EXHIBIT 10.5
FORM OF AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into
by and between ____________________________, an individual
("Executive"), and Cornerstone Propane GP, Inc., a California
corporation ("Cornerstone").
RECITALS:
A. The business purpose of Cornerstone is to serve as the
managing general partner of Cornerstone Propane Partners, L.P., a
Delaware limited partnership, and Cornerstone Propane, L.P., a
Delaware limited partnership (collectively the "Partnerships").
B. Executive will provide management services to
Cornerstone and the Partnerships.
AGREEMENT:
1. Employment by Cornerstone and Duration.
a. Full Time and Best Efforts. Subject to the terms set
forth herein, Cornerstone agrees to employ Executive to provide
management services for Cornerstone and the Partnerships as
_______________, and Executive hereby accepts such employment.
During the duration of his employment with Cornerstone, Executive
will devote his best efforts and substantially all of his
business time and attention to the performance of his duties
hereunder, except for vacation periods as set forth herein and
reasonable absences due to injury or illness as permitted by
Cornerstone's general policies.
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b. Duties. Executive shall serve as
_________________________ for Cornerstone and the Partnerships
and shall perform such duties as are customarily associated with
his current title, consistent with the Bylaws of Cornerstone and
as required by Cornerstone's Board of Directors (the "Board").
c. Duration. This Agreement shall be effective on December
16, 1996, and end on the third anniversary of such date, subject
to the provisions for termination set forth herein.
d. Locations of Performance. Executive shall be domiciled
in the vicinity of Watsonville, California. The parties
acknowledge, however, that the Executive will be required to
undertake reasonable travel to the Partnerships' market areas in
connection with the performance of his duties hereunder.
2. Compensation and Benefits.
a. Salary. Executive shall receive for services to be
rendered hereunder an annual base salary of $ ,payable on
a twice-monthly basis, subject to increase at the sole discretion
of the Board.
b. Bonus. Executive shall receive such discretionary
bonuses, if any, as the Board, in its sole discretion and from
time to time, may deem appropriate.
c. Acquisition Management Fees. Commencing January 1,
1997, the Executive will be paid an Acquisition Management Fee of
$ per month for months.
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d. Annual Operating Performance Incentive Plan. Executive
shall be eligible to participate in Cornerstone's Annual
Operating Performance Incentive Plan.
e. New Acquisitions Incentive Plan. Executive shall be
eligible to participate in Cornerstone's New Acquisitions
Incentive Plan.
f. Participation in Benefit Plans. During the duration of
employment hereunder, Executive shall be entitled to participate
in the plans and programs established by Cornerstone to the
extent that he is eligible under the general provisions thereof.
Cornerstone may, in its sole discretion and from time to time,
establish additional senior management benefit programs as it
deems appropriate.
g. Life Insurance. Cornerstone shall maintain term life
insurance in the amount of $____________ on the life of Executive
payable to such beneficiary or beneficiaries as Executive may
designate from time to time.
h. Vacation. Executive shall be entitled to an annual
vacation per year, in no event to exceed four (4) weeks per year.
The days selected for Executive's vacation must be mutually
agreeable to Cornerstone and Executive.
i. Withholding. All payments and benefits under this
Section 2 for which withholding is required under applicable law
will be made subject to the required withholding.
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3. Reasonable Business Expenses and Support.
Executive shall be reimbursed for documented and reasonable
business expenses in connection with the performance of his
duties hereunder. Executive shall be furnished reasonable office
space at 000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxx or
successor location in Watsonville, California, or other location
as mutually agreed by Executive and Cornerstone ("Primary
Office"), as well as support assistance and facilities.
4. Termination of Employment.
The date on which Executive's employment by Cornerstone
ceases, under any of the following circumstances, shall be
defined herein as the "Termination Date".
a. Termination Without Cause.
i. Termination Payment. Upon notice to Executive,
the Board may terminate Executive's employment with Cornerstone
at will at any time for any reason and without "cause", as
defined below. In the event Executive's employment is terminated
by Cornerstone without cause, Executive shall receive payment for
all accrued salary and vacation time through the termination
date, and Cornerstone shall pay Executive as severance an amount
that is equal to the compensation of Executive under this
Agreement for the remaining balance of the duration of employment
under this Agreement.
ii. Fundamental Changes. In the event that
Cornerstone makes a fundamental change as defined herein below,
Executive may at any time thereafter terminate his employment;
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provided, however that Executive shall provide Cornerstone ten
(10) days notice prior to any such termination, and Cornerstone
shall have a reasonable period of time not to exceed thirty (30)
days to cure such fundamental change. "Fundamental change" shall
be defined as any of the following:
(a) Diminution in the Executive's duties,
authority, responsibility and/or compensation without performance
or market justification;
(b) Cornerstone moves Executive's primary
office more than fifty (50) miles from Watsonville, California;
(c) NGC or an affiliate sells the
Partnerships or the Partnerships' assets or a portion of any of
the foregoing after the effective date of this Agreement such
that the total EBITDA of the Partnerships falls below 70% of the
EBITDA of the Partnerships on the effective date of this
Agreement.
