EXHIBIT 10.36(a)
7/26/2004
Utilities Employees
UGI CORPORATION
2004 OMNIBUS EQUITY COMPENSATION PLAN
NONQUALIFIED STOCK OPTION GRANT LETTER
This STOCK OPTION GRANT, dated as of January 1, 2004 (the "Date of
Grant"), is delivered by UGI Corporation ("UGI") to _____________ (the
"Participant").
RECITALS
The UGI Corporation 2004 Omnibus Equity Compensation Plan (the "Plan")
provides for the grant of options to purchase shares of common stock of UGI. The
Compensation and Management Development Committee of the Board of Directors of
the Company (the "Committee") has decided to make a stock option grant to the
Participant.
NOW, THEREFORE, the parties to this Grant Letter, intending to be legally
bound hereby, agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth in this Grant
Letter and in the Plan, the Committee hereby grants to the Participant a
nonqualified stock option (the "Option") to purchase ______ shares of common
stock of UGI ("Shares") at an exercise price of $33.97 per Share. The Option
shall become exercisable according to Paragraph 2 below.
2. Exercisability of Option. The Option shall become exercisable on the
following dates, if the Participant is employed by, or providing service to, the
Company (as defined below) on the applicable date:
Shares for Which the
Date Option is Exercisable
---- ---------------------
January 1, 2005 33 1/3%
January 1, 2006 33 1/3%
January 1, 2007 33 1/3%
The exercisability of the Option is cumulative, but shall not exceed 100% of the
Shares subject to the Option. If the foregoing schedule would produce fractional
Shares, the number of Shares for which the Option becomes exercisable shall be
rounded down to the nearest whole Share.
3. Term of Option.
(a) The Option shall have a term of ten years from the Date of Grant and
shall terminate at the expiration of that period (5:00 p.m. EST on December 31,
2013), unless it is terminated at an earlier date pursuant to the provisions of
this Grant Letter or the Plan.
(b) If the Participant ceases to be employed by, or provide service to,
the Company, the Option will terminate on the date the Participant ceases such
employment or service. However, if the Participant ceases to be employed by, or
provide service to, the Company by reason of (i) Termination without Cause, (ii)
Retirement (as defined below), (iii) Disability (as defined below), or (iv)
death, the Option held by the Participant will thereafter be exercisable
pursuant to the following terms:
(i) Termination Without Cause. If the Participant terminates
employment or service on account of a Termination without Cause, the
Option will thereafter be exercisable only with respect to that number of
Shares with respect to which the Option is already exercisable on the date
the Participant's employment or service terminates. Such portion of the
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 the
Participant ceases to be employed by, or provide service to, the Company.
(ii) Retirement. If the Participant ceases to be employed by, or
provide service to, the Company on account of Retirement, the Option will
thereafter become exercisable as if the Participant had continued to
provide service to the Company for 36 months after the date of such
Retirement. The Option will terminate upon the earlier of the expiration
date of the Option or the expiration of such 36-month period.
(iii) Disability. If the Participant ceases to be employed by, or
provide service to, the Company on account of Disability, the Option will
thereafter become exercisable as if the Participant had continued to
provide service to the Company for 36 months after the date of such
termination of employment or service. The 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 the Participant while
employed by, or providing service to, the Company, the Option will be
fully and immediately exercisable and may be exercised 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 the
Participant after the Participant has ceased to be employed by, or provide
service to, the Company will not affect the otherwise applicable period
for exercise of the Option determined pursuant to subsections (i), (ii) or
(iii) above. After the Participant's death, the Participant's Option may
be exercised by the Participant's estate.
