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EXHIBIT 10.14
AMENDED AGREEMENT
Amended Agreement made as of the 29th day of July, 1997, between UGI
Corporation, a Pennsylvania corporation (the "Company"), and Xxxxxxx X. Xxxx
(the "Employee").
WHEREAS, the Company and the Employee entered into an Agreement as of
June 28, 1996, to provide for certain payments to be made to the Employee in the
event of a change of control of the Company; and
WHEREAS, the Company and the Employee now wish to amend the Agreement,
as permitted by Section 16 of the Agreement, to provide that the Company will
also assist the Employee with taxes that may become due if payments are made
under the Agreement; and
WHEREAS, the Employee is presently employed by UGI Utilities, Inc., a
majority owned subsidiary of the Company, as its President and Chief Executive
Officer; and
WHEREAS, the Company considers it essential to xxxxxx the employment of
well qualified key management personnel, and, in this regard, the board of
directors of the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control of the Company may exist
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of key management
personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
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dedication of key members of the Company's management to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a change in control of the Company, although no such
change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of UGI
Utilities, Inc., the Company agrees that the Employee shall receive the
compensation set forth in this Agreement in the event his employment with UGI
Utilities, Inc. is terminated subsequent to a "Change of Control" (as defined in
Section 1 hereof) of the Company as a cushion against the financial and career
impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree that the Amended Agreement shall read as
follows:
1. Definitions. For all purposes of this Agreement, the following terms
shall have the meanings specified in this Section unless the context clearly
otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the average of the total cash
remuneration received by the Employee in all capacities with the Company, and
its Subsidiaries or Affiliates, as reported for Federal income tax purposes on
Form W-2, together with any amounts the payment of which has been deferred by
the Employee
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under any deferred compensation plan of the Company, and its Subsidiaries or
Affiliates, or otherwise and any and all salary reduction authorized amounts
under any of the benefit plans or programs of the Company, and its Subsidiaries
or Affiliates, but excluding any amounts attributable to the exercise of stock
options granted to the Employee under the Company's Stock Option and Dividend
Equivalent Plan or its successor, for the five calendar years (or such number of
actual full calendar years of employment, if less than five) immediately
preceding the calendar year in which occurs a Change of Control or the
Employee's Termination Date, whichever period produces the higher amount.
(c) 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 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
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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 voting
securities of the Company; 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 days after the date of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Change of Control" shall mean:
Any Person (except the Employee, his Affiliates and Associates, the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
employee benefit plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner in the aggregate of 20% or more of either
(i) the then outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the
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combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Company Voting
Securities"), in either case unless the members of the Company's Executive
Committee in office immediately prior to such acquisition determine within five
business days of the receipt of actual notice of such acquisition that the
circumstances do not warrant the implementation of the provisions of this
Agreement; or
Individuals who, as of the beginning of any twenty-four month period,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any individual becoming a
director subsequent to the beginning of such period whose election or nomination
for election by the Company's stockholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act); or
Consummation by the Company 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 the Outstanding Company Common Stock and Company 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
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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 the Outstanding Company Common Stock and
Company Voting Securities, as the case may be, in any such case unless the
members of the Company's Executive Committee in office immediately prior to such
Business Combination determine at the time of such Business Combination that the
circumstances do not warrant the implementation of the provisions of this
Agreement; or
(i) Consummation of a complete liquidation or dissolution of the
Company or (ii) sale or other disposition of all or substantially all of the
assets of the Company 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 the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such sale or disposition in substantially the
same proportion as their ownership of the Outstanding Company Common Stock and
Company Voting Securities, as the case may be, immediately prior to such sale or
disposition, in any such case unless the members of the Company's Executive
Committee in office immediately prior to such sale or disposition determine at
the time of such sale or disposition that the circumstances do not warrant the
implementation of the provisions of this Agreement.
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(f) "Cause" shall mean 1) misappropriation of funds, 2) habitual
insobriety or substance abuse, 3) conviction of a crime involving moral
turpitude, or 4) 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.
(g) "Good Reason Termination" shall mean a Termination of Employment
initiated by the Employee upon one or more of the following occurrences:
(i) any failure of the Company to comply with and satisfy any
of the terms of this the Agreement;
(ii) any significant involuntary reduction of the authority,
duties or responsibilities held by the Employee immediately prior to
the Change of Control;
(iii) any involuntary removal of the Employee from the
employment grade, compensation level or officer positions which the
Employee holds with the Company or, if the Employee is employed by a
Subsidiary, with a Subsidiary, held by him immediately prior to the
Change of Control, except in connection with promotions to higher
office;
(iv) any involuntary reduction in the Employee's target level
of annual and long-term compensation as in effect immediately prior to
the Change of Control;
(v) any transfer of the Employee, without his express written
consent, to a location which is outside the King of Prussia,
Pennsylvania area (or the general area in which his principal place of
business
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immediately preceding the Change of Control may be located at such time
if other than King of Prussia, Pennsylvania) by more than fifty miles,
other than on a temporary basis (less than 12 months); and
(vi) the Employee being required to undertake business travel
to an extent substantially greater than the Employee's business travel
obligations immediately prior to the Change of Control.
