Exhibit 10.19
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SUBURBAN PROPANE, L.P.
LONG TERM INCENTIVE PROGRAM
(As Amended and Restated Effective October 1, 1999)
SUBURBAN PROPANE, L.P. LONG TERM INCENTIVE PLAN
(As Amended and Restated Effective October 1, 1999)
ARTICLE I
PURPOSE AND APPROVAL
The purpose of this Plan is to strengthen Suburban Propane Partners, L.P.,
Suburban Propane, L.P., and their affiliates (collectively, the "Partnership"),
by providing an incentive to certain Participants (as hereinafter defined), 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 and ability to pay distributions to holders of its Common
Units. It is intended that this purpose be achieved by extending to certain
Participants 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 by offering incentives to effect such results.
This Plan is an amendment and restatement of the Suburban Propane, L.P. Long
Term Incentive Plan that was originally adopted effective October 1, 1997. The
effective date of this amendment and restatement is October 1, 1999.
ARTICLE II
DEFINITIONS
For purposes of this Plan, capitalized terms shall have the following
meanings:
2.1 "AWARD" means a cash amount earned by a Participant pursuant to
Section 5.
2.2 "BENEFICIAL OWNERSHIP" means as that term is used within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended.
2.3 "BENEFICIARY" means a Participant's beneficiary pursuant to
Section 10.
2.4 "BOARD" means the Board of Supervisors of Suburban Propane
Partners, L.P.
2.5 "CAPITAL EXPENDITURES" shall have the same meaning as such term
is reported in the Partnership's consolidated financial statements for each
quarterly period filed on Form 10-Q or Annual Report filed on Form 10-Q
with the Securities and Exchange Commission.
2.6 "CAUSE" means (a) a Participant's gross negligence or willful
misconduct in the performance of his duties, (b) a Participant's willful or
grossly negligent failure to perform his duties, (c) the breach by a
Participant of any written covenants to the Partnership, (d) dishonest,
fraudulent or unlawful behavior by a Participant (whether or not in
conjunction with employment) or a Participant 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 their affiliates, or (e) willful or reckless
breach by a Participant of any policy adopted by the Partnership concerning
conflicts of interest, standards of business conduct or fair employment
practices or procedures with respect to compliance with applicable laws.
2.7 "CHANGE IN CAPITALIZATION" means 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, change in the percentage ownership
interest of the Partnership attributable to 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 dividends, property dividend, combination or
exchange of units, repurchase of units, change in corporate structure or
otherwise.
2.8 "CHANGE OF CONTROL" shall mean the occurrence of:
(a) an acquisition (other than directly by the Partnership) of
Common Units or voting equity interests of the Partnership ("Voting
Securities") by any "Person" other than the Partnership, Suburban
Energy Services Group LLC or any of their affiliates, immediately
after which such Person has Beneficial Ownership of more than twenty
five percent (25%) of the combined voting power of the Partnership's
then outstanding Common Units; provided, however, that in determining
whether a Change of Control has occurred, Common Units which are
acquired in a "Non-Control Acquisition" shall not constitute an
acquisition which would cause a Change of Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan
(or a trust forming a part there) maintained by (A) the Partnership or
Suburban Propane, L.P. or (B) any corporation, partnership or other
Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by the
Partnership, (ii) the Partnership or its Subsidiaries, or (iii) any
Person in connection with a "Non-Control Transaction"; or
(b) approval by the partners of the Partnership of (A) a merger,
consolidation or reorganization involving the Partnership, unless (x)
the holders of the Common Units immediately before such merger,
consolidation or reorganization own, directly or indirectly
immediately following such merger, consolidation or reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding Common Units of the entity resulting from such merger,
consolidation or reorganization (the "Surviving Entity") in
substantially the same proportion as their ownership of the Common
Units immediately before such merger, consolidation or reorganization,
and (y) 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 Common Units), has
Beneficial Ownership of more than twenty five percent (25%) of the
combined voting power of the Surviving Entity's then outstanding
voting securities; (B) a complete liquidation or dissolution of the
Partnership; or (C) the sale or other disposition of fifty percent
(50%) of the net assets of the Partnership to any Person (other than a
transfer to a Subsidiary). A transaction described in clause (x) or
(y) of subsection (A) hereof shall be referred to as a "Non-Control
Transaction."
