Document:

exv10w12

 

Exhibit 10.12

EMPLOYMENT AGREEMENT

     THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the       day of
September, 2007 (the “Effective Date”), by and between United Bank (the “Bank”) and Allen O. Jones,
Jr. (the “Executive”).

     WHEREAS, the Bank and the Executive desire to enter into this Agreement to assure the Bank of
the continued services of the Executive, to protect information that is of a proprietary nature to
the Bank and to set forth the duties and compensation of the Executive, all upon the terms and
conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties set
forth in this Agreement, and other good and valuable consideration, the parties hereto, intending
to be legally bound, agree as follows:

1. Employment; Term; Responsibilities; Exclusive Efforts. 

     1.1 Employment. The Bank hereby employs the Executive as its SVP, and Chief Financial
Officer, hereby accepts employment, upon and subject to all of the terms and conditions set forth
in this Agreement.

     1.2 Term. The term of employment pursuant to this Agreement shall be for a period
of one (1) year commencing on the Effective Date, and shall automatically be renewed for successive
additional one (1) year periods, unless the term of employment is terminated as provided in this
Agreement (the “Term”).

     1.3 Responsibilities. The Executive shall have the duties, functions,
responsibilities and authorities that the President and Chief Executive Officer of the Bank (the
“President”) or his designee assigns to the Executive from time to time, consistent with the
typical duties commensurate with the Executive’s position.

     1.4 Exclusive Efforts. The Executive shall devote the Executive’s full time,
attention and energy to the business of the Bank. The Executive shall not engage in any activity
which would interfere or conflict with the Executive’s duties and responsibilities as set forth
herein or negatively affect the interests of the Bank. The Executive shall not engage in any
business or other activity for gain, profit or other pecuniary advantage unless any such activity
is consented to by the President; provided, however, that should any such activity become
inconsistent with the interests of the Bank, upon written notice from the President the Executive
shall promptly terminate such activities.

2.
Compensation, Benefits and Perquisites. As remuneration for all services to be
rendered by the Executive to the Bank during the Term, the Bank shall pay and provide to the
Executive the following compensation and benefits:

 

 

     2.1 Annual Direct Compensation.

           (a) Annual Base Salary. The Bank shall pay to the Executive an annual base salary of
$124,800 (the “Base Salary”). The Compensation Committee of the Board of Directors of the Bank
(the “Compensation Committee”), with the assistance of the President, may, but shall not be
required to, review the Base Salary from time to time during the Term and increase the Base Salary
by such amount, if any, as the Compensation Committee determines, in its sole and absolute
discretion. The Bank shall pay the Base Salary to the Executive in equal installments throughout
the year, consistent with the Bank’s normal payroll practices. The Base Salary shall be prorated
for any year of the Term that is less than a full calendar year.

           (b) Annual Incentive Compensation. The Bank shall provide to the Executive the
opportunity to earn an annual incentive award (“Annual Incentive Compensation Award”) in accordance
with the Bank’s incentive plan (the “Incentive Plan”). The Bank reserves the right to modify or
discontinue the Incentive Plan for all participants as desired without prior notice to the
Executive.

     2.2 Restricted Stock Grant. United Bancorporation of Alabama, Inc. (“UBA”) shall
grant to the Executive, pursuant to the terms and provisions of the 2007 Equity Incentive Plan of
United Bancorporation of Alabama, Inc. 505 restricted shares of UBA common stock (the “Restricted
Stock”). The terms and provisions of the Restricted Stock shall be set forth in a separate
agreement (the “Restricted Stock Award Agreement”) between the UBA and the Executive in accordance
with the provisions of the 2007 Equity Incentive Plan, and the Restricted Stock and the Restricted
Stock Grant Agreement shall be subject to all of the terms and provisions of the 2007 Equity
Incentive Plan. UBA may from time to time make such additional awards to the Executive under the
2007 Equity Incentive Plan as it determines appropriate.

     2.3 Benefits and Perquisites. The Bank shall provide to the Executive all benefits
provided to employees of the Bank generally, subject to the Executive meeting individual
eligibility requirements for each such benefit. Such benefits shall include, but are not limited
to, such 401(k), profit sharing, group life and health, disability insurance and supplemental
retirement benefits as may be made available to Bank employees generally from time to time. All
insurance provided to the Executive shall be in such form and on such terms as is provided to other
employees of the Bank. The Bank reserves the right to modify or discontinue any benefit program
for all participants as desired without prior notice to the Executive.