(h) "Normal Retirement Date" shall mean the first day of the calendar
month coincident with or next following the Employee's 62nd birthday.
(i) "Subsidiary" shall mean any corporation in which the Company,
directly or indirectly, owns at least a 50% interest or an unincorporated entity
of which the Company, directly or indirectly, owns at least 50% of the profits
or capital interests.
(j) "Termination Date" shall mean the date of receipt of the Notice of
Termination described in Section 2 hereof or any later date specified therein,
as the case may be.
(k) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
2. Notice of Termination. Any Termination of Employment following a
Change of Control shall be communicated by a Notice of Termination to the other
party hereto given in accordance with Section 14 hereof. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific provision in this Agreement relied upon, (ii) briefly summarizes
the facts and circumstances deemed to provide a basis for the Employee's
Termination of Employment under the provision so indicated, and (iii) if the
Termination Date is other than the date of receipt of such notice,
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specifies the Termination Date (which date shall not be more than 15 days after
the giving of such notice).
3. Severance Compensation upon Termination.
(a) Subject to the provisions of Section 11 hereof, in the event of the
Employee's involuntary Termination of Employment for any reason other than Cause
or in the event of a Good Reason Termination, in either event within three years
after a Change of Control, the Company shall pay to the Employee, upon the
execution of a release, in the form required by the Company of its terminating
executives prior to the Change of Control, within 15 days after the Termination
Date (or as soon as possible thereafter in the event that the procedures set
forth in Section 11(b) hereof cannot be completed within 15 days), an amount in
cash equal to 1.5 times the Employee's Base Compensation, subject to customary
employment taxes and deductions.
(b) In the event the Employee's Normal Retirement Date would occur
prior to 18 months after the Termination Date, the aggregate cash amount
determined as set forth in (a) above shall be reduced by multiplying it by a
fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 548 days.
4. Other Payments. The payment due under Section 3 hereof shall be in
addition to and not in lieu of any payments or benefits due to the Employee
under any other plan, policy or program of the Company, and its Subsidiaries or
Affiliates.
5. Trust Fund. The Company sponsors an irrevocable trust fund pursuant
to a trust agreement to hold assets to satisfy its obligations to employees
under this Agreement. Funding of such trust fund shall be subject to the
discretion of the Board
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or the Company's Executive Committee, as set forth in the agreement pursuant to
which the fund has been established.
6. Enforcement.
(a) In the event that the Company shall fail or refuse to make payment
of any amounts due the Employee under Sections 3 and 4 hereof within the
respective time periods provided therein, the Company shall pay to the Employee,
in addition to the payment of any other sums provided in this Agreement,
interest, compounded daily, on any amount remaining unpaid from the date payment
is required under Section 3 or 4, as appropriate, until paid to the Employee, at
the rate from time to time announced by Mellon Bank, N.A. as its "prime rate"
plus 1%, each change in such rate to take effect on the effective date of the
change in such prime rate.
(b) It is the intent of the parties that the Employee not be required
to incur any expenses associated with the enforcement of his rights under this
Agreement by arbitration, litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Employee hereunder. Accordingly, the Company shall pay the
Employee on demand the amount necessary to reimburse the Employee in full for
all reasonable expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for herein be reduced by any compensation earned by other employment or
otherwise.
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8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Employee's continuing or future participation in or rights under
any benefit, bonus, incentive or other plan or program provided by the Company,
or any of its Subsidiaries or Affiliates, and for which the Employee may
qualify.
9. No Set-Off. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the Company may
have against the Employee or others.
10. Taxes. Any payment required under this Agreement shall be subject
to all requirements of the law with regard to the withholding of taxes, filing,
making of reports and the like, and the Company shall use its best efforts to
satisfy promptly all such requirements.
11. Certain Increase in Payments.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined that any payment or distribution by the
Company to or for the benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would constitute an "excess parachute payment" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the Employee shall be paid an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Employee after deduction of
any excise tax imposed under Section 4999 of the Code, and any federal, state
and local income and employment tax and excise tax imposed upon the Gross-Up
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Payment shall be equal to the Payment. For purposes of determining the amount of
the Gross-Up Payment, the Employee shall be deemed to pay federal income tax and
employment taxes at the highest marginal rate of federal income and employment
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Employee's residence on the Termination Date, net of
the maximum reduction in federal income taxes that may be obtained from the
deduction of such state and local taxes.
(b) All determinations to be made under this Section 11 shall be made
by Coopers & Xxxxxxx (or, at the Company's option, the Company's independent
public accountant immediately prior to the Change of Control (the "Accounting
Firm")), which firm shall provide its determinations and any supporting
calculations both to the Company and the Employee within 10 days of the
Termination Date. Any such determination by the Accounting Firm shall be binding
upon the Company and the Employee. Within five days after the Accounting Firm's
determination, the Company shall pay (or cause to be paid) or distribute (or
cause to be distributed) to or for the benefit of the Employee such amounts as
are then due to the Employee under this Agreement.
