Document:

EX 4(c)3

Exhibit 4(c)3

ALLETE, Inc.
(formerly Minnesota Power & Light Company
and formerly Minnesota Power, Inc.)

TO

THE BANK OF NEW YORK MELLON
(formerly The Bank of New York 
(formerly Irving Trust Company))

AND

PHILIP L. WATSON

(successor to Richard H. West, J. A. Austin, E. J. McCabe, D. W. May, 
J. A. Vaughan, W. T. Cunningham, Douglas J. MacInnes, and Ming Ryan)

As Trustees under ALLETE, Inc.'s Mortgage and Deed of Trust dated as of September 1, 1945
___________________________________________

_____________ Supplemental Indenture
Providing, among other things, for
First Mortgage Bonds, ____% Series due ________________
(___________ Series)

Dated as of ______________

________________________ SUPPLEMENTAL INDENTURE

THIS INDENTURE, dated as of ______________, by and between ALLETE, Inc. (formerly Minnesota Power & Light Company and formerly Minnesota Power, Inc.), a corporation of the State of Minnesota, whose post office address is 30 West Superior Street, Duluth, Minnesota 55802 (hereinafter sometimes called the “Company”), and The Bank of New York Mellon (formerly The Bank of New York (formerly Irving Trust Company)), a corporation of the State of New York, whose post office address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes called the “Corporate Trustee”), and Philip L. Watson (successor to Richard H. West, J. A. Austin, E. J. McCabe, D. W. May, J. A. Vaughan, W. T. Cunningham, Douglas J. MacInnes, and Ming Ryan), whose post office address is c/o The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286 (said Philip L. Watson being hereinafter sometimes called the “Co-Trustee” and the Corporate Trustee and the Co-Trustee being hereinafter together sometimes called the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of September 1, 1945, between the Company and Irving Trust Company and Richard H. West, as Trustees, securing bonds issued and to be issued as provided therein (hereinafter sometimes called the “Mortgage”), reference to which Mortgage is hereby made, this indenture (hereinafter sometimes called the “_____________ Supplemental Indenture”) being supplemental thereto:

WHEREAS, the Mortgage was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of October 16, 1957, was executed and delivered under which J. A. Austin succeeded Richard H. West as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of April 4, 1967, was executed and delivered under which E. J. McCabe in turn succeeded J. A. Austin as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, under the Sixth Supplemental Indenture, dated as of August 1, 1975, to which reference is hereinafter made, D. W. May in turn succeeded E. J. McCabe as Co-Trustee under the Mortgage; and

WHEREAS, an instrument, dated as of June 25, 1984, was executed and delivered under which J. A. Vaughan in turn succeeded D. W. May as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of July 27, 1988, was executed and delivered under which W. T. Cunningham in turn succeeded J. A. Vaughan as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, on May 12, 1998, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Minnesota changing its name from Minnesota Power & Light Company to Minnesota Power, Inc. effective May 27, 1998; and

WHEREAS, an instrument, dated as of April 15, 1999, was executed and delivered under which Douglas J. MacInnes in turn succeeded W. T. Cunningham as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

1

WHEREAS, on May 8, 2001, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Minnesota changing its name from Minnesota Power, Inc. to ALLETE, Inc.; and

WHEREAS, under the Thirty-second Supplemental Indenture, dated as of August 1, 2010, to which reference is hereinafter made, Ming Ryan in turn succeeded Douglas J. MacInnes as Co-Trustee under the Mortgage; and

WHEREAS, an instrument, dated as of August 1, 2012, was executed and delivered under which Philip L. Watson in turn succeeded Ming Ryan as Co-Trustee under the Mortgage effective at the close of business on August 6, 2012, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, by the Mortgage the Company covenanted, among other things, that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Mortgage and to make subject to the lien of the Mortgage any property thereafter acquired and intended to be subject to the lien thereof; and

WHEREAS, for said purposes, among others, the Company executed and delivered the following indentures supplemental to the Mortgage:
	
		
	Designation
	Dated as of

	First Supplemental Indenture
	March 1, 1949

	Second Supplemental Indenture
	July 1, 1951

	Third Supplemental Indenture
	March 1, 1957

	Fourth Supplemental Indenture
	January 1, 1968

	Fifth Supplemental Indenture
	April 1, 1971

	Sixth Supplemental Indenture
	August 1, 1975

	Seventh Supplemental Indenture
	September 1, 1976

	Eighth Supplemental Indenture
	September 1, 1977

	Ninth Supplemental Indenture
	April 1, 1978

	Tenth Supplemental Indenture
	August 1, 1978

	Eleventh Supplemental Indenture
	December 1, 1982

	Twelfth Supplemental Indenture
	April 1, 1987

	Thirteenth Supplemental Indenture
	March 1, 1992

	Fourteenth Supplemental Indenture
	June 1, 1992

	Fifteenth Supplemental Indenture
	July 1, 1992

	Sixteenth Supplemental Indenture
	July 1, 1992

	Seventeenth Supplemental Indenture
	February 1, 1993

	Eighteenth Supplemental Indenture
	July 1, 1993

	Nineteenth Supplemental Indenture
	February 1, 1997

	Twentieth Supplemental Indenture
	November 1, 1997

	Twenty‐first Supplemental Indenture
	October 1, 2000

	Twenty-second Supplemental Indenture
	July 1, 2003

	Twenty-third Supplemental Indenture
	August 1, 2004

	Twenty-fourth Supplemental Indenture
	March 1, 2005

	Twenty-fifth Supplemental Indenture
	December 1, 2005

	Twenty-sixth Supplemental Indenture
	October 1, 2006

	Twenty-seventh Supplemental Indenture
	February 1, 2008

2

	
		
	Designation
	Dated as of

	Twenty-eighth Supplemental Indenture
	May 1, 2008

	Twenty-ninth Supplemental Indenture
	November 1, 2008

	Thirtieth Supplemental Indenture
	January 1, 2009

	Thirty-first Supplemental Indenture
	February 1, 2010

	Thirty-second Supplemental Indenture
	August 1, 2010

	Thirty-third Supplemental Indenture
	July 1, 2012

	Thirty-fourth Supplemental Indenture
	April 1, 2013

	*
	 

which supplemental indentures were filed and recorded in various official records in the State of Minnesota; and

WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Mortgage, as heretofore supplemented, the following series of First Mortgage Bonds:
	
