Document:

UGI Corp Q2 3.31.2013 Ex 10.1

EXHIBIT 10.1
AMENDMENT NO. 1
Dated as of March 15, 2013
to
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 18, 2012
THIS AMENDMENT NO. 1 (this “Amendment”) is made as of March 15, 2013 by and among UGI Energy Services, Inc., a Pennsylvania corporation (the “Borrower”), the financial institutions listed on the signature pages hereof and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), under that certain Amended and Restated Credit Agreement dated as of December 18, 2012 by and among the Borrower, the Lenders and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.
WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent agree to certain amendments to the Credit Agreement;
WHEREAS, the Borrower, the Lenders and the Administrative Agent have so agreed on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree to enter into this Amendment.
1.Amendments to the Credit Agreement.  Effective as of March 15, 2013 (the “Amendment No. 1 Effective Date”) but subject to the satisfaction of the conditions precedent set forth in Section 2 below, the parties hereto agree that the Credit Agreement is hereby amended as follows:
(a)    Section 1.01 to the Credit Agreement is amended to insert the following new defined terms alphabetically therein:
“Amendment No. 1 Effective Date” means March 15, 2013.
“Novus Operating Agreement” means that certain Operating Agreement dated as of July 1, 2009 by and among Tenaska Resources, LLC (as successor operator to Novus Operating, LLC), UGI Marcellus and the other non-operators party thereto, as amended pursuant to that certain Amendment Agreement having effectiveness as of June 1, 2012 or October 1, 2012, as applicable.
“Permitted Conversion Transaction” means the merger of the Borrower with and into a newly-formed Subsidiary of UGI Corporation organized as a limited liability company under the laws of the State of Pennsylvania (“Merger LLC”) in accordance with applicable law, with Merger LLC being the survivor thereof, subject to the following conditions precedent: (a) the Borrower shall have delivered written notice of any such conversion to the Administrative Agent not less than ten (10) Business Days prior thereto, (b) at the time of, and after giving effect to, such conversion, no Default or Event of Default has occurred and is continuing, (c) all representations and warranties set forth in this Agreement shall be true and correct in all material respects immediately prior to, and after giving effect to, such conversion (except that any such representations and warranties specifically which are already qualified as to materiality or by reference to Material Adverse Effect shall be treated as correct in all respects), (d) the owners of the Equity Interests of the Borrower immediately prior to giving effect to such transaction shall own not less than 100% of the aggregate Equity Interests of Merger LLC, (e) concurrently with the effectiveness of such conversion, to the extent reasonably requested by the Administrative Agent, the Borrower shall have executed and delivered assumption and reaffirmation documentation in connection herewith in form and substance reasonably acceptable to the Administrative Agent and which assumption and reaffirmation documentation shall certify that the conditions set forth in clauses (a) through (d) shall have been satisfied as of the date thereof.
“Permitted UGI Marcellus Contribution Transaction” means the contribution of all of the Equity Interests of UGI Marcellus by UGI Corporation or any of its Subsidiaries to the Borrower, subject to the following conditions precedent (a) at the time of, and after giving effect to, such transaction, no Default or Event of Default has occurred and is continuing, (b) all representations and warranties set forth in this Agreement shall be true and correct in all material respects immediately prior to, and after giving effect to, such contribution (except that any such representations and warranties specifically which are already qualified as to materiality or by reference to Material Adverse Effect shall be treated correct in all respects), and (c)to the extent applicable, all guaranty requirements under the Loan Documents, including, without limitation, pursuant to Sections 3.01 and 5.09, shall have been satisfied.
“UGI Marcellus” means UGI Marcellus, LLC, a Delaware limited liability company.
(b)    The definition of “Change in Control” now appearing in Section 1.01 to the Credit Agreement is amended to insert the following at the end thereof:  
“Notwithstanding the foregoing, the Permitted Conversion Transaction shall not constitute a Change in Control.”
(c)    Section 5.03 to the Credit Agreement is amended and restated in its entirety as follows:  
SECTION 5.03.  Existence; Conduct of Business.  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to (i) preserve, renew and keep in full force and effect its legal existence, (ii) preserve, renew and keep in full force and effect the rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and intellectual property rights material to the conduct of its business, and (iii) maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so under clause (ii) or (iii) could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.”
