EXHIBIT 10.6
UGI CORPORATION 1992 NON-QUALIFIED
STOCK OPTION PLAN
AMENDED AND RESTATED AS OF APRIL 29, 2003
UGI CORPORATION
1992 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 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:
(a) "Board" means the Company's Board of Directors as constituted from
time to time.
(b) "Committee" means the Compensation and Management Development
Committee of the Board as constituted from time to time.
(c) "Company" means UGI Corporation, a Pennsylvania corporation (which
intends to change its name after the effective date hereof to UGI Utilities,
Inc.), or any successor thereto by merger, consolidation or statutory share
exchange; provided, however, that in the event that the Company's shareholders
approve the formation of a public utility holding company to own 100%, of the
Stock of the Company prior to January 1, 1993, then from and after any
reorganization (whether by merger or statutory share exchange) effecting such a
transaction, "Company" shall mean New UGI Corporation, a Pennsylvania
corporation (which intends to change its name after the effective date hereof to
UGI Corporation).
(d) "Employee" means a regular full-time salaried employee (including
officers who are also employees) of the Company or any Subsidiary of the
Company.
(e) "Fair Market Value" of Stock means the average, rounded to the next
highest one-eighth of a point (.125), of the highest and lowest sales prices
thereof on the New York Stock Exchange on the day on which Fair Market Value is
being determined, as reported on the Composite Tape for transactions on the New
York Stock Exchange; provided, however, in the case of a cashless exercise
pursuant to Section 7.4, the Fair Market Value shall be the actual sale price of
the shares issued upon exercise of the Option. In the event that there are no
Stock transactions on the New York Stock Exchange on such day, the Fair Market
Value will be determined as of the immediately preceding day on which there were
Stock transactions on that exchange.
(f) "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 date of grant, which period of time shall be subject to
earlier termination prior to exercise in accordance with Sections 10, 11 and 12
of this Plan.
(g) "Option Price" means an amount per share of Stock purchasable under
an Option equal to 100% of the Fair Market Value of the Stock determined on the
date of grant of an Option to be payable upon exercise of such Option.
(h) "Participant" means an Employee designated by the Committee to
participate in the Plan.
(i) "Subsidiary" means any corporation, at least 20% of the outstanding
voting stock or voting power of which is owned by the Company or a Subsidiary.
(j) "Stock" means the Common Stock of the Company, par value $2.25 per
share, or, in the event that, prior to January 1, 1993, the Company's
shareholders approve the formation of a public utility holding company system in
which 100% of the Stock of the Company is owned by a public utility holding
company, then from and after the effective date of any reorganization (whether
by merger or statutory share exchange) effecting such a transaction, "Stock"
shall mean the Common Stock of the Company, without par value, and, in either
case, such other securities of the Company as may be substituted for Stock or
such other securities pursuant to Section 13.
3. NUMBER AND SOURCE OF SHARES AVAILABLE FOR OPTIONS - MAXIMUM ALLOTMENT
The number of shares of Stock which may be made the subject of Options
under this Plan at any one time may not exceed 750,000 in the aggregate (after
giving retroactive effect to the 3-for-2 Stock split distributed April 1, 2003),
including shares acquired by Participants through exercise of Options under this
Plan, subject, however, to the adjustment provisions of Section 13 below. If any
Option expires or terminates for any reason without having been exercised in
full, the unpurchased shares subject to the Option will again be available for
the purposes of the Plan. Shares which are the subject of Options may be
previously issued and outstanding shares of the Stock reacquired by the Company
and held in its treasury, or may be authorized but unissued shares of Stock, or
may be partly of each.
4. DURATION OF THE PLAN
The Plan will remain in effect until all Stock subject to it has been
purchased pursuant to the exercise of Options. Notwithstanding the foregoing, no
Option may be granted after January 1, 2002.
