Document:

exv10w1

 

Exhibit 10.1

ADVANTA EMPLOYEES’ SEVERANCE PAY PLAN

Amended and Restated, Effective as of April 2, 2007

     The Company has adopted this amendment and restatement of the Plan in order to provide
guidelines pursuant to which the Company, in its sole discretion, may make severance payments to
employees who meet the eligibility requirements described below when they are permanently
terminated without cause from their active employment with the Company. The Plan, as herein
amended and restated, is applicable to terminations of employment occurring on and after the
Effective Date. The Plan, as previously in effect, governs terminations of employment that
occurred prior to the Effective Date.

SECTION 1. DEFINITIONS

     As used herein:

     1.1 “Benefits Committee” means a committee composed of the Company’s General Counsel and the
Company’s Vice President of Human Resources, or such other person or persons as may be designated
by the Board of Directors to serve as the Benefits Committee from time to time.

     1.2 “Board of Directors” means the Board of Directors of the Company.

     1.3 “Code” means Internal Revenue Code of 1986, as amended.

     1.4 “Company” means Advanta Corp. and, where appropriate in the context, Advanta Corp. and its
Subsidiaries.

     1.5 “Effective Date” means the effective date of this restatement of the Plan, as set forth
above.

     1.6 “Employee” means a person who, on or after the Effective Date, is employed by the Company
or a Subsidiary on a full time or part time basis at a stated rate of compensation, expressed in
terms of weekly, monthly or annual salary or hourly pay, on a regular and continuing basis,
specifically excluding all of the following: (a) any individual who was hired for a specific
limited period of time or on a sporadic or intermittent basis for periods of varying duration; (b)
any individual treated for federal income or wage tax purposes as an independent contractor or
consultant; and (c) any other individual who is a leased employee or is otherwise not treated for
tax or other purposes as an employee of the Company or a Subsidiary, notwithstanding that such
individual may subsequently be re-classified by a court, government agency, tribunal or arbitrator
as a common law employee of the Company.

     1.7 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

 

     1.8 “Full Years of Service” of an Employee means the Employee’s full years of employment with
the Company or a Subsidiary up to and including the Employee’s
Termination Date; except that incomplete years of service will be rounded up if the anniversary of the Employee’s date of
hire will occur within thirty (30) calendar days after the Employee’s Termination Date.

     1.9 “Pay” means the base salary or wage of an eligible Employee at his or her stated hourly,
weekly, monthly or annual rate as of the Employee’s Termination Date. “Pay” does not include
overtime pay, shift differentials, bonuses of any kind, incentive pay or any other remuneration. A
“Week of Pay” shall be calculated in accordance with the Company’s or Subsidiary’s regular payroll
practices and procedures and, in the case of hourly employees, shall be based upon the Employee’s
Scheduled Hours as reflected in the Company’s or Subsidiary’s then current payroll system during
the last regular pay period preceding the Termination Date.

     1.10 “Plan” means the Advanta Employees’ Severance Pay Plan as set forth herein, as amended
from time to time.

     1.11 “Plan Year” means calendar year.

     1.12 “Scheduled Hours” means the number of hours designated as such in the Company’s then
current payroll system.

     1.13 “Service” of an Employee means the period of service from such Employee’s most recent
date of hire through the date of such Employee’s Termination Date; provided, however, that prior
Service that would otherwise be disregarded, may, at the discretion of the Benefits Committee, be
included as additional Service.

     1.14 “Severance Pay” means a payment made to an eligible Employee pursuant to the Plan.

     1.15 “Subsidiary” means any entity other than the Company that is treated under Code Section
414(b) or (c) as a single employer along with the Company; provided, however, that any such entity
shall not be considered to be a Subsidiary if the Board of Directors or the Benefits Committee
provides that such entity shall be excluded from participation in the Plan. Notwithstanding the
foregoing, any other entity that does not otherwise qualify as a Subsidiary may be designated as a
Subsidiary for purposes of the Plan by the Board of Directors or the Benefits Committee.

     1.16 “Termination Date” means the date upon which the Employee’s employment with the Company
or a Subsidiary ceases.

SECTION 2. ELIGIBILITY

     2.1 An Employee shall be eligible to receive Severance Pay under the Plan if and only if all
of the following conditions are met (and the Employee is not disqualified from eligibility pursuant
to Section 2.2), as determined in the sole discretion of the Benefits Committee:

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          (a) The Employee is an Employee of the Company or a Subsidiary on or after the Effective Date
of the Plan;

          (b) The employment of the Employee is involuntarily and permanently terminated by the Company
or Subsidiary by which he or she is employed without cause while the Plan remains in effect under
circumstances that the Benefits Committee determines to be a permanent layoff, reduction-in-force,
facility closing, reorganization or consolidation, other similar business decision or because of a
mutual agreement between the Employee and the Company or Subsidiary, approved in writing by the
Vice President of Human Resources or the designee of the Vice President of Human Resources;

          (c) The Employee has returned all Company or Subsidiary property, submitted all travel,
expense and other such reports, and has paid to the Company or Subsidiary any amounts that are due;
and

          (d) The Employee duly executes and provides to the Company, within the time period specified
by the Company, a general release in such form as may be established for this purpose from time to
time at the Company’s discretion, and which the Employee does not revoke thereafter.

     2.2 Except to the extent required by applicable law, an Employee shall be ineligible to
receive Severance Pay under the Plan if any of the following disqualifying events are determined to
have occurred, which determination shall be made in the sole discretion of the Benefits Committee:

          (a) The Company or Subsidiary is sold or the portion of the Company’s or Subsidiary’s
operations at which the Employee works is sold or otherwise transferred to an entity (the “New
Owner”) other than the Company or Subsidiary, and the Employee is offered employment by or
transferred to the New Owner, regardless of the terms and conditions of employment offered by the
New Owner;

          (b) The Employee is terminated for cause, as determined in the sole discretion of the Company
or Subsidiary, including but not limited to termination for failure to satisfactorily perform
assigned duties, absenteeism or tardiness, insubordination, dishonesty, theft, willful misconduct,
fraud, harassment, any unethical, inappropriate or illegal behavior or activity; or any failure to
comply with the Company’s or Subsidiary’s rules, policies or procedures, which currently exist or
are hereafter adopted;

