<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
Commission File Number 33-43105
Title of Plan
THE BON-TON STORES, INC.
Profit Sharing/Retirement Savings Plan
Issuer of the securities held pursuant to the Plan
THE BON-TON STORES, INC.
2801 East Market Street
York, Pennsylvania 17402
(717) 757-7660
-------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE BON-TON STORES, INC.
PROFIT SHARING/RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1996 2
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1995 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1995 5
NOTES TO FINANCIAL STATEMENTS 6
SCHEDULE I - Item 27(a) -- SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AS OF DECEMBER 31, 1996 12
SCHEDULE II - Item 27(d) -- SCHEDULE OF REPORTABLE
TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 13
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
The Bon-Ton Stores, Inc.
Profit Sharing/Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of The Bon-Ton Stores, Inc. Profit Sharing/Retirement Savings Plan as
of December 31, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and supplemental schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of
December 31, 1996 and 1995, and the changes in net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, listed in
the index to financial statements, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The Fund Information in the statement of net assets
available for plan benefits and the statement of changes in net assets available
for plan benefits is presented for purposes of additional analysis rather than
to present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
Lancaster, Pa.
June 16, 1997
-1-
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1996
-----------------
<TABLE>
<CAPTION>
Retirement Savings Funds
---------------------------------------------------------------------------------
Stable Balanced Bon-Ton Stock Index
Total Income Fund Fund Stock Fund Fund Bond Fund
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $10,613,643 $ -- $4,896,012 $ -- $ 70 $ 29
Contributions Receivable - Employer &
employee/participant 1,697,435 120,707 126,381 40,544 159,963 49,841
Interest Receivable 46,277 374 142 14 2,150 146
Investments, at fair value:
EB Temporary Investment Fund 6,669,434 624,363 129,949 -- 5,258,012 99,736
EB MBA Government Corporate
Bond Index Fund 8,095,179 -- -- -- -- --
Government Securities Fund 6,718,992 4,697,155 -- -- -- --
Bon-Ton Common Stock 1,055,172 -- -- 1,055,172 -- --
Barclays Global Investors Bond Fund 1,665,398 -- -- -- -- 1,665,398
----------- ---------- ---------- ---------- ---------- ----------
Total investments 24,204,175 5,321,518 129,949 1,055,172 5,258,012 1,765,134
----------- ---------- ---------- ---------- ---------- ----------
Sales Pending Settlement 817,817 408,086 -- 1,645 -- --
----------- ---------- ---------- ---------- ---------- ----------
Total assets 37,379,347 5,850,685 5,152,484 1,097,375 5,420,195 1,815,150
LIABILITIES:
Purchases pending settlement 398,705 383,685 -- 1,582 -- --
----------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $36,980,642 $5,467,000 $5,152,484 $1,095,793 $5,420,195 $1,815,150
=========== ========== ========== ========== ========== ==========
<CAPTION>
Profit Sharing Funds
-------------------------
Main Option
Fund Fund
----------- ----------
<S> <C> <C>
ASSETS:
Cash $ 5,717,532 $ --
Contributions Receivable - Employer &
employee/participant 1,154,602 45,397
Interest Receivable 43,418 33
Investments, at fair value:
EB Temporary Investment Fund 557,374 --
EB MBA Government Corporate
Bond Index Fund 8,095,179 --
Government Securities Fund -- 2,021,837
Bon-Ton Common Stock -- --
Barclays Global Investors Bond Fund -- --
----------- ----------
Total investments 8,652,553 2,021,837
----------- ----------
Sales Pending Settlement 408,086 --
----------- ----------
Total assets 15,976,191 2,067,267
LIABILITIES:
Purchases pending settlement -- 13,438
----------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $15,976,161 $2,053,829
=========== ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-2-
