Exhibit 99.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the or this "Agreement") is made and entered
into on the 8th day of February, 2004, by and among FERRELLGAS, INC. ("FGI"),
a corporation organized and existing under the laws of the State of Delaware;
FERRELL COMPANIES, INC. ("FCI"), a corporation organized and existing under the
laws of the state of Kansas, (FGI and FCI are each referred to in this Agreement
individually as the "Company" or collectively as the "Companies," as the context
so requires), and BILLY D. PRIM (the "Executive"), an individual residing at
Winston-Salem, North Carolina.
R E C I T A L S:
FGI is a wholly-owned subsidiary of FCI. FGI serves as the general partner
of Ferrellgas Partners, L.P., a Delaware limited partnership ("Ferrellgas
Partners"), and Ferrellgas, L.P., a Delaware limited partnership ("Ferrellgas").
Ferrellgas Partners and Ferrellgas are referred to in this Agreement
collectively as the "Partnerships." The Partnerships are engaged primarily in
the sale, distribution and marketing of propane gas and related products. The
Companies, through the Partnerships, conduct such business throughout the United
States.
The Companies, through the Partnerships, have expended a great deal of
time, money, and effort to develop and maintain proprietary Confidential
Information which, if misused or disclosed, could be harmful to the Business.
The success of the Companies depends to a substantial extent upon the protection
of the Confidential Information and customer goodwill by all of their employees
and the employees of the Partnerships.
The Executive has heretofore been employed as the President and Chief
Executive Officer of Blue Rhino Corporation ("BRC"). The Board of Directors of
BRC, FCI Trading Corp. ("Parent"), a Delaware corporation and an affiliate of
the Companies, and Ferrell Companies, Inc. (the "Ultimate Parent"), a Kansas
corporation and an affiliate of the Companies, have deemed it advisable and in
the best interest of their respective equity holders to consummate a business
combination in which Diesel Acquisition LLC, a Delaware limited liability
company ("Merger Sub") and an affiliate of the Companies, will merge with and
into BRC and BRC, being the surviving entity in the Merger (the "Merger"), will
thereby become a direct wholly-owned subsidiary of Parent. The Companies and the
Executive have agreed to enter into this Agreement to provide for the employment
of the Executive following the Merger.
The Executive desires to be eligible for other opportunities within the
Companies and/or compensation increases which otherwise would not be available
to the Executive and to be given access to Confidential Information of the
Companies and the Partnerships which is necessary for the Executive to perform
his duties, but which the Companies would not make available to the Executive
but for the Executive's signing and agreeing to abide by the terms of this
Agreement as a condition of the Executive's employment with the Companies.
The Executive recognizes and acknowledges that the Executive's position
with the Companies will provide the Executive with access to Confidential
Information of the Companies and the Partnerships.
The Companies compensate their employees to, among other things, develop
and preserve goodwill with their customers on each respective Company's behalf
and business information for each respective Company's ownership and use.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
herein and the compensation the Companies agree herein to pay the Executive, and
of other good and valuable consideration, the receipt of which is hereby
acknowledged, the Companies and the Executive agree as follows:
ARTICLE 1
DEFINITIONS
Wherever used in this Agreement, including the Recitals and this ARTICLE 1,
the following terms shall have the meanings set forth below (unless otherwise
indicated by the context):
1.1 "Base Salary" means the base annual salary payable to the Executive as
provided in Section 5.1. The initial Base Salary shall be $600,000.
1.2 "Board" means the Board of Directors of FGI.
1.3 "Business" means any business, service or product engaged in, provided
or produced by the Companies, including, but not limited to, the retail sale and
wholesale of propane, the propane cylinder exchange business, the manufacturing
or sale of any product lines from the Blue Rhino division of Ferrellgas (the
"Blue Rhino Division"), including, mosquito extermination devices, propane
powered heat lamps, and gas grills, and any other business in which the Blue
Rhino Division engages.
1.4 "Change of Control" means the earliest of the following dates:
(a) The date any person shall have become the beneficial owner of
fifty-one percent (51%) or more of the outstanding common stock of the
Company.
(b) The date the shareholders of the Company approve a definitive
agreement (A) to merge or consolidate the Company with or into another
corporation, in which the Company is not the continuing or surviving
corporation or pursuant to which any shares of common stock of the Company
would be converted into cash, securities or other property of another
corporation, other than a merger of the Company in which holders of common
stock of the Company immediately prior to the merger will beneficially own
at least seventy percent (70%) of the voting securities of the surviving
corporation immediately after the merger, or (B) to sell or otherwise
dispose of substantially all of the assets of the Company, or (C) a plan of
complete liquidation or winding up of the Company; or
(c) The date there shall have been a change in a majority of the Board
of Directors of the Company within a twelve-month period unless the
nomination for election by the Company's shareholders of each new director
was approved by the vote of two-thirds of the directors then still in
office who were in office at the beginning of the twelve-month period.
2
(For purposes of this Section 1.4, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such term is
defined in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended, other than the Company, a subsidiary of the Company or any
employee benefit plan(s) sponsored or maintained by the Company or any
subsidiary thereof, and the term "beneficial owner" shall have the meaning given
the term in Rule 13d-3 under the Exchange Act.)
