EXHIBIT 10.9
LIBERTY PROPERTY TRUST -
MANAGEMENT SEVERANCE PLAN
TABLE OF CONTENTS
PAGE
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Section 1 Purpose.........................................1
Section 2 Definitions.....................................1
2.1 Applicable Multiplier...........................1
2.2 Board of Trustees...............................1
2.3A Change of Control...............................1
2.4 Claimant........................................2
2.5 Common Shares...................................2
2.6 Company.........................................2
2.7 Compensation Committee..........................2
2.8 Effective Date..................................3
2.9 Disability......................................3
2.10 Employee........................................3
2.11 Eligible Bonus..................................3
2.12 Extended Leave of Absence.......................3
2.13 Good Reason.....................................3
2.14 Liberty Property Limited Partnership............3
2.15 Liberty Property Trust..........................3
2.16 Notice of Termination...........................3
2.17 Paid Time Off...................................3
2.18 Pay.............................................3
2.19 Plan............................................4
2.20 Severance Pay...................................4
2.21 Subsidiary......................................4
2.22 Termination Date................................4
2.23 Willful Misconduct..............................4
2.24 Year of Pay.....................................4
Section 3 Eligibility.....................................4
3.1 Eligible Employees..............................4
3.2 Disability or Extended Leave of Absence.........4
3.3 Willful Misconduct..............................5
3.4 Good Reason.....................................5
3.5 Termination of Employment.......................6
3.6 Disqualification................................7
Section 4 Severance Benefit Amount........................7
4.1 Severance Pay...................................7
4.2 Increases to Severance Pay......................8
4.3 Unemployment Compensation.......................8
4.4 Sickness; Disability............................8
4.5 Reduction of Severance Pay......................8
4.6 Section 280G(b) of Code.........................8
(a) 8
(c) 9
4.7 Further Actions................................10
Section 5 Distribution of Benefits.......................10
5.1 Payment........................................10
5.2 Deceased Employees.............................10
Section 6 Plan Administration............................10
6.1 Compensation Committee.........................10
6.2 Determinations Conclusive......................10
6.3 Disputes.......................................10
6.4 Payment of Fees................................11
Section 7 Plan Modification or Termination...............12
TABLE OF CONTENTS
PAGE
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7.1 Automatic Termination..........................12
7.2 Modifications and Amendments...................12
7.3 Determination of Claims........................12
Section 8 General Provisions.............................12
8.1 No Right to Employment.........................12
8.2 Vacancies on Compensation Committee............12
8.3 Assignments....................................13
8.4 Plan Unfunded..................................13
8.5 No Set Off; No Mitigation......................13
8.6 Governing Law..................................13
8.7 Welfare Plan...................................13
SECTION 1
PURPOSE
The Company considers it essential to its best interests to foster the
optimum performance of its management employees. The Company recognizes
the possibility that a Change in Control of the Company or one or more
Subsidiaries may occur, or that the Company may engage in certain other
transactions which may affect its management employees, and that such
possibility, and the uncertainty and questions which it may raise, may
result in the distraction of management to the detriment of the
Company.
In order to encourage management employees to maintain their continued
attention and dedication to their duties and responsibilities, the
Company has adopted this Management Severance Plan.
SECTION 2
DEFINITIONS
As hereinafter used:
2.1 "Applicable Multiplier" with respect to each Employee, which
shall be either 1.99 or 2.99, shall be set forth opposite the name of
such Employee on Exhibit "A."
2.2 "Board of Trustees" means the Board of Trustees of Liberty
Property Trust.
