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                                                                   EXHIBIT 10.19

                               UGI UTILITIES, INC.
                                 SEVERANCE PLAN
                             FOR EXEMPT EMPLOYEES IN
                             SALARY GRADES 34-37 AND
                               SALARY GRADES 18-23

                            EFFECTIVE JANUARY 1, 1999

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                                TABLE OF CONTENTS

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ARTICLE         SUBJECT MATTER                                                                         PAGE
-------         --------------                                                                         ----
<S>             <C>                                                                                    <C>
ARTICLE I       INTRODUCTION.......................................................................      1
                1.1    Background..................................................................      1
                1.2    Purpose of Plan.............................................................      1
                1.3    Term of Plan................................................................      1

ARTICLE II      DEFINITIONS........................................................................      2
                2.1    "Benefit"...................................................................      2
                2.2    "Compensation"..............................................................      2
                2.3    "Effective Date"............................................................      2
                2.4    "Employee"..................................................................      2
                2.5    "Employer"..................................................................      2
                2.6    "Employment Termination Date"...............................................      2
                2.7    "ERISA".....................................................................      2
                2.8    "For Cause".................................................................      2
                2.9    "Named Fiduciary"...........................................................      2
                2.10   "Paid Notice Period"........................................................      3
                2.11   "Participant"...............................................................      3
                2.12   "Plan"......................................................................      3
                2.13   "Plan Administrator"........................................................      3
                2.14   "Plan Year".................................................................      3
                2.15   "Qualifying Termination"....................................................      3
                2.16   "Subsequent Employer".......................................................      3
                2.17   "Terminated Employee".......................................................      3
                2.18   "Termination Date"..........................................................      3

ARTICLE III     ELIGIBILITY FOR BENEFITS...........................................................      4
                3.1    Benefit Eligibility.........................................................      4
                3.2    Exclusions..................................................................      4
                3.3    Effect of Plan Participation on Claims......................................      4

ARTICLE IV      BENEFIT............................................................................      5
                4.1    Benefit.....................................................................      5
                4.2    Amount of Immediate Cash Benefit............................................      5
                4.3    Other Benefits..............................................................      6
                4.4    Effect on Retirement and Other Benefits Plans
                       or Payments.................................................................      6
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<S>             <C>                                                                                     <C>
ARTICLE V       METHOD AND DURATION OF BENEFIT PAYMENTS............................................      8
                5.1    Method of Payment...........................................................      8
                5.2    Termination of Entitlement to Benefits......................................      8
                5.3    Effect of Reemployment......................................................      9

ARTICLE VI      THE PLAN ADMINISTRATOR.............................................................     10
                6.1    Authority and Duties........................................................     10
                6.2    Records, Reporting and Disclosure...........................................     10
                6.3    Compensation, Expenses and Indemnification of the Plan Administrator........     10
                6.4    Bonding.....................................................................     10

ARTICLE VII     AMENDMENT, SUSPENSION AND TERMINATION..............................................     11
                7.1    Amendment, Suspension and Termination.......................................     11

ARTICLE VIII    DUTIES OF THE EMPLOYER.............................................................     12
                8.1    Records.....................................................................     12
                8.2    Payment.....................................................................     12
                8.3    Appointment of Fiduciaries..................................................     12

ARTICLE IX      CLAIMS PROCEDURES..................................................................     13
                9.1    Application for Benefits....................................................     13
                9.2    Appeals of Denied Claims for Benefits.......................................     13
                9.3    Appointment of the Named Appeals Fiduciary..................................     14

ARTICLE X       MISCELLANEOUS PROVISIONS...........................................................     15
                10.1   Nonalienation of Benefits...................................................     15
                10.2   No Contract of Employment...................................................     15
                10.3   Severability of Provisions..................................................     15
                10.4   Heirs, Assigns and Personal Representatives.................................     15
                10.5   Headings and Captions.......................................................     15
                10.6   Gender and Number...........................................................     15
                10.7   Unfunded Plan...............................................................     15
                10.8   Payments to Incompetent Persons, Etc........................................     15
                10.9   Appendices..................................................................     16
                10.10  Lost Payees.................................................................     16
                10.11  Controlling Law.............................................................     16
</TABLE>