In no event shall the Merger constitute a Change of Control for purposes of this
Agreement.
1.5 "Companies" means collectively Ferrellgas, Inc. ("FGI"), a Delaware
corporation, and Ferrell Companies, Inc. ("FCI"), a Kansas corporation.
"Company" means each of FGI and FCI individually.
1.6 "Compensation Continuance Period" means the one-year period commencing
on the first day of the calendar month next following the calendar month in
which the Termination Date occurs.
1.7 "Compensation Continuance Termination Event" means the termination of
the Executive's employment by the Company without cause (Section 4.6), by the
Executive for Good Reason (Section 4.4) or by the expiration of the Term.
1.8 "Confidential Information" means all information, observations and data
(whether in human or machine readable form) obtained by the Executive while
employed by the Companies concerning the business or affairs of the Companies, a
Partnership, or any other affiliate, including any information pertaining to the
Business which is not generally known in the propane industry, including, but
not limited to, trade secrets, internal processes, designs, design information,
products, inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports, and all similar or related information which
related or relates to the Companies' actual or anticipated business, research
and development or existing or future products or services and which are
conceived, developed or made by the Executive, whether prior to or during the
Term, data, research and development plans and activities, equipment
modifications, techniques, software and computer programs and derivative works,
business and marketing plans, projections, sales data and reports, confidential
evaluations, compilations and/or analyses of technical or business information,
profit margins, customer requirements, costs, profitability, sales and marketing
strategies, pricing policies, strategic plans, training materials, internal
financial information, operating and financial data and projections, names and
addresses of customers, inventory lists, sources of supplies, supply lists,
employee lists, mailing lists, and information concerning relationships between
any Company or Partnership and their employees or customers which gives or may
give the Companies or the Partnerships an advantage over competitors, and all
other information owned by the Companies which is not public information.
1.9 "Customers" means and includes any and all Persons who are customers,
patrons or distribution partners of the Companies or the Partnerships with
respect to the Business.
3
1.10 "For Cause" means one or more of the following: (i) the conviction of
Executive by a court of competent jurisdiction of, or entry of a plea of nolo
contendere with respect to, a felony or any other crime, which other crime
involves fraud, dishonesty or moral turpitude; (ii) fraud or embezzlement on the
part of the Executive from the Company; (iii) the material breach by the
Executive of any of Article 11 hereof; (iv) any act of moral turpitude or
willful misconduct by the Executive which has an adverse impact on the Business
or reputation of the Companies; (v) a violation of a material term of this
Agreement; (vi) a material violation of any statutory fiduciary duty or common
law fiduciary duty of the Executive to the Companies with respect to his
obligations to the Companies; (vii) failure by the Executive to meet the
reasonable expectations of the Chief Executive Officer of the Companies in
fulfilling his duties, after written notice and sixty (60) days to cure such
failure.
1.11 "Good Reason" means any of the following:
(a) The Executive's resignation from the employment of the Companies
on account of the failure by the Board to reelect or reappoint the
Executive to a responsible executive position in the Companies or any of
its affiliates and the Executive then elects to leave the Companies'
employment within three (3) months of such failure to so reelect or
reappoint the Executive;
(b) The Executive's resignation from the employment of the Companies
on account of a material modification by the Board of the duties, functions
and responsibilities of the Executive as Executive Vice President of FGI
without his consent within three (3) months of such modification; provided
further, that in the event of a Change of Control, the change in the
Executive's title and/or a change in the level of management to which the
Executive reports, shall not, in and of itself, be deemed to constitute a
material modification of the Executive's duties and responsibilities; or
(c) The Executive's resignation from the employment of the Companies
on account of any material breach of a provision of this Agreement by the
Companies, which breach is not cured within sixty (60) days after notice
has been given to the Companies by the Executive. Without limiting the
generality of the foregoing sentence, the Companies shall be in material
breach of its obligations hereunder if, for example, the Executive shall at
any time be required to report to anyone other than directly to the Chief
Executive Officer of FGI, except as provided for in subsection (b), or the
Companies cause the Executive to relocate his residence from Winston-Salem,
North Carolina or makes it impractical for him to continue to reside there
or causes him to reside away from there for extended periods of time, or
the Companies shall fail to make a payment when due to the Executive.
1.12 "Person" means any individual, partnership, joint venture,
corporation, company, firm, group or other entity.
1.13 "Products" means propane gas cylinders and any other products of the
Companies and the Blue Rhino Division, including mosquito extermination devices,
propane powered heat lamps, and gas grills.
1.14 "Term" means the term of the Executive's employment under this
Agreement as provided in Section 4.1.
4
1.15 "Termination Date" means the date the Term expires pursuant to the
provisions of ARTICLE 4.
1.16 "Time Period" means the Term and the thirty-six-month period next
following the expiration of the Term.
1.17 "Total Disability" means and occurs as of the date the Board has
determined that the Executive is unable to perform the essential functions of
his duties, even with reasonable accommodation, due to a mental or physical
illness or incapacity for a period of more than (i) twelve (12) consecutive
weeks or (ii) 75% of the business days in any 120-day period.
1.18 "Trade Area" means the United States of America or any other country
in which the Companies conduct or have made any material investment in plans to
conduct the Business on the date of the Executive's termination.
