UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrantþ
[X]
Filed by a Party other than the Registranto
[ ]Check the appropriate box:
o | | |
| [ ] | | Preliminary Proxy Statement |
|
o[ ] | | Confidential, for Use of the Commission Only (as permitted by rule 14a-6(e)14a-6(e)(2)) |
|
þ[X] | | Definitive Proxy Statement |
|
o[ ] | | Definitive Additional Materials |
|
o[ ] | | Soliciting Material Pursuant to §240.14a-12 |
SUBURBAN PROPANE PARTNERS, L.P.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | | | | | | |
| | | | | | |
| [X] | | No fee required. |
|
o[ ] | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| |
| (1) | | Title of each class of securities to which transaction applies: |
(2) | |
| | | |
(2) | | Aggregate number of securities to which transaction applies: | | |
(3) | |
| | | |
| (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | |
| | | |
(4) | | Proposed maximum aggregate value of transaction: |
o | |
| | | |
[ ] | | Fee paid previously with preliminary materials. |
|
o[ ] | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | | Amount Previously Paid: |
(2) | |
| | | |
(2) | | Form, Schedule or Registration Statement No.: |
One Suburban Plaza • 240 Route 10 West • P.O. Box 206 • Whippany, NJ07981-0206
http://www.suburbanpropane.com
StivalaPresident and Chief Executive Officer
June 1, 2009
Dear Fellow Suburban Propane Unitholder:
You are cordially invited to attend the Tri-Annual Meeting of the Limited Partners of Suburban Propane Partners, L.P. to be held on Wednesday, July 22, 2009,May 13, 2015, beginning at 9:00 a.m. at our executive offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey.
Whether or not you plan to attend in person, it is important that your units be represented at the meeting. You may vote on the matters that come before the meeting by completing the enclosed proxy card and returning it in the envelope provided.
Alternatively, you may also vote over the Internet or by telephone.Attendance at the Tri-Annual Meeting will be open to holders of record of common units as of the close of business on May 26, 2009.March 16, 2015. I look forward to greeting those of you who will be able to attend.
Sincerely,
Mark A. Alexander
Chief Executive Officer
| | | | |
| | | | Sincerely yours, |
| | |
| | | |  |
| | | | Michael A. Stivala |
| | | | President and Chief Executive Officer |
SUBURBAN PROPANE PARTNERS, L.P.
NOTICE OF TRI-ANNUAL MEETING
July 22, 2009
May 13, 2015
The Tri-Annual Meeting of the Limited Partners of Suburban Propane Partners, L.P. (“Suburban”) will be held at 9:00 a.m. on Wednesday, July 22, 2009,May 13, 2015, at our executive offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey, for the following purposes:
1. To elect six Supervisors;
2. To approve Suburban’s 2009 Restricted Unit Plan, including the authorization of the issuance of 1,200,000 common units of Suburban to be available for grant under the Plan;
3. To approve the adjournment of the Tri-Annual Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Tri-Annual Meeting to approve Proposal 1 or Proposal 2 above; and
4. To consider any other matters that may properly come before the meeting.
| 1. | To elect seven Supervisors to three-year terms; |
| 2. | To ratify our independent registered public accounting firm for our 2015 fiscal year; |
| 3. | To approve an amendment to Suburban’s 2009 Restricted Unit Plan, authorizing the issuance of an additional 1,200,000 Common Units pursuant to awards granted under the Plan; |
| 4. | To provide our Limited Partners with the opportunity to cast an advisory vote on the compensation of our named executive officers; |
| 5. | To consider any other matters that may properly come before the meeting. |
Only holders of record of common units as of the close of business on May 26, 2009March 16, 2015 are entitled to notice of, and to vote at, the meeting.
By Order of the Board of Supervisors,
Paul Abel
Vice President, Secretary & General Counsel
June 1, 2009
| | | | |
| | By Order of the Board of Supervisors, Paul Abel Senior Vice President, Secretary & General Counsel | | |
March 20, 2015
IMPORTANT
Your vote is important. Whether or not you expect to attend the meeting in person, we urge you to complete and return the enclosed proxy card at your earliest convenience in the postage-paid envelope provided, or vote using the Internet or by telephone.
SUBURBAN PROPANE PARTNERS, L.P.
One Suburban Plaza
240 Route 10 West
Whippany, New Jersey07981-0206
QUESTIONS AND ANSWERS ABOUT THE TRI-ANNUAL MEETING
This Proxy Statement (first mailed,(which, together with a form of proxy, is being mailed or otherwise made available to Unitholders on or about June 1, 2009)March 20, 2015) is being furnished to holders of Common Units of Suburban Propane Partners, L.P., which we refer to as “Suburban,” “we” or “our,” in connection with the solicitation of proxies by the Board of Supervisors of Suburban, which we refer to as the “Board,” for use at Suburban’s Tri-Annual Meeting of Limited Partners and any continuations, postponements or adjournments thereof, which we refer to as the “Meeting.”
Q: When and where is the Meeting?
A:The Meeting will be held at 9:00 a.m. on Wednesday, May 13, 2015, at our executive offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey.
Q: What is the purpose of the Meeting?
A: At the Meeting, holders of Common Units, whom we refer to as “Unitholders,” will be asked to consider and vote on the following four proposals:
| | |
Q: | | When and where is the Meeting? |
| |
A:— | | The Meeting will be held at 9:00 a.m. on Wednesday, July 22, 2009, at our executive offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey. |
| |
Q: | | What is the purpose of the Meeting? |
|
A: | | At the Meeting, holders of Common Units, whom we refer to as Unitholders, will be asked to consider and vote on the following three proposals: |
|
| | • PROPOSAL NO. 1—– To elect sixseven Supervisors to three-year terms, which we refer to as the Election“Election Proposal. |
| |
| — | | • PROPOSAL NO. 2 – To ratify our independent registered public accounting firm for our 2015 fiscal year, which we refer to as the “Accountant Ratification Proposal.” |
| — | | PROPOSAL NO. 3 – To approve Suburban’s 2009 Restricted Unit Plan, including the authorization of the issuance of 1,200,000 Common Unitsan amendment to be available for grant under theSuburban’s 2009 Restricted Unit Plan, which we refer to as the Restricted Unit“Plan,” increasing by an additional 1,200,000 Common Units the number of Common Units subject to awards under the Plan, Proposal. |
|
| | • PROPOSAL NO. 3— To approve the adjournment of the Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Tri-Annual Meeting to approve the Election Proposal or the Restricted Unit Plan Proposal, which we refer to as the Adjournment“Restricted Unit Plan Proposal.
” |
| |
Q:— | | How doesPROPOSAL NO. 4 – To provide our Unitholders with the Board recommend Iopportunity to cast an advisory vote on the proposals? |
|
A: | | The Board recommends a voteFOReachcompensation of its nominees for Supervisor, approval of the Restricted Unit Plan Proposal and approval of the Adjournment Proposal. |
|
Q: | | How will voting on any other business be conducted? |
|
A: | | The Board of Supervisors does not know of any business to be considered at the meeting other than the proposals described in this Proxy Statement. However, if any other business is properly presented, your signed proxy card gives authority to the personsour named in the proxy to vote on these matters at their discretion. |
|
Q: | | Who is entitled to vote? |
|
A: | | Each holder of Common Units as of the close of business on May 26, 2009,executive officers, which we refer to as the Record Date, is entitled to vote at the Meeting.“Say-on-Pay Proposal.” |
Q: How does the Board recommend I vote on the proposals?
A: The Board unanimously recommends a voteFOReach of its nominees for Supervisor, approval of the Accountant Ratification Proposal, approval of the Restricted Unit Plan Proposal and approval of the Say-on-Pay Proposal.
Q: How will voting on any other business be conducted?
A: The Board of Supervisors does not know of any business to be considered at the Meeting other than the proposals described in this Proxy Statement. However, if any other business is properly presented, your signed proxy card gives authority to the persons named in the proxy to vote on these matters at their discretion.
Q: Who is entitled to vote?
A: Each holder of Common Units as of the close of business on March 16, 2015, which we refer to as the “Record Date,” is entitled to vote at the Meeting.
Q: How many Common Units may be voted?
A:As of the Record Date, 60,459,026 Common Units were outstanding. Each Common Unit entitles its holder to one vote.
Q: What is a “quorum”?
A: There must be a quorum for the Meeting to be held. A quorum will be present if a majority of the outstanding Common Units as of the Record Date is represented in person or by proxy at the Meeting. If you submit a properly executed proxy card, even if you mark WITHHOLD or ABSTAIN, then you will be considered part of the quorum.
Q: What vote is required to approve the proposals?
A:
| |
Q:— | | How many Common Units may be voted? |
| |
A: | | As of the Record Date, 32,795,355 Common Units were outstanding. Each Common Unit entitles its holder to one vote. |
|
Q: | | What is a“quorum”?
|
|
A: | | There must be a quorum for the meeting to be held. A quorum will be present if a majority of the outstanding Common Units is represented in person or by proxy at the meeting. If you submit a properly executed proxy card, even if you abstain from voting, then you will be considered part of the quorum. However, abstentions are not counted in the tally of votes FOR or AGAINST a proposal. |
| | |
Q: | | What vote is required to approve the proposals? |
|
A: | | |
|
| | • PROPOSAL NO. 1 —– Under the Third Amended and Restated Agreement of Limited Partnership (as amended) of Suburban, as further amended, which we refer to as our Partnershipthe “MLP Agreement,” the affirmative vote of holders of a plurality of the Common Units represented in person or by proxy at the Meeting is required to elect each Supervisor.
|
| | — | | PROPOSAL NO. 2– Under the MLP Agreement, the affirmative vote of a majority of Common Units entitled to vote at the Meeting and present, whether in person or by proxy, is required to approve the Accountant Ratification Proposal. |
| — | •
| PROPOSAL NO. 2 —3 – Under the rules of the New York Stock Exchange, which we refer to as the affirmative vote of a majority of“NYSE,” the votes cast by the Unitholders, whether in person or by proxy, provided that the total votes cast on the proposal represent more than 50% of all Common Units entitled to vote thereon, is required to approve the Restricted Unit Plan Proposal. |
|
| | • PROPOSAL NO. 3 — The affirmative vote of a majority of the votes cast by the Unitholders, whether in person or by proxy, is required to approve the AdjournmentRestricted Unit Plan Proposal.
|
| |
Q:— | | How do I vote?PROPOSAL NO. 4 – Under the MLP Agreement, the affirmative vote of a majority of Common Units entitled to vote at the Meeting and present, whether in person or by proxy, is required to approve the Say-on-Pay Proposal. |
Q: How are withholds, abstentions and broker non-votes counted for the proposals?
A: For the Election Proposal, Supervisors are elected by a plurality of FOR votes. Accordingly, a proxy card marked as WITHHOLD and a broker non-vote will not count towards the plurality required to elect a Supervisor. For the Restricted Unit Plan Proposal, a proxy card marked ABSTAIN has the same effect as a vote AGAINST such proposal, but a broker non-vote is not counted in the tally of votes FOR or AGAINST such proposal and does not affect the voting results for such proposal. For each of the Accountant Ratification Proposal and Say-on-Pay Proposal, a proxy card marked ABSTAIN has the same effect as a vote AGAINST such proposal, but a broker non-vote is not counted as entitled to vote at the Meeting and does not affect the voting results for such proposal.
Q: How do I vote?
A: You may vote by any one of three different methods:
| |
A:— | | You may vote by any one of three different methods: |
| |
| | • In Writing. You can vote by marking, signing and dating the enclosed proxy card and returning it in the enclosed envelope. |
| |
| — | | • By Telephone and Internet. You can vote your proxies by touchtone telephone from the USA, US territories or Canada or through the Internet. Please follow the instructions on the enclosed proxy card. |
| |
| — | | • In Person. You can vote by attending the Meeting. |
Common Units represented by properly executed proxies that are not revoked will be voted in accordance with the instructions shown on the proxy card. If you return your signed proxy card but do not give instructions as to how you wish to vote, your Common Units will be votedFOReach Supervisor nominee and each of the Accountant Ratification Proposal, the Restricted Unit Plan Proposal and the Say-on-Pay Proposal.
Our Board of Supervisors urges Unitholders to complete, date, sign and return the accompanying proxy card, or to submit a proxy by telephone or over the Internet by following the instructions included with your proxy card, or, in the event you hold your Common Units through a broker or other nominee, by following the separate voting instructions received from your broker or nominee. Your broker or nominee may provide proxy submission through the Internet or by telephone. Please contact your broker or nominee to determine how to vote.
Q: What do I do if I want to change my vote?
A: You have the right to revoke your proxy at any time before the Meeting by:
| |
| — | | Common Units represented by properly executed proxies that are not revoked will be voted in accordance with the instructions shown on the proxy card. If you return your signed proxy card but do not give instructions as to how you wish to vote, your Common Units will be votedFOReach of the proposals.Notifying our Company Secretary; |
| |
| — | | Our Board of Supervisors urges Unitholders to complete, date, sign and return the accompanying proxy card, or to submit a proxy by telephone or over the Internet by following the instructions included with your proxy card, or, in the event you hold your Common Units through a broker or other nominee, by following the separate voting instructions received from your broker or nominee. Your broker or nominee may provide proxy submission through the Internet or by telephone. Please contact your broker or nominee to determine how to vote. |
| | |
Q: | | What do I do if I want to change my vote? |
| |
A: | | You have the right to revoke your proxy at any time before the meeting by: |
| | |
| | • Notifying our Partnership Secretary; |
|
| | • Voting in person; or |
| |
| — | | • Returning a later-dated proxy card. |
Attendance at the Meeting will not, in and of itself, revoke your proxy.
| | |
Q: | | What does it mean if I receive more than one proxy card? |
|
A: | | If your Common Units are registered differently and/or are in more than one account, you will receive more than one proxy card. Please mark, sign, date and return all of the proxy cards you receive to ensure that all of your Common Units are voted. We encourage you to have all accounts registered in the same name and address (whenever possible). You can accomplish this by contacting our transfer agent, Computershare Investor Services, P.O. Box 43078, Providence, RI02940-3078 (mail), Computershare Investor Services, 250 Royall Street, Canton, MA 02021 (overnight delivery) or telephone781-575-2724. The hearing impaired may contact Computershare at TDD800-952-9245. |
2
Q: What does it mean if I receive more than one proxy card?A:If your Common Units are registered differently and/or are in more than one account, you will receive more than one proxy card. Please mark, sign, date and return all of the proxy cards you receive to ensure that all of your Common Units are voted. We encourage you to have all accounts registered in the same name and address (whenever possible). You can accomplish this by contacting our transfer agent, Computershare Investor Services, P. O. Box 30170, College Station, TX 77842-3170 (mail), Computershare Investor Services, 211 Quality Circle, Suite 210, College Station, TX 77845 (overnight delivery) or telephone 781-575-2724. The hearing impaired may contact Computershare at TDD 800-952-9245.
| | |
Q: | | What do I do if my Common Units are held in “street name”? |
|
A: | | If your Common Units are held in the name of your broker, a bank or other nominee, that party will give you instructions about how to vote your Common Units. |
|
Q: | | Who will count the votes? |
|
A: | | Representatives of Computershare Trust Company, N.A., our transfer agent and an independent tabulator, will count the votes and act as the inspector of election. |
|
Q: | | Who is bearing the cost of this proxy solicitation? |
|
A: | | Q: What do I do if my Common Units are held in “street name”? A: If your Common Units are held in the name of your broker, a bank or other nominee, that party will give you instructions about how to vote your Common Units. Q: Who will count the votes? A: Representatives of Computershare Trust Company, N.A., our transfer agent and an independent tabulator, will count the votes and act as the inspector of election. Q: Who is bearing the cost of this proxy solicitation? A:The Board of Supervisors is soliciting your proxy on behalf of Suburban. We are bearing the cost of soliciting proxies for the Meeting. Georgeson Inc. has been retained to assist in the distribution of proxy materials and the solicitation of votes and will be paid a customary fee for its services totaling approximately $15,000, plus reasonable out-of-pocket expenses. In addition to using the mail, our Supervisors, officers and employees may solicit proxies by telephone, personal interview or otherwise. They will not receive additional compensation for this activity, but may be reimbursed for their reasonable out-of-pocket expenses. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to Unitholders. |
|
Q: | | Will the independent registered public accountants attend the Meeting? |
|
A: | | Representatives of PricewaterhouseCoopers LLP, our independent registered public accounting firm for the fiscal years ended September 27, 2008 and ending September 26, 2009, will attend the Meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. |
|
Q: | | When are the Unitholder proposals for the next meeting of Unitholders due? |
|
A: | | We presently expect that our next Tri-Annual Meeting will be held in April 2012. If a Unitholder intends to present any proposals for inclusion in Suburban’s proxy statement in accordance withRule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, for consideration at the Company’s 2012 Tri-Annual Meeting, the proposal must be received at Suburban’s principle executive offices by October 31, 2011. |
|
| | In accordance with the Partnership Agreement, if a Unitholder intends, at the 2012 Tri-Annual Meeting, to nominate a person for election to the Board of Supervisors, the Unitholder must deliver notice thereof to the Board of Supervisors not earlier than the close of business on December 23, 2011 and not later than January 17, 2012. A different notice deadline will apply for the nomination of persons for election to the Board of Supervisors if the date of the 2012 Tri-Annual Meeting is not publicly announced by Suburban more than 100 days prior to the date of such meeting. Such deadline, and the procedures that a Unitholder must follow to nominate a person for election to the Board of Supervisors, are further described below under the heading “Supervisor Nominations and Criteria for Board Meetings — Unitholder Nominations.” |
|
| | If we do not receive notice of any Unitholder proposal for the 2012 Tri-Annual Meeting by January 17, 2012, then Suburban’s proxy may confer discretionary authority on the persons being appointed as proxies to vote on such proposals. |
|
| | If the date of the 2012 Tri-Annual Meeting is changed to a different month, we will advise our Unitholders of the new date for the submission of Unitholder proposals in our earliest possible quarterly report onForm 10-Q filed with the Securities and Exchange Commission. |
|
Q: | | Where and when will I be able to find the voting results? |
|
A: | | In addition to announcing the results at the Meeting, we will post the results on our web site atwww.suburbanpropane.com within two days after the Meeting. You will also be able to find the results in our Annual Report onForm 10-K for our fiscal year ending September 26, 2009, which we will file with the Securities and Exchange Commission in November 2009. |
3
| | |
Q: | | How can I obtain a copy of our 2008 Annual Report onForm 10-K? |
|
A: | | We will provide an additional copy of our 2008 Annual Report onForm 10-K, including the financial statements and financial statement schedule filed therewith, without charge, upon written request to Investor Relations, Suburban Propane Partners, L.P., 240 Route 10 West, P.O. Box 206, Whippany, New Jersey07981-0206. We will furnish a requesting Unitholder with any exhibit not contained therein upon payment of a reasonable fee, which fee shall be limited to our reasonable expenses in furnishing such exhibit. |
|
Q: | | Who can I contact for further information? |
|
A: | | If you need assistance in voting your Common Units, please call the firm assisting us in the solicitation of proxies for the Meeting: |
Georgeson Inc.
199 Water Street, has been retained to assist in the distribution of proxy materials and the solicitation of votes and will be paid a customary fee for its services totaling approximately $10,000, plus reasonable out-of-pocket expenses. In addition to using the mail, our Supervisors, officers and employees may solicit proxies by telephone, personal interview or otherwise. They will not receive additional compensation for this activity, but may be reimbursed for their reasonable out-of-pocket expenses. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to Unitholders.Q: Will the independent registered public accountants attend the Meeting?
A: Representatives of PricewaterhouseCoopers LLP, our independent registered public accounting firm, are expected to attend the Meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
Q: Does Suburban’s proxy confer discretionary authority to vote on Unitholder proposals at the Meeting?
A: With respect to any Unitholder proposal submitted outside of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” and for which we did not receive notice by a reasonable time before the date of this proxy statement, Suburban’s proxy confers discretionary authority on the persons being appointed as proxies to vote on such proposal.
Q: When are the Unitholder proposals for the next meeting of Unitholders due?
A: We presently expect that our next Tri-Annual Meeting will be held in May 2018. If a Unitholder intends to present any proposals for inclusion in Suburban’s proxy statement in accordance with Rule 14a-8 for consideration at Suburban’s 2018 Tri-Annual Meeting, the proposal must be received at Suburban’s principal executive offices by November 20, 2017.
In accordance with the MLP Agreement, if a Unitholder intends, at the 2018 Tri-Annual Meeting, to nominate a person for election to the Board of Supervisors, the Unitholder must deliver notice thereof to the Board of Supervisors not earlier than the close of business on the 120th day before, and not later than the close of business on the 90th day before, the date of the 2018 Tri-Annual Meeting. A different notice deadline will apply for the nomination of persons for election to the Board of Supervisors if the date of the 2018 Tri-Annual Meeting is not publicly announced by Suburban more than 100 days prior to the date of such meeting. Such deadline, and the procedures that a Unitholder must follow to nominate a person for election to the Board of Supervisors, are further described below under the heading “Supervisor Nominations and Criteria for Board Meetings – Unitholder Nominations.”
Q: Where and when will I be able to find the voting results?
A: In addition to announcing the results at the Meeting, we will post the results on our web site atwww.suburbanpropane.com within two days after the Meeting. You will also be able to find the results in our Current Report on Form 8-K that we will file with the Securities and Exchange Commission within four business days following conclusion of the Meeting.
Q: How can I obtain an additional copy of our 2014 Annual Report on Form 10-K?
A: We will provide an additional copy of our 2014 Annual Report on Form 10-K, including the financial statements and financial statement schedule filed therewith, without charge, upon written request to
Investor Relations, Suburban Propane Partners, L.P., 240 Route 10 West, P.O. Box 206, Whippany, New Jersey 07981-0206. We will furnish a requesting Unitholder with any exhibit not contained therein upon payment of a reasonable fee, which fee shall be limited to our reasonable expenses in furnishing such exhibit.
Q: Who can I contact for further information?
A: If you need assistance in voting your Common Units, please call the firm assisting us in the solicitation of proxies for the Meeting:
Georgeson Inc.
480 Washington Blvd, 26th Floor
New York, NY10038-3560
Banks and Brokers Call(212) 440-9800
All Others Call
Jersey City, NJ 07310
In the US, call Toll Free(800) 213-0409
| | |
Q: | | What can I do if I and another Unitholder with whom I live want to receive two copies of this proxy statement? |
|
A: | | In order to reduce our printing and postage costs, Unitholders who share a single address will receive only one copy of this proxy statement at that address unless we have received instructions to the contrary from any Unitholder at that address. However, if a Unitholder residing at such an address wishes to receive a separate copy of this proxy statement or of future proxy statements (as applicable), he or she may contact Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206. We will deliver separate copies of this proxy statement promptly upon written or oral request. If you are a Unitholder receiving multiple copies of our proxy statement, you can request to receive only one copy by contacting us in the same manner. If you own your Common Units through a bank, broker or other Unitholder of record, you may request additional or fewer copies of this proxy statement by contacting the Unitholder of record. |
4
Outside of the US, call 781-575-2137Q: What can I do if I and another Unitholder with whom I live want to receive two copies of this proxy statement?
A:In order to reduce our printing and postage costs, Unitholders who share a single address will receive only one copy of this proxy statement at that address unless we have received instructions to the contrary from any Unitholder at that address. However, if a Unitholder residing at such an address wishes to receive a separate copy of this proxy statement or of future proxy statements (as applicable), he or she may contact Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey 07981-0206. We will deliver separate copies of this proxy statement promptly upon written or oral request. If you are a Unitholder receiving multiple copies of our proxy statement, you can request to receive only one copy by contacting us in the same manner. If you own your Common Units through a bank, broker or other Unitholder of record, you may request additional or fewer copies of this proxy statement by contacting the Unitholder of record.Q: Why did I receive a notice in the mail regarding Internet availability of proxy materials instead of a full set of proxy materials?
A:Pursuant to rules adopted by the Securities and Exchange Commission, we have elected to furnish this proxy statement and other proxy materials to certain Unitholders on the Internet rather than by mailing paper copies. If you received an Important Notice Regarding the Availability of Proxy Materials, which we refer to as a “Notice,” in the mail, you will not receive a paper copy of these materials unless you expressly request to receive a paper copy. All Unitholders have the ability to access this proxy statement and other proxy materials on the Internet. Instructions on how to do so, or on how to request a paper copy, may be found in the Notice. In addition, Unitholders may request to receive these materials in printed form by mail on an ongoing basis. The Notice will also instruct you on how you may vote your Common Units, including how you may vote over the Internet.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
This Proxy Statement and the accompanying Annual Report to Unitholders are available atwww.suburbanpropane.comwww.envisionreports.com/sph.
If you plan on attending the Meeting to vote in person, and need directions to our headquarters pleasecall 973-887-5300.
MANAGEMENT SUCCESSION PLAN
On April 23, 2009, we announced that Suburban’s President, Michael J. Dunn Jr., will takeare printed on the added responsibilities of Chief Executive Officer when our next fiscal year begins on September 27, 2009. Mr. Dunn joined Suburban in 1997, became a Supervisor in 1998, and has served as President since 2005. He will succeed Mark A. Alexander, who will continue as a consultant to the Board for a term of three years. Mr. Alexander has served as Suburban’s only Chief Executive Officer, and as a Supervisor, since Suburban went public in 1996. This change is the key element of the management succession plan developed by the Compensation Committee of Suburban’s Board and Mr. Alexander to ensure that the executive leadership of Suburban evolves in a clearly defined and disciplined manner. In accordance with this plan, Mr. Alexander will not be seeking election as a Supervisor at the Meeting and will transfer to Mr. Dunn his sole membership interest in Suburban’s General Partner.accompanying proxy card. For information regarding Mr. Alexander’s consulting and separation arrangements, see “Mr. Alexander’s Employment Agreement and Consulting and Separation Agreement” in “Compensation Discussion and Analysis” below.
additional directions, please call 973-887-5300.
ELECTION OF SUPERVISORS
(Proposal No. 1 on the Proxy Card)
In connection with the decision of our Chief Executive Officer, Mark A. Alexander, not to stand for electionPursuant to the Board of Supervisors at the Meeting, our Board of Supervisors, pursuant to discretion granted to the Board under our PartnershipMLP Agreement, reduced the size of the Board from seven to six, effective upon the conclusion of the Meeting. Unitholders are entitled to elect all six members of the Board of Supervisors, (the “Supervisors”). which we refer to as “Supervisors,” who are nominated at the Meeting. Dudley C. Mecum, a Supervisor whose current term expires upon conclusion of the Meeting, has informed the Board that he will retire at the conclusion of his term and not stand for re-election at the Meeting. Acting on the recommendation of its Nominating/Governance Committee, at its meeting on January 21, 2015 our Board decided to nominate the remaining seven current Supervisors for re-election at the Meeting and leave vacant for the foreseeable future the position being vacated by Mr. Mecum.
The seven nominees for Supervisors, all of whom are currently serving as Supervisors, are described below (as of May 22, 2009)March 16, 2015). If elected, all nominees are expected to serve until the 20122018 Tri-Annual Meeting and until their successors are duly elected. Although the Board does not anticipate that any of the persons named below will be unable to stand for election, if for any reason a nominee becomes unavailable for election, the persons named in the form of proxy have advised that they will vote for such substitute nominee as the Board may propose. In accordance with our Corporate Governance Guidelines and Principles (described more fully below) and the rules of the New York Stock Exchange, we have affirmatively determined that our Board of Supervisors is currently composed of a majority of independent directors, and that the following directors and nominee directorsnominees are independent: Harold R. Logan, Jr., John Hoyt Stookey, Dudley C. Mecum, John D. Collins, Jane Swift, Lawrence C. Caldwell and Jane Swift.
NOMINEES FOR ELECTION AS SUPERVISORS
Harold R. Logan, Jr. Age 64 | | | | |
Harold R. Logan, Jr. | | | Age 70 | |
Mr. Logan has served as a Supervisor since March 1996 and was elected as Chairman of the Board of Supervisors in January 2007. Mr. Logan is a Co-Founder and, from 2006 to the present has been serving as a Director, of Basic Materials and Services LLC, an investment company that has invested in companies that provide specialized infrastructure services and materials for the pipeline construction industry and the sand/silica industry. From 2003 to September 2006, Mr. Logan was a Director and Chairman of the Finance Committee of the Board of Directors of TransMontaigne Inc., which provided logistical services (i.e. pipeline, terminaling and marketing) to producers and end-users of refined petroleum products. From 1995 to 2002, Mr. Logan was Executive Vice President/Finance, Treasurer and a Director of TransMontaigne Inc. From 1987 to 1995, Mr. Logan served as Senior Vice President of– Finance and a Director of Associated Natural Gas Corporation, an independent gatherer and marketer of natural gas, natural gas liquids and crude oil. Mr. Logan is also a Director of InfraREIT, Inc., Cimarex Energy Co., Graphic Packaging Holding Company and Hart Energy Publishing LLPLLP.
Over the past forty years, Mr. Logan’s education, investment banking/venture capital experience and Cimarex Energy Co.
5
John Hoyt StookeyAge 78 Mr. Stookey has served as a Supervisor since March 1996. He was Chairman of the Board of Supervisors from March 1996 through January 2007. From 1986 until September 1993, he was the Chairman, President and Chief Executive Officer of Quantum Chemical Corporation,
(“Quantum”), a predecessor of
Suburban.Suburban which we refer to as “Quantum.” He served as non-executive Chairman and a Director of Quantum from its acquisition by Hanson plc in September 1993 until October 1995, at which time he retired. Since then,
Mr. Stookey has served as a trustee forof a number of non-profit organizations, including founding and serving as non-executive Chairman of Per Scholas Inc. (a non-profit organization dedicated to using technologytraining inner city individuals to improve the lives of residents of the South Bronx)become computer and software technicians), The Berkshire Choral Festival and Landmark Volunteers (places high school students in volunteer positions with non-profit organizations during summer vacations) and has also servedcurrently serves on the Board of Directors of The Clark Foundation and The Robert Sterling Clark Foundation and The Berkshire Taconic Community Foundation.
Dudley C. MecumAge 73 Mr. Mecum has served as a
Supervisor since June 1996. He has beenLife Trustee of the Boston Symphony Orchestra.Mr. Stookey’s qualifications to sit on our Board include his extensive experience as Chief Executive Officer of four corporations (including a managingpredecessor of Suburban) and his many years of service as a director of Capricorn Holdings, LLC (a sponsor ofpublicly-owned corporations and investor in leveraged buyouts) since June 1997. Mr. Mecum was a partner of G.L. Ohrstrom & Co. (a sponsor of and investor in leveraged buyouts) from 1989 to June 1996.
John D. CollinsAge 70 non-profit organizations.Mr. Collins has served as a Supervisor since April 2007. He served with KPMG LLP, an international accounting firm, from 1962 until 2000, most recently as senior audit partner of its New York office. He has served as a United States representative on the International Auditing Procedures Committee, a committee of international accountants responsible for establishing international auditing standards. Until recently, Mr. Collins iswas a Director of Montpelier Re, Columbia Atlantic Funds and Mrs. Fields Original Cookies, Inc.
Mr. Collins’ qualifications to sit on our Board, and Columbia Atlantic Funds, and servesserve as Chairman of its Audit Committee, include his 40 years of experience in public accounting, including 31 years as a Trusteepartner supervising the audits of LeMoyne College.
Jane SwiftAge 44 public companies. Mr. Collins has served on a number of AICPA and international accounting and auditing standards bodies.Ms. Swift has served as a Supervisor since April 2007. She is currently the founderCEO of Middlebury Interactive Languages, LLC, a marketer of world language products. From 2010 through July 2011, Ms. Swift served as Senior Vice President – ConnectEDU Inc., a private education technology company. In 2007, she founded WNP Consulting, LLC, providinga provider of expert advice and guidance to early stage education companies. From 2003 —to 2006 she was a General Partner at Arcadia Partners, a venture capital firm focused on the education industry. She currently serveshas previously served on the boards of K12, Inc., Animated Speech Company and The Young Writers Project, and currently serves on the board of Sally Ride Science Inc., and severalnot-for-profit boards, including The Republican Majoritythe National Alliance for Choice and Landmark Volunteers, Inc.Public Charter Schools. Ms. Swift is also a Trustee for Champlain College. Prior to joining Arcadia, Ms. Swift served for 15fifteen years in Massachusetts state government, becoming Massachusetts’ first femalewoman governor in 2001.
Michael J. Dunn, Jr. Age 59 Ms. Swift’s qualifications to sit on our Board include her strong skills in public policy and government relations and her extensive knowledge of regulatory matters arising from her fifteen years in state government.
| | | | |
Lawrence C. Caldwell | | | Age 68 | |
Mr. DunnCaldwell has served as a Supervisor since November 2012. He was a Co-Founder of New Canaan Investments, Inc., which we refer to as “NCI,” a private equity investment firm, where he was one of three senior officers of the firm from 1988 to 2005. NCI was an active “fix and build” investor in packaging, chemicals, and automotive components companies. Mr. Caldwell held a number of board directorships and senior management positions in these companies until he retired in 2005. The largest of these companies was Kerr Group, Inc., a plastic closure and bottle company where Mr. Caldwell served as Director for eight years and Chief Financial Officer for six years. From 1985 to 1988, Mr. Caldwell was head of acquisitions for Moore McCormack Resources, Inc., an oil and gas exploration, shipping, and construction materials company. Mr. Caldwell is currently a director of Magnuson Products, LLC, a private company which manufactures specialty engine components for automotive original equipment manufacturers and aftermarket. Mr. Caldwell also currently serves on the Board of Trustees and as Chairman of the Investment and Finance Committee of Historic Deerfield, and on the Board of Directors and as Chairman of both the Finance and Strategic Planning Committees of the Leventhal Map Center; both of which non-profit institutions focus on enriching educational programs for K-12 children locally and nationwide.
Mr. Caldwell’s qualifications to sit on our Board include over forty years of successful investing in and managing of a broad range of public and private businesses in a number of different industries. This experience has encompassed both turnaround situations, and the building of companies through internal growth and acquisitions.
Mr. Chanin has served as a Supervisor since November 2012. He was Senior Managing Director of Prudential Investment Management, a subsidiary of Prudential Financial, Inc., from 1996 until his retirement in January 2012. He headed the firm’s private fixed income business, chaired an internal committee responsible for strategic investing and was a principal in Prudential Capital Partners, the firm’s mezzanine investment business. He currently serves as a Director of two private companies that are in Prudential Capital Partners funds’ portfolios, and provides consulting services to Prudential and one other client.
Mr. Chanin’s qualifications to sit on our Board include 35 years of investment experience with a focus on highly structured private placements in companies in a broad range of industries, with a particular focus on energy companies. He has previously served on the audit committee of a public company board and is currently a member of the audit committee for a private company board. Mr. Chanin has earned an MBA and is a Chartered Financial Analyst.
Mr. Stivala has served as our President since April 2014 and as our Chief Executive Officer since September 2014. Mr. Stivala has served as a Supervisor since November 2014. From November 2009 until March 2014 he was our Chief Financial Officer, and, before that, our Chief Financial Officer and Chief Accounting Officer since October 2007. Prior to that he was our Controller and Chief Accounting Officer since May 2005 and as a SupervisorController since July 1998. From June 1998 until May 2005 he was Senior Vice President, becoming Senior Vice President — Corporate Development in November 2002. He was Vice President — Procurement and Logistics from March 1997 until June 1998.December 2001. Before joining Suburban, he held several positions with PricewaterhouseCoopers LLP, an international accounting firm, most recently as Senior Manager in the Assurance practice.
Mr. Dunn was ViceStivala’s qualifications to sit on our Board include his thirteen years of experience in the propane industry, including as our current President of Commodity Trading for the investment banking firm of Goldman Sachs & Company.
As described above under “Management Succession Plan,” Mr. Dunn will assume the additional responsibilities ofand Chief Executive Officer of Suburban at the commencementand, before that, as our Chief Financial Officer for almost 7 years, which day to day leadership roles have provided him with intimate knowledge of our 2010 fiscal year (September 27, 2009) and Mr. Alexander will transfer to him the sole membership interest in Suburban’s General Partner.
operations.Vote Required and Recommendation of the Board of Supervisors
Under the PartnershipMLP Agreement, the affirmative vote of holders of a plurality of the Common Units represented in person or by proxy at the Meeting is required to elect each Supervisor. The Board of Supervisors unanimously recommends a voteFORthe election of each of the above nominees.
6
EXECUTIVE OFFICERS OF SUBURBAN
The following table sets forth certain information with respect to our executive officers as of May 22, 2009.March 16, 2015. Officers are appointed by the Board of Supervisors for one-year terms.
| | | | | | |
Name | | Age | | | | | | | Position With Suburban |
Name
Michael A. Stivala | | Age
45 | | Position with Suburban
|
|
Mark A. Alexander | | | 50 | | | President and Chief Executive Officer; Member of the Board of Supervisors |
Michael J. Dunn, Jr. Mark Wienberg | | 52 | 59 | | | President; Member of the Board of SupervisorsChief Operating Officer |
Michael A. StivalaKuglin | | 45 | 40 | | | Chief Financial Officer and& Chief Accounting Officer |
A. Davin D’Ambrosio | | | 45 | | | Vice President and Treasurer |
Paul Abel | | 61 | 56 | | | Senior Vice President, General Counsel and Secretary |
Mark Anton, II | | | 51 | | | Vice President — Business Development |
Steven C. Boyd | | 50 | 45 | | | Senior Vice President —– Field Operations |
Douglas T. Brinkworth | | 53 | 47 | | | Senior Vice President —– Product Supply, Purchasing & Logistics |
Michael M. Keating | | 61 | 55 | | | Senior Vice President |
Neil E. Scanlon | | 49 | | | | Senior Vice President — Human Resources and Administration |
Mark Wienberg | | | 46 | | | Vice President — Operational Planning |
Neil Scanlon | | | 43 | | | Vice President —– Information Services |
Michael KuglinA. Davin D’Ambrosio | | 51 | 39 | | | Vice President and Treasurer |
Sandra N. Zwickel | | 48 | | | | Vice President – Human Resources |
Daniel S. Bloomstein | | 42 | | | | Controller |
Mr. Alexanderhas served as Chief Executive Officer and as a Supervisor since March 1996, and served as President from October 1996 until May 2005. He was Executive Vice Chairman from March 1996 through October 1996. From 1989 until joining Suburban in 1996, Mr. Alexander served in various offices at Hanson Industries (the United States management division of Hanson plc, a global diversified industrial conglomerate), most recently Senior Vice President — Corporate Development. Mr. Alexander is the sole member of Suburban’s General Partner. Mr. Alexander is a Director of Kaydon Corporation and a member of its Compensation and Corporate Governance and Nominating Committees.
As discussed above under “Management Succession Plan,” Mr. Alexander will be stepping down from the role of Chief Executive Officer of Suburban at the conclusion of our 2009 fiscal year (September 26, 2009) and transferring his sole membership interest in Suburban’s General Partner to Mr. Dunn. Mr. Alexander’s service as a Supervisor will cease at the conclusion of the Meeting.
For Mr. Dunn’sStivala’s biographical information, see “Nominees for Election as Supervisors” above.
Mr. StivalaWienberg has served as our Chief Financial Officer and Chief AccountingOperating Officer since October 2007. Prior toApril 2014 and before that he was Controller and Chief Accounting Officer since May 2005 and Controller since December 2001. Before joining Suburban, he held several positions with PricewaterhouseCoopers LLP, an international accounting firm, most recently as Senior Manager in the Assurance practice. Mr. Stivala is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.
Mr. D’Ambrosiohas served as Treasurer since November 2002 and was additionally made aour Vice President in October 2007. He served as Assistant Treasurer from October 2000 to November 2002– Operational Support and as Director of Treasury Services from January 1998 to October 2000. Mr. D’Ambrosio joined Suburban in May 1996 after 10 years in the commercial banking industry.