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 Common
Units 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 the Voting Securities by the
Partnership, and after such acquisition of Voting Securities by the
Parntership, 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.
2.9 "COMMITTEE" means the Compensation Committee of the Board.
2.10 "COMMON UNIT" means the common units representing limited
partnership interests of the Partnership.
2.11 "COMMON UNITHOLDERS" means the persons holding Common Units.
2.12 "CONSOLIDATED CASH PROVIDED BY OPERATING ACTIVITIES" shall have
the same meaning as such term is reported in the Partnership's consolidated
financial statements for each quarterly period filed on Form 10-Q or Annual
Report filed on Form 10-K with the Securities and Exchange Commission.
2.13 "DISABILITY" shall have the same meaning that such term (or
similar term) has under the long-term disability plan in which the
Participant is covered.
2.14 "EFFECTIVE DATE" shall mean October 1, 1997. The Effective Date
of this amendment and restatement shall mean October 1, 1999.
2.15 "FISCAL YEAR" means the fiscal year ending on the Saturday
closest to September 30, adopted by the Partnership, or any other fiscal
year adopted by the Partnership.
2.16 "GENERAL PARTNER" has the meaning set forth in the Partnership
Agreement.
2.17 "GOOD REASON" means (a) any failure by the Partnership to comply
in any material respect with the compensation provisions of a written
employment agreement between a Participant and the Partnership, (b) a
material adverse change in a Participant's title without his or her
consent, or (c) the assignment to a Participant, without his or her
consent, of duties and responsibilities materially inconsistent with his or
her level of responsibility as an executive officer.
2.18 "MINIMUM QUARTERLY DISTRIBUTION" means $0.50 per Common Unit per
fiscal quarter, subject to adjustment in accordance with Section 6.6 and
6.10 of the Partnership Agreement.
2.19 "PARTICIPANT" means an employee of Suburban Propane, L.P.
designated by the Committee to participate in the Plan.
2.20 "PARTNERSHIP" means Suburban Propane, L.P. and Suburban Propane
Partners, L.P., Delaware limited partnerships, and their successors.
2.21 "PARTNERSHIP AGREEMENT" means the Second Amended and Restated
Agreement of Limited Partnership of Suburban Propane Partners, L.P.
2.22 "PERSON" means as that term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended.
2.23 "PLAN" means this Suburban Propane, L.P. Long Term Incentive
Program.
2.24 "QUARTERLY TARGET AWARD" means the Award each Participant is
eligible to earn for each respective quarter of a Fiscal Year.
2.25 "SUBSIDIARY" shall mean any corporation, partnership, or other
Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by the
Partnership.
2.26 "VESTED AMOUNT" means the portion of a Participant's Award which
is nonforfeitable.
ARTICLE III
PARTICIPATION
Only those Participants designated from time to time by the Committee shall
participate in the Plan and receive Awards hereunder.
ARTICLE IV
ADMINISTRATION
4.1 ADMINISTRATION BY THE COMMITTEE. 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. The Committee shall
keep minutes of its meetings. A quorum shall consist of not less than two
members of the Committee and a majority of a quorum may authorize any
action. 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. No member
of the Committee 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 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.
4.2 POWERS OF THE COMMITTEE. Subject to the express terms and
conditions set forth herein, the Committee shall have the power, from time
to time to:
(a) select those Participants to whom Awards shall be granted;
(b) 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,
in the manner and to the extent it shall deem necessary or advisable
so that the Plan complies with applicable law and otherwise to make
the Plan fully effective.
(c) exercise its discretion with respect to the powers and rights
granted to it as set forth in the Plan; and
(d) 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.
4.3 DECISIONS OF THE COMMITTEE ARE FINAL AND BINDING. The
Committee's decisions, actions determinations and interpretations shall be
final and binding upon the Partnership, all Participants, Beneficiaries,
equity holders of the Partnership and any other person.
4.4 CHANGE IN CAPITALIZATION. In the event of any Change in
Capitalization or in the event of any special distribution to the Common
Unitholders, the Committee may, but shall not be obligated to, make such
equitable adjustments in the performance criteria, the Target Awards or
other aspects of the Plan, as the Committee determines are necessary and
appropriate.
