Exhibit 10.17
AMENDED AND RESTATED FERRELLGAS UNIT OPTION PLAN
SECTION 1. PURPOSE
The purposes of this Amended and Restated Ferrellgas Unit Option Plan (the
“Plan”) are to encourage selected Employees of Ferrellgas, Inc. (the “Company”)
to develop a proprietary interest in the growth and performance of Ferrellgas
Partners, L.P. (the “Partnership”), to generate an increased incentive to
contribute to the Partnership’s future success and prosperity, thus enhancing
the value of the Partnership for the benefit of its unitholders, and to enhance
the ability of the Company to attract and retain key individuals who are
essential to the progress, growth and profitability of the Partnership, by
giving such Employees the opportunity to acquire Subordinated Units.
SECTION 2. ADMINISTRATION
The Plan shall be administered by the Option Committee of the Board of Directors
of the Company (“the Board”) as designated by the Board to administer the Plan
and composed of not less than two directors of the Board, each of whom is a
“disinterested person” within the meaning of Rule 16b-3. A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee, shall be deemed the acts of the Committee.
Subject to the terms of the Plan and applicable law, the Committee shall have
the sole power, authority and discretion to: (i) designate the Employees who are
to be Participants; (ii) determine the number of Options to be granted to an
Employee; (iii) determine the terms and conditions of any Option;
(iv) interpret, construe and administer the Plan and any instrument or agreement
relating to an Option granted under the Plan; (v) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (vi) make a determination
as to the right of any Person to receive payment of (or with respect to) an
Option; and (vii) make any other determinations and take any other actions that
the Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions with respect to the Plan or
any Option granted thereunder shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons.
SECTION 3. UNITS AVAILABLE FOR OPTIONS
3.1 CALCULATION OF NUMBER OF SUBORDINATED UNITS AVAILABLE. The number of
Subordinated Units available for granting Options under the Plan shall be
850,000 Subordinated Units, subject to adjustment as provided in Section 3.3.
Further, if any Option granted under the Plan is forfeited, canceled,
surrendered, or otherwise terminates or expires without the delivery of
Subordinated Units or other consideration, then the Subordinated Units subject
to such Option shall again be available for granting Options under the Plan.

 

 

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3.2 SOURCES OF UNITS DELIVERABLE UNDER OPTIONS. Units delivered by the Company
on exercise of an Option may consist, in whole or in part, of Units acquired in
the open market or from any Person, including the Partnership. With respect to
Units to be acquired from the Partnership for delivery following an Option
exercise, the Company shall pay to the Partnership in cash the Fair Market Value
for each Unit requested to be issued (as of the date of issuance of such Unit)
and the Partnership agrees, upon receipt of such cash, to issue the Units to the
Company for such purpose. With respect to each Unit issued upon exercise of an
Option, the Company shall be entitled to reimbursement by the Partnership for
the excess, if any, of (i) the Fair Market Value of each such Unit (as of the
date of issuance of such Unit) over (ii) the exercise price of the Option
relating to such Unit.
3.3 ADJUSTMENTS. In the event that (i) any change is made to the Units issuable
under the Plan or (ii) the Partnership makes any distribution of cash, Common
Units, Subordinated Units or other property to unitholders which results from
the sale or disposition of a major asset or separate operating division of the
Partnership or any other extraordinary event and, in the judgment of the
Committee, such change or distribution would significantly dilute the rights of
Participants hereunder, then the Committee may make appropriate adjustments in
the maximum number of Units issuable under the Plan to reflect the effect of
such change or distribution upon the Partnership’s capital structure, and may
make appropriate adjustments to the number of Units subject to, and/or the
exercise price of, each outstanding Option. The adjustments determined by the
Committee shall be final, binding and conclusive.
3.4. UNITS. As used in this Plan, the term Units shall mean Subordinated Units.
Notwithstanding the foregoing however, (a) in the event that one third of the
Subordinated Units owned by the Company and/or its Affiliates are converted to
Common Units on or after August 1, 1997, pursuant to the Partnership Agreement,
then one third of the Subordinated Units issuable under the Plan, including
Units subject to Options then outstanding, shall be automatically converted to
Common Units; and (b) in the event that all of the Subordinated Units owned by
the Company and/or its Affiliates are converted into Common Units on or after
August 1, 1999, pursuant to the Partnership Agreement, (i) all references in the
Plan to Subordinated Units or Units shall be automatically changed to Common
Units (ii) all Options then outstanding shall be automatically converted into
Options with respect to Common Units and (iii) all Subordinated Units issued
upon the exercise of Options shall be automatically converted to Common Units.
SECTION 4. ELIGIBILITY
Any Employee who is not a member of the Committee shall be eligible to be a
Participant. Grants may be made to the same Employee on more than one occasion.
SECTION 5. OPTIONS
5.1 OPTION TERMS. The Committee is hereby authorized to grant Options to
Employees with the following terms and conditions and with such additional terms
and conditions, which are not inconsistent with the provisions of the Plan, as
the Committee shall determine:
(i) EXERCISE PRICE. The per Unit exercise price of an Option shall be determined
by the Committee at the date of grant.