Mr. Abelhas served as General Counsel and Secretary since June 2006 and was additionally made aAnalysis (formerly Vice President in October 2007. From May 2005 until June 2006, Mr. Abel was Assistant General Counsel of Velocita Wireless, L.P., the owner and operator of a nationwide wireless data network. From 1998 until May 2005, Mr. Abel was Vice President, Secretary and General Counsel of AXS-One Inc. (formerly known as Computron Software, Inc.), an international business software company.
Mr. Antonhas served as Vice President — Business Development since he joined Suburban in 1999. Prior to joining Suburban, Mr. Anton worked as an Area Manager for another large multi-state propane marketer and was a Vice President at several large investment banking organizations.
7
Mr. Boyd has served as Vice President — Operations since October 2008. Prior to that he was Southeast and Western Area Vice President since March 2007, Managing Director — Area Operations since November 2003 and Regional Manager — Northern California since May 1997. Mr. Boyd held various managerial positions with predecessors of Suburban from 1986 through 1996.
Mr. Brinkworthhas served as Vice President — Supply since May 2005. Mr. Brinkworth joined Suburban in April 1997 after a nine-year career with Goldman Sachs (where he last served as Vice-President of Commodity Trading) and, since joining Suburban, has served in various positions in the supply area, most recently as Managing Director.
Mr. Keatinghas served as Vice President — Human Resources and Administration since July 1996. He previously held senior human resource positions at Hanson Industries and Quantum.
Mr. Wienberghas served as Vice President —– Operational PlanningPlanning) since October 2007. Prior to that he served as our Managing Director, Financial Planning and Analysis from October 2003 to October 2007 and as Director, Financial Planning and Analysis from July 2001 to October 2003. Prior to joining Suburban, Mr. Wienberg was Assistant Vice President —– Finance of International Home Foods Corp., a consumer products manufacturer.
Mr. ScanlonbecameKuglin has served as our Chief Financial Officer & Chief Accounting Officer since September 2014 and was our Vice President — Information Services in November 2008.– Finance and Chief Accounting Officer from April 2014 through September 2014. Prior to that he served as Assistantour Vice President — Information Servicesand Chief Accounting Officer since November 2007, Managing Director — Information Services from2011, our Controller and Chief Accounting Officer since November 2002 to November 20072009 and Director — Information Services from April 1997 until November 2002. Prior to joining Suburban, Mr. Scanlon spent several years with JP Morgan & Co., most recently as Vice President — Corporate Systems and earlier held several positions with Andersen Consulting (“Accenture”), an international systems consulting firm, most recently as Manager.
Mr. Kuglinhas served asour Controller since October 2007. For the eight years prior to joining Suburban he held several financial and managerial positions with Alcatel-Lucent, a global communications solutions provider. Prior to Alcatel-Lucent, Mr. Kuglin held several positions with the international accounting firm PricewaterhouseCoopers LLP, most recently as Manager in the Assurance practice. Mr. Kuglin is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.
Mr. Abel has served as our General Counsel and Secretary since June 2006, was additionally made a Vice President in October 2007 and a Senior Vice President in April 2014. Prior to joining Suburban, Mr. Abel served as senior in-house legal counsel (including as a General Counsel) for several technology companies.
Mr. Boyd has served as our Senior Vice President – Field Operations since April 2014; previously he was our Vice President – Field Operations (formerly Vice President – Operations) since October 2008. Prior to that he was our Southeast and Western Area Vice President since March 2007, Managing Director – Area Operations since November 2003 and Regional Manager – Northern California since May 1997. Mr. Boyd held various managerial positions with predecessors of Suburban from 1986 through 1996.
Mr. Brinkworth has served as our Senior Vice President – Product Supply, Purchasing & Logistics since April 2014 and was previously our Vice President – Product Supply (formerly Vice President – Supply) since May 2005. Mr. Brinkworth joined Suburban in April 1997 after a nine year career with Goldman Sachs and, since joining Suburban, has served in various positions in the product supply area.
Mr. Keating has served as our Senior Vice President since October 2014 and before that was our Senior Vice President – Administration since July 2009. From July 1996 to that date he was our Vice President – Human Resources and Administration. He previously held senior human resource positions at Hanson Industries (the United States management division of Hanson plc, a global diversified industrial conglomerate) and Quantum.
Mr. Scanlon became our Senior Vice President – Information Services in April 2014, after serving as our Vice President – Information Services since November 2008. Prior to that he served as our Assistant Vice President – Information Services since November 2007, Managing Director – Information Services from November 2002 to November 2007 and Director – Information Services from April 1997 until November 2002. Prior to joining Suburban, Mr. Scanlon spent several years with JP Morgan & Co., most recently as Vice President – Corporate Systems and earlier held several positions with Andersen Consulting, an international systems consulting firm, most recently as Manager.
Mr. D’Ambrosio has served as our Treasurer since November 2002 and was additionally made a Vice President in October 2007. He served as our Assistant Treasurer from October 2000 to November 2002 and as Director of Treasury Services from January 1998 to October 2000. Mr. D’Ambrosio joined Suburban in May 1996 after ten years in the commercial banking industry.
Ms. Zwickel has served as our Vice President – Human Resources since November 2013. Prior to that, she was our Assistant Vice President – Human Resources since April 2011 and earlier held several roles in Suburban’s Legal Department (including Assistant General Counsel from October 2009 to April 2011 and Counsel from October 2002 to October 2009), where she was responsible for, among other things, providing legal counsel on employment issues. Ms. Zwickel joined Suburban in June 1999 after eight years in the private practice of law.
Mr. Bloomstein joined Suburban as its Controller in April 2014. For the ten years prior to joining Suburban, he held several executive financial and accounting positions with The Access Group, a network of professional services companies, and with Dow Jones & Company, Inc., a global news and financial information company. Mr. Bloomstein started his career with the international accounting firm PricewaterhouseCoopers LLP, working his way to the level of Manager in the Assurance/Business Advisory Services practice. Mr. Bloomstein is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.
PARTNERSHIP GOVERNANCE
Our PartnershipThe MLP Agreement provides that all management powers over our business and affairs are exclusively vested in our Board of Supervisors and, subject to the direction of the Board of Supervisors, our officers. No Unitholder has any management power over our business and affairs or actual or apparent authority to enter into contracts on behalf of or otherwise to bind us.
Board Committees
The Board has twothree standing committees: an Audit Committee, a Compensation Committee and a CompensationNominating/Governance Committee. Because the Board of
Audit Committee
Four Supervisors consists of only seven members (six members(which number will be reduced to three following Mr. Mecum’s retirement at the conclusion of the Meeting), Suburban feels it is not necessary to have a separate nominating committee. Rather, the full Board participates in the selection of nominees to serve as Supervisors.
Audit Committee
Five Supervisors, who are not officers or employees of Suburban or its subsidiaries, serve on the Audit Committee with authority to review, approve or ratify, at the request of the Board,
of Supervisors, specific matters as to which the Board
of Supervisors believes there may be a conflict of interest, or which may be required to be disclosed pursuant to Item 404(a) of
Regulation S-K adopted by the Securities and Exchange
Commission, in order to determine if the resolution or course of action in respect of such conflict proposed by the Board of Supervisors is fair and reasonable to us. Under the PartnershipMLP Agreement, any matter that receives the “Special Approval” of the Audit Committee (i.e., approval by a majority of the members of the Audit Committee) is conclusively deemed to be fair and reasonable to us, is deemed approved by all of our partners and shall not constitute a breach of the PartnershipMLP Agreement or any duty stated or implied by law or equity as long as the material facts known to the party
8
having the potential conflict of interest regarding that matter were disclosed to the Audit Committee at the time it gave Special Approval. The Audit Committee also assists the Board of Supervisors in fulfilling its oversight responsibilities relating to:to (a) integrity of Suburban’s financial statements and internal control over financial reporting; (b) Suburban’s compliance with applicable laws, regulations and its code of conduct; (c) independence and qualifications of the independent registered public accounting firm; (d) performance of the internal audit function and the independent registered public accounting firm; and (e) accounting complaints.
Mr. Collins had previously advised the Board of Supervisors that he served on the audit committees of four public companies, including Suburban. In accordance with the rules of the New York Stock Exchange (“NYSE”), the Board of Supervisors had determined that Mr. Collins’ simultaneous service on four audit committees would not impair his ability to effectively serve on the Audit Committee of Suburban’s Board of Supervisors. Mr. Collins has advised the Board of Supervisors that as a result of one of those companies “going private,” as of May 22, 2009 he serves on the audit committees of three public companies, including Suburban.
Our Board has adopted a written charter for the Audit Committee, which is reviewed periodically to ensure that it meets all applicable legal and NYSE listing requirements. A copy of our Audit Committee Charter is available without charge from our website atwww.suburbanpropane.com or upon written request directed to: Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206.
The Board of Supervisors has determined that all fivefour current members of the Audit Committee, Lawrence C. Caldwell, John D. Collins (its Chairman), Harold R. Logan, Jr., John Hoyt Stookey, Dudley C. Mecum and Jane Swift, are independent and (with the exception of Ms. Swift) are audit committee financial experts and are independent within the meaning of the NYSE corporate governance listing standards and applicable Securitiesin accordance with Rule 10A-3 of the Exchange Act, Item 407 of Regulation S-K and Exchange Commission rulesSuburban’s criteria for Supervisor independence set forth below as of the date of this Proxy Statement.
The Corporate Governance Guidelines and Principles adopted by the Board of Supervisors (and available on our website atwww.suburbanpropane.com) set forth that a Supervisor is deemed to be lacking a material relationship to Suburban and is therefore independent if the following criteria are satisfied:
1. Within the past three years, the Supervisor:
a. has not been employed by Suburban and has not received more than $100,000 per year in direct compensation from Suburban, other than Supervisor and committee fees and pension or other forms of deferred compensation for prior service;
b. has not provided significant advisory or consultancy services to Suburban, and has not been affiliated with a company or a firm that has provided such services to Suburban in return for aggregate payments during any of the last three fiscal years of Suburban in excess of the greater of 2% of the other company’s consolidated gross revenues or $1 million;
c. has not been a significant customer or supplier of Suburban and has not been affiliated with a company or firm that has been a customer or supplier of Suburban and has either made to Suburban or received from Suburban payments during any of the last three fiscal years of Suburban in excess of the greater of 2% of the other company’s consolidated gross revenues or $1 million;
d. has not been employed by or affiliated with an internal or external auditor that within the past three years provided services to Suburban; and
e. has not been employed by another company where any of Suburban’s current executives serve on that company’s compensation committee;
2. The Supervisor is not a spouse, parent, sibling, child, mother- orfather-in-law, son- ordaughter-in-law or brother- orsister-in-law of a person having a relationship described in 1. above nor shares a residence with such person;
3. The Supervisor is not affiliated with a tax-exempt entity that within the past 12 months received significant contributions from Suburban (contributions of the greater of 2% of the entity’s consolidated gross revenues or $1 million are considered significant); and
9
| 1. | Within the past three years, the Supervisor: |
| a. | has not been employed by Suburban and has not received more than $100,000 per year in direct compensation from Suburban, other than Supervisor and committee fees and pension or other forms of deferred compensation for prior service; | |
| b. | has not provided significant advisory or consultancy services to Suburban, and has not been affiliated with a company or a firm that has provided such services to Suburban in return for aggregate payments during any of the last three fiscal years of Suburban in excess of the greater of 2% of the other company’s consolidated gross revenues or $1 million; | |
| c. | has not been a significant customer or supplier of Suburban and has not been affiliated with a company or firm that has been a customer or supplier of Suburban and has neither made to Suburban nor received from Suburban payments during any of the last three fiscal years of Suburban in excess of the greater of 2% of the other company’s consolidated gross revenues or $1 million; | |
| d. | has not been employed by or affiliated with an internal or external auditor that within the past three years provided services to Suburban; and | |
| e. | has not been employed by another company where any of Suburban’s current executives serve on that company’s compensation committee; | |
| 2. | The Supervisor is not a spouse, parent, sibling, child, mother- or father-in-law, son- or daughter-in- law or brother- or sister-in-law of a person having a relationship described in 1. above nor shares a residence with such person; |
| 3. | The Supervisor is not affiliated with a tax-exempt entity that within the past 12 months received significant contributions from Suburban (contributions of the greater of 2% of the entity’s consolidated gross revenues or $1 million are considered significant); and |
4. The Supervisor does not have any other relationships with Suburban or with members of senior management of Suburban that the Board determines to be material.
| 4. | The Supervisor does not have any other relationships with Suburban or with members of senior management of Suburban that the Board determines to be material. |
Mr. Logan, Chairman of the Board, presides at the regularly scheduled executive sessions of the non-management Supervisors, all of whom are independent, held as part of the meetings of the Audit Committee.Board. Investors and other parties interested in communicating directly with the non-management Supervisors as a group may do so by writing to the Non-Management Members of the Board of Supervisors,c/o PartnershipCompany Secretary, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206.
The Board will continue to review the qualifications of the members of the Audit Committee in light of the evolving requirements of the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission regulations and the NYSE listing requirements. The committee met 8eight times during fiscal 2008.
2014.Compensation Committee
The Compensation Committee reviews the performance and sets the compensation for all executives. It also approves the design of executive compensation programs. In addition, the Compensation Committee participates in executive succession planning and management development. The committee met 2three times during fiscal 2008.2014. Its members are Matthew J. Chanin, Harold R. Logan, Jr. and John Hoyt Stookey (its Chairman), Harold R. Logan, Jr., John D. Collins, Dudley C. Mecum and Jane Swift, noneall of whom are officers or employeesindependent in accordance with our Corporate Governance Guidelines and Principles and the rules of Suburban.
the NYSE.Our Board has adopted a Compensation Committee Charter. A copy of our Compensation Committee Charter is available without charge from our website atwww.suburbanpropane.com or upon written request directed to: Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206.
Supervisor NominationsNominating/Governance Committee
The Nominating/Governance Committee participates in Board succession planning and Criteriadevelopment and identifies individuals qualified to become Board members, recommends to the Board the persons to be nominated for election as Supervisors at any Tri-Annual Meeting of the Unitholders and the persons (if any) to be elected by the Board Membership
to fill any vacancies on the Board, develops and recommends to the Board changes to Suburban’s Corporate Governance Guidelines and Principles when appropriate, and oversees the evaluation of the Board. The
Committee has met 2 times since it was created by the Board at its July 22, 2014 meeting (prior to such date, the full Board
of Supervisors, fiveperformed the functions now assumed by the Nominating/Governance Committee). Its members are Lawrence C. Caldwell, Matthew J. Chanin, John D. Collins, Harold R. Logan, Jr. (its Chairman), Dudley C. Mecum, John Hoyt Stookey and Jane Swift, all of whom are independent in accordance with our Corporate Governance Guidelines and Principles and the rules of the
NYSE, participates in the considerationNYSE. Mr. Mecum’s membership on this Committee will not be filled upon expiration of
his current term as a Supervisor.Our Board has adopted a Nominating/Governance Committee Charter. A copy of our Nominating/Governance Committee Charter is available without charge from our website atwww.suburbanpropane.com or upon written request directed to: Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey 07981-0206.
Supervisor nominees. There is no charter governing the nomination process. Nominations and Criteria for Board Membership
To fulfill its responsibility to recruit nominees for election as Supervisors, the Board of SupervisorsNominating/Governance Committee reviews the composition of the Board to determine the qualifications and areas of expertise needed to further enhance the composition of the Board and works with management in attracting candidates with those qualifications. Appropriate criteriaOur Corporate Governance Guidelines and Principles set forth the following minimum qualifications for our Supervisors, who are nominated in accordance with the procedures set forth in the MLP Agreement:
1. Integrity.Individuals must be of personal and professional integrity and ethical character, who recognize and value these qualities in others.
2. Absence of Conflicts of Interest.In addition to meeting the independence standards set forth elsewhere in the Guidelines, a Supervisor should not have any interests that would materially impair his or her ability to (i) exercise independent judgment or (ii) otherwise discharge the fiduciary duties owed as a supervisor to Suburban and its unitholders.
3. Fair and Equal Representation.A Supervisor must be able to represent fairly and equally the long-term interests of all of Suburban’s unitholders without favoring or advancing any particular unitholder or other constituency of Suburban.
4. Achievement.A Supervisor must have demonstrated achievement in one or more fields of business, professional, or governmental endeavor.
5. Oversight.A Supervisor is expected to have sound judgment, borne of management or policy-making experience (which may be as an advisor or consultant), that demonstrates an ability to function effectively in an oversight role (including an inquisitive and rigorous manner of monitoring).
6. Experience and Business Understanding.A Supervisor should have relevant or relatable expertise and experience, and be able to offer advice and guidance to management based on that expertise and experience. In addition, he/she must have a general appreciation regarding key issues facing public companies of a size and operational scope similar to Suburban, including:
| — | | corporate governance concerns; |
| — | | regulatory obligations of a public issuer; |
| — | | strategic business planning; and |
| — | | basic concepts of corporate finance. |
7. Available Time.A Supervisor must have sufficient time available to devote to the affairs of the Board, membershipbe fully prepared to devote such time, and be physically and mentally capable of devoting such time. It is expected that each candidate will be available and able to attend substantially all meetings of the Board and any committees on which he/she will serve, as well as Suburban’s tri-annual and special meetings of unitholders, after taking into consideration his/her other business and professional commitments, including service on the boards of other companies. The Board should include at a minimum,least some supervisors who are committed to service on the following:
| | |
| • | Members of the Board should be individuals of high integrity, independence and substantial accomplishments, and should have prior or current association with institutions noted for their excellence. |
|
| • | Members of the Board should have demonstrated leadership ability with diverse perspectives, the ability to exercise sound business judgment and broad experience in areas important to the operation of Suburban. |
|
| • | Supervisors must act ethically at all times. |
Board for an extended period of time.8. Diversity.The Board seeks an appropriate diversity of personal and professional background, experience, expertise, and perspective among Supervisors. Board Supervisors should be able to cooperate with other Board members and contribute to the collegiality of the Board.
In addition, the BoardNominating/Governance Committee considers the number of other boards of public companies on which a candidate serves.
The Board considersUnitholders may nominate candidates for Supervisor suggested by our Unitholders, provided that the recommendations are madeSupervisors in accordance with the following procedures set forth in the PartnershipMLP Agreement. Any Unitholder (or group of Unitholders) that beneficially owns 10% or more of the outstanding Common Units is entitled to nominate one or more individuals to stand for election as Supervisors at a Tri-Annual Meeting by providing written notice thereof to the Board of Supervisors not more than 120 days and not less than 90 days prior to the date of such Tri-Annual Meeting; provided, however, that in the event that the date of the Tri-Annual Meeting was not publicly announced by Suburban by mail, press release or otherwise more than 100 days prior to the date of such meeting, such notice, to be timely, must be delivered to the Board of Supervisors not later than the close of business on the 10th day following the date on which the date of the Tri-Annual Meeting was announced. The notice must set forth (i) the name and address of the Unitholder(s) making the nomination or nominations, (ii) the number of Common
10
Units beneficially owned by such Unitholder(s), (iii) such information regarding the nominee(s) proposed by the Unitholder(s) as would be required to be included in a proxy statement relating to the solicitation of proxies for the election of Supervisors filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee(s) been nominated or intended to be nominated to the Board of Supervisors, (iv) the written consent of each nominee to serve as a member of the Board of Supervisors if so elected and (v) a certification that such nominee(s) qualify as Supervisor(s). Unitholder nominees whose nominations comply with these procedures and who meet the minimum criteria for Board membership, as outlined above, will be evaluated by the Board of SupervisorsNominating/Governance Committee in the same manner as the Board’sCommittee’s nominees.
Attendance at Meetings
It is the policy of the Board of Supervisors that all Supervisors should attend Suburban’s Unitholder meetings. All fivesix of the then Supervisors attended the Tri-Annual Meeting of Unitholders on May 1, 2012, which was subsequently adjourned until May 14, 2012 for lack of a quorum. When that meeting re-convened on May 14, all of the then Supervisors, other than Mr. Stookey, were in October 2006.
attendance.Board and Committee Meetings
The Board held 125 meetings in fiscal 2008.2014. Each Supervisor attended at least 75% of the total number of meetings of the Board and of the Committees of the Board on which such Supervisor served.
Unitholder Communications Withwith the Board of Supervisors
Unitholders who wish to communicate directly with the Board as a group may do so by writing to the Suburban Board of Supervisors,c/o PartnershipCompany Secretary, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206. Unitholders may also communicate directly with individual Supervisors by addressing their correspondence accordingly.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act, of 1934, as amended, requires our Supervisors, executive officers and holders of 10 percent or more of our Common Units to file initial reports of ownership and reports of changes in ownership of our Common Units with the Securities and Exchange Commission. Supervisors, executive officers and 10 percent Unitholders are required to furnish Suburban with copies of all Section 16(a) forms that they file. Based on a review of these filings, we believe that all such filings were timely made during fiscal 2008.
Code of Ethics and Code of Business Conduct and Ethics
We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and a Code of Business Conduct and Ethics that applies to all of our employees, officers and Supervisors. Copies of our Code of Ethics and our Code of Business Conduct and Ethics are available without charge from our website atwww.suburbanpropane.com or upon written request directed to: Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206. Any amendments to, or waivers from, provisions of our Code of Ethics or our Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer will be posted on our website.
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines and PoliciesPrinciples in accordance with the NYSE corporate governance listing standards in effect as of the date of this Proxy Statement. Copies of our Corporate Governance Guidelines and Principles are available without charge from our website atwww.suburbanpropane.com or upon written request directed to: Investor Relations, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey07981-0206.
11
NYSE Annual CEO Certification
The NYSE requires the Chief Executive Officer of each listed company to submit a certification indicating that the company is not in violation of the Corporate Governance listing standards of the NYSE on an annual basis. Our Chief Executive Officer submits his Annual CEO Certification to the NYSE each December. In December 2014, Mr. AlexanderStivala submitted his Annual CEO Certification for 2008our 2014 fiscal year to the NYSE without qualification.
REPORT OF THE AUDIT COMMITTEE
This report by the Audit Committee is required by the rules of the Securities and Exchange Commission pursuant to paragraph (d)(3) ofRegulation S-K Item 407. It shall not be deemed to be “soliciting material,” or to be “filed” with the Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, of 1934, as amended, except to the extent that Suburban specifically incorporates it by reference in such filing.
In accordance with the provisions of its written charter, the Audit Committee assists the Board of Supervisors in fulfilling its responsibility for oversight of (a) the integrity of Suburban’s financial statements and internal control over financial reporting; (b) Suburban’s compliance with applicable laws, regulations, and theits code of conduct; (c) independence and qualifications of the independent registered public accountants; (d) the performance of the internal audit function and the independent registered public accountants; and (e) accounting complaints. Management of Suburban is responsible for the preparation, integrity and objectivity of Suburban’s financial statements in accordance with generally accepted accounting principles and for establishing and maintaining a system of internal accounting and disclosure controls. PricewaterhouseCoopers LLP, Suburban’s independent registered public accounting firm, audits the annual financial statements prepared by management, expresses an opinion as to whether those financial statements fairly present, in all material respects, the financial position, results of operations and cash flows of Suburban in conformity with accounting principles generally accepted in the United States of America and discusses with the Audit Committee any issues they believe should be raised. The independent registered public accounting firm also annually audits the effectiveness of internal controlcontrols over financial reporting.
The Audit Committee has reviewed and discussed the audited consolidated financial statements set forth in Suburban’s Annual Report onForm 10-K for the fiscal year ended September 27, 20082014 with management. The Audit Committee also discussed with PricewaterhouseCoopers LLP those matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by theunder Public Company Accounting Oversight Board in Rule 3200T.
Auditing Standard No. 16, Communications with Audit Committees.The Audit Committee received the written disclosures and letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP the independence of that firm.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Supervisors that Suburban’s audited financial statements be included in Suburban’s Annual Report onForm 10-K for the fiscal year ended September 27, 2008,2014, filed with the Securities and Exchange Commission.
Respectfully submitted by the members of the Audit Committee of the Board of Supervisors.
John D. Collins, Chairman
Harold R. Logan, Jr.
John H. Stookey
Dudley C. Mecum
Jane Swift
12
PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth the aggregate fees for services related to fiscal years 2008 and 2007 provided by PricewaterhouseCoopers LLP, our independent registered public accounting firm.
| | | | | | | | | |
| | | Fiscal
| | | Fiscal
| |
| | | 2008 | | | 2007 | |
| |
| Audit Fees(a) | | $ | 2,325,000 | | | $ | 2,275,000 | |
| Audit-Related Fees(b) | | | 84,000 | | | | 145,000 | |
| Tax Fees(c) | | | 722,000 | | | | 848,000 | |
| All Other Fees(d) | | | 2,000 | | | | 2,000 | |
| | |
(a) | | Audit Fees consist of fees for professional services rendered for the integrated audit of our annual consolidated financial statements and our internal control over financial reporting, including reviews of our quarterly financial statements, as well as the issuance of consents in connection with other filings made with the Securities and Exchange Commission or state regulatory bodies. |
|
(b) | | Audit-Related Fees consist of fees for professional services rendered in connection with acquisition-related due diligence and consultations concerning financial accounting and reporting standards. |
|
(c) | | Tax Fees consist of fees for professional services related to tax reporting, tax compliance and tax-related transaction services. |
|
(d) | | All Other Fees consist of fees for software licenses related to on-line technical accounting and reporting resource material.John D. Collins, Chairman Lawrence C. Caldwell Dudley C. Mecum Jane Swift |
The Audit Committee of the Board of Supervisors has adopted a formal policy concerning the approval of audit and non-audit services to be provided by the independent registered public accounting firm, PricewaterhouseCoopers LLP. The policy requires that all services PricewaterhouseCoopers LLP may provide to us, including audit services and permitted audit-related and non-audit services, be pre-approved by the Audit Committee. The Audit Committee pre-approved all audit and non-audit services provided by PricewaterhouseCoopers LLP during fiscal 2008 and fiscal 2007.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides a review ofexplains our executive compensation philosophy, policies and practices with respect to the following executive officers of Suburban, (theto whom we refer as our “named executive officers”): theMichael J. Dunn, Jr., our former Chief Executive Officer (who held the position of President and Chief Executive Officer until March 31, 2014, and the position of Chief Executive Officer through September 27, 2014); Mr. Stivala, our current President and Chief Executive Officer (who held the position of Chief Financial Officer until March 31, 2014, and the position of President from April 1, 2014 through September 27, 2014); Mr. Kuglin, our current Chief Financial Officer and Chief Accounting Officer (who held the position of Vice President and Chief Accounting Officer until March 31, 2014, and the position of Vice President – Finance and Chief Accounting Officer, a position that required him to act in a manner identical to that of a Chief Financial Officer, from April 1, 2014 through September 27, 2014); and our three other two most highly compensated executive officers.
officers: Mr. Wienberg, our Chief Operating Officer; Mr. Boyd, our Senior Vice President – Field Operations; and Mr. Brinkworth, our Senior Vice President – Product Supply, Purchasing & Logistics.In accordance with a management succession plan developed by the Compensation Committee of Suburban’s Board of Supervisors, which we hereafter refer to as the “Committee,” in close collaboration with Mr. Dunn, Mr. Dunn retired at the conclusion of fiscal 2014.
Executive Compensation Philosophy and Components
The objectives of our executive compensation program are as follows:
| | |
| | • — | | The attraction and retention of talented executives who have the skills and experience required to achieve our goals; and |
|
| | • — | | The alignment of the short-term and long-term interests of our executive officers with the short-term and long-term interests of our Unitholders. |
We accomplish these objectives by providing our executives with compensation packages that combine various components that are specifically linked to either short-term or long-term performance measures. Therefore, our executive compensation packages are designed to achieve our overall goal of sustainable, profitable growth by rewarding our executive officers for behaviors that facilitate our achievement of this goal.
The principal components of the compensation we provide to our named executive officers are as follows:
| | • — | | Cash incentives paid under ana performance-based annual bonus plan; |
13
| | |
| | • — | Long-term | Long-Term Incentive Plan grants;awards; and |
|
| | • — | Discretionary grants | Awards of restricted units under the 2000 Restricted Unit Plan. |
We align the short-term and long-term interests of our executive officers with the short-term and long-term interests of our Unitholders by:
| | |
| | • — | | Providing our executive officers with an annual incentive target that encourages them to achieve or exceed targeted financial results and operating performance for the fiscal year; |
|
| | • — | | Providing a long-term incentive plan that encourages our executivesexecutive officers to implement activities and practices conducive to sustainable, profitable growth because it permits them to share in benefits generated in the future;growth; and |
|
| | • — | | Providing aour executive officers with restricted unit plan that is utilizedunits in order to retainencourage the servicesretention of the participating executive officers, over a five-year period while simultaneously encouraging behaviors conducive to the long-term appreciation of our Common Units. |
Establishing Executive Compensation
The Compensation Committee (the “Committee”) is responsible for overseeing our executive compensation program. In accordance with its charter, available on our website atwww.suburbanpropane.com, the Committee ensures that the compensation packages provided to our executive officers are designed in accordance with our compensation philosophy. The Committee reviews and approves the compensation packages of our managing directors, assistant vice presidents, vice presidents, senior vice presidents, and our named executive officers.
Annually, theThe November 13, 2013 Compensation Committee Meeting
As in past fiscal years, our Senior Vice President of Human Resources prepares– Administration (now Senior Vice President) prepared a comprehensive analysis of each executive officer’s past and current compensation to assist the Committee in the assessment and determination of executive compensation packages for the subsequent fiscal year.2014. The Committee considersconsidered a number of factors in establishing the fiscal 2014 executive compensation packages, for each executive officer, including, but not limited to, tenure,experience, scope of responsibility and individual performance. The relative importance assigned to each of these factors by the Committee may differ from executive to executive. The performance of each of our executive officers is continually assessed by the Committee and by our highest-ranking executive officers and also factors into the decision-making process, particularly in relationyear to promotions and increases in base compensation.year. In addition, as part of the Committee’s annual review of each executive officer’s total compensation package, for the fiscal year ended September 27, 2008 (“fiscal 2008”), the Committee was provided with benchmarking data for a relevant peer group of companies for comparison purposes. Thecomparison. This benchmarking data is just one of a number of factors that was considered by the Committee, but iswas not necessarily the most persuasive factor.
The benchmarking data provided to the Committee for fiscal 2014 was derived from the Mercer Human Resource Consulting, Inc. (“Mercer”(which we hereafter refer to as “Mercer”). Benchmark Database containing information obtained from surveys of over 2,5003,035 organizations and 167approximately 1,224 positions which may or may not include similarly sizedsimilarly-sized national propane marketers. The Committee does not base its benchmarking solely on a peer group of other propane marketers. The use of the Mercer database provides a broad base of compensation benchmarking information for companies of a size similar size to Suburban.
In making their decisions regarding executive compensation packages for fiscal 2014, for executive officers currently below the level of senior vice president, the members of the Committee reviewed the total cash compensation opportunities that were provided to each member of this subset of our executive officers (none of whom are our named executive officers) during the previous completed fiscal year. “Total cash compensation opportunity” consists of base salary, an annual cash bonus, and Long-Term Incentive Plan awards. The peer group usedCommittee then compared these officers’ total cash compensation opportunities to the total mean cash compensation opportunities for the Suburbanparallel positions consisted of organizations included in the Mercer databasedatabase. By focusing on total cash compensation opportunity as a whole, instead of on single components of compensation such as base salary, the Committee, when it met on November 13, 2013, created fiscal 2014 compensation packages for this subset of our executive officers that report annual revenuesemphasized the performance-based components of between $1.0 billion and $2.5 billion per year.
compensation.As in prior years, the Committee did not base its benchmarking solely on a peer group of other propane marketers. The Committee adopted this approach because it believes that benchmarking against such companies in determining “total cash compensation opportunities” is appropriate because of the proximity of Suburban’sour headquarters to New York City and the need to realistically compete for skilled executives in an environment shared by numerous other enterprises that seek similarly skilled employees. For this reason,employees requires a broader review of the market. The Committee chooses not to base its benchmarking on the compensation practices of other propane marketers due to the fact that the other, similarly sizedsimilarly-sized propane marketers compete for employeesexecutives in vastly different economic environments.
Alternatively,In connection with succession planning, the Committee unanimously decided to engage the services of Towers Watson & Co. (which we hereafter refer to as “Towers Watson”), a human resources consulting firm, for assistance in developing competitive compensation packages for those executive officers identified by the reasons below,Committee as our senior level executive officers (i.e., those executives who are currently at or above the level of senior vice president). The Committee agreed that it would defer making promotion-related decisions (with the notable exception of the promotion of Mr. Stivala discussed below) and compensation-related decisions relative to our senior core executive officers until its January 22, 2014 meeting, by which time it was contemplated that Towers Watson would have completed a study of Suburban, the executive team, and our past compensation practices.
In response to Mr. Dunn having informed the Committee that he intended to retire at the end of fiscal 2014, the Committee promoted Mr. Stivala to the position of President (effective April 1, 2014) at its November 13, 2013 meeting. For Mr. Stivala and for those whom the Committee identified as our senior level executive officers (currently our Chief Operating Officer, our Chief Financial Officer and Chief Accounting Officer, and our Senior Vice Presidents), the Committee decided to include all other propane marketers, structured as publicly traded partnerships, inpostpone establishing fiscal 2014 compensation-related adjustments until after the peer group it selectedCommittee was presented with recommendations from Towers Watson.
The January 22, 2014 Compensation Committee Meeting
After completing a study of Suburban and the responsibilities that had already been and were to be assumed by our senior level executive officers, a principal of Towers Watson provided the Committee with a presentation that included compensation recommendations for the 2003 Long-Term Incentive Plan (for more on the 2003 Long-Term Incentive Plan, refer to the subheading “2003 Long-Term Incentive Plan” below). Earning a payment under the 2003 Long-Term Incentive Plan is dependent upon the performance (referred to in the plan
14
document as “total return to unitholders”) of our Common Units in comparison to the unit performance of a peerthis group of eleven other master limited partnerships over a three-year measurement period. Because total return to Unitholders is based on unit price appreciation and distributions, bothexecutives. In accordance with the recommendations of which are impacted by earnings, this plan was implemented byTowers Watson, the Committee to provide an incentive to management to grow the business and to be conservative in regard to the management of expenses, among other things, and, thereby, enhance the return that we provide to our investors. Because master limited partnerships are not taxpaying entities, potentially these entities could have more available cash to distribute to their investors than similar businesses that operate as corporations and do pay corporate-level taxes. This sometimes enables master limited partnerships to provide a greater return, in the form of cash distributions, to their investors than similarly situated corporations. As a result of this reasoning, the Committee selected a peer group for the 2003 Long-Term Incentive Plan that included other propane marketers, even though the Committee selected the Mercer database as a tool to benchmark “total cash compensation opportunities.”
In establishing the executive compensation packages for theestablished fiscal year ended September 27, 2007 (“fiscal 2007”), the Committee used the median total compensation paid by the peer group to assess whether the “total cash compensation opportunities” that we provide to our executive officers are both competitive and commensurate with each executive officer’s position and corresponding duties. However, in establishing the fiscal 2008 executive compensation packages, due to an overall increase in executive salaries in the New York area, the Committee used the mean of the reported data as its benchmark. Generally speaking, the mean of the reported data is higher than the median. The members of the Committee focused on lessening the shortfalls between the compensation packages that we provide to our executive officers and the mean compensation paid by the companies whose data underlie the Mercer database. The Committee does not, however, have a formal target with respect to the amount of the shortfall it is trying to lessen. Moreover, the Committee does not set specific percentile targets for total compensation of our executive officers compared to the total compensation of the peer group.
In making its decisions regarding fiscal 2008 executive compensation packages, the Committee first reviewed the total cash compensation opportunities that we provided to our executive officers during fiscal 2007. Each executive officer’s “total cash compensation opportunities” consist of base salary, an annual cash bonus, and 2003 Long-Term Incentive Plan awards. The Committee then compared each executive officer’s total cash compensation opportunity to the total mean cash compensation opportunity for the parallel position in the Mercer study. By focusing on each executive officer’s total cash compensation opportunities as a whole, instead of on single components of compensation such as base salary, the Committee created fiscal 20082014 compensation packages for our
executive officersPresident (who is currently our President and Chief Executive Officer), our Chief Operating Officer, our Senior Vice Presidents, and our Vice President – Finance and Chief Accounting Officer (who is currently our Chief Financial Officer and Chief Accounting Officer). The compensation packages established at this meeting became effective on April 1, 2014, the effective date on which Mr. Stivala was promoted to the position of President, Mr. Kuglin was promoted to the position of Vice President – Finance and Chief Accounting Officer, Mr. Wienberg was promoted to Chief Operating Officer, Mr. Boyd was promoted to the position of Senior Vice President – Field Operations, and Mr. Brinkworth was promoted to the position of Senior Vice President – Product Supply, Purchasing & Logistics.The July 22, 2014 Compensation Committee Meeting
Continuing its preparation for Mr. Dunn’s retirement at the conclusion of fiscal 2014, the Committee approved Mr. Stivala’s assumption of the role and title of Chief Executive Officer in addition to his role as President. Because of the April 1, 2014 adjustments to Mr. Stivala’s overall compensation, the Committee chose not to adjust Mr. Stivala’s compensation at this time. This promotion became effective on September 28, 2014.
In addition, the Committee approved the promotion of Mr. Kuglin to Chief Financial Officer and Chief Accounting Officer. This promotion became effective on September 28, 2014. In establishing Mr. Kuglin’s compensation for this position, the Committee relied on the same Towers Watson study discussed above.
***
As previously reported, at their fiscal 2012 Tri-Annual Meeting, our Unitholders overwhelmingly approved the advisory “Say-on-Pay” resolution required by Section 14A of the Exchange Act. As a result, the Committee determined that emphasizeno major revisions of its practices are required; however, the performance-based components of compensation.
Committee has, and will continue to, periodically evaluate its compensation practices for possible improvement.Role of Executive Officers and the Compensation Committee in the Compensation Process
The Committee establishes and enforces our general compensation philosophy in consultation with our President and Chief Executive Officer. The role of our President and Chief Executive Officer in the executive compensation process is to recommend individual pay adjustments for the executive officers, other than himself, to the Committee based on market conditions, our performance, and individual performance. With the assistance of our Senior Vice President of Human Resources and– Administration, our President and Chief Executive Officer presents the Committee with information comparing each executive officer’s compensation to the mean compensation figures provided in the Mercer database.
Suburban’sAmong other duties, the Committee has overall responsibility for:
| — | | Reviewing and approving the compensation of our President and Chief Executive Officer, our Chief Operating Officer, our Chief Financial Officer, and our other executive officers; |
| — | | Reporting to the Board of Supervisors any and all decisions regarding compensation changes for our President and Chief Executive Officer and our other executive officers; |
| — | | Evaluating and approving our annual cash bonus plan, long-term incentive plan, and grants under our Restricted Unit Plans, as well as all other executive compensation policies and programs; |
| — | | Administering and interpreting the compensation plans that constitute each component of our executive officers’ compensation packages; and |
| — | | Engaging consultants, when appropriate, to provide independent, third-party advice on executive officer-related compensation. |
Our sole use of the Mercer database was to provide the Committee with benchmarking data. Therefore, prior to the November 13, 2013 Committee meeting, neither theour President and Chief Executive Officer nor theour Senior Vice President – Administration met with representatives from Mercer. The information provided by Mercer was derived from a proprietary database maintained by Mercer and, as such, there was no formal consultancy role played by them. The
In preparation for its January 22, 2014 Committee believesmeeting, the Committee directed Mr. Dunn, Mr. Stivala, Mr. Kuglin, Mr. Wienberg, and our Senior Vice President – Administration to meet with principals of Towers Watson to discuss the then current responsibilities of our senior level executives and their thoughts on the future responsibilities of these executives in light of the Committee’s succession planning efforts. It was from these interviews with our senior executive officers that the Mercer benchmarking data, which is provided to the Committee byprincipals of Towers Watson developed their recommendations regarding compensation of our Vice President of Human Resources and Administration, can be used by the Committee as an objective benchmark on which decisions relative tosenior level executive compensation can be based. In the course of its deliberations, the Committee compares the objective data obtained from the Mercer database to the internal analyses prepared by our Vice President of Human Resources and Administration.
