Document:

exv10w7

 

Exhibit 10.7

UGI CORPORATION

2004 OMNIBUS EQUITY COMPENSATION PLAN

PERFORMANCE UNIT GRANT LETTER

This PERFORMANCE UNIT GRANT, dated as of January 1, 2006 (the “Date of Grant”), is delivered by UGI
Corporation (“UGI”) to                      (the “Participant”).

RECITALS

The UGI Corporation 2004 Omnibus Equity Compensation Plan (the “Plan”) provides for the grant
of performance units (“Performance Units”) with respect to shares of common stock of UGI
(“Shares”). The Compensation and Management Development Committee of the Board of Directors of UGI
(the “Committee”) has decided to grant Performance Units to the Participant.

NOW, THEREFORE, the parties to this Grant Letter, intending to be legally bound hereby, agree
as follows:

1. Grant of Performance Units. Subject to the terms and conditions set forth in this Grant
Letter and in the Plan, the Committee hereby grants to the Participant                      Performance
Units. The number of Performance Units set forth above is the target award of Performance Units.
The Performance Units are contingently awarded and will be earned and payable if and to the extent
that the performance goals and other conditions of the Grant Letter are met. The Performance Units
are granted with Dividend Equivalents (as defined in Section 9).

2. Performance Goals.

(a) The Participant shall earn the right to payment of the Performance Units if the
performance goals described in subsection (b) below are met for the measurement period, and if the
Participant continues to be employed by, or provide service to, the Company (as defined in Section
9) through December 31, 2008. The measurement period is the period beginning January 1, 2006 and
ending December 31, 2008.

(b) The target award level of Performance Units and Dividend Equivalents will be payable if
UGI’s Total Shareholder Return (TSR) equals the median TSR of a peer group for the measurement
period. The peer group is the group of companies that comprises the S&P Utilities Index during the
measurement period. The actual amount of the award of Performance Units may be higher or lower
than the target award, or even zero, based on UGI’s TSR percentile rank relative to the companies
in the S&P Utilities Index, as follows:

 

 

 

	 	 	 	 	 
	UGI's TSR Rank	 	 	 
	(Percentile)	 	Percentage of Target Award Earned
	Highest
	 	 	200	%
	90th
	 	 	175	%
	75th
	 	 	150	%
	60th
	 	 	125	%
	50th
	 	 	100	%
	40th
	 	 	50	%
	less than 40th
	 	 	0	%

The target award percentage earned will be interpolated between each of the measuring points.

(c) TSR shall be calculated by UGI using the comparative returns methodology used by Bloomberg
L.P. or its successor at the time of the calculation. The share price used for determining TSR at
the beginning and the end of the measurement period will be the average price for the 90-day period
preceding the beginning of the measurement period (i.e., the 90-day period ending on December 31,
2005) and the 90-day period ending on the last day of the measurement period (i.e., the 90-day
period ending on December 31, 2008).

(d) The target award is the number of Performance Units set forth in Section 1 above, which is
the amount designated for 100% (50th TSR rank) performance. The Participant can earn up to 200% of
the target award if UGI’s TSR rank exceeds the 50th TSR rank, according to the foregoing schedule.

(e) At the end of the measurement period, the Committee will determine whether and to what
extent the performance goals have been met and the amount to be paid with respect to the
Performance Units. Except as described in Section 3 below, the Participant must be employed by, or
providing service to, the Company on December 31, 2008 in order for the Participant to receive
payment with respect to the Performance Units.

3. Termination of Employment or Service.

(a) Except as described below, if the Participant’s employment or service with the Company
terminates on or before December 31, 2008, the Performance Units and all Dividend Equivalents
credited under this Grant Letter will be forfeited.

(b) If the Participant terminates employment or service on account of Retirement (as defined
in Section 9), Disability (as defined in Section 9) or death, the Participant will earn a pro-rata
portion of the Participant’s outstanding Performance Units and Dividend Equivalents, if the
performance goals and the requirements of this Grant Letter are met. The prorated portion will be
determined as the amount that would otherwise be paid after the end of the measurement period,
based on achievement of the performance goals, multiplied by a fraction, the numerator of which is
the number of calendar years during the measurement period in which the Participant has been
employed by, or provided service to, the Company and the denominator of which is three. For
purposes of the proration calculation, the calendar year in which the Participant’s termination of
employment or service on account of Retirement, Disability, or death occurs will be counted as a
full year.

 

2

 

(c) In the event of termination of employment or service on account of Retirement, Disability
or death, the prorated amount shall be paid after the end of the measurement period, pursuant to
Section 5 below.

4. Coordination with Severance Plan. Notwithstanding anything in this Grant Letter to the
contrary, if the Participant receives severance benefits under a Severance Plan (as defined in
Section 9) and the terms of such benefits require that severance compensation payable under the
Severance Plan be reduced by benefits payable under this Plan, any amount payable to the
Participant with respect to Performance Units and Dividend Equivalents after the Participant’s
termination of employment or service shall be reduced by the amount of severance compensation paid
to the Participant under the Severance Plan, as required by, and according to the terms of, the
Severance Plan.

