Document:

Exhibit 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 “FCISenior 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 aParticipant’s Stock Option(s) may  be exercised up to the following  percentage on the Exercise
  Date  occurring in
  each of the followingyears:

   

  2009
  60%

  2011 80%

  2013 100%

  2015 100%

  2017 100%

  	
   

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

   

  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,
  2004Exhibit 10.1

 

FORM OF

CHANGE OF CONTROL SEVERANCE AGREEMENT

 

(For Section 16 Officers (Other
than the CEO))

 

This Change of Control Severance Agreement (the “Agreement”) is entered into this          
day of                           ,
20       (the “Effective Date”) between                                     
(“Executive”) and Agilent Technologies, Inc., a Delaware corporation (the “Company”).  This Agreement
is intended to provide Executive with the compensation and benefits described
herein upon the occurrence of specific events following a change of control of
the ownership of the Company (defined as “Change of Control”).

 

RECITALS

 

A.            As is the case
with most, if not all, publicly-traded businesses, it is expected that the
Company from time to time may consider or may be presented with the need to
consider the possibility of an acquisition by another company or other change
in control of the ownership of the Company. 
The Board of Directors of the Company (the “Board”) recognizes that such
considerations can be a distraction to Executive and can cause the Executive to
consider alternative employment opportunities or to be influenced by the impact
of a possible change in control of the ownership of the Company on Executive’s
personal circumstances in evaluating such possibilities.  The Board has determined that it is in the
best interests of the Company and its shareholders to assure that the Company
will have the continued dedication and objectivity of Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control of the Company.

 

B.            The Board believes that it is in the best interests of
the Company and its shareholders to provide Executive with an incentive to
continue his or her employment and to motivate Executive to maximize the value
of the Company upon a Change of Control for the benefit of its shareholders.

 

C.            The Board believes that it is important to provide
Executive with certain benefits upon Executive’s termination of employment in
certain instances upon or following a Change of Control that provide Executive
with enhanced financial security and incentive and encouragement to Executive
to remain with the Company notwithstanding the possibility of a Change of
Control.

 

D.            At the same time, the Board expects the
Company to receive certain benefits in exchange for providing Executive with
this measure of financial security and incentive under the Agreement.  Therefore, the Board believes that the
Executive should provide various specific commitments which are intended to assure
the Company that Executive will not direct Executive’s skills, experience and
knowledge to the detriment of the Company for a period not to exceed the period
during which payments are being made to Executive under this Agreement.

 

E.             Certain capitalized terms used in this
Agreement are defined in Article VII.

 

The Company and Executive
hereby agree as follows:

 

1

 

ARTICLE I.

 

EMPLOYMENT BY THE COMPANY

 

1.1          Executive is
currently employed as                                                                
of the Company and has been named a Section 16 officer of the Company.

 

1.2          Executive shall
be entitled to the rights and benefits of this Agreement and this Agreement may
not be terminated, except as otherwise provided in Section 4.5, if Executive is
a Section 16 officer on the date of the occurrence of any event set forth in Section
2.1(a) or Section 2.2(a) hereof (the “Section 1.2 Date.”) The rights and
obligations of the parties hereto contained in Articles III through VIII shall
survive any termination of this Agreement for the longer of (i) twenty-four
(24) months following a Termination Event (as hereinafter defined) (the “Term”)
or (ii) such longer period provided for in this Agreement.

 

1.3          The Company and
Executive each agree and acknowledge that Executive is employed by the Company
as an “at-will” employee and that either Executive or the Company has the right
at any time to terminate or to change Executive’s employment with the Company,
or to determine that Executive is no longer a Section 16 officer of the Company
regardless of the continued employment of the Executive with or without cause
or advance notice, for any reason or for no reason.  The Company and Executive wish to set forth
the compensation and benefits which Executive shall be entitled to receive in
the event that Executive’s employment with the Company terminates under the
circumstances described in Article II of this Agreement.

 

1.4          The duties and
obligations of the Company to Executive under this Agreement shall be in
consideration for [Executive’s past services to the Company,] Executive’s
continued employment with the Company, Executive’s compliance with the
obligations described in Section 4.2, and Executive’s execution of the general
waiver and release described in Section 4.3.  The Company and Executive agree that
Executive’s compliance with the obligations described in Section 4.2 and
Executive’s execution of the general waiver and release described in Section 4.3
are preconditions to Executive’s entitlement to the receipt of benefits under
this Agreement and that these benefits shall not be earned unless all such
conditions have been satisfied through the scheduled date of payment.  The Company hereby declares that it has
relied upon Executive’s commitments under this Agreement to comply with the
requirements of Article IV, and would not have been induced to enter into this
Agreement or to execute this Agreement in the absence of such commitments.

 

ARTICLE II.

