Draft: 6/24/96
NATIONAL PROPANE CORPORATION 1996 UNIT OPTION PLAN
1. PURPOSE. The purposes of this National Propane Corporation 1996 Unit
Option Plan (the "Plan") are to encourage selected Employees of National Propane
Corporation (the "Company") and its Affiliates to develop a proprietary interest
in the growth and performance of National Propane Partners, L.P. (the
"Partnership"), to generate an increased incentive to contribute to the
Partnership's future success and prosperity, thus enhancing the value of the
Partnership for the benefit of its Unitholders, and to enhance the ability of
the Company and its Affiliates to attract and retain key individuals who are
essential to the progress, growth and profitability of the Partnership, by
giving such Employees the opportunity to acquire Units through the exercise of
Options and/or Unit appreciation rights ("UARs").
2. ADMINISTRATION.
2.1 COMMITTEE. The Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors of the Company (the
"Board") or such other committee as may be designated by the Board to administer
the Plan and composed of not less than two Directors of the Board, each of whom
shall be intended to be a "disinterested person" within the meaning of Rule
16b-3 ("Rule 16b-3") promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), as in effect
on the Effective Date of the Plan, to the extent required by Rule 16b-3. A
majority of the members of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all members of the Committee, shall be
deemed the acts of the Committee.
2.2 POWERS. Subject to the terms of the Plan and applicable law, the
Committee shall have the sole power, authority and discretion to: (i) designate
the Employees who shall be Participants; (ii) determine the number of Options
and UARs to be granted to Participants; (iii) determine the terms and
conditions, consistent with the provisions of the Plan, of any Option or UAR;
(iv) interpret, construe and administer the Plan and any instrument or agreement
relating to an Option or UAR granted under the Plan; (v) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; (vi) make any
determinations as to the right of any Person to receive payment of (or with
respect to) an Option or UAR; (vii) make any other determinations and take any
other actions that the Committee deems necessary or desirable for the
administration of the Plan; (viii) accelerate the exercisability of any Option
and/or UAR and (ix) correct any defect, supply any omission or reconcile any
inconsistency in the Plan, any Option or
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UAR in the manner and to the extent it shall deem desirable in the establishment
or administration of the Plan.
2.3 BINDING EFFECT. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations and other decisions with
respect to the Plan, any Option or UAR granted hereunder shall be within the
sole discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons.
3. UNITS AVAILABLE.
3.1 NUMBER OF UNITS AVAILABLE. A total of 1,250,000 Units, plus a
number of Units equal to an additional 1% of the number of Units outstanding as
of each December 31 following the Plan's effective date, shall be available for
issuance pursuant to Options and UARs granted under the Plan, subject to
adjustment as provided in this Section 3.1 and in Section 3.3. The number of
Units available for issuance under the Plan shall be increased by the number of
Units received by the Company as payment of the exercise price of Options, and
by the number of Units purchased by the Company (in the open market or for Fair
Market Value in private transactions) from an amount equal to the cash proceeds
received by the Company on the exercise of Options under the Plan. Units may be
Common Units and/or Subordinated Units, as may be determined by the Committee in
its sole discretion. If any Option or UAR granted under the Plan is forfeited,
canceled, surrendered or otherwise terminates or expires without the delivery of
unrestricted Units or other consideration, the Units subject to such Option or
UAR, as the case may be, shall again be available for issuance pursuant to
Options and UARs under the Plan.
3.2 SOURCES OF UNITS DELIVERABLE UNDER PLAN. Units delivered by the
Company on exercise of an Option or UAR may consist, in whole or in part, of
Units acquired in the open market or from any Person (including the Partnership)
and (upon consideration of the tax consequences to the Company thereof) Units
that are originally issued by the Partnership to the Company in connection with
the organizational transactions effected concurrently with the closing of the
Partnership's initial public offering of Common Units ("IPO") under the
Securities Act of 1933, as amended (the "1933 Act"), or any combination of the
foregoing.
