AMENDED AND RESTATED FERRELLGAS UNIT
OPTION PLAN
The purposes of
this Amended and Restated Ferrellgas Unit Option Plan (the
“Plan”) are to encourage selected Employees of
Ferrellgas, Inc. (the “Company”) to develop a
proprietary interest in the growth and performance of Ferrellgas
Partners, L.P. (the “Partnership”), to generate an
increased incentive to contribute to the Partnership’s future
success and prosperity, thus enhancing the value of the Partnership
for the benefit of its unitholders, and to enhance the ability of
the Company to attract and retain key individuals who are essential
to the progress, growth and profitability of the Partnership, by
giving such Employees the opportunity to acquire Subordinated
Units.
SECTION 2.
ADMINISTRATION
The Plan shall
be administered by the Option Committee of the Board of Directors
of the Company (“the Board”) as designated by the Board
to administer the Plan and composed of not less than two directors
of the Board, each of whom is a “disinterested person”
within the meaning of Rule 16b-3. A majority of the Committee
shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, or
acts approved in writing by all members of the Committee, shall be
deemed the acts of the Committee.
Subject to the
terms of the Plan and applicable law, the Committee shall have the
sole power, authority and discretion to: (i) designate the
Employees who are to be Participants; (ii) determine the
number of Options to be granted to an Employee;
(iii) determine the terms and conditions of any Option;
(iv) interpret, construe and administer the Plan and any
instrument or agreement relating to an Option granted under the
Plan; (v) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; (vi) make a
determination as to the right of any Person to receive payment of
(or with respect to) an Option; and (vii) make any other
determinations and take any other actions that the Committee deems
necessary or desirable for the administration of the
Plan.
Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions with respect
to the Plan or any Option granted thereunder shall be within the
sole discretion of the Committee, may be made at any time, and
shall be final, conclusive, and binding upon all
Persons.
SECTION 3.
UNITS AVAILABLE FOR OPTIONS
3.1 CALCULATION
OF NUMBER OF SUBORDINATED UNITS AVAILABLE. The number of
Subordinated Units available for granting Options under the Plan
shall be 850,000 Subordinated Units, subject to adjustment as
provided in Section 3.3. Further, if any Option granted under
the Plan is forfeited, canceled, surrendered, or otherwise
terminates or expires without the delivery of Subordinated Units or
other consideration, then the Subordinated Units subject to such
Option shall again be available for granting Options under the
Plan.
3.2 SOURCES OF
UNITS DELIVERABLE UNDER OPTIONS. Units delivered by the Company on
exercise of an Option may consist, in whole or in part, of Units
acquired in the open market or from any Person, including the
Partnership. With respect to Units to be acquired from the
Partnership for delivery following an Option exercise, the Company
shall pay to the Partnership in cash the Fair Market Value for each
Unit requested to be issued (as of the date of issuance of such
Unit) and the Partnership agrees, upon receipt of such cash, to
issue the Units to the Company for such purpose. With respect to
each Unit issued upon exercise of an Option, the Company shall be
entitled to reimbursement by the Partnership for the excess, if
any, of (i) the Fair Market Value of each such Unit (as of the
date of issuance of such Unit) over (ii) the exercise price of
the Option relating to such Unit.
3.3
ADJUSTMENTS. In the event that (i) any change is made to the
Units issuable under the Plan or (ii) the Partnership makes
any distribution of cash, Common Units, Subordinated Units or other
property to unitholders which results from the sale or disposition
of a major asset or separate operating division of the Partnership
or any other extraordinary event and, in the judgment of the
Committee, such change or distribution would significantly dilute
the rights of Participants hereunder, then the Committee may make
appropriate adjustments in the maximum number of Units issuable
under the Plan to reflect the effect of such change or distribution
upon the Partnership’s capital structure, and may make
appropriate adjustments to the number of Units subject to, and/or
the exercise price of, each outstanding Option. The adjustments
determined by the Committee shall be final, binding and
conclusive.
3.4. UNITS. As
used in this Plan, the term Units shall mean Subordinated Units.
