UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment
(Amendment No. )
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Preliminary Proxy Statement | ||||
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☒ | Definitive Proxy Statement | |||
☐ | Definitive Additional Materials | |||
☐ | Soliciting Material Pursuant to §240.14a-12 | |||
UGI Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
UGI Corporation
No fee required. | ||||
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Notice of Annual Meeting and
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2017 Proxy Statement |
Notice of January 30, 2014
Annual Meeting and
Proxy Statement
BOX 858 VALLEY FORGE, PA 19482 —610-337-1000
LON R. GREENBERGMARVIN O. SCHLANGER
Chairman
December 18, 20138, 2016
Dear Shareholder,
On behalf of our entire Board of Directors, I cordially invite you to attend our Annual Meeting of Shareholders on Thursday,Tuesday, January 30, 2014.24, 2017. At the meeting, we will review UGI’s performance for the 20132016 fiscal year and our expectations for the future.
I would like to take this opportunity to remind you that your vote is important. On December 18, 2013,8, 2016, we mailed our shareholders a notice containing instructions on how to access our 20132016 proxy statement and annual report and how to vote online. Please read the proxy materials and take a moment now to vote online or by telephone as described in the proxy voting instructions. Of course, if you received these proxy materials by mail, you may also vote by completing the proxy card and returning it by mail.
I look forward to seeing you on January 30th24th and addressing your questions and comments.
Sincerely,
Lon R. Greenberg
Marvin O. Schlanger
BOX 858 VALLEY FORGE, PA 19482 —610-337-1000
December 18, 20138, 2016
NOTICEOF
AANNUALNNUAL MMEETINGEETINGOF SHAREHOLDERS
The Annual Meeting of Shareholders of UGI Corporation will be held on Thursday,Tuesday, January 30, 2014,24, 2017, at 10:00 a.m., at The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania. Shareholders will consider and take action on the following matters:items of business:
1. the election of nineeight directors to serve until the next annual meeting of Shareholders;shareholders;
2. anon-bindingan advisory vote on a resolution to approve UGI Corporation’s executive compensation; and
3. an advisory vote on the frequency of future advisory votes on executive compensation;
4. the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 2017; and
5. the transaction of any other business that ismay properly raised atcome before the meeting.
Monica M. Gaudiosi
Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on January 30, 2014:
Important Notice Regarding the Availability of Proxy Materials for the Shareholder |
This Proxy Statement and the Company’s 20132016 Annual Report are available atwww.ugicorp.com.
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2016 PROXY SUMMARY |
This summary highlights information contained elsewhere in this Proxy Statement. The summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.
Annual Meeting of Shareholders
Time and Date: | 10:00 a.m. (Eastern Standard Time), January | |
Place: | The Desmond Hotel and Conference Center, Ballrooms A & B | |
One Liberty Boulevard, Malvern, Pennsylvania | ||
Record Date: | November | |
Voting: | Shareholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one vote for each matter to be voted on. |
Meeting AgendaVoting Matters and Board Recommendations
1. | Election of |
2. | Non-binding advisory vote on a resolution to approve the compensation of our named executive |
3. | Non-binding advisory vote on the frequency of future advisory votes on executive compensation; and |
4. | Ratification of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 2017. |
Our Board recommends that you voteFOR the election of each of the director-nominees in Proposal 1, FOR Proposals 2 and 4, and for the option of “1 Year” in Proposal 3. |
Performance Highlights – Fiscal 2016
• | The Board of Directors increased the annual dividend by approximately 4.4% (29th consecutive year of annual dividend increases) |
FORCorporate Governance and Executive Compensation Practicesthe
Election of Directors
During the fiscal year ended September 30, 2013 (“Fiscal 2013”), the Company’s Board of Directors adopted a majority voting standardresignation policy for uncontested elections of its Directors. This means that a Director nominee will be elected to the Company’s Board of Directors if the votes cast “for” such Director nominee exceed the votes cast “against” him or her. In addition, an incumbent Director will be required to tender his or her resignation if he or she doesdirectors not receive a majority of the votes cast in favor of his or her election in an uncontested election of Directors. The Corporate Governance Committee would then be required to recommend to the Board of Directors whether or not to accept the incumbent Director’s resignation, and the Board will have ninety (90) days from the date of the election to determine whether or not to accept such resignation. The Company previously followed a plurality standard for all Director elections.
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The following table provides summary information about each Director nominee. Each Director nominee is elected annually byreceiving a majority of votes cast.
Director | Committee | Memberships | ||||||||||||||||||||
Name | Age | Since | Occupation | Independent | AC | CC | CG | EC | SC | |||||||||||||
Lon R. Greenberg | 63 | 1994 | UGI Corporation Chairman | X | ||||||||||||||||||
Marvin O. Schlanger (Presiding Director) | 65 | 1998 | Principal of Cherry Hill Chemical Investments, LLC and Chairman of CEVA Holdings LLC | X | C | X | C | |||||||||||||||
Richard W. Gochnauer | 64 | 2011 | Retired CEO of United Stationers Inc. | X | X | X | ||||||||||||||||
Frank S. Hermance | 64 | 2011 | Chairman and CEO of Ametek Inc. | X | X | C | ||||||||||||||||
Ernest E. Jones | 69 | 2002 | President of EJones Consulting, LLC | X | X | C | ||||||||||||||||
Anne Pol | 66 | 1999 | Retired President and COO of Trex Enterprises Corporation | X | X | X | ||||||||||||||||
M. Shawn Puccio | 51 | 2009 | Senior Vice President, Finance of Saint-Gobain Corporation | X | X | X | ||||||||||||||||
Roger B. Vincent | 68 | 2006 | Retired President of Springwell Corporation | X | C | X | ||||||||||||||||
John L. Walsh | 58 | 2005 | UGI Corporation President and Chief Executive Officer | X |
AC Audit Committee
CC
CG Corporate Governance
EC Executive Committee
SC Safety, Environmental,
C Chairman
Advisory Vote to Approve Named Executive Officer Compensation
We are asking shareholders to approve, on an advisory basis, UGI Corporation’s executive compensation, including our executive compensation policies and practices and the compensation of our named executive officers, as described in this Proxy Statement beginning on page 29. The Board recommends a FOR vote because it believes that21.
ü | At our 2016 Annual Meeting, over 96% of our shareholders voted to approve the compensation of our named executive officers. |
This result clearly demonstrated strong support for our executive compensation policies and practices are effective in achieving UGI Corporation’s goalsand the alignment of paying for performance and aligning the executives’ long-term interests with those of our shareholders.executive pay to Company performance.
Our Board recommends aFORvote because it believes that the Company’s compensation policies and practices are effective in achieving UGI Corporation’s goals of paying for performance and aligning the executives’ long- term interests with those of our shareholders. |
Objectives and Components of ourOur Compensation Program
OurThe compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value.
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In Fiscal 2013,2016, the components of our executive compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards, and UGI Corporation stock option grants)grants and a restricted unit award to one named executive officer), one-time discretionary equity grants,limited perquisites, retirement benefits and other benefits, all as described in greater detail in the COMPENSATION DISCUSSIONAND ANALYSISCompensation Discussion and Analysis of this Proxy Statement. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our annual and long-term goals.
Compensation and Corporate Governance Practices
¡ The Compensation and Management Development Committee is composed entirely of directors who are independent and utilizes the services of Pay Governance LLC, an independent outside compensation consultant.
¡ A substantial portion of executive compensation is allocated to performance-based compensation, including long-term awards to align executive officers’ interests with shareholders’ interests and enhance long-term performance. For example, in Fiscal 2013, 82% of Mr. Walsh’s principal compensation components were variable and tied to UGI Corporation’s financial performance or total shareholder return.
¡ We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a significant restatement of the Company’s financial results.
¡ In our change in control agreements, termination of employment is required for payment (referred to as a “double trigger”).
¡ We have meaningful stock ownership guidelines. See COMPENSATIONOF EXECUTIVE OFFICERS — Stock Ownership Guidelines in this Proxy Statement.
¡ During Fiscal 2013, we implemented a policy prohibiting the Company’s Directors and executive officers from (i) hedging the securities of UGI Corporation and AmeriGas Partners, L.P. (“AmeriGas Partners”), (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, and (iii) pledging the securities of UGI Corporation and AmeriGas Partners. Prior to the implementation of this policy, there were no executive officers or directors who had engaged in the hedging or pledging of UGI Corporation or AmeriGas Partners securities.
Pay for Performance
Our executive compensation program allows the Compensation and Management Development Committee and the Board to determine pay based on a comprehensive view of quantitative and qualitative factors designed to enhance shareholder value and align the long-term interests of executives and shareholders.
For example, for the 2010-20122011-2013 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 42nd50th percentile (UGI ranked 20th out of the 40 companies in its peer group) and Mr. Walsh received a performance unit payout equal to 100 percent of $597,764 duringtarget in Fiscal 2013.
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2014. For the 2009-20112013-2015 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 30th percentile and resulted in no payout during the 2012 fiscal year (“Fiscal 2012”). For the 2008-2010 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 97th88th percentile and Mr. Walsh received a performance unit payout equal to 196 percent of $1,766,046 during the 2011 fiscal year.target in Fiscal 2016. For additional information on the alignment between our financial results and executive officer compensation, see the COMPENSATION DISCUSSIONAND ANALYSIS (beginning on page 29 of this Proxy Statement).Compensation Discussion and Analysis.
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UGI CORPORATION
460 North Gulph Road
King of Prussia, Pennsylvania 19406
PROXY STATEMENT
This proxy statement contains information related to the Annual Meeting of Shareholders of UGI Corporation (the “Company”) to be held on Thursday,Tuesday, January 30, 2014,24, 2017, beginning at 10:00 a.m., at The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania, and at any postponements or adjournments thereof. Directions to The Desmond Hotel and Conference Center appear on page 82.62. This proxy statement was prepared under the direction of the Company’s Board of Directors to solicit your proxy for use at the Annual Meeting. It was made available to shareholders on or about December 18, 2013.8, 2016.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials?
The Company has elected to provide access to the proxy materials over the Internet. We believe that this initiative enables the Company to provide proxy materials to shareholders more quickly, reducereduces the impact of our Annual Meeting on the environment, and reducereduces costs.
Who is entitled to vote?
ShareholdersOnly shareholders of record of our common stock at the close of business on November 13, 201314, 2016, the record date, are entitled to vote at the Annual Meeting, or any postponement or adjournmentMeeting. On November 14, 2016, there were 173,056,812 shares of the meeting scheduled in accordance with Pennsylvania law.common stock outstanding. Each shareholder has one vote per share on all matters to be voted on. On November 13, 2013, there were 114,468,990 shares of common stock outstanding.
What am I voting on?
You will be asked to elect nine nominees to serve on the Company’s Board of Directors, to provide an advisory vote on the Company’s executive compensation and to ratify the appointment of our independent registered public accounting firm for the fiscal year ending September 30, 2014 (“Fiscal 2014”). The Board of Directors is not awareare voting on:
• | Proposal 1– the election of eight nominees to serve on the Company’s Board of Directors, |
• | Proposal 2– a non-binding advisory vote on the Company’s executive compensation, |
• | Proposal 3– a non-binding advisory vote on the frequency on which to vote on executive compensation, |
• | Proposal 3– ratification of the appointment of our independent registered public accounting firm for the fiscal year ending September 30, 2017, and |
How does the Board of Directors recommend I vote on the proposals?
The Board of Directors recommends a vote (i) FOR the election of each of the nominees for Director, and (ii) FOR the approval, by advisory vote, of the compensation paid to our named executive officers.
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How do I vote?
Voting instructions appear on the proxy card. You may vote in one of three ways:
Over the Internet
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If your shares are registered in your name: Vote your shares over the Internet by accessing the Computershare proxy online voting website at:www.envisionreports.com/UGI and following the on-screen instructions. You will need the control number that appears on your Notice of Availability of Proxy Materials when you access the web page.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the Internet by following the voting instructions that you receive from such broker, bank or other nominee.
By Telephone
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If your shares are registered in your name: Vote your shares over the telephone by accessing the telephone voting system toll-free at 800-652-8683 and following the telephone voting instructions. The telephone instructions will lead you through the voting process. You will need the control number that appears on your Notice of Availability of Proxy Materials when you call.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the telephone by following the voting instructions you receive from such broker, bank or other nominee.
By Mail
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If you received these annual meeting materials by mail: Vote by signing and dating the proxy card(s) and returning the card(s) in the prepaid envelope. Also, you can vote online or by using a toll-free telephone number. Instructions about these ways to vote appear on the proxy card. If you vote by telephone, please have your proxy card and control number available.
How can I vote my shares held in the Company’s Employee Savings Plans? You can instruct the trustee for the Company’s Employee Savings Plans to vote the shares of stock that are allocated to your account in the UGI Stock Fund. If you do not vote your shares, the trustee will vote them in proportion to those shares for which the trustee has received voting instructions from participants. How can I change my vote? You can change or revoke your can write to the Company’s Corporate Secretary at our principal offices, 460 North Gulph Road, King of Prussia, Pennsylvania 19406, stating that you wish to revoke your proxy and that you need another proxy card. Your last vote is the vote that will be counted. What is a quorum? How are votes, abstentions and broker non-votes counted? Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum, but are not considered a vote cast under Pennsylvania law. As a result, abstentions and broker non-votes are not included in the tabulation of the voting results on issues requiring approval of a majority of the votes cast and, therefore, do not have the effect of votes in opposition in such tabulation. What vote is required to approve each item? The accept the incumbent Director’s resignation, and the Board will have ninety (90) days from the date of the election to determine whether The approval, by advisory vote, of Likewise, the trustee will vote shares held by the trust that have not been allocated to any account in the same manner.proxyvote at any time before it is voted. Proxies are votedpolls close at the 2017 Annual Meeting. Meeting: you are a shareholder of record and you returned a paper proxy card, you- 6 - Alternatively, youfollowing theirfollow its procedure for revocation. you are a shareholder of record and you attend the meeting, you may vote by ballot, which will cancel your previous proxy vote. IfHowever, if your shares are held through a broker, bank or other nominee, and you wish to vote by ballot at the meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must bring with you to the meeting to exchange for a ballot.A quorum of the holders of the outstanding shares must be present for the Annual Meeting to be held. A “quorum” is the presence at the meeting, in person or represented by proxy, of the holders of a majority of the outstanding shares entitled to vote. A quorum of the holders of the outstanding shares must be present for the Annual Meeting to be held. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum.A broker non-vote occurs whenWhen a broker, bank or other nominee holding shares on your behalf does not receive voting instructions from you. If that happens,you, the broker, bank or other nominee may vote those shares only on matters deemed “routine” by the New York Stock Exchange. On non-routine matters, the broker, bank or other nominee cannot vote those shares unless they receive voting instructions from the beneficial owner. A “broker non-vote” occurs whenmeans that a broker has not received voting instructions and either declines to exercise its discretionary authority to vote on routine matters or is barred from doing so because the matter is non-routine. Broker non-votes are counted to determine if a quorum is present, but are not considered a vote cast under Pennsylvania law.Director nomineesdirector-nominees will be elected by a majority of the votes cast at the Annual Meeting. Under UGI Corporation’sthe Company’s Bylaws and Principles of Corporate Governance, Directors must be elected by a majority of the votes cast in uncontested elections, such as the election of Directors at the Annual Meeting. This means that a Director nomineedirector-nominee will be elected to the Company’s Board of Directors if the votes cast “for”“FOR” such Director nominee exceed the votes cast “against”“AGAINST” him or her. In addition, an incumbent Director will be required to tender his or her resignation if he or she does not receive a majority of the votes cast are not in favor of his or her electionfavor in an uncontested election of Directors. The Corporate Governance Committee would then be required to recommend to the Board of Directors whether or not to- 7 -or not to accept such resignation.UGI Corporation’sthe Company’s executive compensation requires the affirmative vote
of a majority of the shares present in person or by proxy and entitled to vote at the 20142017 Annual Meeting. This vote is advisory in nature and therefore not binding on UGI Corporation, the Board of Directors or the Compensation and Management Development Committee. However, our Board of Directors and the Compensation and Management Development Committee value the opinions of the Company’s shareholders and will consider the outcome of this vote in their future deliberations on the Company’s executive compensation programs.
Shareholders may vote for “one year,” “two years,” or “three years,” or may abstain from voting, for the advisory vote on the frequency of future advisory votes on executive compensation. The option of one year, two years, or three years that receives a majority of all the votes cast by shareholders will be the frequency for the advisory vote on executive compensation selected by our shareholders. In the absence of a majority of votes cast in support of any one frequency, the option of one year, two years, or three years that receives the greatest number of votes will be considered the frequency selected by our shareholders. This vote is advisory in nature and therefore not binding on UGI Corporation or the Board of Directors. However, the Board of Directors will consider the outcome of this vote in its deliberations on the frequency of future advisory votes on the Company’s executive compensation programs.
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 2017 requires the affirmative vote of a majority of the votes cast at the meeting to be approved.
Who will count the vote?
Computershare Inc., our Transfer Agent, will tabulate the votes cast by proxy or in person at the Annual Meeting.
What are the deadlines for Shareholders’Shareholder proposals for next year’s Annual Meeting?
Shareholders may submit proposals on matters appropriate for shareholder action as follows:
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How much did this proxy solicitation cost?
The Company has engaged Georgeson Inc. to solicit proxies for the Company for a fee of $7,500 plus reasonable expenses for additional services. We also reimburse banks, brokerage firms and other institutions, nominees, custodians and fiduciaries for their reasonable expenses for sending proxy materials to beneficial owners and obtaining their voting instructions. Certain Directors, officers and regular employees of the Company and its subsidiaries may solicit proxies personally or by telephone or facsimile without additional compensation.
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The following table shows the number of shares beneficially owned by each Director, by each of the executive officers named in the Summary Compensation Table – Fiscal 2013, and by all Directors and executive officers as a group. The table shows their beneficial ownership as of October 1, 2013.
Our subsidiary, AmeriGas Propane, Inc. (“AmeriGas Propane”), is the General Partner of AmeriGas Partners, one of our consolidated subsidiaries and a publicly-traded limited partnership. The table also shows, as of October 1, 2013, the number of common units of AmeriGas Partners, and phantom units representing common units, beneficially owned by each Director and named executive officer, and by all Directors and executive officers as a group.
Mr. Greenberg beneficially owns approximately 1.3 percent of the outstanding common stock. Each other person named in the table beneficially owns less than 1 percent of the outstanding common stock and less than 1 percent of the outstanding common units of AmeriGas Partners. Directors and named executive officers as a group own approximately 2.81 percent of the outstanding common stock and less than 1 percent of the outstanding common units of AmeriGas Partners. For purposes of reporting total beneficial ownership, shares that may be acquired within 60 days of October 1, 2013 through UGI Corporation stock option exercises are included.
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Beneficial Ownership of Directors, Nominees and Named Executive Officers | ||||||||||
Name | Number of Shares of UGI | Number of UGI | Exercisable Options For UGI Common Stock | Number of AmeriGas Partners, L.P. Common Units | Number of Phantom Units(3) | |||||
Monica M. Gaudiosi | 5,477 | 0 | 16,666 | 0 | 0 | |||||
Richard W. Gochnauer | 8,159 | 8,159 | 25,500 | 0 | 0 | |||||
Lon R. Greenberg | 382,063(4) | 0 | 1,100,000 | 15,000 | 0 | |||||
Bradley C. Hall | 61,883(5) | 0 | 79,000 | 0 | 0 | |||||
Frank S. Hermance | 100,000(6) | 6,761 | 21,250 | 0 | 0 | |||||
Ernest E. Jones | 7,711 | 36,806 | 76,500 | 0 | 0 | |||||
Kirk R. Oliver | 5,080(7) | 0 | 0 | 1,200(7) | 0 | |||||
Anne Pol | 3,257 | 74,761 | 76,500 | 0 | 1,100 | |||||
M. Shawn Puccio | 3,350 | 13,866 | 42,500 | 0 | 0 | |||||
Marvin O. Schlanger | 18,224(8) | 62,350 | 76,500 | 1,000(8) | 2,807 | |||||
Jerry E. Sheridan | 1,275(9) | 0 | 85,220 | 26,244(10) | 1,821 | |||||
Roger B. Vincent | 10,000(11) | 23,075 | 68,000 | 6,000(11) | 0 | |||||
John L. Walsh | 184,790(12) | 0 | 494,999 | 7,000(12) | 0 | |||||
Directors and executive officers as a group (15 persons) | 811,145 | 225,778 | 2,241,334 | 56,444 | 5,728 |
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Section 16(a) – Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our Directors, certain officers and 10 percent beneficial owners to report their ownership of shares and changes in such ownership to the SEC. Based on our records, we believe that, during Fiscal 2013, all of such reporting persons complied with all Section 16(a) reporting requirements applicable to them.
The following table shows information regarding each person known by the Company to be the beneficial owner of more than five percent of the Company’s common stock. The ownership information below is based on information reported on a Form 13F as filed with the SEC in November 2013 for the quarter ended September 30, 2013.
Securities Ownership of Certain Beneficial Owners
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NOMINEES |
NineEight directors have been nominated by the Board of Directors will be electedto stand for election as directors at the Annual Meeting. Directors willMeeting of Shareholders based upon recommendations from the Corporate Governance Committee. Each director-nominee has consented to serve, if elected, until the next annual meeting or until theirhis or her earlier resignation or removal. If any nomineedirector-nominee is not available for election, proxies will be voted for another person nominated by the Board of Directors or the size of the Board will be reduced. Nine membersAll of the director-nominees were elected to the Board of Directors electedby our shareholders at last year’s annual meeting aremeeting. The Board of Directors has unanimously nominated M. Shawn Bort, Richard W. Gochnauer, Frank S. Hermance, Anne Pol, Marvin O. Schlanger, James B. Stallings, Jr., Roger B. Vincent and John L. Walsh for re-election as directors at the Annual Meeting. Ernest E. Jones, a current director, is not standing for re-election this year.in accordance with the Company’s mandatory retirement policy for directors.
Information about Director-Nominees
Biographical information for each of the director-nominees standing for re-election is set forth below, as well as a description of the specific experience, qualifications, attributes and skills that led the Board to conclude that, in light of the Company’s business and structure, the individual should serve as a director. The nominees areBoard believes that each director-nominee has valuable individual skills and experience that, taken as follows:
LON R. GREENBERG
Director since 1994
Age 63a whole, provide the depth of knowledge, judgment and strategic vision necessary to provide effective oversight of the Company.
The Board of Directors recommends that you vote “FOR” the election of each of the eight nominees for director. |
M. SHAWN BORT Retired Senior Vice President, Finance, Saint-Gobain Corporation Director since 2009 Age 54 Chair, Audit Committee |
Mr. Greenberg is a Director (since 1994) and Non-Executive Chairman of the Board of Directors. He previously servedMs. Bort retired in 2015 as Chief Executive Officer (since 1995), President (1994 to 2005) and Senior Vice President, – LegalFinance of Saint-Gobain Corporation, the North American business of Compagnie de Saint-Gobain (a global manufacturer and Corporate Developmentdistributor of UGI (1989 to 1994). Mr. Greenberg also serves as a Directorflat glass, building products, glass containers and Non-Executive Chairman of AmeriGas Propane, Inc. and UGI Utilities, Inc. and as a Director of Aqua America, Inc., Ameriprise Financial, Inc., and AmerisourceBergen Corporation.
MARVIN O. SCHLANGER
Director since 1998
Age 65
Mr. Schlanger is a Principal in the firm of Cherry Hill Chemical Investments, L.L.C. (a management services and capital firm for chemical and allied industries) (since 1998). Mr. Schlanger also serves as Chairman of the Board (since 2009) of CEVA Holdings LLC, an international logistics supplier, and as Chairman of the Supervisory Board of LyondellBasell Industries NV (since 2010). He was previously Chairman, Chief Executive Officer and President of Resolution Performance Products, LLC (2000 to 2005), Chairman of Covalence Specialty Materials Corp.high performance materials) (2006 to 2007), Chairman of Resolution Specialty Materials, LLC (20042015). Ms. Bort was formerly Vice President, Finance (2005 to 2006) and Vice President, Internal Control Services (2002 to 2005) of Saint-Gobain. Prior to joining Saint-Gobain, she was a partner with PricewaterhouseCoopers LLP, a public accounting firm (1997 to 2002), Vice Chairman of Hexion Specialty Materials, LLC (2005 to 2010), and Chief Executive Officer (2012 to 2013) of CEVA Holdings LLC. Mr. Schlangerhaving joined Price Waterhouse in 1984. Ms. Bort also serves as a Director of UGI Utilities, Inc., AmeriGas Propane,a subsidiary of the Company.
Ms. Bort’s qualifications to serve as a director include her senior financial executive management experience with a global company and her extensive public accounting knowledge and experience. Her education (Ms. Bort has a bachelor’s degree in accounting from Marquette University and a Master of Business Administration degree in finance and operations management from the Wharton School of the University of Pennsylvania) and experience provide her with financial expertise and a well-developed awareness of IT infrastructure, financial strategy, asset management and risk management. Ms. Bort also possesses international experience by virtue of her former executive position at a large global company.
RICHARD W. GOCHNAUER Retired Chief Executive Officer, United Stationers, Inc. Director since 2011 Age 67 Member, Audit Committee Member, Corporate Governance Committee |
Mr. Gochnauer retired in May 2011 as Chief Executive Officer and Director of United Stationers Inc. (a wholesale distributor of business products) (2002 to 2011). He previously served as President and Chief Operating Officer and Vice Chairman and President, International, of Golden State Foods Corporation (a food service industry supplier) (1994 to 2002). Mr. Gochnauer also serves as a Director of AmerisourceBergen Corporation (a wholesale distributor of business products in the U.S. and internationally), Golden State Foods Corporation, and UGI Utilities, Inc., Taminco Global Chemical Holdings, LLPa subsidiary of the Company.
Mr. Gochnauer’s qualifications to serve as a director include his extensive senior management experience as Chief Executive Officer of a large public company and Momentive Specialty Chemicals Holdings, LLC.
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ANNE POL
Director 1993 through 1997 and
since 1999
Age 66
| FRANK S. HERMANCE Chairman, AMETEK, Inc. Director since 2011 Age 67 Chair, Safety, Environmental and Regulatory Compliance Committee Member, Compensation and Management Development Committee |
Mr. Hermance is Chairman of the Board of AMETEK, Inc. (a global manufacturer of electronic instruments and electromechanical devices) (since 2001). He previously served as AMETEK’s Chief Executive Officer (1999 – 2016) and as President and Chief Operating Officer (1996 to 1999). Mr. Hermance is a member of the Board of Trustees of the Rochester Institute of Technology. He also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company, and as a Director of the Greater Philadelphia Alliance for Capital and Technologies. He previously served as a Director of IDEX Corporation, ending in April 2012.
Mr. Hermance’s qualifications to serve as a director include his extensive senior management experience in the roles of Chairman, Chief Executive Officer, President and Chief Operating Officer of a large global public company. Mr. Hermance also provides relevant experience in the areas of corporate governance, mergers and acquisitions, human resources management, logistics, distribution, risk management and executive compensation. As an executive of a company with global operations, Mr. Hermance also provides the Board with international experience.
ANNE POL Retired President and Chief Operating Officer, Trex Enterprises Corp. Director 1993 through 1997 and since 1999 Age 69 Chair, Compensation and Management Development Committee Member, Safety, Environmental and Regulatory Compliance Committee |
Mrs. Pol retired in 2005 as President and Chief Operating Officer of Trex Enterprises Corporation (a high technologyhigh-technology research and development company), a position she had held since 2001. She previously served as Senior Vice President (1998 to 2001) and Vice President (1996 to 1998) of Thermo Electron Corporation (an environmental monitoring and analytical instruments company and a major producer of recycling equipment, biomedical products and alternative energy systems). Mrs. Pol also served as President of Pitney Bowes Shipping and Weighing Systems Division, a business unit of Pitney Bowes Inc. (mailing(a mailing and related business equipment)equipment company) (1993 to 1996); Vice President of New Product Programs in the Mailing Systems Division of Pitney Bowes Inc. (1991 to 1993); and Vice President of Manufacturing Operations in the Mailing Systems Division of Pitney Bowes Inc. (1990 to 1991). Mrs. Pol also serves as a Director of UGI Utilities, Inc. and AmeriGas Propane, Inc., both of which are subsidiaries of UGI Corporation.