 

TERMINATION EVENTS

 

2.1          Involuntary Termination Upon or Following Change of Control.

 

(a)           In the event Executive’s employment
with the Company and its subsidiaries is involuntarily terminated at any time
by the Company without Cause either (i) at the time of or within twenty-four
(24) months following the occurrence of a Change of Control, (ii) within three (3)
months prior to a Change of Control, whether or not such termination is at the
request of an “Acquiror”, or (iii) at any time prior to a Change of Control, if
such termination 

 

2

 

is at the request of an Acquiror,
then, upon such Change of Control, such termination of employment will be a
Termination Event and the Company shall pay Executive the compensation and
benefits described in and at the times provided under Article III.  For all purposes of this Agreement the term
“Acquiror”  is either a person or a member of a
group of related persons representing such group that in either case obtains
effective control of the Company in the transaction or a group of related
transactions constituting the Change of Control.

 

(b)           In the event Executive’s employment
with the Company and its subsidiaries is either involuntarily terminated by the
Company with Cause at any time, or is involuntarily terminated by the Company
without Cause at any time other than under the circumstances described in Section
2.1(a), then such termination of employment will not be a Termination Event, Executive will not be entitled to receive any payments or
benefits under the provisions of this Agreement, and the Company will cease
paying compensation or providing benefits to Executive as of Executive’s
termination date.

 

2.2          Voluntary Termination Upon or Following Change of Control.

 

(a)           Executive may voluntarily terminate
his employment with the Company and its subsidiaries at any time.  In the event Executive voluntarily terminates
his employment within three (3) months of the occurrence of an event
constituting Good Reason and on account of an event constituting Good Reason,
which event occurs either (i) at the time of or within twenty-four (24) months
following the occurrence of a Change of Control, (ii) within three (3) months
prior to a Change of Control, whether or not such termination is at the request
of an “Acquiror”, or (iii) at any time prior to a Change of Control, if such
triggering event or Executive’s termination is at the request of an Acquiror,
then, upon such Change of Control, such termination of employment will be a
Termination Event and the Company shall pay Executive the compensation and
benefits described in and at the times provided under Article III.

 

(b)           In the event (i) Executive
voluntarily terminates his employment for any reason other than on account of
an event constituting Good Reason under the circumstances described in Section 2.2(a),
or (ii) Executive’s employment terminates on account of either death or
physical or mental disability, then such termination of employment will not be a Termination Event, Executive will
not be entitled to receive any
payments or benefits under the provisions of this Agreement, and the Company
will cease paying compensation or providing benefits to Executive as of the
Executive’s termination date.

 

ARTICLE III.

 

COMPENSATION AND BENEFITS PAYABLE

 

3.1          Right to Benefits.  If a Termination Event occurs, Executive
shall be entitled to receive the benefits described in this Agreement so long
as Executive complies with the restrictions and limitations set forth in Article
IV; provided, further, that the Executive must execute the employee Release (as
defined in Section 4.3); and the time period for revocation of such Release
must have elapsed (an “Effective Release”) within sixty (60) days of the
Termination Event which Release shall remain in effect at the time that the
benefits of this Article III are paid. 
If a Termination Event does not occur, Executive shall not be entitled
to 

 

3

 

receive any benefits described in
this Agreement, except as otherwise specifically set forth herein.

 

3.2          Salary Continuation.  Upon the occurrence of a Termination Event,
Executive shall receive two times the sum of Executive’s Base Salary plus
Target Bonus, less any applicable withholding of federal, state or local taxes.  Amounts to be paid under this section shall
be paid in a lump sum no later than the later of thirty (30) days after the
date of the Termination Event or the date of an Effective Release.

 

3.3          Health Insurance Coverage.

 

Upon
the occurrence of a Termination Event, Executive shall be entitled to receive a
payment equal to Eighty-Thousand U.S. Dollars ($80,000) (the “Health Expense
Benefit”). The purpose of the Health Expense Benefit is to assist Executive
with healthcare expenses, including additional health plan premium payments
that may result from the occurrence of a Termination Event.  Amounts
to be paid under this section shall be paid in a lump sum no later than thirty
(30) days after the date of the Termination Event or the date of an Effective
Release.

 

This Section 3.3 provides only for the Company’s
payment of the Health Expense
Benefit.  This Section 3.3 does not
affect the rights of Executive or Executive’s covered dependents under any
applicable law with respect to health insurance continuation coverage.

 

3.4          Stock Award Acceleration.  Executive’s stock options which are
outstanding as of the date of the Termination Event (the “Stock Options”) shall
become fully vested upon the occurrence of the Termination Event and
exercisable so long as Executive complies with the restrictions and limitations
set forth in Article IV.  The maximum
period of time during which the Stock Options shall remain exercisable, and all
other terms and conditions of the Stock Options, shall be as specified in the
relevant Stock Option agreements and relevant stock plans under which the Stock
Option were granted.  The term “Stock
Options” shall not include any rights of the Executive under the Company’s
employee stock purchase plan.