Among other duties, the Committee has overall responsibility for:
| | |
| • | Reviewing and approving compensation of our Chief Executive Officer, President, Chief Financial Officer and our other executive officers; |
15team.
| | |
| • | Reporting to the Board of Supervisors any and all decisions regarding compensation changes for our Chief Executive Officer, President, Chief Financial Officer and our other executive officers; |
|
| • | Evaluating and approving our annual cash bonus plan, long-term incentive plan, restricted unit plan, as well as all other compensation policies and programs; |
|
| • | Administering and interpreting the compensation plans that constitute each component of our executive officers’ compensation packages; and |
|
| • | Engaging consultants, when appropriate, to provide independent, third-party advice on executive officer-related compensation (in prior fiscal years, the Committee engaged Sibson Consulting during fiscal 2004 for benchmarking the fiscal 2005 executive officers’ compensation packages and Mercer during fiscal 2005 for benchmarking our President’s 2006 compensation package). |
Allocation Among Components
Under our compensation structure, the mix of base salary, cash bonus and long-term compensation provided to each executive officer varies depending on his or her position. The base salary for each executive officer is the only fixed component of compensation. All other cash compensation, including annual cash bonuses and long-term incentive compensation, is variable in nature as it is dependent upon achievement of certain performance measures. The following table summarizes the components as percentages of each named executive officer’s total cash compensation opportunity for the first six months of fiscal 2014 (i.e., October 2013 through March 2014). For this period, the base salaries and cash bonus targets of our named executive officers remained identical to those in effect for fiscal 2008.
| | | | | | | | | | | | | |
| | | | | | Cash
| | | Long-Term
| |
| | | Base Salary | | | Bonus Target | | | Incentive | |
| |
| Mark A. Alexander(1) | | | 43 | % | | | 43 | % | | | 14 | % |
| Michael A. Stivala | | | 50 | % | | | 33 | % | | | 17 | % |
| Michael J. Dunn, Jr. | | | 40 | % | | | 40 | % | | | 20 | % |
| Steven C. Boyd | | | 52 | % | | | 31 | % | | | 17 | % |
| Michael M. Keating | | | 50 | % | | | 33 | % | | | 17 | % |
| | |
(1) | | Mr. Alexander’s Long-Term Incentive Plan award is considerably less than Mr. Dunn’s per the terms of an agreement between Mr. Alexander and Suburban. |
2013. | | | | | | | | | | |
| | | Base Salary | | | | Cash Bonus Target | | | | Long-Term Incentive |
| | |
| | | | | |
Michael J. Dunn, Jr. | | 40% | | | | 40% | | | | 20% |
Michael A. Stivala | | 46% | | | | 36% | | | | 18% |
Michael A. Kuglin | | 51% | | | | 33% | | | | 16% |
Mark Wienberg | | 46% | | | | 36% | | | | 18% |
Steven C. Boyd | | 46% | | | | 36% | | | | 18% |
Douglas T. Brinkworth | | 46% | | | | 36% | | | | 18% |
The following table summarizes the components as percentages of each named executive officer’s total cash compensation opportunity for the second six months of fiscal 2014 (i.e., April 2014 through September 2014).
| | | | | | | | | | |
| | | Base Salary | | | | Cash
Bonus Target | | | | Long-Term
Incentive |
| | |
| | | | | |
Michael J. Dunn, Jr. | | 40% | | | | 40% | | | | 20% |
Michael A. Stivala | | 44% | | | | 44% | | | | 12% |
Michael A. Kuglin | | 50% | | | | 35% | | | | 15% |
Mark Wienberg | | 46% | | | | 37% | | | | 17% |
Steven C. Boyd | | 46% | | | | 37% | | | | 17% |
Douglas T. Brinkworth | | 46% | | | | 37% | | | | 17% |
In allocating compensation among these elements,components, we believe that the compensation of our senior-most levels of management —senior level executive officers – the levels of managementexecutive officers having the greatest ability to influence our performance —– should be approximately 50% performance-based, while lower levels of management should receive a greater portion of their compensation in base salary. Additionally, our short-term and long-term incentive plans are pay-for-performance compensation plans that do not provide for minimum payments and are, thus, truly pay-for-performance compensation plans.
payments.Internal Pay Equity
In determining the different compensation packages for each of our named executive officers, the Committee takes into consideration a number of factors, including the level of responsibility and influence that each named executive officer has over the affairs of Suburban, tenure, individual performance and years of experience in one’shis current position. The relative importance assigned to each of these factors by the Committee may differ from executive to executive. The Committee will also consider the existing level of equity ownership of each of our named executive officers when granting awards under our 2000 Restricted Unit Plan and the 2003 Long-Term Incentive Plan (see below for a description of both plans)this plan). The compensation packages for our Chief Executive Officer and our President are set forth in their respective employment agreements, as further described below. As a result, different weightweights may be given to different components of compensation among each of our named executive officers. In addition, as discussed in the
section above titled “Allocation Among Components,” the compensation packages that we provide to our senior-most levels of managementsenior level executive officers are, at a minimum, approximately 50% performance-based. In order to align the interests of senior management with the interests of our Common Unitholders, we consider it requisite to accentuate the performance-based elements of the compensation packages that we provide to these individuals because the actions and decisions of these individuals have a direct impact on our performance.
16
Base Salary
Base salaries for the named executive officers and indeed, all of our other executive officers, are reviewed and approved annually by the Committee. In order to determine base salary increases, the fiscal 2008 base salaries, the Committee comparedCommittee’s practice has been to compare each executive officer’s fiscal 2007 base salary with the corresponding mean salary provided in the Mercer database. The Committee determinedusually determines base salary adjustments, which may be higher or lower than the comparative data, following an assessment of our overall results as well as each executive officer’s position, performance and scope of responsibility, while at the same time considering each executive officer’s previous total cash compensation opportunities. AtThis year, in order to facilitate the beginningsuccession planning process, the Committee engaged the services of fiscal 2008, each namedTowers Watson to make recommendations regarding the compensation packages provided to the executive officer received adjustmentsofficers the Committee identified as Suburban’s senior level executive officers. In accordance with a tentative plan of succession discussed by the Committee at its November 13, 2013 meeting, the Committee decided to hispostpone discussions of base salary inadjustments for our senior level executive officers until its January 22, 2014 Committee meeting when the results of the Towers Watson study would be made available.
In accordance with the philosophyrecommendations contained in the Towers Watson study, the Committee adjusted the base salaries of the named executive officers (with the exception of Mr. Dunn who retired at the conclusion of fiscal 2014). These adjustments became effective on April 1, 2014, the effective date of Mr. Stivala’s promotion to President; Mr. Kuglin’s promotion to Vice President – Finance and process described above, ranging from 0%Chief Accounting Officer; Mr. Wienberg’s promotion to 25%. Chief Operating Officer; Mr. Boyd’s promotion to Senior Vice President – Field Operations; and Mr. Brinkworth’s promotion to Senior Vice President – Product Supply, Purchasing & Logistics.
| | | | | | |
| Name | | Fiscal 2014 Base Salary (Second Six Months of Fiscal Year) | | Fiscal 2014 Base Salary (First Six Months of Fiscal Year) | | Fiscal 2013 Base Salary |
Michael J. Dunn, Jr. | | $495,000 | | $495,000 | | $495,000 |
Michael A. Stivala | | $425,000 | | $300,000 | | $300,000 |
Michael A. Kuglin | | $265,000 | | $240,000 | | $240,000 |
Mark Wienberg | | $325,000 | | $280,000 | | $280,000 |
Steven C. Boyd | | $315,000 | | $290,000 | | $290,000 |
Douglas T. Brinkworth | | $300,000 | | $270,000 | | $270,000 |
In the event of a promotion, (such as Mr. Boyd’sa significant increase in fiscal 2007)an executive officer’s responsibilities, or a new hire, it is the Committee reviews and takes action at its next meeting.
The fiscal 2008 adjustmentsCommittee’s practice to
each namedreview that executive officer’s base salary
at that time and take such action as the Committee deems warranted.At its meeting on July 22, 2014, effective September 28, 2014, the Committee increased Mr. Kuglin’s salary to $275,000, in recognition of his promotion to Chief Financial Officer and Chief Accounting Officer.
At its meeting on November 11, 2014, the Committee did not adjust the base salaries of our named executive officers for fiscal 2015 because their salaries were as follows:
| | | | |
Mark A. Alexander(1) | | | 0 | % |
Michael A. Stivala(2) | | | 25 | % |
Michael J. Dunn, Jr.(3) | | | 6 | % |
Steven C. Boyd | | | 4 | % |
Michael M. Keating | | | 5 | % |
| | |
(1) | | Because Mr. Alexander’s base salary is set forth under the provisions of his employment agreement, the Committee did not adjust his base salary. |
|
(2) | | The Committee’s decision to increase Mr. Stivala’s salary by 25% was based on consideration of the increased responsibilities he assumed upon his promotion from Controller to Chief Financial Officer and the increasing complexity of the Chief Financial Officer’s responsibilities resulting from the promulgation of the Sarbanes-Oxley Act and related regulations. |
|
(3) | | Although Mr. Dunn’s initial base salary was established under the terms of his employment agreement, those terms provide for annual base salary adjustments at the discretion of the Committee. |
adjusted on April 1, 2014.The total base salarysalaries paid to eachthe named executive officerofficers in fiscal 2008 is2014, fiscal 2013 and fiscal 2012 are reported in the column titled “Salary ($)”“Salary” in the Summary Compensation Table below.
Annual cash bonuses (which fall within the Securities and Exchange Commission’s definition of “Non-Equity Incentive Plan Compensation” for the purposes of the Summary Compensation Table and otherwise) are earned by our executive officers in accordance with the objective performance objective provisions of our annual cash bonus plan.
The terms of our annual cash bonus plan provide for cash payments of a specified percentage of our named executive officers’ annual base salaries (“target cash bonus”) if, for the fiscal year, actual cash bonus plan EBITDA equals Suburban’s budgeted EBITDA. For purposes of calculating cash bonus plan EBITDA, the Committee customarily adjusts both budgeted and actual EBITDA (as defined in Item 6 of Suburban’s Annual Report on Form 10-K for the fiscal year ended September 27, 2014) for various items considered to be non-recurring in nature; including, but not limited to, unrealized (non-cash) gains or losses on changes in the fair value of derivative instruments; acquisition-related costs; integration-related costs; multiemployer pension plan withdrawal charges; pension settlement charges; and losses on debt extinguishment. Under the provisions of the annual cash bonus plan in effect for fiscal 2014, our executive officers had the opportunity to earn between 60% and 120% of their target cash bonuses, earned by Mr. Alexander and Mr. Dunn aredepending upon Suburban’s EBITDA performance during the only exceptions to this general rule because theirfiscal year, in accordance with the following table.
| | | | | | |
| | | Actual EBITDA as a % of budgeted EBITDA | | % of Target Cash Bonus Earned | | |
| 120% and above | | 120% | |
| 119% | | 119% | |
| 118% | | 118% | |
| 117% | | 117% | |
| 116% | | 116% | |
| 115% | | 115% | |
| 114% | | 114% | |
| 113% | | 113% | |
| 112% | | 112% | |
| 111% | | 111% | |
| 110% | | 110% | |
| 109% | | 109% | |
| 108% | | 108% | |
| 107% | | 107% | |
| 106% | | 106% | |
| 105% | | 105% | |
| 104% | | 104% | |
| 103% | | 103% | |
| 102% | | 102% | |
| 101% | | 101% | |
| 100% | | 100% | |
| 99% | | 98% | |
| 98% | | 96% | |
| 97% | | 94% | |
| 96% | | 92% | |
| 95% | | 90% | |
| 94% | | 68% | |
| 93% | | 66% | |
| 92% | | 64% | |
| 91% | | 62% | |
| 90% | | 60% | |
| Below 90% | | 0% | |
Although our annual cash bonus provisions are established in their respective employment agreements. Although this plan is generally administered usingin accordance with the formula described below, occasionallyprovisions of the plan, the Committee may exercise its broad discretionary powers to decrease or increase the annual cash bonus paid to a particular executive officer, upon the recommendation of our President and Chief Executive Officer, or to the executive officers as a group, when the Committee recognizes that a particular executive officer’s performance warrants a decreased or an increased bonus. Such adjustments, if any, are recommended to the Committee by our Chief Executive Officer.adjustment is warranted. During fiscal 2008, our Chief Executive Officer did not make any2014, fiscal 2013 and fiscal 2012, no such recommendationsdiscretionary adjustments were made to the Committee.
The terms of our annual cash bonus plan provide for cash payments of a specified percentage (which, in fiscal 2008 ranged from 60% to 100%) of our named executive officers’ annual base salaries (“target cash bonus”) if, for the fiscal year, actual EBITDA (net income before deducting interest expense, income taxes, depreciation and amortization) equals Suburban’s budgeted EBITDA. For purposes of calculating the annual cash bonus, the Committee may exercise discretion to adjust both budgeted and actual EBITDA for various items considered to be non-recurring in nature; including, but not limited to, unrealized (non-cash) gains or losses on derivative instruments reported within cost of products sold inbonuses earned by our statement of operations and gains or losses on the disposal of discontinued operations (“cash bonus plan EBITDA”). Executive officers have the opportunity to earn between 90% and 110% of their target cash bonuses, in accordance with the terms of the plan, paralleling the
17
percentage of actual cash bonus plan EBITDA in relationship to budgeted cash bonus plan EBITDA ranging from 90% to 110%. Under the annual cash bonus plan, no bonuses are earned if actual cash bonus plan EBITDA is less than 90% of budgeted cash bonus plan EBITDA and cash bonuses cannot exceed 110% of the target cash bonus even if actual cash bonus plan EBITDA is more than 110% of budgeted cash bonus plan EBITDA.
For fiscal 2008,2014, our budgeted cash bonus plan EBITDA was $187.0 million.$360.0 million (“Budgeted EBITDA”). Our actual cash bonus plan EBITDA was such that each of our executive officers earned 95%68% of his or her target cash bonus. The following table provides the fiscal 20082014 budgeted cash bonus plan EBITDA targets that were established at the October 31, 2007 CompensationNovember 13, 2013 Committee meeting:
| | | | | |
| | | Target Bonus Percentage that
| |
| | | would have been Earned if
| |
| | | Actual Cash Bonus Plan
| |
Fiscal 2008 Budgeted Cash
| | EBITDA Equaled the Figure
| |
Bonus Plan EBITDA | | in the Previous Column | |
| (In millions) | | | |
| |
| $205.7 | | | 110 | % |
| $196.4 | | | 105 | % |
$187.0(1) | | | 100 | % |
| $177.7 | | | 95 | % |
| $168.3 | | | 90 | % |
| | | | |
Hypothetical Fiscal 2014 Cash Bonus Plan EBITDA Results (in Millions) | | Hypothetical Fiscal 2014 Cash Bonus Plan EBITDA Expressed as a Percentage of Budgeted Cash Bonus Plan EBITDA | | Target Bonus Percentage that would have been Earned if Actual Cash Bonus Plan EBITDA Equaled the Figure in the First Column |
$432.0 | | 120% | | 120% |
$396.0 | | 110% | | 110% |
$360.0 (1) | | 100% | | 100% |
$342.0 | | 95% | | 90% |
$324.0 | | 90% | | 60% |
| | |
| (1) | | Budgeted cash bonus plan EBITDA for fiscal 2008.2014. |
The bonuses earned under the annual cash bonus plan by eachFor those named executive officers who were promoted on April 1, 2014 (all of our named executive officers except Mr. Dunn), actual payments earned are reportedequal to one half of what the payment would have been using each named executive officer’s base salary and bonus percentage in effect for the column titled “Non-Equity Incentive Plan Compensation ($)”first half of fiscal 2014, plus one half of what the payment would have been using each named executive officer’s base pay and bonus percentage in effect for the Summary Compensation Table below.
second half of fiscal 2014. The 2008fiscal 2014 target cash bonus percentages for both halves of the year and the blended target cash bonuses established for each named executive officer and the actual cash bonuses earned by each of them during fiscal 20082014 are summarized as follows:
| | | | | | | | | | | | | |
| | | 2008 Target Cash
| | | | | | | |
| | | Bonus as a % of
| | | 2008 Target Cash
| | | 2008 Actual Cash
| |
Name | | Base Salary | | | Bonus | | | Bonus Earned | |
| |
| Mark A. Alexander(1) | | | 100 | % | | $ | 450,000 | | | $ | 427,500 | |
| Michael A. Stivala | | | 65 | % | | $ | 162,500 | | | $ | 154,375 | |
| Michael J. Dunn, Jr.(1) | | | 100 | % | | $ | 425,000 | | | $ | 403,750 | |
| Steven C. Boyd | | | 60 | % | | $ | 147,000 | | | $ | 139,650 | |
| Michael M. Keating | | | 65 | % | | $ | 143,000 | | | $ | 135,850 | |
| | |
(1) | | Mr. Alexander’s and Mr. Dunn’s target cash bonuses are established by the terms of their respective employment agreements. See “Employment and Separation Agreements” section below. |
| | | | | | | | |
| Name | | 2014 Target Cash Bonus as a % of Base Salary (for the First Half of the Fiscal Year) | | 2014 Target Cash Bonus as a % of Base Salary (for the Second Half of the Fiscal Year) | | 2014 Target Cash Bonus | | 2014 Actual
Cash Bonus
Earned at 68% |
Michael J. Dunn, Jr. | | 100% | | 100% | | $495,000 | | $336,600 |
Michael A. Stivala | | 80% | | 100% | | $332,500 | | $226,100 |
Michael A. Kuglin | | 65% | | 70% | | $170,750 | | $116,110 |
Mark Wienberg | | 80% | | 80% | | $242,000 | | $164,560 |
Stephen C. Boyd | | 80% | | 80% | | $242,000 | | $164,560 |
Douglas T. Brinkworth | | 80% | | 80% | | $228,000 | | $155,040 |
For purposes of establishing the cash bonus targets for fiscal 2008, at its meeting on October 31, 20072014, the Committee reviewed and approved our fiscal 20082014 budgeted cash bonus plan EBITDA.EBITDA at its November 13, 2013 meeting. The budgeted cash bonus plan EBITDA is developed annually using abottom-up process factoring in reasonable growth targets from the prior yearyear’s performance, while at the same time attempting to reach a good balance between a target that is reasonably achievable, yet not assured. As described above, during fiscal 2014, our executive officers will havehad the opportunity to earn between 90%60% and 110%120% of their target cash bonuses, paralleling the percentage of actual cash bonus plan EBITDA in relationship to budgeted cash bonus plan EBITDA ranging from 90% to 110%.bonuses. Over the past three years, our actual cash bonus plan EBITDA was such that each of our executive officers earned 95%68%, 110%60% and 109%0% of their respective target cash bonus for fiscal 2008, 20072014, fiscal 2013 and 2006,fiscal 2012, respectively.
2003 With the exception of Mr. Kuglin (and Mr. Dunn who has retired), the named executive officers’ target cash bonus percentages and target cash bonuses for fiscal 2015 are the same as those for the second half of fiscal 2014. In recognition of his promotion to Chief Financial Officer and Chief Accounting Officer, Mr. Kuglin’s fiscal 2015 target cash bonus has been increased to 75% of his base salary. Actual payments for fiscal 2015 under the annual cash bonus plan will depend upon the percentage of the budgeted cash bonus plan EBITDA for fiscal 2015 that is eventually achieved.
In accordance with recommendations from Towers Watson, the Committee modified the terms of our annual cash bonus plan, beginning with fiscal 2015, to provide our executive officers with the opportunity to earn between 50% and 120% of their target cash bonuses, depending upon Suburban’s EBITDA performance during the fiscal year, in accordance with the following table.
| | | | |
| | | Actual EBITDA as a % of budgeted EBITDA | | % of Target Cash Bonus Earned |
| 120% and above | | 120% |
| 119% | | 119% |
| 118% | | 118% |
| 117% | | 117% |
| 116% | | 116% |
| 115% | | 115% |
| 114% | | 114% |
| 113% | | 113% |
| 112% | | 112% |
| 111% | | 111% |
| 110% | | 110% |
| 109% | | 109% |
| 108% | | 108% |
| 107% | | 107% |
| 106% | | 106% |
| 105% | | 105% |
| 104% | | 104% |
| 103% | | 103% |
| 102% | | 102% |
| 101% | | 101% |
| 100% | | 100% |
| 99% | | 98% |
| 98% | | 96% |
| 97% | | 94% |
| 96% | | 92% |
| 95% | | 90% |
| 94% | | 85% |
| 93% | | 82.5% |
| 92% | | 80% |
| 91% | | 77.5% |
| 90% | | 75% |
| 89% | | 70% |
| 88% | | 65% |
| 87% | | 60% |
| 86% | | 55% |
| 85% | | 50% |
| Below 85% | | 0% |
The bonuses earned by our named executive officers under the annual cash bonus plan for fiscal 2014 and 2013 are reported in the column titled “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table below.
Long-Term Incentive Plan
At the beginning of fiscal 2003, we adopted the 2003 Long-Term Incentive Plan (“LTIP-2”), a phantom unit plan, as a principal component of our executive compensation program. While the annual cash bonus plan is a pay-for-performance plan that focuses on our short-term financial goals, LTIP-2the Long-Term Incentive Plan, which we hereafter refer to as the “LTIP,” is structured as a phantom unit plan that has been designed to motivate our executive officers to focus on our long-term financial goals. LTIP-2 measuresUnvested awards are granted at the beginning of each fiscal year as a Committee-approved percentage of each executive officer’s salary. Cash payments, if any, are earned and paid at the end of a three-year measurement period, depending on performance.
The LTIP is designed to:
| — | | Align a portion of our executive officers’ compensation opportunities with the long-term goals of our Unitholders; |
| — | | Provide long-term compensation opportunities consistent with market practice; |
| — | | Reward long-term value creation; and |
| — | | Provide a retention incentive for our executive officers and other key employees. |
LTIP History
At the beginning of fiscal 2003, the Committee adopted the 2003 Long-Term Incentive Plan (which we hereafter refer to as the “2003 LTIP”) as a principal component of our executive compensation program. At its meeting on November 9, 2011, the Committee adopted the 2013 Long-Term Incentive Plan (which we hereafter refer to as the “2013 LTIP”) as a replacement for the 2003 LTIP, which expired on September 30, 2012. The 2013 LTIP became effective on October 1, 2012; its provisions were essentially identical to the provisions of the 2003 LTIP. In accordance with recommendations from Towers Watson, at its meeting on August 6, 2013, the Committee adopted the 2014 Long-Term Incentive Plan (which we hereafter refer to as the “2014 LTIP”) as a replacement for the 2013 LTIP. The provisions of the 2014 LTIP govern all LTIP awards granted subsequent to fiscal 2013.
Calculation of LTIP Phantom Units
In accordance with the 2003, 2013, and 2014 LTIP documents, at the beginning of each three-fiscal year measurement period, each executive officer’s number of unvested LTIP unit awards is calculated by dividing a predetermined percentage (52% for awards made prior to fiscal 2014 and 50% for all subsequent awards), established by the Committee, of each executive officer’s target cash bonus by the average of the closing prices of our Common Units for the twenty days preceding the beginning of the first fiscal year in the measurement period.
The following are the numbers of the unvested LTIP units granted to our named executive officers during fiscal 2014 and fiscal 2013 that will be used to calculate cash payments at the end of each award’s respective three-year measurement period (i.e., at the end of fiscal 2016 for the fiscal 2014 award and at the end of fiscal 2015 for the fiscal 2013 award):
| | | | | | | | | | |
| | | Fiscal | | | | | Fiscal | |
| | | 2014 Award | | | | | 2013 Award | |
Michael J. Dunn, Jr. | | | 5,404 | | | | | | 6,559 | |
Michael A. Stivala | | | 2,620 | | | | | | 3,180 | |
Michael A. Kuglin | | | 1,703 | | | | | | 2,067 | |
Mark Wienberg | | | 2,445 | | | | | | 2,968 | |
Steven C. Boyd | | | 2,533 | | | | | | 3,074 | |
Douglas T. Brinkworth | | | 2,358 | | | | | | 2,862 | |
At its meeting on November 11, 2014, the Committee approved the grant of the following number of unvested LTIP unit awards under the LTIP for the fiscal 2015 award cycle that commenced at the beginning of fiscal 2015 and will conclude at the end of fiscal 2017, that will be used to calculate cash payments at the end of this award’s three-year measurement period (i.e., at the end of fiscal 2017).
| | | | |
| | Fiscal | |
| | 2015 Award | |
Michael A. Stivala | | | 4,770 | |
Michael A. Kuglin | | | 2,315 | |
Mark Wienberg | | | 2,918 | |
Steven C. Boyd | | | 2,828 | |
Douglas T. Brinkworth | | | 2,694 | |
Performance Metrics
The primary difference between the 2003/2013 LTIPs and the 2014 LTIP is the performance metric used to determine whether cash payments have been earned by the participants at the end of an LTIP award cycle’s three-year measurement period.
Awards made prior to fiscal 2014 under the 2003 and 2013 LTIPs measure the market performance of our Common Units on
18
the basis of total return to our Unitholders,
(“TRU”)which we refer to as “TRU,” during a three-year measurement period commencing on the first day of the fiscal year in which an unvested award was granted and compares our TRU to the TRU of each of the other members of a predetermined peer group, consisting solely of other master limited partnerships, approved by the Committee. The
predeterminedfiscal 2013 LTIP award is the only remaining award subject to this metric.The following table lists, in alphabetical order, the names and ticker symbols of the peer group may vary from year-to-year, but for all current awards, includes AmeriGas Partners, L.P., Ferrellgas Partners, L.P. and Inergy, L.P. (the other propane master limited partnerships). Unvested awards are granted at the beginning of each fiscal year as a Committee-approved percentage of each executive officer’s salary. Cash payouts, if any, are earned and paid at the end ofused to measure our performance during the three-year measurement period.
LTIP-2 is designed to:
period for the fiscal 2013 LTIP award: | | |
| • | Align a portion of our executive officers’ compensation opportunities with the long-term goals of our Unitholders;Fiscal 2013 Award Peer Group |
| Peer Group Member Name | | Ticker Symbol |
| Atlas Pipeline Partners, L.P. | | APL |
| AmeriGas Partners, L.P. | | APU |
| BreitBurn Energy Partners, L.P. | | BBEP |
| Copano Energy, LLC (1) | | CPNO |
| Enbridge Energy Partners, L.P. | | EEP |
| Ferrellgas Partners, L.P. | | FGP |
| Genesis Energy, L.P. | | GEL |
| Global Partners L.P. | | GLP |
| Inergy Midstream, L.P. (2) | | NRGM |
| MarkWest Energy Partners, L.P. | | MWE |
| TC Pipelines, L.P. | | TCP |
| | • (1) | Provide long-term compensation opportunities consistent with market practice;Copano Energy, LLC was acquired by Kinder Morgan Energy Partners, L.P. on May 1, 2013. For purposes of measuring relative TRU for the fiscal 2013 award, as a result of this event, we have reduced the peer group of this award by one member. |
|
| | • (2) | Reward long-term value creation;Inergy Midstream, L.P. merged with Crestwood Midstream Partners LP on October 7, 2013. The combined partnership is named Crestwood Midstream Partners LP and |
|
| • | Provide trades under ticker CMLP on the New York Stock Exchange. For purposes of measuring relative TRU for the fiscal 2013 award, as a retention incentive for our executive officers and other key employees.result of this event, we have reduced the peer group of this award by one member. |
The three-year measurement period of the fiscal 2012 award ended simultaneously with the conclusion of fiscal 2014. The TRU for the fiscal 2012 award fell within the lowest quartile; therefore, the participants, including our named executive officers, did not earn cash payments relative to this award.
Subsequent to the Committee’s meeting on November 13, 2012, the Committee reconsidered the use of TRU as the performance metric for purposes of the LTIP. As a result, the Committee engaged the services of Towers Watson to review the LTIP’s measurement criteria. At the Committee’s July 24, 2013 meeting, Towers Watson presented the Committee with a recommendation to replace TRU with a performance metric that measures our average distribution coverage ratio over a three-year measurement period.
The Committee’s decision to replace the 2013 LTIP with the 2014 LTIP was based on its determination that an incentive structure focused on the level of distributable cash flow over a three-year measurement period, which supports the sustainability of the cash distributions to Unitholders and future growth in distributions, is a more meaningful indicator of Suburban’s performance than comparative TRU, and also better aligns management’s interests with those of the Unitholders. The Committee’s rationale for making this decision was based on two significant factors. The first was the recognition that the structure of the 2013 LTIP was based primarily on the structure of the 2003 LTIP, which was adopted when the twelve-member peer group contained six (including Suburban) publicly-traded partnerships engaged in the business of selling propane. As a result of acquisitions and mergers that have occurred in that business since 2003, at the time of the adoption of the 2014 LTIP, there remained in the peer group only three (including Suburban) publicly-traded partnerships engaged in the business of selling propane. The second factor that the Committee considered was that publicly-traded partnerships are generally regarded as income-oriented investments. As an income-oriented investment, publicly-traded partnerships make cash distributions of available cash within 45 days after each quarter’s end. Therefore, because of the increased dissimilarities between us and any peer group of publicly-traded partnerships against which our TRU could be compared, and because our ability to support future cash distributions is essential to successfully attracting investors, the Committee determined that distributable cash flow, rather than TRU, is, at present, a more appropriate performance metric for our LTIP.
As a result of the Committee’s adoption of the 2014 LTIP, the earning of cash payments under the 2014 LTIP will be determined based on the level of our distribution coverage ratio over a three-year measurement period (“Distribution Coverage Ratio”). This ratio will be calculated by dividing our average distributable cash flow generated during an outstanding award’s three-year measurement period by a baseline cash flow set on the initial grant date of the award.
The average distributable cash flow is the average of the distributable cash flow for each of the three years in a particular award’s three-year measurement period. For purposes of this plan’s performance metric, distributable cash flow is equal to LTIP EBITDA for a particular fiscal year less capital expenditures, cash interest expense, and the provision for income taxes for the same fiscal year. For LTIP purposes, “LTIP EBITDA” is identical to cash bonus plan EBITDA. The average distributable cash flow will be adjusted by the sum of the annual differences between the per-Common Unit annualized distribution rate at the beginning of the three-year measurement period and the actual per-Common Unit distributions paid during each executive officer’s unvested grant of phantom unitsthe three years in an award’s three-year measurement period. Baseline cash flow is calculated by dividing a predetermined percentage (which is 30% for Mr. Alexander and for all other executive officers is 52%), established upon adoptionmultiplying the total number of LTIP-2, of the executive officer’s target cash bonus by the average of the closing prices of our Common Units for the twenty days precedingoutstanding at the beginning of the three-year measurement period by the then per Common Unit annualized distribution rate.
Cash Payments
For awards granted under the 2003 and 2013 LTIP plan documents (i.e., the fiscal year. At2013 award), at the end of the three-year measurement period, depending on the quartile ranking within which our TRU falls relative to the other members of the peer group, our executive officers, as well as the other participants, all of whom are key employees, will receive a cash payoutpayment equal to:
| | |
| | • — | | The quantity of the participant’s phantomLTIP units multiplied by the average of the closing prices of our Common Units for the twenty days preceding the conclusion of the three-year measurement period; |
|
| | • — | | The quantity of the participant’s phantomLTIP units multiplied by the sum of the distributions that would have inured to one of our outstanding Common Units during the three-year measurement period; and |
|
| | • — | | The sum of the products of the two preceding calculations multiplied by: zero if our performance falls within the lowest quartile of the peer group; 50% if our performance falls within the second lowest quartile; 100% if our performance falls within the second highest quartile; and 125% if our performance falls within the top quartile. |
The three-year measurement period of the awards made at the beginning of fiscal 2006 ended simultaneously with the conclusion of fiscal 2008. The TRU for the fiscal 2006 award fell within the highest quartile. The following is a summary of the cash payouts related to the fiscal 2006 award earned by our named executive officers at the conclusion of fiscal 2008.
| | | | | |
| Mark A. Alexander | | $ | 239,740 | (1) |
| Michael A. Stivala | | $ | 81,526 | (1) |
| Michael J. Dunn, Jr. | | $ | 346,263 | (1) |
| Steven C. Boyd | | $ | 91,107 | (1) |
| Michael M. Keating | | $ | 115,864 | (1) |
| | |
(1) | | The cash payouts related to our named executive officers’ fiscal 2006 awards earned at the conclusion of fiscal 2008 is an additional disclosure that bears no meaningful relationship to the SFAS 123R expense recognized during fiscal 2008 and reported in column (e) of the Summary Compensation Table below. |
19
The following is a summary ofFor awards granted under the quantity of phantom units that signify the unvested grants to our named executive officers during2014 plan document (the fiscal years 2007 and 2008 that will be used to calculate cash payments2014 award payable, if earned, at the end of each respective award’s three-year measurement period (i.e.fiscal 2016 and the fiscal 2015 award, payable, if earned, at the end of fiscal 2017), at the end of our fiscal year 2009 for the fiscal 2007 award and at the end of our fiscal year 2010 for the fiscal 2008 award).
| | | | | | | | | |
| | | Fiscal Year
| | | Fiscal Year
| |
| | | 2007 Award | | | 2008 Award | |
| |
| Mark A. Alexander | | | 4,007 | | | | 2,989 | |
| Michael A. Stivala | | | 1,603 | | | | 1,871 | |
| Michael J. Dunn, Jr. | | | 6,174 | | | | 4,894 | |
| Steven C. Boyd | | | 2,037 | | | | 1,693 | |
| Michael M. Keating | | | 2,107 | | | | 1,647 | |
The peer group companies selected by the Committee for the fiscal 2007 and fiscal 2008 awards consist entirely of publicly-traded partnerships, inclusive of all propane-related partnerships. The Committee decided upon this peer group because all publicly-traded partnerships have similar tax attributes and can, as a result, distribute more cash than similarly-sized corporations generating similar revenues. The following table lists, in alphabetical order, the names and ticker symbols of the peer group used to measure our performance during the fiscal 2007 and fiscal 2008 LTIP-2 awards’ three-year measurement periods:
| | |
2007 and 2008 LTIP-2 Awards Peer Group
|
Peer Group Member Name
| | Ticker Symbol
|
|
AmeriGas Partners, L.P. | | APU |
Copano Energy, LLC | | CPNO |
Crosstex Energy, L.P. | | XTEX |
Dorchester Minerals, L.P. | | DMLP |
Energy Transfer Partners, L.P. | | ETP |
Ferrellgas Partners, L.P. | | FGP |
Inergy, L.P. | | NRGY |
MarkWest Energy Partners, L.P. | | MWE |
Plains All American Pipeline, L.P. | | PAA |
Star Gas Partners, L.P. | | SGU |
Sunoco Logistics Partners, L.P. | | SXL |
Formerly, the LTIP-2 plan document contained a retirement provision that provided for the immediate termination of the three-year measurement period,
depending on the Distribution Coverage Ratio for
all outstanding LTIP-2 awards held by a retirement-eligible participant upon retirement. Under the former provisions, TRU was calculated as if thethat three-year measurement period,
for each outstanding award ended onour executive officers, as well as the
participant’s retirement date in order to determine whether a payment had been earned by the retiree. On January 24, 2008, the Committee amended the retirement provisionsother participants, all of
the plan document to provide that awhom are key employees, will receive cash payments equal to: | — | | The quantity of the participant’s LTIP units multiplied by the average of the closing prices of our Common Units for the twenty days preceding the conclusion of the three-year measurement period; |
| — | | The quantity of the participant’s LTIP units multiplied by the sum of the distributions that would have inured to one of our outstanding Common Units during the three-year measurement period; and |
| — | | The sum of the products of the two preceding calculations multiplied by the applicable percentage corresponding to the Distribution Coverage Ratio illustrated in the following table: |
| | |
| Distribution Coverage Ratio | | % of Award Earned |
| Less than 1.00 | | 00.0% |
| 1.00 (Threshold Performance) | | 50.0% |
| 1.01 | | 52.5% |
| 1.02 | | 55.0% |
| 1.03 | | 57.5% |
| 1.04 | | 60.0% |
| 1.05 | | 62.5% |
| 1.06 | | 65.0% |
| 1.07 | | 67.5% |
| 1.08 | | 70.0% |
| 1.09 | | 72.5% |
| 1.10 | | 75.0% |
| 1.11 | | 77.5% |
| 1.12 | | 80.0% |
| 1.13 | | 82.5% |
| 1.14 | | 85.0% |
| 1.15 | | 87.5% |
| 1.16 | | 90.0% |
| 1.17 | | 92.5% |
| 1.18 | | 95.0% |
| 1.19 | | 97.5% |
| 1.20 (Target Performance) | | 100.0% |
| 1.21 | | 101.7% |
| 1.22 | | 103.3% |
| 1.23 | | 105.0% |
| 1.24 | | 106.7% |
| 1.25 | | 108.4% |
| 1.26 | | 110.0% |
| 1.27 | | 111.7% |
| 1.28 | | 113.4% |
| 1.29 | | 115.0% |
| 1.30 | | 116.7% |
| 1.31 | | 118.4% |
| 1.32 | | 120.0% |
| 1.33 | | 121.7% |
| 1.34 | | 123.4% |
| 1.35 | | 125.1% |
| 1.36 | | 126.7% |
| 1.37 | | 128.4% |
| 1.38 | | 130.1% |
| 1.39 | | 131.7% |
| 1.40 | | 133.4% |
| 1.41 | | 135.1% |
| 1.42 | | 136.7% |
| 1.43 | | 138.4% |
| 1.44 | | 140.1% |
| 1.45 | | 141.8% |
| 1.46 | | 143.4% |
| 1.47 | | 145.1% |
| 1.48 | | 146.8% |
| 1.49 | | 148.4% |
| 1.50 and Higher (Maximum Performance) | | 150.0% |
Retirement Provision
A retirement-eligible participant’s outstanding awards under the LTIP will vest as of the retirement-eligible date, but such awardswill remain subject to the same three-year measurement period for purposes of determining the eventual cash payout,payment, if any, at the conclusion of the measurement period.
Because the cash payments under the LTIP-2 areThe grant date values based on the valueprobable outcomes of our Common Units, compensation expense generated by this plan is recognizedthe awards under the LTIP granted during fiscal 2014, fiscal 2013 and fiscal 2012 (although the final measurement of the fiscal 2012 award resulted in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS 123R”). As a result, all such charges to this year’s earnings relativeno actual payments to our named executive officersofficers) are reported in the column titled “Unit Awards ($)”Awards” in the Summary Compensation Table below.
2000 Restricted Unit Plan
We adopted the 2000 Restricted Unit Plan (“RUP”) effective November 1, 2000. Upon adoption, this plan authorized the issuance of 487,805 Common Units to our executive officers, managers and other employees and to the members of our Board of Supervisors. On October 17, 2006, following approval by our Unitholders, we adopted
20
amendments to
the RUPthis plan which, among other things, increased the number of Common Units authorized for issuance under
the RUPthis plan by 230,000 for a total of 717,805.