5. Payment with Respect to Performance Units. If the Committee determines that the
conditions to payment of the Performance Units have been met, the Company shall pay to the
Participant, between January 1, 2009 and March 15, 2009, (i) Shares equal to the number of
Performance Units to be paid according to achievement of the performance goals, up to the target
award specified in Section 1 above (“Target Award”), provided that the Company may withhold Shares
to cover required tax withholding in an amount equal to the minimum statutory tax withholding
requirement in respect of the Performance Units earned up to the Target Award, and (ii) cash in an
amount equal to the Fair Market Value (as defined in the Plan) of the number of Shares equal to the
Performance Units to be paid in excess of the Target Award.

6. Dividend Equivalents with Respect to Performance Units.

(a) Dividend Equivalents shall accrue with respect to Performance Units and shall be payable
subject to the same performance goals and terms as the Performance Units to which they relate.
Dividend Equivalents shall be credited with respect to the target award of Performance Units from
the Date of Grant until the payment date. If and to the extent that the underlying Performance
Units are forfeited, all related Dividend Equivalents shall also be forfeited.

(b) While the Performance Units are outstanding, the Company will keep records in a
bookkeeping account for the Participant. On each payment date for a dividend paid by UGI on its
common stock, the Company shall credit to the Participant’s account an amount equal to the Dividend
Equivalents associated with the target award of Performance Units held by the Participant on the
record date for the dividend. No interest will be credited to any such account.

(c) The target amount of Dividend Equivalents (100% of the Dividend Equivalents credited to
the Participant’s account) will be earned if UGI’s TSR rank is at the 50th TSR rank for the
measurement period. The Participant can earn up to 200% of the target amount of Dividend
Equivalents if UGI’s TSR rank exceeds the 50th TSR rank, according to the schedule in Section 2
above. Except as described in Section 3(b) above, if the Participant’s employment or service with
the Company terminates on or before December 31, 2008, all Dividend Equivalents will be forfeited.

(d) Dividend Equivalents will be paid in cash at the same time as the underlying Performance
Units are paid, after the Committee determines that the conditions to payment have
been met. Notwithstanding anything in this Grant Letter to the contrary, the Participant may
not accrue Dividend Equivalents in excess of $1,000,000 during any calendar year under all grants
under the Plan.

 

3

 

7. Withholding. The Participant shall be required to pay to the Company, or make other
arrangements satisfactory to the Company to provide for the payment of, any federal, state, local
or other taxes that the Company is required to withhold with respect to the payments under this
Grant Letter.

8. Change of Control. If a Change of Control (as defined in the Plan) occurs during the
measurement period, the outstanding Performance Units and Dividend Equivalents shall be paid in
cash in an amount equal to the greater of (i) the target award amount or (ii) the award amount that
would be paid as if the measurement period ended on the date of the Change of Control, based on the
Company’s achievement of the performance goals as of the date of the Change of Control, as
determined by the Committee. If a former Participant is entitled to receive a prorated award for
the measurement period pursuant to Section 3(b) above, the award will be the prorated portion of
the amount described in the preceding sentence. The Performance Units and Dividend Equivalents
shall be paid on the closing date of the Change of Control.

9. Definitions. For purposes of this Grant Letter, the following terms will have the
meanings set forth below:

(a) “Company” means UGI and its Subsidiaries (as defined in the Plan).

(b) "Disability” means a long-term disability as defined in the Company’s long-term disability
plan applicable to the Participant.

(c) “Dividend Equivalent” means an amount determined by multiplying the number of shares of
UGI common stock subject to the target award of Performance Units by the per-share cash dividend,
or the per-share fair market value of any dividend in consideration other than cash, paid by UGI on
its common stock.

(d) “Employed by, or provide service to, the Company” shall mean employment or service as an
employee or director of the Company.

(e) “Performance Unit” means a hypothetical unit that represents the value of one share of UGI
common stock.

(f) "Retirement” means the Participant’s retirement under the Retirement Income Plan for
Employees of UGI Utilities, Inc., if the Participant is covered by that Retirement Income Plan.
“Retirement” for other Company employees means termination of employment after attaining age 55
with ten or more years of service with the Company.

(g) “Severance Plan” means any severance plan maintained by the Company that is applicable to
the Participant.

 

4

 

10. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan and the
Terms and Conditions established by the Committee with respect to the Plan, both of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the
Plan. The grant and payment of Performance Units and Dividend Equivalents are subject to
interpretations, regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but not limited to,
provisions pertaining to (i) the registration, qualification or listing of the Shares, (ii) changes
in capitalization of the Company and (iii) other requirements of applicable law. The Committee
shall have the authority to interpret and construe the grant pursuant to the terms of the Plan, and
its decisions shall be conclusive as to any questions arising hereunder.