(i) REIMBURSEMENT BY PARTNERSHIP. With respect to each Unit
delivered to a Participant upon the exercise of an Option, the Company shall be
entitled to reimbursement by the Partnership for the excess, if any, of (i) the
Fair Market Value of each such Unit (as of the date of exercise of such Option
or, in the case of Units purchased in the open market or from any Person, the
price actually paid by the Company therefor over (ii) the exercise price of the
Option relating to such Unit. With respect to each payment made by the Company
upon
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exercise of a UAR, the Company shall be entitled to reimbursement by the
Partnership in an amount equal to the Spread (as hereinafter defined).
3.3 ADJUSTMENTS. The number of Units available for issuance under the
Plan and/or covered by a Participant's Options or UARs shall be adjusted as
appropriate in connection with any distribution to Unitholders, split,
recapitalization, extraordinary distribution, merger consolidation, combination
or exchange of Units or similar change or upon the occurrence of any other event
that the Committee deems appropriate. In the event of any change in the number
of Units outstanding by reason of any other transaction, the Committee may, but
need not, make such adjustments in the number of Units available for issuance
under the Plan and/or pertaining to each Option or UAR. No adjustment shall be
made to Options or UARs relating to Subordinated Units on account of the
expiration of the Subordination Period, as defined in the Partnership Agreement,
relating to such Units. The adjustments determined by the Committee shall be
final, binding and conclusive.
4. ELIGIBILITY. All Employees shall be eligible to be Participants, and to
be selected to receive Options under Section 5.1 hereof and UARs under Section
5.2 hereof. Grants may be made to the same Employee on more than one occasion.
5. TERMS OF OPTIONS AND UARS.
5.1 TERMS OF OPTIONS. The Committee is hereby authorized to grant
Options shall determine. Options granted under this Section 5.1 shall be
referred to as "Options."
(i) OPTION EXERCISE PRICE. The per Unit exercise price of any
Option shall be determined by the Committee at the date of grant.
(ii) TERM. The term of each Option shall be for such period as
may be determined by the Committee; provided, that in no event shall the term of
any Option exceed a period of 10 years from the date of its grant.
(iii) TIME AND METHOD OF EXERCISE. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part, and
may in its discretion accelerate the time at which any outstanding Option
becomes exercisable; provided that no Option to purchase Subordinated Units may
be exercisable before the end of the Subordination Period, as defined in the
Amended and Restated Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement"). Subject to any limitations in the Plan Agreement, a
Participant may purchase Units subject to the exercisable portion of an Option
in whole at any time, or in part from time to time, by delivering to the
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Secretary of the Company written notice specifying the number of Units with
respect to which the Option is being exercised, together with payment in full of
the purchase price of such Units plus any applicable federal, state or local
taxes for which the Company or any Affiliate has a withholding obligation in
connection with such purchase. Such payment shall be made in full in cash, by
check acceptable to the Company, in Units held by the Participant for such
period as may be required (in the opinion of the Committee) to avoid a charge to
the Company's earnings for financial reporting purposes, such other form of
consideration as may be permitted by the Committee in the applicable Plan
Agreement, or any combination of the foregoing. In lieu of the foregoing, if
permitted by the Committee, payment may be made by the delivery to the Company
of an assignment of a sufficient amount of the proceeds from the sale of Units
acquired upon exercise to pay for all of the Units acquired upon exercise and
any federal, state or local taxes which the Company or any Affiliate has a
withholding obligation, along with an authorization to the broker or selling
agent to pay that amount to the Company, which sale shall be made at the
Participant's direction at the time of exercise, provided that the Committee may
require the Participant to furnish an opinion of counsel acceptable to the
Committee to the effect that such delivery would not result in the Participant
incurring any liability under Section 16 of the Act.