				
	Series
	Principal
Amount
  Issued  
	Principal
Amount
Outstanding

	3-1/8% Series due 1975
	$26,000,000
	None

	3-1/8% Series due 1979
	4,000,000
	

	None

	3-5/8% Series due 1981
	10,000,000
	

	None

	4-3/4% Series due 1987
	12,000,000
	

	None

	6-1/2% Series due 1998
	18,000,000
	

	None

	8-1/8% Series due 2001
	23,000,000
	

	None

	10-1/2% Series due 2005
	35,000,000
	

	None

	8.70% Series due 2006
	35,000,000
	

	None

	8.35% Series due 2007
	50,000,000
	

	None

	9-1/4% Series due 2008
	50,000,000
	

	None

	Pollution Control Series A
	111,000,000
	

	None

	Industrial Development Series A
	2,500,000
	

	None

	Industrial Development Series B
	1,800,000
	

	None

	Industrial Development Series C
	1,150,000
	

	None

	Pollution Control Series B
	13,500,000
	

	None

	Pollution Control Series C
	2,000,000
	

	None

	Pollution Control Series D
	3,600,000
	

	None

	7-3/4% Series due 1994
	55,000,000
	

	None

	7-3/8% Series due March 1, 1997
	60,000,000
	

	None

	7-3/4% Series due June 1, 2007
	55,000,000
	

	None

	7-1/2% Series due August 1, 2007
	35,000,000
	

	None

	Pollution Control Series E
	111,000,000
	

	None

	7% Series due March 1, 2008
	50,000,000
	

	None

	6-1/4% Series due July 1, 2003
	25,000,000
	

	None

	7% Series due February 15, 2007
	60,000,000
	

	None

	6.68% Series due November 15, 2007
	20,000,000
	

	None

	Floating Rate Series due October 20, 2003
	250,000,000
	

	None

* Here will be inserted additional executed Supplemental Indentures.

3

	
				
	Series
	Principal
Amount
  Issued  
	Principal
Amount
Outstanding

	Collateral Series A
	255,000,000
	

	None

	Pollution Control Series F
	111,000,000
	

	111,000,000

	5.28% Series due August 1, 2020
	35,000,000
	

	35,000,000

	5.69% Series due March 1, 2036
	50,000,000
	

	50,000,000

	5.99% Series due February 1, 2027
	60,000,000
	

	60,000,000

	4.86% Series due April 1, 2013
	60,000,000
	

	 None

	6.02% Series due May 1, 2023
	75,000,000
	

	75,000,000

	6.94% Series due January 15, 2014
	18,000,000
	

	18,000,000

	7.70% Series due January 15, 2016
	20,000,000
	

	20,000,000

	8.17% Series due January 15, 2019
	42,000,000
	

	42,000,000

	4.85% Series due April 15, 2021
	15,000,000
	

	15,000,000

	5.10% Series due April 15, 2025
	30,000,000
	

	30,000,000

	6.00% Series due April 15, 2040
	35,000,000
	

	35,000,000

	4.90% Series due October 15, 2025
	30,000,000
	

	30,000,000

	5.82% Series due April 15, 2040
	45,000,000
	

	45,000,000

	3.20% Series due July 15, 2026
	75,000,000
	

	75,000,000

	4.08% Series due July 15, 2042
	85,000,000
	

	85,000,000

	1.83% Series due April 15, 2018
	50,000,000
	

	50,000,000

	3.30% Series due October 15, 2028
	40,000,000
	

	40,000,000

	4.21% Series due October 15, 2043
	60,000,000
	

	60,000,000

	*
	 
	 

which bonds are also hereinafter sometimes called bonds of the First through ________** Series, respectively; and

WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than the First Series) issued thereunder and of coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and

WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may (to the extent permitted by law) be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in any supplemental indenture, or may establish the terms and provisions of any series of bonds (other than said First Series) by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the lien of the Mortgage shall be situated; and

* Here will be inserted additional outstanding series.
**  Here will be inserted the most recent outstanding series.

4

WHEREAS, the Company now desires to create ____ new series of bonds and (pursuant to the provisions of Section 120 of the Mortgage) to add to its covenants and agreements contained in the Mortgage, as heretofore supplemented, certain other covenants and agreements to be observed by it and to alter and amend in certain respects the covenants and provisions contained in the Mortgage, as heretofore supplemented; and

WHEREAS, the execution and delivery by the Company of this _____________ Supplemental Indenture, and the terms of the bonds of the ___________ Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate resolutions of said Board of Directors;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That the Company, in consideration of the premises and of One Dollar to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Mortgage, as heretofore supplemented, according to their tenor and effect and the performance of all the provisions of the Mortgage (including any instruments supplemental thereto and any modification made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances) unto The Bank of New York Mellon and Philip L. Watson, as Trustees under the Mortgage, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all property, real, personal and mixed, of the kind or nature specifically mentioned in the Mortgage, as heretofore supplemented, or of any other kind or nature acquired by the Company after the date of the execution and delivery of the Mortgage, as heretofore supplemented (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of subsection (I) of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this ____________ Supplemental Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all municipal and other franchises, consents or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described.

5

TOGETHER WITH all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.

IT IS HEREBY AGREED by the Company that, subject to the provisions of subsection (I) of Section 87 of the Mortgage, all the property, rights, and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) after the date hereof, except any herein or in the Mortgage, as heretofore supplemented, expressly excepted, shall be and are as fully granted and conveyed hereby and by the Mortgage and as fully embraced within the lien hereof and the lien of the Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein or in the Mortgage and conveyed hereby or thereby.

PROVIDED that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of this _____________ Supplemental Indenture and from the lien and operation of the Mortgage, namely:  (1) cash, shares of stock, bonds, notes and other obligations and other securities not hereafter specifically pledged, paid, deposited, delivered or held under the Mortgage or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business; fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; all aircraft, rolling stock, trolley coaches, buses, motor coaches, automobiles and other vehicles and materials and supplies held for the purpose of repairing or replacing (in whole or part) any of the same; all timber, minerals, mineral rights and royalties; (3) bills, notes and accounts receivable, judgments, demands and choses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; the Company's contractual rights or other interest in or with respect to tires not owned by the Company; (4) the last day of the term of any lease or leasehold which may hereafter become subject to the lien of the Mortgage; (5) electric energy, gas, steam, ice, and other materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; and (6) the Company's franchise to be a corporation; provided, however, that the property and rights expressly excepted from the lien and operation of this _____________ Supplemental Indenture and from the lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof.

TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto the Trustees and their successors and assigns forever.

IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as supplemented, this _____________ Supplemental Indenture being supplemental thereto.

6

AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as heretofore supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors in the trust in the same manner and with the same effect as if said property had been owned by the Company at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to said Trustees by the Mortgage as a part of the property therein stated to be conveyed.

The Company further covenants and agrees to and with the Trustees and their successors in said trust under the Mortgage as follows:

ARTICLE I
___________ Series of Bonds

SECTION 1.  There shall be a series of bonds designated “____% Series due ________________” (herein sometimes referred to as the “___________ Series”), each of which shall also bear the descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter in this Section specified.  Bonds of the ___________ Series shall be dated as in Section 10 of the Mortgage provided, mature on ________________, be issued as fully registered bonds in denominations of One Thousand Dollars and, at the option of the Company, in any multiple or multiples of One Thousand Dollars (the exercise of such option to be evidenced by the execution and delivery thereof) and bear interest from ____________ (computed on the basis of a 360-day year of twelve thirty-day months) [at the rate of ____% per annum, payable semi-annually on ________ and __________ of each year]*, commencing ______________, the principal of and interest on each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
    
Any payment of principal of or interest on any bond of the ___________ Series that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any such bond of the ___________ Series is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

[Redemption provisions, if any, will be inserted here.]

