CHANGE IN CONTROL
AGREEMENT
This CHANGE IN CONTROL AGREEMENT (“
Agreement ”) is made as of May 12, 2008, between
UGI Corporation (the “ Company ”) and
[Name] (the “ Employee ”).
WHEREAS, the Company and the Employee previously
entered into a Change in Control Agreement (the “ Existing
Agreement ”);
WHEREAS, the Company and Employee wish to enter
into this Agreement, which is an amendment and restatement of the
Existing Agreement, in order to comply with recent changes to the
tax law;
WHEREAS, the Company has determined that
appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of key members of the
Company’s management to their assigned duties without
distraction arising from the possibility of a Change in Control (as
defined below), although no such change is now
contemplated;
WHEREAS, in order to induce the Employee to
remain in the employ of the Company, the Company agrees that the
Employee shall receive the compensation set forth in this Agreement
in the event the Employee’s employment with the Company is
terminated in connection with a Change in Control as a cushion
against the financial and career impact on the Employee of any such
Change in Control;
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements hereinafter set
forth and intending to be legally bound hereby, the parties hereby
agree that the Existing Agreement is amended and restated as
follows:
1. Definitions . For all purposes
of this Agreement, the following terms shall have the meanings
specified in this Section unless the context clearly otherwise
requires:
(a) “ Affiliate ” and
“ Associate ” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of Regulation 12B
under the Exchange Act.
(b) A Person shall be deemed the “
Beneficial Owner ” of any securities: (i) that
such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided
, however , that a Person shall not be deemed the
“Beneficial Owner” of securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person’s Affiliates or Associates until such tendered
securities are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person’s Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of Regulation 13D-G
under the Exchange Act), including without limitation pursuant to
any agreement, arrangement or understanding, whether or not in
writing; provided , however , that a Person shall not
be deemed the “Beneficial Owner” of any security under
this clause
(ii) as a
result of an oral or written agreement, arrangement or
understanding to vote such security if such agreement, arrangement
or understanding (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of
the Proxy Rules under the Exchange Act, and (B) is not then
reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or (iii) that are
beneficially owned, directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which such Person (or any
of such Person’s Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to clause
(ii) above) or disposing of any voting securities of the
Company; provided , however , that nothing in this
Section 1(b) shall cause a Person engaged in business as an
underwriter of securities to be the “Beneficial Owner”
of any securities acquired through such Person’s
participation in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such
acquisition.
(c) “
Board ” shall mean the Board of Directors of the
Company.
(d) “ Cause ” shall mean
(i) misappropriation of funds, (ii) habitual insobriety
or substance abuse, (iii) conviction of a crime involving
moral turpitude, or (iv) gross negligence in the performance
of duties, which gross negligence has had a material adverse effect
on the business, operations, assets, properties or financial
condition of the Company. The determination of Cause shall be made
by an affirmative vote of at least two-thirds of the members of the
Board at a duly called meeting of the Board.
(e) “ Change in Control
” shall have the meaning set forth in the attached
Exhibit A to this Agreement.
(f) “ COBRA Cost ” shall
mean 100% of the “applicable premium” under section
4980B(f)(4) of the Code for continued medical and dental COBRA
Coverage under the Company’s benefit plans.
(g) “ COBRA Coverage ”
shall mean continued medical and dental coverage under the
Company’s benefit plans, as determined under section 4980B of
the Code.
(h) “
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
(i) “ Compensation Committee
” shall mean the Compensation and Management Development
Committee of the Board.
(j) “ Continuation Period
” shall mean the three-year period beginning on the
Employee’s Termination Date.
(k) “
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
(l) “ Executive Severance Plan
” shall mean the Company’s Senior Executive Employee
Severance Pay Plan, as in effect from time to time.
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(m) “ Good Reason Termination
” shall mean a Termination of Employment initiated by the
Employee upon one or more of the following occurrences:
(i) a material breach by the Company of any
terms of this Agreement, including without limitation a material
breach of Section 2 or 13 of this Agreement;
(ii) a material diminution in the
authority, duties or responsibilities held by the Employee
immediately prior to the Change in Control;
(iii) a material diminution in the
Employee’s base compensation as in effect immediately prior
to the Change in Control; or
(iv) a material change in the geographic
location at which the Employee must perform services (which, for
purposes of this Agreement, means the Employee 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 Employee’s
principal place of business immediately preceding the Change in
Control, without the Employee’s express written
consent).
Notwithstanding the foregoing, the Employee
shall be considered to have a Good Reason Termination only if the
Employee provides written notice to the Company, pursuant to
Section 3, specifying in reasonable detail the events or
conditions upon which the Employee is basing such Good Reason
Termination and the Employee 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 Employee may terminate
employment with the Company based on Good Reason Termination within
30 days after the expiration of the cure period.
(n) “ 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.
(o) “ 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 severance
payments may not be paid to the Key Employee under section 409A of
the Code.