Mrs. Pol’s qualifications to serve as a director include her strategic planning, business development and technology experience as a senior-level executive with a diversified high-technology company. Mrs. Pol also possesses an important understanding of, and extensive experience in, the areas of executive compensation, human resource management, corporate governance and government regulation.
| MARVIN O. SCHLANGER Principal, Cherry Hill Chemical Investments, L.L.C. Director since 1998 Age 68 Chairman of the Board Chair, Corporate Governance Committee Chair, Executive Committee |
Mr. Schlanger serves as the Company’s Chairman of the Board (since January 2016). He is a Principal in the firm of Cherry Hill Chemical Investments, L.L.C. (a management services and capital firm for chemical and allied industries) (since 1998). Mr. Schlanger served as Chief Executive Officer of CEVA Holdings BV and CEVA Holdings, LLC, an international logistics supplier (2012 to 2013). Mr. Schlanger is currently a director of AmeriGas Propane, Inc., and UGI Utilities, Inc., both of which are subsidiaries of UGI Corporation. He is also a director of CEVA Holdings, LLC, where he serves as chairman, CEVA Group, plc, where he serves as non-executive chairman, Hexion, Inc., Momentive Performance Materials, Inc., and VECTRA Company.
ERNEST E. JONESMr. Schlanger’s qualifications to serve as a director include his senior management, strategic planning, business development, risk management, and general operations experience throughout his career as Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of Arco Chemical Company, a large public company. By virtue of his senior executive leadership at companies with global operations, Mr. Schlanger also provides the Board with international experience. The Board also considered Mr. Schlanger’s experience serving as chairman, director and committee member on the boards of directors of large public and private international companies.
JAMES B. STALLINGS, JR. Managing Partner, PS27 Ventures, LLC Director since 2015 Age 61 Member, Audit Committee Member, Safety, Environmental and Regulatory Compliance Committee Mr. Stallings is Managing Partner of PS27 Ventures, LLC, a private investment fund focused on technology companies (since January 2013). Mr. Stallings retired from International Business Machines Corporation (IBM) (a global provider of information technology and services) as General Manager of Global Markets, Systems and Technology, a position he had held since 2009. From 2002
Age 69Mr. Stallings’ qualifications to serve as a director include his expertise and extensive experience managing enterprise-wide global technology and information systems, including responsibility for profit and loss statements. With Mr. Stallings’ combination of business development and technology infrastructure expertise, as well as his education (Mr. Stallings has a Bachelor of Science degree from the U.S. Naval Academy) and his service as a director on other boards, he provides valuable business development, risk management (including from a regulated industry), and finance experience. The Board also considered his strong leadership, operations experience, and strategic planning, as well as his investment committee experience at a venture capital company. By virtue of his other board service, Mr. Stallings possesses experience with board-level risk oversight, corporate governance and banking issues.
| ROGER B. VINCENT Retired President, Springwell Corporation Director since 2006 Age 71 Member, Corporate Governance Committee Member, Compensation and Management Development Committee Member, Executive Committee |
Mr. Jones is President of EJones Consulting, LLC (since 2011) (a company that provides management consulting services to non-profit organizations). HeVincent retired in 2011 from his position as President of Springwell Corporation, a corporate finance advisory firm he founded in 1989. Prior to 1989, Mr. Vincent held various positions at Bankers Trust Company, including managing director. Mr. Vincent serves as Trustee and Chief Executive Officer of Philadelphia Workforce Development Corporation (an agency that funds, coordinates and implements employment and training activities in Philadelphia, Pennsylvania) in 2010, having served in that capacity since 1998. He formerly served as President and Executive DirectorFormer Chairman of the Greater Philadelphia Urban Affairs Coalition (1983 to 1998)Board of the VOYA Funds and as Executive Director of Community Legal Services, Inc. (1977 to 1983). Mr. Jones also serves as a Director of the African American Museum in Philadelphia, the Philadelphia Contributionship, Vector Security, Inc. and UGI Utilities, Inc., a subsidiary of the Company. He previously served as a Director of PARADIGM Global Advisors LLC, ending in 2009,AmeriGas Propane, Inc., a subsidiary of the Company, from 1998 to 2006.
Mr. Vincent’s qualifications to serve as a director include his extensive experience as founder and Thomas Jefferson University, ending in 2012.senior executive of a corporate finance advisory firm, as well as his prior experience as a managing partner at a major banking institution. In addition, the Board considered Mr. Vincent’s many years serving as a director and trustee at various funds of a registered investment company, his service as a member or chair of the audit committees for public companies and funds, and his service as a director of the National Association of Corporate Directors.
JOHN L. WALSH
Director since 2005
Age 58
| JOHN L. WALSH President and Chief Executive Officer Director since 2005 Age 61 Member, Executive Committee |
Mr. Walsh is a Director and President (since 2005) and Chief Executive Officer (since 2013) of UGI Corporation. In addition, Mr. Walsh serves as a Director and Vice Chairman of
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the Board of AmeriGas Propane, Inc. (since 2005)2016) where he had served as a director and vice chairman since 2005. He also serves as Vice Chairman of UGI Utilities, Inc. (since 2005). Previously, he alsoBoth AmeriGas Propane, Inc. and UGI Utilities, Inc. are subsidiaries of UGI Corporation. Mr. Walsh served as Chief Operating Officer of UGI Corporation (2005-2013) and as President and Chief Executive Officer of UGI Utilities, Inc. (2009 to 2011). Previously, Mr. Walsh was the Chief Executive of the Industrial and Special Products Division of the BOC Group plc (industrial gases)(an industrial gases company), a position he assumed in 2001. He was also an Executive Director of BOC (2001 to 2005). He, having joined BOC in 1986 as Vice President-SpecialPresident – Special Gases and having held various senior management positions in BOC, including President of Process Gas Solutions, North America (2000 to 2001) and President of BOC Process Plants (1996 to 2000).
ROGER B. VINCENT
Director since 2006
Age 68
Mr. Vincent is retired from his position as President of Springwell Corporation, a corporate finance advisory firm located in New York (1989 to 2010). Mr. Vincent serves as Chairman of the Board of Trustees of the ING United Funds and as a Director of UGI Utilities, Inc. He previously served as a Director of AmeriGas Propane, Inc. from 1998 to 2006.
M. SHAWN PUCCIO
Director since 2009
Age 51
Ms. Puccio is Senior Vice President, Finance of Saint-Gobain Corporation, the North American business of Compagnie de Saint-Gobain (a global manufacturer and distributor of flat glass, building products, glass containers and high performance materials) (since 2006). Ms. Puccio was formerly Vice President, Finance (2005 to 2006) and Vice President, Internal Control Services (2002 to 2005) of Saint-Gobain. Prior to joining Saint-Gobain, she was a partner with PricewaterhouseCoopers LLP, a public accounting firm (1997 to 2002), having joined Pricewaterhouse in 1984. Ms. PuccioWalsh also serves as a Director at Main Line Health, Inc., the United Way of UGI Utilities, Inc.
RICHARD W. GOCHNAUER
Director since 2011
Age 64
Southeastern Pennsylvania and Southern New Jersey, and the World LPG Association.
Mr. Gochnauer retired in May 2011Walsh’s qualifications to serve as Chief Executive Officera director include his extensive strategic planning, operational and a Director of United Stationers Inc. (a wholesale distributor of business products) (2002 to 2011). He previously servedexecutive leadership experience as the Company’s CEO and President, andhis previous service as the Company’s Chief Operating Officer, and Vice Chairman and President, International, of Golden State Foods Corporation (a food service industry supplier) (1994 to 2002). Prior to that,his prior senior management experience with a global public company. Mr. Gochnauer served as Executive Vice PresidentWalsh has in-depth knowledge of the DialCompany’s businesses, competition, risks, and health, environmental and safety issues. Mr. Walsh, by virtue of his current position and his previous position at a multinational industrial gas company, possesses international experience, as well as management development and compensation experience.
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Corporation, with responsibility for its household and laundry consumer products businesses. Mr. Gochnauer also serves as a Director of UGI Utilities, Inc., AmerisourceBergen Corporation and Golden State Foods Corporation.
FRANK S. HERMANCE
Director since 2011
Age 64
Mr. Hermance is Chairman of the Board (since 2001) and Chief Executive Officer of Ametek Inc. (a global manufacturer of electronic instruments and electromechanical devices). He previously served as President and Chief Operating Officer of Ametek Inc. (1996 to 1999). Mr. Hermance is a member of the Board of Trustees of the Rochester Institute of Technology. He also serves as a Director of UGI Utilities, Inc. and as a Director of the Greater Philadelphia Alliance for Capital and Technologies. He previously served as a Director of IDEX Corporation, ending in April 2012.
CORPORATE GOVERNANCE |
Corporate Governance Principles
The business of UGI Corporation is managed under the direction of the Board of Directors. As part of its duties, the Board oversees the corporate governance of the Company for the purpose of creating long-term value for its shareholders and safeguarding its commitment to its other stakeholders: our employees, our customers, our suppliers and creditors, and the communities in which we do business. To accomplish this purpose, the Board considers the interests of the Company’s stakeholdersshareholders when, together with management, it sets the strategies and objectives of the Company.
The Board, also evaluates management’s performancerecognizing the importance of good corporate governance in pursuing those strategies and achieving those objectives.
In carrying out its responsibilities underto our shareholders, has adopted the guidelines set forth by theUGI Corporation Principles of Corporate Governance. The Principles of Corporate Governance provide a framework for the effective governance of the Board will:and the Company by outlining the responsibilities of the Board and Board Committees. The Board, upon recommendation of the Corporate Governance Committee, regularly reviews the Principles and, as appropriate, updates them in response to changing regulatory requirements, feedback from shareholders on governance matters and evolving best practices in corporate governance.
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The full text of the Company’s Principles of Corporate Governance can be found on the Company’s website,www.ugicorp.com, under Investor Relations, – Corporate Governance. Governance or in print, free of charge, upon written request.
The Board has determined that, other than Mr. Walsh, no Director has a material relationship with the Company, and each Director satisfies the criteria for an “independent director” under the rules of the New York Stock Exchange.
The Board has also adopted (i) a Code of Ethics forestablished the Chief Executive Officer and Senior
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In making its determination of independence, the Board considered charitable contributions and ordinary business transactions between the Company, or affiliates of the Financial Officersappliesorganization by the Company and its affiliates that do not exceed the greater of $1,000,000 or two percent of the charitable organization’s total revenues per year will not be considered to the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, and (ii)result in a Code of Business Conduct and Ethics for Directors, Officers and Employees. Both Codesmaterial relationship between such director and the ChartersCompany.Corporate Governance, Audit, CompensationCompany, and Management Development, and Safety, Environmental, and Regulatory Committeescompanies where our Directors are employed or serve as directors, all of which were in compliance with either the independence rules of the New York Stock Exchange or the categorical standard set by the Board of Directors are posted on the Company’s website,www.ugicorp.com, under Investor Relations – Corporate Governance. All of these documents are also available free of charge by writing to Treasurer, UGI Corporation, P.O. Box 858, Valley Forge, PA 19482, or by calling 800-844-9453.
During Fiscal 2013, the Company’s Board of Directors amended and restated the Company’s Bylaws and Principles of Corporate Governance to provide for a majority voting standard for uncontested elections of its Directors. Previously, the Company followed a plurality standard in all Director elections. During Fiscal 2013, the Board of Directors also adopted a policy prohibiting the Company’s directors and executive officers from (i) hedging the securities of UGI Corporation and AmeriGas Partners, (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, and (iii) pledging the securities of UGI Corporation and AmeriGas Partners. Prior to the implementation of this policy, there were no executive officers or directors who had engaged in the hedging or pledging of UGI Corporation or AmeriGas Partners securities.
Board Leadership Structure and Role in Risk Management
OurThe Board of Directors determines whichthe most appropriate Board structure to ensure effective and independent leadership structure best serves its needswhile also ensuring appropriate insight into the operations and thosestrategic direction of our shareholders. Currently, Mr.the Company. In connection with the retirement of Lon R. Greenberg serves as Non-Executive Chairman of the Board, the Board determined that the appointment of Directorsan independent Chairman would be the most appropriate leadership structure. Mr. Schlanger was elected as Chairman of the Company. Mr. Greenberg served as Executive Chairman and Chief Executive Officer of the Company prior to his retirement in Fiscal 2013.Board, effective January 28, 2016. The Board believes that the Company is best served by having Mr. Greenberg’s previous service in both capacities provided a single source of leadership and authority for the BoardSchlanger as independent Chair due to Mr. Greenberg’shis unique, in-depth knowledge of the Company’s corporate strategy and operating history. In addition, Mr. Greenberg’s dual role proved to be efficienthistory and contributed to effective communication between the Board and management. However, the Board determined that it would be appropriate to separate the roles of Chairman and Chief Executive Officer following Mr. Greenberg’s retirement as Chief Executive Officer given his willingness to serve as the Non-Executive Chairman of the Board. The Board believes that the combination of Mr. Walshexperience as the Company’s Chief Executive Officer and Mr. Greenberg as Non-Executive Chairman of the Board of Directors serves the best interests of the Company.
Mr. Schlanger currently serves as the Board’s Presiding Director. Each year, the Board designates an independent, Presiding Director who chairs periodic meetings of the independent Directors and serves as principal liaison between the Chairman and the other Directors on sensitive issues.since 2011.
Senior management of the Company is responsible for assessing and managing risk. Senior management has developed an enterprise risk management process intended to identify, prioritize and monitor key risks that may affect the Company. Our Board plays an
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important role in overseeing management’s performance of these functions. In addition to general risk oversight by the Board, the Board has approved the charter of itsthe Audit Committee and the charter sets out the primary responsibilities of the Audit Committee. Those responsibilities require the Audit Committee to discuss with management, the general auditor and the independent auditors, the Company’s enterprise risk management policies and risk management processes, including major risk exposures, risk mitigation, and the design and effectiveness of the Company’s processes and controls to prevent and detect fraudulent activity.
In order to further assist the Board in its The Compensation and Management Development Committee is responsible for oversight of management’s activities in the areas of safety, environmental and regulatory compliance,Company’s compensation programs to ensure that the Board established theprograms do not encourage employees to take unnecessary or excessive risks. The Safety, Environmental and Regulatory Compliance Committee in November 2012. The charterhas primary oversight responsibility for the committee sets out the primary responsibilities of the committee, including review of policies, programs, procedures, initiatives and training related to safety, environmental and regulatory compliance for the Company’s domestic and multinationalinternational business units as well as the review of policies and discussion with management of matters related thereto.programs to promote cyber security and to mitigate cyber security risks.
Our businesses are subject to a number of risks and uncertainties, which are described in detail in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013.2016. Throughout the year, in conjunction with its regular business presentations to the Board and its committees, management highlights significant risks and risk mitigation plans. Management also reports to each of the Audit CommitteeCommittees and the Board and to the Safety, Environmental and Regulatory Compliance Committee on safety, environmental and regulatory compliance matters, on steps being taken to enhance management processes and controls in light of evolving market, business, regulatory and other conditions. The ChairmenChair of the Auditeach Committee and the Safety, Environmental and Regulatory Compliance Committee reportreports to the entire Board on theirhis or her respective committee’s activities and decisions. In addition, on an annual basis, an extended meeting of the Board is dedicated to reviewing the Company’s short- and long-term strategies and objectives, including consideration of significant risks to the execution of those strategies and the achievement of the Company’s objectives.
The Board of Directors has determined that, other than Messrs. GreenbergMeetings and Walsh, no Director has a material relationship with the Company, and each Director satisfies the criteria for an “independent director” under the rules of the New York Stock Exchange. The Board of Directors has established the following guidelines to assist it in determining director independence: (i) if a Director serves as an officer, director or trustee of a non-profit organization, charitable contributions to that organization by the Company and its affiliates in an amount up to $250,000 per year will not be considered to result in a material relationship between such Director and the Company, and (ii) service by a Director or his immediate family member as an executive officer or employee of a company that makes payments to, or receives payments from, the Company or its affiliates for property or services in an amount that, in any of the last three fiscal years, did not exceed the greater of $1 million or 2 percent of such other company’s consolidated gross revenues will not be considered to result in a
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material relationship between such Director and the Company. In making its determination of independence, the Board of Directors considered ordinary business transactions between Ms. Puccio’s and Mr. Hermance’s employers and subsidiaries of the Company that were in compliance with the categorical standards set by the Board of Directors for determining director independence.Attendance
The Board of Directors held 76 meetings in Fiscal 2013.2016. All Directors attended at least 75 percent of the meetings of the Board of Directors and Committees of the Board of which they were members. Generally, all Directors attend the Company’s Annual Meeting of Shareholders, and each of the Company’s sitting Directors attended the 20132016 Annual Meeting of Shareholders. Independent Directors of the Board also meet in regularly scheduled sessions without management. These sessions are led by our Presiding Director.Chairman.
The Board and Committee Structure
Annually, the Corporate Governance Committee monitors and assesses the structure, composition, operation and performance of Directors has established the Board and, if appropriate, makes recommendations for changes. Our Board Committees include Audit, Committee, the Compensation and Management Development, Committee,Corporate Governance, Executive, and Safety, Environmental and Regulatory Compliance. The members of each of the Board Committees, with the exception of the Executive Committee, are independent as defined by the New York Stock Exchange listing standards. The charters of the Audit, Corporate Governance, Committee,Compensation and theManagement Development, and Safety, Environmental and Regulatory Compliance Committee. AllCommittees can be found on the Company’s website, www.ugicorp.com, under Investor Relations, Corporate Governance, or in print, free of these Committees are responsible to the full Board of Directors. The functions of and other information about these Committees are summarized below.charge, upon written request.
Audit Committee
Current Board Composition | ||||||||||||||
Name | Audit Committee | Compensation and Development | Corporate Committee | Executive Committee | Safety, Environmental and Regulatory Compliance | |||||||||
M. S. Bort | 1, 2 | Chair | ||||||||||||
R. W. Gochnauer | 1, 2 | X | X | |||||||||||
F. S. Hermance | 1 | X | Chair | |||||||||||
E. E. Jones | 1 | X | ||||||||||||
A. Pol | 1 | Chair | X | |||||||||||
M. O. Schlanger | 1, 3 | Chair | Chair | |||||||||||
J. B. Stallings, Jr. | 1 | X | X | |||||||||||
R. B. Vincent | 1 | X | X | X | ||||||||||
J. L. Walsh | X | |||||||||||||
NUMBER OF COMMITTEE MEETINGS HELD LAST YEAR | 9 | 5 | 7 | 2 | 4 |
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(2) | Audit Committee Financial Expert |
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AUDIT COMMITTEE MEMBERS: R.B. Vincent (Chairman), R.W. Gochnauer, and M.S. Puccio.Audit Committee
The BoardAudit Committee (i) oversees the Company’s accounting and financial reporting processes and independent audits of Directorsthe financial statements; (ii) oversees the adequacy of internal controls relative to financial and business risk; (iii) monitors compliance with enterprise risk management policies; (iv) appoints, and approves the compensation of, the independent accountants; (v) monitors the independence of the independent registered public accounting firm and the performance of the independent accountants and the internal audit function; (vi) discusses with management, the general auditor and the independent auditor, policies with respect to risk assessment and risk management; (vii) provides a means for open communication among the Company’s independent accountants, management, internal audit staff and the Board; and (viii) oversees compliance with applicable legal and regulatory requirements.
Our Board has determined that alleach member of the Audit Committee members – Messrs. Vincentis considered to be financially literate under applicable New York Stock Exchange listing standards. Additionally, the Board has determined that Ms. Bort and Mr. Gochnauer and Ms. Puccio, qualify as “audit committee financial experts” in accordance with the applicable rules and regulations of the SEC. Each of the members of the Audit Committee is “independent” as defined by the New York Stock Exchange listing standards.
MEETINGSHELDLAST YEAR: 12
Compensation and Management Development Committee
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COMPENSATIONAND MANAGEMENT DEVELOPMENT COMMITTEE MEMBERS: M.O. Schlanger (Chairman), F.S. Hermance, E.E. Jones, and A. Pol.
Each of the memberscompensation consultant, ensuring such consultant’s independence.
Corporate Governance Committee
The Corporate Governance Committee (i) identifies nominees and reviews the qualifications of persons eligible to stand for election as Directors and makes recommendations to the Board; (ii) reviews and recommends candidates for committee membership and chairs; (iii) advises the Board with respect to significant developments in corporate governance matters; (iv) reviews and assesses the performance of the Board and each Committee; (v) reviews and recommends Director compensation; and (vi) reviews director and officer indemnification and insurance coverage.
Safety, Environmental and Regulatory Compliance Committee
The Safety, Environmental and Regulatory Compliance Committee is “independent” as defined by(i) reviews the New York Stock Exchange listing standards.adequacy of, and provides oversight with respect to, the Company’s safety, environmental and regulatory compliance policies, programs, procedures, initiatives and training; (ii) reviews operational risks associated with the Company’s businesses; (iii) reviews the Company’s policies and programs to promote cyber security; (iv) reviews reports regarding the Company’s code of ethical conduct for employees to the extent relating to safety, environmental and regulatory compliance matters; and (v) keeps abreast of the regulatory environment within which the Company operates.
MEETINGSHELDLASTYEAR: 8Executive Committee
The Committee has limited powers to act on behalf of the Board of Directors between regularly scheduled meetings on matters that cannot be delayed.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation and Management Development Committee are Messrs. Schlanger, Hermance, and Jones and Vincent and Mrs. Pol. Mr. Schlanger was a member of the Compensation and Management Development Committee during a portion of Fiscal 2016. None of the members is a former or
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current officer or employee of the Company or any of its subsidiaries, or is an executive officer of another company where an executive officer of UGI Corporation is a director.
Executive Committee
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EXECUTIVE COMMITTEE MEMBERS: M.O. Schlanger (Chairman), L.R. Greenberg, R.B. Vincent, and J.L. Walsh.
MEETINGS HELDLASTYEAR: 0
Corporate Governance Committee
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Selection and Evaluation of Board Candidates
The Corporate Governance Committee conducts an annual assessment of the composition of the Board and Committees and reviews with the Board the appropriate skills and characteristics required of Board members. The Committee seeks director candidates based upon a number of qualifications, including their independence, knowledge, judgment, character, leadership skills, education, experience, financial literacy, standing in the community, and ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths. The Committee seeks individuals who have a broad range of demonstrated abilities and accomplishments in areas of strategic importance to the Company, such as general management, finance, energy distribution, international business, law and public sector activities. Directors should also possess a willingness to challenge and stimulate management and the ability to work as part of a team in a collegial atmosphere. The Committee also seeks individuals who are capable of devoting the required amount of time to serve effectively on the Board and its Committees. With respect to incumbent Directors, the Committee also considers the past performance of the Director on the Board.each Director. As part of the annual process of selectingnominating independent Board candidates, the Committee obtains an opinion of the Company’s General Counsel that there is no reason to believe that the Board candidate is not “independent” as defined by the New York Stock Exchange listing standards.
The Corporate Governance Committee generally relies uponconsiders recommendations from a wide variety of its business contacts, including current non-management Directors, executive officers, community leaders, and shareholders as a source
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for potential Board candidates. The Committee may also useutilize the services of a third-party executive search firm to assist it in identifying and evaluating possible nominees for director. Mr. Hermance was recommendedThe Board reviews and has final approval of all potential director nominees for election to the Committee as a possible nominee by a third-party executive search firm.
The Committee conducts an annual assessment of the composition of the Board and Committees and reviews with the Board the appropriate skills and characteristics required of Board members. When considering whether the Board’s Directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to satisfy the oversight responsibilities of the Board, the Committee and the Board considered primarily the information about the backgrounds and experiences of the nominees contained under the caption “Nominees” on pages 12 to 15. In particular, with regard to Mr. Greenberg, the Board considered his executive leadership and vision demonstrated in leading the Company’s successful growth for more than 18 years, and his extensive industry knowledge and experience. With regard to Mr. Schlanger, the Board considered his senior management experience as Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of ARCO Chemical Company, a large public company, and his experience serving as chairman, director and committee member on the boards of directors of large public and private international companies, including his experience serving on boards of directors of public companies as a result of being nominated by a major shareholder. With regard to Mrs. Pol, the Board considered her significant experience as a senior executive managing high technology, traditional manufacturing and services businesses, including experience in human resource management, and her insight into government regulatory issues. With regard to Mr. Jones, the Board considered his extensive experience managing government and non-profit organizations as Chief Executive Officer, his public and private company directorship experience and his insight into workforce, regulatory, banking and legal issues. With regard to Mr. Walsh, the Board considered his appointment as Chief Executive Officer following Mr. Greenberg’s retirement, his experience managing the Company as Chief Operating Officer, his prior senior management experience with a global public company, and his broad industry knowledge and insight. With regard to Mr. Vincent, the Board considered his senior executive experience in banking and finance, and his extensive public and private company directorship and committee experience, including his experience as Chairman of the Board of a major mutual fund organization. With regard to Ms. Puccio, the Board considered her senior financial management experience with a global company and her extensive public accounting knowledge and experience. With regard to Mr. Gochnauer, the Board considered his experience as Chief Executive Officer of a large public company, his international business senior management experience, and his public and private company directorship experience. With regard to Mr. Hermance, the Board considered his senior management experience as a Chairman of the Board, Chief Executive Officer, President and Chief Operating Officer of a large global public company, his extensive international business experience, his public company directorship and committee experience, and his extensive mergers and acquisitions knowledge and experience.Board.
Written recommendations by shareholders for director nominees should be deliveredsubmitted to the Corporate Secretary, UGI Corporation, 460 North Gulph Road, King of Prussia,
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PA 19406. The Company’s Bylaws do not permit shareholders to nominate candidates from the floor at an annual meeting without notifying the Corporate Secretary 45 days prior to the anniversary of the mailing date of the Company’s proxy statement for the previous year’s annual meeting. Notification must include certain information detailed in the Company’s Bylaws. If you intend to nominate a candidate from the floor at an annual meeting,the Annual Meeting, please contact the Corporate Secretary.
The Company has also adopted (i) a Code of Ethics for the Chief Executive Officer and CORPORATE GOVERNANCE COMMITTEE MEMBERS: E.E. Jones (Chairman), M.O. Schlanger,R.W. Gochnauer.
UGI seeks regular engagement with investors in order to communicate our strategy and to solicit feedback from the investor community. Management periodically engages a third party to obtain independent feedback from our investors. In Fiscal 2016, we participated in a number of investor conferences, roadshows, meetings at our corporate office, and telephonic discussions with investors. These meetings occurred both in the United States and in Europe and were attended by various members of senior management, including our Chief Executive Officer, Chief Financial Officer, Treasurer, and/or senior members of our business segment management teams. Management periodically discusses feedback, including key themes and other insights gained from the investor outreach meetings, at the Company’s Board and Committee meetings, as appropriate. The Board of Directors, as well as the management team, values the perspectives of our investors as it helps us to understand and evaluate the effectiveness of our investor communications. Additionally, the Compensation and Management Development Committee takes into consideration the results of the membersannual advisory vote on the Company’s executive compensation program. At the 2016 Annual Meeting, over 96% of the Committee is “independent” as definedCompany’s shareholders showed their strong support by voting to approve the New York Stock Exchange listing standards.compensation of the Company’s named executive officers.
MEETINGSHELDLASTYEAR: 4
Safety, Environmental and Regulatory Compliance Committee
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SAFETY,ENVIRONMENTALANDREGULATORYCOMPLIANCE COMMITTEE MEMBERS: F.S. Hermance (Chairman), A. Pol and M.S. Puccio.
MEETINGSHELDLASTYEAR: 2
You may contact the Board of Directors, an individual non-management director, or the non-management Directors as a group by writing to them c/o UGI Corporation, P.O. Box 858, Valley Forge, PA 19482. These contact instructions have been posted on the Company’s website atwww.ugicorp.com under Investor Relations – Corporate Governance.
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Any communications directed to the Board of Directors, an individual non-management director, or the non-management Directors as a group from employees or others that concern complaints regarding accounting, financial statements, internal controls, ethical, or auditing matters will be handled in accordance with procedures adopted by the Audit Committee of the Board.Committee.
All other communications directed to the Board of Directors, an individual non-management director, or the non-management Directors as a group are initially reviewed by the General Counsel. The ChairmanCorporate Secretary. In the event the Corporate Secretary has any question as to whether the directors should be made aware of any issue raised, the Corporate Secretary shall be entitled to consult with the Chair of the Board in making such determination. The Corporate Governance Committee is advised promptly of any such communication that alleges misconductSecretary will distribute communications to the Board, an individual director, or to selected directors, depending on the part of Company management or raises legal, ethical or compliance concerns about Company policies or practices.
On a periodic basis, the Chairmancontent of the Corporate Governance Committee receives updates on other communications that raise issues related to the affairs of the Company but do not fall into the two prior categories. The Chairman of the Corporate Governance Committee determines which of these communications he would like to see.communication. The Corporate Secretary maintains a log of all such communications that is available for review for one year upon request of any member of the Board.
Typically, we do not forward to our Board of Directors communications from our shareholders or other parties that are of a personal nature or are not related to the duties and responsibilities of the Board, including, customer complaints,but not limited to, junk mail and mass mailings, resumes and other forms of job inquiries, opinion surveys and polls, and business solicitations.solicitations or advertisements.
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COMPENSATIONOF DIRECTORS |
The table below shows the components of director compensation for Fiscal 2013.2016. A Director who is an officer or employee of the Company or its subsidiaries is not compensated for service on the Board of Directors or on any Committee of the Board.