ARTICLE 2
EMPLOYMENT OF EXECUTIVE
Subject to the terms and conditions set forth in this Agreement and
conditional upon the consummation of the Merger, the Companies hereby employ the
Executive and the Executive hereby accepts such employment for the period stated
in ARTICLE 4 of this Agreement.
ARTICLE 3
POSITION, RESPONSIBILITIES AND DUTIES
3.1 Position and Responsibilities. During the Term (as defined in Sections
1.15 and 4.1), the Executive shall serve as Executive Vice President of FGI and
as the Chief Executive Officer of the Blue Rhino Division of Ferrellgas on the
conditions herein provided. The Executive shall supervise and control, and be
responsible for the general management of the Blue Rhino Division, and shall
provide such other executive services in the general management and operation of
the Company's Business not inconsistent with his position and the provisions of
Section 3.2 as shall be assigned to him from time to time by the Board.
3.2 Duties. In addition to having the responsibilities described in Section
3.1, during the Term, the Executive shall also perform the duties and
responsibilities customarily incident to the position of Executive Vice
President of FGI and as are consistent with each Company's Bylaws, as now
existing or hereafter amended, and the directives of the Chief Executive Officer
of FGI. The Executive shall report directly to the Chief Executive Officer of
FGI. The Chief Executive Officer of FGI shall, as soon as practicable, nominate
the Executive to serve on the Board, recommend to the members of the Board the
election of the Executive to the Board and use his best efforts to have the
Executive elected to the Board. The duties and responsibilities of the Executive
shall include, but not be limited to, the following:
5
(i) serving as the Chief Executive Officer of the Blue Rhino Division;
(ii) providing strategic direction for growth and profitability of the Blue
Rhino Division;
(iii) providing leadership for the integration of the Blue Rhino Division
into Ferrellgas;
(iv) materially participating on the Executive Committee of Ferrellgas, to
include periodic trips to Kansas City;
(v) materially participating in company wide meetings; and
(vi) such other senior management activities as may be reasonably required
by the Board.
During the Term and except for illness, reasonable vacation periods, and
reasonable leaves of absence, the Executive shall devote his full business time,
attention, skill, energies and efforts to the faithful performance of his duties
hereunder and to the business and affairs of the Companies and any subsidiary or
affiliate of the Companies and shall not during the Term be employed in any
other business activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage; provided, however, that, (i) with the
approval of the Board, the Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in, companies or
organizations, which, in the Board's judgment, will not present any conflict of
interest with the Companies or any of its subsidiaries or affiliates or
divisions, or materially affect the performance of the Executive's duties
pursuant to this Agreement and (ii) the Executive shall not be prevented from
investing his personal assets in any business which does not compete with the
Companies or with any subsidiary or affiliate of the Companies, where the form
or manner of such investment will not require substantial services on the part
of the Executive in the operation of the business in which such investment is
made. Notwithstanding the foregoing, the duties of the Executive (i) shall not
be materially expanded without the Executive's prior approval; and (ii)shall not
require him to relocate his residence from Winston-Salem, North Carolina as a
result of the Companies moving the Executive's office greater than fifty (50)
miles away from the principal office of the Blue Rhino Division as of the date
of this Agreement, and shall not make it impractical for him to continue to
reside at his current residence or cause him to reside away from there for
extended periods of time.
3.3 Location of Blue Rhino Division. The parties agree that the Blue Rhino
Division shall at all times be based in Winston-Salem, North Carolina.
6
ARTICLE 4
TERM
4.1 Term of Employment. The Term shall commence as of the Effective Time of
the Merger (as such term is defined in the Agreement and Plan of Merger among
the Parent, the Merger Sub, the Ultimate Parent and BRC dated as of February 8,
2004), and shall continue until the earliest to occur of the following: (i) the
day immediately preceding the third (3rd) anniversary of the Effective Time of
the Merger (except as otherwise provided in this Section 4.1)(such three year
period shall be referred to as the "Initial Term"); (ii) the date of death of
the Executive; (iii) the specified date of termination under the Notice
Exception (as defined in Section 4.2); (iv) the date of termination under the
Cause Exception (as defined in Section 4.3); (v) the date the Executive
terminates his employment for Good Reason; (vi) the date of termination as a
result of the Executive's Total Disability; or (vii) the date of termination
under the Without Cause provision (as defined in Section 4.6). (Each twelve
month period beginning on the anniversary of the Effective Time of the Merger
and each anniversary thereafter, is sometime referred to herein as an
"Employment Year.") Notwithstanding the provisions of subparagraph (i), the Term
shall be extended automatically, without any further action by the Company or
the Executive, for successive twelve (12) month periods (each an "Extension
Period") following the end of the Initial Term, or any succeeding twelve (12)
month Extension Period (unless terminated as provided in this Section 4.1). If
either party hereto desires for the Term to expire at the end of the Initial
Term, or at the end of any Extension Period, such party shall give notice to the
other party of such desire no later than sixty (60) days prior to the end of the
Initial Term or Extension Period (as applicable). All references to the "Term"
shall include the Initial Term and all Extension Periods. The parties
acknowledge that this Agreement is void if the Merger is not consummated.
