Document:

Exhibit 10.2

EXHIBIT 10.2

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated as of January 20, 2009, by and between Suburban Propane, L.P. (the
“Partnership”) and Michael J. Dunn, Jr. (the “Executive”).

WHEREAS, the Partnership desires to retain the services of the Executive and the Executive
desires to perform services for the Partnership, in each case, upon the terms and conditions set
forth herein; and

WHEREAS, the Partnership and the Executive are party to an Employment Agreement dated November
13, 2008 (the “Previous Agreement”), and

WHEREAS, the Executive is currently President of the Partnership and desires to continue in
such position;

WHEREAS, the Partnership desires to continue to employ the Executive as President;

WHEREAS, the Parties desire to amend and restate the Previous Agreement to the extent
necessary to cause the definition of a Change of Control to be consistent with the definitions used
in other compensation plans maintained by the Partnership.

NOW, THEREFORE, in consideration of the premises and the mutual benefits and covenants
contained herein, the parties hereto, intending to be bound, hereby agree as follows:

1. Term

The initial term of employment under this Agreement shall be for the period commencing on
February 1, 2007 (the “Effective Date”) and ending on the second anniversary thereof (the
“Renewal Date”), or if extended pursuant to this Section 1, ending on any anniversary of
the Renewal Date, subject to termination as hereinafter provided (such initial period and
extension(s) thereof being hereinafter referred to as the “Employment Term”). Unless
earlier terminated in accordance with the provisions of Section 5 hereof, upon the Renewal
Date and upon each anniversary date thereof, the Employment Term shall be automatically extended
for an additional period of one year upon the terms and conditions set forth herein unless written
notice of termination (a “Non-Renewal Notice”) is given by either party at least ninety
days prior to the Renewal Date or relevant anniversary thereof, in which event the provisions of
Section 6 shall apply.

2. Duties and Status

2.1. Duties. The Partnership hereby employs the Executive as President. Executive
shall report to the Chief Executive Officer and shall perform duties of the type customarily
performed by persons serving in the position of President of a business of the size, type and
nature of the Partnership. If requested to do so, the Executive shall serve (without additional
compensation) on the Board of Supervisors of the Partnership and Suburban Propane Partners, L.P.
(the “MLP”) (the “Board”) and committees thereof. The Executive accepts such positions and
agrees to perform those duties, services and responsibilities incident thereto as may be assigned
to him or vested in him by the Chief Executive Officer and the Board from time to time. The
Executive also agrees (a) subject to Section 2.2 below, to devote his full business time, attention
and skill to the performance of, and to perform faithfully, efficiently and with undivided loyalty,
such duties, services and responsibilities and (b) to use his best efforts to promote the interests
of the Partnership.

2.2. Exclusive Employment. During the Employment Term, the Executive shall not engage
in other employment or consulting work or any trade or business for his own account or for or on
behalf of any other person, firm or corporation. Notwithstanding the foregoing, during the
Employment Term the Executive may (a) serve on (i) civil and charitable boards and committees and
(ii) such other corporate boards or committees as are approved by the Board, which approval shall
not be unreasonably withheld and (b) manage personal investments, provided that such service or management does not interfere
with the performance of the Executive’s duties hereunder.

 

 

 

3. Compensation and Benefits

In consideration for his services under this Agreement. the Executive shall be compensated as
follows:

3.1. Salary. The Partnership shall pay to the Executive during the Employment Term a
salary (the “Base Salary”), payable in accordance with the normal payroll practices of the
Partnership then in effect, in the amount of $400,000 per fiscal year (pro rated in the case of the
first fiscal year and any other partial fiscal year). The amount of Base Salary shall be reviewed
by the Compensation Committee of the Board (the “Compensation Committee”) on at least an annual
basis and may be increased as the Compensation Committee deems appropriate but Base Salary, as
increased, may not be decreased during the Employment Term.

3.2. Bonuses. For each fiscal year (or portion thereof) of the Partnership during the
Employment Term, the Executive will be eligible for a bonus under the Partnership’s Annual
Incentive Plan for Salaried Employees, as in effect from time to time, based on the attainment by
the Partnership of performance targets set by the Compensation Committee. The amount of such bonus
for a fiscal year or portion thereof (the “Annual Bonus”) payable pursuant to the
terms hereof shall not exceed 110% of the Executive’s Base Salary for such year (or portion
thereof) to which it relates (the “Maximum Annual Bonus”). Any Annual Bonus under this
Section 3.2 shall be paid no later than the 15th day of the third month following the
end of the calendar year that includes the end of the fiscal year used in determining achievement
of the performance targets payable (the exact payment date to be determined by the Company).

3.3. Long-Term Incentive Compensation Programs. Executive shall be eligible to
participate in long-term incentive compensation programs (including the 2000 Restricted Unit Plan
and the 2003 Long-Term Incentive Plan) applicable to other senior executives of the Partnership in
the discretion of the Compensation Committee from time to time.

3.4. Vacation. The Executive shall be entitled to such number of annual paid vacation
days and the number of days of paid holidays, leaves of absence, and leaves for illness or
temporary disability as may be provided in the policies of the Partnership in respect of other
executives and senior managers of the Partnership, but in no event shall the Executive be entitled
to less than four weeks vacation per year.

3.5. Reimbursement of Expenses. The Executive shall be entitled to receive
reimbursement of all reasonable expenses incurred by him in connection with the performance of his
duties hereunder, in accordance with the policies and procedures of the Partnership.

3.6. Benefits. The Executive shall be entitled to participate in employee benefit and
fringe benefit plans and programs (including life, health, disability and officer indemnity
insurance and retirement plans) generally made available to other senior executives and senior
managers by the Partnership. Nothing in this Agreement shall restrict the right of the Partnership
to amend, modify or terminate any such plans or programs.

3.7. Company Car. The Partnership shall reimburse the Executive for any and all costs
and expenses reasonably incurred by the Executive in connection with the Executive’s leasing of a
car in accordance with Partnership policy relating to gas, insurance, maintenance, etc. provided,
however, (i) the Partnership shall pay the expenses not later than the end of the calendar year
following the calendar year in which the expenses are incurred, (ii) the amount of such expenses
that the Partnership is obligated to pay in any given calendar year shall not affect the expenses
that the Partnership is obligated to pay in any other calendar year, and (iii) the Executive’s
right to have the Partnership pay such expenses may not be liquidated or exchanged for any other
benefit.

 

 

 

4. Non-Competition; Confidential Information

The Executive and the Partnership recognize that due to the nature of the Executive’s
engagement hereunder and the relationship of the Executive to the Partnership and the MLP, the
Executive will have access to and will acquire, and may assist in developing, confidential and
proprietary information relating to the business and operations of the Partnership, the MLP and
their affiliates, including, without limiting the generality of the foregoing, information with
respect to the business of the Partnership, the MLP and their affiliates. The Executive
acknowledges that such information will be of central importance to the business of the
Partnership, the MLP and their affiliates and that disclosure of it to, or its use by, others could
cause substantial loss to the Partnership and the MLP. The Executive accordingly agrees as
follows:

4.1. Non-Competition; Non-Solicitation.

(a) From the Effective Date until the later of (i) if any severance is payable pursuant to
Section 6.2 hereof, the expiration of the Severance Period (as defined in Section 6.2 hereof) or
(ii) the first anniversary of the Date of Termination (as defined in Section 5.7 hereof), the
Executive shall not, directly or indirectly, either individually or as owner, partner, investor,
agent, director, officer, employee, consultant, independent contractor or otherwise, except for the
account of and on behalf of the Partnership, the MLP or their affiliates, own, manage, operate,
direct, join, control, be employed by, or participate in the ownership, management, operation or
control of, or be connected in any manner with, including, but not limited to, holding the
positions of shareholder, member, director, officer, consultant, agent, representative, independent
contractor, employee, partner or investor, in or for any business or enterprise engaged in (i) the
marketing or distribution of domestic retail distribution of propane, fuel oil and refined fuels
for residential, commercial, industrial (including engine fuel), agricultural or other retail
users, (ii) marketing of natural gas and electricity in deregulated markets (ii) the wholesale
distribution of propane in the United States or the wholesale brokerage of propane in Canada, or
(iii) the domestic retail distribution of energy-related supplies or equipment, including home and
commercial appliances.