Director Compensation Table – Fiscal 2013 | ||||||||||||||||||||||||||||||||||||||||||
Director Compensation Table – Fiscal 2016 | Director Compensation Table – Fiscal 2016 | |||||||||||||||||||||||||||||||||||||||||
Name | Fees or Paid in Cash ($)(1) | Stock ($)(2) | Option ($)(3) | Non-Equity Plan | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other ($) | Total ($) |
| Fees Earned or Paid in Cash ($)(1) |
|
| Stock Awards ($)(2) |
|
| Option Awards ($)(3) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Change in Pension Value And Nonqualified Deferred Compensation Earnings ($)(4) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | ||||||||||||||||||||||||||||
S. D. Ban | 27,558 | 165,946 | 41,336 | 0 | 0 | 0 | 234,840 | |||||||||||||||||||||||||||||||||||
M. S. Bort | 96,667 | 126,235 | 40,779 | 0 | 0 | 0 | 263,681 | |||||||||||||||||||||||||||||||||||
R. W. Gochnauer | 80,438 | 98,513 | 41,336 | 0 | 0 | 0 | 220,287 | 90,000 | 118,151 | 40,779 | 0 | 0 | 0 | 248,930 | ||||||||||||||||||||||||||||
L. R. Greenberg | 200,000 | 0 | 0 | 0 | 0 | 0 | 200,000 | 108,965 | 0 | 0 | 0 | 0 | 0 | 108,965 | ||||||||||||||||||||||||||||
F. S. Hermance | 82,625 | 97,065 | 41,336 | 0 | 0 | 0 | 221,026 | 90,000 | 116,172 | 40,779 | 0 | 0 | 0 | 246,951 | ||||||||||||||||||||||||||||
E. E. Jones | 87,000 | 128,194 | 41,336 | 0 | 1,394 | 0 | 257,924 | 83,333 | 158,724 | 40,779 | 0 | 1,661 | 0 | 284,497 | ||||||||||||||||||||||||||||
A. Pol | 85,462 | 167,520 | 41,336 | 0 | 905 | 0 | 295,223 | 93,333 | 212,482 | 40,779 | 0 | 1,079 | 0 | 347,673 | ||||||||||||||||||||||||||||
M.S. Puccio | 82,000 | 104,426 | 41,336 | 0 | 0 | 0 | 227,762 | |||||||||||||||||||||||||||||||||||
M. O. Schlanger | 112,000 | 154,660 | 41,336 | 0 | 0 | 0 | 307,996 | 198,333 | 194,903 | 40,779 | 0 | 0 | 0 | 434,015 | ||||||||||||||||||||||||||||
J. B. Stallings, Jr. | 88,133 | 130,824 | 53,466 | 0 | 0 | 0 | 272,423 | |||||||||||||||||||||||||||||||||||
R. B. Vincent | 92,000 | 113,968 | 41,336 | 0 | 0 | 0 | 247,304 | 93,333 | 139,278 | 40,779 | 0 | 0 | 0 | 273,390 |
(1) | Annual Retainers. In Fiscal |
Mr. Greenberg’s amount reflects a pro-rated retainer for the number of months he served as Non-Executive Chairman of the Company’s Board of Directors during Fiscal 2013. Mr. Greenberg will not receive any equity compensation2016 and he received no equity awards for his service as Non-Executive Chairman.
(2) | Stock Awards. All non-management Directors, |
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retirement or termination of service. In the case of a change in control of the Company, the stock units and dividend equivalents will be paid in cash based on the fair market value of the Company’s common stock on the date of the change in control. The amounts shown in column (c) above represent the fair value of the awards of stock units on the date of grant. The assumptions used in the calculation of the amounts shown are included in Note 2 and Note |
(3) | Stock Options. All |
(4) | The amounts shown in column (f) represent above-market earnings on deferred compensation. Earnings on deferred compensation are considered above-market to the extent that the rate of interest exceeds 120 percent of the applicable federal long-term rate. For purposes of the Director Compensation Table, |
Notwithstanding anythingDirector Equity Plan Limits: The Company has a $500,000 annual limit with respect to individual Director equity awards. In establishing this limit, the contrary,Board of Directors considered competitive pay levels as well as the following reportsneed to retain its current Directors and attract new directors with the relevant skills and attributes desired in director candidates.
Stock Ownership Guidelines for Independent Directors: All independent directors are required to own Company common stock, together with stock units, in an aggregate amount equal to five times the Directors’ annual cash retainer and to achieve the target level of common stock ownership within five years after joining the Board.
POLICYFOR APPROVALOF RELATED PERSON TRANSACTIONS |
The Company’s Board of Directors has a written policy for the review and approval of Related Person Transactions. The policy applies to any transaction in which (i) the Company or any of its subsidiaries is a participant, (ii) any related person has a direct or indirect material interest, and (iii) the amount involved exceeds $120,000, except for any such transaction that does not require disclosure under SEC regulations. The Audit Committee of the Board of Directors, with assistance from the Company’s General Counsel, is responsible for reviewing, approving and ratifying related person transactions. The Audit Committee intends to approve or ratify only those related person transactions that are in, or not inconsistent with, the best interests of the Company and its shareholders.
REPORTOFTHE AUDIT COMMITTEEOFTHE BOARDOF DIRECTORS |
The Audit Committee is composed of independent Directors as defined by the rules of the New York Stock Exchange and acts under a written charter adopted by the Board of Directors. As described more fully in its charter, the role of the Committee is to assist the Board of Directors in its oversight of the quality and integrity of the Company’s financial reporting process. The Committee also has the sole authority to appoint, retain, fix the compensation of, and oversee the work of, the Company’s independent auditors.
In this context, the Committee has met and held discussions with management and the independent auditors to review and discuss the Company’s internal control over financial reporting, the interim unaudited financial statements, and the audited financial statements for Fiscal 2016. The Committee also reviewed management’s report on internal control over financial reporting, required under Section 404 of the Sarbanes-Oxley Act of 2002. As part of this review, the Committee reviewed the bases for management’s conclusions in that report and the report of the independent registered public accountants on the effectiveness of the Company’s internal control over financial reporting. The Committee has also discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with the independent auditors their independence.
Management has primary responsibility for the financial reporting process, including the system of internal controls, and for preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America. The Committee appointed Ernst & Young LLP (“EY”) to audit the Company’s financial statements as of and for the fiscal year ended September 30, 2016. EY was first engaged as the Company’s independent registered public accounting firm for the fiscal year ended September 30, 2015. The Committee considered a variety of factors in selecting EY as the Company’s independent registered public accounting firm, including the firm’s independence and internal quality controls, the overall depth of talent, and EY’s experience with the Company’s industry and companies of similar scale and size. In determining whether to reappoint EY as the Company’s independent registered public accounting firm for the year ending September 30, 2016, the Committee again took those factors into consideration along with its evaluation of the past performance of EY and EY’s familiarity with the Company’s business and internal control over financial reporting. EY’s audit report appears in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016. The Committee is responsible for the audit fee negotiations associated with the retention of EY.
The members of the Committee are not professionally engaged in the practice of auditing or accounting. The members of the Committee rely, without independent verification, on the information provided to them and on the representations made by management and the Compensationindependent auditors. Accordingly, the Committee’s considerations and Management Developmentdiscussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with auditing standards generally accepted in the United States of America, that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that our auditors are, in fact, “independent.”
Based upon the reviews and discussions described in this report, the Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, exceptrecommended to the extentBoard of Directors, and the Board of Directors approved, that the Company specifically incorporates this information by reference, and shall not otherwiseaudited financial statements be deemed filed under such Acts.included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 for filing with the SEC.
Audit Committee
M. Shawn Bort, Chair
Richard W. Gochnauer
James B. Stallings, Jr.
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In the course of its meetings, the Audit Committee considered whether the provision by Ernst & Young LLP of the professional services described below was compatible with Ernst & Young LLP’s independence. The Committee concluded that our independent registered public accounting firm is independent from the Company and its management.
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent accountants. In recognition of this responsibility, the Audit Committee has a policy of pre-approving audit and permissible non-audit services provided by the independent accountants. The Audit Committee has also delegated approval authority to its chair, such authority to be exercised in the intervals between meetings, in accordance with the Audit Committee’s pre-approval policy.
Prior to engagement of the Company’s independent registered public accounting firm for the next year’s audit, management submits to the Audit Committee for approval a list of services expected to be rendered during that year, and fees related thereto. The aggregate fees billed by Ernst & Young LLP, the Company’s independent registered public accountants in Fiscal 2016 and 2015, were as follows:
2016 | 2015 | |||||||
Audit Fees(1) | $ | 8,713,638 | $ | 7,221,244 | ||||
Audit-Related Fees(2) | $ | 116,940 | $ | 103,800 | ||||
Tax Fees(3) | $ | 62,894 | $ | 409,135 | ||||
All Other Fees(4) | $ | 10,000 | $ | 4,535 | ||||
|
|
|
| |||||
Total Fees for Services Provided | $ | 8,903,472 | $ | 7,738,714 |
(1) | Audit Fees for Fiscal 2016 and Fiscal 2015 were for audit services, including (i) the annual audit of the consolidated financial statements of the Company, (ii) statutory audits, (iii) review of the interim financial statements included in the Quarterly Reports on Form 10-Q of the Company, AmeriGas Partners, L.P. and UGI Utilities, Inc., (iv) audit services related to acquisitions in France and Hungary, and (v) services that only the independent registered public accounting firm can reasonably be expected to provide, including the issuance of comfort letters. |
(2) | Audit-Related Fees for Fiscal 2016 and Fiscal 2015 were related to audits of subsidiary financial statements and debt compliance letters. |
(3) | Tax Fees for Fiscal 2016 and 2015 were for tax compliance and advisory services at the Company and the Company’s subsidiaries. |
(4) | All Other Fees for Fiscal 2016 and Fiscal 2015 were for software license fees. |
REPORTOFTHE COMPENSATIONAND MANAGEMENT DEVELOPMENT COMMITTEE | ||||
OF THE BOARDOF DIRECTORS |
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on this review and discussion, the Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, the inclusion of the Compensation Discussion and Analysis in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 20132016 and the Company’s proxy statement for the 20142017 Annual Meeting of Shareholders.
Compensation and Management
Development Committee
Marvin O. Schlanger, ChairmanAnne Pol, Chair
Frank S. Hermance
Ernest E. Jones
Anne PolRoger B. Vincent
Notwithstanding anything to the contrary, the reports of the Compensation and Management Development Committee and the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
The Audit Committee is composed of independent Directors as defined by the rules of the New York Stock Exchange and acts under a written charter adopted by the Board of Directors. As described more fully in its charter, the role of the Committee is to assist the Board of Directors in its oversight of the quality and integrity of the Company’s financial reporting process. The Committee also has the sole authority to appoint, retain, fix the compensation of and oversee the work of the Company’s independent auditors.
In this context, the Committee has met and held discussions with management and the independent auditors to review and discuss the Company’s internal control over financial reporting, the interim unaudited financial statements, and the audited financial statements for Fiscal 2013. The Committee also reviewed management’s report on internal control over financial reporting, required under Section 404 of the Sarbanes-Oxley Act of 2002. As part of this review, the Committee reviewed the bases for management’s conclusions in that report and the report of the independent registered public accountants on the effectiveness of the Company’s internal control over financial reporting. The Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, and as adopted by the Public Company Accounting Oversight Board, and the independent auditors’ independence. In addition, the Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence.
Management has primary responsibility for the financial reporting process, including the system of internal controls, and for preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.
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The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America. The Committee’s responsibility is to monitor and review these processes.
The members of the Committee are not professionally engaged in the practice of auditing or accounting. The members of the Committee rely, without independent verification, on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with auditing standards generally accepted in the United States of America, that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that our auditors are, in fact, “independent.”
PricewaterhouseCoopers LLP has served as the Company’s independent registered public accounting firm since 2003. Their audit report appears in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013. In accordance with sound corporate governance practices and to ensure that the Committee and our shareholders are receiving the best and most cost-effective audit services available, the Committee has determined that it is in the best interests of the Company and its shareholders to commence a request for proposal process for audit services during the 2014 fiscal year. PricewaterhouseCoopers LLP will be invited to participate in that process.
Based upon the reviews and discussions described in this report, the Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013 for filing with the SEC.
Audit Committee
Roger B. Vincent, Chairman
Richard W. Gochnauer
M. Shawn Puccio
In the course of its meetings, the Audit Committee considered whether the provision by PricewaterhouseCoopers LLP of the professional services described below was compatible with PricewaterhouseCoopers LLP’s independence. The Committee concluded that our independent registered public accounting firm is independent from the Company and its management.
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent accountants. In recognition of this responsibility, the Audit Committee has a policy of pre-approving all audit and permissible non-audit services provided by the independent accountants.
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Prior to engagement of the Company’s independent registered public accounting firm for the next year’s audit, management submits to the Audit Committee for approval a list of services expected to be rendered during that year, and fees related thereto. The aggregate fees billed by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, in Fiscal 2013 and 2012 were as follows:
2013 | 2012 | |||||||
Audit Fees(1) | $ | 4,432,304 | $ | 5,354,898 | ||||
Audit-Related Fees | 11,000 | 47,500 | ||||||
Tax Fees(2) | 634,825 | 697,164 | ||||||
All Other Fees(3) | 160,353 | 72,500 | ||||||
|
|
|
| |||||
Total Fees for Services Provided | $ | 5,238,482 | $ | 6,172,062 |
As a result of the Audit Committee’s decision to conduct a request for proposal process for audit services, the Company’s shareholders are not being asked to ratify the appointment of any auditor as the Company’s independent registered public accounting firm for Fiscal 2014.
The Company’s Board of Directors has a written policy for the review and approval of Related Person Transactions. The policy applies to any transaction in which (i) the Company or any of its subsidiaries is a participant, (ii) any related person has a direct or indirect material interest, and (iii) the amount involved exceeds $120,000, except for any such transaction that does not require disclosure under SEC regulations. The Audit Committee of the Board of Directors, with assistance from the Company’s General Counsel, is responsible for reviewing, approving and ratifying related person transactions. The Audit Committee intends to approve or ratify only those related person transactions that are in, or not inconsistent with, the best interests of the Company and its shareholders.
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COMPENSATION DISCUSSION A |
IntroductionINTRODUCTION
In this COMPENSATION DISCUSSIONAND ANALYSIS,Compensation Discussion and Analysis, we address the compensation paid or awarded to the following executive officers: John L. Walsh, our President and Chief Executive Officer since April 1, 2013, and our President and Chief Operating Officer through March 31, 2013;Officer; Kirk R. Oliver, our Chief Financial Officer; Lon R. Greenberg, our non-executive Chairman of the Board of Directors and, through March 31, 2013, our Chief Executive Officer; Jerry E. Sheridan, President and Chief Executive Officer of AmeriGas Propane;Propane, Inc. (“AmeriGas Propane”); Roger Perreault, President of UGI International, LLC (“UGI International”); and Monica M. Gaudiosi, our Vice President, General Counsel and Secretary; and Bradley C. Hall, Vice President – New Business Development.Secretary. We refer to these executive officers as our “named executive officers” for Fiscal 2013.2016.
Compensation decisions for Messrs.Mr. Walsh Oliver, Greenberg, and Hall and Ms. Gaudiosi were made by the independent members of our Board of Directors after receiving the recommendations of its Compensation and Management Development Committee, while compensation decisions for Messrs. Oliver and Perreault and Ms. Gaudiosi were made by the Compensation and Management Development Committee. Compensation decisions for Mr. Sheridan were made by the independent members of the Board of Directors of AmeriGas Propane, the General Partner of AmeriGas Partners, L.P. (“AmeriGas Partners”), after receiving the recommendation of its Compensation/Pension Committee. For ease of understanding, we will use the term “we” to refer to UGI Corporation and AmeriGas Propane, and the term “Committee” or “Committees” to refer to the UGI Corporation Compensation and Management Development Committee and/or the AmeriGas Propane Inc. Compensation/Pension Committee, as appropriate, in the relevant compensation decisions,discussions, unless the context indicates otherwise. We refer to our 2013, 2012, and 2011 fiscal years as “Fiscal 2013,” “Fiscal 2012,” and “Fiscal 2011,” respectively.
Mr. Greenberg retired as Chief Executive Officer of UGI Corporation, effective April 1, 2013. Mr. Greenberg received a prorated salary in Fiscal 2013 based on his retirement date. In addition, Mr. Greenberg received a prorated annual bonus primarily based on his target bonus award opportunity. Mr. Greenberg also received compensation for his role as non-executive Chairman of the Boards of Directors of UGI Corporation, UGI Utilities, Inc. and AmeriGas Propane during Fiscal 2013. See Compensation of Directors – Director Compensation Table –Fiscal 2013 and accompanying narrative for additional information.
Executive SummaryEXECUTIVE SUMMARY
|
Our compensation program for named executive officers is designed to:to provide a competitive level of total compensation; motivate and encourage our executives to contribute to our financial success; retain talented and experienced executives; and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value. As set forth in this Compensation Discussion and Analysis, the level of compensation received by the Company’s named executive officers in Fiscal 2016 reflects outstanding performance by the Company during Fiscal 2016 as well as the Company’s outstanding returns to its shareholders.
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The following are some of the Company’s Fiscal 2016 highlights:
• Fiscal 2016 earnings per share of $2.08 and adjusted earnings per share1 (“Adjusted EPS”) of $2.05 were new earnings records for the Company. • The Board of Directors increased the annual dividend by approximately 4.4% (29th consecutive year of annual dividend increases). • Significant progress was made on growth projects and the integration of Finagaz in France in Fiscal 2016. • As illustrated in the following chart, the Company’s one-year stock performance exceeded both the S&P 500 Utilities Index and the peer group referenced by the Committee for purposes of the Company’s long-term compensation plan. |
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1UGI Corporation’s Fiscal 2016 earnings per share is adjusted to exclude (i) the impact of net gains on commodity derivative instruments not associated with current period transactions ($0.17 per diluted share), (ii) integration expenses associated with the Finagaz acquisition in France ($0.10 per diluted share), and (iii) loss on extinguishments of debt ($0.04 per diluted share).
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The following chart provides a brief summary ofsummarizes the principal elements of our Fiscal 2016 executive compensation program for Fiscal 2013.program. We describe these elements, as well as retirement, severance and other benefits, in more detail later in this COMPENSATION DISCUSSIONAND ANALYSIS.Compensation Discussion and Analysis.
Principal Components of Compensation Paid to Named Executive Officers in Fiscal 20132016
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| Fiscal 2016 Compensation | ||||||
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| |||||||
Salary |
| Compensate | Merit salary increases | |||||
Annual Bonus Awards | Motivate | Target incentives ranged from Actual
| ||||||
financial goals. | ||||||||
Long-Term | ||||||||
Stock Options | Align executive interests with shareholder interests; create a strong financial incentive for achieving or exceeding long-term | The |
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Performance Units (UGI Corporation) | Align executive interests with shareholder interests; create a strong financial incentive for achieving long-term performance goals by encouraging total Company shareholder return that compares favorably to other utility-based | The number of performance units awarded in Fiscal 2016 ranged from 7,500 to 50,000. Performance units (payable in UGI Corporation common stock, other than for Mr. Sheridan) will be earned based on total shareholder return (“TSR”) of Company stock | ||||||
Performance Units (AmeriGas Partners) | Align executive interests with unitholder interests; create a strong financial incentive for achieving long-term performance goals by encouraging total AmeriGas unitholder return that compares favorably to other energy master limited partnerships and its two propane peer companies; further align Mr. Sheridan’s long-term compensation with strategic goals and objectives related to customer gain/loss performance. | A portion of Mr. Sheridan’s performance units will be payable in AmeriGas Partners common units based on total unitholder return (“TUR”) relative to master limited partnerships in the Alerian MLP Index, modified by AmeriGas Partners’ TUR performance as compared to the other two propane distribution companies in the Alerian MLP Index, over a three-year period. The remaining portion of Mr. Sheridan’s performance units will be payable in AmeriGas Partners common units subject to achievement of a customer gain/loss metric. | ||||||
Restricted Units | Attract and retain a new executive. | In connection with Mr. Perreault’s commencement of employment, he received a restricted unit award of 12,000 shares of UGI Corporation common stock with a vesting date of December 7, 2018. |
• | Link Between Our Financial Performance
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The Committee sets rigorous goals for our executive officers that are directly tied to the Company’s financial performance and our total return to our shareholders, and in the case of AmeriGas Partners, our total return to our unitholders. We believe that the performance-based components of our compensation program, namely our stock options and performance units, have effectively linked our executives’ compensation to our financial performance. The following table is providedcharts set forth the Company’s Adjusted EPS performance from Fiscal 2014 through Fiscal 2016 as supplemental information because we believe it illustrates a clear picturewell as the Company’s three-year stock performance compared to the S&P Utilities Index and the Russell MidCap Utilities Index (exclusive of telecommunications companies) (“Adjusted Russell MidCap Utilities Index”), the peer group referenced by the Committee for purposes of the Company’s long-term compensation plan.
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To better illustrate the total direct performance-based compensation paid or awarded to Mr. Walsh in Fiscal 2013, 20122016, 2015 and 2011.2014, the following table is provided as supplemental information. A comparable illustration would apply to our other named executive officers. The information in the supplemental table below differs from the information in the Summary Compensation Table in several ways. Specifically, the table below omits the columns captioned “Change in Pension Value and Nonqualified Deferred Compensation Earnings” and “All Other Compensation” because these amounts are not considered in establishing annual total cash compensation and total direct compensation and some of the amounts in those columns of the Summary Compensation Table can vary significantly from year to year. The table below shows Mr. Walsh’s direct compensation for the last three fiscal years. Mr. Walsh’s actual (or estimated in the case of performance related to Fiscal 2013)2016) three-year long-term performance unit payout values andpayouts during the intrinsic valueperiod clearly demonstrate shareholder returns for the Company that are in excess of stock options awarded tothe returns of most companies included in the Company’s peer group. Similarly, the amount Mr. Walsh based on UGI’s stock price on September 30, 2013.received as non-equity incentive compensation under the Company’s annual bonus plan is directly linked to the Company’s annual financial performance in each of Fiscal 2016, 2015 and 2014, as more clearly illustrated in Short-Term Incentives – Annual Bonuses below.
Fiscal Year | Salary | Non-Equity Incentive Comp/ Bonus | Performance Unit Payout(1) | Total Intrinsic Value of Stock Options in Fiscal 2013 (Valued at 9/30/13) | Total Direct Compensation | |||||||||||
2013(2) | $ | 861,710 | $ | 902,454 | $910,842(3) | $840,520 | $ | 3,515,526 | ||||||||
2012 | $ | 701,470 | $ | 413,478 | $597,764(4) | $1,216,250 | $ | 2,928,962 | ||||||||
2011 | $ | 674,040 | $ | 558,494 | $0 | $943,750 | $ | 2,176,284 |
Fiscal Year | Salary | Non-Equity Incentive Compensation | Performance Unit Payout(1) | Intrinsic Value of Stock Options in Fiscal 2016 (Valued at 9/30/16) | Total Direct Compensation | |||||||||||||||
2016 | $ | 1,133,704 | $ | 1,159,212 | $ | 5,832,540 | (2) | $ | 3,788,400 | $ | 11,913,856 | |||||||||
2015 | $ | 1,079,728 | $ | 1,604,745 | $ | 4,840,440 | (3) | $ | 2,221,560 | $ | 9,746,473 | |||||||||
2014 | $ | 1,028,300 | $ | 1,974,336 | $ | 3,036,515 | (4) | $ | 7,128,000 | $ | 13,167,151 |
(1) | Payout calculated for three-year performance periods based on calendar years, not fiscal years. |
(2) |
Estimated based on performance through |
(3) | Actual payout for the 2013-2015 performance period based on the Company’s rank equal to the 88th percentile compared to its peer group. |
(4) | Actual payout for the |
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In 2013, we were ranked in the top quartile in a survey of the Fortune 500 companies for total return to shareholders over the last 10 years. The Committee sets rigorous goals for our executive officers that are directly tied to the Company’s financial performance and our total return to our shareholders, and in the case of AmeriGas Partners, our total return to our unitholders. We believe that the principal performance-based components of our compensation program have effectively linked our executives’ compensation to our financial performance, as indicated below.
Short-Term Incentives — Annual Bonuses
Our annual bonuses are directly tied to one key financial metricmetrics for each executive—earnings per share (“EPS”) (in the case ofexecutive. For Messrs. Walsh and Oliver and GreenbergMs. Gaudiosi, the financial metric is Adjusted EPS (as previously defined) and Ms. Gaudiosi), net incomefor Mr. Perreault, the metric is adjusted earnings before interest and taxes of UGI Energy Services, Inc.International, adjusted to exclude the impact of net gains on commodity derivative instruments not associated with current period transactions at UGI International and its subsidiariesintegration expenses associated with the Finagaz acquisition in France (“UGI Energy Services”Adjusted EBIT”) (in the case of. Mr. Hall) andSheridan’s annual bonus is tied to AmeriGas Propane’s earnings before interest, taxes, depreciation and amortization, (“EBITDA”), adjusted to exclude acquisition and transition expenses related to heritagethe impact of net gains on commodity derivative instruments not associated with current period transactions at AmeriGas Propane acquisition (“Adjusted EBITDA”) for 90 percent of the total bonus opportunity and a customer service-related goal for 10 percent of the bonus opportunity. The Adjusted EBITDA result for Mr. Sheridan is then modified for customer growth (inbased on the caseachievement of Mr. Sheridan). a safety performance goal.
As illustrated in the chart below, chart, when the Company’s Adjusted EPS exceeds the targeted goal, the annual bonus percentage paid to a named executive officer exceeds the targeted payout amount. Similarly, when Adjusted EPS is below the targeted goal, the annual bonus percentage paid to a named executive officer is less than the targeted payout amount. The forgoingforegoing correlation between the Adjusted EPS and bonus payout amounts would also be true with respect to the correlation between (i) Adjusted EBITDAEBIT and Mr. Sheridan’sPerreault’s bonus payout and (ii) UGI Energy Services’ net incomeAdjusted EBITDA and Mr. Hall’sSheridan’s bonus payout. Each Committee has discretion under our executive annual bonus plans to (i) adjust Adjusted EPS, Adjusted EBIT and Adjusted EBITDA for extraordinary items or other events as the Committee deems appropriate, and (ii) increase or decrease the amount of an award determined to be payable under the bonus plan by up to 50 percent. See COMPENSATION DISCUSSION AND ANALYSISCOMPENSATION DISCUSSION AND ANALYSIS — Elements of Compensation — Annual Bonus Awards.Awards, beginning on page 30. The following table demonstrates the strong link between Company financial performance and bonus payout percentages by illustrating that the Company’s improved EPS during each of the last three fiscal years directly correlates to the bonus payouts for our executives.
Fiscal Year | UGI Corporation Targeted EPS Range | UGI Corporation Actual EPS | % of Target Bonus Paid to UGI named executive officers(1) | |||||||
2013 | $ | 2.45-$2.55 | $ | 2.39 | (2) | 95.9% | ||||
2012 | $ | 2.35-$2.45 | $ | 1.76 | 62.0% | |||||
2011 | $ | 2.30-$2.40 | $ | 2.06 | 88.7% | |||||
2010 | $ | 2.20-$2.30 | $ | 2.36 | 107.3% | |||||
2009 | $ | 2.10-$2.20 | $ | 2.36 | 149.1% |
Fiscal Year | UGI Corporation Targeted Adjusted EPS Range | UGI Corporation Adjusted EPS for Bonus | % of Target Bonus Paid | |||||||||
2016 | $ | 2.15-$2.30 | $ | 2.05 | 81.8 | % | ||||||
2015 | $ | 1.88-$1.98 | $ | 2.02 | 118.9 | % | ||||||
2014 | $ | 1.73-$1.80 | $ | 1.98 | 160.0 | % |
Long-Term Incentive Compensation
- 32 -Our long-term incentive compensation program, principally comprised of stock options and performance units, is intended to create a strong financial incentive for achievement of the Company’s long-term performance goals. In addition, linking equity to compensation aligns our executives’ interests with shareholder interests.
Long-Term Incentives — Stock Options
Stock option values reported in the Summary Compensation Table reflect the valuation methodology mandated by SEC regulations, which is based on grant date fair value as determined under generally accepted accounting principles in the United States (“GAAP”). Therefore, the amounts shown under “Option Awards” in the Summary Compensation Table do not reflect performance of the underlying shares subsequent to the grant date. From the perspective of our executives,executives’ perspectives, the value of a stock option is based on the excess of the market price of the underlying shares over the exercise price (sometimes referred to as the “intrinsic value”) and, therefore, is directly affected by market performance of the Company’s stock. As further demonstrated bya result of the following table, which pertains to stock options granted in Fiscal 2013 to Mr. Walsh,Company’s performance, the fiscal year-end intrinsic value of the options granted to our executives during Fiscal 20132016 is lessmore than the amounts set forth in column (f) of the Summary Compensation Table. Given the outstanding returns to our shareholders, the intrinsic value of management’s stock options is higher than the value in the Summary Compensation Table, thereby evidencing a strong alignment of management’s compensation with shareholder returns. The table below illustrates the intrinsic value of the stock options granted to Mr. Walsh in Fiscal 2016, 2015 and 2014, respectively.
