Document:

Exhibit 10.19

 

ASSIGNMENT AND AMENDMENT AGREEMENT

 

THIS ASSIGNMENT AND AMENDMENT AGREEMENT (this “Assignment Agreement”)
is entered into as of the 20th day of May, 2009, by and between
Falcon Asset Securitization Company LLC (“Assignor”), and JS Siloed Trust (“Assignee”  or the “Trust”).

 

PRELIMINARY STATEMENTS

 

A.                                   This Assignment
Agreement is being executed and delivered in accordance with Section 12.1(b) of
that certain Third Amended and Restated Receivables Purchase Agreement dated as
of April 15, 2009 by and among Ferrellgas Receivables, LLC, Ferrellgas,
L.P., as Servicer, Falcon Asset Securitization Company LLC, Fifth Third Bank,
individually and as a Co-Agent, JPMorgan Chase Bank, N.A., as a Co-Agent and as
Agent, and the Financial Institutions party thereto (as amended, modified or
restated from time to time, the “Purchase Agreement”). 
Capitalized terms used and not otherwise defined herein are used with
the meanings set forth or incorporated by reference in the Purchase Agreement.

 

B.                                     Assignor is a
Conduit party to the Purchase Agreement, and Assignee wishes to become a
Conduit thereunder; and

 

C.                                     Assignor is
selling and assigning to Assignee all of Assignor’s rights and obligations
under the Purchase Agreement and the Transaction Documents, including, without
limitation, the Capital of Assignor’s Purchaser Interests as set forth herein.

 

AGREEMENT

 

The parties hereto hereby agree as follows:

 

1.                                       The sale,
transfer and assignment effected by this Assignment Agreement shall become
effective on May 20, 2009 (the “Effective Date”).  From and after the Effective Date, Assignee
shall be a Purchaser party to the Purchase Agreement for all purposes thereof
as if Assignee were an original party thereto and Assignee will be bound by all
of the terms and provisions contained therein,.

 

2.                                       At or before
12:00 noon (Chicago time) on the Effective Date, Assignee shall pay to
Assignor, in immediately available funds, an amount equal to the sum of (i) 
$                                  
(such amount, being hereinafter referred to as the “Assignee’s Capital”);
and (ii) any other costs and expenses agreed between Assignor and Assignee
(the “Assignee’s
Acquisition Cost”); whereupon, Assignor shall be deemed to have
sold, transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and Assignee shall be
deemed to have hereby irrevocably taken, received and assumed from Assignor,
all of Assignor’s Purchaser Interests and all related rights and obligations
under the Purchase Agreement and the Transaction Documents.

 

1

 

3.                                       From and after
the Effective Date, for so long as the Trust remains a party to the Purchase
Agreement, the Purchase Agreement is amended as follows:

 

(a)                                  All references
in the Purchase Agreement to “Falcon Asset
Securitization Company LLC,” “Falcon”,
the “Falcon Group” and the “Falcon Group Agent” shall be deemed to be
references to “JS Siloed Trust,” the “Trust,” the  “JS Group”
and “JS Group Agent,” respectively.

 

(b)                                 All references
in the Purchase Agreement to “Commercial
Paper” shall be deemed to be references to commercial paper notes
issued by Jupiter Securitization Company LLC (“Jupiter”), and all references
to any “Conduit” in the
definitions of “CP Costs” and “Pooled Commercial Paper” found in Exhibit I
to the Purchase Agreement shall be deemed to be references solely to Jupiter.

 

(c)                                  All references
to “Conduit”  in Sections 10.3, 14.5(b)(iii) and 14.6
of the Purchase Agreement and in the definitions of “Accounting Based Consolidation Event,” “Affected Entity,” “Funding Agreement” and “Funding Source” found in Exhibit I
to the Purchase Agreement shall be deemed to include both the Trust and Jupiter
and not Falcon.

 

4.                                       Concurrently
with the execution and delivery hereof, Assignor shall provide to Assignee
copies of all documents requested by Assignee which were delivered to Assignor
pursuant to the Purchase Agreement.

 

5.                                       Each of
Assignor and Assignee to this Assignment Agreement agrees that at any time and
from time to time upon the written request of any other party, it shall execute
and deliver such further documents and do such further acts and things as such
other party may reasonably request in order to effect the purposes of this
Assignment Agreement.

