FORM OF
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.
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
_______________________, 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 Lebanon, Missouri
and Cornerstone's 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.
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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. ANNUAL OPERATING PERFORMANCE INCENTIVE PLAN. Executive shall be
eligible to participate in Cornerstone's Annual Operating Performance Incentive
Plan.
d. NEW ACQUISITIONS INCENTIVE PLAN. Executive shall be eligible to
participate in Cornerstone's New Acquisitions Incentive Plan.
e. 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.
f. 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.
g. VACATION. Executive shall be entitled to _____ weeks of vacation per
year, but in no event to exceed four (4) weeks per
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year. The days selected for Executive's vacation must be mutually agreeable to
Cornerstone and Executive.
h. 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.
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
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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; 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.
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(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 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
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(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 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)
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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 Executive terminates his employment within 120 days after he receives
notice of such fundamental change.
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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
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demonstrates gross unfitness to serve in his capacity as employee of
Cornerstone.
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.
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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 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-
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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 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
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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 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
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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.
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.
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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:
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.
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
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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.
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
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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.
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By:
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