 

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(ii) TIME AND METHOD OF VESTING OR EXERCISE, The Committee shall determine the
time or times at which an Option may become vested in whole or in part, may be
exercised in whole or in part, and the method by which payment of the exercise
price with respect thereto may be made; provided, however, no Option shall be
exercisable within six months of its date of grant. Subject to any limitations
in the Option Agreement, a Participant may purchase Units subject to the vested
and exercisable portion of an Option in whole at any time, or in part from time
to time, by delivering to the Chief Financial Officer of the Company written
notice specifying the number of Units with respect to which the Option is being
exercised, together with payment in full of the purchase price of such Units
plus any applicable federal, state or local taxes for which the Company has a
withholding obligation in connection with such purchase. Such payment shall be
payable in full in cash or by check acceptable to the Company.
(iii) TERM OF OPTIONS. The term of each Option shall be for such period as may
be determined by the Committee; provided, however, that in no event shall the
term of any Option exceed a period of 10 years from the date of its grant.
(iv) TERMINATION OF EMPLOYMENT. Options, to the extent vested as of the date the
Participant ceases to be an Employee, will remain the property of the
Participant until such Options are exercised pursuant to the Plan or expire by
their terms. Options, to the extent not vested as of the date the Participant
ceases to be an Employee, shall be automatically canceled unexercised on such
date.
(v) LIMITS ON TRANSFER OF OPTIONS. No Option or rights thereunder shall be
assignable, alienable, saleable or transferable by a Participant otherwise than
by will or by the laws of descent and distribution. Each Option shall be
exercisable during that Participant’s lifetime only by the Participant or, if
permissible under applicable law, by the Participant’s guardian or legal
representative. No Option or any rights thereunder may be pledged, alienated,
attached or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable against the
Company.
(vi) LIMITS ON TRANSFERS OF SUBORDINATED UNITS. Prior to the conversion of
Subordinated Units into Common Units, no Subordinated Units acquired upon the
exercise of an Option, or any rights thereunder, shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or by the laws
of descent and distribution. Further, no Subordinated Unit, or any rights
thereunder, may be pledged, alienated, attached or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance thereof shall be void
and unenforceable against the Partnership and each certificate evidencing such
Unit shall contain a legend reflecting such restrictions.
(vii) UNIT CERTIFICATES. Upon exercise of an Option, delivery of a certificate
for fully paid and nonassessable Units shall be made to the Person exercising
the Option either at such time during ordinary business hours after 15 days but
not more than 30 days from the date of receipt of the notice by the Company as
shall be designed in such notice, or at such time, place and manner as may be
agreed upon by the Company and the Person exercising the Option.
(viii) OPTION AGREEMENT. Each Option shall be evidenced by an Option Agreement,
which shall have such terms and provisions, not inconsistent with the Plan, that
the Committee determines.

 

