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AMERIGAS PROPANE, INC.
EXECUTIVE EMPLOYEE
SEVERANCE PAY PLAN
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TABLE OF CONTENTS
Article No. Page No.
I. Purpose and Term of Plan..................................................... 2
II. Definitions.................................................................. 3
III. Participation and Eligibility for Benefits................................... 5
IV. Benefit...................................................................... 6
V. Method and Duration of Benefit Payments...................................... 9
VI. Administration............................................................... 10
VII. Amendment and Termination.................................................... 12
VIII. Duties of the Company........................................................ 12
IX. Claims Procedures............................................................ 12
X. Miscellaneous................................................................ 14
Signatures.......................................................................... 16
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ARTICLE I
PURPOSE AND TERM OF PLAN
Section 1.01 Purpose of the Plan. The AmeriGas Propane,
Inc. Executive Employee Severance Pay Plan (the "Plan"), as set forth herein,
is intended to alleviate, in part or in full, financial hardships which may be
experienced by certain of those employees of the Company whose employment is
terminated without fault in recognition of their past service to the Company.
In essence, benefits under the Plan are intended to be additional compensation
for past services or for the continuation of specified fringe benefits for a
transitional period. The amount or kind of benefit to be provided is to be
based on the Executive Employee's Compensation, as defined in Section 2.09
hereof, or the fringe benefit programs applicable to the Participant, at the
Participant's Employment Termination Date, as defined in Section 2.11 hereof.
The Plan is not intended to be included in the definitions of "employee pension
benefit plan" and "pension plan" set forth under Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Rather, this Plan
is intended to meet the descriptive requirements of a plan constituting a
"severance pay plan" within the meaning of regulations published by the
Secretary of Labor at Title 29, Code of Federal Regulations, ss. 2510.3-2(b).
Accordingly, the benefits paid by the Plan are not deferred compensation.
Section 1.02 Term of the Plan. The Plan will continue
until such time as the Company, acting in its sole discretion, elects to
modify, supersede or terminate it in accordance with the further provisions
hereof.
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ARTICLE II
DEFINITIONS
Section 2.01 "Affiliate" shall have the meaning ascribed
to such term in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange of 1934, as amended.
Section 2.02 "Benefit" or "Benefits" shall mean any or
all of the benefits that a Participant is entitled to receive pursuant to
Article IV of the Plan.
Section 2.03 "Board of Directors" shall mean the Board
of Directors of AmeriGas Propane, Inc., or any successor thereto.
Section 2.04 "Chairman of the Board" shall mean the
individual serving as the Chairman of the Board of Directors of AmeriGas
Propane, Inc. as of the date of reference.
Section 2.05 "Change of Control" shall mean a change of
control as defined in the form of the AmeriGas Propane, Inc. Change of Control
Agreement set forth in Appendix A hereto and as amended.
Section 2.06 "Chief Executive Officer" shall mean the
individual serving as the Chief Executive Officer of AmeriGas Propane, Inc. as
of the date of reference.
Section 2.07 "Committee" shall mean the administrative
committee designated pursuant to Article VI of the Plan to administer the Plan
in accordance with its terms.
Section 2.08 "Company" shall mean AmeriGas Propane,
Inc., a Pennsylvania corporation. The term "Company" shall include any
successor to AmeriGas Propane, Inc. or any subsidiary or Affiliate, which has
adopted the Plan, or a corporation succeeding to the business of AmeriGas
Propane, Inc., or any subsidiary or Affiliate, by merger, consolidation or
liquidation or purchase of assets or stock or similar transaction.
Section 2.09 "Compensation" shall mean the Participant's
annual base salary and applicable target annual bonus amount, if any, in effect
on the first day of the calendar quarter immediately preceding the
Participant's Employment Termination Date.
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Section 2.10 "Employment Commencement Date" shall mean
the most recent day on which a Participant became an employee of the Company,
any Affiliate of the Company, or any entity whose business or assets have been
acquired by the Company, its Affiliates or by any predecessor of such entities,
unless the Committee determines to give credit for prior service, if any.