(I)    At the option of the registered owner, any bonds of the ___________ Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, together with a written instrument of transfer wherever required by the Company duly executed by the registered owner or by his duly authorized attorney, shall (subject to the provisions of Section 12 of the Mortgage) be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

*Bracketed material to be changed if bonds of the Series to which this Supplemental Indenture shall relate shall bear interest at a rate which may be changed during the life of such bonds or if such bonds shall bear interest payable other than semi-annually.

7

Bonds of the ___________ Series shall be transferable (subject to the provisions of Section 12 of the Mortgage) at the office or agency of the Company in the Borough of Manhattan, The City of New York.  The Company shall not be required to make transfers or exchanges of bonds of the ___________________ Series for a period of ten (10) days next preceding any designation of bonds of said series to be prepaid, and the Company shall not be required to make transfers or exchanges of any bonds of said series designated in whole or in part for prepayment.  

Upon any exchange or transfer of bonds of the ___________ Series, the Company may make a charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge, as provided in Section 12 of the Mortgage, but the Company hereby waives any right to make a charge in addition thereto for any exchange or transfer of bonds of the ___________ Series.

After the delivery of this ___________ Supplemental Indenture and upon compliance with the applicable provisions of the Mortgage and receipt of consideration therefor by the Company, there shall be an initial issue of bonds of the ___________ Series for the aggregate principal amount of $__________.

[ARTICLE II
Amendment to the Mortgage
Nuclear Fuel

SECTION 1.  Pursuant to the reservation of right in Section 2 of the Fifth Supplemental Indenture dated as of April 1, 1971, the Company hereby amends the Mortgage, as supplemented, as set forth in paragraphs (A), (B) and (C) of Section 2 of such Fifth Supplemental Indenture (relating to Nuclear Fuel).]*

ARTICLE III
Consent to Amendments

SECTION 1.  Consent to Amendments  Each initial and future holder of bonds of the ___________ Series, by its acquisition of an interest in such bonds, irrevocably (a) consents to the amendments set forth in Article IV of the Thirty-first Supplemental Indenture, dated as of February 1, 2010, without any other or further action by any holder of such bonds, and (b) designates the Corporate Trustee, and its successors, as its proxy with irrevocable instructions to vote and deliver written consents on behalf of such holder in favor of such amendments at any bondholder meeting, in lieu of any bondholder meeting, in any consent solicitation or otherwise.

*The Company may insert the bracketed language in any one Supplemental Indenture.  

8

ARTICLE IV
Reservation of Right to Amend Sections 35(a) and 101 of the Mortgage

SECTION 1.  The Company reserves the right, without any vote, consent or other action by the holders of bonds of the _______________ Series or any subsequent series, to amend the Mortgage, as herein or heretofore supplemented as follows:

(A) By deleting from Section 35(a) the phrase “having its principal office and place of business in the Borough of Manhattan, The City of New York” and the word “such” at the location in said Section 35(a) at which such word first appears.

(B) By adding the following at the end of the first sentence of Section 101:
“; provided however, that if all of the bonds at that time Outstanding are registered as to principal and interest or as to principal only, such notice shall be sufficiently given if mailed, postage prepaid to each such registered owner of bonds at his/her last address appearing on the registry books, on or before the date of on which the first publication of such notice would otherwise have been required.”

ARTICLE V
Miscellaneous Provisions

SECTION [1].  Section 126 of the Mortgage, as heretofore amended, is hereby further amended by adding the words “and ________________,”*  after the words “and ______________.”**  

SECTION [2]. Subject to the amendments provided for in this _____________ Supplemental Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this _____________ Supplemental Indenture, have the meanings specified in the Mortgage, as heretofore supplemented.

SECTION [3]. The holders of bonds of the ___________ Series consent that the Company may, but shall not be obligated to, fix a record date for the purpose of determining the holders of bonds of the ___________ Series entitled to consent to any amendment, supplement or waiver.  If a record date is fixed, those persons who were holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be holders after such record date.  No such consent shall be valid or effective for more than 90 days after such record date.

SECTION [4]. The Trustees hereby accept the trusts herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Mortgage set forth and upon the following terms and conditions:

*Here will be inserted the maturity date of the most recent series of bonds.
**Here will be inserted the maturity date of the series of bonds issued immediately before the most recent series of bonds.

9

The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this _____________ Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.  In general, each and every term and condition contained in Article XVII of the Mortgage shall apply to and form part of this _____________ Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this _____________ Supplemental Indenture.

SECTION [5]. Whenever in this ______________ Supplemental Indenture any party hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, as heretofore supplemented, be deemed to include the successors or assigns of such party, and all the covenants and agreements in this _____________ Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustees shall, subject as aforesaid, bind and inure to the benefit of the respective successors and assigns of such party whether so expressed or not.

SECTION [6].  Nothing in this _____________ Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Mortgage, any right, remedy, or claim under or by reason of this _____________ Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this _____________ Supplemental Indenture contained by and on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and of the coupons Outstanding under the Mortgage.

SECTION [7]. This _____________ Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION [8]. The Company, the mortgagor named herein, by its execution hereof acknowledges receipt of a full, true and complete copy of this _____________ Supplemental Indenture.

10

IN WITNESS WHEREOF, ALLETE, Inc. has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President, one of its Vice Presidents, or its Treasurer, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries for and in its behalf, all in the City of Duluth, Minnesota, and The Bank of New York Mellon has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or one of its Assistant Vice Presidents and its corporate seal to be attested by one of its Assistant Treasurers, one of its Vice Presidents or one of its Assistant Vice Presidents, and Philip L. Watson has hereunto set his hand and affixed his seal, all in The City of New York, as of the day and year first above written.

ALLETE, Inc.

By    	
	
	 

[Name]
[Title]

Attest:
	
	
	 

[Name]
[Title] 
            
                
Executed, sealed and delivered by ALLETE, Inc.
in the presence of:
	
	
	 

	 

Trustees' Signature Page Follows

11

THE BANK OF NEW YORK MELLON,
as Trustee
By  	
	
	 

[Name] 
[Title]
Attest:
	
	
	 

[Name] 
[Title]

    
                            	
	
	L.S.

PHILIP L. WATSON
Executed, sealed and delivered by THE BANK OF NEW
YORK MELLON and PHILIP L. WATSON in the presence of:

	
	
	 

	 

______________ Supplemental Indenture dated as of ______________
To Mortgage and Deed of Trust dated as of September 1, 1945

Trustees' Signature Page

12

STATE OF MINNESOTA    )
) SS:
COUNTY OF ST. LOUIS    )                

On this ______ day of __________, 20____, the foregoing instrument was acknowledged before me by _________________, the ____________________________, of ALLETE, Inc., a Minnesota corporation, on behalf of the Company.

NOTARIAL STAMP OR SEAL                            
                           
                                                                
                                	
	
	 

STATE OF MINNESOTA    )
) SS:
COUNTY OF ST. LOUIS    )
     
On this ______ day of __________, 20____, the foregoing instrument was acknowledged before me by _________________, the ____________________________, of ALLETE, Inc., a Minnesota corporation, on behalf of the Company.

