SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only
as permitted by Rule 14c-5(d)(2)
[X] Definitive Information Statement
FERRELLGAS PARTNERS, L.P.
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[_] Fee Computer On Table Below Per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
[LOGO FOR FERRELLGAS PARTNERS, L.P.]
One Liberty Plaza
Liberty, Missouri 64068
April 18, 2001
To our Unitholders:
On April 6, 2001, Ferrellgas Partners, L.P. announced a plan that increases
the cash distribution coverage on your public common units and also modified the
structure of all of the outstanding senior units. We believe these changes are
favorable to you as a public unitholder and were made with the intent of
increasing your common unit price and overall value.
To effect that plan, the holder of a majority of our common units and the
holder of our senior units executed written consents approving amendments to our
partnership agreement. The independent directors of Ferrellgas, Inc., our
general partner, unanimously approved these amendments.
Under the rules of the Securities and Exchange Commission and the terms of
our partnership agreement, we are furnishing you an overview of the transaction
in the attached information statement.
This information statement is being sent to the holders of record of our
common units at the close of business on April 16, 2001. No action is required
on your part.
Sincerely,
/s/ James E. Ferrell
James E. Ferrell
Chairman and Chief Executive Officer
Ferrellgas, Inc.,
the General Partner of Ferrellgas Partners, L.P.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
FERRELLGAS PARTNERS, L.P.
One Liberty Plaza
Liberty, Missouri 64068
INFORMATION STATEMENT
INTRODUCTION
In March 2001, the independent members of the board of directors of
Ferrellgas, Inc. unanimously approved amendments to our partnership agreement.
In accordance with the terms of our partnership agreement, Ferrellgas, Inc. was
authorized to make some of those amendments as our general partner without the
consent of any limited partner to reflect a change that, in its sole discretion,
does not adversely affect our limited partners in any material respect. In
addition, some of the amendments that relate to the amendment of terms of our
senior units required only the consent of a majority of our senior unitholders
and such consent was received on April 6, 2001.
Amendments were also made to our partnership agreement that required the
consent of a majority of our common unitholders. These amendments added
provisions for the deferral of distributions on the common units held by Ferrell
Companies, Inc. in an aggregate amount up to $36 million. Ferrell Companies
owns more than a majority of our common units and on April 6, 2001, executed a
consent to approve those amendments. Our partnership agreement allows a consent
to be taken without a meeting and without advance notice if prompt notice of the
resulting action is given to limited partners who did not consent.
The amendments to our partnership agreement are reflected in the form of
our Third Amended and Restated Agreement of Limited Partnership.
This information statement is being mailed on or about April 18, 2001, to
holders of record of our common units at the close of business on April 16,
2001.
In accordance with federal securities law, the amendments consented to by
Ferrell Companies will not be effective until twenty days following the mailing
of this information statement.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
INFORMATION STATEMENT
INTRODUCTION
TABLE OF CONTENTS
PAGE
INTRODUCTION......................................................................................................... 1
ABOUT THIS INFORMATION STATEMENT..................................................................................... 4
Who sent me this information statement?............................................................................. 4
Why did I receive this information statement?....................................................................... 4
What will I receive when the amendments to the partnership agreement become effective?.............................. 4
When do the amendments become effective?............................................................................ 4
Why am I not being asked to vote?................................................................................... 4
What do I need to do now?........................................................................................... 4
Do I have any dissenters' rights?................................................................................... 4
What were the most significant changes made to the units owned by Ferrell Companies, Inc.?.......................... 4
What were the most significant changes made to the senior units?.................................................... 5
Have my common units been negatively affected?...................................................................... 5
How can I obtain more information about Ferrellgas Partners?........................................................ 5
UNIT OWNERSHIP....................................................................................................... 5
How many common units are issued and outstanding as of the record date?............................................. 5
Who are the largest holders of our common units?.................................................................... 5
How many common units do the directors and executive officers of Ferrellgas, Inc. own?.............................. 6
DESCRIPTION OF AMENDMENTS TO OUR PARTNERSHIP AGREEMENT............................................................... 7
What were the senior unit amendments?............................................................................... 7
What are the amendments to allow for the deferral of distributions to the common units held by Ferrell Companies?... 8
What are the effects of the amendments on our common unitholders?................................................... 9
Does anyone have any substantial interest in the proposed amendments?............................................... 10
Where can I obtain a copy of the partnership agreement?............................................................. 10
2
PAGE
OTHER BUSINESS....................................................................................................... 10
COSTS OF INFORMATION STATEMENT....................................................................................... 10
FORWARD-LOOKING STATEMENTS........................................................................................... 11
3
ABOUT THIS INFORMATION STATEMENT
WHO SENT ME THIS INFORMATION STATEMENT?