2.3 A "Change of Control" shall be deemed to have occurred upon the
earliest to occur of the following events:
(a) the date on which the shareholders of the Company (or the
Board of Trustees, if shareholder action is not required) approve a
plan or other arrangement pursuant to which the Company will be
dissolved or liquidated, or
(b) the date on which the transactions contemplated by a
definitive agreement to sell or otherwise dispose of substantially all
of the assets of the Company are consummated, other than a transaction
in which the holders of the Common Shares immediately prior to the
transaction will have at least fifty percent (50%) of the voting power
of the acquiring entity's voting securities immediately after such
transaction (without regard to such holders' ownership of such
acquiring entity's voting securities immediately before or
contemporaneously with such transaction), which voting securities are
to be held by such holders immediately following such transaction in
substantially the same proportion among themselves as such holders'
ownership of the Common Shares immediately before such transaction, or
(c) the first date on which (i) the transactions contemplated by
a definitive agreement to merge or consolidate the Company with or into
the other constituent entity, or to merge such other entity with or
into the Company, have been consummated, other than, in any such case,
a merger or consolidation of the Company in which the holders of the
Common Shares immediately prior to the merger or consolidation will
have at least fifty percent (50%) of the voting power of the surviving
entity's voting securities immediately after such merger or
consolidation (without regard to such holders' ownership of such
acquiring entity's voting securities immediately before or
contemporaneously with such merger or consolidation), which voting
securities are to be held by such holders immediately following such
merger or consolidation in substantially the same proportion among
themselves as such holders' ownership of the Common Shares immediately
before such merger or consolidation, and (ii) members of the Board of
Trustees prior to the consummation of such merger or consolidation
cease to constitute a majority of the Board of Trustees, or
(d) the date on which any entity, person or group, within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934, as amended (other than the Company or any
Subsidiary or any employee benefit plan sponsored or maintained by the
Company or any Subsidiary), shall have become the beneficial owner of,
or shall have obtained voting control over, more than twenty percent
(20%) of the outstanding Common Shares (without regard to any
contractual or other restriction on the conversion or other exchange of
securities into or for Common Shares), or
(e) the first day after the date on which the Plan is effective
when a majority of the members of the Board of Trustees shall have been
members of the Board of Trustees for less than two (2) years, unless
the nomination for election of each new trustee who was not a trustee
at the beginning of such two (2)-year period was approved by a vote of
at least two-thirds of the trustees then still in office who were
trustees at the beginning of such period.
2.4 "Claimant" has the meaning set forth in Section 6.3.
2.5 "Common Shares" means the Common Shares of Beneficial Interest,
$0.001 par value, of the Company and any other securities evidencing
the common equity beneficial interest in the Company.
2.6 "Company" means Liberty Property Trust and/or Liberty Property
Limited Partnership, and any successor in interest thereto.
2.7 "Compensation Committee" means a committee composed of John A.
Miller, Frederick F. Buchholz, Stephen B. Siegel and Thomas C. DeLoach,
Jr., and/or any other individuals appointed to such committee or
substituted for the individuals named above by the Board of Trustees
prior to any Change of Control. Any two (2) such individuals shall
constitute a quorum. All members of the Compensation Committee must be
members of such committee prior to the time a Change of Control occurs.
2.8 "Effective Date" of the Plan is December 13, 2001.
2.9 "Disability" has the meaning set forth in Section 3.2.
2.10 "Employee" means a person:
(a) whose name is listed in Exhibit "A" hereto, as such Exhibit
may be amended or supplemented by the Compensation Committee from time
to time, or who has been designated in writing by the Compensation
Committee to participate in the Plan (even if such person's name is not
listed in Exhibit "A" hereto); and
(b) who is employed by the Company at the time of a change of a
Change of Control. The term "Employee" specifically excludes any
person (a) who is receiving severance pay at the time of the Change in
Control; or (b) who signed an agreement pursuant to which his or her
employment will terminate in the future on a date certain; or (c) is
party to an agreement which excludes him or her from participation in
the Plan.
2.11 "Eligible Bonus" means the largest annual incentive bonus earned
by an eligible Employee over the five (5)-year period preceding a
Change of Control, excluding all commissions and all bonuses awarded
by the Company other than on an annual basis (such as one-time grants
of restricted stock).
2.12 "Extended Leave of Absence" has the meaning set forth in Section
3.2.
2.13 "Good Reason" has the meaning set forth in Section 3.4.
2.14 "Liberty Property Limited Partnership" means Liberty Property
Limited Partnership, a Pennsylvania limited partnership.
2.15 "Liberty Property Trust" means Liberty Property Trust, a Maryland
real estate investment trust.
2.16 "Notice of Termination" has the meaning set forth in Section 3.5.
2.17 "Paid Time Off" means time when, in accordance with the regular
payroll practices and procedures applicable immediately preceding the
Change of Control, the Employee is entitled to receive remuneration
without reporting for work.
2.18 "Pay" means the base salary of an eligible Employee at his or her
stated weekly, monthly or annual rate as of the Employee's Termination
Date, or, if a higher amount, as of the date of the Change of Control.