(d)    Section 6.02 to the Credit Agreement is amended to delete the reference to “$10,000,000” now appearing in clause (f) thereof and to substitute the following therefor: “$20,000,000”, to delete the word “and” now appearing at the end of clause (f) thereof, to replace the word “above” with the word “hereunder” in clause (f) thereof, to delete the period (“.”) now appearing at the end of clause (g) thereof and to substitute the following therefor: “; and”, and to insert the following new clause (h) at the end thereof:  
“(h)    Liens on the assets of UGI Marcellus to the extent arising under the Novus Operating Agreement (as in effect on the Amendment No. 1 Effective Date) and securing obligations of UGI Marcellus under the Novus Operating Agreement (as in effect on the Amendment No. 1 Effective Date) in respect of planned capital expenditures in an aggregate amount not to exceed $35,000,000.”
(e)    Section 6.03(a) to the Credit Agreement is amended to delete the word “and” now appearing at the end of clause (vi) thereof, to delete the period (“.”) now appearing at the end of clause (vii) thereof and to substitute the following therefor:  “; and”, and to insert the following new clause (viii) at the end thereof:  
“(viii)    the Borrower may consummate the Permitted Conversion Transaction.”
(f)    Section 6.04 to the Credit Agreement is amended to delete the word “and” now appearing at the end of clause (h) thereof, to delete the period (“.”) now appearing at the end of clause (i) thereof and to substitute the following therefor:  “; and”, and to insert the following new clause (j) at the end thereof:  
“(j)    the Permitted UGI Marcellus Contribution Transaction.”
(g)    Section 6.06 to the Credit Agreement is amended to delete the word “and” now appearing at the end of clause (c) thereof and to substitute a comma (“,”) therefor, and to insert the following immediately prior to the period (“.”) now appearing at the end of clause (d) thereof:  
“and (e) the Permitted Conversion Transaction.”
(h)    Clause (iii)(A) of Section 6.08 to the Credit Agreement is amended and restated in its entirety as follows:  
“(A) restrictions or conditions imposed by the Novus Operating Agreement (as in effect on the Amendment No. 1 Effective Date) or any other agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness”
(i)    Section 9.04(a) to the Credit Agreement is amended to insert the following at the beginning of clause (i) thereof:  “other than pursuant to the Permitted Conversion Transaction”. 
2.    Conditions of Effectiveness.  The effectiveness of this Amendment on the Amendment No. 1 Effective Date is subject to the conditions precedent that the Administrative Agent shall have received (i) counterparts of (A) this Amendment duly executed by the Borrower, the Lenders and the Administrative Agent and (B) a Reaffirmation in the form of Attachment A attached hereto duly executed by the Subsidiary Guarantors, (ii) payment and/or reimbursement of the Administrative Agent’s reasonable and documented out-of-pocket expenses (including, to the extent invoiced, the reasonable fees and expenses of counsel for the Administrative Agent) in connection with this Amendment and (iii) such other documents, instruments and agreements as the Administrative Agent may reasonably request.
3.    Representations and Warranties of the Borrower.  The Borrower hereby represents and warrants as follows:
(a)    This Amendment and the Credit Agreement as modified hereby constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b)    As of the date hereof and after giving effect to the terms of this Amendment, (i) no Default or Event of Default has occurred and is continuing and (ii) the representations and warranties contained in Article III of the Credit Agreement, as amended hereby, are true and correct in all material respects (except that any such representations and warranties specifically which are already qualified as to materiality or by reference to Material Adverse Effect shall be treated as correct in all respects).
4.    Reference to and Effect on the Credit Agreement.
(a)    Upon the effectiveness hereof, each reference in the Credit Agreement (including any reference to “this Agreement,” “hereunder,” “herein” or words of like import referring thereto) or in any other Loan Document shall mean and be a reference to the Credit Agreement as amended hereby.
(b)    Except as specifically amended above, each Loan Document and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.
(c)    Except with respect to the subject matter hereof, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement, the Loan Documents or any other documents, instruments and agreements executed and/or delivered in connection therewith.
5.    Governing Law.  This Amendment shall be construed in accordance with and governed by the laws of the State of New York.
6.    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
7.    Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Signatures delivered by facsimile or PDF shall have the same force and effect as manual signatures delivered in person.
[Signature Pages Follow]

