1 EXHIBIT 10.27 AMERIGAS PROPANE, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 2 TABLE OF CONTENTS Article No. Page No. I. Purpose and Term of Plan............................ 2 II. Definitions......................................... 3 III. Participation and Vesting........................... 5 IV. Benefits............................................ 5 V. Form and Timing of Benefit Distribution............. 6 VI. Funding of Benefits................................. 6 VII. The Committee....................................... 7 VIII. Amendment and Termination........................... 9 IX. Miscellaneous Provisions............................ 10 SIGNATURES................................................ 11 (i) 3 ARTICLE I STATEMENT OF PURPOSE Sec. 1.01 Purpose. The purpose of the AGP SERP is to provide a fair and competitive level of retirement benefits to certain management and other highly compensated employees and thereby to attract and retain the highest quality executives to the General Partner of AmeriGas Partners, L.P. and AmeriGas Propane, L.P. In addition, the benefits under the AGP SERP are also designed to compensate certain terminated employees by taking into account in determining their pension benefits periods of time during which payments are made under the AmeriGas Propane, Inc. Executive Severance Pay Plan. To address these purposes, certain Employees of AmeriGas Propane, Inc. (those designated as "Participants") will be provided with supplemental retirement benefits. -2- 4 ARTICLE II DEFINITIONS Sec. 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 Act of 1934, as amended. Sec. 2.02 "AGP" shall mean AmeriGas Propane, Inc. and its Subsidiaries and Affiliates. Sec. 2.03 "AGP SERP" shall mean the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan as set forth herein and as the same may be hereafter amended. Sec. 2.04 "Board" shall mean the Board of Directors of AGP. Sec. 2.05 "Committee" shall mean the administrative committee designated pursuant to Article VII of the Plan to administer the Plan in accordance with its terms. Sec. 2.06 "Compensation" shall mean actual base salary earned plus the amount of annual bonus payable under the applicable bonus or severance plan in each Plan year, including Deferred Compensation, whether or not paid in that Plan year. Compensation shall be pro-rated for all partial fiscal years during which the Employee is a Participant. Sec. 2.07 "Deferred Compensation" shall mean so much of an Employee's compensation payable under the applicable annual bonus plan as would otherwise be payable to a Participant except for an election by the Employee to have such compensation deferred to and paid in a subsequent year, excluding compensation payable under the applicable annual bonus plan for years beginning prior to the Effective Date. Sec. 2.08 "Effective Date" shall mean October 1, 1996. Sec. 2.09 "Employee" shall mean any person in the employ of AGP or any successor employer other than a person (i) whose terms and conditions of employment are determined through collective bargaining with a third party or (ii) who is characterized as an independent contractor by AGP no matter how characterized by a court or government agency and no retroactive -3- 5 characterization of an individual's status for any other purpose shall make an individual an "Employee" for purposes hereof unless specifically determined otherwise by AGP for the purposes of this Plan. Sec. 2.10 "Employment Commencement Date" shall mean the first day on which a Participant became an employee of AGP, any Subsidiary or Affiliate of AGP, or any entity whose business or assets have been acquired by AGP, its Subsidiary or Affiliate or by any predecessor of such entities. If any interruption of employment occurred after the date described in the preceding sentence, then the "Reemployment Commencement Date" shall be the first day on which the Participant became an Employee after the most recent such interruption of the employment relationship between the Employee and AGP or any of its Subsidiaries or Affiliates, unless the Committee determines otherwise. Sec. 2.11 "Participant" shall mean an Employee of AGP who is compensated on a salaried basis at grade level 36 or higher or such other level as the Committee may designate. Sec. 2.12 "Subsidiary" shall mean any corporation in which AGP, directly or indirectly, owns at least a fifty percent (50%) interest or an unincorporated entity of which AGP, directly or indirectly, owns at least fifty percent (50%) of the profits or capital interests. Sec. 2.13 "Termination for Cause" shall mean termination of employment by reason of misappropriation of funds, habitual insobriety, substance abuse, 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 AGP, AmeriGas Partners, L.P., AmeriGas Propane, L.P., or their Subsidiaries and Affiliates, taken as a whole. -4- 6 ARTICLE III PARTICIPATION AND VESTING Sec. 3.01 Vesting. Benefits under this Plan shall vest on the fifth anniversary of a Participant's Employment Commencement Date, unless the Committee determines that a Participant's benefits should vest, in whole or in part, sooner. ARTICLE IV BENEFITS Sec. 4.01 Amount. AGP shall establish for each Participant an account to which shall