Cash Severance		—		—	$	1,700,000		—	$	2,622,484	(3)		—		—		—
Value of Accelerated Restricted Stock(4)		—		—		—	$	622,250		622,250			—	$	786,000	$	786,000
Carson's Pension Plan(5)	$	316,328	$	316,328		316,328		—		316,328		$	316,328		316,328		316,328
Continuing Health and Welfare Benefits		—		—		36,884		—		—			—		—		—
Life Insurance		—		—		—		—		—			—		—		1,700,000

Total	$	316,328	$	316,328	$	2,053,212	$	622,250	$	3,561,062		$	316,328	$	1,102,328	$	2,802,328

Executive Benefits and Payments Upon Termination			Involuntary Termination Without Cause or Resignation for Good Reason(1)		Change in Control Without Termination		Change in Control with Termination(2)				Disability		Death

Cash Severance	—	—	$	705,000		—	$	1,237,253	(3)	—		—		—
Value of Accelerated Restricted Stock(4)	—	—		—	$	275,100		275,100		—	$	275,100	$	275,100
Continuing Health and Welfare Benefits	—	—		27,986		—		27,986		—		—		—
Life Insurance	—	—		—		—		—		—		—		940,000

Total	—	—	$	732,986	$	275,100	$	1,540,339		—	$	275,100	$	1,215,100

Executive Benefits and Payments Upon Termination								Death

Life Insurance	—	—	—	—	—	—	—	$	923,000

Total	—	—	—	—	—	—	—	$	923,000

Executive Benefits and Payments Upon Termination			Involuntary Termination Without Cause			Change in Control Without Termination			Change in Control With Termination				Disability		Death

Cash Severance	—	—	$	220,673	(1)		—		$	220,673	(1)	—		—		—
Value of Accelerated Restricted Stock(3)	—	—		—		$	589,500	(2)		589,500	(2)	—	$	589,500	$	589,500
Life Insurance	—	—		—			—			—		—		—		1,010,000

Total	—	—	$	220,673		$	589,500		$	810,173		—	$	589,500	$	1,599,500

		Weighted- average exercise price of outstanding options, warrants and rights (b)

Equity compensation plans approved by security holders
Stock options	694,230	$	18.50	—	(1)
Restricted shares	1,684,500		—	—	(1)
Restricted stock units	362,274		—	—	(1)

Subtotal	2,741,004		—	2,510,042
Equity compensation plans not approved by security holders	—		—	—

Total	2,741,004		—	2,510,042