(iv) TERMINATION OF EMPLOYMENT. Unless otherwise provided in a
Plan Agreement, if a Participant ceases to be an Employee for any reason
(including death or Disability): (a) to the extent an Option granted to such
Participant was exercisable immediately prior to the date such Participant
ceased to be an Employee (i) in the case of termination on account of Cause or
Voluntary Termination, such Option may not be exercised following such date of
termination, (ii) in the case of termination on account of death or Disability,
or death or Disability in the period described in (iii), such Option may be
exercised within one year after such date by the Participant (or, in the case of
his death, by the person to whom his rights shall pass by will or the laws of
descent and distribution), but not thereafter, and (iii) in the case of
termination for any reason other than as described in (i) or (ii), such Option
may be exercised within 90 days after such date of termination by the
Participant, but not thereafter; and (b) to the extent such Option was not
exercisable immediately prior to the date the Participant ceases to be an
Employee, such Option shall automatically lapse and be canceled unexercised on
such date; provided, that in no event shall any Option be exercisable after the
expiration date of such Option as set forth in the related Plan Agreement.
5.2 TERMS OF UARs. The Committee is hereby authorized to grant UARs to
Employees selected by the Committee with the terms and conditions described in
this Section 5.2 and in Section 5.3 and with such additional terms and
conditions, which are not inconsistent with the provisions of the Plan, as the
Committee shall determine. UARs may be granted in connection with all or any
part of, or independently of, any Option granted under this Plan. A UAR granted
in connection with an Option may be granted at or after the time of grant of
such Option.
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(i) Exercise. The grantee of a UAR shall have the right, subject
to the terms hereof and the applicable Plan Agreement, to receive from the
Company an amount equal to (a) the excess of (i) the Fair Market Value of a Unit
on the date of exercise of the UAR over (ii) the Fair Market Value of a Unit on
the date of grant (or over the Option exercise price if the UAR is granted in
connection with an Option), multiplied by (b) the number of Units with respect
to which the UAR is exercised (the "Spread");
(ii) Payment of Spread. Payment to the grantee upon exercise of a
UAR shall be in cash or in Units (valued at their Fair Market Value on the date
of exercise of the UAR) or both, all as the Committee shall determine in its
sole discretion. Upon the exercise of a UAR granted in connection with an
Option, the number of Units subject to the related Option shall be reduced by
the number of Units with respect to which the UAR is exercised. Upon the
exercise of an Option in connection with which a UAR has been granted, the
number of Units subject to the related UAR shall be reduced by the number of
Units with respect to which the Option is exercised.
(iii) Term of UARs. Each Plan Agreement with respect to a UAR
shall set forth the periods during which the award evidenced thereby shall be
exercisable. Such periods shall be determined by the Committee in its sole
discretion.
5.3 TERMS APPLICABLE TO ALL OPTIONS AND UARs.
(i) LIMITS ON TRANSFER. No Option, UAR or rights thereunder shall
be assignable, alienable, saleable or transferable by a Participant otherwise
than by will or by the laws of descent and distribution. Each Option and UAR
shall be exercisable during that grantee's lifetime only by the grantee or, if
permitted under applicable law, by the grantee's guardian or legal
representative. No Option, UAR or any rights thereunder may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company, the Partnership or any Affiliate.
(ii) UNIT CERTIFICATES. Upon exercise of an Option, or a UAR that
is payable in Units, delivery of a certificate for fully paid and nonassessable
Units shall be made to the Person exercising the Option or UAR, not more than 30
days from the date of receipt of the notice of exercise by the Company or at
such other time, place and manner as may be agreed upon by the Company and such
Person.
(iii) PLAN AGREEMENT. Each Option and UAR shall be evidenced by a
written document (a "Plan Agreement"), which shall have
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such terms and provisions, not inconsistent with the Plan, that the Committee
determines.
(iv) FORFEITURE FOR CERTAIN VIOLATIONS. Notwithstanding anything
herein to the contrary, all Options and UARs granted to a Participant hereunder
may be terminated and forfeited without the payment of any consideration if the
Committee determines in good faith that such Participant violated any
noncompetition, confidentiality or similar agreement, contract or policy of the
Company, the Partnership or an Affiliate applicable to such Participant.