4.2 Termination by Giving Notice. If the Executive desires to terminate his
employment prior to the expiration of the Term, he shall give not less than
sixty (60) days written notice of such desire to the Companies specifying the
date of termination (the "Notice Exception").
4.3 Termination for Cause, Automatic Termination. The Companies shall at
all times have the right to discharge the Executive For Cause (the "Cause
Exception"), in accordance with Section 1.10.
4.4 Good Reason. The Executive may terminate his employment at any time for
Good Reason. If the Executive desires to terminate his employment for Good
Reason, he shall give notice to the Company as provided in Section 4.7.
4.5 Death or Total Disability. This Agreement will be immediately
terminated upon the death or Total Disability of the Executive.
4.6 Without Cause. The Companies shall at all times have the right to
terminate this Agreement without cause. In the event of a termination without
cause, the Companies will give not less than sixty (60) days notice of
termination. The Companies reserve the right to relieve the Executive of his
duties any time during the 60-day notice period without affecting his right to
compensation and other benefits during this notice period.
4.7 Notice of Termination. Any termination by the Companies or by the
Executive for Good Reason shall be communicated by Notice of Termination to the
other party hereto. For purposes of Sections 4.3, 4.4 and 4.5 and 4.6, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the effective date of termination.
7
ARTICLE 5
COMPENSATION
For all services rendered by the Executive during the Term, including
without limitation, services as an executive, officer, director (except fees and
reimbursements to which all members of the Board, or a subsidiary or affiliate
of the Companies, are generally entitled) or member of any committee of the
Companies or of any subsidiary, affiliate, or division thereof, the Companies
shall pay the Executive as compensation the following:
5.1 Base Salary. The Executive shall be paid for his services during the
Term the Base Salary, payable in appropriate installments to conform with
regular payroll dates for salaried personnel of the Companies. The Executive's
Base Salary shall be reviewed by the Board each Employment Year and may be
increased each Employment Year at the discretion of the Board.
5.2 Discretionary Bonus. In addition to the Base Salary provided for in
Section 5.1, the Executive shall be entitled to such bonus or bonuses, if any,
as may be awarded to the Executive from time to time by the Chief Executive
Officer of FGI. Any such discretionary bonus shall be payable in cash in the
manner specified by the Chief Executive Officer of FGI at the time any such
bonus is awarded and may not exceed fifty percent (50%) of the Executive's Base
Salary. The Executive must be employed by the Companies on the date that said
bonus is paid by the Companies in order to remain eligible for payments under
this Section 5.2.
5.3 Incentive Bonus. In addition to the Base Salary provided for in Section
5.1, the Executive shall be entitled to receive an incentive bonus based on the
Executive meeting established cash flow targets of the Blue Rhino Division, as
determined at the beginning of each fiscal year of FGI by the Board. In the
event the first Employment Year of the Executive's employment hereunder shall
commence after the start of FGI's fiscal year, the Executive shall be entitled
to receive an incentive bonus based on the Executive meeting established cash
flow targets of the Blue Rhino Division, as determined by the Board for the
remainder of such fiscal year. Any such incentive bonuses shall be payable in
cash as soon as practicable following the close of the fiscal year of FGI and
may not exceed fifty percent (50%) of the Executive's Base Salary. In the event
of a Compensation Continuance Event, the Executive shall be entitled to receive
a pro-rata incentive bonus, to be paid after the final accounting is performed
at the end of the fiscal year of FGI in which the Termination Date occurs.
5.4 Payment for Non-Competition and Non-Solicitation. As separate and
distinct consideration for the obligations imposed on the Executive in Article
11.3 of this Agreement, the Company agrees to make a one-time lump sum payment
of Two Million Five Hundred Thousand Dollars ($2,500,000.00) to the Executive at
the Effective Time of the Merger.
5.5 Incentive Compensation Plan. In addition to the Base Salary provided
for in Section 5.1, the Executive shall be entitled to participate in the
Company's 1998 Incentive Compensation Plan (the "ICP") and receive such awards
as may be granted to the Executive from time to time under the ICP. Any such
awards shall be granted in the manner specified in the ICP. Subject to approval
by the Board, the Executive shall be eligible to receive, in accordance with the
terms of the ICP (subject to adjustment for stock splits and the like) stock
options to purchase 250,000 shares of FCI on a 12-year vesting schedule and at
an exercise price to be determined by the Board.
8
5.6 Other Plans. In addition to the Base Salary, bonuses and awards
provided for in Sections 5.1, 5.2, 5.3, 5.4, and 5.5, the Executive shall be
entitled to participate in any other bonus or incentive plans of the Companies
(whether now in existence or hereinafter established) in which other senior
executives of the Companies are entitled to participate.
