2 0 1 6 A N N U A L R E P O R T
P A R T N E R S H I P P R O F I L E
A Master Limited Partnership since 1996,
Suburban Propane Partners, L.P. (NYSE:SPH) has
been in the customer service business since 1928
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It is the mission of
Suburban Propane to:
Serve our customers,
employees and communities
by maintaining the
highest level of safety
standards, ethical principles,
satisfaction and total value
in all that we do.
Key Investment Considerations
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(cid:115)(cid:0)(cid:38)(cid:76)(cid:69)(cid:88)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:67)(cid:79)(cid:83)(cid:84)(cid:0)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:69)
(cid:115)(cid:0)(cid:0)(cid:51)(cid:84)(cid:82)(cid:79)(cid:78)(cid:71)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:66)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:68)(cid:0)
(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:65)(cid:67)(cid:72)(cid:0)(cid:84)(cid:79)(cid:0)(cid:68)(cid:73)(cid:83)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)
(cid:115)(cid:0)(cid:0)(cid:37)(cid:88)(cid:80)(cid:69)(cid:82)(cid:73)(cid:69)(cid:78)(cid:67)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:78)(cid:0)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:84)(cid:69)(cid:65)(cid:77)
Suburban Propane maintains business operations in 41 states,
providing dependable service to approximately 1.1 million
residential, commercial, industrial and agricultural customers
through 675 company-owned locations.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(cid:95) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended September 24, 2016
(cid:134) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number: 1-14222
SUBURBAN PROPANE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
22-3410353
(I.R.S. Employer
Identification No.)
240 Route 10 West
Whippany, NJ 07981
(973) 887-5300
(Address, including zip code, and telephone number,
(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:85)(cid:72)(cid:68)(cid:3)(cid:70)(cid:82)(cid:71)(cid:72)(cid:15)(cid:3)(cid:82)(cid:73)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:86)(cid:12)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Units
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:95) No (cid:134)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:134) No (cid:95)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes (cid:95) No (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes (cid:95) No (cid:134)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:15)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:78)(cid:81)(cid:82)(cid:90)(cid:79)(cid:72)(cid:71)(cid:74)(cid:72)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:91)(cid:92)(cid:3) (cid:82)(cid:85)(cid:3) (cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) Part III of this
Form 10-K or any amendment to this Form 10-K. (cid:95)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:17)(cid:3)(cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:179)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:79)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:79)(cid:72)(cid:85)(cid:15)(cid:180)(cid:3)(cid:179)(cid:68)(cid:70)(cid:70)(cid:72)(cid:79)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:79)(cid:72)(cid:85)(cid:180) (cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:86)(cid:80)(cid:68)(cid:79)(cid:79)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)Rule 12b-2 of the Exchange
Act. (Check one):
Large accelerated filer (cid:95)
Non-accelerated filer
(cid:133)
(do not check if a smaller reporting company)
Accelerated filer
(cid:133)
Smaller reporting company (cid:134)
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of
1934). Yes (cid:134) No (cid:95)
The aggregate market value as of March 26, 2016 (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3) (cid:75)(cid:72)(cid:79)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3) (cid:81)(cid:82)(cid:81)-affiliates of the registrant, based on the
reported closing price of such units on the New York Stock Exchange on such date ($30.01 per unit), was approximately $1,823,192,000.
Documents Incorporated by Reference: None
Total number of pages (excluding Exhibits): 120
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
INDEX TO ANNUAL REPORT ON FORM 10-K
PART I
ITEM 1.
BUSINESS.............................................................................................................................................................
ITEM 1A.
RISK FACTORS....................................................................................................................................................
ITEM 1B.
UNRESOLVED STAFF COMMENTS.................................................................................................................
ITEM 2.
ITEM 3.
ITEM 4.
PROPERTIES ........................................................................................................................................................
LEGAL PROCEEDINGS ......................................................................................................................................
MINE SAFETY DISCLOSURES..........................................................................................................................
PART II
ITEM 5.
(cid:48)(cid:36)(cid:53)(cid:46)(cid:40)(cid:55)(cid:3)(cid:41)(cid:50)(cid:53)(cid:3)(cid:55)(cid:43)(cid:40)(cid:3)(cid:53)(cid:40)(cid:42)(cid:44)(cid:54)(cid:55)(cid:53)(cid:36)(cid:49)(cid:55)(cid:182)(cid:54)(cid:3)(cid:38)(cid:50)(cid:48)(cid:48)(cid:50)(cid:49)(cid:3)(cid:56)(cid:49)(cid:44)(cid:55)(cid:54)(cid:15)(cid:3)(cid:53)(cid:40)(cid:47)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:56)(cid:49)(cid:44)(cid:55)(cid:43)(cid:50)(cid:47)(cid:39)(cid:40)(cid:53)(cid:3)(cid:48)(cid:36)(cid:55)(cid:55)(cid:40)(cid:53)(cid:54)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)
ISSUER PURCHASES OF UNITS ..................................................................................................................
ITEM 6.
ITEM 7.
SELECTED FINANCIAL DATA .........................................................................................................................
(cid:48)(cid:36)(cid:49)(cid:36)(cid:42)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:182)(cid:54)(cid:3)(cid:39)(cid:44)(cid:54)(cid:38)(cid:56)(cid:54)(cid:54)(cid:44)(cid:50)(cid:49)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:36)(cid:49)(cid:36)(cid:47)(cid:60)(cid:54)(cid:44)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:41)(cid:44)(cid:49)(cid:36)(cid:49)(cid:38)(cid:44)(cid:36)(cid:47)(cid:3)(cid:38)(cid:50)(cid:49)(cid:39)(cid:44)(cid:55)(cid:44)(cid:50)(cid:49)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:53)(cid:40)(cid:54)(cid:56)(cid:47)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)
OPERATIONS ..................................................................................................................................................
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......................................
ITEM 8.
ITEM 9.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................................................................
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE ..................................................................................................................................................
ITEM 9A.
CONTROLS AND PROCEDURES ......................................................................................................................
ITEM 9B.
OTHER INFORMATION .....................................................................................................................................
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND PARTNERSHIP GOVERNANCE ............................................
ITEM 11.
EXECUTIVE COMPENSATION .........................................................................................................................
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
UNITHOLDER MATTERS .............................................................................................................................
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ....
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES ........................................................................................
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES .....................................................................................
SIGNATURES..................................................................................................................................................................................
PART IV
Page
1
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19
19
19
20
21
24
38
40
42
42
43
44
50
76
78
79
80
81
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-(cid:79)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:11)(cid:179)(cid:41)(cid:82)(cid:85)(cid:90)(cid:68)(cid:85)(cid:71)-(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3) (cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:12)(cid:3) (cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3)
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, relating to future business expectations and predictions and financial condition and results of
(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:47)(cid:17)(cid:51)(cid:17)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:17)(cid:3)(cid:54)(cid:82)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:70)(cid:68)(cid:81)(cid:3)(cid:69)(cid:72)(cid:3) identified by the use of forward-
(cid:79)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:68)(cid:86)(cid:3) (cid:179)(cid:83)(cid:85)(cid:82)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:86)(cid:15)(cid:180)(cid:3) (cid:179)(cid:82)(cid:88)(cid:87)(cid:79)(cid:82)(cid:82)(cid:78)(cid:15)(cid:180)(cid:3) (cid:179)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:86)(cid:15)(cid:180)(cid:3) (cid:179)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:180)(cid:3) (cid:179)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:71)(cid:86)(cid:15)(cid:180)(cid:3) (cid:179)(cid:80)(cid:68)(cid:92)(cid:15)(cid:180)(cid:3) (cid:179)(cid:90)(cid:76)(cid:79)(cid:79)(cid:15)(cid:180)(cid:3) (cid:179)(cid:86)(cid:75)(cid:82)(cid:88)(cid:79)(cid:71)(cid:15)(cid:180)(cid:3) (cid:179)(cid:68)(cid:81)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:180)(cid:3)
(cid:179)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:86)(cid:180)(cid:3)(cid:82)(cid:85)(cid:3)(cid:179)(cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:180)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:76)(cid:80)(cid:76)(cid:79)(cid:68)(cid:85)(cid:3)(cid:90)(cid:82)(cid:85)(cid:71)(cid:86)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:69)(cid:92)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)sion of trends and conditions, strategies
or risks and uncertainties. These Forward-Looking Statements involve certain risks and uncertainties that could cause actual results to
differ materially from those discussed or implied in such Forward-Looking Statements (statements contained in this Annual Report
(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:88)(cid:81)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:179)(cid:38)(cid:68)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:85)(cid:92)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:12)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:88)(cid:81)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:76)mpact on the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:15)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)ng risks:
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The impact of weather conditions on the demand for propane, fuel oil and other refined fuels, natural gas and electricity;
Volatility in the unit cost of propane, fuel oil and other refined fuels, natural gas and electricity, the impact of the Pa(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)
hedging and risk management activities, and the adverse impact of price increases on volumes sold as a result of customer
conservation;
The ability of the Partnership to compete with other suppliers of propane, fuel oil and other energy sources;
The impact on the price and supply of propane, fuel oil and other refined fuels from the political, military or economic
instability of the oil producing nations, global terrorism and other general economic conditions;
The ability of the Partnership to acquire sufficient volumes of, and the costs to the Partnership of acquiring, transporting and
storing, propane, fuel oil and other refined fuels;
The ability of the Partnership to acquire and maintain reliable transportation for its propane, fuel oil and other refined fuels;
The ability of the Partnership to retain customers or acquire new customers;
The impact of customer conservation, energy efficiency and technology advances on the demand for propane, fuel oil and other
refined fuels, natural gas and electricity;
The ability of management to continue to control expenses;
The impact of changes in applicable statutes and government regulations, or their interpretations, including those relating to the
environment and climate change, derivative instruments a(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:82)(cid:85)(cid:92)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:30)
The impact of changes in tax laws that could adversely affect the tax treatment of the Partnership for income tax purposes;
(cid:55)(cid:75)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:79)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:72)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:30)
The i(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:75)(cid:68)(cid:93)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3) (cid:68)(cid:71)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:79)(cid:92)(cid:3) (cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3)
insurance;
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:74)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:80)(cid:30)
The impact of current conditions in the global capital and credit markets, and general economic pressures;
The operating, legal and regulatory risks the Partnership may face; and
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:73)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:11)(cid:179)(cid:54)(cid:40)(cid:38)(cid:180)(cid:12)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:82)(cid:86)e factors
(cid:79)(cid:76)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:179)(cid:53)(cid:76)(cid:86)(cid:78)(cid:3)(cid:41)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:17)(cid:180)
Some of these Forward-(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3) (cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:80)(cid:82)(cid:85)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:3) (cid:76)(cid:81)(cid:3) (cid:179)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:38)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:53)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)this Annual Report. On different occasions, the Partnership or its representatives have made or
may make Forward-Looking Statements in other filings with the SEC, press releases or oral statements made by or with the approval of
(cid:82)(cid:81)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:68)uthorized executive officers. Readers are cautioned not to place undue reliance on Forward-Looking
(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:85)(cid:72)(cid:73)(cid:79)(cid:72)(cid:70)(cid:87)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:82)(cid:81)(cid:79)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:87)(cid:68)(cid:78)(cid:72)(cid:86)(cid:3)(cid:81)(cid:82)(cid:3)(cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:88)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:81)(cid:92) Forward-
Looking Statement or Cautionary Statement, except as required by law. All subsequent written and oral Forward-Looking Statements
attributable to the Partnership or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements in this
Annual Report and in future SEC reports. For a more complete discussion of specific factors which could cause actual results to differ
from those in the Forward-(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:38)(cid:68)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:85)(cid:92)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:86)(cid:72)(cid:72)(cid:3)(cid:179)(cid:53)(cid:76)(cid:86)(cid:78)(cid:3)(cid:41)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:17)
ITEM 1.
BUSINESS
Development of Business
PART I
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and distributor of a diverse array of products meeting the energy needs of our customers. We specialize in the distribution of propane,
fuel oil and refined fuels, as well as the marketing of natural gas and electricity in deregulated markets. In support of our core
marketing and distribution operations, we install and service a variety of home comfort equipment, particularly in the areas of heating
and ventilation. We believe, based on LP/Gas Magazine dated February 2016, that we are the third largest retail marketer of propane
in the United States, measured by retail gallons sold in the calendar year 2015. As of September 24, 2016, we were serving the energy
needs of approximately 1.1 million residential, commercial, industrial and agricultural customers through 675 locations in 41 states
with operations principally concentrated in the east and west coast regions of the United States, as well as portions of the midwest
region of the United States and Alaska. We sold approximately 414.8 million gallons of propane and 30.9 million gallons of fuel oil
and refined fuels to retail customers during the year ended September 24, 2016. Together with our predecessor companies, we have
been continuously engaged in the retail propane business since 1928.
We conduct our business principally through Suburban Propane, L.P., a Delaware limited partnership, which operates our
(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:81)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3) (cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:15)(cid:3) (cid:68)(cid:81)d the
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liability company whose sole member is the Chief Executive Officer of the Partnership. Since October 19, 2006, the General Partner
has no economic interest in either the Partnership or the Operating Partnership (which means that the General Partner is not entitled to
any cash distributions of either partnership, nor to any cash payment upon the liquidation of either partnership, nor any other economic
rights in either partnership) other than as a holder of 784 Common Units of the Partnership. Additionally, under the Third Amended
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rights for the benefit of the General Partner. The Partnership owns (directly and indirectly) all of the limited partner interests in the
Operating Partnership. The Common Units represent 100% of the limited partner interests in the Partnership.
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certain wholly-(cid:82)(cid:90)(cid:81)(cid:72)(cid:71)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:47)(cid:47)(cid:38)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:15)(cid:3) (cid:44)(cid:81)(cid:70)(cid:17)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)
(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:179)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:17)(cid:180)(cid:3)(cid:3)(cid:36)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)
Propane consisted of the former retail propane assets and operations, as well as the assets and operations of the refined fuels business,
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Propane and its remaining wholly-owned subsidiaries which we acquired in the Inergy Propane Acquisition became subsidiaries of
our Operating Partnership, but were merged into the Operating Partnership on April 30, 2013. The results of operations of Inergy
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Direct and indirect subsidiaries of the Operating Partnership include Suburban Heating Oil Partners, LLC, which owns and
operates the assets of our fuel oil and refined fuels business; Agway Energy Services, LLC, which owns and operates the assets of our
natural gas and electricity business; and Suburban Sales and Service, Inc., which conducts a portion of our service work and appliance
and parts business. Our fuel oil and refined fuels, natural gas and electricity and services businesses are structured as either limited
liability companies that are treated as corporations or corporate entities (collectivel(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:179)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:40)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:15)(cid:3)
are subject to corporate level income tax.
Suburban Energy Finance Corp., a direct 100%-owned subsidiary of the Partnership, was formed on November 26, 2003 to
serve as co-issuer, jointly and severally w(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:17)(cid:3)(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3)(cid:40)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:17)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)
nominal assets and conducts no business operations.
(cid:44)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:15)(cid:3)(cid:88)(cid:81)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:86)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:180)(cid:3)(cid:179)(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:15)(cid:180)(cid:3)(cid:179)(cid:90)(cid:72)(cid:15)(cid:180)(cid:3)(cid:179)(cid:88)(cid:86)(cid:15)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:82)(cid:88)(cid:85)(cid:180)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3) used to refer
to Suburban Propane Partners, L.P. and its consolidated subsidiaries, including the Operating Partnership. The Partnership and the
(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:82)(cid:73)fering of Common
Units.
We currently file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K with the
(cid:54)(cid:40)(cid:38)(cid:17)(cid:3)(cid:3)(cid:60)(cid:82)(cid:88)(cid:3) (cid:80)(cid:68)(cid:92)(cid:3)(cid:85)(cid:72)(cid:68)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:83)(cid:76)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3) (cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:90)(cid:72)(cid:3) (cid:73)(cid:76)(cid:79)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:40)(cid:38)(cid:3)(cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:40)(cid:38)(cid:182)(cid:86)(cid:3)(cid:51)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3) (cid:53)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:53)(cid:82)om at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-(cid:19)(cid:22)(cid:22)(cid:19)(cid:17)(cid:3)(cid:3)(cid:36)(cid:81)(cid:92)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:76)(cid:79)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:88)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:40)(cid:38)(cid:182)(cid:86)(cid:3)(cid:40)(cid:39)(cid:42)(cid:36)(cid:53)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:68)(cid:87)(cid:3)www.sec.gov.
1
Upon written request or through an information request link from our website at www.suburbanpropane.com, we will provide,
without charge, copies of our Annual Report on Form 10-K for the year ended September 24, 2016, each of the Quarterly Reports on
Form 10-Q, current reports filed or furnished on Form 8-K and all amendments to such reports as soon as is reasonably practicable
after such reports are electronically filed with or furnished to the SEC. Requests should be directed to: Suburban Propane Partners,
L.P., Investor Relations, P.O. Box 206, Whippany, New Jersey 07981-0206. The information contained on our website is not included
as part of, or incorporated by reference into, this Annual Report on Form 10-K.
Our Strategy
Our business strategy is to deliver increasing value to our Unitholders through initiatives, both internal and external, that are
geared toward achieving sustainable profitable growth and steady or increased quarterly distributions. The following are key elements
of our strategy:
Internal Focus on Driving Operating Efficiencies, Right-Sizing Our Cost Structure and Enhancing Our Customer Mix. We
focus internally on improving the efficiency of our existing operations, managing our cost structure and improving our customer mix.
Through investments in our technology infrastructure, we continue to seek to improve operating efficiencies and the return on assets
employed. We have developed a streamlined operating footprint and management structure to facilitate effective resource planning
and decision making. Our internal efforts are particularly focused in the areas of route optimization, forecasting customer usage,
inventory control, cash management and customer tracking. We will continue to pursue operational efficiencies while staying focused
on providing exceptional service to our customer base. Our systems platform is advanced and scalable and we will seek to leverage
that technology for enhanced routing, forecasting and customer relationship management.
Growing Our Customer Base by Improving Customer Retention and Acquiring New Customers. We set clear objectives to
focus our employees on seeking new customers and retaining existing customers by providing highly responsive customer service.
We believe that customer satisfaction is a critical factor in the growth and success of our operations. (cid:179)(cid:50)(cid:88)(cid:85)(cid:3) (cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:76)(cid:86)(cid:3) (cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)
(cid:54)(cid:68)(cid:87)(cid:76)(cid:86)(cid:73)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180) is one of our core operating philosophies. We measure and reward our customer service centers based on a combination
of profitability of the individual customer service center and net customer growth. We have made investments in training our people
both on techniques to provide exceptional customer service to our existing customer base, as well as advanced sales training focused
on growing our customer base.
Selective Acquisitions of Complementary Businesses or Assets. Externally, we seek to extend our presence or diversify our
product offerings through selective acquisitions. Our acquisition strategy is to focus on businesses with a relatively steady cash flow
that will extend our presence in strategically attractive markets, complement our existing business segments or provide an opportunity
to diversify our operations. We are very patient and deliberate in evaluating acquisition candidates.
Selective Disposition of Non-Strategic Assets. We continuously evaluate our existing facilities to identify opportunities to
optimize our return on assets by selectively divesting operations in slower growing markets, generating proceeds that can be
reinvested in markets that present greater opportunities for growth. Our objective is to maximize the growth and profit potential of all
of our assets.
Business Segments
We manage and evaluate our operations in four operating segments, three of which are reportable segments: Propane, Fuel Oil
and Refined Fuels and Natural Gas and Electricity. These business segments are described below. See the Notes to the Consolidated
Financial Statements included in this Annual Report for financial information about our business segments.
Propane is a by-product of natural gas processing and petroleum refining. It is a clean burning energy source recognized for its
transportability and ease of use relative to alternative forms of stand-alone energy sources. Propane use falls into three broad
categories:
Propane
(cid:120)
(cid:120)
(cid:120)
residential and commercial applications;
industrial applications; and
agricultural uses.
2
In the residential and commercial markets, propane is used primarily for space heating, water heating, clothes drying and
cooking. Industrial customers use propane generally as a motor fuel to power over-the-road vehicles, forklifts and stationary engines,
to fire furnaces, as a cutting gas and in other process applications. In the agricultural market, propane is primarily used for tobacco
curing, crop drying, poultry brooding and weed control.
Propane is extracted from natural gas or oil wellhead gas at processing plants or separated from crude oil during the refining
process. It is normally transported and stored in a liquid state under moderate pressure or refrigeration for ease of handling in
shipping and distribution. When the pressure is released or the temperature is increased, propane becomes a flammable gas that is
colorless and odorless, although an odorant is added to allow its detection. Propane is clean burning and, when consumed, produces
only negligible amounts of pollutants.
Product Distribution and Marketing
We distribute propane through a nationwide retail distribution network consisting of approximately 660 locations in 41 states as
of September 24, 2016. Our operations are principally concentrated in the east and west coast regions of the United States, as well as
portions of the midwest region of the United States and Alaska. As of September 24, 2016, we serviced approximately 942,000
propane customers. Typically, our customer service centers are located in suburban and rural areas where natural gas is not readily
available. Generally, these customer service centers consist of an office, appliance showroom, warehouse and service facilities, with
one or more 18,000 to 30,000 gallon storage tanks on the premises. Most of our residential customers receive their propane supply
through an automatic delivery system. These deliveries are scheduled through proprietary computer technology, based upon each
(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:68)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:72)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:3)(cid:36)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:3)(cid:69)(cid:88)(cid:71)(cid:74)(cid:72)(cid:87)(cid:3)payment
(cid:83)(cid:79)(cid:68)(cid:81)(cid:3) (cid:90)(cid:75)(cid:72)(cid:85)(cid:72)(cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:83)(cid:68)id for in a series of estimated equal
monthly payments over a twelve-month period. From our customer service centers, we also sell, install and service equipment to
customers who purchase propane from us including heating and cooking appliances and, at some locations, propane fuel systems for
motor vehicles.
We sell propane primarily to six customer markets: residential, commercial, industrial (including engine fuel), agricultural, other
retail users and wholesale. Approximately 95% of the propane gallons sold by us in fiscal 2016 were to retail customers: 45% to
residential customers, 27% to commercial customers, 9% to industrial customers, 5% to agricultural customers and 14% to other retail
users. The balance of approximately 5% of the propane gallons sold by us in fiscal 2016 was for risk management activities and
wholesale customers. No single customer accounted for 10% or more of our propane revenues during fiscal 2016.
Retail deliveries of propane are usually made to customers by means of bobtail and rack trucks. Propane is pumped from
bobtail trucks, which have capacities typically ranging from 2,400 gallons to 3,500 gallons of propane, into a stationary storage tank
(cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3) (cid:83)(cid:85)(cid:72)(cid:80)(cid:76)(cid:86)(cid:72)(cid:86)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3) (cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:87)(cid:68)(cid:81)(cid:78)(cid:86)(cid:3) (cid:85)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:68)(cid:83)(cid:83)(cid:85)oximately 100 gallons to approximately 1,200
gallons, with a typical tank having a capacity of 300 to 400 gallons. As is common in the propane industry, we own a significant
(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:87)(cid:68)(cid:81)(cid:78)(cid:86)(cid:3)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:83)(cid:85)(cid:72)(cid:80)(cid:76)(cid:86)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85) propane to retail customers in portable cylinders,
which typically have a capacity of 5 to 35 gallons. When these cylinders are delivered to customers, empty cylinders are refilled in
place or transported for replenishment at our distribution locations. We also deliver propane to certain other bulk end users in larger
trucks known as transports, which have an average capacity of approximately 9,000 gallons. End users receiving transport deliveries
include industrial customers, large-scale heating accounts, such as local gas utilities that use propane as a supplemental fuel to meet
peak load delivery requirements, and large agricultural accounts that use propane for crop drying.
Supply
Our propane supply is purchased from approximately 40 oil companies and natural gas processors at approximately 180 supply
points located in the United States and Canada. We make purchases primarily under one-year agreements that are subject to annual
renewal, and also purchase propane on the spot market. Supply contracts generally provide for pricing in accordance with posted
prices at the time of delivery or the current prices established at major storage points, and some contracts include a pricing formula
that typically is based on prevailing market prices. Some of these agreements provide maximum and minimum seasonal purchase
guidelines. Propane is generally transported from refineries, pipeline terminals, storage facilities (including our storage facility in Elk
Grove, California) and coastal terminals to our customer service centers by a combination of common carriers, owner-operators and
railroad tank cars. See Item 2 of this Annual Report.
Historically, supplies of propane have been readily available from our supply sources. However, during the fiscal 2014 heating
season, we were adversely affected by supply constraints resulting from industry-wide supply shortages and logistics issues involving
propane transportation sourcing and costs. Nevertheless, through relationships with our suppliers and extraordinary efforts by our
supply and logistics personnel, we were able to effectively manage the challenging environment in fiscal 2014 without a material
disruption in supply. Such supply shortages and logistics issues were not repeated during fiscal 2015 or fiscal 2016. Although we
3
make no assurance regarding the availability of supplies of propane in the future, we currently expect to be able to secure adequate
(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:17)(cid:3)(cid:3)(cid:39)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:38)(cid:85)(cid:72)(cid:86)(cid:87)(cid:90)(cid:82)(cid:82)(cid:71)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:47)(cid:17)(cid:51)(cid:17)(cid:3)(cid:11)(cid:179)(cid:38)(cid:85)(cid:72)(cid:86)(cid:87)(cid:90)(cid:82)(cid:82)(cid:71)(cid:180)(cid:12)(cid:15)(cid:3)(cid:55)(cid:68)(cid:85)(cid:74)(cid:68)(cid:3)(cid:47)(cid:76)(cid:84)(cid:88)(cid:76)ds Marketing and Trade
(cid:47)(cid:47)(cid:38)(cid:3)(cid:11)(cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:68)(cid:180)(cid:12)(cid:15)(cid:3)(cid:40)(cid:81)(cid:87)(cid:72)(cid:85)(cid:83)(cid:85)(cid:76)(cid:86)(cid:72)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:47)(cid:17)(cid:51)(cid:17)(cid:3)(cid:11)(cid:179)(cid:40)(cid:81)(cid:87)(cid:72)(cid:85)(cid:83)(cid:85)(cid:76)(cid:86)(cid:72)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:51)(cid:75)(cid:76)(cid:79)(cid:79)(cid:76)(cid:83)(cid:86)(cid:3)(cid:25)(cid:25)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:11)(cid:179)(cid:51)(cid:75)(cid:76)(cid:79)(cid:79)(cid:76)(cid:83)(cid:86)(cid:180)(cid:12)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:20)9%,
14%, 13% and 10% of our total propane purchases, respectively. No other single supplier accounted for more than 10% of our
propane purchases in fiscal 2016. The availability of our propane supply is dependent on several factors, including the severity of
winter weather, the magnitude of competing demands for available supply (e.g., crop drying and exports), the availability of
transportation and storage infrastructure and the price and availability of competing fuels, such as natural gas and fuel oil. We believe
that if supplies from Crestwood, Enterprise, Targa or Phillips were interrupted, we would be able to secure adequate propane supplies
from other sources without a material disruption of our operations. Nevertheless, the cost of acquiring and transporting such propane
might be higher and, at least on a short-term basis, our margins could be affected. Approximately 91% of our total propane purchases
were from domestic suppliers in fiscal 2016.
We seek to reduce the effect of propane price volatility on our product costs and to help ensure the availability of propane
during periods of short supply. We are currently a party to forward and option contracts with various third parties to purchase and sell
propane at fixed prices in the future. These activities are monitored by our senior management through enforcement of our Hedging
and Risk Management Policy. See Items 7 and 7A of this Annual Report.
We own and operate a large propane storage facility in Elk Grove, California. We also operate smaller storage facilities in other
locations and have rights to use storage facilities in additional locations. These storage facilities enable us to buy and store large
quantities of propane particularly during periods of low demand, which generally occur during the summer months. This practice
helps ensure a more secure supply of propane during periods of intense demand or price instability. As of September 24, 2016, the
majority of the storage capacity at our facility in Elk Grove, California was leased to third parties.
Competition
(cid:36)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:54)(cid:3)(cid:38)(cid:72)(cid:81)(cid:86)(cid:88)(cid:86)(cid:3)(cid:37)(cid:88)(cid:85)(cid:72)(cid:68)(cid:88)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:54)(cid:88)(cid:85)(cid:89)(cid:72)(cid:92)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:85)(cid:68)nks as the fourth most important source of
residential energy in the nation, with about 5% of all households using propane as their primary space heating fuel. This level has not
changed materially over the previous two decades. As an energy source, propane competes primarily with natural gas, electricity and
fuel oil, principally on the basis of price, availability and portability.
(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:76)(cid:86)(cid:3) (cid:80)(cid:82)(cid:85)(cid:72)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3) (cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:68)(cid:79)(cid:3) (cid:74)(cid:68)(cid:86)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:3) (cid:72)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:3) (cid:37)(cid:85)(cid:76)(cid:87)(cid:76)(cid:86)(cid:75)(cid:3) (cid:55)(cid:75)(cid:72)(cid:85)(cid:80)(cid:68)(cid:79)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:3) (cid:11)(cid:179)(cid:37)(cid:55)(cid:56)(cid:180)(cid:12)(cid:3) (cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3)
natural gas, but it is an alternative or supplement to natural gas in rural and suburban areas where natural gas is unavailable or
portability of product is required. Historically, the expansion of natural gas into traditional propane markets has been inhibited by the
capital costs required to expand pipeline and retail distribution systems. Although the extension of natural gas pipelines to previously
unserved geographic areas tends to displace propane distribution in those areas, we believe new opportunities for propane sales may
arise as new neighborhoods are developed in geographically remote areas. However, over the last few years, fewer new housing
developments have been started in our service areas as a result of recent economic circumstances. The increasing availability of
natural gas extracted from shale deposits in the United States may accelerate the extension of natural gas pipelines in the future.
Propane has some relative advantages over other energy sources. For example, in certain geographic areas, propane is generally
less expensive to use than electricity for space heating, water heating, clothes drying and cooking. Utilization of fuel oil is
geographically limited (primarily in the northeast), and even in that region, propane and fuel oil are not significant competitors
because of the cost of converting from one to the other.
In addition to competing with suppliers of other energy sources, our propane operations compete with other retail propane
distributors. The retail propane industry is highly fragmented and competition generally occurs on a local basis with other large full-
service multi-state propane marketers, thousands of smaller local independent marketers and farm cooperatives. Based on industry
statistics contained in 2014 Sales of Natural Gas Liquids and Liquefied Refinery Gases, as published by the American Petroleum
Institute in January 2016, and LP/Gas Magazine dated February 2016, the ten largest retailers, including us, account for approximately
36% of the total retail sales of propane in the United States. Each of our customer service centers operates in its own competitive
environment because retail marketers tend to locate in close proximity to customers in order to lower the cost of providing service.
Our typical customer service center has an effective marketing radius of approximately 50 miles, although in certain areas the
marketing radius may be extended by one or more satellite offices. Most of our customer service centers compete with five or more
marketers or distributors.
4
Fuel Oil and Refined Fuels
Product Distribution and Marketing
We market and distribute fuel oil, kerosene, diesel fuel and gasoline to approximately 48,000 residential and commercial
customers primarily in the northeast region of the United States. Sales of fuel oil and refined fuels for fiscal 2016 amounted to 30.9
million gallons. Approximately 66% of the fuel oil and refined fuels gallons sold by us in fiscal 2016 were to residential customers,
principally for home heating, 7% were to commercial customers, and 6% to other users. Sales of diesel and gasoline accounted for the
remaining 21% of total volumes sold in this segment during fiscal 2016. Fuel oil has a more limited use, compared to propane, and is
used almost exclusively for space and water heating in residential and commercial buildings. We sell diesel fuel and gasoline to
commercial and industrial customers for use primarily to operate motor vehicles.
Approximately 45% of our fuel oil customers receive their fuel oil under an automatic delivery system. These deliveries are
(cid:86)(cid:70)(cid:75)(cid:72)(cid:71)(cid:88)(cid:79)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:72)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:88)(cid:87)(cid:72)(cid:85)(cid:3) (cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:15)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:88)(cid:83)(cid:82)(cid:81)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:81)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:72)(cid:89)(cid:68)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)
weather conditions. Additionally, we offer our customers a budget payment plan whereby th(cid:72)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:3)(cid:82)(cid:76)(cid:79)(cid:3)
purchases are paid for in a series of estimated equal monthly payments over a twelve-month period. From our customer service
centers, we also sell, install and service equipment to customers who purchase fuel oil from us including heating appliances.
Deliveries of fuel oil are usually made to customers by means of tankwagon trucks, which have capacities ranging from 2,500
gallons to 3,000 gallons. Fuel oil is pumped from the tankwagon truck into a stationary storage (cid:87)(cid:68)(cid:81)(cid:78)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)
premises, which is owned by the customer. The capacity of customer storage tanks ranges from approximately 275 gallons to
approximately 1,000 gallons. No single customer accounted for 10% or more of our fuel oil revenues during fiscal 2016.
Supply
We obtain fuel oil and other refined fuels in pipeline, truckload or tankwagon quantities, and have contracts with certain
pipeline and terminal operators for the right to temporarily store fuel oil at 14 terminal facilities we do not own. We have
arrangements with certain suppliers of fuel oil, which provide open access to fuel oil at specific terminals throughout the northeast.
Additionally, a portion of our purchases of fuel oil are made at local wholesale terminal racks. In most cases, the supply contracts do
not establish the price of fuel oil in advance; rather, prices are typically established based upon market prices at the time of delivery
plus or minus a differential for transportation and volume discounts. We purchase fuel oil from approximately 30 suppliers at
approximately 50 supply points. While fuel oil supply is more susceptible to longer periods of supply constraint than propane, we
believe that our supply arrangements will provide us with sufficient supply sources. Although we make no assurance regarding the
availability of supplies of fuel oil in the future, we currently expect to be able to secure adequate supplies during fiscal 2017.
Competition
The fuel oil industry is a mature industry with total demand expected to remain relatively flat to moderately declining. The fuel
oil industry is highly fragmented, characterized by a large number of relatively small, independently owned and operated local
distributors. We compete with other fuel oil distributors offering a broad range of services and prices, from full service distributors to
those that solely offer the delivery service. We have developed a wide range of sales programs and service offerings for our fuel oil
customer base in an attempt to be viewed as a full service energy provider and to build customer loyalty. For instance, like most
companies in the fuel oil business, we provide home heating equipment repair service to our fuel oil customers on a 24-hour a day
basis. The fuel oil business unit also competes for retail customers with suppliers of alternative energy sources, principally natural
gas, propane and electricity.
Natural Gas and Electricity
We market natural gas and electricity through our 100%-owned subsidiary, Agway Energy Services, (cid:47)(cid:47)(cid:38)(cid:3) (cid:11)(cid:179)(cid:36)(cid:40)(cid:54)(cid:180)(cid:12)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
deregulated markets of New York and Pennsylvania primarily to residential and small commercial customers. Historically, local utility
companies provided their customers with all three aspects of electric and natural gas service: generation, transmission and
distribution. However, under deregulation, public utility commissions in several states are licensing energy service companies, such
as AES, to act as alternative suppliers of the commodity to end consumers. In essence, we make arrangements for the supply of
electricity or natural gas to specific delivery points. The local utility companies continue to distribute electricity and natural gas on
their distribution systems. The business strategy of this segment is to expand its market share by concentrating on growth in the
customer base and expansion into other deregulated markets that are considered strategic markets.
We serve approximately 80,000 natural gas and electricity customers in New York and Pennsylvania. During fiscal 2016, we
sold approximately 2.8 million dekatherms of natural gas and 443.3 million kilowatt hours of electricity through the natural gas and
5
electricity segment. Approximately 86% of our customers were residential households and the remainder were small commercial and
industrial customers. New accounts are obtained through numerous marketing and advertising programs, including telemarketing and
direct mail initiatives. Most local utility companies have established billing service arrangements whereby customers receive a single
bill from the local utility company which includes distribution charges from the local utility company, as well as product charges for
the amount of natural gas or electricity provided by AES and utilized by the customer. We have arrangements with several local
utility companies that provide billing and collection services for a fee. Under these arrangements, we are paid by the local utility
company for all or a portion of customer billings after a specified number of days following the customer billing with no further
recourse to AES.
Supply of natural gas is arranged through annual supply agreements with major national wholesale suppliers. Pricing under the
annual natural gas supply contracts is based on posted market prices at the time of delivery, and some contracts include a pricing
formula that typically is based on prevailing market prices. The majority of our electricity requirements are purchased through the
(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:54)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3)(cid:11)(cid:179)(cid:49)(cid:60)(cid:44)(cid:54)(cid:50)(cid:180)(cid:12)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:86)(cid:88)(cid:83)(cid:83)(cid:79)y agreement, as well as purchase arrangements through
other national wholesale suppliers on the open market. Electricity pricing under the NYISO agreement is based on local market
indices at the time of delivery. Competition is primarily with local utility companies, as well as other marketers of natural gas and
electricity providing similar alternatives as AES.
All Other
We sell, install and service various types of whole-house heating products, air cleaners, humidifiers and space heaters to the
customers of our propane, fuel oil, natural gas and electricity businesses. Our supply needs are filled through supply arrangements
with several large regional equipment manufacturers and distribution companies. Competition in this business segment is primarily
with small, local heating and ventilation providers and contractors, as well as, to a lesser extent, other regional service providers. The
focus of our ongoing service offerings are in support of the service needs of our existing customer base within our propane, refined
fuels and natural gas and electricity business segments. Additionally, we have entered into arrangements with third-party service
providers to complement and, in certain instances, supplement our existing service capabilities.
Seasonality
The retail propane and fuel oil distribution businesses, as well as the natural gas marketing business, are seasonal because the
primary use of these fuels is for heating residential and commercial buildings. Historically, approximately two-thirds of our retail
propane volume is sold during the six-month peak heating season from October through March. The fuel oil business tends to
experience greater seasonality given its more limited use for space heating, and approximately three-fourths of our fuel oil volumes
are sold between October and March. Consequently, sales and operating profits are concentrated in our first and second fiscal
quarters. Cash flows from operations, therefore, are greatest during the second and third fiscal quarters when customers pay for
product purchased during the winter heating season. We expect lower operating profits and either net losses or lower net income
during the period from April through September (our third and fourth fiscal quarters).
Weather conditions have a significant impact on the demand for our products, in particular propane, fuel oil and natural gas, for
both heating and agricultural purposes. Many of our customers rely on propane, fuel oil or natural gas primarily as a heating source.
Accordingly, the volume sold is directly affected by the severity of the winter weather in our service areas, which can vary
substantially from year to year. In any given area, sustained warmer than normal temperatures will tend to result in reduced propane,
fuel oil and natural gas consumption, while sustained colder than normal temperatures will tend to result in greater consumption.
Trademarks and Tradenames
(cid:58)(cid:72)(cid:3) (cid:88)(cid:87)(cid:76)(cid:79)(cid:76)(cid:93)(cid:72)(cid:3) (cid:68)(cid:3) (cid:89)(cid:68)(cid:85)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:80)(cid:68)(cid:85)(cid:78)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:81)(cid:68)(cid:80)(cid:72)(cid:86)(cid:3) (cid:82)(cid:90)(cid:81)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:88)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:179)(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:17)(cid:180)(cid:3) (cid:3) (cid:58)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:80)(cid:68)(cid:85)ks,
tradenames and other proprietary rights as valuable assets and believe that they have significant value in the marketing of our products
and services.
Government Regulation; Environmental, Health and Safety Matters
We are subject to various federal, state and local environmental, health and safety laws and regulations. Generally, these laws
impose limitations on the discharge of hazardous materials and pollutants and establish standards for the handling, transportation,
treatment, storage and disposal of solid and hazardous wastes and can require the investigation, cleanup or monitoring of
environmental contamination. These laws include the Resource Conservation and Recovery Act, the Comprehensive Environmental
(cid:53)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:72)(cid:15)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:47)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:11)(cid:179)(cid:38)(cid:40)(cid:53)(cid:38)(cid:47)(cid:36)(cid:180)(cid:12)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:79)(cid:72)(cid:68)(cid:81)(cid:3)(cid:36)(cid:76)(cid:85)(cid:3)(cid:36)(cid:70)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:70)(cid:70)(cid:88)(cid:83)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:54)(cid:68)(cid:73)(cid:72)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:43)(cid:72)(cid:68)(cid:79)(cid:87)(cid:75)(cid:3)(cid:36)(cid:70)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:72)(cid:85)(cid:74)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)
Planning and Community Right to Know Act, the Clean Water Act and comparable state statutes. CERCLA, also known as the
6
(cid:179)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:73)(cid:88)(cid:81)(cid:71)(cid:180)(cid:3)(cid:79)(cid:68)(cid:90)(cid:15)(cid:3)(cid:76)(cid:80)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)without regard to fault or the legality of the original conduct on certain classes of
(cid:83)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:81)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:179)(cid:75)(cid:68)(cid:93)(cid:68)(cid:85)(cid:71)(cid:82)(cid:88)(cid:86)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:87)(cid:68)(cid:81)(cid:70)(cid:72)(cid:180)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:89)(cid:76)ronment.
Propane is not a hazardous substance within the meaning of CERCLA, whereas some constituents contained in fuel oil are considered
hazardous substances. We own real property at locations where such hazardous substances may be or may have been present as a
result of prior activities.
We expect that we will be required to expend funds to participate in the remediation of certain sites, including sites where we
have been designated as a potentially responsible party under CERCLA or comparable state statutes and at sites with aboveground and
underground fuel storage tanks. We will also incur other expenses associated with environmental compliance. We continually
monitor our operations with respect to potential environmental issues, including changes in legal requirements and remediation
technologies.
Through an acquisition in fiscal 2004, and in the Inergy Propane Acquisition, we acquired certain properties with either known
or probable environmental exposure, some of which are currently in varying stages of investigation, remediation or monitoring.
Additionally, certain of the active sites acquired contained environmental conditions which required further investigation, future
remediation or ongoing monitoring activities. The environmental exposures included instances of soil, groundwater and/or other
impacts associated with the handling and storage of fuel oil, gasoline and diesel fuel. With respect to certain of the properties acquired
in the Inergy Propane Acquisition, Inergy (now known as Crestwood Equity Partners LP) is contractually obligated to indemnify us
for the costs associated with the investigation, monitoring, remediation and/or resolution of identified conditions. As of September 24,
2016, we had accrued environmental liabilities of $0.6 million representing the total estimated future liability for remediation and
monitoring of all of our properties.
Estimating the extent of our responsibility at a particular site, and the method and ultimate cost of remediation and monitoring
of that site, requires making numerous assumptions. As a result, the ultimate cost to remediate and monitor any site may differ from
current estimates, and will depend, in part, on whether there is additional contamination, not currently known to us, at that site.
However, we believe that our past experience provides a reasonable basis for estimating these liabilities. As additional information
becomes available, estimates are adjusted as necessary. While we do not anticipate that any such adjustment would be material to our
financial statements, the result of ongoing or future environmental studies or other factors could alter this expectation and require
recording additional liabilities. We currently cannot determine whether we will incur additional liabilities or the extent or amount of
any such liabilities, or the extent to which such additional liabilities would be subject to the contractual indemnification of Inergy.
(cid:49)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:85)(cid:72)(cid:3)(cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:36)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:49)(cid:41)(cid:51)(cid:36)(cid:180)(cid:12)(cid:3)(cid:51)(cid:68)(cid:80)(cid:83)(cid:75)(cid:79)(cid:72)(cid:87)(cid:3)(cid:49)(cid:82)(cid:86)(cid:17)(cid:3)(cid:24)(cid:23)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:24)(cid:27)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:3)(cid:85)(cid:88)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
safe handling of propane, or comparable regulations, have been adopted, in whole, in part or with state addenda, as the industry
In some
standard for propane storage, distribution and equipment installation and operation in all of the states in which we operate.
states these laws are administered by state agencies, and in others they are administered on a municipal level.
NFPA Pamphlet Nos. 30, 30A, 31, 385 and 395, which establish rules and procedures governing the safe handling of distillates
(fuel oil, kerosene and diesel fuel) and gasoline, or comparable regulations, have been adopted, in whole, in part or with state addenda,
as the industry standard for fuel oil, kerosene, diesel fuel and gasoline storage, distribution and equipment installation and operation in
all of the states in which we sell those products. In some states these laws are administered by state agencies and in others they are
administered on a municipal level.
With respect to the transportation of propane, distillates and gasoline by truck, we are subject to regulations promulgated under
various Federal statutes, including the Federal Motor Carrier Safety Improvement Act and the Hazardous Materials Transportation
Act. These laws and regulations cover the transportation of hazardous materials and are administered, respectively, by the Federal
Motor Carrier Safety Administration and the Pipeline and Hazardous Materials Safety Administration of the United States Department
(cid:82)(cid:73)(cid:3)(cid:55)(cid:85)(cid:68)(cid:81)(cid:86)(cid:83)(cid:82)(cid:85)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:39)(cid:50)(cid:55)(cid:180)(cid:12)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:76)(cid:80)(cid:76)(cid:79)(cid:68)(cid:85)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:74)(cid:72)(cid:81)(cid:70)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:85)(cid:68)(cid:76)(cid:81)ing programs to help ensure that our operations are in
compliance with these and other applicable safety laws and regulations. We maintain various permits that are necessary to operate our
facilities, some of which may be material to our operations. In c(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:39)(cid:50)(cid:55)(cid:182)(cid:86)(cid:3) (cid:83)(cid:76)(cid:83)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3) (cid:86)(cid:68)(cid:73)(cid:72)(cid:87)(cid:92)(cid:3) (cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)
(cid:179)(cid:77)(cid:88)(cid:85)(cid:76)(cid:86)(cid:71)(cid:76)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:180)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:72)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3)(cid:87)(cid:85)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:87)(cid:72)(cid:81)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86), provide
customers with periodic awareness notices and safety information, have established written procedures to minimize the hazards
resulting from gas pipeline emergencies and keep records of inspections. We believe that the procedures currently in effect at all of
our facilities are in compliance, in all material respects, with applicable laws and regulations concerning the handling, storage,
transportation and distribution of propane, distillates and gasoline.
Our operations are subject to workplace safety standards under the Federal Occupational Safety and Health Act of 1970 (OSHA)
and comparable state laws that regulate the protection of worker health and safety. Compliance with these standards is monitored
through required workplace injury and illness recordkeeping, and reporting. We believe that our operations are in compliance, in all
material respects, with applicable worker health and safety standards. We are also subject to laws and regulations governing the
7
security of hazardous materials, including propane, under the Federal Homeland Security Act of 2002, as administered by the
(cid:39)(cid:72)(cid:83)(cid:68)(cid:85)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:43)(cid:82)(cid:80)(cid:72)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3) (cid:11)(cid:179)(cid:39)(cid:43)(cid:54)(cid:180)(cid:12)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:39)(cid:43)(cid:54)(cid:3) (cid:83)(cid:85)(cid:82)(cid:80)(cid:88)(cid:79)(cid:74)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:75)(cid:72)(cid:80)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3) (cid:41)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:36)(cid:81)(cid:87)(cid:76)-(cid:55)(cid:72)(cid:85)(cid:85)(cid:82)(cid:85)(cid:76)(cid:86)(cid:80)(cid:3) (cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3) (cid:11)(cid:179)(cid:38)(cid:41)(cid:36)(cid:55)(cid:54)(cid:180)(cid:12)(cid:3)
regulation to identify and secure chemical facilities that present the greatest security risk using a risk-based tiering structure. We have
a number of facilities registered with the DHS. As a result of the CFATS Act of 2014, the DHS developed a revised tiering
methodology for chemical facilities. We will be required to submit revised Top Screen applications for all of our facilities over the
upcoming months. Should the number of our regulated facilities increase, we could incur additional costs for enhanced physical
security measures. We currently cannot determine the extent of such additional costs, if any, that may be required.
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climatic changes. Based on these findings, the EPA has begun adopting and implementing regulations to restrict emissions of GHGs
(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:92)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:40)(cid:51)(cid:36)(cid:182)(cid:86)(cid:3)(cid:68)(cid:88)(cid:87)(cid:75)(cid:82)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:3)(cid:42)(cid:43)(cid:42)(cid:86)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:88)(cid:83)(cid:75)(cid:72)ld by the
U.S. Supreme Court.
Both Houses of the United States Congress also have considered adopting legislation to reduce emissions of GHGs. Although
Congress has not yet enacted federal climate change legislation, numerous states and municipalities have adopted laws and policies on
climate change.
The adoption of federal, state or local climate change legislation or regulatory programs to reduce emissions of GHGs could
require us to incur increased capital and operating costs, with resulting impact on product price and demand. We cannot predict
whether or in what form climate change legislation provisions and renewable energy standards may be enacted. In addition, a possible
consequence of climate change is increased volatility in seasonal temperatures. It is difficult to predict how the market for our fuels
would be affected by increased temperature volatility, although if there is an overall trend of warmer temperatures, it could adversely
affect our business.
Future developments, such as stricter environmental, health or safety laws and regulations thereunder, could affect our
operations. We do not anticipate that the cost of our compliance with environmental, health and safety laws and regulations, including
CERCLA, as currently in effect and applicable to known sites will have a material adverse effect on our financial condition or results
of operations. To the extent we discover any environmental liabilities presently unknown to us or environmental, health or safety laws
or regulations are made more stringent, however, there can be no assurance that our financial condition or results of operations will
not be materially and adversely affected.
The Dodd-(cid:41)(cid:85)(cid:68)(cid:81)(cid:78)(cid:3)(cid:58)(cid:68)(cid:79)(cid:79)(cid:3)(cid:54)(cid:87)(cid:85)(cid:72)(cid:72)(cid:87)(cid:3)(cid:53)(cid:72)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:72)(cid:85)(cid:3)(cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:39)(cid:82)(cid:71)(cid:71)-(cid:41)(cid:85)(cid:68)(cid:81)(cid:78)(cid:3)(cid:36)(cid:70)(cid:87)(cid:180)(cid:12)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
of, and restrictions on, derivative transactions to include certain instruments used by the Partnership for risk management activities.
Pursuant to the Dodd-(cid:41)(cid:85)(cid:68)(cid:81)(cid:78)(cid:3)(cid:36)(cid:70)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:71)(cid:76)(cid:87)(cid:92)(cid:3)(cid:41)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:55)(cid:85)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:41)(cid:55)(cid:38)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:40)(cid:38)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)
and continue to promulgate, rules and regulations relating to, among other things, swaps, participants in the derivatives markets,
clearing of swaps and reporting of swap transactions. In general, the Dodd-Frank Act subjects swap transactions and participants to
greater regulation and supervision by the CFTC and the SEC and requires, or will require, many swaps to be cleared through a
registered CFTC- or SEC-clearing facility and executed on a designated exchange or swap execution facility.
We are subject to certain regulatory requirements as a result of the Dodd-Frank Act and the implementing regulations and may
be indirectly affected by regulatory requirements imposed on our derivatives counterparties. Transactional, margin, capital,
recordkeeping, reporting, clearing and other requirements may increase our operational and transactional cost of entering into and
maintaining derivatives contracts and may adversely affect the number and/or creditworthiness of derivatives counterparties available
to us. If we were to reduce our use of derivatives as a result of regulatory burdens or otherwise, our results of operations could
become more volatile and our cash flow could be less predictable.
(cid:48)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:72)(cid:3)(cid:71)(cid:82)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:83)(cid:68)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:79)(cid:68)(cid:90)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:88)(cid:81)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:82)(cid:85)(cid:3)(cid:71)(cid:72)(cid:70)(cid:72)(cid:83)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:72)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:69)(cid:72)(cid:87)(cid:90)(cid:72)en
consumers and sellers of products used for residential purposes, which give the Attorney General or other officials of that state the
authority to investigate alleged violations of those laws. From time to time, we receive inquiries or requests for additional information
under these laws from the offices of Attorneys General or other government officials in connection with the sale of our products to
residential customers. Based on information to date, and because our policies and business practices are designed to comply with all
applicable laws, we do not believe that the costs or liabilities associated with such inquiries or requests will result in a material adverse
effect on our financial condition or results of operations; however, there can be no assurance that our financial condition or results of
operations may not be materially and adversely affected as a result of current or future government investigations or civil litigation
derived therefrom.
8
Employees
As of September 24, 2016, we had 3,417 full time employees, of whom 642 were engaged in general and administrative
activities (including fleet maintenance), 34 were engaged in transportation and product supply activities and 2,741 were customer
service center employees. As of September 24, 2016, 70 of our employees were represented by 9 different local chapters of labor
unions. We believe that our relations with both our union and non-union employees are satisfactory. In addition, we hire temporary
workers to meet peak seasonal demands.
ITEM 1A. RISK FACTORS
Investing in our Common Units involves a high degree of risk. The most significant risks include those described below;
however, additional risks that we currently do not know about may also impair our business operations. You should carefully consider
the following risk factors, as well as the other information in this Annual Report. If any of the following risks actually occurs, our
business, results of operations and financial condition could be materially adversely affected. In this case, the trading price of our
Common Units would likely decline and you might lose part or all of the value in our Common Units. You should carefully consider
the specific risk factors set forth below as well as the other information contained or incorporated by reference in this Annual Report.
Some factors in this section are Forward-(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:53)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:41)(cid:82)(cid:85)(cid:90)(cid:68)(cid:85)(cid:71)-(cid:47)(cid:82)(cid:82)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:17)
Risks Related to Our Business and Industry
Since weather conditions may adversely affect demand for propane, fuel oil and other refined fuels and natural gas, our results of
operations and financial condition are vulnerable to warm winters.
Weather conditions have a significant impact on the demand for propane, fuel oil and other refined fuels and natural gas for both
heating and agricultural purposes. Many of our customers rely on propane, fuel oil or natural gas primarily as a heating source. The
volume of propane, fuel oil and natural gas sold is at its highest during the six-month peak heating season of October through March
and is directly affected by the severity of the winter. Typically, we sell approximately two-thirds of our retail propane volume and
approximately three-fourths of our retail fuel oil volume during the peak heating season.
Actual weather conditions can vary substantially from year to year, significantly affecting our financial performance. For
example, average temperatures in our service territories were 17% warmer than normal, 2% warmer than normal and 3% colder than
normal for fiscal 2016, fiscal 2015 and fiscal 2014, respectively, as measured by the number of heating degree days reported by the
(cid:49)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:50)(cid:70)(cid:72)(cid:68)(cid:81)(cid:76)(cid:70)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:87)(cid:80)(cid:82)(cid:86)(cid:83)(cid:75)(cid:72)(cid:85)(cid:76)(cid:70)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:49)(cid:50)(cid:36)(cid:36)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:41)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:80)(cid:82)(cid:85)(cid:72)(cid:15)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:72)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)
we operate can significantly affect the total volume of propane, fuel oil and other refined fuels and natural gas we sell and,
consequently, our results of operations. Variations in the weather in the northeast, where we have a greater concentration of propane
accounts and substantially all of our fuel oil and natural gas operations, generally have a greater impact on our operations than
variations in the weather in other markets. We can give no assurance that the weather conditions in any quarter or year will not have a
material adverse effect on our operations, or that our available cash will be sufficient to pay principal and interest on our indebtedness
and distributions to Unitholders.
Sudden increases in our costs to acquire and transport propane, fuel oil and other refined fuels and natural gas due to, among
other things, our inability to obtain adequate supplies from our usual suppliers, or our inability to obtain adequate supplies of such
products from alternative suppliers, may adversely affect our operating results.
Our profitability in the retail propane, fuel oil and refined fuels and natural gas businesses is largely dependent on the difference
between our costs to acquire and transport product and retail sales price. Propane, fuel oil and other refined fuels and natural gas are
commodities, and the availability of those products, and the unit prices we need to pay to acquire and transport those products, are
subject to volatile changes in response to changes in production and supply or other market conditions over which we have no control,
including the severity of winter weather, the price and availability of competing alternative energy sources, competing demands for
the products (including for export) and infrastructure (including highway, rail, pipeline and refinery) constraints. Our supply of these
products from our usual sources may be interrupted due to these and other reasons that are beyond our control, necessitating the
transportation of product, if it is available at all, by truck, rail car or other means from other suppliers in other areas, with resulting
delay in receipt and delivery to customers and increased expense. As a result, our costs of acquiring and transporting alternative
supplies of these products to our facilities might be materially higher at least on a short-term basis. Since we may not be able to pass
on to our customers immediately, or in full, all increases in our wholesale and transportation costs of propane, fuel oil and other
refined fuels and natural gas, these increases could reduce our profitability. In addition, our inability to obtain sufficient supplies of
propane, fuel oil and other refined fuels and natural gas in order for us to fully meet our customer demand for these products on a
timely basis could adversely affect our revenues, and consequently our profitability.
9
In general, product supply contracts permit suppliers to charge posted prices at the time of delivery or the current prices
established at major supply points, including Mont Belvieu, Texas, and Conway, Kansas. We engage in transactions to manage the
price risk associated with certain of our product costs from time to time in an attempt to reduce cost volatility and to help ensure
availability of product. We can give no assurance that future increases in our costs to acquire and transport propane, fuel oil and
natural gas will not have a material adverse effect on our profitability and cash flow, or that our available cash will be sufficient to pay
principal and interest on our indebtedness and distributions to our Unitholders.
High prices for propane, fuel oil and other refined fuels and natural gas can lead to customer conservation, resulting in reduced
demand for our product.
Prices for propane, fuel oil and other refined fuels and natural gas are subject to fluctuations in response to changes in wholesale
prices and other market conditions beyond our control. Therefore, our average retail sales prices can vary significantly within a
heating season or from year to year as wholesale prices fluctuate with propane, fuel oil and natural gas commodity market conditions.
During periods of high propane, fuel oil and other refined fuels and natural gas product costs our selling prices generally increase.
High prices can lead to customer conservation, resulting in reduced demand for our product.
Because of the highly competitive nature of the retail propane and fuel oil businesses, we may not be able to retain existing
customers or acquire new customers, which could have an adverse impact on our operating results and financial condition.
The retail propane and fuel oil industries are mature and highly competitive. We expect overall demand for propane and fuel oil
to be relatively flat to moderately declining over the next several years. Year-to-year industry volumes of propane and fuel oil are
expected to be primarily affected by weather patterns and from competition intensifying during warmer than normal winters, as well
as from the impact of a sustained higher commodity price environment on customer conservation and the impact of continued
weakness in the economy on customer buying habits.
Propane and fuel oil compete with electricity, natural gas and other existing and future sources of energy, some of which are, or
may in the future be, less costly for equivalent energy value. For example, natural gas currently is a significantly less expensive
source of energy than propane and fuel oil on an equivalent BTU basis. As a result, except for some industrial and commercial
applications, propane and fuel oil are generally not economically competitive with natural gas in areas where natural gas pipelines
already exist. (cid:55)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:68)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:182)(cid:86)(cid:3)(cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:68)(cid:79)(cid:3)(cid:74)(cid:68)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:86)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:68)(cid:79)(cid:3)(cid:74)(cid:68)(cid:86)(cid:3)(cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:85)(cid:72)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
previously depended upon propane or fuel oil. We expect this trend to continue, and, with the increasingly abundant supply of natural
gas from domestic sources, perhaps accelerate. Propane and fuel oil compete to a lesser extent with each other due to the cost of
converting from one to the other.
In addition to competing with other sources of energy, our propane and fuel oil businesses compete with other distributors of
those respective products principally on the basis of price, service and availability. Competition in the retail propane business is
highly fragmented and generally occurs on a local basis with other large full-service multi-state propane marketers, thousands of
smaller local independent marketers and farm cooperatives. Our fuel oil business competes with fuel oil distributors offering a broad
range of services and prices, from full service distributors to those offering delivery only. In addition, our existing fuel oil customers,
unlike our existing propane customers, generally own their own tanks, which can result in intensified competition for these customers.
As a result of the highly competitive nature of the retail propane and fuel oil businesses, our growth within these industries
depends on our ability to acquire other retail distributors, open new customer service centers, add new customers and retain existing
customers. We can give no assurance that we will be able to acquire other retail distributors, add new customers and retain existing
customers.
Energy efficiency, general economic conditions and technological advances have affected and may continue to affect demand for
propane and fuel oil by our retail customers.
The national trend toward increased conservation and technological advances, including installation of improved insulation and
the development of more efficient furnaces and other heating devices, has adversely affected the demand for propane and fuel oil by
our retail customers which, in turn, has resulted in lower sales volumes to our customers. In addition, continued weakness in the
economy may lead to additional conservation by retail customers seeking to further reduce their heating costs, particularly during
periods of sustained higher commodity prices. Future technological advances in heating, conservation and energy generation and
continued economic weakness may adversely affect our volumes sold, which, in turn, may adversely affect our financial condition and
results of operations.
10
Current conditions in the global capital and credit markets, and general economic pressures, may adversely affect our financial
position and results of operations.
Our business and operating results are materially affected by worldwide economic conditions. Current conditions in the global
capital and credit markets and general economic pressures have led to declining consumer and business confidence, increased market
volatility and reduction of business activity generally. This turmoil, especially when coupled with increasing energy prices, may
cause our customers to experience cash flow shortages which in turn may lead to delayed or cancelled plans to purchase our products,
and affect the ability of our customers to pay for our products. In addition, disruptions in the U.S. residential mortgage market and the
rate of mortgage foreclosures may adversely affect retail customer demand for our products (in particular, products used for home
heating and home comfort equipment) and our business and results of operations.
Our operating results and ability to generate sufficient cash flow to pay principal and interest on our indebtedness, and to pay
distributions to Unitholders, may be affected by our ability to continue to control expenses.
The propane and fuel oil industries are mature and highly fragmented with competition from other multi-state marketers and
thousands of smaller local independent marketers. Demand for propane and fuel oil is expected to be affected by many factors beyond
our control, including, but not limited to, the severity of weather conditions during the peak heating season, customer conservation
driven by high energy costs and other economic factors, as well as technological advances impacting energy efficiency. Accordingly,
our propane and fuel oil sales volumes and related gross margins may be negatively affected by these factors beyond our control. Our
operating profits and ability to generate sufficient cash flow may depend on our ability to continue to control expenses in line with
sales volumes. We can give no assurance that we will be able to continue to control expenses to the extent necessary to reduce the
effect on our profitability and cash flow from these factors.
The risk of terrorism, political unrest and the current hostilities in the Middle East or other energy producing regions may
adversely affect the economy and the price and availability of propane, fuel oil and other refined fuels and natural gas.
Terrorist attacks, political unrest and the current hostilities in the Middle East or other energy producing regions may adversely
impact the price and availability of propane, fuel oil and other refined fuels and natural gas, as well as our results of operations, our
ability to raise capital and our future growth. The impact that the foregoing may have on our industry in general, and on us in
particular, is not known at this time. An act of terror could result in disruptions of crude oil or natural gas supplies and markets (the
sources of propane and fuel oil), and our infrastructure facilities could be direct or indirect targets. Terrorist activity may also hinder
our ability to transport propane, fuel oil and other refined fuels if our means of supply transportation, such as rail or pipeline, become
damaged as a result of an attack. A lower level of economic activity could result in a decline in energy consumption, which could
adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism could also affect
our ability to raise capital. Terrorist activity, political unrest and hostilities in the Middle East or other energy producing regions could
likely lead to increased volatility in prices for propane, fuel oil and other refined fuels and natural gas. We have opted to purchase
insurance coverage for terrorist acts within our property and casualty insurance programs, but we can give no assurance that our
insurance coverage will be adequate to fully compensate us for any losses to our business or property resulting from terrorist acts.
Our financial condition and results of operations may be adversely affected by governmental regulation and associated
environmental and health and safety costs.
Our business is subject to a wide and ever increasing range of federal, state and local laws and regulations related to
environmental and health and safety matters including those concerning, among other things, the investigation and remediation of
contaminated soil, groundwater and other environmental media, and the transportation of hazardous materials. These requirements are
complex, changing and tend to become more stringent over time. In addition, we are required to maintain various permits that are
necessary to operate our facilities, some of which are material to our operations. There can be no assurance that we have been, or will
be, at all times in complete compliance with all legal, regulatory and permitting requirements or that we will not incur significant costs
in the future relating to such requirements. Violations could result in penalties, or the curtailment or cessation of operations.
Moreover, currently unknown environmental issues, such as the discovery of additional contamination, may result in significant
additional expenditures, and potentially significant expenditures also could be required to comply with future changes to
environmental laws and regulations or the interpretation or enforcement thereof. Such expenditures, if required, could have a material
adverse effect on our business, financial condition or results of operations.
11
We are subject to operating hazards and litigation risks that could adversely affect our operating results to the extent not covered
by insurance.
Our operations are subject to all operating hazards and risks normally associated with handling, storing and delivering
combustible liquids such as propane, fuel oil and other refined fuels. We have been, and are likely to continue to be, a defendant in
various legal proceedings and litigation arising in the ordinary course of business, both as a result of these operating hazards and risks
and as a result of other aspects of our business. We are self-insured for general and produ(cid:70)(cid:87)(cid:15)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:82)(cid:69)(cid:76)(cid:79)(cid:72)(cid:3)
liabilities up to predetermined amounts above which third-party insurance applies. We cannot guarantee that our insurance will be
adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that
these levels of insurance will be available at economical prices, or that all legal matters that arise will be covered by our insurance
programs.
If we are unable to make acquisitions on economically acceptable terms or effectively integrate such acquisitions into our
operations, our financial performance may be adversely affected.
The retail propane and fuel oil industries are mature. We expect overall demand for propane and fuel oil to be relatively flat to
moderately declining over the next several years. With respect to our retail propane business, it may be difficult for us to increase our
aggregate number of retail propane customers except through acquisitions. As a result, we expect the success of our financial
performance to depend, in part, upon our ability to acquire other retail propane and fuel oil distributors or other energy-related
businesses and to successfully integrate them into our existing operations and to make cost saving changes. The competition for
acquisitions is intense and we can make no assurance that we will be able to acquire other propane and fuel oil distributors or other
energy-related businesses on economically acceptable terms or, if we do, that we can integrate the acquired operations effectively.
The adoption of climate change legislation could result in increased operating costs and reduced demand for the products and
services we provide.
(cid:44)(cid:81)(cid:3)(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:19)(cid:28)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:51)(cid:36)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:3)(cid:179)(cid:40)(cid:81)(cid:71)(cid:68)(cid:81)(cid:74)(cid:72)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:41)(cid:76)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:79)(cid:72)(cid:68)(cid:81)(cid:3)(cid:36)(cid:76)(cid:85)(cid:3)(cid:36)(cid:70)(cid:87)(cid:15)(cid:3) determining that emissions of GHGs
present an endangerment to public health and the environment because emissions of such gases may be contributing to warming of the
(cid:72)(cid:68)(cid:85)(cid:87)(cid:75)(cid:182)(cid:86)(cid:3)(cid:68)(cid:87)(cid:80)(cid:82)(cid:86)(cid:83)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:79)(cid:76)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:17)(cid:3) Based on these findings, the EPA has begun adopting and implementing regulations to
(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:3)(cid:72)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:42)(cid:43)(cid:42)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:69)(cid:92)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:40)(cid:51)(cid:36)(cid:182)(cid:86)(cid:3)(cid:68)(cid:88)(cid:87)(cid:75)(cid:82)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3) regulate
GHGs has been upheld by the U.S. Supreme Court.
Both Houses of the United States Congress also have considered adopting legislation to reduce emissions of GHGs. Although
Congress has not yet enacted federal climate change legislation, numerous states and municipalities have adopted laws and policies on
climate change.
The adoption of federal, state or local climate change legislation or regulatory programs to reduce emissions of GHGs could
require us to incur increased capital and operating costs, with resulting impact on product price and demand. We cannot predict
whether or in what form climate change legislation provisions and renewable energy standards may be enacted. In addition, a possible
consequence of climate change is increased volatility in seasonal temperatures. It is difficult to predict how the market for our fuels
would be affected by increased temperature volatility, although if there is an overall trend of warmer temperatures, it could adversely
affect our business.
Our use of derivative contracts involves credit and regulatory risk and may expose us to financial loss.
From time to time, we enter into hedging transactions to reduce our business risks arising from fluctuations in commodity prices
and interest rates. Hedging transactions expose us to risk of financial loss in some circumstances, including if the other party to the
contract defaults on its obligations to us or if there is a change in the expected differential between the price of the underlying
commodity or financial metric provided in the hedging agreement and the actual amount received.
Transactional, margin, capital, recordkeeping, reporting, clearing and other requirements imposed on parties to derivatives
transactions as a result of legislation (such as the Dodd-Frank Act) and related rulemaking may increase our operational and
transactional cost of entering into and maintaining derivatives contracts and may adversely affect the number and/or creditworthiness
of derivatives counterparties available to us. If we were to reduce our use of derivatives as a result of regulatory burdens or otherwise,
our results of operations could become more volatile and our cash flow could be less predictable.
12
Because we depend on particular management information systems to effectively manage all aspects of our delivery of propane, a
failure in our operational systems or cyber security attacks on any of our facilities, or those of third parties, may adversely affect
our financial results.
We depend on our management information systems to process orders, manage inventory and accounts receivable collections,
maintain distributor and customer information, maintain cost-efficient operations and assist in delivering our products on a timely
basis. In addition, our staff of management information systems professionals relies heavily on the support of several key personnel
and vendors. Any disruption in the operation of those management information systems, loss of employees knowledgeable about such
systems, termination of our relationship with one or more of these key vendors or failure to continue to modify such systems
effectively as our business expands could negatively affect our business.
If any of our financial, operational, or other data processing systems fail or have other significant shortcomings, our financial
results could be adversely affected. Our financial results also could be adversely affected if an employee or third party causes our
operational systems to fail, either as a result of inadvertent error or by deliberately tampering with or manipulating our operational
systems. In addition, dependence upon automated systems may further increase the risk that operational system flaws, employee
tampering or manipulation of those systems will result in losses that are difficult to detect or recoup, including damage to our
reputation. To the extent customer data is hacked or misappropriated, we could be subject to liability to affected persons.
Cash distributions are not guaranteed and may fluctuate with our performance and other external factors.
Risks Inherent in the Ownership of Our Common Units
Cash distributions on our Common Units are not guaranteed, and depend primarily on our cash flow and our cash on hand.
Because they are not dependent on profitability, which is affected by non-cash items, our cash distributions might be made during
periods when we record losses and might not be made during periods when we record profits.
The amount of cash we generate may fluctuate based on our performance and other factors, including:
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the impact of the risks inherent in our business operations, as described above;
required principal and interest payments on our debt and restrictions contained in our debt instruments;
issuances of debt and equity securities;
our ability to control expenses;
fluctuations in working capital;
capital expenditures; and
financial, business and other factors, a number of which will be beyond our control.
Our Partnership Agreement gives our Board of Supervisors broad discretion in establishing cash reserves for, among other
things, the proper conduct of our business. These cash reserves will affect the amount of cash available for distributions.
We have substantial indebtedness. Our debt agreements may limit our ability to make distributions to Unitholders, as well as our
financial flexibility.
As of September 24, 2016, our long-term debt borrowings consisted of $346.2 million in aggregate principal amount of 7.375%
senior notes due August 1, 2021 (excluding unamortized premium of $17.0 million), $525.0 million in aggregate principal amount of
5.5% senior notes due June 1, 2024, $250.0 million in aggregate principal amount of 5.75% senior notes due March 1, 2025 and
$100.0 million under our $500.0 million senior secured revolving credit facility. The payment of principal and interest on our debt
will reduce the cash available to make distributions on our Common Units. In addition, we will not be able to make any distributions
to holders of our Common Units if there is, or after giving effect to such distribution, there would be, an event of default under the
indentures governing the senior notes and the senior secured revolving credit facility. The amount of distributions that we may make
to holders of our Common Units is limited by the senior notes, and the amount of distributions that the Operating Partnership may
make to us is limited by our revolving credit facility.
The revolving credit facility and the senior notes both contain various restrictive and affirmative covenants applicable to us, the
Operating Partnership and its subsidiaries, respectively, including (i) restrictions on the incurrence of additional indebtedness, and
(ii) restrictions on certain liens, investments, guarantees, loans, advances, payments, mergers, consolidations, distributions, sales of
13
assets and other transactions. The revolving credit facility contains certain financial covenants: (a) requiring our consolidated interest
coverage ratio, as defined, to be not less than 2.5 to 1.0 as of the end of any fiscal quarter; (b) prohibiting our total consolidated
leverage ratio, as defined, from being greater than 5.5 to 1.0 as of the end of any fiscal quarter; and (c) prohibiting the senior secured
consolidated leverage ratio, as defined, of the Operating Partnership from being greater than 3.0 to 1.0 as of the end of any fiscal
quarter. Under the indentures governing the senior notes, we are generally permitted to make cash distributions equal to available
cash, as defined, as of the end of the immediately preceding quarter, if no event of default exists or would exist upon making such
distributions, and our consolidated fixed charge coverage ratio, as defined, is greater than 1.75 to 1. We and the Operating Partnership
were in compliance with all covenants and terms of the senior notes and the revolving credit facility as of September 24, 2016.
The amount and terms of our debt may also adversely affect our ability to finance future operations and capital needs, limit our
ability to pursue acquisitions and other business opportunities and make our results of operations more susceptible to adverse
economic and industry conditions. In addition to our outstanding indebtedness, we may in the future require additional debt to finance
acquisitions or for general business purposes; however, credit market conditions may impact our ability to access such financing. If
we are unable to access needed financing or to generate sufficient cash from operations, we may be required to abandon certain
projects or curtail capital expenditures. Additional debt, where it is available, could result in an increase in our leverage. Our ability
to make principal and interest payments depends on our future performance, which is subject to many factors, some of which are
beyond our control. As interest expense increases (whether due to an increase in interest rates and/or the size of aggregate outstanding
debt), our ability to fund distributions on our Common Units may be impacted, depending on the level of revenue generation, which is
not assured.
Unitholders have limited voting rights.
A Board of Supervisors governs our operations. Unitholders have only limited voting rights on matters affecting our business,
including the right to elect the members of our Board of Supervisors every three years and the right to vote on the removal of the
general partner.
It may be difficult for a third party to acquire us, even if doing so would be beneficial to our Unitholders.
Some provisions of our Partnership Agreement may discourage, delay or prevent third parties from acquiring us, even if doing
so would be beneficial to our Unitholders. For example, our Partnership Agreement contains a provision, based on Section 203 of the
Delaware General Corporation Law, that generally prohibits the Partnership from engaging in a business combination with a 15% or
greater Unitholder for a period of three years following the date that person or entity acquired at least 15% of our outstanding
Common Units, unless certain exceptions apply. Additionally, our Partnership Agreement sets forth advance notice procedures for a
Unitholder to nominate a Supervisor to stand for election, which procedures may discourage or deter a potential acquirer from
(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:3)(cid:86)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:82)(cid:90)(cid:81)(cid:3)(cid:86)(cid:79)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3)(cid:68)(cid:87)(cid:87)(cid:72)(cid:80)(cid:83)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:69)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)ol of the
Partnership. These nomination procedures may not be revised or repealed, and inconsistent provisions may not be adopted, without
the approval of the holders of at least 66-2/3% of the outstanding Common Units. These provisions may have an anti-takeover effect
with respect to transactions not approved in advance by our Board of Supervisors, including discouraging attempts that might result in
a premium over the market price of the Common Units held by our Unitholders.
Unitholders may not have limited liability in some circumstances.
A number of states have not clearly established limitations on the liabilities of limited partners for the obligations of a limited
partnership. Our Unitholders might be held liable for our obligations as if they were general partners if:
(cid:120)
(cid:120)
a court or government agency determined that we were conducting business in the state but had not complied with the
(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:182)(cid:86)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:87)(cid:72)(cid:30)(cid:3)(cid:82)(cid:85)
(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:74)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:80)(cid:82)(cid:89)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:68)(cid:78)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)
Agreement are deemed to (cid:70)(cid:82)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:87)(cid:72)(cid:3) (cid:179)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:180)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:182)(cid:86)(cid:3) (cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)
partnership statute.
14
Unitholders may have liability to repay distributions.
Unitholders will not be liable for assessments in addition to their initial capital investment in the Common Units. Under specific
circumstances, however, Unitholders may have to repay to us amounts wrongfully returned or distributed to them. Under Delaware
law, we may not make a distribution to Unitholders if the distribution causes our liabilities to exceed the fair value of our assets.
Liabilities to partners on account of their partnership interests and nonrecourse liabilities are not counted for purposes of determining
whether a distribution is permitted. Delaware law provides that a limited partner who receives a distribution of this kind and knew at
the time of the distribution that the distribution violated Delaware law will be liable to the limited partnership for the distribution
amount for three years from the distribution date. Under Delaware law, an assignee who becomes a substituted limited partner of a
limited partnership is liable for the obligations of the assignor to make contributions to the partnership. However, such an assignee is
not obligated for liabilities unknown to him at the time he or she became a limited partner if the liabilities could not be determined
from the partnership agreement.
If we issue additional limited partner interests or other equity securities as consideration for acquisitions or for other purposes, the
(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:89)(cid:82)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:3) (cid:82)(cid:73)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3) (cid:90)(cid:76)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:76)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3) (cid:71)(cid:88)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:76)(cid:79)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3) (cid:68)nd
additional taxable income may be allocated to each Unitholder.