The board of directors of Ferrellgas, Inc., as general partner, sent you
this information statement on behalf of Ferrellgas Partners, L.P.
WHY DID I RECEIVE THIS INFORMATION STATEMENT?
You received this information statement because federal securities law
requires us to provide you information regarding some amendments to our
partnership agreement, even though your vote is neither required nor requested
for the amendments to become effective.
WHAT WILL I RECEIVE WHEN THE AMENDMENTS TO THE PARTNERSHIP AGREEMENT BECOME
EFFECTIVE?
No additional information will be provided and no action is required from
you.
WHEN DO THE AMENDMENTS BECOME EFFECTIVE?
The amendments providing for the deferral of distributions on the common
units held by Ferrell Companies will become effective immediately after twenty
days from the date of mailing this information statement. The amendments that
modify the structure of the senior units were made effective on April 6, 2001.
WHY AM I NOT BEING ASKED TO VOTE?
Ferrell Companies holds a majority of our issued and outstanding common
units and has already approved the amendments pursuant to a written consent in
lieu of a meeting. That approval, together with the approval of the board of
directors of Ferrellgas, Inc., is sufficient under Delaware law and our
partnership agreement. No further approval by any other holder of our common
units is required.
WHAT DO I NEED TO DO NOW?
No further action on your part is requested or necessary. This information
statement is purely for your information, and does not require or request you to
do anything.
DO I HAVE ANY DISSENTERS' RIGHTS?
We were formed under the laws of the State of Delaware. Under those laws,
dissenters' rights are not available to holders of our common units with respect
to the approval of these amendments to our partnership agreement.
WHAT WERE THE MOST SIGNIFICANT CHANGES MADE TO THE UNITS OWNED BY FERRELL
COMPANIES, INC.?
We made changes to our partnership agreement that provided for the possible
deferral of distributions on the units held by Ferrell Companies, Inc. in an
aggregate amount up to $36 million, in addition to other modifications discussed
in this information statement. We believe
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this ability to defer distributions to these units provides more security
related to the quarterly distribution paid on the common units owned by you.
WHAT WERE THE MOST SIGNIFICANT CHANGES MADE TO THE SENIOR UNITS?
We improved the senior unit to common unit conversion ratio from 125% to
100% and we extended the date of conversion to December 31, 2005, in addition to
other modifications discussed in this information statement.
HAVE MY COMMON UNITS BEEN NEGATIVELY AFFECTED?
No. We believe these changes are favorable to you as a public unitholder
and were taken with the intent of increasing your common unit price and overall
value.
HOW CAN I OBTAIN MORE INFORMATION ABOUT FERRELLGAS PARTNERS?
We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read and copy any of these
documents at the Commission's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. (Please call the Commission at 1-800-SEC-0330 for
further information on the public reference room.) You also may read and copy
any of these documents at either of the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of the
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Our common units are listed on the New York Stock
Exchange (NYSE: FGP). Reports and other information concerning us may be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. Our filings also are available to the public at the
Commission's web site at http://www.sec.gov. You also may request a copy of our
filings by contacting our Secretary, c/o Ferrellgas Partners, L.P., One Liberty
Plaza, Liberty, Missouri 64068.
UNIT OWNERSHIP
HOW MANY COMMON UNITS ARE ISSUED AND OUTSTANDING AS OF THE RECORD DATE?
We used a record date of April 16, 2001, to determine which holders of our
common units would receive this information statement. As of that date, there
were 31,307,116 common units issued and outstanding. Of these common units,
13,489,516 were owned by public unitholders such as yourself with the remaining
17,817,600 owned by Ferrell Companies.
WHO ARE THE LARGEST HOLDERS OF OUR COMMON UNITS?
Except as set forth below, we know of no single person or group that is the
beneficial owner of five percent or more of our common units. All information
is as of April 16, 2001. Information set forth in the table with respect to
beneficial ownership of our common units has been obtained from filings made by
the named beneficial owner with the Securities and Exchange Commission.