4. Exercise Procedures.
(a) Subject to the provisions of Paragraphs 2 and 3 above, the Participant
may exercise part or all of the exercisable Option by giving UGI irrevocable
written notice of intent to exercise on a form provided by UGI and delivered in
the manner provided in Section 13 below. Payment of the exercise price and any
applicable withholding taxes must be made prior to issuance of the Shares. The
Participant shall pay the exercise price (i) in cash, (ii) by delivering Shares
(or by attestation to ownership of Shares), which shall be valued at their fair
market value on the date of delivery, which shall have been held by the
Participant for at least six months, and which shall have a fair market value on
the date of exercise equal to the exercise price, (iii) by payment through a
broker in accordance with procedures acceptable to the Committee and
-2-
permitted by Regulation T of the Federal Reserve Board or (iv) by such other
method as the Committee may approve. The Committee may impose such limitations
as it deems appropriate on the use of Shares to exercise the Option.
(b) The obligation of UGI to deliver Shares upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the
Committee, including such actions as UGI's counsel shall deem necessary or
appropriate to comply with relevant securities laws and regulations. UGI may
require that the Participant (or other person exercising the Option after the
Participant's death) represent that the Participant is purchasing Shares for the
Participant's own account and not with a view to or for sale in connection with
any distribution of the Shares, or such other representation as UGI deems
appropriate.
(c) All obligations of UGI under this Grant Letter shall be subject to the
rights of the Company as set forth in the Plan to withhold amounts required to
be withheld for any taxes, if applicable.
5. Definitions. Whenever used in this Grant Letter, the following terms shall
have the meanings set forth below:
(a) "Company" means UGI and its Subsidiaries (as defined in the Plan).
(b) "Disability" means a long-term disability as defined in the Company's
long-term disability plan applicable to the Participant.
(c) "Employed by, or provide service to, the Company" shall mean
employment or service as an employee or director of the Company.
(d) "Retirement" means the Participant's retirement under the Retirement
Income Plan for Employees of UGI Utilities, Inc., if the Participant is covered
by that Retirement Income Plan. "Retirement" for other Company employees means
termination of employment after attaining age 55 with ten or more years of
service with the Company.
(e) "Termination without Cause" means termination of employment 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 may determine in its sole discretion whether, and under what
circumstances, the Participant's voluntary termination upon a significant
reduction in the Participant's duties and responsibilities will constitute a
Termination without Cause for purposes of the Grant Letter.
6. Change of Control. The provisions of the Plan applicable to a Change of
Control shall apply to the Option, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the Plan.
For Participants who are employees of UGI Utilities, Inc. ("Utilities") or a
subsidiary of Utilities, the term "Change of Control" shall mean (i) a Change of
Control of UGI as defined in the Plan, or (ii) one of the events set forth on
Exhibit A with respect to Utilities.
-3-
7. Restrictions on Exercise. Except as the Committee may otherwise permit
pursuant to the Plan, only the Participant may exercise the Option during the
Participant's lifetime and, after the Participant's death, the Option shall be
exercisable by the Participant's estate, to the extent that the Option is
exercisable pursuant to this Grant Letter.
8. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan and
the Terms and Conditions established by the Committee with respect to the Plan,
both of which are incorporated herein by reference, and in all respects shall be
interpreted in accordance with the Plan and the Terms and Conditions. The grant
and exercise of the Option are subject to interpretations, regulations and
determinations concerning the Plan established from time to time by the
Committee in accordance with the provisions of the Plan, including, but not
limited to, provisions pertaining to (i) the registration, qualification or
listing of the Shares, (ii) changes in capitalization of the Company and (iii)
other requirements of applicable law. The Committee shall have the authority to
interpret and construe the Option pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.
9. No Employment or Other Rights. The grant of the Option shall not confer upon
the Participant any right to be retained by or in the employ or service of the
Company and shall not interfere in any way with the right of the Company to
terminate the Participant's employment or service at any time. The right of the
Company to terminate at will the Participant's employment or service at any time
for any reason is specifically reserved.
10. No Shareholder Rights. Neither the Participant, nor any person entitled to
exercise the Participant's rights in the event of the Participant's death, shall
have any of the rights and privileges of a shareholder with respect to the
Shares subject to the Option, until certificates for Shares have been issued
upon the exercise of the Option.