As this plan terminated by its terms on October 31, 2010, no future awards can be made under this plan; however such termination will not affect the continued validity of any awards granted under the plan prior to its termination.At our July 22, 2009 Tri-Annual Meeting, our Unitholders approved our adoption of the 2009 Restricted Unit Plan effective August 1, 2009. Upon adoption, this plan authorized the issuance of 1,200,000 Common Units to our executive officers, managers and other employees and to the members of our Board of Supervisors. At the Meeting, our Unitholders will be asked to approve the authorization of the issuance of an additional 1,200,000 Common Units under the 2009 Restricted Unit Plan. See the Restricted Unit Plan Proposal (Proposal 3) below. The provisions of both restricted unit plans (which we hereafter collectively and individually refer to as the RUP) are substantially identical. At the conclusion of fiscal 2008,2014, there remained 89,874415,706 restricted units available under the RUP for future grants.
awards. (As a result of both new awards made, and previously granted awards forfeited, in fiscal 2015, there remained 265,351 restricted units available under the RUP for future awards as of March 16, 2015.)When the Committee authorizes a grantan award of restricted units, the unvested units underlying a grantan award do not provide the grantee with voting rights and do not receive distributions or accrue rights to distributions during the vesting period. Restricted unit grantsawards granted prior to August 6, 2013 normally vest as follows: 25% on each of the third and fourth anniversaries of the grant date and the remaining 50% on the fifth anniversary of the grant date. At its August 6, 2013 meeting, in accordance with recommendations from Towers Watson, the Committee amended Suburban’s 2009 Restricted Unit Plan to revise the normative vesting schedule of awards granted thereafter to one third on each of the first three anniversaries of the award grant date. The Committee retained the ability to deviate, at its discretion, from the normal vesting schedule with respect to particular restricted unit awards. The Committee amended the plan to make its vesting schedule comparable to those of similar plans offered by other companies. Unvested grantsawards are subject to forfeiture in certain circumstances as defined in the applicable RUP document. Upon vesting, restricted units are automatically converted into our Common Units, with full voting rights and rights to receive distributions.
The RUP document previously containedcontains a retirement provision that providedprovides for the immediate vesting (six months and one day after the retirement date of allqualifying participants) of unvested RUP grantsawards held by a retiring participant who metmeets all three of the following conditions on his or her retirement date:
1. The unvested RUP grant has been held by the grantee for at least six months;
2. The RUP grantee is age 55 or older; and
3. The RUP grantee has worked for us or one of our predecessors for at least 10 years.
On October 31, 2007, in order to comply with the regulations promulgated under Internal Revenue Code (“IRC”) Section 409A, the Board of Supervisors amended the retirement provision to require a six-month delay between a retirement eligible RUP participant’s retirement date and the date on which unvested RUP grants vest.
| — | | The unvested award has been held by the grantee for at least six months; |
| — | | The grantee is age 55 or older; and |
| — | | The grantee has worked for us or one of our predecessors for at least 10 years. |
All RUP grantsawards are made at the discretion ofapproved by the Committee. Because individual circumstances differ, the Committee has not adopted a formulaic approach to making RUP grants. Grants are awarded at the Committee’s discretion when the need arises.awards. Although the reasons for awarding a grantgranting an award can vary, the objective of awarding a grantgranting an award to a recipient is twofold: to retain the services of the recipient over the five-year vesting period while, at the same time providing the type of motivation that further aligns the long-term interests of the recipient with the long-term interests of our Unitholders. The reasons for which the Committee awardsgrants RUP grantsawards include, but are not limited to, the following:
| | |
| | • — | | To attract skilled and capable candidates to fill vacant positions; |
|
| | • — | | To retain the services of an employee; |
|
| | • — | | To provide an adequate compensation package to accompany an internal promotion; and |
|
| | • — | | To reward outstanding performance. |
In determining the quantity of restricted units to awardgrant to each executive officerofficers and other key employees, the Committee considers, without limitation:
| | |
| | • — | | The executive officer’s or key employee’s scope of responsibility, performance and contribution to meeting our objectives; |
|
| | • — | | The total cash compensation opportunity provided to the executive officer or key employee for whom the grantaward is being considered; |
|
| | • — | | The value of similar equity awards to executive officers of similarly sized enterprises; and |
|
| | • — | | The current value of a similar quantity of outstanding Common Units. |
In addition, in establishing the level of restricted units to grant to our executive officers, the Committee considers the existing level of equity ownershipoutstanding unvested RUP awards held by our executive officers and, prior to October 17, 2006, the level of equity representation through management’s ownership of the then General Partner.
When the Committee decides to grant an equity award, it approves a dollar amount of equity compensation that it wants to provide to a particular employee. This dollar amount is then converted into a quantity of restricted units by dividing that dollar amount by the average of the closing prices of our Common Units for the twenty trading days preceding the grant date. officers.The Committee generally makes theseapproves awards under the RUP at theirits first meeting each fiscal year following the
21
availability of the financial results for the prior fiscal year; however, occasionally the Committee grants awards at other times of the year, particularly when the need arises to grant awards because of promotions and new hires.
Until October 17, 2007,At its November 13, 2013 meeting, in order to further align the grant date for RUP grants usually coincidedinterests of management with the Committee’s approval date. However, on October 31, 2007,interests of our Unitholders, the Committee adopted a policy with respect toapproved the effective date of subsequentfollowing grants of restricted units under the RUP which states that:
Unless the Committee expressly determines otherwise for a particular award at the time of its approval of such award, the effective date of grant of all awards of restricted units under the RUP in a given calendar year will be the first business day in the month of December of that calendar year. If, at the discretion of the Committee, an award is expressed as a dollar amount, then such award will be converted into the number of restricted units, as of the effective date of grant, obtained by dividing the dollar amount of the award by the average of the closing prices, on the New York Stock Exchange, of one Common Unit of Suburban for the 20 trading days immediately prior to that effective date of grant.
During fiscal 2008, RUP grants were awarded to the following named executive officers:
| | | | | | | | |
| | | Grant Name | | Grant Date | | Quantity |
| | | Quantity of Restricted Units | |
| | | |
| | Michael A. Stivala | | November 15, 2013 | December 3, 2007 | | | | 2,272 | 5,302 |
| | Michael J. Dunn, Jr. A. Kuglin | | November 15, 2013 | December 3, 2007 | | | | 29,533 | 4,242 |
| | Mark Wienberg | | November 15, 2013 | | 5,302 |
| | Steven C. Boyd | | November 15, 2013 | December 3, 2007 | | | | 3,408 | 5,302 |
Michael M. Keating | | Douglas T. Brinkworth | December 3, 2007 | November 15, 2013 | | | 3,408 | 5,302 |
AllIn determining these fiscal 20082014 awards were made in recognition of the exemplary performance of each of the recipients and as retention tools. The quantity of units selected for Mr. Dunn’s award was considerably higher than the quantities granted to the other recipients in recognition of his responsibilities as PresidentStivala, Mr. Kuglin, Mr. Wienberg, Mr. Boyd and in consideration of his not receiving any prior grants under the RUP, unlike each of the other named executive officers. Additionally,Mr. Brinkworth, the Committee relied upon information provided by the Mercer database to conclude that this grant and all of the other grantsthese awards were necessary to remediate shortfalls perceived by the Committee in the cash compensation opportunities of eachthese named executive officers, as well as in recognition of their individual achievements throughout fiscal 2013. The Committee’s choice to remediate perceived shortfalls with RUP awards reflects our Board’s disciplined approach to cash management and the Committee’s desire to reward past exemplary performance to those whose past performance has warranted such awards. No award was granted to Mr. Dunn, our then President and Chief Executive Officer, at the Committee’s November 13, 2013 meeting.
At its January 22, 2014 meeting, in accordance with the recommendations of Towers Watson, in recognition of Mr. Dunn’s years of service to Suburban and in recognition of the promotions of the senior level executive officers, the Committee approved the following grants to the named executive officers. Additionally, the Committee believed that eachofficers:
| | | | | | | | |
| | Grant Name | | Grant Date | | Quantity | |
| | | |
| | Michael J. Dunn, Jr. | | March 1, 2014 | | | 17,009 | |
| | Michael A. Stivala | | April 1, 2014 | | | 23,885 | |
| | Michael A. Kuglin | | April 1, 2014 | | | 11,943 | |
| | Mark Wienberg | | April 1, 2014 | | | 11,943 | |
| | Steven C. Boyd | | April 1, 2014 | | | 11,943 | |
| | Douglas T. Brinkworth | | April 1, 2014 | | | 11,943 | |
The aggregate grant date fair values of these grants will function as a necessary retention tool. To that end, although Mr. Dunn currently satisfies the criteria found in the retirement provisions of the RUP document, the Committee exercised its discretionary authority to make his award subject to the special stipulation that he hold his unvested award for three years before the retirement provisions of the RUP document become applicable.
Compensation expense for unvested RUP grants is recognized ratably over the vesting periodsawards made during fiscal 2014, fiscal 2013 and is net of estimated forfeituresfiscal 2012, computed in accordance with SFAS 123R. The RUP-related SFAS 123R expense recognizedaccounting principles generally accepted in Suburban’s fiscal 2008 statement of operations, excluding forfeiture estimates, on behalf of each of the named executive officers isUnited States are reported in the column titled “Unit Awards ($)”Awards” in the Summary Compensation Table below.
RecoupmentAt its November 11, 2014 meeting, the Committee did not grant any additional RUP awards to our named executive officers because each of these individuals was granted an award on April 1, 2014.
Equity Holding Policy
Effective April 22, 2010, the Committee adopted an Equity Holding Policy which establishes guidelines for the level of Suburban equity holdings that members of the Board and our executive officers are expected to maintain. The Equity Holding Policy can be accessed through a link on our website atwww.suburbanpropane.com under the “Investors” tab.
Our equity holding requirements are as follows:
| | |
| Position | | Amount |
| Member of the Board of Supervisors | | 2 x Annual Fee |
| Chief Executive Officer | | 5 x Base Salary |
| President | | 5 x Base Salary |
| Chief Operating Officer | | 3 x Base Salary |
| Chief Financial Officer | | 3 x Base Salary |
| Executive Vice President | | 3 x Base Salary |
| Senior Vice President | | 2.5 x Base Salary |
| Vice President | | 1.5 x Base Salary |
| Assistant Vice President | | 1 x Base Salary |
| Managing Director | | 1 x Base Salary |
As of the January 2, 2014 and January 2, 2015 measurement dates, all of our executive officers, including our named executive officers, as well as the members of our Board of Supervisors, were in compliance with our Equity Holding Policy.
Incentive Compensation
On April 25, 2007, upon Recoupment PolicyUpon recommendation by the Committee, the Board of Supervisors approvedhas adopted an Incentive Compensation Recoupment Policy which permits the Committee to seek the reimbursement from certain executives of Suburban and Suburban Propane, L.P. (our “Operating Partnership”) of incentive compensation (i.e., payments/awards pursuant to the annual cash bonus plan, the LTIP and RUP) paid to those executives in connection with any fiscal year for which there is a significant restatement of the published financial statements of Suburban triggered by a material accounting error, which results in less favorable results than those originally reported by Suburban.reported. Such reimbursement can be sought
from executives even if they had no responsibility for the restatement. In addition to the foregoing, if the Committee determines that any fraud or intentional misconduct by an executive was a contributing factor to SuburbanSuburban’s having to make a significant restatement, then the Committee is authorized to take appropriate action against such executive, including disciplinary action, up to, and including, termination, and requiring reimbursement of all, or any part, of the compensation paid to that executive in excess of that executive’s base salary, including cancellation of any unvested restricted units. The Incentive Compensation Recoupment Policy is available on our website atwww.suburbanpropane.com.
22
On July 31, 2007, the Board amended the annual cash bonus plan, LTIP-2 and the RUP to expressly make future awards under such plans subject to the Incentive Compensation Recoupment Policy.
Pension Plan
We sponsor a noncontributory defined benefit pension plan that was originally designed to cover all of our eligible employees who met certain criteria relative to age and length of service. Effective January 1, 1998, we amended the plan in order to provide for a cash balance format rather than the final average pay format that was in effect prior to January 1, 1998. The cash balance format is designed to evenly spread the growth of a participant’s earned retirement benefit throughout his or her career rather than the final average pay format, under which a greater portion of a participant’s benefits were earned toward the latter stages of his or her career. Effective January 1, 2000, we amended the plan to limit participation in this plan to existing participants and no longer admit new participants to the plan. On January 1, 2003, we amended the plan to cease future service and pay-based credits on behalf of the participants and, from that point on, participants’ benefits have increased only due to interest credits.
Each ofOf our named executive officers, with the exception ofonly Mr. Stivala, participatesDunn, Mr. Boyd, and Mr. Brinkworth participate in the plan. The changes in the actuarial value relative to each named executive officer’stheir participation in the plan isduring fiscal 2014, fiscal 2013 and fiscal 2012 are reported in the column titled “Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)”Earnings” in the Summary Compensation Table below.
All employees, including the named executive officers, who satisfy certain service requirements, are entitled to participate in our IRC Section 401(k) Plan, (thewhich we refer to as the “401(k) Plan”),Plan,” in which participants may defer a portion of their eligible cash compensation up to the limits established by law. We offer the 401(k) Plan to attract and retain talented employees by providing them with a tax-advantaged opportunity to save for retirement.
For fiscal 2008,2014, all of our named executive officers participated in the 401(k) Plan. The benefits provided to our named executive officers under the 401(k) Plan are provided on the same basis as to our other exempt employees. Amounts deferred by our named executive officers under the 401(k) Plan during fiscal 2014, fiscal 2013 and fiscal 2012 are included in the column titled “Salary ($)”“Salary” in the Summary Compensation Table below.
In order to be competitive with other employers, if certain performance criteria are met, we will match our employee-participants’ contributions up to the lesser of 6% of their base salary or $260,000, at a rate determined based on a performance-based scale. The following chart shows the performance target criteria that must be met for each level of matching contribution:
| | | | | | | | |
| | | | | |
If We Meet This
Percentage of Budgeted EBITDA(1)… | | | | The Participating Employee
| |
Percentage of
| | willWill Receive this Matching
| |
Budgeted EBITDA(1)...
| | Contribution for the Year...Year… | | |
| | | | | | | |
| 115% or higher | | | 100 | %100% | |
| 100% to 114% | | | 50 | %50% | |
| 90% to 99% | | | 25 | %25% | |
| | Less than 90% | | | 0 | % |
| (1) | | For additional information regardingpurposes of the non-GAAP401(k) Plan, the definition of the term “Budgeted EBITDA,” refer“budgeted EBITDA” is identical to the explanation providedthat of “budgeted cash bonus plan EBITDA” discussed under the subheadingheading titled “Annual Cash Bonus Plan” above. |
For fiscal 2008, our budgeted 401(k) Plan EBITDA was $187.0 million. Similar to our annualActual cash bonus plan our fiscal 2008 results wereEBITDA, when applied to the 401(k) Plan, was such that actualwe provided participants in the 401(k) Plan EBITDA equaled 95% of budgeted 401(k) Plan EBITDA. Aswith a result, participants earned a matchmatching contribution equal to 25% of their calendar year 20082014 contributions that did not exceed 6% of their total base pay, up to a maximum base payannual compensation limit of $230,000.$260,000. The matching contributions that were earned bymade on behalf of our named executive officers for 2014 are reported in the column titled “All Other Compensation ($)”Compensation” in the Summary Compensation Table below.
23
Non-Qualified Deferred Compensation
Until January 2008, we maintained a Non-Qualified Deferred Compensation Plan (the “Compensation Deferral Plan”) to which vested restricted units from the 1996 Restricted Unit Plan (which was subsequently replaced by the 2000 Restricted Unit Plan described above) were deferred by the recipients, some of whom are our named executive officers, on May 26, 1999 in connection with our recapitalization. The Compensation Deferral Plan operated through a rabbi trust, which held the deferred restricted units. On November 2, 2005, for the purpose of IRC Section 409A compliance, our Board of Supervisors approved an amendment to the Compensation Deferral Plan that prohibited any additional deferral elections.
At the end of fiscal 2007, Mr. Alexander and Mr. Dunn were the only remaining beneficiaries of the Compensation Deferral Plan. In accordance with their deferral elections, the entire corpus of the rabbi trust was distributed to them during January 2008 and the fair market value of their respective portions of the corpus is included in their taxable wage earnings for calendar year 2008.
Because the Compensation Deferral Plan contained only Common Units, and because the cash distributions that inured to those units were immediately distributed to the beneficiaries, the plan did not provide Mr. Alexander and Mr. Dunn with above-market interest; nor did they receive distributions on the Common Units at a rate higher than the distributions paid on behalf of our Common Units held by the investing public. As a result, nothing relative to the Compensation Deferral Plan is reported in the Summary Compensation Table below.
Supplemental Executive Retirement Plan
In 1998, we adopted a non-qualified, unfunded supplemental retirement plan known as the Suburban Propane Company Supplemental Executive Retirement Plan (the “SERP”). The purpose of the SERP is to provide Mr. Alexander and Mr. Dunn with a level of retirement income from us, without regard to statutory maximums, including the IRC’s limitation for defined benefit plans. In light of the conversion of the Pension Plan to a cash balance formula as described under the subheading “Pension Plan” above, the SERP was amended and restated effective January 1, 1998. The annual retirement benefit under the SERP represents the amount of annual benefits that the participants in the SERP would otherwise be eligible to receive, calculated using the same pay-based credits referenced in the “Pension Plan” section above, applied to the amount of annual compensation that exceeds the IRC’s statutory maximums for defined benefit plans, which was $200,000 in 2002. Effective January 1, 2003, the SERP was discontinued with a frozen benefit determined for Mr. Alexander and Mr. Dunn. Provided that the SERP requirements are met, upon retirement Mr. Alexander will receive a monthly benefit of $6,737 and Mr. Dunn will receive a monthly benefit of $373. Because this plan does not provide Mr. Alexander and Mr. Dunn with above market interest credits, nothing relative to the SERP is reported in the Summary Compensation Table below.
As previously discussed under “Management Succession Plan,” Mr. Alexander will step down as Chief Executive Officer of Suburban on September 26, 2009. As part of Mr. Alexander’s consulting and separation arrangement (described below), the Committee will, pursuant to the discretion granted to the Committee under the SERP, adjust Mr. Alexander’s benefit age to age 55, allowing his benefits under the SERP (valued at approximately $450,000 and to be paid in a lump sum) to vest.
Other Benefits
As part of his total compensation package, each named executive officer is eligible to participate in all of our other employee benefit plans, such as the medical, dental, group life insurance and disability plans. In each case, with the exception of Mr. Alexander for whom we purchase supplemental life insurance and supplemental long-term disability policies at a cost of $6,693 per year, these benefits are providedplans, on the same basis as are provided to other exempt employees. These benefit plans are offered to attract and retain talented employees and to provideby providing them with competitive benefits.
Other than as described below with respect to Mr. Alexander andDunn, in accordance with the terms of his letter agreement (described below in the section titled “Letter Agreement of Mr. Dunn,Dunn”), there are no post-termination or other special rights provided to any named executive officer to participate in these benefit programs other than the right to participate in such plans for a fixed period of time following termination of employment, on the same basis as is provided to other exempt employees, as required by law.
24
The costs of all such benefits incurred on behalf of our named executive officers in fiscal 2014, fiscal 2013 and fiscal 2012 are reported in the column titled “All Other Compensation ($)”Compensation” in the Summary Compensation Table below.
Perquisites represent a minor component of our executive officers’ compensation. Each of the named executive officers is eligible for tax preparation services, a company-provided vehicle, and an annual physical. The following table summarizes both the value and the utilization of these perquisites by the named executive officers in fiscal 2008.
| | | | | | | | | | | | | |
| | | | | | Employer-
| | | | |
| | | Tax Preparation
| | | Provided
| | | | |
Name | | Services | | | Vehicle | | | Physical | |
| |
| Mark A. Alexander | | $ | 5,000 | | | $ | 11,395 | | | $ | 1,500 | |
| Michael A. Stivala | | $ | -0- | | | $ | 12,647 | | | $ | 1,500 | |
| Michael J. Dunn, Jr. | | $ | 2,500 | | | $ | 12,888 | | | $ | 1,500 | |
| Steven C. Boyd | | $ | 900 | | | $ | 6,549 | | | $ | -0- | |
| Michael M. Keating | | $ | 2,500 | | | $ | 11,522 | | | $ | 1,200 | |
2014. | | | | | | |
| Name | | Tax Preparation
Services | | Employer- Provided Vehicle | | Physical |
Michael J. Dunn, Jr. | | $9,150 | | $16,549 | | $1,600 |
Michael A. Stivala | | $ -0- | | $18,153 | | $ -0- |
Michael A. Kuglin | | $ -0- | | $12,725 | | $ -0- |
Mark Wienberg | | $ -0- | | $13,142 | | $1,750 |
Steven C. Boyd | | $4,450 | | $ 6,837 | | $ -0- |
Douglas T. Brinkworth | | $4,400 | | $11,410 | | $1,500 |
Perquisite-related costs for fiscal 2014, fiscal 2013 and fiscal 2012 are reported in the column titled “All Other Compensation ($)”Compensation” in the Summary Compensation Table below.
Impact of Accounting and Tax Treatments of Executive Compensation
As we are a partnership and not a corporation for U.S. federal income tax purposes, we are not subject to the limitations of IRC Section 162(m) of the Code (as defined in the section below entitled “U.S. Federal Income Tax Consequences”) with respect to tax deductible executive compensation. Accordingly, none of
the compensation paid to our named executive officers is subject to a limitation as to tax deductibility. However, if such tax laws related to executive compensation change in the future, the Committee will consider the implications onimplication of such changes to us.
In accordanceAlthough it is our practice to comply with their respective employment agreements, Mr. Alexanderthe statutory and Mr. Dunn are entitled to receive taxgross-up payments for any parachute excise tax incurred pursuant to IRC Section 4999; they are also entitled to receive taxgross-up payments for any payment that violates theregulatory provisions of IRC Section 409A or its associated regulations.
On November 2, 2005,of the Board of Supervisors approved an amendment toCode, the Suburban Propane, L.P. Severance Protection Plan for Key Employees, (thewhich we refer to as the “Severance Protection Plan”) to providePlan,” provides that if any payment under the Severance Protection Plan subjects a participant to the 20% federal exciseadditional tax under IRC Section 409A of the Code, the payment will be grossed up to permit such participant to retain a net amount on an after-tax basis equal to what he or she would have received had the excise tax not been payable.
EmploymentLetter Agreement of Mr. Dunn
Simultaneous with the commencement of fiscal 2010, Mr. Dunn’s then existing employment agreement was terminated by mutual agreement and Separation Agreements
replaced with a letter agreement governing retirement and the implementation of a mutually agreed upon succession plan. The letter agreement between Mr.
Alexander,Dunn and us is summarized as follows: | — | | Mr. Dunn will participate in our Severance Protection Plan (see below) at the 78-week participation level. |
| — | | If on or after the last day of fiscal 2012, Mr. Dunn retires or leaves as a result of an agreed-upon succession plan, he will receive the following if he timely provides us with a release of all claims he might have against us at the time of his departure: |
| ¡ | | A payment equal to two years of base salary paid over a two year period. |
| ¡ | | Continuation of medical and dental benefits at no premium cost to him until attainment of age 65 (Mr. Dunn had attained age 65 prior to the conclusion of fiscal 2014). |
We agreed that if there was a termination of Mr. Dunn’s employment in connection with a succession plan, it would be deemed a retirement for the purposes of his benefits under the employee benefit plans in which he participates. Mr. Dunn agreed to provide us with transition consultation services for a period not to exceed two years following his departure. We also agreed that Mr. Dunn would not be deemed to have retired or terminated his employment if he simply relinquished the title and responsibilities of President but remained our Chief Executive Officer, andOfficer.
On November 14, 2013, we announced that, pursuant to a succession plan developed by Mr. Dunn and our President, areBoard, Mr. Dunn would relinquish the only named executive officers, named or otherwise, with whom we have employment agreements. We entered into an employment agreement with Mr. Alexander when it was announced,role of President on March 5, 1996, that he would become31, 2014, and retire as our Chief Executive Officer. This agreement was subsequently amended on October 23, 1997, April 14, 1999 and November 2, 2005. We entered into an employment agreement that had an effective date of February 1, 2007 with Mr. Dunn on February 5, 2007. On November 13, 2008, the Committee approved an amendment to each of Mr. Alexander’s and Mr. Dunn’s employment agreements to bring these agreements into conformance with the final regulations issued by the IRS under IRC Section 409A, which amendments were then executed by the Company and these executives. On January 20, 2009, the Committee approved an amendment to each of Mr. Alexander’s and Mr. Dunn’s employment agreements to make the “change of control” provisions of those agreements consistent with the change of control provisions set forth in Suburban’s benefit plans. The November 2008 and January 2009 amendments did not effect any substantive changes to the benefits received by these executives under the agreements. As discussed below, on April 22, 2009, we entered into an agreement with Mr. Alexander with
25
respect to his consulting and separation arrangement when he steps down as Chief Executive Officer on September 26, 2009.
Mr. Alexander’s Employment Agreement and Separation and Consulting Agreement
Mr. Alexander’s Employment Agreement had an initial term27, 2014. Accordingly, the retirement provisions of
three years, and automatically renews for successive one-year periods, unless earlier terminated by us or by Mr. Alexander or otherwise terminated in accordance with the terms of the employment agreement. The employmentour letter agreement
provides for an annual base salary of $450,000 and provides Mr. Alexander with the opportunity to earn a cash bonus of up to 100% of base salary based upon the achievement of the same EBITDA-related performance criteria as contained in our annual cash bonus plan described in the section titled “Annual Cash Bonus Plan” above. Under our Partnership Agreement, the Committee has the authority to grant Mr. Alexander a bonus in excess of 100% if, in accordance with the terms of the annual cash bonus plan, our other executive officers earn bonuses exceeding their target bonuses for the fiscal year. The Committee exercised this authority in connection with Mr.
Alexander’s cash bonus for fiscal 2006 and fiscal 2007. Dunn became effective on September 28, 2014, at which time Mr. Dunn was age 65.The discretionary componenttotal payments that will be made under this agreement as a result of Mr. Alexander’s fiscal 2007 cash bonus is disclosedDunn’s retirement are reported in the column titled “Bonus ($)” and the non-discretionary component of Mr. Alexander’s bonus is disclosed in the column titled “Non-Equity Incentive Plan Compensation ($)”“All Other Compensation” in the Summary Compensation Table below.
The final provisions of both employment agreements were the results of negotiations between the Committee and each individual and are not reducible to a specific process. For example, Mr. Alexander is the only Chief Executive Officer that has been employed by Suburban. As a result, some aspects of his employment arrangements predate the existence of Suburban and were agreed to by the former general partner. Over the years, when considering whether to renew Mr. Alexander’s contract, the Committee has considered, among other factors, Mr. Alexander’s experience, performance and the fact that our headquarters are located in the New York Metropolitan area. Similar considerations applied to the circumstances under which Mr. Dunn’s employment agreement was negotiated. Suburban’s termination and change of control arrangements are an important part of the competitive total compensation provided to its executives. These termination and change of control arrangements also assist in retaining those executives with leadership abilities and skills necessary during a transition period. These arrangements did not affect any decision made in fiscal 2008 with respect to any other compensation elements for our named executive officers.
Mr. Alexander’s employment agreement also provides for the opportunity to participate in benefit plans made available to our other executive officers and our other key employees. We also provide Mr. Alexander with a term life insurance policy with a face amount equal to three times his base salary.
If a change of control (as defined in the “Change of Control” section below) of Suburban occurs, and within six months prior thereto or at any time subsequent to such change of control, we terminate Mr. Alexander’s employment without cause (as defined in the “Severance Benefits” section below) or if Mr. Alexander resigns with good reason (as defined in the “Severance Benefits” section below) or terminates his employment commencing on the six-month anniversary and ending on the12-month anniversary of such change of control, then Mr. Alexander shall be entitled to:
| | |
| • | A lump sum severance payment equal to three times his annual base salary in effect as of the date of termination plus three times his annual cash bonus at 100%; and |
|
| • | Medical benefits for three years from the date of such termination. |
In situations unconnected to a change of control event, if Suburban terminates Mr. Alexander’s employment without cause or if Mr. Alexander resigns with good reason, then Mr. Alexander shall be entitled to:
| | |
| • | A severance payment equal to (A) the portion of his base salary earned but not paid as of the date of termination, (B) his pro-rata annual cash bonus under the employment agreement based upon the number of days worked during the fiscal year of termination, and (C) three times his annual base salary in effect as of the date of termination; and |
|
| • | Medical benefits for three years from the date of such termination reduced to the extent comparable benefits are provided to Mr. Alexander by another party. |
26
The employment agreement requires that if any payment received by Mr. Alexander is subject to the 20% excise tax under IRC Section 4999, the payment shall be increased to permit Mr. Alexander to retain a net amount on an after-tax basis equal to what he would have received had the excise tax not been payable.
If Mr. Alexander’s employment is terminated due to death, disability, without good reason, or pursuant to delivery of a non-renewal notice to Suburban in accordance with the terms and conditions of his employment agreement, he or his estate, as the case may be, shall be entitled to earned but unpaid base salary plus his pro-rata cash bonus. If his employment is terminated by Suburban for cause, he shall be entitled to his earned but unpaid base salary only.
As discussed above under “Management Succession Plan,” the Compensation Committee and Mr. Alexander have developed a management succession plan to ensure that the executive leadership of Suburban evolves in a clearly defined and disciplined manner. In accordance with this plan, Mr. Alexander will step down from his role as Chief Executive Officer on September 26, 2009, at which time he will be succeeded by Mr. Dunn. In determining the succession plan and the consulting and separation arrangements with Mr. Alexander described below, the Compensation Committee considered that Mr. Alexander had rendered outstanding service to Suburban as its sole Chief Executive Officer since Suburban went public in 1996 and that Mr. Alexander and Mr. Dunn have built a very strong organization and have shaped Suburban’s current operating and financial structure to be one of the strongest in the propane industry, as well as the master limited partnership environment in general. The Compensation Committee also considered that Mr. Alexander and Mr. Dunn have worked closely together, and will continue to do so for the remainder of the current fiscal year to ensure a smooth transition of the Chief Executive Officer responsibilities and moreover, that, as a consultant to the Board, Mr. Alexander’s broad managerial experience and professional insight will continue to be available to Suburban for a period of three years.
Mr. Alexander’s employment agreement will continue to govern his employment as Suburban’s Chief Executive Officer until Mr. Alexander steps down from such role on September 26, 2009. At that time, the employment agreement will be deemed terminated and an agreement, dated April 22, 2009, between Suburban and Mr. Alexander (the “Consulting and Separation Agreement”) will become effective. Pursuant to the terms of the Consulting and Separation Agreement, for the three-year period commencing on September 27, 2009, Mr. Alexander will (i) provide certain consulting services to Suburban, including transitional assistance and strategic advice with respect to operational matters and acquisitions, dispositions and other transactional matters as the Board or the Chief Executive Officer of Suburban shall reasonably request, and (ii) be subject to non-competition and non-solicitation obligations. In consideration for Mr. Alexander’s agreements, covenants, and releases under the Consulting and Separation Agreement, and in addition to the consideration described above under “Supplemental Executive Retirement Plan,” Mr. Alexander will (a) receive an aggregate of $1,000,000, to be paid predominately in equal bi-weekly installments during the three-year period commencing on September 27, 2009, (b) receive a final “matching payment” of $14,700 under the 401(k) Plan in respect of the current fiscal year, (c) receive, for a period of three years following September 26, 2009, medical and dental benefits coverage (unless and until Mr. Alexander obtains such coverage from another employer), supplemental life insurance coverage, income tax preparation, an annual health examination and use of a company-leased vehicle, which had an aggregate value of approximately $100,000 for fiscal 2008, and (d) be eligible to receive, without proration, (1) a maximum of $495,000 based on Mr. Alexander’s previously established grant under Suburban’s annual cash bonus plan for the 2009 fiscal year and (2) for the 2007, 2008 and 2009 measurement periods under the LTIP-2, payments based on Mr. Alexander’s previously established target grants of 4,007 phantom units for 2007, 2,989 phantom units for 2008 and 3,752 phantom units for 2009, in each case such payments to be made if and to the extent earned by participants in such plans and in accordance with the terms and conditions of such plans. In the event of a change of control (within the meaning of Treasury RegulationsSection 1.409A-3(i)(5)) during the3-year period, Mr. Alexander’s obligation to provide consulting services pursuant to the Consulting and Separation Agreement will end and he will be entitled to the immediate payment of any unpaid portion of the $1,000,000 and any payments that are due under LTIP-2.
Mr. Dunn’s Employment Agreement
Mr. Dunn’s employment agreement has an initial term of two years commencing on February 1, 2007, the term of which shall automatically renew for successive one-year periods, unless earlier terminated by us or by Mr. Dunn or otherwise terminated in accordance with the terms of the employment agreement. The provisions of Mr. Dunn’s employment agreement provided for an initial annual base salary of $400,000 per year (which may be adjusted
27
upwards annually at the Committee’s discretion) and, in accordance with the provisions of our annual cash bonus plan, the opportunity to earn a cash bonus in each fiscal year up to 110% of his annual base salary for that same fiscal year (the “Maximum Annual Cash Bonus”). Additionally, Mr. Dunn’s employment agreement permits him to participate in the same benefit plans made available to our other executive officers and other key employees.
If a change of control (as defined in the “Change of Control” section below) of Suburban occurs and within six months prior thereto or within two years thereafter Suburban terminates Mr. Dunn’s employment without cause (as defined in the “Severance Benefits” section below) or if Mr. Dunn resigns with good reason (as defined in the “Severance Benefits” section below), then Mr. Dunn shall be entitled to a severance payment equal to the sum of:
| | |
| • | The portion of his base salary earned but not paid as of the date of termination; |
|
| • | His pro-rata cash bonus (the bonus Mr. Dunn would have been entitled to under the employment agreement for the full fiscal year in which the termination occurred multiplied by the number of days from the beginning of that fiscal year until the termination date and divided by 365); |
|
| • | Two times the sum of (1) his annual base salary in effect as of the date of termination, plus (2) the Maximum Annual Cash Bonus; and |
|
| • | Medical benefits for two years from the date of such termination. |
In situations unconnected to a change of control event, if Suburban terminates Mr. Dunn’s employment without cause, or if Mr. Dunn resigns with good reason, then Mr. Dunn shall be entitled to:
| | |
| • | A severance payment equal to (A) the portion of his base salary earned but not paid as of the date of termination, (B) the annual cash bonus Mr. Dunn would have been entitled to under the employment agreement for the full fiscal year in which the termination occurred had Mr. Dunn remained employed by Suburban for that full fiscal year, and (C) two times his annual base salary in effect as of the date of termination; and |
|
| • | Medical benefits for two years from the date of such termination. |
The employment agreement requires that if any payment received by Mr. Dunn is subject to the 20% excise tax under IRC Section 4999, the payment shall be increased to permit Mr. Dunn to retain a net amount on an after-tax basis equal to what he would have received had the excise tax not been payable.
If Mr. Dunn’s employment is terminated due to death, disability, or pursuant to delivery of a non-renewal notice to Suburban in accordance with the terms and conditions of his employment agreement, he or his estate, as the case may be, shall be entitled to earned but unpaid base salary plus his pro-rata cash bonus for the fiscal year during which termination occurred. If his employment is terminated by Suburban for cause, or he resigns without good reason, he shall be entitled to his earned but unpaid base salary only.
Mr. Dunn’s compensation for service as Chief Executive Officer, commencing September 27, 2009, has not been established at this time.
For additional information, see the table titled “Potential Payments Upon Termination” below.
Severance Benefits
We believe that, in most cases, employees should be paid reasonable severance benefits. Therefore, it is the general policy of the Committee to provide executive officers and other key employees who do not have employments agreements and who are terminated by us without cause or who choose to terminate their employment with us for good reason“good reason” with a severance payment equal to, at a minimum, one year’s base salary, unless circumstances dictate otherwise. This policy was adopted because it may be difficult for former executive officers and other key employees to find comparable employment within a short period of time. However, depending upon individual facts and circumstances, particularly the severed employee’s tenure with us, the Committee may make exceptions to this general policy.
A “key employee” is an employee who has attained a director level pay-grade or higher. “Cause” will be deemed to exist where the individual has been convicted of a crime involving moral turpitude, has stolen from us,
28
has violated his or her non-competition or confidentiality obligations, or has been grossly negligent in fulfillment of his or her responsibilities. “Good reason” generally will exist where an executive officer’s position or compensation has been decreased or where the employee has been required to relocate.
Our executive officers and other key employees have built Suburban into the successful enterprise that it is today; therefore, we believe that it is important to protect them in the event of a change of control. Further, it is our belief that the interests of our Unitholders will be best served if the interests of our executive officers are aligned with them, and that providing change of control benefits should eliminate, or at least reduce, the reluctance of our executive officers to pursue potential change of control transactions that may be in the best interests of our Unitholders. Additionally, we believe that the severance benefits provided to our executive officers and to our key employees are consistent with market practice and appropriate because these benefits are an inducement to accepting employment and because the executive officers have agreed to and are subject to non-competition and non-solicitation covenants for a period following termination of employment. Therefore, our executive officers and other key employees are provided with employment protection following a change of control, underwhich we refer to as the “Severance Protection Plan.” During fiscal 2014, our Severance Protection Plan. Our Severance Protection Plan coverscovered all executive officers, including the named executive officers, with the exception of our Chief Executive Officer and our President, whose severance provisions are established in their respective employment agreements.
officers.The Severance Protection Plan provides for severance payments of either 65 or 78 weeks of base salary and target cash bonuses for such officers and key employees if within one year following a change of control and termination of employment.their employment is terminated by us or our successor or they resign for Good Reason (as defined in the Severance Protection Plan). All named executive officers who participate in the Severance Protection Plan (other than Messrs. Alexander and Dunn whose severance is provided for in their employment agreements) are eligible for 78 weeks of base salary and target bonuses. Relative to the overall value of Suburban, these potential change of control benefits are relatively minor. The cash components of any change of control benefits are paid in a lump sum.
In addition, upon a change of control, without regard to whether a participant’s employment is terminated, all unvested awards granted under the RUP will vest immediately and become distributable to the participants andparticipants. Also, without regard to whether a participant’s employment is terminated, all outstanding, unvested LTIP-2 grantsLTIP awards will vest immediately as if the three-year measurement period for each outstanding grantaward concluded on the date the change of control occurred and our TRU was such that, in relationoccurred. Under the provisions of the LTIP document, an amount equal to the performancecash value of 125% of a participant’s unvested LTIP units plus a sum equal to 125% of a participant’s unvested LTIP units multiplied by an amount equal to the other memberscumulative, per-Common Unit distribution from the beginning of an unvested award’s three-year measurement period through the peer group, it fell withindate on which a change of control occurred would become payable to the top quartile.
participants.For purposes of these benefits, a change of control is deemed to occur, in general, if:
| | |
| | • — | | An acquisition of our Common Units or voting equity interests by any person immediately after which such person beneficially owns more than 30% of the combined voting power of our then outstanding Common Units, unless such acquisition was made by (a) us or our subsidiaries, or any employee benefit plan maintained by us our Operating Partnership or any of our subsidiaries, or (b) any person in a transaction where (A) the existing holders prior to the transaction own at least 50% of the voting power of the entity surviving the transaction and (B) none of the Unitholders other than Suburban, our subsidiaries, any employee benefit plan maintained by us or any of our Operating Partnership,subsidiaries, or the surviving entity, or the existing beneficial owner of more than 25% of the outstanding Common Units owns more than 25% of the combined voting power of the surviving entity, (suchwhich transaction we refer to as a “Non-Control Transaction”);Transaction;” or |
|
| | • — | Approval by our partners | The consummation of (a) a merger, consolidation or reorganization involving Suburban other than a Non-Control Transaction; (b) a complete liquidation or dissolution of Suburban; or (c) the sale or other disposition of 40% or more of the gross fair market value of all the assets of Suburban to any person (other than a transfer to a subsidiary). |
The SERP (as discussed above in the section titled “Supplemental Executive Retirement Plan”) will terminate effective on the close of business thirty days following the change of control. Mr. Alexander (if such change of control occurs prior to September 27, 2009) and Mr. Dunn will be deemed to have retired and will have their respective benefits determined as of the date the plan is terminated with payment of their benefits no later than ninety days after the change of control. Each will receive a lump sum payment equivalent to the present value of his benefit payable under the plan utilizing the lesser of the prime rate of interest as published in the Wall Street Journal
29
as of the date of the change of control or one percent, as the discount rate to determine the present value of the accrued benefit.