Section 2.11 "Employment Termination Date" shall mean
the date on which the current employment relationship between the Participant
and the Company is terminated.
Section 2.12 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
Section 2.13 "Executive Employee" shall mean any
individual employed by the Company at grade level thirty-six (36) or higher.
Section 2.14 "Just Cause" shall mean dismissal due to
misappropriation of funds, substance abuse, habitual insobriety, conviction of
a crime involving moral turpitude, or 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
and its subsidiaries and Affiliates taken as a whole. Disputes with respect to
whether Just Cause exists shall be resolved in accordance with Article IX.
Section 2.15 "Participant" shall mean any Executive
Employee.
Section 2.16 "Plan" shall mean the AmeriGas Propane,
Inc. Executive Employee Severance Pay Plan, as set forth herein, and as the
same may from time to time be amended.
Section 2.17 "Plan Year" shall mean each fiscal year of
the Company during which this Plan is in effect.
Section 2.18 "Salary Continuation Period" shall equal
one business day for each month which is included in the Participant's Years of
Service plus the number of months of paid notice under Section 4.01(c) to a
maximum of fifteen (15) months (eighteen (18) months in the case of the Chief
Executive Officer).
Section 2.19 "Year of Service" shall mean each
twelve-month period (or part thereof) beginning on the Executive Employee's
Employment Commencement Date and ending on each anniversary thereof. Additional
Years
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of Service based on earlier employment with the Company, any Affiliate of the
Company or any entity whose business or assets have been acquired by the
Company, its Affiliates or by any predecessor of such entities, shall be
counted only if permitted by the Committee.
ARTICLE III
PARTICIPATION
AND ELIGIBILITY FOR BENEFITS
Section 3.01 General Eligibility Requirement. In order
to receive a Benefit under this Plan, a Participant's employment must have been
terminated by the Company other than for Just Cause, death, or continuous
illness, injury or incapacity for a period of six consecutive months.
Section 3.02 Substantially Comparable Employment. In
the absence of a Change of Control, notwithstanding anything herein to the
contrary, no Benefits shall be due hereunder in connection with the disposition
of a business, division, or Affiliate by the Company or an Affiliate if
substantially comparable terms of employment, as determined by the Committee,
have been offered by the transferee; provided, however, that the Committee, in
such situation, may determine to have the Company provide any of the Benefits.
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ARTICLE IV
BENEFIT
Section 4.01 Amount of Immediate Cash Benefit. The cash
amount to be paid to a Participant eligible to receive Benefits under Section
3.01 hereof, shall be paid in a lump sum as provided in Section 5.01 hereof and
shall equal the sum of the following, except that any payment under paragraph
(b) below that is based on annual financial performance will be excluded from
the lump sum payment and paid separately as provided below:
(a) An amount equal to the Participant's vacation
entitlement, including banked vacation time, and personal
holidays through the end of the Participant's Salary
Continuation Period;
(b) An amount equal to the Participant's annual
target bonus amount under the applicable annual bonus
plan (or its successor) for the current Plan Year
multiplied by the number of months elapsed in the current
Plan Year to his or her Employment Termination Date and
divided by twelve (12), together with any amounts
previously deferred by the Participant under such plan
(with interest thereon at the rate prescribed by such
plan) as well as any amounts due from the prior year
under such plan but not yet paid, provided, however, that
if the Employment Termination Date occurs in the last two
(2) months of the fiscal year, in lieu of the payment
described above, the amount to be paid pursuant to this
clause (b) shall be determined and paid after the end of
the fiscal year in accordance with the terms and
conditions of the applicable annual bonus plan as though
the Participant were still an Employee, except that the
weighting to be applied to the Participant's
business/financial performance goals under the annual
bonus plan will be deemed to be 100%; provided further,
however, that in the discretion of the Chief Executive
Officer, the amount payable pursuant to this paragraph
(b) may be computed in all cases for Employment
Termination Dates occurring during the first ten (10)
months of the fiscal year;
(c) In the case of the Chief Executive Officer, an
amount of paid notice equal to one hundred thirty (130)
times a fraction the numerator of which is the Chief
Executive Officer's Compensation and the denominator of
which is two hundred
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sixty (260), and in the case of all other Participants,
paid notice calculated as an amount equal to sixty-five
(65) times a fraction the numerator of which is the
Participant's Compensation and the denominator of which
is two-hundred sixty (260);
(d) An amount equal to the number of the
Participant's Years of Service multiplied by twelve (12)
times a fraction the numerator of which is the
Participant's Compensation and the denominator of which
is two-hundred sixty (260); provided, however, that such
amount shall not exceed 100% of the Participant's
Compensation; and
(e) An amount equal to the Participant's
Distribution Equivalent under the AmeriGas Propane, Inc.