11. No Employment or Other Rights. The grant of Performance Units shall not confer upon
the Participant any right to be retained by or in the employ or service of the Company and shall
not interfere in any way with the right of the Company to terminate the Participant’s employment or
service at any time. The right of the Company to terminate at will the Participant’s employment or
service at any time for any reason is specifically reserved.

12. No Shareholder Rights. Neither the Participant, nor any person entitled to exercise
the Participant’s rights in the event of the Participant’s death, shall have any of the rights and
privileges of a shareholder with respect to the Shares related to the Performance Units, unless and
until certificates for Shares have been issued to the Participant or successor.

13. Assignment and Transfers. The rights and interests of the Participant under this Grant
Letter may not be sold, assigned, encumbered or otherwise transferred except, in the event of the
death of the Participant, by will or by the laws of descent and distribution. If the Participant
dies, any payments to be made under this Grant Letter after the Participant’s death shall be paid
to the Participant’s estate. The rights and protections of the Company hereunder shall extend to
any successors or assigns of the Company and to the Company’s parents, subsidiaries, and
affiliates.

14. Applicable Law. The validity, construction, interpretation and effect of this
instrument shall be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to the conflicts of laws provisions thereof.

15. Notice. Any notice to UGI provided for in this instrument shall be addressed to UGI in
care of the Corporate Secretary at UGI’s headquarters, and any notice to the Participant shall be
addressed to such Participant at the current address shown on the payroll of the Company, or to
such other address as the Participant may designate to the Company in writing. Any notice shall be
delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated
above, registered and deposited, postage prepaid, in a post office regularly maintained by the
United States Postal Service.

 

5

 

IN WITNESS WHEREOF, UGI has caused its duly authorized officers to execute and attest this
Grant Letter, and the Participant has executed this Grant Letter, effective as of the Date of
Grant.

	 	 	 	 	 	 	 
	 	 	 	 	UGI Corporation
	Attest
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	Corporate Secretary

	 	 	 	 	 	Robert H. Knauss
	 

	 	 	 	 	 	Vice President and General Counsel

I hereby acknowledge receipt of the Plan and the Terms and Conditions incorporated herein. I
accept the Performance Units described in this Grant Letter, and I agree to be bound by the terms
of the Plan, including the Terms and Conditions, and this Grant Letter. I hereby further agree
that all the decisions and determinations of the Committee shall be final and binding on me and any
other person having or claiming a right under this Grant.

	 	 	 
	 
	 	 
	 

Participant

	 	 

 

6exv10w10

 

Exhibit 10.10

UGI CORPORATION

1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN

AMENDED AND RESTATED AS OF MAY 24, 2005

1. PURPOSE AND DESIGN

The purpose of this Plan is to assist the Company in securing and retaining key corporate
executives of outstanding ability, who are in a position to significantly participate in the
development and implementation of the Company’s strategic plans and thereby contribute materially
to the long-term growth, development and profitability of the Company, by affording them an
opportunity to purchase its Stock under options. The Plan is designed to align directly long-term
executive compensation with tangible, direct and identifiable benefits realized by the Company’s
shareholders. No grants may be made under this Plan after January 1, 2004.

2. DEFINITIONS

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

2.01 “Board” means UGI’s Board of Directors as constituted from time to time, provided that
whenever in this Plan Board approval is required, such approval shall require the affirmative vote
of a majority of members of the Board who are not participants in the Plan.

2.02 “Committee” means the Compensation and Management Development Committee of the Board or
its successor.

2.03 “Company” means UGI Corporation, a Pennsylvania corporation, any successor thereto and
any Subsidiary which adopts this plan, with the approval of the Committee, by executing a
participation and joinder agreement.

2.04 “Comparison Group” means the group determined by the Committee (no later than ninety (90)
days after the commencement of the Performance Period) consisting of the Company and such other
companies deemed by the Committee (in its sole discretion) to be reasonably comparable to the
Company and set forth in Exhibit 1.

2.05 “Date of Grant” means the date the Committee makes an Option grant.

2.06 “Dividend Equivalent” means an amount determined by multiplying the number of shares of
Stock subject to an Option on the Date of Grant (whether or not the Option is ever exercised with
respect to any or all shares of Stock subject thereto) by the per-share cash dividend, or the
per-share fair market value (as determined by the Committee) of any dividend in consideration other
than cash, paid by the Company on its Stock on a dividend payment date.

2.07 “Employee” means a regular full-time salaried employee (including officers and directors
who are also employees) of the Company.

