UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted by
rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or 14a-12
SUBURBAN PROPANE PARTNERS, L.P.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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):
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(4) Date Filed:
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Notes:
SUBURBAN
One Suburban Plaza o 240 Route 10 West o P.O. Box 206 o Whippany, NJ 07981-0206
Office 973-887-5300
http://www.suburbanpropane.com
MARK A. ALEXANDER
President &
Chief Executive Officer
March 10, 2003
Dear Fellow Suburban 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, April 23,
2003, 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.
Attendance at the Tri-Annual Meeting will be open to holders of record of common
units as of the close of business on February 27, 2003. I look forward to
greeting those of you who will be able to attend.
Sincerely,
Mark A. Alexander
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUBURBAN PROPANE PARTNERS, L.P.
NOTICE OF TRI-ANNUAL MEETING
APRIL 23, 2003
The Tri-Annual Meeting of the Limited Partners of Suburban Propane Partners,
L.P. will be held at 9:00 a.m. on Wednesday, April 23, 2003, at our executive
offices at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey, for the
following purposes:
1. To elect three Elected Supervisors;
2. 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 February
27, 2003 are entitled to notice of, and to vote at, the meeting.
By Order of the Board of Supervisors,
Janice G. Meola
SECRETARY & GENERAL COUNSEL
March 10, 2003
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.
SUBURBAN PROPANE PARTNERS, L.P.
ONE SUBURBAN PLAZA
240 ROUTE 10 WEST
WHIPPANY, NEW JERSEY 07981-0206
PROXY STATEMENT
This Proxy Statement (first mailed, together with a form of proxy, on or about
March 10, 2003) is being furnished to holders ("unitholders") of common units
("units") in connection with the solicitation of proxies by the Board of
Supervisors (the "Board") of Suburban Propane Partners, L.P. ("Suburban" or
"we") for use at Suburban's Tri-Annual Meeting of Limited Partners and any
postponements or adjournments (the "Meeting").
WHAT IS THE BOARD'S PROPOSAL?
To elect three Elected Supervisors.
HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSAL?
The Board recommends a vote FOR each of its nominees for Elected
Supervisor.
HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
The Board does not know of any business to be considered at the Meeting
other than the proposal 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.
WHO IS ENTITLED TO VOTE?
Each unitholder as of the close of business on the record date, February
27, 2003, is entitled to vote at the Meeting.
HOW MANY UNITS MAY BE VOTED?
As of the record date, 24,631,287 units were outstanding. Each unit
entitles its holder to one vote, subject to the exception described in the
next sentence. A unitholder holding more than 20% of the total number of
units outstanding may not vote any units in excess of those representing
20%, and, as used in this proxy statement, the term "outstanding" excludes
such excess units. The Board is not aware of any such holder as of the
Record Date.
WHAT IS A "QUORUM"?
A quorum is a majority of the outstanding units represented in person or by
proxy at the Meeting. There must be a quorum for the Meeting to be held. 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.
WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSAL?
The affirmative vote of holders of a plurality of the outstanding units is
required to elect each Elected Supervisor.
HOW DO I VOTE?
You may vote by any one of three different methods:
(a) In Writing. You can vote by marking, signing and dating the enclosed
proxy card and returning it in the enclosed envelope. If you return
your signed proxy card but do not give instructions as to how you wish
to vote, your units will be voted FOR the proposal.
(b) By Telephone. You can vote your proxies by touchtone telephone from
the U.S. using the toll-free telephone number on the proxy card.
(c) In Person. You can vote by attending the Meeting.
Units represented by properly executed proxies that are not revoked will be
voted in accordance with the instructions shown on the proxy card. You have
the right to revoke your proxy at any time before the meeting by:
(a) Notifying our Corporate Secretary;
(b) Voting in person; or
(c) Returning a later-dated proxy card.
Attendance at the Meeting will not, in and of itself, revoke your proxy.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
If your 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
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, Equiserve Trust Company, N.A., at (800)
756-8200 or (201) 324-0313. The hearing impaired may contact Equiserve at
TDD (800) 952-9245.
WHAT DO I DO IF MY UNITS ARE HELD IN "STREET NAME"?
If your 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
units.
WHO WILL COUNT THE VOTE?
Representatives of Equiserve Trust Company, N.A., our transfer agent and an
independent tabulator, will count the votes and act as the inspector of
election.
WHERE AND WHEN WILL I BE ABLE TO FIND OUT THE RESULTS OF VOTING?
In addition to announcing the results at the Meeting, we will post the
results on our web site at WWW.SUBURBANPROPANE.COM within two days after
the Meeting. You will also be able to find the results in our Form 10-Q for
the third quarter of fiscal 2003, which we will file with the SEC in August
2003.
WHO IS BEARING THE COST OF THIS PROXY SOLICITATION?
Georgeson Shareholder Communications Inc. was hired to assist in the
distribution of proxy materials and the solicitation of votes and will be
paid a customary fee plus reasonable out-of-pocket expenses. We are bearing
the cost of soliciting proxies for the Meeting. In addition to using the
mail, 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.
WILL THE INDEPENDENT ACCOUNTANTS ATTEND THE MEETING?
Representatives of PricewaterhouseCoopers LLP, our independent accountants
for the fiscal year ended September 28, 2002, 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.
WHEN ARE THE UNITHOLDER PROPOSALS FOR THE 2006 TRI-ANNUAL MEETING DUE?
We presently expect that our next Tri-Annual Meeting will be held in April
of 2006 (the "2006 Tri-Annual Meeting"). The deadline for the submission of
unitholder proposals for inclusion in the proxy materials relating to that
meeting will be October 31, 2005. Unitholders who intend to present a
proposal at the 2006 Tri-Annual meeting without inclusion of such proposal
in our proxy materials are required to provide notice of such proposal to
us no later than January 17, 2006. If the date of the 2006 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 one of our
periodic filings with the SEC.
HOW CAN I OBTAIN A COPY OF THE ANNUAL REPORT ON FORM 10-K?