(c) In the event that upon any audit by the Internal Revenue Service,
or by a state or local taxing authority, of the Payment or Gross-Up Payment, a
change is finally determined to be required in the amount of taxes paid by the
Employee, appropriate adjustments shall be made under this Agreement such that
the net amount which is payable to the Employee after taking into account the
provisions of Section 4999 of the Code shall reflect the intent of the parties
as expressed in subsection (a) above, in the manner determined by the Accounting
Firm.
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(d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses resulting
from or relating to its determinations pursuant to subsections (b) and (c)
above, except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Accounting Firm, which firm shall
provide its determinations and any supporting calculations both to the Company
and the Employee within 10 days of the Termination Date. Any such determination
by the Accounting Firm shall be binding upon the Company and the Employee.
12. Term of Agreement. The term of this Agreement shall be for five
years from the date hereof and shall be automatically renewed for successive
one-year periods unless the Company notifies the Employee in writing that this
Agreement will not be renewed at least sixty days prior to the end of the
current term; provided, however, that (i) after a Change of Control during the
term of this Agreement, this Agreement shall remain in effect until all of the
obligations of the parties hereunder are satisfied or have expired, and (ii)
this Agreement shall terminate if, prior to a Change of Control, the employment
of the Employee with the Company or any of its Subsidiaries, as the case may be,
shall terminate for any reason.
13. Successor Company. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger or otherwise) to all
or substantially all of the business and/or assets of the Company, by agreement
in form and substance satisfactory to the Employee, to acknowledge expressly
that this Agreement is
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binding upon and enforceable against the Company in accordance with the terms
hereof, and to become jointly and severally obligated with the Company to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession or successions had
taken place. Failure of the Company to notify the Employee in writing as to such
successorship, to provide the Employee the opportunity to review and agree to
the successor's assumption of this Agreement or to obtain such agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement.
As used in this Agreement, the Company shall mean the Company as hereinbefore
defined and any such successor or successors to its business and/or assets,
jointly and severally.
14. Notice. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be delivered personally or mailed by registered or certified mail,
return receipt requested, or by overnight express courier service, as follows:
If to the Company, to:
UGI Corporation
000 Xxxxx Xxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Attention: Corporate Secretary
If to the Employee, to:
0000 Xxx Xxxxx Xxxx
Xxxxxx, XX 00000
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section; provided, however, that if no such notice is given by
the Company following a Change of
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Control, notice at the last address of the Company or to any successor pursuant
to Section 13 hereof shall be deemed sufficient for the purposes hereof. Any
such notice shall be deemed delivered and effective when received in the case of
personal delivery, five days after deposit, postage prepaid, with the U.S.
Postal Service in the case of registered or certified mail, or on the next
business day in the case of overnight express courier service.
15. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.
16. Contents of Agreement, Amendment and Assignment. This Agreement
supersedes all prior agreements, sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment executed by the
Employee and the Company's Chair of the Executive Committee. The provisions of
this Agreement may require a variance from the terms and conditions of certain
compensation or bonus plans under circumstances where such plans would not
provide for payment thereof in order to obtain the maximum benefits for the
Employee. It is the specific intention of the parties that the provisions of
this Agreement shall supersede any provisions to the contrary in such plans, and
such plans shall be deemed to have been amended to correspond with this
Agreement without further action by the Company or the Board.
17. No Right to Continued Employment. Nothing in this Agreement shall
be construed as giving the Employee any right to be retained in the employ of
the Company.
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18. Successors and Assigns. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of the Employee and the
Company hereunder shall not be assignable in whole or in part.
19. Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
20. Remedies Cumulative; No Waiver. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof.
21. Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
22. Arbitration. In the event of any dispute under the provisions of
this Agreement other than a dispute in which the sole relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim
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settled by arbitration in King of Prussia, Pennsylvania, in accordance with the
commercial arbitration rules then in effect of the American Arbitration
Association, before one arbitrator who shall be an executive officer or former
executive officer of a publicly traded corporation, selected by the parties. Any
award entered by the arbitrator shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. The arbitrator shall have no authority to modify any
provision of this Agreement or to award a remedy for a dispute involving this
Agreement other than a benefit specifically provided under or by virtue of the
Agreement. The Company shall be responsible for all of the fees of the American
Arbitration Association and the arbitrator and any expenses relating to the
conduct of the arbitration (including reasonable attorneys' fees and expenses).
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Amended Agreement as of the date first above written.
ATTEST:
[Seal] UGI CORPORATION
_______________________ By_________________________
Corporate Secretary Xxx Xxxxxxxxx
Chairman, President and
Chief Executive Officer
_______________________ ___________________________
Witness Xxxxxxx X. Xxxx
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