SUBURBAN PROPANE, L.P.
SEVERANCE PROTECTION PLAN
As Adopted in September 1996 and Amended in January 2008
and January 2009
The Board of Supervisors of Suburban Propane
Partners, L.P. (the “Partnership”), Suburban Propane,
L.P. (“Suburban”), and all direct or indirect
subsidiaries of Suburban, has adopted a program (referred to herein
as the “Severance Protection Plan” or the
“Plan”) designed to protect certain key employees from
the effects of an actual or possible Change in Control (as defined
below), and thereby to enable Suburban to obtain the continued
availability of such key employees’ services, managerial
skills and business experience upon the threat or actual occurrence
of a Change in Control.
An employee of Suburban or any of its
subsidiaries who (a) received an unvested 2003 Long Term
Incentive Plan (together with any successor plan thereto, the
“LTIP”) award during the fiscal year in which the
Change in Control occurred, or (b), alternatively, if the Change in
Control occurs on the first day of Suburban’s fiscal year,
received an unvested LTIP award during the fiscal year immediately
preceding the fiscal year in which the Change in Control occurred,
or (c) Suburban agreed in writing would receive an unvested LTIP
award at the commencement of the Suburban fiscal year immediately
following the Change in Control, or (d), alternatively, if the
Change in Control occurs on the first day of Suburban’s
fiscal year, Suburban agreed in writing would receive an unvested
LTIP award at the commencement of the Suburban fiscal year in which
the Change in Control occurred is eligible for benefits under this
Severance Protection Plan unless otherwise provided by written
agreement between such employee and Suburban.
An employee who is eligible for benefits under
this Plan will become entitled to benefits under the Plan if there
is a loss of his or her employment within one year following a
Change in Control. In such event, the employee will be entitled to
receive (in lieu of any other severance benefits to which he or she
may be entitled) a lump-sum benefit equal to the product of
sixty-five (65) times 1/52 of the sum of the employee’s
base annual salary and Target Cash Bonus, defined as the percentage
(established by Suburban as of the later of the start of the fiscal
year or commencement of employment) of the employee’s annual
base salary that would be paid as a cash bonus to the employee if,
for that fiscal year, actual EBITDA equals the Partnership’s
budgeted EBITDA, without regard to whether the Target Cash Bonus
was earned or paid, as of the date of the Change in Control (but
not lower than the highest sum of such amounts at any time during
the period beginning one year prior to the Change in Control and
ending on the employee’s termination date). The benefit shall
be paid within 30 days following the employee’s
termination of employment.
Each employee who becomes entitled to receive
benefits under this Plan shall also receive payment for
(a) all annual incentive bonus awards earned but unpaid for
all fiscal years completed prior to the Change in Control and for
all fiscal years completed prior to the employee’s
termination of employment, plus (b) for any partially
completed fiscal year during which the employee’s termination
of employment occurred, a payment equal to his or her then current
Target Cash Bonus, multiplied by a factor equal to a numerator
representing the number of full and partial months of service
during the partially completed fiscal year and a denominator of
twelve. Any amounts payable under this paragraph shall be paid
within 30 days following the employee’s termination of
employment.
For purposes of this Plan, an employee shall be
deemed to have lost his or her employment if (a) the
employee’s employment is terminated by Suburban or its
successor (unless such termination is due to willful malfeasance in
office as that term is defined below), or (b) the
employee’s employment is terminated by the employee
subsequent to one of the following events (each a “Good
Reason”): (i) a material diminution of the
employee’s authority, duties, responsibilities or status;
(ii) a material diminution in the authority, duties,
responsibilities or status of the supervisor to whom the employee
is required to report, including, but not limited to, a requirement
that the employee report to a company officer (or subordinate
employee) instead of directly to the Board of Supervisors;
(iii) a reduction of 5% or greater in the employee’s
base annual salary, or a failure to provide the employee with the
opportunity to participate, on terms no less favorable than those
existing immediately prior to the Change in Control, in any
incentive bonus, savings, pension or other employee benefit plan of
Suburban in effect immediately prior to the Change in Control (or
successor plans and benefits which are, in the aggregate, no less
favorable to the employee than those plans and benefits available
to the employee immediately prior to the Change in Control); or
(iv) a requirement, without the employee’s consent, that
the employee be based more than 35 miles from his or her present
office location if, and only if, the new location is farther from
the employee’s place of residence than the office
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