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                                    ARTICLE I
                                  INTRODUCTION

                  1.1      Background. UGI Utilities, Inc. wishes to adopt a
severance pay plan for certain employees in Salary Grades 34 - 37 and 18 - 23,
effective January 1, 1999. This Severance Pay Plan will supersede any and all
prior practices and plans.

                  1.2      Purpose of Plan. The purpose of the UGI Utilities,
Inc. Severance Plan for Salary Grades 34 - 37 and 18 - 23, is to alleviate in
part or in full financial hardships which may be experienced by certain
Employees of the Employer whose employment is terminated involuntarily, other
than for cause, due to (i) the elimination of their position or a reduction in
work force, as determined by the Employer; or (ii) such other circumstances as
the Employer, acting in its role as the employer and not as a fiduciary, may
determine. In essence, benefits under the Plan are intended to be supplemental
unemployment benefits which will assist a designated individual during the
transition period until other employment is found. The benefits provided under
the Plan also are intended to serve as consideration for the Employee's
execution of a general release as required hereunder. The Plan is not intended
to be included in the definitions of "employee pension benefit plan" and
"pension plan" set forth under Section 3(2) of ERISA by reason of being excepted
from such definition as a "severance pay arrangement" within the meaning of
Section 3(2)(B)(i) of ERISA. This Plan is intended to meet the descriptive
requirements of a plan constituting a "severance pay plan" within the meaning of
regulations published by the Secretary of Labor at Title 29, Code of Federal
Regulations, Section 2510.3-2(b). Accordingly, the benefits paid by the Plan are
not deferred compensation and no employee shall have a vested right to such
benefits.

                  1.3      Term of Plan. The Plan will continue until such time
as the Employer, acting in its sole discretion, elects to amend, modify,
supersede or terminate the Plan for any reason and at any time.

                                       1
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                                   ARTICLE II
                                   DEFINITIONS

                  2.1      "Benefit" means the amount that a Participant is
entitled to receive pursuant to Section 4.2.

                  2.2      "Compensation" means an Employee's annual base salary
and applicable target annual bonus amount, if any, in effect on the first day of
the calendar quarter immediately preceding the Employee's Employment Termination
Date.

                  2.3      "Effective Date" means January 1, 1999.

                  2.4      "Employee" means any employee in Salary Grades 34 -
37 and 18 - 23 who is classified by the Employer as a full-time, active
employee; provided, however, that "Employee" does not include any exempt
employee in an executive employment category, as determined by the Employer who
is covered by the UGI Corporation Senior Executive Employee Severance Pay Plan
or any employee whose wages and conditions of employment are the subject of a
collective bargaining agreement between the Employer and a collective bargaining
agent unless the applicable agreement specifically provides for the
participation herein of such employee.

                  2.5      "Employer" means UGI Utilities, Inc. and any
successor thereto which adopts the Plan.

                  2.6      "Employment Termination Date" shall mean the date on
which the current employment relationship between the Participant and the
Employer is terminated.

                  2.7      "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.

                  2.8      "For Cause" means any reason for dismissing an
Employee from employment with the Employer which the Employer, acting in its
role as the employer and not as a fiduciary, determines, in its sole discretion,
would constitute grounds for denying payment of Benefits under the Plan upon the
Employee's dismissal. The term "For Cause" shall include, but shall not be
limited to, dismissal due to breach of trust, unacceptable behavior or
performance, excessive absenteeism or tardiness, unsatisfactory performance, or
insubordination.