Our Partnership Agreement generally allows us to issue additional limited partner interests and other equity securities without
the approval of our Unitholders. Therefore, when we issue additional Common Units or securities ranking on a parity with the
(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:15)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:87)(cid:72)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:76)(cid:81)terest will decrease, and the amount of cash distributed on each
Common Unit and the market price of Common Units could decrease. The issuance of additional Common Units will also diminish
the relative voting strength of each previously outstanding Common Unit. In addition, the issuance of additional Common Units will,
over time, result in the allocation of additional taxable income, representing built-in gains at the time of the new issuance, to those
Unitholders that existed prior to the new issuance.
Tax Risks to Unitholders
Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes. The Internal Revenue Service
(cid:11)(cid:179)(cid:44)(cid:53)(cid:54)(cid:180)(cid:12)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:87)(cid:85)(cid:72)(cid:68)(cid:87)(cid:3)(cid:88)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)n to Unitholders.
The anticipated after-tax economic benefit of an investment in our Common Units depends largely on our being treated as a
partnership for U.S. federal income tax purposes. If less than 90% of the gross income of a publicly traded partnership, such as
(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3) (cid:47)(cid:17)(cid:51)(cid:17)(cid:15)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:76)(cid:86)(cid:3) (cid:179)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:180)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81) 7704 of the Internal
Revenue Code, that partnership will be taxable as a corporation for U.S. federal income tax purposes for that taxable year and all
subsequent years.
If we were treated as a corporation for U.S. federal income tax purposes, then we would pay U.S. federal income tax on our
income at the corporate tax rate, which is currently a maximum of 35%, and would likely pay additional state income tax at varying
rates. Because a tax would be imposed upon us as a corporation, our cash available for distribution to Unitholders would be
substantially reduced. Treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after-tax
return to Unitholders and thus would likely result in a substantial reduction in the value of our Common Units.
The tax treatment of publicly traded partnerships or an investment in our Common Units could be subject to potential legislative,
judicial or administrative changes and differing interpretations thereof, possibly on a retroactive basis.
The present U.S. federal income tax treatment of publicly traded partnerships, including Suburban Propane Partners, L.P., or an
investment in our Common Units may be modified by legislative, judicial or administrative changes and differing interpretations
thereof at any time. Any modification to the U.S. federal income tax laws or interpretations thereof may or may not be applied
retroactively. Moreover, any such modification could make it more difficult or impossible for us to meet the exception that allows
publicly traded partnerships that generate qualifying income to be treated as partnerships (rather than as corporations) for U.S. federal
income tax purposes, affect or cause us to change our business activities, or affect the tax consequences of an investment in our
Common Units. On May 5, 2015, the U.S. Treasury Department and the Internal Revenue Service issued proposed regulations
interpreting the scope of qualifying income for publicly traded partnerships by providing industry-specific guidance with respect to
activities that will generate qualifying income for purposes of the qualifying income requirement. The proposed regulations could
modify the amount of our gross income that we are able to treat as qualifying income for purposes of the qualifying income
requirement. Based on the legislative history of Section 7704 of the Internal Revenue Code and previous Internal Revenue Service
guidance, we do not believe that the proposed regulations should affect our ability to qualify as a publicly traded partnership or the
characterization of the income from our propane activities as qualifying income. However, there are no assurances that the proposed
regulations, when published as final regulations, will not take a position that is contrary to our interpretation of Section 7704 of the
Internal Revenue Code. We have not requested, and do not plan to request, a ruling from the IRS on this or any other tax matter
15
affecting us. We are unable to predict whether any of these changes, or other proposals, will ultimately be enacted. Any such changes
could negatively impact the value of an investment in our units.
In addition, because of widespread state budget deficits and other reasons, several states are evaluating ways to subject
partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation.
If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may collect
any resulting taxes (including any applicable penalties and interest) directly from the Partnership, in which case cash available to
service debt or to pay distributions to our unitholders, if and when resumed, might be substantially reduced.
Pursuant to the Bipartisan Budget Act of 2015, if the IRS makes audit adjustments to our income tax returns for tax years
beginning after 2017, it may collect any resulting taxes (including any applicable penalties and interest) directly from us. We will
generally have the ability to shift any such tax liability to our unitholders in accordance with their interests in us during the year under
audit, but there can be no assurance that we will be able to do so (and will choose to do so) under all circumstances, or that we will be
able to (or choose to) effect corresponding shifts in state income or similar tax liability resulting from the IRS adjustment in states in
which we do business in the year under audit or in the adjustment year. If we make payments of taxes, penalties and interest resulting
from audit adjustments, cash available to service debt or to resume payment of distributions to our unitholders could be reduced.
A successful IRS contest of the U.S. federal income tax positions we take may adversely affect the market for our Common Units,
and the cost of any IRS contest will reduce our cash available for distribution to our Unitholders.
We have not requested a ruling from the IRS with respect to our treatment as a partnership for U.S. federal income tax purposes
or any other matter affecting us. The IRS may adopt positions that differ from the positions we take. It may be necessary to resort to
administrative or court proceedings to sustain some or all of the positions we take. A court may not agree with the positions we take.
Any contest with the IRS may materially and adversely impact the market for our Common Units and the price at which they trade. In
addition, our costs of any contest with the IRS will be borne indirectly by our Unitholders because the costs will reduce our cash
available for distribution.
(cid:36)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:17)
Because our Unitholders are treated as partners, a Unitholder is required to pay U.S. federal income taxes and state and local
income taxes on its allocable share of our income, without regard to whether we make cash distributions to the Unitholder. We cannot
guarantee that a Unitholder will receive cash distributions equal to its allocable share of our taxable income or even the tax liability to
it resulting from that income.
Ownership of Common Units may have adverse tax consequences for tax-exempt organizations and foreign investors.
Investment in Common Units by certain tax-exempt entities and foreign persons raises issues specific to them. For example,
virtually all of our taxable income allocated to organizations exempt from U.S. federal income tax, including individual retirement
accounts and other retirement plans, will be unrelated business taxable income and thus will be taxable to the Unitholder.
Distributions to foreign persons will be reduced by withholding taxes at the highest applicable effective tax rate, and foreign persons
will be required to file U.S. federal income tax returns and pay tax on their share of our taxable income. Tax-exempt organizations
and foreign persons should consult, and should depend on, their own tax advisors in analyzing the U.S. federal, state, local and foreign
income tax and other tax consequences of the acquisition, ownership or disposition of Common Units.
The ability of a Unitholder to deduct its share of our losses may be limited.
Various limitations may apply to the ability of a Unitholder to deduct its share of our losses. For example, in the case of
taxpayers subject to the passive activity loss rules (generally, individuals and closely held corporations), any losses generated by us
will only be available to offset our future income and cannot be used to offset income from other activities, including other passive
activities or investments. Such unused losses may be deducted when the Unitholder disposes of its entire investment in us in a fully
taxable transaction with an unrelated party, such as a sale by a Unitholder of all of its Common Units in the open market. A
(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:83)(cid:68)(cid:86)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:69)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:86)(cid:72)(cid:87)(cid:3)(cid:69)(cid:92)(cid:3)(cid:88)(cid:81)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:88)(cid:86)(cid:3)(cid:70)(cid:68)(cid:85)(cid:85)(cid:76)(cid:72)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:15)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:69)(cid:92) losses
from other passive activities, including losses from other publicly-traded partnerships.
The tax gain or loss on the disposition of Common Units could be different than expected.
A Unitholder who sells Common Units will recognize a gain or loss equal to the difference between the amount realized and its
adjusted tax basis in the Common Units. Prior distributions in excess of cumulative net taxable income allocated to a Common Unit
16
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:71)(cid:72)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:68)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:15)(cid:3)(cid:69)(cid:72)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:76)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72) Common Unit is sold at a
(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:15)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:3)(cid:76)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:85)(cid:76)(cid:74)(cid:76)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)mmon Unit.
(cid:36)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)is in that Common Unit, will likely be
characterized as ordinary income. Furthermore, should the IRS successfully contest some conventions used by us, a Unitholder could
recognize more gain on the sale of Common Units than would be the case under those conventions, without the benefit of decreased
(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3) (cid:3) (cid:44)(cid:81)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3) (cid:90)(cid:76)(cid:79)(cid:79)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:68)(cid:3) (cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:81)(cid:82)(cid:81)(cid:85)(cid:72)(cid:70)(cid:82)(cid:88)(cid:85)(cid:86)(cid:72)(cid:3) (cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86), if a
Unitholder sells its Common Units, such Unitholder may incur a tax liability in excess of the amount of cash it receives from the sale.
Reporting of partnership tax information is complicated and subject to audits.
We intend to furnish to each Unitholder, within 90 days after the close of each calendar year, specific tax information, including
a Schedule K-1 that sets forth its allocable share of income, gains, losses and deductions for our preceding taxable year. In preparing
these schedules, we use various accounting and reporting conventions and adopt various depreciation and amortization methods. We
cannot guarantee that these conventions will yield a result that conforms to statutory or regulatory requirements or to administrative
pronouncements of the IRS. Further, our income tax return may be audited, which could result in an (cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)
tax return and increased liabilities for taxes because of adjustments resulting from the audit.
We treat each purchaser of our Common Units as having the same tax benefits without regard to the actual Common Units
purchased. The IRS may challenge this treatment, which could adversely affect the value of the Common Units.
Because we cannot match transferors and transferees of Common Units and because of other reasons, uniformity of the
economic and tax characteristics of the Common Units to a purchaser of Common Units of the same class must be maintained. To
maintain uniformity and for other reasons, we have adopted certain depreciation and amortization conventions that may be
inconsistent with Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax
benefits available to a Unitholder. It also could affect the timing of these tax benefits or the amount of gain from the sale of Common
Units, and could have a negative impact on (cid:87)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)
return.
We prorate our items of income, gain, loss and deduction between transferors and transferees of our Common Units each month
based upon the ownership of our Common Units on the first day of each month, instead of on the basis of the date a particular
Common Unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain,
loss and deduction among our Unitholders.
We prorate our items of income, gain, loss and deduction between transferors and transferees of our Common Units each month
based upon the ownership of our Common Units on the first day of each month, instead of on the basis of the date a particular
Common Unit is transferred. The U.S. Treasury Department has issued proposed Treasury Regulations that provide a safe harbor
pursuant to which publicly traded partnerships may use a similar monthly simplifying convention to allocate tax items among
transferors and transferees of our Common Units. However, if the IRS were to challenge our proration method, we may be required to
change the allocation of items of income, gain, loss and deduction among our Unitholders.
Unitholders may have negative tax consequences if we default on our debt or sell assets.
If we default on any of our debt obligations, our lenders will have the right to sue us for non-payment. This could cause an
investment loss and negative tax consequences for Unitholders through the realization of taxable income by Unitholders without a
corresponding cash distribution. Likewise, if we were to dispose of assets and realize a taxable gain while there is substantial debt
outstanding and proceeds of the sale were applied to the debt, Unitholders could have increased taxable income without a
corresponding cash distribution.
The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the
termination of our partnership for federal income tax purposes.
We will be considered to have terminated as a partnership for U.S. federal income tax purposes if there is a sale or exchange of
50% or more of the total interests in our capital and profits within a twelve-month period. Our termination would, among other things,
result in the closing of our taxable year for all Unitholders and could result in a deferral of depreciation deductions allowable in
computing our taxable income. In the case of a Unitholder reporting on a taxable year other than the calendar year, the closing of our
taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for the
year of termination. Our termination currently would not affect our treatment as a partnership for U.S. federal income tax purposes,
but instead, after our termination we would be treated as a new partnership for U.S. federal income tax purposes. If treated as a new
17
partnership, we must make new tax elections and could be subject to penalties if we are unable to determine that a termination
occurred.
There are state, local and other tax considerations for our Unitholders.
In addition to U.S. federal income taxes, Unitholders will likely be subject to other taxes, such as state and local taxes,
unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do
business or own property, even if the Unitholder does not reside in any of those jurisdictions. A Unitholder will likely be required to
file state and local income tax returns and pay state and local income taxes in some or all of the various jurisdictions in which we do
business or own property and may be subject to penalties for failure to comply with those requirements. It is the responsibility of each
Unitholder to file all U.S. federal, state and local income tax returns that may be required of each Unitholder.
(cid:36)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:90)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:79)(cid:82)(cid:68)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:179)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:3)(cid:86)(cid:72)(cid:79)(cid:79)(cid:72)(cid:85)(cid:180)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)onsidered as
having disposed of those Common Units. If so, that Unitholder would no longer be treated for tax purposes as a partner with
respect to those Common Units during the period of the loan and may recognize gain or loss from the disposition.
Becau(cid:86)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3) (cid:76)(cid:86)(cid:3) (cid:81)(cid:82)(cid:3) (cid:87)(cid:68)(cid:91)(cid:3) (cid:70)(cid:82)(cid:81)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:79)(cid:82)(cid:68)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:15)(cid:3) (cid:68)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3) (cid:90)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:79)(cid:82)(cid:68)(cid:81)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:3) (cid:179)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:3)
(cid:86)(cid:72)(cid:79)(cid:79)(cid:72)(cid:85)(cid:180)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:86)(cid:75)(cid:82)(cid:85)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:76)(cid:86)(cid:83)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:82)(cid:68)(cid:81)(cid:72)(cid:71)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:72)(cid:15) a
Unitholder may no longer be treated for tax purposes as a partner with respect to those Common Units during the period of the loan to
the short seller and may recognize gain or loss from such disposition. Moreover, during the period of the loan to the short seller, any
of our income, gain, loss or deduction with respect to those Common Units may not be reportable by the Unitholder and any cash
distribution received by the Unitholder as to those Common Units could be fully taxable as ordinary income. Unitholders desiring to
ensure their status as partners and avoid the risk of gain recognition from a loan to a short seller should consult their own tax advisors
to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing
their Common Units.
18
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
As of September 24, 2016, we owned approximately 74% of our customer service center and satellite locations and leased the
balance of our retail locations from third parties. We own and operate a 22 million gallon refrigerated, aboveground propane storage
facility in Elk Grove, California. Additionally, we own our principal executive offices located in Whippany, New Jersey.
The transportation of propane requires specialized equipment. The trucks and railroad tank cars utilized for this purpose carry
specialized steel tanks that maintain the propane in a liquefied state. As of September 24, 2016, we had a fleet of 7 transport truck
tractors, of which we owned 1, and 23 railroad tank cars, of which we owned none. In addition, as of September 24, 2016 we had
1,150 bobtail and rack trucks, of which we owned 50%, 113 fuel oil tankwagons, of which we owned 79%, and 1,215 other delivery
and service vehicles, of which we owned 57%. We lease the vehicles we do not own. As of September 24, 2016, we also owned
approximately 845,000 customer propane storage tanks with typical capacities of 100 to 500 gallons, 58,000 customer propane storage
tanks with typical capacities of over 500 gallons and 270,000 portable propane cylinders with typical capacities of five to ten gallons.
ITEM 3.
LEGAL PROCEEDINGS
Litigation
Our operations are subject to operating hazards and risks normally incidental to handling, storing and delivering combustible
liquids such as propane. We have been, and will continue to be, a defendant in various legal proceedings and litigation as a result of
these operating hazards and risks, and as a result of other aspects of our business. Although any litigation is inherently uncertain,
based on past experience, the information currently available to us, and the amount of our accrued insurance liabilities, we do not
believe that currently pending or threatened litigation matters, or known claims or known contingent claims, will have a material
adverse effect on our results of operations, financial condition or cash flow.
ITEM 4. MINE SAFETY DISCLOSURES
None.
19
PART II
ITEM 5. (cid:48)(cid:36)(cid:53)(cid:46)(cid:40)(cid:55)(cid:3) (cid:41)(cid:50)(cid:53)(cid:3) (cid:55)(cid:43)(cid:40)(cid:3) (cid:53)(cid:40)(cid:42)(cid:44)(cid:54)(cid:55)(cid:53)(cid:36)(cid:49)(cid:55)(cid:182)(cid:54)(cid:3) (cid:38)(cid:50)(cid:48)(cid:48)(cid:50)(cid:49)(cid:3) (cid:56)(cid:49)(cid:44)(cid:55)(cid:54)(cid:15)(cid:3) (cid:53)(cid:40)(cid:47)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3) (cid:56)(cid:49)(cid:44)(cid:55)(cid:43)(cid:50)(cid:47)(cid:39)(cid:40)(cid:53)(cid:3) (cid:48)(cid:36)(cid:55)(cid:55)(cid:40)(cid:53)(cid:54)(cid:3) (cid:36)(cid:49)(cid:39)(cid:3)
ISSUER PURCHASES OF UNITS
(a) Our Common Units, representing limited partner interests in the Partnership, are listed and traded on the New York Stock
(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:11)(cid:179)(cid:49)(cid:60)(cid:54)(cid:40)(cid:180)(cid:12)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:92)(cid:80)(cid:69)(cid:82)(cid:79)(cid:3)(cid:54)(cid:51)(cid:43)(cid:17)(cid:3)(cid:3)(cid:36)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)November 21, 2016, there were 647 Unitholders of record (based on
the number of record holders and nominees for those Common Units held in street name). The following table presents,
for the periods indicated, the high and low sales prices per Common Unit, as reported on the NYSE, and the amount of
quarterly cash distributions declared and paid per Common Unit in respect of each quarter.
Fiscal 2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal 2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Common Unit Price Range
High
Low
Cash Distribution
Declared per
Common Unit
$
$
36.69 $
30.94
37.10
35.95
46.05 $
45.87
44.75
41.14
22.69 $
20.93
27.77
31.50
40.81 $
42.55
39.47
31.00
0.8875
0.8875
0.8875
0.8875
0.8750
0.8875
0.8875
0.8875
We make quarterly distributions to our partners in an aggregate amount equal to our Available Cash (as defined in our
Partnership Agreement) with respect to such quarter. Available Cash generally means all cash on hand at the end of the
fiscal quarter plus all additional cash on hand as a result of borrowings subsequent to the end of such quarter less cash
reserves established by the Board of Supervisors in its reasonable discretion for future cash requirements. The amount of
distributions that we may make to holders of our Common Units is limited by the senior notes, and the amount of
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:88)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)(cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)(cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:53)(cid:76)(cid:86)(cid:78)(cid:3)(cid:41)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:178)
We have substantial indebtedness. Our debt agreements may limit our ability to make distributions to Unitholders, as well
(cid:68)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:73)(cid:79)(cid:72)(cid:91)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:178)(cid:47)(cid:76)(cid:84)(cid:88)(cid:76)(cid:71)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:17)(cid:180)
We are a publicly traded limited partnership and, other than certain corporate subsidiaries that are taxed as corporations,
we are not subject to corporate level federal income tax. Instead, Unitholders are required to report their allocable share
of our earnings or loss, regardless of whether we make distributions.
(b) Not applicable.
(c) None.
20
ITEM 6.
SELECTED FINANCIAL DATA
The following table presents our selected consolidated historical financial data as derived from our audited consolidated
financial statements, certain of which are included elsewhere in this Annual Report. All amounts in the table below, except per unit
data, are in thousands.
Statement of Operations Data
Revenues
Costs and expenses
Gain on sale of business (b)
Acquisition-related costs (c)
Operating income
Interest expense, net
Pension settlement charge (d)
Loss on debt extinguishment (e)
Provision for income taxes
Net income
Net income per Common Unit - basic (f)
Net income per Common Unit - diluted (f)
Cash distributions declared per unit
Balance Sheet Data
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Total debt
Total liabilities
Partners' capital - Common Unitholders
Statement of Cash Flows Data
Cash provided by (used in)
Operating activities
Investing activities
Financing activities
Other Data
Depreciation and amortization
EBITDA (g)
Adjusted EBITDA (g)
Capital expenditures - maintenance and growth (h)
Retail gallons sold
Propane
Fuel oil and refined fuels
September 24,
2016
September 26,
2015
$ 1,046,111
965,474
9,769
(cid:178)
90,406
75,086
2,000
292
588
14,440
0.24
0.24
3.55
$
$ 1,416,979
1,239,221
(cid:178)
(cid:178)
177,758
77,634
2,000
15,072
700
84,352
1.39
1.38
3.54
$
Year Ended
September 27,
2014
$ 1,938,257
1,748,131
(cid:178)
(cid:178)
190,126
83,261
(cid:178)
11,589
767
94,509
1.56
1.56
3.50
$
September 28,
2013
September 29,
2012 (a)
$ 1,703,606
1,526,630
(cid:178)
(cid:178)
176,976
95,427
(cid:178)
2,144
607
78,798
1.35
1.34
3.50
$
$ 1,063,458
1,003,885
(cid:178)
17,916
41,657
38,633
(cid:178)
2,249
137
638
0.02
0.02
3.41
$
$
$
$
$
$
$
37,341
147,299
2,295,969
205,054
1,238,172
1,587,738
754,063
$
$
152,338
273,413
2,485,730
210,346
1,241,107
1,587,410
947,203
$
92,639
294,865
2,609,363
222,266
1,242,685
1,587,910
$ 1,067,358
$
107,232
293,322
2,727,987
233,894
1,245,237
1,598,861
$ 1,176,479
$
134,317
337,515
2,883,850
253,715
1,422,078
1,793,351
$ 1,151,606
$
157,108
(53,905)
(218,200) $
$
324,209
(35,972)
(228,538) $
$
225,551
(16,532)
(223,612) $
$
214,306
(14,663)
(226,728) $
110,973
(239,758)
113,549
$
$
129,616
219,730
223,043
38,375
414,776
30,878
$
$
133,294
295,980
334,039
41,213
480,372
41,878
136,399
314,936
338,502
30,052
530,743
49,071
$
$
130,384
305,216
329,253
27,823
534,621
53,710
$
$
47,034
86,442
108,536
17,476
283,841
28,491
(a) Fiscal 2012 includes 53 weeks of operations compared to 52 weeks in each of fiscal 2016, 2015, 2014 and 2013. In addition, on
August 1, 2012, we acquired Inergy Propane. The results of operations of Inergy Propane have been included in the
consolidated results from the Acquisition Date through September 29, 2012 and all of fiscal 2013, fiscal 2014, fiscal 2015 and
fiscal 2016, and the assets and liabilities of Inergy Propane have been included in the consolidated balance sheet since
September 29, 2012.
(b) On April 22, 2016, we sold certain assets and operations in a non-strategic market of the propane segment for $26.0 million,
including $5.0 million of non-compete consideration that will be received over a five-year period, resulting in a gain of $9.8
million.
(c) Due to the Inergy Propane Acquisition on August 1, 2012 we recorded acquisition-related costs of $17.9 million during fiscal
2012. These costs were primarily attributable to investment banker, legal, accounting and other consulting fees.
21
(d) We incurred non-cash pension settlement charges of $2.0 million during fiscal 2016 and 2015 to accelerate the recognition of
actuarial losses in our defined benefit pension plan as a result of the level of lump sum retirement benefit payments made.
(e) We recognized a loss on debt extinguishment during the following periods:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:50)(cid:81)(cid:3) (cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3) (cid:22)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3) (cid:90)(cid:72)(cid:3) (cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:82)(cid:3) (cid:68)(cid:3) (cid:54)(cid:72)(cid:70)(cid:82)(cid:81)(cid:71)(cid:3) (cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:53)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:11)(cid:179)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)
(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) (cid:73)(cid:76)(cid:89)(cid:72)-(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:7)(cid:24)(cid:19)(cid:19)(cid:17)(cid:19)(cid:3) (cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3) (cid:85)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:53)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:41)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:180)(cid:12)(cid:15)(cid:3) (cid:82)(cid:73)(cid:3)
which $100.0 million was outstanding as of September 24, 2016. As of the end of fiscal 2015, 2014, 2013 and 2012,
$100.0 million was outstanding under the revolving credit facility of the previous credit agreement, which was rolled into
the Revolving Credit Facility of the Amended Credit Agreement. The Amended Credit Agreement amends and restates
the previous credit agreement to, among other things, extend the maturity date from January 5, 2017 to March 3, 2021,
reduce the borrowing rate, amend certain affirmative and negative covenants and increase the revolving credit facility
from $400.0 million to $500.0 million. In connection with the Amended Credit Agreement, we recognized a non-cash
charge of $0.3 million to write-off a portion of unamortized debt origination costs of the previous credit agreement.
On February 25, 2015, we repurchased and satisfied and discharged all of our 2020 Senior Notes with net proceeds from
the issuance of the 2025 Senior Notes and cash on hand pursuant to a tender offer and redemption. In connection with this
tender offer and redemption, we recognized a loss on the extinguishment of debt of $15.1 million consisting of $11.1
million for the redemption premium and related fees, as well as the write-off of $2.9 million and $1.1 million in
unamortized debt origination costs and unamortized discount, respectively.
On May 27, 2014, we repurchased and satisfied and discharged all of our 2018 Senior Notes with net proceeds from the
issuance of the 2024 Senior Notes and cash on hand pursuant to a tender offer and redemption. In connection with this
tender offer and redemption, we recognized a loss on the extinguishment of debt of $11.6 million consisting of $31.6
million for the redemption premium and related fees, as well as the write-off of $5.3 million and ($25.3) million in
unamortized debt origination costs and unamortized premium, respectively.
On August 2, 2013, we repurchased pursuant to optional redemption $133.4 million of our 2021 Senior Notes using net
proceeds (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:48)(cid:68)(cid:92)(cid:3) (cid:21)(cid:19)(cid:20)(cid:22)(cid:3) (cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3) (cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:81)(cid:72)(cid:87)(cid:3) (cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:90)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3) (cid:72)(cid:91)(cid:72)(cid:85)(cid:70)(cid:76)(cid:86)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)-allotment
option to purchase additional Common Units. In addition, on August 6, 2013, we repurchased $23.9 million of our 2021
Senior Notes in a private transaction using cash on hand. In connection with these repurchases, which totaled $157.3
million in aggregate principal amount, we recognized a loss on the extinguishment of debt of $2.1 million consisting of
$11.7 million for the repurchase premium and related fees, as well as the write-off of $2.1 million and ($11.7) million in
unamortized debt origination costs and unamortized premium, respectively.
During fiscal 2012, we amended the then outstanding credit agreement to increase the five-year $250.0 million revolving
credit facility to $400.0 million and also to extend the maturity date from June 25, 2013 to January 5, 2017. In connection
with the execution of the previous credit agreement, we recognized a non-cash charge of $0.5 million for the write-off of
previously incurred debt origination costs associated with lenders who did not participate, or whose lending capacity
decreased, in the amended facility. On August 1, 2012, we amended the then previous credit agreement to provide for a
$250.0 million senior secured 364-(cid:71)(cid:68)(cid:92)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:79)(cid:82)(cid:68)(cid:81)(cid:3) (cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:22)(cid:25)(cid:23)-(cid:39)(cid:68)(cid:92)(cid:3) (cid:41)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:180)(cid:12)(cid:17)(cid:3) (cid:3) (cid:50)(cid:81)(cid:3) (cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3) (cid:20)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:21)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3)
connection with the Inergy Propane Acquisition, we drew $225.0 million on the 364-Day Facility and on August 14,
2012, using the proceeds of our secondary offering of Common Units, we repaid the $225.0 million term loan facility, and
wrote off $1.7 million of unamortized commitment fees associated with the 364-Day Facility.
(f) Computations of basic earnings per Common Unit were performed by dividing net income by the weighted average number of
outstanding Common Units, and restricted units granted under our 2000 and 2009 Restricted Unit Plans (which we collectively
(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:180)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:53)(cid:56)(cid:51)(cid:180)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)-eligible grantees. The final awards under the 2000 Restricted
Unit Plan vested during the first quarter of fiscal 2015. Computations of diluted earnings per Common Unit were performed by
dividing net income by the weighted average number of outstanding Common Units and unvested restricted units granted under
our Restricted Unit Plans.
(cid:120)
(cid:50)(cid:81)(cid:3)(cid:48)(cid:68)(cid:92)(cid:3)(cid:20)(cid:26)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:22)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:82)(cid:79)(cid:71)(cid:3)(cid:21)(cid:17)(cid:26)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:17)(cid:3)(cid:3)(cid:50)(cid:81)(cid:3)(cid:48)(cid:68)(cid:92)(cid:3)(cid:21)(cid:21)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:22)(cid:15)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:90)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)
exercise of their over-allotment option, we sold an additional 0.4 million Common Units.
On August 1, 2012, in connection with the Inergy Propane Acquisition, we issued 14.2 million Common Units, and on
August 14, 2012, we sold 7.2 million Common Units in a secondary offering.
The aforementioned Common Units have been included in basic and diluted earnings per Common Unit from the
respective dates of issuance.
(cid:120)
(cid:120)
(g) EBITDA represents net income before deducting interest expense, income taxes, depreciation and amortization. Adjusted
EBITDA represents EBITDA excluding the unrealized net gain or loss from mark-to-market activity for derivative instruments
and other items, as applicable, as provided in the table below. Our management uses EBITDA and Adjusted EBITDA as
supplemental measures of operating performance and we are including them because we believe that they provide our investors
and industry analysts with additional information to evaluate our operating results. EBITDA and Adjusted EBITDA are not
recognized terms under US GAAP and should not be considered as an alternative to net income or net cash provided by
operating activities determined in accordance with US GAAP. Because EBITDA and Adjusted EBITDA as determined by us
excludes some, but not all, items that affect net income, they may not be comparable to EBITDA and Adjusted EBITDA or
similarly titled measures used by other companies.
22
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
Net income
Add:
Provision for income taxes
Interest expense, net
Depreciation and amortization
EBITDA
Unrealized (non-cash) (gains) losses on changes in
fair value of derivatives
Gain on sale of business
Multi-employer pension plan withdrawal charge
Product liability settlement
Pension settlement charge
Loss on debt extinguishment
Integration-related costs
Acquisition-related costs
Loss on legal settlement
Loss on asset disposal
Adjusted EBITDA
September 24,
2016
September 26,
2015
Year Ended
September 27,
2014
September 28,
2013
September 29,
2012 (a)
$
14,440
$
84,352
$
94,509
$
78,798
$
638
588
75,086
129,616
219,730
1,190
(9,769)
6,600
3,000
2,000
292
(cid:178)
(cid:178)
(cid:178)
(cid:178)
223,043
$
700
77,634
133,294
295,980
(1,855)
(cid:178)
11,300
(cid:178)
2,000
15,072
11,542
(cid:178)
(cid:178)
(cid:178)
334,039
$
767
83,261
136,399
314,936
(306)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
11,589
12,283
(cid:178)
(cid:178)
(cid:178)
338,502
$
607
95,427
130,384
305,216
4,318
(cid:178)
7,000
(cid:178)
(cid:178)
2,144
10,575
(cid:178)
(cid:178)
(cid:178)
329,253
$
137
38,633
47,034
86,442
(4,649)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
2,249
(cid:178)
17,916
4,500
2,078
108,536
$
(h) Our capital expenditures fall generally into two categories: (i) maintenance expenditures, which include expenditures for repair
and replacement of property, plant and equipment; and (ii) growth capital expenditures which include new propane tanks and
other equipment to facilitate expansion of our customer base and operating capacity.
23
ITEM 7. (cid:48)(cid:36)(cid:49)(cid:36)(cid:42)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:182)(cid:54)(cid:3)(cid:39)(cid:44)SCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following is a discussion of our financial condition and results of operations, which should be read in conjunction with our
consolidated financial statements and notes thereto included elsewhere in this Annual Report.
Executive Overview
The following are factors that regularly affect our operating results and financial condition. In addition, our business is subject
to the risks and uncertainties described in Item 1A of this Annual Report.
Product Costs and Supply
The level of profitability in the retail propane, fuel oil, natural gas and electricity businesses is largely dependent on the
difference between retail sales price and our costs to acquire and transport products. The unit cost of our products, particularly
propane, fuel oil and natural gas, is subject to volatility as a result of supply and demand dynamics or other market conditions,
including, but not limited to, economic and political factors impacting crude oil and natural gas supply or pricing. We enter into
product supply contracts that are generally one-year agreements subject to annual renewal, and also purchase product on the open
market. We attempt to reduce price risk by pricing product on a short-term basis. Our propane supply contracts typically provide for
pricing based upon index formulas using the posted prices established at major supply points such as Mont Belvieu, Texas, or
Conway, Kansas (plus transportation costs) at the time of delivery.
To supplement our annual purchase requirements, we may utilize forward fixed price purchase contracts to acquire a portion of
the propane that we resell to our customers, which allows us to manage our exposure to unfavorable changes in commodity prices and
to assure adequate physical supply. The percentage of contract purchases, and the amount of supply contracted for under forward
contracts at fixed prices, will vary from year to year based on market conditions.
Changes in our costs to acquire and transport products can occur rapidly over a short period of time and can impact profitability.
There is no assurance that we will be able to pass on product acquisition and transportation cost increases fully or immediately,
particularly when such costs increase rapidly. Therefore, average retail sales prices can vary significantly from year to year as our
costs fluctuate with the propane, fuel oil, crude oil and natural gas commodity markets and infrastructure conditions. In addition,
periods of sustained higher commodity and/or transportation prices can lead to customer conservation, resulting in reduced demand for
our product.
Seasonality
The retail propane and fuel oil distribution businesses, as well as the natural gas marketing business, are seasonal because these
fuels are primarily used for heating in residential and commercial buildings. Historically, approximately two-thirds of our retail
propane volume is sold during the six-month peak heating season from October through March. The fuel oil business tends to
experience greater seasonality given its more limited use for space heating and approximately three-fourths of our fuel oil volumes are
sold between October and March. Consequently, sales and operating profits are concentrated in our first and second fiscal quarters.
Cash flows from operations, therefore, are greatest during the second and third fiscal quarters when customers pay for product
purchased during the winter heating season. We expect lower operating profits and either net losses or lower net income during the
period from April through September (our third and fourth fiscal quarters). To the extent necessary, we will reserve cash from the
second and third quarters for distribution to holders of our Common Units in the fourth quarter and the following fiscal year first
quarter.
Weather
Weather conditions have a significant impact on the demand for our products, in particular propane, fuel oil and natural gas, for
both heating and agricultural purposes. Many of our customers rely heavily on propane, fuel oil or natural gas as a heating source.
Accordingly, the volume sold is directly affected by the severity of the winter weather in our service areas, which can vary
substantially from year to year. In any given area, sustained warmer than normal temperatures will tend to result in reduced propane,
fuel oil and natural gas consumption, while sustained colder than normal temperatures will tend to result in greater consumption.
24
Hedging and Risk Management Activities
We engage in hedging and risk management activities to reduce the effect of price volatility on our product costs and to ensure
the availability of product during periods of short supply. We enter into propane forward, options and swap agreements with third
parties, and use futures and optio(cid:81)(cid:86)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3) (cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:49)(cid:72)(cid:90)(cid:3) (cid:60)(cid:82)(cid:85)(cid:78)(cid:3) (cid:48)(cid:72)(cid:85)(cid:70)(cid:68)(cid:81)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3) (cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:11)(cid:179)(cid:49)(cid:60)(cid:48)(cid:40)(cid:59)(cid:180)(cid:12)(cid:3) (cid:87)(cid:82)(cid:3) (cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:72)(cid:79)(cid:79)(cid:3)
propane, fuel oil and crude oil at fixed prices in the future. The majority of the futures, forward and options agreements are used to
hedge price risk associated with propane and fuel oil physical inventory, as well as, in certain instances, forecasted purchases of
propane or fuel oil. In addition, we sell propane and fuel oil to customers at fixed prices, and enter into derivative instruments to
hedge a portion of our exposure to fluctuations in commodity prices as a result of selling the fixed price contracts. Forward contracts
are generally settled physically at the expiration of the contract whereas futures, options and swap contracts are generally settled at the
expiration of the contract through a net settlement mechanism. Although we use derivative instruments to reduce the effect of price
volatility associated with priced physical inventory and forecasted transactions, we do not use derivative instruments for speculative
trading purposes. Risk management activities are monitored by an internal Commodity Risk Management Committee, made up of six
members of management and reporting to our Audit Committee, through enforcement of our Hedging and Risk Management Policy.
Critical Accounting Policies and Estimates
Our significant accounting policies are summarized in Note 2(cid:178)Summary of Significant Accounting Policies included within the
Notes to Consolidated Financial Statements section elsewhere in this Annual Report.
Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated,
requiring management to make certain assumptions with respect to values or conditions that cannot be known with certainty at the
time the financial statements are prepared. The preparation of financial statements in conformity with accounting principles generally
(cid:68)(cid:70)(cid:70)(cid:72)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:3) (cid:11)(cid:179)(cid:56)(cid:54)(cid:3) (cid:42)(cid:36)(cid:36)(cid:51)(cid:180)(cid:12)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:86)(cid:3) (cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:80)(cid:68)(cid:78)(cid:72)(cid:3) (cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. We are also subject to risks and uncertainties that may
cause actual results to differ from estimated results. Estimates are used when accounting for depreciation and amortization of long-
lived assets, employee benefit plans, self-insurance and litigation reserves, environmental reserves, allowances for doubtful accounts,
asset valuation assessments and valuation of derivative instruments. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any effects on our
business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the
facts that give rise to the revision become known to us. Management has reviewed these critical accounting estimates and related
disclosures with the Audit Committee of our Board of Supervisors. We believe that the following are our critical accounting
estimates:
Allowances for Doubtful Accounts. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of
our customers to make required payments. We estimate our allowances for doubtful accounts using a specific reserve for known or
anticipated uncollectible accounts, as well as an estimated reserve for potential future uncollectible accounts taking into consideration
our historical write-offs. If the financial condition of one or more of our customers were to deteriorate resulting in an impairment in
their ability to make payments, additional allowances could be required. As a result of our large customer base, which is comprised of
approximately 1.1 million customers, no individual customer account is material. Therefore, while some variation to actual results
occurs, historically such variability has not been material. Schedule II, Valuation and Qualifying Accounts, provides a summary of
the changes in our allowances for doubtful accounts during the period.
Pension and Other Postretirement Benefits. We estimate the rate of return on plan assets, the discount rate used to estimate the
present value of future benefit obligations and the expected cost of future health care benefits in determining our annual pension and
other postretirement benefit costs.
(cid:44)(cid:81)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:82)(cid:70)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:11)(cid:179)(cid:54)(cid:50)(cid:36)(cid:180)(cid:12)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:80)(cid:82)(cid:85)(cid:87)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)(cid:11)(cid:53)(cid:51)-2014) and a
new mortality improvement scale (MP-2014). We use SOA and other actuarial life expectancy information when developing the
annual mortality assumptions for our pension and postretirement benefit plans, which are used to measure net periodic benefit costs
and the obligation under these plans. While we believe that our assumptions are appropriate, significant differences in our actual
experience or significant changes in market conditions may materially affect our pension and other postretirement benefit obligations
and our future expense. With other assumptions held constant, an increase or decrease of 100 basis points in the discount rate would
(cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:68)(cid:81)(cid:3) (cid:76)(cid:80)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3) (cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:81)(cid:72)(cid:87)(cid:3) (cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:82)(cid:86)(cid:87)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:17)(cid:3) (cid:54)(cid:72)(cid:72)(cid:3) (cid:179)(cid:47)(cid:76)(cid:84)(cid:88)(cid:76)(cid:71)(cid:76)(cid:87)(cid:92) and Capital Resources(cid:178)Pension Plan
(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81) benefits.
25
Self-Insurance Reserves. Our accrued self-insurance reserves represent the estimated costs of known and anticipated or unasserted
(cid:70)(cid:79)(cid:68)(cid:76)(cid:80)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:15)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:82)(cid:69)(cid:76)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)(cid:36)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) provisions for
unasserted claims arising from unreported incidents are based on an analysis of historical claims data. For each unasserted claim, we
record a self-insurance provision up to the estimated amount of the probable claim utilizing actuarially determined loss development
factors applied to actual claims data. Our self-insurance provisions are susceptible to change to the extent that actual claims
development differs from historical claims development. We maintain insurance coverage wherein our net exposure for insured
claims is limited to the insurance deductible, claims above which are paid by our insurance carriers. For the portion of our estimated
self-insurance liability that exceeds our deductibles, we record an asset related to the amount of the liability expected to be paid by the
insurance companies. Historically, we have not experienced significant variability in our actuarial estimates for claims incurred but
not reported. Accrued insurance provisions for reported claims are reviewed at least quarterly, and our assessment of whether a loss is
probable and/or reasonably estimable is updated as necessary. Due to the inherently uncertain nature of, in particular, product liability
claims, the ultimate loss may differ materially from our estimates. However, because of the nature of our insurance arrangements,
those material variations historically have not, nor are they expected in the future to have, a material impact on our results of
operations or financial position.
Loss Contingencies. In the normal course of business, we are involved in various claims and legal proceedings. We record a liability
for such matters when it is probable that a loss has been incurred and the amounts can be reasonably estimated. The liability includes
probable and estimable legal costs to the point in the legal matter where we believe a conclusion to the matter will be reached. When
only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a
better estimate than any other amount within the range, the minimum amount in the range is accrued.
We contribute to multi-(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3) (cid:11)(cid:179)(cid:48)(cid:40)(cid:51)(cid:51)(cid:86)(cid:180)(cid:12)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:89)(cid:68)(cid:85)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:69)(cid:68)(cid:85)(cid:74)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)
covering union employees. As one of the many participating employers in these MEPPs, we are responsible with the other
participating employers for any plan underfunding. Due to the uncertainty regarding future factors that could impact the withdrawal
liability, we are unable to determine the timing of the payment of the future withdrawal liability, or additional future withdrawal
liability, if any.
Fair Values of Acquired Assets and Liabilities. From time to time, we enter into material business combinations. In accordance with
accounting guidance associated with business combinations, the assets acquired and liabilities assumed are recorded at their estimated
fair value as of the acquisition date. Fair values of assets acquired and liabilities assumed are based upon available information and
may involve us engaging an independent third party to perform an appraisal. Estimating fair values can be complex and subject to
significant business judgment. Estimates most commonly impact property, plant and equipment and intangible assets, including
goodwill. Generally, we have, if necessary, up to one year from the acquisition date to finalize our estimates of acquisition date fair
values.
Results of Operations and Financial Condition
Net income for fiscal 2016 was $14.4 million, or $0.24 per Common Unit, compared to $84.4 million, or $1.39 per Common
Unit, in fiscal 2015.
Net income and EBITDA (as defined and reconciled below) for fiscal 2016 included: (i) a $9.8 million gain from the sale of
certain assets and operations in a non-strategic market of the propane segment; (ii) a $6.6 million charge related to the voluntary full
withdrawal from a MEPP covering certain employees acquired in the Inergy Propane Acquisition; (iii) a $3.0 million charge related to
the settlement of a product liability matter; (iv) a pension settlement charge of $2.0 million; and (v) a loss on debt extinguishment of
$0.3 million.
Net income and EBITDA for fiscal 2015 included: (i) a loss on debt extinguishment of $15.1 million; (ii) $11.5 million in
expenses related to the integration of Inergy Propane; (iii) an $11.3 million charge related to the voluntary partial withdrawal from a
MEPP covering certain employees acquired in the Inergy Propane Acquisition; and (iv) a pension settlement charge of $2.0 million.
Excluding the effects of the foregoing items and unrealized (non-cash) mark-to-market adjustments on derivative instruments in
both years, Adjusted EBITDA (as defined and reconciled below) amounted to $223.0 million in fiscal 2016, compared to Adjusted
EBITDA of $334.0 million in fiscal 2015.
Retail propane gallons sold in fiscal 2016 decreased 65.6 million gallons, or 13.7%, to 414.8 million gallons. Sales of fuel oil
and other refined fuels decreased 11.0 million gallons, or 26.3%, to 30.9 million gallons. According to the National Oceanic and
Atmospheric Administration, the winter of 2015-2016 was the warmest on record in the contiguous United States. Average
temperatures (as measured by heating degree days) across all of our service territories for fiscal 2016 were 17% warmer than normal
and 15% warmer than the prior year. While average temperatures were considerably warmer than the prior year in nearly all service
26
territories, California experienced cooler weather compared to the prior year, which contributed to a 13% increase in propane volumes
sold in that market.
Revenues for fiscal 2016 of $1,046.1 million decreased $370.9 million, or 26.2%, compared to the prior year, primarily due to
the lower volumes sold, combined with lower retail selling prices associated with lower wholesale costs.
Cost of products sold for fiscal 2016 of $362.0 million decreased $231.4 million, or 39.0%, compared to the prior year,
primarily due to lower wholesale propane costs and, to a lesser extent, lower volumes sold. Average posted propane prices (basis
Mont Belvieu, Texas) and fuel oil prices were 18.4% and 31.0% lower than the prior year, respectively. Cost of products sold for
fiscal 2016 included a $1.2 million unrealized (non-cash) loss attributable to the mark-to-market adjustment for derivative instruments
used in risk management activities, compared to a $1.9 million unrealized (non-cash) gain for fiscal 2015. These unrealized gains and
losses are excluded from Adjusted EBITDA for both periods in the table below.
Combined operating and general and administrative expenses of $473.9 million for fiscal 2016 were $38.6 million, or 7.5%,
lower than fiscal 2015. Excluding the impact of the items discussed above in the computation of Adjusted EBITDA from both
periods, combined operating and general and administrative expenses decreased 5.2% compared to the prior year, primarily due to
savings in payroll and benefit-related expenses from a lower headcount, lower vehicle expenses stemming from a reduced vehicle
count, as well as lower volume-related variable costs and continued operating efficiencies.
Depreciation and amortization expense of $129.6 million for fiscal 2016 decreased $3.7 million, or 2.8%, primarily due to the
acceleration of depreciation expense recorded in the prior year for assets taken out of service. Net interest expense of $75.1 million
for fiscal 2016 decreased $2.5 million, or 3.2%, primarily due to savings from the refinancing of certain of our senior notes completed
in the second quarter of fiscal 2015 and the refinancing of our revolving credit facility during the second quarter of fiscal 2016.
During fiscal 2016, we succeeded in accomplishing many significant goals. The following highlight a few key
accomplishments for fiscal 2016:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
We acquired the assets and operations of Propane USA Distribution, LLC, which expanded our presence in the South
Florida market;
We extended our reach in certain strategic markets that were not previously served by our existing footprint;
We successfully refinanced our revolving credit facility which improved our cost of capital, further extended our debt
maturities until 2021 and increased our available borrowing capacity;
We made further refinements to our operating model to streamline our operational activities, reduce our cost structure and
enhance our position in several markets; and
We funded all working capital needs from cash on hand without the need to borrow under our revolving credit facility and
ended the year with more than $37.0 million of cash.
As we look ahead to fiscal 2017, our anticipated cash requirements include: (i) maintenance and growth capital expenditures of
approximately $38.0 million; (ii) approximately $74.8 million of interest and income tax payments; and (iii) approximately $216.6
million of distributions to Unitholders, assuming distributions remain at the current annualized rate of $3.55 per Common Unit. Based
on our current cash position of $37.3 million as of September 24, 2016, availability of funds under the Revolving Credit Facility and
expected cash flow from operating activities, we expect to have sufficient funds to meet our current and future obligations.
27
Fiscal Year 2016 Compared to Fiscal Year 2015
Revenues
(Dollars and gallons in thousands)
Revenues
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Total revenues
Retail gallons sold
Propane
Fuel oil and refined fuels
Fiscal
2016
Fiscal
2015
Decrease
Percent
Decrease
$
884,169 $ 1,176,980 $ (292,811)
(58,736)
127,495
(16,102)
66,865
(3,219)
45,639
$ 1,046,111 $ 1,416,979 $ (370,868)
68,759
50,763
42,420
414,776
30,878
480,372
41,878
(65,596)
(11,000)
(24.9)%
(46.1)%
(24.1)%
(7.1)%
(26.2)%
(13.7)%
(26.3)%
Total revenues decreased $370.9 million, or 26.2%, to $1,046.1 million for fiscal 2016 compared to $1,417.0 million for the
prior year due to lower volumes sold driven by record warm temperatures experienced during the fiscal 2016 heating season,
combined with lower average selling prices associated with lower wholesale costs. As discussed above, average temperatures (as
measured in heating degree days) across all of our service territories for fiscal 2016 were 17% warmer than normal and 15% warmer
than the prior year. During the heating season (October through March), average temperatures were 18% warmer than normal and
19% warmer than the comparable prior year period. The unseasonably warm weather was persistent as temperatures were warmer
than both normal and the prior year throughout the heating season in nearly all of our service territories. While average temperatures
were considerably warmer than the prior year in nearly all service territories, California experienced cooler weather compared to the
prior year (although temperatures were still 24% warmer than normal), which helped contribute to a 13% year-over-year increase in
sales volumes in that market.
Revenues from the distribution of propane and related activities of $884.2 million for fiscal 2016 decreased $292.8 million, or
24.9%, compared to $1,177.0 million for the prior year, primarily due to lower retail volumes sold resulting from the impact of record
warm temperatures on customer demand for heating needs, coupled with lower average retail selling prices associated with lower
wholesale costs. Retail propane gallons sold in fiscal 2016 decreased 65.6 million gallons, or 13.7%, resulting in a decrease in
revenues of $150.4 million. Average propane selling prices for fiscal 2016 decreased 13.5% compared to the prior year, resulting in a
$128.1 million decrease in revenues year-over-year. Included within the propane segment are revenues from other propane activities
of $61.1 million for fiscal 2016, which decreased $14.3 million compared to the prior year.
Revenues from the distribution of fuel oil and refined fuels of $68.8 million for fiscal 2016 decreased $58.7 million, or 46.1%,
from $127.5 million for the prior year, primarily due to lower volumes sold resulting from the record warm temperatures discussed
above, particularly in the northeast region of the country in which the majority of our fuel oil customers reside, and lower average
selling prices associated with lower wholesale costs. Fuel oil and refined fuels gallons sold in fiscal 2016 decreased 11.0 million
gallons, or 26.3%, resulting in a decrease in revenues of $33.4 million. Average selling prices in our fuel oil and refined fuels segment
decreased 26.9%, resulting in a $25.3 million decrease in revenues.
Revenues in our natural gas and electricity segment decreased $16.1 million, or 24.1%, to $50.8 million in fiscal 2016 compared
to $66.9 million in the prior year as a result of lower average selling prices for natural gas and electricity associated with lower
average wholesale costs, and lower natural gas usage resulting from the warm weather discussed above.
28
Cost of Products Sold
(Dollars in thousands)
Cost of products sold
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Total cost of products sold
Fiscal
2016
Fiscal
2015
Decrease
Percent
Decrease
$
$
275,091
42,890
30,676
13,296
361,953
$
$
443,538
92,628
42,313
14,901
593,380
$ (168,447)
(49,738)
(11,637)
(1,605)
$ (231,427)
(38.0)%
(53.7)%
(27.5)%
(10.8)%
(39.0)%
As a percent of total revenues
The cost of products sold reported in the consolidated statements of operations represents the weighted average unit cost of
propane, fuel oil and refined fuels, natural gas and electricity sold, including transportation costs to deliver product from our supply
points to storage or to our customer service centers. Cost of products sold also includes the cost of appliances and related parts sold or
installed by our customer service centers computed on a basis that approximates the average cost of the products.
41.9%
34.6%
Given the retail nature of our operations, we maintain a certain level of priced physical inventory to help ensure that our field
operations have adequate supply commensurate with the time of year. Our strategy has been, and will continue to be, to keep our
physical inventory priced relatively close to market for our field operations. Consistent with past practices, we principally utilize
futures and/or options contracts traded on the NYMEX to mitigate the price risk associated with our priced physical inventory. Under
this risk management strategy, realized gains or losses on futures or options contracts, which are reported in cost of products sold, will
typically offset losses or gains on the physical inventory once the product is sold (which may or may not occur in the same accounting
period). We do not use futures or options contracts, or other derivative instruments, for speculative trading purposes. Unrealized
(non-cash) gains or losses from changes in the fair value of derivative instruments that are not designated as cash flow hedges are
recorded within cost of products sold. Cost of products sold excludes depreciation and amortization; these amounts are reported
separately within the consolidated statements of operations.
In the commodities markets, the downward trend in propane prices (basis Mont Belvieu, Texas) experienced in fiscal 2015
continued in fiscal 2016 and extended into February 2016. Thereafter, propane prices rallied and generally traded between $0.40 and
$0.50 per gallon. Overall, average posted prices for propane and fuel oil for fiscal 2016 were 18.4% and 31.0% lower than the prior
year, respectively. The net change in the fair value of derivative instruments during the period resulted in unrealized (non-cash)
(losses) gains of ($1.2) million and $1.9 million reported in cost of products sold in fiscal 2016 and 2015, respectively, resulting in an
increase of $3.1 million in cost of products sold in fiscal 2016 compared to the prior year, $2.2 million of which was reported in the
propane segment and $0.9 million was reported in the fuel oil and refined fuels segment.
Cost of products sold associated with the distribution of propane and related activities of $275.1 million for fiscal 2016
decreased $168.4 million, or 38.0%, compared to the prior year, primarily due to lower wholesale costs and, to a lesser extent, lower
volumes sold. Lower average propane costs and lower propane volumes sold during fiscal 2016 resulted in a decrease of $106.8
million and $59.5 million, respectively. Cost of products sold from other propane activities decreased $4.3 million.
Cost of products sold associated with our fuel oil and refined fuels segment of $42.9 million for fiscal 2016 decreased $49.7
million, or 53.7%, compared to the prior year. Lower fuel oil and refined fuels wholesale costs and lower volumes sold resulted in
decreases of $26.2 million and $24.4 million, respectively, in costs of products sold during fiscal 2016 compared to the prior year.
Cost of products sold in our natural gas and electricity segment of $30.7 million for fiscal 2016 decreased $11.6 million, or
27.5%, compared to the prior year, primarily due to lower natural gas and electricity wholesale costs coupled with lower usage.
Total cost of products sold as a percent of total revenues decreased 7.3 percentage points to 34.6% in fiscal 2016 from 41.9% in
the prior year, primarily due to the decline in wholesale costs outpacing the decline in average selling prices.
Operating Expenses
(Dollars in thousands)
Operating expenses
As a percent of total revenues
Fiscal
2016
412,756
$
Fiscal
2015
444,251
$
Decrease
$
(31,495)
Percent
Decrease
(7.1)%
39.5%
31.4%
29
All costs of operating our retail distribution and appliance sales and service operations are reported within operating expenses in
the consolidated statements of operations. These operating expenses include the compensation and benefits of field and direct
operating support personnel, costs of operating and maintaining our vehicle fleet, overhead and other costs of our purchasing, training
and safety departments and other direct and indirect costs of operating our customer service centers.
Operating expenses of $412.8 million for fiscal 2016 decreased $31.5 million, or 7.1%, compared to $444.3 million in the prior
year, primarily due to lower payroll and benefit-related expenses attributable to reduced headcount, lower variable compensation
associated with lower earnings, lower vehicle expenses due to reduced vehicle count and lower fuel costs to operate our fleet; offset to
an extent by an increase in insurance and product liability expenses. Operating expenses for fiscal 2016 included a $6.6 million
accrual for our voluntary full withdrawal from a MEPP, a charge of $3.0 million related to the settlement of a product liability matter,
and a pension settlement charge of $2.0 million. Operating expenses for fiscal 2015 included expenses of $9.7 million associated with
the integration of the Inergy Propane operations, an $11.3 million charge related to our voluntary partial withdrawal from a MEPP,
and a pension settlement charge of $2.0 million. These items were excluded from our calculation of Adjusted EBITDA below.
General and Administrative Expenses
(Dollars in thousands)
General and administrative expenses
As a percent of total revenues
Fiscal
2016
61,149
$
Fiscal
2015
68,296
$
Decrease
Percent
Decrease
$
(7,147)
(10.5)%
5.8%
4.8%
All costs of our back office support functions, including compensation and benefits for executives and other support functions,
as well as other costs and expenses to maintain finance and accounting, treasury, legal, human resources, corporate development and
the information systems functions are reported within general and administrative expenses in the consolidated statements of
operations.
General and administrative expenses of $61.1 million for fiscal 2016 decreased $7.1 million, or 10.5%, compared to $68.3
million in the prior year, primarily due to lower variable compensation associated with lower earnings, partially offset by increased
professional services fees for strategic initiatives. General and administrative expenses for fiscal 2015 included $1.9 million of
professional services and other expenses associated with the integration of the Inergy Propane operations. This item was excluded
from our calculation of Adjusted EBITDA below.
Depreciation and Amortization
(Dollars in thousands)
Depreciation and amortization
As a percent of total revenues
Fiscal
2016
129,616
$
Fiscal
2015
133,294
$
12.4%
9.4%
Decrease
$
(3,678)
Percent
Decrease
(2.8)%
Depreciation and amortization expense of $129.6 million in fiscal 2016 decreased $3.7 million from $133.3 million in the prior
year, primarily as a result of accelerated depreciation expense recorded in the prior year for assets taken out of service from integration
activities.
Interest Expense, net
(Dollars in thousands)
Interest expense, net
As a percent of total revenues
Fiscal
2016
75,086
$
Fiscal
2015
77,634
$
Decrease
$
(2,548)
Percent
Decrease
(3.3)%
7.2%
5.5%
Net interest expense of $75.1 million for fiscal 2016 decreased $2.5 million from $77.6 million in the prior year, primarily due
to the refinancing of $250.0 million of 7.375% Senior Notes due 2020 with $250.0 million of 5.75% Senior Notes due 2025 in the
second quarter of fiscal 2015, and savings from the refinancing of our revolving credit facility. See Liquidity and Capital Resources
below for additional discussion.
30
Gain on Sale of Business
On April 22, 2016, we sold certain assets and operations in a non-strategic market of the propane segment for $26.0 million,
including $5.0 million of non-compete consideration that will be received over a five-year period, resulting in a gain of $9.8 million
that was recognized during the third quarter of fiscal 2016. The corresponding net assets and results of operations were not material to
our results of operations, financial position and cash flows.
Loss on Debt Extinguishment
(cid:50)(cid:81)(cid:3) (cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3) (cid:22)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3) (cid:90)(cid:72)(cid:3) (cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:82)(cid:3) (cid:68)(cid:3) (cid:54)(cid:72)(cid:70)(cid:82)(cid:81)(cid:71)(cid:3) (cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:53)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:11)(cid:179)(cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
provides for a five-year $500.0 million revolving credit facility. In connection with the Amended Credit Agreement, we recognized a
non-cash charge of $0.3 million to write-off a portion of unamortized debt origination costs of the previous credit agreement.
On February 25, 2015, we repurchased and satisfied and discharged all of our previously outstanding 2020 Senior Notes with
net proceeds from the issuance of the 2025 Senior Notes and cash on hand, pursuant to a tender offer and redemption. In connection
with this tender offer and redemption, during the second quarter of fiscal 2015 we recognized a loss on the extinguishment of debt of
$15.1 million, consisting of $11.1 million for the redemption premium and related fees, as well as the write-off of $2.9 million and
$1.1 million in unamortized debt origination costs and unamortized discount, respectively.
Net Income and Adjusted EBITDA
Net income for fiscal 2016 amounted to $14.4 million, or $0.24 per Common Unit, compared to $84.4 million, or $1.39 per
Common Unit, in fiscal 2015. Earnings before interest, taxes, depreciation and amortizati(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)(cid:12)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)2016 amounted to
$219.7 million, compared to $296.0 million for fiscal 2015.
Net income and EBITDA for fiscal 2016 included: (i) a gain on sale of business of $9.8 million; (ii) a $6.6 million charge
related to our voluntary full withdrawal from a MEPP; (iii) a $3.0 million charge related to the settlement of a product liability matter;
(iv) a pension settlement charge of $2.0 million; and (v) a loss on debt extinguishment of $0.3 million. Net income and EBITDA for
fiscal 2015 included: (i) a loss on debt extinguishment of $15.1 million; (ii) $11.5 million in expenses related to the integration of
Inergy Propane; (iii) an $11.3 million charge related to our voluntary partial withdrawal from a MEPP; and (iv) a pension settlement
charge of $2.0 million. Excluding the effects of these items, as well as the unrealized (non-cash) mark-to-market adjustments on
derivative instruments in both years, Adjusted EBITDA amounted to $223.0 million for fiscal 2016, compared to Adjusted EBITDA
of $334.0 million in fiscal 2015.
EBITDA represents net income before deducting interest expense, income taxes, depreciation and amortization. Adjusted
EBITDA represents EBITDA excluding the unrealized net gain or loss on mark-to-market activity for derivative instruments and other
items, as applicable, as provided in the table below. Our management uses EBITDA and Adjusted EBITDA as supplemental
measures of operating performance and we are including them because we believe that they provide our investors and industry
analysts with additional information to evaluate our operating results. EBITDA and Adjusted EBITDA are not recognized terms
under US GAAP and should not be considered as an alternative to net income or net cash provided by operating activities determined
in accordance with US GAAP. Because EBITDA and Adjusted EBITDA as determined by us excludes some, but not all, items that
affect net income, they may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other
companies.
31
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
(Dollars in thousands)
Net income
Add:
Provision for income taxes
Interest expense, net
Depreciation and amortization
EBITDA
Unrealized (non-cash) losses (gains) on changes in fair value
of derivatives
Gain on sale of business
Multi-employer pension plan withdrawal charge
Product liability settlement
Pension settlement charge
Loss on debt extinguishment
Integration-related costs
Adjusted EBITDA
Year Ended
September 24,
2016
September 26,
2015
$
14,440 $
84,352
588
75,086
129,616
219,730
1,190
(9,769)
6,600
3,000
2,000
292
(cid:178)
223,043 $
700
77,634
133,294
295,980
(1,855)
(cid:178)
11,300
(cid:178)
2,000
15,072
11,542
334,039
$
Fiscal Year 2015 Compared to Fiscal Year 2014
Revenues
(Dollars and gallons in thousands)
Revenues
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Total revenues
Retail gallons sold
Propane
Fuel oil and refined fuels
Fiscal
2015
Fiscal
2014
Decrease
Percent
Decrease
$ 1,176,980 $ 1,606,840 $ (429,860)
(67,189)
(20,228)
(4,001)
$ 1,416,979 $ 1,938,257 $ (521,278)
127,495
66,865
45,639
194,684
87,093
49,640
480,372
41,878
530,743
49,071
(50,371)
(7,193)
(26.8)%
(34.5)%
(23.2)%
(8.1)%
(26.9)%
(9.5)%
(14.7)%
Total revenues decreased $521.3 million, or 26.9%, to $1,417.0 million for fiscal 2015 compared to $1,938.3 million for the
prior year due to lower average propane, fuel oil and refined fuels and natural gas selling prices and, to a lesser extent, lower volumes
sold. Average temperatures (as measured in heating degree days) across all of our service territories for fiscal 2015 were 2% warmer
than normal and 5% warmer than the prior year. The weather pattern during the fiscal 2015 heating season was characterized by
warmer than normal temperatures for the first quarter of fiscal 2015, particularly during the month of December 2014 (December 2014
was 15% warmer than normal and 21% warmer than December 2013), followed by inconsistent temperatures in our eastern and
midwestern territories during the latter half of the heating season. We also experienced sustained warmer than normal temperatures in
our western territories throughout fiscal 2015 as average temperatures were 23% warmer than normal and 9% warmer than the
comparable prior year period.
Revenues from the distribution of propane and related activities of $1,177.0 million for fiscal 2015 decreased $429.9 million, or
26.8%, compared to $1,606.8 million for the prior year, primarily due to lower average retail selling prices associated with lower
wholesale propane costs and, to a lesser extent, lower volumes sold. Average propane selling prices for fiscal 2015 decreased 20.3%
compared to the prior year, resulting in a $281.0 million decrease in revenues year-over-year. Retail propane gallons sold in fiscal
2015 decreased 50.4 million gallons, or 9.5%, resulting in a decrease in revenues of $145.0 million. Volumes sold during fiscal 2015
were adversely affected by the unseasonably warm weather during key parts of the winter heating season discussed above. Included
within the propane segment are revenues from other propane activities of $75.3 million for fiscal 2015, which decreased $3.9 million
compared to the prior year.
32
Revenues from the distribution of fuel oil and refined fuels of $127.5 million for fiscal 2015 decreased $67.2 million, or 34.5%,
from $194.7 million for the prior year, primarily due to lower average selling prices and, to a lesser extent, lower volumes sold.
Average selling prices in our fuel oil and refined fuels segment decreased 23.2%, resulting in a $38.5 million decrease in revenues.
Fuel oil and refined fuels gallons sold in fiscal 2015 decreased 7.2 million gallons, or 14.7%, resulting in a decrease in revenues of
$28.7 million. The decrease in volumes sold was primarily due to the impact of the unfavorable weather trends discussed above.
Revenues in our natural gas and electricity segment decreased $20.2 million, or 23.2%, to $66.9 million in fiscal 2015 compared
to $87.1 million in the prior year as a result of lower average selling prices for natural gas and electricity as a result of lower average
wholesale costs and, to a lesser extent, lower natural gas and electricity usage.
Cost of Products Sold
(Dollars in thousands)
Cost of products sold
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Total cost of products sold
As a percent of total revenues
Fiscal
2015
Fiscal
2014
Decrease
Percent
Decrease
$
$
443,538
92,628
42,313
14,901
593,380
$
844,855
155,773
64,448
15,674
$ 1,080,750
$ (401,317)
(63,145)
(22,135)
(773)
$ (487,370)
41.9%
55.8%
(47.5)%
(40.5)%
(34.3)%
(4.9)%
(45.1)%
From a commodity perspective, propane prices declined rather sharply during the first quarter of fiscal 2015 and continued to
trend downward for the remainder of the fiscal year, primarily due to sustained record or near-record high U.S. propane inventories.
The movement in commodity prices in fiscal 2015 was in stark contrast to the prior year, when prices were rising rapidly due to
industry-wide supply and logistics challenges, particularly during the peak of the fiscal 2014 heating season. Overall, average posted
prices for propane (basis Mont Belvieu, Texas) and fuel oil prices for fiscal 2015 were 52.7% and 35.5% lower than the prior year,
respectively. The net change in the fair value of derivative instruments during the period resulted in unrealized (non-cash) gains of
$1.9 million and $0.3 million reported in cost of products sold in fiscal 2015 and 2014, respectively, resulting in a decrease of $1.6
million in cost of products sold in fiscal 2015 compared to the prior year, $1.3 million of which was reported in the propane segment
and $0.3 million was reported in the fuel oil and refined fuels segment.
Cost of products sold associated with the distribution of propane and related activities of $443.5 million for fiscal 2015
decreased $401.3 million, or 47.5%, compared to the prior year primarily due to lower wholesale costs and, to a lesser extent, lower
volumes sold. Lower average propane costs and lower propane volumes sold during fiscal 2015 resulted in a decrease of $310.3
million and $78.2 million, respectively. Cost of products sold from other propane activities decreased $11.5 million.
Cost of products sold associated with our fuel oil and refined fuels segment of $92.6 million for fiscal 2015 decreased $63.1
million, or 40.5%, compared to the prior year. Lower fuel oil and refined fuels wholesale costs and lower volumes sold, resulted in
decreases of $39.8 million and $23.0 million, respectively, in costs of products sold during fiscal 2015 compared to the prior year.
Cost of products sold in our natural gas and electricity segment of $42.3 million for fiscal 2015 decreased $22.1 million, or
34.3%, compared to the prior year, primarily due to lower natural gas and electricity wholesale costs and, to a lesser extent, lower
usage.
Total cost of products sold as a percent of total revenues decreased 13.9 percentage points to 41.9% in fiscal 2015 from 55.8%
in the prior year, primarily due to the decline in wholesale costs outpacing the decline in average selling prices in all segments during
fiscal 2015.
Operating Expenses
(Dollars in thousands)
Operating expenses
As a percent of total revenues
Fiscal
2015
444,251
$
Fiscal
2014
466,389
$
31.4%
24.1%
Decrease
$
(22,138)
Percent
Decrease
(4.7)%
33
Operating expenses of $444.3 million for fiscal 2015 decreased $22.1 million, or 4.7%, compared to $466.4 million in the prior
year, primarily due to operating efficiencies and synergies realized as a result of the integration of Inergy Propane; including lower
payroll and benefit-related expenses attributable to reduced headcount, lower vehicles expenses attributable to reduced vehicle count
and lower fuel costs to operate our fleet, and lower bad debt and insurance expenses. Operating expenses for fiscal 2015 included
expenses of $9.7 million associated with the integration of the Inergy Propane operations, an $11.3 million charge related to our
voluntary partial withdrawal from a MEPP, and a pension settlement charge of $2.0 million. Operating expenses for fiscal 2014
included integration-related expenses of $8.1 million. These items were excluded from our calculation of Adjusted EBITDA below.
General and Administrative Expenses
(Dollars in thousands)
General and administrative expenses
As a percent of total revenues
Fiscal
2015
68,296
$
Fiscal
2014
64,593
$
4.8%
3.3%
Increase
$
3,703
Percent
Increase
5.7%
General and administrative expenses of $68.3 million for fiscal 2015 increased $3.7 million from $64.6 million in the prior year,
primarily due to higher payroll expenses, including variable compensation, and higher professional service fees associated with
uninsured legal matters. General and administrative expenses for fiscal 2015 and 2014 included $1.9 million and $4.2 million,
respectively, of professional services and other expenses associated with the integration of the Inergy Propane operations. These items
were excluded from our calculation of Adjusted EBITDA below.
Depreciation and Amortization
(Dollars in thousands)
Depreciation and amortization
As a percent of total revenues
Fiscal
2015
133,294
$
Fiscal
2014
136,399
$
Decrease
$
(3,105)
Percent
Decrease
(2.3)%
9.4%
7.0%
Depreciation and amortization expense of $133.3 million in fiscal 2015 decreased $3.1 million from $136.4 million in the prior
year, primarily as a result of accelerated depreciation expense recorded in the prior year for assets taken out of service from integration
activities.
Interest Expense, net
(Dollars in thousands)
Interest expense, net
As a percent of total revenues
Fiscal
2015
77,634
$
Fiscal
2014
83,261
$
Decrease
$
(5,627)
Percent
Decrease
(6.8)%
5.5%
4.3%
Net interest expense of $77.6 million for fiscal 2015 decreased $5.6 million from $83.3 million in the prior year, primarily due
to the refinancing of $496.6 million of 7.5% Senior Notes due 2018 with $525.0 million of 5.5% Senior Notes due 2024 in the third
quarter of fiscal 2014, and the refinancing of $250.0 million of 7.375% Senior Notes due 2020 with $250.0 million of 5.75% Senior
Notes due 2025 in the second quarter of fiscal 2015. See Liquidity and Capital Resources below for additional discussion.
Loss on Debt Extinguishment
On February 25, 2015, we repurchased and satisfied and discharged all of our previously outstanding 2020 Senior Notes with
net proceeds from the issuance of the 2025 Senior Notes and cash on hand, pursuant to a tender offer and redemption. In connection
with this tender offer and redemption, during the second quarter of fiscal 2015 we recognized a loss on the extinguishment of debt of
$15.1 million, consisting of $11.1 million for the redemption premium and related fees, as well as the write-off of $2.9 million and
$1.1 million in unamortized debt origination costs and unamortized discount, respectively.
On May 27, 2014, we repurchased and satisfied and discharged all of our previously outstanding 2018 Senior Notes with net
proceeds from the issuance of the 2024 Senior Notes and cash on hand pursuant to a tender offer and redemption. In connection with
this tender offer and redemption, we recognized a loss on the extinguishment of debt of $11.6 million consisting of $31.6 million for
34
the redemption premium and related fees, as well as the write-off of $5.3 million and ($25.3) million in unamortized debt origination
costs and unamortized premium, respectively.
Net Income and Adjusted EBITDA
Net income for fiscal 2015 amounted to $84.4 million, or $1.39 per Common Unit, compared to $94.5 million, or $1.56 per
Common Unit, in fiscal 2014(cid:17)(cid:3)(cid:40)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:69)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:15)(cid:3)(cid:87)(cid:68)(cid:91)(cid:72)(cid:86)(cid:15)(cid:3)(cid:71)(cid:72)(cid:83)(cid:85)(cid:72)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)) for fiscal 2015 amounted to
$296.0 million, compared to $314.9 million for fiscal 2014.
Net income and EBITDA for fiscal 2015 included: (i) a loss on debt extinguishment of $15.1 million; (ii) $11.5 million in
expenses related to the integration of Inergy Propane; (iii) an $11.3 million charge related to our voluntary partial withdrawal from a
MEPP; and (iv) a pension settlement charge of $2.0 million. Net income and EBITDA for fiscal 2014 included: (i) a loss on debt
extinguishment of $11.6 million; and (ii) $12.3 million in expenses related to the integration of Inergy Propane. Excluding the effects
of these items, as well as the unrealized (non-cash) mark-to-market adjustments on derivative instruments in both years, Adjusted
EBITDA amounted to $334.0 million for fiscal 2015, compared to Adjusted EBITDA of $338.5 million in fiscal 2014.
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
(Dollars in thousands)
Net income
Add:
Provision for income taxes
Interest expense, net
Depreciation and amortization
EBITDA
Unrealized (non-cash) (gains) losses on changes in fair
value of derivatives
Loss on debt extinguishment
Integration-related costs
Multi-employer pension plan withdrawal charge
Pension settlement charge
Adjusted EBITDA
Year Ended
September 26,
2015
September 27,
2014
$
84,352 $
94,509
700
77,634
133,294
295,980
(1,855)
15,072
11,542
11,300
2,000
334,039 $
767
83,261
136,399
314,936
(306)
11,589
12,283
(cid:178)
(cid:178)
338,502
$
Liquidity and Capital Resources
Analysis of Cash Flows
Operating Activities. Net cash provided by operating activities for fiscal 2016 amounted to $157.1 million, a decrease of $167.1
million compared to the prior year. The decrease was primarily attributable to lower earnings (discussed above) coupled with a lower
amount of working capital realized as a result of a lower level of working capital at the beginning of fiscal 2016 compared to the
beginning of fiscal 2015. The decline in the amount of working capital was due to the impact of the steep decline in wholesale
product costs on our accounts receivable and inventory in fiscal 2015.
Investing Activities. Net cash used in investing activities of $53.9 million for fiscal 2016 consisted of $42.9 million for the
acquisition of Propane USA and capital expenditures of $38.4 million (including $21.8 million to support the growth of operations and
$16.6 million for maintenance expenditures); partially offset by $21.5 million in proceeds from the sale of assets and operations in a
non-strategic market and $6.0 million in net proceeds from the sale of property, plant and equipment. Net cash used in investing
activities of $36.0 million for fiscal 2015 consisted of capital expenditures of $41.2 million (including $21.8 million to support the
growth of operations and $19.4 million for maintenance expenditures) and $6.5 million for the acquisition of a business; partially
offset by $11.7 million in net proceeds from the sale of property, plant and equipment.
Financing Activities. Net cash used in financing activities for fiscal 2016 of $218.2 million reflects the quarterly distribution to
Common Unitholders at a rate of $0.8875 per Common Unit paid in respect of the fourth quarter of fiscal 2015 and the first, second
and third quarters of fiscal 2016. Upon the execution of the amendment and restatement of our credit agreement on March 3, 2016,
we rolled the $100.0 million then-outstanding under the revolving credit facility of the previous credit agreement into the revolving
credit facility of the new second amended and restated credit agreement. This resulted in the repayment of the $100.0 million then-
35
outstanding under the revolving credit facility of the previous credit agreement with proceeds from borrowings under the revolving
credit facility of the new credit agreement. Financing activities for fiscal 2016 also reflects the payment of $2.7 million in debt
origination costs associated with the refinancing of the credit agreement.
Net cash used in financing activities for fiscal 2015 of $228.5 million reflects the quarterly distribution to Common Unitholders
at a rate of $0.8750 per Common Unit paid in respect of the fourth quarter of fiscal 2014 and the first quarter of fiscal 2015, and at a
rate of $0.8875 per Common Unit paid in respect of the second and third quarters of fiscal 2015. In addition, cash used in financing
activities included proceeds of $250.0 million from the issuance of the 2025 Senior Notes in February 2015 which were used, along
with cash on hand, to repurchase and satisfy and discharge all of the previously outstanding 2020 Senior Notes, as well as to pay
tender premiums and other related fees of $11.1 million and debt issuance costs of $4.6 million, pursuant to a tender offer and
redemption.
Summary of Long-Term Debt Obligations and Revolving Credit Lines
As of September 24, 2016, our long-term debt consisted of $346.2 million in aggregate principal amount of 7.375% senior notes
due August 1, 2021 (excluding unamortized premium of $17.0 million), $525.0 million in aggregate principal amount of 5.5% senior
notes due June 1, 2024, $250.0 million in aggregate principal amount of 5.75% senior notes due March 1, 2025 and $100.0 million
outstanding under our senior secured Revolving Credit Facility. See Part IV, Note 8 of this Annual Report.
The aggregate amounts of long-term debt maturities subsequent to September 24, 2016 are as follows: fiscal 2017: $-0-; fiscal
2018: $-0-; fiscal 2019: $-0-; fiscal 2020: $-0-; fiscal 2021: $446.2 million; and thereafter: $775.0 million.
Partnership Distributions
We are required to make distributions in an amount equal to all of our Available Cash, as defined in our Third Amended and
(cid:53)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3)(cid:81)(cid:82)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:23)(cid:24)(cid:3)(cid:71)(cid:68)(cid:92)(cid:86)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:84)uarter
to holders of record on the applicable record dates. Available Cash, as defined in the Partnership Agreement, generally means all cash
on hand at the end of the respective fiscal quarter less the amount of cash reserves established by the Board of Supervisors in its
reasonable discretion for future cash requirements. These reserves are retained for the proper conduct of our business, the payment of
debt principal and interest and for distributions during the next four quarters. The Board of Supervisors reviews the level of Available
Cash on a quarterly basis based upon information provided by management.