     2.4 Vacation. The Bank shall provide the Executive at least three weeks of paid
vacation time each calendar year, such vacation to be scheduled in accordance with approved Bank
policy consistent with the performance of the Executive’s duties hereunder. During any year in
which the Executive is employed for less than the full calendar year, vacation time shall be
prorated accordingly.

3. Termination of Employment. The Executive’s employment may be terminated in accordance
with any of the provisions set forth in this Section 3.

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     3.1  Events of Termination.

          (a) Termination Due to Death or Disability. The Executive’s employment shall
terminate immediately upon the Executive’s death or disability (as described herein). The
Executive shall be deemed to suffer from a disability if (i) the Executive is disabled as defined
in any disability insurance policy providing coverage for the Executive; or (ii) as a result of the
Executive’s incapacity due to physical or mental illness, the Executive is absent from the
full-time performance of the Executive’s duties with the Bank for ninety (90) or more days, whether
or not consecutive, during any six (6) month period.

          (b) Voluntary Termination by the Executive. The Executive may terminate Executive’s
employment at any time by delivering to the President written notice of the Executive’s intent to
terminate, delivered at least thirty (30) calendar days prior to the effective date of such
termination.  The termination shall become effective automatically upon the expiration of the
thirty (30) day notice period.  Such notice shall also constitute the resignation by the Executive
of any other positions that the Executive may hold as an officer and/or director of the Bank and/or
its affiliates.

          (c) Voluntary Termination by the Bank. The Bank may terminate the Executive’s
employment at any time, without Cause, as defined in Section 3.2(e), by delivering to the Executive
written notice of the Bank’s intent to terminate, delivered at least thirty (30) calendar days
prior to the effective date of such termination. The termination shall become effective
automatically upon the expiration of the thirty (30) day notice period.  Unless otherwise stated in
the termination notice, such notice shall also constitute termination of the Executive as to any
other positions that the Executive may hold as an officer and/or director of the Bank and/or its
affiliates.

          (d) Termination by the Bank for Cause. The Bank may terminate the Executive’s
employment for Cause by delivering written notice of the Bank’s intent to terminate. Any such
termination shall be effective on the date specified in such notice.

     3.2 Payments Upon Termination.

          (a) Payments Upon Termination Due To Death, Disability, Voluntary Termination By
Executive, Voluntary Termination By The Bank, Termination by the Bank for Cause.

               (i) If, prior to the end of the Term, the Executive’s employment with the Bank terminates due
to the Executive’s death or disability, voluntary termination by the Executive, voluntary
termination by the Bank, or termination by the Bank for Cause, the Bank shall pay to the Executive
(or to his legally appointed personal representative) (A) any accrued but unpaid Base Salary; (B)
the cash component of any Annual Incentive Compensation Award that has been awarded in accordance
with the terms of the Incentive Plan but not paid, subject to any forfeiture provisions of the
Incentive Plan; and (C) any amounts payable to the Executive under the terms of the Bank’s benefits
plans in which the Executive is a participant.

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               (ii) Subject to Section 3.2(c), item (A) of the preceding paragraph shall be paid in cash
within thirty (30) days following the effective date of termination, or, if termination is due to
the death of the Executive, within thirty (30) days following the date on which the Executive’s
personal representative is qualified and begins serving. Amounts payable under items (B) and (C)
of the preceding paragraph shall be paid in accordance with the terms of the respective plans.

          (b) Payments Upon Termination By the Bank Without Cause or Termination By the Executive
With Good Reason Within Two Years of a Change of Control.

               (i) If, within two (2) years following a Change of Control, the Executive’s employment is
terminated without Cause or if the Executive terminates the Executive’s employment with the Bank
for Good Reason, as defined in Section 3.2(f), the Bank shall pay to the Executive (A) any accrued
but unpaid Base Salary; (B) the cash component of any Annual Incentive Compensation Award that has
been awarded in accordance with the terms of the Incentive Plan but not paid, subject to any
forfeiture provisions of the Incentive Plan; (C) any amounts payable to the Executive under the
terms of the Bank’s benefits plans in which the Executive is a participant; and (D) a cash benefit
equal to the Executive’s annual Base Salary.