 

6.                                       By executing
and delivering this Assignment Agreement, Assignor and Assignee confirm to and
agree with each other, the JS Group Agent and the Financial Institutions as
follows:  (a) other than the
representation and warranty that it has not created any Adverse Claim upon any
interest being transferred hereunder, Assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made by any other Person in or in connection with
the Purchase Agreement or the Transaction Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Purchase
Agreement or any other instrument or document furnished pursuant thereto or the
perfection, priority, condition, value or sufficiency of any collateral; (b) Assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Seller, any Obligor or any Affiliate of the
Seller or the performance or observance by the Seller, any Obligor or any
Affiliate of the Seller of any of their respective obligations under the
Receivables or the Transaction Documents or any other instrument or document
furnished pursuant thereto or in connection therewith; (c) Assignee
confirms that it has received a copy of the Purchase Agreement and copies of
such other Transaction Documents, and other documents and information as it has
requested and deemed appropriate to make its own credit analysis and decision
to enter into this Assignment Agreement; (d) Assignee shall, independently
and without reliance upon any Agent, any other Purchaser or any Seller Party
and 

 

2

 

based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Purchase Agreement
and the Transaction Documents; (e) Assignee appoints and authorizes the
Agent and the JS Group Agent to take such action as agent on its behalf and to
exercise such powers under the Transaction Documents as are delegated to the
Agent and the JS Group Agent, respectively, by the terms thereof, together with
such powers as are reasonably incidental thereto; and (f) Assignee agrees
that it shall perform in accordance with their terms all of the obligations
which, by the terms of the Purchase Agreement and the other Transaction
Documents, are required to be performed by it as a Purchaser.

 

7.                                       Each of
Assignor and Assignee represents and warrants to and agrees with the Falcon
Group Agent that it is aware of and shall comply with the provisions of the
Purchase Agreement, including, without limitation, Sections 14.5 and 14.6
thereof.

 

8.                                       THIS ASSIGNMENT
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

9.                                       Assignee hereby
covenants and agrees that, prior to the date which is one year and one day
after the payment in full of all senior indebtedness for borrowed money of
Jupiter, it shall not institute against, or join any other Person in
instituting against, Jupiter any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.

 

[Signature Page Follows]

 

3

 

IN WITNESS WHEREOF, the parties
hereto have caused this Assignment Agreement to be executed by their respective
duly authorized officers of the date hereof.

 

	
   

  	
  FALCON ASSET SECURITIZATION
  COMPANY LLC,

  
	
   

  	
  AS
  ASSIGNOR

  
	
   

  	
   

  
	
   

  	
  BY: JPMORGAN CHASE BANK,
  N.A., AS ATTORNEY-IN-FACT

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura Chittick

  
	
   

  	
  Name:

  	
  Laura Chittick

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JS SILOED TRUST, AS ASSIGNEE

  
	
   

  	
   

  
	
   

  	
  BY: JPMORGAN CHASE BANK,
  N.A., AS ADMINISTRATIVE TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura Chittick

  
	
   

  	
  Name:

  	
  Laura Chittick

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

Acknowledged and agreed as of the date first above written:

 

FERRELLGAS RECEIVABLES, LLC

 

 

	
  By:

  	
  /s/ J. Ryan VanWinkle

  	
   

  
	
  Name:

  	
  J. Ryan VanWinkle

  	
   

  
	
  Title:

  	
  Senior Vice President and
  Chief Financial Officer

  	
   

  

 

4

 

JUPITER SECURITIZATION
COMPANY, LLC

 

BY:  JPMORGAN CHASE BANK, N.A., AS
ATTORNEY-IN-FACT

 

 

	
  By:

  	
  /s/ Laura Chittick

  	
   

  
	
  Name:

  	
  Laura Chittick

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

JPMORGAN CHASE BANK, N.A.,

Individually
as a Financial Institution, as a Co-Agent and as Agent

 

 

	
  By:

  	
  /s/ Laura Chittick

  	
   

  
	
  Name:

  	
  Laura Chittick

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

5Exhibit 10.22

 

FERRELL COMPANIES, INC.1998

INCENTIVE COMPENSATION PLAN

 

As Amended and Restated effective as
of October 11, 2004

 

1.     PURPOSE. The purposes of the Ferrell
Companies, Inc. 1998 Incentive Compensation Plan (the “Plan”) are as
follows:

 

(a)                                  to allow upper
middle and senior level managers of Ferrellgas, Inc. (“FGI”) to
participate in the equity growth of Ferrell Companies, Inc. (“FCI”) and,
indirectly (through its “subsidiary” holding), in the equity growth of
Ferrellgas Partners, L.P. (the “Partnership”) and its subsidiaries (with FCI,
FGI, the Partnership and its subsidiaries being collectively referred to herein
as “Companies”);

 

(b)                                 to generate an
increased incentive to contribute to the Partnership’s future success and
prosperity and to focus on the value growth of FCI; and

 

(c)                                  to focus on
profitable Partnership growth and acquisition activities that will enable
subordinated Partnership units (“Subordinated Units”) held by FCI to convert to
common Partnership units (“Common Units”), to increase the value of all
Partnership Units (including both Common and Subordinated Units) and to
increase the equity value of FCI, through an increasing Partnership value, a
maximization of Partnership distributions, a reduction of FCI debt, and an
optimization of share value growth for the FCI shares held by FCI’s employee
stock ownership plan (its “ESOP”).

