EXHIBIT 10.7
UGI CORPORATION
2002 NON-QUALIFIED STOCK OPTION PLAN
AMENDED AND RESTATED AS OF APRIL 29, 2003
TABLE OF CONTENTS
Section Number Page
1. Purpose and Design.............................................. 1
2. Definitions..................................................... 1
3. Maximum Number of Shares Available for Options.................. 2
4. Duration of the Plan............................................ 3
5. Administration.................................................. 3
6. Eligibility..................................................... 3
7. Options......................................................... 3
8. Non-Transferability............................................. 6
9. Consequences of a Change of Control............................. 6
10. Adjustment of Number and Price of Shares, Etc................... 7
11. Limitation of Rights............................................ 7
12. Amendment or Termination of Plan................................ 7
13. Tax Withholding................................................. 8
14. Governmental Approval........................................... 8
15. Effective Date of Plan.......................................... 8
16. Successors...................................................... 8
17. Headings and Captions........................................... 8
18. Governing Law................................................... 8
(i)
UGI CORPORATION
2002 NON-QUALIFIED STOCK OPTION PLAN
AMENDED AND RESTATED AS OF APRIL 29, 2003
1. PURPOSE AND DESIGN
The purpose of this Plan is to assist the Company in securing,
motivating and retaining managerial talent by affording managers and other
key Employees an opportunity to purchase the Company's Stock under options.
2. DEFINITIONS
Whenever used in this Plan, the following terms will have the respective
meanings set forth below:
2.01 "Board" means UGI's Board of Directors as constituted from
time to time.
2.02 "Change of Control" means a change of control as defined in
a change of control agreement between a Participant's respective employer and
certain of its employees.
2.03 "Committee" means the Compensation and Management
Development Committee of the Board or its successor.
2.04 "Company" means UGI Corporation, a Pennsylvania
corporation, any successor thereto and any Subsidiary.
2.05 "Date of Grant" means the effective date of an Option
grant; provided, however, that no retroactive grants will be made.
2.06 "Employee" means a regular full-time salaried employee
(including officers and directors who are also employees) of the Company.
2.07 "Fair Market Value" of Stock means the average, rounded to
the next highest cent ($0.01), of the highest and lowest sales prices thereof
on the New York Stock Exchange on the day on which Fair Market Value is being
determined, as reported on the Composite Tape for transactions on the New
York Stock Exchange. Notwithstanding the foregoing, in the case of a cashless
exercise pursuant to Section 7.4, the Fair Market Value will be the actual
sale price of the shares issued upon exercise of the Option. In the event
that there are no Stock transactions on the New York Stock Exchange on such
day, the Fair Market Value will be determined as of the immediately preceding
day on which there were Stock transactions on that exchange.
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2.08 "Option" means the right to purchase Stock pursuant to the
relevant provisions of this Plan at the Option Price for a specified period
of time, not to exceed ten years from the Date of Grant, which period of time
will be subject to earlier termination prior to exercise in accordance with
Section 7.3(b) of this Plan.
2.09 "Option Price" means an amount per share of Stock
purchasable under an Option designated by the Committee on the Date of Grant
of an Option to be payable upon exercise of such Option. The Option Price
will not be less than 100% of the Fair Market Value of the Stock determined
on the Date of Grant.
2.10 "Participant" means an Employee designated by the Committee
to participate in the Plan.
2.11 "Plan" means this 2002 Non-Qualified Stock Option Plan.
2.12 "Stock" means the Common Stock of UGI or such other
securities of UGI as may be substituted for Stock or such other securities
pursuant to Section 13.
2.13 "Subsidiary" means any corporation or partnership, at least
20% of the outstanding voting stock, voting power or partnership interest of
which is owned respectively, directly or indirectly, by the Company.
2.14 "Termination without Cause" means termination for the
convenience of the Company for any reason other than (i) misappropriation of
funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a
crime involving moral turpitude, or (iv) gross negligence in the performance
of duties, which gross negligence has had a material adverse effect on the
business, operations, assets, properties or financial condition of the
Company. The Committee will have the sole discretion to determine whether a
significant reduction in the duties and responsibilities of a Participant
will constitute a Termination without Cause.
2.15 "UGI" means UGI Corporation, a Pennsylvania corporation or
any successor thereto.
3. MAXIMUM NUMBER OF SHARES AVAILABLE FOR OPTIONS
The number of shares of Stock which may be made the subject of Options
under this Plan may not exceed 750,000 in the aggregate (after giving
retroactive effect to the 3-for-2 Stock split distributed April 1, 2003),
subject, however, to the adjustment provisions of Section 13. If any Option
expires or terminates for any reason without having been exercised in full,
the unpurchased shares subject to the Option will again be available for the
purposes of the Plan. Shares which are the subject of Options may be
previously issued and outstanding shares of Stock reacquired by the Company
and held in its treasury, or may be authorized but unissued shares of Stock,
or may be a combination of both.