For purposes of the SERP, a change of control is deemed to occur, in general, if:
| | |
| • | An acquisition of our Common Units or voting equity interests by any person immediately after which such person beneficially owns more than 25% of the combined voting power of our then outstanding Common Units, unless such acquisition was made by (a) us or our subsidiaries, Suburban Energy Services Group, LLC, or any employee benefit plan maintained by us, our Operating Partnership or any of our subsidiaries, or (b) any person in a transaction where (A) the existing holders prior to the transaction own at least 60% of the voting power of the entity surviving the transaction and (B) none of the Unitholders other than Suburban, our subsidiaries, any employee benefit plan maintained by us, our Operating Partnership, or the surviving entity, or the existing beneficial owner of more than 25% of the outstanding Common Units owns more than 25% of the combined voting power of the surviving entity (such transaction, a “Non-Control Transaction”); or |
|
| • | Approval by our partners of (a) a merger, consolidation or reorganization involving Suburban other than a Non-Control Transaction; (b) a complete liquidation or dissolution of Suburban; or (c) the sale or other disposition of 50% or more of our net assets to any person (other than a transfer to a subsidiary). |
For additional information pertaining to severance payable to our named executive officers following a change of control-related termination, see the tables titled “Potential Payments Upon Termination” below.
This report by the Compensation Committee is required by the rules of the Securities and Exchange Commission pursuant to paragraph (e)(5) ofRegulation S-K Item 407. It shall not be deemed to be “soliciting material,” or to be “filed” with the Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Suburban specifically incorporates it by reference in such filing.
Report of the Compensation CommitteeREPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed with management this Compensation Discussion and Analysis. Based on its review and discussions with management, the Committee recommended to the Board of Supervisors that this Compensation Discussion and Analysis be included in this Proxy Statement.
The Compensation Committee:
John Hoyt Stookey, Chairman
John D. Collins
Matthew J. Chanin
Harold R. Logan, Jr.
Dudley C. Mecum
Jane Swift
30
ADDITIONAL INFORMATION REGARDING EXECUTIVE COMPENSATION
Summary Compensation Table for Fiscal 2008
The following table sets forth certain information concerning the compensation of each named executive officer during the fiscal years ended September 27, 20082014, September 28, 2013 and September 29, 2007:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Change in
| | | | | | | |
| | | | | | | | | | | | | | | | | | Pension Value
| | | | | | | |
| | | | | | | | | | | | | | | | | | and
| | | | | | | |
| | | | | | | | | | | | | | | | | | Nonqualified
| | | | | | | |
| | | | | | | | | | | | | | | Non-Equity
| | | Deferred
| | | | | | | |
| | | | | | | | | | | | Unit
| | | Incentive Plan
| | | Compensation
| | | All Other
| | | | |
| | | | | | Salary
| | | Bonus
| | | Awards
| | | Compensation
| | | Earnings
| | | Compensation
| | | Total
| |
Name and Principal
| | Year
| | | ($)(1)
| | | ($)(2)
| | | ($)(3)
| | | ($)(4)
| | | ($)(5)
| | | ($)(6)
| | | ($)
| |
Position (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (g) | | | (h) | | | (i) | | | (j) | |
| |
| Mark A. Alexander | | | 2008 | | | $ | 450,000 | | | | — | | | $ | 171,606 | | | $ | 427,500 | | | | — | | | $ | 46,926 | | | $ | 1,096,032 | |
| Chief Executive Officer | | | 2007 | | | $ | 450,000 | | | $ | 45,000 | | | $ | 410,238 | | | $ | 456,188 | | | | — | | | $ | 52,507 | | | $ | 1,413,933 | |
| Michael A. Stivala | | | 2008 | | | $ | 250,000 | | | | — | | | $ | 157,913 | | | $ | 154,375 | | | | — | | | $ | 32,589 | | | $ | 594,877 | |
| Chief Financial | | | 2007 | | | $ | 200,000 | | | | — | | | $ | 210,370 | | | $ | 132,831 | | | | — | | | $ | 32,356 | | | $ | 575,557 | |
| Officer & Chief Accounting Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Michael J. Dunn, Jr. | | | 2008 | | | $ | 425,000 | | | | — | | | $ | 498,395 | | | $ | 403,750 | | | | — | | | $ | 38,976 | | | $ | 1,366,121 | |
| President | | | 2007 | | | $ | 391,552 | | | | — | | | $ | 824,713 | | | $ | 443,568 | | | $ | 6,752 | | | $ | 44,879 | | | $ | 1,711,464 | |
| Steven C. Boyd | | | 2008 | | | $ | 245,000 | | | | — | | | $ | 178,116 | | | $ | 139,650 | | | | — | | | $ | 26,406 | | | $ | 589,172 | |
| Vice President of | | | 2007 | | | $ | 226,232 | | | | — | | | $ | 243,910 | | | $ | 155,868 | | | | — | | | $ | 34,202 | | | $ | 660,212 | |
| Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Michael M. Keating | | | 2008 | | | $ | 220,000 | | | | — | | | $ | 290,955 | | | $ | 135,850 | | | | — | | | $ | 35,109 | | | $ | 681,914 | |
| Vice President of | | | 2007 | | | $ | 210,000 | | | | — | | | $ | 266,908 | | | $ | 151,611 | | | $ | 5,648 | | | $ | 43,816 | | | $ | 677,983 | |
| Human Resources & Admin. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary ($)(1) | | Bonus ($)(2) | | Unit
Awards
($)(3) | | Non-Equity
Incentive Plan
Compensation
($)(4) | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)(5) | | All Other
Compensation
($)(6) | | Total ($) |
| (a) | | (b) | | (c) | | (d) | | (e) | | (g) | | (h) | | (i) | | (j) |
Michael J. Dunn, Jr.
Former Chief Executive Officer (Retired at the Conclusion of Fiscal 2014) | | | | 2014 | | | | $ | 495,000 | | | | | - | | | | $ | 981,921 | | | | $ | 336,600 | | | | $ | 9,102 | | | | $ | 48,352 | | | | $ | 1,870,975 | |
| | | | 2013 | | | | $ | 495,000 | | | | | - | | | | $ | 369,124 | | | | $ | 297,000 | | | | | - | | | | $ | 54,619 | | | | $ | 1,215,743 | |
| | | | 2012 | | | | $ | 475,000 | | | | | - | | | | $ | 521,058 | | | | | - | | | | $ | 22,308 | | | | $ | 49,280 | | | | $ | 1,067,646 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Michael A. Stivala
President and Chief Executive Officer | | | | 2014 | | | | $ | 362,500 | | | | | - | | | | $ | 1,182,776 | | | | $ | 226,100 | | | | | - | | | | $ | 40,906 | | | | $ | 1,812,282 | |
| | | | 2013 | | | | $ | 300,000 | | | | | - | | | | $ | 376,313 | | | | $ | 144,000 | | | | | - | | | | $ | 42,073 | | | | $ | 862,386 | |
| | | | 2012 | | | | $ | 275,000 | | | | | - | | | | $ | 328,487 | | | | | - | | | | | - | | | | $ | 36,557 | | | | $ | 640,044 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Michael A. Kuglin
Chief Financial Officer and Chief Accounting Officer | | | | 2014 | | | | $ | 252,500 | | | | | - | | | | $ | 675,618 | | | | $ | 116,110 | | | | | - | | | | $ | 33,430 | | | | $ | 1,077,658 | |
| | | | 2013 | | | | $ | 240,000 | | | | | - | | | | $ | 257,297 | | | | $ | 93,600 | | | | | - | | | | $ | 35,161 | | | | $ | 626,058 | |
| | | | 2012 | | | | $ | 215,000 | | | | | - | | | | $ | 215,211 | | | | | - | | | | | - | | | | $ | 28,715 | | | | $ | 458,926 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mark Wienberg
Chief Operating Officer | | | | 2014 | | | | $ | 302,500 | | | | | - | | | | $ | 758,784 | | | | $ | 164,560 | | | | | - | | | | $ | 37,800 | | | | $ | 1,263,644 | |
| | | | 2013 | | | | $ | 280,000 | | | | | - | | | | $ | 364,382 | | | | $ | 134,400 | | | | | - | | | | $ | 36,055 | | | | $ | 814,837 | |
| | | | 2012 | | | | $ | 250,000 | | | | | - | | | | $ | 317,553 | | | | | - | | | | | - | | | | $ | 32,854 | | | | $ | 600,407 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Steven C. Boyd
Senior Vice President – Field Operations | | | | 2014 | | | | $ | 302,500 | | | | | - | | | | $ | 763,708 | | | | $ | 164,560 | | | | $ | 28,917 | | | | $ | 35,341 | | | | $ | 1,295,026 | |
| | | | 2013 | | | | $ | 290,000 | | | | | - | | | | $ | 370,348 | | | | $ | 139,200 | | | | | - | | | | $ | 33,416 | | | | $ | 832,964 | |
| | | | 2012 | | | | $ | 270,000 | | | | | - | | | | $ | 326,310 | | | | | - | | | | $ | 41,823 | | | | $ | 32,763 | | | | $ | 670,896 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Douglas T. Brinkworth
Senior Vice President – Product Supply, Purchasing & Logistics | | | | 2014 | | | | $ | 285,000 | | | | | - | | | | $ | 753,870 | | | | $ | 155,040 | | | | $ | 16,037 | | | | $ | 41,416 | | | | $ | 1,251,363 | |
| | | | 2013 | | | | $ | 270,000 | | | | | - | | | | $ | 358,418 | | | | $ | 129,600 | | | | | - | | | | $ | 40,772 | | | | $ | 798,790 | |
| | | | 2012 | | | | $ | 245,000 | | | | | - | | | | $ | 315,326 | | | | | - | | | | $ | 24,327 | | | | $ | 35,786 | | | | $ | 620,439 | |
| | |
| (1) | | Includes amounts deferred by named executive officers as contributions to the qualified 401(k) Plan. For more information on Mr. Alexander’s and Mr. Dunn’s base salaries, refer to the subheading titled “Employment and Separation Agreements” in the “Compensation Discussion and Analysis” above. During fiscal 2007, Mr. Stivala was not our Chief Financial Officer. His promotion from Controller to Chief Financial Officer was effective on September 30, 2007; therefore, the $50,000 increase between his fiscal 2007 and fiscal 2008 base salary is attributable to the increased responsibilities associated with his promotion. |
|
| | For more information on the relationship between salaries and other cash compensation (i.e., annual cash incentivesbonuses and 2003 Long-Term Incentive Plan awards), refer to the subheading titled “Allocation Among Components” in the “Compensation Discussion and Analysis” above. |
|
| (2) | | For fiscal 2007, during its October 31, 2007 meeting, the Committee exercised itsThis column is reserved for discretionary authority to provide Mr. Alexander with an incentive payment equal to 110% of his target cash bonus to parallel the cash bonuses earned by the otherthat are not based on any performance criteria. During fiscal years 2014, 2013, and 2012, we did not provide our named executive officers under the annual cashwith non-performance related bonus plan. The amount reported in this column represents the additional 10% awarded to Mr. Alexander at the Committee’s discretion.payments. |
|
| (3) | | The amounts reported in this column represent the expense, beforeaggregate grant date fair value of RUP awards made during fiscal years 2014, 2013 and 2012, as well as the applicationvalue at the grant date of forfeiture estimates, recognized in our fiscal 2008 and 2007 statements of operations with respect to RUP grantsawards made in fiscal years 20082014, 2013, and 2007, as well as in prior fiscal years, and for LTIP-2 grants made in fiscal years 2008 and 2007 as well as in prior fiscal years.2012 under the LTIP, based on the probable outcome with respect to satisfaction of the performance conditions. The specific details regarding these plans are provided in the preceding “Compensation Discussion and Analysis” under the subheadings “2000 Restricted“Restricted Unit Plan” and “2003 Long-Term“Long-Term Incentive |
31
| | |
| | Plan.” The calculations of the charges to earnings generated by both plans were made in accordance with SFAS 123R. The breakdown for each plan with respect to each named executive officer is as follows: |
| | | | | | | | | | | | | | | | | | | | | |
Plan Name | | Mr. Alexander | | | Mr. Stivala | | | Mr. Dunn | | | Mr. Boyd | | | Mr. Keating | |
| |
2008 | | | | | | | | | | | | | | | | | | | | |
| RUP | | | N/A | | | $ | 81,983 | | | $ | 309,366 | | | $ | 94,480 | | | $ | 160,358 | |
| LTIP-2 | | $ | 171,606 | | | | 75,930 | | | | 189,029 | | | | 83,636 | | | | 130,597 | |
| | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 171,606 | | | $ | 157,913 | | | $ | 498,395 | | | $ | 178,116 | | | $ | 290,955 | |
| | | | | | | | | | | | | | | | | | | | | |
2007 | | | | | | | | | | | | | | | | | | | | |
| RUP | | | N/A | | | $ | 82,507 | | | | N/A | | | $ | 87,127 | | | $ | 39,911 | |
| LTIP-2 | | $ | 410,238 | | | | 127,863 | | | $ | 824,713 | | | | 156,783 | | | | 226,997 | |
| | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 410,238 | | | $ | 210,370 | | | $ | 824,713 | | | $ | 243,910 | | | $ | 266,908 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Plan Name | | Mr. Dunn | | | Mr. Stivala | | | Mr. Kuglin | | | Mr. Wienberg | | | Mr. Boyd | | | Mr. Brinkworth | |
2014 | | | | | | | | | | | | | | | | | | | | | | | | |
RUP | | | $ 677,679 | | | | $ 1,035,266 | | | | $ 579,736 | | | | $ 621,111 | | | | $ 621,111 | | | | $ 621,111 | |
LTIP | | | 304,242 | | | | 147,510 | | | | 95,882 | | | | 137,673 | | | | 142,597 | | | | 132,759 | |
Total | | | $ 981,921 | | | | $ 1,182,776 | | | | $ 675,618 | | | | $ 758,784 | | | | $ 763,708 | | | | $ 753,870 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
2013 | | | | | | | | | | | | | | | | | | | | | | | | |
RUP | | | N/A | | | | $ 197,351 | | | | $ 140,971 | | | | $ 197,351 | | | | $ 197,351 | | | | $ 197,351 | |
LTIP | | | 369,124 | | | | 178,962 | | | | 116,326 | | | | 167,031 | | | | 172,997 | | | | 161,067 | |
Total | | | $ 369,124 | | | | $ 376,313 | | | | $ 257,297 | | | | $ 364,382 | | | | $ 370,348 | | | | $ 358,418 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
2012 | | | | | | | | | | | | | | | | | | | | | | | | |
RUP | | | $ 260,900 | | | | $ 208,007 | | | | $ 138,668 | | | | $ 208,007 | | | | $ 208,007 | | | | $ 208,007 | |
LTIP | | | 260,158 | | | | 120,480 | | | | 76,543 | | | | 109,546 | | | | 118,303 | | | | 107,319 | |
Total | | | $ 521,058 | | | | $ 328,487 | | | | $ 215,211 | | | | $ 317,553 | | | | $ 326,310 | | | | $ 315,326 | |
| | |
| | Because Mr. Dunn has met the retirement eligibility criteria under the provisions of LTIP-2, the accounting rules set forth in SFAS 123R require full recognition of all expense relative to such plans for Mr. Dunn. Although Mr. Dunn has also met the retirement eligibility criteria under the RUP’s normal retirement provisions, at the discretion of the Committee, Mr. Dunn’s unvested award must be held for three years from the grant date of December 3, 2007 before the retirement provisions become applicable. As a result, the expense associated with Mr. Dunn’s RUP award shall be recognized over this three-year period. |
|
| | Mr. Dunn’s December 3, 2007 RUP award of 29,533 units was granted in consideration of his responsibilities as Suburban’s President and in consideration of his not having received a prior grant under this plan. |
|
| | Because Mr. Keating satisfied the RUP and LTIP-2 retirement criteria during fiscal 2008, all remaining unrecognized expense relative to his unvested awards was recognized during fiscal 2008 in accordance with the requirements of SFAS 123R. |
|
| (4) | | For fiscal 2008, theThe amounts reported in this column represent each named executive officer’s annual cash bonus earned in accordance with the performance measures discussed under the subheading “Annual Cash Bonus Plan” in the preceding “Compensation Discussion and Analysis” above. For fiscal 2007, the amounts included in this column also include the interest credits made on behalf of the remaining balances of LTIP-2’s predecessor plan. Because the remaining balances of the predecessor plan were distributed to the participants during November 2007, there were no 2008 interest credits. The fiscal 2007 breakdown for each plan with respect to each named executive officer is as follows:Analysis.” |
| | | | | | | | | | | | | | | | | | | | | |
Plan Name | | Mr. Alexander | | | Mr. Stivala | | | Mr. Dunn | | | Mr. Boyd | | | Mr. Keating | |
| |
| Cash Bonus | | $ | 450,000 | | | $ | 132,000 | | | $ | 440,000 | | | $ | 155,100 | | | $ | 150,150 | |
| LTIP-1 Interest Credits | | | 6,188 | | | | 831 | | | | 3,568 | | | | 768 | | | | 1,461 | |
| | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 456,188 | | | $ | 132,831 | | | $ | 443,568 | | | $ | 155,868 | | | $ | 151,611 | |
| | | | | | | | | | | | | | | | | | | | | |
| | |
| (5) | | The amountsNothing was reported in this column represent eachfor fiscal 2013 because there was a decline in value of the participating named executive officer’sofficers’ Cash Balance Plan earnings for the year.holdings. The changedeclines in pension value and nonqualified deferred compensation earningsvalues for fiscal 2008 was2013 were as follows: ($150,315)24,140), ($23,157)28,591), ($29,043) and ($57,881)14,743) for Messrs. Alexander, Dunn, Boyd, and Keating,Brinkworth, respectively. The change in pension value and nonqualified deferred compensation earnings for fiscal 2007 was ($1,460) and ($3,348) for Messrs. Alexander and Boyd, respectively. These amounts have been omitted from the table because they are negative. Mr. Stivala, isMr. Kuglin and Mr. Wienberg do not a participantparticipate in these plans.the Cash Balance Plan. |
32
| | |
| (6) | | The amounts reported in this column consist of the following: |
| | | | | | | | | | | | | | | | | | | | | |
| | | 2008 | |
Type of Compensation | | Mr. Alexander | | | Mr. Stivala | | | Mr. Dunn | | | Mr. Boyd | | | Mr. Keating | |
| |
| 401(k) Match | | $ | 3,450 | | | $ | 3,450 | | | $ | 3,450 | | | $ | 3,450 | | | $ | 3,300 | |
| Value of Annual Physical Examination | | | 1,500 | | | | 1,500 | | | | 1,500 | | | | N/A | | | | 1,200 | |
| Value of Suburban Provided Vehicle | | | 11,395 | | | | 12,647 | | | | 12,888 | | | | 6,549 | | | | 11,522 | |
| Tax Preparation Services | | | 5,000 | | | | N/A | | | | 2,500 | | | | 900 | | | | 2,500 | |
| Cash Balance Plan Administrative Fees | | | 1,500 | | | | N/A | | | | 1,500 | | | | 1,500 | | | | 1,500 | |
| Insurance Premiums | | | 24,081 | | | | 14,992 | | | | 17,138 | | | | 14,007 | | | | 15,087 | |
| | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 46,926 | | | $ | 32,589 | | | $ | 38,976 | | | $ | 26,406 | | | $ | 35,109 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | |
Type of Compensation | | Mr. Alexander | | | Mr. Stivala | | | Mr. Dunn | | | Mr. Boyd | | | Mr. Keating | |
| |
| 401(k) Match | | $ | 13,500 | | | $ | 12,485 | | | $ | 13,500 | | | $ | 13,500 | | | $ | 12,697 | |
| Value of Annual Physical Examination | | | 1,200 | | | | 1,200 | | | | 1,200 | | | | N/A | | | | 1,500 | |
| Value of Suburban Provided Vehicle or, in Mr. Stivala’s Case, Car Allowance | | | 11,078 | | | | 4,675 | | | | 10,198 | | | | 5,647 | | | | 11,522 | |
| Tax Preparation Services | | | 2,000 | | | | N/A | | | | 2,000 | | | | 950 | | | | 2,000 | |
| Cash Balance Plan Administrative Fees | | | 1,500 | | | | N/A | | | | 1,500 | | | | 1,500 | | | | 1,500 | |
| Insurance Premiums | | | 23,229 | | | | 13,996 | | | | 16,481 | | | | 12,605 | | | | 14,597 | |
| | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 52,507 | | | $ | 32,356 | | | $ | 44,879 | | | $ | 34,202 | | | $ | 43,816 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
2014 | |
| Type of Compensation | | Mr. Dunn | | | Mr. Stivala | | | Mr. Kuglin | | | Mr. Wienberg | | | Mr. Boyd | | | Mr. Brinkworth | |
401(k) Match | | | $ 3,900 | | | | $ 3,900 | | | | $ 3,788 | | | | $ 3,900 | | | | $ 3,900 | | | | $ 3,900 | |
Value of Annual Physical Examination | | | 1,600 | | | | N/A | | | | N/A | | | | 1,750 | | | | N/A | | | | 1,500 | |
Value of Suburban Provided Vehicle | | | 16,549 | | | | 18,153 | | | | 12,725 | | | | 13,142 | | | | 6,837 | | | | 11,410 | |
Tax Preparation Services | | | 9,150 | | | | N/A | | | | N/A | | | | N/A | | | | 4,450 | | | | 4,400 | |
Cash Balance Plan Administrative Fees | | | 1,500 | | | | N/A | | | | N/A | | | | N/A | | | | 1,500 | | | | 1,500 | |
Insurance Premiums | | | 15,653 | | | | 18,853 | | | | 16,917 | | | | 19,008 | | | | 18,654 | | | | 18,706 | |
Totals | | | $ 48,352 | | | | $ 40,906 | | | | $ 33,430 | | | | $ 37,800 | | | | $ 35,341 | | | | $ 41,416 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
2013 | |
| Type of Compensation | | Mr. Dunn | | | Mr. Stivala | | | Mr. Kuglin | | | Mr. Wienberg | | | Mr. Boyd | | | Mr. Brinkworth | |
401(k) Match | | | $ 3,825 | | | | $ 3,825 | | | | $ 3,600 | | | | $ 3,825 | | | | $ 3,825 | | | | $ 3,825 | |
Value of Annual Physical Examination | | | 1,750 | | | | 1,750 | | | | 1,750 | | | | 1,500 | | | | N/A | | | | 1,750 | |
Value of Suburban Provided Vehicle | | | 18,897 | | | | 19,319 | | | | 12,882 | | | | 13,570 | | | | 7,705 | | | | 11,521 | |
Tax Preparation Services | | | 8,950 | | | | N/A | | | | N/A | | | | N/A | | | | 2,650 | | | | 4,050 | |
Cash Balance Plan Administrative Fees | | | 1,500 | | | | N/A | | | | N/A | | | | N/A | | | | 1,500 | | | | 1,500 | |
Insurance Premiums | | | 19,697 | | | | 17,179 | | | | 16,929 | | | | 17,160 | | | | 17,736 | | | | 18,126 | |
Totals | | | $ 54,619 | | | | $ 42,073 | | | | $ 35,161 | | | | $ 36,055 | | | | $ 33,416 | | | | $ 40,772 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
2012 | |
| Type of Compensation | | Mr. Dunn | | | Mr. Stivala | | | Mr. Kuglin | | | Mr. Wienberg | | | Mr. Boyd | | | Mr. Brinkworth | |
401(k) Match | | $ | 3,000 | | | $ | 3,000 | | | $ | 2,580 | | | $ | 3,000 | | | $ | 3,000 | | | $ | 2,940 | |
Value of Annual Physical Examination | | | N/A | | | | 1,500 | | | | N/A | | | | 1,500 | | | | N/A | | | | N/A | |
Value of Suburban Provided Vehicle | | | 17,047 | | | | 15,480 | | | | 9,810 | | | | 11,676 | | | | 7,743 | | | | 10,677 | |
Tax Preparation Services | | | 8,400 | | | | N/A | | | | N/A | | | | N/A | | | | 3,150 | | | | 4,050 | |
Cash Balance Plan Administrative Fees | | | 1,500 | | | | N/A | | | | N/A | | | | N/A | | | | 1,500 | | | | 1,500 | |
Insurance Premiums | | | 19,333 | | | | 16,577 | | | | 16,325 | | | | 16,678 | | | | 17,370 | | | | 16,619 | |
Totals | | | $ 49,280 | | | | $ 36,557 | | | | $ 28,715 | | | | $ 32,854 | | | | $ 32,763 | | | | $ 35,786 | |
Note: Column (f) was omitted from the Summary Compensation Table because Suburban doeswe do not awardgrant options to itsour employees.
33
Grants of Plan Based Awards Table for Fiscal 2008
2014The following table sets forth certain information concerning grants of awards made to each named executive officer during the fiscal year ended September 27, 2008:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Phantom
| | Estimated
| | Estimated Future
| | All Other Stock
| | Grant Date
|
| | | | | | | | | Units
| | Future Payments
| | Payments
| | Awards:
| | Fair Value of
|
| | | | | | | | | Underlying
| | Under Non-Equity
| | Under Equity Incentive
| | Number of
| | Stock and
|
| | | | | | | | | Equity
| | Incentive Plan Awards | | Plan Awards | | Shares of Stock
| | Option
|
| | | | | Grant
| | | | Incentive
| | Target
| | Maximum
| | Target
| | Maximum
| | or Units
| | Awards
|
Name
| | Plan
| | Date
| | Approval
| | Plan Awards
| | ($)
| | ($)
| | ($)
| | ($)
| | (#)
| | ($)(5)
|
(a) | | Name | | (b) | | Date | | (LTIP-2)(4) | | (d) | | (e) | | (g) | | (h) | | (i) | | (l) |
| |
| Mark A. Alexander | | RUP(1) | | N/A | | N/A | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | Bonus(2) | | 28 Sep 07 | | | | | | | | $ | 450,000 | | | $ | 495,000 | | | | | | | | | | | | | | | | | |
| | | LTIP-2(3) | | 28 Sep 07 | | | | | 2,989 | | | | | | | | | | | $ | 135,910 | | | $ | 169,876 | | | | | | | | | |
| Michael A. Stivala | | RUP(1) | | 3 Dec 07 | | 31 Oct 07 | | | | | | | | | | | | | | | | | | | | | | | 2,272 | | | $ | 80,054 | |
| | | Bonus(2) | | 28 Sep 07 | | | | | | | | $ | 162,500 | | | $ | 178,750 | | | | | | | | | | | | | | | | | |
| | | LTIP-2(3) | | 28 Sep 07 | | | | | 1,871 | | | | | | | | | | | $ | 85,074 | | | $ | 106,354 | | | | | | | | | |
| Michael J. Dunn, Jr. | | RUP(1) | | 3 Dec 07 | | 31 Oct 07 | | | | | | | | | | | | | | | | | | | | | | | 29,533 | | | $ | 1,040,593 | |
| | | Bonus(2) | | 28 Sep 07 | | | | | | | | $ | 425,000 | | | $ | 467,500 | | | | | | | | | | | | | | | | | |
| | | LTIP-2(3) | | 28 Sep 07 | | | | | 4,894 | | | | | | | | | | | $ | 222,530 | | | $ | 278,186 | | | | | | | | | |
| Steven C. Boyd | | RUP(1) | | 3 Dec 07 | | 31 Oct 07 | | | | | | | | | | | | | | | | | | | | | | | 3,408 | | | $ | 120,081 | |
| | | Bonus(2) | | 28 Sep 07 | | | | | | | | $ | 147,000 | | | $ | 161,700 | | | | | | | | | | | | | | | | | |
| | | LTIP-2(3) | | 28 Sep 07 | | | | | 1,693 | | | | | | | | | | | $ | 76,980 | | | $ | 96,215 | | | | | | | | | |
| Michael M. Keating | | RUP(1) | | 3 Dec 07 | | 31 Oct 07 | | | | | | | | | | | | | | | | | | | | | | | 3,408 | | | $ | 120,081 | |
| | | Bonus(2) | | 28 Sep 07 | | | | | | | | $ | 143,000 | | | $ | 157,300 | | | | | | | | | | | | | | | | | |
| | | LTIP-2(3) | | 28 Sep 07 | | | | | 1,647 | | | | | | | | | | | $ | 74,889 | | | $ | 93,623 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Estimated Future Payments
Under Non-Equity Incentive
Plan Awards | | Estimated Future Payments
Under Equity Incentive Plan
Awards | | | | |
| Name | | Plan
Name | | Grant
Date | | Approval
Date | | LTIP Units
Underlying
Equity
Incentive
Plan Awards
( LTIP)(4) | | Target ($) | | Maximum ($) | | Target ($) | | Maximum ($) | | All Other stock
Awards:
Number of
Shares of Stock
or Units (#) | | Grant Date
Fair Value of
Stock and
Option
Awards ($)(5) |
(a) | | | | (b) | | | | | | (d) | | (e) | | (g) | | (h) | | (i) | | (l) |
Michael J. Dunn, Jr. | | RUP (1) | | 1 Mar 14 | | 22 Jan 14 | | | | | | | | | | | | 17,009 | | $677,679 |
| Bonus (2) | | 29 Sep 13 | | 13 Nov 13 | | | | $495,000 | | $594,000 | | | | | | | | |
| LTIP (3) | | 29 Sep 13 | | 13 Nov 13 | | 5,404 | | | | | | $304,242 | | $456,363 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Michael A. Stivala | | RUP (1) | | 15 Nov 13 | | 13 Nov 13 | | | | | | | | | | | | 5,302 | | $206,924 |
| RUP (1) | | 1 Apr 14 | | 22 Jan 14 | | | | | | | | | | | | 23,885 | | $828,342 |
| Bonus (2) | | 29 Sep 13 | | 13 Nov 13 | | | | $332,500 | | $399,000 | | | | | | | | |
| LTIP (3) | | 29 Sep 13 | | 13 Nov 13 | | 2,620 | | | | | | $147,510 | | $221,265 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Michael A. Kuglin | | RUP (1) | | 15 Nov 13 | | 13 Nov 13 | | | | | | | | | | | | 4,242 | | $165,549 |
| RUP (1) | | 1 Apr 14 | | 22 Jan 14 | | | | | | | | | | | | 11,943 | | $414,187 |
| Bonus (2) | | 29 Sep 13 | | 13 Nov 13 | | | | $170,750 | | $204,900 | | | | | | | | |
| LTIP (3) | | 29 Sep 13 | | 13 Nov 13 | | 1,703 | | | | | | $95,882 | | $143,823 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Mark Wienberg | | RUP (1) | | 15 Nov 13 | | 13 Nov 13 | | | | | | | | | | | | 5,302 | | $206,924 |
| RUP (1) | | 1 Apr 14 | | 22 Jan 14 | | | | | | | | | | | | 11,943 | | $414,187 |
| Bonus (2) | | 29 Sep 13 | | 13 Nov 13 | | | | $242,000 | | $290,400 | | | | | | | | |
| LTIP (3) | | 29 Sep 13 | | 13 Nov 13 | | 2,445 | | | | | | $137,673 | | $206,510 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Steven C. Boyd | | RUP (1) | | 15 Nov 13 | | 13 Nov 13 | | | | | | | | | | | | 5,302 | | $206,924 |
| RUP (1) | | 1 Apr 14 | | 22 Jan 14 | | | | | | | | | | | | 11,943 | | $414,187 |
| Bonus (2) | | 29 Sep 13 | | 13 Nov 13 | | | | $242,000 | | $290,400 | | | | | | | | |
| LTIP (3) | | 29 Sep 13 | | 13 Nov 13 | | 2,533 | | | | | | $142,597 | | $213,896 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Douglas T. Brinkworth | | RUP(1) | | 15 Nov 13 | | 13 Nov 13 | | | | | | | | | | | | 5,302 | | $206,924 |
| RUP(1) | | 1 Apr 14 | | 22 Jan 14 | | | | | | | | | | | | 11,943 | | $414,187 |
| Bonus(2) | | 29 Sep 13 | | 13 Nov 13 | | | | $228,000 | | $273,600 | | | | | | | | |
| LTIP(3) | | 29 Sep 13 | | 13 Nov 13 | | 2,358 | | | | | | $132,759 | | $199,139 | | | | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | The quantities reported on these lines represent discretionary awards granted under Suburban’s 2000the Restricted Unit Plan.Plans. RUP awards granted subsequent to fiscal 2013 vest as follows: 25%one third of the award on the first anniversary of the grant date; one third of the award on the second anniversary of the grant date; and one third of the award on the third anniversary of the grant date; 25% of the award on the fourth anniversary of the grant date; and 50% of the award on the fifth anniversary of the grantdate, subject in each case to continued service through each such date. If a recipient has held an unvested award for at least six months; is 55 years or older; and has worked for Suburban for at least 10ten years, an award held by such participant will vest six months following such participant’s retirement if the participant retires prior to the conclusion of the normal vesting schedule, unless the Committee exercises its discretionary authority to alter the applicability of the plan’s retirement provisionprovisions in regard to a particular award. On September 27, 2008, Messrs.2014, Mr. Dunn and Keating werewas the only named executive officersofficer who held RUP awards and, at the same time, satisfied all three retirement eligibility criteria. However, as a condition of Mr. Dunn’s award, the Committee requires Mr. Dunn to hold his award for three years from the grant date before the plan’s retirement provisions become applicable. Detailed discussionsA discussion of the general terms of the RUP, and the facts and circumstances considered by the Committee in authorizing the 2008fiscal 2014 awards to the named executive officers, is included in the preceding “Compensation Discussion and Analysis” under the subheading “2000 Restricted“Restricted Unit Plan.” |
| |
| (2) | | Amounts reported on these lines are the targeted and maximum annual cash bonus compensation potential for each named executive officer under the annual cash bonus plan as described in the preceding “Compensation Discussion and Analysis” under the subheading “Annual Cash Bonus Plan.” Actual amounts earned by the named executive officers for fiscal 20082014 were equal to 95%68% of the “Target” amounts reported on this line. Column (c) (“Threshold $”) was omitted because the annual cash bonus plan does not provide for a minimum cash payment. Because these plan awards were granted to, and 95%68% of the “Target” awards were earned by, our named executive officers during fiscal 2008, 95%2014, 68% of the “Target” amounts reported under column (d) have been reported in the Summary Compensation Table above. |
| |
| (3) | | LTIP-2The LTIP is a phantom unit plan. As discussed in the “Compensation Discussion and Analysis” above, under the subheading “2003 Long-Term Incentive Plan,” in accordance with his employment agreement, Mr. Alexander’s award is based upon 30% of his annual target cash bonus; however, Mr. Dunn’s award (as are the awards of all of the other named executive officers) is based upon 52% of his annual target cash bonus. The different percentages account for the apparent differences between amounts reported for Mr. Alexander and for Mr. Dunn. |
|
| | Payments, if earned, are based on a combination of (1) the fair market value of our Common Units at the end of a three-year measurement period, which, for purposes of the plan, is the average of the closing prices for the twenty business days preceding the conclusion of the three-year measurement period, and (2) cash equal to the distributions that would have inured to the same quantity of outstanding Common Units during the same three- |
34
| | |
| | yearthree-year measurement period. The fiscal 20082014 award “Target ($)”“Target” and “Maximum ($)”“Maximum” amounts are estimates based upon (1) the fair market value (the average of the closing prices of our Common Units for the 20twenty business days preceding September 27, 2008)28, 2013) of our Common Units at the endbeginning of fiscal 2008,2014, and (2) the estimated distributions over the course of the award’s three-year measurement period. Column (f) (“Threshold $”Threshold”) was omitted because LTIP-2the LTIP does not provide for a minimum cash payment. The “Target” amount represents a hypothetical payment at 100% of target and the “Maximum” amount represents a hypothetical payment at 150% of target. Detailed descriptions of the plan and the calculation of awards are included in the preceding “Compensation Discussion and Analysis” under the subheading “2003 Long-Term“Long-Term Incentive Plan.” |
| |
| (4) | | This column is frequently used when non-equity incentive plan awards are denominated in units; however, in this case, the numbers reported represent the phantomLTIP units each named executive officer was awarded under LTIP-2the LTIP during fiscal 2008.2014. |
| |
| (5) | | The dollar amounts reported in this column represent the aggregate fair value of the RUP awards on the grant date, calculated in accordance with SFAS 123R.net of estimated future distributions during the vesting period. The fair value shown may not be indicative of the value realized in the future upon vesting due to the variability in the trading price of our Common Units. |
|
| | Note: Columns (j) and (k) were omitted from the Grants of Plan Based Awards Table because Suburban does not award options to its employees. |
Note: Columns (j) and (k) were omitted from the Grants of Plan Based Awards Table because we do not award options to our employees.