 

 

 

2.08 “Fair Market Value” of Stock means the average, rounded to the next highest one-eighth of
a point (.125), of the highest and lowest sales prices thereof on the New York Stock Exchange on
the day on which Fair Market Value is being determined, as reported on the Composite Tape for
transactions on the New York Stock Exchange; provided, however, in the case of a cashless exercise
pursuant to Section 7.4(iv), the Fair Market Value shall be the actual sale price of the shares
issued upon exercise of the Option. In the event that there are no Stock transactions on the New
York Stock Exchange on such day, the Fair Market Value will be determined as of the immediately
preceding day on which there were Stock transactions on that exchange.

2.09 “Option” means the right to purchase Stock pursuant to the relevant provisions of this
Plan at the Option Price for a specified period of time, not to exceed ten years from the Date of
Grant, which period of time shall be subject to earlier termination prior to exercise in accordance
with Sections 11, 12 and 13 of this Plan.

2.10 “Option Price” means an amount per share of Stock purchasable under an Option designated
by the Committee on the Date of Grant of an Option to be payable upon exercise of such Option. The
Option Price shall not be less than 100% of the Fair Market Value of the Stock determined on the
Date of Grant.

2.11 “Participant” means an Employee designated by the Committee to participate in the Plan;
provided, however, that no Employee who is not then a Participant in the Plan may be designated by
the Committee to participate in the Plan at any time during the last full year of a Performance
Period.

2.12 “Performance Period” means a period selected by the Committee over which the total return
realizable by a shareholder of the Company on a share of Stock is compared to that realizable by
shareholders of companies in the Comparison Group in accordance with Section 8.2 of the Plan in
order to determine whether Dividend Equivalents associated with an Option will be payable to a
Participant.

2.13 “Stock” means the Common Stock of UGI or such other securities of UGI as may be
substituted for Stock or such other securities pursuant to Section 14.

2.14 “Subsidiary” means any corporation or partnership, at least 20% of the outstanding voting
stock, voting power or partnership interest of which is owned respectively, directly or indirectly,
by the Company.

2.15 “Termination without Cause” means termination for the convenience of the Company for any
reason other than (i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii)
conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of
duties, which gross negligence has had a material adverse effect on the business, operations,
assets, properties or financial condition of the Company.

2.16 “UGI” means UGI Corporation, a Pennsylvania corporation or any successor thereto.

 

2

 

3. NUMBER AND SOURCE OF SHARES AVAILABLE FOR OPTIONS—MAXIMUM ALLOTMENT

The number of shares of Stock which may be made the subject of Options under this Plan at any one
time may not exceed 4,500,000 in the aggregate (after giving retroactive effect to the 2-for-1
Stock split distributed May 24, 2005), including shares acquired by Participants through exercise
of Options under this Plan, subject, however, to the adjustment provisions of Section 14 below. The
maximum number of shares of Stock which may be the subject of grants to any one individual in any
calendar year shall be 900,000 (after giving retroactive effect to the 2-for-1 Stock split
distributed May 24, 2005). If any option expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject to the option will again be available for the
purposes of the Plan. Shares which are the subject of Options may be previously issued and
outstanding shares of the Stock reacquired by the Company and held in its treasury, or may be
authorized but unissued shares of Stock, or may be partly of each.

4. DURATION OF THE PLAN

The Plan will remain in effect until all Stock subject to it has been purchased pursuant to the
exercise of Options or all such options have terminated without exercise. Notwithstanding the
foregoing, no option may be granted after December 31, 2006.

5. ADMINISTRATION

The Plan will be administered by the Committee. Subject to the express provisions of the Plan, the
Committee will have authority, in its complete discretion, to determine the Employees to whom, and
the time or times at which, Options will be granted, the number of shares to be subject to each
Option, the Option Price to be paid for the shares upon the exercise of each Option, and the period
within which each Option may be exercised. In making such determinations, the Committee may take
into account the nature of the services rendered by an Employee, the present and potential
contributions of the Employee to the Company’s success and such other factors as the Committee in
its discretion deems relevant. Subject to the express provisions of the Plan, the Committee will
also have authority to construe and interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the respective stock option
agreements required by Section 7.2 of the Plan (which need not be identical), and to make all other
determinations (including factual determinations) necessary or advisable for the orderly
administration of the Plan. A Stock option agreement as discussed below shall be executed by each
Participant receiving a grant under the Plan and shall constitute that Participant’s
acknowledgement and acceptance of the terms of the Plan and the Committee’s authority and
discretion. It is the intent of the Company that the Plan should comply in all applicable respects
with Rule 16b-3 under the Exchange Act so that transactions relating to any Option and Dividend
Equivalents granted to a Participant who is subject to Section 16 of the Exchange Act shall be
exempt under Rule 16b-3. Accordingly, if any provision of the Plan or any agreement relating to an
option does not comply with the requirements of Rule 16b-3 as then applicable to any such
Participant, such provision shall be construed or deemed amended to the extent necessary to conform
to such requirements with respect to such Participant. Any other provision of the Plan
notwithstanding, the Board may perform any function of the Committee under the Plan, including
without limitation for the purpose of
ensuring that transactions under the Plan by Participants who are subject to Section 16 of the
Exchange Act in respect of the Company are exempt under Rule 16b-3. In any case in which the Board
is performing a function of the Committee under the Plan, each reference to the Committee herein
shall be deemed to refer to the Board (unless the context shall otherwise require).

