Document:

EMPLOYMENT, CONFIDENTIALITY, AND NONCOMPETE AGREEMENT

                  This  Employment,  Confidentiality,  and Noncompete  Agreement
("Agreement")  is made and entered into this ____ day of  ____________,  2000 by
and between  Ferrellgas,  Inc.,  a Delaware  corporation  ("FGI") and Patrick J.
Chesterman (the "Executive").

                  WHEREAS,  FGI  serves as the  general  partner  of  Ferrellgas
Partners,  L.P., a Delaware  limited  partnership  ("Ferrellgas  Partners")  and
Ferrellgas, L.P., a Delaware limited partnership ("Ferrellgas",  and referred to
herein jointly and severally with Ferrellgas  Partners as the  "Partnership"  or
"Partnerships"  as the context so requires),  which are engaged primarily in the
sale,  distribution  and marketing of propane and other natural gas liquids (the
"Business").

                  WHEREAS, FGI, through the Partnerships,  conducts the Business
throughout the United States.

                  WHEREAS,  FGI, through the Partnerships,  has expended a great
deal of time, money, and effort to develop and maintain proprietary Confidential
Information (as defined below) which, if misused or disclosed,  could be harmful
to the Business.

                  WHEREAS,  the success of FGI depends to a  substantial  extent
upon the protection of the Confidential Information and customer goodwill by all
of its employees and the employees of the Partnerships.

                  WHEREAS,  the  Executive  desires  to be  employed  by  FGI as
Executive Vice President and Chief Operating Officer.

                  WHEREAS,  the  Executive  desires  to be  eligible  for  other
opportunities within FGI and/or compensation increases which otherwise would not
be  available  to  the  Executive  and  to  be  given  access  to   Confidential
Information, of FGI and the Partnerships which is necessary for the Executive to
perform his duties,  but which FGI would not make available to the Executive but
for the Executive's signing and agreeing to abide by the terms of this Agreement
as a condition of the Executive's employment and continued employment with FGI.

                  WHEREAS,  the Executive  recognizes and acknowledges  that the
Executive's  position with FGI has provided  and/or will continue to provide the
Executive with access to Confidential Information of FGI and the Partnerships.

                  NOW, THEREFORE, in consideration of the compensation and other
benefits of the Executive's employment by FGI and the recitals, mutual covenants
and agreements  hereinbefore  and hereinafter  set forth,  the Executive and FGI
agree as follows:

1. Term.  The  Executive  is hereby  employed by FGI, and the  Executive  hereby
accepts such  employment  upon the terms and  conditions  set forth herein.  The
Executive's  term of employment  under this  Agreement  shall be for a period of
three (3) years,  commencing on June 13, 2000,  and shall  continue for a period
through and  including  June 13, 2003 (the  "Initial  Period"),  unless  earlier
terminated   pursuant   to  the  terms  and   conditions   of  this   Agreement.
Notwithstanding  anything herein to the contrary, this Agreement and the term of
employment,  unless either FGI or the Executive  provides six (6) months written
notice  to the other  party  hereto  that the  Agreement  shall  not renew  upon
expiration of the then current  employment period and, subject to Sections 8 and
9, shall be automatically  renewed for one year successive periods following the
Initial Period (each a "Successive Period" and together with the Initial Period,
the "Employment Period").

2. Duties and  Responsibilities.  During the  Employment  Period,  the Executive
shall be employed as Executive  Vice  President and Chief  Operating  Officer of
FGI, with such duties and  responsibilities as are customarily  incident to such
offices and as set forth on the Retail Chief  Operating  Officer Job Profile and
Expectations  previously provided to the Executive,  a copy of which is attached
hereto and incorporated by reference.  The precise services of the Executive may
be  extended  or  curtailed  at the  discretion  of FGI,  so long as after  such
extension or  curtailment,  the duties of the Executive are consistent  with the
duties normally attendant to the aforesaid  offices.  The Executive will perform
his duties in a diligent,  trustworthy, loyal, and business-like manner, all for
the purpose of advancing the Business.

3. Performance of Services.  During the Employment  Period,  the Executive shall
devote his primary  time,  attention  and energies to the Business and shall not
during such time be substantially engaged in any other business activity whether
or not such business  activity is pursued for gain,  profit,  or other pecuniary
advantage;  provided,  however,  that  nothing  herein  shall  be  construed  as
preventing  the Executive  (i) from being  involved in civic,  philanthropic  or
community  service  activities,  from  participating  in  other  businesses  and
receiving  compensation  therefore,  to the  extent  that such  involvement  and
participation  does  not  involve  management  or  participation  in  day-to-day
activities thereof and does not detract from the performance by the Executive of
his duties to FGI pursuant hereto; provided, further, that at the request of the
Chief Executive  Officer of FGI, the Executive  shall disclose such  involvement
therein,  or (ii) from  investing  his assets in such form or manner as will not
require any  appreciable  services on the part of the Executive in the operation
of the affairs of any entity in which such investments are made, so long as such
activities  do not  substantially  interfere  or conflict  with the  Executive's
discharge of his duties and responsibilities  hereunder. The Executive agrees to
follow and act in accordance with all of the rules,  policies, and procedures of
FGI.

4.       Compensation.

(a)      During the Employment Period, Executive's base salary shall be not less
         than $285,000 per year ("Base Salary"), payable in regular installments
         in accordance with FGI's usual payroll  practices and subject to review
         and increase  consistent  with  practices of FGI in effect from time to
         time  during  the  Employment   Period,   but  shall  not  be  reduced.
         Executive's  Base  Salary  shall  be  reviewed  annually  by the  Chief
         Executive   Officer  of  FGI  with  the  advice  and   consent  of  the
         compensation committee.

(b)      Performance Bonus. During the Employment Period, the Executive shall be
         entitled  to an annual  bonus as set  forth  below  (collectively,  the
         "Performance Bonus"):

                                      (i) A percentage  of the Base Salary based
                             on Ferrellgas Partners achieving certain reasonably
                             budgeted EBITDA (as defined below)  targets,  which
                             budgeted EBITDA shall be approved at least annually
                             by the Board of  Directors  of FGI,  calculated  as
                             follows:

                             Actual to                           Bonus as a
                             Budgeted EBITDA                    % of Base Salary
                             ---------------                    ----------------
                             Less than 90%                         0.0%
                             90%                                   15.0%
                             91%                                   17.0%
                             92%                                   19.0%
                             93%                                   21.0%
                             94%                                   23.0%
                             95%                                   25.0%
                             96%                                   27.5%
                             97%                                   30.0%
                             98%                                   32.5%
                             99%                                   35.0%
                             100%                                  37.5%

                                      (ii) In the event  actual  EBITDA  exceeds
                             100% of  budgeted  EBITDA,  the  performance  bonus
                             provided  above  will  be  increased  1%  (of  Base
                             Salary) for each 1% over budgeted EBITDA.

     (c) A  discretionary  bonus  of up to  37.5% of base pay may be paid in the
sole discretion of the CEO of FGI, based on core objective  accomplishments each
year, as from time to time amended.

     (d) "EBITDA" means,  for any period,  consolidated net income of Ferrellgas
Partners
and its subsidiaries determined in accordance with generally accepted accounting
principles  plus (i)  provisions  for taxes  based on income or  profits  to the
extent  included  in  computing  such   consolidated   net  income,   plus  (ii)
consolidated  interest expense (including  deferred financing fees and expenses)
and other  expenses in respect of  indebtedness  of Ferrellgas  Partners and its
subsidiaries for such period, whether paid or accrued or otherwise allocated, to
the extent any such  expense was  deducted in computing  such  consolidated  net
income,  plus (iii)  depreciation,  amortization and other non-cash  expenses of
Ferrellgas  Partners and its  subsidiaries  for such period  (excluding any such
non-cash  expenses  to the extent it  represents  an accrual or reserve for cash
expenses in any future period or  amortization of a prepaid cash expense paid in
a prior  period) to the extent any such expense was  deducted in computing  such
consolidated net income,  and plus (vii) any non-cash  employee  compensation or
benefit  expenses to the extent that such  expenses  were  deducted in computing
consolidated net income for such period.

     (e) There  shall be a cap of 80% of Base  Salary  applied  to all  payments
under Section 4(b)(i), 4(b)(ii) and 4(c).

     (f) For FGI's fiscal year ending July 31, 2001,  EBITDA shall be the sum of
Retail plus  Houston,  as the  Executive  will have  substantial  oversight  and
training  responsibilities  for  hiring and  training  the  Executive's  Houston
replacement.   For  years  after  fiscal  year  ending  July  31,  2001,  EBITDA
performance shall be Retail only.

                  (g) For fiscal year ending July 31, 2001,  notwithstanding the
above, a guaranteed minimum bonus of $100,000 shall be payable.

     (h) During the Employment  Period,  the Performance  Bonus shall be payable
within fifteen (15) calendar days following  receipt by Ferrellgas  Partners' of
its audited  financial  statements  as long as the Executive is employed the day
payment is to be made; provided,  however, that notwithstanding  anything herein
to the contrary, the Executive's entitlement to and calculation and payment of a
Performance  Bonus for the fiscal year ended July 31,  2000 shall be  determined
pursuant to his bonus arrangement in effect for his previous position.

<PAGE>

5. Benefit Plans. During the Employment Period and as otherwise provided herein,
the Executive  shall be entitled to participate in any and all employee  welfare
and health benefit plans (including,  but not limited to life insurance,  health
and medical,  dental,  and disability  plans) and other  employee  benefit plans
(including,  but not limited to qualified  pension plans and Ferrell  Companies,
Inc.  ("FCI") stock incentive  plans),  established by FGI from time to time for
the benefit of executive  employees of FGI. The  Executive  shall be required to
comply with the conditions  attendant to  participation  in and coverage by such
plans and shall comply with and, except as otherwise  provided herein,  shall be
entitled to benefits  only in accordance  with the terms and  conditions of such
plans as they may be amended from time to time.  Nothing herein  contained shall
be construed as requiring  FGI to establish or continue any  particular  benefit
plan in discharge of its obligations under this Agreement.

6.       Other Benefits and Reimbursements.

(a)      During the Employment  Period,  the Executive  shall be entitled to not
         less than four (4) weeks of paid vacation  each year of his  employment
         hereunder,  which  shall  accumulate  if not  used in any  given  year.
         Pursuant to the provisions of this Agreement,  vacation time earned but
         unused  shall  be  paid  to the  Executive  upon  termination  of  this
         Agreement.

     (b) During the Employment  Period,  the Executive shall be entitled to such
other employment  benefits  extended or provided to other key executives of FGI,
including, but not limited to, payment or reimbursement of all business expenses
incurred by the Executive in the performance of his duties and other job related
activities set forth in this Agreement or subsequently  agreed to by the parties
and in the promotion of the Business in accordance  with FGI customary  policies
and  procedures.  The Executive  shall submit to FGI periodic  statements of all
expenses  so  incurred.  Subject to such audits as FGI may deem  necessary,  FGI
shall  reimburse the Executive the full amount of any such expenses  advanced by
him in the ordinary course of business.

7.   Deductions   from  Salary  and  Benefits.   FGI  shall  withhold  from  any
compensation,  bonus or benefits payable to the Executive all customary federal,
state, local and other withholdings,  including, without limitation, federal and
state withholding taxes, social security taxes and state disability insurance.