1997 Long-term Incentive Plan accrued through the Salary
Continuation Period.
Notwithstanding the foregoing language, the minimum payment pursuant to this
Plan shall not be less than six (6) months of base salary at the level in
effect on the beginning of the quarter immediately preceding the Employment
Termination Date, without regard for target bonus, for Participants in
employment grades 36-39 and one (1) year's base salary in effect on the
beginning of the quarter immediately preceding the Employment Termination Date,
without regard for target bonus, for Participants in employment grades 40 and
higher.
Section 4.02 Executive Benefits. The Participant shall
continue to be entitled, through the end of the Participant's Salary
Continuation Period, to those employee benefits and executive perquisites
listed below, and as in effect from time to time during the Salary Continuation
Period, if any, based upon the amount of coverage or benefit provided at the
Participant's Employment Termination Date:
(a) Basic Life Insurance;
(b) Supplemental Life Insurance;
(c) Medical Plan and Dental
Assistance Plan, including COBRA
continuation coverage;
(d) AmeriGas Propane, Inc. Supplemental Executive
Retirement Plan; and
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(e) UGI Corporation Senior Executive Retirement
Plan, to the extent applicable.
In each case, when contributions are required of all Executive Employees at the
time of the Participant's Employment Termination Date, or thereafter, if
required of all other Executive Employees, the Participant shall be responsible
for making the required contributions, on an after-tax basis only, during the
Salary Continuation Period in order to be eligible for the coverage.
Notwithstanding the foregoing language, the Participant shall not be entitled
to make any Flexible Spending Account (child care or medical) contributions
during the Salary Continuation Period. In lieu of any or all of the coverages
provided under any of clauses (a) through (c) above, the Company may pay to the
Participant, at the time payment is otherwise to be made of cash Benefits
pursuant to Section 5.01 hereof, a single lump sum payment equal to the then
present value of the cost of such coverages. Notwithstanding anything herein to
the contrary, any such coverages shall be discontinued if, and at the time, the
Participant obtains other employment and becomes eligible to participate in the
plan of, or is provided similar coverage by, a new employer; provided, however,
that the Participant shall not be required to refund any sum to the Company
should a lump sum have been paid pursuant to the preceding sentence. Any
applicable conversion rights shall be provided to the Participant at the time
coverage ceases. The Committee shall determine to what extent, if any, any
other perquisites or benefit coverage such as tax preparation services, etc.
shall continue to be provided during the Salary Continuation Period and whether
the Participant shall be entitled to outplacement services or to receive title
to the Participant's Company-supplied automobile, if any, in which case the
value of the Participant's cash Benefit under Section 4.01 hereof shall be
increased accordingly, exclusive of sales tax.
Section 4.03 Retirement Plans. This Plan shall not
govern and shall in no way affect the Participant's interest in, or entitlement
to benefits under, any of the Company's "qualified" retirement plans, and any
payments received under any such plan shall not affect a Participant's right to
any Benefit hereunder.
Section 4.04 Effect on Other Benefits. There shall not
be drawn from the continued provision by the Company of any of the
aforementioned Benefits any implication of continued employment or of continued
right to accrual of retirement benefits under the Company's "qualified"
retirement plans or the AmeriGas Propane, Inc. 1997 Long-Term Incentive Plan,
and a Terminated Employee shall not, except as provided in Section 4.01 (a)
hereof, accrue vacation days, paid holidays, paid sick days or other similar
benefits normally associated with employment for any part of the Salary
Continuation Period during which benefits are payable under this Plan. The
benefits payable under this Plan shall
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be in addition to and not in lieu of any payments or benefits due to the
Participant under any other plan, policy, or program of the Company, and its
subsidiaries, or Affiliates.
