AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of February 25,
2009, by and between Suburban Propane, L.P. (the “
Partnership ”) and Mark A. Alexander (the “
Executive ”).
WHEREAS, the Partnership desires to retain the
services of the Executive and the Executive desires to perform
services for the Partnership, in each case, upon the terms and
conditions set forth herein; and
WHEREAS, the Partnership and the Executive are
party to an Employment Agreement dated March 5, 1996 (the
“Original Effective Date”)with such agreement having
been amended effective March 5, 1996, October 23, 1997,
November 2, 2005 and November 13, 2008 (collectively, the
“Previous Agreement”), and
WHEREAS, the Executive is currently the Chief
Executive Officer of the Partnership and desires to continue in
such position;
WHEREAS, the Partnership desires to continue to
employ the Executive as Chief Executive Officer;
WHEREAS, the Parties desire to amend and restate
the Previous Agreement to the extent necessary to cause the
definition of a Change of Control to be consistent with the
definitions used in other compensation plans maintained by the
Partnership.
NOW, THEREFORE, in consideration of the premises
and the mutual benefits and covenants contained herein, the parties
hereto, intending to be bound, hereby agree as follows:
The term of employment under this Agreement
shall continue to be for a period commencing on March 5, 2008
and ending on March 5, 2009 (the “Renewal Date”),
or if extended pursuant to this Section 1, ending on any
anniversary of the Renewal Date, subject to termination as
hereinafter provided (such initial period and extension(s) thereof
being hereinafter referred to as the “Employment
Term”). Unless earlier terminated in accordance with the
provisions of Section 5 hereof, upon the Renewal Date and upon
each anniversary date thereof, the Employment Term shall be
automatically extended for an additional period of one year upon
the terms and conditions set forth herein unless written notice of
termination (a “Non-Renewal Notice”) is given by either
party at least ninety days prior to the Renewal Date or relevant
anniversary thereof, in which event the provisions of
Section 6 shall apply.
2.1 Duties. The Partnership hereby employs the
Chief Executive Officer of the Partnership. The Executive shall
also serve (without compensation) as Chief Executive Officer of
Suburban Propane Partners, L.P. (the “MLP”). If
requested to do so, the Executive shall serve (without additional
compensation) on the board of supervisors of the Partnership and
the board of supervisors of the MLP (the “Board”) and
committees thereof. The Executive accepts such positions and agrees
to perform those duties, services and responsibilities incident
thereto as may be assigned to him or vested in him by the Board
from time to time. The Executive also agrees (a) to devote his
full business time, attention and skill to the performance of, and
to perform faithfully, efficiently and with undivided loyalty, such
duties, services and responsibilities and (b) to use his best
efforts to promote the interests of the Partnership and the
MLP.
2.2. Exclusive Employment . During the
Employment Term, the Executive shall not engage in other employment
or consulting work or any trade or business for his own account or
for or on behalf of any other person, firm or corporation.
Notwithstanding the foregoing, during the Employment Term the
Executive may (a) serve on (i) civil and charitable
boards and committees and (ii) such other corporate boards or
committees as are approved by the Board, which approval shall not
be unreasonably withheld and (b) manage personal investments,
provided that such service or management does not interfere
with the performance of the Executive’s duties
hereunder.
3.
Compensation and Benefits
In consideration for his services under this
Agreement, the Executive shall be compensated as
follows:
3.1 Salary. The Partnership shall pay to the
Executive during the Employment Term a salary (the “Base
Salary”), payable in accordance with the normal payroll
practices of the Partnership then in effect, in the amount of
$450,000 per fiscal year (pro rated in the case of the first fiscal
year and any other partial fiscal year). The amount of Base Salary
shall be reviewed by the Partnership on at least an annual basis
and may be increased as the Partnership deems appropriate but Base
Salary, as increased, may not be decreased during the Employment
Term.
3.2 Bonuses. For each fiscal year (or portion
thereof) of the Partnership during the Employment Term, the
Executive will be eligible for a bonus based on the attainment by
the Partnership of performance targets set by the compensation
committee of the Board (the “Compensation Committee”).