(b) From the Effective Date until the second anniversary of the Date of Termination (as
defined in Section 5.7 hereof), the Executive shall not, directly or indirectly, either
individually or as owner, partner, shareholder, member, investor, agent, director, officer,
employee, consultant, agent, independent contractor or otherwise, except for the account of and on
behalf of the Partnership, the MLP or their affiliates, solicit, endeavor to entice away from the
Partnership, the MLP or their affiliates, or otherwise engage in any activity to, directly or
indirectly, influence, attempt to influence, disrupt or terminate the relationship of the
Partnership, the MLP or any of their affiliates with, any of its customers, prospective customers,
suppliers, prospective suppliers, employees, directors, independent contractors, representatives,
agents or other persons or entities with a past, present or prospective relationship with the
Partnership, the MLP or any of their affiliates .

(c) Nothing in this Section 4.1 shall be construed to prevent the Executive from owning as an
investment not more than 0.5% of a class of equity or debt securities issued by any competitor of
the Partnership, which securities are publicly traded and registered under Section 12 of the
Securities Exchange Act of 1934.

4.2. Proprietary Information. The Executive shall keep confidential any and all
“confidential or proprietary information” (as defined hereinafter) of the Partnership and its
affiliates, and shall not, other than in connection with the business of the Partnership and the
MLP or as required, in the opinion of counsel, by law or an order of a court or regulatory agency,
directly or indirectly, disclose any such information to any person or entity, or use the same in
any way and then, only after as much notice is provided to the Partnership as is practicable under
the circumstances. Upon the expiration of the Employment Term, the Executive shall promptly return
to the Partnership all property, keys, notes, memoranda, writings, lists (including customer
lists), files, reports, correspondence, logs, machines, software, technical data or any other
tangible product or document which has been produced by, received by, or otherwise submitted to the
Executive by the Partnership or any of its affiliates at any time. For purposes of this Agreement,
“confidential or proprietary information” means any information relating to the Partnership or any
affiliate of the Partnership which is not generally available from sources outside the Partnership
or any of its affiliates (other than as a result of disclosure by the Executive).

 

 

 

4.3. Partnership’s Remedies for Breach. It is recognized that damages in the event of
breach of this Section 4 by the Executive would be difficult to ascertain, and it is therefore
agreed that each of the Partnership and the MLP, in addition to and without limiting any other
remedy or right either may have, shall have the right to an injunction or other equitable relief in
any court of competent jurisdiction, enjoining any such breach or prospective breach. The
existence of this right shall not preclude any other rights and remedies at law or in equity which
the Partnership or the MLP may have. Neither the Partnership nor the MLP shall be required to post
any bond in connection with the foregoing. The Executive acknowledges and agrees that the
provisions of this Section 4 are reasonable and necessary for the successful operation of the
Partnership and the MLP and that the Partnership would not have entered into this Agreement if the
Executive had not agreed to the provisions of this Section 4.

4.4. Enforceability. The covenants set forth in Sections 4.1 and Section 4.2 shall be
construed as independent of any of the other provisions contained in this Agreement and shall be
enforceable as aforesaid, notwithstanding the existence of any claim or cause of action of the
Executive against the Partnership, the MLP or any of their affiliates, whether based on this
Agreement or otherwise. In the event that any of the provisions of this Section 4 should ever be
adjudicated to exceed the time or other limitations permitted by applicable law, then such
provisions shall be deemed reformed in any jurisdiction to the time or other limitations permitted
by applicable law. The provisions of this Section 4 shall survive the expiration or the termination
of this Agreement. If the Partnership asserts a claim against the Executive for violation of any
covenant set forth in Section 4.1 or Section 4.2 and the Executive prevails on the merits in a
material respect on such claim, the Partnership shall pay the reasonable attorney’s fees and costs
incurred by the Executive in connection with such claim.

5. Termination of Employment

5.1. Death or Disability. The Employment Term shall terminate automatically upon the
Executive’s death or Disability (as hereinafter defined). “Disability” shall mean any physical or
mental impairment, infirmity or incapacity rendering the Executive substantially unable to perform
his duties hereunder for a period of time exceeding 180 days in the aggregate during any period of
twelve consecutive months. A determination of Disability shall be made by a physician independent
of the Partnership chosen by the Partnership. In the event of an initial determination of
Disability, the Executive may seek a second opinion of his choosing. Where the first and second
opinions differ, a third opinion rendered by a physician mutually agreed to by the Partnership and
the Executive shall be deemed final. For so long as the Executive is receiving the Base Salary
during such twelve month period, any benefits under the Partnership’s disability insurance policies
to which the Executive would be entitled with respect to such period shall accrue to, and be for
the benefit of, the Partnership.

5.2. Cause. The Partnership may terminate the Executive’s employment and the
Employment Term for “Cause.” For purposes of this Agreement, “Cause” shall mean (a) the
Executive’s gross negligence or willful misconduct in the performance of his duties, (b) the
Executive’s willful or grossly negligent failure to perform his duties, (c) the breach by the
Executive of any written covenants made to the Partnership or the MLP including a material breach
by the Executive of any of the provisions of Section 4.1 or 4.2 hereof; (d) dishonest, fraudulent
or unlawful behavior by the Executive (whether or not in conjunction with employment) including a
willful or grossly negligent violation of any securities or financial reporting laws, rules or
regulations or any policy of the Partnership or the MLP relating to the foregoing or the Executive
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, the MLP and any of their affiliates, or (e) willful or reckless breach by the
Executive of any policy adopted by the Partnership or the MLP, concerning conflicts of interest,
standards of business conduct or fair employment practices or procedures with respect to compliance
with applicable law.

5.3. Good Reason. The Executive’s employment and the Employment Term may be
terminated by the Executive for Good Reason. For purposes of this Agreement. “Good Reason” means:
(a) any failure by the Partnership to comply in any material respect with any of the provisions of
Article 3 of this Agreement which is not cured within thirty days following notice by the
Executive; (b) a material diminution in the Executive’s title, authority, duties or
responsibilities, without the consent of the Executive; or (c) the requirement by the Partnership,
without the Executive’s consent, that the Executive be
based more than 35 miles from the Executive’s present office location or more than 50 miles
from the Executive’s present residence.

 

 

 

5.4. Termination without Cause. Notwithstanding anything to the contrary herein, the
Partnership may terminate the Executive’s employment hereunder and the Employment Term at any time
and the Executive may be removed as an officer of the Partnership at any time, subject to the
provisions of Section 6.

5.5. Non-Renewal. The Executive’s employment and the Employment Term may be
terminated by either party pursuant to a Non-Renewal Notice, subject to the provisions of
Section 6.

5.6. Notice of Termination. Any termination of employment hereunder (other than
termination as a result of death) by the Partnership or by the Executive shall be communicated by
Notice of Termination (as hereinafter defined) to the other party hereto given in accordance with
Section 8.2 of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (a) indicates the specific termination provision in this Agreement relied
upon, and (b) sets forth the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated.