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

UGI ENERGY SERVICES, INC.,
as the Borrower

By:  /s/ Hugh J. Gallagher__________________ 
Name:    Hugh J. Gallagher
Title:    Treasurer

JPMORGAN CHASE BANK, N.A.,
individually as a Lender and as the Administrative Agent

By:  /s/ Helen D. Davis    _______________________
Name:  Helen D. Davis
Title:    Vice President

PNC Bank, National Association,
as a Lender

By:  /s/ Meredith Jermann__________________
Name:  Meredith Jermann
Title:    Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender

By:  /s/ Frederick W. Price__________________
Name:  Frederick W. Price
Title:    Managing Director

CREDIT SUISSE AG, Cayman Islands Branch,
as a Lender

By:  /s/ Bill O’Daly__________________
Name:  Bill O’Daly
Title:    Director

By:  /s/ Michael Spaight_______________
Name:  Michael Spaight
Title:    Associate

Citizens Bank of Pennsylvania,
as a Lender

By:  /s/ Leslie D. Broderick_____________
Name:  Leslie D. Broderick
Title:    Senior Vice President

DEUTSCHE BANK AG NEW YORK BRANCH,
as a Lender

By:  /s/ Ming K. Chu_____________
Name:  Ming K. Chu
Title:    Vice President

By:  /s/ Virginia Cosenza_____________
Name:  Virginia Cosenza
Title:    Vice President

ATTACHMENT A

REAFFIRMATION

Each of the undersigned hereby acknowledges receipt of a copy of Amendment No. 1 to the Amended and Restated Credit Agreement dated as of December 18, 2012 by and among UGI Energy Services, Inc. (the “Borrower”), the financial institutions from time to time parties thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), which Amendment No. 1 is dated as of March 15, 2013 (the “Amendment”).  Capitalized terms used in this Reaffirmation and not defined herein shall have the meanings given to them in the Credit Agreement.  

The undersigned reaffirms the terms and conditions of the Subsidiary Guaranty and any other Loan Document executed by it and acknowledges and agrees that such agreement and each and every such Loan Document executed by the undersigned in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.  All references to the Credit Agreement contained in the above-referenced documents shall be a reference to the Credit Agreement as so modified by the Amendment and as the same may from time to time hereafter be amended, modified or restated.

Dated:  March 15, 2013

UGI ASSET MANAGEMENT, INC.

By:  ________________________        
Name:  
Title:  

HELLERTOWN PIPELINE COMPANY

By:  ________________________        
Name:  
Title:  

HOMESTEAD HOLDING COMPANY

By:  ________________________        
Name:  
Title:  

UGI LNG, INC.

By:  ________________________        
Name:  
Title:  

UGI STORAGE COMPANY

By:  ________________________        
Name:  
Title:  

UGI DEVELOPMENT COMPANY

By:  ________________________        
Name:  
Title:  

UGID HOLDING COMPANY

By:  ________________________        
Name:  
Title:  

UGI HUNLOCK DEVELOPMENT COMPANY

By:  ________________________        
Name:  
Title:  

1UGI Corp Q2 3.31.2013 Ex 10.4

EXHIBIT 10.4
UGI Employees
UGI CORPORATION 
2013 OMNIBUS INCENTIVE COMPENSATION PLAN 
PERFORMANCE UNIT GRANT LETTER
This PERFORMANCE UNIT GRANT, dated January 24, 2013 (the “Date of Grant”), is delivered by UGI Corporation (“UGI”) to _______________________ (the “Participant”).
RECITALS
The UGI Corporation 2013 Omnibus Incentive 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 a target award of __________ Performance Units (the “Target Award”).  The Performance Units are contingently awarded and will be earned and payable if and to the extent that the Performance Goals (defined below) and other conditions of the Grant Letter are met.  The Performance Units are granted with Dividend Equivalents (as defined in Section 7).
2.    Performance Goals.
(a)    The Participant shall earn the right to payment of the Performance Units if the Performance Goals are met for the Performance Period, and if the Participant continues to be employed by, or provide service to, the Company (as defined in Section 7) through December 31, 2015.  The Performance Period is the period beginning January 1, 2013 and ending December 31, 2015.  The Total Shareholder Return (“TSR”) goals and other requirements of this Section 2 are referred to as the “Performance Goals.”
(b)    The Target Award level of Performance Units and Dividend Equivalents will be payable if UGI’s TSR equals the median TSR of the comparison group designated by the Committee (the “Peer Group”) for the Performance Period.  The Peer Group is the group of companies that comprises the Russell Midcap Utilities Index, excluding telecommunications companies, as of the beginning of the Performance Period, as set forth on the attached Exhibit A, and as described herein.  If a company is added to the Russell Midcap Utilities Index during the Performance Period, that company is not included in the TSR calculation.  A company that is included in the Russell Midcap Utilities Index at the beginning of the Performance Period will be 