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
DECEMBER 31, 1995
-----------------
<TABLE>
<CAPTION>
Retirement Savings Funds Profit Sharing Funds
--------------------------------------------------------------------------- ---------------------
Stable Balanced Bon-Ton Stock Index Main Option
Total Income Fund Fund Stock Fund Fund Bond Fund Fund Fund
----------- ----------- ---------- ---------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $ 23,714 $ 23,399 $ 13 $ 8 $ 81 $ 32 $ 181 $ --
Contributions Receivable -
Employer & employee/
participant 552,052 145,051 141,041 39,873 169,579 56,508 -- --
Interest Receivable 269 95 33 10 76 41 13 1
Investments, at fair value:
EB Temporary Investment Fund 1,024,655 456,946 28,538 18,154 86,441 45,118 389,458 --
EB MBA Government
Corporate Bond Index Fund 7,837,940 -- -- -- -- -- 7,837,940 --
Guaranteed Investment Contract 1,504,522 752,261 -- -- -- -- 752,261 --
Government Securities Fund 6,836,415 4,239,347 -- -- -- -- -- 2,597,068
Vanguard Wellington Fund 3,891,406 -- 3,891,406 -- -- -- -- --
Vanguard World Fund 606,813 -- -- -- -- -- 606,813 --
Vanguard Trustees Equity Fund 606,399 -- -- -- -- -- 606,399 --
Vanguard Index Trust Fund 4,776,637 -- -- -- -- -- 4,776,637 --
Bon-Ton Common Stock 684,780 -- -- 684,780 -- -- -- --
Wells Fargo Stock Fund 3,499,727 -- -- -- 3,499,727 -- -- --
Wells Fargo Bond Fund 1,597,432 -- -- -- -- 1,597,432 -- --
----------- ----------- ---------- ---------- ---------- --------- ---------- ---------
Total investments 32,866,726 5,448,554 3,919,944 702,934 3,586,168 1,642,550 14,969,508 2,597,068
----------- ----------- ---------- ---------- ---------- --------- ---------- ---------
Total assets 33,442,761 5,617,099 4,061,031 742,825 3,755,904 1,699,131 14,969,702 2,597,069
LIABILITIES:
Purchases pending settlement 59,228 -- -- -- -- -- 56,633 2,595
----------- ----------- ---------- ---------- ---------- ---------- ----------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $33,383,533 $ 5,617,099 $4,061,031 $ 742,825 $3,755,904 $1,699,131 $14,913,069 $2,594,474
=========== =========== ========== ========== ========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-3-
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Retirement Savings Funds Profit Sharing Funds
--------------------------------------------------------------------------- ------------------------
Stable Balanced Bon-Ton Stock Index Main Option
Total Income Fund Fund Stock Fund Fund Bond Fund Fund Fund
----------- ----------- --------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
CONTRIBUTIONS:
Employer $ 1,650,737 $ 94,105 $ 98,770 $ 32,013 $ 187,195 $ 38,655 $1,154,602 $ 45,397
Employee/Participant 3,430,136 984,186 830,735 304,618 991,331 319,266 -- --
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total contributions 5,080,873 1,078,291 929,505 336,631 1,178,526 357,921 1,154,602 45,397
INVESTMENT INCOME:
Net Appreciation
(Depreciation) in
Fair Market Value (122,257) (74,850) -- 194,798 -- (69,798) (142,136) (30,271)
Dividends and
Interest 1,612,693 344,696 184,976 722 11,876 114,000 811,815 144,608
Realized Gains
(Losses) 2,376,000 10,398 550,474 (29,888) 903,531 4,444 947,536 (10,495)
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total investment
income 3,866,436 280,244 735,450 165,632 915,407 48,646 1,617,215 103,842
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total additions 8,947,309 1,358,535 1,664,955 502,263 2,093,933 406,567 2,771,817 149,239
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
DEDUCTIONS FROM NET
ASSETS:
Benefit Payments and
Withdrawals 5,075,255 1,317,063 589,455 130,439 564,212 200,609 1,609,337 664,140
Administrative
Expenses 274,945 64,468 24,479 10,162 29,471 20,639 92,516 33,210
Interfund Transfers -
Net -- 127,103 (40,432) 8,694 (164,041) 69,300 6,842 (7,466)
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total deductions 5,350,200 1,508,634 573,502 149,295 429,642 290,548 1,708,695 689,884
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
INCREASE (DECREASE) IN
NET ASSETS AVAILABLE