 

Unless defined in the sentence or paragraph in
which they are used, definitions used herein are set forth in Section 9.9
below. The following provisions constitute an amendment, restatement and
continuation of the Plan effective as of October 11, 2004.

 

2.
    ADMINISTRATION.

 

2.1                               Administration
by Committee. The Plan shall be administered by the FCI Options
Committee (comprised of three members of the FCI’s or FGI’s Management
Committee, and generally including the CEO and CFO of FGI, as well as the
senior personnel manager of FGI) (the “Committee”).

 

2.2                               Authority. Subject to the
provisions of the Plan, the Committee shall have the authority to (a) interpret
the provisions of the Plan, and prescribe, amend, and rescind rules and
procedures relating to the Plan, (b) grant incentives under the Plan, in
such forms and amounts and subject to such terms and conditions as it deems
appropriate, including, without limitation, incentives which are made in
combination with or in tandem with other incentives (whether or not
contemporaneously granted) or compensation or in lieu of current or deferred
compensation, (c) modify the terms of, cancel and reissue, or repurchase
outstanding incentives, subject to Section 9.7, (d) suspend the
operation of the Plan (or any portion thereof) pursuant to the provisions of Section 9.8
hereinbelow and (e) make all other determinations and take all other
actions as it deems necessary or desirable for the administration of the Plan.
The determination of the Committee on matters within its authority shall be
conclusive and binding on Companies and all other persons. The Committee shall
comply with all applicable law in administering the Plan.

 

3.    PARTICIPATION. Subject to the
terms and conditions of the Plan, the Committee shall designate from time to
time employees of Companies (including, without limitation, employees who are
officers and/or directors of any Companies entity) who shall receive incentives
under the Plan (“Participants”).

 

4.
    SHARES SUBJECT TO THE PLAN

 

4.1                               Number of
Shares Reserved. Subject to adjustment in accordance with Sections
4.2 and 4.3, the aggregate number of shares of FCI common stock (“Common
Stock”) available for incentives under the Plan shall be that number of shares
of Common Stock equaling 20% of FCI’s outstanding Common Stock shares, on a
fully-diluted basis, immediately following the date on which the ESOP has
acquired all of the outstanding Common Stock shares.

 

All
shares of Common Stock issued under the Plan may be authorized and unissued
shares or treasury shares. In addition, all of such shares may, but need not,
be issued pursuant to the exercise of nonqualified stock options and/or
“incentive stock options” (as defined in section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”)).

 

4.2            Reusage
of Shares.

 

(a)                             In the event of
the termination (by reason of forfeiture, expiration, cancellation, surrender,
or otherwise) of any incentive under the Plan, that number of shares of Common
Stock that was subject to the incentive but not delivered shall be available
again for incentives under the Plan.

 

(b)                                 In the event
that shares of Common Stock are delivered under the Plan and are thereafter
forfeited or reacquired by FCI (whether or not pursuant to rights reserved upon
the award thereof), such forfeited or reacquired shares shall be available
again for incentives under the Plan.

 

4.3                               Adjustments
to Shares Reserved. In the event of any merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend, stock split, reverse
stock split, exchange, or other distribution with respect to shares of Common
Stock or other change in the corporate structure or capitalization affecting
the Common Stock (each being an “Adjustment”), the type and number of shares of
stock which are or may be subject to incentives under the Plan and the terms of
any outstanding incentives (including the price at which shares of stock may be
issued pursuant to an outstanding incentive) shall be equitably adjusted by the
Committee, in its sole discretion, to preserve both the value of incentives
awarded or to be awarded to Participants under the Plan and the percentage of
outstanding Common Stock shares (on a fully-diluted basis) available for
incentives under the Plan immediately prior to the date of the Adjustment
(taking into account both incentives granted but not yet distributed from the
Plan and incentives not yet granted under the Plan).

 

 

5.
    STOCK OPTIONS.

 

5.1                               Awards. Subject to the
terms and conditions of the Plan, the Committee shall designate the individuals
to whom “nonqualified stock options” to purchase shares of Common Stock (“Stock
Options”) are to be awarded under the Plan and shall determine the number, and
terms of the Stock Options to be awarded to each of them. Unless and until the
Committee makes a decision to the contrary, the Participants to whom Stock
Options are granted hereunder shall be designated from the following two employee
groups:

 

(i)            field
employees who are at or above the “area manager” designation level; and

 

(ii)           corporate
employees who are deemed by the Committee to have a material positive impact on
developing and implementing the strategies, systems or processes that support
the operations of the Partnership and contribute to the achievement by the
Partnership of its financial and operational goals and the maximization of the
equity value of FCI.

 

Stock Options awarded under the Plan will, unless and
until the Committee makes a decision to the contrary, be classified as either
“Tranche A Options” or “Tranche B Options.” Each Stock Option awarded under the
Plan shall be a “nonqualified stock option” for tax purposes.