NOTARIAL STAMP OR SEAL                          

                                                                       
                                	
	
	 

13

STATE OF NEW YORK    )
)  SS:
COUNTY OF NEW YORK    )
On this _____ day of ____________, the foregoing instrument was acknowledged before me by ______________ and ________________, respectively a ______________ and a ____________ of The Bank of New York Mellon, the corporation named in the foregoing instrument.
GIVEN under my hand and notarial seal this ___ day of __________________.
      	
	
	 

Notary Public, State of New York

STATE OF NEW YORK    )
 )  SS:
COUNTY OF NEW YORK    )
On this _____ day of ____________, the foregoing instrument was acknowledged before me by Philip L. Watson, the person described in and who executed the foregoing instrument.
GIVEN under my hand and notarial seal this ___ day of __________________.
                        
	
	
	 

Notary Public, State of New York

14Ex. 10.1 6-30-13 UGI Utilities 10Q

        

EXHIBIT 10.1

UGI UTILITIES, INC.
SENIOR EXECUTIVE EMPLOYEE
SEVERANCE PLAN 
As amended as of November 16, 2012

UGI UTILITIES, INC.
SENIOR EXECUTIVE EMPLOYEE
SEVERANCE PLAN
TABLE OF CONTENTS

Page

	
			
	Article I
	Purpose and Term of Plan
	1

	Article II
	Definitions
	2

	Article III
	Participation and Eligibility for Benefits
	6

	Article IV
	Benefits
	8

	Article V
	Method and Duration of Benefit Payments
	11

	Article VI
	Administration
	12

	Article VII
	Amendment and Termination
	14

	Article VIII
	Duties of the Company
	15

	Article IX
	Claims Procedures
	16

	Article X
	Miscellaneous
	18

	Appendix A
	Change in Control
	A-1

	
			
	 
	i

	 

 
ARTICLE I
PURPOSE AND TERM OF PLAN
Section 1.01    Purpose of the Plan.  This Senior Executive Employee Severance Plan is applicable to Executive Employees (as defined below) of UGI Utilities, Inc. and its Affiliates (as defined below).  The Plan is intended to help alleviate financial hardships that may be experienced by Executive Employees whose employment is involuntary terminated.  The Plan is intended to be a “severance pay plan” for purposes of ERISA (as defined below).  The benefits paid by the Plan are not deferred compensation, and no employee shall have a vested right to such benefits.  The Plan has been drafted to give the Company (as defined below) broad discretion in designating individuals who are eligible for benefits and the amount of such benefits.  All actions taken by the Company shall be in its role as the plan sponsor and not as a fiduciary. 
Section 1.02    Term of the Plan.  The Plan has been amended and restated as of November 16, 2012.  The Plan will continue until such time as the Company, acting in its sole discretion, elects to modify, supersede or terminate it in accordance with the further provisions hereof.

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ARTICLE II
DEFINITIONS
Section 2.01    “Administrative Committee” shall mean the administrative committee designated pursuant to Article VI of the Plan to administer the Plan in accordance with its terms, or its delegate. 
Section 2.02    “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.
Section 2.03    “Annual Compensation” shall mean the Participant’s annual base salary and applicable target annual bonus amount (if any) in effect on the Participant’s Employment Termination Date.
Section 2.04    “Benefit” or “Benefits” shall mean any or all of the benefits that a Participant is entitled to receive pursuant to Article IV of the Plan.
Section 2.05    “Board of Directors” shall mean the Board of Directors of the Company, or any successor thereto.
Section 2.06    “Change in Control” shall mean a change of control of the Company or UGI Corporation as defined in the attached Appendix A, as amended from time to time by the Committee, in its discretion.
Section 2.07    “Change in Control Agreement” shall mean a written Change in Control Agreement between an employee and the Company or an Affiliate.
Section 2.08    “Chief Executive Officer” shall mean the individual serving as the Chief Executive Officer of the Company as of the date of reference.
Section 2.09    “COBRA Cost” shall mean the applicable premium under section 4980B(f)(4) of the Code for continued medical and dental COBRA coverage under the benefit plans of the Company or an Affiliate.
Section 2.10    “COBRA Coverage” shall mean continued medical and dental coverage under benefit plans of the Company or an Affiliate, as determined under section 4980B of the Code.
Section 2.11    “Code” shall mean the Internal Revenue Code of 1986, as amended.
Section 2.12    “Company” shall mean UGI Utilities, Inc. and any corporation succeeding to the business of UGI Utilities, Inc. by merger, consolidation, liquidation, purchase of assets or stock or similar transaction.  

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Section 2.13    “Compensation Committee” shall mean the Compensation and Management Development Committee of the Board of Directors.
Section 2.14    “Employment Commencement Date” shall mean the most recent date on which a Participant became an employee of the Company or an Affiliate of the Company or, if the Company determines that service before an acquisition shall be taken into account, the most recent date on which a Participant became an employee of an entity whose business or assets have been acquired by the Company or an Affiliate.
Section 2.15    “Employment Termination Date” shall mean the date on which the Participant separates from service with the Company and its Affiliates within the meaning of section 409A of the Code.
Section 2.16    “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
Section 2.17    “Executive Annual Bonus Plan” shall mean the UGI Utilities, Inc. Executive Annual Bonus Plan as in effect from time to time.
Section 2.18    “Executive Employee” shall mean any of the following employees who are employed in the United States:
(a)    An executive level employee of the Company who participates in the Executive Annual Bonus Plan and who has a Change in Control Agreement in effect with the Company or an Affiliate; or
(b)    An executive level employee of the Company or an Affiliate who is employed in the United States and who is designated in writing by the Compensation Committee as eligible to participate in this Plan.
Notwithstanding the foregoing, if an employee is employed by more than one company within the UGI Corporation controlled group and if the Company is not the employee’s primary employer, the employee shall not be eligible to participate in this Plan, unless otherwise designated in writing by the Compensation Committee.  In no event shall any of the following persons be considered an employee for purposes of the Plan:  (i) employees who are employed outside the United States, (ii) independent contractors, (iii) persons performing services pursuant to an arrangement with a third party leasing organization, (iv) any person whom the Company determines, in its sole discretion, is not a common law employee, whether or not any such person is later determined to have been a common law employee of the Company or an Affiliate, or (v) employees who are eligible to participate in another severance plan maintained by the Company or an Affiliate.  
Section 2.19    “Executive Equity Plan” shall mean any long-term equity incentive plan of the Company or any of its Affiliates, including without limitation the UGI Corporation 2004 Omnibus Equity Compensation Plan, the UGI Corporation 2013 Omnibus Incentive 