               (ii) Subject to Section 3.2(c), item (A) of the preceding paragraph shall be paid in cash
within thirty (30) days following the effective date of termination of the Executive’s employment
as described in Section 3.2(b)(i). Amounts payable under items (B) and (C) of the preceding
paragraph shall be paid in accordance with the terms of the respective plans. Amounts payable
under item (D) may be paid (x) in cash in a lump sum together with the payment described in Item
(A); or (y) in up to twelve (12) equal monthly installments, as may be elected by the Bank.

               (iii) Following the effective date of termination of the Executive’s employment as described
in Section 3.2(b)(i), any stock options that have been granted but have not vested shall
immediately vest, and the restrictions shall lapse with respect to any restricted stock of UBA that
has been granted but as to which the restrictions have not lapsed. Following the effective date of
termination, the Executive may exercise any vested but unexercised stock options in accordance with
the terms of the plan or grant agreement pursuant to which such options were granted.

          (c) Payments Subject to Section 409A. In the event that any payments under this
Section 3.2 are subject to the restrictions of Section 409A of the Internal Revenue Code, then
payment shall not be made until the first (1st) day of the month following the six (6)
month anniversary date of the effective date of termination.

          (d) Change of Control. For purposes of this Agreement, a “Change of Control” of the
Bank shall be deemed to have occurred if (i) any “person” or “group” (other than UBA) hereafter
becomes the “beneficial owner” (as such terms are defined in the Securities Exchange Act of 1934),
of securities representing fifty percent (50%) or more of the combined voting power of the Bank or
UBA; (ii) a majority of the Board of Directors of the Bank or UBA, comprised of persons who were
not elected or nominated for election to such Board by current

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directors of the Bank or UBA or directors who (or whose predecessors on such Board) were
ultimately nominated or elected by the current directors of the Bank or UBA, is elected; (iii) the
shareholders of the Bank or of UBA approve a merger or consolidation of the Bank or of UBA, other
than a merger or consolidation which results in the voting securities of the Bank or of UBA
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least 80% of the combined
voting power of the voting securities of the Bank or of UBA, as the case may be, of such surviving
entity outstanding immediately after such merger or consolidation; or (iv) the shareholders of the
Bank or of UBA approve a plan of complete liquidation or an agreement for the sale or disposition
of all or substantially all of the assets, of the Bank or of UBA, as the case may be.

          (e) Cause. For purposes of this Section 3, “Cause” shall mean any circumstances
demonstrating to the Board of Directors of the Bank that the Executive has undertaken deliberate
actions with the intent to cause, or with reckless disregard for the possibility of causing,
substantial injury to the Bank, as well as the following:

               (i) The Executive’s conviction of, or his plea of guilty or nolo contendere to, (x) a felony
or misdemeanor involving moral turpitude, including without limitation fraud, embezzlement, theft,
or dishonesty, (y) any other felony or misdemeanor involving criminal conduct against the Bank, or
(z) any other felony.

               (ii) Findings by the Board of Directors of the Bank that the Executive has engaged in any
improper actions specified in Section 3.2(e)(i) above, or that criminal charges have been filed
against the Executive for such actions.

               (iii) The Executive’s willful misconduct or breach of fiduciary duty with respect to the
handling of monies or other properties or interests of others.

               (iv) Issuance to the Executive by a governmental or administrative agency of a final cease and
desist order with respect to actions personally taken by the Executive.

               (v) Habitual neglect of his responsibilities hereunder, failure to properly account for funds
or accounts for which the Executive has been made specifically accountable, or failure to perform
the Executive’s responsibilities under this Agreement after written notice and a reasonable
opportunity to cure such failure.

          (f) Good Reason. The Executive shall be deemed for the purposes of this Section 3 to
have terminated the Executive’s employment for “Good Reason” if the Executive terminates the
Executive’s employment after the occurrence (other than such as may be isolated, unsubstantial and
inadvertent on the Bank’s part and which is remedied promptly by the Bank after receipt of notice
from the Executive), without the Executive’s express written consent and after a Change of Control,
of any one or more of the following: (i) a substantial reduction or alteration in the nature or
status of the Executive’s responsibilities and status (including offices, titles and reporting
requirements) from those in effect during the six-month period immediately preceding the Change of
Control; (ii) a reduction by the Bank in the Executive’s total

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compensation as in effect on the date hereof, or as the same may be increased from time to time;
(iii) the failure by the Bank to continue the Executive’s participation in any of the Bank’s
employee benefit plans, practices or arrangements in which the Executive participates, on
substantially the same basis as those provided generally from time to time after the Change of
Control to other peer officers of the Bank and its affiliated companies; or (iv) the failure of any
successor to the Bank to assume or otherwise be bound to perform the Bank’s obligations under this
Agreement.