FOR PLAN BENEFITS 3,597,109 (150,099) 1,091,453 352,968 1,664,291 116,019 1,063,122 (540,645)
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 33,383,533 5,617,099 4,061,031 742,825 3,755,904 1,699,131 14,913,069 2,594,474
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
End of year $36,980,642 $5,467,000 $5,152,484 $1,095,793 $5,420,195 $1,815,150 $15,976,191 $2,053,829
=========== ========== ========== ========== ========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-4-
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<TABLE>
<CAPTION>
Retirement Savings Funds Profit Sharing Funds
---------------------------------------------------------------------------- ------------------------
Stable Balanced Bon-Ton Stock Index Main Option
Total Income Fund Fund Stock Fund Fund Bond Fund Fund Fund
----------- ----------- ---------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
CONTRIBUTIONS:
Employer $ 367,142 $ 107,844 $ 87,638 $ 35,455 $ 97,699 $ 38,506 $ -- $ --
Employee/Participant 3,007,848 955,204 620,706 367,080 739,151 325,707 -- --
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total contributions 3,374,990 1,063,048 708,344 402,535 836,850 364,213 -- --
INVESTMENT INCOME:
Net Appreciation
(Depreciation) in
Fair Market Value 2,973,335 105,153 638,303 (653,061) 785,347 147,986 1,859,667 89,940
Dividends and Interest 1,591,440 384,628 155,065 1,127 71,149 99,060 707,439 172,972
Realized Gains
(Losses) 398,018 19,386 107,156 (91,548) 47,604 6,520 296,672 12,228
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total investment
income 4,962,793 509,167 900,524 (743,482) 904,100 253,566 2,863,778 275,140
TRANSFERS IN FROM
AM&A PLAN 3,439,873 2,222,622 360,373 144,680 260,481 91,562 360,155 --
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total additions 11,777,656 3,794,837 1,969,241 (196,267) 2,001,431 709,341 3,223,933 275,140
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
DEDUCTIONS FROM NET ASSETS:
- ---------------------------
Benefit Payments and
Withdrawals 4,903,540 1,734,521 422,194 134,789 454,008 193,422 1,473,918 490,688
Administrative Expenses 144,133 30,065 10,471 7,994 12,911 10,760 46,656 25,276
Interfund Transfers -
Net -- (4,519) (157,448) 253,874 (130,741) 38,459 13,653 (13,278)
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
Total deductions 5,047,673 1,760,067 275,217 396,657 336,178 242,641 1,534,227 502,686
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
INCREASE (DECREASE) IN
NET ASSETS AVAILABLE FOR
PLAN BENEFITS 6,729,983 2,034,770 1,694,024 (592,924) 1,665,253 466,700 1,689,706 (227,546)
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 26,653,550 3,582,329 2,367,007 1,335,749 2,090,651 1,232,431 13,223,363 2,822,020
----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
End of year $33,383,533 $5,617,099 $4,061,031 $ 742,825 $3,755,904 $1,699,131 $14,913,069 $2,594,474
=========== ========== ========== ========== ========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-5-
<PAGE>
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1996 AND 1995
--------------------------
1. DESCRIPTION OF PLAN:
--------------------
The following description of The Bon-Ton Stores, Inc. Profit Sharing/Retirement
Savings Plan (the Plan) provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
- -------
The Plan is a defined contribution plan covering substantially all employees of
the Company who have one year of service and are age 21 or older. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Employee Contributions
- ----------------------
Eligible employees may elect to make basic contributions from 1% to 15% of
compensation deducted on a pre-tax basis, and an additional 5% of compensation
on an after-tax basis subject to certain limitations. Effective January 1,
1994, pre-tax contributions for highly compensated participants are limited to
5% of the participant's compensation. For the Plan years 1996 and 1995, a
highly compensated participant, as defined by the Company, is a participant with
an annual salary equal to or greater than $150,000.