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4. DURATION OF THE PLAN
The Plan will remain in effect until all Stock subject to it has been
transferred to Participants or all Options have terminated or been exercised.
Notwithstanding the foregoing, no Option may be granted after December 31,
2011.
5. ADMINISTRATION
The Plan will be administered by the Committee. Subject to the express
provisions of the Plan, the Committee will have authority, in its complete
discretion, to determine the Employees to whom, and the time or times at
which grants will be made. In making such determinations, the Committee may
take into account the nature of the services rendered by an Employee, the
present and potential contributions of the Employee to the Company's success
and such other factors as the Committee in its discretion deems relevant.
Awards under a particular Section of the Plan need not be uniform as among
Participants. Subject to the express provisions of the Plan, the Committee
will also have authority to construe and interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to determine the
terms and provisions of the respective stock option agreements required by
Section 7.2 of the Plan, and to make all other determinations (including
factual determinations) necessary or advisable for the orderly administration
of the Plan. All ministerial functions, in addition to those specifically
delegated elsewhere in the Plan, shall be performed by a committee comprised
of Company employees ("Administrative Committee") appointed by the
Committee. A stock option agreement, as discussed below, shall be executed
by each Participant receiving a grant under the Plan and shall constitute
that Participant's acknowledgement and acceptance of the terms of the Plan
and the Committee's authority and discretion.
6. ELIGIBILITY
Grants hereunder may be made only to managers and key Employees, other
than executive officers, as defined in the Securities Exchange Act of 1934,
as amended, of UGI Corporation, who are selected by the Committee, in its
sole discretion, to participate in the Plan.
7. OPTIONS
7.1 Grant of Options. Subject to the provisions of Sections 2.09 and
3: (i) Options may be granted to Participants at any time and from time to
time as may be determined by the Committee; and (ii) the Committee will have
complete discretion in determining the Options to be granted, the number of
shares of Stock to be subject to each Option, the Option Price to be paid for
the shares upon the exercise of each Option, the period within which each
Option may be exercised, and the vesting schedule associated with the Option.
7.2 Option Agreement. As determined by the Committee on the Date of
Grant, each Option will be evidenced by a stock option agreement that will,
among other things, specify the Date of Grant, the Option Price, the duration
of the Option, the number of shares of Stock to which the Option pertains and
the Option's vesting schedule.
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7.3 Exercise and Vesting.
(a) Except as otherwise specified by the Committee in the stock
option agreement, the Option shall become exercisable in equal one-third
(1/3) installments on the first, second and third anniversaries of the Date
of Grant. Notwithstanding the foregoing, in the event that any such Options
are not by their terms immediately exercisable, the Committee may accelerate
the exercisability of any or all outstanding Options at any time for any
reason. No Option will be exercisable on or after the tenth anniversary of
the Date of Grant.
(b) Except as otherwise specified by the Committee, in the
event that a Participant holding an Option ceases to be an Employee, the
Options held by such Participant will terminate on the date such Participant
ceases to be an Employee. The Committee will have authority to determine
whether an authorized leave of absence or absence on military or governmental
service will constitute a termination of employment for the purposes of this
Plan. However, if a Participant holding an Option ceases to be an Employee by
reason of (i) Termination without Cause, (ii) retirement, (iii) disability,
or (iv) death, the Option held by any such Participant will thereafter become
exercisable pursuant to the following:
(i) Termination Without Cause. If a Participant terminates
employment on account of a Termination without Cause, the Option held by such
Participant will thereafter be exercisable only with respect to that number
of shares of Stock with respect to which it is already exercisable on the
date such Participant ceases to be an Employee; and such Option will
terminate upon the earlier of the expiration date of the Option or the
expiration of the 13 month period commencing on the date such Participant
ceases to be an Employee.
(ii) Retirement. If a Participant terminates employment on
account of a retirement under the Company's retirement plan applicable to
that Participant, the Option held by such Participant will thereafter become
exercisable as if such Participant had remained employed by the Company for
36 months after the date of such retirement; and such Option will terminate
upon the earlier of the expiration date of the Option or the expiration of
such 36 month period. Retirement for Employees of AmeriGas Propane, Inc.
("API") means termination of employment with API after attaining age 55 with
ten or more years of service with API and its affiliates.