     3.3 Business Records. Upon termination of the Executive’s employment, the Executive
agrees to promptly deliver to the Bank, all Business Records belonging to the Bank, UBA or any
affiliate of the Bank, and all copies thereof and therefrom, including any Business Records that
may be maintained in electronic form, and the Executive acknowledges that such Business Records
constitute the exclusive property of the Bank. The term “Business Records” means all customer
files, contract files, reports and related data, memoranda, notes, records, drawings, manuals,
correspondence, financial and accounting information, customer lists, statistical data and
compilations, patents, copyrights, trademarks, trade names, inventions, formulae, methods,
processes, agreements, contracts, manuals or any other documents relating to the business of the
Bank, UBA or any affiliate of the Bank.

4. Confidentiality. In consideration of the Executive’s employment by the Bank and of the
confidential information that the Executive will acquire by virtue of such employment, the
Executive agrees to comply with the confidentiality provisions of this Section 4.

 

     4.1    Trade Secrets and Confidential Information.  During the Term and thereafter for
a period of five (5) years, the Executive will not directly or indirectly divulge or appropriate to
Executive’s own use, or to the use of any third party, any “trade secrets” or “confidential
information” (as defined in Section 4.2) of the Bank, UBA or any affiliate of the Bank
(collectively referred to in this Section 4 as the “Bank Group”), except as may be in public domain
other than by violation of the Agreement or as may be required by law.

 

     4.2   Definitions. “Trade Secrets” as used herein means all secret discoveries,
inventions, formulae, designs, methods, processes, techniques of production and know-how relating
to the Bank Group’s business.  “Confidential Information” as used herein means internal policies
and procedures, suppliers, customers, customer information, financial information and marketing
practices, as well as secret discoveries, inventions, formulae, designs, techniques of production,
know-how and other information relating to the Bank Group’s business not rising to the level of a
trade secret under applicable law.

     4.3 Financial Privacy Act. The Executive agrees to comply with the Right to Financial
Privacy Act (12 U.S.C. §3401) and the rules regarding disclosure of financial information and other
information. The Executive agrees that, during and after Executive’s term of employment by the
Bank, the Executive will not, without prior written consent of the Bank, use for Executive’s own
benefit or disclose any confidential information relating directly or indirectly to the Bank or its
customers to any third person, partnership, company, corporation or other organization.

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     4.4 Injunctive Relief. The parties acknowledge that the breach or threatened breach
of the provisions of Section 4 may result in irreparable injury to the Bank Group and, therefore,
that monetary damages for such breach may be inadequate. In consideration of the foregoing, the
Executive acknowledges and agrees that, in addition to all other remedies available to the Bank or
any other member of the Bank Group at law or in equity, each member of the Bank Group shall be
entitled to injunctive relief or specific performance, or both, to restrain any threatened or
continued breach of the provisions of Section 4 or to enforce the terms hereof. The parties hereby
waive any requirement for the posting of a bond or other security in connection with such
injunctive relief.