 

Executive’s
restricted stock awards that are outstanding as of the date of the Termination
Event (“Restricted Stock”) and that are not subject to performance-based
vesting shall become fully vested and free from any contractual rights of the
Company to repurchase or otherwise reacquire the Restricted Stock as a result
of Executive’s termination of employment. 
All shares of Restricted Stock which have not yet been delivered to
Executive or his designee (whether because subject to joint escrow instructions
or otherwise) shall be delivered to Executive or his designee as soon as
administratively feasible after the occurrence of a Termination Event.  Executive’s restricted stock
awards that are subject to performance-based vesting shall be covered by the
terms of the applicable award agreement.

 

The treatment of Executive’s other awards, if any,
outstanding under the 1999 Stock Plan of the Company, or any successor plan
thereto (together the “Stock Plan”), at the time of the Termination Event shall
be governed by the respective award agreement.  This includes but is not limited to restricted
stock units, awards under the long-term performance program, and includes
awards made pursuant to the Stock Plan which may be settled in cash.

 

3.5          Bonus.  If a Termination Event occurs, Executive
shall receive a pro-rated bonus under any bonus plan applicable to Executive,
which is in place at the time of the Termination 

 

4

 

Event for the performance period in
which the Termination Event occurs.  The
amount of the bonus shall be calculated under the terms of such bonus program
as established by the Company, including whether or not, or to what degree, any
performance-based conditions have been met, and shall be equal to the amount of
the bonus the Executive would have been paid under the terms of such bonus
program had the Executive continued his employment with the Company until the
end of such performance period multiplied by a fraction in which (i) the
numerator is the number of days from and including the first day of the performance
period until and including the date of the Termination Event, and (ii) the
denominator is the number of days in the performance period.  Such bonus shall be paid on the date
Executive would have received the bonus if the Termination Event had not
occurred during such performance period; provided, however, that in any event
such bonus will be paid no later than two and one-half (2 1⁄2) months after the
end of the calendar year in which the Termination Event occurs.  Executive’s rights to the payment provided in
this Section 3.5 shall not be terminated by the application of Section 4.2 of
this Agreement.  This Section 3.5 shall
not apply to awards pursuant to the Stock Plan.

 

3.6          Mitigation.  Except as otherwise specifically provided
herein, Executive shall not be required to mitigate damages or the amount of
any payment provided under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by Executive as a result of
employment by another employer or by retirement benefits after the date of the
Termination Event, or otherwise.

 

3.7          Compliance with Section 409A.  In the event that (i) one or more payments of
compensation or benefits received or to be received by Executive pursuant to
this Agreement (“Agreement Payment”) would constitute deferred compensation
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and (ii) Executive is deemed at the time of such termination of
employment to be a “specified employee” under Section 409A(a)(2)(B)(i) of the
Code, then such Agreement Payment shall not be made or commence until the
earlier of (i) the expiration of the six (6)-month period measured from the
date of Executive’s “separation from service” (as such term is at the time
defined in Treasury Regulations under Section 409A of the Code) with the
Company or (ii) such earlier time permitted under Section 409A of the Code and
the regulations or other authority promulgated thereunder; provided, however,
that such deferral shall only be effected to the extent required to avoid
adverse tax treatment to Executive under Section 409A of the Code, including
(without limitation) the additional twenty percent (20%) tax for which Executive
would otherwise be liable under Section 409A(a)(1)(B) of the Code in the
absence of such deferral.  During any
period in which an Agreement Payment to Executive is deferred pursuant to the
foregoing, Executive shall be entitled to interest on the deferred Agreement
Payment at a per annum rate equal to the highest rate of interest applicable to
six (6)-month non-callable certificates of deposit with daily compounding
offered by the following institutions: Citibank N.A., Wells Fargo Bank, N.A. or
Bank of America, on the date of such separation from service. Upon the
expiration of the applicable deferral period, any Agreement Payment which would
have otherwise been made during that period (whether in a single sum or in
installments) in the absence of this paragraph shall be paid to Executive or
his beneficiary in one lump sum, including all accrued interest.

 

5

 

ARTICLE IV.

 

LIMITATIONS AND CONDITIONS ON BENEFITS;
AMENDMENT OF AGREEMENT

 

4.1          Reduction in Payments and Benefits; Withholding Taxes.  The benefits provided
under this Agreement are in lieu of any benefit provided under any other
severance plan, program or arrangement of the Company in effect at the time of
a Termination Event.  The Company shall
withhold appropriate federal, state or local income, employment and other
applicable taxes from any payments hereunder.

 

4.2          Obligations of the Executive.

 

(a)           For two years following the
Termination Event, Executive agrees not to personally solicit any of the
employees either of the Company or of any entity in which the Company directly
or indirectly possesses the ability to determine the voting of 50% or more of
the voting securities of such entity (including two-party joint ventures in
which each party possesses 50% of the total voting power of the entity) to
become employed elsewhere or provide the names of such employees to any other
company which Executive has reason to believe will solicit such employees.

 

(b)           Following the occurrence of a
Termination Event, Executive agrees to continue to satisfy his obligations
under the terms of the Company’s standard form of Proprietary Information and
Non-Disclosure Agreement previously executed by Executive (or any comparable
agreement subsequently executed by Executive in substitution or supplement
thereto).  Executive’s obligations under
this Section 4.2(b) shall not be limited to the Term.

