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EXHIBIT 10.16
1997 STOCK PURCHASE LOAN PLAN
1. PURPOSE
The purpose of the 1997 Stock Purchase Loan Plan (the "Plan") is to
provide low-interest loans to employees of UGI Corporation ("UGI") and its
subsidiaries (collectively, the "UGI Companies"), who are covered by and subject
to the UGI Stock Ownership Guidelines (respectively, the "Covered Employees" and
the "Guidelines"), in order to assist the Covered Employees in complying with
the applicable stock ownership requirements set forth in the Guidelines. All
loans made pursuant to the Plan shall be used by Covered Employees for the
purpose of purchasing shares of Common Stock of UGI, without par value (the "UGI
Shares"), to comply with the Guidelines.
2. DEFINITIONS
(a) "Administrative Committee" means those persons designated by the
Plan Lender (as defined below) to administer the Plan.
(b) "Annual Bonus Plan" means the annual bonus plan covering a Plan
Participant, whether such plan is currently existing or adopted in the future.
(c) "Current Market Value" means (i) if quotations are available, the
closing sale price of the UGI Shares on the preceding business day, as appearing
in any regularly published reporting or quotation service; or (ii) if there is
no closing sale price, any reasonable estimate of the market value of the UGI
Shares as of the close of business on the preceding business day; or (iii) the
total cost of the purchase of the UGI Shares, which may include commissions.
(d) "Disability Date" means the date on which an employee would become
eligible for long-term disability benefits under the applicable employee
long-term disability plan.
(e) "Dividend Reinvestment Plan" means UGI's plan through which
stockholders and employees may purchase UGI Shares with the amount of cash
dividends paid on UGI Shares.
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(f) "Fair Market Value" for any given date (or in the event such date
is not a day on which UGI Shares are traded, the last business day prior to such
date) means the closing sale price of the UGI Shares on such date, as reported
as the New York Stock Exchange Composite Transactions for such day.
(g) "Loan Period" means the time period specified in a Purchase Note
(as defined below), during which a balance may be outstanding on a Purchase Loan
(as defined below), such period not to exceed ten (10) years.
(h) "Long-Term Incentive Plan" means the UGI Corporation 1997 Stock
Option and Dividend Equivalent Plan, AmeriGas Propane, Inc. Long-Term Incentive
Plan, or any other long-term incentive plan adopted in the future by UGI or any
of its subsidiaries, which provides for a cash payout.
(i) "Plan Lender" means UGI Properties, Inc., a wholly-owned subsidiary
of UGI, which shall extend credit to a Plan Participant (as defined below) under
the Plan.
(j) "Plan Participant" means a Covered Employee who elects to
participate in the Plan.
(k) "Purchase Date" means the date on which UGI Shares are purchased
under the Plan, either pursuant to the exercise of an option or on the open
market.
(l) "Purchase Loan" means the extension of credit made by the Plan
Lender to a Plan Participant for the purpose of financing all or any portion of
the purchase of UGI Shares, including the payment of any brokerage commission or
tax liability incurred as a result of the exercise of an option, if such
purchase is for the purpose of compliance by the Plan Participant, in whole or
in part, with the Guidelines. The Purchase Loan shall be evidenced by the
Purchase Note (as defined below) and secured by a pledge of the UGI Shares
purchased with the proceeds of such loan.
(m) "Purchase Note" means a full recourse promissory note evidencing a
Purchase Loan, executed by a Plan Participant for the benefit of the Plan
Lender.
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(n) "Required Shares" means the specified number of UGI Shares that a
Covered Employee is required to own in order to comply with the stock ownership
requirements of the Guidelines.
(o) "Retirement Date" means the last day of a Plan Participant's
employment, when such employment has been voluntarily terminated by the Plan
Participant under the applicable employee retirement plan.
(p) "Stock Pledge Agreement" means the agreement entered into by the
Plan Lender and a Plan Participant under which a Plan Participant pledges the
UGI Shares purchased under the Plan, as collateral for the Purchase Loan.
(q) "Stock Power" means the instrument by which a Plan Participant
sells, assigns and transfers to the Plan Lender the UGI Shares that secure the
Purchase Loan.
(r) "Termination Date" means the last day of a Plan Participant's
employment by any of the UGI Companies, other than in the case of retirement,
death or disability of the Plan Participant.