We will provide an additional copy of our 2002 Annual Report on Form 10-K,
including the financial statements and financial statement schedules filed
therewith, upon written request to the Corporate Secretary, Suburban
Propane Partners, L.P., One Suburban Plaza, 240 Route 10 West, P.O. Box
206, Whippany, New Jersey 07981-0206 without charge. We will furnish a
requesting unitholder with any exhibit not contained therein upon payment
of a reasonable fee.
ELECTION OF SUPERVISORS
(PROPOSAL NO. 1 ON THE PROXY CARD)
Unitholders are entitled to elect three members of the Board (the "Elected
Supervisors"). The nominees for Elected Supervisors, all of whom are currently
serving as Elected Supervisors, are described below. If elected, all nominees
are expected to serve until the 2006 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.
NOMINEES FOR ELECTION AS ELECTED SUPERVISORS
-- TO SERVE UNTIL THE 2006 TRI-ANNUAL MEETING
JOHN HOYT STOOKEY Age 73
Mr. Stookey has served as an Elected Supervisor and Chairman of the Board of
Supervisors since March 1996. From 1986 until September 1993, he was the
Chairman, President and Chief Executive Officer of Quantum Chemical Corporation
("Quantum") and served as non-executive Chairman and a Director of Quantum from
its acquisition by Hanson PLC in September 1993 until October 1995. Mr. Stookey
also is a Director of United States Trust Company of New York and Graphic
Packaging, Inc.
HAROLD R. LOGAN, JR. Age 58
Mr. Logan has served as an Elected Supervisor since March 1996. He is a Director
and Chairman of the Finance Committee of the Board of Directors of
TransMontaigne Inc., which provides 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 also is a Director of The Houston
Exploration Company, Graphic Packaging Corporation, and Rivington Capital
Advisors, LLC.
DUDLEY C. MECUM Age 68
Mr. Mecum has served as an Elected Supervisor since June 1996. He has been a
Managing Director of Capricorn Holdings, LLC (a sponsor of 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. Mr.
Mecum also is a Director of Lyondell Chemical Co., Dyncorp, CitiGroup, Inc., CCC
Information Systems Inc. and Mrs. Fields Holding Company, Inc.
THE BOARD RECOMMENDS THAT UNITHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE
BOARD'S NOMINEES.
OTHER MEMBERS OF THE BOARD OF SUPERVISORS
In addition to the Elected Supervisors, the Board consists of two supervisors
(the "Appointed Supervisors") appointed by our general partner, Suburban Energy
Services Group LLC (the "General Partner") and a Supervisor Emeritus.
MARK A. ALEXANDER Age 44
Mr. Alexander has served as President and Chief Executive Officer since October
1996 and as an Appointed Supervisor since March 1996. He was Executive Vice
Chairman and Chief Executive Officer from March 1996 through October 1996. From
1989 until joining Suburban, Mr. Alexander was an officer of Hanson Industries
(the United States management division of Hanson PLC), most recently Senior Vice
President - Corporate Development. Mr. Alexander serves as Chairman of the Board
of Managers of the General Partner. He is a member of the Executive Committee of
the National Propane Gas Association and Chairman of the Research and
Development Advisory Committee of the Propane Education and Research Council.
MICHAEL J. DUNN, JR. Age 53
Mr. Dunn has served as Senior Vice President since June 1998 and became Senior
Vice President - Corporate Development in November 2002. Mr. Dunn has served as
an Appointed Supervisor since July 1998. He was Vice President - Procurement and
Logistics from March 1997 until June 1998. From 1983 until joining Suburban, Mr.
Dunn was Vice President of Commodity Trading for the investment banking firm of
Goldman Sachs & Company. Mr. Dunn serves on the Board of Managers of the General
Partner.
MARK J. ANTON Age 77
Mr. Anton has served as Supervisor Emeritus of the Board of Supervisors since
January 1999. He is a former President, Chief Executive Officer and Chairman of
the Board of Directors of Suburban Propane Gas Corporation, a predecessor of
Suburban, and a former Executive Vice President of Quantum.
PARTNERSHIP GOVERNANCE
Our partnership agreement provides that all management powers over our business
and affairs are exclusively vested in the Board and, subject to the direction of
the Board, our officers. Neither the General Partner nor any unitholder has any
management power over our business and affairs or actual or apparent authority
to enter into contracts on behalf of, or to otherwise bind, us. The members of
the General Partner are our executives and key employees. The Board has two
standing committees: an Audit Committee and a Compensation Committee.
AUDIT COMMITTEE
The Audit Committee assists the Board in fulfilling its oversight
responsibilities relating to Suburban's financial statements and other financial
information; compliance with applicable laws, regulations and our code of
conduct; independence and qualifications of the independent auditor;
management's establishment of and adherence to a system of internal accounting
and disclosure controls; and the performance of the internal audit function and
independent auditors. It is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities and personnel of
Suburban and may retain outside counsel, auditors or other experts to assist it.
In addition, the Audit Committee has the authority to review, at the Board's
request, specific matters as to which the Board believes there may be a conflict
of interest in order to determine if the resolution of such conflict proposed by
the Board is fair and reasonable to the unitholders. Under our partnership
agreement, any matters approved by the Audit Committee will be conclusively
deemed to be fair and reasonable to us and our unitholders, approved by all of
our partners and not a breach by the General Partner or the Board of any duties
they may owe us or our unitholders. Our Board has adopted a written charter for
the Audit Committee, a copy of which is attached as Exhibit A. The Audit
Committee Charter is reviewed periodically to ensure that is meets all
applicable legal and New York Stock Exchange listing requirements.
The Audit Committee is comprised of the three supervisors who are not officers
or employees of Suburban or its subsidiaries. In the opinion of the Board, and
as "independent" currently is defined by the Securities and Exchange Commission
and under the listing standards of the New York Stock Exchange, these
supervisors are independent of management and free of any relationship that
would interfere with their exercise of independent judgement as members of this
committee. As interpreted in the Board's business judgment, each member of the
Audit Committee is financially literate and one or more members of the Audit
Committee possess accounting or related financial management expertise. 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 New York Stock
Exchange listing requirements. The committee met 4 times during fiscal 2000, 4
times during fiscal 2001 and 5 times during fiscal 2002. Its members are Messrs.