8.  Termination  by FGI. FGI may  terminate  Executive's  employment  under this
Agreement  upon at least sixty (60)  calendar  days  ("Notice  Period")  written
notice  ("Notice")  to the  Executive  of its  intent to  terminate  Executive's
employment:

     (a) without Cause (as defined in subsection  8(b) below).  The Notice shall
specify that such  Termination is without Cause,  and upon the expiration of the
Notice Period,  FGI shall,  on the condition  that Executive  executes a general
release of claims on terms customarily and normally used by FGI at the time, (i)
pay the  Executive  in a lump sum an amount equal to twice his then current Base
Salary,  (ii) provide to the Executive medical  insurance,  on the same basis on
which he is receiving  such insurance at the time of  termination,  for a period
ending  the  earlier  of two (2)  years  from  the date of  termination  of this
Agreement or the date Executive is covered by another  medical plan at a cost to
the Executive  equal to the amount that would have been charged to the Executive
in  accordance  with the terms of this  Agreement,  and (iii) an amount equal to
$75,000 for  relocation  expenses (the payment or provision of the items in this
Section 8(a) are referred to in this Agreement as the "Executive Payments");

     (b) for Cause (as defined below).  The Notice shall specify the particulars
of such Cause and shall  afford the  Executive  an  opportunity  to discuss  the
particulars  of such Cause with the Chief  Executive  Officer of FGI and to cure
such Cause. If such Cause shall not be cured accordingly, Executive's employment
shall terminate upon  expiration of the Notice Period and no compensation  shall
be due to the Executive beyond the date of such termination (other than pursuant
to pension or other plans which by their terms provide  payments beyond the date
of termination in such circumstances,  including but not limited to, the Ferrell
Companies Inc.  Employee Stock  Ownership  Plan,  FGI's  non-qualified  deferred
compensation  plan,  the FCI  Nonqualified  Stock Option  Agreement and vacation
earned but not taken ("collectively,  the "FGI Benefit Plans")). For purposes of
this Agreement  "Cause" means:  (i) the conviction of Executive by a ----- court
of competent jurisdiction of, or entry of a plea of nolo contendere with respect
to, a felony or ----  ----------  any other  crime,  which other crime  involves
fraud,  dishonesty  or moral  turpitude  which  materially  interferes  with the
performance of Executive's  duties,  responsibilities  or obligations under this
Agreement;  (ii) fraud or embezzlement related to FGI or the Partnerships on the
part of Executive;  (iii) Executive's  chronic abuse of or dependency on alcohol
or drugs (illicit or otherwise) which materially interferes with the performance
of Executive's  duties,  responsibilities  or obligations  under this Agreement;
(iv) the  material  breach by  Executive of any of Sections 16, 17 or 18 hereof,
except  as  permitted  pursuant  to  Section  12  hereof;  (v) any act of  moral
turpitude or willful  misconduct by Executive  which (A) results in  substantial
personal  enrichment of the Executive at the expense of FGI or the Partnerships,
or (B) is reasonably  expected to have a material adverse impact on the Business
or  reputation  of FGI;  (vi) gross and willful  neglect of material  duties and
responsibilities  of the Executive pursuant hereto, or an intentional  violation
of a material  term of this  Agreement;  or (vii) any material  violation of any
statutory or common law fiduciary duty of Executive to FGI or the  Partnerships;
or (viii) willful failure by the Executive to comply with a material FGI policy,
which  results in a material,  adverse  impact on the  Business,  as  reasonably
determined  by the  Chief  Executive  Officer  of FGI,  or (ix)  repeated  gross
insubordination.

9.  Termination  by the  Executive.  The Executive may terminate his  employment
under this Agreement upon at least thirty (30) calendar days' ("Executive Notice
Period") written notice ("Executive Notice") to FGI of such termination:

(a)      without  Executive  Cause (as defined  below),  upon  expiration of the
         Executive  Notice Period,  in which event no compensation  shall be due
         him beyond the date of such termination  other than pursuant to the FGI
         Benefit Plans; or

     (b) for Executive Cause. The Executive Notice shall specify the particulars
of such Executive  Cause and during the Executive  Notice Period,  the Executive
shall  afford  the  Chief  Executive  Officer  an  opportunity  to  discuss  the
particulars  of such  Executive  Cause  with  the  Executive  and to  cure  such
Executive Cause to the satisfaction of the Executive during the Executive Notice
Period.  If such  Executive  Cause shall not be cured  accordingly,  Executive's
employment  shall terminate upon expiration of the Executive  Notice Period.  In
all events, Executive shall be paid all payments and benefits due him during the
Employment  Period,  and FGI shall pay the Executive in a lump sum or provide to
the  Executive,  as  applicable,  the Executive  Payments on the condition  that
Executive executes a general release of claims on terms customarily and normally
used by FGI at the time.  "Executive  Cause"  means any  ---------------  of the
following to which the Executive does not agree: (i) assignment to the Executive
of  duties  or  responsibilities,  or  the  material  diminution  of  duties  or
responsibilities,   that   are   inconsistent   with   his   position,   duties,
responsibilities or status as they exist at the commencement of the term of this
Agreement;  (ii)  material  change  in  the  reporting  responsibilities  of the
Executive; provided, however, that, notwithstanding the effect of changes on the
Board under  Section 12 hereof,  changes in the identity of persons on the Board
shall not be considered a change in reporting  responsibilities  for purposes of
this Section,  (iii)  relocation of the Executive's  physical office or of FGI's
corporate  offices  to a site  beyond a fifty  (50) mile  radius of its  current
location of One Liberty Plaza, Liberty,  Missouri;  (iv) failure by any of FGI's
successors in interest to assume this Agreement in writing  simultaneously  with
becoming a successor in interest;  (v) failure of FGI to maintain Director's and
Officer's  insurance;  or, (vi) a breach of any  provision of this  Agreement by
FGI.

10. Nondisparagement.  During the term of this Agreement and for a period of two
(2) years after it is terminated,  for whatever reason, Executive agrees that he
will not make any  statements  or  provide  any  information  that would tend to
disparage, defame or denigrate FGI, its affiliates,  related entities and any of
its or their former or current officers, directors, agents or employees.

11. Cooperation. In the event that FGI or any of its affiliates becomes involved
in any civil or criminal litigation,  administrative  proceeding or governmental
investigation, Executive shall, upon request, provide reasonable cooperation and
assistance  to  FGI,   including   without   limitation,   furnishing   relevant
information, attending meetings and providing statements and testimony. FGI will
reimburse  Executive  for all  reasonable  and  necessary  expenses he incurs in
complying with this Section 11. In addition, at any time more than two (2) years
after the  termination  of this  Agreement  for any reason,  Executive  need not
comply  with this  Section 11 unless  FGI has  agreed in  writing  to  reimburse
Executive's employer, if applicable, or to reimburse Executive if self-employed,
for Executive's time at a rate agreed to by the applicable parties.

12.      Effect of Certain Transactions; Change in Control.

     (a) In the event of a Change in Control (as hereinafter  defined) FGI shall
pay the Executive, not later than thirty (30) calendar days after such Change in
Control,  a lump cash sum equal to the  greater  of (A) two and  one-half  (2.5)
times 125% of his then current Base Salary,  or (B) two and one-half (2.5) times
the average actual cash  compensation  (including,  but not limited to, bonuses)
paid for the prior three (3) fiscal years prior to such Change in Control.  Such
payment  shall reduce any lump sum Executive  Payments  payable to the Executive
under Sections 8 or 9. In addition, if the Executive's  employment is terminated
pursuant to Section 8(a) or 9(b) within  eighteen  (18) months after such Change
in  Control,  (i) FGI shall pay the  Executive  for any  vacation  earned by the
Executive but not taken and any other amounts earned but unpaid,  (ii) FGI shall
pay the Executive a pro rata portion (such  proration shall be on the basis that
the number of months of his  employment  during FGI's then  current  fiscal year
bears to the number 12,  considering the month of termination as a month of full
employment,  and in the  case  of  any  plan  measured  over a full  year,  such
determination  and  payment  shall be made  after  the close of such year of any
amounts  to which he would  have  otherwise  been  entitled  under  any  Company
perquisite to which Executive is a participant  (excluding any bonus), and (iii)
FGI shall continue the Executive's health,  accident and life insurance benefits
at FGI's cost on the same basis on which he is  receiving  such  benefits at the
time of  termination,  until the earlier of the COBRA  period of  eighteen  (18)
months after the month in which such  termination  occurs or  Executive  obtains
coverage under another plan or comparable coverage.  For purposes of calculating
any bonus to be paid to the Executive pursuant to this Section 12, the Executive
shall be entitled to the payment of any bonus normally calculated with reference
to a future  period based upon the total amount paid for such bonus in the three
(3) previous fiscal years.

(b) For  purposes of this  Agreement  a "Change In  Control"  shall be deemed to
occur if:

     (i) FGI or FCI (FGI and FCI  will  hereinafter  be  jointly  and  severally
referred to as "Company" or the -------  "Companies" as the context so requires)
or either  Partnership  merges with or is  consolidated  ---------- into another
corporation or other entity not  theretofore  affiliated  with either Company or
Partnership  (i.e.,  controlled by, controlling or under common control with the
Companies or the Partnerships,  as applicable) and the Company or Partnership so
merging or  consolidating is not the surviving entity pursuant to such merger or
consolidation (other than a transaction in which the persons who were the equity
owners  of the  Company  or  Partnership  so  merging  own more  than 50% of the
surviving entity);

(ii)              All or  substantially  all of the assets of either  Company or
                  Partnership  are  acquired  by  another  corporation  or other
                  entity  not  theretofore  affiliated  with  either  Company or
                  Partnership  in a single  transaction  or a series of  related
                  transactions,  and a  majority  of the then  current  Board of
                  Directors of neither  Company does not control the entity that
                  has made such acquisition;

(iii)             There is consummated any transaction or series of transactions
                  or any event or series of events,  the result of which is that
                  FGI  is  no  longer  the  sole   general   partner  of  either
                  Partnership;

(iv)              There is consummated any transaction or series of transactions
                  or any event or series of events,  the result of which is that
                  the  Board  of FGI does not have  control  of the  affairs  of
                  either Partnership;

(v)               There is  consummated a purchase or other  acquisition  by any
                  persons,  entity or group of  persons,  within the  meaning of
                  Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
                  as amended (the "Exchange Act") (excluding,  for this purpose,
                  either  Company or its  subsidiaries  or any employee  benefit
                  plan of either Company or its subsidiaries), of the beneficial
                  ownership  (within the meaning of Rule 13d-3 promulgated under
                  the   Exchange   Act)   of  50%  or   more   of   either   the
                  then-outstanding   equity  securities  of  either  Company  or
                  Partnership or the combined  voting power of either  Company's
                  or Partnership's then-outstanding voting securities;

     (vi) Individuals who, as of the date hereof, constitute the Board of either
Company (as the date hereof,  the  "Incumbent  Boards")  cease for any reason to
constitute  at least a  majority  of the  Boards,  provided  that any person who
becomes a director  subsequent to the date hereof whose election,  or nomination
for election by either  Company's  equity  owners,  was approved by a vote of at
least a majority of the directors  then  comprising  the Incumbent  Board (other
than an individual  whose initial  assumption of office is in connection with an
actual or threatened  election  contest relating to the election of directors of
either  Company,  as such  terms  are  used in Rule  14a-11  of  Regulation  14A
promulgated  under the  Exchange  Act) shall be, for  purposes of this  section,
considered  as though  such  person  were a member of the  applicable  Incumbent
Board;

(vii)             There   is   consummated   a    reorganization,    merger   or
                  consolidation,  in each case with respect to which persons who
                  were the  equity  holders  of either  Company  or  Partnership
                  immediately   prior   to  such   reorganization,   merger   or
                  consolidation do not,  immediately  thereafter,  own more than
                  50% of,  respectively,  the equity securities and the combined
                  voting power  entitled to vote  generally in the  elections of
                  directors   or   managers  of  the   reorganized,   merged  or
                  consolidated entity's then-outstanding voting securities;

(viii)            There is a liquidation  or  dissolution  of either  Company or
                  Partnership (other than a liquidation or dissolution where the
                  equity owners of the surviving  Company or  Partnership do not
                  change)  or of the  sale  of all or  substantially  all of the
                  assets of either Company or Partnership;

(ix)              There is  consummated a public sale of a "material"  amount of
                  FCI's  equity  (with   materiality  being  determined  by  the
                  Committee  administering  the Ferrell  Companies Inc. Employee
                  Stock Ownership Trust ("ESOT"),  but with a material amount of
                  such equity being at least 50% thereof).

13.  Mitigation  or Reduction of  Benefits.  Executive  shall not be required to
mitigate  or reduce the amount of any  payment  upon  termination  provided  for
herein by  seeking  other  employment  or  otherwise  nor,  except as  otherwise
specifically  set forth  herein,  shall the amount of any  payment  or  benefits
provided upon  termination be reduced by any  compensation or other amounts paid
to or earned by Executive as the result of employment by another  employer after
such termination or otherwise.

14.      Certain Additional Payments by FGI.

     (a)  Notwithstanding  anything in this Agreement to the contrary and except
as set  forth  below,  in the  event it shall be  determined  that any  payment,
benefit or distribution  (or contribution  thereof) from FGI, any affiliate,  or
trusts established by FGI or by any affiliate, for the benefit of its employees,
to the  Executive or for the  Executive's  benefit  (whether  paid or payable or
distributed  or  distributable  pursuant  to the  terms  of  this  Agreement  or
otherwise,  but determined  without regard to any additional  payments  required
under this Section,  and with a "Payment"  including,  without  limitation,  the
vesting of an option or other  non-cash  benefit or property)  (any of which are
referred  to as a  "Payment")  would be subject  to the  excise  tax  imposed by
Section 4999 of the Internal  Revenue Code of 1986, as amended (the "Code"),  or
any interest or penalties  are  incurred by the  Executive  with respect to such
excise  tax  (such  -----  excise  tax,  together  with  any such  interest  and
penalties,  are hereinafter  collectively referred to as the "Excise Tax"), then
the Executive  shall be entitled to receive an  additional  payment (a "Gross-Up
----------  ---------  Payment")  in an amount  such that  after  payment by the
Executive of all taxes (including any interest or ------- penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up  Payment,  the Executive  retains an amount of the Gross-Up Payment
equal to the sum of (i) the Excise Tax imposed upon the  Payments;  plus (ii) an
amount  equal to the  product of any  deductions  disallowed  to  Executive  for
federal,  state, or local income tax purposes solely because of the inclusion of
the Gross-up Payment in the Executive's  adjusted gross income multiplied by the
highest  applicable  marginal rate of federal,  state, or local income taxation,
respectively, for the calendar year in which the Gross-up Payment is to be made.