Outstanding Equity Awards at Fiscal Year End 20082014 Table
The following table sets forth certain information concerning outstanding equity awards under our 2000 Restricted Unit Plan and phantom equityLTIP unit awards under our 2003 Long-Term Incentive PlanLTIP for each named executive officer as of September 27, 2008:
| | | | | | | | | | | | | | | | | |
| | | Stock Awards | |
| | | | | | | | | | | | Equity Incentive
| |
| | | | | | | | | Equity Incentive
| | | Plan Awards:
| |
| | | | | | | | | Plan Awards:
| | | Market or
| |
| | | | | | | | | Number of
| | | Payout Value of
| |
| | | | | | Market Value
| | | Unearned
| | | Unearned Shares,
| |
| | | | | | of Shares or
| | | Shares, Units or
| | | Units or Other
| |
| | | Number of Shares or
| | | Units of Stock
| | | Other Rights
| | | Rights
| |
| | | Units of Stock That
| | | That Have Not
| | | that Have Not
| | | That Have
| |
| | | Have Not Vested
| | | Vested
| | | Vested
| | | Not Vested
| |
Name
| | (#)(5)
| | | ($)(6)
| | | (#)(7)
| | | ($)(8)
| |
(a) | | (g) | | | (h) | | | (i) | | | (j) | |
| |
| Mark A. Alexander | | | — | | | | — | | | | 6,996 | | | $ | 316,355 | |
| Michael A. Stivala(1) | | | 13,946 | | | $ | 476,605 | | | | 3,474 | | | $ | 157,261 | |
| Michael J. Dunn, Jr.(2) | | | 29,533 | | | $ | 1,009,290 | | | | 11,068 | | | $ | 500,561 | |
| Steven C. Boyd(3) | | | 16,804 | | | $ | 574,277 | | | | 3,730 | | | $ | 168,711 | |
| Michael M. Keating(4) | | | 5,606 | | | $ | 191,585 | | | | 3,754 | | | $ | 169,772 | |
| | | | | | | | |
Stock Awards |
Name | | Number of Shares
or Units of Stock
That Have Not
Vested (#)(7) | | Market Value of Shares or
Units of Stock
That Have Not
Vested ($)(8) | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights that Have Not
Vested (#)(9) | | Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested ($)(10) |
| (a) | | (g) | | (h) | | (i) | | (j) |
Michael J. Dunn, Jr.(1) | | 25,009 | | $1,107,774 | | 11,963 | | $658,436 |
Michael A. Stivala(2) | | 50,627 | | $2,242,523 | | 5,800 | | $319,229 |
Michael A. Kuglin(3) | | 30,879 | | $1,367,785 | | 3,770 | | $207,499 |
Mark Wienberg(4) | | 38,685 | | $1,713,552 | | 5,413 | | $297,929 |
Steven C. Boyd(5) | | 38,685 | | $1,713,552 | | 5,607 | | $308,606 |
Douglas T. Brinkworth(6) | | 38,865 | | $1,713,552 | | 5,220 | | $287,305 |
| (1) | Mr. Dunn’s RUP awards will vest as follows: |
| | | | | | | | | | | | | | | | | | | | | | |
(1)Vesting Date | | Mar 28 2015 | | | | | | | | | | | | | | | | | | | | |
Quantity of Units | | 25,009 | | | | | | | | | | | | | | | | | | | | |
| (2) | Mr. Stivala’s RUP awards will vest as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Vesting Date | | Nov 15 2014 | | Apr 1 2015 | | Nov 15 2015 | | Apr 1 2016 | | Nov 15 2016 | | Apr 1 2017 | | Nov 15 2017 | | | | | | | | | | |
Quantity of Units | | 7,275 | | 7,962 | | 8,189 | | 7,962 | | 7,062 | | 7,961 | | 4,216 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Oct. 1,
| | | Nov. 1,
| | | Oct. 1,
| | | Nov. 1,
| | | Apr. 25,
| | | Oct. 1,
| | | Nov. 1,
| | | Dec. 3,
| | | Apr. 25,
| | | Dec. 3,
| | | Apr. 25,
| | | Dec. 3,
| |
Vesting Date | | 2008 | | | 2008 | | | 2009 | | | 2009 | | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2011 | | | 2011 | | | 2012 | | | 2012 | |
| |
| Quantity of Units | | | 870 | | | | 1,200 | | | | 870 | | | | 900 | | | | 1,374 | | | | 1,738 | | | | 600 | | | | 568 | | | | 1,374 | | | | 568 | | | | 2,748 | | | | 1,136 | |
| (3) | |
(2) | | Despite Mr. Dunn’s having met the plan’s retirement criteria, this award will not be subject to the plan’s retirement provisions until December 3, 2010. For more information on this and the retirement provision, refer to the subheading “2000 Restricted Unit Plan” in the “Compensation Discussion and Analysis.” If Mr. Dunn does not retire prior to the conclusion of the normal vesting schedule of his award, his awardKuglin’s RUP awards will vest as follows: |
| | | | | | | | | | | | | |
| | | Dec. 3,
| | Dec. 3,
| | Dec. 3,
|
Vesting Date | | 2010 | | 2011 | | 2012 |
| |
| Quantity of Units | | | 7,384 | | | | 7,384 | | | | 14,765 | |
35
| | | | | | | | | | | | | | | | | | | | |
| Vesting Date | | Nov 15 2014 | | Apr 1 2015 | | Nov 15 2015 | | Apr 1 2016 | | Nov 15 2016 | | Apr 1 2017 | | Nov 15 2017 | | | | | | |
Quantity of Units | | 5,084 | | 3,981 | | 5,795 | | 3,981 | | 5,046 | | 3,981 | | 3,011 | | | | | | |
| (4) | Mr. Wienberg’s RUP awards will vest as follows: |
| | | | | | | | | | | | | | | | |
| | | Vesting Date | | Nov 15 2014 | | Apr 1 2015 | | Nov 15 2015 | | Apr 1 2016 | | Nov 15 2016 | | Apr 1 2017 | | Nov 15 2017 |
| | Quantity of Units | | 7,275 | | 3,981 | | 8,189 | | 3,981 | | 7,062 | | 3,981 | | 4,216 |
(3) | (5) | Mr. Boyd’s RUP awards will vest as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Nov. 1,
| | Nov. 1,
| | Apr. 25,
| | Nov. 1,
| | Dec. 3,
| | Apr. 25,
| | Dec. 3,
| | Apr. 25,
| | Dec. 3,
|
Vesting Date | | 2008 | | 2009 | | 2010 | | 2010 | | 2010 | | 2011 | | 2011 | | 2012 | | 2012 |
| |
| Quantity of Units | | | 2,500 | | | | 2,200 | | | | 1,374 | | | | 3,200 | | | | 852 | | | | 1,374 | | | | 852 | | | | 2,748 | | | | 1,704 | |
| | | | | | | | | | | | | | | | |
| | | Vesting Date | | Nov 15 2014 | | Apr 1 2015 | | Nov 15 2015 | | Apr 1, 2016 | | Nov 15 2016 | | Apr 1 2017 | | Nov 15 2017 |
| | Quantity of Units | | 7,275 | | 3,981 | | 8,189 | | 3,981 | | 7,062 | | 3,981 | | 4,216 |
| (6) | |
(4) | | Mr. Keating met the retirement eligibility criteria (explained under the subheading “2000 Restricted Unit Plan” in the “Compensation Discussion and Analysis”) during fiscal 2008. If he does not retire prior to the conclusion of the normal vesting schedule of his award, his awardBrinkworth’s RUP awards will vest as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Apr. 25,
| | Dec. 3,
| | Apr. 25,
| | Dec. 3,
| | Apr. 25,
| | Dec. 3,
|
Vesting Date | | 2010 | | 2010 | | 2011 | | 2011 | | 2012 | | 2012 |
| |
| Quantity of Units | | | 550 | | | | 852 | | | | 550 | | | | 852 | | | | 1,098 | | | | 1,704 | |
| | | | | | | | | | | | | | | | |
| | | Vesting Date | | Nov 15 2014 | | Apr 1 2015 | | Nov 15 2015 | | Apr 1, 2016 | | Nov 15 2016 | | Apr 1 2017 | | Nov 15 2017 |
| | Quantity of Units | | 7,275 | | 3,981 | | 8,189 | | 3,981 | | 7,062 | | 3,981 | | 4,216 |
| (7) | |
(5) | | The figures reported in this column represent the total quantity of each of our named executive officer’s unvested RUP awards. |
| |
(6)(8) | | The figures reported in this column represent the figures reported in column (g) multiplied by the average of the highest and the lowest trading prices of our Common Units on September 26, 2008,2014, the last trading day of fiscal 2008.2014. |
| |
(7)(9) | | The amounts reported in this column represent the quantities of phantomLTIP units that underlie the outstanding and unvested fiscal 20072014 and fiscal 20082013 awards under LTIP-2.the LTIP. Payments, if earned, for the 2013 award, will be made to participants at the end of a three-year measurement period and will be based upon our total return to our Common Unitholders in comparison to the total return provided by a predetermined peer group of eleven other companies, all of which are publicly-traded partnerships, to their unitholders. Payments if earned, for the 2014 award, will be made to participants at the end of a three-year measurement period and will be based upon Suburban’s distribution coverage ratio for the three-year measurement period. For more information on LTIP-2,the LTIP, refer to the subheading “2003 Long-Term“Long-Term Incentive Plan” in the preceding “Compensation Discussion and Analysis.” |
| |
(8)(10) | | The amounts reported in this column represent the estimated future target payouts of the fiscal 20072014 and fiscal 2008 LTIP-2 awards.2013 awards granted under the LTIP. These amounts were computed by multiplying the quantities of the unvested phantomLTIP units in column (i) by the average of the closing prices of our Common Units for the twenty business days preceding September 27, 20082014 (in accordance with the plan’s valuation methodology), and by adding to the product of that calculation the product of each year’s underlying phantomLTIP units times the sum of the distributions that are estimated to inure to an outstanding Common Unit during each award’s three-year measurement period. Due to the variability in the trading prices of our Common Units, as well as our performance relative to the peer group, actual payments, if any, at the end of the three-year measurement period may differ. The following chart provides a breakdown of each year’s awards: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Mr. Dunn | | | Mr. Stivala | | | Mr. Kuglin | | | Mr. Wienberg | | | Mr. Boyd | | | Mr. Brinkworth | |
Fiscal 2014 LTIP Units | | | 5,404 | | | | 2,620 | | | | 1,703 | | | | 2,445 | | | | 2,533 | | | | 2,358 | |
| | | | | | | |
Value of Fiscal 2014 LTIP Units | | $ | 240,756 | | | $ | 116,725 | | | $ | 75,871 | | | $ | 108,928 | | | $ | 112,849 | | | $ | 105,052 | |
| | | | | | | |
Estimated Distributions over Measurement Period | | $ | 56,742 | | | $ | 27,510 | | | $ | 17,882 | | | $ | 25,673 | | | $ | 26,597 | | | $ | 24,759 | |
| | | | | | | | | | | | | | | | | | | |
Fiscal 2013 LTIP Units | | | 6,559 | | | | 3,180 | | | | 2,067 | | | | 2,968 | | | | 3,074 | | | | 2,862 | |
| | | | | | | |
Value of Fiscal 2013 LTIP Units | | $ | 292,213 | | | $ | 141,674 | | | $ | 92,088 | | | $ | 132,229 | | | $ | 136,951 | | | $ | 127,506 | |
| | | | | | | |
Estimated Distributions over Measurement Period | | $ | 68,725 | | | $ | 33,320 | | | $ | 21,658 | | | $ | 31,099 | | | $ | 32,209 | | | $ | 29,988 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Mr. Alexander | | Mr. Stivala | | Mr. Dunn | | Mr. Boyd | | Mr. Keating |
| |
| Fiscal 2007 Phantom Units | | | 4,007 | | | | 1,603 | | | | 6,174 | | | | 2,037 | | | | 2,107 | |
| Value of Fiscal 2007 Phantom Units | | $ | 144,182 | | | $ | 57,680 | | | $ | 222,156 | | | $ | 73,296 | | | $ | 75,815 | |
| Estimated Distributions over Measurement Period | | $ | 36,263 | | | $ | 14,507 | | | $ | 55,875 | | | $ | 18,435 | | | $ | 19,068 | |
| Fiscal 2008 Phantom Units | | | 2,989 | | | | 1,871 | | | | 4,894 | | | | 1,693 | | | | 1,647 | |
| Value of Fiscal 2008 Phantom Units | | $ | 107,552 | | | $ | 67,323 | | | $ | 176,098 | | | $ | 60,918 | | | $ | 59,263 | |
| Estimated Distributions over Measurement Period | | $ | 28,358 | | | $ | 17,751 | | | $ | 46,432 | | | $ | 16,062 | | | $ | 15,626 | |
Note: Columns (b), (c), (d), (e) and (f), all of which are for the reporting of option-related compensation, have been omitted from the Outstanding“Outstanding Equity Awards At Fiscal Year End Table2014 Table” because we do not grant options to our employees.
36
Equity Vested Table for Fiscal 2008
2014Awards under the 2000 Restricted Unit PlanPlans are settled in Common Units upon vesting. Awards under the 2003 Long-Term Incentive Plan,LTIP, a phantom-equityLTIP-equity plan, are settled in cash. The following two tables set forth certain information concerning allthe vesting of awards under our 2000 Restricted Unit PlanPlans and the vesting of the fiscal 20062012 award under our 2003 Long-Term Incentive PlanLTIP for each named executive officer during the fiscal year ended September 27, 2008:
2000 Restricted Unit Plan
| | | | | | | | | | | | | |
| | | Unit Awards | | | | |
| | | Number of
| | | | |
| | | Common
| | | | |
| | | Units
| | | Value
| |
| | | Acquired on
| | | Realized on
| |
| | | Vesting
| | | Vesting
| |
Name | | (#) | | | ($)(1) | |
| |
| Mark A. Alexander | | | — | | | | — | | | | | |
| Michael A. Stivala | | | 1,200 | | | $ | 57,654 | | | | | |
| Michael J. Dunn, Jr. | | | — | | | | — | | | | | |
| Steven C. Boyd | | | 1,200 | | | $ | 57,654 | | | | | |
| Michael M. Keating | | | — | | | | — | | | | | |
| | | | |
| Restricted Unit Plans | | Unit Awards |
| Name | | Number of Common Units Acquired on Vesting (#) | | Value Realized on Vesting ($) (1) |
Michael J. Dunn, Jr. | | -0- | | $ -0- |
Michael A. Stivala | | 5,044 | | $ 232,680 |
Michael A. Kuglin | | 4,728 | | $ 218,103 |
Mark Wienberg | | 4,242 | | $ 195,683 |
Steven C. Boyd | | 3,920 | | $ 180,830 |
Douglas T. Brinkworth | | 4,242 | | $ 195,683 |
| | |
| (1) | | The value realized is equal to the average of the high and low trading prices of our Common Units on the vesting date, multiplied by the number of units that vested. |
2003 Long-Term Incentive Plan — Fiscal 2006(2) Award
| | | | | | | | | |
| | | Cash Awards |
| | | Number of
| | |
| | | Phantom
| | |
| | | Units
| | Value
|
| | | Acquired on
| | Realized on
|
| | | Vesting
| | Vesting
|
Name | | (#)(3) | | ($)(4) |
| |
| Mark A. Alexander | | | 4,328 | | | $ | 239,704 | |
| Michael A. Stivala | | | 1,472 | | | $ | 81,526 | |
| Michael J. Dunn, Jr. | | | 6,252 | | | $ | 346,263 | |
| Steven C. Boyd | | | 1,645 | | | $ | 91,107 | |
| Michael M. Keating | | | 2,092 | | | $ | 115,864 | |
| | | | |
Long-Term Incentive Plan – Fiscal 2012(2) Award | | Cash Awards |
| Name | | Number of LTIP Units Acquired on Vesting (#) (3) | | Value Realized on Vesting ($) (4) |
Michael J. Dunn, Jr. | | 5,258 | | $0 |
Michael A. Stivala | | 2,435 | | $0 |
Michael A. Kuglin | | 1,547 | | $0 |
Mark Wienberg | | 2,214 | | $0 |
Steven C. Boyd | | 2,391 | | $0 |
Douglas T. Brinkworth | | 2,169 | | $0 |
| | |
| (2) | | The fiscal 20062012 award’s three-year measurement period concluded on September 27, 2008.2014. |
| |
| (3) | | In accordance with the formula described in the preceding “Compensation Discussion and Analysis” under the subheading “2003 Long-Term“Long-Term Incentive Plan,” these quantities were calculated at the beginning of the three-year measurement period and were, therefore, based upon each individual’s salary and target cash bonus at that time. |
| |
| (4) | | The value (i.e., cash payment) realized was calculated in accordance with the terms and conditions of LTIP-2.the LTIP. For more information, refer to the subheading “2003 Long-Term“Long-Term Incentive Plan” in the preceding “Compensation Discussion and Analysis.” |
37
Pension Benefits Table for Fiscal 2008
2014The following table sets forth certain information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement for each named executive officer as of the end of the fiscal year ended September 27, 2008:
| | | | | | | | | | | | | |
| | | | | Number of
| | | | | | |
| | | | | Years
| | Present Value of
| | | Payments
| |
| | | | | Credited
| | Accumulated
| | | During Last
| |
| | | | | Service
| | Benefit
| | | Fiscal Year
| |
Name | | Plan Name | | (#) | | ($) | | | ($) | |
| |
| Mark A. Alexander | | SERP(1) | | 7 | | $ | 365,988 | | | $ | — | |
| | | Cash Balance Plan(2) | | 7 | | $ | 141,307 | | | $ | — | |
| Michael A. Stivala(3) | | N/A | | N/A | | $ | — | | | $ | — | |
| Michael J. Dunn, Jr. | | SERP(1) | | 6 | | $ | 40,990 | | | $ | — | |
| | | Cash Balance Plan(2) | | 6 | | $ | 175,268 | | | $ | — | |
| | | LTIP-2(4) | | N/A | | $ | 500,561 | | | $ | — | |
| Steven C. Boyd | | Cash Balance Plan(2) | | 15 | | $ | 66,745 | | | $ | — | |
| Michael M. Keating | | Cash Balance Plan(2) | | 15 | | $ | 280,342 | | | $ | — | |
| | | LTIP-2(4) | | N/A | | $ | 169,772 | | | $ | — | |
| | | RUP(5) | | N/A | | $ | 191,585 | | | $ | — | |
| | | | | | | | |
| Name | | Plan Name | | Number
of Years
Credited
Service (#) | | Present Value
of Accumulated
Benefit ($) | | Payments
During Last
Fiscal Year
($) |
| | | | | | | | | |
Michael J. Dunn, Jr. | | Cash Balance Plan (1) | | 6 | | $ 256,392 | | $ - |
| | LTIP(3) | | N/A | | $ 658,436 | | $ - |
| | RUP(4) | | N/A | | $1,107,774 | | $ - |
| | | | | | | | | |
Michael A. Stivala (2) | | N/A | | N/A | | $ - | | $ - |
| | | | | | | | | |
Michael A. Kuglin (2) | | N/A | | N/A | | $ - | | $ - |
| | | | | | | | | |
Mark Wienberg (2) | | N/A | | N/A | | $ - | | $ - |
| | | | | | | | | |
Steven Boyd | | Cash Balance Plan (1) | | 15 | | $ 198,829 | | $ - |
| | | | | | | | | |
Douglas T. Brinkworth | | Cash Balance Plan (1) | | 6 | | $ 124,541 | | $ - |
| | | | | | | | | |
| | |
| (1) | | Mr. Alexander and Mr. Dunn are the only employees who participate in the SERP. Provided that the SERP requirements are met (retirement at age 55 or older and having provided 10 or more years of service to Suburban), Mr. Alexander will receive a monthly benefit of $6,737 and Mr. Dunn will receive a monthly benefit of $373. For more information on the SERP, including the vesting of benefits for Mr. Alexander under the Consulting and Separation Agreement, refer to the subheading “Supplemental Executive Retirement Plan” in the “Compensation Discussion and Analysis.” |
|
(2) | | For more information on the Cash Balance Plan, refer to the subheading “Pension Plan” in the preceding “Compensation Discussion and Analysis.” |
| |
(3)(2) | | Because Mr. Stivala, Mr. Kuglin and Mr. Wienberg commenced employment with Suburban after January 1, 2000, the date on which the Cash Balance Plan was closed to new participants, he doesthey do not participate in the Cash Balance Plan. |
| |
(4)(3) | | Currently, Mr. Dunn and Mr. Keating areis the only named executive officersofficer who meetmeets the retirement criteria of the LTIP-2 plan document.LTIP. For such participants, upon retirement, outstanding but unvested LTIP-2 awards under the LTIP become fully vested. However, payouts on those awards are deferred until the conclusion of each outstanding award’s three-year measurement period, based on the outcome of the TRU relative to the peer group.group for the 2012 award and the outcome of the distributable cash flow measurement for the 2014 award. The number reported on this line represents a projected payout of Mr. Dunn’s and Mr. Keating’s outstanding fiscal 20072014 and fiscal 2008 LTIP-2 awards.2013 awards under the LTIP. Because the ultimate payout, if any, is predicated on the trading prices of Suburban’s Common Units at the end of the three-year measurement period, as well as where, within the peer group, our TRU falls, the value reported may not be indicative of the value realized in the future upon vesting due to the variability in the trading price of our Common Units. |
| |
(5)(4) | | Currently, Mr. KeatingDunn is the only named executive officer who meets the retirement criteria of the RUP document.RUP. For suchmore information on this and the retirement provisions, refer to the subheading “Restricted Unit Plans” in the preceding “Compensation Discussion and Analysis.” For participants who meet the retirement criteria, upon retirement, outstanding RUP awards vest six months and one day after retirement. The value reported in this table is identical to the value of 5,606 Common Units on September 27, 2008. |
Potential Payments Upon Termination or Change in Control
Potential Payments upon Termination to Named Executive Officers with Employment Agreements
The following table sets forth certain information concerning the potential payments to Mr. Alexander and Mr. Dunn under their employment agreements, the SERP and LTIP-2 for the circumstances listed in the table assuming a September 27, 2008 termination date. See the foregoing “Compensation Discussion and Analysis — Employment and Separation Agreements” for a description of the actual payments and benefits to be received by
38
Mr. Alexander under the Consulting and Separation Agreement as a result of his stepping down from the position of Chief Executive Officer of Suburban on September 26, 2009.
| | | | | | | | | | | | | | | | | |
| | | | | | | | | Involuntary
| | | Involuntary
| |
| | | | | | | | | Termination
| | | Termination
| |
| | | | | | | | | Without Cause
| | | without Cause
| |
| | | | | | | | | by Suburban
| | | by Suburban
| |
| | | | | | | | | or by the
| | | or by the
| |
| | | | | | | | | Executive for
| | | Executive for
| |
| | | | | | | | | Good Reason
| | | Good Reason
| |
| | | | | | | | | without a
| | | with a Change
| |
| | | | | | | | | Change of
| | | of Control
| |
Executive Payments and Benefits Upon Termination | | Death | | | Disability | | | Control Event | | | Event | |
| |
| Mark A. Alexander | | | | | | | | | | | | | | | | |
| Cash Compensation(1) | | $ | 0 | (3) | | $ | 0 | (4) | | $ | 1,350,000 | | | $ | 2,835,000 | |
| Accelerated Vesting of Fiscal 2007 and 2008 LTIP-2 Awards(2) | | | N/A | | | | N/A | | | | N/A | | | | 355,505 | |
| SERP(5) | | | 220,600 | | | | 287,000 | | | | 0 | | | | 449,100 | |
| Medical Benefits | | | N/A | | | | N/A | | | | 35,388 | | | | 35,388 | |
280G TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
409A TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 220,600 | | | $ | 287,000 | | | $ | 1,385,388 | | | $ | 3,674,993 | |
| | | | | | | | | | | | | | | | | |
| Michael J. Dunn, Jr. | | | | | | | | | | | | | | | | |
| Cash Compensation(1) | | $ | 0 | (3) | | $ | 0 | (4) | | $ | 850,000 | | | $ | 1,785,000 | |
| Accelerated Vesting of Fiscal 2007 and 2008 LTIP-2 Awards(2) | | | N/A | | | | N/A | | | | N/A | | | | 561,852 | |
| Accelerated Vesting of Outstanding RUP Awards(6) | | | N/A | | | | N/A | | | | N/A | | | | 1,009,290 | |
| SERP | | | 29,800 | | | | 52,400 | | | | 52,400 | | | | 38,500 | |
| Medical Benefits | | | N/A | | | | N/A | | | | 23,592 | | | | 23,592 | |
280G TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
409A TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 29,800 | | | $ | 52,400 | | | $ | 925,992 | | | $ | 3,418,234 | |
| | | | | | | | | | | | | | | | | |
| | |
(1) | | For more information on the cash compensation payable to the two named executive officers with whom we have entered into employment agreements, refer to the subheading “Employment and Separation Agreements” in the “Compensation Discussion and Analysis.” |
|
(2) | | In the event of a change of control, all LTIP-2 awards will vest immediately regardless of whether termination immediately follows. If a change of control event occurs, the calculation of the LTIP-2 payment will be made as if our total return to Common Unitholders was higher than that provided by any of the other members of the peer group to their unitholders. For more information, refer to the subheading “2003 Long-Term Incentive Plan” in the “Compensation Discussion and Analysis.” In the event of death, the inability to continue employment due to permanent disability, or a termination without cause or a good reason resignation unconnected to a change of control event, awards will vest in accordance with the normal vesting schedule and will be subject to the same requirements as awards held by individuals still employed by Suburban and shall be subject to the same risks as awards held by all other participants. |
|
(3) | | In the event of death, Mr. Alexander’s and Mr. Dunn’s estates are entitled to a payment equal to the decedent’s earned but unpaid salary and pro-rata cash bonus at the time of death. |
|
(4) | | In the event of disability, each of Mr. Alexander and Mr. Dunn is entitled to a payment equal to his earned but unpaid salary and pro-rata cash bonus. |
|
(5) | | Because Mr. Alexander had not attained age 55 on September 27, 2008, if any of the above hypothetical events had occurred on that date, only death, disability or a change of control would give rise to a SERP-related payment. Change of control related payments are due to Mr. Alexander and Mr. Dunn within 30 days of the |
39
| | |
| | change of control event, regardless of whether termination or resignation follows the event. In the event of death, Mr. Alexander’s estate would have received a lump-sum payment of $220,600. In the event of disability, if Mr. Alexander remained disabled until age 55, he would be eligible for a lump-sum payment, at that time, of $864,200. The figure $287,000 reported in the table represents the present value of the hypothetical future payment. |
|
(6) | | The RUP document makes no provisions for the vesting of grants held by recipients who die prior to the completion of the vesting schedule. If a recipient of a RUP grant becomes permanently disabled, only those grants that have been held for at least one year on the date that the employee’s employment is terminated as a result of his or her permanent disability shall immediately vest; all grants held by the recipient for less than one year shall be forfeited by the recipient. Because Mr. Dunn’s RUP grant was awarded less than one year prior to September 27, 2008, if he had become permanently disabled on September 27, 2008, his RUP grant would have been forfeited. |
|
| | Under circumstances unrelated to a change of control, if a RUP grant recipient’s employment is terminated without cause or he or she resigns for good reason, any RUP grants held by such recipient shall be forfeited. |
|
| | In the event of a change of control, as defined in the RUP document, all unvested RUP grants shall vest immediately on the date the change of control is consummated, regardless of the holding period and regardless of whether the recipient’s employment is terminated. |
40
Potential Payments upon Termination to Named Executive Officers without Employment Agreements
The following table sets forth certain information containing potential payments to the three named executive officers without employment agreements in accordance with the provisions of Mr. Dunn’s letter agreement, the Severance Protection Plan, the RUP and LTIP-2the LTIP for the circumstances listed in the table assuming a September 27, 20082014 termination date:
| | | | | | | | | | | | | | | | | |
| | | | | | | | | Involuntary
| | | Involuntary
| |
| | | | | | | | | Termination
| | | Termination
| |
| | | | | | | | | without Cause
| | | without Cause
| |
| | | | | | | | | by Suburban
| | | by Suburban
| |
| | | | | | | | | or by the
| | | or by the
| |
| | | | | | | | | Executive for
| | | Executive for
| |
| | | | | | | | | Good Reason
| | | Good Reason
| |
| | | | | | | | | without a
| | | with a
| |
| | | | | | | | | Change of
| | | Change of
| |
| | | | | | | | | Control
| | | Control
| |
Executive Payments and Benefits Upon Termination | | Death | | | Disability | | | Event(6) | | | Event | |
| |
| Michael A. Stivala | | | | | | | | | | | | | | | | |
| Cash Compensation(1) | | $ | 0 | (3) | | $ | 0 | (4) | | $ | 250,000 | | | $ | 618,750 | |
| Accelerated Vesting of Fiscal 2007 and 2008 LTIP-2 Awards(2) | | | N/A | | | | N/A | | | | N/A | | | | 170,198 | |
| Accelerated Vesting of Outstanding RUP Awards(5) | | | N/A | | | | 398,959 | | | | N/A | | | | 476,605 | |
| Medical Benefits | | | N/A | | | | N/A | | | | 11,796 | | | | N/A | |
280G TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
409A TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 398,959 | | | $ | 261,796 | | | $ | 1,265,553 | |
| | | | | | | | | | | | | | | | | |
| Steven C. Boyd | | | | | | | | | | | | | �� | | | |
| Cash Compensation(1) | | $ | 0 | (3) | | $ | 0 | (4) | | $ | 245,000 | | | $ | 588,000 | |
| Accelerated Vesting of Fiscal 2007 and 2008 LTIP-2 Awards(2) | | | N/A | | | | N/A | | | | N/A | | | | 189,196 | |
| Accelerated Vesting of Outstanding RUP Awards(5) | | | N/A | | | | 457,808 | | | | N/A | | | | 574,276 | |
| Medical Benefits | | | N/A | | | | N/A | | | | 10,464 | | | | N/A | |
280G TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
409A TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 457,808 | | | $ | 255,464 | | | $ | 1,351,472 | |
| | | | | | | | | | | | | | | | | |
| Michael M. Keating | | | | | | | | | | | | | | | | |
| Cash Compensation(1) | | $ | 0 | (3) | | $ | 0 | (4) | | $ | 220,000 | | | $ | 544,500 | |
| Accelerated Vesting of Fiscal 2007 and 2008 LTIP-2 Awards(2) | | | N/A | | | | N/A | | | | N/A | | | | 190,611 | |
| Accelerated Vesting of Outstanding RUP Awards(5) | | | N/A | | | | 75,117 | | | | N/A | | | | 191,585 | |
| Medical Benefits | | | N/A | | | | N/A | | | | 11,796 | | | | N/A | |
280G TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
409A TaxGross-up | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 75,117 | | | $ | 231,796 | | | $ | 926,696 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Executive Payments and Benefits Upon Termination | | Death | | | Disability | | | Involuntary Termination Without Cause by Suburban or by the Executive for Good Reason without a Change of Control Event | | | Involuntary Termination Without Cause by Suburban or by the Executive for Good Reason with a Change of Control Event | |
| | | | | | | | | | | | | |
Michael J. Dunn, Jr. | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | $ | -0- | | | $ | 990,000 | | | $ | 990,000 | | | $ | 1,485,000 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 1,103,213 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 1,107,774 | | | | 1,107,774 | | | | 1,107,774 | | | | 1,107,774 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| Total | | $ | 1,107,774 | | | $ | 2,097,774 | | | $ | 2,097,774 | | | $ | 3,695,987 | |
| | | | | | | | | | | | | |
Michael A. Stivala | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | $ | -0- | | | $ | -0- | | | $ | 425,000 | | | $ | 1,275,000 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 527,025 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 2,242,523 | | | | 949,685 | | | | N/A | | | | 2,242,523 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | 18,853 | | | | N/A | |
| Total | | $ | 2,242,523 | | | $ | 949,685 | | | $ | 443,853 | | | $ | 4,044,548 | |
| | | | | | | | | | | | | |
Michael A. Kuglin | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | $ | -0- | | | $ | -0- | | | $ | 265,000 | | | $ | 675,750 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 340,110 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 1,367,785 | | | | 650,871 | | | | N/A | | | | 1,367,785 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | 16,917 | | | | N/A | |
| Total | | $ | 1,367,785 | | | $ | 650,871 | | | $ | 281,917 | | | $ | 2,383,645 | |
| | | | | | | | | | | | | |
Mark Wienberg | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | | $ -0- | | | $ | -0- | | | | $ 325,000 | | | | $ 877,500 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 487,838 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 1,713,552 | | | | 949,685 | | | | N/A | | | | 1,713,552 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | 19,008 | | | | N/A | |
Total | | | $ 1,713,552 | | | | $ 949,685 | | | | $ 344,008 | | | | $ 3,078,890 | |
| | | | | | | | | | | | | | | | | |
Steven C. Boyd | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | | $ -0- | | | | $ -0- | | | | $ 315,000 | | | | $ 850,500 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 512,031 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 1,713,552 | | | | 949,685 | | | | N/A | | | | 1,713,552 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | 18,654 | | | | N/A | |
Total | | | $ 1,713,552 | | | | $ 949,685 | | | | $ 333,654 | | | | $ 3,076,083 | |
| | | | | | | | | | | | | | | | | |
Douglas T. Brinkworth | | | | | | | | | | | | | | | | |
Cash Compensation(1) (2) (3) (4) | | | $ -0- | | | | $ -0- | | | | $ 300,000 | | | | $ 810,000 | |
Accelerated Vesting of Fiscal 2014, 2013, and 2012 LTIP Awards(5) | | | N/A | | | | N/A | | | | N/A | | | | 472,775 | |
Accelerated Vesting of Outstanding RUP Awards(6) | | | 1,713,552 | | | | 949,685 | | | | N/A | | | | 1,713,552 | |
Medical Benefits(3) | | | N/A | | | | N/A | | | | 18,706 | | | | N/A | |
Total | | | $ 1,713,552 | | | | $ 949,685 | | | | $ 318,706 | | | | $ 2,996,327 | |
| | | | | | | | | | | | | | | | | |
| | |
| (1) | | In the event of a change of control followed by a termination without cause or by a resignation with good reason, each of the named executive officers without employment agreements will receive a lump sum payment equal to 78 weeks of base pay plus a sum equal to their annual target cash bonus divided by 52 and multiplied by 78 in accordance with the terms of the Severance Protection Plan. For more information on the Severance Protection Plan, refer to the subheading “Change of Control” in the “Compensation Discussion and Analysis.” |
41
| | |
(2) | | In the event of a change of control, all LTIP-2 awards will vest immediately regardless of whether termination immediately follows. If a change of control event occurs, the calculation of the LTIP-2 payment will be made as if our total return to Common Unitholders was higher than that provided by any of the other members of the peer group to their unitholders. For more information, refer to the subheading “2003 Long-Term Incentive Plan” in the “Compensation Discussion and Analysis.” |
|
| | In the event of death, the inability to continue employment due to permanent disability, or a termination without cause or a good reason resignation unconnected to a change of control event, awards will vest in accordance with the normal vesting schedule and will be subject to the same requirements as awards held by individuals still employed by Suburban and shall be subject to the same risks as awards held by all other participants. |
|
(3) | | In the event of death, the named executive officer’s estate is entitled to a payment equal to the decedent’s earned but unpaid salary and pro-rata cash bonus. |
| |
(4)(2) | | In the event of disability, the named executive officer is entitled to a payment equal to his earned but unpaid salary and pro-rata cash bonus. |
|
(5) | | The RUP document makes no provisions Because the terms of our letter agreement with Mr. Dunn became effective on September 29, 2012, for the vestingpurposes of grants held by recipients who die prior to the completion of the vesting schedule. If a recipient of a RUP grant becomes permanently disabled, only those grantsthis table it has been assumed that have been held for at least one year on the date that the employee’s employment is terminated as a result of his or her permanent disability shall immediately vest; all grants held by the recipient for less than one year shall be forfeited by the recipient. Becauseif Mr. Stivala, Mr. Boyd and Mr. Keating each received a unit grant during fiscal 2008, if any or all of the three had become permanentlyDunn became disabled on September 27, 2008,2014, the following quantitiesprovisions of unvested restricted unitsour letter agreement would have vested: Stivala, 11,674; Boyd, 13,396; Keating, 2,198govern. For more information on Mr. Dunn’s letter agreement, refer to the subheading “Letter Agreement of Mr. Dunn” in the preceding “Compensation Discussion and the following quantities would have been forfeited: Stivala, 2,272; Boyd, 3,408; Keating, 3,408.Analysis.” |
| |
| (3) | | Under circumstances unrelated to a change of control, if a RUP grant recipient’s employment is terminated without cause or he or she resigns for good reason, any RUP grants held by such recipient shall be forfeited. |
|
| | In the event of a change of control, as defined in the RUP document, all unvested RUP grants shall vest immediately on the date the change of control is consummated, regardless of the holding period and regardless of whether the recipient’s employment is terminated. |
|
(6) | | Any severance benefits, unrelated to a change of control event, payable to these officers would be determined by the Committee on acase-by-case basis in accordance with prior treatment of other similarly situated executives and may, as a result, differ from this hypothetical presentation. For purposes of this table, we have assumed that each of these named executive officers would, upon termination of employment without cause or for resignation for good reason, receive accrued salary and benefits through the date of termination plus one times annual salary paid in the form of salary continuation, and continued participation, at active employee rates, in Suburban’sour health insurance plans for one year. The terms of our letter agreement with Mr. Dunn became effective on September 29, 2012; therefore, Mr. Dunn’s severance benefits for a termination of employment without cause or resignation for good reason have been calculated in accordance with this agreement. For more information on Mr. Dunn’s letter agreement, refer to the subheading “Letter Agreement of Mr. Dunn” in the preceding “Compensation Discussion and Analysis.” |
| (4) | In the event of a change of control followed by a termination without cause or by a resignation with good reason, each of the named executive officers will receive 78 weeks of base pay plus a sum equal to their annual target cash bonus divided by 52 and multiplied by 78 in accordance with the terms of the Severance Protection Plan. For more information on the Severance Protection Plan, refer to the subheading “Change of Control” in the preceding “Compensation Discussion and Analysis.” |
| (5) | In the event of a change of control, all awards under the LTIP will vest immediately regardless of whether termination immediately follows. If a change of control event occurs, the pre-fiscal 2014 award payments will be equal to 125% of the cash value of a participant’s unvested LTIP units plus a sum equal to 125% of a participant’s unvested LTIP units multiplied by an amount equal to the cumulative, per-Common Unit distribution from the beginning of an unvested award’s three-year measurement period through the date on which the change of control occurred. The post-fiscal 2013 award payments will be equal to 150% of the cash value of a participant’s unvested LTIP units plus a sum equal to 150% of a participant’s unvested LTIP units multiplied by an amount equal to the cumulative, per-Common Unit distribution from the beginning of an unvested award’s three-year measurement period through the date on which the change of control occurred If a change of control event occurred on September 27, 2014, the fiscal 2014, fiscal 2013, and fiscal 2012 awards would have been subject to this treatment. For more information, refer to the subheading “Long-Term Incentive Plan” in the preceding “Compensation Discussion and Analysis.” |
In the event of death, the inability to continue employment due to permanent disability, or a termination without cause or a good reason resignation unconnected to a change of control event, awards will vest in accordance with the normal vesting schedule and will be subject to the same requirements as awards held by individuals still employed by us and will be subject to the same risks as awards held by all other participants.
| (6) | Effective November 13, 2012, the Committee amended the RUP document to provide for the vesting of unvested awards held by a participant at the time of his or her death. If a recipient of a RUP award becomes permanently disabled, only those awards that have been held for at least one year on the date that the employee’s employment is terminated as a result of his or her permanent disability will immediately vest; all awards held by the recipient for less than one year will be forfeited by the recipient. If any or all of the five named executive officers had become permanently disabled on September 28, 2013, the following quantities of unvested restricted units would have vested: Dunn, 25,009; Stivala, 21,440; Kuglin, 14,694; Wienberg, 21,440; Boyd, 21,440; and Brinkworth, 21,440. The following quantities would have been forfeited: Stivala, 29,187; Kuglin, 16,185; Wienberg, 17,245; Boyd, 17,245; and Brinkworth, 17,245. Because all of Mr. Dunn’s unvested awards are subject to the plan’s retirement provisions, if Mr. Dunn became permanently disabled on the last day of the fiscal year, none of his unvested awards would have been forfeited. |
All of Mr. Dunn’s unvested awards are subject to the plan’s retirement provisions.
Under circumstances unrelated to a change of control, if a RUP award recipient’s employment is terminated without cause or he or she resigns for good reason, any RUP awards held by such recipient will be forfeited.
In the event of a change of control, as defined in the RUP document, all unvested RUP awards will vest immediately on the date the change of control is consummated, regardless of the holding period and regardless of whether the recipient’s employment is terminated.
SUPERVISORS’ COMPENSATION
The following table sets forth the compensation of the non-employee members of the Board of Supervisors of Suburban during fiscal 2008.
| | | | | | | | | | | | | |
| | | Fees Earned
| | | Unit
| | | | |
| | | or Paid in Cash
| | | Awards
| | | Total
| |
Supervisor | | ($)(1) | | | ($)(2) | | | ($) | |
| |
| John D. Collins | | | 75,000 | | | | 49,861 | | | | 124,861 | |
| Harold R. Logan, Jr. | | | 100,000 | | | | — | | | | 100,000 | |
| Dudley C. Mecum | | | 75,000 | | | | — | | | | 75,000 | |
| John Hoyt Stookey | | | 75,000 | | | | — | | | | 75,000 | |
| Jane Swift | | | 75,000 | | | | 49,861 | | | | 124,861 | |
| | | | | | | | | | |
| Supervisor | | Fees Earned
or Paid in Cash ($)(1) | | | Unit Awards
($)(2) | | Total ($) | |
| | | | | | | | | | | |
Harold R. Logan, Jr. | | | $115,000 | | | N/A | | | $115,000 | |
Lawrence C. Caldwell | | | $ 85,000 | | | N/A | | | $ 85,000 | |
Matthew J. Chanin | | | $ 85,000 | | | N/A | | | $ 85,000 | |
John D. Collins | | | $ 85,000 | | | N/A | | | $ 85,000 | |
Dudley C. Mecum | | | $ 85,000 | | | N/A | | | $ 85,000 | |
John Hoyt Stookey | | | $ 85,000 | | | N/A | | | $ 85,000 | |
Jane Swift | | | $ 85,000 | | | N/A | | | $ 85,000 | |
| | |
| (1) | | IncludesThis includes amounts earned for fiscal 2008,2014, including quarterly retainer installments for the fourth quarter of fiscal 20082014 that were paid in the first quarter of fiscal 2009. DoesNovember 2014. It does not include amounts paid in fiscal 20082014 for fiscal 20072013 quarterly retainer installments. |
42
| | |
| (2) | | RepresentsDuring fiscal 2014, the dollar amount charged to earnings for financial statement reporting purposes during fiscal 2008 pursuant to SFAS 123R for restricted unitCompensation Committee did not make any additional grants of 5,496 awardedunvested restricted units to both Mr. Collins and Ms. Swift on April 25, 2007. All grants were made in accordance with the provisionsmembers of our 2000 Restricted Unit Plan and vest accordingly. The averageBoard of the high and low sales price, discounted for projected distributions during the vesting period, was used to calculate the value of the restricted unit grants for purposes of amortizing compensation expense under SFAS 123R. Because Messrs. Logan, Mecum and Stookey have met the plan’s retirement provisions, all expense for their unvested grants was previously recognized.Supervisors. As of September 27, 2008, each non-employee member of the Board of Supervisors held the following quantities of unvested restricted unit grants: Mr.2014, Messrs. Logan, Collins, 5,496 units; Mr. Logan, 9,375 units; Mr. Mecum, 9,375 units; Mr. Stookey, 9,375 units; and Ms. Swift 5,496each held awards of 7,800 unvested restricted units and Messrs. Caldwell and Chanin each held awards of 6,023 unvested restricted units. |
|
| | Note: The columns for reporting option awards, non-equity incentive plan compensation, changes in pension value and non-qualified deferred compensation plan earnings and all other forms of compensation were omitted from the Supervisor’s Compensation Table because Suburban does not provide these forms of compensation to its non-employee supervisors. |
Note: The columns for reporting option awards, non-equity incentive plan compensation, changes in pension value and non-qualified deferred compensation plan earnings and all other forms of compensation were omitted from the Supervisor’s Compensation Table because Suburban does not provide these forms of compensation to its non-employee supervisors.