6. AMENDMENT AND TERMINATION. The Board in its discretion may terminate the
Plan at any time with respect to any Units for which a grant has not theretofore
been made. The Board may also alter or amend the Plan or any Plan Agreement in
whole or in part from time to time; provided, that no change in the Plan or any
Option or UAR theretofore granted may impair the rights of a Participant without
the consent of such Participant; and provided further, that notwithstanding any
other provision of the Plan or any Plan Agreement, to the extent necessary to
comply with Rule 16b-3, no such amendment or alteration shall be made that
would, without the requisite consent under Rule 16b-3:
(i) materially increase the total number of Units available for
Options and UARs under the Plan, except as provided in Section 3 hereof;
(ii) materially modify the requirements as to eligibility for
participation in the Plan;
(iii) extend the maximum period during which Options or UARs may
be granted under the Plan; or
(iv) materially increase the benefits accruing to Participants
under the Plan.
7. VESTING/TERMINATION UPON THE OCCURRENCE OF A CHANGE IN CONTROL. If there
is a Change of Control, the Committee may in its discretion (i) accelerate the
exercisability of some or all outstanding Options and UARs, in which case the
Committee may also accelerate the date as of which such Options and UARs
terminate to a date at least 30 days following the date such Options and UARs
become exercisable, or (ii) cancel outstanding Options or UARs (whether or not
then exercisable) in exchange for a per Unit cash payment equal to the
difference between the amount being paid in connection with the transactions
effectuating the Change of Control for a Unit, or if none, the Fair Market Value
of a Unit at the effective date of such cancellation, over the per Unit exercise
price of such canceled Option or UAR for each Unit covered by such canceled
Option or UAR.
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8. GENERAL PROVISIONS.
8.1 NO RIGHTS TO AWARDS. No Person shall have any claim to be granted
any Option or UAR under the Plan, and there is no obligation for uniformity of
treatment of Persons under the Plan. The terms and conditions of Options and
UARs need not be the same with respect to each Participant.
8.2 WITHHOLDING. The Company or an Affiliate shall take such action as
may be necessary in the opinion of the Company or Affiliate to satisfy all
obligations for the payment of any withholding taxes resulting from any transfer
made with respect to the grant of any Option or UAR, or any cancellation,
exercise or vesting of an Option or UAR (as applicable) under the Plan.
8.3 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Company, the Partnership or any Affiliate from
adopting or continuing in effect other or additional compensation arrangements
and such arrangements may be either generally applicable or applicable only in
specific cases.
8.4 NO RIGHT TO EMPLOYMENT. The grant of an Option or UAR shall not be
construed as giving a Participant the right to be retained in the service of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment or other service, free from any liability
or any claim under the Plan unless otherwise expressly provided in the Plan or
in any Plan Agreement.
8.5 GOVERNING LAW. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with applicable Federal law, and to the extent not preempted thereby,
with the laws of the State of Delaware.
8.6 SEVERABILITY. If any provision of the Plan, any Option or any UAR
is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction, or as to any person, or would disqualify the Plan, any Option or
UAR under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to such applicable law. If it cannot be
so construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan, Option or UAR, such provision shall
be stricken as to such jurisdiction, Person, Option or UAR and the remainder of
the Plan and any such Option shall remain in full force and effect.
8.7 NO TRUST OR FUND CREATED. Neither the Plan, any Option nor any UAR
shall be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Option or UAR,
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such right shall be no greater than the right of an unsecured general creditor
of the Company or an Affiliate.
8.8 NO FRACTIONAL UNITS. No fractional Units shall be issued or
delivered pursuant to the Plan, any Option or any UAR, and the Committee shall
determine whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Units, or whether such fractional Units or
any rights thereto shall be canceled or otherwise eliminated.
8.9 HEADINGS. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
8.10 NO LIMITATION. The existence of the Plan and the grants of
Options and UARs hereunder shall not affect in any way the right or power of the
Board or the Unitholders of the Partnership (or stockholders or partners of any
Affiliate, as applicable) to make or authorize any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Company, the Partnership or any Affiliate, any merger or consolidation of the
Company, the Partnership or any Affiliate, any issue of debt or equity
securities ahead of or affecting Units or the rights thereof or pertaining
thereto, the dissolution or liquidation of the Partnership or any Affiliate or
any sale or transfer of all or any part of the Partnership's or any Affiliate's
assets or business, or any other corporate act or proceeding.