5.7. Date of Termination. The termination of the Executive’s employment pursuant to
Section 5 shall be effective on the date that the Executive or the Partnership, as the case may be,
receives the Notice of Termination; provided however, that (a) if the Executive’s employment is
terminated by reason of death, the Date of Termination shall be the date of death of the Executive,
(b) if the Executive’s employment is terminated by reason of Disability, the Date of Termination
shall be the date that a physician finally determines in accordance with Section 5.1 that a
Disability exists with respect to the Executive, (c) if the Executive terminates his employment,
the Date of Termination shall be the tenth Business Day after receipt by the Partnership of the
Notice of Termination (or, in the event of termination for Good Reason as set forth in Section
5.3(a), the tenth Business Day after the expiration of the 30 day cure period) and (d) if the
Executive’s employment is terminated pursuant to a Non-Renewal Notice, the Date of Termination
shall be the Renewal Date. For purposes of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “Separation from Service” as defined in
Section 9.1 herein.

6. Payment Upon Termination

6.1. Change of Control. In the event that (x) within six months prior to a Change of
Control or (y) within two years following a Change of Control, either the Partnership terminates
the Executive’s employment hereunder without Cause (including pursuant to a Non-Renewal Notice) or
the Executive terminates his employment hereunder with Good Reason, (a) the Partnership shall pay
to the Executive, in accordance with Section 6.4 herein, the sum of (i) the portion of the Base
Salary earned but unpaid as of the Date of Termination, (ii) the Pro-rata Bonus (as defined below)
and (iii) an amount equal to two times the sum of (A) the Base Salary plus (B) the Maximum Annual
Bonus and (b) the Partnership shall provide to the Executive and his dependents from the Date of
Termination until the expiration of the second anniversary of the Date of Termination, (the
“Severance Period”), medical benefits substantially equivalent to the medical benefits provided by
the Partnership to senior executives and their dependents during such period; provided,
however, (i) that benefits otherwise receivable by the Executive pursuant to clause (b) of
this Section 6.1 shall be reduced to the extent comparable benefits are actually provided to the
Executive or his dependents by another party (and the Executive shall report to the Partnership any
benefits that are actually provided to him); (ii) the Severance Period shall run concurrently with
any period for which Executive is eligible to elect health coverage under COBRA; (iii) during the
Severance Period, the benefits provided in any one calendar year shall not affect the amount of
benefits provided in any other calendar year; (iv) the reimbursement of an eligible taxable expense
shall be made on or before the end of the calendar year following the calendar year in which the
expense was incurred; and (v) the Executive’s rights pursuant to this Section 6.1(b) shall not be
subject to liquidation or exchange for another benefit. The Partnership’s obligation and the
Executive’s rights under clause (a) (ii) and (iii) and clause (b) of this Section 6.1 shall
terminate immediately upon the occurrence of a Competition Event (as defined below).

 

 

 

6.2. Good Reason, Termination without Cause. In the event that the Executive
terminates his employment for Good Reason or the Partnership terminates the Executive’s employment
without Cause or
has delivered a Non-Renewal Notice to the Executive, the Partnership shall, without
duplication of any amounts paid or benefits provided pursuant to Section 6.1, (a) pay to the
Executive, in accordance with Section 6.4 herein, (i) all earned but unpaid Base Salary as of the
Date of Termination, (ii) an amount equal to two times the Base Salary and (iii) the Annual Bonus
the Executive would have received for such fiscal year, calculated as if the executive had remained
employed for the entire fiscal year determined and paid in accordance with Section 3.2 herein and
(b) provide to the Executive and his dependents, until the expiration of the Severance Period,
medical benefits substantially equivalent to the medical benefits provided by the Partnership to
senior executives and their dependents during such period; provided, however, that
(i) benefits otherwise receivable by the Executive pursuant to clause (b) of this Section 6.2 shall
be reduced to the extent comparable benefits are actually provided on the Executive’s behalf by
another party (and the Executive shall report to the Partnership any benefits that are actually
provided to him); (ii) the Severance Period shall run concurrently with any period for which
Executive is eligible to elect health coverage under COBRA; (iii) during the Severance Period, the
benefits provided in any one calendar year shall not affect the amount of benefits provided in any
other calendar year; (iv) the reimbursement of an eligible taxable expense shall be made on or
before the end of the calendar year following the calendar year in which the expense was incurred;
and (v) the Executive’s rights pursuant to this Section 6.2(b) shall not be subject to liquidation
or exchange for another benefit. The Partnership’s obligation and the Executive’s rights under
clause (a)(ii) and (iii) and clause (b) of this Section 6.2 shall terminate immediately upon the
occurrence of a Competition Event (as defined below). Notwithstanding anything in this Agreement
to the contrary the Executive’s Retirement (as defined below) shall not to give rise to any
benefits under this section 6.2.

6.3. Death, Disability, Cause, Without Good Reason. In the event that the Executive’s
employment is terminated (a) by reason of the Executive’s death or Disability, (b) by the
Partnership for Cause, (c) by the Executive without Good Reason or (d) by the Executive pursuant to
a Non-Renewal Notice, the Partnership shall pay to the Executive, the Executive’s estate, or the
Executive’s legal representative, as the case may be, in accordance with Section 6.4 herein, (i)
the Base Salary earned but unpaid as of the Date of Termination and (ii) in the event that such
termination is by reason of death, Disability or the delivery of a Non-Renewal Notice, the Pro-rata
Bonus (as defined below).

6.4 Timing of Payments. (a) With respect to payments made to the Executive pursuant to
clause (a)(i) of Sections 6.1 and 6.2 and clause (i) of Section 6.3 (unpaid Base Salary), the
Partnership shall pay the Executive in a lump sum in cash, within 30 days after the Date of
Termination.

(b) With respect to payments made to the Executive pursuant to clause (a)(ii) of Sections 6.1,
and clause (ii) of Section 6.3 (Pro-rata Bonus) and clause (a)(iii) of Section 6.2 (Annual Bonus),
the Partnership shall pay the Executive in a lump sum in cash no later than the 15th day
of the third month following the end of the calendar year that includes the end of the fiscal year
used in determining achievement of the performance targets applicable to such payment in accordance
with Section 3.2 herein.

(c) With respect to payments made to the Executive pursuant to clause (a)(iii) of Section 6.1
and (a)(ii) of Section 6.2 (separation pay), if the Executive is a “Specified Employee” as defined
in Section 9.2 herein on his Date of Termination, the Partnership shall pay the Executive in a lump
sum in cash upon the earlier of (a) a date no later than 30 days after Executive’s death, or (b)
the first day of the seventh month following Executive’s Date of Termination. In the case of any
such delayed payment, the Partnership shall pay interest on the delayed amount at a per annum rate
equal to the short-term applicable federal rate in accordance with section 1274(d) of the Internal
Revenue Code in effect for the month in which Date of Termination occurs. If the Executive is not a
Specified Employee on his Date of Termination, the Partnership shall pay the Executive in a lump
sum in cash, within 60 days after the Date of Termination.