 

5.2                               Adjustment
of Awards. If a Participant experiences a material change in
job status (or other similar compensation measurement as may, from time to
time, be utilized by the Committee), the Committee may, in its sole discretion,
determine whether any or all of the unvested portion of the Participant’s Stock
Option(s) shall be taken from the Participant and returned to FCI. In
addition, in the event of a Change in Control, the Committee may, in its sole
discretion, determine what adjustments, if any, should be made to
(i) Stock Options awarded hereunder and/or (ii) the Plan.

 

5.3                               Time
for Exercise. Each Stock Option shall be exercisable in accordance
with the following rules:

 

(a)                                  Each Stock
Option granted prior to September 28, 2004, shall be exercisable only if
it is vested (as described in Section 5.4 below) and, then, only to the
extent, at the times and until the expiration date(s) described in the
following table and the remainder of this Section 5.3(a):

 

	
  Exercise
  Event

  	
   

  	
  Percentage
  of Vested Portion of

  Tranche A Options Which May be

  Exercised on Specified Exercise

  Dates

  	
   

  	
  Percentage
  of Vested Portion of

  Tranche B Options Which May be

  Exercised on Specified Exercise

  Dates

  
	
  Full
  repayment of the “FCI Senior Notes”
  (as defined in  Section 9.9
  below) (“Trigger  1”)

  	
   

  	
  Up
  to 25% of the vested portion of  a Participant’s Stock Option(s)  may be exercised, upon (and
  only  upon) the
  first odd-numbered year  “Exercise Date” (as defined in  Section 9.9 below) next following  such repayment of the FCI
  Senior  Notes.

  	
   

  	
  Up
  to 25% of the vested portion of  a Participant’s Stock Option(s) may  be exercised, upon (and
  only upon)  the first
  even-numbered year  “Exercise
  Date” next following such  repayment of the FCI Senior Notes.

  
	
  Full
  repayment of the  “Subordinated
  Notes” (as  defined in
  Section 9.9  below), and
  assuming Trigger  1 occurs
  (“Trigger 2”)

  	
   

  	
  An
  additional 25% of the vested  portion of a Participant’s Stock  Option(s) may be
  exercised, upon  (and only
  upon) the first  odd-numbered
  year Exercise Date  next following
  such repayment of  the
  Subordinated Notes.

  	
   

  	
  An
  additional 25% of the vested  portion of a Participant’s Stock  Option(s) may be
  exercised, upon  (and only
  upon) the first  even-numbered
  year Exercise Date  next following
  such repayment of  the
  Subordinated Notes.

  
	
  Assuming
  that both Trigger 1 and Trigger 2 have occurred:

  	
   

  	
  The
  vested portion of a Participant’s Stock Option(s) may  be exercised up to the
  following  percentage on
  the Exercise Date  occurring in
  each of the following years:  

  	
   

  	
  The
  vested portion of a Participant’s Stock Option(s) may  be exercised up to the
  following  percentages on
  the Exercise Date  occurring in
  each of the followin years:  

  
	
   

  	
   

  	
  2009
  60%

  2011 80%

  2013 100%

  2015 100%

  2017 100%

  	
   

  	
  2010
  70%

  2012 90%

  2014 100%

  2016 100%

  2018 100%

  

 

In the event that either or both of Trigger 1 and
Trigger 2 has (have) not occurred by 2013 (for Tranche A Options) or 2014 (for
Tranche B Options), then (i) 100% of the vested portion of a Participant’s
Tranche A Option(s) may be exercised on the Exercise Date occurring in
each of 2013, 2015 and 2017; and (ii) to up to 100% of the vested portion
of a Participant’s vested Tranche B Option(s) may be exercised on the
Exercise Date occurring in each of 2014, 2016 and 2018.

 

(b)                                 Each Stock
Option granted on or after September 28, 2004, shall be exercisable only
if it is vested (as described in Section 5.4 below) and, then, only to the
extent, at the times and until the expiration date(s) established by the
Committee and set forth in the stock option agreement evidencing the grant of
such Stock Option.

 

 

5.4          Vesting.
Each Stock Option shall vest in accordance with the following:

 

(a)                                  Subject to the
provisions of paragraph (c), Tranche A Options and Tranche B Options granted
prior to September 28, 2004, shall vest in accordance with the following
schedule:

 

	
  Anniversary
  of

  Stock Option

  Grant Date

  	
   

  	
  Annual

  Vested Percentage

  	
   

  	
  Cumulative

  Vested

  Percentage

  
	
  1st

  	
   

  	
  5%

  	
   

  	
  5%

  
	
  2nd

  	
   

  	
  5%

  	
   

  	
  10%

  
	
  3rd

  	
   

  	
  5%

  	
   

  	
  15%

  
	
  4th

  	
   

  	
  5%

  	
   

  	
  20%

  
	
  5th

  	
   

  	
  5%

  	
   

  	
  25%

  
	
  6th

  	
   

  	
  10%

  	
   

  	
  35%

  
	
  7th

  	
   

  	
  10%

  	
   

  	
  45%

  
	
  8th

  	
   

  	
  10%

  	
   

  	
  55%

  
	
  9th

  	
   

  	
  10%

  	
   

  	
  65%

  
	
  10th

  	
   

  	
  10%

  	
   

  	
  75%

  
	
  11th

  	
   

  	
  10%

  	
   

  	
  85%

  
	
  12th

  	
   

  	
  15%

  	
   

  	
  100%

  

 

(b)                                 Subject to the provisions
of paragraph (c), Stock Options granted on or after September 28, 2004,
shall vest in accordance with the vesting schedule established by the Committee
and set forth in the stock option agreement evidencing the grant of such Stock
Options.