          (c) The Company or Subsidiary determines that the Employee, either prior or subsequent to the
Employee’s Termination Date, has (i) misappropriated or improperly used or disclosed any
confidential or proprietary information of the Company or a Subsidiary; (ii) failed to comply with
any contractual obligations to the Company or any Subsidiary, including, the Company’s Business
Ethics Agreement (if applicable); or (iii) violated the Company’s Code of Ethics, the Advanta
Employee Guide or any other Company policy;

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          (d) The Employee’s employment with the Company or a Subsidiary terminates by reason of the
Employee’s death, retirement or resignation;

          (e) As of the date the Employee’s position as an employee of the Company or a Subsidiary is
eliminated by reason of a permanent layoff, reduction-in-force, facility closing,
reorganization or consolidation other similar business decision as determined by the Benefits
Committee, the Employee shall have been absent from the performance of his or her duties with the
Company for more than six (6) consecutive months as a result of a leave of absence for any reason;

          (f) The Employee is offered (but refuses to take) another position as an employee of the
Company or any Subsidiary, at a level of base salary that is at least equal to 80% of such
Employee’s prior base salary, and which does not require such Employee to commute to a new
principal work site that is more than 50 miles farther from such Employee’s residence than such
Employee’s prior work site; or

          (g) The Company or Subsidiary determines in its sole discretion that either under the facts
and circumstances relating to the Employee’s cessation of employment, or more generally, it would
be inappropriate to pay severance benefits.

          (h) Notwithstanding any prior determination regarding eligibility for benefits hereunder, in
the event the Company or any Subsidiary determines at any time that any Employee is not eligible
for Severance Pay by reason of any failure to qualify for such Severance Pay under Section 2.1
above, or by reason of any disqualification from eligibility for such Severance Pay under Section
2.2 above, no Severance Pay shall be provided to such Employee, and, if any Severance Pay shall
have already been paid to such Employee, such Employee shall be required to repay to the Company
any amounts previously provided to such Employee hereunder. This Section 2.3 shall apply to any
event, action or conduct of the Employee whether or not such event, action or conduct occurred
prior to or after such Employee’s Termination Date.

SECTION 3. SEVERANCE PAY AMOUNT

     3.1 Except as otherwise provided in this Section 3, the Severance Pay to be provided to an
eligible Employee shall be the number of Weeks of Pay based upon his or her years of service,
grade, and salary (for Employees Grade 20 and above) stated in the schedule below:

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	 	 	And Grade is:
	 	 	 	 	 	 	 	 	 	 	 	 	Grade
20 and above, and salary
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$75,000 to	 	 
	If Full Years of	 	Less than	 	 	 	 	 	 	 	 	 	Less than	 	less than	 	$100,000
	Service are:	 	Grade 10	 	Grade 10-13	 	Grade 14-15	 	Grade 16-17	 	Grade 18-19	 	$75,000	 	$100,000	 	and above
	 
	Less than 1
	 	2	 	3	 	4	 	6	 	6	 	8	 	10	 	12
	1 to less than 2
	 	3	 	4	 	5	 	7	 	7.5	 	10	 	12	 	15
	2 to less than 3
	 	4	 	5	 	6	 	8	 	9	 	12	 	14	 	18
	3 to less than 4
	 	5	 	6	 	7	 	9	 	10.5	 	14	 	16	 	21
	4 to less than 5
	 	6	 	7	 	8	 	10	 	12	 	16	 	18	 	24
	5 to less than 6
	 	7	 	8	 	9	 	11	 	13.5	 	18	 	20	 	27
	6 to less than 7
	 	8	 	9	 	10	 	12	 	15	 	20	 	22	 	30
	7 to less than 8
	 	8	 	10	 	11	 	13	 	16	 	20	 	24	 	32
	8 to less than 9
	 	8	 	11	 	12	 	14	 	16	 	20	 	24	 	32
	9 to less than 10
	 	8	 	12	 	13	 	15	 	16	 	20	 	24	 	32
	10 or More
	 	8	 	12	 	14	 	16	 	16	 	20	 	24	 	32

     3.2 If an eligible 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.

     3.3 If an Employee due to sickness or injury receives 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 such other payments. Once such payments cease, the number of
weeks of Severance Pay to which the Employee is entitled shall be reduced by the number of weeks
that the Employee received such other payments.

     3.4 To the extent that an Employee receives any payment 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 Severance Pay payable under the Plan shall be correspondingly
reduced on a dollar for dollar basis. Similarly, to the extent that a federal, state or local law
requires the Company or Subsidiary to make a payment to an eligible Employee because of that
Employee’s involuntary termination, the Severance Pay payable under the Plan shall be
correspondingly reduced. Any overpayments made under the Plan shall be promptly repaid by the
Employee upon written request. The reduction of the Severance Pay payable under the Plan shall
not, however, be applicable by reason of receipt by the Employee of payments under the Employee
Savings Plan, the Employee Stock Ownership Plan, the Executive Deferral Plan or any other benefit
plan sponsored by the Company or any Subsidiary which is not in the nature of a severance plan or
is otherwise determined by the Benefits Committee not to reduce the benefits payable hereunder.

     The intent of this Section 3.4 is to coordinate the Severance Pay provided to an Employee
hereunder with any severance benefits that may be provided to such Employee under any other

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plan or
arrangement, and to ensure that such Employee is able to receive, in the aggregate, severance
benefits equal to the benefit that is provided under whichever of such plans or arrangements is the
greatest benefit to the Employee, but to avoid an Employee being able to receive in the aggregate,
severance benefits in excess of the benefits that would be provided to such Employee under any one
severance plan or arrangement.

     3.5 The Company or Subsidiary shall have the right to take such action as it deems necessary
or appropriate to satisfy any requirements under federal, state or local laws to withhold or to
make deductions from any benefits payable under the Plan.

     3.6 Notwithstanding anything to the contrary herein, in the event a terminated Employee who is
receiving Severance Pay pursuant to the terms of the Plan is rehired by the Company or any
Subsidiary, the Company shall have no obligation to pay any further Severance Pay for any period
following such Employee’s date of rehire.

     3.7 The Company, in its sole discretion, may increase the Severance Pay to an amount in excess
of that otherwise specified herein, subject to the limitations of Section 8. Any increase in
Severance Pay must be expressly authorized in writing by the Benefits Committee.