 

(c)           It is expressly understood and agreed
that although Executive and the Company consider the restrictions contained in
this Section 4 to be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction against
Executive, the provisions of this Agreement shall not be rendered void, but
shall be deemed amended to apply as to such maximum time or territory and to
such maximum extent as such court may judicially determine or indicate to be
enforceable.  Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the other restrictions contained herein.

 

(d)           Executive acknowledges and agrees
that the Company’s remedies at law for a breach or threatened breach of any of
the provisions of Section 4.2(a) or Section 4.2(b) would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall, with respect to a breach or threatened breach of Section
4.2(a) or Section 4.2(b) only, obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction, or
any other equitable remedy which may then be available.

 

4.3          Employee Release Prior to Receipt of Benefits.  Upon the occurrence of a
Termination Event, and prior to the receipt of any benefits under this
Agreement on account of the occurrence of a Termination Event, Executive shall,
as of the date of a Termination Event, 

 

6

 

execute an employee release
substantially in the form attached hereto as Exhibit A (“Release”) as shall be
determined by the Company.  Such employee
Release shall specifically relate to all of Executive’s rights and claims in
existence at the time of such execution relating to Executive’s employment with
the Company, but shall not include (i) Executive’s rights under this Agreement;
(ii) Executive’s rights under any employee benefit plan sponsored by the
Company; or (iii) Executive’s rights to indemnification under the Company’s
bylaws or other governing instruments or under any agreement addressing such
subject matter between Executive and the Company or under any merger or
acquisition agreement addressing such subject matter; (iv) Executive’s rights
of insurance under any liability policy covering the Company’s officers or (v) claims
which Executive may not Release as a matter of law, including, but not limited
to, indemnification claims under applicable law.  It is understood that Executive has
twenty-one (21) days after receipt of the form of Release from the Company to
consider whether to execute such employee Release and Executive may revoke such
employee Release within seven (7) days after execution of such employee
Release.  In the event that the
Executive has not received a form of Release from the Company by the tenth (10th) day following the
Termination Event, the Executive may execute the form of Release attached
hereto as Exhibit A and that shall be deemed acceptable to the Company.  In the event Executive does
not execute such employee Release within the twenty-one (21) day period, or if
Executive revokes such employee Release within the seven (7) day period, no
benefits shall be payable under this Agreement and this Agreement shall be null
and void.  Nothing in this Agreement
shall limit the scope or time of applicability of such employee Release once it
is executed and not timely revoked.

 

4.4          Parachute Payments.  In the event
that the any payments or benefits received or to be received by Executive
pursuant to this Agreement or otherwise (i) constitute “parachute payments”
within the meaning of Section 280G of the Code and (ii) but for this Section 4.4,
would be subject to the excise tax imposed by Section 4999 of the Code, then
the Executive’s benefits under this Agreement shall be payable either: (A) in
full, or (B) as to such lesser amount which would result in no portion of such
payments or benefits being subject to the excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section 4999,
results in the receipt by the Executive on an after-tax basis, of the greatest
amount of benefits under this Agreement, notwithstanding that all or some
portion of such benefits may be taxable under Section 4999 of the Code.  In the event that a lesser amount is paid
under clause (B) above, then the elements of the Executive’s payments
hereunder shall be reduced in such order as the
Company determines, in its sole discretion, has the least economic detriment to
the Executive.  To the extent the
economic impact of reducing payments from one or more elements is equivalent,
the reduction shall be made prorata by the Company in its sole discretion.

 

4.5          Amendment or Termination of This Agreement.  The Company may make amendments to this Agreement without the consent of
the Executive which are non-material and which are
not adverse to the Executive to the extent necessary or advisable to comply
with laws.  Any other changes to or,
termination of this Agreement
may be made only upon the mutual written consent of the Company and Executive;
provided, however, that only prior to the Section 1.2 Date , the Company may
unilaterally terminate this Agreement following eighteen (18) months’ prior
written notice to Executive and on or following the Section 1.2 Date, this
Agreement may not be terminated.  If the Company makes any changes to this Agreement
pursuant to the first sentence of this Section 4.5 it shall provide prompt
written notice and a copy of such change to the Executive.

 

7

 

ARTICLE V.

 

OTHER RIGHTS AND BENEFITS NOT AFFECTED

 

5.1          Nonexclusivity.  Nothing in the Agreement shall prevent or
limit Executive’s continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices provided by the
Company and for which Executive may otherwise qualify, nor shall anything
herein limit or otherwise affect such rights as Executive may have under any
stock option or other agreements with the Company; provided, however,
that in accordance with Section 4.1, any benefits provided hereunder shall be
in lieu of any other severance benefits to which Executive may otherwise be
entitled, including without limitation, under any employment contract or
severance plan.  Except as otherwise
expressly provided herein, amounts which are vested benefits or which Executive
is otherwise entitled to receive under any plan, policy, practice or program of
the Company at or subsequent to the date of a Termination Event shall be
payable in accordance with such plan, policy, practice or program.