removed from the TSR calculation only if the company ceases to exist as a publicly traded company during the Performance Period (including by way of a merger or similar transaction in which the company is not the surviving company), consistent with the methodology described in subsection (c) below.  Companies that are designated at the beginning of the Performance Period as telecommunications companies in the Russell Midcap Utilities Index shall be excluded from the TSR calculation.  The actual amount of the award of Performance Units may be higher or lower than the Target Award, or it may be zero, based on UGI’s TSR percentile rank relative to the companies in the Peer Group, as follows:
UGI’s TSR Rank                Percentage of Target Award Earned 
                                   (Percentile)
90th                        200%
75th                        162.5%
60th                        125%
50th                        100%
40th                           70%
25th                           25%
Less than 25th                         0%

The 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 Performance Period will be the average price for the calendar quarter preceding the beginning of the Performance Period (i.e., the calendar quarter ending on December 31, 2012) and the calendar quarter ending on the last day of the Performance Period (i.e., the calendar quarter ending on December 31, 2015), respectively.  The TSR calculation gives effect to all dividends throughout the three-year Performance Period as if they had been reinvested.  
(d)    The Target Award 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 percentile rank exceeds the 50th TSR percentile rank, according to the foregoing schedule.
(e)    At the end of the Performance 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 Sections 3 and 6 below, the Participant must be employed by, or providing service to, the Company on December 31, 2015 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 ceases to be employed by, or provide services to, the Company before December 31, 2015, the Performance Units and all Dividend Equivalents credited under this Grant Letter will be forfeited.  

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(b)    If the Participant terminates employment or service on account of Retirement (as defined in Section 7), Disability (as defined in Section 7) 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 Performance Period, based on achievement of the Performance Goals, multiplied by a fraction, the numerator of which is the number of calendar years during the Performance 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.  
(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 Performance Period, pursuant to Section 4 below, except as provided in Section 6.
4.    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 (i) Shares equal to the number of Performance Units to be paid according to achievement of the Performance Goals, up to the 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, subject to applicable tax withholding.  Payment shall be made between January 1, 2016 and March 15, 2016, except as provided in Section 6 below.
5.    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 of Dividend Equivalents 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 percentile rank for the Performance Period.  The Participant can earn up to 200% of the target 

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amount of Dividend Equivalents if UGI’s TSR percentile rank exceeds the 50th TSR rank, according to the schedule in Section 2 above.  Except as described in Section 3(b) above, or Section 6, if the Participant’s employment or service with the Company terminates before December 31, 2015, 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.  
6.    Change of Control.  
(a)    If a Change of Control (as defined in the Plan) occurs, the Performance Units and Dividend Equivalents shall not automatically become payable upon the Change of Control, but, instead, shall become payable as described in this Section 6.  The Committee may take such other actions with respect to the Performance Units and Dividend Equivalents as it deems appropriate pursuant to the Plan.
(b)    If a Change of Control occurs during the Performance Period, the Committee shall calculate a Change of Control Amount as follows:  
(i)    The Performance Period shall end as of the closing date of the Change of Control (the “Change of Control Date”) and the TSR ending date calculation for the Performance Period shall be based on the 90 calendar day period ending on the Change of Control Date.  
(ii)    The Committee shall calculate a “Change of Control Amount” equal to the greater of (i) the Target Award amount or (ii) the amount of Performance Units that would be payable based on the Company’s achievement of the Performance Goals as of the Change of Control Date, as determined by the Committee.  The Change of Control Amount shall include related Dividend Equivalents and, if applicable, interest as described below.
(iii)    The Committee shall determine whether the Change of Control Amount attributable to Performance Units shall be (A) converted to units with respect to shares or other equity interests of the acquiring company or its parent (“Successor Units”), in which case Dividend Equivalents shall continue to be credited on the Successor Units, or (B) valued based on the Fair Market Value of the Performance Units as of the Change of Control Date and credited to a bookkeeping account for the Participant, in which case interest shall be credited on the amount so determined at a market rate for the period between the Change of Control Date and the applicable payment date.  Notwithstanding the provisions of Section 4, all payments on and after a Change of Control shall be made in cash.  If alternative (A) above is used, the cash payment shall equal the Fair Market Value on the date of payment of the number of shares or other equity interests underlying 