ARTICLE 6
REIMBURSEMENT OF EXPENSES, OFFICE AND SECRETARIAL ASSISTANCE
The Companies recognize that the Executive will incur, from time to time,
expenses for the benefit of the Companies and in furtherance of the Companies'
business, including, but not limited to, expenses for entertainment, travel and
other business expenses consistent with the Companies' past practices. During
the Term and any Compensation Continuance Period, the Executive will be
reimbursed for his reasonable expenses incurred for the benefit of the Companies
in accordance with the general policy of the Companies as adopted from time to
time by the Board. To receive such reimbursement, the Executive must present to
the Companies an itemized accounting, in such detail as the Companies may
reasonably request, of such expenditures. In the event of the termination of the
Executive's employment for any reason, the Companies shall reimburse the
Executive (or in the event of death, his personal representative) for expenses
incurred by the Executive on behalf of the Companies prior to the Termination
Date to the extent such expenses have not been previously reimbursed by the
Companies. The Companies further agree to furnish the Executive during the Term
with an office and such secretarial assistance as shall be suitable to the
character of the Executive's position with the Companies and adequate for the
performance of his duties hereunder.
ARTICLE 7
VACATION and SICK LEAVE
The Executive shall be entitled to reasonable periods of vacation and sick
leave during each Employment Year, commensurate with his position and in
accordance with the Companies' established policy for senior executives. The
Executive shall continue to receive the compensation provided for in ARTICLE 5
during the time of his vacation and sick leave.
ARTICLE 8
OTHER EMPLOYEE BENEFITS.
The Executive shall be entitled to participate in any and all retirement,
health, disability, life insurance, long-term disability insurance, nonqualified
deferred compensation and tax-qualified retirement plans or any other plans or
benefits offered by the Company to its senior executives generally, if and to
the extent the Executive is eligible to participate in accordance with the terms
and provisions of any such plan or benefit program. Nothing in this ARTICLE 8 is
intended, or shall be construed, to require the Company to institute or maintain
any particular plan, program or benefit. Benefits payable pursuant to this
Agreement shall be in addition to benefits payable to the Executive under all
other employee benefit plans or programs of the Company.
9
ARTICLE 9
TERMINATION COMPENSATION.
9.1 Monthly Compensation. Upon the expiration of the Term for any reason,
the Executive shall be entitled to continue to receive his Base Salary through
the last day of the month in which the Termination Date occurs, except in the
event the Executive is terminated For Cause, he shall not be entitled to any
further compensation or benefits beyond the Termination Date.
9.2 Compensation Continuance. In addition to the compensation provided for
in Section 9.1, upon the occurrence of a Compensation Continuance Termination
Event, the Executive (or in the event of his subsequent death, his surviving
spouse) shall be entitled to continue to receive his Base Salary (as increased
each year in the manner provided in Section 5.1) during the Compensation
Continuance Period.
ARTICLE 10
SPECIAL PROVISIONS RELATING TO STOCK OPTIONS.
10.1 Vested Blue Rhino Options Granted Prior to Effective Time of Merger.
The Executive shall be entitled to receive from the Company an amount, with
respect to each outstanding option to acquire the common stock of BRC which has
become fully vested as of the Effective Time of the Merger, equal to the
difference between (1) and (2), where (1) is $17.00 multiplied by the number of
shares of BRC common stock subject to the vested option, and (2) is the
aggregate purchase price for the BRC common stock subject to the vested option
as set forth in the award or similar agreement granting such option. Payment of
such amount shall be made to the Executive in cash in a lump sum as soon as
practicable after the Effective Time of the Merger.
10.2 Non-Vested Options Blue Rhino Options Granted Prior to Effective Time
of Merger. If the Executive remains an employee of the Company through the day
immediately preceding the third (3rd) anniversary of the Effective Time of the
Merger, the Executive shall be entitled to receive from the Company an amount,
with respect to each outstanding option to acquire the common stock of BRC which
was not fully vested as of the Effective Time of the Merger, equal to the
difference between (1) and (2) where (1) is $17.00 multiplied by the number of
shares of BRC common stock subject to the non-vested option, and (2) is the
aggregate purchase price for the BRC common stock subject to the non-vested
option as set forth in the award or similar agreement granting such non-vested
option. Payment of such amount shall be made to the Executive in cash in a lump
sum as soon as practicable following the third (3rd) anniversary of the
Effective Time of the Merger. Notwithstanding the foregoing, if, prior to the
third anniversary of the Effective Time of the Merger, the Executive terminates
this Agreement for Good Reason or the Company terminates this Agreement without
cause, the Executive shall be entitled to the payments set forth in this Section
10.2, as soon as practical following the Termination Date.
10
ARTICLE 11
EXECUTIVE'S OBLIGATIONS
All payments and benefits to the Executive under this Agreement shall be
subject to the Executive's compliance with the following provisions during the
Term and, except as otherwise provided in this ARTICLE 11, following the
termination of the Executive's employment:
11.1 Assistance in Litigation. The Executive shall, upon reasonable notice,
furnish such information and assistance to the Company as may reasonably be
required by the Company in connection with any litigation in which it is, or may
become, a party, and which arises out of facts and circumstances known to the
Executive. The Company shall promptly reimburse the Executive for his
out-of-pocket expenses incurred in connection with the fulfillment of his
obligations under this Section.
11.2 Confidential Information. The Executive acknowledges that all
Confidential Information has a commercial value in the Companies' Business and
is the sole property of the Companies. The Executive agrees that he shall not
disclose or reveal, directly or indirectly, to any unauthorized person any
Confidential Information, and the Executive confirms that such information
constitutes the exclusive property of the Companies; provided, however, that the
foregoing shall not prohibit the Executive from disclosing such information to
third parties or governmental agencies in furtherance of the interests of the
Companies or as may be required by law.