Stookey, Mecum and Logan, who serves as its Chair.
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 1 time during fiscal
2000, 1 time in fiscal 2001, and 1 time in fiscal 2002. Its members are Messrs.
Logan and Stookey, who serves as its Chair, neither of whom are officers or
employees of Suburban.
ATTENDANCE AT MEETINGS
The Board held 6 meetings in fiscal 2000, 7 meetings in fiscal 2001 and 9
meetings in fiscal 2002. Each Supervisor, other than Mr. Anton, 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. Mr. Anton, a non-voting member of the
Board, attended at least 75% of the total number of meetings of the Board in
fiscal 2000 and fiscal 2002 but not in fiscal 2001.
SUPERVISORS' REMUNERATION
Appointed Supervisors receive no remuneration for serving on the Board. Mr.
Stookey receives annual compensation of $75,000 for his services as Chairman of
the Board. Mr. Logan and Mr. Mecum, the other Elected Supervisors, receive
annual compensation of $50,000. Mr. Anton, the Supervisor Emeritus, receives
annual compensation of $15,000. All Elected Supervisors and the Supervisor
Emeritus receive reimbursement of reasonable out-of-pocket expenses incurred in
connection with attendance at meetings of the Board and Board committees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers
and persons who own more than 10 percent of our units to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of common units. Officers, directors unitholders
holding more than 10 percent are required by SEC regulations to furnish Suburban
with copies of all Section 16(a) forms they file. To our knowledge, based solely
on a review of the copies of such reports furnished to us and representations
that no other reports were required, all forms were filed timely in fiscal years
2000, 2001, and 2002.
REPORT OF THE AUDIT COMMITTEE
In accordance with the provisions of its written charter, the Audit Committee
assists the Board in fulfilling its responsibility for oversight of the
financial reporting processes. Management has the primary responsibility for the
financial statements and the reporting process, including the system of internal
controls. PricewaterhouseCoopers LLP, our independent auditors, are responsible
for performing an independent audit of our consolidated financial statements in
accordance with generally accepted auditing standards and for issuing a report
thereon.
In this context, the Audit Committee has met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that our consolidated financial statements were prepared in accordance
with generally accepted accounting principles, and the Audit Committee has
reviewed and discussed the consolidated financial statements with management and
PricewaterhouseCoopers LLP. The Audit Committee discussed with
PricewaterhouseCoopers LLP those matters required to be discussed by Statement
on Auditing Standards No. 61 (Communications with Audit Committees), as amended,
including the quality and acceptability of our financial reporting process and
controls.
The Audit Committee discussed with our internal auditor and
PricewaterhouseCoopers LLP the overall scope and plans for their respective
audits. It also meets regularly with the internal auditors and
PricewaterhouseCoopers LLP, with and without management present, to discuss the
results of their examinations, the evaluations of our internal accounting and
disclosure controls, and the overall quality of our accounting principles.
Additionally, the Audit Committee has discussed with PricewaterhouseCoopers LLP
its independence from Suburban and its management. These discussions included
the matters in the written disclosures required by the Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and
whether the provision of the non-audit related services included below under
"Audit and Non-Audit Fees of Accountants" is compatible with maintaining their
independence.
In performing all of these functions, the Audit Committee acts only in an
oversight role and necessarily relies on the work and assurances of management
and PricewaterhouseCoopers LLP, which, in their report, express an opinion on
the conformity of our annual financial statements to generally accepted
accounting principles. In reliance on the reviews and discussions set forth in
this report and in light of its roles and responsibilities, the Audit Committee
recommended to the Board, and the Board approved, the audited financial
statements in our Annual Report on Form 10-K for the fiscal year ended September
28, 2002, which were filed with the Securities and Exchange Commission.
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE AUDIT COMMITTEE OF THE BOARD OF
SUPERVISORS.
Harold R. Logan, Jr., Chairman
John Hoyt Stookey
Dudley C. Mecum
AUDIT AND NON-AUDIT FEES OF ACCOUNTANTS
The following table sets forth the aggregate fees billed to us for fiscal years
2002, 2001, and 2002 by PricewaterhouseCoopers LLP, our independent auditors.
FISCAL 2000 FISCAL 2001 FISCAL 2002
---------------------------------------
AUDIT FEES (INCLUDING AUDIT
OF THE ANNUAL FINANCIAL
STATEMENTS AND REVIEWS OF THE
QUARTERLY FINANCIAL STATEMENTS) $342,800 $410,000 $433,900
OTHER AUDIT RELATED FEES,
INCLUDING REGISTRATION
STATEMENTS, ACQUISITION
SUPPORT & STATUTORY AUDITS 170,000 11,300 12,000
TAX-RELATED SERVICES 502,300 641,300 772,600
FINANCIAL INFORMATION SYSTEM
DESIGN AND IMPLEMENTATION -0- -0- -0-
TOTAL OF ALL OTHER FEES 305,000 746,100 179,900
REPORT OF THE COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION PRINCIPLES
The Compensation Committee has adopted the following principles for the
compensation of executive management:
o Ensure that total executive compensation promotes the alignment between the
interests of the executives, our unitholders and our customers.
o Ensure that executive compensation motivates to sustain high-levels of
performance and growth of the business.
o Attract and retain top executive talent.
o Emphasize performance-based compensation that balances rewards for
short-term and long-term financial results.
COMPENSATION METHOD
Suburban strives to provide a comprehensive executive compensation program that
is competitive and performance-based in order to attract and retain superior
executive talent. The Compensation Committee reviews base salaries, short-term
and long-term incentives as total compensation for each executive on an annual
basis. To ensure competitiveness, the Committee targets the median range of a
comparison group of companies consisting of other publicly traded master limited
partnerships. These companies exhibit leadership in performance characteristics
such as distribution payment levels, controllable profit, and earnings before
interest, taxes, depreciation and amortization ("EBITDA") over sustained periods
as benchmarks for Suburban's compensation standards. The Compensation Committee
also engaged Segal/Sibson Consulting during 2002 to review and make
recommendations concerning executive compensation at Suburban. This report
incorporates those findings and recommendations of the study that the
Compensation Committee adopted.