 

(c)                                  Notwithstanding
the vesting schedule set forth in the immediately preceding paragraphs or in a
Participant’s stock option agreement, as applicable, all Stock Options granted
hereunder shall fully vest upon (i) a “Change in Control” of the
Partnership or FCI, (ii) the Participant’s death, or “permanent
disability” or (iii) the Participant’s retirement from FCI at or after
attainment of age 65. A Stock Option, whether or not vested, will be forfeited,
no longer exercisable and, if vested,  divested  if (I) a Participant’s employment with
FGI is terminated for gross insubordination (as determined by FGI’s Board of
Directors) or (II) the Participant enters a plea of “guilty” or “nolo
contendre” to, or is convicted by a court of competent jurisdiction of, a felony.

 

5.5                               Option
Price. The option price per share (“Option Price”) for any Stock Option
awarded shall not be less than the “Fair Market Value” of a share of Common
Stock on the date the Stock Option is granted. Recipients of Stock Options
shall be timely notified no less frequently than twice annually of the Fair
Market Value of a share of Common Stock.

 

5.6                               Manner
of Exercise. The vested portion of a Stock Option may be
exercised, in whole or in part, once a year on the Exercise Date by notice to
FCI specifying the number of whole (not fractional) shares of Common Stock to
be purchased. Such notice shall be given at least thirty (30) days prior to the
Exercise Date and it shall be accompanied by (or provision shall be made for) (i) payment
of the Option Price by a certified or cashiers check or wire transferpayable to
the order of the Company on or prior to the Exercise Date; (ii) an
executed share transfer restriction agreement (the form of which shall either
be attached to the agreement memorializing the Participant’s Stock Option grant
or be provided to the Participant prior to the first Exercise Date for the
Stock Option); and (iii) such other documents or representations
(including, without limitation, representations as to the intention of the
Participant or his/her successor to acquire the shares for investment) as the
Company may reasonably request in order to comply with securities, tax or other
laws then applicable to the exercise of the Stock Option.

 

The vested portion of the Stock Option so granted may be exercised until
(and must be exercised on or before) the expiration date specified by the
Committee at the time of grant. Subject to the next succeeding sentence, if the
Participant becomes no longer employed by a Companies entity prior to the exercise
of all of the vested portion of the Participant’s Stock Option(s) (and the
Participant is not immediately thereafter employed with another Companies
entity), the 
nonvested  portion of
the Participant’s Stock Option(s) shall expire, terminate and be forfeited,
and the Participant will be permitted to exercise the vested portion of his/her
Stock Option(s) during the times set for exercise as described in the
table set forth in Section 5.3 above. In such case, the Committee may, in
its sole discretion, give the terminated participant one opportunity to
exercise all of the vested portion of his/her Stock Option(s) (with the
opportunity specifying the early Exercise Date on which such vested portion
must be exercised). If the Participant is given such an opportunity and chooses
not to exercise all of the remaining vested portion of his/her remaining Stock
Option(s) by the early Exercise Date, such vested portion of the Stock
Option(s) will immediately expire, terminate and be forfeited as of such
date.

 

 

5.7                               ESOP
Call. All shares acquired bya Participant pursuant to the exercise of a
StockOption shall be subject to a “call option” which shall be granted to and
may be (a) exercised by the Ferrell Companies, Inc. Employee Stock
Ownership Trust (the “Trust”) and (b) assigned by the trustee of the Trust
(the “Trustee”) to FCI. Although the call option may generally be exercised by
either (i) the Trust or (ii) by the Trust’s assignee, if applicable,
it may not be exercised during the first six months following the Exercise
Date.

 

The
shares acquired by a Participant pursuant to such exercise may be called by the
Trust (or its assignee) at their Fair Market Value as of the date of the call
(the “Call Date”) by giving the Participant who acquired the shares notice of
the Trust’s (or its assignee’s) intention to call the shares (a “call notice”)
at least ten (10) business days prior to the Call Date. As stated in Section 5.5
above, Participants receiving grants of Stock Options shall be notified every
six (6) months of the Fair Market Value of a share of Common Stock.