 

5.2          Employment Status.  This Agreement does not constitute a contract
of employment or impose on Executive any obligation to remain as an employee, or
impose on the Company any obligation (i) to retain Executive as an employee, (ii)
to change the status of Executive as an at-will employee, or (iii) to change
the Company’s policies regarding termination or alteration of employment.

 

ARTICLE VI.

 

NON-ALIENATION OF BENEFITS

 

No benefit hereunder shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to do so shall be void.

 

ARTICLE VII.

 

DEFINITIONS

 

For purposes of the Agreement, the following terms
shall have the meanings set forth below:

 

7.1          “Agreement” means this Change of Control
Severance Agreement.

 

7.2          “Base Salary” means Executive’s annual
salary (excluding bonus, any other incentive or other payments and stock option
exercises) from the Company at the time of the occurrence of the Change of
Control or a Termination Event, whichever is greater.

 

7.3          “Cause” means misconduct, including but not
limited to: (i) conviction of any felony or any crime involving moral turpitude
or dishonesty which has a material adverse effect on the Company’s business or
reputation; (ii) repeated unexplained or unjustified absences from the Company;
(iii) refusal or willful failure to act in accordance with any specific lawful
direction or order of the Company or stated written policy of the Company which
has a material 

 

8

 

adverse effect on the Company’s
business or reputation; (iv) a material and willful violation of any state or
federal law which if made public would materially injure the business or
reputation of the Company as reasonably determined by the Board; (v) participation
in a fraud or act of dishonesty against the Company which has a material
adverse effect on the Company’s business or reputation; (vi) conduct by
Executive which the Board determines demonstrates gross unfitness to serve; or (vii)
intentional, material violation by Executive of any contract between Executive
and the Company or any statutory duty of Executive to the Company that is not
corrected within thirty (30) days after written notice to Executive thereof.  Whether or not the actions or omissions of
Executive constitute “Cause” within the meaning of this Section 7.3 shall be
decided by the Board based upon a reasonable good faith investigation and
determination.  Physical or mental
disability shall not constitute “Cause.”

 

7.4          “Change of Control” means the occurrence of
any of the following events:

 

(i)            The sale, exchange, lease or other
disposition or transfer of all or substantially all of the consolidated assets
of the Company to a person or group (as such terms are defined or described in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) which will continue the business of the Company
in the future; or

 

(ii)           A merger or consolidation involving
the Company in which the shareholders of the Company immediately prior to such
merger or consolidation are not the beneficial owners (within the meaning of Rules
13d-3 and 13d-5 promulgated under the Exchange Act) of more than 75% of the
total voting power of the outstanding voting securities of the corporation
resulting from such transaction in substantially the same proportion as their
ownership of the total voting power of the outstanding voting securities of the
Company immediately prior to such merger or consolidation; or

 

(iii)          The acquisition of beneficial ownership (within the meaning
of Rules 13d-3 and 13d-5 promulgated under the Exchange Act) of at least 25% of
the total voting power of the outstanding voting securities of the Company by a
person or group (as such terms are defined or described in Sections 3(a)(9) and
13(d)(3) of the Exchange Act).

 

7.5          “Company” means Agilent Technologies, Inc.,
a Delaware corporation, and any successor thereto.

 

7.6          “Good Reason” means (i) a more than $10,000
reduction of Executive’s rate of compensation as in effect immediately prior to
the Effective Date of this Agreement or in effect immediately prior to the
occurrence of a Change of Control, whichever is greater, other than reductions
in Base Salary that apply broadly to employees of the Company or reductions due
to varying metrics and achievement of performance goals for different periods
under variable pay programs; (ii) either (A) failure to provide a package of
benefits which, taken as a whole, provides substantially similar benefits to
those in which the Executive is entitled to participate in the day prior to the
occurrence of the Change of Control (except that employee contributions may be
raised to the extent of any cost increases imposed by third parties) or (B) any
action by the Company which would significantly and adversely affect
Executive’s participation or reduce Executive’s benefits under any of such
plans in existence the day prior to the Change of Control, other than changes
that apply broadly to employees of the Company; (iii) change in Executive’s
duties, responsibilities, authority, job title, or reporting relationships
resulting in a significant 

 

9

 

diminution of position, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith which is remedied by the Company within thirty (30) days after notice
thereof is given by Executive; (iv) request that Executive relocate to a
worksite that is more than 35 miles from his prior worksite, unless Executive
accepts such relocation opportunity; (v) failure or refusal of a successor to
the Company to assume the Company’s obligations under this Agreement, as
provided in Section 8.7; or (vi) material breach by the Company or any
successor to the Company of any of the material provisions of this
Agreement.  For purposes of clause (iii) of
the immediately preceding sentence, Executive’s duties, responsibilities,
authority, job title or reporting relationships shall not be considered to be
significantly diminished (and therefore shall not constitute “Good Reason”) so
long as Executive continues to perform substantially the same functional role
for the Company as Executive performed immediately prior to the occurrence of
the Change of Control, even if the Company becomes a subsidiary or division of
another entity.

