[LETTERHEAD OF NATIONAL PROPANE COMPANY]
June 13, 1997
Mr. Martin A. Woods
14807 Grand Nuggent Court
Houston, TX 77062
Dear Martin:
It is with great pleasure that we hereby confirm your employment as Vice
President - Supply and Distribution of National Propane Corporation ("NPC"), the
general partner of National Propane Partners, L.P. (the "MLP"), starting as soon
as possible, on the terms and conditions set forth in this letter and in the
attached term sheet (the "Term Sheet").
You will report to the President and Chief Executive Officer of NPC and
your duties will be performed primarily at the corporate headquarters of NPC in
Cedar Rapids, Iowa. You will be responsible for all supply and distribution
functions of the company and will be part of the senior management team involved
in the strategic planning for the company.
In the event of termination by NPC of your employment without good
cause, merger, sale or other dissolution of NPC or the MLP, or involuntary
reduction to base salary or annual incentive or mid-term cash bonus programs, or
cessation of direct reporting to the President and Chief Executive Officer of
NPC, NPC shall (i) within 30 days after the date of such termination, pay to you
a lump sum equal to your annual rate of salary in effect at the date of
termination, (ii) within 30 days after date of such termination, pay to you a
lump sum equal to annual target incentive and any funds accumulated as part of
your Mid-Term cash performance plan, and (iii) any unit options granted to you
(a) which have not vested on the termination date shall terminate and become
null and void as of such date and (b) which have vested on the termination date
must be exercised within 90 days or be forfeited, and (iv) continue benefits
coverage for two years.
For purposes of this agreement termination by NPC "for good cause"
means: (i) commission of any act of fraud or gross negligence by you in the
course of your employment hereunder which, in the case of gross negligence, has
a materially adverse effect on the business or financial condition of NPC or any
of its affiliates; (ii) voluntary termination by you of your employment or
failure, refusal or neglect by you to comply with any of your material
obligations hereunder or failure by you to comply with a reasonable instruction
of any superior officer of NPC or its Board of Directors, which failure, refusal
or neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of NPC as soon as reasonably possible upon written notice to you;
(iii) engagement by you in any conduct or the commission by you of any act
which is, in the reasonable opinion of the President and Chief Executive Officer
of NPC or its Board of Directors is materially injurious or detrimental to the
substantial interest of NPC or any of its affiliates; (iv) indictment for any
act, whether with respect to your employment or otherwise, which is in violation
of the criminal laws of the United States or any state thereof or any similar
foreign law to which you may be subject; (v) any failure substantially to comply
with any written rules, regulations, policies or procedures of NPC or any of its
affiliates which, if not complied with, could have a material adverse effect on
NPC or any of its affiliates; or (vi) any willful failure to comply with NPC or
any of its affiliates' internal policies regarding insider trading.
You acknowledge that as an executive officer of NPC you will be
involved, at the highest level, in the development, implementation, and
management of NPC's and the MLP's business strategies and plans, including those
which involve NPC and the MLP's finances, marketing operations, industrial
relations, operations and acquisitions. By virtue of your unique and sensitive
position, your employment
by a competitor of NPC and the MLP represents a serious competitive danger to
NPC and the MLP and the use of your talent, knowledge, and information about
NPC's and the MLP's business, strategies, and plans can and would constitute a
valuable competitive advantage over NPC and the MLP. In view of the foregoing,
if either your employment with NPC ends by reason of your resignation, or your
employment is terminated by NPC for good cause, then you covenant and agree that
in either case for a period of six (6) months following the termination of your
employment, you will not engage or be engaged in any capacity, directly or
indirectly, including, but not limited to, as an employee, agent, consultant,
manager, executive, owner, or stockholder (except as a passive investor owning
less than two percent interest in a publicly held company) in the retail propane
industry directly competing with NPC or the MLP in their geographic service
areas at the time of disengagement.
You agree to treat such as confidential and not to disclose to anyone
other than NPC and its subsidiaries and affiliated companies, and you agree
that you will not at any time during your employment and for a period of four
years thereafter, without the prior written consent of NPC divulge, furnish, or
make known or accessible to, or use for the benefit of anyone other than NPC,
its subsidiaries and affiliated companies, any information of a confidential
nature relating in any way to the business of NPC or its subsidiaries or
affiliated companies, or any of their respective direct business customers,
unless (i) you are required to disclose such information by requirements of law,
(ii) such information is in the public domain through no fault of yours, or
(iii) such information has been lawfully acquired by you from other sources
unless you know that such information was obtained in violation of an agreement
of confidentiality.
You agree that in addition to any other remedy provided at law or in
equity, (a) NPC shall be entitled to a temporary restraining order, and both
preliminary and permanent injunctive relief restraining you from violating the
provision of the preceding two paragraph, (b) you will indemnify and hold NPC
harmless from and against any and all damages or loss incurred by NPC or any of
its affiliates (including attorneys' fees and expenses) as a result of any such
violation; and (c) NPC's remaining obligations of this agreement, if any, shall
cease (other than payment of your base salary through the date of such violation
and any earned but unpaid vacation or bonus or except as may be required by
law).
This agreement shall be governed by the laws of the State of Iowa
applicable to agreements made and to be performed entirely within such State.
If you agree with the terms outlined above and in the Employment Term
Sheet, please date and sign the copy of this letter enclosed for that purpose
and return it to us.
We look forward to seeing you and your wife on June 13th. Please call
Linda Pierce and she will make arrangements for you to meet with a local
realtor if you wish.
Sincerely,
/s/ RONALD D. PALIUGHI
Ronald D. Paliughi
President and Chief Executive Officer
Agreed and Accepted
/s/ MARTIN A. WOODS 6-13-97
............................... ...................
Martin A. Woods Date
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MARTIN A. WOODS
EMPLOYMENT TERM SHEET
Provision Term Comments
--------- ---- --------
Base Salary............... $139,000/year Subject to increase at
discretion of NPC Board.
Annual Incentive.......... $65,000/cycle target Company and individual
(50% of salary) performance assessed for
each fiscal year relative
to objectives agreed in
advance between
executive and CEO of NPC.
Mid-Term Cash............. $52,000/cycle target The CEO of NPC will
(40% of salary) develop a mid-term cash
performance plan calibrated
to deliver the target award
for delivering agreed upon
profit over a three-year
performance cycle. During
each year of the three-year
cycle an amount will be
accrued based upon a share
of the company's profits
over a minimum return; a
new three-year cycle begins
each year so that after the
third year the annual cash
pay-out should equal or
exceed the target; no cap
on potential award.
Unit Options.............. 18,000 subject to
confirmation by NPC
Compensation Committee.
Relocation................ See attachment.
Health, Medical,
Insurance Benefits...... Participation in NPC Plans.
Vacation.................. Consistent with other
executive officers.
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