5. Noncompetition Covenant. The Executive acknowledges that by reason of the Executive’s
association with the Bank, the Executive has obtained and will continue to obtain intimate
knowledge of the strategies and other trade secrets of the Bank, the Bank’s customer relations and
its relation with its employees. Accordingly, the Executive agrees that the Executive will not
during the term of the Executive’s employment with the Bank and for a period of one (1) year after
termination of Executive’s employment hereunder, except where such termination is by the Executive
for Good Reason or by the Bank without Cause, either individually or as an employee, agent,
officer, director or shareholder or otherwise of or through any corporation or other business
organization, directly or indirectly (a) carry on or engage in a business similar to that of the
Bank or any of its affiliates (including without limitation soliciting or doing any such business
with any customer of the Bank or any of its affiliates), in any territory which the Bank or any of
its affiliates has been conducting business 150 miles of Atmore, Alabama, or advance or lend any
money to or make or hold any investment (other than a non-controlling owner of security interest in
a publicly-held corporation) in, or encourage participation by any member of the Executive’s family
in, such a business; or (b) solicit, hire, employ, contract with as an employee, contractor, or in
any similar relationship, or allow, encourage or participate in any of the same acts by any
corporation or other business entity, any employee or former employee of the Bank or any of its
affiliates. The parties agree that in the event of a breach by the Executive of the terms of this
Section 5, the Bank shall be entitled to institute and prosecute proceedings in any court of
competent jurisdiction, either in law or in equity, to obtain damages for any breach of this
Agreement, or to enforce specific performance hereof by the Executive, or to enjoin the Executive
from any violation hereof. The term of the covenants contained in this Section 5 shall be tolled
for the period commencing on the date any successful action is filed for injunctive relief or
damages arising out of a breach by the Executive of this Section 5 and ending upon final
adjudication (including appeals) of such action. The Executive acknowledges that the restrictions
set forth in this Section 5 are reasonable in scope and duration, given the nature of the business
of the Bank, and agrees that neither the compliance with this Section 5 nor issuance of an
injunction as described herein will impose an undue hardship on the Executive.

6. Assignment. 

     6.1 Assignment by the Bank.   This Agreement may be assigned or transferred to, and
shall be binding upon and shall inure to the benefit of, any successor of the Bank, and any
successor shall be deemed substituted for the “Bank” for all purposes under this Agreement.  As
used in this Agreement, the term “successor” shall mean any person, firm, corporation, or

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business entity which at any time, whether by merger, purchase, or otherwise, acquires all or
substantially all of the assets of the Bank. 

 

     6.2 Assignment by Executive.   This Agreement is personal and non-assignable by the
Executive.

7. Miscellaneous.

     7.1 Entire Agreement. This Agreement, and to the extent not superseded hereby, the
United Bank Personnel Handbook, contain the entire understanding of the parties with respect to the
subject matter hereof, and supersede all prior or contemporaneous negotiations, representations,
understandings and agreements of, by or among the parties, express or implied, oral or written all
of which are fully merged herein. The express terms of this Agreement control and supersede any
course of performance and/or customary practice inconsistent with any such terms. Any agreement
hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of this
Agreement unless such agreement is in writing and signed by the parties hereto.

     7.2 Severability. If any provisions of this Agreement shall be determined to be
invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to
delete or modify, as necessary, the offending provisions and to alter the balance of this Agreement
in order to render the same valid and enforceable to the fullest extent permissible, as aforesaid.
The provisions of this Section shall be construed as an agreement independent of the other
provisions of this Agreement. The existence of any claim or cause of action by the Executive
against the Bank shall not constitute a defense to the enforcement by the Bank of the provisions of
this Agreement.

     7.3 Governing Law and Venue; Attorney’s Fees. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of Alabama applicable to agreements made and to be performed wholly
within the State of Alabama. Any suit brought hereon shall be brought in the state or federal
courts located in Escambia County, Alabama. If any action at law or in equity is brought to
enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to
recover, at trial, on appeal, and in connection with any petition for review, reasonable attorneys’
fees, costs and disbursements in addition to any other relief that may be granted.

     7.4 Waiver. No waiver by any party to this Agreement of any breach by any other party
of any term, provision, or condition contained in this Agreement, and no failure by any party to
insist upon the performance by any other party of any term, provision or condition contained in
this Agreement, shall be deemed a waiver of such term, provision, or condition, or any subsequent
breach of same, nor shall it be deemed a waiver of any other term, provision, or condition
contained in this Agreement. Neither the failure nor any delay on the part of any party to this
Agreement to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof. No single or partial exercise of any right, remedy, power or privilege shall
preclude any other or further exercise of the same or any other right, remedy, power or privilege.
Any party’s consent to or approval of any act shall not be deemed to render

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unnecessary the obtaining of such party’s consent or approval of any subsequent act. No waiver
shall be effective unless it is in writing and is signed by the parties asserting such waiver.

     7.5 Notices. Any notice required or permitted to be given hereunder shall be in
writing, and, if addressed to the Executive, shall be delivered to the Executive at the Executive’s
last known address, and, if addressed to the Bank, UBA, or any affiliate of the Bank, shall be
delivered to the principal office of the Bank in Atmore, Alabama. A notice shall be deemed to have
been delivered upon the first to occur of (a) actual receipt by the addressee, or (b) when (i)
personally delivered, (ii) delivered to a nationally recognized overnight delivery service for next
day delivery, (iii) deposited in the United States certified mail, return receipt requested and
postage prepaid, or (iv) transmitted to the addressee by facsimile, with receipt confirmed.