Employer Contributions
- ----------------------
Contributions to the Plan's Profit Sharing funds are made at the Company's
discretion out of the annual current earnings of the Company subsequent to the
close of the Company's fiscal year. Contributions are paid to the designated
trustee of the Plan and are subject to certain limitations as dictated by the
Internal Revenue Code. Contributions to the Profit Sharing funds are allocated
to each participant's account on or before the last day of the Plan year in the
ratio which the participant's compensation for the Plan year plus the
participant's compensation in excess of 40% of the Social Security Wage Base for
the Plan year bears to the total compensation for the Plan year plus the total
compensation in excess of 40% of the Social Security Wage Base for the Plan year
of all eligible participants. The maximum amount which may be allocated to any
member is 4.3% of the sum of the participant's compensation for the Plan year
plus the participant's compensation over 40% of the Social Security Wage base
for the Plan year.
-6-
<PAGE>
Contributions to the 401(k) funds are at the discretion of the Board of
Directors. These contributions are allocated to the respective 401(k) funds
based upon the allocations chosen by the participant. During 1996 and 1995, the
Company contributed 20% of the employees' contributions up to 5% of
compensation.
Participant Accounts
- --------------------
Each participant's account is credited with the employee's contribution and
allocation of: (a) the employer's contribution, (b) Plan earnings, and (c)
forfeitures of terminated participants' nonvested accounts. Forfeitures are
allocated on the same basis as contributions to the Profit Sharing funds.
Investments
- -----------
Investment of the Company's contribution to the Plan's Profit Sharing funds is
under the control and management of the Trustee, subject to the Company's
fiduciary direction through the Company's Board of Directors and/or the Plan's
Administrative Committee.
Investments of the participants' and the Company's contributions to the Plan's
401(k) funds are allocated at the discretion of the participant.
Total assets of the Plan are valued quarterly at fair market values by the
Trustee with exception to the Guaranteed Investment Contract which is valued at
contract value. Gains and losses as determined by this valuation are allocated
to each participant's account on the basis of each participant's account balance
to the total account balances at the prior valuation date.
Vesting
- -------
Participants are fully vested as to their own contributions. With regard to
employer matching contributions to the 401(k) funds, the Plan has adopted a
three-year cliff vesting policy, which provides for 100% vesting after three
years of service. Participant's interest in the Profit Sharing funds is fully
vested after five years of service.
Benefit Payments
- ----------------
Participants may make complete or partial withdrawals from their employee pre-
tax contribution accounts at any time after age 59 1/2 or at any time for
economic hardship, as defined by the Plan. After-tax employee contributions may
be withdrawn at any time. Upon termination of employment, participants are
entitled to receive the entire balance in their employee account and employer
account (if vested). In the event of death or disability of a participant
before termination of employment, 100% of a participant's account is distributed
to a beneficiary as defined. Withdrawals may be paid in a lump sum, in
installments, as an annuity for life, as a joint and survivor annuity, or any
combination of the foregoing at the option of the participant.
-7-
<PAGE>
Benefits due to retired and terminated participants, which are included in net
assets available for plan benefits in the accompanying statements at
December 31, 1996 and 1995, amounted to $1,872,039 and $1,596,494 respectively.
Plan Termination
- ----------------
Although it has not expressed an intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are reflected on the accrual basis of
accounting.
On January 1, 1995, the Plan adopted the American Institute of Certified Public
Accountants' Statement of Position 94-4, "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined Contribution Pension Plans"
(SOP 94-4). The adoption of SOP 94-4 had no impact on the attached financial
statements as the fully benefit-responsive contracts held by the Plan are valued
under SOP 94-4 at contract value which is the same basis used by the Plan in
prior years.