Beneficial ownership for the purposes of the table is defined by Rule 13d-3
under the Securities Exchange Act. Under that rule, a person is considered to
be the
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beneficial owner of a security if he or she has or shares the power to vote or
direct the voting thereof, to dispose or direct the disposition thereof, or to
acquire any of those powers within sixty days.
Title of Class Beneficial Owner Units Beneficially Owned Percentage of Class
-------------- ---------------- ------------------------ -------------------
Common Units Ferrell Companies, Inc. 17,817,600 56.9
Employee Stock
Ownership Trust
The trustee for the Ferrell Companies, Inc. Employee Stock Ownership Trust is
LaSalle Bank, N.A., located at 125 S. LaSalle Street, 17th Floor, Chicago,
Illinois, 60603. The common units beneficially owned by the Ferrell Companies,
Inc. Employee Stock Ownership Trust include 17,803,883 common units owned by
Ferrell Companies, and 13,717 common units owned by Ferrell Propane, Inc., an
indirect wholly-owned subsidiary of Ferrellgas, Inc.
HOW MANY COMMON UNITS DO THE DIRECTORS AND EXECUTIVE OFFICERS OF FERRELLGAS,
INC. OWN?
The following table shows the number of our common units beneficially owned
by the directors and executive officers of Ferrellgas, Inc. and the common units
beneficially owned by those directors and executive officers as a group. All
information is as of April 16, 2001. The individuals listed below provided the
information in the table to us. As of that date, no individual director or
executive officer had beneficial ownership of one percent or more of our
outstanding common units.
Title of Class Beneficial Owner Units Beneficially Owned
Common Units James E. Ferrell, 15,000
Chairman, CEO and President
Patrick J. Chesterman 22,200
Executive Vice President, COO
James M. Hake, 45,400
Senior Vice President
Kevin T. Kelly, 6,700
Senior Vice President, CFO
A. Andrew Levison, 35,300
Director
Michael F. Morrissey, 775
Director
Elizabeth T. Solberg, 8,200
Director
All current directors and 133,575
officers as a group (7
persons)
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The beneficially owned units reflected above include the following number
of common units that each person may acquire within sixty days under the
Ferrellgas, Inc. Unit Option Plan:
. Mr. Chesterman can exercise 3,000 options at $16.80, 7,000 at $19.88 and
12,000 options at $20.19;
. Mr. Hake can exercise 36,000 options at $16.80 and 9,000 options at $20.19;
and
. Mr. Kelly can exercise 6,000 options at $20.19.
DESCRIPTION OF AMENDMENTS TO OUR PARTNERSHIP AGREEMENT
WHAT WERE THE SENIOR UNIT AMENDMENTS?
We created and issued senior units to Williams Natural Gas Liquids, Inc. in
connection with our purchase of Thermogas, LLC in December 1999. We issued
these senior units to Williams Natural Gas Liquids in lieu of cash payment of a
portion of the purchase price for Thermogas. There are currently 4,888,233.89
senior units issued and outstanding. The total liquidation value, based on the
stated senior unit liquidation preference as defined in our partnership
agreement, is approximately $195.5 million plus any accrued and unpaid
distributions.
Each senior unit entitles the holder to quarterly distributions from us
equivalent to ten percent per annum of the liquidation value per senior unit, or
$4.00 per year. Prior to the amendments, our partnership agreement provided for
distributions payable quarterly in-kind through the issuance of additional
senior units until the earlier of February 1, 2002, or the occurrence of a
material event, as defined in our partnership agreement, after which
distributions were payable in cash.
Upon the earlier of those dates, the holder of senior units would have been
able to convert the senior units into common units at a rate equal to 125% of
the senior unit liquidation preference. The senior unit liquidation preference
is $40.00 per outstanding senior unit, plus any accrued and unpaid
distributions. We may redeem all or a portion of the senior units at any time
prior to the date of conversion for cash at the senior unit redemption price.
The senior unit redemption price is currently $40.00 per outstanding senior
unit, plus accrued but unpaid distributions. This redemption price is the same
price at which the senior units were issued to Williams Natural Gas Liquids.
Immediately after the Thermogas transaction, the senior units were transferred
to The Williams Companies, Inc.
Ferrellgas, Inc. proposed amendments to the terms of the senior units and
on April 6, 2001, The Williams Companies executed a written consent to those
amendments in its capacity as the sole owner of the senior units.