     3.8 If Code Section 280G is applicable to any benefits or payments made to the Employee, then,
if the aggregate present value of the “parachute payments” to the Employee, determined under Code
Section 280G(b) without regard to this Section 3.8 is at least three times the “base amount” (as
that term is used for purposes of Code Section 280G), then the compensation otherwise payable under
the Plan (and any other amount payable hereunder or any other severance plan, program, policy or
obligation of the Company, Subsidiary or any other affiliate thereof) shall be reduced so that the
aggregate present value of the parachute payments to the Employee determined under Code Section
280G, does not exceed 2.99 times the base amount.

SECTION 4. DISTRIBUTION OF BENEFITS

     4.1 The Company or Subsidiary will pay Severance Pay to each eligible Employee directly out of
the general assets of the Company or Subsidiary. The Company or Subsidiary, in its sole
discretion, shall pay any Severance Pay either in installments in accordance with the Company’s or
Subsidiary’s normal payroll practices or in a lump sum payment. Such payments shall commence as
soon as practicable following the Employee’s Termination Date once all conditions for eligibility
are met and continue until the Severance Pay due is paid, or until the Employee ceases to be
eligible by reason of any failure to qualify for or by reason of any disqualification from
eligibility for Severance Pay pursuant to Section 2 hereof.

     4.2 Severance Pay shall continue to be paid to the estate of any eligible Employee who dies
before the entire amount due hereunder is paid.

SECTION 5. PLAN ADMINISTRATION

     5.1 The Plan shall be administered by the Benefits Committee, which shall have complete
authority to prescribe, amend and rescind rules and regulations relating to the Plan.

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The Benefits
Committee may allocate and assign any of its responsibilities and duties for the operation and
administration of the Plan to such other persons as it determines appropriate.

     5.2 The determinations by the Benefits Committee on the matters referred to the Benefits
Committee shall be conclusive. The Benefits Committee shall have full discretionary authority, up
to the maximum discretion allowed by law, to administer, interpret and apply the terms of the Plan,
and determine any and all questions or disputes hereunder, including but not limited to eligibility
for benefits and the amount of benefits due.

     5.3 In the event of a claim by any person including but not limited to any Employee, or such
person’s authorized representative (the “Claimant”) as to whether he or she is entitled to any
Severance Pay or other 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 Benefits
Committee. The 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 Benefits Committee
by certified mail at the following address: Advanta Corp., Welsh and McKean Roads, Spring House,
PA 19477, or such other address as may be established from time to time by the Benefits Committee.
The Benefits Committee shall, within a reasonable period of time but not later than 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 Benefits Committee may elect to extend said
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. Such notice
shall indicate the special circumstances requiring the extension of time and the dates by which the
Benefits Committee expects to render the final decision. In no event shall a decision regarding a
claim for Severance Pay or other benefits be rendered later than 180 days after the Benefits
Committee receives the written claim. The Benefits Committee shall make all claim determinations
in accordance with the Plan and, where appropriate, shall apply Plan provisions consistently with
respect to similarly situated Claimants. 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; (d) set forth the
procedure by which the Claimant may appeal the denial of his or her claim; and (e) include a
statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a
whole or partial denial on appeal.

     In the event that a claim is wholly or partially denied, the Claimant may request a review of
such denial by making application in writing to the Benefits Committee within sixty (60) days after
receipt of such denial. Said application must be by certified mail. Upon written request to the
Benefits Committee, the Claimant shall be provided, free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim for benefits. The
Claimant shall also
have an opportunity to submit to the Benefits Committee, in writing, any comments, documents,
records, and other information relating to the claim for benefits.
The Benefits Committee shall take into account all comments,
documents, records, and other

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information relating to the claim
submitted by the Claimant, without regard to whether such information was submitted or considered
in the initial claim determination.

     Within a reasonable period of time, but not later than sixty (60) days after receipt of a
written appeal, the Benefits Committee shall decide the appeal and notify the Claimant of the final
decision; provided that the Benefits Committee may elect to extend said sixty (60) day period to up
to one hundred twenty (120) days after receipt of the written appeal, if special circumstances so
warrant and the Claimant is so notified in writing prior to the expiration of the original sixty
(60) day period. Such notice shall indicate the special circumstances requiring the extension of
time and the date by which the Benefits Committee expects to render the final decision.

     If the appeal is denied, the Claimant shall receive written notice of the denial, written in a
manner reasonably calculated to be understood by the Claimant, which (a) states the specific reason
or reasons for the denial; (b) makes specific reference to pertinent Plan provisions on which the
denial is based; (c) informs the Claimant of his or her right to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other information relevant
to the claim for benefits; and (d) includes a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA.

SECTION 6. PLAN MODIFICATION OR TERMINATION

     6.1 The Plan may be modified, amended or terminated at any time by the Board of Directors, the
Compensation Committee of the Board of Directors, or by the designee of either, with or without
notice. Any such modification, amendment or termination shall be effective on such date as the
Board of Directors, the Compensation Committee of the Board of Directors, or the designee of either
may determine.

     6.2 All claims for benefits hereunder, even if raised after termination of the Plan, shall be
determined pursuant to Section 5.3, and when acting pursuant thereto, the Benefits Committee shall
retain the authority provided in Section 5. Notwithstanding a termination of the Plan, each
Employee who has, prior to the termination of the Plan, been involuntarily terminated from
employment by the Company or the Subsidiary for which such Employee works and become eligible to
receive Severance Pay pursuant to the Plan, shall remain entitled to receive said Severance Pay
under the terms and conditions of the Plan without regard to the subsequent termination of the
Plan.

SECTION 7. GENERAL PROVISIONS

     7.1 Nothing herein contained shall be deemed to give any Employee the right to be retained in
the employ of the Company and/or any Subsidiary or to interfere with the right of the Company
and/or any Subsidiary to discharge him or her at any time, with or without cause.

     7.2 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,

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pledge or
in any other manner; 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. Notwithstanding
the foregoing, in the event an Employee who has been involuntarily terminated from employment and
become eligible to receive Severance Pay pursuant to the Plan subsequently dies, the benefit that
would otherwise have been payable to such deceased Employee shall be paid to the Employee’s estate
at the same time and in the same manner as such Severance Pay would have been paid to the Employee
had he or she survived.

     7.3 The Plan is unfunded.

     7.4 The Plan shall be governed by and construed in accordance with ERISA, and to the extent
not preempted, the laws of the Commonwealth of Pennsylvania.

     7.5 The Plan is intended to constitute a “welfare plan” under ERISA, and any ambiguities in
the Plan shall be construed to effect that intent.