3

Compensation Plan, the AmeriGas Propane, Inc. 2000 Long-Term Incentive Plan, and the AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan. 
Section 2.20    “Just Cause” shall mean dismissal of an Executive Employee due to (i) misappropriation of funds, (ii) substance abuse or habitual insobriety that adversely affects the Executive Employee’s ability to perform his or her job, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties.  Disputes with respect to whether Just Cause exists shall be resolved in accordance with Article IX.
Section 2.21    “Key Employee” shall mean an employee who, at any time during the 12-month period ending on the identification date, is a “specified employee” under section 409A of the Code, as determined by the Compensation Committee or its delegate.  The determination of Key Employees, including the number and identity of persons considered specified employees and the identification date, shall be made by the Compensation Committee or its delegate in accordance with the provisions of section 409A of the Code and the regulations issued thereunder.
Section 2.22    “Month of Service” shall mean each calendar month (with each partial month counted as a full month) of continuous service with the Company and its Affiliates beginning on the Participant’s Employment Commencement Date and ending on the Participant’s Employment Termination Date.  Months of Service with an entity whose business or assets have been acquired by the Company or an Affiliate shall be counted only if so determined by the Company.  
Section 2.23    “Monthly Compensation” shall mean the Participant’s Annual Compensation divided by 12.
Section 2.24    “Paid Notice” shall mean the cash amount payable to a Participant in lieu of notice as determined pursuant to Section 4.01(a).
Section 2.25    “Participant” shall mean any Executive Employee who receives Benefits under the Plan.
Section 2.26    “Plan” shall mean the UGI Utilities, Inc. Senior Executive Employee Severance Plan, as set forth herein, and as the same may from time to time be amended.
Section 2.27    “Plan Year” shall mean each fiscal year of the Company during which this Plan is in effect.
Section 2.28    “Postponement Period” shall mean, for a Key Employee, the period of six months after separation from service (or such other period as may be required by section 409A of the Code), during which deferred compensation may not be paid to the Key Employee under section 409A of the Code.
Section 2.29    “Release” shall mean a release and discharge of the Company, all of its Affiliates, and all affiliated persons and entities from any and all claims, demands and causes of 

4

action, other than as to amounts or benefits due to the Participant under any qualified employee retirement plan of the Company or an Affiliate, which shall be in such form as may be proscribed by the Company, acting as Plan sponsor and not as a fiduciary, from time to time and with such modifications as the Company deems appropriate for the Participant’s particular situation.  
Section 2.30    “Restricted Awards” shall mean restricted stock, stock units, performance units, restricted units, dividend equivalents, distribution equivalents and other equity-based awards, other than stock options, that are granted to a Participant under an Executive Equity Plan.
Section 2.31    “Salary Continuation Period” shall mean (i) the number of months of Paid Notice plus (ii) one business day for each month that is included in the Participant’s Months of Service, up to a maximum of one year.  Each calendar week is considered to consist of five business days for this purpose.
Section 2.32    “Separation Pay” shall mean the cash amount payable to a Participant as determined pursuant to Section 4.01(b).

5

ARTICLE III 
PARTICIPATION 
AND ELIGIBILITY FOR BENEFITS
Section 3.01    General Eligibility Requirement.  In its sole discretion, acting in its role as Plan sponsor and not as a fiduciary, the Company may grant a Benefit under this Plan to any Executive Employee whose employment is terminated by the Company or an Affiliate other than for Just Cause, death, or continuous illness, injury or incapacity for a period of six consecutive months.  Notwithstanding anything herein to the contrary, an Executive Employee will not be considered to have incurred a termination by the Company or an Affiliate for purposes of this Plan if his or her employment is discontinued due to voluntary resignation or the expiration of a leave of absence, as determined by the Company, acting in its role as Plan sponsor and not as a fiduciary.  In addition, the Executive Employee must meet the requirements of Section 3.03 in order to receive a Benefit under this Plan.
Section 3.02    Substantially Comparable Employment.  Notwithstanding anything herein to the contrary, no Benefits shall be due hereunder to an Executive Employee in connection with the disposition of a business, division or affiliated company by the Company or an Affiliate if substantially comparable terms of employment, as determined by the Company, have been offered to the Executive Employee by the transferee; provided, however, that the Company, acting in its role as Plan sponsor and not as a fiduciary, may determine that the Company or an Affiliate will provide some or all of the Benefits to an Executive Employee whose employment with the Company and its Affiliates is terminated as described in Section 3.01.  For purposes of this Plan, “substantially comparable terms of employment” shall mean an executive level position with (i) no reduction in the Executive Employee’s annual base salary as of the date of the transaction, and (ii) no material change in the geographic location at which the Executive Employee must perform services (which, for purposes of this Plan, means a location that is not more than 50 miles from the Executive Employee’s principal place of business immediately before the transaction).  
Section 3.03    Conditions to Entitlement to Benefits.  
(a)    As further conditions to entitlement to Benefits under the Plan, all Participants must, prior to the payment of any Benefits due hereunder, (i) sign and not rescind or contest the enforceability of a Release; (ii) ratify any patent assignment, confidentiality, non-solicitation, non-competition and other post-employment activities agreement in effect between the Participant and the Company or an Affiliate; (iii) return to the Company and its Affiliates any and all property of the Company and its Affiliates held by the Participant, including, but not limited to, all reports, manuals, memoranda, computer disks, tapes and data made available to the Participant during the performance of the Participant’s duties, including all copies; (iv) hold confidential any and all information concerning the Company and its Affiliates, whether with respect to its business, subscribers, providers, customers, operations, finances, employees, contractors, or otherwise; and (v) cooperate fully with the Company and its Affiliates to complete the transition of matters with which the Participant is familiar or responsible to other employees and make himself or herself available to answer questions or assist in matters which may require 

6

attention after the Participant’s Employment Termination Date.  Notwithstanding the foregoing, accrued vacation described in Section 4.01(d) shall be paid without regard to the Participant’s execution of a Release, to the extent required by applicable state law.
(b)    If the Administrative Committee determines, in its sole discretion, that the Participant has violated one or more of the foregoing conditions to entitlement to Benefits, the Administrative Committee may determine that the Participant will not receive the Benefits or the Company may discontinue the payment of Benefits under the Plan.  Any remedy under this Section 3.03 shall be in addition to, and not in place of, any other remedy the Company and its Affiliates may have, at law or otherwise.

7

ARTICLE IV
BENEFITS
Section 4.01    Amount of Immediate Cash Benefit.  The Company, acting in its role as Plan sponsor and not as a fiduciary, shall determine which Executive Employees shall be awarded a Benefit hereunder and the amount of any such Benefit.  The Company may take into account any factors it determines to be relevant in deciding which Executive Employees shall be awarded Benefits and the amount of such Benefits, and need not apply its determinations in a uniform manner to terminated Executive Employees similarly situated.  All such decisions shall be final, binding and conclusive with respect to the Executive Employee.  Unless the Company determines otherwise, subject in all events to Section 3.03, the amount to be paid to a Participant eligible to receive Benefits under Section 3.01 hereof upon the Participant’s separation from service shall be paid in a lump sum as provided in Section 5.01 hereof and shall equal the sum of the amounts described in subsections (a) through (d), less the amount described in subsection (e), except that any payment under paragraph (c) below will be excluded from the lump sum payment and paid separately as provided below:
(a)    Paid Notice as follows:
(i)    In the case of the Chief Executive Officer, an amount of Paid Notice equal to 12 months of the Chief Executive Officer’s Monthly Compensation.  
(ii)    In the case of all other Participants, an amount of Paid Notice equal to six months of the Participant’s Monthly Compensation, unless otherwise designated in writing by the Company.
(b)    An amount of Separation Pay equal to one day’s pay (calculated by dividing the Participant’s Annual Compensation by 260) for each Month of Service; provided, however, that such amount shall not exceed 100% of the Participant’s Annual Compensation.
(c)    The Administrative Committee may determine in its sole discretion that an annual bonus will be paid for the year of termination.  The Administrative Committee may take into account factors such as Company and Affiliate performance, individual performance and the portion of the year elapsed prior to the Employment Termination Date.  The annual bonus shall not exceed a pro rata portion of the Participant’s target annual bonus for the year of termination.  The bonus, if any, shall be paid within 60 days after the Employment Termination Date, unless the Executive Annual Bonus Plan in effect for the year specifically provides otherwise with respect to termination of employment.  If a bonus is payable to the Participant under the Executive Annual Bonus Plan for the year of termination, no bonus will be payable under this Plan.