11.3 Non-Competition and Non-Solicitation.
(a) The Executive acknowledges that in the course of his employment
with the Companies he will become familiar with Confidential Information
and that his services will be of special, unique and extraordinary value to
the Companies. Therefore, the Executive agrees that, during the Time
Period, the Executive shall not directly or indirectly own, manage,
control, or engage in any business with any Person (including by himself or
in association with any Person, firm, corporate or other business
organization or through any other entity) whose business is substantially
similar to any segment of the Business in which the Companies engage, as
such Business exists or is in process on the date of the termination of the
Executive's employment, within the Trade Area.
(b) During the Time Period, the Executive shall not invest, directly
or indirectly, in any corporation or other entity which is engaged in the
Business.
11
(c) During the Time Period, the Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any
employee of the Companies or any affiliate of the Companies to leave the
employ of the Companies or such affiliate, or in any way interfere with the
relationship between the Companies and any employee thereof, (ii) hire any
person who was an employee of the Companies at any time within the
six-month period prior to the date of termination of the Executive's
employment with the Companies or any affiliate thereof, or (iii) induce or
attempt to induce any Customer, supplier, licensee, licensor, franchisee,
franchisor or other business relation of the Companies or any affiliate to
cease doing business with the Companies or such affiliate, or in any way
interfere with the relationship between any such Customer, supplier,
licensee, licensor, franchisee, franchisor or business relation and the
Companies or any affiliate thereof.
(d) The Companies and the Executive agree that: (i) the covenants set
forth in this Section 11.3 are reasonable in geographical and temporal
scope and in all other respects, (ii) the Companies would not have entered
into this Agreement but for the covenants of the Executive contained
herein, and (iii) the covenants contained herein have been made in order to
induce the Companies to enter into this Agreement.
(e) If, at the time of enforcement of this Section 11.3, a court or
arbiter shall hold that the duration, scope or area restrictions stated
herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area
and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law.
(f) The Executive hereby agrees that he shall at no time either prior
to or following expiration of the Time Period use the name "Ferrellgas,"
"Blue Rhino" or any other name used by the Companies in any business
venture unrelated to FGI engaged in by the Executive without the prior
written consent of FGI.
11.4 Failure to Comply. In the event that the Executive shall fail to
comply with any provision of this ARTICLE 11, and such failure shall continue
for ten (10) days following delivery of notice thereof by the Companies to the
Executive, all rights of the Executive and any person claiming under or through
him to the payments or benefits described in this Agreement shall thereupon
terminate and no person shall be entitled thereafter to receive any payments or
benefits hereunder. In addition to the foregoing, in the event of a breach by
the Executive of the provisions of this ARTICLE 11, the Companies shall have and
may exercise any and all other rights and remedies available to the Companies at
law or otherwise, including but not limited to obtaining an injunction from a
court of competent jurisdiction enjoining and restraining the Executive from
committing such violation, and the Executive hereby consents to the issuance of
such injunction.
11.5 Accounting for Profits. The Executive covenants and agrees that, if
any of the covenants or agreements under this ARTICLE 11 are violated by the
Executive, the Companies shall be entitled to an accounting and repayment of all
profits, compensation, commissions, remuneration or benefits that the Executive,
directly or indirectly, has realized and/or may realize as a result of, growing
out of, or in connection with, any such violation; such remedy shall be in
addition to and not in limitation of any injunctive relief or other rights or
remedies that the Companies are or may be entitled at law, in equity or under
this Agreement.
12
ARTICLE 12
ATTORNEYS' FEES
In the event that the Executive incurs any attorneys' fees in protecting or
enforcing his rights under this Agreement, the Companies shall reimburse the
Executive for such reasonable attorneys' fees and for any other reasonable
expenses related thereto. Such reimbursement shall be made within thirty (30)
days following final resolution of the dispute or occurrence giving rise to such
fees and expenses. In no event shall the Executive be entitled to receive the
benefits provided for in this ARTICLE 11 in the event his employment is
terminated by the Company For Cause.
ARTICLE 13
DECISIONS BY COMPANY.
Any powers granted to the Board hereunder may be exercised by a committee,
appointed by the Board, and such committee, if appointed, shall have general
responsibility for the administration and interpretation of this Agreement.
ARTICLE 14
INDEMNIFICATION.
The Companies shall indemnify the Executive during his employment and
thereafter to the maximum extent permitted by applicable law for any and all
liability of the Executive arising out of, or in connection with, his employment
by the Companies or membership on the Board; provided, that in no event shall
such indemnity of the Executive at any time during the period of his employment
by the Companies be less than the maximum indemnity provided by the Companies at
any time during such period to any other officer or director under an
indemnification insurance policy or the bylaws or charter of the Companies or by
agreement.