SECTION 8. SPECIAL PROVISIONS RELATED TO CODE SECTION 409A

     8.1 The Plan is intended to provide benefits that will be characterized as separation pay
benefits that do not constitute a deferral of compensation or a deferred compensation plan for
purposes of Code Section 409A. For these purposes, references to Code Section 409A are deemed to
be references to such section of the Code, and any regulations (including proposed regulations) or
other guidance that may be issued by the IRS and/or the Treasury Department from time to time
interpreting applicable provisions of Code Section 409A.

     8.2 In connection with the above stated intent to provide separation pay benefits that are not
treated as deferred compensation, Severance Pay payable hereunder shall be limited as follows:

          (a) The Severance Pay payable to any one Employee hereunder shall not be in excess of two
times the lesser of:

               (i) The sum of the Employee’s annual compensation (as defined in Treasury Regulation Section
1.415-1(d)(2)) for services provided to the Company or Subsidiary as an Employee for the calendar
year immediately preceding the calendar year in which the Employee’s employment terminates; or

               (ii) The maximum amount that may be taken into account under a qualified plan pursuant to Code
Section 401(a)(17) for such year; and

          (b) The benefits, if any, payable to any Employee hereunder must be paid no later than
December 31 of the second calendar year following the calendar year in which the Employee’s
termination of employment occurs.

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EXHIBIT 10.2

ADVANTA CORP.

EMPLOYEE CHANGE OF CONTROL SEVERANCE PLAN

AMENDED AND RESTATED AS OF APRIL 2, 2007

SECTION 1. PURPOSE

     The Company has adopted this amendment and restatement of the Plan in order to provide
severance benefits, to employees whose employment is terminated as a result of a Change of Control
or a Subsidiary Change of Control. The Plan, as herein amended and restated, is applicable to
terminations of employment in connection with a Change of Control occurring on and after the
Restatement Effective Date. The Plan, as previously in effect, governs terminations of employment
that occurred prior to the Effective Date.

SECTION 2. DEFINITIONS

     As hereinafter used:

     2.1 The “Benefits Committee” means a committee composed of the Company’s General Counsel and
the Company’s Vice President of Human Resources, or such other person or persons as may be
designated by the Board of Directors to serve as the Benefits Committee from time to time.
Notwithstanding the foregoing, on and after the Closing Date with respect to a Change of Control,
for a period of twelve months following such Closing Date, no change to the membership of the
Benefits Committee shall be made except upon the resignation of a member of the Benefits Committee,
in which event the remaining member(s) of the Benefits Committee shall appoint a new member who
must have been an employee of the Company or a Subsidiary prior to the time a Change of Control
occurs.

     2.2 The “Board of Directors” is the Board of Directors of the Company.

     2.3 A “Change of Control” shall be deemed to have occurred upon the earliest to occur of the
following events: (i) the date the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) approve a plan or other arrangement pursuant to which the
Company will be dissolved or liquidated, or (ii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a definitive agreement to sell
or otherwise dispose of all or substantially all of the assets of the Company, or (iii) the date
the stockholders of the Company (or the Board of Directors, if stockholder action is not required)
and the stockholders of the other constituent corporation (or its board of directors if stockholder
action is not required) have approved a definitive agreement to merge or consolidate the Company
with or into such other corporation, other than, in either case, a merger or consolidation of the
Company in which holders of shares of the Company’s Class A Common Stock immediately prior to the
merger or consolidation will have at least a majority of the voting power of the surviving
corporation’s voting securities immediately after the merger or consolidation, which voting
securities are to be held in the same proportion as such holders’ ownership of Class A Common Stock
of the Company immediately before the merger or consolidation, or (iv) the date 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 (a) the
Company or any of its subsidiaries or any employee benefit plan [or related trust] sponsored or
maintained by the Company or any of its subsidiaries or (b) any person who, on the date the Plan is
effective, shall have been the beneficial owner of or have voting control over shares of Common
Stock of the Company possessing more than twenty-five percent (25%) of the aggregate voting power
of the Company’s Common Stock) shall have become the beneficial owner of, or shall have obtained
voting control over, more than twenty-five percent (25%) of the outstanding shares of the Company’s
Class A Common Stock, or (c) the first day after the date this Plan is effective when directors are
elected such that a majority of the Board of Directors shall have been members of the Board of
Directors for less than two (2) years, unless the nomination for election of each new director who
was not a director at the beginning of such two (2) year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the beginning of such
period.

     2.4 “Closing Date” means the date on which a transaction that is treated as a Change of
Control or a Subsidiary Change of Control is consummated.

     2.5 “Code” means the Internal Revenue Code of 1986, as amended.

     2.6 “Company” means Advanta Corp., and any successor to its business and/or assets which
assumes and agrees or is otherwise obligated to provide benefits under the Plan by operation of
law, or otherwise. Notwithstanding the foregoing, for purposes of Section 2.3 (“Change of
Control”) or Section 2.16 (“Subsidiary Change of Control”), the term “Company” shall only refer to
“Advanta Corp.”

     2.7 An “Employee” means a person who, after the Restatement Effective Date, is employed by the
Company or a Subsidiary both at the time of a Change of Control and as of the Closing Date or by a
specific Subsidiary both at the time it undergoes a Subsidiary Change of Control and as of the
applicable Closing Date, on a full or part-time basis at a stated rate of compensation expressed in
terms of weekly, monthly or annual salary or hourly pay, on a regular and continuing basis.

     The term “Employee” specifically excludes any person (a) who is receiving severance pay under
this or any other severance plan of the Company, (b) who was hired for a specific limited period of
time or on a sporadic or intermittent basis for periods of varying duration or (c) who signed an
agreement pursuant to which his or her employment will terminate in the future on a date certain.
In addition, the term Employee shall not include any other individual who is a leased employee or
is otherwise not treated for tax or other purposes as an employee of the Company or a Subsidiary,
notwithstanding that such individual may be subsequently be re-classified by a court, government
agency, tribunal or arbitrator as a common law employee of the Company.

     2.8 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

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     2.9 “Full Years of Service” of an Employee for purposes of determining Severance Pay pursuant
to Section 4.1(a) means the Employee’s full years of continuous employment up to and including the
Employee’s Termination Date.

