Filed by Bowne Pure Compliance





EXHIBIT
10.3




SUBURBAN PROPANE, L.P.

2003 LONG TERM INCENTIVE PLAN

(EFFECTIVE OCTOBER 1, 2002)

AS AMENDED ON OCTOBER 17, 2006, JULY 31, 2007, October 31, 2007, January 24, 2008 and

January 20, 2009




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 experience to the success of the Partnership’s business enterprise in such a manner
as to maximize the total return to the Partnership’s Unitholders. It is intended that this purpose
be achieved by extending to certain Participants added long-term incentive compensation for
continued service to the Partnership and achieving certain Performance Measures (as hereinafter
defined) which enhance the total return to the Partnership’s Unitholders. This Plan was adopted
effective October 1, 2002.



ARTICLE II

DEFINITIONS




For purposes of this Plan, capitalized terms shall have the following meanings:



2.1 “Beneficial Ownership” shall have the same meaning as that term is used within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.



2.2 “Beneficiary” means a Participant’s Beneficiary pursuant to Article VIII.



2.3 “Board” means the Board of Supervisors of Suburban Propane Partners, L.P.



2.4 “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.



2.5 “Change in Capitalization” means any increase or reduction in the number of Common
Units, or any change 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.


 


 









 





2.6 “Change of Control” shall mean:



(a) the date (which must be a date subsequent to the Effective Date) on which any Person
(including the Partnership’s general partner) or More than One Person Acting as a Group
(other than the Partnership and/or its Subsidiaries) acquires, during the 12 month period
ending on the date of the most recent acquisition, Common Units or other voting equity
interests eligible to vote for the election of Supervisors (or of any entity, including the
Partnership’s general partner,
that has the same authority as the Board to manage the affairs of the Partnership)
(“Voting Securities”) representing thirty percent 30% or more of the combined voting power of
the Partnership’s then outstanding Voting Securities; provided, however, that in determining
whether a Change of Control has occurred, Voting Securities which have been acquired in a
“Non-Control Acquisition” shall be excluded from the numerator. A “Non-Control Acquisition”
shall mean an acquisition of Voting Securities (x) by the Partnership, any of its
Subsidiaries and/or an employee benefit plan (or a trust forming a part thereof) maintained
by any one or more of them, or (y) in connection with a “Non-Control Transaction”; or



(b) the date of approval by the limited partners of the Partnership, of (w) a merger,
consolidation or reorganization involving the Partnership, unless (A) the holders of the
Voting Securities of the Partnership immediately before such merger, consolidation or
reorganization own, directly or indirectly, immediately following such merger, consolidation
or reorganization, at least fifty percent (50%) of the combined voting power of the
outstanding Voting Securities of the entity resulting from such merger, consolidation or
reorganization (the “Surviving Entity”) in substantially the same proportion as their
ownership of the Voting Securities of the Partnership immediately before such merger,
consolidation or reorganization, and (B) 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 Voting Securities of the Partnership), has Beneficial
Ownership of more than twenty five percent (25%) of the combined voting power of the
Surviving Entity’s then outstanding Voting Securities; (x) a complete liquidation or
dissolution of the Partnership; or (y) the sale or other disposition of forty percent (40%)
of the total gross fair market value of all the assets of the Partnership to any Person or
More than One Person Acting as a Group (other than a transfer to a Subsidiary). For this
purpose, gross fair market value means the value of the assets of the Partnership, or the
value of the assets being disposed of, determined without regard to any liability associated
with such assets. A transaction described in clause (A) or (B) of subsection (w) hereof shall
be referred to as a “Non-Control Transaction;” or



(c) the date a majority of the members of the Board is replaced during any
twelve-month period by the action of the Board taken when a majority of the Supervisors who
are then members of the Board are not Continuing Supervisors (for purposes of this section,
the term “Continuing Supervisor” means a Supervisor who was either (A) first elected or
appointed as a Supervisor prior to the Effective Date; or (B) subsequently elected or
appointed as a Supervisor if such Supervisor was nominated or appointed by at least a
majority of the then Continuing Supervisors);



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 Voting Securities 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 Voting Securities by the Partnership, and after such acquisition of Voting
Securities by the Partnership, 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.