Estimates
- ---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investments
- -----------
Participants have the option to invest their 401(k) contributions in any of the
following five funds: Stable Income Fund, Balanced Fund, Bon-Ton Stock Fund,
Stock Index Fund and the Bond Fund. Profit Sharing contributions are allocated
to either a Main Fund or an Option Fund, which is managed by a more conservative
investment program. Only participants over the age of 55 may elect to have
contributions invested in the Option Fund.
All investments are presented at fair market value except for the fully benefit-
responsive guaranteed investment contract in the Stable Income Fund and the
Main Fund, which is stated at contract value. As of December 31, 1996, the
Mellon Bank EB Temporary Investment Fund, EB MBA Government Corporate Bond Index
Fund and the DF Government Securities Fund were greater than 5% of net assets.
The following investments as of December 31, 1995 were greater than 5% of net
assets: EB MBA Government Corporate Bond Index Fund, DF Government Securities
Fund, Vanguard Wellington Fund, Vanguard Index Trust Fund, and the Wells Fargo
Stock Fund.
-8-
<PAGE>
Realized Gains (Losses) and Net Appreciation (Depreciation) in Fair Market Value
- --------------------------------------------------------------------------------
The computations of both realized gains and losses and the net appreciation and
depreciation in fair market value are based on the difference between the fair
market values of the investments at the beginning of the year and the fair
market values on the sales dates or the end of the year, as applicable.
Administrative Expenses
- -----------------------
Under terms of the Plan agreement all expenses are paid by the Plan unless paid
directly by the Company.
3. TRUSTEES:
---------
Mellon Bank N.A. is the trustee of the Plan during 1996 and 1995. Effective
January 1, 1997 PNC Bank, N.A. was named trustee for the Plan. In connection
with this change in trustee, certain of the investments included within the
Plan's fund options available to participants will change. The change in
investments by fund option is as follows:
<TABLE>
<CAPTION>
Fund Option PNC Mellon
- --------------------- ----------------------- ------------------------
<S> <C> <C>
Balanced Invesco Total Return Vanguard Wellington
Stock Index Scudder Growth & Income Barclays Stock Index
Small Company Stock Invesco Dynamics None
Bond Invesco Select Income Barclays Bond Index
Stable lncome PNC Investment Contract DF Government Securities
</TABLE>
The Plan will also continue to offer the Bon-Ton Stock Fund. In anticipation of
the above investment changes, the Plan sold certain investments and invested the
proceeds in liquid assets as of yearend to facilitate the above investment
changes as of January 1, 1997.
4. GUARANTEED INVESTMENT CONTRACT:
-------------------------------
During the 1995 plan year, the Plan held a fully benefit-responsive guaranteed
investment contract with Protective Life Insurance Company. Protective Life
Insurance Company maintained the contributions in a pooled account. The account
was credited with earnings on underlying investments and charged for Plan
withdrawals and administrative expenses. The contract is included in the
financial statements at contract value with no valuation reserve against the
contract value, as reported to the Plan by Protective Life Insurance Company.
Contract value represents contributions made under the contract, plus earnings,
less Plan withdrawals and administrative expenses. For the year ended
December 31, 1995, the contract had an average yield of 8.52%. The crediting
interest rate as of December 31, 1995 under the contract was 8.18%, and the
contract value approximated the contract's fair market value.
-9-
<PAGE>
5. FEDERAL INCOME TAXES:
---------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated January 30, 1996, that the trust established under the Plan is qualified
under Sections 401(a) and 401(k) of the Internal Revenue Code and the trust
established under the Plan is exempt from federal income taxes under
Section 501(a).