8

(d)    An amount equal to the Participant’s earned and accrued vacation entitlement, including banked vacation time, and personal holidays through the Participant’s Employment Termination Date.
(e)    If the Participant’s employment with the Company and its Affiliates terminates before a Change in Control, the cash amount computed in subsections (a) through (c) above shall be reduced by the amount of cash and the fair market value of any stock, partnership units or other property that is payable to the Participant under Restricted Awards after the Participant’s termination of employment, as determined by the Company, provided that the Restricted Awards are not considered deferred compensation under section 409A of the Code.  In order to implement this reduction, if the Company cannot determine the amount payable under Restricted Awards at the Participant’s Employment Termination Date, any amounts payable under such Restricted Awards shall be reduced by the amount of the Benefit paid under subsections (a) through (c) above, provided the Restricted Awards are not considered deferred compensation under section 409A of the Code.  In no event shall a Participant be required to return to the Company or an Affiliate any amounts previously paid under this Plan.  
(f)    The reduction described in subsection (e) shall not apply if the Participant’s employment with the Company and its Affiliates terminates at or after a Change in Control.  In addition, the reduction described in subsection (e) shall not apply to any Restricted Awards for which all requirements for payment have been met before the Participant’s Employment Termination Date (for example, if the restriction period for a Restricted Award ends on December 31, 2013, the Restricted Award is payable on February 1, 2014 and the Participant’s employment is terminated on January 15, 2014, the Restricted Award shall not be reduced by the Benefits under this Plan).  
Section 4.02    Executive Benefits.  
(c)    If a Participant receives Benefits under Section 4.01, the Company shall pay to the Participant a single lump sum payment, as provided in Section 5.01 and subject to Section 3.03, equal to the COBRA Cost that the Participant would incur if the Participant continued medical and dental coverage under the Company’s benefit plans through the end of the Salary Continuation Period, based on the benefits in effect for the Participant (and where applicable, his or her spouse and dependents) at the Participant’s Employment Termination Date, less the amount that the Participant would be required to contribute for medical and dental coverage if such Participant were an active employee.  The cash payment shall include an additional payment equal to 75% of the lump sum payment described in the preceding sentence.  
(d)    A Participant who receives Benefits under Section 4.01 may elect continuation coverage under the Company’s applicable medical and dental plans during the Salary Continuation Period by paying the COBRA Cost of such coverage, provided such continued coverage would not result in adverse tax consequences to the Participant, Company or an Affiliate and provided such continued coverage is permitted under the applicable medical and dental plans.  If the Participant elects such coverage, the Participant shall be responsible for paying the COBRA Cost of such coverage during the Salary Continuation Period in order to be eligible for the coverage.  Notwithstanding anything herein to the contrary, any such continued 

9

coverage shall be discontinued if, and at the time, the Participant obtains other employment and becomes eligible to participate in the plan of, or is provided similar coverage by, a new employer.  Any applicable conversion rights shall be provided to the Participant at the time coverage ceases.  COBRA Coverage shall run concurrently with the Salary Continuation Period, and nothing in this Section shall limit the Employee’s right to elect COBRA Coverage for the full period permitted by law.  
(e)    If a Participant who receives Benefits under Section 4.01 is entitled to receive tax preparation services immediately before his or her termination of employment, the Participant shall be entitled to receive tax preparation services for the final calendar year of his or her employment under the terms of the Company’s tax preparation reimbursement policy.  The Company shall reimburse the Participant for the services within 60 days following the Company’s receipt of proof of payment for the services, but in no event later than December 31 of the calendar year following the calendar year in which the expense is incurred, provided that the Company receives proof of payment for the services at least 60 days before such December 31.  
(f)    The Company shall provide to each Participant who receives benefits under Section 4.01 outplacement services for up to 12 months following his or her Employment Termination Date through a vendor selected by the Company.
Section 4.03    Retirement Plans.  This Plan shall not govern and shall in no way affect the Participant’s interest in, or entitlement to benefits under, any of the qualified retirement plans of the Company or an Affiliate and any payments received under any such plan shall not affect a Participant’s right to any Benefit hereunder.
Section 4.04    Effect on Other Benefits.  
(a)    After a Participant’s termination of employment, the Participant shall not accrue benefits under any benefit plan of the Company or an Affiliate, and a terminated Participant shall not accrue vacation days, paid holidays, paid sick days or other benefits for any part of the Salary Continuation Period.  
(b)    Notwithstanding anything in this Plan to the contrary, no benefits shall be paid under this Plan if the Participant receives severance benefits under a Change in Control Agreement or any other severance agreement or arrangement with the Company or an Affiliate.  
(c)    Notwithstanding anything herein to the contrary, the Benefits payable under this Plan to any Participant may be reduced by any and all payments required to be made by the Company or an Affiliate under federal, state and local law, including the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101 et. seq. or under any employment agreement or special severance arrangement, as determined by the Company, acting as Plan sponsor and not as a fiduciary.