ARTICLE V
METHOD AND DURATION OF BENEFIT PAYMENTS
Section 5.01 Method of Payment. The cash Benefits to
which a Participant is entitled, as determined pursuant to Article IV hereof,
shall be paid in a lump sum. Payment shall be made by mailing to the last
address provided by the Participant to the Company. Payment shall be made
within thirty (30) days after the Participant's Employment Termination Date,
except as otherwise provided in Section 4.01 (b).
Section 5.02 Conditions to Entitlement to Benefit. In
order to be eligible to receive any Benefits hereunder, after the Participant's
Employment Termination Date, a Participant must be reasonably available to the
Company and cooperate in any reasonable manner (so as not to interfere
unreasonably with subsequent employment) in providing assistance to the Company
in conducting any matters which are pending at such time, and shall execute a
release and discharge of the Company and its subsidiaries and Affiliates from
any and all claims, demands or causes of action other than as to amounts or
benefits due to the Participant under any plan, program or contract provided
by, or entered into with, the Company. Such release and discharge shall be in
such form as is prescribed by the Committee and counsel for the Company and
shall be executed prior to the payment of any benefits due hereunder. In
addition, no benefits due hereunder shall be paid to a Participant who is
required by Company policy or practice to execute an agreement governing the
assignment of patents or a confidentiality or post-employment agreement unless
executed copies of such agreements are on file with the Company.
Section 5.03 Payments to Beneficiary(ies). Each
Participant shall designate a beneficiary(ies) to receive any Benefits due
hereunder in the event of the Participant's death prior to the receipt of all
such Benefits. Such beneficiary designation shall be made in the manner, and at
the time, prescribed by the Committee in its sole discretion. In the absence of
an effective beneficiary designation hereunder, the Participant's estate shall
be deemed to be the Participant's designated beneficiary.
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ARTICLE VI
ADMINISTRATION
Section 6.01 Appointment. The Committee shall consist
of one (1) or more persons appointed by the Chairman of the Board. Committee
members may be, but need not be, employees of the Company, including the
Chairman of the Board and the Chief Executive Officer, whether or not they are
one and the same person.
Section 6.02 Tenure. Committee members shall serve at
the pleasure of the Chairman of the Board. Committee members may resign at any
time on ten (10) days' written notice, and Committee members may be discharged,
with or without cause, at any time by the Chairman of the Board.
Section 6.03 Authority and Duties. It shall be the duty
of the Committee, on the basis of information supplied to it by the Company, to
determine the eligibility of each Participant for Benefits under the Plan, to
determine the amount of Benefit to which each such Participant may be entitled,
and to determine the manner and time of payment of the Benefit consistent with
the provisions hereof. The Company shall make such payments as are certified to
it by the Committee to be due to Participants. The Committee shall have the
full power and authority to construe, interpret and administer the Plan, to
correct deficiencies therein, and to supply omissions. All decisions, actions,
and interpretations of the Committee shall be final, binding, and conclusive
upon the parties.
Section 6.04 Action by the Committee. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business at a meeting of the Committee. Any action of the Committee may be
taken upon the affirmative vote of a majority of the members of the Committee
at a meeting, or at the direction of the Chairperson, without a meeting, by
mail, telegraph, telephone, or electronic communication device; provided that
all of the members of the Committee are informed of their right to vote on the
matter before the Committee and of the outcome of the vote thereon.
Section 6.05 Officers of the Committee. The Chairman of
the Board shall designate one of the members of the Committee to serve as
Chairperson thereof. The Chairman of the Board shall also designate a person to
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serve as Secretary of the Committee, which person may be, but need not be, a
member of the Committee.
Section 6.06 Compensation of the Committee. Members of
the Committee shall receive no compensation for their services as such.