                  2.9      "Named Fiduciary" means the Employer, Plan
Administrator, and the Named Appeals Fiduciary within the meaning of Section
9.3. Each Named Fiduciary shall have only those particular fiduciary powers,
duties, responsibilities and obligations as are specifically given it under this
Plan. Any Named Fiduciary, if so appointed, may perform in more than one
fiduciary capacity.

                                       2
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                  2.10     "Paid Notice Period" shall mean the time period,
which may vary depending upon a Participant's grade level at the time of a
Qualifying Termination for which the Employee:

                           (i)      is paid salary continuation under Section
                                    4.2(d) of the Plan; and

                           (ii)     is provided with the continuation of certain
                                    benefits under Section 4.3 of the Plan.

                  2.11     "Participant" means any Terminated Employee who is
entitled to receive a Benefit hereunder.

                  2.12     "Plan" means the UGI Utilities, Inc. Severance Plan
for Exempt Employees in Salary Grades 34 - 37 and 18 - 23 as set forth herein,
and as the same may from time-to-time be amended, modified, superseded or
terminated in the sole discretion of the Employer for any reason and at any
time.

                  2.13     "Plan Administrator" means an individual or a
committee of two or more individuals appointed by the Employer, UGI Utilities,
Inc., to serve as such, or in the absence of such appointment, the Employer,
acting through its officers.

                  2.14     "Plan Year" means the initial period from the
Effective Date through September 30, 1999 and the twelve month period commencing
on each October 1 thereafter and ending on the following September 30.

                  2.15     "Qualifying Termination" means, subject to Section
3.2 which enumerates certain exclusions, an involuntary termination of
employment, for reasons other than For Cause, occurring as a result of (i) the
sale or discontinuance of operations (other than a discontinuance of operations
and a termination of employment which the Employer determines is of a temporary
nature) of the Employer facility in which the Employee has been employed, (ii)
the occurrence of any other special event which gives rise to job eliminations,
or (iii) such other circumstances as the Employer, acting in its role as the
employer and not as a fiduciary, may determine and which the Employer shall
determine, in its sole discretion and solely with respect to such occurrence,
shall create an entitlement to Benefits hereunder.

                  2.16     "Subsequent Employer" means another person or entity
who becomes the Employee's employer and who purchases some or all of the assets
or stock or continues the operation of a former facility of the Employer or one
of its affiliates at which the Employee performed significant functions while an
employee of UGI Utilities, Inc. or one of its affiliates.

                  2.17     "Terminated Employee" means an Employee who has been
designated in accordance with Section 3.1 as one whose employment has been
terminated by reason of a Qualifying Termination.

                  2.18     "Termination Date" means the date of a "Qualifying
Termination".

                                       3
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                                   ARTICLE III
                            ELIGIBILITY FOR BENEFITS

                  3.1      Benefit Eligibility. The Employer shall designate in
its sole discretion to the Plan Administrator those Employees whose employment
has been terminated by reason of a Qualifying Termination.

                  3.2      Exclusions. Notwithstanding the provisions of Section
3.1, an Employee will not be deemed to have had a Qualifying Termination and,
accordingly, will not be eligible for Benefits, if any of the following
circumstances apply:

                           (a)      The Employee has completed less than three
         months of continuous service;

                           (b)      The Employee's termination from employment
         is due to a voluntary termination (with or without notice), retirement,
         death, military service, or a disability entitling him or her to
         benefits under any sick pay or disability income plan or policy
         sponsored by the Employer (including Workers Compensation);

                           (c)      The Employee was hired for a definite term
         or task (e.g., temporary employees);

                           (d)      The Employee receives an offer of employment
         with the Employer or one of its affiliates with a geographic location
         of under 50 miles from the Employee's present work location; or

                           (e)      The Employee (i) is employed by a Subsequent
         Employer after such termination of employment ; or (ii) receives an
         offer (either stated or implicit) of employment with a Subsequent
         Employer in a position the duties of which are substantially comparable
         to the Employee's employment duties immediately prior to such
         termination of employment, without regard to whether the pay or other
         terms and conditions of employment are comparable.