COMPONENTS OF EXECUTIVE COMPENSATION
o BASE SALARY: Annual base salary is designed to compensate executives for
their level of responsibility and sustained individual performance. The
Compensation Committee approves in advance all salary increases for
executive officers. Increases in base pay are determined by Suburban's
performance as well as individual performance. Performance reviews are
conducted on each executive on an annual basis. Base salary is targeted at
the median of the comparison group of companies.
o ANNUAL BONUS COMPENSATION: Annual bonus compensation is provided in order
to promote the achievement of Suburban's business objectives. Target annual
bonuses are established as a percent of each executive's base salary.
Measurements to earn a bonus are based on meeting or exceeding budgeted
EBITDA and the growth of Suburban's customer base. The Compensation
Committee may adjust the weightings of these measurements for unusual
circumstances. Annual bonus compensation is targeted at the median range of
the comparison group of companies.
o LONG-TERM INCENTIVE COMPENSATION: Suburban adopted a new long-term
incentive plan with an effective October 1, 2002. This plan will replace
the existing Long-Term Incentive Program established in 1996. Target awards
will be established for each executive that is based on a percentage of
their annual bonus plan target. The measurement period to earn the award
will be a 3-year performance cycle that will measure Total Return to
Suburban's unitholders (TRU). The TRU will be compared to a group of eleven
other MLPs selected by the Compensation Committee. The quartile ranking of
Suburban as compared to the other MLPs will determine the amount of the
award. Emphasis will be placed on the growth of unit price and
distributions. Duration of this plan will be 10 years.
o SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN: The Supplemental Executive
Retirement Plan is a non-qualified, unfunded plan, designed to provide
certain senior executives of the Partnership with additional retirement
benefits. Benefits under the plan are calculated without regard to
statutory maximums to replace benefit opportunities lost due to regulatory
limits.
o BENEFITS: A different purpose is served by the benefits offered to key
executives than the other elements of total compensation. In general, they
provide a safety net of protection against financial catastrophes that can
result from illness, disability or death. The benefits offered to key
executives are largely those that are offered to the general employee
population, with some variation, primarily to promote tax efficiency and to
replace benefit opportunities lost due to regulatory limits.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The compensation of Mr. Alexander is based upon an Employment Agreement with him
which became effective March 5, 1996, and which was amended on October 23, 1997
and April 14, 1999. The members of the Compensation Committee meet annually, in
private, to review Mr. Alexander's compensation. As part of the Segal/Sibson
study conducted in fiscal 2002, Mr. Alexander's total compensation was reviewed
for competitiveness. Based upon the Segal/Sibson study coupled with Suburban's
latest performance and financial results, the Compensation Committee determined
that Mr. Alexander's compensation for fiscal 2002 remained consistent with our
Executive Compensation Principles and should be maintained for fiscal 2003.
Mr. Alexander participates in the same programs and receives incentive
compensation based on the same factors as the other executive officers. Overall,
his compensation reflects a high degree of policy and decision-making authority
with respect to the strategic direction and growth of the Partnership. Mr.
Alexander's base salary for fiscal 2002 was $450,000 and he received a bonus of
35% of his base salary.
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE OF THE BOARD
OF SUPERVISORS.
John Hoyt Stookey, Chairman
Harold R. Logan, Jr.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of all compensation awarded or paid to
or earned by the chief executive officer and the four other most highly
compensated executive officers of Suburban for services rendered in each of the
last three fiscal years.
ANNUAL COMPENSATION
------------------------
ALL
LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS(1)($) PAYOUT ($) COMPENSATION(2)($)
- --------------------------- ---- ---------- ----------- ---------- ------------------
Mark A. Alexander ............................... 2002 450,000 157,500 25,382 158,513
President and Chief Executive Officer ........... 2001 450,000 450,000 7,141 166,371
2000 400,000 304,000 -- 128,548
Michael J. Dunn, Jr ............................. 2002 275,000 81,813 12,135 85,956
Sr. Vice President - Corporate Development ...... 2001 260,000 221,000 3,414 89,321
2000 235,000 151,810 -- 67,324
David R. Eastin ................................. 2002 260,000 77,350 2,018 81,984
Senior Vice President and Chief Operating Officer 2001 240,000 204,000 -- 84,362
2000 190,000 108,300 -- 48,591
Robert M. Plante ................................ 2002 175,000 45,625 3,807 32,938
Vice President - Finance ........................ 2001 150,000 75,000 1,071 35,169
2000 132,500 50,350 -- 24,988
Jeffrey S. Jolly ................................ 2002 177,500 31,063 4,600 41,414
Vice President and Chief Information Officer .... 2001 170,000 85,000 1,294 47,660
2000 150,000 57,000 -- 58,556
(1) Bonuses are reported for the year earned, regardless of the year paid.
(2) For Mr. Alexander, this amount includes the following: $2,750 under the
Retirement Savings and Investment Plan; $1,479 in administrative fees under
the Cash Balance Pension Plan; $135,000 awarded under the Long-Term
Incentive Plan; and $19,284 for insurance. For Mr. Dunn, this amount
includes the following: $2,750 under the Retirement Savings and Investment
Plan; $1,479 in administrative fees under the Cash Balance Pension Plan;
$70,125 awarded under the Long-Term Incentive Plan; and $11,602 for
insurance. For Mr. Eastin, this amount includes the following: $2,750 under
the Retirement Savings and Investment Plan; $1,479 in administrative fees
under the Cash Balance Pension Plan; $66,300 awarded under the Long-Term
Incentive Plan; and $11,455 for insurance. For Mr. Plante, this amount
includes the following: $2,625 under the Retirement Savings and Investment
Plan; $1,479 in administrative fees under the Cash Balance Pension Plan;
$26,250 awarded under the Long-Term Incentive Plan; and $2,584 for
insurance. For Mr. Jolly, this amount includes the following: $2,663 under
the Retirement Savings and Investment Plan; $1,479 in administrative fees
under the Cash Balance Pension Plan; $26,625 awarded under the Long-Term
Incentive Plan; and $10,647 for insurance.