     (b) Subject to the provisions of Section 14(c), all determinations required
to be made under this Section 14, including  whether and when a Gross-Up Payment
is required and the amount of such Gross-Up  Payment and the  assumptions  to be
utilized  in  arriving  at such  determination,  shall  be made by a  nationally
recognized  certified  public  accounting  firm  as  may  be  designated  by the
Executive  (the  "Accounting  Firm")  which shall  provide  detailed  supporting
calculations both to FGI and the Executive  ---------------- within fifteen (15)
business days of the receipt of notice from the Executive  that there has been a
Payment,  or such  earlier  time as is  requested  by FGI. In the event that the
Accounting Firm is serving as accountant or auditor for the  individual,  entity
or group  effecting a Change of Control,  the Executive  shall  appoint  another
nationally  recognized  accounting  firm to  make  the  determinations  required
hereunder  (which  accounting  firm shall then be referred to as the  Accounting
Firm  hereunder).  All fees and expenses of the  Accounting  Firm shall be borne
solely by FGI. Any Gross-Up Payment,  as determined pursuant to this Section 14,
shall  be paid by FGI to the  Executive  within  five (5)  calendar  days of the
receipt  of  the  Accounting  Firm's  determination.  Any  determination  by the
Accounting Firm shall be binding upon FGI and the Executive.  As a result of the
uncertainty  in the  application  of Section 4999 of the Code at the time of the
initial  determination  by the Accounting  Firm  hereunder,  it is possible that
Gross-Up  Payments  which will not have been made by FGI  should  have been made
("Underpayment"),   consistent  with  the  calculations   required  to  be  made
hereunder.  In the event that FGI --------------  exhausts its remedies pursuant
to Section 14(c) and the  Executive  thereafter is required to make a payment of
any  Excise  Tax,  the  Accounting  Firm  shall  determine  the  amount  of  the
Underpayment that has occurred and any such Underpayment  shall be promptly paid
by FGI to or for the benefit of the Executive.

     (c) The Executive  shall notify FGI in writing of any claim by the Internal
Revenue  Service  that, if  successful,  would require the payment by FGI of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no
later than thirty (30)  business days after the Executive is informed in writing
of such claim and shall  apprise FGI of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim
prior to the  expiration  of the 30-day  period  following the date on which the
Executive  gives such notice to FGI (or such shorter  period  ending on the date
that any payment of taxes with  respect to such claim is due).  If FGI  notifies
the Executive in writing prior to the  expiration of such period that it desires
to contest such claim, the Executive shall:

     (i) give FGI any information  reasonably  requested by FGI relating to such
claim,

(ii)              take such action in connection  with  contesting such claim as
                  FGI shall  reasonably  request in  writing  from time to time,
                  including, without limitation,  accepting legal representation
                  with respect to such claim by an attorney  reasonably selected
                  by FGI,

(iii)  cooperate  with FGI in good faith in order to  effectively  contest  such
claim, and

(iv)     permit FGI to participate in any proceedings relating to such claim;

         provided,  however,  that FGI shall bear and pay directly all costs and
         expenses  (including  attorneys' fees and costs and additional interest
         and  penalties)  incurred  in  connection  with such  contest and shall
         indemnify and hold the Executive  harmless,  on an after-tax basis, for
         any Excise Tax or income tax  (including  interest and  penalties  with
         respect thereto) imposed as a result of such representation and payment
         of costs and expenses.  Without limitation on the foregoing  provisions
         of this  Section  14(c),  FGI shall  control all  proceedings  taken in
         connection  with such contest  and, at its sole  option,  may pursue or
         forgo any and all  administrative  appeals,  proceedings,  hearings and
         conferences with the taxing authority in respect of such claim and may,
         at its sole option,  either direct the Executive to pay the tax claimed
         and sue for a refund or contest  the claim in any  permissible  manner,
         and the Executive  agrees to prosecute such contest to a  determination
         before any administrative  tribunal, in a court of initial jurisdiction
         and in one or more appellate courts, as FGI shall determine;  provided,
         however,  that if FGI directs the  Executive  to pay such claim and sue
         for a refund,  FGI shall  advance  the  amount of such  payment  to the
         Executive,  on an  interest-free  basis  and shall  indemnify  and hold
         Executive  harmless,  on an  after-tax  basis,  from any  Excise Tax or
         income tax  (including  interest or  penalties  with  respect  thereto)
         imposed  with  respect to such  advance or with  respect to any imputed
         income with  respect to such  advance;  and further  provided  that any
         extension  of the statute of  limitations  relating to payment of taxes
         for the  taxable  year of the  Executive  with  respect  to which  such
         contested  amount  is  claimed  to be due is  limited  solely  to  such
         contested  amount.  Furthermore,  FGI's control of the contest shall be
         limited to issues  with  respect to which a Gross-Up  Payment  would be
         payable  hereunder  and the  Executive  shall be  entitled to settle or
         contest,  as the case may be, any other  issue  raised by the  Internal
         Revenue Service or any other taxing authority.

                           If,  after the receipt by the  Executive of an amount
         advanced  by FGI  pursuant  to Section  14(c),  the  Executive  becomes
         entitled  to  receive  any  refund  with  respect  to such  claim,  the
         Executive  shall (subject to FGI's  complying with the  requirements of
         Section 14(c)) promptly pay to FGI the amount of such refund  (together
         with any  interest  paid or credited  thereon  after  taxes  applicable
         thereto).  If, after the receipt by the Executive of an amount advanced
         by FGI  pursuant to Section  14(c),  a  determination  is made that the
         Executive  shall not be  entitled  to any refund  with  respect to such
         claim and FGI does not notify the Executive in writing of its intent to
         contest  such denial of refund prior to the  expiration  of thirty (30)
         calendar  days after such  determination,  then such  advance  shall be
         forgiven  and shall not be required to be repaid and the amount of such
         advance shall  offset,  to the extent  thereof,  the amount of Gross-Up
         Payment required to be paid.

<PAGE>

15.    Indemnification.    Executive   has   executed   on   _______________   a
Director/Officer Indemnification Agreement which agreement controls the terms of
indemnification between the parties.

<PAGE>

16.      Confidential Information.

(a)      In connection with Executive's employment, FGI will disclose and/or has
         disclosed  to  Executive  certain  Confidential   Information  (defined
         below).  The Confidential  Information is not generally known to others
         and could have  economic  value if disclosed  to others  and/or used by
         Executive,  directly  or  indirectly,  in  competition  with FGI or the
         Partnerships.  Further, Executive will in the future participate in the
         development  of,  have  access  to,  or use in  performing  Executive's
         employment  duties,  some or all of the Confidential  Information.  FGI
         makes reasonable  efforts to keep its Confidential  Information  secret
         and  confidential,  and  Executive  has a duty to keep  it  secret  and
         confidential.

(b)      Executive may have significant contacts with the customers and accounts
         of  FGI  and/or  be  provided  with  FGI's  confidential  customer  and
         customer-related   information,   including   various  customer  lists,
         analyses,  and summaries.  These contacts and/or this information could
         enable  Executive,  at FGI's  expense,  to have access to and establish
         favorable relations with, and put Executive in a position to influence,
         FGI's customers and accounts.

(c)      FGI's customer lists and customer  information  are trade secrets,  and
         this Agreement is intended,  among other things, to protect FGI's trade
         secrets,  customer relationships,  customer goodwill and other business
         interests.

(d)      The Executive will not use or reveal Confidential Information to anyone
         other than for on or behalf of FGI both  during  and after  Executive's
         employment.

(e) Executive shall keep all Confidential Information secret and confidential.

(f)      Executive  shall  return to FGI all  Confidential  Information  and all
         property of FGI immediately upon termination of Executive's  employment
         for any reason and also at any time upon FGI's request.

     (g)  "Confidential  Information"  shall mean: (i) Company  Information  (as
defined below);  (ii) Customer  Information  (as defined  below);  and (iii) all
other  information,   whether  or  not  reduced  to  writing,  relating  to  the
Partnerships,  the Business or FGI's customers which gives FGI an advantage over
competitors  who do not  know or use  it,  have  not  compiled  the  information
themselves, or is otherwise not generally known in the industry,  including, but
not limited to, trade secrets,  proprietary  information,  customer lists, route
books,  inventions,  computer programs and software,  and including  information
conceived,  originated,  or developed  by  Executive.  Confidential  Information
includes,  but is  not  limited  to,  originals  and  copies  of  all  materials
containing  such  information,  regardless  of the  media  used to  record  such
information, including but not limited to computers, computer disks, CD ROMS, or
other electronic media, microfiche or microfilm.

(h)      "Company  Information" shall mean:  Information that FGI, the Companies
         or the Partnerships have developed,  acquired,  organized,  compiled or
         maintained  regarding FGI's  products,  services,  processes,  methods,
         operations,  proposals,  projects,  contracts,  bids,  pricing,  costs,
         profitability, marketing plans and strategies, revenues and finances to
         the extent  not  subject to public  disclosure  requirements,  business
         relationships,  correspondence,  and  other  matters  related  to FGI's
         development and operation of the Business.

(i)      "Customer   Information"  shall  mean:  Information  that  FGI  or  the
         Partnerships  have  developed,   acquired,   organized,   compiled,  or
         maintained  by FGI  regarding  FGI's  customers,  former  customers and
         prospective  customers  while  developing  and  operating the Business,
         including,  but not limited to, information relating to their identity,
         location,  personnel,  usage of petroleum  products,  and incidental or
         related  appliances,  equipment  and supplies,  purchasing  experience,
         delivery  schedules and routing,  payment  habits,  credit  experience,
         ownership of storage facilities, contract renewal and expiration dates,
         pricing,  and other terms and conditions  contained in their  contracts
         with FGI or its predecessors.

17. Inventions and Patents.  Executive agrees that all inventions,  innovations,
improvements,  developments,  methods, designs, analyses, drawings, reports, and
all similar or related  information  which relates to the  Companies'  actual or
anticipated  business (to the extent the Executive is aware  thereof),  research
and  development  or  existing  or future  products  or  services  and which are
conceived,  developed or made by Executive  while  employed by FGI or any of its
affiliates  (whether prior to or during the Employment  Period) ("Work Product")
belong to FGI or such other  affiliate,  and Executive hereby assigns to FGI his
entire  right,  title and  interest  in any such Work  Product.  Executive  will
promptly  disclose such Work Product to the Chief  Executive  Officer of FGI and
perform all actions  reasonably  requested by the Chief Executive Officer of FGI
(whether during or after Executive's Employment Period) to establish and confirm
such ownership (including, without limitation,  assignments, consents, powers of
attorney and other instruments).

18.      Noncompete; Nonsolicitation.

     (a) Executive acknowledges that in the course of his employment with FGI he
will become familiar with Confidential Information and that his services will be
of special,  unique and extraordinary value to FGI. Therefore,  Executive agrees
that,  during the time he is  employed  by FGI  pursuant  hereto and for two (2)
years thereafter (the "Noncompete  Period"), in the entire United States and any
other countries  -----------------  in which the Companies or  Partnerships  are
providing,  or actively planning to provide goods and services, he will not: (i)
compete with the Companies or the Partnerships in the sale of propane or related
competitive  products or services;  (ii)  directly or  indirectly,  in person or
through  others,  for the benefit of Executive or another,  call upon,  solicit,
sell, divert, take away, deliver to, accept business or orders from or otherwise
engage in propane-related  business with FGI's Customers (as defined below), nor
shall Executive,  in any capacity,  assist others to do so; or (iii) directly or
indirectly  interfere  with the  business  relationship  between FGI and any FGI
Customers.  The  restrictions  in this  paragraph  apply  only to  products  and
services that are competitive  with the Business and/or products and services of
FGI.

(b)      While employed by FGI and for two (2) years thereafter,  Executive will
         not (i)  interfere  with,  disrupt,  or attempt  to disrupt  relations,
         contractual  or otherwise,  between FGI and its  employees,  vendors or
         suppliers,  or (ii) hire or take away, directly or indirectly,  any FGI
         employee.

     (c) "Customers" shall mean: (i) all persons, firms, corporations, and other
business  enterprises for whom FGI performs or performed services or to whom FGI
sells or sold products,  appliances,  equipment, or supplies during the two year
period immediately prior to the termination of Executive's employment;  and (ii)
all persons,  corporations, and other business enterprises actively solicited by
FGI or to whom FGI has  furnished  a quotation  or proposal or estimate  for the
sale of products or services within the one year period immediately prior to the
termination of Executive's  employment.  Customers of FGI shall include, but not
be limited  to,  those for whom either  Executive  or anyone  under  Executive's
supervision  provided  products  or  services  and  those  who may  have  become
customers through the efforts of Executive while employed by FGI.