On October 20, 2016, we announced that our Board of Supervisors had declared a quarterly distribution of $0.8875 per
Common Unit for the three months ended September 24, 2016. This quarterly distribution rate equates to an annualized rate of $3.55
per Common Unit. The distribution was paid on November 8, 2016 to Common Unitholders of record as of November 1, 2016.
Pension Plan Assets and Obligations
We have a noncontributory defined benefit pension plan which was originally designed to cover all of our eligible employees
who met certain requirements as to age and length of service. Effective January 1, 1998, we amended the defined benefit pension plan
to provide benefits under a cash balance formula as compared to a final average pay formula which was in effect prior to January 1,
1998. Our defined benefit pension plan was frozen to new participants effective January 1, 2000 and, in furtherance of our effort to
minimize future increases in our benefit obligations, effective January 1, 2003, all future service credits were eliminated. Therefore,
eligible participants will receive interest credits only toward their ultimate defined benefit under the defined benefit pension plan. We
made a minimum required funding payment of $0.7 million in fiscal 2016. There were no such funding requirements for the defined
benefit pension plan in fiscal 2015 or 2014. As of September 24, 2016 and September 26, 2015 (cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:77)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
exceeded the fair value of plan assets by $49.3 million and $42.6 million, respectively. As a result, the net liability recognized in the
consolidated financial statements for the defined benefit pension plan increased by $6.7 million during fiscal 2016, which was
primarily attributable to an increase in the benefit obligation as a result of the decrease in discount rates used to measure the
obligation, partially offset by a return on plan assets that outpaced the interest cost of the benefit obligation. During fiscal 2017, the
Partnership expects to contribute approximately $10.7 million to the defined benefit pension plan in the form of a minimum funding
requirement.
Our investment policies and strategies, as set forth in the Investment Management Policy and Guidelines, are monitored by a
Benefits Committee comprised of five members of management. The Benefits Committee employs a liability driven investment
(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:86)(cid:72)(cid:72)(cid:78)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:85)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:89)(cid:82)(cid:79)(cid:68)(cid:87)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86) funded status.
The execution of this strategy has resulted in an asset allocation that is largely comprised of fixed income securities. A liability driven
investment strategy is intended to reduce investment risk and, over the long-term, generate returns on plan assets that largely fund the
annual interest on the accumulated benefit obligation. However, as we experienced in recent fiscal years, significant declines in
36
interest rates relevant to our benefit obligations, and/or poor performance in the broader capital markets in which our plan assets are
invested, could have an adverse impact on the funded status of the defined benefit pension plan. For purposes of measuring the
projected benefit obligation as of September 24, 2016 and September 26, 2015, we used a discount rate of 3.125% and 3.875%,
respectively, reflecting current market rates for debt obligations of a similar duration to our pension obligations.
During fiscal 2016 and fiscal 2015, lump sum settlement payments of $5.8 million in each year exceeded the interest and service
cost components of the net periodic pension cost. As a result, we recorded a non-cash settlement charge of $2.0 million during the
fourth quarter of fiscal 2016 and fiscal 2015, respectively, in order to accelerate recognition of a portion of cumulative unrecognized
losses in the defined benefit pension plan. These unrecognized losses were previously accumulated as a reduction to partners(cid:182)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)
and were being amortized to expense as part of our net periodic pension cost. During fiscal 2014, the amount of the pension benefit
obligations settled through lump sum payments did not exceed the settlement threshold (combined service and interest costs of net
periodic pension cost); therefore, a settlement charge was not required to be recognized.
We also provide postretirement health care and life insurance benefits for certain retired employees. Partnership employees who
were hired prior to July 1993 and retired prior to March 1998 are eligible for health care benefits if they reached a specified retirement
age while working for the Partnership. Partnership employees hired prior to July 1993 are eligible for postretirement life insurance
benefits if they reach a specified retirement age while working for the Partnership. Effective March 31, 1998, we froze participation
in our postretirement health care benefit plan, with no new retirees eligible to participate in the plan. All active and eligible employees
who were to receive health care benefits under the postretirement plan subsequent to March 1, 1998 were provided an increase to their
accumulated benefits under the defined benefit pension plan. Our postretirement health care and life insurance benefit plans are
unfunded. Effective January 1, 2006, we changed our postretirement health care plan from a self-insured program to one that is fully
insured under which we pay a portion of the insurance premium on behalf of the eligible participants.
Long-Term Debt Obligations and Operating Lease Obligations
Contractual Obligations
The following table summarizes payments due under our known contractual obligations as of September 24, 2016:
(Dollars in thousands)
Long-term debt obligations
Interest payments
Operating lease obligations (a)
Self-insurance obligations (b)
Pension contributions (c)
Other contractual obligations (d)
Total
Fiscal
2017
Fiscal
2018
Fiscal
2019
Fiscal
2020
$
$
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
73,937
22,580
10,168
10,704
3,232
120,621
73,064
18,796
10,383
9,570
3,944
115,757
$
73,064
15,050
8,833
7,570
3,354
107,871
73,064
12,519
7,201
9,175
1,811
103,770
$
$
$
Fiscal
2021
446,180
71,660
9,497
6,012
5,400
1,502
540,251
Fiscal
2022 and
thereafter
$
$
775,000
136,938
15,841
16,451
(cid:178)
13,985
958,215
(a) Payments exclude costs associated with insurance, taxes and maintenance, which are not material to the operating lease
obligations.
(b) The timing of when payments are due for our self-insurance obligations is based on estimates that may differ from when actual
payments are made. In addition, the payments do not reflect amounts to be recovered from our insurance providers, which
amount to $2.7 million, $2.7 million, $2.4 million, $1.7 million, $1.5 million and $4.5 million for each of the next five fiscal
years and thereafter, respectively, and are included in other assets on the consolidated balance sheet.
(c) Amounts represent estimated minimum funding requirements for our pension plan.
(d) These amounts are included in our consolidated balance sheet and primarily include payments for postretirement and long-term
incentive benefits.
Additionally, we have standby letters of credit in the aggregate amount of $43.3 million, in support of retention levels under our
casualty insurance programs and certain lease obligations, which expire periodically through April 3, 2017.
37
Operating Leases
We lease certain property, plant and equipment for various periods under noncancelable operating leases, including 46% of our
vehicle fleet, approximately 26% of our customer service centers and portions of our information systems equipment. Rental expense
under operating leases was $29.2 million, $32.7 million and $31.8 million for fiscal 2016, 2015 and 2014, respectively. Future minimum
rental commitments under noncancelable operating lease agreements as of September 24, 2016 are presented in the table above.
Off-Balance Sheet Arrangements
Guarantees
Certain of our operating leases, primarily those for transportation equipment with remaining lease periods scheduled to expire
periodically through fiscal 2023, contain residual value guarantee provisions. Under those provisions, we guarantee that the fair value
of the equipment will equal or exceed the guaranteed amount upon completion of the lease period, or we will pay the lessor the
difference between fair value and the guaranteed amount. Although the fair value of equipment at the end of its lease term has
historically exceeded the guaranteed amounts, the maximum potential amount of aggregate future payments we could be required to
make under these leasing arrangements, assuming the equipment is deemed worthless at the end of the lease term, was approximately
$16.0 million. The fair value of residual value guarantees for outstanding operating leases was de minimis as of September 24, 2016
and September 26, 2015.
Recently Issued Accounting Pronouncements
See Part IV, Note 2 of this Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Commodity Price Risk
We enter into product supply contracts that are generally one-year agreements subject to annual renewal, and also purchase
product on the open market. Our propane supply contracts typically provide for pricing based upon index formulas using the posted
prices established at major supply points such as Mont Belvieu, Texas, or Conway, Kansas (plus transportation costs) at the time of
delivery. In addition, to supplement our annual purchase requirements, we may utilize forward fixed price purchase contracts to
acquire a portion of the propane that we resell to our customers, which allows us to manage our exposure to unfavorable changes in
commodity prices and to ensure adequate physical supply. The percentage of contract purchases, and the amount of supply contracted
for under forward contracts at fixed prices, will vary from year to year based on market conditions. In certain instances, and when
market conditions are favorable, we are able to purchase product under our supply arrangements at a discount to the market.
Product cost changes can occur rapidly over a short period of time and can impact profitability. We attempt to reduce commodity
price risk by pricing product on a short-term basis. The level of priced, physical product maintained in storage facilities and at our
customer service centers for immediate sale to our customers will vary depending on several factors, including, but not limited to, price,
supply and demand dynamics for a given time of the year. Typically, our on hand priced position does not exceed more than four to eight
weeks of our supply needs, depending on the time of the year. In the course of normal operations, we routinely enter into contracts such
as forward priced physical contracts for the purchase or sale of propane and fuel oil that, under accounting rules for derivative instruments
and hedging activities, qualify for and are designated as normal purchase or normal sale contracts. Such contracts are exempted from fair
value accounting and are accounted for at the time product is purchased or sold under the related contract.
Under our hedging and risk management strategies, we enter into a combination of exchange-traded futures and options
contracts and, in certain instances, over-the-counter options and swap contracts (collectively(cid:15)(cid:3)(cid:179)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
price risk associated with physical product and with future purchases of the commodities used in our operations, principally propane
and fuel oil, as well as to ensure the availability of product during periods of high demand. In addition, the Partnership sells propane
and fuel oil to customers at fixed prices, and enters into derivative instruments to hedge a portion of its exposure to fluctuations in
commodity prices as a result of selling the fixed price contracts. We do not use derivative instruments for speculative trading
purposes. Futures and swap contracts require that we sell or acquire propane or fuel oil at a fixed price for delivery at fixed future
dates. An option contract allows, but does not require, its holder to buy or sell propane or fuel oil at a specified price during a
specified time period. However, the writer of an option contract must fulfill the obligation of the option contract, should the holder
choose to exercise the option. At expiration, the contracts are settled by the delivery of the product to the respective party or are
settled by the payment of a net amount equal to the difference between the then market price and the fixed contract price or option
exercise price. To the extent that we utilize derivative instruments to manage exposure to commodity price risk and commodity prices
move adversely in relation to the contracts, we could suffer losses on those derivative instruments when settled. Conversely, if prices
move favorably, we could realize gains. Under our hedging and risk management strategy, realized gains or losses on derivative
38
instruments will typically offset losses or gains on the physical inventory once the product is sold to customers at market prices, or
delivered to customers as it pertains to fixed price contracts.
Futures are traded with brokers of the NYMEX and require daily cash settlements in margin accounts. Forward contracts are
generally settled at the expiration of the contract term by physical delivery, and swap and options contracts are generally settled at
expiration through a net settlement mechanism. Market risks associated with our derivative instruments are monitored daily for
compliance with our Hedging and Risk Management Policy which includes volume limits for open positions. Open inventory
positions are reviewed and managed daily as to exposures to changing market prices.
Credit Risk
Exchange-traded futures and options contracts are guaranteed by the NYMEX and, as a result, have minimal credit risk. We are
subject to credit risk with over-the-counter forward, swap and options contracts to the extent the counterparties do not perform. We
evaluate the financial condition of each counterparty with which we conduct business and establish credit limits to reduce exposure to
the risk of non-performance by our counterparties.
Interest Rate Risk
(cid:36)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:87)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:68)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:47)(cid:44)(cid:37)OR,
plus an applicable margin or the (cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:41)(cid:72)(cid:71)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:41)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:53)(cid:68)(cid:87)(cid:72)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:242)(cid:3)(cid:82)(cid:73)(cid:3)(cid:20)(cid:8)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:81)(cid:78)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:72)(cid:3)
(cid:85)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:82)(cid:85)(cid:3) (cid:47)(cid:44)(cid:37)(cid:50)(cid:53)(cid:3) (cid:83)(cid:79)(cid:88)(cid:86)(cid:3) (cid:20)(cid:8)(cid:15)(cid:3) (cid:83)(cid:79)(cid:88)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3) (cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:87)(cid:82)(cid:87)al
consolidated leverage ratio (the ratio of consolidated total debt to consolidated EBITDA). Therefore, we are subject to interest rate
risk on the variable component of the interest rate. We manage our interest rate risk by entering into interest rate swap agreements.
The interest rate swaps have been designated as a cash flow hedge. Changes in the fair value of the interest rate swaps are recognized
(cid:76)(cid:81)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:11)(cid:179)(cid:50)(cid:38)(cid:44)(cid:180)(cid:12)(cid:3)(cid:88)(cid:81)(cid:87)(cid:76)(cid:79)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:71)(cid:3)(cid:76)(cid:87)(cid:72)(cid:80)(cid:3)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:17)(cid:3)(cid:3)(cid:36)(cid:87)(cid:3)September 24, 2016, the fair value of the
interest rate swaps was a net liability of $0.2 million, which is included within other current liabilities with a corresponding unrealized
loss reflected in accumulated other comprehensive income.
Derivative Instruments and Hedging Activities
All of our derivative instruments are reported on the balance sheet at their fair values. On the date that derivative instruments
are entered into, we make a determination as to whether the derivative instrument qualifies for designation as a hedge. Changes in the
fair value of derivative instruments are recorded each period in current period earnings or OCI, depending on whether a derivative
instrument is designated as a hedge and, if so, the type of hedge. For derivative instruments designated as cash flow hedges, we
(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3) (cid:69)(cid:82)(cid:87)(cid:75)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:72)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:3) (cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3) (cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:75)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3) (cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)ve in
offsetting changes in cash flows of hedged items. Changes in the fair value of derivative instruments designated as cash flow hedges
are reported in OCI to the extent effective and reclassified into earnings during the same period in which the hedged item affects
earnings. The mark-to-market gains or losses on ineffective portions of cash flow hedges are immediately recognized in earnings.
Changes in the fair value of derivative instruments that are not designated as cash flow hedges, and that do not meet the normal
purchase and normal sale exemption, are recorded in earnings as they occur. Cash flows associated with derivative instruments are
reported as operating activities within the consolidated statement of cash flows.
Sensitivity Analysis
In an effort to estimate our exposure to unfavorable market price changes in commodities related to our open positions under
derivative instruments, we developed a model that incorporates the following data and assumptions:
A.
B.
The fair value of open positions as of September 24, 2016.
The market prices for the underlying commodities used to determine A. above were adjusted adversely by a
hypothetical 10% change and compared to the fair value amounts in A. above to project the potential negative
impact on earnings that would be recognized for the respective scenario.
Based on the sensitivity analysis described above, the hypothetical 10% adverse change in market prices for open derivative
instruments as of September 24, 2016 indicates an increase in potential future net losses of $1.0 million. The above hypothetical
change does not reflect the worst case scenario. Actual results may be significantly different depending on market conditions and the
composition of the open position portfolio.
39
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm thereon listed on the
accompanying Index to Financial Statements in Part IV, Item 15 (see page F-1) and the Supplemental Financial Information listed on
the accompanying Index to Financial Statement Schedule in Part IV, Item 15 (see page S-1) are included herein.
Selected Quarterly Financial Data
Due to the seasonality of the retail propane, fuel oil and other refined fuel and natural gas businesses, our first and second
quarter revenues and earnings are consistently greater than third and fourth quarter results. The following presents our selected
quarterly financial data for the last two fiscal years (unaudited; in thousands, except per unit amounts).
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Total
Year
$
Fiscal 2016
Revenues
Costs of products sold
Gain on sale of business (a)
Operating income (loss)
Loss on debt extinguishment (b)
Net income (loss)
Net income (loss) per Common Unit - basic (c)
$
Net income (loss) per Common Unit - diluted (c) $
Cash provided by (used in):
Operating activities
Investing activities
Financing activities
EBITDA (d)
Adjusted EBITDA (d)
Retail gallons sold
Propane
Fuel oil and refined fuels
$
$
Fiscal 2015
Revenues
Costs of products sold
Operating income (loss)
Loss on debt extinguishment (b)
Net income (loss)
$
Net income (loss) per Common Unit - basic (c)
Net income (loss) per Common Unit - diluted (c) $
$
Cash provided by (used in):
Operating activities
Investing activities
Financing activities
EBITDA (d)
Adjusted EBITDA (d)
Retail gallons sold
Propane
Fuel oil and refined fuels
$
$
$
$
$
$
$
$
$
$
$
$
275,857
92,506
(cid:178)
31,344
(cid:178)
12,266
0.20
0.20
10,351
(52,505)
(53,722)
62,982
67,192
109,764
8,565
422,944
187,921
75,968
(cid:178)
55,807
0.92
0.92
33,605
(11,453)
(52,777)
108,597
101,005
134,534
11,261
$
$
$
$
$
$
$
$
$
$
404,140
137,009
(cid:178)
111,213
292
92,011
1.51
1.51
70,136
(11,399)
(56,517)
144,071
145,102
161,597
13,296
599,389
253,667
171,591
15,072
136,634
2.26
2.24
126,332
(10,083)
(68,197)
189,748
214,316
199,690
19,898
$
205,099
75,497
9,769
(10,780)
(cid:178)
(29,598)
$
161,015
56,941
(cid:178)
(41,371)
(cid:178)
(60,239)
(0.49) $
(0.49) $
(0.99) $
(0.99) $
1,046,111
361,953
9,769
90,406
292
14,440
0.24
0.24
48,173
14,542
(54,011)
21,508
18,395
80,184
5,771
220,302
94,198
(21,834)
(cid:178)
(40,952)
$
$
$
28,448
(4,543)
(53,950)
(8,831) $
(7,646) $
63,231
3,246
157,108
(53,905)
(218,200)
219,730
223,043
414,776
30,878
$
174,344
57,594
(47,967)
(cid:178)
(67,137)
1,416,979
593,380
177,758
15,072
84,352
1.39
1.38
(0.67) $
(0.67) $
(1.11) $
(1.11) $
99,205
(8,419)
(53,843)
10,896
12,067
77,633
6,181
$
$
65,067
(6,017)
(53,721)
(13,261) $
$
6,651
68,515
4,538
324,209
(35,972)
(228,538)
295,980
334,039
480,372
41,878
(a) On April 22, 2016, we sold certain assets and operations in a non-strategic market of the propane segment for $26.0 million,
including $5.0 million of non-compete consideration that will be received over a five-year period, resulting in a gain of $9.8
million that was recognized during the third quarter of fiscal 2016.
40
(b) During the second quarter of fiscal 2016, we entered into a Second Amended and Restated Credit Agreement that provides for a
five-year $500.0 million revolving credit facility. In connection with the Amended Credit Agreement, we recognized a non-
cash charge of $0.3 million to write-off a portion of unamortized debt origination costs of the previous credit agreement. During
the second quarter of fiscal 2015, we repurchased and satisfied and discharged all of our 2020 Senior Notes with net proceeds
from the issuance of the 2025 Senior Notes and cash on hand, pursuant to a tender offer and redemption. In connection with this
tender offer and redemption, we recognized a loss on the extinguishment of debt of $15.1 million consisting of $11.1 million for
the redemption premium and related fees, as well as the write-off of $2.9 million and $1.1 million in unamortized debt
origination costs and unamortized discount, respectively.
(c) Basic net income (loss) per Common Unit is computed by dividing net income (loss) by the weighted average number of
outstanding Common Units, and restricted units granted under the Restricted Unit Plans to retirement-eligible grantees.
Computations of diluted net income per Common Unit are performed by dividing net income by the weighted average number
of outstanding Common Units and unvested restricted units granted under our Restricted Unit Plans. Diluted loss per Common
Unit for the periods where a net loss was reported does not include unvested restricted units granted under our Restricted Unit
Plans as their effect would be anti-dilutive.
(d) EBITDA represents net income before deducting interest expense, income taxes, depreciation and amortization. Adjusted
EBITDA represents EBITDA excluding the unrealized net gain or loss on mark-to-market activity for derivative instruments
and other items, as applicable, as provided in the table below. Our management uses EBITDA and Adjusted EBITDA as
supplemental measures of operating performance and we are including them because we believe that they provide our investors
and industry analysts with additional information to evaluate our operating results. EBITDA and Adjusted EBITDA are not
recognized terms under US GAAP and should not be considered as an alternative to net income or net cash provided by
operating activities determined in accordance with US GAAP. Because EBITDA and Adjusted EBITDA as determined by us
excludes some, but not all, items that affect net income, they may not be comparable to EBITDA and Adjusted EBITDA or
similarly titled measures used by other companies. The following table sets forth our calculations of EBITDA and Adjusted
EBITDA:
41
Fiscal 2016
Net income (loss)
Add:
Provision for income taxes
Interest expense, net
Depreciation and amortization
EBITDA
Unrealized (non-cash) (gains) losses on changes
in fair value of derivatives
Gain on sale of business
Multi-employer pension plan withdrawal charge
Product liability settlement
Pension settlement charge
Loss on debt extinguishment
Adjusted EBITDA
Fiscal 2015
Net income (loss)
Add:
Provision for income taxes
Interest expense, net
Depreciation and amortization
EBITDA
Unrealized (non-cash) losses (gains) on changes
in fair value of derivatives
Loss on debt extinguishment
Integration-related costs
Multi-employer pension plan withdrawal charge
Pension settlement charge
Adjusted EBITDA
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Total
Year
$
12,266
$
92,011
$
(29,598) $
(60,239) $
14,440
185
18,893
31,638
62,982
1,210
(cid:178)
(cid:178)
3,000
(cid:178)
(cid:178)
67,192
$
58
18,852
33,150
144,071
739
(cid:178)
(cid:178)
(cid:178)
(cid:178)
292
145,102
$
180
18,638
32,288
21,508
56
(9,769)
6,600
(cid:178)
(cid:178)
(cid:178)
18,395
$
165
18,703
32,540
(8,831)
(815)
(cid:178)
(cid:178)
(cid:178)
2,000
(cid:178)
(7,646) $
588
75,086
129,616
219,730
1,190
(9,769)
6,600
3,000
2,000
292
223,043
55,807
$
136,634
$
(40,952) $
(67,137) $
84,352
162
19,999
32,629
108,597
(9,505)
(cid:178)
1,913
(cid:178)
(cid:178)
101,005
$
174
19,711
33,229
189,748
7,433
15,072
2,063
(cid:178)
(cid:178)
214,316
$
185
18,933
32,730
10,896
37
(cid:178)
1,134
(cid:178)
(cid:178)
12,067
$
179
18,991
34,706
(13,261)
180
(cid:178)
6,432
11,300
2,000
6,651
$
700
77,634
133,294
295,980
(1,855)
15,072
11,542
11,300
2,000
334,039
$
$
$
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Partnership maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:20)(cid:28)(cid:22)(cid:23)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:180)(cid:12)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3) (cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:68)(cid:86)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:69)(cid:72)(cid:3)
(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86) and submissions under the Exchange Act is recorded, processed, summarized and reported within
the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3) (cid:73)inancial officer, as appropriate, to allow timely
decisions regarding required disclosure.
Before filing this Annual Report, the Partnership completed an evaluation under the supervision and with the participation of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74) (cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)
(cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:68)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) September 24, 2016. Based on this
(cid:72)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)principal executive officer and principal financial officer concluded that as of September 24, 2016, such
disclosure controls and procedures were effective to provide the reasonable assurance level described above.
42
Changes in Internal Control Over Financial Reporting
There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) during the quarter ended September 24, 2016, that have materially affected, or are reasonably likely to materially
(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:15)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:17)(cid:3)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:86)(cid:3)(cid:76)ncluded
below.
(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:50)(cid:89)(cid:72)(cid:85)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)
Management of the Partnership is responsible for establishing and maintaining adequate internal control over financial
reporting. The Partnership's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of
the Partnership's financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Partn(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
September 24, 2016. In making this assessment, the Partnership used the criteria established by the Committee of Sponsoring
Organization(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:72)(cid:68)(cid:71)(cid:90)(cid:68)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:38)(cid:50)(cid:54)(cid:50)(cid:180)(cid:12)(cid:3)(cid:76)(cid:81)(cid:3)(cid:179)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)-Integrated Framework (2013(cid:12)(cid:17)(cid:180)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:70)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
areas of control environment, risk assessment, control activities, information and communication, and monitoring. The Partnership's
assessment included documenting, evaluating and testing the design and operating effectiveness of its internal control over financial
reporting.
(cid:37)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3) (cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:15)(cid:3) (cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:70)(cid:82)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) September 24, 2016, the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:17)
Our independent registered public accounting firm, PricewaterhouseCoopers LLP, issued an attestation report dated November
23, 2016 on the effectiveness of our internal control over financial reporting, which is included herein.
ITEM 9B. OTHER INFORMATION
None.
43
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND PARTNERSHIP GOVERNANCE
Partnership Management
Our Partnership Agreement provides that all management powers over our business and affairs are exclusively vested in our
Board of Supervisors and, subject to the direction of the Board of Supervisors, our officers. No Unitholder has any manageme nt
power over our business and affairs or actual or apparent authority to enter into contracts on behalf of or otherwise to bind us. Under
the current Partnership Agreement, members of our Board of Supervisors are elected by the Unitholders for three-year terms. All of
our current Supervisors, namely Messrs. Harold R. Logan Jr., Lawrence C. Caldwell, Matthew J. Chanin, John D. Collins, Michael A.
Stivala, John Hoyt Stookey and Ms. Jane Swift, were elected to their current three-year terms at the Tri-Annual Meeting of our
Unitholders held on May 13, 2015.
At its regular meeting on November 15, 2016, our Board of Supervisors, pursuant to authority granted to the Board under the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:71)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:49)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:18)(cid:42)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:76)(cid:93)(cid:72)(cid:3)(cid:82)(cid:73)
the Board from eight (8) Supervisors to nine (9) Supervisors, effective January 1, 2017. At the same meeting and again pursuant to
authority granted to the Board under the Partnership Agreement and in accordance with the recommendation of its
Nominating/Governance Committee, the Board elected Messrs. Terence J. Connors and William M. Landuyt to fill the two vacancies
on the Board following the increase in size of the Board, effective January 1, 2017. Messrs. Connors and Landuyt were each elected
for a term due to expire at the next Tri-Annual Meeting of our Unitholders, currently planned for Spring 2018. At this time neither
Mr. Connors nor Mr. Landuyt has been named to any Board committees.
Three Supervisors, who are not officers or employees of the Partnership or its subsidiaries, currently serve on the Audit
Committee with authority to review, at the request of the Board of Supervisors, specific matters as to which the Board of Supervisors
believes there may be a conflict of interest, or which may be required to be disclosed pursuant to Item 404(a) of Regulation S-K
adopted by the SEC, in order to determine if the resolution or course of action in respect of such conflict proposed by the Board of
Supervisors is fair and reasonable to us. Under the Partnership Agreement, any matter that receives the (cid:179)(cid:54)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:36)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:68)(cid:79)(cid:180)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
Audit Committee (i.e., approval by a majority of the members of the Audit Committee) is conclusively deemed to be fair and
reasonable to us, is deemed approved by all of our partners and shall not constitute a breach of the Partnership Agreement or any duty
stated or implied by law or equity as long as the material facts known to the party having the potential conflict of interest regarding
that matter were disclosed to the Audit Committee at the time it gave Special Approval. The Audit Committee also assists the Board
(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:73)(cid:88)(cid:79)(cid:73)(cid:76)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:11)(cid:76)(cid:12)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:74)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)ts and internal
(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:30)(cid:3) (cid:11)(cid:76)(cid:76)(cid:12)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)pplicable laws, regulations and its code of conduct; (iii)
independence and qualifications of the independent registered public accounting firm; (iv) performance of the internal audit function
and the independent registered public accounting firm; and (v) accounting complaints.
The Board of Supervisors has determined that all three current members of the Audit Committee, John D. Collins, Lawrence C.
Caldwell and Jane Swift, are independent and (with the exception of Ms. Swift) audit committee financial experts within the meaning
of the NYSE corporate governance listing standards and in accordance with Rule 10A-3 of the Exchange Act, Item 407 of Regulation
S-(cid:46)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:11)(cid:68)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:44)(cid:87)(cid:72)(cid:80)(cid:3)(cid:20)(cid:22)(cid:15)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:76)(cid:81)(cid:12)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)he date of this Annual Report.
Mr. Logan, Chairman of the Board, presides at the regularly scheduled executive sessions of the non-management Supervisors,
all of whom are independent, held as part of the regular meetings of the Board of Supervisors. Investors and other parties interested in
communicating directly with the non-management Supervisors as a group may do so by writing to the Non-Management Members of
the Board of Supervisors, c/o Company Secretary, Suburban Propane Partners, L.P., P.O. Box 206, Whippany, New Jersey 07981-
0206
44
Board of Supervisors and Executive Officers of the Partnership
The following table sets forth certain information with respect to the members of the Board of Supervisors and our executive
officers as of November 23, 2016 and with respect to Terence J. Connors and William M. Landuyt, who have been elected to become
members of the Board of Supervisors as of January 1, 2017. Officers are appointed by the Board of Supervisors for one-year terms
and Supervisors (other than those elected by the Board to fill vacancies) are elected by the Unitholders for three-year terms.
Name
Michael A. Stivala ....................................
Michael A. Kuglin ....................................
Paul Abel ..................................................
Steven C. Boyd .........................................
Douglas T. Brinkworth .............................
Neil E. Scanlon .........................................
(cid:36)(cid:17)(cid:3)(cid:39)(cid:68)(cid:89)(cid:76)(cid:81)(cid:3)(cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)...............................
Keith P. Onderdonk ..................................
Sandra N. Zwickel ....................................
Daniel S. Bloomstein ................................
Harold R. Logan, Jr...................................
John Hoyt Stookey....................................
John D. Collins .........................................
Jane Swift..................................................
Lawrence C. Caldwell...............................
Matthew J. Chanin ....................................
Terence J. Connors ...................................
William M. Landuyt..................................
Position With the Partnership
President and Chief Executive Officer; Member of the Board of Supervisors
Chief Financial Officer & Chief Accounting Officer
Senior Vice President, General Counsel and Secretary
Senior Vice President (cid:177) Operations
Senior Vice President (cid:177) Product Supply, Purchasing & Logistics
Senior Vice President (cid:177) Information Services
Vice President and Treasurer
Vice President (cid:177) Operational Support
Vice President (cid:177) Human Resources
Controller
Age
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63
52
55
51
52
52
50
43
72 Member of the Board of Supervisors (Chairman)
86 Member of the Board of Supervisors
78 Member of the Board of Supervisors (Chairman of the Audit Committee)
51 Member of the Board of Supervisors
70 Member of the Board of Supervisors
62 Member of the Board of Supervisors (Chairman of the Compensation Committee)
61 Member of the Board of Supervisors
61 Member of the Board of Supervisors
Mr. Stivala has served as our President since April 2014 and as our Chief Executive Officer since September 2014. Mr. Stivala
has served as a Supervisor since November 2014. From November 2009 until March 2014 he was our Chief Financial Officer, and,
before that, our Chief Financial Officer and Chief Accounting Officer since October 2007. Prior to that he was our Controller and
Chief Accounting Officer since May 2005 and Controller since December 2001. Before joining the Partnership, he held several
positions with PricewaterhouseCoopers LLP, an international accounting firm, most recently as Senior Manager in the Assurance
practice.
(cid:48)(cid:85)(cid:17)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:68)(cid:79)(cid:68)(cid:182)(cid:86)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)ications to sit on our Board include his fifteen years of experience in the propane industry, including as our
current President and Chief Executive Officer and, before that, as our Chief Financial Officer for almost seven years, which day to day
leadership roles have provided him with intimate knowledge of our operations.
Mr. Kuglin has served as our Chief Financial Officer & Chief Accounting Officer since September 2014 and was our Vice
President (cid:177) Finance and Chief Accounting Officer from April 2014 through September 2014. Prior to that he served as our Vice
President and Chief Accounting Officer since November 2011, our Controller and Chief Accounting Officer since November 2009
and our Controller since October 2007. For the eight years prior to joining the Partnership he held several financial and managerial
positions with Alcatel-Lucent, a global communications solutions provider. Prior to Alcatel-Lucent, Mr. Kuglin held several positions
with the international accounting firm PricewaterhouseCoopers LLP, most recently as Manager in the Assurance practice. Mr. Kuglin
is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.
Mr. Abel has served as our General Counsel and Secretary since June 2006, was additionally made a Vice President in October
2007 and a Senior Vice President in April 2014. Prior to joining the Partnership, Mr. Abel served as senior in-house legal counsel
(including as a General Counsel) for several technology companies.
Mr. Boyd has served as our Senior Vice President (cid:177) Operations since September 2015 and before that was our Senior Vice
President (cid:177) Field Operations since April 2014. Previously he was our Vice President (cid:177) Field Operations (formerly Vice President (cid:177)
Operations) since October 2008, our Southeast and Western Area Vice President since March 2007, Managing Director (cid:177) Area
Operations since November 2003 and Regional Manager (cid:177) Northern California since May 1997. Mr. Boyd held various managerial
positions with predecessors of the Partnership from 1986 through 1996.
Mr. Brinkworth has served as our Senior Vice President (cid:177) Product Supply, Purchasing & Logistics since April 2014 and was
previously our Vice President (cid:177) Product Supply (formerly Vice President (cid:177) Supply) since May 2005. Mr. Brinkworth joined the
45
Partnership in April 1997 after a nine year career with Goldman Sachs and, since joining the Partnership, has served in various
positions in the product supply area.
Mr. Scanlon became our Senior Vice President (cid:177) Information Services in April 2014, after serving as our Vice President (cid:177)
Information Services since November 2008. Prior to that he served as our Assistant Vice President (cid:177) Information Services since
November 2007, Managing Director (cid:177) Information Services from November 2002 to November 2007 and Director (cid:177) Information
Services from April 1997 until November 2002. Prior to joining the Partnership, Mr. Scanlon spent several years with JP Morgan &
Co., most recently as Vice President (cid:177) Corporate Systems and earlier held several positions with Andersen Consulting, an
international systems consulting firm, most recently as Manager.
(cid:48)(cid:85)(cid:17)(cid:3) (cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:71)(cid:3) (cid:68)(cid:86)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:55)(cid:85)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:85)(cid:3) (cid:86)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3) (cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:19)(cid:19)(cid:21)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:90)(cid:68)(cid:86)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:80)(cid:68)(cid:71)(cid:72)(cid:3) (cid:68)(cid:3) (cid:57)(cid:76)(cid:70)(cid:72)(cid:3) (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3) (cid:76)(cid:81)(cid:3) (cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)
2007. He served as our Assistant Treasurer from October 2000 to November 2002 and as Director of Treasury Services from January
(cid:20)(cid:28)(cid:28)(cid:27)(cid:3)(cid:87)(cid:82)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:19)(cid:19)(cid:17)(cid:3)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:76)(cid:81)(cid:3)(cid:48)(cid:68)(cid:92)(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:72)(cid:81)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:69)(cid:68)(cid:81)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:17)
Mr. Onderdonk has served as our Vice President (cid:177) Operational Support since November 2015 and before that was our Assistant
Vice President (cid:177) Financial Planning and Analysis since November 2013. Prior to that, he served as our Managing Director, Financial
Planning and Analysis from November 2010 to November 2013. Mr. Onderdonk joined the Partnership in September 2001 after
fourteen years in the consumer products industry.
Ms. Zwickel has served as our Vice President (cid:177) Human Resources since November 2013. Prior to that, she was our Assistant
Vice President (cid:177) (cid:43)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3)(cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:70)(cid:72)(cid:3)(cid:36)(cid:83)(cid:85)(cid:76)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:20)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:68)(cid:85)(cid:79)(cid:76)(cid:72)(cid:85)(cid:3)(cid:75)(cid:72)(cid:79)(cid:71)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:85)(cid:82)(cid:79)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:47)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3)(cid:39)(cid:72)(cid:83)(cid:68)(cid:85)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:11)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
Assistant General Counsel from October 2009 to April 2011 and Counsel from October 2002 to October 2009), where she was
responsible for, among other things, providing legal counsel on employment issues. Ms. Zwickel joined the Partnership in June 1999
after eight years in the private practice of law.
Mr. Bloomstein joined the Partnership as its Controller in April 2014. For the ten years prior to joining the Partnership, he held
several executive financial and accounting positions with The Access Group, a network of professional services companies, and with
Dow Jones & Company, Inc., a global news and financial information company. Mr. Bloomstein started his career with the
international accounting firm PricewaterhouseCoopers LLP, working his way to the level of Manager in the Assurance/Business
Advisory Services practice. Mr. Bloomstein is a Certified Public Accountant and a member of the American Institute of Certified
Public Accountants.
Mr. Logan has served as a Supervisor since March 1996 and was elected as Chairman of the Board of Supervisors in January
2007. Mr. Logan is a Co-Founder and, from 2006 to the present has been serving as a Director, of Basic Materials and Services LLC,
an investment company that has invested in companies that provide specialized infrastructure services and materials for the pipeline
construction industry and the sand/silica industry. From 2003 to September 2006, Mr. Logan was a Director and Chairman of the
Finance Committee of the Board of Directors of TransMontaigne Inc., which provided logistical services (i.e. pipeline, terminaling
and marketing) to producers and end-users of refined petroleum products. From 1995 to 2002, Mr. Logan was Executive Vice
President/Finance, Treasurer and a Director of TransMontaigne Inc. From 1987 to 1995, Mr. Logan served as Senior Vice President (cid:177)
Finance and a Director of Associated Natural Gas Corporation, an independent gatherer and marketer of natural gas, natural gas
liquids and crude oil. Mr. Logan is also a Director of InfraREIT, Inc., Cimarex Energy Co., Graphic Packaging Holding Company
and Hart Energy Publishing LLP.
Over the past forty years, Mr(cid:17)(cid:3) (cid:47)(cid:82)(cid:74)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3) (cid:72)(cid:71)(cid:88)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:69)(cid:68)(cid:81)(cid:78)(cid:76)(cid:81)(cid:74)(cid:18)(cid:89)(cid:72)(cid:81)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3) (cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:18)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:75)(cid:76)(cid:80)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:73)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)(cid:3) (cid:3) (cid:48)(cid:82)(cid:86)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:47)(cid:82)(cid:74)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)
business experience has been in the energy industry, both in investment banking and as a senior financial officer and director of
publicly-(cid:82)(cid:90)(cid:81)(cid:72)(cid:71)(cid:3) (cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3) (cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:47)(cid:82)(cid:74)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:86)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:69)(cid:72)(cid:72)(cid:81)(cid:3) (cid:85)(cid:72)(cid:79)(cid:72)(cid:89)(cid:68)(cid:81)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
oversight and advice to the managements of public companies, and is of particular benefit in his role as our Chairman. Since 1996,
Mr. Logan has been a director of ten public companies and has served on audit, compensation and governance committees.
Mr. Stookey has served as a Supervisor since March 1996. He was Chairman of the Board of Supervisors from March 1996
through January 2007. From 1986 until September 1993, he was the Chairman, President and Chief Executive Officer of Quantum
Chemical Corporation, a predecessor of the Partnership. He served as non-executive Chairman and a Director of Quantum from its
acquisition by Hanson plc, a global diversified industrial conglomerate, in September 1993 until October 1995, at which time he
retired. Since then, Mr. Stookey has served as a trustee of a number of non-profit organizations, including founding and serving as
non-executive Chairman of Per Scholas Inc. (a non-profit organization dedicated to training inner city individuals to become computer
and software technicians), The Berkshire Choral Festival and Landmark Volunteers and also currently serves on the Board of
Directors of The Clark Foundation and The Robert Sterling Clark Foundation and as a Life Trustee of the Boston Symphony
Orchestra.
46
(cid:48)(cid:85)(cid:17)(cid:3) (cid:54)(cid:87)(cid:82)(cid:82)(cid:78)(cid:72)(cid:92)(cid:182)(cid:86)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)ude his extensive experience as Chief Executive Officer of four
corporations (including a predecessor of the Partnership) and his many years of service as a director of publicly-owned corporations
and non-profit organizations.
Mr. Collins has served as a Supervisor since April 2007. He served with KPMG LLP, an international accounting firm, from
1962 until 2000, most recently as senior audit partner of its New York office. He has served as a United States representative on the
International Auditing Procedures Committee, a committee of international accountants responsible for establishing international
auditing standards. Until recently, Mr. Collins was a Director of Montpelier Re, Columbia Atlantic Funds and Mrs. Fields Original
Cookies, Inc.
Mr. Collins(cid:182)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3) (cid:68)(cid:86)(cid:3) (cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:87)(cid:92)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3)
experience in public accounting, including 31 years as a partner supervising the audits of public companies. Mr. Collins has served on
a number of AICPA and international accounting and auditing standards bodies.
Ms. Swift has served as a Supervisor since April 2007. She is currently the CEO of Middlebury Interactive Languages, LLC, a
marketer of world language products. From 2010 through July 2011, Ms. Swift served as Senior Vice President (cid:177) ConnectEDU Inc., a
private education technology company. In 2007, she founded WNP Consulting, LLC, a provider of expert advice and guidance to
early stage education companies. From 2003 to 2006 she was a General Partner at Arcadia Partners, a venture capital firm focused on
the education industry. She has previously served on the boards of K12, Inc., Animated Speech Company, The Young Writers Project
and Sally Ride Science Inc. Ms. Swift currently serves on several not-for-profit boards, including the National Alliance for Public
Charter Schools and Vermont PBS; and on the advisory boards of School of Leadership Afghanistan and Vote, Run, Lead. Ms. Swift
is also a Trustee for Champlain College. Prior to joining Arcadia, Ms. Swift served for fifteen years in Massachusetts state
(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:69)(cid:72)(cid:70)(cid:82)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)(cid:48)(cid:68)(cid:86)(cid:86)(cid:68)(cid:70)(cid:75)(cid:88)(cid:86)(cid:72)(cid:87)(cid:87)(cid:86)(cid:182)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:90)(cid:82)(cid:80)(cid:68)(cid:81)(cid:3)(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:17)
(cid:48)(cid:86)(cid:17)(cid:3) (cid:54)(cid:90)(cid:76)(cid:73)(cid:87)(cid:182)(cid:86)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:75)(cid:72)(cid:85)(cid:3) (cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3) (cid:86)(cid:78)(cid:76)(cid:79)(cid:79)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3) (cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:92)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:68)nd her
extensive knowledge of regulatory matters arising from her fifteen years in state government.
Mr. Caldwell has served as a Supervisor since November 2012. He was a Co-Founder of New Canaan Investments, Inc.
(cid:11)(cid:179)(cid:49)(cid:38)(cid:44)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:83)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:76)(cid:85)(cid:80)(cid:15) where he was one of three senior officers of the firm from 1988 to 2005. NCI was an active
(cid:179)(cid:73)(cid:76)(cid:91)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:180)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:83)(cid:68)(cid:70)(cid:78)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:70)(cid:75)(cid:72)(cid:80)(cid:76)(cid:70)(cid:68)(cid:79)(cid:86)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:82)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:38)(cid:68)(cid:79)(cid:71)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3) (cid:75)(cid:72)(cid:79)(cid:71)(cid:3) (cid:68)(cid:3) (cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)
directorships and senior management positions in these companies until he retired in 2005. The largest of these companies was Kerr
Group, Inc., a plastic closure and bottle company where Mr. Caldwell served as Director for eight years and Chief Financial Officer
for six years. From 1985 to 1988, Mr. Caldwell was head of acquisitions for Moore McCormack Resources, Inc., an oil and gas
exploration, shipping, and construction materials company. Mr. Caldwell is currently a director of Magnuson Products, LLC, a private
company which manufactures specialty engine components for automotive original equipment manufacturers and aftermarket. Mr.
Caldwell also currently serves on the Board of Trustees and as Chairman of the Investment and Finance Committee of Historic
Deerfield, and on the Board of Directors and as Chairman of the Finance Committee of the Leventhal Map Center; both of which non-
profit institutions focus on enriching educational programs for K-12 children locally and nationwide.
Mr. Caldwell's qualifications to sit on our Board include over forty years of successful investing in and managing of a broad
range of public and private businesses in a number of different industries. This experience has encompassed both turnaround
situations, and the building of companies through internal growth and acquisitions.
Mr. Chanin has served as a Supervisor since November 2012. He was Senior Managing Director of Prudential Investment
(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:88)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:15)(cid:3)(cid:44)(cid:81)(cid:70)(cid:17)(cid:15)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:3)(cid:88)(cid:81)(cid:87)(cid:76)(cid:79)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:45)(cid:68)(cid:81)(cid:88)(cid:68)(cid:85)(cid:92)(cid:3)(cid:21)(cid:19)(cid:20)(cid:21)(cid:17)(cid:3)(cid:3)(cid:43)(cid:72)(cid:3)(cid:75)(cid:72)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:80)(cid:182)(cid:86) private
fixed income business, chaired an internal committee responsible for strategic investing and was a principal in Prudential Capital
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:80)(cid:182)(cid:86)(cid:3)(cid:80)(cid:72)(cid:93)(cid:93)(cid:68)(cid:81)(cid:76)(cid:81)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)(cid:3)(cid:3)(cid:43)(cid:72)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:90)(cid:82)(cid:3)(cid:83)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)e in Prudential
(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:86)(cid:182)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:51)(cid:85)(cid:88)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:79)(cid:76)(cid:72)(cid:81)(cid:87)(cid:17)
(cid:48)(cid:85)(cid:17)(cid:3) (cid:38)(cid:75)(cid:68)(cid:81)(cid:76)(cid:81)(cid:182)(cid:86)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:22)(cid:24)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:3) (cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3) (cid:82)(cid:81)(cid:3) (cid:75)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3) (cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)
private placements in companies in a broad range of industries, with a particular focus on energy companies. He has previously
served on the audit committee of a public company board and is currently a member of the compensation committee for a private
company board. Mr. Chanin has earned an MBA and is a Chartered Financial Analyst.
Mr. Connors will commence service as a Supervisor on January 1, 2017. Mr. Connors retired in September 2015 from KPMG
LLP after nearly forty years in public accounting. Prior to joining KPMG in 2002 he was a partner with another large international
accounting firm. During his career, he served as a senior audit and global lead partner for numerous public companies, including
Fortune 500 companies. At KPMG he was a professional practice partner, SEC Reviewing Partner and was elected to serve as a
47
(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:46)(cid:51)(cid:48)(cid:42)(cid:182)(cid:86)(cid:3) (cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3) (cid:11)(cid:21)(cid:19)(cid:20)(cid:20)-2015), where he chaired the Audit, Finance & Operations Committee. Mr. Connors
currently serves as a director and audit committee chairman of the largest privately-held automotive parts remanufacturer in the world.
(cid:48)(cid:85)(cid:17)(cid:3) (cid:38)(cid:82)(cid:81)(cid:81)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:3) (cid:79)(cid:72)(cid:68)(cid:71)(cid:3) (cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:81)(cid:88)(cid:80)(cid:72)(cid:85)(cid:82)(cid:88)(cid:86)(cid:3) (cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)
companies across a variety of industries, which enables him to provide helpful insights to the Board in connection with its oversight of
financial, accounting and internal control matters.
Mr. Landuyt will commence service as a Supervisor on January 1, 2017. Since 2003, Mr. Landuyt has served as a Managing
Director at Charterhouse Equity Partners, LLC, a private equity firm with a focus on build-ups, management buyouts, and growth
capital investments primarily in the business services and healthcare services sectors, and has served on the Boards of Directors of a
number of portfolio companies of that firm. From 1996 to 2003, Mr. Landuyt served as Chairman of the Board, President and Chief
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:48)(cid:76)(cid:79)(cid:79)(cid:72)(cid:81)(cid:81)(cid:76)(cid:88)(cid:80)(cid:3) (cid:38)(cid:75)(cid:72)(cid:80)(cid:76)(cid:70)(cid:68)(cid:79)(cid:86)(cid:15)(cid:3) (cid:44)(cid:81)(cid:70)(cid:17)(cid:3) (cid:11)(cid:179)(cid:48)(cid:76)(cid:79)(cid:79)(cid:72)(cid:81)(cid:81)(cid:76)(cid:88)(cid:80)(cid:180)(cid:12)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:20)(cid:28)(cid:27)(cid:22)(cid:3) (cid:87)(cid:82)(cid:3) (cid:20)(cid:28)(cid:28)(cid:25)(cid:3) (cid:75)(cid:72)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3) (cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
positions wit(cid:75)(cid:3)(cid:43)(cid:68)(cid:81)(cid:86)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:11)(cid:179)(cid:43)(cid:68)(cid:81)(cid:86)(cid:82)(cid:81)(cid:15)(cid:180)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:54)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:43)(cid:68)(cid:81)(cid:86)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:70)(cid:12)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)
and ultimately Director, President and Chief Executive Officer. Hanson and Millennium were both previous owners of the Partnership
or its predecessor through 1996 and 1999, respectively. He joined Hanson after spending six years as a Certified Public Accountant
and auditor at Price Waterhouse & Co., where he rose to the position of Senior Manager. Mr. Landuyt has previously served on the
Boards of Directors (including their Audit and Compensation Committees) of public companies, including Bethlehem Steel Corp.,
MxEnergy Holdings, Inc., a leading retail marketer of natural gas and electricity contracts, and Top Image Systems, Inc. Mr. Landuyt
is also the Co-Founder and Executive Director of Celtic Charms, Inc., a non-profit therapeutic horsemanship center serving people
with physical and cognitive disabilities and disorders.
(cid:48)(cid:85)(cid:17)(cid:3)(cid:47)(cid:68)(cid:81)(cid:71)(cid:88)(cid:92)(cid:87)(cid:182)(cid:86)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:76)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:92)(cid:3)(cid:92)(cid:72)(cid:68)rs of financial and executive management experience for both
public and private companies, including extensive experience with mergers and acquisitions and corporate governance. Additionally,
(cid:75)(cid:76)(cid:86)(cid:3)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:73)(cid:76)(cid:70)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:86)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)s predecessors, as well as his subsequent board-level involvement in the
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:83)(cid:72)(cid:87)(cid:85)(cid:82)(cid:70)(cid:75)(cid:72)(cid:80)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:38)(cid:75)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:75)(cid:82)(cid:88)(cid:86)(cid:72)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:74)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:47)(cid:68)(cid:81)(cid:71)(cid:88)(cid:92)(cid:87)(cid:3)extensive
expertise in areas directly relevant to the business of the Partnership.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our Supervisors, executive officers and holders of ten percent or more of our
Common Units to file initial reports of ownership and reports of changes in ownership of our Common Units with the SEC.
Supervisors, executive officers and ten percent Unitholders are required to furnish the Partnership with copies of all Section 16(a)
forms that they file. Based on a review of these filings, we believe that all such filings were timely made during fiscal year 2016.
Codes of Ethics and of Business Conduct
We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer and principal
accounting officer, and a Code of Business Conduct that applies to all of our employees, officers and Supervisors. A copy of our
Code of Ethics and our Code of Business Conduct is available without charge from our website at www.suburbanpropane.com or
upon written request directed to: Suburban Propane Partners, L.P., Investor Relations, P.O. Box 206, Whippany, New Jersey 07981-
0206. Any amendments to, or waivers from, provisions of our Code of Ethics or our Code of Business Conduct that apply to our
principal executive officer, principal financial officer and principal accounting officer will be posted on our website.
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines and Principles in accordance with the NYSE corporate governance listing
standards in effect as of the date of this Annual Report. In addition, we have adopted certain Corporate Governance Policies,
including an Equity Holding Policy for Supervisors and Executives and an Incentive Compensation Recoupment Policy. A copy of
our Corporate Governance Guidelines and Principles, as well as a copy of the Corporate Governance Policies, is available without
charge from our website at www.suburbanpropane.com or upon written request directed to: Suburban Propane Partners, L.P., Investor
Relations, P.O. Box 206, Whippany, New Jersey 07981-0206.
Audit Committee Charter
We have adopted a written Audit Committee Charter in accordance with the NYSE corporate governance listing standards in
effect as of the date of this Annual Report. The Audit Committee Charter is reviewed periodically to ensure that it meets all
applicable legal and NYSE listing requirements. A copy of our Audit Committee Charter is available without charge from our website
at www.suburbanpropane.com or upon written request directed to: Suburban Propane Partners, L.P., Investor Relations, P.O. Box
206, Whippany, New Jersey 07981-0206.
48
Compensation Committee Charter
Three Supervisors, who are not officers or employees of the Partnership or its subsidiaries, currently serve on the Compensation
Committee. The Board of Supervisors has determined that all three current members of the Compensation Committee, Matthew J.
Chanin, Harold R. Logan, Jr. and John Hoyt Stookey, are independent.
We have adopted a Compensation Committee Charter in accordance with the NYSE corporate governance listing standards in
effect as of the date of this Annual Report. A copy of our Compensation Committee Charter is available without charge from our
website at www.suburbanpropane.com or upon written request directed to: Suburban Propane Partners, L.P., Investor Relations, P.O.
Box 206, Whippany, New Jersey 07981-0206.
(cid:39)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:86)(cid:3)(cid:55)(cid:82)(cid:90)(cid:72)(cid:85)(cid:86)(cid:3)(cid:58)(cid:68)(cid:87)(cid:86)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:55)(cid:82)(cid:90)(cid:72)(cid:85)(cid:86)(cid:3)(cid:58)(cid:68)(cid:87)(cid:86)(cid:82)(cid:81)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:75)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3)
resources consulting firm, formerly known as Towers Watson & Co., to assist the Compensation Committee in developing
(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:70)(cid:78)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:54)(cid:72)(cid:72)(cid:3)(cid:44)(cid:87)(cid:72)(cid:80)(cid:3)(cid:20)(cid:20)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Nominating/Governance Committee Charter
The Nominating/Governance Committee participates in Board succession planning and development and identifies individuals
qualified to become Board members, recommends to the Board the persons to be nominated for election as Supervisors at any Tri-
Annual Meeting of the Unitholders and the persons (if any) to be elected by the Board to fill any vacancies on the Board, develops and
(cid:85)(cid:72)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3) (cid:42)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:42)(cid:88)(cid:76)(cid:71)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:79)(cid:72)(cid:86)(cid:3) (cid:90)(cid:75)(cid:72)(cid:81)(cid:3) (cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:83)(cid:85)(cid:76)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
oversees the annual evaluation (cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:43)(cid:68)(cid:85)(cid:82)(cid:79)(cid:71)(cid:3)(cid:53)(cid:17)(cid:3)(cid:47)(cid:82)(cid:74)(cid:68)(cid:81)(cid:15)(cid:3)(cid:45)(cid:85)(cid:17)(cid:3)(cid:11)(cid:76)(cid:87)(cid:86)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:12)(cid:15)(cid:3)(cid:47)(cid:68)(cid:90)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:38)(cid:17)(cid:3)
Caldwell, Matthew J. Chanin, John D. Collins, John Hoyt Stookey and Jane Swift, all of whom are independent in accordance with
our Corporate Governance Guidelines and Principles and the rules of the NYSE.
We have adopted a written Nominating/Governance Committee Charter. A copy of our Nominating/Governance Committee
Charter is available without charge from our website at www.suburbanpropane.com or upon written request directed to: Suburban
Propane Partners, L.P., Investor Relations, P.O. Box 206, Whippany, New Jersey 07981-0206.
NYSE Annual CEO Certification
The NYSE requires the Chief Executive Officer of each listed company to submit a certification indicating that the company is
not in violation of the Corporate Governance listing standards of the NYSE on an annual basis. Our Chief Executive Officer submits
his Annual CEO Certification to the NYSE each December. In December 2015, our Chief Executive Officer, Michael A. Stivala,
submitted his Annual CEO Certification to the NYSE without qualification.
49
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:3)(cid:11)(cid:179)(cid:38)(cid:39)(cid:9)(cid:36)(cid:180)(cid:12)(cid:3)(cid:72)(cid:91)(cid:83)(cid:79)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)ion philosophy, policies and practices
with respect to those executive officers of the Partnership identified below (cid:90)(cid:75)(cid:82)(cid:80)(cid:3) (cid:90)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3) (cid:179)(cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:180):
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Position
President and Chief Executive Officer
Chief Financial and Chief Accounting Officer
Senior Vice President (cid:177) Field Operations
Senior Vice President Product Supply, Purchasing and Logistics
Senior Vice President, General Counsel and Secretary
Former Chief Development Officer*
*
(cid:40)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:48)(cid:68)(cid:92)(cid:3) (cid:21)(cid:25)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:3) (cid:76)(cid:86)(cid:3) (cid:81)(cid:82)(cid:3) (cid:79)(cid:82)(cid:81)(cid:74)(cid:72)(cid:85)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:17)(cid:3) (cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:71)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:86)(cid:3) (cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)
severance arrangement with the Partnership, please refer to (cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:17)(cid:180)
Key Topics Covered in our CD&A
The following table summarizes the main areas of focus in the CD&A:
Compensation Governance
Participants in the Compensation Process
The Annual Compensation Decision Making Process
Risk Mitigation Policies
Executive Compensation Philosophy
Overview
Pay Mix
Components of Compensation
Base Salary
Annual Cash Bonus
Long-Term Incentive Plan
Restricted Unit Plan
Benefits and Perquisites
Compensation Governance
Participants in the Compensation Process
Role of the Compensation Committee
(cid:55)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:180)(cid:12)(cid:3) (cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:72)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
compensation program. In accordance with its charter, available on our website at www.suburbanpropane.com, the Committee
ensures that the compensation packages provided to our executive officers are designed in accordance with our compensation
philosophy. The Committee reviews and approves the compensation packages of our managing directors, assistant vice presidents,
vice presidents, senior vice presidents, and our named executive officers. The Committee establishes and enforces our general
compensation philosophy in consultation with our President and Chief Executive Officer.
Among other duties, the Committee has overall responsibility for:
(cid:120)
(cid:120)
(cid:120)
Reviewing and approving the compensation of our President and Chief Executive Officer, our Chief Financial Officer,
and our other executive officers;
Reporting to the Board of Supervisors any and all decisions regarding compensation changes for our President and Chief
Executive Officer and our other executive officers;
Evaluating and approving our annual cash bonus plan, Long-Term Incentive Plan, and grants under our Restricted Unit
Plan, as well as all other executive compensation policies and programs;
50
(cid:120)
(cid:120)
(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:83)(cid:85)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:87)(cid:72)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)
compensation packages; and
Engaging consultants, when appropriate, to provide independent, third-party advice on executive officer-related
compensation.
Role of the President and Chief Executive Officer
The role of our President and Chief Executive Officer in the executive compensation process is to recommend individual pay
adjustments(cid:15)(cid:3) (cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
packages of the executive officers, other than himself, to the Committee based on market conditions, (cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86) performance,
and individual performance. When recommending individual pay adjustments for the executive officers, Mr. Stivala, our President
(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)to the
mean compensation figures for comparable positions included in benchmarking data utilized by the Committee.
Role of Outside Consultants
Prior to each Committee meeting at which executive compensation packages are reviewed, members of the Committee are
(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:69)(cid:72)(cid:81)(cid:70)(cid:75)(cid:80)(cid:68)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3) (cid:71)(cid:68)(cid:87)(cid:68)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:48)(cid:72)(cid:85)(cid:70)(cid:72)(cid:85)(cid:3) (cid:43)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3) (cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:3) (cid:38)(cid:82)(cid:81)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:44)(cid:81)(cid:70)(cid:17)(cid:3) (cid:11)(cid:179)(cid:48)(cid:72)(cid:85)(cid:70)(cid:72)(cid:85)(cid:180)(cid:12)(cid:3) (cid:71)(cid:68)(cid:87)(cid:68)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:76)(cid:86)(cid:82)(cid:81)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3)
(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:86)(cid:82)(cid:79)(cid:72)(cid:3) (cid:88)(cid:86)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:48)(cid:72)(cid:85)(cid:70)(cid:72)(cid:85)(cid:3) (cid:71)(cid:68)(cid:87)(cid:68)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:86)(cid:87)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:182)(cid:3) (cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) base salaries and total direct
compensation to the data provided in the Mercer benchmarking database. The information provided by Mercer was derived from a
proprietary database maintained by Mercer and, as such, there was no formal consultancy role played by them. Therefore, prior to the
Comm(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:86)(cid:15)(cid:3)(cid:81)(cid:72)(cid:76)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:3)(cid:81)(cid:82)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:80)(cid:72)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)
Mercer.
In addition to using the benchmark data from the Mercer benchmarking database, the Committee has utilized, since fiscal 2013,
the services of Willis (cid:55)(cid:82)(cid:90)(cid:72)(cid:85)(cid:86)(cid:3)(cid:58)(cid:68)(cid:87)(cid:86)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:55)(cid:82)(cid:90)(cid:72)(cid:85)(cid:86)(cid:3)(cid:58)(cid:68)(cid:87)(cid:86)(cid:82)(cid:81)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:75)(cid:88)(cid:80)(cid:68)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:85)(cid:80), formerly known as Towers Watson &
Co. During fiscal 2013, Towers Watson reviewed our Long-Term Incentive and Restricted Unit Plans, which resulted in revisions to
our cash bonus plan and Long-term Incentive Plan, and an alteration of the vesting schedule of our Restricted Unit Plan. In fiscal
2014, Towers Watson provided the Committee with assistance in developing competitive compensation packages for those executive
officers identified by the Committee as our senior level executive officers (including all of our present named executive officers). The
recommendations that Towers Watson put forth to the Committee in 2014 were considered in the development of the respective fiscal
2015 compensation packages for each of our named executive officers. Similarly, in developing the fiscal 2016 compensation
packages for each of our named executive officers, the Committee again retained the services of Towers Watson to benchmark the
base salaries and total direct compensation of our executive officers compared to comparable positions, using market data for
similarly-sized companies which was developed by Towers Watson from multiple survey sources across several industries, inclusive
of other energy companies in the United States.
Our Unitholders: Say-on-Pay
At their 2015 Tri-Annual Meeting, our Unitholders overwhelmingly approved an advisory resolution approving executive
compensation (commonly referred to as (cid:179)(cid:54)(cid:68)(cid:92)-on-Pa(cid:92)(cid:180)). As a result, the Committee has determined that no major revisions of its
executive compensation practices are required. However, the Committee periodically evaluates its compensation practices for possible
improvement. The following represents the 2015 Say-on-Pay voting results:
For
28,802,659
Against
1,712,622
Abstain
613,603
Broker Non-Votes
22,303,948
The Annual Compensation Decision Making Process
Fiscal 2016 Committee Meetings
The Committee holds three regularly-scheduled meetings during the fiscal year: one in November, one in January and one in
July, and may meet at other times during the year as warranted. It finalized the fiscal year 2016 compensation packages for each of
our named executive officers at its November 10, 2015 meeting.
As in past fiscal years and as referred to above, the Committee was provided with a comprehensive analysis of each senior
(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:182)(cid:86)(cid:3)(cid:83)(cid:68)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)- including benchmarking data for comparison - to enable it to assess and determine each
51
executive(cid:182)(cid:86) compensation package for fiscal 2016. The Committee considered a number of factors in establishing the fiscal 2016
executive compensation packages, including, but not limited to, experience, scope of responsibility and individual performance.
The benchmarking data provided to the Committee for fiscal 2016 was derived from the Mercer database containing information
obtained from surveys of over 3,000 organizations and approximately 1,400 positions which may or may not include similarly-sized
national propane marketers for the reasons stated below. The use of the Mercer database provides a broad base of compensation
benchmarking information for companies of similar size to the Partnership.
Prior to making its decisions regarding (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86) fiscal 2016 compensation package, the Committee
reviewed the total cash compensation opportunity that was provided to each named executive officer during the previously completed
(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3) (cid:3) (cid:179)(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:3) (cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92), an annual cash bonus, and cash settled long-term
incentives. The Committee then compared (cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86) total cash compensation opportunity to the total mean cash
compensation opportunity for the parallel position in the Mercer database. In addition, the Committee retained the services of Towers
Watson to benchmark the base salaries and total direct compensation of our executive officers compared to comparable positions,
using market data for similarly-sized companies which was developed by Towers Watson from multiple survey sources across several
industries, inclusive of other energy companies in the United States. The Committee then based its final decisions on both the
recommendations made by Towers Watson and on the information contained in the Mercer benchmarking database.
Our Approach to Setting Compensation Packages
In reviewing and determining the compensation packages of our named executive officers, the Committee considers a number of
factors related to each executive, including, but not limited to, years of experience in current position, scope and level of
responsibility, influence over the affairs of the Partnership and individual performance. The relative importance assigned to each of
these factors by the Committee may differ from executive to executive and from year to year. As a result, different weights may be
given to different components of compensation among each of our named executive officers.
As previously stated, the Committee is provided with benchmarking data for comparison. This benchmarking data is just one of
a number of factors considered by the Committee, but is not necessarily the most persuasive factor. The Committee compares total
cash compensation opportunities, comprising base salary and annual cash bonuses, as well as total direct compensation (which
includes opportunities under our Long-Term Incentive Plan and Restricted Unit Plan awards) to the total mean cash compensation
opportunity and total direct compensation opportunity for the parallel position in the benchmark information reviewed.
Compensation Peer Group
The Committee bases its benchmarking on a broad base of companies of similar size to the Partnership, and does not rely solely
on a peer group of other propane marketers. The Committee takes this approach because it believes that the proximity of our
headquarters to New York City and the need to realistically compete for skilled executives in an environment shared by numerous
other enterprises seeking similarly skilled employees requires a broader review of the market. Furthermore, similarly-sized propane
marketers (of which there are only two) compete for executives in vastly different economic environments. The compensation
packages of the named executive officers of Ferrellgas Partners, L.P. and AmeriGas Partners, L.P. were included in the benchmarking
study provided by Towers Watson for fiscal 2016 and was reviewed by the Committee as part of its decision-making process. This
benchmarking approach has been in place for a number of years.
Risk Mitigation Policies
Equity Holding Policy
Effective April 22, 2010, the Committee adopted an Equity Holding Policy which establishes guidelines for the level of
Partnership equity holdings that members of the Board and our executive officers are expected to maintain. Effective November 11,
2015, the Committee approved an amendment to the Equity Holding Policy to increase the equity holding requirement for members of
our Board of Supervisors from two times their annual fees to three times their annual fees.
52
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:75)(cid:82)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)for the specified positions are currently as follows:
Position
Member of the Board of Supervisors
President and Chief Executive Officer
Chief Financial Officer
Senior Vice President
Vice President
Assistant Vice President
Managing Director
Amount
3 x Annual Fee
5 x Base Salary
3 x Base Salary
2.5 x Base Salary
1.5 x Base Salary
1 x Base Salary
1 x Base Salary
As of the January 2, 2016 measurement date, the amounts of units held by Mr. Stivala and by Mr. Kuglin were less than the
amount noted above for their respective positions. This was the first time since adoption of the Equity Holding Policy that any of our
executives held less than the applicable amount outlined in the policy. After a careful review of the circumstances, the Committee
concluded that these shortfalls were attributable to the precipitous decline in the trading price of our Common Units leading up to the
measurement date, similar to the trading performance of other master limited partnerships during that time. Later in 2016, the trading
price of our Common Units increased and these named executive officers returned to compliance with the Equity Holding Policy.
The Equity Holding Policy can be accessed through a link on our website at www.suburbanpropane.com (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:180)(cid:3)
tab.
Incentive Compensation Recoupment Policy
Upon recommendation by the Committee, on April 25, 2007, the Board of Supervisors adopted an Incentive Compensation
Recoupment Policy that permits the Committee to seek reimbursement from certain executives of the Partnership of incentive
compensation (i.e., payments made pursuant to the annual cash bonus plan and the Long-Term Incentive Plan) paid to those
executives in connection with any fiscal year for which there is a significant restatement of the published financial statements of the
Partnership triggered by a material accounting error, which results in less favorable results than those originally reported. Such
reimbursement can be sought from executives even if they were not personally responsible for the restatement. In addition to the
foregoing, if the Committee determines that any fraud or intentional misconduct by an executive was a contributing factor to the
Partnership having to make a significant restatement, then the Committee is authorized to take appropriate action against such
executive, including disciplinary action, up to, and including, termination, and requiring reimbursement of all, or any part, of the
(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:182)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:68)(cid:81)(cid:70)(cid:72)(cid:79)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)ted units.
The Incentive Compensation Recoupment Policy is available on our website at www.suburbanpropane.com under the
(cid:179)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:180)(cid:3)(cid:87)(cid:68)(cid:69)(cid:17)(cid:3)
Executive Compensation Philosophy
Overview
Our executive compensation program is underpinned by two core objectives:
(cid:120)
(cid:120)
To attract and retain talented executives who have the skills and experience required to achieve our goals; and
To align the short-term and long-term interests of our executive officers with those of our Unitholders.
We accomplish these objectives by providing our executives with compensation packages that combine various components,
specifically linked to either short-term or long-term performance measures, and that encourage equity ownership in the Partnership.
Therefore, our executive compensation packages are designed to achieve our overall goal of sustainable, profitable growth by
rewarding our executive officers for behaviors that facilitate our achievement of this goal.
53
The principal components of the compensation we provide to our named executive officers are as follows:
Component
Base Salary
Annual cash
incentive
Long-term
incentives
Restricted units
Purpose
Features
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:85)(cid:72)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79) performance,
experience and scope of responsibility
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)
practices
(cid:135)(cid:3)Drive and reward the delivery of
financial and operating performance
during a particular fiscal year
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:72)(cid:81)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:68)(cid:79)(cid:76)(cid:74)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)sts with the
long-term goals of Unitholders
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:85)(cid:72)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)
are conducive to sustainable, profitable
growth and long-term value creation
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:86)(cid:78)(cid:76)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:86)
(cid:135)(cid:3)(cid:53)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:76)(cid:83)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)
the vesting period
(cid:135)(cid:3)(cid:41)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:79)(cid:76)(cid:74)(cid:81) the long-term interests of
the recipient with the long-term interests
of our Unitholders through
encouragement of equity ownership
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:75)(cid:72)(cid:79)(cid:83)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:88)(cid:83)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:83)(cid:82)(cid:87)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)
shortfalls in total cash compensation of
our executive officers when compared
to benchmarked total cash compensation
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:71)(cid:72)(cid:84)(cid:88)(cid:68)(cid:87)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
package in connection with an
internal promotion
(cid:135)(cid:3)(cid:55)(cid:82)(cid:3)(cid:85)(cid:72)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)
(cid:135)(cid:3)(cid:53)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:79)(cid:92)
(cid:135)(cid:3)(cid:48)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:69)(cid:72)(cid:81)(cid:70)(cid:75)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:71)
(cid:135)(cid:3)(cid:48)(cid:72)(cid:68)(cid:81)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3)(cid:71)(cid:68)(cid:87)(cid:68)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)
determining levels
(cid:135)(cid:3)(cid:51)(cid:68)(cid:76)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)
(cid:135)(cid:3)(cid:37)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:86)(cid:82)(cid:79)(cid:72)(cid:79)(cid:92)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)
performance compared to budgeted
EBITDA
(cid:135)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:86)(cid:72)(cid:87)(cid:87)(cid:79)ed
in cash
(cid:135)(cid:3)(cid:48)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year period based
on the level of our average distributable
cash flow over such three-year
measurement period
(cid:135)(cid:3)(cid:49)(cid:82)(cid:3)(cid:83)(cid:85)(cid:72)-determined frequency or amounts
of awards
(cid:135)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:73)(cid:79)exibility
to respond to different facts and
circumstances
(cid:135)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:81)(cid:82)(cid:85)(cid:80)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:75)(cid:76)(cid:85)(cid:71)(cid:86)(cid:3)(cid:82)(cid:81)
the first three anniversaries of the
date of grant
(cid:135)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:72)(cid:87)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)
We align the short-term and long-term interests of our executive officers with the short-term and long-term interests of our
Unitholders by:
Providing our executive officers with an annual incentive target that encourages them to achieve or exceed targeted
financial results and operating performance for a particular fiscal year;
Providing a long-term incentive plan that encourages our executive officers to implement activities and practices
conducive to sustainable, profitable growth; and
Providing our executive officers with restricted units in order to encourage the retention of the participating executive
officers, while simultaneously encouraging behaviors conducive to the long-term appreciation of our Common Units.
(cid:120)
(cid:120)
(cid:120)
Pay Mix
(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:15)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:179)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:3) (cid:80)(cid:76)(cid:91)(cid:3) (cid:82)(cid:73)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:3)
salary, cash bonus and cash-settled long-(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)(cid:76)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:179)(cid:80)(cid:76)(cid:91)(cid:180)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)
executive officer is the only fixed component of compensation. All other cash compensation, including annual cash bonuses and long-
term incentive compensation, is variable in nature as it is dependent upon achievement of certain performance measures.
In allocating among these components, in order to align the interests of our senior executive officers - the executive officers
having the greatest ability to influence our performance - with the interests of our Unitholders, we consider it crucial to emphasize the
performance-based elements of the total compensation opportunities that we provide to them. Therefore, during fiscal 2016, the total
cash compensation opportunity for our senior executive officers, including our named executive officers, was at least 50%
performance-based under our annual cash bonus and long-term incentive plans, neither of which provide for minimum payments.
54
The following table summarizes each of these components as a (cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3)
compensation opportunity for fiscal 2016:
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Components of Compensation
Base Salary
Base Salary
40%
45%
45%
45%
47%
45%
Cash Bonus
Target
40%
36%
36%
36%
35%
36%
Long-Term
Incentive
20%
19%
19%
19%
18%
19%
The fiscal 2016 base salary adjustments for the named executive officers and all of our other executive officers were reviewed
and approved by the Committee. As was e(cid:91)(cid:83)(cid:79)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:55)(cid:75)(cid:72)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:72)(cid:70)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:48)(cid:68)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:15)(cid:180)(cid:3)
the Committee compared (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86) total cash compensation opportunity to the total mean cash compensation
opportunity for the parallel position in the Mercer benchmarking database. In addition, the Committee retained the services of Towers
Watson to benchmark the base salaries and total direct compensation of our executive officers compared to comparable positions,
using market data for similarly-sized companies which was developed by Towers Watson from multiple survey sources across several
industries, inclusive of other energy companies in the United States. The Committee then based its final decisions on both the
recommendations made by Towers Watson and on the information contained in the Mercer benchmarking database.
The following base salaries were in effect during fiscal 2016 and fiscal 2015 for our named executive officers:
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Fiscal 2016
Base Salary
500,000
310,000
330,000
310,000
300,000
335,000
$
$
$
$
$
$
Fiscal 2015
Base Salary
425,000
275,000
315,000
300,000
290,000
325,000
$
$
$
$
$
$
(cid:36)(cid:87)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:20)(cid:23)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:80)(cid:72)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:46)(cid:88)(cid:74)(cid:79)(cid:76)(cid:81)(cid:182)(cid:86)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:3) (cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3) (cid:87)(cid:82)(cid:3) (cid:7)(cid:22)(cid:22)(cid:19)(cid:15)(cid:19)(cid:19)(cid:19)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3)
performance throughout the year and to bridge a perceived shortfall between his former base salary and the benchmark salaries for
similar positions. The Committee did not make any other adjustments to the base salaries of our named executive officers.
The base salaries paid to our named executive officers in fiscal 2016, fiscal 2015 and fiscal 2014 are reported in the column
(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:54)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Annual Cash Bonus Plan
(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:88)(cid:86)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:11)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:73)(cid:68)(cid:79)(cid:79)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)
(cid:179)(cid:49)(cid:82)(cid:81)-(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)Compensation Table and otherwise) to provide a cash incentive award
to our executive officers for the attainment of EBITDA targets for the particular fiscal year, in accordance with the annual budget
approved by our Board of Supervisors at the beginning of the fiscal year.
Performance Condition
The sole metric measures Actual Plan EBITDA relative to Budgeted EBITDA.
Definitions
Actual EBITDA: represents net income before deducting interest expense, income taxes, depreciation and amortization.
55
Actual Plan EBITDA: represents Actual EBITDA adjusted for various items considered to be non-recurring in nature; including,
but not limited to, unrealized (non-cash) gains or losses on changes in the fair value of derivative instruments; gains or losses on sale
of business; acquisition and integration-related costs; multi-employer pension plan withdrawal charges; pension settlement charges;
and losses on debt extinguishment.
Budgeted EBITDA: represents our target budgeted EBITDA developed using a bottom-up process factoring in reasonable
(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3) (cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:86)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:182)(cid:86)(cid:3) (cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:68)(cid:80)(cid:72)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3) (cid:68)(cid:87)(cid:87)(cid:72)(cid:80)(cid:83)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:82)(cid:3) (cid:85)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:68)(cid:3) (cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:69)(cid:72)(cid:87)(cid:90)(cid:72)(cid:72)(cid:81)(cid:3) (cid:68)(cid:3) (cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) is
reasonably achievable, yet not assured.