ARTICLE V
AWARDS
5.1 TARGET AWARDS. The Committee shall establish a Target Award for
each Participant for each Fiscal Year equal to a designated percentage of
such Participant's base salary at the start of the Fiscal Year. A
Participant's Quarterly Target Award for each fiscal quarter shall be equal
to 25% of the Participant's Target Award for the Fiscal Year.
5.2 PERFORMANCE CRITERIA. The portion of the Quarterly Target Award
earned by a Participant for each fiscal quarter shall be determined on the
basis of the following performance criteria:
(a) A Participant shall earn 50% of his or her Quarterly Target
Award for each fiscal quarter of the Partnership for which (i)
Consolidated Cash Provided by Operating Activities less Capital
Expenditures on a rolling four quarter basis equals or exceeds the
Minimum Quarterly Distribution on Common Units; and (ii) Minimum
Quarterly Distributions are paid to Common Unitholders.
(b) A Participant shall earn the remaining 50% of his or her
Quarterly Target Award for each fiscal quarter of the Partnership for
which (i) Consolidated Cash Provided by Operating Activities less
Maintenance Capital Expenditures on a rolling four quarter basis
equals or exceeds the Minimum Quarterly Distribution on Common Unit by
at least $3.6 million; and (ii) Minimum Quarterly Distributions are
paid to Common Unitholders.
Each performance criterion shall be weighted equally. If both criteria are
met for a fiscal quarter, the Quarterly Target Award shall be earned by the
Participant for such quarter. If only one criterion is met for a fiscal quarter,
only 50% of the Quarterly Target Award shall be earned by the Participant for
such quarter. If neither criterion is met for a fiscal quarter, no Quarterly
Target Award shall be earned by the Participant for such quarter.
ARTICLE VI
VESTING
6.1 VESTING SCHEDULE. Subject to Sections 6.2 and 6.3, if a
Participant earns an Award for a Fiscal Year, the Participant shall become
vested in said Award in accordance with the following schedule:
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On the First Day of: Percentage Vested:
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The third Fiscal Year following 33-1/3%
the Fiscal Year for which Award is
earned
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The fourth Fiscal Year following 66-2/3%
the Fiscal Year for which Award is
earned
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The fifth Fiscal Year following 100%
the Fiscal Year for which Award is
earned
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Notwithstanding anything in this Section 6 to the contrary, the Committee may
accelerate the vesting of Awards at any time for any reason with the consent of
the General Partner.
6.2 CHANGE OF CONTROL. Notwithstanding anything in this Plan to the
contrary, upon a Change of Control, all earned Awards shall become fully
vested and nonforfeitable and shall be paid to a Participant within thirty
(30) days after the Change in Control.
6.3 FORFEITURE. Subject to Sections 6.2, 6.4 and 6.5, Awards which
have not yet vested shall lapse and be forfeited upon the occurrence of
either of the following events: (a) termination of the Participant's
employment or participation in the Plan for any reason, except under the
circumstances provided in Sections 6.4 and 6.5; (b) any attempted or
completed transfer, sale, pledge, hypothecation, or assignment by the
Participant of an Award.
6.4 DISABILITY OR DEATH. Notwithstanding the provisions of Section
6.3, if a Participant's employment terminates as a result of Disability or
death, an earned Award for such Participant shall vest in accordance with
Sections 6.1 and 6.2, as applicable, and shall be paid in accordance with
Section 7.
6.5 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. In the event a
Participant's employment by the Partnership is terminated by the
Partnership without Cause or by the Participant for Good Reason, the Awards
shall vest upon the next succeeding scheduled vesting date pursuant to
Sections 6.1 or 6.2, as applicable.
ARTICLE VII
PAYMENTS
One-third of the Vested Amount of the Award(s) earned to date by a
Participant under the Plan may be paid to the Participant by the last Friday in
March of each year with the remaining 2/3 becoming payable in 1/3 increments
over the following two years. All payments shall be made as of a date determined
by the Committee. Scheduled payments will either be deferred pursuant to Article
VIII, or, if the Participant properly and timely requests in writing, will be
paid in cash.