ARTICLE 15
SOURCE OF PAYMENTS; NO TRUST
The obligations of the Companies to make payments hereunder shall
constitute a liability of the Companies to the Executive. Such payments shall be
from the general funds of the Companies, and the Companies shall not be required
to establish or maintain any special or separate fund, or otherwise to segregate
assets to assure that such payments shall be made, and neither the Executive nor
his designated beneficiary shall have any interest in any particular asset of
the Companies by reason of their obligations hereunder. Nothing contained in
this Agreement shall create or be construed as creating a trust of any kind or
any other fiduciary relationship between the Companies and the Executive or any
other person. To the extent that any person acquires a right to receive payments
from the Companies hereunder, such right shall be no greater than the right of
an unsecured creditor of the Companies.
13
ARTICLE 16
SEVERABILITY
All agreements and covenants contained herein are severable, and in the
event any of them shall be held to be invalid by any competent court, this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.
ARTICLE 17
ASSIGNMENT PROHIBITED
This Agreement is personal to each of the parties hereto, and none of the
parties may assign nor delegate any of his, its or their rights or obligations
hereunder without first obtaining the written consent of the other parties;
provided, however, that nothing in this ARTICLE 17 shall preclude the executors,
administrators, or other legal representatives of the Executive or his estate
from assigning any rights under this Agreement to the person or persons entitled
thereto.
ARTICLE 18
NO ATTACHMENT
Except as otherwise provided in this Agreement or required by applicable
law, no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge or hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
ARTICLE 19
HEADINGS
The headings of articles, paragraphs and sections herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
ARTICLE 20
GOVERNING LAW
The parties intend that this Agreement and the performance hereunder and
all suits and special proceedings hereunder shall be construed in accordance
with and under and pursuant to the laws of the State of Missouri and that in any
action, special proceeding, or other proceeding that may be brought arising out
of, in connection with, or by reason of this Agreement, the laws of the State of
Missouri shall be applicable and shall govern to the exclusion of the law of any
other forum, without regard to the jurisdiction in which any action or special
proceeding may be instituted.
14
ARTICLE 21
BINDING EFFECT
This Agreement shall be binding upon, and inure to the benefit of, the
Executive and his heirs, executors, administrators and legal representatives and
the Company and its permitted successors and assigns.
ARTICLE 22
MERGER OR CONSOLIDATION
The Companies will not consolidate or merge into or with another
corporation, or transfer all or substantially all of its assets to another
corporation (the "Successor Corporation") unless the Successor Corporation shall
assume this Agreement, and upon such assumption, the Executive and the Successor
Corporation shall become obligated to perform the terms and conditions of this
Agreement.
ARTICLE 23
COUNTERPARTS
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
ARTICLE 24
ENTIRE AGREEMENT
This Agreement expresses the whole and entire agreement between the parties
with reference to the employment of the Executive and, as of the Effective Time
of the Merger, supersedes and replaces any prior employment agreement
understanding or arrangement (whether written or oral) between the Companies,
BRC and the Executive or any of their affiliates, including, without limitation,
the Employment Agreement between BRC and the Executive dated May 7, 1999. All
such agreements, understandings and arrangements are terminated and are of no
force and effect as of the effective date of this Agreement. Each of the parties
hereto has relied on his or its own judgment in entering into this Agreement.
15
ARTICLE 25
NOTICES
All notices, requests and other communications to any party under this
Agreement shall be in writing (including telefacsimile transmission or similar
writing) and shall be given to such party at its address or telefacsimile number
set forth below or such other address or telefacsimile number as such party may
hereafter specify for the purpose by notice to the other party:
(a) If to the Executive:
Billy D. Prim
c/o Blue Rhino Corporation
104 Cambridge Plaza Drive
Winston-Salem, North Carolina 27104
Fax Number: (336) 659-6750
(b) If to FGI, to: Ferrellgas, Inc. One Liberty
Plaza Liberty, Missouri 64068 Attention:
Kenneth A. Heinz
(c) If to FCI, to Ferrell Companies, Inc. One
Liberty Plaza Liberty, Missouri 64068
Attention: Kenneth A. Heinz
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means, when delivered at the address specified in this ARTICLE 25.
ARTICLE 26
MODIFICATION OF AGREEMENT
No waiver or modification of this Agreement or of any covenant, condition,
or limitation herein contained shall be valid unless in writing and duly
executed by the party to be charged therewith. No evidence of any waiver or
modification shall be offered or received in evidence at any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The parties further agree that the provisions of this ARTICLE 26 may not be
waived except as herein set forth.
ARTICLE 27
TAXES
To the extent required by applicable law, the Company shall deduct and
withhold all necessary Social Security taxes and all necessary federal and state
withholding taxes and any other similar sums required by law to be withheld from
any payments made pursuant to the terms of this Agreement.
16
ARTICLE 28
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, and,
subject to the provisions of ARTICLE 11, any payment or benefit to be provided
to the Executive pursuant to this Agreement shall not be reduced by any
compensation or other amount earned or collected by the Executive at any time
before or after the termination of the Executive's employment.
ARTICLE 29
ARBITRATION
(a) Except as set forth in Section 11.3, arbitration shall be the sole and
exclusive remedy for any dispute, claim, or controversy of any kind or nature (a
"Claim") arising out of, related to, or connected with the Executive's
employment relationship with the Companies, the termination of the Executive's
employment relationship with FGI or this Agreement, including any Claim against
any parent, subsidiary, or affiliated entity of the Companies, or any director,
officer, general or limited partner, employee or agent of the Companies or of
any such parent, subsidiary or affiliated entity.