The performance targets for our Annual Cash Bonus Plan for fiscal years subsequent to fiscal 2014 were established by the
Committee at its January 22, 2014 meeting, following a review of recommendations made by Towers Watson, which had been
engaged by the Committee for that purpose. For fiscal 2016 and fiscal 2015, our named executive officers had the opportunity to earn
between 50% and 120% of their target cash bonuses, and for fiscal years prior to fiscal 2015, our named executive officers had the
opportunity to earn between 60% and 120% of their target cash bonuses, depending upon the relationship of our Actual Plan EBITDA
compared to Budgeted EBITDA in accordance with the following tables:
Fiscal 2016 and Fiscal 2015
Actual EBITDA as a
% of budgeted
EBITDA
% of Target Cash
Bonus Earned
Fiscal 2014
Actual EBITDA as a
% of budgeted
EBITDA
% of Target Cash
Bonus Earned
Maximum 120% and above
119%
118%
117%
116%
115%
114%
113%
112%
111%
110%
109%
108%
107%
106%
105%
104%
103%
102%
101%
100%
99%
98%
97%
96%
95%
94%
93%
92%
91%
90%
Below 90%
Target
Entry
Maximum 120% and above
119%
118%
117%
116%
115%
114%
113%
112%
111%
110%
109%
108%
107%
106%
105%
104%
103%
102%
101%
100%
99%
98%
97%
96%
95%
94%
93%
92%
91%
90%
89%
88%
87%
86%
85%
Below 85%
Target
Entry
120%
119%
118%
117%
116%
115%
114%
113%
112%
111%
110%
109%
108%
107%
106%
105%
104%
103%
102%
101%
100%
98%
96%
94%
92%
90%
85%
82.5%
80%
77.5%
75%
70%
65%
60%
55%
50%
0%
56
120%
119%
118%
117%
116%
115%
114%
113%
112%
111%
110%
109%
108%
107%
106%
105%
104%
103%
102%
101%
100%
98%
96%
94%
92%
90%
68%
66%
64%
62%
60%
0%
The Committee made this change to the performance targets of our Annual Cash Bonus Plan based upon Towers (cid:58)(cid:68)(cid:87)(cid:86)(cid:82)(cid:81)(cid:182)(cid:86)(cid:3)
benchmark study performed in fiscal 2016, which indicated that the entry point utilized in our plan was higher than those of similar
plans utilized by comparable companies.
Fiscal 2016 Annual Cash Bonus
For fiscal 2016, our Budgeted EBITDA was $350.0 million. Our Actual Plan EBITDA was such that each of our executive
officers earned 0% of his or her target cash bonus. During the previous two fiscal years, our Actual Plan EBITDA was such that each
of our named executive officers earned 90% and 68% of their target cash bonus for fiscal 2015 and fiscal 2014, respectively.
The fiscal 2016 target cash bonuses established for each named executive officer and the actual cash bonuses earned by each of
them during fiscal 2016 are summarized as follows:
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Fiscal 2016
Target Cash
Bonus as a
Percentage of
Base Salary
100%
80%
80%
80%
75%
80%
Fiscal 2016
Target Cash
Bonus
500,000
248,000
264,000
248,000
225,000
268,000
$
$
$
$
$
$
Fiscal 2016
Actual Cash
Bonus Earned at
0%
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
$
$
$
$
$
$
The Use of Discretion
Although our Annual Cash Bonus Plan is generally administered in accordance with the provisions of the plan, the Committee
may exercise its broad discretionary powers, expressly provided for in the plan, to decrease or increase the annual cash bonus paid to a
particular executive officer, upon the recommendation of our President and Chief Executive Officer, or to the executive officers as a
group, when the Committee determines that an adjustment is warranted. In each of fiscal 2016, fiscal 2015 and fiscal 2014, no such
discretionary adjustments were made to the annual cash bonuses earned by our named executive officers.
At its meeting of November 14, 2016, the Committee approved the following fiscal 2017 target cash bonuses:
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Fiscal 2017 Target
Cash Bonus as a
Percentage of Base
Salary
100%
80%
80%
80%
75%
Fiscal 2017 Target
Cash Bonus
500,000
264,000
264,000
248,000
225,000
$
$
$
$
$
The bonuses earned by our named executive officers under the annual cash bonus plan for fiscal 2016, fiscal 2015 and fiscal
2014 are reported in the column titled (cid:179)(cid:49)(cid:82)(cid:81)-(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)(cid:3)
Long-Term Incentive Plan
To complement the Annual Cash Bonus Plan, which focuses on our short-term financial goals, the Long-Term Incentive Plan,
which we hereafter refer t(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:47)(cid:55)(cid:44)(cid:51)(cid:15)(cid:180)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:82)(cid:87)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
long-term financial goals.
Performance Condition
Under the LTIP, performance is assessed based on the level of our distribution coverage ratio over a three-year measurement
(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:11)(cid:179)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:53)(cid:68)(cid:87)(cid:76)(cid:82)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:11)(cid:68)(cid:86)(cid:3)(cid:86)(cid:75)(cid:82)(cid:90)(cid:81)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:12)(cid:3)(cid:69)(cid:92)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:36)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72) Cash
57
(cid:41)(cid:79)(cid:82)(cid:90)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period by a Baseline Cash Flow set on the initial grant date of
(cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:47)(cid:55)(cid:44)(cid:51)(cid:3) (cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3) (cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3)
distributions, and demonstrate distribution growth, is essential to successfully attracting and retaining investors, making it an
important long-term performance metric.
Average Distributable Cash Flow
(Average Actual Plan EBITDA less capital expenditures, cash interest expense and other adjustments)
Baseline Cash Flow
(Total # of Common Units outstanding at beginning of the three-year measurement period times the then annualized
distribution rate)
Definitions
Distributable Cash Flow: represents Actual Plan EBITDA for a particular fiscal year less capital expenditures, cash interest
expense, and the provision for income taxes for the same fiscal year.
Actual Plan EBITDA: represents the same definition as Actual Plan EBITDA under the Annual Cash Bonus Plan. Actual
EBITDA is adjusted for various items considered to be non-recurring in nature, including, but not limited to, unrealized (non-cash)
gains or losses on changes in the fair value of derivative instruments; gains or losses on sale of business; acquisition and integration-
related costs; multi-employer pension plan withdrawal charges; pension settlement charges; and losses on debt extinguishment.
Average Distributable Cash Flow: represents average distributable cash flow for each of the three years in a particular award(cid:182)(cid:86)(cid:3)
three-year measurement period, plus the product of the number of Common Units outstanding at the beginning of the three-year
measurement period and the annual differences between the per Common Unit annualized distribution rate at the beginning of the
three-year measurement period and the actual per Common Unit distributions paid during each of those three years.
Baseline Cash Flow: represents the total number of Common Units outstanding at the beginning of the three-year measurement
period multiplied by the then per Common Unit annualized distribution rate.
The following table summarizes the performance targets and associated level of vesting that applies to awards made under the
LTIP prior to November 14, 2016 based on the achievement level of the Distribution Coverage Ratio:
Distribution Coverage Ratio
1.50 or higher (Maximum)
1.20 (Target)
1.00 (Entry)
Less than 1.00
% of Award Earned
150%
100%
50%
0%
58
Between entry and target performance, for every additional 0.01 increase in the Distribution Coverage Ratio, an additional 2.5%
of the award is earned. Between target and maximum performance, awards are earned according to the following schedule:
Distribution Coverage Ratio
1.50 or higher
1.49
1.48
1.47
1.46
1.45
1.44
1.43
1.42
1.41
1.40
1.39
1.38
1.37
1.36
1.35
% of Award Earned
150.0%
148.4%
146.8%
145.1%
143.4%
141.8%
140.1%
138.4%
136.7%
135.1%
133.4%
131.7%
130.1%
128.4%
126.7%
125.1%
Distribution Coverage Ratio
1.34
1.33
1.32
1.31
1.30
1.29
1.28
1.27
1.26
1.25
1.24
1.23
1.22
1.21
1.20
% of Award Earned
123.4%
121.7%
120.0%
118.4%
116.7%
115.0%
113.4%
111.7%
110.0%
108.4%
106.7%
105.0%
103.3%
101.7%
100.0%
At its meeting on November 14, 2016, the Committee amended the LTIP to revise the performance targets and associated level
of vesting that applies to awards made under the LTIP on or after September 25, 2016. The following table summarizes the
performance targets and associated level of vesting, based on the achievement level of the Distribution Coverage Ratio:
Distribution Coverage Ratio
1.25 or higher (Maximum)
1.10 (Target)
1.00 (Entry)
Less than 1.00
% of Award Earned
150%
100%
50%
0%
As a result of this amendment, between entry and target performance, for every additional 0.01 increase in the Distribution
Coverage Ratio, an additional 5% of the award will be earned. Between target and maximum performance, awards will be earned
according to the following schedule:
Distribution Coverage Ratio
1.25 or higher
1.24
1.23
1.22
1.21
1.20
1.19
1.18
1.17
1.16
1.15
1.14
1.13
1.12
1.11
1.10
% of Award Earned
150.0%
146.7%
143.3%
140.0%
136.7%
133.3%
130.0%
126.7%
123.3%
120.0%
116.7%
113.3%
110.0%
106.7%
103.3%
100.0%
This amendment to the LTIP did not lower the minimum required Distribution Coverage Ratio for participants to earn an entry-
(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:70)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)-level and maximum-level award thresholds was intended to strike a better
balance between an award that is reasonably achievable, yet not assured.
59
In addition, an amendment to the existing LTIP document was approved in order to properly reflect the original intent of the
(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:79)(cid:68)(cid:81)(cid:74)(cid:88)(cid:68)(cid:74)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:79)(cid:82)(cid:81)(cid:74)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:76)(cid:81)(cid:70)(cid:72)(cid:81)tive plans to provide for a payout of the
maximum threshold amount upon a change of control. When the current LTIP was adopted effective 2014, the maximum payout
opportunity for participants under the LTIP was increased from 125% to 150%, but this increase was inadvertently not reflected in the
change of control provision of the LTIP. This amendment aligns the change of control language to coincide with the current
maximum threshold.
Grant Process
At the beginning of each fiscal year, LTIP unit awards are granted as a Committee-approved percentage of each executive
(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period, the number of
(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:76)(cid:86) calculated by dividing his target LTIP amount (representing 50% of
(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:69)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:12)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:79)(cid:82)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)on
Units for the twenty days preceding the beginning of the three-year measurement period.
Cash Payments
For awards granted under the LTIP, our executive officers, as well as the other LTIP participants (all of whom are key
employees), will, at the end of the three-year measurement period, receive cash payments equal to:
(cid:120)
(cid:120)
(cid:120)
(cid:55)(cid:75)(cid:72)(cid:3)(cid:84)(cid:88)(cid:68)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:76)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:79)(cid:82)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
the twenty days preceding the conclusion of the three-year measurement period;
(cid:55)(cid:75)(cid:72)(cid:3)(cid:84)(cid:88)(cid:68)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)phantom units multiplied by the sum of the distributions that would have inured to one of
our outstanding Common Units during the three-year measurement period; and
The sum of the products of the two preceding calculations multiplied by the applicable percentage corresponding to the
Distribution Coverage Ratio illustrated in the applicable preceding table (based on the fiscal year for which the award was
granted).
The grant date values based on the target outcomes of the awards under the LTIP granted during fiscal 2016, fiscal 2015 and
(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)(cid:3)(cid:3)
Outstanding Awards under the LTIP
The following are the quantities of unvested LTIP phantom units granted to our named executive officers during fiscal 2016 and
fiscal 2015 (cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period (i.e., at
the end of fiscal 2018 for the fiscal 2016 awards and at the end of fiscal 2017 for the fiscal 2015 awards):
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Fiscal 2016 Award
7,095
3,519
3,746
3,519
3,193
3,803
Fiscal 2015 Award
4,770
2,315
2,828
2,694
2,441
2,918
At its meeting on November 14, 2016, the Committee granted the following quantities of unvested LTIP phantom units to our
named executive officers for fiscal 2017. These quantities will be used to calculate cash payments, if earned, at the end of this
(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period (i.e., at the end of fiscal 2019).
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Fiscal 2017 Award
7,559
3,991
3,991
3,749
3,402
60
Vesting of the LTIP Awards
The three-year measurement period of the fiscal 2014 award ended simultaneously with the conclusion of fiscal 2016. The
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:38)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:53)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3) (cid:90)(cid:68)(cid:86)(cid:3) below the entry threshold for the three-year measurement period. As such, no
payments were earned relative to the fiscal 2014 awards.
Retirement Provision
The retirement provision applies to all LTIP participants who have been employed by the Partnership for ten years and have
attained age 55. A retirement-(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)-eligible date, but
will remain subject to the same three-year measurement period for purposes of determining the eventual cash payment, if any, at the
conclusion of the remaining measurement period. Mr. Abel is our only named executive officer to whom this retirement provision
applied at the end of fiscal 2016. As of the date of this filing, the retirement provision also applies to Mr. Brinkworth.
Restricted Unit Plan
At our July 22, 2009 Tri-(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:48)(cid:72)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3) (cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:21)(cid:19)(cid:19)(cid:28)(cid:3) (cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:11)(cid:179)(cid:53)(cid:56)(cid:51)(cid:180)(cid:12)(cid:3)
effective August 1, 2009. Upon adoption, this plan authorized the issuance of 1,200,000 Common Units to our executive officers,
managers, other employees and to the members of our Board of Supervisors. On May 13, 2015, following approval by our
Unitholders at their 2015 Tri-Annual Meeting, we adopted an amendment to this plan which increased the number of Common Units
authorized for issuance under this plan by 1,200,000 for a total of 2,400,000. At the conclusion of fiscal 2016, there remained
1,177,401 restricted units available under the RUP for future awards.
When the Committee authorizes an award of restricted units, the unvested units underlying an award do not provide the grantee
with voting rights and do not receive distributions or accrue rights to distributions during the vesting period.
Grant Process
All RUP awards are approved by the Committee. Because individual circumstances differ, the Committee has not adopted a
formulaic approach to making RUP awards. Although the reasons for granting an award can vary, the general objective of granting an
award to a recipient is to retain the services of the recipient over the vesting period while, at the same time, providing the type of
motivation that further aligns the long-term interests of the recipient with the long-term interests of our Unitholders. The reasons for
which the Committee grants RUP awards include, but are not limited to, the following:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
To attract skilled and capable candidates to fill vacant positions;
To retain the services of an employee;
To provide an adequate compensation package to accompany an internal promotion; and
To reward outstanding performance.
In determining the quantity of restricted units to grant to executive officers and other key employees, the Committee considers,
without limitation:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:55)(cid:75)(cid:72)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:82)(cid:85)(cid:3) (cid:78)(cid:72)(cid:92)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:86)(cid:70)(cid:82)(cid:83)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:15)(cid:3) (cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)mance and contribution to meeting our
objectives;
The total cash compensation opportunity provided to the executive officer or key employee for whom the award is being
considered;
The value of similar equity awards to executive officers of similarly sized companies; and
The current value of an equivalent quantity of outstanding Common Units.
In addition, in establishing the level of restricted units to grant to our executive officers, the Committee considers the existing
level of outstanding unvested RUP awards held by our executive officers.
The Committee generally approves awards under the RUP at its first meeting each fiscal year following the availability of the
financial results for the prior fiscal year; however, occasionally the Committee grants awards at other times of the year, particularly
when the need arises to grant awards because of promotions and new hires.
61
Upon vesting, restricted units are automatically converted into our Common Units, with full voting rights and rights to receive
distributions.
Vesting Schedule
Restricted unit awards granted prior to August 6, 2013 vest as follows: 25% on each of the third and fourth anniversaries of the
grant date and the remaining 50% on the fifth anniversary of the grant date.
At its August 6, 2013 meeting, after its review of recommendations made by Towers Watson, the Committee amended the RUP
to revise the standard vesting schedule of awards granted thereafter to one third on each of the first three anniversaries of the award
grant date. The Committee retains the ability to deviate, at its discretion, from the normal vesting schedule with respect to particular
restricted unit awards. The Committee amended the plan in order to make its vesting schedule comparable to those of similar plans
offered by other companies. Unvested awards are subject to forfeiture in certain circumstances, as defined in the RUP.
Outstanding Awards under the RUP
At its November 10, 2015 meeting, in order to continue to further align the interests of our named executive officers with those
of our Unitholders, the Committee approved a grant of 18,277 restricted units to Mr. Stivala and grants of 8,773 restricted units to
each of the other named executive officers. In determining these fiscal 2016 awards for our named executive officers, the Committee
relied upon information provided by the Mercer database to conclude that these awards were necessary to remediate shortfalls
perceived by the Committee in the cash compensation opportunities provided by the Partnership to these executives, as well as in
recognition of their individual achievements throughout fiscal 2015. The Committee uses RUP awards to satisfy a perceived need to
balance cash compensation with equity (or non-cash) compensation, and to encourage our named executive officers, and other key
employees, to have a stake in the Partnership, thereby further aligning the economic interests of our named executive officers with the
economic interests of our Common Unitholders.
The following table summarizes the RUP awa(cid:85)(cid:71)(cid:86)(cid:3) (cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:20)(cid:19)(cid:15)(cid:3)
2015 meeting:
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Grant Date
November 15, 2015
November 15, 2015
November 15, 2015
November 15, 2015
November 15, 2015
November 15, 2015
Quantity
18,277
8,773
8,773
8,773
8,773
8,773*
* Mr. Wienberg was granted 8,773 units at this meeting; however, as a result of his departure from the Partnership, 2,669
units of this award were forfeited.
The aggregate grant date fair values of RUP awards made during fiscal 2016, fiscal 2015 and fiscal 2014, computed in
accordance with accounting principles generally accepted in the United States of America, (cid:68)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3) (cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3) (cid:179)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)
(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)(cid:3)
Retirement Provision
The RUP contains a retirement provision that provides for the vesting (six months and one day after the retirement date of
qualifying participants) of unvested awards held by a retiring participant who meets all three of the following conditions on his or her
retirement date:
(cid:120)
(cid:120)
(cid:120)
The unvested award has been held by the grantee for at least six months;
The grantee is age 55 or older; and
The grantee has worked for us or one of our predecessors for at least 10 years.
Mr. Abel is our only named executive officer to whom this retirement provision applied at the end of fiscal 2016. As of the date
of this filing, this retirement provision also applies to Mr. Brinkworth. As a result of the severance agreement between Mr. Wienberg
62
and the Partnership, we agreed to treat Mr. Wienberg as if on May 26, 2016, he met the criteria of the retirement provision for 16,721
of his 24,032 then outstanding unvested restricted units.
***
At its November 14, 2016 meeting, the Committee granted the following RUP awards to our named executive officers:
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Grant Date
November 15, 2016
November 15, 2016
November 15, 2016
November 15, 2016
November 15, 2016
Quantity
31,864
20,075
15,932
15,932
15,932
The Committee granted these awards in order to further align the economic interests of named executive officers with the
economic interests our Common Unitholders.
Benefits and Perquisites
Pension Plan
We sponsor a noncontributory defined benefit pension plan that was originally designed to cover all of our eligible employees
who met certain criteria relative to age and length of service. Effective January 1, 1998, we amended the plan in order to provide for a
cash balance format rather than the final average pay format that was in effect prior to January 1, 1998 (cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:12).
(cid:55)(cid:75)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:89)(cid:72)(cid:81)(cid:79)(cid:92)(cid:3) (cid:86)(cid:83)(cid:85)(cid:72)(cid:68)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:72)(cid:68)(cid:85)(cid:81)(cid:72)(cid:71)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:82)(cid:88)(cid:87)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:82)r her
(cid:70)(cid:68)(cid:85)(cid:72)(cid:72)(cid:85)(cid:3)(cid:85)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:79)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:15)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:90)ere earned toward the latter
stages of his or her career. Effective January 1, 2000, we amended the plan to limit participation in this plan to existing participants
and no longer admit new participants to the plan. On January 1, 2003, we amended the plan to cease future service and pay-based
(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:69)(cid:72)(cid:75)(cid:68)(cid:79)(cid:73)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:83)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:82)(cid:81)(cid:15)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:79)(cid:92)(cid:3) because of interest credits. Of
our named executive officers, only Mr. Boyd and Mr. Brinkworth participate in the plan.
The changes in the actuarial value relative to (cid:48)(cid:85)(cid:17)(cid:3) (cid:37)(cid:82)(cid:92)(cid:71)(cid:182)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:37)(cid:85)(cid:76)(cid:81)(cid:78)(cid:90)(cid:82)(cid:85)(cid:87)(cid:75)(cid:182)(cid:86) participation in the plan during fiscal 2016,
fiscal 2015 and fiscal 2014 (cid:68)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3) (cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3) (cid:179)(cid:38)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:57)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:49)(cid:82)(cid:81)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3) (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)sation
(cid:40)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Deferred Compensation
All employees, including the named executive officers, who satisfy certain service requirements, are eligible to participate in our
IRC Section 401(k) Plan, which we refer to (cid:68)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:23)(cid:19)(cid:20)(cid:11)(cid:78)(cid:12)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:180)(cid:3) (cid:76)(cid:81)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3) (cid:80)(cid:68)(cid:92)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3) (cid:68)(cid:3) (cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3) (cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3)
compensation up to the limits established by law. We offer the 401(k) Plan to attract and retain talented employees by providing them
with a tax-advantaged opportunity to save for retirement.
For fiscal 2016, all of our named executive officers participated in the 401(k) Plan. The benefits provided to our named
executive officers under the 401(k) Plan are provided on the same basis as to other exempt employees of the Partnership. Amounts
deferred by our named executive officers under the 401(k) Plan during fiscal 2016, fiscal 2015 and fiscal 2014 are included in the
(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:54)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
In order to be competitive with other employers, if certain performance criteria are met, we will match our employee-
(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:88)(cid:83)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:25)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:7)(cid:21)(cid:25)(cid:24)(cid:15)(cid:19)(cid:19)(cid:19)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)nce-based
scale. The following chart shows the performance target criteria that must be met for each level of matching contribution:
If We Meet This Percentage of Budgeted EBITDA (a)
115% or higher
100% to 114%
90% to 99%
Less than 90%
The Participating Employee Will Receive this Matching
Contribution for the Year
100%
50%
25%
0%
(a)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:23)(cid:19)(cid:20)(cid:11)(cid:78)(cid:12)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)(cid:179)(cid:37)(cid:88)(cid:71)(cid:74)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)(cid:3)(cid:76)(cid:86)(cid:3)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:179)(cid:37)(cid:88)(cid:71)(cid:74)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:3)(cid:179)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:17)
63
Actual Plan EBITDA, when applied to the 401(k) Plan, was such that matching contributions were not earned for calendar year
2016; however, the Committee exercised its discretionary authority to provide participants, including our named executive officers,
with matching contributions equal to 25% of their calendar year 2016 contributions that do not exceed 6% of their total base pay, up to
a maximum annual compensation limit of $265,000.
The matching contributions made on behalf of our named executive officers for (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3) (cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3) (cid:179)(cid:36)(cid:79)(cid:79)(cid:3)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Other Benefits
Each named executive officer is eligible to participate in all of our other employee benefit plans, such as the medical, dental,
group life insurance and disability plans, on the same basis as other exempt employees. These benefit plans are offered to attract and
retain talented employees by providing them with competitive benefits.
There are no post-termination or other special rights provided to any named executive officer to participate in these benefit
programs other than the right to participate in such plans for a fixed period of time following termination of employment, on the same
basis as is provided to other exempt employees, as required by law.
The costs of all such benefits incurred on behalf of our named executive officers in fiscal 2016, fiscal 2015 and fiscal 2014 are
(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:36)(cid:79)(cid:79)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Perquisites
(cid:51)(cid:72)(cid:85)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:72)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3) (cid:68)(cid:3) (cid:80)(cid:76)(cid:81)(cid:82)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3) (cid:3) (cid:40)(cid:68)(cid:70)(cid:75)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3) (cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:3) (cid:76)(cid:86)(cid:3)
eligible for tax preparation services, a company-provided vehicle, and an annual physical.
The following table summarizes both the value and the utilization of these perquisites by the named executive officers in fiscal
2016.
Name
Tax Preparation
Services
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
$
$
$
$
$
$
Employer
Provided Vehicle
15,234
12,046
7,609
11,157
15,640
11,072
(cid:178) $
(cid:178) $
$
$
(cid:178) $
(cid:178) $
3,500
3,500
Physical
2,950
2,950
(cid:178)
1,600
1,600
2,950
$
$
$
$
$
$
Perquisite-related costs for fiscal 2016, fiscal 2015 and fiscal 2014 (cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:36)(cid:79)(cid:79)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)
in the Summary Compensation Table below.
Severance Benefits
We believe that, in most cases, employees should be paid reasonable severance benefits. Therefore, it is the general policy of
the Partnership to provide named executive officers who are terminated by us without cause or who choose to terminate their
(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:88)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:68)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:3)(cid:80)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:15)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:182)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)lary, unless circumstances
dictate otherwise. This policy was adopted because it may be difficult for former named executive officers to find comparable
employment within a short period of time. However, depending upon individual facts and circumstances, particularly the severed
(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:87)(cid:72)(cid:81)(cid:88)(cid:85)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:88)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:92)(cid:17)
Mr. Wienberg is our only named executive officer who entered into a severance agreement with us during fiscal 2016. This
(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:15)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:81)(cid:74)(cid:86)(cid:15)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72) of all
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(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:23)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:15)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:68)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:3)(cid:86)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:81)(cid:82)r
solicit the employment of any Partnership employee:
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In periodic payments to be made through November 24, 2017, Mr. Wienberg will receive severance aggregating $502,500
(cid:11)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:76)(cid:74)(cid:75)(cid:87)(cid:72)(cid:72)(cid:81)(cid:3)(cid:11)(cid:20)(cid:27)(cid:12)(cid:3)(cid:80)(cid:82)(cid:81)(cid:87)(cid:75)(cid:86)(cid:182)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:12)(cid:15)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:75)(cid:82)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:30)(cid:3)
(cid:50)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:68)(cid:69)(cid:82)(cid:88)(cid:87)(cid:3)(cid:49)(cid:82)(cid:89)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:26)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:20)(cid:25)(cid:15)(cid:26)(cid:21)(cid:20)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:19)(cid:28)(cid:3)
RUP prior to his departure will vest;
64
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(cid:120)
(cid:120)
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(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:92)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)er that plan
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Wienberg in the full, non-pro-rated amount (less applicable withholdings) with respect to each such award that he would
have been entitled to had he remained employed with the Partnership at those times (no such payment was due to Mr.
(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:12)(cid:30)(cid:3)
(cid:44)(cid:73)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:81)(cid:79)(cid:92)(cid:3)(cid:76)(cid:73)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)
Plan qualify under the terms of that plan for a cash payment with respect to that fiscal year, then the Partnership will make
a cash payment to Mr. Wienberg in the full, non-pro-rated amount (less applicable withholdings) that he would have been
entitled to had he remained employed with the Partnership at the end of that fiscal year (no payment was due to Mr.
Wienberg under this provision);
If and only if there is a change of control of the Partnership within the six-month period immediately following May 25,
(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:26)(cid:15)(cid:22)(cid:20)(cid:20)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:73)(cid:72)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:76)(cid:80)(cid:80)(cid:72)(cid:71)(cid:76)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)
vest and be delivered to Mr. Wienberg, pursuant to the provisions of the plan (no such change of control occurred during
that six-month period);
The Partnership will continue to pay, under COBRA, applicable premiums for health insurance benefits for Mr. Wienberg
for 18 months following May 25, 2016, or until Mr. Wienberg earlier obtains health insurance benefits under another plan;
The Partnership will pay for executive outplacement services for Mr. Wienberg (value: $20,000);
The Partnership transferred to Mr. Wienberg his company car (value: $37,000); and
(cid:36)(cid:87)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:72)(cid:86)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3)(cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:76)(cid:80)(cid:3)
to purchase propane at a discounted price (the value thereof cannot be calculated).
Change of Control
Our executive officers and other key employees have built the Partnership into the successful enterprise that it is today;
therefore, we believe that it is important to protect them in the event of a change of control. Further, it is our belief that the interests of
our Unitholders will be best served if the interests of our executive officers are aligned with them, and that providing change of
control benefits should eliminate, or at least reduce, the reluctance of our executive officers to pursue potential change of control
transactions that may be in the best interests of our Unitholders. Additionally, we believe that the severance benefits provided to our
executive officers and to our key employees are consistent with market practice and appropriate both because these benefits are an
inducement to accepting employment and because the executive officers are subject to non-competition and non-solicitation covenants
for a period following termination of employment. Therefore, our executive officers and other key employees are provided with
severance protection following (cid:68)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:90)(cid:72)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81).(cid:180) During fiscal 2016, our
Severance Protection Plan covered all of our executive officers, including our named executive officers.
The Severance Protection Plan provides for severance payments of either 65 or 78 weeks of base salary and target cash bonuses
for such officers and key employees if within one year following a change of control their employment is terminated by us or our
successor or they resign for Good Reason (as defined in the Severance Protection Plan). All of our named executive officers are
eligible for 78 weeks of base salary and target bonuses. The cash components of any change of control benefits are paid in a lump
sum.
In addition, upon a change of control, with(cid:82)(cid:88)(cid:87)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:90)(cid:75)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)
granted under the RUP will vest immediately and become distributable to the participants. Also, without regard to whether a
(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:88)(cid:87)standing, unvested LTIP awards will vest immediately as if the three-year measurement
period for each outstanding award concluded on the date the change of control occurred. Under the provisions of the LTIP document
operative at the conclusion of fiscal 2(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:20)(cid:21)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:15)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:68)(cid:3)
(cid:86)(cid:88)(cid:80)(cid:3) (cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:3) (cid:20)(cid:21)(cid:24)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3) (cid:47)(cid:55)(cid:44)(cid:51)(cid:3) (cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3) (cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:76)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:68)(cid:81)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:88)(cid:80)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3) (cid:83)(cid:72)(cid:85)-Common Unit
distribution from the beginning of an un(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period through the date on which a change of control
occurred, would become payable to the participants. As a result of an amendment approved at the November 14, 2016 Compensation
Committee meeting, this percentage was changed to 150%.
For purposes of these benefits, a change of control is deemed to occur, in general, if:
(cid:120)
An acquisition of our Common Units or voting equity interests by any person immediately after which such person
beneficially owns more than 30% of the combined voting power of our then outstanding Common Units, unless such
acquisition was made by (a) us or our subsidiaries, or any employee benefit plan maintained by us, the Operating
65
Partnership or any of our subsidiaries, or (b) any person in a transaction where (A) the existing holders prior to the
transaction own at least 50% of the voting power of the entity surviving the transaction and (B) none of the Unitholders
other than the Partnership, our subsidiaries, any employee benefit plan maintained by us, the Operating Partnership, or the
surviving entity, or the existing beneficial owner of more than 25% of the outstanding Common Units owns more than
(cid:21)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:69)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:89)(cid:82)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:72)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:179)(cid:49)(cid:82)(cid:81)-Cont(cid:85)(cid:82)(cid:79)(cid:3)(cid:55)(cid:85)(cid:68)(cid:81)(cid:86)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:30)(cid:3)
or
(cid:120)
The consummation of (a) a merger, consolidation or reorganization involving the Partnership other than a Non-Control
Transaction; (b) a complete liquidation or dissolution of the Partnership; or (c) the sale or other disposition of 40% or
more of the gross fair market value of all the assets of the Partnership to any person (other than a transfer to a subsidiary).
For additional information pertaining to severance payable to our named executive officers following a change of control-related
(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:86)(cid:72)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:51)(cid:82)(cid:87)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:51)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:56)(cid:83)(cid:82)(cid:81)(cid:3)(cid:55)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)(cid:69)(cid:72)(cid:79)(cid:82)(cid:90)(cid:17)
Additional Information
Impact of Accounting and Tax Treatments of Executive Compensation
As we are a partnership and not a corporation for federal income tax purposes, we are not subject to the limitations of IRC
Section 162(m) with respect to tax deductible executive compensation. Accordingly, none of the compensation paid to our named
executive officers is subject to a limitation as to tax deductibility. However, if such tax laws related to executive compensation
change in the future, the Committee will consider the implication of such changes to us.
Although it is our practice to comply with the statutory and regulatory provisions of IRC Section 409A, the Suburban Propane,
(cid:47)(cid:17)(cid:51)(cid:17)(cid:3) (cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:46)(cid:72)(cid:92)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:90)(cid:72)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) Protection (cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:180)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:76)(cid:73)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3)
payment under the Severance Protection Plan subjects a participant to the 20% additional tax under IRC Section 409A, the payment
will be grossed up to permit such participant to retain a net amount on an after-tax basis equal to what he or she would have received
had the additional tax not been payable.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed with management this Compensation Discussion and Analysis.
Based on its review and discussions with management, the Committee recommended to the Board of Supervisors that this
Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for fiscal 2016.
The Compensation Committee:
Matthew J. Chanin, Chair
Harold R. Logan, Jr.
John Hoyt Stookey
66
ADDITIONAL INFORMATION REGARDING EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning the compensation of each named executive officer during the fiscal
years ended September 24, 2016, September 26, 2015 and September 27, 2014:
Name
(a)
Michael A. Stivala
President and Chief Executive
Officer
Michael A. Kuglin
Chief Financial Officer and
Chief Accounting Officer
Steven C. Boyd
Senior Vice President -
Operations
Douglas T. Brinkworth
Senior Vice President -
Product Supply, Purchasing and Logistics
Paul Abel
Senior Vice President, General
Counsel and Secretary
Mark Wienberg
Former Chief Development
Officer
Year
(b)
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings (5)
(h)
All Other
Compensation (6)
(i)
Salary (1)
(c)
Bonus (2)
(d)
$500,000 $
$425,000 $
$362,500 $
$310,000 $
$275,000 $
$252,500 $
Unit
Awards (3)
(e)
(cid:178) $ 756,967 $
(cid:178) $ 263,241 $
(cid:178) $1,182,776 $
Non-Equity
Incentive Plan
Compensation (4)
(g)
(cid:178) $
$
$
382,500
226,100
(cid:178) $ 368,556 $
(cid:178) $ 127,751 $
(cid:178) $ 675,618 $
(cid:178) $
$
$
185,625
116,100
$330,000 $
$315,000 $
$302,500 $
(cid:178) $ 378,974 $
(cid:178) $ 156,083 $
(cid:178) $ 763,708 $
(cid:178) $
$
$
226,800
164,560
$310,000 $
$300,000 $
$285,000 $
$300,000 $
$290,000 $
$273,334 $
(cid:178) $ 368,556 $
(cid:178) $ 148,622 $
(cid:178) $ 753,870 $
(cid:178) $
$
$
216,000
155,040
(cid:178) $ 353,584 $
(cid:178) $ 134,684 $
(cid:178) $ 735,124 $
(cid:178) $
$
$
195,750
137,020
$223,333 $
$325,000 $
$302,500 $
(cid:178) $ 381,581 $
(cid:178) $ 161,040 $
(cid:178) $ 758,784 $
(cid:178) $
$
$
234,000
164,560
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
39,339
5,787
28,917
22,394
3,643
16,037
$
$
$
$
$
$
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
Total
(j)
$1,302,884
$1,114,268
$1,812,757
45,917
43,527
41,381
40,282
36,841
33,430
$ 718,838
$ 625,217
$1,077,648
38,471
36,437
35,816
$ 786,784
$ 740,107
$1,295,501
43,349
42,215
41,791
$ 744,299
$ 710,480
$1,251,738
31,934
29,518
27,780
$ 685,518
$ 649,952
$1,173,258
196,773
42,201
38,275
$ 801,687
$ 762,241
$1,264,119
(1)
(2)
(3)
Includes amounts deferred by named executive officers as contributions to the 401(k) Plan. For more information on the relationship between salaries and other
cash compensation (i.e., annual cash bonuses and LTIP awards), refer t(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:86) of Compensation(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:17)
This column is reserved for discretionary cash bonuses that are not based on any performance criteria. During fiscal years 2016, 2015 and 2014, we did not
provide our named executive officers with non-performance related bonus payments.
The amounts reported in this column represent the aggregate grant date fair value of RUP awards made during fiscal years 2016, 2015 and 2014, as well as the
value at the grant date of awards made in fiscal years 2016, 2015, and 2014 under the LTIP, based on the target outcome with respect to satisfaction of the
performance conditions. (cid:55)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:21)(cid:15)(cid:25)(cid:25)(cid:28)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:26),311 unvested restricted units that were forfeited
(cid:69)(cid:92)(cid:3)(cid:75)(cid:76)(cid:80)(cid:3)(cid:82)(cid:81)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:83)(cid:68)(cid:85)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:3)(cid:3)(cid:36)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:20)(cid:15)(cid:26)(cid:23)(cid:27)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)restricted units that were forfeited
by him on his departure date. The specific (cid:71)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:86)(cid:3) (cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:85)(cid:72)(cid:70)(cid:72)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:17)(cid:180)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:69)(cid:85)(cid:72)(cid:68)(cid:78)(cid:71)(cid:82)(cid:90)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:86) follows:
Plan Name
2016
RUP
LTIP
Total
2015
RUP
LTIP
Total
2014
RUP
LTIP
Total
$
$
$
$
$
$
Mr. Stivala
Mr. Kuglin
Mr. Boyd
Mr. Brinkworth
Mr. Abel
Mr. Wienberg
431,405
325,562
756,967
$
$
207,079
161,477
368,556
$
$
207,079
171,895
378,974
$
$
207,079
161,477
368,556
$
$
207,079
146,505
353,584
$
$
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
(cid:178) $
263,241
263,241
1,035,266
147,510
1,182,776
$
$
$
127,751
127,751
579,736
95,882
675,618
$
$
$
156,083
156,083
621,111
142,597
763,708
$
$
$
148,622
148,622
621,111
132,759
753,870
$
$
$
134,684
134,684
621,111
114,013
735,124
$
$
$
207,079
174,502
381,581
(cid:178)
161,040
161,040
621,111
137,673
758,784
(4)
The amounts reported in this column represent each named executive officer's annual cash bonus earned in accordance with the performance measures discussed
(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)(cid:3)(cid:3)
67
(5)
(6)
Mr. Stivala, Mr. Kuglin, Mr. Abel and Mr. Wienberg do not participate in the Cash Balance Plan.
The amounts reported in this column consist of the following:
Type of Compensation
Mr. Stivala
Fiscal 2016
Mr. Kuglin
Mr. Boyd
401(k) Match
Value of Annual Physical Examination
Value of Partnership Provided Vehicles
Tax Preparation Services
Cash Balance Plan Administrative Fees
Severance Paid
Post-severance Outplacement Services
Title to Vehicle per Severance Agreement
Insurance Premiums
Total
Type of Compensation
401(k) Match
Value of Annual Physical Examination
Value of Partnership Provided Vehicles
Tax Preparation Services
Cash Balance Plan Administrative Fees
Insurance Premiums
Total
Type of Compensation
401(k) Match
Value of Annual Physical Examination
Value of Partnership Provided Vehicles
Tax Preparation Services
Cash Balance Plan Administrative Fees
Insurance Premiums
Total
$
$
$
$
$
$
4,500
2,950
15,234
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
23,233
45,917
Mr. Stivala
4,500
1,600
17,516
(cid:178)
(cid:178)
19,911
43,527
Mr. Stivala
4,375
(cid:178)
18,153
(cid:178)
(cid:178)
18,853
41,381
$
$
$
$
$
$
4,500
2,950
12,046
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
20,786
40,282
Fiscal 2015
Mr. Kuglin
4,125
1,600
13,033
(cid:178)
(cid:178)
18,083
36,841
Fiscal 2014
Mr. Kuglin
3,788
(cid:178)
12,725
(cid:178)
(cid:178)
16,917
33,430
$
$
$
$
$
$
4,500
(cid:178)
7,609
3,500
1,500
(cid:178)
(cid:178)
(cid:178)
21,362
38,471
Mr. Brinkworth
4,500
$
1,600
11,157
3,500
1,500
(cid:178)
(cid:178)
(cid:178)
21,092
43,349
$
Mr. Boyd
4,500
(cid:178)
8,004
3,500
1,500
18,933
36,437
Mr. Brinkworth
4,500
$
1,600
11,305
4,500
1,500
18,810
42,215
$
Mr. Boyd
4,375
(cid:178)
6,837
4,450
1,500
18,654
35,816
Mr. Brinkworth
4,275
$
1,500
11,410
4,400
1,500
18,706
41,791
$
Mr. Abel
4,500
1,600
15,640
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
10,194
31,934
Mr. Abel
4,350
1,600
14,504
(cid:178)
(cid:178)
9,064
29,518
Mr. Abel
4,100
(cid:178)
15,061
(cid:178)
(cid:178)
8,619
27,780
$
$
$
$
$
$
Mr. Wienberg
$
(cid:178)
2,950
11,072
(cid:178)
(cid:178)
111,667
20,000
37,800
13,284
196,773
$
Mr. Wienberg
4,500
$
1,600
16,986
(cid:178)
(cid:178)
19,115
42,201
$
Mr. Wienberg
4,375
$
1,750
13,142
(cid:178)
(cid:178)
19,008
38,275
$
Note: Column (f) was omitted from the Summary Compensation Table because we do not grant options to our employees.
68
Grants of Plan Based Awards Table for Fiscal 2016
The following table sets forth certain information concerning grants of awards made to each named executive officer during the
fiscal year ended September 24, 2016:
Name
(a)
Michael A. Stivala
Plan
Name
Grant
Date
(b)
Approval
Date
RUP (1)
Bonus (2)
LTIP (3)
15 Nov 15 10 Nov 15
10 Nov 15
27 Sep 15
10 Nov 15
27 Sep 15
LTIP
Units
Underlying
Equity
Incentive
Plan
Awards
(LTIP) (4)
Estimated Future
Payments Under
Non-Equity Incentive
Plan Awards
Estimated Future
Payments Under
Equity Incentive Plan
Awards
Target Maximum Target Maximum or Units Awards (5)
Grant
Date Fair
Value of
Stock and
Option
All
Other
stock
Awards:
Number
of
Shares
of Stock
(d)
(e)
(g)
(h)
$500,000 $ 600,000
(i)
18,277
(l)
$ 431,405
7,095
$325,562 $ 488,343
Michael A. Kuglin
RUP (1)
15 Nov 15 10 Nov 15
8,773
$ 207,079
Bonus (2)
LTIP (3)
27 Sep 15
27 Sep 15
10 Nov 15
10 Nov 15
3,519
$248,000 $ 297,600
$161,477 $ 242,216
Steven C. Boyd
RUP (1)
Bonus (2)
LTIP (3)
15 Nov 15 10 Nov 15
10 Nov 15
27 Sep 15
10 Nov 15
27 Sep 15
$264,000 $ 316,800
3,746
$171,895 $ 257,843
8,773
$ 207,079
Douglas T. Brinkworth
RUP (1)
15 Nov 15 10 Nov 15
8,773
$ 207,079
Bonus (2)
LTIP (3)
27 Sep 15
27 Sep 15
10 Nov 15
10 Nov 15
3,519
$248,000 $ 297,600
$161,477 $ 242,216
Paul Abel
Mark Wienberg
RUP (1)
Bonus (2)
LTIP (3)
15 Nov 15 10 Nov 15
10 Nov 15
27 Sep 15
10 Nov 15
27 Sep 15
RUP (1)
Bonus (2)
LTIP (3)
15 Nov 15 10 Nov 15
10 Nov 15
27 Sep 15
10 Nov 15
27 Sep 15
3,193
3,803
$225,000 $ 270,000
$146,505 $ 219,758
$268,000 $ 321,600
$174,502 $ 261,753
8,773
$ 207,079
8,773
$ 207,079
(1)
(2)
(3)
The quantity reported on this line represents an award granted under the RUP. RUP awards granted subsequent to fiscal 2013 vest as follows: one third of the
award on the first anniversary of the grant date, one third of the award on the second anniversary of the grant date, and one third of the award on the third
anniversary of the grant date (subject in each case to continued service through each such date). If a recipient has held an unvested award for at least six
months, is 55 years or older, and has worked for the Partnership for at least ten years, an award held by such participant will vest six months and one day
(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86) retirement if the participant retires prior to the conclusion of the normal vesting schedule, unless the Committee exercises its
(cid:68)(cid:88)(cid:87)(cid:75)(cid:82)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:79)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:17)(cid:3)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)Brinkworth and Mr. Abel are the only named executive
officers who, at the time of this filing, satisfy the retirement eligibility criteria of the RUP. A discussion of the general terms of the RUP, and the facts and
circumstances considered by the Committee in authorizing these fiscal 2016 awards to our named executive officers(cid:15)(cid:3) (cid:76)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:17)(cid:180) The quantity and grant date fair value of Mr. Wie(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)
2,669 of the 7,311 unvested restricted units that were forfeited by him on his departure date. (cid:41)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)
(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:15)(cid:3)(cid:83)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:17)(cid:180)
Amounts reported on these lines are the targeted and maximum annual cash bonus compensation potential for each named executive officer under the annual
(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:69)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:17)(cid:180) Actual amounts earned by the
named executive officers for fiscal 2016 (cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:79)(cid:76)(cid:81)(cid:72)(cid:17)(cid:3)(cid:3)(cid:38)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:11)(cid:70)(cid:12)(cid:3)(cid:11)(cid:179)(cid:55)(cid:75)(cid:85)(cid:72)(cid:86)(cid:75)(cid:82)(cid:79)(cid:71)(cid:3)(cid:7)(cid:180)(cid:12)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:82)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
annual cash bonus plan does not provide for a guaranteed minimum cas(cid:75)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)(cid:37)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:90)ere earned by our named executive
officers during fiscal 2016(cid:15)(cid:3)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:11)(cid:71)(cid:12)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:17)
The LTIP is a phantom unit plan. Payments, if earned, are based on a combination of (i) the fair market value of our Common Units at the end of a three-year
measurement period, which, for purposes of the LTIP, is the average of the closing prices for the twenty business days preceding the conclusion of the three-
year measurement period, and (ii) cash equal to the distributions that would have inured to the same quantity of outstanding Common Units during the same
three-year measurement period. The fiscal 2016 (cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:48)(cid:68)(cid:91)(cid:76)(cid:80)(cid:88)(cid:80)(cid:180)(cid:3)(cid:68)(cid:80)(cid:82)unts are estimates based upon (i) the fair market value (the average of the
closing prices of our Common Units for the twenty business days preceding September 26, 2015) of our Common Units at the beginning of fiscal 2016, and (ii)
the estimated d(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:88)(cid:85)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period at the current annualized distribution rate of $3.55 per Common Unit.
(cid:38)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3) (cid:11)(cid:73)(cid:12)(cid:3) (cid:11)(cid:179)(cid:55)(cid:75)(cid:85)(cid:72)(cid:86)(cid:75)(cid:82)(cid:79)(cid:71)(cid:180)(cid:12)(cid:3) (cid:90)(cid:68)(cid:86)(cid:3) (cid:82)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:47)(cid:55)(cid:44)(cid:51)(cid:3) (cid:71)(cid:82)(cid:72)(cid:86)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) guaranteed minimum cash payment. (cid:55)(cid:75)(cid:72)(cid:3) (cid:179)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:3)
(cid:75)(cid:92)(cid:83)(cid:82)(cid:87)(cid:75)(cid:72)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:87)(cid:3)(cid:20)(cid:19)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:48)(cid:68)(cid:91)(cid:76)(cid:80)(cid:88)(cid:80)(cid:180)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:3)(cid:75)(cid:92)(cid:83)(cid:82)(cid:87)(cid:75)(cid:72)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:87)(cid:3)(cid:20)(cid:24)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:17)(cid:3)(cid:3)(cid:39)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:72)d descriptions of the plan and
(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:17)(cid:180)
(4)
This column is frequently used when non-equity incentive plan awards are denominated in units; however, in this case, the numbers reported represent the LTIP
phantom units each named executive officer was awarded under the LTIP during fiscal 2016
69
(5)
The dollar amounts reported in this column represent the aggregate fair value of the RUP awards on the grant date, net of estimated future distributions during
the vesting period. The fair value shown may not be indicative of the value realized in the future upon vesting because of the variability in the trading price of
our Common Units.
Note: Columns (j) and (k) were omitted from the Grants of Plan Based Awards Table because we do not award options to our employees.
Outstanding Equity Awards at Fiscal Year End 2016 Table
The following table sets forth certain information concerning outstanding equity awards under our RUP and LTIP unit awards
under our LTIP for each named executive officer as of September 24, 2016:
Stock Awards
Number of
Shares or Units
of Stock That
Have Not
Vested (7)
(g)
37,516
20,811
24,032
24,032
21,163
16,721
Market Value of
Shares or Units
of Stock That
Have Not
Vested (8)
(h)
$
$
$
$
$
$
1,276,857
708,302
817,929
817,929
720,283
569,099
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
that Have Not
Vested (9)
(i)
11,865
5,834
6,574
6,213
5,634
6,721
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (10)
(j)
518,660
255,025
287,368
271,587
246,277
293,793
$
$
$
$
$
$
Name
(a)
Michael A. Stivala (1)
Michael A. Kuglin (2)
Steven C. Boyd (3)
Douglas T. Brinkworth (4)
Paul Abel (5)
Mark Wienberg (6)
(1) (cid:48)(cid:85)(cid:17)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:68)(cid:79)(cid:68)(cid:182)(cid:86)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
Vesting Date
Quantity of Units
November 15, 2016
13,155
April 1, 2017
7,961
November 15, 2017
10,309
November 15, 2018
6,091
(2) (cid:48)(cid:85)(cid:17)(cid:3)(cid:46)(cid:88)(cid:74)(cid:79)(cid:76)(cid:81)(cid:182)(cid:86)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
Vesting Date
Quantity of Units
November 15, 2016
7,971
April 1, 2017
3,981
November 15, 2017
5,936
November 15, 2018
2,923
(3) Mr. (cid:37)(cid:82)(cid:92)(cid:71)(cid:182)(cid:86) RUP awards will vest as follows:
Vesting Date
Quantity of Units
November 15, 2016
9,987
April 1, 2017
3,981
November 15, 2017
7,141
November 15, 2018
2,923
(4) Mr. (cid:37)(cid:85)(cid:76)(cid:81)(cid:78)(cid:90)(cid:82)(cid:85)(cid:87)(cid:75)(cid:182)(cid:86) RUP awards will vest as follows:
Vesting Date
Quantity of Units
November 15, 2016
9,987
April 1, 2017
3,981
November 15, 2017
7,141
November 15, 2018
2,923
(5) Mr. Abel(cid:182)(cid:86) RUP awards will vest as follows:
Vesting Date
Quantity of Units
November 15, 2016
8,323
April 1, 2017
3,981
November 15, 2017
5,936
November 15, 2018
2,923
(6) (cid:48)(cid:85)(cid:17)(cid:3)(cid:58)(cid:76)(cid:72)(cid:81)(cid:69)(cid:72)(cid:85)(cid:74)(cid:182)(cid:86)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
Vesting Date
Quantity of Units
November 27, 2016
16,721
70
(7) (cid:55)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:74)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:84)(cid:88)(cid:68)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86).
(8) The figures reported in this column represent the figures reported in column (g) multiplied by the average of the highest and the
lowest trading prices of our Common Units on September 23, 2016, the last trading day of fiscal 2016.
(9) The amounts reported in this column represent the quantities of phantom units that underlie the outstanding and unvested fiscal
2016 and fiscal 2015 awards under the LTIP. Payments, if earned, will be made to participants at the end of a three-year
measurement period and will be based upon the Partners(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period.
(cid:41)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:15)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)
(10) The amounts reported in this column represent the estimated future target payouts of the fiscal 2016 and fiscal 2015 awards
granted under the LTIP. These amounts were computed by multiplying the quantities of the unvested phantom units in column
(i) by the average of the closing prices of our Common Units for the twenty business days preceding September 24, 2016 (in
(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:182)(cid:86)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:80)(cid:72)(cid:87)(cid:75)(cid:82)(cid:71)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:12)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:182)s
underlying phantom units times the sum of the distributions that are estimated to inure to an outstanding Common Unit during
(cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3) (cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period. Because of the variability of the trading prices of our Common Units, actual
payments, if any, at the end of the three-year measurement period may differ. The following chart provides a breakdown of
(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:182)(cid:86)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:29)
Mr. Kuglin
Mr. Boyd
Fiscal 2016 Phantom Units
Value of Fiscal 2016 Phantom Units
Estimated Distributions over Measurement
Period
Fiscal 2015 Phantom Units
Value of Fiscal 2015 Phantom Units
Estimated Distributions over Measurement
Period
Mr. Stivala
7,095
234,656
75,562
4,770
157,761
50,681
$
$
$
$
3,519
116,386
37,477
2,315
76,565
24,597
$
$
$
$
$
$
$
$
Mr.
Brinkworth
3,519
116,386
$
3,746
123,893
39,895
$
37,477
2,828
93,532
30,048
$
$
2,694
89,100
28,624
Mr. Abel
3,193
105,604
34,005
2,441
80,732
25,936
$
$
$
$
$
$
$
$
Mr.
Wienberg
3,803
125,779
40,502
2,918
96,508
31,004
Note: Columns (b), (c), (d), (e) and (f), all of which are for the reporting of option-related compensation, have been omitted from the
(cid:179)(cid:50)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:36)(cid:87)(cid:3)(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:40)(cid:81)(cid:71)(cid:3)(cid:21)(cid:19)(cid:20)6 (cid:55)(cid:68)(cid:69)(cid:79)(cid:72)(cid:180)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:71)(cid:82)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:17)
Equity Vested Table for Fiscal 2016
Awards under the RUP are settled in Common Units upon vesting. Awards under the LTIP, a phantom unit plan, are settled in
cash. The following two tables set forth certain information concerning the vesting of awards under our RUP and the vesting of the
fiscal 2014 award under our LTIP for each named executive officer during the fiscal year ended September 24, 2016:
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Restricted Unit Plan
Unit Awards
Number of
Common Units
Acquired on
Vesting
16,151
9,776
12,170
12,170
10,355
12,170
Value Realized on
Vesting (1)
$
$
$
$
$
$
488,208
296,131
369,375
369,375
313,846
369,375
71
(1)
The value realized is equal to the average of the high and low trading prices of our Common Units on the vesting date,
multiplied by the number of units that vested.
Long-Term Incentive Plan - Fiscal 2014 Award (2)
Cash Awards
Name
Michael A. Stivala
Michael A. Kuglin
Steven C. Boyd
Douglas T. Brinkworth
Paul Abel
Mark Wienberg
Number of
Phantom Units
Cashed Out on
Vesting (3)
2,620
1,703
2,533
2,358
2,025
2,445
Value Realized on
Vesting (4)
$
$
$
$
$
$
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(2) (cid:55)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period concluded on September 24, 2016.
(3)
(cid:44)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:88)(cid:79)(cid:68)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-Term
(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:180)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:84)(cid:88)(cid:68)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3) (cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period and were based upon
(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:182)(cid:86)(cid:3)(cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:69)(cid:82)(cid:81)(cid:88)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:17)
(4) The value (i.e., cash payment) realized was calculated in accordance with the terms and conditions of the LTIP. For more
information, refer to the (cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)(cid:3)(cid:3)
Retirement Benefits Table for Fiscal 2016
The following table sets forth certain information concerning each plan that provides for payments or other benefits at, following,
or in connection with retirement for each named executive officer as of the end of the fiscal year ended September 24, 2016:
Name
Plan Name
Michael A. Stivala (1)
Michael A. Kuglin (1)
Steven C. Boyd
N/A
N/A
Cash Balance Plan (2)
Douglas T. Brinkworth
Cash Balance Plan (2)
Paul Abel (1)
Mark Wienberg (1)
N/A
LTIP (3)
RUP (4)
N/A
Number of Years
Credited Service
N/A
N/A
15
6
N/A
N/A
N/A
N/A
Present Value
of Accumulated
Benefit
Payments
During Last
Fiscal Year
$
$
$
$
$
$
$
$
(cid:178) $
(cid:178) $
243,955 $
150,578 $
(cid:178) $
246,277 $
720,283 $
(cid:178) $
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(cid:178)
(1) Because Mr. Stivala, Mr. Kuglin, Mr. Abel and Mr. Wienberg commenced employment with the Partnership after January 1,
2000, the date on which the Cash Balance Plan was closed to new participants, they do not participate in the Cash Balance Plan.
(2) (cid:41)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:37)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)
(3) On September 24, 2016, Mr. Abel was the only named executive officer who met the retirement criteria of the LTIP. For such
participants, outstanding but unvested awards under the LTIP become fully vested. However, payouts on these awards are deferred
(cid:88)(cid:81)(cid:87)(cid:76)(cid:79)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period, based on the outcome of the distributable cash flow
(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:21)(cid:19)(cid:20)(cid:24)(cid:3) (cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:79)(cid:76)(cid:81)(cid:72)(cid:3) (cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:3) (cid:83)(cid:85)(cid:82)(cid:77)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:83)(cid:68)(cid:92)(cid:82)(cid:88)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:36)(cid:69)(cid:72)(cid:79)(cid:182)(cid:86)(cid:3)
outstanding fiscal 2016 and 2015 awards under the LTIP. Because the ultimate payout, if any, is predicated on the trading prices of
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period, the value reported may not be indicative of the
value realized in the future upon vesting due to the variability in the trading price of our Common Units.
(4) On September 24, 2016, Mr. Abel was the only named executive officer who met the retirement criteria of the RUP. For more
(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:56)(cid:81)(cid:76)(cid:87)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:80)(cid:72)(cid:72)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:15)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:86)(cid:76)(cid:91)(cid:3)(cid:80)(cid:82)(cid:81)(cid:87)(cid:75)(cid:86)
and one day after retirement.
72
Potential Payments Upon Termination
The following table sets forth certain information containing potential payments to the named executive officers in accordance
with the provisions of the Severance Protection Plan, the RUP and the LTIP for the circumstances listed in the table assuming a
September 24, 2016 termination date. For more information on severance and change of control payments, refer to the subheadings
(cid:179)(cid:54)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:179)(cid:38)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:180)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:17)
Executive Payments and Benefits Upon Termination
Death
Disability
Involuntary
Termination
Without Cause by
the Partnership or
by the Executive
for Good Reason
without a Change
of Control Event
Involuntary
Termination
Without Cause
by the
Partnership or
by the Executive
for Good Reason
with a Change of
Control Event
Michael A. Stivala
Cash Compensation (1) (2) (3) (4)
Accelerated Vesting of Fiscal 2016, 2015 and
2014 LTIP Awards (5)
Accelerated Vesting of Outstanding RUP Awards (6)
Medical Benefits (3)
Total
Michael A. Kuglin
Cash Compensation (1) (2) (3) (4)
Accelerated Vesting of Fiscal 2016, 2015 and
2014 LTIP Awards (5)
Accelerated Vesting of Outstanding RUP Awards (6)
Medical Benefits (3)
Total
Steven C. Boyd
Cash Compensation (1) (2) (3) (4)
Accelerated Vesting of Fiscal 2016, 2015 and
2014 LTIP Awards (5)
Accelerated Vesting of Outstanding RUP Awards (6)
Medical Benefits (3)
Total
Douglas T. Brinkworth
Cash Compensation (1) (2) (3) (4)
Accelerated Vesting of Fiscal 2016, 2015 and
2014 LTIP Awards (5)
Accelerated Vesting of Outstanding RUP Awards (6)
Medical Benefits (3)
Total
Paul Abel
Cash Compensation (1) (2) (3) (4)
Accelerated Vesting of Fiscal 2016, 2015 and
2014 LTIP Awards (5)
Accelerated Vesting of Outstanding RUP Awards (6)
Medical Benefits (3)
Total
$
$
$
$
$
$
$
$
$
$
(cid:178) $
(cid:178) $
500,000
$
1,500,000
(cid:178)
1,276,857
(cid:178)
1,276,857
$
(cid:178)
654,799
(cid:178)
654,799
$
(cid:178)
(cid:178)
23,233
523,233
$
706,405
1,276,857
(cid:178)
3,483,262
(cid:178) $
(cid:178) $
310,000
$
837,000
(cid:178)
708,302
(cid:178)
708,302
$
(cid:178)
409,713
(cid:178)
409,713
$
(cid:178)
(cid:178)
20,786
330,786
$
369,835
708,302
(cid:178)
1,915,137
(cid:178) $
(cid:178) $
330,000
$
891,000
(cid:178)
817,929
(cid:178)
817,929
$
(cid:178)
519,340
(cid:178)
519,340
$
(cid:178)
(cid:178)
21,362
351,362
$
451,213
817,929
(cid:178)
2,160,142
(cid:178) $
(cid:178) $
310,000
$
837,000
(cid:178)
817,929
(cid:178)
817,929
$
(cid:178)
519,340
(cid:178)
519,340
$
(cid:178)
(cid:178)
21,092
331,092
$
424,570
817,929
(cid:178)
2,079,499
(cid:178) $
(cid:178) $
300,000
$
787,500
(cid:178)
720,283
(cid:178)
720,283
$
(cid:178)
720,283
(cid:178)
720,283
$
(cid:178)
(cid:178)
10,194
310,194
$
378,815
720,283
(cid:178)
1,886,598
(1)
(cid:44)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:81)(cid:68)(cid:80)(cid:72)(cid:71)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:70)(cid:72)(cid:71)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:72)(cid:71)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:88)(cid:81)(cid:83)(cid:68)(cid:76)d
salary and pro-rata cash bonus.
73
(2)
In the event of disability, the named executive officer is entitled to a payment equal to his earned but unpaid salary and pro-rata
cash bonus.
(3) Any severance benefits, unrelated to a change of control event, payable to these officers would be determined by the Committee
on a case-by-case basis in accordance with prior treatment of other similarly situated executives and may, as a result, differ
substantially from this hypothetical presentation. For purposes of this table, we have assumed that each of these named
executive officers would, upon termination of employment without cause or for resignation for good reason, receive accrued
salary and benefits through the date of termination plus one times annual salary and continued participation, at active employee
rates, in our health insurance plans for one year.
(4)
(5)
(6)
In the event of a change of control followed by a termination without cause or by a resignation with good reason, each of the
named executive officers will receive 78 weeks of base pay plus a sum equal to their annual target cash bonus divided by 52 and
multiplied by 78 in accordance with the terms of the Severance Protection Plan. For more information on the Severance
(cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:38)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)
In the event of a change of control, all awards under the LTIP will vest immediately regardless of whether termination
immediately follows. If a change of control event occurs, at the conclusion of fiscal 2016, payments would have been equal to
(cid:20)(cid:21)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:68)(cid:3)(cid:86)(cid:88)(cid:80)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:20)(cid:21)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:75)(cid:68)(cid:81)(cid:87)(cid:82)(cid:80)
units multiplied by an amount equal to the cumulative, per-Common Unit distribution from the beginning of an unvested
(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)-year measurement period through the date on which the change of control occurred (beginning in fiscal 2017, this
percentage has been changed to 150%). If a change of control event occurred on September 24, 2016, the fiscal 2016, fiscal
2015 and fiscal 2014 awards would have been subject to this treatment. Although Mr. Wienberg was no longer employed by the
Partnership on September 24, 2016, if a change of control occurred on that date, his cash payment under the change of control
(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:47)(cid:55)(cid:44)(cid:51)(cid:3)(cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:7)(cid:23)(cid:24)(cid:22)(cid:15)(cid:24)(cid:21)(cid:28)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:75)(cid:72)(cid:68)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:47)(cid:82)(cid:81)(cid:74)-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3)(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:17)(cid:180)(cid:3)(cid:3)(cid:3)
In the event of death, the inability to continue employment because of permanent disability, or a termination without cause or a
good reason resignation unconnected to a change of control event, awards will vest in accordance with the normal vesting
schedule and will be subject to the same requirements as awards held by individuals still employed by us and will be subject to
the same risks as awards held by all other participants.
Effective November 13, 2012, the Committee amended the RUP document to provide for the vesting of all unvested awards
held by a participant at the time of his or her death. If a recipient of a RUP award becomes permanently disabled, only those
(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:75)(cid:72)(cid:79)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3) or
her permanent disability will immediately vest; all awards held by the recipient for less than one year will be forfeited by the
recipient. Because each of our named executive officers received a RUP award during fiscal 2016, if any or all of the following
four named executive officers had become permanently disabled on September 24, 2016, the following quantities of restricted
units would have vested: Stivala, 19,239; Kuglin, 12,038; Boyd, 15,259; Brinkworth, 15,259. The following quantities would
have been forfeited: Stivala, 1(cid:27)(cid:15)(cid:21)(cid:26)(cid:26)(cid:30)(cid:3) (cid:46)(cid:88)(cid:74)(cid:79)(cid:76)(cid:81)(cid:15)(cid:3) (cid:27)(cid:15)(cid:26)(cid:26)(cid:22)(cid:30)(cid:3) (cid:37)(cid:82)(cid:92)(cid:71)(cid:15)(cid:3) (cid:27)(cid:15)(cid:26)(cid:26)(cid:22)(cid:30)(cid:3) (cid:37)(cid:85)(cid:76)(cid:81)(cid:78)(cid:90)(cid:82)(cid:85)(cid:87)(cid:75)(cid:15)(cid:3) (cid:27)(cid:15)(cid:26)(cid:26)(cid:22)(cid:17)(cid:3) (cid:3) (cid:37)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:82)(cid:73)(cid:3) (cid:48)(cid:85)(cid:17)(cid:3) (cid:36)(cid:69)(cid:72)(cid:79)(cid:182)(cid:86)(cid:3) (cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:36)(cid:69)(cid:72)(cid:79)(cid:3)(cid:75)(cid:68)(cid:71)(cid:3)(cid:69)(cid:72)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)
disabled on September 24, 2016, none of his unvested awards would have been forfeited.
(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:70)(cid:76)(cid:85)(cid:70)(cid:88)(cid:80)(cid:86)(cid:87)(cid:68)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3)(cid:88)(cid:81)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:68)(cid:3)(cid:53)(cid:56)(cid:51)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:85)(cid:72)(cid:70)(cid:76)(cid:83)(cid:76)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:82)(cid:88)(cid:87)(cid:3)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:75)(cid:72)
or she resigns for good reason, any RUP awards held by such recipient will be for(cid:73)(cid:72)(cid:76)(cid:87)(cid:72)(cid:71)(cid:17)(cid:3)(cid:3)(cid:37)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:48)(cid:85)(cid:17)(cid:3)(cid:36)(cid:69)(cid:72)(cid:79)(cid:182)(cid:86)(cid:3)(cid:88)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)
awards were subject to the retirement provisions on the last day of fiscal 2016, if Mr. Abel had been terminated without cause
on September 24, 2016, none of his unvested awards would have been forfeited.
In the event of a change of control, as defined in the RUP document, all unvested RUP awards will vest immediately on the date
(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:82)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:76)(cid:83)(cid:76)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)s
terminated. In accordance with the provisions of the RUP document and his severance agreement, if a change of control
occurred on September 24, 2016, Mr. Wienberg would have received 7,311 Common Units for the 7,311 restricted units that
were forfeited in addition to the 16,721 Common Units provided for under the terms of his severance agreement (total value on
September 24, 2016: $817,929).
74
(cid:54)(cid:56)(cid:51)(cid:40)(cid:53)(cid:57)(cid:44)(cid:54)(cid:50)(cid:53)(cid:54)(cid:182)(cid:3)(cid:38)(cid:50)(cid:48)(cid:51)(cid:40)(cid:49)(cid:54)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
The following table sets forth the compensation of the non-employee members of the Board of Supervisors of the Partnership
during fiscal 2016.
Supervisor
Harold R. Logan, Jr.
Lawrence C. Caldwell
Matthew J. Chanin
John D. Collins
John Hoyt Stookey
Jane Swift
Fees Earned
or
Paid in
Cash (1)
$
$
$
$
$
$
125,000
90,000
100,000
105,000
90,000
90,000
Unit
Awards (2)
$
$
$
$
$
$
258,861
207,079
207,079
207,079
207,079
207,079
Total
383,861
297,079
307,079
312,079
297,079
297,079
$
$
$
$
$
$
(1)
This includes amounts earned for fiscal 2016, including quarterly retainer installments for the fourth quarter of 2016 that were
paid in November 2016. It does not include amounts paid in fiscal 2016 for fiscal 2015 quarterly retainer installments.
(2) On September 24, 2016, Mr. Logan held 15,467 unvested restricted units, Mr. Caldwell and Mr. Chanin each held 13,290
unvested restricted units, and Mr. Collins, Mr. Stookey and Ms. Swift each held 13,273 unvested restricted units.
At its meeting on July 21, 2015, the Compensation Committee approved the following RUP awards with an effective grant date
of November 15, 2015:
Supervisor
Mr. Logan
Mr. Caldwell
Mr. Chanin
Mr. Collins
Mr. Stookey
Ms. Swift
Grant Quantities
10,967
8,773
8,773
8,773
8,773
8,773
The aggregate grant date fair values of these RUP awards, computed in accordance with accounting principles generally
(cid:68)(cid:70)(cid:70)(cid:72)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:80)(cid:72)(cid:85)(cid:76)(cid:70)(cid:68)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:88)(cid:80)(cid:81)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:180)
Note: The columns for reporting option awards, non-equity incentive plan compensation, changes in pension value and non-qualified
(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3) (cid:82)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:55)(cid:68)(cid:69)(cid:79)(cid:72)
because the Partnership does not provide these forms of compensation to its non-employee supervisors.
Fees and Benefit Plans for Non-Employee Supervisors
Annual Cash Retainer Fees. As the Chairman of the Board of Supervisors, Mr. Logan receives an annual cash retainer of $125,000,
payable in quarterly installments of $31,250 each. Each of the other non-employee Supervisors receives an annual cash retainer of
$90,000 each, payable in quarterly installments of $22,500. As Chair of the Compensation Committee, Mr. Chanin receives an
additional annual cash retainer of $10,000, payable in quarterly installments of $2,500 each. As Chair of the Audit Committee, Mr.
Collins receives an additional annual cash retainer of $15,000, payable in quarterly installments of $3,750 each.
Meeting Fees. The members of our Board of Supervisors receive no additional remuneration for attendance at regularly scheduled
meetings of the Board or its Committees, other than reimbursement of reasonable expenses incurred in connection with such
attendance.
Restricted Unit Plan. Each non-employee Supervisor participates in the RUP. All awards vest in accordance with the provisions of
(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:71)(cid:82)(cid:70)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:11)(cid:86)(cid:72)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:88)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:81)(cid:68)(cid:79)(cid:92)(cid:86)(cid:76)(cid:86)(cid:180)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)the vesting
schedule). Upon vesting, all awards are settled by issuing Common Units.
Additional Supervisor Compensation. Non-employee Supervisors receive no other forms of remuneration from us. The only
perquisite provided to the members of the Board of Supervisors is the ability to purchase propane at the same discounted rate that we
offer propane to our employees, the value of which was less than $10,000 in fiscal 2016 for each Supervisor.
75
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
UNITHOLDER MATTERS
The following table sets forth certain information as of November 21, 2016 regarding the beneficial ownership of Common
Units by (a) each person or group known to the Partnership, based upon its review of filings under Section 13(d) or (g) under the
Securities Act, to own more than 5% of the outstanding Common Units; (b) each member of the Board of Supervisors; (c) each
executive officer named in the Summary Compensation Table in Item 11 of this Annual Report; and (d) all members of the Board of
Supervisors and executive officers as a group. Except as set forth in the notes to the table, each individual or entity has sole voting
and investment power over the Common Units reported.
Name of Beneficial Owner
Michael A. Stivala (a)
Michael A. Kuglin (b)
Steven C. Boyd (c)
Douglas T. Brinkworth (d)
Paul Abel (e)
Mark Wienberg (f)
Harold R. Logan, Jr. (g)
John Hoyt Stookey (h)
Jane Swift (h)
John D. Collins (h)
Lawrence C. Caldwell (i)
Matthew J. Chanin (j)
All Members of the Board of Supervisors and
Executive Officers, as a group (16 persons) (k)
Amount and
Nature of
Beneficial
Ownership (1)
52,196
16,429
45,048
31,512
33,504
(cid:178)
17,463
17,091
6,225
19,275
32,460
12,937
367,558
Percent of Class (2)
*
*
*
*
*
*
*
*
*
*
*
*
*
(1) With the exception of the 784 units held by the General Partner (see note (a) below and the 16,252 units held by charitable
organizations over which Mr. Caldwell has shared investment and voting power (see note (i) below), the above listed units may
be held in brokerage accounts where they are pledged as security.
(2) Based upon 61,041,252 Common Units outstanding on November 21, 2016.
*
(a)
Less than 1%.
Includes 784 Common Units held by the General Partner, of which Mr. Stivala is the sole member. Excludes 56,225 unvested
restricted units, none of which will vest in the 60-day period following November 21, 2016.
(b) Excludes 32,915 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(c) Excludes 29,977 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(d) Excludes 29,977 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(e) Excludes 28,772 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(f) Excludes 16,721 unvested restricted units, all of which will vest in the 60-day period following November 21, 2016.
(g) Excludes 10,311 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(h) Excludes 8,848 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(i)
Includes 16,252 Common Units held by charitable organizations over which Mr. Caldwell has shared investment and voting
power. Excludes 8,859 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(j)
Excludes 8,859 unvested restricted units, none of which will vest in the 60-day period following November 21, 2016.
(k)
Inclusive of the unvested restricted units referred to in footnotes (a), (b), (c), (d), (e), (g), (h), (i) and (j) above, the reported
number of units excludes 314,371 unvested restricted units, none of which will vest in the 60-day period following November
21, 2016.
76
Securities Authorized for Issuance Under the Restricted Unit Plan
The following table sets forth certain information, as of September 24, 2016(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)
Plan, under which restricted units of the Partnership, as described in the Notes to the Consolidated Financial Statements included in
this Annual Report, are authorized for issuance.
Number of
restricted units
remaining
available for
future issuance
under the
Restricted Unit
Plan (excluding
securities
reflected in
column (a))
(c)
Number of
Common Units
to be issued upon
vesting of
restricted units
(a)
Weighted-
average grant
date fair value
per restricted
unit
(b)
654,120 (2)
$ 26.74
1,173,408
(cid:178)
654,120
(cid:178)
$ 26.74
(cid:178)
1,173,408
Equity compensation plans approved by security
Plan Category
holders (1)
Equity compensation plans not approved by
security holders
Total
(1) Relates to the Restricted Unit Plan.
(2) Represents number of restricted units that, as of September 24, 2016, had been granted under the Restricted Unit Plan but had
not yet vested.
77
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Related Person Transactions
None. (cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:44)(cid:87)(cid:72)(cid:80)(cid:3)(cid:20)(cid:19)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:85)(cid:82)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
approving or ratifying, related party transactions.
Supervisor Independence
The Corporate Governance Guidelines and Principles adopted by the Board of Supervisors provide that a Supervisor is deemed
to be lacking a material relationship to the Partnership and is therefore independent of management if the following criteria are
satisfied:
1. Within the past three years, the Supervisor:
a.
b.
c.
d.
e.
has not been employed by the Partnership and has not received more than $100,000 per year in direct compensation from
the Partnership, other than Supervisor and committee fees and pension or other forms of deferred compensation for prior
service;
has not provided significant advisory or consultancy services to the Partnership, and has not been affiliated with a
company or a firm that has provided such services to the Partnership in return for aggregate payments during any of the
(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:21)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:70)onsolidated gross revenues
or $1 million;
has not been a significant customer or supplier of the Partnership and has not been affiliated with a company or firm that
has been a customer or supplier of the Partnership and has either made to the Partnership or received from the Partnership
(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:87)(cid:75)(cid:85)(cid:72)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:21)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)
consolidated gross revenues or $1 million;
has not been employed by or affiliated with an internal or external auditor that within the past three years provided
services to the Partnership; and
(cid:75)(cid:68)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:81)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:90)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)
compensation committee;
2.
3.
4.
The Supervisor is not a spouse, parent, sibling, child, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-
law of a person having a relationship described in 1. above nor shares a residence with such person;
The Supervisor is not affiliated with a tax-exempt entity that within the past 12 months received significant contributions from
(cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:74)(cid:85)(cid:72)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:21)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:92)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3) (cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:86)(cid:3) (cid:82)(cid:85)(cid:3) (cid:7)(cid:20)(cid:3) (cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)
significant); and
The Supervisor does not have any other relationships with the Partnership or with members of senior management of the
Partnership that the Board determines to be material.
A copy of our Corporate Governance Guidelines is available without charge from our website at www.suburbanpropane.com or
upon written request directed to: Suburban Propane Partners, L.P., Investor Relations, P.O. Box 206, Whippany, New Jersey 07981-0206.
78
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth the aggregate fees for services related to fiscal years 2016 and 2015 provided by
PricewaterhouseCoopers LLP, our independent registered public accounting firm.
Audit Fees (a)
Tax Fees (b)
All Other Fees (c)
Total
Fiscal
2016
2,308,300
971,000
1,800
3,281,100
$
$
Fiscal
2015
2,487,000
1,033,000
1,800
3,521,800
$
$
(a) Audit Fees consist of professional services rendered for the integrated audit of our annual consolidated financial statements and
our internal control over financial reporting, including reviews of our quarterly financial statements, as well as the issuance of
consents in connection with other filings made with the SEC.
(b) Tax Fees consist of fees for professional services related to tax reporting, tax compliance and transaction services assistance.
(c) All Other Fees represent fees for the purchase of a license to an accounting research software tool.
The Audit Committee of the Board of Supervisors has adopted a formal policy concerning the approval of audit and non-audit
services to be provided by the independent registered public accounting firm, PricewaterhouseCoopers LLP. The policy requires that
all services PricewaterhouseCoopers LLP may provide to us, including audit services and permitted audit-related and non-audit
services, be pre-approved by the Audit Committee. The Audit Committee pre-approved all audit and non-audit services provided by
PricewaterhouseCoopers LLP during fiscal 2016 and fiscal 2015.
79
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report:
PART IV
1.
Financial Statements
(cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:44)(cid:81)(cid:71)(cid:72)(cid:91)(cid:3)(cid:87)(cid:82)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:41)-1.
2.