(d)      FGI and Executive  agree that:  (i) the covenants set forth in Sections
         16 and 18 are reasonable in geographical  and temporal scope and in all
         other respects, (ii) FGI would not have entered into this Agreement but
         for these  covenants of  Executive  contained  herein,  and (iii) these
         covenants  contained  herein  have been made in order to induce  FGI to
         enter into this Agreement.

(e)      If, at the time of  enforcement  of this Section 18, a court or arbiter
         shall hold that the duration,  scope or area restrictions stated herein
         are unreasonable under  circumstances then existing,  the parties agree
         that  the  maximum  duration,  scope  or  area  reasonable  under  such
         circumstances  shall be substituted for the stated  duration,  scope or
         area and that the court or  arbitrator  shall be  allowed to revise the
         restrictions  contained  herein to cover the maximum period,  scope and
         area permitted by law.

(f)      FGI does not have to enforce  all  provisions  of Sections 16 and 18 of
         this Agreement at all times to preserve its rights to enforce any other
         provision  of  Sections  16 and 18 of this  Agreement.  Executive  also
         acknowledges FGI does not have to enforce similar agreements with other
         employees and/or officers to preserve its rights to enforce Sections 16
         and 18 of this Agreement with Executive.

(g)      Executive  shall  provide  a copy  of  this  Agreement  to  any  new or
         potential   employer  which  competes  against  the  Companies  or  the
         Partnerships.

<PAGE>

19.      Arbitration.

(a)      Except as set forth in Section 19(c), arbitration shall be the sole and
         exclusive remedy for any dispute,  claim, or controversy of any kind or
         nature (a  "Claim")  arising  out of,  related  to, or  connected  with
         Executive's  employment  relationship  with FGI, or the  termination of
         Executive's  employment  relationship  with  FGI,  including  any Claim
         against any parent,  subsidiary,  or  affiliated  entity of FGI, or any
         director, officer, general or limited partner, employee or agent of FGI
         or of any such parent, subsidiary or affiliated entity.

     (b) This agreement to arbitrate  specifically includes (without limitation)
any  dispute  between or among the parties to this  Agreement  relating to or in
respect of this Agreement,  its  negotiation,  execution,  performance,  subject
matter,  or any course of  conduct or dealing or actions  under or in respect of
this Agreement,  all claims under or relating to any federal, state or local law
or regulation  prohibiting  discrimination,  harassment or retaliation  based on
race,  color,  religion,  national  origin,  sex,  age,  disability or any other
condition or characteristic protected by law; demotion, discipline,  termination
or other  adverse  action in violation of any  contract,  law or public  policy;
entitlement to wages or other economic compensation; and any claim for personal,
emotional, physical, economic or other injury.

(c)      This  agreement to arbitrate  does not apply to any legal action by FGI
         seeking  injunctive  relief or  damages  for breach or  enforcement  of
         Sections 16 or 18 of the  Agreement.  This  agreement to arbitrate also
         does  not  apply  to  any  claims  by   Executive:   (a)  for  workers'
         compensation  benefits;  (b) for unemployment  insurance benefits;  (c)
         under a benefit  plan where the plan  specifies a separate  arbitration
         procedure;  (d)  filed  with an  administrative  agency  which  are not
         legally subject to arbitration  under this Agreement;  or (e) which are
         otherwise expressly prohibited by law from being subject to arbitration
         under this Agreement.

     (d) Any party may demand  arbitration  by sending notice to the other party
as set forth in this  Agreement.  Any Claim  submitted to  arbitration  shall be
decided by a single,  neutral arbitrator (the "Arbitrator").  The parties to the
arbitration  shall  mutually  select the Arbitrator not later than 45 days after
service of the  demand for  arbitration.  If the  parties  for any reason do not
mutually  select the  Arbitrator  within the 45 day  period,  then any party may
apply to any court of competent  jurisdiction  to appoint a retired judge as the
Arbitrator.  The parties agree that arbitration shall be conducted in accordance
with the American Arbitration Association Rules for the Resolution of Employment
Disputes.  The Arbitrator shall apply the substantive  federal,  state, or local
law and statute of limitations governing any Claim submitted to arbitration. The
arbitration  shall take place at a mutually  agreeable site in Liberty or Kansas
City,  Missouri and shall be conducted  within one hundred  eighty (180) days of
the  receipt  by a party  of the  other  party's  demand  for  arbitration.  The
Arbitrator,  in making his  decision,  shall be bound to follow the  substantive
state and  federal  laws of  jurisprudence  as well as the  applicable  rules of
evidence in arriving at a decision.  The decision  rendered  shall be in writing
and delivered to the parties within thirty (30) days after the conclusion of the
arbitration.  The award of the Arbitrator  shall be final, and judgment upon the
award  rendered  may be entered  and  enforced  in any court,  state or federal,
having  jurisdiction.  In ruling  on any Claim  submitted  to  arbitration,  the
Arbitrator  shall have the  authority  to award only such  remedies  or forms of
relief as are provided for under the substantive law governing such Claim.

(e)      Any fees and costs  incurred in the  arbitration  (e.g.,  filing  fees,
         transcript  costs and  Arbitrator's  fees)  will be shared  equally  by
         Executive and FGI,  except that the Arbitrator may reallocate such fees
         among the parties if the Arbitrator determines that an equal allocation
         would impose an unreasonable financial burden on Executive. The parties
         shall be responsible  for their own attorneys'  fees and costs,  except
         that the Arbitrator  shall have the authority to award  attorneys' fees
         and costs to the prevailing party in accordance with the applicable law
         governing the dispute.

(f)      The  Arbitrator,  and not any  federal or state  court,  shall have the
         exclusive   authority   to   resolve   any   issue   relating   to  the
         interpretation,  formation or enforceability of this Agreement,  or any
         issue relating to whether a Claim is subject to arbitration  under this
         Agreement,  except  that any  party may bring an action in any court of
         competent  jurisdiction  to compel  arbitration in accordance  with the
         terms of this Agreement.

<PAGE>

20.  FGI's  Right to  Injunctive  Relief,  Tolling.  In the event of a breach or
threatened  breach of any of the Executive's  duties and  obligations  under the
terms and provisions of Sections 16, 17 or 18 hereof, FGI shall be entitled,  in
addition to any other  legal or  equitable  remedies  it may have in  connection
therewith  (including  any right to damages that it may suffer),  to  temporary,
preliminary,   and  permanent  injunctive  relief  restraining  such  breach  or
threatened  breach.  The Executive hereby expressly  acknowledges  that the harm
which  might  result to the  Business  as a result of any  noncompliance  by the
Executive  with any of the  provisions  of sections 16, 17 or 18 hereof would be
largely irreparable.

21. Judicial  Enforcement.  If any provision of this Agreement is adjudicated to
be  invalid or  unenforceable  under  applicable  law in any  jurisdiction,  the
validity  or  enforceability  of  the  remaining  provisions  thereof  shall  be
unaffected as to such  jurisdiction and such  adjudication  shall not affect the
validity or enforceability of such provisions in any other jurisdiction.  To the
extent that any  provision  of this  Agreement is  adjudicated  to be invalid or
unenforceable  because it is  overbroad,  that  provision  shall not be void but
rather  shall be  limited  only to the extent  required  by  applicable  law and
enforced as so limited.  The parties  expressly  acknowledge and agree that this
Section is reasonable in view of the parties' respective interests.

22.  Executive  Warranties  and  Representations.  The  Executive  warrants  and
represents  that the execution and delivery of the Agreement and the Executive's
employment  with FGI do not violate any previous  employment  agreement or other
contractual obligation of the Executive.

23.  Survival.  The provisions of this Agreement,  except as otherwise  provided
herein,   shall   continue  in  full  force  in  accordance   with  their  terms
notwithstanding any termination of Executive's employment by FGI.

24. Right to Recover  Costs and Fees.  The Executive and FGI undertake and agree
that if either the Executive or FGI breach or threaten to breach  Sections 16 or
18 of this  Agreement  (the  "Breaching  Party"),  the Breaching  Party shall be
liable for any attorneys' fees and costs incurred by the non-Breaching  Party in
enforcing the non-Breaching Party's rights hereunder.

25.  Executive  Right. If the Executive  believes that any benefit on account of
the termination of the Executive's service with FGI under this Agreement has not
been paid by FGI within  fifteen  (15) days after the date on which that benefit
should have been paid to the Executive  under the terms of this  Agreement,  the
Executive  may give notice to FGI of that  failure and the amount of the benefit
that should have been paid. FGI shall pay the Executive the amount  specified in
that notice within  thirty (30) days after its receipt of the notice;  provided,
however,  that the payment shall not preclude FGI from disputing that payment in
accordance with the arbitration provisions of this Agreement.

26. Entire Agreement,  Amendments and Modifications.  This Agreement constitutes
the entire agreement and  understanding of the parties  regarding the employment
of Executive  by FGI and  supersedes  all prior  agreements  and  understandings
between  the  Executive  and FGI to the  extent  that  any  such  agreements  or
understandings   conflict  with  the  terms  of  this  Agreement.   The  parties
specifically  agree that the  Option  Grantee  Agreement  entered  into  between
Executive and Ferrellgas is hereby  terminated.  No  modification,  amendment or
waiver of any of the provisions of this Agreement  shall be effective  unless in
writing specifically referring hereto, and signed by the parties hereto.

27. Assignments.  This Agreement shall be freely assignable by FGI to, and shall
inure to the benefit of and be binding upon,  its  successors and assigns and/or
any other entity which shall succeed to the business  presently  being conducted
by FGI or the Partnerships.  In that regard,  FGI shall assign and shall require
any successor,  whether in a Change of Control  transaction or not, of either of
the Companies or any of the  Partnerships  to expressly  assume in writing FGI's
obligations  under this Agreement  simultaneously  with the  consummation  of an
applicable  transaction,  which  assumption  shall not relieve FGI of any of its
obligations  hereunder.  Being a contract  for personal  services,  neither this
Agreement nor any rights hereunder shall be assigned by the Executive; provided,
however that the rights and benefits hereunder shall inure to and be enforceable
by the Executive's estate, heirs,  executors,  administrators or legal guardians
or representatives.

28. Choice of Forum;  Governing Law. In light of FGI's substantial contacts with
the  State of  Missouri,  the  parties'  interests  in  ensuring  that  disputes
regarding the interpretation, validity, and enforceability of this Agreement are
resolved on a uniform  basis,  and FGI's  execution  of, and the making of, this
Agreement in Missouri, the parties agree that: (i) any litigation involving this
Agreement  shall be filed and  conducted  in the state or federal  courts in the
State of Missouri;  and (ii) the Agreement  shall be  interpreted  in accordance
with and governed by the laws of the State of Missouri, without giving effect to
any choice of law or conflict of law  provision or rule (whether of the State of
Missouri or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Missouri.

29. Headings and Interpretation. Section headings are provided in this Agreement
for convenience only and shall not be deemed to substantively  alter the content
of such sections.  Whenever the words  "include",  "includes" or "including" are
used in this  Agreement,  they  shall be  deemed  to be  followed  by the  words
"without limitation". References to the singular or plural tense of a word shall
also include the plural or singular as the context may require.

30. Neutral  Construction.  Each party  acknowledges that in the negotiation and
drafting of this  Agreement,  they have been  represented by and relied upon the
advice of  counsel  of their  choice.  The  parties  affirm  that they and their
counsel have had a  substantial  role in such  negotiation  and drafting of this
Agreement, and, therefore, the parties agree that this Agreement shall be deemed
to have been drafted by all the parties hereto and the rule of  construction  to
the effect that any contract ambiguities are to be resolved against the drafting
party shall not be  employed  in the  interpretation  of this  Agreement  or any
exhibit or schedule hereto.

31. Notices.  Any notice,  request,  consent or communication  (collectively,  a
"Notice")  under this Agreement  shall be effective only if it is in writing and
(i) personally delivered with written receipt thereof, (ii) sent by certified or
registered mail,  return receipt  requested,  postage prepaid or (iii) sent by a
nationally  recognized  overnight  delivery  service,  with delivery  confirmed,
addressed as follows (or at such other address for a party as shall be specified
by like notice):

  (a)      If to the Executive, to:           Patrick J. Chesterman
                                              [Address]

  (b)      with a copy to:                    Bryan Cave LLP
                                              One Kansas City Place
                                              1200 Main Street
                                              Kansas City, Missouri 64105
                                              Attn:  Beth Romans Bower

  (c)      If to FGI, to:                     Ferrellgas, Inc.
                                              One Liberty Plaza
                                              Liberty, Missouri  64068
                                             Attention:  Mr. Danley K. Sheldon

                  A Notice  shall be deemed  to have  been  given as of the date
when (i)  personally  delivered as  indicated by date of receipt,  (ii) five (5)
days after the date when deposited with the United States certified mail, return
receipt requested, properly addressed, or (iii) when receipt of a Notice sent by
an overnight  delivery service is confirmed by such overnight  delivery service,
as the case may be, unless the sending party has actual  knowledge that a Notice
was not received by the intended recipient.