Fiscal Year | Number of Shares Underlying Options Granted to Mr. Walsh | Summary Compensation Table Option Awards Value | Exercise Price Per Share | Price Per Share at 9/30/13 | Total Intrinsic Value of Options at 9/30/13 | |||||||||||
2013 | 205,000 | $ | 1,060,319 | (1 | ) | $ | 39.13 | $840,520 | ||||||||
2012 | 125,000 | $ | 543,065 | $ | 29.40 | $ | 39.13 | $1,216,250 | ||||||||
2011 | 125,000 | $ | 678,750 | $ | 31.58 | $ | 39.13 | $943,750 |
Fiscal Year | Number of Shares Underlying Options Granted to Mr. Walsh | Summary Compensation Table Option Awards Value | Exercise Price Per Share | Price Per Share at 9/30/16 | Total Intrinsic Value of Options at 9/30/16 | |||||||||||||||
2016 | 330,000 | $ | 1,581,030 | $ | 33.76 | $ | 45.24 | $ | 3,788,400 | |||||||||||
2015 | 306,000 | $ | 1,705,338 | $ | 37.98 | $ | 45.24 | $ | 2,221,560 | |||||||||||
2014 | 405,000 | $ | 1,992,060 | $ | 27.64 | $ | 45.24 | $ | 7,128,000 |
Long-Term Incentives — Performance Units
The performancePerformance units are valued upon grant date in accordance with SEC regulations, based on grant date fair value as determined under GAAP. Nevertheless, the actual number of shares or partnership units ultimately awarded is entirely dependent on the total shareholder return (“TSR”)TSR on UGI Corporation common stock relative to a competitive peer group (or, in the case of Mr. Sheridan, total unitholder return (“TUR”)TUR on AmeriGas Partners’ common units),units relative to a competitive peer group and achievement of a customer gain/loss goal), which will not be finally determined with respect to performance units granted in Fiscal 20132016 until the end of 2015.calendar year 2018.
The following tables showtable shows the correlation between (i) levels of UGI Corporation TSR and AmeriGas Partners TUR, and long-term incentive compensation paid in Fiscal 2013, Fiscal 2012 and Fiscal 2011,each of the previous four fiscal years, and (ii) the estimated payout for fiscal year 2013in Fiscal 2017 using November 30, 2013,October 31, 2016, instead of December 31, 2013,2016, as the end of the three-year performance period. The tablestable also comparecompares UGI CorporationCorporation’s TSR and AmeriGas Partners TUR to the average shareholder and unitholder return of their respectivethe Company’s peer groups.group. As of October 31, 2016, AmeriGas Partners’ TUR ranked 3rd in its peer group, resulting in an estimated payout in Fiscal 2017 of 200 percent. AmeriGas Partners’ TUR ranked 10th in its peer group for the three-year period ended December 31, 2015, resulting in a 162.5 percent payout during Fiscal 2016. AmeriGas Partners’ TUR in the prior three fiscal years was below the threshold for payment.
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Performance Period (Calendar Year) | UGI Corporation Total Shareholder Return Ranking Relative to Peer Group | UGI Corporation Total Shareholder Return(1) | Total Average Shareholder Return of Peer Group (Excluding UGI Corporation) | UGI Corporation Performance Unit Payout as a Percentage of Target | ||||||
2011 — 2013 (2) | 22nd out of 40 (46th percentile) | 45.6% | 51.5% | 80.8% | ||||||
2010 — 2012 | 19th out of 32 (42nd percentile) | 46.9% | 45.4% | 59.7% | ||||||
2009 — 2011 | 24thout of 34 (30thpercentile) | 35.4% | 50.8% | 0 % | ||||||
2008 — 2010 | 2ndout of 32 (97thpercentile) | 27.3% | -9.3% | 191.9% |
Performance Period (Calendar Year)
| UGI Corporation Total Shareholder Return Ranking Relative to Peer Group
| UGI Corporation Total Shareholder Return(1)
| Total Average Shareholder Return of Peer Group (Excluding UGI Corporation)
| UGI Corporation Performance Unit Payout as a Percentage of Target
| ||||||||||
2014 — 2016(2)
| 4th out of 34 (91st percentile)
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| 77.0
| %
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| 33.3
| %
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| 200.0
| %
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2013 — 2015
| 5th out of 36 (88th percentile)
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| 74.9
| %
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| 38.5
| %
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| 196.4
| %
| ||||
2012 — 2014
| 2nd out of 39 (97th percentile)
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| 113.5
| %
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| 55.9
| %
|
| 193.4
| %
| ||||
2011 — 2013
| 20thout of 40 (50th percentile)
|
| 46.8
| %
|
| 50.1
| %
|
| 100.0
| %
| ||||
2010 — 2012
| 19thout of 32 (42nd percentile)
|
| 46.9
| %
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| 45.4
| %
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| 59.7
| %
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(1) | Calculated in accordance with the |
(2) | Estimated |
Performance Period (Calendar Year) | AmeriGas Partners Total Unitholder Return Ranking Relative to Peer Group | AmeriGas Partners Total Unitholder Return(1) | Total Average Unitholder Return of Peer Group (Excluding AmeriGas Partners) | AmeriGas Partners Performance Unit Payout as a Percentage of Target | ||||||||||||
2011 — 2013 (2) | 37th out of 46 (20th percentile) | 14.5% | 48.6% | 0% | ||||||||||||
2010 — 2012 | 34th out of 44 (23rd percentile) | 35.2% | 80.5% | 0% | ||||||||||||
2009 — 2011 | 12thout of 19 (39thpercentile) | 96.7% | 131.7% | 0% | ||||||||||||
2008 — 2010 | 6thout of 19 (74thpercentile) | 63.7% | 56.5% | 147.8% |
As noted below, beginning with performance units granted in Fiscal 2011, total shareholder returnTSR for UGI Corporation is compared to companies in the Russell MidCap Utilities Index (exclusive of telecommunications companies) (“Adjusted Russell MidCap Utilities Index”),Index, rather than to companies in the S&P Utilities Index. In addition, beginning in Fiscal 2010, total unitholder returnTUR for AmeriGas Partners is compared to the energy master limited partnerships and limited liability companies in the Alerian MLP Index, rather thanIndex. For Mr. Sheridan’s Fiscal 2014 performance unit award, the Committee adopted a second relative total return metric comparing AmeriGas Partners’ TUR to the groupTUR of selected publicly-traded limited partnerships engagedthe other two retail propane distribution companies included in the Alerian MLP Index. The Committee replaced this second relative return metric for Mr. Sheridan’s Fiscal 2016 and Fiscal 2015 performance unit awards with a metric tied to AmeriGas Partners’ customer gain/loss performance. The Committee then added a modifier to the portion of Mr. Sheridan’s Fiscal 2016 and Fiscal 2015 performance unit awards tied to AmeriGas Partners’ TUR performance compared to the Alerian MLP Index based on AmeriGas Partners’ performance compared to the other two retail propane pipeline and coal industries.distribution companies included in the Alerian MLP Index.
The link between the Company’s financial performance and our executive compensation program is evident in the supplemental tables provided above. The Committees believe there is an appropriate link between executive compensation and the Company’s performance.
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Compensation and Corporate Governance Practices |
The Committee seeksCommittees seek to implement and maintain sound compensation and corporate governance practices, which include the following:
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The Committee is composed entirely of directors who are independent, as defined in the corporate governance listing standards of the New York Stock Exchange.
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The CompensationCommittee utilizes the services of Pay Governance LLC (“Pay Governance”), an independent outside compensation consultant. The Committee believes that, during Fiscal 2013,2016, there was no conflict of interest between Pay Governance and the Compensation Committee. Additionally, the Compensation Committee believes that Pay Governance was independent. In reaching the foregoing conclusions, the Compensation Committee considered the factors set forth by the New York Stock Exchange regarding compensation committee advisor independence.
The Company allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2016, 81 percent of the principal compensation components, in the case of Mr. Walsh, and 70 percent to 75 percent of the principal compensation components, in the case of all other named executive officers, were variable and tied to financial performance or TSR.
The Company awards a substantial portion of compensation in the form of long-term awards, namely stock options and performance units, so that executive officers’ interests are aligned with the interests of shareholders (unitholders in the case of Mr. Sheridan) and long-term Company performance.
Annual bonus opportunities for the named executive officers are based primarily on key financial metrics. Similarly, long-term incentives are based on UGI Corporation common stock values and relative stock price performance. Long-term incentives for Mr. Sheridan are based on (i) AmeriGas Partners common unit values and relative common unit performance and (ii) customer gain/loss performance.
We require termination of employment for payment under our change in control agreements (referred to as a “double trigger”). In addition, beginning in January of 2015, we require a double trigger for the accelerated vesting of equity awards in the event of a change in control. We also have not entered into change in control agreements providing for tax gross-up payments under Section 280G of the Internal Revenue Code since 2010. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52.
We have meaningful stock ownership guidelines. See COMPENSATION DISCUSSION AND ANALYSIS — Stock Ownership Guidelines, beginning on page 41.
We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement due to material non-compliance with financial reporting requirements.
We have a policy prohibiting the Company’s Directors and executive officers from (i) hedging the securities of UGI Corporation and AmeriGas Partners, (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, and (iii) pledging the securities of UGI Corporation and AmeriGas Partners.
Compensation Philosophy and ObjectivesCOMPENSATION PHILOSOPHY AND OBJECTIVES
Our compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder and common unitholder value.
In Fiscal 2013,2016, the components of our compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards, and UGI Corporation stock option grants)grants and one restricted unit award), perquisites, retirement benefits and other benefits, all as described in greater detail in this COMPENSATION DISCUSSION AND ANALYSIS.Compensation Discussion and Analysis. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our annual and long-term goals.
Determination of Competitive CompensationDETERMINATION OF COMPETITIVE COMPENSATION
In determining Fiscal 20132016 compensation, the Committees engaged Pay Governance as their compensation consultant. The primary duties of Pay Governance were to:
provide the Committees with independent and objective market data; conduct compensation analyses; review and advise on pay programs and salary, target bonus and long-term incentive levels applicable to our executives; review components of our compensation program as requested from time to time by the Committees and recommend plan design changes, as appropriate; and provide general consulting services related to the fulfillment of the Committees’ charters.
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Pay Governance has not provided actuarial or other services relating to pension and post-retirement plans or services related to other benefits to us or our affiliates, and generally all of its services are those that it provides to the Committees. Pay Governance has provided market data for positions below the senior executive level as requested by management as well as market data for director compensation, but its fees for this work historically are modest relative to its overall fees.
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In assessing competitive compensation, we referenced market data provided to us in Fiscal 20122015 by Pay Governance. Pay Governance provided us with two reports: the “2012“2015 Executive Cash Compensation Review” and the “2012“2015 Executive Long-Term Incentive Review.” We do not benchmark against specific companies in the databases utilized by Pay Governance in preparing its reports. Our Committees do benchmark, however, by using Pay Governance’s analysis of compensation databases that include numerous companies as a reference point to provide a framework for compensation decisions. Our Committees exercise discretion and also review other factors, such as internal equity (both within and among our business units) and sustained individual and company performance, when setting our executives’ compensation.
In order to provide the Committee with data reflecting the relative sizes of UGI’s nonutility and utility businesses, Pay Governance first referenced compensation data for comparable executive positions in each of the Towers Watson 20122015 General Industry Executive Compensation Database (“General Industry Database”) and the Towers Watson 20122015 Energy Services Executive Compensation Database (“Energy Services Database”). Towers Watson’s General Industry Database is comprised of approximately 435450 companies from a broad range of industries, including oil and gas, aerospace, automotive and transportation, chemicals, computer, consumer products, electronics, food and beverages, metals and mining, pharmaceutical and telecommunications. The Towers Watson Energy Services Database is comprised of approximately 95115 companies, primarily utilities. For Messrs. Walsh Oliver, Greenberg and HallOliver and Ms. Gaudiosi, Pay Governance weighted the General Industry Database survey data 75 percent and the Energy Services Database survey data 25 percent and added the two. For example, if the relevant market rate for a particular executive position derived from information in the General Industry Database was $100,000 and the relevant market rate derived from information in the Energy Services Database was $90,000, Pay Governance would provide us with a market rate of $97,500 for that position (($100,000 x 75 percent = $75,000) plus ($90,000 x 25 percent = $22,500)). The impact of weighting information derived from the two databases is to obtain a market rate designed to approximate the relative sizes of our nonutility and utility businesses. For Mr.Messrs. Sheridan and Perreault, we referenced Towers Watson’s 20122015 General Industry Database. The identities of the companies that comprise the databases utilized by Pay Governance have not been disclosed to us by Pay Governance.
We generally seek to position a named executive officer’s salary grade so that the midpoint of the salary range for his or her salary grade approximates the 50thpercentile of the “going rate” for comparable executives included in the executive compensation database material referenced by Pay Governance. By comparable executive, we mean an executive having a similar range of responsibilities and the experience to fully perform these responsibilities. Pay Governance size-adjusted the survey data to account for the relative revenues of the survey companies in relation to ours. In other words, the adjustment reflects the expectation that a larger company would be more likely to pay a higher amount of compensation for the same position than a smaller company. Using this adjustment, Pay Governance developed going rates for positions comparable to those of our executives, as if
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the companies included in the respective databases had revenues similar to ours. We believe that Pay Governance’s application of size adjustments to applicable positions in these databases is an appropriate method for establishing market rates. After consultation with Pay Governance, we considered salary grade midpoints that were within 15 percent of the median going rate developed by Pay Governance to be competitive.
Salary |
Salary is designed to compensate executives for their level of responsibility and sustained individual performance. We pay our executive officers a salary that is competitive with that of other executive officers providing comparable services, taking into account the size and nature of the business of UGI Corporation,the Company, AmeriGas Partners or UGI Energy Services,International, as the case may be.
As noted above, we seek to establish the midpoint of the salary grade for the positions held by our named executive officers at approximately the 50th50th percentile of the going rate for executives in comparable positions. Based on the data provided by Pay Governance in July 2012,2015, we increased the range of salary in each salary grade for Fiscal 2016 for each named executive officer, other than Mr. Greenberg,Walsh, by 1.52 percent. The Committee established Mr. Greenberg’sWalsh’s Fiscal 20132016 salary grade midpoint at the market median of comparable executives as identified by Pay Governance based on its analysis of the executive compensation databases. For Mr. Greenberg,Walsh, this resulted in an increasea decrease of the range of salary in his salary grade from the prior year of approximately 51.4 percent.
For Fiscal 2013,2016, the merit increases were targeted at 2.53 percent, but individual increases varied based on performance evaluations and the individual’s position within the salary range. Performance evaluations were based on qualitative and subjective assessments of each individual’s contribution to the achievement of our business strategies, including the development of growth opportunities and leadership in carrying out our talent development program. Messrs. GreenbergWalsh and Sheridan, in their capacities as chief executive officers of UGIthe Company and AmeriGas Propane, respectively, had additional goals and objectives for Fiscal 2013,2016, as established during the first fiscal quarter of Fiscal 2013.2016. Mr. Greenberg’sWalsh’s annual goals and objectives included the development of the Company’s senior management team, the recruitment of experienced individuals to fill key roles within the organization, the enhancement of organizational processes, achievement of annual financial goals, the transition of Chief Executive duties and responsibilities to Mr. Walsh, collaboration with Mr. Walsh on a succession plan for senior leadership of the Company and its subsidiaries,strategic goals, and leadership in identifying investment opportunities for the Company and its subsidiaries. Mr. Sheridan’s annual goals and objectives for Fiscal 20132016 included achievement of annual financial goals, establishment of a customer advocacy function to improve customer serviceleadership development objectives, and implementation of AmeriGas Propane’s growth strategies.strategies, including with respect to customer growth and retention and customer service initiatives. All named executive officers received a salary in Fiscal 20132016 that was within 8290 percent to 117111 percent of the midpoint for his or her salary range.
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The following table sets forth each named executive officer’s Fiscal 20132016 salary.
Percentage Increase | ||||||||||||||
Name | Salary | over Fiscal 2012 Salary | Salary | Percentage Increase over Fiscal 2015 Salary | ||||||||||
John L. Walsh | $ | 861,710 | (1) | 6.0%(1) | $ | 1,133,704 | 5.0 | % | ||||||
Kirk R. Oliver | $ | 515,000 | N/A | $ | 541,190 | 1.5 | % | |||||||
Lon R. Greenberg | $ | 594,594 | (2) | 5.0% | ||||||||||
Jerry E. Sheridan | $ | 475,020 | 4.0%(3) | $ | 541,528 | 2.8 | % | |||||||
Roger Perreault | $ | 550,000 | (1) | N/A | ||||||||||
Monica M. Gaudiosi | $ | 408,044 | 2.0% | $ | 448,058 | 3.0 | % | |||||||
Bradley C. Hall | $ | 358,254 | 4.0%(4) |
(1) | Mr. |
Annual Bonus Awards |
Our annual bonus plans provide our named executive officers with the opportunity to earn an annual cash and equity incentivesincentive, provided that certain performance goals are satisfied. Our annual incentives arecash incentive is intended to motivate our executives to focus on the achievement of our annual business objectives by providing competitive incentive opportunities to those executives who have the ability to significantly impact our financial performance. We believe that basing a meaningful portion of an executive’s compensation on financial performance emphasizes our pay for performancepay-for-performance philosophy and will result in the enhancement of shareholder or unitholder value.
In determining each executive position’s target award level under our annual bonus plans, we considered database information derived by Pay Governance regarding the percentage of salary payable upon achievement of target goals for executives in similar positions at other companies as described above. In establishing the target award level, we positioned the amount at approximately the 50th50th percentile for comparable positions. Beginning in Fiscal 2013, we changed the target award level from a range (the 50th to 75th percentile) to the 50th percentile to more closely align our policy with past practice.
Messrs. Walsh, Oliver Greenberg and HallPerreault and Ms. Gaudiosi participate in the UGI Corporation Executive Annual Bonus Plan (the “UGI Bonus Plan”), while Mr. Sheridan
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participates in the AmeriGas Propane Inc. Executive Annual Bonus Plan (the “AmeriGas Bonus Plan”). For Messrs. Walsh Oliver and GreenbergOliver and Ms. Gaudiosi, the entire target award opportunity was based on the Company’s Adjusted EPS. Mr. Perreault’s target award opportunity was based on the Adjusted EBIT of UGI International. We believe that annual bonus payments to our most senior executives should reflect our overall financial results for the fiscal year, and Adjusted EPS provides aand Adjust EBIT provide straightforward, “bottom line” measuremeasures of the performance of an executive in a large, well-established corporation.
For similar reasons, 90 percent of Mr. Sheridan’s target award opportunity was principally based on AmeriGas Partners’ EBITDA, adjusted to exclude acquisition and transition expenses related to the Heritage Propane acquisition (“Adjusted EBITDA”). Adjusted EBITDA, was then subject to modification based on achievement of AmeriGas Partners’ customer growtha safety performance goal, as described below. The other 10 percent of Mr. Sheridan’s target award opportunity was based on achievement of customer service goals, but contingent on a payout under the financial component of the award. We believe that customer growthservice for AmeriGas Partners is an important component of the bonus calculation because we foresee no or minimal growth in total demand for propane in the next several years, and, therefore, customer growth and customer retention areservice is an important factorsfactor in our ability to improve the long-term financial performance of AmeriGas Partners. Additionally, the customer growth adjustment serves to balance the riskWe also believe that achievement of AmeriGas Partners’ achievingsuperior safety performance is an important short-term annual financial goals at the expense of AmeriGas Partners’and long-term goal to increase its customer base. In prior years, bonus awards were based on earnings per common unit (“EPU”), subject to adjustment based on customer growth. Given the Heritage Propane acquisition in Fiscal 2012strategic initiative and its overall effect on the financial results of AmeriGas Partners, in Fiscal 2013, the Committee changed the financial metric from EPU to EBITDA to remove uncertainties associated with the calculation of depreciation and amortization levels.
Mr. Hall’s target award opportunity was based on the net incomeis therefore included as a component of the Company’s Midstream and Marketing business conducted through its subsidiary, UGI Energy Services, Inc., and its subsidiary that conducts its electric generation business, UGI Development Company. Specifically, Mr. Hall’s target award opportunity was based (i) 85 percent on the targeted net income of UGI Energy Services, Inc. (excluding UGI Development Company) and (ii) 15 percent on the targeted net income of UGI Development Company.AmeriGas Propane bonus calculation.
Each Committee has discretion under our executive annual bonus plans to (i) adjust Adjusted EPS, Adjusted EBIT and Adjusted EBITDA for extraordinary items or other events as the Committee deems appropriate, (ii) increase or decrease the amount of an award determined to be payable under the bonus plan by up to 50 percent, and (iii) beginning in Fiscal 2013, review quantitative factors (such as Company performance) and qualitative factors (such as individual performance and overall contributions to the Company) when determining the annual bonus to be paid to an executive who terminates employment during the fiscal year on account of retirement, death or disability. In addition, during Fiscal 2013, each of theThe UGI Bonus Plan and the AmeriGas Bonus Plan was amended to provideeach provides that, unless the Committee determines otherwise, all executive officers who have not fulfilled their respective equity ownership requirementrequirements receive as part of their ongoing compliance up to 10 percent of their gross annual bonus in fully vested UGI Corporation common stock or AmeriGas Partners common units, as applicable.
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The bonus award opportunity for each of Messrs. Walsh Oliver and GreenbergOliver and Ms. Gaudiosi was structured so that no amountsamount would be paid unless the Company’s Adjusted EPS was at least 80 percent of the target amount, with the target bonus award being paid out if the Company’s Adjusted EPS was 100 percent of the targeted Adjusted EPS. The maximum award, equal to 200 percent of the target award, would be payable if Adjusted EPS equaled or exceeded 120 percent of the Adjusted EPS target. The targeted Adjusted EPS for bonus purposes for Fiscal 20132016 was established to be in the range of $2.45$2.15 to $2.552.30 per share, and EPS achieved for Fiscal 2013, as published in the Company’s Earnings Release dated November 18, 2013, was $2.39. The Committee exercised its discretion and adjusted the actualAdjusted EPS for bonus purposes to exclude the impact of transition expenses and margin income earned duringachieved for Fiscal 2013 associated with an acquisition in Poland.2016 was $2.05. As a result, EPS, as adjusted for purposes of the bonus calculation, was $2.40 and Messrs. Walsh and Oliver and Ms. Gaudiosi each received a bonus payout equal to 95.981.8 percent of his or her target award for Fiscal 2013,2016, with eachMr. Oliver receiving 10 percent of his or her payout in Company stock to satisfy his or her ongoing stock ownership compliance requirement.
In accordance with the Company’s Annual Bonus Plan, Mr. Greenberg was eligible to receive a portion of his Fiscal 2013 annual bonus for his service as Chief Executive Officer through his retirement date of April 1, 2013. In calculating Mr. Greenberg’s bonus, the Committee prorated his target bonus to reflect both the period of time Mr. Greenberg served as Chief Executive Officer during Fiscal 2013 as well as Mr. Greenberg’s accrued vacation time which he did not use in order to ensure a smooth transition of his duties. Pursuant to the Annual Bonus Plan, the Committee then considered quantitative factors, including the Company’s performance through Mr. Greenberg’s retirement date, and qualitative factors, including Mr. Greenberg’s service to the Company and his proven leadership during his tenure and increased Mr. Greenberg’s bonus amount by approximately ten percent. As a result, Mr. Greenberg received a bonus for Fiscal 2013 equal to $1,050,000.requirements.
For Mr. Hall,Sheridan, the 8590 percent component of the bonus award opportunity based on UGI Energy Services’ net income (excluding UGI Development Company) was structured so that no amounts would be paid unless UGI Energy Services’ net income was at least 80 percent of the target amount, with the target bonus award being paid out if UGI Energy Services’ net income was 100 percent of the targeted net income. The maximum award, equal to 200 percent of the target award, would be payable if net income equaled or exceeded 150 percent of the net income target. The targeted net income for bonus purposes for Fiscal 2013 was established to be in the range of $50 million to $61 million, and net income achieved by UGI Energy Services (excluding UGI Development Company) for Fiscal 2013 was approximately $47 million. The Committee exercised its discretion and adjusted the UGI Energy Services’ net income for bonus purposes to exclude a portion of the expenses incurred during Fiscal 2013 associated with UGI Energy Services’ corporate restructuring. As a result, net income, as adjusted for purposes of the bonus calculation, was $48.7 million. The 20 percent component of the bonus award opportunity based on UGI Development Company’s net income was structured so that no amounts would be paid unless UGI Development Company’s net income was at least 50 percent of the target amount, with the target bonus award being paid out if UGI Development Company’s net income was
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100 percent of the targeted net income. The maximum award, equal to 150 percent of the target award, would be payable if net income equaled or exceeded 150 percent of the net income target. UGI Development Company’s targeted net income for bonus purposes for Fiscal 2013 was established to be in the range of $4.5 million to $5.5 million, and UGI Development Company’s net income for Fiscal 2013 was approximately 5.6 million. As a result of the foregoing, Mr. Hall received a bonus payout equal to 84.4 percent of his target award for Fiscal 2013.
Mr. Sheridan’s bonus award opportunity was based on Adjusted EBITDA of AmeriGas Partners, subject to modification based on customer growth. The applicable range for targeted Adjusted EBITDA for bonus purposes for Fiscal 2013safety performance, was $620 million to $660 million. Under the target bonus criteria applicable to Mr. Sheridan,structured so that no bonusamount would be paid if actualunless AmeriGas Partners’ Adjusted EBITDA was less thanat least 90 percent of the actual Adjusted EBITDA target amount, while 200 percent of the target bonus could be payable if Adjusted EBITDA equaled or exceeded 110 percent of the Adjusted EBITDA target.target amount. The percentage of target bonus payable based on the level of achievement of Adjusted EBITDA is referred to as the “Adjusted EBITDA Leverage Factor.” The amount of the award determined by applying the Adjusted EBITDA Leverage Factor is then modified to reflect the degree of achievement of a predetermined customer growth safety performance
objective tied to AmeriGas Propane’s Fiscal 2016 Occupational Safety and Health Administration (“Customer GrowthOSHA”) recordables (“Safety Leverage Factor”). For Fiscal 2013,2016, the percentage representing the Customer GrowthSafety Leverage Factor ranged from 80 percent if the growthperformance target was not achieved, to a maximum of 120 percent if growthperformance exceeded the target by 60 percent or more.target. We believe the Customer GrowthSafety Leverage Factor for Fiscal 20132016 represented an achievable but challenging growthperformance target. Once the Adjusted EBITDA Leverage Factor and Customer GrowthSafety Leverage Factor are determined, the Adjusted EBITDA Leverage Factor is multiplied by the Customer GrowthSafety Leverage Factor to obtain a total adjusted leverage factor (the “Total Adjusted Leverage Factor”). The Total Adjusted Leverage Factor is then multiplied by the target bonus opportunity to arrive at the 90 percent portion of the bonus award payable for the fiscal year. The actual Adjusted EBITDA achieved for Fiscal 20132016 was $617.7$543 million. The Committee then reduced achievementapplicable range for targeted Adjusted EBITDA for bonus purposes for Fiscal 2016 was $660 million to $595.7 million, representing$690 million. Mr. Sheridan’s remaining 10 percent component of his bonus award opportunity was based on customer service goals, but this portion of Mr. Sheridan’s award is only payable if there is at least a threshold payout under the inclusionAdjusted EBITDA financial component of his award. For Fiscal 2016, AmeriGas Propane engaged a predeterminedthird party company to conduct customer surveys in order to better understand customer satisfaction with services provided by AmeriGas Propane. Each individual survey is given an overall satisfaction score and the scores are then aggregated by the third party company to calculate a total score known as a net promoter score. Mr. Sheridan’s award opportunity for the customer service component of his bonus was structured so that no amount of acquisition and transition expenses related towould be paid unless the Heritage Propane acquisition (otherwise excluded from the calculation of Adjusted EBITDA). After applicationnet promoter score was at least 85 percent of the Total Adjusted Leverage Factor tonet promoter score target, with the applicable target bonus opportunity,award being paid out if the net promoter score was 100 percent of the targeted goal. The maximum award, equal to 150 percent of the targeted award, would be payable if the net promoter score exceeded the net promoter score target. Because the threshold Adjusted EBITDA target was not attained, Mr. Sheridan did not receive a bonus payout for Fiscal 2016.