(iii) Disability. If a Participant is determined to be
"disabled" (as defined under the Company's long-term disability plan), the
Option held by such Participant will thereafter become exercisable as if such
Participant had remained employed by the Company for 36 months after the date
of such disability; and such Option will terminate upon the earlier of the
expiration date of the Option or the expiration of such 36 month period.
(iv) Death. In the event of the death of a Participant while
employed by the Company, the Option theretofore granted to such Participant
will be fully and immediately exercisable (to the extent not otherwise
exercisable by its terms) at any time prior to the earlier of the expiration
date of the Option or the expiration of the 12 month period following the
Participant's death. Death of a Participant after such Participant has ceased
to be employed by the
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Company will not affect the otherwise applicable period for exercise of the
Option determined pursuant to Sections 7.3(b)(i), 7.3(b)(ii) or 7.3(b)(iii).
Such Option may be exercised by the estate of the Participant, by any person to
whom the Participant may have bequeathed the Option, any person the Participant
may have designated to exercise the same under the Participant's last will, or
by the Participant's personal representatives if the Participant has died
intestate.
(c) Notwithstanding anything contained in this Section 7.3,
with respect to the number of shares of Stock subject to an Option with
respect to which such Option is or is to become exercisable, no Option, to
the extent that it has not previously been exercised, will be exercisable
after it has terminated, including without limitation, after any termination
of such Option pursuant to Section 7.3(b) hereof.
7.4 Payment. The Option Price of any Option will be payable to the
Company in full (i) in cash or its equivalent, (ii) by tendering shares of
previously acquired Stock already beneficially owned by the Participant for
more than one year and having a Fair Market Value at the time of exercise
equal to the Option Price being paid thereby, (iii) by payment through a
broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, (iv) by such other method as the Committee may approve, or (v)
by a combination of (i), (ii), (iii) and/or (iv). The cash proceeds from such
payment will be added to the general funds of the Company and will be used
for its general corporate purposes.
7.5 Written Notice. A Participant wishing to irrevocably exercise an
Option must give irrevocable written notice to the Company in the form and
manner prescribed by the Administrative Committee, indicating the date of
award, the number of shares as to which the Option is being exercised, and
such other information as may be required by the Administrative Committee.
Full payment for the shares pursuant to the option must be received by the
time specified by the Committee depending on the type of payment being made
but, in all cases, prior to the issuance of the shares. Except as provided
in Section 7.3(b), no Option may be exercised at any time unless the
Participant is then an Employee of the Company.
7.6 Issuance of Stock. As soon as practicable after the receipt of
irrevocable written notice and payment, the Company will, without stock
transfer taxes to the Participant or to any other person entitled to exercise
an Option pursuant to this Plan, deliver to, or credit electronically on
behalf of, the Participant, the Participant's designee or such other person
the requisite number of shares of Stock.
7.7 Privileges of a Shareholder. A Participant or any other person
entitled to exercise an Option under this Plan will have no rights as a
shareholder with respect to any Stock covered by the Option until the due
exercise of the Option and issuance of such Stock.
7.8 Partial Exercise. An Option granted under this Plan may be
exercised as to any lesser number of shares than the full amount for which it
could be exercised. Such a partial exercise of an Option will not affect the
right to exercise the Option from time to time in accordance with this Plan
as to the remaining shares subject to the Option.
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8. NON-TRANSFERABILITY
No Option granted under the Plan will be transferable otherwise than by
will or the laws of descent and distribution, and an Option may be exercised,
during the lifetime of the Participant, only by the Participant.
9. CONSEQUENCES OF A CHANGE OF CONTROL
9.1 Notice and Acceleration. Upon a Change of Control, unless the
Committee determines otherwise, (i) the Company will provide each Participant
with outstanding grants written notice of such Change of Control, and (ii)
all outstanding Options will automatically accelerate and become fully
exercisable.
9.2 Assumption of Grants. Upon a Change of Control where the Company
is not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding
Options that are not exercised will be assumed by, or replaced with
comparable options or rights by, the surviving corporation (or a parent of
the surviving corporation).
9.3 Other Alternatives. Notwithstanding the foregoing, subject to
Section 9.4 below, in the event of a Change of Control, the Committee may
take any of the following actions with respect to any or all outstanding
Options: the Committee may (i) require that Participants surrender their
outstanding Options in exchange for a payment by the Company, in cash or
Stock as determined by the Committee, in an amount equal to the amount by
which the then Fair Market Value of the shares of Stock subject to the
Participant's unexercised Options exceeds the Option Price of the Options, as
applicable, or (ii) after giving Participants an opportunity to exercise
their outstanding Options, terminate any or all unexercised Options at such
time as the Committee deems appropriate. Such surrender, termination or
settlement will take place as of the date of the Change of Control or such
other date as the Committee may specify.