Financial Statement Schedule
(cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:44)(cid:81)(cid:71)(cid:72)(cid:91)(cid:3)(cid:87)(cid:82)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:54)(cid:70)(cid:75)(cid:72)(cid:71)(cid:88)(cid:79)(cid:72)(cid:180)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)ge S-1.
3.
Exhibits
(cid:54)(cid:72)(cid:72)(cid:3)(cid:179)(cid:44)(cid:81)(cid:71)(cid:72)(cid:91)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:86)(cid:180)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:40)-1.
80
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: November 23, 2016
SUBURBAN PROPANE PARTNERS, L.P.
By:
/s/ MICHAEL A. STIVALA
Michael A. Stivala
President, Chief Executive Officer and
Supervisor
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature
Title
By: /s/ MICHAEL A. STIVALA
(Michael A. Stivala)
By: /s/ HAROLD R. LOGAN, JR.
(Harold R. Logan, Jr.)
By: /s/ JOHN HOYT STOOKEY
(John Hoyt Stookey)
By: /s/ JOHN D. COLLINS
(John D. Collins)
By: /s/ JANE SWIFT
(Jane Swift)
Date
November 23, 2016
President, Chief Executive
Officer and Supervisor
Chairman and Supervisor
November 23, 2016
Supervisor
Supervisor
Supervisor
November 23, 2016
November 23, 2016
November 23, 2016
By: /s/ LAWRENCE C. CALDWELL
Supervisor
November 23, 2016
(Lawrence C. Caldwell)
By /s/ MATTHEW J. CHANIN
(Matthew J. Chanin)
By: /s/ MICHAEL A. KUGLIN
(Michael A. Kuglin)
Supervisor
November 23, 2016
Chief Financial Officer and
Chief Accounting Officer
November 23, 2016
By: /s/ DANIEL S. BLOOMSTEIN
Controller
November 23, 2016
(Daniel S. Bloomstein)
81
INDEX TO EXHIBITS
The exhibits listed on this Exhibit Index are filed as part of this Annual Report. Exhibits required to be filed by Item 601 of
Regulation S-K, which are not listed below, are not applicable.
Exhibit
Number
2.1
3.1
3.2
Description
Contribution Agreement dated as of April 25, 2012, as amended as of June 15, 2012, July 6, 2012 and July 19, 2012,
among Inergy, L.P., Inergy GP, LLC, Inergy Sales and Service, Inc. and Suburban Propane Partners, L.P. (Incorporated
(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:21)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K filed April 26, 2012, June 15, 2012, July 6,
2012 and July 19, 2012, respectively).
Third Amended and Restated Agreement of Limited Partnership of the Partnership dated as of October 19, 2006, as
(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:45)(cid:88)(cid:79)(cid:92)(cid:3)(cid:22)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:19)(cid:26)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K
filed August 2, 2007).
Third Amended and Restated Agreement of Limited Partnership of the Operating Partnership dated as of
October 19, (cid:21)(cid:19)(cid:19)(cid:25)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:68)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3) (cid:21)(cid:23)(cid:15)(cid:3) (cid:21)(cid:19)(cid:19)(cid:28)(cid:17)(cid:3) (cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3) (cid:20)(cid:19)(cid:17)(cid:21)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)
Current Report on Form 8-K filed June 30, 2009).
3.3
Amended and Restated Certificate of Limited Partnership of the Partnership dated May 26, 1999 (Incorporated by
(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:17)(cid:21)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:52)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:79)(cid:92)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)-Q filed August 6, 2009).
3.4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
10.1
10.2
Amended and Restated Certificate of Limited Partnership of the Operating Partnership dated May 26, 1999 (Incorporated
(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:17)(cid:22)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:52)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:79)(cid:92)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)-Q filed August 6, 2009).
Description of Common Units o(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)
Report on Form 8-K filed October 19, 2006).
Indenture, dated as of August 1, 2012, related to the 7.375% Senior Notes due 2021, by and among Suburban Propane
Partners, L.P., Suburban Energy Finance Corp. and The Bank of New York Mellon, as Trustee, including the form of
(cid:26)(cid:17)(cid:22)(cid:26)(cid:24)(cid:8)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:20)(cid:17)(cid:3)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)
8-K filed August 2, 2012).
First Supplemental Indenture, dated as of May 23, 2014, related to the 7.375% Senior Notes due 2021, by and among
Suburban Propane Partners, L.P., Suburban Energy Finance Corp. and The Bank of New York Mellon, as Trustee.
(Incorporated (cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K filed May 27, 2014).
Indenture, dated as of May 27, 2014, relating to the 5.50% Senior Notes due 2024, among Suburban Propane Partners,
L.P., Suburban Energy Finance Corp. and The Bank of New York Mellon, as Trustee, including the form of 5.50%
(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:23)(cid:17)(cid:3)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80) 8-K filed
May 28, 2014).
First Supplemental Indenture, dated as of May 27, 2014, relating to the 5.50% Senior Notes due 2024, among Suburban
Propane Partners, L.P., Suburban Energy Finance Corp. and The Bank of New York Mellon, as Trustee. (Incorporated
(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)ent Report on Form 8-K filed May 28, 2014).
Second Supplemental Indenture, dated as of February 25, 2015, to the Indenture, dated as of May 27, 2014, relating to
the 5.75% Senior Notes due 2025, among Suburban Propane Partners, L.P., Suburban Energy Finance Corp. and The
(cid:37)(cid:68)(cid:81)(cid:78)(cid:3)(cid:82)(cid:73)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:48)(cid:72)(cid:79)(cid:79)(cid:82)(cid:81)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:17)(cid:3)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)
Form 8-K filed February 25, 2015).
Support Agreement, dated as of August 1, 2012, among Inergy, L.P., the Partnership and Suburban Energy Finance
(cid:38)(cid:82)(cid:85)(cid:83)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:23)(cid:17)(cid:22)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:53)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:54)-4 dated September
19, 2012).
Suburban Propane Partners, L.P. 2009 Restricted Unit Plan, effective August 1, 2009, as amended on November 13, 2012,
(cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3)(cid:25)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:22)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:48)(cid:68)(cid:92)(cid:3)(cid:20)(cid:22)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:20)(cid:19)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K
filed May 14, 2015).
Suburban Propane, L.P. Severance Protection Plan, as amended on January 24, 2008, January 20, 2009 and November
(cid:20)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:19)(cid:28)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:20)(cid:19)(cid:17)(cid:27)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)-K for the fiscal year
ended September 26, 2009).
E-1
10.3
10.4
10.5
10.6
10.7
10.8
21.1
23.1
31.1
31.2
32.1
32.2
99.1
Suburban Propane, L.P. 2014 Long Term Incentive Plan, effective October 1, 2013, as amended on November 14, 2016.
(Incorporated by reference to Exhibit 99.2 (cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K filed November 16, 2016).
Amended and Restated Retirement Savings and Investment Plan of Suburban Propane (effective as of January 1, 2013).
(Filed herewith).
First Amendment to the Retirement Savings and Investment Plan of Suburban Propane (effective January 1, 2015).
(Filed herewith).
Second Amendment to the Retirement Savings and Investment Plan of Suburban Propane (effective January 1, 2016).
(Filed herewith).
Second Amended and Restated Credit Agreement, among the Operating Partnership, the Partnership and Bank of
America, N.A., as Administrative Agent, and the Lenders party thereto, dated March 3, 2016. (Incorporated by reference
(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:20)(cid:19)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K filed on March 3, 2016).
Propane Storage Agreement, dated September 17, 2007, between Suburban Propane, L.P. and Plains LPG Services, L.P.
(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:20)(cid:19)(cid:17)(cid:22)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:27)-K filed September 20, 2007).
Subsidiaries of Suburban Propane Partners, L.P. (Filed herewith).
Consent of PricewaterhouseCoopers LLP. (Filed herewith).
Certification of the President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith).
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith).
Certification of the President and Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith).
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. (Filed herewith).
Equity Holding Policy for Supervisors and Executives of Suburban Propane Partners, L.P., as amended on November 10,
(cid:21)(cid:19)(cid:20)(cid:24)(cid:17)(cid:3)(cid:11)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:28)(cid:28)(cid:17)(cid:20)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:3)(cid:20)(cid:19)-K filed November 25,
2015).
99.2
Five-Year Performance Graph (Filed herewith).
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
E-2
INDEX TO FINANCIAL STATEMENTS
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
Report of Independent Registered Public Accounting Firm ..........................................................................................................
Consolidated Balance Sheets (cid:177) As of September 24, 2016 and September 26, 2015 ....................................................................
Consolidated Statements of Operations (cid:177) Years Ended September 24, 2016, September 26, 2015 and September 27, 2014.......
Consolidated Statements of Comprehensive Income (cid:177) Years Ended September 24, 2016, September 26, 2015 and
September 27, 2014 ..................................................................................................................................................................
Consolidated Statements of Cash Flows (cid:177) Years Ended September 24, 2016, September 26, 2015 and September 27, 2014 .....
(cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:177) Years Ended September 24, 2016, September 26, 2015 and
September 27, 2014 ..................................................................................................................................................................
Notes to Consolidated Financial Statements..................................................................................................................................
Page
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Supervisors and Unitholders of
Suburban Propane Partners, L.P.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, comprehensive
income, partners’ capital, and cash flows present fairly, in all material respects, the financial position of Suburban Propane Partners,
L.P. and its subsidiaries at September 24, 2016 and September 26, 2015, and the results of their operations and their cash flows for
each of the three years in the period ended September 24, 2016 in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item
15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related
consolidated financial statements. Also in our opinion, the Partnership maintained, in all material respects, effective internal control
over financial reporting as of September 24, 2016, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Partnership's management is
responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on
Internal Control over Financial Reporting appearing in Item 9A. Our responsibility is to express opinions on these financial
statements, on the financial statement schedule, and on the Partnership’s internal control over financial reporting based on our
integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Florham Park, New Jersey
November 23, 2016
F-2
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $2,441 and
$
37,341
$
152,338
September 24,
2016
September 26,
2015
$3,520, respectively
Inventories
Other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Other intangible assets, net
Other assets
Total assets
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable
Accrued employment and benefit costs
Accrued insurance
Customer deposits and advances
Accrued interest
Other current liabilities
Total current liabilities
Long-term borrowings
Accrued insurance
Other liabilities
Total liabilities
Commitments and contingencies
Partners' capital:
Common Unitholders (60,789 and 60,531 units issued and outstanding at
September 24, 2016 and September 26, 2015, respectively)
Accumulated other comprehensive loss
Total partners' capital
Total liabilities and partners' capital
$
$
53,802
45,352
10,804
147,299
742,129
1,094,635
276,329
35,577
2,295,969
32,286
16,495
16,270
106,155
16,589
17,259
205,054
1,238,172
43,406
101,106
1,587,738
59,929
47,686
13,460
273,413
781,058
1,087,429
307,789
36,041
2,485,730
34,922
29,236
13,430
105,147
16,382
11,229
210,346
1,241,107
43,653
92,304
1,587,410
754,063
(45,832)
708,231
2,295,969
$
947,203
(48,883)
898,320
2,485,730
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-3
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit amounts)
Revenues
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Costs and expenses
Cost of products sold
Operating
General and administrative
Depreciation and amortization
Gain on sale of business
Operating income
Loss on debt extinguishment
Interest expense, net
Income before provision for income taxes
Provision for income taxes
Net income
Net income per Common Unit - basic
Weighted average number of Common Units outstanding - basic
Net income per Common Unit - diluted
Weighted average number of Common Units outstanding - diluted
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
$
$
$
884,169
68,759
50,763
42,420
1,046,111
361,953
412,756
61,149
129,616
965,474
9,769
90,406
292
75,086
15,028
588
14,440
0.24
60,956
0.24
61,176
$
$
$
$
1,176,980
127,495
66,865
45,639
1,416,979
593,380
444,251
68,296
133,294
1,239,221
(cid:178)
177,758
15,072
77,634
85,052
700
84,352
1.39
60,650
1.38
60,907
$
$
$
$
1,606,840
194,684
87,093
49,640
1,938,257
1,080,750
466,389
64,593
136,399
1,748,131
(cid:178)
190,126
11,589
83,261
95,276
767
94,509
1.56
60,481
1.56
60,751
The accompanying notes are an integral part of these consolidated financial statements.
F-4
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net income
Other comprehensive income:
Net unrealized gains (losses) on cash flow hedges
Reclassification of realized losses on cash flow hedges into earnings
Amortization of net actuarial losses and prior service credits into
earnings and net change in funded status of benefit plans
Recognition in earnings of net actuarial loss for pension settlement
Other comprehensive income (loss)
Total comprehensive income
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
14,440
$
84,352
$
94,509
6
1,100
(55)
2,000
3,051
17,491
$
(1,159)
1,388
(5,207)
2,000
(2,978)
81,374
$
(518)
1,406
560
(cid:178)
1,448
95,957
$
The accompanying notes are an integral part of these consolidated financial statements.
F-5
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operations:
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
14,440
$
84,352
$
94,509
Depreciation and amortization
Loss on debt extinguishment
Gain on sale of business
Pension settlement charge
Other, net
Changes in assets and liabilities:
Accounts receivable
Inventories
Other current and noncurrent assets
Accounts payable
Accrued employment and benefit costs
Accrued insurance
Customer deposits and advances
Contribution to defined pension benefit plan
Other current and noncurrent liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
Acquisition of business
Proceeds from sale of property, plant and equipment
Proceeds from sale of business
Net cash (used in) investing activities
Cash flows from financing activities:
Proceeds from long-term borrowings
Repayment of long-term borrowings (includes premium and fees)
Proceeds from borrowings under revolving credit facility
Repayment of borrowings under revolving credit facility
Issuance costs associated with long-term borrowings
Partnership distributions
Net cash (used in) financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosure of cash flow information:
Cash paid for interest
$
$
129,616
292
(9,769)
2,000
9,181
6,258
2,415
2,037
(1,885)
(13,055)
2,593
1,163
(715)
12,537
157,108
(38,375)
(42,945)
5,950
21,465
(53,905)
(cid:178)
(cid:178)
100,000
(100,000)
(2,678)
(215,522)
(218,200)
(114,997)
152,338
37,341
$
133,294
15,072
(cid:178)
2,000
11,605
36,986
43,279
3,223
(14,761)
5,203
(5,367)
(2,239)
(cid:178)
11,562
324,209
(41,213)
(6,500)
11,741
(cid:178)
(35,972)
250,000
(260,852)
(cid:178)
(cid:178)
(4,568)
(213,118)
(228,538)
59,699
92,639
152,338
$
136,399
11,589
(cid:178)
(cid:178)
5,664
(2,061)
(13,342)
266
(3,513)
474
4,298
(176)
(cid:178)
(8,556)
225,551
(30,052)
(cid:178)
13,520
(cid:178)
(16,532)
525,000
(528,077)
61,700
(61,700)
(9,515)
(211,020)
(223,612)
(14,593)
107,232
92,639
74,289
$
75,597
$
91,836
The accompanying notes are an integral part of these consolidated financial statements.
F-6
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:51)(cid:36)(cid:53)(cid:55)(cid:49)(cid:40)(cid:53)(cid:54)(cid:182)(cid:3)(cid:38)(cid:36)(cid:51)(cid:44)(cid:55)(cid:36)(cid:47)
(in thousands)
Balance at September 28, 2013
Net income
Net unrealized losses on cash flow hedges
Reclassification of realized losses on cash flow hedges into
earnings
Amortization of net actuarial losses and prior service credits into
earnings and net change in funded status of benefit plans
Partnership distributions
Common Units issued under Restricted Unit Plans
Compensation cost recognized under Restricted Unit Plans, net of
forfeitures
Balance at September 27, 2014
Net income
Net unrealized losses on cash flow hedges
Reclassification of realized losses on cash flow hedges into
earnings
Amortization of net actuarial losses and prior service credits into
earnings and net change in funded status of benefit plans
Recognition in earnings of net actuarial loss for pension settlement
Partnership distributions
Common Units issued under Restricted Unit Plans
Compensation cost recognized under Restricted Unit Plans, net of
forfeitures
Balance at September 26, 2015
Net income
Net unrealized gains on cash flow hedges
Reclassification of realized losses on cash flow hedges into
earnings
Amortization of net actuarial losses and prior service credits into
earnings and net change in funded status of benefit plans
Recognition in earnings of net actuarial loss for pension settlement
Partnership distributions
Common Units issued under Restricted Unit Plan
Compensation cost recognized under Restricted Unit Plans, net of
forfeitures
Balance at September 24, 2016
Number of
Common Units
60,231
Common
Unitholders
$ 1,176,479
94,509
(211,020)
86
Accumulated
Other
Comprehensive
(Loss)
Total
Partners'
Capital
$
(47,353) $ 1,129,126
(518)
1,406
560
94,509
(518)
1,406
560
(211,020)
60,317
7,390
$ 1,067,358
$
7,390
(45,905) $ 1,021,453
84,352
(1,159)
84,352
(1,159)
1,388
1,388
(5,207)
2,000
$
(48,883) $
(213,118)
214
60,531
$
8,611
947,203
14,440
6
1,100
(55)
2,000
(215,522)
258
(5,207)
2,000
(213,118)
8,611
898,320
14,440
6
1,100
(55)
2,000
(215,522)
60,789
$
7,942
754,063
$
(45,832) $
7,942
708,231
The accompanying notes are an integral part of these consolidated financial statements.
F-7
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except unit and per unit amounts)
1.
Partnership Organization and Formation
(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:47)(cid:17)(cid:51)(cid:17)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:79)(cid:92)(cid:3)(cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3)(cid:39)(cid:72)(cid:79)(cid:68)(cid:90)(cid:68)(cid:85)(cid:72)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:72)(cid:81)(cid:74)(cid:68)(cid:74)(cid:72)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)rough its
operating partnership and subsidiaries, in the retail marketing and distribution of propane, fuel oil and refined fuels, as well as the
marketing of natural gas and electricity in deregulated markets. In addition, to complement its core marketing and distribution
businesses, the Partnership services a wide variety of home comfort equipment, particularly for heating and ventilation. The publicly
(cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:11)(cid:179)(cid:38)(cid:82)(cid:80)mon
(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:180)(cid:12)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:25)(cid:19)(cid:15)(cid:26)(cid:27)(cid:28)(cid:15)(cid:22)(cid:26)(cid:23)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)nding at September 24, 2016. The holders of Common Units are entitled to participate
in distributions and exercise the rights and privileges available to limited partners under the Third Amended and Restated Agreement
(cid:82)(cid:73)(cid:3)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:17)(cid:3)(cid:3)(cid:53)(cid:76)(cid:74)(cid:75)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:76)(cid:89)(cid:76)(cid:79)(cid:72)(cid:74)(cid:72)(cid:86)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:15)(cid:3)
among other things, the election of all members of the Board of Supervisors and voting on the removal of the general partner.
(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:15)(cid:3) (cid:47)(cid:17)(cid:51)(cid:17)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:15)(cid:3) (cid:68)(cid:3) (cid:39)(cid:72)(cid:79)(cid:68)(cid:90)(cid:68)(cid:85)(cid:72)(cid:3) (cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3)
(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:9)(cid:3)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:15)(cid:3)(cid:44)(cid:81)(cid:70)(cid:17)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:86)(cid:88)bsidiary
of the Operating Partnership, was formed to operate the service work and appliance and parts businesses of the Partnership. The
(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:3) (cid:87)(cid:82)(cid:74)(cid:72)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:81)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)s assets,
revenues and earnings. The Partnership, the Operating Partnership and the Service Company commenced operations in March 1996 in
(cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:82)(cid:73)(cid:73)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:17)
The general partner of both the Partnership and the Operating Partnership is Suburban Energ(cid:92)(cid:3) (cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3) (cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3) (cid:47)(cid:47)(cid:38)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:39)(cid:72)(cid:79)(cid:68)(cid:90)(cid:68)(cid:85)(cid:72)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:82)(cid:79)(cid:72)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:17)(cid:3)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)r than as
a holder of 784 Common Units that will remain in the General Partner, the General Partner does not have any economic interest in the
Partnership or the Operating Partnership.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:3)(cid:82)(cid:76)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:86)(cid:15)(cid:3)(cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:68)(cid:79)(cid:3)(cid:74)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:85)(cid:76)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:72)(cid:76)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:79)(cid:76)mited liability
companies that are treated (cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:40)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)
subject to corporate level U.S. income tax.
Suburban Energy Finance Corp., a direct 100%-owned subsidiary of the Partnership, was formed on November 26, 2003 to serve as
co-(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:85)(cid:15)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:15)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:17)
(cid:50)(cid:81)(cid:3) (cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3) (cid:20)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:21)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:39)(cid:68)(cid:87)(cid:72)(cid:180)(cid:12)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:82)(cid:79)(cid:72)(cid:3) (cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3) (cid:76)(cid:81)(cid:3) (cid:44)(cid:81)(cid:72)(cid:85)gy
Propane, LLC, including certain wholly-owned subsidiaries of Inergy Propane LLC, and the assets of Inergy Sales and Service, Inc.
(cid:55)(cid:75)(cid:72)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:86)(cid:3) (cid:179)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:17)(cid:180)(cid:3) (cid:3) (cid:36)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:39)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)ne
consisted (cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:15)(cid:3)(cid:47)(cid:17)(cid:51)(cid:17)(cid:3)(cid:11)(cid:179)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:50)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
its remaining wholly-owned subsidiaries acquired became subsidiaries of the Operating Partnership, but were merged into the
Operati(cid:81)(cid:74)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:82)(cid:81)(cid:3) (cid:36)(cid:83)(cid:85)(cid:76)(cid:79)(cid:3) (cid:22)(cid:19)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:22)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3)
operations beginning on the Acquisition Date.
The Partnership serves approximately 1.1 million residential, commercial, industrial and agricultural customers through 675 locations
(cid:76)(cid:81)(cid:3)(cid:23)(cid:20)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:70)(cid:82)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:68)(cid:86)(cid:87)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:82)(cid:81)(cid:86) of the United States, as well
as portions of the Midwest region of the United States and Alaska. No single customer accounted for 10% or more of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:3)(cid:82)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:17)
2.
Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial statements include the accounts of the Partnership, the Operating Partnership
and all of its direct and indirect subsidiaries. All intercompany transactions and account balances have been eliminated. The
Partnership consolidates the results of operations, financial condition and cash flows of the Operating Partnership as a result of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:20)(cid:19)(cid:19)(cid:8)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:17)
Fiscal Period. The Partnership uses a 52/53 week fiscal year which ends on the last Saturday in September. (cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)
quarters are generally 13 weeks in duration. (cid:58)(cid:75)(cid:72)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)(cid:24)(cid:22)(cid:3)(cid:90)(cid:72)(cid:72)(cid:78)(cid:86)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:85)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:88)(cid:85)(cid:87)(cid:75)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)
14 weeks in duration. Fiscal 2016, fiscal 2015 and fiscal 2014 included 52 weeks of operations.
F-8
Revenue Recognition. Sales of propane, fuel oil and refined fuels are recognized at the time product is delivered to the customer.
Revenue from the sale of appliances and equipment is recognized at the time of sale or when installation is complete, as applicable.
Revenue from repairs, maintenance and other service activities is recognized upon completion of the service. Revenue from annually
billed service contracts is recognized ratably over the service period. Revenue from the natural gas and electricity business is
recognized based on customer usage as determined by meter readings for amounts delivered, some of which may be unbilled at the
end of each accounting period. Revenue from annually billed tank fees is deferred at the time of billings and recognized on a straight-
line basis over one year.
Fair Value Measurements. The Partnership measures certain of its assets and liabilities at fair value, which is defined as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (cid:177) in either the
principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume
for the asset or liability.
The common framework for measuring fair value utilizes a three-level hierarchy to prioritize the inputs used in the valuation
techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with
Level 1 having the highest priority and Level 3 having the lowest.
(cid:120)
(cid:120)
(cid:120)
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar instruments in
markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
Business Combinations. The Partnership accounts for business combinations using the acquisition method and accordingly, the
assets and liabilities of the acquired entities are recorded at their estimated fair values at the acquisition date. Goodwill represents the
excess of the purchase price over the fair value of the net assets acquired, including the amount assigned to identifiable intangible
assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Partnership, and
the acquired assembled workforce, neither of which qualifies as an identifiable intangible asset. Identifiable intangible assets with
finite lives are amortized over their useful lives. The results of operations of acquired businesses are included in the consolidated
financial statements from the acquisition date. The Partnership expenses all acquisition-related costs as incurred.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United
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and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Estimates have been made by management in the areas of self-insurance and
litigation reserves, pension and other postretirement benefit liabilities and costs, valuation of derivative instruments, depreciation and
amortization of long-lived assets, asset impairment assessments, tax valuation allowances, allowances for doubtful accounts, and
purchase price allocation for acquired businesses. Actual results could differ from those estimates, making it reasonably possible that
a material change in these estimates could occur in the near term.
Cash and Cash Equivalents. The Partnership considers all highly liquid instruments purchased with an original maturity of three
months or less to be cash equivalents. The carrying amount approximates fair value because of the short maturity of these
instruments.
Inventories. Inventories are stated at the lower of cost or market. Cost is determined using a weighted average method for propane,
fuel oil and refined fuels and natural gas, and a standard cost basis for appliances, which approximates average cost.
Derivative Instruments and Hedging Activities
Commodity Price Risk. Given the retail nature of its operations, the Partnership maintains a certain level of priced physical inventory
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physical inventory priced relatively close to market for its field operations. The Partnership enters into a combination of exchange-
traded futures and option contracts and, in certain instances, over-the-(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:72)(cid:85)(cid:3) (cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:90)(cid:68)(cid:83)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3) (cid:11)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:15)(cid:3) (cid:179)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:3)(cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:3)(cid:82)(cid:76)(cid:79)(cid:3)(cid:83)(cid:75)(cid:92)(cid:86)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:81)(cid:87)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86) future purchases of propane or
fuel oil used in its operations and to help ensure adequate supply during periods of high demand. In addition, the Partnership sells
propane and fuel oil to customers at fixed prices, and enters into derivative instruments to hedge a portion of its exposure to
fluctuations in commodity prices as a result of selling the fixed price contracts. Under this risk management strategy, realized gains or
losses on derivative instruments will typically offset losses or gains on the physical inventory once the product is sold or delivered as
(cid:76)(cid:87)(cid:3)(cid:83)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:73)(cid:76)(cid:91)(cid:72)(cid:71)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:36)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)ce sheet at
their fair values. In addition, in the course of normal operations, the Partnership routinely enters into contracts such as forward priced
F-9
physical contracts for the purchase or sale of propane and fuel oil that qualify for and are designated as normal purchase or normal
sale contracts. Such contracts are exempted from the fair value accounting requirements and are accounted for at the time product is
purchased or sold under the related contract. The Partnership does not use derivative instruments for speculative trading purposes.
Market risks associated with de(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:80)(cid:82)(cid:81)(cid:76)(cid:87)(cid:82)(cid:85)(cid:72)(cid:71)(cid:3) (cid:71)(cid:68)(cid:76)(cid:79)(cid:92)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:43)(cid:72)(cid:71)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:53)(cid:76)(cid:86)(cid:78)(cid:3)
Management Policy which includes volume limits for open positions. Priced on-hand inventory is also reviewed and managed daily
as to exposures to changing market prices.
On the date that derivative instruments are entered into, other than those designated as normal purchases or normal sales, the
Partnership makes a determination as to whether the derivative instrument qualifies for designation as a hedge. Changes in the fair
(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:72)(cid:71)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3) (cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3) (cid:82)(cid:85)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:11)(cid:179)(cid:50)(cid:38)(cid:44)(cid:180)(cid:12)(cid:15)(cid:3)
depending on whether the derivative instrument is designated as a hedge and, if so, the type of hedge. For derivative instruments
(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:68)(cid:86)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:73)(cid:79)(cid:82)(cid:90)(cid:3) (cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:86)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:15)(cid:3) (cid:69)(cid:82)(cid:87)(cid:75)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:75)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:72)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:3) (cid:82)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3) (cid:69)asis,
whether the hedge contract is highly effective in offsetting changes in cash flows of hedged items. Changes in the fair value of
derivative instruments designated as cash flow hedges are reported in OCI to the extent effective and reclassified into earnings during
the same period in which the hedged item affects earnings. The mark-to-market gains or losses on ineffective portions of cash flow
hedges are recognized in earnings immediately. Changes in the fair value of derivative instruments that are not designated as cash
flow hedges, and that do not meet the normal purchase and normal sale exemption, are recorded within earnings as they occur. Cash
flows associated with derivative instruments are reported as operating activities within the consolidated statement of cash flows.
Interest Rate Risk. (cid:36)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:69)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:69)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:68)(cid:87)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:68)(cid:76)(cid:79)(cid:76)ng interest rates based upon, at the Operating
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:47)(cid:44)(cid:37)(cid:50)(cid:53)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:41)(cid:72)(cid:71)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:41)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:53)(cid:68)(cid:87)(cid:72)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)½ of 1%
(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:81)(cid:78)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:47)(cid:44)(cid:37)(cid:50)(cid:53)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:20)(cid:8)(cid:15)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81). The applicable margin is dependent on the level of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:79)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:71)(cid:72)(cid:69)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:69)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3) (cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:87)(cid:68)(cid:91)(cid:72)(cid:86)(cid:15)(cid:3) (cid:71)(cid:72)(cid:83)(cid:85)(cid:72)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81) and
(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)(cid:12)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:85)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3) interest rate risk on the variable component of the interest rate.
The Partnership manages part of its variable interest rate risk by entering into interest rate swap agreements. The interest rate swaps
have been designated as, and are accounted for as, cash flow hedges. The fair value of the interest rate swaps are determined using an
income approach, whereby future settlements under the swaps are converted into a single present value, with fair value being based on
the value of current market expectations about those future amounts. Changes in the fair value are recognized in OCI until the hedged
item is recognized in earnings. However, due to changes in the underlying interest rate environment, the corresponding value in OCI
is subject to change prior to its impact on earnings.
Valuation of Derivative Instruments. The Partnership measures the fair value of its exchange-traded options and futures contracts
(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:84)(cid:88)(cid:82)(cid:87)(cid:72)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:48)(cid:72)(cid:85)(cid:70)(cid:68)(cid:81)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:49)(cid:60)(cid:48)(cid:40)(cid:59)(cid:180)(cid:12)(cid:3)(cid:11)(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:20)(cid:3)(cid:76)(cid:81)(cid:83)(cid:88)(cid:87)s); the fair value of its swap
contracts using quoted forward prices, and the fair value of its interest rate swaps using model-derived valuations driven by observable
projected movements of the 3-month LIBOR (Level 2 inputs); and the fair value of its over-the-counter options contracts using Level
(cid:22)(cid:3)(cid:76)(cid:81)(cid:83)(cid:88)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)-the-counter options contracts are valued based on an internal option model. The inputs utilized in the
model are based on publicly available information as well as broker quotes. The significant unobservable inputs used in the fair value
(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)-the-counter options contracts are interest rate and market volatility.
Long-Lived Assets
Property, plant and equipment. Property, plant and equipment are stated at cost. Expenditures for maintenance and routine repairs are
(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3) (cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3)(cid:69)(cid:72)(cid:87)(cid:87)(cid:72)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:83)(cid:85)(cid:72)(cid:70)(cid:76)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)maining
useful life. The Partnership capitalizes costs incurred in the acquisition and modification of computer software used internally,
including consulting fees and costs of employees dedicated solely to a specific project. At the time assets are retired, or otherwise
disposed of, the asset and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is
recognized within operating expenses. Depreciation is determined under the straight-line method based upon the estimated useful life
of the asset as follows:
Buildings
Building and land improvements
Transportation equipment
Storage facilities
Office equipment
Tanks and cylinders
Computer software
40 Years
20 Years
3-10 Years
7-30 Years
5-10 Years
10-40 Years
3-7 Years
The weighted average estimated usef(cid:88)(cid:79)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:68)(cid:81)(cid:78)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:92)(cid:79)(cid:76)(cid:81)(cid:71)(cid:72)(cid:85)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:21)(cid:21)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)
and 28 years, respectively.
F-10
The Partnership reviews the recoverability of long-lived assets when circumstances occur that indicate that the carrying value of an
asset may not be recoverable. Such circumstances include a significant adverse change in the manner in which an asset is being used,
current operating losses combined with a history of operating losses experienced by the asset or a current expectation that an asset will
be sold or otherwise disposed of before the end of its previously estimated useful life. Evaluation of possible impairment is based on
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:76)(cid:86)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:3)(cid:72)xpected to result from the use and
eventual disposition of the asset. If the expected undiscounted cash flows are less than the carrying amount of such asset, an
impairment loss is recorded as the amount by which the carrying amount of an asset exceeds its fair value. The fair value of an asset
will be measured using the best information available, including prices for similar assets or the result of using a discounted cash flow
valuation technique.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is subject to an
impairment review at a reporting unit level, on an annual basis as of the end of fiscal July of each year, or when an event occurs or
circumstances change that would indicate potential impairment.
The Partnership has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to
a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing
the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less
than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise,
then it is required to perform the first step of the two-step impairment test.
Under the two-step impairment test, the Partnership assesses the carrying value of goodwill at a reporting unit level based on an
estimate of the fair value of the respective reporting unit. Fair value of the reporting unit is estimated using discounted cash flow
analyses taking into consideration estimated cash flows in a ten-year projection period and a terminal value calculation at the end of
the projection period. If the fair value of the reporting unit exceeds its carrying value, the goodwill associated with the reporting unit
is not considered to be impaired. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized to
the extent that the carrying amount of the associated goodwill, if any, exceeds the implied fair value of the goodwill.
Other Intangible Assets. Other intangible assets consist of customer relationships, tradenames, non-compete agreements and leasehold
interests. Customer relationships and tradenames are amortized under the straight-line method over the estimated period for which the
assets are expected to contribute to the future cash flows of the reporting entities to which they relate, ending periodically between
fiscal years 2017 and 2025. Non-compete agreements are amortized under the straight-line method over the periods of the related
agreements. Leasehold interests are amortized under the straight-line method over the shorter of the lease term or the useful life of the
related assets, through fiscal 2025.
Accrued Insurance. Accrued insurance represents the estimated costs of known and anticipated or unasserted claims for self-insured
liabilities re(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:15)(cid:3) (cid:90)(cid:82)(cid:85)(cid:78)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:82)(cid:69)(cid:76)(cid:79)(cid:72)(cid:3) (cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)(cid:3) (cid:3) (cid:36)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)
unasserted claims arising from unreported incidents are based on an analysis of historical claims data. For each claim, the Partnership
records a provision up to the estimated amount of the probable claim utilizing actuarially determined loss development factors applied
to actual claims data. The Partnership maintains insurance coverage such that its net exposure for insured claims is limited to the
(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:70)(cid:79)(cid:68)(cid:76)(cid:80)(cid:86)(cid:3)(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:70)(cid:68)(cid:85)(cid:85)(cid:76)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) liability
that exceeds insurance deductibles, the Partnership records an asset related to the amount of the liability expected to be covered by
insurance.
Pension and Other Postretirement Benefits. The Partnership estimates the rate of return on plan assets, the discount rate used to
estimate the present value of future benefit obligations and the expected cost of future health care benefits in determining its annual
(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:83)(cid:82)(cid:86)(cid:87)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:82)(cid:70)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:11)(cid:179)(cid:54)(cid:50)(cid:36)(cid:180)(cid:12)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:80)(cid:82)(cid:85)(cid:87)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)s (RP-
2014) and a new mortality improvement scale (MP-2014). The Partnership uses SOA and other actuarial life expectancy information
when developing the annual mortality assumptions for the pension and postretirement benefit plans, which are used to measure net
periodic benefit costs and the obligation under these plans.
Customer Deposits and Advances. The Partnership offers different payment programs to its customers including the ability to
prepay for usage and to make equal monthly payments on account under a budget payment plan. The Partnership establishes a
liability within customer deposits and advances for amounts collected in advance of deliveries.
Income Taxes. As discussed in Note 1, the Partnership structure consists of two limited partnerships, the Partnership and the
Operating Partnership, and the Corporate Entities. For federal income tax purposes, as well as for state income tax purposes in the
majority of the states in which the Partnership operates, the earnings attributable to the Partnership and the Operating Partnership are
included in the tax returns of the Common Unitholders. As a result, except for certain states that impose an income tax on
(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:86)(cid:15)(cid:3)(cid:81)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:73)(cid:79)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)ngs of the
Partnership and the Operating Partnership. The earnings attributable to the Corporate Entities are subject to federal and state income
F-11
tax. Net earnings for financial statement purposes may differ significantly from taxable income reportable to Common Unitholders as
a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation
requirements under the Partnership Agreement.
Income taxes for the Corporate Entities are provided based on the asset and liability approach to accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the
carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are
expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
when the change is enacted. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets when it is more
likely than not that the full amount will not be realized.
Loss Contingencies.
In the normal course of business, the Partnership is involved in various claims and legal proceedings. The
Partnership records a liability for such matters when it is probable that a loss has been incurred and the amounts can be reasonably
estimated. The liability includes probable and estimable legal costs to the point in the legal matter where the Partnership believes a
conclusion to the matter will be reached. When only a range of possible loss can be established, the most probable amount in the
range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in
the range is accrued.
Asset Retirement Obligations. Asset retirement obligations apply to legal obligations associated with the retirement of long-lived
assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset. The Partnership
has recognized asset retirement obligations for certain costs to remove and properly dispose of underground and aboveground fuel oil
storage tanks and contractually mandated removal of leasehold improvements.
The Partnership records a liability at fair value for the estimated cost to settle an asset retirement obligation at the time that liability is
incurred, which is generally when the asset is purchased, constructed or leased. The Partnership records the liability, which is referred
to as the asset retirement obligation, when it has a legal obligation to incur costs to retire the asset and when a reasonable estimate of
the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, the Partnership
(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:90)(cid:75)(cid:72)(cid:81)(cid:3)(cid:86)(cid:88)(cid:73)(cid:73)(cid:76)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:182)(cid:86)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:17)
Unit-Based Compensation. The Partnership recognizes compensation cost over the respective service period for employee services
received in exchange for an award of equity or equity-based compensation based on the grant date fair value of the award. The
Partnership measures liability awards under an equity-based payment arrangement based on remeasurement of the awa(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)
at the conclusion of each interim and annual reporting period until the date of settlement, taking into consideration the probability that
the performance conditions will be satisfied.
Costs and Expenses. The cost of products sold reported in the consolidated statements of operations represents the weighted average
unit cost of propane, fuel oil and refined fuels, as well as the cost of natural gas and electricity sold, including transportation costs to
(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:92)(cid:3)(cid:83)(cid:82)(cid:76)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:70)(cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:3)(cid:38)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:86)(cid:82)(cid:79)(cid:71)(cid:3)
(cid:68)(cid:79)(cid:86)(cid:82)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:86)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:68)(cid:81)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3) (cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3) (cid:86)(cid:82)(cid:79)(cid:71)(cid:3) (cid:82)(cid:85)(cid:3) (cid:76)(cid:81)(cid:86)(cid:87)(cid:68)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:70)(cid:72)(cid:81)ters
computed on a basis that approximates the average cost of the products. Unrealized (non-cash) gains or losses from changes in the
fair value of commodity derivative instruments that are not designated as cash flow hedges are recorded in each reporting period
within cost of products sold. Cost of products sold is reported exclusive of any depreciation and amortization as such amounts are
reported separately within the consolidated statements of operations.
(cid:36)(cid:79)(cid:79)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:15)(cid:3) (cid:73)(cid:88)(cid:72)(cid:79)(cid:3) (cid:82)(cid:76)(cid:79)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) refined fuels distribution and appliance sales and service
operations, as well as the natural gas and electricity marketing business, are reported within operating expenses in the consolidated
statements of operations. These operating expenses include the compensation and benefits of field and direct operating support
personnel, costs of operating and maintaining the vehicle fleet, overhead and other costs of the purchasing, training and safety
departments and other direct and indirect costs of operating t(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:70)(cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:86)(cid:17)
All costs of back office support functions, including compensation and benefits for executives and other support functions, as well as
other costs and expenses to maintain finance and accounting, treasury, legal, human resources, corporate development and the
information systems functions are reported within general and administrative expenses in the consolidated statements of operations.
Net Income Per Unit. Computations of basic income per Common Unit are performed by dividing net income by the weighted
(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:11)(cid:68)(cid:81)(cid:71)(cid:3)(cid:88)(cid:81)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)cted
Unit Plan, as defined below, to retirement-eligible grantees. Computations of diluted income per Common Unit are performed by
dividing net income by the weighted average number of outstanding Common Units and unissued restricted units granted under the
Restricted Unit Plan. In computing diluted net income per Common Unit, weighted average units outstanding used to compute basic
F-12
net income per Common Unit were increased by 220,112, 256,794 and 269,867 units for fiscal 2016, 2015 and 2014, respectively, to
reflect the potential dilutive effect of the unvested restricted units outstanding using the treasury stock method.
Comprehensive Income. The Partnership reports comprehensive income (the total of net income and all other non-owner changes in
(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:12)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:17)(cid:3)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)ive income includes unrealized gains
and losses on derivative instruments accounted for as cash flow hedges and reclassifications of realized losses on cash flow hedges
into earnings, amortization of net actuarial losses and prior service credits into earnings and changes in the funded status of pension
and other postretirement benefit plans, and net actuarial losses recognized in earnings associated with pension settlements.
Recently Issued Accounting Pronouncements.
In August 2016, the Financial Accounti(cid:81)(cid:74)(cid:3) (cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:11)(cid:179)(cid:41)(cid:36)(cid:54)(cid:37)(cid:180)(cid:12)(cid:3) (cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)
(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3)(cid:56)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:180)(cid:12)(cid:3)(cid:49)(cid:82)(cid:17)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)-(cid:20)(cid:24)(cid:15)(cid:3)(cid:179)(cid:38)(cid:79)(cid:68)(cid:86)(cid:86)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:53)(cid:72)(cid:70)(cid:72)(cid:76)(cid:83)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:51)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:180)(cid:3)(cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)-(cid:20)(cid:24)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)
This update addresses eight specific cash flow issues and is intended to reduce diversity in practice on how certain cash receipts and
cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for the first interim period within
annual reporting periods beginning after December 15, 2017, which will be the P(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:21)(cid:19)(cid:20)(cid:28)(cid:17)(cid:3) (cid:3) (cid:40)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)
adoption of ASU 2016-15 is permitted. The Partnership is currently evaluating the impact that the standard will have on the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)cash flows.
In March 2016, the FASB issued ASU No. 2016-(cid:19)(cid:28)(cid:15)(cid:3)(cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)sation - Stock Compensation (Topic 718): Improvements to Employee
Share-(cid:37)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:180)(cid:3)(cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)-(cid:19)(cid:28)(cid:180)(cid:12)(cid:17)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:88)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:76)(cid:80)(cid:83)(cid:79)(cid:76)(cid:73)(cid:92)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:85)(cid:72)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)-based
compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-
09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016, which will be the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:21)(cid:19)(cid:20)(cid:27)(cid:17)(cid:3) (cid:40)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3) (cid:68)(cid:71)(cid:82)(cid:83)(cid:87)ion of ASU 2016-09 is permitted. The Partnership is currently evaluating the
(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:17)
In February 2016, the FASB issued ASU 2016-(cid:19)(cid:21)(cid:15)(cid:3) (cid:179)(cid:47)(cid:72)(cid:68)(cid:86)(cid:72)(cid:86)(cid:180)(cid:3) (cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:3) (cid:21)(cid:19)(cid:20)6-(cid:19)(cid:21)(cid:180)(cid:12)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3) (cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:91)(cid:76)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)
standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted
changes to lessor accounting. ASU 2016-02 is effective for the first interim period within annual reporting periods beginning after
(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:20)(cid:24)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:21)(cid:19)(cid:17) Early adoption of ASU 2016-02 is permitted. The new
leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial
application, with an option to use certain transition relief. The Partnership is currently evaluating the impact of adopting ASU 2016-
(cid:19)(cid:21)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15) financial position and cash flows.
In April 2015, the FASB issued ASU 2015-(cid:19)(cid:22)(cid:15)(cid:3)(cid:179)(cid:54)(cid:76)(cid:80)(cid:83)(cid:79)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:39)(cid:72)(cid:69)(cid:87)(cid:3)(cid:44)(cid:86)(cid:86)(cid:88)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:38)(cid:82)(cid:86)(cid:87)(cid:86)(cid:180)(cid:3)(cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)-(cid:19)(cid:22)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:88)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)
requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability, consistent with the presentation of original issue debt discounts. ASU 2015-03 is effective for
the first interim period within annual reporting periods beginning after (cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:20)(cid:24)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:90)(cid:76)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)
quarter of fiscal 2017. In August 2015, the FASB issued ASU No. 2015-15, which provides additional guidance related to the
presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. An entity may present debt
issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit
arrangement, regardless of whether there are any outstanding borrowings. Other than the reclassification of existing unamortized debt
issuance costs on the balance sheet, the adoption of ASU 2015-(cid:19)(cid:22)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:81)(cid:82)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:17)
In May 2014, the FASB issued ASU 2014-(cid:19)(cid:28)(cid:3)(cid:179)(cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:180)(cid:3)(cid:11)(cid:179)(cid:36)(cid:54)(cid:56)(cid:3)(cid:21)(cid:19)(cid:20)(cid:23)-(cid:19)(cid:28)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:88)(cid:83)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3)(cid:68)(cid:3)
principles-based approach to revenue recognition, requiring revenue recognition to depict the transfer of goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. The ASU provides a five-step model to be applied to all contracts with customers. The five steps are to identify the
contract(s) with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the
transaction price to the performance obligations in the contract and recognize revenue when each performance obligation is satisfied.
On July 9, 2015, the FASB finalized a one-year deferral of the effective date of ASU 2014-09. The revenue standard is therefore
effective for the first interim period within annual reporting periods beginning after December 15, 2017, which will be the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:28)(cid:17)(cid:3)(cid:3)(cid:40)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) as of the original effective date is permitted. ASU 2014-09 can be applied
either retrospectively to either each prior reporting period presented or with the cumulative effect of initially applying the update
recognized at the date of the initial application along with additional disclosures. While the Partnership is still in the process of
evaluating the potential impact of ASU 2014-09, it does not expect the adoption of ASU 2014-09 will have a material impact on the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)financial position or cash flows.
F-13
3.
Acquisition and Disposition of Businesses
On April 22, 2016, the Operating Partnership sold certain assets and operations in a non-strategic market of its propane segment for
$26,000, including $5,000 representing non-compete consideration that will be received over a five-year period, resulting in a gain of
$9,769 that was recognized during the third quarter of fiscal 2016. The corresponding net assets and results of operations were not
(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)results of operations, financial position and cash flows.
(cid:50)(cid:81)(cid:3)(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:20)(cid:24)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:56)(cid:54)(cid:36)(cid:3)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:47)(cid:47)(cid:38)(cid:3)(cid:11)(cid:179)(cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:56)(cid:54)(cid:36)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)ne
marketer headquartered in Margate, Florida, and its affiliate companies, for $45,000, including $3,000 for non-compete consideration,
plus working capital acquired. As of September 24, 2016, $42,945 was paid, of which $41,250 was paid at closing, and the remainder
of the purchase price will be funded in accordance with the terms of the non-compete agreements. The acquisition of Propane USA
(cid:90)(cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:88)(cid:85)(cid:86)(cid:88)(cid:68)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:85)(cid:72)(cid:79)(cid:92)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:82)(cid:81)(cid:3)(cid:75)(cid:68)(cid:81)(cid:71)(cid:17) The purchase
price allocation and results of operations of Propane U(cid:54)(cid:36)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
statement of operations.
4.
Distributions of Available Cash
The Partnership makes distributions to its partners no later than 45 days after the end of each fiscal quarter in an aggregate amount
equal to its Available Cash for such quarter. Available Cash, as defined in the Partnership Agreement, generally means all cash on
hand at the end of the respective fiscal quarter less the amount of cash reserves established by the Board of Supervisors in its
(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:85)(cid:72)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) business,
the payment of debt principal and interest and for distributions during the next four quarters.
The following summarizes the quarterly distributions per Common Unit declared and paid in respect of each of the quarters in the
three fiscal years in the period ended September 24, 2016:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
5.
Selected Balance Sheet Information
Inventories consist of the following:
$
Fiscal
2016
Fiscal
2015
Fiscal
2014
$
0.8875
0.8875
0.8875
0.8875
$
0.8750
0.8875
0.8875
0.8875
0.8750
0.8750
0.8750
0.8750
Propane, fuel oil and refined fuels and natural gas
Appliances
As of
September 24,
2016
September 26,
2015
$
$
43,905 $
1,447
45,352 $
45,918
1,768
47,686
The Partnership enters into contracts for the supply of propane, fuel oil and natural gas. Such contracts generally have a term of one
year subject to annual renewal, with purchase quantities specified at the time of order and costs based on market prices at the date of
delivery.
F-14
Property, plant and equipment consist of the following:
As of
Land and improvements
Buildings and improvements
Transportation equipment
Storage facilities
Equipment, primarily tanks and cylinders
Computer Systems
Construction in progress
Less: accumulated depreciation
$
September 24,
2016
193,194 $
109,345
57,823
110,528
845,650
52,643
3,845
1,373,028
(630,899)
742,129 $
September 26,
2015
195,430
104,998
58,650
110,033
833,479
51,039
7,177
1,360,806
(579,748)
781,058
$
Depreciation expense for fiscal 2016, 2015 and 2014 amounted to $72,471, $75,920 and $78,921, respectively.
6. Goodwill and Other Intangible Assets
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)2016 and fiscal 2015 annual goodwill impairment review resulted in no adjustments to the carrying amount of
goodwill.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:85)(cid:85)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:72)(cid:74)ments are as follows:
Balance as of September 26, 2015
Goodwill
Accumulated adjustments
Fiscal 2016 Activity
Goodwill acquired (1)
Goodwill disposed (2)
Balance as of September 24, 2016
Goodwill
Accumulated adjustments
Propane
Fuel oil and
refined fuels
Natural gas and
electricity
Total
$ 1,075,091
(cid:178)
$ 1,075,091
$
14,710
(7,504)
$ 1,082,297
(cid:178)
$ 1,082,297
$
$
$
$
$
10,900 $
(6,462)
4,438 $
7,900
(cid:178)
7,900
$ 1,093,891
(6,462)
$ 1,087,429
(cid:178) $
(cid:178)
(cid:178) $
(cid:178)
14,710
(7,504)
10,900 $
(6,462)
4,438 $
7,900
(cid:178)
7,900
$ 1,101,097
(6,462)
$ 1,094,635
F-15
Other intangible assets consist of the following:
As of
Customer relationships (1) (2)
Non-compete agreements (1)
Tradenames
Other
Less: accumulated amortization
Customer relationships
Non-compete agreements
Tradenames
Other
$
September 24,
2016
492,656 $
31,040
3,482
1,967
529,145
September 26,
2015
471,829
27,815
3,482
1,967
505,093
(225,634)
(22,533)
(3,482)
(1,167)
(252,816)
276,329 $
(173,823)
(19,337)
(3,069)
(1,075)
(197,304)
307,789
$
(1) Reflects the impact from the Propane USA acquisition (Note 3).
(2) Reflects the impact from the disposition of certain assets and operations in a non-strategic market of the propane
segment (Note 3).
Aggregate amortization expense related to other intangible assets for fiscal 2016, 2015 and 2014 was $57,145, $57,374 and $57,478,
respectively. Aggregate amortization expense for each of the five succeeding fiscal years related to other intangible assets held as of
September 24, 2016 is estimated as follows: 2017 - $56,454; 2018 - $56,094; 2019 - $55,071; 2020 - $54,086; and 2021 - $44,577.
7.
Income Taxes
For federal income tax purposes, as well as for state income tax purposes in the majority of the states in which the Partnership
operates, the earnings attributable to the Partnership and the Operating Partnership are not subject to income tax at the partnership
level. With the exception of those states that impose an entity-level income tax on partnerships, the taxable income or loss attributable
to the Partnership and to the Operating Partnership, which may vary substantially from the income (loss) before income taxes reported
by the Partnership in the consolidated statement of operations, are includable in the federal and state income tax returns of the
Common Unitholders. The agg(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)(cid:71)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)
(cid:70)(cid:68)(cid:81)(cid:81)(cid:82)(cid:87)(cid:3)(cid:69)(cid:72)(cid:3)(cid:85)(cid:72)(cid:68)(cid:71)(cid:76)(cid:79)(cid:92)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:71)(cid:82)(cid:72)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:17)
As described in Note 1 and Note 2, the earnings of the Corporate Entities are subject to corporate level federal and state income tax.
However, based upon past performance, the Corporate Entities are currently reporting an income tax provision composed primarily of
minimum state income taxes. A full valuation allowance has been provided against the deferred tax assets based upon an analysis of
all available evidence, both negative and positive at the balance sheet date, which, taken as a whole, indicates that it is more likely
than n(cid:82)(cid:87)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:86)(cid:88)(cid:73)(cid:73)(cid:76)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3) (cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3) (cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:90)(cid:76)(cid:79)(cid:79)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:69)(cid:72)(cid:3) (cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:88)(cid:87)(cid:76)(cid:79)(cid:76)(cid:93)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3) (cid:3) (cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:76)(cid:70)(cid:3) (cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:15)
among other things, the nature and amount of the taxable income and expense items, the expected timing of when assets will be used
or liabilities will be required to be reported and the reliability of historical profitability of businesses expected to provide future
earnings. Furthermore, management considered tax-planning strategies it could use to increase the likelihood that the deferred tax
assets will be realized.
F-16
(cid:55)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:87)(cid:68)(cid:91)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) is
composed primarily of state income taxes in the few states that impose taxes on partnerships and minimum state income taxes on the
Corporate Entities, consists of the following:
Current
Federal
State and local
Deferred
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
$
7
581
588
(cid:178)
588
$
$
23
677
700
(cid:178)
700
$
$
10
757
767
(cid:178)
767
The provision for income taxes differs from income taxes computed at the United States federal statutory rate as a result of the
following:
Income tax provision at federal statutory tax rate
Impact of Partnership income not subject to
federal income taxes
Permanent differences
Change in valuation allowance
State income taxes
Other
Provision for income taxes - current
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
5,260
$
29,768
$
33,346
(9,844)
182
4,737
(211)
464
588
$
(32,148)
210
2,181
253
436
700
$
(38,919)
86
5,458
(60)
856
767
$
The components of net deferred taxes and the related valuation allowance using currently enacted tax rates are as follows:
Deferred tax assets:
Net operating loss carryforwards
Allowance for doubtful accounts
Inventory
Deferred revenue
Derivative instruments
AMT credit carryforward
Other accruals
Total deferred tax assets
Deferred tax liabilities:
Derivative instruments
Intangible assets
Property, plant and equipment
Total deferred tax liabilities
Net deferred tax assets
Valuation allowance
Net deferred tax assets
Year Ended
September 24,
2016
September 26,
2015
$
$
60,628
184
457
1,091
78
1,086
1,101
64,625
(cid:178)
775
5,068
5,843
58,782
(58,782)
$
(cid:178) $
55,033
340
395
1,241
(cid:178)
1,086
1,718
59,813
142
312
5,314
5,768
54,045
(54,045)
(cid:178)
F-17
8.
Long-Term Borrowings
Long-term borrowings consist of the following:
7.375% senior notes, due August 1, 2021, including
unamortized premium of $16,992 and $19,927,
respectively
5.5% senior notes, due June 1, 2024
5.75% senior notes, due March 1, 2025
Revolving Credit Facility, due March 3, 2021
Revolving Credit Facility, due January 5, 2017
As of
September 24,
2016
September 26,
2015
$
363,172 $
525,000
250,000
100,000
(cid:178)
366,107
525,000
250,000
(cid:178)
100,000
$ 1,238,172 $ 1,241,107
Senior Notes
2018 Senior Notes and 2021 Senior Notes
On August 1, 2012, the Partnership and its 100%-owned subsidiary, Suburban Energy Finance Corp., issued $496,557 in aggregate
(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:88)(cid:81)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:26)(cid:17)(cid:24)(cid:8)(cid:3) (cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3) (cid:71)(cid:88)(cid:72)(cid:3) (cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3) (cid:20)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:27)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:21)(cid:19)(cid:20)(cid:27)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:7)(cid:24)(cid:19)(cid:22)(cid:15)(cid:23)(cid:23)(cid:22)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)
principal amount of unregistered 7.375% senior notes due (cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3) (cid:20)(cid:15)(cid:3) (cid:21)(cid:19)(cid:21)(cid:20)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:21)(cid:19)(cid:21)(cid:20)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:3) (cid:83)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:72)(cid:3) (cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:76)(cid:81)(cid:3)
connection with the Inergy Propane Acquisition. Based on market rates for similar issues, the 2018 Senior Notes and 2021 Senior
Notes were valued at 106.875% and 108.125%, respectively, of the principal amount, on the Acquisition Date as they were issued in
(cid:72)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:44)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:20)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:3)(cid:86)(cid:72)(cid:80)(cid:76)-annual interest payments in February and
August. On December 19, 2012, the Partnership completed an offer to exchange its then-outstanding unregistered 7.5% senior notes
due 2018 and 7.375% senior notes due 2021 for an equal principal amount of 7.5% senior notes due 2018 and 7.375% senior notes due
2021, respectively, that have been registered under the Securities Act of 1933, as amended.
On August 2, 2013, the Partnership repurchased, pursuant to an optional redemption, $133,400 of its 2021 Senior Notes using net
proceeds from a May 2013 public offering of Common Units and net proceeds from the un(cid:71)(cid:72)(cid:85)(cid:90)(cid:85)(cid:76)(cid:87)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:72)(cid:91)(cid:72)(cid:85)(cid:70)(cid:76)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)-allotment
option to purchase additional Common Units. In addition, on August 6, 2013, the Partnership repurchased $23,863 of 2021 Senior
Notes in a private transaction using cash on hand.
On May 27, 2014, the Partnership repurchased and satisfied and discharged all of its 2018 Senior Notes with net proceeds from the
issuance of the 2024 Senior Notes, as defined below, and cash on hand pursuant to a tender offer and redemption. In connection with
this tender offer and redemption, the Partnership recognized a loss on the extinguishment of debt of $11,589 consisting of $31,633 for
the redemption premium and related fees, as well as the write-off of $5,230 and ($25,274) in unamortized debt origination costs and
unamortized premium, respectively.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:20)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:72)(cid:72)(cid:80)(cid:68)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:82)(cid:79)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)6, in each
case at the redemption prices described in the table below, together with any accrued and unpaid interest to date of the redemption.
Year
2016
2017
2018
2019 and thereafter
Percentage
103.688%
102.459%
101.229%
100.000%
2024 Senior Notes
On May 27, 2014, the Partnership and its 100%-owned subsidiary, Suburban Energy Finance Corp., completed a public offering of
(cid:7)(cid:24)(cid:21)(cid:24)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:24)(cid:17)(cid:24)(cid:8)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:45)(cid:88)(cid:81)(cid:72)(cid:3)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:21)(cid:23)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:21)(cid:19)(cid:21)(cid:23)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:23)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)s
were issued at 100% of the principal amount and require semi-annual interest payments in June and December. The net proceeds from
the issuance of the 2024 Senior Notes, along with cash on hand, were used to repurchase and satisfy and discharge all of the 2018
Senior Notes.
F-18
(cid:55)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:23)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:72)(cid:72)(cid:80)(cid:68)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)n, in whole or in part, at any time on or after June 1, 2019, in each
case at the redemption prices described in the table below, together with any accrued and unpaid interest to the date of the redemption.
Year
2019
2020
2021
2022 and thereafter
Percentage
102.750%
101.833%
100.917%
100.000%
2025 Senior Notes
On February 25, 2015, the Partnership and its 100%-owned subsidiary, Suburban Energy Finance Corp., completed a public offering
of $250,000 in aggregate principal am(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:24)(cid:17)(cid:26)(cid:24)(cid:8)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:21)(cid:24)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:21)(cid:19)(cid:21)(cid:24)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:21)(cid:19)(cid:21)(cid:24)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)
Notes were issued at 100% of the principal amount and require semi-annual interest payments in March and September. The net
proceeds from the issuance of the 2025 Senior Notes, along with cash on hand, were used to repurchase and satisfy and discharge all
(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:79)(cid:92)(cid:3)(cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:26)(cid:17)(cid:22)(cid:26)(cid:24)(cid:8)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:81)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:20)(cid:24)(cid:15)(cid:3)(cid:21)(cid:19)(cid:21)(cid:19)(cid:3)(cid:11)(cid:179)(cid:21)(cid:19)(cid:21)(cid:19)(cid:3)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:82)ffer
and redemption, the Partnership recognized a loss on the extinguishment of debt of $15,072 consisting of $11,124 for the redemption
premium and related fees, as well as the write-off of $2,855 and $1,093 in unamortized debt origination costs and unamortized
discount, respectively.
The 2025 S(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:71)(cid:72)(cid:72)(cid:80)(cid:68)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:82)(cid:79)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)March 1, 2020, in each
case at the redemption prices described in the table below, together with any accrued and unpaid interest to the date of the redemption.
Year
2020
2021
2022
2023 and thereafter
Percentage
102.875%
101.917%
100.958%
100.000%
(cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:21)(cid:19)(cid:21)(cid:20)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3) (cid:21)(cid:19)(cid:21)(cid:23)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:21)(cid:19)(cid:21)(cid:24)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3) (cid:11)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)
No(cid:87)(cid:72)(cid:86)(cid:180)(cid:12)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:88)(cid:81)(cid:86)(cid:72)(cid:70)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:68)(cid:81)(cid:78)(cid:3)(cid:86)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:82)(cid:85)(cid:71)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:69)(cid:87)(cid:72)(cid:71)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)nt
with any future senior indebtedness. The Senior Notes are structurally subordinated to, which means they rank effectively behind, any
debt and other liabilities of the Operating Partnership. The Partnership is permitted to redeem some or all of the Senior Notes at
redemption prices and times as specified in the indentures governing the Senior Notes. The Senior Notes each have a change of
control provision that would require the Partnership to offer to repurchase the notes at 101% of the principal amount repurchased, if a
change of control, as defined in the indenture, occurs and is followed by a rating decline (a decrease in the rating of the notes by either
(cid:48)(cid:82)(cid:82)(cid:71)(cid:92)(cid:182)(cid:86)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:51)(cid:82)(cid:82)(cid:85)(cid:182)(cid:86)(cid:3)(cid:53)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:74)(cid:85)(cid:68)(cid:71)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:12)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:28)(cid:19)(cid:3)(cid:71)(cid:68)(cid:92)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82) f
the change of control.
Credit Agreement
The Operating Partnership has an amended and restated credit agreement entered into on January 5, 2012, as amended on August 1,
(cid:21)(cid:19)(cid:20)(cid:21)(cid:15)(cid:3) (cid:48)(cid:68)(cid:92)(cid:3) (cid:28)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:23)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3) (cid:22)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:11)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:36)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) (cid:73)(cid:76)(cid:89)(cid:72)-year $500,000
(cid:85)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:73)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:53)(cid:72)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:41)(cid:68)(cid:70)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:180)(cid:12)(cid:15)(cid:3) (cid:82)(cid:73)(cid:3) (cid:90)hich $100,000 was outstanding as of September 24, 2016 and
September 26, 2015. Borrowings under the Revolving Credit Facility may be used for general corporate purposes, including working
capital, capital expenditures and acquisitions. The Operating Partnership has the right to prepay any borrowings under the Revolving
Credit Facility, in whole or in part, without penalty at any time prior to maturity. In connection with the Amended Credit Agreement,
the Partnership recognized a non-cash charge of $292 to write-off a portion of unamortized debt origination costs of the previous
credit agreement.
The amendment and restatement of the credit agreement on January 5, 2012 amended the previous credit agreement to, among other
things, extend the maturity date from June 25, 2013 to January 5, 2017, reduce the borrowing rate and commitment fees, and amend
certain affirmative and negative covenants.
The amendment on August 1, 2012 also amended certain restrictive and affirmative covenants applicable to the Operating Partnership,
its subsidiaries and the Partnership, as well as certain financial covenants. The amendment on May 9, 2014 made certain technical
amendments with respect to agreements related to debt refinancing.
F-19
The amendment on March 3, 2016 amends and restates the previous amended and restated credit agreement to, among other things,
extend the maturity date from January 5, 2017 to March 3, 2021, reduce the borrowing rate, amend certain affirmative and negative
covenants and increase the revolving credit commitments from $400,000 to $500,000. The amendment also amended certain
restrictive and affirmative covenants applicable to the Operating Partnership, its subsidiaries and the Partnership, as well as certain
financial covenants, including (a) requiring (cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:38)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)
Agreement, to be not less than 2.5 to 1.0 as of the end of any fiscal quarter and (b) prohibiting the total consolidated leverage ratio, as
defined in the Amended Credit Agreement, of the Partnership from being greater than 5.5 to 1.0 as of the end of any fiscal quarter.
The Partnership and certain subsidiaries of the Operating Partnership act as guarantors with respect to the obligations of the Operating
Partnership under the Amended Credit Agreement pursuant to the terms and conditions set forth therein. The obligations under the
Amended Credit Agreement are secured by liens on substantially all of the personal property of the Partnership, the Operating
Partnership and their subsidiaries, as well as mortgages on certain real property.
Borrowings under the Revolving Credit Facility of the Amended Credit Agreement bear interest at prevailing interest rates based
(cid:88)(cid:83)(cid:82)(cid:81)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:47)(cid:44)(cid:37)(cid:50)(cid:53)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:87)he applicable margin, or the base rate, defined as the higher of the Federal
(cid:41)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:53)(cid:68)(cid:87)(cid:72)(cid:3) (cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:242)(cid:3)(cid:82)(cid:73)(cid:3)(cid:20)(cid:8)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:68)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:81)(cid:78)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:72)(cid:3) (cid:85)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:47)(cid:44)(cid:37)(cid:50)(cid:53)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:20)(cid:8)(cid:15)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:70)(cid:68)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:80)(cid:68)(cid:85)(cid:74)(cid:76)n.
The applicable margin is dependent upon the Partne(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:86)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Revolving Credit Facility. As of September 24, 2016, the interest rate for the Revolving Credit Facility was approximately 3.1%. The
interest rate and the applicable margin will be reset following the end of each calendar quarter.
In connection with the January 5, 2012 amendment, the Operating Partnership entered into an interest rate swap agreement with a
notional amount of $100,000, an effective date of June 25, 2013 and a termination date of January 5, 2017. Under this interest rate
swap agreement, the Operating Partnership will pay a fixed interest rate of 1.63% to the issuing lender on the notional principal
amount outstanding, and the issuing lender will pay the Operating Partnership a floating rate, namely LIBOR, on the same notional
principal amount. The interest rate swap has been designated as a cash flow hedge.
In addition, at the time the March 3, 2016 Amended Credit Agreement was entered into, the Operating Partnership had letters of credit
issued under the revolving credit facility of the previous credit agreement, all of which have been rolled into the Revolving Credit
Facility of the Amended Credit Agreement. As of September 24, 2016, the Partnership had standby letters of credit issued under the
Revolving Credit Facility in the aggregate amount of $43,256 which expire periodically through April 3, 2017.
The Amended Credit Agreement and the Senior Notes both contain various restrictive and affirmative covenants applicable to the
Operating Partnership, its subsidiaries and the Partnership, respectively, including (i) restrictions on the incurrence of additional
indebtedness, and (ii) restrictions on certain liens, investments, guarantees, loans, advances, payments, mergers, consolidations,
distributions, sales of assets and other transactions. Under the Amended Credit Agreement and the indentures governing the Senior
Notes, the Operating Partnership and the Partnership are generally permitted to make cash distributions equal to available cash, as
defined, as of the end of the immediately preceding quarter, if no event of default exists or would exist upon making such
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3) (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) consolidated fixed charge coverage
ratio, as defined, is greater than 1.75 to 1. The Partnership and the Operating Partnership were in compliance with all covenants and
terms of the Senior Notes and the Amended Credit Agreement as of September 24, 2016.
Debt origination costs representing the costs incurred in connection with the placement of, and the subsequent amendment to, long-
term borrowings are capitalized within other assets and amortized on a straight-line basis over the term of the respective debt
agreements. During fiscal 2016, the Partnership recognized charges of $292 to write-off unamortized debt origination costs and
capitalized $2,678 in costs incurred in connection with the amendments to the Amended Credit Agreement. During fiscal 2015, the
Partnership recognized charges of $2,855 to write-off unamortized debt origination costs associated with the tender offer and
redemption of its 2020 Senior Notes. Other assets at September 24, 2016 and September 26, 2015 include debt origination costs with
a net carrying amount of $17,391 and $18,458, respectively.
The aggregate amounts of long-term debt maturities subsequent to September 24, 2016 are as follows: fiscal 2017: $-0-; fiscal 2018:
$-0-; fiscal 2019: $-0-; fiscal 2020: $-0-; fiscal 2021: $446,180; and thereafter: $775,000.
9.
Unit-Based Compensation Arrangements
As described in Note 2, the Partnership recognizes compensation cost over the respective service period for employee services
received in exchange for an award of equity, or equity-based compensation, based on the grant date fair value of the award. The
Partnership measures liability awards under an equity-based payment arrangement based on re-(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:90)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)
at the conclusion of each interim and annual reporting period until the date of settlement, taking into consideration the probability that
the performance conditions will be satisfied.
F-20
Restricted Unit Plan. On July 22, 2009, the Partnership adopted the Suburban Propane Partners, L.P. 2009 Restricted Unit Plan, as
(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:12)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:88)(cid:87)(cid:75)(cid:82)(cid:85)(cid:76)(cid:93)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:15)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)es
and members of the Board of Supervisors of the Partnership. The total number of Common Units authorized for issuance under the
Restricted Unit Plan was 2,400,000 as of September 24, 2016. In accordance with an August 6, 2013 amendment to the Restricted
(cid:56)(cid:81)(cid:76)(cid:87)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3) (cid:88)(cid:81)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3) (cid:86)(cid:87)(cid:76)(cid:83)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:85)(cid:3) (cid:69)(cid:72)(cid:73)(cid:82)re the
grant date, all restricted unit awards granted after the date of the amendment will vest 33.33% on each of the first three anniversaries
of the award grant date. Prior to the August 6, 2013 amendment, unless otherwise stipulated by the Compensation Committee of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:85)(cid:3)(cid:69)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:53)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:56)(cid:81)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:3)(cid:82)ver time
with 25% of the Common Units vesting at the end of each of the third and fourth anniversaries of the grant date and the remaining
50% of the Common Units vesting at the end of the fifth anniversary of the grant date. The Restricted Unit Plan participants are not
eligible to receive quarterly distributions on, or vote, their respective restricted units until vested. Restricted units cannot be sold or
transferred prior to vesting. The value of the restricted unit is established by the market price of the Common Unit on the date of grant,
net of estimated future distributions during the vesting period. Restricted units are subject to forfeiture in certain circumstances as
defined in the Restricted Unit Plan. Compensation expense for the unvested awards is recognized ratably over the vesting periods and
is net of estimated forfeitures.
The following is a summary of activity in the Restricted Unit Plan:
Outstanding September 28, 2013
Granted
Forfeited
Issued
Outstanding September 27, 2014
Granted
Forfeited
Issued
Outstanding September 26, 2015
Granted
Forfeited
Issued
Outstanding September 24, 2016
Weighted Average
Grant Date Fair
Value Per Unit
Units
527,627 $
256,273
(3,119)
(85,854)
694,927
154,403
(7,607)
(214,324)
627,399
307,559
(12,057)
(268,781)
654,120 $
29.30
37.43
(28.39)
(31.23)
32.07
37.59
(31.04)
(36.68)
31.87
23.62
(25.44)
(35.19)
26.74
As of September 24, 2016, unrecognized compensation cost related to unvested restricted units awarded under the Restricted Unit Plan
amounted to $3,861. Compensation cost associated with the unvested awards is expected to be recognized over a weighted-average
period of 1.2 years. Compensation expense for the Restricted Unit Plan for fiscal 2016, 2015 and 2014 was $8,256, $8,611 and
$7,390, respectively.
Long-Term Incentive Plan. (cid:50)(cid:81)(cid:3)(cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3)(cid:25)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:22)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
2014 Long-(cid:55)(cid:72)(cid:85)(cid:80)(cid:3) (cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:11)(cid:179)(cid:47)(cid:55)(cid:44)(cid:51)(cid:180)(cid:12)(cid:17) The LTIP is a non-qualified, unfunded, long-term incentive plan for officers and key
employees that provides for payment, in the form of cash, of an award of equity-based compensation at the end of a three-year
performance period. The level of compensation earne(cid:71)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:47)(cid:55)(cid:44)(cid:51)(cid:3) (cid:76)(cid:86)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)
ratio over the three-year measurement period. (cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)
average distributable cash flow, as defined by the LTIP, for each of the three years in the measurement period, subject to certain
adjustments as set forth in the LTIP, divided by the amount of annualized cash distributions to be paid by the Partnership, based on the
annualized cash distribution rate at the beginning of the measurement period. Compensation expense, which includes adjustments to
previously recognized compensation expense for current period changes in the fair value of unvested awards, for fiscal 2016, 2015 and
2014 was income of ($1,362) and expense of $1,814 and $120, respectively. The cash payouts in fiscal 2016, 2015 and 2014, which
related to the fiscal 2013, 2012 and 2011 awards, were $1,473, $-0- and $-0-, respectively.
10. Employee Benefit Plans
Defined Contribution Plan. T(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:53)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:54)(cid:68)(cid:89)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:23)(cid:19)(cid:20)(cid:11)(cid:78)(cid:12)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:12)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:80)(cid:82)(cid:86)(cid:87)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:17)(cid:3) (cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:80)(cid:68)(cid:87)(cid:70)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:23)(cid:19)(cid:20)(cid:11)(cid:78)(cid:12)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:68)(cid:3) (cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:182)
elective contributions. The pe(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:86)(cid:79)(cid:76)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:70)(cid:68)(cid:79)(cid:72)(cid:3)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)
F-21
achievement of annual performance targets. These contribution costs were $1,477, $1,844 and $1,848 for fiscal 2016, 2015 and 2014,
respectively.
Defined Pension and Retiree Health and Life Benefits Arrangements
Pension Benefits. The Partnership has a noncontributory defined benefit pension plan which was originally designed to cover all
eligible employees of the Partnership who met certain requirements as to age and length of service. Effective January 1, 1998, the
Partnership amended its defined benefit pension plan to provide benefits under a cash balance formula as compared to a final average
pay formula which was in effect prior to January 1, 1998. Effective January 1, 2000, participation in the defined benefit pension plan
was limited to eligible existing participants on that date with no new participants eligible to participate in the plan. On September 20,
2002, the Board of Supervisors approved an amendment to the defined benefit pension plan whereby, effective January 1, 2003, future
service credits ceased and eligible employees receive interest credits only toward their ultimate retirement benefit.
Contributions, as needed, are made to a trust maintained by the Partnership. Contributions to the defined benefit pension plan are
made by the Partnership in accordance with the Employee Retirement Income Security Act of 1974 minimum funding standards plus
additional amounts made at the discretion of the Partnership, which may be determined from time to time. A minimum required
funding payment of $715 was made by the Partnership in fiscal 2016. There were no such funding requirements for the defined
benefit pension plan in fiscal 2015 or 2014. During the last decade, cash balance plans came under increased scrutiny which resulted
(cid:76)(cid:81)(cid:3)(cid:79)(cid:76)(cid:87)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:72)(cid:68)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:11)(cid:179)(cid:44)(cid:53)(cid:54)(cid:180)(cid:12)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:74)overning
these types of plans. In fiscal 2010(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:44)(cid:53)(cid:54)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3) (cid:68)(cid:3)
favorable determination letter pertaining to the cash balance formula. However, there can be no assurances that future legislative
developments will not have an (cid:68)(cid:71)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:17)
Retiree Health and Life Benefits. The Partnership provides postretirement health care and life insurance benefits for certain retired
employees. Partnership employees hired prior to July 1993 are eligible for postretirement life insurance benefits if they reach a
specified retirement age while working for the Partnership. Partnership employees hired prior to July 1993 and who retired prior to
March 1998 are eligible for postretirement health care benefits if they reached a specified retirement age while working for the
Partnership. Effective March 31, 1998, the Partnership froze participation in its postretirement health care benefit plan, with no new
retirees eligible to participate in the plan. All active employees who were eligible to receive health care benefits under the
postretirement plan subsequent to March 1, 1998, were provided an increase to their accumulated benefits under the cash balance
(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)postretirement health care and life insurance benefit plans are unfunded. Effective January 1, 2006,
the Partnership changed its postretirement health care plan from a self-insured program to one that is fully insured under which the
Partnership pays a portion of the insurance premium on behalf of the eligible participants.
The Partnership recognizes the funded status of pension and other postretirement benefit plans as an asset or liability on the balance
sheet and recognizes changes in the funded status in other comprehensive income (loss) in the year the changes occur. The
Partnership uses the date of its consolidated financial statements as the measurement date of plan assets and obligations.
F-22
Projected Benefit Obligation, Fair Value of Plan Assets and Funded Status. The following tables provide a reconciliation of the
changes in the benefit obligations and the fair value of the plan assets for fiscal 2016 and 2015 and a statement of the funded status for
(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17)(cid:3)(cid:3)(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)e defined benefit pension plan, the accumulated benefit obligation and the projected
benefit obligation are the same.