 

7.7          “Target Bonus” means that amount (expressed as a percentage
of Executive’s Base Salary) equal to Executive’s “target bonus” as defined
under the Company’s Performance-Based Compensation Plan for Covered Employees
(or the comparable term or standard under the Company’s cash incentive plan in
effect at the time of Executive’s Termination Event if the Performance-Based
Compensation Plan for Covered Employees is no longer in effect at such time) as
set for the Executive by the Compensation Committee of the Board of Directors
or other authorized body covering the twelve-month period ending at the end of
the performance period during which the Executive’s Termination Event occurs.

 

7.8          “Termination Event” means an involuntary
termination of employment described in Section 2.1(a) or a voluntary
termination of employment described in Section 2.2(a).

 

7.9          Termination of employment for purposes of this Agreement means a separation
from service within the meaning of Treasury Regulation § 1.409A-1(h).  The Executive shall not be deemed to have
separated from service if the Executive continues to provide services to the
Company at an annual rate that is fifty percent or more of the services
rendered, on average, during the immediately preceding three full years of
employment with the Company (or if employed by the Company less than three
years, such lesser period); provided, however, that a separation from service
will be deemed to have occurred if the Executive service with the Company is
reduced to an annual rate that is less than twenty percent of the services
rendered, on average, during the immediately preceding three full years of
employment with the Company (or if employed by the Company less than three
years, such lesser period). For purposes of this Section 7.9 only and for
determining whether a Executive has experienced a separation from service, the
“Company” shall mean the Company and its affiliates that are treated as a
single employer under section 414(b) or (c) of the Code.

 

ARTICLE VIII.

 

GENERAL PROVISIONS

 

8.1          Notices.  Any notices provided hereunder must be in
writing and such notices or any other written communication shall be deemed
effective upon the earlier of personal delivery (including personal delivery by
telex or facsimile) or the third day after mailing by first class 

 

10

 

mail, to the Company at its primary
office location and to Executive at Executive’s address as listed in the
Company’s payroll records.  Any payments
made by the Company to Executive under the terms of this Agreement shall be
delivered to Executive either in person or at such address as listed in the
Company’s payroll records.

 

8.2                               Severability.  It is the intent of the parties to this
Agreement that whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.

 

8.3                               Waiver.  If either party should waive any breach of
any provisions of this Agreement, that party shall not thereby be deemed to
have waived any preceding or succeeding breach of the same or any other
provision of this Agreement.

 

8.4                               Complete Agreement.  This Agreement, including Exhibit A, constitutes
the entire agreement between Executive and the Company and it is the complete,
final, and exclusive embodiment of their agreement with regard to this subject
matter.  It is entered into without
reliance on any promise or representation other than those expressly contained
herein.

 

8.5                               Counterparts.  This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

 

8.6                               Headings.  The headings of the Articles and Sections
hereof are inserted for convenience only and shall neither be deemed to
constitute a part hereof nor to affect the meaning thereof.

 

8.7                               Successors and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive
and the Company, and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not delegate any of Executive’s
duties hereunder and may not assign any of Executive’s rights hereunder without
the written consent of the Company, which consent shall not be withheld
unreasonably.  Any successor to the
Company (whether direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company’s business
and/or assets shall assume the Company’s obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession.  For all purposes under this Agreement, the
term “Company” shall include any successor to the Company’s business and/or
assets, whether or not such successor executes and delivers an assumption
agreement referred to in the preceding sentence or becomes bound by the terms
of this Agreement by operation of law or otherwise.

 

8.8                               Attorney Fees.  If either party hereto brings any action to
enforce such party’s rights hereunder, the prevailing party in any such action
shall be entitled to recover such party’s reasonable attorneys’ fees and costs
incurred in connection with such action.

 

11

 

8.9                               Arbitration.  In order to ensure rapid and economical
resolution of any dispute which may arise under this Agreement, Executive and
the Company agree that any and all disputes or controversies, arising from or
regarding the interpretation, performance, enforcement or termination of this
Agreement shall submitted to JAMS for non-binding mediation.  If complete agreement cannot be reached
within 60 days after the date of submission to mediation, any remaining issues
will be submitted to JAMS to be resolved by final and binding arbitration under
the JAMS Arbitration Rules and Procedures for Employment Disputes.  The reference to JAMS shall refer to any
successor to JAMS, if applicable.  BY ENTERING INTO THIS AGREEMENT, THE COMPANY AND
EXECUTIVE ACKNOWLEDGE THAT THEY ARE WAIVING THEIR RIGHT TO JURY TRIAL OF ANY
DISPUTE COVERED BY THIS AGREEMENT.

 

8.10                        Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of
the State of California.

 

8.11                        Construction of Agreement.  In the event of a
conflict between the text of the Agreement and any summary, description or
other information regarding the Agreement, the text of the Agreement shall
control.