11. Assignment and Transfers. The rights and interests of the Participant under
this Grant Letter may not be sold, assigned, encumbered or otherwise transferred
except, in the event of the death of the Participant, by will or by the laws of
descent and distribution. The rights and protections of the Company hereunder
shall extend to any successors or assigns of the Company and to the Company's
parents, subsidiaries, and affiliates.
12. Applicable Law. The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without giving effect to the conflicts of
laws provisions thereof.
13. Notice. Any notice to UGI provided for in this instrument shall be addressed
to UGI in care of the Corporate Secretary at UGI's headquarters, and any notice
to the Participant shall be addressed to such Participant at the current address
shown on the payroll of the Company, or to such other address as the Participant
may designate to the Company in writing. Any notice shall be delivered by hand,
sent by telecopy or enclosed in a properly sealed envelope addressed as stated
above, registered and deposited, postage prepaid, in a post office regularly
maintained by the United States Postal Service.
-4-
IN WITNESS WHEREOF, UGI has caused its duly authorized officers to execute
and attest this Grant Letter, and the Participant has executed this Grant
Letter, effective as of the Date of Grant.
UGI Corporation
Attest
______________________________ By:_________________________________________
Corporate Secretary Robert H. Knauss
Vice President and General Counsel
I hereby acknowledge receipt of the Plan and the Terms and Conditions
incorporated herein. I accept the Option described in this Grant Letter, and I
agree to be bound by the terms of the Plan, including the Terms and Conditions,
and this Grant Letter. I hereby further agree that all the decisions and
determinations of the Committee shall be final and binding on me and any other
person having or claiming a right under this Grant.
_________________________________
Participant
-5-
EXHIBIT A
Change of Control with Respect to Utilities
For Participants who are employees of Utilities, or a subsidiary of Utilities,
the term "Change of Control" shall include the events set forth in this Exhibit
A with respect to Utilities, and the defined terms set forth used in this
Exhibit A, if not defined in the Plan, shall have the following meanings:
1. "Change of Control" shall include any of the following events:
(A) UGI and the UGI Subsidiaries fail to own more than fifty percent
(50%) of the then outstanding shares of common stock of Utilities or more than
fifty percent (50%) of the combined voting power of the then outstanding voting
securities of Utilities entitled to vote generally in the election of directors;
or
(B) Completion by Utilities of a reorganization, merger or
consolidation (a "Business Combination"), in each case, with respect to which
all or substantially all of the individuals and entities who were the respective
Beneficial Owners of Utilities' outstanding common stock and voting securities
immediately prior to such Business Combination do not, following such Business
Combination, Beneficially Own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination in substantially the same proportion as
their ownership immediately prior to such Business Combination of Utilities'
outstanding common stock and voting securities, as the case may be; or
(C) Completion of a complete liquidation or dissolution of the
Utilities or sale or other disposition of all or substantially all of the assets
of Utilities other than to a corporation with respect to which, following such
sale or disposition, more than 50% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of the
individuals and entities who were the Beneficial Owners, respectively, of
Utilities' outstanding common stock and voting securities immediately prior to
such sale or disposition in substantially the same proportion as their ownership
of Utilities' outstanding common stock and voting securities, as the case may
be, immediately prior to such sale or disposition.
2. "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
3. A Person shall be deemed the "Beneficial Owner" of any securities: (i) that
such Person or any of such Person's Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that a person shall not be deemed the "Beneficial Owner" of
securities tendered pursuant to a
A-1
tender or exchange offer made by such Person or any of such person's Affiliates
or Associates until such tendered securities are accepted for payment, purchase
or exchange; (ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of any security under this clause (ii) as a result of an oral or written
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the proviso to
clause (ii) above) or disposing of any securities; provided, however, that
nothing in this Section 1(c) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of such
acquisition.
4. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
5. "Person" shall mean an individual or a corporation, partnership, trust,
unincorporated organization, association, or other entity.
6. "UGI Subsidiary" shall mean any corporation in which UGI directly or
indirectly, owns at least a fifty percent (50%) interest or an unincorporated
entity of which UGI, as applicable, directly or indirectly, owns at least fifty
percent (50%) of the profits or capital interests.
A-2