For Mr. Perreault, the bonus award opportunity based on UGI International’s Adjusted EBIT was structured so that no amounts would be paid unless UGI International’s Adjusted EBIT was at least 75 percent of the target amount, with the target bonus award being paid out if UGI International’s Adjusted EBIT was 100 percent of the targeted Adjusted EBIT. The maximum award, equal to 200 percent of the target award, would be payable if Adjusted EBIT equaled or exceeded 130 percent of the targeted Adjusted EBIT. The targeted Adjusted EBIT for bonus purposes for Fiscal 2016 was established to be in the range of $195 million to $225 million, and Adjusted EBIT achieved by UGI International for Fiscal 2016 was approximately $234 million. As a result of the foregoing, Mr. Perreault received a pro-rated bonus payout equal to 67.2129.6 percent of his target award for Fiscal 2013,2016, with 10 percent of his bonus paidsuch payout received in AmeriGas Partners common unitsCompany stock to satisfy the Company’s ongoing equitystock ownership requirement.compliance requirements.
EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (as indicators of operating performance) or as alternatives to cash flow (as measures of liquidity or ability to service debt obligations) and are not measures of performance or financial condition under GAAP. See Appendix A attached hereto for a reconciliation of EBITDA and Adjusted EBITDA to net income.
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The following annual bonus payments were made for Fiscal 2013:2016:
Name | Percent of Target Bonus Paid | Cash | Equity | Percent of Target Bonus Paid | Payout | |||||||||||||
John L. Walsh | 95.9% | $ | 812,236 | $ | 90,219 | 81.8 | % | $ | 1,159,212 | |||||||||
Kirk R. Oliver | 95.9% | $ | 333,395 | $ | 37,019 | 81.8 | % | $ | 332,020 | |||||||||
Lon R. Greenberg(2) | N/A | $ | 1,050,000 | $ | 0 | |||||||||||||
Jerry E. Sheridan | 67.2% | $ | 229,875 | $ | 25,496 | 0 | % | $ | 0 | |||||||||
Roger Perreault(1)(2) | 129.6 | % | $ | 386,100 | ||||||||||||||
Monica M. Gaudiosi | 95.9% | $ | 211,335 | $ | 23,454 | 81.8 | % | $ | 238,232 | |||||||||
Bradley C. Hall | 84.4% | $ | 181,420 | $ | 0 |
(1) | Messrs. Oliver and Perreault each received 10 percent of their respective annual bonus |
(2) | Mr. |
Long-Term Compensation — Fiscal |
Background and Determination of Grants — Stock Options, Performance Units and Restricted Units
Our long-term incentive compensation is intended to create a strong financial incentive for achieving or exceeding long-term performance goals and to encourage executives to hold a significant equity stake in our Company in order to align the executives’ interests with shareholder interests. Additionally, we believe our long-term incentives provide us the ability to attract and retain talented executives in a competitive market.
Our long-term compensation for Fiscal 20132016 included UGI Corporation stock option grants and either UGI Corporation or AmeriGas Partners performance unit awards. UGI Corporation stock option grants were awarded under the 2004 Plan. UGI Corporation performance units were awarded under the 2013 Plan and AmeriGas Partners performance units were awarded under the under the AmeriGas 2010 Plan. Messrs. Walsh, Oliver, Greenberg and Hall and Ms. Gaudiosi were each awarded UGI Corporation performance units tied to the three-year total return performance of the Company’s common stock relative to that of the companies in the Adjusted Russell MidCap Utilities Index. Mr. Sheridan was awarded AmeriGas Partners performance unit awards tied to the three-year total return performance of AmeriGas Partners common units relative to that of the entities in the Alerian MLP Index. Each performance unit represents the right of the recipient to receive a share of common stock or a common unit if specified performance goals and other conditions are met. In addition, Mr. Perreault received a UGI Corporation restricted unit award of 12,000 UGI Corporation restricted stock units, with dividend equivalents, in connection with the commencement of his employment. Each stock unit represents the right of Mr. Perreault to receive a share of UGI Corporation common stock after three years of employment with the Company.
UGI Corporation stock options, performance units and restricted units were awarded under the 2013 Plan. AmeriGas Partners performance units were awarded under the AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on behalf of AmeriGas Partners, L.P. (the “AmeriGas 2010 Plan”). UGI Corporation stock options generally have a term of ten years and become exercisable in three equal annual installments beginning on the first anniversary of the grant date. Messrs. Walsh, Oliver and Perreault and Ms. Gaudiosi were each awarded UGI Corporation performance units tied to the three-year TSR performance of the Company’s common stock relative to that of the companies in the Adjusted Russell MidCap Utilities Index. Mr. Sheridan was awarded AmeriGas Partners performance units tied to (i) a relative TUR metric based on the Alerian MLP Index, as modified by AmeriGas Partners’ TUR performance compared to the other two retail propane distribution companies in the Alerian Index, and (ii) a customer gain/loss metric.
As is the case with cash compensation and annual bonus awards, we referenced Pay Governance’s analysis of executive compensation database information in establishing equity compensation for the named executive officers. In determining the total dollar value of the long-term compensation opportunity to be provided in Fiscal 2013,2016, we initially referenced (i) median salary information, and (ii) the percentage of the market median base salary for each position to be delivered as acompetitive market-based long-term incentive compensation opportunity,information, both as calculated by Pay Governance. Pay Governance developed the percentages of base salary used to determine the amount of equity compensation based on the applicable executive compensation databases and such percentages were targeted to produce a long-term compensation opportunity at the 50thpercentile level.
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Except for Mr. Sheridan, we initially applied approximately 50 percent of the amount of the long-term incentive opportunity to stock options and approximately 50 percent to performance units. Because Mr. Sheridan is an executive officer employed by the General Partner,AmeriGas Propane, we initially applied approximately 3530 percent of the amount of his long-term incentive opportunity to stock options, and approximately 6570 percent to AmeriGas performance units.units (30 percent is applied to AmeriGas Partners performance compared to the Alerian MLP Index, as modified by AmeriGas Partners’ TUR performance compared to the other two retail propane distribution companies, Ferrellgas Partners, L.P. and Suburban Propane Partners, L.P., included in the Alerian MLP Index (the “Propane MLP Group”), and 40 percent is tied to a customer gain/loss performance metric). We believe this bifurcation provides a good balance between two related, but discrete,important goals. Stock options are designed to align the executive’s interests with shareholder interests, becauseBecause the value of stock options is a function of the appreciation or depreciation of our stock price.price, stock options are designed to align the executive’s interests with shareholder interests. As explained in more detail below, the performance units are designed to encourage increased total shareholder or unitholder return that compares favorably relative toover a competitive peer group.period of time.
For Fiscal 20132016 equity awards, our compensation consultantPay Governance provided the competitive market incentive levels based on its assessment of accounting values. The consultantPay Governance then provided data for our long-term incentive values by utilizing similar accounting values. Accounting values are reported directly by companies to the survey databases and are determined in accordance with GAAP.
In providing award calculations, Pay Governance valued our stock options using UGI’s accounting value approach. Using this value, Pay Governance provided the total number of UGI stock options calibrating to 50 percent (35 percent in the case of Mr. Sheridan) of the total market median long-term incentive value. As discussed below and consistent with past practice, management uses the Pay Governance calculations as a starting point and recommends adjustments to the Committee.
The remaining approximately 50 percent (65 percent in the case of Mr. Sheridan) of the long-term compensation opportunity is awarded as performance units. In calculating the number of UGI Corporation performance units to be awarded to each named executive officer, other than Mr. Sheridan, who received AmeriGas Partners performance units, Pay Governance established a value of $33.82 per performance unit using the accounting values approach. The number of AmeriGas Partners performance unit awards was computed in a similar fashion. Pay Governance valued the AmeriGas Partners performance unit awards at $49.09 per underlying unit using an accounting values approach. Pay Governance determined the number of UGI Corporation and AmeriGas Partners performance units calibrating to 50 percent and 65 percent of the total market median long-term incentive value.
While management used the Pay Governance calculations as a starting point, in accordance with past practice, management recommended adjustments to the aggregate number of the Company’sCompany stock options and the Company’sCompany and AmeriGas Partners’Partners performance units calculated by Pay Governance. The adjustments were designed to address historic grant practices, internal pay equity (both within and among our business units) and the policy of the Company that the three-year average of the annual number of equity awards made under the Company’s 20042013 Plan for the fiscal years 20112014 through 2013,2016, expressed as a percentage of common shares outstanding at fiscal year-end, will not exceed 2 percent. For purposes of calculating the
annual number of equity awards used in this calculation: (i) each stock option granted is deemed to equal one share, and (ii) each performance unit earned and
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paid in shares of stock and each stock unit granted and expected to be paid in shares of stock is deemed to equal 4.67 shares. The adjustments generally resulted in (i) a significant decrease in the number of shares underlying stock options, and an increase(ii) except with respect to Mr. Sheridan and Ms. Gaudiosi, a decrease in the number of performance units awarded, in each case as compared to amounts calculated by Pay Governance using accounting values. In all cases, however, the overall value that was delivered to management was less than or equal to the total value recommended by Pay Governance.
As a result of the Committee’s acceptance of management’s recommendations, the named executive officers, with the exception of Mr. Perreault, received between approximately 8782 percent and 10099 percent of the total dollar value of long-term compensation opportunity recommended by Pay Governance using the accounting values. The actual grant amounts based on the foregoing analysis are as follows:
Name | Shares Underlying Stock Options # Granted | Performance Units # Granted | Stock Options # Granted | Performance Units # Granted | ||||||||
John L. Walsh | 119,000 | 23,000 | 330,000 | 50,000 | ||||||||
Kirk R. Oliver | 75,000 | 17,000 | 100,000 | 15,000 | ||||||||
Lon R. Greenberg(3) | 300,000 | 65,000 | ||||||||||
Jerry E. Sheridan | 71,250 | 14,250(4) | 65,000 | 18,700 | (2) | |||||||
Roger Perreault(1) | 50,000 | 7,500 | (3) | |||||||||
Monica M. Gaudiosi | 50,000 | 10,000 | 70,000 | 11,000 | ||||||||
Bradley C. Hall | 42,000 | 6,000 |
(1) | Mr. |
(2) | Constitutes AmeriGas Partners performance units. 6,700 performance units are tied to AmeriGas Partners’ TUR performance compared to the companies in the Alerian MLP Index, as modified by AmeriGas Partners’ TUR performance compared to the Propane MLP Group, and 12,000 performance units are tied to the customer gain/loss metric. |
(3) | In connection with the commencement of |
Peer Groups and Performance Metrics
While the number of performance units awarded to the named executive officers was determined as described above, the actual number of shares or units underlying performance units that are paid out at the expiration of the three-year performance period will be based upon the Company’s comparative TSR or(or AmeriGas Partners’ TURcomparative TUR) over the period from January 1, 20132016 to December 31, 2015.2018. Specifically, with respect to the Company’sCompany performance units, we will compare the TSR of the Company’s common stock relative to the TSR performance of those companies comprising the Adjusted Russell MidCap Utilities Index as of the beginning of the performance period.period using the comparative returns methodology used by Bloomberg L.P. or its successor at the time of calculation. In computing TSR, the Company uses the average of the daily closing prices for its common stock and the common stock of each company in the Adjusted Russell MidCap Utilities Index for the calendar quarter prior to
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January 1 of the beginning and end of a given three-year performance period. In addition, TSR gives effect to all dividends throughout the three-year performance period as if they had been reinvested. If a company is added to the Adjusted Russell MidCap Utilities Index during a three-year performance period, we do not include that company in our TSR analysis. We will only remove a company that was included in the Adjusted Russell MidCap Utilities Index at the beginning of a performance period if such company ceases to exist during the applicable performance period. ThoseThe companies in the Adjusted Russell MidCap Utilities Index as of January 1, 20132016 were as follows:
| Pinnacle West Capital Corp. | |||
AGL Plains Energy | Entergy Corporation | PPL Corporation | ||
Alliant Energy | Eversource Energy | Public Service Enterprise Group | ||
Ameren Corporation | FirstEnergy Corp. | Questar Corporation | ||
American Water Works Company, Inc. | Great Plains Energy | SCANA Corporation | ||
Aqua America, Inc. | Hawaiian Electric Industries, Inc. | |||
| ||||
| ITC Holdings Corp. | |||
| MDU Resources Group, Inc. | |||
Calpine Corporation | National Fuel Gas Company
|
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Centerpoint Energy, Inc. | NiSource Inc. | WEC Energy | ||
CMS Energy Corporation |
NRG |
| ||
| Westar Energy, Inc. | |||
Consolidated Edison, | OGE Energy Corp. | |||
| Xcel Energy Inc. | |||
| Pepco Holdings, Inc. |
The CompanyCommittee determined that the Adjusted Russell MidCap Utilities Index is an appropriate peer group because the companies included in the Russell MidCap Utilities Index generally are comparable to the Company in terms of market capitalization and the Company is included in the Russell MidCap Utilities Index. The Company, with approval of the Committee, excluded telecommunications companies from the peer group because the nature of the telecommunications business is markedly different from that of other companies in the utilities industry.
Mr. Sheridan was awarded AmeriGas Partners performance unit awards tied to two different metrics: (i) the three-year TUR performance of AmeriGas Partners common units relative to that of the entities in the Alerian MLP Index, as modified based on the three-year TUR performance of AmeriGas Partners common units relative to that of the other companies in the Propane MLP Group, and (ii) a customer gain/loss metric. The Committee determined that a metric directly tied to customer gains and losses would strengthen the link between pay and performance and advance AmeriGas Partners’ long-term strategic goals and objectives. With respect to AmeriGas Partners’Partners performance units tied to the Alerian MLP Index, we will compare the TUR of AmeriGas Partners’ common units relative to the TUR performance of those entities comprising the Alerian MLP Index as of the beginning of the performance period.period using the comparative returns methodology used by Bloomberg L.P. or its successor at the time of calculation. In computing TUR, we use the average of the daily closing prices for AmeriGas Partners’ common units and those of each of the entities in the Alerian MLP Index for the calendar quarter prior to January 1 of the beginning and end of a given three-year performance period. In addition, TUR gives effect to all distributions throughout the three-year performance period as if they had been reinvested. For the AmeriGas Partners performance units, we compare the TUR of AmeriGas Partners’ common units to the TUR performance of each of the 49 other entities in the Alerian MLP Index. If an entity is added to the Alerian MLP Index during a three-year performance period, we do not include that entity in our TUR analysis. We will only remove an entitya company that was included in the Alerian MLP Index at the beginning of a
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performance period if itsuch company ceases to exist during the applicable performance period. The entities comprisingcompanies in the Alerian MLP Index as of January 1, 20132016 were as follows:
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Alliance Resource Partners, L.P. |
| Seadrill Partners, L.P. | ||
AmeriGas Partners, L.P. |
| Shell Midstream Partners L.P. | ||
Antero Midstream Partners, L.P. | EQT Midstream Partners, L.P. | Spectra Energy Partners, LP | ||
Archrock Partners L.P. | Ferrellgas Partners, L.P. | Suburban Propane Partners, L.P. | ||
Black Stone Minerals, L.P. | Genesis Energy, L.P. |
| ||
Boardwalk Pipeline Partners |
| Sunoco L.P. | ||
Buckeye Partners, L.P. |
| Sunoco Logistics Partners
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Calumet Specialty Products Partners, L.P. |
| Tallgrass Energy Partners L.P. | ||
|
|
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Columbia Pipeline Partners L.P. | Martin Midstream Partners L.P. | TC Pipelines, L.P. | ||
Crestwood Equity Partners L.P. | MPLX, L.P. | Teekay LNG Partners L.P. | ||
DCP Midstream Partners, LP |
|
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|
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| NuStar Energy L.P. | Tesoro Logistics, L.P. | ||
|
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| ONEOK Partners, L.P. | Valero Energy Partners, L.P. | ||
Enbridge Energy Partners, L. P. | Phillips 66 Partners, L.P. | Vanguard Natural Resources LLC | ||
Energy Transfer Partners, L.P. | Plains All American Pipeline, L.P. | Western Gas Partners, LP | ||
Rose Rock Midstream L.P. | Williams Partners L.P. |
For the Company’sCompany performance units tied to the Adjusted Russell Midcap Utilities Index, the minimum award, equivalent to 25 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 25th25th percentile of the Adjusted Russell MidCap Utilities Index. The target award, equivalent to 100 percent of the number of performance units, will be payable if the TSR rank is at the 50th50th percentile. The maximum award, equivalent to 200 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 90th90th percentile of the Adjusted Russell MidCap Utilities Index.
The number of AmeriGas Partners common units underlying performance units that will be paid outtied to Mr. Sheridanthe Alerian MLP Index will be based upon AmeriGas Partners’ TUR rank relative to the Alerian MLP Index entities and is computed using a methodology analogous to that described above with regard to the Company’s TSR ranking.
Based The result is then modified based on advice fromAmeriGas Partners’ TUR performance compared to the Committee’s compensation consultant regarding long-term incentive compensation practices,Propane MLP Group. If AmeriGas Partners’ Alerian TUR performance qualifies for a payout at the Committeeconclusion of the three-year period ending December 31, 2018, then that payout would be modified as follows: (i) if AmeriGas Partners’ TUR during the three-year period ranks first compared to the other companies in the Propane MLP Group, then the performance unit payout scheduleswould be leveraged at 130 percent; (ii) if AmeriGas Partners’ TUR during the three-year period ranks second compared to the other companies in Fiscal 2013 in orderthe Propane MLP Group, then the performance unit payout would be leveraged at 100 percent; and (iii) if AmeriGas Partners’ TUR during the three-year period ranks third compared to maintain a competitive equity program.the other Propane MLP Group companies, then the performance unit payout would be leveraged at 70 percent. The target award, equivalent to 100overall payout is capped at 200 percent of the target number of performance units awarded. If one of the other two companies in the Propane MLP Group ceases to exist as a publicly traded company or declares bankruptcy (“Adjustment Event”) during the first year of the performance period, then the performance units will become payable ifat the TSR orend of the three-year performance period based on AmeriGas Partners’ TUR rank is equalperformance compared to the 50thpercentile, remainedAlerian MLP Index and no modification will be made. If an Adjustment Event occurs during the same as in the prior year. Previously, eachsecond year of the 2004 Planperformance period, then one-half of the modifier would be applied to the payout calculated under the Alerian MLP Index. If an Adjustment Event occurs during the third year of the performance period, then the full Propane MLP Group modifier would be calculated using the TUR as of the day immediately preceding the first public announcement of the Adjustment Event.
The Fiscal 2016 performance units awarded to Mr. Sheridan and tied to customer gain and loss performance will be paid at the AmeriGas 2010 Plan providedconclusion of the three-year performance period ending September 30, 2018 (assuming continued employment through December 31, 2018). The overall payout is capped at 200 percent of the target number of performance units awarded. The Committee believes that challenging goals and targets have been established with respect to the customer gain/loss metric for the described performance units. For illustrative purposes, there would have been no payout if the TSR or TUR was less than the 40th percentile and a maximum payout of 200 percent only if the TSR or TUR was the highest in the peer group. The changes made by the Committee in Fiscal 2013 only affected (i) the required degree of performance to attain the maximum payout of 200 percent (now attained if TSR or TUR isduring at least equal to the 90th percentile of the peer group), and (ii) the minimum payout was reduced from 50 percent if the TSR or TUR is at least equal to the 40th percentile to 25 percent if the TSR or TUR is at least equal to the 25th percentile of the peer group.last five fiscal years had this metric been in place.
Each award payable to the named executive officers provides a number of the Company’s shares or AmeriGas Partners’ common units equal to the number of performance units earned. After the Committee has determined that the conditions for payment have been
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satisfied, the Company or AmeriGas Propane, as the case may be, has the authority to provide for a cash payment to the named executives in lieu of a limited number of the shares or common units payable. The cash payment is based on the value of the securities at the end of the performance period and is designed to meet minimum statutory tax withholding requirements. In the event that UGI executives earn shares in excess of the target award, the value of the shares earned in excess of the target is paid entirely in cash.
All performance units have dividend or distribution equivalent rights, as applicable. A dividend equivalent is an amount determined by multiplying the number of performance units credited to athe recipient’s account by the per-share cash dividend or the per-share fair market value of any non-cash dividend paid by the Company during the performance period on Company shares on a dividend payment date. A distribution equivalent relates to AmeriGas Partners common units and is determined in a similar manner. Accrued dividend and distribution equivalents are payable in cash based on the number of common shares or AmeriGas Partners’ common units, if any, paid out at the end of the performance period.
In addition to the performance units described above, the Compensation/Pension Committee of AmeriGas Propane and the independent members of the AmeriGas Propane Board of Directors approved a discretionary grant of AmeriGas Partners phantom units with distribution equivalents to Mr. Sheridan in recognition of his contributions and leadership with respect to the acquisition and integration of Heritage Propane during Fiscal 2012 to support the long-term best interests of the Company. The phantom units have a grant date of December 3, 2012 and represent time-restricted AmeriGas Partners common units that will vest on December 3, 2014, subject to continued employment. In the event of Mr. Sheridan’s termination of employment for any reason, other than retirement, death or disability, the unvested phantom units and dividend equivalents will be forfeited. In the event of Mr. Sheridan’s retirement, death or disability during the initial year following the grant, one half of the number of units granted would immediately vest and the other half of the units would be forfeited.
• | Long-Term Compensation — Payout of Performance Units for |
During Fiscal 2013,2016, we paid out awards to those executives who received UGI performance units in our 2010 fiscal year covering the period from January 1, 20102013 to December 31, 2012.2015. For that period, the Company’s TSR ranked 19th5th relative to the 32other companies in the S&PRussell Midcap Utilities Index, placing the Company slightly belowat the 42nd88th percentile ranking, resulting in a 59.7196.4 percent payout of the target award. Because Mr. Oliver’s employment commenced during Fiscalthe payout exceeded 100 percent, the 2013 he did not receive performancePlan provides that cash will be paid in lieu of units for any amount in excess of the period from January 1, 2010 to December 31, 2012.100 percent target. AmeriGas Partners’ TUR ranked 34th10th relative to its peer group,the other companies in the Alerian Index, placing AmeriGas Partnersthe Company at approximately the
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35th 75th percentile ranking and resulting in noa 162.5 percent payout of the target awardaward. Because the payout exceeded 100 percent, the AmeriGas 2010 Plan provides that cash will be paid in lieu of units for Mr. Sheridan.any amount in excess of the 100 percent target. The performance unit payouts for Fiscal 2013 on UGI performance unit awards2016 were as follows:
Name | Performance Unit Payout (#) | Performance Unit Payout Value (1) ($) | ||||||
John L. Walsh | 16,716 | $ | 597,764 | |||||
Lon R. Greenberg | 41,790 | $ | 1,494,410 | |||||
Monica M. Gaudiosi | 1,989 | $ | 66,671 | |||||
Bradley C. Hall | 4,179 | $ | 149,441 |
Name | Performance Unit Payout (#)(1) | Performance Unit Payout Value(2) ($) | Cash Payout (Award in excess of 100%) ($) | |||||||||
John L. Walsh(3) | 38,254 | $ | 2,228,160 | $ | 2,456,321 | |||||||
Kirk R. Oliver(3) | 15,994 | $ | 860,880 | $ | 953,336 | |||||||
Jerry E. Sheridan(4) | 9,595 | $ | 488,348 | $ | 546,957 | |||||||
Monica M. Gaudiosi(3) | 10,223 | $ | 506,400 | $ | 560,786 |
(1) | Number of units/shares paid out after withholding taxes. |
(2) | Includes dividend or distribution equivalent payout. Payout value based on performance units awarded before withholding taxes. |
(3) | Messrs. Walsh and Oliver and Ms. Gaudiosi received UGI performance units. |
(4) | Mr. Sheridan received AmeriGas Partners performance units. |
• | Perquisites and Other Compensation |
We provide limited perquisite opportunities to our executive officers. We provide reimbursement for tax preparation services (discontinued in Fiscal 2011 for newly hired executives), airline membership reimbursement and limited spousal travel. Our named executive officers may also occasionally use the Company’s tickets for sporting events for personal rather than business purposes. We discontinued reimbursement for tax preparation services in Fiscal 2011 for newly hired executives. The aggregate cost of perquisites for all named executive officers in Fiscal 20132016 was less than $15,000.$10,000. In addition, (1) Mr. Perreault received reimbursement for relocation expenses of $10,640 during Fiscal 2016 in connection with the commencement of Mr. Oliver’shis employment in December 2015, and (2) Mr. Oliver received (i) a one-time special relocation bonus of $75,000 and (ii) reimbursement for relocation expenses underof $49,344 during Fiscal 2016 in connection with the Company’s relocation policycommencement of less than $5,000.his employment with the Company in October of 2012.
Other Benefits |
Our named executive officers participate in various retirement, pension, deferred compensation and severance plans, which are described in greater detail in the Ongoing Plans and Post-Employment Agreements section of this COMPENSATION DISCUSSION AND ANALYSIS.Compensation Discussion and Analysis. We also provide employees, including the named executive officers, with a variety of other benefits, including medical and dental benefits, disability benefits, life insurance, and paid time off for holidays and vacations. These benefits generally are available to all of our full-time employees, although AmeriGas Propane provided certain enhanced disability and life insurance benefits to its senior executives, which for Mr. Sheridan havinghad a total aggregate cost in Fiscal 20132016 of less than $5,000.
ONGOING PLANS AND POST-EMPLOYMENT AGREEMENTS
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We have several plans and agreements (described below) that enable our named executive officers to accrue retirement benefits as the executives continue to work for us, provide severance benefits upon certain types of termination of employment events or provide other forms of deferred compensation.
Retirement Income Plan for Employees of UGI Utilities, Inc. (the “UGI Pension Plan”)
This plan is a tax-qualified defined benefit plan available to, among others, employees of the Company and certain of its subsidiaries. The UGI Pension Plan was closed to new
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participants as of January 1, 2009. The UGI Pension Plan provides an annual retirement benefit based on an employee’s earnings and years of service, subject to maximum benefit limitations. Messrs.Mr. Walsh and Hall participateparticipates in the UGI Pension Plan. Mr. Greenberg received benefits under the UGI Pension Plan during Fiscal 2013 as a result of his retirement. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Pension Benefits Table — Fiscal 2013 and accompanying narrative, beginning on page 49, for additional information.
UGI Utilities, Inc. Savings Plan (the “UGI Savings Plan”)
This plan is a tax-qualified defined contribution plan available to, among others, employees of the Company. Under the plan, an employee may contribute, subject to Internal Revenue Code (the “Code”) limitations (which, among other things, limited annual contributions in 20132016 to $17,500)$18,000), up to a maximum of 50 percent of his or her eligible compensation on a pre-tax basis and up to 20 percent of his or her eligible compensation on an after-tax basis. The combined maximum of pre-tax and after-tax contributions is 50 percent of his or her eligible compensation. The Company provides matching contributions targeted at 50 percent of the first 3 percent of eligible compensation contributed by the employee in any pay period, and 25 percent of the next 3 percent. For participants entering the UGI Savings Plan on or after January 1, 2009 who are not eligible to participate in the UGI Pension Plan, the Company provides matching contributions targeted at 100 percent of the first 5 percent of eligible compensation contributed by the employee in any pay period. Amounts credited to anthe employee’s account in the plan may be invested among a number of funds, including the Company’s stock fund. Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi are eligible to participate in the UGI Savings Plan.
AmeriGas Propane, Inc. Savings Plan (the “AmeriGas Savings Plan”)
This plan is a tax-qualified defined contribution plan for AmeriGas Propane employees. Subject to Code limits, which are the same as described above with respect to the UGI Savings Plan, an employee may contribute, on a pre-tax basis, up to 50 percent of his or her eligible compensation, and AmeriGas Propane provides a matching contribution equal to 100 percent of the first 5 percent of eligible compensation contributed in any pay period. Like the UGI Savings Plan, participants in the AmeriGas Savings Plan may invest amounts credited to their account among a number of funds, including the Company’s stock fund. Mr. Sheridan is eligible to participate in the AmeriGas Savings Plan.
UGI Corporation Supplemental Executive Retirement Plan and Supplemental Savings Plan
UGI Corporation Supplemental Executive Retirement Plan
This plan is a nonqualified defined benefit plan that provides retirement benefits that would otherwise be provided under the UGI Pension Plan to employees hired prior to January 1, 2009, but are prohibited from being paid from the UGI Pension Plan by Code limits. The plan also provides additional benefits in the event of certain terminations of employment covered by a change in control agreement. Messrs.Mr. Walsh and Hall participateparticipates in the UGI Corporation Supplemental Executive Retirement Plan. Mr. Greenberg received a payout under the UGI
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Corporation Supplemental Executive Retirement Plan during Fiscal 2013 in connection with his retirement. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Pension Benefits Table — Fiscal 2013 and accompanying narrative, beginning on page 49, for additional information.