<PAGE>

32.  Counterparts.  This Agreement may be executed in one or more  counterparts,
each of which shall be deemed an original and together shall  constitute one and
the same Agreement.

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

FERRELLGAS, INC.                            EXECUTIVE

By: __________________
Name:_________________                       Patrick J. Chesterman
Title:___________________

PLEASE NOTE:  BY SIGNING THIS  AGREEMENT,  EXECUTIVE IS HEREBY  CERTIFYING  THAT
EXECUTIVE (A) HAS RECEIVED A COPY OF THIS  AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING  IT; (B) HAS READ THIS  AGREEMENT  CAREFULLY  BEFORE  SIGNING  IT; (C)
UNDERSTANDS THAT THIS AGREEMENT CONTAINS A BINDING  ARBITRATION  PROVISION;  (D)
HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED  SATISFACTORY  ANSWERS TO ALL
SUCH QUESTIONS; AND (E) UNDERSTANDS EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THE
AGREEMENT.EMPLOYMENT, CONFIDENTIALITY, AND NONCOMPETE AGREEMENT

                  This  Employment,  Confidentiality,  and Noncompete  Agreement
("Agreement")  is made and entered into this ____ day of  ____________,  2000 by
and between Ferrellgas,  Inc., a Delaware  corporation ("FGI") and James M. Hake
(the "Executive").

                  WHEREAS,  FGI  serves as the  general  partner  of  Ferrellgas
Partners,  L.P., a Delaware  limited  partnership  ("Ferrellgas  Partners")  and
Ferrellgas, L.P., a Delaware limited partnership ("Ferrellgas",  and referred to
herein jointly and severally with Ferrellgas  Partners as the  "Partnership"  or
"Partnerships"  as the context so requires),  which are engaged primarily in the
sale,  distribution  and marketing of propane and other natural gas liquids (the
"Business").

                  WHEREAS, FGI, through the Partnerships,  conducts the Business
throughout the United States.

                  WHEREAS,  FGI, through the Partnerships,  has expended a great
deal of time, money, and effort to develop and maintain proprietary Confidential
Information (as defined below) which, if misused or disclosed,  could be harmful
to the Business.

                  WHEREAS,  the success of FGI depends to a  substantial  extent
upon the protection of the Confidential Information and customer goodwill by all
of its employees and the employees of the Partnerships.

                  WHEREAS, the Executive desires to be employed by FGI as Senior
Vice President, Acquisitions.

                  WHEREAS,  the  Executive  desires  to be  eligible  for  other
opportunities within FGI and/or compensation increases which otherwise would not
be  available  to  the  Executive  and  to  be  given  access  to   Confidential
Information, of FGI and the Partnerships which is necessary for the Executive to
perform his duties,  but which FGI would not make available to the Executive but
for the Executive's signing and agreeing to abide by the terms of this Agreement
as a condition of the Executive's employment and continued employment with FGI.

                  WHEREAS,  the Executive  recognizes and acknowledges  that the
Executive's  position with FGI has provided  and/or will continue to provide the
Executive with access to Confidential Information of FGI and the Partnerships.

                  NOW, THEREFORE, in consideration of the compensation and other
benefits of the Executive's employment by FGI and the recitals, mutual covenants
and agreements  hereinbefore  and hereinafter  set forth,  the Executive and FGI
agree as follows:

1. Term.  The  Executive  is hereby  employed by FGI, and the  Executive  hereby
accepts such  employment  upon the terms and  conditions  set forth herein.  The
Executive's  term of employment  under this  Agreement  shall be for a period of
three (3) years,  commencing on July 24, 2000,  and shall  continue for a period
through and  including  July 24, 2003 (the  "Initial  Period"),  unless  earlier
terminated   pursuant   to  the  terms  and   conditions   of  this   Agreement.
Notwithstanding  anything herein to the contrary, this Agreement and the term of
employment,  unless either FGI or the Executive  provides six (6) months written
notice  to the other  party  hereto  that the  Agreement  shall  not renew  upon
expiration of the then current  employment period and, subject to Sections 8 and
9, shall be automatically  renewed for one year successive periods following the
Initial Period (each a "Successive Period" and together with the Initial Period,
the "Employment Period").

2. Duties and  Responsibilities.  During the  Employment  Period,  the Executive
shall be employed as FGI's Senior Vice President, Acquisitions, with such duties
and  responsibilities  as are customarily  incident to such office.  The precise
services of the Executive may be extended or curtailed at the discretion of FGI,
so long as after such extension or curtailment,  the duties of the Executive are
consistent  with the duties  normally  attendant to the  aforesaid  office.  The
Executive  will  perform  his  duties in a  diligent,  trustworthy,  loyal,  and
business-like manner, all for the purpose of advancing the Business.

3. Performance of Services.  During the Employment  Period,  the Executive shall
devote his primary  time,  attention  and energies to the Business and shall not
during such time be substantially engaged in any other business activity whether
or not such business  activity is pursued for gain,  profit,  or other pecuniary
advantage;  provided,  however,  that  nothing  herein  shall  be  construed  as
preventing  the Executive  (i) from being  involved in civic,  philanthropic  or
community  service  activities,  from  participating  in  other  businesses  and
receiving  compensation  therefore,  to the  extent  that such  involvement  and
participation  does  not  involve  management  or  participation  in  day-to-day
activities thereof and does not detract from the performance by the Executive of
his duties to FGI pursuant hereto; provided, further, that at the request of the
Chief Executive  Officer of FGI, the Executive  shall disclose such  involvement
therein,  or (ii) from  investing  his assets in such form or manner as will not
require any  appreciable  services on the part of the Executive in the operation
of the affairs of any entity in which such investments are made, so long as such
activities  do not  substantially  interfere  or conflict  with the  Executive's
discharge of his duties and responsibilities  hereunder. The Executive agrees to
follow and act in accordance with all of the rules,  policies, and procedures of
FGI.

4.       Compensation.

(a)      During the Employment Period, Executive's base salary shall be not less
         than $192,000 per year ("Base Salary"), payable in regular installments
         in accordance with FGI's usual payroll  practices and subject to review
         and increase  consistent  with  practices of FGI in effect from time to
         time  during  the  Employment   Period,   but  shall  not  be  reduced.
         Executive's  Base  Salary  shall  be  reviewed  annually  by the  Chief
         Executive   Officer  of  FGI  with  the  advice  and   consent  of  the
         compensation committee.

(b)      Annual Bonus.  Executive may be eligible for an annual bonus based on a
         target  bonus of 50% of base pay.  The terms of any such  annual  bonus
         plan  shall be at the  discretion  of the  Board of  Directors  of FGI;
         however,  the terms of such plan, if any, shall be committed to by FGI,
         in writing, within 30 days after the beginning of each fiscal year.

5. Benefit Plans. During the Employment Period and as otherwise provided herein,
the Executive  shall be entitled to participate in any and all employee  welfare
and health benefit plans (including,  but not limited to life insurance,  health
and medical,  dental,  and disability  plans) and other  employee  benefit plans
(including,  but not limited to qualified  pension plans and Ferrell  Companies,
Inc.  ("FCI") stock incentive  plans),  established by FGI from time to time for
the benefit of executive  employees of FGI. The  Executive  shall be required to
comply with the conditions  attendant to  participation  in and coverage by such
plans and shall comply with and, except as otherwise  provided herein,  shall be
entitled to benefits  only in accordance  with the terms and  conditions of such
plans as they may be amended from time to time.  Nothing herein  contained shall
be construed as requiring  FGI to establish or continue any  particular  benefit
plan in discharge of its obligations under this Agreement.

6.       Other Benefits and Reimbursements.

(a)      During the Employment  Period,  the Executive  shall be entitled to not
         less than four (4) weeks of paid vacation  each year of his  employment
         hereunder,  which  shall  accumulate  if not  used in any  given  year.
         Pursuant to the provisions of this Agreement,  vacation time earned but
         unused  shall  be  paid  to the  Executive  upon  termination  of  this
         Agreement.

(b)      During the Employment  Period,  the Executive shall be entitled to such
         other employment  benefits extended or provided to other key executives
         of FGI, including,  but not limited to, payment or reimbursement of all
         business  expenses  incurred by the Executive in the performance of his
         duties and other job related  activities set forth in this Agreement or
         subsequently  agreed  to by the  parties  and in the  promotion  of the
         Business in accordance with FGI customary policies and procedures.  The
         Executive  shall submit to FGI periodic  statements  of all expenses so
         incurred.  Subject to such audits as FGI may deem necessary,  FGI shall
         reimburse the  Executive the full amount of any such expenses  advanced
         by him in the ordinary course of business.

7.   Deductions   from  Salary  and  Benefits.   FGI  shall  withhold  from  any
compensation,  bonus or benefits payable to the Executive all customary federal,
state, local and other withholdings,  including, without limitation, federal and
state withholding taxes, social security taxes and state disability insurance.

8.  Termination  by FGI. FGI may  terminate  Executive's  employment  under this
Agreement  upon at least sixty (60)  calendar  days  ("Notice  Period")  written
notice  ("Notice")  to the  Executive  of its  intent to  terminate  Executive's
employment:

     (a) without Cause (as defined in subsection  8(b) below).  The Notice shall
specify that such  Termination is without Cause,  and upon the expiration of the
Notice Period,  FGI shall,  on the condition  that Executive  executes a general
release of claims on terms customarily and normally used by FGI at the time, (i)
pay the  Executive  in a lump sum an amount equal to twice his then current Base
Salary, and (ii) provide to the Executive medical  insurance,  on the same basis
on which he is receiving such insurance at the time of termination, for a period
ending  the  earlier  of two (2)  years  from  the date of  termination  of this
Agreement or the date Executive is covered by another  medical plan at a cost to
the Executive  equal to the amount that would have been charged to the Executive
in accordance  with the terms of this Agreement (the payment or provision of the
items in this Section 8(a) are referred to in this  Agreement as the  "Executive
Payments");

     (b) for Cause (as defined below).  The Notice shall specify the particulars
of such Cause and shall  afford the  Executive  an  opportunity  to discuss  the
particulars  of such Cause with the Chief  Executive  Officer of FGI and to cure
such Cause. If such Cause shall not be cured accordingly, Executive's employment
shall terminate upon  expiration of the Notice Period and no compensation  shall
be due to the Executive beyond the date of such termination (other than pursuant
to pension or other plans which by their terms provide  payments beyond the date
of termination in such circumstances,  including but not limited to, the Ferrell
Companies Inc.  Employee Stock  Ownership  Plan,  FGI's  non-qualified  deferred
compensation  plan,  the FCI  Nonqualified  Stock Option  Agreement and vacation
earned but not taken ("collectively,  the "FGI Benefit Plans")). For purposes of
this  Agreement  "Cause"  means:  (i) the  conviction of Executive by a court of
competent  jurisdiction  of, or entry  ----- of a plea of nolo  contendere  with
respect  to, a felony or any other  crime,  which other  crime  involves  fraud,
dishonesty or ---- ---------- moral turpitude which  materially  interferes with
the performance of Executive's  duties,  responsibilities  or obligations  under
this Agreement; (ii) fraud or embezzlement related to FGI or the Partnerships on
the part of  Executive;  (iii)  Executive's  chronic  abuse of or  dependency on
alcohol or drugs (illicit or otherwise)  which  materially  interferes  with the
performance of Executive's  duties,  responsibilities  or obligations under this
Agreement; (iv) the material breach by Executive of any of Sections 16, 17 or 18
hereof,  except as permitted pursuant to Section 12 hereof; (v) any act of moral
turpitude or willful  misconduct by Executive  which (A) results in  substantial
personal  enrichment of the Executive at the expense of FGI or the Partnerships,
or (B) is reasonably  expected to have a material adverse impact on the Business
or  reputation  of FGI;  (vi) gross and willful  neglect of material  duties and
responsibilities  of the Executive pursuant hereto, or an intentional  violation
of a material  term of this  Agreement;  or (vii) any material  violation of any
statutory or common law fiduciary duty of Executive to FGI or the  Partnerships;
or (viii) willful failure by the Executive to comply with a material FGI policy,
which  results in a material,  adverse  impact on the  Business,  as  reasonably
determined  by the  Chief  Executive  Officer  of FGI,  or (ix)  repeated  gross
insubordination.