 

3

 

6. ELIGIBILITY

Options may be granted only to Employees (including directors who are also Employees of the
Company) who, in the sole judgment of the Committee, are designated by the Committee as individuals
who are in a position to significantly participate in the development and implementation of the
Company’s strategic plans and thereby contribute materially to the continued growth and development
of the Company and to its future financial success.

7. OPTIONS

7.01 Grant of Options. Subject to the provisions of Sections 2.11 and 3, Options may
be granted to Participants at any time and from time to time as may be determined by the Committee.
The Committee will have complete discretion in determining the number of Options granted to each
Participant and the number of shares of Stock subject to such Options.

7.02 Option Agreement. As determined by the Committee on the Date of Grant, each
option will be evidenced by a stock option agreement (substantially in the form included in Exhibit
2 attached hereto) that shall, among other things, specify the Date of Grant, the Option Price, the
duration of the Option and the number of shares of Stock to which the Option pertains.

7.03 Exercise and Vesting.

(a) Except as otherwise specified by the Committee, an option shall be fully and immediately
exercisable on the Date of Grant. Notwithstanding the foregoing, in the event that any such Options
are not by their terms immediately exercisable, the Committee may accelerate the exercisability of
any or all outstanding Options at any time for any reason. No Option shall be exercisable on or
after the tenth anniversary of the Date of Grant.

(b) Except as otherwise specified by the Committee, in the event that a Participant holding an
option ceases to be an Employee, the option held by such Participant shall be exercisable only with
respect to that number of shares of Stock with respect to which it is already exercisable on the
date such Participant ceases to be an Employee. However, if a Participant holding an Option ceases
to be an Employee by reason of (i) a retirement under the Company’s retirement plan, (ii)
Termination without Cause, (iii) disability, or (iv) death, the Option held by any such Participant
shall thereafter become immediately exercisable with respect to the total number of shares of Stock
available under such option and shall remain exercisable until the earlier of the expiration date
of the option or the expiration of the thirteen (13) month period following the date of such
cessation of employment.

(c) Notwithstanding the foregoing, in the event of any merger or consolidation of any other
corporation with or into UGI, or the sale of all or substantially all of the assets of UGI or an
offer to purchase made by a party other than UGI to all shareholders of
UGI for all or any substantial portion of the outstanding Stock, a participant shall be
permitted to exercise all outstanding Options (to the extent not otherwise exercisable by their
terms) prior to the effective date of any such merger, consolidation or sale or the expiration of
any such offer to purchase, unless otherwise determined by the Committee, no later than thirty (30)
days prior to the effective date of such transaction or the expiration of such offer.

 

4

 

(d) Notwithstanding anything contained in this Section 7.3 with respect to the number of
shares of Stock subject to an Option with respect to which such Option is or is to become
exercisable, no Option, to the extent that it has not previously been exercised, shall be
exercisable after it has terminated, including without limitation, after any termination of such
option pursuant to Sections 11, 12 and 13 hereof.

7.04 Payment. The Option Price upon exercise of any option shall be payable to the
Company in full (i) in cash or its equivalent, (ii) by tendering shares of previously acquired
Stock already beneficially owned by the Participant for more than one year and having a Fair Market
Value at the time of exercise equal to the total Option Price, (iii) by applying Dividend
Equivalents payable to the Participant in accordance with Section 8 of the Plan in an amount equal
to the total Option Price, (iv) by payment through a broker in accordance with procedures permitted
by Regulation T of the Federal Reserve Board, (v) by such other method as the Committee may
approve, or (vi) by a combination of (i), (ii), (iii), (iv) and/or (v). The cash proceeds from such
payment will be added to the general funds of the Company and shall be used for its general
corporate purposes. Any shares of Stock tendered to UGI in payment of the Option Price will be
added by UGI to its Treasury Stock to be used for its general corporate purposes.

8. DIVIDEND EQUIVALENTS

8.01 Amount of Dividend Equivalents Credited. From the Date of Grant of an Option to a
Participant (or, in the case of an Option granted after the date of commencement of a Performance
Period to a new Participant or to a Participant with changed responsibilities, in which event, from
such date not earlier than the date of commencement of the Performance Period as is designated by
the Committee) until the earlier of (i) the end of the applicable Performance Period or (ii) the
date of disability, death or termination of employment for any reason (including retirement), of a
participant, the Company shall keep records for such Participant (“Account”) and shall credit on
each payment date for the payment of a dividend made by UGI on its Stock an amount equal to the
Dividend Equivalent associated with such Option. Notwithstanding the foregoing, a Participant may
not accrue during any calendar year Dividend Equivalents in excess of $1,000,000. Except as set
forth in Section 8.5 below, no interest shall be credited to any such Account.

