1997 STOCK OPTION AND DIVIDEND
EQUIVALENT PLAN
AMENDED AND RESTATED AS OF MAY 24, 2005
The purpose of
this Plan is to assist the Company in securing and retaining key
corporate executives of outstanding ability, who are in a position
to significantly participate in the development and implementation
of the Company’s strategic plans and thereby contribute
materially to the long-term growth, development and profitability
of the Company, by affording them an opportunity to purchase its
Stock under options. The Plan is designed to align directly
long-term executive compensation with tangible, direct and
identifiable benefits realized by the Company’s shareholders.
No grants may be made under this Plan after January 1,
2004.
Whenever used
in this Plan, the following terms will have the respective meanings
set forth below:
2.01 “Board” means UGI’s Board
of Directors as constituted from time to time, provided that
whenever in this Plan Board approval is required, such approval
shall require the affirmative vote of a majority of members of the
Board who are not participants in the Plan.
2.02 “Committee” means the
Compensation and Management Development Committee of the Board or
its successor.
2.03 “Company” means UGI
Corporation, a Pennsylvania corporation, any successor thereto and
any Subsidiary which adopts this plan, with the approval of the
Committee, by executing a participation and joinder
agreement.
2.04 “Comparison Group” means the
group determined by the Committee (no later than ninety (90) days
after the commencement of the Performance Period) consisting of the
Company and such other companies deemed by the Committee (in its
sole discretion) to be reasonably comparable to the Company and set
forth in Exhibit 1.
2.05
“Date of Grant” means the date the Committee makes an
Option grant.
2.06 “Dividend Equivalent” means an
amount determined by multiplying the number of shares of Stock
subject to an Option on the Date of Grant (whether or not the
Option is ever exercised with respect to any or all shares of Stock
subject thereto) by the per-share cash dividend, or the per-share
fair market value (as determined by the Committee) of any dividend
in consideration other than cash, paid by the Company on its Stock
on a dividend payment date.
2.07 “Employee” means a regular
full-time salaried employee (including officers and directors who
are also employees) of the Company.
2.08 “Fair Market Value” of Stock
means the average, rounded to the next highest one-eighth of a
point (.125), of the highest and lowest sales prices thereof on the
New York Stock Exchange on the day on which Fair Market Value is
being determined, as reported on the Composite Tape for
transactions on the New York Stock Exchange; provided, however, in
the case of a cashless exercise pursuant to Section 7.4(iv),
the Fair Market Value shall be the actual sale price of the shares
issued upon exercise of the Option. In the event that there are no
Stock transactions on the New York Stock Exchange on such day, the
Fair Market Value will be determined as of the immediately
preceding day on which there were Stock transactions on that
exchange.
2.09 “Option” means the right to
purchase Stock pursuant to the relevant provisions of this Plan at
the Option Price for a specified period of time, not to exceed ten
years from the Date of Grant, which period of time shall be subject
to earlier termination prior to exercise in accordance with
Sections 11, 12 and 13 of this Plan.
2.10 “Option Price” means an amount
per share of Stock purchasable under an Option designated by the
Committee on the Date of Grant of an Option to be payable upon
exercise of such Option. The Option Price shall not be less than
100% of the Fair Market Value of the Stock determined on the Date
of Grant.
2.11 “Participant” means an Employee
designated by the Committee to participate in the Plan; provided,
however, that no Employee who is not then a Participant in the Plan
may be designated by the Committee to participate in the Plan at
any time during the last full year of a Performance
Period.
2.12 “Performance Period” means a
period selected by the Committee over which the total return
realizable by a shareholder of the Company on a share of Stock is
compared to that realizable by shareholders of companies in the
Comparison Group in accordance with Section 8.2 of the Plan in
order to determine whether Dividend Equivalents associated with an
Option will be payable to a Participant.
2.13 “Stock” means the Common Stock
of UGI or such other securities of UGI as may be substituted for
Stock or such other securities pursuant to
Section 14.
2.14 “Subsidiary” means any
corporation or partnership, at least 20% of the outstanding voting
stock, voting power or partnership interest of which is owned
respectively, directly or indirectly, by the Company.
2.15 “Termination without Cause”
means termination for the convenience of the Company for any reason
other than (i) misappropriation of funds, (ii) habitual
insobriety or substance abuse, (iii) conviction of a crime
involving moral turpitude, or (iv) gross negligence in the
performance of duties, which gross negligence has had a material
adverse effect on the business, operations, assets, properties or
financial condition of the Company.
2.16 “UGI” means UGI Corporation, a
Pennsylvania corporation or any successor thereto.
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3. NUMBER AND
SOURCE OF SHARES AVAILABLE FOR OPTIONS—MAXIMUM
ALLOTMENT
The number of
shares of Stock which may be made the subject of Options under this
Plan at any one time may not exceed 4,500,000 in the aggregate
(after giving retroactive effect to the 2-for-1 Stock split
distributed May 24, 2005), including shares acquired by
Participants through exercise of Options under this Plan, subject,
however, to the adjustment provisions of Section 14 below. The
maximum number of shares of Stock which may be the subject of
grants to any one individual in any calendar year shall be 900,000
(after giving retroactive effect to the 2-for-1 Stock split
distributed May 24, 2005). If any option expires or terminates
for any reason without having been exercised in full, the
unpurchased shares subject to the option will again be available
for the purposes of the Plan. Shares which are the subject of
Options may be previously issued and outstanding shares of the
Stock reacquired by the Company and held in its treasury, or may be
authorized but unissued shares of Stock, or may be partly of
each.