9.  Termination  by the  Executive.  The Executive may terminate his  employment
under this Agreement upon at least thirty (30) calendar days' ("Executive Notice
Period") written notice ("Executive Notice") to FGI of such termination:

(a)      without  Executive  Cause (as defined  below),  upon  expiration of the
         Executive  Notice Period,  in which event no compensation  shall be due
         him beyond the date of such termination  other than pursuant to the FGI
         Benefit Plans; or

     (b) for Executive Cause. The Executive Notice shall specify the particulars
of such Executive  Cause and during the Executive  Notice Period,  the Executive
shall  afford  the  Chief  Executive  Officer  an  opportunity  to  discuss  the
particulars  of such  Executive  Cause  with  the  Executive  and to  cure  such
Executive Cause to the satisfaction of the Executive during the Executive Notice
Period.  If such  Executive  Cause shall not be cured  accordingly,  Executive's
employment  shall terminate upon expiration of the Executive  Notice Period.  In
all events, Executive shall be paid all payments and benefits due him during the
Employment  Period,  and FGI shall pay the Executive in a lump sum or provide to
the  Executive,  as  applicable,  the Executive  Payments on the condition  that
Executive executes a general release of claims on terms customarily and normally
used by FGI at the time.  "Executive  Cause" means any of the following to which
the Executive does not agree: (i) assignment --------------- to the Executive of
duties  or   responsibilities,   or  the  material   diminution   of  duties  or
responsibilities,   that   are   inconsistent   with   his   position,   duties,
responsibilities or status as they exist at the commencement of the term of this
Agreement;  (ii)  material  change  in  the  reporting  responsibilities  of the
Executive; provided, however, that, notwithstanding the effect of changes on the
Board under  Section 12 hereof,  changes in the identity of persons on the Board
shall not be considered a change in reporting  responsibilities  for purposes of
this Section,  (iii)  relocation of the Executive's  physical office or of FGI's
corporate  offices  to a site  beyond a fifty  (50) mile  radius of its  current
location of One Liberty Plaza, Liberty,  Missouri;  (iv) failure by any of FGI's
successors in interest to assume this Agreement in writing  simultaneously  with
becoming a successor in interest;  (v) failure of FGI to maintain Director's and
Officer's  insurance;  or, (vi) a breach of any  provision of this  Agreement by
FGI.

10. Nondisparagement.  During the term of this Agreement and for a period of two
(2) years after it is terminated,  for whatever reason, Executive agrees that he
will not make any  statements  or  provide  any  information  that would tend to
disparage, defame or denigrate FGI, its affiliates,  related entities and any of
its or their former or current officers, directors, agents or employees.

11. Cooperation. In the event that FGI or any of its affiliates becomes involved
in any civil or criminal litigation,  administrative  proceeding or governmental
investigation, Executive shall, upon request, provide reasonable cooperation and
assistance  to  FGI,   including   without   limitation,   furnishing   relevant
information, attending meetings and providing statements and testimony. FGI will
reimburse  Executive  for all  reasonable  and  necessary  expenses he incurs in
complying with this Section 11. In addition, at any time more than two (2) years
after the  termination  of this  Agreement  for any reason,  Executive  need not
comply  with this  Section 11 unless  FGI has  agreed in  writing  to  reimburse
Executive's employer, if applicable, or to reimburse Executive if self-employed,
for Executive's time at a rate agreed to by the applicable parties.

12.      Effect of Certain Transactions; Change in Control.

     (a) In the event of a Change in Control (as hereinafter  defined) FGI shall
pay the Executive, not later than thirty (30) calendar days after such Change in
Control,  a lump cash sum equal to the  greater  of (A) two and  one-half  (2.5)
times 125% of his then current Base Salary,  or (B) two and one-half (2.5) times
the average actual cash  compensation  (including,  but not limited to, bonuses)
paid for the prior three (3) fiscal years prior to such Change in Control.  Such
payment  shall reduce any lump sum Executive  Payments  payable to the Executive
under Sections 8 or 9. In addition, if the Executive's  employment is terminated
pursuant to Section 8(a) or 9(b) within  eighteen  (18) months after such Change
in  Control,  (i) FGI shall pay the  Executive  for any  vacation  earned by the
Executive but not taken and any other amounts earned but unpaid,  (ii) FGI shall
pay the Executive a pro rata portion (such  proration shall be on the basis that
the number of months of his  employment  during FGI's then  current  fiscal year
bears to the number 12,  considering the month of termination as a month of full
employment,  and in the  case  of  any  plan  measured  over a full  year,  such
determination  and  payment  shall be made  after  the close of such year of any
amounts  to which he would  have  otherwise  been  entitled  under  any  Company
perquisite to which Executive is a participant  (excluding any bonus), and (iii)
FGI shall continue the Executive's health,  accident and life insurance benefits
at FGI's cost on the same basis on which he is  receiving  such  benefits at the
time of  termination,  until the earlier of the COBRA  period of  eighteen  (18)
months after the month in which such  termination  occurs or  Executive  obtains
coverage under another plan or comparable coverage.  For purposes of calculating
any bonus to be paid to the Executive pursuant to this Section 12, the Executive
shall be entitled to the payment of any bonus normally calculated with reference
to a future  period based upon the total amount paid for such bonus in the three
(3) previous fiscal years.

(b) For  purposes of this  Agreement  a "Change In  Control"  shall be deemed to
occur if:

(i)               FGI or FCI  (FGI  and FCI  will  hereinafter  be  jointly  and
                  severally  referred to as "Company" or the  "Companies" as the
                  context so requires) or either  Partnership  merges with or is
                  consolidated  into  another  corporation  or other  entity not
                  theretofore  affiliated  with  either  Company or  Partnership
                  (i.e., controlled by, controlling or under common control with
                  the  Companies or the  Partnerships,  as  applicable)  and the
                  Company or Partnership so merging or  consolidating is not the
                  surviving  entity  pursuant  to such  merger or  consolidation
                  (other  than a  transaction  in which the persons who were the
                  equity  owners of the  Company or  Partnership  so merging own
                  more than 50% of the surviving entity);

(ii)              All or  substantially  all of the assets of either  Company or
                  Partnership  are  acquired  by  another  corporation  or other
                  entity  not  theretofore  affiliated  with  either  Company or
                  Partnership  in a single  transaction  or a series of  related
                  transactions,  and a  majority  of the then  current  Board of
                  Directors of neither  Company does not control the entity that
                  has made such acquisition;

(iii)             There is consummated any transaction or series of transactions
                  or any event or series of events,  the result of which is that
                  FGI  is  no  longer  the  sole   general   partner  of  either
                  Partnership;

(iv)              There is consummated any transaction or series of transactions
                  or any event or series of events,  the result of which is that
                  the  Board  of FGI does not have  control  of the  affairs  of
                  either Partnership;

(v)               There is  consummated a purchase or other  acquisition  by any
                  persons,  entity or group of  persons,  within the  meaning of
                  Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
                  as amended (the "Exchange Act") (excluding,  for this purpose,
                  either  Company or its  subsidiaries  or any employee  benefit
                  plan of either Company or its subsidiaries), of the beneficial
                  ownership  (within the meaning of Rule 13d-3 promulgated under
                  the   Exchange   Act)   of  50%  or   more   of   either   the
                  then-outstanding   equity  securities  of  either  Company  or
                  Partnership or the combined  voting power of either  Company's
                  or Partnership's then-outstanding voting securities;

     (vi) Individuals who, as of the date hereof, constitute the Board of either
Company (as the date hereof,  the  "Incumbent  Boards")  cease for any reason to
constitute  at least a  majority  of the  Boards,  provided  that any person who
becomes a director  subsequent to the date hereof whose election,  or nomination
for election by either  Company's  equity  owners,  was approved by a vote of at
least a majority of the directors  then  comprising  the Incumbent  Board (other
than an individual  whose initial  assumption of office is in connection with an
actual or threatened  election  contest relating to the election of directors of
either  Company,  as such  terms  are  used in Rule  14a-11  of  Regulation  14A
promulgated  under the  Exchange  Act) shall be, for  purposes of this  section,
considered  as though  such  person  were a member of the  applicable  Incumbent
Board;

(vii)             There   is   consummated   a    reorganization,    merger   or
                  consolidation,  in each case with respect to which persons who
                  were the  equity  holders  of either  Company  or  Partnership
                  immediately   prior   to  such   reorganization,   merger   or
                  consolidation do not,  immediately  thereafter,  own more than
                  50% of,  respectively,  the equity securities and the combined
                  voting power  entitled to vote  generally in the  elections of
                  directors   or   managers  of  the   reorganized,   merged  or
                  consolidated entity's then-outstanding voting securities;

(viii)            There is a liquidation  or  dissolution  of either  Company or
                  Partnership (other than a liquidation or dissolution where the
                  equity owners of the surviving  Company or  Partnership do not
                  change)  or of the  sale  of all or  substantially  all of the
                  assets of either Company or Partnership;

(ix)              There is  consummated a public sale of a "material"  amount of
                  FCI's  equity  (with   materiality  being  determined  by  the
                  Committee  administering  the Ferrell  Companies Inc. Employee
                  Stock Ownership Trust ("ESOT"),  but with a material amount of
                  such equity being at least 50% thereof).

13.  Mitigation  or Reduction of  Benefits.  Executive  shall not be required to
mitigate  or reduce the amount of any  payment  upon  termination  provided  for
herein by  seeking  other  employment  or  otherwise  nor,  except as  otherwise
specifically  set forth  herein,  shall the amount of any  payment  or  benefits
provided upon  termination be reduced by any  compensation or other amounts paid
to or earned by Executive as the result of employment by another  employer after
such termination or otherwise.

14.      Certain Additional Payments by FGI.

     (a)  Notwithstanding  anything in this Agreement to the contrary and except
as set  forth  below,  in the  event it shall be  determined  that any  payment,
benefit or distribution  (or contribution  thereof) from FGI, any affiliate,  or
trusts established by FGI or by any affiliate, for the benefit of its employees,
to the  Executive or for the  Executive's  benefit  (whether  paid or payable or
distributed  or  distributable  pursuant  to the  terms  of  this  Agreement  or
otherwise,  but determined  without regard to any additional  payments  required
under this Section,  and with a "Payment"  including,  without  limitation,  the
vesting of an option or other  non-cash  benefit or property)  (any of which are
referred  to as a  "Payment")  would be subject  to the  excise  tax  imposed by
Section 4999 of the Internal  Revenue Code of 1986, as amended (the "Code"),  or
any interest or penalties  are  incurred by the  Executive  with respect to such
excise tax (such excise tax, together with any such interest and penalties,  are
hereinafter  collectively  referred to as the "Excise Tax"),  then the Executive
shall be entitled to receive an additional payment (a "Gross-Up  Payment") in an
amount such that after  payment by the  Executive  of all taxes  (including  any
interest or penalties  imposed with respect to such taxes),  including,  without
limitation,  any income  taxes (and any  interest  and  penalties  imposed  with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the sum of (i) the Excise Tax
imposed  upon the  Payments;  plus (ii) an amount  equal to the  product  of any
deductions  disallowed  to  Executive  for federal,  state,  or local income tax
purposes  solely  because  of the  inclusion  of  the  Gross-up  Payment  in the
Executive's  adjusted gross income multiplied by the highest applicable marginal
rate of federal, state, or local income taxation, respectively, for the calendar
year in which the Gross-up Payment is to be made.

(b)      Subject to the provisions of Section 14(c), all determinations required
         to be made under this Section 14, including whether and when a Gross-Up
         Payment is  required  and the amount of such  Gross-Up  Payment and the
         assumptions to be utilized in arriving at such determination,  shall be
         made by a nationally recognized certified public accounting firm as may
         be  designated  by the Executive  (the  "Accounting  Firm") which shall
         provide detailed supporting calculations both to FGI and the
                                           ---------------
         Executive  within  fifteen (15)  business days of the receipt of notice
         from the Executive that there has been a Payment,  or such earlier time
         as is  requested  by FGI.  In the  event  that the  Accounting  Firm is
         serving as  accountant or auditor for the  individual,  entity or group
         effecting a Change of Control,  the  Executive  shall  appoint  another
         nationally  recognized  accounting  firm  to  make  the  determinations
         required  hereunder (which accounting firm shall then be referred to as
         the Accounting Firm hereunder). All fees and expenses of the Accounting
         Firm shall be borne solely by FGI. Any Gross-Up Payment,  as determined
         pursuant  to this  Section  14,  shall be paid by FGI to the  Executive
         within five (5) calendar days of the receipt of the  Accounting  Firm's
         determination.  Any  determination  by the  Accounting  Firm  shall  be
         binding upon FGI and the Executive.  As a result of the  uncertainty in
         the  application of Section 4999 of the Code at the time of the initial
         determination  by the Accounting  Firm  hereunder,  it is possible that
         Gross-Up Payments which will not have been made by FGI should have been
         made ("Underpayment"),  consistent with the calculations required to be
         made hereunder. In the event that
                                 ------------
         FGI exhausts its remedies  pursuant to Section  14(c) and the Executive
         thereafter  is  required  to make a  payment  of any  Excise  Tax,  the
         Accounting Firm shall determine the amount of the Underpayment that has
         occurred and any such Underpayment  shall be promptly paid by FGI to or
         for the benefit of the Executive.