However, all reasonable expenses of the Committee shall be paid or reimbursed
by the Company upon proper documentation. The Company shall indemnify members
of the Committee against personal liability for actions taken in good faith in
the discharge of their respective duties as members of the Committee.
Section 6.07 Records, Reporting, and Disclosure. The
Committee shall keep all individual and group records relating to Participants
and former Participants and all other records necessary for the proper
operation of the Plan. Such records shall be made available to the Company and
to each Participant for examination during business hours except that a
Participant shall examine only such records as pertain exclusively to the
examining Participant and to the Plan. The Committee shall prepare and shall
file as required by law or regulation all reports, forms, documents and other
items required by ERISA, the Internal Revenue Code, and every other relevant
statute, each as amended, and all regulations thereunder (except that the
Company, as payor of the Benefits, shall prepare and distribute to the proper
recipients all forms relating to withholding of income or wage taxes, Social
Security taxes, and other amounts which may be similarly reportable).
Section 6.08 Actions of the Committee. Whenever a
determination is required of the Committee under the Plan, such determination
shall be made solely at the discretion of the Committee. In addition, the
exercise of discretion by the Committee need not be uniformly applied to
similarly situated Participants and shall be final and binding on each
Participant or beneficiary(ies) to whom the determination is directed.
Section 6.09 Benefits of the Chief Executive Officer.
Whenever a determination is required of the Committee under the Plan, the
individual then serving as the Chairman of the Board of Directors of UGI
Corporation shall be substituted for the Committee, and shall make the
determination with respect to, the Chief Executive Officer as to any matter
that directly pertains to, or affects, the Chief Executive Officer.
Section 6.10 Bonding. The Committee shall arrange any
bonding that may be required by law, but no amount in excess of the amount
required by law, if any, shall be required by the Plan.
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ARTICLE VII
AMENDMENT AND TERMINATION
Section 7.01 Amendment, Suspension, and Termination.
The Company retains the right, at any time and from time to time, to amend,
suspend, or terminate the Plan in whole or in part, for any reason, and without
either the consent of or prior notification to any Participant. No such
amendment shall give the Company the right to recover any amount paid to a
Participant prior to the date of such amendment or to cause the cessation and
discontinuance of payments of Benefits to any person or persons under the Plan
already receiving Benefits.
ARTICLE VIII
DUTIES OF THE COMPANY
Section 8.01 Records. The Company shall supply to the
Committee all records and information necessary to the performance of the
Committee's duties.
Section 8.02 Payment. The Company shall make payments
from its general assets to Participants in accordance with the terms of the
Plan, as directed by the Committee.
ARTICLE IX
CLAIMS PROCEDURES
Section 9.01 Application for Benefits. Participants who
believe they are eligible for benefits under this Plan may apply for such
benefits by completing and filing with the Committee an application for
benefits on a form supplied by the Committee. Before the date on which benefit
payments commence, each such application must be supported by such information
as the Committee deems relevant and appropriate.
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Section 9.02 Appeals of Denied Claims for Benefits. In
the event that any claim for benefits is denied in whole or in part, the
Participant (or beneficiary, if applicable) whose claim has been so denied
shall be notified of such denial in writing by the Committee. The notice
advising of the denial shall specify the reason or reasons for denial, make
specific reference to pertinent Plan provisions, describe any additional
material or information necessary for the claimant to perfect the claim
(explaining why such material or information is needed), and shall advise the
Participant of the procedure for the appeal of such denial. All appeals shall
be made by the following procedure:
(a) The Participant whose claim has been denied
shall file with the Committee a notice of desire to
appeal the denial. Such notice shall be filed within
sixty (60) days of notification by the Committee of claim
denial, shall be made in writing, and shall set forth all
of the facts upon which the appeal is based. Appeals not
timely filed shall be barred.
(b) The Committee shall, within thirty (30) days
of receipt of the Participant's notice of appeal,
establish a hearing date on which the Participant may
make an oral presentation to the Committee in support of
the Participant's appeal. The Participant shall be given
not fewer than ten (10) days' notice of the date set for
the hearing.
