Mr. Mark
A. Alexander
Chief Executive Officer
Suburban Propane Partners, L.P.
24 Route 10 West
Whippany, New Jersey 07981-0206
This letter agreement (this
“Agreement”) confirms our mutual understanding and
agreement as to the arrangements relating to your separation from
Suburban Propane Partners, L.P. (the “MLP”) and its
subsidiaries (collectively with the MLP, “Suburban”) at
the end of the current fiscal year.
In this Agreement, the close of business on
September 26, 2009 is referred to as the “Separation
Time;” the period from the date hereof until the Separation
Time is referred to as the “Remaining Period;” and the
period from the Separation Time until the third anniversary thereof
is referred to as the “Consultancy/Non-Competition
Period.”
1.
Separation and Related Matters .
(a) Your employment with Suburban shall end
at the Separation Time. Immediately following the Separation Time,
you shall be deemed to have resigned (with immediate effect and
without any further action of the parties) from your position as
Chief Executive Officer of the MLP and from all other positions you
hold with Suburban.
(b) You shall not stand for election to the
Board of Supervisors of the MLP (the “Board of
Supervisors”) at the next Tri-Annual Meeting of Unitholders.
Immediately following such meeting you shall be deemed to have
resigned (with immediate effect and without any further action of
the parties) from the Board of Supervisors and from all other
boards of supervisors and boards of directors of Suburban on which
you serve.
(c) On or before the Separation Time, you
shall comply, or cause Suburban Energy Services Group LLC to
comply, with the provisions of Section 4.6(b) of the Third
Amended and Restated Agreement of Limited Partnership of the MLP in
the manner requested by the Board of Supervisors but in no event
shall you lose the market value of the units on the date of
transfer as a result of such compliance.
2. Existing
Employment Agreement .
(a) During the Remaining Period, the
Amended and Restated Employment Agreement, dated as of
February 25, 2009, by and between Suburban Propane, L.P. and
you (the “Existing Employment Agreement”) shall remain
in full force and effect except that the parties agree as follows:
(i) the parties waive any notice that may be applicable under
Section 1 or Section 5.6 thereof in connection with the
termination of the Existing Employment Agreement pursuant to
Section 2(b) hereof; (ii) the execution and delivery of this
Agreement shall not constitute either a “Non-Renewal
Notice” or a termination for “Good Reason” or
without “Cause” thereunder; (iii) during the
Remaining Period, the Existing Employment Agreement shall not be
terminated for “Good Reason” or without
“Cause” and a “Non-Renewal Notice” shall
not be given; and (iv) you may seek or discuss other
opportunities not inconsistent with Section 7(a).
(b) At the Separation Time, the Existing
Employment Agreement shall be terminated (without any action of the
parties) and shall be of no further force or effect.
Notwithstanding anything to the contrary herein, you will be deemed
to have incurred a “separation from service” as of the
Separation Time under Treasury
Regulation Section 1.409-1(h) for purposes of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
3.
Compensation and Benefits .
(a) As soon as practicable after the
Separation Time, you shall receive any base salary and vacation
that is accrued but unpaid through the Separation Time and
reimbursement of expenses incurred prior to the Separation Time in
accordance with Suburban’s policies for senior executive
officers.
(b) After the Separation Time, in
consideration for your agreement to provide consulting services
pursuant to Section 4, your release and waiver of claims
pursuant to Section 5, your covenant not to sue pursuant to
Section 6, and your non-competition and confidentiality
agreements pursuant to Section 7, you shall receive the
following payments and benefits for the periods indicated, less any
standard withholding and authorized deductions required by law,
which shall be in lieu of any other payments or benefits to which
you otherwise might be entitled:
|
|
1.
|
|
You
shall receive the aggregate amount of $1,000,000 during the
Consultancy/Non-Competition Period. A portion of this amount shall
be paid to you in bi-weekly installments, in accordance with
Suburban’s general payroll practices beginning with the first
regular payroll date following the Separation Time, but which in no
event shall be later than March 15, 2010. The remainder
portion of this amount shall be paid to you in bi-weekly equal
installments beginning with the first regular payroll date
following March 15, 2010 and ending on the last day of the
Consultancy/Non-Competition Period.