1997 LONG-TERM INCENTIVE PLAN
We adopted a non-qualified, unfunded long-term incentive plan for officers and
key employees, effective October 1, 1997. Awards are based on a percentage of
base pay and are subject to the achievement of certain performance criteria,
including our ability to earn sufficient funds and make cash distributions on
our units with respect to each fiscal year. Awards vest over time with one third
vesting at the ends of years three, four, and five from the award date.
Long-Term Incentive Plan awards earned in fiscal year 2002 were as follows:
PERFORMANCE OR
OTHER PERIOD POTENTIAL AWARDS UNDER PLAN
AWARD UNTIL MATURATION ---------------------------
NAME FY 2002 OR PAYOUT THRESHOLD TARGET MAXIMUM
- ---- ------- ---------------- --------- ------ -------
Mark A. Alexander $135,000 3-5 Years $ 0 $135,000 $135,000
Michael J. Dunn, Jr. 70,125 3-5 Years 0 70,125 70,125
David R. Eastin 66,300 3-5 Years 0 66,300 66,300
Robert M. Plante 26,250 3-5 Years 0 26,250 26,250
Jeffrey S. Jolly 26,625 3-5 Years 0 26,625 26,625
RETIREMENT BENEFITS
The following table sets forth the annual benefits upon retirement at age 65 in
2002, without regard to statutory maximums, for various combinations of final
average earnings and lengths of service which may be payable to Messrs.
Alexander, Dunn, Eastin, Plante and Jolly under the Pension Plan for Eligible
Employees of the Operating Partnership and its Subsidiaries and/or the Suburban
Propane Company Supplemental Executive Retirement Plan. We have assumed each
such plan and each such person will be credited for service earned under such
plan to date. Messrs. Alexander, Dunn, and Eastin have 6 years, 5 years and 3
years, respectively, under both plans. For vesting purposes, however, Mr.
Alexander has 18 years combined service with Suburban and his prior service with
Hanson Industries. Messrs. Plante and Jolly have 25 years and 5 years,
respectively, under the Pension Plan. They are currently limited to IRS
statutory maximums for defined benefit plans.
PENSION PLAN
ANNUAL BENEFIT FOR YEARS OF CREDITED SERVICE SHOWN (1),(2),(3),(4),(5)
AVERAGE
EARNINGS 5 YRS. 10 YRS. 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- -------- ------ ------- ------- ------- ------- ------- -------
$100,000 7,888 15,775 23,663 31,551 39,438 47,326 55,214
$200,000 16,638 33,275 49,913 66,551 83,188 99,826 116,464
$300,000 25,388 50,775 76,163 101,551 126,938 152,326 177,714
$400,000 34,138 68,275 102,413 136,551 170,688 204,826 238,964
$500,000 42,888 85,775 128,663 171,551 214,438 257,326 300,214
(1) The Plans' definition of earnings consists of base pay only.
(2) Annual Benefits are computed on the basis of straight life annuity amounts.
The pension benefit is calculated as the sum of (a) plus (b) multiplied by
(c) where (a) is that portion of final average earnings up to 125% of
social security Covered Compensation times 1.4% and (b) is that portion of
final average earnings in excess of 125% of social security Covered
Compensation times 1.75% and (c) is credited service up to a maximum of 35
years.
(3) Effective January 1, 1998, the Plan was amended to a cash balance benefit
formula for current and future Plan participants. Initial account balances
were established based upon the actuarial equivalent value of the accrued
December 31, 1997 prior plan benefit. Annual interest credits and pay-based
credits will be credited to this account. The 2002 pay-based credits for
Messrs. Alexander, Dunn, Eastin, Plante and Jolly are 3.0%, 2.0%, 1.5%,
10.0% and 2.0%, respectively. Participants as of December 31, 1997 will
receive the greater of the cash balance benefit and the prior plan benefit
through the year 2002. It should also be noted that the Plan was amended
effective January 1, 2000. Under this amendment, individuals who are hired
or rehired on or after January 1, 2000 will not be eligible to participate
in the Plan.
(4) In addition, a supplemental cash balance account was established equal to
the value of certain benefits related to retiree medical and vacation
benefits. An initial account value was determined for those active
employees who were eligible for retiree medical coverage as of April 1,
1998 equal to $415 multiplied by years of benefit service (maximum of 35
years). Future pay-based credits and interest are credited to this account.
The 2002 pay-based credits for Messrs. Alexander, Dunn, Eastin, Plante and
Jolly are 2.0%, 0.0%, 0.0%, 2.0% and 0.0%, respectively.
(5) Effective January 1, 2003, all future pay-based credits as determined under
the cash balance benefit formula has been discontinued. Interest credits
will continue to be applied based on the five-year U.S. Treasury bond rate
in effect during the preceding November, plus one percent.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
We have adopted a non-qualified, unfunded supplemental retirement plan known as
the Supplemental Executive Retirement Plan (the "SERP"). The purpose of the SERP
is to provide certain executive officers with a level of retirement income from
Suburban, without regard to statutory maximums. Effective January 1, 1998, the
Pension Plan for Eligible Employees of Suburban Propane, L.P. (the "Qualified
Plan") was amended and restated as a cash balance plan. In light of the
conversion of the Qualified Plan to a cash balance formula, the SERP has been
amended and restated effective January 1, 1998. The annual amount of the Normal
Retirement Benefit payable under the SERP shall be determined as follows: (a)
For Annuity Starting Dates or other determination dates on or after January 1,
1998 and prior to January 1, 2003, a Participant's Normal Retirement Benefit
shall be equal to the excess of: (i) (A) the greater of a Participant's Pension
benefit (determined using Average Final Compensation as defined in footnote 2 of
the Retirement Benefits Section) or the accrued benefit based on the Basic
Account (determined using Compensation and Excess Compensation as defined in the
SERP), plus (B) the accrued benefit based on the Supplemental Account, if any
(determined using Compensation and Excess Compensation as defined in the SERP);
over (ii) the Participant's Pension Offset. (b) For Annuity Starting Dates or
other determination dates on or after January 1, 2003, a Participant's Normal
Retirement Benefit shall be equal to the excess of: (i) (A) the greater of a
Participant's Pension benefit determined as of January 1, 2003 (based on
Compensation, Benefit Service, and all other relevant factors as of January 1,
2003) or the accrued benefit based on the Basic Account (determined using
Compensation and Excess Compensation as defined in the SERP), plus (B) the
accrued benefit based on the Supplemental Account, if any (determined using
Compensation and Excess Compensation as defined in the SERP); over (ii) the
Participant's Pension Offset. Messrs. Alexander, Dunn, and Eastin currently
participate in the SERP.