"Pay" does not include overtime pay, bonuses of any kind, commissions,
incentive pay or any other remuneration. A "Year of Pay" shall be
calculated in accordance with the regular payroll practices and
procedures applicable immediately preceding the Change of Control.
2.19 "Plan" means this Management Severance Plan as set forth herein,
and as may be amended from time to time.
2.20 "Severance Pay" is a payment made to an eligible Employee
pursuant to Section 3.1. All Severance Pay due to an eligible Employee
must be paid to the eligible Employee within two (2) years after the
date that the first Severance Pay payment is made to such Employee.
2.21 "Subsidiary" means Liberty Property Limited Partnership and each
other subsidiary of Liberty Property Trust.
2.22 "Termination Date" means the date upon which the Employee's
employment ceases with the Company or any Subsidiary, as the case may
be.
2.23 "Willful Misconduct" has the meaning set forth in Section 3.3.
2.24 "Year of Pay" has the meaning set forth in Section 2.17.
SECTION 3
ELIGIBILITY
3.1 Eligible Employees. An Employee shall be eligible to receive
Severance Pay if and only if all of the following conditions are met
(and the Employee is not disqualified from eligibility pursuant to
Section 3.2):
(a) The Employee is an Employee of the Company or any Subsidiary
after the Effective Date of the Plan;
(b) The Employee is employed by the Company at the time a Change
of Control occurs; and
(c) The Employee is terminated from employment within two (2)
years after the Change of Control described in Section 3.1(b) occurs,
unless such termination is: (i) as a result of such Employee's death,
or such Employee's Disability or Extended Leave of Absence in
accordance with Section 3.2, (ii) as a result of such Employee's
Willful Misconduct or (iii) by the Employee other than for Good Reason.
In the event an individual's employment is terminated for any reason
prior to the occurrence of a Change of Control, such individual shall
not be entitled to any benefits under the Plan by virtue of such Change
of Control.
3.2 Disability or Extended Leave of Absence. If, as a result of an
Employee's incapacity due to physical or mental illness (a
"Disability"), or as a result of any other leave of absence (an
"Extended Leave of Absence"), the Employee shall have been absent from
the full-time performance of his or her duties for twelve (12)
consecutive months, the Employee shall not be entitled to any benefits
under the Plan.
3.3 Willful Misconduct. Termination of the Employee's employment for
"Willful Misconduct" shall mean termination:
(a) Upon the continued failure by the Employee to substantially
perform his or her duties, which failure the Employee fails to cure
(other than any such failure resulting from incapacity due to physical
or mental illness, Disability or an Extended Leave of Absence or the
Employee's termination of his or her employment for Good Reason) within
ten (10) days after a written demand for substantial performance is
delivered to the Employee by the Company or the Subsidiary by which he
or she is employed, which demand describes in reasonable detail the
manner in which the Company or such Subsidiary believes that the
Employee has not substantially performed his or her duties; or
(b) The willful engaging by the Employee in conduct which is
materially injurious to the Company and/or any Subsidiary, monetarily
or otherwise. For purposes of this Section 3.3, no act, or failure to
act, on the Employee's part shall be deemed "willful" unless done, or
omitted to be done, by the Employee in bad faith and without reasonable
belief that his or her action or omission was in, or not opposed to,
the best interests of the Company and/or any Subsidiary.
(c) Notwithstanding the foregoing, the Employee shall not be
deemed to have been terminated for Willful Misconduct unless and until
there shall have been delivered to the Employee a copy of a written
determination of the Compensation Committee issued pursuant to a
meeting of the Compensation Committee (after reasonable notice to the
Employee and an opportunity for the Employee, together with his or her
counsel, to be heard before the Compensation Committee) finding that in
the good faith opinion of the Compensation Committee the Employee was
guilty of conduct constituting Willful Misconduct, as set forth in this
Section 3.3, and describing such conduct in reasonable detail.
3.4 Good Reason. The Employee shall be entitled to terminate his or
her employment for Good Reason and receive Severance Pay if the
Employee provides written notice to the Compensation Committee no later
than two (2) weeks after the Employee's termination date or the
Employee's election to resign and the circumstances constituting the
Good Reason to resign. The Employee's right to terminate his or her
own employment pursuant to this Section 3.4 shall not be affected by
his or her incapacity due to physical or mental illness or Disability.