6.5. Excise Taxes.

(a) In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”)) to the Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, his employment with the Partnership or a change in ownership or
effective control of the Partnership or of a substantial portion of its assets (a “Payment” or
“Payments”) would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive will
be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes (including the Excise Tax, any interest or penalties, other
than interest and penalties imposed by reason of the Executive’s failure to file timely a tax
return or pay taxes shown due on his return, imposed with respect to such taxes and the Excise
Tax), including any income tax and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

 

 

 

(b) An initial determination as to whether a Gross-Up Payment is required pursuant to this
Agreement and the amount of such Gross-Up Payment shall be made at the Partnership’s expense by an
accounting firm selected by the Partnership and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the United States (the “Accounting
Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with
detailed supporting calculations and documentation, to the Partnership and the Executive within
five days of the Executive’s termination of employment (if applicable) or such other time as
requested by the Partnership or by the Executive (provided the Executive reasonably believes that
any of the Payments may be subject to the Excise Tax). Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the right to dispute the Determination
(the “Dispute”). The Gross-Up Payment, if any, as determined pursuant to this Section 6.5
shall be paid by the Partnership to the Executive within five days of the receipt of the
Determination. The existence of the Dispute shall not in any way affect the Executive’s right to
receive the Gross-Up Payment in accordance with the Determination. If there is no Dispute, the
Determination shall be binding, final and conclusive upon the Partnership and the Executive subject
to the application of Section 6.5(c) below. Notwithstanding anything contained in this Agreement to
the contrary, any Gross-Up Payment pursuant to this section 6.5(ii) shall be paid no later than the
end of the calendar year following the calendar year in which the corresponding taxes are remitted
to the applicable government taxing authority.

(c) As a result of the uncertainty in the application of Sections 4999 and 280G of the Code,
it is possible that a Gross-Up Payment (or a portion thereof) will be paid which should not have
been paid (an “Excess Payment”) or a Gross-Up Payment (or a portion thereof) which should
have been paid will not have been paid (an “Underpayment”). An Underpayment shall be
deemed to have occurred (i) upon notice (formal or informal) to the Executive from any governmental
taxing authority that the Executive’s tax liability (whether in respect of the Executive’s current
taxable year or in respect of any prior taxable year) may be increased by reason of the imposition
of the Excise Tax on a Payment or Payments with respect to which the Partnership has failed to make
a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by reason of
determination by the Partnership (which shall include the position taken by the Partnership,
together with its consolidated group, on its federal income tax return) or (iv) upon the resolution
of the Dispute to the Executive’s satisfaction. If an Underpayment occurs, the Executive shall
promptly notify the Partnership and the Partnership, subject to its rights to dispute whether an
overpayment exists and the amount thereof, shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has requested payment, pay to
the Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any
interest and penalties (other than interest and penalties imposed by reason of the Executive’s
failure to file timely a tax return or pay taxes shown due on the Executive’s return) imposed on
the Underpayment. Notwithstanding anything contained in this Agreement to the contrary, any
Underpayment pursuant to this section 6.5(c) shall be paid to the Executive no later than the end
of the calendar year following the calendar year in the corresponding taxes are remitted to the
papplicable government taxing authority. An Excess Payment shall be deemed to have occurred upon a
“Final Determination” (as hereinafter defined) that the Excise Tax shall not be imposed upon a
Payment or Payments (or portion thereof) with respect to which the Executive had previously
received a Gross-Up Payment. A “Final Determination” shall be deemed to have occurred when the
Executive has received from the applicable government taxing authority a refund of taxes or other
reduction in the Executive’s tax liability by reason of the Excess Payment and upon either (x) the
date a determination is made by, or an agreement is entered into with, the applicable governmental
taxing authority which finally and conclusively binds the Executive and such taxing authority, or
in the event that a claim is brought before a court of competent jurisdiction, the date upon which
a final determination has
been made by such court and either all appeals have been taken and finally resolved or the
time for all appeals has expired or (y) the statute of limitations with respect to the Executive’s
applicable tax return has expired. If an Excess Payment is determined to have been made, the
amount of the Excess Payment shall be treated as a loan by the Partnership to the Executive and the
Executive shall pay to the Partnership on demand (but not less than 10 days after the determination
of such Excess Payment and written notice has been delivered to the Executive) the amount of the
Excess Payment plus interest at an annual rate equal to the Applicable Federal Rate provided for in
Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment
relates) was paid to the Executive until the date of repayment to the Partnership.

(d) In the event that, according to the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Partnership shall pay to the applicable government taxing authorities as
Excise Tax and income tax withholding, the amount of the Excise Tax and income tax that the
Partnership has actually withheld from the Payment or Payments.

 

 

 

6.6. Certain Definitions.

(a) “Pro-rata Bonus” means the bonus that the Executive would have been entitled to receive
under Section 3.2 as an Annual Bonus for the full fiscal year in which his employment terminated,
multiplied by the number of days from the beginning of such fiscal year until the Date of
Termination and divided by 365. The Pro-rata Bonus shall be determined by the Compensation
Committee in the manner described in Section 3.2.

(b) “Competition Event” means any act or activity by the Executive, directly or indirectly,
which the Partnership deems, in its good faith judgment, to be a violation of Sections 4.1 and 4.2
hereof.

(c) “Change of Control” shall mean:

(i) 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

(ii) 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

 

 

 

(iii) 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.

For purposes of the foregoing definition of Change of Control, “Person” and “Beneficial
Ownership” have the meanings used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended, and “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).

(d) “Retirement” shall mean voluntary termination of employment by the Executive following
attainment of age 55 and completion of 10 years of “eligible service” to the Partnership or its
predecessors, in connection with a bona fide intent by the Executive to no longer seek full time
employment in the industries in which the Partnership then participates. 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.

6.7. Mitigation. The Executive shall have no duty to mitigate with respect to any
payments due pursuant to Section 6 by seeking or accepting other employment.

6.8. Waiver and Release. As a condition precedent to receiving the compensation and
benefits provided under this Section 6 (except for unpaid Base Salary described in Section 6.4(a)),
the Executive shall execute a waiver and release substantially in the form attached hereto as
Exhibit A within 45 days from Date of Termination. Notwithstanding any other provision of
this Agreement to the contrary, the Executive shall not receive any payments or benefits to which
the Executive may be entitled under this Section 6 if the Executive fails to execute such release
or revokes such release.

7. Compliance with Other Agreements by Executive

The Executive represents and warrants to the Partnership that the execution of this Agreement
by him and his performance of his obligations hereunder will not, with or without the giving of
notice or the passage of time or both, conflict with, result in the breach of any provision of or
the termination of, or constitute a default under, any agreement to which the Executive is a party
or by which the Executive is bound.

 

 

 

8. Miscellaneous

8.1. This Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without giving effect to the conflicts of laws principles thereof. The
captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written agreement executed by
the Partnership and the Executive or their respective successors and legal representatives.

8.2. All notices and other communications hereunder shall be in writing and shall be given by
facsimile, hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

If to the Executive:

Michael J. Dunn, Jr.

c/o Suburban Propane, L.P.

One Suburban Plaza

Plaza I

240 Route 10 West

Whippany, New Jersey 07981-0206

With Copies To:

Kenneth Kirschner

Hogan & Hartson LLP

875 Third Avenue

New York, NY 10022

If to the Partnership:

Suburban Propane, L.P.

One Suburban Plaza

Plaza I

240 Route 10 West

Whippany, New Jersey 07981-0206

Attention: Paul E. Abel, Esq., General Counsel and Secretary
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

8.3. Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms or provisions of
this Agreement or affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.

8.4. Notwithstanding any other provision (including Section 3) of this Agreement to the
contrary, the Partnership or other payor may withhold from any amounts payable under this Agreement
such taxes or other amounts as shall be required to be withheld pursuant to any applicable law or
regulation.

8.5. The Executive’s or the Partnership’s failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any other provision hereof

8.6. This Agreement contains the entire understanding of the Partnership and the Executive
with respect to the subject matter hereof and thereof and supersedes all prior agreements between
the Partnership and the Executive, whether oral or written, except for benefit agreements and plans
provided in Section 3 or otherwise available to the Executive.

 

 

 

This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors, permitted assigns, heirs, distributees and legal representatives,
including any partnership, corporation or other business organization with which the Partnership
may merge or
consolidate and the Partnership will require any successor to all or substantially all of the
business or assets of the Partnership to expressly assume and agree to perform this Agreement in
the same manner as the Partnership would be so required to do. Nothing in this Agreement, express
or implied, is intended to confer upon any other person or entity any rights or remedies of any
nature whatsoever under or by reason of this Agreement. Insofar as the Executive is concerned,
this contract, being personal, cannot be assigned.