 

A Participant receiving a call notice shall deliver to the Trustee (or
the Trust’s assignee, as applicable) stock certificate(s) for the called
shares prior to the Call Date. The Participant’s sale of the called shares
shall be deemed to have occurred as of the Call Date, with the purchase price
being payable in one lump sum by the Trust (or its assignee) within ninety (90)
days of any Call Date not occurring on July 31st or January 31st and
within ninety (90) days after the receipt of the ESOP financial advisor’s
determination of the Fair Market Value of the called shares as of any July 31st
or January 31st Call Date. Notwithstanding the immediately preceding
sentence, however, if a Participant’s employment is terminated prior to the
Participant’s exercise of all of the vested portion of his/her Stock Option and
the Committee gives the Participant one opportunity to exercise such vested
portion as of an early Exercise Date, the purchase price to be paid by the
Trust (or its assignee) for any early Exercise Date shares acquired pursuant to
its call option may be, in the sole discretion of the Committee, payable in the
form of a five-year promissory note given by the Trust (or its assignee) (with (i) interest
payable at the lowest percentage of libor which equals or exceeds the
“Applicable Federal Rate” and (ii) semi-annual equal payments of principal
and interest being made during the five-year payment period).

 

5.8                               Put Option. All shares
acquired by a Participant pursuant to the exercise of a Stock Option shall be
subject to a “put option” (the “Put Option”) which shall be granted as of the
acquisition date to and may be exercised by the Participant or other party
receiving such shares (as provided hereunder, the “Other Party”) if, at the
time of their receipt, the shares are not readily tradable on an established
market, as defined in Section 409(h) of the Code and the Treasury
regulations promulgated thereunder. The Put Option shall permit the Participant
or Other Party to sell some or all of the shares acquired at their Fair Market
Value as of (and  only  as of) any July 31st or January 31st
following the Exercise Date (each being a “Permissible Put Date”). The Put
Option may not, however, be exercised during the first six months following the
Exercise Date  and  it may no longer  ever be exercised
once a call notice (as described in Section 5.7 above) has been sent or
delivered by the Company.

 

Shares
acquired pursuant to the exercise of a Participant’s Stock Option may be put by
the Participant or Other Party at their Fair Market Value as of a Permissible
Put Date by giving the Company notice of the Participant’s (or Other Party’s)
intention to put the shares (a “put notice”) at least ten (10) business
days prior to the Permissible Put Date. As is stated in Section 5.5 above,
Participants receiving grants of Stock Options shall be notified every six (6) months
of the Fair Market Value of a share of a share of Common Stock.

 

In the event the Company receives a put notice, the sale pursuant to the
put shall be deemed to have occurred as of the Permissible Put Date referenced
in the Put Notice, with the purchase price being payable by the Company (or its
assignee) in one lump sum within ninety (90) days after the receipt of the ESOP
financial advisor’s determination of the Fair Market Value of the put shares as
of the specified Permissible Put Date. Notwithstanding the immediately
preceding sentence, however, if a Participant’s employment is terminated prior
to the Participant’s exercise of all of the vested portion of his/her Stock
Option and the Committee gives the Participant one opportunity to exercise such
vested portion as of an early Exercise Date, the purchase price to be paid by
the Company (or its assignee) for any early Exercise Date shares acquired
pursuant to the Put Option may be, in the sole discretion of the Committee,
payable in the form of a five-year promissory note given by the Company (or its
assignee) (with (i) interest payable at the lowest percentage of libor
which equals or exceeds the “Applicable Federal Rate” and (ii) semi-annual
equal payments of principal and interest being made during the five-year
payment period).

 

5.9                               Share
Restrictions. The exercise of a Participant’s Stock Option shall
be conditioned upon the Participant’s execution of a share transfer restriction
agreement (which shall either be attached to the agreement memorializing the
Participant’s Stock Option grant or provided to the Participant prior to the
first Exercise Date for the Stock Option so granted). Unless and until the
Committee makes a decision to the contrary, all shares purchased pursuant to
the exercise of Stock Options granted hereunder (i) must be held for at
least, and shall be non-transferable during, the six-month period immediately
following the Exercise Date; (ii) will be subject to the call option
described in Section5.7 above; and (iii) will be subject to the Put Option
described in Section 5.8 above.

 

6.     STOCK APPRECIATION RIGHTS.

 

6.1                               Grant
of SARs. Subject to the terms and conditions of the Plan, the
Committee shall designate the employees to whom stock appreciation rights
(“SARs”) are to be awarded under the Plan and shall determine the number, type
and terms of the SARs to be awarded to each of them. An SAR may be granted in
tandem with a Stock Option granted under the Plan, or the SAR may be granted on
a free-standing basis. Tandem SARs may be granted either at or after the time
of grant of a Stock Option, provided that, in the case of an incentive stock
option, a tandem SAR may be granted only at the time of the grant of such Stock
Option. The grant price of a tandem SAR shall equal the option price of the
related Stock Option and the grant price of a free-standing SAR shall be equal
to the Fair Market Value of a share of Common Stock on the SAR’s grant date.