The Plan will
remain in effect until all Stock subject to it has been purchased
pursuant to the exercise of Options or all such options have
terminated without exercise. Notwithstanding the foregoing, no
option may be granted after December 31, 2006.
The Plan will
be administered by the Committee. Subject to the express provisions
of the Plan, the Committee will have authority, in its complete
discretion, to determine the Employees to whom, and the time or
times at which, Options will be granted, the number of shares to be
subject to each Option, the Option Price to be paid for the shares
upon the exercise of each Option, and the period within which each
Option may be exercised. In making such determinations, the
Committee may take into account the nature of the services rendered
by an Employee, the present and potential contributions of the
Employee to the Company’s success and such other factors as
the Committee in its discretion deems relevant. Subject to the
express provisions of the Plan, the Committee will also have
authority to construe and interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the
terms and provisions of the respective stock option agreements
required by Section 7.2 of the Plan (which need not be
identical), and to make all other determinations (including factual
determinations) necessary or advisable for the orderly
administration of the Plan. A Stock option agreement as discussed
below shall be executed by each Participant receiving a grant under
the Plan and shall constitute that Participant’s
acknowledgement and acceptance of the terms of the Plan and the
Committee’s authority and discretion. It is the intent of the
Company that the Plan should comply in all applicable respects with
Rule 16b-3 under the Exchange Act so that transactions
relating to any Option and Dividend Equivalents granted to a
Participant who is subject to Section 16 of the Exchange Act
shall be exempt under Rule 16b-3. Accordingly, if any
provision of the Plan or any agreement relating to an option does
not comply with the requirements of Rule 16b-3 as then
applicable to any such Participant, such provision shall be
construed or deemed amended to the extent necessary to conform to
such requirements with respect to such Participant. Any other
provision of the Plan notwithstanding, the Board may perform any
function of the Committee under the Plan, including without
limitation for the purpose of ensuring that transactions under the
Plan by Participants who are subject to Section 16 of the
Exchange Act in respect of the Company are exempt under
Rule 16b-3. In any case in which the Board is performing a
function of the Committee under the Plan, each reference to the
Committee herein shall be deemed to refer to the Board (unless the
context shall otherwise require).
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Options may be
granted only to Employees (including directors who are also
Employees of the Company) who, in the sole judgment of the
Committee, are designated by the Committee as individuals who are
in a position to significantly participate in the development and
implementation of the Company’s strategic plans and thereby
contribute materially to the continued growth and development of
the Company and to its future financial success.
7.01 Grant of Options . Subject to the
provisions of Sections 2.11 and 3, Options may be granted to
Participants at any time and from time to time as may be determined
by the Committee. The Committee will have complete discretion in
determining the number of Options granted to each Participant and
the number of shares of Stock subject to such Options.
7.02 Option Agreement . As determined by
the Committee on the Date of Grant, each option will be evidenced
by a stock option agreement (substantially in the form included in
Exhibit 2 attached hereto) that shall, among other things, specify
the Date of Grant, the Option Price, the duration of the Option and
the number of shares of Stock to which the Option
pertains.
7.03
Exercise and Vesting .
(a) Except as otherwise specified by the
Committee, an option shall be fully and immediately exercisable on
the Date of Grant. Notwithstanding the foregoing, in the event that
any such Options are not by their terms immediately exercisable,
the Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason. No Option shall be
exercisable on or after the tenth anniversary of the Date of
Grant.
(b) Except as otherwise specified by the
Committee, in the event that a Participant holding an option ceases
to be an Employee, the option held by such Participant shall be
exercisable only with respect to that number of shares of Stock
with respect to which it is already exercisable on the date such
Participant ceases to be an Employee. However, if a Participant
holding an Option ceases to be an Employee by reason of (i) a
retirement under the Company’s retirement plan, (ii)
Termination without Cause, (iii) disability, or
(iv) death, the Option held by any such Participant shall
thereafter become immediately exercisable with respect to the total
number of shares of Stock available under such option and shall
remain exercisable until the earlier of the expiration date of the
option or the expiration of the thirteen (13) month period
following the date of such cessation of employment.
(c) Notwithstanding the foregoing, in the
event of any merger or consolidation of any other corporation with
or into UGI, or the sale of all or substantially all of the assets
of UGI or an offer to purchase made by a party other than UGI to
all shareholders of UGI for all or any substantial portion of the
outstanding Stock, a participant shall be permitted to exercise all
outstanding Options (to the extent not otherwise exercisable by
their terms) prior to the effective date of any such merger,
consolidation or sale or the expiration of any such offer to
purchase, unless otherwise determined by the Committee, no later
than thirty (30) days prior to the effective date of such
transaction or the expiration of such offer.
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