8.11 SECURITIES LAWS. The Subordinated Units that may be subject to
Options or UARs under the Plan are unlisted, unregistered securities. Each
Option and UAR granted under the Plan shall be subject to the requirement that
if at any time the Board shall determine, in its discretion, that the listing,
registration or qualification of the Units subject to such grant upon any
securities exchange or under any state or federal law, or that the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, such grant or the issue or purchase of
Units thereunder, such grant shall be subject to the condition that such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
8.12 RULE 16b-3. It is intended that the Plan and any Option or UAR
granted to a Person subject to Section 16 of the 1934 Act meet all of the
requirements of Rule 16b-3, as in effect from time to time. If any provision of
the Plan or any such Option or UAR would disqualify the Plan, such Option or
such UAR under, or would otherwise not comply with, Rule 16b-3, such provision,
Option or UAR shall be construed or deemed amended to conform to Rule 16b-3.
8.13 INVESTMENT REPRESENTATION. Unless the Units subject to Options
and UARs granted under the Plan have been registered under the
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1933 Act (and, in the case of any Participant who may be deemed an affiliate
(for securities law purposes) of the Company or Partnership, such Units have
been registered under the 1933 Act for resale by such Participant), or the
Partnership has determined that an exemption from registration is available, the
Partnership may require prior to and as a condition of the issuance of any Units
pursuant to an Option or UAR exercise that any person exercising such Option or
UAR hereunder furnish the Partnership with a written representation in a form
prescribed by the Committee to the effect that such person is acquiring the
Units solely with a view to investment for his or her own account and not with a
view to the resale or distribution of all or any part thereof, and that such
person will not dispose of any of the Units otherwise than in accordance with
the provisions of Rule 144 under the 1933 Act unless and until either the Units
are registered under the 1933 Act or the Company is satisfied that an exemption
from such registration is available.
8.14 COMPLIANCE WITH SECURITIES LAWS. Anything contained herein to the
contrary notwithstanding, the Partnership shall not be obligated to sell or
issue any Units to the Company under the Plan unless and until the Partnership
is satisfied that such sale or issuance complies with (i) all applicable
requirements of the exchange on which the Units are traded (or the governing
body of the principal market in which such Units are traded, if such Units are
not then listed on an exchange), (ii) all applicable provisions of the 1933 Act
and (iii) all other laws or regulations by which the Partnership is bound or to
which the Partnership is subject. The Company acknowledges that, as general
partner of the Partnership, it is an affiliate of the Partnership under
securities laws and it shall comply with such laws and obligations of the
Partnership relating thereto as if they were directly applicable to the Company.
9. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as of the
closing date of the IPO.
10. TERM OF THE PLAN. No Option or UAR shall be granted after ten years
from the effective date of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Plan Agreement, any Option or UAR
granted may extend beyond such date, and any authority of the Committee to
amend, alter, suspend, discontinue or terminate any such Option or UAR, or to
waive any condition or rights under any such Option or UAR, shall extend beyond
such date.
11. DEFINITIONS. As used in this Plan, the following terms shall have the
meanings set forth below:
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(a) "Affiliate" shall mean the Partnership and any other Person
directly or indirectly controlling, controlled by or under common control with
such Person within the meaning of the 1933 Act.
(b) "Cause" shall mean or any like term, as defined in any
written contract between the Company and the optionee; or if not so defined, (i)
on account of fraud, embezzlement or other unlawful or tortious conduct, whether
or not involving or against the Company or any Affiliate, (ii) for violation of
a policy of the Company or any Affiliate, or (iii) for serious and willful acts
or misconduct detrimental to the business or reputation of the Company or any
Affiliate.