be credited annually an amount equal to 5% of the Participant's maximum recognizable compensation under 26 U.S.C. Sec. 401(a)(17) and 10% of the Participant's Compensation, if any, in excess of said maximum recognizable compensation. Sec. 4.02 Timing of Credits. Amounts shall first be credited to a Participant's account as of September 30, 1997, and annually thereafter as soon as benefits can be calculated. Sec. 4.03 Benefit Interest. Amounts credited to a Participant's account shall accrue interest from the effective date they are so credited until the date they are paid to the Participant. Such interest shall be credited annually on the opening balance of a Participant's account as of each September 30 after 1997. The rate of interest shall be equal to the total year-to-date rate of return on the trust portfolio for the Retirement Income Plan for Employees of UGI Utilities, Inc. (the "RIP"); except that the rate of interest in any fiscal year may not exceed the rate of return assumed in determining the annual cost of the RIP for that year plus one percent or be less than zero. Sec. 4.04 Divesture. Each Participant shall be divested of, and shall immediately forfeit, any benefit to which the Participant is otherwise entitled under the AGP SERP if the Participant's employment is Terminated for Cause. -5- 7 ARTICLE V FORM AND TIMING OF BENEFIT DISTRIBUTION Sec. 5.01 Form of Benefit Distributions. Benefits payable under the AGP SERP shall be paid in a lump sum to the Participant, the Participant's designated beneficiary, or the Participant's estate. Sec. 5.02 Timing of Benefit Distributions. Benefits payable under the AGP SERP shall be paid as soon as practicable after a Participant's retirement or termination for a reason other than cause; in no event shall such payment be made later than the later of (i) ninety (90) days after a Participant's retirement or Termination for a reason other than Cause, or (ii) December 31 of the year in which such retirement or termination occurs. ARTICLE VI FUNDING OF BENEFITS Sec. 6.01 Source of Funds. The Board may, but shall not be required to, authorize the establishment of a funding vehicle for the benefits described herein. In any event, AGP's obligation hereunder shall constitute a general, unsecured obligation, payable solely out of its general assets, and no Participant shall have any right to any specific assets of AGP or any such vehicle. Sec. 6.02 Participant Contributions. There shall be no contributions made by Participants under the AGP SERP. -6- 8 ARTICLE VII THE COMMITTEE Sec. 7.01 Appointment and Tenure of Committee Members. The Committee shall consist of one or more persons who shall be appointed by and serve at the pleasure of the Chief Executive Officer of AGP (the "CEO"). Any Committee member may resign by delivering his or her written resignation to the CEO. Vacancies arising by the death, resignation or removal of a Committee member may be filled by the CEO. Sec. 7.02 Meetings; Majority Rule. Any and all acts of the Committee taken at a meeting shall be by a majority of all members of the Committee. The Committee may act by vote taken in a meeting (at which a majority of members shall constitute a quorum). The Committee may also act by unanimous consent in writing without the formality of convening a meeting. Sec. 7.03 Delegation. The Committee may, by majority decision, delegate to each or any one of its number, authority to sign any documents on its behalf, or to perform ministerial acts, but no person to whom such authority is delegated shall perform any act involving the exercise of any discretion without first obtaining the concurrence of a majority of the members of the Committee, even though such person alone may sign any document required by third parties. The Committee shall elect one of its number to serve as Chairperson. The Chairperson shall preside at all meetings of the Committee or shall delegate such responsibility to another Committee member. The Committee shall elect one person to serve as Secretary to the Committee. All third parties may rely on any communication signed by the Secretary, acting as such, as an official communication from the Committee. Sec. 7.04 Authority and Responsibility of the Committee. The Committee shall have only such authority and responsibilities as are delegated to it by the CEO or specifically under this Plan. Among those delegable authorities and responsibilities are: (a) maintenance and preservation of records relating to Participants, former Participants, and their beneficiaries; (b) preparation and distribution to Participants of all information and notices required under federal law or the provisions of the AGP SERP; -7- 9 (c) preparation and filing of all governmental reports and other information required under law to be filed or published; (d) construction of the provisions of the AGP SERP, to correct defects therein and to supply omissions thereto; (e) engagement of assistants and professional advisers; (f) arrangement for bonding, if required by law; and (g) promulgation of procedures for determination of claims for benefits. Sec. 7.05 Compensation of Committee Members. The members of the Committee shall serve without compensation for their services as such, but all