The Employee's continued employment shall not constitute consent to, or
a waiver of rights with respect to, any circumstance constituting Good
Reason. "Good Reason" shall mean, without the Employee's express
written consent, the occurrence after a Change in Control of any of the
following circumstances:
(a) failure of the Company to comply with and satisfy any of the
terms of this Agreement;
(b) any significant reduction by the Company of the material
aspects of the authority, duties, reporting responsibilities or job
responsibilities of Employee;
(c) any removal by the Company of Employee from the employment
grade, compensation level or officer positions which Employee holds as
of the effective date hereof except in connection with a promotion to
higher office or for a removal that has no material adverse impact on
the employment grade, compensation level or officer position Employee
holds with the Company;
(d) the requirement that Employee undertake business travel to
an extent substantially greater than is reasonable and customary for
the position Employee holds or the increase in Employee's normal
commute to Employee's current principal office such that Employee's
commute exceeds 40 miles; or
(e) the relocation of the offices of the Company at which
Employee is principally employed to a location more than 50 miles from
the location of such offices immediately prior to the date that is six
months before the Change in Control, or the Company's requiring
Employee to be based anywhere other than such offices, except for
required travel on the Company's business to any extent substantially
consistent with Employee's business travel obligations as of the date
of this Agreement.
Provided, that any determination as to whether any specific set of
circumstances relating to any Employee constitutes Good Reason as
defined in clauses (b) and (c) of this Section 3.4 shall be made by
Willard G. Rouse III in his reasonable discretion, such determination
to be conclusive and binding on all parties, whether or not Mr. Rouse
is affiliated with the Company at the time of such determination.
3.5 Termination of Employment. After the occurrence of a Change of
Control, any purported termination of the Employee's employment by the
Company or by the Employee shall be communicated by written Notice of
Termination to the other party. "Notice of Termination" shall mean a
notice that shall indicate the specific termination provision in the
Plan relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated. Any Notice of Termination
to the Company shall be directed to the Compensation Committee. All
Notices of Termination shall be sent (i) by certified or registered
mail and shall be deemed received three (3) business days after the
date of mailing; (ii) by Federal Express or similar overnight courier
and shall be deemed received one (1) business day after delivery to
Federal Express or similar overnight courier; or (iii) by personal
service and shall be deemed received on the same day as service.
3.6 Disqualification. An Employee may not receive Severance Pay if
any of the following disqualifying events occur:
(a) The Employee is receiving severance pay at the time the
Change of Control occurs;
(b) The Employee has signed an agreement pursuant to which his
or her employment will terminate in the future on a date certain;
(c) The Company does not undergo a Change of Control prior to
termination of his or her employment; or
(d) Except in the case of a Change of Control, the Employee
voluntarily terminates his or her employment with the Company.
SECTION 4
SEVERANCE BENEFIT AMOUNT
4.1 Severance Pay. Except as otherwise provided in this Section 4,
the Severance Pay to be paid to an eligible Employee shall be an amount
equal to the sum of (A) the product of the Applicable Multiplier for
such Employee multiplied by the sum of one (1) Year of Pay for such
Employee plus such Employee's Eligible Bonus, plus (B) the pro rata
portion, through the Termination Date, of any unpaid performance bonus
earned by such Employee for the year in which the Change of Control
occurs. In addition, except as otherwise provided in this Section 4:
(a) all of such Employee's options or other rights to acquire
Common Shares or partnership interests in Liberty Property Limited
Partnership, all unvested amounts contributed by the Company to the
Company-sponsored tax-qualified defined contribution plan with a cash
or deferred arrangement, commonly known as a "401(k) plan," for the
benefit of such Employee, and all restricted stock granted to such
Employee, shall vest immediately upon the Termination Date,
(b) for the year in which the Change of Control occurs and each
of the two successive years, the Company shall contribute to the
Company-sponsored tax-qualified defined contribution plan with a cash
or deferred arrangement, commonly known as a "401(k) plan," for the
benefit of such Employee an amount equal to the maximum amount for such
year permitted to be so contributed under applicable laws, and
(c) for three (3) years after the Termination Date, the Company
shall continue to provide such Employee with benefits substantially
similar to those enjoyed by such Employee under the Company's life
insurance, medical, accident or disability plans in which the Employee
was participating at the time of the Change of Control.