 

6.2                               Exercise
of Tandem SARs. Tandem SARs may be exercised for all or part of the
shares subject to the related option upon the surrender of the right to
exercise the equivalent portion of the related Stock Option. A tandem SAR shall
terminate and no longer be exercisable upon termination or exercise of the
related Stock Option. A tandem SAR may be exercised only with respect to
the shares for which its related option is then exercisable.

 

6.3                               Exercise
of Free-Standing SARs. Free-standing SARs may be exercised upon such
terms and conditions as the Committee, in its sole discretion, determines.

 

6.4                               Term
of SARs. The term of an SAR granted under the Plan shall be determined by the
Committee in its sole discretion; provided, however, that such term shall not
exceed the option term in the case of a tandem SAR, or ten years in the case of
a free-standing SAR.

 

 

6.5                               Payment
of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from Companies in an amount determined by
multiplying:

 

(a)                                  The excess of
the Fair Market Value of a share of Common Stock on the date of exercise over
the “grant price” of the SAR; by

 

(b)                                 The number of
shares with respect to which the SAR is exercised.

 

At the discretion of the
Committee, the payment to be made upon an SAR exercise may be in cash, in
shares of Common Stock of equivalent value, or in some combination thereof.

 

7.
    PERFORMANCE SHARES.

 

7.1                               Awards. Subject to the
terms and conditions of the Plan, the Committee shall designate the employees
to whom Performance Shares are to be awarded and determine the number of shares
and the terms and conditions of each such award. Subject to the terms of Section 7.3
below and the immediately preceding sentence, each Performance Share shall
entitle the Participant to a payment in the form of one share of Common Stock
as soon as reasonably practicable following the date on which the specified
performance goals and other terms and conditions specified by the Committee are
attained (the “Attainment Date”).

 

7.2                               No
Adjustments. Except as otherwise provided by the Committee or in
section 4.3 hereof, no adjustment shall be made in Performance Shares awarded
on account of cash dividends which may be paid or other rights which may be
provided to the holders of Common Stock prior to the end of any performance
period.

 

7.3                               Substitution
of Cash. The Committee may, in its sole discretion,
substitute cash equal to the Fair Market Value of shares of Common Stock
otherwise required to be issued to a Participant hereunder (with such Fair
Market Value being the Fair Market Value most recently determined by the ESOP
financial advisor immediately prior to the Attainment Date).

 

8.    OTHER
INCENTIVES. In addition to the incentives described in Sections
5 through 7 above and subject to the terms and conditions of the Plan, the
Committee may grant other incentives (“Other Incentives”), payable in cash or
in stock, under the Plan as it determines to be in the best interest of
Companies.

 

9.
    GENERAL

 

9.1                               Effective
Date. The Plan was adopted by the Board of Directors effective as of July 17,
1998.

 

9.2                               Duration. The Plan shall
remain in effect until all incentives granted under the Plan have been
satisfied by the issuance of shares of Common Stock, lapse of restrictions or
the payment of cash, or have been terminated in accordance with the terms of
the Plan or the incentive. Notwithstanding any other provision of the Plan to
the contrary, no Stock Option which is intended to be an incentive stock option
shall be granted after July 17, 2008 and no incentive stock option shall
be exercisable after the expiration of ten (10) years from the date it is
granted.

 

9.3                               Non-transferability
of Incentives. No incentive granted under the Plan may be
transferred, pledged, or assigned by the employee except by will or the laws of
descent and distribution in the event of death, and FCI shall not be required
to recognize any attempted assignment of such rights by any Participant. During
a Participant’s lifetime, awards may be exercised only by the Participant or by
the Participant’s guardian or legal representative. Notwithstanding the
foregoing, at the discretion of the Committee, a grant of an award may (but
need not) permit the transfer of the award by the Participant solely to members
of the Participant’s immediate family or trusts or family partnerships for the
benefit of such persons, subject to such terms and conditions as may be
established by the Committee.

 

9.4                               Compliance
with Applicable Law and Withholding.

 

(a)                                  The award of any
benefit under the Plan may also be made subject to such other provisions as the
Committee determines appropriate, including, without limitation, provisions to
comply with federal and state securities laws or stock exchange requirements.

 

(b)                                 If, at any time,
FCI, in its sole discretion, determines that the listing, registration,
qualification of any type of incentive, or the shares of Common Stock issuable
pursuant thereto, or availability of exemption is necessary on any securities
exchange or under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary or
desirable, the exercise or issuance of shares of Common Stock pursuant to any
incentive, or the removal of any restrictions imposed on shares subject to an
incentive, may be delayed until such listing, registration, qualification,
exemption, consent, or approval is effected.

 

(c)                                  The Companies’
entities shall have the right to withhold from any award under the Plan or to
collect as a condition of any payment under the Plan, as applicable, any taxes
required by law to be withheld. To the extent permitted by the Committee, to
fulfill any tax withholding obligation, a Participant may elect to have any
distribution otherwise required to be made under the Plan (or a portion
thereof) to be withheld or, where Stock Options are to be exercised, the
Participant may use shares received from the exercise of the Stock Option.

