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BRUNO v. HERSHEY FOODS CORP.

May 24, 1997

Frank Bruno, Plaintiff,
v.
Hershey Foods Corporation, et al., Defendants.



The opinion of the court was delivered by: GREENAWAY

 JOSEPH A. GREENAWAY, JR., District Judge,

 This matter comes before the Court on the motion to dismiss of Reed Smith Shaw & McClay, attorneys for Hershey Foods Corporation, Henry Heide, Inc., Henry Heide, Inc. Deferred Compensation Plan and Henry Heide, Inc. Pension Plan.

 FACTS

 Defendant, Henry Heide, Inc. ("Heide") employed plaintiff, Frank Bruno, from October 1985 until his termination in October 1993. Bruno served as Chief Financial Officer/Treasurer at Heide. Complaint P 8. In approximately November 1995, Hershey Foods Corporation ("Hershey") acquired Heide.

 In January 1989, Heide amended and restated its Deferred Compensation Plan for Senior Officers ("Compensation Plan"), originally adopted on September 29, 1976. Under the terms of the Compensation Plan, a person who is a "Senior Officer" is entitled to certain monthly retirement benefits. The term "Senior Officer" is defined in the Compensation Plan as including "Treasurer". *fn1" Innamorato Certif., Ex. 1, para. 1.6. *fn2" In addition, upon retirement, a Senior Officer is entitled to an annual benefit, for life, equal to 50% of his "Base Salary"reduced by his Pension Plan Benefit. Id. at para. 2.2(a). If the Senior Officer's employment is terminated prior to his attaining the age of 65, he is entitled to receive retirement benefits based on his percentage of vesting at the time of his termination, as determined by a schedule contained within paragraph 4.1 of the Compensation Plan. Moreover, "in the event of a Change in Control of the Company . . . a Senior Officer's vested percentage under Section 4.1 shall be 100%." Id. at para. 4.4. There in nothing in the Compensation Plan that requires the Senior Officer to be active at the time of the change in control in order to be entitled to accelerated vesting.

 The Compensation Plan also provides for post-retirement and pre-retirement death benefits in the event that the Senior Officer dies before becoming eligible to retire. Id. at para. 3.1 and 3.2. There is nothing in the Compensation Plan that requires the Senior Officer to be active at the date of death in order for his spouse to be eligible for a pre-retirement death benefit.

 In addition, Article 5, section 5.1 of the Compensation Plan states the following:

 Funding of Benefits. All benefits under this Plan shall be payable solely out of the general assets of [ILLEGIBLE WORDS] Innamorato Certif., Ex. 1.

 On November 28, 1993 Bruno entered into a Separation Agreement and General Release (the "Agreement") with Heide. Bruno Certif., Ex. A. *fn3" Paragraph 4 of Part I of the Agreement states "that this Separation Agreement and General Release is not intended to and should not affect any rights or benefits which BRUNO has or may have under the Heide Pension Plan or Deferred Compensation Plan for Senior Officers."

 On March 6, 1996 Bruno received a letter from Raymond J. Murphy, Benefits Planning and Analysis Manager for Hershey, stating that Bruno is entitled to vested benefits under both the Pension Plan and the Compensation Plan and that Hershey had assumed the administration of the Plans. Bruno Certif., Ex. B. Mr. Murphy also informed Bruno that he was not 100% vested until his 65th birthday and that upon attaining 65 he would be entitled to a monthly benefit equivalent to 35% vesting, or his percentage vested on the date of his termination from Heide.

 On May 10, 1996 Bruno wrote a letter to Murphy, which states, in part, that:

 
I disagree with the conclusion reached by your [Hershey's] legal department regarding the percentage of vesting. Specifically, Section 4.4 of the Plan states that a Senior Officer shall be 100% vested upon a change in control. There is nothing in the plan which requires that the Senior Officer be active at the time of the change in control. Therefore, my position is that I am 100% vested. I would also ...

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