                  3.3      Release/Effect of Plan Participation on Claims.
Eligibility for Benefits under this Plan are expressly contingent on the
Employee signing and not rescinding or contesting the enforceability of a
release containing a waiver of claims in such form as may be prescribed from
time-to-time by the Employer, acting as an employer and not as a fiduciary. The
Employer, in its sole discretion, acting in its role as employer and not as a
fiduciary, may waive application of this provision with regard to the occurrence
of any of the foregoing events or circumstances.

                                       4
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                                   ARTICLE IV
                                     BENEFIT

                  4.1      Benefit. Subject to the provisions of Section 7.1,
the Employer, in its sole discretion, acting in its role as the employer and not
as a fiduciary, shall determine which Terminated Employees shall be awarded a
Benefit hereunder and the amount of any such Benefit. The Employer may take into
account the Terminated Employee's contributions to the business of the Employer,
position within the Employer, length of service, the employment market for the
Terminated Employee's skills or any other factors it determines to be relevant
in deciding which Terminated Employees shall be awarded Benefits and the amount
of such Benefits, and need not apply its determination in a uniform manner to
Terminated Employees similarly situated. Furthermore, the Employer, acting as an
employer and not as a fiduciary, may in its sole discretion deny Benefits to any
Terminated Employee.

                  4.2      Amount of Immediate Cash Benefit. The cash amount to
be paid to a Terminated Employee eligible to receive benefits under Articles III
and IV hereof, shall equal the sum of the following:

                           (a)      An amount of severance pay equal to a
         minimum of five (5) times the Daily Cash Compensation per year of
         continuous service to a maximum of twelve (12) times the Daily Cash
         Compensation per year of continuous service. "Daily Cash Compensation"
         means Compensation divided by 260. The minimum Benefit paid to any
         Terminated Employee shall be an amount equal to a Terminated Employee's
         Compensation for two (2) weeks (10 days) and the maximum Benefit paid
         to any terminated Employee under this formula will be an amount equal
         to a Terminated Employee's Compensation for one (1) year. A "year of
         continuous service" shall be measured from the Terminated Employee's
         most recent employment commencement date to his or her Employment
         Termination Date.

                           (b)      An amount equal to the vacation that the
         Terminated Employee would earn from Employment Termination Date to the
         conclusion of the Terminated Employee's applicable Paid Notice Period;

                           (c)      An amount equal to the Terminated Employee's
         target annual bonus amount, under the applicable annual bonus plan (or
         its successor), if any, for the current Plan Year multiplied by the
         number of months elapsed in the current Plan Year to the Terminated
         Employee's Employment Termination Date and divided by twelve (12);
         provided, however, that if the Employment Termination Date occurs in
         the last two (2) months of the Plan Year, in lieu of the payment
         described above, the amount to be paid pursuant to this clause (c)
         shall be determined and paid after the end of the Plan Year in
         accordance with the terms and conditions of the applicable annual bonus
         plan, if any, as though the Terminated Employee were still an Employee,
         except that the weighting to be applied to the Terminated Employee's
         business/financial performance goals under the

                                       5
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         annual bonus plan will be prorated deemed to be 100%; provided further,
         however, that in the discretion of the Chief Executive Officer, the
         amount payable pursuant to this paragraph (c) may be computed in all
         cases for Employment Termination Dates occurring during the first ten
         (10) months of the fiscal year;

                           (d)      An amount of salary continuation to be paid
         during the Paid Notice Period equal to Compensation divided by twelve
         (12) and multiplied by the number of months of Paid Notice as follows:
         Grades 18 - 23 and exempt directs to a Vice-President of UGI Utilities,
         Inc., one month and Grades 34 - 37, two months: and

                           (e)      An amount equal to all earned and accrued
         vacation through the Employment Termination Date.