Reconciliation of benefit obligations:
Benefit obligation at beginning of year
Interest cost
Actuarial loss (gain)
Lump sum benefits paid
Ordinary benefits paid
Benefit obligation at end of year
Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Lump sum benefits paid
Ordinary benefits paid
Fair value of plan assets at end of year
Funded status:
Funded status at end of year
Pension Benefits
Retiree Health and Life
Benefits
2016
2015
2016
2015
$
$
$
$
146,907
5,041
11,547
(5,816)
(7,316)
150,363
104,303
9,191
715
(5,816)
(7,316)
101,077
$
$
$
149,836
5,128
5,239
(5,777)
(7,519)
146,907
117,771
(172)
(cid:178)
(5,777)
(7,519)
104,303
$
$
$
$
15,294
520
(1,198)
(cid:178)
(838)
13,778
$
$
16,954
575
(1,281)
(cid:178)
(954)
15,294
(cid:178) $
(cid:178)
838
(cid:178)
(838)
(cid:178) $
(cid:178)
(cid:178)
954
(cid:178)
(954)
(cid:178)
$
(49,286) $
(42,604) $
(13,778) $
(15,294)
Amounts recognized in consolidated balance sheets
consist of:
Net amount recognized at end of year
Less: current portion
Noncurrent benefit liability
Amounts not yet recognized in net periodic benefit cost
and included in accumulated other comprehensive
income (loss):
Actuarial net (loss) gain
Prior service credits
Net amount recognized in accumulated other
comprehensive (loss) income
$
$
$
$
(49,286) $
(cid:178)
(49,286) $
(42,604) $
(cid:178)
(42,604) $
(13,778) $
922
(12,856) $
(15,294)
1,025
(14,269)
(51,391) $
(cid:178)
(52,836) $
(cid:178)
$
5,764
(cid:178)
4,865
399
(51,391) $
(52,836) $
5,764
$
5,264
The amounts in accumulated other comprehensive loss as of September 24, 2016 that are expected to be recognized as components of
net periodic benefit costs during fiscal 2017 are expenses of $5,201 and credits of ($389) for pension and other postretirement
benefits, respectively.
Plan Assets. (cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:72)(cid:86)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:82)(cid:79)(cid:76)(cid:70)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:42)(cid:88)(cid:76)(cid:71)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:86)(cid:15)(cid:3)
are monitored by a Benefits Committee comprised of six members of management. The Partnership employs a liability driven
(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:92)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:86)(cid:72)(cid:72)(cid:78)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:85)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:89)(cid:82)(cid:79)(cid:68)(cid:87)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:82)(cid:73) (cid:87)(cid:75)(cid:72)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)
funded status. This strategy has resulted in an asset allocation that is largely comprised of investments in funds of fixed income
securities. The target asset mix is as follows: (i) fixed income securities portion of the portfolio should range between 80% and 90%;
and (ii) equity securities portion of the portfolio should range between 10% and 20%.
F-23
The following table presents the actual allocation of assets held in trust as of:
Fixed income securities
Equity securities
September 24,
2016
85%
15%
100%
September 26,
2015
86%
14%
100%
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:86)(cid:182)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:81)(cid:74)(cid:79)(cid:72)(cid:71)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:81)gled
funds are valued at the net asset value of its underlying securities. The valuation of the assets held by the commingled funds are based
on observable market data using level 1 and 2 inputs within the fair value framework. The assets of the defined benefit pension plan
have no significant concentration of risk and there are no restrictions on these investments.
The following (cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:70)(cid:68)(cid:87)(cid:72)(cid:74)(cid:82)(cid:85)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:29)
Short term investments (1)
Equity securities: (1) (2)
Domestic
International
Fixed income securities (1) (3)
September 24,
2016
September 26,
2015
1,456
$
99
5,397
9,501
5,264
8,923
84,723
101,077
$
90,017
104,303
$
$
(1)
Includes funds which are not publicly traded and are valued at the net asset value of the units provided by the fund issuer.
(2)
Includes funds which invest primarily in a diversified portfolio of publicly traded U.S. and Non-U.S. common stock.
(3)
Includes funds which invest primarily in publicly traded and non-publicly traded, investment grade corporate bonds, U.S.
government bonds and asset-backed securities.
Projected Contributions and Benefit Payments. The Partnership expects to contribute approximately $10,704 to the defined benefit
pension plan during fiscal 2017. Estimated future benefit payments for both pension and retiree health and life benefits are as follows:
2017
2018
2019
2020
2021
2022 through 2026
Fiscal Year
Pension
Benefits
Retiree Health and
Life Benefits
$
$
31,607
11,817
10,776
10,326
10,073
42,360
922
865
806
735
672
2,470
Estimated future pension benefit payments assumes that age 65 or older active and non-active eligible participants in the pension plan
that had not received a benefit payment prior to fiscal 2017 will elect to receive a benefit payment in fiscal 2017. In addition, for all
periods presented, estimated future pension benefit payments assumes that participants will elect a lump sum payment in the fiscal
year that the participant becomes eligible to receive benefits.
F-24
Effect on Operations. The following table provides the components of net periodic benefit costs included in operating expenses for
fiscal 2016, 2015 and 2014:
Interest cost
Expected return on plan assets
Amortization of prior service credit
Settlement charge
Recognized net actuarial loss (gain)
Net periodic benefit costs
2016
Pension Benefits
2015
2014
$
$
5,041
(3,418)
(cid:178)
2,000
5,218
8,841
$
$
5,128
(4,913)
(cid:178)
2,000
4,522
6,737
$
$
5,774
(5,102)
(cid:178)
(cid:178)
4,492
5,164
$
$
Retiree Health and Life Benefits
2015
2014
2016
$
520
(cid:178)
(399)
(cid:178)
(299)
(178) $
$
575
(cid:178)
(490)
(cid:178)
(196)
(111) $
645
(cid:178)
(490)
(cid:178)
(181)
(26)
During fiscal 2016, lump sum pension settlement payments to either terminated or retired individuals amounted to $5,816, which
exceeded the settlement threshold (combined service and interest costs of net periodic pension cost) of $5,041 for fiscal 2016, and as a
result, the Partnership was required to recognize a non-cash settlement charge of $2,000 during fiscal 2016. During fiscal 2015, lump
sum pension settlement payments to either terminated or retired individuals amounted to $5,777, which exceeded the settlement
threshold (combined service and interest costs of net periodic pension cost) of $5,128 for fiscal 2015, and as a result, the Partnership
was required to recognize a non-cash settlement charge of $2,000 during fiscal 2015. The non-cash charges were required to
accelerate recognition of a portion of cumulative unamortized losses in the defined benefit pension plan. During fiscal 2014, the
amount of the pension benefit obligation settled through lump sum payments did not exceed the settlement threshold; therefore, a
settlement charge was not required to be recognized.
Actuarial Assumptions. The (cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)September 24, 2016
and September 26, 2015 are shown in the following table:
Weighted-average discount rate
Average rate of compensation increase
Health care cost trend
Pension Benefits
2016
2015
Retiree Health and Life
Benefits
2016
2015
3.125%
n/a
n/a
3.875%
n/a
n/a
2.875%
n/a
6.840%
3.500%
n/a
7.100%
The assumptions used in the measurement of net periodic pension benefit and postretirement benefit costs for fiscal 2016, 2015 and
2014 are shown in the following table:
2016
Pension Benefits
2015
2014
Retiree Health and Life Benefits
2015
2014
2016
Weighted-average discount rate
Average rate of compensation increase
Weighted-average expected long-term
rate of return on plan assets
Health care cost trend
3.875%
n/a
3.900%
n/a
3.875%
n/a
4.900%
n/a
4.375%
n/a
4.900%
n/a
3.500%
n/a
n/a
7.100%
3.500%
n/a
n/a
7.120%
3.750%
n/a
n/a
7.330%
The discount rate assumption takes into consideration current market expectations related to long-term interest rates and the projected
(cid:71)(cid:88)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:69)(cid:72)(cid:81)(cid:70)(cid:75)(cid:80)(cid:68)(cid:85)(cid:78)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:91)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:76)(cid:80)(cid:76)(cid:79)(cid:68)(cid:85)(cid:3)(cid:70)(cid:75)(cid:68)(cid:85)(cid:68)(cid:70)(cid:87)(cid:72)(cid:85)(cid:76)(cid:86)(cid:87)(cid:76)(cid:70)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)h flow
(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)-term. The expected long-term rate of return on plan assets
(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:73)(cid:79)(cid:72)(cid:70)(cid:87)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:80)(cid:76)(cid:91)(cid:3) of the
pension asset portfolio and historical asset performance. The expected return on plan assets is determined based on the expected long-
term rate of return on plan assets and the market-related value of plan assets. The market-related value of pension plan assets is the
fair value of the assets. Unrecognized actuarial gains and losses in excess of 10% of the greater of the projected benefit obligation and
the market-related value of plan assets are amortized over the expected average remaining service period of active employees expected
to receive benefits under the plan.
The 6.84% increase in health care costs assumed at September 24, 2016 is assumed to decrease gradually to 4.50% in fiscal 2040 and
to remain at that level thereafter. An increase or decrease of the assumed health care cost trend rates by 1.0% in each year would have
no m(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3) (cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:23)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:81)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:3)
components of net periodic postretirement benefit expense for fiscal 2016. The Partnership has concluded that the prescription drug
benefits within the retiree medical plan do not entitle the Partnership to an available Medicare subsidy.
F-25
Multi-Employer Pension Plans. As a result of the Inergy Propane Acquisition, the Partnership contributes to multi-employer
(cid:83)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3) (cid:11)(cid:179)(cid:48)(cid:40)(cid:51)(cid:51)(cid:86)(cid:180)(cid:12)(cid:3) (cid:76)(cid:81)(cid:3) accordance with various collective bargaining agreements covering union employees. As one of the
many participating employers in these MEPPs, the Partnership is responsible with the other participating employers for any plan
underfunding. During fiscal 2013, the Partnership established an accrual of $7,000 for its estimated obligation to certain MEPPs due
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:89)(cid:82)(cid:79)(cid:88)(cid:81)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:71)(cid:85)(cid:68)(cid:90)(cid:68)(cid:79)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:48)(cid:40)(cid:51)(cid:51)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:71)(cid:85)(cid:68)(cid:90)(cid:68)(cid:79)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:73)(cid:82)(cid:88)(cid:85)(cid:3)(cid:48)(cid:40)(cid:51)(cid:51)(cid:86)(cid:17)(cid:3)(cid:3)(cid:39)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24), the
Partnership accrued $11,300 for its further voluntary partial withdrawal, and during fiscal 2016 the Partnership accrued an additional
(cid:7)(cid:25)(cid:15)(cid:25)(cid:19)(cid:19)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:89)(cid:82)(cid:79)(cid:88)(cid:81)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:71)(cid:85)(cid:68)(cid:90)(cid:68)(cid:79)(cid:17)(cid:3)(cid:3)(cid:36)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:23)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:25)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:69)(cid:79)(cid:76)(cid:74)ation to
these MEPPs was $24,205 and $18,041, respectively. Due to the uncertainty regarding future factors that could impact the withdrawal
liability, the Partnership is unable to determine the timing of the payment of the future withdrawal liability, or additional future
withdrawal liability, if any.
(cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:48)(cid:40)(cid:51)(cid:51)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:69)(cid:68)(cid:85)(cid:74)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:74)(cid:85)(cid:72)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:11)(cid:179)(cid:38)(cid:37)(cid:36)(cid:86)(cid:180)(cid:12)(cid:30)(cid:3)
however, the required contributions may increase based on the funded status of a MEPP and legal requirements of the Pension
(cid:51)(cid:85)(cid:82)(cid:87)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:36)(cid:70)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:21)(cid:19)(cid:19)(cid:25)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:51)(cid:51)(cid:36)(cid:180)(cid:12)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:86)(cid:3) (cid:86)(cid:88)(cid:69)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:73)(cid:88)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (cid:48)(cid:40)(cid:51)(cid:51)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:76)(cid:80)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:68)(cid:3) (cid:73)(cid:88)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:3)
(cid:11)(cid:179)(cid:41)(cid:44)(cid:51)(cid:180)(cid:12)(cid:3)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:75)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:11)(cid:179)(cid:53)(cid:51)(cid:180)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:80)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:86)(cid:17)(cid:3)(cid:3)(cid:41)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:73)(cid:88)(cid:81)(cid:71)ed status of a MEPP include,
without limitation, investment performance, changes in the participant demographics, decline in the number of contributing
employers, changes in actuarial assumptions and the utilization of extended amortization provisions.
While no multi-employer pension plan that the Partnership contributed to is individually significant to the Partnership, the table below
discloses the MEPPs to which the Partnership contributes. The financial health of a MEPP is indicated by the zone status, as defined
by the PPA, which represents the funded status of the plan as certified by the plan's actuary. Plans in the red zone are less than 65%
funded, the yellow zone are between 65% and 80% funded, and green zone are at least 80% funded. Total contributions made by the
Partnership to multi-employer pension plans for the fiscal year ended September 24, 2016 are shown below.
PPA Zone Status
Contributions
Pension Fund
Local 282 Pension Trust (a)
Teamsters Industrial Employees
Pension Fund (b)
Other (c)
EIN/Pension
Plan Number
2015
11-6245313 Green Green
22-6099363 Green Green
2016
FIP/RP
Status
n/a
n/a
2016
2015
$ 281 $ 269 $ 336
185
200
207
2014
260
647
$ 748 $1,073 $1,168
604
Contributions
greater than
5% of
Total Plan
Contributions
No
Yes
Expiration
date of
CBA
August 2019
June 2017
No
n/a
(a) Based on most recent available valuation information for plan year ended February 2016.
(b) Based on most recent available valuation information for plan year ended December 2015.
(c)
Includes the MEPPs from which the Partnership withdrew.
Additionally, the Partnership contributes to certain multi-employer plans that provide health and welfare benefits and defined annuity
plans. Contributions to those plans were $1,446, $1,817 and $1,897 for fiscal 2016, 2015 and 2014, respectively.
11. Financial Instruments and Risk Management
Cash and Cash Equivalents. The fair value of cash and cash equivalents is not materially different from their carrying amount
because of the short-term maturity of these instruments.
Derivative Instruments and Hedging Activities. The Partnership measures the fair value of its exchange-traded commodity-related
options and futures contracts using Level 1 inputs, the fair value of its commodity-related swap contracts and interest rate swaps using
Level 2 inputs and the fair value of its over-the-counter commodity-(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:88)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:22)(cid:3)(cid:76)(cid:81)(cid:83)(cid:88)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)
over-the-counter options contracts are valued based on an internal option model. The inputs utilized in the model are based on
publicly available information, as well as broker quotes.
F-26
(cid:55)(cid:75)(cid:72)(cid:3) (cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:76)(cid:93)(cid:72)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:68)(cid:76)(cid:85)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3) (cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:68)lance
sheets as of September 24, 2016 and September 26, 2015, respectively:
Asset Derivatives
Derivatives not designated as hedging
instruments:
Commodity-related derivatives
Liability Derivatives
Derivatives designated as hedging
instruments:
Interest rate swap
Derivatives not designated as hedging
instruments:
Commodity-related derivatives
As of September 24, 2016
Location
Fair Value
As of September 26, 2015
Location
Fair Value
Other current assets
Other assets
$
$
3,306 Other current assets
1,546 Other assets
4,852
$
$
7,013
485
7,498
Location
Fair Value
Location
Fair Value
Other current liabilities $
Other liabilities
$
205 Other current liabilities
(cid:178) Other liabilities
205
Other current liabilities $
Other liabilities
$
1,002 Other current liabilities
1,353 Other liabilities
2,355
$
$
$
$
1,112
200
1,312
(cid:178)
2,567
2,567
The following summarizes the reconciliation of the beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis using significant unobservable inputs:
Beginning balance of over-the-counter options
Beginning balance realized during the period
Contracts purchased during the period
Change in the fair value of outstanding contracts
Ending balance of over-the-counter options
Fair Value Measurement Using Significant
Unobservable Inputs (Level 3)
Fiscal 2016
Fiscal 2015
Assets
Liabilities
Assets
Liabilities
$
$
2,781
(2,781)
809
(cid:178)
809
$
$
$
347
(347)
(cid:178)
(cid:178)
(cid:178) $
1,512
(1,450)
2,067
652
2,781
$
$
(cid:178)
(cid:178)
347
(cid:178)
347
(cid:36)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:23)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:25)(cid:15)(cid:3) (cid:21)(cid:19)(cid:20)(cid:24)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:71)(cid:76)(cid:87)(cid:92)-related derivatives had a weighted
average maturity of approximately six and seven months, respectively.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86) on the consolidated statements of operations for fiscal 2016, 2015 and 2014 are
as follows:
Derivatives in Cash Flow Hedging Relationships
Interest rate swaps:
Fiscal 2016
Fiscal 2015
Fiscal 2014
Amount of Gains
(Losses)
Recognized in OCI
(Effective Portion)
Gains (Losses) Reclassified from
Accumulated OCI into Income
(Effective Portion)
Location
Amount
$
$
$
6
Interest expense
(1,159)
Interest expense
(518)
Interest expense
$
$
$
(1,100)
(1,388)
(1,406)
F-27
Derivatives Not Designated as Hedging Instruments
Commodity-related derivatives:
Fiscal 2016
Fiscal 2015
Fiscal 2014
Unrealized Gains (Losses) Recognized in Income
Location
Amount
Cost of products sold
Cost of products sold
Cost of products sold
$
$
$
(1,190)
1,855
306
(cid:55)(cid:75)(cid:72)(cid:3) (cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:68)(cid:76)(cid:85)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:81)(cid:76)(cid:93)ed derivative assets and liabilities on a gross basis and
amounts offset on the consolidated balance sheets subject to enforceable master netting arrangements or similar agreements:
Asset Derivatives
Commodity-related derivatives
Interest rate swap
Liability Derivatives
Commodity-related derivatives
Interest rate swap
Asset Derivatives
Commodity-related derivatives
Interest rate swap
Liability Derivatives
Commodity-related derivatives
Interest rate swap
As of September 24, 2016
Gross amounts Effects of netting
Net amounts
presented in the
balance sheet
$
$
$
$
6,842 $
230
7,072 $
(1,990) $
(230)
(2,220) $
4,345 $
435
4,780 $
(1,990) $
(230)
(2,220) $
As of September 26, 2015
4,852
(cid:178)
4,852
2,355
205
2,560
Gross amounts Effects of netting
Net amounts
presented in the
balance sheet
$
$
$
$
13,063 $
740
13,803 $
(5,565) $
(740)
(6,305) $
8,132 $
2,052
10,184 $
(5,565) $
(740)
(6,305) $
7,498
(cid:178)
7,498
2,567
1,312
3,879
The Partnership had $206 and $553 posted cash collateral as of September 24, 2016 and September 26, 2015, respectively, with its
brokers for outstanding commodity-related derivatives.
Concentrations. (cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:88)(cid:86)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:88)(cid:72)(cid:79)(cid:3)(cid:82)(cid:76)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)
fuels served by 675 locations in 41 states. No single customer accounted for more than 10% of revenues during fiscal 2016, 2015 or
2014 and no concentration of receivables exists as of September 24, 2016 or September 26, 2015.
During fiscal 2016, Crestwood Equity Partners L.P., Targa Liquids Marketing and Trade LLC, Enterprise Products Partners L.P. and
(cid:51)(cid:75)(cid:76)(cid:79)(cid:79)(cid:76)(cid:83)(cid:86)(cid:3)(cid:25)(cid:25)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:91)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)(cid:20)(cid:28)(cid:8)(cid:15)(cid:3)(cid:20)(cid:23)(cid:8)(cid:15)(cid:3)(cid:20)(cid:22)(cid:8)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:20)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:86)(cid:15)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:17)(cid:3) No
(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:86)(cid:76)(cid:81)(cid:74)(cid:79)(cid:72)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:20)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:3) The Partnership believes
that, if supplies from any of these suppliers were interrupted, it would be able to secure adequate propane supplies from other sources
without a material disruption of its operations.
Credit Risk. Exchange-traded futures and options contracts are traded on and guaranteed by the NYMEX and as a result, have
minimal credit risk. Futures contracts traded with brokers of the NYMEX require daily cash settlements in margin accounts. The
Partnership is subject to credit risk with over-the-counter swaps and options contracts entered into with various third parties to the
extent the counterparties do not perform. The Partnership evaluates the financial condition of each counterparty with which it
F-28
conducts business and establishes credit limits to reduce exposure to credit risk based on non-performance. The Partnership does not
require collateral to support the contracts.
Bank Debt and Senior Notes. The fair value of the Revolving Credit Facility approximates the carrying value since the interest rates
(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:73)(cid:79)(cid:72)(cid:70)(cid:87)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:3)(cid:37)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:84)(cid:88)(cid:82)(cid:87)(cid:72)(cid:71)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:21)(cid:19)21 Senior
Notes, 2024 Senior Notes and 2025 Senior Notes was $360,893, $534,188 and $253,438, respectively, as of September 24, 2016.
12. Commitments and Contingencies
Commitments. (cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:15)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:89)(cid:72)(cid:75)(cid:76)(cid:70)(cid:79)(cid:72)(cid:3)(cid:73)(cid:79)(cid:72)(cid:72)(cid:87)(cid:15)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
various periods under noncancelable leases. Rental expense under operating leases was $29,171, $32,737 and $31,849 for fiscal 2016,
2015 and 2014, respectively.
Future minimum rental commitments under noncancelable operating lease agreements as of September 24, 2016 are as follows:
2017
2018
2019
2020
2121
2022 and thereafter
Fiscal Year
Minimum Lease
Payments
$
22,580
18,796
15,050
12,519
9,497
15,841
Contingencies
Self-Insurance. As described in Note 2, the Partnership is self-(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:15)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)sation and automobile
liabilities up to predetermined amounts above which third party insurance applies. At September 24, 2016 and September 26, 2015,
the Partnership had accrued liabilities of $59,676 and $57,083, respectively, representing the total estimated losses under these self-
insurance programs. For the portion of the estimated liability that exceeds insurance deductibles, the Partnership records an asset
within other assets (or prepaid expenses and other current assets, as applicable) related to the amount of the liability expected to be
covered by insurance which amounted to $15,524 and $15,783 as of September 24, 2016 and September 26, 2015, respectively.
Legal Matters. (cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:75)(cid:68)(cid:93)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3) (cid:81)(cid:82)(cid:85)mally incidental to handling, storing and
delivering combustible liquids such as propane. The Partnership has been, and will continue to be, a defendant in various legal
proceedings and litigation as a result of these operating hazards and risks, and as a result of other aspects of its business. Although
any litigation is inherently uncertain, based on past experience, the information currently available to the Partnership, and the amount
of its accrued insurance liabilities, the Partnership does not believe that currently pending or threatened litigation matters, or known
claims or known contingent claims, will have a material adverse effect on its results of operations, financial condition or cash flow.
13. Guarantees
The Partnership has residual value guarantees associated with certain of its operating leases, related primarily to transportation
equipment, with remaining lease periods scheduled to expire periodically through fiscal 2023. Upon completion of the lease period,
the Partnership guarantees that the fair value of the equipment will equal or exceed the guaranteed amount, or the Partnership will pay
the lessor the difference. Although the fair value of equipment at the end of its lease term has historically exceeded the guaranteed
amounts, the maximum potential amount of aggregate future payments the Partnership could be required to make under these leasing
arrangements, assuming the equipment is deemed worthless at the end of the lease term, was $15,950 as of September 24, 2016. The
fair value of residual value guarantees for outstanding operating leases was de minimis as of September 24, 2016 and September 26,
2015.
F-29
14. Amounts Reclassified Out of Accumulated Other Comprehensive Income
The following table summarizes amounts reclassified out of accumulated other comprehensive (loss) income for the years ended
September 24, 2016, September 26, 2015 and September 27, 2014:
Cash Flow Hedges
Balance, beginning of period
Other comprehensive income before reclassifications:
Unrealized gains (losses)
Reclassifications to earnings:
Realized losses (a)
Other comprehensive income
Balance, end of period
Pension Benefits
Balance, beginning of period
Other comprehensive income before reclassifications:
Net change in funded status of benefit plan
Reclassifications to earnings:
Recognition of net actuarial loss for pension
settlement (b)
Amortization of net loss (b)
Other comprehensive income (loss)
Balance, end of period
Postretirement Benefits
Balance, beginning of period
Other comprehensive income before reclassifications:
Net change in plan obligation
Reclassifications to earnings:
Amortization of prior service credits (b)
Amortization of net gain (b)
Other comprehensive income (loss)
Balance, end of period
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period
Other comprehensive income before reclassifications
Recognition of net actuarial loss for pension settlement
Reclassifications to earnings
Other comprehensive income (loss)
Balance, end of period
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
(1,311) $
(1,540) $
(2,428)
6
(1,159)
(518)
1,100
1,106
(205) $
1,388
229
(1,311) $
1,406
888
(1,540)
(52,836) $
(49,034) $
(49,987)
(5,773)
(10,324)
(3,539)
2,000
5,218
1,445
(51,391) $
2,000
4,522
(3,802)
(52,836) $
(cid:178)
4,492
953
(49,034)
5,264
$
4,669
$
5,062
1,198
1,281
278
(399)
(299)
500
5,764
$
(490)
(196)
595
5,264
$
(490)
(181)
(393)
4,669
(48,883) $
(4,569)
2,000
5,620
3,051
(45,832) $
(45,905) $
(10,202)
2,000
5,224
(2,978)
(48,883) $
(47,353)
(3,779)
(cid:178)
5,227
1,448
(45,905)
$
$
$
$
$
$
$
(a) Reclassification of realized losses on cash flow hedges are recognized in interest expense.
(b) These amounts are included in the computation of net periodic benefit cost. See Note 10(cid:15)(cid:3)(cid:179)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:180)(cid:17)
15. Segment Information
The Partnership manages and evaluates its operations in four operating segments, three of which are reportable segments: Propane,
Fuel Oil and Refined Fuels and Natural Gas and Electricity. The chief operating decision maker evaluates performance of the
operating segments using a number of performance measures, including gross margins and income before interest expense and
provision for income taxes (operating profit). Costs excluded from these profit measures are captured in Corporate and include
corporate overhead expenses not allocated to the operating segments. Unallocated corporate overhead expenses include all costs of
F-30
back office support functions that are reported as general and administrative expenses within the consolidated statements of
operations. In addition, certain costs associated with field operations support that are reported in operating expenses within the
consolidated statements of operations, including purchasing, training and safety, are not allocated to the individual operating
segments. Thus, operating profit for each operating segment includes only the costs that are directly attributable to the operations of
the individual segment. The accounting policies of the operating segments are otherwise the same as those described in the summary
of significant accounting policies in Note 2.
The propane segment is primarily engaged in the retail distribution of propane to residential, commercial, industrial and agricultural
customers and, to a lesser extent, wholesale distribution to large industrial end users. In the residential and commercial markets,
propane is used primarily for space heating, water heating, cooking and clothes drying. Industrial customers use propane generally as a
motor fuel burned in internal combustion engines that power over-the-road vehicles, forklifts and stationary engines, to fire furnaces
and as a cutting gas. In the agricultural markets, propane is primarily used for tobacco curing, crop drying, poultry brooding and weed
control.
The fuel oil and refined fuels segment is primarily engaged in the retail distribution of fuel oil, diesel, kerosene and gasoline to
residential and commercial customers for use primarily as a source of heat in homes and buildings.
The natural gas and electricity segment is engaged in the marketing of natural gas and electricity to residential and commercial
customers in the deregulated energy markets of New York and Pennsylvania. Under this operating segment, the Partnership owns the
relationship with the end consumer and has agreements with the local distribution companies to deliver the natural gas or electricity
(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:17)
(cid:36)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:180)(cid:3)(cid:70)(cid:68)(cid:87)(cid:72)(cid:74)(cid:82)(cid:85)(cid:92)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:182)(cid:86)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:68)(cid:85)(cid:76)(cid:79)(cid:92)(cid:3)(cid:72)(cid:81)(cid:74)(cid:68)(cid:74)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:79)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)stallation and
servicing of a wide variety of home comfort equipment, particularly in the areas of heating and ventilation.
F-31
The following table presents certain data by reportable segment and provides a reconciliation of total operating segment information to
the corresponding consolidated amounts for the periods presented:
Revenues:
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Total revenues
Operating income (loss):
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Corporate
Total operating income
Reconciliation to net income:
Loss on debt extinguishment
Interest expense, net
Provision for income taxes
Net income
Depreciation and amortization:
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Corporate
Total depreciation and amortization
Assets:
Propane
Fuel oil and refined fuels
Natural gas and electricity
All other
Corporate
Total assets
September 24,
2016
Year Ended
September 26,
2015
September 27,
2014
$
884,169
68,759
50,763
42,420
$ 1,046,111
$ 1,176,980
127,495
66,865
45,639
$ 1,416,979
$ 1,606,840
194,684
87,093
49,640
$ 1,938,257
$
$
$
$
184,213
5,649
10,755
(25,945)
(84,266)
90,406
292
75,086
588
14,440
110,067
2,725
3
304
16,517
129,616
$
$
$
$
295,916
2,473
10,818
(25,644)
(93,437)
190,126
11,589
83,261
767
94,509
106,491
5,429
46
699
23,734
136,399
$
$
$
$
280,761
7,621
14,614
(25,409)
(99,829)
177,758
15,072
77,634
700
84,352
110,728
3,885
8
288
18,385
133,294
As of
September 24,
2016
September 26,
2015
$ 2,141,108 $ 2,209,343
58,077
13,253
2,888
202,169
$ 2,295,969 $ 2,485,730
53,266
13,415
2,185
85,995
F-32
INDEX TO FINANCIAL STATEMENT SCHEDULE
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
Schedule II Valuation and Qualifying Accounts (cid:177) Years Ended September 24, 2016, September 26, 2015 and
September 27, 2014 ............................................................................................................................................... S-2
Page
S-1
SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
SCHEDULE II
Year Ended September 27, 2014
Balance at
Beginning of Period
Charged (credited) to
Costs and Expenses Other Additions
Deductions (a)
Balance at
End of Period
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
$
6,786 $
46,406
11,933 $
5,458
(cid:178) $
(cid:178)
(7,597) $
(cid:178)
11,122
51,864
Year Ended September 26, 2015
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
$
11,122 $
51,864
(397) $
2,181
(cid:178) $
(cid:178)
(7,205) $
(cid:178)
3,520
54,045
Year Ended September 24, 2016
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
$
3,520 $
54,045
1,146 $
4,737
(cid:178) $
(cid:178)
(2,225) $
(cid:178)
2,441
58,782
(a) Represents amounts that did not impact earnings.
S-2
SUBURBAN PROPANE RETIREMENT SAVINGS &
INVESTMENT PLAN
as amended and restated effective as of January 1, 2013
Exhibit 10.4
FOX ROTHSCHILD LLP
625 Liberty Avenue, 29th Floor
Pittsburgh, Pennsylvania 15222
(412) 391-1334
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I
DEFINITIONS
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
1.25
1.26
1.27
1.28
1.29
1.30
1.31
1.32
1.33
1.34
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Actual Deferral Percentage
Beneficiary
Code
Compensation
Date of Participation
Elective Deferral Contribution Account
Eligible Employee
Employee
Employee Compensation
Employer
Employer Contribution Account
Employer Matching Contribution Account
Employment Commencement Date
Excess Contributions
Excess Deferrals
Five Percent Owner
Highly Compensated Employee
Hour of Service
Leased Employee
Limitation Year
Non-Highly Compensated Employee
One Year Break in Service
Owner-Employee
Participant
Plan
Plan Administrator
Plan Year
Qualified Military Service
Self-Employed Individual
Trust or Trust Fund
Trustee
Vested Portion
Voluntary Nondeductible Contribution Account
Year of Service
ARTICLE II
PARTICIPATION
2.01
2.02
2.03
2.04
2.05
2.06
-
-
-
-
-
-
Date of Participation
Leaves of Absence
Participation After One Year Break in Service
Employees Ineligible for Participation
Change in Eligibility Status
Reclassification of Independent Contractor
ARTICLE III
CONTRIBUTIONS
3.01
3.02
3.03
3.04
3.05
3.06
3.07
3.08
3.09
3.10
3.11
3.12
3.13
3.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Amount of Employer Contribution
Limitation on Employer Contributions
Elective Deferral Contributions
Deferral Election
Actual Deferral Percentage Limitations
Correction of Excess Contributions
Treatment of Excess Deferrals
Limitations on Withdrawals and Distributions
Hardship Distributions
Employer Matching Contributions
Voluntary Nondeductible Contribution
Actual Contribution Percentage Limitations
Safe Harbors
Automatic Contribution Arrangement
ARTICLE IV
ALLOCATIONS
4.01
4.02
4.03
4.04
-
-
-
-
Allocation of Employer Contributions
Application of Miscellaneous Receipts
Crediting Gains and Losses on General Trust Investments
Investment of Accounts
ARTICLE V
BENEFITS
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5.09
-
-
-
-
-
-
-
-
-
Retirement Benefits
Disability Benefit
Death Benefit
Deferred Vested Benefit
Valuation Date
Year of Vested Service
Forfeiture for Cause
In-Service Withdrawals
Qualified Reservist Distribution
ARTICLE VI
COMMENCEMENT OF BENEFITS
6.01
6.02
6.03
6.04
6.05
6.06
-
-
-
-
-
-
General
Required Commencement Date
TEFRA Section 242(b)(2) Election
Required Minimum Distributions
Cash-out Distribution
Distribution Pursuant to a Qualified Domestic Relations Order
ARTICLE VII
FORM OF BENEFITS
7.01
7.02
7.03
7.04
7.05
7.06
7.07
7.08
Method of Payment
-
Distribution of Benefits Upon Death
-
Designation of Beneficiary
-
Qualified Joint and Survivor Annuity
-
-
Election of Alternate Form of Benefits
- Waiver of Joint and Survivor Annuity Benefit
-
-
Qualified Pre-Retirement Survivor Annuity
Direct Rollover of Eligible Rollover Distribution
ARTICLE VIII ADMINISTRATION OF THE PLAN
8.01
8.02
8.03
8.04
-
-
-
-
Plan Administrator
Committee Actions
Personal Liability
Investment Manager
ARTICLE IX
CLAIMS
9.01
9.02
-
-
Claims
Review of Claims
ARTICLE X
TOP HEAVY PROVISIONS
10.01
10.02
10.03
-
-
-
Definitions
Determination of Top Heavy Status
Minimum Allocations
ARTICLE XI
AMENDMENT AND TERMINATION
11.01
11.02
11.03
11.04
11.05
-
-
-
-
-
General
Amendment
Termination
Failure to Qualify
Bankruptcy of Employer
ARTICLE XII
(cid:51)(cid:36)(cid:53)(cid:55)(cid:44)(cid:38)(cid:44)(cid:51)(cid:36)(cid:49)(cid:55)(cid:54)(cid:182)(cid:3)(cid:53)(cid:44)(cid:42)(cid:43)(cid:55)(cid:54)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:48)(cid:44)(cid:54)(cid:38)(cid:40)(cid:47)(cid:47)(cid:36)(cid:49)(cid:40)(cid:50)(cid:56)(cid:54)(cid:3)(cid:51)(cid:53)(cid:50)(cid:57)(cid:44)(cid:54)(cid:44)(cid:50)(cid:49)(cid:54)
12.01
12.02
12.03
12.04
12.05
12.06
12.07
12.08
12.09
12.10
-
-
-
-
-
-
-
-
-
-
Merger and Consolidation
Employment Rights
Spendthrift
Impact of Qualified Military Service
Notice by Electronic Media
Miscellaneous Receipts
Payment of Administrative Expenses
Diversification Requirements
Headings
Construction
ARTICLE XIII TRANSFER OF ACCOUNTS TO AND FROM OTHER QUALIFIED PLANS
13.01
13.02
13.03
13.04
-
-
-
-
Transfers from Plan
Transfers to Plan
Requirements of Trust
Restrictions on Transferred Accounts
ARTICLE XIV LOANS TO PLAN PARTICIPANTS
14.01
14.02
14.03
14.04
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-
-
-
Availability of Loans
Terms and Conditions of Loans
Procedures
Default
ARTICLE XV QUALIFIED DOMESTIC RELATIONS ORDER
15.01
15.02
15.03
-
-
-
Definitions
Notice
Determination of Qualified Status
APPENDIX I
LIMITATIONS - SECTION 415
APPENDIX II
IMPLEMENTING SECTION 3.13 - SAFE HARBOR PROVISIONS
SUBURBAN PROPANE RETIREMENT SAVINGS & INVESTMENT PLAN
Suburban Propane, L.P., previously adopted a retirement program (cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:12)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
the benefit of its employees with an initial effective date of January 1, 1994, the date on which
the Plan was spun off from the Quantum Savings & Stock Ownership Plan, and now finds that a
substantially complete revision of the Plan is required. The Plan is amended and restated in its
entirety, as set forth herein, superseding all prior Plan provisions, effective as of January 1, 2013.
The basic purpose of the Plan continues to be to provide retirement income to supplement
benefits received under the Social Security laws.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3) (cid:69)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:68)(cid:3) (cid:179)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:180)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)
Section 401(a) of the Internal Revenue Code, so that contributions made to the Plan will be
deductible by the Employer and, until distributed, nontaxable to the Participants. By a separate
document, incorporated herein by reference, Suburban Propane, L.P. entered into an agreement
of trust, which is referred to herein as the Trust Agreement, and which may be amended from
time to time, pursuant to which the cash, securities and other property set aside for the
Participants in the Plan are held, invested and administered.
This Plan may be executed in any number of counterparts, each of which shall be
deemed an original.
Intending to be legally bound by the provisions of the Plan, as hereinafter set
forth, the duly authorized Members of the Benefits Administration Committee have signed it this
______ day of January, 2013.
Michael M. Keating
Steven C. Boyd
(cid:36)(cid:17)(cid:3)(cid:39)(cid:68)(cid:89)(cid:76)(cid:81)(cid:3)(cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)
Michael A. Stivala
Sandra N. Zwickel
ARTICLE I - DEFINITIONS
As used in this Plan and the Trust Agreement adopted in connection therewith, the
following words and phrases shall have the meanings set forth in this Article I, unless the context
clearly indicates otherwise. Whenever appropriate, words used in the singular shall include the
plural, words used in the plural shall include the singular, and the masculine shall include the
feminine.
1.01 Actual Deferral Percentage
shall mean the average (for a specified group of
Employees for a Plan Year) of the ratios, calculated separately for each employee in the group,
of (a) the amount of Employer contributions actually paid over to the Trust on behalf of each
such Employee for such Plan Year, including elective deferral contributions (exclusive of catch-
up contributions), such Employer contributions and Employer matching contributions, if any, as
are treated as elective deferral contributions under Section 3.05(b)(iv), and Excess Contributions
of Highly Compensated Employees, but excluding any elective deferral contributions taken into
account for purposes of the Actual Contribution Percentage Tests (provided that the Actual
Deferral Percentage Tests are satisfied after exclusion of these elective deferral contributions), to
(b) his Employee Compensation for such Plan Year. For this purpose, Employer contributions
shall include any elective deferral contributions, other than catch-up contributions, made
(cid:83)(cid:88)(cid:85)(cid:86)(cid:88)(cid:68)(cid:81)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)n, including excess deferrals by a Highly
Compensated Employee, but excluding excess deferrals by a Non-Highly Compensated
Employee that arise solely from Excess Deferrals made under the Plan or plans of the Employer,
and excluding elective deferral contributions that are taken into account in the Actual
Contribution Percentage Test, provided that the provisions of Section 3.05 are satisfied both with
and without exclusion of such elective deferral contributions. For purposes of computing Actual
Deferral Percentages, an Employee who would be a Participant but for his failure to make any
elective deferral contribution shall be treated as a Participant on whose behalf no elective
deferral contribution is made. In calculating the Actual Deferral Percentage for any Highly
Compensated Employee who is a participant in two or more cash or deferred arrangements of the
Employer, all such cash or deferred arrangements shall be treated as one; provided, however, that
for Plan Years beginning before 2006, if two or more such cash or deferred arrangements have
different plan years, all cash or deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate, if mandatorily disaggregated pursuant to regulations under Code Section
401(k).
1.02 Beneficiary shall mean any person or persons other than the Participant who is
entitled to receive benefits under this Plan by designation, under law, or in accordance with the
provisions of this Plan.
1.03 Code shall mean the Internal Revenue Code of 1986, as it exists currently and as it
may be amended from time to time.
1.04 Compensation (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:69)(cid:68)(cid:86)(cid:76)(cid:70)(cid:3) (cid:86)(cid:68)(cid:79)(cid:68)(cid:85)(cid:92)(cid:3) (cid:82)(cid:85)(cid:3) (cid:75)(cid:82)(cid:88)(cid:85)(cid:79)(cid:92)(cid:3) (cid:90)(cid:68)(cid:74)(cid:72)(cid:15)(cid:3) (cid:83)(cid:79)(cid:88)(cid:86)(cid:3)
commissions and transport pay, but excluding overtime, bonuses, and other contingent or
extraordinary compensation of any kind, which is reportable as W-2 income for federal income
tax purposes, which is received from the Employer during the Plan Year for personal services
rendered to the Employer in the course of employment (exclusive of any severance benefit
payable subsequent to severance from employment, and exclusive of reimbursements or other
expense allowances, fringe benefits, whether cash or non-cash, moving expenses, deferred
compensation, and welfare benefits, even if such items are includable in gross income) and
which is determined before reduction for any elective deferral contribution to a qualified cash or
deferred arrangement under Code Section 401(k), before reduction for any contribution or
(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3) (cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:20)(cid:21)(cid:24)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
(cid:69)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:76)(cid:86)(cid:3) (cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)
income under Code Section 132(f)(4); provided, however, that for any Self-Employed
Individual, Compensation shall mean his Earned Income. Notwithstanding the foregoing,
Compensation in excess of $200,000.00, or such other amount as is specified by Code Section
401(a)(17)(A), as adjusted for increases in the cost-of-living in accordance with Code Section
401(a)(17)(B), shall be disregarded.
The cost-of-living adjustment in effect for a calendar year applies to any period, not
exceeding twelve months, over which Compensation is determined (cid:11)(cid:68)(cid:3) (cid:179)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:180)(cid:12)(cid:3)
beginning with or within such calendar year. If a determination period consists of fewer than
twelve months, the annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator of which is
twelve.
As to any Participant who, following a leave of absence for Qualified Military Service,
returns to employment with the Employer within the time specified by Section 2.02, for purposes
of calculating missed Employer contributions, Compensation shall mean the Compensation the
Participant would have received during the period of absence but for the Qualified Military
(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:82)(cid:85)(cid:15)(cid:3) (cid:76)(cid:73)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:70)(cid:68)(cid:81)(cid:81)(cid:82)(cid:87)(cid:3) (cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)s average
Compensation during the twelve-month period (or, if less than twelve months, during the period
of employment) immediately preceding the Qualified Military Service.
Earned Income, used herein with respect to a Self-Employed Individual, shall mean net
earnings from self-employment in the trade or business with respect to which the Employer has
established the Plan, provided that personal services of the individual are a material income-
producing factor. Such net earnings shall be determined without regard to items not included in
(cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3) (cid:76)(cid:87)(cid:72)(cid:80)(cid:86)(cid:15)(cid:3) (cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)
deductible contribution made on behalf of such individual for such year, and with regard to the
deduction allowed to the Employer by Code Section 164(f) for taxable years beginning after
December 31, 1989. In addition, any distribution from an S Corporation, as defined in Code
Section 1361, which is treated as income from self-employment shall be counted as
Compensation under the Plan. Notwithstanding the foregoing, if Compensation is defined herein
as other than total compensation, then the Earned Income of any Self-Employed Individual shall
be adjusted to an equivalent amount by multiplying it by a percentage equal to the percentage of
total compensation included for the Non-Highly Compensated (common law) Employees of the
Employer.
1.05 Date of Participation shall mean the date on which an Employee becomes a
Participant in the Plan in accordance with the provisions of Section 2.01.
1.06 Elective Deferral Contribution Account shall mean the account established within
(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)
any, are credited and which is adjusted, in accordance with the provisions of Section 4.03, for
any gains or losses on the investments of the Trust.
1.07 Eligible Employee shall mean any regular part-time or full-time Employee who is
not ineligible for participation, as provided in Section 2.04. A temporary Employee who is not
otherwise ineligible for participation shall become an Eligible Employee after completing a Year
of Service.
1.08 Employee shall mean any person who is employed by the Employer or any other
employer mandatorily aggregated with the Employer under Code Section 414(b), (c), (m) or (o),
any Self-Employed
Individual, any Owner-Employee and any Leased Employee.
Notwithstanding the foregoing, if the Leased Employees of the Employer do not constitute more
(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:21)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3) (cid:49)(cid:82)(cid:81)-Highly Compensated Empl(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:179)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
not include those Leased Employees covered by a money purchase pension plan providing (a) a
non-integrated employer contribution rate of at least 10% of compensation, as defined in Code
Section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:71)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:21)(cid:24)(cid:15)(cid:3) (cid:23)(cid:19)(cid:21)(cid:11)(cid:72)(cid:12)(cid:11)(cid:22)(cid:12)(cid:15)(cid:3)
402(h)(1)(B) or 403(b); (b) immediate participation, and (c) full and immediate vesting.
1.09 Employee Compensation shall mean, for any Plan Year, the amount of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:68)(cid:78)(cid:72)(cid:81)(cid:3)(cid:76)(cid:81)(cid:87)(cid:82)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)
Deferral Percentage and Actual Contribution Percentage and determining the amount of elective
deferral contributions, voluntary nondeductible contributions and Employer matching
contributions, if any, which may be made by him or on his behalf for such Plan Year.
1.10 Employer shall mean Suburban Propane, L.P. and any Affiliate which has adopted
this Plan with the consent of the Board of Supervisors. For this purpose, Affiliate shall mean any
entity which is related to the Employer as a member of a controlled group of corporations in
accordance with Code Section 414(b), as a trade or business under common control in
accordance with Code Section 414(c), or as a member of an affiliated service group as defined
under Code Section 414(m).
1.11 Employer Contribution Account shall mean the account established within the Trust
in the name of a Participant to which t(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:76)(cid:86)(cid:3)
credited and which is adjusted, in accordance with the provisions of Section 4.03, for any gains
or losses on the investments of the Trust.
1.12 Employer Matching Contribution Account shall mean the account established within
(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:68)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:80)(cid:68)(cid:87)(cid:70)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3)
contributions (if such contributions are, or ever have been, made under the terms of the Plan) is
credited and which is adjusted, in accordance with the provisions of Section 4.03, for any gains
or losses on the investments of the Trust.
1.13 Employment Commencement Date shall mean the date on which the Employee first
completes an Hour of Service.
1.14 Excess Contributions shall mean, with respect to any Plan Year, the excess of the
aggregate amount of Employer contributions and elective deferral contributions actually taken
into account in computing the Actual Deferral Percentage of Highly Compensated Employees for
such Plan Year, over the maximum amount of such contributions permitted by the Actual
Deferral Percentage Test (determined by hypothetically reducing contributions made on behalf
of Highly Compensated Employees in order of the Actual Deferral Percentages, beginning with
the highest of such percentages.)
1.15 Excess Deferrals (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:15)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
elective deferral contributions to this Plan other than catch-up contributions, aggregated with all
elective deferrals by or on behalf of such Participant, pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section 401(k), any salary reduction
simplified employee pension plan as described in Code Section 408 (k)(6), any SIMPLE IRA
plan as described in Code Section 408(p), any eligible deferred compensation plan under Code
Section 457 or any Plan described in Code Section 501(c)(18), and any employer contributions
on behalf of the Participant for the purchase of any annuity contract under Code Section 403(b),
pursuant to a salary deferral agreement, which exceed such amount as the Secretary of the
Treasury may designate for purposes of Code Section 402(g).
1.16 Five Percent Owner shall mean any person who owns or is considered (within the
meaning of Code Section 318) to own more than 5% of the outstanding stock of the Employer,
stock possessing more than 5% of the total combined voting power of all stock of the Employer,
or more than 5% of the capital or profits interest in the Employer. For purposes of determining
ownership in the Employer, the aggregation rules of Code Sections 414(b), (c) and (m) shall not
apply.
1.17 Highly Compensated Employee shall mean any Employee who (a) at any time
during the Plan Year or the preceding year, was a Five Percent Owner, as defined in
Section 1.16, or (b) during the preceding year, received Compensation (as defined in Section
1.04) from the Employer in excess of $80,000.00. The $80,000.00 amount shall be adjusted at
the same time and in the same manner as under Code Section 415(d), except that the base period
(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:72)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:22)(cid:19)(cid:15)(cid:3) (cid:20)(cid:28)(cid:28)(cid:25)(cid:17)(cid:3) (cid:3) (cid:44)(cid:81)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:179)(cid:43)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)
(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:20)(cid:23)(cid:11)(cid:84)(cid:12)(cid:3)
and regulations issue(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:179)(cid:83)(cid:85)(cid:72)(cid:70)(cid:72)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
12 month period immediately preceding the applicable Plan Year. A former employee shall be
treated as a Highly Compensated Employee with respect to a Plan Year in which he is eligible to
participate in the Plan, if such employee was a Highly Compensated Employee when such
employee separated from service or at any time after attaining age 55. In determining whether
the employee was a Highly Compensated Employee, the definition of Highly Compensated
Employee in effect at the time of the separation from service or attainment of age 55, whichever
is applicable, shall control.
1.18 Hour of Service shall mean each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer, which hour will be credited to the
Employee for the Year of Service in which the duties are performed, and each hour for which an
Employee is paid, or entitled to payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence; provided, however, that no more than 501 Hours of Service
shall be credited to an Employee on account of any single continuous period (whether or not
such period occurs in a single computation period) during which the Employee performs no
duties; and provided, further, that Hours of Service shall be calculated and credited hereunder
pursuant to United States Department of Labor Regulation Sections 2530.200b-2(b) and
2530.200b-2(c), which are incorporated herein by this reference. Hour of Service shall include
each hour of Qualified Military Service which must be counted for plan purposes in accordance
with Code Section 414(u).
Hour of Service also shall include each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The same hours of
service shall not be credited under both this paragraph and the preceding paragraph but shall be
credited to the Employee for the Year or Years of Service to which the award or agreement
pertains rather than the Year of Service in which the award, agreement or payment is made.
Hours of Service will be credited for employment with other members of an affiliated
service group, as defined in Code Section 414(m), or a controlled group, as defined in Code
Section 414(b) or 414(c), of which the Employer is a member and any other entity which must be
aggregated with the Employer in accordance with Code Section 414(o) and the regulations
issued thereunder. Hours of Service shall be credited for any individual who is considered to be
an employee for purposes of the Plan under Code Section 414(n) or 414(o) and the regulations
issued thereunder.
Solely for purposes of determining whether a One Year Break in Service has occurred, a
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:3)(cid:179)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:85)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:79)(cid:72)(cid:68)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:70)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:85)edited with the Hours
of Service with which he normally would be credited but for the absence. In the event such
hours cannot be determined, the Participant shall be credited with 8 Hours of Service per normal
workday of absence; provided, however, that no more than 501 Hours of Service shall be
credited for any single maternity or paternity leave of absence. Such Hours of Service shall be
credited only in the Plan Year in which the maternity or paternity leave of absence begins, if the
crediting of such Hours of Service is necessary to prevent the occurrence of a One Year Break in
Service, or in any other case, in the year immediately following the Plan Year in which the
(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)(cid:85)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:79)(cid:72)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:86)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:179)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)(cid:83)(cid:68)(cid:87)(cid:72)rnity leave of
(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:70)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:69)(cid:86)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:85)(cid:72)(cid:74)(cid:81)(cid:68)(cid:81)(cid:70)(cid:92)(cid:15)(cid:3)(cid:69)(cid:76)(cid:85)(cid:87)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:15)(cid:3)(cid:3)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Participant in connection with the adoption of such child, or caring for a child immediately
following such birth or placement.
1.19 Leased Employee shall mean any person who is not an Employee of the Employer
but provides services to the Employer pursuant to an agreement between the Employer and a
leasing organization, performs such services for the Employer (or for the Employer and related
persons, as determined in accordance with Code Section 414(n)(6)) on a substantially full-time
basis for a period of at least one year, and performs such services under the primary direction or
control of the Employer. Any contributions or benefits provided for a Leased Employee by the
leasing organization which are attributable to services performed for the Employer shall be
treated as being provided by the Employer.
1.20 Limitation Year shall mean the calendar year or such other twelve month period as
is identified by resolution or other appropriate action of the Employer.
1.21 Non-Highly Compensated Employee shall mean any Employee who is not a Highly
Compensated Employee.
1.22 One Year Break in Service shall mean a Plan Year during which an Eligible
Employee or Participant, as the case may be, does not complete an Hour of Service with the
Employer.
1.23 Owner-Employee shall mean a Self-Employed Individual who is the sole proprietor
or a partner who owns more than 10% of either the capital or profit interest in the Employer.
1.24 Participant shall mean any Eligible Employee who has attained his Date of
Participation and has not become ineligible for any reason to participate further in the Plan;
Participant also shall mean any former Employee who previously attained his Date of
Participation and for whom an account balance is maintained. A Participant is deemed to benefit
under the Plan in any Plan Year in which the Participant receives or is deemed to receive an
allocation in accordance with Regulation §1.410(b)-3(a).
1.25 Plan shall mean the retirement plan sponsored by the Employer as embodied herein.
Prior Plan shall mean a retirement plan which is qualified under Code Section 401(a), all or part
of the assets of which are transferred to the Plan in a transaction which meets the requirements of
Regulation § 1.414(l). As of the Effective Date, Prior Plan includes the Quantum Savings and
Stock Ownership Plan, the Thrift and Profit Sharing Plan for Eligible Employees of National
Distillers and Chemical Corporation, and the Petrolane Savings and Stock Ownership Plan, as
well as the Suburban Propane Retirement Savings & Investment Plan for Certain Hourly
Represented Employees which was merged into this Plan effective as of January 1, 1997.
1.26 Plan Administrator shall mean the Benefits Administration Committee which shall
act in accordance with Article VIII. The Plan Administrator is the Named Fiduciary under the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
1.27 Plan Year shall mean the twelve consecutive month period, from and after the initial
effective date of the Plan, beginning on January 1 of each year and ending on the following
December 31.
1.28 Qualified Military Service shall mean service in the uniformed services of the
United States performed by an individual who is entitled to reemployment rights with respect to
such service in accordance with Code Section 414(u).
1.29 Self-Employed Individual shall mean an individual who has Earned Income or who
would have had Earned Income but for the fact that the trade or business for which the Plan is
established did not have net profits for the taxable year.
1.30 Trust or Trust Fund shall mean the assets of the Plan as shall exist from time to time
and as shall be administered by the Trustee pursuant to the terms of the Trust Agreement.
1.31 Trustee shall mean the person, persons, entity or entities who, from time to time, are
serving as trustees under the Trust Agreement.
1.32 Vested Portion shall mean the portion of a Participant(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:76)(cid:86)(cid:3)
nonforfeitable and which is determined in accordance with the provisions of Section 5.04.
1.33 Voluntary Nondeductible Contribution Account shall mean the account established
within the Trust in the name of a Participant to which the Pa(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:89)(cid:82)(cid:79)(cid:88)(cid:81)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3)(cid:81)(cid:82)(cid:81)(cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)
contributions, if such contributions are, or ever have been, permitted under the terms of the Plan
or any Prior Plan, are credited and which is adjusted, in accordance with the provisions of
Section 4.03, for any gains or losses on the investments of the Trust.
1.34 Year of Service shall mean a twelve month computation period during which the
Employee completes an 1,000 Hours of Service. The first such computation shall begin with the
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) Date; succeeding computation periods shall be the
Plan Year, and the first such succeeding computation period shall be the first Plan Year which
(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:81)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:17)
ARTICLE II - PARTICIPATION
2.01 Date of Participation: Each Eligible Employee shall become a Participant in the
Plan as of his Employment Commencement Date. On, or as soon as administratively feasible
after, his Date of Participation, the Participant shall complete a salary deferral agreement (unless
deemed to have made an election pursuant to Section 3.14), make an investment election as
provided in Section 4.04, and designate a Beneficiary. Each current Participant in the Plan shall
remain a Participant.
Each Eligible Employee who was employed by Inergy Propane, LLC or Inergy Sales &
Service, Inc. immediately prior to the closing of the transaction contemplated by the
Contribution Agreement by and among Inergy, L.P., Inergy GP, LLC, Inergy Sales & Service,
Inc. and Suburban Propane Partners, L.P. dated April 25, 2012, shall become a Participant as of
such closing date; each Eligible Employee who was employed by Inergy Propane, LLC or Inergy
Sales & Service, Inc. but was on an approved leave of absence as of such closing date shall
become a Participant as of the date on which he or she returns from such leave, provided that the
return occurs within six months after the leave or absence commenced.
2.02 Leaves of Absence:
(a) Temporary Absence: A temporary break in the continuity of employment for
approved leave of absence, temporary lay-off or service on jury duty shall not be considered to
be a termination of employment or result in a One-Year Break in Service, provided that the
absence does not exceed 12 months and provided that the Participant returns to his employment
with the Employer after such absence. If the Participant does not return to active employment
with the Employer after such absence, the Participant shall be deemed to have terminated his
employment as of the date the approved absence ends.
(b) Qualified Military Service: A leave of absence for Qualified Military Service
shall not be deemed to be a termination of employment and shall not result in a One Year Break
in Service, provided that (i) the Participant returns to his employment with the Employer within
14 days of completion of the Qualified Military Service, if the leave of absence was less than 181
days in duration, within 90 days of completion of the Qualified Military Service, if the leave of
absence was more than 180 days in duration, or within such other time period as may be
provided by law, (ii) as to any such leave of absence which was more than 30 days in duration,
the Participant furnishes proof of his Qualified Military Service upon request by the Employer,
and (iii) the cumulative length of the leave of absence and all prior absences from employment
with the Employer because of uniformed service obligations does not exceed 5 years, unless
otherwise required by law. If the Participant does not return to active employment with the
Employer within the required period, he shall be deemed to have terminated employment at the
time his leave of absence commenced. If the Participant returns to active employment with the
Employer within the requir(cid:72)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
amount of any missed Employer contributions, but no forfeitures or earnings, to which the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:88)(cid:83)(cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:17)(cid:19)(cid:23)(cid:15)
during that period of absence. For purposes of the limitations imposed by Code Section 415, as
referenced in Appendix I, any contribution which is allocated to the account of the Participant, as
provided herein, shall be counted only for the Limitation Year to which such contribution relates.
2.03 Participation After One Year Break in Service:
(a) In the event an Eligible Employee incurs a One Year Break in Service prior to
becoming a Participant, he shall be treated thereafter as a new Employee for purposes of
participation under Section 2.01.
(b) In the event a Participant incurs a One Year Break in Service, he shall resume
participation in this Plan as of his Employment Commencement Date following the One Year
Break in Service.
2.04 Employees Ineligible for Participation: Notwithstanding any provision in this
Article to the contrary, and unless expressly agreed otherwise, no Employee who is a member of
a unit of Employees covered by a collective bargaining agreement between employee
representatives and one or more employers shall be eligible for participation in this Plan,
provided that there is evidence that retirement benefits were the subject of good faith bargaining
between employee representatives and such employer or employers. In addition, Leased
Employees shall be ineligible for participation in the Plan.
Except as specifically provided by the terms of the applicable transaction, Employees
who became employees as a result of an asset or stock acquisition, merger, or similar transaction
involving a change in the employer of the employees of a trade or business shall be ineligible for
participation in the Plan during the period beginning on the date of such transaction and ending
on the last day of the Plan Year beginning after the date of the transaction.
2.05 Change in Eligibility Status:
(a) In the event that an Employee who has been ineligible for participation under
Section 2.04 subsequently becomes eligible by reason of a change in status to a category of
employment eligible for participation, he shall commence participation as of the date of the
change in his status, provided that he has satisfied the conditions of Section 2.01. If, as of the
date of the change in his status, he has not satisfied the conditions of Section 2.01, his
participation shall commence as of his Date of Participation, as defined in Sections 1.05 and
2.01.
(b) In the event a Participant becomes ineligible for continued participation by
reason of a change in status to a category of employment ineligible for participation, except as
provided in Section 2.05(c) below, he shall cease to be an Eligible Employee as of the date
immediately preceding his change in status and shall remain a Participant in this Plan only to the
extent that, and for so long as, an account balance is maintained in the Plan for his benefit.
(cid:11)(cid:70)(cid:12)(cid:3)(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:76)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:72)(cid:80)(cid:83)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:86)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)
the course of a particular Plan Year. To the extent that the Employee remains a Participant
eligible to share in any Employer contribution for such year, in accordance with provisions of
Section 4.01, all Hours of Service shall be aggregated, and all wages and other compensation
shall be apportioned, such that the individual neither shall be deprived of any benefit nor receive
a duplication of benefits.
(d) Upon a change to ineligible status by any Participant hereunder, that
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)
or charged, as the case may be, with gains and losses, as provided in Section 4.03, until such
time as the Employee becomes entitled to benefits in accordance with the provisions of
Article V.
2.06 Reclassification of Independent Contractor: In the event an individual, who has
been ineligible for participation in this Plan by virtue of having been classified by the Employer
as an independent contractor, shall be reclassified, by the Employer or otherwise, as an
Employee, such
the Plan, following such
reclassification, in accordance with the provisions of Section 2.01, unless such Employee shall
be ineligible for participation, in accordance with the provisions of Section 2.04. In no event,
however, shall such an Employee become a Participant in the Plan prior to the date on which he
is reclassified as an Employee, notwithstanding any retroactive effect of such reclassification.
individual shall become a Participant
in
ARTICLE III - CONTRIBUTIONS
3.01 Amount of Employer Contribution: The amount to be contributed to the Plan shall
be determined for each Plan Year by the Employer, in its absolute discretion. A contribution
may be made without regard to the existence of current or accumulated profits. The Employer
contribution, if any, shall be paid to the Trust within the time period and manner permitted by the
Code; provided, however, that no in-kind contributions shall be permitted.
3.02 Limitation on Employer Contributions: In no event shall a contribution be made on
behalf of any Participant which would result in a violation of Code Section 415. (See Plan
Appen(cid:71)(cid:76)(cid:91)(cid:15)(cid:3)(cid:179)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)- (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:20)(cid:24)(cid:17)(cid:180)(cid:12)(cid:3)(cid:3)
3.03 Elective Deferral Contributions:
(a) Subject to the Automatic Contribution Arrangement provisions of Section
3.14, each Plan Year, any Participant may elect to make an elective deferral contribution to the
Trust by entering into a deferral election agreement with the Employer. The terms of any such
deferral election shall provide that the Participant agrees to defer receipt of any whole percentage
of his Compensation, between 1% and 90%, as specified by the Participant, subject to the
limitations set forth in Section 3.05 and the then applicable limits under Code Section 402(g);
provided, however, that in no event shall an elective deferral contribution be permitted by any
Participant to the extent that it would result in a violation of Code Section 415 (See Plan
(cid:36)(cid:83)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:91)(cid:15)(cid:3)(cid:179)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)- (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:20)(cid:24)(cid:180)(cid:12)(cid:3)(cid:82)(cid:85)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:19)(cid:20)(cid:11)(cid:78)(cid:12)(cid:17)
(cid:11)(cid:69)(cid:12)(cid:3) (cid:44)(cid:81)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)
(cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
Compensation which was deferred, pursuant to the deferral election, shall be allocated to the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:29)
(cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3)
(cid:11)(cid:76)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:80)(cid:68)(cid:71)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:82)(cid:88)(cid:87)(cid:3) (cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
performance of services or participation in the Plan on any date subsequent to the date of the
allocation, and
(ii) The elective deferral contributions so allocated shall be paid to the
Trust as soon as administratively feasible, but in no event later than the 15th business day of the
month following the month in which such amounts otherwise would have been payable to the
Participant in cash. For this purpose, elective deferral contributions are deemed to relate to
Compensation that either would have been received by the Participant during the Plan Year, but
for the election to defer, or is attributable to services performed by the Participant during the
Plan Year and, but for the election to defer, would have been received by the Participant within
2-1/2 months after the close of the Plan Year.
(cid:11)(cid:70)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)(cid:179)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)-tax elective deferral
contributions, catch-up contributions and Roth elective deferrals, if the Plan, at any time, accepts
(cid:53)(cid:82)(cid:87)(cid:75)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:86)(cid:17)(cid:3) (cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:73)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:92)(cid:83)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
deferral contribution (pre-tax or Roth) to be withheld from each payment of Compensation, and
such elective deferral contributions may not be reclassified following the date of contribution.
(cid:11)(cid:71)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:179)(cid:70)(cid:68)(cid:87)(cid:70)(cid:75)-(cid:88)(cid:83)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:83)(cid:85)(cid:72)-tax elective deferral
contributions made after 2001, which exceed an otherwise applicable plan limit and which are
made by a Participant who has attained, or, by the last day of the taxable year in which the catch-
up contributions are made, will attain, the age of 50. For t(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:15)(cid:3)(cid:68)(cid:81)(cid:3)(cid:179)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)
(cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:19)(cid:21)(cid:11)(cid:74)(cid:12)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)
Deferral Percentage limitations of Section 3.05, or an Employer-imposed limit on elective
deferral contributions
(i) In no event may catch-up contributions be made for any taxable year
which exceed (A) the applicable dollar limit on catch-up contributions under Code Section
414(v)(2)(B)(i), which is $5,000 for taxable years beginning in 2006, as adjusted, in accordance
with Code Section 414(v)(2)(C), for cost-of-living increases in multiples of $500, or (B) the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3) (cid:70)(cid:68)(cid:87)(cid:70)(cid:75)-up
contributions, made by the Participant for such year. The dollar limit on catch-up contributions
is, and thereafter, it will be adjusted by the Secretary of the Treasury
(ii) Catch-up contributions shall not be included as annual additions for
(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:20)(cid:24)(cid:3) (cid:11)(cid:54)(cid:72)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:36)(cid:83)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:91)(cid:15)(cid:3) (cid:179)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:177) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:20)(cid:24)(cid:180)(cid:12)(cid:15)(cid:3) (cid:86)(cid:75)(cid:68)ll not be
counted as elective deferral contributions for purposes of computing Actual Deferral Percentages
or applying the Actual Deferral Percentage limitations of Section 3.05, and shall not be counted
in determining the minimum allocation in any Top Heavy Plan Year in accordance with Section
10.03.
(cid:11)(cid:72)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:179)(cid:53)(cid:82)(cid:87)(cid:75)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:86)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:19)(cid:24)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)
which such elective deferral is made and which have been irrevocably designated as Roth
(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:86)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:76)(cid:81)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3) (cid:3) (cid:36)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:53)(cid:82)(cid:87)(cid:75)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
deferrals (if such contributions are, or ever have been, permitted under the terms of the Plan) and
any (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:15)(cid:3) (cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:18)(cid:82)(cid:85)(cid:3) (cid:79)(cid:82)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3) (cid:68)(cid:87)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:87)(cid:82)(cid:15)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
separate Roth Elective Deferral Account.
(f) Roth elective deferrals shall not be permitted.
3.04 Deferral Election:
(a) A deferral election shall be effective for the payroll period next following the
date on which the election is executed and shall remain effective unless and until amended.
(b) A deferral election may be amended by a Participant at any time, effective for
the payroll period next following the date of such amendment.
(c) The Employer or Committee may amend any deferral election at any time, if it
is determined that such amendment is necessary to insure that the limitations of neither Section
3.05 nor Code Section 402(g) will be exceeded or to insure that the nondiscrimination tests of
Code Section 401(k) are met for the Plan Year.
3.05 Actual Deferral Percentage Limitations:
(a) Actual Deferral Percentage Tests: As to each Plan Year and unless the
Employer has elected one of the safe harbors, as provided in Section 3.13, the Actual Deferral
Percentage, as defined in Section 1.01, for Participants who are Highly Compensated Employees
for that Plan Year must bear a relationship to the Actual Deferral Percentage for Participants who
are Non-Highly Compensated Employees for that Plan Year which satisfies either of the
following Actual Deferral Percentage Tests:
(i) The Actual Deferral Percentage for Participants who are Highly
Compensated Employees is not more than the Actual Deferral Percentage for Participants who
are Non-Highly Compensated Employees, multiplied by 1.25, or
(ii) The excess of the Actual Deferral Percentage for Participants who are
Highly Compensated Employees over that of the Participants who are Non-Highly Compensated
Employees is not more than 2 percentage points, and the Actual Deferral Percentage for such
Highly Compensated Employees is not more than the Actual Deferral Percentage for such Non-
Highly Compensated Employees multiplied by 2.0.
(b) Application of Actual Deferral Percentage Tests:
(i) In the event that this Plan satisfies the requirements of Code Section
401(k), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or, in the event one
or more other plans satisfy such requirements only if aggregated with this Plan, the Actual
Deferral Percentages shall be determined, and the Actual Deferral Percentage Tests shall be
applied, as if all such plans were a single plan.
(ii) If the Committee so elects, by a duly adopted amendment, the Actual
Deferral Percentage Tests may be applied by using the Actual Deferral Percentage for
Participants who are Non-(cid:43)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:70)(cid:72)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:11)(cid:179)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:87)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:180)(cid:12)(cid:15)(cid:3)(cid:85)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:11)(cid:179)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:87)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:180)(cid:12)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3)
testing has been used for the preceding five Plan Years or, if less, all of the years the Plan has
been in existence, or if, as a result of a merger or acquisition described in Code Section
410(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using
current year testing, and the change is made within the transition period described in Code
Section 410(b)(6)(C)(ii).
(iii) For purposes of satisfying the Actual Deferral Percentage Tests of
Section 3.05(a), all or any part of the Employer contributions and Employer matching
contributions, if any are made under the terms of this Plan, may be treated as elective deferral
contributions, provided that they are fully vested at all times, are subject to the restrictions of
Section 3.08, and otherwise are deemed to be qualified nonelective contributions or qualified
matching contributions within the meaning of Regulation Section 1.401(k)-1(b)(5).
(iv) For purposes of the Actual Deferral Percentage Tests, only such
elective deferral contributions, Employer contributions and Employer matching contributions as
are paid over to the Trust prior to the last day of the twelve-month period immediately following
the Plan Year to which such contribution relate shall be counted.
(v) The Committee shall maintain such records as are sufficient to
demonstrate satisfaction of the Actual Deferral Percentage Test, as well as the amount of
Employer contributions and/or Employer matching contributions taken into consideration for
purposes of satisfying such test.
(c) Correction of Excess Contributions: In the event that the Actual Deferral
Percentage of the Highly Compensated Employees does not satisfy either of the Actual Deferral
Percentage Tests, set out in Section 3.05(a) above, and subject to the provisions of Section
3.05(e), the Excess Contributions to the Plan for the Plan Year shall be distributed to the Highly
Compensated Employees, as provided in Sections 3.05(d) and 3.06. To the extent any Highly
Compensated Employee has not made the maximum catch-up contribution permitted for the
year, any Excess Contributions allocated to that Highly Compensated Employee shall be treated
as catch-up contributions and shall not be treated as Excess Contributions.
(d) Distribution of Excess Contributions: The Excess Contributions for a Plan
Year are to be distributed among Highly Compensated Employees on the basis of the amount of
contributions made by, or on behalf of, each such Employee which is counted for purposes of
computing the Actual Deferral Percentage of such Employee, first, by calculating the total
amount of Excess Contribution to be distributed, in accordance with the procedures set forth this
Section 3.05(d)(i) and, then, by apportioning the total amount of Excess Contributions among
Highly Compensated Employees, in accordance with the procedures set forth in Section 3.05(d)
(ii).
(i) The amount to be distributed attributable to a particular Highly
Compensated Employee is the amount, if any, by which the contributions of that Highly
Compensated Employee, which are taken into account under this section, must be reduced in
(cid:82)(cid:85)(cid:71)(cid:72)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:11)(cid:75)(cid:72)(cid:85)(cid:72)(cid:76)(cid:81)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:15)(cid:3)(cid:179)(cid:36)(cid:39)(cid:53)(cid:180)(cid:12)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:43)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)
equal the highest permitted ADR under the Plan. To calculate the highest permitted ADR under
the Plan, the ADR of the Highly Compensated Employee with the highest ADR is reduced by the
(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:43)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:36)(cid:39)(cid:53)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:39)(cid:53)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Highly Compensated Employee with the next highest ADR. If a lesser reduction would enable
the Plan to satisfy one of the Actual Deferral Percentage Tests, only this lesser reduction shall be
used to determine the highest permitted ADR.
(A) The above process shall be repeated until the Plan would
satisfy one of the Actual Deferral Percentage Tests if the ADR for each Highly Compensated
Employee were determined after the reductions described above.
Employees as so determined is the total amount of Excess Contributions for the Plan Year.
(B) The sum of all the reductions for all Highly Compensated
(cid:11)(cid:38)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:36)(cid:39)(cid:53)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:88)(cid:80)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
elective deferral contributions, qualified nonelective contributions and qualified matching
contributions taken into account with respect to the Participant for purposes of the Actual
(cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:51)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3) (cid:55)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3) (cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
Plan Year, and calculated to the nearest hundredth of a percentage point.
(ii) The contributions of the Highly Compensated Employee or Employees
with the highest dollar amount of contributions taken into account under this Section 3.05(d) are
reduced by the amount required to cause the contributions of that Highly Compensated
Employee to equal the dollar amount of the contributions taken into account under this Section
3.05(d) for the Highly Compensated Employee with the next highest dollar amount of
contributions taken into account under this Section.
(A) If a lesser apportionment to the Highly Compensated
Employee would enable the Plan to apportion the total amount of Excess Contributions, only the
lesser apportionment shall apply.
Excess Contributions determined under Section 3.05(d)(i) has been apportioned.
(B) The above process shall be repeated until the total amount of
(e) Qualified Non-Elective Contributions: For any Plan Year, the Employer may
make a Qualified Non-Elective Contribution on behalf of Non-Highly Compensated Employees
who are Participants in the Plan for such Plan Year in such amount as may be necessary to
satisfy one of the Actual Deferral Percentage Tests set forth in Section 3.05(a). Such
contribution shall be made within twelve months after the end of the Plan Year to which it relates
and shall be allocated among the Participants who are Non-Highly Compensated Employees in
the same proportion that the Compensation of each such Participant bears to the total
(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:17)(cid:3) (cid:3) (cid:40)(cid:68)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3) (cid:49)(cid:82)(cid:81)-Elective
Contribution shall be allocated to his Elective Deferral Contribution Account, shall be fully
vested at all times and shall be subject to the provisions of Section 3.08, as applicable to all
other amounts contributed to his Elective Deferral Contribution Account .
3.06 Corrective Distribution of Excess Contributions:
(a) A Participant(cid:182)(cid:86)(cid:3) (cid:40)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)
allocable to such contributions through the end of such Plan Year, reduced by Excess Deferrals
(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:79)(cid:92)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:85)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)
the Plan Year, shall be distributed to the Participant no later than the last day of the following
Plan Year. In the event the Plan should be terminated during a Plan Year in which Excess
Contributions are made, the Excess Contributions shall be distributed no later than twelve
months following the date of termination. For Plan Years beginning after 2005, distribution of
(cid:40)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:80)(cid:68)(cid:71)(cid:72)(cid:15)(cid:3) (cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:15)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:83)(cid:85)(cid:72)-tax elective deferral
contributions, to the extent any were made for the year, unless the Participant elects otherwise.
(b) The income allocable to Excess Contributions for the Plan Year shall be
(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:80)(cid:88)(cid:79)(cid:87)(cid:76)(cid:83)(cid:79)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:82)(cid:85)(cid:3) (cid:79)(cid:82)(cid:86)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
elective deferral reduction contributions (and to any Employer contributions or Employer
matching contributions treated as elective deferral contributions in accordance with Section
3.05(b)(iii)) by a fraction.
Participant for the Plan Year.
(i) The numerator of the fraction is the Excess Contributions of the
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:81)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)
balance attributable to elective deferral contributions and amounts treated as elective deferral
contributions as of the end of the year, reduced by any income allocable to such account for the
Plan Year and increased by any loss allocable to such account for the Plan Year.
3.07 Treatment of Excess Deferrals:
(a) In the event a Participant makes elective deferral contributions to this Plan for
any calendar year which would result in Excess Deferrals, as defined in Section 1.15, for that
year, such Excess Deferrals shall be distributed as provided herein.
(cid:11)(cid:69)(cid:12)(cid:3) (cid:36)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:40)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3) (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)
income in the year to which the deferral relates and, unless distributed within the time required
by Section 3.07(c)(ii), in the year in which the Excess Deferrals are distributed.
(c) Excess Deferrals received by the Plan may be distributed to the Participant,
under the following terms and conditions:
(i) On or before March 1 following the taxable year in which the Excess
Deferrals were made (or such later date as may be provided by IRS regulations), the Participant
shall advise the Committee, in writing, of the existence and amount of the Excess Deferrals
allocated to this Plan.
(ii) On or before April 15 following the taxable year in which the Excess
Deferrals were made, the amount of the Excess Deferrals allocable to this Plan and any income
allocable to such Excess Deferrals through the end of such taxable year, shall be distributed to
the Participant. For Plan Years beginning after 2005, distribution of Excess Deferrals shall be
(cid:80)(cid:68)(cid:71)(cid:72)(cid:15)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:15)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:72)-tax elective deferral contributions, to the extent any were
made for the year, unless the Participant elects otherwise.