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ARTICLE V
METHOD AND DURATION OF BENEFIT PAYMENTS
Section 5.01    Method of Payment.  The cash Benefit to which a Participant is entitled, pursuant to Article IV, shall be paid in a lump sum payment.  Payment shall be made within 60 days following the Participant’s Employment Termination Date, subject to the fulfillment of all conditions for payment of the Benefit set forth in Section 4.01 and compliance with all requirements of Section 3.03.  Payment shall be made by mail to the last address provided by the Participant to the Company or an Affiliate.  All payments under the Plan are subject to applicable federal, state and local taxes.  
Section 5.02    Section 409A.  
(a)    Notwithstanding any provision of the Plan to the contrary, if required by section 409A of the Code and if a Participant is a Key Employee, no Benefits shall be paid to the Participant during the Postponement Period.  If a Participant is a Key Employee and payment of Benefits is required to be delayed for the Postponement Period under section 409A, the accumulated amounts withheld on account of section 409A of the Code shall be paid in a lump sum payment within 30 days after the end of the Postponement Period.  If the Participant dies during the Postponement Period prior to the payment of Benefits, the amounts withheld on account of section 409A of the Code shall be paid to the Participant’s estate within 60 days after the Participant’s death.
(b)    This Agreement is intended to meet the requirements of the “short-term deferral” exception, the “separation pay” exception and other exceptions under section 409A of the Code. Notwithstanding anything in this Plan to the contrary, if required by section 409A, payments may only be made under this Plan upon an event and in a manner permitted by section 409A, to the extent applicable.  As used in the Plan, the term “termination of employment” shall mean the Participant’s separation from service with the Company and its Affiliates within the meaning of section 409A and the regulations promulgated thereunder.  For purposes of section 409A, the right to a series of payments under the Plan shall be treated as a right to a series of separate payments.  All reimbursements and in-kind benefits provided under the Plan shall be made or provided in accordance with the requirements of section 409A of the Code.  In no event may a Participant designate the year of payment for any amounts payable under the Plan.  Notwithstanding any provision of the Plan to the contrary, if the payments and benefits provided for under the Plan are subject to section 409A, in no event shall the timing of a Participant’s execution of the Release, directly or indirectly, result in the Participant designating the calendar year of payment, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.
Section 5.03    Payments After Death.  If a Participant dies after separation from service and before the Participant has received any Benefit that the Participant is entitled to receive under Article IV, any unpaid Benefit that the Participant would otherwise have received shall be payable to the Participant’s estate.

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ARTICLE VI 
ADMINISTRATION
Section 6.01    Appointment.  The Administrative Committee shall consist of one or more persons appointed by the Compensation Committee.  Administrative Committee members may be, but need not be, employees of the Company.  
Section 6.02    Tenure.  Administrative Committee members shall serve at the pleasure of the Compensation Committee.  Administrative Committee members may resign at any time on ten days’ written notice, and Administrative Committee members may be discharged, with or without cause, at any time by the Compensation Committee.
Section 6.03    Authority and Duties.  It shall be the duty of the Administrative Committee, on the basis of information supplied to it by the Company, to determine the eligibility of each Participant for Benefits under the Plan, to determine the amount of Benefits to which each such Participant may be entitled, and to determine the manner, time of payment and other requirements of payment of Benefits consistent with the provisions hereof.  The Company shall make such payments as are certified to it by the Administrative Committee to be due to Participants.  The Administrative Committee shall have the full power and discretionary authority to construe, interpret and administer the Plan, to correct deficiencies therein, and to supply omissions.  All decisions, actions, and interpretations of the Administrative Committee shall be final, binding, and conclusive upon the parties.  The Administrative Committee may delegate ministerial and other responsibilities to one or more employees of the Company or its Affiliates.
Section 6.04    Action by the Administrative Committee.  A majority of the members of the Administrative Committee shall constitute a quorum for the transaction of business at a meeting of the Administrative Committee.  Any action of the Administrative Committee may be taken upon the affirmative vote of a majority of the members of the Administrative Committee at a meeting, or at the direction of the Chairperson, without a meeting, by mail, telephone, or electronic communication; provided that all of the members of the Administrative Committee are informed of their right to vote on the matter before the Administrative Committee and of the outcome of the vote thereon.
Section 6.05    Officers of the Administrative Committee.  The Administrative Committee shall designate one of its members to serve as Chairperson thereof.  The Administrative Committee shall also designate a person to serve as Secretary of the Administrative Committee, which person may be, but need not be, a member of the Administrative Committee.
Section 6.06    Compensation of the Administrative Committee.  Members of the Administrative Committee shall receive no compensation for their services as such.  However, all reasonable expenses of the Administrative Committee shall be paid or reimbursed by the Company upon proper documentation.  The Company shall indemnify members of the Administrative Committee against personal liability for actions taken in good faith in the discharge of their respective duties as members of the Administrative Committee.

12

Section 6.07    Records, Reporting, and Disclosure.  The Administrative Committee 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.  Such records shall be made available to the Company and its Affiliates and to each Participant for examination during business hours except that a Participant shall examine only such records as pertain exclusively to the examining Participant and to the Plan.  The Administrative Committee shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder (except that the Company or an Affiliate, 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).
Section 6.08    Actions of the Administrative Committee.  All determinations made by the Administrative Committee under the Plan shall be made solely at the discretion of the Administrative Committee.  The exercise of discretion by the Administrative Committee need not be uniformly applied to similarly situated Participants and shall be final and binding on each Participant or beneficiary to whom the determination is directed.
Section 6.09    Benefits of the Chief Executive Officer.  Notwithstanding the foregoing, the Compensation Committee shall serve as the Administrative Committee under the Plan with respect to the Chief Executive Officer of the Company.  The Compensation Committee shall make all determinations with respect to the Chief Executive Officer as to any matter that directly pertains to, or affects, the Chief Executive Officer.  
Section 6.10    Bonding.  The Administrative Committee 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.

13

ARTICLE VII 
AMENDMENT AND TERMINATION
Section 7.01    Amendment, Suspension and Termination.  The Company, by action of its Board of Directors or the Compensation Committee, retains the right, at any time and from time to time, to amend, suspend or terminate the Plan in whole or in part, for any reason, and without either the consent of or the prior notification to any Participant.  No such amendment shall give the Company or an Affiliate the right to recover any amount paid to a Participant prior to the date of such amendment or to cause the cessation and discontinuance of payments of Benefits to any person or persons under the Plan already receiving Benefits.

14

 

 ARTICLE VIII
DUTIES OF THE COMPANY
Section 8.01    Records.  The Company shall supply to the Administrative Committee all records and information necessary to the performance of the Administrative Committee’s duties.
Section 8.02    Payment.  The Company shall make payments from its general assets to Participants in accordance with the terms of the Plan, as directed by the Administrative Committee.
Section 8.03    Discretion, Delegation.  
(a)    Any decisions, actions or interpretations to be made under the Plan by the Company shall be made in its sole discretion, not in any fiduciary capacity and need not be uniformly applied to similarly situated individuals, and such decisions, actions or interpretations shall be final, binding and conclusive upon all parties.  
(b)    The Company may take actions under the Plan by action of its Board of Directors or the Compensation Committee, or by action of any officer or committee to whom any of the Company’s authority with respect to the Plan shall have been delegated.  The Compensation Committee shall be authorized to take all Company actions under the Plan with respect to the Chief Executive Officer.