Notwithstanding the foregoing however, (a) in the event that
one third of the Subordinated Units owned by the Company and/or its
Affiliates are converted to Common Units on or after August 1,
1997, pursuant to the Partnership Agreement, then one third of the
Subordinated Units issuable under the Plan, including Units subject
to Options then outstanding, shall be automatically converted to
Common Units; and (b) in the event that all of the
Subordinated Units owned by the Company and/or its Affiliates are
converted into Common Units on or after August 1, 1999,
pursuant to the Partnership Agreement, (i) all references in
the Plan to Subordinated Units or Units shall be automatically
changed to Common Units (ii) all Options then outstanding
shall be automatically converted into Options with respect to
Common Units and (iii) all Subordinated Units issued upon the
exercise of Options shall be automatically converted to Common
Units.
Any Employee
who is not a member of the Committee shall be eligible to be a
Participant. Grants may be made to the same Employee on more than
one occasion.
5.1 OPTION
TERMS. The Committee is hereby authorized to grant Options to
Employees with the following terms and conditions and with such
additional terms and conditions, which are not inconsistent with
the provisions of the Plan, as the Committee shall
determine:
(i) EXERCISE PRICE. The per Unit exercise
price of an Option shall be determined by the Committee at the date
of grant.
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(ii) TIME
AND METHOD OF VESTING OR EXERCISE, The Committee shall determine
the time or times at which an Option may become vested in whole or
in part, may be exercised in whole or in part, and the method by
which payment of the exercise price with respect thereto may be
made; provided, however, no Option shall be exercisable within six
months of its date of grant. Subject to any limitations in the
Option Agreement, a Participant may purchase Units subject to the
vested and exercisable portion of an Option in whole at any time,
or in part from time to time, by delivering to the Chief Financial
Officer of the Company written notice specifying the number of
Units with respect to which the Option is being exercised, together
with payment in full of the purchase price of such Units plus any
applicable federal, state or local taxes for which the Company has
a withholding obligation in connection with such purchase. Such
payment shall be payable in full in cash or by check acceptable to
the Company.
(iii) TERM
OF OPTIONS. The term of each Option shall be for such period as may
be determined by the Committee; provided, however, that in no event
shall the term of any Option exceed a period of 10 years from
the date of its grant.
(iv) TERMINATION OF EMPLOYMENT. Options, to
the extent vested as of the date the Participant ceases to be an
Employee, will remain the property of the Participant until such
Options are exercised pursuant to the Plan or expire by their
terms. Options, to the extent not vested as of the date the
Participant ceases to be an Employee, shall be automatically
canceled unexercised on such date.
(v) LIMITS
ON TRANSFER OF OPTIONS. No Option or rights thereunder shall be
assignable, alienable, saleable or transferable by a Participant
otherwise than by will or by the laws of descent and distribution.
Each Option shall be exercisable during that Participant’s
lifetime only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal
representative. No Option or any rights thereunder may be pledged,
alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void
and unenforceable against the Company.
(vi) LIMITS ON TRANSFERS OF SUBORDINATED
UNITS. Prior to the conversion of Subordinated Units into Common
Units, no Subordinated Units acquired upon the exercise of an
Option, or any rights thereunder, shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or
by the laws of descent and distribution. Further, no Subordinated
Unit, or any rights thereunder, may be pledged, alienated, attached
or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable
against the Partnership and each certificate evidencing such Unit
shall contain a legend reflecting such restrictions.
(vii) UNIT
CERTIFICATES. Upon exercise of an Option, delivery of a certificate
for fully paid and nonassessable Units shall be made to the Person
exercising the Option either at such time during ordinary business
hours after 15 days but not more than 30 days from the
date of receipt of the notice by the Company as shall be designed
in such notice, or at such time, place and manner as may be agreed
upon by the Company and the Person exercising the
Option.
(viii) OPTION AGREEMENT. Each Option shall
be evidenced by an Option Agreement, which shall have such terms
and provisions, not inconsistent with the Plan, that the Committee
determines.
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5.2 OPTION
CANCELLATION RIGHTS. Notwithstanding anything in the Plan to the
contrary, the Committee shall have the discretion to cancel all or
part of any outstanding Options at any time or times. Upon any such
cancellation the Company shall pay to the Participant with respect
to e
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