EMPLOYMENT AGREEMENT
We entered into an employment agreement (the "Employment Agreement") with Mr.
Alexander, which became effective March 5, 1996 and was amended October 23, 1997
and April 14, 1999.
Mr. Alexander's Employment Agreement had an initial term of three years, and
automatically renews for successive one-year periods, unless earlier terminated
by us or by Mr. Alexander or otherwise is terminated in accordance with the
Employment Agreement. The Employment Agreement for Mr. Alexander provides for an
annual base salary of $450,000 as of September 28, 2002 and provides for Mr.
Alexander to earn a bonus up to 100% of annual base salary (the "Maximum Annual
Bonus") for services rendered based upon certain performance criteria. The
Employment Agreement also provides for the opportunity to participate in benefit
plans made available to our other senior executives and senior managers. We also
provide Mr. Alexander with term life insurance with a face amount equal to three
times his annual base salary. If a "change of control" (as defined in the
Employment Agreement) of Suburban occurs and within six months prior thereto or
at any time subsequent to such change of control Suburban terminates the
Executive's employment without "cause" or the Executive resigns with "good
reason" or the Executive terminates his employment during the six month period
commencing on the six month anniversary and ending on the twelve month
anniversary of a "change of control", then Mr. Alexander will be entitled to (i)
a lump sum severance payment equal to three times the sum of his annual base
salary in effect as of the date of termination and the Maximum Annual Bonus, and
(ii) medical benefits for three years from the date of such termination. The
Employment Agreement provides that if any payment received by Mr. Alexander is
subject to the 20% federal excise tax under Section 4999 of the Internal Revenue
Code, the payment will be grossed up 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.
Mr. Alexander also participates in the SERP, which provides retirement income
which could not be provided under our qualified plans by reason of limitations
contained in the Internal Revenue Code.
SEVERANCE PROTECTION PLAN FOR KEY EMPLOYEES
Our officers and key employees are provided with employment protection following
a "change of control" as defined in the Severance Protection Plan. This plan
provides for severance payments equal to sixty-five (65) weeks of base pay and
target bonuses for such officers and key employees following a "change of
control" and termination of employment. Pursuant to their Severance Protection
Agreements, Messrs. Dunn, Eastin, Plante and Jolly have been granted severance
protection payments of seventy-eight (78) weeks of base pay and target bonuses
following a "change in control" and termination of employment in lieu of
participation in the Severance Protection Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with our recapitalization in 1999, the General Partner acquired
the general partner interests from Millennium Chemicals Inc. for $6.0 million
(the "GP Loan") which was borrowed under a private placement with Mellon Bank
N.A. ("Mellon"). In connection with the GP Loan, the Operating Partnership
entered into an agreement with Mellon under which the Operating Partnership was
required (and had the right) to purchase the note evidencing the GP Loan in the
event of a default under the GP Loan by the General Partner. The Operating
Partnership agreed to maintain sufficient borrowing availability under its
available lines of credit to enable it to repurchase the GP Note in these
circumstances. If the Operating Partnership elected or was required to purchase
the GP Note from Mellon, the Operating Partnership had the right to cause up to
all of the Common Units deposited by management in a trust (amounting to 596,821
Common Units) to be forfeited and cancelled (and to cause all of the related
distributions to be forfeited), regardless of the amount paid by the Operating
Partnership to purchase the GP Note. In August 2002, the General Partner repaid
the remaining balance of the GP Loan to Mellon and, as a result, all of the
arrangements described above terminated.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date
regarding the beneficial ownership of units and incentive distribution rights by
each person or group known by us (based upon filings under Section 13(d) or (g)
under the Exchange Act) to own beneficially more than 5% thereof, each member of
the Board, each executive officer named in the Summary Compensation Table and
all members of the Board and executive officers as a group. Except as set forth
in the notes to the table, the business address of each person in the table is
c/o Suburban, One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey
07981-0206. Each individual or entity listed below has sole voting and
investment power over the units reported, except as noted below.
AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------------ -------------------- --------
Common Units Mark A. Alexander (a) 29,000 *
Michael J. Dunn, Jr. (a) 0 -
David R. Eastin 11,000 -
Robert M. Plante 12,262 -
Jeffrey S. Jolly 3,000 -
John Hoyt Stookey 11,519 *
Harold R. Logan, Jr. 15,064 *
Dudley C. Mecum 5,634 *
Mark J. Anton (b) 4,600 *
All Members of the Board
of Supervisors and Executive
Officers as a Group (13 persons) 133,641 *
Goldman, Sachs & Co. (c) 1,709,003 6.9%
85 Broad Street Common Units
New York, NY 10004
Incentive Suburban Energy Services
Distribution Rights Group LLC N/A N/A
* Less than 1%.