8.02 Payment of Credited Dividend Equivalents. The Committee will determine (no later
than ninety (90) days after the commencement of the Performance Period) and set forth on Exhibit 1
measurable criteria pursuant to which the total return realizable by a shareholder of the Company
on a share of Stock over the applicable Performance Period can be compared to that realizable over
the same Performance Period by shareholders of the Comparison Group. The extent to which a
Participant receives payment of the Dividend Equivalents associated with an Option and recorded in
his Account during any particular Performance Period shall be
determined by comparing (through use of the selected measurable criteria) the aforementioned
total return realizable by a shareholder of the Company to that realizable by shareholders of the
Comparison Group. Payments shall be made after the end of the applicable Performance Period
according to the following table (with results falling between table values being interpolated):

 

5

 

	 	 	 	 	 
	PERCENT OF COMPANIES IN COMPARISON	 	 	 
	GROUP HAVING TOTAL RETURN TO	 	 	 
	SHAREHOLDERS LESS THAN THAT TO	 	PERCENT OF DIVIDEND
	COMPANY’S SHAREHOLDERS	 	EQUIVALENTS PAYABLE
	100
	 	 	200	 
	75
	 	 	150	 
	50
	 	 	75	 
	less than 50
	 	 	0	 

8.03 Timing of Payment of Dividend Equivalents.

(a) Except as otherwise determined by the Committee, in the event of the (i) termination of an
option prior to exercise pursuant to Sections 11, 12 or 13 hereof, or (ii) acceleration of the
exercise date of an Option pursuant to Section 7.3 hereof, in either case prior to the end of the
applicable Performance Period, no payments of Dividend Equivalents associated with any Option shall
be made (A) prior to the end of the applicable Performance Period and (B) to any Participant whose
employment by the Company terminates prior to the end of the applicable Performance Period for any
reason other than retirement under the Company’s retirement plan, death, disability or Termination
without Cause. As soon as practicable after the end of such Performance Period, the Committee will
certify and announce the results for each Performance Period prior to any payment of Dividend
Equivalents and unless a Participant shall have made an election under Section 8.6 to defer receipt
of any portion of such amount, a Participant shall receive the aggregate amount of Dividend
Equivalents payable to him.

(b) Notwithstanding anything to the contrary in this Section 8.3, unless a payment of Dividend
Equivalents associated with an Option is being made upon full exercise or termination of such
Option, no Dividend Equivalents shall be paid (either at the end of the applicable Performance
Period or on a date such Dividend Equivalents are scheduled to be paid pursuant to a deferral
election) if the average Fair Market Value of Stock for a period of thirty (30) consecutive
business days immediately preceding the end of the applicable Performance Period or the date such
deferred payment is scheduled to be made (as the case may be) is less than the exercise price of
the Option to which such Dividend Equivalents were associated, and such payment shall instead be
made at the earlier of (i) such time as the average Fair Market Value of Stock over a period of
ninety (90) consecutive business days thereafter exceeds the exercise price of such Option, or (ii)
the termination or expiration date of such option.

8.04 Form of Payment for Dividend Equivalents. The Committee shall have the sole
discretion to determine whether the Company’s obligation in respect of payment of Dividend
Equivalents shall be paid solely in credits to be applied toward payment of the Option Price,
solely in cash or partly in such credits and partly in cash.

 

6

 

8.05 Interest on Dividend Equivalents. From a date which is thirty (30) days after the
end of the applicable Performance Period until the date that all Dividend Equivalents associated
with such Option and payable to a Participant are paid to such Participant, the Account maintained
by the Company in its books and records with respect to such Dividend Equivalents shall be credited
with interest at a market rate determined by the Committee.

8.06 Deferral of Dividend Equivalents. A Participant shall have the right to defer
receipt of any Dividend Equivalent payments associated with an Option if he shall elect to do so on
or prior to December 31 of the year preceding the beginning of the last full year of the applicable
Performance Period (or such other time as the Committee shall determine is appropriate to make such
deferral effective under the applicable requirements of federal tax laws). The terms and conditions
of any such deferral (including the period of time thereof) shall be subject to approval by the
Committee and all deferrals shall be made on a form provided a Participant for this purpose.

9. WRITTEN NOTICE, ISSUANCE OF STOCK, SHAREHOLDER PRIVILEGES AND PARTIAL EXERCISE

9.01 Written Notice. A Participant wishing to exercise an Option must give irrevocable
written notice to the Company in the form and manner prescribed by the Committee, indicating the
date of award, the number of shares as to which the option is being exercised, and such other
information as may be required by the Committee. Full payment for the shares pursuant to the Option
must be received by the time specified by the Committee depending on the type of payment being
made, but in all cases, prior to the issuance of the Shares. Except as provided in Sections 11, 12
and 13, no Option may be exercised at any time unless the Participant is then an Employee of the
Company.