2.7 “Committee” means the Compensation Committee of the Board.



2.8 “Common Unit” means the Common Units representing publicly traded limited partnership
interests of the Partnership.


 


 









 





2.9 “Disability” shall have the same meaning that such term (or similar term) has under
the long-term disability plan in which the Participant is eligible to be covered.



2.10 “Effective Date” shall mean October 1, 2002.



2.11 “Fair Market Value of Partnership’s Common Units” The twenty-day average of the
closing prices preceding a specific date.



2.12 “Fiscal Year” means the fiscal year adopted by the Partnership.



2.13 “General Partner” has the meaning set forth in the Partnership Agreement.



2.14 “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.



2.15 “Measurement Period” has the same meaning as set forth in Article 5.2.



2.16 “More than one Person Acting as a Group” has the same meaning as set forth in
Treasury Regulation 1.409A-3(i)(5)(v)(B).



2.17 “Participant” means an employee of Suburban Propane, L.P. designated by the
Committee to participate in the Plan.



2.18 “Partnership” means Suburban Propane, L.P. and Suburban Propane Partners, L.P.,
Delaware limited partnerships, and their successors.



2.19 “Partnership Agreement” means the Second Amended and Restated Agreement of Limited
Partnership of Suburban Propane Partners, L.P.



2.20 “Percentage of Three-Year Annualized Total Return to Unitholders” means a percentage
representing the three-year annualized total return to Unitholders from the commencement of the
Measurement Period to the culmination of the Measurement Period. This percentage shall be
calculated by an independent, third-party provider as designated by the Committee.



2.21 “Performance Measures” has the same meaning as set forth in Article 5.3.



2.22 “Person” shall have the same meaning 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 “Phantom Unit Distributions” shall have the same meaning as set forth in Article
5.4.



2.24 “Plan” means this Suburban Propane, L.P. 2003 Long Term Incentive Plan.



2.25 “Retirement” shall mean voluntary termination of employment by a Participant who has
attained age 55 and who has completed 10 years of “eligible service” to the Partnership or its
predecessors, in connection with a bona fide intent by the Participant to no longer seek full time
employment in the industries in which the Partnership then participates. Retirement shall not
include voluntary termination of employment by a Participant in response to, or anticipation of, a
termination of employment for Cause by the Partnership or one of its affiliates. The term
“eligible service” shall have the
same meaning as the term is used in the Pension Plan for eligible Employees of Suburban
Propane L.P. and Subsidiaries.


 


 









 





2.26 “Retirement Date” means the first day on which a retiring Participant is considered
inactive. For purposes of determining the abbreviated Measurement Period described in Article 20,
if this date occurs on a day on which the stock market is closed, for purposes of this Plan, the
Participant’s Retirement Date shall be the next business day on which the stock market is open.



2.27 “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.



2.28 “Target Grant” shall have the same meaning as set forth in Article 5.1.



2.29 “Unitholders” means the persons holding Common Units.



2.30 “Unvested Phantom Units” means a hypothetical number of units arrived at by dividing
the Target Grant established upon commencement of the Measurement Period by the Fair Market Value
of Partnership Common Units on the first day of the Measurement Period. If the market is closed on
the first day of the Measurement Period then the Fair Market Value on the next business day shall
be used.



2.31 “Vested Phantom Units” means the quantity of a Participant’s Unvested Phantom Units
which are earned upon culmination of the Measurement Period.



ARTICLE III

PARTICIPATION




Only those Participants designated from time to time by the Committee shall participate in the
Plan and receive Target Grants 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 for whom Target Grants shall be established;



(b) construe and interpret the Plan, the Target Grants, the Unvested and Vested Phantom
Units and corresponding Phantom Unit Distributions, 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 Measures, the Phantom Unit
Distributions or other aspects of the Plan, as the Committee determines are necessary and
appropriate.