6. PLAN AMENDMENTS:
----------------
Effective January 1, 1995, the Plan was amended to allow the employees of an
acquired subsidiary, Adam, Meldrum and Anderson Co., Inc., who were previously
participants in the First Restated AM&A Savings Plan to be eligible for
participation in the Plan. All existing balances in the First Restated AM&A
Savings Plan were transferred to the Plan based upon investment allocation
decisions made by the participants. These transfers are listed as a separate
line in the accompanying statement of changes in net assets available for plan
benefits for the year ended December 31, 1995. These participants received
credit for all years of service which were earned as an employee of Adam,
Meldrum, and Anderson Co., Inc.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
----------------------------------------------------
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1996 1995
----------- -----------
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $36,980,642 $33,383,533
Amounts allocated to withdrawing participants (1,872,039) (1,596,494)
----------- -----------
Net assets available for plan benefits per the
Form 5500 $35,108,603 $31,787,039
=========== ===========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended
December 31, 1996
-----------------
<S> <C>
Benefits paid to participants per the financial statements $5,075,255
Add: Amounts allocated to withdrawing participants at
December 31, 1996 1,872,039
Less: Amounts allocated to withdrawing participants at (1,596,494)
December 31, 1995 ----------
Benefits paid to participants per the Form 5500 $5,350,800
==========
</TABLE>
-10-
<PAGE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but not yet paid as of that date.
-11-
<PAGE>
SCHEDULE I
EIN 23-1269309
--------------
Plan 003
--------
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
Item 27(a) -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-------------------------------------------------------------
AS OF DECEMBER 31, 1996
-----------------------
<TABLE>
<CAPTION>
Number of
Description of Investment Shares Cost Market
- --------------------------------------- --------- ----------- -----------
<S> <C> <C> <C>
Mellon Bank EB Temporary Investment
Fund 6,669,434 $ 6,669,434 $ 6,669,434
Mellon Bank EB MBA Government
Corporate Bond Index Fund 21,357 8,141,909 8,095,179
Mellon Bank DF Government Securities
Fund 71,901 6,798,768 6,718,992
The Bon-Ton Stores, Inc. Common Stock 172,273 1,374,985 1,055,172
Barclays Global Investors Bond Fund 13,086 1,634,767 1,665,398
----------- -----------
$24,619,863 $24,204,175
=========== ===========
</TABLE>
The accompanying notes are an integral part of this schedule.
-12-
<PAGE>
SCHEDULE II
EIN 23-1269309
--------------
Plan 003
--------
THE BON-TON STORES, INC.
------------------------
PROFIT SHARING/RETIREMENT SAVINGS PLAN
--------------------------------------
ITEM 27(d)--SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Number of Number of Purchase Selling Cost of Net Gain/
Description Purchases Sales Price (1) Price (1) Items Sold (Loss)
- ------------------------------------------- --------- --------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Single Transactions in Excess of 5%
- -----------------------------------
Vanguard Index Trust Fund 1 $4,957,664 $2,649,634 $2,308,030
EB Temporary Investment Fund 1 $4,750,000 -- -- --
Barclays Global Investors Equity Index Fund 1 4,750,210 3,138,162 1,612,048
Vanguard Wellington Fund 1 4,896,012 3,888,157 1,007,855
Series of Transactions in Excess of 5%
- --------------------------------------
EB Temporary Investment Fund 576 319 9,925,158 9,030,381 9,030,381 --
BSDT-LMDAI-Overnight Investments 10 10 944,549 944,549 944,549 --
DF Government Securities Fund 11 9 1,248,548 1,260,445 1,282,144 (21,699)
</TABLE>
1) The purchase prices and selling prices of the above transactions represent
the current value of the assets on the transaction date.
The accompanying notes are an integral part of this schedule.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned thereunto duly authorized.
The Bon-Ton Stores, Inc.
Profit Sharing/Retirement Savings Plan
Date: June 30, 1997 By: /s/ Michael L. Gleim
----------------------------
Michael L. Gleim
Plan Administrator
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 33-43105.
/s/ Arthur Andersen LLP
Lancaster, Pennsylvania
June 30, 1997