     7.6 Construction. This Agreement shall be construed and interpreted without regard to
any presumption or other rule requiring construction against the party drafting the document or any
provision contained in the document. It shall be construed neither for nor against any party, but
shall be given reasonable interpretation in accordance with the plain meaning of its terms and the
intent of the parties.

     7.7 Survival. The provisions of Sections 3.2, 3.3, 4, 5 and 7 shall survive the
termination of this Agreement.

     7.8 Captions; Construction. The captions and headings used in this Agreement are
inserted only for convenience and in no way define, describe, extend, or limit the scope of the
particular provisions to which they refer, or the meaning or intent of this Agreement. The words
“herein,” “hereof,” “hereunder,” and other similar compounds of the word “here” as used in this
Agreement shall refer to the entire Agreement and not to any particular provision or section.

     7.9 Section 409A Savings Clause. This Agreement and all provisions hereof are
intended to comply with Section 409A of the Code and the permanent, temporary or proposed
regulations issued thereunder. If any provision of this Agreement violates or fails to comply with
the Section 409A of the Code or the permanent, temporary or proposed regulations thereunder, then
such provision shall be modified, as of the effective date of this Agreement, to the least extent
necessary to comply therewith. This Section supersedes all other provisions of this Agreement to
the extent of any inconsistency.

     7.10 Counterparts. This Agreement and any amendment hereto may be executed in any
number of counterparts, each of which shall be deemed to be an original as to any party whose
signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement and any amendment hereto shall be binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties to this Agreement.

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     IN WITNESS WHEREOF, this Agreement has been duly executed by an authorized officer of the Bank
and by the Executive, as of the Effective Date.

	 	 	 	 	 
	 	BANK:

UNITED BANK

 	 
	 	By  	/s/
Robert R. Jones,  III	 
	 	 	Robert R. Jones, III 	 
	 	 	Its President and

Chief Executive Officer 	 
	 
	 	 	 
	 	By  	/s/
Gwendolyn B. Braden 	 
	 	 	Gwendolyn B. Braden 	 
	 	 	VP-Human Resources Director 	 
	 
	 	EXECUTIVE:

 	 
	 	/s/
Allen O. Jones, Jr. 	 
	 	 	Allen O. Jones, Jr. 	 
	 	 	SVP—Chief Financial Officer 	 
	 

10exv10w1

 

Exhibit 10.1

AGREEMENT AND RELEASE

     This Agreement and Release is made among Ferrell Companies, Inc. (“FCI”), Ferrellgas, Inc. of
Liberty, Missouri (“Ferrellgas”), and their affiliates, Ferrellgas Partners, L.P., and/or
Ferrellgas, L.P., (all of which will collectively be referred to as “Ferrell” or “Ferrellgas”) and
Kevin T. Kelly (“Employee”), to set forth the terms of separation of Employee’s employment
relationship with Ferrellgas and for all benefits, rights , and obligations between Ferrellgas and
Employee (referred to collectively as the “Parties”). Thus, in consideration of the mutual
promises, covenants and agreements set forth below, the adequacy and sufficiency of which are
hereby acknowledged by the Parties, the Parties agree as follows:

     Employee was employed by Ferrellgas. Employee’s regular employment ended on March 28, 2008 and
began as an advisory role described in Section 3 below. Ferrell and Employee now desire to fully
and finally resolve all issues among or between them arising from Employee’s employment by Ferrell
and/or the cessation of such employment. Therefore, intending to be legally bound, Ferrell and
Employee agree as follows:

	 	1.	 	Employee will resign from his position as Senior Vice President and Chief Financial
Officer effective March 28, 2008, by submitting the attached letter of resignation, which
is attached as “Attachment A”, concurrently with the signing of this Agreement. Employee
is relieved of his duties as the Senior Vice President and Chief Financial Officer,
effective March 28, 2008.
	 
	 	2.	 	Ferrellgas agrees to pay to Employee no later than January 15, 2009, the gross amount
of Three Hundred Ninety-Three Thousand Seven-Hundred & FiftyDollars ($393,750.00), less
all applicable deductions.
	 
