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EXHIBIT 3.1.1
AMENDMENT NO. 1
TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
HERITAGE PROPANE PARTNERS, L.P.
This Amendment (this "Amendment") to the Amended and Restated Agreement
of Limited Partnership of Heritage Propane Partners, L.P. (the "Partnership"),
dated as of June 27, 1996 (the "Partnership Agreement") is entered into
effective as of August 9, 2000, by Heritage Holdings, Inc., a Delaware
corporation (the "General Partner"), as the general partner of the Partnership,
on behalf of itself and the Limited Partners of the Partnership. Capitalized
terms used but not defined herein are used as defined in the Partnership
Agreement.
RECITALS
WHEREAS, Section 5.6 of the Partnership Agreement provides
that the General Partner, without the approval of any Limited Partner
except as otherwise provided in the Partnership Agreement, may, for any
Partnership purpose, at any time or from time to time, issue additional
Partnership Securities for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole
discretion; and
WHEREAS, Section 13.1(g) of the Partnership Agreement provides
that the General Partner, without the approval of any Partner (subject
to Section 5.7 of the Partnership Agreement) may amend any provision of
the Partnership Agreement to reflect an amendment that, in the
discretion of the General Partner, is necessary or advisable in
connection with the authorization of issuance of any class or series of
Partnership Securities pursuant to Section 5.6; and
WHEREAS, the General Partner has determined that the creation
of the Class B Subordinated Units and the Class C Units provided for in
this Amendment (collectively, the "New Units") will be in the best
interests of the Partnership and beneficial to the Limited Partners,
including the holders of the Common Units and Subordinated Units; and
WHEREAS, the New Units, upon issuance, will have rights to
distributions or in liquidation ranking on a parity with, or
subordinate to, the Common Units; and
WHEREAS, the issuance of the New Units complies with the
requirements of the Partnership Agreement;
NOW, THEREFORE, the Partnership Agreement is hereby amended to create
two new classes of Partnership Securities as follows:
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AMENDMENT
SECTION 1. ESTABLISHMENT OF TERMS OF CLASS B SUBORDINATED UNITS. There
is hereby created a series of Units to be designated as "Class B Subordinated
Units," consisting of a total of 1,382,514 Class B Subordinated Units and having
the following terms and conditions:
A. Prior to the conversion of the Class B Subordinated Units as
provided in Section 2, Section 4 or Section 5 hereof, unless
amended pursuant to Section 3 hereof:
(i) During the Subordination Period:
(a) all allocations of items of Partnership
income, gain, loss, deduction and credit shall be
made to the Class B Subordinated Units on a basis
that is pro rata with the Subordinated Units, so that
the amount thereof allocated to each Subordinated
Unit will equal the amount thereof allocated to each
Class B Subordinated Unit; and
(b) the Class B Subordinated Units shall
have the right to share in Partnership distributions
on a pro rata basis with the Subordinated Units, so
that the amount of any Partnership distribution to
each Subordinated Unit will equal the amount of such
distribution to each Class B Subordinated Unit; and
(c) the Class B Subordinated Units shall
have rights upon dissolution and liquidation of the
Partnership, including the right to share in any
liquidating distributions, that are pro rata with the
Subordinated Units, so that the amount of any
liquidating distribution to each Subordinated Unit
will equal the amount of such distribution to each
Class B Subordinated Unit;
(ii) After the Subordination Period, for so long as Class
B Subordinated Units remain outstanding:
(a) all items of Partnership income, gain,
loss, deduction and credit shall be made to the Class
B Subordinated Units to the same extent as such items
would be so allocated if such Class B Subordinated
Units were Subordinated Units that were then
outstanding and the Subordination Period had not
ended; and
(b) the Class B Subordinated Units shall
have the right to share in Partnership distributions
and shall have rights upon dissolution and
liquidation of the Partnership, including the right
to share in any liquidating distributions, in each
case to the same extent as if such Class B
Subordinated Units were Subordinated Units that were
then outstanding and the Subordination Period had not
ended.
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B. The Class B Subordinated Units will not have the privilege of
conversion as set forth in Section 5.8 of the Partnership
Agreement (and Section 5.8 shall not apply to the Class B
Subordinated Units); rather, the Class B Subordinated Units
will be converted only pursuant to the provisions of Section
2, Section 4 or Section 5 hereof. A Class B Subordinated Unit
that has converted into a Common Unit shall be subject to the
provisions of Section 6.7(b) of the Partnership Agreement.