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5.2 OPTION CANCELLATION RIGHTS. Notwithstanding anything in the Plan to the
contrary, the Committee shall have the discretion to cancel all or part of any
outstanding Options at any time or times. Upon any such cancellation the Company
shall pay to the Participant with respect to each Unit that is subject to the
canceled (or canceled portion of the) Option an amount in cash equal to the
excess, if any, of (i) the Fair Market Value of a Unit (at the effective date of
such cancellation) over (ii) the exercise price per Unit of such canceled
Option.
5.3 CALL OPTION. Notwithstanding anything in this Plan or any Option Agreement
to the contrary, with respect to Subordinated Units that have been issued
pursuant to the exercise of an Option, at any time or times prior to the
conversion of the Subordinated Units into Common Units, the Company may purchase
all or part of such Units by paying the holder of such Units an amount (in cash)
equal to the Fair Market Value of the Subordinated Units at such time.
SECTION 6. AMENDMENT AND TERMINATION
The Board of Directors in its discretion may terminate the Plan at any time with
respect to any Units for which a grant has not theretofore been made. The Board
of Directors shall also have the right to alter or amend the Plan or any part
thereof from time to time; provided, however, that no change in any Option
theretofore made may be made which would impair the rights of the Participant
without the consent of such Participant; and provided further, that
notwithstanding any other provision of the Plan or any Option Agreement, without
such approval, if any, as may be required pursuant to Rule 16b-3, no such
amendment or alteration shall be made that would:
(i) increase the total number of Units available for Options under the Plan,
except as provided in Section 3 hereof,
(ii) change the class of Employees eligible to receive Options;
(iii) extend the maximum period during which Options may be granted under the
Plan; or
(iv) materially increase the benefits accruing to Participants under the Plan.
SECTION 7. VESTING UPON THE OCCURRENCE OF CERTAIN EVENTS
If, prior to the date upon which all Subordinated Units have been converted to
Common Units pursuant to the Partnership Agreement, a plan of complete
dissolution of the Partnership is adopted or the unitholders approve an
agreement for the sale or disposition by the Partnership (in one transaction or
a series of transactions) of all or substantially all the Partnership’s assets
then upon such adoption or approval all or a portion (as determined by the
Committee and set forth in the related Option Agreement) of a Participant’s
Options outstanding as of the date of such adoption or approval (the “Converted
Options”) shall be converted into options to purchase Common Units (the
“Conversion Options”) with the same terms and conditions as the converted
Options, except that such Conversion Options shall be immediately and fully
vested and exercisable and may be exercised within one year from the date of
such adoption or approval, but not thereafter; provided, however, that if, on
any date during such year the Participant desires to exercise Conversion
Options, such Participant cannot exercise such Conversion Options and sell all
of the Common Units issuable upon such exercise without being subject to
liability under Section 16(b) of the 1934 Act, then the Company shall pay to
such Participant with respect to each Common Unit which would have been issuable
upon the Participant’s exercise of the Conversion Options an amount in cash
equal to the excess, if any, of (i) the Fair Market Value of a Common Unit (as
of the date of such exercise) or (ii) the exercise price per Common Unit of such
Conversion Option. The remaining unvested and/or unexercisable Options shall be
immediately cancelled unexercised and without the payment of any consideration.

 

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SECTION 8. GENERAL PROVISIONS
8.1 NO RIGHTS TO OPTIONS. No Person shall have any claim to be granted any
Option under the Plan, and there is no obligation for uniformity of treatment of
Persons under the Plan. The terms and conditions of Options need not be the same
with respect to each Participant.
8.2 WITHHOLDING. The Company shall (i) withhold from any transfer made with
respect to any Option cancellation or exercise under the Plan the amount (in
cash or Units) of withholding taxes due in respect thereof, and (ii) take such
other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes.
8.3 CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan or any Option in the manner and to the extent it shall deem desirable in
the establishment or administration of the Plan.
8.4 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the Plan
shall prevent the Partnership or the Company from adopting or continuing in
effect other or additional compensation arrangements and such arrangements may
be either generally applicable or applicable only in specific cases.
8.5 NO RIGHT TO EMPLOYMENT. The grant of an Option shall not be construed as
giving a Participant the right to be retained in the employ of the Company.
Further, the Company may at any time dismiss a Participant from employment, free
from any liability or any claim under the Plan unless otherwise expressly
provided in the Plan or in any Option Agreement.
8.6 GOVERNING LAW. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with applicable Federal law, and to the extent not preempted thereby, with the
laws of the State of Missouri.
8.7 SEVERABILITY. If any provision of the Plan or any Option is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any
person or Option, or would disqualify the Plan or any Option under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws. If it cannot be so construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Option, such provision shall be stricken as to such
jurisdiction, Person or Option and the remainder of the Plan and any such Option
shall remain in full force and effect.
8.8 NO TRUST OR FUND CREATED. Neither the Plan nor any Option shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company, the Partnership or any Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company, the Partnership or any Affiliate pursuant
to an Option, such right shall be no greater than the right of any unsecured
general creditor of the Company, the Partnership or any Affiliate.
8.9 NO FRACTIONAL UNITS. No fractional Units shall be issued or delivered
pursuant to the Plan or any Option, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Units, or whether such fractional Units or any rights thereto
shall be canceled, terminated or otherwise eliminated.
8.10 HEADINGS. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

 