                  4.3      Other Benefits. A Terminated Employee shall continue
to be entitled, through the end of the Terminated Employee's applicable Paid
Notice Period as set forth above, to those employee benefits listed below, as in
effect from time-to-time during the applicable Paid Notice Period based upon the
amount of coverage or benefit provided at the Termination Date:

                           (a)      Basic Life Insurance;

                           (b)      Supplemental Life Insurance;

                           (c)      Medical Plan and Dental Assistance Plan; and

                           (d)      For Salary Grades 34 - 37, UGI Corporation
                                    Supplemental Executive Retirement Plan.

                  Contributions for these coverages will be deducted from the
Employee's lump sum payment on an after-tax basis.

                  4.4      Effect on Retirement and Other Benefit Plans or
Payments.

                           (a)      This Plan shall not govern and shall in no
         way affect the Terminated Employee's interest in, or entitlement to
         benefits under any of the Employer's qualified retirement plans, and
         any payments received under any such plan shall not affect a Terminated
         Employee's right to any benefit hereunder.

                           (b)      A Terminated Employee who has been awarded
         Benefits under Sections 4.1 through 4.3 may continue to receive health
         benefits after the Employment Termination Date or any applicable Paid
         Notice Period under the applicable health plan maintained by the
         Employer for such period of time as may be required by applicable
         federal or state law at the same rates that are charged by the Employer
         to its terminated employees who are not participants in this Plan.

                                       6
<PAGE>

                           (c)      There shall not be drawn from the provision
         by the Employer of any Benefits under Section 4.3, any implication of
         continued employment or of continued right to accrual of retirement
         plan benefits under the Company's qualified retirement plans, nor shall
         a Terminated Employee, except as provided in Section 4.2(b), accrue
         vacation days, paid holidays, paid sick days or other similar benefits
         normally associated with employment for any period after the Employment
         Termination Date or any applicable Paid Notice Period.

                           (d)      The Benefits payable under this Plan shall
         be reduced by any and all separation payments or other similar payment
         required to be made by the Employer under federal, state and local laws
         including, but not limited to, the Worker Adjustment and Retraining
         Notification Act.

                                       7
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                                    ARTICLE V
                     METHOD AND DURATION OF BENEFIT PAYMENTS

                  5.1      Method of Payment. Except as provided in Section
4.2(c), the Benefit to which a Terminated Employee is entitled, shall be paid in
a single lump sum, unless the Employer, in its sole discretion, acting in its
role as employer and not as a fiduciary, determines otherwise. Payment shall be
made by personal delivery, by mailing to the last address provided to the
Employer by the Terminated Employee or, at the election of the Terminated
Employee and subject to the consent of the Employer, by depositing in accordance
with any direct deposit instructions received by the Terminated Employee. In
general, payment shall be made as promptly as practicable after (a) the
Terminated Employee's Qualifying Termination; and (b) after the execution by the
Employee of the release satisfying the requirements of Section 3.3; and (c) the
expiration of any and all waiting periods under federal, state and local law
relating to the execution of the release. In no event will interest be credited
on the unpaid balance of any Benefit to which a Terminated Employee may become
entitled. All Benefits are subject to applicable federal, state and local taxes.

                  5.2      Termination of Entitlement to Benefits. A Participant
shall cease to participate in the Plan, and any Benefits to any Terminated
Employee shall cease, upon the occurrence of the earliest of:

                           (a)      the termination of the Plan or the adoption
         of an amendment to the Plan which would result in the cessation of
         Benefit payments hereunder;

                           (b)      completion of the Paid Notice Period as
         defined at Section 2.10;

                           (c)      the death of the Employee; or

                           (d)      the discovery that the Terminated Employee's
         termination from employment with the Employer was For Cause, whether or
         not such discovery occurs before the Employee's Termination Date.