(c)      The Executive  shall notify FGI in writing of any claim by the Internal
         Revenue  Service that, if successful,  would require the payment by FGI
         of the Gross-Up Payment.  Such  notification  shall be given as soon as
         practicable  but no later  than  thirty  (30)  business  days after the
         Executive is informed in writing of such claim and shall apprise FGI of
         the nature of such claim and the date on which such claim is  requested
         to be  paid.  The  Executive  shall  not pay  such  claim  prior to the
         expiration  of the  30-day  period  following  the  date on  which  the
         Executive  gives such notice to FGI (or such shorter  period  ending on
         the date that any payment of taxes with  respect to such claim is due).
         If FGI notifies the  Executive in writing  prior to the  expiration  of
         such period that it desires to contest such claim, the Executive shall:

     (i) give FGI any information  reasonably  requested by FGI relating to such
claim,

(ii)              take such action in connection  with  contesting such claim as
                  FGI shall  reasonably  request in  writing  from time to time,
                  including, without limitation,  accepting legal representation
                  with respect to such claim by an attorney  reasonably selected
                  by FGI,

(iii)  cooperate  with FGI in good faith in order to  effectively  contest  such
claim, and

(iv)     permit FGI to participate in any proceedings relating to such claim;

         provided,  however,  that FGI shall bear and pay directly all costs and
         expenses  (including  attorneys' fees and costs and additional interest
         and  penalties)  incurred  in  connection  with such  contest and shall
         indemnify and hold the Executive  harmless,  on an after-tax basis, for
         any Excise Tax or income tax  (including  interest and  penalties  with
         respect thereto) imposed as a result of such representation and payment
         of costs and expenses.  Without limitation on the foregoing  provisions
         of this  Section  14(c),  FGI shall  control all  proceedings  taken in
         connection  with such contest  and, at its sole  option,  may pursue or
         forgo any and all  administrative  appeals,  proceedings,  hearings and
         conferences with the taxing authority in respect of such claim and may,
         at its sole option,  either direct the Executive to pay the tax claimed
         and sue for a refund or contest  the claim in any  permissible  manner,
         and the Executive  agrees to prosecute such contest to a  determination
         before any administrative  tribunal, in a court of initial jurisdiction
         and in one or more appellate courts, as FGI shall determine;  provided,
         however,  that if FGI directs the  Executive  to pay such claim and sue
         for a refund,  FGI shall  advance  the  amount of such  payment  to the
         Executive,  on an  interest-free  basis  and shall  indemnify  and hold
         Executive  harmless,  on an  after-tax  basis,  from any  Excise Tax or
         income tax  (including  interest or  penalties  with  respect  thereto)
         imposed  with  respect to such  advance or with  respect to any imputed
         income with  respect to such  advance;  and further  provided  that any
         extension  of the statute of  limitations  relating to payment of taxes
         for the  taxable  year of the  Executive  with  respect  to which  such
         contested  amount  is  claimed  to be due is  limited  solely  to  such
         contested  amount.  Furthermore,  FGI's control of the contest shall be
         limited to issues  with  respect to which a Gross-Up  Payment  would be
         payable  hereunder  and the  Executive  shall be  entitled to settle or
         contest,  as the case may be, any other  issue  raised by the  Internal
         Revenue Service or any other taxing authority.

                           If,  after the receipt by the  Executive of an amount
         advanced  by FGI  pursuant  to Section  14(c),  the  Executive  becomes
         entitled  to  receive  any  refund  with  respect  to such  claim,  the
         Executive  shall (subject to FGI's  complying with the  requirements of
         Section 14(c)) promptly pay to FGI the amount of such refund  (together
         with any  interest  paid or credited  thereon  after  taxes  applicable
         thereto).  If, after the receipt by the Executive of an amount advanced
         by FGI  pursuant to Section  14(c),  a  determination  is made that the
         Executive  shall not be  entitled  to any refund  with  respect to such
         claim and FGI does not notify the Executive in writing of its intent to
         contest  such denial of refund prior to the  expiration  of thirty (30)
         calendar  days after such  determination,  then such  advance  shall be
         forgiven  and shall not be required to be repaid and the amount of such
         advance shall  offset,  to the extent  thereof,  the amount of Gross-Up
         Payment required to be paid.

<PAGE>

15.    Indemnification.    Executive   has   executed   on   _______________   a
Director/Officer Indemnification Agreement which agreement controls the terms of
indemnification between the parties.

16.      Confidential Information.

(a)      In connection with Executive's employment, FGI will disclose and/or has
         disclosed  to  Executive  certain  Confidential   Information  (defined
         below).  The Confidential  Information is not generally known to others
         and could have  economic  value if disclosed  to others  and/or used by
         Executive,  directly  or  indirectly,  in  competition  with FGI or the
         Partnerships.  Further, Executive will in the future participate in the
         development  of,  have  access  to,  or use in  performing  Executive's
         employment  duties,  some or all of the Confidential  Information.  FGI
         makes reasonable  efforts to keep its Confidential  Information  secret
         and  confidential,  and  Executive  has a duty to keep  it  secret  and
         confidential.

(b)      Executive may have significant contacts with the customers and accounts
         of  FGI  and/or  be  provided  with  FGI's  confidential  customer  and
         customer-related   information,   including   various  customer  lists,
         analyses,  and summaries.  These contacts and/or this information could
         enable  Executive,  at FGI's  expense,  to have access to and establish
         favorable relations with, and put Executive in a position to influence,
         FGI's customers and accounts.

(c)      FGI's customer lists and customer  information  are trade secrets,  and
         this Agreement is intended,  among other things, to protect FGI's trade
         secrets,  customer relationships,  customer goodwill and other business
         interests.

(d)      The Executive will not use or reveal Confidential Information to anyone
         other than for on or behalf of FGI both  during  and after  Executive's
         employment.

(e) Executive shall keep all Confidential Information secret and confidential.

(f)      Executive  shall  return to FGI all  Confidential  Information  and all
         property of FGI immediately upon termination of Executive's  employment
         for any reason and also at any time upon FGI's request.

     (g)  "Confidential  Information"  shall mean: (i) Company  Information  (as
defined below);  (ii) Customer  Information  (as defined  below);  and (iii) all
other  information,   whether  or  not  reduced  to  writing,  relating  to  the
Partnerships,  the Business or FGI's customers which gives FGI an advantage over
competitors  who do not  know or use  it,  have  not  compiled  the  information
themselves, or is otherwise not generally known in the industry,  including, but
not limited to, trade secrets,  proprietary  information,  customer lists, route
books,  inventions,  computer programs and software,  and including  information
conceived,  originated,  or developed  by  Executive.  Confidential  Information
includes,  but is  not  limited  to,  originals  and  copies  of  all  materials
containing  such  information,  regardless  of the  media  used to  record  such
information, including but not limited to computers, computer disks, CD ROMS, or
other electronic media, microfiche or microfilm.

(h)      "Company  Information" shall mean:  Information that FGI, the Companies
         or the Partnerships have developed,  acquired,  organized,  compiled or
         maintained  regarding FGI's  products,  services,  processes,  methods,
         operations,  proposals,  projects,  contracts,  bids,  pricing,  costs,
         profitability, marketing plans and strategies, revenues and finances to
         the extent  not  subject to public  disclosure  requirements,  business
         relationships,  correspondence,  and  other  matters  related  to FGI's
         development and operation of the Business.

(i)      "Customer   Information"  shall  mean:  Information  that  FGI  or  the
         Partnerships  have  developed,   acquired,   organized,   compiled,  or
         maintained  by FGI  regarding  FGI's  customers,  former  customers and
         prospective  customers  while  developing  and  operating the Business,
         including,  but not limited to, information relating to their identity,
         location,  personnel,  usage of petroleum  products,  and incidental or
         related  appliances,  equipment  and supplies,  purchasing  experience,
         delivery  schedules and routing,  payment  habits,  credit  experience,
         ownership of storage facilities, contract renewal and expiration dates,
         pricing,  and other terms and conditions  contained in their  contracts
         with FGI or its predecessors.

17. Inventions and Patents.  Executive agrees that all inventions,  innovations,
improvements,  developments,  methods, designs, analyses, drawings, reports, and
all similar or related  information  which relates to the  Companies'  actual or
anticipated  business (to the extent the Executive is aware  thereof),  research
and  development  or  existing  or future  products  or  services  and which are
conceived,  developed or made by Executive  while  employed by FGI or any of its
affiliates  (whether prior to or during the Employment  Period) ("Work Product")
belong to FGI or such other  affiliate,  and Executive hereby assigns to FGI his
entire  right,  title and  interest  in any such Work  Product.  Executive  will
promptly  disclose such Work Product to the Chief  Executive  Officer of FGI and
perform all actions  reasonably  requested by the Chief Executive Officer of FGI
(whether during or after Executive's Employment Period) to establish and confirm
such ownership (including, without limitation,  assignments, consents, powers of
attorney and other instruments).

18.      Noncompete; Nonsolicitation.

(a)      Executive acknowledges that in the course of his employment with FGI he
         will  become  familiar  with  Confidential  Information  and  that  his
         services  will be of special,  unique and  extraordinary  value to FGI.
         Therefore, Executive agrees that, during the time he is employed by FGI
         pursuant  hereto  and for two (2)  years  thereafter  (the  "Noncompete
         Period"), in the entire

         United  States  and any  other  countries  in which  the  Companies  or
         Partnerships are providing,  or actively  planning to provide goods and
         services,   he  will  not:  (i)  compete  with  the  Companies  or  the
         Partnerships in the sale of propane or related competitive  products or
         services; (ii) directly or indirectly, in person or through others, for
         the benefit of Executive or another, call upon, solicit,  sell, divert,
         take away,  deliver to,  accept  business  or orders from or  otherwise
         engage in  propane-related  business  with FGI's  Customers (as defined
         below), nor shall Executive,  in any capacity,  assist others to do so;
         or  (iii)   directly  or   indirectly   interfere   with  the  business
         relationship  between FGI and any FGI Customers.  The  restrictions  in
         this paragraph apply only to products and services that are competitive
         with the Business and/or products and services of FGI.

(b)      While employed by FGI and for two (2) years thereafter,  Executive will
         not (i)  interfere  with,  disrupt,  or attempt  to disrupt  relations,
         contractual  or otherwise,  between FGI and its  employees,  vendors or
         suppliers,  or (ii) hire or take away, directly or indirectly,  any FGI
         employee.

(c)      "Customers" shall mean: (i) all persons, firms, corporations, and other
         business  enterprises for whom FGI performs or performed services or to
         whom FGI sells or sold  products,  appliances,  equipment,  or supplies
         during the two year  period  immediately  prior to the  termination  of
         Executive's employment; and (ii) all persons,  corporations,  and other
         business  enterprises  actively  solicited  by FGI or to  whom  FGI has
         furnished a quotation  or proposal or estimate for the sale of products
         or  services  within  the one  year  period  immediately  prior  to the
         termination of Executive's employment.  Customers of FGI shall include,
         but not be limited to, those for whom either  Executive or anyone under
         Executive's supervision provided products or services and those who may
         have become  customers  through the efforts of Executive while employed
         by FGI.

(d)      FGI and Executive  agree that:  (i) the covenants set forth in Sections
         16 and 18 are reasonable in geographical  and temporal scope and in all
         other respects, (ii) FGI would not have entered into this Agreement but
         for these  covenants of  Executive  contained  herein,  and (iii) these
         covenants  contained  herein  have been made in order to induce  FGI to
         enter into this Agreement.

(e)      If, at the time of  enforcement  of this Section 18, a court or arbiter
         shall hold that the duration,  scope or area restrictions stated herein
         are unreasonable under  circumstances then existing,  the parties agree
         that  the  maximum  duration,  scope  or  area  reasonable  under  such
         circumstances  shall be substituted for the stated  duration,  scope or
         area and that the court or  arbitrator  shall be  allowed to revise the
         restrictions  contained  herein to cover the maximum period,  scope and
         area permitted by law.

(f)      FGI does not have to enforce  all  provisions  of Sections 16 and 18 of
         this Agreement at all times to preserve its rights to enforce any other
         provision  of  Sections  16 and 18 of this  Agreement.  Executive  also
         acknowledges FGI does not have to enforce similar agreements with other
         employees and/or officers to preserve its rights to enforce Sections 16
         and 18 of this Agreement with Executive.