     2.10 “Pay” means the base salary or wage of an eligible Employee at his or her stated hourly,
weekly, monthly or annual rate as of the Employee’s Termination Date. “Pay” does not include
overtime pay, bonuses of any kind, shift differentials, incentive pay or any other remuneration. A
“Week of Pay” shall be calculated in accordance with the Company’s regular payroll practices and
procedures applicable immediately preceding the applicable Closing Date and, in the case of hourly
employees, shall be based upon the Employee’s “Scheduled Hours” as reflected in the Company’s Human
Resources information system on the day preceding the Termination Date.

     2.11 “Plan” means the Advanta Corp. Employee Change of Control Severance Plan as set forth
herein, as amended from time to time.

     2.12 The “Restatement Effective Date” of the Plan is April 2, 2007.

     2.13 “Service” of an Employee for purposes of determining Severance Pay pursuant to Section
4.1(a) means Full Years of Service, plus additional periods of employment taken into account for
purposes of these calculations. These calculations are made taking into account service performed
from such Employee’s most recent date of hire through the date of such Employee’s Termination Date;
provided, however, that prior periods of service that would otherwise be disregarded, may, at the
discretion of the Benefits Committee, be included as additional Service.

     2.14 “Severance Pay” is a payment made to an eligible Employee pursuant to Section 4.1 hereof.
All Severance Pay due to an eligible Employee must be paid to the eligible Employee within two (2)
years of the date that the first Severance Pay is paid to that Employee and shall not exceed two
(2) years of Pay.

     2.15 “Subsidiary” means any entity other than the Company that is treated under Code Section
414(b) or (c) as a single employer along with the Company; provided, however, that any such entity
shall not be considered to be a Subsidiary if the Board of Directors or the Benefits Committee
provides that such entity shall be excluded from participation in the Plan. Notwithstanding the
foregoing, any other entity that does not otherwise qualify as a Subsidiary may be designated as a
Subsidiary for purposes of the Plan by the Board of Directors or the Benefits Committee.

     2.16 A “Subsidiary Change of Control” with respect to a Subsidiary shall be deemed to have
occurred if the Company or one of its wholly-owned or majority-owned subsidiaries no longer holds
any shares of such Subsidiary, or if all or substantially all of the assets of a such Subsidiary
are sold to an entity that is not owned or controlled, in whole or in part, by the Company or one
of its wholly-owned or majority-owned subsidiaries.

     2.17 “Termination Date” means the date upon which the Employee’s employment with the Company
or Subsidiary ceases.

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SECTION 3. ELIGIBILITY

     3.1 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 a Subsidiary after the Restatement Effective
Date of the Plan; and

          (b) The Employee is employed by:

               (i) Advanta Corp. at the time the Closing Date occurs;

               (ii) A Subsidiary at the time the Closing Date occurs; provided that Advanta Corp. continues
to hold at such time (directly or indirectly) more than fifty percent (50%) of the outstanding
capital stock of the applicable entity; or

               (iii) A Subsidiary at the time it undergoes a Subsidiary Change of Control and the time the
applicable Closing Date occurs; and

          (c) The Employee is terminated from employment within twelve (12) months after the applicable
Closing Date; unless such termination is: (1) because of the Employee’s death or Extended Leave of
Absence (as defined below), (2) because of the Employee’s Willful Misconduct (as defined below), or
(3) by the Employee other than for Good Reason (as defined below). In the event a person’s
employment is terminated for any reason prior to the occurrence of a Closing Date (either with
respect to a Change of Control or to a Subsidiary Change of Control, as may be applicable) he or
she shall not be entitled to any benefits under the Plan by virtue of said Change of Control or
Subsidiary Change of Control.

               (i) Extended Leave of Absence. Except as otherwise required by law, if an Employee
shall have been absent from the full-time performance of his or her duties by reason of such
Employee’s leave of absence for any reason for six (6) consecutive months or more, the Employee may
be terminated and shall not be entitled to any benefits under the Plan.

               (ii) Willful Misconduct. Termination of the Employee’s employment for Willful
Misconduct shall mean termination:

                    (a) Upon the willful and continued failure by the Employee to substantially perform his or her
duties which the Employee fails to cure (other than any such failure resulting from incapacity due
to physical or mental illness or an Extended Leave of Absence or the Employee’s termination of his
or her employment for Good Reason (as defined in Subsection 3.1(c)(iii))), after ten (10) days from
a written demand for substantial performance is delivered to the Employee by the Company or
Subsidiary by which he or she is employed, which demand specifically identifies the manner in which
the Company or 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 clearly and materially injurious
to the Company and/or Subsidiary, monetarily or otherwise. For

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purposes of this subsection, 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 interest of the Company
and/or 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 Benefits Committee issued pursuant to a meeting of the Benefits
Committee (after reasonable notice to the Employee and an opportunity for the Employee, together
with his or her counsel, to be heard before the Benefits Committee) finding that in the good faith
opinion of the Benefits Committee the Employee was guilty of conduct set forth above in this
Subsection 3.1(c)(ii) and specifying the particulars thereof in detail.

          (iii) Good Reason. The Employee shall be entitled to terminate his or her employment
for Good Reason and receive Severance Pay, if the Employee terminates his or her employment within
twelve (12) months after the applicable Closing Date and provides written notice to the Benefits
Committee no later than two weeks after the Employee’s Termination Date of the Employee’s election
to resign and the circumstances constituting the Good Reason to terminate his or her employment.
The Employee’s right to terminate his or her own employment pursuant to this Subsection shall not
be affected by his or her incapacity due to physical or mental illness. The Employee’s continued
employment for any period of time following any applicable Closing Date 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 the
Closing Date applicable to a Change of Control of the Company or to a Subsidiary Change of Control
with respect to the Subsidiary by which he or she was employed, of any of the following
circumstances:

                    (a) The Employee is demoted to a lower position;

                    (b) The Employee is assigned any duties inconsistent with the status of the position that the
Employee held immediately prior to the applicable Closing Date or an adverse alteration in the
nature or status of the Employee’s responsibilities or authority or in the quality or amount of
office accommodations or assistance provided to the Employee, from those in effect immediately
prior to such applicable Closing Date, which, taken in the aggregate, shall constitute a
constructive demotion;

                    (c) A reduction in the Employee’s annual base salary as in effect on the date immediately
prior to the applicable Closing Date, or as the same may be increased from time to time thereafter;

                    (d) The Company’s or Subsidiary’s requirement that the Employee’s site of principal employment
be more than 50 miles from the offices at which the Employee was principally employed immediately
prior to the date of the applicable Closing Date, except for required travel on the Company’s or
Subsidiary’s business to an extent substantially consistent with the Employee’s business travel
obligations immediately prior to such Closing Date;