                  In the event that the circumstances described in Section
5.2(d) occur after a Terminated Employee has received Benefits, the Terminated
Employee will forfeit any and all entitlement to Benefits and will be required
to return to the Employer immediately, the full amount of any such Benefit.

                  The Employer, in its sole discretion, acting in its role as
employer and not as a fiduciary, may waive application of this provision with
regard to the occurrence of any of the foregoing events or circumstances.

                                       8
<PAGE>

                  5.3      Effect of Reemployment. In the event a Terminated
Employee who qualifies for Benefits hereunder is rehired as a full-time employee
of the Employer, or hired as a full-time employee of any affiliate of the
Employer, the Employer has the right to cease payment of Benefits and/or require
the repayment of all or a portion of the benefit amount paid as a precondition
to reemployment.

                                       9
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                                   ARTICLE VI
                             THE PLAN ADMINISTRATOR

                  6.1      Authority and Duties. It shall be the duty of the
Plan Administrator, on the basis of information supplied to it by the Employer
to determine the eligibility of each Terminated Employee to participate in the
Plan. The Employer, in its role as the employer and not as a fiduciary, shall
determine the amount of Benefit to which each Participant may be entitled and
the manner and time of payment of the Benefit. The Plan Administrator shall have
the full power and authority to construe, interpret and administer the Plan, to
correct deficiencies therein, and to supply omissions. All decisions, actions
and interpretations of the Plan Administrator shall be final, binding and
conclusive upon the parties, subject only to determinations by the Named Appeals
Fiduciary with respect to denied claims for Benefits. Any decisions, actions or
interpretations to be made under the Plan by the Employer, in its role as an
employer and not as a fiduciary, shall be made in its sole discretion and need
not be uniformly applied to similarly situated individuals and shall also be
final, binding and conclusive upon the parties.

                  6.2      Records, Reporting and Disclosure. The Plan
Administrator shall keep all individual and group records relating to
Participants and former Participants and all other records necessary for the
proper operation of the Plan. The Plan Administrator shall prepare and shall
file as required by law or regulation all reports, forms, documents and other
items required by ERISA, the Internal Revenue Code, and every other relevant
statute, each as amended, and all regulations thereunder, except that the
Employer, as payor of the Benefits, shall prepare and distribute to the proper
recipients all forms relating to withholding of income or wage taxes, Social
Security taxes, and other amounts which may be similarly reportable.

                  6.3      Compensation, Expenses and Indemnification of the
Plan Administrator. Individuals serving (either alone or as a committee) as the
Plan Administrator who are full time employees of the Employer shall receive no
additional compensation for their services as Plan Administrator. However, all
reasonable expenses of the Plan Administrator shall be paid or reimbursed by the
Employer upon proper documentation. Individuals serving (either alone or as a
committee) as the Plan Administrator shall be indemnified by the Employer
against personal liability and defense costs for actions taken in good faith in
the discharge of their duties as the Plan Administrator.

                  6.4      Bonding. The Plan Administrator shall arrange any
bonding that may be required by law, but no amount in excess of the amount
required by law (if any) shall be required by the Plan.

                                       10
<PAGE>

                                   ARTICLE VII
                      AMENDMENT, SUSPENSION AND TERMINATION

                  7.1      Amendment, Suspension and Termination. The Employer
reserves the right, in its role as employer and not as a fiduciary, at any time
and from time to time, to amend, modify, suspend or terminate the Plan in whole
or in part, for any reason and at any time, and without either the consent of,
or the prior notification to, any Participant, Terminated Employee, Employee or
other individual. No such amendment, modification, suspension or termination
shall give the Employer the right to recover any amount paid to a Participant
prior to the date of such amendment, modification, suspension or termination.
However, any such amendment, modification, suspension or termination may cause
the discontinuance of payments of Benefits, or the cessation of the obligation
to pay any Benefit, to any person or persons under the Plan. The Employer shall
have the right to delegate its authority and powers hereunder, or any portion
thereof, to a committee, an affiliated company or any other individual or
entity.