(g)      Executive  shall  provide  a copy  of  this  Agreement  to  any  new or
         potential   employer  which  competes  against  the  Companies  or  the
         Partnerships.

<PAGE>

19.      Arbitration.

(a)      Except as set forth in Section 19(c), arbitration shall be the sole and
         exclusive remedy for any dispute,  claim, or controversy of any kind or
         nature (a  "Claim")  arising  out of,  related  to, or  connected  with
         Executive's  employment  relationship  with FGI, or the  termination of
         Executive's  employment  relationship  with  FGI,  including  any Claim
         against any parent,  subsidiary,  or  affiliated  entity of FGI, or any
         director, officer, general or limited partner, employee or agent of FGI
         or of any such parent, subsidiary or affiliated entity.

(b)      This agreement to arbitrate  specifically includes (without limitation)
         any dispute between or among the parties to this Agreement  relating to
         or  in  respect  of  this  Agreement,   its   negotiation,   execution,
         performance,  subject  matter,  or any  course of conduct or dealing or
         actions  under or in respect  of this  Agreement,  all claims  under or
         relating to any federal,  state or local law or regulation  prohibiting
         discrimination,   harassment  or  retaliation  based  on  race,  color,
         religion,  national origin, sex, age, disability or any other condition
         or characteristic protected by law; demotion,  discipline,  termination
         or other  adverse  action in violation of any  contract,  law or public
         policy;  entitlement to wages or other economic  compensation;  and any
         claim for personal, emotional, physical, economic or other injury.

(c)      This  agreement to arbitrate  does not apply to any legal action by FGI
         seeking  injunctive  relief or  damages  for breach or  enforcement  of
         Sections 16 or 18 of the  Agreement.  This  agreement to arbitrate also
         does  not  apply  to  any  claims  by   Executive:   (a)  for  workers'
         compensation  benefits;  (b) for unemployment  insurance benefits;  (c)
         under a benefit  plan where the plan  specifies a separate  arbitration
         procedure;  (d)  filed  with an  administrative  agency  which  are not
         legally subject to arbitration  under this Agreement;  or (e) which are
         otherwise expressly prohibited by law from being subject to arbitration
         under this Agreement.

     (d) Any party may demand  arbitration  by sending notice to the other party
as set forth in this  Agreement.  Any Claim  submitted to  arbitration  shall be
decided by a single,  neutral arbitrator (the "Arbitrator").  The parties to the
arbitration  shall  mutually  select the Arbitrator not later than 45 days after
service of the  demand for  arbitration.  If the  parties  for any reason do not
mutually  select the  Arbitrator  within the 45 day  period,  then any party may
apply to any court of competent  jurisdiction  to appoint a retired judge as the
Arbitrator.  The parties agree that arbitration shall be conducted in accordance
with the American Arbitration Association Rules for the Resolution of Employment
Disputes.  The Arbitrator shall apply the substantive  federal,  state, or local
law and statute of limitations governing any Claim submitted to arbitration. The
arbitration  shall take place at a mutually  agreeable site in Liberty or Kansas
City,  Missouri and shall be conducted  within one hundred  eighty (180) days of
the  receipt  by a party  of the  other  party's  demand  for  arbitration.  The
Arbitrator,  in making his  decision,  shall be bound to follow the  substantive
state and  federal  laws of  jurisprudence  as well as the  applicable  rules of
evidence in arriving at a decision.  The decision  rendered  shall be in writing
and delivered to the parties within thirty (30) days after the conclusion of the
arbitration.  The award of the Arbitrator  shall be final, and judgment upon the
award  rendered  may be entered  and  enforced  in any court,  state or federal,
having  jurisdiction.  In ruling  on any Claim  submitted  to  arbitration,  the
Arbitrator  shall have the  authority  to award only such  remedies  or forms of
relief as are provided for under the substantive law governing such Claim.

(e)      Any fees and costs  incurred in the  arbitration  (e.g.,  filing  fees,
         transcript  costs and  Arbitrator's  fees)  will be shared  equally  by
         Executive and FGI,  except that the Arbitrator may reallocate such fees
         among the parties if the Arbitrator determines that an equal allocation
         would impose an unreasonable financial burden on Executive. The parties
         shall be responsible  for their own attorneys'  fees and costs,  except
         that the Arbitrator  shall have the authority to award  attorneys' fees
         and costs to the prevailing party in accordance with the applicable law
         governing the dispute.

(f)      The  Arbitrator,  and not any  federal or state  court,  shall have the
         exclusive   authority   to   resolve   any   issue   relating   to  the
         interpretation,  formation or enforceability of this Agreement,  or any
         issue relating to whether a Claim is subject to arbitration  under this
         Agreement,  except  that any  party may bring an action in any court of
         competent  jurisdiction  to compel  arbitration in accordance  with the
         terms of this Agreement.

<PAGE>

497817.01 15 20. FGI's Right to Injunctive  Relief,  Tolling.  In the event of a
breach or threatened  breach of any of the  Executive's  duties and  obligations
under the terms and  provisions  of Sections  16, 17 or 18 hereof,  FGI shall be
entitled,  in addition to any other legal or  equitable  remedies it may have in
connection  therewith  (including  any right to damages that it may suffer),  to
temporary,  preliminary, and permanent injunctive relief restraining such breach
or threatened breach. The Executive hereby expressly  acknowledges that the harm
which  might  result to the  Business  as a result of any  noncompliance  by the
Executive  with any of the  provisions  of sections 16, 17 or 18 hereof would be
largely irreparable.

21. Judicial  Enforcement.  If any provision of this Agreement is adjudicated to
be  invalid or  unenforceable  under  applicable  law in any  jurisdiction,  the
validity  or  enforceability  of  the  remaining  provisions  thereof  shall  be
unaffected as to such  jurisdiction and such  adjudication  shall not affect the
validity or enforceability of such provisions in any other jurisdiction.  To the
extent that any  provision  of this  Agreement is  adjudicated  to be invalid or
unenforceable  because it is  overbroad,  that  provision  shall not be void but
rather  shall be  limited  only to the extent  required  by  applicable  law and
enforced as so limited.  The parties  expressly  acknowledge and agree that this
Section is reasonable in view of the parties' respective interests.

22.  Executive  Warranties  and  Representations.  The  Executive  warrants  and
represents  that the execution and delivery of the Agreement and the Executive's
employment  with FGI do not violate any previous  employment  agreement or other
contractual obligation of the Executive.

23.  Survival.  The provisions of this Agreement,  except as otherwise  provided
herein,   shall   continue  in  full  force  in  accordance   with  their  terms
notwithstanding any termination of Executive's employment by FGI.

24. Right to Recover  Costs and Fees.  The Executive and FGI undertake and agree
that if either the Executive or FGI breach or threaten to breach  Sections 16 or
18 of this  Agreement  (the  "Breaching  Party"),  the Breaching  Party shall be
liable for any attorneys' fees and costs incurred by the non-Breaching  Party in
enforcing the non-Breaching Party's rights hereunder.

25.  Executive  Right. If the Executive  believes that any benefit on account of
the termination of the Executive's service with FGI under this Agreement has not
been paid by FGI within  fifteen  (15) days after the date on which that benefit
should have been paid to the Executive  under the terms of this  Agreement,  the
Executive  may give notice to FGI of that  failure and the amount of the benefit
that should have been paid. FGI shall pay the Executive the amount  specified in
that notice within  thirty (30) days after its receipt of the notice;  provided,
however,  that the payment shall not preclude FGI from disputing that payment in
accordance with the arbitration provisions of this Agreement.

26. Entire Agreement,  Amendments and Modifications.  This Agreement constitutes
the entire agreement and  understanding of the parties  regarding the employment
of Executive  by FGI and  supersedes  all prior  agreements  and  understandings
between  the  Executive  and FGI to the  extent  that  any  such  agreements  or
understandings   conflict  with  the  terms  of  this  Agreement.   The  parties
specifically  agree that the  Option  Grantee  Agreement  entered  into  between
Executive and Ferrellgas is hereby  terminated.  No  modification,  amendment or
waiver of any of the provisions of this Agreement  shall be effective  unless in
writing specifically referring hereto, and signed by the parties hereto.

27. Assignments.  This Agreement shall be freely assignable by FGI to, and shall
inure to the benefit of and be binding upon,  its  successors and assigns and/or
any other entity which shall succeed to the business  presently  being conducted
by FGI or the Partnerships.  In that regard,  FGI shall assign and shall require
any successor,  whether in a Change of Control  transaction or not, of either of
the Companies or any of the  Partnerships  to expressly  assume in writing FGI's
obligations  under this Agreement  simultaneously  with the  consummation  of an
applicable  transaction,  which  assumption  shall not relieve FGI of any of its
obligations  hereunder.  Being a contract  for personal  services,  neither this
Agreement nor any rights hereunder shall be assigned by the Executive; provided,
however that the rights and benefits hereunder shall inure to and be enforceable
by the Executive's estate, heirs,  executors,  administrators or legal guardians
or representatives.

28. Choice of Forum;  Governing Law. In light of FGI's substantial contacts with
the  State of  Missouri,  the  parties'  interests  in  ensuring  that  disputes
regarding the interpretation, validity, and enforceability of this Agreement are
resolved on a uniform  basis,  and FGI's  execution  of, and the making of, this
Agreement in Missouri, the parties agree that: (i) any litigation involving this
Agreement  shall be filed and  conducted  in the state or federal  courts in the
State of Missouri;  and (ii) the Agreement  shall be  interpreted  in accordance
with and governed by the laws of the State of Missouri, without giving effect to
any choice of law or conflict of law  provision or rule (whether of the State of
Missouri or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Missouri.

29. Headings and Interpretation. Section headings are provided in this Agreement
for convenience only and shall not be deemed to substantively  alter the content
of such sections.  Whenever the words  "include",  "includes" or "including" are
used in this  Agreement,  they  shall be  deemed  to be  followed  by the  words
"without limitation". References to the singular or plural tense of a word shall
also include the plural or singular as the context may require.

30. Neutral  Construction.  Each party  acknowledges that in the negotiation and
drafting of this  Agreement,  they have been  represented by and relied upon the
advice of  counsel  of their  choice.  The  parties  affirm  that they and their
counsel have had a  substantial  role in such  negotiation  and drafting of this
Agreement, and, therefore, the parties agree that this Agreement shall be deemed
to have been drafted by all the parties hereto and the rule of  construction  to
the effect that any contract ambiguities are to be resolved against the drafting
party shall not be  employed  in the  interpretation  of this  Agreement  or any
exhibit or schedule hereto.

31. Notices.  Any notice,  request,  consent or communication  (collectively,  a
"Notice")  under this Agreement  shall be effective only if it is in writing and
(i) personally delivered with written receipt thereof, (ii) sent by certified or
registered mail,  return receipt  requested,  postage prepaid or (iii) sent by a
nationally  recognized  overnight  delivery  service,  with delivery  confirmed,
addressed as follows (or at such other address for a party as shall be specified
by like notice):

         (a)      If to the Executive, to:           James M. Hake
                                                     [Address]

         (b)      with a copy to:                    Bryan Cave LLP
                                                     One Kansas City Place
                                                     1200 Main Street
                                                     Kansas City, Missouri 64105
                                                     Attn:  Beth Romans Bower

         (c)      If to FGI, to:                     Ferrellgas, Inc.
                                                     One Liberty Plaza
                                                     Liberty, Missouri  64068
                                               Attention:  Mr. Danley K. Sheldon

                  A Notice  shall be deemed  to have  been  given as of the date
when (i)  personally  delivered as  indicated by date of receipt,  (ii) five (5)
days after the date when deposited with the United States certified mail, return
receipt requested, properly addressed, or (iii) when receipt of a Notice sent by
an overnight  delivery service is confirmed by such overnight  delivery service,
as the case may be, unless the sending party has actual  knowledge that a Notice
was not received by the intended recipient.

<PAGE>

32.  Counterparts.  This Agreement may be executed in one or more  counterparts,
each of which shall be deemed an original and together shall  constitute one and
the same Agreement.

                                    (The  remainder  of this  page has been left
blank intentionally.)

<PAGE>

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

FERRELLGAS, INC.                            EXECUTIVE

By:__________________
Name:________________                                             James M. Hake
Title:_______________

PLEASE NOTE:  BY SIGNING THIS  AGREEMENT,  EXECUTIVE IS HEREBY  CERTIFYING  THAT
EXECUTIVE (A) HAS RECEIVED A COPY OF THIS  AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING  IT; (B) HAS READ THIS  AGREEMENT  CAREFULLY  BEFORE  SIGNING  IT; (C)
UNDERSTANDS THAT THIS AGREEMENT CONTAINS A BINDING  ARBITRATION  PROVISION;  (D)
HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED  SATISFACTORY  ANSWERS TO ALL
SUCH QUESTIONS; AND (E) UNDERSTANDS EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THE
AGREEMENT.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]