(p) “ Release ” shall
mean a release of any and all claims against the Company, its
Affiliates, its Subsidiaries and all related parties with respect
to all matters arising out of the Employee’s employment by
the Company and its Affiliates and Subsidiaries, or the termination
thereof (other than claims relating to amounts payable under this
Agreement or benefits accrued under any plan, program or
arrangement of the Company or any of its Subsidiaries or
Affiliates) and shall be in the form required by the Company of its
terminating executives immediately prior to the Change in
Control.
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(q) “ Subsidiary ” shall
mean any corporation in which the Company, directly or indirectly,
owns at least a 50% interest or an unincorporated entity of which
the Company, directly or indirectly, owns at least 50% of the
profits or capital interests.
(r) “ Termination Date ”
shall mean the effective date of the Employee’s Termination
of Employment, as specified in the Notice of
Termination.
(s) “ Termination of
Employment ” shall mean the termination of the
Employee’s actual employment relationship with the Company
and its Subsidiaries and Affiliates.
2. Employment . After a Change in
Control, during the term of the Agreement, Executive shall continue
to serve in the same or a comparable executive position with the
Company as in effect immediately before the Change in Control, and
with the same or a greater target level of annual and long-term
compensation as in effect immediately before the Change in
Control.
3. Notice of Termination . Any
Termination of Employment upon or following a Change in Control
shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. For
purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific
provision in this Agreement relied upon, (ii) briefly summarizes
the facts and circumstances deemed to provide a basis for the
Employee’s Termination of Employment under the provision so
indicated, and (iii) if the Termination Date is other than the
date of receipt of such notice, specifies the Termination Date
(which date shall not be more than 15 days after the giving of
such notice) except as provided in Section 1(m) above).
4. Severance
Compensation upon Termination of Employment .
(a) In the event of the Employee’s
involuntary Termination of Employment by the Company or a
Subsidiary or Affiliate for any reason other than Cause or in the
event of a Good Reason Termination, in either event upon or within
two years after a Change in Control, the Employee will receive the
following amounts in lieu of any severance compensation and
benefits under the Executive Severance Plan or any other severance
plan of the Company or a Subsidiary or Affiliate:
(i) The Company shall pay to the Employee a
lump sum cash payment equal to the greater of (A) or (B) as
set forth below:
(A) The Separation Pay and Paid Notice as
calculated under the terms of the Executive Severance Plan based on
the Employee’s compensation and service as of the Termination
Date, or
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(B) Three multiplied by the sum of
(1) the Employee’s annual base salary plus (2) the
Employee’s annual bonus. The annual base salary for this
purpose shall be the Employee’s annual base salary in effect
as of the Employee’s Termination Date. The annual bonus shall
be calculated for this purpose as the greater of (x) the
average annual cash bonus paid to the Employee for the three full
fiscal years of the Company preceding the fiscal year in which the
Termination Date occurs or (y) the Employee’s target
annual cash bonus for the fiscal year in which the Termination Date
occurs. For purposes of the preceding sentence, if the Employee has
not received an annual cash bonus for three full fiscal years, the
Employee’s average annual cash bonus shall be determined by
dividing the total annual cash bonuses received by the Employee
during the preceding three full fiscal years by the number of full
and fractional years for which the Employee received an annual cash
bonus during such three-year period.
(ii) The Company shall pay to the Employee
a single lump sum payment equal to the COBRA Cost that the Employee
would incur if the Employee continued medical and dental coverage
under the Company’s benefit plans during the Continuation
Period, based on the benefits in effect for the Employee (and, if
applicable, his or her spouse and dependents) at the Termination
Date, less the amount that the Employee would be required to
contribute for medical and dental coverage if the Employee were an
active employee. The cash payment shall include a tax gross up
payment equal to 75% of the lump sum amount described in the
preceding sentence. The Employee may elect continuation coverage
under the Company’s applicable medical and dental plans
during the Continuation Period by paying the COBRA Cost of such
coverage. COBRA Coverage shall run concurrently with the
Continuation Period, and nothing in this Section shall limit the
Employee’s right to elect COBRA Coverage for the full period
permitted by law.
(iii) The Employee’s benefit under
the Company’s executive retirement plan shall be calculated
as if the Employee had continued in employment during the
Continuation Period, earning base salary and bonus at the annual
rate calculated under subsection (i)(B) above.
(iv) The Company shall pay to the Employee
an amount equal to the Employee’s target annual cash bonus
amount for the Company’s fiscal year in which the Termination
Date occurs, multiplied by the number of months (with a partial
month counting as a full month) elapsed in the fiscal year to the
Termination Date and divided by 12, as well as any amounts due but
not yet paid from the prior year under such plan.
(b) Notwithstanding the foregoing, no
payments shall be made to the Employee under this Section 4
unless the Employee signs and does not revoke a Release. The
amounts described in subsections (a) (i), (ii) and
(iv) above shall be paid within 30 days after the
Terminat
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