                                       11
<PAGE>

                                  ARTICLE VIII
                             DUTIES OF THE EMPLOYER

                  8.1      Records. The Employer shall supply to the Plan
Administrator all records and information necessary to the performance of the
Plan Administrator's duties.

                  8.2      Payment. The Employer shall make payments from its
general assets to Participants in accordance with the terms of the Plan.

                  8.3      Appointment of Fiduciaries. The Employer shall
appoint, and may at any time remove, the Plan Administrator and the Named
Appeals Fiduciary in accordance with the applicable provisions of the Plan.

                                       12
<PAGE>

                                   ARTICLE IX
                                CLAIMS PROCEDURES

                  9.1      Application for Benefits. Each Terminated Employee
believing himself or herself to be entitled to Benefits under this Plan may
apply for such Benefits within 30 days of his or her termination of employment.
Such application must be in writing and must state the reason(s) the Terminated
Employee believes he or she is entitled to Benefits under this Plan and include
such other information as may be required by the Plan Administrator. Before the
date on which Benefits are paid or payments commence, each such application must
be supported by such information as the Plan Administrator deems relevant and
appropriate. Benefits shall not be paid or commence to be paid until an
application has been submitted and approved by the Plan Administrator in
accordance with such rules and procedures as the Plan Administrator may from
time to time prescribe.

                  9.2      Appeals of Denied Claims for Benefits. In the event
that any claim for Benefits is denied in whole or in part by the Plan
Administrator, the claimant whose claim has been so denied shall be notified of
such denial in writing by the Plan Administrator. The notice advising of the
denial shall specify the reason or reasons for denial, make specific reference
to pertinent Plan provisions, describe any additional material or information
necessary for the claimant to perfect the claim (explaining why such material or
information is needed), and shall advise the individual of the procedure for the
appeal of such denial. All appeals shall be made by the following procedure:

                           (a)      The Terminated Employee whose claim has been
         denied shall file with the Plan Administrator a notice of desire to
         appeal the denial. Such notice must be filed within sixty (60) days of
         notification of the claim denial, be made in writing, and set forth all
         of the facts upon which the appeal is based. Appeals not timely filed
         in writing shall be barred.

                           (b)      The Plan Administrator shall, within thirty
         (30) days of receipt of the claimant's notice of appeal, establish a
         hearing date on which the claimant may make an oral presentation via
         telephone or in person to the Named Appeals Fiduciary in support of his
         or her appeal. The claimant shall be given not less than ten (10) days
         notice of the date set for the hearing.

                           (c)      The Named Appeals Fiduciary shall consider
         the merits of the claimant's written and oral presentations, the merits
         of any facts or evidence in support of the denial of benefits, and such
         other facts and circumstances as the Named Appeals Fiduciary shall deem
         relevant. If the claimant elects not to make an oral presentation, such
         election shall not be deemed adverse to his or her interest, and the
         Named Appeals Fiduciary shall proceed as set forth below as though an
         oral presentation of the contents of the claimant's written
         presentation had been made.

                                       13
<PAGE>

                           (d)      The Named Appeals Fiduciary shall render a
         determination upon the appeal, which determination shall be accompanied
         by a written statement as to the reasons therefor. The determination so
         rendered shall be binding upon all parties and shall not be overturned
         by a reviewing tribunal unless it can be shown that the decision was
         arbitrary and capricious. In applying this standard, a reviewing
         tribunal shall not set aside the decision of the Named Appeals
         Fiduciary as long as there exists any rational basis for the decision
         of the Named Appeals Fiduciary.

                  9.3      Appointment of the Named Appeals Fiduciary. The Named
Appeals Fiduciary shall be an individual or a committee of two or more
individuals appointed by the Employer, who may, but need not be, employees of
the Employer, or in the absence of such appointment, the Named Appeals Fiduciary
shall be the Plan Administrator. The Named Appeals Fiduciaries may at any time
be removed by the Employer. All such removals may be with or without cause and
shall be effective on the date stated in the notice of removal. The Named
Appeals Fiduciary shall be a "named fiduciary" within the meaning of ERISA, and
shall have only the authority, responsibility, or liability set forth in this
Article IX.