|
|
|
2.
|
|
You
will receive full cash payments, if and to the extent earned,
without pro-ration, (A) of the bonus target earned under
Suburban’s Fiscal 2009 Incentive Plan at the same percentage
as that earned under said plan by other senior management of
Suburban (which earned bonus target would, for example, be $495,000
if 110% of bonus target is earned), and (B) for the 2007, 2008
and 2009 Measurement Periods under the Long Term Incentive Program
II (as adopted effective October 1, 2002) (the
“LTIP”) based on your previously established Target
Grants of 4,007 Phantom Units for 2007, 2,989 Phantom Units for
2008 and 3,752 Phantom Units for 2009, such payments to be made (if
and to the extent earned) in accordance with the terms and
conditions of the LTIP. Terms used but not defined in this clause
(ii) shall have the meanings ascribed to them in the
LTIP.
|
2
|
|
3.
|
|
In
accordance with Section 5.5 of the Suburban Propane Company
Supplemental Executive Retirement Plan, your benefit age will be
adjusted to age 55 effective as of the Separation Time allowing
your benefits under such plan to vest. Said vested benefits, which
are valued at approximately $450,000, will be payable to you, in
one lump-sum, within thirty (30) days following the Separation
Time.
|
|
|
4.
|
|
You
shall be entitled to receive income tax preparation services
provided and paid for by Suburban for the tax years ending December
31, 2009, 2010 and 2011.
|
|
|
5.
|
|
During the
Consultancy/Non-Competition Period, Suburban will continue to make
payments on and insure the vehicle currently leased by Suburban on
your behalf.
|
|
|
6.
|
|
During the
Consultancy/Non-Competition Period, Suburban will continue to
purchase, on your behalf supplemental life insurance coverage,
payable to your designated beneficiary at your level of
participation at the Separation Time.
|
|
|
7.
|
|
During the
Consultancy/Non-Competition Period, Suburban will continue to pay
for your annual physical examinations.
|
|
|
8.
|
|
Your participation in the Suburban
Propane Retirement Savings and Investment Plan shall cease at the
Separation Time and neither you nor Suburban shall be entitled to
make any further contributions; provided, however, that Suburban
shall make a “matching payment” of $14,700 in respect
of the fiscal year ending on September 26, 2009 at such time
as all other matching payments are made for such year in accordance
with the terms of the Suburban Propane Retirement Savings and
Investment Plan.
|
|
|
9.
|
|
During the
Consultancy/Non-Competition Period, you shall be eligible to
continue medical and dental benefits coverage for you and your
eligible dependents at a level comparable to the level of coverage
that was provided to you and your eligible dependents under the
Suburban group medical and dental benefit plans as of the
Separation Time. You shall be required to pay the full cost of such
coverage during the period you elect to be covered. Notwithstanding
the foregoing, Suburban shall pay you an amount in cash on a
monthly basis equal to the full premium cost of the elected
coverage including an additional amount such that after the payment
of all applicable federal, state and local taxes, you shall retain
an amount equal to the actual cost of the elected medical and
dental coverage. Should you become covered under another
employer’s medical/dental plan during the
Consultancy/Non-Competition Period, you must immediately so notify
Suburban, at which time, after a 31-day grace period,
Suburban’s obligations under this paragraph shall cease and
be of no further force or effect.
|
|
|
10.
|
|
In
the event of a change of control (within the meaning of Treasury
Regulations Section 1.409A-3(i)(5)) during the
Consultancy/Non-Competition Period, your obligation to provide
consulting services pursuant to Section 4 will end (with
immediate effect and without any further action of the parties) and
you will be entitled to (A) the immediate payment of any
remaining monies due to you pursuant to clause (i) of this
Section 3 and (B) any payments that are due under
Section 6.2 of the LTIP.
|
3
4. Consulting Services . During the
Consultancy/Non-Competition Period, you shall provide, as an
independent consultant, such (a) transitional assistance and
(b) strategic advice with respect to operational matters and
acquisitions, dispositions and other transactional matters as the
Board of Supervisors or the Chief Executive Officer of Suburban
shall reasonably request; provided, however, that such services
shall not be more than 20% of the average level of services
performed by you during the immediately 36 months preceding
the Separation Time. Nothing herein shall prevent you from
obtaining full-time employment during the
Consultancy/Non-Competition Period which is not inconsistent with
Section 7(a).