C. During the Subordination Period, (i) the Class B Subordinated
Units will have voting rights that are identical to the voting
rights of the Subordinated Units and will vote with the
Subordinated Units as a single class, so that each Class B
Subordinated Unit will be entitled to one vote on each matter
with respect to which such Class B Subordinated Unit is
entitled to be voted; and (ii) each reference in the
Partnership Agreement to a vote of holders of Subordinated
Units shall be deemed to be a reference to the holders of
Subordinated Units and Class B Subordinated Units. After the
Subordination Period (i) the Class B Subordinated Units will
have such voting rights pursuant to the Partnership Agreement
as such Class B Subordinated Units would have if they were
Subordinated Units that were then outstanding and the
Subordination Period had not ended; and (ii) each Class B
Subordinated Unit will be entitled to one vote on each matter
with respect to which such Class B Subordinated Unit is
entitled to be voted.
D. The Class B Subordinated Units will be evidenced by
certificates in such form as the General Partner may approve
and, subject to (i) the restrictions specified in the
Contribution Agreement, dated as of June 15, 2000, as amended,
among the Partnership, U.S. Propane, L.P. and Heritage
Operating, L.P., or the Subscription Agreement, dated as of
June 15, 2000, as amended, among the Partnership and certain
of the stockholders of Heritage Holdings, Inc., as the case
may be, and (ii) the satisfaction of any applicable legal and
regulatory requirements, may be assigned or transferred in a
manner identical to the assignment and transfer of other
Units; and the General Partner will act as registrar and
transfer agent for the Class B Subordinated Units.
E. Notwithstanding any provision to the contrary set forth in the
Partnership Agreement, the General Partner may not cause the
Partnership to purchase Class B Subordinated Units during the
Subordination Period.
F. Except as otherwise provided in this Amendment and unless the
context otherwise requires, the Class B Subordinated Units and
the Subordinated Units shall be considered as a single class
of Units, each Class B Subordinated Unit shall be treated in a
manner that is identical, in all respects, to each
Subordinated Unit, and each reference in the Partnership
Agreement to Subordinated Units shall also be deemed to be a
reference to Class B Subordinated Units; provided, however,
that notwithstanding the conversion of the Subordinated Units
into Common Units as provided in Section 5.8 of the
Partnership Agreement, and after the end of the Subordination
Period and until the Class B Subordinated Units shall have
been converted as provided herein, each Class B Subordinated
Unit shall, except as
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otherwise provided in this Amendment and unless the context
otherwise requires, be treated in all respects as if such
Class B Subordinated Unit were a Subordinated Unit and the end
of the Subordination Period had not occurred and each
reference in the Partnership Agreement to Subordinated Units
shall be deemed to be a reference to the Class B Subordinated
Units.
SECTION 2. VOTE OF HOLDERS OF PARTNERSHIP SECURITIES AFTER ISSUANCE OF
CLASS B SUBORDINATED UNITS. The Partnership shall, as promptly as practicable
following the issuance of any Class B Subordinated Units, take such actions as
may be necessary or appropriate to submit to a vote or consent of its
securityholders the approval of a change in the terms of the Class B
Subordinated Units to provide that each Class B Subordinated Unit is convertible
into one Common Unit (subject to appropriate adjustment in the event of any
split-up, combination or similar event affecting the Common Units), effective
upon approval of the issuance of additional Common Units in accordance with the
following sentence. The vote or consent required for such approval will be the
requisite vote required under the Partnership Agreement and under New York Stock
Exchange rules or staff interpretations for listing of the Common Units that
would be issued upon any such conversion. Upon receipt of the required vote or
consent, the terms of the Class B Subordinated Units will be changed,
automatically and without further action, so that each Class B Subordinated Unit
is converted into one Common Unit (subject to appropriate adjustment in the
event of any split-up, combination or similar event affecting the Common Units).