 

9.5                               No Continued
Employment. Participation in the Plan will not affect any right
any entity of Companies has to terminate the employment of a Participant or
give any Participant the right to be retained in the employ of Companies or any
right or claim to any benefit under the Plan unless such right or claim has
specifically accrued under the terms of any incentive under the Plan.

 

 

9.6                               Treatment
as a Stockholder. No incentive granted to a Participant under the Plan
shall create any rights in such Participant as a stockholder of FCI until
shares of Common Stock related to the incentive are registered in the name of
the Participant.

 

9.7                               Amendment
or Discontinuation of the Plan. The Board of Directors may
amend, suspend, or discontinue the Plan at any time; provided, however, that (a)  the Committee  may amend or suspend the Plan to avoid the
occurrence of any of the events/circumstances described in Clauses (i) thru
(iii) in Section 9.8 below; and (b), other than such an amendment or
suspension by the Committee, no amendment, suspension or discontinuance shall
adversely affect any outstanding benefit and if any law, agreement or exchange
on which Common Stock is traded requires stockholder approval for an amendment
to become effective, no such amendment shall become effective unless approved
by vote of FCI’s stockholders.

 

9.8                               Limitations
on Applicability. No Plan provision shall be applicable if its
application would (i) cause a default under the terms of an extension of
credit made to any Companies’ entity, or (ii) have an effect on the
ability of the Partnership to make any “Restricted Payment,” or (iii) cause
a material change in FCI’s Federal, state or local corporate or tax status. In
addition to the powers reserved to the Committee in Section 2.2 above, the
Committee shall have complete discretion to administer the Plan in such a way
as will prevent the occurrence of any such default, inability to make a
Restricted Payment or change in corporate tax status.

 

9.9                               Definitions.

 

(a)                                  Change
in Control. The term “Change in Control” shall be defined as

 

(1)                                  any merger or
consolidation of FCI in which such entity is not the survivor,

 

(2)                                  any sale of all
or substantially all of the Common Stock of FCI by the Trust,

 

(3)                                  a sale of all or
substantially all of the Common Stock of FGI,

 

(4)                                  a replacement of
FGI as the General Partner of the Partnership, or

 

(5)                                  a public sale of
a “material” amount of FCI’s equity (with materiality being determined by the
Committee, but with a material amount of such equity being  at least  51% thereof).

 

(b)                                  Exercise
Date. The term “Exercise Date” refers to the 31st day of January (i.e., January 31st)
of each year in which a Stock Option may be exercised (with each such year
being an odd-numbered year for Tranche A Options and an even-numbered year for
Tranche B Options).

 

(c)                                  Fair
Market Value. Except as otherwise determined by the Committee, the
“Fair Market Value” of a share of Common Stock as of any date shall equal the
value of such a share most recently determined for the ESOP by its independent
financial advisor to the ESOP (assuming no material change in such value since
the date as of which such determination was made); provided, however, that the
“Fair Market Value” of a share of Common Stock as of any July 31st or January 31st
shall equal the value of such a share,  as of such date , as determined by
such independent financial advisor .

 

(d)                                  FCI
Senior Notes. The term “FCI Senior Notes” means the Series A
Notes, the Series B Notes and the Series C Loans issued pursuant to
the Master Agreement dated July 15, 1998 among FCI, the initial purchasers
of the Series A Notes, the initial purchasers of the Series B Notes,
the Series C Lenders referred therein and U.S. Bank National Association,
as collateral agent (the “Master Agreement”).

 

(e)                                  Master
Agreement. The term “Master Agreement” shall have the meaning
set forth in Section 9.9(d) above.

 

(f)                                    Permanent
Disability. The term “permanent disability” means any mental or
physical condition which entitles the referenced Participant to disability benefits
under the long-term disability plans of the Participant’s employer.

 

(g)                                 Restricted
Payment. The term “Restricted Payment” of the Partnership or
its subsidiaries means, as applicable, a “Restricted Payment” as defined in the
debt documents of either the Partnership or its subsidiaries.

 

(h)                                 Subordinated
Notes. The term “Subordinated Notes” means any promissory note(s) constituting
“Subordinated Debt” (as said term is defined in the Master Agreement).

 

(i)                                    Subsidiary. The term
“subsidiary” means any business, whether or not incorporated, in which FCI has
a direct or indirect ownership interest.

 

	
  Change
  of control

  	
  In
  the case of a change of control of FGP in the 3 years, both the stay  bonus and the unvested BR
  options fuly vest.

  	
   

  
	
  Signed
  by Ferrellgas

  	
  /s/
  James E. Ferrell

  	
   

  
	
   

  	
  Chairman,
  CEO and President of Ferrellgas, Inc.

  	
   

  
	
  Date

  	
  February 6,
  2004

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