Fees and Benefit Plans for Non-Employee Supervisors
Annual Cash Retainer Fees.Fees. As the Chairman of the Board, of Supervisors, Mr. Logan receivesreceived an annual retainer of $100,000,$115,000 in fiscal 2014, payable in quarterly installments of $25,000$28,750 each. Each of the other supervisors receivesnon-employee Supervisors received an annual cash retainer of $75,000,$85,000 in fiscal 2014, payable in quarterly installments of $18,750$21,250 each.
Meeting Fees. The members of our Board of Supervisors receive no additional remuneration for attendance at regularly scheduled meetings of the Board or its Committees, other than reimbursement of reasonable expenses incurred in connection with such attendance.
Restricted Unit Plan.Plans. Each non-employee supervisorSupervisor participates in the 2000 Restricted Unit Plan.Plans. All grantsawards vest in accordance with the provisions of the plan document (see the “Compensation Discussion and Analysis” section titled “2000 Restricted“Restricted Unit Plan”Plans” above for a description of the vesting schedule). Upon vesting, all grantsawards are settled by issuing Common Units. During fiscal 2004,As of September 27, 2014, Messrs. Logan, Collins, Mecum, and Stookey, were awarded unvested restricted unit plan grants of 8,500 units each; during fiscal 2007, each of them received an additional unvested grant of 3,000 units. Upon commencement of their terms as supervisors in fiscal 2007, Mr. Collins and Ms. Swift each receivedheld awards of 7,800 unvested restricted units and Messrs. Caldwell and Chanin each held awards of 6,023 unvested restricted units. At its November 11, 2014 meeting, the Compensation Committee established a grantpolicy of 5,496granting a retiring Supervisor an award of 1,000 restricted units, in recognition of his or her services to Suburban. Pursuant to this policy, the Compensation Committee granted Mr. Mecum, who had previously informed the Board that he did not intend to run for re-election at the Meeting, an award of 1,000 unvested restricted units.
Additional Supervisor Compensation. Non-employee supervisorsSupervisors receive no other forms of remuneration from us. The only perquisite provided to the members of the Board of Supervisors is the ability to purchase propane at the same discounted rate that we offer propane to our employees, the value of which was less than $10,000 in fiscal 20082014 for each supervisor.
Supervisor.Compensation Committee Interlocks and Insider Participation.None.
Certain Relationships and Related Person Transactions. None. See also “Audit Committee” above.
43
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of May 22, 2009March 1, 2015 regarding the beneficial ownership of Common Units by (a) each person or group known to Suburban, based upon its review of filings under Section 13(d) or (g) of the Exchange Act, to own more than 5% of the outstanding Common Units; (b) each member of the Board of Supervisors,Supervisors; (c) each executive officer named in the Summary Compensation Table above,above; and (d) all members of the Board of Supervisors and executive officers as a group. Based upon filings under Section 13(d) or (g) under the Exchange Act, Suburban does not know of any person or group who beneficially owns more than 5% of the outstanding Common Units. Except as set forth in the notes to the table, each individual or entity has sole voting and investment power over the Common Units reported.
| | | | | | | | | |
| | | Amount and Nature of
| | | Percent of
| |
Name of Beneficial Owner | | Beneficial Ownership | | | Class | |
| |
| Mark A. Alexander(a) | | | 1,289,912 | | | | 3.9 | % |
| Michael J. Dunn, Jr.(b) | | | 208,947 | | | | * | |
| Michael A. Stivala(c) | | | 8,962 | | | | * | |
| Steven C. Boyd(d) | | | 29,733 | | | | * | |
| Michael M. Keating(e) | | | 98,500 | | | | * | |
| John Hoyt Stookey(f)(g) | | | 14,072 | | | | * | |
| Harold R. Logan, Jr.(f) | | | 12,794 | | | | * | |
| Dudley C. Mecum(f) | | | 9,884 | | | | * | |
| John D. Collins(h) | | | 12,450 | | | | * | |
| Jane Swift(h) | | | -0- | | | | * | |
| All Members of the Board of Supervisors and Executive Officers as a Group (17 persons)(i) | | | 1,806,678 | | | | 5.5 | % |
| | | | | | | | | | |
Name of Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percent
of Class (1) |
| | |
Neuberger Berman Group LLC (a) | | | | 8,131,019 | | | | | 13.45% | |
Michael J. Dunn, Jr. (b) | | | | 138,897 | | | | | * | |
Michael A. Stivala (c) | | | | 30,281 | | | | | * | |
Michael A. Kuglin (d) | | | | 6,865 | | | | | * | |
Mark Wienberg (e) | | | | 9,156 | | | | | * | |
Steven C. Boyd (e) | | | | 27,779 | | | | | * | |
Douglas T. Brinkworth (e) | | | | 23,324 | | | | | * | |
| | |
John Hoyt Stookey (f) | | | | 11,166 | | | | | * | |
Harold R. Logan, Jr.(f) | | | | 12,607 | | | | | * | |
Jane Swift (f) | | | | 1,800 | | | | | * | |
John D. Collins (f) | | | | 19,046 | | | | | * | |
Dudley C. Mecum (g) | | | | 20,734 | | | | | * | |
Lawrence C. Caldwell (h) | | | | 15,963 | | | | | * | |
Matthew J. Chanin (i) | | | | 5,000 | | | | | * | |
| | |
All Members of the Board of Supervisors and Executive Officers, as a Group (19 persons) (j) | | | | 385,502 | | | | | * | |
(1) Based upon 60,459,026 Common Units outstanding on March 1, 2015.
| (a) | Based upon a Schedule 13G/A dated February 11, 2015 filed by Neuberger Berman Group LLC and Neuberger Berman LLC, which indicates that as of December 31, 2014 they had the shared power to vote or direct the vote of 7,832,713 Common Units and the shared power to dispose or direct the disposition of 8,131,019 Common Units. The Schedule 13G indicates that Neuberger Berman Group LLC may be deemed to be a beneficial owner of these Common Units for purposes of Rule 13d-3 because certain affiliates have shared power to retain or dispose of Common Units belonging to many unrelated clients. We make no representation as to the accuracy or completeness of the information reported. The address of Neuberger Berman Group LLC is 605 Third Avenue, New York NY 10158. |
| (b) | Includes 25,009 unvested restricted units which will vest on March 28, 2015. |
| (c) | Includes 784 Common Units held by the General Partner, of which Mr. AlexanderStivala is the sole member. Includes 1,289,128 Common Unitsmember and 7,962 unvested restricted units which are held in a brokerage account, where there is a possibility that such Common Units could be pledged as security. |
|
(b) | | will vest on April 1, 2015. Excludes 29,53335,390 unvested restricted units, none of which will vest in the60-day period following May 22, 2009. Restricted unit grantsMarch 1, 2015. |
| (d) | Includes 3,981 unvested restricted units which will vest 25%, 25% and 50%, respectively, on the third, fourth and fifth anniversaries of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan. |
|
(c) | | April 1, 2015. Excludes 16,69421,814 unvested restricted units, none of which will vest in the60-day period following May 22, 2009. Restricted unit grantsMarch 1, 2015. |
| (e) | Includes 3,981 unvested restricted units which will vest 25%, 25% and 50%, respectively, on the third, fourth and fifth anniversaries of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan. |
|
(d) | | April 1, 2015. Excludes 16,87427,429 unvested restricted units, none of which will vest in the60-day period following MayMarch 1, 2015. |
| (f) | Includes 1,800 unvested restricted units which will vest on April 22, 2009. Restricted unit grants vest 25%, 25% and 50%, respectively, on the third, fourth and fifth anniversaries of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan. Includes 29,733 Common Units which are held in a brokerage account, where there is a possibility that such Common Units could be pledged as security. |
|
(e) | | 2015. Excludes 10,4246,000 unvested restricted units, none of which will vest in the60-day period following MayMarch 1, 2015. |
| (g) | Includes 1,800 unvested restricted units which will vest on April 22, 2009. Restricted unit grants vest 25%, 25% and 50%, respectively, on the third, fourth and fifth anniversaries of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan. |
|
(f) | | 2015. Excludes 7,2507,000 unvested restricted units, none of which will vest in the60-day period following May 22, 2009. Restricted unit grants vest 25%, 25% and 50%, respectively, on the third, fourth and fifth anniversaries of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan.March 1, 2015. |
|
(g) | | Mr. Stookey reports that his units are pledged as security for a loan. |
|
| (h) | | Includes 10,092 Common Units held by charitable organizations over which Mr. Caldwell has shared investment and voting power. Excludes 5,4966,023 unvested restricted units, none of which will vest in the60-day period following May 22, 2009. Restricted unit grantsMarch 1, 2015. |
| (i) | Excludes 6,023 unvested restricted units, none of which will vest 25%, 25% and 50%, respectively, onin the third, fourth and fifth anniversaries60-day period following March 1, 2015. |
| (j) | Inclusive of the date of grant and 100% upon a “change in control”, as defined in Suburban’s 2000 Restricted Unit Plan. |
44
| | |
(i) | | Inclusive of theunvested restricted units referred to in footnotes (b), (c), (d), (e), (f), (g), (h), and (g)(i) above, the reported number of units excludes 182,479includes 67,481 unvested restricted units 1,665that will vest on the following dates: 25,009 on March 28, 2015; 32,297 on April 1, 2015; 9,000 on April 22, 2015; and 1,175 on April 28, 2015, and excludes 294,401 unvested restricted units, none of which will vest in the60-day period following May 22, 2009, owned by certain executive officers, whose restricted units vest on the same basis as described in footnotes (b), (c), (e), (f) and (g) above. Includes 1,805,894 Common Units which are held in a brokerage account, where there is a possibility that such Common Units could be pledged as security (inclusive of the units referred to in footnotes (a) and (d) above) and 14,072 Common Units pledged as security for a loan referred to in footnote (g) above.March 1, 2015. |
APPROVALRATIFICATION OF 2009 RESTRICTED UNIT PLAN
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR 2015 FISCAL YEAR
(Proposal No. 2 on the Proxy Card)
Our Board’s Audit Committee has appointed PricewaterhouseCoopers LLP, which we refer to as “PwC,” to serve as our independent registered public accounting firm and to audit our consolidated financial statements and the effectiveness of our internal control over financial reporting for our 2015 fiscal year. Representatives of PwC are expected to be present at the Meeting and will be given an opportunity to make a statement if they so desire. They are expected to be available to respond to appropriate questions.
Ratification of our independent registered public accounting firm by our Unitholders is not required by the MLP Agreement or otherwise. In the event that our Unitholders fail to ratify the appointment of PwC, the Audit Committee will reconsider whether or not to retain PwC, but may ultimately determine to retain PwC as our independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the 2015 fiscal year, or for subsequent fiscal years, if the Audit Committee determines that such a change would be in our best interests.
Because the Board values our Unitholders’ views on our independent registered public accounting firm, it has determined to periodically submit the selection of that firm to our Unitholders for ratification. The MLP Agreement provides for Tri-Annual Meetings of our Unitholders (once every 3 years), and the Board has determined that period is the appropriate one for soliciting the views of our Unitholders regarding our independent registered public accounting firm. At this time, however, we are asking our Unitholders to ratify the selection of PwC as our independent registered public accounting firm only for our fiscal year ending September 26, 2015.
Principal Accountant Fees and Services
The following istable sets forth the aggregate fees for services related to fiscal years 2014 and 2013 provided to us by PwC.
| | | | | | | | | | |
| | | Fiscal
2014 | | Fiscal
2013 |
| | |
Audit Fees (a) | | | $ | 2,440,000 | | | | $ | 2,378,400 | |
Tax Fees (b) | | | | 1,064,200 | | | | | 1,399,000 | |
All Other Fees (c) | | | | 1,800 | | | | | 1,800 | |
| | | | | | | | | | |
| | | $ | 3,506,000 | | | | $ | 3,779,200 | |
| | | | | | | | | | |
| (a) | Audit Fees consist of professional services rendered for the integrated audit of our annual consolidated financial statements and our internal control over financial reporting, including reviews of our quarterly financial statements, as well as the issuance of consents in connection with other filings made with the Securities and Exchange Commission. |
| (b) | Tax Fees consist of fees for professional services related to tax reporting, tax compliance and transaction services assistance. |
| (c) | All Other Fees represent fees for the purchase of a license to an accounting research software tool. |
The Audit Committee has adopted a summaryformal policy concerning the approval of audit and non-audit services to be provided to us by PwC. The policy requires that all services PwC may provide to us, including audit
services and permitted audit-related and non-audit services, be pre-approved by the Audit Committee. The Audit Committee pre-approved all audit and non-audit services provided by PwC during fiscal 2014 and fiscal 2013.
Vote Required and Recommendation of the material featuresBoard of Supervisors
The affirmative vote of a majority of Common Units entitled to vote at the Suburban Propane Partners, L.P.Meeting and present, whether in person or by proxy, is required for the approval of this Accountant Ratification Proposal. The Board of Supervisors unanimously recommends a voteFORthis Accountant Ratification Proposal.
APPROVAL OF AN AMENDMENT TO THE 2009 RESTRICTED
UNIT PLAN INCREASING BY AN ADDITIONAL 1,200,000 COMMON
UNITS THE NUMBER OF COMMON UNITS AUTHORIZED FOR
AWARDS UNDER THE PLAN
(Proposal No. 3 on the Proxy Card)
Our Board of Supervisors is recommending the approval of an amendment to the 2009 Restricted Unit Plan, (the “Plan”), effectivewhich we hereafter refer to as the “Plan,” that provides for increasing by an additional 1,200,000 Common Units (for a total of August 1, 2009 (subject2,400,000 Common Units) the number of Common Units authorized for issuance pursuant to restricted unit awards granted under the Plan. Capitalized terms not defined herein shall have the respective meanings assigned to such terms in the Plan.
Reasons for the Proposed Amendment
On January 21, 2015, on the recommendation of its Compensation Committee, our Board of Supervisors adopted, subject to the approval of the Unitholders, atan amendment to the Meeting), andPlan, which we hereafter refer to as the awards“Amendment,” to increase the number of Common Units that may be granted from timeissued under the Plan. Currently, the Plan authorizes 1,200,000 Common Units for issuance as restricted unit awards, out of which, as of March 16, 2015, 231,647 were issued and outstanding fully vested Common Units and 703,002 were subject to timeoutstanding unvested restricted unit awards. As of March 16, 2015, only 265,351 Common Units remained available for the granting of future awards under the Plan. The Compensation Committeeproposed Amendment increases the number of Common Units authorized for issuance under the Plan by 1,200,000 (which represents 1.98% of the 60,459,026 Common Units issued and outstanding as of March 16, 2015).
During fiscal years 2015, 2014 and 2013, on average, 203,870 (or 0.3% of the total outstanding Common Units as of March 16, 2015) unvested restricted units were awarded each year under the Plan. Based on this current average annual run rate of restricted unit awards, the remaining available Common Units authorized under the Plan will only provide us with approximately one additional year of awards with which to reward and retain our key managers, other employees, executive officers and Supervisors (representing a total pool of potentially eligible recipients in excess of 300 individuals). This ability to grant restricted unit awards is a significant component of our compensation philosophy. Although the reasons for granting awards can vary, the primary objective of granting a restricted unit award to a recipient is to retain the services of the recipient over the vesting period while, at the same time, providing the type of motivation that further aligns the long-term interests of the recipient with the long-term interests of our Unitholders.
The Plan was originally approved by our Unitholders at their 2009 Tri-Annual Meeting and terminates by its terms on July 31, 2019. Since the original establishment of the Plan, we have significantly increased our size as a result of the August 1, 2012 acquisition of Inergy Propane, and we have successfully transitioned our senior leadership under a management succession plan approved by our Board of Supervisors. Based on current grant practices, it is anticipated that approval of an additional 1,200,000 Common Units for future issuance under the Plan will provide a sufficient number of Common Units authorized for future awards under the Plan, for the remaining duration of the Plan, for both continued grants to our executives, key employees and Supervisors and incremental grants of restricted unit awards to attract key employees or executives in support of our growth strategy.
Our Board of Supervisors has unanimously approvedbelieves that the adoption of the Amendment will, among other things, enhance Suburban’s long-term value by offering opportunities to our current and future executive officers, key employees and Supervisors to acquire a proprietary interest in Suburban and to link their interests and efforts to the long-term interests of our Unitholders. Our Board of Supervisors believes that prior restricted unit awards under the Plan and recommends that Unitholders voteFORthe Plan.
Please carefully review the below summary of the Plan so that you understand the key terms of the Plan, including the restrictions that apply to awards granted pursuanthave contributed substantially to the Plan and the resulting Common Units. The summarysuccessful achievement of the Plan is qualified in its entirety by the full text of the Plan, which is attached hereto as Appendix A, and which we encourage you to read.
these objectives.
Summary of the Material Terms of the 2009 Restricted Unit Plan
(As Amended pursuant to the Amendment Subject to Unitholder Approval)
The following description of the Plan, as amended pursuant to the Amendment, is only a summary and is qualified in its entirety by reference to the Plan, as amended pursuant to the Amendment, a copy of which is included in this proxy statement as Appendix A.
General Plan Provisions
Purpose of the Plan. The purpose of the Plan is to strengthen Suburban by providing an incentive to certain selected employeeskey managers, executive officers and Supervisors of Suburban and its affiliates and thereby encouraging them to devote their abilities and industry to the success of Suburban’s business enterprise in such a manner as to maximize Suburban’s value.
Administration of the Plan. The Plan is generally administered by the Compensation Committee, (the “Committee”)which we hereafter refer to as the “Committee,” of the Board of Supervisors, which currently consists of fivethree Supervisors, none of whom are officers or employees of Suburban. The Committee hasSubject to the terms and conditions of the Plan, the Committee’s authority and responsibilityunder the Plan includes the power to:
| | |
| | • — | | select award recipients; |
|
| | • — | | set the terms and conditions of awards; |
|
| | • — | | interpret the terms and the intent of the Plan and any award agreement or other agreement or document ancillary to or in connection withawards granted under the Plan; |
|
| | • — | | adjust awards to reflect certain changes in the Common Units, such as a change in capitalization; and |
|
| | • — | adopt | generally, exercise such rules, forms, instruments,powers and guidelines for administering the Planperform such acts as the Committee deems necessary or proper and amend, suspend and terminate awards, subjectadvisable to promote the best interests of Suburban with respect to the terms of the Plan. |
TheAll decisions and determinations and interpretations ofby the Committee are final, binding and bindingconclusive upon Plan participants,grantees, Suburban and all other interested individuals. The Committee may delegate to oneany individual or morecommittee of individuals the responsibility to carry out any of its members,rights and duties with respect to one or more officers of Suburban or its affiliates, or to one or more agents or advisors such administrative duties or powers it may deem advisable.
the Plan.Eligibility to Participate in the Plan. Any employee or Supervisor of Suburban is eligible to be designated a participant.grantee. An individual becomes a ““participantgrantee” upon the grant of an award. Which employees or Supervisors are granted awards, and the timing, terms and provisions, and number of restricted Common Units subject to an award, are all at the discretion of the Committee. All awards are evidenced by a written award agreement entered into by Suburban and the participantgrantee setting forth the terms and provisions applicable to an award granted under the Plan.
45
Term of the Plan. Unless earlier terminated, the Plan will be effective for 10 years following theits effective date, or until July 31, 2019. Upon expiration of the term of the Plan, no additional awards may be granted. Previously granted awards will remain outstanding in accordance with their terms and conditions.
Amendment of the Plan. Under the terms of the Plan, the Plan may be modified, amended, suspended or terminated prior to the expiration of its term by the Committee at any time, subject to certain limitations, and awards granted under the Plan may be modified, amended, suspended or terminated by the Committee at any time. However, no such action may, without an award holder’s writtena grantee’s consent, impair or adversely affect in any material way any previously granted award. However,award nor deprive any grantee of any Common Units already acquired through or as a result of the Plan. Further, no amendment of the Plan, such as the Amendment, that would require Unitholder approval under applicable law, rule or regulation may become effective without such Unitholder approval.
Description of Restricted Unit Awards. The Plan provides for the grant of restricted Common Units of Suburban. No Common Units are actually issued on the grant of aan award of restricted unit award;Common Units; rather, a restricted unitCommon Unit award is the right to receive a specified number of Common Units upon vesting. The number of unitsCommon Units credited is recorded in a bookkeeping account.
Common Units Authorized Under the Plan. Subject to adjustment and the unit counting rules under the Plan, and subject to possible amendment of the Plan, as described below,above, the total number of Common Units that may be granted under the Plan is 1,200,000.2,400,000. The number of awards granted, and the number of restricted unitsCommon Units subject to each award, are at the discretion of the Committee.
Vesting Of Restricted Unit Awards. To be eligible to receive the benefit of a restricted unit award, the participantgrantee must remain in the service of Suburban (or its affiliates) throughout the applicable vesting period.period, except in circumstances set forth below. Vesting occurs upon continuation of service for a period of time, as specified in the award agreement. Unless otherwise set forth in the award agreement, restricted unit awards granted prior to August 6, 2013 vest and become non-forfeitable at a rate of 25% on each of the third anniversaryand fourth anniversaries of the grant date of the applicable award, an additional 25% on the fourth anniversary, and a final 50% on the fifth anniversary of the dategrant date. Unless otherwise set forth in the award agreement, restricted unit awards granted upon or subsequent to August 6, 2013 vest one third on each of the first three anniversaries of the award grant date. In either case, Suburban will generally distribute the applicable award, provided thatnumber of fully vested Common Units to the participant is employedgrantee on suchthe applicable vesting date.
Unless the Committee provides otherwise in the applicable award agreement, or unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or stock exchange on which the Common Units are listed, in the event of a “changeChange of controlControl” of Suburban, (as defined in the Plan), the Plan provides that awards will fully vest upon the consummation of the changeChange of controlControl and the applicable number of fully vested Common Units will be distributed or paid to the participant.
grantee on the date of the Change of Control.Vesting Example. 100 restricted unitsCommon Units are granted on May 2, 20092015 with the following vesting schedule:
| | | | |
% of Grant Vested | | Vesting Date | |
|
25%33.3% | | | May 2, 2012 | 2016 |
50%33.3% | | | May 2, 2013 | 2017 |
100%33.3% | | | May 2, 2014 | 2018 |
On May 2, 2012, 252016, 34 (after rounding up) of the original Common Units are no longer “restricted” and will be distributed to the participant.grantee. On May 2, 2013,2017, an additional 2534 Common Units are no longer “restricted” and will be distributed to the participant.grantee. And on May 2, 2014,2018, the remaining 5032 Common Units are no longer “restricted” and will be distributed to the participant.
grantee.Rights of Common Units. Participants Grantees will not have the rights of a Unitholder, including the rights to vote the units and to receive distributions, until the Common Units have vested and a certificate representing the Common Units is issued. When restrictions on the restricted unit award lapse (i.e.(i.e.,the award vests), the participantgrantee becomes the owner of unrestricted Common Units and Suburban will deliver a certificate to the participantgrantee representing the number of vested Common Units.
Termination of Service Before Vesting. Unless the award agreement provides otherwise, upon termination of the participant’sgrantee’s service with Suburban and its affiliates, the participantgrantee will forfeit the unvested portion of his restricted unit award, except (i) in the event that service is terminated without cause (as defined inCause or the Plan) or the
46
participantgrantee terminates service for
good reason (as defined in the Plan),Good Reason, in each case within six months prior to a
changeChange of
control (as defined in the Plan),Control, the unvested portion of the award will not be forfeited and it will vest
and the applicable number of fully vested Common Units will be distributed upon the
changeChange of
control (subject to any legal restrictions on such vesting);Control; (ii) if service is terminated on account of
disability,Disability, any award that has been held for at least one year will vest upon the
six month anniversary of such termination and the applicable number of fully vested Common Units will be distributed on the dayfollowing the vesting date; (iii) if service terminates as a result of the grantee’s death, any award held by the grantee on the date of death will vest upon the participant’s disability;six month anniversary of such termination and (iii)the applicable number of fully vested Common Units will be distributed to the grantee’s estate on the day following the vesting date; and (iv) if service is terminated on account of retirement (as defined in the Plan and if the participant has met the Plan’s retirement criteria),grantee’s Retirement, any award that has been held for at least six months will vest six months after the effective date of the participant’s retirement.
grantee’s retirement and the applicable number of fully vested Common Units will be distributed on the day following the vesting date.Disposition of Common Units
Sale of Common Units Acquired Under the Plan. Subject to the limitations in the federal securities laws, a participantgrantee may generally sell vested Common Units acquired under the Plan upon vesting at any time after vesting without restriction.
U.S. Federal Income Tax Consequences
The following is a general description of the United StatesU.S. federal income tax consequences applicable to a participant’s restricted unit awardawards granted under the Plan as applicable under the federal tax code currentlyInternal Revenue Code of 1986, as amended (the “Code”), regulations thereunder and current administrative rulings and court decisions, all of which are subject to change at any time, possibly with retroactive effect, and may vary in effect. Federal tax treatmentindividual circumstances. Subsequent changes in authorities may change shouldcause the tax code be amended.consequences to vary substantially from the consequences described below. State, local and foreign tax treatment, which is not discussed below, may vary from such federal income tax treatment. Please noteNo attempt has been made in the following discussion to comment on all U.S. federal income tax matters affecting a grantee, including with respect to any gift, estate or social security tax consequences that this summary is general in nature, that it may not apply to a participant’s particular situation,be applicable, and that Suburban is not in a position to assure a participantgrantee of any particular tax result.
Accordingly, each grantee should consult, and should depend on, his or her own tax advisor in analyzing the U.S. federal, state, local and foreign tax and other tax consequences that may be relevant to a grantee, in light of such grantee’s particular situation.U.S. Federal Income Tax Liability. Although participants For U.S. federal income tax purposes, although grantees will not recognize income on the date of a grant of a restricted unit award under the Plan, they will recognize income equal to the average of the high and low trading prices of Suburban’s Common Units that become vested and distributable on the vesting date. Upon issuance of vested Common Units to a grantee, the participants, the earnings attributablegrantee will be required to Suburban pass through to its partners. After vesting, the participant’sreport on his or her income tax return his or her share of Suburban’s taxable income, gains, losses and deductions without regard to whether Suburban makes cash distributions to him or lossher, and the grantee’s share of such items will be provided to the participantgrantee on an IRSSchedule K-1 (Partner’s (“Partner’s Share of Income, Deductions, Credits, etc.”).
Tax Basis in Suburban. A participant’sgrantee’s original tax basis in the Common Units is the average of the high and low trading prices of Suburban’s Common Units on the vesting date.date of such Common Units. If the participantgrantee continues to hold the units, this original tax basis will be adjusted as follows:
| | |
| | • — | | increased by the participant’sgrantee’s distributive share of partnership taxable income;income and any increase in the grantee’s share of nonrecourse liabilities; |
|
| | • — | | decreased by the participant’sgrantee’s distributive share of partnership losses;losses and any decrease in the grantee’s share of nonrecourse liabilities; and |
|
| | • — | | decreased by cash distributions (cash distributions from a partnership are characterized as a returngenerally will not be taxable to the grantee for U.S. federal income tax purposes to the extent of capital)the tax basis the Grantee has in his or her Common Units immediately before such cash distribution). |
Sale of Common Units. The total gain or loss is calculated as the difference between the participant’s sales proceedsgrantee’s amount realized and the participant’sgrantee’s adjusted tax basis in the Common Units. DueUnits sold. A grantee’s amount realized is measured by the sum of the cash and the fair market value of other property received plus the grantee’s
share of Suburban’s nonrecourse liabilities. Gain or loss recognized by a grantee on the sale or exchange of a Common Unit will generally be a capital gain or loss, and capital gain recognized on the sale of Common Units held for more than one year will generally be taxed at a more favorable rate. A portion of this gain or loss (which could be substantial), however, will be separately computed and will be classified as ordinary income or loss under Section 751 of the Code to the extent attributable to assets giving rise to depreciation recapture provisions, all or other unrealized receivables or to inventory items owned by Suburban. Ordinary income attributable to unrealized receivables, inventory items and depreciation recapture may exceed net taxable gain realized upon the sale of the Common Units and will be recognized even if there is a portionnet taxable loss realized on the sale of any realized gainsthe Common Units. Thus, a grantee may be characterized asrecognize both ordinary income.income and a capital loss upon a disposition of Common Units. Suburban will provide the participantgrantee with a sales schedule with its IRS Schedule K-1 to assist in characterizing the participant’sgrantee’s gain properly.
Section 409A. Section 409A of the Code provides that all amounts deferred under a nonqualified deferred compensation plan are includible in a grantee’s gross income to the extent such amounts are not subject to a substantial risk of forfeiture, unless certain requirements are satisfied. If the requirements are not satisfied, in addition to current income inclusion, interest at the underpayment rate plus 1% will be imposed on the participant’s underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture. The amount required to be included in income is also subject to an additional 20% tax. It is intended that awards under the Plan will be exempt from or comply with the requirements of Section 409A of the Code.
Miscellaneous Provisions
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is not subject to ERISA.
Assignment or Transfer of Awards Under the Plan. Restricted unitCommon Unit awards are not transferable until the award is vested and the certificate representing the vested Common Units has been issued to the participant.
grantee.No Right to Remain in the Service of Suburban. Nothing in the Plan or in any award agreement under the Plan is intended to provide any person with the right to remain in the service of Suburban or any of its affiliates for any specific period. Both the participantgrantee and Suburban (and if applicable its affiliates) will each have the right to terminate the participant’sgrantee’s service at any time and for any reason, with or without cause.
47
Events or Transactions that Affect the Common Units of Suburban. Upon In the occurrenceevent of any eventincrease or transactionreduction in the number of Common Units, or any change (including, but not limited to, a change in value) in the capitalizationCommon Units, or exchange of Suburban) such asCommon Units for a different number or kind of units or other securities of Suburban, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, recapitalization, separation, cash dividend, unit split, reverse unit split, split up, spin-off, combination or exchange of units, property dividend, issuance of warrants or rights or other likeconvertible securities, unit distribution, repurchase of units, change in capitalcorporate structure or any similar event or transaction,otherwise;, in any case that does not occur in connection with a “changeChange of control,”Control, the Committee in its sole discretion, to prevent dilution or enlargement of rights undershall conclusively determine the Plan, shall determine whether and the extent to which it should substitute or adjust, as applicable:
appropriate adjustments, if any, to: | | |
| | • — | | the maximum number and class of Common Units or other units or securities with respect to which awards may be granted under the Plan; and |
| — | | the number of Common Units that may be issued under the Plan; |
|
| • | the number of Common Unitsor other units or securities which are subject to outstanding awards;awards and |
|
| • | other value determinations applicable to outstanding awards. the purchase price thereof, if applicable. |
Awards Granted Under the 2009 Restricted Unit Plan During the Last Fiscal YearThe following table represents awards granted under the Plan to each of the following individuals and/or groups during our last completed fiscal year, which ended September 27, 2014: each of our named executive officers; all of our current executive officers as a group; all current Supervisors who are not executive officers as a group; and all employees, including all current officers who are not executive officers, as a group. The dollar value represents the aggregate grant date fair values of awards made during fiscal 2014 that were computed in accordance with accounting principles generally accepted in the United States. The actual value of any particular award may differ depending on the Common Unit price on the date the award vests.
| | | | |
| Name and Principal Position | | Dollar Value ($) | | Number of Units |
Michael J. Dunn, Jr. | | $677,679 | | 17,009 |
| Former Chief Executive Officer (Retired at the Conclusion of Fiscal 2014) | | | | |
| | |
Michael A. Stivala | | $1,035,266 | | 29,187 |
| President and Chief Executive Officer | | | | |
| | |
Michael A. Kuglin | | $579,736 | | 16,185 |
| Chief Financial Officer and Chief Accounting Officer | | | | |
| | |
Mark Wienberg | | $621,111 | | 17,245 |
| Chief Operating Officer | | | | |
| | |
Steven C. Boyd | | $621,111 | | 17,245 |
| Senior Vice President – Field Operations | | | | |
| | |
Douglas T. Brinkworth | | $621,111 | | 17,245 |
| Senior Vice President – Product Supply, Purchasing & Logistics | | | | |
| | |
Executive Officer Group | | $6,108,061 | | 166,975 |
| | |
Supervisor Group | | -0- | | -0- |
| | |
| Employee Group (Employees and Non-Executive Officers) | | $3,485,213 | | 89,298 |
Securities Authorized for Issuance Under the 20002009 Restricted Unit Plan
The following table sets forth certain information, as of September 27, 20082014 (the end of fiscal 2008)2014), with respect to Suburban’s existing 20002009 Restricted Unit Plan, under which restricted units of Suburban, as described in the Notes to the Consolidated Financial Statements included in Suburban’s Annual Report onForm 10-K for that fiscal year, are authorized for issuance.
| | | | | | | | | | | | | |
| | | | | | | | | Number of Restricted Units
| |
| | | | | | | | | Remaining Available for
| |
| | | Number of Common
| | | Weighted-Average
| | | Future Issuance Under the
| |
| | | Units to be Issued
| | | Grant Date Fair
| | | 2000 Restricted Unit Plan
| |
| | | Upon Vesting of
| | | Value per
| | | (Excluding Securities
| |
| | | Restricted Units
| | | Restricted Unit
| | | Reflected in Column (a))
| |
Plan Category | | (a) | | | (b) | | | (c) | |
| |
| Equity compensation plans approved by security holders(1) | | | 446,515 | (2) | | $ | 30.57 | | | | 89,874 | |
| Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | |
| Total | | | 446,515 | | | $ | 30.57 | | | | 89,874 | |
| | | | | | | | | | | | | |
| | | | | | |
(1)Plan Category | | Relates to the 2000 Restricted Unit Plan. |
| |
(2)Number of Common
Units to be issued upon
vesting of restricted
units
(a) | | Represents numberWeighted-average grant
date fair value per
restricted unit
(b) | | Number of restricted units that, as of September 27, 2008,
remaining available for
future issuance under the 2009
Restricted Unit Plan (excluding
securities reflected in
column (a))
(c) |
Equity compensation plans approved by security holders (1) | | 694,927 (2) | | $32.07 | | 415,706 (3) |
Equity compensation plans not approved by security holders | | -- | | -- | | -- |
Total | | 694,927 | | $32.07 | | 415,706 |
(1) Relates to the 2009 Restricted Unit Plan.
(2) Represents number of restricted units that, as of September 27, 2014, had been granted under the 2000 Restricted Unit Plan but had not yet vested.
Reasons for Adoption of the Plan
The Compensation Committee believes that a restricted unit plan, among other things, enhances Suburban’s long-term value by offering opportunities to Suburban’s employees, including our executive officers and Supervisors, to acquire a proprietary interest in Suburban and to link their interests and efforts to the long-term interests of the Unitholders. The Committee believes that existing restricted unit grants under Suburban’s 2000 Restricted Unit Plan have contributed substantially to the successful achievement of these objectives. However, as of May 22, 2009, there are only 38,121 Common Units still available for awards under the 2000 Restricted Unit Plan, which plan, by its terms, will expire on October 31, 2010. Therefore, the Compensation Committee believes that adoption of a new restricted unit plan at this time is appropriate.
New Plan Benefits
It is not possible at this time to determine whether any awards will be made under the 2009 Restricted Unit Plan
for future fiscal years. The Compensation Committee hasbut had not yet
vested.(3) At its meeting on November 11, 2014, the Committee approved restricted unit awards for an aggregate of 154,403 Common Units. During the current fiscal year, previously granted restricted unit awards for an aggregate of 4,048 Common Units were forfeited and such Common Units returned to the pool of Common Units available for future awards under the 2009 Restricted Unit Plan.
48
Vote Required and Recommendation of the Board of Supervisors
Under the rules of the NYSE, the affirmative vote of a majority of the votes cast by the Unitholders, whether in person or by proxy, provided that the total votes cast on the proposal represent more than 50% of all Common Units entitled to vote thereon, is required to approve this proposal.Restricted Unit Plan Proposal. The Board of Supervisors recommends a voteFORapproval of the amendment to the 2009 Restricted Unit Plan.
ADJOURNMENT OF THE TRI-ANNUAL MEETING
ADVISORY VOTE ON EXECUTIVE COMPENSATION(Proposal No. 34 on the Proxy Card)
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the Securities and Exchange Commission, we are providing our Unitholders with the opportunity to cast an advisory vote on the compensation of our named executive officers. This Proposal, if adopted, will permitproposal, commonly known as a “say-on-pay” proposal, gives our Unitholders the Meetingopportunity to be adjourned, if necessary, to solicit additional proxies,express their views on the design and effectiveness of our executive compensation program for our named executive officers.
As described in detail in the eventCompensation Discussion and Analysis beginning on page 16 of this Proxy Statement, our executive compensation program is designed to attract and retain talented executives who have the skills and experience required to achieve our goals, and to align the short-term and long-term interests of our executive officers with the short-term and long-term interests of our Unitholders.
Suburban seeks to accomplish these goals by providing our executives with compensation packages that thereare linked to performance measures. We align the short-term and long-term interests of our executive officers with the short-term and long-term interest of our Unitholders by:
| — | | Providing our executive officers with an annual incentive target that encourages them to achieve or exceed targeted financial results and operating performance for the fiscal year; |
| — | | Providing a long-term incentive plan that encourages our executive officers to implement activities and practices conducive to sustainable, profitable growth; and |
| — | | Providing our executive officers with restricted unit awards in order to encourage the retention of the participating executive officers, while simultaneously encouraging behaviors conducive to the long-term appreciation of our Common Units. |
We believe that our executive compensation programs satisfy our overall goal of sustainable, profitable growth.
Accordingly, the Board of Supervisors recommends that the Unitholders approve the following advisory resolution:
“RESOLVED, that the compensation paid to Suburban’s named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”
Although the vote is non-binding, the Board and its Compensation Committee value the opinions expressed by Unitholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
Section 14A of the Exchange Act also requires public companies to allow their shareholders to have an advisory vote on whether say-on-pay proposals should be voted on by those shareholders every 1, 2, or 3 years. We are not sufficient votesincluding such a proposal at the timeupcoming Meeting because the MLP Agreement provides for Tri-Annual Meetings of the Meetingour Unitholders (once every 3 years); however, we will, for so long as Section 14A requires us to approve Proposal No. 1 — the Election Proposal or Proposal No. 2 — the Restricted Unit Plan Proposal.
do so, include a say-on-pay proposal at each Tri-Annual Meeting.Vote Required and Recommendation of the Board of Supervisors
The affirmative vote of a majority of Common Units entitled to vote at the votes castMeeting and present, whether in person or by the Unitholdersproxy, is required for the approval of this proposal.Say-on-Pay Proposal. The Board of Supervisors unanimously recommends a voteFORapproval of this proposal.