The amount of such bonus for a fiscal year or portion thereof (the
“Annual Bonus”) payable pursuant to the terms hereof
shall not exceed 100% of the Executive’s Base Salary for such
year (or portion thereof) to which it relates (the “Maximum
Annual Bonus”). If the Executive’s Base Salary is
changed during any fiscal year, the Maximum Annual Bonus for such
year shall be pro rated to reflect the Executive’s actual
base salary during such year. The Compensation Committee shall meet
within two months after the end of a performance period to certify
whether a performance target has been satisfied. If the
Compensation Committee so certifies, the Partnership will pay to
the Executive the Annual Bonus (subject to applicable withholding
taxes). Prior to the beginning of each fiscal year, the
Compensation Committee will meet to set performance targets for the
next fiscal year and the Executive will receive an Annual Bonus
with respect to future periods according to the aforementioned
guidelines. Any Annual Bonus under this Section 3.2 shall be
paid no later than the 15th day of the third month following the
end of the calendar year that includes the end of the fiscal year
used in determining achievement of the performance targets payable
(the exact payment date to be determined by the
Company).
3.3 Long-Term Incentive Compensation Programs.
The Executive shall be eligible to participate in long-term
incentive compensation programs (including the 2000 Restricted Unit
Plan and the 2003 Long-Term Incentive Plan) applicable to other
senior executives of the Partnership in the discretion of the
Compensation Committee from time to time.
3.4 Vacation. The Executive shall be entitled to
such number of annual paid vacation days and the number of days of
paid holidays, leaves of absence, and leaves for illness or
temporary disability as may he provided in the policies of the
Partnership in respect of other executives and senior managers of
the Partnership, but in no event shall the Executive be entitled to
less than four weeks vacation per year.
3.5 Reimbursement of Expenses. The Executive
shall be entitled to receive reimbursement of all reasonable
expenses incurred by him in connection with the performance of his
duties hereunder, in accordance with the policies and procedures of
the Partnership.
3.6 Benefits. The Executive shall be entitled to
participate in employee benefit and fringe benefit plans and
programs (including life, health, disability and officer indemnity
insurance and retirement plans) generally made available to other
senior executives and senior managers by the Partnership. Nothing
in this Agreement shall restrict the right of the Partnership to
amend, modify or terminate any such plans or programs. Without
duplication of any benefits received by the Executive pursuant to
the first sentence of this Section 3.6:
(a) The Partnership shall purchase during
the Employment Term, on behalf of the Executive, term life
insurance coverage payable to the Executive’s designated
beneficiary, with a face amount equal to three times the
Executive’s Base Salary.
(b) The Partnership shall include the
Executive in the Suburban Propane Company Supplemental Executive
Retirement Plan, effective as of October 1, 1994 (the
“SERP”) maintained by the Partnership immediately prior
to the Original Effective Date.
(c) The Partnership shall reimburse the
Executive for any and all costs and expenses reasonably incurred by
the Executive in connection with the Executive’s leasing of a
car provided, however , (i) the Partnership shall pay
the expenses not later than the end of the calendar year following
the calendar year in which the expenses are incurred, (ii) the
amount of such expenses that the Partnership is obligated to pay in
any given calendar year shall not affect the expenses that the
Partnership is obligated to pay in any other calendar year, and
(iii) the Executive’s right to have the Partnership pay
such expenses may not be liquidated or exchanged for any other
benefit.
(d) For purposes of any retirement plans
maintained by the Partnership (including, but not limited to, any
qualified pension and 401(k) plans and the SERP), the Executive
shall receive past service credit for service with Hanson America
Inc. for purposes of eligibility, vesting and benefit accruals
under such plans; provided, however, that the benefits payable to
the Executive under such plans of the Partnership shall be reduced
by and shall in no way duplicate benefits payable to the Executive
under such plans of Hanson America Inc.
4.