Those amendments:
. extended the date of the prohibition of the potential conversion of the
senior units into common units to December 31, 2005;
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. changed the senior unit to common unit conversion ratio from 125% to 100% of
the senior unit liquidation preference, plus accrued but unpaid
distributions;
. allow us to use $20 million of proceeds from sales of our units to reduce
indebtedness after we have used the initial $40 million of those proceeds to
redeem senior units;
. removed provisions that previously would have caused a material event related
to the closing price of our common units and a cross default to some of our
debt instruments;
. removed the monetary penalty for not making a required senior unit
distribution but added failure to make that distribution as a material event;
and
. reduced the period in which we had the option to pay the senior unit
distributions with additional senior units rather than cash from February 1,
2002, to February 1, 2001.
Ferrellgas, Inc. believes that these amendments to the terms of the senior
units eliminate the need to redeem all senior units prior to February 1, 2002,
and will allow us to redeem those units with the proceeds of more orderly
issuances of equity, the timing of which is controlled by us. For our common
units, the changes to the terms of the senior units reduce the potential for
dilution in the near future. These amendments to the terms and provisions of
the senior units are reflected in our Third Amended and Restated Agreement of
Limited Partnership.
WHAT ARE THE AMENDMENTS TO ALLOW FOR THE DEFERRAL OF DISTRIBUTIONS TO THE COMMON
UNITS HELD BY FERRELL COMPANIES?
Ferrell Companies owns approximately 57% of our common units. Ferrellgas,
Inc. proposed amendments to our partnership agreement that would allow for the
deferral of distributions on the common units held by Ferrell Companies in an
aggregate amount up to $36 million. This deferral means that currently in the
event that available cash were insufficient to pay all of our common unitholders
the minimum quarterly distribution during any fiscal quarter, we would pay a
distribution on your publicly held common units first and then pay a
distribution on the Ferrell Companies common units to the extent cash was still
available. If the cumulative amount not paid to Ferrell Companies were to reach
$36 million, the common units held by Ferrell Companies will be paid in the same
manner as the publicly held common units you own, just as they were prior to the
amendment. After payment of all required distributions, we will use remaining
available cash to reduce any amount previously deferred on the units held by
Ferrell Companies.
Our ability to defer the payment of a distribution on the Ferrell Companies
common units will end on the earlier of:
. December 31, 2005;
. a change of control as defined in our partnership agreement;
. our dissolution; or
. when Ferrell Companies no longer owns any common units.
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After the end of the period described above, distributions will be made to
holders of all common units equally, including those owned by Ferrell Companies
in the same manner as we made distributions prior to the amendments. The
amendments also provide that Ferrellgas, Inc. may not change this period in a
manner adverse to holders of our common units without the consent of a majority
of the holders of our common units, not including those common units held by
Ferrell Companies.
The common units owned by Ferrell Companies will not be affected by the
amendments other than with respect to distributions. Those units will continue
to vote together with the publicly held common units in the same manner as they
are able to vote currently. Each common unit currently is allowed one vote on
each matter for which it may be entitled to vote under our partnership
agreement.
These amendments that created the deferral of distributions on the common
units held by Ferrell Companies in an aggregate amount up to $36 million
required the consent of a majority of our common unitholders. In addition, our
partnership agreement allows a consent to be executed by our common unitholders
in lieu of an actual meeting if the consent is executed by the holders of a
number of common units that otherwise would be able to approve that action at a
meeting. Because Ferrell Companies owns at least a majority of our common
units, the execution of a consent to these amendments by Ferrell Companies on
April 16, 2001, means that the amendments have been approved in accordance with
our partnership agreement without the requirement to hold a meeting of our
common unitholders. Our partnership agreement and the Securities and Exchange
Commission rules require notifications of the consent executed by Ferrell
Companies. Under the Securities and Exchange Commission rules, the amendments
approved by Ferrell Companies will not be effective until twenty days after
mailing this information statement to our common unitholders.
WHAT ARE THE EFFECTS OF THE AMENDMENTS ON OUR COMMON UNITHOLDERS?