ARTICLE V

GRANTS




5.1 Target Grant. The Committee shall establish a Target Grant for each Participant at the
beginning of each Fiscal Year equal to a designated percentage of such Participant’s base salary at
the start of the Fiscal Year. Each participant’s designated percentage shall be recorded in the
minutes of the Committee. In the event a Participant’s base salary for the respective Fiscal Year
was adjusted within 120 days after the start of the Fiscal Year, the Target Grant will be computed
using such adjusted base salary.



5.2 Measurement Period. This is a three-year period commencing on the first day of the
fiscal year during which the Target Grant was established and ending on the last day of the second
fiscal year following the fiscal year during which the Target Grant was established.



5.3 Performance Measures. The percentage of the Unvested Phantom Units that shall be earned
and immediately converted to Vested Phantom Units at the end of the Measurement Period shall be
determined based upon the ranking of the Partnership’s Percentage of Three-Year Annualized Total
Return to Unitholders in a peer group of eleven other publicly traded partnerships selected by the
Committee. If, at the end of the Measurement Period, it is determined that less than 100% of the
Unvested Phantom Units have been earned, the unearned portion of said Unvested Phantom Units shall
be forfeited.



The following chart illustrates the percentage of the Unvested Phantom Units that shall be
converted to Vested Phantom Units based upon the Partnership’s ranking, at the end of the
Measurement Period, of Percentage of Three-Year Annualized Total Return to Unitholders among the
peer group established pursuant to Article 5.3.



	 	 	 	 	 
	THREE-YEAR ANNUALIZED TOTAL	 	 	 
	RETURN TO UNITHOLDERS PERCENTAGE	 	PERCENT OF TARGET	 
	PERFORMANCE	 	GRANT EARNED	 
	Ranked in top 3 (top quartile)
	 	 	125      	%
	Ranked between 4 – 6 (50th/75th quartile)
	 	 	100      	%
	Ranked between 7 – 9 (25th quartile)
	 	 	50      	%
	Ranked 10 – 12 (bottom quartile)
	 	 	0      	%






5.4 Phantom Unit Distributions. These are cumulative phantom partnership cash distributions
equal to each Participant’s Vested Phantom Units multiplied by the per-Common Unit distribution
declared and paid by the Partnership for each quarter over the course of the Measurement Period.


 


 









 





5.5 Plan Distributions. Upon vesting, each Participant will receive a cash payment equal
to the quantity of his Vested Phantom Units multiplied by the Fair Market Value of the
Partnership’s Common Units on the last date of the Measurement Period plus the
Participant’s Phantom Unit Distributions.



ARTICLE VI

VESTING




6.1 Vesting Schedule. Subject to Articles 6.2 and 6.3, vesting is in accordance with
Article 5.3. Notwithstanding anything in this Article VI to the contrary, the Committee may
accelerate the vesting of Unvested Phantom Units and all accrued Phantom Unit Distributions 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, the cash value of 125% of all Unvested Phantom Units and a sum equal to 125% of the
Unvested Phantom Units multiplied by an amount equal to the cumulative, per-Common Unit
distribution from the beginning of the Measurement Period through the date on which the Change of
Control occurred shall be 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 Articles 6.2, 6.4 and 6.5, Unvested Phantom Units 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 Articles 6.4 and 6.5; (b) any attempted or completed transfer, sale,
pledge, hypothecation, or assignment by the Participant of the Unvested Phantom Units.



6.4 Disability or Death. Notwithstanding the provisions of Article 6.3, if a Participant’s
employment terminates as a result of Disability or death, all Unvested Phantom Units and the
Phantom Unit Distributions associated with said Unvested Phantom Units for such Participant shall
vest in accordance with Articles 6.1 and 6.2, as applicable, and shall be paid in accordance with
Article VII and VIII.