49Say-on-Pay Proposal.
APPENDICES
| | |
Appendix A – | | Form of Suburban Propane Partners, L.P. 2009 Restricted Unit Plan (marked to indicate the amendments from the 2009 Restricted Unit Plan as currently in effect) |
FIVE-YEAR PERFORMANCE GRAPH1Appendix A
The following graph compares the performance of our Common Units with the performance of the New York Stock Exchange Index (the “NYSE Market Index”) and a peer group index for the period of the five fiscal years commencing September 28, 2003. The graph assumes that at the beginning of the period, $100 was invested in each of (1) our Common Units, (2) the NYSE Index, and (3) the peer group, and that all distributions or dividends were reinvested.
We do not believe than any published industry or line-of-business index accurately reflects our business. Accordingly, we have created a special peer group index consisting of three other propane-marketing companies whose common units are publicly traded on the NYSE. Our peer group index includes the common units of the following companies: Ferrellgas Partners, L.P., AmeriGas Partners, L.P., and Inergy, L.P.
COMPARISON OF5-YEAR CUMULATIVE TOTAL RETURN
AMONG SUBURBAN PROPANE PARTNERS, L.P.,
NYSE MARKET INDEX AND PEER GROUP INDEX
ASSUMES $100 INVESTED ON SEPT. 27, 2003
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING SEPT. 27, 2008
1 The performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended, except to the extent that Suburban specifically incorporates this information by reference in such filing, and shall not otherwise be deemed filed under such Acts.
50
APPENDICES
Appendix A — Suburban Propane Partners, L.P. 2009 Restricted Unit Plan
51
Appendix A
SUBURBAN PROPANE PARTNERS, L.P.
2009 RESTRICTED UNIT PLAN
EFFECTIVE AUGUST 1, 2009, AS AMENDED ON NOVEMBER 13, 2012,
AND ONAUGUST 6, 2013AND MAY 13, 2015
ARTICLE I
The purpose of this Plan is to strengthen Suburban Propane Partners, L.P., a Delaware limited partnership (the “Partnership”), by providing an incentive to certain selected employees and Supervisors of the Partnership and affiliated entities, and thereby encouraging them to devote their abilities and industry to the success of the Partnership’s business enterprise in such a manner as to maximize the Partnership’s value. It is intended that this purpose be achieved by extending to such individuals an added long-term incentive for continued service to the Partnership, and for high levels of performance and unusual efforts which enhance the Partnership’s value, through the grant of rights to receive Common Units (as hereinafter defined) of the Partnership.
This Plan, in the form set forth herein, is effective as of the Effective Date (as defined below) and is an amendment and restatement of the form of the Plan approved by the limited partners of the Partnership at the tri-annual meeting of the limited partners of the Partnership on July 22, 2009.
ARTICLE II
For the purposes of this Plan, unless otherwise specified in an Agreement, capitalized terms shall have the following meanings:
2.1 “Act”“Act” shall mean the Securities Act of 1933, as amended.
2.2 “Agreement”“Agreement” shall mean the written agreement between the Partnership and a Grantee evidencing the grant of an Award and setting forth the terms and conditions thereof.
2.3 “Award”“Award” shall mean a grant of restricted Common Units pursuant to the terms of this Plan.
2.4 “Beneficial“Beneficial Ownership”shall be determined pursuant toRule 13d-3 promulgated under the Exchange Act.
2.5 “Board”“Board” shall mean the Board of Supervisors of the Partnership.
2.6 “Cause”“Cause” shall mean, unless otherwise provided in an Agreement or in a written employment agreement between the Grantee and the Partnership or its Subsidiary, (a) the Grantee’s gross negligence or willful misconduct in the performance of his duties, (b) the Grantee’s willful or grossly negligent failure to perform his duties, (c) the breach by the Grantee of any written covenants to the Partnership or any of its Subsidiaries, (d) dishonest, fraudulent or unlawful behavior by the Grantee (whether or not in conjunction with employment) or the Grantee 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 or any of its Subsidiaries, or (e) willful or reckless breach by the Grantee of any policy adopted by the Partnership or any of its Subsidiaries, concerning conflicts of interest, standards of business conduct, fair employment practices or compliance with applicable law.
2.7 “Change“Change in Capitalization”shall mean any increase or reduction in the number of Common Units, or any change (including, but not limited to, a change in value) in the Common Units, or exchange of Common Units for a different number or kind of units or other securities of the Partnership, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off,split-up, issuance of warrants or rights or other convertible securities, unit distribution, unit split or reverse unit split, cash dividend, property dividend, combination or exchange of units, repurchase of units, change in corporate structure or otherwise; in each case provided that such increase, reduction or other change does not occur in connection with a Change of Control.
A-1
2.8 “Change“Change of Control”shall mean:
(a) the date (which must be a date subsequent to the Effective Date) on which any Person (including the Partnership’s general partner) or More than One Person Acting as a Group (other than the Partnershipand/or its Subsidiaries) acquires, during the 12 month period ending on the date of the most recent acquisition, Common Units or other voting equity interests eligible to vote for the election of Supervisors (or of any entity, including the Partnership’s general partner, that has the same authority as the Board to manage the affairs of the Partnership) (“Voting Securities”) representing thirty percent 30% or more of the combined voting power of the Partnership’s then outstanding Voting Securities;provided, however,that in determining whether a Change of Control has occurred, Voting Securities which have been acquired in a “Non-Control Acquisition” shall be excluded from the numerator. A “Non-Control Acquisition” shall mean an acquisition of Voting Securities (x) by the Partnership, any of its Subsidiariesand/or an employee benefit plan (or a trust forming a part thereof) maintained by any one or more of them, or (y) in connection with a “Non-Control Transaction;”Transaction”; or
(b) the date of approval by the limited partnersconsummation of the Partnership, of (w)(x) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Voting Securities of the Partnership immediately before such merger, consolidation or reorganization own, directly or indirectly, immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the entity resulting from such merger, consolidation or reorganization (the “Surviving Entity”) in substantially the same proportion as their ownership of the Voting Securities of the Partnership immediately before such merger, consolidation or reorganization, and (B) no person or entity (other than the Partnership, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Partnership, any Subsidiary, the Surviving Entity, or any Person who, immediately prior to such merger, consolidation or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Voting Securities of the Partnership), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding Voting Securities; (x) a complete liquidation or dissolution of the Partnership; or (y) the sale or other disposition of forty percent (40%) of the total gross fair market value of all the assets of the Partnership to any Person or More than One Person Acting as a Group (other than a transfer to a Subsidiary). For this purpose, gross fair market value means the value of the assets of the Partnership, or the value of the assets being disposed of, determined without regard to any liability associated with such assets. A transaction described in clause (A) or (B) of subsection (w) hereof shall be referred to as a “Non-Control Transaction;” or
(c) the date a majority of the members of the Board is replaced during any twelve-month period by the action of the Board taken when a majority of the Supervisors who are then members of the Board are not Continuing Supervisors (for purposes of this section, the term “Continuing Supervisor” means a Supervisor who was either (A) first elected or appointed as a Supervisor prior to the Effective Date; or (B) subsequently elected or appointed as a Supervisor if such Supervisor was nominated or appointed by at least a majority of the then Continuing Supervisors);
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Partnership which, by reducing the number of Voting Securities outstanding, increases the proportional number of Voting Securities Beneficially Owned by the Subject Person, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Partnership, and after such acquisition of Voting Securities by the Partnership, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change of Control shall occur.
In addition, so long as Section 409A of the Code (or any successor provision thereto) remains in effect, notwithstanding anything herein to the contrary, none of the foregoing events shall be deemed to be a “Change of Control” unless such event constitutes a “change in control event” within the meaning of Section 409A of the Code and the regulations and guidance promulgated thereunder.2.9 “Code”“Code” shall mean the Internal Revenue Code of 1986, as amended.
A-2
2.10 “Committee”“Committee” shall mean the Compensation Committee of the Board, or any successor committee of the Board responsible for administering executive compensation. The powers of the Committee under the Plan may be exercised by the Board, consistent with the provisions of the Code, the Exchange Act and the regulations thereunder.
2.11 “Common“Common Units”shall mean the common units representing limited partnership interests of the Partnership.
2.12 “Cure“Cure Period”shall mean thethirty-day period, following notification by a Grantee that a Good Reason event has occurred, during which the Partnership has the option of rectifying the Good Reason event.
2.13 “Disability”“Disability” shall have the same meaning that such term (or similar term) has under the Partnership’s long-term disability plan, or as otherwise determined by the Committee.
2.14 “Effective“Effective Date”shall mean August 1, 2009.
2.16 “Exchange“Exchange Act”shall mean the Securities Exchange Act of 1934, as amended.
2.17 “Fair“Fair Market Value”per unit on any date shall mean the average of the high and low sale prices of the Common Units on such date on the principal national securities exchange on which such Common Units are listed or admitted to trading, or if such Common Units are not so listed or admitted to trading, the arithmetic mean of the per Common Unit closing bid price and per Common Unit closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such other market on which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Common Units on such date, the Fair Market Value shall be the value established by the Committee in good faith.
2.18 “Good“Good Reason”shall mean, unless otherwise provided in an Agreement or in a written employment agreement between the Grantee and the Partnership or its Subsidiary, (a) any failure by the Partnership or any of its Subsidiaries to comply in any material respect with the compensation provisions of a written employment agreement between the Grantee and the Partnership or its Subsidiary, (b) a material adverse change in the Grantee’s title without his consent, or (c) the assignment to the Grantee, without his consent, of duties and responsibilities materially inconsistent with his level of responsibility.
2.19 “Grantee”“Grantee” shall mean a person to whom an Award has been granted under the Plan.
2.20 “More“More than one Person Acting as a Group”has the same meaning as set forth in TreasuryRegulation 1.409A-3(i)(5)(v)(B).
2.21 “Partnership”“Partnership” shall mean Suburban Propane Partners, L.P., a Delaware limited partnership, and its successors.
2.22 “Person”“Person” shall mean a natural person or any entity and shall include two or more Persons acting as a partnership, limited partnership, syndicate, or other group.
2.23 “Plan”“Plan” shall mean this Suburban Propane Partners, L.P. 2009 Restricted Unit Plan.
2.24 “Retirement”“Retirement” shall mean voluntary termination of employment (or, if the Grantee is a Supervisor, voluntary termination of service as such a Supervisor) by a Grantee who has attained age 55 and who has completed 10 years of “eligible service” to the Partnership or its predecessors, in connection with a bona fide intent by the Grantee to no longer seek full time employment in the industries in which the Partnership then participates. Retirement shall not include voluntary termination of employment by a Grantee in response to, or anticipation of, a termination of employment for Cause by the Partnership or its Subsidiary. The term “eligible service” (a) for Grantees who are employees of the Partnership or its Subsidiary, shall have the same meaning as the term is used in the Pension Plan for Eligible Employees of Suburban Propane L.P. and Subsidiaries, and (b) for Supervisors, shall mean service on the Board.
A-3
2.25 “Subsidiary”“Subsidiary” means any corporation, partnership, or other Person of which a majority of its Voting Securities is owned, directly or indirectly, by the Partnership.
2.26 “Supervisor”“Supervisor” shall mean any member of the Board that is not an employee of the Partnership or any of its Subsidiaries.
ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the Committee, which shall hold meetings at such times as may be necessary for the proper administration of the Plan. Any decision or determination reduced to writing and signed by a majority of all of the members of the Committee shall be as fully effective as if made by a majority vote at a meeting duly called and held. Notwithstanding anything else herein to the contrary, the Committee may delegate to any individual or committee of individuals the responsibility to carry out any of its rights and duties with respect to the Plan. No member of the Committee or any individual to whom it has delegated any of its rights and duties shall be liable for any action, failure to act, determination or interpretation made in good faith with respect to this Plan or any transaction hereunder, except for liability arising from his or her own willful misfeasance, gross negligence or reckless disregard of his or her duties. The Partnership hereby agrees to indemnify each member of the Committee and its delegates for all costs and expenses and, to the extent permitted by applicable law, any liability incurred in connection with defending against, responding to, negotiating for the settlement of or otherwise dealing with any claim, cause of action or dispute of any kind arising in connection with any actions in administering this Plan or in authorizing or denying authorization for any transaction hereunder.
3.2 Each member of the Committee shall be (i) a “Non-Employee Director” within the meaning ofRule 16b-3 under the Exchange Act and (ii) an “independent director” within the meaning of the listing standards of the New York Stock Exchange.
3.3 Subject to the express terms and conditions set forth herein, the Committee shall have the power, consistent withRule 16b-3 under the Exchange Act, from time to time to:
(a) select those employees and Supervisors to whom Awards shall be granted and to determine the terms and conditions (which need not be identical) of each such Award;
(b) make any amendment or modification to any Agreement consistent with the terms of the Plan;
(c) construe and interpret the Plan and the Awards, and establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement or between the Plan and any Agreement, in the manner and to the extent it shall deem necessary or advisable so that the Plan complies with applicable law, includingRule 16b-3 under the Exchange Act to the extent applicable, and otherwise to make the Plan fully effective. All decisions and determinations by the Committee or its delegates in the exercise of this power shall be final, binding and conclusive upon the Partnership, its subsidiaries, the Grantees and all other persons having any interest therein;
(d) exercise its discretion with respect to the powers and rights granted to it as set forth in the Plan; and
(e) generally, exercise such powers and perform such acts as it deems necessary or advisable to promote the best interests of the Partnership with respect to the Plan.
| (a) | select those employees and Supervisors to whom Awards shall be granted and to determine the terms and conditions (which need not be identical) of each such Award; |
| (b) | make any amendment or modification to any Agreement consistent with the terms of the Plan; |
| (c) | construe and interpret the Plan and the Awards, and establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement or between the Plan and any Agreement, in the manner and to the extent it shall deem necessary or advisable so that the Plan complies with applicable law, including Rule 16b-3 under the Exchange Act to the extent applicable, and otherwise to make the Plan fully effective. All decisions and determinations by the Committee or its delegates in the exercise of this power shall be final, binding and conclusive upon the Partnership, its subsidiaries, the Grantees and all other persons having any interest therein; |
| (d) | exercise its discretion with respect to the powers and rights granted to it as set forth in the Plan; and |
| (e) | generally, exercise such powers and perform such acts as it deems necessary or advisable to promote the best interests of the Partnership with respect to the Plan. |
3.4 Subject to adjustment as provided in Article 7, the total number of Common Units that may be made subject to Awards granted under the Plan shall be1,200,0002,400,000 (subject to the unitholder approval requirements set forth in Section 9.6). The Partnership shall reserve for purposes of the Plan, out of its authorized but unissued units, such authorized amount of Common Units.
3.5 Notwithstanding anything inconsistent contained in this Plan, the number of Common Units subject to, or which may become subject to, Awards at any time under the Plan shall be reduced to such lesser amount as may be required pursuant to the methods of calculation necessary so that the exemptions provided pursuant toRule 16b-3
A-4
under the Exchange Act will continue to be available for transactions involving all current and future Awards. In addition, during the period that any Awards remain outstanding under the Plan, the Committee may make good faith adjustments with respect to the number of Common Units attributable to such Awards for purposes of calculating the maximum number of Common Units subject to the granting of future Awards under the Plan, provided that following such adjustments the exemptions provided pursuant toRule 16b-3 under the Exchange Act will continue to be available for transactions involving all current and future Awards.
4.1Time Vesting Grants. From time to time, the Committee may grant restricted Common Units to Grantees, in such amounts as it deems prudent and proper. Such rights shall be granted, and the Common Units underlying such rights shall be issued, in consideration of the performance of services and for no other consideration.
4.2Forfeiture. A Grantee’s rights with respect to the restricted Common Units shall remain forfeitable at all times prior to the date on which the restrictions thereon shall have lapsed in accordance with the terms of the Plan and the applicable Agreement.
4.3Vesting Schedule. The restricted Restricted Common Unit grants made pursuant to Section 4.1 prior to August 6, 2013, shall vest and become non-forfeitable, unless otherwise determined by the Committee (at the time of Award or otherwise), and the restrictions thereon shall lapse, at a rate of 25% on the third anniversary of the date of the applicable Award, a second 25% on the fourth anniversary of the applicable Award, and a final 50% on the fifth anniversary of the date of the applicable Award, provided that the Grantee is employed on such date.
Restricted Common Unit grants made pursuant to Section 4.1 subsequent to August 6, 2013, shall vest and become non-forfeitable, unless otherwise determined by the Committee (at the time of Award or otherwise), and the restrictions thereon shall lapse, at a rate of 1/3 (one third) on the first anniversary of the date of the applicable Award, a second 1/3 (one third) on the second anniversary of the applicable Award, and a final 1/3 (one third) on the third anniversary of the applicable Award, provided that the Grantee is employed on such date.
4.4Other Grants. Notwithstanding anything else herein to the contrary, the Committee may grant Common Units on such terms and conditions as it determines in its sole discretion, the terms and conditions of which shall be set forth in the applicable Agreement.
OTHER PROVISIONS APPLICABLE TO VESTING
5.1Change of Control. Notwithstanding anything in this Plan to the contrary, upon a Change of Control, all restrictions on Common Units shall lapse immediately (unless otherwise set forth in the terms of the applicable Agreement) and all such restricted Common Units shall become fully vested and non-forfeitable.
non-forfeitable and will be distributed on the date of the Change of Control.5.2Forfeiture. Unless otherwise provided in an Agreement, any and all restricted Common Units in respect of which the restrictions have not previously lapsed shall be forfeited (and automatically transferred to and reacquired by the Partnership at no cost to the Partnership and neither the Grantee nor any successors, heirs, assigns, or personal representatives of such Grantee shall thereafter have any further right or interest therein) upon the termination of the Grantee’s employment for any reason; provided, however, that in the event that a Grantee’s employment by the Partnership or one of its Subsidiaries was terminated without Cause or by the Grantee for Good Reason, in either case, within six months prior to a Change of Control, no forfeiture of Common Units shall be treated as occurring by reason of such termination and the Common Units shall vest and become non-forfeitable as of the Change of Control in accordance with Section 5.1.5.1 and will be distributed on the date of the Change of Control. As a condition precedent for such vesting to occur when the Grantee terminated employment for Good Reason within six months prior to a Change of Control, prior to such termination the Grantee must have both (a) notified the Partnership’s Vice President of Human Resources (or if there be no such person, the then highest ranking member of the Partnership’s Human Resources Department) of the Good Reason event by certified mail or overnight courier within ninety days following the date of such event and (b) allowed a Cure Period following the date of such notice.
5.3Disability or Death. Notwithstanding the provisions of Section 5.2, unless otherwise provided in an Agreement, if a Grantee’s employment terminates as a result of Disability, the restricted Common Units held by such Grantee for one year or more on the date of termination shall vest on the six months aftermonth anniversary of the effective date of such termination and
A-5
shall be distributed as soon as practicalon the day following the vesting date but no later thanof vesting. Notwithstanding the provisions of Section 5.2, unless otherwise provided in an Agreement, if a Grantee’s employment terminates as a result of Death, all restricted Common Units held by such Grantee on the date twoof Grantee’s death shall vest on the six month anniversary of the effective date of such termination and one half monthsshall be distributed to Grantee’s estate on the day following the enddate of the calendar year in which such Disability date occurred.
vesting.5.4RetirementRetirement.. Notwithstanding the provisions of Section 5.2, unless otherwise provided in an Agreement, if a Grantee’s employment terminates as a result of Retirement, the restricted Common Units held by such Grantee which were awarded to Grantee more than six (6) months prior to the effective date of such Retirement shall vest on the six months aftermonth anniversary of the effective date of such Retirement and shall be distributed as soon as practicalon the day following the vesting date but no later than the date two and one half months following the end of the calendar year in which such vesting date occurred.
vesting.5.5Recycling of Forfeited Shares. Subject to the restrictions set forth inRule 16b-3 of the Exchange Act, any Common Units forfeited hereunder may be, after any applicable six month period referenced in Section 5.2 has expired, the subject of another Award pursuant to this Plan.
5.7Recoupment Policy. Notwithstanding anything in this Plan to the contrary, awards of Common Units granted under the Plan shall be deemed “Incentive Compensation” covered by the terms of the Partnership’s Incentive Compensation Recoupment Policy (the “Policy”) adopted by the Board on April 25, 2007, which is incorporated herein by reference. In accordance with the Policy, in the event of a significant restatement of the Partnership’s published financial results and the Committee determines that fraud or intentional misconduct by a Grantee was a contributing factor to such restatement, then, in addition to other disciplinary action, the Committee may require cancellation of any unvested restricted Common Units granted under the Plan to that Grantee. This Section 5.7 shall be interpreted and administered in accordance with the Policy as in effect from time to time. In the case of any inconsistency between the Policy and this Section 5.7, the Policy shall control.
6.1Delivery of Common Units. Subject to Sections 5.3, 5.4 andSection 9.3, upon the vesting of Common Units, the Partnership shall deliver to the Grantee a certificate representing suchthe applicable number of vested Common Units, free of all restrictions hereunder, within 45 days ofon (a) the date of vesting.
vesting upon the vesting of Common Units pursuant to Sections 4.3, 5.1 or 5.2, or (b) on the day following the date of vesting upon the vesting of Common Units pursuant to Sections 5.3 or 5.4.6.2Transferability. Until such time as restricted Common Units have vested and become non-forfeitable, and certificates representing Common Units in respect thereof have been delivered to the Grantee, a Grantee shall not be entitled to transfer such Common Units.
6.3Rights of Grantees. Until such time as restricted Common Units have vested and become non-forfeitable, and certificates representing Common Units in respect thereof have been delivered to the Grantee, a Grantee shall not be entitled to exercise any rights of a unitholder with respect thereto, including the right to vote such units and the right to receive allocations or distributions thereon.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
7.1 In the event of a Change in Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to (i) the maximum number and class of Common Units or other units or securities with respect to which Awards may be granted under the Plan, (ii) the number of Common Units or other units or securities which are subject to outstanding Awards granted under the Plan, and the purchase price thereof, if applicable.
7.2 If, by reason of a Change in Capitalization, a Grantee of an Award shall be entitled to new, additional or different rights to acquire units or other securities, such new, additional or different rights or securities shall thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the units subject to the Award prior to such Change in Capitalization.
A-6
ARTICLE VIII
TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall terminate on the day preceding the tenth anniversary of the Effective Date and no Award may be granted thereafter, but such termination shall not impair or adversely affect any Awards theretofore granted under
the Plan, which Awards shall continue in effect in accordance with the terms and conditions of this Plan and of the applicable Agreement. The Committee may sooner terminate the Plan and the Committee may at any time and from time to time amend, terminate, modify or suspend the Plan or any Agreement provided, however, that no such amendment, modification, suspension or termination shall impair or adversely affect any Awards theretofore granted under the Plan, except with the consent of the Grantee, nor shall any amendment, modification, suspension or termination deprive any Grantee of any Common Units which he or she may have acquired through or as a result of the Plan. To the extent necessaryrequired under Section 16(b) of the Exchange Act and the rules and regulations promulgated thereunder or any other applicable law, rule or regulation, including, without limitation, any requirement of a securities exchange on which the Common Units are listed for trading, no amendment shall be effective unless approved by the unitholders of the Partnership in accordance with applicable law, and regulations.
rule or regulation.ARTICLE IX
9.1Non-Exclusivity of the Plan. The adoption of the Plan by the Committee shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Committee to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of options to acquire the Common Units, and such arrangements may be either applicable generally or only in specific cases.
9.2Limitation of Liability. As illustrative of the limitations of liability of the Partnership, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give any person any right to be granted an Award other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to the Common Units except as specifically provided in the Plan or an Agreement;
(c) limit in any way the right of the Partnership or any of its Subsidiaries to terminate the employment of any person at any time; or
(d) be evidence of any agreement or understanding, express or implied, that the Partnership or any Subsidiary will employ any person at any particular rate of compensation or for any particular period of time.
| (a) | give any person any right to be granted an Award other than at the sole discretion of the Committee; |
| (b) | give any person any rights whatsoever with respect to the Common Units except as specifically provided in the Plan or an Agreement; |
| (c) | limit in any way the right of the Partnership or any of its Subsidiaries to terminate the employment of any person at any time; or |
| (d) | be evidence of any agreement or understanding, express or implied, that the Partnership or any Subsidiary will employ any person at any particular rate of compensation or for any particular period of time. |
9.3Regulations and Other Approvals; Governing Law. Except as to matters of federal law, this Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Delaware without giving effect to conflicts of law principles.
Notwithstanding any other provisions of this Plan, the obligation of the Partnership to deliver the Common Units under the Plan shall, in each case, be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.
(a) Except as otherwise provided in Article VIII hereof, the Committee may make such changes to the Plan or an Agreement as may be necessary or appropriate to comply with the rules and regulations of any government authority.
(b) Each Award is subject to the requirement that, if at any time the Committee determines, in its sole and absolute discretion, that the listing, registration or qualification of the Common Units issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of the Common Units, no Awards shall be granted and no Common Units shall be issued,
A-7
| (a) | Except as otherwise provided in Article VIII hereof, the Committee may make such changes to the Plan or an Agreement as may be necessary or appropriate to comply with the rules and regulations of any government authority. |
| (b) | Each Award is subject to the requirement that, if at any time the Committee determines, in its sole and absolute discretion, that the listing, registration or qualification of the Common Units issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of the Common Units, no Awards shall be granted and no Common Units shall be issued, in whole or in part, unless and until such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee. |
| (c) | Notwithstanding anything contained in the Plan or any Agreement to the contrary, in the event that the disposition by the Grantee of the Common Units or any other securities acquired pursuant to the Plan is not covered by a then current registration statement under the Act or is not otherwise exempt from such registration, such Common Units shall be restricted against transfer to the extent required by the Act and Rule 144 or other regulations thereunder. The Committee may require any Grantee receiving Common Units pursuant to an Award, as a condition precedent to receipt of such Common Units, to represent and warrant to the Partnership in writing that the Common Units acquired by such Grantee are acquired without a view to any distribution thereof and will not be sold or transferred other than pursuant to an effective registration thereof under said Act or pursuant to an exemption applicable under the Act or the rules and regulations promulgated thereunder. The certificates evidencing any of such Common Units shall be appropriately legended to reflect their status as restricted securities as aforesaid. |
| (d) | Although the Partnership makes no guarantee with respect to the tax treatment of distributions hereunder, this Plan is intended to comply with Section 409A of the Code. This Plan and any Agreement shall be interpreted and administered in a manner so that any amount or benefit payable shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and the regulations and rulings promulgated thereunder. Notwithstanding anything in the Plan or in any Agreement to the contrary, the Committee may amend the Plan on an Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or Agreement to Section 409A of the Code (and the administrative regulations and rulings promulgated thereunder). By accepting an Award under this Plan, a Grantee agrees to any amendment made pursuant to this Section��9.3(d) to any Agreement granted under the Plan without further consideration or action. |
in whole or in part, unless and until such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee.
(c) Notwithstanding anything contained in the Plan or any Agreement to the contrary, in the event that the disposition by the Grantee of the Common Units or any other securities acquired pursuant to the Plan is not covered by a then current registration statement under the Act or is not otherwise exempt from such registration, such Common Units shall be restricted against transfer to the extent required by the Act and Rule 144 or other regulations thereunder. The Committee may require any Grantee receiving Common Units pursuant to an Award, as a condition precedent to receipt of such Common Units, to represent and warrant to the Partnership in writing that the Common Units acquired by such Grantee are acquired without a view to any distribution thereof and will not be sold or transferred other than pursuant to an effective registration thereof under said Act or pursuant to an exemption applicable under the Act or the rules and regulations promulgated thereunder. The certificates evidencing any of such Common Units shall be appropriately legended to reflect their status as restricted securities as aforesaid.
(d) This Plan is intended to comply with Section 409A of the Code. This Plan and any Agreement shall be interpreted and administered in a manner so that any amount or benefit payable shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and the regulations and rulings promulgated thereunder. Notwithstanding anything in the Plan or in any Agreement to the contrary, the Committee may amend the Plan on an Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or Agreement to Section 409A of the Code (and the administrative regulations and rulings promulgated thereunder). By accepting an Award under this Plan, a Grantee agrees to any amendment made pursuant to this Section 9.3(d) to any Agreement granted under the Plan without further consideration or action.
9.4Withholding of Taxes. At such times as a Grantee recognizes taxable income in connection with the rights to acquire Common Units granted hereunder (a “Taxable Event”), the Grantee shall pay to the Partnership an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Partnership in connection with the Taxable Event (the “Withholding Taxes”) prior to the issuance of such units. The Partnership shall have the right to deduct from any payment of cash to a Grantee an amount equal to the Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes to the Partnership, the Grantee may make a written election (the “Tax Election”), which may be accepted or rejected in the discretion of the Committee, to have withheld a portion of the Common Units then issuable to him or her having an aggregate Fair Market Value, on the date preceding the date of such issuance, equal to the Withholding Taxes, provided that in respect of a Grantee who may be subject to liability under Section 16(b) of the Exchange Act, such withholding is done in accordance with any applicable Rule under section 16(b) of the Exchange Act.
9.5Interpretation. The Plan is intended to comply withRule 16b-3 promulgated under the Exchange Act, and the Committee shall interpret and administer the provisions of the Plan or any Agreement in a manner consistent therewith. Any provisions inconsistent with such rule shall be inoperative and shall not affect the validity of the Plan.
9.6Effective Date. The effective date of the Plan shall be the Effective Date. The effectiveness of the Plan is subject to approval of the Plan prior to the Effective Date by the limited partners of the Partnership.
A-8
Suburban Propane
| | | | | | | | | | | | | | |
| | 
| | | |  |
| | | | | Electronic Voting Instructions |
| | | | | Available 24 hours a day, 7 days a week! |
| | | | | Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. |
| | | | | VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
| | | | | Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on May 13, 2015. |
| | | | | 
| | Vote by Internet |
| | | | | | • Go towww.envisionreports.com/sph |
| | | | | | • Or scan the QR code with your smartphone |
| | | | | | • Follow the steps outlined on the secure website |
| | | | | |
| | | | | | | | | | Vote by telephone |
| | | | | | | | | | • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone |
| | Using ablack inkpen, mark your votes with anXas shown in
this example. Please do not write outside the designated areas. | | x |
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 12:00 a.m., Eastern Time, on July 22, 2009.
| | |
| | Vote by Internet
• Log on to the Internet and go towww.investorvote.com/SPH
• Follow the steps outlined on the secured website.
|
| | |
| | Vote by telephone
• Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There isNO CHARGEto you for the call.
• Follow the instructions provided by the recorded message.
message |
|
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q |
| | |
A | | Proposals — The Board recommends a voteFOR all nominees andFOR Proposals 2, 3 and 4. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1. | | Election of Supervisors | | For | | Withhold | | | | | | | | | | | | | | For | | Withhold | | | | | | | | For | | Withhold | |  |
| | 01 - | | Harold R. Logan, Jr. (3-year term) | | ¨ | | ¨ | | | | 02 - | | John Hoyt Stookey (3-year term) | | | | ¨ | | ¨ | | | | 03 - | | John D. Collins (3-year term) | | ¨ | | ¨ | |
| | | | | | | | | | | | | | | | |
| | 04 - | | Jane Swift (3-year term) | | ¨ | | ¨ | | | | 05 - | | Lawrence C. Caldwell (3-year term) | | | | ¨ | | ¨ | | | | 06 - | | Matthew J. Chanin (3-year term) | | ¨ | | ¨ | | |
| | | | | | | | | | | | | | | | |
| | 07 - | | Michael A. Stivala (3-year term) | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | For | | Against | | Abstain |
| | | | | | | | | | | | |
| 2. | | Proposal to ratify independent registered public accounting firm for 2015 fiscal year. | | | | | | ¨ | | ¨ | | ¨ | | | | 3. | | Approval of an amendment to the 2009 Restricted Unit Plan increasing by an additional 1,200,000 Common Units the number of Common Units authorized for awards under the Plan. | | ¨ | | ¨ | | ¨ |
| 4. | | Say on Pay - An advisory vote on the approval of executive compensation. | | | | | | ¨ | | ¨ | | ¨ | | | | | | | | | | | | |
| | | | | | | | |
Change of Address — Please print your new address below. | | | | Comments — Please print your comments below. | | Meeting Attendance | | |
| | | | | | | |
|
Mark the box to the
right if you plan to
attend the Tri-Annual Meeting Proxy Card | | 
Meeting. | | C0123456789
¨ | |  |
|
6IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.6
A Proposals - The Board of Supervisors unanimously recommends a voteFOReach of Proposals Nos. 1 through 3.
1. | Election of six Supervisors: | |
| C | | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold | | + |
| | 01 - Harold R. Logan, Jr. | | o | | o | | 02 - John Hoyt Stookey | | o | | o | | 03 - Dudley C. Mecum | | o | | o | |
| | 04 - John D. Collins | | o | | o | | 05 - Jane Swift | | o | | o | | 06 - Michael J. Dunn, Jr. | | o | | o | | |
| | | | | | | | | | | | | | |
| | For | | Against | | Abstain | | | | For | | Against | | Abstain |
2. Approval of the 2009 Restricted Unit Plan, including to authorize issuance of 1,200,000 Common UnitsAuthorized Signatures — This section must be completed for your vote to be available for grant under the Plan.
| | o | | o | | o | | 3. Approval of the adjournment of the Tri-Annual Meeting, if necessary, to solicit proxies. | | o | | o | | ocounted. — Date and Sign Below |
4. In their discretion to act upon any other matters that may properly come before the Tri-Annual Meeting or any adjournment thereof.
BNon-Voting Items
Change of Address— Please print new address below.
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
| | | | | | | | |
| Date (mm/dd/yyyy) — Please print date below. | | | | Signature 1 — Please keep signature within the box. | | | | Signature 2 — Please keep signature within the box. |
|
/ / | | | | | | | | |
<STOCK#> 012ACA
01Z94E
DIRECTIONS TO THE SUBURBAN PROPANE PARTNERS, L.P. 2015 TRI-ANNUAL MEETING ON WEDNESDAY, MAY 13, 2015 AT 9:00 AM ET.
| | |
 | | From I-287 North: Take exit 39 to NJ-10 E toward Whippany From I-287 South: Take exit 39A to NJ-10 E toward Whippany 1. Merge onto NJ-10 E (2 mi) 2. Turn right onto Algonquin Pkwy (jughandle on the right crosses NJ-10 onto Algonquin Pkwy) 3. Suburban Propane is on your Left (138 ft) |
6qIF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.6q
Proxy – Suburban Propane
|
|
Proxy — Suburban Propane Partners, L.P.
|
|
For the 2009 Partners, L.P.Notice of 2015 Tri-Annual Meeting of Common Unitholders
To Be Held on July 22, 2009 at
240 Route 10 West, Whippany, NJ 07981
Proxy Solicited by Board of Supervisors for Tri-Annual Meeting – May 13, 2015, 9:00 A.M.
The undersigned hereby appoints AM Eastern TimePaul Abel and Michael Stivala,A. Kuglin, or either of them, as proxieseach with the power of substitution, are hereby authorized to represent and vote the common units of the undersigned, with powerall the powers which the undersigned would possess if personally present, on the matters shown on the reverse side and on any other matters that may properly come before the Tri-Annual Meeting of substitution to each, to vote all Common UnitsUnitholders of Suburban Propane Partners, L.P. (“Suburban”) which the undersigned is entitled to vote at the 2009 Tri-Annual Meeting of Common Unitholders of Suburban to be held at Suburban’s principal executive offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey, on July 22, 2009 at 9:00 A.M., local time, andMay 13, 2015 or at any continuation, postponement or adjournment or postponement of such Meeting.
This Proxy is solicited on behalf of Suburban’s Board of Supervisors.Each of Proposal Nos. 1 though 3 is being proposedthereof. By signing this proxy, the undersigned revokes all prior proxies.Common units represented by Suburban, and the Board of Supervisors unanimously recommends a voteFOReach of Proposals Nos. 1 through 3.
When properly executed, this
Proxyproxy will be voted as
directed.directed by the Unitholder. If
returned signed, but no
direction is made, this Proxysuch directions are indicated, the Proxies will
be votedhave authority to vote FOR all nominees and FOR Proposals
1, 2,
3 and
3. Discretion will be used with respect4.The Proxies are also authorized to vote, in their discretion, upon such other mattersbusiness as may properly come before the meeting or at any continuation, postponement or adjournment thereof.
(Items to be voted appear on reverse side.)
| | |
 | | Vote by Internet Ÿ Go towww.envisionreports.com/sph Ÿ Or scan the QR code with your smartphone Ÿ Follow the steps outlined on the secure website |
Important Notice Regarding the Availability of Proxy Materials for the
Suburban Propane Partners, L.P. Unitholder Meeting to be Held on May 13, 2015
Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the Tri-Annual Unitholders’ meeting are available on the Internet. Follow the instructions below to view the materials and vote online or postponementrequest a copy. The items to be voted on and location of the Tri-Annual meeting if no instructionare on the reverse side. Your vote is important!
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement and annual report to unitholders are available at:
| | |
 | | Easy Online Access — A Convenient Way to View Proxy Materials and Vote When you go online to view materials, you can also vote your shares. Step 1: Go towww.envisionreports.com/sphto view the materials. Step 2: Click onCast Your Vote or Request Materials. Step 3: Follow the instructions on the screen to log in. Step 4: Make your selection as instructed on each screen to select delivery preferences and vote. |
|
|
|
|
|
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
| | |
 | | Obtaining a Copy of the Proxy Materials – If you want to receive a copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side on or before May 3, 2015 to facilitate timely delivery. |
01Z96C
Suburban Propane Partners, L.P. Tri-Annual Meeting of Unitholders will be held on Wednesday, May 13, 2015 at the Partnership’s Executive Offices, 240 Route 10 West, Whippany, NJ 07981, at 9:00 a.m. Eastern Time.
Proposals to be voted on at the meeting are listed below along with the Board of Supervisors’ recommendations.
The Board of Supervisors recommends a voteFOR all nominees andFOR Proposals 2, 3 and 4:
| | |
| 1. | | Election of Supervisors |
| 2. | | Ratification of independent registered public accounting firm for 2015 fiscal year |
| 3. | | Authorization of amendment to 2009 Restricted Unit Plan to increase the number of common units available for issuance under the Plan by 1,200,000 |
| 4. | | Advisory vote on executive compensation. |
PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you.
Directions to the contrary is given.
PLEASE ACT PROMPTLY. SIGN AND DATE AND MAIL YOUR PROXY CARD TODAY.
2015 Suburban Propane Partners, L.P. Tri-Annual Meeting on Wednesday, May 13, 2015 at 9:00 AM ET
| | |
 | | From I-287 North: Take exit 39 to NJ-10 E toward Whippany From I-287 South: Take exit 39A to NJ-10 E toward Whippany 1. Merge onto NJ-10 E (2 mi) 2. Turn right onto Algonquin Pkwy (jughandle on the right crosses NJ-10 onto Algonquin Pkwy) 3. Suburban Propane is on your Left (138 ft) |
|
|
|
|
| | | | |
 | | Here’s how to order a copy of the proxy materials and select a future delivery preference: |
| Paper copies:Current and future paper delivery requests can be submitted via the telephone, Internet or email options below. |
| Email copies:Current and future email delivery requests must be submitted via the Internet following the instructions below. |
| If you request an email copy of current materials you will receive an email with a link to the materials. |
| PLEASE NOTE:You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials. |
| g | | Internet– Go towww.envisionreports.com/sph. Click Cast Your Vote or Request Materials. Follow the instructions to log in and order a copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials. |
| g | | Telephone– Call us free of charge at 1-866-641-4276 and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings. |
| g | | Email– Send email to investorvote@computershare.com with “Proxy Materials Suburban Propane Partners, L.P.” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings. |
| | | To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by May 3, 2015. |
| | 01Z96AC |