(c) The Committee shall consider the merits of
the claimant's written and oral presentations, the merits
of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as the
Committee shall deem relevant. If the claimant elects not
to make an oral presentation, such election shall not be
deemed adverse to the claimant's interest, and the
Committee shall proceed as set forth below as though an
oral presentation of the contents of the claimant's
written presentation had been made.
(d) The Committee shall render a determination
upon the appealed claim, within sixty (60) days of the
hearing date, which determination shall be accompanied by
a written statement as to the reasons therefor. The
determination so rendered shall be binding upon all
parties.
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ARTICLE X
MISCELLANEOUS
Section 10.01 Nonalienation of Benefits. None of the
payments, benefits or rights of any Participant shall be subject to any claim
of any creditor, and, in particular, to the fullest extent permitted by law,
all such payments, benefits and rights shall be free from attachment,
garnishment, trustee's process, or any other legal or equitable process
available to any creditor of such Participant. No Participant shall have the
right to alienate, anticipate, commute, pledge, encumber or assign any of the
benefits or payments which the Participant may expect to receive, contingently
or otherwise, under this Plan.
Section 10.02 No Contract of Employment. Neither the
establishment of the Plan, nor any modification thereof, nor the creation of
any fund, trust or account, nor the payment of any benefits shall be construed
as giving any Participant, or any person whosoever, the right to be retained in
the service of the Company, and all Participants shall remain subject to
discharge to the same extent as if the Plan had never been adopted.
Section 10.03 Severability of Provisions. If any
provision of this Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Plan
shall be construed and enforced as if such provisions had not been included.
Section 10.04 Successors, Heirs, Assigns, and Personal
Representatives. This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties, including each
Participant, present and future. Unless the Committee directs otherwise, the
Company shall require any successor or successors (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, or a division or Affiliate thereof,
(i) to acknowledge expressly that this Plan is binding upon and enforceable
against the Company in accordance with the terms hereof, (ii) to become jointly
and severally obligated with the Company to perform the obligations under this
Plan, and (iii) to agree not to amend or terminate the plan for a period of
three (3) years after the date of succession without the consent of the
affected Participant.
Section 10.05 Headings and Captions. The headings and
captions herein are provided for reference and convenience only, shall not be
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considered part of the Plan, and shall not be employed in the construction of
the Plan.
Section 10.06 Gender and Number. Except where otherwise
clearly indicated by context, the masculine and the neuter shall include the
feminine and the neuter, the singular shall include the plural, and vice-versa.
Section 10.07 Unfunded Plan. The Plan shall not be
funded. The Company may, but shall not be required to, set aside or designate
an amount necessary to provide the Benefits specified herein (including the
establishment of trusts). In any event, no Participant shall have any right to,
or interest in, any assets of the Company which may be applied by the Company
to the payment of Benefits.
Section 10.08 Payments to Incompetent Persons, Etc. Any
benefit payable to or for the benefit of a minor, an incompetent person, or
other person incapable of receipting therefor shall be deemed paid when paid to
such person's guardian or to the party providing or reasonably appearing to
provide for the care of such person, and such payment shall fully discharge the
Company, the Committee and all other parties with respect thereto.
Section 10.09 Lost Payees. A benefit shall be deemed
forfeited if the Committee is unable to locate a Participant to whom a Benefit
is due. Such Benefit shall be reinstated if application is made by the
Participant for the forfeited Benefit while this Plan is in operation.
Section 10.10 Controlling Law. This Plan shall be
construed and enforced according to the laws of the Commonwealth of
Pennsylvania, to the extent not preempted by Federal law, without giving effect
to any Pennsylvania choice of law provisions.
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IN WITNESS WHEREOF, the Company has caused the Plan to be
executed by its duly authorized officer and its corporate seal to be affixed
hereto as of the 27th day of January, 1997.
AMERIGAS PROPANE, INC.
Attest:
By:
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Robert H. Knauss Diane L. Carter
Secretary Vice President - Human Resources
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FORM OF AMERIGAS PROPANE, INC.
CHANGE OF CONTROL AGREEMENT
A-1
(See Exhibit 10.2)