8.7. “Business Day” means any day excluding Saturday, Sunday, and any day which shall
be in the City of New York a legal holiday or a day which banking institutions in the City of New
York are authorized by law or other government action to close. If any date on which a payment is
required to be made hereunder is not a Business Day, then such payment (without any additional
interest) shall be made on the next succeeding Business Day.

8.8. Any controversy, dispute or claim arising under this Agreement or any breach thereof
(other than in connection with Section 4 hereof) shall be settled by arbitration conducted in New
York City in accordance with the American Arbitration Association’s National Rules for the
Resolution of Employment Disputes (including Mediation and Arbitration Rules) (“Rules”), a judgment
upon any award rendered by the arbitrator may be entered by any federal or state court having
jurisdiction thereof. Any such arbitration shall be conducted by a single arbitrator who shall be
a member of the National Academy of Arbitrators. If the parties are unable to agree upon an
arbitrator, then an arbitrator shall be appointed in accordance with the Rules of the American
Arbitration Association. The parties intend that this agreement to arbitrate be valid, enforceable
and irrevocable and that any determination reached pursuant to the foregoing procedure shall be
final and binding on the parties absent fraud. Each party shall pay its own costs and expenses of
such arbitration including attorneys’ fees and the fees and expenses of the arbitrator shall be
borne equally by the parties, except that the arbitrators shall be entitled to award the reasonable
attorney’s fees and costs and the reasonable costs of arbitration to the Executive if the Executive
prevails in such arbitration in any material respect. Any amount reimbursable by the Partnership
under this Section 8.8 in any one calendar year shall not affect the amount reimbursable in any
other calendar year, and the reimbursement of an eligible expense shall be made within five
business days after delivery of Executive’s respective written requests for payment accompanied
with such evidence of fees and expenses incurred as the Partnership reasonably may require, but in
any event no later than the end of the calendar after the calendar year in which the expense was
incurred.

8.9. This Agreement may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.

9. Code Section 409A

9.1 Notwithstanding anything in this Agreement to the contrary, to the extent that any amount
or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of
the Code would otherwise be payable or distributable hereunder by reason of the Executive’s
Termination of Employment, such amount or benefit will not be payable or distributable to Executive
by reason of such circumstance unless (a) the circumstances giving rise to such termination of
employment meet any description or definition of “separation from service” in Section 409A of the
Code and applicable regulations (without giving effect to any elective provisions that may be
available under such definition, a “Separation from Service”), or (b) the payment or distribution
of such amount or benefit would be exempt from the application of Section 409A of the Code by
reason of the short-term deferral exemption or otherwise. This provision does not prohibit the
vesting of any amount upon a termination of employment, however defined. If this provision prevents
the payment or distribution of any amount or benefit, such payment or distribution shall be made on
the date, if any, on which an event occurs that constitutes a Section 409A-compliant “Separation
from Service” or such later date as may be required by Section 9.2 below.

 

 

 

9.2 Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that
would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would
otherwise be payable or distributable under this Agreement by reason of the Executive’s Separation
from Service during a period in which he is a Specified Employee (as defined below), then, subject
to any permissible acceleration of payment by the Company under Treas. Reg. Section
1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi)
(payment of employment taxes):

(a) if the payment or distribution is payable in a lump sum, the Executive’s right to receive
payment or distribution of such non-exempt deferred compensation will be delayed until the earlier
of the Executive’s death or the first day of the seventh month following the Executive’s Separation
from Service; and

(b) if the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month period immediately
following the Executive’s Separation from Service will be accumulated and Executive’s right to
receive payment or distribution of such accumulated amount will be delayed until the earlier of
Executive’s death or the first day of the seventh month following the Executive’s Separation from
Service, whereupon the accumulated amount will be paid or distributed to the Executive and the
normal payment or distribution schedule for any remaining payments or distributions will resume.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term
in Code Section 409A and the final regulations thereunder (“Final 409A Regulations”), provided,
however, that, as permitted in the Final 409A Regulations, the Partnership’s Specified Employees
and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be
determined in accordance with rules adopted by the Board of Supervisors or a committee thereof,
which shall be applied consistently with respect to all nonqualified deferred compensation
arrangements of the Partnership, including this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	SUBURBAN PROPANE, L.P. 

 	 
	 	By:  	/s/ MARK A ALEXANDER
 	 
	 	 	Name:  	Mark A. Alexander 	 
	 	 	Chief Executive Officer 	 
	 	 	 
	 	

/s/ MICHAEL J. DUNN, JR.
 	 
	 	Michael J. Dunn, Jr. 	 
	 	 	 

 

 

 

EXHIBIT A

RELEASE AND WAIVER OF ALL CLAIMS

RELEASE

THIS IS A RELEASE AND WAIVER OF CLAIMS (hereinafter referred to as “Release” or “Agreement”)
made this                      day of                     , 200                    , by and
between Suburban Propane, L.P. (including its subsidiaries and affiliates, and hereinafter referred
to as “Company” or “Suburban”) having a principal place of business at 240 Route 10 West, P.O. Box
206, Whippany, New Jersey 07981-0206 and                      residing
at                                          (hereinafter referred to as
“Executive”)

WHEREAS, the Company and Executive previously entered into an employment agreement dated
              , 20                under which Executive was employed by the Company (the
“Employment Agreement”); and

WHEREAS, Executive’s employment with the Company (has been) (will be) terminated effective
                    ; and

WHEREAS, pursuant to Section 6 of the Employment Agreement, Executive is entitled to certain
compensation and benefits upon such termination, contingent upon the execution of this Release (the
“Agreement”);

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in
the Employment Agreement, the Company and Executive agree as follows:

IN EXCHANGE for such consideration set forth in Section 6 of the Employment Agreement,
Executive agrees that his/her acceptance and execution of this Agreement constitutes a full,
complete and knowing release and waiver of any claims asserted or non-asserted that he/she now has
or now may have against Suburban arising out of his/her employment or termination of employment up
to and including the date of this Agreement, including any claims Executive may have under state
common law for torts or contracts (including wrongful or constructive discharge, breach of
contract, emotional distress) or under federal, state or local statute, regulation, rule, ordinance
or order that covers or relates to any aspect of employment or discrimination in employment
including, but not limited to the following:

	 	a.	 	Title VII of the Civil Rights Act of 1964, as amended;
	 
	 	b.	 	Civil Rights Act of 1991;
	 
	 	c.	 	Americans with Disabilities Act;
	 
	 	d.	 	Equal Pay Act of 1963;
	 
	 	e.	 	Family and Medical Leave Act of 1993;
	 
	 	f.	 	Age Discrimination in Employment Act;
	 
	 	g.	 	Older Worker’s Benefit Protection Act;
	 
	 	h.	 	Worker Adjustment and Retraining Notification Act;
	 
	 	i.	 	Employee Retirement Income Security Act of 1974;

 

 

 

	 	j.	 	Occupational Safety and Health Act of 1970;
	 
	 	k.	 	Fair Labor Standards Act;
	 
	 	l.	 	Consumer Credit Protection Act, Title III;
	 
	 	m.	 	New Jersey Law Against Discrimination;
	 
	 	n.	 	New Jersey Conscientious Employee Protection Act;
	 
	 	o.	 	. New Jersey Worker and Community Fight to Know Act;
	 
	 	p.	 	New Jersey Family Leave Act;
	 
	 	q.	 	New Jersey Worker Health and Safety Act;
	 
	 	r.	 	New Jersey Civil Rights Act;
	 
	 	s.	 	any comparable state laws which may apply;
	 
	 	t.	 	any state or federal “whistleblower” statutes; or
	 
	 	u.	 	any claim for severance pay, bonus, salary; Suburban stock, sick
leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers’ compensation or
disability except as may otherwise be provided in this Agreement.

