PENNSYLVANIA ENTERPRISES, INC.
1995 DIRECTORS' STOCK COMPENSATION PLAN
(Amended and Restated Effective as of November 19, 1997)
1. Purpose
The purpose of the Pennsylvania Enterprises, Inc. Stock Compensation
Plan for Directors (the "Plan") is to advance the interests of Pennsylvania
Enterprises, Inc. and its shareholders by providing an additional means to
attract and retain persons of exceptional ability to serve as Directors, by
providing an additional incentive to such persons for superior performance,
and more closely aligning their interests with those of other shareholders.
This Plan shall be interpreted and implemented in a manner so that awards
of shares of Common Stock to Directors will be exempt under Rule 16b-3 of
the Exchange Act, as such Rule and the Exchange Act may from time to time
be amended.
2. Definitions
Unless the context clearly indicates otherwise, the following terms
when used in this Plan shall have the meanings set forth in this section:
a. "Board of Directors" shall mean the Board of Directors of the
Company.
b. "Company" shall mean Pennsylvania Enterprises, Inc., a
Pennsylvania corporation, or its successor.
c. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
d. "Eligible Director" shall mean any member of the Board of
Directors who is not also a full-time employee of the Company
or of any of its affiliates.
e. "Common Stock" shall mean shares of common stock of the
Company, no par value, stated value $5 per share.
3. Shares of Common Stock to be Awarded Under the Plan
Common Stock awarded pursuant to the Plan may be shares of the
Corporation's authorized but unissued Common Stock or may be shares of
Common Stock reacquired by the Company and held in treasury.
4. Eligibility
Only Directors who are not full-time employees of the Company or any
of its affiliates shall be eligible to receive awards of shares of Common
Stock under this Plan.
5. Awards of Shares of Common Stock
a. Each year, at the organizational meeting of the Board of
Directors held immediately following the annual meeting of
shareholders, 400 shares of Common Stock shall automatically be
awarded to each person who is a continuing Eligible Director
and has completed at least one year of service, for his or her
services as a Director, being in addition to any retainer,
attendance or other fees or expenses.
b. If, prior to the beginning of the calendar year, the Director
has elected to defer receipt of the shares of Common Stock
until his or her termination of service as a Director, the
number of shares set forth above shall not be delivered as
provided in this Plan, but shall instead be credited to the
Director's account under the Director Deferred Compensation
Plan in the form of Stock Units, which thereafter shall be
subject to the terms of such Director Deferred Compensation
Plan.
c. If, prior to the beginning of the calendar year, the Director
has not made an election to defer receipt of the shares of
Common Stock, the Company shall deliver to the Director stock
certificates for such shares as soon as practicable after the
meeting of the Board of Directors referred to in paragraph 5.a.
Such shares shall thereafter be subject to the terms of this
Plan.
6. Adjustments
In the event of any reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, issuance of
rights or any other change in the capital structure of the Company, the
number and kind of shares of Common Stock or other securities or property
to be awarded hereunder shall be equitably adjusted to reflect the
occurrence of such event; provided, however, that no adjustment shall be
made except as shall be necessary to preserve, rather than enlarge, the
value of future awards under the Plan.
7. General Provisions
a. No Eligible Director or other person claiming under or through
an Eligible Director shall have any right, title or interest by
reason of the Plan to any particular assets of the Company.
The Company shall not be required to establish any fund or make
any other segregation of assets to assure the award of shares
of Common Stock hereunder.
b. All shares awarded under the Plan are non-forfeitable but are
non-transferable for a period of three (3) years following the
applicable award date, except that shares shall become
immediately transferable in the case of death, disability, or
retirement from the Board on or after age 65 [or in the event
of a Change of Control as such term is defined in the Director
Deferred Compensation Plan].
c. No right under this Plan shall be transferable or otherwise
subject to anticipation, sale, assignment, pledge, encumbrance
or charge.
d. Notwithstanding any other provision of this Plan, the Company
shall not be required to award or deliver any certificate for
shares of Common Stock under this Plan prior to fulfillment of
all of the following conditions:
1. Any required listing or approval or notice of issuance of
such shares on any securities exchange on which the Common
Stock may then be traded;
2. Any registration or other qualification of such shares under
any state or federal law or regulation or other
qualification which the Board of Directors shall upon the
advice of counsel deem necessary or advisable; or
3. The obtaining of any other required consent or approval or
permit from any state or federal government agency.
e. In no event shall the Company be required to issue a fractional
share hereunder.
f. The issuance of shares of Common Stock under the Plan shall be
subject to any applicable taxes or other laws or regulations of
the United States of America and any state or local authority
having jurisdiction thereover.
8. Effective Date; Termination and Amendment
a. The Plan shall be effective as of January 18, 1995, the date of
its approval by the Board of Directors; provided, however, that
awards shall not be made under the Plan prior to its approval
by the affirmative votes of the holders of the majority of the
Company's Common Stock present, or represented, and entitled to
vote on the Plan, at a duly constituted meeting of the
shareholders of the Company. The Plan as amended and restated
shall be effective as of November 19, 1997.
b. The Plan shall terminate on January 18, 2005. The Board of
Directors may also terminate the Plan or make such
modifications or amendments to the Plan as it may deem
advisable; provided, however, that the Board of Directors may
not amend the Plan without shareholder approval by the
affirmative votes of the holders of the majority of the
Company's Common Stock present, or represented, and entitled to
vote on the Plan, at a duly constituted meeting of the
shareholders of the Company for any of the following purposes:
(i) increase the number of shares of Common Stock which
may be awarded annually to each Eligible Director
under the Plan;
(ii) extend the term of the Plan;
(iii) modify the requirements as to eligibility to receive
awards of shares of Common Stock under the Plan;
(iv) make any other amendment to the Plan for which
approval by the shareholders of the Company is
required by any law, rule or stock exchange
requirement.
IN WITNESS WHEREOF, this Plan has been duly executed by an authorized
officer of the Company on this day of , 1997.
PENNSYLVANIA ENTERPRISES, INC.
/s/Thomas F. Karam
Thomas F. Karam
President and Chief Executive Officer