4.2 Increases to Severance Pay. The Company, in its sole discretion,
may increase the Severance Pay to an amount in excess of that specified
in Section 4.1, subject to the limitations of Section 4.6. Any
increase in severance pay must be expressly authorized in writing by
the Compensation Committee.
4.3 Unemployment Compensation. If an Employee applies for and
receives unemployment compensation payments for any period of time
during or for which Severance Pay is being paid, any Severance Pay
remaining to be paid shall not be reduced by the amount of any such
unemployment compensation payments.
4.4 Sickness; Disability. If an Employee due to sickness or injury
receives short-term disability payments, worker's compensation or long-
term disability payments after the Employee's Termination Date, the
Employee shall not receive any Severance Pay until the cessation of
said payments. Once such payments cease, the amount of Severance Pay
to which the Employee is entitled shall be reduced by the amount of any
such short-term disability, worker's compensation or long-term
disability payments.
4.5 Reduction of Severance Pay. The severance benefit provided for
in the Plan is the maximum benefit that the Company will pay for
severance. To the extent that a federal, state or local law might
require the Company to make a payment to an Employee because of that
Employee's involuntary termination (other than with respect to
unemployment compensation), the benefit payable under the Plan shall be
correspondingly reduced. To the extent that an Employee receives
severance pay in connection with the cessation of his or her employment
other than pursuant to the Plan (whether pursuant to a contract or
other severance plan or policy), the benefit payable under the Plan
shall be correspondingly reduced. Any overpayments made under the Plan
shall be promptly repaid after written request. Severance Pay that
will be offset does not include payments received by an Employee due to
his or her participation in any other benefit plan which is not a
severance plan, or payments made to an Employee for his or her accrued,
but unused vacation or Paid Time Off days.
4.6 Section 280G(b) of Code.
(a) If, at the time the Change of Control occurs, section
280G(b) of the Internal Revenue Code of 1986, as amended (the "Code"),
is applicable to the Employee and to the Company with respect to the
events associated with the Change of Control, then notwithstanding any
other provision of the Plan, in the event that it shall be determined
that any payment or distribution by the Company to or for the benefit
of an Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Plan or otherwise (the "Payment"), would
constitute an "excess parachute payment" within the meaning of section
280G of the Code, the Employee shall be paid an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Employee
after deduction of any excise tax imposed under section 4999 of the
Code, and any federal, state and local income, employment tax and
excise tax imposed upon the Gross-Up Payment, shall be an amount such
that the Employee will be in the same after-tax position as if no
excise tax under the Code had been imposed; provided, however, that the
Gross-Up Payment shall be payable only if it results in an after-tax
payment amount to the Employee at least $25,000 greater than the
Employee's after-tax position without the Gross-Up Payment. In the
event that the after-tax benefit would not meet this threshold, the
Payment will be reduced in such amount as is reasonably deemed
necessary by the Company so that no excise tax is imposed.
(b) For purposes of determining the amount of the Gross-Up
Payment, the Employee shall be deemed to pay federal income tax and
employment taxes at the highest marginal rate of federal income and
employment taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Employee's residence
(or, if greater, the state and locality in which the Employee is
required to file a nonresident income tax return with respect to the
Payment) on the date of termination, net of the maximum reduction in
federal income taxes that may be obtained from the deduction of such
state and local taxes (calculated by assuming that any reduction in
itemized deductions allowable to him applies first to reduce the amount
of such state and local taxes which would otherwise be deductible by
him). All determinations to be made under this Section 4.6 shall be
made by the tax counsel and Company's independent public accountant
immediately prior to the Change in Control (which may be the Company's
auditors (the "Referee"), which firm(s) shall provide its
determinations and any supporting calculations both to the Company and
the Employee within ten days of the Employee's termination date. Any
such determination by the Referee shall be binding upon the Company and
the Employee. All fees and expenses of the Referee in performing the
determinations referred to above shall be borne solely by the Company.
