CHANGE IN
CONTROL AGREEMENT
THIS
AGREEMENT (“Agreement”), made and entered into this
8 th
day of
December, 2008 (the “Effective Date”), by and between
Ferrellgas, Inc. (the “Company”) and Jennifer Boren
(the “Executive”);
WHEREAS,
the Company wishes to assure itself of the continuity of the
Executive’s service in the event of a Change in Control (as
defined below); and
WHEREAS,
the Company and the Executive accordingly desire to enter into this
Agreement on the terms and conditions set forth below;
NOW,
THEREFORE, in consideration of the premises and mutual covenants
set forth herein, IT IS HEREBY AGREED by and between the parties as
follows:
1.
Agreement Term . The “Agreement Term” shall
begin on the Effective Date and shall continue through
December 31, 2009, subject to the following:
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(a)
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As
of December 31, 2009, and on each December 31 thereafter,
the Agreement Term shall automatically be extended for one
additional year unless, not later than the preceding June 30,
either party shall have given notice that such party does not wish
to extend the Agreement Term.
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(b)
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If
a Change in Control occurs during the Agreement Term (as it may be
extended from time to time), the Agreement Term shall continue for
a period of twenty-four calendar months beyond the calendar month
in which such Change in Control occurs and, following an extension
in accordance with this subparagraph (b), no further extensions
shall occur under subparagraph 1(a).
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2.
Certain Definitions . In addition to terms otherwise defined
herein, the following capitalized terms used in this Agreement
shall have the meanings specified:
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(a)
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Board . The term “Board” means
the Board of Directors of the Company.
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(b)
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Cause . The term “Cause”
means:
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(i)
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the
willful and continued failure by the Executive to substantially
perform his duties for the Company (other than any such failure
resulting from the Executive’s being disabled) within a
reasonable period of time after a written demand for substantial
performance is
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delivered to
the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not
substantially performed his duties;
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(ii)
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the
willful engaging by the Executive in conduct which is demonstrably
and materially injurious to the Company, monetarily or otherwise;
or
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(iii)
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the
engaging by the Executive in egregious misconduct involving serious
moral turpitude to the extent that, in the reasonable judgment of
the Board, the Executive’s credibility and reputation no
longer conform to the standard of the Company’s
executives.
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For
purposes of this Agreement, no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive’s action or
omission was in the best interest of the Company.
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(c)
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Change in Control
. The term “Change
in Control” means the first to occur of any of the following
that occurs after the Effective Date:
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(i)
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any
merger or consolidation of the Company in which the Company is not
the survivor;
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(ii)
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any
sale of all or substantially all of the common stock of Ferrell
Companies, Inc. by the Ferrell Companies, Inc. Employee Stock
Ownership Trust;
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(iii)
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a
sale of all or substantially all of the common stock of the
Company;
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(iv)
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a
replacement of the Company as the General Partner of Ferrellgas
Partners, L.P.;
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(v)
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a
public sale of at least 51 percent of the equity of Ferrell
Companies, Inc.; or
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(vi)
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such other transaction designated as
a Change in Control by the Board.
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(d)
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COBRA . The term “COBRA” means
continuing group health coverage required by section 4980B of the
Code or sections 601 et . seq . of the Employee
Retirement Income Security Act of 1974, as amended.
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(e)
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Code . The term “Code” means
the Internal Revenue Code of 1986, as amended.
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(f)
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Covered Termination
. The Executive will
incur a “Covered Termination” upon his Termination Date
if the Termination Date occurs (i) during the Agreement Term,
(ii) upon or following a Change in Control, and (iii) on
account of termination of employment by the Executive for Good
Reason or by Company for reasons other than for Cause.
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(g)
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Good Reason . The term “Good Reason”
means any of the following:
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(a)
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A
reduction in excess of 10% in the Executive’s base salary or
target incentive potential as compared to his base salary or target
incentive in effect immediately prior to the Change in
Control;
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(b)
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A
material diminution in the Executive’s authority, duties or
responsibilities as compared to his authority, duties or
responsibilities immediately prior to the Change in
Control;
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(c)
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The
relocation of the Executive’s principal office location to a
location which is more than 50 highway miles from the location of
the Executive’s principal office location immediately prior
to the Change in Control; or
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(d)
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The
Company’s material breach of any material term of this
Agreement.
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Notwithstanding any other provision
of this Agreement to the contrary, the Executive’s
Termination Date shall not be considered to be on account of Good
Reason unless the Executive provides notice of the event or
condition that the Executive believes to constitute Good Reason
within 180 days of the date on which the event first occurs or
the condition first exists, the Company does not cure such event or
condition within 30 days following the date the Executive
provides notice and the Executive resigns his employment with the
Company and its affiliates for Good Reason within the Agreement
Term.
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(h)
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Termination Date
. The term
“Termination Date” with respect to the Executive means
the date on which the Executive’s employment with the Company
and its affiliates terminates for any reason, including voluntary
resignation. If the Executive becomes employed by the entity into
which the Company is merged, or the purchaser of substantially all
of the assets of the Company, or a successor to such entity or
purchaser, the Executive’s Termination Date shall not be
treated as having occurred for purposes of this Agreement until
such time as the Executive terminates employment with the successor
and its affiliates (including, without limitation, the merged
entity or purchaser). If the Executive is transferred to employment
with an affiliate (including a successor to the Company, and
regardless of whether before, on, or after a Change in Control),
such
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transfer shall
not constitute the Executive’s Termination Date for purposes
of this Agreement.
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3.
Payments and Benefits . If the Executive’s Termination
Date occurs as the result of a Covered Termination, the Executive
shall be entitled to the following payments and
benefits:
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(a)
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The
Executive will be entitled to a payment equal to two times the
Executive’s annual base salary in effect immediately prior to
the Change in Control (without regard to any reduction thereof in
contemplation of the Change in Control).
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(b)
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The
Executive will be entitled to a payment equal to two times the
Executive’s target bonus, at his target bonus rate in effect
immediately prior to the Change in Control (without regard to any
reduction thereof in contemplation of the Change in
Control).
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(c)
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For
the two year period following the Termination Date, the Executive
shall be entitled to receive continuing group medical coverage for
himself and his dependents (on a non-taxable basis, including if
necessary, payment of any gross-up payments necessary to result in
net non-taxable benefits), which coverage is not materially less
favorable to the Executive than the group medical coverage which
was provided to the Executive by the Company or its affiliates
immediately prior to the Change in Control. To the extent
applicable and to the extent permitted by law, any continuing
coverage provided to the Executive and/or his dependents pursuant
to this subparagraph (c) shall be considered part of, and not
in addition to, any coverage required under COBRA.
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(d)
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The
Executive will be provided with professional outplacement services
for a period of not more than 12 months following the
Termination Date, at a level customary for an executive, to be
provided by a firm mutually acceptable to the Company and the
Executive.
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Subject to the terms and
conditions of this Agreement, payments pursuant to subparagraphs
(a) and (b) next above shall be made in substantially
equal monthly installments beginning within five days following the
Termination Date. To the extent that the Company is required to
make any gross-up payments to the Executive in order to provide the
benefits described in subparagraph (c) on a non-taxable basis,
such payments shall be made in the month that the Executive
otherwise has taxable income as a result of such benefits, but in
no event later than the end of the year in which the Executive pays
the related taxes.
4.
Mitigation . The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking
other employment or otherwise. None of the Company or any of its
affiliates shall be entitled to set off against the amounts payable
to the Executive under this
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Agreement any amounts owed
to the Company or any of its affiliates by th
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