	 	3.	 	Further, Ferrellgas agrees to retain Employee in an advisory role through the
effective date of termination, December 15, 2008. Employee will be paid the gross sum of
$7,211.54 per week thru December 15, 2008, subject to withholdings and deductions, during
that period. During this period, Ferrellgas shall provide the employer share of any
health, vision, dental, life, and AD&D coverage in which Employee and his dependents were
enrolled as of March 1, 2008. Employee acknowledges that the end of this period
constitutes a “qualifying event” for COBRA purposes, to make clear Employee is entitled to
and that COBRA is offered to Employee or to any other “qualified beneficiary” at this time
as a result the end of this period. All business communications by him shall be directed
to Gene Caresia, Vice President of Human Resources, Ryan VanWinkle, interim Chief
Financial Officer or Steve Wambold, President and Chief Operating Officer. Employee shall
be reimbursed for authorized and reasonable out-of-pocket expenses incurred on behalf of
Ferrellgas. He shall not have the authority, apparent or actual, to enter into agreements
on behalf of Ferrell or to otherwise bind the company, and he shall not hold himself out
to be an officer of Ferrell. He agrees that the confidentiality provisions of his Employee
Agreement shall extend to any confidential information (as defined in his Employment
Agreement as attached to this Agreement) obtained or developed during this period. He
shall not undertake any duties on behalf of Ferrell and shall not be considered to be
operating within the course of any duties unless specifically directed in writing by
Ferrell to do so. He shall not have access to company

 

 

Kevin T. Kelly

Page Two

offices, telephone systems, computer or email systems or other Ferrell property unless
specifically authorized by Ferrell. He agrees to be available to assist and cooperate with
Ferrell and to respond in a timely manner to reasonable inquiries from Ferrell senior
management.

	 	4.	 	Ferrellgas also agrees to promptly reimburse Employee for twelve (12) months of COBRA
continuation premiums for Employee and his dependents, provided Employee enrolls in COBRA in
accordance with the prescribed enrollment procedures and due date for the continuance of
medical benefits. Employee must submit each month’s COBRA premium payment to Discovery
Benefits as outlined in the enrollment information. In addition, Employee must make a copy of
the check submitted for each payment and mail it to Ferrellgas, Attention Toni Scardino,
Benefits Manager, One Liberty Plaza, Liberty, MO 64068. Ferrellgas will reimburse Employee for
the monthly payment at a grossed up amount equal to the monthly premium, after Discovery
Benefits has received the premium and after Ms. Scardino or her successor has received a copy
of each payment check. If Employee fails to submit premium in a timely manner, Employee will
lose the COBRA coverage. The COBRA continuation period will begin January 1, 2009 and COBRA
information will be sent to Employee by Discovery Benefits.
	 
	 	5.	 	In exchange for the mutual promises made here, Employee agrees to forever RELEASE and
DISCHARGE Ferrell, and Ferrell’s officers, employees, directors and agents from any and all
claims arising from his employment and/or cessation of employment and all debts, obligations,
claims, demands, or causes of action of any kind whatsoever, known or unknown, in tort,
contract, by statute or on any other basis, for equitable relief, compensatory, punitive or
other damages, expenses (including attorney’s fees), reimbursements or costs of any kind,
including, but not limited to, any and all claims, demands, rights and/or causes of action,
including those which might arise out of allegations relating to a claimed breach of an
alleged oral or written employment contract, or relating to purported employment
discrimination or civil rights violations, such as, but not limited to, those arising under
Title VII of the Civil Rights Act of 1964 and all amendments thereto, Executive Order 11246,
as amended, the Age Discrimination in Employment Act of 1967, as amended, the Equal Pay Act,
the Rehabilitation Act of 1973, the Americans with Disabilities Act and/or any other
applicable federal, state, or local employment discrimination statute, ordinance or common law
doctrine which Employee might assert against Ferrell. Employee waives any right to recover in
any lawsuit brought on his behalf by any government agency or other person. This provision
does not release any rights or obligations under this Agreement or any rights or Employee’s
interest in the Ferrell Companies, Inc. 1998 Incentive Compensation Plan, the Ferrellgas Unit
Option Plan, the Ferrell Companies, Inc. Employee Stock Ownership Plan, the Ferrell Companies,
Inc. 401(k) Investment Plan, or the Ferrell Companies, Inc. Supplemental Savings Plan.
	 