(iii) The income allocable to the Excess Deferrals for the taxable year of
the Participant shall be determined by multiplying the income (or loss) for that taxable year
allocable to elective deferral contributions by a fraction, the numerator of which is the amount of
Excess Deferrals made by the Participant for the taxable year, and the denominator of which is
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72) taxable
year, reduced by the income allocable to such account for the taxable year and increased by the
loss allocable to such account for the taxable year.
(iv) Any corrective distribution of less than the entire amount of Excess
Deferrals and income shall be treated as a pro rata distribution of the Excess Deferrals and
income.
(v) The amount of Excess Deferrals that may be distributed with respect to
any Participant for a taxable year shall be reduced by any Excess Contributions previously
distributed with respect to such participant under Section 3.06 for the Plan Year beginning with
or within such taxable year.
(vi) Except as otherwise provided by law, notwithstanding the distribution
of Excess Deferrals under this Section 3.07, such amounts shall not be disregarded for purposes
of the nondiscrimination requirements of Code Section 401(a)(4) or the Actual Deferral
Percentage Limitations of Section 3.05 and shall be treated as annual additions for purposes of
the limitations of Code Section 415.
3.08 Limitations on Withdrawals and Distributions:
(a) A Participant is fully vested at all times in all amounts contributed to his
Elective Deferral Contribution Account and all earnings thereon. However, except as provided
in Section 3.07 or Section 3.09, no amounts may be withdrawn by, or distributed to, the
Participant or his Beneficiary from such account prior to one of the following events:
employment;
(cid:11)(cid:76)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3) (cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:15)(cid:3) (cid:71)(cid:76)(cid:86)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:82)(cid:85)(cid:3) (cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:73)(cid:85)(cid:82)(cid:80)(cid:3)
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:87)(cid:87)(cid:68)(cid:76)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73) age 59-1/2;
(iii) The termination of this Plan by the Employer, provided that the
Employer does not maintain or establish, during the period beginning on the date of termination
and ending twelve months after the distribution of all plan assets, a successor defined
contribution plan, other than an employee stock ownership plan, as defined in Code Section
4975(e)(7) or Code Section 409(a), a simplified employee pension plan, as defined in Code
Section 408(k), a SIMPLE IRA plan, as defined in Code Section 408(p), a plan or contract
described in Code Section 403(b), or a plan described in Code Section 457(b) or (f);
(cid:11)(cid:76)(cid:89)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:70)(cid:68)(cid:79)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:88)(cid:87)(cid:92)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:20)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:15)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:81)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71) of at least 180 days or for
(cid:68)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:76)(cid:87)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:11)(cid:68)(cid:3)(cid:179)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:85)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:87)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:12)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:24)(cid:17)(cid:19)(cid:28)(cid:30)
(cid:11)(cid:89)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:88)(cid:81)(cid:76)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:71)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3) (cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)
duty for a period of at least 30 days; provided, however, that if a participant receives a
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
and voluntary nondeductible contributions (if the Plan provides for such contributions) must be
suspended for a period of six months from and after such distribution.
(b) The provisions of this Section 3.08 shall apply to all Employer contributions
and Employer matching contributions, if any are made to this Plan, which are treated as elective
deferral contributions for purposes of computing Actual Deferral Ratios and satisfying the actual
deferral percentage tests, in accordance with Section 3.05(b)(iv).
(c) All withdrawals and distributions made in accordance with this Section 3.08
shall be subject to such Participant and spousal consent as may be required by law.
3.09 Hardship Distributions:
(a) General: Notwithstanding the provisions of Sections 3.08, distribution may be
made to a Participant from his Elective Deferral Contribution Account at any time, provided that
the distribution is made on account of an immediate and heavy financial need of the Participant,
is necessary to satisfy such financial need, and is made in accordance with the provisions of this
Section 3.09, and provided, further, that his spouse consents, if spousal consent is required by
law.
(b) Immediate and Heavy Financial Need: The determination as to the existence
of an immediate and heavy financial need shall be made by the Plan Administrator on the basis
of all relevant facts and circumstances, but a distribution will be deemed to be made on account
of an immediate and heavy financial need of the Participant, if the distribution is made on
account of:
(i) Medical expenses described in Code Section 213(d) incurred by the
Participant, the Participan(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3) (cid:11)(cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81) 152) of the
Participant, or a primary beneficiary;
the Participant;
(ii) Purchase (excluding mortgage payments) of a principal residence for
(iii) Payment of tuition, related educational fees, and room and board
expenses for the next twelve months of post-secondary education for the Participant, his spouse,
children, dependents (as defined in Code Section 152), or a primary beneficiary;
principal residence or foreclosure on the mortgage of that principal residence;
(iv) Payments necessary to prevent the eviction of the Participant from his
(v) Payment of funeral or burial expenses for the parent, spouse, child,
other dependent, or a primary beneficiary of the Participant; provided, however, that this
subsection (b)(v) shall apply only with respect to Plan Years beginning after 2005;
(vi) Payment of expenses for repair of damage to the principal residence of
the Participant which would qualify for casualty loss deduction under Code Section 165
(determined without regard to whether the loss exceeds 10% of adjusted gross income);
provided, however, that this subsection (b)(vi) shall apply only with respect to Plan Years
beginning after 2005, or
(vii) Any other circumstance which is determined by the Committee in an
objective and nondiscriminatory manner, based upon all relevant facts and circumstances, and in
accordance with the requirements of the Code and applicable regulations, to be an immediate and
heavy financial need which is due to an extraordinary emergency, provided that an otherwise
appropriate immediate and heavy financial need shall not fail to qualify merely because the need
was reasonably foreseeable or voluntarily incurred.
(c)
Distribution Necessary to Satisfy Financial Need: A distribution is made
on account of a hardship only to the extent that the amount distributed does not exceed the
amount required to relieve the financial need and only to the extent that the financial need cannot
be satisfied from other sources which are reasonably available to the Participant. This
determination is to be made by the Committee on the basis of relevant facts and circumstances.
The following additional requirements must be satisfied:
(i) Prior to receiving any amount from this Plan as a hardship distribution,
the Participant first must have obtained all distributions, other than hardship distributions, and all
non-taxable loans (including any Participant loans permitted under Article XIV of this Plan)
currently available under all plans maintained by the Employer.
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)
suspended for a period of six calendar months following the month in which the Participant
receives a hardship distribution.
(d) Resources Considered(cid:29)(cid:3)(cid:3)(cid:36)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)resources shall include those assets of
his or her spouse and minor children as are reasonably available.
(e) Additional Limitations on Distribution: The following additional limitations
shall apply to hardship distributions:
(i) In no event shall any hardship distribution exceed the amount of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:83)(cid:79)(cid:88)(cid:86)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)
of December 31, 1988 (or such other date as may be provided by regulation).
(ii) For purposes of Section 3.09(b), a primary beneficiary of the
Participant is an individual who is named as a beneficiary and has an unconditional right to all or
(cid:68)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:17)
3.10 Employer Matching Contributions:
(a) Although no Employer Matching Contribution is required, the Employer, at its
discretion, may make a basic Employer Matching Contribution and a supplemental Employer
Matching Contribution as provided herein for any Plan Year. Any such Employer Matching
Contribution shall be made as soon as administratively feasible after the last day of the Plan Year
and within the time period permitted by law for the benefit of each Participant who remains an
Eligible Employee as of the last day of the Plan Year.
(b) The basic Employer Matching Contribution, if one is made, shall be a
percentage of (cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72) Deferral Contributions which do not exceed 6% of such
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:40)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)Elective (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:12), which percentage shall
be based on a sliding scale of adjusted earnings before interest, income taxes, depreciation and
(cid:68)(cid:80)(cid:82)(cid:85)(cid:87)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:37)(cid:44)(cid:55)(cid:39)(cid:36)(cid:180)(cid:12)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)
year of the Employer by the Board of Supervisors (the (cid:179)(cid:51)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:180)(cid:12)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
the following schedule:
Adjusted EBITDA as a Percentage of the
(cid:51)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)
Year
Matching Contribution Expressed as a
Percentage of Eligible Elective Deferral
Contributions for the Plan Year
115% or higher of Adjusted
EBITDA
100% to 114% of Adjusted
EBITDA
90% to 99% of Adjusted EBITDA
Less than 90% of Adjusted
EBITDA
100%
50%
25%
0%
(c) Any supplemental Employer Matching Contribution may be in such amount as
the Board of Supervisors of the Employer shall select. This section shall not be interpreted as a
guarantee of any Employer Matching Contributions.
(d) Notwithstanding the foregoing and in lieu of any other Employer Matching
Contribution in accordance with Section 3.10 (b) or 3.10(c), the Employer shall make an
Employer Matching Contribution, for each Plan Year, for each Participant who is covered by the
collective bargaining agreement between Inergy Propane, LLC and Local Union 1293 of the
International Brotherhood of Electrical Workers, AFL-(cid:38)(cid:44)(cid:50)(cid:3)(cid:11)(cid:75)(cid:72)(cid:85)(cid:72)(cid:76)(cid:81)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:44)(cid:37)(cid:40)(cid:58)(cid:3)
(cid:20)(cid:21)(cid:28)(cid:22)(cid:3) (cid:38)(cid:37)(cid:36)(cid:180)(cid:12)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:81)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:3) (cid:24)(cid:19)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:40)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:71)(cid:82)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:3)(cid:25)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)
through the July 31, 2015, expiration of the current IBEW 1293 CBA and any renewal thereof
which provides expressly for the 50% rate of match.
3.11 Voluntary Nondeductible Contributions: No Participant in the Plan is required or
permitted to make voluntary nondeductible contributions to the Trust. However, any voluntary
nondeductible contributions which may have been made by a Participant to the Plan or a Prior
Plan previously and which, as of the Effective Date, remain part of the Trust, as well as any
amounts attributable to such contributions, shall remain in the Plan and shall be allocated to a
separate voluntary nondeductible contribution account for the benefit of the Participant. Such
account shall be held and invested and shall share in gains and losses of the Trust, in accordance
(cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:17)(cid:3) (cid:3) (cid:36)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:72)(cid:83)(cid:68)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3) (cid:89)(cid:82)(cid:79)(cid:88)(cid:81)(cid:87)(cid:68)(cid:85)(cid:92)(cid:3) (cid:81)(cid:82)(cid:81)(cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)
contribution account shall be fully vested and nonforfeitable at all times and shall be
distributable at any time as the Participant shall direct, subject to the provisions of Article VII.
3.12 Actual Contribution Percentage Limitations:
(a) Actual Contribution Percentage Tests:
(i) As to each Plan Year and unless the Employer has elected one of the
safe harbors, as provided in Section 3.13, the Actual Contribution Percentage for Highly
Compensated Employees for the Plan Year must bear a relationship to the Actual Contribution
Percentage for Non-Highly Compensated Employees for the Plan Year which satisfies either of
the following Actual Contribution Percentage Tests:
the Highly
Compensated Employees is not more than the Actual Contribution Percentage for the Non-
Highly Compensated Employees multiplied by 1.25, or
(A) The Actual Contribution Percentage
for
(B) The excess of the Actual Contribution Percentage for the
Highly Compensated Employees over that of the Non-Highly Compensated Employees is not
more than 2 percentage points, and the Actual Contribution Percentage of the Highly
Compensated Employees is not more than the Actual Contribution Percentage for the Non-
Highly Compensated Employees multiplied by 2.0.
(ii) In the event that this Plan satisfies the requirements of Code Section
401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or in the event one
or more other plans satisfy such requirements only if aggregated with the Plan, the Actual
Contribution Percentages shall be determined, and the Actual Contribution Tests shall be
applied, as if all such plans were a single plan. Such aggregation may be applied for purposes of
satisfying Section 401(m) only if such plans have the same plan year and use the same Actual
Contribution Percentage testing method.
(iii) If the Committee so elects, by duly authorized amendment, the Actual
Contribution Percentage Tests may be applied by using the Actual Contribution Percentage for
Participants who are Non-(cid:43)(cid:76)(cid:74)(cid:75)(cid:79)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:70)(cid:72)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:11)(cid:179)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)
(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:87)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:180)(cid:12)(cid:3) (cid:85)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:3) (cid:11)(cid:179)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:87)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:180)(cid:12)(cid:15)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3)
testing has been used for the preceding five Plan Years or, if less, all of the years the Plan has
been in existence, or, if as a result of a merger or acquisition described in Code Section
410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using
current year testing, and the change is made within the transition period described in Code
Section 410(b)(6)(C)(ii).
(iv) The Committee shall maintain records sufficient to demonstrate
satisfaction of the Actual Contribution Percentage Test, as well as the amount of Employer
contributions and/or elective deferral contributions taken into consideration for purposes of
satisfying such test.
(b) Correction of Excess Aggregate Contribution: In the event that the Actual
Contribution Percentage of the Highly Compensated Employees does not satisfy either of the
Actual Contribution Percentage Tests set out in Section 3.12(a) above, the excess voluntary
nondeductible contributions and/or Employer matching contributions to the Plan for the Plan
Year (and any excess elective contributions made under this Plan or any other cash or deferred
arrangement maintained by the Employer which are recharacterized as voluntary nondeductible
(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:12)(cid:15)(cid:3) (cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:86)(cid:3) (cid:179)(cid:40)(cid:91)(cid:70)ess Aggregate
(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:180)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:68)(cid:87)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3) (cid:40)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3) (cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3) (cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3)
forfeited, if attributable to Employer matching contributions, or distributed to the Participant
within twelve months after the close of the Plan Year in which the excess arose. In the event the
Plan should be terminated during a Plan Year in which Excess Aggregate Contributions arise,
such Excess Contributions shall be distributed no later than 12 months following the date of
termination. The Excess Aggregate Contributions with respect to any Plan Year shall be
calculated as the excess of (i) the aggregate contribution percentage amounts taken into account
in computing the numerator of the contribution percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over (ii) the maximum contribution percentage
amounts permitted by the Actual Contribution Percentage Test (determined by hypothetically
reducing contributions made on behalf of Highly Compensated Employees in order of their
contribution percentages beginning with the highest of such percentages).
(c) Distribution of Excess Aggregate Contributions: The Excess Aggregate
Contributions for any Plan Year are to be distributed among Highly Compensated Employees on
the basis of the amount of contributions made by or on behalf of each such Employee which is
counted for purposes of computing the Actual Contribution Ratio of such Employee.
Highly Compensated Employee or Employees with the largest contribution percentage amount.
(i) Such Excess Aggregate Contributions shall be distributed, first, to the
(ii) The above process shall be repeated with reference to the Highly
Compensated Employee with the next largest contribution percentage amount and, then,
continuing in descending order until all Excess Aggregate Contributions have been distributed.
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:15)(cid:3)(cid:179)(cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
of any Excess Aggregate Contributions.
(d) Definitions: For purposes of applying the provisions of this Section 3.12 and
Article III,
(cid:11)(cid:76)(cid:12)(cid:3)(cid:179)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)
Contribution Ratios for the group of Highly Compensated Employees who are eligible to make
voluntary nondeductible contributions or to receive Employer matching contributions or the
to make voluntary
group of Non-Highly Compensated Employees who are eligible
nondeductible contributions or to receive Employer matching contributions, as the case may be.
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)(cid:179)(cid:36)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:53)(cid:68)(cid:87)(cid:76)(cid:82)(cid:180)(cid:3)shall mean, for each employee, the sum of
his voluntary nondeductible contributions, if any, and his Employer matching contributions, if
any, for the Plan Year, divided by his Compensation for the Plan Year.
Actual Contribution Percentages shall be calculated to the nearest one hundredth of one percent.
(A) The Actual Contribution Ratio for each Employee and the
(B) If a Highly Compensated Employee makes voluntary
nondeductible contributions and/or receives Employer matching contributions under more than
one plan of the Employer, all such contributions shall be aggregated for purposes of determining
the Actual Contribution Ratio of that Employee.
(C) If a Highly Compensated Employee participates in two or more
cash or deferred arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate, if mandatorily
disaggregated under regulations under Code Section 401(m).
(D) For purposes of computing Actual Contribution Ratios and
satisfying the Actual Contribution Percentage Tests of this Section 3.12, any Employer matching
contributions which are treated as elective deferral contributions, in accordance with Section
3.05(b)(iii), for purposes of satisfying the Actual Deferral Percentage Tests of Section 3.05(a),
shall be disregarded.
(E) For purposes of computing Actual Contribution Ratios and
satisfying the Actual Contribution Percentage Tests of Section 3.12, all or any part of the
Employer contributions and elective deferral contributions may be treated as Employer matching
contributions, provided that such contributions are deemed to be qualified nonelective
contributions or qualified elective contributions, within the meaning of Regulation Section
1.401(m)-1(b)(5), and provided that the Actual Contribution Percentage Tests are applied using
the Actual Contribution Percentage for the Plan Year for Participants who are Non-Highly
Compensated Employees.
(F) For purposes of computing Actual Contribution Ratios and
satisfying the actual contribution percentage tests of Section 3.12, voluntary nondeductible
contributions are taken into account for a Plan Year in which such contributions are contributed
to the Trust. Payments by the Participant to an agent of the Plan shall be treated as contributions
to the Trust, provided such contributions are transmitted to the Trust within a reasonable time.
Excess elective deferral contributions, which are recharacterized as voluntary nondeductible
contributions (if such recharacterization is permitted under the terms of this Plan), are to be taken
into account as voluntary nondeductible contributions for the Plan Year in which the excess
contributions are includable in the gross income of the Participant.
(G) For purposes of computing Actual Contribution Ratios and
satisfying the Actual Contribution Percentage Tests of this Section 3.12, Employer matching
contributions are to be taken into account for a Plan Year only if such contributions are allocated
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:3)(cid:81)(cid:82)(cid:3)
later than the end of the twelve month period beginning on the day after the close of the Plan
Year, and are made on behalf of the Participant based on his elective deferral contributions for
the Plan Year.
(e) Income Allocable to Excess Aggregate Contributions: The income attributable
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:40)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:69)le income or loss
for the Plan Year to which the Excess Aggregate Contributions relate.
(i) The income allocable to Excess Aggregate Contributions for the Plan
Year shall be determined by multiplying the income for the Plan Year allocable to voluntary
nondeductible contributions and Employer matching contributions (and amounts treated as
Employer matching contributions in accordance with Section 3.12(d)(ii)(E)) by a fraction.
Contributions of the Participant for the Plan Year.
(A) The numerator of the fraction is the Excess Aggregate
(cid:11)(cid:37)(cid:12)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:81)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)
account balance attributable to voluntary nondeductible contributions, Employer matching
contributions and/or amounts treated as Employer matching contributions as of the end of the
Plan Year, reduced by any income allocable to such account for the Plan Year and increased by
any loss allocable to such account for the Plan Year.
(ii) Notwithstanding the foregoing, the income allocable to Excess
Aggregate Contributions resulting from the recharacterization of any elective deferral
contributions as voluntary nondeductible contributions (if such recharacterization is permitted
under the terms of this Plan) shall be determined and distributed as if such recharacterized
contributions had been distributed as excess contributions.
3.13 Safe Harbors: Notwithstanding any other provision of this Article III to the
contrary, for any Plan Year as to which the Employer has elected, in accordance with Section
3.13(b), to make a Safe Harbor Contribution, the Plan shall be deemed to have satisfied
automatically the Actual Deferral Percentage Limitations of Section 3.05, and any elective
deferral contributions made pursuant to Section 3.03 shall be deemed to satisfy the non-
discrimination standards of Code Section 401(k)(3). In addition, with respect to any Plan Year,
as to which the matching contribution safe harbor provisions of Section 3.13(a)(ii) are satisfied,
the Plan shall be deemed to have satisfied automatically the Actual Contribution Percentage
Limitations of Section 3.12; provided, however, that such limitations shall remain applicable to
voluntary nondeductible contributions and any matching contributions which do not satisfy the
safe harbor. The provisions of this Section 3.13 shall be applicable only to a Plan Year which is
twelve months in length or, in the case of the first Plan Year, at least three months in length (or
any shorter period, in the case of a new Employer that establishes the Plan as soon as
administratively feasible after coming into existence).
(a) Safe Harbor Contributions: For each Plan Year for which the provisions of this
Section 3.13 are applicable, the Employer shall contribute to the Trust either the amount specified
in Section 3.13(a)(i) or Section 3.13(a)(ii) below. The contribution made for the benefit of a
Participant hereunder shall be fully vested and nonforfeitable at all times, shall be subject to the
restrictions on withdrawals and distributions of Section 3.08, (but shall not be subject to
distribution for hardship in accordance with Section 3.09), and shall be allocated to that
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)(cid:54)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)
twelve months of the close of the Plan Year. Such Safe Harbor Contribution may be made to
another qualified defined contribution plan maintained by the Employer, provided that such plan is
identified in Appendix II to this Plan, that each Employee eligible to participate in this Plan also is
eligible under such other plan, and that such other plan has the same plan year as this Plan.
(i) 3% Safe Harbor Contribution: The Employer will contribute an amount
equal to 3% of the Compensation of each Participant who is eligible to make an elective deferral
contribution to the Trust in accordance with the provisions of Section 3.03, or who would be
eligible to make an elective deferral contribution but for a suspension, in accordance with
Section 3.09(c)(ii) by reason of having received a hardship distribution, or due to statutory
limitations, such as Code Section 402(g) or Code Section 415. Compensation shall be defined as
in Section 1.04; provided, however, that in no event shall any dollar limit, other than the limit
imposed by Code Section 401(a)(17), apply to the Compensation of a Non-Highly Compensated
Employee.
(ii) Safe Harbor Matching Contribution: In lieu of the contribution
provided for in subsection (i) above, the Employer may contribute an amount for each
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:3) (cid:20)(cid:19)(cid:19)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)al contributions which do not
(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:3) (cid:22)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:83)(cid:79)(cid:88)(cid:86)(cid:3) (cid:68)(cid:81)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:72)(cid:84)(cid:88)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:3) (cid:24)(cid:19)(cid:8)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:3)(cid:22)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:69)(cid:88)(cid:87)(cid:3)(cid:71)(cid:82)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:3)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)ensation; provided, however, that with respect to
any Plan Year as to which the Employer elects to make the Safe Harbor Contribution pursuant to
this Section 3.13(a)(ii), no Employer Matching Contribution shall be made, pursuant to Section
3.10, with respect to elective deferral contributions made by any Participant. The Safe Harbor
Matching Contributions may be made with respect to elective deferral contributions for the Plan
Year as a whole or separately with respect to each payroll period (or with respect to all payroll
periods ending with or within each month or Plan Year quarter) taken into account for the Plan
Year. If the payroll method is used, however, the Safe Harbor Matching Contributions due with
respect to elective deferral contributions made during any Plan Year quarter beginning after May
1, 2000, shall be deposited into the Trust by the last day of the following Plan Year quarter.
(b) Election: The election to make a Safe Harbor Contribution, as provided herein
for any Plan Year shall be made, prior to the first day of such Plan Year, by resolution or other
appropriate action of the Employer, shall include the election of a specific safe harbor
contribution method to be recited within Appendix II of this Plan, and may not be changed
except by duly authorized amendment. Notwithstanding the foregoing, the election to make the
3% Safe Harbor Contribution for a Plan Year may be made, as provided herein, at any time
during that Plan Year, but not later than 30 days prior to the last day of that Plan Year, provided
that the Plan provides for Actual Deferral Percentage testing and, if applicable, Actual
Contribution Percentage testing, to be applied on a current year basis and provided, further, that
the notice requirements of Section 3.13(c)(ii) are satisfied.
(c) Notice:
(i) Timing of Notice: The Employer shall provide written notice to
Participants, at least 30 days, but not more than 90 days, prior to the first day of the applicable
Plan Year of its intention to make a Safe Harbor Contribution, and such notice shall specify
whether the Employer will make the 3% Safe Harbor Contribution or the Safe Harbor Matching
Contribution. If an Employee becomes a Participant after the date on which notice is given, as
provided herein, the Employer shall provide written notice to that Participant no earlier than 90
days prior to his Date of Participation and no later than his Date of Participation.
(ii) Notice of Late Election Option: Alternatively, the Employer may
provide written notice to Participants, at least 30 days, but not more than 90 days, prior to the
first day of the applicable Plan Year that, at a later date in the Plan Year, it may elect to make the
3% Safe Harbor Contribution and that, if such election is made, a supplemental notice will be
provided to Participants at least 30 days prior to the last day of the Plan Year informing them of
such election.
(iii) Contents of Notice: All notices shall be written in a manner
calculated to be understood by the average Participant and shall describ(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:86)(cid:3)
and obligations under the Plan.
(d) Modification of Deferral Elections: In addition to the provisions of Section
3.04(b) with regard to amendment of deferral elections, a Participant may make or modify his
salary deferral election during the thirty-day period immediately following receipt of the notice
described in Section 3.13(b).
(e) Reduction or Elimination of Safe Harbor Matching Contributions: The Plan
may be amended during a Plan Year to reduce or eliminate the Safe Harbor Matching
Contribution, provided that the conditions of Sections 3.13(e)(i), (ii), (iii) and (iv) below are
satisfied and provided that all other requirements of the Safe Harbor are satisfied through the
effective date of the amendment.
(i) Notice: A supplemental notice shall be provided to all Participants
explaining the consequences of the amendment , specifying the effective date of the amendment,
and informing Participants of their right to modify their salary deferral elections and, if
applicable, voluntary nondeductible contribution elections.
(ii) Effective Date: Any reduction or elimination of Safe Harbor Matching
Contributions shall be effective no earlier than the later of (A) 30 days after the supplemental
notice required in Section 3.13(e)(i) has been provided to Participants and (B) the date on which
the amendment is adopted.
(iii) Modification of Elections: A participant may modify his salary
deferral election and, if applicable, his voluntary nondeductible contribution election, during the
thirty-day period immediately following receipt of the supplemental notice provided in
accordance with Section 3.13(e)(i) above.
(iv) Testing: The Actual Deferral Percentage Limitations of Section 3.05
and, if applicable, the Actual Contribution Percentage Limitations of Section 3.12 must be
satisfied for the entire Plan Year, using the current year testing method.
3.14 Automatic Contribution Arrangement:
(a) Each Covered Participant, as defined herein, shall be deemed to have elected
to make an elective deferral contribution to the Trust and thereby to defer receipt of 6% of his
(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:11)(cid:75)(cid:72)(cid:85)(cid:72)(cid:76)(cid:81)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:68)(cid:88)(cid:87)(cid:82)(cid:80)(cid:68)(cid:87)(cid:76)(cid:70)(cid:3)(cid:71)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3)
subject to the limitations set forth in Section 3.05, and the then applicable limits under Code
Section 402(g); provided, however, that in no event shall an elective deferral contribution be
permitted by any Participant to the extent that it would result in a violation of Code Section 415
(cid:11)(cid:54)(cid:72)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:36)(cid:83)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:91)(cid:15)(cid:3)(cid:179)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)- (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:20)(cid:24)(cid:180)(cid:12)(cid:3)(cid:82)r Code Section 401(k). To the extent that any
other provision of this Article III is inconsistent with automatic contribution arrangement
provisions of this Section 3.14, this Section shall govern.
(b) Written notice of the automatic contribution arrangement and automatic
deferral amount shall be given to each Covered Participant no more than 90 days prior to his
initial Date of Participation (and no later than his Date of Participation) and to each Covered
Participant at least 30 days, but not more than 90 days, prior to the beginning of each Plan Year.
The notice must describe accurately and in terms calculated to be understood, (i) the amount of
the automatic deferral that will be made on behalf of the Covered Employee in the absence of an
affirmative election, (ii) the right of the Covered Participant to have no elective deferral made on
his behalf or to have an elective deferral made on his behalf in a different amount, and (iii) how
the automatic deferrals will be invested in the absence of an affirmative election by the Covered
Participant.
(c) Each Covered Participant shall be accorded reasonable opportunity to modify
his deferral election for the applicable Plan Year, to increase or reduce the deferral amount, or to
opt out of the automatic deferral feature by entering into a deferral election agreement with the
Employer. Such election shall be implemented by the Employer as soon as administratively
feasible after receipt of same. In the event a Participant elects to opt out of the elective deferral
feature with respect to any Plan Year, such election shall remain in effect for the remainder of
that Plan Year and for succeeding Plan Years, unless and until the Participant affirmatively elects
to make an elective deferral contribution by entering into a deferral election agreement with the
Employer.
(cid:11)(cid:71)(cid:12)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:17)(cid:20)(cid:23)(cid:15)(cid:3)(cid:68)(cid:3)(cid:179)(cid:38)(cid:82)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:180)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
whom no affirmative election regarding elective deferral contributions is in effect as of the
effective date of this Section 3.14 or, if later his Date of Participation.
ARTICLE IV - ALLOCATIONS
4.01 Allocation of Employer Contributions:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:40)(cid:68)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:83)(cid:68)(cid:76)(cid:71)(cid:3) (cid:76)(cid:81)(cid:87)(cid:82)(cid:3) (cid:82)(cid:85)(cid:3) (cid:68)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3)
for the Trust for each Plan Year shall be determined by applying the formula A/B x C. A is the
(cid:40)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3) (cid:37)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:40)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)
Participants and C is the total Employer contribution.
(b) An Eligible Participant is one who is still employed by the Employer on the
last day of that Plan Year. In addition, any Participant whose employment is terminated during
the Plan Year because of death, disability or attainment of Normal Retirement Age shall be
deemed to be an Eligible Participant for purposes of this Section 4.01.
(c) Notwithstanding the foregoing, for any Plan Year for which the top heavy
(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:36)(cid:85)(cid:87)(cid:76)(cid:70)(cid:79)(cid:72)(cid:3) (cid:59)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:92)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3)
determined in accordance with Section 10.03.
(cid:11)(cid:71)(cid:12)(cid:3)(cid:40)(cid:68)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)f Employer contributions for the Plan Year shall be
allocated to his Employer Contribution Account.
4.02 Application of Miscellaneous Receipts: Any miscellaneous receipts occurring during
the Plan Year, as provided in Section 12.06, shall be applied as of the last day of the Plan Year
toward satisfaction of administrative expenses, as Employer contributions in accordance with
Section 3.01 or, during any top heavy year, Section 10.03 or, as Employer matching
contributions in accordance with Section 3.10.
4.03 Crediting Gains and Losses on General Trust Investments: The share of the gains
(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
each valuation date, as provided in Section 5.05. The amount to be credited or charged to each
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:68)(cid:83)(cid:83)(cid:79)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:88)(cid:79)(cid:68)(cid:3) (cid:36)(cid:18)(cid:37)(cid:3) (cid:91)(cid:3) (cid:38)(cid:17)(cid:3) (cid:3) (cid:36)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)
(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:82)(cid:85)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:30)(cid:3)(cid:37)(cid:3)
is the market value of the total accounts of all Participants at the beginning of the Plan Year or
other valuation period, and C is the net gain or loss on the Trust investments for the Plan Year or
other valuation period. For purposes of this computation, however, there shall be excluded from
th(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3) (cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3) (cid:69)(cid:72)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)
Sections 4.01, 4.02, and 4.04 for the current year.
4.04 Investment of Accounts: A Participant shall have the right to direct the investment
of all assets in his account, in increments of 1%, subject to any restriction or limitation published
in writing by the Committee and subject, further, to any restriction or limitation associated with
any specific investment vehicle selected by the Participant. Each Participant may choose from
among such investment options as may be made available, from time to time, by the Committee
and which individually and collectively are designed to conform to Labor Regulation
§ 2550.404c-1, with the intent that the Plan will be deemed to be a Section 404(c) plan in order
that fiduciaries of the Plan may be relieved of liability for any losses which are the direct and
(cid:81)(cid:72)(cid:70)(cid:72)(cid:86)(cid:86)(cid:68)(cid:85)(cid:92)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:86)(cid:82)(cid:79)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:85)(cid:72)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)
may add or delete investment options at any time as it determines to be in the best interest of
Participants. To the extent that a Participant fails to provide investment instructions at such time
and in such manner as the Committee may require, the Participant shall be presumed to have
elected to have all amounts then held within his account, as well as all future contributions made
by him or for his benefit, invested in the qualified default investment alternative which the
Committee shall designate from time to time.
A Participant(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:17)(cid:19)(cid:23)(cid:15)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3)
future contributions, may be made or modified at any time and will become effective as soon as
administratively feasible after appropriate notice has been provided to the Committee. With
respect to reinvestment of prior accumulation, a Participant may direct that up to the total value
held in any investment option for the benefit of his account be transferred to any other
investment option or options in increments of 1%, such directive to be implemented as soon as
administratively feasible after appropriate notice is received by the Committee, provided that the
value of any account or portion thereof to be reinvested shall be determined on the Valuation
Date immediately preceding the date of the transfer.
Neither the Committee nor the Trustee shall have any liability for following the
directions of the Participant or any duty to ascertain whether any investment directive is prudent.
If, at any time, the Committee or Trustee believes that any investment direction may or will
result in a prohibited transaction, or otherwise adversely affect the qualified status of the Plan,
the Committee or Trustee, without liability to the Participant or any other party, may refuse to
implement such direction or may require reversal of such direction, unless and until satisfied,
based upon such opinions of counsel as desired, that the transaction and/or investment does not
and will not have such result or effect.
ARTICLE V - BENEFITS
5.01 Retirement Benefits:
(a) Normal Retirement: A Participant is entitled to receive his Normal Retirement
Benefit as of his Normal Retirement Date.
Participant attains age 65 or the 5th anniversary of his Date of Participation.
(i) Normal Retirement Date shall mean the later of the date on which the
(ii) Normal Retirement Benefit shall mean the entire balance of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:15)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:24)(cid:17)(cid:19)(cid:24)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)
in accordance with the provisions of Articles VI and VII of the Plan.
(b) Late Retirement: A Participant whose employment continues beyond his
Normal Retirement Date shall continue to participate in this Plan until his actual retirement and
is entitled to receive, as his Late Retirement Benefit, the entire balance remaining in his account,
valued in accordance with the provisions of Section 5.05, and distributed in accordance with the
provisions of Articles VI and VII of the Plan.
(c) Early Retirement: No Early Retirement Benefit is provided under the terms of
this Plan.
5.02 Disability Benefit: A Participant whose employment with the Employer ceases as a
result of total disability (including while on a leave of absence for Qualified Military Service, in
accordance with Section 12.04) shall be entitled to receive, as his Disability Benefit, the entire
balance of his account, valued in accordance with the provisions of Section 5.05 and distributed
in accordance with the provisions of Articles VI and VII as of his Disability Date.
(cid:11)(cid:68)(cid:12)(cid:3)(cid:179)(cid:39)(cid:76)(cid:86)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)as of which the Committee determines,
in a nondiscriminatory manner, that the Participant has sustained a total disability.
(cid:11)(cid:69)(cid:12)(cid:3) (cid:179)(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:39)(cid:76)(cid:86)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:83)(cid:75)(cid:92)(cid:86)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3) (cid:82)(cid:85)(cid:3) (cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3) (cid:76)(cid:80)(cid:83)(cid:68)(cid:76)(cid:85)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)
renders the Participant unable to engage in his usual and customary activities or comparable
activity for a period of six months. Such determination shall be made by the Committee and may
(cid:69)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:88)(cid:83)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:83)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:82)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)(cid:71)(cid:76)(cid:86)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:71)(cid:76)(cid:86)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)
insurance benefits or upon other independent medical opinion. Notwithstanding the foregoing,
no Participant shall be entitled to a Disability Benefit if the physical or mental impairment (i)
was intentionally self-inflicted or (ii) was incurred, suffered, or occurred while the Participant
was engaged in, or resulted from the Participant having engaged in, a criminal enterprise.
5.03 Death Benefit: Upon the death of a Participant prior to his separation from service
with the Employer (including while on a leave of absence for Qualified Military Service, in
accordance with Section 12.04), the entire balance of his account, valued in accordance with the
provisions of Section 5.05, shall be distributable, as a Death Benefit, as soon as administratively
feasible and in accordance with the provisions of Articles VII of the Plan.
5.04 Deferred Vested Benefit(cid:29)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:57)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)
100% at all times, such that he shall be entitled to the entire balance in his account, valued in
accordance with the provisions of Section 5.05, if his participation ceases for any reason
whatsoever. Distribution of such deferred vested benefit shall be made in accordance with the
provisions of Articles VI and VII.
5.05 Valuation Date: The assets of the Plan shall be valued as of each day on which the
New York Stock Exchange is open for trading. For purposes of distribution, the value of a
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:70)(cid:82)(cid:76)(cid:81)(cid:70)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:80)(cid:80)(cid:72)(cid:71)(cid:76)(cid:68)(cid:87)(cid:72)(cid:79)(cid:92)(cid:3)
preceding the date on which (a) the Participant or other payee becomes entitled to distribution by
virtue of the occurrence of a distributable event, (b) consent of the Participant or other payee is
provided (if such consent is required), and (c) the Participant or other payee completes and
submits all required distribution election forms, if any, which date shall be referred to as the
(cid:179)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:180)(cid:3)(cid:3)
(cid:24)(cid:17)(cid:19)(cid:25)(cid:3) (cid:179)Year of Vested Service(cid:180)(cid:29)(cid:3) (cid:3) (cid:36)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:57)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)
Service, for purposes of Section 5.04, for any Plan Year, or any comparable twelve-month period
prior to the Effective Date of the Plan, during which he has been credited with an Hour of
Service.
5.07 Forfeiture for Cause: No vested benefit under this Plan shall be subject to forfeiture
for cause.
5.08 In-Service Withdrawals: Any Participant may make withdrawals, at any time and
without regard to termination of employment with the Employer, from his Employer
Contribution Account, and Voluntary Nondeductible Contribution Account, or from amounts
transferred to this Plan from a prior plan or by rollover pursuant to Article XIII. Any Participant
who has attained age 59-1/2 may make withdrawals from any or all of his Accounts prior to his
termination of employment with the Employer; provided, however, that such withdrawals shall
be made from the following sources in the following order: (a) amounts transferred to this Plan
from a prior plan or by rollover pursuant to Article XIII, (b) Voluntary Nondeductible
Contribution Account, (c) Employer Contribution Account and/or Employer Matching
Contribution Account, and (d) Elective Deferral Contribution Account.
5.09 Qualified Reservist Distribution: Effective as of January 1, 2011, any Participant,
regardless of age, who is a member of the reserves and who is ordered or called to active duty for
a period in excess of 179 days or for an indefinite period may withdraw all or any portion of his
Elective Deferral Contribution Account, provided that such withdrawal is made during the period
beginning on the date of such order or call to active duty and ending at the close of the active
duty period.
ARTICLE VI - COMMENCEMENT OF BENEFITS
6.01 General: Subject to the provisions of Section 6.02, unless the Participant elects
otherwise, distribution of each Participant(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:79)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:25)(cid:19)(cid:87)(cid:75)(cid:3) (cid:71)(cid:68)(cid:92)(cid:3)
following the close of the Plan Year in which the latest of the following occurs:
(a) The Participant attains age 65 or his Normal Retirement Age, if earlier,
(b) There occurs the 10th anniversary of the (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:82)(cid:85)
(c) The Participant terminates his employment with the Employer.
Notwithstanding the foregoing, the failure of a Participant and/or his spouse, if spousal consent is
required, to consent to a distribution while a benefit is immediately distributable shall be deemed
to be an election to defer commencement of payment of such benefit.
6.02 Required Commencement Date: As to any Participant who is a Five Percent Owner,
as defined in Section 1.16, during the Plan Year ending in the calendar year in which the
Participant attains age 70-1/2, distribution of benefits shall begin not later than the first day of
April following the calendar year in which the Participant attains age 70-1/2, which date shall be
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:179)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:180)(cid:3)(cid:3)(cid:50)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:74)(cid:88)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:41)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)
Owner pursuant to this Section 6.02, such distribution must continue even if the Participant
ceases to be a Five Percent Owner in a subsequent year.
Except with respect to a Participant who is a Five Percent Owner and except as provided
in Section 6.03, distribution of benefits shall begin not later the first day of April of the calendar
year following the later of the calendar year in which the Participant attains age 70-1/2, or the
(cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:179)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:180)
6.03 TEFRA Section 242(b)(2) Election: Notwithstanding the foregoing, if the
Participant had accrued a benefit under the plan as of December 31, 1983, and executed a
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:21)(cid:23)(cid:21)(cid:11)(cid:69)(cid:12)(cid:11)(cid:21)(cid:12)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:12)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:45)(cid:68)(cid:81)(cid:88)(cid:68)(cid:85)(cid:92)(cid:3)(cid:20)(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:23)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
designation, provided that the distribution designation specifies the time at which distribution
will commence, the period over which distributions will be made, and, in the case of a
distribution by reason of death, the beneficiaries of the Participant, listed in order of priority, and
provided, further, that such designation has not been revoked or modified after December 31,
1983. For purposes of the foregoing and except as otherwise provided by law, such a
distribution designation shall not be deemed to have been modified except by affirmative action
by the Participant.
If any designation to which Section 6.03 refers is revoked, any subsequent distribution
must satisfy the requirements of Code Section 401(a)(9) and the regulations issued thereunder.
If such a designation is revoked subsequent to the date which otherwise would have been the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:3) (cid:80)(cid:88)(cid:86)(cid:87)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:15)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:81)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
calendar year following the calendar year in which the revocation occurs, the total amount not
yet distributed which would have been distributed, but for the Section 242(b) designation, in
order to satisfy Code Section 401(a)(9) and the regulations issued thereunder. The mere
substitution or addition of a beneficiary under the designation will not be considered to be a
revocation of the designation, provided that such substitution or addition does not alter the period
over which distributions are to be made under the designation, directly or indirectly, such as by
altering the relevant measuring life.
6.04 Required Minimum Distributions:
(a) General Rules: The provisions of this Section 6.04 will apply for purposes of
determining required minimum distributions for calendar years beginning after December 31,
2002, and will be applied in accordance with the Treasury regulations under Code Section
401(a)(9); provided, however, that distributions may be made, pursuant to Section 6.03, in
accordance with a valid Section 242(b)(2) election. Distribution of the Participant's entire
interest will be made or commenced no later than the Participant's required commencement date,
as provided in Section 6.02.
(b) Death of Participant Before Distributions Begin: If the Participant dies before
distributions begin, distribution of the Participant's entire interest will be made or commenced as
follows:
(i) If the Participant's surviving spouse is the Participant's sole designated
beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar
year immediately following the calendar year in which the Participant died, or by December 31
of the calendar year in which the Participant would have attained age 70-1/2, if later.
(ii) If the Participant's surviving spouse is not the Participant's sole
designated beneficiary, then distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year in which the
Participant died, and, the amount payable to each beneficiary will be distributed, at the election
of that beneficiary, either (A) by December 31 of the calendar year containing the fifth
anniversary of the Participant's death or (B) over the life of such beneficiary or over a period not
extending beyond the life expectancy of such beneficiary.
(iii) If there is no designated beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire interest will be distributed by
December 31 of the calendar year containing the fifth anniversary of the Participant's death.
(iv) If the Participant's surviving spouse is the Participant's sole designated
beneficiary and the surviving spouse dies after the Participant but before distributions to the
surviving spouse begin, this Section 6.04(b), other than Section 6.04(b)(i), will apply as if the
surviving spouse were the Participant.
For purposes of this Section 6.04(b) and Section 6.04(e), unless Section
6.04(b)(iv) applies, distributions are considered to begin on the Participant's required beginning
date. If Section 6.04(b)(iv) applies, distributions are considered to begin on the date on which
the Plan is required to begin making distributions to the surviving spouse under Section
6.04(b)(i). If distributions under an annuity purchased from an insurance company irrevocably
commence to the Participant before the Participant's required beginning date (or to the
Participant's surviving spouse before the date on which the Plan is required to begin making
distributions to the surviving spouse under section 6.04(b)(i)), the date distributions are
considered to begin is the date distributions actually commence.
(c) Forms of Distribution: Unless the Participant's interest is distributed in the
form of an annuity purchased from an insurance company or in a single sum on or before the
required beginning date, as of the first distribution calendar year, distributions will be made in
accordance with Sections 6.04(d) and 6.04(e). If the Participant's interest is distributed in the
form of an annuity purchased from an insurance company, distributions thereunder will be made
in accordance with the requirements of Section 401(a)(9) of the Code and applicable Treasury
regulations.
(d) Required Minimum Distributions During Lifetime of Participant: During the
Participant's lifetime, the minimum amount that will be distributed for each distribution calendar
year is the lesser of:
(i) the quotient obtained by dividing the Participant's account balance by
the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations, using the Participant's age as of the Participant's birthday in the distribution
calendar year; or
(ii) if the Participant's sole designated beneficiary for the distribution
calendar year is the Participant's spouse, the quotient obtained by dividing the Participant's
account balance by the number in the Joint and Last Survivor Table set forth in Section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's and spouse's attained ages as of
the Participant's and spouse's birthdays in the distribution calendar year.
The required minimum distributions, as determined in accordance with this Section 6.04(d), shall
begin with the first distribution calendar year and continue through the distribution calendar year
that includes the Participant's date of death.
(e) Required Minimum Distributions After Death of Participant:
(i) Death On or After Date Distributions Begin:
(A) Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the remaining life expectancy of the
Participant's designated beneficiary, determined as follows:
using the age of the Participant in the year of death, reduced by one for each subsequent year,
(1) The Participant's remaining life expectancy is calculated
(2) If the Participant's surviving spouse is the Participant's
sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated
for each distribution calendar year after the year of the Participant's death, using the surviving
spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year
of the surviving spouse's death, the remaining life expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year
of the spouse's death, reduced by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is not the
Participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy
is calculated using the age of the beneficiary in the year following the year of the Participant's
death, reduced by one for each subsequent year.
(B) No Designated Beneficiary. If the Participant dies on or after
the date distributions begin and there is no designated beneficiary as of September 30 of the year
after the year of the Participant's death, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the Participant's remaining life expectancy
calculated using the age of the Participant in the year of death, reduced by one for each
subsequent year.
(ii) Death Before Date Distributions Begin:
(A) Participant Survived by Designated Beneficiary. If the
Participant dies before the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated beneficiary, determined as provided in
section 6.04(e)(i).
(B) No Designated Beneficiary. If the Participant dies before the
date distributions begin and there is no designated beneficiary as of September 30 of the year
following the year of the Participant's death, distribution of the Participant's entire interest will be
completed by December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(C) Death of Surviving Spouse Before Distributions to Surviving
Spouse are Required to Begin. If the Participant dies before the date distributions begin, the
Participant's surviving spouse is the Participant's sole designated beneficiary, and the surviving
spouse dies before the Plan is required to begin making distributions to the surviving spouse
under Section 6.04(b), this Section 6.04(e)(ii) will apply as if the surviving spouse were the
Participant.
(f) Definitions: For purposes of applying the required minimum distribution
provisions of this Section 6.04:
(cid:11)(cid:76)(cid:12)(cid:3)(cid:179)(cid:39)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)
as the beneficiary under Article VII of the plan and is the designated beneficiary under Section
401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)(cid:179)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:68)(cid:3)
minimum distribution is required. For distributions beginning before the Participant's death, the
first distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participant's required commencement date. For distributions beginning after
the Participant's death, the first distribution calendar year is the calendar year in which
distributions are to begin under section 6.04(b). The required minimum distribution for the
Participant's first distribution calendar year will be made on or before the Participant's required
commencement date. The required minimum distribution for other distribution calendar years,
including the required minimum distribution for the distribution calendar year in which the
Participant's required commencement date occurs, will be made on or before December 31 of
that distribution calendar year.
the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.
(cid:11)(cid:76)(cid:76)(cid:76)(cid:12)(cid:3)(cid:179)(cid:47)(cid:76)(cid:73)(cid:72)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:11)(cid:76)(cid:89)(cid:12)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:10)(cid:86)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:37)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
the last valuation date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year), increased by the amount of any contributions made and allocated or
forfeitures allocated to the account balance as of dates in the valuation calendar year after the
valuation date, and decreased by distributions made in the valuation calendar year after the
valuation date. The account balance for the valuation calendar year includes any amounts rolled
over or transferred to the plan either in the valuation calendar year or in the distribution calendar
year, if distributed or transferred in the valuation calendar year.
(g) 2009 Required Minimum Distributions: A Participant or Beneficiary to
whom a required minimum distribution for 2009 would have been required in accordance with
(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:25)(cid:17)(cid:19)(cid:23)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:68)(cid:70)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:19)(cid:20)(cid:11)(cid:68)(cid:12)(cid:11)(cid:28)(cid:12)(cid:11)(cid:43)(cid:12)(cid:3)(cid:11)(cid:179)(cid:21)(cid:19)(cid:19)(cid:28)(cid:3)(cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:48)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:68)(cid:87)(cid:76)(cid:86)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:85)(cid:72)(cid:84)uirement by receiving distributions that are
(1) equal to the 2009 Required Minimum Distributions or (2) one or more payments in a series of
substantially equal distributions (that include the 2009 Required Minimum Distributions) made
at least annually and expected to last for the life (or life expectancy) of the Participant, the joint
(cid:79)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:11)(cid:82)(cid:85)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:76)(cid:72)(cid:86)(cid:12)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:39)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:15)(cid:3)
(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)(cid:87)(cid:72)(cid:81)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:11)(cid:179)(cid:40)(cid:91)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:21)(cid:19)(cid:19)(cid:28)(cid:3)(cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:48)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:12)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)
receive those 2009 Required Minimum Distributions unless the Participant or Beneficiary
affirmatively elects, after having been given an opportunity to do so, to receive such
distributions. For purposes of the direct rollover provisions of Section 7.07, 2009 Required
Minimum Distributions and Extended 2009 Required Minimum Distributions will be treated as
eligible rollover distributions.
6.05 Cash-Out Distribution: Subject to the Direct Rollover provisions of Article VII, the
Committee shall make distribution, in advance of the date provided in Section 6.01, to a
Participant whose employment with the Employer has been terminated for reasons other than
death, disability or retirement, provided that the distribution is made in a lump sum, consists of
(cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:85)(cid:72)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:11)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:70)(cid:70)(cid:88)(cid:80)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)
contributions, within the meaning of Code Section 72(o)(5)(B), for Plan Years beginning prior to
January 1, 1989), and satisfies the following terms and conditions:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:44)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:71)(cid:3) (cid:68)(cid:87)(cid:3) (cid:7)(cid:20)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3) (cid:82)(cid:85)(cid:3) (cid:79)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
direct the immediate distribution of such account.
(cid:11)(cid:69)(cid:12)(cid:3)(cid:44)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:20)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
$5,000, and unless the Participant elects to have such distribution paid directly to an eligible
retirement plan specified by the Participant in a direct rollover or to receive the distribution in a
lump sum payment, in accordance with Section 6.05, such cash-out distribution shall be
transferred, for the benefit of the Participant, by direct rollover to an individual retirement plan
designated by the Committee.
(cid:11)(cid:70)(cid:12)(cid:3)(cid:44)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:7)(cid:24)(cid:15)(cid:19)(cid:19)(cid:19)(cid:17)(cid:19)(cid:19)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:80)(cid:88)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)
the cash-out distribution in writing. In addition, as to any cash-out distribution for which written
(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:25)(cid:17)(cid:19)(cid:24)(cid:11)(cid:70)(cid:12)(cid:15)(cid:3) (cid:76)(cid:73)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
account is subject to provisions requiring distribution in the form of a qualified joint and survivor
annuity or qualified pre-retirement survivor annuity pursuant to Article VII of this Plan, the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:15)(cid:3)(cid:80)(cid:88)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)-out distribution in writing as provided in
Article VII. With respect to cash-out distributions made to a Participant as to whom the
qualified joint and survivor annuity provisions of Article VII do not apply, if the value of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:72)(cid:76)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
exceeds $5,000.00 or is a remaining payment under a selected optional form of payment that
exceeded $5,000.00 at the time the selected payment began, the Participant must consent to the
distribution.
(cid:11)(cid:71)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
the provisions of Section 5.05.
(e) A cash-out distribution shall be made as soon as administratively feasible,
subject to the customary procedures of the Committee, following the date on which the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:72)(cid:80)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)
entitlement date for purposes of Section 5.05.
6.06 Distribution Pursuant to a Qualified Domestic Relations Order: Notwithstanding
any other provision of this Plan, the Trustee may make a distribution at any time as directed
pursuant to a domestic relations order, which has been determined to be a Qualified Domestic
Relations Order under Article XV of this Plan, to an alternate payee without regard to whether
the Participant has separated from service with the Employer or has attained the earliest
retirement age under the Plan.
ARTICLE VII - FORM OF BENEFITS
7.01 Method of Payment: All benefits hereunder shall be paid to the Participant or his
Beneficiary in the form of a single lump sum payment.
7.02 Distribution of Benefits Upon Death: In the event a Participant should die prior to
(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:82)(cid:85)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:82)(cid:73)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:15)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:83)(cid:68)(cid:76)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)
spouse; provided, however, that if there is no surviving spouse, or if the surviving spouse has
already consented to another beneficiary designation in a writing which acknowledges the effect
of such election and which is witnessed by a representative of the Plan Administrator or a notary
(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:15)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:83)(cid:68)(cid:76)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)nated Beneficiary or, if none, in
accordance with Section 7.03.
7.03 Designation of Beneficiary: Each Participant may designate one or more primary or
contingent Beneficiaries to whom his benefits are to be paid in the event the Participant should
die prior to receiving such benefits. Such designation shall be made in writing and shall be filed
with the Plan Administrator. Notwithstanding the foregoing, in the event the Participant
designates a Beneficiary other than his surviving spouse, such designation shall not be effective
(cid:88)(cid:81)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
Section 7.02. In the event a Participant designates his spouse as a beneficiary, such designation
shall become null and void upon the entry of a decree in divorce by a court of competent
jurisdiction, absent an order of court or a signed, written agreement between the parties to the
(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:85)(cid:92)(cid:17)(cid:3) (cid:3) (cid:44)(cid:73)(cid:15)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:15)(cid:3) (cid:81)(cid:82)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:3) (cid:76)(cid:86)(cid:3) (cid:79)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:82)(cid:85)(cid:3) (cid:76)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
Participant has failed to designate one and the Participant has no surviving spouse, the Trustee
(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)(cid:3)(cid:11)(cid:68)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:81)(cid:3)(cid:79)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:85)(cid:72)(cid:81)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3)
children, in equal shares, or (b) if there is no living child, to the surviving parent or parents of the
Participant in equal shares, or (c) if there is no living child or parent, to the legal representative
(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:17)(cid:3)
7.04 Qualified Joint and Survivor Annuity: Notwithstanding anything herein to the
contrary, in the event any account transferred to this Plan pursuant to Article XIII otherwise
would be subject to provisions requiring distribution in the form of a qualified joint and survivor
annuity or Qualified Pre-Retirement Survivor Annuity, then the normal form of benefit
distribution, as to such account, shall be a Qualified Joint and Survivor Annuity, unless an
election is made, as provided in Section 7.05, not to receive the benefits in such form. For
(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3)(cid:179)(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:45)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:80)(cid:80)(cid:72)(cid:71)(cid:76)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)
(cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:76)(cid:73)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:15)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:3) (cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:76)(cid:73)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)
which is 50% of the amount of the annuity payable during the joint lives of the Participant and
the spouse, and which is the actuarial equivalent of a single life annuity for the life of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:68)(cid:81)(cid:3)(cid:88)(cid:81)(cid:80)(cid:68)(cid:85)(cid:85)(cid:76)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:15)(cid:3)(cid:179)(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:45)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:3)
immediate life annuity for the Participant. The Participant may elect to have such annuity
distributed upon his attainment of the earliest retirement age under the Plan.
7.05 Election of Alternate Form of Benefits:
(a) Any Participant who becomes entitled to benefits at or prior to retirement from
an account which is subject to Section 7.04 may elect to receive distribution of those benefits in
any of the forms listed in Section 7.01 or in the form of a Qualified Optional Survivor Annuity,
which is an immediate annuity for the life of the Participant, with a survivor annuity for the life
(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:26)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:68)(cid:92)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)
lives of the Participant and the spouse, and which is the actuarial equivalent of a single life
annuity for the life of the Participant, provided that:
(i) the election is made in writing, on a form to be furnished by the Plan
Administrator, and designates a beneficiary, including any class of beneficiaries or any
contingent beneficiaries, and the form of benefits, which beneficiary or beneficiaries and form of
benefit may not be changed without spousal consent, as provided herein, unless the consent of
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3)(cid:68)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:26)(cid:17)(cid:19)(cid:24)(cid:15)(cid:3)(cid:72)(cid:91)(cid:83)(cid:85)(cid:72)(cid:86)(cid:86)(cid:79)(cid:92)(cid:3)(cid:83)(cid:72)(cid:85)(cid:80)(cid:76)(cid:87)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Participant without further consent by his spouse, and
(i(cid:76)(cid:12)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:68)(cid:79)(cid:3)
consent acknowledges the effect of such election, and the spousal consent is witnessed by a
representative of the Plan Administrator or a notary public, or
the Plan
Administrator, that the written consent of the spouse cannot be obtained because there is no
spouse or because the spouse cannot be located.
the Participant establishes,
the satisfaction of
(iii)
to
(b) The written explanation described in Section 7.06(a) may be provided to the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:72)(cid:84)(cid:88)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:75)(cid:82)(cid:90)(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3)
the period within which the Participant may elect to waive the Qualified Joint and Survivor
Annuity in accordance with Section 7.05 shall not end prior to the 30th day following the date on
which such explanation is provided.
(c) Any consent by a spouse obtained under this Section 7.05 (or establishment
that the consent of a spouse may not be obtained) shall be effective only with respect to such
spouse. A consent that permits designations by the Participant without any requirement of
further consent by such spouse must acknowledge that the spouse has the right to limit consent to
a specific beneficiary and/or a specific form of benefits where applicable, and that the spouse
voluntarily elects to relinquish either or both of such rights.
(d) A Participant may elect (with any applicable spousal consent) to waive the
requirement of Section 7.06(a) that the written explanation be provided at least 30 days prior to
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:11)(cid:76)(cid:12)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:68)(cid:71)(cid:89)(cid:76)(cid:86)(cid:72)(cid:71)(cid:3)
that he has at least 30 days to consider whether to waive the joint and survivor annuity and (with
spousal consent) elect an alternate form of distribution; (ii) distribution commences more than 7
days after the written explanation is provided, and (iii) the Participant may revoke any
affirmative distribution election made at any time within the seven-day period which begins on
the date the written explanation is provided.
(e) No spousal consent obtained under this provision shall be valid unless the
Participant has received notice as required in Section 7.06.
7.06 Waiver of Joint and Survivor Annuity Benefit:
(a) At least 30 days, but no more than 180 days(cid:15)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)
commencement date, the Plan Administrator shall provide the Participant with a written
explanation of the terms and conditions of the Qualified Joint and Survivor Annuity benefit
provided under Section 7.04 and the Qualified Optional Survivor Annuity provided under
Section 7.05, the right of the Participant to make, and the effect of, an election to waive the
(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3) (cid:45)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:54)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3) (cid:36)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:3) (cid:82)(cid:73)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)
regarding the waiver (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:76)(cid:74)(cid:75)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:78)(cid:72)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:15)(cid:3)(cid:68)(cid:3)(cid:85)(cid:72)(cid:89)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
of a waiver election. The written explanation shall comply with the requirements of Regulation
§ 1.417(a)(3)-1. A waiver election may be made at any time prior to the Partici(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)
commencement date in accordance with Section 7.05.
(b) A Participant may revoke an election and thereafter make a new election by
giving written notice of such revocation to the Plan Administrator at any time and any number of
times prior to his benefit commencement date.
(cid:11)(cid:70)(cid:12)(cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:26)(cid:17)(cid:19)(cid:25)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:179)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:71)(cid:68)(cid:87)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:71)(cid:68)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:83)(cid:68)(cid:92)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:85)(cid:3)
in any other form.
7.07 Qualified Pre-Retirement Survivor Annuity:
(a) Unless otherwise elected, as provided in this Section 7.07, a Participant who
has an account which is subject to Section 7.04 and who dies while employed by the Employer
or after termination of employment but prior to attainment of his Normal Retirement Date or
Early Retirement Date, if the Plan provides for early retirement, shall have his benefits from such
account paid in the form of a Qualified Pre-Retirement Survivor Annuity. The surviving spouse
may elect to have payment of benefits under such annuity commence within a reasonable period
(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:17)
(b) The Pre-Retirement Survivor Annuity shall be a lifetime income payable to
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)an 50% of the
balance of that account as of the date of death.
(c) An election to waive the Pre-Retirement Survivor Annuity made by the
Participant must be made within the applicable election period, in writing, and the spouse must
consent in the same manner as required in Section 7.05.
(i) The applicable election period during which a Participant may waive
the Pre-Retirement Survivor Annuity shall begin on the first day of the Plan Year during which
the Participant attains age 35 and shall end on the date (cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:71)(cid:68)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:75)(cid:72)(cid:3)(cid:68)(cid:87)(cid:87)(cid:68)(cid:76)(cid:81)(cid:86)(cid:3)
age 35, the election period shall begin on the date of termination of employment.
A Participant who will not yet attain age 35 as of the end of any current
Plan Year may make a special qualified election to waive the Qualified Pre-Retirement Survivor
Annuity for the period beginning on the date of such election and ending on the first day of the
Plan Year in which the Participant will attain age 35. Such election shall not be valid unless the
Participant receives a written explanation of the Qualified Pre-Retirement Survivor Annuity in
such terms as are comparable to the explanation required in Section 7.06(a). Qualified Pre-
Retirement Survivor Annuity coverage will be reinstated automatically as of the date on which
the Participant attains age 35. Any new waiver on or after such date shall be subject to the full
requirements of this Section 7.07.
(ii) Within the applicable period, the Plan Administrator shall provide
each Participant with a written explanation of the Pre-Retirement Survivor Annuity in such terms
and in such manner as would be comparable to the explanation provided under Section 7.06,
with regard to the Qualified Joint and Survivor Annuity. The applicable period for a Participant
is whichever of the following periods ends last:
(A) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
Participant;
(B) a reasonable period ending after the individual becomes a
Annuity rules become applicable to the Participant, or
(C) a reasonable period ending after the Joint and Survivor
Survivor Annuity no longer satisfies the requirements for a fully subsidized benefit.
(D) a reasonable period after a fully subsidized Pre-Retirement
For purposes of this Section 7.07(c)(ii), a reasonable period ending after the
enumerated events described in (B), (C), and (D) above is the period beginning one year before,
and ending one year after, the applicable event; provided, however, that in the event a Participant
separates from service before the Plan Year in which he attains age 35, the Plan Administrator
shall provide the written explanation within the two -year period beginning one year before, and
ending one year after the separation from service. In the event such Participant thereafter returns to
employment with the Employer, the applicable period for such Participant shall be redetermined.
(iii) A Participant may revoke an election (and thereafter make a new
election) to waive the Pre-Retirement Survivor Annuity under Subparagraph (c) above by giving
written notice of such revocation to the Plan Administrator at any time and any number of times
(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:17)
(d) Unless prohibited by law, and except as required under the method of payment
elected by the Participant, a surviving spouse who is to receive benefits under this Section 7.07
may elect to receive the present value of the Qualified Pre-Retirement Survivor Annuity in a
lump sum.
7.08 Direct Rollover of Eligible Rollover Distribution:
(a) Notwithstanding any provision of the Plan to the contrary that otherwise
(cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:26)(cid:17)(cid:19)(cid:27)(cid:15)(cid:3)(cid:68)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)
and in the manner prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) For purposes of applying this Section 7.08:
(cid:11)(cid:76)(cid:12)(cid:3) (cid:36)(cid:81)(cid:3) (cid:179)(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:85)(cid:82)(cid:79)(cid:79)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3) (cid:76)(cid:86)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3)
portion of the balance to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint (cid:79)(cid:76)(cid:73)(cid:72)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:76)(cid:72)(cid:86)(cid:12)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)
beneficiary or for a specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; any hardship distribution, as defined
in Code Section 401(k)(2)(B)(i)(IV), and any other distribution that is reasonably expected to
total less than $200 during a year. For purposes of the $200 rule, a distribution from a Roth
Elective Deferral Contribution Account and a distribution from one or more other accounts in the
Plan shall be treated as if made from separate plans.
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3) (cid:36)(cid:81)(cid:3) (cid:179)(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3) (cid:76)(cid:86)(cid:3) (cid:68)(cid:81)(cid:3) (cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)
described in Code Section 408(a), a Roth individual retirement account described in Code
Section 408A, an individual retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a) of the Code, an annuity contract described in Code
Section 403(b), or a qualified trust described in Section 401(a) of the Code, that accepts the
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:85)(cid:82)(cid:79)(cid:79)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3) (cid:44)(cid:81)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:179)(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:3)
eligible plan under Code Section 457(b) which is maintained by a state, a political subdivision of
a state, or any agency or instrumentality of a state or political subdivision of a state and which
agrees to account for separately amounts transferred into such plan from this Plan. With respect
to any portion of an eligible rollover distribution that consists of after-tax employee contributions
that are not includible in gross income, an eligible retirement plan is limited to an individual
retirement account described in Code Section 408(a) or 408A, an individual retirement annuity
described in Code Section 408(b), or a qualified plan described in Code Section 401(a) or
annuity plan described in Code Section 403(b) that agrees to maintain separate accounting for
amounts transferred (and earnings thereon), as between the portion which is includible in gross
income and the portion which is not so includible.
(cid:11)(cid:76)(cid:76)(cid:76)(cid:12)(cid:3) (cid:36)(cid:3) (cid:179)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:180)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3) (cid:82)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:17)(cid:3) (cid:3) (cid:44)(cid:81)(cid:3)
(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)
(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3) (cid:82)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3) (cid:90)(cid:75)(cid:82)(cid:3) (cid:76)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:79)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:72)(cid:3) (cid:83)(cid:68)(cid:92)(cid:72)(cid:72)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:68)(cid:3) (cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)ed domestic
relations order, as defined in Code Section 414(p), and are distributees with regard to the interest
of the spouse or former spouse. Further, as to distributions after December 31, 2006,
(cid:179)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:72)(cid:180)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)esignated beneficiary, as defined in Code
Section 401(a)(9)(E), of the employee or former employee, provided, however, that with respect
to such a non-spouse designated beneficiary, an eligible retirement plan, as defined above is
limited to an individual retirement account described in Code Section 408(a) or 408A established
for such purpose.
(cid:11)(cid:76)(cid:89)(cid:12)(cid:3)(cid:36)(cid:3)(cid:179)(cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:3)(cid:85)(cid:82)(cid:79)(cid:79)(cid:82)(cid:89)(cid:72)(cid:85)(cid:180)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
plan specified by the distributee.
ARTICLE VIII - ADMINISTRATION OF THE PLAN
8.01 Plan Administrator: (cid:55)(cid:75)(cid:72)(cid:3) (cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:180)(cid:12)(cid:3)
shall be the Plan Administrator and shall have all powers to administer the Plan within its
absolute discretion, other than the power to invest or reinvest the assets of the Plan, which power
shall be delegated to the Investment Manager as provided herein, and such other powers as have
been delegated expressly to the Trustee. This shall include, but not be limited to, the powers to
construe and interpret the Plan documents and to administer the Plan in accordance with its
terms; to adopt such rules, regulations and administrative procedures as deemed necessary or
desirable in connection with the administration of the Plan; to make all determinations with
regard to eligibility for participation and entitlement to benefits and to have full and final
authority as to such determinations; to make any adjustments deemed necessary to correct
arithmetical or accounting errors; to determine the amount, form and/or timing of distributions
from the Plan; to approve, restrict and/or enforce Participant loans, if loans are permitted under
the terms of the Plan; to make factual determinations relating to allocations of contributions and
distribution of benefits; to correct any defect, supply any omission or reconcile any inconsistency
in such manner and to such extent as deemed necessary or appropriate to carry out the terms of
the Plan, and to appoint such counsel, accountants, specialists and other persons, as well as
agent, designees or delegates, as deemed necessary or desirable in connection with the operation
and administration of the Plan. The Committee, from time to time, may establish rules for the
administration of the Plan.
The Committee shall endeavor to act by general rules so as not to discriminate in favor of
any person. Its decisions and records shall be conclusive and binding upon the Employer,
Participants, and all other persons having an interest under the Plan. No member of the
Committee shall be disqualified from exercising the powers and discretion herein conferred by
reason of the fact that the exercise of any such power or discretion may affect the payment of
benefits to such member under the Plan; however, no member may vote on a matter relating
exclusively to such member. To the extent administratively feasible, the period of notice
(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:88)(cid:86)(cid:83)(cid:72)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:82)(cid:85)(cid:3)
to make or change investment elections for either future contributions or existing accounts may
be relaxed, reduced or eliminated by the Committee in accordance with uniform and
nondiscriminatory rules.
8.02 Committee Actions: The Committee may appoint such agents, who need not be
members of the Committee, as it deems necessary for the effective performance of its duties and
may delegate to such agents such powers and duties as the Committee deems expedient or
appropriate. Any action of the Committee shall be evidenced by the signature of a member who
has been so authorized by the Committee, and the Trustee shall be fully protected in acting in
reliance thereon. A certificate of the secretary or an assistant secretary of the Committee setting
forth the names of the members shall be sufficient evidence at all times of the composition of the
Committee.
The Committee may hold meetings upon such notice, at such time and place, and in such
manner as the Committee may determine. The Committee shall act by a majority of its
members, which also shall constitute a quorum for the transaction of business. Action may be
taken by a vote at a meeting or by written consent without a meeting. The Committee shall keep,
or cause to be kept, all records and other data as may be necessary or advisable for the
administration of the Plan.
8.03 Personal Liability: To the extent not contrary to the provisions of ERISA, no
member of the Committee, officer, supervisor or employee of an Employer shall be personally
(cid:79)(cid:76)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:71)(cid:82)(cid:81)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:3)(cid:73)(cid:68)(cid:76)(cid:87)(cid:75)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:88)(cid:81)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:82)(cid:90)(cid:81)(cid:3)(cid:81)(cid:72)(cid:74)(cid:79)(cid:76)(cid:74)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)
or willful misconduct. Each such member of the Committee, officer and supervisor shall be
indemnified by the Employer against expenses reasonably incurred by such member in
(cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:87)(cid:82)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:75)(cid:72)(cid:3) (cid:80)(cid:68)(cid:92)(cid:3) (cid:69)(cid:72)(cid:3) (cid:68)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:92)(cid:3) (cid:69)(cid:92)(cid:3) (cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)
responsibilities hereunder, except in relation to matters as to which such member shall be
adjudged in such action to be liable for negligence or misconduct in the performance of such
(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:71)(cid:88)(cid:87)(cid:92)(cid:17)(cid:3)(cid:3)(cid:43)(cid:82)(cid:90)(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3)(cid:81)(cid:82)(cid:87)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:72)(cid:80)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:83)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)s a
fiduciary under the Plan for purposes of ERISA from any responsibility or liability which such
Act shall impose upon such member.
8.04 Investment Manager: Subject to the terms of the Trust Agreement, the Employer
may appoint one or more individuals and/or entities to serve as Investment Managers, to whom
the Committee may delegate the authority to direct the investment and reinvestment of part or all
of the Plan assets. The Trustee may be designated as Investment Manager. The Employer shall
have to sole authority to appoint, remove and/or replace any Investment Manager. Each
Investment Manager shall acknowledge in writing that the Investment Manager is a fiduciary
with respect to the Plan. Each Investment Manager shall be (a) registered as an investment
adviser under the Investment Advisers Act of 1940, (b) a bank, as defined in such Act, or (c) an
insurance company qualified to manage, assign and dispose of qualified plan assets.
ARTICLE IX - CLAIMS
9.01 Claims: Participants and Beneficiaries shall direct all benefit claims to the
Committee as Plan Administrator. Such claims may be made either orally or in writing. The
Committee shall allow or deny the claim within 60 days after it is made. If the claim is denied,
the Committee, after consulting legal counsel, shall notify the claimant of the denial in writing
within the above sixty-day period. The notice of denial shall give the specific reason or reasons
for denial, shall refer to the Plan provisions upon which the denial is based, shall describe any
information or material with which the claimant could perfect his claim and explain why such
material is necessary, and shall describe the claims review procedure.
9.02 Review of Claim: The Participant or Beneficiary may demand a review of his claim
(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:28)(cid:19)(cid:3)(cid:71)(cid:68)(cid:92)(cid:86)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:81)(cid:76)(cid:68)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:75)(cid:76)(cid:86)(cid:3)(cid:70)(cid:79)(cid:68)(cid:76)(cid:80)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:15)(cid:3)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:79)(cid:68)(cid:76)(cid:80)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:87)(cid:72)(cid:81)(cid:3)
request, by the Trustee, legal counsel and the Committee. The claimant shall have access to all
pertinent documents and shall be entitled to submit oral and written arguments to the reviewing
group. Decisions on review shall be made within 30 days after the request for review. If the
claim is denied after review, the decision shall be in writing and shall contain the same
information as the notice of denial.
ARTICLE X - TOP HEAVY PROVISIONS
10.01 Definitions: For purposes of applying the provisions of this Article X:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:179)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:68)(cid:80)(cid:72)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
415(c)(3) and as set forth in Appendix I, but shall include amounts contributed, if any, by the
Employer pursuant to a salary reduction agreement which are excludable from income under
Code Section 125, 402(a)(8), 402(h), 403(b) and/or for Plan Years beginning after December 31,
2000, 132(f)(4).
(cid:11)(cid:69)(cid:12)(cid:3) (cid:179)(cid:39)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:39)(cid:68)(cid:87)(cid:72)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:15)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:79)(cid:68)(cid:86)(cid:87)(cid:3) (cid:71)(cid:68)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
preceding Plan Year or, in the case of the first Plan Year, the last day of such Plan Year.
(cid:11)(cid:70)(cid:12)(cid:3) (cid:179)(cid:46)(cid:72)(cid:92)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3) (cid:82)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3) (cid:11)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
any deceased Employee) who, at any time during the Plan Year containing the Determination
Date was an officer of the Employer having annual Compensation greater than $130,000 (as
adjusted under Code Section 416(i)(1)), a Five Percent Owner of the Employer, or a one percent
owner of the Employer having annual compensation greater than $150,000. In addition and
(cid:81)(cid:82)(cid:87)(cid:90)(cid:76)(cid:87)(cid:75)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:72)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:85)(cid:92)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)(cid:179)(cid:46)(cid:72)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:15)(cid:3)
at all times, in accordance with Code Section 416(i)(1), the applicable regulations and other
guidance of general applicability issued thereunder.
(cid:11)(cid:71)(cid:12)(cid:3)(cid:179)(cid:49)(cid:82)(cid:81)-(cid:46)(cid:72)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:68)(cid:3)(cid:46)(cid:72)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:17)
(cid:11)(cid:72)(cid:12)(cid:3)(cid:179)(cid:51)(cid:72)(cid:85)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)
plus any other qualified plan maintained by the Employer, provided that such group, when taken
as a whole, would satisfy the requirements of Code Sections 401(a)(4) and 410.
(cid:11)(cid:73)(cid:12)(cid:3)(cid:179)(cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:42)(cid:85)(cid:82)(cid:88)(cid:83)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:15)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Employer in which a Key Employee is a Participant, and any other qualified plan of the
Employer which enables any plan in which a Key Employee participates to meet the
requirements of Code Section 401(a)(4) or 410, including any qualified plan which may have
been terminated during Plan Year containing the determination date or any of the four preceding
Plan Years.
(cid:11)(cid:74)(cid:12)(cid:3)(cid:179)(cid:55)(cid:82)(cid:83)(cid:3)(cid:43)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:82)(cid:83)(cid:3) (cid:75)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)
exceeds 60%. However, in no event shall a plan which consists solely of a cash or deferred
arrangement which meets the requirements of Code Section 401(k)(12) and matching
contributions, with respect to which the requirements of Code Section 401(m)(11) of the Code
are met, be a Top Heavy Plan. If, but for the preceding sentence, the Plan would be treated as a
Top Heavy Plan because it is a member of a Required or Permissive Aggregation Group which is
top heavy, contributions under the Plan may be taken into account in determining whether any
other plan in such group meets the minimum allocation requirements of Code Section 416(c)(2).
(cid:11)(cid:75)(cid:12)(cid:3) (cid:179)(cid:55)(cid:82)(cid:83)(cid:3) (cid:43)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:76)(cid:86)(cid:3)
determined, under Section 10.02, to be a Top Heavy Plan.
(cid:11)(cid:76)(cid:12)(cid:3)(cid:179)(cid:55)(cid:82)(cid:83)(cid:3)(cid:43)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3)(cid:53)(cid:68)(cid:87)(cid:76)(cid:82)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:29)
(A) If the Employer maintains one or more defined contribution plans,
including any Simplified Employee Pension Plan, and the Employer has not maintained any
defined benefit plan which, during the five-year period ending on the Determination Date has or
has had accrued benefits, the Top Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the Determination Date, and the denominator
of which is the sum of all account balances. Both the numerator and the denominator shall
include any part of the account balance distributed during the one-year period ending on the
Determination Date. The preceding sentence also shall apply to distributions under any
terminated plan which, had it not been terminated, would have been aggregated with the Plan
under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than
severance from employment, death, or disability, this provision shall be applied by substituting
(cid:179)(cid:73)(cid:76)(cid:89)(cid:72)-(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:180)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:179)(cid:82)(cid:81)(cid:72)-(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:17)(cid:180)(cid:3)(cid:3) (cid:44)(cid:81)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:88)(cid:80)(cid:72)(cid:85)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:71)(cid:72)(cid:81)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)
increased to reflect any contribution which is required to be taken into account on that date under
Code Section 416 and the regulations thereunder, although not actually paid as of the
Determination Date.