3. STOCK OWNERSHIP GUIDELINES
The Guidelines require designated employees of the UGI Companies to own
a specified number of UGI Shares. The level of such Required Shares is
calculated according to a schedule based upon the base salary of the Covered
Employee. A Covered Employee shall have, depending on his or her designation
under the Guidelines, a grace period of either three (3) months or three (3)
years from the date of coverage under the Guidelines, during which the Covered
Employee must fully comply with the applicable stock ownership requirements set
forth in the Guidelines. A Covered Employee who has a three (3) year grace
period must own at least one third (1/3) of the Required Shares by the end of
the first year of coverage under the Guidelines, followed by ownership of at
least two thirds (2/3) of the Required Shares by the end of the second year of
coverage, and ownership of one hundred percent (100%) of the Required Shares by
the end of the third year of coverage.
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4. SHARES TO BE PURCHASED UNDER THE PLAN
Shares purchased under the Plan may be purchased pursuant to the
exercise of options or on the open market. Any UGI Shares purchased on the open
market by a Covered Employee to comply with the Guidelines in accordance with
the three (3) month grace period must be purchased through UGI's Rule 10b-18
program.
5. EFFECTIVE DATE OF THE PLAN; AVAILABILITY OF LOANS
Both the Guidelines and the Plan are effective as of October 1, 1997.
Purchase Loans shall be offered under the Plan for the entire period of time
during which the Guidelines are in effect, subject to the Plan Lender's right to
interpret, change, amend, modify or terminate the Plan as provided in section 9
herein. No termination date has been established for the Guidelines.
A Covered Employee may obtain more than one Purchase Loan.
Notwithstanding the above, the Plan Lender shall not be required to
make a Purchase Loan to a Covered Employee if making such Purchase Loan would
cause the Plan Lender to violate any covenant or other similar provision in any
indenture, loan agreement, or other agreement, or cause the Plan Lender to
violate any applicable federal, state or local law.
6. ELECTION TO PARTICIPATE IN THE PLAN
A Covered Employee may elect to participate in the Plan in order to
finance all or a portion of the purchase of UGI Shares required to be purchased
by the Covered Employee to comply with the Guidelines. Each Covered Employee who
so elects shall deliver to the Administrative Committee a written notification
of his or her intention to participate in the Plan, not less than five (5)
business days prior to the Purchase Date. The notification shall specify such
information as shall be required by the Administrative Committee, including,
with respect to an
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open market purchase, the amount of the requested Purchase Loan including
whether the Purchase Loan is to cover any brokerage commission, when the payment
is due, in what form the payment should be made (including any wire transfer
requirements), and to whom the payment should be made; and with respect to an
option exercise, the amount of the requested Purchase Loan including whether the
Purchase Loan is to cover the payment of any tax liability.
As a condition to receipt of a Purchase Loan, each Plan Participant
shall be required to execute and deliver to the Administrative Committee a
Purchase Note and a Stock Pledge Agreement, together with the certificate(s) for
the UGI Shares purchased under the Plan and a Stock Power in blank.
A Plan Participant may not participate in the Dividend Reinvestment
Plan with respect to UGI Shares purchased under the Plan.
All Covered Employees are eligible to become Plan Participants, but
they are not obligated, as a condition of employment or for any other purposes,
to participate in the Plan.
7. LOAN PROVISIONS
(a) General
The Plan Lender shall make available to each Covered Employee a
Purchase Loan, with full recourse, payable over a Loan Period of up to ten (10)
years at the option of the Plan Participant, in an amount equal to up to one
hundred percent (100%) of the Current Market Value of the UGI Shares to be
purchased pursuant to the exercise of options or on the open market, in order to
comply with the requirements of the Guidelines. In the event that a Plan
Participant incurs any tax liability as a result of the exercise of an option,
the Purchase Loan may include the amount of such tax liability to the extent
that the amount of the Purchase Loan does not exceed the Current Market Value of
the UGI Shares that are pledged as security for the Purchase Loan on the day the
loan is made.
In the event that a Plan Participant receives more than one Purchase
Loan, all payments of interest and principal shall be applied to the first
Purchase Loan received and, upon
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full repayment of such Purchase Loan, applied to each additional Purchase Loan
in order of receipt by the Plan Participant.
(b) Pledge of Securities
The Purchase Loan shall be secured by a pledge of all of the UGI Shares
purchased under the Plan. Such UGI Shares shall be registered in the name of the
Plan Participant as sole record owner unless the Administrative Committee
approves co-ownership with a spouse. To pledge the UGI shares, the Plan
Participant shall cause to be delivered to the Plan Lender (i) the
certificate(s) for the UGI Shares purchased under the Plan, accompanied by a
duly executed Stock Power in blank, and (ii) a duly executed Stock Pledge
Agreement. The Plan Lender shall maintain possession of the certificate(s) until
such time as the Purchase Loan is paid in full. Throughout the Loan Period, the
Plan Participant shall have the right to vote the UGI Shares and to receive
dividends which, if paid in cash, shall be applied to the interest and principal
amount due on the Purchase Loan, as provided in section 7(c) herein.