(d) any one or more of the following:
(i) any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than as a trustee or other
fiduciary holding securities under an employee benefit plan
of Northwestern Public Service Company (the "Parent"), is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of
the Parent representing 10% or more of the total voting
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power represented by the Parent's then outstanding voting
securities, or
(ii) during any period of two
consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Parent and
any new directors whose election by the Board of Directors
or nomination for election by the Parent's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors of the
Parent, or
(iii) the stockholders of the Parent
approve a merger or consolidation of the Parent with any
other corporation, other than a merger or consolidation
which would result in the voting securities of the Parent
outstanding immediately prior to such a merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) at least 90% of the total voting power
represented by the voting securities of the Parent or such
surviving entity outstanding immediately after such merger
or consolidation, or
(iv) the stockholders of the Parent
approve a plan of complete liquidation of the Parent, an
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agreement for the sale or disposition of the Parent (in one
transaction or a series of transactions) of all or
substantially all of the Parent's assets, or a plan of
reorganization pursuant to which (in one transaction or a
series of transactions) all or substantially all of the
Parent's assets shall be transferred to a person (as that
term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) not wholly owned by the
Parent, or
(v) the Parent shall no longer be the
beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of at least 80%
of the outstanding shares of each class of equity securities
of Cornerstone, provided that a public offering of
securities after which the Parent, directly or through one
or more subsidiaries, is the controlling entity shall not
trigger this Section 4(a)(ii)(d)(v), or
(vi) the Parent shall, by issuing a
proxy, power or attorney, or similar authorization or
entering into a contract or other arrangement of any kind,
shall no longer effectively control Cornerstone.
* * *
A termination by Executive in the event of a
fundamental change shall be treated as a Cornerstone termination
without cause, and Executive shall be entitled to the same
severance payments as provided in paragraph 4(a)(i), provided
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Executive terminates his employment within 120 days after he
receives notice of such fundamental change.
b. Termination for Cause.
i. Termination Payment of Accrued Salary and
Vacation. The Board may terminate Executive's employment with
Cornerstone at any time for "cause" as defined below,
immediately upon notice to Executive of the circumstances leading
to such termination for cause. In the event that Executive's
employment is terminated for cause, Executive shall receive
payment for all accrued salary and vacation time through the
Termination Date, which in this event shall be the date upon
which notice of termination is given. Executive shall also
receive any compensation as provided in paragraphs 2(c), (d), (e)
and (f). Cornerstone shall have no further obligation to pay
severance of any kind nor to make any payment in lieu of notice.
ii. Definition of Cause. "Cause" means the occurrence
or existence of any of the following with respect to Executive,
as determined by a majority of the Directors of the Board: (a)
any act of dishonesty, misappropriation, embezzlement,
intentional fraud or similar conduct involving Cornerstone or
the Partnerships; (b) the conviction or the plea of nolo
contendere or the equivalent in respect to a felony involving
moral turpitude; (c) any intentional damage of a material nature
to any property of Cornerstone or the Partnerships; or (d)
conduct by Executive which demonstrates gross unfitness to serve
in his capacity as employee of Cornerstone.
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c. Termination Upon Disability. Cornerstone may
terminate Executive's employment in the event Executive suffers a
disability that renders Executive unable to perform the essential
functions of his position, even with reasonable accommodation,
for nine (9) months within any twelve (12) month period.
Commencing on the Termination Date, which in this event shall be
the date upon which notice of termination is given, Cornerstone
shall pay Executive an amount equivalent to 100% of Executive's
then annual base salary, subject to standard withholdings for tax
and social security purposes, payable over twelve (12) months in
monthly pro rata payments commencing as of the Termination Date.
Executive shall also receive any compensation as provided in
paragraphs 2(c), (d), (e) and (f).
d. Benefits Upon Termination. All benefits provided under
paragraph 2(g) hereof shall be extended, to the extent permitted
by Cornerstone's insurance policies and benefit plans, for one
(1) year after Executive's Termination Date, except (a) as
required by law (e.g., COBRA health insurance continuation
election), or (b) in the event of a termination described in
paragraph 4(b) if Cornerstone does not decide to require the
noncompetition agreement as described in section 6.
e. Termination Upon Death. If Executive dies prior to the
expiration of the duration of employment under this Agreement,
Cornerstone shall continue coverage of Executive's dependents
(if any) under all benefit plans or programs of the type listed
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above in paragraph 2(g) herein for a period of twelve (12)
months.
5. Proprietary Information Obligations. During the duration of
employment under this Agreement, Executive will have access to
and become acquainted with Cornerstone's and the Partnerships'
confidential and proprietary information, including but not
limited to information or plans regarding customer relationships,
personnel, sales, marketing, and financial operations and
methods, trade secrets, formulas, devices, secret inventions,
processes, and other compilations of information, records, and
specifications (collectively, except to the extent it was already
known from other sources, or is or becomes general knowledge, in
each case without known violation of any confidentiality
obligation, "Proprietary Information"). Executive shall not
disclose any of the Proprietary Information directly or
indirectly, or use it in any way, either during the duration of
this Agreement or at any time thereafter, except as required in
the course of his employment with Cornerstone or as authorized
in writing by Cornerstone. All files, records, documents,
computer-recorded information, drawings specifications, equipment
and similar items relating to the business of Cornerstone and/or
the Partnerships, whether prepared by Executive or otherwise
coming into his possession, shall remain the exclusive property
of Cornerstone and/or of the Partnerships, respectively, and
shall not be removed under any circumstances whatsoever without
the prior written consent of Cornerstone, except when (and only
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for the period) necessary to carry out Executive's duties
hereunder, and if removed shall be immediately returned to
Cornerstone upon any termination of his employment and no copies
thereof shall be kept by Executive; provided, however, that
Executive shall be entitled to retain documents that were
personally owned or acquired.