(B) If the Employer maintains one or more defined contribution plans,
including any Simplified Employee Pension Plan, and the Employer maintains or has maintained
one or more defined benefit plans which, during the five-year period ending on the
Determination Date has or has had any accrued benefits, the Top Heavy Ratio for any Required
or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the
sum account balances under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with the provisions of subparagraph (A) above, and the
present value of accrued benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date, and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all Participants, determined
in accordance with the provisions of Subparagraph (A) above, and the present value of accrued
benefits under the defined benefit plan or plans for all Participants as of Determination Date, all
determined in accordance with Code Section 416 and the regulations issued thereunder. The
accrued benefits under a defined benefit plan in both the numerator and the denominator of the
Top Heavy Ratio shall be increased for any distribution of an accrued benefit made during the
one-year period ending on the Determination Date. The preceding sentence also shall apply to
distributions under any terminated plan, which had it not be terminated, would have been
aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made
for a reason other than severance from employment, death or disability, this provision shall be
(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:179)(cid:73)(cid:76)(cid:89)(cid:72)-(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:180)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:179)(cid:82)(cid:81)(cid:72)-(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:17)(cid:180)(cid:3)(cid:3)
(C) For purposes of Subparagraphs (A) and (B) above,
(I) The value of account balances and the present value of accrued
benefits will be determined as of the most recent valuation date which falls within, or ends with,
the twelve-month period ending on the Determination Date, except as provided in Code Section
416 and the regulations thereunder for the first and second plan years of a defined benefit plan.
The account balances and accrued benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year, or who has not been credited with at least one Hour of
Service with any Employer maintaining the Plan at any time during the one-year period ending
on the Determination Date will be disregarded.
(II) The calculation of the Top Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into account will be made in accordance
with Code Section 416 and the regulations issued thereunder. No deductible employee
contributions will be taken into account for purposes of computing the Top Heavy Ratio.
(III) When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination Dates that fall within the
same calendar year.
(IV) The accrued benefit of a Participant other than a Key
Employee shall be determined under the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or, if there is no such
method, as if such benefit accrued not more rapidly then the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C). The present value of accrued benefits will be
determined under the interest and mortality rates specified in the defined benefit plan.
10.02 Determination of Top Heavy Status:
(a) An evaluation shall be made, as of each Determination Date, in accordance
with the terms of this Section 10.02, to determine whether the Plan is a Top Heavy Plan.
(b) If an individual is a Non-Key Employee with respect to the Plan Year, but
such individual was a Key Employee with respect to the Plan for any prior Plan Year, the
aggregate account of that individual (or, in the case of a defined benefit pension plan, the present
value of his accrued benefit) shall not be taken into account in determining whether the Plan is a
Top Heavy Plan.
(c) If an individual has not performed any service for the Employer at any time
during the one-year period ending on the Determination Date, the aggregate account of that
individual (or, in the case of a defined benefit pension plan, the present value of his accrued
benefit) shall not be taken into account in determining whether the Plan is a Top Heavy Plan.
(d) The determination of whether the Plan is a Top Heavy Plan shall be made
after aggregating the Plan with all plans in the Required Aggregation Group and any Permissive
Aggregation Group. The Plan shall not be a Top Heavy Plan for any Plan Year in which the Plan
is part of a Required or Permissive Aggregation Group which is not top heavy.
(cid:11)(cid:72)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:11)(cid:82)(cid:85)(cid:3)(cid:68)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:12)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)
determined with reference to such distributions, contributions, rollovers and transfers as required
by Code Section 416 and regulations issued under that Code Section and as valued as of the
Determination Date.
10.03 Minimum Allocations:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:55)(cid:82)(cid:83)(cid:3) (cid:43)(cid:72)(cid:68)(cid:89)(cid:92)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)
contributions shall be determined in accordance with Section 4.01, provided that such
determination results in an allocation to each Eligible Participant who is a Non-Key Employee
which is not less than the Minimum Allocation required in accordance with this Section 10.03(a).
The Minimum Allocation required in a Top Heavy Plan Year for each Eligible Participant who is
a Non-(cid:46)(cid:72)(cid:92)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:22)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)
lesser percentage of his Compensation as equals the largest percentage of Compensation
allocated for that Plan Year to any Participant who is a Key Employee. Employer matching
contributions, if any, shall be taken into account for purposes of the Minimum Allocation.
(cid:11)(cid:69)(cid:12)(cid:3) (cid:44)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)er
contributions in accordance with Section 4.01 fails to satisfy the Minimum Allocation for each
Eligible Participant who is a Non-Key Employee, as provided in Section 10.03(a), then the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:68)s follows, provided,
(cid:75)(cid:82)(cid:90)(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:76)(cid:73)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:17)(cid:19)(cid:20)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:83)(cid:72)(cid:85)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3) (cid:71)(cid:76)(cid:86)(cid:83)(cid:68)(cid:85)(cid:76)(cid:87)(cid:92)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3)
Employer contribution shall be determined in accordance with Section 10.03(c).
(i) First, the Employer contributions, or a portion thereof, shall be
allocated among the accounts of all those Participants eligible, under Section 4.01 or 10.03(d), to
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)
bears to the total Compensation of all such Participants for that Plan Year; provided, however,
that the portion of the Employer contributions allocated under this subparagraph shall not exceed
3% of the Compensation of all such Participants for the Plan Year.
shall be allocated in accordance with the provisions of Section 4.01.
(ii) Second, any part of the Employer contributions which is not allocated
(cid:11)(cid:70)(cid:12)(cid:3) (cid:44)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)
contributions in accordance with Section 4.01 provides for permitted disparity and fails to
satisfy the Minimum Allocation for each Eligible Participant who is a Non-Key Employee, as
(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:19)(cid:17)(cid:19)(cid:22)(cid:11)(cid:68)(cid:12)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3)
determined as follows:
(i) First, the Employer contributions, or a portion thereof, shall be
allocated among the accounts of all those Participants eligible, under Section 4.01 or 10.03(d), to
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:36)(cid:74)(cid:74)(cid:85)(cid:72)(cid:74)(cid:68)(cid:87)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Plan Year bears to the total Aggregate Compensation of all such Participants for that Plan Year;
provided, however, that the portion of the Employer contributions allocated under this
subparagraph shall not exceed 3% of the Compensation of all such Participants for the Plan Year.
(ii) Second, any part of the Employer contributions which is not allocated
shall be allocated in accordance with the provisions of Section 4.01; provided, however, that for
purposes of Section 4.01(a)(i), the Excess Contribution Percentage shall be reduced by 3%.
(d) Alternatively, and notwithstanding the provisions of subparagraphs (b) and (c)
(cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3)
accordance with Section 4.01 fails to satisfy the Minimum Allocation for any Eligible Participant
who is a Non-Key Employee, as provided in Section 10.03(a), the Employer, at its sole option,
may elect for any Plan Year to contribute to the account of each such Non-Key Employee the
additional amount necessary to provide the required Minimum Allocation.
(cid:11)(cid:72)(cid:12)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:20)(cid:19)(cid:17)(cid:19)(cid:22)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:87)(cid:72)(cid:85)(cid:80)(cid:3)(cid:179)(cid:40)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)
a Participant who is employed by the Employer on the last day of the Plan Year, regardless of the
number of Hours of Service with which he is credited in that year and regardless of the amount
of his compensation for that year.
(f) Notwithstanding anything herein to the contrary, in the event the Employer
maintains another qualified defined contribution plan in which a Non-Key Employee
participates, to the extent that, for any Plan Year, a minimum contribution is being allocated for
that Non-Key Employee under such other plan, the Minimum Allocation requirements of Section
10.03(a), as to that Non-Key Employee, shall be reduced or disregarded, provided that the Plan is
amended to identify the other plan and the minimum contribution allocated under such other
plan. In the event the Employer maintains a qualified defined benefit pension plan in which a
Non-Key Employee participates, then with respect to such Non-Key Employee, the top heavy
minimum benefit shall be satisfied by the defined benefit plan.
ARTICLE XI - AMENDMENT AND TERMINATION
11.01 General: The Employer expects to continue the Plan indefinitely, but is not
contractually bound to do so. In order to protect both Employees and the Employer against
unforeseen contingencies, the Employer reserves the right to amend the Plan at any time, except
as restricted by law, as well as the right to terminate the Plan or to discontinue contributions at
any time without the consent of any other party.
11.02 Amendment: All amendments to the Plan or Trust, including Appendices provided
for herein, shall be in writing and, except for those items which, under the terms of the Plan may be
adopted by the Trustee alone, shall be approved by the Committee. No amendment which affects
the rights, duties or responsibilities of the Trustee shall be effective as to the Trustee, if the Trustee,
within 30 days after receipt of notice of the amendment, shall notify the Employer that it does not
intend to be bound by such change and shall tender its written resignation as Trustee.
No amendment shall be effective, as to any Employee who is a Participant on the
later of the date such amendment is adopted or the date on which it becomes effective, to reduce
his Vested Portion, as determined under Section 5.04 or 10.04, whichever is applicable. In the
event said vesting provisions shall be amended, each Participant who has completed at least three
Years of Service prior to the expiration of the election period described herein may elect to have
his Vested Portion computed without regard to the amendment; provided, however, that as to any
Participant who is not credited with at least one Hour of Service after December 31, 1988, the
election permitted herein shall be available to such Participant only if he has completed at least
five Years of Service. Such election must be filed with the Employer within sixty days of the
latest of (a) the adoption by the Employer of the amendment, (b) the effective date of such
amendment, and (c) the receipt by the Participant of written notice of the amendment from the
Employer. No amendment shall be effective to the extent that it has the effect of decreasing a
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) balance or of eliminating any protected optional form of benefit with
respect to benefits attributable to service before the amendment.
11.03 Termination: Upon complete or partial termination of the Plan or complete
discontinuance of contributions, each affected Participant shall be fully vested in the entire
balance of his account.
11.04 Failure to Qualify: In the event that the Internal Revenue Service shall make an
initial determination that the Plan is not qualified under the Internal Revenue Code, any
contributions made by the Employer may be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application for the determination of
qualification is made by the date prescribed by law for the filing (cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:87)(cid:68)(cid:91)(cid:3)(cid:85)(cid:72)(cid:87)(cid:88)(cid:85)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
the taxable year in which the Plan is adopted, or such later date as of the Secretary of the
Treasury may prescribe.
11.05 Bankruptcy of Employer: In the event that the Employer and each other employer
adopting this Plan shall have been judicially declared to be bankrupt or insolvent without
provision being made for the continuation of the Plan, the Plan shall terminate, and distribution
of accounts shall be made to affected Participants after a final valuation of the Trust Fund.
ARTICLE XII - (cid:51)(cid:36)(cid:53)(cid:55)(cid:44)(cid:38)(cid:44)(cid:51)(cid:36)(cid:49)(cid:55)(cid:54)(cid:182)(cid:3)(cid:53)(cid:44)(cid:42)(cid:43)(cid:55)(cid:54)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:48)(cid:44)(cid:54)(cid:38)(cid:40)(cid:47)(cid:47)(cid:36)(cid:49)(cid:40)(cid:50)(cid:56)(cid:54)(cid:3)(cid:51)(cid:53)(cid:50)(cid:57)(cid:44)(cid:54)(cid:44)(cid:50)(cid:49)(cid:54)
12.01 Merger and Consolidation: In the event of a merger or consolidation of the Plan
with any other plan or the transfer of the assets or liabilities of the Plan to any other plan, each
Participant shall be entitled to receive a benefit, if the Plan then terminated, which is at least
equal to the benefit to which he would have been entitled if the Plan had terminated immediately
prior to such merger, consolidation or transfer. The Trustee, at its discretion, may hold and
maintain, for the benefit of any Participant, assets including but not limited to Plan loans,
policies of insurance and annuity contracts, which are or have been transferred to the Plan by
way of Plan merger, even if such assets otherwise would not be permissible under the terms of
the Plan.
12.02 Employment Rights: The Plan shall neither confer upon any Participant or other
Employee any right of employment, nor interfere with the right of the Employer to discharge any
Participant or other Employee.
12.03 Spendthrift:
(a) Except as provided by law for loans from the Plan to a Participant or
otherwise, and except as provided in subparagraphs (b) and (c) below, no benefit under the Plan
shall be liable for, or subject to, the contracts, debts, liabilities or torts now or hereafter made,
contracted, incurred or committed by any Participant, former Participant, or Beneficiary thereof;
nor shall such benefit be subject to attachment, garnishment or legal or equitable process.
Except as provided by law, no assignment, alienation, pledge or encumbrance of any benefit
made by a Participant, former Participant or Beneficiary thereof shall be valid, and such benefit
shall be paid by the Trustee directly to, or for the benefit of, the person(s) entitled thereto,
without regard to any assignment, order, attachment or claim whatsoever.
(b) Subparagraph (a) of this Section 12.03 shall apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a Participant pursuant to a
Domestic Relations Order, as defined in Article XV hereof, but shall not apply, if, in accordance
with the provisions of that Article, such Order is determined to be a Qualified Domestic
Relations Order.
(c) Subparagraph (a) of this Section 12.03 shall not apply to any offset of a
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:68)(cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:87)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:82)(cid:85)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)
or required to pay to the Plan, provided that the following requirements are satisfied:
(i) The order or requirement to pay arises (A) under a judgment of
conviction for a crime involving the Plan, (B) under a civil judgment (including any consent
order or decree) entered by a court in an action brought in connection with a violation or alleged
violation of Part 4 of Subtitle B of Title I of the Employee Retirement Income Security Act of
1974, or (C) pursuant to a settlement agreement between the Secretary of Labor and the
Participant or between the Pension Benefit Guaranty Corporation and the Participant, in
connection with a violation or alleged violation of Part 4 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974 by a fiduciary or any other person;
(ii) The judgment, order, decree or settlement agreement is entered into on
or after August 5, 1997, and expressly provides for the offset of all or part of the amount which
(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:82)(cid:85)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:68)(cid:74)(cid:68)(cid:76)(cid:81)(cid:86)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
Plan;
(iii) If the survivor annuity requirements of Code Section 401(a)(11) apply
with respect to the distributions from the Plan to the Participant, and if the Participant has a
spouse at the time at which the offset is to be made, (A) either such spouse has consented in
writing to such offset and such consent is witnessed by a notary public or representative of the
Plan (or it is established to the satisfaction of a Plan representative that such consent may not be
obtained because there is no spouse or because the spouse cannot be located, or an election to
waive the right of the spouse to either a qualified joint and survivor annuity or a qualified
preretirement survivor annuity is in effect in accordance with the requirements of Code Section
417(a); (B) such spouse is ordered or required, pursuant to such judgment, order, decree or
settlement, to pay an amount to the Plan in connection with a violation of Part 4 of Subtitle B of
Title I of the Employee Retirement Income Security Act of 1974, or (C) pursuant to such
judgment, order, decree or settlement, such spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity provided pursuant to Code Section
401(a)(11)(A)(i) and under a qualified preretirement survivor annuity provided pursuant to Code
Section 401(a)(11)(A)(ii), determined in accordance with subparagraph (iv) below, and
(iv) The survivor annuity described in subparagraph (c)(iii)(C) above shall
be determined as if the Participant terminated employment on the date of the offset, there was no
offset, the Plan permitted commencement of benefits only on or after attainment of normal
retirement age, the Plan provided only the minimum required qualified joint and survivor
annuity, and the amount of the qualified preretirement survivor annuity under the Plan is equal to
the amount of the survivor annuity payable under the minimum required qualified joint and
(cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3) (cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:17)(cid:3) (cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:86)(cid:88)(cid:69)(cid:83)(cid:68)(cid:85)(cid:68)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:3) (cid:11)(cid:70)(cid:12)(cid:11)(cid:76)(cid:89)(cid:12)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:3) (cid:179)(cid:80)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)
(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:88)(cid:85)(cid:89)(cid:76)(cid:89)(cid:82)(cid:85)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:88)(cid:85)(cid:89)ivor annuity which is
(cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3) (cid:72)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:85)(cid:88)(cid:72)(cid:71)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:11)(cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
411(a)(7)) and under which the survivor annuity is fifty percent of the amount of the annuity
which is payable during the joint lives of the Participant and the spouse.
12.04 Impact of Qualified Military Service: For purposes of entitlement to death benefits
in accordance with Section 5.03, a Participant who dies while performing Qualified Military
Service shall be treated as having resumed employment with the Employer on the day preceding
(cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:81)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:71)(cid:72)(cid:68)(cid:87)(cid:75)(cid:17)(cid:3) (cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3)
Disability Benefits in accordance with Section 5.02, a Participant who sustains a Total and
Permanent Disability while performing Qualified Military Service shall be treated as if such
Participant had resumed employment immediately preceding the date on which such Total and
Permanent Disability is deemed to have occurred and then ceased employment as a result of such
Total and Permanent Disability. Effective for Plan Years beginning on or after January 1, 2009,
any Differential Wage Payment made by the Employer to a Participant performing Qualified
Military Service shall be treated as Compensation solely for purposes of applying the limitations
(cid:82)(cid:73)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:20)(cid:24)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:36)(cid:83)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:91)(cid:3) (cid:44)(cid:17)(cid:3) (cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:15)(cid:3) (cid:179)(cid:39)(cid:76)(cid:73)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3) (cid:58)(cid:68)(cid:74)(cid:72)(cid:3)
(cid:51)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:76)(cid:81)(cid:74)(cid:3)(cid:88)(cid:81)(cid:76)(cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:71)(cid:3)
service while on active duty of more than 30 days and which represents all or a portion of the
wages the individual would have received if he were performing services for the Employer.
12.05 Notice by Electronic Media: Unless otherwise restricted or prohibited by law, to
the extent the Employer or Plan Administrator is required to provide written notice to any
Employee, Participant, Beneficiary or Alternate Payee as the recipient, such notice may be
provided by way of electronic media reasonably accessible to the recipient, provided that (a) the
system under which the electronic notice is provided is reasonably designed to provide the notice
in a manner which is no less understandable than a written paper document, (b) the recipient is
advised, at the time the notice is provided, that he may request and receive the notice in written
paper form at no charge, and (c) the notice, in written paper form, is provided at no charge upon
request of the recipient.
12.06 Miscellaneous Receipts: Any amounts received by the Trustee which are not
attributable to a specific account or investment, including, but not limited to, recovery of
amounts previously written off as uncollectible, group insurance experience refunds, recoveries
through correction of trade, clerical or administrative errors, claims settlements and recoveries,
payments received as a result of demutualization of insurance companies, and recoveries from
service providers or their insurers, shall be held in the suspense account and shall be allocated, as
(cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:81)(cid:72)(cid:91)(cid:87)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:86)(cid:182)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)nts in accordance with the provisions of
Section 4.03.
12.07 Payment of Administrative Expenses: Except as otherwise determined by the
Committee, all reasonable and proper expenses incurred in the administration of the Plan,
including expenses incurred by the Committee, the Employer, an Investment Manager and/or the
Trustee, shall be paid from the Trust and may be charged to individual accounts on a pro rata or
per capita basis. Expenses shall include fees and expenses of the Trustee and Investment
Manager, as well as expenses incident to the administration of the Plan, including, but not
limited to, fees of accountants, actuaries, legal counsel, third party administrators, consultants
and other advisors or specialists.
Subject to any restrictions imposed by law, expenses unique to, or specifically related to,
a Participant, Beneficiary, putative Beneficiary, Alternate Payee or putative Alternative Payee
may be charged solely to the individual accountant or interest of that Participant, Beneficiary or
Alternate Payee, or, to the extent the Committee deems appropriate, may be charged and paid by
the Participant, Beneficiary or Alternate Payee outside of the Plan, provided that such expenses
are assessed in a uniform and nondiscriminatory manner.
12.08 Diversification Requirements: The provisions of this Section 12.08 apply only if
the Plan holds any publicly traded employer securities or is treated as holding publicly traded
securities as provided herein.
(cid:11)(cid:68)(cid:12)(cid:3) (cid:41)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:21)(cid:17)(cid:19)(cid:27)(cid:15)(cid:3) (cid:68)(cid:3) (cid:179)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:79)(cid:92)(cid:3) (cid:87)(cid:85)(cid:68)(cid:71)(cid:72)(cid:71)(cid:3) (cid:86)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:92)(cid:180)(cid:3) (cid:76)(cid:86)(cid:3) (cid:68)(cid:3) (cid:86)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:92)(cid:3)
which is traded on a national securities exchange that is registered under Section 6 of the
Securities Exchange Act of 1935 or which is traded on a foreign national securities exchange that
is officially recognized, sanctioned, or supervised by a governmental authority and is deemed by
(cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:86)(cid:3) (cid:75)(cid:68)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:3) (cid:179)(cid:85)(cid:72)(cid:68)(cid:71)(cid:92)(cid:3) (cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:180)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:54)(cid:40)(cid:38)(cid:3) (cid:53)(cid:88)(cid:79)(cid:72)(cid:3) (cid:20)(cid:24)(cid:70)(cid:22)-1
(17 CFR 240.15c3).
(b) To the extent that the account of any Participant (which, for this purpose, shall
include an Alternate Payee, as defined in Section 15.01(c), who has an account under the Plan,
and the beneficiary of a deceased Participant) attributable to elective deferrals (as defined in
Code Section 402(g)(3)(A)), employee contributions or rollover contributions is invested in
publicly traded employer securities, such Participant must be offered the opportunity, no less
frequently than quarterly, to divest those employer securities and reinvest an equivalent amount
in other investment options described in Section 12.08(d).
(c) With respect to any Participant (which, for this purpose, shall include an
Alternate Payee, as defined in Section 15.01(c), who has an account under the Plan, and the
beneficiary of a deceased Participant) who has completed at least three years of vesting service,
(cid:76)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:68)(cid:87)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:81)(cid:82)(cid:81)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)
invested in publicly traded employer securities, such Participant must be offered the opportunity,
no less frequently than quarterly, to divest those employer securities and reinvest an equivalent
amount in other investment options described in Section 12.08(d).
(d) At least three investment options, other than employer securities, much be
offered to Participants, as provided in Sections 12.08(b) and (c) above. These investment options
must be diversified and have materially different risk and return characteristics. Except as
provided in Treasury Regulation § 1.401(a)(35)-1(e)(2) and (3), no restrictions (direct or
indirect) or conditions which are not imposed on other plan assets, will be imposed with respect
to publicly traded employer securities.
(e) For purposes of this Section 12.09, if the Employer or any member of a
controlled group of corporations (as described in Treasury Regulation § 1.401(a)(35)-
1(f)(2)(iv)(A)), which includes the Employer has issued a class of stock which is a publicly
traded employer security, and if the Plan holds employer securities which are not publicly traded
employer securities, the Plan shall be treated as holding publicly traded employer securities.
12.09 Restrictions on Annuities: Any annuity contract purchased and distributed from
the Plan shall be non-transferable and shall comply with the terms of the Plan.
12.10 Headings: The headings used in this Plan are for convenience only and shall not be
deemed to limit, construe or interpret any of the provisions of the Plan.
12.11 Construction: The provisions of this Plan and of the Trust Agreement adopted in
conjunction with this Plan shall be construed in accordance with federal laws governing qualified
retirement plans and, to the extent not preempted by federal law, by the laws of the state in which
the principal office of the Employer is located. If any provision of this Plan or the Trust
Agreement is determined to be invalid or illegal for any reason, such determination shall not
affect the remaining provisions of the Plan, and, in such event, the Plan or Trust Agreement, as
the case may be, shall be construed as if the invalid or illegal provision had not been included
therein.
ARTICLE XIII - TRANSFER OF ACCOUNTS TO AND FROM OTHER QUALIFIED PLANS
13.01 Transfers from Plan: In the event a Participant shall terminate his employment
with the Employer and shall obtain employment with a new employer, the Trustee may transfer
all (but not less than all) of the Vested Portion of the account of said Participant to any trust
meeting the requirements described in Section 13.03 below. In addition, in the event this Plan is
terminated, the Trustee may, if so authorized by the Employer, transfer the account of a
Participant to another plan of the Employer meeting such requirements. All accounts transferred
from this Plan to another plan shall be treated as having been transferred on the last day of the
Plan Year ending coincident with, or immediately prior to, the date of transfer.
13.02 Transfers to Plan: The Trustee may accept for the benefit of a Participant
hereunder any or all amounts rolled into it from any other qualified plan described in Code
Section 401(a) or 403(a), excluding after-tax employee contributions, any individual retirement
account or annuity described in Code Section 408(a) or 408(b) that is eligible to be rolled over
and otherwise would be includable in the gross income of the Participant, an annuity contract
described in Code Section 403(b), or an eligible plan under Code Section 457(f) which is
maintained by a state, a political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state, as well as any or all amounts transferred to it by the
trustee of any other qualified trust which meets the requirements of Section 13.03(a), subject to
the restrictions described in Section 13.04. All such amounts received by this Plan shall be
separately accounted for but shall be commingled with the general Trust Fund; provided,
however, that if any amounts are received by this Plan from any plan which provides for a life
annuity method of payment which is not available under the terms of this Plan, the Trustee either
shall continue to hold such amounts as segregated accounts or shall maintain separate records
with respect to such amounts such that they shall be readily identifiable at all times. Except as
otherwise restricted by law, any amounts rolled into this Plan by or for the benefit of any
Participant from any other plan, individual retirement account or annuity or annuity contract may
be withdrawn by that Participant at such time as that Participant shall direct (which shall be
deemed t(cid:82)(cid:3) (cid:69)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3) (cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:3) (cid:68)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:86)(cid:88)(cid:70)(cid:75)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3)
Section 5.05) and subject to the provisions of Article VII. In no event, however, must any
amount rolled into, or transferred to this Plan, in accordance with this Article XIII, or attributable
to such rollover or transfer be taken into consideration in determining the value of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)-out distribution provisions of Section 6.05.
13.03 Requirements of Trust: The requirements of trust referred to above are as follows:
(a) The recipient or transferring trust must be tax-exempt under Code Section 501
and part of a profit sharing or pension plan which is a qualified plan under Code Section 401(a),
and
(b) The trustee of the recipient trust must be willing and able to accept the said
amount pursuant to the terms of the recipient trust.
13.04 Restrictions on Transferred Accounts: All accounts transferred to or from this Plan
pursuant to this Article XIII shall continue to be subject to all of the provisions and limitations
specifically applicable to such accounts as if such accounts had remained in the transferring plan,
including, specifically, provisions for distribution of benefits in the form of a qualified joint and
survivor annuity or Qualified Pre-Retirement Survivor Annuity.
ARTICLE XIV - LOANS TO PLAN PARTICIPANTS
14.01 Availability of Loans: Subject to any restrictions imposed by law, loans shall be
made available to all Participants on a reasonably equivalent basis, without regard to the purpose
of any loan, and shall be made in accordance with any relevant administrative policies adopted
by the Committee. Reasonable administrative fees incurred in connection with the extension,
maintenance, enforcement and/or satisfaction of a participant loan may be assessed and, unless
paid directly by the Participant, may be deducted from the account of the Participant from which
the loan is to be taken. No Participant may have more than 2 loans outstanding at any time. Any
loan made to a Participant shall be treated as an asset of the individual account of that
Participant, and any interest paid on said loan shall be added to the individual account of that
Participant.
14.02 Terms and Conditions of Loans:
(a) Amount of Loan: Unless otherwise permitted by administrative policy adopted
by the Employer, the minimum amount of any loan is $1,000.00. The maximum amount of any
loan, when added to the total outstanding balance of all other loans to the Participant from this Plan
and from all other plans of the Employer and of any other employer required to be aggregated with
the Employer under Code Section 414(b), 414(c), 414(m) or 414(o), is the lesser of
and all of his accounts and/or accrued benefits under all such other plans, or
(cid:11)(cid:76)(cid:12)(cid:3) (cid:20)(cid:18)(cid:21)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:57)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3) (cid:51)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3)
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3) (cid:7)(cid:24)(cid:19)(cid:15)(cid:19)(cid:19)(cid:19)(cid:17)(cid:19)(cid:19)(cid:15)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:75)(cid:76)(cid:74)(cid:75)(cid:72)(cid:86)(cid:87)(cid:3)
outstanding loan balance during the one-year period ending on the day before the new loan is
made over the outstanding balance of loans on the date of the new loan.
(b) Term of Loan: Each loan shall be repaid over a period of not more than five
years, unless such loan is used to acquire a dwelling unit which, within a reasonable period of
time (determined at the time the loan is made), will be used as the principal residence of the
Participant, in which case, the loan shall be repaid over a period of not more than ten years. The
repayment schedule of each loan (principal and interest) shall provide for level amortization over
the term of the loan and for payments to be made not less frequently than quarterly.
(cid:49)(cid:82)(cid:87)(cid:90)(cid:76)(cid:87)(cid:75)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:72)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:82)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:87)(cid:82)(cid:3) (cid:85)(cid:72)(cid:83)(cid:68)(cid:92)(cid:3) (cid:68)(cid:3) (cid:79)(cid:82)(cid:68)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:86)(cid:88)(cid:86)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)
during a leave of absence for Qualified Military Service. Additionall(cid:92)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
obligation to repay a loan may be suspended during any other approved leave of absence of not
more than six months, provided that the remaining payments shall be adjusted, if and as
necessary, as to insure that the loan will be repaid within the original term, if the original term of
the loan was five years, or within a renegotiated term that conforms to this Section 14.02(b) and
otherwise is permissible under law.
(c) Interest: All loans under this Article XIV shall bear interest at a rate which is
not less than one percent (1%) in excess of the prime rate in effect as of the date such loan is
initiated. Each loan applicant shall receive a clear statement of the charges involved in his loan
transaction, including the dollar amount and annual interest rate.
(d) Security: Each loan shall be adequately secured and shall be evidenced by a
Judgment Note. The Participant shall assign, as security for a loan, all his right, title and interest
in and to 50% of his account, provided that the P(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:85)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)
assignment not more than 180 days prior to the date of the loan, if such consent is required by
(cid:79)(cid:68)(cid:90)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:3)(cid:71)(cid:82)(cid:72)(cid:86)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:86)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)
law, and/or in the event the assignment by the Participant does not secure the loan adequately,
the Participant shall provide such other security for the loan as would be required in a
(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:79)(cid:82)(cid:68)(cid:81)(cid:3) (cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:69)(cid:72)(cid:87)(cid:90)(cid:72)(cid:72)(cid:81)(cid:3) (cid:88)(cid:81)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:82)(cid:81)(cid:3) (cid:68)(cid:85)(cid:80)(cid:182)(cid:86)-length terms and which may
include, but shall not be limited to, mortgage interest in real estate, a lien interest in an
automobile acquired with the proceeds of the loan, a pledge of securities or other collateral,
and/or wage attachment or payroll deduction.
(e) Repayment on Termination of Employment: Notwithstanding any other
provision herein to the contrary, in the event the employment of a Participant having an
outstanding loan obligation hereunder is terminated for any reason, the Committee may declare
the balance of the loan to be due and payable as of the date of such termination. The Trustee
may deduct the unpaid balance, including unpaid accrued interest, from any payment or
distribution from the Trust to which the Participant or his Beneficiary may be entitled, or at the
election of the Participant, may transfer the loan, in kind, to another qualified Employer plan, in
accordance with the provisions of Article XIII.
(f) Deemed Loan(cid:29)(cid:3) (cid:36)(cid:81)(cid:3) (cid:68)(cid:86)(cid:86)(cid:76)(cid:74)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:85)(cid:3) (cid:83)(cid:79)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
interest in the Plan and a loan, pledge or assignment by a Participant with respect to any
insurance contract held in the Plan, will be treated as a loan under this Article XIV.
(g) Transferred Loan: Notwithstanding anything herein to the contrary, in the
event a pre-existing loan is transferred to this Plan for the benefit of a Participant in connection
with a merger, acquisition or other transaction, such loan may be administered in accordance
with its original terms.
14.03 Procedures: The Committee has established Loan Procedures, which are
incorporated herein by reference and which may be amended or modified by the Committee at
any time without necessity of amending this Article XIV.
14.04 Default: With respect to any loan made pursuant to this Article XIV, the failure of
the borrower to make repayment as agreed or the occurrence of any event constituting a default
contained in any agreement or note executed in conjunction with the loan, shall constitute a
default on the loan. In the event of such a default, the Committee shall declare the unpaid
balance of the loan to be immediately due and payable and, upon the occurrence of a
distributable event, may, without demand or notice, enter judgment against the borrower, deduct
the unpaid balance, including unpaid accrued interest, (cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:72)(cid:85)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:82)(cid:85)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)
payment or distribution from the Trust to which the borrower-Participant (or his Beneficiary)
may be entitled or otherwise foreclose on, sell or dispose of any security interest, and/or exercise
any or all of the rights accorded to the Trustee and Committee under the Uniform Commercial
Code.
ARTICLE XV -QUALIFIED DOMESTIC RELATIONS ORDERS
15.01 Definitions: For purposes of applying the provisions of this Article:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:179)(cid:39)(cid:82)(cid:80)(cid:72)(cid:86)(cid:87)(cid:76)(cid:70)(cid:3) (cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:50)(cid:85)(cid:71)(cid:72)(cid:85)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:77)(cid:88)(cid:71)gment, decree or order
(including approval of a property settlement agreement) which
property rights for a spouse, former spouse, child or other dependent of a Participant, and
(i) relates to the provision of child support, alimony payments, or marital
community property law.
(ii) is made pursuant to a state domestic relations law, including
(cid:11)(cid:69)(cid:12)(cid:3)(cid:179)(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:39)(cid:82)(cid:80)(cid:72)(cid:86)(cid:87)(cid:76)(cid:70)(cid:3)(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:50)(cid:85)(cid:71)(cid:72)(cid:85)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:3)(cid:39)(cid:82)(cid:80)(cid:72)(cid:86)(cid:87)(cid:76)(cid:70)(cid:3)(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:50)(cid:85)(cid:71)(cid:72)(cid:85)(cid:3)
which
(i) creates or recognizes the existence of the right of an alternate payee to
receive all or a portion of the benefits payable with respect to a Participant under this Plan or
assigns such right to an Alternate Payee;
(ii) clearly specifies (A) the name and last known mailing addresses, if
any, of the Participant and each Alternate Payee covered by the order, (B) the amount or
(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:69)(cid:72)(cid:3) (cid:83)(cid:68)(cid:76)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:79)(cid:68)(cid:81)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:36)(cid:79)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:72)(cid:3) (cid:51)(cid:68)(cid:92)(cid:72)(cid:72)(cid:15)(cid:3) (cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
manner in which such amount or percentage is to be determined, (C) the number of payments or
the period to which it applies, and (D) each plan to which it applies;
any option for which the Plan does not otherwise provide;
(iii) does not require the Plan to provide any type or form of benefits or
the basis of actuarial value, and
(iv) does not require the Plan to provide increased benefits, determined on
(v) does not require the payment to an Alternate Payee of benefits which
are required to be paid to another Alternate Payee under another order previously determined to
be a Qualified Domestic Relations Order.
(cid:11)(cid:70)(cid:12)(cid:3) (cid:179)(cid:36)(cid:79)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:72) (cid:51)(cid:68)(cid:92)(cid:72)(cid:72)(cid:180)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:80)(cid:72)(cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3) (cid:73)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3) (cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3) (cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:3) (cid:82)(cid:85)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
dependent of a Participant who is recognized by a domestic relations order as having a right to
receive all or a portion of the benefits payable under this Plan with respect to such Participant.
Any person who is an Alternate Payee under a Qualified Domestic Relations Order shall be
considered to be a Beneficiary under the Plan. Unless specifically provided to the contrary by
the Qualified Domestic Relations Order, by law or by regulation, the rights of an Alternate Payee
hereunder shall terminate upon the death of the Alternate Payee.
15.02 Notice: In the event a Domestic Relations Order is received by the Plan, the Plan
Administrator shall promptly notify the Participant and each Alternate Payee of the receipt of
(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:82)(cid:85)(cid:71)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:50)(cid:85)(cid:71)(cid:72)(cid:85)(cid:17)
15.03 Determination of Qualified Status:
(a) Within a reasonable period after receipt of a Domestic Relations Order, the
Committee, as Plan Administrator, shall determine whether such order is a Qualified Domestic
Relations Order and shall notify the Participant and each Alternate Payee, or the designated
representative, if any, of the Alternate Payee, or the designated representative, if any, of the
Alternate Payee, of its determination. Such determination shall be made in accordance with
reasonable procedures adopted in writing by the Committee.
(b) If the Domestic Relations Order provides for immediate payment to the
Alternate Payee, then during such time as the determination of qualified status is pending, the
Committee shall separately account for the amounts which would have been payable to the
Alternate Payee during that period, if the Order had been determined to be a Qualified Domestic
Relations Order.
(i) If, within eighteen months, the Order, or any modification thereof, is
determined to be a Qualified Domestic Relations Order, the Committee shall direct the Trustee to
pay the segregated amounts, together with any interest accrued thereon, to the person or persons
entitled thereto.
(ii) If, within eighteen months, it is determined that the order is not a Qualified
Domestic Relations Order or the issue of qualified status is not resolved, the Committee shall
direct the Trustee to pay or retain the segregated amounts, as the case may be, together with any
interest accrued thereon, to or for the benefit of person or persons who would have been entitled
to such amounts had there been no order.
(iii) Any determination that an order is a Qualified Domestic Relations Order
which is made after the close of the eighteen-month period shall be applied prospectively only.
APPENDIX I
LIMITATIONS-SECTION 415
The limitations recited in this Appendix are intended to comply with the
provisions of Code Section 415 and the regulations thereunder which, to the extent permitted by
law, are incorporated herein by reference. For each limitation year, the contributions and other
additions with respect to a Participant under this Plan and any other defined contribution Plan
maintained by the Employer, any affiliate of the Employer, or any business or corporation which
the Participant controls, when expressed as an annual addition, within the meaning of Code
Section 415(c)(2), shall be limited, for limitation years beginning before January 1, 2002, to the
(cid:79)(cid:72)(cid:86)(cid:86)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:11)(cid:68)(cid:12)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:71)(cid:82)(cid:79)(cid:79)(cid:68)(cid:85)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:11)(cid:69)(cid:12)(cid:3)(cid:21)(cid:24)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)
and for limitation years beginning on or after January 1, 2002, except for catch-up contributions
described in Code Section 414(v), to the lesser of (a) $40,000, as adjusted under Code Section
(cid:23)(cid:20)(cid:24)(cid:11)(cid:71)(cid:12)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:11)(cid:69)(cid:12)(cid:3)(cid:20)(cid:19)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:30)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:15)(cid:3)(cid:75)(cid:82)(cid:90)(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)
compensation limit shall not apply to any contribution for medical benefits after separation from
service (within the meaning of Code Section 401(h) or 419A(f)(2)) which otherwise is treated as
an annual addition.
If a short limitation year is created because of an amendment changing the
limitation year to a different consecutive twelve-month period, or because the effective date of
the Plan is other than the first day of the limitation year, the maximum limitation on
contributions and benefits for that short limitation year shall be adjusted by multiplying the
above dollar limitation by a fraction, the numerator of which is the number of months in the short
(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:72)(cid:81)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:82)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:90)(cid:72)(cid:79)(cid:89)(cid:72)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:76)(cid:86)(cid:87)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:179)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)
determined in accordance with the provisions of Section 414, as modified by Section 415.
Compensation
(cid:41)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3) (cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:75)(cid:76)(cid:86)(cid:3)
Earned Income and all wages, salaries, fees for professional services and other amounts received
for personal services actually rendered in the course of employment with the Employer, to the
extent that the amounts are includible in gross income or to the extent amounts would have been
received and includible in gross income but for an election under Code Section 125(a), 132(f)(4),
402(e)(3), 402(h)(1)(B), 402(k) or 457(b). These amounts include, but are not limited to,
commissions paid to salespersons, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements
or othe(cid:85)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:90)(cid:68)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:68)(cid:3) (cid:81)(cid:82)(cid:81)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:17)(cid:3) (cid:36)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
exclude (a) Employer contributions to a plan of deferred compensation which are not includable
(cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:68)(cid:91)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:71)(cid:15) Employer
contributions under a simplified employee pension plan to the extent such contributions are
deductible by the Participant, or any distributions from a plan of deferred compensation; (b)
amounts realized from the exercise of a nonstatutory stock option, or when restricted stock (or
property) held by the Participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (c) amounts realized from the sale, exchange or other disposition of
stock acquired under a statutory stock option; (d) other amounts which received special tax
benefits, such as premiums for group-term life insurance but only to the extent such amounts are
(cid:81)(cid:82)(cid:87)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:17)(cid:3)(cid:3)(cid:41)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:86)(cid:72)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:70)(cid:82)mpensation
(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:3) (cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3) (cid:69)(cid:92)(cid:3) (cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3)
Section 409A or Code Section 457(f)(1)(A) or because amounts are constructively received by
the participant. For limitation years beginning on or after July 1, 2007, and for purposes of these
limitation, compensation may not reflect compensation for any year that exceeds the limit under
Code Section 401(a)(17) applicable to that year.
Timing of Compensation
Except as otherwise provided herein, in order to be taken into account for a
limitation year, compensation must actually be paid or made available to the Participant within
the limitation year. For this purpose, compensation is treated as paid on a date, if it actually is
paid on that date or would have been paid on that date but for an election under Code Section
125, 132(f), 401(k), 403(b), 408(k), 408(p)(2)(A)(i) or 457(b). Further, except as otherwise
provided herein, in order to be taken into account for a limitation year, compensation must be
paid or treated as paid to the participant prior to severance of employment with the Employer.
Notwithstanding the foregoing, compensation for a limitation year shall include amounts earned
but not paid during that limitation year solely because of minor timing differences in pay periods
and pay dates, provided that (a) these amounts are paid during the first few weeks of the next
limitation year; (b) the amounts are included on a uniform and consistent basis with respect to all
similarly situated Employees, and (c) no compensation is included in more than one limitation
year.
Compensation Paid After Severance from Employment
In general, amounts paid after severance from employment are excluded from
compensation. For purposes of this Appendix and the limit(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:69)(cid:72)(cid:71)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:76)(cid:81)(cid:15)(cid:3)(cid:179)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)
(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:180)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:83)(cid:68)(cid:76)(cid:71)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:11)(cid:68)(cid:12)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)
(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:82)(cid:88)(cid:85)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)
compensation for services outsi(cid:71)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:85)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:76)(cid:81)(cid:74)(cid:3)(cid:75)(cid:82)(cid:88)(cid:85)(cid:86)(cid:3)(cid:11)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)
shift differential), commissions, bonuses, or other similar payments and would have been paid to
the Participant prior to a severance from employment, if the Participant had continued in
employment with the Employer, and (b) provided that such amounts are paid by the later of (1)
2-1/2 months after severance from employment with the Employer, or (2) the end of the
limitation year that includes the date of severance from employment with the Employer.
Any post-severance payment not expressly included in compensation, as provided
herein, are excluded from compensation, even if paid within 2-(cid:20)(cid:18)(cid:21)(cid:3)(cid:80)(cid:82)(cid:81)(cid:87)(cid:75)(cid:86)(cid:3)(cid:68)(cid:73)(cid:87)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
severance from employment with the Employer or by the end of the Limitation Year that
(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:17)
Annual Additions
The annual additions consist of the sum of the following amounts credited to a
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:60)(cid:72)(cid:68)(cid:85)(cid:29)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)tions; employee contributions
(determined without regard to any rollover contributions, as defined in Code Sections 402(c),
403(a)(4), 403(b)(8) and 408(d)(3), and without regard to employee contributions to a simplified
employer pension which are excludable from gross income under Code Section 408(k)(6));
forfeitures; amounts allocated to an individual medical account, as defined in Code Section
415(l)(2), which is part of a pension or annuity plan maintained by the Employer, and amounts
derived from contributions paid or accrued which are attributable to post-retirement medical
benefits, allocated to the separate account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code Section 419(e). If the annual
additions exceed the limitations specified herein, the Employer contribution on behalf of the
Participant shall be reduced only by the amount sufficient to alleviate the excess.
(cid:53)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:83)(cid:68)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)
(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:72)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:68)(cid:3)(cid:73)(cid:76)(cid:71)(cid:88)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)(cid:73)(cid:68)(cid:76)(cid:79)(cid:88)(cid:85)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:68)(cid:78)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)
which there is a reasonable risk of liability under Title I of ERISA or under other applicable
federal or state law, when other similarly situated Participants are similarly treated, do not
constitute annual additions in any limitation year.
APPENDIX II
IMPLEMENTING SECTION 3.13 - SAFE HARBOR PROVISIONS
RESERVED
Exhibit 10.5
FIRST AMENDMENT
TO
SUBURBAN PROPANE RETIREMENT SAVINGS & INVESTMENT PLAN
Pursuant to Article XI of the Suburban Propane Retirement Savings & Investment Plan
effective January 1, 2013, said Plan is amended, effective as of January 1, 2015, as follows:
FIRST:
Article VI of the Plan is restated in its entirety, as attached hereto.
SECOND:
In all other respects, the Plan is ratified and approved.
IN WITNESS WHEREOF, the duly authorized Members of the Benefits Administration
Committee have adopted this amendment this ____ day of _________________, 2015.
Michael M. Keating
Steven C. Boyd
(cid:36)(cid:17)(cid:3)(cid:39)(cid:68)(cid:89)(cid:76)(cid:81)(cid:3)(cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)
Sandra N. Zwickel
Michael Kuglin
Mark Weinberg
ARTICLE VI - COMMENCEMENT OF BENEFITS
6.01 General: Subject to the provisions of Section 6.02, unless the Participant elects
otherwise, distribution o(cid:73)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:79)(cid:68)(cid:87)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:68)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:25)(cid:19)(cid:87)(cid:75)(cid:3) (cid:71)(cid:68)(cid:92)(cid:3)
following the close of the Plan Year in which the latest of the following occurs:
(a) The Participant attains age 65 or his Normal Retirement Age, if earlier,
(b) There occurs the 10th a(cid:81)(cid:81)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:39)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:82)(cid:85)
(c) The Participant terminates his employment with the Employer.
Notwithstanding the foregoing, the failure of a Participant and/or his spouse, if spousal consent is
required, to consent to a distribution while a benefit is immediately distributable shall be deemed
to be an election to defer commencement of payment of such benefit.
6.02 Required Commencement Date: As to any Participant who is a Five Percent Owner,
as defined in Section 1.16, during the Plan Year ending in the calendar year in which the
Participant attains age 70-1/2, distribution of benefits shall begin not later than the first day of
April following the calendar year in which the Participant attains age 70-1/2, which date shall be
t(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:179)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:180)(cid:3)(cid:3)(cid:50)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:69)(cid:72)(cid:74)(cid:88)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:3)(cid:41)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)
Owner pursuant to this Section 6.02, such distribution must continue even if the Participant
ceases to be a Five Percent Owner in a subsequent year.
Except with respect to a Participant who is a Five Percent Owner and except as provided
in Section 6.03, distribution of benefits shall begin not later the first day of April of the calendar
year following the later of the calendar year in which the Participant attains age 70-1/2, or the
(cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:69)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:179)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:17)(cid:180)
6.03 TEFRA Section 242(b)(2) Election: Notwithstanding the foregoing, if the
Participant had accrued a benefit under the plan as of December 31, 1983, and executed a
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:179)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:21)(cid:23)(cid:21)(cid:11)(cid:69)(cid:12)(cid:11)(cid:21)(cid:12)(cid:3)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:180)(cid:12)(cid:3)(cid:83)(cid:85)(cid:76)(cid:82)(cid:85)(cid:3)(cid:87)(cid:82)(cid:3)(cid:45)(cid:68)(cid:81)(cid:88)(cid:68)(cid:85)(cid:92)(cid:3)(cid:20)(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:23)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
(cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)
designation, provided that the distribution designation specifies the time at which distribution
will commence, the period over which distributions will be made, and, in the case of a
distribution by reason of death, the beneficiaries of the Participant, listed in order of priority, and
provided, further, that such designation has not been revoked or modified after December 31,
1983. For purposes of the foregoing and except as otherwise provided by law, such a
distribution designation shall not be deemed to have been modified except by affirmative action
by the Participant.
If any designation to which Section 6.03 refers is revoked, any subsequent distribution
must satisfy the requirements of Code Section 401(a)(9) and the regulations issued thereunder.
If such a designation is revoked subsequent to the date which otherwise would have been the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:3) (cid:80)(cid:88)(cid:86)(cid:87)(cid:3) (cid:71)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:72)(cid:15)(cid:3) (cid:69)(cid:92)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:81)(cid:71)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
calendar year following the calendar year in which the revocation occurs, the total amount not
yet distributed which would have been distributed, but for the Section 242(b) designation, in
order to satisfy Code Section 401(a)(9) and the regulations issued thereunder. The mere
substitution or addition of a beneficiary under the designation will not be considered to be a
revocation of the designation, provided that such substitution or addition does not alter the period
over which distributions are to be made under the designation, directly or indirectly, such as by
altering the relevant measuring life.
6.04 Required Minimum Distributions:
(a) General Rules: The provisions of this Section 6.04 will apply for purposes of
determining required minimum distributions for calendar years beginning after December 31,
2002, and will be applied in accordance with the Treasury regulations under Code Section
401(a)(9); provided, however, that distributions may be made, pursuant to Section 6.03, in
accordance with a valid Section 242(b)(2) election. Distribution of the Participant's entire
interest will be made or commenced no later than the Participant's required commencement date,
as provided in Section 6.02.
(b) Death of Participant Before Distributions Begin: If the Participant dies before
distributions begin, distribution of the Participant's entire interest will be made or commenced as
follows:
(i) If the Participant's surviving spouse is the Participant's sole designated
beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar
year immediately following the calendar year in which the Participant died, or by December 31
of the calendar year in which the Participant would have attained age 70-1/2, if later.
(ii) If the Participant's surviving spouse is not the Participant's sole
designated beneficiary, then distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year in which the
Participant died, and, the amount payable to each beneficiary will be distributed, at the election
of that beneficiary, either (A) by December 31 of the calendar year containing the fifth
anniversary of the Participant's death or (B) over the life of such beneficiary or over a period not
extending beyond the life expectancy of such beneficiary.
(iii) If there is no designated beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire interest will be distributed by
December 31 of the calendar year containing the fifth anniversary of the Participant's death.
(iv) If the Participant's surviving spouse is the Participant's sole designated
beneficiary and the surviving spouse dies after the Participant but before distributions to the
surviving spouse begin, this Section 6.04(b), other than Section 6.04(b)(i), will apply as if the
surviving spouse were the Participant.
For purposes of this Section 6.04(b) and Section 6.04(e), unless Section
6.04(b)(iv) applies, distributions are considered to begin on the Participant's required beginning
date. If Section 6.04(b)(iv) applies, distributions are considered to begin on the date on which
the Plan is required to begin making distributions to the surviving spouse under Section
6.04(b)(i). If distributions under an annuity purchased from an insurance company irrevocably
commence to the Participant before the Participant's required beginning date (or to the
Participant's surviving spouse before the date on which the Plan is required to begin making
distributions to the surviving spouse under section 6.04(b)(i)), the date distributions are
considered to begin is the date distributions actually commence.
(c) Forms of Distribution: Unless the Participant's interest is distributed in the
form of an annuity purchased from an insurance company or in a single sum on or before the
required beginning date, as of the first distribution calendar year, distributions will be made in
accordance with Sections 6.04(d) and 6.04(e). If the Participant's interest is distributed in the
form of an annuity purchased from an insurance company, distributions thereunder will be made
in accordance with the requirements of Section 401(a)(9) of the Code and applicable Treasury
regulations.
(d) Required Minimum Distributions During Lifetime of Participant: During the
Participant's lifetime, the minimum amount that will be distributed for each distribution calendar
year is the lesser of:
(i) the quotient obtained by dividing the Participant's account balance by
the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury regulations, using the Participant's age as of the Participant's birthday in the distribution
calendar year; or
(ii) if the Participant's sole designated beneficiary for the distribution
calendar year is the Participant's spouse, the quotient obtained by dividing the Participant's
account balance by the number in the Joint and Last Survivor Table set forth in Section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's and spouse's attained ages as of
the Participant's and spouse's birthdays in the distribution calendar year.
The required minimum distributions, as determined in accordance with this Section 6.04(d), shall
begin with the first distribution calendar year and continue through the distribution calendar year
that includes the Participant's date of death.
(e) Required Minimum Distributions After Death of Participant:
(i) Death On or After Date Distributions Begin:
(A) Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the remaining life expectancy of the
Participant's designated beneficiary, determined as follows:
using the age of the Participant in the year of death, reduced by one for each subsequent year,
(1) The Participant's remaining life expectancy is calculated
(2) If the Participant's surviving spouse is the Participant's
sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated
for each distribution calendar year after the year of the Participant's death, using the surviving
spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year
of the surviving spouse's death, the remaining life expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year
of the spouse's death, reduced by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is not the
Participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy
is calculated using the age of the beneficiary in the year following the year of the Participant's
death, reduced by one for each subsequent year.
(B) No Designated Beneficiary. If the Participant dies on or after
the date distributions begin and there is no designated beneficiary as of September 30 of the year
after the year of the Participant's death, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the Participant's remaining life expectancy
calculated using the age of the Participant in the year of death, reduced by one for each
subsequent year.
(ii) Death Before Date Distributions Begin:
(A) Participant Survived by Designated Beneficiary. If the
Participant dies before the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated beneficiary, determined as provided in
section 6.04(e)(i).
(B) No Designated Beneficiary. If the Participant dies before the
date distributions begin and there is no designated beneficiary as of September 30 of the year
following the year of the Participant's death, distribution of the Participant's entire interest will be
completed by December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(C) Death of Surviving Spouse Before Distributions to Surviving
Spouse are Required to Begin. If the Participant dies before the date distributions begin, the
Participant's surviving spouse is the Participant's sole designated beneficiary, and the surviving
spouse dies before the Plan is required to begin making distributions to the surviving spouse
under Section 6.04(b), this Section 6.04(e)(ii) will apply as if the surviving spouse were the
Participant.
(f) Definitions: For purposes of applying the required minimum distribution
provisions of this Section 6.04:
(cid:11)(cid:76)(cid:12)(cid:3)(cid:179)(cid:39)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:88)(cid:68)(cid:79)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:76)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)
as the beneficiary under Article VII of the plan and is the designated beneficiary under Section
401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.
(cid:11)(cid:76)(cid:76)(cid:12)(cid:3)(cid:179)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:38)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:79)(cid:72)(cid:81)(cid:71)(cid:68)(cid:85)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)(cid:90)(cid:75)ich a
minimum distribution is required. For distributions beginning before the Participant's death, the
first distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participant's required commencement date. For distributions beginning after
the Participant's death, the first distribution calendar year is the calendar year in which
distributions are to begin under section 6.04(b). The required minimum distribution for the
Participant's first distribution calendar year will be made on or before the Participant's required
commencement date. The required minimum distribution for other distribution calendar years,
including the required minimum distribution for the distribution calendar year in which the
Participant's required commencement date occurs, will be made on or before December 31 of
that distribution calendar year.
the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.
(cid:11)(cid:76)(cid:76)(cid:76)(cid:12)(cid:3)(cid:179)(cid:47)(cid:76)(cid:73)(cid:72)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:92)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:92)(cid:3)(cid:68)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:88)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:88)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:11)(cid:76)(cid:89)(cid:12)(cid:3)(cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:10)(cid:86)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:37)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:180)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:80)(cid:72)(cid:68)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
the last valuation date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year), increased by the amount of any contributions made and allocated or
forfeitures allocated to the account balance as of dates in the valuation calendar year after the
valuation date, and decreased by distributions made in the valuation calendar year after the
valuation date. The account balance for the valuation calendar year includes any amounts rolled
over or transferred to the plan either in the valuation calendar year or in the distribution calendar
year, if distributed or transferred in the valuation calendar year.
(g) 2009 Required Minimum Distributions: A Participant or Beneficiary to whom
a required minimum distribution for 2009 would have been required in accordance with this
(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:25)(cid:17)(cid:19)(cid:23)(cid:3) (cid:69)(cid:88)(cid:87)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:81)(cid:68)(cid:70)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:38)(cid:82)(cid:71)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:23)(cid:19)(cid:20)(cid:11)(cid:68)(cid:12)(cid:11)(cid:28)(cid:12)(cid:11)(cid:43)(cid:12)(cid:3) (cid:11)(cid:179)(cid:21)(cid:19)(cid:19)(cid:28)(cid:3) (cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3) (cid:48)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3)
(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:12)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:75)(cid:82)(cid:3)(cid:90)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)satisfied that requirement by receiving distributions that are
(1) equal to the 2009 Required Minimum Distributions or (2) one or more payments in a series of
substantially equal distributions (that include the 2009 Required Minimum Distributions) made
at least annually and expected to last for the life (or life expectancy) of the Participant, the joint
(cid:79)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:11)(cid:82)(cid:85)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:87)(cid:3)(cid:79)(cid:76)(cid:73)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:68)(cid:81)(cid:70)(cid:76)(cid:72)(cid:86)(cid:12)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:39)(cid:72)(cid:86)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:85)(cid:92)(cid:15)(cid:3)
(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:68)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:87)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:87)(cid:3)(cid:87)(cid:72)(cid:81)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:11)(cid:179)(cid:40)(cid:91)(cid:87)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:21)(cid:19)(cid:19)(cid:28)(cid:3)(cid:53)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:48)(cid:76)(cid:81)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:180)(cid:12)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)
receive those 2009 Required Minimum Distributions unless the Participant or Beneficiary
affirmatively elects, after having been given an opportunity to do so, to receive such
distributions. For purposes of the direct rollover provisions of Section 7.07, 2009 Required
Minimum Distributions and Extended 2009 Required Minimum Distributions will be treated as
eligible rollover distributions.
6.05 Cash-Out Distribution: Subject to the Direct Rollover provisions of Article VII, the
Committee shall make distribution, in advance of the date provided in Section 6.01 and as
provided in this Section 6.05, to a Participant whose employment with the Employer has been
terminated for reasons other than death, provided that the distribution is made in a lump sum,
(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:85)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:11)(cid:72)(cid:91)(cid:70)(cid:79)(cid:88)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:70)(cid:70)(cid:88)(cid:80)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:71)(cid:72)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)
contributions, within the meaning of Code Section 72(o)(5)(B), for Plan Years beginning prior to
January 1, 1989), and satisfies the following terms and conditions:
(cid:11)(cid:68)(cid:12)(cid:3) (cid:44)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:71)(cid:3) (cid:68)(cid:87)(cid:3) (cid:7)(cid:20)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3) (cid:82)(cid:85)(cid:3) (cid:79)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)
direct the immediate distribution of such account.
(cid:11)(cid:69)(cid:12)(cid:3)(cid:44)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:20)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)
$5,000, and unless the Participant elects to have such distribution paid directly to an eligible
retirement plan specified by the Participant in a direct rollover or to receive the distribution in a
lump sum payment, in accordance with Section 6.05, such cash-out distribution shall be
transferred, for the benefit of the Participant, by direct rollover to an individual retirement plan
designated by the Committee.
(cid:11)(cid:70)(cid:12)(cid:3)(cid:44)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:7)(cid:24)(cid:15)(cid:19)(cid:19)(cid:19)(cid:17)(cid:19)(cid:19)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3)(cid:80)(cid:88)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)
the cash-out distribution in writing. In addition, as to any cash-out distribution for which written
(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:3) (cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:25)(cid:17)(cid:19)(cid:24)(cid:11)(cid:70)(cid:12)(cid:15)(cid:3) (cid:76)(cid:73)(cid:3) (cid:68)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)
account is subject to provisions requiring distribution in the form of a qualified joint and survivor
annuity or qualified pre-retirement survivor annuity pursuant to Article VII of this Plan, the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:86)(cid:83)(cid:82)(cid:88)(cid:86)(cid:72)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:15)(cid:3)(cid:80)(cid:88)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)-out distribution in writing as provided in
Article VII. With respect to cash-out distributions made to a Participant as to whom the
qualified joint and survivor annuity provisions of Article VII do not apply, if the value of the
(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3) (cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:72)(cid:85)(cid:76)(cid:89)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3) (cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:72)(cid:76)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
exceeds $5,000.00 or is a remaining payment under a selected optional form of payment that
exceeded $5,000.00 at the time the selected payment began, the Participant must consent to the
distribution.
(cid:11)(cid:71)(cid:12)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)ed in accordance with
the provisions of Section 5.05.
(e) A cash-out distribution or transfer in accordance with this Section 6.05 shall
be made as soon as administratively feasible, subject to the customary procedures of the
Committee, following the date (cid:82)(cid:81)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3) (cid:71)(cid:68)(cid:87)(cid:72)(cid:3)
(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3)(cid:71)(cid:72)(cid:72)(cid:80)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:24)(cid:17)(cid:19)(cid:24)(cid:17)
6.06 Distribution Pursuant to a Qualified Domestic Relations Order: Notwithstanding
any other provision of this Plan, the Trustee may make a distribution at any time as directed
pursuant to a domestic relations order, which has been determined to be a Qualified Domestic
Relations Order under Article XV of this Plan, to an alternate payee without regard to whether
the Participant has separated from service with the Employer or has attained the earliest
retirement age under the Plan.
Exhibit 10.6
SECOND AMENDMENT
TO
SUBURBAN PROPANE RETIREMENT SAVINGS & INVESTMENT PLAN
Pursuant to Article XI of the Suburban Propane Retirement Savings & Investment Plan
effective January 1, 2013, said Plan is amended, effective as of January 1, 2016, as follows:
FIRST:
Article II of the Plan is restated in its entirety, as attached hereto.
SECOND:
In all other respects, the Plan is ratified and approved.
IN WITNESS WHEREOF, the duly authorized Members of the Benefits Administration
Committee have adopted this amendment this 1st day of February, 2016.
Michael Kuglin
Steven C. Boyd
(cid:36)(cid:17)(cid:3)(cid:39)(cid:68)(cid:89)(cid:76)(cid:81)(cid:3)(cid:39)(cid:182)(cid:36)(cid:80)(cid:69)(cid:85)(cid:82)(cid:86)(cid:76)(cid:82)
Sandra N. Zwickel
Mark Wienberg
ARTICLE II - PARTICIPATION
2.01 Date of Participation: Each Eligible Employee shall become a Participant in the
Plan as of his Employment Commencement Date. On, or as soon as administratively feasible
after, his Date of Participation, the Participant shall complete a salary deferral agreement (unless
deemed to have made an election pursuant to Section 3.14), make an investment election as
provided in Section 4.04, and designate a Beneficiary. Each current Participant in the Plan shall
remain a Participant.
Each Eligible Employee who was employed by Inergy Propane, LLC or Inergy Sales &
Service, Inc. immediately prior to the closing of the transaction contemplated by the
Contribution Agreement by and among Inergy, L.P., Inergy GP, LLC, Inergy Sales & Service,
Inc. and Suburban Propane Partners, L.P. dated April 25, 2012, shall become a Participant as of
such closing date; each Eligible Employee who was employed by Inergy Propane, LLC or Inergy
Sales & Service, Inc. but was on an approved leave of absence as of such closing date shall
become a Participant as of the date on which he or she returns from such leave, provided that the
return occurs within six months after the leave of absence commenced.
2.02 Leaves of Absence:
(a)
Temporary Absence: A temporary break in the continuity of employment
for approved leave of absence, temporary lay-off or service on jury duty shall not be considered
to be a termination of employment or result in a One-Year Break in Service, provided that the
absence does not exceed 12 months and provided that the Participant returns to his employment
with the Employer after such absence. If the Participant does not return to active employment
with the Employer after such absence, the Participant shall be deemed to have terminated his
employment as of the date the approved absence ends.
(b)
Qualified Military Service: A leave of absence for Qualified Military
Service shall not be deemed to be a termination of employment and shall not result in a One Year
Break in Service, provided that (i) the Participant returns to his employment with the Employer
within 14 days of completion of the Qualified Military Service, if the leave of absence was less
than 181 days in duration, within 90 days of completion of the Qualified Military Service, if the
leave of absence was more than 180 days in duration, or within such other time period as may be
provided by law, (ii) as to any such leave of absence which was more than 30 days in duration,
the Participant furnishes proof of his Qualified Military Service upon request by the Employer,
and (iii) the cumulative length of the leave of absence and all prior absences from employment
with the Employer because of uniformed service obligations does not exceed 5 years, unless
otherwise required by law. If the Participant does not return to active employment with the
Employer within the required period, he shall be deemed to have terminated employment at the
time his leave of absence commenced. If the Participant returns to active employment with the
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:68)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
amount of any missed Employer contributions, but no forfeitures or earnings, to which the
Participant is entitled based u(cid:83)(cid:82)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:17)(cid:19)(cid:23)(cid:15)(cid:3)
during that period of absence. For purposes of the limitations imposed by Code Section 415, as
referenced in Appendix I, any contribution which is allocated to the account of the Participant, as
provided herein, shall be counted only for the Limitation Year to which such contribution relates.
2.03 Participation After One Year Break in Service:
(a)
In the event an Eligible Employee incurs a One Year Break in Service
prior to becoming a Participant, he shall be treated thereafter as a new Employee for purposes of
participation under Section 2.01.
(b)
In the event a Participant incurs a One Year Break in Service, he shall
resume participation in this Plan as of his Employment Commencement Date following the One
Year Break in Service.
2.04 Employees Ineligible for Participation: Notwithstanding any provision in this
Article to the contrary, and unless expressly agreed otherwise, no Employee who is a member of
a unit of Employees covered by a collective bargaining agreement between employee
representatives and one or more employers shall be eligible for participation in this Plan,
provided that there is evidence that retirement benefits were the subject of good faith bargaining
between employee representatives and such employer or employers. In addition, Leased
Employees shall be ineligible for participation in the Plan.
Individuals who become Employees as a result of an asset or stock acquisition, merger, or
similar transaction involving a change in the employer of the employees of a trade or business
shall not be eligible for participation in the Plan until the first day of the Plan Year beginning
after the effective date of the transaction unless otherwise provided in the transactional
documents and/or confirmed by resolution of the Benefits Administration Committee as Plan
Administrator.
2.05 Change in Eligibility Status:
(a) In the event that an Employee who has been ineligible for participation under
Section 2.04 subsequently becomes eligible by reason of a change in status to a category of
employment eligible for participation, he shall commence participation as of the date of the
change in his status, provided that he has satisfied the conditions of Section 2.01. If, as of the
date of the change in his status, he has not satisfied the conditions of Section 2.01, his
participation shall commence as of his Date of Participation, as defined in Sections 1.05 and
2.01.
(b) In the event a Participant becomes ineligible for continued participation by
reason of a change in status to a category of employment ineligible for participation, except as
provided in Section 2.05(c) below, he shall cease to be an Eligible Employee as of the date
immediately preceding his change in status and shall remain a Participant in this Plan only to the
extent that, and for so long as, an account balance is maintained in the Plan for his benefit.
(cid:11)(cid:70)(cid:12)(cid:3)(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:76)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:72)(cid:80)(cid:83)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:68)(cid:81)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:88)(cid:86)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)
the course of a particular Plan Year. To the extent that the Employee remains a Participant
eligible to share in any Employer contribution for such year, in accordance with provisions of
Section 4.01, all Hours of Service shall be aggregated, and all wages and other compensation
shall be apportioned, such that the individual neither shall be deprived of any benefit nor receive
a duplication of benefits.
(d) Upon a change to ineligible status by any Participant hereunder, that
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:3)(cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:182)(cid:86)(cid:3)(cid:68)(cid:70)counts shall be credited
or charged, as the case may be, with gains and losses, as provided in Section 4.03, until such
time as the Employee becomes entitled to benefits in accordance with the provisions of
Article V.
2.06 Reclassification of Independent Contractor: In the event an individual, who has
been ineligible for participation in this Plan by virtue of having been classified by the Employer
as an independent contractor, shall be reclassified, by the Employer or otherwise, as an
Employee, such
the Plan, following such
reclassification, in accordance with the provisions of Section 2.01, unless such Employee shall
be ineligible for participation, in accordance with the provisions of Section 2.04. In no event,
however, shall such an Employee become a Participant in the Plan prior to the date on which he
is reclassified as an Employee, notwithstanding any retroactive effect of such reclassification.
individual shall become a Participant
in
SUBSIDIARIES OF SUBURBAN PROPANE PARTNERS, L.P.
(as of November 21, 2016)
Exhibit 21.1
SUBURBAN LP HOLDING, INC. (Delaware)
SUBURBAN LP HOLDING, LLC (Delaware)
SUBURBAN PROPANE, L. P. (Delaware)
SUBURBAN SALES & SERVICE, INC. (Delaware)
GAS CONNECTION, LLC (Oregon)
SUBURBAN FRANCHISING, LLC (Nevada)
SUBURBAN ENERGY FINANCE CORP. (Delaware)
SUBURBAN HEATING OIL PARTNERS, LLC (Delaware) (d/b/a Suburban Propane)
AGWAY ENERGY SERVICES, LLC (Delaware)
SUBURBAN PROPERTY HOLDINGS, LLC (Delaware)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-195864) and Form S-8
(Nos. 333-204559 and 333-160768) of Suburban Propane Partners, L.P. of our report dated November 23, 2016 relating to the
financial statements, financial statement schedule, and the effectiveness of internal control over financial reporting, which appears in
this Form 10 K.
Exhibit 23.1
PricewaterhouseCoopers LLP
Florham Park, New Jersey
November 23, 2016
Certification of the President and Chief Executive Officer
Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
Exhibit 31.1
I, Michael A. Stivala, certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of Suburban Propane Partners, L.P.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
(cid:55)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:44)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)edures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
d)
(cid:40)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3)
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:82)(cid:70)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3) (cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:80)(cid:82)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:73)(cid:82)(cid:88)(cid:85)(cid:87)(cid:75)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3)
(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3) (cid:87)(cid:82)(cid:3) (cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74);
and
5.
(cid:55)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:44)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:15)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:80)(cid:82)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3) (cid:72)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3)
(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86)(cid:29)
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:76)(cid:93)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:17)
November 23, 2016
By: /s/ MICHAELA. STIVALA
Michael A. Stivala
President and Chief Executive Officer
Certification of the Chief Financial Officer
Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
Exhibit 31.2
I, Michael A. Kuglin, certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of Suburban Propane Partners, L.P.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
(cid:55)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:44)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)edures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
d)
(cid:40)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3)
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:76)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:82)(cid:70)(cid:70)urred during the
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:80)(cid:82)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:73)(cid:82)(cid:88)(cid:85)(cid:87)(cid:75)(cid:3) (cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3) (cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:68)(cid:86)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:68)(cid:81)(cid:3) (cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:12)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3)
(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:82)(cid:85)(cid:3)(cid:76)(cid:86)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3) (cid:87)(cid:82)(cid:3) (cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)eporting;
and
5.
(cid:55)(cid:75)(cid:72)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3) (cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:92)(cid:76)(cid:81)(cid:74)(cid:3) (cid:82)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:44)(cid:3) (cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:72)(cid:71)(cid:15)(cid:3) (cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:80)(cid:82)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3) (cid:72)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3) (cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3)
(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:86):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:72)(cid:68)(cid:86)(cid:82)(cid:81)(cid:68)(cid:69)(cid:79)(cid:92)(cid:3)(cid:79)(cid:76)(cid:78)(cid:72)(cid:79)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:71)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:79)(cid:92)(cid:3)(cid:68)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:87)(cid:82)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:15)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3)(cid:86)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:76)(cid:93)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:17)
November 23, 2016
By: /s/ MICHAEL A. KUGLIN
Michael A. Kuglin
Chief Financial Officer and Chief Accounting Officer
Certification of the President and Chief Executive Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1
In connection with (cid:87)(cid:75)(cid:72)(cid:3) (cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3) (cid:47)(cid:17)(cid:51)(cid:17)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:3) (cid:82)(cid:81)(cid:3) (cid:41)(cid:82)(cid:85)(cid:80)(cid:3) (cid:20)(cid:19)-K for the period ended
September 24, 2016 (cid:68)(cid:86)(cid:3)(cid:73)(cid:76)(cid:79)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:82)(cid:73)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3)(cid:44)(cid:15)(cid:3)(cid:48)(cid:76)(cid:70)(cid:75)(cid:68)(cid:72)(cid:79)(cid:3)(cid:36)(cid:17)(cid:3)(cid:54)(cid:87)(cid:76)(cid:89)(cid:68)(cid:79)(cid:68)(cid:15)(cid:3)
President and Chief Executive Officer of the Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Partnership.
By: /s/ MICHAEL A. STIVALA
Michael A. Stivala
President and Chief Executive Officer
November 23, 2016
(cid:55)(cid:75)(cid:76)(cid:86)(cid:3) (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:72)(cid:72)(cid:80)(cid:72)(cid:71)(cid:3) (cid:179)(cid:73)(cid:76)(cid:79)(cid:72)(cid:71)(cid:180)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:27)(cid:3)(cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:20)(cid:28)(cid:22)(cid:23)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3)(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (the
(cid:179)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3) (cid:82)(cid:85)(cid:3) (cid:76)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:81)(cid:92)(cid:3) (cid:73)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
Certification of the Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2
(cid:44)(cid:81)(cid:3) (cid:70)(cid:82)(cid:81)(cid:81)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3) (cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:88)(cid:69)(cid:88)(cid:85)(cid:69)(cid:68)(cid:81)(cid:3) (cid:51)(cid:85)(cid:82)(cid:83)(cid:68)(cid:81)(cid:72)(cid:3) (cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3) (cid:47)(cid:17)(cid:51)(cid:17)(cid:3) (cid:11)(cid:87)(cid:75)(cid:72)(cid:3) (cid:179)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:180)(cid:12)(cid:3) (cid:82)(cid:81)(cid:3) (cid:41)(cid:82)(cid:85)(cid:80)(cid:3) (cid:20)(cid:19)-K for the period ended
September 24, 2016 as filed with the Securities and Exchange Commission on the date hereof (the (cid:179)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:180)(cid:12)(cid:15)(cid:3)(cid:44)(cid:15)(cid:3)(cid:48)(cid:76)(cid:70)(cid:75)(cid:68)(cid:72)(cid:79)(cid:3)(cid:36)(cid:17)(cid:3)(cid:46)(cid:88)(cid:74)(cid:79)(cid:76)(cid:81)(cid:15)(cid:3)
Chief Financial Officer and Chief Accounting Officer of the Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to
§ 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Partnership.
By: /s/ MICHAEL A. KUGLIN
Michael A. Kuglin
Chief Financial Officer and Chief Accounting Officer
November 23, 2016
(cid:55)(cid:75)(cid:76)(cid:86)(cid:3) (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:86)(cid:75)(cid:68)(cid:79)(cid:79)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:69)(cid:72)(cid:3) (cid:71)(cid:72)(cid:72)(cid:80)(cid:72)(cid:71)(cid:3) (cid:179)(cid:73)(cid:76)(cid:79)(cid:72)(cid:71)(cid:180)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:83)(cid:88)(cid:85)(cid:83)(cid:82)(cid:86)(cid:72)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:20)(cid:27)(cid:3)(cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3) (cid:36)(cid:70)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:20)(cid:28)(cid:22)(cid:23)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3)(cid:68)(cid:80)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3) (the
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except as shall be expressly set forth by specific reference in such a filing.
FIVE-YEAR PERFORMANCE GRAPH 1
Exhibit 99.2
The following graph compares the performance of our Common Units with the performance of the S&P 500 Index, the Alerian MLP
Index and a peer group index for the period of the five fiscal years commencing September 24, 2011. The graph assumes that at the
beginning of the period, $100 was invested in each of (1) our Common Units, (2) the S&P 500 Index, (3) the Alerian MLP Index, and
(4) the peer group, and that all distributions or dividends were reinvested.
We do not believe that any published industry or line-of-business index accurately reflects our business. Accordingly, we have
created a special peer group index consisting of other propane-marketing companies whose common units are publicly traded on the
New York Stock Exchange. The peer group is composed of the following companies: AmeriGas Partners, L.P. and Ferrellgas
Partners, L.P.
1 The performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this
Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that Suburban specifically incorporates this information by reference in such filing, and shall not
otherwise be deemed filed under such Acts.
S U B U R B A N B O A R D & E X E C U T I V E M A N A G E M E N T
Executive Management
Investor Information
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President and Chief Executive Officer
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Chief Financial Officer and Chief Accounting Officer
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Senior Vice President, General Counsel and Secretary
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Senior Vice President, Operations
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Senior Vice President, Product Supply, Purchasing
and Logistics
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Senior Vice President, Information Services
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Vice President and Treasurer
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Vice President, Operational Support
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Vice President, Human Resources
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Controller
Board of Supervisors
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* Member of Nominating/Governance Committee and
Audit Committee
** Member of Nominating/Governance Committee and
Compensation Committee
*** Effective January 1, 2017
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www.suburbanpropane.com
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It is anticipated that K-1’s will be available on our website and
mailed to each Unitholder in late February 2017.
Unitholder Information
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Transfer Agent/Unitholder Records
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