(c) As a result of uncertainty in the application of section
4999 of the Code at the time of the initial determination by the
Referee, it is possible that the Gross-Up Payment made will have been
an amount less than the Company should have paid pursuant to this
Section 4.6 (the "Underpayment") or an amount greater than the Company
should have paid pursuant to this Section 4.6 (the "Overpayment"). In
the event that it is finally determined that an Underpayment exists and
the Employee is required to make a payment of any excise tax or related
tax, the Gross-Up Payment shall be adjusted accordingly and the
shortfall shall be promptly paid by the Company to the Employee. In
the event that it is finally determined that an Overpayment exists and
the Company paid a Gross-Up Payment to the Employee in excess of the
amount of the Gross-Up Payment to which he is actually entitled
hereunder, such excess shall be promptly reimbursed by the Employee to
the Company. The Company agrees to indemnify and hold harmless the
Referee of and from any and all claims, damages and expenses resulting
from or relating to its determinations pursuant to this Section 4.6,
except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Referee.
4.7 Further Actions. The Company shall have the right to take such
action as it deems necessary or appropriate to satisfy any requirements
under federal, state or other laws to withhold or to make deductions
from any benefits payable under the Plan.
SECTION 5
DISTRIBUTION OF BENEFITS
5.1 Payment. Payments will be made in a single lump sum payment or
in installments in accordance with normal payroll practices, as elected
by the Employee. Such payments shall commence as soon as practicable
following the Employee's Termination Date and continue until the
benefit due is paid.
5.2 Deceased Employees. Severance Pay shall be paid to the estate of
any eligible Employee who dies before the entire amount due hereunder
is paid.
SECTION 6
PLAN ADMINISTRATION
6.1 Compensation Committee. The Plan shall be administered by the
Compensation Committee, which shall have complete authority to
prescribe, amend and rescind rules and regulations relating to the
Plan, and to make modifications and amendments to the Plan in
accordance with Section 7.2 hereof.
6.2 Determinations Conclusive. The determinations by the
Compensation Committee prior to a Change of Control on the matters
referred to such Committee shall be conclusive. Prior to a Change of
Control, the Compensation Committee shall have full discretionary
authority, the maximum discretion allowed by law, to administer,
interpret and apply the terms of the Plan, and to determine any and all
questions or disputes hereunder, including but not limited to
eligibility for benefits and the amount of benefits due. Subsequent to
a Change of Control the Compensation Committee shall not have full
discretionary authority; rather, its determinations shall be made
strictly in accordance with the terms of the Plan and shall be subject
to de novo review by a court of competent jurisdiction.
6.3 Disputes. In the event of a claim by any person, including but
not limited to any Employee (the "Claimant"), as to whether such person
is entitled to any benefit under the Plan, the amount of any
distribution or its method of payment, such Claimant shall present the
reason for his or her claim in writing to the Compensation Committee.
Such claim must be filed within forty-five (45) days following the date
upon which the Claimant first learns of his or her claim. All claims
shall be in writing, signed and dated and shall briefly explain the
basis for the claim. The claim shall be mailed to the Compensation
Committee by certified mail at the following address:
Liberty Property Trust
65 Valley Stream Parkway
Malvern, PA 19355
Attention: General Counsel's Office
Compensation Committee for the
Liberty Property Trust Management Severance Plan
Telephone:(610) 648-1700
Telecopy:(610) 644-2175 (fax)
The Compensation Committee shall, within ninety (90) days after receipt
of such written claim, decide the claim and send written notification
to the Claimant as to its disposition; provided that the Compensation
Committee may elect to extend such period for an additional ninety (90)
days if special circumstances so warrant and the Claimant is so
notified in writing prior to the expiration of the original ninety
(90)-day period. In the event the claim is wholly or partially denied,
such written notification shall (a) state the specific reason or
reasons for the denial; (b) make specific reference to pertinent Plan
provisions on which the denial is based; (c) provide a description of
any additional material or information necessary for the Claimant to
perfect the claim and an explanation of why such material or
information is necessary; and (d) set forth the procedure by which the
Claimant may appeal the denial of his or her claim. The Claimant may
request a review of such denial by making application in writing to the
Compensation Committee within sixty (60) days after receipt of such
denial. Such application must be via certified mail. The named
appeals fiduciary is the Compensation Committee or the person(s) named
by the Compensation Committee to review the Claimant's appeal. Such
Claimant (or his or her duly authorized representative) may, upon
written request to the Compensation Committee, review any documents
pertinent to his or her claim, and submit in writing issues and
comments in support of his or her claim or position. Within sixty (60)
days after receipt of a written appeal, the named appeals fiduciary
shall decide the appeal and notify the Claimant of the final decision;
provided that the named appeals fiduciary may elect to extend such
sixty (60)-day period to up to one hundred twenty (120) days after
receipt of the written appeal. The final decision shall be in writing
and shall include specific reasons for the decision, written in a
manner calculated to be understood by the Claimant, and specific
references to the pertinent Plan provisions on which the decision is
based.