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8.11 NO LIMITATION. The existence of the Plan and the grants of Options made
hereunder shall not affect in any way the right or power of the Board of
Directors of the Company or the general partner or unitholders of the
Partnership to make or authorize any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Partnership or any Affiliate, any merger or consolidation of the Partnership or
any Affiliate, any issue of debt or equity securities ahead of or affecting
Units or the rights thereof or pertaining thereto, the dissolution or
liquidation of the Partnership or any Affiliate or any sale or transfer of all
or any part of Partnership or any Affiliate’s assets or business, or any other
corporate act or proceeding.
8.12 SECURITIES LAWS. The Subordinated Units subject to Options under the Plan
are unlisted, unregistered securities to be issued by the Partnership.
Accordingly, each Option granted under the Plan shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the Units subject
to such grant upon any securities exchange or under any state or federal law, or
that the consent or approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, such grant or the issue or
purchase of Units thereunder, such grant shall be subject to the condition that
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors.
8.13 RULE 16b-3. It is intended that the Plan and any Option granted to a Person
subject to Section 16 of the Securities Exchange Act of 1934, as amended, meet
all of the requirements of Rule 16b-3. If any provision of the Plan or any such
Option would disqualify the Plan or such Option under, or would otherwise not
comply with, Rule 16b-3, such provision or Option shall be construed or deemed
amended to conform to Rule 16b-3.
8.14 INVESTMENT REPRESENTATION. Unless the Units subject to Options granted
under the Plan have been registered under the Securities Act of 1933, as amended
(the “1933 Act”), (and, in the case of any Participant who may be deemed an
affiliate (for securities law purposes) of the Company or Partnership, such
Units have been registered under the 1933 Act for resale by such Participant),
or the Partnership has determined that an exemption from registration is
available, the Partnership may require prior to and as a condition of the
issuance of any Units that the person exercising an Option hereunder furnish the
Partnership with a written representation in a form prescribed by the Committee
to the effect that such person is acquiring said Units solely with a view to
investment for his or her own account and not with a view to the resale or
distribution of all or any part thereof, and that such person will not dispose
of any of such Units otherwise than in accordance with the provisions of
Rule 144 under the 1933 Act unless and until either the Units are registered
under the 1933 Act or the Company is satisfied that an exemption from such
registration is available.
8.15 COMPLIANCE WITH SECURITIES LAWS. Anything contained herein to the contrary
notwithstanding, the Partnership shall not be obligated to sell or issue any
Units to the Company under the Plan unless and until the Partnership is
satisfied that such sale or issuance complies with (i) all applicable
requirements of the exchange on which the Units are traded (or the governing
body of the principal market in which such Units are traded, if such Units are
not then listed on an exchange), (ii) all applicable provisions of the 1933 Act,
and (iii) all other laws or regulations by which the Partnership is bound or to
which the Partnership is subject. The Company acknowledges that, as the general
partner of the Partnership, it is an affiliate of the Partnership under
securities laws and it shall comply with such laws and obligations of the
Partnership relating thereto as if they were directly applicable to the Company.

 

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SECTION 9. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective as of August 1, 1994.
SECTION 10. TERM OF THE PLAN
No Option shall be granted after the termination of the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Option Agreement,
any Option theretofore granted may extend beyond such date, and any authority of
the Committee to amend, alter, suspend, discontinue or terminate any such
Option, or to waive any conditions or rights under any such Option, and the
authority of the Board of Directors to cancel the Option pursuant to
Section 5.2, shall extend beyond such date.
SECTION 11. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth
below:

(a)  
“Affiliate” shall mean (i) the Partnership, (ii) the Company, and (iii) any
entity in which the Partnership owns, directly or indirectly, more than 50% of
the beneficial interests.
  (b)  
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
  (c)  
“Common Units” shall mean the limited partnership interests in the Partnership
represented by Common Units as set forth in the Partnership Agreement and
described in the Registration Statement.
  (d)  
“Employee” shall mean any employee of the Company or any Affiliate.
  (e)  
“Fair Market Value” shall mean, at any specified time, with respect to a
Subordinated Unit, an amount equal to (i) 80% of the value of a Common Unit at
such time (determined on the basis of the average closing price of a Common Unit
on the New York Stock Exchange for the 20 trading days immediately preceding
such determination); or (2) if the Committee, in its discretion, has the value
of a Subordinated Unit determined by an independent appraisal, the value as
determined by such appraisal, if lower than the above formula value in (i).
However, upon the conversion of the Subordinated Units into Common Units, Fair
Market Value shall mean the value of a Common Unit, as determined by the
Committee.
  (f)  
“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.
  (g)  
“Option” shall mean a right granted under the Plan to purchase Units under the
Plan.
  (h)  
“Participant” shall mean an Employee granted an Option under the Plan.
  (i)  
“Partnership Agreement” shall mean the Agreement of Limited Partnership of
Ferrellgas Partners, L.P., dated as of July 5, 1994, as amended from time to
time.

 

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(j)  
“Person” shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization or government or
political subdivision thereof.
  (k)  
“Registration Statement” shall mean the Registration Statement on Form S-1 of
Ferrellgas Partners, L.P., Commission File No. 33-53383.
  (l)  
“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange
Commission under the 1934 Act.
  (m)  
“Subordinated Units” shall mean the limited partnership interests in the
Partnership represented by Subordinated Units as set forth in the Partnership
Agreement and described in the Registration Statement for the securities of the
Partnership.

 

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