Because the amendments that provide for the deferral of distributions on
the common units held by Ferrell Companies apply solely to distributions to be
made to the units held by Ferrell Companies, there is no negative effect on you
or your common units. However, we will not be able to increase the amount of
the quarterly distributions on our common units if any amount is outstanding
that was not paid to Ferrell Companies as a result of the distribution deferral
provisions in our partnership agreement. The distributions you would have
otherwise received on your common units are now better protected due to the
possible deferral of the distributions to Ferrell Companies. Subject to the
amount of our available cash, you will continue to receive distributions in the
same manner as you do currently. We believe that there are no federal income
tax consequences to you as a result of these amendments.
Ferrellgas, Inc. believes that these amendments providing for the deferral
of distributions on the common units held by Ferrell Companies will allow for
better perception in the public markets of our ability to pay distributions on
our public common units. This perception may allow us better access to the
public markets for sales of our securities. However, there can be no assurance
that these amendments will provide this desired result.
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These amendments to effect the deferral of distributions on the common
units held by Ferrell Companies are generally reflected in Sections 5.4(a), (b)
and (c) of our Third Amended and Restated Agreement of Limited Partnership.
DOES ANYONE HAVE ANY SUBSTANTIAL INTEREST IN THE PROPOSED AMENDMENTS?
The Williams Companies approved the amendments to our partnership agreement
related to the terms of the senior units and Williams sold all of those senior
units to an entity owned by James E. Ferrell, Chairman and Chief Executive
Officer of Ferrellgas, Inc. That entity is now the holder of all senior units,
and therefore Mr. Ferrell has an interest in the terms of the senior units and
the timing of our redemption of those senior units. The senior units as owned
by that entity have all the same rights as when they were owned by Williams.
Please see "Unit Ownership" above that sets forth the number of common units Mr.
Ferrell owns.
As a member of Ferrellgas, Inc.'s board of directors and the board of
directors of Ferrell Companies, Mr. Ferrell did not vote on the approval of the
amendments. All of the other members of those respective boards of directors
were independent and had no financial interest in the amendments and voted
unanimously in favor of the amendments.
WHERE CAN I OBTAIN A COPY OF THE PARTNERSHIP AGREEMENT?
You can obtain a copy of our partnership agreement by contacting the
Secretary of Ferrellgas, Inc. at:
Ferrellgas, Inc.
One Liberty Plaza
Liberty, MO 64068
In addition, you can obtain a copy of our partnership agreement in the same
manner described in the question "How can I obtain more information about
Ferrellgas Partners?" on page 5.
OTHER BUSINESS
No further business will be transacted by written consent in lieu of a
meeting of limited partners regarding matters to which this information
statement pertains.
COSTS OF INFORMATION STATEMENT
This information statement has been prepared on our behalf and we will bear
the costs of distributing this information statement to our limited partners,
including the expense of preparing, assembling, printing and mailing the
information statement and attached materials. Although there is no formal
agreement to do so, we may reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expenses in forwarding
this information statement and related materials to limited partners. We may
pay for and use the services of other individuals or companies not regularly
employed by us in connection with the distribution of this information statement
if Ferrellgas, Inc. determines that it is advisable to do so.
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FORWARD-LOOKING STATEMENTS
Some information in this information statement may contain forward-looking
statements. Those statements use forward-looking words such as "anticipate,"
"continue," "estimate," "expect," "may," "will," "believes" or similar words.
Those statements discuss future expectations or contain projections. Specific
factors that could cause our actual results to differ from those in the forward-
looking statements include:
. the effect of weather conditions on demand for propane;
. price and availability of propane supplies;
. price and inventory risk of propane supplies;
. the effect of increasing volatility in commodity prices on the Partnerships
liquidity;
. the timing and collection of accounts receivable;
. availability of capacity to transport propane to market areas;
. competition from other energy sources and within the propane industry;
. operating risks incidental to transporting, storing and distributing propane;
. changes in interest rates;
. governmental legislation and regulations;
. energy efficiency and technology trends;
. the condition of the capital markets in the United States;
. the political and economic stability of the oil producing nations of the
world;
. the expected savings from the integration of the Thermogas acquisition,
reductions made in personnel and assets related to the existing Ferrellgas,
L.P. locations and savings related to the routing and scheduling
improvements, all discussed in "Business - Recent Initiatives" section of the
Partnership's annual report filed on Form 10-K for the year ended July 31,
2000;
. the effect the amendments described in this information statement have on the
perception of the market and our ability to access the public market for the
sale of our securities; and
. the expectation that the senior units will be redeemed in the future with
proceeds from an offering of equity at a price satisfactory to us.
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