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the Successor Units, plus accrued Dividend Equivalents.  All payments shall be subject to applicable tax withholding.  
(c)    If a Change of Control occurs during the Performance Period and the Participant continues in employment or service through December 31, 2015, the Change of Control Amount shall be paid in cash between January 1, 2016 and March 15, 2016.
(d)    If a Change of Control occurs during the Performance Period, and the Participant has a Termination without Cause or a Good Reason Termination upon or within two years after the Change of Control Date and before December 31, 2015, the Change of Control Amount shall be paid in cash within 30 days after the Participant’s separation from service, subject to Section 13 below.
(e)    If a Change of Control occurs during the Performance Period, and the Participant terminates employment or service on account of Retirement, Disability or death upon or after the Change of Control Date and before December 31, 2015, the Change of Control Amount shall be paid in cash within 30 days after the Participant’s separation from service, subject to Section 13 below; provided that, if required by section 409A, if the Participant’s Retirement, Disability or death occurs more than two years after the Change of Control Date, payment will be made between January 1, 2016 and March 15, 2016, and not upon the earlier separation from service.  
(f)    If a Participant’s employment or service terminates on account of Retirement, death or Disability before a Change of Control, and a Change of Control subsequently occurs before the end of the Performance Period, the prorated amount in Section 3(b) shall be calculated by multiplying the fraction described in Section 3(b) by the Change of Control Amount.  The prorated Change of Control Amount shall be paid in cash within 30 days after the Change of Control Date, subject to Section 13 below.
7.    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.  The Participant shall not be considered to have a termination of employment or service under this Grant Letter until the Participant is no longer employed by, or performing services for, the Company.

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(e)    “Good Reason Termination” shall mean a termination of employment or service initiated by the Participant upon or after a Change of Control upon one or more of the following events:
(i)    a material diminution in the authority, duties or responsibilities held by the Participant immediately prior to the Change of Control;
(ii)    a material diminution in the Participant’s base salary as in effect immediately prior to the Change of Control; or 
(iii)    a material change in the geographic location at which the Participant must perform services (which, for purposes of this Agreement, means the Participant is required to report, other than on a temporary basis (less than 12 months), to a location which is more than 50 miles from the Participant’s principal place of business immediately before the Change of Control, without the Participant’s express written consent).
Notwithstanding the foregoing, the Participant shall be considered to have a Good Reason Termination only if the Participant provides written notice to the Company, pursuant to Section 15, specifying in reasonable detail the events or conditions upon which the Participant is basing such Good Reason Termination and the Participant provides such notice within 90 days after the event that gives rise to the Good Reason Termination.  Within 30 days after notice has been provided, the Company shall have the opportunity, but shall have no obligation, to cure such events or conditions that give rise to the Good Reason Termination.  If the Company does not cure such events or conditions within the 30-day period, the Participant may terminate employment or service with the Company based on Good Reason Termination within 30 days after the expiration of the cure period.    
Notwithstanding the foregoing, if the Participant has in effect a Change in Control Agreement with the Company or an Affiliate, the term “Good Reason Termination” shall have the meaning given that term in the Change in Control Agreement.
(f)    “Performance Unit” means a hypothetical unit that represents the value of one share of UGI common stock.
(g)    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 or service after attaining (i) age 55 with ten or more years of service with the Company or (ii) age 65 with five or more years of service with the Company.
(h)    “Termination without Cause” means termination of employment or service by the Company for the convenience of the Company for any reason other than (i) misappropriation of funds, (ii) habitual insobriety or substance abuse adversely affecting the performance of duties, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance 