(a) Excludes the following numbers of Common Units as to which the following
individuals deferred receipt as described below: Mr. Alexander - 243,902
and Mr. Dunn - 48,780. In connection with our recapitalization in 1999,
members of the General Partner elected to defer receipt of a total of
596,821 Common Units issuable to them until the date the GP Loan was
repaid. These Common Units were held in trust pursuant to a Compensation
Deferral Plan, and the individuals who deferred receipt had no voting or
investment power over these Common Units until they were distributed by the
trust. The GP Loan was repaid in full in August 2002. With the exceptions
noted below, the deferred units were distributed to the members of the
General Partner in January 2003 in accordance with the terms of the
Compensation Deferral Plan and now may be voted and/or freely traded.
Messrs. Alexander and Dunn elected to further defer receipt of their
deferred units (totaling 292,682 Common Units) until January 2008. As a
consequence, their deferred units will remain in the trust until that time
and they will have no voting or investment power over these deferred units.
In the interim, however, Messrs. Alexander and Dunn have elected to receive
the quarterly cash distributions on these deferred units. Notwithstanding
the foregoing, if a "change of control" of Suburban occurs (as defined in
the Compensation Deferral Plan), all of the deferred Common Units (and any
related distributions) held in the trust automatically will become
distributable to Messrs. Alexander and Dunn.
(b) Mr. Anton shares voting and investment power over 3,600 Common Units with
his wife and over 1,000 Common Units with Lizmar Partners, L.P., a family
owned limited partnership of which he is its general partner.
(c) Holder reports having shared voting power with respect to all of the Common
Units and shared dispositive power with respect to all of the Common Units.
FIVE YEAR PERFORMANCE GRAPH(1)
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
27, 1997. 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 the four other propane-marketing companies whose
common units are publicly traded on the New York Stock Exchange. Our peer group
index includes the common units of the following companies: Ferrellgas Partners,
L.P., AmeriGas Partners, L.P., Star Gas Partners, L.P., and Heritage Propane
Partners, L.P.
(NOTE: THIS TABLE IS REPRESENTED BY A GRAPH WHICH HAS BEEN OMITTED FOR THE
ELECTRONIC FILING.)
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
SUBURBAN PROPANE PARTNERS, L.P. 100.00 108.48 124.50 154.12 192.15 227.01
PEER GROUP INDEX 100.00 95.87 90.38 102.15 136.05 151.97
NYSE MARKET INDEX 100.00 102.94 122.91 140.75 116.93 97.36
(1) The performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filings under the Securities Act of 1933, as amended or the Securities
Exchange Act of 1934, as amended, except to the extent that Suburban
incorporates this information by reference, and shall not otherwise be
deemed filed under such Acts.
EXHIBIT A
SUBURBAN PROPANE PARTNERS, L.P.
CHARTER OF THE AUDIT COMMITTEE
The management of Suburban Propane Partners L.P. (the "Partnership") is
responsible for the preparation, integrity and objectivity of the Partnership's
financial statements and for establishing and maintaining a system of internal
accounting and disclosure controls. It is the responsibility of the independent
auditors to express an opinion as to the conformance of the Partnership's
financial statements with generally accepted accounting principles based upon
their audit. The Audit Committee is a standing committee of the Board of
Supervisors (the "Board"). Its primary function is to assist the Board in
fulfilling its oversight responsibilities relating to the Partnership's
financial statements and other financial information; compliance with applicable
laws, regulations, and its code of conduct; the independence and qualifications
of the independent auditor; management's establishment of and adherence to a
system of internal accounting and disclosure controls; and the performance of
the internal audit function and independent auditors. The Audit Committee is
empowered to investigate any matter brought to its attention with full access to
all books, records, facilities and personnel of the Partnership and may retain,
at the Partnership's expense, outside counsel, auditors or other experts to
assist it.
MEMBERSHIP
- ----------
The Audit Committee shall be comprised of not fewer than three non-management
members of the Board, all of whom in the judgement of the Board meet the
standards of independence and other qualifications established by the
Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission (the "SEC")
and the New York Stock Exchange (the "NYSE"). All members of the Audit Committee
shall meet the financial literacy requirements of the SEC and the NYSE. In
addition, at least one member of the Audit Committee shall be considered an
"Audit Committee Financial Expert" as defined by the SEC.
AUTHORITY AND RESPONSIBILITIES
- ------------------------------
The following shall be the usual recurring activities of the Audit Committee to
assist the Board in fulfilling the oversight responsibilities described above.
The Audit Committee may modify these activities (consistent with the
requirements of the SEC and the NYSE) as particular circumstances warrant.
Specifically, the Audit Committee shall, to the extent required or deemed
appropriate:
o Provide a direct and independent line of communication between the internal
auditor, the independent auditors, and the Board.
o Report regularly to the Board regarding any issues that arise with respect
to the Partnership's financial statements or other financial information,
compliance with applicable laws, regulations, and the code of conduct;
independence and qualifications of the independent auditor; and the
performance of the independent and internal auditors.
o Retain, terminate, evaluate and oversee the principal independent auditors
in a manner that is consistent with the standards of independence and other
qualifications established by the Sarbanes-Oxley Act, the SEC and the NYSE.
Pre-approve all auditing services and permitted non-audit services
(including the fees and terms thereof), subject to the de minimis exception
under the federal securities laws. At least annually, obtain and review a
report by the independent auditor describing: the firm's internal
quality-control procedures; any material issues raised by the most recent
internal quality-control review, or peer review, of the firm, or by any
inquiry or investigation by governmental or professional authorities,
within the preceding five years, respecting one or more independent audits
carried out by the firm, and any steps taken to deal with any such issues;
and (to assess the auditor's independence) all relationships between the
independent auditor and the Partnership.
o Review and confirm the independence of the independent auditors by
obtaining written statements (as set forth in Independence Standards Board
Standard No. 1) from the independent auditors concerning any relationships
between the auditors and the Partnership or any other relationships,
including the provision of non-audit services, that may adversely affect
the independence of the auditors and assess the independence of the
independent auditor.
o Set clear hiring policies for employees or former employees of the
independent auditors.
o Review and approve the appointment, annual compensation and replacement of
the Partnership's internal auditor.
o Review, in consultation with the independent auditors and the internal
auditor, the scope and plan of the external audit and the scope and plan of
the work to be done by the internal auditor.
o Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives.
o Receive periodic reports from the Chief Financial Officer or the Controller
on accounting developments and issues, particularly those for which there
is a proposal for significant change.
o Discuss earnings press releases (including the use of non-GAAP financial
measures) prior to their release.
o Review with management and the independent auditors:
- The Partnership's annual and quarterly financial statements and
related footnotes and the independent auditors' report thereon,
including the effect of off-balance sheet structures on the
Partnership's financial statements and disclosures under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Partnership's annual and quarterly
reports to be filed with the SEC.