ARTICLE VIII
DEFERRAL
Payments scheduled under Article VII may be deferred hereunder in one year
increments, and will be credited with interest during the period of deferral as
determined by the Committee. The deferral election shall be made in such form
and at such time as the Committee shall from time to time determine. No further
deferral elections will be permitted following a Participant's termination of
employment.
ARTICLE IX
BENEFICIARIES
A Participant may at any time and from time to time prior to death
designate one or more Beneficiaries to receive any payments to be made following
the Participant's death. If no such designation is on file with the Partnership
at the time of a Participant's death, the Participant's Beneficiary shall be the
beneficiary or beneficiaries named in the Beneficiary designation most recently
filed by the Participant with the Partnership. If the Participant has not
effectively designated a Beneficiary, or if no Beneficiary so designated has
survived the Participant, the Participant's Beneficiary shall be the
Participant's surviving spouse, or, if no spouse has survived the Participant,
the estate of the deceased Participant. If an individual Beneficiary cannot be
located for a period of one year following the Participant's death, despite mail
notification to the Beneficiary's last known address, and if the Beneficiary has
not made a written claim for benefits within such period to the Committee, the
Beneficiary shall be deemed to have predeceased the Participant. The Committee
may require such proof of death and such evidence of the right of any person to
receive all of part of the benefit of a deceased Participant as the Committee
may consider to be appropriate. The Committee may rely upon any direction by the
legal representatives of the estate of a deceased Participant, without liability
to any other person. If a Participant has designated his or her spouse as
Beneficiary, upon entry of a judgment of divorce (or other evidence of formal
dissolution of the married), the designation of the spouse as Beneficiary will
be deemed to have been revoked unless the Participant reaffirms such designation
thereafter.
ARTICLE X
TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall terminate by its terms on the day preceding the tenth
anniversary of the Effective Date of this Plan as originally adopted and no
Award may be earned thereafter. The previous sentence notwithstanding, the Board
may, at any time and from time to time, amend, terminate, modify or suspend the
Plan; provided, however, that no such amendment, modification, suspension or
termination shall impair or adversely affect any Awards earned by a Participant
under the Plan, except with the consent of the Participant.
ARTICLE XI
NON-EXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of options to acquire Common Units, and such arrangements may be either
applicable generally or only in specific cases.
ARTICLE XII
LIMITATION OF LIABILITY
As illustrative of the limitation 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 earn an Award other than at the
sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to the
Awards except as specifically provided in the Plan.
(c) limit in any way the right of the Partnership 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 will employ any person at any particular
rate of compensation or for any particular period time.
ARTICLE XIII
REGULATIONS AND OTHER APPROVALS; GOVERNING LAW
13.1 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 laws of the State of New Jersey without giving effect to
conflicts of law principles.
13.2 Except as provided in Section 10 hereof the Board 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.
ARTICLE XIV
WITHHOLDING OF TAXES
At such time(s) as a Participant recognizes income for purposes of income,
employment, or other tax liability, the Partnership shall withhold an amount
equal to the federal, state and local taxes and other amounts as may be required
by law to be withheld by the Partnership.
ARTICLE XV
NO REQUIRED SEGREGATION OF ASSETS
Neither the Partnership nor any subsidiary shall be required to segregate
any assets that may at any time be represented by Awards made pursuant to the
Plan.
ARTICLE XVI
RIGHT OF DISCHARGE RESERVE
Neither the Plan nor any Award shall guarantee any Employee continued
employment with the Partnership or a subsidiary or guarantee the grant of future
Awards.
ARTICLE XVII
NATURE OF PAYMENTS
All Awards made pursuant to the Plan are in consideration of services for
the Partnership or the subsidiaries. The Awards constitute a special incentive
payment to the Participant and shall not be taken into account as compensation
for purposes of any of the employee benefit plans of the Partnership or any
subsidiary except as may be determined by the Committee.
ARTICLE XVIII
CONSTRUCTION OF PLAN
The captions used in this Plan are for convenience only and shall not be
construed in interpreting the Plan. Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall also
include the plural, and vice versa.
ARTICLE XIX
SEVERABILTY
If any provision of the Plan shall be held unlawful or otherwise invalid or
unenforceable in whole or in part, the unlawfulness, invalidity or
unenforceability of said provision shall not affect any other provision of the
Plan or part thereof, each of which shall remain in full force and effect.