IN FURTHER CONSIDERATION FOR THE PAYMENTS SET FORTH ABOVE, Executive hereby, on behalf of
himself/herself, his/her descendants, ancestors, dependents, heirs, executors, administrators,
assigns and successors, covenants not to sue, and fully and forever releases and unequivocally
discharges Suburban, its subsidiaries, affiliates, divisions, successors, predecessors and assigns,
together with its past and present trustees, directors, officers, agents, attorneys, insurers,
employees, unit holders, and representatives, and all persons acting by, through, under or in
concert with any of them (collectively “Releasees”) from any and all claims, wages demands, rights,
liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts,
costs, expenses, attorneys’ fees, damages, judgments, orders or liabilities of whatsoever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected which
the Executive now owns, holds, or claims to have, own, or held or that Executive at any time
heretofore had, owned, held or claimed to have, own, or hold, against each or any of the Releasees.

THE EXECUTIVE covenants and agrees that he/she will not, either individually or in concert
with others, file or voluntarily participate or assist in the prosecution of any court proceedings
against the Releasees, provided that nothing in this Agreement shall prevent (a) Executive’s
participation in any such proceeding where such participation is required by summons or subpoena or
is otherwise compelled by law, or (b) Executive’s challenge to the validity of this Release.

THE EXECUTIVE understands and agrees that he/she has no right to further employment with
Suburban and that Suburban will have no obligation to reemploy him/her at any time in the future.

THE EXECUTIVE hereby agrees and acknowledges that this Release and its contents shall not
constitute or be deemed an admission of liability or wrongdoing on behalf of Suburban or the
Executive, the same being expressly denied by each party.

 

 

 

THE EXECUTIVE covenants and agrees that he/she will treat this Release and its contents in a
confidential manner and not disclose any of its terms, including the amount of money referred to or
the
terms of the non-compete provision contained in this Release, with any party other than
his/her attorney(s), accountant(s) or other professional advisors. Suburban likewise agrees to keep
this Release and its contents confidential.

THE EXECUTIVE warrants and agrees that he/she is responsible for any federal, state, and local
taxes which may be owed by him/her by virtue of the receipt of any portion of the consideration
herein provided. Executive agrees to hold Suburban harmless from any claims by taxing authorities
arising solely out of Executive’s failure to properly report any amounts received by Executive
pursuant to this Release.

SUBURBAN AND THE EXECUTIVE acknowledge and agree that this Agreement does not, and shall not
be construed to, release or limit the scope of any existing obligation of the Suburban (i) to
indemnify Executive for his acts as an officer or director of Company in accordance with the bylaws
of Company and the policies and procedures of Company that are presently in effect, (ii) to
Executive with respect to certain compensation and benefits upon termination, pursuant to Section 6
of the Employment Agreement which are contingent upon the execution of this Release or (iii) to
Executive and his eligible, participating dependents or beneficiaries under any existing long term
incentive plan, group welfare or retirement plan of the Company in which Executive and/or such
dependents are participants.

THE EXECUTIVE acknowledges that he/she has been encouraged to seek the advice of an attorney
of his/her choice in regard to this Release. Suburban and the Executive represent that they have
relied upon the advice of their attorneys, who are attorneys of their own choice, or they have
knowingly and willingly not sought the advice of their attorneys. The Executive hereby understands
and acknowledges the significance and consequences of such Release and represents that the terms of
this Release are fully understood and voluntarily accepted by him/her, without coercion.

THE EXECUTIVE further agrees and understands that he/she has twenty-one (21) days from his/her
receipt of this Release to review and return this Release to Suburban’s Human Resources: Department
in Whippany, New Jersey and seven (7) days following his /her signing of this Release to revoke the
Release.

THE EXECUTIVE acknowledges that he/she has had a sufficient amount of time to consider the
terms of this Release. Both the Executive and Suburban have cooperated in the drafting and
preparation of this Release. Hence, in any construction to be made of this Release, the same shall
not be construed against any party on the basis that the party was the drafter. In any event, it is
agreed that this Release shall be interpreted in accordance with the laws of the state of New
Jersey.

IF ONE OR MORE of the provisions of this release shall for any reason be held invalid, illegal
or unenforceable in any respect by a Court of competent jurisdiction, such invalidity, illegality
or unenforceability shall not affect or impair any other provision of Release, but this release
shall be construed as if such invalid, illegal, or unenforceable provision had not been contained
herein.

(Signature page follows)

 

 

 

PLEASE READ CAREFULLY. YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.
THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

IN WITLESS WHEREOF, the Executive and Suburban have executed this Release and Waiver of all claims
as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Suburban Propane, I.P.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Executive Name (Print)	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Executive SignatureEX-10.1

Exhibit 10.1

 

GENUINE PARTS COMPANY

ANNUAL INCENTIVE BONUS PLAN

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1 ESTABLISHMENT OF PLAN
	 	 	1	 
	1.1 Background
	 	 	1	 
	1.2 Purpose
	 	 	1	 
	1.3 Effective Date
	 	 	1	 
	ARTICLE 2 DEFINITIONS
	 	 	1	 
	2.1 Definitions
	 	 	1	 
	ARTICLE 3 ADMINISTRATION
	 	 	2	 
	3.1 Committee
	 	 	2	 
	3.2 Authority of Committee
	 	 	2	 
	3.3 Decisions Binding
	 	 	3	 
	ARTICLE 4 ELIGIBILITY
	 	 	3	 
	4.1 Designation of Participants
	 	 	3	 
	4.2 Partial Year Participation
	 	 	3	 
	4.3 Demotions
	 	 	3	 
	ARTICLE 5 OPERATION OF THE PLAN
	 	 	4	 
	5.1 Plan Structure
	 	 	4	 
	5.2 Establishment of Target Bonuses
	 	 	4	 
	5.3 Company Financial Objectives
	 	 	4	 
	5.4 Individual Performance Objectives
	 	 	4	 
	5.5 Threshold Performance Goal and Individual Award Limits
	 	 	5	 
	5.6 Payout Form and Timing
	 	 	5	 
	5.7 Terminations of Employment
	 	 	5	 
	ARTICLE 6 AMENDMENT, MODIFICATION AND TERMINATION
	 	 	6	 
	6.1 Amendment, Modification and Termination
	 	 	6	 
	6.2 Termination After or During Plan Year
	 	 	6	 
	ARTICLE 7 GENERAL PROVISIONS
	 	 	6	 
	7.1 No Right to Participate
	 	 	6	 
	7.2 No Right to Employment
	 	 	6	 
	7.3 Withholding
	 	 	6	 
	7.4 Funding
	 	 	6	 
	7.5 Expenses
	 	 	6	 
	7.6 Titles and Headings
	 	 	7	 
	7.7 Gender and Number
	 	 	7	 
	7.8 Governing Law
	 	 	7	 
	7.9 2006 Incentive Plan Controls
	 	 	7	 

 

 

 

GENUINE PARTS COMPANY

ANNUAL INCENTIVE BONUS PLAN

ARTICLE 1

ESTABLISHMENT OF PLAN

1.1 BACKGROUND. This Annual Incentive Bonus Plan (the “Annual Incentive Bonus Plan”
or the “Plan”) is a subplan of the Genuine Parts Company 2006 Long-Term Incentive Plan (“2006
Incentive Plan”), consisting of a program for the grant of annual Performance-Based Cash Awards
under Article 9 of the 2006 Incentive Plan. This Plan has been established and approved, and will
be administered by, the Committee pursuant to the terms of the 2006 Incentive Plan, including
without limitation, Section 14.11 thereof. It is intended that the Performance Bonuses earned
under this Plan shall be Qualified Performance-Based Cash Awards with respect to Participants who
are Covered Employees, with the intent that the Performance Bonuses will be fully deductible by the
Company without regard to the limitations of Code Section 162(m). The applicable Award limits of
Section 5.4 of the 2006 Incentive Plan shall apply with respect to this Plan. As of the Effective
Date, Section 5.4 of the 2006 Incentive Plan provides that the aggregate dollar value of any
Performance-Based Cash Award that may be paid to any one Participant during any one calendar year
under the 2006 Incentive Plan is $7,500,000.