The Plan Participant shall not assign, pledge, or otherwise transfer
the UGI Shares purchased under the Plan until the Purchase Loan is paid in full,
except as may be authorized by the Plan Lender in its sole discretion, under
circumstances in which a Plan Participant deems it necessary to sell all or a
portion of the UGI Shares purchased under the Plan due to economic hardship, and
such Plan Participant has been released partially or fully from compliance with
the Guidelines.
(c) Interest Payments
The Purchase Loan shall bear interest at a rate of four percent (4%)
annually. Interest shall be paid on a quarterly basis subsequent to the receipt
of cash dividends on the UGI Shares purchased under the Plan, in an amount equal
to such cash dividends. To the extent that such dividend payment exceeds the
accrued interest payment due at the time of such dividend payment, the excess
amount shall be applied to principal. The Plan Participant shall make the
required quarterly payment in an amount equal to the dividend payment within ten
(10) days of receipt of such dividend payment.
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(d) Principal Payments
(i) Annual Bonus Plan. In the event a Plan Participant is awarded an
Annual Bonus Plan payment during the Loan Period, the Plan Participant shall
make a Purchase Loan principal payment in the amount of twenty percent (20%) of
the gross amount of the Annual Bonus Plan payment. The Plan Participant shall
make the required principal payment within ten (10) days of receipt of such
Annual Bonus Plan payment.
(ii) Long-Term Incentive Plans. In the event a Plan Participant
receives a cash payout under any Long-Term Incentive Plan during the Loan
Period, the Plan Participant shall make a Purchase Loan principal payment in an
amount equal to one third (1/3) of the gross amount of such payout. The Plan
Participant shall make the required principal payment within ten (10) days of
receipt of such Long-Term Incentive Plan payout.
(iii) Gains. In the event a Plan Participant realizes any gains on the
cashless exercise of UGI Common Stock options during the Loan Period, the Plan
Participant shall make a Purchase Loan principal payment in an amount equal to
the amount of such gains, net of any withholding tax. The Plan Participant shall
make the required principal payment within ten (10) days of realization of such
gains.
(iv) Full Payment Upon Maturity of the Purchase Loan. Any outstanding
balance (including accrued and unpaid interest) on the Purchase Loan shall
become due and payable as of the end of the Loan Period.
Not less than sixty (60) days prior to the end of the Loan Period, a
Plan Participant may request an extension of the Loan Period. Such an extension
may be granted at the sole discretion of the Administrative Committee, on a
case-by-case basis.
(e) Term of Purchase Loan
The Purchase Note shall be payable over a Loan Period of up to ten (10)
years, the length of such Loan Period to be determined at the option of the Plan
Participant.
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THE OBLIGATIONS OF EACH PLAN PARTICIPANT UNDER THE PURCHASE NOTE SHALL
BE UNCONDITIONAL AND ABSOLUTE AND, NOTWITHSTANDING THE GENERALITY OF THE
FOREGOING, SHALL NOT BE RELEASED, DISCHARGED OR OTHERWISE AFFECTED BY ANY CHANGE
IN THE EXISTENCE, STRUCTURE OR OWNERSHIP OF ANY OF THE UGI COMPANIES OR THE PLAN
LENDER, OR ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR OTHER SIMILAR
PROCEEDING AFFECTING ANY OF THE UGI COMPANIES OR THE PLAN LENDER, OR THE ASSETS
THEREOF, OR THE MARKET VALUE OF THE UGI SHARES, OR ANY RESULTING RELEASE OR
DISCHARGE OF ANY OBLIGATION OF ANY OF THE UGI COMPANIES OR THE PLAN LENDER, OR
THE EXISTENCE OF ANY CLAIM, SET-OFF OR OTHER RIGHTS WHICH ANY PLAN PARTICIPANT
MAY HAVE AT ANY TIME AGAINST ANY OF THE UGI COMPANIES OR THE PLAN LENDER, OR ANY
OTHER PERSON, WHETHER IN CONNECTION WITH THE PLAN OR WITH ANY UNRELATED MATTER.