- Any difficulties or disputes with management encountered by the
independent auditors during the course of the audit or interim
reviews and any instances of second opinions sought by
management.
- The critical accounting policies and estimates used in preparing
the financial statements of the Partnership.
- Other material written communications between the independent
auditor and management, such as any management letter or schedule
of unadjusted difference.
- All alternative treatments of financial information within
generally accepted accounting principles that have been discussed
with management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent auditor.
- Any certification regarding the financial statements and other
financial information of the Partnership to be filed with the SEC
by the Partnership's senior executive and financial officers.
- Any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls.
- Other matters related to the conduct of the external audit, which
are required to be communicated to the committee under Statement
on Auditing Standards (SAS) No. 61 (Communications with Audit
Committees) and SAS No. 90 (Audit Communications).
- Other matters related to the Partnership's interim financial
results to be included in the quarterly reports to be filed with
the SEC and the matters to be communicated under SAS No. 71
(Interim Financial Information) and SAS No. 90.
o Consider and review with management, the independent auditors, and the
internal auditor the effectiveness of the Partnership's system of internal
controls over financial reporting, disclosure controls and procedures, and
the safeguarding of assets, including any significant deficiencies which
could adversely affect the Partnership's ability to record, process,
summarize and report financial data.
o Review the significant findings of the independent auditors and the
internal auditor.
o Establish procedures for processing complaints regarding accounting,
internal controls, or auditing matters, and the confidential, anonymous
submissions by employees of concerns regarding questionable accounting or
auditing matters or discrimination or harassment alleged to result from
employees' complaints regarding such matters.
o Inquire of management, the independent auditors, the internal auditor and
the General Counsel about the Partnership's risk assessment and risk
management policies, including the Partnership's major financial risk
exposure and the steps management has taken to monitor and mitigate such
risks.
o Review and investigate any matters pertaining to the integrity of
management, conflicts of interest, or adherence to standards of business
conduct as required by the Partnership's policies. Review and retain sole
authority to approve any requests for waivers of compliance with the
Partnership's code of conduct by senior management.
o Obtain advice and assistance from the Partnership's General Counsel and
outside legal, accounting and other advisors regarding compliance with
laws, regulations and internal procedures, contingent liabilities and risks
that may be material to the Partnership.
o Review the Audit Committee Charter periodically to ensure that it meets all
applicable legal and NYSE requirements, and recommend revisions, if
necessary, to the Board.
o Prepare the report required by the rules of the SEC to be included in the
Partnership's Tri-Annual Proxy Statement.
o Conduct an evaluation of the Audit Committee's performance at least
annually.
MEETING
- -------
The Committee shall convene at least four times each year with and without
management present. On a regular basis, the Audit Committee shall convene
separately with the independent auditors and the internal auditor. The Committee
may request any officer or employee of the Partnership to participate in a
Committee meeting or to meet with any members of, or advisors to, the Committee.
REPORTING
- ---------
Formal meeting minutes shall be maintained, distributed to Committee members,
and filed with the Corporate Secretary. Also, the Committee Chairman shall
provide regular oral reports to the Board.
Suburban Propane Partners, L.P.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8643
EDISON, NJ 08818-8643
VOTER CONTROL NUMBER
--------------------
2003 Tri-Annual Meeting of Limited Partners
Date: April 23, 2003
Time: 9:00 a.m. Local Time
Place: One Suburban Plaza
240 Route 10 West
Whippany, New Jersey 07981
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
- --------------------------------------------------------------------------------
7512
[ X ] Please mark votes as in this example.
- ------------------------------- Please mark box on right if an
SUBURBAN PROPANE PARTNERS, L.P. address change/comment has been
- ------------------------------- made on the reverse side of this
card. [ ]
1. Election of Elected
Supervisors
(Please see reverse) FOR WITHHELD
FOR ALL IF MARKED, VOTE
NOMINEES IS WITHHELD FROM
LISTED [ ] [ ] ALL NOMINEES LISTED
[ ] --------------------------------------------------------
For, except vote withheld from the following nominee(s):
Note: Please sign exactly as name appears to the left. Joint
owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please also give your
full title. If a corporation, please sign in full corporate
name by an authorized officer. If a partnership, please sign
in full partnership name by an authorized person.
Signature: _______________ Date: _____ Signature: _______________ Date: _____
DETACH HERE
- --------------------------------------------------------------------------------
PROXY
SUBURBAN PROPANE PARTNERS, L.P.
p PROXY FOR 2003 TRI-ANNUAL MEETING OF LIMITED PARTNERS
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF SUPERVISORS
O
X
Y
The undersigned hereby appoints each of Mark A. Alexander and Michael J. Dunn,
Jr., proxy and attorney in-fact with full power of substitution, on behalf and
in the name of the undersigned, to represent the undersigned and to vote as
specified on the reverse side all common units of Suburban Propane Partners,
L.P. which the undersigned is entitled to vote at the Tri-Annual Meeting of
Limited Partners on April 23, 2003 or any adjournments or postponements thereof.
Please mark, sign, date and return this proxy card promptly in the enclosed
envelope provided.
Nominees:
John Hoyt Stookey
Harold R. Logan, Jr.
Dudley C. Mecum
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS INDICATED, WILL BE VOTED "FOR" THE PROPOSAL LISTED, AND IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING, INCLUDING, AMONG OTHER THINGS, CONSIDERATION OF ANY MOTION MADE FOR
ADJOURNMENT OR POSTPONEMENT OF THE MEETING.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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