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                    (e) The failure by the Company or Subsidiary to pay to the Employee any portion of his or her
compensation or compensation under any deferred compensation program of the Company or Subsidiary
within fifteen (15) days of the date such compensation is due;

                    (f) The failure by the Company or Subsidiary to continue in effect any compensation or benefit
plan or perquisites in which the Employee participates immediately prior to the applicable Closing
Date, which is material to his or her total compensation, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company or Subsidiary which experienced the Change of Control to continue the
Employee’s participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and the level of the
Employee’s participation relative to other participants, than existed at the time of the applicable
Closing Date;

                    (g) The failure by the Company or Subsidiary to continue to provide the Employee with benefits
substantially similar to those enjoyed by him or her under any of the Company’s or Subsidiary’s
life insurance, medical, dental, accident or disability plans in which the Employee was
participating at the time of the applicable Closing Date, the taking of any action by the Company
or Subsidiary which would directly or indirectly materially reduce any of such benefits, or the
failure by the Company or Subsidiary to provide the Employee with the number of paid vacation days
or Paid Time Off days to which the Employee is entitled in accordance with the vacation or Paid
Time Off policy applicable and in effect at the time of the applicable Closing Date;

                    (h) The failure of the Company or Subsidiary to obtain the unqualified agreement from any
successor to assume or adopt this Plan; or

                    (i) Any termination of the Employee’s employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection 3.1(c)(iv) hereof (and, if applicable, the
requirements of Subsection 3.1(c)(ii) hereof);

          (iv) Any purported termination of Employee’s employment by the Company or the Subsidiary 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. The Notice to
the Company or the Subsidiary (if only the Subsidiary has experienced a Change of Control) shall be
to the Benefits Committee. All such notices 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.

     3.2 An Employee may not receive Severance Pay if any of the following disqualifying events
occur:

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          (a) The Employee is receiving Severance Pay at the time the applicable Closing Date 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 Employee is not employed by the Company or by the specific Subsidiary at the time of
the Closing Date with respect to a Change of Control or a Subsidiary Change of Control, as the case
may be, or if no Closing Date occurs with respect to either a Change of Control or a Subsidiary
Change of Control with respect to the specific Subsidiary by which he or she is employed prior to
the termination of his or her employment; or

          (d) The Employee is party to an agreement that expressly provides that such Employee is not
entitled to severance or is not entitled to benefits under this Plan.

SECTION 4. SEVERANCE BENEFIT AMOUNT

     4.1 Except as otherwise provided in this Section 4, Severance Pay to be provided to an
eligible Employee shall be the greater of:

          (a) Four (4) Weeks of Pay for each Full Year of Service and one-twelfth (1/12) of four (4)
Weeks of Pay for each full month of Service completed in an incomplete Year of Service, with a
minimum of four (4) Weeks of Pay and a maximum of sixty (60) Weeks of Pay; or

          (b) The number of Weeks of Pay based upon his or her years of Service, grade, and salary (for
Employees above Grade 19) stated in the schedule below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	And Grade is:
	 	 	 	 	 	 	 	 	 	 	 	 	Above Grade 19 and salary
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$75,000 to	 	 
	If Full Years of	 	Less than	 	 	 	 	 	 	 	 	 	Less than	 	less than	 	$100,000
	Service are:	 	Grade 10	 	Grade 10-13	 	Grade 14-15	 	Grade 16-17	 	Grade 18-19	 	$75,000	 	$100,000	 	and above
	 
	Less than 1
	 	2	 	3	 	4	 	6	 	6	 	8	 	10	 	12
	1 to less than 2
	 	3	 	4	 	5	 	7	 	7.5	 	10	 	12	 	15
	2 to less than 3
	 	4	 	5	 	6	 	8	 	9	 	12	 	14	 	18
	3 to less than 4
	 	5	 	6	 	7	 	9	 	10.5	 	14	 	16	 	21
	4 to less than 5
	 	6	 	7	 	8	 	10	 	12	 	16	 	18	 	24
	5 to less than 6
	 	7	 	8	 	9	 	11	 	13.5	 	18	 	20	 	27
	6 to less than 7
	 	8	 	9	 	10	 	12	 	15	 	20	 	22	 	30
	7 to less than 8
	 	8	 	10	 	11	 	13	 	16	 	20	 	24	 	32
	8 to less than 9
	 	8	 	11	 	12	 	14	 	16	 	20	 	24	 	32
	9 to less than 10
	 	8	 	12	 	13	 	15	 	16	 	20	 	24	 	32
	10 or More
	 	8	 	12	 	14	 	16	 	16	 	20	 	24	 	32

     4.2 For purposes of calculating the number of Weeks of Pay owed under Section 4.1(b)
only, an incomplete year of Service will be rounded up to a Full Year of Service if the Employee’s
service anniversary date will occur within thirty (30) calendar days of the Employee’s Termination
Date.

     4.3 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
Sections 2.14, 4.9 and Section 9. Any increase in Severance Pay must be expressly authorized in writing by the
Office of the Chair.

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     4.4 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.

     4.5 If an Employee due to sickness or injury receives 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 said payments cease, the number of weeks
of Severance Pay to which the Employee is entitled shall be reduced to reflect the number of weeks
of any such worker’s compensation or long-term disability payments.

     4.6 Except as provided below with respect to participants in the Office of the Chairman
Supplemental Compensation Program, the Severance Benefit provided for in the Plan is the maximum
benefit that the Company or Subsidiary will pay for severance. To the extent that a federal, state
or local law might require the Company or Subsidiary to make a payment to an Employee because of
that Employee’s involuntary termination, the Severance Pay 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 this Plan (whether pursuant to a
contract or other severance plan or policy), the Severance Pay payable under this Plan shall be
correspondingly reduced. Any overpayments made under the Plan shall be promptly repaid after
written request. Severance Pay hereunder shall not be offset by reason of payments received by an
Employee due to his or her participation in the Employee Savings Plan, Executive Deferral Plan, any
retention arrangement, bonus plan, or other plan, arrangement or agreement which is not a severance
plan or which, by its terms, pays a benefit without regard to whether the Employee has terminated
employment. The intent of this Section 4.6 is to coordinate the Severance Pay provided to an
Employee hereunder with any severance benefits that may be provided to such Employee under any
other plan or arrangement, and to ensure that such Employee is able to receive, in the aggregate,
severance benefits equal to the benefit that is provided under whichever of such plans or
arrangements is the most generous, but to avoid an Employee being able to receive in the aggregate,
severance benefits in excess of the benefits that would be provided to such Employee under any one
severance plan or arrangement.