(c) "Change of Control" shall mean any of the following: (i) the
liquidation or dissolution of the Company, (ii) any merger or consolidation of
the Company with or into any person (other than Triarc or any of its Affiliates,
including, without limitation, Nelson Peltz, Peter W. May, DWG Acquisition
Group, L.P. or any of their respective Affiliates (each a "Permitted Holder"))
if the Company is not the surviving entity thereof, or any sale whether direct
or indirect, of substantially all of the assets of the Company to any Person or
"group" (as used in Section 13(d) and 14(d) of the Exchange Act) other than to a
Permitted Holder, (iii) any Person or group (other than a Permitted Holder) is
or becomes, directly or indirectly, the beneficial owner of more than 50% of the
then outstanding total voting power of all classes of stock of the Company, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the Directors of the Company or (iv) during any period of 12
consecutive months after the closing of the IPO, the individuals who at the
beginning of such 12 month period (or persons nominated by such members of the
Board of Directors of the Company to succeed them) constitute the Board of
Directors of the Company cease, for any reason, to constitute a majority
thereof.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Common Units" shall mean the limited partnership interests
in the Partnership represented by Common Units as set forth in the Partnership
Agreement and described in the Registration Statement for the IPO.
(f) "Disability" shall mean such total and permanent disability
as qualifies the Participant for benefits under the long-term or extended
disability plan of the Company or any Affiliate covering the Participant at the
time.
(g) "Employee" shall mean any director, employee or officer of,
or consultant to, the Company or any Affiliate other than any non-employee
director of the Company. In the event that the disinterested administration
requirement of Rule 16b-3 ceases to be applicable to awards granted under all
equity-
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based plans maintained by the Company and the Partnership, the term "employee"
as used herein shall include non-employee directors of the Company.
(h) "Fair Market Value" shall mean, at any specified time, with
respect to a Common or Subordinated Unit, if the Common Units are traded on an
exchange, the average of the closing prices of a Common Unit or, if applicable,
the mean of its closing bid and asked prices, on the ten days on which such
Units were traded immediately prior to the date of determination. For this
purpose, an "exchange" shall mean the exchange on which the Common Units were
traded in the greatest volume in the calendar quarter prior to the date of
determination and shall include normal securities trading markets which do not
meet the formal requirements for exchanges, including, for example, the
quotation system of the National Association of Securities Dealers customarily
known an Nasdaq or any recognized over-the-counter market or system maintained
in the United States or any foreign country on which transactions in Common
Units are normally effected. In the absence of a readily ascertainable closing
price or bid and asked price, or in the absence of a formal exchange or trading
market with respect to the Common Units, the market value of a Unit shall mean
its market value as determined by the Committee on a basis consistently applied.
(i) "Option" shall mean a right to purchase Units under the Plan
granted under Section 5.1.
(j) "Participant" shall mean an Employee granted an Option or a
UAR under the Plan.
(k) "Person" shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or political subdivision thereof.
(l) "Subordinated Units" shall mean the limited partnership
interests in the Partnership represented by Subordinated Units as set forth in
the Partnership Agreement and described in the Registration Statement for the
IPO.
(m) "UAR" shall mean a right granted under the Plan that may be
exercised as provided in Section 5.2.
(n) "Units" shall mean the limited partnership interests in the
Partnership represented by Common Units or Subordinated Units as set forth in
the Partnership Agreement and described in the Registration Statement for the
IPO.
(o) "Voluntary Termination" shall mean termination of service
with the Company and all Affiliates by the Participant for any reason
whatsoever, other than (i) an involuntary termination of the Participant's
employment by the Company or an Affiliate with or without Cause or (ii)
termination by reason of the Participant's retirement at or after age 65,
Disability or death.
DRAFT 6/24/96
dated __________, 1996
[Company Letterhead]
Grant of Unit [Options/Appreciation Rights]
___________________________
___________________________
___________________________
___________________________
I am pleased to inform you that the Board of Directors of National Propane
Corporation (the "Company") has granted you [an Option to purchase from the
Company] [appreciation rights with regard to] [Common/Subordinated] Units of
limited partnership interests in National Propane Partners, L.P. as follows:
[Option] Grant # ____________
Grant Date ____________
[Option Price] [appreciation base] per Unit $____________
Number of [Units/Rights] Granted ____________
By signing below, you agree that [this Option is/these rights are] granted under
and governed by the terms and conditions of the Company's 1996 Unit Option Plan,
including the Terms and Conditions attached hereto and incorporated herein by
reference[, and you acknowledge that any Subordinated Units subject to the
Option have not been registered under the Securities Act of 1933]. This grant
shall be void and of no effect unless you execute and return this Agreement to
the Company within 30 days of the above date. The attached copy of this
Agreement is for your records.