9.02 Issuance of Stock. As soon as practicable after the receipt of irrevocable
written notice and payment, the Company will, without stock transfer taxes to the Participant or to
any other person entitled to exercise an Option pursuant to this Plan, deliver to, or credit
electronically on behalf of, the Participant, the Participant’s designee or such other person the
requisite number of shares of Stock.

9.03 Privileges of a Shareholder. A Participant or any other person entitled to
exercise an option under this Plan will have no rights as a shareholder with respect to any Stock
covered by the Option until the due exercise of the Option and issuance of such Stock.

9.04 Partial Exercise. An Option granted under this Plan may be exercised as to any
lesser number of shares than the full amount for which it could be exercised. Such a partial
exercise of an Option will not affect the right to exercise the Option from time to time in
accordance with this Plan as to the remaining shares subject to the Option.

10. NON-TRANSFERABILITY OF OPTIONS

No Option, rights to Dividend Equivalents or other rights granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution, and an Option may be
exercised, during the lifetime of the Participant, only by the Participant. Notwithstanding the
foregoing, the Committee may provide that a Participant may transfer Options to family
members or other persons or entities according to such terms as the Committee may determine;
provided that the Participant receives no consideration for the transfer of an option and the
transferred option shall continue to be subject to the same terms and conditions as were applicable
to the option immediately before the transfer.

 

7

 

11. TERMINATION OF EMPLOYMENT (OTHER THAN BY REASON OF DEATH OR DISABILITY)

Each Option, to the extent that it has not previously been exercised, will terminate when the
Participant holding such Option (while living) ceases to be an Employee of the Company, unless such
cessation of employment is (i) on account of a Termination without Cause, or (ii) a retirement
under the Company’s retirement plan, in either of which events the Option shall be fully and
immediately exercisable (to the extent not otherwise exercisable by its terms) and will terminate
upon the earlier of the expiration date of the option or the expiration of the thirteen (13) month
period following the date of such cessation of employment. The Committee will have authority to
determine whether an authorized leave of absence or absence on military or governmental service
will constitute a termination of employment for the purposes of this Plan. The Committee shall have
sole discretion to determine the effect of any change in the duties and responsibilities of a
Participant while that Participant continues to be an Employee of the Company on Options granted
under this Plan which are not then exercisable and on Dividend Equivalents not then payable under
Section 8.3 of the Plan.

12. DISABILITY

If a Participant is determined to be “disabled” (as defined under the Company’s long-term
disability plan), the Option theretofore granted to such Participant shall be fully and immediately
exercisable (to the extent not otherwise exercisable by its terms) at any time prior to the earlier
of the expiration date of the option or the expiration of the thirteen (13) month period following
the date of such determination.

13. DEATH OF PARTICIPANT

In the event of the death of a Participant while employed by the Company, the Option theretofore
granted to such Participant shall be fully and immediately exercisable (to the extent not otherwise
exercisable by its terms) at any time prior to the earlier of the expiration date of the option or
the expiration of the thirteen (13) month period following the Participant’s death. Death of a
Participant after such Participant has ceased to be employed by the Company will not affect the
otherwise applicable period for exercise of the Option determined pursuant to Section 11 or 12.
Such Option may be exercised by the estate of the Participant or by any person to whom the
Participant may have bequeathed the Option or whom the Participant may have designated to exercise
the same under the Participant’s last will, or by the Participant’s personal representatives if the
Participant has died intestate.

 

8

 

14. ADJUSTMENT OF NUMBER AND PRICE OF SHARES, ETC.

Notwithstanding anything to the contrary in this Plan, in the event any recapitalization,
reorganization, merger, consolidation, spin-off, combination, repurchase, exchange of shares or
other securities of UGI, stock split or reverse split, extraordinary dividend, liquidation,
dissolution, significant corporate transaction (whether relating to assets or stock) involving UGI,
or other extraordinary transaction or event affects Stock such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of Participants’ rights
under the Plan, then the Committee may, in a manner that is equitable, adjust (i) any or all of the
number or kind of shares of Stock reserved for issuance under the Plan, (ii) the maximum number of
shares of Stock which may be the subject of grants to any one individual in any calendar year,
(iii) the number or kind of shares of Stock to be subject to Options thereafter granted under the
Plan, (iv) the number and kind of shares of Stock issuable upon exercise of outstanding Options,
(v) the Option Price per share thereof, and/or (vi) the terms and conditions applicable to Dividend
Equivalents, provided that the number of shares subject to any Option will always be a whole
number. Any such determination of adjustments by the Committee will be conclusive for all purposes
of the Plan and of each Option, whether a stock option agreement with respect to a particular
option has been theretofore or is thereafter executed.