SECTION 3. AMENDMENT OF TERMS OF CLASS B SUBORDINATED UNITS IN CERTAIN
EVENTS. If the Partnership's securityholders do not approve a change in the
terms of the Class B Subordinated Units to provide that they are convertible as
provided in Section 2 hereof by the requisite vote on or before January 7, 2001,
then, effective as of the next succeeding day, Section 1.A. hereof will be
deleted and replaced in its entirety, automatically and without further action,
with the following:
"A. Prior to the conversion of the Class B Subordinated Units as
provided in Section 4 or Section 5 hereof:
(i) all allocations of items of Partnership income, gain,
loss, deduction and credit shall be allocated to the
Class B Subordinated Units based on 115% of that
which is allocated to the Subordinated Units, so that
the amount thereof allocated to each Class B
Subordinated Unit will be 115% of the amount thereof
allocated to each Subordinated Unit (or, if the
Subordination Period has ended, each Common Unit,
except that the allocations to Class B Subordinated
Units shall have the same order of priority relative
to allocations on the Common Units as if such Class B
Subordinated Units were Subordinated Units that were
then outstanding and the Subordination Period had not
ended); and
(ii) the Class B Subordinated Units shall have the right
to share in Partnership distributions based on 115%
of the amount of any Partnership distribution to each
Subordinated Unit, so that the amount of any
Partnership distribution to each Class B Subordinated
Unit will equal 115% of the
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amount of such distribution to each Subordinated Unit
(or, if the Subordination Period has ended, each
Common Unit, except that the right of holders of
Class B Subordinated Units to receive distributions
shall have the same order of priority relative to
distributions on the Common Units as if such Class B
Subordinated Units were Subordinated Units that were
then outstanding and the Subordination Period had not
ended); and
(iii) the Class B Subordinated Units shall have rights upon
dissolution and liquidation of the Partnership,
including the right to share in any liquidating
distributions, that are based on 115% of the rights
of the Subordinated Units, so that the amount of any
liquidating distribution to each Class B Subordinated
Unit will equal 115% of the amount of such
distribution to each Subordinated Unit (or, if the
Subordination Period has ended, each Common Unit,
except that the rights of the Class B Subordinated
Units upon dissolution and liquidation of the
Partnership shall have the same order of priority
relative to the rights of the Common Units as if such
Class B Subordinated Units were Subordinated Units
that were then outstanding and the Subordination
Period had not ended)."
SECTION 4. VOTE OF HOLDERS OF PARTNERSHIP SECURITIES AFTER END OF
SUBORDINATION PERIOD. If the Partnership's securityholders have not approved a
change in the terms of the Class B Subordinated Units to provide that they are
convertible as provided in Section 2 hereof by the requisite vote on or before
the end of the Subordination Period, then, as promptly as practicable following
the date the Subordination Period ends, the Partnership shall take such actions
as may be necessary or appropriate to submit to a vote or consent of its
securityholders the approval of a change in the terms of the Class B
Subordinated Units to provide that each Class B Subordinated Unit is convertible
into one Common Unit, effective upon approval of the issuance of additional
Common Units in accordance with the following sentence. The vote or consent
required for such approval will be the requisite vote required under the
Partnership Agreement, as then in effect, and under New York Stock Exchange
rules or staff interpretations for listing of the Common Units that would be
issued upon any such conversion. Upon receipt of the required vote or consent,
the terms of the Class B Subordinated Units will be changed, automatically and
without further action, so that each Class B Subordinated Unit is converted into
one Common Unit (subject to appropriate adjustment in the event of any split-up,
combination or similar event affecting the Common Units). Concurrently with the
distribution made in accordance with Section 6.3(a) of the Partnership Agreement
in respect of Available Cash with respect to the Quarter in which the conversion
of the Class B Subordinated Units is effected in accordance with the preceding
sentence, an amount of cash equal to the amount of the distribution calculated
in accordance with Section 3.A(ii) above shall be paid to each holder of record
of the Class B Subordinated Units as of the effective date of such conversion,
with the amount of such distribution to be equal to the product of (a) 15% of
the amount to be distributed in respect of such Quarter to each Subordinated
Unit (or, if the Subordination Period has ended on or prior to the first day of
such Quarter, to each Common Unit) times (b) a fraction, of which (i) the
numerator is the number of days in such Quarter up to but excluding the date of
such conversion, and (ii) the denominator is the total number of days in such
Quarter (the foregoing amount being referred to as an "Excess Payment"). For the
taxable year in which an Excess Payment is made, each holder of a Class B
Subordinated Unit shall be allocated items of gross
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income with respect to such taxable year in an amount equal to the Excess
Payment distributed to it.
SECTION 5. CHANGE OF NEW YORK STOCK EXCHANGE RULES OR INTERPRETATIONS.
If at any time (i) the rules of the New York Stock Exchange or the New York
Stock Exchange staff interpretations of such rules are changed, or (ii) facts
and circumstances arise so that no vote or consent of securityholders of the
Partnership is required as a condition to the listing of the Common Units that
would be issued upon any conversion of any Class B Subordinated Units into
Common Units as provided in Section 2 or Section 4, the terms of such Class B
Subordinated Units will be changed so that each such Class B Subordinated Unit
is converted (without further action or any vote of any securityholders of the
Partnership) into one Common Unit (subject to appropriate adjustment in the
event of any split-up, combination or similar event affecting the Common Units).
If such conversion is effected after Section 3 has become effective with respect
to the Class B Subordinated Units, the terms of the final sentence of Section 4
shall also apply with respect to the Quarter in which the conversion of any
Class B Subordinated Units is effected in accordance with the preceding
sentence.