Non-Competition; Confidential Information
The Executive and the Partnership recognize that
due to the nature of the Executive’s engagement hereunder and
the relationship of the Executive to the Partnership and the MLP,
the Executive will have access to and will acquire, and may assist
in developing, confidential and proprietary information relating to
the business and operations of the Partnership, the MLP and their
affiliates, including, without limiting the generality of the
foregoing, information with respect to the business of the
Partnership, the MLP and their affiliates. The Executive
acknowledges that such information will be of central importance to
the business of the Partnership, the MLP and their affiliates and
that disclosure of it to, or its use by, others could cause
substantial loss to the Partnership and the MLP. The Executive
accordingly agrees as follows:
(a) Until the later of (i) if any
severance is payable pursuant to Section 6.2 hereof, the
expiration of the Severance Period (as defined in Section 6.2
hereof) or (ii) the second anniversary of the expiration or
termination of the Employment Term (the period from the Original
Effective Date until such later date being referred to as the
“Non-Competition Period”), the Executive shall not,
directly or indirectly, either individually or as owner, partner,
investor, agent, director, officer, employee, consultant,
independent contractor or otherwise, except for the account of and
on behalf of the Partnership, the MLP or their affiliates, own,
manage, operate, direct, join, control, be employed by, or
participate in the ownership, management, operation or control of,
or be connected in any manner with, including, but not limited to,
holding the positions of shareholder, member, director, officer,
consultant, agent, representative, independent contractor,
employee, partner or investor, in or for any business or enterprise
engaged in (i) the domestic retail distribution of propane for
residential, commercial, industrial (including engine fuel),
agricultural or other retail users, (ii) the wholesale
distribution of propane in the United States or the wholesale
brokerage of propane in Canada, or (iii) the domestic retail
distribution of propane-related supplies or equipment, including
home and commercial appliances.
(b) During the Non-Competition Period, the
Executive shall not, directly or indirectly, either individually or
as owner, partner, shareholder, member, investor, agent, director,
officer, employee, consultant, agent, independent contractor or
otherwise, except for the account of and on behalf of the
Partnership, the MLP or their affiliates, solicit, endeavor to
entice away from the Partnership, the MLP or their affiliates, or
otherwise engage in any activity to, directly or indirectly,
influence, attempt to influence, disrupt or terminate the
relationship of the Partnership, the MLP or any of their affiliates
with, any of its customers, prospective customers, suppliers,
prospective suppliers, employees, directors, independent
contractors, representatives, agents or other persons or entities
with a past, present or prospective relationship with the
Partnership, the MLP or any of their affiliates.
(c) Nothing in this Section 4 shall be
construed to prevent the Executive from owning as an investment not
more than 0.5% of a class of equity or debt securities issued by
any competitor of the Partnership, which securities are publicly
traded and registered under Section 12 of the Securities
Exchange Act of 1934.
4.2 Proprietary Information. The Executive shall
keep confidential any and all “confidential or proprietary
information” (as defined hereinafter) of the Partnership and
its affiliates, and shall not, other than in connection with the
business of the Partnership and the MLP or as required, in the
opinion of counsel, by law or an order of a court or regulatory
agency, directly or indirectly, disclose any such information to
any person or entity, or use the same in any way and then, only
after as much notice is provided to the Partnership as is
practicable under the circumstances. Upon the expiration of the
Employment Term, the Executive shall promptly return to the
Partnership all property, keys, notes, memoranda, writings, lists
(including customer lists), files, reports, correspondence, logs,
machines, software, technical data or any other tangible product or
document which has been produced by, received by, or otherwise
submitted to the Executive by the Partnership or any of its
affiliates at any time. For purposes of this Agreement,
“confidential or proprietary information” means any
information relating to the Partnership or any affiliate of the
Partnership which is not generally available from sources outside
the Partnership or any of its affiliates (other than as a result of
disclosure by the Executive).
4.3 Company’s Remedies for Breach. It is
recognized that damages in the event of breach of this
Section 4 by the Executive would be difficult to ascertain,
and it is therefore agreed that each of the Partnership and the
MLP, in addition to and without limiting any other remedy or right
either may have, shall have the right to an injunction or other
equitable relief in any court of competent jurisdiction, enjoining
any such breach or prospective breach. The existence of this right
shall not preclude any other rights and remedies at law or in
equity which the Partnership or the MLP may have. Neither the
Partnership nor the MLP shall be required to post any bond in
connection with the foregoing. The Executive acknowledges and
agrees that the provisions of this Section 4 are reasonable
and necessary for the successful operation of the Partnership and
the MLP and that the Partnership would not have entered into this
Agreement if the Executive had not agreed to the provisions of this
Section 4.
