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EX-10.1 - EXHIBIT 10.1 - BON TON STORES INC | c11827exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 2011
THE BON-TON STORES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania | 0-19517 | 23-2835229 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2801 E. Market Street, York, Pennsylvania |
17402 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 717-757-7660
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement
On June 20, 2005, The Bon-Ton Stores, Inc. (the Company) entered into a Credit Card Program
Agreement (the CCPA) with HSBC Bank Nevada, N.A., a national banking association (HSBC), which
set forth the terms and conditions under which HSBC would issue credit cards to the Companys
customers and compensate the Company for sales made on the cards. Under the terms of the CCPA, the
Company is required to perform certain duties, including the duties to receive in-store customer
payments on behalf of HSBC and remit such payments to HSBC. On March 6, 2006, HSBC and the Company
entered into a First Amendment to the CCPA to include credit card accounts related to the stores
acquired by the Company from Saks, Inc., and on December 15, 2006, HSBC and the Company entered
into a Second Amendment to the CCPA to include credit card accounts related to the Parisian stores
acquired by the Company.
On August 4, 2009, HSBC and the Company entered into a Third Amendment to the CCPA (the Third
Amendment). Under the Third Amendment, Bon-Ton continued to participate in the revenue generated
by credit sales. The Third Amendment revised the compensation the Company will receive for certain
types of sales made on the credit cards, provided that the Company and HSBC will share certain
losses associated with the Credit Card Program and defined additional credit line protection for
the Companys loyal credit card customers. Either party could terminate the Third Amendment (the
Opt Out Right) between April 1, 2010 and July 31, 2010 upon providing notice (the Opt Out
Notice) and making a prescribed cash payment to the other party.
Effective July 30, 2010, HSBC and the Company entered into a Fourth Amendment to the CCPA (the
Fourth Amendment). Under the Fourth Amendment, the Opt Out Right was extended to August 31, 2010
and prior provisions regarding notice and prescribed cash payment to the other party remained
effective.
Effective August 31, 2010, HSBC and the Company entered into a Fifth Amendment to the CCPA
(the Fifth Amendment). Under the Fifth Amendment, either party could terminate the Third
Amendment by providing written notice to the other party no earlier than January 1, 2011 and not
later than January 31, 2011. Prior provisions regarding prescribed cash payment to the other party
remained effective.
On January 31, 2011, HSBC and the Company entered into a Sixth Amendment to the CCPA (the
Sixth Amendment). Under the Sixth Amendment, the parties amended the revenue participation
payment rates, terminated HSBCs obligation to make marketing fund contributions, provided for the
implementation of a change in annual percentage rate for new transactions on existing accounts,
provided for the outsourcing of certain HSBC functions, deleted the Opt Out Right, and provided for
additional obligations of HSBC with respect to the transfer of the credit card program assets if
the CCPA is not renewed at the end of its term.
The foregoing description of the Sixth Amendment is qualified in its entirety by reference to
the Sixth Amendment, a copy of which is included as Exhibit 10.1 hereto and incorporated herein by
reference.
Item 1.02. Termination of a Material Definitive Agreement
On January 31, 2011, the Company voluntarily prepaid its outstanding indebtedness under that
certain Second Lien Loan and Security Agreement among The Bon-Ton Department Stores, Inc. and The
Elder-Beerman Stores Corp., as Borrowers, the Company and certain of the Companys subsidiaries, as
Obligors, Sankaty Advisors, LLC, GB Merchant Partners, LLC and GA Capital, LLC, as Agents, and the
Lenders named therein, that provided for $75 million of term loans expiring November 18, 2013 (the
Term Loan Facility). As a result of such prepayment, the Term Loan Facility was terminated. The
Term Loan Facility was previously described in Item 1.01 of the Companys Current Report on Form
8-K filed with the Securities and Exchange Commission on November 24, 2009, which description is
incorporated herein by reference.
As provided in the Term Loan Facility, the Company paid an early termination fee of $3.75
million (5.0 % of the principal amount repaid) simultaneously with the prepayment of the
outstanding indebtedness.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit Number | Description of Exhibit | |||
10.1 | Sixth Amendment to the Credit Card Program Agreement |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
The Bon-Ton Stores, Inc. |
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By: | /s/ Keith E. Plowman | |||
Keith E. Plowman | ||||
Executive Vice President, Chief Financial Officer and Principal Accounting Officer |
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Dated: February 3, 2011