                                       14
<PAGE>

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

                  10.1     Nonalienation of Benefits. None of the payments,
benefits or rights of any Participant shall be subject to any claim of any
creditor and, in particular, to the fullest extent permitted by law, all such
payments, benefits and rights shall be free from attachment, garnishment,
trustee's process, or any other legal or equitable process available to any
creditor of such Participant. No Participant shall have the right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits or payments
which he or she may expect to receive, contingently or otherwise, under this
Plan.

                  10.2     No Contract of Employment. Neither the establishment
of the Plan, nor any modification thereof, nor the creation of any fund, trust
or account, nor the payment of any benefits shall be construed as giving any
Employee, or any person whosoever, the right to be retained in the service of
the Employer, and all Employees shall remain subject to discharge to the same
extent as if the Plan had never been adopted.

                  10.3     Severability of Provisions. Except for those
provisions contained in Section 3.3 which go to the essence of this Plan and
require the execution of a release as a condition precedent to eligibility, if
any other provision of this Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and
this Plan shall be construed and enforced as if such provision had not been
included.

                  10.4     Heirs, Assigns and Personal Representatives. This
Plan shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties, including each Participant, present and future (except
that no successor to the Employer shall be considered a Plan sponsor unless that
successor adopts this Plan).

                  10.5     Headings and Captions. The headings and captions
herein are provided for reference and convenience only, shall not be considered
part of the Plan, and shall not be employed in the construction of the Plan.

                  10.6     Gender and Number. Except where otherwise clearly
indicated by context, the masculine and the neuter shall include the feminine
and the neuter, the singular shall include the plural, and vice-versa.

                  10.7     Unfunded Plan. The Plan shall not be funded. No
Participant shall have any right to, or interest in, any assets of the Employer
which may be applied by the Employer to the payment of Benefits.

                  10.8     Payments to Incompetent Persons, Etc. Any Benefit
payable to or for the benefit of a minor, an incompetent person or other person
incapable of receiving therefor shall be deemed paid when paid to such person's
guardian or to the party providing or reasonably

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<PAGE>

appearing to provide for the care of such person, and such payment shall fully
discharge the Employer, the Plan Administrator and all other parties with
respect thereto.

                  10.9     Appendices. From time to time, the Employer may elect
to append provisions of limited duration to this Plan to govern what the
Employer determines to be special circumstances governing certain Employees.
Each such Appendix, during the period stipulated therein, shall be deemed a part
of this Plan. Except as otherwise stated in any such Appendix applicable to any
Employee or Terminated Employee, the rights of such Employee or Terminated
Employee as stated in such Appendix shall supersede the rights provided under
this Plan; the Benefits provided under such Appendix shall be in lieu of
comparable or stipulated Benefits provided under this Plan, and there shall be
no duplication of Benefits.

                  10.10    Lost Payees. A benefit shall be deemed forfeited if
the Plan Administrator is unable to locate a Participant to whom a Benefit is
due. At the sole discretion of the Employer, acting in its role as an employer
and not as a fiduciary, such Benefit may be reinstated if application is made by
the Participant for the forfeited Benefit while this Plan is in operation.

                  10.11    Controlling Law. This Plan shall be construed and
enforced according to Pennsylvania law except to the extent superseded by
federal law.

                  IN WITNESS WHEREOF, the Employer has caused this Plan to be
executed in its name and behalf this 1st day of January, 1999, by its officers
thereunto duly authorized.

                                            UGI UTILITIES, INC.
Attest:

By: /s/ John C. Barney                      By: /s/ Robert J. Chaney
   -------------------                         ---------------------

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