(a) In consideration of the terms hereof,
you agree that your acceptance and execution of this Agreement
constitutes a full, complete and knowing release and waiver of any
claims asserted or non-asserted that you now have or now may have
against Suburban arising out of your employment or termination of
employment up to and including the date of this Agreement,
including any claims you may have under state common law for torts
or contracts (including wrongful or constructive discharge, breach
of contract, emotional distress) or under federal, state or local
statute, regulation, rule, ordinance or order that covers or
relates to any aspect of employment or discrimination in employment
including, but not limited to the following: Title VII of the Civil
Rights Act of 1964, as amended; Civil Rights Act of 1991; Americans
with Disabilities Act; Equal Pay Act of 1963; Family and Medical
Leave Act; Age Discrimination in Employment Act; Older
Worker’s Benefit Protection Act; Worker Adjustment and
Retraining Notification Act; Employee Retirement Income Security
Act of 1974; Occupational Safety and Health Act of 1970; Fair Labor
Standards Act; Consumer Credit Protection Act, Title III; New
Jersey Law Against Discrimination; New Jersey Conscientious
Employee Protection Act; New Jersey Worker and Community Right to
Know Act; New Jersey Family Leave Act; New Jersey Worker Health and
Safety Act; New Jersey Civil Rights Act; any comparable state laws
which may apply; any state or federal “whistleblower”
statutes or any claim for severance pay, bonus, salary, Suburban
units, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, except as
may otherwise be provided in this Agreement.
(b) In addition, you agree that your
acceptance and execution of this Agreement constitutes, on behalf
of yourself and your descendants, ancestors, dependents, heirs,
executors, administrators, assigns and successors, a covenant not
to sue, and you fully and forever release and unequivocally
discharge Suburban, its subsidiaries, affiliates, divisions,
successors, predecessors and assigns, together with its and their
past and present trustees, supervisors, directors, officers,
agents, attorneys, insurers, employees, unit holders, and
representatives, and all persons acting by, through, under or in
concert with any of them (collectively the “Releasees”)
from any and all claims, wages, demands, rights, liens, agreements,
contracts, covenants, actions, suits, causes of action,
obligations, debts, costs, expenses, attorneys’ fees,
damages, judgments, orders or liabilities of whatsoever kind or
nature in law, equity or otherwise, whether now known or unknown,
suspected or unsuspected which you now own, hold, or claim to have,
own, or hold or that you at any time heretofore had, owned, held or
claimed to have, own, or hold, against each or any of the
Releasees.
4
(c) The releases set forth in this
Section 5 will not affect any vested rights you may possess
under Section 3 of the Existing Employment Agreement as of the
Separation Time and do not include your right to any claim that you
may be able to assert in order to enforce the provisions of this
Agreement, nor do such releases affect, release or diminish your
right to indemnification or directors & officers
insurance.
(d) At the end of the Remaining Period and
as condition to the receipt of the compensation and benefits set
forth in Section 3, you shall execute and deliver to Suburban
a supplemental release with respect to any claims, asserted or
non-asserted, that may have arisen during the Remaining Period in
the form of Exhibit A, no later than thirty (30) days
following the Separation Time.
6. Covenant Not to Sue . You
covenant and agree that you will not, either individually or in
concert with others, file or voluntarily participate or assist in
the prosecution of any judicial, administrative, regulatory or
arbitration proceedings against the Releasees, provided that
nothing in this Agreement shall prevent (a) your participation
in any such proceeding where such participation is required by
summons or subpoena or is otherwise compelled by law, or
(b) your challenge to the perform
|