6. Covenant Not to Compete.
Cornerstone and the Partnerships are presently engaged in
the retail business of selling and distributing propane to end-
user customers in bobtail delivery vehicles with capacities below
5,000 gallons (the "Business"). The term "Business" does not
include the sale, distribution, or transport of natural gas
liquids, including without limitation propane(collectively
"NGL's") in transport loads of 5,000 gallons or more, whether for
end use or resale, or the rendition of any services to persons or
entities engaged in the business of selling or distributing
NGL's, or the trading, selling, hedging, processing or otherwise
dealing with NGL's or other petroleum products (or contracts for
any of the foregoing) for any purpose.
The Executive agrees that for a twelve (12) month period
from the end of his employment with Cornerstone, he will not
carry on the "Business" with fifty (50) miles of any of the
foregoing existing locations of Cornerstone or the Partnerships.
For purposes of this Agreement, Executive will be deemed to be
"carrying on" the Business if he does so directly or if he is the
owner or an officer or an employee of, a consultant to or a
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stockholder or holder of another equity interest in, any person
or entity engaged in the business, provided however, that
Executive may own, directly or indirectly, solely as an
investment, securities of any person traded on a national
exchange or listed on the NASDAQ National Market so long as he
does not, directly or indirectly, own 5% or more of the fully
diluted interest in such person.
7. Noninterference. While employed by Cornerstone, and during
the time any noncompetition covenant as described under Section 6
is in effect, Executive agrees not to interfere with the business
of Cornerstone by directly or indirectly soliciting, attempting
to solicit, inducing, or otherwise causing any employee of
Cornerstone to terminate his or her employment in order to
become an employee, consultant or independent contractor to or
for any other employer.
8. Arbitration of Disputes.
a. Scope. Any disputes of any kind regarding this
Agreement, including, but not limited to, its termination or any
events occurring during the employment relationship, shall be
subject to final and binding arbitration, to the extent permitted
by law, pursuant to the Employment Dispute Resolution Rules and
Regulations of the American Arbitration Association. Such
disputes shall include, but are not limited to, claims for breach
of contract (express or implied), tort claims, claims for
discrimination, and claims for violation of any federal or state
law or regulation.
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b. Request. Any request for arbitration must be made in
writing within 365 calendar days of the occurrence giving rise to
the dispute.
c. Applicable Law. The arbitrator shall apply the
substantive law (and the law of remedies, if applicable) of
Delaware, or federal law, or both, as applicable to the claim or
claims asserted.
d. Final and Binding. The arbitration shall be final and
binding upon all of the parties and shall be enforceable to the
extent permitted by law.
9. Miscellaneous.
a. Notices. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of
personal delivery (including personal delivery by fax) or the
third day after mailing by first-class mail to the recipient at
the address indicated below:
To Cornerstone:
Cornerstone Propane GP, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
To Executive:
____________________
____________________
____________________
Voice: ____________
Fax: ______________
or to such other address or to the attention of such other person
as the recipient party shall have specified by prior written
notice to the sending party.
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b. Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provisions had never
been contained herein.
c. Entire Agreement. This document constitutes the final,
complete, and exclusive embodiment of the entire agreement and
understanding between the parties related to the subject matter
hereof and supersedes and preempts any prior or contemporaneous
understandings, agreements, or representations by or between the
parties, written or oral.
d. Counterparts. This Agreement may be executed on
separate counterparts, any one of which need not contain
signatures of more than one party, but all of which taken
together will constitute one and the same agreement.
e. Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive
and Cornerstone, and their respective successors and assigns,
except that Executive may not assign any of his duties hereunder
and he may not assign any of his rights under without the written
consent of Cornerstone, which shall not be withheld unreasonably.
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f. Attorneys' Fees. If any legal proceeding is necessary
to enforce or interpret the terms of this Agreement, or to
recover damages for breach hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, as well as costs and
disbursements, in addition to any other relief to which he or it
may be entitled.
g. Amendments. No amendments or other modifications to
this Agreement may be made except by a writing signed by both
parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third person any rights or remedies
under or by reason of this Agreement. No amendment or waiver of
this Agreement requires the consent of any individual,
partnership, corporation or other entity not a party to this
Agreement.
h. Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement will
be governed by the internal law, and not the law of conflicts, of
the State of Delaware.
__________________________________
Executive
Cornerstone Propane GP, Inc.
By:______________________________
Xxxxxx X. Xxxxxx
Executive Vice President
and Chief Financial Officer
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