SECTION 6. ESTABLISHMENT OF TERMS OF CLASS C UNITS; DISTRIBUTION OF
DISTRIBUTABLE LITIGATION PROCEEDS. There is hereby created a series of Units to
be designated as "Class C Units," consisting of a total of 1,000,000 Class C
Units. The Class C Units will be issued to the General Partner in conversion of
that portion of its Incentive Distribution Rights that is entitled to receive
any distribution made by the Partnership attributable to the net amount received
by the Partnership in connection with the settlement, judgment, award or other
final nonappealable resolution (the "Resolution") of that certain litigation
between the Partnership and the Operating Partnership, as plaintiffs, and SCANA
Corporation, as defendant, and filed in the County of Hampton, State of South
Carolina, under cause number 99-CP-25-441 (the "Litigation"). The Class C Units
will have a zero initial Capital Account balance. The following other terms and
conditions will apply to the Litigation and the Class C Units:
A. Decisions Regarding the Litigation. All decisions of the
General Partner relating to the Litigation, including the
strategy utilized in seeking a Resolution, shall be determined
by a special committee of the board of directors of the
General Partner consisting of one or more directors, a
majority of whom are independent (as defined in the rules of
the New York Stock Exchange) (the "Litigation Committee").
B. Determination of Distributable Litigation Proceeds after
Resolution of the Litigation. As soon as reasonably
practicable after the time, if any, that the Partnership
receives a payment in cash (or the final payment if more than
one such payment is received or expected to be received) as a
result of a Resolution of the Litigation, the General Partner,
acting by and through the Litigation Committee, shall
determine the aggregate net amount of such proceeds
distributable by the Partnership (the "Distributable
Litigation Proceeds") by deducting from the amount or amounts
received by the Partnership all costs and expenses, including
attorneys' fees, previously incurred by the Partnership, the
Operating Partnership and/or the General Partner in connection
with the Litigation
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and such cash reserves as are necessary or appropriate to
provide for Operating Expenditures, all as determined by the
Litigation Committee in its sole discretion.
C. Distribution of Distributable Litigation Proceeds. After such
time as the aggregate Distributable Litigation Proceeds have
been determined, the Litigation Committee shall determine the
time at which such Distributable Litigation Proceeds shall be
distributed to the Partners and the amount of any partial
distributions if the Litigation Committee elects to distribute
any of the Distributable Litigation Proceeds. Until such time
as the Litigation Committee has determined to make a
distribution of Distributable Litigation Proceeds, none of the
Distributable Litigation Proceeds shall be deemed to be
Available Cash. At such time as the Litigation Committee has
determined to make a distribution of any Distributable
Litigation Proceeds, the amount of such distribution shall be
deemed to be Available Cash on such date and shall be
distributed to the Partners as provided in Section 6.4(a) or
Section 6.4(b), as the case may be, after all other
distributions of Available Cash to be made on such date shall
have been made, provided, however, that any such amount
otherwise distributable to the holders of Incentive
Distribution Rights as provided in Section 6.4(a)(v), (vi) or
(vii), Section 6.4(b)(iii), (iv) or (v) or Section 12.4, as
the case may be, shall instead be distributed to the holders
of Class C Units, Pro Rata.
D. Allocation of Income and Loss. Each holder of Class C Units
receiving a distribution of cash as provided above in any
taxable year of the Partnership shall be allocated items of
gross income with respect to such taxable year in an amount
equal to the cash so distributed to such holder. The Class C
Units will not be allocated any other items of income, gain,
loss, deduction or credit.
E. Rights Upon Liquidation. The Class C Units will have no rights
to share in any Partnership assets or distributions upon
dissolution and liquidation of the Partnership, except to the
extent that any such distributions constitute Distributable
Litigation Proceeds.
F. No Conversion. The Class C Units will not have the privilege
of conversion into any other Unit.
G. No Voting Rights. The Class C Units will not have any voting
rights except to the extent that the Delaware Act gives the
Class C Units a vote as a class on any matter. If any vote of
the Class C Units is required with respect to any matter, each
Class C Unit will be entitled to one vote on such matter.
SECTION 7. RATIFICATION OF PARTNERSHIP AGREEMENT. Except as expressly
modified and amended herein, all of the terms and conditions of the Partnership
Agreement shall remain in full force and effect.
SECTION 8. GOVERNING LAW. This Amendment will be governed by and
construed in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
HERITAGE HOLDINGS, INC.
By:
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Name:
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Title:
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LIMITED PARTNERS:
All Limited Partners now and hereafter
admitted as limited partners of the
Partnership, pursuant to Powers of
Attorney now and hereafter executed in
favor of, and granted and delivered
to, the General Partner.
By: Heritage Holdings, Inc.,
General Partner,
as attorney-in-fact for all
Limited Partners pursuant to the
Powers of Attorney granted
pursuant to Section 2.6 of the
Partnership Agreement.
By:
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Name:
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Title:
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