15. LIMITATION OF RIGHTS

Nothing contained in this Plan shall be construed to give an Employee any right to be granted an
Option except as may be authorized in the discretion of the Committee. The granting of an option
under this Plan shall not constitute or be evidence of any agreement or understanding, expressed or
implied, that the Company will employ a Participant for any specified period of time, in any
specific position or at any particular rate of remuneration.

16. AMENDMENT OR TERMINATION OF PLAN

Subject to Board approval, the Committee may at any time, and from time to time, alter, amend,
suspend or terminate this Plan without the consent of the Company’s shareholders or Participants,
except that any such alteration, amendment, suspension or termination shall be subject to the
approval of the Company’s shareholders within one year after such Committee and Board action if
such shareholder approval is required by any federal or state law or regulation or the rules of any
stock exchange or automated quotation system on which the Stock is then listed or quoted, or if the
Committee in its discretion determines that obtaining such shareholder approval is for any reason
advisable. No termination or amendment of this Plan may, without the consent of the Participant to
whom any option has previously been granted, adversely affect the rights of such Participant under
such Option, including the Dividend Equivalents associated with such Option. Notwithstanding the
foregoing, the Committee may make minor amendments to this Plan which do not materially affect the
rights of Participants or significantly increase the cost to the Company.

17. TAX WITHHOLDING

Upon exercise of any Option under this Plan, the Company will require the recipient of the Stock to
remit to the Company an amount sufficient to satisfy federal, state and local withholding tax
requirements. However, to the extent authorized by rules and regulations of the Committee, the
Company may withhold or receive Stock and make cash payments in respect thereof in satisfaction of
a recipient’s tax obligations, including tax obligations in excess of mandatory withholding
requirements.

 

9

 

18. GOVERNMENTAL APPROVAL

Each option will be subject to the requirement that if at any time the listing, registration or
qualification of the shares covered thereby upon any securities exchange, or under any state or
federal law, or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of or in connection with the granting of such Option or the purchase of
shares thereunder, no such option may be exercised in whole or in part unless and until such
listing, registration, qualification, consent or approval has been effected or obtained free of any
conditions not acceptable to the Board.

19. EFFECTIVE DATE OF PLAN

This Plan will become effective as of December 10, 1996, subject to ratification by the Company’s
shareholders prior to December 10, 1997.

20. SUCCESSORS

This Plan shall be binding upon and inure to the benefit of the Company, its successors and assigns
and the Participant and his heirs, executors, administrators and legal representatives.

21. GOVERNING LAW

The validity, construction, interpretation and effect of the Plan and option agreements issued
under the Plan shall be governed exclusively by and determined in accordance with the law of the
Commonwealth of Pennsylvania.

 

10

 

EXHIBIT 1

1. PERFORMANCE PERIOD

January 1, 1997 to December 31, 1999.

2. COMPARISON GROUP

	 	 	 
	American Electric Power Company, Inc.

	 	NICOR, Inc.
	Baltimore Gas & Electric Company

	 	Noram Energy Corporation
	Carolina Power & Light Company

	 	Northern States Power Company
	Central & South West Corporation

	 	Ohio Edison Company
	Cinergy Corporation

	 	ONEOK, Inc.
	Coastal Corporation

	 	Pacific Enterprises
	Columbia Gas System, Inc.

	 	Pacific Gas & Electric Company
	Consolidated Edison Co. of N.Y., Inc.

	 	Pacificorp
	Consolidated Natural Gas Company

	 	PanEnergy Corp.
	Dominion Resources, Inc.

	 	PECO Energy Company
	DTE Energy Company

	 	Peoples Energy Corporation
	Duke Power Company

	 	PP&L Resources, Inc.
	Eastern Enterprises

	 	Public Service Enterprise Group, Inc.
	Edison International

	 	Sonat, Inc.
	Enron Corporation

	 	Southern Company
	Entergy Corporation

	 	Texas Utilities Company
	FPL Group, Inc.

	 	Unicorn Corporation
	GPU, Inc.

	 	Union Electric Company
	Houston Industries, Inc.

	 	The Williams Companies, Inc.
	Niagara Mohawk Power Corporation
	 	 

3. COMPARISON CRITERIA

For purposes of the Plan, “Total Return” is the change in the market value of one share of common
stock of each company in the Comparison Group over the Performance Period, plus the amount of
dividends paid or the value of other distributions made with respect to such stock, reinvested in
the stock, over the same period.

The initial market value of each share of common stock to be measured during the Performance Period
(January 1, 1997 through December 31, 1999) will be the average of the closing prices of each such
stock on the New York Stock Exchange Composite Tape for all trading days during the three calendar
months prior to the commencement of the Performance Period.

The final market value of each share of common stock to be measured will be the average of the
closing prices for such stock on the New York Stock Exchange Composite Tape for all trading days
during the final three months of the Performance Period.

 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]