(f) Acceleration of Purchase Loan Maturity
(i) Termination of Employment of a Plan Participant. In the event a
Plan Participant's employment is terminated for cause (misappropriation of
funds, substance abuse, habitual insobriety, conviction of a crime involving
moral turpitude or gross negligence in the performance of duties) during the
Loan Period, any outstanding balance (including accrued and unpaid interest) on
the Purchase Loan shall become due and payable not later than three (3) months
following the Termination Date. In the event a Plan Participant's employment is
terminated either voluntarily or involuntarily (other than for cause) during the
Loan Period, any outstanding balance (including accrued and unpaid interest) on
the Purchase Loan shall become due and payable not later than one (1) year
following the Termination Date.
(ii) Retirement of a Plan Participant. In the event a Plan Participant
retires under an applicable employee retirement plan during the Loan Period, any
outstanding balance (including accrued and unpaid interest) on the Purchase Loan
shall become due and payable not later than one (1) year following the
Retirement Date.
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(iii) Death or Disability of a Plan Participant. In the event a Plan
Participant dies or becomes disabled during the Loan Period, any outstanding
balance (including accrued and unpaid interest) on the Purchase Loan shall
become due and payable not later than six (6) months following the date of death
or the Disability Date. No interest shall accrue during such six (6) month
period.
If the outstanding balance (including accrued and unpaid interest) on
the Purchase Loan is not paid in full within six (6) months following the date
of death or the Disability Date, the Plan Lender shall purchase the UGI Shares
that were purchased under the Plan from the disabled Plan Participant or the
estate of the deceased Plan Participant, for a price that shall be equal to the
higher of the Fair Market Value of the UGI Shares on the date of death or the
Disability Date, or the original amount of the Purchase Loan, less any
outstanding balance (including accrued and unpaid interest). If the outstanding
balance (including accrued and unpaid interest) on the Purchase Loan as of the
date of death or the Disability Date exceeds the higher of the Fair Market Value
of the UGI Shares on the date of death or the Disability Date, or the original
amount of the Purchase Loan, less any outstanding balance (including accrued and
unpaid interest), the Plan Lender shall keep the UGI Shares in full satisfaction
of the Purchase Loan.
(g) Prepayment of the Purchase Loan
The Plan Participant shall have the right to voluntarily prepay,
without penalty, all or any portion of the amount due under the Purchase Note,
at any time during the Loan Period. All prepayments shall first be applied to
accrued interest on the Purchase Loan and then to the principal balance due on
the Purchase Loan.
(h) Event of Default
The Plan Participant's failure to pay when due any payment of interest
or principal shall be deemed to be an event of default under the Purchase Note.
Upon the occurrence and continuation of such event of default, the Plan Lender
may declare the outstanding balance (including accrued and unpaid interest) to
be immediately due and payable.
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8. PLAN ADMINISTRATION
An Administrative Committee consisting of one or more persons shall be
designated by the Plan Lender. The Administrative Committee shall be responsible
for overall administration of the Plan, including recordkeeping and preparation
of Purchase Loan documentation.
9. CHANGES IN THE GUIDELINES OR THE PLAN
The UGI Board of Directors' Compensation and Management Development
Committee shall have the right to interpret, change, amend, modify or terminate
the Guidelines at any time. Subject to any required shareholder approval, the
Plan Lender may interpret, change, amend, modify or terminate the Plan at any
time, except that the Plan Lender may not, without the consent of the Plan
Participants, take any action that would adversely affect the rights or the
obligations of the Plan Participants under the Plan in any material respect.
10. MISCELLANEOUS PROVISIONS
(a) Employment Not Guaranteed
Nothing contained in the Plan nor any related agreements, nor any
action taken in the administration of the Plan, shall be construed as a contract
of employment or as giving a Plan Participant any right to continued employment
by any of the UGI Companies.
(b) Applicable Law
The Plan and related documents including the Purchase Note, Stock
Pledge Agreement and Stock Power, shall be governed by and construed and
enforced in accordance and with the laws of the Commonwealth of Pennsylvania,
without regard to the application of the conflicts of law provisions thereof.
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(c) Notice
All notices and other communications required or permitted to be given
under the Plan shall be in writing and shall be deemed to have been duly given
if delivered personally or by inter-office mail as follows: (i) if to the Plan
Lender, to Lynn McCown, Secretary, Administrative Committee, UGI Properties,
Inc., 460 North Gulph Road, King of Prussia, PA 19406; (ii) if to a Plan
Participant, to the last home or business address of the Plan Participant known
to the sender.
10/1/97
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