15

 
ARTICLE IX
CLAIMS PROCEDURES
Section 9.01    Application for Benefits.  Participants who believe they are eligible for benefits under this Plan may apply for such benefits by completing and filing with the Administrative Committee an application for benefits on a form supplied by the Administrative Committee.  Before the date on which benefit payments commence, each such application must be supported by such information as the Administrative Committee deems relevant and appropriate.
Section 9.02    Claim.  A terminated employee may contest his or her eligibility for the amount of benefit awarded by completing and filing with the Administrative Committee a written request for review in the manner specified by the Administrative Committee.  Each such application must be supported by such information as the Administrative Committee deems relevant and appropriate.  The Administrative Committee will review the claim and provide notice to the terminated employee, in writing, within 90 days after the claim is filed unless special circumstances require an extension of time for processing the claim.  In no event shall the extension exceed a period of 90 days from the end of the initial period.  In the event that any claim for benefits is denied in whole or in part, the terminated employee whose claim has been so denied shall be notified of such denial in writing by the Administrative Committee.  The notice advising of the denial shall be written in a manner calculated to be understood by the terminated employee and shall set forth: (i) specific references to the pertinent Plan provisions on which the denial is based; (ii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation as to why such information is necessary; and (iii) an explanation of the Plan’s claim procedure and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on appeal.
Section 9.03    Appeals of Denied Claims for Benefits.  All appeals shall be made by the following procedure:
(a)    The terminated employee whose claim has been denied shall file with the Administrative Committee a notice of appeal of the denial.  Such notice shall be filed within 60 days of notification by the Administrative Committee of the claim denial, shall be made in writing, and shall set forth all of the facts upon which the appeal is based.  Appeals not timely filed shall be barred.
(b)    The claimant or his duly authorized representative may:
(i)    request a review upon written notice to the Administrative Committee;
(ii)    examine the Plan and obtain, upon request and without charge, copies of all information relevant to the claimant’s appeal; and

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(iii)    submit issues and comments in writing.
(c)    The Named Appeals Fiduciary (as described in Section 9.04) shall issue a decision no later than 60 days after receipt of a request for review unless special circumstances, such as the need to hold a hearing, require a longer period of time, in which case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the terminated employee’s notice of appeal.
(d)    The Named Appeals Fiduciary shall consider the merits of the claimant’s written 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.
(e)    The Named Appeals Fiduciary shall render a determination upon the appealed claim which determination shall be accompanied by a written statement setting forth:
(i)    specific reasons for the decision, written in a manner calculated to be understood by the claimant;
(ii)    specific references to the pertinent Plan provisions on which the decision is based;
(iii)    the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits; and
(iv)    the claimant’s right to bring a civil action under section 502(a) of ERISA.
Section 9.04    Appointment of the Named Appeals Fiduciary.  The Named Appeals Fiduciary shall be the person or persons named as such by the Compensation Committee, or, if no such person or persons be named, then the person or persons named by the Administrative Committee as the Named Appeals Fiduciary.  Named Appeals Fiduciaries may at any time be removed by the Compensation Committee, and any Named Appeals Fiduciary named by the Administrative Committee may be removed by the Administrative Committee.  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 unless appointed to other fiduciary responsibilities, shall have no authority, responsibility or liability with respect to any matter other than the proper discharge of the functions of the Named Appeals Fiduciary as set forth herein.

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ARTICLE X
MISCELLANEOUS
Section 10.01    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 the Participant may expect to receive, contingently or otherwise, under this Plan.
Section 10.02    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 Participant, or any person whosoever, the right to be retained in the service of the Company or an Affiliate, and all Participants shall remain subject to discharge to the same extent as if the Plan had never been adopted.
Section 10.03    Severability of Provisions.  If any provision of this Plan shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.
Section 10.04    Successors, 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.  If a Change in Control occurs, unless the Compensation Committee directs otherwise before the Change in Control, the Company shall require any successor or successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, or a division or Affiliate thereof, (i) to acknowledge expressly that this Plan is binding upon and enforceable against such successor in accordance with the terms hereof, (ii) to become jointly and severally obligated with the Company to perform the obligations under this Plan, and (iii) to agree not to amend or terminate the Plan for a period of one year after the Change in Control without the consent of the affected Participant.
Section 10.05    Unfunded Plan.  The Plan shall not be funded.  The Company may, but shall not be required to, set aside or designate an amount necessary to provide the Benefits specified herein (including the establishment of trusts).  In any event, no Participant shall have any right to, or interest in, any assets of the Company or an Affiliate which may be applied by the Company or an Affiliate to the payment of Benefits.
Section 10.06    Payments to Incompetent Persons.  Any Benefit payable to or for the benefit of an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, its 

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Affiliates, the Administrative Committee, the Compensation Committee and all other parties with respect thereto.
Section 10.07    Controlling Law.  This Plan shall be construed and enforced according to the laws of the Commonwealth of Pennsylvania, to the extent not preempted by Federal law, without giving effect to any Pennsylvania choice of law provisions.

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EXHIBIT A
UGI UTILITIES, INC.
CHANGE IN CONTROL
For purposes of this Plan, the term “Change in Control,” and defined terms used in the definition of “Change in Control,” shall have the following meanings:
(i)    Any Person (except the Employee, his Affiliates and Associates, UGI Corporation (“UGI”), any Subsidiary of UGI, any employee benefit plan of UGI or of any Subsidiary of UGI, or any Person or entity organized, appointed or established by UGI or any Subsidiary of UGI for or pursuant to the terms of any such employee benefit plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner in the aggregate of 20% or more of either (i) the then outstanding shares of common stock of UGI (the “Outstanding UGI Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of UGI entitled to vote generally in the election of directors (the “UGI Voting Securities”); or
(ii)    Individuals who, as of the beginning of any 24-month period, constitute the UGI Board of Directors (the “Incumbent UGI Board”) cease for any reason to constitute at least a majority of the Incumbent UGI Board, provided that any individual becoming a director of UGI subsequent to the beginning of such period whose election or nomination for election by the UGI stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent UGI Board shall be considered as though such individual were a member of the Incumbent UGI Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of UGI; or
(iii)    Consummation by UGI of a reorganization, merger or consolidation (a “Business Combination”), in each case, with respect to which all or substantially all of the individuals and entities who were the respective Beneficial Owners of the Outstanding UGI Common Stock and UGI Voting Securities immediately prior to such Business Combination do not, following such Business Combination, Beneficially Own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination in substantially the same proportion as their ownership immediately prior to such Business Combination of the Outstanding UGI Common Stock and UGI Voting Securities, as the case may be; or
(iv)    (A)    Consummation of a complete liquidation or dissolution of UGI or (B) sale or other disposition of all or substantially all of the assets of UGI other than to a corporation with respect to which, following such sale or disposition, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors is then owned beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding UGI Common Stock and UGI Voting Securities immediately prior to such sale or disposition in substantially the same proportion as 

A-1

their ownership of the Outstanding UGI Common Stock and UGI Voting Securities, as the case may be, immediately prior to such sale or disposition; or
(v)    UGI and its Subsidiaries fail to own more than 50% of the then outstanding shares of common stock of the Company or more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; or
(vi)    Consummation by the Company of a reorganization, merger or consolidation (a “Business Combination”), in each case, with respect to which all or substantially all of the individuals and entities who were the respective Beneficial Owners of the Company’s outstanding common stock and voting securities immediately prior to such Business Combination do not, following such Business Combination, Beneficially Own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination in substantially the same proportion as their ownership immediately prior to such Business Combination of the Company’s outstanding common stock and voting securities, as the case may be; or
(vii)    Consummation of a complete liquidation or dissolution of the Company or sale or other disposition of all or substantially all of the assets of the Company other than to a corporation with respect to which, following such sale or disposition, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors is then owned beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Company’s outstanding common stock and voting securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the Company’s outstanding common stock and voting securities, as the case may be, immediately prior to such sale or disposition.

A-2

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