 

12

 

IN WITNESS WHEREOF, the parties
have executed this Agreement effective on the day and year written above.

 

 

	
  Agilent Technologies, Inc.,

  a
  Delaware corporation

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

13

 

Exhibit A

 

GENERAL
RELEASE AND AGREEMENT

 

This General Release and Agreement (the
“Agreement”) is made and entered into by
                                                       (“Executive”).  The Agreement is part of an agreement between
Executive and Agilent Technologies, Inc. (“Agilent’) to terminate
Executive’s employment with Agilent on terms that are satisfactory both to
Agilent and to Executive.  Therefore,
Executive agrees as follows:

 

1.                                       Executive agrees to attend a Functional Exit Interview on
                        ,
20     at which time all company property and
identification will be turned in and the appropriate personnel documents will
be executed.  Thereafter, Executive
agrees to do such other acts as may be reasonably requested by Agilent in order
to effectuate the terms of this agreement. 
Executive agrees to remove all personal effects from his current office
within seven days of signing this agreement and in any event not later than
                      ,
20    .

 

2.                                       Executive agrees not to make any public statement or statements to
the press concerning Agilent, its business objectives, its management
practices, or other sensitive information without first receiving Agilent’s
written approval.  Executive further
agrees to take no action which would cause Agilent or its employees or agents
any embarrassment or humiliation or otherwise cause or contribute to Agilent’s
or any such person’s being held in disrepute by the general public or Agilent’s
employees, clients, or customers.

 

3.                                       Executive, on behalf of Executive’s heirs, estate, executors, administrators,
successors and assigns does fully release, discharge, and agree to hold
harmless Agilent, its officers, agents, employees, attorneys, subsidiaries,
affiliated companies, successors and assigns from all actions, causes of
action, claims, judgments, obligations, damages, liabilities, costs, or expense
of whatsoever kind and character which he may have, including but not limited to;

 

a.                                       any claims relating to employment discrimination on account of
race, sex, age, national origin, creed, disability, or other basis, whether or
not arising under the Federal Civil Rights Acts, the Age Discrimination in
Employment Act, California Fair Employment and Housing Act, the Rehabilitation
Act of 1973, the Americans With Disabilities Act, any amendments to the foregoing
laws, or any other federal, state, county, municipal, or other law, statute,
regulation or order relating to employment discrimination;

 

b.                                      any claims relating to pay or leave of absence arising under the
Fair Labor Standards Act, the Family Medical Leave Act, and any similar laws
enacted in California;

 

14

 

c.                                       any claims for reemployment, salary, wages, bonuses, vacation pay,
stock options, acquired rights, appreciation from stock options, stock appreciation
rights, benefits or other compensation of any kind;

 

d.                                      any claims relating to, arising out of, or connected with
Executive’s employment with Agilent, whether or not the same be based upon any
alleged violation of public policy; compliance (or lack thereof) with any
internal Agilent policy, procedure, practice or guideline; or any oral,
written. express, and/or implied employment contract or agreement, or the
breach of any terms thereof, including but not limited to, any implied covenant
of good faith and fair dealing; or any federal, state, county or municipal law,
statute, regulation, or order whether or not relating to labor or employment; and

 

e.                                       any claims relating to, arising out of, or connected with any
other matter or event occurring prior to the execution of this Agreement
whether or not brought before any judicial, administrative, or other tribunal.

 

The foregoing release shall not apply to (i) Executive’s
rights under the Amended and Restated Change of Control Severance Agreement
between Executive and the Company; (ii) Executive’s rights under any
employee benefit plan sponsored by the Company; (iii) Executive’s rights
to indemnification under the Company’s bylaws or other governing instruments or
under any agreement addressing such subject matter between Executive and the
Company or under any merger or acquisition agreement addressing such subject
matter; (iv) Executive’s rights of insurance under any liability policy
covering the Company’s officers or (v) claims which Executive may not release
as a matter of law, including, but not limited to, indemnification claims under
applicable law.

 

4.                                       Executive represents and warrants that Executive has not assigned
any such claim or authorized any other person or entity to assert such claim on
Executive’s behalf.  Further, Executive
agrees that under this Agreement Executive waives any claim for damages
incurred at any time in the future because of alleged continuing effects of
past wrongful conduct involving any such claims and any right to sue for
injunctive relief against the alleged continuing effects of past wrongful
conduct involving such claims.

 

5.                                       In entering into this Agreement, the parties have intended that
this Agreement be a full and final settlement of all matters, whether or not
presently disputed, that could have arisen between them.

 

6.                                       Executive understands and expressly agrees that
this Agreement extends to all claims of every nature and kind whatsoever, known
or unknown, suspected or unsuspected, past or present and all rights under Section 1542
of the California Civil Code and/or any similar statute or law or any other
jurisdiction are hereby expressly waived. 
Such section reads as follows:

 

“Section 1542.  A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have materially affected
his settlement with the debtor.”

 

15

 

7.                                       It is expressly agreed that the claims released pursuant to this
Agreement include all claims against individual employees of Agilent, whether
or not such employees were acting within the course and scope of their
employment.