(b) This agreement to arbitrate specifically includes (without limitation)
any dispute between or among the parties to this Agreement relating to or in
respect of this Agreement, its negotiation, execution, performance, subject
matter, or any course of conduct or dealing or actions under or in respect of
this Agreement, all claims under or relating to any federal, state or local law
or regulation prohibiting discrimination, harassment or retaliation based on
race, color, religion, national origin, sex, age, disability or any other
condition or characteristic protected by law; demotion, discipline, termination
or other adverse action in violation of any contract, law or public policy;
entitlement to wages or other economic compensation; and any claim for personal,
emotional, physical, economic or other injury.
(c) This agreement to arbitrate does not apply to any legal action by the
Companies seeking injunctive relief or damages for breach or enforcement of
ARTICLE 11 of the Agreement. This agreement to arbitrate also does not apply to
any claims by the Executive: (i) for workers' compensation benefits; (ii) for
unemployment insurance benefits; (iii) brought pursuant to the Employee
Retirement Income Security Act ("ERISA"); (iv) under a non-ERISA benefit plan
where the plan specifies a separate arbitration procedure; (v) filed with an
administrative agency which are not legally subject to arbitration under this
Agreement; or (vi) which are otherwise expressly prohibited by law from being
subject to arbitration under this Agreement.
17
(d) Any party may demand arbitration by sending notice to the other party
as set forth in this Agreement. Any Claim submitted to arbitration shall be
decided by a single, neutral arbitrator (the "Arbitrator"). The parties to the
arbitration shall mutually select the Arbitrator not later than 45 days after
service of the demand for arbitration. If the parties for any reason do not
mutually select the Arbitrator within the 45 day period, then any party may
apply to any court of competent jurisdiction to appoint a retired judge as the
Arbitrator. The parties agree that arbitration shall be conducted in accordance
with the American Arbitration Association Rules for the Resolution of Employment
Disputes. The Arbitrator shall apply the substantive federal, state, or local
law and statute of limitations governing any Claim submitted to arbitration. The
arbitration shall take place at a mutually agreeable site in Chicago, Illinois,
and shall be conducted within one hundred eighty (180) days of the receipt by a
party of the other party's demand for arbitration. The Arbitrator, in making his
decision, shall be bound to follow the substantive state and federal laws of
jurisprudence as well as the applicable rules of evidence in arriving at a
decision. The decision rendered shall be in writing and delivered to the parties
within thirty (30) days after the conclusion of the arbitration. The award of
the Arbitrator shall be final, and judgment upon the award rendered may be
entered and enforced in any court, state or federal, having jurisdiction. In
ruling on any Claim submitted to arbitration, the Arbitrator shall have the
authority to award only such remedies or forms of relief as are provided for
under the substantive law governing such Claim.
(e) Any fees and costs incurred in the arbitration (e.g., filing fees,
transcript costs and Arbitrator's fees) will be shared equally by the Executive
and the Companies, except that the Arbitrator may reallocate such fees among the
parties if the Arbitrator determines that an equal allocation would impose an
unreasonable financial burden on the Executive. Subject to the provisions of
Article 12, the parties shall be responsible for their own attorneys' fees and
costs, except that the Arbitrator shall have the authority to award attorneys'
fees and costs to the prevailing party in accordance with the applicable law
governing the dispute and the terms of this Agreement.
(f) The Arbitrator, and not any federal or state court, shall have the
exclusive authority to resolve any issue relating to the interpretation,
formation or enforceability of this Agreement, or any issue relating to whether
a Claim is subject to arbitration under this Agreement, except that any party
may bring an action in any court of competent jurisdiction to compel arbitration
in accordance with the terms of this Agreement.
ARTICLE 30
NEUTRAL CONSTRUCTION
Each party acknowledges that in the negotiation and drafting of this
Agreement, they have been represented by and relied upon the advice of counsel
of their choice. The parties affirm that they and their counsel have had a
substantial role in such negotiation and drafting and, therefore, the parties
agree that this Agreement shall be deemed to have been drafted by all the
parties hereto and the rule of construction to the effect that any contract
ambiguities are to be resolved, against the drafting party shall not be employed
in the interpretation of this Agreement or any exhibit hereto.
18
ARTICLE 31
RECITALS
The Recitals to this Agreement are incorporated herein and shall constitute
an integral part of this Agreement.
[The next page is the signature page.]
19
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
FERRELL COMPANIES, INC. EXECUTIVE
By: /s/ Kenneth A. Heinz /s/ Billy D. Prim
---------------------------------- ------------------------------------
Name: Kenneth A. Heinz Billy D. Prim
----------------------------------
Title: Sr Vice President - Corporate
Development
----------------------------------
FERRELLGAS, INC.
By: /s/ Kenneth A. Heinz
----------------------------------
Name: Kenneth A. Heinz
----------------------------------
Title:Sr Vice President - Corporate
Development
----------------------------------
PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY CERTIFYING THAT
HE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS
HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS THE
EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY ANSWERS TO ALL
SUCH QUESTIONS, AND (D) UNDERSTANDS THE EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER
THE AGREEMENT.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION AGREEMENT.
20