     4.7 Employees who are receiving severance benefits under the Advanta Employees’ Severance Pay
Plan are not eligible for benefits under the Plan. Employees who are eligible for benefits under
both the Advanta Employee’s Severance Pay Plan and the Plan shall receive Severance Pay under the
Plan. Employees who are eligible for benefits under both the Plan and under the Advanta Senior
Management Change of Control Severance Plan shall receive benefits under the Advanta Senior
Management Change of Control Severance Plan and not under the Plan.

     4.8 Employees who have entered into a separate agreement with the Company pursuant to which,
by the terms of the agreement, the Employee receives a benefit in lieu of a benefit under the Plan
are not eligible to receive a benefit under the Plan.

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     4.9 Excess Parachute Payments — Code Section 280G. If, at the time the Change of Control or
Subsidiary Change of Control occurs, Section 280G(b) of the Code is applicable to the Employee,
notwithstanding any other provision of this Plan, if the aggregate present value of the “parachute
payments” to the Employee, determined under Section 280G(b) is at least three times the “base
amount” determined under such Section 280G, then the compensation otherwise payable under this Plan
(and any other amount payable hereunder or any other severance plan, program, policy or obligation
of the Company, Subsidiary or any other affiliate thereof) shall be reduced so that the aggregate
present value of the parachute payments to the Employee determined under Section 280G, does not
exceed 2.99 times the base amount. The assumptions to be used in arriving at the determination of
such reductions shall be made by the Company’s Tax Counsel (as hereinafter defined) in accordance
with the principles of Section 280G of the Code. For these purposes, the term “Tax Counsel” means
tax counsel designated as such for purposes of the Plan prior to the date on which the relevant
change in “the ownership or effective control” of the Company or in “the ownership of a substantial
portion of the assets” of the Company (as these terms are used for purposes of Code Section 280G).
If no tax counsel has been expressly designated as Tax Counsel for purposes of the Plan, then Tax
Counsel shall be the law firm which was principally responsible for providing tax advice to the
Company immediately prior to the date on which occurred the relevant change in “the ownership or
effective control” of the Company or in “the ownership of a substantial portion of the assets” of
the Company. All fees and expense of the Tax Counsel will be borne by the Company.

     4.10 The Company and each Subsidiary 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. Provided, however, that this
Section 4.9 shall not authorize the Company to reduce any benefit beyond what was calculated by Tax
Counsel.

SECTION 5. DISTRIBUTION OF BENEFITS

     5.1 The Company and each Subsidiary will pay Severance Pay to each eligible Employee it
employed directly out of the general assets of the Company or Subsidiary. 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 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 The Plan shall be administered by the Benefits Committee, which shall have complete
authority to prescribe, amend and rescind rules and regulations relating to the Plan, consistent
with the express provisions of the Plan.

     6.2 The determinations by the Benefits Committee on the matters referred to such Committee
shall be conclusive. The Benefits Committee shall have full discretionary authority,

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the maximum discretion allowed by law, to administer, interpret and apply the terms of this
Plan, and determine any and all questions or disputes hereunder, including but not limited to
eligibility for benefits and the amount of benefits due. Subsequent to the Closing Date with
respect to a Change of Control, but not with respect to a Subsidiary Change of Control, the
Benefits Committee shall not have full discretionary authority; 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 In the event of a claim by any person including but not limited to any Employee, or such
person’s authorized representative (the “Claimant”) as to whether he 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 Benefits Committee. The claim must be
filed within forty-five (45) days following the date upon which the Claimant first learns of his
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 Benefits Committee by certified mail at the following
address: Advanta Corp., Welsh and McKean Roads, Spring House, PA 19477 or such other address as
the Benefits Committee may designate from time to time. The Benefits Committee shall, within a
reasonable period of time but not later than 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 Benefits Committee may elect to extend said 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. Such notice shall indicate the special circumstances
requiring the extension of time and the dates by which the Plan expects to render the final
decision. In no event shall a decision regarding a claim for benefits be rendered later than 180
days after the Plan receives the written claim. The Benefits Committee shall ensure that claim
determinations are made in accordance with this Plan document and, where appropriate, that Plan
provisions are applied consistently with respect to similarly situated Claimants. 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; (d) set forth the procedure by which the Claimant may appeal the denial of his or her
claim; and (e) include a statement of the individual’s right to bring a civil action under Section
502(a) of ERISA following a whole or partial denial on appeal.

     In the event that a claim is wholly or partially denied, the Claimant may request a review of
such denial by making application in writing to the Benefits Committee within sixty (60) days after
receipt of such denial. Said application must be via certified mail. Upon written request to the
Benefits Committee, the Claimant shall be provided, free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim for benefits. The
Claimant shall also have an opportunity to submit to the Benefits Committee, in writing, any
comments, documents, records, and other information relating to the claim for benefits. The
Benefits Committee shall take into account all comments, documents, records, and other information
relating to the claim submitted by the Claimant, without regard to whether such information was
submitted or considered in the initial claim determination.

-10-

 

     Within a
reasonable period of time, but not later than sixty (60) days after receipt of a written appeal, the Benefits Committee shall decide the appeal and notify the Claimant of the
final decision; provided that the Benefits Committee may elect to extend said sixty (60) day period
to up to one hundred twenty (120) days after receipt of the written appeal, if special
circumstances so warrant and the Claimant is so notified in writing prior to the expiration of the
original sixty (60) day period. Such notice shall indicate the special circumstances requiring the
extension of time and the date by which the Plan expects to render the final decision.

     If the appeal is denied, the Claimant shall receive written notice of the denial, written in a
manner reasonably calculated to be understood by the Claimant, which (a) states the specific reason
or reasons for the denial; (b) makes specific reference to pertinent Plan provisions on which the
denial is based; (c) informs the individual of his or her right to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and other information
relevant to the claim for benefits; and (d) includes a statement of the individual’s right to bring
a civil action under Section 502(a) of ERISA.