NATIONAL PROPANE CORPORATION
By:_____________________________
Title:____________________________
OPTIONEE
___________________________
___________________________
DRAFT 6/24/96
NATIONAL PROPANE CORPORATION
1996 UNIT OPTION PLAN
TERMS AND CONDITIONS
OPTION
The terms and conditions set forth below are hereby incorporated by
reference into the attached award agreement ("Agreement") by and between
National Propane Corporation (the "Company") and the employee named therein (the
"Participant"). Terms defined in the Plan are used herein with the same meaning.
1. Participant has agreed to perform services for the Company or its
Affiliates and to accept the grant of the [option/Unit appreciation rights]
provided in the Agreement (["Option"/"Rights") in accordance with, and subject
to, the terms and provisions of the Plan and the Agreement.
2. Except for its earlier termination as provided below, the
[Option/Rights] shall become exercisable [insert vesting schedule].
3. The [Option/Rights] shall not be exercisable following the tenth
anniversary of its Grant Date or the earlier lapse or termination of such
[Option/Rights] as provided herein and in the Plan. To the extent exercisable,
the [Option/Rights] may be exercised in whole or in part from time to time (but
not with respect to the lesser of 1,000 Units or the number of Units then
remaining subject to the [Option/Rights]).
4. Participant agrees that the Company or its Affiliates may withhold any
federal, state or local taxes upon the exercise or cancellation of the
[Option/Rights], at such time and upon such terms and conditions as required by
law. Notwithstanding anything herein to the contrary, the Company shall not be
obligated to deliver any Units pursuant to the exercise of the [Option/Rights]
until Participant has satisfied such withholding obligations or made
arrangements for satisfying such obligations that are acceptable to the Company.
5. To the extent and subject to the foregoing restrictions, the
[Option/Rights] may be exercised from time to time by a notice in writing of
such exercise, which states the [Option/Rights] Grant Number set forth in the
Agreement and the number of Units in respect of which the [Option is/Rights are]
being exercised. Such notice shall be delivered to the Chief Financial Officer
of the Company at the Company's offices, Suite 1700, IES Tower, 200 1st Street,
S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067. An election to exercise
shall be irrevocable. The date of exercise shall be the date the notice is hand
delivered or mailed, whichever is applicable.
2
[6. An election to exercise an Option shall be accompanied by the tender of
the full purchase price of the Units for which the election is made. Payment
shall be made in cash, in Units held by the Participant for such period as may
be required (in the opinion of the Committee) to avoid or change to the
Company's earnings for financial reporting purposes, through a brokered cashless
exercise progam described in Section 5.1(iii) of the Plan to be established by
the Committee on such terms and conditions as the Committee may determine or by
any combination of the foregoing.]
7. The [Option is/Rights are] is not transferable by Participant, otherwise
than by will or laws of descent and distribution and may be exercised during the
lifetime of Participant only by Participant (or, in the event of Participant's
incapacity, Participant's legal guardian or representative).
8. In the event Participant's employment with the Company and its
Affiliates is terminated the [Option/Rights] shall not be exercisable except as
permitted by Section 5.1(iv)(a) of the Plan.
9. Notwithstanding any other provision of the Agreement, Participant agrees
that Participant will not exercise any [Option/Rights] and neither the Company
nor the Partnership shall be obligated to deliver any Units or make any cash
payments, if counsel to the Company or the Partnership determines such exercise,
delivery or payment would violate any law or regulation of any governmental
authority or agreement with any national securities exchange upon which the
Units are listed.
10. In the event of a conflict between the terms of this Agreement and the
Plan, the Plan shall be the controlling document. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed to them in the Plan.