6.4 Payment of Fees. All reasonable legal fees and expenses of the
Claimant incurred in pursuing a claim in accordance with Section 6.3
shall be reimbursed to such Claimant by the Company, but only if the
Claimant substantially prevails with respect to such claim.
SECTION 7
PLAN MODIFICATION OR TERMINATION
7.1 Automatic Termination. The Plan shall terminate automatically on
the day following the annual meeting of the Company's shareholders to
be held in 2004. Unless the Company's Board of Trustees determines,
prior to such termination, that the duration of the Plan shall not be
extended, then, on the date of each annual meeting of the Company's
shareholders (beginning with the meeting to be held in 2004), the Plan
shall be extended automatically until the day following the next annual
meeting of the Company's shareholders.
7.2 Modifications and Amendments. Prior to a Change of Control, the
Compensation Committee may, in its sole discretion, make any
modifications or amendments to the Plan that it deems desirable. If a
Change of Control occurs, the Plan may not be modified, amended or
terminated until two (2) years after the Change of Control occurs,
except for such modifications or amendments which do not adversely
affect the rights or reduce the amount of severance benefits payable to
of any eligible Employee under the Plan.
7.3 Determination of Claims. All claims for benefits hereunder, even
if raised after termination of the Plan, shall be determined pursuant
to Section 6.3, and when acting pursuant thereto, the Compensation
Committee shall retain the authority provided in Section 6.
Notwithstanding any termination of the Plan, if a Change of Control has
occurred, all Employees who are eligible before the date of termination
to receive Severance Pay pursuant to the Plan shall remain entitled to
receive said benefit under the terms and conditions of the Plan.
SECTION 8
GENERAL PROVISIONS
8.1 No Right to Employment. Nothing herein contained shall be deemed
to give any Employee the right to be retained in the employ of the
Company or to interfere with the right of the Company to discharge him
or her at any time, with or without cause.
8.2 Vacancies on Compensation Committee. If any of the positions on
the Compensation Committee becomes vacant, either the Chairman of the
Board or President of the Company may appoint such person or persons as
he or she determines, to carry out the responsibilities assigned to
such position under the Plan, so long as, if a Change of Control has
occurred within two (2) years prior to such appointment, such person
was employed by the Company or was a member of the Board of Trustees
prior to any such Change of Control.
8.3 Assignments. Except as otherwise provided by law, no right or
interest of any Employee under the Plan shall be assignable or
transferable, in whole or in part, either directly or by operation of
law or otherwise, including without limitation by execution, levy,
garnishment, attachment, pledge or in any other manner, but excluding
adjudication of incompetency; no attempted assignment or transfer
thereof shall be effective; and no right or interest of any Employee
under the Plan shall be liable for, or subject to, any obligation or
liability of such Employee, except to the extent specifically provided
for herein.
8.4 Plan Unfunded. The Plan is unfunded.
8.5 No Set Off; No Mitigation. Except as provided herein, the
Company's obligation to make the payments provided for in the Plan and
otherwise to perform its obligations hereunder shall not be affected by
any circumstances, including without limitation any set-off,
counterclaim, recoupment, defense or other right which the Company may
have against Employee or others. In no event shall Employee be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to Employee under any of the
provisions of the Plan, and such amounts shall not be reduced whether
or not Employee obtains other employment.
8.6 Governing Law. The Plan shall be governed by and construed in
accordance with the Employee Retirement Income Security Act of 1974, as
amended, and to the extent not preempted, the laws of the Commonwealth
of Pennsylvania.
8.7 Welfare Plan. The Plan is intended to constitute a "welfare
plan" under the Employee Retirement Income Security Act of 1974, as
amended, and any ambiguities in the Plan shall be construed to effect
that intent.
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