1.2. PURPOSE. The purpose of this Plan is to provide for the payment of a cash bonus
to key employees of the Company, the payment of which will be based on the achievement of
Performance Objectives during a Plan Year. Company Financial Objectives are designed to focus on
overall corporate financial results that drive shareholder value. Unless otherwise specified by
the Committee, the Performance Objectives include Company Financial Objectives, Individual
Performance Objectives and Threshold Earnings Performance.

1.3. EFFECTIVE DATE. This Plan was approved by the Committee on March 13, 2009, to be
effective as of the beginning of Plan Year 2009.

ARTICLE 2

DEFINITIONS

2.1. DEFINITIONS. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the 2006 Incentive Plan. In addition, the following terms
shall have the following meanings for purposes of this Plan, unless the context in which they are
used clearly indicates that some other meaning is intended.

Annual Incentive Bonus Plan or Plan. The Genuine Parts Company Annual Incentive
Bonus Plan, a subplan of the 2006 Incentive Plan, as set forth in this document together
with any subsequent amendments hereto.

Committee. The Compensation, Nominating and Governance Committee of the Board of
Directors of the Company.

 

 

 

Company Financial Objectives. The Company Financial Objectives established by the
Committee for a Plan Year, as provided in Article 5.

Effective Date. January 1, 2009.

GAAP. Generally accepted accounting principles for U.S. companies.

Individual Award Limit. Has the meaning described in Section 5.5.

Individual Performance Objectives. The Individual Performance Objectives
established by the Committee for a Plan Year, as provided in Article 5.

Performance Bonus. The bonus payable to a Participant under this Plan calculated by
reference to the achievement of applicable Performance Objectives, as determined in
accordance with Article 5.

Performance Objectives. Collectively with respect to a Participant, Threshold
Earnings Performance and any other Company Financial Objectives and Individual Performance
Objectives (applicable to the Participant), as provided in Article 5.

Plan Year. January 1 to December 31 of each year.

Schedule. Means a document setting forth, with respect to one or more Participants,
Company Financial Objectives and/or Individual Performance Objectives for a Plan Year and
the relative weightings of such measures and such other information as the Committee
determines is appropriate.

Target Bonus. Has the meaning described in Section 5.2.

Threshold Earnings Performance. Has the meaning give such term in Section 5.5.

ARTICLE 3

ADMINISTRATION

3.1. COMMITTEE. This Plan shall be administered by the Committee.

3.2. AUTHORITY OF COMMITTEE. Without limiting its authority under Article 4 of the
2006 Incentive Plan, the Committee has the exclusive power, authority and discretion to:

(a) Designate Participants for each Plan Year;

(b) Establish and review Performance Objectives and weightings for different
Performance Objectives for each Plan Year;

(c) Establish Target Bonuses for Participants for each Plan Year;

 

2

 

(d) Determine whether and to what extent Performance Objectives were achieved for each
Plan Year;

(e) Increase (subject to the Individual Award Limit) or decrease the Performance Bonus
otherwise payable to any Participant resulting from the achievement of Performance
Objectives in any Plan Year, based on such subjective factors as the Committee shall deem
relevant;

(f) Establish, adopt or revise any rules and regulations as it may deem necessary or
advisable to administer this Plan;

(g) Make all other decisions and determinations that may be required under this Plan
or as the Committee deems necessary or advisable to administer this Plan; and

(h) Amend this Plan as provided herein.

3.3. DECISIONS BINDING. The Committee’s interpretation of this Plan and all decisions
and determinations by the Committee with respect to this Plan are final, binding, and conclusive on
all parties.

ARTICLE 4

ELIGIBILITY

4.1. DESIGNATION OF PARTICIPANTS. Officers of the Company or its Subsidiaries are
eligible to participate in the Plan. Before March 31 of each Plan Year, the Committee shall
approve the Participants and their Target Bonuses for that Plan Year. The Company will notify
Participants of their eligibility to participate, and the terms thereof, in writing. The Chief
Executive Officer may designate additional Senior Vice Presidents or Executive Vice Presidents as
Participants and shall promptly report such additional names to the Committee; provided, however,
that such delegated authority shall be limited to individuals who are not anticipated to be Covered
Employees for the Plan Year. The Committee, in its discretion, may determine whether other
positions may qualify for participation in all or any portion of this Plan for any subsequent Plan
Year or change Target Bonuses of existing Participants.

4.2. PARTIAL YEAR PARTICIPATION. If a Participant begins employment or is promoted to
an eligible position after the beginning of a Plan Year, the Committee, in its discretion, may
determine whether such person may participate in this Plan and if so, the terms of such
participation, which will be pro rated based on the number of days such person participated in this
Plan during the Plan Year, unless the Committee determines otherwise. If a Participant takes a
leave of absence during the Plan
Year for any reason the Participant will receive a pro rata share of a Performance Bonus, if any,
for such Plan Year, unless the Committee decides otherwise.

4.3. DEMOTIONS. If a Participant is demoted during the Plan Year, the Committee will
determine whether Plan participation ends at that time, or is continued, perhaps at a reduced
level. If participation ends, any Performance Bonus earned during the time of participation will
be prorated for the Plan Year.

 

3

 

ARTICLE 5

OPERATION OF THE PLAN

5.1. PLAN STRUCTURE. Each Participant shall be eligible to receive a Performance
Bonus for the Plan Year if the Company meets or exceeds certain Performance Objectives set by the
Committee. It is anticipated that the Committee shall establish or approve Performance Objectives
and their respective weightings, and Target Bonuses as provided in Sections 5.2, 5.3 and 5.4. In
establishing Performance Objectives, the Committee may take into account such factors as it deems
appropriate, including, without limitation, prior year results, planned business results,
anticipated business trends, performance relative to peer companies and macroeconomic conditions.
Those Performance Objectives shall provide the framework for the Committee in determining the
appropriate amount of incentive awards to payout in each Plan Year. However, this Plan is designed
to provide the Committee discretion to make pay-outs that differ from those that would result from
the application of Sections 5.2, 5.3 and 5.4, if circumstances warrant, so long as, at a minimum,
the requirements of Section 5.5 are met. Such circumstances could include, for example and without
limitation, events that are not anticipated at the time the Performance Objectives are established
or extenuating circumstances or extraordinary performance that is not recognized through the
Performance Objectives.

5.2. ESTABLISHMENT OF TARGET BONUSES. The Committee plans to establish Performance
Objectives (in addition to Threshold Earnings Performance) and Target Bonuses (other than the
Individual Award Limit) for each Plan Year, by approving the percentage of each Participant’s base
salary that will be awarded to the Participant for that Plan Year if Threshold Earnings Performance
is achieved and if the other established Performance Objectives are achieved at the target level
(the “Target Bonus”). Each Participant’s Target Bonus percentage will be communicated in writing
to the Participant. The actual Performance Bonus to a Participant may be greater or less than his
or her Target Bonus, depending on the level of achievement of Company Financial Objectives, as
provided in the relevant Schedule, and Individual Performance Objectives, and depending on whether
the Committee exercises its discretion to increase or reduce a resulting Performance Bonus as
provided herein.