SECTION 7. PLAN MODIFICATION OR TERMINATION

     7.1 The Plan may be modified, amended or terminated at any time by the Compensation Committee
of the Board of Directors, the Board of Directors, or the designee of either, with or without
notice. Any such modification, amendment or termination shall be effective at such date as the
Compensation Committee, the Board of Directors or the designee of either may determine. If a
Closing Date with respect to a Change of Control occurs, the Plan may not be modified, amended or
terminated until twelve (12) months after the Closing Date of the Change of Control.

     7.2 All claims for benefits hereunder, even if raised after amendment, modification or
termination of the Plan, shall be determined pursuant to Section 6.3, and when acting pursuant
thereto, the Benefits Committee shall retain the authority provided in Section 6. Notwithstanding
any amendment, modification or termination of the Plan, all Employees who are eligible before the
date of amendment, modification or termination to receive Severance Pay pursuant to this Plan shall
remain entitled to receive said benefit under the terms and conditions of this Plan without regard
to amendment, modification or termination.

SECTION 8. GENERAL PROVISIONS

     8.1 Nothing herein contained shall be deemed to give any Employee the right to be retained in
the employ of the Company and/or any Subsidiary or to interfere with the right of the Company
and/or Subsidiary to discharge him or her at any time, with or without cause.

     8.2 Except as otherwise provided by law, or under the terms of the Plan, 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; 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.

     8.3 The Plan is unfunded.

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     8.4 The Plan shall be governed by and construed in accordance with ERISA, and to the extent
not preempted, the laws of the Commonwealth of Pennsylvania.

     8.5 The Plan is intended to constitute a “welfare plan” under ERISA, and any ambiguities in
the Plan shall be construed to effect that intent.

SECTION 9. SPECIAL PROVISIONS RELATED TO CODE SECTION 409A

     9.1 With respect to each Employee whose Severance Pay hereunder does not exceed two times the
maximum amount that may be taken into account under a qualified plan pursuant to Code Section
401(a)(17) for the calendar year preceding the year in which such Employee’s employment terminates,
the Plan is intended to provide benefits that will be characterized as separation pay benefits that
do not constitute a deferral of compensation or a deferred compensation plan for purposes of Code
Section 409A. For these purpose, references to Code Section 409A are deemed to be references to
such section of the Code, and any regulations (including proposed regulations) or other guidance
that may be issued by the IRS and/or the Treasury Department from time to time interpreting
applicable provisions of Code Section 409A. Benefits for any such Employee are, therefore, payable
hereunder, either by reason of an actual involuntary termination of an Employee, or by reason of an
Employee’s having Good Reason to terminate his employment and receive benefits hereunder. An
Employee’s entitlement to voluntarily terminate his or her employment for Good Reason and receive
benefits hereunder is intended to constitute a “window program” as that term is used for purposes
of Code Section 409A.

     9.2 To the extent the benefits payable hereunder cannot be paid in a manner that would cause
such benefits to be exempt being treated as nonqualified deferred compensation for purposes of Code
Section 409A, the Plan is intended to provided for nonqualified deferred compensation that will be
payable in a manner and at a time that complies in all respects with the distribution requirements
of Code Section 409A, so that no such Employee shall be taxable except on actual receipt of
benefits hereunder, and no amount shall be included in such Employee’s income by reason of the
application of Code Section 409A(a) (Severance Pay hereunder, therefore, being includible in the
Employee’s income pursuant to provisions of the Code other than Code Section 409A). As a
consequence, the following rules shall be generally applicable to the extent and in the manner
determined by Tax Counsel in order that Severance Pay benefits payable to Employees subject to this
Section 9.2 not be treated as violating the applicable rules of Code Section 409A:

          (a) Each such Employee shall be eligible to elect to receive his or her Severance Pay
hereunder either as a lump sum, or as a series of payments in accordance with the Company’s normal
payroll practice over the period of time corresponding to the number of Weeks of Pay that comprise
such Employee’s Severance Pay; provided, however, that any such election must be made on or before
December 31, 2007, consistent with the provisions of applicable transitional guidance published by
the IRS or Treasury, or by such later date as may be permitted under such guidance or as provided
in applicable proposed, temporary or final Treasury Regulations related to Code Section 409A. In
the event an Employee does not make any such election as to payment within the permitted time
period for such elections to be made

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without causing a violation of Code Section 409A, such Employee shall be deemed to have
elected to receive his or her Severance Pay hereunder in the form of a lump sum payment.

          (b) To the extent that the payment of Severance Pay to any Employee subject to this Section
9.3 would be paid, or would commence to be paid, at a time that would violate the prohibition, set
forth in Code Section 409A(a)(2)(B)(i), on payments of deferred compensation upon a termination of
employment of a “key employee” of a publicly traded company within six months following such
employee’s termination of employment, such payment or the commencement of such payments shall be
delayed until the earliest date payment of deferred compensation may be paid to such an Employee
without violating Code Section 409A(a)(2)(B)(i), and shall then be paid with interest (calculated
at the Prime Rate as published in the Wall Street Journal for such period of delay) from the date
such payment would have been made had this Section 9.3 not been contained in the Plan, through the
date of actual payment.

          (c) In anticipation of a Change of Control, the Company may transfer to a Rabbi Trust (as
hereinafter defined) funds that the Company determines to be sufficient to pay the amounts that are
to be paid to the Employee’s whose benefits are subject to this Section 9.3 plus any fees that are
anticipated as required to be paid in connection with the establishment and continuation of the
Trust (including, for example, trustee’s fees). Any such Rabbi Trust shall be revocable; provided,
however, that upon the consummation of a transaction that constitutes a Change of Control for
purposes of the Plan, such Rabbi Trust shall become irrevocable. For these purposes, the term
“Rabbi Trust” shall mean a grantor trust established to hold funds intended to be available to pay
benefits to be provided to Employees subject to this Section 9.3; provided, however, that such
trust shall be established and maintained in a manner that is consistent with the treatment of its
assets as assets of the Company for federal income tax purposes, which asset shall be subject to
the claims of the Company’s creditors in the event of the Company’s bankruptcy or insolvency. The
Rabbi Trust established hereunder shall be in a form that is substantially consistent with the form
of trust set forth in Revenue Procedure 92-64 (or any successor to such Revenue Procedure) as a
model grantor trust for use with plans providing for nonqualified deferred compensation. The
trustee of the Rabbi Trust shall be bank or an affiliate of a bank, or such other entity that is in
the business of acting as a trustee for such trusts.

-13-

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