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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 discretion, to
determine the Employees to whom, and the time or times at which, Options will be
granted, the number of shares to be subject to each Option, the Option Price to
be paid for the shares upon the exercise of each Option, and the period within
which each Option may be exercised. In making such determinations, the Committee
may take into account the nature of the services rendered by an Employee, the
present and potential contributions of the Employee to the Company's success and
such other factors as the Committee in its discretion deems relevant. Subject to
the express provisions of the Plan, the Committee will also have authority to
construe and interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective stock option agreements required by Section 7.2 of the Plan (which
need not be identical), and to make all other determinations necessary or
advisable for the orderly administration of the Plan. A Stock option agreement
as discussed below shall be executed by each Participant receiving a grant under
the Plan and shall constitute that Participant's acknowledgement and acceptance
of the terms of the Plan and the Committee's authority and discretion
6. ELIGIBILITY
Options may be granted only to key management Employees who do not
participate in any of the Company's Stock Option and Dividend Equivalent Plans
and who are selected by the Committee, in its sole judgment, to participate in
the Plan.
7. OPTIONS
7.1 Grant of Options. Subject to the provisions of Section 3, Options
may be granted to Participants at any time and from time to time as may be
determined by the Committee. The Committee will have complete discretion in
determining the number of Options granted to each Participant and the number of
shares of Stock subject to such Options.
7.2 Option Agreement. As determined by the Committee on the date of
grant, each Option will be evidenced by a stock option agreement that shall,
among other things, specify the Option Price, the duration of the Option and the
number of shares of Stock to which the Option pertains.
7.3 Exercise and Vesting.
(a) Except as otherwise specified by the Committee, an Option shall
be fully and immediately exercisable on the date of grant. Notwithstanding the
foregoing, in the event that any such Options are not by their terms immediately
exercisable, the Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason. No Option shall be exercisable
on or after the tenth anniversary of the date of grant.
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(b) If a Participant holding an Option ceases to be an Employee, the
Option held by such Participant shall be exercisable only with respect to that
number of shares of Stock with respect to which it is already exercisable on the
date such Participant ceases to be an Employee. However, if a Participant
holding an Option ceases to be an Employee by reason of a retirement under the
Company's or a Subsidiary's retirement plan, the Option held by any such
participant shall thereafter become exercisable with respect to that additional
number of shares of Stock with respect to which it becomes exercisable on any
anniversary of the date on which the Participant was granted the Option which
occurs within thirteen (13) months after the date of such retirement and such
Option shall be exercisable during such thirteen-month period. Notwithstanding
the foregoing, the Committee shall have the power, in the event of any merger or
consolidation of any other corporation with or into the Company, or the sale of
all or substantially all of the assets of the Company or an offer to purchase
made by a party other than the Company to all shareholders of the Company for
all or any substantial portion of the outstanding Stock, to amend any or all
outstanding Options to permit the exercise of all such Options prior to the
effectiveness of any such merger, consolidation or sale or the expiration of any
such offer to purchase, and to terminate such Options as of such effectiveness
or expiration. Notwithstanding anything contained in this Section 7.3 with
respect to the number of shares with respect to which an Option is or is to
become exercisable, no Option, to the extent that it has not previously been
exercised, shall be exercisable after it has terminated, including without
limitation, after any termination of such Option pursuant to Section 10 hereof.
7.4 Payment of Option Price. The Option Price upon exercise of any
Option shall 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 total Option Price, (iii) by payment through a
broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or (iv) by a combination of (i) (ii) and/or (iii). The cash
proceeds from such payment will be added to the general funds of the Company and
shall be used for its general corporate purposes. Any shares of previously
acquired Stock tendered to the Company in payment of the Option Price will be
added by the Company to its treasury stock to be used for its general corporate
purposes.
8. WRITTEN NOTICE, ISSUANCE OF STOCK CERTIFICATES, STOCKHOLDER PRIVILEGES
AND PARTIAL EXERCISE
8.1 Written Notice. A Participant wishing to exercise an Option must
give irrevocable written notice to the Company in the form and manner prescribed
by the 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 Committee. Full payment for the shares exercised pursuant to the Option must
be received by the Company 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
Stock. Except as provided in Sections 10, 11 and 12, no Option may be exercised
at any time unless the Participant is then an Employee of the Company or a
Subsidiary.