5.3. COMPANY FINANCIAL OBJECTIVES. Before March 31 of each Plan Year, it is
anticipated that the Committee will approve Company Financial Objectives for that Plan Year in
addition to Threshold Earnings Performance, and shall set forth such Company Financial Objectives
in one or more Schedules. The Schedule shall provide the formula that the Committee will use as a
guide for determining a Participant’s Performance Bonus at a level below the Individual Award
Limit.

5.4. INDIVIDUAL PERFORMANCE OBJECTIVES. Before March 31 of each Plan Year, it is
anticipated that the Committee will approve Individual Performance Objectives for Participants who
are executive officers and that the Chief Executive Officer or other appropriate officers will
approve Individual Performance Objectives for other Participants. Any such Individual Performance
Objectives will be communicated to Participants in writing. The Committee shall consider the
degree of achievement of Individual Performance Objectives as a guide in exercising its discretion
in determining a Participant’s Performance Bonus at a level below the Individual Award Limit.

 

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5.5 THRESHOLD PERFORMANCE GOAL AND INDIVIDUAL AWARD LIMITS. Pursuant to Section 14.11
of the 2006 Incentive Plan, by adopting this Annual Incentive Bonus Plan on March 13, 2009 to be
effective as of the beginning of Plan Year 2009, the Committee has established for each Plan Year
beginning with Plan Year 2009 a threshold performance goal under the Plan based on net earnings
from continuing operations, which is one of the Qualified Business Criteria approved by the
shareholders under Section 14.11 of the 2006 Incentive Plan. Specifically, the threshold
performance goal under the Plan for each such Plan Year is that the Company achieve positive
consolidated net earnings from continuing operations for such fiscal year, calculated in accordance
with GAAP and as reflected in the Company’s year-end earnings release for that year (“Threshold
Earnings Performance”). Subject to Section 14.11(c) of the 2006 Incentive Plan in the case of the
death or Disability of a Participant or the occurrence of a Change in Control, no incentive awards
shall be payable under the Plan for any Plan Year unless Threshold Earnings Performance has been
achieved.

In any Plan Year in which Threshold Earnings Performance is achieved, the Performance Bonus
payable to each Participant under the Plan for such Plan Year shall be $2,000,000 (the “Individual
Award Limit”) or any lesser amount determined by the Committee based on the level of actual
performance compared to Company Financial Objectives and/or Individual Performance Objectives and
such other Performance Objectives or any other criteria determined by the Committee. As described
herein, it is anticipated that the Committee will exercise discretion such that the Performance
Bonus paid to a Participant for a Plan Year would represent the amount that would be payable
pursuant to the applicable Company Financial Objectives and/or Individual Performance Objectives,
rather than the full Individual Award Limit. In any Plan Year in which the Committee fails to set
a Target Bonus for a Participant, the Performance Bonus for that Participant shall be zero for that
year unless the Committee determines otherwise (but in no event shall the bonus exceed the
Individual Award Limit).

The Threshold Earnings Performance and the Individual Award Limit shall be communicated in
writing to each Participant before March 31 of each Plan Year.

5.6. PAYOUT FORM AND TIMING. Performance Bonuses will be paid within thirty (30) days
after the Committee determines whether and to what extent Performance Objectives were achieved, but no later than March 15 next
following the end of the Plan Year for which the Performance Bonuses, if any, were earned.

5.7. TERMINATION OF EMPLOYMENT. In the event of the termination of a Participant’s
employment prior to the end of the Plan Year by reason of the Participant’s death, Disability or
Retirement, the Participant will be paid a Performance Bonus equal to the pro rata portion (based
on the number of days worked during the Plan Year) of the Performance Bonus, if any, that would
otherwise be payable if the Participant had continued employment through the end of the Plan Year,
based on actual performance. For example, no Performance Bonus shall be paid if Threshold Earnings
Performance is not achieved. If Threshold Earnings Performance is achieved, then the Participant’s
Performance Bonus shall be based on the applicable performance matrix. Any such Performance Bonus
shall be paid at the normal time for payment of Performance Bonuses hereunder. Any amounts paid on
behalf of a deceased Participant will be paid to the Participant’s Beneficiary. For terminations
after the end of the Plan Year, but before payout from this Plan, payout will be made as though the
termination had not occurred.

 

5

 

ARTICLE 6

AMENDMENT, MODIFICATION AND TERMINATION

6.1. AMENDMENT, MODIFICATION AND TERMINATION. The Committee may, at any time and from
time to time, amend, modify or terminate this Plan. The Committee may condition any amendment or
modification on the approval of shareholders of the Company if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws, policies or regulations,
including without limitation Code Section 162(m).

6.2. TERMINATION AFTER OR DURING PLAN YEAR. Termination of this Plan after a Plan
Year but before Performance Bonuses are paid for that Plan Year will not reduce Participants’
rights to receive Performance Bonuses for the Plan Year. Termination or amendment of this Plan
during a Plan Year may be retroactive to the beginning of the Plan Year, at the discretion of the
Committee. If a Change in Control occurs, no amendment or termination may adversely affect amounts
payable to a Participant without the consent of the Participant.

ARTICLE 7

GENERAL PROVISIONS

7.1. NO RIGHT TO PARTICIPATE. No officer or Associate shall have any right to be
selected to participate in this Plan.

7.2. NO RIGHT TO EMPLOYMENT. Nothing in this Plan shall interfere with or limit in
any way the right of the Company or any Affiliate to terminate any Participant’s employment at any
time, nor confer upon any Participant any right to continue in the employ of the Company or any
Affiliate.

7.3. WITHHOLDING. The Company or any Affiliate shall have the authority and the right
to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required by
law to be withheld with respect to any taxable event arising as a result of this Plan.

7.4. FUNDING. Benefits payable under this Plan to a Participant or to a Beneficiary
will be paid by the Company from its general assets. The Company is not required to segregate on
its books or otherwise establish any funding procedure for any amount to be used for the payment of
benefits under this Plan. The Company may, however, in its sole discretion, set funds aside in
investments to meet its anticipated obligations under this Plan. Any such action or set-aside may
not be deemed to create a trust of any kind between the Company and any Participant or beneficiary
or to constitute the funding of any Plan benefits. Consequently, any person entitled to a payment
under this Plan will have no rights greater than the rights of any other unsecured creditor of the
Company.

7.5. EXPENSES. The expenses of administering this Plan shall be borne by the Company
and its Subsidiaries.

 

6

 

7.6. TITLES AND HEADINGS. The titles and headings of the Sections in this Plan are
for convenience of reference only, and in the event of any conflict, the text of this Plan, rather
than such titles or headings, shall control.

7.7. GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.

7.8. GOVERNING LAW. To the extent not governed by federal law, this Plan shall be
construed in accordance with and governed by the laws of the State of Delaware.

7.9 2006 INCENTIVE PLAN CONTROLS. This Plan is adopted pursuant to and shall be
governed by and construed in accordance with the 2006 Incentive Plan. In the event of any actual
or alleged conflict between the provisions of the 2006 Incentive Plan and the provisions of this
Plan, the provisions of the 2006 Incentive Plan shall be controlling and determinative.

The foregoing is hereby acknowledged as being the Genuine Parts Company Annual Incentive Bonus
Plan as adopted by the Committee on March 13, 2009, to be effective as of January 1, 2009.

	 	 	 	 	 
	 	GENUINE PARTS COMPANY

 	 
	 	 	 

 

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