UGI Corporation Supplemental Savings Plan
This plan is a nonqualified deferred compensation plan that provides benefits to certain employees that would be provided under the qualified UGI Savings Plan to employees hired prior to January 1, 2009 in the absence of Code limitations. The Supplemental Savings Plan is intended to pay an amount substantially equal to the difference between the Company matching contribution to the qualified UGI Savings Plan and the matching contribution that would have been made under the qualified UGI Savings Plan if the Code limitations were not in effect. At the end of each plan year, a participant’s account is credited with earnings equal to the weighted average return on two indices: 60 percent on the total return of the Standard and Poor’s 500 Index and 40 percent on the total return of the Barclays Capital U.S. Aggregate Bond Index. The plan also provides additional benefits in the event of certain terminations of employment covered by a change in control agreement. Messrs.Mr. Walsh and Hall are eachis eligible to participate in the UGI Corporation Supplemental Savings Plan. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table — Fiscal 2013 and accompanying narrative, beginning on page 51, for additional information.
2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees
The 2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees (the “2009 UGI SERP”) is a nonqualified deferred compensation plan that is intended to provide retirement benefits to executive officers who are not eligible to participate in the UGI Pension Plan, having commenced employment with UGI on or after January 1, 2009. Under the 2009 UGI SERP, the Company credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($250,000265,000 in 2013)2016) and 10 percent of compensation in excess of such limit. In addition, if any portion of the Company’s matching contribution under the UGI Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to athe participant’s account. Participants direct the investment of their account balances among a number of mutual funds, which are generally the same funds available to participants in the UGI Savings Plan, other than the UGI stock fund. Mr.Messrs. Oliver and Perreault and Ms. Gaudiosi are eligible to participate in the 2009 UGI SERP. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Pension BenefitsNonqualified Deferred Compensation Table — Fiscal 2013 and accompanying narrative, beginning on page 51, for additional information.
AmeriGas Propane, Inc. Supplemental Executive Retirement Plan
AmeriGas Propane maintains a supplemental executive retirement plan, which is a nonqualified deferred compensation plan for highly compensated employees of AmeriGas Propane. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation up to the Code compensation limits
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and 10 percent of compensation in excess of such limit. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to athe participant’s account. Participants direct the investment of the amounts in their accounts among a number of mutual funds. Mr. Sheridan participates in the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table — Fiscal 2013 and accompanying narrative, beginning on page 51, for additional information.
AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan
AmeriGas Propane maintains a nonqualified deferred compensation plan under which participants may defer up to $10,000 of their annual compensation. Deferral elections are made annually by eligible participants in respect of compensation to be earned for the following year. Participants may direct the investment of deferred amounts into a number of mutual funds. Payment of amounts accrued for the account of a participant generally is made following the participant’s termination of employment. Mr. Sheridan is eligible to participate in the AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table — Fiscal 2013 and accompanying narrative, beginning on page 51, for additional information.
UGI Corporation 2009 Deferral Plan, As Amended and Restated Effective June 1, 2010
This plan provides deferral options that comply with the requirements of Section 409A of the Code related to (i) all stock units and phantom units granted to the Company’s and AmeriGas Propane’s non-employee Directors, (ii) benefits payable under the UGI Corporation Supplemental Executive Retirement Plan, (iii) the 2009 UGI Corporation SERP, and (iv) benefits payable under the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. If an eligible participant elects to defer payment under the plan, the participant may receive future benefits after separation from service as (x) a lump sum payment, (y) annual installment payments over a period between two and ten years, or (z) one to five retirement distribution amounts to be paid in a lump sum in the year specified by the individual. Deferred benefits, other than stock units and phantom units, will be deemed to be invested in investment funds selected by the participant from among a list of available funds. The plan also provides newly eligible participants with a deferral election that must be acted upon promptly.
Severance Pay Plans for Senior Executive Employees
The Company and AmeriGas Propane each maintain a severance pay plan that provides severance compensation to certain senior level employees. The plans are designed to alleviate the financial hardships that may be experienced by executive employee participants whose employment is terminated without just cause, other than in the event of death or disability. The Company’s plan covers Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi, and the AmeriGas Propane plan covers Mr. Sheridan. See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Potential
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Payments Upon Termination or Change in Control, beginning on page 52, for further information regarding the severance plans.
Change in Control Agreements
The Company has change in control agreements with Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi, and AmeriGas Propane has a change in control agreement with Mr. Sheridan. The change in control agreements are designed to reinforce and encourage the continued attention and dedication of the executives without distractiondisruption in the face of potentially disturbingdistracting circumstances arising from the possibility of the change in control and to serve as an incentive to their continued employment with us.employment. The agreements provide for payments and other benefits if we terminate an executive’s employment without cause or if the executive terminates employment for good reason within two years following a change in control of the Company (and, in the case of Mr. Sheridan, AmeriGas Propane or AmeriGas Partners). See COMPENSATIONCOMPENSATION OF EXECUTIVE OFFICERS EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52, for further information regarding the change in control agreements.
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We seek to align executives’ interests with shareholder and unitholder interests through our equity ownership guidelines. We believe that by encouraging our executives to maintain a meaningful equity interest in the Company or, if applicable, AmeriGas Partners, we will enhance the link between our executives and stockholdersshareholders or unitholders. Under our guidelines, an executive must meet 10 percent of the ownership requirement within one year from the date of employment or promotion. During Fiscal 2013, each of theThe UGI Bonus Plan and the AmeriGas Bonus Plan was amended to requireeach provides that, unless the Committee determines otherwise, all executive officers who have not fulfilled their equity ownership requirement receive up to 10 percent of their gross annual bonus in fully vested UGI Corporation common stock or AmeriGas Partners common units. In addition, the guidelines require that 50 percent of the net proceeds from a “cashless exercise” of stock options be used to purchase stock until the ownership requirement is met. The guidelines also require that, until the share ownership requirement is met, the executive retain all shares or common units received in connection with the payout of performance units. Up to 20 percent of the ownership requirement may be satisfied through holdings of UGI common stock in the executive’s account in the relevant savings plan.
As of September 30, 2013,2016, the equity ownership requirements for the named executive officers were as follows: (1) Mr. Walsh – 225,000 shares; (2) Mr. Oliver – 50,000 shares; (3) Ms. GaudiosiMr. Perreault – 30,000 shares; and (4) Mr. HallMs. Gaudiosi – 30,000 shares. Mr. Sheridan is permitted to satisfy his requirements through ownership of UGI common stock, AmeriGas Partners common units, or a combination of UGI common stock and AmeriGas Partners common units, with each AmeriGas Partners common unit equivalent to 1.5 shares of UGI common stock. Mr. Sheridan’s ownership requirement is 60,000 shares of UGI Corporation common stock or 40,000 AmeriGas Partners common units. At September 30, 2016, Mr. Walsh’s ownership requirement is equivalent to nearly 9 times his base salary, while the stock ownership multiple for the other named executive officers ranged from 2.4 times to 4.2 times base salary. Based on information from Pay Governance, the Committee believes its stock ownership requirements generally align with market practices. Although not all named executive officers have met
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their respective ownership requirements due to the amount of time they have served in their current positions, all named executive officers arewere in compliance at September 30, 2016 with the Company’s guidelines requiring the accumulation of shares, or units in the case of Mr. Sheridan, over time.
STOCK OPTION GRANT PRACTICES
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The Committees approve annual stock option grants to executive officers in the last calendar quarter of each year, to be effective the following January 1. The exercise price per share of the options is equal to or greater than the closing share price of the Company’s common stock on the last trading day of December. A grant to a new employee is generally effective on the later of the date the employee commences employment with us or the date the Committee authorizes the grant. In either case, the exercise price is equal to or greater than the closing price per share of the Company’s common stock on the effective date of grant. From time to time, management recommends stock option grants for non-executive employees, and the grants, if approved by the Committee, are effective on or after the date of Committee action and have an exercise price equal to or greater than the closing price per share of the Company’s common stock on the effective date of grant. We believe that our stock option grant practices are appropriate and effectively eliminate any question regarding “timing” of grants in anticipation of material events.
ROLE OF EXECUTIVE OFFICERS IN DETERMINING EXECUTIVE COMPENSATION
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In connection with Fiscal 20132016 compensation, Mr. Greenberg,Walsh, aided by our corporate human resources personnel,department, provided statistical data and recommendations to the appropriate Committee to assist it in determining compensation levels. Mr. GreenbergWalsh did not make recommendations as to his own compensation and was excused from the Committee meeting when his compensation was discussed by the Committee. While the Committees utilized information provided by Mr. Greenberg,Walsh, and valued Mr. Greenberg’sWalsh’s observations with regard to other executive officers, the ultimate decisions regarding executive compensation were made by the Committee for all named executive officers, except Messrs. Walsh and Sheridan, for whom executive compensation decisions were made by the independent members of the appropriate Board of Directors following Committee recommendations.
TAX CONSIDERATIONS
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In Fiscal 2013,2016, we paid salary and annual bonus compensation to named executive officers that were not fully deductible under U.S. federal tax law because it did not meet the statutory performance criteria. Section 162(m) of the Code precludes us from deducting certain forms of compensation in excess of $1,000,000 paid to the named executive officers in any one year. Our policy generally is to preserve the federal income tax deductibility of equity compensation paid to our executives by making it performance-based. We will continue to consider and evaluate all of our compensation programs in light of federal tax law and regulations. Nevertheless, we believe that, in some circumstances, factors other than tax deductibility take precedence in determining the forms and amount of compensation, and we retain the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of our Company.
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COMPENSATIONOF EXECUTIVE OFFICERS |
The following tables, narrative and footnotes provide information regarding the compensation of our Chief Executive Officer, Chief Financial Officer, and our three other most highly compensated executive officers in Fiscal 2013 and one former executive officer.2016.
Summary Compensation Table – Fiscal 2013 | ||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other ($)(5) | Total ($) | |||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
J. L. Walsh President and Chief Executive Officer | 2013 2012 2011 | 856,377 701,470 674,040 | 0 0 50,000(6) | 1,877,710 760,500 991,760 | 1,060,319 543,065 678,750 | 902,454 413,478 508,494 | 481,670 651,008 376,855 | 27,262 27,985 28,023 | 5,205,792 3,097,506 3,307,922 | |||||||||
K. R. Oliver Chief Financial Officer | 2013 | 505,096 | 0 | 1,019,190 | 437,813 | 370,414 | 0 | 172,016 | 2,504,529 | |||||||||
L. R. Greenberg Chairman and Former Chief Executive Officer | 2013 2012 2011 | 751,187(7) 1,131,924 1,099,047 | 0 0 0 | 2,487,550 1,901,250 2,479,400 | 1,424,700 1,303,355 1,629,000 | 1,050,000(8) 772,406 1,072,821 | 1,934,933 2,883,824 3,258,787 | 71,905 67,459 62,162 | 7,720,275 8,060,218 9,601,217 | |||||||||
J. E. Sheridan President and Chief Executive Officer of | 2013 2012 | 474,539 410,220 | 0 0 | 678,156(9) 603,500 | 338,366 305,110 | 255,371 0 | 0 0 | 76,241 48,587 | 1,822,673 1,367,417 | |||||||||
M. M. Gaudiosi Vice President, General Counsel and Secretary | 2013 2012 | 407,890 169,246 | 0 0 | 382,700 244,167 | 237,450 193,206 | 234,789 120,011 | 0 0 | 61,812 172,503 | 1,324,641 899,133 | |||||||||
B. C. Hall President of UGI Enterprises, Inc. | 2013 2012 | 357,712 329,659 | 0 0 | 229,620 204,750 | 199,458 182,470 | 181,420 0 | 276,833 341,177 | 7,673 10,443 | 1,252,716 1,068,499 |
Summary Compensation Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
J. L. Walsh President and Chief Executive Officer | | 2016 2015 2014 | |
| 1,132,043 1,078,342 1,027,169 |
|
| 0 0 0 |
|
| 1,648,500 1,741,050 2,053,380 |
|
| 1,581,030 1,705,338 1,992,060 |
|
| 1,159,212 1,604,745 1,974,336 |
|
| 2,439,939 1,920,003 1,009,878 |
|
| 61,549 67,810 41,037 |
|
| 8,022,273 8,117,288 8,097,860 |
| |||||||||
K. R. Oliver Chief Financial Officer | | 2016 2015 2014 | |
| 540,944 532,902 522,552 |
|
| 0 0 0 |
|
| 494,550 539,726 635,570 |
|
| 479,100 501,570 571,795 |
|
| 332,020 475,465 627,276 |
|
| 0 0 0 |
|
| 136,640 101,087 115,233 |
|
| 1,983,254 2,150,750 2,472,426 |
| |||||||||
J. E. Sheridan President and Chief Executive Officer of AmeriGas Propane, Inc. | | 2016 2015 2014 | |
| 541,082 526,474 506,018 |
|
| 0 0 0 |
|
| 699,474 1,300,299 877,682 |
(6) |
| 311,415 319,920 420,546 |
|
| 0 352,471 302,834 |
|
| 0 0 0 |
|
| 54,108 88,145 110,391 |
|
| 1,606,079 2,587,309 2,217,471 |
| |||||||||
R. Perreault Vice President, UGI International | 2016 | 433,654 | 0 | 960,499 | (7) | 239,550 | 386,100 | 0 | 92,115 | 2,111,918 | ||||||||||||||||||||||||||
M. M. Gaudiosi Vice President, General Counsel and Secretary | | 2016 2015 2014 | |
| 447,655 434,611 420,007 |
| | 0 0 | |
| 362,670 365,621 415,565 |
|
| 335,370 351,099 368,900 |
|
| 238,232 336,194 437,102 |
|
| 0 0 0 |
|
| 63,956 72,447 85,545 |
|
| 1,447,883 1,559,972 1,772,119 |
|
(1) | The amounts shown in column (c) represent salary payments actually received during the fiscal year shown based on the number of pay periods within such fiscal year. Mr. |
(2) | The amounts shown in columns (e) and (f) represent the aggregate fair value of awards of performance units and stock options on the date of grant. The assumptions used in the calculation of the amounts shown are included in Note 2 and Note 13 to our audited consolidated financial statements for Fiscal |
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(3) | The amounts shown in this column represent payments made under the applicable performance-based annual bonus plan. For Fiscal 2016, Messrs. |
(4) | The |
Name | Change in Pension Value ($) | Above-Market Earnings on Deferred Compensation ($) | ||
J. L. Walsh | 464,544 | 17,126 | ||
Kirk R. Oliver | 0 | 0 | ||
Lon R. Greenberg | 1,095,416 | 29,517 | ||
Jerry E. Sheridan | 0 | 0 | ||
Monica M. Gaudiosi | 0 | 0 | ||
Bradley C. Hall | 271,459 | 5,374 |
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(5) | The table below shows the components of the amounts included for each named executive officer under column (i), All Other Compensation, in the Summary Compensation |
Name | Employer Contribution 401(k) ($) | Employer Contribution To UGI Savings Plan ($) | Tax Reimbursement | Relocation Expense Reimbursement ($) | Total ($) | Employer Contribution to 401(k) Savings Plan ($) | Employer Contribution to UGI Supplemental Savings Plan and 2009 Supplemental Executive Retirement Plan for New Employees; AmeriGas Propane, Inc. Supplemental Executive Retirement Plan ($) | Relocation Expense Reimbursement ($) | Total ($) | |||||||||||
John L. Walsh | 5,738 | 19,674 | 1,850 | 0 | 27,262 | 5,887 | 55,662 | 0 | 61,549 | |||||||||||
Kirk R. Oliver | 17,702 | 75,051 | 0 | 79,263(a) | 172,016 | 13,250 | 74,046 | 49,344 | 136,640 | |||||||||||
Lon R. Greenberg | 5,738 | 66,167 | 0 | 0 | 71,905 | |||||||||||||||
Jerry E. Sheridan | 12,750 | 60,491 | 3,000 | 0 | 76,241 | 13,250 | 40,858 | 0 | 54,108 | |||||||||||
Roger Perreault(b) | 12,750 | 68,725 | 10,640 | 92,115 | ||||||||||||||||
Monica M. Gaudiosi | 10,044 | 51,768 | 0 | 0 | 61,812 | 8,617 | 55,339 | 0 | 63,956 | |||||||||||
Bradley C. Hall | 5,738 | 1,935 | 0 | 0 | 7,673 |
(a) | During Fiscal 2016, Mr. Oliver received reimbursement for |
(b) | During Fiscal 2016, Mr. Perreault received reimbursement for relocation expenses in connection with his |
(6) | Includes 3,189 AmeriGas Partners restricted units awarded |
(7) | Includes transition awards granted in connection with Mr. |
(8) |
Discretionary bonus awarded to |
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Grants of Plan-Based Awards Inin Fiscal 20132016
The following table and footnotes provide information regarding equity and non-equity plan grants to the named executive officers in Fiscal 2013.2016.
Grants of Plan-Based Awards Table – Fiscal 2013 | ||||||||||||||||||||||||
Grant Date | Board Action Date | Estimated Possible Payouts Non-Equity Incentive Plan | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other | All Other (#) (4) | Exercise or Base Price of Option Awards ($/Sh) | Grant ($) | |||||||||||||||||
Name | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold | Target (#) | Maximum (#) | ||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | ||||||||||||
J. L. Walsh | 10/01/12 | 11/16/12 | 564,622 | 941,037 | 1,882,074 | |||||||||||||||||||
01/01/13 | 11/16/12 | 119,000 | 32.71 | 565,131 | ||||||||||||||||||||
01/24/13 | 11/16/12 | 5,750 | 23,000 | 46,000 | 880,210 | |||||||||||||||||||
04/01/13 | 03/18/13 | 86,000 | 38.24 | 495,188 | ||||||||||||||||||||
04/01/13 | 03/18/13 | 5,250 | 21,000 | 42,000 | 997,500 | |||||||||||||||||||
K. R. Oliver | 10/01/12 | 11/16/12 | 231,750 | 386,250 | 772,500 | |||||||||||||||||||
10/01/12 | 09/10/12 | 18,750 | 31.10 | 81,638 | ||||||||||||||||||||
10/01/12 | 09/10/12 | 2,500 | 5,000 | 10,000 | 47,000 | |||||||||||||||||||
10/01/12 | 09/10/12 | 5,000 | 10,000 | 20,000 | 321,600 | |||||||||||||||||||
01/01/13 | 11/16/12 | 75,000 | 32.71 | 356,175 | ||||||||||||||||||||
01/24/13 | 11/16/12 | 4,250 | 17,000 | 34,000 | 650,590 | |||||||||||||||||||
L. R. Greenberg | 10/01/12 | 06/12/13 | 1,050,000 | |||||||||||||||||||||
01/01/13 | 11/16/12 | 300,000 | 32.71 | 1,424,700 | ||||||||||||||||||||
01/24/13 | 11/16/12 | 16,250 | 65,000 | 130,000 | 2,487,550 | |||||||||||||||||||
J. E. Sheridan | 10/01/12 | 11/15/12 | 182,408 | 380,016 | 760,032 | |||||||||||||||||||
12/3/2012 | 11/15/12 | 1,821 | 84,786 | |||||||||||||||||||||
01/01/13 | 11/15/12 | 71,250 | 32.71 | 338,366 | ||||||||||||||||||||
01/01/13 | 11/15/12 | 3,562 | 14,250 | 28,500 | 593,370 | |||||||||||||||||||
M. M. Gaudiosi | 10/01/12 | 11/16/12 | 146,895 | 244,826 | 489,652 | |||||||||||||||||||
01/01/13 | 11/16/12 | 50,000 | 32.71 | 237,450 | ||||||||||||||||||||
01/24/13 | 11/16/12 | 2,500 | 10,000 | 20,000 | 382,700 |
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Grants of Plan-Based Awards Table – Fiscal 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grants of Plan-Based Awards Table – Fiscal 2016 | Grants of Plan-Based Awards Table – Fiscal 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant Date | Board Action Date | Estimated Possible Payouts Non-Equity Incentive Plan | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other | All Other (#) (4) | Exercise or Base Price of Option Awards ($/Sh) | Grant ($) | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
| Estimated Future Payouts Under Equity Incentive Plan Awards (2)
| All Other Stock Awards: Number of Shares | All Other Option Awards: Number of Securities | Exercise or Base Price of | Grant Date Value of Stock and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold | Target (#) | Maximum (#) | Grant Date | Board Action Date | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold (#) | Target (#) | Maximum (#) | of Stock or Units (#)(3) | Underlying Options (#) (4) | Option Awards ($/Sh) | Option Awards ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. L. Walsh | 10/01/15 | 11/20/15 | 850,278 | 1,417,130 | 2,834,260 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/20/15 | 330,000 | 33.76 | 1,581,030 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. C. Hall | 10/01/12 | 11/16/12 | 125,747 | 214,952 | 413,783 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/20/15 | 12,500 | 50,000 | 100,000 | 1,648,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. R. Oliver | 10/01/15 | 11/19/15 | 243,536 | 405,893 | 811,785 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 100,000 | 33.76 | 479,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,750 | 15,000 | 30,000 | 494,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. E. Sheridan | 10/01/15 | 11/19/15 | 223,976 | 433,222 | 866,444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 65,000 | 33.76 | 311,415 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,000 | 6,700 | 13,400 | 288,234 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,000 | 12,000 | 24,000 | 411,240 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault | 10/01/15 | 07/28/15 | 208,542 | 297,917 | 595,833 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/07/15 | 07/28/15 | 1,500 | 6,000 | 12,000 | 151,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/13 | 11/16/12 | 42,000 | 32.71 | 199,458 | 12/07/15 | 07/28/15 | 750 | 3,000 | 6,000 | 128,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/07/15 | 07/28/15 | 12,000 | 433,774 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/24/13 | 11/16/12 | 1,500 | 6,000 | 12,000 | 229,620 | 01/01/16 | 07/28/15 | 50,000 | 33.76 | 239,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 07/28/15 | 1,875 | 7,500 | 15,000 | 247,275 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. M. Gaudiosi | 10/01/15 | 11/19/15 | 174,743 | 291,238 | 582,475 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 70,000 | 33.76 | 335,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 2,750 | 11,000 | 22,000 | 362,670 |
(1) | The amounts shown under this heading relate to bonus opportunities under the relevant company’s annual bonus plan for Fiscal |
(2) | The awards shown for Messrs. Walsh, Oliver, |
The awards shown for Mr. Sheridan are performance units under the AmeriGas 2010 Plan, as described in COMPENSATION DISCUSSIONAND ANALYSIS.the Compensation Discussion and Analysis. Terms of these awards with respect to forfeitures and change in control, as defined in the AmeriGas 2010 Plan, are fashioned in a similar manner to the terms of the performance units granted under the Company’s 2004 Plan and the Company’s 2013 Plan.
(3) | The awards shown for Mr. |
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(4) | Options are granted under the Company’s |
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Outstanding Equity Awards at Year-End
The following table shows the outstanding stock option and performance unit awards held by the named executive officers at September 30, 2013.2016.
Outstanding Equity Awards at Year-End Table – Fiscal 2013 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Equity Awards at Year-End Table – Fiscal 2016 | Outstanding Equity Awards at Year-End Table – Fiscal 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Exercisable (#) | Number of (#) | Option Exercise Price ($) | Option Date | Number (#) | Market ($) | Equity (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||||||||||||||
J. L. Walsh |
| 120,000 125,000 125,000 83,333 41,666 | (1) (2) (3) (4) (5) |
| 41,667 83,334 119,000 86,000 | (4) (5) (6) (7) |
| 27.25 24.42 24.19 31.58 29.40 32.71 38.24 |
| 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 03/31/2023 | 0 | 0 |
| 28,000 26,000 23,000 21,000 | (12) (13) (14) (15) |
| 743,940 1,107,380 899,990 821,730 |
| 187,500 | (1) | 16.13 | 12/31/2019 | 0 | 0 | 63,000 | (11) | 5,643,540 | |||||||||||||||||||||||||||||||
187,500 | (2) | 21.06 | 12/31/2020 | 45,000 | (12) | 2,035,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
187,500 | (3) | 19.60 | 12/31/2021 | 50,000 | (13) | 2,262,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
178,500 | (4) | 21.81 | 12/31/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
129,000 | (5) | 25.50 | 03/31/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
270,000 | (6) | 135,000 | (6) | 27.64 | 12/31/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
102,000 | (7) | 204,000 | (7) | 37.98 | 12/31/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
330,000 | (8) | 33.76 | 12/31/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. R. Oliver |
| 18,750 75,000 | (8) (6) |
| 31.10 32.71 |
| 09/30/2022 12/31/2022 | 0 | 0 |
| 5,000 10,000 17,000 | (12) (13) (14) |
| 132,846 391,300 665,210 |
| 112,500 | (4) | 21.81 | 12/31/2022 | 0 | 0 | 19,500 | (11) | 1,746,810 | ||||||||||||||||||||||||||||||||||
L. R. Greenberg |
| 200,000 300,000 300,000 200,000 100,000 | (1) (2) (3) (4) (5) |
| 100,000 200,000 300,000 | (4) (5) (6) |
| 27.25 24.42 24.19 31.58 29.40 32.71 |
| 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 | 0 | 0 |
| 70,000 65,000 65,000 | (12) (13) (14) |
| 1,859,849 2,543,450 2,543,450 |
| ||||||||||||||||||||||||||||||||||||||||
77,500 | (6) | 38,750 | (6) | 27.64 | 12/31/2023 | 13,950 | (12) | 631,098 | ||||||||||||||||||||||||||||||||||||||||||||||||||
30,000 | (7) | 60,000 | (7) | 37.98 | 12/31/2024 | 15,000 | (13) | 678,600 | ||||||||||||||||||||||||||||||||||||||||||||||||||
100,000 | (8) | 33.76 | 12/31/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. E. Sheridan |
| 21,000 22,000 14,666 3,555 10,000 13,999 | (2) (3) (4) (9) (5) (10) |
| 7,334 1,778 20,000 28,001 71,250 | (4) (9) (5) (10) (6) |
| 24.42 24.19 31.58 32.52 29.40 28.04 32.71 |
| 12/31/2018 12/31/2019 12/31/2020 05/08/2021 12/31/2021 03/02/2022 12/31/2022 | 1,821(16) | 78,430(17) |
| 3,200 1,584 4,500 8,000 14,250 | (18) (19) (20) (21) (22) |
| 0 0 193,815 344,560 613,748 |
| 28,500 | (6) | 27.64 | 12/31/2023 | 0 | 0 | 9,500 | (14) | 867,540 | |||||||||||||||||||||||||||||||
20,000 | (9) | 40,000 | (9) | 38.05 | 1/20/2025 | 8,000 | (15) | 547,920 | ||||||||||||||||||||||||||||||||||||||||||||||||||
65,000 | (8) | 33.76 | 12/31/2025 | 6,950 | (16) | 317,337 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
13,300 | (17) | 607,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,700 | (18) | 305,922 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (19) | 547,920 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault | 50,000 | (8) | 33.76 | 12/31/2025 | 3,000 | (11) | 268,740 | |||||||||||||||||||||||||||||||||||||||||||||||||||
6,000 | (12) | 271,440 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (20) | 542,880 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7,500 | (13) | 339,300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. M. Gaudiosi | 16,666 | (11) |
| 33,334 50,000 | (11) (6) |
| 26.62 32.71 |
| 04/22/2022 12/31/2022 | 0 | 0 |
| 6,667 10,000 10,000 | (12) (13) (14) |
| 177,142 391,300 391,300 |
| 75,000 | (10) | 17.75 | 04/22/2022 | 0 | 0 | 12,750 | (11) | 1,142,145 | ||||||||||||||||||||||||||||||||
B. C. Hall |
| 37,000 28,000 14,000 | (3) (4) (5) |
| 14,000 28,000 42,000 | (4) (5) (6) |
| 24.19 31.58 29.40 32.71 |
| 12/31/2019 12/31/2020 12/31/2021 12/31/2022 | 0 | 0 |
| 7,000 7,000 6,000 | (12) (13) (14) |
| 185,985 273,910 234,780 |
| ||||||||||||||||||||||||||||||||||||||||
75,000 | (4) | 21.81 | 12/31/2022 | 9,450 | (12) | 427,518 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | (6) | 25,000 | (6) | 27.64 | 12/31/2023 | 11,000 | (13) | 497,640 | ||||||||||||||||||||||||||||||||||||||||||||||||||
21,000 | (7) | 42,000 | (7) | 37.98 | 12/31/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
70,000 | (8) | 33.76 | 12/31/2025 |
Note : Column (d) was intentionally omitted.