4.4 Enforceability. The covenants set forth in
Sections 4.1 and Section 4.2 shall be construed as
independent of any of the other provisions contained in this
Agreement and shall be enforceable as aforesaid, notwithstanding
the existence of any claim or cause of action of the Executive
against the Partnership, the MLP or any of their affiliates,
whether based on this Agreement or otherwise. In the event that any
of the provisions of this Section 4 should ever be adjudicated
to exceed the time or other limitations permitted by applicable
law, then such provisions shall be deemed reformed in any
jurisdiction to the time or other limitations permitted by
applicable law. The provisions of this Section 4 shall survive
the expiration or the termination of this Agreement. If the
Partnership asserts a claim against the Executive for violation of
any covenant set forth in Section 4.1 or Section 4.2 and
the Executive prevails on the merits in a material respect on such
claim, the Partnership shall pay the reasonable attorneys’
fees and costs incurred by the Executive in connection with such
claim.
5.
Termination of Employment
5.1 Death or Disability. The Employment Term
shall terminate automatically upon the Executive’s death or
Disability (as hereinafter defined). “Disability” shall
mean any physical or mental impairment, infirmity or incapacity
rendering the Executive substantially unable to perform his duties
hereunder for a period of time exceeding 180 days in the
aggregate during any period of twelve consecutive months. A
determination of Disability shall be made by a physician
independent of the Partnership chosen by the Partnership. In the
event of an initial determination of Disability, the Executive may
seek a second opinion of his choosing. Where the first and second
opinions differ, a third opinion rendered by a physician mutually
agreed to by the Partnership and the Executive shall be deemed
final. For so long as the Executive is receiving the Base Salary
during such twelve month period, any benefits under the
Partnership’s disability insurance policies to which the
Executive would be entitled with respect to such period shall
accrue to, and be for the benefit of, the Partnership.
5.2 Cause. The Partnership may terminate the
Executive’s employment and the Employment Term for
“Cause”. For purposes of this Agreement,
“Cause” means: (a) the Executive’s willful
misconduct, gross negligence or recklessness in the performance of
his duties hereunder; (b) a material breach by the Executive
of any of the provisions of Section 4.1 or 4.2 hereof; or
(c) an action or omission by the Executive for which he is
indicted or convicted for commission of a felony or a misdemeanor
(in the case of a misdemeanor, involving moral turpitude) or the
Executive being subject to a judgment, order or decree (by consent
or otherwise) by any governmental or regulatory authority which
restricts his ability to engage in the business conducted by the
Partnership, the MLP and their affiliates.
5.3 Good Reason. The Executive’s
employment and the Employment Term may be terminated by the
Executive for Good Reason. For purposes of this Agreement,
“Good Reason” means: (a) any failure by the
Partnership to comply in any material respect with any of the
provisions of Article 3 of this Agreement which is not cured
within thirty days following notice by the Executive; (b) a
material diminution in the Executive’s title, authority,
duties or responsibilities, without the consent of the Executive;
or (c) the requirement by the Partnership, without the
Executive’s consent, that the Executive be based more than 35
miles from the Executive’s present office location or more
than 50 miles from the Executive’s present
residence.
5.4 Termination without Cause. Notwithstanding
anything to the contrary herein, the Partnership may terminate the
Executive’s employment hereunder and the Employment Term at
any time and the Executive may be removed as an officer of the MLP
and the Partnership at any time, subject to the provisions of
Section 6.
5.5 Non-Renewal. The Executive’s
employment and the Employment Term may be terminated by either
party pursuant to a Non-Renewal Notice, subject to the provisions
of Section 6.
5.6 Notice of Termination. Any termination of
employment hereunder (other than termination as a result of death)
by the Partnership or by the Executive shall be communicated by
Notice of Termination (as hereinafter defined) to the other party
hereto given in accordance with Section 8.2 of this Agreement.
For purposes of this Agreement, a “Notice of
Termination” means a written notice which (a) indicates
the specific termination provision in this Agreement relied upon,
and (b) sets forth the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated.
5.7 Date of Termination. The termination of the
Executive’s employment pursuant to Section 5 shall be
effective on the date that the Executive or the Partnership, as the
case may be, receives the Notice of Termination; provided however,
that (a) if the Executive’s employment is terminated by
reason of death, the Date of Termination shall be the date of death
of the Executive. (b) if the Executive’s employment is
terminated by reason of Disability, the Date of Termination shall
be the date tha
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