Ferrellgas Partners, L.P. (NYSE:FGP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Executive Officers
On November 21, 2018, each of Doran N. Schwartz, Senior Vice President, Chief Financial Officer and Treasurer, and Trenton D. Hampton, Senior Vice President and Chief Operating Officer, agreed to voluntarily terminate his employment with Ferrellgas, Inc., the general partner (the “General Partner”) of Ferrellgas Partners, L.P. (“Ferrellgas Partners”) and Ferrellgas, L.P. (collectively, “Ferrellgas”).Effective as of that date, each of Mr. Schwartz and Mr. Hampton ceased to serve in all capacities previously held by them with the General Partner, Ferrellgas and its subsidiaries, including Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp.Mr. Schwartz and Mr. Hampton’s voluntary terminations were not a result of any disagreement with the Ferrellgas’ independent auditors or any member of management on any matter of accounting principles or practices, financial statement disclosure or internal controls.
In connection with these voluntary terminations, Mr. Schwartz, Mr. Hampton and the General Partner agreed to certain separation terms that will be reflected in definitive separation agreements to be prepared and entered into by each of Mr. Schwartz and Mr. Hampton with the General Partner, which definitive separation agreements also will contain other terms customary for agreements of that type.The agreed separation terms include:
payment by the General Partner of $690,000 to each of Mr. Schwartz and Mr. Hampton in full and complete satisfaction of any and all obligations owed to them;
release by the General Partner of Mr. Schwartz and Mr. Hampton from their agreements not to compete with Ferrellgas, but not from their agreements not to solicit Ferrellgas employees; and
mutual releases from any and all existing or potential claims.
Appointment of Interim Executive Officers
On November 26, 2018, the Board of Directors of the General Partner appointed Bryan Wright as Interim Chief Operating Officer of the General Partner and Bill Ruisinger as Interim Chief Financial Officer of the General Partner.
Mr. Wright, age 47, has been with Ferrellgas for 19 years and currently serves as a Region Vice President.Prior to serving in that position, Mr. Wright held various positions within the operations of Ferrellgas.
Mr. Ruisinger, age 44, has been with Ferrellgas for six years and currently serves as the General Partner’s Vice President, Treasury, Investor Relations and Planning.Prior to serving in that position, Mr. Ruisinger held various positions serving the office of the Chief Financial Officer.
Neither Mr. Wright nor Mr. Ruisinger has any family relationship with any other executive officer or director of the General Partner, nor are there any arrangements or understandings between Mr. Wright or Mr. Ruisinger and any other person to which he was selected as an officer of the General Partner.
Item 8.01Other Events.
On November 26, 2018, the Board of Directors of the General Partner determined that Ferrellgas Partners will suspend quarterly cash distributions to holders of its common units for the quarter ended October 31, 2018 and indefinitely thereafter.
In past quarterly and annual filings with the Securities and Exchange Commission, Ferrellgas Partners has included disclosures and risk factors related to its unitholder distributions.The indenture (the “Indenture”) governing Ferrellgas Partners’ senior unsecured notes due 2020 contains a restricted payments covenant that limits its ability to make unitholder distributions.Under this covenant, if Ferrellgas Partners’ consolidated fixed charge coverage ratio (“FCCR”) is equal to or less than 1.75:1.00, the aggregate amount of unitholder distributions and other restricted payments Ferrellgas Partners is permitted to make is limited to $50.0 million over a trailing 16 quarter period.As previously disclosed, the FCCR was 1.47:1.00 as of July 31, 2018.After giving effect to the unitholder distribution for the fourth fiscal quarter 2018, announced on August 24, 2018, Ferrellgas Partners had no remaining availability under the $50.0 million basket under the Indenture.Ferrellgas Partners is actively exploring all available options with respect to future unitholder distributions, but in the event that it is unable to find a solution addressing the restricted payments covenant in the Indenture, Ferrellgas Partner will not be able to make common unitholder distributions until its FCCR is greater than 1.75:1.00.
Top of the Form
About Ferrellgas Partners, L.P. (NYSE:FGP)
Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company’s segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company’s two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.