(1) |
These options were granted effective January 1, 2010 and were fully vested on January 1, 2013. |
These options were granted effective January 1, |
(3) | These options were granted effective January 1, 2012 and were fully vested on January 1, 2015. |
(4) | These options were granted effective January 1, 2013 and were fully vested on January 1, 2016. |
(5) | These options were granted effective April 1, 2013 in connection with Mr. Walsh’s promotion to Chief Executive Officer in 2013 and were fully vested on April 1, 2016. |
(6) | These options were granted effective January 1, 2014. These options vest 33 1/3 percent on each anniversary of the grant date and will be fully vested on January 1, |
These options were granted effective January 1, |
These options were granted effective January 1, |
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These options were granted effective |
(10) |
These options were granted effective April 23, 2012. These options |
The amount shown relates to a target award of performance units granted effective January 1, |
These performance units were awarded January 1, |
These performance units were awarded January |
The amount shown relates to a target award of AmeriGas Partners performance units granted effective January 1, |
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for |
The amount shown relates to a target award of AmeriGas Partners performance units |
The amount shown relates to a target award of AmeriGas Partners performance units granted effective January 21, 2015. The performance measurement period for these performance units is January 1, 2015 through December 31, 2017. The value of the number of performance units that may be earned at the end of the performance period is based on AmeriGas Partners’ TUR relative to that of each of the master limited partnerships in the Alerian MLP Index as of the first day of the performance measurement period, and then modified based on AmeriGas Partners’ three-year TUR relative to the TUR of the other companies in the Propane MLP Group. The actual number of performance units and accompanying distribution equivalents earned may be higher (up to 200 percent of the target award) or lower than the amount shown, based on TUR performance through the end of the performance period. This number is then modified as follows: (i) if AmeriGas Partners’ TUR ranks first in the Propane MLP Group for the three-year period, then the performance unit payout will be leveraged at 130 percent; (ii) if AmeriGas Partners’ TUR ranks second in the Propane MLP Group for the three-year period, then the performance unit payout will be leveraged at 100 percent; and (iii) if AmeriGas Partners’ TUR ranks third in the Propane MLP Group for the three-year period, then the performance unit payout will be leveraged at 70 percent. The overall payout is capped at 200 percent of the target number of |
performance units awarded. The performance units will be payable, if at all, on January 1, 2018. See COMPENSATION DISCUSSION AND ANALYSIS – Long-Term Compensation – Fiscal 2016 Equity Awards for more information on the TUR performance goal measurements. |
(17) | The amount shown relates to a target award of AmeriGas Partners performance units granted effective January 21, 2015. The performance measurement period for these performance units is October 1, 2014 through September 30, 2017, but will be payable, if at all, on January 1, 2018. The value of the number of performance units that may be earned at the end of the performance period is based on AmeriGas Partners’ customer gain/loss performance during the three-year performance period, measured based on annual targets, each with a one-third weighting. The annual amounts are then subject to adjustment depending on the overall achievement of a cumulative three-year performance goal. If the three-year cumulative customer gain/loss goal is exceeded, then the individual result for years one and two will be multiplied by 130 percent. If the three-year cumulative customer gain/loss goal is not met, then the individual result for years one and two will be multiplied by 70 percent. The overall payout is capped at 200 percent of the target number of performance units awarded. Based on customer gain/loss performance during Fiscal 2015 and Fiscal 2016, neither the year one nor year two targets were achieved. See COMPENSATION DISCUSSION AND ANALYSIS – Long-Term Compensation – Fiscal 2016 Equity Awards for more information on the performance goal measurements. |
(18) | These performance units were awarded January 1, |
The amount shown relates to a target award of AmeriGas Partners performance units |
These |
Option Exercises and Stock Vested in Fiscal 20132016
The following table sets forth (i) the number of shares of UGI Corporation common stock acquired by the named executive officers in Fiscal 20132016 from the exercise of stock options, (ii) the value realized by those officers upon the exercise of stock options based on the difference between the market price for our common stock on the date of exercise and the exercise price for the options, (iii) the number of performance units and stock units previously granted to the named executive officers that vested in Fiscal 2013,2016, and (iv) the value realized by those officers upon the vesting of such units based on the closing market price for shares of our common stock, or for Mr. Sheridan, common units of AmeriGas Partners, on the vesting date.
Option Exercises and Stock Vested Table – Fiscal 2013 | ||||||||||||||||||||||||
Option Exercises and Stock Vested Table – Fiscal 2016 | Option Exercises and Stock Vested Table – Fiscal 2016 | |||||||||||||||||||||||
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||||||||||||||
J. L. Walsh | 190,000 | 2,525,750 | 16,716 | 546,780 | 100,000 | 2,372,500 | 129,624 | 4,376,106 | ||||||||||||||||
K. R. Oliver | 0 | 0 | 0 | 0 | 28,125 | 650,619 | 50,082 | 1,690,768 | ||||||||||||||||
L. R. Greenberg | 845,000 | 12,557,550 | 41,790 | 1,366,950 | ||||||||||||||||||||
J. E. Sheridan | 68,000 | 1,134,480 | 0 | 0 | 64,125 | 1,069,983 | 23,156 | 793,556 | ||||||||||||||||
R. Perreault | 0 | 0 | 0 | 0 | ||||||||||||||||||||
M. M. Gaudiosi | 0 | 0 | 1,989 | 65,060 | 0 | 0 | 29,460 | 994,570 | ||||||||||||||||
B. C. Hall | 73,000 | 1,201,110 | 4,179 | 136,695 |
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Pension Benefits
The following table shows (i) the number of years of credited service for the named executive officers under the Company’s defined benefit retirement plan (which we refer to below as the “UGI Utilities, Inc. Retirement Plan”) and its supplemental executive retirement plan (which we refer to below as the “UGI SERP”), (ii) the actuarial present value of accumulated benefits under those plans as of September 30, 2013,2016, and (iii) any payments made to the named executive officers in Fiscal 20132016 under those plans.
Pension Benefits Table – Fiscal 2013 | ||||||||||||||||||||||
Pension Benefits Table – Fiscal 2016 | Pension Benefits Table – Fiscal 2016 | |||||||||||||||||||||
Name | Plan Name | Number of (#) | Present Value of ($) | Payments During Last Fiscal Year ($) | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||||||||||||
J. L. Walsh | UGI SERP | 8 | 2,324,054 | 0 | ||||||||||||||||||
UGI SERP | 11 | 7,270,402 | 0 | |||||||||||||||||||
J. L. Walsh | UGI Utilities, Inc. Retirement Plan | 8 | 366,055 | 0 | UGI Utilities, Inc. Retirement Income Plan | 11 | 722,078 | 0 | ||||||||||||||
None | 0 | 0 | 0 | None | 0 | 0 | 0 | |||||||||||||||
L. R. Greenberg | UGI SERP | 33 | 0 | 21,019,606 | ||||||||||||||||||
UGI Utilities, Inc. Retirement Plan | 33 | 1,913,115 | 60,818 | |||||||||||||||||||
J. E. Sheridan | None | 0 | 0 | 0 | None | 0 | 0 | 0 | ||||||||||||||
R. Perreault | None | 0 | 0 | 0 | ||||||||||||||||||
M. M. Gaudiosi | None | 0 | 0 | 0 | None | 0 | 0 | 0 | ||||||||||||||
B. C. Hall | UGI SERP | 31 | 1,609,082 | 0 | ||||||||||||||||||
UGI Utilities, Inc. Retirement Plan | 31 | 1,426,084 | 0 |
The Company participates in the UGI Utilities, Inc. Retirement IncomePension Plan a qualified defined benefit retirement plan (“Pension Plan”), to provide retirement income to its employees hired prior to January 1, 2009. The UGI Pension Plan pays benefits based upon final average earnings, consisting of base salary or wages and annual bonuses and years of credited service. Benefits vest after the participant completes five years of vesting service.
The UGI Pension Plan provides normal annual retirement benefits at age 65, unreduced early retirement benefits at age 62 with ten years of service and reduced, but subsidized, early retirement benefits at age 55 with ten years of service. Employees terminating prior to early retirement eligibility are eligible to receive a benefit under the plan formula commencing at age 65 or an unsubsidized benefit as early as age 55, provided they had 10 years of service at termination. Employees who have attained age 50 with 15 years of service and are involuntarily terminated by the Company prior to age 55 are also eligible for subsidized early retirement benefits, beginning at age 55.
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The UGI Pension Plan’s normal retirement benefit formula is (A) – (B) and is shown below:
A = The minimumlower of (1) and (2), where
(1) = 1.9% of five-year final average earnings (as defined in the UGI Pension Plan) multiplied by years of service;
(2) = 60% of the highest year of year of earnings; and
B = 1% of the estimated primary Social Security benefit multiplied by years of service.
The amount of the benefit produced by the formula will be reduced by an early retirement factor based on the employee’s actual age in years and months as of his early retirement date. The reduction factors range from 65 percent at age 55 to 100 percent (no reduction) at age 62.
The normal form of benefit under the UGI Pension Plan for a married employee is a 50 percent joint and survivor lifetime annuity. Regardless of marital status, a participant may choose from a number of lifetime annuity payments.
The UGI Pension Plan is subject to qualified-plan Code limits on the amount of annual benefit that may be paid and on the amount of compensation that may be taken into account in calculating retirement benefits under the plan. For plan year 2013,2016, the limit on the compensation that may be used is $250,000$265,000 and the limit on annual benefits payable for an employee retiring at age 65 in 20132016 is $200,000.$210,000. Benefits in excess of those permitted under the statutory limits are paid from the Company’s Supplemental Executive Retirement Plan, described below.
Messrs.Mr. Walsh and Hall areis currently eligible for early retirement benefits under the UGI Pension Plan. Mr. Greenberg retired in Fiscal 2013 and has begun receiving benefits from the Retirement Income Plan.
UGI Corporation Supplemental Executive Retirement Plan
The Company’s Supplemental Executive Retirement Plan (“SERP”)UGI SERP is a non-qualified defined benefit plan that provides retirement benefits that would otherwise be provided under the UGI Pension Plan to employees hired prior to January 1, 2009, but are prohibited from being paid from the UGI Pension Plan by Code limits. The benefit paid by the SERP is approximately equal to the difference between the benefits provided under the UGI Pension Plan to eligible participants and benefits that would have been provided by the UGI Pension Plan if not for the limitations of the Employee Retirement Income Security Act of 1974, as amended, and the Code. Benefits vest after the participant completes 5 years of vesting service. The benefits earned under the SERP are payable in the form of a lump sum payment or transferred intorolled over to the Company’s nonqualified deferred compensation plan. For participants who attained age 50 prior to January 1, 2004, the lump sum payment is calculated using two interest rates. One rate is for the service prior to January 1, 2004 and the other is for service after January 1, 2004. The rate for pre-January 1, 2004 service is the daily average of Moody’s Aaa bond yields for the month in which the participant’s termination date occurs, plus 50 basis points,
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and tax-adjusted using the highest marginal federal tax rate. The interest rate for post-January 1, 2004 service is the daily average of ten-year Treasury Bond yields in effect for the month in which the participant’s termination date occurs. The latter rate is used for calculating the lump sum payment for participants attaining age 50 on or after January 1, 2004. Payment is due within 60 days after the termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code.
Mr. Greenberg retired in Fiscal 2013 and therefore his benefit was transferred to the Company’s nonqualified deferred compensation plan.
Actuarial assumptions used to determine values in the Pension Benefits Table –— Fiscal 20132016
The amounts shown in the Pension Benefit Table above are actuarial present values of the benefits accumulated through September 30, 2013.2016. An actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount that,which, if invested today at the discount rate, would be sufficient on an average basis to provide estimated future payments based on the current accumulated benefit. The assumed retirement age for each named executive is age 62, which is the earliest age at which the executive could retire without any benefit reduction due to age. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age. The key assumptions included in the calculations are as follows:
September 30, 2013 | September 30, 2012 | September 30, 2016 | September 30, 2015 | |||||
Discount rate for Pension Plan for all purposes and for SERP, for pre-commencement calculations | 5.20% | 4.20% | ||||||
Discount rate for UGI Pension Plan for all purposes and for SERP, for pre-commencement calculations | 3.80% (UGI Pension Plan) 3.00% (SERP) | 4.60% | ||||||
SERP lump sum rate | 3.10% for applicable pre-2004 service; 2.60% for other service | 2.60% | 2.40% for applicable pre-2004 service; 1.60% for other service | 2.70% for applicable pre-2004 service; 2.10% for other service | ||||
Retirement age: | 62 | 62 | ||||||
Retirement age | 62 | 62 | ||||||
Postretirement mortality for Pension Plan | RP-2000, combined, healthy table projected to 2020 using Scale AA without collar adjustments | RP-2000, combined, healthy table projected to 2019 using Scale AA without collar adjustments | RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 4.3%; projected forward on a generational basis using Scale BB-2D | RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 4.3%; projected forward on a generational basis using Scale BB-2D | ||||
Postretirement Mortality for SERP | 1994 GAR Unisex | 1994 GAR Unisex | 1994 GAR Unisex | 1994 GAR Unisex | ||||
Preretirement Mortality | none | none | none | none | ||||
Termination and disability rates | none | none | none | none | ||||
Form of payment – qualified plan | Single life annuity | Single life annuity | Single life annuity | Single life annuity | ||||
Form of payment – nonqualified plan | Lump sum | Lump sum | Lump sum | Lump sum |
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Nonqualified Deferred Compensation
The following table shows the contributions, earnings, withdrawals and account balances for each of the named executive officers who participate in the Company’s Supplemental Savings Plan (“SSP”), the 2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees (“2009 UGI SERP”), and the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan (“AmeriGas SERP”), and the AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan..
Nonqualified Deferred Compensation Table – Fiscal 2013 | ||||||||||||||||||||||||||||||||||
Nonqualified Deferred Compensation Table – Fiscal 2016 | Nonqualified Deferred Compensation Table – Fiscal 2016 | |||||||||||||||||||||||||||||||||
Name | Plan Name | Executive in Last Fiscal Year ($) | Employer Contributions in Last Fiscal Year ($) | Aggregate in Last Fiscal | Aggregate Withdrawals/ Distributions ($) | Aggregate ($)(3) | Plan Name | Executive Contributions in Last Fiscal Year ($) | Employer Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(4) | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||||||||||
J. L. Walsh | UGI Supplemental Savings Plan | 0 | 19,674(1) | 18,677 | 0 | 203,638 | SSP | 0 | 55,662 | (1) | 3,866 | 0 | 427,703 | |||||||||||||||||||||
K. R. Oliver | 2009 UGI SERP for New Employees | 0 | 75,051 | 0 | 0 | 0 | 2009 UGI SERP | 0 | 74,046 | (2) | 6,040 | 0 | 292,658 | |||||||||||||||||||||
L. R. Greenberg | UGI Supplemental Savings Plan | 0 | 66,167(1) | 162,256 | 0 | 1,092,451 | ||||||||||||||||||||||||||||
J. E. Sheridan | AmeriGas SERP | 0 | 60,491(2) | 51,101 | 0 | 325,210 | AmeriGas SERP | 0 | 40,858 | (3) | 22,014 | 0 | 634,122 | |||||||||||||||||||||
R. Perreault | 2009 UGI SERP | 0 | 68,725 | (2) | 0 | 0 | 0 | |||||||||||||||||||||||||||
M. M. Gaudiosi | 2009 UGI SERP for New Employees | 0 | 51,768 | 2,156 | 0 | 18,831 | 2009 UGI SERP | 0 | 55,339 | (2) | 10,396 | 0 | 235,134 | |||||||||||||||||||||
B. C. Hall | UGI Supplemental Savings Plan | 0 | 1,935(1) | 6,291 | 0 | 63,895 |
(1) | This amount represents the employer contribution to the Company’s |
(2) | This amount represents the employer contribution to the 2009 UGI SERP, which is also reported in the Summary Compensation Table in the “All Other Compensation” column. |
(3) | This amount represents the employer contribution to the AmeriGas SERP, which is also reported in the Summary Compensation Table |
The aggregate balances do not include the Company contributions for Fiscal |
The UGI Corporation Supplemental Savings Plan (“SSP”)SSP is a nonqualified deferred compensation plan that provides benefits to certain employees that would be provided under the Company’s 401(k) Savings Plan in the absence of Code limitations. Benefits vest after the participant completes five years of service. The SSP is intended to pay an amount substantially equal to the difference between the Company matching contribution that would have been made under the 401(k) Savings Plan if the Code limitations were not in effect and the Company match actually made under the 401(k) Savings Plan. The Code compensation limit for each of plan years 2011 and 2012 was $245,000 and for plan year 2013, $250,000. The Code contribution limit for plan year 20112016 was $49,000 and for each of plan years 2012 and 2013, was $50,000.$265,000. Under the SSP, the participant is credited with a Company match on compensation in excess of Code limits using the same formula applicable to contributions to the Company’s 401(k) Savings Plan, which is a match of 50 percent on the first 3 percent of eligible compensation, and a match of 25 percent on the next 3 percent, assuming that the employee contributed to the 401(k) Savings Plan the lesser of 6 percent of eligible
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compensation and the maximum amount permissible under the Code. Amounts credited to the participant’s account are credited with interest. The rate of interest currently in effect is the rate produced by blending the annual return on the Standard and Poor’s 500 Index (60 percent weighting) and the annual return on the Barclays Capital U.S. Aggregate Bond Index (40 percent weighting). Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code.
The AmeriGas SERP is a nonqualified deferred compensation plan that is intended to provide retirement benefits to certain AmeriGas Propane employees. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($250,000265,000 in plan year 2013)2016) and 10 percent of compensation in excess of such limit. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Propane, Inc. 401(k) Savings Plan (“AmeriGas 401(k) Savings Plan”) is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings
and losses on the amount, will be credited to athe participant’s account. Benefits vest on the fifth anniversary of a participant’s employment commencement date. Participants direct the investment of their account balances among a number of funds, which are generally the same funds available to participants in the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code. Amounts payable under the AmeriGas SERP may be deferred in accordance with the Company’s 2009 Deferral Plan. See COMPENSATION DISCUSSIONCOMPENSATION DISCUSSION AND ANALYSIS ANALYSIS – UGI Corporation 2009 Deferral Plan.Plan, page 40.
The AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan is a nonqualified deferred compensation plan that provides benefits to certain employees that would otherwise be provided under the AmeriGas 401(k) Savings Plan. The plan is intended to permit participants to defer up to $10,000 of annual compensation that would generally not be eligible for contribution to the AmeriGas 401(k) Savings Plan due to Code limitations and nondiscrimination requirements. Participants may direct the investment of deferred amounts into a number of funds. The funds available are the same funds available under the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code.
The 2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees (the “2009 UGI SERP”)SERP is a nonqualified deferred compensation plan that is
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intended to provide retirement benefits to executive officers who are not eligible to participate in the UGI Pension Plan, having been hired on or after January 1, 2009. Under the 2009 UGI SERP, the Company credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($250,000265,000 in plan year 2013)2016) and 10 percent of compensation in excess of such limit. In addition, if any portion of the Company’s matching contribution under the UGI Utilities, Inc.Company’s 401(k) Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to athe participant’s account. Benefits vest on the fifth anniversary of a participant’s employment commencement date. Participants direct the investment of their account balances among a number of mutual funds, which are generally the same funds available to participants in the UGI Utilities, Inc.Company’s 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code. Amounts payable under the 2009 UGI SERP may be deferred in accordance with the UGI CorporationCompany’s 2009 Deferral Plan. See COMPENSATION DISCUSSIONCOMPENSATION DISCUSSION AND ANALYSIS ANALYSIS – UGI Corporation 2009 Deferral Plan.Plan, page 40.
Potential Payments Upon Termination or Change in Control
Severance Pay Plan for Senior Executive Employees
Named Executive Officers Employed by UGI Corporation. The UGI Corporation Senior Executive Employee Severance Plan (the “UGI Severance Plan”) provides for payment to certain senior level employees of UGI, including Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi, in the event their employment is terminated without fault on their part. Benefits are payable to a senior executive covered by the UGI Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause or as a result of the senior executive’s death or disability. Under the UGI Severance Plan, “just cause” generally means dismissal of an executive due to (i) misappropriation of funds, (ii) substance abuseconviction of a felony or habitual insobriety that adversely affectscrime involving moral turpitude, (iii) material breach of the executive’s abilityCompany’s code of conduct or other written employment policies, (iv) breach of a written restrictive covenant agreement, (v) gross misconduct in the performance of his or her duties, or (vi) the intentional refusal or failure to perform his or her job, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance ofmaterial duties.
Except as provided herein, the UGI Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service (the “Continuation Period”). In the case of Mr. Walsh, the Continuation Period is 30 months. In addition, a participant may receive an annual bonus for his or her year of termination, subject to the Committee’s discretion and not to exceed the amount of his or her bonus under the Annual Bonus Plan, pro-rated for the number of months served in the fiscal year prior to termination. The levels of severance payments were established by the Committee based on competitive practice and are reviewed by management and the Committee from time to time.
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Under the UGI Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental coverage under the Company’s plans for the Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee), provided continued medical and dental coverage would not result in adverse tax consequences to the participant or UGI and its affiliatesthe Company and is permitted under the applicable medical and dental plans. The maximum period for calculating the payment of such benefits is 18 months (30 months in the case of Mr. Walsh). The UGI Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment and reimbursement for tax preparation services, if eligible, for the final year of employment.
In order to receive benefits under the UGI Severance Plan, a participant is required to execute a release that discharges UGI and its subsidiaries from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with UGI or its subsidiaries. The UGI Severance Plan also requires a senior executive to ratify any existing post-employment activities agreement (which restricts the senior executive from competing with UGI and its affiliatesthe Company following termination of employment) and to cooperate in attending to matters pending at the time of termination of employment.
Named Executive Officers Employed by AmeriGas Propane. The AmeriGas Propane, Inc. Senior Executive Employee Severance Plan (the “AmeriGas Severance Plan”) provides for payment to certain senior level employees of AmeriGas Propane, including Mr. Sheridan, in the event their employment is terminated without fault on their part. Specified benefits are payable to a senior executive covered by the AmeriGas Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause or as a result of the senior executive’s death or disability. Under the AmeriGas Severance Plan, “just cause” generally means dismissal of an executive due to (i) misappropriation of funds, (ii) substance abuse or habitual insobriety that adversely affects the executive’s ability to perform his job, (iii) conviction of a felony or crime involving moral turpitude, (iii) material breach of AmeriGas Propane’s code of conduct or other written employment policies, (iv) breach of a written restrictive covenant agreement, (v) gross negligencemisconduct in the performance of his or her duties, or (vi) the intentional refusal or failure to perform his or her material duties.
Except as provided herein, the AmeriGas Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service (the “AmeriGas Continuation Period”). In the case of Mr. Sheridan, the AmeriGas Continuation Period ranges from 12 months to 24 months, depending on length of service. In addition, a participant may receive an annual bonus for his or her year of termination, subject to the Committee’s discretion and not to exceed the amount of his or her bonus under the Annual Bonus Plan, pro-rated for the number of months served in the fiscal year prior to termination. The levels of severance payments were established by the Committee based on competitive practice and are reviewed by management and the Committee from time to time.
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Under the AmeriGas Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental coverage under AmeriGas Propane’s plans for the AmeriGas Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee), provided continued medical and dental coverage would not result in adverse tax consequences to the participant or UGI and its affiliatesAmeriGas Propane and is permitted under the
applicable medical and dental plans. The AmeriGas Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment, and reimbursement for tax preparation services, if eligible, for the final year of employment.
In order to receive benefits under the AmeriGas Severance Plan, a participant is required to execute a release that discharges AmeriGas Propane and its affiliates from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates. Each senior executive is also required to ratify any existing post-employment activities agreement (which restricts the senior executive from competing with AmeriGas PartnersPropane and its affiliates following termination of employment) and to cooperate in attending to matters pending at the time of termination of employment.
Change in Control Arrangements
Named Executive Officers Employed by UGI Corporation. Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi each have an agreement with the Company that provides benefits in the event of a change in control. Messrs.Mr. Walsh’s and Hall’s agreements haveagreement has a term of one year with automatic one-year extensions each year, unless in each case, prior to a change in control, the Company terminates such agreement with required advance notice. Each of Mr.Messrs. Oliver’s and Perreault’s and Ms. Gaudiosi’s agreement has a term of three years with automatic one-year extensions each year, unless, prior to a change in control, the Company terminates such agreement with required advance notice. In the absence of a change in control or termination by the Company, each agreement will terminate when, for any reason, the executive terminates his or her employment with the Company. A change in control is generally deemed to occur in the following instances:
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Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
Individuals who at the beginning of any 24-month period constitute the Board of Directors (the “Incumbent Board”), and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority; |
- 71 -The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation; or
|
|
The Company is liquidated or dissolved.
The Company will provide each of Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi with cash benefits if we terminate his or her employment without “cause” or if he or she terminates employment for “good reason” at any time within two years following a change in control of the Company. “Cause” generally includes (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. “Good reason” generally includes a material diminution in authority, duties, responsibilities or base compensation; a material breach by the Company of the terms of the agreement; and substantial relocation requirements. If the events trigger a payment following a change in control, the Benefitsbenefits payable to each of Messrs. Walsh, Oliver Halland Perreault and Ms. Gaudiosi will be as specified under his or her change in control agreement unless payments under the UGI Severance Plan described above would be greater, in which case benefits would be provided under the UGI Severance Plan.
Benefits under this arrangement would be equal to three times the executive officer’s base salary and annual bonus. Each executive would also receive the cash equivalent of his or her target bonus, prorated for the number of months served in the fiscal year. In addition, Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi are each entitled to receive a payment equal to the cost he or she would incur if he or she enrolled in the Company’s medical and dental plans for three years (less the amount he or she would be required to contribute for such coverage if he or she were an active employee). Messrs.Mr. Walsh Oliver and Hall and Ms. Gaudiosi would also have benefits under the Company’s Supplemental Executive Retirement PlanUGI SERP and Mr.SSP. Messrs. Oliver and Perreault and Ms. Gaudiosi would also have benefits under the Company’s 2009 UGI SERP, calculated as if each of them had continued in employment for three years. In addition, outstanding performance units, stock units and dividend equivalents will only be paid for a qualifying termination of employment and will be paid in cash based on the fair market value of the Company’s common stock in an amount equal to the greater of (i) the target award, and (ii) the award amount that would have been paid if the performance unit measurement period ended on the date of the change in control, as determined by the Compensation and Management Development Committee. For treatment of stock options, see the Grants of Plan - BasedPlan-Based Awards Table - Fiscal 2013.Table.
The benefits for Messrs.Mr. Walsh and Hall are subject to a “conditional gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code. The Company will provide the tax gross-up if the aggregate parachute value of benefits is greater than 110 percent of the maximum amount that may be paid under Section 280G of the Code without imposition of an excise tax. If the
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parachute value does not exceed the 110 percent threshold, the benefits for each of Messrs.Mr. Walsh and Hall will be reduced to the extent necessary to avoid imposition of the excise tax on “excess parachute payments.” The Company discontinued the use of a tax gross-up in July of 2010 for executives who enter into change in control agreements subsequent thereto. As a result, Mr.Messrs. Oliver’s and Perreault’s and Ms. Gaudiosi’s benefits are not subject to a “conditional gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code.
In order to receive benefits under his or her change in control agreement, each of Messrs. Walsh, Oliver and HallPerreault and Ms. Gaudiosi is required to execute a release that discharges the Company and its subsidiaries from liability for any claims he or she may have against any of them, other than claims for amounts or benefits due under any plan, program or contract provided by or entered into with the Company or its subsidiaries.
Named Executive Officers Employed by AmeriGas Propane Inc. Mr. Sheridan has an agreement with AmeriGas Propane that provides benefits in the event of a change in control. His agreement has a term of one year and is automatically extended for one-year terms each year unless, prior to a change in control, AmeriGas Propane terminates his agreement with required advance notice. In the absence of a change in control or termination by AmeriGas Propane, his agreement will terminate when, for any reason, he terminates his employment with AmeriGas Propane. A change in control is generally deemed to occur in the following instances:
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Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
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Individuals who at the beginning of any 24-month period constitute the Company’s Board of Directors (the “Incumbent Board”), and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
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The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation;
AmeriGas Propane, AmeriGas Partners or AmeriGas Propane, L.P. is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another entity in a transaction with respect to which all of the individuals and entities who were owners of AmeriGas Propane’s voting securities or the outstanding units of the Partnership immediately prior to such transaction do not, following such transaction, own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation, or if the resulting entity is a partnership, the former unitholders do not own more than 50 percent of the outstanding common units in substantially the same proportion as their ownership immediately prior to the transaction;
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The Company, AmeriGas Propane, AmeriGas Partners or AmeriGas Propane, L.P. (the “Operating Partnership”) is liquidated or dissolved;
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The Company fails to own more than 50 percent of the outstanding shares of common stock of AmeriGas Propane; or
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AmeriGas Propane is removed as the General Partner of AmeriGas Partners or the Operating Partnership.
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AmeriGas Propane will provide Mr. Sheridan with cash benefits if there is a termination of his employment without “cause” or if he terminates employment for “good reason” at any time within two years following a change in control. “Cause” generally includes (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 AmeriGas Propane. “Good reason” generally includes a material diminution in authority, duties, responsibilities or base compensation; a material breach by AmeriGas Propane of the terms of the agreement; and substantial relocation requirements. If the events trigger a payment following a change in control, the benefits payable to Mr. Sheridan will be as specified under his change in control agreement unless payments under the AmeriGas Severance Plan described above would be greater, in which case benefits would be provided under the AmeriGas Severance Plan.