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, all Unvested Phantom Units and all Phantom Unit Distributions associated with said Unvested
Phantom Units shall vest upon the next succeeding scheduled vesting date pursuant to Articles 6.1
or 6.2, as applicable.



6.6 Notwithstanding anything in this Plan to the contrary, effective for Target Grants
established for the Partnership’s 2008 and later fiscal years, said Target Grants shall be deemed
''Incentive Compensation’’ covered by the terms of the Partnership’s Incentive Compensation
Recoupment Policy (the ''Policy’’) adopted by the Board on April 25, 2007, which is incorporated
herein by reference. In accordance with the Policy, in the event of a significant restatement of
the Partnership’s published financial results, where the percentage of the Unvested Phantom Units
derived from Target Grants subject to this Section 6.6 that are converted to Vested Phantom Units
pursuant to Section 5.3 herein would have been lower had the vesting percentage been calculated
based on the restated financial results, the Committee may review the circumstances surrounding the
restatement and shall have the sole and absolute discretion and authority to determine whether to
seek reimbursement of the amount, or some lesser portion thereof (without interest), by which
certain Participants’ distributions under Section 5.5 of the Plan exceeded the lower payment that
would have been made based on the restated financial results, regardless of the fault, misconduct
or responsibility of any such Participants in the restatement. If the Committee determines that any
fraud or intentional misconduct by a Participant was a contributing factor to the Partnership
having to make a significant restatement, then, in addition to other disciplinary action, the
Committee may require reimbursement of all, or any part, of the compensation paid to that executive
in excess of that executive’s base salary, plus interest, including distributions made under the
Plan, for the period of such restatement.
This Section 6.6 shall be interpreted and administered in accordance with the Policy as in
effect from time to time. In the case of any inconsistency between the Policy and this Section 6.6,
the Policy shall control.


 


 









 





ARTICLE VII

PAYMENTS




The Plan Distributions associated with Vested Phantom Units earned by a Participant under the
Plan shall be paid to the Participant within thirty days following the culmination of the
Measurement Period.



ARTICLE VIII

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 or 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 marriage), the designation of the spouse as
Beneficiary will be deemed to have been revoked unless the Participant reaffirms such designation
thereafter.



ARTICLE IX

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 Target Grant may be established
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 Target Grants
established for a Participant under the Plan, except with the consent of the Participant.



ARTICLE X

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 XI

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 the establishment of a Target Grant other than at the sole
discretion of the Committee;



(b) give any person any rights whatsoever with respect to a Target Grant or Unvested
Phantom Units 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 of time.



ARTICLE XII

REGULATIONS AND OTHER APPROVALS; GOVERNING LAW




12.1 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.



12.2 Except as provided in Article IX 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 XIII

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 XIV

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 Phantom Units or Phantom Unit Distributions made pursuant to the
Plan.



ARTICLE XV

RIGHT OF DISCHARGE RESERVE




Neither the Plan nor the establishment of any Target Grant shall guarantee any Participant
continued employment with the Partnership, or a subsidiary, or guarantee the establishment of
future Target Grants.



ARTICLE XVI

NATURE OF PAYMENTS




All Phantom Units awarded and Phantom Unit Distributions made pursuant to the Plan are in
consideration of services for the Partnership or its subsidiaries. The Phantom Units and Phantom
Unit Distributions 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 XVII

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 XVIII

SEVERABILITY




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.


 


 









 





ARTICLE XIX

DEFERRAL




Payments under the Plan may not be deferred by the Participants.



ARTICLE XX

RETIREMENT OF PARTICIPANT




Upon Retirement, a Participant shall not be eligible for any additional grants under the Plan;
however, all Unvested Phantom Units and all Phantom Unit Distributions associated with said
Unvested Phantom Units shall vest upon their normal scheduled vesting dates pursuant to Articles
6.1 or 6.2, as applicable.