	 	6.	 	Employee acknowledges that he has been employed by Ferrell in a senior management
capacity and has supervised employees conducting business throughout the United States.
In the course of his employment, Employee has received significant Confidential
Information (as defined in his Employee Agreement), including specific information
regarding Ferrell’s strategies and customers throughout the United States. For that
reason, and in consideration of the financial benefits granted to Employee pursuant to
this Agreement, Employee acknowledges that any employment in the propane industry prior to
December 15, 2010 would result in the inevitable disclosure and/or use of such
Confidential Information to the detriment of

 

 

Kevin T. Kelly

Page Three

Ferrell. Therefore, in consideration of the financial benefits granted to Employee in this
Agreement, Employee agrees not to accept employment in the propane industry in whole or in
part within the United States prior to December 15, 2010.

	 	7.	 	Employee promises to treat as confidential and to disclose to no person (other than a
legal or financial advisor or spouse, if any) the terms or conditions of this Agreement
and Release. Employee further promises not to make any derogatory, disparaging or false
statements to any third parties intended to harm the business or personal reputation of
Ferrell, its directors, officers and employees.
	 
	 	8.	 	Employee understands and agrees that if he violates any promises, Ferrell may pursue
all permissible remedies to redress such violations including seeking repayment of all
payments made under this Agreement and Release and recovery of costs and reasonable
attorney’s fees.
	 
	 	9.	 	Employee agrees that the Ferrellgas Option Grantee Agreements signed by him on
October 23, 1998, August 15, 2004, and October 25, 2007, copies of which are attached to
this Agreement and Release and incorporated herein by reference, and/or any similar
agreements, are enforceable agreements by the Parties, that his obligations under these
agreements inure to the benefit of Ferrell, and that this Agreement and Release does not
release him from any obligations under them or under any other contract which obligates
Employee not to reveal the Confidential Information of Ferrellgas. The parties agree
that, not withstanding paragraph 5, the FCI Nonqualified Stock Option Agreements entered
into between the Employee and Ferrell Companies, Inc., dated August 19, 1998, July 31,
1999, May 1, 2000, December 15, 2000, August 15, 2005, August 15, 2005 and September 1,
2007, remain in full force and effect and are not terminated or released by this document.
	 
	 	10.	 	Employee agrees to remain available (upon reasonable prior notice) to consult with
Ferrell in connection with any claims or litigation involving Ferrell and any transitional
matters involving Employee’s prior duties with Ferrell. Ferrell shall reimburse Employee
for his reasonable out-of-pocket expenses in connection with such consultation.
	 
	 	11.	 	Employee will receive a payment of $1,000 per month, less all applicable deductions,
starting April 1, 2008 and ending December 1, 2009, for the purpose of selecting and
providing career transition services. Employee will retain sole responsibility for the
selection and usage of these services.

 

 

Kevin T. Kelly

Page Four

Additional Statement by Employee

I was given a copy of this Agreement and Release and was notified that I have the right to consult
with an attorney before signing. Furthermore, I acknowledge being given at least twenty-one (21)
days within which to consider this Agreement and Release. I have carefully read and fully
understand this Agreement and Release and have had sufficient time and opportunity to consult with
my personal tax, financial, and legal advisors prior to signing. By signing this Agreement and
Release, I voluntarily indicate my intent to be legally bound by its terms. I understand that I may
revoke this Agreement and Release within seven days after signing it but that thereafter it is
irrevocable.

THIS IS A RELEASE OF CLAIMS

READ CAREFULLY BEFORE SIGNING

	 	 	 	 	 
	 	 	 
	 	 	
 /s/ Kevin T. Kelly	 
	 	 	Kevin T. Kelly 	 
	 
	 	 	 
	 	 	
 March 28, 2008	 
	 	 	Date 	 
	 	 	 	 
	 

FERRELLGAS, INC.;

FERRELL COMPANIES, INC.;

FERRELLGAS PARTNERS, L.P.

FERRELLGAS, L.P.

by FERRELLGAS, INC., a Delaware

  Corporation, their General Partner

	 	 	 	 	 	 
	 	 	 
	By  	 /s/
Gene Caresia	 	Date 	 March 28, 2008	 
	 	Gene Caresia 

Vice President, Human Resources

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