 

8.                                       Executive understands and agrees that, as a condition of this Agreement,
Executive shall not be entitled to any employment (including employment as an
independent contractor or otherwise) with Agilent, its subsidiaries or related
companies, or any successor, and Executive hereby waives any right, or alleged
right, of employment or re-employment with Agilent.  Executive further agrees not to apply for
employment with Agilent in the future and not to institute or join any action,
lawsuit or proceeding against Agilent, its subsidiaries, related companies or
successors for any failure to employ Executive. 
In the event Executive should secure such employment, it is agreed that
such employment is voidable without cause in the sole discretion of
Agilent.  After terminating Executive’s
employment, should Executive become employed by another company which Agilent
merges with or acquires after the date of this Agreement, Executive may
continue such employment only if Agilent makes offers of employment to all
employees of the acquired or merged company.

 

9.                                       Executive agrees that the terms, amount and fact of settlement
shall be confidential until Agilent Technologies needs to make any required
disclosure of any agreements between Agilent and Executive.  Therefore, except as may be necessary to enforce
the rights contained herein in an appropriate legal proceeding or as may be
necessary to receive professional services from, an attorney, accountant, or
other professional adviser in order for such adviser to render professional
services, Executive agrees not to disclose any information concerning these
arrangements to anyone, including, but not limited to, past, present and future
employees of Agilent, until such time of the public filings.

 

10.                                 At Agilent’s request, Executive shall cooperate fully in
connection with any legal matter, proceeding or action relating to Agilent.

 

11.                                 The terms of this Agreement are intended by the parties as a final
expression of their agreement with respect to such terms as are included in
this Agreement and may not be contradicted by evidence of any prior or
contemporaneous agreement.  The parties
further intend that this Agreement constitutes the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any judicial or other proceeding, if any, involving this
Agreement.  No modification of this
Agreement shall be effective unless in writing and signed by both parties
hereto.

 

12.                                 It is further expressly agreed and understood that Executive has
not relied upon any advice from Agilent Technologies, Inc. and/or its
attorneys whatsoever as to the taxability, whether pursuant to federal, state,
or local income tax statutes or regulations or otherwise, of the payments made
hereunder and that Executive will be solely liable for all tax obligations, if
any, arising from payment of the sums specified herein and shall hold Agilent
Technologies, Inc. harmless from any tax obligations arising from said
payment.

 

13.                                 If there is any dispute arising out of or related to this
Agreement, which cannot be settled by good faith negotiation between the
parties, such dispute will be submitted to JAMS for 

 

16

 

non-binding mediation.  If complete agreement cannot be reached
within 60 days of submission to mediation, any remaining issues will be
submitted to JAMS for final and binding arbitration pursuant to JAMS
Arbitration Rules and Procedures for Employment Disputes.  The reference to JAMS shall refer to any
successor to JAMS, if applicable.  BY ENTERING INTO THIS AGREEMENT, EXECUTIVE
ACKNOWLEDGES THAT EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO JURY TRIAL OF ANY
DISPUTE COVERED BY THIS AGREEMENT.

 

17

 

	
  14.

  	
  The following notice is provided in accordance with the provisions of
  Federal Law:

  
	
   

  	
   

  
	
   

  	
  You have up to
  twenty-one days (21) days from the date this General Release and Agreement is
  given to you in which to accept its terms, although you may accept it any
  time within those twenty-one days. You are advised to consult with an
  attorney regarding this Agreement. You have the right to revoke your
  acceptance of this Agreement at any time within seven (7) days from the
  date you sign it, and this Agreement will not become effective and
  enforceable until this seven (7) day revocation period has expired. To
  revoke your acceptance, you must send a written notice of revocation to
  Agilent Technologies, Inc., Attention: Senior Vice President and General
  Counsel located at 5301 Stevens Creek Boulevard, MS 1A-11, Santa Clara, CA
  95051 by 5:00 p.m. on or before the seventh day after you sign this
  Agreement.

  

 

EXECUTIVE
FURTHER STATES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT WITH THE
ATTORNEY OF EXECUTIVE’S CHOICE, THAT EXECUTIVE HAS CAREFULLY READ THIS
AGREEMENT, THAT EXECUTIVE HAS HAD AMPLE TIME TO REFLECT UPON AND CONSIDER ITS
CONSEQUENCES, THAT EXECUTIVE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT,
THAT THE ONLY PROMISES MADE TO EXECUTIVE TO SIGN THIS AGREEMENT ARE THOSE
STATED ABOVE OR IN THAT CHANGE OF CONTROL SEVERANCE AGREEMENT BETWEEN AGILENT
AND EXECUTIVE, AND THAT EXECUTIVE IS SIGNING THIS AGREEMENT VOLUNTARILY.

 

IN WITNESS WHEREOF, this Agreement has
been executed in duplicate originals on the date indicated below, and shall
become effective as indicated above.

 

 

	
  EXECUTIVE

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

18

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