9.4 Committee. The Committee making the determinations under this
Section 9 following a Change of Control must be comprised of the same members
as those on the Committee immediately before the Change of Control. If the
Committee members do not meet this requirement, the automatic provisions of
Sections 9.1 and 9.2 will apply, and the Committee will not have discretion
to vary them.
9.5 Limitations. Notwithstanding anything in the Plan to the
contrary, in the event of a Change of Control, the Committee will not have
the right to take any actions described in the Plan (including without
limitation actions described in this Section 9) that would make the Change of
Control ineligible for pooling of interests accounting treatment or that
would make the Change of Control ineligible for desired accounting treatment
if, in the absence of such right, the Change of Control would qualify for
such treatment and the Company intends to use such treatment with respect to
the Change of Control.
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10. ADJUSTMENT OF NUMBER AND PRICE OF SHARES, ETC.
Notwithstanding anything to the contrary in this Plan, in the event any
recapitalization, reorganization, merger, consolidation, spin-off,
combination, repurchase, exchange of shares or other securities of UGI, stock
split or reverse split, extraordinary dividend, liquidation, dissolution,
significant corporate transaction (whether relating to assets or stock)
involving UGI, or other extraordinary transaction or event affects Stock such
that an adjustment is determined by the Committee to be appropriate in order
to prevent dilution or enlargement of Participants' rights under the Plan,
then the Committee may, in a manner that is equitable, adjust (i) any or all
of the number or kind of shares of Stock reserved for issuance under the
Plan, (ii) the maximum number of shares of Stock which may be the subject of
grants to any one individual in any calendar year, (iii) the number or kind
of shares of Stock to be subject to grants of Options thereafter granted
under the Plan, (iv) the number and kind of shares of Stock issuable upon
exercise of outstanding Options, and (v) the Option Price per share thereof,
provided that the number of shares subject to any Option will always be a
whole number. Any such determination of adjustments by the Committee will be
conclusive for all purposes of the Plan and of each Option, whether a stock
option agreement with respect to a particular Option has been theretofore or
is thereafter executed.
11. LIMITATION OF RIGHTS
Nothing contained in this Plan shall be construed to give an Employee
any right to be granted an Option hereunder except as may be authorized in
the discretion of the Committee. The granting of an Option under this Plan
shall not constitute or be evidence of any agreement or understanding,
expressed or implied, that the Company will employ a Participant for any
specified period of time, in any specific position or at any particular rate
of remuneration.
12. AMENDMENT OR TERMINATION OF PLAN
Subject to Board approval, the Committee may at any time, and from time
to time, alter, amend, suspend or terminate this Plan without the consent of
the Company's shareholders or Participants, except that any such alteration,
amendment, suspension or termination will be subject to the approval of the
Company's shareholders within one year after such Committee and Board action
if such shareholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system
on which the Stock is then listed or quoted, or if the Committee in its
discretion determines that obtaining such shareholder approval is for any
reason advisable. No termination or amendment of this Plan may, without the
consent of the Participant to whom any Option has previously been granted,
adversely affect the rights of such Participant under such Option.
Notwithstanding the foregoing, the Administrative Committee may make minor
amendments to this Plan which do not materially affect the rights of
Participants or significantly increase the cost to the Company.
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13. TAX WITHHOLDING
Upon exercise of any Option under this Plan, the Company will require
the recipient of the Stock to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements. However, to
the extent authorized by rules and regulations of the Administrative
Committee, the Company may withhold or receive Stock and make cash payments
in respect thereof in satisfaction of a recipient's tax obligations in an
amount that does not exceed the recipient's minimum applicable withholding
tax obligations. In the event the Company receives Stock in satisfaction of a
recipient's minimum applicable withholding tax obligations, the Stock must
have been held by the recipient for more than six months.
14. GOVERNMENTAL APPROVAL
Each Option will be subject to the requirement that if at any time the
listing, registration or qualification of the shares covered thereby upon any
securities exchange, or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the granting of such Option or the
purchase of shares thereunder, no such Option may be exercised in whole or in
part unless and until such listing, registration, qualification, consent or
approval has been effected or obtained free of any conditions not acceptable
to the Board.
15. EFFECTIVE DATE OF PLAN
This Plan will become effective as of January 1, 2002.
16. SUCCESSORS
This Plan will be binding upon and inure to the benefit of the Company,
its successors and assigns and the Participant and his heirs, executors,
administrators and legal representatives.
17. HEADINGS AND CAPTIONS
The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.
18. GOVERNING LAW
The validity, construction, interpretation and effect of the Plan and
option agreements issued under the Plan will be governed exclusively by and
determined in accordance with the law of the Commonwealth of Pennsylvania.
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