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of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company.
8.    Withholding.  All payments under this Grant Letter are subject to applicable tax 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 (including FICA), state, local or other taxes that the Company is required to withhold with respect to the payments under this Grant Letter.  The Company may withhold from cash distributions to cover required tax withholding, or may withhold Shares to cover required tax withholding in an amount equal to the minimum applicable tax withholding amount. 
9.    Grant Subject to Plan Provisions and Company Policies.  
(a)    This grant is made pursuant to the Plan, which is 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) adjustments pursuant to Section 5(d) of the Plan, 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.
(b)    This Performance Unit grant and Shares issued pursuant to this Performance Unit grant shall be subject to the UGI Corporation Stock Ownership Policy as adopted by the Board of Directors of UGI and any applicable clawback and other policies implemented by the Board of Directors of UGI, as in effect from time to time.
10.    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.
11.    No Shareholder Rights.  Neither the Participant, nor any person entitled to receive payment 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 distributed to the Participant or successor.
12.    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.  

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13.    Compliance with Code Section 409A.  Notwithstanding the other provisions hereof, this Grant Letter is intended to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended, or an exception, and shall be administered accordingly.    Any reference to a Participant’s termination of employment shall mean a Participant’s “separation from service,” as such term is defined under section 409A.  For purposes of section 409A, each payment of compensation under this Grant Letter shall be treated as a separate payment. Notwithstanding anything in this Grant Letter to the contrary, if the Participant is a “key employee” under section 409A and if payment of any amount under this Grant Letter is required to be delayed for a period of six months after separation from service pursuant to section 409A, payment of such amount shall be delayed as required by section 409A and shall be paid within 10 days after the end of the six-month period.  If the Participant dies during such six-month period, the amounts withheld on account of section 409A shall be paid to the personal representative of the Participant’s estate within 60 days after the date of the Participant’s death.  Notwithstanding anything in this Grant Letter to the contrary, if a Change of Control is not a “change in control event” under section 409A, any Performance Units and Dividend Equivalents that are payable pursuant to Section 6 shall be paid to the Participant between January 1, 2016 and March 15, 2016, and not upon the earlier separation from service, if required by section 409A.  
14.    Applicable Law.  The validity, construction, interpretation and effect of this Grant Letter 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 Grant Letter 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.
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:                         

I hereby acknowledge receipt of the Plan incorporated herein.  I accept the Performance Units described in this Grant Letter, and I agree to be bound by the terms of the Plan, and this Grant 

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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

EXHIBIT A

UGI CORPORATION
PERFORMANCE UNIT PEER GROUP

RUSSELL MIDCAP UTILITIES
(EXCLUDING TELECOMS)
as of 1/1/2013

AES Corp. (AES)
AGL Resources (AGL)
Alliant Energy (LNT)
Ameren Corporation (AEE)
American Water Works (AWK)
Aqua America Inc. (WTR)
Atmos Energy (ATO)
Calpine Corp. (CPN)
Centerpoint Energy (CNP)
CMS Energy Corp. (CMS)
DTE Energy Co. (DTE)
Edison International (EIX)
Energen Corp. (EGN)
Entergy Corp (ETR)
Great Plains Energy (GXP)
Hawaiian Electric (HE)
Integrys Energy (TEG)
ITC Holdings Corp. (ITC)
MDU Resource Group (MDU)

National Fuel Gas Co. (NFG)
NiSource Inc. (NI)
Northeast Utilities (NU)
NRG Energy (NRG)
NV Energy Inc. (NVE)
OGE Energy Corp. (OGE)
ONEOK Inc. (OKE)
Pepco Holdings (POM)
Pinnacle West Capital Corp. (PNW)
PPL Corporation (PPL)
Questar Corp. (STR)
Scana Corp. (SCG)
Sempra Energy (SRE)
Teco Energy Inc. (TE)
UGI Corporation (UGI)
Vectren Corp. (VVC)
Westar Energy, Inc. (WR)
Wisconsin Energy (WEC)
XCEL Energy Inc. (XEL)

9

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