Benefits under this arrangement would be equal to three times Mr. Sheridan’s base salary and annual bonus. Mr. Sheridan would also receive the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, he is entitled to receive a payment equal to the cost he would incur if he enrolled in AmeriGas Propane’s medical and dental plans for three years (less the amount he would be required to contribute for such coverage if he were an active employee). Mr. Sheridan would also receive his benefits under the AmeriGas SERP calculated as if he had continued in employment for three years. In addition, outstanding performance units and distribution equivalents will only be paid for a qualifying termination of employment and will be paid in cash based on the fair market value of AmeriGas Partners common units in an amount equal to the greater of (i) the target award, and (ii) the award amount that would have been paid if the measurement period ended on the date of the change in control, as determined by the
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AmeriGas Propane Compensation/Pension Committee. For treatment of stock options, see the Grants of Plan-Based Awards Table – Fiscal 2013.Table.
AmeriGas Propane discontinued the use of a tax gross-up in November of 2010 and, as a result, Mr. Sheridan’s benefits are not subject to a “conditional gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code.
In order to receive benefits under his change in control agreement, Mr. Sheridan is required to execute a release that discharges AmeriGas Propane and its affiliates from liability for any claims he may have against any of them, other than claims for amounts or benefits due under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates.
Potential Payments Upon Termination or Change in Control
The amounts shown in the table below are merely estimates of the incremental amounts that would be paid out to the named executive officers if their termination had occurred on the last day of Fiscal 2013.2016. The actual amounts to be paid out can only be determined at the time of such named executive officer’s termination of employment. The amounts set forth in the table below do not include compensation to which each named executive officer would be entitled without regard to his termination of employment, including (i) base salary and short-term incentives that have been earned but not yet paid, and (ii) amounts that have been earned, but not yet paid, under the terms of the plans reflected in the Pension Benefits Table – Fiscal 2013 and the Nonqualified Deferred Compensation Table – Fiscal 2013.Table. There are no incremental payments in the event of voluntary resignation, termination for cause, disability or upon retirement. For a description of the amount paid to Mr. Greenberg as a result of his retirement, see the Pension Benefits Table – Fiscal 2013.
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Potential Payments Upon Termination or Change in Control Table – Fiscal 2013 | ||||||||||||||||||||||||||||||
Potential Payments Upon Termination or Change in Control Table – Fiscal 2016 | Potential Payments Upon Termination or Change in Control Table – Fiscal 2016 | |||||||||||||||||||||||||||||
Name & Triggering Event | Severance Pay($)(1)(2) | Equity Awards with Accelerated Vesting($)(3) | Nonqualified Retirement Benefits($)(4) | Welfare & Other Benefits($)(5) | Total($) | Severance Pay($)(1)(2) | Equity Awards with Accelerated Vesting($)(3) | Nonqualified Retirement Benefits($)(4) | Welfare & Other Benefits($)(5) | Total($) | ||||||||||||||||||||
J. L. Walsh | ||||||||||||||||||||||||||||||
Death | 0 | 4,313,737 | 1,751,952 | 0 | 6,065,689 | 0 | 12,606,760 | 6,278,353 | 0 | 18,885,113 | ||||||||||||||||||||
Involuntary Termination Without Cause | 4,576,942 | 0 | 2,018,378 | 60,690 | 6,656,010 | 6,597,285 | 0 | 7,386,298 | 60,967 | 14,044,550 | ||||||||||||||||||||
Termination Following Change in Control | 6,704,864 | 7,504,162 | 4,846,734 | 6,788,120 | 25,843,880 | 9,299,777 | 20,509,117 | 12,368,561 | 12,906,994 | 55,084,449 | ||||||||||||||||||||
K. R. Oliver | ||||||||||||||||||||||||||||||
Death | 0 | 1,094,537 | 0 | 0 | 1,094,537 | 0 | 3,794,712 | 0 | 0 | 3,794,712 | ||||||||||||||||||||
Involuntary Termination Without Cause | 878,471 | 0 | 0 | 36,069 | 914,540 | 1,054,281 | 0 | 0 | 38,807 | 1,093,088 | ||||||||||||||||||||
Termination Following Change in Control | 3,090,000 | 2,390,574 | 96,938 | 87,651 | 5,665,163 | 3,502,618 | 6,206,637 | 288,018 | 82,364 | 10,079,637 | ||||||||||||||||||||
J. E. Sheridan | ||||||||||||||||||||||||||||||
Death | 0 | 1,838,423 | 0 | 0 | 1,838,423 | 0 | 3,235,474 | 0 | 0 | 3,235,474 | ||||||||||||||||||||
Involuntary Termination Without Cause | 1,557,335 | 0 | 0 | 41,462 | 1,598,797 | 1,910,343 | 0 | 0 | 71,522 | 1,981,865 | ||||||||||||||||||||
Termination Following Change in Control | 2,945,124 | 2,466,261 | 218,261 | 66,462 | 5,696,108 | 3,357,472 | 5,349,973 | 252,675 | 95,977 | 9,056,097 | ||||||||||||||||||||
R. Perreault | ||||||||||||||||||||||||||||||
Death | 0 | 958,544 | 0 | 0 | 958,544 | |||||||||||||||||||||||||
Involuntary Termination Without Cause | 786,571 | 0 | 0 | 34,780 | 821,351 | |||||||||||||||||||||||||
Termination Following Change in Control | 2,112,917 | 1,884,739 | 155,000 | 54,910 | 4,207,566 | |||||||||||||||||||||||||
M. M. Gaudiosi | ||||||||||||||||||||||||||||||
Death | 0 | 1,303,220 | 0 | 0 | 1,303,220 | 0 | 2,576,222 | 0 | 0 | 2,576,222 | ||||||||||||||||||||
Involuntary Termination Without Cause | 616,460 | 0 | 0 | 25,545 | 642,005 | 814,432 | 0 | 0 | 27,156 | 841,588 | ||||||||||||||||||||
Termination Following Change in Control | 2,203,437 | 2,281,170 | 59,681 | 31,687 | 4,575,975 | 2,643,497 | 4,251,474 | 210,662 | 30,307 | 7,135,940 | ||||||||||||||||||||
B. C. Hall | ||||||||||||||||||||||||||||||
Death | 0 | 1,182,557 | 1,505,254 | 0 | 2,687,811 | |||||||||||||||||||||||||
Involuntary Termination Without Cause | 1,074,761 | 0 | 1,746,234 | 66,826 | 2,887,821 | |||||||||||||||||||||||||
Termination Following Change in Control | 1,934,570 | 1,757,702 | 3,104,007 | 1,971,173 | 8,767,452 |
(1) | Amounts shown under “Severance Pay” in the case of involuntary termination without cause are calculated under the terms of the UGI Severance Plan for Messrs. Walsh, Oliver and |
(2) | Amounts shown under “Severance Pay” in the case of termination following a change in control are calculated under the officer’s change in control agreement. |
(3) | In calculating the amounts shown under “Equity Awards with Accelerated Vesting”, we assumed (i) the continuation of the Company’s dividend (and AmeriGas Partners’ distribution, as applicable) at the rate in effect on September 30, |
(4) | Amounts shown under “Nonqualified Retirement Benefits” are in addition to amounts shown in the Pension Benefits Table – Fiscal |
(5) | Amounts shown under “Welfare and Other Benefits” include estimated payments for (i) medical and dental insurance premiums, (ii) outplacement services, (iii) tax preparation services, and (iv) an estimated Code Section 280G tax gross-up payment of |
Director and Officer Stock Ownership Policies
The following policies are designed to encourage growth in shareholder value by closely linking Directors’ and executives’ risks and rewards with the Company’s total Shareholder return.
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The Board of Directors has a policy requiring Directors to own Company common stock, together with stock units, in an aggregate amount equal to three times the Director’s annual cash retainer, and to achieve the target level of common stock ownership within five years after joining the Board.
The Company has a policy, approved by the Board of Directors, that requires individuals in key management positions with the Company and its subsidiaries to own significant amounts of common stock. See Compensation Discussion and Analysis – Stock Ownership Guidelines.
Market Price of Shares
The closing price of our Stock, as reported on the New York Stock Exchange Composite Tape on November 29, 2013,14, 2016, was $40.26.$43.19.
SECURITIES OWNERSHIPOF CERTAIN BENEFICIAL OWNERS |
Security Ownership of Directors and Executive Officers
The following table shows the number of shares beneficially owned by each Director, by each of the executive officers named in the Summary Compensation Table, and by all Directors and executive officers as a group. The table shows their beneficial ownership as of October 1, 2016. The address for each beneficial owner in the table below is c/o UGI Corporation, P.O. Box 858, Valley Forge, PA 19482.
Each person named in the table beneficially owns less than 1 percent of the outstanding common stock. Directors and executive officers as a group own approximately 2.2 percent of the outstanding common stock. For purposes of reporting total beneficial ownership, shares that may be acquired within 60 days of October 1, 2016 through UGI Corporation stock option exercises are included.
Beneficial Ownership of Directors, Nominees and Named Executive Officers
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Name | Number of Shares of UGI Common Stock(1) | Number of UGI Stock Units(2) | Exercisable Options For UGI Common Stock | |||||||||
M. Shawn Bort | 6,525 | (3) | 33,656 | 96,750 | ||||||||
Monica M. Gaudiosi | 40,223 | 0 | 221,000 | |||||||||
Richard W. Gochnauer | 0 | 24,435 | 71,250 | |||||||||
Frank S. Hermance | 150,000 | (4) | 22,178 | 64,875 | ||||||||
Ernest E. Jones | 11,566 | 70,718 | 109,500 | |||||||||
Kirk R. Oliver | 47,756 | (5) | 0 | 220,000 | ||||||||
Anne Pol | 5,259 | 132,041 | 102,750 | |||||||||
Roger Perreault | 0 | (6) | 0 | 0 | ||||||||
Marvin O. Schlanger | 65,586 | (7) | 111,989 | 109,500 | ||||||||
Jerry E. Sheridan | 2,014 | (8) | 0 | 20,000 | ||||||||
James B. Stallings, Jr. | 0 | 3,950 | 11,800 | |||||||||
Roger B. Vincent | 22,516 | (9) | 48,535 | 58,500 | ||||||||
John L. Walsh | 392,562 | (10) | 0 | 1,242,000 | ||||||||
Directors and executive officers as a group (16 persons) | 904,627 | 447,502 | 2,528,725 |
(1) | Sole voting and investment power unless otherwise specified. |
(2) | The 2004 Plan and the 2013 Plan each provides that stock units will be converted to shares and paid out to Directors upon their retirement or termination of service. |
(3) | Ms. Bort’s shares are held jointly with her spouse. |
(4) | Mr. Hermance holds these shares jointly with his spouse. |
(5) | Includes 3,255 shares held jointly with Mr. Oliver’s spouse and 556 shares in his UGI Savings Plan. |
(6) | Does not include 12,000 shares of restricted stock. |
(7) | Includes 3,000 shares held by Mr. Schlanger’s spouse. Mr. Schlanger disclaims beneficial ownership of the shares owned by his spouse. |
(8) | Mr. Sheridan holds these shares in his AmeriGas Savings Plan. |
(9) | Includes 15,000 shares in a family trust for which Mr. Vincent’s spouse is a trustee. Mr. Vincent disclaims beneficial ownership of the shares held in the family trust. |
(10) | Mr. Walsh’s shares are held jointly with his spouse. |
ITEM 2 — ADVISORY VOTEON UGI CORPORATION’S EXECUTIVE COMPENSATIONSecurities Ownership of Certain Beneficial Owners
The following table shows information regarding each person known by the Company to be the beneficial owner of more than five percent of the Company’s common stock. The ownership information below is based on information reported on a Form 13F as filed with the SEC in November 2016 for the quarter ended September 30, 2016.
Securities Ownership of Certain Beneficial Owners
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |||||||
Common Stock | The Vanguard Group, Inc. P.O. Box 2600 Valley Forge, PA 19482 | 17,628,313(2) | 10.18% | |||||||
Common Stock | Wellington Management Group LLP c/o Wellington Management Company LLP 280 Congress Street Boston, MA 02210 | 16,141,561(3) | 9.32% | |||||||
Common Stock | State Street Corporation One Lincoln Street Boston, MA 02111 | 9,065,286(4) | 5.23% |
(1) | Based on 172,960,449 shares of common stock issued and outstanding at September 30, 2016. |
(2) | The reporting person, and certain related entities, have shared voting power with respect to 31,700 shares, sole voting power with respect to 168,289 shares, shared investment power with respect to 191,289 shares, and sole investment power with respect to 17,437,024 shares. |
(3) | The reporting person, and certain related entities, have shared voting power with respect to 11,558,540 shares and shared investment power with respect to 16,141,561 shares. |
(4) | The reporting person, and certain related entities, have sole voting power with respect to 1,077,139 shares and shared investment power with respect to 9,065,286 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our Directors, certain officers and 10 percent beneficial owners to report their ownership of shares and changes in such ownership to the SEC. Based on our records, we believe that, during Fiscal 2016, all of such reporting persons complied with all Section 16(a) reporting requirements applicable to them. However, Mr. Jerry E. Sheridan was inadvertently late in filing one Form 4 relating to a stock option exercise due to an administrative error.
ITEM 2 — ADVISORY VOTEON UGI CORPORATION’S EXECUTIVE COMPENSATION |
Pursuant to Section 14A of the Exchange Act, the Company is providing shareholders with the opportunity to cast an advisory, non-binding vote to approve the compensation of our named executive officers. The compensation of our named executive officers is disclosed under the headings Compensation“Compensation Discussion and AnalysisAnalysis” and Compensation“Compensation of Executive Officers,Officers” beginning on pages 2921 and 5542, respectively, of this Proxy Statement, respectively.Statement. At the 2016 Annual Meeting, over 96% of our shareholders voted to approve the compensation of our named executive officers.
We believe that we closely align the interests of our named executive officers and our shareholders.shareholders are closely aligned. As described in our COMPENSATION DISCUSSIONAND ANALYSIS, ourthe Compensation Discussion and Analysis, the compensation program for our named executive officers is designed to provide a competitive level of total compensation, to motivate and encourage our executive officers to contribute to the Company’s success and to effectively link our executives’ compensation to our financial performance and sustainable growth in shareholder value. OurThe Compensation Discussion and Analysis also describes in detail the components of our executive compensation program and the process by which, and the reasons why, the independent members of our Board of Directors and our Compensation and Management Development Committee make executive compensation decisions.
In making executive compensation decisions, our Compensation and Management Development Committee seeks to implement and maintain sound compensation and corporate governance practices, which include the following:
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Our Compensation and Management Development Committee is composed entirely of directors who are independent, as defined in the corporate governance listing standards of the New York Stock Exchange.
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Our Compensation and Management Development Committee utilizes the services of Pay Governance LLC, an independent outside compensation consultant.
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The Company allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2016, 81% of the principal compensation components, in the case of Mr. Walsh, and 70% to 75% of the principal compensation components, in the case of all other named executive officers, were variable and tied to financial performance or TSR.
The Company awards a substantial portion of compensation in the form of long-term awards, namely stock options and performance units, so that executive officers’ interests are aligned with shareholders’ interests and long-term Company performance. |
- 78 -Annual bonus opportunities for the named executive officers are based on key financial metrics. Similarly, long-term incentives are based on UGI Corporation common stock values and relative stock price performance (or, in the case of Mr. Sheridan, performance relative to AmeriGas Partners common units and other key strategic goals).
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We require termination of employment for payment under our change in control agreements (referred to as a “double trigger”). In addition, beginning in January of 2015, we require a double trigger for the accelerated vesting of equity awards in the event of a change in control. We have not entered into change in control agreements providing for tax gross-up payments under Section 280G of the Internal Revenue Code since 2010. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52.
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We have meaningful stock ownership guidelines. See COMPENSATION OF EXECUTIVE OFFICERS — Stock Ownership Guidelines, beginning on page 41.
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We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement due to material non-compliance with financial reporting requirements.
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We have a policy prohibiting the Company’s Directors and executive officers from (i) hedging the securities of UGI Corporation and AmeriGas Partners, (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, and (iii) pledging the securities of UGI Corporation and AmeriGas Partners.
This vote is advisory, which means that the vote on executive compensation is not binding on the Company, our Board of Directors or the Compensation and Management Development Committee. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers. The Board of Directors and the Compensation and Management Development Committee expect to take into account the outcome of this vote when considering future executive compensation decisions and will evaluate whether any actions are necessary to address shareholders’ concerns, to the extent a significant number of our shareholders vote against our compensation program.
Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including our Compensation Discussion and Analysis, compensation tables, and the related narrative discussion, is hereby APPROVED.
The Board of Directors of UGI Corporation unanimously recommends a vote FOR the approval of the compensation paid to our named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related narrative discussion in this Proxy Statement. |
ITEM 3 — ADVISORY VOTEONTHE FREQUENCYOF FUTURE ADVISORY VOTESON UGI CORPORATION’S EXECUTIVE COMPENSATION |
Pursuant to Section 14A of the Exchange Act, as amended, the Company is providing shareholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to cast future advisory votes on the compensation of our named executive officers. Shareholders may indicate whether they would prefer that the Company conduct future advisory votes on executive compensation once every one, two, or three years.
The Board of Directors of UGI Corporation unanimouslyhas determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for the Company and recommends that shareholders vote for a one-year interval for the advisory vote on executive compensation.
In determining to recommend that shareholders vote for a frequency of once every year, the Board of Directors considered that an annual advisory vote on executive compensation will allow for frequent input from our shareholders on our compensation philosophy, policies and practices, rather than infrequent feedback every two or three years. Similarly, any shareholder concerns about our executive compensation program can be expressed through a vote FORwithout having to wait two or three years. In addition, the approvalBoard of Directors considered survey data on our institutional shareholders’ preferences as to the frequency of the advisory vote to approve the named executive officers’ compensation.
The vote on the frequency of the advisory vote on executive compensation paidis advisory only. This means that the vote on executive compensation is not binding on the Company, the Board of Directors, or the Compensation and Management Development Committee. The Company recognizes that shareholders may have different views as to the best approach for the Company. The Board of Directors and the Compensation and Management Development Committee will take into account the outcome of the vote; however, when considering the frequency of future advisory votes on executive compensation, the Board of Directors may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders. Also, in accordance with applicable law, shareholders will have the opportunity to recommend the frequency of future advisory votes on executive compensation at least once every six years.
Shareholders may cast a vote on the preferred voting frequency by selecting the option of one year, two years, or three years (or abstain) when voting in response to the following resolution:
RESOLVED, that the shareholders determine, on an advisory basis, whether the preferred frequency of an advisory vote on the executive compensation of the Company’s named executive officers as disclosed inshould be every one year, every two years, or every three years.
The enclosed proxy card provides shareholders with the COMPENSATION DISCUSSIONAND ANALYSIS,opportunity to choose among four options (holding the compensation tablesvote every one, two, or three years, or abstain from voting) and, therefore, shareholders will not be voting to approve or disapprove the related narrative discussion in this Proxy Statement.
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The Board of Directors of UGI Corporation unanimously recommends that an advisory vote on executive compensation be held every one (1) year. |
ITEM 4 — RATIFICATIONOF APPOINTMENTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
ITEM 3 — OTHER MATTERSThe Audit Committee of the Board of Directors appointed Ernst & Young LLP as our independent registered public accounting firm to examine and report on the consolidated financial statements of the Company for Fiscal 2017 and recommends that shareholders ratify the appointment. If shareholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will consider the appointment of another independent registered public accounting firm. One or more representatives of Ernst & Young LLP will be present at the Annual Meeting. They will have the opportunity to respond to appropriate questions and to make a statement if they wish to do so.
The Board of Directors of UGI Corporation unanimously recommends a vote FOR this proposal.
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ITEM 5 — OTHER MATTERS |
The Board of Directors is not aware of any other matter to be presented for action at the meeting. If any other matter requiring a vote of shareholders should arise, the Proxies (or their substitutes) will vote in accordance with their best judgment.
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APPENDIX A
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
The following table includes a reconciliation of net income attributable to AmeriGas Partners, L.P. to EBITDA (1) and Adjusted EBITDA (2) for the period presented:
Twelve Months Ended September 30, 2013 (in millions) | ||||
Net (loss) income attributable to AmeriGas Partners, L.P. | $ | 221.2 | ||
Income tax expense | 1.7 | |||
Interest expense | 165.4 | |||
Depreciation | 159.3 | |||
Amortization | 43.6 | |||
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| |||
EBITDA(1) | $ | 591.2 | ||
Heritage Propane acquisition and transition expense | 26.5 | |||
Loss on extinguishments of debt | — | |||
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Adjusted EBITDA(2) | $ | 617.7 | ||
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DIRECTIONSTO THE DESMOND HOTELAND CONFERENCE
CENTER
Directions from Philadelphia. Take the Schuylkill Expressway (I-76) West. Follow I-76 West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from South Jersey.Take I-95 South to Route 322 West. Take 322 West to Route 1 South to Route 202 North. Take Route 202 North to Great Valley/Route 29 North Exit. At the end of the ramp, turn right onto Matthews Road. Turn right at the next light onto RouteMorehall Road (Route 29 North.North). Turn right at second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from Philadelphia Airport. Take I-95 South to 476 North. Follow 476 North to the Schuylkill Expressway (I-76) West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Wilmington and Points South (Delaware and Maryland). Take I-95 North to Route 202 North to the Great Valley/Route 29 North Exit. TurnAt the end of the ramp, turn right onto Route 29 North.Matthews Road. Turn right at the next light onto Morehall Road (Route 29 North). Turn right at the second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from New York and Points NorthNorth.. Take the New Jersey Turnpike South to Exit 6, theI-276, Pennsylvania Turnpike extension.connector. Follow the Turnpike I-276 West to Exit 326, Valley Forge. Take the first exit, Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Harrisburg and Points West. Take the Pennsylvania Turnpike, I-76, East to Exit 326, Valley Forge. Take Route 202 South to Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
E-Z Pass Holders: Take the Pennsylvania Turnpike, I-76 to Exit 320, Malvern (Exit 320 is an electronic interchange for E-Z pass holders only). At the end of the ramp, turn left at the traffic light onto Morehall Road (Route 29 South) toward Malvern. Proceed on Morehall Road (Route 29 South) to the fourth traffic light at Liberty Boulevard. Turn left onto Liberty Boulevard and The Desmond will be on your left.
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UGI
CORPORATION
IMPORTANT ANNUAL MEETING INFORMATION 000004
ENDORSEMENT LINE SACKPACK
MR A SAMPLE
DESIGNATION (IF ANY)
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 9:00 a.m., Eastern Standard Time, on January 30, 2014.
24, 2017. Vote by Internet
• Go to www.envisionreports.com/UGI
• Or scan the QR code with your smartphone
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Vote by telephone
• Call toll free 1-800-652-VOTE (8683) within the USA, US territories &
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Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.
x • Follow the instructions provided by the recorded message Annual Meeting Proxy Card 1234 5678 9012 345
IF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A Proposals — The Board of Directors recommends that youa vote FOR Numbers 1all the nominees and 2.
FOR Proposals 2 and 4 and for the option of “1 YEAR” for Proposal 3. 1. Election of Directors:
For Against Abstain For Against Abstain For Against Abstain + 01 - L.R. GreenbergM.S. Bort 02 - R.W. Gochnauer 03 - F.S. Hermance 04 - A. Pol 05 - M.O. Schlanger 0306 - A. Pol
04J.B. Stallings, Jr. 07 - E.E. Jones 05R.B. Vincent 08 - J.L. Walsh 06 - R.B. Vincent +
07 - M.S. Puccio 08 - R.W. Gochnauer 09 - F.S. Hermance
Mark here to vote FOR all nominees Mark here to WITHHOLD vote from all nominees
For All EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. 01 02 03 04 05 06 07 08 09
Against Abstain 1 Year 2 Years 3 Years Abstain 2. Proposal to approve resolution on executive compensation.
For Against Abstain
3. Recommend the frequency of future advisory votes on executive compensation. 4. Proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm. B Non-Voting Items
Change of Address — Please print new address below. Comments — Please print your comments below.
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
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140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 02GK0B
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IF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
UGI
CORPORATION
Proxy — UGI CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UGI CORPORATION
The undersigned hereby appoints Marvin O. Schlanger, Lon R. GreenbergRoger B. Vincent and John L. Walsh, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of UGI Corporation Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Shareholders of the Company to be held January 30, 201424, 2017 or at any adjournment thereof, with all powers which the undersigned would possess if present at the Meeting.
For the participants in the UGI Utilities, Inc. Savings Plan, AmeriGas Propane, Inc. Savings Plan, and the UGI HVAC Enterprises, Inc. Savings Plan (together, the “Plans”), this Proxy Card will constitute voting instructions to the Trustee under the Plans, as indicated by me on the reverse side, but, if I make no indication as to a particular matter, then as recommended by the Board of Directors on such matter, and in their discretion, upon such other matters as may properly come before the Meeting. The Trustee will keep my vote completely confidential. If the Trustee does not receive my executed Proxy by January 27, 2014,19, 2017, I understand the Trustee will vote the shares represented by this Proxy in the same proportion as it votes those shares for which it does receive a properly executed Proxy.
(Continued, (Continued, and to be marked, dated and signed, on the other side)
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UGI CORPORATION
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Notice of Annual Meeting of Shareholders 1234 5678 9012 345
Vote by Internet
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Important Notice Regarding the Availability of Proxy Materials for the UGI Corporation Shareholder Meeting to be Held on January 30, 2014
Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the Annual Meeting of Shareholders are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and the location of the Annual Meeting are on the reverse side. Your vote is important!
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement and annual report to shareholders are available at:
www.envisionreports.com/UGI
Easy Online Access — A Convenient Way to View Proxy Materials and Vote
When you go online to view materials, you can also vote your shares.
Step 1: Go to www.envisionreports.com/UGI to view the materials.
Step 2: Click on Cast Your Vote or Request Materials.
Step 3: Follow the instructions on the screen to log in.
Step 4: Make your selection as instructed on each screen to select delivery preferences and vote.
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
Obtaining a Copy of the Proxy Materials – If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side on or before January 20, 2014 to facilitate timely delivery.
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Shareholder Meeting Notice
UGI Corporation’s Annual Meeting of Shareholders will be held on January 30, 2014 at The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania 19355, at 10:00 a.m. Eastern Standard Time.
Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations.
The Board of Directors recommends that you vote FOR Numbers 1 and 2.
1. Election of Directors:
01 - L.R. Greenberg
02 - M.O. Schlanger
03 - A. Pol
04 - E.E. Jones
05 - J.L. Walsh
06 - R.B. Vincent
07 - M.S. Puccio
08 - R.W. Gochnauer
09 - F.S. Hermance
2. Proposal to approve resolution on executive compensation.
PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you.
DIRECTIONS TO THE DESMOND HOTEL AND CONFERENCE CENTER
Directions from Philadelphia. Take the Schuylkill Expressway (I-76) West. Follow I-76 West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from South Jersey. Take I-95 South to Route 322 West. Take 322 West to Route 1 South to Route 202 North. Take Route 202 North to Great Valley/Route 29 North Exit. At the end of the ramp, turn right onto Matthews Road. Turn right at the next light onto Route 29 North. Turn right at the second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from Philadelphia Airport. Take I-95 South to 476 North. Follow 476 North to the Schuylkill Expressway (I-76) West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Wilmington and Points South (Delaware and Maryland). Take I-95 North to Route 202 North to the Great Valley/Route 29 North Exit. At the end of the ramp, turn right onto Matthews Road. Turn right at the next light onto Route 29 North. Turn right at the second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from New York and Points North. Take the New Jersey Turnpike South to Exit 6, the Pennsylvania Turnpike extension. Follow the Turnpike West to Exit 326, Valley Forge. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Harrisburg and Points West. Take the Pennsylvania Turnpike East to Exit 326, Valley Forge. Take Route 202 South to Great Valley/Route
29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Here’s how to order a copy of the proxy materials and select a future delivery preference:
Paper copies: Current and future paper delivery requests can be submitted using the telephone, Internet or email options below.
Email copies: Current and future email delivery requests must be submitted over the Internet following the instructions below. If you request an email copy of current materials you will receive an email with a link to the materials.
PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials.
Internet – Go to www.envisionreports.com/UGI. Click Cast Your Vote or Request Materials. Follow the instructions to log in and order a paper or email copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials.
Telephone – Call us free of charge at 1-866-641-4276 using a touch-tone phone and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings.
Email – Send an email to investorvote@computershare.com with “Proxy Materials UGI Corporation” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings. To facilitate timely delivery, all requests for a paper copy of the proxy materials should be made by January 20, 2014.
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