expenses of the Committee shall be paid or reimbursed by AGP. Sec. 7.06 Committee Discretion. Any discretion, actions or interpretations to be made under the Plan by the Committee on behalf of AGP shall be made in its sole discretion, not acting in a fiduciary capacity, need not be uniformly applied to similarly situated individuals, and shall be final, binding and conclusive upon the parties. Sec. 7.07 Indemnification of the Committee. Each member of the Committee shall be indemnified by AGP against costs, expenses and liabilities (other than amounts paid in settlement to which AGP does not consent) reasonably incurred by the member in connection with any action to which the member may be a party by reason of the member's service on the Committee, except in relation to matters as to which the member shall be adjudged in such action to be personally guilty of gross negligence or willful misconduct in the performance of the member's duties. The foregoing right to indemnification shall be in addition to such other rights as the Committee member may enjoy as a matter of law or by reason of insurance coverage of any kind, but shall not extend to costs, expenses and/or liabilities otherwise covered by insurance or that would be so covered by any insurance then in force if such insurance contained a waiver of subrogation. Rights granted hereunder shall be in addition to and not in lieu of any rights to indemnification to which the Committee member may be entitled pursuant to the by-laws of AGP. Service on the Committee shall be deemed in partial fulfillment of the Committee member's function as an employee, officer, director of AGP, if the Committee member also serves in that capacity. -8- 10 ARTICLE VIII AMENDMENT AND TERMINATION Sec. 8.01 Amendment. The provisions of the AGP SERP may be amended at any time and from time to time by a resolution of the Board; provided, however, that no such amendment shall serve to reduce the benefit that has accrued on behalf of a Participant as of the effective date of the amendment, and, provided further, however, that the Committee may make such amendments as are necessary to keep the AGP SERP in compliance with applicable law and minor amendments which do not materially affect the rights of the Participants or significantly increase the cost to AGP, AmeriGas Partners, L.P. or AmeriGas Propane, L.P. Sec. 8.02 Plan Termination. While it is AGP's intention to continue the AGP SERP indefinitely in operation, the right is, nevertheless, reserved to terminate the AGP SERP in whole or in part at any time; provided, however, that no such termination shall serve to reduce the benefit that has accrued on behalf of a Participant as of the effective date of the termination. -9- 11 ARTICLE IX MISCELLANEOUS PROVISIONS Sec. 9.01 Nonalienation of Benefits. None of the payments, benefits or rights of any Participant under the AGP SERP 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 he or she may expect to receive, contingently or otherwise, under the AGP SERP, except any right to designate a beneficiary or beneficiaries in connection with any form of benefit payment providing benefits after the Participant's death. Sec. 9.02 No Contract of Employment. Neither the establishment of the AGP SERP, 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 Employee, or any person whomsoever, the right to be retained in the service of AGP, and all Participants and other Employees shall remain subject to discharge to the same extent as if the AGP SERP had never been adopted. Sec. 9.03 Severability of Provisions. If any provision of the AGP SERP shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the AGP SERP shall be construed and enforced as if such provision had not been included. Sec. 9.04 Heirs, Assigns and Personal Representatives. The AGP SERP shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant, present and future. Sec. 9.05 Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of the AGP SERP, and shall not be employed in the construction of the AGP SERP. Sec. 9.06 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. -10- 12 Sec. 9.07 Controlling Law. The AGP SERP shall be construed and enforced according to the laws of the Commonwealth of Pennsylvania to the extent not preempted by federal law, which shall otherwise control, and exclusive of any Pennsylvania choice of law provisions. Sec. 9.08 Payments to Minors, 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 AGP, the Board, the Committee and all other parties with respect thereto. Sec. 9.09 Lost Payees. A benefit (including accrued interest) shall be deemed forfeited if the Board or the Committee is unable to locate a Participant to whom payment is due; provided, however, that such benefit shall be reinstated if a claim is made by the proper payee for the forfeited benefit. IN WITNESS WHEREOF, and as evidence of its adoption of the Plan, AGP has caused the same to be executed by its duly authorized officer and its corporate seal to be affixed hereto as of the _____ day of ___________, 1997. Attest: AMERIGAS PROPANE, INC. _________________________ By: ________________________________ Robert H. Knauss Lon R. Greenberg Secretary Chairman of the Board of Directors and Chief Executive Officer -11-