FERRELLGAS PARTNERS L P appointed new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


Ferrellgas, Inc. (the "General Partner"), the general partner of Ferrellgas Partners, L.P. and Ferrellgas, L.P., and James E. Ferrell entered into (i) an offer letter (the "Offer Letter"), effective as of December 30, 2020, and (ii) an Employment Agreement (the "Employment Agreement") and an Executive Confidentiality and Restrictive Covenants Agreement (the "Confidentiality and Restrictive Covenants Agreement"), both effective as of December 31, 2020 (the "Commencement Date"), pursuant to which Mr. Ferrell will serve as President and Chief Executive Officer of the General Partner beginning on the Commencement Date, transitioning from his current title of Interim President and Chief Executive Officer, which interim title he has held since September 27, 2016. Mr. Ferrell will continue to serve as the principal executive officer for purposes of the Securities Exchange Act of 1934, as amended.


Pursuant to the Offer Letter, Mr. Ferrell will report to the board of directors of the General Partner. As compensation for Mr. Ferrell's services he will: (i) be paid an annual base salary of $900,000, (ii) receive a sign-on bonus of $2,000,000, (iii) be eligible to participate in the General Partner's Short Term Incentive Plan, and (iv) be eligible for medical, dental and visions benefits provided by the General Partner. Consistent with the terms of the Offer Letter, the Employment Agreement further provides that Mr. Ferrell will be included, to the extent eligible under the terms and conditions, in all of the General Partner's plans providing benefits for its employees.


Pursuant to the terms of the Employment Agreement, Mr. Ferrell will serve as President and Chief Executive Officer for a period beginning on the Commencement Date and continuing for two years, unless earlier terminated by Mr. Ferrell or the General Partner as provided for in the Employment Agreement, with the Employment Agreement automatically terminating on December 31, 2022, unless either party provides no less than 90-days advance written notice prior to expiration. Mr. Ferrell will be entitled to receive the base salary, short-term incentive plan participation and eligibility for medical, dental and vision benefits as described in the Offer Letter, as well as certain severance benefits based on the nature of his termination. Upon termination for Cause (as defined in the Employment Agreement), or upon resignation without Good Reason (as defined in the Employment Agreement), death or disability, Mr. Ferrell will be entitled to receive: (i) all accrued unpaid base salary through the date of termination; (ii) all accrued but unused vacation days; and (iii) any properly documented reimbursable business expenses (collectively, the "Accrued Obligations").


If Mr. Ferrell's employment is terminated by the General Partner without Cause or if Mr. Ferrell parts with the General Partner for Good Reason, Mr. Ferrell will be entitled to receive: (i) the Accrued Obligations; (ii) a lump sum payment of any amounts remaining under the Employment Agreement; and (iii) subject to Mr. Ferrell's election of and qualification for continuation coverage, for a period of 12 consecutive months following termination of employment, premium costs for certain insurance benefits in the monthly amount the General Partner was paying toward Mr. Ferrell's General Partner-provided group health plan insurance coverage immediately prior to his cessation of employment.


The Employment Agreement also requires that Mr. Ferrell enter into the Confidentiality and Restrictive Covenants Agreement, pursuant to which Mr. Ferrell covenants not to compete with the General Partner or any of its subsidiaries and affiliates, or solicit members of senior leadership or business partners, during his employment and for five years thereafter. The Confidentiality and Restrictive Covenants Agreement also contains customary confidentiality and non-disclosure covenants.


On December 30, 2020, the Compensation Committee of the Board of Directors of the General Partner awarded Mr. Ferrell a one-time bonus of $1,500,000, less applicable withholdings, in his capacity as Interim Chief Executive Officer and President, for his effort in executing the operational turnaround of the business and overseeing the execution of the Transaction Support Agreement entered into on December 10, 2020 by the General Partner and certain of its affiliates.


The foregoing description is not a complete description of the Offer Letter, Employment Agreement or Confidentiality and Restrictive Covenants Agreement, and is qualified in its entirety by reference to the full text of each of the Offer Letter, Employment Agreement and Confidentiality and Restrictive Covenants Agreement, copies of which are attached hereto as Exhibit 10.1, 10.2 and 10.3, respectively, and are incorporated by reference in this Item 5.02.