[NATIONAL PROPANE LOGO]
Ronald R. Rominlecki
President and COO
National Propane
Suite 1700, IES Tower
200 1st Street SE
Cedar Rapids, Iowa 52401-1409
(319) 365-1550
(319) 365-6084 Fax
December 10, 1997
Mr. Brooks Sherman
National Propane
200 1st Street S.E.
Suite 1700 IES Tower
Cedar Rapids, IA 52401-1409
Dear Brooks:
It is with great pleasure that we hereby confirm your employment as Vice
President -- Chief Financial Officer of National Propane Corporation ("NPC"),
the general partner of National Propane Partners, L.P. (the "MLP"), 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 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 financial and accounting 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, NPC
shall (i) within 30 days after the date of such termination, pay to you a lump
sum equal to one-half (1/2) your annual rate of salary in effect at the date of
termination, (ii) commencing 6 months after the date of termination of your
employment, pay to you a sum equal to your annual rate of salary in effect at
the date of termination, payable in semi-monthly installments for a period of
six (6) months; provided, however, that if you have secured full-time employment
during the period of the semi-monthly payments, the semi-monthly payments
required to be made by NPC after you begin receiving payments from your new
employer will be offset by the compensation you earn from any such new employer
during the period in which you receive semi-monthly payments hereunder, (iii)
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 (iv) 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.
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 or Chief Executive Officer or NPC
or its Board of Directors is materially injurious or detrimental to the
substantial interest of 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 eighteen (18) 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 propane
industry.
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, its subsidiaries 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 the 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
two preceding paragraphs (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.
Best Regards,
RONALD R. ROMINIECKI
Ronald R. Rominiecki
President and COO
RRR/ld
Enclosure
BROOKS SHERMAN 12/17/97
_____________________ _______________________
Brooks Sherman Date
BROOKS SHERMAN
EMPLOYMENT TERM SHEET
Provision Term Comments
- --------- ---- ---------
Base Salary ......................... $100,000 Subject to increase at
discretion of NPC Board
Annual Incentive ................... $50,000/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 ...................... $40,000/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 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 ....................... To be determined by NPC
Compensation
Committee.
Health, Medical,
Insurance Benefits ................. Participation in NPC
Plans.
Vacation ........................... Consistent with other
executive officers.