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8.2 Issuance of Stock Certificates. 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 the Participant or such
other person or certificates for the requisite number of shares of Stock.
8.3 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 date of
issuance of a share certificate for such Stock.
8.4 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.
9. NON-TRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall 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.
10. TERMINATION OF EMPLOYMENT (OTHER THAN BY REASON OF DEATH OR
DISABILITY).
Each Option, to the extent that it has not previously been exercised,
will terminate when the Participant holding such Option (while living) ceases to
be an Employee of the Company or a Subsidiary, unless such cessation of
employment is (i) for the convenience of the Company or a Subsidiary, in which
event the Option will terminate upon the expiration of ninety (90) days after
such cessation of employment, or (ii) a retirement under the Company's or a
Subsidiary's retirement plan, in which event the Option will terminate upon the
expiration of thirteen (13) months after the retirement of such Participant. In
no event, however, will an Option continue after ten years from the date of
granting of such Option. The Committee will have authority to determine whether
an authorized leave of absence or absence on military or governmental service
will constitute a severance of employment for the purposes of this Plan.
11. DISABILITY
If a Participant's employment by the Company or a Subsidiary terminates
by reason of disability (as defined under Section 22(e)(3) of the Internal
Revenue Code of 1986, as it may be amended or any successor statute), the
Option, to the extent exercisable as of the date of such termination, will be
exercisable at any time prior to the earlier of (i) the expiration date of the
Option, or (ii) the expiration of a thirteen-month period following the date of
such termination. To the extent that an Option was not exercisable as of the
date of such termination of employment, such Option or the non-exercisable
portion thereof will be forfeited and no longer subject to any right to
exercise.
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12. DEATH OF PARTICIPANT
In the event of the death of a Participant (i) while employed by the
Company or a Subsidiary, (ii) within the ninety (90) day period specified in
clause (i) of Section 10 after cessation of employment for the convenience of
the Company or a Subsidiary, or (iii) within the thirteen (13) month period
specified in clause (ii) of Section 10 after cessation of employment by reason
of retirement under the Company's or a Subsidiary's retirement plan, the Option
theretofore granted to such Participant may be exercised by the estate of the
Participant or by any person to whom the Participant may have bequeathed the
Option or whom 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, at any time within a period of one Year
after the Participant's death, but not after ten years from the date of granting
of such Option, and in all cases only if and to the extent that the Participant
was entitled to exercise the Option at the time of the Participant's death.
13. ADJUSTMENT OF NUMBER, KIND AND PRICE OF SHARES
In the event any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, exchange of shares or other
securities of the Company, stock split or reverse split, extraordinary dividend,
liquidation, dissolution, or other similar corporate transaction or event
affects Stock such that an adjustment is determined by the Committee to be
appropriate in order prevent dilution or enlargement of Participants' rights
under the Plan, then the Committee will, in a manner that is proportionate to
the change to the Stock and is otherwise equitable, adjust (i) any or all of the
number or kind of shares of Stock reserved for issuance under the Plan, (ii) the
number or kind of shares of Stock to be subject to Options thereafter granted
under the Plan, and (iii) the number and kind of shares of Stock issuable upon
exercise of outstanding Options, or 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.
14. LIMITATION OF RIGHTS
Nothing in this Plan contained shall be construed to give an Employee
any right to be granted an Option 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 or a Subsidiary will employ a Participant for any specified period of
time, in any specific position or at any particular rate or remuneration.
15. 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. No termination or amendment of this Plan
may, without the consent of the
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Participant to whom any Option has previously been granted, adversely affect the
rights of such Participant under such Option.
16. 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 Committee, the Company may
withhold or receive Stock and make cash payments in respect thereof in
satisfaction of a recipient's tax obligations, including tax obligations in
excess of mandatory withholding requirements.
17. GOVERNMENTAL APPROVAL
Each Option will be subject to the requirements 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.
18. EFFECTIVE DATE OF PLAN
This Plan will become effective as of January 1, 1992.
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